SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended Commission File Number
June 30, 1998 33-10346-07 (1979-1)
33-10346-08 (1979-2)
DYCO 1979 OIL AND GAS PROGRAM
(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 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
------ ------
1
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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
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 32,337 $ 70,498
Accrued oil and gas sales 48,982 69,687
-------- --------
Total current assets $ 81,319 $140,185
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 142,907 179,341
DEFERRED CHARGE 48,506 48,506
-------- --------
$272,732 $368,032
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 3,307 $ 2,778
Gas imbalance payable 105 105
-------- --------
Total current liabilities $ 3,412 $ 2,883
ACCRUED LIABILITY $ 37,026 $ 37,026
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 32 units $ 2,323 $ 3,282
Limited Partners, issued and
outstanding, 3,140 units 229,971 324,841
-------- --------
Total Partners' capital $232,294 $328,123
-------- --------
$272,732 $368,032
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
2
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- --------
REVENUES:
Oil and gas sales $78,816 $91,069
Interest 2,367 1,123
------- -------
$81,183 $92,192
COST AND EXPENSES:
Oil and gas production $13,651 $16,866
Depreciation, depletion, and
amortization of oil and gas
properties 7,837 5,667
General and administrative
(Note 2) 11,741 12,879
------- -------
$33,229 $35,412
------- -------
NET INCOME $47,954 $56,780
======= =======
GENERAL PARTNER (1%) - net income $ 479 $ 568
======= =======
LIMITED PARTNERS (99%) - net income $47,475 $56,212
======= =======
NET INCOME PER UNIT $ 15.12 $ 17.90
======= =======
UNITS OUTSTANDING 3,172 3,172
======= =======
The accompanying condensed notes are an integral part of
these financial statements.
3
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- --------
REVENUES:
Oil and gas sales $163,896 $237,962
Interest 3,404 1,900
Gain on sale of oil and
gas properties 145,376 -
-------- --------
$312,676 $239,862
COST AND EXPENSES:
Oil and gas production $ 31,525 $ 40,480
Depreciation, depletion, and
amortization of oil and gas
properties 15,068 26,953
General and administrative
(Note 2) 28,852 30,947
-------- --------
$ 75,445 $ 98,380
-------- --------
NET INCOME $237,231 $141,482
======== ========
GENERAL PARTNER (1%) - net income $ 2,372 $ 1,415
======== ========
LIMITED PARTNERS (99%) - net income $234,859 $140,067
======== ========
NET INCOME PER UNIT $ 74.79 $ 44.60
======== ========
UNITS OUTSTANDING 3,172 3,172
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
4
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-1 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $237,231 $141,482
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion, and
amortization of oil and gas
properties 15,068 26,953
Gain on sale of oil and gas
properties ( 145,376) -
Decrease in accrued oil and
gas sales 20,705 38,453
Increase (decrease) in accounts
payable 529 ( 253)
-------- --------
Net cash provided by operating
activities $128,157 $206,635
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $166,742 $ 346
-------- --------
Net cash provided by investing
activities $166,742 $ 346
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($333,060) ($237,900)
-------- --------
Net cash used by financing
activities ($333,060) ($237,900)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 38,161) ($ 30,919)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 70,498 59,449
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 32,337 $ 28,530
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
5
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $171,600 $157,539
Accrued oil and gas sales 76,895 81,158
-------- --------
Total current assets $248,495 $238,697
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 244,856 283,007
DEFERRED CHARGE 38,072 38,072
-------- --------
$531,423 $559,776
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 4,944 $ 6,190
Gas imbalance payable 53,853 53,853
-------- --------
Total current liabilities $ 58,797 $ 60,043
ACCRUED LIABILITY $ 557 $ 557
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 29 units $ 4,721 $ 4,992
Limited Partners, issued and
outstanding, 2,860 units 467,348 494,184
-------- --------
Total Partners' capital $472,069 $499,176
-------- --------
$531,423 $559,776
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
6
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- --------
REVENUES:
Oil and gas sales $151,895 $156,716
Interest 2,189 2,310
-------- --------
$154,084 $159,026
COST AND EXPENSES:
Oil and gas production $ 23,965 $ 27,702
Depreciation, depletion, and
amortization of oil and gas
properties 22,148 17,976
General and administrative
(Note 2) 8,359 9,480
-------- --------
$ 54,472 $ 55,158
-------- --------
NET INCOME $ 99,612 $103,868
======== ========
GENERAL PARTNER (1%) - net income $ 996 $ 1,039
======== ========
LIMITED PARTNERS (99%) - net income $ 98,616 $102,829
======== ========
NET INCOME PER UNIT $ 34.48 $ 35.95
======== ========
UNITS OUTSTANDING 2,889 2,889
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
7
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- --------
REVENUES:
Oil and gas sales $277,444 $359,253
Interest 4,384 3,880
-------- --------
$281,828 $363,133
COST AND EXPENSES:
Oil and gas production $ 47,488 $ 60,078
Depreciation, depletion, and
amortization of oil and gas
properties 37,608 58,539
General and administrative
(Note 2) 21,609 23,601
-------- --------
$106,705 $142,218
-------- --------
NET INCOME $175,123 $220,915
======== ========
GENERAL PARTNER (1%) - net income $ 1,751 $ 2,209
======== ========
LIMITED PARTNERS (99%) - net income $173,372 $218,706
======== ========
NET INCOME PER UNIT $ 60.62 $ 76.47
======== ========
UNITS OUTSTANDING 2,889 2,889
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
8
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $175,123 $220,915
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 37,608 58,539
Decrease in accrued oil and
gas sales 4,263 65,737
Decrease in accounts payable ( 1,246) ( 5,203)
-------- --------
Net cash provided by operating
activities $215,748 $339,988
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ 543 $ 567
Additions to oil and gas properties - ( 84)
-------- --------
Net cash provided by investing
activities $ 543 $ 483
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($202,230) ($303,345)
-------- --------
Net cash used by financing
activities ($202,230) ($303,345)
-------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS $ 14,061 $ 37,126
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 157,539 123,603
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $171,600 $160,729
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
9
<PAGE>
DYCO OIL AND GAS PROGRAM 1979-1 LIMITED PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1979-2 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheet as of June 30, 1998, statements of operations for the
three and six months ended June 30, 1998 and 1997, and statements of cash
flows for the six months ended June 30, 1998 and 1997 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 June 30, 1998,
results of operations for the three and six months ended June 30, 1998 and
1997, and changes in cash flows for the six months ended June 30, 1998 and
1997 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, 1997. The results of operations for the period
ended June 30, 1998 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
10
<PAGE>
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. During the three months ended March 31, 1998,
the 1979-1 Program sold several wells for $162,007 representing
approximately 9.3% of its total reserves. These sales significantly
altered the 1979-1 Program's capitalized cost/proved reserves
relationship. Accordingly, capitalized costs were reduced by 9.3% with the
remainder recorded as Gain on Sale of Oil and Gas Properties. During the
three months ended June 30, 1998, the 1979-1 Program sold an additional
well for $4,735. This sale did not significantly alter the 1979-1
Program's capitalized cost/proved reserves relationship.
The provision for depreciation, depletion, and amortization of oil and gas
properties is calculated by dividing the oil and gas sales dollars during
the period by the estimated future gross income from the oil and gas
properties and applying the resulting rate to the net remaining costs of
oil and gas properties that have been capitalized, plus estimated future
development costs.
2. TRANSACTIONS WITH RELATED PARTIES
---------------------------------
Under the terms of each of the Program's partnership agreement, Dyco is
entitled to receive a reimbursement for all direct expenses and general
and administrative, geological and engineering expenses it incurs on
behalf of the Program. During the three months ended June 30, 1998 and
1997 the 1979-1 Program incurred such expenses totaling $11,741 and
$12,879, respectively, of which $11,130 was paid each period to Dyco and
its affiliates. During the six months ended June 30, 1998 and 1997 the
1979-1 Program incurred such expenses totaling $28,852 and $30,947,
respectively, of which $22,260 was paid each period to Dyco and its
affiliates. During the three months ended June 30, 1998 and 1997 the
1979-2 Program incurred such expenses totaling $8,359 and $9,480,
respectively, of which $7,803 was paid each period to Dyco and its
affiliates. During the six months ended June 30, 1998 and 1997 the 1979-2
Program incurred such expenses totaling $21,609 and $23,601, respectively,
of which $15,606 was paid each period to Dyco and its affiliates.
11
<PAGE>
Affiliates of the Programs operate certain of the Programs' properties.
Their policy is to bill the Programs for all customary charges and cost
reimbursements associated with these activities.
12
<PAGE>
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 Program.
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, and 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.
13
<PAGE>
The Programs' available capital from subscriptions has been spent on oil
and gas drilling activities. There should be no further material capital
resource commitments in the future. The Programs have no debt commitments.
Cash for operational purposes will be provided by current oil and gas
production.
The 1979-1 Program's Statement of Cash Flows for the six months ended June
30, 1998 includes proceeds from the sale of oil and gas properties during
the first quarter of 1998. These proceeds were included in the 1979-1
Program's cash distributions paid in June 1998. It is possible that the
1979-1 Program's repurchase values and future cash distributions could
decline as a result of the disposition of these properties. On the other
hand, the General Partner believes there will be beneficial operating
efficiencies related to the 1979-1 Program's remaining properties. This is
primarily due to the fact that the properties sold generally bore a higher
ratio of operating expenses as compared to reserves than the 1979-1
Program's remaining properties.
RESULTS OF OPERATIONS
- ---------------------
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 on 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. Such spot market sales are generally short-term in nature and
are dependent upon the obtaining of transportation services provided by
pipelines. In addition, crude oil prices are at or near their lowest level
in the past decade due primarily to the global surplus of crude oil.
Management is unable to predict whether future oil and gas prices will (i)
stabilize, (ii) increase, or (iii) decrease.
14
<PAGE>
1979-1 PROGRAM
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
------- -------
Oil and gas sales $78,816 $91,069
Oil and gas production expenses $13,651 $16,866
Barrels produced 61 75
Mcf produced 41,034 47,242
Average price/Bbl $ 12.75 $ 19.79
Average price/Mcf $ 1.90 $ 1.90
As shown in the table above, total oil and gas sales decreased $12,253
(13.5%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. This decrease was primarily related to a
decrease in volumes of gas sold. Volumes of oil and gas sold decreased 14
barrels and 6,208 Mcf, respectively, for the three months ended June 30,
1998 as compared to the three months ended June 30, 1997. The decrease in
volumes of gas sold resulted primarily from a normal decline in production
on two significant wells during the three months ended June 30, 1998.
Average oil prices decreased to $12.75 per barrel for the three months
ended June 30, 1998 from $19.79 per barrel for the three months ended June
30, 1997. Average gas prices remained constant at $1.90 per Mcf for the
three months ended June 30, 1998 and the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $3,215 (19.1%) for the three months ended June
30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) a decrease in lease operating
expenses associated with the decrease in volumes of gas sold during the
three months ended June 30, 1998 as compared to the three months ended
June 30, 1997, (ii) a decrease in production taxes associated with the
decrease in oil and gas sales discussed above, and (iii) credits received
during the three months ended June 30, 1998 from an operator for prior
period operating expenses on one well which was sold in late 1997. As a
percentage of oil and gas sales, these expenses decreased to 17.3% for the
three months ended June 30, 1998 from 18.5% for the three months ended
June 30, 1997.
15
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
increased $2,170 (38.3%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This increase resulted
primarily from a decrease in the oil and gas prices used in the valuation
of reserves at June 30, 1998 as compared to March 31, 1998 and an increase
in the gas prices used in the valuation of reserves at June 30, 1997 as
compared to March 31, 1997, which increase was partially offset by
significant upward revisions in the estimates of remaining gas reserves at
December 31, 1997. As a percentage of oil and gas sales, this expense
increased to 9.9% for the three months ended June 30, 1998 from 6.2% for
the three months ended June 30, 1997. This percentage decrease was
primarily due to the dollar increase in depreciation, depletion, and
amortization discussed above.
General and administrative expenses decreased $1,138 (8.8%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
14.9% for the three months ended June 30, 1998 from 14.1% for the three
months ended June 30, 1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- --------
Oil and gas sales $163,896 $237,962
Oil and gas production expenses $ 31,525 $ 40,480
Barrels produced 149 172
Mcf produced 84,286 105,377
Average price/Bbl $ 14.15 $ 20.71
Average price/Mcf $ 1.92 $ 2.22
As shown in the table above, total oil and gas sales decreased $74,066
(31.1%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $47,000 was
related to a decrease in volumes of gas sold and approximately $25,000 was
related to a decrease in the average price of gas sold. Volumes of oil and
gas sold decreased 23 barrels and 21,091 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decrease in volumes of gas sold resulted primarily from (i)
normal declines in production on several wells and (ii) a negative prior
period volume adjustment made by the purchaser on two wells during the six
months ended June 30, 1998. Average oil and gas prices decreased to $14.15
per barrel and $1.92 per Mcf, respectively, for the six months ended June
30, 1998
16
<PAGE>
from $20.71 per barrel and $2.22 per Mcf, respectively, for the six months
ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $8,955 (22.1%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from a decrease in production taxes associated with the
decrease in oil and gas sales discussed above and a decrease in lease
operating expenses associated with the decrease in the volumes of gas sold
during the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997. As a percentage of oil and gas sales, these expenses
increased to 19.2% for the six months ended June 30, 1998 from 17.0% for
the six months ended June 30, 1997. This percentage increase was primarily
due to the decreases in the average prices of oil and gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $11,885 (44.1%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) significant upward revisions in the estimates of
remaining gas reserves at December 31, 1997 and (ii) the decreases in
volumes of oil and gas sold during the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. As a percentage of oil and
gas sales, this expense decreased to 9.2% for the six months ended June
30, 1998 from 11.3% for the six months ended June 30, 1997. This
percentage decrease was primarily due to the upward revisions in the
estimates of remaining gas reserves at December 31, 1997.
General and administrative expenses decreased $2,095 (6.8%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
17.6% for the six months ended June 30, 1998 from 13.0% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
17
<PAGE>
1979-2 PROGRAM
THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1997.
Three Months Ended June 30,
---------------------------
1998 1997
-------- --------
Oil and gas sales $151,895 $156,716
Oil and gas production expenses $ 23,965 $ 27,702
Barrels produced 265 298
Mcf produced 65,130 72,529
Average price/Bbl $ 12.73 $ 21.40
Average price/Mcf $ 2.28 $ 2.07
As shown in the table above, total oil and gas sales decreased $4,821
(3.1%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $15,000 was
related to a decrease in volumes of gas sold and approximately $2,000 was
related to a decrease in the average price of oil sold, which decreases
were partially offset by an increase of approximately $13,000 related to
an increase in the average price of gas sold. Volumes of oil and gas sold
decreased 33 barrels and 7,399 Mcf, respectively, for the three months
ended June 30, 1998 as compared to the three months ended June 30, 1997.
The decrease in volumes of gas sold resulted primarily from the normal
decline in production on one significant well during the three months
ended June 30, 1998. Average oil prices decreased to $12.73 per barrel for
the three months ended June 30, 1998 from $21.40 per barrel for the three
months ended June 30, 1997. Average gas prices increased to $2.28 per Mcf
for the three months ended June 30, 1998 from $2.07 per Mcf for the three
months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $3,737 (13.5%) for the three months ended June
30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) the decrease in volumes of oil and
gas sold during the three months ended June 30, 1998 as compared to the
three months ended June 30, 1997 and (ii) a decrease in production taxes
associated with the decrease in oil and gas sales. As a percentage of oil
and gas sales, these expenses decreased to 15.8% for the three months
ended June 30, 1998 from 17.7% for the three months ended June 30, 1997.
18
<PAGE>
Depreciation, depletion, and amortization of oil and gas properties
increased $4,172 (23.2%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This increase resulted
primarily from a decrease in the oil and gas prices used in the valuation
of reserves at June 30, 1998 as compared to March 31, 1998 and an increase
in the gas prices used in the valuation of reserves at June 30, 1997 as
compared to March 31, 1997, which was partially offset by significant
upward revisions in the estimates of remaining gas reserves at December
31, 1997. As a percentage of oil and gas sales, this expense increased to
14.6% for the three months ended June 30, 1998 from 11.5% for the three
months ended June 30, 1997. This percentage increase was primarily due to
the dollar increase in depreciation, depletion, and amortization discussed
above.
General and administrative expenses decreased $1,121 (11.8%) for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. This decrease resulted primarily from a decrease in professional
fees during the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. As a percentage of oil and gas sales, these
expenses decreased to 5.5% for the three months ended June 30, 1998 from
6.0% for the three months ended June 30, 1997.
SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS ENDED JUNE
30, 1997.
Six Months Ended June 30,
-------------------------
1998 1997
-------- --------
Oil and gas sales $277,444 $359,253
Oil and gas production expenses $ 47,488 $ 60,078
Barrels produced 593 562
Mcf produced 119,669 142,616
Average price/Bbl $ 14.26 $ 21.80
Average price/Mcf $ 2.25 $ 2.43
As shown in the table above, total oil and gas sales decreased $81,809
(22.8%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $22,000 was
related to a decrease in the average price of gas sold and approximately
$56,000 was related to a decrease in volumes of gas sold. Volumes of oil
sold increased 31 barrels, while volumes of gas sold decreased 22,947 Mcf
for the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997. The decrease in volumes of gas sold resulted primarily from
a negative prior period volume adjustment made by a purchaser on one well
during the six months ended June 30, 1998. Average oil and gas prices
decreased to $14.26 per barrel and
19
<PAGE>
$2.25 per Mcf, respectively, for the six months ended June 30, 1998 from
$21.80 per barrel and $2.43 per Mcf, respectively, for the six months
ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $12,590 (21.0%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) the decrease in volumes of gas sold during the
six months ended June 30, 1998 as compared to the six months ended June
30, 1997 and (ii) a decrease in production taxes associated with the
decrease in oil and gas sales discussed above. As a percentage of oil and
gas sales, these expenses increased to 17.1% for the six months ended June
30, 1998 from 16.7% for the six months ended June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $20,931 (35.8%) for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. This decrease resulted
primarily from (i) significant upward revisions in the estimates of
remaining oil and gas reserves at December 31, 1997 and (ii) decreases in
volumes of oil and gas sold during the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. As a percentage of oil and
gas sales, this expense decreased to 13.6% for the six months ended June
30, 1998 from 16.3% for the six months ended June 30, 1997. This
percentage decrease was primarily due to the upward revisions in the
estimates of remaining oil and gas reserves at December 31, 1997.
General and administrative expenses decreased $1,992 (8.4%) for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. As a percentage of oil and gas sales, these expenses increased to
7.8% for the six months ended June 30, 1998 from 6.6% for the six months
ended June 30, 1997.
20
<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 1979-1 Program's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial
information extracted from the 1979-2 Program's
financial statements as of June 30, 1998 and for the six
months ended June 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
(b) Reports on Form 8-K.
None.
AP
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: August 5, 1998 By: /s/Dennis R. Neill
-------------------------------
(Signature)
Dennis R. Neill
President
Date: August 5, 1998 By: /s/Patrick M. Hall
-------------------------------
(Signature)
Patrick M. Hall
Chief Financial Officer
21
<PAGE>
INDEX TO EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule containing summary financial information
extracted from the Dyco Oil and Gas Program 1979-1 Limited
Partnership's financial statements as of June 30, 1998 and for the
six months ended June 30, 1998, filed herewith.
27.2 Financial Data Schedule containing summary financial information
extracted from the Dyco Oil and Gas Program 1979-2 Limited
Partnership's financial statements as of June 30, 1998 and for the
six months ended June 30, 1998, filed herewith.
All other exhibits are omitted as inapplicable.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000806573
<NAME> Dyco Oil & Gas Program 1979-1 Limited Partnership
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Jun-30-1998
<CASH> 8,972
<SECURITIES> 23,365
<RECEIVABLES> 48,982
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 81,319
<PP&E> 20,391,522
<DEPRECIATION> 20,248,615
<TOTAL-ASSETS> 272,732
<CURRENT-LIABILITIES> 3,412
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 232,294
<TOTAL-LIABILITY-AND-EQUITY> 272,732
<SALES> 163,896
<TOTAL-REVENUES> 312,676
<CGS> 0
<TOTAL-COSTS> 75,445
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 237,231
<INCOME-TAX> 0
<INCOME-CONTINUING> 237,231
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 237,231
<EPS-PRIMARY> 74.79
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000806574
<NAME> Dyco Oil & Gas Program 1979-2 Limited Partnership
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Jun-30-1998
<CASH> 9,386
<SECURITIES> 162,214
<RECEIVABLES> 76,895
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 248,495
<PP&E> 18,553,949
<DEPRECIATION> 18,309,093
<TOTAL-ASSETS> 531,423
<CURRENT-LIABILITIES> 58,797
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 472,069
<TOTAL-LIABILITY-AND-EQUITY> 531,423
<SALES> 277,444
<TOTAL-REVENUES> 281,828
<CGS> 0
<TOTAL-COSTS> 106,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 175,123
<INCOME-TAX> 0
<INCOME-CONTINUING> 175,123
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 175,123
<EPS-PRIMARY> 60.62
<EPS-DILUTED> 0
</TABLE>
