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, 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 0-13457
Sterling Drilling Fund 1984-1
(Exact name of registrant as specified in charter)
New York
(State or other jurisdiction of incorporation or
organization)
13-3234373
(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 / /
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
1. Liquidity -
The oil and gas industry is intensely competitive in all its phases.
There is also competition among 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, 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 or for
the conduct of the Partnership's business. As of March 31,1997 the
General Partners have distributed $1,662,480 or 18.00% 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 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, 1996 was approximately $986,500 as compared to
$689,100 as of December 31, 1995. The increase in total estimated
discounted future net revenue was primarily due to higher year end gas
prices as of December 31, 1996 compared to the gas price in effect
as of December 31, 1995. 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
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 October 1984 for $7,750,000. Pursuant to
the terms of this contract thirty-two wells have been drilled,
resulting in thirty-two producing wells.
3. Results of Operations -
Operating revenues increased from $62,364 in 1996 to $90,850 in 1997.
The partnership experienced a minor increase in gas production, from
21,378 MCF in 1996 and 22,746 MCF in 1997, and very little change in
oil production. The Partnership did benefit from increased average
price per MCF and BBL, from $2.40 and $16.12 in 1996 to $2.90 and
$20.50 in 1997. The price increase was the main contributor to the
increase in overall revenue.
Production expenses changed from $28,090 in 1996 to $42,393 in 1997.
In the first quarter 1997 the Partnership experienced a rise in
general upkeep costs associated with access to the wells and related
labor costs at the well site. Also, variable costs associated with
production increased, for example the related well taxes which are
based upon production data. The Partnership participated in normal
and recurring well and well site costs during the first quarter 1996.
General and administrative expenses to a related party increased from
$12,501 in 1996 to $15,000 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. The Partnership did not
expend funds , during the first quarter 1997, on any capitalized well
equipment . The lower depletion expense in 1997 is due to overall
lower depletable cost basis, from 1996 to 1997, 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 . 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 1984-1
May 14, 1997 BY: /S/ Charles E. Drimal, Jr.
(DATE) --------------------
Charles E. Drimal, Jr.
General Partner
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Balance Sheets
(unaudited)
March 31, December 31,
1997 1996
Assets
Current Assets:
Cash and cash equivalents $ 52,765 $ 20,620
Due from affiliates 1,707 4,382
----------- ------------
Total current assets 54,472 25,002
----------- ------------
Oil and Gas properties -
successful efforts method:
Leasehold costs 323,260 323,260
Well and related facilities 7,580,739 7,580,739
less accumulated
depreciation, depletion and
amortization (6,917,203) (6,905,167)
----------- ------------
986,796 998,832
----------- ------------
Total assets $ 1,041,268 $ 1,023,834
============ ============
Partners' Equity
Limited partners $ 1,055,799 $ 1,043,772
General partners (14,531) (19,938)
----------- ------------
Total partners' equity $ 1,041,268 $ 1,023,834
=========== ============
See accompanying note to financial statements.
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1997
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 71,772 19,078 $ 90,850
Interest income 368 23 391
-------- -------- ---------
Total Revenue 72,140 19,101 91,241
-------- -------- ---------
Costs and Expenses:
Production expense 33,490 8,903 42,393
General and administrative
to a related party 11,850 3,150 15,000
General and administrative 3,459 919 4,378
Depreciation, depletion
and amortization 11,314 722 12,036
-------- -------- ---------
Total Costs and Expenses 60,113 13,694 73,807
-------- -------- ---------
Net Income $ 12,027 5,407 17,434
======== ======== =========
Net Income per equity unit $ 1.30
========
See accompanying note to financial statements.
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
Three Months Ended
March 31, 1996
Limited General
Partners Partners Total
Revenue:
Operating revenue $ 49,268 13,096 $ 62,364
Interest income 22 1 23
-------- -------- ---------
Total Revenue 49,290 13,097 62,387
-------- -------- ---------
Costs and Expenses:
Production expense 22,191 5,899 28,090
General and administrative
to a related party 9,876 2,625 12,501
General and administrative 3,553 945 4,498
Depreciation, depletion
and amortization 11,606 741 12,347
-------- -------- ---------
Total Costs and Expenses 47,226 10,210 57,436
-------- -------- ---------
Net Income $ 2,064 2,887 $ 4,951
======== ======== =========
Net Income per equity unit $ 0.22
========
See accompanying note to financial statements.
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Changes in Partners' Equity
(unaudited)
Limited General
Partners Partners Total
Balance at December 31, 1995 $ 1,080,167 $ (20,084) $ 1,060,083
Partners' contribution 0 162 162
Cash Distributions (23,090) (6,005) (29,095)
Net Income(Loss) (13,305) 5,989 (7,316)
-------- -------- --------
Balance at December 31, 1996 $ 1,043,772 $ (19,938) $ 1,023,834
Net Income 12,027 5,407 17,434
-------- -------- --------
Balance at March 31, 1997 $ 1,055,799 $ (14,531) $ 1,041,268
======== ======== ========
See accompanying note to financial statements.
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Cash Flows
(unaudited)
Three Three
months months
ended March ended March
31, 1997 31, 1996
Net cash provided by operating
activities $ 32,145 $ (57)
---------- --------
Net increase(decrease) in cash and
cash equivalents 32,145 (57)
Cash and cash equivalents at
beginning of period 20,620 1,401
----------- ---------
Cash and cash equivalents at end of
period $ 52,765 $ 1,344
=========== =========
See accompanying note to financial statements.
STERLING DRILLING FUND 1984-1
(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 1984-1's first quarter 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> 52,765
<SECURITIES> 0
<RECEIVABLES> 1,707
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 54,472
<PP&E> 7,903,999
<DEPRECIATION> (6,917,203)
<TOTAL-ASSETS> 1,041,268
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,041,268<F1>
<TOTAL-LIABILITY-AND-EQUITY> 1,041,268
<SALES> 91,241<F2>
<TOTAL-REVENUES> 91,241
<CGS> 73,807
<TOTAL-COSTS> 73,807
<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> 17,434
<EPS-PRIMARY> 1.30<F3>
<EPS-DILUTED> 0
<FN>
<F1>Other-se includes total partners' equity.
<F2>Sales includes $391 of interest income.
<F3>the limited partnership income was divided by the total number of limited
partnership units of 9,236.
</FN>
</TABLE>
