West Virginia | 26-0208835 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer £ | Accelerated filer £ | |||
Non-accelerated filer £ | Smaller reporting company R | |||
(Do not check if a smaller reporting company) |
PART I – FINANCIAL INFORMATION | ||
Page | ||
Item 1. | Financial Statements | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II – OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
• | changes in production volumes and worldwide demand, including economic conditions that might impact demand; |
• | volatility of commodity prices for crude oil, natural gas and NGLs; |
• | the impact of governmental policies and/or regulations, including changes in environmental and other laws, the interpretation and enforcement related to those laws and regulations, liabilities arising thereunder and the costs to comply with those laws and regulations; |
• | potential declines in the value of this Partnership's crude oil and natural gas properties resulting in impairments; |
• | changes in estimates of proved reserves; |
• | inaccuracy of reserve estimates and expected production rates; |
• | potential for production decline rates from this Partnership's wells to be greater than expected; |
• | availability of future cash flows for investor distributions or funding of development activities; |
• | timing and extent of this Partnership's success in further developing and producing this Partnership's reserves; |
• | the Managing General Partner's ability to acquire supplies and services at reasonable prices; |
• | timing and receipt of necessary regulatory permits; |
• | risks incidental to the additional development and operation of crude oil and natural gas wells; |
• | this Partnership's future cash flows, liquidity and financial condition; |
• | competition in the oil and gas industry; |
• | availability of sufficient pipeline, gathering and other transportation facilities and related infrastructure to process and transport this Partnership's production, particularly in the Wattenberg Field, and the impact of these facilities on the price this Partnership receives for its production; |
• | success of the Managing General Partner in marketing this Partnership's crude oil, natural gas and NGLs; |
• | impact of environmental events, governmental and other third-party responses to such events and the Managing General Partner's ability to insure adequately against such events; |
• | cost of pending or future litigation; |
• | adjustments relating to asset dispositions that may be unfavorable to this Partnership; |
• | the Managing General Partner's ability to retain or attract senior management and key technical employees; and |
• | success of strategic plans, expectations and objectives for future operations of the Managing General Partner. |
June 30, 2013 | December 31, 2012 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 14,402,278 | $ | 570,376 | |||
Accounts receivable | 628,545 | 865,944 | |||||
Crude oil inventory | 41,152 | 42,939 | |||||
Due from Managing General Partner-derivatives | — | 4,409,574 | |||||
Due from Managing General Partner-other, net | 657,340 | 800,598 | |||||
Total current assets | 15,729,315 | 6,689,431 | |||||
Crude oil and natural gas properties, successful efforts method, at cost | 55,758,995 | 79,601,649 | |||||
Less: Accumulated depreciation, depletion and amortization | (30,374,901 | ) | (38,868,788 | ) | |||
Crude oil and natural gas properties, net | 25,384,094 | 40,732,861 | |||||
Other assets | 69,038 | 46,711 | |||||
Total Assets | $ | 41,182,447 | $ | 47,469,003 | |||
Liabilities and Partners' Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 558,220 | $ | 90,570 | |||
Due to Managing General Partner-derivatives | — | 2,004,594 | |||||
Total current liabilities | 558,220 | 2,095,164 | |||||
Asset retirement obligations | 901,016 | 1,110,093 | |||||
Total liabilities | 1,459,236 | 3,205,257 | |||||
Commitments and contingent liabilities | |||||||
Partners' equity: | |||||||
Managing General Partner | 9,503,622 | 11,183,638 | |||||
Limited Partners - 4,470 units issued and outstanding | 30,219,589 | 33,080,108 | |||||
Total Partners' equity | 39,723,211 | 44,263,746 | |||||
Total Liabilities and Partners' Equity | $ | 41,182,447 | $ | 47,469,003 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Crude oil, natural gas and NGLs | $ | 1,368,588 | $ | 998,725 | $ | 3,035,929 | $ | 2,477,534 | |||||||
Commodity price risk management gain (loss), net | 69,520 | (417,354 | ) | (417,689 | ) | 1,103,976 | |||||||||
Total revenues | 1,438,108 | 581,371 | 2,618,240 | 3,581,510 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Crude oil, natural gas and NGLs production costs | 340,408 | 348,155 | 648,908 | 711,013 | |||||||||||
Direct costs - general and administrative | 42,093 | 43,331 | 86,742 | 82,115 | |||||||||||
Depreciation, depletion and amortization | 774,788 | 691,453 | 1,676,700 | 1,579,289 | |||||||||||
Accretion of asset retirement obligations | 16,897 | 15,634 | 33,470 | 30,970 | |||||||||||
Total operating costs and expenses | 1,174,186 | 1,098,573 | 2,445,820 | 2,403,387 | |||||||||||
Income (loss) from continuing operations | 263,922 | (517,202 | ) | 172,420 | 1,178,123 | ||||||||||
Loss from discontinued operations | (253,838 | ) | (422,500 | ) | (33,370 | ) | (673,685 | ) | |||||||
Net income (loss) | $ | 10,084 | $ | (939,702 | ) | $ | 139,050 | $ | 504,438 | ||||||
Income (loss) from continuing operations | $ | 263,922 | $ | (517,202 | ) | $ | 172,420 | $ | 1,178,123 | ||||||
Less: Managing General Partner interest in income (loss) from continuing operations | 97,651 | (191,365 | ) | 63,795 | 435,906 | ||||||||||
Income (loss) from continuing operations allocated to Investor Partners | $ | 166,271 | $ | (325,837 | ) | $ | 108,625 | $ | 742,217 | ||||||
Loss from discontinued operations | $ | (253,838 | ) | $ | (422,500 | ) | $ | (33,370 | ) | $ | (673,685 | ) | |||
Less: Managing General Partner interest in loss from discontinued operations | (93,920 | ) | (156,325 | ) | (12,347 | ) | (249,263 | ) | |||||||
Loss from discontinued operations allocated to Investor Partners | $ | (159,918 | ) | $ | (266,175 | ) | $ | (21,023 | ) | $ | (424,422 | ) | |||
Net income (loss) per Investor Partner unit | |||||||||||||||
Continuing operations | $ | 37 | $ | (73 | ) | $ | 24 | $ | 166 | ||||||
Discontinued operations | (36 | ) | (59 | ) | (4 | ) | (95 | ) | |||||||
Net income (loss) per Investor Partner unit | $ | 1 | $ | (132 | ) | $ | 20 | $ | 71 | ||||||
Investor Partner units outstanding | 4,470 | 4,470 | 4,470 | 4,470 |
Six months ended June 30, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 139,050 | $ | 504,438 | |||
Adjustments to net income to reconcile to net cash from operating activities: | |||||||
Depreciation, depletion and amortization | 1,831,910 | 2,475,889 | |||||
Accretion of asset retirement obligations | 40,347 | 38,709 | |||||
Change in unrealized loss on derivative transactions | 1,693,233 | 877,238 | |||||
Loss on sale of crude oil and natural gas properties | 491,059 | — | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 237,399 | 292,550 | |||||
Crude oil inventory | (3,127 | ) | 7,989 | ||||
Other assets | (22,327 | ) | (19,134 | ) | |||
Accounts payable and accrued expenses | 3,999 | (36,916 | ) | ||||
Due from Managing General Partner-other, net | 268,043 | 100,320 | |||||
Net cash from operating activities | 4,679,586 | 4,241,083 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures for crude oil and natural gas properties | — | (361,858 | ) | ||||
Proceeds from sale of crude oil and natural gas properties | 13,831,901 | — | |||||
Net cash from investing activities | 13,831,901 | (361,858 | ) | ||||
Cash flows from financing activities: | |||||||
Distributions to Partners | (4,679,585 | ) | (2,939,226 | ) | |||
Net cash from financing activities | (4,679,585 | ) | (2,939,226 | ) | |||
Net change in cash and cash equivalents | 13,831,902 | 939,999 | |||||
Cash and cash equivalents, beginning of period | 570,376 | 2,690,377 | |||||
Cash and cash equivalents, end of period | $ | 14,402,278 | $ | 3,630,376 | |||
Supplemental disclosure of non-cash activity: | |||||||
Change in accounts payable and accrued expenses related to disposition of properties and equipment | $ | (463,651 | ) | $ | — | ||
Change in due from managing general partner-other,net related to disposition of properties and equipment | 124,785 | — |
June 30, 2013 | December 31, 2012 | ||||||
Crude oil, natural gas and NGLs sales revenues collected from this Partnership's third-party customers | $ | 883,219 | $ | 871,548 | |||
Commodity price risk management, realized gain | 293,049 | 356,531 | |||||
Other (1) | (518,928 | ) | (427,481 | ) | |||
Total Due from Managing General Partner-other, net | $ | 657,340 | $ | 800,598 |
(1) | All other unsettled transactions, excluding derivative instruments, between this Partnership and the Managing General Partner. The majority of these are operating costs and general and administrative costs which have not been deducted from distributions. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Well operations and maintenance | $ | 463,931 | $ | 690,773 | $ | 1,008,643 | $ | 1,231,347 | |||||||
Gathering, compression and processing fees | 56,575 | 116,200 | 122,824 | 201,363 | |||||||||||
Direct costs - general and administrative | 368,144 | 43,331 | 412,793 | 82,115 | |||||||||||
Refracturing and recompletion costs | — | 360,239 | — | 360,239 | |||||||||||
Cash distributions (1) | 876,854 | 562,135 | 1,751,281 | 1,089,933 |
(1) | Cash distributions include $10,425 and $19,816 during the three and six months ended June 30, 2013, respectively, and $1,266 and $2,420 during the three and six months ended June 30, 2012, respectively, related to equity cash distributions for Investor Partner units repurchased by PDC. |
Balance Sheet | |||||
Line Item | Level 2 | ||||
Assets: | |||||
Current | |||||
Commodity-based derivatives | Due from Managing General Partner-derivatives | $ | 4,409,574 | ||
Total assets | 4,409,574 | ||||
Liabilities: | |||||
Current | |||||
Basis protection derivative contracts | Due to Managing General Partner-derivatives | 2,004,594 | |||
Total liabilities | 2,004,594 | ||||
Net asset | $ | 2,404,980 |
Three months ended June 30, | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Statement of operations line item: | Reclassification of Realized Gains (Losses) included in Prior Periods Unrealized | Realized Gains for the Current Period | Total | Reclassification of Realized Gains (Losses) included in Prior Periods Unrealized | Realized and Unrealized Losses for the Current Period | Total | ||||||||||||||||||
Commodity price risk management gain (loss), net | ||||||||||||||||||||||||
Realized gains (losses) | $ | 561,768 | $ | 69,520 | $ | 631,288 | $ | 1,120,484 | $ | (17,336 | ) | $ | 1,103,148 | |||||||||||
Unrealized losses | (561,768 | ) | — | (561,768 | ) | (1,120,484 | ) | (400,018 | ) | (1,520,502 | ) | |||||||||||||
Total | $ | — | $ | 69,520 | $ | 69,520 | $ | — | $ | (417,354 | ) | $ | (417,354 | ) | ||||||||||
Six months ended June 30, | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Statement of operations line item: | Reclassification of Realized Gains (Losses) included in Prior Periods Unrealized | Realized Losses for the Current Period | Total | Reclassification of Realized Gains (Losses) included in Prior Periods Unrealized | Realized and Unrealized Gains for the Current Period | Total | ||||||||||||||||||
Commodity price risk management gain, net | ||||||||||||||||||||||||
Realized gains (losses) | $ | 1,693,233 | $ | (417,689 | ) | $ | 1,275,544 | $ | 1,562,032 | $ | 419,182 | $ | 1,981,214 | |||||||||||
Unrealized gains (losses) | (1,693,233 | ) | — | (1,693,233 | ) | (1,562,032 | ) | 684,794 | (877,238 | ) | ||||||||||||||
Total | $ | — | $ | (417,689 | ) | $ | (417,689 | ) | $ | — | $ | 1,103,976 | $ | 1,103,976 |
Amount | |||
Balance at December 31, 2012 | $ | 1,110,093 | |
Accretion expense | 40,347 | ||
Obligations discharged with disposal of properties | (249,424 | ) | |
Balance at June 30, 2013 | $ | 901,016 | |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Statement of Operations - Discontinued Operations | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | ||||||||||||||||
Crude oil, natural gas and NGLs sales | $ | 865,054 | $ | 395,169 | $ | 1,692,474 | $ | 983,290 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Crude oil, natural gas and NGLs production costs | 299,008 | 376,970 | 746,647 | 752,636 | ||||||||||||
Depreciation, depletion and amortization | — | 436,797 | 155,210 | 896,600 | ||||||||||||
Direct costs - general and administrative expense | 326,051 | — | 326,051 | — | ||||||||||||
Accretion of asset retirement obligations | 2,774 | 3,902 | 6,877 | 7,739 | ||||||||||||
Loss on sale of crude oil and natural gas properties | 491,059 | — | 491,059 | — | ||||||||||||
Total operating costs and expenses | 1,118,892 | 817,669 | 1,725,844 | 1,656,975 | ||||||||||||
Loss from discontinued operations | $ | (253,838 | ) | $ | (422,500 | ) | $ | (33,370 | ) | $ | (673,685 | ) | ||||
Amount | |||
(millions) | |||
Managing General Partner | $ | 5.1 | |
Investor Partners | 8.7 | ||
Total | $ | 13.8 | |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||
2013 | 2012 | Change | 2013 | 2012 | Change | ||||||||||||||||
Number of gross producing wells (end of period) | 75 | 75 | — | 75 | 75 | — | |||||||||||||||
Production(1) | |||||||||||||||||||||
Crude oil (Bbl) | 12,582 | 10,051 | 25 | % | 28,294 | 23,017 | 23 | % | |||||||||||||
Natural gas (Mcf) | 54,124 | 38,683 | 40 | % | 119,194 | 88,035 | 35 | % | |||||||||||||
NGLs (Bbl) | 5,940 | 3,896 | 52 | % | 11,443 | 9,280 | 23 | % | |||||||||||||
Crude oil equivalent (Boe)(2) | 27,542 | 20,394 | 35 | % | 59,602 | 46,969 | 27 | % | |||||||||||||
Average Boe per day | 303 | 224 | 35 | % | 329 | 258 | 27 | % | |||||||||||||
Crude oil, natural gas and NGLs sales | |||||||||||||||||||||
Crude oil | $ | 1,098,675 | $ | 862,394 | 27 | % | $ | 2,472,878 | $ | 2,100,026 | 18 | % | |||||||||
Natural gas | 193,155 | 53,429 | * | 387,683 | 173,831 | 123 | % | ||||||||||||||
NGLs | 76,758 | 82,902 | (7 | )% | 175,368 | 203,677 | (14 | )% | |||||||||||||
Total crude oil, natural gas and NGLs sales | $ | 1,368,588 | $ | 998,725 | 37 | % | $ | 3,035,929 | $ | 2,477,534 | 23 | % | |||||||||
Realized gain on derivatives, net | |||||||||||||||||||||
Natural gas | $ | 631,287 | $ | 1,103,148 | (43 | )% | $ | 1,275,543 | $ | 1,981,214 | (36 | )% | |||||||||
Total realized gain on derivatives, net | $ | 631,287 | $ | 1,103,148 | (43 | )% | $ | 1,275,543 | $ | 1,981,214 | (36 | )% | |||||||||
Average selling price (excluding realized gain on derivatives) | |||||||||||||||||||||
Crude oil (per Bbl) | $ | 87.32 | $ | 85.80 | 2 | % | $ | 87.40 | $ | 91.24 | (4 | )% | |||||||||
Natural gas (Mcf) | 3.57 | 1.38 | 159 | % | 3.25 | 1.97 | 65 | % | |||||||||||||
NGLs (Bbl) | 12.92 | 21.28 | (39 | )% | 15.33 | 21.95 | (30 | )% | |||||||||||||
Crude oil equivalent (per Boe) | 49.69 | 48.97 | 1 | % | 50.94 | 52.75 | (3 | )% | |||||||||||||
Average cost per Boe | |||||||||||||||||||||
Crude oil, natural gas and NGLs production cost(3) | $ | 12.36 | $ | 17.07 | (28 | )% | $ | 10.89 | $ | 15.14 | (28 | )% | |||||||||
Depreciation, depletion and amortization | 28.13 | 33.90 | (17 | )% | 28.13 | 33.62 | (16 | )% | |||||||||||||
Operating costs and expenses | |||||||||||||||||||||
Direct costs - general and administrative | $ | 42,093 | $ | 43,331 | (3 | )% | $ | 86,742 | $ | 82,115 | 6 | % | |||||||||
Depreciation, depletion and amortization | 774,788 | 691,453 | 12 | % | 1,676,700 | 1,579,289 | 6 | % | |||||||||||||
Cash distributions | $ | 2,341,650 | $ | 1,515,863 | 54 | % | $ | 4,679,585 | $ | 2,939,226 | 59 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Commodity price risk management gain (loss), net: | |||||||||||||||
Realized gains | |||||||||||||||
Natural gas | $ | 631,288 | $ | 1,103,148 | $ | 1,275,544 | $ | 1,981,214 | |||||||
Total realized gains, net | 631,288 | 1,103,148 | 1,275,544 | 1,981,214 | |||||||||||
Unrealized gains (losses) | |||||||||||||||
Reclassification of realized gains included in | |||||||||||||||
prior periods unrealized gains | (561,768 | ) | (1,120,484 | ) | (1,693,233 | ) | (1,562,032 | ) | |||||||
Unrealized gains (losses) for the period | — | (400,018 | ) | — | 684,794 | ||||||||||
Total unrealized losses, net | (561,768 | ) | (1,520,502 | ) | (1,693,233 | ) | (877,238 | ) | |||||||
Total commodity price risk management gain (loss), net | $ | 69,520 | $ | (417,354 | ) | $ | (417,689 | ) | $ | 1,103,976 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
Discontinued Operations | 2013 | 2012 | 2013 | 2012 | |||||||
Production | |||||||||||
Crude oil (Bbl) | 714 | 729 | 1,513 | 1,392 | |||||||
Natural gas (Mcf) | 239,146 | 302,799 | 517,493 | 622,168 | |||||||
Crude oil equivalent (Boe) | 40,572 | 51,196 | 87,762 | 105,087 |
• | cash and cash equivalents increased, primarily due to the sale of the Piceance Basin assets to Caerus, by $13.8 million between June 30, 2013 and December 31, 2012; |
• | accounts receivable decreased by $0.2 million between June 30, 2013 and December 31, 2012; |
• | realized and unrealized derivative gains receivable decreased by $2.5 million between June 30, 2013 and December 31, 2012; |
• | accounts payable and accrued expenses increased by $0.5 million between June 30, 2013 and December 31, 2012; and |
• | amounts due to Managing General Partner-other, net, excluding crude oil, natural gas and NGLs sales received from third parties and realized derivative gains, increased by $0.1 million between June 30, 2013 and December 31, 2012. |
• | an increase in crude oil, natural gas and NGLs sales receipts of $0.9 million; |
• | a decrease in commodity price risk management realized gain receipts of $0.2 million; and |
• | a decrease in production costs and direct costs-general and administrative payments of $0.3 million. |
Distributions | ||||||||||||
Three months ended June 30, | Managing General Partner | Investor Partners | Total | |||||||||
2013 | $ | 866,429 | $ | 1,475,221 | $ | 2,341,650 | ||||||
2012 | 560,869 | 954,994 | 1,515,863 | |||||||||
Six months ended June 30, | Managing General Partner | Investor Partners | Total | |||||||||
2013 | $ | 1,731,465 | $ | 2,948,120 | $ | 4,679,585 | ||||||
2012 | 1,087,513 | 1,851,713 | 2,939,226 |
Period | Total Number of Units Repurchased | Average Price Paid Per Unit | |||||
April 1-30, 2013 | — | $ | — | ||||
May 1-31, 2013 | 3.00 | 4,308 | |||||
June 1-30, 2013 | 3.25 | 4,703 | |||||
Total | 6.25 | 4,514 |
Incorporated by Reference | ||||||||||||
Exhibit Number | Exhibit Description | Form | SEC File Number | Exhibit | Filing Date | Filed Herewith | ||||||
10.1 | Purchase and Sale Agreement by and among PDC Energy, Inc., affiliated partnerships and certain affiliates of Caerus Oil and Gas LLC, dated February 4, 2013. | 10-Q | 000-07246 | 10.1 | 5/1/2013 | |||||||
10.2 | Amendment No. 1 to Purchase and Sale Agreement by and among PDC Energy, Inc., affiliated partnerships and certain affiliates of Caerus Oil and Gas LLC, dated May 30, 2013. | 10-Q | 000-07246 | 10.1 | 6/3/2013 | |||||||
31.1 | Certification by Chief Executive Officer of PDC Energy, Inc., the Managing General Partner of this Partnership, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||
31.2 | Certification by Chief Financial Officer of PDC Energy, Inc., the Managing General Partner of this Partnership, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||
32.1* | Certifications by Chief Executive Officer and Chief Financial Officer of PDC Energy, Inc., the Managing General Partner of this Partnership, pursuant to Title 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||||
101.INS* | XBRL Instance Document | |||||||||||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
By: /s/ James M. Trimble | ||
James M. Trimble Chief Executive Officer and President of PDC Energy, Inc. | ||
August 14, 2013 |
Signature | Title | Date | |
/s/ James M. Trimble | Chief Executive Officer and President | August 14, 2013 | |
James M. Trimble | PDC Energy, Inc. Managing General Partner of the Registrant | ||
(principal executive officer) | |||
/s/ Gysle R. Shellum | Chief Financial Officer | August 14, 2013 | |
Gysle R. Shellum | PDC Energy, Inc. Managing General Partner of the Registrant | ||
(principal financial officer) | |||
/s/ R. Scott Meyers | Chief Accounting Officer | August 14, 2013 | |
R. Scott Meyers | PDC Energy, Inc. Managing General Partner of the Registrant | ||
(principal accounting officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Rockies Region 2007 Limited Partnership; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditor and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ James M. Trimble | ||
James M. Trimble | ||
Chief Executive Officer PDC Energy, Inc. Managing General Partner |
1. | I have reviewed this Quarterly Report on Form 10-Q of Rockies Region 2007 Limited Partnership; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditor and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Gysle R. Shellum | ||
Gysle R. Shellum | ||
Chief Financial Officer PDC Energy, Inc. Managing General Partner |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/s/ James M. Trimble | August 14, 2013 | |
James M. Trimble | ||
Chief Executive Officer and President | ||
PDC Energy, Inc. | ||
Managing General Partner | ||
/s/ Gysle R. Shellum | August 14, 2013 | |
Gysle R. Shellum | ||
Chief Financial Officer | ||
PDC Energy, Inc. | ||
Managing General Partner |
Fair Value Measurements and Disclosures Fair Value Measurements and Disclosures (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table presents this Partnership's derivative assets and liabilities that had been measured at fair value on a recurring basis:
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Condensed Statements of Operations (Unaudited) Statement (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Revenues: | ||||
Crude oil, natural gas and NGLs | $ 1,368,588 | $ 998,725 | $ 3,035,929 | $ 2,477,534 |
Commodity price risk management gain (loss), net | 69,520 | (417,354) | (417,689) | 1,103,976 |
Total revenues | 1,438,108 | 581,371 | 2,618,240 | 3,581,510 |
Operating costs and expenses: | ||||
Crude oil, natural gas and NGLs production costs | 340,408 | 348,155 | 648,908 | 711,013 |
Direct costs - general and administrative | 42,093 | 43,331 | 86,742 | 82,115 |
Depreciation, depletion and amortization | 774,788 | 691,453 | 1,676,700 | 1,579,289 |
Accretion of asset retirement obligations | 16,897 | 15,634 | 33,470 | 30,970 |
Total operating costs and expenses | 1,174,186 | 1,098,573 | 2,445,820 | 2,403,387 |
Income (loss) from operations: | ||||
Income (loss) from continuing operations | 263,922 | (517,202) | 172,420 | 1,178,123 |
Loss from discontinued operations | (253,838) | (422,500) | (33,370) | (673,685) |
Net income (loss) | 10,084 | (939,702) | 139,050 | 504,438 |
Net income (loss) per Investor Partner Unit: | ||||
Continuing operations | $ 37 | $ (73) | $ 24 | $ 166 |
Discontinued operations | $ (36) | $ (59) | $ (4) | $ (95) |
Net income (loss) per Investor Partner unit | $ 1 | $ (132) | $ 20 | $ 71 |
Investor Partner units outstanding | 4,470.00 | 4,470 | 4,470.00 | 4,470 |
Managing General Partner
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Income (loss) from operations: | ||||
Income (loss) from continuing operations | 97,651 | (191,365) | 63,795 | 435,906 |
Loss from discontinued operations | (93,920) | (156,325) | (12,347) | (249,263) |
Investor Partners
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Income (loss) from operations: | ||||
Income (loss) from continuing operations | 166,271 | (325,837) | 108,625 | 742,217 |
Loss from discontinued operations | $ (159,918) | $ (266,175) | $ (21,023) | $ (424,422) |
Derivative Financial Instruments
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Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments Disclosure [Text Block] | Derivative Financial Instruments The following tables present the impact of this Partnership's derivative instruments on this Partnership's accompanying condensed statements of operations:
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Transactions with Managing General Partner Related Party Transactions (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Related Party Transaction | ||||||||||
Direct costs - general and administrative | $ 42,093 | $ 43,331 | $ 86,742 | $ 82,115 | ||||||
Transactions with Managing General Partner
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Related Party Transaction | ||||||||||
Well operations and maintenance | 463,931 | 690,773 | 1,008,643 | 1,231,347 | ||||||
Gathering, compression and processing fees | 56,575 | 116,200 | 122,824 | 201,363 | ||||||
Direct costs - general and administrative | 368,144 | 43,331 | 412,793 | 82,115 | ||||||
Refracturing and recompletion costs | 0 | 360,239 | 0 | 360,239 | ||||||
Cash distributions | 876,854 | [1] | 562,135 | [1] | 1,751,281 | [1] | 1,089,933 | [1] | ||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 10,425 | $ 1,266 | $ 19,816 | $ 2,420 | ||||||
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Derivative Financial Instruments Derivative Financial Instruments (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | The following tables present the impact of this Partnership's derivative instruments on this Partnership's accompanying condensed statements of operations:
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Commitments and Contingencies Commitments and Contingencies (Details) (USD $)
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3 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
Royalty payment settlements expense | $ 326,000 |
Payments for Royalties | 304,000 |
Accrued royalty payment settlement | $ 22,000 |
Derivative Financial Instruments Derivative Financial Instruments (Details) (Commodity Price Risk Management, net, USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Derivative Financial Instruments | ||||
Realized Gains (Losses) | $ 631,288 | $ 1,103,148 | $ 1,275,544 | $ 1,981,214 |
Unrealized gains (losses) | (561,768) | (1,520,502) | (1,693,233) | (877,238) |
Total | 69,520 | (417,354) | (417,689) | 1,103,976 |
Reclassification of Realized Gains (Losses) Included in Prior Periods Unrealized
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Derivative Financial Instruments | ||||
Realized Gains (Losses) | 561,768 | 1,120,484 | 1,693,233 | 1,562,032 |
Unrealized gains (losses) | (561,768) | (1,120,484) | (1,693,233) | (1,562,032) |
Total | 0 | 0 | 0 | 0 |
Realized and Unrealized Gains (Losses) for the Current Period
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Derivative Financial Instruments | ||||
Realized Gains (Losses) | 69,520 | (17,336) | (417,689) | 419,182 |
Unrealized gains (losses) | 0 | (400,018) | 0 | 684,794 |
Total | $ 69,520 | $ (417,354) | $ (417,689) | $ 1,103,976 |
Subsequent Events (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended |
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Jun. 30, 2013
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Subsequent Event [Line Items] | |
Payments of Capital Distribution | $ 13.8 |
Managing General Partner
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Subsequent Event [Line Items] | |
Payments of Capital Distribution | 5.1 |
Investor Partners
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Subsequent Event [Line Items] | |
Payments of Capital Distribution | $ 8.7 |
Fair Value Measurements and Disclosures Fair Value Measurements and Disclosures (Details) (USD $)
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Jun. 30, 2013
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Dec. 31, 2012
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Due from Managing General Partner-derivatives | $ 0 | $ 4,409,574 |
Due to Managing General Partner-derivatives | 0 | 2,004,594 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 4,409,574 | |
Liabilities, Fair Value Disclosure | 2,004,594 | |
Net Asset Fair Value | 2,404,980 | |
Commodity Contracts Related to Natural Gas and Crude Oil Sales [Member] | Current Assets [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Due from Managing General Partner-derivatives | 4,409,574 | |
Basis Protection Contracts Related to Natural Gas and Crude Oil Sales [Member] | Current Liabilities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Due to Managing General Partner-derivatives | $ 2,004,594 |
General and Basis of Presentation
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6 Months Ended |
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Jun. 30, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | General and Basis of Presentation Rockies Region 2007 Limited Partnership (“Partnership” or the “Registrant”) was organized in 2007 as a limited partnership, in accordance with the laws of the State of West Virginia, for the purpose of engaging in the exploration and development of crude oil and natural gas properties. Business operations commenced upon closing of an offering for the private placement of Partnership units. Upon funding, this Partnership entered into a Drilling and Operating Agreement (“D&O Agreement”) with the Managing General Partner which authorizes PDC Energy, Inc. (“PDC”) to conduct and manage this Partnership's business. In accordance with the terms of the Limited Partnership Agreement (the “Agreement”), the Managing General Partner is authorized to manage all activities of this Partnership and initiates and completes substantially all Partnership transactions. As of June 30, 2013, there were 1,790 limited partners in this Partnership (the “Investor Partners”). PDC is the designated Managing General Partner of this Partnership and owns a 37% Managing General Partner ownership in this Partnership. According to the terms of the Agreement, revenues, costs and cash distributions of this Partnership are allocated 63% to the Investor Partners, which are shared pro rata based upon the number of units in this Partnership, and 37% to the Managing General Partner. The Managing General Partner may repurchase Investor Partner units under certain circumstances provided by the Agreement, upon request of an individual Investor Partner. Through June 30, 2013, the Managing General Partner had repurchased 34.8 units of Partnership interest from the Investor Partners at an average price of $4,131 per unit. As of June 30, 2013, the Managing General Partner owned 37.5% of this Partnership. In the Managing General Partner's opinion, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of this Partnership's results for interim periods in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in the audited financial statements have been condensed or omitted. The information presented in this Quarterly Report on Form 10-Q should be read in conjunction with this Partnership's audited financial statements and notes thereto included in this Partnership's 2012 Form 10-K. This Partnership's accounting policies are described in the Notes to Financial Statements in this Partnership's 2012 Form 10-K and updated, as necessary, in this Quarterly Report on Form 10-Q. The results of operations and cash flows for the three and six months ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year or any other future period. Certain reclassifications have been made to prior period financial statements to conform to the current year presentation. The reclassifications are mainly attributable to reporting as discontinued operations the results of operations related to the sale of this Partnership's Piceance Basin assets. See Note 8, Divestitures and Discontinued Operations, for additional information regarding the divestiture. The reclassifications had no impact on previously reported cash flows, net income or Partners’ equity. |
Transactions with Managing General Partner
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions Disclosure [Text Block] | Transactions with Managing General Partner The Managing General Partner transacts business on behalf of this Partnership under the authority of the D&O Agreement. Revenues and other cash inflows received by the Managing General Partner on behalf of this Partnership are distributed to the Partners net of corresponding operating costs and other cash outflows incurred on behalf of this Partnership. The fair value of this Partnership's portion of open derivative instruments were recorded on the condensed balance sheets under the captions “Due from Managing General Partner-derivatives” in the case of net unrealized gains and “Due to Managing General Partner-derivatives” in the case of net unrealized losses. The following table presents transactions with the Managing General Partner reflected in the condensed balance sheet line item “Due from Managing General Partner-other, net” which remain undistributed or unsettled with this Partnership's investors as of the dates indicated:
The following table presents Partnership transactions, excluding derivative transactions which are more fully detailed in Note 5, Derivative Financial Instruments, with the Managing General Partner for the three and six months ended June 30, 2013 and 2012. “Well operations and maintenance” and “Gathering, compression and processing fees” are included in the “Crude oil, natural gas and NGLs production costs” line item on the condensed statements of operations for continuing operations or in Note 8, Divestitures and Discontinued Operations, for discontinued operations.
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Commitments and Contingencies
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6 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Legal Proceedings Neither this Partnership nor PDC, in its capacity as the Managing General Partner of this Partnership, are party to any pending legal proceeding that PDC believes would have a materially adverse effect on this Partnership's business, financial condition, results of operations or liquidity. Environmental Due to the nature of the oil and gas industry, this Partnership is exposed to environmental risks. The Managing General Partner has various policies and procedures in place to prevent environmental contamination and mitigate the risks from environmental contamination. The Managing General Partner conducts periodic reviews to identify changes in this Partnership's environmental risk profile. Liabilities are accrued when environmental remediation efforts are probable and the costs can be reasonably estimated. These liabilities are reduced as remediation efforts are completed or are adjusted as a consequence of subsequent periodic reviews. Liabilities for environmental remediation efforts are included in line item captioned “Accounts payable and accrued expenses” on the condensed balance sheet. During the six months ended June 30, 2013, as a result of the Managing General Partner's periodic review, no new environmental remediation liabilities were identified and this Partnership's expense for environmental remediation efforts was not significant. This Partnership's environmental remediation liabilities were insignificant as of June 30, 2013 and December 31, 2012, respectively. The Managing General Partner is not currently aware of any environmental claims existing as of June 30, 2013 which have not been provided for or would otherwise have a material impact on this Partnership's condensed financial statements; however, there can be no assurance that current regulatory requirements will not change or unknown past non-compliance with environmental laws will not be discovered on this Partnership's properties. Royalty Matters During the three months ended June 30, 2013, this Partnership recognized charges totaling approximately $326,000 related to royalty payment disputes with interest owners in the Piceance Basin. These charges were included in Direct costs - general and administrative expenses within discontinued operations. The settlement charges were allocated to this Partnership based upon historical revenue amounts. The settlement amount of approximately $304,000 was paid by the Managing General Partner as of June 30, 2013, and is included as a liability in the Due from Managing General Partner-other, net on the balance sheet. The remaining $22,000 is included in Accounts payable and accrued expenses on the balance sheet and represents the Managing General Partner's best estimate relating to the remaining pending dispute regarding various royalty payment issues. |
Fair Value Measurements and Disclosures
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Fair Value of Financial Instruments Determination of fair value. This Partnership's fair value measurements are estimated pursuant to a fair value hierarchy that requires this Partnership to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, giving the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. In these cases, the lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability, and may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The three levels of inputs that may be used to measure fair value are defined as: Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived from observable market data by correlation or other means. Level 3 - Unobservable inputs for the asset or liability, including situations where there is little, if any, market activity. The Managing General Partner measures the fair value of this Partnership's derivative instruments based on a pricing model that utilizes market-based inputs, including, but not limited to, the contractual price of the underlying position, current market prices, natural gas forward curve, discount rates such as the LIBOR curve for a similar duration of each outstanding position, volatility factors and nonperformance risk. Nonperformance risk considers the effect of the Managing General Partner's credit standing on the fair value of derivative liabilities and the effect of the Managing General Partner's counterparties' credit standings on the fair value of derivative assets. Both inputs to the model are based on published credit default swap rates and the duration of each outstanding derivative position. The Managing General Partner validates its fair value measurement through the review of counterparty statements and other supporting documentation, the determination that the source of the inputs is valid, the corroboration of the original source of inputs through access to multiple quotes, if available, or other information and monitoring changes in valuation methods and assumptions. While the Managing General Partner uses common industry practices to develop its valuation techniques, changes in the Managing General Partner's pricing methodologies or the underlying assumptions could result in significantly different fair values. While the Managing General Partner believes its valuation method is appropriate and consistent with those used by other market participants, the use of a different methodology or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value. This Partnership's fixed-price swaps and basis swaps as of December 31, 2012 were included in Level 2. The following table presents this Partnership's derivative assets and liabilities that had been measured at fair value on a recurring basis:
Derivative instruments that were due to mature subsequent to June 30, 2013 were liquidated during the quarter ended June 30, 2013. Accordingly, as of June 30, 2013, this Partnership did not have any derivative instruments in place for its future production. Non-Derivative Financial Assets and Liabilities The carrying values of the financial instruments included in current assets and current liabilities approximate fair value due to the short-term maturities of these instruments. |
Asset Retirement Obligations Asset Retirement Obligations (Details) (USD $)
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6 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
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Changes in asset retirement obligations | ||
Balance at December 31, 2012 | $ 1,110,093 | |
Accretion expense | 40,347 | 38,709 |
Obligations discharged with disposal of properties | (249,424) | |
Balance at June 30, 2013 | $ 901,016 |