<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 0-13430
DYCO OIL AND GAS PROGRAM 1984-1
(A LIMITED PARTNERSHIP)
(Exact Name of Registrant as specified in its charter)
Minnesota 41-1465070
(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 1984-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1995 1994
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $175,217 $133,975
Accrued oil and gas sales, including
$52,892 and $60,779 due from
related parties (Note 2) . . . . . . 64,989 72,789
-------- --------
Total current assets . . . . . . . $240,206 $206,764
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 489,926 538,364
DEFERRED CHARGE . . . . . . . . . . . . . 67,531 67,531
-------- --------
$797,663 $812,659
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 28,285 $ 24,683
Gas imbalance payable . . . . . . . . 3,751 3,751
-------- --------
Total current liabilities . . . . . $ 32,036 $ 28,434
ACCRUED LIABILITY . . . . . . . . . . . . 20,471 20,471
CONTINGENCIES (NOTE 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding
55 units . . . . . . . . . . . . . . 7,451 7,637
Limited Partners, issued and outstanding,
5,500 units . . . . . . . . . . . . 737,705 756,117
-------- --------
Total Partners' capital . . . . . . $745,156 $763,754
-------- --------
$797,663 $812,659
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
DYCO OIL AND GAS PROGRAM 1984-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
-------- --------
REVENUES:
Oil and gas sales, including
$83,109 and $80,457 of sales
to related parties (Note 2) . . . . $93,756 $91,633
Interest . . . . . . . . . . . . . . . 2,000 1,666
------- -------
$95,756 $93,299
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $34,097 $20,538
Depreciation, depletion, and amortization
of oil and gas properties. . . . . . . 37,761 33,875
General and administrative (Note 2). . 20,746 17,123
------- -------
$92,604 $71,536
------- -------
NET INCOME . . . . . . . . . . . . . . . $ 3,152 $21,763
======= =======
GENERAL PARTNER (1%) - net income . . . . $ 32 $ 218
======= =======
LIMITED PARTNERS (99%) - net income . . . $ 3,120 $21,545
======= =======
NET INCOME PER UNIT . . . . . . . . . . . $ 1 $ 4
======= =======
UNITS OUTSTANDING . . . . . . . . . . . . 5,555 5,555
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
DYCO OIL AND GAS PROGRAM 1984-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$162,400 and $196,844 of sales
to related parties (Note 2) . . . . $198,144 $219,170
Interest . . . . . . . . . . . . . . . 3,880 2,503
-------- --------
$202,024 $221,673
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $101,199 $ 68,625
Depreciation, depletion, and amortization
of oil and gas properties. . . . . . . 75,875 70,086
General and administrative (Note 2) . 43,548 38,561
-------- --------
$220,622 $177,272
-------- --------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 18,598) $ 44,401
======== ========
GENERAL PARTNER (1%) - net (loss) income ($ 186) $ 444
======== ========
LIMITED PARTNERS (99%) - net (loss) income ($ 18,412) $ 43,957
======== ========
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 3) $ 8
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 5,555 5,555
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1984-1 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 (loss) income . . . . . . . . . . ($ 18,598) $ 44,401
Adjustments to reconcile net (loss) income
to net cash provided by operating
activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . . 75,875 70,086
Decrease in accrued oil and gas sales 7,800 42,806
Increase in accounts payable . . . . 3,602 18,698
-------- --------
Net cash provided by operating
activities $ 68,679 $175,991
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 30,683) ($ 6,175)
Retirements of oil and gas properties 3,246 871
-------- --------
Net cash used by investing activities ($ 27,437) ($ 5,304)
-------- --------
NET CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . $ - ($194,425)
-------- --------
Net cash used by financing activities $ - ($194,425)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . $ 41,242 ($ 23,738)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 133,975 103,898
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $175,217 $ 80,160
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1984-1 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 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
1984-1 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
$43,548 and $38,561, respectively, of which $31,308 and
$31,308 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
$162,400 and $196,844, respectively. At June 30, 1995 accrued
oil and gas sales included $52,892 due from Premier.
3. CONTINGENCIES
-------------
On October 15, 1993 and October 26, 1993, certain royalty
owners filed two class action lawsuits against Dyco in which
the plaintiffs alleged entitlement to a share of proceeds of a
take-or-pay settlement with specified gas purchasers. The
lawsuits allege claims based on unjust enrichment, breach of
contract, and breach of fiduciary obligations and seek an
accounting and declaration that the plaintiffs are third party
beneficiaries. The plaintiffs have not quantified the amount
of their damages, but they are seeking exemplary damages,
unpaid royalties, and interest. Dyco has filed its answer in
both matters in which it denied all of the plaintiffs'
allegations. The district court certified the matters as
class actions on January 21, 1994 and January 18, 1994,
respectively, and discovery is proceeding in both matters. On
November 29, 1994, the plaintiffs filed a motion for summary
judgment in both matters. Dyco intends to vigorously defend
the lawsuits. As of the date of these financial statements,
Management cannot determine the amount of the alleged damages
which would be allocable to the Program from these lawsuits.
On December 18, 1992, a royalty owner filed a quiet title
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action alleging that the operator of certain wells in which
the Program has an interest failed to exercise due diligence
in locating the owner while in the process of force pooling
the drilling and spacing unit. Plaintiff claimed a right to
revenues attributable to production from said wells in an
amount in excess of $500,000 and further alleged conversion
and claimed a right to "interest" on the proceeds from
production on the well pursuant to 52 O.S. Sec. 540. The
defendants filed a counterclaim for quiet title and asserted
various defenses. A trial was held in the matter on March 3
and 4, 1994 in which the district court ruled against all
defendants and specifically found that the
operator, Apache Corporation, did not exercise due diligence
in the pooling proceedings. Judgement was entered on June 15,
1994 in the amount of $500,000 plus interest.
Included in these financial statements as of June 30, 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 the above contingencies.
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<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 $93,756 $91,633
Oil and gas production expenses $34,097 $20,538
Barrels produced 596 677
Mcf produced 53,621 46,912
Average price/Bbl $ 17.86 $ 16.51
Average price/Mcf $ 1.55 $ 1.72
As shown in the table, oil and natural gas sales increased
slightly by 2.3% for the three months ended June 30, 1995 as
compared to the three months ended June 30, 1994. This
increase was primarily due to the increase in the volumes of
natural gas sold, partially offset by 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. Volumes of oil sold decreased 81 barrels for
the three months ended June 30, 1995 as compared to the
three months ended June 30, 1994, while volumes of natural
gas sold increased 6,709 Mcf for the three months ended June
30, 1995 as compared to the similar period in 1994. The
increase in volumes of natural gas sold resulted primarily
from partially shutting in one of the Program's wells during
the three months ended June 30, 1994 to increase pressure on
the well in an effort to improve the well's future
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<PAGE>
production capabilities. Average oil prices increased to
$17.86 per barrel for the three months ended June 30, 1995
from an average of $16.51 per barrel for the three months
ended June 30, 1994, while the average price of natural gas
sold decreased to $1.55 per Mcf for the three months ended
June 30, 1995 from $1.72 per Mcf for the three months ended
June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $13,559 for the
three months ended June 30, 1995 as compared to the three
months ended June 30, 1994. This increase was primarily a
result of (i) workover charges on one well to improve the
recovery of reserves during the three months ended June 30,
1995 and (ii) costs associated with plugging an abandoned
well during the three months ended June 30, 1995. As a
percentage of oil and gas sales, these expenses increased to
36.4% for the three months ended June 30, 1995 from 22.4%
for the three months ended June 30, 1994. This percentage
increase was primarily a result of the increase in
production expenses related to workover charges 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 increased $3,886 for the three months ended June
30, 1995 as compared to the three months ended June 30,
1994. This increase was primarily a result of the increase
in the 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 increased to 40.3% for the three months ended June
30, 1995 from 37.0% 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.
General and administrative expenses increased $3,623 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 22.1% for the three months ended
June 30, 1995 from 18.7% 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.
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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 $198,144 $219,170
Oil and gas production expenses $101,199 $ 68,625
Barrels produced 1,207 1,761
Mcf produced 126,081 103,574
Average price/Bbl $ 17.45 $ 15.97
Average price/Mcf $ 1.40 $ 1.84
As shown in the table, oil and natural gas sales decreased
9.6% for the six months ended June 30, 1995 as compared to
the six months ended June 30, 1994. This decrease resulted
from the decrease in the volumes of oil sold and the
decrease in the average price of natural gas sold, partially
offset by an increase in the volume of natural gas sold and
an increase in the average price of oil sold for the six
months ended June 30, 1995 as compared to the six months
ended June 30, 1994. Volumes of oil sold decreased 554
barrels for the six months ended June 30, 1995 as compared
to the six months ended June 30, 1994, while volumes of
natural gas sold increased 22,507 Mcf for the six months
ended June 30, 1995 as compared to the similar period in
1994. The increase in volumes of natural gas sold resulted
primarily from partially shutting in one of the Program's
wells during the six months ended June 30, 1994 to increase
pressure on the well in an effort to improve the well's
future production capabilities. Average oil prices
increased to $17.45 per barrel for the six months ended June
30, 1995 from an average of $15.97 per barrel for the six
months ended June 30, 1994, while the average price of
natural gas sold decreased to $1.40 per Mcf for the six
months ended June 30, 1995 from $1.84 per Mcf for the six
months ended June 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $32,574 for the six
months ended June 30, 1995 as compared to the six months
ended June 30, 1994. This increase was primarily a result
of (i) workover charges on one well which were incurred to
improve the recovery of reserves during the six months ended
June 30, 1995 and (ii) costs associated with plugging an
abandoned well during the six months ended June 30, 1995.
As a percentage of oil and gas sales, these expenses
increased to 51.1% for the six months ended June 30, 1995
from 31.3% for the six months ended June 30, 1994. This
percentage increase was primarily a result of the dollar
increase in production expenses as discussed above and 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.
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<PAGE>
Depreciation, depletion, and amortization of oil and gas
properties increased $5,789 for the six months ended June
30, 1995 as compared to the six months ended June 30, 1994.
This increase was primarily a result of the increase in the
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 increased
to 38.3% for the six months ended June 30, 1995 from 32.0%
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.
General and administrative expenses increased $4,987 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 22.0% for the six months ended
June 30, 1995 from 17.6% 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.
-12-
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<PAGE>
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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<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 1984-1 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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<ARTICLE> 5
<CIK> 0000725261
<NAME> DYCO OIL AND GAS PROGRAM 1984-1 (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> 175,217
<SECURITIES> 0
<RECEIVABLES> 64,989
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 240,206
<PP&E> 0
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<TOTAL-ASSETS> 797,663
<CURRENT-LIABILITIES> 32,036
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 745,156
<TOTAL-LIABILITY-AND-EQUITY> 797,663
<SALES> 198,144
<TOTAL-REVENUES> 202,024
<CGS> 0
<TOTAL-COSTS> 220,622
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (18,598)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,598)
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