<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
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
March 31, 1995 2-92702 (1985-1)
2-92702-01 (1985-2)
DYCO 1985 OIL AND GAS PROGRAMS
(TWO LIMITED PARTNERSHIPS)
(Exact Name of Registrant as specified in its charter)
41-1498087 (1985-1)
Minnesota 41-1498086 (1985-2)
(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) hasbeen subject tosuch filing requirementsfor the past 90days.
Yes X No
---- ----
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1995 1994
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 60,143 $ 39,697
Accrued oil and gas sales, including
$31,262 and $18,859 due from
related parties (Note 2) . . . . . . 41,144 25,179
-------- --------
Total current assets . . . . . . . $101,287 $ 64,876
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 264,273 279,586
-------- --------
$365,560 $344,462
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 9,245 $ 8,155
-------- --------
Total current liabilities . . . . . $ 9,245 $ 8,155
ACCRUED LIABILITY . . . . . . . . . . . . 10,057 10,057
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
41 units . . . . . . . . . . . . . . 3,462 3,262
Limited Partners, issued and outstanding,
4,100 units . . . . . . . . . . . . 342,796 322,988
-------- --------
Total Partners' capital . . . . . . $346,258 $326,250
-------- --------
$365,560 $344,462
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1995 1994
-------- ---------
REVENUES:
Oil and gas sales, including
$59,708 and $96,068 of sales
to related parties (Note 2) . . . . $110,161 $186,072
Interest . . . . . . . . . . . . . . . 477 265
-------- --------
$110,638 $186,337
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 43,330 $ 40,817
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 30,915 46,893
General and administrative (Note 2) . 16,385 15,673
-------- --------
$ 90,630 $103,383
-------- --------
NET INCOME . . . . . . . . . . . . . . . $ 20,008 $ 82,954
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 200 $ 830
======== ========
LIMITED PARTNERS (99%) - net income . . $ 19,808 $ 82,124
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 5 $ 20
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 4,141 4,141
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . $20,008 $ 82,954
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . 30,915 46,893
Increase in accrued oil and gas sales ( 15,965) ( 35,014)
Increase (decrease) in accounts payable 1,090 ( 148)
------- --------
Net cash provided by operating
activities $36,048 $ 94,685
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($15,602) ($ 2,211)
------- --------
Net cash used by investing activities ($15,602) ($ 2,211)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash used by financing activities $ - $ -
------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS $20,446 $ 92,474
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 39,697 22,690
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $60,143 $115,164
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1995 1994
------------------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 16,446 $ 5,733
Accounts receivable - Related party . 8,485 -
Accrued oil and gas sales, including
$9,052 and $12,688 due from
related parties (Note 2) . . . . . . 38,913 40,509
-------- --------
Total current assets . . . . . . . $ 63,844 $ 46,242
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 167,721 186,746
DEFERRED CHARGE . . . . . . . . . . . . . 21,036 21,036
-------- --------
$252,601 $254,024
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 9,172 $ 9,303
-------- --------
Total current liabilities . . . . . $ 9,172 $ 9,303
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
44 units . . . . . . . . . . . . . . 2,434 2,447
Limited Partners, issued and outstanding,
4,330 units . . . . . . . . . . . . 240,995 242,274
-------- --------
Total Partners' capital . . . . . . $243,429 $244,721
-------- --------
$252,601 $254,024
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-5-
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<PAGE>
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1995 1994
--------- --------
REVENUES:
Oil and gas sales, including
$16,777 and $19,898 of sales
to related parties (Note 2) . . . . $67,756 $ 70,732
Interest . . . . . . . . . . . . . . . 10 148
------- --------
$67,766 $ 70,880
------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $33,588 $ 36,189
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 19,025 17,719
General and administrative (Note 2) . 16,445 15,291
------- --------
$69,058 $ 69,199
------- --------
NET (LOSS) INCOME . . . . . . . . . . . ($ 1,292) $ 1,681
======= ========
GENERAL PARTNER (1%) - net (loss) income ($ 13) $ 17
======= ========
LIMITED PARTNERS (99%) - net (loss) income ($ 1,279) $ 1,664
======= ========
NET (LOSS) INCOME PER UNIT . . . . . . . ($ .30) $ .38
======= ========
UNITS OUTSTANDING . . . . . . . . . . . . 4,374 4,374
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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<PAGE>
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1995 1994
-------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income . . . . . . . . . . ($ 1,292) $ 1,681
Adjustments to reconcile net (loss) income
to net cash provided by operating
activities:
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . 19,025 17,719
Increase in accounts receivable - Related
party ( 8,485) -
Decrease in accrued oil and gas sales 1,596 2,333
Decrease in accounts payable . . . . ( 131) ( 16)
------- -------
Net cash provided by operating
activities $10,713 $21,717
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . $ - ($ 2,485)
------- -------
Net cash used by investing activities $ - ($ 2,485)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash used by financing activities: $ - $ -
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS $10,713 $19,232
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 5,733 18,493
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $16,446 $37,725
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of March 31, 1995, statements of
operations for the three months ended March 31, 1995 and 1994,
and statements of cash flows for the three months ended March
31, 1995 and 1994 have been prepared by Dyco Petroleum
Corporation ("Dyco"), the General Partner of the Dyco Oil and
Gas Program 1985-1 and 1985-2 Limited Partnerships
(individually, the "1985-1 Program" or the "1985-2 Program", as
the case may be, or, collectively, the "Programs"), without
audit. In the opinion of management all adjustments (which
include only normal recurring adjustments) necessary to present
fairly the financial position at March 31, 1995, and results of
operations and changes in cash flows for the three months ended
March 31, 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 Programs' Annual Report on Form 10-K for the
year ended December 31, 1994. The results of operations for the
period ended March 31, 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
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resulting rate to the net remaining costs of oil and gas
properties that have been capitalized, plus estimated future
development costs.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
Under the terms of each 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 March 31, 1995 and 1994 the 1985-1
Program incurred such expenses totaling $16,385 and $15,673,
respectively, of which $10,710 and $10,710 were paid to Dyco.
During the three months ended March 31, 1995 and 1994 the 1985-2
Program incurred such expenses totaling $16,445 and $15,291,
respectively, of which $10,068 and $10,068 were paid to Dyco.
Affiliates of the Programs are the operators of certain of the
Programs' properties and their policy is to bill the Programs
for all customary charges and cost reimbursements associated
with their activities, together with any compressor rentals,
consulting, or other services provided.
The Programs sell 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 March 31, 1995 and 1994 these sales for the 1985-1
Program totaled $59,708 and $96,068, respectively. At March 31,
1995 accrued oil and gas sales for the 1985-1 Program included
$31,262 due from Premier. During the three months ended March
31, 1995 and 1994 these sales for the 1985-2 Program totaled
$16,777 and $19,898, respectively. At March 31, 1995 accrued
oil and gas sales for the 1985-2 Program included $9,052 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 Programs' 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 Programs' reserves
which would result in a positive economic impact.
The Programs' 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 Programs have no bank debt commitments. Cash
for operational purposes will be provided by current oil and
gas production.
RESULTS OF OPERATIONS
---------------------
1985-1 PROGRAM
THREE MONTHS ENDED MARCH 31, 1995 AS COMPARED TO THE THREE
MONTHS ENDED MARCH 31, 1994.
Three Months ended March 31,
----------------------------
1995 1994
---- ----
Oil and gas sales $110,161 $186,072
Oil and gas production expenses $ 43,330 $ 40,817
Barrels produced 2,179 2,725
Mcf produced 51,535 71,575
Average price/Bbl $ 18.65 $ 16.53
Average price/Mcf $ 1.35 $ 1.97
As shown in the above table, oil and natural gas sales
decreased 40.8% for the three months ended March 31, 1995 as
compared to the three months ended March 31, 1994. This
decrease was due to decreases in the volumes of oil and
natural gas sold and a decrease in the average price of
natural gas sold, partially offset by an increase in the
average price of oil sold. Volumes of oil and natural gas
sold decreased 546 barrels and 20,040 Mcf for the three
months ended March 31, 1995 as compared to the three months
ended March 31, 1994. The decrease in the volumes of
natural gas sold was primarily a result of a clerical error
made by a purchaser in a prior year which was recouped by
the purchaser during the three months ended March 31, 1995.
Average oil prices increased to $18.65 per barrel for the
three months ended March 31, 1995 from $16.53 per barrel for
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the three months ended March 31, 1994, while average natural
gas prices decreased to $1.35 per Mcf for the three months
ended March 31, 1995 from $1.97 per Mcf for the three months
ended March 31, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased slightly by $2,513
for the three months ended March 31, 1995 as compared to the
three months ended March 31, 1994. This increase resulted
primarily from workover charges on several wells during the
three months ended March 31, 1995 to improve the recovery of
reserves, partially offset by lower production taxes
resulting from the decrease in the volumes and average price
of natural gas sold. As a percentage of oil and gas sales,
these expenses increased to 39.3% for the three months ended
March 31, 1995 from 21.9% for the three months ended March
31, 1994. This percentage increase was primarily a result
of the decrease in the average price of natural gas sold,
partially offset by the increase in the average price of oil
sold during the three months ended March 31, 1995 as
compared to the three months ended March 31, 1994.
Depreciation, depletion, and amortization of oil and gas
properties decreased $15,978 for the three months ended
March 31, 1995 as compared to the three months ended March
31, 1994. This decrease was primarily a result of the
decreases in the volumes of oil and natural gas sold. As a
percentage of oil and gas sales, this expense increased to
28.1% for the three months ended March 31, 1995 from 25.2%
for the three months ended March 31, 1994. This percentage
increase was primarily a result of the decrease in the
average price of natural gas sold, partially offset by the
increase in the average price of oil sold during the three
months ended March 31, 1995 as compared to the three months
ended March 31, 1994.
General and administrative expenses increased slightly by
$712 for the three months ended March 31, 1995 as compared
to the three months ended March 31, 1994. As a percentage
of oil and gas sales, these expenses increased to 14.8% for
the three months ended March 31, 1995 from 8.4% for the
three months ended March 31, 1994. This percentage increase
was primarily a result of the decrease in the average price
of natural gas sold, partially offset by the increase in the
average price of oil sold during the three months ended
March 31, 1995 as compared to the three months ended March
31, 1994.
1985-2 PROGRAM
THREE MONTHS ENDED MARCH 31, 1995 AS COMPARED TO THE THREE
MONTHS ENDED MARCH 31, 1994.
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Three Months ended March 31,
----------------------------
1995 1994
---- ----
Oil and gas sales $67,756 $70,732
Oil and gas production expenses $33,588 $36,189
Barrels produced 2,430 2,590
Mcf produced 20,197 18,399
Average price/Bbl $ 17.35 $ 14.23
Average price/Mcf $ 1.27 $ 1.84
As shown in the table, oil and natural gas sales decreased
slightly by 4.2% for the three months ended March 31, 1995
as compared to the three months ended March 31, 1994. This
decrease resulted primarily from the decrease in the average
price of natural gas sold during the three months ended
March 31, 1995 as compared to the three months ended March
31, 1994. Volumes of oil and natural gas sold remained
relatively constant for the three months ended March 31,
1995 as compared to the three months ended March 31, 1994.
Average oil prices increased to $17.35 per barrel for the
three months ended March 31, 1995 from $14.23 per barrel for
the three months ended March 31, 1994, while average natural
gas prices decreased to $1.27 per Mcf during the three
months ended March 31, 1995 from $1.84 per Mcf for the three
months ended March 31, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased slightly by $2,601
for the three months ended March 31, 1995 as compared to the
three months ended March 31, 1994. As a percentage of oil
and gas sales, these expenses remained relatively constant
at 49.6% for the three months ended March 31, 1995 compared
to 51.2% for the three months ended March 31, 1994.
Depreciation, depletion, and amortization of oil and gas
properties increased slightly by $1,306 for the three months
ended March 31, 1995 as compared to the three months ended
March 31, 1994. As a percentage of oil and gas sales, this
expense increased slightly to 28.1% for the three months
ended March 31, 1995 from 25.1% for the three months ended
March 31, 1994. This percentage increase was primarily a
result of the decrease in the average price of natural gas
sold, partially offset by the increase in the average price
of oil sold during the three months ended March 31, 1995 as
compared to the three months ended March 31, 1994.
General and administrative expenses increased slightly by
$1,154 for the three months ended March 31, 1995 as compared
to the three months ended March 31, 1994. As a percentage
of oil and gas sales, these expenses increased slightly to
24.3% for the three months ended March 31, 1995 from 21.6%
for the three months ended March 31, 1994. This percentage
increase was primarily a result of the decrease in the
average price of natural gas sold, partially offset by the
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increase in the average price of oil sold during the three
months ended March 31, 1995 as compared to the three months
ended March 31, 1994.
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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 1985-1 LIMITED
PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED
PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: August 28, 1995 By: /s/Dennis R. Neill
--------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: August 28, 1995 By: /s/Patrick M. Hall
--------------------
(Signature)
Patrick M. Hall
Senior Vice President -
Controller
Principal Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751255
<NAME> DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 60,143
<SECURITIES> 0
<RECEIVABLES> 41,144
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 101,287
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 365,560
<CURRENT-LIABILITIES> 9,245
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 346,258
<TOTAL-LIABILITY-AND-EQUITY> 365,560
<SALES> 110,161
<TOTAL-REVENUES> 110,638
<CGS> 0
<TOTAL-COSTS> 90,630
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 20,008
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,008
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,008
<EPS-PRIMARY> 5.00
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751256
<NAME> DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 16,446
<SECURITIES> 0
<RECEIVABLES> 38,913
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 63,844
<PP&E> 0
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<TOTAL-ASSETS> 252,601
<CURRENT-LIABILITIES> 9,172
<BONDS> 0
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0
0
<OTHER-SE> 243,429
<TOTAL-LIABILITY-AND-EQUITY> 252,601
<SALES> 67,756
<TOTAL-REVENUES> 67,766
<CGS> 0
<TOTAL-COSTS> 69,058
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,292)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,292)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,292)
<EPS-PRIMARY> (0.30)
<EPS-DILUTED> 0
</TABLE>
