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, 1995
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 2-84452
STERLING DRILLING FUND 1983-1
(Exact name of registrant as specified in charter)
New York
(State or other jurisdiction of incorporation or organization)
13-3167549
(IRS employer identification number)
1 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 / /
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - June 30, 1995 and December 31, 1994.
Statements of Operations for the Six and Three Months Ended June 30, 1995 and
1994.
Statements of Changes in Partners' Equity for the Six and Three Months Ended
June 30, 1995 and 1994.
Statements of Cash Flows for the Six Months Ended June 30, 1995 and 1994.
Note to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity -
The oil and gas industry is intensely competitive in all its phases. There
is also competition between this industry and other industries in supplying
energy and fuel requirements of industrial and residential 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 as filed by the Registrant, 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 contingent debts, liabilities or expenses for the conduct of the
Partnership's business. As of June 30, 1995, the General Partners have
distributed $2,215,400 or 20.00% of original Limited Partner capital
contributions to the Limited Partners.
Columbia Gas Transmission Corp., a contract purchaser of the Registrant's
gas, filed a Chapter 11 petition in U.S. Bankruptcy Court in Wilmington
Delaware on July 31, 1991. At that time, the Bankruptcy Court released
Columbia from any current contracts. The Registrant has filed a claim with
the Bankruptcy Court to recover revenue suspended at the time bankruptcy
occurred. Such amounts were not recorded as revenue during the applicable
period, therefore, no loss contingency exists. The Registrant has reviewed
and accepted a tentative settlement offer made by Columbia. The Registrant
is hopeful that Columbia will make a final settlement within the next
twelve months.
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 (S.E.C. case)
associated with such reserves, discounted at 10% as of December 31, 1994
was approximately $782,000.
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 November 1983 for $9,400,000. Pursuant to terms of this
contract thirty-eight wells have been drilled resulting in thirty-seven
producing wells and one dry hole.
3. Results of Operations -
Overall operating revenues decreased from $193,040 in 1994 to $147,280 in
1995. The combination of lower gas production,from 62,099 MCF in 1994 to
59,635 MCF in 1995, and lower average price per MCF, from $2.91 in 1994 to
$2.12 in 1995, contributed to lower gas revenues. A minor increase in
average price per barrel, from $13.19 in 1994 to $15.64 in 1995 resulted in
slightly higher oil revenue. Production expenses decreased from $97,006 in
1994 to $61,077 in 1995, because 1994 included additional of costs
associated with location, road repairs and line outages due to severe
weather conditions.
General and administrative expenses have been segregated on the financial
statements to reflect expenses paid to PrimeEnergy Management Corporation,
a general partner. These expenses are charged in accordance with
guidelines set forth in the Registrant's Management Agreement and are
attributable to the affairs and operations of the Partnership and shall not
exceed an annual amount equal to 5% of the limited partners capital
contributions. Amounts related to both 1995 and 1994 are substantially less
than the amounts allocable to the Registrant under the Partnership
Agreement. The lower amounts reflect management's effort's to limit costs,
both incurred and allocated to the Registrant. Management continues to
reduce third party costs and use in-house resources to provide efficient
and timely services to the partnership.
The partnership records additional depreciation, depletion and amortization
to the extent that net capitalized costs exceed the undiscounted future net
cash flows attributable to the partnership properties. A downward revision
in reserve estimates due to lower year-end gas prices in 1994 resulted in
an additional charge of $450,000. The lower depletion expense in 1995 is
due to lower depletable cost basis in oil and gas properties.
4. Other-
In, March, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," (SFAS No. 121)
which is effective for the fiscal years beginning after December 15, 1995.
This statement establishes accounting standards for the impairment of long-
lived assets, requiring such assets to be reported at the lower of carrying
amount or fair value, less selling costs. The statement amends SFAS No.
19, "Financial Accounting and Reporting by Oil and Gas Producing Companies"
by adding an impairment test for proved properties in accordance with
SFAS No. 121.
The Registrant currently performs a "ceiling test" by comparing the total
carrying value of oil and gas properties to the total future net cash flows
from the estimated production of proved oil and gas properties. The effect
of SFAS No. 121, which would change the way the test is performed, is not
known at this time.
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
Exchange Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
STERLING DRILLING FUND 1983-1
(Registrant)
August 11, 1995 BY: /S/ Charles E. Drimal Jr.
(Date) -----------------------------
Charles E. Drimal, Jr.,
General Partner
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Balance Sheets
(unaudited)
June 30, December
1995 31, 1994
Assets
Current assets:
Cash and cash equivalants $ 101,892 $ 150,718
Due from others 8,078 --
----------- -----------
Total current assets 109,970 150,718
Oil and gas properties -
successful efforts method:
Leasehold costs 321,314 321,314
Well and related facilities 9,131,406 9,127,910
less acummulated
depreciation,depletion and
amortization (7,777,084) (7,722,074)
----------- -----------
1,675,636 1,727,150
----------- -----------
Total assets $ 1,785,606 $ 1,877,868
=========== ===========
Liabilities and partners' equity
Current liabilities:
Due to affiliates $ -- $ 40,557
----------- -----------
Total current liabilities -- 40,557
----------- -----------
Partners' equity
Limited partners 1,741,828 1,789,950
General partners 43,778 47,361
----------- -----------
Total partners' equity 1,785,606 1,837,311
----------- -----------
Total liabilities and
partners' equity $ 1,785,606 $ 1,877,868
=========== ===========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Six Months Ending
June 30, 1995
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 112,669 $ 34,611 $ 147,280
Interest income 3,303 307 3,610
-------- -------- -------
Total Revenue 115,972 34,918 150,890
-------- -------- -------
Costs and Expenses:
Production expense 46,724 14,353 61,077
General and administrative
to a related party 28,688 8,812 37,500
General and administrative 10,656 3,274 13,930
Depreciation, depletion
and amortization 50,334 4,676 55,010
-------- -------- -------
Total Costs and Expenses 136,402 31,115 167,517
-------- -------- -------
Net Income(loss) $ (20,430) $ 3,803 $ (16,627)
======== ======== =======
Net Income(loss)
per equity unit $ (1.84)
======
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Six Months Ending
June 30, 1994
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 147,676 $ 45,364 $ 193,040
Interest income 1,732 161 1,893
-------- ------- ---------
Total Revenue 149,408 45,525 194,933
-------- ------- ---------
Costs and Expenses:
Production expense 74,210 22,796 97,006
General and administrative
to a related party 57,375 17,625 75,000
General and administrative 8,715 2,677 11,392
Depreciation, depletion
and amortization 54,781 5,089 59,870
-------- ------- ---------
Total Costs and Expenses 195,081 48,187 243,268
-------- ------- ---------
Net Income(loss) $ (45,673) $ (2,662) $ (48,335)
======== ======= =========
Net Income(loss)
per equity unit $ (4.12)
========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ending
June 30, 1995
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 42,623 $ 13,093 $ 55,716
Interest income 1,719 160 1,879
-------- -------- ---------
Total Revenue 44,342 13,253 57,595
-------- -------- ---------
Costs and Expenses:
Production expense 24,824 7,625 32,449
General and administrative
to a related party 14,344 4,406 18,750
General and administrative 6,799 2,089 8,888
Depreciation, depletion
and amortization 25,167 2,338 27,505
-------- -------- ---------
Total Costs and Expenses 71,134 16,458 87,592
-------- -------- ---------
Net Income(loss) $ (26,792) $ (3,205) $ (29,997)
======== ======== =========
Net Income(loss)
per equity unit $ (2.42)
========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ending
June 30, 1994
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 73,156 $ 22,473 $ 95,629
Interest income 1,047 97 1,144
-------- -------- -----------
Total Revenue 74,203 22,570 96,773
-------- -------- -----------
Costs and Expenses:
Production expense 38,987 11,976 50,963
General and administrative
to a related party 28,687 8,813 37,500
General and administrative 5,259 1,616 6,875
Depreciation, depletion
and amortization 27,388 2,544 29,932
-------- -------- -----------
Total Costs and Expenses 100,321 24,949 125,270
-------- -------- -----------
Net Income(loss) $ (26,118) $ (2,379) $ (28,497)
======== ======== ===========
Net Income(loss)
per equity unit $ (2.36)
======
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Six Months Ended
June 30, 1995
Limited General
Partners Partners Total
Balance at beginning of
period $ 1,789,950 $ 47,361 $ 1,837,311
Cash Distributions (27,692) (7,386) (35,078)
Net Income(Loss) (20,430) 3,803 (16,627)
-------- -------- ------------
Balance at end of period 1,741,828 43,778 1,785,606
======== ======== ============
Six Months Ended
June 30, 1994
Limited General
Partners Partners Total
Balance at beginning of
period $ 2,374,227 $ 109,492 $ 2,483,719
Cash Distributions (27,692) (7,622) (35,314)
Net Income(Loss) (45,673) (2,662) (48,335)
-------- -------- -----------
Balance at end of period 2,300,862 99,208 2,400,070
======== ======== ===========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Three Months Ended
June 30, 1995
Limited General
Partners Partners Total
Balance at beginning of
period $ 1,796,312 $ 54,369 $ 1,850,681
Cash Distributions (27,692) (7,386) (35,078)
Net Income(Loss) (26,792) (3,205) (29,997)
-------- -------- ------------
Balance at end of period 1,741,828 43,778 1,785,606
========= ======== ============
Three Months Ended
June 30, 1994
Limited General
Partners Partners Total
Balance at beginning of
period $ 2,354,672 $ 109,209 $ 2,463,881
Cash Distributions (27,692) (7,622) (35,314)
Net Income(Loss) (26,118) (2,379) (28,497)
---------- --------- ----------
Balance at end of period 2,300,862 99,208 2,400,070
========== ========= ==========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Six Six
months months
ended ended
June 30, June 30,
1995 1994
Net cash provided by operating
activities $ (10,252) $ 43,336
--------- ---------
Cash Flows from investing activities:
Credit on uncompleted wells and
related equipment (3,496) --
--------- ---------
Net Cash used in investing activities
(3,496) --
Cash flows from financing activities:
Distribution to partners (35,078) (35,314)
--------- ---------
Net cash used in financing activities (35,078) (35,314)
--------- ---------
Net increase(decrease) in cash and
cash equivalents (48,826) 8,022
Cash and cash equivalents at
beginning of period 150,718 104,952
--------- ---------
Cash and cash equivalents at end of
period $ 101,892 $ 112,974
========= =========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York limited partnership)
Note to Financial Statements
June 30, 1995
1. The accompanying statements for the period ending June 30,
1995, are unaudited but reflect all adjustments necessary to
present fairly the results of operations. Certain
reclassifications were made to the prior periods' financial
statements to conform to the current period presentation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Sterling Drilling Fund 1983-1 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 101892
<SECURITIES> 0
<RECEIVABLES> 8078
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 109970
<PP&E> 9452720
<DEPRECIATION> 7777084
<TOTAL-ASSETS> 1785606
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1785606<F1>
<TOTAL-LIABILITY-AND-EQUITY> 1785606
<SALES> 0
<TOTAL-REVENUES> 150890
<CGS> 0
<TOTAL-COSTS> 167517
<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> (16627)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Field Other-Se contains total partners' equity.
</FN>
</TABLE>
