<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, 1997 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,
1997 1996
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 31,875 $ 86,724
Accrued oil and gas sales 93,745 95,458
-------- --------
Total current assets $125,620 $182,182
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 148,033 177,707
DEFERRED CHARGE 15,519 15,519
-------- --------
$289,172 $375,408
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 5,089 $ 5,916
-------- --------
Total current liabilities $ 5,089 $ 5,916
ACCRUED LIABILITY 29,702 29,702
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 41 units 2,544 3,398
Limited Partners, issued and
outstanding, 4,100 units 251,837 336,392
-------- --------
Total Partners' capital $254,381 $339,790
-------- --------
$289,172 $375,408
======== ========
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, 1997 AND 1996
(Unaudited)
1997 1996
-------- -------
REVENUES:
Oil and gas sales $113,754 $81,250
Interest 892 271
-------- -------
$114,646 $81,521
COST AND EXPENSES:
Oil and gas production $ 23,147 $22,702
Depreciation, depletion, and
amortization of oil and gas
properties 8,079 10,473
General and administrative (Note 2) 12,922 14,277
-------- -------
$ 44,148 $47,452
-------- -------
NET INCOME $ 70,498 $34,069
======== =======
GENERAL PARTNER (1%) - net
income $ 705 $ 341
======== =======
LIMITED PARTNERS (99%) - net
income $ 69,793 $33,728
======== =======
NET INCOME PER UNIT $ 17.02 $ 8.23
======== =======
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, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
REVENUES:
Oil and gas sales $263,711 $167,061
Interest 1,925 905
-------- --------
$265,636 $167,966
COST AND EXPENSES:
Oil and gas production $ 40,219 $ 49,459
Depreciation, depletion, and
amortization of oil and gas
properties 29,674 23,537
General and administrative (Note 2) 32,692 31,046
-------- --------
$102,585 $104,042
-------- --------
NET INCOME $163,051 $ 63,924
======== ========
GENERAL PARTNER (1%) - net
income $ 1,631 $ 639
======== ========
LIMITED PARTNERS (99%) - net
income $161,420 $ 63,285
======== ========
NET INCOME PER UNIT $ 39.37 $ 15.44
======== ========
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, 1997 AND 1996
(Unaudited)
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $163,051 $63,924
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 29,674 23,537
Decrease in accrued oil and gas
sales 1,713 4,129
Decrease in accounts payable ( 827) ( 4,324)
-------- -------
Net cash provided by operating
activities $193,611 $87,266
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ - $ 907
Additions to oil and gas properties - ( 1,586)
-------- -------
Net cash used by investing
activities $ - ($ 679)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($248,460) ($82,820)
-------- -------
Net cash used by financing
activities ($248,460) ($82,820)
-------- -------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ($ 54,849) $ 3,767
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 86,724 58,496
-------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 31,875 $62,263
======== =======
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,
1997 1996
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 31,243 $ 86,273
Accrued oil and gas sales 31,628 46,545
-------- --------
Total current assets $ 62,871 $132,818
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 64,755 72,216
DEFERRED CHARGE 39,527 39,527
-------- --------
$167,153 $244,561
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 4,437 $ 6,198
-------- --------
Total current liabilities $ 4,437 $ 6,198
ACCRUED LIABILITY 12,899 12,899
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 44 units 1,497 2,254
Limited Partners, issued and
outstanding, 4,330 units 148,320 223,210
-------- --------
Total Partners' capital $149,817 $225,464
-------- --------
$167,153 $244,561
======== ========
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, 1997 AND 1996
(Unaudited)
1997 1996
------- -------
REVENUES:
Oil and gas sales $54,036 $59,585
Interest 89 117
------- -------
$54,125 $59,702
COST AND EXPENSES:
Oil and gas production $19,072 $24,451
Depreciation, depletion, and
amortization of oil and gas
properties 3,280 5,208
General and administrative (Note 2) 12,380 13,836
------- -------
$34,732 $43,495
------- -------
NET INCOME $19,393 $16,207
======= =======
GENERAL PARTNER (1%) - net
income $ 194 $ 162
======= =======
LIMITED PARTNERS (99%) - net
income $19,199 $16,045
======= =======
NET INCOME PER UNIT $ 4.43 $ 3.71
======= =======
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, 1997 AND 1996
(Unaudited)
1997 1996
------- --------
REVENUES:
Oil and gas sales $93,632 $105,209
Interest 940 1,242
------- --------
$94,572 $106,451
COST AND EXPENSES:
Oil and gas production $22,500 $ 46,036
Depreciation, depletion, and
amortization of oil and gas
properties 6,351 10,734
General and administrative (Note 2) 32,018 30,240
------- --------
$60,869 $ 87,010
------- --------
NET INCOME $33,703 $ 19,441
======= ========
GENERAL PARTNER (1%) - net
income $ 337 $ 194
======= ========
LIMITED PARTNERS (99%) - net
income $33,366 $ 19,247
======= ========
NET INCOME PER UNIT $ 7.71 $ 4.44
======= ========
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, 1997 AND 1996
(Unaudited)
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 33,703 $ 19,441
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 6,351 10,734
Decrease in accrued oil and gas
sales 14,917 9,970
Decrease in accounts payable ( 1,761) ( 2,850)
-------- --------
Net cash provided by operating
activities $ 53,210 $ 37,295
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ 1,110 $ 246
Additions to oil and gas properties - ( 7,716)
-------- --------
Net cash provided (used) by
investing activities $ 1,110 ($ 7,470)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($109,350) ($153,090)
-------- --------
Net cash used by financing
activities ($109,350) ($153,090)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 55,030) ($123,265)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 86,273 154,512
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 31,243 $ 31,247
======== ========
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, 1997
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of June 30, 1997, statements of operations
for the three and six months ended June 30, 1997 and 1996, and
statements of cash flows for the six months ended June 30, 1997
and 1996 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, 1997, results of operations for the three and six
months ended June 30, 1997 and 1996 and changes in cash flows for
the six months ended June 30, 1997 and 1996 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, 1996. The results of operations for the
period ended June 30, 1997 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. The Program's calculation
of depreciation, depletion, and amortization includes estimated
future expenditures to be incurred in developing proved reserves
and estimated dismantlement and abandonment costs, net of
estimated salvage values. 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 period 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
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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 June 30, 1997 and 1996 the 1985-1 Program
incurred such expenses totaling $12,922 and $14,277,
respectively, of which $10,710 was paid quarterly to Dyco and its
affiliates. During the six months ended June 30, 1997 and 1996
the 1985-1 Program incurred such expenses totaling $32,692 and
$31,046, respectively, of which $21,420 was paid each period to
Dyco and its affiliates. During the three months ended June 30,
1997 and 1996 the 1985-2 Program incurred such expenses totaling
$12,380 and $13,836, respectively, of which $10,068 was paid
quarterly to Dyco and its affiliates. During the six months
ended June 30, 1997 and 1996 the 1985-2 Program incurred such
expenses totaling $32,018 and $30,240, respectively, of which
$20,136 was paid each period to Dyco and its affiliates.
Affiliates of the Program operate certain of the Programs'
properties. Their policy is to bill the Programs for all
customary charges and cost reimbursements associated with these
activities.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
- -----------------------------------------------
This Quarterly Report contains certain forward-looking
statements. The words "anticipate," "believe," "expect," "plan,"
"intend," "estimate," "project," "could," "may," and similar
expressions are intended to identify forward-looking statements.
Such statements reflect management's current views with respect
to future events and financial performance. This Quarterly
Report also includes certain information, which is, or is based
upon, estimates and assumptions. Such estimates and assumptions
are management's efforts to accurately reflect the condition and
operation of the Programs.
Use of forward-looking statements and estimates and assumptions
involve risks and uncertainties which include, but are not
limited to, the volatility of oil and gas prices, the uncertainty
of reserve information, the operating risk associated with oil
and gas properties (including the risk of personal injury, death,
property damage, damage to the well or producing reservoir,
environmental contamination, and other operating risks), the
prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the
general economic climate, the supply and price of foreign imports
of oil and gas, the level of consumer product demand, and the
price and availability of alternative fuels. Should one or more
of these risks or uncertainties occur or should estimates or
underlying assumptions prove incorrect, actual conditions or
results may vary materially and adversely from those stated,
anticipated, believed, estimated, or otherwise indicated.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net proceeds from the Programs' operations less necessary
operating capital are distributed to investors on a quarterly
basis. The net proceeds from production are not reinvested in
productive assets, except to the extent that producing wells are
improved or where methods are employed to permit more efficient
recovery of the Programs' reserves which would result in a
positive economic impact.
The Programs' available capital from subscriptions has been spent
on oil and gas drilling activities. There should not be any
further material capital resource commitments in the future. The
Programs have no bank debt commitments. Cash for operational
purposes will be provided by current oil and gas production.
RESULTS OF OPERATIONS
- ---------------------
GENERAL DISCUSSION
The following general discussion should be read in conjunction
with the analysis of results of operations provided below. The
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most important variable affecting the Programs' revenues is the
prices received for the sale of oil and gas. Predicting future
prices is very difficult. Substantially all of the Programs' gas
reserves are being sold in the "spot market". Prices on the spot
market are subject to wide seasonal and regional pricing
fluctuations due to the highly competitive nature of the spot
market. In addition, such spot market sales are generally short-
term in nature and are dependent upon the obtaining of
transportation services provided by pipelines. Management is
unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
1985-1 PROGRAM
THREE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1996.
Three months ended June 30,
---------------------------
1997 1996
-------- -------
Oil and gas sales $113,754 $81,250
Oil and gas production expenses $ 23,147 $22,702
Barrels produced - 60
Mcf produced 48,895 35,994
Average price/Bbl $ - $ 22.40
Average price/Mcf $ 2.33 $ 2.22
As shown in the table above, total oil and gas sales increased
$32,504 (40.0%) for the three months ended June 30, 1997 as
compared to the three months ended June 30, 1996. Of this
increase, approximately $29,000 and $5,000, respectively, were
related to increases in volumes and the average price of gas
sold. Volumes of oil sold decreased 60 barrels, while volumes of
gas sold increased 12,901 Mcf for the three months ended June 30,
1997 as compared to the three months ended June 30, 1996. The
increase in volumes of gas sold resulted primarily from negative
prior period volume adjustments made by the purchaser on two
wells during the three months ended June 30, 1996. Average gas
prices increased to $2.33 per Mcf for the three months ended June
30, 1997 from $2.22 per Mcf for the three months ended June 30,
1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) remained relatively constant for
the three months ended June 30, 1997 as compared to the three
months ended June 30, 1996. As a percentage of oil and gas
sales, these expenses decreased to 20.3% for the three months
ended June 30, 1997 from 27.9% for the three months ended June
30, 1996. This percentage decrease was primarily due to the
increase in the average price of gas sold during the three months
ended June 30, 1997 as compared to the three months ended June
30, 1996.
Depreciation, depletion, and amortization of oil and gas
properties decreased $2,394 (22.9%) for the three months ended
June 30, 1997 as compared to the three months ended June 30,
1996. This decrease resulted primarily from upward revisions in
the estimate of remaining gas reserves at December 31, 1996,
partially offset by an increase in volumes of gas sold during the
three months ended June 30, 1997 as compared to the three months
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ended June 30, 1996. As a percentage of oil and gas sales, this
expense decreased to 7.1% for the three months ended June 30,
1997 from 12.9% for the three months ended June 30, 1996. This
percentage decrease was primarily due to the increase in the
average price of gas sold during the three months ended June 30,
1997 as compared to the three months ended June 30, 1996.
General and administrative expenses decreased $1,355 (9.5%) for
the three months ended June 30, 1997 as compared to the three
months ended June 30, 1996. This decrease resulted primarily
from a decrease in professional fees during the three months
ended June 30, 1997 as compared to the three months ended June
30, 1996. As a percentage of oil and gas sales, these expenses
decreased to 11.4% for the three months ended June 30, 1997 from
17.6% for the three months ended June 30, 1996. This percentage
decrease was primarily due to the increase in oil and gas sales
discussed above.
SIX MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1996.
Six months ended June 30,
-------------------------
1997 1996
-------- --------
Oil and gas sales $263,711 $167,061
Oil and gas production expenses $ 40,219 $ 49,459
Barrels produced - 112
Mcf produced 119,520 87,081
Average price/Bbl $ - $ 20.65
Average price/Mcf $ 2.21 $ 1.89
As shown in the table above, total oil and gas sales increased
$96,650 (57.9%) for the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996. Of this
increase, approximately $61,000 and $38,000, respectively, were
related to increases in volumes and the average price of gas
sold, partially offset by a decrease of approximately $2,000
related to the decrease in volumes of oil sold. Volumes of oil
sold decreased 112 barrels, while volumes of gas sold increased
32,439 Mcf for the six months ended June 30, 1997 as compared to
the six months ended June 30, 1996. The decrease in volumes of
oil sold resulted primarily from a negative prior period volume
adjustment made by the purchaser on one well during the six
months ended June 30, 1997. The increase in volumes of gas sold
resulted primarily from positive prior period volume adjustments
made by the purchaser on three wells during the six months ended
June 30, 1997. Average gas prices increased to $2.21 per Mcf for
the six months ended June 30, 1997 from $1.89 per Mcf for the six
months ended June 30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $9,240 (18.7%) for the
six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. This decrease resulted primarily from
credits received from the operators on two wells during the six
months ended June 30, 1997 for prior period lease operating
expenses, partially offset by an increase in volumes of gas sold
during the six months ended June 30, 1997 as compared to the six
months ended June 30, 1996. As a percentage of oil and gas
sales, these expenses decreased to 15.3% for the six months ended
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June 30, 1997 from 29.6% for the six months ended June 30, 1996.
This percentage decrease was primarily due to the dollar decrease
in production expenses discussed above and the increase in the
average price of gas sold during the six months ended June 30,
1997 as compared to the six months ended June 30, 1996.
Depreciation, depletion, and amortization of oil and gas
properties increased $6,137 (26.1%) for the six months ended June
30, 1997 as compared to the six months ended June 30, 1996. This
increase resulted primarily from an increase in volumes of gas
sold during the six months ended June 30, 1997 as compared to the
six months ended June 30, 1996. As a percentage of oil and gas
sales, this expense decreased to 11.3% for the six months ended
June 30, 1997 from 14.1% for the six months ended June 30, 1996.
This percentage decrease was primarily due to the increase in the
average price of gas sold during the six months ended June 30,
1997 as compared to the six months ended June 30, 1996.
General and administrative expenses increased $1,646 (5.3%) for
the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. This increase resulted primarily from an
increase in professional fees and miscellaneous expenses during
the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. As a percentage of oil and gas sales, these
expenses decreased to 12.4% for the six months ended June 30,
1997 from 18.6% for the six months ended June 30, 1996. This
percentage decrease was primarily due to the increase in oil and
gas sales discussed above.
1985-2 PROGRAM
THREE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 1996.
Three months ended June 30,
---------------------------
1997 1996
------- -------
Oil and gas sales $54,036 $59,586
Oil and gas production expenses $19,072 $24,451
Barrels produced 1,556 1,156
Mcf produced 15,417 16,882
Average price/Bbl $ 11.58 $ 19.49
Average price/Mcf $ 2.34 $ 2.20
As shown in the table above, total oil and gas sales decreased
$5,550 (9.3%) for the three months ended June 30, 1997 as
compared to the three months ended June 30, 1996. Of this
decrease, approximately $12,000 was related to the decrease in
the average price of oil sold and approximately $3,000 was
related to a decrease in volumes of gas sold, partially offset by
an increase of approximately $8,000 related to an increase in
volumes of oil sold and an increase of approximately $2,000
related to the increase in the average price of gas sold.
Volumes of oil sold increased 400 barrels, while volumes of gas
sold decreased 1,465 Mcf for the three months ended June 30, 1997
as compared to the three months ended June 30, 1996. The
increase in volumes of oil sold resulted primarily from positive
prior period volume adjustments made by the purchaser on two
wells during the three months ended June 30, 1997. Average oil
prices decreased to $11.58 per barrel for the three months ended
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June 30, 1997 from $19.49 per barrel for the three months ended
June 30, 1996. The lower than average oil price is due to a
prior period price adjustment made by the purchaser related to
one well during the three months ended June 30, 1997. Average
gas prices increased to $2.34 per Mcf for the three months ended
June 30, 1997 from $2.20 per Mcf for the three months ended June
30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $5,379 (22.0%) for the
three months ended June 30, 1997 as compared to the three months
ended June 30, 1996. This decrease resulted primarily from (i)
the sale of one well during the three months ended June 30, 1996,
(ii) a positive prior period adjustment made by the operator for
general operating expenses on one well during the three months
ended June 30, 1996, (iii) recompletion expenses incurred on one
well during the three months ended June 30, 1996 in order to
improve the recovery of reserves, and (iv) a decrease in general
repair and maintenance expenses incurred on two wells during the
three months ended June 30, 1997 as compared to the three months
ended June 30, 1996. As a percentage of oil and gas sales, these
expenses decreased to 35.3% for the three months ended June 30,
1997 from 41.0% for the three months ended June 30, 1996. This
percentage decrease was primarily due to the increase in the
average price of gas sold during the three months ended June 30,
1997 as compared to the three months ended June 30, 1996.
Depreciation, depletion, and amortization of oil and gas
properties decreased $1,928 (37.0%) for the three months ended
June 30, 1997 as compared to the three months ended June 30,
1996. This decrease resulted primarily from upward revisions in
the estimates of remaining oil and gas reserves at December 31,
1996. As a percentage of oil and gas sales, this expense
decreased to 6.1% for the three months ended June 30, 1997 from
8.7% for the three months ended June 30, 1996. This percentage
decrease was primarily due to the increase in the average price
of gas sold during the three months ended June 30, 1997 as
compared to the three months ended June 30, 1996.
General and administrative expenses decreased $1,456 (10.5%) for
the three months ended June 30, 1997 as compared to the three
months ended June 30, 1996. This decrease resulted primarily
from a decrease in professional fees during the three months
ended June 30, 1997 as compared to the three months ended June
30, 1996. As a percentage of oil and gas sales, these expenses
remained relatively constant at 22.9% for the three months ended
June 30, 1997 and 23.2% the three months ended June 30, 1996.
SIX MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1996.
Six months ended June 30,
-------------------------
1997 1996
------- --------
Oil and gas sales $93,632 $105,209
Oil and gas production expenses $22,500 $ 46,036
Barrels produced 1,697 2,244
Mcf produced 32,617 34,119
Average price/Bbl $ 12.24 $ 18.64
Average price/Mcf $ 2.23 $ 1.86
-16-
<PAGE>
<PAGE>
As shown in the table above, total oil and gas sales decreased
$11,577 (11.0%) for the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996. Of this
decrease, approximately $10,000 and $3,000, respectively, were
related to decreases in volumes of oil and gas sold and
approximately $11,000 was related to the decrease in the average
price of oil sold, partially offset by an increase of
approximately $12,000, related to the increase in the average
price of gas sold. Volumes of oil and gas sold decreased 547
barrels and 1,502 Mcf, respectively, for the six months ended
June 30, 1997 as compared to the six months ended June 30, 1996.
The decrease in volumes of oil sold resulted primarily from (i) a
negative prior period volume adjustment made by the purchaser on
one well during the six months ended June 30, 1997 and (ii) a
normal decline in production due to diminished oil reserves on
another well. Average oil prices decreased to $12.24 per barrel
for the six months ended June 30, 1997 from $18.64 per barrel for
the six months ended June 30, 1996. The lower than average oil
price is due to a prior period price adjustment made by the
purchaser related to one well during the six months ended June
30, 1997. Average gas prices increased to $2.23 per Mcf for the
six months ended June 30, 1997 from $1.86 per Mcf for the six
months ended June 30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $23,536 (51.1%) for the
six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. This decrease resulted primarily from (i)
the sale of one well during the six months ended June 30, 1996,
(ii) credits received from the operator on one well during the
six months ended June 30, 1997 for prior period operating
expenses, (iii) a positive prior period adjustment made by the
operator for general operating expenses on one well during the
six months ended June 30, 1996, (iv) recompletion expenses
incurred on one well during the six months ended June 30, 1996 in
order to improve the recovery of reserves, and (v) a decrease in
the general repair and maintenance expenses incurred on one well
during the six months ended June 30, 1997 as compared to the six
months ended June 30, 1996. As a percentage of oil and gas
sales, these expenses decreased to 24.0% for the six months ended
June 30, 1997 from 43.8% for the six months ended June 30, 1996.
This percentage decrease was primarily due to the dollar decrease
in production expenses discussed above and the increase in the
average price of gas sold during the six months ended June 30,
1997 as compared to the six months ended June 30, 1996.
Depreciation, depletion, and amortization of oil and gas
properties decreased $4,383 (40.8%) for the six months ended June
30, 1997 as compared to the six months ended June 30, 1996. This
decrease resulted primarily from (i) a decrease in volumes of gas
sold during the six months ended June 30, 1997 as compared to the
six months ended June 30, 1996 and (ii) upward revisions in the
estimates of remaining oil and gas reserves at December 31, 1996.
As a percentage of oil and gas sales, this expense decreased to
6.8% for the six months ended June 30, 1997 from 16.3% for the
six months ended June 30, 1996. This percentage decrease was
primarily due to the increase in the average price of gas sold
during the six months ended June 30, 1997 as compared to the six
months ended June 30, 1996.
General and administrative expenses increased $1,778 (5.9%) for
-17-
<PAGE>
<PAGE>
the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. This increase resulted primarily from an
increase in professional fees and miscellaneous expenses during
the six months ended June 30, 1997 as compared to the six months
ended June 30, 1996. As a percentage of oil and gas sales, these
expenses increased to 34.2% for the six months ended June 30,
1997 from 28.7% for the six months ended June 30, 1996. This
percentage increase was primarily due to the decrease in oil and
gas sales discussed above.
-18-
<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, 1997
and for the six months ended June 30, 1997, filed
herewith.
27.2 Financial Data Schedule containing summary
financial information extracted from the 1985-2
Program's financial statements as of June 30, 1997
and for the six months ended June 30, 1997, filed
herewith.
All other exhibits are omitted as inapplicable.
(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: August 12, 1997 By: /s/Dennis R. Neill
-------------------------------
(Signature)
Dennis R. Neill
President
Date: August 12, 1997 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 June
30, 1997 and for the six months ended June 30, 1997, 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, 1997 and for the six months ended June 30, 1997, filed
herewith.
All other exhibits are omitted as inapplicable.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751255
<NAME> DYCO OIL & GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 31,875
<SECURITIES> 0
<RECEIVABLES> 93,745
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 125,620
<PP&E> 20,981,357
<DEPRECIATION> 20,833,324
<TOTAL-ASSETS> 289,172
<CURRENT-LIABILITIES> 5,089
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 254,381
<TOTAL-LIABILITY-AND-EQUITY> 289,172
<SALES> 263,711
<TOTAL-REVENUES> 265,636
<CGS> 0
<TOTAL-COSTS> 102,585
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 163,051
<INCOME-TAX> 0
<INCOME-CONTINUING> 163,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 163,051
<EPS-PRIMARY> 39.37
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751256
<NAME> DYCO OIL & GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 31,243
<SECURITIES> 0
<RECEIVABLES> 31,628
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 62,871
<PP&E> 22,442,345
<DEPRECIATION> 22,377,590
<TOTAL-ASSETS> 167,153
<CURRENT-LIABILITIES> 4,437
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 149,817
<TOTAL-LIABILITY-AND-EQUITY> 167,153
<SALES> 93,632
<TOTAL-REVENUES> 94,572
<CGS> 0
<TOTAL-COSTS> 60,869
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 33,703
<INCOME-TAX> 0
<INCOME-CONTINUING> 33,703
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,703
<EPS-PRIMARY> 7.71
<EPS-DILUTED> 0
</TABLE>
