þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) |
54-2113989 (I.R.S. Employer Identification No.) |
|
Westpointe Corporate Center One | ||
1550 Coraopolis Heights Rd. 2nd Floor | ||
Moon Township, PA | 15108 | |
(Address of principal executive offices) | (zip code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company þ |
PAGE | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7-15 | ||||||||
16-19 | ||||||||
19-20 | ||||||||
20 | ||||||||
20 | ||||||||
21 | ||||||||
CERTIFICATIONS |
||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
2
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 138,700 | $ | 152,500 | ||||
Accounts receivable-affiliate |
606,300 | 401,800 | ||||||
Short-term hedge receivable due from affiliate |
| 380,300 | ||||||
Total current assets |
745,000 | 934,600 | ||||||
Oil and gas properties, net |
5,803,200 | 6,218,100 | ||||||
Long-term hedge receivable due from affiliate |
| 371,400 | ||||||
Long-term receivable-affiliate |
171,100 | | ||||||
$ | 6,719,300 | $ | 7,524,100 | |||||
LIABILITIES AND PARTNERS CAPITAL |
||||||||
Current liabilities: |
||||||||
Accrued liabilities |
$ | 14,800 | $ | 13,200 | ||||
Short-term hedge liability due to affiliate |
| 1,600 | ||||||
Total current liabilities |
14,800 | 14,800 | ||||||
Asset retirement obligation |
3,239,900 | 3,100,400 | ||||||
Long-term hedge liability due to affiliate |
| 63,400 | ||||||
Partners capital: |
||||||||
Managing general partner |
1,918,200 | 5,428,400 | ||||||
Limited partners (4,024 units) |
1,376,200 | (1,131,000 | ) | |||||
Accumulated other comprehensive income |
170,200 | 48,100 | ||||||
Total partners capital |
3,464,600 | 4,345,500 | ||||||
$ | 6,719,300 | $ | 7,524,100 | |||||
3
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
REVENUES |
||||||||||||||||
Natural gas and oil |
$ | 509,800 | $ | 421,500 | $ | 1,393,200 | $ | 1,458,900 | ||||||||
Interest income |
100 | | 200 | 200 | ||||||||||||
Total revenues |
509,900 | 421,500 | 1,393,400 | 1,459,100 | ||||||||||||
COSTS AND EXPENSES |
||||||||||||||||
Production |
289,400 | 352,000 | 862,800 | 1,025,900 | ||||||||||||
Depletion |
149,600 | 176,800 | 414,900 | 594,200 | ||||||||||||
Accretion of asset retirement obligation |
46,500 | 36,800 | 139,500 | 110,600 | ||||||||||||
General and administrative |
58,300 | 51,400 | 169,200 | 166,800 | ||||||||||||
Total expenses |
543,800 | 617,000 | 1,586,400 | 1,897,500 | ||||||||||||
Net loss |
$ | (33,900 | ) | $ | (195,500 | ) | $ | (193,000 | ) | $ | (438,400 | ) | ||||
Allocation of net loss: |
||||||||||||||||
Managing general partner |
$ | (26,100 | ) | $ | (31,500 | ) | $ | (84,100 | ) | $ | (29,500 | ) | ||||
Limited partners |
$ | (7,800 | ) | $ | (164,000 | ) | $ | (108,900 | ) | $ | (408,900 | ) | ||||
Net loss per limited partnership unit |
$ | (2 | ) | $ | (41 | ) | $ | (27 | ) | $ | (102 | ) | ||||
4
Accumulated | ||||||||||||||||
Managing | Other | |||||||||||||||
General | Limited | Comprehensive | ||||||||||||||
Partner | Partners | Income | Total | |||||||||||||
Balance at January 1, 2011 |
$ | 5,428,400 | $ | (1,131,000 | ) | $ | 48,100 | $ | 4,345,500 | |||||||
Participation in revenues and expenses: |
||||||||||||||||
Net production revenues |
110,400 | 420,000 | | 530,400 | ||||||||||||
Interest income |
100 | 100 | | 200 | ||||||||||||
Depletion |
(86,600 | ) | (328,300 | ) | | (414,900 | ) | |||||||||
Accretion of asset retirement obligation |
(48,800 | ) | (90,700 | ) | | (139,500 | ) | |||||||||
General and administrative |
(59,200 | ) | (110,000 | ) | | (169,200 | ) | |||||||||
Net loss |
(84,100 | ) | (108,900 | ) | | (193,000 | ) | |||||||||
Other comprehensive income |
| | 122,100 | 122,100 | ||||||||||||
Working interest adjustment |
(3,045,100 | ) | 3,045,100 | | | |||||||||||
Distributions to partners |
(381,000 | ) | (429,000 | ) | | (810,000 | ) | |||||||||
Balance at September 30, 2011 |
$ | 1,918,200 | $ | 1,376,200 | $ | 170,200 | $ | 3,464,600 | ||||||||
5
Nine Months Ended | ||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (193,000 | ) | $ | (438,400 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
Depletion |
414,900 | 594,200 | ||||||
Non-cash loss on hedge instruments |
228,400 | 366,100 | ||||||
Accretion of asset retirement obligation |
139,500 | 110,600 | ||||||
Decrease in accounts receivable affiliate |
20,600 | 48,100 | ||||||
Increase (decrease) in accrued liabilities |
1,600 | (14,100 | ) | |||||
Net cash provided by operating activities |
612,000 | 666,500 | ||||||
Cash flows from investing activities: |
||||||||
Proceeds from sale of tangible equipment |
| 1,500 | ||||||
Net cash provided by investing activities |
| 1,500 | ||||||
Cash flows from financing activities: |
||||||||
Distributions to partners |
(625,800 | ) | (752,800 | ) | ||||
Net cash used in financing activities |
(625,800 | ) | (752,800 | ) | ||||
Net decrease in cash and cash equivalents |
(13,800 | ) | (84,800 | ) | ||||
Cash and cash equivalents at beginning of period |
152,500 | 175,000 | ||||||
Cash and cash equivalents at end of period |
$ | 138,700 | $ | 90,200 | ||||
Supplemental Schedule of non-cash operating and financing activities: |
||||||||
Distribution to managing general partner |
$ | 184,200 | $ | | ||||
6
7
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
Proved properties: |
||||||||
Leasehold interests |
$ | 1,131,600 | $ | 1,131,600 | ||||
Wells and related equipment |
52,145,600 | 52,145,600 | ||||||
53,277,200 | 53,277,200 | |||||||
Accumulated depletion |
(47,474,000 | ) | (47,059,100 | ) | ||||
Oil and gas properties, net |
$ | 5,803,200 | $ | 6,218,100 | ||||
8
9
10
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Asset retirement obligation at beginning of
period |
$ | 3,193,400 | $ | 2,531,700 | $ | 3,100,400 | $ | 2,457,900 | ||||||||
Accretion expense |
46,500 | 36,800 | 139,500 | 110,600 | ||||||||||||
Asset retirement obligation at end of period |
$ | 3,239,900 | $ | 2,568,500 | $ | 3,239,900 | $ | 2,568,500 | ||||||||
11
Fair Value | ||||||
Balance Sheet | December 31, | |||||
Derivatives in Cash Flow Hedging Relationships | Location | 2010 | ||||
Commodity Contracts |
Current assets | $ | 380,300 | |||
Long-term assets | 371,400 | |||||
751,700 | ||||||
Current liabilities | (1,600 | ) | ||||
Long-term liabilities | (63,400 | ) | ||||
(65,000 | ) | |||||
Total | $ | 686,700 | ||||
12
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||
Derivative in Cash Flow Hedging Relationships |
Gain Recognized in OCI on Derivatives |
|||||||||||||||||
Commodity Contracts | $ | | $ | 441,800 | $ | 35,600 | $ | 1,033,100 | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||
Location of Gain Reclassified from Accumulated
OCI into Loss |
Gain Reclassified from OCI into Net Loss |
|||||||||||||||||
Gas and Oil Revenue | $ | 57,200 | $ | 43,200 | $ | 182,600 | $ | 110,400 | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net loss |
$ | (33,900 | ) | $ | (195,500 | ) | $ | (193,000 | ) | $ | (438,400 | ) | ||||
Other comprehensive (loss) income: |
||||||||||||||||
Unrealized holding gain on
hedging contracts |
| 441,800 | 35,600 | 1,033,100 | ||||||||||||
MGP portion of non-cash loss on
hedge instruments |
| | 184,200 | | ||||||||||||
Difference in estimated
monetized gains receivable |
26,000 | | 84,900 | | ||||||||||||
Less: reclassification
adjustment for gains realized in
net loss |
(57,200 | ) | (43,200 | ) | (182,600 | ) | (110,400 | ) | ||||||||
Total other comprehensive (loss) income |
(31,200 | ) | 398,600 | 122,100 | 922,700 | |||||||||||
Comprehensive (loss) income |
$ | (65,100 | ) | $ | 203,100 | $ | (70,900 | ) | $ | 484,300 | ||||||
13
| Administrative costs which are included in general and administrative expenses in the
Partnerships statements of operations are payable at $75 per well per month.
Administrative costs incurred for the three months and nine months ended September 30,
2011 were $43,000 and $127,600, respectively. Administrative costs incurred for the
three months and nine months ended September 30, 2010 were $43,700 and $130,800,
respectively. |
| Monthly well supervision fees which are included in production expenses in the
Partnerships statements of operations are payable at $313 per well per month,
respectively, for operating and maintaining the wells. Well supervision fees incurred
for the three months and nine months ended September 30, 2011 were $179,400 and
$533,000, respectively. Well supervision fees incurred for the three months and nine
months ended September 30, 2010 were $182,600 and $546,500, respectively. |
14
| Transportation fees which are included in production expenses in the Partnerships
statements of operations are generally payable at 13% of the natural gas sales price.
Transportation fees incurred for the three months and nine months ended September 30,
2011 were $59,800 and $175,300, respectively. Transportation fees incurred for the three
months and nine months ended September 30, 2010 were $54,800 and $192,000, respectively. |
15
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED) |
| well tending, routine maintenance and adjustment; |
| reading meters, recording production, pumping, maintaining appropriate books and
records; and |
| preparation of reports for us and government agencies. |
16
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Production revenues (in thousands): |
||||||||||||||||
Gas |
$ | 471 | $ | 382 | $ | 1,310 | $ | 1,379 | ||||||||
Oil |
39 | 40 | 83 | 80 | ||||||||||||
Total |
$ | 510 | $ | 422 | $ | 1,393 | $ | 1,459 | ||||||||
Production volumes: |
||||||||||||||||
Gas (mcf/day) (1) |
1,043 | 813 | 992 | 937 | ||||||||||||
Oil (bbls/day) (1) |
5 | 6 | 3 | 4 | ||||||||||||
Total (mcfe/day) (1) |
1,073 | 849 | 1,010 | 961 | ||||||||||||
Average sales prices: (2) |
||||||||||||||||
Gas (per mcf) (1) (3) |
$ | 5.39 | $ | 6.67 | $ | 5.68 | $ | 6.82 | ||||||||
Oil (per bbl) (1) (4) |
$ | 89.14 | $ | 77.45 | $ | 92.88 | $ | 78.72 | ||||||||
Average production costs: |
||||||||||||||||
As a percent of revenues |
57 | % | 84 | % | 62 | % | 70 | % | ||||||||
Per mcfe (1) |
$ | 2.94 | $ | 4.52 | $ | 3.12 | $ | 3.92 | ||||||||
Depletion per mcfe |
$ | 1.52 | $ | 2.27 | $ | 1.50 | $ | 2.27 |
(1) | Mcf represents thousand cubic feet, mcfe represents thousand cubic feet
equivalent, and bbls represents barrels. Bbls are converted to mcfe using the ratio
of six mcfs to one bbl. |
|
(2) | Average sales prices represent accrual basis pricing after reversing the effect
of previously recognized gains resulting from prior period impairment charges. |
|
(3) | Average gas prices are calculated by including in total revenue derivative gains
previously recognized into income and dividing by the total volume for the period.
Previously recognized derivative gains were $45,800 and $116,900 for the three months
ended September 30, 2011 and 2010, respectively. Previously recognized derivative gains
were $228,400 and $365,500 for the nine months ended September 30, 2011 and 2010,
respectively. The derivative gains are included in other comprehensive income and
resulted from prior period impairment charges. |
|
(4) | Average oil prices are calculated by including in total revenue derivative gains
or losses previously recognized into income and dividing by the total volume for the
period. Previously recognized derivative gain was $200 for the three months ended
September 30, 2010. Previously recognized derivative gain was $600 for the nine months
ended September 30, 2010. The derivative gains are included in other comprehensive
income and resulted from prior period impairment charges. |
17
18
ITEM 4. | CONTROLS AND PROCEDURES |
19
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 6. | EXHIBITS |
Exhibit No. | Description | |||
4.0 | Amended and Restated Certificate and Agreement of Limited Partnership for Public #12-2003 Limited
Partnership (1) |
|||
31.1 | Certification Pursuant to Rule 13a-14/15(d)-14 |
|||
31.2 | Certification Pursuant to Rule 13a-14/15(d)-14 |
|||
32.1 | Section 1350 Certification |
|||
32.2 | Section 1350 Certification |
|||
101 | Interactive Data File |
(1) | Filed on September 3, 2003 in the Form S-1 Registration Statement dated September 3, 2003, File No. 333-105811 |
20
ATLAS RESOURCES, LLC, Managing General Partner | ||||||
Date: November 10, 2011
|
By: | /s/ FREDDIE M. KOTEK
|
Date: November 10, 2011
|
By: | /s/ SEAN P. MCGRATH
|
21
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2011
of Atlas America Public #12-2003 Limited Partnership, |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have; |
a) | designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant is made known to us by others within the entity,
particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions): |
a) | all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and |
b) | any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting. |
By: Name: |
/s/ FREDDIE M. KOTEK
|
|||
Title:
|
Chief Executive Officer of the Managing General Partner | |||
Date:
|
November 10, 2011 |
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2011
of Atlas America Public #12-2003 Limited Partnership, |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have; |
a) | designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant is made known to us by others within the entity,
particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions): |
a) | all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and |
b) | any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting. |
By: Name: |
/s/ SEAN P. MCGRATH
|
|||
Title:
|
Chief Financial Officer of the Managing General Partner | |||
Date:
|
November 10, 2011 |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and |
(2) | the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Partnership. |
By: Name: |
/s/ FREDDIE M. KOTEK
|
|||
Title:
|
Chief Executive Officer of the Managing General Partner | |||
Date:
|
November 10, 2011 |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and |
(2) | the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Partnership. |
By: Name: |
/s/ SEAN P. MCGRATH
|
|||
Title:
|
Chief Financial Officer of the Managing General Partner | |||
Date:
|
November 10, 2011 |
Balance Sheets (Parenthetical) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Balance Sheets | ||
Limited Partners' Units | 4,024 | 4,024 |
Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
REVENUES | ||||
Natural gas and oil | $ 509,800 | $ 421,500 | $ 1,393,200 | $ 1,458,900 |
Interest income | 100 | 200 | 200 | |
Total revenues | 509,900 | 421,500 | 1,393,400 | 1,459,100 |
COSTS AND EXPENSES | ||||
Production | 289,400 | 352,000 | 862,800 | 1,025,900 |
Depletion | 149,600 | 176,800 | 414,900 | 594,200 |
Accretion of asset retirement obligation | 46,500 | 36,800 | 139,500 | 110,600 |
General and administrative | 58,300 | 51,400 | 169,200 | 166,800 |
Total expenses | 543,800 | 617,000 | 1,586,400 | 1,897,500 |
Net loss | (33,900) | (195,500) | (193,000) | (438,400) |
Allocation of net loss: | ||||
Managing general partner | (26,100) | (31,500) | (84,100) | (29,500) |
Limited partners | $ (7,800) | $ (164,000) | $ (108,900) | $ (408,900) |
Net loss per limited partnership unit | $ (2) | $ (41) | $ (27) | $ (102) |
Document and Entity Information | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Document and Entity Information | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2011 |
Document Fiscal Year Focus | 2011 |
Document Fiscal Period Focus | Q3 |
Entity Registrant Name | ATLAS AMERICA PUBLIC 12 2003 PROGRAM |
Entity Central Index Key | 0001238289 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 4,024 |
"+ text.join( "
\n" ) +"
" + text[p] + "
\n"; } } }else{ formatted = '' + raw + '
'; } html = ''+ "\n"+''+ "\n"+''+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+' | '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
Fair Value of Financial Instruments | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Fair Value of Financial Instruments | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 6 — FAIR VALUE OF FINANCIAL INSTRUMENTS
The Partnership has established a hierarchy to measure its financial instruments at fair value which requires it to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy defines three levels of inputs that may be used to measure fair value:
Level 1— Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.
Level 2— Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially
Level 3— Unobservable inputs that reflect the entities own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Partnership used a fair value methodology to value the assets and liabilities for its outstanding derivative contracts (see Note 4). The Partnership's commodity derivative contracts were valued based on observable market data related to the change in price of the underlying commodity and are therefore defined as Level 2 fair value measurements.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Partnership estimates the fair value of asset retirement obligations using Level 3 inputs based on discounted cash flow projections using numerous estimates, assumptions and judgments regarding such factors at the date of establishment of an asset retirement obligation such as: amounts and timing of settlements; the credit-adjusted risk-free rate of the Partnership; and estimated inflation rates (see Note 3). |
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In management's opinion, all adjustments necessary for a fair presentation of the Partnership's financial position, results of operations and cash flows for the periods disclosed have been made.
In addition to matters discussed further in this note, the Partnership's significant accounting policies are detailed in its audited financial statements and notes thereto in the Partnership's annual report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission ("SEC").
Use of Estimates
Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities that exist at the date of the Partnership's financial statements, as well as the reported amounts of revenue and costs and expenses during the reporting periods. The Partnership's financial statements are based on a number of significant estimates, including the revenue and expense accruals, depletion, asset impairments, fair value of derivative instruments and the probability of forecasted transactions. Actual results could differ from those estimates. The natural gas industry principally conducts its business by processing actual transactions as much as 60 days after the month of delivery. Consequently, the most recent two months' financial results were recorded using estimated volumes and contract market prices. Differences between estimated and actual amounts are recorded in the following months' financial results. Management believes that the operating results presented represent actual results in all material respects (see "Revenue Recognition" accounting policy for further description).
Accounts Receivable and Allowance for Possible Losses
In evaluating the need for an allowance for possible losses, the MGP performs ongoing credit evaluations of the Partnership's customers and adjusts credit limits based upon payment history and the customer's current creditworthiness, as determined by review of the Partnership's customers' credit information. Credit is extended on an unsecured basis to many of its energy customers. As of September 30, 2011 and December 31, 2010, the MGP's credit evaluation indicated that the Partnership had no need for an allowance for possible losses.
Oil and Gas Properties
Oil and gas properties are stated at cost. Maintenance and repairs are expensed as incurred. Major renewals and improvements that extend the useful lives of property are capitalized. The Partnership follows the successful efforts method of accounting for oil and gas producing activities. Oil is converted to gas equivalent basis ("Mcfe") at the rate of one barrel equals six Mcf.
The Partnership's depletion expense is determined on a field-by-field basis using the units-of-production method. Depletion rates for lease, well and related equipment costs are based on proved developed reserves associated with each field. Depletion rates are determined based on reserve quantity estimates and the capitalized costs of developed producing properties. Upon the sale or retirement of a complete field of a proved property, the Partnership eliminates the cost from the property accounts and the resultant gain or loss is reclassified to the Partnership's statements of operations. Upon the sale of an individual well, the Partnership credits the proceeds to accumulated depreciation and depletion within its balance sheets.
Impairment of Long-Lived Assets
The Partnership reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined that an asset's estimated future cash flows will not be sufficient to recover its carrying amount, an impairment charge will be recorded to reduce the carrying amount for that asset to its estimated fair value if such carrying amount exceeds the fair value.
The review of the Partnership's oil and gas properties is done on a field-by-field basis by determining if the historical cost of proved properties, less the applicable accumulated depletion, and abandonment is less than the estimated expected undiscounted future cash flows. The expected future cash flows are estimated based on the Partnership's plans to continue to produce and develop proved reserves. Expected future cash flow from the sale of production of reserves is calculated based on estimated future prices. The Partnership estimates prices based upon current contracts in place, adjusted for basis differentials and market related information including published futures prices. The estimated future level of production is based on assumptions surrounding future prices and costs, field decline rates, market demand and supply and the economic and regulatory climates. If the carrying value exceeds the expected future cash flows, an impairment loss is recognized for the difference between the estimated fair market value (as determined by discounted future cash flows) and the carrying value of the assets.
The determination of oil and natural gas reserve estimates is a subjective process and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In addition, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Estimated reserves are often subject to future revisions, which could be substantial, based on the availability of additional information which could cause the assumptions to be modified. The Partnership cannot predict what reserve revisions may be required in future periods. There was no impairment charge recognized during the three and nine months ended September 30, 2011. During the year ended December 31, 2010, the Partnership recognized an impairment charge of $3,667,800, net of an offsetting gain in accumulated other comprehensive income of $323,000.
Working Interest
The Partnership Agreement establishes that revenues and expenses will be allocated to the MGP and limited partners based on their ratio of capital contributions to total contributions ("working interest"). The MGP is also provided an additional working interest of 7% as provided in the Partnership Agreement. Due to the time necessary to complete drilling operations and accumulate all drilling costs, estimated working interest percentage ownership rates are utilized to allocate revenues and expenses until the wells are completely drilled and turned on-line into production. Once the wells are completed, the final working interest ownership of the partners is determined and any previously allocated revenues and expenses based on the estimated working interest percentage ownership are adjusted to conform to the final working interest percentage ownership. As of September 30, 2011, an additional adjustment of $3,045,100 was made to decrease the Managing General Partner's equity account and a corresponding increase to the Limited Partners' equity account for previous depletion and impairment charges, to conform to the final working interest ownership percentages. Revenue Recognition
The Partnership generally sells natural gas and crude oil at prevailing market prices. Revenue is recognized when produced quantities are delivered to a custody transfer point, persuasive evidence of a sales arrangement exists, the rights and responsibility of ownership pass to the purchaser upon delivery, collection of revenue from the sale is reasonably assured and the sales price is fixed or determinable. Revenues from the production of natural gas and crude oil in which the Partnership has an interest with other producers are recognized on the basis of the Partnership's percentage ownership of working interest. Generally, the Partnership's sales contracts are based on pricing provisions that are tied to a market index with certain adjustments based on proximity to gathering and transmission lines and the quality of its natural gas.
The Partnership accrues unbilled revenue due to timing differences between the delivery of natural gas and crude oil and the receipt of a delivery statement. These revenues are recorded based upon volumetric data from the Partnership's records and management estimates of the related commodity sales and transportation fees which are, in turn, based upon applicable product prices (see "Use of Estimates" accounting policy for further description). The Partnership had unbilled revenues at September 30, 2011 and December 31, 2010 of $288,600 and $294,800, respectively, which are included in accounts receivable — affiliate within the Partnership's balance sheets.
Recently Issued Accounting Standards
In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. Update 2011-05 amends the FASB Accounting Standards Codification to provide an entity with the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income in either a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with a total net income, each component of other comprehensive income, and a total amount for comprehensive income. Update 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in partners' capital. These changes apply to both annual and interim financial statements. Update 2011-05 will be effective for public entities' fiscal years, and interim periods within those years, beginning after December 15, 2011. The Partnership will apply the requirements of Update 2011-05 upon its effective date of January 1, 2012, and it does not anticipate it having a material impact on its financial position, results of operations or related disclosures. |
Subsequent Events | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Subsequent Events | |
SUBSEQUENT EVENTS | NOTE 8 — SUBSEQUENT EVENTS
Management has considered for disclosure any material subsequent events through the date the financial statements were issued.
Formation of Atlas Resource Partners, L.P. On October 17, 2011, Atlas Energy announced that its board of directors has approved a plan to create a newly formed exploration and production master limited partnership named Atlas Resource Partners, L.P. ("Atlas Resource Partners"), which will hold substantially all of Atlas Energy's current natural gas and oil development, and production assets and the partnership management business, including the MGP. Upon consummation of the transaction, Atlas Energy will retain a 78.4% limited partner interest in Atlas Resource Partners and intends to distribute a 19.6% limited partner interest in Atlas Resource Partners to Atlas Energy unit holders. Atlas Energy will also own the newly created general partner of Atlas Resource Partners, which will own a 2% general partner interest and all of the incentive distribution rights in the newly formed partnership. Completion of the transaction is subject to a number of conditions, including final approval by the Atlas Energy's board of directors, as well as the effectiveness of a Form 10 registration statement that Atlas Resource Partners filed with the SEC on October 17, 2011. The transaction is expected to close in the first quarter of 2012. The MGP anticipates that this transaction will have no impact on the Partnership's operations. |
Transactions with Atlas Resources, LLC and its Affiliates | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||
Transactions with Atlas Resources, LLC and its Affiliates | |||||||||||||
TRANSACTIONS WITH ATLAS RESOURCES, LLC AND ITS AFFILIATES | NOTE 7 — TRANSACTIONS WITH ATLAS RESOURCES, LLC AND ITS AFFILIATES
The Partnership has entered into the following significant transactions with the MGP and its affiliates as provided under its Partnership Agreement:
The MGP and its affiliates perform all administrative and management functions for the Partnership including billing revenues and paying expenses. Accounts receivable-affiliate on the Partnership's balance sheets represents the net production revenues due from the MGP.
Subordination by Managing General Partner
Under the terms of the Partnership Agreement, the MGP may be required to subordinate up to 50% of its share of production revenues of the Partnership to the benefit of the limited partners for an amount equal to at least 10% of their net subscriptions, determined on a cumulative basis, in each of the first five years of Partnership operations, commencing with the first distribution to the investor partners (June 2004) and expiring 60 months from that date. Since inception of the Partnership, the MGP has not been required to subordinate any of its revenues to its limited partners. |
Asset Retirement Obligation | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSET RETIREMENT OBLIGATION | NOTE 3 — ASSET RETIREMENT OBLIGATION
The Partnership recognizes an estimated liability for the plugging and abandonment of its oil and gas wells and related facilities. It also recognizes a liability for future asset retirement obligations if a reasonable estimate of the fair value of that liability can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Partnership also considers the estimated salvage value in the calculation of depletion.
The estimated liability is based on the MGP's historical experience in plugging and abandoning wells, estimated remaining lives of those wells based on reserve estimates, external estimates as to the cost to plug and abandon the wells in the future and federal and state regulatory requirements. The liability is discounted using an assumed credit-adjusted risk-free interest rate. Revisions to the liability could occur due to changes in estimates of plugging and abandonment costs or remaining lives of the wells or if federal or state regulators enact new plugging and abandonment requirements. The Partnership has no assets legally restricted for purposes of settling asset retirement obligations. Except for its oil and gas properties, the Partnership has determined that there are no other material retirement obligations associated with tangible long-lived assets. A reconciliation of the Partnership's liability for plugging and abandonment costs for the periods indicated is as follows:
|
Derivative Instruments | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS | NOTE 4 — DERIVATIVE INSTRUMENTS
The MGP, on behalf of the Partnership, historically used a number of different derivative instruments, principally swaps and collars, in connection with its commodity price risk management activities. The MGP entered into financial instruments to hedge the Partnership's forecasted natural gas and crude oil against the variability in expected future cash flows attributable to changes in market prices. Swap instruments are contractual agreements between counterparties to exchange obligations of money as the underlying natural gas and crude oil is sold. Under swap agreements, the Partnership received or paid a fixed price and received or remitted a floating price based on certain indices for the relevant contract period. Commodity-based option instruments are contractual agreements that grant the right, but not obligation, to purchase or sell natural gas and crude oil at a fixed price for the relevant contract period.
Historically, the MGP has entered into natural gas and crude oil future option contracts and collar contracts on behalf of the Partnership to achieve more predictable cash flows by hedging its exposure to changes in natural gas and oil prices. At any point in time, such contracts included regulated New York Mercantile Exchange ("NYMEX") futures and options contracts and non-regulated over-the-counter futures contracts with qualified counterparties. NYMEX contracts are generally settled with offsetting positions, but may be settled by the delivery of natural gas. Crude oil contracts are based on a West Texas Intermediate ("WTI") index. These contracts qualified and were designated as cash flow hedges and recorded at their fair values.
The MGP formally documented all relationships between hedging instruments and the items being hedged, including its risk management objective and strategy for undertaking the hedging transactions. This included matching the commodity derivative contracts to the forecasted transactions. The MGP assessed, both at the inception of the derivative and on an ongoing basis, whether the derivative was effective in offsetting changes in the forecasted cash flow of the hedged item. If it determined that a derivative was not effective as a hedge or that it had ceased to be an effective hedge due to the loss of adequate correlation between the hedging instrument and the underlying item being hedged, the MGP discontinued hedge accounting for the derivative and subsequent changes in the derivative fair value, which was determined by the MGP through the utilization of market data, were recognized immediately within gain (loss) on mark-to-market derivatives in the Partnership's statements of operations. For derivatives qualifying as hedges, the Partnership recognized the effective portion of changes in fair value in partners' capital as accumulated other comprehensive income and reclassified the portion relating to commodity derivatives to gas and oil production revenues for the Partnership's derivatives within the Partnership's statements of operations as the underlying transactions were settled. For non-qualifying derivatives and for the ineffective portion of qualifying derivatives, the Partnership recognized changes in fair value within gain (loss) on mark-to-market derivatives in its statements of operations as they occurred. Prior to the sale on February 17, 2011 of the Transferred Business, Atlas Energy, Inc. monetized its derivative instruments related to the Transferred Business. The monetized proceeds related to instruments that were originally put into place to hedge future natural gas and oil production of the Transferred Business, including production generated through its drilling partnerships. At September 30, 2011, the Partnership recorded a net receivable from the monetized derivative instruments of $225,100 in accounts receivable-affiliate and $171,100 in long-term receivable-affiliate with the corresponding net unrealized gains in accumulated other comprehensive income on the Partnership's balance sheets, which will be allocated to natural gas and oil production revenue generated over the period of the original instruments' term. As a result of the monetization and the early settlement of natural gas and oil derivative instruments and the unrealized gains recognized in income in prior periods due to natural gas and oil property impairments, the Partnership recorded a net deferred gain on its balance sheets in other comprehensive income of $170,200 as of September 30, 2011. Unrealized gains, net of the MGP's interest, previously recognized into income as a result of prior period impairments included in accumulated other comprehensive income were $112,800 and $113,200 for the year ended December 31, 2010 and prior periods, respectively. The MGP's portion of the unrealized gains was written-off as part of the terms related to the acquisition of the Transferred Business. For the nine months ended September 30, 2011, the Partnership reclassified $184,200 of unrealized gains previously recognized into income from prior period impairments related to the MGP from a hedge receivable due from affiliate to a non-cash distribution to the MGP. As such, $184,200 was recorded as a distribution to partners on the statement of changes in partners' capital. During the nine months ended September 30, 2011, $215,000 of monetized proceeds were recorded by the Partnership and allocated only to the limited partners. Of the remaining $170,200 of net unrealized gain in accumulated other comprehensive income, the Partnership will reclassify $94,000 of net gains to the Partnership's statements of operations over the next twelve month period and the remaining $76,200 in later periods.
The following tables summarize the fair value of the Partnership's derivative instruments as of December 31, 2010, as well as the gain or loss recognized in the statements of operations for the three and nine months ended September 30, 2011 and 2010:
Fair Value of Derivative Instruments:
Effects of Derivative Instruments on Statements of Operations:
|
K-=OKE-U'#JU-.=0Z:'VBP2=MKN$A$"X5(5RVR:']H^)^'S*>';AB)\N8:H
MG1DYLV:R%:D$6#ER51`>IO2JU:+OGQ6ICQIIZB,DR2MSUXQ;4SU+7&3*FZOB
MET->2">$N$9I])+RS%6PYS&R?IEQZUDN9O%B C)K>HB4MW4Z]TV)!*,U>8S6SVDE&L9&IAHG32
MQ`[Q"2-C75%OU+O$U.$52QJ0!CM]=3FI\[KI` %_7`WM>;%,Y'!"W>A]V#;*9M;@!C
M=_H8.J$?/I#=X!^JF 29
M7Q3V2^<.%))ZPN$047@)S,-*,0!T]86(9$U7)*F`CR1%/H)E8V`QD-1(?`J#
M<@)8[T@V'KD#:F'MXC0=939I=H+D=N^X*FZP_0U.A<+N5"B,!(Z=WIXHXH6D
MW8:@<_@K;'?U,KL@>$NN0'@5=BYP1935IBDPR)U(OUV/A0#!JLCQ,+3PC)
MP\0GPB/UNX'3==`C)/!Y6,X7SQ,7;'YYA_5:NYTX%W[GPR50V5F#RE:MN5LB
MUXD*U-IG]3V@\D\QY)]"D^_G$_=F)-7ZG-$BNXS\VWWV8O6\($$\R1&,[\W+
MZ^8X&9U9BF,,$+S(>EE)%5NGC4V)%$))A*O*,SM9XO*^5PYAJRWBTV:>2J]*
M74KK-HG0:V?G4*?OY#MX:
MSLB,AER\FV+J[V![#;Y`+GF2$(6_W
Comprehensive (Loss) Income | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive (Loss) Income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE (LOSS) INCOME | NOTE 5 — COMPREHENSIVE (LOSS) INCOME
Comprehensive (loss) income includes net loss and all other changes in the equity of a business during a period from transactions and other events and circumstances from non-owner sources that, under accounting principles generally accepted in the United States of America have not been recognized in the calculation of net loss. These changes, other than net loss, are referred to as "other comprehensive (loss) income" and for the Partnership includes changes in the fair value of unsettled derivative contracts accounted for as cash flow hedges, and changes in the estimated amount of future monetized proceeds to be received (See Note 4). The monetized proceeds included in accounts receivable affiliate have been allocated to the Partnership based on estimated future production in relation to all other partnerships' future production eligible to receive monetized hedge proceeds. As actual production is realized, there may be a corresponding difference in the Partnership's actual share of monetized hedge proceeds received than what was previously estimated. This component is shown as "Difference in estimated monetized gains receivable." The following table sets forth the calculation of the Partnership's comprehensive (loss) income:
|
Statement of Changes in Partners' Capital (USD $) | Managing General Partner [Member] | Limited Partners [Member] | Accumulated Other Comprehensive Income [Member] | Total |
---|---|---|---|---|
Balance at Dec. 31, 2010 | $ 5,428,400 | $ (1,131,000) | $ 48,100 | $ 4,345,500 |
Participation in revenues and expenses: | ||||
Net production revenues | 110,400 | 420,000 | 530,400 | |
Interest income | 100 | 100 | 200 | |
Depletion | (86,600) | (328,300) | (414,900) | |
Accretion of asset retirement obligation | (48,800) | (90,700) | (139,500) | |
General and administrative | (59,200) | (110,000) | (169,200) | |
Net loss | (84,100) | (108,900) | (193,000) | |
Other comprehensive income | 122,100 | 122,100 | ||
Working interest adjustment | (3,045,100) | 3,045,100 | 0 | |
Distributions to partners | (381,000) | (429,000) | (810,000) | |
Balance at Sep. 30, 2011 | $ 1,918,200 | $ 1,376,200 | $ 170,200 | $ 3,464,600 |
Description of Business and Basis of Presentation | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Description of Business and Basis of Presentation | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1 — DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Atlas America Public #12-2003 Limited Partnership (the "Partnership") is a Delaware limited partnership and formed on July 15, 2003 with Atlas Resources, LLC serving as its Managing General Partner and operator ("Atlas Resources" or "MGP"). Atlas Resources is an indirect subsidiary of Atlas Energy, L.P., formerly Atlas Pipeline Holdings, L.P. ("Atlas Energy") (NYSE: ATLS). On February 17, 2011, Atlas Energy, a then-majority owned subsidiary of Atlas Energy, Inc. and parent of the general partner of Atlas Pipeline Partners, L.P. ("APL") (NYSE: APL), completed an acquisition of assets from Atlas Energy, Inc., which included its investment partnership business; its oil and gas exploration, development and production activities conducted in Tennessee, Indiana, and Colorado, certain shallow wells and leases in New York and Ohio, and certain well interests in Pennsylvania and Michigan; and its ownership and management of investments in Lightfoot Capital Partners, L.P. and related entities (the "Transferred Business").
Atlas Energy recently announced that it intends to create a newly formed exploration and production master limited partnership named Atlas Resource Partners, L.P. ("Atlas Resource Partners"), which will hold substantially all of ATLS' current natural gas and oil development and production assets and the partnership management business.
Atlas Resources' focus is on the development and/or production of natural gas and oil in the Appalachian, Michigan, Indiana, and/or Colorado basin regions of the United States of America. Atlas Resources is also a leading sponsor of and manages tax-advantaged direct investment partnerships, in which it co-invests to finance the exploitation and development of its acreage. Atlas Energy Resource Services, Inc. provides Atlas Resources with the personnel necessary to manage its assets and raise capital.
The accompanying financial statements, which are unaudited except that the balance sheet at December 31, 2010 is derived from audited financial statements, are presented in accordance with the requirements of Form 10-Q and accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim reporting. They do not include all disclosures normally made in financial statements contained in the Form 10-K. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto presented in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2010. The results of operations for the three and nine months ended September 30, 2011 may not necessarily be indicative of the results of operations for the year ended December 31, 2011. |
Balance Sheets (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
ASSETS | ||
Cash and cash equivalents | $ 138,700 | $ 152,500 |
Accounts receivable-affiliate | 606,300 | 401,800 |
Short-term hedge receivable due from affiliate | 380,300 | |
Total current assets | 745,000 | 934,600 |
Oil and gas properties, net | 5,803,200 | 6,218,100 |
Long-term hedge receivable due from affiliate | 371,400 | |
Long-term receivable-affiliate | 171,100 | |
TOTAL ASSETS | 6,719,300 | 7,524,100 |
LIABILITIES AND PARTNERS' CAPITAL | ||
Accrued liabilities | 14,800 | 13,200 |
Short-term hedge liability due to affiliate | 1,600 | |
Total current liabilities | 14,800 | 14,800 |
Asset retirement obligation | 3,239,900 | 3,100,400 |
Long-term hedge liability due to affiliate | 63,400 | |
Partners' capital: | ||
Managing general partner | 1,918,200 | 5,428,400 |
Limited partners (4,024 units) | 1,376,200 | (1,131,000) |
Accumulated other comprehensive income | 170,200 | 48,100 |
Total partners' capital | 3,464,600 | 4,345,500 |
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ 6,719,300 | $ 7,524,100 |