<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, 1997 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 Number)
organization)
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,
1997 1996
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 94,076 $110,217
Accrued oil and gas sales 71,388 136,951
-------- --------
Total current assets $165,464 $247,168
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 349,976 392,256
DEFERRED CHARGE 70,942 70,942
-------- --------
$586,382 $710,366
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 6,606 $ 6,130
-------- --------
Total current liabilities $ 6,606 $ 6,130
ACCRUED LIABILITY 35,472 35,472
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 55 units 5,443 6,688
Limited Partners, issued and
outstanding, 5,500 units 538,861 662,076
-------- --------
Total Partners' capital $544,304 $668,764
-------- --------
$586,382 $710,366
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1984-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
REVENUES:
Oil and gas sales $113,924 $116,235
Interest 1,699 1,553
-------- --------
$115,623 $117,788
COST AND EXPENSES:
Oil and gas production $ 33,862 $ 21,041
Depreciation, depletion, and
amortization of oil and gas
properties 13,751 26,559
General and administrative (Note 2) 18,281 19,812
-------- --------
$ 65,894 $ 67,412
-------- --------
NET INCOME $ 49,729 $ 50,376
======== ========
GENERAL PARTNER (1%) - net
income $ 497 $ 504
======== ========
LIMITED PARTNERS (99%) - net
income $ 49,232 $ 49,872
======== ========
NET INCOME PER UNIT $ 8.95 $ 9.07
======== ========
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, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
REVENUES:
Oil and gas sales $239,741 $233,014
Interest 2,972 3,997
-------- --------
$242,713 $237,011
COST AND EXPENSES:
Oil and gas production $ 59,520 $ 56,665
Depreciation, depletion, and
amortization of oil and gas
properties 40,930 53,001
General and administrative (Note 2) 44,523 42,441
-------- --------
$144,973 $152,107
-------- --------
NET INCOME $ 97,740 $ 84,904
======== ========
GENERAL PARTNER (1%) - net
income $ 977 $ 849
======== ========
LIMITED PARTNERS (99%) - net
income $ 96,763 $ 84,055
======== ========
NET INCOME PER UNIT $ 17.59 $ 15.28
======== ========
UNITS OUTSTANDING 5,555 5,555
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1984-1 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
1997 1996
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 97,740 $ 84,904
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 40,930 53,001
Decrease (increase) in accrued oil
and gas sales 65,563 ( 1,304)
Increase in accounts payable 476 11,113
-------- --------
Net cash provided by operating
activities $204,709 $147,714
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ 1,350 $ -
Additions to oil and gas properties - ( 3,524)
-------- --------
Net cash provided (used) by
investing activities $ 1,350 ($ 3,524)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($222,200) ($277,750)
-------- --------
Net cash used by financing
activities ($222,200) ($277,750)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 16,141) ($133,560)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 110,217 233,440
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 94,076 $ 99,880
======== ========
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
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheet as of June 30, 1997, statements of operations
for the three and six months ended June 30, 1997 and 1996, and
statements of cash flows for the six months ended June 30, 1997
and 1996 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, 1997, results of operations for
the three and six months ended June 30, 1997 and 1996 and changes
in cash flows for the six months ended June 30, 1997 and 1996
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, 1996. The results of operations for the
period ended June 30, 1997 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. The Program's calculation
of depreciation, depletion, and amortization includes estimated
future expenditures to be incurred in developing proved reserves
and estimated dismantlement and abandonment costs, net of
estimated salvage values. In the event the unamortized cost of
oil and gas properties being amortized exceeds the full cost
ceiling (as defined by the Securities and Exchange Commission),
the excess is charged to expense in the period during which such
excess occurs. 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 period 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 June 30, 1997 and 1996 such expenses totaled $18,281 and
$19,812 respectively, of which $15,654 was paid quarterly to Dyco
and its affiliates. During the six months ended June 30, 1997
and 1996 such expenses totaled $44,523 and $42,441 respectively,
of which $31,308 was paid each period to Dyco and its affiliates.
Affiliates of the Program operate certain of the Program's
properties. Their policy is to bill the Program for all
customary charges and cost reimbursements associated with these
activities.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking
statements. The words "anticipate," "believe," "expect," "plan,"
"intend," "estimate," "project," "could," "may," and similar
expressions are intended to identify forward-looking statements.
Such statements reflect management's current views with respect
to future events and financial performance. This Quarterly
Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions
are management's efforts to accurately reflect the condition and
operation of the Program.
Use of forward-looking statements and estimates and assumptions
involve risks and uncertainties which include, but are not
limited to, the volatility of oil and gas prices, the uncertainty
of reserve information, the operating risk associated with oil
and gas properties (including the risk of personal injury, death,
property damage, damage to the well or producing reservoir,
environmental contamination, and other operating risks), the
prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the
general economic climate, the supply and price of foreign imports
of oil and gas, the level of consumer product demand, and the
price and availability of alternative fuels. Should one or more
of these risks or uncertainties occur or should estimates or
underlying assumptions prove incorrect, actual conditions or
results may vary materially and adversely from those stated,
anticipated, believed, estimated, or otherwise indicated.
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
- ---------------------
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GENERAL DISCUSSION
The following general discussion should be read in conjunction
with the analysis of results of operations provided below. The
most important variable affecting the Program's revenues is the
prices received for the sale of oil and gas. Predicting future
prices is very difficult. Substantially all of the Program's gas
reserves are being sold in the "spot market". Prices on the spot
market are subject to wide seasonal and regional pricing
fluctuations due to the highly competitive nature of the spot
market. In addition, such spot market sales are generally short-
term in nature and are dependent upon the obtaining of
transportation services provided by pipelines. Management is
unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
THREE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1996.
Three months ended June 30,
---------------------------
1997 1996
-------- --------
Oil and gas sales $113,924 $116,235
Oil and gas production expenses $ 33,862 $ 21,041
Barrels produced 317 450
Mcf produced 50,780 48,460
Average price/Bbl $ 20.50 $ 19.07
Average price/Mcf $ 2.12 $ 2.22
As shown in the table above, total oil and gas sales remained
relatively constant for the three months ended June 30, 1997 as
compared to the three months ended June 30, 1996. While the
average price of oil sold and volumes of gas sold increased
during the three months ended June 30, 1997 as compared to the
three months ended June 30, 1996, any resulting increase in oil
and gas sales was offset by a decrease in the volumes of oil sold
and a decrease in the average price of gas sold. Volumes of oil
sold decreased 133 barrels, while volumes of gas sold increased
2,320 Mcf for the three months ended June 30, 1997 as compared to
the three months ended June 30, 1996. The decrease in volumes of
oil sold resulted primarily from normal declines in production
due to diminished oil reserves on two wells. Average oil prices
increased to $20.50 per barrel for the three months ended June
30, 1997 from $19.07 per barrel for the three months ended June
30, 1996. Average gas prices decreased to $2.12 per Mcf for the
three months ended June 30, 1997 from $2.22 per Mcf for the three
months ended June 30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $12,821 (60.9%) for the
three months ended June 30, 1997 as compared to the three months
ended June 30, 1996. This increase resulted primarily from
workover expenses incurred on one well during the three months
ended June 30, 1997 in order to improve the recovery of reserves.
As a percentage of oil and gas sales, these expenses increased to
29.7% for the three months ended June 30, 1997 from 18.1% for the
three months ended June 30, 1996. This percentage increase was
primarily due to the dollar increase in production expenses
discussed above.
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Depreciation, depletion, and amortization of oil and gas
properties decreased $12,808 (48.2%) for the three months ended
June 30, 1997 as compared to the three months ended June 30,
1996. This decrease resulted primarily from upward revisions of
previous oil and gas reserve estimates at December 31, 1996. As
a percentage of oil and gas sales, this expense decreased to
12.1% for the three months ended June 30, 1997 from 22.8% for the
three months ended June 30, 1996. This percentage decrease was
primarily due to the dollar decrease in depreciation, depletion,
and amortization discussed above.
General and administrative expenses decreased $1,531 (7.7%) for
the three months ended June 30, 1997 as compared to the three
months ended June 30, 1996. This decrease resulted primarily
from a decrease in professional fees during the three months
ended June 30, 1997 as compared to the three months ended June
30, 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 16.0% for the three months ended
June 30, 1997 as compared to 17.0% for the three months ended
June 30, 1996.
SIX MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1996.
Six months ended June 30,
-------------------------
1997 1996
-------- --------
Oil and gas sales $239,741 $233,014
Oil and gas production expenses $ 59,520 $ 56,665
Barrels produced 710 952
Mcf produced 90,695 103,014
Average price/Bbl $ 21.43 $ 18.87
Average price/Mcf $ 2.48 $ 2.09
As shown in the table above, total oil and gas sales increased
$6,727 (2.9%) for the six months ended June 30, 1997 as compared
to the six months ended June 30, 1996. Of this increase,
approximately $2,000 and $35,000, respectively, were related to
increases in the average prices of oil and gas sold, partially
offset by decreases of approximately $5,000 and $26,000,
respectively, related to decreases in volumes of oil and gas
sold. Volumes of oil and gas sold decreased 242 barrels and
12,319 Mcf, respectively, for the six months ended June 30, 1997
as compared to the six months ended June 30, 1996. The decrease
in volumes of oil sold resulted primarily from (i) normal
declines in production due to diminished oil reserves on two
wells and (ii) a positive prior period adjustment made by the
purchaser on one well during the six months ended June 30, 1996.
The decrease in the volumes of gas sold resulted primarily from
normal declines in production due to diminished gas reserves on
two wells. Average oil and gas prices increased to $21.43 per
barrel and $2.48 per Mcf, respectively, for the six months ended
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June 30, 1997 from $18.87 per barrel and $2.09 per Mcf,
respectively, for the six months ended June 30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $2,855 (5.0%) for the
six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. This increase resulted primarily from
workover expenses incurred on one well during the six months
ended June 30, 1997 in order to improve the recovery of reserves,
partially offset by decreases in volumes of oil and gas sold
during the six months ended June 30, 1997 as compared to the six
months ended June 30, 1996. As a percentage of oil and gas
sales, these expenses remained relatively constant at 24.8% for
the six months ended June 30, 1997 as compared to 24.3% for the
six months ended June 30, 1996.
Depreciation, depletion, and amortization of oil and gas
properties decreased $12,071 (22.8%) for the six months ended
June 30, 1997 as compared to the six months ended June 30, 1996.
This decrease resulted primarily from (i) decreases in volumes of
oil and gas sold during the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996 and (ii) upward
revisions of previous oil and gas reserve estimates at December
31, 1996. As a percentage of oil and gas sales, this expense
decreased to 17.1% for the six months ended June 30, 1997 from
22.7% for the six months ended June 30, 1996. This percentage
decrease was primarily due to the increases in the average prices
of oil and gas sold during the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996.
General and administrative expenses remained relatively constant
for the six months ended June 30, 1997 as compared to the six
months ended June 30, 1996. As a percentage of oil and gas
sales, these expenses remained relatively constant at 18.6% for
the six months ended June 30, 1997 and 18.2% for the six months
ended June 30, 1996.
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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 June 30, 1997 and for
the six months ended June 30, 1997, filed
herewith.
All other exhibits are omitted as inapplicable.
(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 1984-1 LIMITED
PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: August 5, 1997 By: /s/Dennis R. Neill
-------------------------------
(Signature)
Dennis R. Neill
President
Date: August 5, 1997 By: /s/Patrick M. Hall
-------------------------------
(Signature)
Patrick M. Hall
Chief Financial 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
1984-1 Limited Partnership's financial statements as of June
30, 1997 and for the six months ended June 30, 1997, filed
herewith.
All other exhibits are omitted as inapplicable.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000725261
<NAME> DYCO OIL & GAS PROGRAM 1984-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 94,076
<SECURITIES> 0
<RECEIVABLES> 71,388
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 165,464
<PP&E> 30,206,170
<DEPRECIATION> 29,856,194
<TOTAL-ASSETS> 586,382
<CURRENT-LIABILITIES> 6,606
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 544,304
<TOTAL-LIABILITY-AND-EQUITY> 586,382
<SALES> 239,741
<TOTAL-REVENUES> 242,713
<CGS> 0
<TOTAL-COSTS> 144,973
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 97,740
<INCOME-TAX> 0
<INCOME-CONTINUING> 97,740
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 97,740
<EPS-PRIMARY> 17.59
<EPS-DILUTED> 0
</TABLE>
