<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 [FEE REQUIRED]
                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                                     OR
[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
              SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                   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, 
1996, 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, 1995

                                     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 1995, 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, 1996, 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.

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.





                                      -1-
<PAGE>   3
         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 1995, approximately $25,000, or 11%, and $162,000, or
73%, of the Partnership's gas production was purchased by CNG Transmission
Corporation and Phoenix Energy Sales Company, respectively. American Rivers
Terminals purchased about $26,000, or 92%, of the Partnership's oil production.
None of the 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 1995 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 various state regulations.  The Partnership was subject to the Crude Oil
Windfall Profit Tax Act of 1980, which imposed an excise tax on producers of
crude oil at various rates for prices received in excess of certain historical
base prices.  That Act was repealed in August, 1988.  The Partnership is also
subject to state drilling and proration regulations affecting its drilling
operations and production rates.





                                      -2-
<PAGE>   4
         The FERC continues to regulate interstate natural gas pipeline
transportation rates and service conditions pursuant to the NGA and NGPA.
Federal regulation of interstate transporters 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 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.

         A number of legislative proposals have been introduced in Congress and
the state legislatures of various states, that, if enacted, would significantly
affect the petroleum industry.  Such proposals involve, among other things, the
imposition of land and use controls and certain measures designed to prevent
petroleum companies from acquiring assets in other energy areas.  In addition,
there is always the possibility that if market conditions change dramatically
in favor of oil and gas producers that some new form of "windfall profit" or
severance tax may be proposed for and imposed upon either oil or gas.  At the
present time it is impossible to predict which proposals, if any, will actually
be enacted by Congress or the various state legislatures.  The Partnership
believes that it will comply with all orders and regulations 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.

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.





                                      -3-
<PAGE>   5
         As of December 31, 1995, 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 and gas
production, average sales prices and average production costs as of and for the
periods indicated:

<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                                      -----------------------
                                                     1995          1994         1993         1992       1991
                                                  ---------       ------      -------      -------    -------
<S>                                               <C>             <C>         <C>          <C>        <C>
Production:
   Oil and Condensate (bbl) . . . . . . . . .         1,723        2,186        1,817        3,226      2,121
   Gas (Mcf)  . . . . . . . . . . . . . . . .       104,553       96,605      118,334      129,196    130,771
Average Price of Sales:
   Oil and Condensate ($ per bbl) . . . . . .     $   16.28        12.61        17.44        18.72      18.43
   Gas ($ per Mcf)  . . . . . . . . . . . . .     $    2.21         2.89         2.67         2.18       2.63
Production Expense per Dollar
   of Operating Revenue . . . . . . . . . . .     $    0.45         0.60         0.46         0.46       0.52
</TABLE>

OIL AND GAS RESERVES

         The Partnership's interests in proved developed oil and gas properties
have been evaluated by Ryder Scott Company 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
                  As of                                      ----------------
                  12-31                         Oil (bbls)                       Gas (Mcf)
                  -----                         ----------                       ---------
                  <S>                             <C>                            <C>
                  1991                            29,000                         2,234,000
                  1992                            28,000                         1,863,000
                  1993                            27,000                         2,181,000
                  1994                            12,000                         1,150,000
                  1995                            19,000                         1,909,000
</TABLE>





                                      -4-
<PAGE>   6
         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
                  12-31                            Revenue                 Future Net Revenue
                  -----                          ----------                ------------------
                  <S>                            <C>                           <C>
                  1991                           $2,198,000                    $   843,000
                  1992                            1,909,000                        878,000
                  1993                            3,439,000                      1,532,000
                  1994                              834,000                        415,000
                  1995                            1,727,000                        664,000
</TABLE>

         Since January 1, 1995, 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 1995 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, 1996, there were 1,139 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 1995.  Aggregate cash distributions to
the holders of the Units as of December 31, 1995, is $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.





                                      -5-
<PAGE>   7
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.

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 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, 1996, Management acts as the Managing General Partner in a total of
51 limited partnerships and joint ventures, of which 6 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,





                                      -6-
<PAGE>   8
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 153 employees, including their principal officers,
providing 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 who are involved with the conduct of the
business and operations of the Partnership.

         Charles E. Drimal, Jr., age 47, 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 42, has been a Director and Vice President,
Finance, of Management since August, 1985.  She is also a Director and Vice
President, Finance, 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.

         Bennie H. Wallace, Jr., age 43, is a Director and Vice President of
Management and has held such positions since May, 1989.  He is Acquisitions
Manager for Management, a Vice President of PrimeEnergy since March, 1989, as a
Director of PrimeEnergy since June, 1993, and is a Vice President and Director
of the operating subsidiaries.  He graduated from Louisiana State University in
1975 with a Bachelor of Science degree in petroleum engineering and is a
registered professional engineer in the States of Texas and Louisiana and was
an independent petroleum engineer engaged in the evaluation and operation of
oil and gas properties from 1983 to 1987.

         Lynne G. Pizor, age 36, 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 63, 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





                                      -7-
<PAGE>   9
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
1995, the allocation of general and administrative expenses to the Partnership
was $90,000.

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 the General Partners as a group
(including affiliates) that beneficially owns more than five percent of the
Partnership Units.  The following table shows as of March 15, 1996, the name
and address of such 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   . . . . . . . . . . . . . . . . . .       1,089           7.58

         General Partners as a Group
           One Landmark Square
           Stamford, CT 06901   . . . . . . . . . . . . . . . . . .       1,353           9.42
</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 1995 was paid well operating
fees ranging from about $383 to $722 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 1995, the Partnership paid an aggregate of
$82,329 in such fees and expenses.





                                      -8-
<PAGE>   10
                                    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.       Exhibits:

                          (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.)

                          (24)    Consent of Ryder Scott Company (filed 
                                  herewith)

                          (27)    Financial Data Schedule. (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.





                                      -9-
<PAGE>   11
                                   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 20th day of
March, 1996.


                                     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 20th day of March, 1996.



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




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




S/Bennie H. Wallace, Jr.          Director, PrimeEnergy Management
------------------------          Corporation                                 
Bennie H. Wallace, Jr.                       





                                      -10-
<PAGE>   12
                        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, 1995 and 1994                                                    F-6

      Statements of Operations for the Years Ended December 31,
      1995, 1994 and 1993                                                                           F-7

      Statements of Changes in Partners' Equity for the Years
      Ended December 31, 1995, 1994 and 1993                                                        F-8

      Statements of Cash Flows for the Years Ended December 31,
      1995, 1994 and 1993                                                                           F-9

      Notes to Financial Statements                                                                 F-10

Schedules:

     V     -  Property and Equipment - Oil and Gas Properties for
              the Years Ended December 31, 1995, 1994 and 1993                                      F-18

     VI    -  Accumulated Depreciation, Depletion, and Amortization -
              Oil and Gas Properties for the Years Ended December 31,
              1995, 1994 and 1993                                                                   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>   13
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)
                                                            ---------------------------------------
                                                     1995       1994         1993         1992         1991
                                                     ----       ----         ----         ----         ----
               <S>                                  <C>       <C>          <C>          <C>          <C>
               Revenues  . . . . . . . . . . .      $ 367      $ 302       $ 356        $ 342        $ 382
               Net income (loss):
                  Limited Partners . . . . . .         77        (89)         10          (33)          (4)
                  General Partners . . . . . .         22         (2)         10            5           10
                  Per equity unit  . . . . . .       5.32      (6.18)       0.68        (2.29)       (0.30)
               Total assets  . . . . . . . . .        783        826         906          955        1,022
               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, 1995, 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, 1995 was approximately
$664,000, as compared to December 31, 1994, of about $415,000. The increase in
total estimated discounted future net revenue was due in part to higher year
end gas prices as of December 31, 1995, when compared to the low gas price in
effect as of December 31, 1994. It is the opinion of management, and the
general consensus in the industry, that gas prices are unlikely to fall
significantly below the December 31, 1995, price in the near future. However,
there can be no assurance that such price declines will not occur, and will not
pose a threat to the Partnership's continued viability.

         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





                                      F-2
<PAGE>   14
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:

         1995 compared to 1994

         Operating revenue declined from $302,383 in 1994 to $259,107 in 1995.
The Partnership experienced an increase in gas production from 96,605 mcfs in
1994 to 104,553 mcfs in 1995. The increase in mcfs for the Partnership was
offset by lower average price per mcf from $2.89 in 1994 to $2.21 in 1995.

         The Partnership generally renews contracts as they come due for twelve
month periods. The Partnership was in a fixed contract price for nine months of
1994. The negotiated renewal price offered late in 1994 for the 1994-1995
contracts was lower then was deemed favorable to the Partnership. Therefore,
the price remained at spot prices during the last quarter of 1994 and all of
1995. The spot price fluctuated significantly during peak and off peak usage
periods. During the fourth quarter of 1995, the Partnership locked into a
twelve month fixed price contract.

         Columbia Gas Transmission Corp., a gas purchaser of the Partnership's
gas, filed a Chapter 11 petition in the U.S. Bankruptcy Court in Wilmington,
Delaware, on July 31, 1991. At that time, the Bankruptcy Court released
Columbia from any active contracts. The Partnership filed a claim with the
Bankruptcy Court to recover revenues suspended at the time the bankruptcy
occurred. Such amounts were not recorded during the applicable period since the
claim amount was undetermined and open-ended. The Court's settlement of the
Columbia bankruptcy proceedings were finalized in November of 1995. The
Partnership received $108,492, which was reported as other income for 1995.

         Production expenses decreased from $182,383 in 1994 to $115,285 in
1995. This increase can be attributed to higher general labor, repairs and
location costs associated with the inclement weather conditions in early 1994.
The weather caused line damages, floods and other situations that increased
normal maintenance costs. Most of the production expenses incurred in 1995 were
to maintain the general upkeep of the wells and well sites. General and
administrative costs decreased from $131,576 in 1994 to $110,950 in 1995.
Amounts in both years are substantially less then the $718,500 allocable to the
Partnership under the Partnership Agreement. The lower amounts reflect
management's efforts to limit costs, both incurred and allocated to the
Partnership. Management continues to monitor any third party costs and use
in-house resources if it will provide efficient and timely services to the
Partnership.

         The Partnership records additional depreciation, depletion and
amortization to the extent that the net capitalized costs exceeds the
undiscounted future net cash flows attributable to the Partnership. No
additional depletion was needed in 1995 or 1994. Depreciation, depletion and
amortization rates were significantly higher in 1994 compared to 1995,
resulting in a higher depletion expense, $79,906 for 1994, as compared to
$42,872 in 1995.





                                      F-3
<PAGE>   15
         1994 compared to 1993

         Operating revenue declined from $356,177 in 1993 to $302,383 in 1994.
This decline can be attributed to both a production decline as well as low
prices during the last quarter of 1994.  The Partnership generally renews
contracts as they come due for an additional twelve month period.  The price
offered at the renewal date for the contracts was lower than was deemed
favorable.  The Partnership is currently selling, at spot prices, to its normal
purchasers until the Partnership can lock into a twelve month contract with a
favorable price.  The contract price in effect for three months of 1993 and
nine months of 1994 resulted in a slightly higher average mcf price of $2.89
for 1994 as compared with $2.67 for 1993.  The price increase was offset by a
decline in production from 118,334 mcf in 1993 to 96,605 mcf in 1994.

         Production expenses increased from $165,546 in 1993 to $182,383 in
1994.  This increase can be attributed to higher general labor, repairs and
location costs associated with the inclement weather conditions in early 1994.
The weather caused line damages, floods and other situations that increased
normal maintenance costs.  General and administrative costs increased
moderately from $121,174 in 1993 to $131,576 in 1994.  Amounts in both years
are substantially less then the $718,500 allocable to the Partnership under the
Partnership Agreement.  The lower 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 exceeds the
undiscounted future net cash flows attributable to the partnership.  No
additional depletion was needed in 1994 or 1993.  Depreciation, depletion and
amortization rates were significantly higher in 1994 compared to 1993 resulting
in a higher depletion expense, $79,906 for 1994 as compared to $49,191 in 1993.
The higher rates are directly attributable to a downward revision in the oil
and gas reserves due to lower year-end prices.





                                      F-4
<PAGE>   16
                        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, 1995 and 1994, and the
related statements of operations, changes in partners' equity, and cash flows
for the years ended December 31, 1995, 1994 and 1993.  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, 1995 and 1994, and the results of its operations and
cash flows for the years ended December 31, 1995, 1994 and 1993 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.


/s/ PUSTORINO, PUGLISI & CO., P.C.

PUSTORINO, PUGLISI & CO., P.C.
New York, New York
March 6, 1996



                                     F-5
<PAGE>   17
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                                 BALANCE SHEETS

                           DECEMBER 31, 1995 AND 1994


                                     Assets
                                     ------
<TABLE>
<CAPTION>
                                                                                   1995              1994    
                                                                                -----------       -----------
<S>                                                                             <C>               <C>
Current Assets:
  Cash and cash equivalents (Note 2)                                            $        24       $        43
                                                                                -----------       -----------
     Total Current Assets                                                                24                43
                                                                                -----------       -----------
Oil and Gas Properties - successful efforts
 methods (Note 3) - (Schedules V and VI):
  Leasehold costs                                                                   466,804           466,804
  Wells and related facilities                                                   11,947,691        11,947,691
                                                                                -----------       -----------
     Total                                                                       12,414,495        12,414,495
  Less - Accumulated depreciation, depletion                                                                  
          and amortization                                                      (11,631,308)      (11,588,436)
                                                                                -----------       ----------- 
                                                                                    783,189           826,059
                                                                                -----------       -----------

     Total Assets                                                               $   783,211       $   826,102
                                                                                ===========       ===========


                                           Liabilities and Partners' Equity
                                           --------------------------------

Current Liabilities:
  Due to affiliates (Note 6)                                                    $   427,107       $   568,490      
                                                                                -----------       -----------      
     Total Current Liabilities                                                      427,107           568,490      
                                                                                -----------       -----------      
Partners' Equity:                                                                                                  
  Limited partners                                                                  656,941           580,425      
  General partners                                                                 (300,837)         (322,813)     
                                                                                -----------       -----------      
     Total Partners' Equity                                                         356,104           257,612      
                                                                                -----------       -----------      
                                                                                                                   
     Total Liabilities and Partners' Equity                                     $   783,211       $   826,102      
                                                                                ===========       ===========      
</TABLE>


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


                                      F-6
<PAGE>   18
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                            STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993





<TABLE>
<CAPTION>
                                                     1995                                              1994                        
                                    -----------------------------------------         -----------------------------------------    
                                    Limited         General                           Limited         General                     
                                    Partners        Partners          Total           Partners        Partners          Total      
                                    --------        --------        ---------         --------        --------        ---------    
<S>                                 <C>             <C>              <C>              <C>             <C>              <C>      
Revenues:                                                                                                                       
  Operating revenues                $218,039        $41,068          $259,107         $254,455        $47,928          $302,383 
  Other Revenue                                                                                                                 
   (Note 10)                          91,296         17,196           108,492             -              -                 -    
                                    --------        -------          --------         --------        -------          -------- 
     Total Revenues                  309,335         58,264           367,599          254,455         47,928           302,383 
                                    --------        -------          --------         --------        -------          -------- 
Costs and Expenses:                                                                                                             
  Production expenses                 97,012         18,273           115,285          153,475         28,908           182,383 
  Depreciation,                                                                                                                 
   depletion and                                                                                                                
   amortization                       42,443            429            42,872           79,106            799            79,905 
  General and                                                                                                                   
   administrative                                                                                                               
   expenses (Note 7)                  93,364         17,586           110,950          110,722         20,855           131,577 
                                    --------        -------          --------         --------        -------          -------- 
                                                                                                                                
    Total Expenses                   232,819         36,288           269,107          343,303         50,562           393,865 
                                    --------        -------          --------         --------        -------          -------- 
                                                                                                                                
     Net Income (Loss)              $ 76,516        $21,976          $ 98,492         $(88,848)       $(2,634)         $(91,482)
                                    ========        =======          ========         ========        =======          ======== 
                                                                                                                                
  Net Income (Loss) Per                                                                                                         
   Equity Unit (Note 2)             $   5.32                                          $  (6.18)                                 
                                    ========                                          ========                                  


<CAPTION>
                                                        1993               
                                       -----------------------------------------
                                       Limited         General
                                       Partners        Partners          Total  
                                       --------        --------        ---------
<S>                                    <C>             <C>             <C>
Revenues:                       
  Operating revenues                   $299,723        $56,454         $356,177
  Other Revenue                                                                
   (Note 10)                               -              -                -   
                                       --------        -------         --------
     Total Revenues                     299,723         56,454          356,177
                                       --------        -------         --------
Costs and Expenses:             
  Production expenses                   139,307         26,239          165,546
  Depreciation,                                                                
   depletion and                
   amortization                          48,699            492           49,191
  General and                                                                  
   administrative               
   expenses (Note 7)                    101,968         19,206          121,174
                                       --------        -------         --------
                                
    Total Expenses                      289,974         45,937          335,911
                                       --------        -------         --------
                                
     Net Income (Loss)                 $  9,749        $10,517         $ 20,266
                                       ========        =======         ========
                                
  Net Income (Loss) Per         
   Equity Unit (Note 2)                $   0.68
                                       ========
</TABLE>



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





                                      F-7
<PAGE>   19
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                   STATEMENTS OF CHANGES IN PARTNERS' EQUITY

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993


<TABLE>
<CAPTION>
                                                             Limited              General
                                                             Partners             Partners                 Total  
                                                             --------             ---------              --------
<S>                                                          <C>                  <C>                    <C>
Balance at December 31, 1992                                 $659,524             $(330,696)             $328,828

Net Income (Loss)                                               9,749                10,517                20,266
                                                             --------             ---------              --------

Balance at December 31, 1993                                  669,273              (320,179)              349,094

Net (Loss)                                                    (88,848)               (2,634)              (91,482)
                                                             --------             ---------              --------

Balance at December 31, 1994                                  580,425              (322,813)              257,612

Net Income (Loss)                                              76,516                21,976                98,492
                                                             --------             ---------              --------

Balance at December 31, 1995                                 $656,941             $(300,837)             $356,104
                                                             ========             ==========             ========
</TABLE>





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





                                      F-8
<PAGE>   20
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                            STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993




<TABLE>
<CAPTION>
                                                                           1995             1994               1993  
                                                                         --------         --------           --------
<S>                                                                      <C>              <C>                <C>
Cash Flows From Operating Activities:
 Net income (loss)                                                       $ 98,492         $(91,482)          $ 20,266
                                                                         --------         --------           --------
 Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
   Depreciation, depletion and amortization                                42,872           79,906             49,191

   Changes in Assets and Liabilities:
    Increase (decrease) due to affiliates                                (141,383)          11,573            (69,573)
                                                                         --------         --------           --------

        Total Adjustments                                                 (98,511)          91,479            (20,382)
                                                                         --------         --------           --------

      Net Cash Provided (Used) by                                                                                     
       Operating Activities                                                   (19)              (3)              (116)

Cash and cash equivalents, beginning of year                                   43               46                162
                                                                         --------         --------           --------

Cash and cash equivalents, end of year                                   $     24         $     43           $     46
                                                                         ========         ========           ========


Supplemental Disclosures:

  Interest paid during the year                                          $   -            $   -              $   -   
                                                                         ========         ========           ========
</TABLE>





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





                                      F-9
<PAGE>   21
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993


(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
         and, 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>   22
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993



(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 is recorded to the extent that 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.

         Recently Issued Accounting Standards:

         The Partnership has elected to implement the provisions of FAS
         Statement No. 121 "Accounting for the Impairment of Long-Lived Assets
         and for Long-Lived Assets to be Disposed of."  The implementation of
         this standard has had no material effect on the financial statements.





                                      F-11
<PAGE>   23
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993


(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, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
                                                      1995          1994          1993 
                                                     ------        ------        ------
         <S>                                         <C>           <C>           <C>
         Average sales price per MCF of gas          $ 2.21        $ 2.89        $ 2.67
         Average sales price per BBL of                                                
           oil and other liquids                      16.28         12.61         17.44
         Production expense per dollar of                                              
          operating revenue                            0.45          0.60          0.46
</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, 1996.  Petroleum engineers on the staff of PEC have reviewed the
         data presented below, as of December 31, 1995, 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, 1992                                      1,862,630            28,389
         Revisions of previous estimates                                         436,652               513
         Production                                                             (118,334)           (1,817)
                                                                               ---------            ------ 

         Reserves as of December 31, 1993                                      2,180,948            27,085
         Revisions of previous estimates                                        (934,356)          (12,826)
         Production                                                              (96,605)           (2,186)
                                                                               ---------            ------ 

         Reserves as of December 31, 1994                                      1,149,987            12,073
         Revisions of previous estimates                                         863,677             8,919
         Production                                                             (104,553)           (1,723)
                                                                               ---------            ------ 

         Reserves as of December 31, 1995                                      1,909,111            19,269
                                                                               =========            ======
</TABLE>





                                      F-12
<PAGE>   24
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993



(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 current prices were to
         prevail into the future, 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 reseve quantities used to
         calculate depreciation, depletion, and amortization.

         As discussed in Note 2, the Partnership records additional
         depreciation, depletion and amortization to the extent that 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 1995, 1994 and
         1993.  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 1995.





                                      F-13
<PAGE>   25
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993


(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):

<TABLE>
             <S>                                       <C>
             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%
                                                       =======
</TABLE>


                                      F-14
<PAGE>   26
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993




(6)      Transactions With Affiliates:

         (a)   The payable to affiliates at December 31, 1995 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
               $400 for each producing gas well and $722 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 in which production began.  During 1995, 1994 and
               1993, $64,145, $103,205 and $100,687 of production operator's
               fees were incurred, 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 1995, 1994 and 1993, the Partnership accrued general and
         administrative expenses incurred on its behalf by a general partner of
         $90,000, $110,800, $100,000, respectively.





                                      F-15
<PAGE>   27
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993


(8)      Federal Income Taxes:

         The following is a reconciliation between the net income (loss) 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,     
                                                      ----------------------------------------------
                                                        1995              1994                1993   
                                                      --------          --------            --------
         <S>                                          <C>               <C>                 <C>
         Net income (loss)as                                                                       
          reported on the
          Partnership's federal
          income tax return                           $141,364          $(11,576)           $ 69,457

         Depreciation, depletion and                                                                 
          amortization for financial
          reporting purposes
          (greater) less than income
          tax amount                                   (42,872)          (79,906)            (49,191)
                                                      --------          --------            -------- 
         Net income (loss) per                                                                      
          accompanying financial
          statements                                  $ 98,492          $(91,482)           $ 20,266
                                                      ========          ========            ========
</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.

         The Tax Reform Act of 1976 provides that no part of any depletion
         deduction with respect to oil and gas wells is to be determined by the
         Partnership but must be computed separately by the partners.  Thus,
         cost or percentage depletion, as applicable, must be computed by each
         partner so that a specific depletion computation can be made when each
         partner files his U.S. income tax return.  Information is furnished to
         the partners to compute the depletion deduction.


                                      F-16
<PAGE>   28
                        STERLING GAS DRILLING FUND 1982
                        (a New York limited partnership)

                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993





 (9)     Major Customers:

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

<TABLE>
<CAPTION>
             Purchaser                                 1995              1994               1993  
             ---------                               --------          --------           --------
             <S>                                     <C>               <C>                <C>
             CNG                                     $ 24,993          $127,001           $149,020
             Brooklyn Union                          $   -             $   -              $ 41,584
             Glen Gary                               $   -             $   -              $ 31,391
             American River                          $ 25,862          $   -              $   -
             Phoenix                                 $161,522          $111,882           $ 59,525
</TABLE>

         The Partnership renewed its gas purchase contract in December, 1995
         resulting in a fixed price for one year.


(10)     Other Revenue:

         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>   29
                                   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, 1995, 1994 AND 1993


<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, 1995:                         
----------------------------                          
  Leasehold costs                       $   466,804         $    -               $   -              $   -              $   466,804
  Wells and related equipment            11,947,691              -                   -                  -               11,947,691
                                        -----------         ---------            --------           --------           -----------
                                        $12,414,495         $    -               $   -              $   -              $12,414,495
                                        ===========         =========            ========           ========           ===========
                                                      
Year ended December 31, 1994:                         
----------------------------                          
  Leasehold costs                       $   466,804         $    -               $   -              $   -              $   466,804
  Wells and related equipment            11,947,691              -                   -                  -               11,947,691
                                        -----------         ---------            --------           --------           -----------
                                        $12,414,495         $    -               $   -              $   -              $12,414,495
                                        ===========         =========            ========           ========           ===========
                                                      
Year Ended December 31, 1993:                         
----------------------------                          
  Leasehold costs                       $   466,804         $    -               $   -              $   -              $   466,804
  Wells and related equipment            11,947,691              -                   -                  -               11,947,691
                                        -----------         ---------            --------           --------           -----------
                                        $12,414,495         $    -               $   -              $   -              $12,414,495
                                        ===========         =========            ========           ========           ===========
</TABLE>


                                      F-18
<PAGE>   30
                                  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, 1995, 1994 AND 1993


<TABLE>
<CAPTION>
                                       Balance at         Charges to                                                  Balance
                                       Beginning          Costs and                                Other              at End
                                        of Year            Expenses           Retirements         Changes             of Year 
                                       ----------         ----------          -----------         -------            ---------
<S>                                    <C>                  <C>                <C>                <C>                <C>
Year Ended December 31, 1995:                       
----------------------------                        
  Wells and related facilities         $11,142,736          $41,777            $   -              $   -              $11,184,513
  Leasehold costs                          445,700            1,095                -                  -                  446,795
                                       -----------          -------            --------           --------           -----------
                                       $11,588,436          $42,872            $   -              $   -              $11,631,308
                                       ===========          =======            ========           ========           ===========
                                                    
Year ended December 31, 1994:                       
----------------------------                        
  Wells and related facilities         $11,064,872          $77,864            $   -              $   -              $11,142,736
  Leasehold costs                          443,659            2,041                -                  -                  445,700
                                       -----------          -------            --------           --------           -----------
                                       $11,508,531          $79,905            $   -              $   -              $11,588,436
                                       ===========          =======            ========           ========           ===========
                                                    
Year Ended December 31, 1993:                       
----------------------------                        
  Wells and related facilities         $11,016,938          $47,934            $   -              $   -              $11,064,872
  Leasehold costs                          442,402            1,257                -                  -                  443,659
                                       -----------          -------            --------           --------           -----------
                                       $11,459,340          $49,191            $   -              $   -              $11,508,531
                                       ===========          =======            ========           ========           ===========
</TABLE>


                                      F-19
<PAGE>   31
                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                                                     SEQUENTIALLY
EXHIBIT                                                                                                                NUMBERED
NUMBER                                     EXHIBIT                                                                       PAGE     
------                                     -------                                                                   ------------
       <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)

       (24)      Consent of Ryder Scott Company (filed herewith)

       (27)      Financial Data Schedule. (filed herewith)
</TABLE>