<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
March 31, 1996 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
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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 1983-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1996 1995
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 6,350 $ 314
Accrued oil and gas sales, including
$14,318 due from related parties
in 1995 (Note 2) . . . . . . . . . . 35,956 27,839
-------- --------
Total current assets . . . . . . . $ 42,306 $ 28,153
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 149,885 136,757
DEFERRED CHARGE . . . . . . . . . . . . . 91,611 91,611
-------- --------
$283,802 $256,521
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 38,758 $ 21,322
-------- --------
Total current liabilities . . . . . $ 38,758 $ 21,322
ACCRUED LIABILITY . . . . . . . . . . . . 79,661 79,661
PARTNERS' CAPITAL:
General Partner, issued and outstanding
64 units . . . . . . . . . . . . . . 1,653 1,555
Limited Partners, issued and outstanding,
6,400 units . . . . . . . . . . . . 163,730 153,983
-------- --------
Total Partners' capital . . . . . . $165,383 $155,538
-------- --------
$283,802 $256,521
======== ========
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 MARCH 31, 1996 AND 1995
(Unaudited)
1996 1995
--------- --------
REVENUES:
Oil and gas sales, including
$19,636 of sales to related
parties in 1995 (Note 2) . . . . . . $65,896 $40,142
Interest . . . . . . . . . . . . . . . - 1,292
------- -------
$65,896 $41,434
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $30,299 $31,214
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 7,063 7,796
General and administrative (Note 2) . 18,689 18,457
------- -------
$56,051 $57,467
------- -------
NET INCOME (LOSS) . . . . . . . . . . . . $ 9,845 ($16,033)
======= =======
GENERAL PARTNER (1%) - net income (loss) $ 98 ($ 160)
======= =======
LIMITED PARTNERS (99%)-net income (loss) $ 9,747 ($15,873)
======= =======
NET INCOME (LOSS) PER UNIT . . . . . . . $ 2 ($ 2)
======= =======
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 THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
1996 1995
---------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) . . . . . . . . . . $ 9,845 ($ 16,033)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 7,063 7,796
(Increase) decrease in accrued oil and
gas sales . . . . . . . . . . . . . ( 8,117) 5,653
Increase (decrease) in accounts
payable . . . . . . . . . . . . . . 17,436 ( 154)
------- --------
Net cash provided (used) by operating
activities . . . . . . . . . . . $26,227 ($ 2,738)
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($20,191) $ -
------- --------
Net cash used by investing
activities . . . . . . . . . . . . ($20,191) $ -
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . $ - $ -
------- --------
Net cash provided by financing
activities . . . . . . . . . . . . $ - $ -
------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . $ 6,036 ($ 2,738)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD . . . . . . . . . . . . . . . . 314 108,099
------- --------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD . . . . . . . . . . . . . . . . . $ 6,350 $105,361
======= ========
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
MARCH 31, 1996
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheet as of March 31, 1996, statements of operations
for the three months ended March 31, 1996 and 1995, and
statements of cash flows for the three months ended March 31,
1996 and 1995 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 March 31, 1996, results of operations for the three
months ended March 31, 1996 and 1995 and changes in cash flows
for the three months ended March 31, 1996 and 1995 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, 1995. The results of operations for the
period ended March 31, 1996 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, 1996 and 1995 such expenses totaled $18,689 and
$18,457, respectively, of which $10,791 and $10,791 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 sold gas at market prices to Premier Gas Company
("Premier") and Premier then resold such gas to third parties at
market prices. Premier was an affiliate of the Program until
December 6, 1995. During the three months ended March 31, 1995
these sales totaled $19,636. At December 31, 1995, accrued oil
and gas sales included $14,318 due from Premier.
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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 MARCH 31, 1996 AS COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1995.
Three months ended March 31,
--------------------------------
1996 1995
---- ----
Oil and gas sales $65,896 $40,142
Oil and gas production
expenses $30,299 $31,214
Barrels produced 138 255
Mcf produced 36,222 29,008
Average price/Bbl $ 15.64 $ 12.78
Average price/Mcf $ 1.76 $ 1.27
As shown in the table, oil and natural gas sales increased 64.2%
for the three months ended March 31, 1996 as compared to the
three months ended March 31, 1995. This increase was primarily
due to an increase in both the volumes and the average price of
natural gas sold and the increase in the average price of oil
sold, partially offset by the decrease in the volumes of oil sold
during the three months ended March 31, 1996 as compared to the
three months ended March 31, 1995. Volumes of oil sold decreased
by 117 barrels and volumes of natural gas sold increased 7,214
Mcf for the three months ended March 31, 1996 as compared to the
three months ended March 31, 1995. Volumes of oil sold decreased
as a result of prior period volume adjustments from the purchaser
on one significant well during the three months ended March 31,
1995. Volumes of natural gas sold increased primarily due to the
removal of wellbore obstructions on one significant well which
inhibited production during the three months ended March 31,
1995. Average oil and natural gas prices increased to $15.64 per
barrel and $1.76 per Mcf for the three months ended March 31,
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<PAGE>
1996 from $12.78 per barrel and $1.27 per Mcf for the three
months ended March 31, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) remained relatively constant
during the three months ended March 31, 1996 as compared to the
three months ended March 31, 1995. As a percentage of oil and
gas sales, these expenses decreased to 46.0% for the three months
ended March 31, 1996 from 77.8% for the three months ended
March 31, 1995. This percentage decrease was primarily a result
of the increase in the average prices of oil and natural gas sold
during the three months ended March 31, 1996 as compared to the
three months ended March 31, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased by $733 for the three months ended March 31,
1996 as compared to the three months ended March 31, 1995. This
decrease was primarily the result of an upward revision in the
estimate of the Program's remaining natural gas reserves at
December 31, 1995, partially offset by the increase in the
volumes of natural gas sold during the three months ended March
31, 1996 as compared to the three months ended March 31, 1995.
As a percentage of oil and gas sales, this expense decreased to
10.7% for the three months ended March 31, 1996 from 19.4% for
the three months ended March 31, 1995. This percentage decrease
was primarily due to the increase in the average prices of oil
and natural gas sold during the three months ended March 31, 1996
as compared to the three months ended March 31, 1995.
General and administrative expenses remained relatively constant
during the three months ended March 31, 1996 as compared to the
three months ended March 31, 1995. As a percentage of oil and
gas sales, these expenses decreased to 28.4% for the three months
ended March 31, 1996 from 46.0% for the three months ended March
31, 1995. This percentage decrease was primarily the result of
the increase in the average prices of oil and natural gas sold
during the three months ended March 31, 1996 as compared to the
three months ended March 31, 1995.
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PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.1 Financial Data Schedule containing summary
financial information extracted from the Program's
financial statements as of March 31, 1996 and for
the three months ended March 31, 1996, filed
herewith.
(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: May 9, 1996 By: /s/Dennis R. Neill
-------------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: May 9, 1996 By: /s/Patrick M. Hall
-------------------------
(Signature)
Patrick M. Hall
Senior Vice President -
Controller
Principal Accounting Officer
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INDEX TO EXHIBITS
-----------------
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial
information extracted from the Dyco Oil and Gas Program
1983-2 Limited Partnership's financial statements as of
March 31, 1996 and for the three months ended March 31,
1996, filed herewith.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000715369
<NAME> DYCO OIL AND GAS PROGRAM 1983-2 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 6,350
<SECURITIES> 0
<RECEIVABLES> 35,956
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 42,306
<PP&E> 31,320,094
<DEPRECIATION> 31,170,209
<TOTAL-ASSETS> 283,802
<CURRENT-LIABILITIES> 38,758
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 165,383
<TOTAL-LIABILITY-AND-EQUITY> 283,802
<SALES> 65,896
<TOTAL-REVENUES> 65,896
<CGS> 0
<TOTAL-COSTS> 56,051
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,845
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,845
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,845
<EPS-PRIMARY> 2.00
<EPS-DILUTED> 0
</TABLE>
