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<Page> 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
   Form 10-K (Mark One)þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934For the fiscal year ended December 31, 2004ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934For the transition period
from         to
 Commission File No. 2-84452-01 Sterling Drilling Fund 1983-2, L.P.  New York
    
    13-3167551(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 One Landmark SquareStamford, Connecticut
    
    06901(Address of principal executive offices)
    
    (Zip Code)
 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
(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 þ NO o 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. o Indicate by check mark whether Registrant is an accelerated filer as defined in Exchange Act
Rule 12-b-2. YES o NO þ 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, 2005, was: 15,697. DOCUMENTS INCORPORATED BY REFERENCE NONE




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TABLE OF CONTENTS  PART IItem 1. BUSINESSItem 2. PROPERTIESItem 3. LEGAL PROCEEDINGSItem 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIItem 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERSItem 6. SELECTED FINANCIAL DATAItem 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKItem 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAItem 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREItem 9A. CONTROLS AND PROCEDURESPART IIIItem 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTItem 11. EXECUTIVE COMPENSATIONItem 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTItem 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSItem 14. PROFESSIONAL SERVICES AND AUDIT FEESPART IVItem 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-KSIGNATURESItem 6. SELECTED FINANCIAL DATAINDEX TO EXHIBITSConsent of Ryder Scott Company, L.P.Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906    Table of Contents  <Page> 2 STERLING DRILLING FUND 1983-2, L.P. FORM 10-K ANNUAL REPORT
For the Fiscal Year Ended
December 31, 2004 
 PART I 
 Item 1. BUSINESS Sterling Drilling Fund 1983-2, L.P., formerly Sterling-Fuel Resources Drilling Fund 1983-2
(the Registrant or the Partnership) is a limited partnership formed under the laws of the State
of New York on May 26, 1983. The sole business of the Partnership was the drilling of the
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, and 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. The aggregate contributions to the Partnership were $15,697,000, all of which, net of the
organization expenses of the Partnership were 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 2004 and 2003 the Partnership did not engage in any other 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, 2005, and to the date of this Report, the Partnership has not engaged in any drilling
activities nor participated in the acquisition of any material producing oil and gas properties. During 2002, PrimeEnergy Management negotiated a Farmout Agreement with Ardent Resources Inc.
(Ardent) covering leasehold interests in acreage located in Calhoun County, West Virginia.
Pursuant to this agreement, Ardent had the right but not the obligation to select acreage and drill
a deep well subject to an overriding royalty due to the lease hold owners. As of February 13, 2005,
Ardent had not spudded a test well under the agreement, therefore, the agreement has terminated.
Acreage held by Sterling Drilling Fund 1983-2 was included in the Farmout Agreement; PrimeEnergy
Management may discuss the possibility of farming out additional deep rights held by the
Partnership under the same terms with other parties, however, at this time there are no new
agreements.




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<Page> 3 Competition and Markets Competitors of the Partnership in the marketing of its oil and gas production include oil and
gas companies, independent concerns, and individual producers and operators, many of which have
financial resources, staffs and facilities substantially greater than those available to the
Partnership. Furthermore, domestic producers of oil and gas must not only compete with each other
in marketing their output, but must also compete with producers of imported oil and gas, along with
and alternative energy sources such as coal, nuclear power and hydro-electric power. The availability of a ready market for any oil and gas produced by the Partnership at
acceptable prices per unit of production will depend upon numerous factors beyond the control of
the Partnership. These include the extent of domestic production and importation of oil and gas,
the proximity of the Partnerships producing properties to gas pipelines and availability and
capacity of such pipelines, the marketing of other competitive fuels, fluctuation in demand,
governmental regulation of production, refinement, transportation and sales, general national and
worldwide economic conditions, and the pricing, use and allocation of oil, gas and their substitute
fuels. The Partnership does not currently own or lease any bulk storage facilities or pipelines other
than those adjacent to, and used in connection with producing wells. The Partnership deals with a
number of major independent companies for the purchase of its oil and gas production in the areas
of production. In 2004, $641,447 or 82.08% and $130,529 or 16.70% of the Partnerships gas
production was sold to Dominion Field Services and Cabot Oil & Marketing Corporation respectively,
and $40,177 or 100% of the Partnerships oil production was sold to Clearfield Appalachian
Holdings. 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 concerning
preservation of the environment during 2004 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 result in a future
curtailment of production, or otherwise have a materially adverse effect on the Partnerships
operations or financial condition.




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<Page> 4 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 is
regulated by the Federal Energy Regulatory Commission (FERC) and the Natural Gas Policy Act of
1978 and various state regulations. The Partnership is also subject to state drilling and proration
regulations affecting its drilling operations and production rates. The FERC continues to regulate interstate natural gas pipeline transportation rates and
service conditions pursuant to the NGA and NGPA. Federal regulation of interstate transportation
affects the marketing of natural gas produced by the Partnership as well as the revenues received
by the Partnership for sales of such natural gas. Since the latter part of 1985, through its Order
Nos. 436, 500 and 636 rulemakings, the FERC has endeavored to make natural gas transportation
accessible to gas buyers and sellers on an open and non-discriminatory basis. The FERCs efforts
have significantly altered the marketing and pricing of natural gas. No prediction can be made as
to what additional legislation may be proposed, if any, affecting the competitive status of a gas
producer, restricting the prices at which a producer may sell its gas or the market demand for gas;
nor can it be predicted which proposals, including those presently under consideration, if enacted,
might be effective. Additional proposals and proceedings that might affect the natural gas industry are considered
from time to time by Congress, the FERC, state regulatory bodies and the courts. The Partnership
cannot predict when or if any such proposals may become effective or their effect (if any) on the
Partnerships operations. The Partnership believes that it will comply with all orders and
regulation changes applicable to its operations. However, in view of the many uncertainties with
respect to the current controls (including their duration and possible modification together with
any new proposals that may be enacted), the Partnership cannot predict the overall effect (if any)
of such controls on its operations. Taxation The Partnership received an opinion from 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 or her 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.




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<Page> 5 
 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, and production and
reserves for the periods indicated. Producing Wells and Operating Information The Partnership, following its formation in December 1983, contracted for the drilling of 52
development wells, which resulted in 51 producing wells and one dry hole. As of December 31, 2004, 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: Gross
    
    
    NetOil Wells
    
    
    1
    
    
    
    1Gas Wells
    
    
    60
    
    
    
    48.3Producing acres
    
    
    6,086
    
    
    
    4,898
   (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: ALL YEARS ENDED DECEMBER 312004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Production:Oil and Condensate (bbl)
    
    
    1,076
    
    
    
    1,685
    
    
    
    1,335
    
    
    
    1,748
    
    
    
    1,861Gas (Mcf)
    
    
    115,766
    
    
    
    106,203
    
    
    
    124,178
    
    
    
    140,730
    
    
    
    141,004Average Price of Sales:Oil and Condensate (bbl)
    
    
    37.35
    
    
    
    26.99
    
    
    
    20.60
    
    
    
    22.69
    
    
    
    26.91Gas (Mcf)
    
    
    6.75
    
    
    
    4.90
    
    
    
    3.55
    
    
    
    5.20
    
    
    
    3.57Production Expense per Dollar
Of Operating Revenue
    
    
    0.46
    
    
    
    0.48
    
    
    
    0.60
    
    
    
    0.47
    
    
    
    0.43




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<Page> 6 Oil and Gas Reserves The Partnerships interests in proved developed oil and gas properties have been evaluated by
Ryder Scott Company, L.P. 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): Proved DevelopedAs of 12-31
    
    Oil (bbls)
    
    
    Gas (Mcf)2000
    
    
    20,400
    
    
    
    2,321,5402001
    
    
    21,340
    
    
    
    2,205,1002002
    
    
    19,600
    
    
    
    2,160,6002003
    
    
    22,310
    
    
    
    2,125,5002004
    
    
    18,700
    
    
    
    2,233,400
 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): Proved DevelopedFuture Net
    
    
    Present Value ofAs of 12-31
    
    Revenue $
    
    
    Future Net Revenue $2000
    
    
    19,003,750
    
    
    
    7,413,3002001
    
    
    3,408,560
    
    
    
    1,477,0002002
    
    
    5,969,800
    
    
    
    2,491,4002003
    
    
    9,040,450
    
    
    
    3,778,9602004
    
    
    10,507,780
    
    
    
    4,401,460
 The estimated reserve and future income quantities are related to hydrocarbon prices.
Therefore, volumes of reserves actually recovered and amounts of income actually received may
differ significantly from the estimated quantities presented in this report. In accordance with FASB Statement No. 69, December 31, 2004 market prices were determined
using the daily oil price or daily gas sales price (spot price) adjusted for oilfield or gas
gathering hub and wellhead price differentials (e.g. grade, transportation, gravity, sulfur, and
BS&W) as appropriate. Also, in accordance with SEC and FASB regulations, changes in market prices
subsequent to December 31, 2004 and 2003 were not considered.
The spot price for gas on December 31, 2004 was $6.18 per MMBTU.
The range of spot prices during the year 2004 was a low of $4.39 and
a high of $7.96; the average price was $5.87. The spot price for gas at December 31, 2003 was
$5.97 per MMBTU. The range of spot prices during the year 2003 was a low of $3.96 and a high of
$12.20; the average price was $5.48. The range during the first two months of 2005 has been from
$5.57 to $6.50 with an average of $6.13. The recent futures market prices have been in the $7.00
range.




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<Page> 7 While it may be reasonably anticipated that the prices received by Sterling Drilling Fund
1983-2 for the sale of its production may be higher or lower than the prices used in this
evaluation (as described above) and the operating costs relating to such production may also
increase or decrease from existing levels; such possible changes in prices and costs were, in
accordance with rules adopted by the SEC, omitted from consideration in making this evaluation for
the SEC case. Actual volumes produced, prices received, and costs incurred by the partnership may
vary significantly from the SEC case. 
 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 2004 for vote by the holders of Partnership Units. 
 PART II 
 Item 5. MARKET FOR
THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES There is no market for the Limited Partnership Units (the Units) of the Partnership. As of
February 28, 2005, there were 646 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. Cash distributions to the holders of Units for 2004 aggregated
$78,485. Aggregate cash distributions to the holders of the Units as of December 31, 2004 was
$2,299,611. The Managing General Partner may purchase Units directly from the unit holders if presented to
the Managing General Partner. This is subject to conditions such as, limitations on the number of
Units, and will be carried out at a price to be fixed by the Managing General Partner in accordance
with certain procedures provided for in the Limited Partnership Agreement of the Partnership. 
 Item 6. SELECTED FINANCIAL DATA The information required hereunder is set forth under Selected Financial Data in the
Financial Information section included in this Report. The index to the Financial Information
section is at page F-1.




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<Page> 8 
  Item 7.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required hereunder is set forth under Managements Discussion and Analysis of
Financial Condition and Results of Operations in the Financial Information section included in
this Report. The index to the Financial Information section is at page F-1. 
 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Registrant is a small business issuer as defined in the Securities and Exchange Act Rule
12b-2 and no information is required to be provided by this Item 7A. 
 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required hereunder is set forth under Report of Independent Public
Accountants, Balance Sheets, Statements of Operations, Statements of Changes in Partners
Equity, Statements of Cash Flows and Notes to Financial Statements in the Financial
Information section included in this Report. The index to the Financial Information section is at
page F-1. 
  Item 9.
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There was no disagreement between the Partnership and its certified public accountants on any
matter of accounting principles or practices or financial statement disclosure. 
 Item 9A. CONTROLS AND PROCEDURES PrimeEnergy Management Corporation (PEMC), the Managing General Partner of the Partnership,
maintains a system of controls and procedures designed to provide reasonable assurance as to the
reliability of the financial statements and other disclosures included in this report, as well as
to safeguard assets from unauthorized use or disposition. Within 90 days prior to the filing of
this report, PEMCs Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of the design and operation of our disclosure controls and procedures with the
assistance and participation of other members of management. Based upon that evaluation, PEMCs
Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures are effective for gathering, analyzing and disclosing the information the Partnership is
required to disclose in the reports it files under the Securities Exchange Act of 1934 within the
time periods specified in the SECs rules and forms. There have been no significant changes in
PEMCs internal controls or in other factors, which could significantly affect internal controls
subsequent to the date PEMC carried out its evaluation. Item 9B. OTHER
INFORMATION No
information was required to be disclosed by Registrant in a report on
Form 8-K during the fourth quarter of the year covered by this
Report.




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<Page> 9 
 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,
joint ventures and asset and income fund limited partnerships. As of March 15, 2005, Management
acts as the Managing General Partner in a total of 18 limited partnerships (of which two are
publicly held) and is the Managing Trustee of two Delaware Business Trusts. The primary activity
of such Partnerships and trusts is the production of oil and gas. Management, as the Managing
General Partner of the Partnership, will devote such time as it believes necessary to the conduct
and management of the business and affairs of the Partnership. Management, and other of the
General Partners of the Partnership, are engaged in and intend to continue to engage in the oil and
gas business for their own accounts and for the accounts of others. Management, which provides all of the executive, management and administrative functions of
the Partnership, is a wholly owned subsidiary of PrimeEnergy Corporation (PrimeEnergy), a
publicly held Delaware corporation. The principal offices of
PrimeEnergy and Management are in Stamford, Connecticut. The operating subsidiaries of PrimeEnergy, Prime Operating Company and
Eastern Oil Well Service Company maintain their principal offices in Houston, Texas, with district
offices in Midland, Texas, Oklahoma City, Oklahoma, and Charleston, West Virginia. PrimeEnergy and
its subsidiaries have approximately 194 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 that are involved with the conduct of the business and operations of the
Partnership. Charles E. Drimal, Jr., age 57, 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 51, has been a Director and Vice President of Finance with 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.




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<Page> 10 Joan Podlovits, age 39, has been Controller of PrimeEnergy Management Corporation since
September 2002. She joined Management in July 1989 as a staff accountant. She held the position of
Accounting Manager for Management from April 1994 to August 2002. She is a graduate of Pace
University with a Bachelor of Business Administration degree in Public Accounting. James F. Gilbert, age 72, has been Secretary of Management since June 1990, and has been
Secretary of PrimeEnergy since March 1973, and was a Director of PrimeEnergy from that date to
October 1987. He also serves as Secretary of the operating subsidiaries. He is an attorney in
Dallas, Texas. 
 Item 11. EXECUTIVE COMPENSATION The Partnership has no officers, directors or employees. The officers and employees of the
Managing General Partner and PrimeEnergy perform all management and operational functions of the
Partnership. The Partnership does not pay any direct salaries or other remuneration to the
officers, directors or employees of the Managing General Partner or PrimeEnergy. The Managing
General Partner is reimbursed for the general and administrative expenses of the Partnership, which
are allocated to the Partnership, together with administrative work by third parties limited
annually to 5% of the aggregate capital contribution of the holders of the Partnership Units.
During 2004 and 2003 the allocation of general and administrative expenses to the Partnership was
approximately $100,800 per year. 
 Item 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS The following table shows as of March 15, 2005 the name and address and the number and percent
of Units beneficially and directly owned by each person, entity or group, known to the Partnership
to own more than 5% of the Units. numbername and address of beneficial owner
    
    of units
    
    
    PercentPrimeEnergy Management Corporation
One Landmark Square
Stamford, CT 06901
    
    
    1,176
    
    
    
    7.49
    %PrimeEnergy Corporation
One Landmark Square
Stamford, CT 06901
    
    
    7,367
    
    
    
    46.96
    %




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<Page> 11 
 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. In 2004 Prime
Operating Company was paid well operating fees ranging from about $235 to $652 per month per
well. 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, 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 2004 and 2003, the Partnership
paid an aggregate of $203,475 and $169,220 respectively, in such fees and expenses. 
 Item 14. PRINCIPAL
ACCOUNTING FEES AND SERVICES The Partnership has been charged for audit fees the amounts of $9,500 in 2004 and $9,500 in 2003
for services rendered in connection with the audit of the
Partnerships Financial Statements by
Pustorino, Puglisi & Co. LLP. No tax related or any other fees were
incurred by the Partnership. The Audit Committee of PrimeEnergy Management Corporation, as the
Managing General Partner, approved the fees and independent audit services provide by Pustorino,
Puglisi & Co. LLP. 
 PART IV 
 Item 15. EXHIBITS,
AND FINANCIAL STATEMENT SCHEDULES  The following documents are filed as a part of this Report:  1.
    Financial Statements (Index to the Financial Information at page
F-1)2.
    Financial Statement Schedules:Schedule V Property and Equipment  Oil and Gas Properties
Schedule VI Accumulated Depreciation, Depletion and Amortization  Oil and
Gas Properties3.
    Exhibits:  3
    Form of Agreement of Limited Partnership of
Sterling Drilling Fund 1983-2 (Incorporated by reference to Exhibit (3)
of Sterling Drilling Fund 1983-2 Form 10-K for the year ended December
31, 1994.)23
    Consent of Ryder Scott Company, L.P. (filed herewith)31.1
    302 Certification of Chief Executive Officer (filed herewith)31.2
    302 Certification of Chief Financial Officer (filed herewith)32.1
    Certification of Chief Executive Officer
pursuant to 18.U.S.C. Section 1350, as adopted pursuant to section 906
of the Sarbanes-Oxley Act of 2002. (filed herewith)32.2
    Certification of Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906
of the Sarbanes-Oxley Act of 2002 (filed herewith)




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<Page 12> 
 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the undersigned, there
unto duly authorized, on the 30th day of March, 2005. Sterling Gas Drilling Fund 1982By:
    
    PrimeEnergy Management CorporationManaging General PartnerBy:
    
    /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 30th day of March, 2005. /S/ Charles E. Drimal Jr
    
    Director and President,PrimeEnergy Management CorporationCharles E. Drimal, Jr.The Principal Executive Officer/S/ Beverly A. Cummings
    
    Director and Vice President and Treasurer,PrimeEnergy Management Corporation;Beverly A. CummingsThe Principal Financialand Accounting Officer




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<Page> 13 STERLING DRILLING FUND 1983-2, L.P. (a New York limited partnership) Index to Financial Statements and Schedules Page No.Selected Financial Data

    
    
    F-2Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    F-2Report of Independent
Registered Public Accounting Firm
Financial Statements:
    
    
    F-5Balance Sheets, December 31, 2004 and 2003
    
    
    F-6Statements of Operations for the Years Ended December 31,
2004, 2003 and 2002
    
    
    F-7Statements of Changes in Partners Equity for the Years
Ended December 31, 2004, 2003 and 2002
    
    
    F-8Statements of Cash Flow for the Years Ended December 31,
2004, 2003, and 2002
    
    
    F-9Notes to Financial Statements
    
    
    F-10Schedules:V-
    
    Property and Equipment - Oil and Gas Properties for
the Years Ended December 31, 2004, 2003 and 2002
    
    
    F-18VI-
    
    Accumulated Depreciation, Depletion, and Amortization -
Oil and Gas Properties for the Years Ended December 31,
2004, 2003 and 2002
    
    
    F-19
 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




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<Page> 14 
 Item 6. SELECTED FINANCIAL DATA The following table summarizes certain selected financial data to highlight significant trends
in the Registrants financial condition and results of operations for the periods indicated. The
selected financial data should be read in conjunction with the financial statements and related
notes included elsewhere in this report. Year Ended December 31, (in thousands)2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Revenues
    
    $
    822
    
    
    $
    566
    
    
    $
    469
    
    
    $
    771
    
    
    $
    553Net Income:Limited Partners
    
    
    212
    
    
    
    91
    
    
    
    17
    
    
    
    210
    
    
    
    104General Partners
    
    
    74
    
    
    
    37
    
    
    
    17
    
    
    
    77
    
    
    
    44Per equity unit
    
    
    13.53
    
    
    
    5.77
    
    
    
    1.11
    
    
    
    13.40
    
    
    
    6.61Total assets
    
    
    1,444
    
    
    
    1,260
    
    
    
    1,235
    
    
    
    1,507
    
    
    
    1,321Cash Distributions:Limited Partners
    
    
    78
    
    
    
    78
    
    
    
    235
    
    
    
    78
    
    
    
    39General Partners
    
    
    24
    
    
    
    24
    
    
    
    72
    
    
    
    23
    
    
    
    11Limited partners
as a % of
original
contribution
    
    
    0.50
    %
    
    
    0.50
    %
    
    
    1.50
    %
    
    
    0.50
    %
    
    
    0.25
    %
  Item 7.
    MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS 1. Liquidity: The oil and gas industry is intensely competitive in all its phases. There is
also competition between this industry and other industries in supplying energy and fuel
requirements of industrial and residential consumers. It is not possible for the Registrant to
calculate its position in the industry as the Registrant competes with many other companies having
substantially greater financial and other resources. In accordance with the terms of the Agreement
of Limited Partnership of the Partnership, the General Partners of the Registrant will make cash
distributions of as much of the Partnership cash credited to the capital accounts of the partners
as the General Partners have determined is not necessary or desirable for the payment of any
contingent debts, liabilities or expenses for the conduct of the Partnership business. As of
December 31, 2004, the General partners have distributed $2,299,611 or 14.65%, of original Limited
Partner capital contributions, to the Limited Partners. The net proved oil and gas reserves of the Partnership are considered to be a primary
indicator of financial strength and future liquidity. The present value of unescalated future net
revenues (S.E.C. case) associated with such reserves, discounted at 10% as of December 31, 2003,
was approximately $3,778,960 as compared to the discounted reserves as of December 31, 2004, which
were approximately $4,401,460. Overall reservoir engineering is a subjective process of estimating
underground accumulations of gas and oil that cannot be measured in an exact manner. The estimated
reserve quantities and future income quantities are related to hydrocarbon prices. Therefore,
volumes of reserves actually recovered and amounts of income actually received may differ
significantly from the estimated quantities presented in this report. See Item 1. Business-Oil and
Gas Reserves. F-2




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<Page> 15 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 contractor in
December 1983, for $13,400,000. Pursuant to the terms of this contract fifty-two wells were
drilled resulting in fifty-one producing wells and one dry hole. 3. Results of operations: 2004 compared to 2003 The Partnership gas production increased from 106,203 MCF in 2003 to 115,766 MCF in 2004 with a
price per MCF of $4.90 in 2003 and $6.75 in 2004. There was a decrease oil production from 1,685
barrels in 2003 to 1,076 barrels in 2004. The Partnerships overall operating revenue, excluding
other income, increased from $565,577 in 2003 to $821,656 in 2004. Overall revenue increased due
to increased gas production combined with higher average price received. The gas produced by the
Partnership is currently being sold at spot market prices with the option to lock the rate if it
will be favorable to the Partnership. General and administrative costs decreased slightly from $119,017 in 2003 to $118,781 in 2004.
These amounts reflect managements efforts to limit costs both incurred and allocated to the
Partnership. Management uses in-house resources if these resources will provide efficient and
timely services to the partnership. Amounts in both years are substantially less than the $784,850
allocable to the Partnership under the Partnership Agreement. Interest income fluctuates with changes in the interest rates received as well as the amount
of cash in the bank at any given time. Some production expenses are directly related to production volumes while others are directly
related to repairs, labor, location costs and maintenance of the wells and well sites. The
standard production operating expenses in 2004 were for normal maintenance and upkeep at the wells
and well sites and were reasonable based upon production volumes. The operator completed additional
repairs, used artificial lift equipment and workovers as a means to help maintain production,
increase production, or halt significant declines for a particular well or wells. During 2004
additional repairs were performed on three wells and these costs were included in the overall lease
operating expenses. The Partnerships production expenses increased from $272,237 in 2003 to
$375,230 in 2004. The Partnership records additional depreciation, depletion and amortization to the extent that
the net capitalized costs exceed the undiscounted future net cash flows attributable to the
Partnership. No additional depletion deduction was needed in 2003 or 2004. The overall Partnership
depreciation and depletion expense was consistent with the current basis in the Partnership
properties and the rates applied. F-3




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<Page> 16 2003 compared to 2002 The Partnership gas production declined from 124,178 MCF in 2002 to 106,203 MCF in 2003.
There was a slight increase oil production from 1,335 barrels in 2002 to 1,685 barrels in 2003.
The Partnership average price per MCF received was higher in 2003, from $3.55 in 2002 to $4.90 in
2003. The Partnerships overall operating revenue, excluding other income, increased from $468,803
in 2002 to $565,577 in 2003. In December 2002 the Partnership entered into a contract to sell
approximately seventy-five percent of the amount of its gas sold under a fixed contract price
subject to transportation cost. The remaining gas sold by the Partnership was sold at spot market
prices. This combination allowed the Partnership to sell its gas and avoid some of the more
significant negative swings that could occur in the spot market. A portion of the Partnerships
wells were shut-in during November and December 2003 due to a fire at a compressor plant on one of
the Purchasers transportation lines servicing the Partnership wells. All wells were back on line
as of December 31, 2003 due to the main transport lines being re-routed around the compressor
plant. The Partnership did experience declines in its gas production that can be directly
attributed to this shut-in. The Partnerships overall revenue increased due to the higher prices
received per MCF. Interest income fluctuates with changes in the interest rates received as well as the amount
of cash in the bank at any given time. Some production expenses may be variable in nature. Production volumes or others are directly
related to repairs, labor, location costs and maintenance of the wells and well site. The
production operating expenses in 2003 were for normal maintenance and upkeep at the wells and well
sites and were reasonable based upon production volumes. The Partnerships production expenses
decreased from $282,342 in 2002 to $272,237 in 2003. General and administrative costs decreased slightly from $121,302 in 2002 to $119,017 in 2003.
These amounts reflect managements efforts to limit costs both incurred and allocated to the
Partnership. Management uses in-house resources if it will provide efficient and timely services
to the partnership. Amounts in both years are substantially less than the $784,850 allocable to
the Partnership under the Partnership Agreement. The Partnership records additional depreciation, depletion and amortization to the extent that
the net capitalized costs exceed the undiscounted future net cash flows attributable to the
Partnership. No additional depletion deduction was needed in 2002 or 2003. The overall Partnership
depreciation and depletion expense was consistent with the current basis in the Partnership
properties and the rates applied. F-4




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<Page> 17 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners of
Sterling Drilling Fund 1983-2, L.P.: We have audited the accompanying balance sheets of Sterling Drilling Fund 1983-2, L.P. (a New York
limited partnership) (the Partnership) as of December 31, 2004 and 2003, and the related
statements of operations, changes in partners equity, and cash flows for the years ended December
31, 2004, 2003 and 2002. 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 the standards of the Public Company Accounting Oversight
Board (United States). 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 Drilling Fund
1983-2, L.P. as of December 31, 2004 and 2003, and the results of its operations and cash flows for
the years ended December 31, 2004, 2003 and 2002 in conformity in conformity with U.S generally
accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken
as a whole. The schedules listed in the index to financial statements and schedules are presented
for purposes of complying with the Securities and Exchange Commissions rules and are not part of
the basic financial statements. These schedules have been subjected to the auditing procedures
applied in the examination of the basic financial statements and, in our opinion, fairly state in
all material respects the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole. PUSTORINO, PUGLISI & CO., LLP
New York, New York
March 3, 2005 F-5




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<Page> 18 STERLING DRILLING FUND 1983-2
(a New York limited partnership) BALANCE SHEETS DECEMBER 31, 2004 AND 2003 Assets 2004
    
    
    2003Current Assets:Cash and cash equivalents (Note 2)
    
    $
    362,905
    
    
    $
    270,267Due from affiliates (Note 6)
    
    
    27,762
    
    
    
    9,020Due from others
    
    
    117,342
    
    
    
    Total Current Assets
    
    
    508,009
    
    
    
    279,287Oil and Gas Properties  successful efforts
methods (Note 3) -
Leasehold costs
    
    
    497,639
    
    
    
    497,639Wells and related facilities
    
    
    13,071,867
    
    
    
    13,071,867Total
    
    
    13,569,506
    
    
    
    13,569,506Less  Accumulated depreciation, depletion
and amortization
    
    
    (12,633,285
    )
    
    
    (12,588,547
    )936,221
    
    
    
    980,959Total Assets
    
    $
    1,444,230
    
    
    $
    1,260,246Partners EquityPartners Equity:Limited partners
    
    $
    1,341,508
    
    
    $
    1,207,644General partners
    
    
    102,722
    
    
    
    52,602Total Partners Equity
    
    $
    1,444,230
    
    
    $
    1,260,246
 The Notes to Financial Statements are an integral part of these statements. F-6




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<Page> 19 STERLING DRILLING FUND 1983-2
(a New York limited partnership) STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, 2002 2004
    
    
    2003
    
    
    2002Limited
    
    
    General
    
    
    
    
    
    
    Limited
    
    
    General
    
    
    
    
    
    
    Limited
    
    
    GeneralPartners
    
    
    Partners
    
    
    Total
    
    
    Partners
    
    
    Partners
    
    
    Total
    
    
    Partners
    
    
    Partners
    
    
    TotalRevenue:Operating revenues
    
    $
    628,567
    
    
    $
    193,089
    
    
    $
    821,656
    
    
    $
    432,666
    
    
    $
    132,911
    
    
    $
    565,577
    
    
    $
    358,634
    
    
    $
    110,169
    
    
    $
    468,803Interest
    
    
    2,635
    
    
    
    809
    
    
    
    3,444
    
    
    
    1,626
    
    
    
    500
    
    
    
    2,126
    
    
    
    2,516
    
    
    
    234
    
    
    
    2,750Other revenue (Note
10)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,995
    
    
    
    371
    
    
    
    4,366
    
    
    
    21,819
    
    
    
    6,703
    
    
    
    28,522Total Revenue
    
    
    631,202
    
    
    
    193,898
    
    
    
    825,100
    
    
    
    438,287
    
    
    
    133,782
    
    
    
    572,069
    
    
    
    382,969
    
    
    
    117,106
    
    
    
    500,075Costs and Expenses:Production expenses
    
    
    287,051
    
    
    
    88,179
    
    
    
    375,230
    
    
    
    208,261
    
    
    
    63,976
    
    
    
    272,237
    
    
    
    215,992
    
    
    
    66,350
    
    
    
    282,342Depreciation,
depletion and
amortization
    
    
    40,935
    
    
    
    3,803
    
    
    
    44,738
    
    
    
    48,336
    
    
    
    4,490
    
    
    
    52,826
    
    
    
    56,703
    
    
    
    5,267
    
    
    
    61,970General and
administrative
expenses (Note 7)
    
    
    90,867
    
    
    
    27,914
    
    
    
    118,781
    
    
    
    91,048
    
    
    
    27,969
    
    
    
    119,017
    
    
    
    92,796
    
    
    
    28,506
    
    
    
    121,302Total Expenses
    
    
    418,853
    
    
    
    119,896
    
    
    
    538,749
    
    
    
    347,645
    
    
    
    96,435
    
    
    
    444,080
    
    
    
    365,491
    
    
    
    100,123
    
    
    
    465,614Net Income
    
    $
    212,349
    
    
    $
    74,002
    
    
    $
    286,351
    
    
    $
    90,642
    
    
    $
    37,347
    
    
    $
    127,989
    
    
    $
    17,478
    
    
    $
    16,983
    
    
    $
    34,461Net Income Per
Equity Unit (Note 2)
    
    $
    13.53
    
    
    
    
    
    
    
    
    
    
    $
    5.75
    
    
    
    
    
    
    
    
    
    
    $
    1.11
 The Notes to Financial Statements are integral part of these statements. F-7




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<Page> 20 STERLING DRILLING FUND 1983-2
(a New York limited partnership) STATEMENTS OF CHANGES IN PARTNERS EQUITY FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, 2002 Limited
    
    
    GeneralPartners
    
    
    Partners
    
    
    TotalBalance at December 31, 2001
    
    $
    1,413,464
    
    
    $
    93,799
    
    
    $
    1,507,263Partners contributions
    
    
    
    
    
    
    684
    
    
    
    684Distributions to partners
    
    
    (235,455
    )
    
    
    (72,329
    )
    
    
    (307,784
    )Net Income
    
    
    17,478
    
    
    
    16,983
    
    
    
    34,461Balance at December 31, 2002
    
    
    1,195,487
    
    
    
    39,137
    
    
    
    1,234,624Partners contributions
    
    
    
    
    
    
    228
    
    
    
    228Distributions to partners
    
    
    (78,485
    )
    
    
    (24,110
    )
    
    
    (102,595
    )Net Income
    
    
    90,642
    
    
    
    37,347
    
    
    
    127,989Balance at December 31, 2003
    
    
    1,207,644
    
    
    
    52,602
    
    
    
    1,260,246Partners contributions
    
    
    
    
    
    
    228
    
    
    
    228Distributions to partners
    
    
    (78,485
    )
    
    
    (24,110
    )
    
    
    (102,595
    )Net Income
    
    
    212,349
    
    
    
    74,002
    
    
    
    286,351Balance at December 31, 2004
    
    $
    1,341,508
    
    
    $
    102,722
    
    
    $
    1,444,230
 The Notes to Financial Statements are an integral part of these statements. F-8




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<Page> 21 STERLING DRILLING FUND 1983-2
(a New York limited partnership) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, 2002 2004
    
    
    2003
    
    
    2002Cash Flows From Operating Activities:Net Income
    
    $
    286,351
    
    
    $
    127,989
    
    
    $
    34,461Adjustments to reconcile net income
to net cash provided by
operating activities:Depreciation, depletion and
Amortization
    
    
    44,738
    
    
    
    52,826
    
    
    
    61,970Changes in Assets and Liabilities:(Increase) decrease in due from affiliates
    
    
    (18,742
    )
    
    
    31,041
    
    
    
    (14,328
    )(Increase) decrease in due from others
    
    
    (117,342
    )
    
    
    
    
    
    
    Net Cash Provided by Operating Activities
    
    
    195,005
    
    
    
    211,856
    
    
    
    82,103Cash Flows From Financing Activities:Partners contributions
    
    
    228
    
    
    
    228
    
    
    
    684Distributions to partners
    
    
    (102,595
    )
    
    
    (102,595
    )
    
    
    (307,784
    )Net Cash Used in Financing Activities
    
    
    (102,367
    )
    
    
    (102,367
    )
    
    
    (307,100
    )Net Increase (decrease) in cash and cash
Equivalents
    
    
    92,638
    
    
    
    109,489
    
    
    
    (224,997
    )Cash and cash equivalents, beginning of
Year
    
    
    270,267
    
    
    
    160,778
    
    
    
    385,775Cash and cash equivalents, end of year
    
    $
    362,905
    
    
    $
    270,267
    
    
    $
    160,778
 The Notes to Financial Statements are an integral part of these statements. F-9




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<Page> 22 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (1) Organization and Capital Contributions: Sterling Drilling Fund 1983-2, L.P., a New York limited partnership (the Partnership), was formed
on May 26, 1983 for the primary purpose of acquiring, developing 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), Charles E. Drimal, Jr., Oliver J.
Sterling and Samuel R. Campbell. Fifteen thousand six hundred ninety-seven limited partnership
units, (15,697), were sold at $1,000 per unit aggregating total limited partner contributions of
$15,697,000. The general partners contributions amounted to $1,284,839. Partnership operations
commenced on December 22, 1983. (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. F-10




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<Page> 23 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (2) Summary of Significant
Accounting Policies - (Contd): Oil and Gas Producing Activities: The Partnership accounts for its oil and gas operations using the successful efforts method of
accounting on a property by property basis. The Partnership only participates in developmental
drilling. Accordingly, all costs of drilling and equipping these wells, together with leasehold
acquisition costs, are capitalized. These capitalized costs are amortized on a property by
property basis by the unit-of-production method based upon the ratio of production to proved oil
and gas reserves. Additional depreciation, depletion and amortization may be recorded if net
capitalized costs exceed the undiscounted future net cash flows attributable to Partnership
properties. (See Note 4). Federal Income Taxes: As federal income taxes are the liability of the individual partners, the accompanying
financial statements do not include any provision for federal income taxes. (See Note 8) Limited Partners Loss Per Equity Unit: The limited partners income (loss) per equity unit is computed on the 15,697 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 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 revenues and expenses during the reporting period.
Actual results could differ from those estimates. F-11




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<Page> 24 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (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. The Partnership currently pays royalties of approximately 12.50% to 18.75% of the
selling price of the oil and gas 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, 2004, 2003 and 2002: 2004
    
    
    2003
    
    
    2002Average sales price per MCF of gas
    
    $
    6.75
    
    
    $
    4.90
    
    
    $
    3.55Average sales price per BBL of oil
and other liquids
    
    $
    37.35
    
    
    $
    26.99
    
    
    $
    20.60Production expense per dollar of
operating revenue
    
    $
    0.46
    
    
    $
    0.48
    
    
    $
    0.60
 (4) Quantities of Oil and Gas Reserves: The amount of proved reserves (all of which are developed) presented below has been estimated
by an independent firm of petroleum engineers as of January 1, 2005. Petroleum engineers on the
staff of PEC have also reviewed the data presented below, as of December 31, 2004, for consistency
with current year production and operating history. All of the Partnerships oil and gas reserves
are located within the United States. (Unaudited)GAS (MCF)
    
    
    OIL (BBL)Reserves as of December 31, 2001
    
    
    2,205,102
    
    
    
    21,338Revisions of previous estimates
    
    
    79,695
    
    
    
    (411
    )Production
    
    
    (124,178
    )
    
    
    (1,335
    )Reserves as of December 31, 2002
    
    
    2,160,619
    
    
    
    19,592Revisions of previous estimates
    
    
    71,083
    
    
    
    4,398Production
    
    
    (106,203
    )
    
    
    (1,684
    )Reserves as of December 31, 2003
    
    
    2,125,499
    
    
    
    22,306Revisions of previous estimates
    
    
    223,713
    
    
    
    (2,511
    )Production
    
    
    (115,766
    )
    
    
    (1,076
    )Reserves as of December 31, 2004
    
    
    2,233,446
    
    
    
    18,719
 F-12




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<Page> 25 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (4) Quantities of Oil and
Gas Reserves - (Contd): Should future prices decline, operation of certain wells would become uneconomic, on a pretax
basis, as production levels decline with age. In accordance with the rules and regulations of the
Securities and Exchange Commission, proved reserves exclude production which would be uneconomic. Revisions arise from changes in current prices, as well as engineering and geological data,
which would alter the useful life, and therefore the overall predicted production of each well.
Future changes in these estimates are common and would impact the reserve quantities used to
calculate depreciation, depletion and amortization. As discussed in Note 2, the Partnership may record additional depreciation, depletion and
amortization if net capitalized costs exceed the undiscounted future net cash flows attributable to
Partnership properties. Significant price declines affect estimated future net revenues both
directly and as a consequence of their impact on estimates of future production. The Partnership
has recorded no additional provision for 2004, 2003 and 2002. F-13




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<Page> 26 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (5) Allocation of Partnership Revenues, Costs and Expenses: Under the terms of the Limited Partnership Agreement, all Partnership revenues and expenses,
including deductions attributable thereto, are to be allocated as follows: Limited
    
    
    GeneralPartners
    
    
    PartnersParticipation in Costs:Sales commissions and dealer
manager fees in
excess of the $50,000 paid by PEMC
    
    
    100
    %
    
    
    0
    %Offering costs other than $75,000 paid by the
Partnership and the Sterling Drilling Fund, L.P
    
    
    0
    %
    
    
    100
    %Management fee
    
    
    100
    %
    
    
    0
    %Lease acquisition costs
    
    
    91.5
    %
    
    
    8.5
    %Drilling and completion costs
    
    
    91.5
    %
    
    
    8.5
    %General and administrative expenses
    
    
    76.5
    %
    
    
    23.5
    %Production operators fee
    
    
    76.5
    %
    
    
    23.5
    %Operating expenses
    
    
    76.5
    %
    
    
    23.5
    %All other costs
    
    
    91.5
    %
    
    
    8.5
    %Participation in Revenues:Sale of production
    
    
    76.5
    %
    
    
    23.5
    %Sale of properties
    
    
    91.5
    %
    
    
    8.5
    %Sale of equipment
    
    
    91.5
    %
    
    
    8.5
    %All other revenues
    
    
    91.5
    %
    
    
    8.5
    %
 (6) Transactions With Affiliates:  (a)
    The receivable from affiliates at December 2004 and 2003 represents general and
administrative and certain other expenses incurred on behalf of the Partnership by PEC
and its subsidiaries, and amounts due for production operators fees (Note 6(b)), net
of production revenues collected on behalf of the Partnership.(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 $235 for each producing gas well and $652 for each producing oil or
combination gas and oil well, based on the Partnerships F-14




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<Page> 27 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (6) Transactions With
Affiliates - (Contd):  percentage of working interest in the well. Such fee is subject to annual adjustment
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 2004, 2003 and
2002, $196,848, $148,394, and $119,026, of production operators fees were incurred,
respectively.(c)
    In accordance with the terms of the Partnership Agreement, the general partners
are required to pay 8.5% of drilling and completion costs, lease acquisition costs and
certain other costs, of which 1% will be paid for by the general partners out of
revenues received by them from the Partnership. At December 31, 2004, $22,718 was due
from certain general partners for such costs.(d)
    Eastern Oil Well Services Company (EOWSC), a subsidiary of PEC, provided field
services to the Partnership during the years ending December 31, 2004, 2003, and 2002
for which it was billed $6,627, $20,826, and $27,873, respectively. (7) General and Administrative Expenses: In accordance with the Management Agreement, the general partners will be reimbursed for the
portion of their 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 expenses shall be borne by the general partners in
their individual capacity. During 2004, 2003 and 2002, the Partnership recognized general and administrative expenses
incurred on its behalf by a general partner of $100,800 each year. F-15




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<Page> 28 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (8) Federal Income Taxes: The following is a reconciliation between the net income as reported on the Partnerships
federal income tax return and the net income reported in the accompanying financial statements: Year Ended December 31,2004
    
    
    2003
    
    
    2002Net Income as reported on the
Partnerships federal income tax return
    
    $
    331,089
    
    
    $
    180,815
    
    
    $
    96,431Depreciation, depletion and amortization
for income tax purposes in excess of
(less than) financial reporting amounts
    
    
    (44,738
    )
    
    
    (52,826
    )
    
    
    (61,970
    )Net Income/(Loss) per accompanying
financial statements
    
    $
    286,351
    
    
    $
    127,989
    
    
    $
    34,461
 The tax returns of the Partnership, the qualifications of the Partnership as such for tax
purposes, and the amount of Partnership income or loss are subject to examination by federal and
state taxing authorities. If such examinations result in changes with respect to Partnerships
qualifications or in changes to its income or loss, the tax liability of the partners would be
changed accordingly. F-16




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<Page> 29 STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004, 2003 AND 2002 (9) Major Customers: A schedule of the major purchases of the Partnerships production is as follows: Purchaser
    
    2004
    
    
    2003
    
    
    2002Dominion Field Services
    
    $
    641,447
    
    
    $
    403,586
    
    
    $
    369,055Cabot Oil & Marketing Corporation
    
    $
    130,529
    
    
    $
    110,037
    
    
    $
    66,282Clearfield Appalachian Holdings
    
    $
    40,177
    
    
    $
    45,469
    
    
    $
    27,509
 (10) Other Revenue: In 2003 the Partnerships other income is a result of a cash bonus paid to the partnership for
a three-year farmout agreement. The farmout agreement allows a third party the right to drill a
deep well on leasehold acreage owned by the partnership for a period of three years. If the third
party exercises their rights with in the three years the Partnership could receive an overriding
royalty interest. In 2002 the Partnerships other income is a result of a cash bonus paid to the partnership for
a three-year farmout agreement. The farmout agreement allows a third party the right to drill a
deep well on leasehold acreage owned by the partnership for a period of three years. If the third
party exercises their rights with in the three years the Partnership could receive an overriding
royalty interest. F-17




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<Page> 30 SCHEDULE V STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) PROPERTY AND EQUIPMENT - OIL AND GAS PROPERTIES FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 Balance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BalanceBeginning
    
    
    Additions
    
    
    
    
    
    
    Other
    
    
    at Endof Year
    
    
    at Cost
    
    
    Retirements
    
    
    Changes
    
    
    of YearYear Ended December 31, 2004:Leasehold costs
    
    $
    497,639
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    497,639Wells and related facilities
    
    
    13,071,867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,071,867$
    13,569,506
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    13,569,506Year Ended December 31, 2003:Leasehold costs
    
    $
    497,639
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    497,639Wells and related facilities
    
    
    13,071,867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,071,867$
    13,569,506
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    13,569,506Year Ended December 31, 2002:Leasehold costs
    
    $
    497,639
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    497,639Wells and related facilities
    
    
    13,071,867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,071,867$
    13,569,506
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    13,569,506
 F-18




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<Page> 31 SCHEDULE VI STERLING DRILLING FUND 1983-2, L.P.
(a New York limited partnership) ACCUMULATED DEPRECIATION,
DEPLETION AND AMORTIZATION - OIL AND GAS PROPERTIES FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 Balance at
    
    
    Charges to
    
    
    
    
    
    
    
    
    
    
    BalanceBeginning
    
    
    Costs and
    
    
    
    
    
    
    Other
    
    
    at Endof Year
    
    
    Expenses
    
    
    Retirements
    
    
    Changes
    
    
    of YearYear Ended December 31, 2004:Wells and related facilities
    
    $
    12,097,444
    
    
    $
    44,440
    
    
    $
    
    
    
    $
    
    
    
    $
    12,141,884Leasehold costs
    
    
    491,102
    
    
    
    298
    
    
    
    
    
    
    
    
    
    
    
    491,400$
    12,588,546
    
    
    $
    44,738
    
    
    $
    
    
    
    $
    
    
    
    $
    12,633,284Year Ended December 31, 2003:Wells and related facilities
    
    $
    12,044,970
    
    
    $
    52,474
    
    
    $
    
    
    
    $
    
    
    
    $
    12,097,444Leasehold costs
    
    
    490,750
    
    
    
    352
    
    
    
    
    
    
    
    
    
    
    
    491,102$
    12,535,720
    
    
    $
    52,826
    
    
    $
    
    
    
    $
    
    
    
    $
    12,588,546Year Ended December 31, 2002:Wells and related facilities
    
    $
    11,983,414
    
    
    $
    61,556
    
    
    $
    
    
    
    $
    
    
    
    $
    12,044,970Leasehold costs
    
    
    490,336
    
    
    
    414
    
    
    
    
    
    
    
    
    
    
    
    490,750$
    12,473,750
    
    
    $
    61,970
    
    
    $
    
    
    
    $
    
    
    
    $
    12,535,720
 F-19




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<Page> 32 
 INDEX TO EXHIBITS SequentiallyExhibit
    
    
    
    NumberedNumber
    
    Exhibit
    
    Page(3)
    
    Form Agreement of Limited Partnership of Sterling-Fuel Resources Drilling
Fund 1983-2 (now Sterling Drilling Fund 1983-2, L.P.) (incorporated by
reference to Exhibit (3) of Sterling Gas Drilling Fund 1983-2,L.P., Form
10-K for the year ended December 31, 1994)(23)
    
    Consent of Ryder Scott Company, L.P. (filed herewith)(31.1)
    
    302 Certification of Chief
Executive Officer (filed herewith)(31.2)
    
    302 Certification of Chief
Financial Officer (filed herewith)(32.1)
    
    Certification of Chief Executive Officer pursuant to 18.U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002 (filed herewith)(32.2)
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002 (filed herewith)