<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, 1996 0-13578
DYCO OIL AND GAS PROGRAM 1984-2
(A LIMITED PARTNERSHIP)
(Exact Name of Registrant as specified in its charter)
Minnesota 41-1479080
(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 1984-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1996 1995
-------- ------------
CURRENT ASSETS:
Cash and cash equivalents $116,825 $ 67,097
Accrued oil and gas sales, including
$66,414 due from related parties
in 1995 (Note 2) 82,589 75,739
-------- --------
Total current assets $199,414 $142,836
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 489,594 542,563
DEFERRED CHARGE 27,063 27,063
-------- --------
$716,071 $712,462
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 4,095 $ 4,875
Gas imbalance payable 3,896 3,896
-------- --------
Total current liabilities $ 7,991 $ 8,771
ACCRUED LIABILITY 14,798 14,798
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 52 units 6,933 6,889
Limited Partners, issued and
outstanding 5,200 units 686,349 682,004
-------- --------
Total Partners' capital $693,282 $688,893
-------- --------
$716,071 $712,462
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1984-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
-------- -------
REVENUES:
Oil and gas sales, including
$82,443 of sales to related
parties in 1995 (Note 2) $132,882 $85,969
Interest 491 977
-------- -------
$133,373 $86,946
COST AND EXPENSES:
Oil and gas production $ 21,354 $21,884
Depreciation, depletion, and
amortization of oil and gas
properties 28,776 42,333
General and administrative (Note 2) 18,051 18,949
-------- -------
$ 68,181 $83,166
-------- -------
NET INCOME $ 65,192 $ 3,780
======== =======
GENERAL PARTNER (1%) - net
income $ 652 $ 38
======== =======
LIMITED PARTNERS (99%) - net
income $ 64,540 $ 3,742
======== =======
NET INCOME PER UNIT $ 12 $ 1
======== =======
UNITS OUTSTANDING 5,252 5,252
======== =======
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
DYCO OIL AND GAS PROGRAM 1984-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
-------- --------
REVENUES:
Oil and gas sales, including
$153,083 of sales to related
parties in 1995 (Note 2) $243,524 $158,447
Interest 1,300 1,645
-------- --------
$244,824 $160,092
COST AND EXPENSES:
Oil and gas production $ 43,752 $ 49,601
Depreciation, depletion, and
amortization of oil and gas
properties 52,838 75,454
General and administrative (Note 2) 38,805 39,842
-------- --------
$135,395 $164,897
-------- --------
NET INCOME (LOSS) $109,429 ($ 4,805)
======== ========
GENERAL PARTNER (1%) - net
income (loss) $ 1,094 ($ 48)
======== ========
LIMITED PARTNERS (99%) - net
income (loss) $108,335 ($ 4,757)
======== ========
NET INCOME (LOSS) PER UNIT $ 21 ($ 1)
======== ========
UNITS OUTSTANDING 5,252 5,252
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1984-2 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $109,429 ($ 4,805)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 52,838 75,454
(Increase) decrease in accrued oil
and gas sales ( 6,850) 22,188
Increase (decrease) in accounts
payable ( 780) 138
-------- -------
Net cash provided by operating
activities $154,637 $92,975
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties $ - ($28,990)
Retirements of oil and gas
properties 131 -
-------- -------
Net cash provided (used) by
investing activities $ 131 ($28,990)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($105,040) $ -
-------- -------
Net cash used by financing
activities ($105,040) $ -
-------- -------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 49,728 $63,985
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 67,097 32,766
-------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $116,825 $96,751
======== =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1984-2 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheet as of June 30, 1996, statements of operations
for the three and six months ended June 30, 1996 and 1995, and
statements of cash flows for the six months ended June 30, 1996
and 1995 have been prepared by Dyco Petroleum Corporation
("Dyco"), the General Partner of the Dyco Oil and Gas Program
1984-2 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 June 30, 1996, results of operations for the three
and six months ended June 30, 1996 and 1995 and changes in cash
flows for the six months ended June 30, 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 June 30, 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. 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. At June 30, 1995 the
unamortized cost of oil and gas properties exceeded the full cost
ceiling by $122,684. This excess was charged to expense during
the six months ended June 30, 1995. No such valuation allowance
was incurred during the six months ended June 30, 1996. 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 June 30, 1996 and 1995 such expenses totaled $18,051 and
$18,949, respectively, of which $14,118 and $14,118 were paid to
Dyco. During the six months ended June 30, 1996 and 1995 such
expenses totaled $38,805 and $39,842, respectively, of which
$28,236 and $28,236 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 June 30, 1995
these sales totaled $82,443. During the six months ended June
30, 1995 these sales totaled $153,083. At December 31, 1995,
accrued oil and gas sales included $66,414 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 JUNE 30, 1996 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1995.
Three months ended June 30,
---------------------------
1996 1995
-------- -------
Oil and gas sales $132,882 $85,969
Oil and gas production expenses $ 21,354 $21,884
Barrels produced 111 104
Mcf produced 64,559 61,710
Average price/Bbl $ 20.62 $ 17.73
Average price/Mcf $ 2.02 $ 1.36
As shown in the table, oil and natural gas sales increased
$46,913 (54.6%) for the three months ended June 30, 1996 as
compared to the three months ended June 30, 1995. Of this
increase, $40,729 was related to the increase in the average
price of natural gas sold and $5,755 was related to the increase
in the volumes of natural gas sold. Volumes of oil and natural
sold increased 7 barrels and 2,849 Mcf, respectively, for the
three months ended June 30, 1996 as compared to the three months
ended June 30, 1995. Average oil and natural gas prices
increased to $20.62 per barrel and $2.02 per Mcf, respectively,
for the three months ended June 30, 1996 from $17.73 per barrel
and $1.36 per Mcf, respectively, for the three months ended June
30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) remained relatively constant for
the three months ended June 30, 1996 as compared to the three
months ended June 30, 1995. As a percentage of oil and gas
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sales, these expenses decreased to 16.1% for the three months
ended June 30, 1996 from 25.5% for the three months ended June
30, 1995. This percentage decrease was primarily due to the
increases in the average prices of oil and natural gas sold
during the three months ended June 30, 1996 as compared to the
three months ended June 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $13,557 for the three months ended June 30,
1996 as compared to the three months ended June 30, 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. As a percentage of oil and gas sales, this
expense decreased to 21.7% for the three months ended June 30,
1996 from 49.2% for the three months ended June 30, 1995. This
percentage decrease was primarily due to the upward revision in
the remaining natural gas reserves as discussed above and the
increases in the average prices of oil and natural gas sold
during the three months ended June 30, 1996 as compared to the
three months ended June 30, 1995.
General and administrative expenses decreased $898 during the
three months ended June 30, 1996 as compared to the three months
ended June 30, 1995. As a percentage of oil and gas sales, these
expenses decreased to 13.6% for the three months ended June 30,
1996 from 22.0% for the three months ended June 30, 1995. This
percentage decrease was primarily the result of the increases in
the average prices of oil and natural gas sold during the three
months ended June 30, 1996 as compared to the three months ended
June 30, 1995.
SIX MONTHS ENDED JUNE 30, 1996 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1995.
Six months ended June 30,
---------------------------
1996 1995
-------- --------
Oil and gas sales $243,524 $158,447
Oil and gas production expenses $ 43,752 $ 49,601
Barrels produced 237 214
Mcf produced 123,471 119,302
Average price/Bbl $ 19.22 $ 17.21
Average price/Mcf $ 1.94 $ 1.30
As shown in the table, oil and natural gas sales increased
$85,077 (53.7%) for the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995. Of this
increase, $76,353 was related to the increase in the average
price of natural gas sold and $8,088 was related to the increase
in the volumes of natural gas sold. Volumes of oil and natural
sold increased 23 barrels and 4,169 Mcf, respectively, for the
six months ended June 30, 1996 as compared to the six months
ended June 30, 1995. Average oil and natural gas prices
increased to $19.22 per barrel and $1.94 per Mcf, respectively,
for the six months ended June 30, 1996 from $17.21 per barrel and
$1.30 per Mcf, respectively, for the six months ended June 30,
1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $5,849 for the six
months ended June 30, 1996 as compared to the six months ended
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<PAGE>
June 30, 1995. This decrease resulted primarily from (i) a
decrease in compression expenses on one well during the six
months ended June 30, 1996 as compared to the six months ended
June 30, 1995 and (ii) a decrease in ad valorem taxes on one well
during the six months ended June 30, 1996 as compared to the six
months ended June 30, 1995. As a percentage of oil and gas
sales, these expenses decreased to 18.0% for the six months ended
June 30, 1996 as compared 31.3% for the six months ended June 30,
1995. This percentage decrease was primarily due to the decrease
in compression expenses and ad valorem taxes mentioned above and
the increases in the average prices of oil and natural gas sold
during the six months ended June 30, 1996 as compared to the six
months ended June 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $22,616 for the six months ended June 30,
1996 as compared to the six months ended June 30, 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. As a percentage of oil and gas sales, this
expense decreased to 21.7% for the six months ended June 30, 1996
from 47.6% for the six months ended June 30, 1995. This
percentage decrease was primarily due to the upward revision in
the remaining natural gas reserves as discussed above and the
increases in the average prices of oil and natural gas sold
during the six months ended June 30, 1996 as compared to the six
months ended June 30, 1995.
General and administrative expenses decreased $1,037 during the
six months ended June 30, 1996 as compared to the six months
ended June 30, 1995. This dollar decrease was primarily due to a
decrease in printing and postage expenses during the six months
ended June 30, 1996. As a percentage of oil and gas sales, these
expenses decreased to 15.9% for the six months ended June 30,
1996 from 25.1% for the six months ended June 30, 1995. This
percentage decrease was primarily the result of the increases in
the average prices of oil and natural gas sold during the six
months ended June 30, 1996 as compared to the six months ended
June 30, 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 June 30, 1996 and for
the six months ended June 30, 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 1984-2 LIMITED
PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: August 6, 1996 By: /s/Dennis R. Neill
-----------------------------------
(Signature)
Dennis R. Neill
President
Date: August 6, 1996 By: /s/Drew S. Phillips
-----------------------------------
(Signature)
Drew S. Phillips
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
1984-2 Limited Partnership's financial statements as of June
30, 1996 and for the six months ended June 30, 1996, filed
herewith.
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000725262
<NAME> DYCO OIL AND GAS PROGRAM 1984-2 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 116,825
<SECURITIES> 0
<RECEIVABLES> 82,589
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 199,414
<PP&E> 23,996,225
<DEPRECIATION> 23,506,631
<TOTAL-ASSETS> 716,071
<CURRENT-LIABILITIES> 7,991
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 693,282
<TOTAL-LIABILITY-AND-EQUITY> 716,071
<SALES> 243,524
<TOTAL-REVENUES> 244,824
<CGS> 0
<TOTAL-COSTS> 135,395
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 109,429
<INCOME-TAX> 0
<INCOME-CONTINUING> 109,429
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 109,429
<EPS-PRIMARY> 21.00
<EPS-DILUTED> 0
</TABLE>
