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 June 30, 1995

                             or

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

For the Transition Period Ended ______________________

                    Commission File Number 0-10501


               STERLING GAS DRILLING FUND 1981
     (Exact name of registrant as specified in charter)

                          New York
      (State or other jurisdiction of incorporation or
                        organization)
                              
                         13-3098770
            (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   / /
Item 1.   Financial Statements

The following Financial Statements are filed herewith:

Balance Sheets - June 30, 1995 and December 31, 1994.

Statements of Operations for the Six and Three Months Ended June 30, 1995
and 1994.

Statements of Changes in Partners' Equity for the Six and Three Months
Ended June 30, 1995 and 1994.

Statements of Cash Flows for the Six Months Ended June 30, 1995 and 1994.

Note to Financial Statements


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

1.   Liquidity -

The oil and gas industry is intensely competitive in all its phases.
There is also competition among 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, 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 or for
the conduct of the Partnership's business.  As of June 30, 1995, the
General Partners have distributed to the Limited Partners $3,955,500.
Such cash distributions are equivalent to 45 % of original total
limited Partner capital contributions.
Columbia Gas Transmission Corp., a contract purchaser of the
Registrant's gas, filed a Chapter 11 petition in U.S. Bankruptcy Court
in Wilmington Delaware on July 31, 1991.  At that time, the Bankruptcy
Court released Columbia from any current contracts.  The Registrant
has filed a claim with the Bankruptcy Court to recover revenue
suspended at the time bankruptcy occurred.  Such amounts were not
recorded as revenue during the applicable period, therefore, no loss
contingency exists.  The Registrant has reviewed and accepted a
tentative settlement offer made by Columbia.  The Registrant is
hopeful that Columbia will make a final settlement within the next
twelve months.
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 (SEC case)
associated with such reserves, discounted at 10% as of December 31,
1994 was approximately $703,000.
2.  Capital Resources -

The Registrant was formed for the sole purpose of drilling oil and gas
wells. The Registrant entered into a drilling contract with an
independent contractor in December 1981 for $6,900,000.  Pursuant to
the terms of this contract, wells have been drilled resulting in
thirty-seven producing wells, three non commercial wells and one
plugged well.   The Registrant has had a reserve report prepared which
details reserve value information, and such information is available
to the Limited Partners pursuant to the buy-out provisions of the
Prospectus as previously filed.

3.   Results of Operations -
Operating Revenues increased from $122,147 in 1995 to $130,526 in
1995.  The gas production increase, from 45,194 MCF in 1995 to 47,265
MCF in 1995, was partially offset by lower  average price per MCF from
$2.83 in 1995 to $2.55 in 1995. Changes in purchaser's main line
pressures contributed to easier gas flow and increased production. Oil
production combined with higher prices per barrel in 1995 resulted in
increased oil revenue. Production expenses decreased from $57,878 in
1994 to $46,378 in 1995. In 1994 additional location and road repairs
were needed due to freezing and flooding which occurred throughout the
winter production periods.

General and administrative expenses have been segregated on the
financial statements to show expenses paid to PrimeEnergy Management
Corporation, a general partner.  These expenses are charged in
accordance with guidelines set forth in the Registrant's Management
Agreement.  The expenses attributable to the affairs and operations of
the Partnership, reimbursed to PEMC, shall not exceed an annual amount
equal to 5% of the limited partners capital contributions. Amounts
related to both 1995 and 1994 are substantially less than the amounts
allocable to the Registrant under the Partnership Agreement.  The
lower amounts reflect management's effort's to limit costs, both
incurred and allocated to the Registrant. Management continues to
reduce third party costs and use in-house resources to provide
efficient and timely services to the partnership.



The partnership records additional depreciation, depletion and
amortization to the extent that net capitalized costs exceed the
undiscounted future net cash flows attributable to the partnership
properties. A downward revision in reserve estimates due to lower year-
end gas prices in 1994 resulted in an additional charge of $250,000.
The lower depletion expense in 1995 is due to lower depletable cost
basis in oil and gas properties.

4. Other-
In, March, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," (SFAS No. 121)
which is effective for the fiscal years beginning after December 15, 1995.  
This statement establishes accounting standards for the impairment of long-
lived assets, requiring such assets to be reported at the lower of carrying
amount or fair value, less selling costs.  The statement amends SFAS No. 19, 
"Financial Accounting and Reporting by Oil and Gas Producing Companies"
by adding an impairment test for proved properties in accordance with 
SFAS No. 121.

The Resistrant currently performs a "ceiling test" by comparing the total
carrying value of oil and gas properties to the total future net cash flows
from the estimated production of proved oil and gas properties.  The effect
of SFAS No. 121, which would change the way the test is performed, is not
known at this time.

PART II

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

Exhibit 27 - Financial Data Schedule is attached to the electronic
filing of this report.



                          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 GAS DRILLING FUND 1981
August 10, 1995        BY: /S/Charles E. Drimal, Jr.
(DATE)                     Charles E.Drimal, Jr.   
                           General Partner




                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                            Balance Sheets
                              (unaudited)
                                        June 30,      December 31,
                                          1995            1994
Assets                                                             
Current Assets:                                                    
  Cash and cash equivalents           $         97  $            43
  Due from others                           23,199               --
                                        ----------      -----------
      Total current assets                  23,296               43
                                                                   
Oil and Gas properties -                                           
successful efforts method:                                         
  Leasehold costs                          236,502          236,502
  Well and related facilities            6,938,085        6,938,085
   less accumulated                                                
   depreciation,depletion and                                      
   amortization                         (5,836,108)      (5,785,763)
                                        ----------       ----------
                                         1,338,479        1,388,824
                                        ----------       ----------
       Total assets                   $  1,361,775  $     1,388,867
                                                            
Liabilities and Partners' Equity                            
  Current liabilities:                                      
   Due to affiliates                  $    253,651  $       252,719
                                        ----------       ----------
        Total current liabilities          253,651          252,719
                                        ----------       ----------
                                                                   
  Partners' Equity                                                 
   Limited partners                      1,230,913        1,261,971
   General partners                       (122,789)        (125,823)
                                        ----------       ----------
         Total partners' equity          1,108,124        1,366,148
                                        ----------       ----------
                                                                   
         Total liabilities and                                     
          partners' equity            $  1,361,775  $     1,388,867
                                        ==========       ==========
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                   Six Months Ending
                                     June 30, 1995

                               Limited     General     
                               Partners    Partners         Total
Revenue:                                               
Operating revenue           $    109,838 $    20,688 $    130,526
                                --------    --------      -------
  Total Revenue                  109,838      20,688      130,526
                                --------    --------      -------
                                                       
Costs and Expenses:                                    
Production expense                39,027       7,351       46,378
General and administrative        42,073       7,925       49,998
 to a related party
General and administrative         9,954       1,875       11,829
Depreciation, depletion                                          
 and amortization                 49,842         503       50,345
                                --------    --------      -------
  Total Costs and Expenses       140,896      17,654      158,550
                                --------    --------      -------
  Net Income(loss)          $    (31,058)  $  3,034   $   (28,024)
                                ========    ========      =======
Net Income(loss)                                                 
    per equity unit         $     (3.53)                         
                                  ======                         
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                   Six Months Ending
                                     June 30, 1994

                                Limited     General         
                                Partners    Partners      Total
Revenue:                                                
Operating revenue           $     102,787 $   19,360  $   122,147
                                ---------   --------    ---------
  Total Revenue                   102,787     19,360      122,147
                                ---------   --------    ---------
                                                        
Costs and Expenses:                                     
Production expense                 48,704      9,174       57,878
General and administrative                                       
 to a related party                48,470      9,130       57,600
General and administrative          8,335      1,570        9,905
Depreciation, depletion                                          
 and amortization                  54,401        550       54,951
                                  -------    -------    ---------
  Total Costs and Expenses        159,911     20,423      180,334
                                  -------    -------    ---------
  Net Income(loss)          $     (57,125) $  (1,062)  $  (58,187)
                                =========    ========    =========
Net Income(loss)                                        
    per equity unit         $       (6.50)               
                                =========                
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                  Three Months Ending
                                     June 30, 1995

                               Limited     General                  
                               Partners    Partners            Total
Revenue:                                                
Operating revenue            $    48,179 $     9,074  $       57,253
                                --------    --------       ---------
  Total Revenue                   48,179       9,074          57,253
                                --------    --------       ---------
                                                                    
Costs and Expenses:                                                 
Production expense                22,302       4,201          26,503
General and administrative                                          
 to a related party               21,036       3,963          24,999
General and administrative         6,440       1,213           7,653
Depreciation, depletion                                             
 and amortization                 24,992         251          25,173
                                --------    --------       ---------
  Total Costs and Expenses        74,700       9,628          84,328
                                --------    --------       ---------
  Net Income(loss)           $   (26,521) $     (554) $      (27,075)
                                ========    ========        =========
Net Income(loss)                                                    
    per equity unit          $     (3.02)
                                 ========                            
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                  Three Months Ending
                                     June 30, 1994

                               Limited     General     
                               Partners    Partners    Total
Revenue:                                               
Operating revenue           $     47,349 $     8,918 $       56,267
                                --------    --------    -----------
  Total Revenue                   47,349       8,918         56,267
                                --------    --------    -----------
                                                       
Costs and Expenses:                                    
Production expense                24,261       4,570         28,831
General and administrative        24,235       4,565         28,800
 to a related party
General and administrative         5,157         971          6,128
Depreciation, depletion           27,200         275         27,475
 and amortization
                                --------    --------    -----------
  Total Costs and Expenses        80,853      10,381         91,234
                                --------    --------    -----------
  Net Income(loss)          $    (33,505)  $  (1,462) $     (34,967)
                                ========    ========    ===========
Net Income(loss)                                                   
    per equity unit         $      (3.81)
                                   ======                           


                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
               Statement of Changes in Partners' Equity
                              (unaudited)
                                   
                                    Six Months Ended
                                     June 30, 1995


                               Limited     General                   
                               Partners    Partners             Total
                                                         
Balance at beginning of                                               
period                      $  1,261,971 $  (125,823)  $    1,136,148
Net Income(Loss)                 (31,058)     3,3034          (28,024)
                               ---------    --------       -----------
Balance at end of period       1,230,913    (122,789)       1,108,124
                               =========    ========       ===========
                                            
                                            
                                    Six Months Ended
                                     June 30, 1994

                              Limited      General                    
                              Partners     Partners              Total
                                                                      
Balance at beginning of                                              
period                      $  1,641,938 $    (120,979)  $  1,520,959
  Net Income(Loss)               (57,123)       (1,064)       (58,187)
                               ---------      --------      ----------
Balance at end of period       1,584,815      (122,043)     1,462,772
                               =========      ========      ==========
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
               Statement of Changes in Partners' Equity
                              (unaudited)
                                   
                                   Three Months Ended
                                     June 30, 1995


                               Limited      General                    
                               Partners     Partners              Total
                                                                       
Balance at beginning of                                                
period                      $   1,257,434 $   (122,235) $     1,135,199
  Net Income(Loss)                (26,521)        (554)         (27,075)
                                 --------     --------       ----------
Balance at end of period        1,230,913     (122,789)       1,108,124
                                 ========     ========       ==========
                                            
                                            
                                   Three Months Ended
                                     June 30, 1994

                              Limited      General         
                              Partners     Partners        Total
                                                           
Balance at beginning of                                               
period                      $  1,618,319 $  (120,580)   $    1,497,739
                                                                       
  Net Income(Loss)               (33,504)     (1,463)         (34,967)
                               ---------    --------         ----------
Balance at end of period       1,584,815    (122,043)        1,462,772
                               =========   =========         ==========
                                                           
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Cash Flows
                              (unaudited)
                                   
                                        Six months     Six months
                                          ended           ended
                                         June 30,       June 30,
                                           1995           1994
                                                                  
Net cash provided by operating                   54             43
activities
                                         ----------     ----------
Net increase(decrease) in cash and                                
  cash equivalents                               54             43
Cash and cash equivalents at                                      
beginning of period                              43             30
                                         ----------     ----------
Cash and cash equivalents at end of  $           97 $           73
period
                                         ==========     ==========

see accompanying note to financials


                     STERLING GAS DRILLING FUND 1981
                     (a New York limited partnership)
                       Note to Financial Statements
                             June 30, 1995

1.   The accompanying statements for the period ending June 30, 1995
are unaudited but reflect all reflect the adjustments necessary to
present fairly the results of operations.  Certain reclassifications
were made to the prior periods' financial statements to conform to the
current period presentation.
[{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 23962}]
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 June 30, 1995

                             or

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

For the Transition Period Ended ______________________

                    Commission File Number 0-10501

               STERLING GAS DRILLING FUND 1981
     (Exact name of registrant as specified in charter)

                          New York
      (State or other jurisdiction of incorporation or
                        organization)
                              
                         13-3098770
            (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   / /
Item 1.   Financial Statements

The following Financial Statements are filed herewith:

Balance Sheets - June 30, 1995 and December 31, 1994.

Statements of Operations for the Six and Three Months Ended June 30, 1995
and 1994.

Statements of Changes in Partners' Equity for the Six and Three Months
Ended June 30, 1995 and 1994.

Statements of Cash Flows for the Six Months Ended June 30, 1995 and 1994.

Note to Financial Statements

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

1.   Liquidity -

The oil and gas industry is intensely competitive in all its phases.
There is also competition among 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, 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 or for
the conduct of the Partnership's business.  As of June 30, 1995, the
General Partners have distributed to the Limited Partners $3,955,500.
Such cash distributions are equivalent to 45 % of original total
limited Partner capital contributions.
Columbia Gas Transmission Corp., a contract purchaser of the
Registrant's gas, filed a Chapter 11 petition in U.S. Bankruptcy Court
in Wilmington Delaware on July 31, 1991.  At that time, the Bankruptcy
Court released Columbia from any current contracts.  The Registrant
has filed a claim with the Bankruptcy Court to recover revenue
suspended at the time bankruptcy occurred.  Such amounts were not
recorded as revenue during the applicable period, therefore, no loss
contingency exists.  The Registrant has reviewed and accepted a
tentative settlement offer made by Columbia.  The Registrant is
hopeful that Columbia will make a final settlement within the next
twelve months.
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 (SEC case)
associated with such reserves, discounted at 10% as of December 31,
1994 was approximately $703,000.
2.  Capital Resources -

The Registrant was formed for the sole purpose of drilling oil and gas
wells. The Registrant entered into a drilling contract with an
independent contractor in December 1981 for $6,900,000.  Pursuant to
the terms of this contract, wells have been drilled resulting in
thirty-seven producing wells, three non commercial wells and one
plugged well.   The Registrant has had a reserve report prepared which
details reserve value information, and such information is available
to the Limited Partners pursuant to the buy-out provisions of the
Prospectus as previously filed.

3.   Results of Operations -
Operating Revenues increased from $122,147 in 1995 to $130,526 in
1995.  The gas production increase, from 45,194 MCF in 1995 to 47,265
MCF in 1995, was partially offset by lower  average price per MCF from
$2.83 in 1995 to $2.55 in 1995. Changes in purchaser's main line
pressures contributed to easier gas flow and increased production. Oil
production combined with higher prices per barrel in 1995 resulted in
increased oil revenue. Production expenses decreased from $57,878 in
1994 to $46,378 in 1995. In 1994 additional location and road repairs
were needed due to freezing and flooding which occurred throughout the
winter production periods.

General and administrative expenses have been segregated on the
financial statements to show expenses paid to PrimeEnergy Management
Corporation, a general partner.  These expenses are charged in
accordance with guidelines set forth in the Registrant's Management
Agreement.  The expenses attributable to the affairs and operations of
the Partnership, reimbursed to PEMC, shall not exceed an annual amount
equal to 5% of the limited partners capital contributions. Amounts
related to both 1995 and 1994 are substantially less than the amounts
allocable to the Registrant under the Partnership Agreement.  The
lower amounts reflect management's effort's to limit costs, both
incurred and allocated to the Registrant. Management continues to
reduce third party costs and use in-house resources to provide
efficient and timely services to the partnership.

The partnership records additional depreciation, depletion and
amortization to the extent that net capitalized costs exceed the
undiscounted future net cash flows attributable to the partnership
properties. A downward revision in reserve estimates due to lower year-
end gas prices in 1994 resulted in an additional charge of $250,000.
The lower depletion expense in 1995 is due to lower depletable cost
basis in oil and gas properties.

4. Other-
In, March, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," (SFAS No. 121)
which is effective for the fiscal years beginning after December 15, 1995.  
This statement establishes accounting standards for the impairment of long-
lived assets, requiring such assets to be reported at the lower of carrying
amount or fair value, less selling costs.  The statement amends SFAS No. 19, 
"Financial Accounting and Reporting by Oil and Gas Producing Companies"
by adding an impairment test for proved properties in accordance with 
SFAS No. 121.

The Resistrant currently performs a "ceiling test" by comparing the total
carrying value of oil and gas properties to the total future net cash flows
from the estimated production of proved oil and gas properties.  The effect
of SFAS No. 121, which would change the way the test is performed, is not
known at this time.

PART II

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

Exhibit 27 - Financial Data Schedule is attached to the electronic
filing of this report.

                          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 GAS DRILLING FUND 1981
August 10, 1995        BY: /S/Charles E. Drimal, Jr.
(DATE)                     Charles E.Drimal, Jr.   
                           General Partner

                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                            Balance Sheets
                              (unaudited)
                                        June 30,      December 31,
                                          1995            1994
Assets                                                             
Current Assets:                                                    
  Cash and cash equivalents           $         97  $            43
  Due from others                           23,199               --
                                        ----------      -----------
      Total current assets                  23,296               43
                                                                   
Oil and Gas properties -                                           
successful efforts method:                                         
  Leasehold costs                          236,502          236,502
  Well and related facilities            6,938,085        6,938,085
   less accumulated                                                
   depreciation,depletion and                                      
   amortization                         (5,836,108)      (5,785,763)
                                        ----------       ----------
                                         1,338,479        1,388,824
                                        ----------       ----------
       Total assets                   $  1,361,775  $     1,388,867
                                                            
Liabilities and Partners' Equity                            
  Current liabilities:                                      
   Due to affiliates                  $    253,651  $       252,719
                                        ----------       ----------
        Total current liabilities          253,651          252,719
                                        ----------       ----------
                                                                   
  Partners' Equity                                                 
   Limited partners                      1,230,913        1,261,971
   General partners                       (122,789)        (125,823)
                                        ----------       ----------
         Total partners' equity          1,108,124        1,366,148
                                        ----------       ----------
                                                                   
         Total liabilities and                                     
          partners' equity            $  1,361,775  $     1,388,867
                                        ==========       ==========
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                   Six Months Ending
                                     June 30, 1995

                               Limited     General     
                               Partners    Partners         Total
Revenue:                                               
Operating revenue           $    109,838 $    20,688 $    130,526
                                --------    --------      -------
  Total Revenue                  109,838      20,688      130,526
                                --------    --------      -------
                                                       
Costs and Expenses:                                    
Production expense                39,027       7,351       46,378
General and administrative        42,073       7,925       49,998
 to a related party
General and administrative         9,954       1,875       11,829
Depreciation, depletion                                          
 and amortization                 49,842         503       50,345
                                --------    --------      -------
  Total Costs and Expenses       140,896      17,654      158,550
                                --------    --------      -------
  Net Income(loss)          $    (31,058)  $  3,034   $   (28,024)
                                ========    ========      =======
Net Income(loss)                                                 
    per equity unit         $     (3.53)                         
                                  ======                         
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                   Six Months Ending
                                     June 30, 1994

                                Limited     General         
                                Partners    Partners      Total
Revenue:                                                
Operating revenue           $     102,787 $   19,360  $   122,147
                                ---------   --------    ---------
  Total Revenue                   102,787     19,360      122,147
                                ---------   --------    ---------
                                                        
Costs and Expenses:                                     
Production expense                 48,704      9,174       57,878
General and administrative                                       
 to a related party                48,470      9,130       57,600
General and administrative          8,335      1,570        9,905
Depreciation, depletion                                          
 and amortization                  54,401        550       54,951
                                  -------    -------    ---------
  Total Costs and Expenses        159,911     20,423      180,334
                                  -------    -------    ---------
  Net Income(loss)          $     (57,125) $  (1,062)  $  (58,187)
                                =========    ========    =========
Net Income(loss)                                        
    per equity unit         $       (6.50)               
                                =========                
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                  Three Months Ending
                                     June 30, 1995

                               Limited     General                  
                               Partners    Partners            Total
Revenue:                                                
Operating revenue            $    48,179 $     9,074  $       57,253
                                --------    --------       ---------
  Total Revenue                   48,179       9,074          57,253
                                --------    --------       ---------
                                                                    
Costs and Expenses:                                                 
Production expense                22,302       4,201          26,503
General and administrative                                          
 to a related party               21,036       3,963          24,999
General and administrative         6,440       1,213           7,653
Depreciation, depletion                                             
 and amortization                 24,992         251          25,173
                                --------    --------       ---------
  Total Costs and Expenses        74,700       9,628          84,328
                                --------    --------       ---------
  Net Income(loss)           $   (26,521) $     (554) $      (27,075)
                                ========    ========        =========
Net Income(loss)                                                    
    per equity unit          $     (3.02)
                                 ========                            
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Operations
                              (unaudited)
                                   
                                  Three Months Ending
                                     June 30, 1994

                               Limited     General     
                               Partners    Partners    Total
Revenue:                                               
Operating revenue           $     47,349 $     8,918 $       56,267
                                --------    --------    -----------
  Total Revenue                   47,349       8,918         56,267
                                --------    --------    -----------
                                                       
Costs and Expenses:                                    
Production expense                24,261       4,570         28,831
General and administrative        24,235       4,565         28,800
 to a related party
General and administrative         5,157         971          6,128
Depreciation, depletion           27,200         275         27,475
 and amortization
                                --------    --------    -----------
  Total Costs and Expenses        80,853      10,381         91,234
                                --------    --------    -----------
  Net Income(loss)          $    (33,505)  $  (1,462) $     (34,967)
                                ========    ========    ===========
Net Income(loss)                                                   
    per equity unit         $      (3.81)
                                   ======                           

                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
               Statement of Changes in Partners' Equity
                              (unaudited)
                                   
                                    Six Months Ended
                                     June 30, 1995

                               Limited     General                   
                               Partners    Partners             Total
                                                         
Balance at beginning of                                               
period                      $  1,261,971 $  (125,823)  $    1,136,148
Net Income(Loss)                 (31,058)     3,3034          (28,024)
                               ---------    --------       -----------
Balance at end of period       1,230,913    (122,789)       1,108,124
                               =========    ========       ===========
                                            
                                            
                                    Six Months Ended
                                     June 30, 1994

                              Limited      General                    
                              Partners     Partners              Total
                                                                      
Balance at beginning of                                              
period                      $  1,641,938 $    (120,979)  $  1,520,959
  Net Income(Loss)               (57,123)       (1,064)       (58,187)
                               ---------      --------      ----------
Balance at end of period       1,584,815      (122,043)     1,462,772
                               =========      ========      ==========
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
               Statement of Changes in Partners' Equity
                              (unaudited)
                                   
                                   Three Months Ended
                                     June 30, 1995

                               Limited      General                    
                               Partners     Partners              Total
                                                                       
Balance at beginning of                                                
period                      $   1,257,434 $   (122,235) $     1,135,199
  Net Income(Loss)                (26,521)        (554)         (27,075)
                                 --------     --------       ----------
Balance at end of period        1,230,913     (122,789)       1,108,124
                                 ========     ========       ==========
                                            
                                            
                                   Three Months Ended
                                     June 30, 1994

                              Limited      General         
                              Partners     Partners        Total
                                                           
Balance at beginning of                                               
period                      $  1,618,319 $  (120,580)   $    1,497,739
                                                                       
  Net Income(Loss)               (33,504)     (1,463)         (34,967)
                               ---------    --------         ----------
Balance at end of period       1,584,815    (122,043)        1,462,772
                               =========   =========         ==========
                                                           
                      STERLING DRILLING FUND 1981
                   (a New York Limited Partnership)
                        Statement of Cash Flows
                              (unaudited)
                                   
                                        Six months     Six months
                                          ended           ended
                                         June 30,       June 30,
                                           1995           1994
                                                                  
Net cash provided by operating                   54             43
activities
                                         ----------     ----------
Net increase(decrease) in cash and                                
  cash equivalents                               54             43
Cash and cash equivalents at                                      
beginning of period                              43             30
                                         ----------     ----------
Cash and cash equivalents at end of  $           97 $           73
period
                                         ==========     ==========

see accompanying note to financials

                     STERLING GAS DRILLING FUND 1981
                     (a New York limited partnership)
                       Note to Financial Statements
                             June 30, 1995

1.   The accompanying statements for the period ending June 30, 1995
are unaudited but reflect all reflect the adjustments necessary to
present fairly the results of operations.  Certain reclassifications
were made to the prior periods' financial statements to conform to the
current period presentation.