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, 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 - June 30, 1997 and December 31, 1996.
Statements of Operations for the Six and the Three Months Ended June
30, 1997 and 1996.
Statements of Changes in Partners' Equity for the Six and the Three
Months Ended June 30, 1997 and 1996.
Statements of Cash Flows for the Six Months Ended June 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 June
30, 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.
<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 -
Total overall operating revenues increased from $130,953 in 1996 to
$183,708 in 1997. The Partnership as a whole does not receive much of its
operating revenue from oil production. The oil production sold combined,
with the current average oil price per barrel did impact the Partnership's
revenues favorably. The overall gas revenue was positively impacted by
both increased average gas prices and increased production. The average
price per MCF in 1996 and 1997 was $2.45 and $3.07. Also gas production
went from 48,837 MCF's in 1996 to 50,149 MCF's in 1997.
Production expenses increased from $54,974 in 1996 to $90,778 in 1997.
Occasionally the Partnership may expend fund to purchase additional
equipment or to complete light repairs which , based upon the operator's
evaluation, is designed to increase production or to halt any further
significant declines. The beneficial effect looked for by the operator is
to increase, improve or sustain production on a particular well. These
costs are capitalized if they meet the appropriate criteria. Also,
variable costs associated with production increased, for example the
related well taxes which are based upon production data. The current year
production expenses increased as a result of a combination of volume
changes, repairs and labor costs associated with the wells and well sites.
The prior year production expenses 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 half
1997. Depletion, depreciation and amortization expense was consistent with
the current property basis and the rates applied.
<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
August 14, 1997
(Date)
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Balance Sheets
June 30, December 31,
1997 1996
(unaudited) (audited)
Assets
Current Assets:
Cash and cash equivalents $ 21 $ 34
----------- -------------
Total current assets 21 34
Oil and Gas properties -
successful efforts method:
Leasehold costs 466,804 466,804
Well and related facilities 11,965,181 11,959,534
less accumulated depreciation,
depletion and amortization (11,691,353) (11,671,934)
----------- -------------
273,828 334,284
----------- -------------
Total assets $ 740,653 $ 754,438
=========== =============
Liabilities and Partners' Equity
Current liabilities:
Due to affiliates $ 336,439 $ 373,007
----------- -------------
Total current liabilities 336,439 373,007
----------- -------------
Partners' Equity
Limited partners 688,509 672,221
General partners (284,295) (290,790)
----------- -------------
Total partners' equity 404,214 381,431
----------- -------------
Total liabilities and
partners' equity $ 740,653 $ 754,438
=========== =============
See accompanying footnote to the financial statements
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Six Months Ending
June 30, 1997
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 154,590 29,118 $ 183,708
-------- -------- -------
Total Revenue 154,590 29,118 183,708
-------- -------- -------
Costs and Expenses:
Production expense 76,390 14,388 90,778
General and administrative
to a related party 31,556 5,944 37,500
General and administrative 11,131 2,097 13,228
Depreciation, depletion
and amortization 19,225 194 19,419
-------- -------- -------
Total Costs and Expenses 138,302 22,623 160,925
-------- -------- -------
Net Income $ 16,288 6,495 $ 22,783
======== ======== =======
Net Income per equity unit $ 1.13
======
See accompanying footnote to the financial statements
<PAGE>
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 $ 2,080 3,992 $ 6,072
======== ======== =======
Net Income per equity unit $ .14
======
See accompanying footnote to the financial statements
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ending
June 30, 1997
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 73,576 13,859 $ 87,435
-------- -------- ---------
Total Revenue 73,576 13,859 87,435
-------- -------- ---------
Costs and Expenses:
Production expense 35,619 6,709 42,328
General and administrative
to a related party 15,778 2,972 18,750
General and administrative 7,057 1,330 8,387
Depreciation, depletion
and amortization 9,648 97 9,745
-------- -------- ---------
Total Costs and Expenses 68,102 11,108 79,210
-------- -------- ---------
Net Income $ 5,474 2,751 $ 8,225
======== ======== =========
Net Income per equity unit $ .38
========
See accompanying footnote to the financial statements
<PAGE>
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 accompanying footnote to the financial statements
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Six Months Ended
June 30, 1997
Limited General
Partners Partners Total
Balance at beginning of
period $ 672,221 (290,790) 381,431
Net Income(Loss) 16,288 6,495 22,783
-------- -------- --------
Balance at end of period $ 688,509 (284,295) 404,214
======== ======== ========
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
======== ======== ========
See accompanying footnote to the financial statements
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Three Months Ended
June 30, 1997
Limited General
Partners Partners Total
Balance at beginning of
period $ 683,035 (287,046) 395,989
Net Income(Loss) 5,474 2,751 8,225
-------- -------- --------
Balance at end of period $ 688,509 (284,295) 404,214
======== ======== ========
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
======== ======== ========
See accompanying footnote to the financial statements
<PAGE>
STERLING DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Six months Six months
ended ended
June 30, June 30,
1997 1996
Net cash provided by operating
activities $ 5,634 $ 2,860
---------- ----------
Cash(used in)investment activities:
Investment in wells and related
facilities (5,647) (2,865)
---------- ----------
Net Cash used in investment
activities (5,647) (2,865)
Net increase(decrease) in cash and
cash equivalents (13) (5)
Cash and cash equivalents at
beginning of period 34 24
---------- ----------
Cash and cash equivalents at end of
period $ 21 $ 19
========== ==========
See accompanying footnote to the financial statements
<PAGE>
STERLING GAS DRILLING FUND 1982
(a New York limited partnership)
Note to Financial Statements
June 30, 1997
1. The accompanying statements for the period ending June 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 infomation extracted from
Sterling Gas Drilling Fund 1982's second quarter 1997 10Q and it is
qualified in its entirety by references to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 21
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21
<PP&E> 12,431,985
<DEPRECIATION> (11,691,353)
<TOTAL-ASSETS> 740,653
<CURRENT-LIABILITIES> 336,439
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 404,214<F1>
<TOTAL-LIABILITY-AND-EQUITY> 740,653
<SALES> 183,708
<TOTAL-REVENUES> 183,708
<CGS> 160,925
<TOTAL-COSTS> 160,925
<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> 22,783
<EPS-PRIMARY> 1.13<F2>
<EPS-DILUTED> 0
<FN>
<F1>Other-se includes total partners equity.
<F2>The limited partner's share of net income was divided by the
total number of limited partnerhsip units of 14,370.
</FN>
</TABLE>
