Company Quick10K Filing
Everflow Eastern Partners
Price1.00 EPS-2,357,201
Shares-0 P/E-0
MCap-0 P/FCF-0
Net Debt-12 EBIT2
TEV-12 TEV/EBIT-5
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-14
10-K 2019-12-31 Filed 2020-03-26
10-Q 2019-09-30 Filed 2019-11-13
10-Q 2019-06-30 Filed 2019-08-13
10-Q 2019-03-31 Filed 2019-05-13
10-K 2018-12-31 Filed 2019-03-27
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-10
10-Q 2018-03-31 Filed 2018-05-11
10-K 2017-12-31 Filed 2018-03-27
10-Q 2017-09-30 Filed 2017-11-13
10-Q 2017-06-30 Filed 2017-08-10
10-Q 2017-03-31 Filed 2017-05-10
10-K 2016-12-31 Filed 2017-03-28
10-Q 2016-09-30 Filed 2016-11-10
10-Q 2016-06-30 Filed 2016-08-12
10-Q 2016-03-31 Filed 2016-05-11
10-K 2015-12-31 Filed 2016-03-25
10-Q 2015-09-30 Filed 2015-11-12
10-Q 2015-06-30 Filed 2015-08-12
10-Q 2015-03-31 Filed 2015-05-13
10-K 2014-12-31 Filed 2015-03-27
10-Q 2014-09-30 Filed 2014-11-12
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-05-13
10-K 2013-12-31 Filed 2014-03-26
10-Q 2013-09-30 Filed 2013-11-13
10-Q 2013-06-30 Filed 2013-08-13
10-Q 2013-03-31 Filed 2013-05-13
10-K 2012-12-31 Filed 2013-03-28
10-Q 2012-09-30 Filed 2012-11-13
10-Q 2012-06-30 Filed 2012-08-13
10-Q 2012-03-31 Filed 2012-05-11
10-K 2011-12-31 Filed 2012-03-27
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-12
10-Q 2011-03-31 Filed 2011-05-13
10-K 2010-12-31 Filed 2011-03-29
10-Q 2010-09-30 Filed 2010-11-12
10-Q 2010-06-30 Filed 2010-08-13
10-Q 2010-03-31 Filed 2010-05-14
10-K 2009-12-31 Filed 2010-03-31

EEPL 10Q Quarterly Report

Note 1. Organization and Summary of Significant Accounting Policies
Note 2. Current Liabilities
Note 3. Partners' Equity
Note 4. Gas Purchase Agreements
Note 5. Commitments and Contingencies
Note 6. Related Party Transactions
Part I: Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 6. Exhibits
EX-31.1 ex31-1.htm
EX-31.2 ex31-2.htm
EX-32.1 ex32-1.htm

Everflow Eastern Partners Earnings 2016-09-30

Balance SheetIncome StatementCash Flow
655239261302012201420172020
Assets, Equity
4.5-0.4-5.3-10.2-15.1-20.02012201420172020
Rev, G Profit, Net Income
3.30.6-2.0-4.7-7.3-10.02012201420172020
Ops, Inv, Fin

10-Q 1 eepl20160822_10q.htm FORM 10-Q eepl20160822_10q.htm Table Of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Quarterly report pursuant to Section 13 or 15(d)

 

 

of the Securities Exchange Act of 1934

 

 

For the quarterly period ended September 30, 2016

 

OR

Transition report pursuant to Section 13 or 15(d)

 

 

of the Securities Exchange Act of 1934

 

 

For the transition period from                      to                     .

 

 

Commission File Number 0-19279

 

EVERFLOW EASTERN PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

34-1659910

 

 

(State or other jurisdiction of

 

(I.R.S. Employer

 

 

incorporation or organization)

 

Identification No.)

 

         
  585 West Main Street      
  P.O. Box 629      
  Canfield, Ohio   44406  
  (Address of principal executive offices)   (Zip Code)  
         

     

 

Registrant’s telephone number, including area code: (330) 533-2692

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    X        No             

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes    X         No _____

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer                   

Accelerated filer                                          

 

 

Non-accelerated filer                       (Do not check if a smaller reporting company)

Smaller reporting company              X       

          

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes           No     X   

 

There were 5,587,616 Units of limited partnership interest of the registrant as of November 10, 2016. The Units generally do not have any voting rights, but, in certain circumstances, the Units are entitled to one vote per Unit.

 

Except as otherwise indicated, the information contained in this report is as of September 30, 2016.

 

 

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

 

 

INDEX

 

 

  DESCRIPTION PAGE NO.
     
     

Part I.  

Financial Information

 
       
 

Item 1.

Financial Statements

 
       
   

Consolidated Balance Sheets September 30, 2016 and December 31, 2015

F-1

       
   

Consolidated Statements of Operations Three and Nine Months Ended September 30, 2016 and 2015

  F-3
     

 

   

Consolidated Statements of Partners’ Equity Nine Months Ended September 30, 2016 and 2015

F-4

       
   

Consolidated Statements of Cash Flows Nine Months Ended September 30, 2016 and 2015

F-5

       
   

Notes to Unaudited Consolidated Financial Statements

F-6

       
 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

3

       
 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

8

       
 

Item 4.

Controls and Procedures

8

       
       

Part II.  

Other Information

 
       
 

Item 6.

Exhibits

9

       
   

Signature

10

 

 

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

 

CONSOLIDATED BALANCE SHEETS

 

September 30, 2016 and December 31, 2015

 

   

September 30,

   

December 31,

 
   

2016

   

2015

 
   

(Unaudited)

   

(Audited)

 

ASSETS

               
                 

CURRENT ASSETS

               

Cash and equivalents

  $ 11,430,370     $ 22,734,047  

Investments

    10,052,733       -  

Accounts receivable:

               

Production

    568,091       572,502  

Joint venture partners

    4,151       4,151  

Employees' notes receivable

    41,000       35,000  

Other

    29,150       45,838  

Total current assets

    22,125,495       23,391,538  
                 

PROPERTY AND EQUIPMENT

               

Proved properties (successful efforts accounting method)

    181,449,747       181,293,110  

Pipeline and support equipment

    676,757       631,757  

Corporate and other

    2,111,699       2,114,844  
      184,238,203       184,039,711  
                 

Less accumulated depreciation, depletion, amortization and write down

    172,253,055       169,093,931  
      11,985,148       14,945,780  
                 

OTHER ASSETS

               

Employees' notes receivable

    47,294       89,437  

Other

    176,442       176,442  
      223,736       265,879  
                 
    $ 34,334,379     $ 38,603,197  

 

See notes to unaudited consolidated financial statements.

 

 
F-1

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

 

CONSOLIDATED BALANCE SHEETS

 

September 30, 2016 and December 31, 2015

 

   

September 30,

   

December 31,

 
   

2016

   

2015

 
   

(Unaudited)

   

(Audited)

 

LIABILITIES AND PARTNERS' EQUITY

               
                 

CURRENT LIABILITIES

               

Accounts payable

  $ 1,753,465     $ 1,839,816  

Accrued expenses

    825,716       1,130,772  

Total current liabilities

    2,579,181       2,970,588  
                 

DEFERRED INCOME TAXES

    71,000       74,000  
                 

JOINT VENTURE PARTNER ADVANCES

    1,050,424       1,004,953  
                 

ASSET RETIREMENT OBLIGATIONS

    16,697,160       16,393,560  
                 

COMMITMENTS AND CONTINGENCIES

               
                 

LIMITED PARTNERS' EQUITY, SUBJECT TO REPURCHASE RIGHT

               

Authorized - 8,000,000 Units

               

Issued and outstanding - 5,587,616 Units

    13,771,244       17,944,611  
                 

GENERAL PARTNER'S EQUITY

    165,370       215,485  

Total partners' equity

    13,936,614       18,160,096  
                 
    $ 34,334,379     $ 38,603,197  

 

See notes to unaudited consolidated financial statements.

 

 
F-2

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Three and Nine Months Ended September 30, 2016 and 2015

(Unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
                                 
   

2016

   

2015

   

2016

   

2015

 

REVENUES

                               

Crude oil and natural gas sales

  $ 795,459     $ 1,454,105     $ 2,193,374     $ 4,967,090  

Well management and operating

    93,864       128,461       297,051       395,337  

Other

    2,525       3,073       30,241       107,483  

Total revenues

    891,848       1,585,639       2,520,666       5,469,910  
                                 

DIRECT COST OF REVENUES

                               

Production costs

    434,634       666,417       1,577,158       2,261,737  

Well management and operating

    54,256       76,317       174,532       235,013  

Depreciation, depletion and amortization

    1,001,542       1,185,964       3,096,470       3,509,609  

Accretion expense

    97,700       154,000       303,600       453,500  

Total direct cost of revenues

    1,588,132       2,082,698       5,151,760       6,459,859  
                                 

GENERAL AND ADMINISTRATIVE EXPENSE

    504,887       501,217       1,654,905       1,760,840  

Total cost of revenues

    2,093,019       2,583,915       6,806,665       8,220,699  
                                 

LOSS FROM OPERATIONS

    (1,201,171 )     (998,276 )     (4,285,999 )     (2,750,789 )
                                 

OTHER INCOME

                               

Gain on sale of other assets

    -       239,652       -       239,652  

Interest and dividend income

    27,808       8,397       61,017       25,805  

Total other income

    27,808       248,049       61,017       265,457  
                                 

LOSS BEFORE INCOME TAXES

    (1,173,363 )     (750,227 )     (4,224,982 )     (2,485,332 )
                                 

INCOME TAX EXPENSE (BENEFIT)

                               

Current

    500       4,000       1,500       12,000  

Deferred

    (1,000 )     (5,000 )     (3,000 )     (15,000 )

Total income tax benefit

    (500 )     (1,000 )     (1,500 )     (3,000 )
                                 

NET LOSS

  $ (1,172,863 )   $ (749,227 )   $ (4,223,482 )   $ (2,482,332 )
                                 

Allocation of Partnership Net Loss:

                               

Limited Partners

  $ (1,158,946 )   $ (740,334 )   $ (4,173,367 )   $ (2,452,923 )

General Partner

    (13,917 )     (8,893 )     (50,115 )     (29,409 )
                                 
    $ (1,172,863 )   $ (749,227 )   $ (4,223,482 )   $ (2,482,332 )
                                 

Net loss per unit

  $ (0.21 )   $ (0.14 )   $ (0.75 )   $ (0.44 )

 

See notes to unaudited consolidated financial statements.

 

 
F-3

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

 

CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY

 

Nine Months Ended September 30, 2016 and 2015

 

(Unaudited)

 

   

2016

   

2015

 
                 

PARTNERS' EQUITY - BEGINNING OF PERIOD

  $ 18,160,096     $ 43,714,129  
                 

Net loss

    (4,223,482 )     (2,482,332 )
                 

Cash distributions ($0.625 per unit in 2015)

    -       (3,539,221 )
                 

Repurchase of Units

    -       (122,089 )
                 

Options exercised

    -       61,045  
                 
                 

PARTNERS' EQUITY - END OF PERIOD

  $ 13,936,614     $ 37,631,532  

 

See notes to unaudited consolidated financial statements.

 

 
F-4

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Nine Months Ended September 30, 2016 and 2015

 

(Unaudited)

 

   

2016

   

2015

 

CASH FLOWS FROM OPERATING ACTIVITIES

               

Net loss

  $ (4,223,482 )   $ (2,482,332 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

               

Depreciation, depletion and amortization

    3,162,270       3,577,309  

Accretion expense

    303,600       453,500  

Gain on sale of other assets

    -       (239,652 )

Deferred income taxes

    (3,000 )     (15,000 )

Changes in assets and liabilities:

               

Accounts receivable

    4,411       498,983  

Other current assets

    16,688       12,000  

Other assets

    -       (3,471 )

Accounts payable

    (86,351 )     (26 )

Accrued expenses

    (305,056 )     (683,876 )

Joint venture partner advances

    45,471       15,437  

Total adjustments

    3,138,033       3,615,204  

Net cash provided by (used in) operating activities

    (1,085,449 )     1,132,872  
                 

CASH FLOWS FROM INVESTING ACTIVITIES

               

Purchase of investments

    (10,052,733 )     -  

Payments received on receivables from employees

    37,737       25,977  

Advances disbursed to employees

    (1,594 )     (13,162 )

Purchase of property and equipment

    (201,638 )     (88,247 )

Proceeds from sale of other assets

    -       249,652  

Net cash provided by (used in) investing activities

    (10,218,228 )     174,220  
                 

CASH FLOWS FROM FINANCING ACTIVITIES

               

Distributions

    -       (3,539,221 )

Proceeds from options exercised

    -       61,045  

Repurchase of Units

    -       (122,089 )

Net cash used in financing activities

    -       (3,600,265 )
                 

NET CHANGE IN CASH AND EQUIVALENTS

    (11,303,677 )     (2,293,173 )
                 

CASH AND EQUIVALENTS - BEGINNING OF PERIOD

    22,734,047       25,353,579  
                 

CASH AND EQUIVALENTS - END OF PERIOD

  $ 11,430,370     $ 23,060,406  
                 

Supplemental disclosures of cash flow information and non-cash activities:

               

Cash paid during the period for:

               

Income taxes

  $ 390     $ 12,270  

 

Additions to proved properties reflect changes in asset retirement obligations.

 

See notes to unaudited consolidated financial statements.

 

 
F-5

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 1.

Organization and Summary of Significant Accounting Policies

 

 

A.

Interim Financial Statements - The interim consolidated financial statements included herein have been prepared by the management of Everflow Eastern Partners, L.P., without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations have been made.

 

The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by GAAP, or those normally made in an Annual Report on Form 10-K, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto which are incorporated in Everflow Eastern Partners, L.P.’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 25, 2016.

 

The results of operations for the interim periods may not necessarily be indicative of the results to be expected for the full year.

 

 

B.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates impacting the Company’s financial statements include revenue and expense accruals and oil and gas reserve quantities. In the oil and gas industry, and especially as related to the Company’s natural gas sales, the processing of actual transactions generally occurs 60-90 days after the month of delivery of its product. Consequently, accounts receivable from production and oil and gas sales are recorded using estimated production volumes and market or contract prices. Differences between estimated and actual amounts are recorded in subsequent period’s financial results. As is typical in the oil and gas industry, a significant portion of the Company’s accounts receivable from production and oil and gas sales consists of unbilled receivables. Oil and gas reserve quantities are utilized in the calculation of depreciation, depletion and amortization and the impairment of oil and gas wells and also impact the timing and costs associated with asset retirement obligations. The Company’s estimates, especially those related to oil and gas reserves, could change in the near term and could significantly impact the Company’s results of operations and financial position.

 

 
F-6

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 1.

Organization and Summary of Significant Accounting Policies

 

 

C.

Organization - Everflow Eastern Partners, L.P. (“Everflow”) is a Delaware limited partnership which was organized in September 1990 to engage in the business of oil and gas acquisition, exploration, development and production. Everflow was formed to consolidate the business and oil and gas properties of Everflow Eastern, Inc. (“EEI”) and subsidiaries and the oil and gas properties owned by certain limited partnership and working interest programs managed or sponsored by EEI (“EEI Programs” or the “Programs”).

 

Everflow Management Limited, LLC (“EML”), an Ohio limited liability company, is the general partner of Everflow and, as such, is authorized to perform all acts necessary or desirable to carry out the purposes and conduct of the business of Everflow. The members of EML are Everflow Management Corporation ("EMC"); two individuals who are officers and directors of EEI and employees of Everflow; one individual who is the Chairman of the Board of EEI; one individual who is an employee of Everflow; and one private limited liability company founded by an individual who is a director of EEI. EMC is an Ohio corporation formed in September 1990 and is the managing member of EML. EML holds no assets other than its general partner’s interest in Everflow, nor does it have any liabilities. In addition, EML has no separate operations or role apart from its role as the Company’s general partner.

 

 

D.

Principles of Consolidation - The consolidated financial statements include the accounts of Everflow, its wholly-owned subsidiaries, including EEI, and interests with joint venture partners (collectively, the “Company”), which are accounted for under the proportional consolidation method. All significant accounts and transactions between the consolidated entities have been eliminated.

 

 

E.

Cash and Equivalents - The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company maintains, at various financial institutions, cash and equivalents which may exceed federally insured amounts and which may, at times, significantly exceed balance sheet amounts due to float.  As of September 30, 2016 and December 31, 2015, cash and equivalents include $1,050,424 and $1,004,953, respectively, of joint venture partner advances, which are funds collected and held on behalf of joint venture partners for their anticipated share of future plugging and abandonment costs, including interest earned.

 

 
F-7

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 1.

Organization and Summary of Significant Accounting Policies

 

 

F.

Investments – The Company’s investments are classified as available-for-sale securities and consist of shares held in a mutual fund that invests primarily in investment grade, U.S. dollar denominated short-term fixed and floating rate debt securities. The mutual fund seeks current income while seeking to maintain a low volatility of principal. The Company did not hold any investments during 2015.

 

The Financial Accounting Standards Board established a framework for measuring fair value and expands disclosures about fair value measurements by establishing a fair value hierarchy that prioritizes the inputs and defines valuation techniques used to measure fair value. The hierarchy gives highest priority to Level I inputs and lowest priority to Level III inputs. The three levels of the fair value hierarchy are described below:

 

Level I – Quoted prices are available in active markets for identical financial instruments as of the reporting date.

 

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

 

Level III – Pricing inputs are unobservable for the financial instrument and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation.

 

The Company’s investments are carried at fair market value based on quoted prices available in active markets and are therefore classified as Level 1.

 

 

G.

Asset Retirement Obligations - GAAP requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. For the Company, these obligations include dismantlement, plugging and abandonment of oil and gas wells and associated pipelines and equipment. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depleted over the estimated useful life of the related asset.

 

The estimated liability is based on historical experience in dismantling, plugging and abandoning wells, estimated remaining lives of those wells based on reserves estimates, estimates of the external cost to dismantle, plug and abandon the wells in the future and federal and state regulatory

 

 
F-8

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 1.

Organization and Summary of Significant Accounting Policies

 

 

G.

Asset Retirement Obligations (continued)

 

requirements. The liability is discounted using an assumed credit-adjusted, risk-free interest rate. Revisions to the liability will likely occur due to: changes in estimates of dismantlement, plugging and abandonment costs; changes in estimated remaining lives of the wells; changes in federal or state regulations regarding plugging and abandonment requirements; and other factors. At December 31, 2015, the Company made revisions in estimates of remaining lives of wells.

 

The Company has no assets legally restricted for purposes of settling its asset retirement obligations. The Company has determined that there are no other material retirement obligations associated with tangible long-lived assets.

 

The schedule below is a reconciliation of the Company’s liability for the nine months ended September 30, 2016 and 2015:

 

   

Asset Retirement Obligations

 
   

Nine Months Ended September 30,

 
                 
   

2016

   

2015

 
                 

Beginning of period

  $ 16,736,560     $ 11,108,044  

Liabilities incurred

    -       1,000  

Accretion expense

    303,600       453,500  
                 

End of period

  $ 17,040,160     $ 11,562,544  

 

 

H.

Revenue Recognition - The Company recognizes oil and gas revenues when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred, title and risk of loss have transferred to the purchaser, and collectability of the revenue is reasonably assured. The Company utilizes the sales method to account for gas production volume imbalances. Under this method, revenue is recognized only when gas is produced and sold on the Company’s behalf. The Company had no material gas imbalances at September 30, 2016 and December 31, 2015. Other revenues consist of gain on sale of deep rights and other miscellaneous revenues. Gain on sale of deep rights is recognized when title to deep mineral interests has been transferred and all terms and conditions to the sale have been met. Other miscellaneous revenues are recognized at the time services are rendered, the Company has a contractual right to such revenue and collection is reasonably assured.

 

 
F-9

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 1.

Organization and Summary of Significant Accounting Policies

 

 

H.

Revenue Recognition (continued)

 

The Company participates (and may act as drilling contractor) with unaffiliated joint venture partners and employees in the drilling, development and operation of jointly owned oil and gas properties.

 

Each owner, including the Company, has an undivided interest in the jointly owned properties. Generally, the joint venture partners and employees participate on the same drilling/development cost basis as the Company and, therefore, no revenue, expense or income is recognized on the drilling and development of the properties. Accounts and notes receivable from joint venture partners and employees consist principally of drilling and development costs the Company has advanced or incurred on behalf of joint venture partners and employees (see Note 6). The Company earns and receives monthly management and operating fees from certain joint venture partners and employees after the properties are completed and placed into production.

 

 

I.

Income Taxes - Everflow is not a tax-paying entity and the net taxable income or loss, other than the taxable income or loss allocable to EEI, which is a C corporation owned by Everflow, will be allocated directly to its respective partners. The Company is not able to determine the net difference between the tax bases and the reported amounts of Everflow’s assets and liabilities due to separate elections that were made by owners of the working interests and limited partnership interests that comprised the Programs.

 

The Company believes that it has appropriate support for any tax positions taken and, as such, does not have any uncertain tax positions that are material to the financial statements.  The Company's tax returns are subject to examination by the Internal Revenue Service, as well as various state and local taxing authorities, generally for three years after they are filed.

 

 

J.

Allocation of Income and Per Unit Data - Under the terms of the limited partnership agreement, initially, 99% of revenues and costs were allocated to the Unitholders (the limited partners) and 1% of revenues and costs were allocated to the General Partner. Such allocation has changed and may change in the future due to Unitholders electing to exercise the Repurchase Right and select officers and employees electing to exercise options (see Note 3).

 

Earnings per limited partner Unit have been computed based on the weighted average number of Units outstanding during each period presented. Average outstanding Units for earnings per limited partner Unit calculations amounted to 5,587,616 for the three and nine months ended September 30, 2016 and 5,587,616 and 5,596,541 for the three and nine months ended September 30, 2015, respectively.

 

 
F-10

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 1.

Organization and Summary of Significant Accounting Policies

 

 

K.

New Accounting Standards – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”).  ASU 2014-09 is intended to improve the financial reporting requirements for revenue from contracts with customers by providing a principle based approach.  The core principle of the standard is that revenue should be recognized when the transfer of promised goods or services is made in an amount that the entity expects to be entitled to in exchange for the transfer of goods and services.  ASU 2014-09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The original effective date for financial statements issued by public companies was for annual reporting periods beginning after December 15, 2016.   In July 2015, through issuance of ASU 2014-15, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted prior to the original effective date. The Company is currently evaluating the potential impact of these standards on the financial statements.  

 

The Company has reviewed all other recently issued accounting standards in order to determine their effects, if any, on the consolidated financial statements. Based on that review, the Company believes that none of these standards will have a significant effect on current or future earnings or results of operations.

 

 
F-11

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 2.

Current Liabilities

 

The Company’s current liabilities consist of the following at September 30, 2016 and December 31, 2015:

 

   

September 30,

   

December 31,

 
   

2016

   

2015

 
                 

Accounts Payable:

               

Production and related other

  $ 1,413,594     $ 1,501,647  

Other

    292,637       290,935  

Joint venture partner deposits

    47,234       47,234  
                 
    $ 1,753,465     $ 1,839,816  
                 

Accrued Expenses:

               

Payroll and retirement plan contributions

  $ 422,268     $ 679,934  

Current portion of asset retirement obligations

    343,000       343,000  

Other

    36,100       75,300  

Federal, state and local taxes

    24,348       32,538  
                 
    $ 825,716     $ 1,130,772  

 

Note 3.

Partners’ Equity

 

Units represent limited partnership interests in Everflow. The Units are transferable subject to the approval of EML and to the laws governing the transfer of securities. The Units are not listed for trading on any securities exchange nor are they quoted in the automated quotation system of a registered securities association. However, Unitholders may have an opportunity to require Everflow to repurchase their Units pursuant to the Repurchase Right.

 

The partnership agreement provides that Everflow will repurchase for cash up to 10% of the then outstanding Units, to the extent Unitholders offer Units to Everflow for repurchase pursuant to the Repurchase Right. The Repurchase Right entitles any Unitholder, between May 1 and June 30 of each year, to notify Everflow that the Unitholder elects to exercise the Repurchase Right and have Everflow acquire certain or all Units. The price to be paid for any such Units is calculated based upon the audited financial statements of the Company as of December 31 of the year prior to the year in which the Repurchase Right is to be effective and independently prepared reserve reports. The price per Unit equals 66% of the adjusted book value of the Company allocable to the Units, divided by the number of Units outstanding at the beginning of the year in which the

 

 
F-12

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 3.

Partners’ Equity (continued)

 

applicable Repurchase Right is to be effective less interim cash distributions received by a Unitholder. The adjusted book value is calculated by adding partners’ equity, the Standardized Measure of Discounted Future Net Cash Flows and the tax effect included in the Standardized Measure and subtracting from that sum the carrying value of oil and gas properties (net of undeveloped lease costs). If more than 10% of the then outstanding Units are tendered during any period during which the Repurchase Right is to be effective, the Investors’ Units tendered shall be prorated for purposes of calculating the actual number of Units to be acquired during any such period. The Company determined that the price associated with the 2016 Repurchase Right, based upon the December 31, 2015 calculation, was negative, and as such the Company did not offer to repurchase Units in 2016. The Company has not made a distribution in 2016.

 

The Company has an Option Repurchase Plan (the “Option Plan”) which permits the grant of options to select officers and employees to purchase certain Units acquired by the Company pursuant to the Repurchase Right. The purpose of the Option Plan is to assist the Company to attract and retain officers and other key employees and to enable those individuals to acquire or increase their ownership interest in the Company in order to encourage them to promote the growth and profitability of the Company. The Option Plan is designed to align directly the financial interests of the participants with the financial interests of the Unitholders. The Company did not grant any options in 2016. In June 2015, the Company granted options to officers and an employee. All options granted were exercised on the same date.

 

Units repurchased pursuant to the Repurchase Right and Units issued through the exercise of options pursuant to the Option Plan (collectively the “Units Activity”) for the years 2014 and 2015 are as follows:

 

   

Per Unit

                   

Units Out-

 
   

Calculated

                                   

standing

 
   

Price for

   

Less

   

Net

                   

Following

 
   

Repurchase

   

Interim

   

Price

   

Units

   

Units

   

Units

 

Year

 

Right

   

Distributions

   

Paid

   

Repurchased

   

Issued

   

Activity

 
                                                 

2014

  $ 7.010     $ 0.500     $ 6.51       11,964       5,982       5,601,003  

2015

  $ 4.935     $ 0.375     $ 4.56       26,774       13,387       5,587,616  

 

All Units repurchased pursuant to the Repurchase Right were retired except for those Units issued through the exercise of options pursuant to the Option Plan. There were no instruments outstanding at September 30, 2016 or 2015 that would potentially dilute net income per Unit.

 

 
F-13

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 4.

Gas Purchase Agreements

 

The Company has multiple contracts with Dominion Field Services and Interstate Gas Supply (collectively, the “Gas Purchasers”) which obligate the Gas Purchasers to purchase, and the Company to sell and deliver, certain quantities of natural gas production from the Company’s oil and gas properties throughout the contract periods. The Company may elect to lock-in specific volumes of natural gas to be sold in specific months at a mutually agreeable price. The Company has elected to lock-in various monthly quantities of natural gas which total 690,000 MCF from November 2016 through October 2017 at various monthly weighted-average pricing provisions averaging $2.46 per MCF, net of regional basis adjustments. Pricing provisions with the Gas Purchasers apply to certain fixed quantities on a monthly basis with excess monthly quantities being priced based on the current spot market price, plus or minus a current regional basis adjustment. The impact of these contracts on the Company’s future oil and gas sales cannot fully be measured until actual production volumes and prices have been determined.

  

Note 5.

Commitments and Contingencies

 

The Company operates exclusively in the United States, almost entirely in Ohio and Pennsylvania, in the business of oil and gas acquisition, exploration, development and production. The Company operates in an environment with many financial risks, including, but not limited to, the ability to acquire additional economically recoverable oil and gas reserves, the inherent risks of the search for, development of and production of oil and gas, the ability to sell oil and gas at prices which will provide attractive rates of return, the volatility and seasonality of oil and gas production and prices, and the highly competitive and, at times, seasonal nature of the industry and worldwide economic conditions. The Company’s ability to expand its reserve base and diversify its operations is also dependent upon the Company’s ability to obtain the necessary capital through operating cash flow, borrowings or equity offerings. Various federal, state and governmental agencies are considering, and some have adopted, laws and regulations regarding environmental protection which could adversely affect the proposed business activities of the Company. The Company cannot predict what effect, if any, current and future regulations may have on the operations of the Company.

 

The Company has natural gas delivery commitments to the Gas Purchasers (See Note 4). Management believes the Company can meet its delivery commitments based on estimated production. If, however, the Company cannot meet its delivery commitments, it may be required to purchase natural gas at market prices to meet such commitments which may result in a gain or loss for the difference between the delivery commitment price and the price at which the Company is able to purchase the natural gas for redelivery (resale) to its customers.

  

 
F-14

Table Of Contents
 

 

EVERFLOW EASTERN PARTNERS, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

   

 

Note 5.

Commitments and Contingencies (continued)

 

In conjunction with the sale of approximately 28,800 acres of deep rights made in 2012, the Company agreed to perpetuate the producing leases for a minimum period of five years. If the Company fails to perpetuate the producing leases during such five-year period, it shall refund to the purchaser the portion of the purchase price attributable to the affected properties based on an allocated value of $1,250 per acre (the “Refund Price”), provided however, that should the Company revive or otherwise renew such expired leases within three months of their expiration, the purchaser shall have the right to acquire the deep rights on such revived or renewed leases for the Refund Price. The Company has assessed the shallow operations of all properties from which deep acreage was sold and does not believe a reserve for potential refunded acreage to be necessary at September 30, 2016.

 

The Company is party to various legal proceedings and claims in the ordinary course of its business. The Company believes certain of these matters will be covered by insurance and that the outcome of other matters will not have a material adverse effect on its consolidated financial position, results of operations, or liquidity.

 

Note 6.

Related Party Transactions

 

The Company’s officers, directors, affiliates and certain employees have frequently participated, and will likely continue to participate in the future, as working interest owners in wells in which the Company has an interest. Frequently, the Company has loaned the funds necessary for certain employees to participate in the drilling and development of such wells. Initial terms of the unsecured loans call for repayment of all principal and accrued interest at the end of four years, however, the loan amounts are reduced from payments made by employees and as production proceeds attributable to the employees’ working interests are not remitted to the employees but rather used to reduce the amounts owed by the employees to the Company. If an outstanding balance remains after the initial four-year term, the Company and employee shall, acting in good faith, agree upon further repayment terms.

 

Employees remain obligated for the entire loan amount regardless of a dry-hole event or otherwise insufficient production. The loans carry no loan forgiveness provisions, and no loans have ever been forgiven. The loans accrue interest at the prime rate, which was 3.50% at September 30, 2016.

 

In accordance with the Sarbanes-Oxley Act of 2002, the Company has not extended any loans to officers or directors since 2002. At September 30, 2016 and December 31, 2015, the Company has extended various loans, evidenced by notes, to two employees with origination dates ranging from December 2010 to December 2015. In addition, three subsequent addenda extending additional two-year payment terms to certain notes are outstanding at September 30, 2016 and December 31, 2015. Employees’ notes receivable, including accrued interest, amounted to $88,294 and $124,437 at September 30, 2016 and December 31, 2015, respectively.

 

 
F-15

Table Of Contents
 

 

Part I:  Financial Information

 

Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion is intended to assist in the understanding of the Company’s liquidity, capital resources and results of operations. It is suggested that this information be read in conjunction with the Company’s interim consolidated financial statements, the related notes to consolidated financial statements and the Company’s 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2016.

 

Liquidity and Capital Resources

 

The following table summarizes the Company's financial position at September 30, 2016 and December 31, 2015:

 

   

September 30, 2016

   

December 31, 2015

 
   

Amount

   

%

   

Amount

   

%

 
   

(Amounts in Thousands)

   

(Amounts in Thousands)

 
                                 

Working capital

  $ 19,546       61

%

  $ 20,421       57

%

Property and equipment (net)

    11,985       38       14,946       42  

Other

    224       1       266       1  

Total

  $ 31,755       100

%

  $ 35,633       100

%

                                 

Deferred income taxes

  $ 71       -

%

  $ 74       -

%

Long-term liabilities

    17,747       56       17,399       49  

Partners' equity

    13,937       44       18,160       51  

Total

  $ 31,755       100

%

  $ 35,633       100

%

 

Working capital of $19.5 million as of September 30, 2016 represented a decrease of $875,000 from December 31, 2015, due primarily to a decrease in cash and equivalents, offset somewhat by an increase in investments and decreases in accounts payable and accrued expenses. The decrease in cash and equivalents was primarily the result of cash held at December 31, 2015 being used in operating and investing activities during the nine months ended September 30, 2016. The increase in investments was the result of purchases of shares in a mutual fund that invests primarily in investment grade, short-term fixed and floating rate debt securities. The decrease in accounts payable was primarily the result of timing of payments made for production related accounts payable. The decrease in accrued expenses was primarily the result of all payroll and retirement contributions accrued at December 31, 2015 having been paid during the nine months ended September 30, 2016.

 

                The Company funds its operation with cash generated by operations and/or existing cash and equivalent balances. The Company has had no borrowings since 2003 and no principal indebtedness was outstanding as of November 10, 2016.                     

 

 

The Company’s cash flow used in operations before the change in working capital was $715,000 during the nine months ended September 30, 2016, a decrease of $2.0 million as compared to $1.3 million of cash flow provided by operations before the change in working capital during the prior comparable period. Changes in working capital from operations other than cash and equivalents decreased cash by $370,000 during the nine months ended September 30, 2016 due primarily to decreases in accounts payable and accrued expenses. Cash flows used in operating activities was $1.1 million for the nine months ended September 30, 2016.

 

Management of the Company believes cash flows and existing cash and equivalents should be sufficient to meet the current funding requirements of ongoing operations and capital investments to develop and/or purchase oil and gas properties. The Company has not paid a quarterly cash distribution since October 2015 and it does not anticipate resuming the payment of quarterly distributions during 2016. The Company’s intentions may change, however, based upon unforeseen changes in the national and/or regional oil and gas markets and their related effect on cash flows or other unrelated factors that have an unforeseen effect on cash flows.

 

The Company has multiple contracts with Dominion Field Services and Interstate Gas Supply (collectively, the “Gas Purchasers”) which obligate the Gas Purchasers to purchase, and the Company to sell and deliver, certain quantities of natural gas production from the Company’s oil and gas properties throughout the contract periods. The Company may elect to lock-in specific volumes of natural gas to be sold in specific months at a mutually agreeable price. The Company has elected to lock-in various monthly quantities of natural gas which total 690,000 MCF from November 2016 through October 2017 at various monthly weighted-average pricing provisions averaging $2.46 per MCF, net of estimated regional basis adjustments. Pricing provisions with the Gas Purchasers apply to certain fixed quantities on a monthly basis with excess monthly quantities being priced based on the current spot market price, plus or minus a current regional basis adjustment. The impact of these contracts on the Company’s future oil and gas sales cannot fully be measured until actual production volumes and prices have been determined.

 

 

Results of Operations

 

The following table and discussion is a review of the results of operations of the Company for the three and nine month periods ended September 30, 2016 and 2015. All items in the table are calculated as a percentage of total revenues. This table should be read in conjunction with the discussions of each item below:

 

   

Three Months

   

Nine Months

 
   

Ended September 30,

   

Ended September 30,

 
   

2016

   

2015

   

2016

   

2015

 
                                 

Revenues:

                               

Crude oil and natural gas sales

    89

%

    92

%

    87

%

    91

%

Well management and operating

    11       8       12       7  

Other

    -       -       1       2  

Total revenues

    100

%

    100

%

    100

%

    100

%

                                 

Expenses:

                               

Production costs

    49       42       62       41  

Well management and operating

    6       5       7       4  

Depreciation, depletion and amortization

    112       75       123       64  

Accretion expense

    11       10       12       9  

General and administrative expense

    57       31       66       32  

Total expenses

    235

%

    163

%

    270

%

    150

%

                                 

Other income

    3       16       2       5  
                                 

Net loss

    (132

)%

    (47

)%

    (168

)%

    (45

)%

  

Revenues for the three and nine month periods ended September 30, 2016 decreased $694,000 and $2.9 million, respectively, as compared to the prior comparable periods. Both decreases were primarily the result of decreases in crude oil and natural gas sales.

 

Crude oil and natural gas sales decreased $659,000, or 45%, during the three months ended September 30, 2016 as compared to the prior comparable period. Crude oil and natural gas sales decreased $2.8 million, or 56%, during the nine months ended September 30, 2016 as compared to the prior comparable period. The decreases were primarily the result of less natural gas and crude oil volumes produced and lower average natural gas and crude oil prices received during the three and nine month periods ended September 30, 2016 as compared to the prior comparable periods. The decrease in natural gas volumes produced during the three and nine month periods ended September 30, 2016 as compared to the prior comparable periods was primarily the result of Company operated properties being voluntarily shut-in during the three and nine month periods ended September 30, 2016 that were not shut-in during the prior comparable periods.

 

 

The Company recognized $30,000 of other revenues during the nine months ended September 30, 2016, a decrease of $77,000 as compared to the prior comparable period. Other revenues of $107,000 recognized during the nine months ended September 30, 2015 were primarily the result of a sale of deep mineral interests associated with 80 acres held by a lease owned by the Company. The Company retained the rights to the shallow portion of the acreage sold. The Company did not recognize any sales of deep mineral interests during the nine months ended September 30, 2016.

 

Production costs decreased $232,000, or 35%, during the three month period ended September 30, 2016 as compared to the prior comparable period. Production costs decreased $685,000, or 30%, during the nine month period ended September 30, 2016 as compared to the prior comparable period. These decreases were primarily the result of less costs associated with Company operated oil and gas properties voluntarily shut-in during the three and nine month periods ended September 30, 2016 that were not shut-in during the prior comparable periods, as well as less costs associated with oil and gas properties operated by third parties.

 

Depreciation, depletion and amortization (“DD&A”) decreased $184,000, or 16%, during the three months ended September 30, 2016 as compared to the prior comparable period. DD&A decreased $413,000, or 12%, during the nine months ended September 30, 2016 as compared to the prior comparable period. The primary reasons for the decreases are lower natural gas and crude oil volumes produced and less depletable bases of oil and gas properties available to deplete during the three and nine month periods ended September 30, 2016 as compared to the prior comparable periods. The decrease in natural gas volumes produced was primarily the result of Company operated properties being voluntarily shut-in during the three and nine month periods ended September 30, 2016 that were not shut-in during the prior comparable periods. The decrease in crude oil volumes produced was primarily the result of natural production decline. Less depletable bases of oil and gas properties is primarily the result of $21.9 million of DD&A, write down/impairment and abandonment of properties recognized during the fiscal year ended December 31, 2015. The effects of lower natural gas and crude oil volumes produced and less depletable bases of oil and gas properties on DD&A was offset somewhat by the effects of lower projected natural gas and crude oil reserves and additional oil and gas properties being depleted during the three and nine month periods ended September 30, 2016 as compared to the prior comparable periods. The decrease in projected natural gas and crude oil reserves is primarily the result of lower benchmark natural gas and crude oil prices indexed throughout the first nine months of 2016 as compared to the benchmark prices indexed throughout the prior comparable period. The lower 2016 benchmark prices project to decrease reserves at December 31, 2016, the next scheduled valuation date, which will in turn project to decrease the average economic life of the Company’s oil and gas properties as compared to December 31, 2015, the prior valuation date. Additional oil and gas properties being depleted are primarily the result of $5.1 million of additions to proved properties and asset retirement obligations recognized at December 31, 2015 in association with revisions made to remaining lives of wells.

 

Accretion expense decreased $56,000, or 37%, during the three month period ended September 30, 2016 as compared to the prior comparable period. Accretion expense decreased $150,000, or 33%, during the nine month period ended September 30, 2016 as compared to the prior comparable period. The primary reasons for these decreases was the result of more asset retirement obligations being fully accreted at January 1, 2016 as compared to January 1, 2015, which resulted in less discounted asset retirement obligations available to accrete during the three and nine month periods ended September 30, 2016 as compared to the prior comparable periods.

 

 

General and administrative expense decreased $106,000, or 6%, during the nine months ended September 30, 2016 as compared to the prior comparable period. The primary reason for this decrease is the result of cost-cutting measures management has implemented in response to the current environment of depressed crude oil and natural gas prices within the national and regional oil and gas industries and its related effects on the Company’s sales, operational cash flows and working capital.      

 

The Company recognized $240,000 of other income during the three and nine months ended September 30, 2015 in association with a gain on sale of other assets. The Company had no sales of other assets during the nine months ended September 30, 2016.

 

The Company reported a net loss of $1.2 million and $4.2 million during the three and nine months ended September 30, 2016, respectively, whereas the Company reported a net loss of $749,000 and $2.5 million during the three and nine months ended September 30, 2015, respectively. The additional net loss recognized in both periods was primarily the result of decreases in crude oil and natural gas sales, other revenues and gain on sale of other assets, offset somewhat by decreases in production costs, DD&A and accretion expense. The additional net loss recognized during the nine months ended September 30, 2016 as compared to the prior comparable period was also offset somewhat by a decrease in general administrative expense. The Company’s net loss represented 132% and 47% of total revenues during the three month periods ended September 30, 2016 and 2015, respectively. The Company’s net loss represented 168% and 45% of total revenues during the nine month periods ended September 30, 2016 and 2015, respectively.

 

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The critical accounting policies that affect the Company’s more complex judgments and estimates are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

 

Forward-Looking Statements

 

Except for historical financial information contained in this Form 10-Q, the statements made in this report are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). In addition, words such as “expects,” “anticipate,” “intends,” “plans,” “believes,” “estimates,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include price fluctuations in the gas market in the Appalachian Basin, actual oil and gas production and the ability to locate economically productive oil and gas prospects for development by the Company. In addition, any forward-looking statements speak only as of the date on which such statement is made and the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

This information has been omitted, as the Company qualifies as a smaller reporting company.

 

 

Item 4.

CONTROLS AND PROCEDURES

 

(a)     Disclosure Controls and Procedures. As of the end of the period covered by this report, management performed, with the participation of our Principal Executive Officer (the “CEO”) and Principal Financial and Accounting Officer (the “CFO”), an evaluation of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15 (the “evaluation”). Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosures. Based on the evaluation, management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

 

The certifications of the Company’s CEO and CFO are attached as Exhibits 31.1 and 31.2 to this Quarterly Report on Form 10-Q and include, in paragraph 4 of such certifications, information concerning the Company’s disclosure controls and procedures and internal control over financial reporting. Such certifications should be read in conjunction with the information contained in this Item 4., including the information incorporated by reference to our filing on Form 10-K for the year ended December 31, 2015, for a more complete understanding of the matters covered by such certifications.

 

(b)     Changes in internal control over financial reporting. No change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

  

Part II.  Other Information

 

Item 6.          EXHIBITS

 

 

Exhibit 31.1

Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

Exhibit 31.2

Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

Exhibit 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

101.INS

Instance Document

 

 

101.SCH

XBRL Taxonomy Extension Schema Document

 

 

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

 

 

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

 

 

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

101.DEF

XBRL Taxonomy Definition Linkbase Document

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

EVERFLOW EASTERN PARTNERS, L.P.

 

   

 

By:

EVERFLOW MANAGEMENT LIMITED, LLC

 

 

General Partner

 

   

 

By: EVERFLOW MANAGEMENT CORPORATION

 

 

Managing Member

 

 

 

 

 

 

Dated: November 10, 2016

By:

/s/ Brian A. Staebler                                                                     

 

 

Brian A. Staebler

 

 

Vice President, Secretary-Treasurer and

Principal Financial and Accounting Officer

 

 

(Duly Authorized Officer)

 

 

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