<PAGE>
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 quarter ended Commission File Number
June 30, 1995 2-59769-03 (1978-1)
2-59769-04 (1978-2)
DYCO 1978 OIL AND GAS PROGRAMS
(TWO LIMITED PARTNERSHIPS)
(Exact Name of Registrant as specified in its charter)
41-1343930 (1978-1)
Minnesota 41-1343935 (1978-2)
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(918) 583-1791
---------------------------------------------------
(Registrant's telephone number, including area code)
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
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DYCO OIL AND GAS PROGRAM 1978-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1995 1994
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 54,985 $ 35,769
Accrued oil and gas sales, including
$21,286 and $22,230 due from
related parties (Note 2) . . . . . . 22,317 26,596
-------- --------
Total current assets . . . . . . . $ 77,302 $ 62,365
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 244,941 259,917
DEFERRED CHARGE . . . . . . . . . . . . . 43,290 43,290
-------- --------
$365,533 $365,572
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 3,309 $ 2,781
-------- --------
Total current liabilities . . . . . . $ 3,309 $ 2,781
ACCRUED LIABILITY . . . . . . . . . . . . 22,425 22,425
CONTINGENCIES (Note 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
24 units . . . . . . . . . . . . . . 3,398 3,404
Limited Partners, issued and outstanding,
2,400 units . . . . . . . . . . . . 336,401 336,962
-------- --------
Total Partners' capital . . . . . . $339,799 $340,366
-------- --------
$365,533 $365,572
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
---------- ---------
REVENUES:
Oil and gas sales, including
$24,972 and $41,162 of sales
to related parties (Note 2) . . . . $33,576 $60,588
Interest . . . . . . . . . . . . . . . 520 493
------- -------
$34,096 $61,081
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $13,197 $20,474
Depreciation, depletion, and amortization of
oil and gas properties . . . . . . . 12,246 22,341
General and administrative (Note 2) . 8,906 7,042
------- -------
$34,349 $49,857
------- -------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 253) $11,224
======= =======
GENERAL PARTNER (1%) - net (loss) income ($ 3) $ 112
======= =======
LIMITED PARTNERS (99%) - net (loss) income ($ 250)
$11,112
======= =======
NET INCOME PER UNIT . . . . . . . . . . . $ - $ 5
======= =======
UNITS OUTSTANDING . . . . . . . . . . . . 2,424 2,424
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
---------- ---------
REVENUES:
Oil and gas sales, including
$52,263 and $122,020 of sales
to related parties (Note 2) . . . . $65,864 $154,686
Interest . . . . . . . . . . . . . . . 933 1,057
------- --------
$66,797 $155,743
------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $25,368 $ 38,183
Depreciation, depletion, and amortization of
oil and gas properties . . . . . . . 23,290 46,539
General and administrative (Note 2) . 18,706 16,312
------- --------
$67,364 $101,034
------- --------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 567) $ 54,709
======= ========
GENERAL PARTNER (1%) - net (loss) income ($ 6) $ 547
======= ========
LIMITED PARTNERS (99%) - net (loss) income ($ 561) $ 54,162
======= ========
NET INCOME PER UNIT . . . . . . . . . . . $ - $ 23
======= ========
UNITS OUTSTANDING . . . . . . . . . . . . 2,424 2,424
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-1 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income . . . . . . . . . . ($ 567) $ 54,709
Adjustments to reconcile net (loss) income
to net cash provided (used) by operating
activities:
Depreciation, depletion, and amortization of
oil and gas properties . . . . . . 23,290 46,539
Decrease (increase) in accrued oil
gas sales . . . . . . . . . . . . 4,279 ( 7,770)
Increase in accounts payable . . . . 528 552
Decrease in related party payable . - ( 171,055)
------- --------
Net cash provided (used) by operating
activities . . . . . . . . . . . . $27,530 ($ 77,025)
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 8,314) ($ 11,905)
------- --------
Net cash used by investing activities ($ 8,314) ($ 11,905)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . $ - ($109,080)
------- --------
Net cash used by financing activities $ - ($109,080)
------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS . . . . . . . . . . . $19,216 ($198,010)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 35,769 234,274
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $54,985 $ 36,264
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1995 1994
-----------------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 22,663 $ 7,831
Accrued oil and gas sales, including
$14,420 and $17,560 due from
related parties (Note 2) . . . . . . 24,288 27,923
-------- --------
Total current assets . . . . . . . $ 46,951 $ 35,754
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 66,976 80,941
DEFERRED CHARGE . . . . . . . . . . . . . 10,687 10,687
-------- --------
$124,614 $127,382
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 3,435 $ 3,111
-------- --------
Total current liabilities . . . . . $ 3,435 $ 3,111
ACCRUED LIABILITY . . . . . . . . . . . . 12,878 12,878
CONTINGENCIES (Note 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
16 units . . . . . . . . . . . . . . 1,083 1,114
Limited Partners, issued and outstanding,
1,600 units . . . . . . . . . . . . 107,218 110,279
-------- --------
Total Partners' capital . . . . . . $108,301 $111,393
-------- --------
$124,614 $127,382
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$24,989 and $39,471 of sales
to related parties (Note 2) . . . . $25,198 $57,469
Interest . . . . . . . . . . . . . . . 207 70
------- -------
$25,405 $57,539
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $19,681 $16,735
Depreciation, depletion, and amortization of
oil and gas properties . . . . . . . 6,264 14,675
General and administrative (Note 2) . 7,353 6,099
------- -------
$33,298 $37,509
------- -------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 7,893) $20,030
======= =======
GENERAL PARTNER (1%) - net (loss) income ($ 79) $ 201
======= =======
LIMITED PARTNERS (99%) - net (loss) income ($ 7,814) $19,829
======= =======
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 5) $ 13
======= =======
UNITS OUTSTANDING . . . . . . . . . . . . 1,616 1,616
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$44,854 and $72,899 of sales
to related parties (Note 2) . . . . $55,969 $151,696
Interest . . . . . . . . . . . . . . . 281 325
------- --------
$56,250 $152,021
------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $30,241 $ 38,204
Depreciation, depletion, and amortization of
oil and gas properties . . . . . . . 13,894 32,918
General and administrative (Note 2) . 15,207 13,722
------- --------
$59,342 $ 84,844
------- --------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 3,092) $ 67,177
======= ========
GENERAL PARTNER (1%) - net (loss) income ($ 31) $ 672
======= ========
LIMITED PARTNERS (99%) - net (loss) income ($ 3,061) $ 66,505
======= ========
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 2) $ 42
======= ========
UNITS OUTSTANDING . . . . . . . . . . . . 1,616 1,616
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-2 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income . . . . . . . . . . ($ 3,092) $67,177
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . . . 13,894 32,918
Decrease (increase) in accrued oil and
gas sales . . . . . . . . . . . . . 3,635 ( 6,718)
Decrease in payable to General Partner - ( 6,900)
Increase in accounts payable . . . . 324 554
------- -------
Net cash provided by operating
activities $14,761 $87,031
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . $ - ($ 2,391)
Retirements of oil and gas properties 71 -
------- -------
Net cash provided (used) by investing
activities . . . . . . . . . . . . $ 71 ($ 2,391)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . $ - ($80,800)
------- -------
Net cash used by financing activities $ - ($80,800)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS $14,832 $ 3,840
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 7,831 24,573
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $22,663 $28,413
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1978-1 LIMITED PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1978-2 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of June 30, 1995, statements of operations
for the three and six months ended June 30, 1995 and 1994, and
statements of cash flows for the six months ended June 30, 1995 and
1994 have been prepared by Dyco Petroleum Corporation ("Dyco"), the
General Partner of the Dyco Oil and Gas Program 1978-1 and 1978-2
Limited Partnerships (individually, the "1978-1 Program" or the
"1978-2 Program", as the case may be, or, collectively, the
"Programs"), without audit. In the opinion of management all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position at June 30,
1995, results of operations for the three and six months ended June
30, 1995 and 1994, and changes in cash flows for the six months
ended June 30, 1995 and 1994 have been made.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is
suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the
Programs' Annual Report on Form 10-K for the year ended December
31, 1994. The results of operations for the period ended June 30,
1995 are not necessarily indicative of the results to be expected
for the full year.
The limited partners' net income or loss per unit is based upon
each $5,000 initial capital contribution.
OIL AND GAS PROPERTIES
----------------------
Oil and gas operations are accounted for using the full cost method
of accounting. All productive and non-productive costs associated
with the acquisition, exploration and development of oil and gas
reserves are capitalized. Sales and abandonments of properties are
accounted for as adjustments of capitalized costs with no gain or
loss recognized, unless such adjustments would significantly alter
the relationship between capitalized costs and proved oil and gas
reserves.
The provision for depreciation, depletion, and amortization of oil
and gas properties is calculated by dividing the oil and gas sales
dollars during the year by the estimated future gross income from
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the oil and gas properties and applying the resulting rate to the
net remaining costs of oil and gas properties that have been
capitalized, plus estimated future development costs.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
Under the terms of each of the Program's partnership agreement,
Dyco is entitled to receive a reimbursement for all direct expenses
and general and administrative, geological and engineering expenses
it incurs on behalf of the Program. During the six months ended
June 30, 1995 and 1994 the 1978-1 Program incurred such expenses
totaling $18,706 and $16,312, respectively, of which $12,438 and
$12,438 were paid to Dyco. During the six months ended June 30,
1995 and 1994 the 1978-2 Program incurred such expenses totaling
$15,207 and $13,722, respectively, of which $10,944 and $10,944
were paid to Dyco.
Affiliates of the Programs are the operators of certain of the
Programs' properties and their policy is to bill the Programs for
all customary charges and cost reimbursements associated with their
activities, together with any compressor rentals, consulting, or
other services provided.
The Programs sell gas at market prices to Premier Gas Company
("Premier"), an affiliated company, and Premier may then resell
such gas to third parties at market prices. During the six months
ended June 30, 1995 and 1994 these sales for the 1978-1 Program
totaled $52,263 and $122,020, respectively. At June 30, 1995
accrued oil and gas sales for the 1978-1 Program included $21,286
due from Premier. During the six months ended June 30, 1995 and
1994 these sales for the 1978-2 Program totaled $44,854 and
$72,899, respectively. At June 30, 1995 accrued oil and gas sales
for the 1978-2 Program included $14,420 due from Premier.
3. CONTINGENCIES
-------------
On November 12, 1993, two royalty owners filed a class action
lawsuit against Dyco in which the plaintiffs alleged entitlement to
a share of the proceeds of a take-or-pay settlement with a gas
purchaser which involved one of the Program's wells. This lawsuit
is a successor lawsuit to a suit that was filed in 1991 and
dismissed in 1993 following a district court's failure to certify a
class action. The lawsuit also alleged claims based on breach of
contract, bad faith breach of contract, breach of an implied
covenant to market, unjust enrichment, and constructive fraud and
requested an accounting and a temporary restraining order. The
plaintiffs have not quantified the amount of their alleged damages.
The district court has certified the matter as a class action and
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Dyco has appealed the court's order. Dyco's appeal is currently
pending. Dyco has also filed its answer in the mater in which it
denied all of the plaintiffs' allegations. Discovery is proceeding
in the matter and Dyco intends to vigorously defend the lawsuit.
As of the date of these financial statements, management cannot
determine the amount of any alleged damages which would be
allocable to the Program.
On March 5, 1992 Walter K. Spurlin, et al. filed a lawsuit against
Dyco in which the plaintiffs alleged that Dyco, as operator of one
of the Program's wells, failed to respond to their request for an
accounting of production. The plaintiffs are seeking a full
accounting of all production from the well and judgment for breach
of contract and their alleged share of the proceeds from certain
gas contract settlements. The plaintiffs have not quantified the
amount of their alleged damages. Dyco has filed its answer in the
matter in which it denied all of the plaintiffs' allegations and
discovery is ongoing. Dyco intends to vigorously defend the
lawsuit. On April 21, 1992, Dyco's motion to dismiss plaintiff's
claim for tortious breach of contract was granted, thereby
eliminating any punitive damages claims. As of the date of these
financial statements, management cannot determine the amount of
alleged damages which would be allocable to the Program.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net proceeds from the Programs' operations less necessary
operating capital are distributed to investors on a quarterly
basis. The net proceeds from production are not reinvested in
productive assets, except to the extent that producing wells are
improved or where methods are employed to permit more efficient
recovery of the Programs' reserves which would result in a
positive economic impact.
The Programs' available capital from subscriptions has been spent
on oil and gas drilling activities. There should not be any
further material capital resource commitments in the future. The
Programs' have no bank debt commitments. Cash for operational
purposes will be provided by current oil and gas production.
RESULTS OF OPERATIONS
- ---------------------
1978-1 PROGRAM
THREE MONTHS ENDED JUNE 30, 1995 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1994.
Three months ended June 30,
---------------------------
1995 1994
---- ----
Oil and gas sales $33,576 $60,588
Oil and gas production expenses $13,197 $20,474
Barrels produced 255 336
Mcf produced 21,004 35,794
Average price/Bbl $ 18.40 $ 13.51
Average price/Mcf $ 1.38 $ 1.57
As shown in the table, oil and natural gas sales decreased 44.6%
for the three months ended June 30, 1995 as compared to the three
months ended June 30, 1994. This decrease resulted from
decreases in the volumes of oil and natural gas sold and a
decrease in the average price of natural gas sold, partially
offset by an increase in the average price of oil sold during the
three months ended June 30, 1995 as compared to the three months
ended June 30, 1994. Volumes of oil and natural gas sold
decreased by 81 barrels and 14,790 Mcf, respectively, for the
three months ended June 30, 1995 as compared to the three months
ended June 30, 1994. The decrease in the volumes of natural gas
sold was primarily the result of a significant positive prior
period volume adjustment from a purchaser on a certain well
during the three months ended June 30, 1994. Average natural gas
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prices decreased to $1.38 per Mcf for the three months ended June
30, 1995 from $1.57 per Mcf for the three months ended June 30,
1994, while average oil prices increased to $18.40 per barrel for
the three months ended June 30, 1995 from $13.51 per barrel for
the three months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $7,277 for the three
months ended June 30, 1995 as compared to the three months ended
June 30, 1994. This decrease was primarily a result of the
decrease in the volumes of natural gas sold during the three
months ended June 30, 1995 as compared to the three months ended
June 30, 1994. As a percentage of oil and gas sales, these
expenses increased to 39.3% for the three months ended June 30,
1995 from 33.8% for the three months ended June 30, 1994. The
percentage increase was primarily a result of the decrease in the
average price of natural gas sold during the three months ended
June 30, 1995 as compared to the three months ended June 30,
1994, partially offset by an increase in the average price of oil
sold during the three months ended June 30, 1995 as compared to
the similar period in 1994.
Depreciation, depletion, and amortization of oil and gas
properties decreased $10,095 for the three months ended June 30,
1995 as compared to the three months ended June 30, 1994. This
decrease was consistent with the decreases in the volumes of oil
and natural gas sold during the three months ended June 30, 1995
as compared to the three months ended June 30, 1994. As a
percentage of oil and gas sales, this expense remained relatively
constant at 36.5% for the three months ended June 30, 1995
compared to 36.9% for the three months ended June 30, 1994.
General and administrative expenses increased by $1,864 for the
three months ended June 30, 1995 as compared to the three months
ended June 30, 1994. The dollar increase resulted primarily from
an increase in the 1978-1 Program's professional fees during the
three months ended June 30, 1995 as compared to the three months
ended June 30, 1994. As a percentage of oil and gas sales, these
expenses increased to 26.5% for the three months ended June 30,
1995 from 11.6% for the three months ended June 30, 1994. This
percentage increase was primarily due to the decreases in the
volumes of oil and natural gas sold and a decrease in the average
price of natural gas sold during the three months ended June 30,
1995 as compared to the three months ended June 30, 1994,
partially offset by an increase in the average price of oil sold
during the three months ended June 30, 1995 as compared to the
similar period in 1994.
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SIX MONTHS ENDED JUNE 30, 1995 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1994.
Six months ended June 30,
-------------------------
1995 1994
---- ----
Oil and gas sales $65,864 $154,686
Oil and gas production expenses $25,368 $ 38,183
Barrels produced 422 621
Mcf produced 45,649 100,262
Average price/Bbl $ 15.34 $ 14.27
Average price/Mcf $ 1.30 $ 1.45
As shown in the table, oil and natural gas sales decreased 57.4%
for the six months ended June 30, 1995 as compared to the six
months ended June 30, 1994. This decrease resulted from
decreases in the volumes of oil and natural gas sold and a
decrease in the average price of natural gas sold, partially
offset by an increase in the average price of oil sold during the
six months ended June 30, 1995 as compared to the six months
ended June 30, 1994. Volumes of oil and natural gas sold
decreased 199 barrels and 54,613 Mcf, respectively, for the six
months ended June 30, 1995 as compared to the six months ended
June 30, 1994. The decrease in the volumes of natural gas sold
was primarily the result of significant positive prior period
volume adjustments from several purchasers on certain wells
during the six months ended June 30, 1994. Average natural gas
prices decreased to $1.30 per Mcf for the six months ended June
30, 1995 from $1.45 per Mcf for the six months ended June 30,
1994, while average oil prices increased to $15.34 per barrel for
the six months ended June 30, 1995 from $14.27 per barrel for the
six months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $12,815 for the six
months ended June 30, 1995 as compared to the six months ended
June 30, 1994. This decrease was primarily a result of the
decrease in the volumes of oil and natural gas sold during the
six months ended June 30, 1995 compared to the six months ended
June 30, 1994. As a percentage of oil and gas sales, these
expenses increased to 38.5% for the six months ended June 30,
1995 from 24.7% for the six months ended June 30, 1994. This
percentage increase was primarily a result of the decrease in
the average price of natural gas sold during the six months ended
June 30, 1995 as compared to the six months ended June 30, 1994,
partially offset by an increase in the average price of oil sold
for the six months ended June 30, 1995 as compared to the similar
period in 1994.
Depreciation, depletion, and amortization of oil and gas
properties decreased $23,249 for the six months ended June 30,
1995 as compared to the six months ended June 30, 1994. This
decrease was consistent with the decreases in volumes of oil and
natural gas sold during the six months ended June 30, 1995 as
compared to the six months ended June 30, 1994. As a percentage
of oil and gas sales, this expense increased to 35.4% for the six
months ended June 30, 1995 from 30.1% for the six months ended
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June 30, 1994. This percentage increase was primarily due to the
decrease in the average price of natural gas sold during the six
months ended June 30, 1995 as compared to the six months ended
June 30, 1994, partially offset by an increase in the average
price of oil sold during the six months ended June 30, 1995 as
compared to the similar period in 1994.
General and administrative expenses increased by $2,394 for the
six months ended June 30, 1995 as compared to the six months
ended June 30, 1994. This dollar increase resulted primarily
from an increase in the 1978-1 Program's professional fees during
the six months ended June 30, 1995 as compared to the six months
ended June 30, 1994. As a percentage of oil and gas sales, these
expenses increased to 28.4% for the six months ended June 30,
1995 from 10.5% for the six months ended June 30, 1994. This
percentage increase was primarily due to decreases in the volumes
of oil and natural gas sold and a decrease in the average price
of natural gas sold during the six months ended June 30, 1995 as
compared to the six months ended June 30, 1994, partially offset
by an increase in the average price of oil sold for the six
months ended June 30, 1995 as compared to the similar period in
1994.
1978-2 PROGRAM
THREE MONTHS ENDED JUNE 30, 1995 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1994.
Three months ended June 30,
---------------------------
1995 1994
----- -----
Oil and gas sales $25,198 $ 57,469
Oil and gas production expenses $19,681 $ 16,735
Barrels produced 171 1,167
Mcf produced 15,761 23,085
Average price/Bbl $ 18.36 $ 15.42
Average price/Mcf $ 1.40 $ 1.71
As shown in the table, oil and natural gas sales decreased 56.2%
for the three months ended June 30, 1995 as compared to the three
months ended June 30, 1994. This decrease resulted from
decreases in the volumes of oil and natural gas sold and a
decrease in the average price of natural gas sold, partially
offset by an increase in the average price of oil sold during the
three months ended June 30, 1995 as compared to the three months
ended June 30, 1994. Volumes of oil and natural gas sold
decreased 996 barrels and 7,324 Mcf, respectively, for the three
months ended June 30, 1995 as compared to the three months ended
June 30, 1994. This decrease in the volumes of oil and natural
gas sold resulted primarily from the shutting in of one of the
1978-2 Program's wells during a portion of the three months ended
June 30, 1995 to improve future production capabilities by
increasing pressure on the well. Average natural gas prices
-16-
<PAGE>
<PAGE>
decreased to $1.40 per Mcf for the three months ended June 30,
1995 from $1.71 per Mcf for the three months ended June 30, 1994,
while average oil prices increased to $18.36 per barrel for the
three months ended June 30, 1995 from $15.42 per barrel for the
three months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased slightly by $2,946 for
the three months ended June 30, 1995 as compared to the three
months ended June 30, 1994. This increase was primarily due to
workover charges on one of the 1978-2 Program's wells during the
three months ended June 30, 1995 to improve recovery of reserves.
As a percentage of oil and gas sales, these expenses increased to
78.1% for the three months ended June 30, 1995 from 29.1% for the
three months ended June 30, 1994. This percentage increase was
primarily due to the dollar increase in production expenses as
discussed above and the decrease in the average price of natural
gas sold, partially offset by an increase in the average price of
oil sold for the three months ended June 30, 1995 as compared to
the three months ended June 30, 1994.
Depreciation, depletion, and amortization of oil and gas
properties decreased $8,411 for the three months ended June 30,
1995 as compared to the three months ended June 30, 1994. This
decrease was consistent with the decreases in volumes of oil and
natural gas sold during the three months ended June 30, 1995 as
compared to the three months ended June 30, 1994. As a
percentage of oil and gas sales, this expense remained relatively
constant at 25.0% for the three months ended June 30, 1995
compared to 25.5% for the three months ended June 30, 1994.
General and administrative expenses increased by $1,254 for the
three months ended June 30, 1995 as compared to the three months
ended June 30, 1994. This dollar increase resulted primarily
from an increase in the 1978-2 Program's professional fees during
the three months ended June 30, 1995 as compared to the three
months ended June 30, 1994. As a percentage of oil and gas
sales, these expenses increased to 29.2% for the three months
ended June 30, 1995 from 10.6% for the three months ended June
30, 1994. This percentage increase was primarily due to a
decrease in the volumes of oil and natural gas sold and a
decrease in the average price of natural gas sold during the
three months ended June 30, 1995 as compared to the three months
ended June 30, 1994, partially offset by an increase in the
average price of oil sold for the three months ended June 30,
1995 as compared to the similar period in 1994.
-17-
<PAGE>
SIX MONTHS ENDED JUNE 30, 1995 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1994.
Six months ended June 30,
-------------------------
1995 1994
---- ----
Oil and gas sales $55,969 $151,696
Oil and gas production expenses $30,241 $ 38,204
Barrels produced 633 2,249
Mcf produced 34,785 77,141
Average price/Bbl $ 17.89 $ 16.24
Average price/Mcf $ 1.28 $ 1.49
As shown in the table, oil and natural gas sales decreased 63.1%
for the six months ended June 30, 1995 as compared to the six
months ended June 30, 1994. This decrease resulted from decreases
in the volumes of oil and natural gas sold and a decrease in the
average price of natural gas sold, partially offset by an
increase in the average price of oil sold during the six months
ended June 30, 1995 as compared to the six months ended June 30,
1994. Volumes of oil and natural gas sold decreased 1,616
barrels and 42,356 Mcf, respectively, for the six months ended
June 30, 1995 as compared to the six months ended June 30, 1994.
This decrease was primarily the result of a significant positive
prior period volume adjustment from a purchaser on a certain well
during the six months ended June 30, 1994 and one of the 1978-2
Program's wells being partially shut-in during the six months
ended June 30, 1995 to improve future production capabilities by
increasing pressure on the well. Average natural gas prices
decreased to $1.28 per Mcf for the six months ended June 30, 1995
from $1.49 per Mcf for the six months ended June 30, 1994, while
average oil prices increased to $17.89 per barrel for the six
months ended June 30, 1995 from $16.24 per barrel for the six
months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $7,963 for the six
months ended June 30, 1995 as compared to the six months ended
June 30, 1994. This decrease was primarily due to the decrease
in the volumes of oil and natural gas sold during the six months
ended June 30, 1995 as compared to the six months ended June 30,
1994, partially offset by workover charges on one of the 1978-2
Program's wells during the six months ended June 30, 1995 to
improve the recovery of reserves. As a percentage of oil and
gas sales, these expenses increased to 54.0% for the six months
ended June 30, 1995 from 25.2% for the six months ended June 30,
1994. This percentage increase was primarily due to the workover
charges discussed above and the decrease in the average price of
natural gas sold during the six months ended June 30, 1995 as
compared to the six months ended June 30, 1994, partially offset
by an increase in the average price of oil sold for the six
months ended June 30, 1995 as compared to the similar period in
1994.
Depreciation, depletion, and amortization of oil and gas
properties decreased $19,024 for the six months ended June 30,
1995 as compared to the six months ended June 30, 1994. This
decrease was consistent with the decreases in volumes of oil and
-18-
<PAGE>
<PAGE>
natural gas sold during the six months ended June 30, 1995 as
compared to the six months ended June 30, 1994. As a percentage
of oil and gas sales, this expense increased to 24.8% for the six
months ended June 30, 1995 from 21.7% for the six months ended
June 30, 1994. This percentage increase was primarily a result
of the decrease in the average price of natural gas sold,
partially offset by the increase in the average price of oil sold
during the six months ended June 30, 1995 as compared to the six
months ended June 30, 1994.
General and administrative expenses increased by $1,485 for the
six months ended June 30, 1995 as compared to the six months
ended June 30, 1994. This dollar increase resulted primarily from
an increase in the 1978-2 Program's professional fees during the
six months ended June 30, 1995 as compared to the six months
ended June 30, 1994. As a percentage of oil and gas sales, these
expenses increased to 27.2% for the six months ended June 30,
1995 from 9.0% for the six months ended June 30, 1994. This
percentage increase was primarily due to a decrease in the
volumes of oil and natural gas sold and a decrease in the average
price of natural gas sold during the six months ended June 30,
1995 as compared to the six months ended June 30, 1994, partially
offset by an increase in the average price of oil sold for the
six months ended June 30, 1995 as compared to the similar period
in 1994.
-19-
<PAGE>
<PAGE>
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
-20-
<PAGE>
<PAGE>
SIGNATURES
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.
DYCO OIL AND GAS PROGRAM 1978-1 LIMITED PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1978-2 LIMITED PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: August 7, 1995 By: /s/Dennis R. Neill
----------------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: August 7, 1995 By: /s/Patrick M. Hall
----------------------------
(Signature)
Patrick M. Hall
Senior Vice President - Controller
Principal Accounting Officer
-21-
-20-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000215718
<NAME> DYCO OIL AND GAS PROGRAM 1978-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 54,985
<SECURITIES> 0
<RECEIVABLES> 22,317
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 77,302
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 365,533
<CURRENT-LIABILITIES> 3,309
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 339,799
<TOTAL-LIABILITY-AND-EQUITY> 365,533
<SALES> 65,864
<TOTAL-REVENUES> 66,797
<CGS> 0
<TOTAL-COSTS> 67,364
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (567)
<INCOME-TAX> 0
<INCOME-CONTINUING> (567)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (567)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000806572
<NAME> DYCO OIL AND GAS PROGRAM 1978-2 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 22,663
<SECURITIES> 0
<RECEIVABLES> 24,288
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 46,951
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 124,614
<CURRENT-LIABILITIES> 3,435
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 108,301
<TOTAL-LIABILITY-AND-EQUITY> 124,614
<SALES> 55,969
<TOTAL-REVENUES> 56,250
<CGS> 0
<TOTAL-COSTS> 59,342
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,092)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,092)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,092)
<EPS-PRIMARY> (2.00)
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