Partners' Equity and Cash Distributions
 12 Months Ended
Dec. 31, 2013
Equity [Abstract]  
Partners' Capital Notes Disclosure [Text Block]
PARTNERS' EQUITY AND CASH DISTRIBUTIONS

Partners' Equity

Limited Partner Units. A limited partner unit represents the individual interest of an individual investor partner in this Partnership. No public market exists or will develop for the units. While units of this Partnership are transferable, assignability of the units is limited, requiring the consent of the Managing General Partner. Further, individual investor partners may request that the Managing General Partner repurchase units pursuant to the unit repurchase program described below.

Allocation of Partners' Interest. The following table presents the participation of the Investor Partners and the Managing General Partner in the revenues and costs of this Partnership:
 
 
 
 
Managing
 
 
Investor
 
General
 
 
Partners
 
Partner
Partnership Revenue:
 
 
 
 
Crude oil, natural gas and NGLs sales
 
80
%
 
20
%
Preferred cash distribution (a)
 
100
%
 
—
%
Commodity price risk management gain (loss)
 
80
%
 
20
%
Sale of productive properties
 
80
%
 
20
%
Sale of equipment
 
—
%
 
100
%
Interest income
 
80
%
 
20
%
 
 
 
 
 
Partnership Operating Costs and Expenses:
 
 
 
 
Crude oil, natural gas and NGLs production and well
 
 
 
 
operations costs (b)
 
80
%
 
20
%
Depreciation, depletion and amortization expense
 
80
%
 
20
%
Accretion of asset retirement obligations
 
80
%
 
20
%
Direct costs - general and administrative (c)
 
80
%
 
20
%


(a)
To the extent that Investor Partners receive preferred cash distributions, the allocations for Investor Partners will be increased accordingly and the allocation for the Managing General Partner will likewise be decreased. See Performance Standard Obligation of Managing General Partner below.
(b)
Represents operating costs incurred after the completion of productive wells, including monthly per-well charges paid to the Managing General Partner.
(c)
The Managing General Partner receives monthly reimbursement from this Partnership for direct costs - general and administrative incurred by the Managing General Partner on behalf of this Partnership.

Performance Standard Obligation of Managing General Partner. The Agreement provides for the enhancement of investor cash distributions if this Partnership does not meet a performance standard defined in the Agreement during the first 10 years of operations, beginning 6 months after the funding of this Partnership. In general, if the average annual rate of return to the Investor Partners is less than 12.8% of their subscriptions, the allocation rate of cash distributions to Investor Partners will increase up to one-half of the Managing General Partner's interest until the average annual rate increases to 12.8%, with a corresponding decrease to Managing General Partner. The 12.8% rate of return is calculated by including the estimated benefit of 25% income tax savings on the investment in the first year in addition to the cash distributions made to the Investor Partners as a percentage of the investment, divided by the number of years since the closing of this Partnership less six months.

Beginning in November 2009 when the conditions of the obligation arose, and expiring upon the termination of Performance Standard Obligation provision in February 2013, this Partnership modified the allocation rate of all items of profit and loss and resulting cash available for distribution between Managing General Partner and the Investor Partners, pursuant to this provision of the Agreement. For the twelve months ended December 31, 2013 and 2012, distributions paid to the Managing General Partner were reduced and distributions to the Investor Partners were increased by $668 and $3,345, respectively, as a result of the Preferred Cash Distribution made under the terms of this provision. Accumulated Preferred Cash Distributions paid to the Investor Partners through December 31, 2013 were $70,390.

Unit Repurchase Provisions. Investor Partners may request that the Managing General Partner repurchase limited partnership units at any time beginning with the third anniversary of the first cash distribution of this Partnership. The repurchase price is set at a minimum of four times the most recent twelve months of cash distributions from production. In any calendar year, the Managing General Partner is conditionally obligated to purchase Investor Partner units aggregating up to 10% of the initial subscriptions, if requested by an individual investor partner, subject to PDC's financial ability to do so and upon receipt of opinions of counsel that the repurchase will not cause this Partnership to be treated as a “publicly traded partnership” or result in the termination of this Partnership for federal income tax purposes. If accepted, repurchase requests are fulfilled by the Managing General Partner on a first-come, first-served basis.

Cash Distributions

The Agreement requires the Managing General Partner to distribute cash available for distribution no less frequently than quarterly. Except as modified under the Performance Standard Obligation provision, the Managing General Partner determines and distributes cash on a monthly basis, if funds are available for distribution. The Managing General Partner makes cash distributions of 80% to the Investor Partners and 20% to the Managing General Partner. Cash distributions began in March 2003. The following table presents the cash distributions made to the Investor Partners and Managing General Partner during the years indicated:
 
 
Year ended December 31,
 
 
2013
 
2012
 
 
 
 
 
Cash distributions
 
$
285,394

 
$
35,297



Cash distributions increased in 2013 compared to 2012, primarily due to the July 2013 distribution of approximately $235,000 of the proceeds received for the Piceance Basin asset divestiture. See Note 11, Divestiture and Discontinued Operations, for additional details related to the divestiture of this Partnership's Piceance Basin assets.