<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
September 30, 1995 0-12093
DYCO OIL AND GAS PROGRAM 1983-2
(A LIMITED PARTNERSHIP)
(Exact Name of Registrant as specified in its charter)
Minnesota 41-1454574
(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 1983-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 12,495 $108,099
Accrued oil and gas sales, including
$11,352 and $19,089 due from
related parties (Note 2) . . . . . . 20,325 33,608
-------- --------
Total current assets . . . . . . . $ 32,820 $141,707
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 117,555 168,602
DEFERRED CHARGE . . . . . . . . . . . . . 89,884 89,884
-------- --------
$240,259 $400,193
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 8,349 $ 9,027
Gas imbalance payable . . . . . . . . 7,775 7,775
-------- --------
Total current liabilities . . . . . $ 16,124 $ 16,802
ACCRUED LIABILITY . . . . . . . . . . . . 37,419 37,419
PARTNERS' CAPITAL:
General Partner, issued and outstanding
64 units . . . . . . . . . . . . . . 1,868 3,460
Limited Partners, issued and outstanding,
6,400 units . . . . . . . . . . . . 184,848 342,512
-------- --------
Total Partners' capital . . . . . . $186,716 $345,972
-------- --------
$240,259 $400,193
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1983-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- --------
REVENUES:
Oil and gas sales, including
$85,792 and $30,020 of sales
to related parties (Note 2) . . . . $88,795 $54,117
Interest . . . . . . . . . . . . . . . 1,813 618
------- -------
$90,608 $54,735
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $58,339 $25,417
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . . 17,222 13,475
General and administrative (Note 2) . 12,477 12,576
------- -------
$88,038 $51,468
------- -------
NET INCOME . . . . . . . . . . . . . . . $ 2,570 $ 3,267
======= =======
GENERAL PARTNER (1%) - net income . . . . $ 26 $ 33
======= =======
LIMITED PARTNERS (99%) - net income . . . $ 2,544 $ 3,234
======= =======
NET INCOME PER UNIT . . . . . . . . . . . $ - $ 1
======= =======
UNITS OUTSTANDING . . . . . . . . . . . . 6,464 6,464
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1983-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$138,964 and $126,765 of sales
to related parties (Note 2) . . . . $248,797 $220,784
Interest . . . . . . . . . . . . . . . 5,099 1,810
-------- --------
$253,896 $222,594
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $122,932 $ 96,542
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 48,708 46,357
General and administrative (Note 2) . 47,592 42,099
-------- --------
$219,232 $184,998
-------- --------
NET INCOME . . . . . . . . . . . . . . . $ 34,664 $ 37,596
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 347 $ 376
======== ========
LIMITED PARTNERS (99%) - net income . . . $ 34,317 $ 37,220
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 5 $ 6
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 6,464 6,464
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1983-2 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
---------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . $ 34,664 $ 37,596
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 48,708 46,357
Decrease (increase) in accrued oil and
gas sales . . . . . . . . . . . . . 13,283 ( 11,618)
(Decrease) increase in accounts payable ( 678) 1,644
-------- --------
Net cash provided by operating
activities . . . . . . . . . . . $ 95,977 $ 73,979
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . $ - ($ 440)
Retirements of oil and gas properties 2,339 -
-------- --------
Net cash provided (used) by investing
activities . . . . . . . . . . . $ 2,339 ($ 440)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . ($193,920) ($129,280)
-------- --------
Net cash used by financing
activities . . . . . . . . . . . ($193,920) ($129,280)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS ($ 95,604) ($ 55,741)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD . . . . . . . . . . . . . . . . 108,099 143,781
-------- --------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD . . . . . . . . . . . . . . . . $ 12,495 $ 88,040
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1983-2 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheet as of September 30, 1995, statements of
operations for the three and nine months ended September 30, 1995
and 1994, and statements of cash flows for the nine months ended
September 30, 1995 and 1994 have been prepared by Dyco Petroleum
Corporation ("Dyco"), the General Partner of the Dyco Oil and Gas
Program 1983-2 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 September 30, 1995, results of operations
for the three and nine months ended September 30, 1995 and 1994
and changes in cash flows for the nine months ended September 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 September 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 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 September 30, 1995 and 1994 such expenses totaled $12,477
and $12,576, respectively, of which $10,791 and $10,791 were paid
to Dyco. During the nine months ended September 30, 1995 and
1994 such expenses totaled $47,592 and $42,099, respectively, of
which $32,373 and $32,373 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 September 30, 1995 and 1994 these sales totaled
$85,792 and $30,020, respectively. During the nine months ended
September 30, 1995 and 1994 these sales totaled $138,964 and
$126,765, respectively. At September 30, 1995 accrued oil and
gas sales included $11,352 due from Premier.
-7-
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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. Over the last several years, the
domestic energy industry and the Program have contended with
volatile, but generally low, oil and gas prices. Over the past
few years, the oil and gas market appears to have moved from
periods of relative stability in supply and demand to excess
supply or weakened demand. These trends have led to the
volatility in pricing and demand noted over the past years.
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 SEPTEMBER 30, 1995 AS COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1994.
Three months ended September 30,
--------------------------------
1995 1994
---- ----
Oil and gas sales $88,795 $54,117
Oil and gas production
expenses $58,339 $25,417
Barrels produced 239 291
Mcf produced 60,878 34,403
Average price/Bbl $ 12.57 $ 14.16
Average price/Mcf $ 1.41 $ 1.45
As shown in the table, oil and natural gas sales increased 64.1%
for the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994. This increase resulted
primarily from an increase in the volumes of natural gas sold
during the three months ended September 30, 1995 as compared to
the three months ended September 30, 1994. Volumes of natural
gas sold increased 26,475 Mcf, while volumes of oil sold
decreased 52 barrels for the three months ended September 30,
1995 as compared to the three months ended September 30, 1994.
The increase in the volumes of natural gas sold was primarily the
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result of significant positive prior period volume adjustments
from a purchaser on two of the Program' wells during the three
months ended September 30, 1995. Average natural gas prices
decreased to $1.41 per Mcf for the three months ended September
30, 1995 from $1.45 per Mcf for the three months ended September
30, 1994, while average oil prices decreased to $12.57 per barrel
for the three months ended September 30, 1995 from $14.16 per
barrel for the three months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $32,922 for the three
months ended September 30, 1995 as compared to the three months
ended September 30, 1994. This increase was primarily due to
significant workover charges on one of the Program's wells to
improve the recovery of reserves along with the increase in
volumes of natural gas sold during the three months ended
September 30, 1995 as compared to the three months ended
September 30, 1994. As a percentage of oil and gas sales, these
expenses increased to 65.7% for the three months ended September
30, 1995 from 47.0% for the three months ended September 30,
1994. This percentage increase resulted primarily from the
increase in lease operating expenses related to workover charges
as discussed above.
Depreciation, depletion, and amortization of oil and gas
properties increased $3,747 for the three months ended September
30, 1995 as compared to the three months ended September 30,
1994. This increase was primarily due to the increase in the
volumes of natural gas sold during the three months ended
September 30, 1995 as compared to the three months ended
September 30, 1994, partially offset by a significant increase in
the estimate of the Program's remaining natural gas reserves. As
a percentage of oil and gas sales, this expense decreased to
19.4% for the three months ended September 30, 1995 compared to
24.9% for the three months ended September 30, 1994. This
percentage decrease was primarily due to the increase in the
estimate of the Program's remaining natural gas reserves as
discussed above.
General and administrative expenses remained relatively constant
for the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994. As a percentage of oil and
gas sales, these expenses decreased to 14.1% for the three months
ended September 30, 1995 from 23.2% for the three months ended
September 30, 1994. This percentage decrease was primarily due
to the increase in the volumes of natural gas sold during the
three months ended September 30, 1995 as compared to the three
months ended September 30, 1994.
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<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1995 AS COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1994.
Nine months ended September 30,
-------------------------------
1995 1994
---- ----
Oil and gas sales $248,797 $220,784
Oil and gas production
expenses $122,932 $ 96,542
Barrels produced 704 1,056
Mcf produced 176,817 120,331
Average price/Bbl $ 14.18 $ 11.27
Average price/Mcf $ 1.35 $ 1.74
As shown in the table, oil and natural gas sales increased 12.7%
for the nine months ended September 30, 1995 as compared to the
nine months ended September 30, 1994. This increase resulted
from an increase in the average price of oil sold and an increase
in the volumes of natural gas sold, partially offset by a
decrease in the volumes of oil sold and a decrease in the average
price of natural gas sold during the nine months ended September
30, 1995 as compared to the nine months ended September 30, 1994.
Volumes of natural gas sold increased 56,486 Mcf, while volumes
of oil sold decreased 352 barrels for the nine months ended
September 30, 1995 as compared to the nine months ended September
30, 1994. The increase in the volumes of natural gas sold was
primarily the result of significant positive prior period volume
adjustments from a purchaser on two of the Program's wells during
the nine months ended September 30, 1995. The decrease in the
volumes of oil sold was primarily the result of a positive prior
period volume adjustment from a purchaser on another of the
Program's wells during the nine months ended September 30, 1994.
Average natural gas prices decreased to $1.35 per Mcf for the
nine months ended September 30, 1995 from $1.74 per Mcf for the
nine months ended September 30, 1994, while average oil prices
increased to $14.18 per barrel for the nine months ended
September 30, 1995 from $11.27 per barrel for the nine months
ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $26,390 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This increase was primarily the result
of significant workover charges on one of the Program's wells
during the nine months ended September 30, 1995 with no similar
charges during the nine months ended September 30, 1994. As a
percentage of oil and gas sales, these expenses increased to
49.4% for the nine months ended September 30, 1995 from 43.7% for
the nine months ended September 30, 1994. This percentage
increase resulted primarily from the increase in lease operating
expenses as discussed above and the decrease in the average price
of natural gas sold for the nine months ended September 30, 1995
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as compared to the nine months ended September 30, 1994.
Depreciation, depletion, and amortization of oil and gas
properties increased $2,351 for the nine months ended September
30, 1995 as compared to the nine months ended September 30, 1994.
This increase was primarily due to an increase in the volumes of
natural gas sold during the nine months ended September 30, 1995
as compared to the nine months ended September 30, 1994,
partially offset by an increase in the estimate of the Program's
remaining natural gas reserves. As a percentage of oil and gas
sales, this expense decreased slightly to 19.6% for the nine
months ended September 30, 1995 from 21.0% for the nine months
ended September 30, 1994. This percentage decrease resulted
primarily from the increase in the estimate of the Program's
remaining natural reserves as discussed above.
General and administrative expenses increased $5,493 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This dollar increase resulted
primarily from an increase in the Program's professional fees
during the nine months ended September 30, 1995 as compared to
the nine months ended September 30, 1994. As a percentage of oil
and gas sales, these expenses remained constant at 19.1% for the
nine months ended September 30, 1995 and the nine months ended
September 30, 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 1983-2 LIMITED PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: November 13, 1995 By: /s/Dennis R. Neill
--------------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: November 13, 1995 By: /s/Patrick M. Hall
--------------------------
(Signature)
Patrick M. Hall
Senior Vice President - Controller
Principal Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000715369
<NAME> DYCO OIL AND GAS PROGRAM 1983-2 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 12,495
<SECURITIES> 0
<RECEIVABLES> 20,325
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 32,820
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 240,259
<CURRENT-LIABILITIES> 16,124
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 186,716
<TOTAL-LIABILITY-AND-EQUITY> 240,259
<SALES> 248,797
<TOTAL-REVENUES> 253,896
<CGS> 0
<TOTAL-COSTS> 219,232
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 34,664
<INCOME-TAX> 0
<INCOME-CONTINUING> 34,664
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,664
<EPS-PRIMARY> 5.00
<EPS-DILUTED> 0
</TABLE>
