<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 0-12052
DYCO OIL AND GAS PROGRAM 1983-1
(A LIMITED PARTNERSHIP)
(Exact Name of Registrant as specified in its charter)
Minnesota 41-1451945
(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 1983-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1995 1994
----------- -------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 273,274 $ 59,992
Accrued oil and gas sales, including
$116,146 and $138,468 due from
related parties (Note 2) . . . . . . 135,518 158,161
---------- ----------
Total current assets . . . . . . . $ 408,792 $ 218,153
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 776,779 885,812
DEFERRED CHARGE . . . . . . . . . . . . . 51,707 51,707
---------- ----------
$1,237,278 $1,155,672
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 13,277 $ 39,425
Gas imbalance payable . . . . . . . . 9,893 9,893
---------- ----------
Total current liabilities . . . . . $ 23,170 $ 49,318
ACCRUED LIABILITY . . . . . . . . . . . . 127,160 127,160
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
76 units . . . . . . . . . . . . . . 10,870 9,792
Limited Partners, issued and outstanding,
7,600 units . . . . . . . . . . . . 1,076,078 969,402
---------- ----------
Total Partners' capital . . . . . . $1,086,948 $ 979,194
---------- ----------
$1,237,278 $1,155,672
========== ==========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1983-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
---------- ----------
REVENUES:
Oil and gas sales, including
$184,706 and $262,072 of sales
to related parties (Note 2) . . . . $188,788 $283,523
Interest . . . . . . . . . . . . . . . 2,539 1,477
-------- --------
$191,327 $285,000
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 35,082 $ 47,998
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . 51,519 82,053
General and administrative (Note 2) . 24,763 20,023
-------- --------
$111,364 $150,074
-------- --------
NET INCOME . . . . . . . . . . . . . . . $ 79,963 $134,926
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 800 $ 1,349
======== ========
LIMITED PARTNERS (99%) - net income . . . $ 79,163 $133,577
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 10 $ 18
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 7,676 7,676
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
DYCO OIL AND GAS PROGRAM 1983-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
---------- ----------
REVENUES:
Oil and gas sales, including
$342,329 and $581,606 of sales
to related parties (Note 2) . . . . $401,234 $607,246
Interest . . . . . . . . . . . . . . . 3,706 3,083
-------- --------
$404,940 $610,329
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $135,595 $103,131
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 109,033 154,249
General and administrative (Note 2) . 52,558 45,701
-------- --------
$297,186 $303,081
-------- --------
NET INCOME . . . . . . . . . . . . . . . $107,754 $307,248
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 1,078 $ 3,072
======== ========
LIMITED PARTNERS (99%) - net income . . . $106,676 $304,176
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 14 $ 40
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 7,676 7,676
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1983-1 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 . . . . . . . . . . . . . . $107,754 $307,248
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . 109,033 154,249
Decrease in accrued oil and gas sales 22,643 120,187
Decrease in accounts payable . . . . ( 26,148) ( 42,195)
-------- --------
Net cash provided by operating
activities $213,282 $539,489
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . $ - ($ 6,069)
-------- --------
Net cash used by investing activities $ - ($ 6,069)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . $ - ($575,700)
-------- --------
Net cash used by financing activities $ - ($575,700)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . $213,282 ($ 42,280)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 59,992 187,098
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $273,274 $144,818
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
DYCO OIL AND GAS PROGRAM 1983-1 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 1983-1 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
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 six
months ended June 30, 1995 and 1994 such expenses totaled
$52,558 and $45,701, respectively, of which $35,640 and
$35,640 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
$342,329 and $581,606, respectively. At June 30, 1995 accrued
oil and gas sales included $116,146 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.
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 $188,788 $283,523
Oil and gas production expenses $ 35,082 $ 47,998
Barrels produced 62 429
Mcf produced 139,060 172,718
Average price/Bbl $ 16.52 $ 15.97
Average price/Mcf $ 1.35 $ 1.60
As shown in the table, oil and natural gas sales decreased
by 33.4% for the three months ended June 30, 1995 as
compared to the three months ended June 30, 1994. This
decrease was due primarily to a decrease in the average
price of natural gas sold and decreases in the volumes of
oil and natural gas 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 367
barrels and 33,658 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 a result of a significant gas balancing
adjustment on one of the Program's wells during the three
months ended June 30, 1994. The decrease in volumes of oil
sold was primarily a result of positive prior period volume
adjustments from a purchaser on one of the Program's wells
during the three months ended June 30, 1994. Average
natural gas prices decreased to $1.35 per Mcf for the three
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months ended June 30, 1995 from $1.60 per Mcf for the three
months ended June 30, 1994, while average oil prices
increased to $16.52 per barrel for the three months ended
June 30, 1995 from $15.97 per barrel for the similar period
in 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $12,916 for the
three months ended June 30, 1995 as compared to the three
months ended June 30, 1994. This decrease resulted
primarily from the decrease in the volumes of oil and
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, these expenses increased to
18.6% for the three months ended June 30, 1995 from 17.0%
for the three 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 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 $30,534 for the three months ended June
30, 1995 as compared to the three months ended June 30,
1994. This decrease was primarily due to the decrease in
the volumes of oil and natural gas sold during the three
months ended June 30, 1995 as compared to the three months
ended June 30, 1994 and a significant increase in the
estimate of the Program's remaining natural gas reserves.
As a percentage of oil and gas sales, this expense remained
relatively constant at 27.3% for the three months ended June
30, 1995 compared to 28.9% for the three months ended June
30, 1994.
General and administrative expenses increased $4,740 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 13.1% for the three months ended
June 30, 1995 as compared to 7.1% for the three months ended
June 30, 1994. This percentage increase was primarily due
to the decreases in the volumes of oil and natural gas sold
and a decrease in the average price of natural gas sold
during the three months ended June 30, 1995 as compared to
the similar period in 1994.
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<PAGE>
SIX MONTHS ENDED JUNE 30, 1995 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1994.
Six months ended June 30,
-------------------------
1995 1994
---- ----
Oil and gas sales $401,234 $607,246
Oil and gas production expenses $135,595 $103,131
Barrels produced 289 738
Mcf produced 308,258 342,579
Average price/Bbl $ 17.74 $ 14.96
Average price/Mcf $ 1.28 $ 1.74
As shown in the table, oil and natural gas sales decreased
by 33.9% for the six months ended June 30, 1995 as compared
to the six months ended June 30, 1994. This decrease was
due primarily to a decrease in the average price of natural
gas sold and decreases in the volumes of oil and natural gas
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 by 449 barrels and 34,321 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 oil sold was primarily a result of
positive prior period volume adjustments from a purchaser on
one well during the six months ended June 30, 1994. The
decrease in the volumes of natural gas sold was primarily a
result of a significant gas balancing adjustment on one of
the Program's wells during the six months ended June 30,
1994. Average natural gas prices decreased to $1.28 per Mcf
for the six months ended June 30, 1995 from $1.74 per Mcf
for the six months ended June 30, 1994, while average oil
prices increased to $17.74 per barrel for the six months
ended June 30, 1995 from $14.96 per barrel for the six
months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $32,464 for the six
months ended June 30, 1995 as compared to the six months
ended June 30, 1994. This dollar increase was primarily due
to workover charges incurred on two wells during the six
months ended June 30, 1995 to improve the recovery of
reserves. As a percentage of oil and gas sales, these
expenses increased to 33.8% for the six months ended June
30, 1995 from 17.0% for the six months ended June 30, 1994.
This percentage increase resulted primarily from the
increase in production expenses related to workover charges
as discussed above and a 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 $45,216 for the six months ended June
30, 1995 as compared to the six months ended June 30, 1994.
This decrease was primarily due to the decreases in the
volumes of oil and natural gas sold during the six months
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ended June 30, 1995 as compared to the six months ended June
30, 1994 and a significant increase in the estimate of the
Program's remaining natural gas reserves. As a percentage
of oil and gas sales, this expense increased to 27.2% for
the six months ended June 30, 1995 from 25.4% for the six
months ended June 30, 1994. This percentage increase was
primarily due to the decrease in the average price of
natural gas sold during the six months ended June 30, 1995
as compared to the similar period in 1994.
General and administrative expenses increased $6,857 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 13.1% for the six months ended
June 30, 1995 as compared to 7.5% for the six months ended
June 30, 1994. This percentage increase was primarily due
to the decrease in the average price of natural gas sold and
decreases in the volumes of oil and natural gas sold during
the six months ended June 30, 1995 as compared to the six
months ended June 30, 1994.
-11-
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PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On November 4, 1993, Brumark Corporation and certain related
parties filed a lawsuit against Dyco and its affiliates in
which the plaintiffs alleged that the Davis #1-7 well is
draining the reserves of the field in which it is located
and that Dyco and its affiliates have conducted manipulative
wellbore flow tests to create the illusion of higher
capacity in the field. (Brumark corporation, et al. v.
Samson Resources Company, et al., CIV-93-1962-C, United
States District Court for the Western District of Oklahoma).
The Program has an approximate 23.5% working interest in the
Davis #1-7 well. The lawsuit asserts causes of action of
conversion and fraud and claims entitlement to approximately
$4.6 million attributable to gas sold from 1984 to 1992. On
February 25, 1994, the district court granted Dyco's motion
to dismiss the plaintiffs' complaint. Plaintiffs appealed
the matter to the U.S. Tenth Circuit Court of Appeals, and
on June 13, 1995 the Tenth Circuit Court of Appeals entered
an order affirming the district court's dismissal of the
plaintiff's complaint.
Except for the foregoing, to the knowledge of the management
of Dyco and the Program, neither Dyco, the Program, nor the
Program's properties are subject to any litigation, the
results of which would have a material effect on the
Program's or Dyco's financial condition or operations.
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 1983-1 LIMITED PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: August 10, 1995 By: /s/Dennis R. Neill
-------------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: August 10, 1995 By: /s/Patrick M. Hall
-------------------------
(Signature)
Patrick M. Hall
Senior Vice President -
Controller
Principal Accounting Officer
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000719958
<NAME> DYCO OIL AND GAS PROGRAM 1983-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-01-1995
<CASH> 273,274
<SECURITIES> 0
<RECEIVABLES> 135,518
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 408,792
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,237,278
<CURRENT-LIABILITIES> 23,170
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,086,948
<TOTAL-LIABILITY-AND-EQUITY> 1,237,278
<SALES> 401,234
<TOTAL-REVENUES> 404,940
<CGS> 0
<TOTAL-COSTS> 297,186
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 107,754
<INCOME-TAX> 0
<INCOME-CONTINUING> 107,754
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 107,754
<EPS-PRIMARY> 14.00
<EPS-DILUTED> 0
</TABLE>
