<PAGE> 1
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, 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
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 / /
<PAGE> 2
PART I
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - March 31, 2000 and December 31, 1999.
Statements of Operations for the Three Months Ended March 31, 2000 and 1999.
Statements of Changes in Partners' Equity for the year ended
December 31,1999 and for the Three Months Ended March 31, 2000.
Statements of Cash Flows for the Three Months Ended March 31, 2000 and 1999.
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 between this industry and other
industries in supplying energy and fuel requirements of industrial and
residential consumers. It is not possible for the Partnership to calculate
its position in the industry as the Partnership competes with many other
companies having substantially greater financial and other resources. In
accordance with the terms of the Agreement of Limited Partnership of the
Partnership, the General Partners of the Partnership 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 for the conduct of the Partnership business. As of March 31,
2000, the General Partners have distributed to the Limited Partners
$2,381,555 or 21.50% of the total Limited Partner capital contributions to
the Limited Partnership.
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 $1,153,941 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 -
Overall operating revenues increased from $46,595 in 1999 to $108,829 in
2000, the Partnership experienced a strong increase in gas production,
average price per mcf and the average price per barrel. The gas production
increase from 23,653 MCF's 1999 to 26,804 MCF in 2000 combined with higher
average price per MCf of $3.35 in 2000 contributed to higher gas revenue.
The partnership does receive some of its revenue from oil production. The
oil revenue received was helped by the higher average oil price received of
$26.46 per barrel and 723 bbbls produced in 2000. Production expenses
increased from $28,519 in 1999 to $44,411 in 2000. The costs for 1999 and
2000 include those associated with repairs needed for access to the well
and well sites and the related labor costs. Other costs include, but are
not limited to, the related well taxes which vary based upon production
volumes and price. The total production costs for both years was reasonable
based upon volumes and needed maintenance.
General and administrative costs from a related party 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 years
aresubstantially less than the amounts allocable to the Registrant under
the Partnership Agreement. Management continues to use all its in-house
resources as efficiently and timely as possible to minimize costs.
General and administrative expenses to a related party and to third
parties increased slightly from 1999 to 2000.
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 significantly revise the property basis in either 1999 or
first quarter 2000 due to additional depletion. Depletion expense is
reasonable, in both years, based upon the rates and property basis
reported.
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.
STERLING DRILLING FUND 1983-1
(Registrant)
May 12, 2000 BY: /S/ Charles E. Drimal Jr.
(Date) -----------------------------
Charles E. Drimal, Jr.,
General Partner
<PAGE> 5
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Balance Sheets
(unaudited)
March 31, December 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $ 161,443 $ 126,703
Due from others 43,359 40,368
----------- -----------
Total current assets 204,802 167,071
----------- -----------
Oil and gas properties -
Successful efforts method:
Leasehold costs 321,314 321,314
Well and related facilities 8,934,084 8,934,084
less accumulated
depreciation, depletion and
amortization (7,918,057) (7,898,828)
----------- -----------
1,337,341 1,356,570
----------- -----------
Total assets $ 1,542,143 $ 1,523,641
=========== ===========
Liabilities and Partner's Equity
Current Liabilities
Due to affiliates $ 821 $ 0
----------- -----------
Total current liabilities $ 821 $ 0
----------- -----------
Partners' equity
Limited partners 1,483,483 1,472,473
General partners 57,839 51,168
----------- -----------
Total partners' equity 1,541,322 1,523,641
----------- -----------
Total partners' equity
and liabilities $ 1,542,143 $ 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)
Three Months Ended
March 31, 2000
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 83,254 25,575 108,829
Interest income 2,249 209 2,458
-------- -------- -------
Total Revenue 85,503 25,784 111,287
-------- -------- -------
Costs and Expenses:
Production expense 33,974 10,437 44,411
General and administrative
To a related party 19,124 5,875 24,999
General and administrative 3,800 1,167 4,967
Depreciation, depletion
and amortization 17,595 1,634 19,229
-------- -------- -------
Total Costs and Expenses 74,493 19,113 93,606
-------- -------- -------
Net Income (Loss) $ 11,010 6,671 17,681
-------- -------- -------
Net Income (Loss)
per equity unit $ .99
======
See accompanying note to the financial statements.
<PAGE> 7
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1999
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 35,645 10,950 46,595
Interest income 2,024 188 2,212
-------- -------- -------
Total Revenue 37,669 11,138 48,807
-------- -------- -------
Costs and Expenses:
Production expense 21,817 6,702 28,519
General and administrative
to a related party 19,127 5,876 25,003
General and administrative 1,252 385 1,637
Depreciation, depletion
and amortization 15,365 1,427 16,792
-------- -------- -------
Total Costs and Expenses 57,561 14,390 71,951
-------- -------- -------
Net Income/ (Loss) $ (19,892) (3,252) $ (23,144)
-------- -------- -------
Net Income/(Loss)
per equity unit $ (1.80)
======
See accompanying note to the financial statements.
<PAGE> 8
STERLING DRILLING FUND 1983-1
Statement of Changes in Partners' Equity
(unaudited)
Limited General
Partners Partners Total
Balance at December 31, 1998 $ 1,579,044 $ 55,675 $ 1,634,719
Partners' contributions 0 175 175
Distribution to partners (41,538) (11,068) (52,606)
Net Income/(Loss) (65,033) 6,386 (58,647)
--------- --------- -----------
--- --- -
Balance at December 31, 1999 $ 1,472,473 $ 51,168 $ 1,523,641
Net Income (Loss) 11,010 6,671 17,681
--------- --------- -----------
--- --- -
Balance at March 31, 2000 $ 1,483,483 $ 57,839 $ 1,541,322
======== ======== ========
See accompanying note to the financial statements.
<PAGE> 9
STERLING DRILLING FUND 1983-1
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Three months Three months
ended March Ended March
31, 2000 31, 1999
Net cash provided by operating
activities $ 34,740 $ 31,617
---------- ---------
Cash Flows from investing activities:
Investment in wells and related
facilities 0 0
---------- ---------
Net Cash (used in)investing activities 0 0
Net increase in cash and
cash equivalents 34,740 31,617
Cash and cash equivalents at
beginning of period 126,703 174,678
---------- ---------
Cash and cash equivalents at end of
period $ 161,443 $ 206,295
========= =========
See accompanying note to the financial statements.
<PAGE> 10
STERLING DRILLING FUND 1983-1
(a New York limited partnership)
Note to Financial Statements
March 31, 2000
1. The accompanying statements for the period ending March 31,
2000 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 first quarter 2000 10Q and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 161,443
<SECURITIES> 0
<RECEIVABLES> 43,359
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 204,802
<PP&E> 9,255,398
<DEPRECIATION> (1,542,143)
<TOTAL-ASSETS> 821
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,541,322<F1>
<TOTAL-LIABILITY-AND-EQUITY> 1,542,143
<SALES> 111,287<F2>
<TOTAL-REVENUES> 111,287
<CGS> 93,606
<TOTAL-COSTS> 93,606
<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> 17,681
<EPS-BASIC> 0.99<F3>
<EPS-DILUTED> 0
<FN>
<F1>Other se includes total parners' equity.
<F2>Sales includes $2,458 of interest income.
<F3>The net income allocated to the limited partner class was
divided by the total limited partner units of 11,077.
</FN>
</TABLE>
