<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 0-13430
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
----- -----
<PAGE>
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
DYCO OIL AND GAS PROGRAM 1984-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $102,815 $133,975
Accrued oil and gas sales, including
$54,971 and $60,779 due from
related parties (Note 2) . . . . . . 66,038 72,789
-------- --------
Total current assets . . . . . . . $168,853 $206,764
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 459,188 538,364
DEFERRED CHARGE . . . . . . . . . . . . . 67,531 67,531
-------- --------
$695,572 $812,659
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 26,415 $ 24,683
Gas imbalance payable . . . . . . . . 3,751 3,751
-------- --------
Total current liabilities . . . . . $ 30,166 $ 28,434
ACCRUED LIABILITY . . . . . . . . . . . . 20,471 20,471
CONTINGENCIES (NOTE 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding
55 units . . . . . . . . . . . . . . 6,449 7,637
Limited Partners, issued and outstanding,
5,500 units . . . . . . . . . . . . 638,486 756,117
-------- --------
Total Partners' capital . . . . . . $644,935 $763,754
-------- --------
$695,572 $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 SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
-------- --------
REVENUES:
Oil and gas sales, including
$92,218 and $98,521 of sales
to related parties (Note 2) . . . . $107,732 $110,258
Interest . . . . . . . . . . . . . . . 1,869 917
-------- --------
$109,601 $111,175
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 25,886 $ 28,119
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . 27,922 24,179
General and administrative (Note 2) . 17,139 17,715
-------- --------
$ 70,947 $ 70,013
-------- --------
NET INCOME . . . . . . . . . . . . . . . $ 38,654 $ 41,162
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 387 $ 412
======== ========
LIMITED PARTNERS (99%) - net income . . . $ 38,267 $ 40,750
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 7 $ 7
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 5,555 5,555
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-3-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1984-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$254,618 and $295,365 of sales
to related parties (Note 2) . . . . $305,876 $329,428
Interest . . . . . . . . . . . . . . . 5,749 3,420
-------- --------
$311,625 $332,848
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $127,085 $ 96,744
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . 103,797 94,265
General and administrative (Note 2) . 60,687 56,276
-------- --------
$291,569 $247,285
-------- --------
NET INCOME . . . . . . . . . . . . . . . $ 20,056 $ 85,563
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 201 $ 856
======== ========
LIMITED PARTNERS (99%) - net income . . . $ 19,855 $ 84,707
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 4 $ 15
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 5,555 5,555
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-4-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1984-1 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 . . . . . . . . . . . . . . $ 20,056 $ 85,563
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . 103,797 94,265
Decrease in accrued oil and gas sales 6,751 42,861
Increase in accounts payable . . . . 1,732 18,361
-------- --------
Net cash provided by operating
activities . . . . . . . . . . . . $132,336 $241,050
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 29,982) ($ 14,009)
Retirements of oil and gas properties 5,361 871
-------- --------
Net cash used by investing
activities . . . . . . . . . . . . ($ 24,621) ($ 13,138)
-------- --------
NET CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . ($138,875) ($194,425)
-------- --------
Net cash used by financing
activities . . . . . . . . . . . ($138,875) ($194,425)
-------- --------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . ($ 31,160) $ 33,487
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD . . . . . . . . . . . . . . . . 133,975 103,898
-------- --------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD . . . . . . . . . . . . . . . . $102,815 $137,385
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-5-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1984-1 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 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 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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<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 September 30, 1995 and 1994 such expenses totaled $17,139
and $17,715, respectively, of which $15,654 and $15,654 were paid
to Dyco. During the nine months ended September 30, 1995 and
1994 such expenses totaled $60,687 and $56,276, respectively, of
which $46,962 and $46,962 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
$92,218 and $98,521, respectively. During the nine months ended
September 30, 1995 and 1994 these sales totaled $254,618 and
$295,365, respectively. At September 30, 1995 accrued oil and
gas sales included $54,971 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.
-7-
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<PAGE>
On December 18, 1992, a royalty owner filed a quiet title 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. Section
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 September 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.
-8-
<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. 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 $107,732 $110,258
Oil and gas production
expenses $ 25,886 $ 28,119
Barrels produced 862 541
Mcf produced 69,171 67,977
Average price/Bbl $ 18.00 $ 16.96
Average price/Mcf $ 1.33 $ 1.49
As shown in the table, oil and natural gas sales decreased 2.3%
for the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994. This decrease was due
primarily to the decrease in the average price of natural gas
sold during the three months ended September 30, 1995 as compared
to the three months ended September 30, 1994. Volumes of oil and
natural gas sold increased 321 barrels and 1,194 Mcf,
respectively, for the three months ended September 30, 1995 as
compared to the three months ended September 30, 1994. The
increase in the volumes of oil and natural gas sold resulted
-9-
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<PAGE>
primarily from two of the Program's wells being shut-in during
the three months ended September 30, 1994 to increase pressure on
the wells and improve production capabilities. Average oil
prices increased to $18.00 per barrel for the three months ended
September 30, 1995 from an average of $16.96 per barrel for the
three months ended September 30, 1994, while the average price of
natural gas sold decreased to $1.33 per Mcf for the three months
ended September 30, 1995 from an average of $1.49 per Mcf for the
three months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased by $2,233 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 remained relatively constant at 24.0% for the
three months ended September 30, 1995 compared to 25.5% for the
three months ended September 30, 1994.
Depreciation, depletion, and amortization of oil and gas
properties increased $3,743 for the three months ended September
30, 1995 as compared to the three months ended September 30,
1994. This increase was primarily a result of the increases in
the volumes of oil and 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, this
expense increased to 25.9% for the three months ended September
30, 1995 from 21.9% for the three months ended September 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 September 30, 1995 as compared to the three
months ended September 30, 1994.
General and administrative expenses decreased slightly by $576
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 remained relatively constant at
16.0% for the three months ended September 30, 1995 compared to
16.1% for the three months ended September 30, 1994.
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 $305,876 $329,428
Oil and gas production
expenses $127,085 $ 96,744
Barrels produced 2,069 2,302
Mcf produced 195,252 171,551
Average price/Bbl $ 17.68 $ 16.20
Average price/Mcf $ 1.38 $ 1.70
-10-
<PAGE>
<PAGE>
As shown in the table, oil and natural gas sales decreased 7.1%
for the nine months ended September 30, 1995 as compared to the
nine months ended September 30, 1994. This decrease resulted
primarily from the decrease in the average price of natural gas
sold, partially offset by an increase in the volumes of natural
gas sold and an increase in the average price of oil sold during
the nine months ended September 30, 1995 as compared to the nine
months ended September 30, 1994. Volumes of oil sold decreased
233 barrels for the nine months ended September 30, 1995 as
compared to the nine months ended September 30, 1994, while
volumes of natural gas sold increased 23,701 Mcf for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. The increase in volumes of natural gas
sold resulted primarily from the shutting in of one of the
Program's wells during a portion of the nine months ended
September 30, 1994 to increase pressure on the well and improve
future production capabilities. The decrease in the volumes of
oil sold resulted primarily from prior period volume adjustments
from certain purchasers on two of the Program's wells during the
nine months ended September 30, 1994. Average oil prices
increased to $17.68 per barrel for the nine months ended
September 30, 1995 from an average of $16.20 per barrel for the
nine months ended September 30, 1994, while the average price of
natural gas sold decreased to $1.38 per Mcf for the nine months
ended September 30, 1995 from an average of $1.70 per Mcf for the
nine months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $30,341 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This increase was primarily a result
of re-drilling activities on one well and costs associated with
plugging an abandoned well during the nine months ended September
30, 1995. As a percentage of oil and gas sales, these expenses
increased to 41.5% for the nine months ended September 30, 1995
from 29.4% for the nine months ended September 30, 1994. This
percentage increase was primarily due to the dollar increase in
oil and gas production expenses as a result of the re-drill and
plugging charges discussed above and the 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.
Depreciation, depletion, and amortization of oil and gas
properties increased $9,532 for the nine months ended September
30, 1995 as compared to the nine months ended September 30, 1994.
This dollar increase was primarily a result of the 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. As a percentage of oil and gas sales, this expense
increased to 33.9% for the nine months ended September 30, 1995
from 28.6% for the nine months ended September 30, 1994. This
percentage increase was primarily a result of the 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.
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<PAGE>
General and administrative expenses increased $4,411 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 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 increased to 19.8% for the nine months ended
September 30, 1995 from 17.1% for the nine months ended September
30, 1994. This percentage increase was primarily a result of the
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.
-12-
<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
-13-
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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: 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
-14-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000725261
<NAME> DYCO OIL AND GAS PROGRAM 1984-1 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> 102,815
<SECURITIES> 0
<RECEIVABLES> 66,038
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 168,853
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 695,572
<CURRENT-LIABILITIES> 30,166
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 644,935
<TOTAL-LIABILITY-AND-EQUITY> 695,572
<SALES> 305,876
<TOTAL-REVENUES> 311,625
<CGS> 0
<TOTAL-COSTS> 291,569
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 20,056
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,056
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<CHANGES> 0
<NET-INCOME> 20,056
<EPS-PRIMARY> 4.00
<EPS-DILUTED> 0
</TABLE>
