U.S. Securities and Exchange Commission
Washington, D.C. 20549
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 33-95330
Atlas-Energy for the Nineties-Public #4 Ltd.
(Name of small business issuer in its charter)
Pennsylvania 25-1772474
(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. $1,339,327
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 ___
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PART I
Item 1. Description of Business
Atlas-Energy for the Nineties-Public #4 Ltd. (the "Partnership") was
formed under the Pennsylvania Revised Uniform Limited Partnership Act on
July 5, 1995, with Atlas Resources, Inc. ("Atlas") as Managing General
Partner. The Partnership had its initial and final closing on December 27,
1995, and was funded with subscriptions of $6,991,350 to drill natural gas
development wells. Also, on December 27, 1995, the Managing General Partner
was credited with a total capital contribution of $1,423,652 because of
certain expenditures it made on behalf of the Partnership and certain
prospects it contributed to the Partnership.
The Partnership has not filed bankruptcy nor has the Partnership been
involved in any material reclassification, merger, consolidation,
receivership or similar proceeding or purchase or sale of a significant
amount of assets not in the ordinary course of business.
The Partnership was funded to drill natural gas development wells with
the objective being the discovery and production of natural gas in
commercially marketable quantities. Because the initial and final closing
date was December 27, 1995, the Partnership did not conduct any drilling
activities in 1995; however, the Partnership did prepay the drilling and
operating agreement on December 27, 1995, in an amount equal to $7,230,399.
In this regard, on December 27, 1995, the Partnership, which has no
employees, entered into the drilling and operating agreement with Atlas to
drill 31.5 development wells to the Clinton/Medina geological formation.
All of the prospects selected by Atlas for drilling are located in Mercer
and Venango Counties, Pennsylvania. Atlas and its affiliates' had
sufficient leasehold inventory to provide all of the prospects to be
developed by the Partnership. See "Description of Property".
For the next twelve months management believes that the Partnership has
adequate capital in order to conduct its operations. The Partnership had
sufficient capital resources from the closing to drill and develop
approximately 31.5 net wells. No other wells will be drilled and therefore
no additional funds will be required. The payment of operating and
maintenance costs did not begin until the Partnership wells begin to
generate revenue. Although management does not anticipate that the
Partnership will have to do so, any additional funds which may be required
will be obtained from production revenues from Partnership wells or from
borrowings by the Partnership from Atlas or its affiliates, although Atlas
is not contractually committed to make such a loan. No borrowings will be
obtained from third parties. The amount that may be borrowed by the
Partnership from Atlas and its affiliates, if any amounts are borrowed, may
not at any time exceed 5% of the Partnership subscription.
With respect to operating and maintenance costs, the Partnership's
commitments pursuant to the drilling and operating agreement are being
fulfilled through revenues generated from the sale of gas. During producing
operations Atlas, as operator, receives a monthly well supervision fee of
$275 (proportionately reduced to the extent less than 100% of the working
interest was acquired) for each producing well for which it has
responsibility under the drilling and operating agreement. The well
supervision fee covers all normal and regularly recurring operating expenses
for the production, delivery and sale of gas, such as well tending, routine
maintenance and adjustment, reading meters, recording production, pumping,
maintaining appropriate books and records, preparing reports to the
Partnership and to government agencies, and collecting and disbursing
revenues. The well supervision fees do not include costs and expenses
related to the production and sale of oil, purchase of equipment, materials
or third party services, brine disposal, and rebuilding of access roads, all
of which are billed at the invoice cost of materials purchased or third
party services performed. As operator Atlas charges the Partnership at cost
for third party services and materials provided for each well which has been
placed in operation, and a reasonable charge for services performed directly
by Atlas or its affiliates. The drilling and operating agreement also gives
the operator the right at any time after three years from the date a
Partnership well has been placed into production to retain $200 per month to
cover future plugging and abandonment of such well.
Natural gas produced by the wells developed by the Partnership must be
marketed in order for the Partnership to realize revenues from such
production. The Partnership did not purchase and does not anticipate
selling, any producing wells. In recent years natural gas and oil prices
have been volatile. The marketing of natural gas and oil production is also
affected by numerous factors beyond the control of the Partnership and the
effect of which cannot be accurately predicted. These factors include the
availability and proximity of adequate pipeline or other transportation
facilities; the amount of domestic production and foreign imports of oil and
gas; competition from other energy sources such as coal and nuclear energy;
local, state and federal regulations regarding production and the cost of
complying with applicable environmental regulations; and fluctuating
seasonal supply and demand. For example, the demand for natural gas is
greater in the winter months than in the summer months, which is reflected
in a higher spot market price paid for such gas. Also, increased imports
of oil and natural gas have occurred and are expected to continue, and the
free trade agreement between Canada and the United States has eased
restrictions on imports of Canadian gas to the United States. In the past
the reduced demand for natural gas and/or an excess supply of gas has
resulted in a lower price paid for the gas. It has also resulted in some
purchasers curtailing or restricting their purchases of natural gas;
renegotiating existing contracts to reduce both take-or-pay levels and the
price paid for delivered gas; and other difficulties in the marketing of
production.
The Clean Air Act Amendments of 1990 contain incentives for the future
development of "clean alternative fuel," which includes natural gas and
liquefied petroleum gas for "clean-fuel vehicles". The Partnership believes
the amendments ultimately will have a beneficial effect on natural gas
markets and prices.
The Managing General Partner is responsible for selling the
Partnership's gas and oil production. Atlas' policy is to treat all wells
in a given geographic area equally. This reduces certain potential
conflicts of interest among the owners of the various wells, including the
Partnership, concerning to whom and at what price the gas will be sold.
Atlas calculates a weighted average selling price for all of the gas sold in
the geographic area, such as the Mercer County area. To arrive at the
average weighted selling price the money received from the sale of all of
the gas sold to its customers is divided by the volume of all gas sold from
the wells in the area. On occasion, Atlas has reduced the amount of
production it normally sells on the spot market until the spot market price
increased.
In the Mercer County area, a portion of the Partnership's gas is
transported through Atlas' own pipeline system and sold directly to
industrial end-users in the area where the wells were drilled. This will
generally result in the Partnership receiving higher prices for the gas than
if the gas were transported a farther distance through interstate pipelines
because of increased transportation charges. The remainder of the
Partnership's gas is transported through Atlas' pipelines to the
interconnection points maintained with Tennessee Gas Transmission Co.,
National Fuel Gas Supply Corporation, National Fuel Gas Distribution
Company, East Ohio Natural Gas Company and Peoples Natural Gas Company.
These delivery points are utilized by Atlas Gas Marketing, Inc. to service
its end-user markets in the northeast United States which include in excess
of 100 customers. Atlas is currently delivering an average 27,000 MCF of
natural gas per day from the Mercer County area to all of the aforementioned
markets and has the capacity of delivering 33,000 MCF per day from the
Mercer County area. Atlas anticipates that Carbide Graphite will purchase
approximately 20% of the Partnership's gas production through September,
1997, pursuant to a gas contract between Carbide Graphite and an affiliate
of Atlas. Atlas does not believe that any other purchaser of the
Partnership's gas production will account for 10% of the Partnership's gas
sales revenues in 1997. See "Financial Statements".
In order to optimize the price it receives for the sale of natural gas,
Atlas markets portions of the gas through long term contracts, short term
contracts, and monthly spot sales. The marketing of natural gas production
has been influenced by the availability of certain financial instruments,
such as gas futures contracts, options and swaps which, when properly
utilized as hedge instruments, provide producers or consumers of gas with
the ability to lock in the price which will ultimately be paid for the
future deliveries of gas. Atlas is utilizing financial instruments to hedge
the price risks of the Partnership's gas production. To assure that the
financial instruments will be used solely for hedging price risks and not
for speculative purposes, Atlas has established an Energy Price Risk
Committee comprised of the President, General Counsel, Chief Financial
Officer (chairperson) and Director of Marketing, whose responsibility will
be to ascertain that all financial trading is done in compliance with
hedging policies and procedures. Atlas does not intend to contract for
positions that it cannot offset with actual production.
There are many companies, partnerships and individuals engaged in
natural gas exploration, development and operations in the areas where the
Partnership is conducting its activities. The industry is highly
competitive in all of its phases, including the marketing of natural gas and
oil. With respect to the marketing of the Partnership's gas the Partnership
should, through the use of Atlas' distribution system and Atlas'
experienced marketing staff, be able to sell the Partnership's gas.
The Partnership has not and will not devote any funds to research and
development activities. There are no new products or services and the
Partnership does not have any patents, trademarks, licenses, franchises,
concessions, royalty agreements or labor contracts.
Oil and gas operations are regulated in Pennsylvania by the Department
of Environmental Resources, Division of Oil and Gas, which imposes a
comprehensive statutory and regulatory scheme with respect to oil and gas
operations. Among other things, such regulations involve (a) new well
permit and well registration requirements, procedures and fees, (b)
minimum well spacing requirements, (c) restrictions on well locations and
underground gas storage, (d) certain well site restoration, groundwater
protection and safety measures, (e) landowner notification requirements,
(f) certain bonding or other security measures, (g) various reporting
requirements, (h) well plugging standards and procedures, and (i) broad
enforcement powers. Generally, the regulatory agency in the state where a
producing natural gas well is located supervises production activities and
the transportation of natural gas sold intrastate. Atlas does not expect
that such regulations will have a material adverse impact upon the
operations of the Partnership, and the Partnership believes it has complied
in all material respects with applicable state regulations and will
continue to do so.
The Federal Energy Regulatory Commission ("FERC") regulates the
interstate transportation of natural gas and the pricing of natural gas sold
for resale interstate; and under the Natural Gas Policy Act of 1978 ("NEPA")
the price of intrastate gas. However, price controls for natural gas
production from new wells were deregulated on December 31, 1992 and such
deregulated gas production may be sold at market prices determined by
supply, demand, BTU content, pressure, location of the wells, and other
factors.
Although the transportation and sale of gas in interstate commerce
remains heavily regulated, FERC has sought to promote greater competition in
natural gas markets by encouraging open access transportation by interstate
pipelines, with the goal of expanding opportunities for producers to
contract directly with local distribution companies and end-users. FERC
Order 636 which became effective May 18, 1992, requires gas pipeline
companies to, among other things, separate their sales services from their
transportation services; and provide an open access transportation service
that is comparable in quality for all gas suppliers. The premise behind
FERC Order 636 was that the gas pipeline companies had an unfair advantage
over other gas suppliers because they could bundle their sales and
transportation services together. FERC Order 636 is designed to create a
regulatory environment in which no gas seller has a competitive advantage
over another gas seller because it also provides transportation services
which should provide a benefit to the Partnership.
The Partnership does not expect to sell any oil.
From time to time there are a number of proposals being considered in
Congress and in the legislatures and agencies of various states that if
enacted would significantly and adversely affect the oil and natural gas
industry. Such proposals involve, among other things, the imposition of new
taxes on natural gas and limiting the disposal of waste water from wells.
At the present time, it is impossible to accurately predict what proposals,
if any, will be enacted by Congress or the legislatures and agencies of
various states and what effect any proposals which are enacted will have on
the activities of the Partnership.
Various federal, state and local laws and regulations covering the
discharge of materials into the environment, or otherwise relating to the
protection of the environment, may affect the Partnership's operations and
costs as a result of their effect on oil and gas exploration, development
and production activities. The Partnership may generally be liable for
cleanup costs to the United States Government under the Federal Clean Water
Act for oil or hazardous substance pollution and under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or
Superfund) for hazardous substance contamination. Such liability is
unlimited in cases of willful negligence or misconduct, and there is no
limit on liability for environmental cleanup costs or damages with respect
to claims by the state or private persons or entities. In addition, the
Environmental Protection Agency will require the Partnership to prepare and
implement spill prevention control and countermeasure plans relating to the
possible discharge of oil into navigable waters and will further require
permits to authorize the discharge of pollutants into navigable waters.
State and local permits or approvals will also be needed with respect to
wastewater discharges and air pollutant emissions. Violations of
environment-related lease conditions or environmental permits can result in
substantial civil and criminal penalties as well as potential court
injunctions curtailing operations. Such enforcement liabilities can result
from either government or citizen prosecution. Compliance with these
statutes and regulations may cause delays in producing natural gas and oil
from the wells and may increase substantially the cost of producing such
natural gas and oil. However, such laws and regulations are constantly
being revised and changed, and the Partnership is unable to predict the
ultimate costs of complying with present and future environmental laws and
regulations, although it does not believe such costs will be substantial.
The Partnership is unable to obtain insurance to protect against many
environmental claims.
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Item 2. Description of Property
Drilling Activity. The Partnership drilled 31.5 net wells, all of
which were productive. All of the wells were drilled and completed by the
Partnership as of March 31, 1996. No further drilling activities will be
undertaken.
The following table summarizes the Partnership's drilling activity since
its formation. All of the wells drilled were development wells which means
a well drilled within the proved area of an oil or gas reservoir to the
depth of a stratigraphic horizon known to be productive. A "dry hole" is an
exploratory or a development well found to be incapable of producing either
oil or gas in sufficient quantities to justify completion as an oil or gas
well. A "productive well" is an exploratory or a development well that is
not a dry well.
Year Ended December 31,
1995 1996
Gross Net Gross Net
Development Wells:
Oil 0 0 0 0
Gas 0 0 32 31.5
Dry 0 0 0 0
Total 0 0 32 31.5
A "gross" well is a well in which the Partnership has a working
interest. A "net" well is deemed to exist when the sum of the fractional
ownership working interests owned by the Partnership in gross wells equals
one. The number of net wells is the sum of the fractional working interests
owned in gross wells expressed as whole numbers and fractions thereof.
The Partnership has not participated, and will not participate, in any
exploratory wells which means a well drilled to find commercially productive
hydrocarbons in an unproved area, to find a new commercially productive
horizon in a field previously found to be productive of hydrocarbons at
another horizon, or to significantly extend a known prospect.
Production. The following table shows the Partnership's net production
in barrels ("Bbls") of crude oil and in thousands of cubic feet ("Mcf") of
natural gas and the costs and weighted average selling prices thereof, for
the periods indicated.
Year Ended December 31,
1995 1996
Production (1):
Oil (Bbls) 0 0
Natural Gas (Mcf) 0 523,279
Total (Equivalent Barrels) (2) 0 87,214
Average Sales Price:
Per Equivalent Barrel (2)(3) 0 $13.44
Average Production Cost (lifting cost):
Per Equivalent Barrel (2)(4) 0 $1.44
(1) The production shown in the table is determined by multiplying
the gross production of properties in which the Partnership has an
interest by the percentage of the leasehold interest owned by the
Partnership less the royalty interests of others. Thirty-one of the
properties owned by the Partnership are subject to a 12.5%
landowner's royalty and the Partnership has an 87.5% net revenue
interest. One property is subject to a 1/32 (3.125%) overriding
royalty interest in addition to a 12.5% landowner's royalty and the
Partnership has an 84.37% net revenue interest.
(2) The ratio of energy content of oil and gas (six Mcf of gas
equals one barrel of oil) was used to convert natural gas production
into equivalent barrels of oil.
(3) The average sales price per barrel of oil sold by the
Partnership was $19.50 in 1996. The average sales price per Mcf of
gas sold by the Partnership was $2.29 after deducting all expenses,
including transportation expenses in 1996.
(4) Production costs represent oil and gas operating expenses as
reflected in the financial statements of the Partnership plus
depreciation of support equipment and facilities.
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Summary of Productive Wells. The table below gives the number of the
Partnership's productive gross and net wells at December 31, 1996.
Gas Wells Oil Wells Total
Location
Gross Net Gross Net Gross Net
Pennsylvania 32 31.5 0 0 32 31.5
Total 32 31.5 0 0 32 31.5
"Productive wells" are producing wells and wells capable of production.
Oil and Gas Reserves. All of the Partnership's oil and gas reserves are
located in the United States. Estimates of the Partnership's net proved
developed and undeveloped oil and gas reserves as of December 31, 1996, and
the present value (discounted at 10%) of estimated future net revenue before
income tax from those reserves are set forth in the following table. This
information is derived from the engineering report dated July 31, 1996.
As of December 31, 1996
Net Proved Reserves
Oil Gas Total
(Bbls) (McF) (BOE) Present Value of
Future Net Revenues
(in thousands)
Proved Developed 0 3,237,761 539,627 $2,428
Proved Undeveloped 0 0 0 0
Total 0 3,237,761 539,627 $2,428
Estimated future net revenues represent estimated future gross revenues
from the production of proved reserves, net of estimated production and
future development costs, using prices and costs in effect as of December
31, 1996. These prices were held constant throughout the life of the
properties except where different prices were fixed and determinable from
applicable contracts. These price assumptions resulted in weighted average
prices of $18 per barrel for oil and $2.13 per Mcf for gas over the life of
the properties. The amounts shown do not reflect non-property related
costs, such as general and administrative expenses, and future income tax
expense, or depreciation, depletion and amortization. The present value of
estimated future net revenues is calculated by discounting estimated future
net revenues by 10% annually. Prices used in calculating the estimated
future net revenues attributable to proved reserves do not necessarily
reflect market prices for oil and gas production subsequent to December 31,
1996. There can be no assurance that all of the proved reserves will be
produced and sold within the periods assumed, that the assumed prices will
actually be realized for such production, or that existing contracts will be
honored. The values expressed are estimates only, and may not reflect
realizable values or fair market values of the oil and gas ultimately
extracted and recovered. The standardized measure of discounted future net
cash flows may not accurately reflect proceeds of production to be received
in the future from the sale of oil and gas currently owned and does not
necessarily reflect the actual costs that would be incurred to acquire
equivalent oil and gas reserves. For additional information concerning oil
and gas reserves and activities, see Note 9 to the Financial Statements.
"Proved reserves" means the estimated quantities of crude oil, natural
gas, and natural gas liquids which geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions, i.e.,
prices and costs as of the date the estimate is made. Prices include
consideration of changes in existing prices provided only by contractual
arrangements, but not on escalations based upon future conditions.
(i) Reservoirs are considered proved if economic producibility is
supported by either actual production or conclusive formation test.
The area of a reservoir considered proved includes (a) that portion
delineated by drilling and defined by gas-oil and/or oil-water
contacts, if any; and (b) the immediately adjoining portions not yet
drilled, but which can be reasonably judged as economically
productive on the basis of available geological and engineering
data. In the absence of information on fluid contacts, the lowest
known structural occurrence of hydrocarbons controls the lower
proved limit of the reservoir.
(ii) Reserves which can be produced economically through application
of improved recovery techniques (such as fluid injection) are
included in the "proved" classification when successful testing by a
pilot project, or the operation of an installed program in the
reservoir, provides support for the engineering analysis on which
the project or program was based.
(iii) Estimates of proved reserves do not include the following: (a)
oil that may become available from known reservoirs but is
classified separately as "indicated additional reserves"; (b) crude
oil, natural gas, and natural gas liquids, the recovery of which is
subject to reasonable doubt because of uncertainty as to geology,
reservoir characteristics, or economic factors; (c) crude oil,
natural gas, and natural gas liquids, that may occur in undrilled
prospects; and (d) crude oil, natural gas, and natural gas liquids,
that may be recovered from oil shales, coal, gilsonite and other
such sources.
"Proved developed oil and gas reserves" means reserves that can be
expected to be recovered through existing wells with existing equipment and
operating methods. Additional oil and gas expected to be obtained through
the application of fluid injection or other improved recovery techniques for
supplementing the natural forces and mechanisms of primary recovery should
be included as "proved developed reserves" only after testing by a pilot
project or after the operation of an installed program has confirmed through
production response that increased recovery will be achieved.
The Partnership does not have any proved undeveloped reserves. "Proved
undeveloped reserves" are reserves that are expected to be recovered from
new wells on undrilled acreage, or from existing wells where a relatively
major expenditure is required for recompletion. Reserves on undrilled
acreage are limited to those drilling units offsetting productive units that
are reasonably certain of production when drilled. Proved reserves for
other undrilled units can be claimed only where it can be demonstrated with
certainty that there is continuity of production from the existing
productive formation. Under no circumstances should estimates for proved
undeveloped reserves be attributable to any acreage for which an application
of fluid injection or other improved recovery technique is contemplated,
unless such techniques have been proved effective by actual tests in the
area and in the same reservoir.
No major discovery or other favorable or adverse event which would cause
a significant change in estimated reserves is believed by the Company to
have occurred since December 31, 1996. Reserves cannot be measured exactly
as reserve estimates involve subjective judgment. The estimates must be
reviewed periodically and adjusted to reflect additional information gained
from reservoir performance, new geological and geophysical data and economic
changes. The Partnership has not filed any estimates (on a consolidated
basis) of its oil and gas reserves with, nor were such estimates included in
any reports to, any Federal or foreign governmental agency within the 12
months prior to the date of this filing.
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Acreage. The following table sets forth, as of December 31, 1996, the
acres of developed and undeveloped oil and gas acreage in which the
Partnership had an interest.
Developed Acreage Undeveloped Acreage Total
Location Gross Net Gross Net Gross Net
Pennsylvania 1,599.52 1,563.62 0 0 1,599.52 1,563.62
Total 1,599.52 1,563.62 0 0 1,599.52 1,563.62
A "gross" acre is an acre in which the Partnership owns a working
interest. A "net" acre is deemed to exist when the sum of the fractional
ownership working interests owned by the Partnership in gross acres equals
one. The number of net acres is the sum of the fractional working interests
owned in gross acres expressed as whole numbers and fractions thereof.
"Undeveloped acreage" is those lease acres on which wells have not been
drilled or completed to a point that would permit the production of
commercial quantities of oil and gas regardless of whether or not such
acreage contains proved reserves.
Delivery Commitments.
The Partnership is not obligated to provide any determinable quantity of
gas under any existing contracts or agreements. The majority of the
Partnership's gas production from the wells was sold pursuant to short term
contracts, which are term contracts for a period of less than one year, with
the remainder of the Partnership gas production sold on the spot market and
long term contracts, which are term contracts for a period longer than one
year.
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Item 3. Directors, Executive Officers and Significant Employees
Responsibilities of Atlas. The Partnership has no employees and relies
on Atlas as Managing General Partner of the Partnership. Atlas also serves
as driller/operator of the wells. Atlas has complete and exclusive
discretion and control over the operations and activities of the Partnership
and will make all of the Partnership's decisions affecting the wells
developed by the Partnership. Atlas will provide continuing review and
analysis of all wells developed by the Partnership and will monitor all
expenditures and commitments made on behalf of the Partnership. In
addition, Atlas will perform administrative services relating to the funding
and operation of the Partnership, Participant reporting, financial budgeting
and recordkeeping.
Business of Atlas. Atlas, a Pennsylvania corporation, was incorporated
in 1979 and Atlas Energy Group, Inc. ("Atlas Energy"), an Ohio corporation,
was incorporated in 1973. Atlas and Atlas Energy are wholly owned
subsidiaries of AIC, Inc., a corporation formed in July, 1995, which is a
wholly owned subsidiary of The Atlas Group, Inc., ("Atlas Group") that was
formerly known as AEG Holdings, Inc., a corporation which was also formed in
July, 1995. As of December 31, 1996, Atlas and its Affiliates operated
approximately 1,172 natural gas wells located in Ohio and Pennsylvania.
Atlas and Atlas Energy have acted as operator with respect to the drilling
of a total of approximately 1,611 natural gas wells, approximately 1,562 of
which were capable of production in commercial quantities. Atlas' primary
offices are located at 311 Rouser Road, Moon Township, Pennsylvania 15108.
Atlas and its affiliates employ a total of approximately ninety-nine
persons, consisting of three geologists, five landmen, five engineers,
thirty-three operations staff, eight accounting, one legal, eight gas
marketing, and eighteen administrative personnel. The balance of the
personnel are engineering, pipeline and field supervisors.
The other subsidiaries of AIC, Inc. are: (i) Atlas Gas Marketing, Inc.,
a gas marketing company; (ii) Mercer Gas Gathering, Inc., a gas gathering
company which gathers gas from wells in Mercer County, Pennsylvania, and
delivers such gas directly to industrial end-users or to interstate
pipelines and local distribution companies; (iii) Pennsylvania Industrial
Energy, Inc., which sells natural gas to industrial end-users in
Pennsylvania; (iv) Transatco, Inc., which owns a 50% interest in Topico
which operates a pipeline in Ohio; (v) Atlas Energy Corporation, which
serves as managing general partner of exploratory programs and driller and
operator; and (vi) Anthem Securities, Inc., which is registering as a
broker-dealer and becoming a member firm of the NASD. In addition, Atlas is
the sole owner of ARD Investments, Inc., a corporation formed in July, 1995,
and Atlas Energy is the sole owner of AED Investments, Inc., a corporation
formed in July, 1995. Prior to July, 1995, all of the Atlas companies were
wholly owned by Atlas Energy. The purpose of forming Atlas Group, AIC,
Inc., ARD Investments, Inc. and AED Investments, Inc. was to achieve more
efficient concentration of funds of the Atlas group of companies, thereby
minimizing transaction costs and maximizing returns on investment vehicles.
Atlas and its affiliates have constructed for their use over 600 miles
of gas transmission lines and produce in excess of twelve billion cubic feet
of natural gas annually from wells they operate. In addition, Atlas Gas
Marketing, Inc. (an affiliate) purchases for resale an additional nine
billion cubic feet of natural gas annually from third party producers
locally and in the south/southwest United States which is marketed as
described in "Description of Business."
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ORGANIZATIONAL DIAGRAM
The Atlas Group, Inc.
|
|
AIC, Inc.
|
- -----------------------------------|
|
|--Atlas Resources, Inc. (Managing General Partner of Development Drilling
| Programs, Driller and Operator in Pennyslvania)
| |
| ARD Investments, Inc.
|
|--Mercer Gas Gathering, Inc. (Gas Gathering Company)
|
|--Pennsylvania Industrial Energy, Inc. ("PIE") (Sells Gas to Pennsylvania
| Industry)
|
|--Atlas Energy Corporation (Managing General Partner of Exploratory
| Drilling Programs and Driller and Operator)
|
|--Transatco, Inc., which owns 50% of Topico (Operates Pipeline in Ohio)
|
|--Atlas Gas Marketing, Inc. (Markets Natural Gas)
|
|--Anthem Securities Inc. (In the Process of Registering as a Broker-Dealer)
|
|--Atlas Energy Group, Inc. (Driller and Operator in Ohio)
|
|
AED Investments, Inc.
Directors, Executive Officers and Significant Employees of Atlas. The
executive officers, directors and significant employees of Atlas who are
also officers, directors and significant employees of Atlas Group and Atlas
Energy are as follows:
Name Age Positions or Office
Charles T. Koval 63 Chairman of the Board and a Director
James R. O'Mara 53 President, Chief Executive Officer and a
Director
Bruce M. Wolf 48 General Counsel, Secretary and a Director
James J. Kritzo 62 Vice President of the Land Department
Donald P. Wagner 55 Vice President of Operations
Frank P. Carolas 37 Vice President of Geology
Tony C. Banks 42 Vice President of Finance and Chief Financial
Officer
Barbara J. Krasnicki 52 Vice President of Administration
Jacqueline B. Poloka 46 Controller
John A. Ranieri 37 Director of Gas Marketing
Joseph R. Sadowski 66 Director
Charles T. Koval. Chairman of the Board and a director. He co-founded
Atlas Energy. Mr. Koval is serving and has served as a director of Imperial
Harbors since 1980.
James R. O'Mara. President, chief executive officer and a director.
Mr. O'Mara joined Atlas Energy in 1975. He is the President of Mercer Gas
Gathering, Inc.
Bruce M. Wolf. General Counsel, Secretary and a director. Mr. Wolf
joined Atlas Energy in January, 1980. Mr. Wolf is the President of Atlas
Gas Marketing, Inc., AIC, Inc., ARD Investments, Inc. and AED Investments,
Inc.
James J. Kritzo. Vice President of the Land Department. Mr. Kritzo
joined the Land Department of Atlas Energy in 1979.
Donald P. Wagner. Vice President of Operations. Mr. Wagner joined
Atlas Energy in 1979.
Frank P. Carolas. Vice President of Geology. Mr. Carolas joined Atlas
Energy in 1981.
Tony C. Banks. Vice President of Finance and Chief Financial Officer.
Mr. Banks joined Atlas in December, 1994. Prior to Mr. Banks joining Atlas
he had been with affiliates of Consolidated Natural Gas Company ("CNG")
since 1974. Mr. Banks started as an accounting clerk with CNG's parent
company in 1974 and progressed through various positions with CNG's
Appalachian producer, northeast gas marketer and southwest producer to his
last position as Treasurer of CNG's national energy marketing subsidiary.
Barbara J. Krasnicki. Vice President of Administration, Ms. Krasnicki
has been with Atlas Energy since its inception in 1971.
Jacqueline B. Poloka. Controller. Ms. Poloka joined Atlas Energy in
1980.
John A. Ranieri. Director of Gas Marketing for Atlas Gas Marketing,
Inc. Mr. Ranieri was promoted to Gas Procurement Manager of Columbia Gas of
Pennsylvania in 1984 and remained with that organization until joining Atlas
in July, 1990.
Joseph R. Sadowski. A director. He co-founded Atlas Energy. Mr.
Sadowski has served as a director of Dixon Ticonderoga since 1987.
Item 4. Remuneration of Directors and Officers
The Partnership, as previously stated, has no employees. The following
table, however, sets forth all cash compensation paid by Atlas (which has
complete and exclusive discretion and control over the operations and
activities of the Partnership) during Atlas' fiscal year ended July 31,
1996, to the three most highly compensated persons who are executive
officers or directors and to all executive officers and directors of Atlas
as a group, for services in all capacities while acting as executive
officers or directors of Atlas:
Name of individual
or identity of Capacities in which Cash
group (3) remuneration was received(4) Compensation (1)(2)
James R. O'Mara President, Chief Executive Officer $ 305,300
and a Director
Charles T. Koval Chairman of the Board $ 296,500
and a Director
Bruce M. Wolf General Counsel, Secretary $ 217,150
and a Director
Executive Officers $1,383,530
as a Group
(8 persons)
- ------------------------------
(1) The amounts indicated were composed of salaries and all cash bonuses
for services rendered to Atlas and its affiliates during the last fiscal
year, including compensation that would have been paid in cash but for
the fact the payment of such compensation was deferred.
(2) Atlas has an "ESOP" retirement plan, described below, and has a
401(K) plan which allowed employees to contribute the lesser of 15% of
their compensation or $9,500 for the calendar year 1996 or $9,240 for
the calendar year 1995. Atlas contributed an amount equal to 50% and
30% of each employee's contribution for the calendar years July 31, 1996
and 1995, respectively.
(3) There were no stock options granted or exercised during the fiscal
year ended July 31, 1996, to the above individuals.
(4) During the fiscal year ended July 31, 1996, each director was paid a
director's fee of $12,000 for the year. There are no other arrangements
for remuneration of directors.
- ------------------------------------------------------------------------
Item 5. Security Ownership of Management and Certain Securityholders
As of December 31, 1996, the Partnership had issued and outstanding 700
Units. No officer or director of Atlas owns any Units, and no partner
beneficially owns more than 10% of the outstanding Units of the Partnership.
Atlas Group owns 100% of the common stock of AIC, Inc. which owns 100%
of the common stock of Atlas and Atlas Energy. The following table sets
forth, as of December 31, 1996, information as to the beneficial ownership
of common stock of Atlas Group by each person known to Atlas Group to own
beneficially 5% or more of the outstanding common stock of Atlas Group, by
directors and nominees, naming them individually, and by all directors and
officers of Atlas Group as a group:
Shares of Common Percent of Class
Charles T. Koval 109,391 26.445%
Joseph R. Sadowski 109,142 26.384%
James R. O'Mara 95,164 (1) 23.005%
Bruce M. Wolf . 44,710 (2) 10.808%
Directors and Officers
as Group (9 persons) 377,654 (1)(2) 91.344%
(1) Includes 22,164 shares of Atlas Group issuable upon the exercise
of stock options held by Mr. O'Mara.
(2) Includes 14,210 shares of Atlas Group issuable upon the exercise
of stock options held by Mr. Wolf.
- --------------------------------------------------------------------------
Atlas Group has adopted Atlas Energy's existing Employee Stock Ownership
Plan ("ESOP") for the benefit of its employees, other than Messrs. Koval and
Sadowski, to which it will contribute annually approximately 6% of annual
compensation in the form of shares of Atlas Group. Atlas Group anticipates
that it will contribute approximately 3,000 shares of its stock to the ESOP
each year.
Pursuant to agreements entered into between Atlas Group and its
shareholders to accommodate the desire of Messrs. Sadowski and Koval to
gradually liquidate a majority of their stock ownership in Atlas Group in
preparation for their respective retirement from Atlas Group it is
anticipated that by the year 2003 the stock ownership of Atlas Group by
Messrs. Koval and Sadowski will be reduced through a series of stock
redemptions to approximately 15% each; the stock ownership of certain of the
remaining officers will be increased to approximately 60%, in the aggregate;
and the stock ownership of the ESOP will be approximately 10%. The stock
redemptions require Atlas Group to execute promissory notes, from time to
time, in favor of Messrs. Koval and Sadowski, the first of which, in the
original principal amount of $4,974,340 each, plus interest at 13.5% were
executed by Atlas Energy and were assumed by Atlas Group. These promissory
notes are totally subordinated to Atlas Group's obligations to banks, the
ESOP and any and all other debts or obligations of Atlas Group, including
its indemnification obligations and Atlas' drilling obligation to the
Partnership. If Atlas Group defaults on a promissory note, Messrs. Koval
and Sadowski are entitled to purchase up to approximately an additional
1,500,000 shares of Atlas Group to regain management control.
Atlas views the transactions discussed above as a natural transition
which will have no adverse effect on the operations or activities of Atlas
or the Partnership. In 1990, Messrs. Koval and Sadowski entered into five
year employment agreements with Atlas Energy which agreements have been
transferred to Atlas Group, renewable for an additional five year term and
on an annual basis after the first ten years. In this regard, Mr. Sadowski
retired other than as a director in 1996. The terms and provisions of the
employment agreement with Mr. Koval are subject to negotiation at the time
of each renewal and currently such agreement does not provide for any
severance payments. Also, during the terms of the promissory notes Messrs.
Koval and Sadowski have the right to serve as directors of Atlas Group and
as one of the two trustees of the ESOP.
On November 8, 1990, Atlas Energy entered into a Stock Option Agreement
which established a management employee stock option plan to provide
incentive compensation for certain of its key employees to acquire up to
47,578 shares of common stock of Atlas Energy. Pursuant to the plan,
Messrs. O'Mara and Wolf were granted stock options for 22,164 and 14,210
shares, respectively. The options are 100% vested with an option price of
$1.00 per share and may be exercised when the promissory notes to Messrs.
Koval and Sadowski have been satisfied and will terminate on August 15,
2012. The issuance of future options will be determined at a later date.
On November 14, 1990, Atlas Energy granted 92,098 shares of restricted
common stock to certain management investors of the company, which was
valued at the time by Atlas Energy at $2,695,708. The restrictions lapsed
with respect to 25% of the shares on November 14, 1990, 1991, 1992 and 1993.
The Stock Option Agreement and the outstanding stock options have been
converted from Atlas Energy to Atlas Group. The shareholders are also
subject to a Shareholders Agreement which provides, among other things,
that such shareholders may not transfer their shares in Atlas Group unless
the shares have first been offered to Atlas Group and the other
shareholders.
- --------------------------------------------------------------------------
Item 6. Interest of Management and Others in Certain Transactions
Oil and Gas Revenues. The Managing General Partner is allocated 25% of
the oil and gas revenues of the Partnership in return for paying
organization and offering costs equal to 15% of the Partnership
Subscription, 14.6% of tangible costs and contributing all leases to the
Partnership. During the calendar year ending December 31, 1996, the
Managing General Partner received $261,650 from the Partnership's oil and
gas revenues.
Leases. The Managing General Partner initially contributed (at the
lower of fair market value or the Managing General Partner's cost of such
prospects) 32 undeveloped prospects to the Partnership to drill
approximately 31.5 net wells. With respect to the 32 prospects contributed
for these wells, Atlas received a credit in the amount of $113,400. During
1996, the Managing General Partner did not enter into any further lease
transactions and none are anticipated.
Administrative Costs. The Managing General Partner and its affiliates
receive an unaccountable, fixed payment reimbursement for their
administrative costs determined by the Managing General Partner to be an
amount equal to $75 per well per month, proportionately reduced if less than
100% of the working interest in a well is acquired. With respect to the
31.5 net wells during the calendar year ending December 31, 1996, the
Managing General Partner received $35,396.
Direct Costs. The Managing General Partner and its affiliates are
reimbursed for all direct costs expended on behalf of the Partnership. With
respect to the 31.5 net wells during the calendar year ending December 31,
1996, the Managing General Partner received $57,521.
Drilling Contracts. On December 27, 1995, the Partnership entered into
a drilling contract with Atlas to drill and complete 31.5 net wells. The
Partnership paid Atlas for drilling and completing the Partnership wells an
amount equal to $36.36 per foot to the depth of the well at its deepest
penetration, proportionately reduced if less than 100% of the working
interest in a well is acquired. With respect to the 31.5 net wells the
total amount received by Atlas was $6,991,350. During 1996, the Partnership
did not enter into any further drilling transactions and none are
anticipated.
Per Well Charges. Atlas as operator is reimbursed at actual cost for
all direct expenses incurred on behalf of the Partnership and receives well
supervision fees for operating and maintaining the wells during producing
operations in the amount of $275 per well per month subject to an annual
adjustment for inflation. With respect to the 31.5 net wells during the
calendar year ending December 31, 1996, Atlas received $67,650. The well
supervision fees are proportionately reduced to the extent the Partnership
acquires less than 100% of the Working Interest in a well.
As operator Atlas charges the Partnership at cost for third party
services and materials provided for each well which has been placed in
operation.
Transportation and Marketing Fees. The Partnership pays a combined
transportation and marketing charge at a competitive rate, which is
currently 29 cents per MCF, to affiliates of Atlas, with respect to natural
gas produced by the Partnership.
Other Compensation. Atlas or an affiliate will be reimbursed by the
Partnership for any loan Atlas or an affiliate may make to or on behalf of
the Partnership and Atlas or the affiliate will have the right to charge a
competitive rate of interest on any such loan. If Atlas provides equipment,
supplies and other services to the Partnership it may do so at competitive
industry rates. For the calendar year ending December 31, 1996, Atlas did
not advance any funds nor did it provide any equipment, supplies or other
services.
The following discussion relates solely to certain relationships and
related transactions with respect to Atlas and does not relate to the
Partnership. The following discussion has been included because Atlas has
been granted by the Partnership Agreement and the drilling and operating
agreement the exclusive right, power and authority to control the operations
and activities of the Partnership.
Atlas, its officers, directors and affiliates have in the past invested,
and may in the future invest, as participants in oil and gas programs
sponsored by Atlas on the same terms as unrelated investors. Atlas, its
officers, directors and affiliates have also participated in the past, and
may in the future participate, as working interest owners in wells in which
Atlas or its oil and gas programs have an interest. Frequently, such
participation has been on more favorable terms than the terms which were
available to unrelated investors and Atlas Group has loaned to its officers
and directors amounts in excess of $60,000 from time to time as necessary
for participation in such wells. Prior to 1996, such loans were either non-
interest bearing or accrued interest at variable rates, but since 1995 all
new loans for such purpose are required to bear interest. Currently no such
loans are outstanding.
==========================================================================
PART II
Item 7. Market for Registrant's Common Equity and Related Stockholder
Matters
Market Information. There is no established public trading market for
the Investor General Partner interests or the Limited Partner interests and
it is not anticipated that such a market will develop. The Partnership
interests may be transferred only in accordance with the provisions of
Article 6 of the Partnership Agreement. The principal restrictions on
transferability are as follows:
(1) no transfer may be made which would result in materially adverse tax
consequences to the Partnership or the violation of federal or state
securities laws; and
(2) the consent of the Managing General Partner is required.
An assignee may become a substituted Limited Partner or Investor General
Partner only upon meeting certain further conditions, which include:
(1) the assignor gives the assignee such right;
(2) the Managing General Partner consents to such substitution, which
consent shall be in the Managing General Partner's absolute
discretion;
(3) the assignee pays to the Partnership all costs and expenses
incurred in connection with such substitution; and
(4) the assignee executes and delivers such instruments, in form and
substance satisfactory to the Managing General Partner, necessary or
desirable to effect such substitution and to confirm the agreement
of the assignee to be bound by all terms and provisions of the
Partnership Agreement.
A substitute Limited Partner or Investor General Partner is entitled to all
rights attributable to full ownership of the assigned Units, including the
right to vote.
Holders. As of December 31, 1996, there were 324 investors.
Dividends. The Managing General Partner will review the accounts of the
Partnership at least quarterly to determine whether cash distributions are
appropriate and the amount to be distributed, if any. The Partnership will
distribute funds to the Managing General Partner and the Participants
allocated to their accounts which the Managing General Partner deems
unnecessary to be retained by the Partnership. In no event, however, will
funds be advanced or borrowed for purposes of distributions, if the amount
of such distributions would exceed the Partnership's accrued and received
revenues for the previous four quarters, less paid and accrued operating
costs with respect to such revenues. The determination of such revenues and
costs shall be made in accordance with generally accepted accounting
principles, consistently applied. Cash distributions from the Partnership
to the Managing General Partner may only be made in conjunction with
distributions to Participants and only out of funds properly allocated to
the Managing General Partner's account. During the calendar year ending
December 31, 1996, the Partnership distributed $403,270 to the Participants
and $129,652 to the Managing General Partner.
- ------------------------------------------------------------------------
Item 8. Legal Proceedings
None.
- ------------------------------------------------------------------------
Item 9. Changes in and Disagreements on Accounting and Financial Disclosure
None.
- ------------------------------------------------------------------------
Item 10. Submission of Matters to a Vote of Securities Holders
None.
- ------------------------------------------------------------------------
Item 11. Compliance with Section 16(a) of the Exchange Act
There are no equity securities registered pursuant to Section 12 of the
Exchange Act.
- -----------------------------------------------------------------------
Item 12. Reports on Form 8-K
The registrant filed no reports on Form 8-K during the last quarter of
the period covered by this report.
- -----------------------------------------------------------------------
PART F/S
Item 13. Financial Statements
The Partnership's Financial Statements for the period January 1, 1996,
to December 31, 1996, together with the opinion of the accountants thereon,
are following.
======================================================================
PART III
Item 14. Exhibits
- ----------------------------------------------------------------------
EXHIBIT INDEX
Description Location
4(a) Certificate of Limited Partnership for Previously filed in
Atlas-Energy for the Nineties-Public #4 Ltd. the Form 100-KSB for
the period ending
December 31, 1995 and
received on
April 1, 1996.
4(b) Amended and Restated Certificate& Agreement Previously filed in
of Limited Partnership for Atlas-Energy for the the Form 10-KSB for the
Nineties-Public #4 Ltd. dated December 27, 1995 period ending December
31, 1995 and Received
on April 1, 1996.
10(a) Drilling & Operating Agreement with exhibits attached file
23(a) Consent of McLaughlin & Courson attached file
- -------------------------------------------------------------------------
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 #4 Ltd.
By: (Signature and Title): Atlas Resources, Inc., Managing General
Partner
By (Signature and Title):
/s/James R. O'Mara, President, Chief Executive Officer
and a Director
Date: March 27, 1997
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/Charles T. Koval, Chairman of the Board and a Director
Date: March 27, 1997
By (Signature and Title):
/s/James R. O'Mara, President, Chief Executive Officer and
a Director
Date: March 27, 1997
By (Signature and Title):
/s/Bruce M. Wolf, General Counsel, Secretary and a Director
Date: March 27, 1997
By (Signature and Title):
/s/Tony C. Banks, Vice President of Finance and Chief
Financial Officer
Date: March 27, 1997
Supplemental information to be Furnished
With Reports Filed Pursuant to Section 15(d)
of the Exchange Act by Non-reporting Issuers
An annual report will be furnished to security holders subsequent to the
filing of this report.
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 #4 Ltd.
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: March 27, 1997
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/ Charles T. Koval
Charles T. Koval, Chairman of the Board and a Director
Date: March 27, 1997
By (Signature and Title): /s/ James R. O'Mara
James R. O'Mara, President, Chief Executive Officer and
a Director
Date: March 27, 1997
By (Signature and Title): /s/ Bruce M. Wolf
Bruce M. Wolf, General Counsel, Secretary and a Director
Date: March 27, 1997
By (Signature and Title): /s/ Tony C. Banks
Tony C. Banks, Vice President of Finance and Chief
Financial Officer
Date: March 27, 1997
Supplemental information to be Furnished
With Reports Filed Pursuant to Section 15(d)
of the Exchange Act by Non-reporting Issuers
An annual report will be furnished to security holders subsequent to the
filing of this report.
========================================================================
ATLAS-ENERGY FOR THE NINETIES PUBLIC #4 LTD. December 31, 1996
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #4 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
DECEMBER 31, 1996
INDEPENDENT AUDITORS' REPORT
To the Partners
Atlas-Energy for the Nineties-Public #4 Ltd.
A Pennsylvania Limited Partnership
We have audited the accompanying balance sheets of Atlas-Energy for the
Nineties-Public #4 Ltd., A Pennsylvania Limited Partnership as of December
31, 1996 and 1995 and the related statements of income and changes in
partners' capital accounts and cash flows for the year then ended December
31, 1996 and for the period June 30, 1995 (Date of Formation) to December
31, 1995. 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 #4 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 year ended December 31,
1996 and for the period June 30, 1995 (Date of Formation) to December 31,
1995 in conformity with generally accepted accounting principles.
/s/ McLaughlin & Courson
Pittsburgh, Pennsylvania
February 11, 1997
- -------------------------------------------------------------------------
BALANCE SHEETS
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #4 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
ASSETS
DECEMBER 31,
1996 1995
Cash $ 204,711 $ 14,314
Accounts receivable 312,953 -0-
Accounts receivable Managing General Partner 34,584 -0-
Oil and gas wells and leases 7,331,715 7,366,299
Less accumulated depletion and depreciation (869,814) -0-
---------- ---------
6,461,901 7,366,299
Organizational and syndication costs, net of
accumulated amortization of $124,416,
and -0- respectively 924,287 1,048,703
---------- ---------
$7,938,436 $8,429,316
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 25,069 $ -0-
Partners' capital 7,913,367 8,429,316
---------- ----------
$7,938,436 $8,429,316
STATEMENT OF INCOME AND CHANGES IN PARTNERS CAPITAL
YEAR ENDED DECEMBER 31, 1996
MANAGING
GENERAL OTHER
PARTNER PARTNERS TOTAL
REVENUE
Natural gas sales $ 334,832 $1,004,495 $1,339,327
Less direct operating costs:
Royalty interests 41,889 125,668 167,557
Other 31,293 93,878 125,171
---------- ---------- ----------
73,182 219,546 292,728
---------- ---------- ----------
Net production revenues 261,650 784,949 1,046,599
EXPENSES
Depletion and depreciation
of oil and gas wells and leases 43,893 825,921 869,814
Amortization of organizational
and syndication costs 124,416 -0- 124,416
General and administrative 8,849 26,547 35,396
TOTAL EXPENSE 177,158 852,468 1,029,626
------- ------- ---------
NET INCOME (LOSS) 84,492 (67,519) 16,973
Capital accounts at beginning of yr 1,423,652 7,005,664 8,429,316
Distributions (129,652) (403,270) (532,922)
---------- ---------- ----------
$1,378,492 $6,534,875 $7,913,367
========== ========== ==========
See notes to financial statements
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #4 LTD.
A PENNSYLVANIA LIMITED PARTNERSHIP
STATEMENT OF INCOME AND CHANGES IN PARTNERS CAPITAL
FROM JUNE 30, 1995 (DATE OF FORMATION) TO DECEMBER 31, 1995
MANAGING
GENERAL OTHER TOTAL
PARTNER PARTNERS REVENUE
Interest income $ -0- $ 14,314 $ 14,314
PARTNERS' CAPITAL CONTRIBUTIONS
Cash -0- 6,991,350 6,991,350
Organizational and syndications costs 1,048,703 -0- 1,048,703
Tangible costs 239,049 -0- 239,049
Leasehold costs 135,900 -0- 135,900
---------- ---------- ----------
PARTNERS' CAPITAL AT END OF YEAR $1,423,652 $7,005,664 $8,429,316
=========== ========== ===========
STATEMENTS OF CASH FLOWS
YEAR ENDING
DECEMBER 31,
1996 1995
Cash flows from operating activities:
Net income $ 16,973 $ 14,314
Adjustments to reconcile net income
to net cash
provided by operating activities:
Depletion and depreciation of oil and
gas wells and leases 869,814 -0-
Amortization 124,416 -0-
Increase in accounts receivable (312,953) -0-
Increase in accounts payable 25,069 -0-
-------- -------
Net cash provided by operating activities 723,319 14,314
Cash flows from investing activities:
Oil and gas well drilling contracts -0- (6,991,350)
Cash flows from financing activities:
Capital (distributions) contribution (532,922) 6,991,350
--------- ---------
Net increase in cash 190,397 14,314
Cash at beginning of year 14,314 -0-
--------- ---------
Cash at end of year $ 204,711 $ 14,314
=========== ==========
Supplemental cash flow information:
Accounts receivable from Managing General Partner for
adjustments to assets contributed $ 34,584 $ -0-
========== ===========
Assets contributed by Managing General Partner:
Tangible costs $ -0- $ 239,049
Organizational and syndication costs -0- 1,048,703
Lease costs -0- 135,900
--------- -----------
$ -0- $ 1,423,652
See notes to financial statements
NOTES TO FINANCIAL STATEMENT
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Atlas-Energy for the Nineties-Public #4 Ltd. (the "Partnership"), is a
Pennsylvania limited partnership which includes Atlas Resources, Inc.
("Atlas"), of Pittsburgh, Pennsylvania, as Managing General Partner and
Operator, and 326 other investors as either Limited Partners or Investor
General Partners. The Partnership was funded to drill and operate gas wells
located primarily in southeastern Mercer and Venango Counties, Pennsylvania.
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. Capitalized costs are expensed at unit cost rates calculated
annually based on the estimated volume of recoverable gas and the related
costs. 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:
OTHER
ATLAS PARTNERS
Organization and offering costs 100 % 0 %
Lease costs 100 % 0 %
Revenues 25 % 75 %
Direct operating costs 25 % 75 %
Intangible drilling costs 0 % 100 %
Tangible costs 14.6 % 85.4 %
Tax deductions:
Intangible drilling and development costs 0 % 100 %
Depreciation 14.6 % 85.4 %
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 $36.36 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 1999 for purchase by Atlas. Atlas is not obligated
to purchase more than 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 $7,000,000, 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 (July 1996).
Cash distributions to participants in 1996 for the subordination year
ending in 1997 subject to the subordination agreement amounted to $388,956.
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:
Capitalized costs $7,331,715
Accumulated depreciation and depletion (869,814)
----------
Net capitalized costs $6,461,901
==========
Costs incurred during the year:
Property acquisition costs -
proved undeveloped properties -0-
Development costs $7,331,715
==========
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.
Revenues $ 1,171,770
Production costs (125,171)
Depreciation and depletion (869,814)
Results of operations ------------
from producing activities $ 176,785
============
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 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
NATURAL GAS
MCF
Proved developed and undeveloped reserves:
Beginning of period -0-
Production (523,279)
Purchase of minerals in place 3,761,040
=========
End of period 3,237,761
Proved developed reserves:
Beginning of period -0-
End of period 3,237,761
=========
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 price levels are as follows:
Future cash inflows $ 6,896,433
Future production costs (2,778,008)
Future development costs -0-
------------
Future net cash flow 4,118,425
10% annual discount for estimated timing of cash flows (1,689,963)
------------
Standardized measure of discounted future net cash flows $ 2,428,462
============
Summary of changes in the standardized measure of
discounted future net cash flows:
Sales of gas and oil produced - net $(1,024,559)
Development costs incurred 8,380,418
Net purchases of reserves in place (4,927,397)
------------
Net increase 2,428,462
Beginning of period -0-
End of period $2,428,462
===========
EXHIBIT
DRILLING AND OPERATING AGREEMENT
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #4 LTD.
Closing Date December 27, 1995
INDEX
Section Page
1. Assignment of Well Locations; Representations; Designation of
Additional Well Locations;
Outside Activities 1
2. Drilling of Wells; Interest of Developer; Right of Substitution 2
3. Operator - Responsibilities in General; Term 3
4. Operator's Charges for Drilling and Completing Wells; Completion
Determination 3
5. Title Examination of Well Locations; Liability for Title Defects 4
6. Operations Subsequent to Completion of the Wells; Price
Determinations; Plugging and Abandonment 4
7. Billing and Payment Procedure with Respect to Operation of Wells;
Records, Reports and Information 6
8. Operator's Lien 6
9. Successors and Assigns; Transfers; Appointment of Agent 7
10. Insurance; Operator's Liability 7
11. Internal Revenue Code Election, Relationship of Parties; Right to Take
Production in Kind 8
12. Force Majeure 8
13. Term 9
14. Governing Law and Invalidity 9
15. Integration 9
16. Waiver of Default or Breach 9
17. Notices 9
18. Interpretation 10
19. Counterparts 10
Signature Page 10
Exhibit A Description of Leases and Initial Well Locations
Exhibits A-l Maps of Initial Well Locations
DRILLING AND OPERATING AGREEMENT
THIS AGREEMENT made this 27 day of December, 1995, by and
between ATLAS RESOURCES, INC., a Pennsylvania corporation (hereinafter
referred to as "Atlas" or "Operator"),
and
ATLAS-ENERGY FOR THE NINETIES-PUBLIC #4 LTD., a Pennsylvania limited
partnership, (hereinafter referred to as the "Developer").
WITNESSETH THAT:
WHEREAS, Atlas, by virtue of the Oil and Gas Leases (the "Leases")
described on Exhibit A attached hereto and made a part hereof, has certain
rights to develop the 32 initial well locations
identified on the maps attached hereto as Exhibits A
(the "Initial Well Locations");
WHEREAS, the Developer, subject to the terms and conditions hereof, desires
to acquire certain of Atlas' rights to develop the aforesaid 32
Initial Well Locations and to provide for the development upon the
terms and conditions herein set forth of additional well locations
("Additional Well Locations") which the parties may from time to time
designate; and
WHEREAS, Operator is in the oil and gas exploration and development
business, and the Developer desires that Operator, as its independent
contractor, perform certain services in connection with its efforts to
develop the aforesaid Initial and Additional Well Locations (hereinafter
collectively referred to as the "Well Locations") and to operate the wells
completed thereon, on the terms and conditions herein set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and subject to the terms and conditions hereinafter set forth, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Assignment of Well Locations; Representations; Designation of
Additional Well Locations; Outside Activities.
(a) Atlas shall execute an assignment of an undivided percentage of
Working Interest in the Well Location acreage for each well to the
Developer as shown on Exhibit A attached hereto, which assignment shall be
limited to a depth from the surface to the top of the Queenston formation
in Mercer County, Pennsylvania. The assignment shall be substantially in
the form of Exhibit B attached hereto and made a part hereof. The amount of
acreage included in each Initial Well Location and the configuration
thereof are indicated on the maps attached hereto as Exhibits A through
. The amount of acreage included in each Additional Well Location
and the configuration thereof shall be indicated on the maps to be attached
as exhibits to the applicable addendum as provided in sub-section (c)
below.
(b) As of the date hereof, Atlas represents and warrants to the Developer
that Atlas is the lawful owner of said Lease and rights and interest
thereunder and of the personal property thereon or used in connection
therewith; that Atlas has good right and authority to sell and convey the
same, and that said rights, interest and property are free and clear from
all liens and encumbrances, and that all rentals and royalties due and
payable thereunder have been duly paid. The foregoing representations and
warranties shall also be made by Atlas at the time of each recorded
assignment of the acreage included in each Initial Well Location and at the
time of each recorded assignment of the acreage included in each Additional
Well Location designated pursuant to sub-section (c) below, such
representations and warranties to be included in each recorded assignment
substantially in the manner set forth in the form of assignment attached
hereto and made a part hereof as Exhibit B. Atlas agrees to indemnify,
protect and hold the Developer and its successors and assigns harmless from
and against all costs (including but not limited to reasonable attorneys'
fees), liabilities, claims, penalties, losses, suits, actions, causes of
action, judgments or decrees resulting from the breach of any of the
aforesaid representations and warranties. It is understood and agreed that,
except as specifically set forth above, Atlas makes no warranty or
representation, express or implied, as to its title or the title of the
lessors in and to the lands or oil and gas interests covered by said
Leases.
(c) In the event that the parties hereto desire to designate Additional
Well Locations to be developed in accordance with the terms and conditions
of this Agreement, each of said parties shall execute an addendum
substantially in the form of Exhibit C attached hereto and made a part
hereof specifying the undivided percentage of Working Interest and the Oil
and Gas Leases to be included as Leases hereunder, specifying the amount
and configuration of acreage included in each such Additional Well Location
on maps attached as exhibits to such addendum and setting forth their
agreement that such Additional Well Locations shall be developed in
accordance with the terms and conditions of this Agreement.
(d) It is understood and agreed that the assignment of rights under the
Leases and the oil and gas development activities contemplated by this
Agreement relate only to the Initial Well Locations described herein and to
the Additional Well Locations designated pursuant to sub-section (c) above.
Nothing contained in this Agreement shall be interpreted to restrict in any
manner the right of each of the parties hereto to conduct without the
participation of any other party hereto any additional activities relating
to exploration, development, drilling, production or delivery of oil and
gas on lands adjacent to or in the immediate vicinity of the aforesaid
Initial and Additional Well Locations or elsewhere.
2. Drilling of Wells; Interest of Developer; Right of Substitution.
(a) Operator, as Developer's independent contractor, agrees to drill,
complete (or plug) and operate 32 natural gas wells on
the 32 Initial Well Locations in accordance with the
terms and conditions of this Agreement, and Developer, as a minimum
commitment, agrees to participate in and pay the Operator's charges for
drilling and completing the wells and any extra costs pursuant to Section 4
hereof in proportion to the share of the Working Interest owned by the
Developer in the wells with respect to all 32 initial
wells, it being expressly understood and agreed that, subject to
sub-section (e) below, Developer does not reserve the right to decline
participation in the drilling of any of the 32) initial
wells to be drilled hereunder.
(b) Operator will use its best efforts to commence drilling the first well
within thirty (30) days after the date of this Agreement and to commence
the drilling of each of said 32 initial wells for which
payment is made pursuant to Section 4(b) of this Agreement, on or before
March 30, 1996. Subject to the foregoing time limits, Operator shall
determine the timing of and the order of the drilling of said 32
Initial Well Locations.
(c) The 32 initial wells to be drilled on the Initial
Well Locations designated pursuant to this Agreement and any additional
wells drilled hereunder on any Additional Well Locations designated
pursuant to Section l(c) above shall be drilled and completed (or plugged)
in accordance with the generally accepted and customary oil and gas field
practices and techniques then prevailing in the geographical area of the
Well Locations and shall be drilled to a depth sufficient to test
thoroughly the objective formation or the deepest assigned depth, whichever
is less.
(d) Except as otherwise provided herein, all costs, expenses and
liabilities incurred in connection with the drilling and other operations
and activities contemplated by this Agreement shall be borne and paid, and
all wells, gathering lines of up to approximately 1,500 feet on the
Prospect, equipment, materials, and facilities acquired, constructed or
installed hereunder shall be owned, by the Developer in proportion to the
share of the Working Interest owned by the Developer in the wells. Subject
to the payment of lessor's royalties and other royalties and overriding
royalties, if any, production of oil and gas from the wells to be drilled
hereunder shall be owned by the Developer in proportion to the share of the
Working Interest owned by the Developer in the wells.
(e) Notwithstanding the provisions of sub-section (a) above, in the event
the Operator or Developer determines in good faith, with respect to any
Well Location, before operations commence hereunder with respect to such
Well Location, based upon the production (or failure of production) of any
other wells which may have been recently drilled in the immediate area of
such Well Location, or upon newly discovered title defects, or upon such
other evidence with respect to the Well Location as may be obtained, that
it would not be in the best interest of the parties hereto to drill a well
on such Well Location, then the party making the determination shall notify
the other party hereto of such determination and the basis therefor and,
unless otherwise instructed by Developer, such well shall not be drilled.
If such well is not drilled, Operator shall promptly propose a new well
location (including such information with respect thereto as Developer may
reasonably request) within Pennsylvania or Ohio to be substituted for such
original Well Location and Developer shall thereafter have the option for a
period of seven (7) business days to either reject or accept the proposed
new well location. If the new well location is rejected, Operator shall
promptly propose another substitute well location pursuant to the
provisions hereof. Once the Developer accepts a substitute well location or
does not reject it within said seven (7) day period, this Agreement shall
terminate as to the original Well Location and the substitute well location
shall become subject to the terms and conditions hereof.
3. Operator - Responsibilities in General; Term.
(a) Atlas shall be the Operator of the wells and Well Locations subject to
this Agreement and, as the Developer's independent contractor, shall, in
addition to its other obligations hereunder, (i) make the necessary
arrangements for the drilling and completion of wells and the installation
of the necessary gas gathering line systems and connection facilities; (ii)
make the technical decisions required in drilling, testing, completing and
operating such wells; (iii) manage and conduct all field operations in
connection with the drilling, testing, completing, equipping, operating and
producing of the wells; (iv) maintain all wells, equipment, gathering lines
and facilities in good working order during the useful life thereof; and
(v) perform the necessary administrative and accounting functions. In the
performance of work contemplated by this Agreement, Operator is an
independent contractor with authority to control and direct the performance
of the details of the work.
(b) Operator covenants and agrees that (i) it shall perform and carry on
(or cause to be performed and carried on) its duties and obligations
hereunder in a good, prudent, diligent and workmanlike manner using
technically sound, acceptable oil and gas field practices then prevailing
in the geographical area of the aforesaid Well Locations; (ii) all drilling
and other operations conducted by, for and under the control of Operator
hereunder shall conform in all respects to federal, state and local laws,
statutes, ordinances, regulations, and requirements; (iii) unless otherwise
agreed in writing by the Developer, all work performed hereunder pursuant
to a written estimate shall conform to the technical specifications set
forth in such written estimate and all equipment and materials installed or
incorporated in the wells and facilities hereunder shall be new or used and
of good quality; (iv) in the course of conducting operations hereunder, it
shall comply with all terms and conditions of the Leases (and any related
assignments, amendments, subleases, modifications and supplements) other
than any minimum drilling commitments contained therein; (v) it shall keep
the Well Locations subject to this Agreement and all wells, equipment and
facilities located thereon, free and clear of all labor, materials and
other liens or encumbrances arising out of operations hereunder; (vi) it
shall file all reports and obtain all permits and bonds required to be
filed with or obtained from any governmental authority or agency in
connection with the drilling or other operations and activities which are
the subject of this Agreement; and (vii) it will provide competent and
experienced personnel to supervise the drilling, completing (or plugging),
and operating of the wells and use the services of competent and
experienced service companies to provide any third party services necessary
or appropriate in order to perform its duties hereunder.
(c) Atlas shall serve as Operator hereunder until the earliest of (i) the
termination of this Agreement pursuant to Section 13 hereof; (ii) the
termination of Atlas as Operator by the Developer which may be effected by
the Developer at any time in its discretion, with or without cause; upon
sixty (60) days advance written notice to the Operator; or (iii) the
resignation of Atlas as Operator hereunder which may occur upon ninety (90)
days' written notice to the Developer at any time after five (5) years from
the date hereof, it being expressly understood and agreed that Atlas shall
have no right to resign as Operator hereunder prior to the expiration of
the aforesaid five-year period. Any successor Operator hereunder shall be
selected by the Developer. Nothing contained in this sub-section (c) shall
relieve or release Atlas or the Developer from any liability or obligation
hereunder which accrued or occurred prior to Atlas' removal or resignation
as Operator hereunder. Upon any change in Operator pursuant to this
provision, the then present Operator shall deliver to the successor
Operator possession of all records, equipment, materials and appurtenances
used or obtained for use in connection with operations hereunder and owned
by the Developer.
4. Operator's Charges for Drilling and Completing Wells; Completion
Determination
(a) All natural gas wells which are drilled and completed hereunder shall
be drilled and completed on a footage basis for a price of $36.36 per foot
to the depth of the well at its deepest penetration as recorded by
Operator. The aforesaid footage price for each of said natural gas wells
shall be set forth in an AFE which shall be attached to this Agreement as
an Exhibit, and shall cover all ordinary costs which may be incurred in
drilling and completing each such well for production of natural gas,
including without limitation, site preparation, permits and bonds,
roadways, surface damages, power at the site, water, Operator's overhead
and profit, rights-of-way, drilling rigs, equipment and materials, costs of
title examination, logging, cementing, fracturing, casing, meters (other
than utility purchase meters), connection facilities, salt water collection
tanks, separators, siphon string, rabbit, tubing, an average of 1,500 feet
of gathering line per well, geological and engineering services and
completing two (2) zones; provided, that such footage price shall not
include the cost of (i) completing more than two (2) zones; (ii) completion
procedures, equipment, or any facilities necessary or appropriate for the
production and sale of oil and/or natural gas liquids; and (iii) equipment
or materials necessary or appropriate to collect, lift or dispose of
liquids for efficient gas production, except that the cost of saltwater
collection tanks, separators, siphon string and tubing shall be included in
the aforesaid footage price. Any such extra costs shall be billed to
Developer in proportion to the share of the Working Interest owned by the
Developer in the wells on a direct cost basis equal to the sum of (i)
Operator's invoice costs of third party services performed and materials
and equipment purchased plus ten percent (10%) to cover supervisory
services and overhead; and (ii) Operator's standard charges for services
performed directly by it.
(b) In order to enable Operator to commence site preparation for
32 initial wells, to obtain suitable subcontractors
for the drilling and completion of such wells at currently prevailing
prices, and to insure the availability of equipment and materials, the
Developer shall pay to Operator, in proportion to the share of the Working
Interest owned by the Developer in the wells, one hundred percent (100%) of
the estimated price for all 32 initial wells upon
execution of this Agreement, such payment to be nonrefundable in all
events, except that Developer shall not be required to pay completion costs
prior to the time that a decision is made that the well warrants a
completion attempt and Atlas' share of such payments as Managing General
Partner of the Developer shall be paid within five (5) business days of
notice from Operator that such costs have been incurred. With respect to
each additional well drilled on the Additional Well Locations, if any,
Developer shall pay Operator, in proportion to the share of the Working
Interest owned by the Developer in the wells, one hundred percent (100%) of
the estimated price for such well upon execution of the applicable addendum
pursuant to Section l(c) above, except that Developer shall not be required
to pay completion costs prior to the time that a decision is made that the
well warrants a completion attempt and Atlas' share of such payments as
Managing General Partner of the Developer shall be paid within five (5)
business days of notice from Operator that such costs have been incurred.
With respect to each well, Developer shall pay to Operator, in proportion
to the share of the Working Interest owned by the Developer in the wells,
all other costs for such well within five (5) business days of receipt of
notice from Operator that such well has been drilled to the objective depth
and logged and is to be completed. Developer shall pay, in proportion to
the share of the Working Interest owned by the Developer in the wells, any
extra costs incurred with respect to each well pursuant to sub-section (a)
above within ten (10) business days of its receipt of Operator's statement
therefor.
(c) Operator shall determine whether or not to run the production casing
for an attempted completion or to plug and abandon any well drilled
hereunder; provided, however, that a well shall be completed only if
Operator has made a good faith determination that there is a reasonable
possibility of obtaining commercial quantities of oil and/or gas.
(d) If Operator determines at any time during the drilling or attempted
completion of any well hereunder, in accordance with the generally accepted
and customary oil and gas field practices and techniques then prevailing in
the geographic area of the well location, that such well should not be
completed, it shall promptly and properly plug and abandon the same. In
such event, such well shall be deemed a dry hole and the dry hole footage
price for each well drilled hereunder shall be $20.22 per foot multiplied
by the depth of the well, as specified in sub-section (a) above, and shall
be charged to the Developer in proportion to the share of the Working
Interest owned by the Developer in the well. Any amounts paid by the
Developer with respect to such dry hole which exceed the aforesaid dry hole
footage price shall be retained by Operator and shall be applied to the
costs for an additional well or wells to be drilled on the Additional Well
Locations.
5. Title Examination of Well Locations; Liability for Title Defects.
(a) The Developer hereby acknowledges that Operator has furnished
Developer with the title opinions identified on Exhibit A, and other
documents and information which Developer or its counsel has requested in
order to determine the adequacy of the title to the Initial Well Locations
and leased premises subject to this Agreement. The Developer hereby accepts
the title to said Initial Well Locations and leased premises and
acknowledges and agrees that, except for any loss, expense, cost or
liability caused by the breach of any of the warranties and representations
made by Atlas in Section l(b) hereof, any loss, expense, cost or liability
whatsoever caused by or related to any defect or failure of such title
shall be the sole responsibility of and shall be borne entirely by the
Developer.
(b) Prior to commencing the drilling of any well on any Additional Well
Location designated pursuant to this Agreement, Operator shall conduct, or
cause to be conducted, a title examination of such Additional Well
Location, in order to obtain appropriate abstracts, opinions and
certificates and other information necessary to determine the adequacy of
title to both the applicable Lease and the fee title of the lessor to the
premises covered by such Lease. The results of such title examination and
such other information as is necessary to determine the adequacy of title
for drilling purposes shall be submitted to the Developer for its review
and acceptance, and no drilling shall be commenced until such title has
been accepted in writing by the Developer. After any title has been
accepted by the Developer, any loss, expense, cost or liability whatsoever,
caused by or related to any defect or failure of such title shall be the
sole responsibility of and shall be borne entirely by the Developer, unless
such loss, expense, cost or liability was caused by the breach of any of
the warranties and representations made by Atlas in Section l(b) of this
Agreement.
6. Operations Subsequent to Completion of the Wells; Price
Determinations; Plugging and Abandonment.
(a) Commencing with the month in which a well drilled hereunder begins to
produce, Operator shall be entitled to an operating fee of $275 per month
for each well being operated under this Agreement, proportionately reduced
to the extent the Developer owns less than 100% of the Working Interest in
the wells, in lieu of any direct charges by Operator for its services or
the provision by Operator of its equipment for normal superintendence and
maintenance of such wells and related pipelines and facilities. Such
operating fees shall cover all normal, regularly recurring operating
expenses for the production, delivery and sale of natural gas, including
without limitation well tending, routine maintenance and adjustment,
reading meters, recording production, pumping, maintaining appropriate
books and records, preparing reports to the Developer and government
agencies, and collecting and disbursing revenues, but shall not cover costs
and expenses related to the (i) production and sale of oil, (ii) collection
and disposal of salt water or other liquids produced by the wells, (iii)
rebuilding of access roads, and (iv) purchase of equipment, materials or
third party services, which, subject to the provisions of sub-section (c)
of this Section 6, shall be paid by the Developer in proportion to the
share of the Working Interest owned by the Developer in the wells. Any well
which is temporarily abandoned or shut-in continuously for the entire month
shall not be considered a producing well for purposes of determining the
number of wells in such month subject to the aforesaid operating fee.
(b) The monthly operating fee set forth in sub-section (a) above may in
the following manner be adjusted annually as of the first day of January
(the "Adjustment Date") each year beginning January l, 1997. Such
adjustment, if any, shall not exceed the percentage increase in the average
weekly earnings of "Crude Petroleum, Natural Gas, and Natural Gas Liquids"
workers, as published by the U.S. Department of Labor, Bureau of Labor
Statistics, and shown in Employment and Earnings Publication, Monthly
Establishment Data, Hours and Earning Statistical Table C-2, Index Average
Weekly Earnings of "Crude Petroleum, Natural Gas, and Natural Gas Liquids"
workers, SIC Code #131-2, or any successor index thereto, since January l,
1995, in the case of the first adjustment, and since the previous
Adjustment Date, in the case of each subsequent adjustment.
(c) Without the prior written consent of the Developer, pursuant to a
written estimate submitted by Operator, Operator shall not undertake any
single project or incur any extraordinary cost with respect to any well
being produced hereunder reasonably estimated to result in an expenditure
of more than $5,000, unless such project or extraordinary cost is necessary
to safeguard persons or property or to protect the well or related
facilities in the event of a sudden emergency. In no event, however, shall
the Developer be required to pay for any project or extraordinary cost
arising from the negligence or misconduct of Operator, its agents,
servants, employees, contractors, licensees or invitees. All extraordinary
costs incurred and the cost of projects undertaken with respect to a well
being produced hereunder shall be billed at the invoice cost of third party
services performed or materials purchased together with a reasonable charge
by Operator for services performed directly by it, in proportion to the
share of the Working Interest owned by the Developer in the wells. Operator
shall have the right to require the Developer to pay in advance of
undertaking any such project all or a portion of the estimated costs
thereof in proportion to the share of the Working Interest owned by the
Developer in the wells.
(d) Developer shall have no interest in the pipeline gathering system,
which gathering system shall remain the sole property of Operator and shall
be maintained at Operator's sole cost and expense.
(e) Notwithstanding anything herein to the contrary, the Developer shall
have full responsibility for and bear all costs in proportion to the share
of the Working Interest owned by the Developer in the wells with respect to
obtaining price determinations under and otherwise complying with the
Natural Gas Policy Act of 1978 and the implementing state regulations. Such
responsibility shall include, without limitation, preparing, filing, and
executing all applications, affidavits, interim collection notices, reports
and other documents necessary or appropriate to obtain price certification,
to effect sales of natural gas, or otherwise to comply with said Act and
the implementing state regulations. Operator agrees to furnish such
information and render such assistance as the Developer may reasonably
request in order to comply with said Act and the implementing state
regulations without charge for services performed by its employees.
(f) The Developer shall have the right to direct Operator to plug and
abandon any well which has been completed hereunder as a producer, and
Operator shall not plug and abandon any such well prior to obtaining the
written consent of the Developer; provided, however, that if Operator in
accordance with the generally accepted and customary oil and gas field
practices and techniques then prevailing in the geographic area of the well
location, determines that any such well should be plugged and abandoned and
makes a written request to the Developer for authority to plug and abandon
any such well and the Developer fails to respond in writing to such request
within forty-five (45) days following the date of such request, then the
Developer shall be deemed to have consented to the plugging and abandonment
of such well(s). All costs and expenses related to plugging and abandoning
the wells which have been drilled and completed as producing wells
hereunder shall be borne and paid by the Developer in proportion to the
share of the Working Interest owned by the Developer in the wells. At any
time after three (3) years from the date each well drilled and completed
hereunder is placed into production, Operator shall have the right to
deduct each month from the proceeds of the sale of the production from the
well operated hereunder up to $200, in proportion to the share of the
Working Interest owned by the Developer in the wells, for the purpose of
establishing a fund to cover the estimated costs of plugging and abandoning
said well. All such funds shall be deposited in a separate interest bearing
escrow account for the account of the Developer, and the total amount so
retained and deposited shall not exceed Operator's reasonable estimate of
such costs.
7. Billing and Payment Procedure with Respect to Operation of Wells;
Records, Reports and Information.
(a) Operator shall promptly and timely pay and discharge on behalf of the
Developer, in proportion to the share of the Working Interest owned by the
Developer in the wells, all severance taxes, royalties, overriding
royalties, operating fees, pipeline gathering charges and other expenses
and liabilities payable and incurred by reason of its operation of the
wells in accordance with this Agreement and shall pay, in proportion to the
share of the Working Interest owned by the Developer in the wells, on or
before the due date any third party invoices rendered to Operator with
respect to such costs and expenses; provided, however, that Operator shall
not be required to pay and discharge as aforesaid any such costs and
expenses which are being contested in good faith by Operator. Operator
shall deduct the foregoing costs and expenses from the Developer's share of
the proceeds of the oil and/or gas sold from the wells operated hereunder
and shall keep an accurate record of the Developer's account hereunder,
showing expenses incurred and charges and credits made and received with
respect to each well. In the event that such proceeds are insufficient to
pay said costs and expenses, Operator shall promptly and timely pay and
discharge the same, in proportion to the share of the Working Interest
owned by the Developer in the wells, and prepare and submit an invoice to
the Developer each month for said costs and expenses, such invoice to be
accompanied by the form of statement specified in sub-section (b) below.
Any such invoice shall be paid by the Developer within ten (10) business
days of its receipt.
(b) Operator shall disburse to the Developer, on a monthly basis, the
Developer's share of the proceeds received from the sale of oil and/or gas
sold from the wells operated hereunder, less (i) the amounts charged to the
Developer under sub-section (a) hereof, and (ii) such amount, if any,
withheld by Operator for future plugging costs pursuant to sub-section (f)
of Section 6. Each such disbursement made and/or invoice submitted pursuant
to sub-section (a) above shall be accompanied by a statement itemizing with
respect to each well (i) the total production of oil and/or gas since the
date of the last disbursement or invoice billing period, as the case may
be, and the Developer's share thereof, (ii) the total proceeds received
from any sale thereof, and the Developer's share thereof, (iii) the costs
and expenses deducted from said proceeds and/or being billed to the
Developer pursuant to sub-section (a) above, (iv) the amount withheld for
future plugging costs, and (v) such other information as Developer may
reasonably request, including without limitation copies of all third party
invoices listed thereon for such period. Operator agrees to deposit all
proceeds from the sale of oil and/or gas sold from the wells operated
hereunder in a separate checking account maintained by Operator, which
account shall be used solely for the purpose of collecting and disbursing
funds constituting proceeds from the sale of production hereunder.
(c) In addition to the statements required under sub-section (b) above,
Operator, within seventy-five (75) days after the completion of each well
drilled hereunder, shall furnish the Developer with a detailed statement
itemizing with respect to such well the total costs and charges under
Section 4(a) hereof and the Developer's share thereof, and such information
as is necessary to enable the Developer (i) to allocate any extra costs
incurred with respect to such well between tangible and intangible and (ii)
to determine the amount of investment tax credit, if applicable.
(d) Upon request, Operator shall promptly furnish the Developer with such
additional information as it may reasonably request, including without
limitation geological, technical and financial information, in such form as
may reasonably be requested, pertaining to any phase of the operations and
activities governed by this Agreement. The Developer and its authorized
employees, agents and consultants, including independent accountants shall,
at Developer's sole cost and expense, (i) upon at least ten (10) days'
written notice have access during normal business hours to all of
Operator's records pertaining to operations hereunder, including without
limitation, the right to audit the books of account of Operator relating to
all receipts, costs, charges and expenses under this Agreement, and (ii)
have access, at its sole risk, to any wells drilled by Operator hereunder
at all times to inspect and observe any machinery, equipment and
operations.
8. Operator's Lien.
(a) The Developer hereby grants Operator a first and preferred lien on and
security interest in the interest of the Developer covered by this
Agreement, and in the Developer's interest in oil and gas produced and the
proceeds thereof, and upon the Developer's interest in materials and
equipment, to secure the payment of all sums due from Developer to Operator
under the provisions of this Agreement.
(b) In the event that the Developer fails to pay any amount owing
hereunder by it to the Operator within the time limit for payment thereof,
Operator, without prejudice to other existing remedies, is authorized at
its election to collect from any purchaser or purchasers of oil or gas and
retain the proceeds from the sale of the Developer's share thereof until
the amount owed by the Developer, plus twelve percent (12%) interest on a
per annum basis and any additional costs (including without limitation
actual attorneys' fees and costs) resulting from such delinquency, has been
paid. Each purchaser of oil or gas shall be entitled to rely upon
Operator's written statement concerning the amount of any default.
9. Successors and Assigns; Transfers; Appointment of Agent.
(a) This Agreement shall be binding upon and shall inure to the benefit of
the undersigned parties and their respective successors and permitted
assigns; provided, however, that Operator may not assign, transfer, pledge,
mortgage, hypothecate, sell or otherwise dispose of any of its interest in
this Agreement, or any of the rights or obligations hereunder, without the
prior written consent of the Developer, except that such consent shall not
be required in connection with (i) the assignment of work to be performed
for Operator by subcontractors, it being understood and agreed, however,
that any such assignment to Operator's subcontractors shall not in any
manner relieve or release Operator from any of its obligations and
responsibilities under this Agreement, or (ii) any lien, assignment,
security interest, pledge or mortgage arising under or pursuant to
Operator's present or future financing arrangements, or (iii) the
liquidation, merger, consolidation or sale of substantially all of the
assets of Operator or other corporate reorganization; and provided,
further, that in order to maintain uniformity of ownership in the wells,
production, equipment, and leasehold interests covered by this Agreement,
and notwithstanding any other provisions to the contrary, the Developer
shall not, without the prior written consent of Operator, sell, assign,
transfer, encumber, mortgage or otherwise dispose of any of its interest in
the wells, production, equipment or leasehold interests covered hereby
unless such disposition encompasses either (i) the entire interest of the
Developer in all wells, production, equipment and leasehold interests
subject hereto or (ii) an equal undivided interest in all such wells,
production, equipment, and leasehold interests.
(b) Subject to the provisions of sub-section (a) above, any sale,
encumbrance, transfer or other disposition made by the Developer of its
interests in the wells, production, equipment, and/or leasehold interests
covered hereby shall be made (i) expressly subject to this Agreement, (ii)
without prejudice to the rights of the other party, and (iii) in accordance
with and subject to the provisions of the Lease.
(c) If at any time the interest of the Developer is divided among or owned
by co-owners, Operator may, at its discretion, require such co-owners to
appoint a single trustee or agent with full authority to receive notices,
reports and distributions of the proceeds from production, to approve
expenditures, to receive billings for and approve and pay all costs,
expenses and liabilities incurred hereunder, to exercise any rights granted
to such co-owners under this Agreement, to grant any approvals or
authorizations required or contemplated by this Agreement, to sign,
execute, certify, acknowledge, file and/or record any agreements,
contracts, instruments, reports, or documents whatsoever in connection with
this Agreement or the activities contemplated hereby, and to deal generally
with, and with power to bind, such co-owners with respect to all activities
and operations contemplated by this Agreement; provided, however, that all
such co-owners shall continue to have the right to enter into and execute
all contracts or agreements for their respective shares of the oil and gas
produced from the wells drilled hereunder in accordance with sub-section
(c) of Section 11 hereof.
10. Insurance; Operator's Liability.
(a) Operator shall obtain and maintain at its own expense so long as it is
Operator hereunder all required Workmen's Compensation Insurance and
comprehensive general public liability insurance in amounts and coverage
not less than $1,000,000 per person per occurrence for personal injury or
death and $1,000,000 for property damage per occurrence, which insurance
shall include coverage for blow-outs and total liability coverage of not
less than $10,000,000. Subject to the aforesaid limits, the Operator's
general public liability insurance shall be in all respects comparable to
that generally maintained in the industry with respect to services of the
type to be rendered and activities of the type to be conducted under this
Agreement; Operator's general public liability insurance shall, if
permitted by Operator's insurance carrier, (i) name the Developer and all
of Developer's Investor General Partners as additional insured parties, and
(ii) provide that at least thirty (30) days' prior notice of cancellation
and any other adverse material change in the policy shall be given to the
Developer and its Investor General Partners; provided, that the Developer
shall reimburse Operator for the additional cost, if any, of including it
and its Investor General Partners as additional insured parties under the
Operator's insurance. Current copies of all policies or certificates
thereof shall be delivered to the Developer upon request. It is understood
and agreed that Operator's insurance coverage may not adequately protect
the interests of the Developer hereunder and that the Developer shall carry
at its expense such excess or additional general public liability, property
damage, and other insurance, if any, as the Developer deems appropriate.
(b) Operator shall require all of its subcontractors to carry all required
Workmen's Compensation Insurance and to maintain such other insurance, if
any, as Operator in its discretion may require.
(c) Operator's liability to the Developer as Operator hereunder shall be
limited to, and Operator shall indemnify the Developer and hold it harmless
from, claims, penalties, liabilities, obligations, charges, losses, costs,
damages or expenses (including but not limited to reasonable attorneys'
fees) relating to, caused by or arising out of (i) the noncompliance with
or violation by Operator, its employees, agents, or subcontractors of any
local, state or federal law, statute, regulation, or ordinance; (ii) the
negligence or misconduct of Operator, its employees, agents or
subcontractors; or (iii) the breach of or failure to comply with any
provisions of this Agreement.
11. Internal Revenue Code Election; Relationship of Parties; Right to Take
Production in Kind.
(a) With respect to this Agreement, each of the parties hereto elects,
under the authority of Section 761 (a) of the Internal Revenue Code of
1986, as amended, to be excluded from the application of all of the
provisions of Subchapter K of Chapter 1 of Sub Title A of the Internal
Revenue Code of 1986, as amended. If the income tax laws of the state or
states in which the property covered hereby is located contain, or may
hereafter contain, provisions similar to those contained in the Subchapter
of the Internal Revenue Code of 1986, as amended, referred to under which a
similar election is permitted, each of the parties agrees that such
election shall be exercised. Beginning with the first taxable year of
operations hereunder, each party agrees that the deemed election provided
by Section 1.761-2(b)(2)(ii) of the Regulations under the Internal Revenue
Code of 1986, as amended, will apply; and no party will file an application
under Section 1.761-2 (b)(3)(i) and (ii) of said Regulations to revoke such
election. Each party hereby agrees to execute such documents and make such
filings with the appropriate governmental authorities as may be necessary
to effect such election.
(b) It is not the intention of the parties hereto to create, nor shall
this Agreement be construed as creating, a mining or other partnership or
association or to render the parties liable as partners or joint venturers
for any purpose. Operator shall be deemed to be an independent contractor
and shall perform its obligations as set forth herein or as otherwise
directed by the Developer.
(c) Subject to the provisions of Section 8 hereof, the Developer shall
have the exclusive right to sell or dispose of its proportionate share of
all oil and gas produced from the wells to be drilled hereunder, exclusive
of production which may be used in development and producing operations,
production unavoidably lost, and production used to fulfill any free gas
obligations under the terms of the applicable Lease or Leases; and Operator
shall not have any right to sell or otherwise dispose of such oil and gas.
The Developer shall have the exclusive right to execute all contracts
relating to the sale or disposition of its proportionate share of the
production from the wells drilled hereunder. Developer shall have no
interest in any gas purchase agreements of Operator, except the right to
receive Developer's share of the proceeds received from the sale of any gas
or oil from wells developed hereunder. The Developer agrees to designate
Operator or Operator's designated bank agent as the Developer's collection
agent in any such contract. Upon request, Operator shall render assistance
in arranging such sale or disposition and shall promptly provide the
Developer with all relevant information which comes to Operator's attention
regarding opportunities for sale of production. In the event Developer
shall fail to make the arrangements necessary to take in kind or separately
dispose of its proportionate share of the oil and gas produced hereunder,
Operator shall have the right, subject to the revocation at will by the
Developer, but not the obligation, to purchase such oil and gas or sell it
to others at any time and from time to time, for the account of the
Developer at the best price obtainable in the area for such production,
however, Operator shall have no liability to Developer should Operator fail
to market such production. Any such purchase or sale by Operator shall be
subject always to the right of the Developer to exercise at any time its
right to take in kind, or separately dispose of, its share of oil and gas
not previously delivered to a purchaser. Any purchase or sale by Operator
of any other party's share of oil and gas shall be only for such reasonable
periods of time as are consistent with the minimum needs of the Industry
under the particular circumstance, but in no event for a period in excess
of one (1) year.
12. Force Majeure.
(a) If Operator is rendered unable, wholly or in part, by force majeure
(as hereinafter defined) to carry out its obligations under this Agreement,
the Operator shall give to the Developer prompt written notice of the force
majeure with reasonably full particulars concerning it; thereupon, the
obligations of the Operator, so far as it is affected by the force majeure,
shall be suspended during but no longer than, the continuance of the force
majeure. Operator shall use all reasonable diligence to remove the force
majeure as quickly as possible to the extent the same is within reasonable
control.
(b) The term "force majeure" shall mean an act of God, strike, lockout, or
other industrial disturbance, act of the public enemy, war, blockade,
public riot, lightning, fire, storm, flood, explosion, governmental
restraint, unavailability of equipment or materials, plant shut-downs,
curtailments by purchasers and any other causes whether of the kind
specifically enumerated above or otherwise, which directly precludes
Operator's performance hereunder and is not reasonably within the control
of the Operator.
(c) The requirement that any force majeure shall be remedied with all
reasonable dispatch shall not require the settlement of strikes, lockouts,
or other labor difficulty affecting the Operator, contrary to its wishes;
the method of handling all such difficulties shall be entirely within the
discretion of the Operator.
13. Term.
This Agreement shall become effective when executed by Operator and the
Developer and, except as provided in sub-section (c) of Section 3, shall
continue and remain in full force and effect for the productive lives of
the wells being operated hereunder.
14. Governing Law and Invalidity.
This Agreement shall be governed by, construed and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania. The
invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid or unenforceable
provision were omitted.
15. Integration.
This Agreement, including the Exhibits hereto, constitutes and represents
the entire understanding and agreement of the parties with respect to the
subject matter hereof and supersedes all prior negotiations,
understandings, agreements, and representations relating to the subject
matter hereof. No change, waiver, modification, or amendment of this
Agreement shall be binding or of any effect unless in writing duly signed
by the party against which such change, waiver, modification, or amendment
is sought to be enforced.
16. Waiver of Default or Breach.
No waiver by any party hereto to any default of or breach by any other
party under this Agreement shall operate as a waiver of any future default
or breach, whether of like or different character or nature.
17. Notices.
Unless otherwise provided herein, all notices, statements, requests, or
demands which are required or contemplated by this Agreement shall be in
writing and shall be hand-delivered or sent by registered or certified
mail, postage prepaid, to the following addresses until changed by
certified or registered letter so addressed to the other party:
(i) If to Atlas, to:
Atlas Resources, Inc.
311 Rouser Road
Moon Township, Pennsylvania 15108
Attention: President
(ii) If to Developer, to:
Atlas-Energy for the Nineties-Public #4 Ltd.
c/o Atlas Resources, Inc.
311 Rouser Road
Moon Township, Pennsylvania 15108
Notices which are served by registered or certified mail upon the parties
hereto in the manner provided in this Section shall be deemed sufficiently
served or given for all purposes under this Agreement at the time such
notice shall be mailed as provided herein in any post office or branch post
office regularly maintained by the United States Postal Service or any
successor to the functions thereof. All payments hereunder shall be
hand-delivered or sent by United States mail, postage prepaid to the
addresses set forth above until changed by certified or registered letter
so addressed to the other party.
18. Interpretation.
Whenever this Agreement makes reference to "this Agreement" or to any
provision "hereof," or words to similar effect, such reference shall be
construed to refer to the within instrument unless the context clearly
requires otherwise. The titles of the Sections herein have been inserted as
a matter of convenience of reference only and shall not control or affect
the meaning or construction of any of the terms and provisions hereof. As
used in this Agreement, the plural shall include the singular and the
singular shall include the plural whenever appropriate.
19. Counterparts.
The parties hereto may execute this Agreement in any number of separate
counterparts, each of which, when executed and delivered by the parties
hereto, shall have the force and effect of an original; but all such
counterparts shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
under their respective seals as of the day and year first above written.
Attest ATLAS RESOURCES, INC.
By:
Secretary, /s/Bruce M. Wolf President, /s/J.R. O'Mara
[Corporate Seal]
ATLAS-ENERGY FOR NINETIES-PUBLIC #4 LTD.
By its Managing General Partner:
Attest ATLAS RESOURCES, INC.
By:
Secretary, /s/Bruce M. Wolf President, /s/J.R. O'Mara
[Corporate Seal]
=============================================================================
EXHIBIT A
ATLAS_ENERGY_FOR_THE_NINETIES_--_PUBLIC_#4_LTD.
MERCER COUNTY:
Eperthener Unit #2 (Coolspring Township)
As more fully described in a certain Consolidation of Oil and Gas Leases
dated November 30, 1995, and recorded December 1, 1995, in Volume 95DR15534
of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER, ALL that portion
of said leases containing 50 acres more or less, as shown on the plat attached
hereto as Exhibit "A-1", and made a part hereof. Title opinion of Geiger,
Teeple, Smith, and Hahn, 260 East Main Street, P.O. Box 2446, Alliance, Ohio
44601, dated November 15, 1995. The Developer's interest in the leasehold
estate constituting this well location is an undivided 100% working interest
to the bottom of the Medina/Whirlpool formation, subject to the landowner's
royalty interest.
Kloos #2 (Coolspring Township)
Oil and Gas Lease from Glenn C. Kloos and Imogene E. Kloos, husband and wife,
to Atlas Resources, Inc., dated November 28, 1990, and recorded July 4, 1991,
in Volume 91DR00148; Extension of Lease Agreement dated July 11, 1995, and
recorded August 2, 1995, in Volume 95DR09401, of the Mercer County Records,
ASSIGNING, HEREIN, HOWEVER, only that portion of said lease containing 50
acres, more or less, as shown on the plat attached hereto as Exhibit "A-2"
and made a part hereof. Title opinion of Hunter, Hunter, and Randall, 502
Bank One Building, Alliance, Ohio 44601, dated May 3, 1991. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% working interest to those oil and gas rights from the surface
to the bottom of the Medina/Whirlpool formation, subject to the landowner's
royalty interest.
McDowell #7 ( Coolspring Township )
Oil and Gas Lease from John A. McDowell and Jerilyn R. McDowell, both
divorced and not remarried, JTWROS, to Atlas Resources, Inc., dated
February 28, 1995, and recorded March 13, 1995, in Volume 95DR02648, of the
Mercer County Records, ASSIGNING, HEREIN, HOWEVER, only that portion of said
lease containing 50 acres, more or less, as shown on the plat attached
hereto as Exhibit "A-3" and made a part hereof. Title opinion of Geiger,
Teeple, Smith, and Hahn, 260 East Main Street, P.O. Box 2446, Alliance, Ohio
44601, dated November 15, 1995. The Developer's interest in the leasehold
estate constituting this well location is an undivided 100% working interest
to those oil and gas rights from the surface to the bottom of the Medina/
Whirlpool formation, subject to the landowner's royalty interest.
McDowell #8 (Coolspring Township)
Oil and Gas Lease from John A. McDowell and Jerilyn R. McDowell, both
divorced and not remarried, JTWROS, to Atlas Resources, Inc., dated
February 28, 1995, and recorded March 13, 1995, in Volume 95DR02648, of the
Mercer County Records, ASSIGNING, HEREIN, HOWEVER, only that portion of said
lease containing 50 acres, more or less, as shown on the plat attached
hereto as Exhibit "A-4" and made a part hereof. Title opinion of Geiger,
Teeple, Smith, and Hahn, 260 East Main Street, P.O. Box 2446, Alliance, Ohio
44601, dated January 12, 1996. The Developer's interest in the leasehold
estate constituting this well location is an undivided 100% working interest
to those oil and gas rights from the surface to the bottom of the Medina/
Whirlpool formation, subject to the landowner's royalty interest.
Rabold #3 (Coolspring Township)
Oil and Gas Lease from Elizabeth Rabold, single, to Atlas Resources, Inc.,
dated January 2, 1991, and recorded September 10, 1991, in Volume 91DR11318
of the Mercer County Records; Extension of Lease Agreement dated March 9,
1995, and recorded March 28, 1995, in Volume 95DR03414, of the Mercer County
Records, ASSIGNING, HEREIN, HOWEVER, only that portion of said lease
containing 50 acres, more or less, as shown on the plat attached hereto as
Exhibit "A-5" and made a part hereof. Title opinion of Hunter and Hunter,
260 East Main Street, Suite 200, Alliance, Ohio 44601, dated October 18,
1995. The Developer's interest in the leasehold estate constituting this
well location is an undivided 100% working interest to those oil and gas
rights from the surface to the bottom of the Medina/Whirlpool formation,
subject to the landowner's royalty interest.
Rabold # 5 (Coolspring Township)
Oil and Gas Lease from Michael E. Rabold and Andrea L. Rabold, husband and
wife, to Atlas Resources, Inc., dated March 30, 1995, and recorded April 19,
1995, in Volume 95DR04334, of the Mercer County Records, ASSIGNING, HEREIN,
HOWEVER, only that portion of said lease containing 50 acres, more or less,
as shown on the plat attached hereto as Exhibit "A-6" and made a part
hereof. Title opinion of Hunter and Hunter, 260 East Main Street, Suite 200,
Alliance, Ohio 44601, dated July 27, 1995. The Developer's interest in the
leasehold estate constituting this well location is an undivided 100%
working interest to those oil and gas rights from the surface to the bottom
of the Medina/Whirlpool formation, subject to the landowner's royalty
interest.
Rabold #6 (Coolspring Township)
Oil and Gas Lease from Michael E. Rabold and Andrea L. Rabold,
husband and wife, to Atlas Resources,
Inc., dated March 30, 1995, and recorded April 19, 1995 in Volume 95 DR
04334 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER, only
that portion of said Lease containing 50.00 acres, more or less, as
shown on the plat attached hereto as Exhibit "A-7" and made a part
hereof. Title opionion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated July 27, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Struthers_#5 (Coolspring Township)
Oil and Gas Lease from Richard M. Struthers and Jane E. Struthers,
husband and wife, to Atlas Resources, Inc., dated April 4, 1995 and
recorded April 26, 1995 in Volume 95 DR 04731 of the Mercer County
Records, ASSIGNING, HEREIN, HOWEVER, only that portion of said lease
containing 50.00 acres, more or less, as shown on the plat attached
hereto as Exhibit "A-8" and made a part hereof. Title opinion of
Hunter, Hunter, & Randall, 260 East Main Street, Alliance, Ohio 44601,
dated August 9, 1991. The Developer's interest in the leasehold estate
constituting this well location is an undivided 100% Working Interest
to those oil and gas rights from the surface to the bottom of the
Medina/Whirlpool Formation, subject to the landowners' royalty
interest.
Thompson_#4 (Coolspring Township)
Oil and Gas Lease from Robert J. Thompson and Patricia A. Thompson,
husband and wife. to Atlas Resources, Inc., dated January 2, 1991 and
recorded January 14, 1992 in Volume 92 DR 00499 of the Mercer County
Records. Extension of Lease agreement dated March 16, 1995 and
recorded April 5, 1995 in Volume 95 DR 03787 of the Mercer County
Records, ASSIGNING, HEREIN, HOWEVER, only that portion of said Lease
containing 50.00 acres, more or less as shown on the plat attached
hereto as Exhibit "A-9" and made a part hereof. Title opinion of
Geiger, Teeple, Smith & Hahn, 260 East Main Street, P.O. Box 2446,
Alliance, Ohio 44601, dated November 22, 1995.The Developer's interest
in the leasehold estate constituting this well location is an undivided
100% Working Interest to those oil and gas rights from the surface to
the bottom of the Medina/Whirlpool formation, subject to the
landowners' royalty interest.
Vogan_#2 (Findley Township)
Oil and Gas Lease from Katherine A. Vogan, widow; not remarried, to
Atlas Resources, Inc., dated July 11, 1995 and recorded August 2, 1995
in Volume 95 DR 09399 of the Mercer County Records, ASSIGNING, HEREIN,
HOWEVER, only that portion of said Lease containing 50.00 acres, more
or less, as shown on the plat attached hereto as Exhibit "A-10" and
made a part hereof. Title opinion of Geiger, Teeple, Smith & Hahn 260
East Main Street, P.O. Box 2446, Alliance, Ohio 44601, dated October
24, 1995. The Developer's interest in the leasehold estate
constituting this well location is an undivided 100% Working Interest
to those oil and gas rights from the surface to the bottom of the
Medina/Whirlpool Formation, subject to the landowners' royalty
interest.
Baun_#2 (Jackson Township)
Oil and Gas Lease from Ward O. Baun and Effie M. Baun, husband and
wife, to Atlas Resources, Inc., dated September 26, 1991 and recorded
October 28, 1991 in Volume 91 DR 13426; Extension of Lease Agreement
dated April 14, 1994 and recorded May 17, 1994 in Volume 94 DR 07364 of
the Mercer County Records, ASSIGNING, HEREIN, HOWEVER, only that
portion of said Lease containing 50.00 acres, more or less as shown on
the plat attached hereto as Exhibit "A-11" and made a part hereof.
Title opinion of Hunter & Hunter, 260 East Main Street, Suite 200,
Alliance, Ohio, dated January 10, 1996. The Developer's interest in
the leasehold estate constituting this well location is an undivided
100% Working Interest to those oil and gas rights from the surface to
the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Buckley_#1 (Jackson Township)
Oil and Gas Lease from Paul W. Buckley and Jane P. Buckley, husband and
wife, to Atlas Resources, Inc., dated March 8, 1994 and recorded March
29, 1994 in Volume 94 DR 04472 of the Mercer County Records, ASSIGNING,
HEREIN, HOWEVER, only that portion of said Lease containing 50.00
acres, more or less as shown on the plat attached hereto as Exhibit "A-
12" and made a part hereof. Title opinion of Hunter & Hunter, 260 East
Main Street, Suite 200, Alliance, Ohio 44601, dated October 30, 1995.
The Developer's interest in the leasehold estate constituting this well
location is an undivided 100% Working Interest to those oil and gas
rights from the surface to the bottom of the Medina/Whirlpool
Formation, subject to the landowners' royalty interest.
Goebel_Unit_#1 (Jackson Township)
as more fully described in a certain Consolidation of Oil and Gas
Leases dated November 30, 1995 and recorded December 1, 1995 in Volume
95 DR 15533 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER,
ALL that portion of said Leases containing 50.00 acres, more or less as
shown on the plat attached hereto as Exhibit "A-13" and made a part
hereof. Title opinion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated November 8, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Hamilton_#3 (Jackson Township)
Oil and Gas Lease from James W. Hamilton, Jr., and Walter A. Scott,
Trustees of Wimer Farms, to Atlas Resources, Inc., dated May 9, 1991
and recorded May 28, 1991; Extension of Lease Agreement dated May 12,
1994 and recorded June 20, 1994 in Volume 94 DR 09417 of the Mercer
County Records, ASSIGNING, HEREIN, HOWEVER, only that portion of said
Lease containing 50.00 acres, more or less as shown on the plat
attached hereto as Exhibit "A-14" and made a part hereof. Title
opinion of Geiger, Teeple, Smith & Hahn, 260 East Main Street, P.O. Box
2446, Alliance, Ohio 44601, dated July 3, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Irwin_Unit_#1 (Jackson Township)
as more fully described in a certain Consolidation of Oil and Gas
Leases dated November 30, 1995 and recorded December 1, 1995 in Volume
95 DR 15530 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER,
ALL that portion of said Leases containing 50.00 acres, more or less as
shown on the plat attached hereto as Exhibit "A-15" and made a part
hereof. Title opinion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated November 14, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Irwin_#2 (Jackson Township)
Oil and Gas Lease from Mark William Irwin and Charles Michael Irwin and
William D. Irwin, Trustee for Jon Robert Irwin to Atlas Resources,
Inc., dated July 31, 1991 and recorded August 19, 1991 in Volume 91 DR
10397; Extension of Lease Agreement dated April 19, 1994 and recorded
July 12, 1994 in Volume 94 DR 10705 of the Mercer County Records,
ASSIGNING, HEREIN, HOWEVER, only that portion of said lease containing
50.00 acres, more or less as shown on the plat attached hereto as
Exhibit "A-16" and made a part hereof. Title opinion of Hunter &
Hunter, 260 East Main Street, Suite 200, Alliance, Ohio 44601, dated
November 14, 1995. The Developer's interest in the leasehold estate
constituting this well location is an undivided 100% Working Interest
to those oil and gas rights from the surface to the bottom of the
Medina/Whirlpool Formation, subject to the landowners' royalty
interest.
Kalasky_Unit_#1 (Jackson Township)
as more fully described in a certain Consolidation of Oil and Gas
Leases dated November 21, 1995 and recorded November 21, 1995 in Volume
95 DR 15141 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER,
ALL that portion of said Leases containing 50.00 acres, more or less,
as shown on the plat attached hereto as Exhibit "A-17" and made a part
hereof. Title opinion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated October 30, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Philson_#3 (Jackson Township)
Oil and Gas Lease fom Robert E. Philson and Mary Jo Philson, husband
and wife, to Atlas Resources, Inc., dated January 8, 1991 and recorded
January 29, 1991 in Volume 91 DR 01030 of the Mercer County Records,
ASSIGNING, HEREIN, HOWEVER, only that portion of said Lease containing
50.00 acres, more or less as shown on the plat attached hereto as
Exhibit "A-18" and made a part hereof. Title opinion of Hunter &
Hunter, 260 East Main Street, Suite 200, Alliance, Ohio 44601, dated
July 10, 1995. The Developer's interest in the leasehold estate
constituting this well location is an undivided 100% Working Interest
to those oil and gas rights from the surface to the bottom of the
Medina/Whirlpool Formation, subject to the landowners' royalty
interest.
Polick_Unit_#2 (Jackson Township)
as more fully described in a certain Consolidation of Oil and Gas
Leases dated November 21, 1995 and recorded November 21, 1995 in Volume
95 DR 15140 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER,
ALL that portion of said Leases containing 50.00 acres, more or less,
as shown on the plat attached hereto as Exhibit "A-19" and made a part
hereof. Title opinion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated July 11, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Polick_#3 (Jackson Township)
Oil and Gas Lease from Hazel M. Polick, widow, to Atlas Resources,
Inc., dated March 25, 1995 and recorded April 27, 1995 in Volume 95 DR
04768 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER, only
that portion of said Lease containing 50.00 acres, more or less, as
shown on the plat attached hereto as Exhibit "A-20" and made a part
hereof. Title opinion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated October 18, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Smith_Unit_#5 (Jackson Township)
as more fully described in a certain Consolidation of Oil and Gas
Leases dated November 20, 1995 and recorded November 21, 1995 in Volume
95 DR 15142 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER,
ALL that portion of said Leases containing 34.862 acres, more or less,
as shown on the plat attached hereto as Exhibit "A-21" and made a part
hereof. Title opinion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated November 8, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Snyder_#8 (Jackson Township)
Oil and Gas Lease from Richard L. Snyder and Letha O. Snyder, husband
and wife, to Atlas Resources, Inc., dated February 1, 1991 and recorded
February 12, 1991 in Volume 91 DR 01566; Extension of Lease Agreement
dated October 8, 1993 and recorded November 1, 1993 in Volume 93 DR
15108 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER, only
that portion of said Lease containing 50.00 acres, more or less, as
shown on the plat attached hereto as Exhibit "A-22" and made a part
hereof. Title opinion of Hunter & Hunter, 260 East Main Street, Suite
200, Alliance, Ohio 44601, dated October 18, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool Formation, subject to the
landowners' royalty interest.
Shearer_#1 (Mill Creek Township)
Oil and Gas Lease from Troy G. Shearer, a married man to Cabot Oil and
Gas Corporation, dated April 29, 1994 and recorded May 19, 1994 in
Volume 94 DR 07564 of the Mercer County Records, ASSIGNING, HEREIN,
HOWEVER, only that portion of said Lease containing 50.00 acres, more
or less, as shown on the plat attached hereto as Exhibit "A-23" and
made a part hereof. Title opinion of Geiger, Teeple, Smith & Hahn, 260
East Main Street, P.O. Box 2446, Alliance, Ohio 44601, dated January
26, 1996. The Developer's interest in the leasehold estate
constituting this well location is an undivided 35% Working Interest to
those oil and gas rights from the surface to the bottom of the
Medina/Whirlpool Formation, subject to the landowners' royalty
interest.
DeMaria_Unit_#1 (Pine Township)
as more fully described in a certain Consolidation of Oil and Gas
Leases dated November 30, 1995 and recorded December 1, 1995 in Volume
95 DR 15532 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER,
ALL that portion of said Leases containing 42.860 acres, more or less,
as shown on the plat attached hereto as Exhibit "A-24" and made a part
hereof. Title opinion of Geiger, Teeple, Smith & Hahn, 260 East Main
Street, P.O. Box 2446, Alliance, Ohio 44601, dated November 15, 1995.
The Developer's interest in the leasehold estate constituting this well
location is an undivided 100% Working Interest to those oil and gas
rights from the surface to the bottom of the Medina/Whirlpool
Formation, subject to the landowners' royalty interest.
Grande_#1 (Pine Township)
Oil and Gas Lease from Margaret J. Grande, divorced, not remarried, to
Atlas Resources, Inc., dated November 14, 1994 and recorded December 9,
1994 in Volume 94 DR 18324 of the Mercer County Records, ASSIGNING,
HEREIN, HOWEVER, only that portion of said Lease containing 50.00
acres, more or less, as shown on the plat attached hereto as Exhibit
"A-25" and made a part hereof. Title opinion of Geiger, Teeple, Smith
& Hahn, 260 East Main Street, P.O. Box 2446, Alliance, Ohio 44601,
dated July 27, 1995. The Developer's interest in the leasehold estate
constituting this well location is an undivided 100% Working Interest
to those oil and gas rights from the surface to the bottom of the
Medina/Whirlpool Formation, subject to the landowners' royalty
interest.
McNeish_Unit_#1 (Pine Township)
as more fully described in a certain Consolidation of Oil and Gas
Leases dated November 30, 1995 and recorded December 1, 1995 in Volume
95 DR 15531 of the Mercer County Records, ASSIGNING, HEREIN, HOWEVER,
ALL that portion of said Leases containing 50.00 acres, more or less,
as shown on the plat attached hereto as Exhibit "A-26" and made a part
hereof. Title opinion of Geiger, Teeple, Smith & Hahn, 260 East Main
Street, P.O. Box 2446, Alliance, Ohio 44601, dated November 15, 1995.
The Developer's interest in the leasehold estate constituting this well
location is an undivided 100% Working Interest to those oil and gas
rights from the surface to the bottom of the Medina/Whirlpool
Formation, subject to the landowners' royalty interest.
Pirc_#1 (Pine Township)
Oil and Gas Lease from Robert A. Pirc and Margaret A. Pirc, husband and
wife, to Atlas Resources, Inc., dated May 6, 1993 and recorded May 20,
1993 in Volume 93 DR 06602 of the Mercer County Records, ASSIGNING,
HEREIN, HOWEVER, only that portion of said Lease containing 50.00
acres, more or less, as shown on the plat attached hereto as Exhibit
"A-27" and made a part hereof. Title opinion of Geiger, Teeple, Smith
& Hahn, 260 East Main Street, P.O. Box 2446, Alliance, Ohio 44601,
dated November 15, 1995. The Developer's interest in the leasehold
estate constituting this well location is an undivided 100% Working
Interest to those oil and gas rights from the surface to the bottom of
the Medina/Whirlpool Formation, subject to the landowners' royalty
interest.
Robinson_#1 (Pine Township)
Oil and Gas Lease from Charles L. Robinson and Wanetta H. Robinson,
husband and wife, to Atlas Resources, Inc., dated February 24, 1993 and
recorded March 22, 1993 in Volume 93 DR 03529 of the Mercer County
Records, ASSIGNING, HEREIN HOWEVER, only that portion of said Lease
containing 50.00 acres, more or less, as shown on the plat attached
hereto as Exhibit "A-28" and made a part hereof. Title opinion of
Geiger, Teeple, Smith & Hahn, 260 East Main Street, P.O. Box 2446,
Alliance, Ohio 44601, dated November 15, 1995. The Developer's
interest in the leasehold estate constituting this well location is an
undivided 100% Working Interest to those oil and gas rights from the
surface to the bottom of the Medina/Whirlpool formation, subject to the
landowners' royalty interest.
T.D._Associates_#1 (Pine Township)
Oil and Gas Lease from David G. Kasmoch and Edna Mae Kasmoch, partners
of TD Associates, a partnership, to Atlas Resources, Inc., dated June
13, 1995 and recorded June 19, 1995 in Volume 95 DR 07261 of the Mercer
County Records, ASSIGNING, HEREIN, HOWEVER, only that portion of said
Lease containing 50.00 acres, more or less, as shown on the plat
attached hereto as Exhibit "A-29" and made a part hereof. Title
opinion of Hunter & Hunter, 260 East Main Street, Suite 200, Alliance,
Ohio 44601, dated July 17, 1995. The Developer's interest in the
leasehold estate constituting this well location is an undivided 100%
Working Interest to those oil and gas rights from the surface to the
bottom of the Medina/Whirlpool Formation, subject to the landowners'
royalty interest.
Ivancic_#1 (Springfield Township)
Oil and Gas Lease from John Ivancic, Jr., and Sherry T. Ivancic,
husband and wife, to Cabot Oil and Gas Corporation dated November 19,
1987 and recorded January 5, 1988 in Volume 88 DR 00063 of the Mercer
County Records; and, recorded February 8, 1988 in Volume 833 Page 30 of
the Lawrence County Records; and by Assignment of Oil and Gas Leases
dated December 6, 1991 and recorded December 17, 1991 in Volume 91 DR
15615 of the Mercer County Records; and, recorded on March 3, 1992, in
Volume 1013, Page 458 of the Lawrence County Records, ASSIGNING,
HEREIN, HOWEVER, only that portion of said Lease containing 50.00
acres, more or less, as shown on the plat attached hereto as Exhibit
"A-30" and made a part hereof. Title opinion of Geiger, Teeple, Smith
& Hahn, 260 East Main Street, P.O. Box 2446, Alliance, Ohio 44601,
dated October 22, 1992, Extension of Title Report dated August 21,
1995. The Developer's interest in the leasehold estate constituting
this well location is an undivided 100% Working Interest to those oil
and gas rights from the surface to the bottom of the Medina/Whirlpool
Formation, subject to the landowners' royalty interest.
VENANGO_COUNTY:
Clinton_Irwin_Rod_and_Gun_Club_#1 (Irwin Township)
Oil and Gas Lease from Clinton - Irwin Rod and Gun Club, Inc., a
Pennsylvania not for profit organization, to Atlas Resources, Inc.,
dated November 15, 1993 and recorded December 6, 1993 in BK 0963 PG
0587 of the Venango County Records, ASSIGNING, HEREIN, HOWEVER, only
that portion of said Lease containing 50.00 acres, more or less, as
shown on the plat attached hereto as Exhibit "A-31" and made a part
hereof. Title opinion of Geiger, Teeple, Smith & Hahn, 260 East Main
Street, P.O. Box 2446, Alliance, Ohio 44601, dated October 20, 1995.
The Developer's interest in the leasehold estate constituting this well
location is an undivided 100% Working Interest to those oil and gas
rights from the surface to the bottom of the Medina/Whirlpool
Formation, subject to the landowner's royalty interest.
Jones_#1 (Irwin Township)
Oil and Gas Lease from Mary Frances Jones, single to Atlas Resources,
Inc., dated January 3, 1995 and recorded February 13, 1995 in BK 0026
PG 0470 of the Venango County Records, ASSIGNING, HEREIN, HOWEVER, only
that portion of said Lease containing 50.00 acres, more or less, as
shown on the plat attached hereto as Exhibit "A-32" and made a part
hereof. Title opinion of Geiger, Teeple, Smith & Hahn, 260 East Main
Street, P.O. Box 2446, Alliance, Ohio 44601, dated October 20, 1995.
The Developer's interest in the leasehold estate constituting this well
location is an undivided 100% Working Interest to those oil and gas
rights from the surface to the bottom of the Medina/Whirlpool
Formation, subject to the landowner's royalty interest.
============================================================================
EXHIBITS A-1, A-32
Exhibits A-1, A-32 are suvey plats showing the properties as described above.
============================================================================
Exhibts B1-B32 are copies of assignments of the properties as listed above,
from Atlas Resources to the Partnership as filed in the counties of Mercer
and Venango, Pennsylvania.
CONSENT OF INDEPENDENT AUDITOR
FOR ATLAS-ENERGY FOR THE NINETIES-PUBLIC #4 LTD.
The firm, as Independent Certified Public Accountants, hereby consents to
the use of the audit report dated February 11, 1997 on the balance sheet
of Atlas-Energy for the Nineties-Public #4 Ltd., a Pennsylvania Limited
Partnership as of December 31, 1996, and the related statements of income,
changes in partners' capital accounts and cash flows for the year then ended
, in the U.S. Securities and Exchange Commission Form 10-KSB and
any amendments thereto for Atlas-Energy for the Nineties-Public #4 Ltd.
/s/ McLaughlin & Courson
McLaughlin & Courson
Certified Public Accountants
March 25, 1997
Pittsburgh, Pennsylvania
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 204,711
<SECURITIES> 0
<RECEIVABLES> 347,537
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 552,248
<PP&E> 7,331,715
<DEPRECIATION> 869,814
<TOTAL-ASSETS> 7,938,436
<CURRENT-LIABILITIES> 25,069
<BONDS> 0
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0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,938,436
<SALES> 1,139,327
<TOTAL-REVENUES> 1,339,327
<CGS> 1,162,542
<TOTAL-COSTS> 1,162,542
<OTHER-EXPENSES> 159,812
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 16,973
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<INCOME-CONTINUING> 16,973
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