<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, 1996 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 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
---- -----
<PAGE>
<PAGE>
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,
1996 1995
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 33,848 $ 58,496
Accrued oil and gas sales, including
$28,938 due from related parties
in 1995 (Note 2) 53,636 62,222
-------- --------
Total current assets $ 87,484 $120,718
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 165,303 203,770
DEFERRED CHARGE 4,741 4,741
-------- --------
$257,528 $329,229
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 5,760 $ 9,953
-------- --------
Total current liabilities $ 5,760 $ 9,953
ACCRUED LIABILITY 28,432 28,432
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 41 units 2,233 2,908
Limited Partners, issued and
outstanding, 4,100 units 221,103 287,936
-------- --------
Total Partners' capital $223,336 $290,844
-------- --------
$257,528 $329,229
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-2-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
-------- ---------
REVENUES:
Oil and gas sales, including
$52,305 of sales to related
parties in 1995 (Note 2) $107,842 $ 79,977
Interest 810 981
-------- --------
$108,652 $ 80,958
COST AND EXPENSES:
Oil and gas production $ 25,701 $ 37,899
Depreciation, depletion, and
amortization of oil and gas
properties 15,730 24,304
Impairment provision (Note 1) - 45,262
General and administrative (Note 2) 12,308 11,963
-------- --------
$ 53,739 $119,428
-------- --------
NET INCOME (LOSS) $ 54,913 ($ 38,470)
======== ========
GENERAL PARTNER (1%) - net
income (loss) $ 549 ($ 385)
======== ========
LIMITED PARTNERS (99%) - net
income (loss) $ 54,364 ($ 38,085)
======== ========
NET INCOME (LOSS) PER UNIT $ 13.26 ($ 9.20)
======== ========
UNITS OUTSTANDING 4,141 4,141
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-3-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
-------- --------
REVENUES:
Oil and gas sales, including
$176,286 of sales to related
parties in 1995 (Note 2) $274,903 $312,626
Interest 1,715 2,178
-------- --------
$276,618 $314,804
COST AND EXPENSES:
Oil and gas production $ 75,160 $114,750
Depreciation, depletion, and
amortization of oil and gas
properties 39,267 92,038
Impairment provision (Note 1) - 45,262
General and administrative (Note 2) 43,354 43,454
-------- --------
$157,781 $295,504
-------- --------
NET INCOME $118,837 $ 19,300
======== ========
GENERAL PARTNER (1%) - net
income $ 1,188 $ 193
======== ========
LIMITED PARTNERS (99%) - net
income $117,649 $ 19,107
======== ========
NET INCOME PER UNIT $ 28.70 $ 4.61
======== ========
UNITS OUTSTANDING 4,141 4,141
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-4-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $118,837 $ 19,300
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 39,267 92,038
Impairment provision - 45,262
Decrease (increase) in accrued oil
and gas sales 8,586 ( 21,496)
Decrease in accounts payable ( 4,193) ( 437)
-------- --------
Net cash provided by operating
activities $162,497 $134,667
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties ($ 1,706) ($ 27,440)
Retirements of oil and gas
properties 906 -
-------- --------
Net cash used by investing
activities ($ 800) ($ 27,440)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($186,345) ($124,230)
-------- --------
Net cash used by financing
activities ($186,345) ($124,230)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 24,648) ($ 17,003)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 58,496 39,697
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 33,848 $ 22,694
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-5-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1996 1995
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 57,607 $154,512
Accrued oil and gas sales, including
$12,336 due from related parties
in 1995 (Note 2) 30,978 41,489
-------- --------
Total current assets $ 88,585 $196,001
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 66,972 82,060
DEFERRED CHARGE 28,337 28,337
-------- --------
$183,894 $306,398
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 6,441 $ 9,025
-------- --------
Total current liabilities $ 6,441 $ 9,025
ACCRUED LIABILITY 10,114 10,114
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 44 units 1,673 2,872
Limited Partners, issued and
outstanding, 4,330 units 165,666 284,387
-------- --------
Total Partners' capital $167,339 $287,259
-------- --------
$183,894 $306,398
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-6-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
-------- --------
REVENUES:
Oil and gas sales, including
$16,127 of sales to related
parties in 1995 (Note 2) $55,749 $78,684
Interest 301 393
------- -------
$56,050 $79,077
COST AND EXPENSES:
Oil and gas production $26,146 $35,625
Depreciation, depletion, and
amortization of oil and gas
properties 4,422 22,870
General and administrative (Note 2) 11,753 11,381
------- -------
$42,321 $69,876
------- -------
NET INCOME $13,729 $ 9,201
======= =======
GENERAL PARTNER (1%) - net
income $ 137 $ 92
======= =======
LIMITED PARTNERS (99%) - net
income $13,592 $ 9,109
======= =======
NET INCOME PER UNIT $ 3.14 $ 2.08
======= =======
UNITS OUTSTANDING 4,374 4,374
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
-7-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
--------- ---------
REVENUES:
Oil and gas sales, including
$54,295 of sales to related
parties in 1995 (Note 2) $160,958 $209,291
Interest 1,543 452
-------- --------
$162,501 $209,743
COST AND EXPENSES:
Oil and gas production $ 72,182 $ 97,036
Depreciation, depletion, and
amortization of oil and gas
properties 15,156 58,797
General and administrative (Note 2) 41,993 42,519
-------- --------
$129,331 $198,352
-------- --------
NET INCOME $ 33,170 $ 11,391
======== ========
GENERAL PARTNER (1%) - net
income $ 332 $ 114
======== ========
LIMITED PARTNERS (99%) - net
income $ 32,838 $ 11,277
======== ========
NET INCOME PER UNIT $ 7.58 $ 2.58
======== ========
UNITS OUTSTANDING 4,374 4,374
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-8-
<PAGE>
<PAGE>
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 33,170 $11,391
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 15,156 58,797
Decrease (increase) in accrued oil
and gas sales 10,511 ( 13,500)
Decrease in accounts payable ( 2,584) ( 1,214)
-------- -------
Net cash provided by operating
activities $ 56,253 $55,474
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties ($ 7,716) $ -
Retirements of oil and gas
properties 7,648 4,926
-------- -------
Net cash provided (used) by
investing activities ($ 68) $ 4,926
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($153,090) $ -
-------- -------
Net cash used by financing
activities ($153,090) $ -
-------- -------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 96,905) $60,400
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 154,512 5,733
-------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 57,607 $66,133
======== =======
The accompanying condensed notes are an
integral part of these financial statements.
-9-
<PAGE>
<PAGE>
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, 1996
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of September 30, 1996, statements of
operations for the three and nine months ended September 30, 1996
and 1995, and statements of cash flows for the nine months ended
September 30, 1996 and 1995 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, 1996, results of operations for the three and
nine months ended September 30, 1996 and 1995 and changes in cash
flows for the nine months ended September 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 Programs' Annual Report on Form 10-K for the
year ended December 31, 1995. The results of operations for the
period ended September 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 September 30, 1995,
the unamortized cost of oil and gas properties exceeded the full
cost ceiling by $45,262 on the 1985-1 Program. This excess was
charged to expense during the three and nine months ended
September 30, 1995. No such impairment provision was incurred
during the three or nine months ended September 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
-10-
<PAGE>
<PAGE>
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, 1996 and 1995 the 1985-1
Program incurred such expenses totaling $12,308 and $11,963,
respectively, of which $10,710 and $10,710 were paid to Dyco.
During the nine months ended September 30, 1996 and 1995 the
1985-1 Program incurred such expenses totaling $43,354 and
$43,454, respectively, of which $32,130 and $32,130 were paid to
Dyco. During the three months ended September 30, 1996 and 1995
the 1985-2 Program incurred such expenses totaling $11,753 and
$11,381, respectively, of which $10,068 and $10,068 were paid to
Dyco. During the nine months ended September 30, 1996 and 1995
the 1985-2 Program incurred such expenses totaling $41,993 and
$42,519, 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 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 Programs until
December 6, 1995. During the three months ended September 30,
1995 these sales for the 1985-1 Program totaled $52,305. During
the nine months ended September 30, 1995 these sales for the
1985-1 Program totaled $176,286. At December 31, 1995, accrued
gas sales for the 1985-1 Program included $28,938 due from
Premier. During the three months ended September 30, 1995 these
sales for the 1985-2 Program totaled $16,127. During the nine
months ended September 30, 1995 these sales for the 1985-2
Program totaled $54,295. At December 31, 1995, accrued gas sales
for the 1985-2 Program included $12,336 due from Premier.
-11-
<PAGE>
<PAGE>
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, 1996 AS COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1995.
Three months ended September 30,
--------------------------------
1996 1995
-------- -------
Oil and gas sales $107,842 $79,977
Oil and gas production expenses $ 25,701 $37,899
Barrels produced 107 1,013
Mcf produced 55,644 50,853
Average price/Bbl $ 21.80 $ 17.30
Average price/Mcf $ 1.96 $ 1.23
As shown in the table above, oil and gas sales increased $27,865
(34.8%) for the three months ended September 30, 1996 as compared
to the three months ended September 30, 1995. Of this increase,
$41,682 was related to the increases in the average price of oil
and natural gas sold and $9,390 was related to the increase in
the volumes of natural gas sold, partially offset by a $19,751
decrease related to the decrease in the volumes of oil sold.
Volumes of oil sold decreased by 906 barrels, while volumes of
natural gas sold increased by 4,791 Mcf for the three months
ended September 30, 1996 as compared to the three months ended
September 30, 1995. The decrease in volumes of oil sold resulted
primarily from the sale of one well during the three months ended
September 30, 1995. Average oil and natural gas prices increased
to $21.80 per barrel and $1.96 per Mcf, respectively, for the
three months ended September 30, 1996 from $17.30 per barrel and
-12-
<PAGE>
<PAGE>
$1.23 per Mcf, respectively, for the three months ended September
30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $12,198 for the three
months ended September 30, 1996 as compared to the three months
ended September 31, 1995. This decrease resulted primarily from
(i) the sale of two wells during the three months ended September
30, 1995 and (ii) reduced compression expenses on two other wells
during the three months ended September 30, 1996 as compared to
the three months ended September 30, 1995. As a percentage of
oil and gas sales, these expenses decreased to 23.8% for the
three months ended September 30, 1996 from 47.4% for the three
months ended September 31, 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 September 30, 1996
as compared to the three months ended September 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $8,574 for the three months ended September
30, 1996 as compared to the three months ended September 30,
1995. This decrease was primarily due to (i) an impairment
provision for oil and gas properties recorded during the last
half of 1995 which decreased the amortizable capitalized costs of
the oil and gas properties, (ii) upward revisions of previous
reserve estimates at December 31, 1995, and (iii) the decrease in
volumes of oil sold. As a percentage of oil and gas sales, this
expense decreased to 14.6% for the three months ended September
30, 1996 from 30.4% for the three months ended September 30,
1995. This percentage decrease was primarily due to the decrease
in depreciation, depletion, and amortization of oil and gas
properties due to the upward revisions of reserve estimates and
the impairment provision discussed above and the increases in the
average prices of oil and natural gas sold during the three
months ended September 30, 1996 as compared to the three months
ended September 30, 1995.
As a result of declines in natural gas prices during the three
months ended September 30, 1995 the 1985-1 Program recognized a
non-cash charge against earnings of $45,262 during the three
months ended September 30, 1995. This impairment provision for
oil and gas properties at September 30, 1995 was necessary due to
the unamortized costs of oil and gas properties exceeding the
present value of the estimated future net revenues from the oil
and gas properties. No similar charge was necessary during the
three months ended September 30, 1996.
General and administrative expenses increased $345 for the three
months ended September 30, 1996 as compared to the three months
ended September 30, 1995. This increase was primarily due to an
increase in professional fees during the three months ended
September 30, 1996 as compared to the three months ended
September 30, 1995. As a percentage of oil and gas sales, these
expenses decreased to 11.4% for the three months ended September
30, 1996 from 15.0% for the three months ended September 30,
1995. This percentage decrease was primarily due to the
increases in the average prices of oil and gas sold during the
three months ended September 30, 1996 as compared to the three
months ended September 30, 1995.
-13-
<PAGE>
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1996 AS COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1995.
Nine months ended September 30,
-------------------------------
1996 1995
-------- --------
Oil and gas sales $274,903 $312,626
Oil and gas production expenses $ 75,160 $114,750
Barrels produced 219 4,943
Mcf produced 142,725 169,487
Average price/Bbl $ 21.21 $ 18.88
Average price/Mcf $ 1.92 $ 1.29
As shown in the table above, oil and gas sales decreased $37,723
(12.1%) for the nine months ended September 30, 1996 as compared
to the nine months ended September 30, 1995. Of this decrease,
$151,579 was related to the decreases in the volumes of oil and
natural gas sold, partially offset by a $118,294 increase related
to the increases in the average price of oil and natural gas
sold. Volumes of oil and natural gas sold decreased by 4,724
barrels and 26,762 Mcf, respectively, for the nine months ended
September 30, 1996 as compared to the nine months ended September
30, 1995. The decrease in volumes of oil sold resulted primarily
from the sale of two wells during the nine months ended September
30, 1995. The decrease in the volumes of natural gas sold was
primarily due to normal declines in production due to diminished
natural gas reserves for the nine months ended September 30, 1996
as compared to the nine months ended September 30, 1995,
partially offset by a prior period adjustment made by the
purchaser on one well during the nine months ended September 30,
1995. Average oil and natural gas prices increased to $21.21 per
barrel and $1.92 per Mcf, respectively, for the nine months ended
September 30, 1996 from $18.88 per barrel and $1.29 per
Mcf,respectively, for the nine months ended September 30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $39,590 for the nine
months ended September 30, 1996 as compared to the nine months
ended September 30, 1995. This decrease was primarily due to (i)
the sale of two wells during the nine months ended September 30,
1995, (ii) the abandonment of one well during the nine months
ended September 30, 1995, and (iii) surface repair and
compression expenses incurred on one well during the nine months
ended September 30, 1995. As a percentage of oil and gas sales,
these expenses decreased to 27.3% for the nine months ended
September 30, 1996 from 36.7% for the nine months ended September
30, 1995. This percentage decrease was primarily due to the
increases in the average prices of oil and natural gas sold
during the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $52,771 for the nine months ended September
30, 1996 as compared to the nine months ended September 30, 1995.
This decrease was primarily due to (i) an impairment provision
for oil and gas properties recorded during the last half of 1995
which decreased the amortizable capitalized costs of the oil and
gas properties, (ii) upward revisions of previous reserve
estimates at December 31, 1995, and (iii) the decrease in volumes
-14-
<PAGE>
<PAGE>
of oil and natural gas sold. As a percentage of oil and gas
sales, this expense decreased to 14.3% for the nine months ended
September 30, 1996 from 29.4% for the nine months ended September
30, 1995. This percentage decrease was primarily due to the
decrease in depreciation, depletion, and amortization of oil and
gas properties due to the upward revisions of previous reserve
estimates and the impairment provision discussed above and the
increases in the average prices of oil and natural gas sold
during the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995.
As a result of declines in natural gas prices during the nine
months ended September 30, 1995 the 1985-1 Program recognized a
non-cash charge against earnings of $45,262 during the nine
months ended September 30, 1995. This impairment provision for
oil and gas properties at September 30, 1995 was necessary due to
the unamortized costs of oil and gas properties exceeding the
present value of the estimated future net revenues from the oil
and gas properties. No similar charge was necessary during the
nine months ended September 30, 1996.
General and administrative expenses remained relatively constant
for the nine months ended September 30, 1996 as compared to the
nine months ended September 30, 1995. As a percentage of oil and
gas sales, these expenses increased to 15.8% for the nine months
ended September 30, 1996 from 13.9% for the nine months ended
September 30, 1995. This percentage increase was primarily due
to the decreases in the volumes of oil and natural gas sold
during the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995.
1985-2 PROGRAM
THREE MONTHS ENDED SEPTEMBER 30, 1996 AS COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1995.
Three months ended September 30,
--------------------------------
1996 1995
------- -------
Oil and gas sales $55,749 $78,684
Oil and gas production expenses $26,146 $35,625
Barrels produced 761 2,136
Mcf produced 16,744 38,459
Average price/Bbl $ 22.82 $ 17.31
Average price/Mcf $ 2.29 $ 1.08
As shown in the table above, oil and gas sales decreased $22,935
(29.1%) for the three months ended September 30, 1996 as compared
to the three months ended September 30, 1995. Of this decrease,
$81,105 was related to the decreases in the volumes of oil and
natural gas sold, partially offset by a $58,304 increase related
to the increases in the average prices of oil and natural gas
sold. Volumes of oil and natural gas sold decreased by 1,375
barrels and 21,715 Mcf, respectively, for the three months ended
September 30, 1996 as compared to the three months ended
September 30, 1995. The decrease in volumes of oil sold was
primarily due to (i) the sale of several wells during 1995 and
(ii) normal declines in production from diminished oil reserves
on two wells during the three months ended September 30, 1996 as
compared to the three months ended September 30, 1995. The
-15-
<PAGE>
<PAGE>
decrease in volumes of natural gas sold was primarily due to (i)
downward prior period volume adjustments made by the purchaser on
one well during the three months ended September 30, 1996 and
(ii) a positive prior period adjustment made by the purchaser on
another well during the three months ended September 30, 1995.
Average oil and natural gas prices increased to $22.82 per barrel
and $2.29 per Mcf, respectively, for the three months ended
September 30, 1996 from $17.31 per barrel and $1.08 per Mcf,
respectively, for the three months ended September 30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $9,479 for the three
months ended September 30, 1996 as compared to the three months
ended September 30, 1995. This decrease was primarily due to (i)
the sale of several wells during 1995 and (ii) a decrease in the
volumes of oil and natural gas sold during the three months ended
September 30, 1996 as compared to the three months ended
September 30, 1995. As a percentage of oil and gas sales, these
expenses remained relatively constant at 46.9% for the three
months ended September 30, 1996 as compared to 45.3% for the
three months ended September 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $18,448 for the three months ended September
30, 1996 as compared to the three months ended September 30,
1995. This decrease was primarily due to (i) the sale of several
wells during 1995 which decreased the amortizable capitalized
costs of the oil and gas properties, (ii) upward revisions of
previous reserve estimates at December 31, 1995, and (iii)
decreases in the volumes of oil and natural gas sold. As a
percentage of oil and gas sales, this expense decreased to 7.9%
for the three months ended September 30, 1996 from 29.1% for the
three months ended September 30, 1995. This percentage decrease
was primarily due to the decrease in depreciation, depletion, and
amortization of oil and gas properties due to the upward
revisions of previous reserve estimates discussed above and the
increases in the average prices of oil and natural gas sold
during the three months ended September 30, 1996 as compared to
the three months ended September 30, 1995.
General and administrative expenses increased $372 for the three
months ended September 30, 1996 as compared to the three months
ended September 30, 1995. This increase was primarily due to an
increase in professional fees during the three months ended
September 30, 1996 as compared to the three months ended
September 30, 1995. As a percentage of oil and gas sales, these
expenses increased to 21.1% for the three months ended September
30, 1996 from 14.5% for the three months ended September 30,
1995. This percentage increase was primarily a result of the
decreases in the volumes of oil and natural gas sold during the
three months ended September 30, 1996 as compared to the three
months ended September 30, 1995.
-16-
<PAGE>
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1996 AS COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1995.
Nine months ended September 30,
-------------------------------
1996 1995
-------- --------
Oil and gas sales $160,958 $209,291
Oil and gas production expenses $ 72,182 $ 97,036
Barrels produced 3,005 6,204
Mcf produced 50,863 83,284
Average price/Bbl $ 19.70 $ 17.52
Average price/Mcf $ 2.00 $ 1.21
As shown in the table above, oil and gas sales decreased $48,333
(23.1%) for the nine months ended September 30, 1996 as compared
to the nine months ended September 30, 1995. Of this decrease,
$127,862 was related to the decreases in the volumes of oil and
natural gas sold, partially offset by a $79,319 increase related
to the increases in the average prices of oil and natural gas
sold. Volumes of oil and natural gas sold decreased by 3,199
barrels and 32,421 Mcf, respectively, for the nine months ended
September 30, 1996 as compared to the nine months ended September
30, 1995. The decrease in volumes of oil sold resulted primarily
from (i) the sale of several wells during 1995 and (ii) normal
declines in production from diminished oil reserves during the
nine months ended September 30, 1996 as compared to the nine
months ended September 30, 1995. The decrease in the volumes of
natural gas sold was primarily due to (i) the sale of several
wells during 1995, (ii) normal declines in production due to
diminished natural gas reserves, (iii) downward prior period
volume adjustments made by the purchaser on one well during the
nine months ended September 30, 1996, and (iv) positive prior
period volume adjustments made by the purchaser on another well
during the nine months ended September 30, 1995. Average oil and
natural gas prices increased to $19.70 per barrel and $2.00 per
Mcf, respectively, for the nine months ended September 30, 1996
from $17.52 per barrel and $1.21 per Mcf, respectively, for the
nine months ended September 30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $24,854 for the nine
months ended September 30, 1996 as compared to the nine months
ended September 30, 1995. This decrease was primarily due to (i)
the sale of several wells during 1995 and (ii) a decrease in the
volumes of oil and natural gas sold during the nine months ended
September 30, 1996 as compared to the nine months ended September
30, 1995. As a percentage of oil and gas sales, these expenses
decreased to 44.8% for the nine months ended September 30, 1996
from 46.4% for the nine months ended September 30, 1995. This
percentage decrease was primarily due to the increases in the
average prices of oil and natural gas sold during the nine months
ended September 30, 1996 as compared to the nine months ended
September 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $43,641 for the nine months ended September
30, 1996 as compared to the nine months ended September 30, 1995.
This decrease was primarily due to (i) the sale of several wells
during 1995 which decreased the amortizable capitalized costs of
-17-
<PAGE>
<PAGE>
the oil and gas properties, (ii) upward revisions of previous
reserve estimates at December 31, 1995, and (iii) decreases in
volumes of oil and natural gas sold. As a percentage of oil and
gas sales, this expense decreased to 9.4% for the nine months
ended September 30, 1996 from 28.1% for the nine months ended
September 30, 1995. This percentage decrease was primarily due
to the decrease in depreciation, depletion, and amortization of
oil and gas properties due to the upward revisions of previous
reserve estimates discussed above and the increases in the
average prices of oil and natural gas sold during the nine months
ended September 30, 1996 as compared to the nine months ended
September 30, 1995.
General and administrative expenses remained relatively constant
for the nine months ended September 30, 1996 as compared to the
nine months ended September 30, 1995. As a percentage of oil and
gas sales, these expenses increased to 26.1% for the nine months
ended September 30, 1996 from 20.3% for the nine months ended
September 30, 1995. This percentage increase was primarily due
to the decreases in the volumes of oil and natural gas sold
during the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995.
-18-
<PAGE>
<PAGE>
PART II: OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On October 1, 1996, Drew Phillips resigned as Chief Financial
Officer of Dyco. Mr. Phillips continues to serve as an
accounting officer of affiliates of Dyco.
On October 1, 1996, Patrick M. Hall was elected Chief Financial
Officer of Dyco. Mr. Hall joined affiliates of Dyco
(collectively, the "Samson Companies") in 1983. Prior to joining
the Samson Companies he was a senior accountant with Peat Marwick
Main & Co. in Tulsa. He holds a Bachelor of Science degree in
accounting from Oklahoma State University and is a Certified
Public Accountant. Mr. Hall is also Senior Vice President -
Controller of Samson Investment Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.1 Financial Data Schedule containing summary
financial information extracted from the 1985-1
Program's financial statements as of September 30,
1996 and for the nine months ended September 30,
1996, filed herewith.
27.2 Financial Data Schedule containing summary
financial information extracted from the 1985-2
Program's financial statements as of September 30,
1996 and for the nine months ended September 30,
1996, filed herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K
Current Reports on Form 8-K filed during third quarter of
1996:
Date of event: July 1, 1996
Date filed with SEC: July 8, 1996
Item Included:
Item 5 - Other Events
-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 5, 1996 By: /s/Dennis R. Neill
-------------------------------
(Signature)
Dennis R. Neill
President
Date: November 5, 1996 By: /s/Patrick M. Hall
-------------------------------
(Signature)
Patrick M. Hall
Chief Financial Officer
-20-
<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial
information extracted from the Dyco Oil and Gas Program
1985-1 Limited Partnership's financial statements as of
September 30, 1996 and for the nine months ended September
30, 1996, filed herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the Dyco Oil and Gas Program
1985-2 Limited Partnership's financial statements as of
September 30, 1996 and for the nine months ended September
30, 1996, filed herewith.
All other exhibits are omitted as inapplicable.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751255
<NAME> DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 33,848
<SECURITIES> 0
<RECEIVABLES> 53,636
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 87,484
<PP&E> 20,980,851
<DEPRECIATION> 20,815,548
<TOTAL-ASSETS> 257,528
<CURRENT-LIABILITIES> 5,760
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 223,336
<TOTAL-LIABILITY-AND-EQUITY> 257,528
<SALES> 274,903
<TOTAL-REVENUES> 276,618
<CGS> 0
<TOTAL-COSTS> 157,781
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 118,837
<INCOME-TAX> 0
<INCOME-CONTINUING> 118,837
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 118,837
<EPS-PRIMARY> 28.70
<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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 57,607
<SECURITIES> 0
<RECEIVABLES> 30,978
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 88,585
<PP&E> 22,443,456
<DEPRECIATION> 22,376,484
<TOTAL-ASSETS> 183,894
<CURRENT-LIABILITIES> 6,441
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 167,339
<TOTAL-LIABILITY-AND-EQUITY> 183,894
<SALES> 160,958
<TOTAL-REVENUES> 162,501
<CGS> 0
<TOTAL-COSTS> 129,331
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 33,170
<INCOME-TAX> 0
<INCOME-CONTINUING> 33,170
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,170
<EPS-PRIMARY> 7.58
<EPS-DILUTED> 0
</TABLE>
