<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 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
------------------------------------------------------------
(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
---- ----
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1995 1994
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $107,356 $ 91,259
Accrued oil and gas sales, including
$27,100 and $29,152 due from
related parties (Note 2) . . . . . . 30,889 35,597
-------- --------
Total current assets . . . . . . . $138,245 $126,856
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 143,672 153,111
DEFERRED CHARGE . . . . . . . . . . . . . 43,842 43,842
-------- --------
$325,759 $323,809
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 26,674 $ 25,883
Gas imbalance payable . . . . . . . . 15,434 15,434
-------- --------
Total current liabilities . . . . . $ 42,108 $ 41,317
ACCRUED LIABILITY . . . . . . . . . . . . 64,783 64,783
CONTINGENCY (Note 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
70 units . . . . . . . . . . . . . . 2,188 2,176
Limited Partners, issued and outstanding,
7,000 units . . . . . . . . . . . . 216,680 215,533
-------- --------
Total Partners' capital . . . . . . $218,868 $217,709
-------- --------
$325,759 $323,809
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-2-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$38,644 and $62,237 of sales
to related parties (Note 2) . . . . $44,064 $86,892
Interest . . . . . . . . . . . . . . . 1,360 1,203
------- -------
$45,424 $88,095
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $24,387 $16,976
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 8,202 18,516
General and administrative (Note 2) . 19,820 13,855
------- -------
$52,409 $49,347
------- -------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 6,985) $38,748
======= =======
GENERAL PARTNER (1%) - net (loss) income ($ 69) $ 388
======= =======
LIMITED PARTNERS (99%) - net (loss) income ($ 6,916) $38,360
======= =======
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 1) $ 6
======= =======
UNITS OUTSTANDING . . . . . . . . . . . . 7,070 7,070
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
-3-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ----------
REVENUES:
Oil and gas sales, including
$90,661 and $183,015 of sales
to related parties (Note 2) . . . . $112,764 $215,452
Interest . . . . . . . . . . . . . . . 2,583 1,860
-------- --------
$115,347 $217,312
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 51,376 $ 73,839
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 20,856 37,295
General and administrative (Note 2) . 41,956 34,598
-------- --------
$114,188 $145,732
-------- --------
NET INCOME . . . . . . . . . . . . . . . $ 1,159 $ 71,580
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 12 $ 716
======== ========
LIMITED PARTNERS (99%) - net income . . . $ 1,147 $ 70,864
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ - $ 10
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 7,070 7,070
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-4-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1981-1 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 income . . . . . . . . . . . . . . $ 1,159 $ 71,580
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 20,856 37,295
Decrease in accrued oil and gas sales 4,708 9,193
Increase in accounts payable . . . . 791 21,987
-------- --------
Net cash provided by operating
activities . . . . . . . . . . . . $ 27,514 $140,055
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 11,417) $ -
-------- --------
Net cash used by investing
activities . . . . . . . . . . . . ($ 11,417) $ -
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . $ - ($176,750)
-------- --------
Net cash used by financing activities $ - ($176,750)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . $ 16,097 ($ 36,695)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD . . . . . . . . . . . . . . . . . 91,259 83,688
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $107,356 $ 46,993
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-5-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1981-1 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
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 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 Program's 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 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
-6-
<PAGE>
development costs.
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 six months ended
June 30, 1995 and 1994 such expenses totaled $41,956 and $34,598
respectively, of which $25,026 and $25,026 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 six
months ended June 30, 1995 and 1994 these sales totaled $90,661
and $183,015, respectively. At June 30, 1995 accrued oil and
gas sales included $27,100 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 June 30, 1995 is an accrual by the General
Partner of $20,000 representing the Program's share of estimated
ultimate damages resulting from this contingency.
-7-
<PAGE>
<PAGE>
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 JUNE 30, 1995 AS COMPARED TO THE THREE
MONTHS ENDED JUNE 30, 1994.
Three months ended June 30,
---------------------------
1995 1994
---- ----
Oil and gas sales $44,064 $86,892
Oil and gas production expenses $24,387 $16,976
Barrels produced 114 597
Mcf produced 31,291 49,082
Average price/Bbl $ 17.96 $ 13.94
Average price/Mcf $ 1.34 $ 1.60
As shown in the table, oil and natural gas sales decreased
49.3% for the three months ended June 30, 1995 as compared
to the three months ended June 30, 1994. This decrease
resulted from the decreases in 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 483 barrels and 17,791
Mcf, respectively, for the three months ended June 30, 1995
as compared to the three months ended June 30, 1994. The
decrease in volumes of natural gas sold was primarily due to
the normal decline in production from diminished oil and
natural gas reserves. Natural gas prices decreased to an
average of $1.34 per Mcf for the three months ended June 30,
1995 from an average of $1.60 per Mcf for the three months
ended June 30, 1994, while oil prices increased to an
-8-
<PAGE>
<PAGE>
average of $17.96 per barrel for the three months ended June
30, 1995 from an average of $13.94 per barrel for the three
months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $7,411 for the
three months ended June 30, 1995 as compared to the three
months ended June 30, 1994. The increase was primarily due
to a lease operating expense credit received from the
operator on one well as a result of a clerical error during
the three months ended June 30, 1994. As a percentage of
oil and gas sales, these expenses increased to 55.3% for the
three months ended June 30, 1995 from 19.5% for the three
months ended June 30, 1994. This percentage increase was
primarily a result of the dollar increase in oil and gas
production expenses as discussed above and 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.
Depreciation, depletion, and amortization of oil and gas
properties decreased $10,314 for the three months ended June
30, 1995 as compared to the three months ended June 30,
1994. This dollar decrease was primarily a result of an
upward revision in the estimate of the Program's remaining
oil and natural gas reserves and the decrease in 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, this expense decreased to
18.6% for the three months ended June 30, 1995 from 21.3%
for the three months ended June 30, 1994. The percentage
decrease was primarily a result of the dollar decrease in
depreciation, depletion, and amortization expense related to
the upward revision in the estimate of the Program's
remaining reserves as discussed above.
General and administrative expenses increased by $5,965 for
the three months ended June 30, 1995 as compared to the
three months ended June 30, 1994. This increase resulted
from an increase in the 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 45.0% for the
three months ended June 30, 1995 from 15.9% for the three
months ended June 30, 1994. This percentage increase was
primarily a result of the dollar increase in general and
administrative expenses as discussed above and the decrease
in the volumes and average price of natural gas sold during
the three months ended June 30, 1995 as compared to the
three months ended June 30, 1994.
SIX MONTHS ENDED JUNE 30, 1995 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1994.
-9-
<PAGE>
Six months ended June 30,
-------------------------
1995 1994
---- ----
Oil and gas sales $112,764 $215,452
Oil and gas production expenses $ 51,376 $ 73,839
Barrels produced 256 767
Mcf produced 83,509 114,420
Average price/Bbl $ 16.64 $ 13.08
Average price/Mcf $ 1.30 $ 1.80
As shown in the table, oil and natural gas sales decreased
47.7% for the six months ended June 30, 1995 as compared to
the six months ended June 30, 1994. This decrease resulted
from the decreases in 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 511 barrels and 30,911 Mcf,
respectively, for the six months ended June 30, 1995 as
compared to the six months ended June 30, 1994. The
decrease in volumes of natural gas sold was primarily due to
the normal decline in production from diminished oil and
natural gas reserves. Natural gas prices decreased to an
average of $1.30 per Mcf for the six months ended June 30,
1995 from an average of $1.80 per Mcf for the six months
ended June 30, 1994, while oil prices increased to an
average of $16.64 per barrel for the six months ended June
30, 1995 from an average of $13.08 per barrel for the six
months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $22,463 for the six
months ended June 30, 1995 as compared to the six months
ended June 30, 1994. This decrease resulted primarily from
an accrual for certain legal contingencies during the six
months ended June 30, 1994. As a percentage of oil and gas
sales, these expenses increased to 45.6% for the six months
ended June 30, 1995 from 34.3% 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.
Depreciation, depletion, and amortization of oil and gas
properties decreased $16,439 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 an upward revision
in the estimate of the Program's remaining oil and natural
gas reserves and the decrease in volumes of 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 remained relatively constant at
18.5% for the six months ended June 30, 1995 compared to
17.3% for the six months ended June 30, 1994.
-10-
<PAGE>
<PAGE>
General and administrative expenses increased by $7,358 for
the six months ended June 30, 1995 as compared to the six
months ended June 30, 1994. This increase resulted from an
increase in the 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 37.2% for the six months ended
June 30, 1995 from 16.1% for the six months ended June 30,
1994. This percentage increase was primarily a result of
the dollar increase in general and administrative expenses
as discussed above and the decrease in the volumes and
average price of natural gas sold during the six months
ended June 30, 1995 as compared to the six months ended June
30, 1994.
-11-
<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
-12-
<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 1981-1 LIMITED PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: August 14, 1995 By: /s/Dennis R. Neill
-------------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: August 14, 1995 By: /s/Patrick M. Hall
-------------------------
(Signature)
Patrick M. Hall
Senior Vice President -
Controller
Principal Accounting
Officer
-13-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000702402
<NAME> DYCO OIL AND GAS PROGRAM 1981-1 A 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> 107,356
<SECURITIES> 0
<RECEIVABLES> 30,889
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 138,245
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 325,759
<CURRENT-LIABILITIES> 42,108
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 218,868
<TOTAL-LIABILITY-AND-EQUITY> 325,759
<SALES> 112,764
<TOTAL-REVENUES> 115,347
<CGS> 0
<TOTAL-COSTS> 114,188
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,159
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,159
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,159
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0
</TABLE>
