<PAGE>   1
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-K
(Mark One)

[X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                                       OR

[X]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     FOR THE TRANSITION PERIOD FROM      TO

                           COMMISSION FILE NO. 2-78441

                         STERLING GAS DRILLING FUND 1982
             (Exact name of registrant as specified in its charter)

                 NEW YORK                                        13-3147901
     (State or other jurisdiction of                          (I.R.S. Employer
      incorporation or organization)                         Identification No.)

           ONE LANDMARK SQUARE                                      06901
          STAMFORD, CONNECTICUT                                  (Zip Code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (203) 358-5700

           Securities registered pursuant to Section 12(b) of the Act:
                                      NONE

           Securities registered pursuant to Section 12(g) of the Act:
                     UNITS OF LIMITED PARTNERSHIP INTERESTS
                                (Title of Class)

         Indicate by check mark whether 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 [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         The Registrant has no voting stock. There is no market for the Units
and therefore no market value of the Units is reported.

         The number of Units of the Registrant outstanding as of March 15, 2001,
was: 14,370.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

--------------------------------------------------------------------------------

<PAGE>   2

                         STERLING GAS DRILLING FUND 1982

                             FORM 10-K ANNUAL REPORT
                            FOR THE FISCAL YEAR ENDED
                                DECEMBER 31, 2000

                                     PART I

ITEM 1.  BUSINESS

         Sterling Gas Drilling Fund 1982 (the "Registrant" or the "Partnership")
is a limited partnership formed under the laws of the State of New York on July
28, 1982. The sole business of the Partnership was the drilling of formation
extension wells principally for natural gas in various locations in the State of
West Virginia. No exploratory drilling was undertaken.

         The principal place of business of the Partnership is at One Landmark
Square, Stamford, Connecticut 06901, telephone (203) 358-5700. The Managing
General Partner of the Partnership is PrimeEnergy Management Corporation, a New
York corporation, which is a wholly owned subsidiary of PrimeEnergy Corporation,
a publicly held Delaware corporation. Messrs. Charles E. Drimal, Jr., Oliver J.
Sterling and Samuel R. Campbell also are General Partners. Mr. Drimal is a
Director, President and Chief Executive Officer of PrimeEnergy Management
Corporation and PrimeEnergy Corporation, and Mr. Campbell is a Director of
PrimeEnergy Corporation.

         The aggregate contributions to the Partnership were $14,370,000, all of
which, net of the organization expenses of the Partnership, was expended in the
drilling of such formation extension wells. Such properties are located in Clay,
Roane, Calhoun, Wirt, Kanawha, Lincoln and Putnam Counties, West Virginia. The
Partnership does not operate any of the properties in which it has an interest,
but generally such properties are operated and serviced by Prime Operating
Company, a Texas corporation, and Eastern Oil Well Service Company, a West
Virginia corporation, both wholly-owned subsidiaries of PrimeEnergy Corporation.

         During 2000, the Partnership did not engage in any development drilling
activities or the acquisition of any significant additional properties, but
engaged in the production of oil and gas from its producing properties in the
usual and customary course. Since January 1, 2001, and to the date of this
Report, the Partnership has not engaged in any drilling activities nor
participated in the acquisition of any material producing oil and gas
properties.

         During 2000, PrimeEnergy Management negotiated a Farmout Agreement with
Columbia Natural Resources, Inc. (CNR) covering leasehold interests in
approximately 5,000 acres in Clay County, West Virginia. Acreage held by
Sterling Gas Drilling Fund 1982 Limited Partnership has been included in the
Farmout Agreement. Pursuant to this agreement, CNR has the right but not the
obligation to select acreage and drill a deep well on the selected acreage,
subject to an overriding royalty interest due to the leasehold owners. This
agreement terminates in April 2001. At this time it is unlikely that CNR will
exercise their rights to select acreage and drill a well. If CNR does not
exercise their rights under this agreement PrimeEnergy will attempt to find
other parties interested in this acreage, however there is no guarantee that a
new agreement will be made.

<PAGE>   3

COMPETITION AND MARKETS

         Competitors of the Partnership in the marketing of its oil and gas
production include oil and gas companies, independent concerns, and individual
producers and operators, many of which have financial resources, staffs and
facilities substantially greater than those available to the Partnership.
Furthermore, domestic producers of oil and gas must not only compete with each
other in marketing their output, but must also compete with producers of
imported oil and gas and alternative energy sources such as coal, nuclear power
and hydro-electric power.

         The availability of a ready market for any oil and gas produced by the
Partnership at acceptable prices per unit of production will depend upon
numerous factors beyond the control of the Partnership, including the extent of
domestic production and importation of oil and gas, the proximity of the
Partnership's producing properties to gas pipelines and the availability and
capacity of such pipelines, the marketing of other competitive fuels,
fluctuation in demand, governmental regulation of production, refining,
transportation and sales, general national and worldwide economic conditions,
and pricing, use and allocation of oil and gas and their substitute fuels.

         The Partnership does not currently own or lease any bulk storage
facilities or pipelines, other than adjacent to and used in connection with
producing wells. The Partnership deals with a number of major and independent
companies for the purchase of its oil and gas production, in the areas of
production. Sales are made under short-term contractual arrangements or monthly
spot prices. In 2000, approximately $251,149 or 82.94% and $34,214 or 11.30% of
the Partnership's gas production was purchased by Phoenix Diversified and Cabot
O & G, respectively, and about $32,066, or 100%, of the Partnership's oil
production was purchased by the American Refining Group. None of these
purchasers has any relationship or is otherwise affiliated with the Partnership.
The Partnership believes that its current purchasers will continue to purchase
oil and gas products and, if not, could be replaced by other purchasers.

ENVIRONMENTAL MATTERS

         The petroleum industry is subject to numerous federal and state
environmental statutes, regulations and other pollution controls. In general,
the Partnership is, and will be subject to, present and future environmental
statutes and regulations, and in the future the cost of its activities may
materially increase as a result thereof. The Partnership's expenses relating to
preserving the environment during 2000 as they relate to its oil and gas
operations were not significant in relation to operating costs and the
Partnership expects no material change in the near future. The Partnership
believes that environmental regulations should not, in the future, result in a
curtailment of production or otherwise have a materially adverse effect on the
Partnership's operations or financial condition.

REGULATION

         The Partnership's oil and gas operations are subject to a wide variety
of federal, state and local regulations. Administrative agencies in such
jurisdictions may promulgate and enforce rules and regulations relating to,
among other things, drilling and spacing of oil and gas wells, production rates,
prevention of waste, conservation of natural gas and oil, pollution control, and
various other matters, all of which may affect the Partnership's future
operations and production of oil and gas. The Partnership's natural gas
production and prices received for natural gas are regulated by the Federal
Energy Regulatory Commission ("FERC") and the Natural Gas Policy Act of 1978 and

<PAGE>   4

various state regulations. The Partnership is also subject to state drilling and
proration regulations affecting its drilling operations and production rates.

     The FERC continues to regulate interstate natural gas pipeline
transportation rates and service conditions pursuant to the NGA and NGPA.
Federal regulation of interstate transporter's affects the marketing of natural
gas produced by the Partnership as well as the revenues received by the
Partnership for sales of such natural gas. Since the latter part of 1985,
through its Order Nos. 436, 500 and 636 rulemakings, the FERC has endeavored to
make natural gas transportation accessible to gas buyers and sellers on an open
and non-discriminatory basis. The FERC's efforts have significantly altered the
marketing and pricing of natural gas. No prediction can be made as to what
additional legislation may be proposed, if any, affecting the competitive status
of a gas producer, restricting the prices at which a producer may sell its gas,
or the market demand for gas, nor can it be predicted which proposals, including
those presently under consideration, if enacted, might be effective.

         Additional proposals and proceedings that might affect the natural gas
industry are considered from time to time by Congress, the FERC, state
regulatory bodies and the courts. The Partnership cannot predict when or if any
such proposals might become effective, or their effect, if any, on the
Partnership's operations. The Partnership believes that it will comply with all
orders and regulation changes applicable to its operations. However, in view of
the many uncertainties with respect to the current controls, including their
duration and possible modification together with any new proposals that may be
enacted, the Partnership cannot predict the overall effect, if any, of such
controls on its operations.


TAXATION

         The Partnership received an opinion of its counsel that the Partnership
would be classified as a partnership and the holders of Partnership Units would
be treated as limited partners for federal income tax purposes. The Partnership
itself, to the extent that it is treated for federal income tax purposes as a
partnership, is not subject to any federal income taxation, but it is required
to file annual partnership returns. Each holder of Partnership Units will be
allocated his distributive shares of the Partnership's income, gain, profit,
loss, deductions, credits, tax preference items and distributions for any
taxable year of the Partnership ending within or with his taxable year without
regard as to whether such holder has received or will receive any cash
distributions from the Partnership.


ITEM 2.  PROPERTIES

         The Partnership has no interest in any properties other than its oil
and gas properties. The information set forth below summarizes the Partnership's
oil and gas wells, production and reserves, for the periods indicated.


<PAGE>   5


PRODUCING WELLS AND OPERATING INFORMATION

         The Partnership, following its formation, and in December, 1982,
contracted for the drilling of 51 development wells, which resulted in 50
producing wells and one dry hole.

         As of December 31, 2000, the Partnership had ownership interests in the
following gross and net producing oil and gas wells and gross and net producing
acres.(1) The Partnership has no material undeveloped leasehold, mineral or
royalty acreage.

         Producing wells:

<TABLE>
<CAPTION>
                                                     Gross               Net
                                                     -----               ---
<S>                                                  <C>                <C>

                  Oil Wells...................           0               0.00
                  Gas Wells...................          59              48.05

                  Producing acres.............       3,014              2,455
</TABLE>

(1)      A gross well is a well in which an interest is owned; a net well is the
         sum of the interests owned in gross wells. Wells are classified by
         their primary product. Some wells produce both oil and gas.

         The following table sets forth the Partnership's oil & gas production,
average sales price and average production costs as of and for the periods
indicated:


<TABLE>
<CAPTION>

                                                                    YEAR ENDED DECEMBER 31,
                                           --------------------------------------------------------------------
                                            2000           1999          1998           1997             1996
                                           ------         ------        -------        -------          -------
<S>                                        <C>            <C>           <C>            <C>              <C>
    Production
    Oil and Condensate (bbl)                1,174          1,226           982           2,089            1,783
    Gas (Mcf)                              85,689         88,511        99,089         100,271          100,564
    Average Price of Sales:
    Oil and Condensate ($ per bbl)         $27.32         $14.81        $11.69         $ 18.73          $ 19.52
    Gas ($ per Mcf)                        $ 3.53         $ 2.53        $ 3.14         $  3.17          $  2.47
    Production Expense per Dollar
    Of Operating Revenue                   $ 0.44         $ 0.51        $ 0.48         $  0.54          $  0.38
</TABLE>

<PAGE>   6

OIL AND GAS RESERVES

         The Ryder Scott Company, L.P. has evaluated the Partnership's interests
in proved developed oil and gas properties for the periods indicated below. All
of the Partnership's reserves are located in the continental United States. The
following table summarizes the Partnership's oil and gas reserves at the dates
shown (figures rounded):



<TABLE>
<CAPTION>
                                           Proved Developed
                                   --------------------------------
                                   Oil (bbls)             Gas (Mcf)
                                   ----------             ---------
<S>                                <C>                    <C>
        1996                         15,700               1,868,000
        1997                         17,600               1,869,700
        1998                         14,900               1,846,400
        1999                         12,800               1,506,850
        2000                         15,800               1,645,850
</TABLE>


         The estimated future net revenue using current prices and costs as of
the dates indicated, exclusive of income taxes (at a 10% discount for estimated
timing of cash flow) for the Partnership's proved developed oil and gas reserves
for the periods indicated are summarized as follows (figures rounded):


<TABLE>
<CAPTION>

                                                      Proved Developed
                                          ----------------------------------------
                        As of               Future Net     Present Value of Future
                        12-31                Revenue             Net Revenue
                        -----             ------------     -----------------------
<S>                                       <C>              <C>

                        1996              $ 2,438,900            $  928,400
                        1997                2,447,600               904,800
                        1998                2,215,200               768,500
                        1999                2,256,800               936,700
                        2000               11,363,600             4,363,700
</TABLE>

         The estimated reserve quantities and future income quantities are
related to hydrocarbon prices. Therefore, volumes of reserves actually recovered
and amounts of income actually received may differ significantly from the
estimated quantities presented in this report.

         In accordance with FASB Statement No. 69, December 31, 2000 market
prices were determined using the daily oil price or daily gas sales price ("spot
price") adjusted for oilfield or gas gathering hub and wellhead price
differentials (e.g. grade, transportation, gravity, sulfur, and BS&W) as
appropriate. Also, in accordance with SEC and FASB specifications, changes in
market prices subsequent to December 31, 2000 were not considered. The spot
price for gas at December 31, 2000 was $9.23 per MMBTU. The range of spot prices
during the year 2000 was a low of $2.14 and a high of $10.50 and the average was
$4.28. The range during the first quarter of 2001 has been from $4.67 to $10.69
with an average of $6.42. The recent futures market prices have been in the
$5.00 range. While it may reasonably be anticipated that the prices received by
Sterling Gas Drilling Fund 1982 for the sale of its production may be higher or
lower than the prices used in this evaluation, as described above, and the
operating costs relating to such production may also increase or decrease from
existing levels, such possible changes in prices and costs were, in accordance
with rules

<PAGE>   7

adopted by the SEC, omitted from consideration in making this evaluation for the
SEC case. Actual volumes produced, prices received and costs incurred by the
partnership may vary significantly from the SEC case

         Since January 1, 2000, the Partnership has not filed any estimates of
its oil and gas reserves with, nor were any such estimates included in any
reports, to any federal authority or agency, other than the Securities and
Exchange Commission.

ITEM 3.  LEGAL PROCEEDINGS

         The Partnership is not a party to, nor is any of its property the
subject of, any legal proceedings actual or threatened, which would have a
material adverse effect on the business and affairs of the Partnership.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters submitted during 2000 for vote by the holders of
Partnership Units.


                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

         There is no market for the Limited Partnership Units (the "Units") of
the Partnership. As of March 15, 2001, there were 897 holders of record of the
Units.

         The Units are not regarded as stock and payments or distributions to
holders of Units are not made in the form of dividends. There were no
distributions to the holders of Units in 2000 or 1999. Aggregate cash
distributions to the holders of the Units as of December 31, 2000, was
$1,402,512.

         The Managing General Partner may purchase Units directly from the unit
holders if presented to the Managing General Partner, subject to conditions,
including limitations on numbers of Units, and at a price to be fixed by the
Managing General Partner in accordance with certain procedures, all as provided
for in the Limited Partnership Agreement of the Partnership.



ITEM 6.  SELECTED FINANCIAL DATA

         The information required hereunder is set forth under "Selected
Financial Data" in the Financial Information section included in this Report.
The index to the Financial Information section is at page F-1.


<PAGE>   8


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The information required hereunder is set forth under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Financial Information section included in this Report. The index to the
Financial Information section is at page F-1.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Registrant is a "small business issuer" as defined in the Securities
and Exchange Act Rule 12b-2 and no information is required to be provided by
this Item 7A.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information required hereunder is set forth under "Report of
Independent Public Accountants," "Balance Sheets," "Statements of Operations,"
"Statements of Changes in Partners' Equity," "Statements of Cash Flows" and
"Notes to Financial Statements" in the Financial Information section included in
this Report. The index to the Financial Information section is at page F-1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         There was no disagreement between the Partnership and its certified
public accountants on any matter of accounting principles or practices or
financial statement disclosure.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The Managing General Partner of the Partnership is PrimeEnergy
Management Corporation, a New York corporation ("Management"). The principal
business of Management is the management of the Partnership and other publicly
and privately held exploration and development limited partnerships and joint
ventures and publicly held asset and income fund limited partnerships. As of
March 15, 2001, Management acts as the Managing General Partner in a total of 47
limited partnerships and joint ventures, of which 5 are publicly held, and is
the Managing Trustee of 2 Delaware Business Trusts. The primary activity of such
Partnerships, joint ventures and trusts is the production of oil and gas and
Management, as the Managing General Partner of the Partnership, will devote such
of its time as it believes necessary in the conduct and management of the
business and affairs of the Partnership. Management, and other of the General
Partners of the Partnership, are engaged in and intend to continue to engage in
the oil and gas business for their own accounts and for the accounts of others.

         Management, which provides all of the executive, management and
administrative functions of the Partnership, is a wholly owned subsidiary of
PrimeEnergy Corporation ("PrimeEnergy"), a publicly held Delaware corporation.
The principal offices of PrimeEnergy and Management are in Stamford,
Connecticut. The operating subsidiaries of PrimeEnergy, Prime Operating Company
and Eastern Oil Well Service Company maintain their principal offices in
Houston, Texas, with district offices in Midland, Texas, Oklahoma City,
Oklahoma, and Charleston, West Virginia. PrimeEnergy and its subsidiaries have
about 180 employees, including their principal officers, providing


<PAGE>   9

management and administrative services, accounting, engineers, geologists,
production engineers, land department personnel and field employees.

         Set forth below is information concerning the directors and executive
officers of Management and PrimeEnergy that are involved with the conduct of the
business and operations of the Partnership.

         Charles E. Drimal, Jr., age 53, is a Director and President of
Management and has held those positions since May 1983. He is also a Director
and President of Prime Energy and the operating subsidiaries. He graduated from
the University of Maryland in 1970 and from Samford University School of Law in
1973 and is a member of the New York State Bar.

         Beverly A. Cummings, age 48, has been a Director, Executive Vice
President and Treasurer of Management since August 1985. She is also a Director
and Executive Vice President and Treasurer of PrimeEnergy and the operating
subsidiaries. Ms. Cummings is a Certified Public Accountant and holds a Bachelor
of Science degree from the State University of New York and a Master in Business
Administration from Rutgers University.

         Lynne G. Pizor, age 41, has been Controller of Prime Operating Company
since January 1992, and Eastern Oil Well Service Company since September 1990.
She also held that position with Management from January 1986, through August
1994 and Prime Energy from May 1990, through August 1994. She joined Management
in October 1984, as Manager of Partnership Accounting. She is a graduate of
Wagner College with a Bachelor of Science degree in Economics and Business
Administration and is a Certified Public Accountant.

         James F. Gilbert, age 68, has been Secretary of Management since June
1990, and has been Secretary of PrimeEnergy since March 1973, and was a Director
of PrimeEnergy from that date to October 1987. He also serves as Secretary of
the operating subsidiaries. He is an attorney in Dallas, Texas.

ITEM 11. EXECUTIVE COMPENSATION

         The Partnership has no officers, directors or employees. The officers
and employees of the Managing General Partner and PrimeEnergy perform all
management and operational functions of the Partnership. The Partnership does
not pay any direct salaries or other remuneration to the officers, directors or
employees of the Managing General Partner or PrimeEnergy. The Managing General
Partner is reimbursed for the general and administrative expenses of the
Partnership which are allocated to the Partnership for expenses incurred on
behalf of the Partnership, together with administrative work by third parties
limited annually to 5% of the aggregate capital contribution of the holders of
the Partnership Units. During 2000 and 1999, the allocation of general and
administrative expenses to the Partnership was $85,000 for both years.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The Partnership does not know of any person, entity or group, other
than the Managing General Partner and PrimeEnergy Corporation that beneficially
owns more than five percent of the Partnership Units. The following table shows
as of March 15, 2001, the name and address of such

<PAGE>   10

beneficial owners, and the number and percent of Partnership Units beneficially
owned by them, all of which are owned directly.

<TABLE>
<CAPTION>
                                                                         Number
         Name and Address of Beneficial Owner                           Of Units             Percent
         ------------------------------------                           --------             -------
<S>                                                                     <C>                  <C>

         PrimeEnergy Management Corporation
           One Landmark Square
           Stamford, CT 06901 ..........................................  1,249                8.60%

         PrimeEnergy Corporation
           One Landmark Square
           Stamford, CT 06901 ..........................................  2,770               19.27%
</TABLE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Prime Operating Company acts as the operator for most of the producing
oil and gas wells of the Partnership pursuant to operating agreements with the
Partnership and other working interest owners, including other partnerships
managed by the Managing General Partner, and in 2000 was paid well operating
fees ranging from about $493 to $ 890 per month per well. Together with well
operating supplies and equipment and related servicing operations are generally
provided by Eastern Oil Well Service Company. The Partnership pays its
proportionate part of such operating fees and expenses. Such fees and expenses
vary depending on such matters as the location of the well, the complexity of
the producing equipment, whether wells produce oil or gas or both and similar
factors. The Partnership believes that such services are as favorable to the
Partnership as they would be if the Partnership entered into such transactions
with unaffiliated third parties. In 2000 and 1999, the Partnership paid an
aggregate of $98,374 and $76,356, respectively, in such fees and expenses.


<PAGE>   11


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K


         ((a)   The following documents are filed as a part of this Report:

                1. Financial Statements (Index to the Financial Information at
                   page F-1)

                2. Financial Statement Schedules:
                   Schedule V Property and Equipment - Oil and Gas Properties
                   Schedule VI Accumulated Depreciation, Depletion and
                   Amortization - Oil and Gas Properties

                3. Exhibits:

                   (3)  Form of Agreement of Limited Partnership of Sterling
                        Gas Drilling Fund 1981 (Incorporated by reference to
                        Exhibit (3) of Sterling Gas Drilling Fund 1981 Form
                        10-K for the year ended December 31, 1994.)

                   (23) Consent of Ryder Scott Company, L.P. (filed herewith)


         (b)    Reports on Form 8-K:

                No reports on Form 8-K have been filed during the last quarter
                of the year covered by this Report.


<PAGE>   12

                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 28th day of
March, 2001.


                                  Sterling Gas Drilling Fund 1982
                                  By: PrimeEnergy Management Corporation
                                  Managing General Partner


                                  By: /s/ Charles E. Drimal Jr.
                                      -------------------------
                                      Charles E. Drimal, Jr.
                                      President

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated and on the 28th day of March, 2001.



/s/ Charles E. Drimal Jr.             Director and President,
-------------------------------       PrimeEnergy Management Corporation
Charles E. Drimal, Jr.                The Principal Executive Officer


/s/ Beverly A. Cummings               Director, Executive Vice President and
-------------------------------       Treasurer, PrimeEnergy Management
Beverly A. Cummings                   Corporation; The Principal Financial and
                                      Accounting Officer



<PAGE>   13


                         STERLING GAS DRILLING FUND 1982
                        (A NEW YORK LIMITED PARTNERSHIP)

                   Index to Financial Statements and Schedules

<TABLE>
<CAPTION>
                                                                                                     Page No.
                                                                                                     --------
<S>                                                                                                  <C>

Selected Financial Data                                                                                 F-2

Management's Discussion and Analysis of Financial Condition
and Results of Operations                                                                               F-2

Report of Independent Public Accountants                                                                F-5

Financial Statements:

       Balance Sheets, December 31, 2000 and 1999                                                       F-6

       Statements of Operations for the Years Ended December 31,
       2000, 1999 and 1998                                                                              F-7

       Statements of Changes in Partners' Equity for the Years
       Ended December 31, 2000, 1999 and 1998                                                           F-8

       Statements of Cash Flows for the Years Ended December 31,
       2000, 1999 and 1998                                                                              F-9

       Notes to Financial Statements                                                                   F-10

Schedules:

       V    -  Property and Equipment - Oil and Gas Properties for
               the Years Ended December 31, 2000, 1999 and 1998                                        F-18

       VI   -  Accumulated Depreciation, Depletion, and Amortization -
               Oil and Gas Properties for the Years Ended December 31,
               2000, 1999 and 1998                                                                     F-19

</TABLE>

All other schedules have been omitted as the information required is either
included in the financial statements, related notes, or is not applicable.



                                      F-1
<PAGE>   14

ITEM 6.  SELECTED FINANCIAL DATA

         The following table summarizes certain selected financial data to
highlight significant trends in the Registrant's financial condition and results
of operations for the periods indicated. The selected financial data should be
read in conjunction with the financial statements and related notes included
elsewhere in this report.

<TABLE>
<CAPTION>

                                              YEAR ENDED DECEMBER 31, (000's omitted)
                                              ---------------------------------------
                                              2000    1999     1998     1997    1996
                                              -----   -----    -----    -----   -----
<S>                                           <C>     <C>      <C>      <C>     <C>
Revenues..........................           $ 373    $ 246   $ 323    $ 359    $ 283
Net income (loss):
   Limited Partners...............              69      (24)     14       13       15
   General Partners...............              19        2       9        9       10
   Per equity unit................            4.84    (1.63)   1.00     0.91     1.06
Total assets......................             619      651     689      726      754
Cash distributions:
   Limited Partners...............              --       --      --       --       --
   General Partners...............              --       --      --       --       --
   Limited partners as
   a % of original
   contribution...................              --       --      --       --       --
</TABLE>


ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF
        OPERATIONS

         1. Liquidity: The oil and gas industry is 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 December 31, 2000, the General Partners have distributed to the Limited
Partners $1,402,512 or 9.76% of the total Limited Partner capital contributions.

         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, 2000 was approximately
$4,363,671, as compared to December 31, 1999, of about $936,729. Overall
reservoir engineering is a subjective process of estimating underground
accumulations of gas and oil that can not be measure in an exact manner. The
estimated reserve quantities and future income quantities are related to
hydrocarbon prices. Therefore, volumes of reserves actually recovered and
amounts


                                      F-2
<PAGE>   15

of income actually received may differ significantly from the estimated
quantities presented in this report.

         In accordance with FASB Statement No. 69, December 31, 2000 market
prices were determined using the daily oil price or daily gas sales price ("spot
price") adjusted for oilfield or gas gathering hub and wellhead price
differentials (e.g. grade, transportation, gravity, sulfur, and BS&W) as
appropriate. Also, in accordance with SEC and FASB specifications, changes in
market prices subsequent to December 31, 2000 were not considered. The spot
price for gas at December 31, 2000 was $9.23 per MMBTU. The range of spot prices
during the year 2000 was a low of $2.14 and a high of $10.50 and the average was
$4.28. The range during the first quarter of 2001 has been from $4.67 to $10.69
with an average of $6.42. The recent futures market prices have been in the
$5.00 range. While it may reasonably be anticipated that the prices received by
Sterling Gas Drilling Fund 1982 for the sale of its production may be higher or
lower than the prices used in this evaluation, as described above, and the
operating costs relating to such production may also increase or decrease from
existing levels, such possible changes in prices and costs were, in accordance
with rules adopted by the SEC, omitted from consideration in making this
evaluation for the SEC case. Actual volumes produced, prices received and costs
incurred by the partnership may vary significantly from the SEC case

         2. Capital resources: The Partnership was formed for the sole intention
of drilling oil and gas wells. The Partnership entered into a drilling contract
with an independent drilling contractor in December, 1982 for $11,400,000.
Pursuant to the terms of this contract, fifty-one wells have been drilled
resulting in fifty producing wells and one dry-hole. The Partnership has had a
reserve report prepared which details reserve value information, and such
information is available to the Limited Partners pursuant to the buy-out
provision of the Agreement of Limited Partnership of the Partnership.

         3.  Results of operations:

         2000 compared to 1999

         The Partnership's overall operating revenue increased from $246,405 in
1999 to $ 373,290 in 2000. The Partnership receives the majority of its revenue
from gas production combined with some oil production. During 2000, the
Partnership's oil production was stable and average price per barrel was
significantly higher than the previous year, from 1,226 barrels and $14.81 in
1999 to 1,174 barrels and $27.32 in 2000. The main contributing factor to the
overall revenue increase was a higher average price per MCF, $2.53 in 1999 to
$3.53 in 2000. The Partnership was not adversely affected by lower gas
production than in the previous year, from 88,511 MCF in 1999 to 85,689 MCF in
2000. The Partnership also received $38,424 in revenue from a one time
settlement of a class action lawsuit in which the Partnership participated.
Production declines can be of a normal nature, a result of minor shut-ins due to
repairs or even as a result of variations in pressure flows between the wells
gas lines and the main transport line.

         Production expenses increased from $122,394 in 1999 to $147,353 in
2000. During 2000 and 1999, the production related expenditures included
repairs, maintenance, labor, supplies and other normal upkeep expenses. Some
lease operating expenses vary with the amount of production sold. The variable
costs expended in both 2000 and 1999 were reasonable based upon each years
production. General and administrative costs remained relatively unchanged from
$107,109 in 1999


                                      F-3
<PAGE>   16

to $105,407 in 2000. Management will use in-house resources if it provides
efficient and timely services to the partnership. Amounts in both years are
substantially less than the $ 718,500 allowed to be allocated to the Partnership
under the Partnership Agreement. The lower allocable amounts reflect
management's efforts to limit costs, both incurred and allocated to the
Partnership.

         The Partnership records additional depreciation, depletion and
amortization to the extent that the net capitalized costs exceed the
undiscounted future net cash flows attributable to the partnership. No
additional depletion deduction was needed in 2000 or 1999. The overall
depreciation, depletion and amortization was consistent with the rates used and
the existing property basis.

         1999 compared to 1998

         The Partnership's overall operating revenue declined from $322,770 in
1998 to $246,405 in 1999. The Partnership receives the majority of its revenue
from gas production combined with some oil production. During 1999 both the
Partnership's oil production and average price per barrel were higher than the
previous year, from 982 bbls and $11.69 in 1998 to 1,226 bbls and $14.81 in
1999. The main contributing factor to the overall revenue decline was lower gas
production, from 99,089 mcf in 1998 to 88,511 mcf in 1999 and a significantly
lower average price per mcf, $3.14 in 1998 to $2.53 in 1999. Production declines
can be of a normal nature, a result of minor shut-ins due to repairs or even as
a result of variations in pressure flows between the wells gas lines and the
main transport line.

         Production expenses showed a decrease from $156,536 in 1998 to $122,394
in 1999. During 1999 and 1998, the production related expenditures included
repairs, maintenance, labor, supplies and other normal upkeep expenses. Some
lease operating expenses vary with the amount of production sold. The variable
costs expended in both 1999 and 1998 were reasonable based upon each years
production. General and administrative costs remained relatively unchanged from
$106,143 in 1998 to $107,109 in 1999. Management will use in-house resources if
it provides efficient and timely services to the partnership. Amounts in both
years are substantially less than the $718,500 allowed to be allocated to the
Partnership under the Partnership Agreement. The lower allocable amounts reflect
management's efforts to limit costs, both incurred and allocated to the
Partnership.

         The Partnership records additional depreciation, depletion and
amortization to the extent that the net capitalized costs exceed the
undiscounted future net cash flows attributable to the partnership. No
additional depletion deduction was needed in 1999 or 1998. The overall
depreciation, depletion and amortization was consistent with the rates used and
the existing property basis.


                                      F-4
<PAGE>   17

                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)





                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Partners of
Sterling Gas Drilling Fund 1982:


We have audited the accompanying balance sheets of Sterling Gas Drilling Fund
1982 (a New York limited partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity, and cash flows
for the years ended December 31, 2000, 1999 and 1998. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sterling Gas Drilling Fund 1982
as of December 31, 2000 and 1999, and the results of its operations and cash
flows for the years ended December 31, 2000, 1999 and 1998 in conformity with
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index to
financial statements and schedules are presented for purposes of complying with
the Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the examination of the basic financial statements and, in
our opinion, fairly state in all material respects the financial data required
to be set forth therein in relation to the basic financial statements taken as a
whole.



PUSTORINO, PUGLISI & CO., LLP
New York, New York
March 1, 2001


                                      F-5
<PAGE>   18

                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                                 BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                        Assets

                                                                                     2000                   1999
                                                                                 ------------           ------------
<S>                                                                              <C>                    <C>

Current Assets:
  Cash and cash equivalents (Note 2)                                             $          3           $          4
                                                                                 ------------           ------------
     Total Current Assets                                                                   3                      4
                                                                                 ------------           ------------

Oil and Gas Properties - successful efforts methods (Note 3) -
 (Schedules V and VI):
  Leasehold costs                                                                     466,804                466,804
  Wells and related facilities                                                     11,970,091             11,970,091
                                                                                 ------------           ------------
      Total                                                                        12,436,895             12,436,895
  Less - Accumulated depreciation, depletion
          and amortization                                                        (11,817,963)           (11,785,739)
                                                                                 ------------           ------------
                                                                                      618,932                651,156
                                                                                 ------------           ------------

     Total Assets                                                                $    618,935           $    651,160
                                                                                 ============           ============

                                            Liabilities and Partners' Equity

Current Liabilities:
  Due to affiliates (Note 6)                                                     $    124,619           $    245,150
                                                                                 ------------           ------------
     Total Current Liabilities                                                        124,619                245,150
                                                                                 ------------           ------------

Partners' Equity:
  Limited partners                                                                    745,531                676,005
  General partners                                                                   (251,215)              (269,995)
                                                                                 ------------           ------------
     Total Partners' Equity                                                           494,316                406,010
                                                                                 ------------           ------------

     Total Liabilities and Partners' Equity                                      $    618,935           $    651,160
                                                                                 ============           ============
</TABLE>



   The Notes to Financial Statements are an integral part of these statements.


                                      F-6
<PAGE>   19


                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                            STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998



<TABLE>
<CAPTION>
                                       2000                              1999                               1998
                         --------------------------------  --------------------------------   -------------------------------
                         Limited     General               Limited     General                Limited     General
                         Partners    Partners     Total    Partners    Partners    Total      Partners    Partners    Total
                         ---------  ---------   ---------  ---------   ---------  ---------   ---------  ---------  ---------
<S>                      <C>        <C>         <C>        <C>         <C>        <C>         <C>        <C>        <C>

Revenues:
  Operating revenues     $ 281,790  $  53,076   $ 334,866  $ 203,756   $  38,378  $ 242,134   $ 271,611  $  51,159  $ 322,770
  Other revenue
   (Note 10)                32,334      6,090      38,424      3,594         677      4,271          --         --         --
                         ---------  ---------   ---------  ---------   ---------  ---------   ---------  ---------  ---------

     Total Revenue         314,124     59,166     373,290    207,350      39,055    246,405     271,611     51,159    322,770
                         ---------  ---------   ---------  ---------   ---------  ---------   ---------  ---------  ---------

Costs and Expenses:
  Production expenses      123,997     23,356     147,353    102,995      19,399    122,394     131,725     24,811    156,536
  Depreciation,
   depletion and
   amortization             31,901        323      32,224     37,865         383     38,248      36,256        366     36,622
  General and
   administrative
   expenses (Note 7)        88,700     16,707     105,407     90,132      16,977    107,109      89,319     16,824    106,143
                         ---------  ---------   ---------  ---------   ---------  ---------   ---------  ---------  ---------

    Total Expenses         244,598     40,386     284,984    230,992      36,759    267,751     257,300     42,001    299,301
                         ---------  ---------   ---------  ---------   ---------  ---------   ---------  ---------  ---------

     Net Income (Loss)   $  69,526  $  18,780   $  88,306  $ (23,642)  $   2,296  $ (21,346)  $  14,311  $   9,158  $  23,469
                         =========  =========   =========  =========   =========  =========   =========  =========  =========

  Net Income (Loss) Per
   Equity Unit (Note 2)  $    4.84                         $   (1.65)                         $    1.00
                         =========                         =========                          =========

</TABLE>


   The Notes to Financial Statements are an integral part of these statements.


                                      F-7

<PAGE>   20

                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                    STATEMENTS OF CHANGES IN PARTNERS' EQUITY

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                            Limited                General
                                                            Partners               Partners               Total
                                                            --------               ---------             --------

<S>                                                         <C>                    <C>                   <C>
Balance at December 31, 1997                                $685,336               $(281,449)            $403,887
Net Income                                                    14,311                   9,158               23,469
                                                            --------               ---------             --------
Balance at December 31, 1998                                 699,647                (272,291)             427,356
Net Income                                                   (23,642)                  2,296              (21,346)
                                                            --------               ---------             --------
Balance at December 31, 1999                                 676,005                (269,995)             406,010
Net Income                                                    69,526                  18,780               88,306
                                                            --------               ---------             --------
Balance at December 31, 2000                                $745,531               $(251,215)            $494,316
                                                            ========               =========             ========
</TABLE>


   The Notes to Financial Statements are an integral part of these statements.


                                      F-8
<PAGE>   21


                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                            STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                        2000              1999               1998
                                                                      --------          --------           --------
<S>                                                                   <C>               <C>                <C>
Cash Flows From Operating Activities:
 Net income (loss)                                                  $   88,306          $(21,346)          $ 23,469
 Adjustments to reconcile net income
  (loss) to net cash provided by
  operating activities:
   Depreciation, depletion and
    Amortization                                                        32,224            38,248             36,622
   Changes in Assets and Liabilities:
    Due to affiliates                                                 (120,531)          (16,918)           (60,078)
                                                                    ----------          --------           --------
      Net Cash Provided (Used) by
       Operating Activities                                                 (1)              (16)                13
                                                                    ----------          --------           --------
Net increase (decrease) in cash and cash
 Equivalents                                                                (1)              (16)                13
Cash and cash equivalents, beginning of
 Year                                                                        4                20                  7
                                                                    ----------          --------           --------
Cash and cash equivalents, end of year                              $        3          $      4           $     20
                                                                    ==========          ========           ========
</TABLE>



   The Notes to Financial Statements are an integral part of these statements.


                                      F-9
<PAGE>   22

                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


(1)      Organization and Capital Contributions:

         Sterling Gas Drilling Fund 1982, a New York limited partnership (the
         "Partnership"),was formed on July 28, 1982 for the primary purpose of
         acquiring, drilling, developing, operating and producing oil and gas in
         the state of West Virginia. The general partners are: PrimeEnergy
         Management Corporation (PEMC), a wholly owned subsidiary of PrimeEnergy
         Corporation (PEC), formerly known as K.R.M. Petroleum Corporation
         (KRM), Charles E. Drimal, Jr., Oliver J. Sterling and Samuel R.
         Campbell. Fourteen thousand three hundred seventy limited partnership
         units, (14,370), were sold at $1,000 per unit aggregating $14,370,000
         in total limited partner capital contributions. The general partners'
         made no capital contributions. Partnership operations commenced on
         December 22, 1982.


(2)      Summary of Significant Accounting Policies:

         Revenue Recognition:

         The Partnership recognizes operating revenues, consisting of sales of
         oil and gas production, in the month of sale. Uncollected revenue is
         accrued based on known facts and trends of the relevant oil and gas
         properties on a monthly basis.

         Basis of Accounting:

         The accounts of the Partnership are maintained in accordance with
         accounting practices permitted for federal income tax reporting
         purposes. Under this method of accounting, (a) substantially all
         exploration and development costs except leasehold and equipment costs
         are expensed as paid, (b) costs of abandoned leases and equipment are
         expensed when abandoned, and (c) depreciation (for equipment placed in
         service) is provided on an accelerated basis. In order to present the
         accompanying financial statements in accordance with generally accepted
         accounting principles, memorandum adjustments have been made to account
         for oil and gas properties, as discussed below.

         Oil and Gas Producing Activities:

         The Partnership accounts for its oil and gas operations using the
         successful efforts method of accounting on a property by property
         basis. The Partnership only participates in developmental drilling.
         Accordingly, all costs of drilling and equipping these wells, together
         with leasehold acquisition costs, are capitalized. These capitalized
         costs are amortized on a property by property basis



                                      F-10
<PAGE>   23


                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


(2)      Summary of Significant Accounting Policies - (Cont'd):

         (utilizing aggregations of common geological structures) by the
         unit-of-production method based upon the ratio of production to proved
         developed oil and gas reserves. Additional depreciation, depletion and
         amortization may be recorded if net capitalized costs exceed the
         undiscounted future net cash flows attributable to Partnership
         properties. (See Note 4)

         Federal Income Taxes:

         As federal income taxes are the liability of the individual partners,
         the accompanying financial statements do not include any provision for
         federal income taxes. (See Note 8)

         Limited Partners' Income (Loss) Per Equity Unit:

         The limited partners' income (loss) per equity unit is computed on the
         14,370 limited partner equity units.

         Cash and Cash Equivalents:

         For purposes of the statements of cash flows the Partnership considers
         all highly liquid debt instruments with a maturity of three months or
         less to be cash equivalents.

         Use of Estimates:

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenue
         and expenses during the reporting period. Actual results could differ
         from those estimates.



                                      F-11
<PAGE>   24


                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


(3)      Oil and Gas Properties:

         The Partnership acquired leases or farmouts from PEMC at its cost. Cost
         is defined as any amount paid for delay rentals, lease bonuses, if any,
         surveys and other expenses including such portion of any of the general
         partners', or their affiliates' reasonable, necessary and actual
         expenses for geological, geophysical, seismic, land, engineering,
         drafting, accounting, legal and other services. During 1982, the
         Partnership, as reimbursement of costs for leases it acquired from
         PEMC, paid PEMC $466,804. The Partnership currently pays royalties of
         approximately 12.5% to 19.8% of the selling price of the gas and oil
         extracted.

         The following table sets forth certain revenue and expense data
         concerning the Partnership's oil and gas activities for the years ended
         December 31, 2000, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                        2000          1999           1998
                                                                       ------        ------         ------
<S>                                                                    <C>           <C>            <C>

              Average sales price per MCF of gas                       $ 3.53        $ 2.53         $ 3.17
              Average sales price per BBL of
               oil and other liquids                                   $27.32        $14.81         $11.72
              Production expense per dollar of
               operating revenue                                       $ 0.44        $ 0.51         $ 0.48
</TABLE>

(4)      Quantities of Oil and Gas Reserves:

         The amount of proved developed reserves presented below has been
         estimated by an independent firm of petroleum engineers as of January
         1, 2001. Petroleum engineers on the staff of PEC have reviewed the data
         presented below, as of December 31, 2000, for consistency with current
         year production and operating history. All of the Partnership's gas and
         oil reserves are located within the United States:

<TABLE>
<CAPTION>
                                                                                          (Unaudited)
                                                                                  ---------------------------
                                                                                  GAS (MCF)         OIL (BBL)
                                                                                  ---------         ---------
<S>                                                                               <C>               <C>

         Reserves as of December 31, 1997                                         1,869,745           17,600
         Revisions of previous estimates                                             74,716           (1,719)
         Production                                                                 (98,083)            (980)
                                                                                  ---------        ---------
         Reserves as of December 31, 1998                                         1,846,378           14,901
         Revisions of previous estimates                                           (251,382)            (886)
         Production                                                                 (88,511)          (1,226)
                                                                                  ---------        ---------
         Reserves as of December 31, 1999                                         1,506,852           12,789
         Revisions of previous estimates                                            224,684            4,191
         Production                                                                 (85,689)          (1,174)
                                                                                  ---------        ---------
         Reserves as of December 31, 2000                                         1,645,847           15,806
                                                                                  =========        =========
</TABLE>


                                      F-12
<PAGE>   25


                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



(4)      Quantities of Oil and Gas Reserves - (Cont'd):

         The revisions of previous estimates are primarily due to price changes
         that have occurred during the years. If future prices were to decline,
         operation of certain wells would become uneconomic, on a pretax basis,
         as production levels decline with age. In accordance with the rules and
         regulations of the Securities and Exchange Commission, proved reserves
         exclude production which would be uneconomic. The partners are entitled
         to certain tax benefits and credits which, if available in the future,
         may result in production continuing beyond that included above.

         Revisions arise from changes in current prices, as well as engineering
         and geological data which would alter the useful life and therefore the
         overall predicted production of each well. Future changes in these
         estimates are common and would impact the reserve quantities used to
         calculate depreciation, depletion, and amortization.

         As discussed in Note 2, the Partnership may record additional
         depreciation, depletion and amortization if net capitalized costs
         exceed the undiscounted future net cash flows attributable to
         Partnership properties. Significant price declines affect estimated
         future net revenues both directly and as a consequence of their impact
         on estimates of future production. The Partnership has recorded no
         additional provision in 2000, 1999 and 1998. If the additional
         provision had been computed based on the limited partners' interest in
         capitalized costs and estimated future net revenues, rather than on the
         basis of total Partnership interests, the limited partners income would
         not have been reduced in 2000, 1999 and 1998.



                                      F-13
<PAGE>   26


                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



(5)      Allocation of Partnership Revenues, Income, Costs and Expenses:

         Under the terms of the Limited Partnership Agreement, all Partnership
         income and expenditures, including deductions attributable thereto, are
         to be allocated as follows:

         Drilling and completion costs (paid out of initial capital
         contributions):
             Limited partners                                             99.00%
             General partners                                              1.00%
                                                                         -------
                                                                         100.00%
                                                                         =======

         Syndication costs sales commission and cost acquiring leases:
             Limited partners                                               -- %
             General partners                                            100.00%
                                                                         -------
                                                                         100.00%
                                                                         =======

         Offering costs up to $50,000 incurred by Dealer-Manager:
             Limited partners                                               -- %
             General partners                                            100.00%
                                                                         -------
                                                                         100.00%
                                                                         =======

         Offering costs other than $50,000 paid by the general partners
         (up to a maximum of $50,000):
             Limited partners                                             99.00%
             General partners                                              1.00%
                                                                         -------
                                                                         100.00%
                                                                         =======

         Net Revenue from oil and gas operations, general and
         administrative expenses and production operating fees:
             Limited partners                                             84.15%
             General partners                                             15.85%
                                                                         -------
                                                                         100.00%
                                                                         =======

         All other income, gains, losses, costs, expenses, deductions
         and credits:
             Limited partners                                             99.00%
             General partners                                              1.00%
                                                                         -------
                                                                         100.00%
                                                                         =======

                                      F-14
<PAGE>   27


                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


(6)      Transactions With Affiliates:

         (a)    The payable to affiliates at December 31, 2000 and 1999
                represents general and administrative and certain other expenses
                incurred on behalf of the Partnership by PEC and its
                subsidiaries, including amounts due for production operator's
                fees (Note 6(b)), and advances to finance the Partnerships' loan
                payments net of revenues collected on behalf of the Partnership.
                PEMC intends to continue to make advances to the Partnership to
                fund any working capital deficiencies in the future on an
                interest free basis.

         (b)    As operator of the Partnership's properties, Prime Operating
                Company (POC), a subsidiary of PEC, receives, as compensation
                from the Partnership, a monthly production operator's fee of
                $493 for each producing gas well and $890 for each producing oil
                or combination gas and oil well, based on the Partnership's
                percentage of working interest in the well. These fees are
                subject to annual adjustments by the percentage increase in the
                Cost of Living Index published by the U.S. Department of Labor
                over the year $92,043 $62,122 and $104,060 of production
                operator's fees were incurred, respectively.

         (c)    Eastern Oil Well Services Company (EOWSC), a subsidiary of PEC,
                provided field services to the Partnership during the years
                ending December 31, 2000, 1999 and 1998 for which it was billed
                $5,971, $14,234, and $1,456 respectively.


(7)      General and Administrative Expenses:

         In accordance with the Management Agreement, PEMC will be reimbursed
         for the portion of PEMC's in-house overhead, including salaries and
         related benefits, attributable to the affairs and operations of the
         Partnership.

         This amount combined with certain direct expenses for geology,
         engineering, legal, accounting, auditing, insurance and other items
         shall not exceed an annual amount equal to 5% of limited partner
         capital contributions. Excess shall be borne by the general partners in
         their individual capacity.

         During 2000, 1999 and 1998, the Partnership recognized general and
         administrative expenses incurred on its behalf by a general partner of
         $85,000, for each year.



                                      F-15

<PAGE>   28



                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


(8)      Federal Income Taxes:

         The following is a reconciliation between the net income as reported on
         the Partnership's federal income tax return and the net income (loss)
         reported in the accompanying financial statements:

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                             ----------------------------------------------
                                                               2000               1999               1998
                                                             --------           --------           --------
<S>                                                          <C>                <C>                <C>
         Net income as
          reported on the
          Partnership's federal
          income tax return                                  $115,424           $ 13,510           $ 54,460
         Depreciation, depletion and
          amortization for financial
          reporting purposes
          greater than income
          tax amount                                          (27,117)           (34,856)           (30,991)
                                                             --------           --------           --------
         Net income (loss) per
          accompanying financial
          statements                                         $ 88,307           $(21,346)          $ 23,469
                                                             ========           ========           ========

</TABLE>

         The tax returns of the Partnership, the qualifications of the
         Partnership as such for tax purposes, and the amount of Partnership
         income or loss are subject to examination by federal and state taxing
         authorities. If such examinations result in changes with respect to
         Partnership's qualifications or in changes to its income or loss, the
         tax liability of the partners would be changed accordingly.


                                      F-16
<PAGE>   29

                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                          NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



 (9)     Major Customers:

         A schedule of the major purchases of the Partnership's production is as
         follows:

<TABLE>
<CAPTION>

             Purchaser                               2000               1999              1998
             ---------                             --------           --------          --------
<S>                                                <C>                <C>               <C>

             American Refining Group                $ 32,066           $ 18,157          $ 12,123
             Phoenix Diversified                    $302,799           $186,712          $271,216
</TABLE>


         The Partnership renewed its gas purchase contracts in December, 2000
         resulting in a fixed price for one year.


(10)     Other Revenue:

         In 2000 the Partnership was a member of a Class of Oil Producers
         involved in litigation alleging that the principal refiners of Penn
         Grade crude engaged in a conspiracy to fix, lower, maintain and
         stabilize the purchase prices of crude purchased by the refiners from
         the oil producers. The Partnership received this amount pursuant to the
         Settlement Agreement of this litigation.

         In 1999 other revenue represents settled claims against Columbia Gas
         Transmission Corp. (Columbia) arising from amounts due from Columbia
         when they declared bankruptcy. No significant additional claims are
         expected concerning this matter.



                                      F-17
<PAGE>   30



                                                                      SCHEDULE V
                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                 PROPERTY AND EQUIPMENT - OIL AND GAS PROPERTIES

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>

                                     Balance at                                                       Balance
                                     Beginning        Additions                     Other              at End
                                      of Year          at Cost    Retirements      Changes            of Year
                                     -----------      --------    -----------     -----------        -----------
<S>                                  <C>              <C>          <C>            <C>                <C>
Year Ended December 31, 2000:
  Leasehold costs                    $   466,804        $  --        $  --           $  --           $   466,804
  Wells and related equipment         11,970,091           --           --              --            11,970,091
                                     -----------        -----        -----           -----           -----------
                                     $12,436,895        $  --        $  --           $  --           $12,436,895
                                     ===========        =====        =====           =====           ===========
Year ended December 31, 1999:
  Leasehold costs                    $   466,804        $  --        $  --           $  --           $   466,804
  Wells and related equipment         11,970,091           --           --              --            11,970,091
                                     -----------        -----        -----           -----           -----------
                                     $12,436,895        $  --        $  --           $  --           $12,436,895
                                     ===========        =====        =====           =====           ===========
Year Ended December 31, 1998:
  Leasehold costs                    $   466,804        $  --        $  --           $  --           $   466,804
  Wells and related equipment         11,970,091           --           --              --            11,970,091
                                     -----------        -----        -----           -----           -----------
                                     $12,436,895        $  --        $  --           $  --           $12,436,895
                                     ===========        =====        =====           =====           ===========
</TABLE>


                                      F-18
<PAGE>   31

                                                                    SCHEDULE VI

                         STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

  ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION - OIL AND GAS PROPERTIES

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>

                                     Balance at          Charges to                                            Balance
                                     Beginning           Costs and                           Other             at End
                                      of Year             Expenses      Retirements       Retirements          of Year
                                     -----------         -----------    -----------       -----------        -----------
<S>                                  <C>                 <C>            <C>               <C>                <C>
Year Ended December 31, 2000:
  Wells and related facilities        $11,335,097        $    31,425        $   --           $   --          $11,366,522
  Leasehold costs                         450,642                799            --               --              451,441
                                      -----------        -----------        ------           ------          -----------
                                      $11,785,739        $    32,224        $   --           $   --          $11,817,963
                                      ===========        ===========        ======           ======          ===========
Year ended December 31, 1999:
  Wells and related facilities        $11,297,799        $    37,298        $   --           $   --          $11,335,097
  Leasehold costs                         449,692                950            --               --              450,642
                                      -----------        -----------        ------           ------          -----------
                                      $11,747,491        $    38,248        $   --           $   --          $11,785,739
                                      ===========        ===========        ======           ======          ===========
Year Ended December 31, 1998:
  Wells and related facilities        $11,262,086        $    35,713        $   --           $   --          $11,297,799
  Leasehold costs                         448,783                909            --               --              449,692
                                      -----------        -----------        ------           ------          -----------
                                      $11,710,869        $    36,622        $   --           $   --          $11,747,491
                                      ===========        ===========        ======           ======          ===========

</TABLE>


                                      F-19

<PAGE>   32

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>


EXHIBIT
NUMBER                               DESCRIPTION
------                               -----------
<S>      <C>


(3)      Form of Agreement of Limited Partnership of Sterling Gas Drilling Fund
         1982 (incorporated by reference to Exhibit (3) of Sterling Gas Drilling
         Fund 1982 Form 10-K for the year ended December 31, 1994)

(23)     Consent of Ryder Scott Company (filed herewith)
</TABLE>