-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D1/q/7pWVqp0j7KJt1Jp0y9Kh5AL13koPPCIYxwqakAUwm5JoABZM26sDigRLwOi TDHDelPRBkL1QsVkHTZTLw== 0000950116-02-001103.txt : 20020515 0000950116-02-001103.hdr.sgml : 20020515 ACCESSION NUMBER: 0000950116-02-001103 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLAS ENERGY FOR NINETIES PUBLIC NO 8 LTD CENTRAL INDEX KEY: 0001088451 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 251836294 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 333-82389 FILM NUMBER: 02648086 BUSINESS ADDRESS: STREET 1: 311 ROUSER RD CITY: MOON TOWNSHIP STATE: PA ZIP: 15108 BUSINESS PHONE: 4122622830 MAIL ADDRESS: STREET 1: 311 ROUSER RD CITY: MOON TOWNSHIP STATE: PA ZIP: 15108 10QSB 1 tenqsb.txt FORM 10QSB U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2002 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the transition period from _______ to _______ Commission file number 333-82389 Atlas-Energy for the Nineties-Public #8 Ltd. ---------------------------------------------- (Name of small business issuer in its charter) Pennsylvania 25-1836294 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 311 Rouser Road Moon Township, PA 15108 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) Issuer's telephone number, including area code: (412) 262-2830 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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___ ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) INDEX TO QUARTERLY REPORT ON FORM 10QSB
PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements Balance Sheets as of March 31, 2002 (Unaudited) and December 31, 2001............................................................................... 3 Statements of Operations for the Three Months Ended March 31, 2002 and March 31, 2001 (Unaudited).......................................................................... 4 Statement of Partners' Capital Accounts for the Three Months Ended March 31, 2002 (Unaudited)......... 5 Statements of Cash Flows for the Three Months Ended March 31, 2002 and March 31, 2001 (Unaudited).......................................................................... 6 Notes to Financial Statements (Unaudited)............................................................. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................................................... 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk............................................ 11 PART II. OTHER INFORMATION Item 4. Exhibits and Reports on Form 8-K...................................................................... 12 SIGNATURES ...................................................................................................... 13
2 PART I ITEM 1. FINANCIAL STATEMENTS ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) BALANCE SHEETS AS OF MARCH 31, 2002 AND DECEMBER 31, 2001
March 31, 2002 (Unaudited) December 31, 2001 --------------- ----------------- ASSETS Cash............................................................................. $ 67,700 $ 19,700 Accounts receivable - affiliate.................................................. 250,900 334,900 Unrealized hedging gains......................................................... -- 17,900 Oil and gas wells and properties (successful efforts)............................ 12,573,800 12,573,800 Less accumulated depletion and depreciation...................................... (5,693,200) (5,477,500) -------------- ------------- 6,880,600 7,096,300 -------------- ------------- $ 7,199,200 $ 7,468,800 ============== ============= LIABILITIES AND PARTNERS' CAPITAL Accounts payable - affiliate..................................................... $ 198,300 $ 198,300 Unrealized hedging losses........................................................ 29,800 -- Partners' capital: Managing General Partner...................................................... 836,000 872,000 Limited Partners (1,111 units)................................................ 6,164,900 6,380,600 Accumulated other comprehensive income (loss)................................. (29,800) 17,900 --------------- ------------- 6,971,100 7,270,500 -------------- ------------- $ 7,199,200 $ 7,468,800 ============== ============= The accompanying notes are an integral part of these financial statements 3 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) STATEMENTS OF OPERATIONS (Unaudited) THREE MONTHS ENDED MARCH 31, 2002 AND 2001 2002 2001 ---- ---- REVENUES Natural gas and oil.............................................................. $ 332,800 $ 1,095,500 Interest income.................................................................. 300 4,700 -------------- ------------- 333,100 1,100,200 -------------- ------------- COSTS AND EXPENSES Production expenses.............................................................. 81,900 104,000 Depletion and depreciation of oil and gas properties............................. 215,700 157,300 General and administrative expenses.............................................. 19,700 12,000 -------------- ------------- 317,300 273,300 -------------- ------------- Net earnings..................................................................... $ 15,800 $ 826,900 ============== ============= Allocation of net earnings: Managing General Partner...................................................... $ 41,600 $ 239,800 ============== ============= Limited Partners.............................................................. $ (25,800) $ 587,100 =============== ============= Net earnings (loss) per limited partnership interest....................... $ (23) $ 528 =============== =============
The accompanying notes are an integral part of these financial statements 4 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (Unaudited) FOR THREE MONTHS ENDED MARCH 31, 2002
Accumulated Managing Other General Limited Comprehensive Partner Partners Income (Loss) Total ------------- ------------- --------------- ------------- Balance at January 1, 2002................................. $ 872,000 $ 6,380,600 $ 17,900 $ 7,270,500 Comprehensive income (loss): Participation in revenue and expenses: Net production revenues............................... 72,700 178,200 -- 250,900 Interest income....................................... 100 200 -- 300 Depletion and depreciation............................ (25,500) (190,200) -- (215,700) General and administrative............................ (5,700) (14,000) -- (19,700) -------------- ------------- ----------- ------------- Net earnings....................................... 41,600 (25,800) -- 15,800 Change in fair value of cash flow hedges................ -- -- (47,700) (47,800) -------------- Comprehensive income (loss)........................... (32,000) Distributions to partners............................. (77,600) (189,900) -- (267,500) -------------- ------------- ----------- ------------- Balance at March 31, 2002.................................. $ 836,000 $ 6,164,900 $ (29,800) $ 6,971,100 ============== ============= ============ =============
The accompanying notes are an integral part of these financial statements 5 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) STATEMENTS OF CASH FLOWS (Unaudited) FOR THREE MONTHS ENDED MARCH 31, 2002 AND 2001
2002 2001 ---- ---- Cash flows from operating activities: Net earnings......................................................................... $ 15,800 $ 826,900 Adjustments to reconcile net earnings to net cash provided by operating activities: Depletion and depreciation:....................................................... 215,700 157,300 (Increase) decrease in accounts receivable - affiliate............................ 84,000 (207,700) (Decrease) in accounts payable and accrued liabilities............................ -- (1,900) -------------- ------------- Net cash provided by operating activities............................................ 315,500 774,600 Cash flows from financing activities: Distributions to partners............................................................ (267,500) (772,000) -------------- ------------- Net cash used in financing activities................................................ (267,500) (772,000) -------------- ------------- Net increase in cash................................................................. 48,000 2,600 -------------- ------------- Cash at beginning of period.......................................................... 19,700 19,800 -------------- ------------- Cash at end of period................................................................ $ 67,700 $ 22,400 ============== =============
The accompanying notes are an integral part of these financial statements 6 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) FOR THREE MONTHS ENDED MARCH 31, 2002 AND 2001 NOTE 1 - MANAGEMENT'S OPINION REGARDING INTERIM FINANCIAL STATEMENTS The financial statements of Atlas-Energy for The Nineties - Public #8 Ltd. (the Partnership) for the three months ended March 31, 2002 and 2001 are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-QSB pursuant to the rules and regulations of the Securities and Exchange Commission. However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The unaudited interim financial statements should be read in conjunction with the audited financial statements included in the Partnership's Form 10-KSB for the calendar year ended December 31, 2001. The results of operations for the three months ended March 31, 2002 may not necessarily be indicative of the results of operations for the full calendar year ending December 31, 2002. Certain reclassifications have been made to the financial statements for the three months ended March 31, 2001 to conform with the three months ended March 31, 2002. NOTE 2 - NEW ACCOUNTING STANDARD In July 2001, the Financial Accounting Standards Board issued SFAS No. 143, " Accounting for Asset Retirement Obligations". SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset and will be effective for fiscal years beginning after July 15, 2002. The Partnership is required to adopt SFAS No. 143 effective January 1, 2003 and has not yet determined the impact of this new accounting standard. NOTE 3 - TRANSACTIONS WITH ATLAS AND ITS AFFILIATES The Partnership has entered into the following significant transactions with Atlas Resources, Inc. (Atlas), the Managing General Partner, and its affiliates as provided under the Partnership agreement: o Administrative costs payable to Atlas at $75 per well per month. Administrative costs incurred in the three months ended March 31, 2002 and 2001 were $12,000 and $12,000, respectively. o Monthly well supervision fees payable to Atlas at $275 per well per month for operating and maintaining the wells. Well supervision fees incurred for the three months ended March 31, 2002 and 2001 were $36,500 and $36,000, respectively. o Transportation fees paid to Atlas of $.29 per mcf. Transportation costs incurred for the three months ended March 31, 2002 and 2001 were $21,300 and $47,500, respectively. o As managing general partner, Atlas performs all administrative and management functions for the Partnership including billing revenues and paying expenses. Accounts receivable - affiliate on the balance sheet represents the net production revenues due from Atlas. 7 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued) FOR THREE MONTHS ENDED MARCH 31, 2002 AND 2001 NOTE 4 - HEDGING ACTIVITIES Atlas enters into natural gas futures and option contracts to hedge the Partnership's exposure to changes in natural gas prices. At any point in time, such contracts may include regulated New York Mercantile Exchange ("NYMEX") futures and options contracts and non-regulated over-the-counter futures contracts with qualified counter parties. NYMEX contracts are generally settled with offsetting positions, but may be settled by the delivery of natural gas. Although hedging provides Atlas and its affiliates, including the Partnership, some protection against falling prices, these activities could also reduce the potential benefits of price increases, depending upon the instrument. Atlas does not hold derivative instruments for trading purposes. Effective January 1, 2001, the Partnership adopted Statement of Financial Accounting Standards No. 133 ("SFAS 133") Accounting for Derivative Instruments and Hedging Activities (as amended by SFAS 138). This statement establishes accounting and reporting standards for derivative instruments and hedging activities. The statement requires that all derivative financial instruments are recognized in the financial statements as either assets or liabilities measured at fair value. Changes in the fair value of derivative financial instruments are recognized in income or other comprehensive income, depending on their classification. Upon adoption of SFAS 133, the Partnership recognized the unrealized loss on derivatives designated as cash flow hedges of $122,000 at January 1, 2001 in accumulated other comprehensive income as a cumulative effect of accounting change. At March 31, 2002, Atlas had natural gas futures and option contracts covering approximately 70,000 dekatherms ("Dth") of the Partnership's gas production maturing April 2002 through September 2003 at a combined average price of $3.23 per Dth. As these contracts qualify and have been designated as cash flow hedges, any gains or losses resulting from market price changes are deferred and recognized as a component of sales revenues in the month the gas is sold. Gains or losses on futures contracts are determined as the difference between the contract price and a reference price, generally prices on NYMEX. The Partnership's net unrealized loss related to open NYMEX contracts was $29,800 at March 31, 2002. The unrealized loss of $29,800 at March 31, 2002 has been recorded as a liability on the Partnership's 2002 Balance Sheet and in partners' capital as accumulated other comprehensive income. As of March 31, 2002, $18,800 of the unrealized loss is expected to be reclassified to earnings during the next 12 months. The Partnership recognized no losses on settled contracts covering natural gas production for the three months ended March 31, 2002 and 2001. The Partnership recognized no gains or losses during the three months ended March 31, 2002 for hedge ineffectiveness or as a result of the discontinuance of cash flow hedges. The Partnership assesses the effectiveness of its hedges based on changes in the derivates' intrinsic value. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS (UNAUDITED) Forward-Looking Statements WHEN USED IN THIS FORM 10-QSB, THE WORDS "BELIEVES" "ANTICIPATES" "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES MORE PARTICULARLY DESCRIBED IN ITEM 1 OF THIS REPORT. THESE RISKS AND UNCERTAINTIES COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. WE UNDERTAKE NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO FORWARD-LOOKING STATEMENTS WHICH WE MAY MAKE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS FORM 10-QSB OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. Management's Discussion and Analysis should be read in conjunction with our Financial Statements and the notes to our Financial Statements. Results of Operations The following table set forth information relating to revenues recognized and costs and expenses incurred, daily production volumes, average sales prices and production cost per equivalent unit during the periods indicated:
Three Months Ended --------------------------------- March 31, 2002 March 31, 2001 -------------- -------------- Revenues (in thousands): Gas.................................................................................. $ 333 $ 1,096 Oil.................................................................................. $ -- $ -- Production volumes: Gas (thousands of cubic feet (mcf)/day).............................................. 1,072 1,820 Oil (barrels (bbls)/day)............................................................. -- -- Average sales price: Gas (per mcf)........................................................................ $ 3.45 $ 6.69 Oil (per bbl)........................................................................ $ -- $ -- Production costs: As a percent of sales................................................................ 25% 9% Per equivalent mcf................................................................... $ .85 $ .64
9 Net Earnings. During the three months ended March 31, 2002, we had net earnings of $15,800 as compared with net earnings for the three months ended March 31, 2001 of $826,900. Revenues. Our natural gas revenues were $332,800 for the three months ended March 31, 2002, a decrease of $762,700 from $1,095,500 for the three months ended March 31, 2001 due to a 48% ($530,700) decrease in the average sales price of natural gas and a 41% ($232,000) decrease in production volumes. The decrease in gas production volumes results primarily from the normal decline inherent in the life of a well. The impact of the lower gas production was further impacted by a decrease in natural gas prices, which decreased by $3.24 per Mcf to $3.45 per Mcf in 2002. Our revenues from our natural gas sales will be affected by changes in natural gas prices which are driven by market conditions. Expenses. Production expenses for the three months ended March 31, 2002 amounted to $81,900 compared to $104,000 for the three months ended March 31, 2001, a decrease of $22,100 (21%). This decrease is attributable to a decrease in transportation expenses due to the lower production volumes. Depletion and depreciation of oil and gas properties as a percentage of oil and gas revenues was 65% in the three months ended March 31, 2002 compared to 14% for the three months ended March 31, 2001. This percentage change is directly attributable to changes in our oil and gas reserve quantities, product prices and reductions in the depletable cost basis of oil and gas properties. Liquidity and Capital Resources. At March 31, 2002 we had working capital of $120,300 a decrease of $36,000 from $156,300 at December 31, 2001. Cash increased $48,000 from December 31, 2001. There were no new material commitments for us to make capital expenditures during the period and we do not expect any in the foreseeable future. Any additional funds, if required will be obtained from production revenues or borrowings from our managing general partner or its affiliates, which are not contractually committed to make a loan. The amount that may be borrowed may not at any time exceed 5% of our total subscriptions, and no borrowings will be obtained from third parties. Recent Accounting Pronouncement. In July 2001, the Financial Accounting Standards Board issued SFAS No. 143, " Accounting for Asset Retirement Obligations". SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset and will be effective for fiscal years beginning after July 15, 2002. The Partnership is required to adopt SFAS No. 143 effective January 1, 2003 and has not yet determined the impact of this new accounting standard. 10 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. The term "market risk" refers to the risk of loss arising from adverse changes in interest rates and oil and gas prices. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonable possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. All of our market risk sensitive instruments were entered into for purposes other than trading. Commodity Price Risk. Our major market risk exposure in commodities is the pricing applicable to our oil and gas production. Realized pricing is primarily driven by the prevailing worldwide price for crude oil and spot market prices applicable to U.S. natural gas production. Pricing for oil and gas production has been volatile and unpredictable for many years. We periodically enter into financial hedging transactions with respect to a portion of our projected gas production. These financial hedging transactions are intended to reduce the impact of oil and gas price fluctuations. Realized gains and losses from the settlement of these hedges are recognized in gas revenues when the associated production occurs. The gains and losses realized as a result of hedging are substantially offset in the market when the commodity is delivered. We do not hold or issue derivative instruments for trading purposes. Effective January 1, 2001, we adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (as amended by SFAS No. 138). As of March 31, 2002, we had gas hedges in place covering 70,000 dekatherm maturing through September 2003. The fair value of these hedges is a $29,000 liability at March 31, 2002 and is included on our balance sheet and represents the estimated amount that would have been realized had the hedges been terminated on that date. As these contracts qualify and have been designated as cash flow hedges, gains and losses on them resulting from market price changes are determined monthly and reflected in accumulated other comprehensive income until the month in which the hedged production is sold. At that time, the amount included in accumulated other comprehensive income related to the sold production is closed to production revenues. Gains or losses on open and closed hedging transactions are determined as the difference between the contract price and a reference price, generally closing prices on NYMEX. 11 PART III ITEM 8. EXHIBITS AND REPORTS ON FORM 8-K We have not filed any reports on Form 8-K during the last quarter of the period covered by this report. 12 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Atlas-Energy for the Nineties-Public #8 Ltd. By: (Signature and Title): Atlas Resources, Inc., Managing General Partner By (Signature and Title): --------------------------------------------------------------------- Freddie M. Kotek, Chairman of the Board of Directors, Chief Executive Officer and President Date: May 15, 2002 In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): --------------------------------------------------------------------- Freddie M. Kotek, Chairman of the Board of Directors, Chief Executive Officer and President Date: May 15, 2002 By (Signature and Title): ------------------------------------------------------------------ Nancy J. McGurk, Vice President, Chief Financial Officer and Chief Accounting Officer Date: May 15, 2002
13
EXHIBIT INDEX Description Location ----------- -------- 4(a) Certificate of Limited Partnership for Previously filed in the Form Atlas-Energy for the Nineties-Public #8 Ltd. 10-KSB for the period ending December 31, 1999 4(b) Amended and Restated Certificate and Agreement Previously filed in the Form of Limited Partnership for Atlas-Energy for the 10-KSB for the period ending Nineties-Public #8 Ltd. December 31, 1999 10(a) Drilling and Operating Agreement with exhibits Previously filed in the Form 10-KSB for the period ending December 31, 1999
14 -----END PRIVACY-ENHANCED MESSAGE-----