<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 2-62275-03 (1979-1)
2-62275-04 (1979-2)
DYCO 1979 OIL AND GAS PROGRAMS
(TWO LIMITED PARTNERSHIPS)
(Exact Name of Registrant as specified in its charter)
41-1358013 (1979-1)
Minnesota 41-1358015 (1979-2)
(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
----------------------------------------------
(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 1979-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
-------------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 5,266 $ 83,662
Accounts receivable - related party . - 13,447
Accrued oil and gas sales, including
$38,665 and $44,294 due from
related parties (Note 2) . . . . . . 48,416 45,523
-------- --------
Total current assets . . . . . . . $ 53,682 $142,632
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 281,498 266,548
DEFERRED CHARGE . . . . . . . . . . . . . 74,172 74,172
-------- --------
$409,352 $483,352
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 16,697 $ 3,603
-------- --------
Total current liabilities . . . . . $ 16,697 $ 3,603
ACCRUED LIABILITY . . . . . . . . . . . . 35,622 35,622
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
32 units . . . . . . . . . . . . . . 3,571 4,442
Limited Partners, issued and outstanding,
3,140 units . . . . . . . . . . . . 353,462 439,685
-------- --------
Total Partners' capital . . . . . . $357,033 $444,127
-------- --------
$409,352 $483,352
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
-------- ---------
REVENUES:
Oil and gas sales, including
$71,688 and $97,411 of sales
to related parties (Note 2) . . . . $74,304 $100,862
Interest . . . . . . . . . . . . . . . 249 89
------- --------
$74,553 $100,951
------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $25,634 $ 26,930
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 19,667 8,254
General and administrative (Note 2) . 12,114 12,530
------- --------
$57,415 $ 47,714
------- --------
NET INCOME . . . . . . . . . . . . . . . $17,138 $ 53,237
======= ========
GENERAL PARTNER (1%) - net income . . . . $ 171 $ 533
======= ========
LIMITED PARTNERS (99%) - net income . . . $16,967 $ 52,704
======= ========
NET INCOME PER UNIT . . . . . . . . . . . $ 5 $ 17
======= ========
UNITS OUTSTANDING . . . . . . . . . . . . 3,172 3,172
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
-------- ---------
REVENUES:
Oil and gas sales, including
$233,107 and $313,712 of sales
to related parties (Note 2) . . . . $291,894 $322,704
Interest . . . . . . . . . . . . . . . 2,014 949
-------- --------
$293,908 $323,653
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 74,190 $ 73,572
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 58,387 48,223
General and administrative (Note 2) . 42,245 39,784
-------- --------
$174,822 $161,579
-------- --------
NET INCOME . . . . . . . . . . . . . . . $119,086 $162,074
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 1,191 $ 1,621
======== ========
LIMITED PARTNERS (99%) - net income . . . $117,895 $160,453
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 38 $ 51
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 3,172 3,172
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-1 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 . . . . . . . . . . . . . . $119,086 $162,074
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . 58,387 48,223
Decrease (increase) in receivable from
related party . . . . . . . . . . 13,447 ( 29,069)
(Increase) decrease in accrued oil and
gas sales . . . . . . . . . . . . ( 2,893) 25,262
Increase (decrease) in accounts payable 13,094 ( 458)
-------- --------
Net cash provided by operating
activities . . . . . . . . . . . . . . $201,121 $206,032
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . ($ 75,898) ($ 1,274)
Retirements of oil and gas properties 2,561 462
-------- --------
Net cash used by investing
activities. . . . . . . . . . . . ($ 73,337) ($ 812)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . ($206,180) ($237,900)
-------- --------
Net cash used by financing
activities ($206,180) ($237,900)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS ($ 78,396) ($ 32,680)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 83,662 33,773
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,266 $ 1,093
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
-------------- ------------
CURRENT ASSETS:
Cash and cash equivalents . . . . . . $ 98,469 $129,666
Accrued oil and gas sales, including
$44,778 and $125,752 due from
related parties (Note 2) . . . . . . 56,057 149,136
-------- --------
Total current assets . . . . . . . $154,526 $278,802
NET OIL AND GAS PROPERTIES, utilizing
the full cost method . . . . . . . . . 432,608 521,263
DEFERRED CHARGE . . . . . . . . . . . . . 57,442 57,442
-------- --------
$644,576 $857,507
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . $ 6,224 $ 5,876
Gas imbalance payable . . . . . . . . 2,336 2,336
-------- --------
Total current liabilities . . . . . $ 8,560 $ 8,212
CONTINGENCIES (Note 3)
PARTNERS' CAPITAL:
General Partner, issued and outstanding,
29 units . . . . . . . . . . . . . . 6,360 8,493
Limited Partners, issued and outstanding,
2,860 units . . . . . . . . . . . . 629,656 840,802
-------- --------
Total Partners' capital . . . . . . $636,016 $849,295
-------- --------
$644,576 $857,507
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ----------
REVENUES:
Oil and gas sales, including
$58,272 and $228,678 of sales
to related parties (Note 2) . . . . $62,550 $266,225
Interest . . . . . . . . . . . . . . . 1,161 2,228
------- --------
$63,711 $268,453
------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $23,336 $ 40,719
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 17,469 43,097
General and administrative (Note 2) . 8,736 8,996
------- --------
$49,541 $ 92,812
------- --------
NET INCOME . . . . . . . . . . . . . . . $14,170 $175,641
======= ========
GENERAL PARTNER (1%) - net income . . . . $ 142 $ 1,756
======= ========
LIMITED PARTNERS (99%) - net income . . . $14,028 $173,885
======= ========
NET INCOME PER UNIT . . . . . . . . . . . $ 5 $ 60
======= ========
UNITS OUTSTANDING . . . . . . . . . . . . 2,889 2,889
======= ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
1995 1994
--------- ----------
REVENUES:
Oil and gas sales, including
$288,101 and $696,014 of sales
to related parties (Note 2) . . . . $360,678 $779,252
Interest . . . . . . . . . . . . . . . 5,299 6,159
-------- --------
$365,977 $785,411
-------- --------
COSTS AND EXPENSES:
Oil and gas production . . . . . . . . $ 83,098 $114,215
Depreciation, depletion, and amortization
of oil and gas properties . . . . . . . 88,655 160,851
General and administrative (Note 2) . 31,933 29,547
-------- --------
$203,686 $304,613
-------- --------
NET INCOME . . . . . . . . . . . . . . . $162,291 $480,798
======== ========
GENERAL PARTNER (1%) - net income . . . . $ 1,623 $ 4,808
======== ========
LIMITED PARTNERS (99%) - net income . . . $160,668 $475,990
======== ========
NET INCOME PER UNIT . . . . . . . . . . . $ 56 $ 166
======== ========
UNITS OUTSTANDING . . . . . . . . . . . . 2,889 2,889
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-2 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 . . . . . . . . . . . . . . $162,291 $480,798
Adjustments to reconcile net income to
net cash provided (used) by operating
activities:
Depreciation, depletion, and amortiza-
tion of oil and gas properties . . 88,655 160,851
Decrease in accrued oil and gas sales 93,079 48,786
Increase (decrease) in accounts payable 348 ( 151)
Decrease in related party payable . - ( 696,695)
-------- --------
Net cash provided (used) by operating
activities . . . . . . . . . . . $344,373 ($ 6,411)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas properties . $ - ($ 1,211)
-------- --------
Net cash used by investing activities $ - ($ 1,211)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions . . . . . . . . . . ($375,570) ($274,455)
-------- --------
Net cash used by financing activities ($375,570) ($274,455)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS ($ 31,197) ($282,077)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 129,666 433,512
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 98,469 $151,435
======== ========
The accompanying condensed notes are an
integral part of these financial statements.
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DYCO OIL AND GAS PROGRAM 1979-1 LIMITED PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1979-2 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 1979-1 and 1979-2 Limited Partnerships (individually, the
"1979-1 Program" or the "1979-2 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, 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
Programs' Annual Report on Form 10-K for the year ended December
31, 1994. The results of operations for the 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
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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, 1995 and 1994 the 1979-1 Program incurred such
expenses totaling $12,114 and $12,530, respectively, of which
$11,130 and $11,130 were paid to Dyco. During the nine months
ended September 30, 1995 and 1994 the 1979-1 Program incurred such
expenses totaling $42,245 and $39,784, respectively, of which
$33,390 and $33,390 were paid to Dyco. During the three months
ended September 30, 1995 and 1994 the 1979-2 Program incurred such
expenses totaling $8,736 and $8,996, respectively, of which $7,803
and $7,803 were paid to Dyco. During the nine months ended
September 30, 1995 and 1994 the 1979-2 Program incurred such
expenses totaling $31,933 and $29,547, respectively, of which
$23,409 and $23,409 were paid to Dyco.
Affiliates of the Programs are the operators of certain of the
Programs' properties and their policy is to bill the Programs for
all customary charges and cost reimbursements associated with their
activities, together with any compressor rentals, consulting, or
other services provided.
The Programs sell 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 for the 1979-1
Program totaled $71,688 and $97,411, respectively. During the nine
months ended September 30, 1995 and 1994 these sales for the 1979-1
Program totaled $233,107 and $313,712, respectively. At September
30, 1995 accrued oil and gas sales for the 1979-1 Program included
$38,665 due from Premier. During the three months ended September
30, 1995 and 1994 these sales for the 1979-2 Program totaled
$58,272 and $228,678, respectively. During the nine months ended
September 30, 1995 and 1994 these sales for the 1979-2 Program
totaled $288,101 and $696,014, respectively. At September 30, 1995
accrued oil and gas sales for the 1979-2 Program included $44,778
due from Premier.
3. CONTINGENCIES
-------------
On October 26, 1993, certain royalty owners filed a class action
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lawsuit against Dyco and another party in which they alleged
entitlement to a share of the proceeds from a gas contract
involving one of the 1979-2 Program's wells. The plaintiffs are
alleging claims based on breach of contract, breach of fiduciary
obligation, and unjust enrichment and are seeking an accounting and
declaration as a third party beneficiary under the gas contract.
The plaintiffs have not quantified the amount of their damages, but
they are seeking exemplary damages, unpaid royalties, and interest.
Dyco has filed its answer in the matter in which it denied all of
the plaintiffs' allegations and discovery is proceeding in the
matter. On January 18, 1994 the district court certified the
matter as a class action and on November 29, 1994 the plaintiffs
filed a motion for summary judgment in the matter. Dyco intends to
vigorously defend the lawsuit. As of the date of these financial
statements, management cannot determine the amount of any alleged
damages which would be allocable to the 1979-2 Program from this
lawsuit.
On October 21, 1994 a royalty owner filed a class action lawsuit
against an affiliate of Dyco and other parties in which he alleged
entitlement to a share of the proceeds from a gas contract
involving one of the 1979-2 Program's wells. The plaintiffs are
alleging claims based on unjust enrichment, breach of contract and
fiduciary obligation, and constructive fraud, and are seeking an
accounting. The plaintiffs have not quantified the amount of their
damages, but they are seeking actual and punitive damages, interest
and costs. On November 17, 1994 the defendants filed a special
appearance and motion to dismiss for lack of venue. The court then
entered an order transferring venue to Oklahoma District Court.
Discovery is proceeding and the affiliate intends to vigorously
defend the lawsuit. As of the date of these financial statements,
management cannot determine the amount of any alleged damages which
would be allocable to the 1979-2 Program from this lawsuit.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net proceeds from the Programs' operations less necessary
operating capital are distributed to investors on a quarterly
basis. The net proceeds from production are not reinvested in
productive assets, except to the extent that producing wells are
improved, or where methods are employed to permit more efficient
recovery of the Programs' reserves which would result in a
positive economic impact. Over the last several years, the
domestic energy industry and the Programs have contended with
volatile, but generally low, oil and gas prices. Over the past
few years, the oil and gas market appears to have moved from
periods of relative stability in supply and demand to excess
supply or weakened demand. These trends have led to the
volatility in pricing and demand noted over the past years.
The Programs' available capital from subscriptions has been spent
on oil and gas drilling activities. There should not be any
further material capital resource commitments in the future. The
Programs have no bank debt commitments. Cash for operational
purposes will be provided by current oil and gas production.
RESULTS OF OPERATIONS
- ---------------------
1979-1 PROGRAM
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 $74,304 $100,862
Oil and gas production
expenses $25,634 $ 26,930
Barrels produced 148 191
Mcf produced 59,736 65,302
Average price/Bbl $ 17.68 $ 18.07
Average price/Mcf $ 1.20 $ 1.49
As shown in the table, oil and natural gas sales decreased by
26.3% for the three months ended September 30, 1995 as compared
to the three months ended September 30, 1994. This decrease
resulted primarily from 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. Volumes of oil and natural gas sold decreased 43 barrels
and 5,566 Mcf, respectively, for the three months ended September
30, 1995 as compared to the three months ended September 30,
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1994. Average oil and natural gas prices decreased to $17.68 per
barrel and $1.20 per Mcf, respectively, for the three months
ended September 30, 1995 from $18.07 per barrel and $1.49 per
Mcf, respectively, for the three months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased slightly by $1,296 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 34.5% for the three
months ended September 30, 1995 from 26.7% 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
for 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 $11,413 for the three months ended September
30, 1995 as compared to the three months ended September 30,
1994. This increase was primarily a result of the increase in
oil and gas properties subject to amortization as a result of
recent recompletion and workover activities on an existing well
and a decrease in the valuation of the 1979-1 Program's remaining
natural gas reserves 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
26.5% for the three months ended September 30, 1995 from 8.2% for
the three months ended September 30, 1994. This percentage
increase resulted primarily from the dollar increase related to
the increase in the oil and gas properties subject to
amortization as discussed above and the decrease in the average
price of natural gas sold for the three months ended September
30, 1995 as compared to the three months ended September 30,
1994.
General and administrative expenses remained relatively constant
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 16.3% for the three
months ended September 30, 1995 compared to 12.4% for the three
months ended September 30, 1994. This percentage increase was
primarily a result of 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.
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Nine months ended September 30,
--------------------------------
1995 1994
---- ----
Oil and gas sales $291,894 $322,704
Oil and gas production
expenses $ 74,190 $ 73,572
Barrels produced 739 560
Mcf produced 211,566 182,450
Average price/Bbl $ 18.15 $ 16.06
Average price/Mcf $ 1.32 $ 1.72
As shown in the table, oil and natural gas sales decreased 9.5%
for the nine months ended September 30, 1995 as compared to the
nine months ended September 30, 1994. This decrease resulted
from the decrease in the average price of natural gas sold,
partially offset by the increase in the volumes of oil and
natural gas sold and the increase in the average price of oil
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 increased 179 barrels and 29,116 Mcf,
respectively, for the nine months ended September 30, 1995 as
compared to the nine months ended September 30, 1994. The
increase in the volumes of natural gas sold resulted primarily
from positive prior period volume adjustments from a purchaser on
one well during the nine months ended September 30, 1995.
Average oil prices increased to $18.15 per barrel for the nine
months ended September 30, 1995 from $16.06 per barrel for the
nine months ended September 30, 1994, while average natural gas
prices decreased to $1.32 per Mcf for the nine months ended
September 30, 1995 from $1.72 per Mcf for the nine months ended
September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) remained relatively constant for
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 25.4% for the nine months
ended September 30, 1995 from 22.8% for the nine months ended
September 30, 1994. This percentage increase was primarily a
result of the decrease in the average price of natural gas sold
for 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 increased by $10,164 for the nine months ended
September 30, 1995 as compared to the nine months ended September
30, 1994. This increase was primarily a result of the increase
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 increased to 20.0% for the nine months ended September
30, 1995 compared to 14.9% for the nine months ended September
30, 1994. This percentage increase resulted primarily from the
decrease in the average price of natural gas sold for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994.
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General and administrative expenses increased $2,461 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This increase resulted primarily from
an increase in the 1979-1 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 14.5% for the nine months
ended September 30, 1995 from 12.3% for the nine months ended
September 30, 1994. This percentage increase was primarily a
result of the decrease in the average price of natural gas sold,
partially offset by the increase in the volumes of natural gas
sold during the nine months ended September 30, 1995 as compared
to the nine months ended September 30, 1994.
1979-2 PROGRAM
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 $ 62,550 $266,225
Oil and gas production
expenses $ 23,336 $ 40,719
Barrels produced 224 830
Mcf produced 44,924 157,046
Average price/Bbl $ 19.10 $ 17.51
Average price/Mcf $ 1.30 $ 1.60
As shown in the table, oil and natural gas sales decreased by
76.5% for the three months ended September 30, 1995 as compared
to the three 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 for 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 606 barrels and 112,122
Mcf, respectively, for the three months ended September 30, 1995
as compared to the three months ended September 30, 1994. The
decrease in the volumes of oil sold was primarily a result of a
significant positive prior period volume adjustments from a
purchaser on one well during the three months ended September 30,
1994. The decrease in the volumes of natural gas sold resulted
primarily from gas balancing adjustments on an underproduced well
during the three months ended September 30, 1994. Average
natural gas prices decreased to $1.30 per Mcf for the three
-16-
<PAGE>
<PAGE>
months ended September 30, 1995 compared to $1.60 per Mcf for the
three months ended September 30, 1994, while average oil prices
increased to $19.10 per barrel for the three months ended
September 30, 1995 compared to an average of $17.51 per barrel
for the three months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $17,383 for the three
months ended September 30, 1995 as compared to the three months
ended September 30, 1994. This decrease resulted primarily from
lower production taxes due to the decrease in the volumes of oil
and natural gas sold 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. As a
percentage of oil and gas sales, these expenses increased to
37.3% for the three months ended September 30, 1995 from 15.3%
for the three months ended September 30, 1994. This percentage
increase was primarily a result of the decrease in the volumes
and average price of natural gas sold for 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 decreased $25,628 for the three months ended September
30, 1995 as compared to the three months ended September 30,
1994. This dollar decrease was primarily a result of (i) an
upward revision in the estimate of the 1979-2 Program's remaining
natural gas reserves and (ii) the decreases in the volumes of oil
and natural gas sold during 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
27.9% for the three months ended September 30, 1995 from 16.2%
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 for the three months ended September
30, 1995 as compared to the three months ended September 30,
1994.
General and administrative expenses remained relatively constant
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 14.0% for the three
months ended September 30, 1995 from 3.4% for the three months
ended September 30, 1994. This percentage increase was primarily
a result of the decreases in the volumes and average price of
natural gas sold during the three months ended September 30, 1995
-17-
<PAGE>
<PAGE>
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 $360,678 $779,252
Oil and gas production
expenses $ 83,098 $114,215
Barrels produced 1,001 2,526
Mcf produced 242,208 416,411
Average price/Bbl $ 16.99 $ 15.73
Average price/Mcf $ 1.42 $ 1.78
As shown in the table, oil and natural gas sales decreased by
53.7% 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 1,525 barrels and 174,203 Mcf for the
nine months ended September 30, 1995 as compared to the nine
months ended September 30, 1994. The decrease in the volumes of
oil sold was primarily a result of significant positive prior
period volume adjustments from a purchaser on one well during the
nine months ended September 30, 1994. The decrease in volumes of
natural gas sold primarily resulted from gas balancing
adjustments on an underproduced well during the nine months ended
September 30, 1994. Average natural gas prices decreased to
$1.42 per Mcf for the nine months ended September 30, 1995 from
$1.78 per Mcf for the nine months ended September 30, 1994, while
average oil prices increased to $16.99 per barrel for the nine
months ended September 30, 1995 from $15.73 per barrel for the
nine months ended September 30, 1994.
Oil and gas production expenses (including lease operating
expenses and production taxes) decreased $31,117 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This decrease resulted primarily from
lower production taxes due to 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, these expenses increased to
23.0% for the nine months ended September 30, 1995 from 14.7% for
the nine months ended September 30, 1994. This percentage
increase was primarily a result of the decreases in the volumes
and average price of natural gas sold for 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
-18-
<PAGE>
<PAGE>
properties decreased $72,196 for the nine months ended September
30, 1995 as compared to the nine months ended September 30, 1994.
This dollar decrease was primarily a result of (i) an upward
revision in the estimate of the 1979-2 Program's remaining
natural gas reserves and (ii) the decreases 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 increased
slightly to 24.6% for the nine months ended September 30, 1995
from 20.6% for the nine 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 nine months ended
September 30, 1995 as compared to the nine months ended September
30, 1994.
General and administrative expenses increased $2,386 for the nine
months ended September 30, 1995 as compared to the nine months
ended September 30, 1994. This increase resulted primarily from
an increase in the 1979-2 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 8.9% for the nine months ended
September 30, 1995 from 3.8% for the nine months ended September
30, 1994. This percentage increase was primarily a result of the
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.
-19-
<PAGE>
<PAGE>
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
-20-
<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 1979-1 LIMITED
PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1979-2 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
-21-
<PAGE>
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<NAME> DYCO OIL AND GAS PROGRAM 1979-1
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<PERIOD-TYPE> 9-MOS
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<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
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