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 33-10346-09 (1980-1)
33-10346-10 (1980-2)
DYCO 1980 OIL AND GAS PROGRAM
(TWO LIMITED PARTNERSHIPS)
(Exact Name of Registrant as specified in its charter)
41-1378908 (1980-1)
Minnesota 41-1385165 (1980-2)
(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 1980-1 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
---------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 90,318 $197,606
Accrued oil and gas sales 65,040 98,315
-------- --------
Total current assets $155,358 $295,921
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 378,928 471,863
DEFERRED CHARGE 126,390 126,390
-------- --------
$660,676 $894,174
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 6,101 $ 34,756
Gas imbalance payable 11,046 11,046
-------- --------
Total current liabilities $ 17,147 $ 45,802
ACCRUED LIABILITY $ 44,579 $ 44,579
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 40 units $ 5,990 $ 8,038
Limited Partners, issued and
outstanding, 4,000 units 592,960 795,755
-------- --------
Total Partners' capital $598,950 $803,793
-------- --------
$660,676 $894,174
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
2
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- --------
REVENUES:
Oil and gas sales $90,841 $149,689
Interest 1,865 2,001
------- --------
$92,706 $151,690
COSTS AND EXPENSES:
Oil and gas production $24,270 $ 27,346
Depreciation, depletion, and
amortization of oil and gas
properties 17,231 17,552
General and administrative
(Note 2) 14,799 16,278
------- --------
$56,300 $ 61,176
------- --------
NET INCOME $36,406 $ 90,514
======= ========
GENERAL PARTNER (1%) - net income $ 364 $ 905
======= ========
LIMITED PARTNERS (99%) - net income $36,042 $ 89,609
======= ========
NET INCOME PER UNIT $ 9.02 $ 22.40
======= ========
UNITS OUTSTANDING 4,040 4,040
======= ========
The accompanying condensed notes are an integral part of
these financial statements.
3
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-1 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- --------
REVENUES:
Oil and gas sales $213,669 $375,256
Interest 4,334 4,489
-------- --------
$218,003 $379,745
COSTS AND EXPENSES:
Oil and gas production $ 47,786 $ 64,793
Depreciation, depletion, and
amortization of oil and gas
properties 35,621 71,244
General and administrative
(Note 2) 36,439 39,139
-------- --------
$119,846 $175,176
-------- --------
NET INCOME $ 98,157 $204,569
======== ========
GENERAL PARTNER (1%) - net income $ 982 $ 2,046
======== ========
LIMITED PARTNERS (99%) - net income $ 97,175 $202,523
======== ========
NET INCOME PER UNIT $ 24.30 $ 50.64
======== ========
UNITS OUTSTANDING 4,040 4,040
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
4
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-1 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 $ 98,157 $204,569
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 35,621 71,244
Decrease in accrued oil and
gas sales 33,275 62,478
Decrease in accounts payable ( 28,655) ( 911)
-------- --------
Net cash provided by operating
activities $138,398 $337,380
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ 63,166 $ 1,256
Additions to oil and gas
properties ( 5,852) ( 972)
-------- --------
Net cash provided by investing
activities $ 57,314 $ 284
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($303,000) ($484,800)
-------- --------
Net cash used by financing
activities ($303,000) ($484,800)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($107,288) ($147,136)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 197,606 227,376
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 90,318 $ 80,240
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
5
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-2 LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
ASSETS
June 30, December 31,
1998 1997
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $218,137 $268,020
Accrued oil and gas sales 93,318 126,291
-------- --------
Total current assets $311,455 $394,311
NET OIL AND GAS PROPERTIES, utilizing
the full cost method 168,455 266,773
DEFERRED CHARGE 75,520 75,520
-------- --------
$555,430 $736,604
======== ========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 7,092 $ 39,922
Gas imbalance payable 71,205 71,205
-------- --------
Total current liabilities $ 78,297 $111,127
ACCRUED LIABILITY $133,166 $133,166
PARTNERS' CAPITAL:
General Partner, issued and
outstanding, 59 units $ 3,440 $ 4,923
Limited Partners, issued and
outstanding, 5,000 units 340,527 487,388
-------- --------
Total Partners' capital $343,967 $492,311
-------- --------
$555,430 $736,604
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
6
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $128,038 $227,229
Interest 5,080 3,621
-------- --------
$133,118 $230,850
COSTS AND EXPENSES:
Oil and gas production $ 30,829 $ 41,963
Depreciation, depletion, and
amortization of oil and gas
properties 19,871 22,344
General and administrative
(Note 2) 22,379 24,199
-------- --------
$ 73,079 $ 88,506
-------- --------
NET INCOME $ 60,039 $142,344
======== ========
GENERAL PARTNER (1%) - net income $ 601 $ 1,423
======== ========
LIMITED PARTNERS (99%) - net income $ 59,438 $140,921
======== ========
NET INCOME PER UNIT $ 11.87 $ 28.14
======== ========
UNITS OUTSTANDING 5,059 5,059
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
7
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-2 LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Unaudited)
1998 1997
-------- ---------
REVENUES:
Oil and gas sales $454,724 $493,396
Interest 8,530 7,479
-------- --------
$463,254 $500,875
COSTS AND EXPENSES:
Oil and gas production $ 69,962 $ 84,722
Depreciation, depletion, and
amortization of oil and gas
properties 58,298 69,839
General and administrative
(Note 2) 53,323 56,673
-------- --------
$181,583 $211,234
-------- --------
NET INCOME $281,671 $289,641
======== ========
GENERAL PARTNER (1%) - net income $ 2,817 $ 2,896
======== ========
LIMITED PARTNERS (99%) - net income $278,854 $286,745
======== ========
NET INCOME PER UNIT $ 55.68 $ 57.25
======== ========
UNITS OUTSTANDING 5,059 5,059
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
8
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-2 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 $281,671 $289,641
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion, and
amortization of oil and gas
properties 58,298 69,839
Decrease in accrued oil and
gas sales 32,973 53,483
Decrease in accounts payable ( 32,830) ( 2,512)
-------- --------
Net cash provided by operating
activities $340,112 $410,451
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of oil and
gas properties $ 46,116 $ 11,623
Additions to oil and gas
properties ( 6,096) ( 1,012)
-------- --------
Net cash provided by investing
activities $ 40,020 $ 10,611
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions ($430,015) ($581,785)
-------- --------
Net cash used by financing
activities ($430,015) ($581,785)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($ 49,883) ($160,723)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 268,020 369,731
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $218,137 $209,008
======== ========
The accompanying condensed notes are an integral part of
these financial statements.
9
<PAGE>
DYCO OIL AND GAS PROGRAM 1980-1 LIMITED PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1980-2 LIMITED PARTNERSHIP
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
1. ACCOUNTING POLICIES
-------------------
The balance sheets 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 1980-1 and 1980-2 Limited Partnerships (individually,
the "1980-1 Program" or the "1980-2 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.
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 1980-1 Program incurred such expenses totaling $14,799 and
$16,278, respectively, of which $14,022 was paid each period to Dyco and
its affiliates. During the six months ended June 30, 1998 and 1997 the
1980-1 Program incurred such expenses totaling $36,439 and $39,139,
respectively, of which $28,044 was paid each period to Dyco and its
affiliates. During the three months ended June 30, 1998 and 1997 the
1980-2 Program incurred such expenses totaling $22,379 and $24,199,
respectively, of which $21,405 was paid each period to Dyco and its
affiliates. During the six months ended June 30, 1998 and 1997 the 1980-2
Program incurred such expenses totaling $53,323 and $56,673, respectively,
of which $42,810 was paid each period to Dyco and its affiliates.
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.
11
<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 Programs.
Use of forward-looking statements and estimates and assumptions involve
risks and uncertainties which include, but are not limited to, the
volatility of oil and gas prices, the uncertainty of reserve information,
the operating risk associated with oil and gas properties (including the
risk of personal injury, death, property damage, damage to the well or
producing reservoir, environmental contamination, and other operating
risks), the prospect of changing tax and regulatory laws, the availability
and capacity of processing and transportation facilities, the general
economic climate, the supply and price of foreign imports of oil and gas,
the level of consumer product demand, and the price and availability of
alternative fuels. Should one or more of these risks or uncertainties
occur or should estimates or underlying assumptions prove incorrect,
actual conditions or results may vary materially and adversely from those
stated, anticipated, believed, estimated, 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.
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.
12
<PAGE>
The Programs' Statements of Cash Flows for the six months ended June 30,
1998 include proceeds from the sale of oil and gas properties during the
first quarter of 1998. These proceeds were included in the Programs' cash
distributions paid in June 1998. It is possible that the Programs'
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 Programs' 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 Programs' 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 in the
"spot market". Prices on the spot market are subject to wide seasonal and
regional pricing fluctuations due to the highly competitive nature of the
spot market. 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.
1980-1 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 $90,841 $149,689
Oil and gas production expenses $24,270 $ 27,346
Barrels produced 376 470
Mcf produced 39,597 57,368
Average price/Bbl $ 11.95 $ 20.66
Average price/Mcf $ 2.18 $ 2.44
13
<PAGE>
As shown in the table above, total oil and gas sales decreased $58,848
(39.3%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $43,000 was
related to a decrease in volumes of gas sold and approximately $10,000 was
related to a decrease in the average price of gas sold. Volumes of oil and
gas sold decreased 94 barrels and 17,771 Mcf, respectively, for the three
months ended June 30, 1998 as compared to the three months ended June 30,
1997. The decrease in the volumes of gas sold resulted primarily from the
1980-1 Program receiving a reduced percentage of sales due to the 1980-1
Program's overproduced position in two wells during the three months ended
June 30, 1998 and the sale of several wells during 1997. Average oil and
gas prices decreased to $11.95 per barrel and $2.18 per Mcf, respectively,
for the three months ended June 30, 1998 from $20.66 per barrel and $2.44
per Mcf, respectively, for the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $3,076 (11.2%) for the three months ended June
30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from decreased production taxes associated
with the decrease in oil and gas sales and decreased lease operating
expenses due to the sale of several wells during 1997. These decreases
were partially offset by a production tax refund on one well during the
three months ended June 30, 1997. As a percentage of oil and gas sales,
these expenses increased to 26.7% for the three months ended June 30, 1998
from 18.3% for the three months ended June 30, 1997. This percentage
increase was primarily due to the decrease in the average prices of oil
and gas sold during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997 and the production tax refund
discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $321 (1.8%) for the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997. This decrease resulted primarily
from (i) decreases 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) significant upward revisions in the estimates of remaining gas
reserves at December 31, 1997, which decreases were substantially offset
by an increase related to a decrease in 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. As a percentage of oil and gas sales, this
expense increased to 19.0% for the three months ended June 30, 1998 from
11.7% for the three months ended June 30, 1997. This percentage
14
<PAGE>
increase was primarily due to the decreases in the average prices of oil
and gas sold during the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997.
General and administrative expenses decreased $1,479 (9.1%) 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
16.3% for the three months ended June 30, 1998 from 10.9% for the three
months ended June 30, 1997. This percentage increase was primarily due to
the decrease in oil and gas sales discussed above.
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 $213,669 $375,256
Oil and gas production expenses $ 47,786 $ 64,793
Barrels produced 821 957
Mcf produced 94,010 152,352
Average price/Bbl $ 13.93 $ 21.50
Average price/Mcf $ 2.15 $ 2.33
As shown in the table above, total oil and gas sales decreased $161,587
(43.1%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $136,000 was
related to a decrease in volumes of gas sold and approximately $17,000 was
related to a decrease in the average price of gas sold. Volumes of oil and
gas sold decreased 136 barrels and 58,342 Mcf, respectively, for the six
months ended June 30, 1998 as compared to the six months ended June 30,
1997. The decrease in the volumes of gas sold resulted primarily from (i)
positive prior period volume adjustments made by purchasers on two wells
during the six months ended June 30, 1997, (ii) the 1980-1 Program
receiving a reduced percentage of sales on one well during the six months
ended June 30, 1998 due to the 1980-1 Program's overproduced position in
that well, and (iii) negative prior period volume adjustments made by a
purchaser on one well during the six months ended June 30, 1998. Average
oil and gas prices decreased to $13.93 per barrel and $2.15 per Mcf,
respectively, for the six months ended June 30, 1998 from $21.50 per
barrel and $2.33 per Mcf, respectively, for the six months ended June 30,
1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $17,007 (26.2%) for the six months ended June
30, 1998 as compared to the six
15
<PAGE>
months ended June 30, 1997. This decrease resulted primarily from a
decrease in production taxes associated with the decrease in oil and gas
sales and a refund of ad valorem taxes on one well during the six months
ended June 30, 1998. As a percentage of oil and gas sales, these expenses
increased to 22.4% for the six months ended June 30, 1998 from 17.3% for
the six months ended June 30, 1997. This percentage increase was primarily
due to the decrease 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 $35,623 (50%) for the six months ended June 30, 1998 as compared
to the six months ended June 30, 1997. This decrease resulted primarily
from decreases in the volumes of gas sold during the six months ended June
30, 1998 as compared to the six months ended June 30, 1997 and significant
upward revisions in the estimates of remaining gas reserves at December
31, 1997. As a percentage of oil and gas sales, these expenses decreased
to 16.7% for the six months ended June 30, 1998 from 19.0% 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 $2,700 (6.9%) 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
17.1% for the six months ended June 30, 1998 from 10.4% for the six months
ended June 30, 1997. This percentage increase was primarily due to the
decrease in oil and gas sales discussed above.
1980-2 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 $128,038 $227,229
Oil and gas production expenses $ 30,829 $ 41,963
Barrels produced 390 341
Mcf produced 56,115 110,765
Average price/Bbl $ 13.07 $ 21.02
Average price/Mcf $ 2.19 $ 1.99
As shown in the table above, total oil and gas sales decreased $99,190
(43.7%) for the three months ended June 30, 1998 as compared to the three
months ended June 30, 1997. Of this decrease, approximately $109,000, was
related
16
<PAGE>
to a decrease in volumes of gas sold, which decrease was partially offset
by an increase of approximately $11,000 related to an increase in the
average price of gas sold. Volumes of oil sold increased 49 barrels, while
volumes of gas sold decreased 54,650 Mcf for the three months ended June
30, 1998 as compared to the three months ended June 30, 1997. The decrease
in the volumes of gas sold resulted primarily from the sale of several
wells during 1997 and the receipt of a reduced percentage of sales during
the three months ended June 30, 1998 due to the 1980-2 Program's
overproduced position in three wells. Average oil prices decreased to
$13.07 per barrel for the three months ended June 30, 1998 from $21.02 per
barrel for the three months ended June 30, 1997. Average gas prices
increased to $2.19 per Mcf for the three months ended June 30, 1998 from
$1.99 per Mcf for the three months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $11,134 (26.5%) for the three months ended
June 30, 1998 as compared to the three months ended June 30, 1997. This
decrease resulted primarily from (i) workover expenses incurred on one
well during the three months ended June 30, 1997 to improve the recovery
of reserves, (ii) decreased production taxes associated with the decrease
in oil and gas sales, (iii) credits received from the operator on one well
during the three months ended June 30, 1998, and (iv) the sale of several
wells during 1997. These decreases were partially offset by an increase in
general repair and maintenance expenses on several wells during the three
months ended June 30, 1998. As a percentage of oil and gas sales, these
expenses increased to 24.1% for the three months ended June 30, 1998 from
18.5% for the three months ended June 30, 1997. This percentage increase
was primarily due to the increase in general repair and maintenance
expenses discussed above.
Depreciation, depletion, and amortization of oil and gas properties
decreased $2,473 (11.1%) for the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997. This decrease resulted
primarily from (i) 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 and (ii) significant upward revisions in estimates of remaining gas
reserves at December 31, 1997. These decreases were partially offset by an
increase related to a decrease in the 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. As a percentage of oil and gas sales, this
expense increased to 15.5% for the three months ended June 30, 1998 from
9.8% for the three months ended June 30, 1997. This percentage increase
was primarily due to the decrease in the gas prices
17
<PAGE>
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 as discussed
above.
General and administrative expenses decreased $1,820 (7.5%) 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
17.5% for the three months ended June 30, 1998 from 10.6% for the three
months ended June 30, 1997. This percentage increase was primarily due to
the decrease in oil and gas sales as discussed above.
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 $454,724 $493,396
Oil and gas production expenses $ 69,962 $ 84,722
Barrels produced 717 728
Mcf produced 222,191 221,104
Average price/Bbl $ 14.27 $ 21.60
Average price/Mcf $ 2.00 $ 2.16
As shown in the table above, total oil and gas sales decreased $38,672
(7.8%) for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997. Of this decrease, approximately $5,000 and
$35,000, respectively, were related to decreases in the average prices of
oil and gas sold. Volumes of oil sold decreased 11 barrels, while volumes
of gas sold increased 1,087 Mcf for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997. Average oil and gas prices
decreased to $14.27 per barrel and $2.00 per Mcf, respectively, for the
six months ended June 30, 1998 from $21.60 per barrel and $2.16 per Mcf,
respectively, for the six months ended June 30, 1997.
Oil and gas production expenses (including lease operating expenses and
production taxes) decreased $14,760 (17.4%) for the six months ended June
30, 1998 as compared to the six months ended June 30, 1997. This decrease
resulted primarily from (i) workover expenses incurred on one well during
the six months ended June 30, 1997 to improve the recovery of reserves,
(ii) a refund of ad valorem taxes on one well received during the six
months ended June 30, 1998, and (iii) subsurface repair expenses incurred
on one well during the six months ended June 30, 1997. As a percentage of
oil and gas sales, these expenses decreased to 15.4% for
18
<PAGE>
the six months ended June 30, 1998 from 17.2% for the six months ended
June 30, 1997.
Depreciation, depletion, and amortization of oil and gas properties
decreased $11,541 (16.5%) for the six months ended June 30, 1998 as
compared to the June 30, 1997. This decrease resulted primarily from
significant upward revisions in estimates of remaining gas reserves at
December 31, 1997. As a percentage of oil and gas sales, this expense
decreased to 12.8% for the six months ended June 30, 1998 from 14.2% for
the six months ended June 30, 1997.
General and administrative expenses decreased $3,350 (5.9%) 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 remained
relatively constant at 11.7% for the six months ended June 30, 1998 and
11.5% for the six months ended June 30, 1997.
19
<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 1980-1 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 1980-2 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.
20
<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 1980-1 LIMITED
PARTNERSHIP
DYCO OIL AND GAS PROGRAM 1980-2 LIMITED
PARTNERSHIP
(Registrant)
BY: DYCO PETROLEUM CORPORATION
General Partner
Date: August 11, 1998 By: /s/Dennis R. Neill
-------------------------------
(Signature)
Dennis R. Neill
President
Date: August 11, 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 1980-1 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 1980-2 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> 0000806576
<NAME> DYCO OIL & GAS PROGRAM 1980-1 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> 90,318
<SECURITIES> 0
<RECEIVABLES> 65,040
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 155,358
<PP&E> 29,689,870
<DEPRECIATION> 29,310,942
<TOTAL-ASSETS> 660,676
<CURRENT-LIABILITIES> 17,147
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 598,950
<TOTAL-LIABILITY-AND-EQUITY> 660,676
<SALES> 213,669
<TOTAL-REVENUES> 218,003
<CGS> 0
<TOTAL-COSTS> 119,846
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 98,157
<INCOME-TAX> 0
<INCOME-CONTINUING> 98,157
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 98,157
<EPS-PRIMARY> 24.3
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000806577
<NAME> DYCO OIL & GAS PROGRAM 1980-2 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> 218,137
<SECURITIES> 0
<RECEIVABLES> 93,318
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 311,455
<PP&E> 35,351,312
<DEPRECIATION> 35,182,857
<TOTAL-ASSETS> 555,430
<CURRENT-LIABILITIES> 78,297
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 343,967
<TOTAL-LIABILITY-AND-EQUITY> 555,430
<SALES> 454,724
<TOTAL-REVENUES> 463,254
<CGS> 0
<TOTAL-COSTS> 181,583
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 281,671
<INCOME-TAX> 0
<INCOME-CONTINUING> 281,671
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 281,671
<EPS-PRIMARY> 55.68
<EPS-DILUTED> 0
</TABLE>
