<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 0-10478
DYCO OIL AND GAS PROGRAM 1981-2
(A LIMITED PARTNERSHIP)
(Exact Name of Registrant as specified in its charter)
Minnesota 41-1411952
(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 1981-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1995 1994
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $191,963 $163,279
Accrued oil and gas sales, including
$32,780 and $49,800 due from
related parties (Note 2) . . . . . . 41,903 51,195
-------- --------
Total current assets . . . . . . . $233,866 $214,474
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 165,749 173,279
DEFERRED CHARGE . . . . . . . . . . . . . 60,571 60,571
-------- --------
$460,186 $448,324
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . $ 27,670 $ 27,536
Gas imbalance payable . . . . . . . . 9,730 9,730
-------- --------
Total current liabilities . . . . . $ 37,400 $ 37,266
ACCRUED LIABILITY . . . . . . . . . . . . 120,306 120,306
CONTINGENCY (Note 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
74 units . . . . . . . . . . . . . . 3,024 2,907
Limited Partners, issued and outstanding,
6,000 units . . . . . . . . . . . . 299,456 287,845
-------- --------
Total Partners' capital . . . . . . $302,480 $290,752
-------- --------
$460,186 $448,324
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-2-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1995 1994
-------- --------
REVENUES:
Oil and gas sales, including
$62,581 and $60,430 of sales
to related parties (Note 2) . . . . $82,160 $71,207
Interest . . . . . . . . . . . . . . . 2,248 449
------- -------
$84,408 $71,656
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $33,351 $51,990
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 18,913 10,662
General and administrative (Note 2) . 20,416 19,108
------- -------
$72,680 $81,760
------- -------
NET INCOME (LOSS) . . . . . . . . . . . . $11,728 ($10,104)
======= =======
GENERAL PARTNER (1%) - net income (loss) $ 117 ($ 101)
======= =======
LIMITED PARTNERS (99%) - net income (loss) $11,611 ($10,003)
======= =======
NET INCOME (LOSS) PER UNIT . . . . . . . $ 2 ($ 2)
======= =======
UNITS OUTSTANDING . . . . . . . . . . . . 6,074 6,074
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
-3-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1981-2 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 (loss) . . . . . . . . . . $ 11,728 ($ 10,104)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . 18,913 10,662
Decrease (increase) in accrued oil and
gas sales . . . . . . . . . . . . 9,292 ( 6,678)
Increase in accounts payable . . . . 134 20,253
Decrease in payable General Partner - ( 11,000)
-------- --------
Net cash provided by operating
activities . . . . . . . . . . . $ 40,067 $ 3,133
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 11,383) ($ 13,071)
-------- --------
Net cash used by investing activities ($ 11,383) ($ 13,071)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash used by financing activities $ - $ -
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $ 28,684 ($ 9,938)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 163,279 78,042
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $191,963 $ 68,104
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-4-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1981-2 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 1981-2 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.
-5-
<PAGE>
<PAGE>
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 $20,416 and
$19,108, respectively, of which $11,988 and $11,988 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 $62,581
and $60,430, respectively. At March 31, 1995 accrued oil and
gas sales included $32,780 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. The Program's
share of such verdict is approximately $155,000 in actual
damages and approximately $31,000 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 in the amount of $20,000 representing the Program's
share of estimated ultimate damages resulting from this
contingency.
-6-
<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
operations 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 $82,160 $71,207
Oil and gas production expenses $33,351 $51,990
Barrels produced 244 329
Mcf produced 63,185 36,030
Average price/Bbl $ 15.03 $ 13.28
Average price/Mcf $ 1.24 $ 1.86
As shown in the table, oil and natural gas sales increased
15.4% for the three months ended March 31, 1995 as compared
to the three months ended March 31, 1994. This increase was
due to increases in the volumes of natural gas sold and the
average price of oil sold, partially offset by decreases in
the volumes of oil sold and average price of natural gas
sold. Volumes of oil sold decreased by 85 barrels while
volumes of natural gas sold increased by 27,155 Mcf for the
three months ended March 31, 1995 as compared to the three
months ended March 31, 1994. The increase in volumes of
natural gas sold was primarily the result of an improvement
in the production capabilities of one of the Program's wells
partially shut-in during the three months ended March 31,
1994 to increase pressure on the well. Average natural gas
prices decreased to $1.24 per Mcf for the three months ended
March 31, 1995 from $1.86 per Mcf for the three months ended
-7-
<PAGE>
<PAGE>
March 31, 1994, while average oil prices increased to $15.03
per barrel for the three months ended March 31, 1995 from
$13.28 per barrel for the three months ended March 31, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $18,639 for the
three months ended March 31, 1995 as compared to the three
months ended March 31, 1994. This decrease was primarily a
result of an accrual for certain legal contingencies for the
three months ended March 31, 1994. As a percentage of oil
and gas sales, these expenses decreased to 40.6% for the
three months ended March 31, 1995 from 73.0% for the three
months ended March 31, 1994. This percentage decrease
resulted primarily from the dollar decrease in production
expenses during the three months ended March 31, 1995 as
discussed above.
Depreciation, depletion, and amortization of oil and gas
properties increased $8,251 for the three months ended March
31, 1995 as compared to the three months ended March 31,
1994. This increase was primarily a result of the increase
in volumes of 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, this
expense increased to 23.0% for the three months ended March
31, 1995 from 15.0% for the three months ended March 31,
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 three months ended March 31, 1995 as
compared to the three months ended March 31, 1994.
General and administrative expenses increased slightly by
$1,308 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 decreased slightly to
24.8% for the three months ended March 31, 1995 from 26.8%
for the three months ended March 31, 1994.
-8-
<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
-9-
<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 1981-2 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
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000702403
<NAME> DYCO OIL AND GAS PROGRAM 1981-2 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> 191,963
<SECURITIES> 0
<RECEIVABLES> 41,903
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 233,866
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 460,186
<CURRENT-LIABILITIES> 37,400
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 302,480
<TOTAL-LIABILITY-AND-EQUITY> 460,186
<SALES> 82,160
<TOTAL-REVENUES> 84,408
<CGS> 0
<TOTAL-COSTS> 72,680
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 11,728
<INCOME-TAX> 0
<INCOME-CONTINUING> 11,728
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,728
<EPS-PRIMARY> 2.00
<EPS-DILUTED> 0
</TABLE>
