<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended Commission File Number
June 30, 1996 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
---- -----
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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
June 30, December 31,
1996 1995
-------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 62,263 $ 58,496
Accrued oil and gas sales, including
$28,938 due from related parties
in 1995 (Note 2) 58,093 62,222
-------- --------
Total current assets $120,356 $120,718
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 180,912 203,770
DEFERRED CHARGE 4,741 4,741
-------- --------
$306,009 $329,229
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 5,629 $ 9,953
-------- --------
Total current liabilities $ 5,629 $ 9,953
ACCRUED LIABILITY 28,432 28,432
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 41 units 2,719 2,908
Limited Partners, issued and
outstanding 4,100 units 269,229 287,936
-------- --------
Total Partners' capital $271,948 $290,844
-------- --------
$306,009 $329,229
======== ========
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 JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
-------- --------
REVENUES:
Oil and gas sales, including
$64,273 of sales to related
parties in 1995 (Note 2) $81,250 $122,488
Interest 271 720
------- --------
$81,521 $123,208
COST AND EXPENSES:
Oil and gas production $22,702 $ 33,521
Depreciation, depletion, and
amortization of oil and gas
properties 10,473 36,819
General and administrative (Note 2) 14,277 15,106
------- --------
$47,452 $ 85,446
------- --------
NET INCOME $34,069 $ 37,762
======= ========
GENERAL PARTNER (1%) - net
income $ 341 $ 378
======= ========
LIMITED PARTNERS (99%) - net
income $33,728 $ 37,384
======= ========
NET INCOME PER UNIT $ 8 $ 9
======= ========
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 SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
------- --------
REVENUES:
Oil and gas sales, including
$123,981 of sales to related
parties in 1995 (Note 2) $167,061 $232,649
Interest 905 1,197
-------- --------
$167,966 $233,846
COST AND EXPENSES:
Oil and gas production $ 49,459 $ 76,851
Depreciation, depletion, and
amortization of oil and gas
properties 23,537 67,734
General and administrative (Note 2) 31,046 31,491
-------- --------
$104,042 $176,076
-------- --------
NET INCOME $ 63,924 $ 57,770
======== ========
GENERAL PARTNER (1%) - net
income $ 639 $ 578
======== ========
LIMITED PARTNERS (99%) - net
income $ 63,285 $ 57,192
======== ========
NET INCOME PER UNIT $ 15 $ 14
======== ========
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 SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $63,924 $57,770
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 23,537 67,734
Decrease (increase) in accrued oil
and gas sales 4,129 ( 55,492)
Decrease in accounts payable ( 4,324) ( 73)
------- -------
Net cash provided by operating
activities $87,266 $69,939
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties ($ 1,586) ($27,368)
Retirements of oil and gas
properties 907 -
------- -------
Net cash used by investing
activities ($ 679) ($27,368)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($82,820) $ -
------- -------
Net cash used by financing
activities ($82,820) $ -
------- -------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 3,767 $42,571
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 58,496 39,697
------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $62,263 $82,268
======= =======
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
June 30, December 31,
1996 1995
-------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 31,247 $154,512
Accrued oil and gas sales, including
$12,336 due from related parties
in 1995 (Note 2) 31,519 41,489
-------- --------
Total current assets $ 62,766 $196,001
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 78,796 82,060
DEFERRED CHARGE 28,337 28,337
-------- --------
$169,899 $306,398
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 6,175 $ 9,025
-------- --------
Total current liabilities $ 6,175 $ 9,025
ACCRUED LIABILITY 10,114 10,114
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 44 units 1,535 2,872
Limited Partners, issued and
outstanding 4,330 units 152,075 284,387
-------- --------
Total Partners' capital $153,610 $287,259
-------- --------
$169,899 $306,398
======== ========
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 JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
-------- --------
REVENUES:
Oil and gas sales, including
$21,391 of sales to related
parties in 1995 (Note 2) $59,585 $62,851
Interest 117 49
------- -------
$59,702 $62,900
COST AND EXPENSES:
Oil and gas production $24,451 $27,823
Depreciation, depletion, and
amortization of oil and gas
properties 5,208 16,902
General and administrative (Note 2) 13,836 14,693
------- -------
$43,495 $59,418
------- -------
NET INCOME $16,207 $ 3,482
======= =======
GENERAL PARTNER (1%) - net
income $ 162 $ 35
======= =======
LIMITED PARTNERS (99%) - net
income $16,045 $ 3,447
======= =======
NET INCOME PER UNIT $ 4 $ 1
======= =======
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 SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
--------- ---------
REVENUES:
Oil and gas sales, including
$38,168 of sales to related
parties in 1995 (Note 2) $105,209 $130,607
Interest 1,242 59
-------- --------
$106,451 $130,666
COST AND EXPENSES:
Oil and gas production $ 46,036 $ 61,411
Depreciation, depletion, and
amortization of oil and gas
properties 10,734 35,927
General and administrative (Note 2) 30,240 31,138
-------- --------
$ 87,010 $128,476
-------- --------
NET INCOME $ 19,441 $ 2,190
======== ========
GENERAL PARTNER (1%) - net
income $ 194 $ 22
======== ========
LIMITED PARTNERS (99%) - net
income $ 19,247 $ 2,168
======== ========
NET INCOME PER UNIT $ 4 $ 1
======== ========
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 CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 19,441 $ 2,190
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 10,734 35,927
Increase in accounts receivable -
related party - ( 15,345)
Decrease (increase) in accrued oil
and gas sales 9,970 ( 36)
Decrease in accounts payable ( 2,850) ( 1,140)
-------- -------
Net cash provided by operating
activities $ 37,295 $21,596
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties ($ 7,716) $ -
Retirements of oil and gas
properties 246 4,926
-------- -------
Net cash provided (used) by
investing activities ($ 7,470) $ 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 ($123,265) $26,522
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 154,512 5,733
-------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 31,247 $32,255
======== =======
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
JUNE 30, 1996
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of June 30, 1996, statements of operations
for the three and six months ended June 30, 1996 and 1995, and
statements of cash flows for the six months ended June 30, 1996
and 1995 have been prepared by Dyco Petroleum Corporation
("Dyco"), the General Partner of the Dyco Oil and Gas Program
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 June 30, 1996, results of operations for the three and six
months ended June 30, 1996 and 1995 and changes in cash flows for
the six months ended June 30, 1996 and 1995 have been made.
Information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto
included in the Programs' Annual Report on Form 10-K for the
year ended December 31, 1995. The results of operations for the
period ended June 30, 1996 are not necessarily indicative of the
results to be expected for the full year.
The limited partners' net income or loss per unit is based upon
each $5,000 initial capital contribution.
OIL AND GAS PROPERTIES
----------------------
Oil and gas operations are accounted for using the full cost
method of accounting. All productive and non-productive costs
associated with the acquisition, exploration and development of
oil and gas reserves are capitalized. In the event the
unamortized cost of oil and gas properties being amortized
exceeds the full cost ceiling (as defined by the Securities and
Exchange Commission), the excess is charged to expense in the
period during which such excess occurs. Sales and abandonments
of properties are accounted for as adjustments of capitalized
costs with no gain or loss recognized, unless such adjustments
would significantly alter the relationship between capitalized
costs and proved oil and gas reserves.
The provision for depreciation, depletion, and amortization of
oil and gas properties is calculated by dividing the oil and gas
sales dollars during the year by the estimated future gross
income from the oil and gas properties and applying the resulting
rate to the net remaining costs of oil and gas properties that
have been capitalized, plus estimated future development costs.
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2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
Under the terms of 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 June 30, 1996 and 1995 the 1985-1 Program
incurred such expenses totaling $14,277 and $15,106,
respectively, of which $10,710 and $10,710 were paid to Dyco.
During the six months ended June 30, 1996 and 1995 the 1985-1
Program incurred such expenses totaling $31,046 and $31,491,
respectively, of which $21,420 and $21,420 were paid to Dyco.
During the three months ended June 30, 1996 and 1995 the 1985-2
Program incurred such expenses totaling $13,836 and $14,693,
respectively, of which $10,068 and $10,068 were paid to Dyco.
During the six months ended June 30, 1996 and 1995 the 1985-2
Program incurred such expenses totaling $30,240 and $31,138,
respectively, of which $20,136 and $20,136 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 June 30, 1995
these sales for the 1985-1 Program totaled $64,273. During the
six months ended June 30, 1995 these sales for the 1985-1 Program
totaled $123,981. At December 31, 1995, accrued oil and gas
sales for the 1985-1 Program included $28,938 due from Premier.
During the three months ended June 30, 1995 these sales for the
1985-2 Program totaled $21,391. During the six months ended June
30, 1995 these sales for the 1985-2 Program totaled $38,168. At
December 31, 1995, accrued oil and gas sales for the 1985-2
Program included $12,336 due from Premier.
-11-
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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 JUNE 30, 1996 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1995.
Three months ended June 30,
---------------------------
1996 1995
------- --------
Oil and gas sales $81,250 $122,488
Oil and gas production expenses $22,702 $ 33,521
Barrels produced 60 1,751
Mcf produced 35,994 67,099
Average price/Bbl $ 22.40 $ 20.07
Average price/Mcf $ 2.22 $ 1.30
As shown in the table above, oil and gas sales decreased $41,238
(33.7%) for the three months ended June 30, 1996 as compared to
the three months ended June 30, 1995. Of this decrease, $106,931
was related to the decreases in the volumes of oil and natural
gas sold, partially offset by a $61,731 increase related to the
increase in the average price of natural gas sold. Volumes of
oil and natural gas sold decreased 1,691 barrels and 31,105 Mcf,
respectively, for the three months ended June 30, 1996 as
compared to the three months ended June 30, 1995. The decrease
in volumes of oil sold was primarily due to the sale of two of
the 1985-1 Program's significant oil producing wells. The
decrease in volumes of natural gas sold was due to (i) normal
declines in production due to diminished natural gas reserves on
one well and (ii) a gas balancing adjustment made by the operator
on one significant well for the three months ended June 30, 1996.
Average oil and natural gas prices increased to $22.40 per barrel
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and $2.22 per Mcf, respectively, for the three months ended June
30, 1996 from $20.07 per barrel and $1.30 per Mcf, respectively,
for the three months ended June 30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $10,819 for the three
months ended June 30, 1996 as compared to the three months ended
June 30, 1995. This decrease was primarily due to the sale of
two of the 1985-1 Program's wells. As a percentage of oil and
gas sales, these expenses remained relatively constant at 27.9%
for the three months ended June 30, 1996 as compared to 27.4% for
the three months ended June 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $26,346 for the three months ended June 30,
1996 as compared to the three months ended June 30, 1995. This
decrease was primarily due to (i) a valuation allowance 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
and natural gas sold. As a percentage of oil and gas sales, this
expense decreased to 12.9% for the three months ended June 30,
1996 from 30.1% for the three months ended June 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 valuation allowance as discussed above and the increases in
the average prices of oil and natural gas sold during the three
months ended June 30, 1996 as compared to the three months ended
June 30, 1995.
General and administrative expenses remained relatively constant
for the three months ended June 30, 1996 as compared to the three
months ended June 30, 1995. As a percentage of oil and gas
sales, these expenses increased to 17.6% for the three months
ended June 30, 1996 from 12.3% for the three months ended June
30, 1995. This percentage increase was primarily due to the
decreases in the volumes of oil and natural gas sold during the
three months ended June 30, 1996 as compared to the three months
ended June 30, 1995.
SIX MONTHS ENDED JUNE 30, 1996 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1995.
Six months ended June 30,
---------------------------
1996 1995
-------- --------
Oil and gas sales $167,061 $232,649
Oil and gas production expenses $ 49,459 $ 76,851
Barrels produced 112 3,930
Mcf produced 87,081 118,634
Average price/Bbl $ 20.65 $ 19.28
Average price/Mcf $ 1.89 $ 1.32
As shown in the table above, oil and gas sales decreased $65,588
(28.2%) for the six months ended June 30, 1996 as compared to the
six months ended June 30, 1995. Of this decrease, $138,477 was
related to the decreases in the volumes of oil and natural gas
sold, partially offset by a $67,621 increase related to the
increase in the average price of natural gas sold. Volumes of
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oil and natural gas sold decreased 3,818 barrels and 31,553 Mcf,
respectively, for the six months ended June 30, 1996 as compared
to the six months ended June 30, 1995. The decrease in volumes
of oil sold was primarily due to the sale of two of the 1985-1
Program's wells. The decrease in the volumes of natural gas sold
was due to (i) normal declines in production due to diminished
natural gas reserves and (ii) a gas balancing adjustment made by
the operator on one significant well for the six months ended
June 30, 1996. Average oil and natural gas prices increased to
$20.65 per barrel and $1.89 per Mcf, respectively, for the six
months ended June 30, 1996 from $19.28 per barrel and $1.32 per
Mcf, respectively, for the six months ended June 30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $27,392 for the six
months ended June 30, 1996 as compared to the six months ended
June 30, 1995. This decrease was primarily due to the sale of
two of the 1985-1 Program's wells. As a percentage of oil and
gas sales, these expenses decreased to 29.6% for the six months
ended June 30, 1996 from 33.0% for the six months ended June 30,
1995. This percentage decrease was primarily due to the
increases in the average prices of oil and natural gas sold
during the six months ended June 30, 1996 as compared to the six
months ended June 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $44,197 for the six months ended June 30,
1996 as compared to the six months ended June 30, 1995. This
decrease was primarily due to (i) a valuation allowance 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
and natural gas sold. As a percentage of oil and gas sales, this
expense decreased to 14.1% for the six months ended June 30, 1996
from 29.1% for the six months ended June 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 valuation allowance as discussed above and the increases in
the average prices of oil and natural gas sold during the six
months ended June 30, 1996 as compared to the six months ended
June 30, 1995.
General and administrative expenses remained relatively constant
for the six months ended June 30, 1996 as compared to the six
months ended June 30, 1995. As a percentage of oil and gas
sales, these expenses increased to 18.6% for the six months ended
June 30, 1996 from 13.5% for the six months ended June 30, 1995.
This percentage increase was primarily due to the decreases in
the volumes of oil and natural gas sold during the six months
ended June 30, 1996 as compared to the six months ended June 30,
1995.
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1985-2 PROGRAM
THREE MONTHS ENDED JUNE 30, 1996 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1995.
Three months ended June 30,
---------------------------
1996 1995
------- -------
Oil and gas sales $59,586 $62,851
Oil and gas production expenses $24,451 $27,823
Barrels produced 1,156 1,638
Mcf produced 16,882 24,628
Average price/Bbl $ 19.49 $ 18.07
Average price/Mcf $ 2.20 $ 1.35
As shown in the table above, oil and gas sales decreased $3,265
(5.2%) for the three months ended June 30, 1996 as compared to
the three months ended June 30, 1995. Of this decrease, $26,435
was related to the decreases in the volumes of oil and natural
gas sold, partially offset by a $23,260 increase related to the
increases in the average prices of oil and natural gas sold.
Volumes of oil and natural gas sold decreased 482 barrels and
7,746 Mcf, respectively, for the three months ended June 30, 1996
as compared to the three months ended June 30, 1995. The
decrease in volumes of oil sold was primarily due to the sale of
several of the 1985-2 Program's wells. The 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 June 30, 1996, and (ii) a positive
prior period adjustment made by the purchaser on another well
during the three months ended June 30, 1995. Average oil and
natural gas prices increased to $19.49 per barrel and $2.20 per
Mcf, respectively, for the three months ended June 30, 1996 from
$18.07 per barrel and $1.35 per Mcf, respectively, for the three
months ended June 30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $3,372 for the three
months ended June 30, 1996 as compared to the three months ended
June 30, 1995. This decrease was primarily due to the sale of
several of the 1985-2 Program's wells. As a percentage of oil
and gas sales, these expenses decreased to 41.0% for the three
months ended June 30, 1996 from 44.3% for the three months ended
June 30, 1995. This percentage decrease was primarily due to the
increases in the average prices of oil and natural gas sold
during the three months ended June 30, 1996 as compared to the
three months ended June 30, 1995.
Depreciation, depletion, and amortization of oil and gas
properties decreased $11,694 for the three months ended June 30,
1996 as compared to the three months ended June 30, 1995. This
decrease was primarily due to (i) the sale of several of the
1985-2 Program's wells 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 the volumes of oil and natural gas sold.
As a percentage of oil and gas sales, this expense decreased to
8.7% for the three months ended June 30, 1996 from 26.9% for the
three months ended June 30, 1995. This percentage decrease was
primarily due to the decrease in depreciation, depletion, and
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amortization of oil and gas properties due to the upward
revisions of reserve estimates and the increases in the average
prices of oil and natural gas sold during the three months ended
June 30, 1996 as compared to the three months ended June 30,
1995.
General and administrative expenses remained relatively constant
for the three months ended June 30, 1996 as compared to the three
months ended June 30, 1995. As a percentage of oil and gas
sales, these expenses remained relatively constant at 23.2% for
the three months ended June 30, 1996 as compared to 23.4% for the
three months ended June 30, 1995.
SIX MONTHS ENDED JUNE 30, 1996 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1995.
Six months ended June 30,
---------------------------
1996 1995
-------- --------
Oil and gas sales $105,209 $130,607
Oil and gas production expenses $ 46,036 $ 61,411
Barrels produced 2,244 4,068
Mcf produced 34,119 44,825
Average price/Bbl $ 18.64 $ 17.64
Average price/Mcf $ 1.86 $ 1.31
As shown in the table above, oil and gas sales decreased $25,398
(19.4%) for the six months ended June 30, 1996 as compared to the
six months ended June 30, 1995. Of this decrease, $53,912 was
related to the decreases in the volumes of oil and natural gas
sold, partially offset by a $28,722 increase related to the
increases in the average prices of oil and natural gas sold.
Volumes of oil and natural gas sold decreased by 1,824 barrels
and 10,706 Mcf, respectively, for the six months ended June 30,
1996 as compared to the six months ended June 30, 1995. The
decrease in volumes of oil sold was primarily due to the sale of
several of the 1985-2 Program's wells. The 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 six months ended June 30, 1996, and (ii) positive
prior period volume adjustments made by the purchaser on another
well during the six months ended June 30, 1995. Average oil and
natural gas prices increased to $18.64 per barrel and $1.86 per
Mcf, respectively, for the six months ended June 30, 1996 from
$17.64 per barrel and $1.31 per Mcf, respectively, for the six
months ended June 30, 1995.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $15,375 for the six
months ended June 30, 1996 as compared to the six months ended
June 30, 1995. This decrease was primarily due to the sale of
several of the 1985-2 Program s wells. As a percentage of oil
and gas sales, these expenses decreased to 43.8% for the six
months ended June 30, 1996 from 47.0% for the six months ended
June 30, 1995. This percentage decrease was primarily due to the
increases in the average prices of oil and natural gas sold
during the six months ended June 30, 1996 as compared to the six
months ended June 30, 1995.
-16-
<PAGE>
<PAGE>
Depreciation, depletion, and amortization of oil and gas
properties decreased $25,193 for the six months ended June 30,
1996 as compared to the six months ended June 30, 1995. This
decrease was primarily due to (i) the sale of several of the
1985-2 Program's wells 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 the volumes of oil and natural gas sold.
As a percentage of oil and gas sales, this expense decreased to
10.2% for the six months ended June 30, 1996 from 27.5% for the
six months ended June 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 reserve
revisions and the increases in the average prices of oil and
natural gas sold during the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995.
General and administrative expenses remained relatively constant
for the six months ended June 30, 1996 as compared to the six
months ended June 30, 1995. As a percentage of oil and gas
sales, these expenses increased to 28.7% for the six months ended
June 30, 1996 from 23.8% for the six months ended June 30, 1995.
This percentage increase was primarily due to the decreases in
the volumes of oil and natural gas sold during the six months
ended June 30, 1996 as compared to the six months ended June 30,
1995.
-17-
<PAGE>
<PAGE>
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.1 Financial Data Schedule containing summary
financial information extracted from the 1985-1
Program's financial statements as of June 30, 1996
and for the six months ended June 30, 1996, filed
herewith.
27.2 Financial Data Schedule containing summary
financial information extracted from the 1985-2
Program's financial statements as of June 30, 1996
and for the six months ended June 30, 1996, filed
herewith.
(b) Reports on Form 8-K
None
-18-
<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: August 7, 1996 By: /s/Dennis R. Neill
-----------------------------------
(Signature)
Dennis R. Neill
President
Date: August 7, 1996 By: /s/Drew S. Phillips
-----------------------------------
(Signature)
Drew S. Phillips
Chief Financial Officer
-19-
<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 June
30, 1996 and for the six months ended June 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 June
30, 1996 and for the six months ended June 30, 1996, filed
herewith.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751255
<NAME> DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 62,263
<SECURITIES> 0
<RECEIVABLES> 58,093
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 120,356
<PP&E> 20,980,730
<DEPRECIATION> 20,799,818
<TOTAL-ASSETS> 306,009
<CURRENT-LIABILITIES> 5,629
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 271,948
<TOTAL-LIABILITY-AND-EQUITY> 306,009
<SALES> 167,061
<TOTAL-REVENUES> 167,966
<CGS> 0
<TOTAL-COSTS> 104,042
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 63,924
<INCOME-TAX> 0
<INCOME-CONTINUING> 63,924
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,924
<EPS-PRIMARY> 15
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 31,247
<SECURITIES> 0
<RECEIVABLES> 31,519
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 62,766
<PP&E> 22,450,858
<DEPRECIATION> 22,372,062
<TOTAL-ASSETS> 169,899
<CURRENT-LIABILITIES> 6,175
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 153,610
<TOTAL-LIABILITY-AND-EQUITY> 169,899
<SALES> 105,209
<TOTAL-REVENUES> 106,451
<CGS> 0
<TOTAL-COSTS> 87,010
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 19,441
<INCOME-TAX> 0
<INCOME-CONTINUING> 19,441
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,441
<EPS-PRIMARY> 4
<EPS-DILUTED> 0
</TABLE>
