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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 2-91966-01
STERLING DRILLING FUND 1984-1
(Exact name of registrant as specified in charter)
New York
(State or other jurisdiction of incorporation)
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 / /
<page> 2
PART I
Item 1. Financial Statements
The following Financial Statements are filed herewith:
Balance Sheets - September 30, 2000 and December 31, 1999.
Statements of Operations for the Nine and Three Months Ended September 30, 2000 and 1999.
Statements of Changes in Partners' Equity for the Nine and Three Months Ended September 30, 2000 and 1999.
Statements of Cash Flows for the Nine Months Ended September 30, 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 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 $1,754,840.00 or 19.00% 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 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 $897,400, as compared to $649,800 as of December 31, 1998. 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 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 -
The Partnership's gas and oil production increased, from 52,194 MCF and 1,635 BBLS in 1999 to 55,498 MCF and 1,811 BBLS in 2000 The Partnership's average price per MCF and per barrel increased from $2.31 per MCF and $14.30 per barrel in 1999 to $3.30 per MCF and $23.69 per barrel. The combination of both price and production increases resulted in an overall operating revenue to change from $144,125 in 1999 to $226,183 in 2000. Production expenses increased $85,591 in 1999 to $135,419. Production expenses include labor, repairs, location costs and variable cost. Variable costs are typically those lease operating expenses that fluctuate based on production volumes. Production expenses, during 1999, were limited to normal maintenance and upkeep of the wells and well sites. During 2000 the wells and well sites required additional maintanence work as well as having higher variable cost due to increased volumes.
General and administrative expenses to 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 1999 and 2000 are substantially less than the amounts allocable to the Registrant under the Partnership Agreement. Management continues to manage 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 1999 or during the first nine months of 2000. The current depreciation was reasonable based upon the current remaining basis in the Partnership properties.
PART II
Items 1 to 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 during the period covered by this report.
Exhibit 27 - Financial data schedule is attached to the current filling 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 1984-1 |
|
(Registrant) |
|
By: /S/ Charles E. Drimal Jr. |
|
Charles E. Drimal, Jr. |
|
General Partner |
|
November 9, 2000 |
|
(Date) |
<page>5
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Balance Sheets
|
September 30, 2000 |
December 31, 1999 |
|||
|
(unaudited) |
(audited) |
|||
|
Assets |
||||
|
Current Assets: |
||||
|
Cash and cash equivalents |
$ |
16,884 |
$ |
41,313 |
|
Due from affiliates |
0 |
20,914 |
||
|
Due from others |
12,107 |
0 |
||
|
-------------- |
-------------- |
|||
|
Total current assets |
28,991 |
62,227 |
||
|
-------------- |
-------------- |
|||
|
Oil and Gas properties - |
||||
|
successful efforts method: |
||||
|
Leasehold costs |
323,260 |
323,260 |
||
|
Well and related facilities |
7,708,143 |
7,658,884 |
||
|
less accumulated depreciation, depletion |
||||
|
and amortization |
(7,104,961) |
(7,066,272) |
||
|
-------------- |
-------------- |
|||
|
926,442 |
915,872 |
|||
|
-------------- |
-------------- |
|||
|
Total assets |
$ |
955,433 |
$ |
978,099 |
|
======== |
======== |
|||
|
Liabilities and Partner's Equity |
||||
|
Current Liabilities: |
||||
|
Due to affiliates |
$ |
7,034 |
$ |
0 |
|
-------------- |
-------------- |
|||
|
Total current liabilities |
7,034 |
0 |
||
|
-------------- |
-------------- |
|||
|
Partner's Equity |
||||
|
Limited partners |
946,544 |
978,629 |
||
|
General partners |
1,855 |
(530) |
||
|
-------------- |
-------------- |
|||
|
Total partners' equity |
948,399 |
978,099 |
||
|
-------------- |
-------------- |
|||
|
Total liabilities and partner's equity |
$ |
955,433 |
$ |
978,099 |
|
======== |
======== |
See accompanying note to financial statements.
<page>6
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Nine Months Ending September 30, 2000 |
|
Limited Partners |
General Partners |
Total |
||||
|
Revenue: |
||||||
|
Operating revenue |
$ |
178,685 |
47,498 |
$ |
226,183 |
|
|
Interest income |
1,597 |
102 |
1,699 |
|||
|
---------- |
---------- |
---------- |
||||
|
Total Revenue |
180,282 |
47,600 |
227,882 |
|||
|
---------- |
---------- |
---------- |
||||
|
Costs and Expenses: |
||||||
|
Production expense |
106,191 |
28,228 |
134,419 |
|||
|
General and administrative to a related party |
35,550 |
9,450 |
45,000 |
|||
|
General and administrative |
11,168 |
2,969 |
14,137 |
|||
|
Depreciation, depletion and amortization |
36,368 |
2,321 |
38,689 |
|||
|
---------- |
---------- |
---------- |
||||
|
Total Costs and Expenses |
189,277 |
42,968 |
232,245 |
|||
|
---------- |
---------- |
---------- |
||||
|
Net Income (Loss) |
$ |
(8,995) |
4,632 |
$ |
(4,363) |
|
|
====== |
====== |
====== |
||||
|
Net Income (Loss) per equity unit |
$ |
(0.97) |
||||
|
====== |
See accompanying note to financial statements.
<page> 7
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Nine Months Ending September 30, 1999 |
|
Limited Partners |
General Partners |
Total |
||||
|
Revenue: |
||||||
|
Operating revenue |
$ |
113,859 |
30,266 |
$ |
144,125 |
|
|
Other revenue |
2,300 |
611 |
2,911 |
|||
|
Interest income |
1,046 |
67 |
1,113 |
|||
|
-------- |
-------- |
-------- |
||||
|
Total Revenue |
117,205 |
30,944 |
148,149 |
|||
|
-------- |
-------- |
-------- |
||||
|
Costs and Expenses: |
||||||
|
Production expense |
67,617 |
17,974 |
85,591 |
|||
|
General and administrative to a related party |
35,550 |
9,450 |
45,000 |
|||
|
General and administrative |
11,060 |
2,940 |
14,000 |
|||
|
Depreciation, depletion and amortization |
35,975 |
2,296 |
38,271 |
|||
|
-------- |
-------- |
-------- |
||||
|
Total Costs and Expenses |
150,202 |
32,660 |
182,862 |
|||
|
-------- |
-------- |
-------- |
||||
|
Net Income |
$ |
(32,997) |
(1,716) |
$ |
(34,713) |
|
|
======== |
====== |
======== |
||||
|
Net Income per equity unit |
$ |
(3.57) |
|
|||
|
======== |
See accompanying note to financial statements.
<page> 8
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Three Months Ending September 30, 2000 |
|
Limited Partners |
General Partners |
Total |
||||
|
Revenue: |
||||||
|
Operating revenue |
$ |
59,297 |
15,762 |
$ |
75,059 |
|
|
Interest income |
132 |
8 |
140 |
|||
|
---------- |
---------- |
---------- |
||||
|
Total Revenue |
59,429 |
15,770 |
75,199 |
|||
|
---------- |
---------- |
---------- |
||||
|
Costs and Expenses: |
||||||
|
Production expense |
35,430 |
9,418 |
44,848 |
|||
|
General and administrative to a related party |
11,850 |
3,150 |
15,000 |
|||
|
General and administrative |
749 |
199 |
948 |
|||
|
Depreciation, depletion and amortization |
12,123 |
773 |
12,896 |
|||
|
---------- |
---------- |
---------- |
||||
|
Total Costs and Expenses |
60,152 |
13,540 |
73,692 |
|||
|
---------- |
---------- |
---------- |
||||
|
Net Income (Loss) |
$ |
(723) |
2,230 |
$ |
1,507 |
|
|
====== |
====== |
====== |
||||
|
Net Income (Loss) per equity unit |
$ |
(0.07) |
||||
|
====== |
See accompanying note to financial statements.
<page> 9
STERLING DRILLING FUND 1984-1
(a New York Limited Partnership)
Statement of Operations
(unaudited)
|
Three Months Ending September 30, 1999 |
|
Limited Partners |
General Partners |
Total |
||||
|
Revenue: |
||||||
|
Operating revenue |
$ |
55,634 |
14,788 |
$ |
70,422 |
|
|
Other revenue |
0 |
0 |
0 |
|||
|
Interest income |
189 |
12 |
201 |
|||
|
----------- |
----------- |
----------- |
||||
|
Total Revenue |
55,823 |
14,800 |
70,623 |
|||
|
----------- |
----------- |
----------- |
||||
|
Costs and Expenses: |
||||||
|
Production expense |
25,591 |
6,802 |
32,393 |
|||
|
General and administrative to a related party |
11,850 |
3,150 |
15,000 |
|||
|
General and administrative |
3,238 |
861 |
4,099 |
|||
|
Depreciation, depletion and amortization |
11,992 |
765 |
12,757 |
|||
|
------------- |
------------- |
------------ |
||||
|
Total Costs and Expenses |
52,671 |
11,578 |
64,249 |
|||
|
------------- |
-------------- |
------------ |
||||
|
Net Income(loss) |
$ |
3,152 |
3,222 |
$ |
6,374 |
|
|
======= |
======= |
======= |
||||
|
Net Income(loss) per equity unit |
$ |
0.34 |
||||
|
======= |
See accompanying note to financial statements.
<page> 10
STERLING DRILLING FUND 1984-1
(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 |
$ |
978,629 |
(530) |
$ |
978,099 |
|||
|
Partner's Contribution |
0 |
3,576 |
3,576 |
|||||
|
Cash Distributions |
(23,090) |
(5,823) |
(28,913) |
|||||
|
Net Income (Loss) |
(8,995) |
4,632 |
(4,363) |
|||||
|
----------- |
------------- |
------------ |
||||||
|
Balance at end of period |
$ |
946,544 |
1,855 |
$ |
948,399 |
|||
|
|
======= |
======= |
======= |
|||||
|
Nine Months Ended September 30, 1999 |
|
Limited Partners |
General Partners |
Total |
||||||
|
Balance at beginning of period |
$ |
1,033,627 |
1,845 |
$ |
1,035,472 |
|||
|
Partner's Contribution |
0 |
1,501 |
1,501 |
|||||
|
Cash Distributions |
(23,090) |
(5,817) |
(28,907) |
|||||
|
Net Income |
(32,997) |
(1,716) |
(34,713) |
|||||
|
------------- |
-------------- |
------------ |
||||||
|
Balance at end of period |
$ |
977,540 |
(4,187) |
$ |
973,353 |
|||
|
|
======== |
======== |
======= |
|||||
See accompanying note to financial statements.
<page> 11
STERLING DRILLING FUND 1984-1
(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 |
$ |
947,267 |
(2,234) |
$ |
945,033 |
|||
|
Partner's Contribution |
0 |
1,859 |
1,859 |
|||||
|
Net Income (Loss) |
(723) |
2,230 |
1,507 |
|||||
|
-------- |
-------- |
---------- |
||||||
|
Balance at end of period |
$ |
946,544 |
1,855 |
$ |
948,399 |
|||
|
======= |
======= |
========= |
||||||
|
Three Months Ended September 30, 1999 |
|
Limited Partners |
General Partners |
Total |
||||||
|
Balance at beginning of period |
$ |
974,388 |
(8,064) |
$ |
966,324 |
|||
|
Partner's Contribution |
0 |
655 |
655 |
|||||
|
Net Income |
3,152 |
3,222 |
6,374 |
|||||
|
------------ |
------------ |
-------------- |
||||||
|
Balance at end of period |
$ |
977,540 |
(4,187) |
$ |
973,353 |
|||
|
======== |
======== |
========= |
||||||
See accompanying note to financial statements.
<page> 12
STERLING DRILLING FUND 1984-1
(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 |
$ |
50,167 |
$ |
19,717 |
|
|
------------ |
----------- |
||||
|
Cash flows from financing activities: |
|||||
|
Partner's contributions |
3,576 |
1,501 |
|||
|
Distribution to partners |
(28,913) |
(28,907) |
|||
|
------------ |
------------ |
||||
|
Net cash (used in) financing activities |
(25,337) |
(27,406) |
|||
|
------------ |
------------ |
||||
|
Cash flows from investing activities: |
|||||
|
Investments in wells and well related facilities |
(49,259) |
0 |
|||
|
------------ |
------------ |
||||
|
Net cash (used by) investing activities |
(49,259) |
0 |
|||
|
----------- |
----------- |
||||
|
Net increase(decrease) in cash and cash equivalents |
(24,429) |
(7,689) |
|||
|
Cash and cash equivalents at beginning of period |
41,313 |
43,948 |
|||
|
------------ |
----------- |
||||
|
Cash and cash equivalents at end of period |
$ |
16,884 |
$ |
36,259 |
|
|
======= |
====== |
||||
See accompanying note to financial statements.
<page> 13
STERLING DRILLING FUND 1984-1
(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.
|
|