<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 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 2-84452-01
STERLING DRILLING FUND 1983-2
(Exact name of registrant as specified in charter)
New York
(State or other jurisdiction of corporation or organization)
13-3167551
(IRS employer identification number)
One 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 Registrant to calculate its position in the
industry as the Registrant 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 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 any contingent debts, liabilities or expenses for the
conduct of the Partnership business. As of March 31,2000, the
General partners have distributed $1,789,455, or 11.40%, 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
revenues (S.E.C. case) associated with such reserves, discounted
at 10% as of December 31, 1999, was approximately $1,368,563 as
compared to the discounted reserves as of December 31, 1999,
which were approximately $1,009,000. Overall 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.
<PAGE> 3
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 December 1983 for $13,400,000.
Pursuant to terms of this contract, fifty-two wells have been
drilled resulting in fifty-one producing wells and one dry hole.
3. Results of Operations -
Overall operating revenues increased from $60,855 in 1999 to
$124,550 in 2000. The partnership's gas production increased from
29,213 MCF in 1999 to 33,531 MCf in 2000. The average price per
MCF in 2000 of $3.21 was significantly higher then the average
price per MCF of $ 2.57 in 1999.Although the partnerhsip receives
the majority of its revenue from gas production, it did receive
more oil revenue in 2000 then it did in 1999. The Partnership's
oil revenue was higher due to higher average price per barrel of
$24.81 in 2000. Production expenses were changed from $26,144 in
1999 to $56,267. The cost associated both 1999 and 2000 include
those associated with general mainanence as well as variable
costs. The general maintanence includes repairs needed for
access to the well and well sites and the related labor costs.
The variable costs may include, but are not limited to,
production taxes that are based upon volumes and price.
General and administrative expenses to a related party in 2000
remained consistent with amounts incurred in 1999. The
Partnership's third party costs increased. Management continues
to manage third party costs and use in-house resources to provide
efficient and timely services to the partnership. The related
party general and administrative 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.
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 1999 or first quarter 2000.
Depletion expense for both years was reasonable based upon the
property basis and rates applied.
<PAGE> 4
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> 5
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 1983-2
(Registrant)
By: /s/ Charles E. Drimal, Jr.
------------------------------
Charles E. Drimal, Jr.
General Partner
May 12, 2000
(Date)
<PAGE> 6
STERLING DRILLING FUND 1983-2
(a New York Limited Partnership)
Balance Sheets
(unaudited)
March 31, December 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $ 95,575 $ 75,872
Due from affiliates 0 39,003
Due from others 50,167 0
----------- -----------
Total current assets 145,742 114,875
Oil and gas properties -
successful efforts method:
Leasehold costs 497,639 497,639
Well and related facilities 12,982,590 12,946,528
less accumulated depreciation,
depletion and amortization (12,351,618) (12,335,303)
----------- -----------
1,128,611 1,108,864
----------- -----------
Total assets $ 1,274,353 $ 1,223,739
============ ============
Liabilities and Partner's Equity
Current Liabilities
Due to affiliates $ 28,930 $ 0
----------- -----------
Total current liabilities $ 28,930 $ 0
----------- -----------
Partners' equity
Limited partners $ 1,231,351 $ 1,216,998
General partners 14,072 6,741
----------- -----------
Total partners' equity $ 1,245,423 $ 1,223,739
----------- -----------
Total Liabilities and 1,274,353 1,223,739
Partner's Equity $ =========== $ ===========
See accompanying note to financial statements.
<PAGE> 7
STERLING DRILLING FUND 1983-2
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 2000
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 95,281 29,269 $ 124,550
Interest income 1,284 119 1,403
------- ------- -------
Total Revenue 96,565 29,388 125,953
------- ------- -------
Costs and Expenses:
Production expense 43,044 13,223 56,267
General and administrative
to a related party 19,124 5,875 24,999
General and administrative 5,116 1,572 6,688
Depreciation, depletion
and amortization 14,928 1,387 16,315
------- ------- -------
Total Costs and Expenses 82,212 22,057 104,269
------- ------- -------
Net Income (Loss) $ 14,353 7,331 $ 21,684
======= ======= =======
Net Income(Loss)
per equity unit $ .91
======
See accompanying note to financial statements.
<PAGE> 8
STERLING DRILLING FUND 1983-2
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1999
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 46,554 14,301 $ 60,855
Interest income 1,220 113 1,333
------- ------- -------
Total Revenue 47,774 14,414 62,188
------- ------- -------
Costs and Expenses:
Production expense 20,000 6,144 26,144
General and administrative
to a related party 19,127 5,876 25,003
General and administrative 1,453 447 1,900
Depreciation, depletion
and amortization 13,388 1,244 14,632
------- ------- -------
Total Costs and Expenses 53,968 13,711 67,679
------- ------- -------
Net Income/(Loss) $ (6,194) 703 $ (5,491)
======= ======= =======
Net Income/(Loss)
per equity unit $ (0.39)
======
See accompanying note to financial statements.
<PAGE> 9
STERLING DRILLING FUND 1983-2
Statement of Changes in Partners' Equity
(unaudited)
Limited General
Partners Partners Total
Balance at December 31, 1998 $ 1,279,323 $ 12,330 $ 1,291,653
Parnters' contributions --- 112 112
Distribution to partners (39,243) (11,185) (50,428)
Net Income(Loss) (23,082) 5,484 (17,598)
-------- -------- --------
Balance at December 31, 1999 $ 1,216,998 6,741 1,223,739
Net Income (Loss) 14,353 7,331 21,684
-------- -------- --------
Balance at March 31, 2000 $ 1,231,351 14,072 1,245,423
======== ======== ========
See accompanying note to financial statements.
<PAGE> 10
STERLING DRILLING FUND 1983-2
(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 $ 55,765 $ 44,061
---------- ----------
Cash flows from investing activities:
Investment in well and related
facilities (36,062) 0
---------- ----------
Net Cash used in investing activities (36,062) 0
---------- ----------
Net increase in cash and cash equivalents 19,703 44,061
Cash and cash equivalents at
beginning of period 75,872 88,554
---------- ----------
Cash and cash equivalents at end of
period $ 95,575 $ 132,615
========== ==========
See accompanying note to financial statements.
<PAGE> 11
STERLING DRILLING FUND 1983-2
(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 1983-2 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> 95,575
<SECURITIES> 0
<RECEIVABLES> 50,167
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 145,742
<PP&E> 13,480,229
<DEPRECIATION> (12,351,618)
<TOTAL-ASSETS> 1,274,353
<CURRENT-LIABILITIES> 28,930
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,245,423<F1>
<TOTAL-LIABILITY-AND-EQUITY> 1,274,353
<SALES> 125,953<F2>
<TOTAL-REVENUES> 125,953
<CGS> 104,269
<TOTAL-COSTS> 104,269
<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> 21,684
<EPS-BASIC> 0.91<F3>
<EPS-DILUTED> 0
<FN>
<F1>Other se includes total partner's equity.
<F2>Sales include $1,403 of interest income.
<F3>The total income attributable to the limited partner class was
divided by the total number of limited partner units.
</FN>
</TABLE>
