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, 1996
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 / /
PART I
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - March 31, 1996 and December 31, 1995.
Statements of Operations for the Three Months Ended March 31, 1996 and 1995.
Statements of Changes in Partners' Equity for the year ended
December 31, 1995 and for the Three Months Ended March 31, 1996.
Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995.
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 March 31, 1996, the General Partners have
distributed $2,215,400 or 20.00% of original Limited Partner capital
contributions to the Limited Partners.
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, 1995
was approximately $893,700 as compared to $782,000 as of December 31, 1994.
The increase in total estimated discounted future net revenue was due
primarily to higher year end gas prices as of December 31, 1995, when
compared to the low gas price as of December 31, 1994. It is the opinion
of management, and the general consensus in the industry, that gas prices
are unlikely to decline significantly below the December 31, 1995 price in
the near future. However, there can be no assurances that such price
declines will not occur, and will not pose a threat to the Partnership's
continued viability
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 -
Operating revenues decreased from $ 91,564 in 1995 to $72,752 in 1996.
During the first quarter 1995 the partnership was paid based upon spot
market prices available. These spot prices were higher during peak usage
times of the year but could be significantly lower during off-peak usage
times. During the last quarter of 1995, the partnership entered into a
twelve month fixed price contract for purchase of most of its production.
This contract price was in effect during the first quarter 1996 and was
lower than the 1995 first quarter spot prices. The gas production declined
from 30,540 MCF's in 1995 to 28,469 MCF in 1996. The combination of the
price and production declines resulted in lower overall revenue.
Production expenses were up slightly from $28,628 in 1995 to $29,566 in
1996. This slight increase is reasonable for the partnership. The
production expenses for the first quarter of 1996 and 1995 were expended
to maintain the general upkeep of the wells and well-sites.
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. The partnership was
not required to revise the properties basis in either 1995 or first quarter
1996. The lower depletion expense in 1996 is due to overall lower
depletable cost basis in oil and gas properties.
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)
March 13, 1996 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)
March 31, December 31,
1996 1995
Assets
Current assets:
Cash and cash equivalants $ 140,438 $ 87,201
Due from others 57,271 94,874
----------- -----------
Total current assets 197,709 182,075
Oil and gas properties -
successful efforts method:
Leasehold costs 321,314 321,314
Well and related facilities 9,132,785 9,127,910
less acummulated
depreciation,depletion and
amortization (7,829,003) (7,808,432)
----------- -----------
1,625,096 1,640,792
----------- -----------
Total assets $ 1,822,805 $ 1,822,867
=========== ===========
Partners' equity
Limited partners 1,756,429 1,759,361
General partners 66,376 63,506
----------- -----------
Total partners' equity $ 1,822,805 $ 1,822,867
=========== ===========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 55,655 17,097 $ 72,752
Interest income 1,225 114 1,339
-------- -------- -------
Total Revenue 56,880 17,211 74,091
-------- -------- -------
Costs and Expenses:
Production expense 22,618 6,948 29,566
General and administrative
to a related party 14,344 4,406 18,750
General and administrative 4,028 1,238 5,266
Depreciation, depletion
and amortization 18,822 1,749 20,571
-------- -------- -------
Total Costs and Expenses 59,812 14,341 74,153
-------- -------- -------
Net Income(loss) $ (2,932) 2,870 $ (62)
======== ======== =======
Net Income(loss)
per equity unit $ (0.26)
======
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31,1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 70,046 $ 21,518 $ 91,564
Interest income 1,584 147 1,731
-------- ------- ---------
Total Revenue 71,630 21,665 93,295
-------- ------- ---------
Costs and Expenses:
Production expense 21,900 6,728 28,628
General and administrative
to a related party 14,344 4,406 18,750
General and administrative 3,857 1,185 5,042
Depreciation, depletion
and amortization 25,167 2,338 27,505
-------- ------- ---------
Total Costs and Expenses 65,268 14,657 79,925
-------- ------- ---------
Net Income(loss) $ 6,362 7,008 $ 13,370
======== ======= =========
Net Income(loss)
per equity unit $ 0.57
========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
Statement of Changes in Partners' Equity
(unaudited)
Limited General
Partners Partners Total
Balance At December 31, 1994 $ 1,789,950 $ 47,361 $ 1,837,311
Partners' contributions 0 117 117
Cash distributions (27,693) (7,386) (35,079)
Net Income(Loss) (2,896) 23,414 20,518
-------- -------- --------
Balance at December 31, 1995 $ 1,759,361 $ 63,506 $ 1,822,867
Net Income(Loss) (2,932) 2,870 (62)
-------- -------- --------
Balance at March 31, 1996 $ 1,756,429 $ 66,376 $ 1,822,805
======== ======== ========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Three months Three months
ended March ended March
31, 1996 31, 1995
Net cash provided by operating
activities $ 58,112 $ (32,398)
--------- ---------
Cash Flows from investing activities:
Investment in wells and related
facilites (4,875) 0
--------- ---------
Net Cash used in investing activities (4,875) 0
Net increase(decrease) in cash and
cash equivalents 53,237 (32,398)
Cash and cash equivalents at
beginning of period 87,201 150,718
--------- ---------
Cash and cash equivalents at end of
period $ 140,438 $ 118,320
========= =========
See accompaying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York limited partnership)
Note to Financial Statements
March 31, 1996
1. The accompanying statements for the period ending March 31,
1996 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 10Q for the period ending March 31, 1996.
The information provided is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 140,438
<SECURITIES> 0
<RECEIVABLES> 57,271
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 197,709
<PP&E> 9,454,099
<DEPRECIATION> (7,829,003)
<TOTAL-ASSETS> 1,822,805
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,822,805<F1>
<TOTAL-LIABILITY-AND-EQUITY> 1,822,805
<SALES> 74,091<F2>
<TOTAL-REVENUES> 74,091
<CGS> 74,143
<TOTAL-COSTS> 74,153
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (62)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (62)
<EPS-PRIMARY> (0.26)<F3>
<EPS-DILUTED> 0
<FN>
<F1>Other - se includes total partner's equity for the partnership.
<F2>Sales includes interest income of $1,339 for the partnership.
<F3>EPS-primary is computed by the total limited partner's share of net income
divided by the total number of limited partner's units (11,077 units).
</FN>
</TABLE>
