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, 1997
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, 1997 and December 31, 1996.
Statements of Operations for the Three Months Ended March 31, 1997 and 1996.
Statements of Changes in Partners' Equity for the Year Ended
December 31,1996 and for the Three Months Ended March 31, 1997.
Statements of Cash Flows for the Three Months Ended March 31,1997 and 1996.
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, 1997, the General partners have distributed to the Limited partners
$1,402,512 or 9.76% of the total Limited partner capital contributions to
the Limited partners.
The net proved oil and gas reserves of the Partnership are considered
to be an indicator of financial strength and future liquidity. The present
value of unescalated future net revenue (S.E.C. case) associated with such
reserves, discounted at 10% as of December 31, 1996 was approximately
$975,800 as compared to the December 31, 1995 value of approximately
$664,000. The increase in total estimated discounted future net revenue
was due in part to higher year end gas prices as of December 31, 1996
compared the gas price in effect as of December 31, 1995. Overall
reservoir engineering is a subjective process of estimating underground
accumulations of gas and oil that can not be measured in an exact manner.
The accuracy of any reserve estimate is a function of the quality of
available data and of the engineering and geological interpretation and
judgment. Accordingly, reserve estimates are generally different from the
quantities of gas and oil that are ultimately recovered and such
differences may have a material impact on the partnership's financial
results and future liquidity.
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 -
Overall operating revenues increased from $62,193 in 1996 to $96,273 in
1997. The partnership receives most of its income from gas producing wells.
The gas production increased slightly from 24,175 MCF in 1996 to 24,877 MCF
in 1997. This increase was helped substantially by an increased average
price per MCF, from $2.41 in 1996 to $3.39 in 1997. The Partnership also
experienced a jump in oil revenue due to an increase in oil production
combined with a higher average price per barrel in 1997 as compared to
1996.Production expenses increased from $23,638 in 1996 to $48,450 in
1997. The partnership will perform additional repairs to the well and
well site as needed. Some of these types of repairs were worked on during
the first quarter of 1997. These costs include those associated with
repairs needed for access to the well and well sites and the related labor
costs. Also, variable costs associated with production increased, for
example the related well taxes which are based upon production data. The
production expenses incurred in 1996 were of a normal and recurring nature
to upkeep the wells.
Overall general and administrative expenses showed no significant change
from 1996 to 1997. All related party 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 1997 and
1996 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 undercounted future net
cash flows attributable to the Partnership properties. The partnership was
not required to revise the properties basis in either 1996 or first quarter
1997. The Partnership did expend additional funds on additional
capitalized costs. The operator will determine if additional equipment,
for example lift equipment, will have a favorable benefit on production.
The beneficial effect looked for by the operator is to increase, improve
or sustain production on a particular well. Depletion, depreciation and
amortization expense was consistent with the current property basis and the
rates applied.
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
May 14, 1997
(Date)
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Balance Sheets
(unaudited)
March 31, December 31,
1996 1996
Assets
Current Assets:
Cash and cash equivalents $ 9 $ 34
----------- -------------
Total current assets 9 24
Oil and Gas properties -
successful efforts method:
Leasehold costs 466,804 466,804
Well and related facilities 11,962,393 11,959,534
less accumulated depreciation,
depletion and amortization (11,681,608) (11,671,934)
------------- -------------
747,589 754,404
----------- -------------
Total assets $ 747,598 $ 754,438
=========== =============
Liabilities and Partners' Equity
Current liabilities:
Due to affiliates $ 351,609 $ 373,007
----------- -------------
Total current liabilities 351,609 373,007
----------- -------------
Partners' Equity
Limited partners 683,035 672,221
General partners (287,046) (290,790)
----------- -------------
Total partners' equity 395,989 381,431
----------- -------------
Total liabilities and
partners' equity $ 747,598 $ 754,438
=========== =============
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, 1997
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 81,014 $ 15,259 $ 96,273
-------- -------- -------
Total Revenue 81,014 15,259 96,273
-------- -------- -------
Costs and Expenses:
Production expense 40,771 7,679 48,450
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 4,074 767 4,841
Depreciation, depletion
and amortization 9,577 97 9,674
-------- -------- -------
Total Costs and Expenses 70,200 11,515 81,715
-------- -------- -------
Net Income $ 10,814 3,744 $ 14,558
======== ======== =======
Net Income per equity unit $ 0.75
======
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 Changes in Partners' Equity
(unaudited)
Limited General
Partners Partners Total
Balance at December 31, 1995 $ 656,941 $ (300,837) $ 356,104
Net Income 15,280 10,047 25,327
-------- -------- --------
Balance at December 31, 1996 $ 672,221 $ (290,790) $ 381,431
Net Income 10,814 3,744 14,558
-------- -------- --------
Balance at March 31, 1997 $ 683,035 $ (287,046) $ 395,989
======== ======== ========
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
31,1997 31,1996
Net cash provided by/(used in)
operating activities $ 2,834 $ 5
---------- ----------
2,834 5
Net cash provided by/(used in)
investing activities
Equipment purchases (2,859) 0
---------- ----------
Cash Flow (used in) investing
activities (2,859) 0
Net increase(decrease) in cash and
cash equivalents (25) 5
Cash and cash equivalents at
beginning of period 34 24
---------- ----------
Cash and cash equivalents at end of
period $ 9 $ 29
========== ==========
See accompanying note to the financial statements.
STERLING GAS DRILLING FUND 1982
(a New York limited partnership)
Note to Financial Statements
March 31, 1997
1. The accompanying statements for the period ending March 31, 1997 are
unaudited, but reflect all adjustments necessary to present fairly the
results of operations
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from
Sterling Gas Drilling Fund 1982's first quarter 1997 10Q and is qualified
in its entirety to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 9
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9
<PP&E> 12,429,197
<DEPRECIATION> (11,681,608)
<TOTAL-ASSETS> 747,598
<CURRENT-LIABILITIES> 351,609
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 395,989<F1>
<TOTAL-LIABILITY-AND-EQUITY> 747,598
<SALES> 96,273
<TOTAL-REVENUES> 96,273
<CGS> 81,715
<TOTAL-COSTS> 81,715
<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> 14,558
<EPS-PRIMARY> 0.75<F2>
<EPS-DILUTED> 0
<FN>
<F1>Other-se includes total partners' equity.
<F2>The limited partnerhsip income was divided by the total number of
limited partnership units of 14,370.
</FN>
</TABLE>
