<PAGE> 1
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, 1998
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> 2
PART I
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - March 31, 1998 and December 31, 1997.
Statements of Operations for the Three Months Ended March 31, 1998 and 1997.
Statements of Changes in Partners' Equity for the Year Ended
December 31,1997 and for the Three Months Ended March 31, 1998.
Statements of Cash Flows for the Three Months Ended March 31,1998 and 1997.
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, 1998, 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.
All aspects of the Partnership's operations and administration are
handled through the use of the operating and managing general partner's
computer systems. Both , the operations company and the managing general
partner are taking steps to minimize any potential computer issues with
regard to any necessary changes for the year 2000. A complete system
upgrade, which includes but is not limited to , the year 2000 issue will be
implemented with in the next nine months by both the operating company and
the managing general partner. Both companies' upgrades and year 2000
changes are part of their normal course of business and no material costs
should be allocated to the partnership for the implementation necessary by
either company.
<PAGE> 3
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, 1997 was approximately
$904,800 as compared to the December 31, 1996 value of approximately
$928,400. 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 decreased from $96,273 in 1997 to $73,678
in 1998. The partnership receives most of its income from gas producing
wells. The gas production remained stable, from 24,877 MCF in 1997 to
24,043 MCF in 1998. The stability of the production was offset by a lower
average price per mcf from $3.39 in 1997 to $2.96 in 1998. The
Partnership also experienced a decline in oil revenue due to an decreases
in both oil production and average price per barrel. Production expenses
decreased from $48,450 in 1997 to $28,900 in 1998. The partnership will
perform additional repairs to the wells and wells 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
wells and well sites and the related labor costs. Also, variable costs
associated with production were higher in 1997 then 1998. An example of
variable costs would be the related well taxes which are based upon
production data. The production expenses incurred in 1998 were of a normal
and recurring nature to upkeep the wells.
<PAGE> 4
Overall general and administrative expenses showed a minor increase from
1997 to 1998. 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
1998 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 reduce the properties basis
in either 1997 or first quarter 1998. 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.
<PAGE> 5
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 12, 1998
(Date)
<PAGE> 6
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Balance Sheets
(unaudited)
March 31, December 31,
1998 1997
Assets
Current Assets:
Cash and cash equivalents $ 4 $ 7
Due from others 2,607 0
----------- -------------
Total current assets 2,611 7
----------- -----------
Oil and Gas properties -
successful efforts method:
Leasehold costs 466,804 466,804
Well and related facilities 11,970,091 11,970,091
less accumulated depreciation,
depletion and amortization (11,720,107) (11,710,869)
------------- -------------
716,788 726,026
----------- -------------
Total assets $ 719,399 $ 726,033
=========== =============
Liabilities and Partners' Equity
Current liabilities:
Due to affiliates $ 305,977 $ 322,146
----------- -------------
Total current liabilities 305,977 322,146
----------- -------------
Partners' Equity
Limited partners 691,988 685,336
General partners (278,566) (281,449)
----------- -------------
Total partners' equity 413,422 403,887
----------- -------------
Total liabilities and
partners' equity $ 719,399 $ 726,033
=========== =============
See accompanying note to the financial statements.
<PAGE> 7
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1998
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 62,000 11,678 $ 73,678
-------- -------- -------
Total Revenue 62,000 11,678 73,678
-------- -------- -------
Costs and Expenses:
Production expense 24,319 4,581 28,900
General and administrative
to a related party 17,884 3,369 21,253
General and administrative 3,999 753 4,752
Depreciation, depletion
and amortization 9,146 92 9,238
-------- -------- -------
Total Costs and Expenses 55,348 8,795 64,143
-------- -------- -------
Net Income $ 6,652 2,883 $ 9,535
======== ======== =======
Net Income per equity unit $ 0.46
======
See accompanying note to the financial statements.
<PAGE> 8
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.
<page 9>
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, 1996 $ 672,221 $ (290,790) $ 381,431
Net Income 13,115 9,341 22,456
-------- -------- --------
Balance at December 31, 1997 $ 685,336 $ (281,449) $ 403,887
Net Income 6,652 2,883 9,535
-------- -------- --------
Balance at March 31, 1998 $ 691,988 $ (278,566) $ 413,422
======== ======== ========
See accompanying note to the financial statements.
<PAGE> 10
STERLING GAS DRILLING FUND 1982
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Three months Three months
ended March ended March
31,1998 31,1997
Net cash provided by/(used in)
operating activities $ (3) $ 2,834
---------- ----------
Net cash provided by/(used in)
investing activities
Equipment purchases 0 (2,859)
---------- ----------
Cash Flow (used in) investing
activities 0 (2,859)
Net increase(decrease) in cash and
cash equivalents (3) (25)
Cash and cash equivalents at
beginning of period 7 34
---------- ----------
Cash and cash equivalents at end of
period $ 4 $ 9
========== ==========
See accompanying note to the financial statements.
<PAGE> 11
STERLING GAS DRILLING FUND 1982
(a New York limited partnership)
Note to Financial Statements
March 31, 1998
1. The accompanying statements for the period ending March 31, 1998 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 first quarer 1998 10Q and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 4
<SECURITIES> 0
<RECEIVABLES> 2,607
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,611
<PP&E> 12,436,895
<DEPRECIATION> (11,720,107)
<TOTAL-ASSETS> 719,399
<CURRENT-LIABILITIES> 305,977
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 413,422<F1>
<TOTAL-LIABILITY-AND-EQUITY> 719,399
<SALES> 73,678
<TOTAL-REVENUES> 73,678
<CGS> 64,143
<TOTAL-COSTS> 64,143
<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> 9,535
<EPS-PRIMARY> 0.46<F2>
<EPS-DILUTED> 0
<FN>
<F1>Other se includes total partners' equity.
<F2>The limited partners share of net income was divided by the total
number of limited partner units 14,370.
</FN>
</TABLE>
