SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ Quarterly Report Pursuant to Section 13 or 15(d)of the Securities
Exchange Act of 1934
For the Quarterly Period Ended June 30, 1996
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period Ended______________________
Commission File Number 2-784441
STERLING GAS DRILLING FUND 1982
(Exact name of registrant as specified in charter)
New York
(State or other jurisdiction of incorporation or organization)
13-3147901
(IRS employer identification number)
One Landmark Square, Stamford Connecticut 06901
(Address and Zip Code of principal executive offices)
(203) 358-5700
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
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
PART I
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - June 30, 1996 and December 31, 1995.
Statements of Operations for the Six and the Three Months Ended June 30, 1996
and 1995.
Statements of Changes in Partners' Equity for the Six and the Three Months
Ended June 30, 1996 and 1995
Statements of Cash Flows for the Six Months Ended June 30, 1996 and 1995.
Note to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
1. Liquidity -
The oil and gas industry is intensely competitive in all its phases. There
is also competition among this industry and other industries in supplying
energy and fuel requirements of industrial and individual consumers. It is
not possible for the Registrant to calculate its position in the industry
as Registrant competes with many other companies having substantially
greater financial and other resources. In accordance with the terms of the
Prospectus, the General Partners of the Registrant will make cash
distributions of as much of the Partnership cash, credited to the capital
accounts of the Partners, as the General Partners have determined is not
necessary or desirable for the payment of any contingent debts, liabilities
or expenses or for the conduct of the Partnership's business. As of June
30, 1996, the General Partners have distributed to the Limited Partners
$1,402,512 or 9.76% of total limited partner capital contributions to the
Limited Partners.
The net proved oil and gas reserves of the Partnership are considered to be
a primary indicator of financial strength and future liquidity. The
present value of unescalated estimated future net revenues (SEC case)
associated with such reserves, discounted at 10% as of December 31, 1995
was approximately $664,000 as compared to the reserves as of December 31,
1994 which were approximately $415,000. The increase in total estimated
discounted future net revenue was due primarily to higher year end gas
prices as of December 31, 1995, when compared to the low gas price as of
December 31, 1994. It is the opinion of management, and the general
consensus in the industry, that gas prices are unlikely to decline
significantly below the December 31, 1995 price in the near future.
However, there can be no assurances that such price declines will not
occur, and will not pose a threat to the Partnership's continued viability
2. Capital Resources -
The Registrant was formed for the sole intention of drilling oil and gas
wells. The Registrant entered into a drilling contract with an independent
contractor in December 1982 for $11,400,000. Pursuant to the terms of this
contract, fifty-one wells have been drilled resulting in fifty producing
wells and one dry-hole. The Registrant has had a reserve report prepared
which details reserve value information, and such information is available
to the Limited Partners pursuant to the buy-out provisions of the
Prospectus as previously filed.
3. Results of Operations -
Total operating revenues showed a minor decrease from $133,803 in 1995 to
$130,953 in 1996. The gas production decline from 51,678 MCF in 1995 to
48,837 in 1996 was mostly offset by increased average price per MCF of
$2.21 per MCF in 1995 compared with $2.45 in 1996. The partnership was
paid average spot market prices in 1995. These prices would fluctuate
based upon peak or non-peak usage period. For 1996, the partnership is in
a twelve month fixed price contract. Lower production can be partially
attributed to compressor down times, main line pressure differences and
fluid in some wells. Production expenses decreased from $63,901 in 1995
to $54,974 in 1996. Some of the production cost vary with volume produced.
The current year production expenses incurred included costs for general
upkeep and repairs to wells. Occasionally the partnership may expend fund
to purchase additional equipment or to complete light repairs which ,
based upon the operators evaluation, is designed to increase production or
to halt any further significant declines. These costs are capitalized if
they meet the appropriate criteria.
General and administrative expenses have been segregated on the financial
statements to show expenses paid to PrimeEnergy Management Corporation, a
general partner. The expenses charged are in accordance with the
guidelines set forth in the Registrant's Management Agreement. PEMC is
reimbursed expenses attributable to the affairs and operations of the
Partnership. These costs shall not exceed an annual amount equal to 5% of
limited partner capital contributions. Amounts related to both 1996 and
1995 are substantially less than the amounts allocable to the Registrant
under the Partnership Agreement. PEMC continues to perform these
functions as cost effectively as possible either through efficient use of
in-house resources or using third parties when applicable.
The Partnership records additional depreciation, depletion and amortization
to the extent that net capitalized costs exceed the undiscounted future net
cash flows attributable to the Partnership properties. The Partnership was
not required to revise the properties basis in either 1995 or the first
quarter 1996. The lower depletion expense is reasonable due to lower
overall depletable costs basis in oil and gas properties.
PART II
Items 1 through 5 have been omitted in that each item is either
inapplicable or the answer is negative.
Item 6: Exhibits and Reports on Form 8-K
The Partnership was not required to file any reports on Form 8-K and
no such form was filed during the period covered by this report.
Exhibit 27 - Financial Data Schedule is attached to the electronic
filing of this report.
S I G N A T U R E S
Pursuant to the requirements of Section 13 or 15 (d) of the Securities and
Exchange Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
STERLING GAS DRILLING FUND 1982
(Registrant)
BY: /S/ Charles E. Drimal Jr.
-----------------------
Charles E. Drimal, Jr.
General Partner
August 8 , 1996
(Date)
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Balance Sheets
(unaudited)
June 30, December 31,
1996 1995
Assets
Current Assets:
Cash and cash equivalents $ 19 $ 24
----------- -------------
Total current assets 19 24
Oil and Gas properties -
successful efforts method:
Leasehold costs 466,804 466,804
Well and related facilities 11,950,556 11,947,691
less accumulated depreciation,
depletion and amortization (11,651,706) (11,631,308)
----------- -------------
765,654 783,187
----------- -------------
Total assets $ 765,673 $ 783,211
=========== =============
Liabilities and Partners' Equity
Current liabilities:
Due to affiliates $ 403,497 $ 427,107
----------- -------------
Total current liabilities 403,497 427,107
----------- -------------
Partners' Equity
Limited partners 659,021 656,941
General partners (296,845) (300,837)
----------- -------------
Total partners' equity 362,176 356,104
----------- -------------
Total liabilities and
partners' equity $ 765,673 $ 783,211
=========== =============
See accompanying note to financial statements.
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Six Months Ending
June 30, 1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 110,197 $ 20,756 $ 130,953
-------- -------- -------
Total Revenue 110,197 20,756 130,953
-------- -------- -------
Costs and Expenses:
Production expense 46,261 8,713 54,974
General and administrative
to a related party 31,556 5,944 37,500
General and administrative 10,106 1,903 12,009
Depreciation, depletion
and amortization 20,194 204 20,398
-------- -------- -------
Total Costs and Expenses 108,117 16,764 124,881
-------- -------- -------
Net Income(loss) $ 2,080 $ 3,992 $ 6,072
======== ======== =======
Net Income(loss)
per equity unit $ .14
======
See acompanying note to financial statements.
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Six Months Ending
June 30, 1995
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 112,595 $ 21,208 $ 133,803
-------- -------- -------
Total Revenue 112,595 21,208 133,803
-------- -------- -------
Costs and Expenses:
Production expense 53,773 10,128 63,901
General and administrative 31,556 5,944 37,500
to a related party
General and administrative 11,437 2,154 13,591
Depreciation, depletion 36,066 364 36,430
and amortization
-------- -------- -------
Total Costs and Expenses 132,832 18,590 151,422
-------- -------- -------
Net Income(loss) $ (20,237) $ 2,618 $ (17,619)
======== ======== =======
Net Income(loss)
per equity unit $ (1.41)
======
See acompanying note to financial statements.
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ending
June 30, 1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 57,862 $ 10,898 $ 68,760
-------- -------- ---------
Total Revenue 57,862 10,898 68,760
-------- -------- ---------
Costs and Expenses:
Production expense 26,370 4,966 31,336
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 6,309 1,188 7,497
Depreciation, depletion
and amortization 10,134 102 10,236
-------- -------- ---------
Total Costs and Expenses 58,591 9,228 67,819
-------- -------- ---------
Net Income(loss) $ (729) $ 1,670 $ 941
======== ======== =========
Net Income(loss)
per equity unit $ (.05)
========
See acompanying note to financial statements.
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ending
June 30, 1995
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 42,100 $ 7,930 $ 50,030
-------- -------- ---------
Total Revenue 42,100 7,930 50,030
-------- -------- ---------
Costs and Expenses:
Production expense 16,254 3,061 19,315
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 7,353 1,385 8,738
Depreciation, depletion
and amortization 18,034 182 18,216
-------- -------- ---------
Total Costs and Expenses 57,419 7,600 65,019
-------- -------- ---------
Net Income(loss) $ (15,319) $ 330 $ (14,989)
======== ======== =========
Net Income(loss)
per equity unit $ (1.07)
========
See acompanying Note to financial statements.
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Six Months Ended
June 30, 1996
Limited General
Partners Partners Total
Balance at beginning of
period $ 656,941 $ (300,837) $ 356,104
Net Income(Loss) 2,080 3,992 6,072
-------- -------- --------
Balance at end of period $ 659,021 $ (296,845) $ 362,176
======== ======== ========
Six Months Ended
June 30, 1995
Limited General
Partners Partners Total
Balance at beginning of
period $ 580,425 $ (322,813) $ 257,612
Net Income(Loss) (20,237) 2,618 (17,619)
-------- -------- --------
Balance at end of period $ 560,188 $ (320,195) $ 239,993
======== ======== ========
See acompanying note to the financial statements.
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Three Months Ended
June 30, 1996
Limited General
Partners Partners Total
Balance at beginning of
period $ 659,750 $ (298,515) $ 361,235
Net Income(Loss) (729) 1,670 941
-------- -------- --------
Balance at end of period $ 659,021 $ (296,845) $ 362,176
======== ======== ========
Three Months Ended
June 30, 1995
Limited General
Partners Partners Total
Balance at beginning of
period $ 575,507 $ (320,525) $ 254,982
Net Income(Loss) (15,319) 330 (14,989)
-------- -------- --------
Balance at end of period $ 560,188 $ (320,195) $ 239,993
======== ======== ========
See accompanying not to the financial statements.
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Six months Six months
ended ended
June 30, June 30,
1996 1995
Net cash provided by operating
activities $ 2,860 $ 74
---------- ----------
Cash(used in)investment activities:
Investment in wells and related
facilities (2,865) 0
---------- ----------
Net Cash used in investment
activities (2,865) 0
Net increase(decrease) in cash and
cash equivalents (5) 74
Cash and cash equivalents at
beginning of period 24 43
---------- ----------
Cash and cash equivalents at end of
period $ 19 $ 117
========== ==========
See accompanying note to financial statements.
STERLING GAS DRILLING FUND 1982
(a New York limited partnership)
Note to Financial Statements
June 30, 1996
1. The accompanying statements for the period ending June 30, 1996 are
unaudited, but reflect all adjustments necessary to present fairly the
results of operations.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Sterling Gas Drilling Fund 1982's second quarter 10Q and is qualified
in its entirety by reference to such financial statments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 19
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19
<PP&E> 12,417,360
<DEPRECIATION> (11,651,706)
<TOTAL-ASSETS> 765,673
<CURRENT-LIABILITIES> 403,497
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 362,176<F1>
<TOTAL-LIABILITY-AND-EQUITY> 765,673
<SALES> 130,953
<TOTAL-REVENUES> 130,953
<CGS> 124,881
<TOTAL-COSTS> 124,881
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,072
<EPS-PRIMARY> 0.14<F2>
<EPS-DILUTED> 0
<FN>
<F1>Other se includes total partners' equity.
<F2>The share of the limited partner's net income was divided by
total outstanding limited partners units of 14,370.
</FN>
</TABLE>
