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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

/X/ Quarterly Report Pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2001

Transition Report Pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934

For the Transition Period Ended _______________________

Commission File Number 2-84452-01

STERLING DRILLING FUND 1983-2

(Exact name of registrant as specified in charter)

New York

(State or other jurisdiction of corporation or organization)

13-3167551

(IRS employer identification number)

One Landmark Square, Stamford, Connecticut 06901

(Address and Zip Code of principal executive offices)

(203) 358-5700

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes /X/ No / /

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PART I

Item 1. Financial Statements

The following Financial Statements are filed herewith:

Balance Sheets - September 30, 2001 and December 31, 2000.

Statements of Operations for the Nine and Three Months Ended September 30, 2001 and 2000 .

Statements of Changes in Partners' Equity for the Nine and Three Months Ended September 30, 2001 and 2000.

Statements of Cash Flows for the Nine Months Ended September 30, 2001 and 2000.

Note to Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Liquidity -

The oil and gas industry is intensely competitive in all its phases. There is also competition between this industry and other industries in supplying energy and fuel requirements of industrial and residential consumers. It is not possible for the Registrant to calculate its position in the industry as Registrant competes with many other companies having substantially greater financial and other resources. In accordance with the terms of the Prospectus as filed by the Registrant, the General Partners of the Registrant will make cash distributions of as much of the Partnership cash credited to the capital accounts of the Partners as the General Partners have determined is not necessary or desirable for the payment of contingent debts, liabilities or expenses for the conduct of the Partnership's business. As of September 30, 2001, the General Partners have distributed $1,828,700.50 or 11.65% 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, 2000, was approximately $7,413,300 as compared to the discounted reserves as of December 31, 1999, which were approximately $1,368,500 The estimated reserve quantities and future income quantities are related to hydrocarbon prices. Therefore, volumes of reserves actually recovered and amounts of income actually received may differ significantly from the estimated quantities presented in this report.

In accordance with FASB Statement No. 69, December 31, 2000 market prices were determined using the daily oil price or daily gas sales price ("spot price") adjusted for oilfield or gas gathering hub and wellhead price differentials (e.g. grade, transportation, gravity, sulfur, and BS&W) as appropriate. Also, in accordance with SEC and FASB specifications, changes in market prices subsequent to December 31, 2000 were not considered. The spot price for gas at December 31, 2000 was $9.23 per MMBTU. The range of spot prices during the year 2000 was a low of $2.14 and a high of $10.50 and the average was $4.28. The range during the first nine months of 2001 has been from $1.82 to $10.69 with an average of $4.47. The three month average from July to September 2001 was $2.73. The Partnership actually received an average price for gas sold of $5.52 during the first nine months of 2001. The majority of the Partnership's gas revenue is sold under a gas contract which started December 1, 2000 and will end November 30, 2001. The Partnership will have no problem selling its gas after the contract ends, but the gas produced will most likely be sold at a price that reflects the current market conditions.

While it may reasonably be 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.

Capital Resources -

The Registrant was formed for the sole intention of drilling oil and gas wells. The Registrant entered into a drilling contract with an independent contractor in December 1983 for $13,400,000. Pursuant to terms of this contract, fifty-two wells have been drilled resulting in fifty-one producing wells and one dry hole.

During May 2001, PrimeEnergy Management negotiated a Farmout Agreement with Eastern American Energy. (EAE) covering leasehold interests in approximately 5,000 acres in Clay County, West Virginia. Acreage held by Sterling Drilling Fund 1983-2 Limited Partnership has been included in the Farmout Agreement. This agreement provided for a small cash bonus paid at closing and gives EAE the right but not the obligation to select acreage and drill a deep well on the selected acreage, subject to an overriding royalty interest due to the leasehold owners. This agreement closed in May 2001 and will be in effect until May 1, 2003. Sterling Drilling Fund 1983-2's share of the acreage bonus was $16,335. There is no guarantee that EAE will exercise their rights under this agreement.

PrimeEnergy Management is currently negotiating a similar Farmout Agreeement covering approximetly 6,000 acres in Roane County, West Virginia. Partnership acreage may be included in this farmout. If this farmout is not completed PrimeEnergy will attempt to find other parties interested in the Partnership's acreage, however there is no guarantee that a new agreement will be made. This opportunity may come up again over the next few years, PrimeEnergy will continue to purse this type of potential revenue if feasible.

Results of Operations -

The Partnership experienced slight declines in both its gas and oil production, from 107,627 MCF and 1590 BBLS in 2000 to 106,493 MCF and 1,355 BBLS in 2001. The average price per MCF received for gas sold was $3.29 in 2000 and $5.52 in 2001. The Partnership's main income comes from gas production sold but can be influenced by changes to its oil income. The combination of higher average gas prices and stable oil and gas production resulted in an increase in operating revenue $395,942 in 2000 to $620,657 in 2001. The operator determined that supplementary repairs were necessary to maintain various well's production. These repairs include well treatments, miscellaneous part replacements, location work, labor and roadwork to access the well site. These workover expenses totaled $49,630.63 which was included in the current quarter's lease operating total. Overall production costs increased from $172,790 in 2000 to $236,773 in 2001.

The Partnerships other income is a result of a cash bonus paid to the partnership for a two-year farmout agreement. The farmout agreement allows a third party the right to drill a deep well on leasehold acerage owned by the partnership. If the third party exercises their rights with in the two years the Partnership could receive an overriding royalty interest. The amount of the cash bonus paid to the partnership is $16,335.

Management continues to minimize third party costs and use in-house resources to provide efficient and timely services to the Partnership. The related party general and administrative expenses are charged in accordance with guidelines set forth in the Registrant's Management Agreement and are attributable to the affairs and operations of the Partnership and shall not exceed an annual amount equal to 5% of the Limited Partners' capital contributions. Amounts related to both 2000 and 2001 are substantially less than the amounts allocable to the Registrant under the Partnership Agreement.

The Partnership records additional depreciation, depletion and amortization to the extent that net capitalized costs exceed the undiscounted future net cash flows attributable to the Partnership properties. The Partnership was not required to revise the properties basis in 2000 or during the first nine months of 2001. The current depreciation was reasonable based upon the remaining basis in the Partnership properties.

PART II

Items 1 through 5 have been omitted in that each item is either inapplicable or the answer is negative.

Item 6: Exhibits and Reports on Form 8-K

The Partnership was not required to file any reports on Form 8-K and no such form was filed during the period covered by this report.

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S I G N A T U R E S

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

STERLING DRILLING FUND 1983-2

(Registrant)

By: /S/ Charles E. Drimal Jr.

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

Charles E. Drimal, Jr

General Partner

November 8, 2001

(Date)

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Balance Sheets

		September 30, 2001		December 31, 2000
		(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	268,451	$	154,612
Due from affiliates		90,493		38,446
Due from others		0		0
		-------------		-------------
Total current assets		358,944		193,058
		------------		-------------
Oil and gas properties - successful efforts method
Leasehold costs		497,639		497,639
Well and related facilities		13,034,260		13,034,260
less accumulated depreciation, depletion and
Amortization		(12,454,348)		(12,403,819)
		---------------		---------------
		1,077,551		1,128,080
		---------------		---------------
Total assets	$	1,436,495	$	1,321,138
		=========		=========
Partners' equity
Limited partners	$	1,364,430	$	1,281,564
General partners		72,065		39,574
		---------------		---------------
Total partners' equity	$	1,436,495	$	1,321,138
		=========		=========

See accompanying note to financial statements.

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Statement of Operations

(unaudited)

Nine Months Ending

September 30, 2001

		Limited Partners	General Partners		Total
Revenue:
Operating revenue	$	474,803	145,854	$	620,657
Interest income		5,453	507		5,960
Other income		14,947	1,388		16,335
		-----------	-----------		-----------
Total Revenue		495,203	147,749		642,952
		-----------	-----------		-----------

Costs and Expenses:
Production expense		219,189	67,332		286,521
General and administrative to a related party		57,834	17,766		75,600
General and administrative		10,596	3,255		13,851
Depreciation, depletion and amortization		46,233	4,295		50,528
		-----------	-----------		-----------
Total Costs and Expenses		333,852	92,648		426,500
		-----------	-----------		-----------
Net Income	$	161,351	55,101	$	216,452
		=======	=======		=======
Net Income per equity unit	$	10.28
		=======

See accompanying note to financial statements.

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Statement of Operations

(unaudited)

Nine Months Ending

September 30, 2000

		Limited Partners	General Partners		Total
Revenue:
Operating revenue	$	302,896	93,046	$	395,942
Interest income		3,472	323		3,795
		-----------	-----------		-----------
Total Revenue		306,368	93,369		399,737
		-----------	-----------		-----------

Costs and Expenses:
Production expense		132,184	40,606		172,790
General and administrative to a related party		57,373	17,624		74,997
General and administrative		14,619	4,491		19,110
Depreciation, depletion and amortization		44,786	4,160		48,946
		-----------	-----------		-----------
Total Costs and Expenses		248,962	66,881		315,843
		-----------	-----------		-----------
Net Income/	$	57,406	26,488	$	83,894
		=======	=======		=======
Net Income per equity unit	$	3.66
		=======

See accompanying note to financial statements.

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Statement of Operations

(unaudited)

Three Months Ending

September 30, 2001

		Limited Partners	General Partners		Total
Revenue:
Operating revenue	$	130,820	40,186	$	171,006
Interest income		1,623	151		1,774
		---------	--------		--------
Total Revenue		132,443	40,337		172,780
		---------	--------		--------

Costs and Expenses:
Production expense		79,110	24,302		103,412
General and administrative to a related party		19,278	5,922		25,200
General and administrative		4,312	1,324		5,636
Depreciation, depletion and amortization		15,411	1,431		16,842
		---------	--------		--------
Total Costs and Expenses		118,111	32,979		151,091
		---------	--------		--------
Net Income	$	14,332	7,358	$	21,689
		=======	======		======
Net Income per equity unit	$	.91
		=======

See accompanying note to the financial statements.

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Statement of Operations

(unaudited)

Three Months Ending

September 30, 2000

		Limited Partners	General Partners		Total
Revenue:
Operating revenue	$	92,990	28,565	$	121,555
Interest income		1,083	101		1,184
		---------	--------		--------
Total Revenue		94,073	28,666		122,739
		---------	--------		--------

Costs and Expenses:
Production expense		39,943	12,270		52,213
General and administrative to a related party		19,125	5,874		24,999
General and administrative		(126)	(39)		(165)
Depreciation, depletion and amortization		14,930	1,386		16,316
		---------	--------		--------
Total Costs and Expenses		73,872	19,491		93,363
		---------	--------		--------
Net Income	$	20,201	9,175	$	29,376
		======	======		======
Net Income per equity unit	$	1.29
		======

See accompanying note to the financial statements.

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Statement of Changes in Partners' Equity

(unaudited)

Nine Months Ending

September 30, 2001

		Limited Partners	General Partners		Total

Balance at beginning of period	$	1,281,564	39,574	$	1,321,138
Partner's Contributions		0	225		225
Cash Distributions		(78,485)	(22,835)		(101,320)
Net Income		161,351	55,101		216,452
		------------	-----------		-----------
Balance at end of period	$	1,364,430	72,065	$	1,436,495
		=======	=======		=======

Nine Months Ending

September 30, 2000

		Limited Partners	General Partners			Total

Balance at beginning of period	$	1,216,998	6,741	$		1,223,739
Partner's Contributions		0	113			113
Cash Distributions		(39,242)	(11,466)			(50,708)
Net Income		57,406	26,488			83,894
		------------	------------			------------
Balance at end of period	$	1,235,162	21,876		$	1,257,038
		=======	=======			========

See accompanying note to the financial statements.

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Statement of Changes in Partners' Equity

(unaudited)

Three Months Ending

September 30, 2001

		Limited Partners	General Partners		Total

Balance at beginning of period	$	1,350,098	64,707	$	1,414,805
Partners' Contribution
Net Income		14,332	7,358		21,689
		------------	------------		------------
Balance at end of period	$	1,364,430	72,065	$	1,436,495
		=======	=======		=======

Three Months Ending

September 30, 2000

		Limited Partners	General Partners		Total

Balance at beginning of period	$	1,214,961	12,588	$	1,227,549
Partners' Contribution		0	113		113
Net Income		20,201	9,175		29,376
		------------	------------		------------
Balance at end of period	$	1,235,162	21,876	$	1,257,038
		=======	=======		=======

See accompanying note to the financial statements.

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STERLING DRILLING FUND 1983-2

(a New York Limited Partnership)

Statement of Cash Flows

(unaudited)

		Nine months Ended September 30, 2001		Nine months Ended September 30, 2000

Net cash provided by(used in) operating activities	$	214,934	$	128,886
		----------		----------

Cash flows from financing activities:
Partners contributions		225		113
Distribution to partners		(101,320)		(50,708)
		----------		----------
Net cash used in financing activities		(101,095)		(50,595)
		----------		----------
Cash flows from investing activities:
Investments in wells and well
Related facilities		0		(42,954)
		----------		----------
		0
Net cash (used by) investing activities				(42,954)
		----------		----------

Net increase (decrease) in cash and cash equivalents		113,839		35,337
Cash and cash equivalents at beginning of period		154,612		75,872
		----------		----------
Cash and cash equivalents at end of period	$	268,451	$	111,209
		======		======

See accompanying note to financial statements.

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STERLING DRILLING FUND 1983-2

(a New York limited partnership)

Note to Financial Statements

September 30, 2001

1. The accompanying statements for the period ending September 30, 2001, are unaudited but reflect all adjustments necessary to present fairly the results of operations.

STERLING DRILLING FUND 1983-2 10-Q