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, 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
September 30, December 31,
1997 1996
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 81,334 $ 86,724
Accrued oil and gas sales 86,250 95,458
-------- --------
Total current assets $167,584 $182,182
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 141,612 177,707
DEFERRED CHARGE 15,519 15,519
-------- --------
$324,715 $375,408
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 5,464 $ 5,916
-------- --------
Total current liabilities $ 5,464 $ 5,916
ACCRUED LIABILITY 29,702 29,702
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 41 units 2,895 3,398
Limited Partners, issued and
outstanding, 4,100 units 286,654 336,392
-------- --------
Total Partners' capital $289,549 $339,790
-------- --------
$324,715 $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 SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
REVENUES:
Oil and gas sales $79,616 $107,842
Interest 577 810
------- --------
$80,193 $108,652
COST AND EXPENSES:
Oil and gas production $26,641 $ 25,701
Depreciation, depletion, and
amortization of oil and gas
properties 5,486 15,730
General and administrative (Note 2) 12,898 12,308
------- --------
$45,025 $ 53,739
------- --------
NET INCOME $35,168 $ 54,913
======= ========
GENERAL PARTNER (1%) - net
income $ 352 $ 549
======= ========
LIMITED PARTNERS (99%) - net
income $34,816 $ 54,364
======= ========
NET INCOME PER UNIT $ 8.49 $ 13.26
======= ========
UNITS OUTSTANDING 4,141 4,141
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
REVENUES:
Oil and gas sales $343,327 $274,903
Interest 2,502 1,715
-------- --------
$345,829 $276,618
COST AND EXPENSES:
Oil and gas production $ 66,860 $ 75,160
Depreciation, depletion, and
amortization of oil and gas
properties 35,160 39,267
General and administrative (Note 2) 45,590 43,354
-------- --------
$147,610 $157,781
-------- --------
NET INCOME $198,219 $118,837
======== ========
GENERAL PARTNER (1%) - net
income $ 1,982 $ 1,188
======== ========
LIMITED PARTNERS (99%) - net
income $196,237 $117,649
======== ========
NET INCOME PER UNIT $ 47.87 $ 28.70
======== ========
UNITS OUTSTANDING 4,141 4,141
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $198,219 $118,837
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 35,160 39,267
Decrease in accrued oil and gas
sales 9,208 8,586
Decrease in accounts payable ( 452) ( 4,193)
-------- --------
Net cash provided by operating
activities $242,135 $162,497
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ 935 $ 906
Additions to oil and gas properties - ( 1,706)
-------- --------
Net cash provided (used) by
investing activities $ 935 ($ 800)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($248,460) ($186,345)
-------- --------
Net cash used by financing
activities ($248,460) ($186,345)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 5,390) ($ 24,648)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 86,724 58,496
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 81,334 $ 33,848
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1997 1996
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 46,367 $ 86,273
Accrued oil and gas sales 32,538 46,545
-------- --------
Total current assets $ 78,905 $132,818
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 62,425 72,216
DEFERRED CHARGE 39,527 39,527
-------- --------
$180,857 $244,561
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 4,644 $ 6,198
-------- --------
Total current liabilities $ 4,644 $ 6,198
ACCRUED LIABILITY 12,899 12,899
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 44 units 1,633 2,254
Limited Partners, issued and
outstanding, 4,330 units 161,681 223,210
-------- --------
Total Partners' capital $163,314 $225,464
-------- --------
$180,857 $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 SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
------- -------
REVENUES:
Oil and gas sales $47,614 $55,749
Interest 259 301
------- -------
$47,873 $56,050
COST AND EXPENSES:
Oil and gas production $19,667 $26,146
Depreciation, depletion, and
amortization of oil and gas
properties 2,330 4,422
General and administrative (Note 2) 12,379 11,753
------- -------
$34,376 $42,321
------- -------
NET INCOME $13,497 $13,729
======= =======
GENERAL PARTNER (1%) - net
income $ 135 $ 137
======= =======
LIMITED PARTNERS (99%) - net
income $13,362 $13,592
======= =======
NET INCOME PER UNIT $ 3.09 $ 3.14
======= =======
UNITS OUTSTANDING 4,374 4,374
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
REVENUES:
Oil and gas sales $141,246 $160,958
Interest 1,199 1,543
-------- --------
$142,445 $162,501
COST AND EXPENSES:
Oil and gas production $ 42,167 $ 72,182
Depreciation, depletion, and
amortization of oil and gas
properties 8,681 15,156
General and administrative (Note 2) 44,397 41,993
-------- --------
$ 95,245 $129,331
-------- --------
NET INCOME $ 47,200 $ 33,170
======== ========
GENERAL PARTNER (1%) - net
income $ 472 $ 332
======== ========
LIMITED PARTNERS (99%) - net
income $ 46,728 $ 32,838
======== ========
NET INCOME PER UNIT $ 10.79 $ 7.58
======== ========
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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 47,200 $ 33,170
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 8,681 15,156
Decrease in accrued oil and gas
sales 14,007 10,511
Decrease in accounts payable ( 1,554) ( 2,584)
-------- --------
Net cash provided by operating
activities $ 68,334 $ 56,253
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ 1,110 $ 7,648
Additions to oil and gas properties - ( 7,716)
-------- --------
Net cash provided (used) by
investing activities $ 1,110 ($ 68)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($109,350) ($153,090)
-------- --------
Net cash used by financing
activities ($109,350) ($153,090)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 39,906) ($ 96,905)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 86,273 154,512
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 46,367 $ 57,607
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
-9-
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DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets as of September 30, 1997, statements of
operations for the three and nine months ended September 30, 1997
and 1996, and statements of cash flows for the nine months ended
September 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 September 30, 1997, results of operations for the three and
nine months ended September 30, 1997 and 1996 and changes in cash
flows for the nine months ended September 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 September 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 Programs' 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
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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, 1997 and 1996 the 1985-1
Program incurred such expenses totaling $12,898 and $12,308,
respectively, of which $10,710 was paid each period to Dyco and
its affiliates. During the nine months ended September 30, 1997
and 1996 the 1985-1 Program incurred such expenses totaling
$45,590 and $43,354, respectively, of which $32,130 was paid each
period to Dyco and its affiliates. During the three months ended
September 30, 1997 and 1996 the 1985-2 Program incurred such
expenses totaling $12,379 and $11,753, respectively, of which
$10,068 was paid each period to Dyco and its affiliates. During
the nine months ended September 30, 1997 and 1996 the 1985-2
Program incurred such expenses totaling $44,397 and $41,993,
respectively, of which $30,204 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
- ---------------------
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GENERAL DISCUSSION
The following general discussion should be read in conjunction
with the analysis of results of operations provided below. The
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 SEPTEMBER 30, 1997 AS COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1996.
Three Months Ended September 30,
--------------------------------
1997 1996
------- --------
Oil and gas sales $79,616 $107,842
Oil and gas production expenses $26,641 $ 25,701
Barrels produced - 107
Mcf produced 39,677 55,644
Average price/Bbl $ - $ 21.80
Average price/Mcf $ 2.01 $ 1.96
As shown in the table above, total oil and gas sales decreased
$28,226 (26.17%) for the three months ended September 30, 1997 as
compared to the three months ended September 30, 1996. Of this
decrease, approximately $31,000 was related to a decrease in
volumes of gas sold, partially offset by an increase of
approximately $2,000 related to an increase in the average price
of gas sold. Volumes of oil and gas sold decreased 107 barrels
and 15,967 Mcf, respectively, for the three months ended
September 30, 1997 as compared to the three months ended
September 30, 1996. The decrease in volumes of gas sold resulted
primarily from (i) positive prior period volume adjustments made
by the purchaser on one well during the three months ended
September 30, 1996 and (ii) the shutting-in of another well
during the three months ended September 30, 1997 in order to
increase productions capabilities. Average gas prices increased
to $2.01 per Mcf for the three months ended September 30, 1997
from $1.96 per Mcf for the three months ended September 30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $940 (3.7%) for the
three months ended September 30, 1997 as compared to the three
months ended September 30, 1996. This increase resulted
primarily from an increase in compression charges on one well for
the three months ended September 30, 1997 as compared to the
three months ended September 30, 1996, partially offset by the
decrease in volumes of gas sold during the three months ended
September 30, 1997 as compared to the three months ended
September 30, 1996. As a percentage of oil and gas sales, these
expenses increased to 33.5% for the three months ended September
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30, 1997 from 23.8% for the three months ended September 30,
1996. This percentage increase was primarily due to the increase
in compression charges discussed above.
Depreciation, depletion, and amortization of oil and gas
properties decreased $10,244 (65.1%) for the three months ended
September 30, 1997 as compared to the three months ended
September 30, 1996. This decrease resulted primarily from (i)
upward revisions in the estimate of remaining gas reserves at
December 31, 1996 and (ii) the decrease in volumes of gas sold
for the three months ended September 30, 1997 as compared to the
three months ended September 30, 1996. As a percentage of oil
and gas sales, this expense decreased to 6.9% for the three
months ended September 30, 1997 from 14.6% for the three months
ended September 30, 1996. This percentage decrease was primarily
due to the dollar decrease in depreciation, depletion, and
amortization discussed above.
General and administrative expenses remained relatively constant
for the three months ended September 30, 1997 as compared to the
three months ended September 30, 1996. As a percentage of oil
and gas sales, these expenses increased to 16.2% for the three
months ended September 30, 1997 from 11.4% for the three months
ended September 30, 1996. This percentage increase was primarily
due to the decrease in oil and gas sales discussed above.
NINE MONTHS ENDED SEPTEMBER 30, 1997 AS COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1996.
Nine Months Ended September 30,
-------------------------------
1997 1996
-------- --------
Oil and gas sales $343,327 $274,903
Oil and gas production expenses $ 66,860 $ 75,160
Barrels produced - 219
Mcf produced 159,197 142,725
Average price/Bbl $ - $ 21.21
Average price/Mcf $ 2.16 $ 1.92
As shown in the table above, total oil and gas sales increased
$68,424 (24.9%) for the nine months ended September 30, 1997 as
compared to the nine months ended September 30, 1996. Of this
increase, approximately $31,000 was related to an increase in
volumes of gas sold and approximately $38,000 was related to an
increase in the average price of gas sold. Volumes of gas sold
increased 16,472 Mcf while volumes of oil sold decreased 219
barrels for the nine months ended September 30, 1997 as compared
to the nine months ended September 30, 1996. The increase in
volumes of gas sold resulted primarily from positive prior period
volume adjustments made by the purchaser on two wells during the
nine months ended September 30, 1997. Average gas prices
increased to $2.16 per Mcf for the nine months ended September
30, 1997 from $1.92 per Mcf for the nine months ended September
30, 1996.
Oil and gas production expenses (including lease operating
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expenses and production taxes) decreased $8,300 (11.0%) for the
nine months ended September 30, 1997 as compared to the nine
months ended September 30, 1996. This decrease resulted
primarily from credits received from the operators on two wells
during the nine months ended September 30, 1997 for prior period
lease operating expenses, partially offset by an increase in
volumes of gas sold during the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996. As
a percentage of oil and gas sales, these expenses decreased to
10.3% for the nine months ended September 30, 1997 from 14.3% for
the nine months ended September 30, 1996. This percentage
decrease was primarily due to dollar decrease in production
expenses discussed above and the increase in the average price of
gas sold during the nine months ended September 30, 1997 as
compared to the nine months ended September 30, 1996.
Depreciation, depletion, and amortization of oil and gas
properties decreased $4,107 (10.5%) for the nine months ended
September 30, 1997 as compared to the nine months ended September
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
nine months ended September 30, 1997 as compared to the nine
months ended September 30, 1996. As a percentage of oil and gas
sales, this expense decreased to 10.2% for the nine months ended
September 30, 1997 from 14.3% for the nine months ended September
30, 1996. This percentage decrease was primarily due to the
dollar decrease in depreciation, depletion, and amortization
discussed above.
General and administrative expenses increased $2,236 (5.2%) for
the nine months ended September 30, 1997 as compared to the nine
months ended September 30, 1996. This increase resulted
primarily from increases in both computer consulting fees and
computer upgrades, which increases were partially offset by a
decrease in postage expense. As a percentage of oil and gas
sales, these expenses decreased to 13.3% for the nine months
ended September 30, 1997 from 15.8% for the nine months ended
September 30, 1996. This percentage decrease was primarily due
to the increase in gas sales discussed above.
1985-2 PROGRAM
THREE MONTHS ENDED SEPTEMBER 30, 1997 AS COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1996.
Three Months Ended September 30,
--------------------------------
1997 1996
------- -------
Oil and gas sales $47,614 $55,749
Oil and gas production expenses $19,667 $26,146
Barrels produced 789 761
Mcf produced 15,139 16,744
Average price/Bbl $ 18.53 $ 22.82
Average price/Mcf $ 2.18 $ 2.29
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As shown in the table above, total oil and gas sales decreased
$8,135 (14.6%) for the three months ended September 30, 1997 as
compared to the three months ended September 30, 1996. Of this
decrease, approximately $5,000 was related to the decreases in
the average prices of oil and gas sold and approximately $3,000
was related to a decrease in volumes of gas sold. Volumes of oil
sold increased 28 barrels, while volumes of gas sold decreased
1,605 Mcf for the three months ended September 30, 1997 as
compared to the three months ended September 30, 1996. Average
oil and gas prices decreased to $18.53 per barrel and $2.18 per
Mcf, respectively, for the three months ended September 30, 1997
from $22.82 per barrel and $2.29 Mcf, respectively, for the three
months ended September 30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $6,479 (24.8%) for the
three months ended September 30, 1997 as compared to the three
months ended September 30, 1996. This decrease resulted
primarily from (i) a decrease in legal expenses on one well and
(ii) the decrease in volumes of gas sold for the three months
ended September 30, 1997 as compared to the three months ended
September 30, 1996. As a percentage of oil and gas sales, these
expenses decreased to 41.3% for the three months ended September
30, 1997 from 46.9% for the three months ended September 30,
1996. This percentage decrease was primarily due to the dollar
decrease in oil and gas production expenses discussed above.
Depreciation, depletion, and amortization of oil and gas
properties decreased $2,092 (47.3%) for the three months ended
September 30, 1997 as compared to the three months ended
September 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 4.9% for the three months ended September
30, 1997 from 7.9% for the three months ended September 30, 1996.
This percentage decrease was primarily due to the dollar decrease
in depreciation, depletion, and amortization discussed above.
General and administrative expenses increased $626 (5.3%) for the
three months ended September 30, 1997 as compared to the three
months ended September 30, 1996. This increase resulted
primarily from an increase in computer consulting fees during the
three months ended September 30, 1997 as compared to the three
months ended September 30, 1996. As a percentage of oil and gas
sales, these expenses increased to 26.0% for the three months
ended September 30, 1997 from 21.1% for the three months ended
September 30, 1996. This percentage increase was primarily due
to the decrease in oil and gas sales discussed above.
NINE MONTHS ENDED SEPTEMBER 30, 1997 AS COMPARED TO THE NINE
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MONTHS ENDED SEPTEMBER 30, 1996.
Nine Months Ended September 30,
-------------------------------
1997 1996
-------- --------
Oil and gas sales $141,246 $160,958
Oil and gas production expenses $ 42,167 $ 72,182
Barrels produced 1,682 3,005
Mcf produced 47,756 50,863
Average price/Bbl $ 21.04 $ 19.70
Average price/Mcf $ 2.22 $ 2.00
As shown in the table above, total oil and gas sales decreased
$19,712 (12.3%) for the nine months ended September 30, 1997 as
compared to the nine months ended September 30, 1996. Of this
decrease, approximately $6,000 and $26,000, respectively, were
related to decreases in volumes of oil and gas sold, partially
offset by increases of approximately $2,000 and $11,000,
respectively, related to the increases in the average prices of
oil and gas sold. Volumes of oil and gas sold decreased 1,323
barrels and 3,107 Mcf, respectively, for the nine months ended
September 30, 1997 as compared to the nine months ended September
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 nine months ended September 30,
1997. Average oil and gas prices increased to $21.04 per barrel
and $2.22 per Mcf, respectively, for the nine months ended
September 30, 1997 from $19.70 per barrel and $2.00 per Mcf,
respectively, for the nine months ended September 30, 1996.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $30,015 (41.6%) for the
nine months ended September 30, 1997 as compared to the nine
months ended September 30, 1996. This decrease resulted
primarily from (i) credits received from the operator on one well
during the nine months ended September 30, 1997, (ii) the sale of
one well during the nine months ended September 30, 1996, and
(iii) the decrease in volumes of oil and gas sold during the nine
months ended September 30, 1997 as compared to the nine months
ended September 30, 1996. As a percentage of oil and gas sales,
these expenses decreased to 29.9% for the nine months ended
September 30, 1997 from 44.8% for the nine months ended September
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 nine months
ended September 30, 1997 as compared to the nine months ended
September 30, 1996.
Depreciation, depletion, and amortization of oil and gas
properties decreased $6,475 (42.7%) for the nine months ended
September 30, 1997 as compared to the nine months ended September
30, 1996. This decrease resulted primarily from (i) upward
revisions in the estimates of remaining oil and gas reserves at
December 31, 1996 and (ii) a decrease in volumes of gas sold
during the nine months ended September 30, 1997 as compared to
the nine months ended September 30, 1996. As a percentage of oil
and gas sales, this expense decreased to 6.1% for the nine months
ended September 30, 1997 from 9.4% for the nine months ended
September 30, 1996. This percentage decrease was primarily due
-17-
<PAGE>
<PAGE>
to the dollar decrease in depreciation, depletion, and
amortization discussed above and the increase in the average
price of gas sold during the nine months ended September 30, 1997
as compared to the nine months ended September 30, 1996.
General and administrative expenses increased $2,404 (5.7%) for
the nine months ended September 30, 1997 as compared to the nine
months ended September 30, 1996. This increase resulted
primarily from increases in both computer consulting fees and
computer upgrades, which increases were partially offset by a
decrease in postage expenses during the nine months ended
September 30, 1997 as compared to the nine months ended September
30, 1996. As a percentage of oil and gas sales, these expenses
increased to 31.4% for the nine months ended September 30, 1997
from 26.1% for the nine months ended September 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 September 30,
1997 and for the nine months ended September 30,
1997, filed herewith.
27.2 Financial Data Schedule containing summary
financial information extracted from the 1985-2
Program's financial statements as of September 30,
1997 and for the nine months ended September 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: November 4, 1997 By: /s/Dennis R. Neill
-------------------------------
(Signature)
Dennis R. Neill
President
Date: November 4, 1997 By: /s/Patrick M. Hall
-------------------------------
(Signature)
Patrick M. Hall
Chief Financial Officer
<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, 1997 and for the nine months ended
September 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
September 30, 1997 and for the nine months ended
September 30, 1997, 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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 81,334
<SECURITIES> 0
<RECEIVABLES> 86,250
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 167,584
<PP&E> 20,980,422
<DEPRECIATION> 20,838,810
<TOTAL-ASSETS> 324,715
<CURRENT-LIABILITIES> 5,464
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 289,549
<TOTAL-LIABILITY-AND-EQUITY> 324,715
<SALES> 343,327
<TOTAL-REVENUES> 345,829
<CGS> 0
<TOTAL-COSTS> 147,610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 198,219
<INCOME-TAX> 0
<INCOME-CONTINUING> 198,219
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 198,219
<EPS-PRIMARY> 47.87
<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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 46,367
<SECURITIES> 0
<RECEIVABLES> 32,538
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 78,905
<PP&E> 22,442,345
<DEPRECIATION> 22,379,920
<TOTAL-ASSETS> 180,857
<CURRENT-LIABILITIES> 4,644
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 163,314
<TOTAL-LIABILITY-AND-EQUITY> 180,857
<SALES> 141,246
<TOTAL-REVENUES> 142,445
<CGS> 0
<TOTAL-COSTS> 95,245
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 47,200
<INCOME-TAX> 0
<INCOME-CONTINUING> 47,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47,200
<EPS-PRIMARY> 10.79
<EPS-DILUTED> 0
</TABLE>
