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 March 31, 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 - March 31, 1996 and December 31, 1995.
Statements of Operations for the Three Months Ended March 31, 1996 and 1995.
Statements of Changes in Partners' Equity for the Year Ended
December 31,1995 and for the Three Months Ended March 31, 1996.
Statements of Cash Flows for the Three Months Ended March 31, 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 March
31, 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 -
Operating revenues decreased from $83,773 in 1995 to $62,193 in 1996. The
gas production declined from 26,744 MCF's in 1995 to 24,175 MCF's in 1996.
This decline combined with a lower average price per MCF resulted in
decreased overall revenue. During the first quarter 1995 the partnership
was paid based upon spot market prices available. These spot prices were
higher during peak usage times of the year but could be significantly lower
during off-peak usage times. During the last quarter of 1995, the
partnership entered into a twelve month fixed price contract for the
purchase of most of its production. This contract price was in effect
during the first quarter 1996 and was lower then the 1995 first quarter
spot price. Production expenses decreased from $44,586 in 1995 to $23,638
in 1996. The 1995 production expenses incurred included maintenance and
labor for general upkeep and repairs to wells and well-sites. Lower costs
for this first quarter 1996 are a result of the care taken in the prior
year to maintain the wells and well sites.
General and administrative expenses have been segregated on the financial
statements to show expenses paid to PrimeEnergy Management Corporation
(PEMC), 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 first quarter
1996. The lower depletion expense in 1996 is due to overall lower
depletable cost 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
March 13, 1996
(Date)
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Balance Sheets
(unaudited)
March 31, December 31,
1996 1995
Assets
Current Assets:
Cash and cash equivalents $ 29 $ 24
----------- -------------
Total current assets 29 24
Oil and Gas properties -
successful efforts method:
Leasehold costs 466,804 466,804
Well and related facilities 11,947,691 11,947,691
less accumulated depreciation,
depletion and amortization (11,641,470) (11,631,308)
----------- -------------
773,025 783,187
----------- -------------
Total assets $ 773,054 $ 783,211
=========== =============
Liabilities and Partners' Equity
Current liabilities:
Due to affiliates $ 411,819 $ 427,107
----------- -------------
Total current liabilities 411,819 427,107
----------- -------------
Partners' Equity
Limited partners 659,750 656,941
General partners (298,515) (300,837)
----------- -------------
Total partners' equity 361,235 356,104
----------- -------------
Total liabilities and
partners' equity $ 773,054 $ 783,211
=========== =============
See accompanying note to the financial statements.
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 52,335 $ 9,858 $ 62,193
-------- -------- -------
Total Revenue 52,335 9,858 62,193
-------- -------- -------
Costs and Expenses:
Production expense 19,891 3,747 23,638
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 3,797 715 4,512
Depreciation, depletion
and amortization 10,060 102 10,162
-------- -------- -------
Total Costs and Expenses 49,526 7,536 57,062
-------- -------- -------
Net Income $ 2,809 2,322 $ 5,131
======== ======== =======
Net Income per equity unit $ 0.20
======
See accompanying note to the financial statements.
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1995
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 70,495 13,278 $ 83,773
-------- ------- ---------
Total Revenue 70,495 13,278 83,773
-------- ------- ---------
Costs and Expenses:
Production expense 37,519 7,067 44,586
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 4,084 769 4,853
Depreciation, depletion
and amortization 18,032 182 18,214
-------- ------- ---------
Total Costs and Expenses 75,413 10,990 86,403
-------- ------- ---------
Net Income(loss) $ (4,918) 2,288 $ (2,630)
======== ======= =========
Net Income(loss)
per equity unit $ (0.34)
========
See accompanying note to the financial statements.
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Limited General
Partners Partners Total
Balance At December 31, 1994 $ 580,425 $ (322,813) $ 257,512
Net Income 76,516 21,976 98,492
-------- -------- --------
Balance at December 31, 1995 $ 656,941 $ (300,837) $ 356,104
Net Income 2,809 2,322 5,131
-------- -------- --------
Balance at March 31, 1996 $ 659,750 $ (298,515) $ 361,235
======== ======== ========
See accompanying note to the financial statements.
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Three months Three months
ended March ended March
31,1996 31,1995
Net cash provided by/(used in)
operating activities $ 5 $ (20)
---------- ---------
Net increase(decrease) in cash and
cash equivalents 5 (20)
Cash and cash equivalents at
beginning of period 24 43
---------- ----------
Cash and cash equivalents at end of
period $ 29 $ 23
========== ==========
See accompanying note to the financial statements.
STERLING GAS DRILLING FUND 1982
(a New York limited partnership)
Note to Financial Statements
March 31, 1996
1. The accompanying statements for the period ending March 31, 1996 are
unaudited, but reflect all adjustments necessary to present fairly the
results of operations. Certain reclassifications were made to the prior
period's financial statements to conform to the current period
presentation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Sterling Gas Drilling Fund 1982 10Q for the period ended March 31, 1996.
This information is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 29
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 29
<PP&E> 12,414,495
<DEPRECIATION> (11,641,470)
<TOTAL-ASSETS> 773,054
<CURRENT-LIABILITIES> 411,819
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 361,235<F1>
<TOTAL-LIABILITY-AND-EQUITY> 773,054
<SALES> 62,193
<TOTAL-REVENUES> 62,193
<CGS> 57,062
<TOTAL-COSTS> 57,062
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,131
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,131
<EPS-PRIMARY> 0.20<F2>
<EPS-DILUTED> 0
<FN>
<F1>Other - se includes total partner's equity for the partnership.
<F2>Eps- primary is computed from total limited partner's share of net income
divided by total limited partner's units (14,370 units).
</FN>
</TABLE>
