<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 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) 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 1985-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
------------ -------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 22,694 $ 39,697
Accrued oil and gas sales, including
$36,335 and $18,859 due from
related parties (Note 2) . . . . . . 46,675 25,179
-------- --------
Total current assets . . . . . . . $ 69,369 $ 64,876
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 113,408 279,586
-------- --------
$182,777 $344,462
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 7,718 $ 8,155
-------- --------
Total current liabilities . . . . . $ 7,718 $ 8,155
ACCRUED LIABILITY . . . . . . . . . . . . 10,057 10,057
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
41 units . . . . . . . . . . . . . . 1,650 3,262
Limited Partners, issued and outstanding,
4,100 units . . . . . . . . . . . . 163,352 322,988
-------- --------
Total Partners' capital . . . . . . $165,002 $326,250
-------- --------
$182,777 $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 SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ----------
REVENUES:
Oil and gas sales, including
$52,305 and $67,579 of sales
to related parties (Note 2) . . . . $ 79,977 $86,154
Interest . . . . . . . . . . . . . . . 981 523
-------- -------
$ 80,958 $86,677
-------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 37,899 $32,022
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 24,304 21,832
Provision to reduce carrying value of
oil and gas properties (Note 1) . . 101,580 -
General and administrative (Note 2) . 11,963 12,408
-------- -------
$175,746 $66,262
-------- -------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 94,788) $20,415
======== =======
GENERAL PARTNER (1%) - net (loss) income ($ 948) $ 204
======== =======
LIMITED PARTNERS (99%) - net (loss) income ($ 93,840) $20,211
======== =======
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 23) $ 5
======== =======
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 OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ----------
REVENUES:
Oil and gas sales, including
$176,286 and $273,536 of sales
to related parties (Note 2) . . . . $312,626 $426,005
Interest . . . . . . . . . . . . . . . 2,178 1,923
-------- --------
$314,804 $427,928
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $114,750 $109,717
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 92,038 115,618
Provision to reduce carrying value of
oil and gas properties (Note 1) . . 101,580 -
General and administrative (Note 2) . 43,454 39,846
-------- --------
$351,822 $265,181
-------- --------
NET (LOSS) INCOME . . . . . . . . . . . . ($ 37,018) $162,747
======== ========
GENERAL PARTNER (1%) - net (loss) income ($ 370) $ 1,627
======== ========
LIMITED PARTNERS (99%) - net (loss) income ($ 36,648) $161,120
======== ========
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 9) $ 39
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income . . . . . . . . . . ($ 37,018) $162,747
Adjustments to reconcile net (loss) income
to net cash provided by operating
activities:
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . . . 92,038 115,618
Provision to reduce carrying value of
oil and gas properties . . . . . . 101,580 -
(Increase) decrease in accrued oil and
gas sales . . . . . . . . . . . . . ( 21,496) 19,612
Decrease in accounts payable . . . . ( 437) ( 2,410)
-------- --------
Net cash provided by operating
activities $134,667 $295,567
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 27,440) ($ 3,321)
Retirements of oil and gas properties - 4,455
-------- --------
Net cash (used) provided by investing
activities . . . . . . . . . . . ($ 27,440) $ 1,134
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . ($124,230) ($289,870)
-------- --------
Net cash used by financing activities ($124,230) ($289,870)
-------- --------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . ($ 17,003) $ 6,831
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 39,697 22,690
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,694 $ 29,521
======== ========
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
September 30, December 31,
1995 1994
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 66,133 $ 5,733
Accrued oil and gas sales, including
$11,183 and $12,688 due from
related parties (Note 2) . . . . . . 54,009 40,509
-------- --------
Total current assets . . . . . . . $120,142 $ 46,242
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 42,425 186,746
DEFERRED CHARGE . . . . . . . . . . . . . 21,036 21,036
-------- --------
$183,603 $254,024
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 8,089 $ 9,303
-------- --------
Total current liabilities . . . . . $ 8,089 $ 9,303
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
44 units . . . . . . . . . . . . . . 1,755 2,447
Limited Partners, issued and outstanding,
4,330 units . . . . . . . . . . . . 173,759 242,274
-------- --------
Total Partners' capital . . . . . . $175,514 $244,721
-------- --------
$183,603 $254,024
======== ========
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
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
-------- ---------
REVENUES:
Oil and gas sales, including
$16,127 and $20,500 of sales
to related parties (Note 2) . . . . $ 78,684 $67,572
Interest . . . . . . . . . . . . . . . 393 610
-------- -------
$ 79,077 $68,182
-------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 35,625 $32,186
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . . . 22,870 11,432
Provision to reduce carrying value of
oil and gas properties (Note 1) . . 80,598 -
General and administrative (Note 2) . 11,381 11,821
-------- -------
$150,474 $55,439
-------- -------
NET (LOSS) INCOME . . . . . . . . . . . ($ 71,397) $12,743
======== =======
GENERAL PARTNER (1%) - net (loss) income ($ 714) $ 127
======== =======
LIMITED PARTNERS (99%) - net (loss) income ($ 70,683) $12,616
======== =======
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 17) $ 3
======== =======
UNITS OUTSTANDING . . . . . . . . . . . . 4,374 4,374
======== =======
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
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$54,295 and $71,074 of sales
to related parties (Note 2) . . . . $209,291 $320,454
Interest . . . . . . . . . . . . . . . 452 1,212
-------- --------
$209,743 $321,666
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 97,036 $127,604
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 58,797 78,579
Provision to reduce carrying value of
oil and gas properties (Note 1) . . 80,598 -
General and administrative (Note 2) . 42,519 38,184
-------- --------
$278,950 $244,367
-------- --------
NET (LOSS) INCOME . . . . . . . . . . . ($ 69,207) $ 77,299
======== ========
GENERAL PARTNER (1%) - net (loss) income ($ 692) $ 773
======== ========
LIMITED PARTNERS (99%) - net (loss) income ($ 68,515) $ 76,526
======== ========
NET (LOSS) INCOME PER UNIT . . . . . . . ($ 16) $ 18
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 4,374 4,374
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-8-
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DYCO OIL AND GAS PROGRAM 1985-2 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 (loss) income . . . . . . . . . . ($69,207) $ 77,299
Adjustments to reconcile net (loss) income
to net cash provided by operating
activities:
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . . 58,797 78,579
Provision to reduce carrying value of
oil and gas properties . . . . . . 80,598 -
(Increase) decrease in accrued oil and
gas sales . . . . . . . . . . . . . ( 13,500) 2,447
Decrease in deferred charge . . . . - 24,817
Decrease in accounts payable . . . . ( 1,214) ( 1,332)
------- --------
Net cash provided by operating
activities $55,474 $181,810
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . $ - ($ 3,733)
Retirements of oil and gas properties 4,926 -
------- --------
Net cash provided (used) by investing
activities . . . . . . . . . . . $ 4,926 ($ 3,733)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . $ - ($109,350)
------- --------
Net cash used by financing activities: $ - ($109,350)
------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS $60,400 $ 68,727
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 5,733 18,493
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $66,133 $ 87,220
======= ========
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
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 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
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
Programs' 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. 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 September 30, 1995, the unamortized cost of oil and gas
properties exceeded the full cost ceiling by $101,580 on the 1985-1
Program and by $80,598 on the 1985-2 Program. These excesses were
charged to expense during the three and nine months ended September
30, 1995. 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.
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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.
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
September 30, 1995 and 1994 the 1985-1 Program incurred such
expenses totaling $11,963 and $12,408, respectively, of which
$10,710 and $10,710 were paid to Dyco. During the nine months
ended September 30, 1995 and 1994 the 1985-1 Program incurred such
expenses totaling $43,454 and $39,846, respectively, of which
$32,130 and $32,130 were paid to Dyco. During the three months
ended September 30, 1995 and 1994 the 1985-2 Program incurred such
expenses totaling $11,381 and $11,821, respectively, of which
$10,068 and $10,068 were paid to Dyco. During the nine months
ended September 30, 1995 and 1994 the 1985-2 Program incurred such
expenses totaling $42,519 and $38,184, respectively, of which
$30,204 and $30,204 were paid to Dyco.
Affiliates of the Program 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 September 30, 1995 and 1994 these sales for the 1985-1
Program totaled $52,305 and $67,579, respectively. During the nine
months ended September 30, 1995 and 1994 these sales for the 1985-1
Program totaled $176,286 and $273,536, respectively. At September
30, 1995 accrued oil and gas sales for the 1985-1 Program included
$36,335 due from Premier. During the three months ended September
30, 1995 and 1994 these sales for the 1985-2 Program totaled
$16,127 and $20,500, respectively. During the nine months ended
September 30, 1995 and 1994 these sales for the 1985-2 Program
totaled $54,295 and $71,074, respectively. At September 30, 1995
accrued oil and gas sales for the 1985-2 Program included $11,183
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. Over the last several years, the
domestic energy industry and the Programs 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 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 SEPTEMBER 30, 1995 AS COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1994.
Three months ended September 30,
--------------------------------
1995 1994
---- ----
Oil and gas sales $79,977 $86,154
Oil and gas production
expenses $37,899 $32,022
Barrels produced 1,013 508
Mcf produced 50,853 53,334
Average price/Bbl $ 17.30 $ 15.67
Average price/Mcf $ 1.23 $ 1.47
As shown in the table above, oil and natural gas sales decreased
7.2% for the three months ended September 30, 1995 as compared to
the three months ended September 30, 1994. This decrease
resulted from the decrease in both the volumes and average price
of natural gas sold, partially offset by an increase in the
volumes and average price of oil sold during the three months
ended September 30, 1995 as compared to the three months ended
September 30, 1994. Volumes of natural gas sold decreased
slightly by 2,481 Mcf for the three months ended September 30,
1995 as compared to the three months ended September 30, 1994,
while volumes of oil sold increased 505 barrels for the similar
period of comparison. The increase in the volumes of oil sold
resulted primarily from significant positive prior period volume
adjustments from a purchaser on one of the 1985-1 Program's wells
during the three months ended September 30, 1995. Average
natural gas prices decreased to $1.23 per Mcf for the three
months ended September 30, 1995 from $1.47 per Mcf for the three
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months ended September 30, 1994, while average oil prices
increased to $17.30 per barrel for the three months ended
September 30, 1995 from $15.67 per barrel for the three months
ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $5,877 for the three
months ended September 30, 1995 as compared to the three months
ended September 30, 1994. This increase resulted from an
increase in general repair and maintenance expenses 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, these expenses increased to 47.3% for the three months
ended September 30, 1995 from 37.2% for the three months ended
September 30, 1994. This percentage increase was primarily due
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.
Depreciation, depletion, and amortization of oil and gas
properties increased $2,472 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 (i) an increase in
the volumes of oil sold during the three months ended September
30, 1995 as compared to the three months ended September 30, 1994
and (ii) the increase in oil and gas properties subject to
amortization as a result of recent recompletion and workover
activities on an existing well in order to improve the recovery
of future reserves. As a percentage of oil and gas sales, this
expense increased to 30.4% for the three months ended September
30, 1995 compared to 25.3% for the three months ended September
30, 1994. This percentage increase resulted primarily from 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.
As a result of recent declines in natural gas prices, the 1985-1
Program has recognized a non-cash charge against earnings of
$101,580 during the three months ended September 30, 1995. This
valuation allowance for oil and gas properties was necessary due
to the unamortized costs of oil and gas properties exceeding the
present value of the future net revenues from the oil and gas
properties. No similar allowance was necessary during the three
months ended September 30, 1994.
General and administrative expenses decreased slightly by $445
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
15.0% for the three months ended September 30, 1995 compared to
14.4% for the three months ended September 30, 1994.
NINE MONTHS ENDED SEPTEMBER 30, 1995 AS COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1994.
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Nine months ended September 30,
-------------------------------
1995 1994
---- ----
Oil and gas sales $312,626 $426,005
Oil and gas production
expenses $114,750 $109,717
Barrels produced 4,943 5,381
Mcf produced 169,487 192,146
Average price/Bbl $ 18.88 $ 16.78
Average price/Mcf $ 1.29 $ 1.75
As shown in the table, oil and natural gas sales decreased 26.6%
for the nine months ended September 30, 1995 as compared to the
nine months ended September 30, 1994. This decrease resulted
from the decrease in 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 during the
nine months ended September 30, 1995 as compared to the nine
months ended September 30, 1994. Volumes of oil and natural gas
sold decreased 438 barrels and 22,659 Mcf, respectively, for the
nine months ended September 30, 1995 as compared to the nine
months ended September 30, 1994. The decrease in the volumes of
oil sold resulted from positive prior period adjustments on one
well during the nine months ended September 30, 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 nine months ended
September 30, 1995. Average oil prices increased to $18.88 per
barrel for the nine months ended September 30, 1995 from $16.78
per barrel for the nine months ended September 30, 1994, while
natural gas prices decreased to an average of $1.29 per Mcf for
the nine months ended September 30, 1995 from an average of $1.75
per Mcf for the nine months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $5,033 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This increase resulted primarily from
an increase in general repair and maintenance expenses 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 36.7% for the nine months
ended September 30, 1995 from 25.8% for the nine months ended
September 30, 1994. This percentage increase was primarily due
to 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 decreased $23,580 for the nine months ended September
30, 1995 as compared to the nine months ended September 30, 1994.
This decrease was primarily a result of the decreases in the
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volumes of oil and 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 29.4% for the nine months ended September 30, 1995
from 27.1% for the nine months ended September 30, 1994. This
percentage increase was primarily due to 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.
As a result of recent declines in natural gas prices, the 1985-1
Program has recognized a non-cash charge against earnings of
$101,580 during the nine months ended September 30, 1995. This
valuation allowance for oil and gas properties was necessary due
to the unamortized costs of oil and gas properties exceeding the
present value of the future net revenues from the oil and gas
properties. No similar allowance was necessary during the nine
months ended September 30, 1994.
General and administrative expenses increased $3,608 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This dollar increase resulted
primarily from an increase in the 1985-1 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 13.9% for the nine
months ended September 30, 1995 from 9.4% for the nine months
ended September 30, 1994. This percentage increase was primarily
due to the dollar increase in general and administrative expenses
as 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 similar period in 1994.
1985-2 PROGRAM
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 $78,684 $67,572
Oil and gas production
expenses $35,625 $32,186
Barrels produced 2,136 2,129
Mcf produced 38,459 20,907
Average price/Bbl $ 17.31 $ 16.90
Average price/Mcf $ 1.08 $ 1.51
As shown in the table, oil and natural gas sales increased 16.4%
for the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994. The increase resulted
primarily from the increase in the volumes of natural gas sold,
partially offset by a 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 natural gas sold increased 17,552 Mcf for the three months
ended September 30, 1995 as compared to the three months ended
September 30, 1994, while volumes of oil sold remained relatively
constant for the similar period of comparison. The increase in
volumes of natural gas sold was primarily a result of positive
prior period volume adjustments from a purchaser on one well
-15-
<PAGE>
<PAGE>
during the three months ended September 30, 1995. Average oil
prices increased to $17.31 per barrel for the three months ended
September 30, 1995 from $16.90 per barrel for the three months
ended September 30, 1994, while average natural gas prices
decreased to $1.08 per Mcf for the three months ended September
30, 1995 from $1.51 per Mcf for the three months ended September
30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $3,439 for the three
months ended September 30, 1995 as compared to the three months
ended September 30, 1994. This increase resulted from an
increase in general repair and maintenance expenses 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, these expenses decreased to 45.3% for the three months
ended September 30, 1995 from 47.6% for the three months ended
September 30, 1994. This percentage decrease 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 September 30, 1995 as compared to
the three months ended September 30, 1994.
Depreciation, depletion, and amortization of oil and gas
properties increased $11,438 for the three months ended September
30, 1995 as compared to the three months ended September 30,
1994. This increase was primarily the result of the increase in
the volumes of 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 29.1% for the three months ended September
30, 1995 compared to 16.9% for the three months ended September
30, 1994. This percentage increase resulted primarily from 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.
As a result of recent declines in natural gas prices, the 1985-2
Program has recognized a non-cash charge against earnings of
$80,598 during the three months ended September 30, 1995. This
valuation allowance for oil and gas properties was necessary due
to the unamortized costs of oil and gas properties exceeding the
present value of the future net revenues from the oil and gas
properties. No similar allowance was necessary during the three
months ended September 30, 1994.
General and administrative expenses remained relatively constant
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 decreased to 14.5% for the three
months ended September 30, 1995 from 17.5% for the three months
ended September 30, 1994. This percentage decrease 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 September 30, 1995 as compared to
the three months ended September 30, 1994.
NINE MONTHS ENDED SEPTEMBER 30, 1995 AS COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1994.
-16-
<PAGE>
<PAGE>
Nine months ended September 30,
------------------------------------
1995 1994
---- ----
Oil and gas sales $209,291 $320,454
Oil and gas production
expenses $ 97,036 $127,604
Barrels produced 6,204 7,263
Mcf produced 83,284 104,185
Average price/Bbl $ 17.52 $ 15.67
Average price/Mcf $ 1.21 $ 1.98
As shown in the table, oil and natural gas sales decreased 34.7%
for the nine months ended September 30, 1995 as compared to the
nine months ended September 30, 1994. The decrease resulted from
the decreases in the volumes of oil and natural gas sold and the
decrease in the average price of natural gas sold, partially
offset by 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 and natural gas
sold decreased 1,059 barrels and 20,901 Mcf, respectively, for
the nine months ended September 30, 1995 as compared to the nine
months ended September 30, 1994. The decrease in volumes of
natural gas sold was primarily a result of revenues received
which were associated with a gas balancing adjustment on one of
the 1985-2 Program's wells during the nine months ended September
30, 1994. Average oil prices increased to $17.52 per barrel for
the nine months ended September 30, 1995 from $15.67 per barrel
for the nine months ended September 30, 1994, while average
natural gas prices decreased to $1.21 per Mcf for the nine months
ended September 30, 1995 from $1.98 per Mcf for the nine months
ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $30,568 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 volumes of oil and natural gas sold during
the nine months ended September 30, 1995. As a percentage of oil
and gas sales, these expenses increased to 46.4% for the nine
months ended September 30, 1995 from 39.8% for nine months ended
September 30, 1994. This percentage increase was primarily due
to 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 decreased $19,782 for the nine months ended September
30, 1995 as compared to the nine months ended September 30, 1994.
This decrease was primarily a result of the decrease in the
volumes of oil and 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 28.1% for the nine months ended September 30, 1995
from 24.5% for the nine months ended September 30, 1994. This
percentage increase was primarily due to 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.
As a result of recent declines in natural gas prices, the 1985-2
-17-
<PAGE>
<PAGE>
Program has recognized a non-cash charge against earnings of
$80,598 during the nine months ended September 30, 1995. This
valuation allowance for oil and gas properties was necessary due
to the unamortized costs of oil and gas properties exceeding the
present value of the future net revenues from the oil and gas
properties. No similar allowance was necessary during the nine
months ended September 30, 1994.
General and administrative expenses increased $4,335 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This dollar increase resulted
primarily from an increase in the 1985-2 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 20.3% for the nine
months ended September 30, 1995 from 11.9% for the nine months
ended September 30, 1994. This percentage increase was primarily
due to the dollar increase in general and administrative expenses
as discussed above and the decreases in the volumes of oil and
natural gas sold and a 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.
-18-
<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
-19-
<PAGE>
<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: 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
-20-
<PAGE>
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<NAME> DYCO OIL AND GAS PROGRAM 1985-1
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
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<OTHER-SE> 165,002
<TOTAL-LIABILITY-AND-EQUITY> 182,777
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<TABLE> <S> <C>
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<NAME> DYCO OIL AND GAS PROGRAM 1985-2
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 66,133
<SECURITIES> 0
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