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<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 September 30, 2000
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 |
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STERLING DRILLING FUND 1983-1 |
|
(Exact name of registrant as specified in charter) |
|
New York |
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(State or other jurisdiction of incorporation or organization) |
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13-3167549 |
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(IRS employer identification number) |
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1 Landmark Square, Stamford, Connecticut 06901 |
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(Address and Zip Code of principal executive offices) |
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(203) 358-5700 |
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(Registrant's telephone number, including area code) |
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Not Applicable |
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(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 too such filing requirements for the past 90 days. Yes/X/ No / /
<page> 2
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Item 1. Financial Statements |
|
The following Financial Statements are filed herewith: |
|
Balance Sheets - September 30, 2000 and December 31, 1999. |
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Statements of Operations for the Nine and Three Months Ended September 30, 2000 and 1999. |
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Statements of Changes in Partners' Equity for the Nine and Three Months Ended September 30, 2000 and 1999. |
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Statements of Cash Flows for the Nine Months Ended September 30, 2000 and 1999. |
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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 September 30, 2000, the General Partners' have distributed $2,409,247.50 or 21.75% 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 future net revenue (S.E.C. case) associated with such reserves, discounted at 10% as of December 31, 1999, was approximately $1,153,900 as compared to the discounted reserves as of December 31, 1998, which were approximately $915,800. 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.
<page> 3
3. Results of Operations -
The combination of both increased pricing and increased production resulted in the Partnership's operating revenues significant increase from $167,656 in 1999 to $279,539 in 2000. The change in gas and oil production was from 68,954 MCF and 460 BBLS to 77,098 MCF and 934 BBLS in 2000. The average price per MCF increased, from $2.33 in 1999 to $3.31 in 2000. Production expenses increased from $76,250 in 1999 to $ 135,206 in 2000. The production expenses include variable costs associated with volume changes, repairs and labor costs associated with the wells and well sites. Production expenses, during 1999, were limited to normal maintenance and upkeep of the wells and well sites. During 2000 some additional maintenance was performed at various sites in order to help increase and maintain production levels. Also the variable costs which are based upon production volumes increased due to higher activity.
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 1999 and 2000 are substantially less than the amounts allocable to the Registrant under the Partnership Agreement. Management continues to work on reducing 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 property basis in either 1999 or through the third quarter of 2000. There were no additional capitalized well-related expenditures during the first half of 2000.
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> 4
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.
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STERLING DRILLING FUND 1983-1 |
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(Registrant) |
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BY:/s/ Charles E. Drimal Jr. |
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Charles E. Drimal, Jr., |
|
General Partner |
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September 9, 2000 |
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(Date) |
<page>5
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Balance Sheets
|
September 30, 2000 |
December 31, 1999 |
|||
|
(unaudited) |
(audited) |
|||
|
Assets |
||||
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Current assets: |
||||
|
Cash and cash equivalents |
$ |
182,612 |
$ |
126,703 |
|
Due from affiliates |
10,754 |
40,368 |
||
|
------------------ |
------------------ |
|||
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Total current assets |
193,366 |
167,071 |
||
|
------------------ |
------------------ |
|||
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Oil and gas properties - Successful efforts method: |
||||
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Leasehold costs |
321,314 |
321,314 |
||
|
Well and related facilities |
8,934,084 |
8,934,084 |
||
|
less accumulated ,depreciation, depletion and |
||||
|
amortization |
(7,956,516) |
(7,898,828) |
||
|
------------------ |
------------------ |
|||
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Total Oil and Gas Properties |
1,298,882 |
1,356,570 |
||
|
------------------ |
------------------ |
|||
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Total assets |
$ |
1,492,248 |
$ |
1,523,641 |
|
=========== |
=========== |
|||
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Partners' Equity |
||||
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Partners' equity |
||||
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Limited partners |
1,439,918 |
1,472,473 |
||
|
General partners |
51,930 |
51,168 |
||
|
------------------ |
------------------ |
|||
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Total partners' equity |
$ |
1,492,248 |
$ |
1,523,641 |
|
============ |
============ |
See accompanying note to the financial statements.
<page>6
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Nine Months Ending September 30, 2000 |
|
Limited Partners |
General Partners |
Total |
||||
|
Revenue: |
||||||
|
Operating revenue |
$ |
213,847 |
65,692 |
$ |
279,539 |
|
|
Interest income |
6,767 |
629 |
7,396 |
|||
|
------------- |
------------- |
------------- |
||||
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Total Revenue |
220,614 |
66,321 |
286,935 |
|||
|
------------- |
------------- |
------------- |
||||
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Costs and Expenses: |
||||||
|
Production expense |
103,433 |
31,773 |
135,206 |
|||
|
General and administrative to a related |
||||||
|
party |
57,373 |
17,624 |
74,997 |
|||
|
General and administrative |
11,886 |
3,651 |
15,537 |
|||
|
Depreciation, depletion and |
||||||
|
amortization |
52,785 |
4,903 |
57,688 |
|||
|
------------- |
------------- |
------------- |
||||
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Total Costs and Expenses |
225,477 |
57,951 |
283,428 |
|||
|
------------- |
------------- |
------------- |
||||
|
Net Income (Loss) |
$ |
(4,863) |
8,370 |
$ |
3,507 |
|
|
======== |
======== |
======= |
||||
|
Net Income (Loss) per equity unit |
$ |
(0.44) |
||||
|
======== |
See accompanying note to the financial statements.
<page>7
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Nine Months Ending September 30, 1999 |
|
Limited Partners |
General Partners |
Total |
||||
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Revenue: |
||||||
|
Operating revenue |
$ |
128,257 |
39,399 |
$ |
167,656 |
|
|
Other revenue |
2,295 |
705 |
3,000 |
|||
|
Interest income |
4,187 |
390 |
4,577 |
|||
|
------------- |
------------- |
------------- |
||||
|
Total Revenue |
134,739 |
40,494 |
175,233 |
|||
|
------------- |
------------- |
------------- |
||||
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Costs and Expenses: |
||||||
|
Production expense |
58,331 |
17,919 |
76,250 |
|||
|
General and administrative to a related |
||||||
|
Party |
57,376 |
17,625 |
75,001 |
|||
|
General and administrative |
11,464 |
3,522 |
14,986 |
|||
|
Depreciation, depletion and |
||||||
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Amortization |
47,951 |
4,454 |
52,405 |
|||
|
------------- |
------------- |
------------- |
||||
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Total Costs and Expenses |
175,122 |
43,520 |
218,642 |
|||
|
------------- |
------------- |
------------- |
||||
|
Net Income (Loss) |
$ |
(40,383) |
(3,026) |
$ |
(43,409) |
|
|
======== |
======== |
======== |
||||
|
Net Income (Loss) per equity unit |
$ |
(3.65) |
||||
|
======== |
See accompanying note to the financial statements.
<page> 8
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Three Months Ending September 30, 2000 |
|
Limited Partners |
General Partners |
Total |
||||
|
Revenue: |
||||||
|
Operating revenue |
$ |
57,469 |
17,654 |
$ |
75,123 |
|
|
Interest income |
2,304 |
214 |
2,518 |
|||
|
------------- |
------------- |
------------- |
||||
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Total Revenue |
59,773 |
17,868 |
77,641 |
|||
|
------------- |
------------- |
------------- |
||||
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Costs and Expenses: |
||||||
|
Production expense |
39,138 |
12,022 |
51,160 |
|||
|
General and administrative to a related |
||||||
|
Party |
19,125 |
5,874 |
24,999 |
|||
|
General and administrative |
63 |
19 |
82 |
|||
|
Depreciation, depletion and |
||||||
|
amortization |
17,596 |
1,634 |
19,230 |
|||
|
------------- |
------------- |
------------- |
||||
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Total Costs and Expenses |
75,922 |
19,549 |
95,471 |
|||
|
------------- |
------------- |
------------- |
||||
|
Net Income(Loss) |
$ |
(16,149) |
(1,681) |
$ |
(17,830) |
|
|
======== |
======== |
========= |
||||
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Net Income(Loss) per equity unit |
$ |
(1.46) |
||||
|
======== |
See accompanying note to the financial statements.
<page> 9
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Three Months Ending September 30, 1999 |
|
Limited Partners |
General Partners |
Total |
||||
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Revenue: |
||||||
|
Operating revenue |
$ |
60,615 |
18,620 |
$ |
79,235 |
|
|
Interest income |
641 |
61 |
702 |
|||
|
------------- |
------------- |
------------- |
||||
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Total Revenue |
61,256 |
18,681 |
79,937 |
|||
|
------------- |
------------- |
------------- |
||||
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Costs and Expenses: |
||||||
|
Production expense |
21,017 |
6,457 |
27,474 |
|||
|
General and administrative to a related |
||||||
|
Party |
19,124 |
5,875 |
24,999 |
|||
|
General and administrative |
3,453 |
1,061 |
4,514 |
|||
|
Depreciation, depletion and |
||||||
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Amortization |
17,222 |
1,599 |
18,821 |
|||
|
------------- |
------------- |
------------- |
||||
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Total Costs and Expenses |
60,816 |
14,992 |
75,808 |
|||
|
------------- |
------------- |
------------- |
||||
|
Net Income(Loss) |
$ |
440 |
3,689 |
$ |
4,129 |
|
|
======== |
======== |
========= |
||||
|
Net Income(Loss) per equity unit |
$ |
.04 |
||||
|
======== |
See accompanying note to the financial statements.
<page> 10
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
|
Nine Months Ended September 30, 2000 |
|
Limited Partners |
General Partners |
Total |
||||
|
Balance at beginning of period |
$ |
1,472,473 |
51,168 |
$ |
1,523,641 |
|
|
Partner's contributions |
0 |
117 |
117 |
|||
|
Cash Distributions |
(27,692) |
(7,325) |
(35,017) |
|||
|
Net Income(Loss) |
(4,863) |
8,370 |
3,507 |
|||
|
------------- |
------------- |
------------- |
||||
|
Balance at end of period |
$ |
1,439,918 |
52,330 |
$ |
1,492,2484 |
|
|
======== |
======== |
========= |
||||
|
Nine Months Ended September 30, 1999 |
||||||
|
Limited Partners |
General Partners |
Total |
||||
|
Balance at beginning of period |
$ |
1,579,044 |
55,675 |
$ |
1,634,719 |
|
|
Partners' contributions |
0 |
175 |
175 |
|||
|
Cash Distributions |
(41,539) |
(11,068) |
(52,607) |
|||
|
Net Income(Loss) |
(40,383) |
(3,026) |
(43,409) |
|||
|
------------- |
------------- |
------------- |
||||
|
Balance at end of period |
$ |
1,496,122 |
41,756 |
$ |
1,538,878 |
|
|
======== |
======== |
========= |
See accompanying note to the financial statements.
<page> 11
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
|
Three Months Ended September 30, 2000 |
|
Limited Partners |
General Partners |
Total |
||||
|
Balance at beginning of period |
$ |
1,456,067 |
53,894 |
$ |
1,509,961 |
|
|
Partner's contributions |
0 |
117 |
117 |
|||
|
Net Income(Loss) |
(16,149) |
(1,681) |
(17,830) |
|||
|
--------------- |
--------------- |
--------------- |
||||
|
Balance at end of period |
$ |
1,439,918 |
52,330 |
$ |
1,492,248 |
|
|
========= |
========= |
========= |
||||
|
Three Months Ended September 30, 1999 |
||||||
|
Limited Partners |
General Partners |
Total |
|||||
|
Balance at beginning of period |
$ |
1,496,682 |
37,892 |
$ |
1,534,574 |
||
|
Partners' contributions |
0 |
175 |
175 |
||||
|
Net Income(Loss) |
440 |
3,689 |
4,129 |
||||
|
------------- |
------------- |
------------- |
|||||
|
Balance at end of period |
$ |
1,497,122 |
41,756 |
$ |
1,538,878 |
||
|
========= |
======== |
========= |
|||||
See accompanying note to the financial statements.
<page> 12
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
|
Nine months Ended September 30, 2000 |
Nine months Ended September 30, 1999 |
|||
|
Net cash provided by (used in) operating activities |
$ |
90,809 |
$ |
27,923 |
|
------------- |
------------- |
|||
|
Cash Flows from investing activities: |
||||
|
Investment in wells and related facilities |
0 |
(350) |
||
|
------------- |
------------- |
|||
|
Net Cash used in investing activities |
0 |
(350) |
||
|
Cash flows from financing activities: |
||||
|
Distribution to partners |
(35,017) |
(52,607) |
||
|
Partners contribution |
117 |
175 |
||
|
------------- |
------------- |
|||
|
Net cash used in financing activities |
(34,900) |
(52,432) |
||
|
------------- |
------------- |
|||
|
Net increase(decrease) in cash and cash equivalents |
55,909 |
(24,859) |
||
|
Cash and cash equivalents at beginning of period |
126,703 |
174,678 |
||
|
------------- |
------------- |
|||
|
Cash and cash equivalents at end of period |
$ |
182,612 |
$ |
149,819 |
|
========= |
========= |
See accompanying note to the financial statements.
<page> 13
STERLING DRILLING FUND 1983-1
(a New York limited partnership)
Note to Financial Statements
September 30, 2000
1. The accompanying statements for the period ending September 30, 2000 are unaudited but reflect all adjustments necessary to present fairly the results of operations.
|
|