U.S. Securities and Exchange Commission
Washington, D.C. 20549
AMENDED
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
[ ] 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 33-82188
Atlas-Energy for the Nineties-Public #3 Ltd.
(Name of small business issuer in its charter)
Pennsylvania 25-1742594
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
311 Rouser Road, Moon Township, Pennsylvania 15108
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (412) 262-2830
Securities registered under Section 12(b) of the Exchange Act
Title of each class Name of each
exchange on which registered
None None
Securities registered under Section 12(g) of the Exchange Act
None
(Title of Class)
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 _____
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ X ]
State issuer's revenues for its most recent fiscal year. $1,423,319
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant. Not Applicable.
Transitional Small Business Disclosure Format (check one):
Yes X No _____
1996 FISCAL YEAR ANNUAL REPORT TO PARTICIPANTS
IN ATLAS-ENERGY FOR THE NINETIES-PUBLIC #3 LTD.
PURSUANT TO SECTION 4.03(B)(1) OF THE PARTNERSHIP AGREEMENT
(A) Audited financial statements of the Partnership for the fiscal year ending
December
31, 1996, are included in this report.
(B) Partnership total fees and compensation including any unaccountable, fixed
payment
reimbursements for Administrative Costs and Operating Costs, paid by the
Partnership,
or indirectly on behalf of the Partnership, to the Managing General
Partner, the Operator
and their Affiliates. $129,470.
Percentage that the annual unaccountable, fixed fee reimbursement for
Administrative
Costs bears to annual Partnership revenues. 1.52%
(C) The Partnership drilled twenty-seven (27) wells during 1995. A total of
26.5 net Partnership
wells. The wells were drilled in Mercer, Lawrence, and Venango County,
Pennsylvania and
Mahoning County, Ohio. Twenty-six were capable of production in
commercial quantities.
One, the Shulties No. 2, in Venango County, Pennsylvania, was completed
and found to be not
capable of production in commercial quantities. There was no production
from this well and it was
plugged and abandoned on August 4, 1995. There were 25.5 Partnership net
wells. All
Partnership wells were on line as of May 4, 1995. There were four
quarterly distributions in 1996
beginning March 5, 1996.
(D) The following table describes the Partnership's twenty-seven wells drilled
in 1995:
Partnership
<TABLE>
<CAPTION>
Wells Location Completed Cost
- --------------------------------------------------------------------------------------- ---------------- --------- ----
<S> <C> <C> <C>
Richardson #6 Lawrence County, PA Yes
Duncan #1 Lawrence County, PA Yes
Coss Unit #4 Mercer County, PA Yes
Richardson #3 Mercer County, PA Yes
Hoagland Unit #2 Mercer County, PA Yes
Law #3 Mercer County, PA Yes
Richardson #4 Mercer County, PA Yes
Law #4 Mercer County, PA Yes
Campbell #3 Mercer County, PA Yes
Pizor Unit #1 Mercer County, PA Yes
McFarland #2 Mercer County, PA Yes
Pizor #3 Mercer County, PA Yes
Sonntag #1 Mercer County, PA Yes
Hillmar #3 Mercer County, PA Yes
Coss #3 Mercer County, PA Yes
Rieger Unit #2 Mercer County, PA Yes
Stockman #1 Mercer County, PA Yes
Hamilton #1 Mercer County, PA Yes
O'Conner #1 Mercer County, PA Yes
Guest #2 Mercer County, PA Yes
Kaltenbaugh #1 Mercer County, PA Yes
Chiappini #1 Mercer County, PA Yes
Kelly Unit #1 Mercer County, PA Yes
Pizor #2 Mercer County, PA Yes
Miller #8 Lawrence County, PA Yes
Schulties #2* Lawrence County, PA Yes
Snowden #1** Mahoning County, OH Yes
* Schulties #2, Plugged and Abandoned August 4, 1995.
** The Partnership has a 50% interest in this well and cost was calculated accordingly.
There were no additional wells drilled or abandoned in 1996.
(E) There were no farmins and joint ventures in 1996.
Wells
- ---------------------------------------------------------------------------------------
<S> <C>
Richardson #6 $228,609
Duncan #1 229,444
Coss Unit #4 222,105
Richardson #3 221,792
Hoagland Unit #2 204,576
Law #3 216,505
Richardson #4 224,053
Law #4 215,010
Campbell #3 212,749
Pizor Unit #1 217,271
McFarland #2 225,374
Pizor #3 218,140
Sonntag #1 224,157
Hillmar #3 217,132
Coss #3 222,835
Rieger Unit #2 215,010
Stockman #1 224,783
Hamilton #1 233,930
O'Conner #1 211,880
Guest #2 220,505
Kaltenbaugh #1 225,687
Chiappini #1 228,365
Kelly Unit #1 210,409
Pizor #2 218,140
Miller #8 232,817
Schulties #2* 195,008
Snowden #1** 91,071
* Schulties #2, Plugged and Abandoned August 4, 1995.
** The Partnership has a 50% interest in this well and cost was calculated accordingly.
There were no additional wells drilled or abandoned in 1996.
(E) There were no farmins and joint ventures in 1996.
<FN>
(F) The Partnership had revenues in 1996. The following schedule reflects the payment of
Partnership costs in 1996.
</TABLE>
Payment of Partnership Costs and
Reconciliation with Article V of the Partnership Agreement
----------------------------------------------------------
<TABLE>
<CAPTION>
Atlas Participants
------------ ------------
Partnership
% Amount
------------ ------------
<S> <C> <C>
Organization & Offering Costs 100% -
Lease Costs 100% -
Operating Costs 25% 9,303
Drilling & Completion Costs 1% -
------------ ------------
9,303 27,911
Also see Statement of Changes in Partners' Capital Accounts in the attached Audited
Financials for December 31, 1996.
(G) A quarterly cash receipts and disbursements statement is attached dated December 5, 1996.
(2) 1996 Partner Form 1065 (K-1) were mailed to each partner by February 21, 1997.
(3) Proved Reserves are found in the Audited Financials under Section 9.(3).
(4) There were various reports prepared by the Partnership and paid for by the Participants.
March 5, 1996: $2,650.00 -- 1995 Partnership Return Preparation Fee.
June 5, 1996: $6,861.32:
$2,613.98 -- 10KSB Filing Fee.
$4,129.00 -- Audit Fee (1995)
$118.34 -- Form 10KSB Fees.
Sept. 5, 1996: $2,317.62:
$2,150.00 -- Legal Expenses.
$167.62 -- Printind Audited Financial Statements.
Dec. 5, 1996: $1,050.00 -- 10QSB Filing Fees.
Participants were notified of these costs in March, June, September, and December 1996.
% Amount Costs
------- ------ ------
, , , ,
ATLAS - ENERGY FOR THE NINETIES - PUBLIC #3 LTD., , , ,
PROGRAM SUMMARY -- DECEMBER 5, 1996, , , ,
Formation Date: 12/30/94 -- First Distribution: 6/5/95, , , ,
, , , ,
, , , ,
, , , ,
, , , ,
PARTNERSHIP CAPITALIZATION, , , Well Activity,
, , , ,
Investor Capital Raised, $5,800,275, , Wells Drilled , 27
Managing General Partner Capital, 1,024,029, , Wells Completed , 27
Total Capital Investment, $6,824,304, , Wells in Production , 26
, , , Plugged & Abandoned , 1
, , , ,
, , , ,
, , , ,
CASH DISTRIBUTION SUMMARY, , , ,
, , , ,
Total Production Revenue -- 24 Production Months, $2,196.29, , ,
ADD: Advance from MGP, , , ,
LESS: Payback Advance from MGP, , , ,
, ________ , , ,
Cash-on-Cash Distribution, $ 2,196.29 , , ,
Annualized Percentage Return to Date, , , 13%,
LESS: Third-Stage Frac Costs, 0 , , ,
, _________, , ,
Cumulative Cash Distributed, , $2,196.29 , ,
, , , ,
, , , ,
, , , ,
, , , ,
CURRENT DISTRIBUTIONS, , Distribution, ,
, , to Partner, , Annualized
, , Per $10,000 Unit, , Per Cent
Production Period , Checks Through, , ,
, , , ,
10/1/95- 1/1/96 , March 5, 1996, 442.10, , 18%
1/1 - 4/1/96 , June 5, 1996, 476.56, , 19%
4/1 - 7/1/96 , September 5, 1996, 361.30, , 14%
7/1 - 9/30/96 , December 5, 1996, 284.05, , 11%
, , ________, , _______
Distributions - 1996 (1 Quarter - 12 Periods), , $1,564.01, , 16%
Distributions - 1995 (3 Quarters - 9 Periods), , $632.28, ,
, , ___________, ,
Total 21 Periods, , $2,196.29, ,
, , , ,
, , , ,
, , , ,
ONE UNIT CUMULATIVE TAX EFFECTED SAVINGS, , , ,
Unit Size, $ 10,000 , , ,
, , , ,
1994 Intangible Drilling Cost (76% write-off), 3,168 , , ,
, , , ,
Cumulative Depletion Allowance, 204 , , ,
Tangible Deductions , , , , __________, , ,
Total Tax & Percentage Savings to Date , $ 3,372.00 , , 34%,
Total Cash Distributions, $ 2,196.29 , , ,
, __________, , ,
, , , ,
TOTAL NET TAX SAVINGS & CASH DISTRIBUTED PER UNIT, , $5,568.29, 56%,
, , , ,
, , , ,
, , , ,
Annualized Percent. Simple return based on 30/days
12 month cycle starting with first distribution., , , ,
NOTE: 1 UNIT = .00172% of Partnership distributions, , , ,
DATED: APRIL 24, 1997
</TABLE>
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 #3 Ltd.
<TABLE>
<CAPTION>
<S> <C>
By: (Signature and Title): Atlas Resources, Inc., Managing General Partner
By (Signature and Title): /s/ James R. O'Mara
-----------------------------------------------
James R. O'Mara, President, Chief Executive Officer
and a Director
Date: April 24, 1997
<FN>
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.
</TABLE>
By (Signature and Title): /s/ Charles T. Koval
-----------------------
Charles T. Koval, Chairman of the Board and a Director
Date: April 24, 1997
By (Signature and Title): /s/ James R. O'Mara
----------------------
James R. O'Mara, President, Chief Executive Officer and
a Director
Date: April 24, 1997
By (Signature and Title): /s/ Bruce M. Wolf
--------------------
Bruce M. Wolf, General Counsel, Secretary and a Director
Date: April 24, 1997
By (Signature and Title): /s/ Tony C. Banks
----------------------
Tony C. Banks, Vice President of Finance and Chief Financial Officer
Date: April 24, 1997
============================================================================
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #3 LTD. 12-31-96
AUDITED FINANCIAL STATEMENTS
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #3 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
DECEMBER 31, 1996
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
To The Partners
Atlas-Energy for the Nineties-Public #3 Ltd.
A Pennsylvania Limited Partnership
We have audited the accompanying balance sheets of Atlas-Energy for
the Nineties-Public #3 Ltd., A Pennsylvania Limited Partnership as of
December 31, 1996 and 1995 and the related statements of income, changes in
partners' capital accounts and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Atlas-Energy
for the Nineties-Public #3 Ltd., A Pennsylvania Limited Partnership as of
December 31, 1996 and 1995 and the results of its operations, changes in
partners' capital accounts and cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ McLaughlin & Courson
--------------------------
McLaughlin & Courson
Pittsburgh, Pennsylvania
February 11, 1997
- ------------------------------------------------------------------------
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #3 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
DECEMBER 31,
1996 1995
Cash $ 59,207 $ 22,996
Accounts receivable 246,001 387,590
Oil and gas wells and leases 5,881,534 5,881,534
Less accumulated depletion and depreciation (1,705,697) (809,590)
----------- ----------
4,175,837 5,071,944
Organizational and syndication costs, net of
accumulated amortization of $252,320 and
$119,761, respectively
617,721 750,280
----------- ----------
$ 5,098,766 $6,232,810
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 9,245 $ 8,313
Partners' capital 5,089,521 6,224,497
----------- ----------
$ 5,098,766 $6,232,810
=========== ==========
STATEMENTS OF INCOME
YEAR ENDED
DECEMBER 31
1996 1995
REVENUE
Natural gas sales $ 1,423,319 $1,099,100
Less direct operating costs:
Royalty interests 175,529 134,875
Other 107,766 102,942
---------- ----------
283,295 237,817
---------- ----------
Net production revenues 1,140,024 861,283
Interest income 10,814 3,293
EXPENSES
Depletion and depreciation of oil
and gas wells and leases 896,107 809,590
Amortization of organizational and
syndication costs 132,559 119,761
General and administrative fees 21,704 17,768
Professional fees 14,430 12,592
Loss on disposal of equipment -0- 10,330
Miscellaneous 1,080 3,224
---------- ----------
1,065,880 973,265
---------- ----------
NET INCOME (LOSS) $ 84,958 $ (108,689)
========== ==========
See notes to financial statements
========================================================================
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #3 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL ACCOUNTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
MANAGING
GENERAL OTHER
PARTNER PARTNERS TOTAL
BALANCE AT JANUARY 1, 1995 $1,024,030 $5,810,260 $6,834,290
Participation in revenue and expenses:
Net production revenues 215,321 645,962 861,283
Interest income 622 2,671 3,293
Depletion and depreciation:
Oil and gas wells (7,965) (788,493) (796,458)
Leases (13,132) -0- (13,132)
Amortization (119,761) -0- (119,761)
Loss on disposal of equipment (103) (10,227) (10,330)
Other expenses (8,396) (25,188) (33,584)
---------- ---------- ----------
66,586 (175,275) (108,689)
Distributions (122,710) (378,394) (501,104)
---------- ---------- ----------
BALANCE AT DECEMBER 31, 1995 967,906 5,256,591 6,224,497
Participation in revenue and expenses:
Net production revenues 285,006 855,018 1,140,024
Interest income 2,703 8,111 10,814
Depletion and depreciation:
Oil and gas wells (8,816) (872,756) (881,572)
Leases (14,535) -0- (14,535)
Amortization (132,559) -0- (132,559)
Other expenses (9,303) (27,911) (37,214)
---------- ---------- ----------
122,496 (37,538) 84,958
Distributions (305,083) (914,851) (1,219,934)
---------- ---------- ----------
BALANCE AT DECEMBER 31, 1996 $ 785,319 $4,304,202 $5,089,521
========== ========== ==========
See notes to financial statements
===========================================================================
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #3 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996 AND 1995
YEAR ENDING
DECEMBER 31,
1996 1995
Cash flows from operating activities:
Net income (loss) $ 84,958 $(108,689)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depletion and depreciation of oil and gas
wells and leases 896,107 809,590
Amortization 132,559 119,761
Loss on disposal of equipment -0- 10,330
Decrease (increase) in accounts receivable 141,589 (387,590)
Increase in accounts payable 932 8,313
---------- ----------
Net cash provided by operating activities 1,256,145 451,715
Cash flows from investing activities:
Proceeds from disposal of equipment -0- 62,400
Cash flows from financing activities:
Capital distributions (1,219,934) (501,104)
---------- ----------
Net increase in cash 36,211 13,011
Cash at beginning of year 22,996 9,985
---------- ----------
Cash at end of year $ 59,207 $ 22,996
========== ==========
See notes to financial statements
=============================================================================
NOTES TO FINANCIAL STATEMENTS
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #3 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
DECEMBER 31, 1996
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Atlas-Energy for the Nineties-Public #3 Ltd. (the "Partnership") is a
Pennsylvania limited partnership which includes Atlas Resources, Inc.
("Atlas") of Pittsburgh, Pennsylvania, as Managing General Partner and
Operator, and 396 other investors as either Investor General Partners or
Limited Partners. The Partnership was funded to drill and operate oil and
gas wells located primarily in southwestern Mercer County, Pennsylvania.
At December 31, 1996 the Partnership has working interests in 25.5 wells.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared in accordance with generally
accepted accounting principles.
The Partnership uses the successful efforts method of accounting for
oil and gas producing activities. Property acquisition costs are
capitalized when incurred. Development costs, including equipment and
intangible drilling costs related to both producing wells and dry holes,
are capitalized. All capitalized costs including organization and
syndication costs are generally depreciated, depleted and amortized on the
unit-of-production method using estimates of proven reserves. Oil and gas
properties are periodically assessed for impairment of value, and losses
recognized at the time of impairment.
3. FEDERAL INCOME TAXES
The Partnership is not treated as a taxable entity for federal income
tax purposes. Any item of income, gain, loss, deduction or credit flows
through to the partners as though each partner had incurred such item
directly. As a result, each partner must take into account his pro rata
share of all items of partnership income and deductions in computing his
federal income tax liability. Many provisions of the federal income tax
laws are complex and subject to various interpretations.
4. PARTICIPATION IN REVENUES AND COSTS
Atlas and the other partners generally participate in revenues and
costs in the following manner:
SUBSCRIBING
ATLAS PARTNERS
---------- --------------
Organization and offering costs 100 % 0 %
Lease costs 100 % 0 %
Revenues 25 % 75 %
Direct operating costs 25 % 75 %
Drilling and completion costs 1 % 99 %
Tax deductions:
Intangible drilling and development
costs 1 % 99 %
Depreciation 1 % 99 %
Depletion allowances 25 % 75 %
5. TRANSACTIONS WITH ATLAS AND ITS AFFILIATES
The Partnership has entered into the following significant
transactions with Atlas and its affiliates.
Drilling contracts to drill and complete Partnership wells at
an anticipated cost of $34.78 per foot on completed wells.
Administrative costs at $75 per well per month
Well supervision fees initially of $275 per well per month plus
the cost of third party materials and services
Gas transportation and marketing charges at competitive rates
which currently is 29 cents per MCF
6. PURCHASE COMMITMENT
Subject to certain conditions, investor partners may present their
interests beginning in 1998 for purchase by Atlas. Atlas is not obligated
to purchase more then 5% of the units in any calendar year.
7. SUBORDINATION OF MANAGING GENERAL PARTNER'S REVENUE SHARE
Atlas will subordinate a part of its partnership revenues in an
amount up to 10% of production revenues of the Partnership net of related
operating costs, administrative costs and well supervision fees to the
receipt by participants of cash distributions from the Partnership equal to
at least 10% of their agreed subscriptions of $5,815,000 determined on a
cumulative basis, in each of the first five years of Partnership
operations, commencing with the first distribution of revenues to the
Participants (June, 1995).
Cash distributions to participants for the subordination year ended
in 1996 amounted to $624,638.
Cash distributions to participants in 1996 for the subordination year
ending in 1997 amounted to $652,274.
8. INDEMNIFICATION
In order to limit the potential liability of the investor general
partners, Atlas and AEG Holdings, Inc. (parent company of Atlas) have
agreed to indemnify each investor general partner from any liability
incurred which exceeds such partner's
share of Partnership assets.
9. NATURAL GAS AND OIL PRODUCING ACTIVITIES (UNAUDITED)
The supplementary information summarized below presents the results
of natural gas and oil activities in accordance with SFAS No. 69,
"Disclosures About Oil and Gas Producing Activities."
No consideration has been given in the following information to the
income tax effect of the activities as the Partnership is not treated as a
taxable entity for income tax purposes.
(1) Production Costs
The following table presents the costs related to natural gas and oil
production activities:
Capitalized costs at December 31: 1996 1995
---------- ----------
Capitalized costs $ 5,881,534 $5,881,534
Accumulated depreciation and depletion (1,705,697) (809,590)
---------- ----------
Net capitalized costs $ 4,175,837 $5,071,944
========== ==========
Costs incurred during the year:
Property acquisition costs - proved
undeveloped properties $ -0- $ -0-
========== ==========
Development costs $ -0- $5,786,134
========== ==========
Property acquisition costs include costs to purchase, lease or
otherwise acquire a property. Development costs include costs to gain
access to and prepare development well locations for drilling, to drill and
equip development wells and to provide facilities to extract, treat, gather
and store oil and gas.
(2) Results of Operations for Producing Activities
The following table presents the results of operations related
to natural gas and oil production for the year ended December 31,
1996 and 1995.
1996 1995
------------ -----------
Revenues $ 1,247,790 $ 964,225
Production costs (107,766) (102,942)
Depreciation and depletion (896,107) (809,590)
------------ -----------
Results of operations from producing
activities $ $243,917 $ 51,693
============ ===========
Depreciation and depletion of natural gas and oil properties
are expensed at unit cost rates calculated annually
based on the estimated volume of recoverable gas and the related
costs.
(3) Reserve Information
The information presented below represents estimates of proved
natural gas and oil reserves. Proved developed reserves represent only
those reserves expected to be recovered from existing wells and support
equipment. Proved undeveloped reserves represent proved reserves expected
to be recovered from new wells after substantial development costs are
incurred. All reserves are located in Eastern Ohio and Western
Pennsylvania.
1996 1995
NATURAL GAS OIL NATURAL GAS OIL
MCF (BARRELS) MCF (BARRELS)
--------------------------------------------------
Proved developed and
undeveloped reserves:
Beginning of period 3,310,827 14,231 -0- -0-
Production (541,403) (247) (496,710) (586)
Revision of previous
estimates 731,616 (11,716) 3,807,537 14,817
---------- ---------- ----------- --------
End of period 3,501,040 2,268 3,310,827 14,231
========== ========== ========== ========
Proved developed reserves:
Beginning of period 3,310,827 14,231 -0- -0-
========= ========== ========== ========
End of period 3,501,040 2,268 3,310,827 14,231
========= ========== ========== ========
9. NATURAL GAS AND OIL PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED)
(4) Standard Measure of Discounted Future Cash Flows
Management cautions that the standard measure of discounted
future cash flows should not be viewed as an indication of the fair market
value of natural gas and oil producing properties, nor of the future cash
flows expected to be generated therefrom. The information presented does
not give recognition to future changes in estimated reserves, selling
prices or costs and has been discounted at an arbitrary rate of 10%.
Estimated future net cash flows from natural gas and oil reserves based on
selling prices and costs at December 31, 1996 and 1995
price levels are as follows:
1996 1995
---------- ----------
Future cash inflows $ 7,490,988 $ 7,676,049
Future production costs (2,521,464) (2,435,934)
Future development costs -0- -0-
---------- ----------
Future net cash flow 4,969,524 5,240,115
10% annual discount for estimated timing
of cash flows (2,333,095) (2,283,480)
---------- ----------
Standardized measure of discounted
future net cash flows
$ 2,636,429 $ 2,956,635
========== ==========
Summary of changes in the standardized measure of discounted future
net cash flows:
Sales of gas and oil produced - net $(1,118,320) $ (830,922)
Development costs incurred -0- 5,881,534
Net purchase of reserves in place -0- (2,093,977)
Net changes in prices, production and
development costs (130,238) -0-
Revisions of previous quantity estimates 550,906 -0-
Accretion of discount 377,446 -0-
----------- ------------
Net (decrease) increase (320,206) 2,956,635
Beginning of period 2,956,635 -0-
----------- ------------
End of period $ 2,636,429 $ 2,956,635
=========== ============
