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, 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
<PAGE>
PART I
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - September 30, 1997 and December 31, 1996.
Statements of Operations for the Nine and the Three Months Ended September 30,
1997 and 1996.
Statements of Changes in Partners' Equity for the Nine and the Three Months
Ended September 30, 1997 and September 30, 1996.
Statements of Cash Flows for the Nine Months Ended September 30, 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
September 30, 1997, 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 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.
<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 $201,169 in 1996 to $268,797 in 1997. The
Partnership experienced very little change in its overall gas and oil
production , from 76,407 MCF and 1,414 BBLS in 1996 to 76,311 MCF and 1,601
BBLS in 1997. The consistent production combined with the increased average
price per MCF and barrel directly impacted operating revenue. The average
prices increased were from $2.43 per MCF and $17.36 per barrel in 1996 to
$3.06 per MCF and $18.33 per barrel in 1997. Production expenses increased
from $91,633 in 1996 to $145,804 in 1997. The increase in these expenses
can be partially attributed to weather conditions which may necessitate
additional maintenance, location, access road work and other repairs. Also
other periodic upkeep expenses may increase in order for the production
levels to be maintained.
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 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. There was very
little change in overall general and administrative costs from 1996 to
1997.
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 1996 or in the three
quarters of 1997. Although the 1997 expense is slightly lower than 1996,
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 12, 1997
(Date)
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Balance Sheets
(unaudited)
September 30, December 31,
1997 1996
Assets
Current Assets:
Cash and cash equivalents $ 11 $ 34
----------- -------------
Total current assets 11 34
Oil and Gas properties -
successful efforts method:
Leasehold costs 466,804 466,804
Well and related facilities 11,970,090 11,959,534
less accumulated depreciation,
depletion and amortization (11,701,148) (11,671,934)
----------- -------------
735,746 754,404
----------- -------------
Total assets $ 735,757 $ 754,438
=========== =============
Liabilities and Partners' Equity
Current liabilities:
Due to affiliates $ 332,445 $ 373,007
------------ -------------
Total current liabilities 332,445 373,007
----------- -------------
Partners' Equity
Limited partners 686,489 672,221
General partners (283,177) (290,790)
----------- -------------
Total partners' equity 403,312 381,431
----------- -------------
Total liabilities and
partners' equity $ 735,757 $ 754,438
=========== =============
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, 1997
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 226,193 $ 42,604 $ 268,797
Gain on sale of equipment 1,287 13 1,300
-------- -------- --------
Total Revenue 227,480 42,617 270,097
-------- -------- --------
Costs and Expenses:
Production expense 122,694 23,110 145,804
General and administrative
to a related party 47,334 8,916 56,250
General and administrative 14,262 2,686 16,948
Depreciation, depletion
and amortization 28,922 292 29,214
-------- -------- --------
Total Costs and Expenses 213,212 35,004 248,216
-------- -------- --------
Net Income $ 14,268 7,613 $ 21,881
======== ======== ========
Net Income per equity unit $ 0.99
======
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
to a related party 47,334 8,916 56,250
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 $ 160 5,487 $ 5,647
======== ======== ========
Net Income 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)
Three Months Ended
September 30, 1997
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 71,603 13,486 $ 85,089
Gain on sale of equipment 1,287 13 1,300
-------- -------- ---------
Total Revenue 72,890 13,499 86,389
-------- -------- ---------
Costs and Expenses:
Production expense 46,304 8,722 55,026
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 3,131 589 3,720
Depreciation, depletion
and amortization 9,697 98 9,795
-------- -------- ---------
Total Costs and Expenses 74,910 12,381 87,291
-------- -------- ---------
Net Income(loss) $ (2,020) 1,118 $ (902)
======== ======== =========
Net Income(loss)
per equity unit $ (0.14)
========
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
to a related party 15,778 2,972 18,750
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 $ (.13)
========
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, 1997
Limited General
Partners Partners Total
Balance at beginning of
period $ 672,221 (290,790) $ 381,431
Net Income 14,268 7,613 21,881
-------- --------- ---------
Balance at end of period $ 686,489 (283,177) $ 403,312
======== ========= =========
Nine Months Ended
September 30, 1996
Limited General
Partners Partners Total
Balance at beginning of
period $ 656,941 (300,837) $ 356,104
Net Income 160 5,487 5,647
-------- -------- ----------
Balance at end of period $ 657,101 (295,350) $ 361,751
======== ======== ==========
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, 1997
Limited General
Partners Partners Total
Balance at beginning of
period $ 688,509 (284,295) $ 404,214
Net Income(Loss) (2,020) 1,118 (902)
-------- --------- ----------
Balance at end of period $ 686,489 (283,177) $ 403,312
======== ========= ==========
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
======== ========= ==========
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, 1997 30, 1996
Net cash provided by operating
activities $ 9,233 $ 9,133
---------- ----------
Cash flows from investing
activities:
Proceeds from sale of equipment 1,300 0
Investment in well and related
facilities (10,556) (9,143)
--------- ---------
Net Cash used in investing
activities (9,256) (9,143)
--------- ---------
Net increase(decrease) in cash and
cash equivalents (23) (10)
Cash and cash equivalents at
beginning of period 34 24
---------- ----------
Cash and cash equivalents at end of
period $ 11 $ 14
========== ==========
See accompanying note to the financial statements.
<PAGE>
STERLING GAS DRILLING FUND 1982
(a New York limited partnership)
Note to Financial Statements
September 30, 1997
1. The accompanying statements for the period ending September 30, 1997 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 1997 10 Q and it is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11
<PP&E> 12,436,894
<DEPRECIATION> (11,701,148)
<TOTAL-ASSETS> 735,757
<CURRENT-LIABILITIES> 332,445
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 403,312<F1>
<TOTAL-LIABILITY-AND-EQUITY> 735,757
<SALES> 270,097<F2>
<TOTAL-REVENUES> 270,097
<CGS> 248,216
<TOTAL-COSTS> 248,216
<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> 21,881
<EPS-PRIMARY> 0.99<F3>
<EPS-DILUTED> 0
<FN>
<F1>Other se includes total partners' equity.
<F2>Sales includes $1,300 gain on sale of equipment.
<F3>The limited partners income was divided by the total number of limited
partnership units of 14,370.
</FN>
</TABLE>
