<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
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
March 31, 1995 0-10442
DYCO OIL AND GAS PROGRAM 1981-1
(A LIMITED PARTNERSHIP)
(Exact Name of Registrant as specified in its charter)
Minnesota 41-1411953
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103
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(Address of principal executive offices) (Zip Code)
(918) 583-1791
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(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 1981-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1995 1994
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $106,593 $ 91,259
Accrued oil and gas sales, including
$24,466 and $29,152 due from
related parties (Note 2) . . . . . . 30,091 35,597
-------- --------
Total current assets . . . . . . . $136,684 $126,856
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 151,839 153,111
DEFERRED CHARGE . . . . . . . . . . . . . 43,842 43,842
-------- --------
$332,365 $323,809
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 26,295 $ 25,883
Gas imbalance payable . . . . . . . . 15,434 15,434
-------- --------
Total current liabilities . . . . . $ 41,729 $ 41,317
ACCRUED LIABILITY . . . . . . . . . . . . 64,783 64,783
CONTINGENCY (Note 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
70 units . . . . . . . . . . . . . . 2,257 2,176
Limited Partners, issued and outstanding,
7,000 units . . . . . . . . . . . . 223,596 215,533
-------- --------
Total Partners' capital . . . . . . $225,853 $217,709
-------- --------
$332,365 $323,809
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1995 1994
-------- ---------
REVENUES:
Oil and gas sales, including
$52,017 and $115,778 of sales
to related parties (Note 2) . . . . $68,700 $128,560
Interest . . . . . . . . . . . . . . . 1,223 657
------- --------
$69,923 $129,217
------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $26,989 $ 56,863
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 12,654 18,779
General and administrative (Note 2) . 22,136 20,743
------- --------
$61,779 $ 96,385
------- --------
NET INCOME . . . . . . . . . . . . . . . $ 8,144 $ 32,832
======= ========
GENERAL PARTNER (1%) - net income . . . . $ 81 $ 328
======= ========
LIMITED PARTNERS (99%) - net income . . . $ 8,063 $ 32,504
======= ========
NET INCOME PER UNIT . . . . . . . . . . . $ 1 $ 5
======= ========
UNITS OUTSTANDING . . . . . . . . . . . . 7,070 7,070
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . $ 8,144 $ 32,832
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 12,654 18,779
Decrease (increase) in accrued oil and
gas sales . . . . . . . . . . . . . 5,506 ( 11,011)
Increase in accounts payable . . . . 412 21,595
-------- --------
Net cash provided by operating
activities $ 26,716 $ 62,195
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 11,382) $ -
Retirements of oil and gas properties - 163
-------- --------
Net cash (used) provided by investing
activities. . . . . . . . . . . ($ 11,382) $ 163
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash used by financing activities $ - $ -
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 15,334 $ 62,358
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 91,259 83,688
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $106,593 $146,046
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of March 31, 1995, statements of
operations for the three months ended March 31, 1995 and 1994,
and statements of cash flows for the three months ended March
31, 1995 and 1994 have been prepared by Dyco Petroleum
Corporation ("Dyco"), the General Partner of the Dyco Oil and
Gas Program 1981-1 Limited Partnership (the "Program"), without
audit. In the opinion of management all adjustments (which
include only normal recurring adjustments) necessary to present
fairly the financial position at March 31, 1995, and results of
operations and changes in cash flows for the three months ended
March 31, 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 Program's Annual Report on Form 10-K for the
year ended December 31, 1994. The results of operations for the
period ended March 31, 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 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.
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2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
Under the terms 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 three months
ended March 31, 1995 and 1994 such expenses totaled $22,136 and
$20,743, respectively, of which $12,513 and $12,513 were paid to
Dyco.
Affiliates of the Program are the operators of certain of the
Program's properties and their policy is to bill the Program for
all customary charges and cost reimbursements associated with
their activities, together with any compressor rentals,
consulting, or other services provided.
The Program sells 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 three
months ended March 31, 1995 and 1994 these sales totaled $52,017
and $115,778, respectively, respectively. At March 31, 1995
accrued oil and gas sales included $24,466 due from Premier.
3. CONTINGENCY
-----------
On November 12, 1992, two individuals filed a lawsuit against
Dyco and others in which the plaintiffs alleged damages to their
land as a result of remediation operations conducted on one of
the Program's wells located on an adjoining property. The
lawsuit alleged claims based on negligence, private nuisance,
public nuisance, trespass, unjust enrichment, constructive
fraud, and permanent injunctive relief, all in amounts to be
determined at trial. A trial was conducted in the matter on
February 22, 1994 in which the jury entered a verdict in favor
of the plaintiffs in the amount of approximately $5.5 million,
consisting of approximately $2.7 million in actual damages and
approximately $2.7 million in punitive damages. Dyco is
presently appealing the matter. Included in these financial
statements as of March 31, 1995 is an accrual by the General
Partner of $20,000 representing the Program's share of estimated
ultimate damages resulting from this contingency.
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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 Program's 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 Program's reserves
which would result in a positive economic impact.
The Program's 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 Program has no bank debt commitments. Cash for
operational purposes will be provided by current oil and gas
production.
RESULTS OF OPERATIONS
---------------------
THREE MONTHS ENDED MARCH 31, 1995 AS COMPARED TO THE THREE
MONTHS ENDED MARCH 31, 1994.
Three Months ended March 31,
----------------------------
1995 1994
---- ----
Oil and gas sales $68,700 $128,560
Oil and gas production expenses $26,989 $ 56,863
Barrels produced 142 170
Mcf produced 52,218 65,338
Average price/Bbl $ 15.59 $ 10.08
Average price/Mcf $ 1.27 $ 1.94
As shown in the table, oil and natural gas sales decreased
46.6% for the three months ended March 31, 1995 as compared
to the three months ended March 31, 1994. This decrease was
due to 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. Volumes of oil and natural gas sold decreased by 28
barrels and 13,120 Mcf, respectively, for the three months
ended March 31, 1995 as compared to the three months ended
March 31, 1994. The decrease in volumes of oil and natural
gas sold was primarily due to the normal decline in
production from diminished oil and natural gas reserves.
Average natural gas prices decreased to $1.27 per Mcf for
the three months ended March 31, 1995 from $1.94 per Mcf for
the three months ended March 31, 1994, while average oil
prices increased to $15.59 per barrel for the three months
ended March 31, 1995 from $10.08 per barrel for the three
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months ended March 31, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $29,874 for the
three months ended March 31, 1995 as compared to the three
months ended March 31, 1994. This decrease was primarily
the result of an accrual for certain litigation costs during
the three months ended March 31, 1994 and the decrease in
the volumes of oil and natural gas sold during the three
months ended March 31, 1995 as compared to the three months
ended March 31, 1994. As a percentage of oil and gas sales,
these expenses decreased to 39.3% for the three months ended
March 31, 1995 from 44.2% for the three months ended March
31, 1994. This percentage decrease was primarily a result
of the accrual for certain litigation costs during the three
months ended March 31, 1994 as discussed above, partially
offset by the decrease in the average price of natural gas
sold during the three months ended March 31, 1995 as
compared to the three months ended March 31, 1994.
Depreciation, depletion, and amortization of oil and gas
properties decreased $6,125 for the three months ended March
31, 1995 as compared to the three months ended March 31,
1994. This dollar decrease was consistent with the
decreases in volumes of oil and natural gas sold. As a
percentage of oil and gas sales, this expense increased to
18.4% for the three months ended March 31, 1995 from 14.6%
for the three months ended March 31, 1994. This percentage
increase was primarily the 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 three
months ended March 31, 1995 as compared to the three months
ended March 31, 1994.
General and administrative expenses increased slightly by
$1,393 for the three months ended March 31, 1995 as compared
to the three months ended March 31, 1994. As a percentage
of oil and gas sales, these expenses increased to 32.2% for
the three months ended March 31, 1995 from 16.1% for the
three months ended March 31, 1994. This percentage increase
was a result of the decreases in volumes of oil and natural
gas sold and the average price of natural gas sold,
partially offset by the increase in the average price of oil
sold during the three months ended March 31, 1995 as
compared to the three months ended March 31, 1994.
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PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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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 1981-1 LIMITED PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: August 24, 1995 By: /s/Dennis R. Neill
-------------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: August 24, 1995 By: /s/Patrick M. Hall
-------------------------
(Signature)
Patrick M. Hall
Senior Vice President -
Controller
Principal Accounting Officer
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<PAGE>
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<CIK> 0000702402
<NAME> DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 106,593
<SECURITIES> 0
<RECEIVABLES> 30,091
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0
0
<OTHER-SE> 225,853
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