SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 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 2-84452
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, 1997 and December 31, 1996.
Statements of Operations for the Three Months Ended March 31, 1997 and 1996.
Statements of Changes in Partners' Equity for the year ended
December 31,1996 and for the Three Months Ended March 31, 1997.
Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996.
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, 1997, the General Partners have
distributed $2,256,928 or 20.375% of original 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
$1,378,600 as compared to the discounted reserves as of December 31, 1995
which were approximately $891,700. The increase in total estimated
discounted future net revenue was due in part to higher year end gas prices
as of December 31, 1996 when compared to a lower gas price in effect as of
December 31, 1995. . 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 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 increased from $72,752 in 1996 to $104,010 in
1997. The Partnership showed an increase in both oil and gas production,
from 28,469 MCF's and 374 BBBls in 1996 to 32,827 MCF's and 570 BBL's. The
average price per MCF received for 1997 was $2.48 as compared to the 1996
average price of $2.33 per MCF. The combination of increased production and
increased average prices resulted in the total revenue increase. Production
expenses increased from $29,566 in 1996 to $44,154 in 1997. In 1997 some
additional costs for general maintenance were incurred. These costs include
those associated with repairs needed for access to the well and well sites
and the related labor costs. Also, variable costs associated with
production increased, for example the related well taxes which are based
upon production data. The production expenses incurred in 1996 were of a
normal and recurring nature to upkeep the wells.
General and administrative expenses to a related party increased from
$18,750 in 1996 to $24,999 in 1997. 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 1996 and
1997 are substantially less than the amounts allocable to the Registrant
under the Partnership Agreement. The Partnership's third party costs
showed a slight decline. 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 1996 or first quarter
1997. There were no additional capitalized well related expenditures during
the first quarter of 1997. The lower depletion expense in 1997 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)
May 14, 1997 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,
1997 1996
Assets
Current assets:
Cash and cash equivalents $ 157,944 $ 141,617
Due from others 25,137 9,595
----------- -----------
Total current assets 183,081 151,212
----------- -----------
Oil and gas properties -
successful efforts method:
Leasehold costs 321,314 321,314
Well and related facilities 9,145,511 9,145,511
less accumulated
depreciation, depletion and
amortization (7,907,589) (7,888,531)
----------- -----------
1,559,236 1,578,294
----------- -----------
Total assets $ 1,742,317 $ 1,729,506
=========== ===========
Partners' equity
Limited partners 1,683,070 1,675,879
General partners 59,247 53,627
----------- -----------
Total partners' equity $ 1,742,317 $ 1,729,506
=========== ===========
See accompanying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1997
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 79,568 24,442 $ 104,010
Interest income 1,517 141 1,658
-------- -------- -------
Total Revenue 81,085 24,583 105,668
-------- -------- -------
Costs and Expenses:
Production expense 33,778 10,376 44,154
General and administrative
to a related party 19,124 5,875 24,999
General and administrative 3,554 1,092 4,646
Depreciation, depletion
and amortization 17,438 1,620 19,058
-------- -------- -------
Total Costs and Expenses 73,894 18,963 92,857
-------- -------- -------
Net Income $ 7,191 5,620 $ 12,811
======== ======== =======
Net Income per equity unit $ 0.65
======
See accompanying 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 accompanying 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, 1995 $ 1,759,361 $ 63,506 $ 1,822,867
Partners' contributions 0 177 177
Cash distributions (41,538) (11,621) (53,159)
Net Income(Loss) (41,944) 1,565 (40,379)
--------- -------- ---------
Balance at December 31, 1996 $ 1,675,879 $ 53,627 $ 1,729,506
Net Income 7,191 5,620 12,811
--------- -------- ----------
Balance at March 31, 1997 $ 1,683,070 $ 59,247 $ 1,742,317
========= ======== ==========
See accompanying 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, 1997 31, 1996
Net cash provided by operating
activities $ 16,327 $ 58,112
--------- ---------
Cash Flows from investing activities:
Investment in wells and related
facilities 0 (4,875)
--------- ---------
Net Cash used in investing activities 0 (4,875)
Net increase in cash and
cash equivalents 16,327 53,237
Cash and cash equivalents at
beginning of period 141,617 87,201
--------- ---------
Cash and cash equivalents at end of
period $ 157,944 $ 140,438
========= =========
See accompanying note to the financial statements.
STERLING DRILLING FUND 1983-1
(a New York limited partnership)
Note to Financial Statements
March 31, 1997
1. The accompanying statements for the period ending March 31,
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 Drilling fund 1983-1's first quarter 1997 10Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 157,944
<SECURITIES> 0
<RECEIVABLES> 25,137
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 183,081
<PP&E> 9,466,825
<DEPRECIATION> (7,907,589)
<TOTAL-ASSETS> 1,742,317
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,742,317<F1>
<TOTAL-LIABILITY-AND-EQUITY> 1,742,317
<SALES> 105,668<F2>
<TOTAL-REVENUES> 105,668
<CGS> 92,857
<TOTAL-COSTS> 92,857
<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> 12,811
<EPS-PRIMARY> 0.65<F3>
<EPS-DILUTED> 0
<FN>
<F1>Other-se includes total partners' equity.
<F2>Sales includes $1,658 of interest income.
<F3>The limited partnership income was divided by the total number of
limited partnership units of 11,077.
</FN>
</TABLE>
