<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended Commission File Number
September 30, 1995 33-9203
DYCO OIL AND GAS PROGRAM 1986-X
(A LIMITED PARTNERSHIP)
(Exact Name of Registrant as specified in its charter)
Minnesota 41-1565819
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
Samson Plaza, Two West Second Street, Tulsa, Oklahoma 74103
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(918) 583-1791
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(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 1986-X LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 6,040 $ 10,512
Accrued oil and gas sales, including
$15,647 and $27,140 due from
related parties (Note 2) . . . . . . 19,004 27,521
-------- --------
Total current assets . . . . . . . $ 25,044 $ 38,033
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 81,766 98,980
DEFERRED CHARGE . . . . . . . . . . . . . 5,563 5,563
-------- --------
$112,373 $142,576
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 4,705 $ 4,007
-------- --------
Total current liabilities . . . . . $ 4,705 $ 4,007
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
21 units . . . . . . . . . . . . . . 1,076 1,385
Limited Partners, issued and outstanding,
2,000 units . . . . . . . . . . . . 106,592 137,184
-------- --------
Total Partners' capital . . . . . . $107,668 $138,569
-------- --------
$112,373 $142,576
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1986-X LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$25,567 and $36,871 of sales
to related parties (Note 2) . . . . $28,374 $40,004
Interest . . . . . . . . . . . . . . . 308 185
------- -------
$28,682 $40,189
------- -------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $17,291 $14,933
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 5,499 5,089
General and administrative (Note 2) . 4,554 4,764
------- -------
$27,344 $24,786
------- -------
NET INCOME . . . . . . . . . . . . . . . $ 1,338 $15,403
======= =======
GENERAL PARTNER (1%) - net income . . . . $ 13 $ 154
======= =======
LIMITED PARTNERS (99%) - net income . . . $ 1,325 $15,249
======= =======
NET INCOME PER UNIT . . . . . . . . . . . $ 1 $ 7
======= =======
UNITS OUTSTANDING . . . . . . . . . . . . 2,021 2,021
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1986-X LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
REVENUES:
Oil and gas sales, including
$84,180 and $129,991 of sales
to related parties (Note 2) . . . . $95,731 $138,102
Interest . . . . . . . . . . . . . . . 647 686
------- --------
$96,378 $138,788
------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $51,622 $ 46,888
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 18,031 25,323
General and administrative (Note 2) . 17,206 15,794
------- --------
$86,859 $ 88,005
------- --------
NET INCOME . . . . . . . . . . . . . . . $ 9,519 $ 50,783
======= ========
GENERAL PARTNER (1%) - net income . . . . $ 95 $ 508
======= ========
LIMITED PARTNERS (99%) - net income . . . $ 9,424 $ 50,275
======= ========
NET INCOME PER UNIT . . . . . . . . . . . $ 5 $ 25
======= ========
UNITS OUTSTANDING . . . . . . . . . . . . 2,021 2,021
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1986-X LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . $ 9,519 $50,783
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . 18,031 25,323
Decrease in accrued oil and gas sales 8,517 10,822
Increase in accounts payable . . . . 698 33
------- -------
Net cash provided by operating
activities $36,765 $86,961
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 817) $ -
------- -------
Net cash used by investing activities ($ 817) $ -
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . ($40,420) ($60,630)
------- -------
Net cash used by financing activities ($40,420) ($60,630)
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . ($ 4,472) $26,331
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 10,512 16,603
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,040 $42,934
======= =======
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1986-X LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheet as of September 30, 1995, statements of
operations for the three and nine months ended September 30, 1995
and 1994, and statements of cash flows for the nine months ended
September 30, 1995 and 1994 have been prepared by Dyco Petroleum
Corporation ("Dyco"), the General Partner of the Dyco Oil and Gas
Program 1986-X Limited Partnership (the "Program"), without audit.
In the opinion of management all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position at September 30, 1995, results of operations for
the three and nine months ended September 30, 1995 and 1994, and
changes in cash flows for the nine months ended September 30, 1995
and 1994 have been made.
Information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is
suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the
Program's Annual Report on Form 10-K for the year ended December
31, 1994. The results of operations for period ended September 30,
1995 are not necessarily indicative of the results to be expected
for the full year.
The limited partners' net income or loss per unit is based upon
each $5,000 initial capital contribution.
OIL AND GAS PROPERTIES
----------------------
Oil and gas operations are accounted for using the full cost method
of accounting. All productive and non-productive costs associated
with the acquisition, exploration and development of oil and gas
reserves are capitalized. 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.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
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Under the terms of the Program's partnership agreement, Dyco is
entitled to receive a reimbursement for all direct expenses and
general and administrative, geological and engineering expenses it
incurs on behalf of the Program. During the three months ended
September 30, 1995 and 1994 such expenses totaled $4,554 and
$4,764, respectively, of which $4,020 and $4,020 were paid to Dyco.
During the nine months ended September 30, 1995 and 1994 such
expenses totaled $17,206 and $15,794, respectively, of which
$12,060 and $12,060 were paid to Dyco.
Affiliates of the Program are the operators of certain of the
Program's properties and their policy is to bill the Program for
all customary charges and cost reimbursements associated with their
activities, together with any compressor rentals, consulting, or
other services provided.
The Program sells gas at market prices to Premier Gas Company
("Premier"), an affiliated company, and Premier may then resell
such gas to third parties at market prices. During the three
months ended September 30, 1995 and 1994 these sales totaled
$25,567 and $36,871, respectively. During the nine months ended
September 30, 1995 and 1994 these sales totaled $84,180 and
$129,991, respectively. At September 30, 1995 accrued oil and gas
sales included $15,647 due from Premier.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net proceeds from the Program's 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 Program's reserves which would result in a
positive economic impact. Over the last several years, the
domestic energy industry and the Program 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 Program's 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
Program has no bank debt commitments. Cash for operational
purposes will be provided by current oil and gas production.
RESULTS OF OPERATIONS
- ---------------------
THREE MONTHS ENDED SEPTEMBER 30, 1995 AS COMPARED TO THE THREE
MONTHS ENDED SEPTEMBER 30, 1994.
Three months ended September 30,
--------------------------------
1995 1994
---- ----
Oil and gas sales $28,374 $40,004
Oil and gas production
expenses $17,291 $14,933
Barrels produced 156 185
Mcf produced 21,275 25,255
Average price/Bbl $ 17.99 $ 16.94
Average price/Mcf $ 1.20 $ 1.46
As shown in the table, oil and natural gas sales decreased 29.1%
for the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994. This decrease resulted
from the decreases in the volumes of oil and natural gas sold and
the decrease in the average price of natural gas sold, partially
offset by the increase in the average price of oil sold during
the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994. Volumes of oil and
natural gas sold decreased 29 barrels and 3,980 Mcf,
respectively, for the three months ended September 30, 1995 as
compared to the three months ended September 30, 1994. Average
natural gas prices decreased to $1.20 per Mcf for the three
months ended September 30, 1995 from $1.46 per Mcf for the three
months ended September 30, 1994, while average oil prices
increased to $17.99 per barrel for the three months ended
September 30, 1995 from $16.94 per barrel for the three months
ended September 30, 1994.
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Oil and gas production expenses (including lease operating
expenses and production taxes) increased $2,358 for the three
months ended September 30, 1995 as compared to the three months
ended September 30, 1994. This increase was primarily due to
workover charges incurred on two of the Program's wells during
the three months ended September 30, 1995 to improve the recovery
of reserves. As a percentage of oil and gas sales, these
expenses increased to 60.9% for the three months ended September
30, 1995 from 37.3% for the three months ended September 30,
1994. This percentage increase was primarily due to the dollar
increase in production expenses as discussed above and the
decrease in the average price of natural gas sold during the
three months ended September 30, 1995 as compared to the three
months ended September 30, 1994.
Depreciation, depletion, and amortization of oil and gas
properties increased slightly by $410 for the three months ended
September 30, 1995 as compared to the three months ended
September 30, 1994. As a percentage of oil and gas sales, this
expense increased to 19.4% for the three months ended September
30, 1995 compared to 12.7% for the three months ended September
30, 1994. This percentage increase was primarily a result of the
decrease in the average price of natural gas sold during the
three months ended September 30, 1995 as compared to the three
months ended September 30, 1994.
General and administrative expenses decreased slightly by $210
for the three months ended September 30, 1995 as compared to the
three months ended September 30, 1994. As a percentage of oil
and gas sales, these expenses increased to 16.0% for the three
months ended September 30, 1995 from 11.9% for the three months
ended September 30, 1994. This percentage increase was primarily
due to the decrease in the volumes and average price of natural
gas sold during the three months ended September 30, 1995 as
compared to the three months ended September 30, 1994.
NINE MONTHS ENDED SEPTEMBER 30, 1995 AS COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1994.
Nine months ended September 30,
-------------------------------
1995 1994
---- ----
Oil and gas sales $95,731 $138,102
Oil and gas production
expenses $51,622 $ 46,888
Barrels produced 401 515
Mcf produced 69,209 77,670
Average price/Bbl $ 17.16 $ 15.75
Average price/Mc $ 1.28 $ 1.67
As shown in the table, oil and natural gas sales decreased 30.7%
for the nine months ended September 30, 1995 as compared to the
nine months ended September 30, 1994. This decrease resulted
primarily from the decreases in the volumes of oil and natural
gas sold and the decrease in the average price of natural gas
sold during the nine months ended September 30, 1995 as compared
to the nine months ended September 30, 1994. Volumes of oil and
natural gas sold decreased 114 barrels and 8,461 Mcf,
respectively, for the nine months ended September 30, 1995 as
compared to the nine months ended September 30, 1994. The
decrease in the volumes of natural gas sold resulted primarily
from the shutting in of one of the Program's wells during a
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portion of the nine months ended September 30, 1995 to improve
future production capabilities by increasing pressure on the well
and a significant positive prior period volume adjustment from a
purchaser on another of the Program's wells during the nine
months ended September 30, 1994. Average natural gas prices
decreased to $1.28 per Mcf for the nine months ended September
30, 1995 from $1.67 per Mcf for the nine months ended September
30, 1994, while average oil prices increased to $17.16 per barrel
for the nine months ended September 30, 1995 from $15.75 per
barrel for the nine months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) increased $4,734 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This increase was primarily due to
workover charges incurred on two of the Program's wells during
the nine months ended September 30, 1995 to improve the recovery
of reserves. As a percentage of oil and gas sales, these
expenses increased to 53.9% for the nine months ended September
30, 1995 from 34.0% for the nine months ended September 30, 1994.
This percentage increase was primarily due to the dollar increase
in production expenses as discussed above and the decrease in the
average price of natural gas sold during the nine months ended
September 30, 1995 as compared to the nine months ended September
30, 1994.
Depreciation, depletion, and amortization of oil and gas
properties decreased $7,292 for the nine months ended September
30, 1995 as compared to the nine months ended September 30, 1994.
This decrease was primarily the result of the decrease in the
volumes of oil and natural gas sold during the nine months ended
September 30, 1995 as compared to the nine months ended September
30, 1994. As a percentage of oil and gas sales, this expense
remained relatively constant at 18.8% for the nine months ended
September 30, 1995 compared to 18.3% for the nine months ended
September 30, 1994.
General and administrative expenses increased $1,412 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This dollar increase resulted
primarily from an increase in the Program's professional fees
during the nine months ended September 30, 1995 as compared to
the nine months ended September 30, 1994. As a percentage of oil
and gas sales, these expenses increased to 18.0% for the nine
months ended September 30, 1995 from 11.4% for the nine months
ended September 30, 1994. This percentage increase was primarily
due to decreases in the volumes and average price of natural gas
sold during the nine months ended September 30, 1995 as compared
to the nine months ended September 30, 1994.
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PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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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 1986-X LIMITED
PARTNERSHIP
(Registrant)
By: DYCO PETROLEUM CORPORATION
General Partner
Date: November 13, 1995 By: /s/Dennis R. Neill
---------------------------
(Signature)
Dennis R. Neill
Senior Vice President
Date: November 13, 1995 By: /s/Patrick M. Hall
---------------------------
(Signature)
Patrick M. Hall
Senior Vice President - Controller
Principal Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000803095
<NAME> DYCO OIL AND GAS PROGRAM 1986-X
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 6,040
<SECURITIES> 0
<RECEIVABLES> 19,004
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 25,044
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 112,373
<CURRENT-LIABILITIES> 4,705
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 107,668
<TOTAL-LIABILITY-AND-EQUITY> 112,373
<SALES> 95,731
<TOTAL-REVENUES> 96,378
<CGS> 0
<TOTAL-COSTS> 86,859
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,519
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,519
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,519
<EPS-PRIMARY> 5.00
<EPS-DILUTED> 0
</TABLE>
