10QSB 1 ten-qsb.txt 10QSB U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 September 30, 2002 (Unaudited) and December 31, 2001............................. 3 Statements of Operations for the Three Months and Nine Months Ended September 30, 2002 and 2001 (Unaudited)............................................................. 4 Statement of Partners' Capital for the Nine Months Ended September 30, 2002 (Unaudited)...................................................................... 5 Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001 (Unaudited)............................................................. 6 Notes to Financial Statements (Unaudited)............................................................. 7 - 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...........................................................................11 - 13 Item 3. Quantitative and Qualitative Disclosures about Market Risk............................................ 14 Item 4. Evaluation of Disclosure Controls and Procedures...................................................... 14 PART II. OTHER INFORMATION Item 5. Exhibits and Reports on Form 8-K...................................................................... 15 SIGNATURES ...................................................................................................... 16
2 PART I ITEM 1. FINANCIAL STATEMENTS ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) BALANCE SHEETS
September 30, December 31, ------------ ------------ 2002 2001 ------------ ------------ (Unaudited) ASSETS Cash ................................................ $ 63,900 $ 19,700 Accounts receivable - affiliate ..................... 198,700 334,900 Unrealized hedging gains ............................ -- 17,900 Oil and gas wells and properties (successful efforts) 12,573,800 12,573,800 Less accumulated depletion and depreciation ......... (5,995,300) (5,477,500) ------------ ------------ 6,578,500 7,096,300 ------------ ------------ $ 6,841,100 $ 7,468,800 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Accounts payable - affiliate ........................ $ 203,300 $ 198,300 Unrealized hedging losses ........................... 51,200 -- Partners' capital: Managing General Partner ......................... 788,300 872,000 Limited Partners (1,111 units) ................... 5,849,500 6,380,600 Accumulated other comprehensive income (loss) .... (51,200) 17,900 ------------ ------------ 6,586,600 7,270,500 ------------ ------------ $ 6,841,100 $ 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 Nine Months Ended September 30, September 30, ------------------------ ------------------------- 2002 2001 2002 2001 ---------- ---------- ------------ ----------- REVENUES: Natural gas and oil................................................. $ 281,300 $ 523,700 $ 851,700 $ 2,287,600 Interest income..................................................... 500 1,400 1,300 10,000 ---------- ---------- ------------ ----------- 281,800 525,100 853,000 2,297,600 ---------- ---------- ------------ ----------- COSTS AND EXPENSES: Production expenses................................................. 71,400 234,000 225,700 425,000 Depletion and depreciation of oil and gas properties................ 144,500 65,500 517,800 617,400 General and administrative expenses................................. 16,200 28,900 54,000 53,000 ---------- ---------- ------------ ----------- 232,100 328,400 797,500 1,095,400 ---------- ---------- ------------ ----------- Net earnings ....................................................... $ 49,700 $ 196,700 $ 55,500 $ 1,202,200 ========== ========== ============ =========== ALLOCATION OF NET EARNINGS (LOSS): Managing General Partner............................................ $ 39,200 $ 68,300 $ 105,000 $ 454,800 ========== ========== ============ =========== Limited Partners.................................................... $ 10,500 $ 128,400 $ (49,500) $ 747,400 ========== ========== ============ =========== Net earnings (loss) per limited partnership interest................ $ 9 $ 116 $ (45) $ 673 ========== ========== ============ ===========
The accompanying notes are an integral part of these financial statements 4 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) STATEMENT OF PARTNERS' CAPITAL (Unaudited) FOR NINE MONTHS ENDED SEPTEMBER 30, 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............................... 181,500 444,500 - 626,000 Interest income....................................... 300 1,000 - 1,300 Depletion and depreciation............................ (61,200) (456,600) - (517,800) General and administrative............................ (15,600) (38,400) - (54,000) ---------- ------------- ------------ ------------ Net earnings....................................... 105,000 (49,500) - 55,500 Change in fair value of cash flow hedges................ - - (69,100) (69,100) ------------ Comprehensive income (loss)........................... (13,600) Distributions to partners............................. (188,700) (481,600) - (670,300) ---------- ------------- ------------ ------------ Balance at September 30, 2002.............................. $ 788,300 $ 5,849,500 $ (51,200) $ 6,586,600 ========== ============= ============ ============
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 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
Nine Months Ended -------------------------------- September 30, -------------------------------- 2002 2001 ------------ -------------- Cash flows from operating activities: Net earnings......................................................................... $ 55,500 $ 1,202,200 Adjustments to reconcile net earnings to net cash provided by operating activities: Depletion and depreciation:....................................................... 517,800 617,400 Decrease in accounts receivable - affiliate....................................... 136,200 322,400 Increase in accounts payable and accrued liabilities.............................. 5,000 56,300 ------------ ------------- Net cash provided by operating activities............................................ 714,500 2,198,300 Cash flows from financing activities: Distributions to partners............................................................ (670,300) (2,185,900) ------------ ------------- Net cash used in financing activities................................................ (670,300) (2,185,900) ------------ ------------- Net increase in cash................................................................. 44,200 12,400 ------------ ------------- Cash at beginning of period.......................................................... 19,700 19,800 ------------ ------------- Cash at end of period................................................................ $ 63,900 $ 32,200 ============ =============
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 AND NINE MONTHS ENDED SEPTEMBER 30, 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 and nine months ended September 30, 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 nine months ended September 30, 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 and nine months ended September 30, 2001 to conform with the three months and nine months ended September 30, 2002. NOTE 2 - NEW ACCOUNTING STANDARDS In June 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 June 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. In October 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Live Assets" ("SFAS 144") was issued. SFAS 144 requires that one accounting model be used for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired, and broadens the definition of what constitutes discontinued operations to include more disposal transactions. Under SFAS 144, assets held for sale that are a component of an entity are included in discontinued operations and cash flows will be eliminated from the ongoing operations if the entity does not have any significant continuing involvement in the operations prospectively. The adoption of SFAS 144 had no impact on the Partnership's financial position or results of operations. In May 2002, SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS 145") was issued. SFAS 145 rescinds the automatic treatment of gains and losses from extinguishments of debt as extraordinary unless they meet the criteria for extraordinary items as outlined in Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations, Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." SFAS 145 also requires sale-leaseback accounting for certain lease modifications that have economic effects similar to a sale-leaseback transaction and makes various corrections to existing pronouncements. The adoption of SFAS 145 had no impact on the Partnership's financial position or results of operations. 7 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) FOR THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 NOTE 2 - NEW ACCOUNTING STANDARDS (Continued) In June 2002, the FASB reached a consensus on certain issues raised in Emerging Issues task Force ("EITF") Issue No. 02-3. The consensus requires mark-to-market gains and losses on energy trading contracts to be shown net in statement whether or not these contracts are settled physically as well as disclosures of gross transaction volumes for contracts that are physically settled. This provision in EITF Issue 02-3 is effective for financial statements ending after July 15, 2002, and comparative financial statements will be reclassified to conform to the new presentation. Additional disclosures such as types of contracts accounted for as energy trading contracts, reconciliation of beginning and ending fair values and descriptions of methods and assumptions used to estimate fair value are also required. These additional disclosures are effective for financial statements issued for fiscal years ending after July 15, 2002. In July 2002, SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146") was issued. SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. The Partnership has not yet adopted SFAS 146 nor determined the effect of the adoption of SFAS 146 on its financial position or results of operations. NOTE 3 - COMPREHENSIVE INCOME (LOSS) The following table presents comprehensive income (loss) for the periods indicated:
Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------- 2002 2001 2002 2001 ---------- ---------- ----------- ------------ Net earnings ....................................................... $ 49,700 $ 196,700 $ 55,500 $ 1,202,200 Other comprehensive income (loss): Unrealized gain (loss) on natural gas futures contracts...... (37,200) - (69,100) 17,900 ---------- ---------- ----------- ------------ Comprehensive income (loss)......................................... $ 12,500 $ 196,700 $ (13,600) $ 1,220,100 ========== ========== =========== ============
8 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) FOR THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 - (Continued) NOTE 4 - 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 September 30, 2002 and 2001 were $11,600 and $12,100, respectively, and $35,500 and $36,200 for the nine months ended September 30, 2002 and 2001, 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 September 30, 2002 and 2001 were $35,600 and $ 44,000, respectively, and $108,300 and $123,900 for the nine months ended September 30, 2002 and 2001, respectively. o Transportation fees paid to Atlas of $.29 per mcf. Transportation costs incurred for the three months ended September 30, 2002 and 2001 were $15,600 and $29,500, respectively, and $54,600 and $125,000 for the nine months ended September 30, 2002 and 2001, 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. 9 ATLAS-ENERGY FOR THE NINETIES - PUBLIC #8 LTD. (A Pennsylvania Limited Partnership) NOTES TO FINANCIAL STATEMENTS (Unaudited) FOR THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 - (Continued) NOTE 5 - 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 September 30, 2002, Atlas had natural gas futures and option contracts covering approximately 158,000 dekatherms ("Dth") of the Partnership's gas production maturing April 2002 through September 2003 at a combined average price of $3.57 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 $51,200 at September 30, 2002. The unrealized loss of $51,200 at September 30, 2002 has been recorded as a liability on the Partnership's 2002 balance sheet and in partners' capital as accumulated other comprehensive income (loss). As of September 30, 2002, $51,200 of the unrealized loss is expected to be reclassified to earnings during the next 12 months. The Partnership's recognized losses on settled contracts covering natural gas production for the nine months ended September 30, 2002 was $6,600. The Partnership recognized no gains or losses during the nine months ended September 30, 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. 10 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 Nine Months Ended September 30, September 30, --------------------- ----------------------- 2002 2001 2002 2001 ---------- --------- --------- ---------- (in thousands, except sales price and production cost data) Production revenues: Gas.......................................................... $ 281 $ 524 $ 852 $ 2,287 Oil.......................................................... $ - $ - $ - $ - Production volumes: Gas (thousands of cubic feet ("mcf")/day).................... 724 1,106 864 1,579 Oil (barrels (`bbls")/day)................................... - - - - Average sales prices: Gas (per mcf)................................................ $ 4.22 $ 5.15 $ 3.61 $ 5.31 Oil (per bbl)................................................ $ - $ - $ - $ - Average production costs: As a percent of sales........................................ 25% 45% 26% 19% (per mcf equivalent unit).................................... $ 1.07 $ 2.30 $ .96 $ .99
11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS (UNAUDITED) - (Continued) Results of Operations - (Continued) Net Earnings. During the three months and nine months ended September 30, 2002, we had net earnings of $49,700 and $55,500 as compared with net earnings for the three months and nine months ended September 30, 2001 of $196,700 and $1,202,200, a decrease of $147,000 (75%) and $1,146,700 (95%). Revenues. Our natural gas revenues were $281,300 and $851,700 in the three months and nine months ended September 30, 2002, a decrease of $242,400 (46%) and $1,435,900 (63%) from $523,700 and $2,287,600 in the three months and nine months ended September 30, 2001. These decreases were due to an 18% ($94,400) and 32% ($731,700) decrease in the average sales price of natural gas for the three months and nine months ended September 30, 2002, respectively, and a 35% ($148,300) and 45% ($704,200) decrease in production volumes for the three months and nine months ended September 30, 2002, respectively. 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 $.93 per Mcf and $1.70 per Mcf to $4.22 per Mcf and $3.61 per Mcf in the three months and nine months ended September 30, 2002. Our revenues from our natural gas sales will continue to be affected by changes in natural gas prices, which are driven by market conditions. Expenses. Production expenses were $71,400 and $225,700 in the three months and nine months ended September 30, 2002, a decrease of $162,600 (70%) and $199,300 (47%). 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 51% and 61% in the three months and nine months ended September 30, 2002 compared to 13% and 27% for the three months and nine months ended September 30, 2001. These percentage changes are 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. General and administrative expenses for the three months and nine months ended September 30, 2002 amounted to $16,200 and $54,000, a decrease of $12,700 (44%) and an increase $1,000 (2%) in the three months and nine months ended September 30, 2001. The decrease is attributable to the timing of the expenses being incurred by the partnership. These expenses include the monthly administrative fees charged by the managing general partner to each productive well and legal and audit fees. Liquidity and Capital Resources. At September 30, 2002 we had working capital of $8,100, a decrease of $166,100 from $174,200 at December 31, 2001. Cash increased $44,200 from December 31, 2001. There are no material commitments for us to make capital expenditures 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. 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS (UNAUDITED) - (Continued) Results of Operations - (Continued) Recent Accounting Pronouncements. 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. In October 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Live Assets" ("SFAS 144") was issued. SFAS 144 requires that one accounting model be used for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired, and broadens the definition of what constitutes discontinued operations to include more disposal transactions. Under SFAS 144, assets held for sale that are a component of an entity are included in discontinued operations and cash flows will be eliminated from the ongoing operations if the entity does not have any significant continuing involvement in the operations prospectively. The adoption of SFAS 144 had no impact on the Partnership's financial position or results of operations. In May 2002, SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS 145") was issued. SFAS 145 rescinds the automatic treatment of gains and losses from extinguishments of debt as extraordinary unless they meet the criteria for extraordinary items as outlined in Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations, Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." SFAS 145 also requires sale-leaseback accounting for certain lease modifications that have economic effects similar to a sale-leaseback transaction and makes various corrections to existing pronouncements. The adoption of SFAS 145 had no impact on the Partnership's consolidated financial position or results of operations. In June 2002, the FASB reached a consensus on certain issues raised in Emerging Issues task Force ("EITF") Issue No. 02-3. The consensus requires mark-to-market gains and losses on energy trading contracts to be shown net in the income statement whether or not these contracts are settled physically as well as disclosures of gross transaction volumes for contracts that are physically settled. This provision in EITF Issue 02-3 is effective for financial statements ending after July 15, 2002, and comparative financial statements will be reclassified to conform to the new presentation. Additional disclosures such as types of contracts accounted for as energy trading contracts, reconciliation of beginning and ending fair values and descriptions of methods and assumptions used to estimate fair value are also required. These additional disclosures are effective for financial statements issued for fiscal years ending after July 15, 2002. In July 2002, SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146") was issued. SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. The Partnership has not yet adopted SFAS 146 nor determined the effect of the adoption of SFAS 146 on its consolidated financial position or results of operations. 13 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 September 30, 2002, we had gas hedges in place covering 158,000 dekatherms maturing through September 2003. The unrealized loss on these hedges is a $51,200 liability at September 30, 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. ITEM 4. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures The Partnership's Chief Executive Officer and Chief Financial Officer have reviewed the Partnership's disclosure controls and procedures within 90 days prior to the filing of this report. Based upon this review, these officers believe that the Partnership's disclosure controls and procedures are effective in ensuring that material information related to the Partnership is made known to them by others within the Partnership. Changes in Internal Controls There were no significant changes in the Partnership's internal controls or in other factors that could significantly affect these controls since the date of the Partnership's last evaluation of internal controls. 14 PART II ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit No. Description ----------- ----------- 4(a) Certificate of Limited Partnership for Atlas-Energy for the Nineties-Public #8 Ltd. (1) 4(b) Amended and Restated Certificate and Agreement of Limited Partnership for Atlas-Energy for the Nineties-Public #8 Ltd. (1) 10(a) Drilling and Operating Agreement with exhibits (1) 99.1 Certification Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 99.2 Certification Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1) Previously filed in the Form 10-KSB for the period ending December 31, 1999. (b) Reports on Form 8-K: None 15 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): /s/ Freddie M. Kotek ------------------------------------------------------- Freddie M. Kotek, Chairman of the Board of Directors, Chief Executive Officer and President Date: November 12, 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): /s/ Freddie M. Kotek ------------------------------------------------------- Freddie M. Kotek, Chairman of the Board of Directors, Chief Executive Officer and President Date: November 12, 2002 By (Signature and Title): /s/ Nancy J. McGurk ------------------------------------------------------- Nancy J. McGurk, Senior Vice President, Chief Financial Officer and Chief Accounting Officer Date: November 12, 2002
16 CERTIFICATION I, Freddie M. Kotek, Chief Executive Officer of Atlas Resources, Inc. (managing general partner of the Partnership), hereby certify that: 1. I have reviewed this quarterly report on Form 10-Q for the period ending September 30, 2002 of the Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Partnership as of, and for, the periods presented in this quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14) for the Partnership and we have: a) designed such disclosure controls and procedures to ensure the material information relating to the Partnership is made known to us, particularly during the period in which this quarterly report was being prepared; b) evaluated the effectiveness of the Partnership's disclosure controls and procedures within 90 days prior to the filing of this report, and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation; 5. I have disclosed, based on our most recent evaluation, to the Partnership's auditors and to the board of directors of the General Partners: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Partnership's ability to record, process, summarize and report financial data and have identified for the Partnership's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Partnership's internal controls; and 6. I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Pursuant to the requirements of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. By: /s/ Freddie M. Kotek ------------------ Freddie M. Kotek Chief Executive Officer of the Managing General Partner November 12, 2002 17 CERTIFICATION I, Nancy J. McGurk, Chief Financial Officer of Atlas Resources, Inc. (managing general partner of the Partnership), hereby certify that: 1. I have reviewed this quarterly report on Form 10-Q for the period ending September 30, 2002 of the Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Partnership as of, and for, the periods presented in this quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14) for the Partnership and we have: a) designed such disclosure controls and procedures to ensure the material information relating to the Partnership is made known to us, particularly during the period in which this quarterly report was being prepared; b) evaluated the effectiveness of the Partnership's disclosure controls and procedures within 90 days prior to the filing of this report, and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation; 5. I have disclosed, based on our most recent evaluation, to the Partnership's auditors and to the board of directors of the General Partners: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Partnership's ability to record, process, summarize and report financial data and have identified for the Partnership's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Partnership's internal controls; and 6. I have indicated in the quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Pursuant to the requirements of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. By: /s/ Nancy J. McGurk ------------------ Nancy J. McGurk Chief Financial Officer of the Managing General Partner November 12, 2002 18