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 September 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
<PAGE>
PART I
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - September 30, 1996 and December 31, 1995.
Statements of Operations for the Nine and the Three Months Ended September 30,
1996 and 1995.
Statements of Changes in Partners' Equity for the Nine and the Three Months
Ended September 30, 1996.
Statements of Cash Flows for the Nine Months Ended September 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
September 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 December 31, 1994 amount of
$415,000. The increase in undiscounted future net cash flows for the
Partnership properties was caused by higher year end prices in effect at
December 31, 1995 compared to lower year end prices as of December 31,
1994. There were no significant changes in the estimated future production
from the properties. 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.
<PAGE>
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 increased from $197,012 in 1995 to $201,169 in 1996.
The gas production decline from 79,010 MCF in 1995 to 76,407 MCF in 1996
was offset by an average price increase from $ 2.15 per MCF in 1995 to
$2.43 in 1996. The partnership's production decline was due in part to a
main line in the gathering system experiencing a shut in due to maintenance
on the line. This resulted in no production for approximately twenty one
days in August of 1996 on the wells that feed into this main line. All
repairs have been completed by the system's operator and the line is no
longer shut in. Production expenses increased from $87,405 in 1995 to
$91,633 in 1996. The higher production expenses, in 1996, are attributable
to some severe storms during the late spring and summer of 1996. These
storms resulted in additional cost incurred, which may include additional
maintenance, location, access road work and other repairs. Most of the
production expenses, in 1995, were to maintain the general upkeep of the
wells and well site.
General and administrative expenses are 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. General and
administrative charges were stable and showed only a minor change from
1995 to 1996.
The partnership records additional depreciation, depletion and amortization
to the extent that net capitalized costs exceed the undiscounted future net
cash flow attributable to the partnership properties. No additional
depreciation, depletion or amortization was needed in 1995 or in the three
quarters of 1996. Although the 1996 expense is lower than 1995, the expense
recorded is consistent with the current basis of the partnership's
properties.
<PAGE>
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.
<PAGE>
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
November 8, 1996
(Date)
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Balance Sheets
(unaudited)
September 30, December 31,
1996 1995
Assets
Current Assets:
Cash and cash equivalents $ 14 $ 24
----------- -------------
Total current assets 14 24
Oil and Gas properties -
successful efforts method:
Leasehold costs 466,804 466,804
Well and related facilities 11,956,834 11,947,691
less accumulated depreciation,
depletion and amortization (11,662,234) (11,631,308)
----------- -------------
761,404 783,187
----------- -------------
Total assets $ 761,418 $ 783,211
=========== =============
Liabilities and Partners' Equity
Current liabilities:
Due to affiliates $ 399,667 $ 427,107
----------- -------------
Total current liabilities 399,667 427,107
----------- -------------
Partners' Equity
Limited partners 657,101 656,941
General partners (295,350) (300,837)
----------- -------------
Total partners' equity 361,751 356,104
----------- -------------
Total liabilities and
partners' equity $ 761,418 $ 783,211
=========== =============
See accompanying note to the financial statements
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Nine Months Ended
September 30, 1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 169,284 $ 31,885 $ 201,169
-------- -------- --------
Total Revenue 169,284 31,885 201,169
-------- -------- --------
Costs and Expenses:
Production expense 77,109 14,524 91,633
General and administrative 47,334 8,916 56,250
to a related party
General and administrative 14,064 2,649 16,713
Depreciation, depletion
and amortization 30,617 309 30,926
-------- -------- --------
Total Costs and Expenses 169,124 26,398 195,522
-------- -------- --------
Net Income(loss) $ 160 5,487 $ 5,647
======== ======== ========
Net Income(loss)
per equity unit $ .01
======
See accompanying note to the financial statements.
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Nine Months Ended
September 30, 1995
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 165,786 $ 31,226 $ 197,012
-------- -------- --------
Total Revenue 165,786 31,226 197,012
-------- -------- --------
Costs and Expenses:
Production expense 73,551 13,854 87,405
General and administrative
to a related party 47,334 8,916 56,250
General and administrative 14,395 2,711 17,106
Depreciation, depletion
and amortization 54,098 546 54,644
-------- -------- --------
Total Costs and Expenses 189,378 26,027 215,405
-------- -------- --------
Net Income(loss) $ (23,592) 5,199 $ (18,393)
======== ======== ========
Net Income(loss)
per equity unit $ (1.64)
======
See accompanying note to the financial statements.
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
September 30, 1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 59,087 11,129 $ 70,216
-------- -------- ---------
Total Revenue 59,087 11,129 70,216
-------- -------- ---------
Costs and Expenses:
Production expense 30,848 5,811 36,659
General and administrative 15,778 2,972 18,750
to a related party
General and administrative 3,958 746 4,704
Depreciation, depletion
and amortization 10,423 105 10,528
-------- -------- ---------
Total Costs and Expenses 61,007 9,634 70,641
-------- -------- ---------
Net Income(loss) $ (1,920) 1,495 $ (425)
======== ======== =========
Net Income(loss)
per equity unit $ (.013)
========
See accompanying note to the financial statements.
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
September 30, 1995
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 53,191 10,018 $ 63,209
-------- -------- ---------
Total Revenue 53,191 10,018 63,209
-------- -------- ---------
Costs and Expenses:
Production expense 19,778 3,726 23,504
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 2,958 557 3,515
Depreciation, depletion
and amortization 18,032 182 18,214
-------- -------- ---------
Total Costs and Expenses 56,546 7,437 63,983
-------- -------- ---------
Net Income(loss) $ (3,355) 2,581 $ (774)
======== ======== =========
Net Income(loss)
per equity unit $ (.23)
========
See accompanying note to the financial statements.
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Nine Months Ended
September 30, 1996
Limited General
Partners Partners Total
Balance at beginning of
period $ 656,941 (300,837) $ 356,104
Net Income(Loss) 160 5,487 5,647
-------- --------- ---------
Balance at end of period $ 657,101 (295,350) $ 361,751
======== ========= =========
Nine Months Ended
September 30, 1995
Limited General
Partners Partners Total
Balance at beginning of
period $ 580,425 (322,813) $ 257,612
Net Income(Loss) (23,592) 5,199 (18,393)
-------- -------- ---------
Balance at end of period $ 556,833 (317,614) $ 239,219
======== ======== ==========
See accompanying note to the financial statements.
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Three Months Ended
September 30, 1996
Limited General
Partners Partners Total
Balance at beginning of
period $ 659,021 (296,845) $ 362,176
Net Income(Loss) (1,920) 1,495 (425)
-------- --------- ----------
Balance at end of period $ 657,101 (295,350) $ 361,751
======== ========= ==========
Three Months Ended
September 30, 1995
Limited General
Partners Partners Total
Balance at beginning of
period $ 560,188 (320,195) $ 239,993
Net Income(Loss) (3,355) 2,581 (774)
--------- --------- ---------
Balance at end of period $ 556,833 (317,614) $ 239,219
========= ========= =========
See accompanying note to the financial statements.
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Nine Nine
months months
ended ended
September September
30, 1996 30, 1995
Net cash (used in) operating
activities $ 9,133 $ (32)
---------- ---------
Cash flows from investing
activities:
Investment in well and related
facilities (9,143) 0
--------- ---------
Net Cash used in investing
activities (9,143) 0
--------- ---------
Net increase(decrease) in cash and
cash equivalents (10) (32)
Cash and cash equivalents at
beginning of period 24 43
---------- ----------
Cash and cash equivalents at end of
period $ 14 $ 11
========== ==========
See accompanying note to the financial statements.
<PAGE>
STERLING GAS DRILLING FUND 1982
(a New York limited partnership)
Note to Financial Statements
September 30, 1996
1. The accompanying statements for the period ending September 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 Third Quarter 1996 10-Q
and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 14
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14
<PP&E> 12,423,638
<DEPRECIATION> (11,662,234)
<TOTAL-ASSETS> 761,418
<CURRENT-LIABILITIES> 399,667
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 361,751<F1>
<TOTAL-LIABILITY-AND-EQUITY> 761,418
<SALES> 201,169
<TOTAL-REVENUES> 201,169
<CGS> 195,522
<TOTAL-COSTS> 195,522
<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> 5,647
<EPS-PRIMARY> 0.01<F2>
<EPS-DILUTED> 0
<FN>
<F1>Other - se includes total partners' equity.
<F2>The limited partnership net income was divided by the total
number of limited partnership units of 14,370.
</FN>
</TABLE>
