Atrisco Oil & Gas 10Q 2007 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


	FORM 10-Q

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

____________________________

ATRISCO OIL AND GAS, L.L.C.

(Exact name of Registrant as Specified in its Charter)

____________________________

NEW MEXICO		000-52246		56-2613010
(State or other jurisdiction of incorporation or organization)		Commission File Number		(I.R.S. Employer Identification No.)

1730 Montano Rd. NW, Suite B; Albuquerque, NM 87107

(Address of principal executive offices)

(505) 836-0306

(Issuer’s telephone number)

____________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

State the number of shares outstanding of the issuer’s classes of common equity, as of the latest practicable date:

Class		Outstanding at March 24, 2009
Class A Units, no par value		794,927
Class B Units, no par value		1

INDEX

		PAGE
PART I.	FINANCIAL INFORMATION

Item 1	Financial Statements.	1

	Balance Sheets at September 30, 2007 (unaudited) and December 31, 2006 (audited)	1

	Statements of Operations for the Three Month Period Ended September 30, 2007 and the Nine Month Period Ended September 30, 2007	2

	Statements of Unitholders’ Equity at September 30, 2007 (unaudited) and December 31, 2006 (audited)	3

	Statements of Cashflow for the Nine Month Period Ended September 30, 2007	4

	Condensed Notes to the Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	12

Item 4T.	Controls and Procedures.	12

PART II.	OTHER INFORMATION	14

Item 1.	Legal Proceedings.	14

Item 1A.	Risk Factors.	14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	14

Item 3.	Default Upon Senior Securities.	14

Item 4.	Submission to a Vote of Security Holders.	14

Item 5.	Other Information.	14

Item 6.	Exhibits.	14

Signatures		17

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BALANCE SHEET

			September 30, 2007			December 31, 2006
ASSETS
CURRENT ASSETS:
	Cash		$	282,052		$	27
	Accounts receivable			10,000			—
	Prepaid expenses			4,910			—
		Total Current Assets		296,962			27
FIXED ASSETS:
	Equipment			24,429			—
	Less accumulated depreciation			(2,249	)		—
		Total Fixed Assets		22,180			—
OTHER ASSETS:
		Mineral rights		70,304			70,304
		Total Other Assets		70,304			70,304
		Total Assets	$	389,446		$	70,331
LIABILITIES AND UNITHOLDERS’ EQUITY
CURRENT LIABILITIES:
	Account payable		$	37,763		$	—
	Current debt			3,156			—
	Deferred revenue			279,999			—
		Total Current Liabilities		320,918			—
COMMITMENTS AND CONTINGENCIES				—			—
UNITHOLDERS’ EQUITY:
	Class A Units, no par value, 794,927 Units authorized, issued and outstanding			70,304			70,304
	Class B Unit, no par value, One Unit authorized, issued and outstanding			100			100
	Retained earnings (deficit)			(1,876	)		(73)
		Total Unitholders’ Equity		68,528			70,331
		Total Liabilities and Unitholders’ Equity	$	389,446		$	70,331

The accompanying notes are an integral part of this financial statement.

STATEMENT OF OPERATIONS

		Three Months Ended September 30,				Nine Months Ended September 30,
		2007		2006		2007		2006
REVENUES
Oil and Gas Leases	$	27,568		—	$	86,970		—
Transitional Services Agreement		145,187		—		228,100		—
TOTAL REVENUES		172,755				315,070		—
OPERATING EXPENSES
Professional Fees		173,264		—		271,827		—
Occupancy		12,823		—		13,656		—
Public relations		6,545		—		7,964		—
Unitholder services		12,859		—		17,058		—
Insurance expense		2,729		—		4,132		—
Office expense		843		—		2,249		—
Travel and entertainment		613		—		1,026		—
TOTAL OPERATING EXPENSES		209,676		—		317,912		—
NET INCOME(LOSS) FROM OPERATIONS		(36,921	)	—		(2,842	)	—
OTHER INCOME
Interest income		1,185		—		1,185		—
Interest expense		(110	)	—		(146	)	—
TOTAL OTHER INCOME		1,075		—		1,039		—
NET INCOME(LOSS)	$	(35,846	)	—	$	(1,803	)	—
NET INCOME(LOSS) PER CLASS A UNIT	$	(0.045	)	—	$	(0.002	)	—
WEIGHTED AVERAGE NUMBER OF CLASS A UNITS OUTSTANDING, BASIC AND DILUTED		794,927		N/A		794,927		N/A

The accompanying notes are an integral part of this financial statement.

STATEMENT OF UNITHOLDERS’ EQUITY

FROM THE DATE OF INCEPTION ON SEPTEMBER 8, 2006

THROUGH SEPTEMBER 30, 2007

										Total
	Class A Units			Class B Units			Retained			Unitholders’
	Shares	Amount		Shares	Amount		Earnings			Equity
BALANCE, September 8, 2006	—	$	—	—	$	—	$	—		$	—
Class B Units issued, September 8, 2006	—		—	1		100		—			100
Class A Units issued, December 7, 2006	794,927		70,304	—		—		—			70,304
Net loss for the period ended December 31, 2006	—		—	—		—		(73	)		(73)
BALANCE, December 31, 2006	794,927	$	70,304	1	$	100		—		$	70,331
Net loss for the nine month period ended September 30, 2007	—		—	—		—		(1,803	)		(1,803)
BALANCE, September 30, 2007	794,927	$	70,304	1	$	100	$	(1,876	)	$	68,528

The accompanying notes are an integral part of this financial statement.

STATEMENT OF CASH FLOWS

	For the Nine Months Ended September 30,
	2007			2006
Cash Flows From Operating Activities:
Net Income	$	(1,803	)	$	—
Depreciation		2,249			—
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Decrease (increase) in accounts receivable		(10,000	)		—
Decrease (increase) in prepaid expenses		(4,910	)		—
Increase (decrease) in accounts payable		37,763			—
Increase (decrease) in deferred revenue		279,999			—
Net Cash Provided by Operating Activities		303,298			—
Cash Flows From Investing Activities
Proceeds from Class B Unit issuance		—			100
Purchase of fixed assets		(24,429	)		—
Net Cash Used by Investing Activities		(24,429	)		100
Cash Flows From Financing Activities:
Proceeds from Current debt, net		3,156			—
Net Cash Provided by Financing Activities		3,156			—
Net Increase in Cash		282,025			100
Cash at Beginning of Period		27			—
Cash at End of Period	$	282,052		$	100
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	—		$	—
Income taxes	$	—		$	—

The accompanying notes are an integral part of this financial statement.

CONDENSED NOTES TO FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

The foregoing unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim consolidated financial information and with the instructions to Regulation S-K, as promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2006. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

Operating results for the nine month period ending September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Atrisco Oil and Gas, L.L.C., a New Mexico limited liability company (the “Company,” “we,” “us,” or “our,” depending on the context), was organized on September 8, 2006. We were organized as a vehicle to receive the Mineral Assets (as that term is defined herein) to be distributed by Westland Development Co., Inc., a New Mexico corporation (“Westland”), in the spin-off to occur immediately prior to the merger of Westland with and into SCC Acquisition Corp., a Delaware corporation (“SCC”), with Westland as the surviving company (the “Merger”).

Westland deeded to us a Quitclaim Mineral Deed and Assignment of Oil and Gas Leases, dated December 4, 2006 (the “Deed”), pursuant to which Westland transferred and contributed to us (i) 100% of the future rents and royalties that Westland is entitled to receive under two existing oil and gas leases (the “Leases”); (ii) a 50% undivided interest in all mineral rights owned by Westland (collectively, the “Mineral Assets”); and (iii) other valuable consideration. In exchange for the transfer and contribution of the Mineral Assets, we issued to Westland 794,927 Class A units (the “Class A Units”) and one Class B unit (the “Class B Unit,” and together with the Class A Units, the “Units”), representing 100% of our membership interests. Westland has completed the distribution of all of the Class A Units to Westland’s shareholders of record as a dividend on a one-for-one basis, in accordance with each such shareholder’s respective ownership of Westland common stock.

This summary of significant accounting policies is presented to assist in understanding our financial statements. The financial statements and notes are representations of our management, which is responsible for the integrity and objectivity of the financial statements and notes. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

Cash and Cash Equivalents

We consider all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management.

Recently Enacted Accounting Standards

Statement of Financial Accounting Standards (“SFAS”) SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments – an Amendment of FASB Statements No. 133 and 140,” and SFAS No. 156, “Accounting for Servicing of Financial Assets – an Amendment of FASB Statement No. 140,” were recently issued. SFAS No. 155 and 156 are not currently applicable to us, and their effect on the financial statements for the three month period ended September 30, 2007 would not have been significant.

Fixed Assets

Equipment is recorded at cost. Depreciation is provided using the straight-line method over the useful lives of the respective assets, typically 3-5 years. Major additions and betterments are capitalized. Upon retirement or disposal, the cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is reflected in operations.

The following table summarizes our fixed assets:

	September 30,		December 31,
	2007		2006
Office Equipment	$	13,170	$	—
Furniture and equipment		11,259		—
Allowance for Depreciation and amortization		(2,249)		—
Fixed Assets, net	$	22,180	$	—

Concentration Risk

We maintain our cash balances in bank deposit accounts which periodically have balances in excess of the amounts covered by FDIC insurance. At September 30, 2007 the uninsured amount was $182,052.

Revenues from the oil and gas lease contracts represented 27.60% of revenues and revenues from the Transition Services Agreement, described below, represented 72.40% of revenues for the nine months ended September 30, 2007.

Revenue Recognition

We recognize revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 104 when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable and collectability is reasonably assured.

Oil and gas lease revenue is recognized on a straight-line basis over the term of the Leases.

Lease Revenues

The Leases cover an aggregate of approximately 16,600 acres of Westland’s land. One lease, originally made with Great Northern Gas Co. (the “Great Northern Lease”), covers approximately 9,400 acres and will expire on September 17, 2011. The second lease, originally made with Sun Valley Energy Corp. (the “Sun Valley Lease”), covers approximately 7,200 acres and expired on June 6, 2008. By assignment and contract, Tecton Energy, LLC, a Texas limited liability company (“Tecton”) became the Lessee for each lease.

Pursuant to the Leases, the lessee is required to pay us royalties, lease bonuses, delay rentals and other payments. Our retained owner’s royalty is 12.5% on the Sun Valley Lease and 13.5% on the Great Northern Lease.

Current delay rental payments for the Great Northern Lease are $2.00 per acre per year. Current delay rental payments for the Sun Valley Lease are $5.00 per acre per year.

On August 20, 2007, we entered into a 5 year term oil, gas and mineral lease with Tecton, pursuant to which we leased all of the Mineral Assets owned by us, which remained unleased following the Merger, within Bernalillo County, New Mexico. We received a bonus payment of $250,000, which will be recognized over the term of the lease. During the term of the lease, we will receive a Drill or Pay Fee of $6.00 per acre each year if Tecton does not drill or re-enter one well per year. Royalties from any oil and gas discovered from the drilling will be paid based on production at a rate of 15% to up to 18.5%.

During the nine months ended September 30, 2007, we recognized $86,970 in revenues under the Leases.

Transition Services Agreement

We and Westland entered into a Transition Services Agreement, dated December 4, 2006 (the “Transition Services Agreement”), in a form mutually agreed upon by such parties, pursuant to which Westland will provide us with up to $200,000 per year in certain administrative support services for the period beginning at the effective time of the Merger, December 7, 2006, and ending on the third anniversary of the completion of the Merger on December 7, 2009.

During the nine months years ended September 30, 2007, we recognized $228,100 in revenues under the Transition Services Agreement.

NOTE 3. MINERAL INTEREST

The Mineral Assets are substantially all of the assets which we own. The Mineral Assets include (i) 100% of the future rents and royalties that Westland is entitled to receive under the Leases; and (ii) a 50% undivided interest in all mineral rights previously wholly owned 100% by Westland. Westland is a New Mexico corporation that is the successor to property interests of a Spanish land grant in New Mexico, currently amounting to approximately 46,400 acres. We and Westland each own 50% of the mineral rights, including oil and gas rights, to the 46,400 acres. We and Westland also retained certain oil, gas and other mineral rights on some of the lands that Westland previously sold.

NOTE 4. DEFERRED REVENUE

Deferred revenue represents amounts received from oil and gas leases. Deferred revenue is earned and recognized as revenue over the life of the oil and gas leases using a straight line method. Deferred revenues at September 30, 2007 were $279,999.

NOTE 5. UNITS OF MEMBERSHIP INTEREST

Class A Units

We have authorized and issued 794,927 Class A Units, no par value, in exchange for mineral rights from Westland. Pursuant to the Deed, Westland transferred and contributed to us the Mineral Assets, which include (i) 100% of the future rents and royalties that Westland is entitled to receive under the Leases; and (ii) a 50% undivided interest in all mineral rights previously wholly owned by Westland. In exchange for the transfer and contribution of the Mineral Assets, we issued to Westland 794,927 Class A Units and one Class B Unit, representing 100% of our membership interests. On December 7, 2006, Westland distributed all of the Class A Units to Westland’s shareholders of record as a dividend on a one-for-one basis in accordance with each such shareholder’s respective ownership of Westland common stock.

Following the spin-off and the completion of the Merger, (i) Westland’s shareholders of record immediately prior to the Merger owned 100% of the Class A Units and (ii) Westland owned the sole Class B Unit.

Class B Unit

We have authorized and issued one Class B Unit, no par value.

Proceeds from the sale of the Class B Unit totaled $100.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Operating Leases

Westland has allowed us to use its offices as a mailing address, as needed, pursuant to the Transition Services Agreement. In August 2007, we and the Atrisco Heritage Foundation jointly entered into a four-year lease for office space. Lease expense relating to operating space leased was approximately $5,196 for the nine months ended September 30, 2007. Future minimum lease payments are as follows:

Payments Due by Period
Contractual Obligations		Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Office Lease	$	126,206	$	31,357	$	66,045	$	28,804	$	-
Total	$	126,206	$	31,357	$	66,045	$	28,804	$	-

Executive Consultant Agreement

On February 15, 2007, we entered into a four-year Consultant Agreement with our Chief Executive Officer, which provides for the continuation of payment to our Chief Executive Officer if he is terminated for reasons other than cause. At September 30, 2007, the future contractual commitment for our Chief Executive Officer was approximately $2,083 per month through February 15, 2011.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains certain financial information and statements regarding Atrisco Oil and Gas, L.L.C., a New Mexico limited liability company (the “Company,” “we,” “us” or “our,” depending on the context), and its operations and financial prospects of a forward-looking nature. Although these statements accurately reflect management’s current understanding and beliefs, we caution you that certain important factors may affect our actual results and could cause such results to differ materially from any forward-looking statements which may be deemed to be made in this Report. For this purpose, any statements contained in this Report which are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “intend,” “expect,” “believe,” “anticipate,” “could,” “estimate,” “plan,” or “continue,” or the negative variations of these words or comparable terminology, are intended to identify forward-looking statements. There can be no assurance of any kind that such forward-looking information and statements in any way reflect our actual future operations and/or financial results, and any of such information and statements should not be relied upon either in whole or in part in any decision to invest in the shares. Many of the factors, which could cause actual results to differ from forward-looking statements, are outside our control. These factors include, but are not limited to, the factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and incorporated herein by reference.

Any capitalized terms used herein but not otherwise defined have the meanings ascribed to them in the Notes to Financial Statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We were formed as a New Mexico limited liability company by the filing of our Articles of Organization with the New Mexico Public Regulation Commission on September 8, 2006. We are governed by our Articles of Organization, Limited Liability Company Agreement, as amended, and the New Mexico Limited Liability Company Act.

We were formed in connection with the Agreement and Plan of Merger, dated as of July 19, 2006, by and between Westland and SCC Acquisition Corp., a Delaware corporation (“SCC”), pursuant to which SCC was merged with and into Westland, with Westland as the surviving entity.

Pursuant to the terms of the Deed, Westland transferred and contributed to us (i) the Leases; (ii) the Mineral Assets; and (iii) other valuable consideration. In exchange for the transfer and contribution of the Mineral Assets and other valuable consideration, we issued to Westland 794,927 Class A units (the “Class A Units”) and one Class B unit (the “Class B Unit,” and together with the Class A Units, the “Units”), representing 100% of our membership interests.

Westland distributed of all of the Class A Units to Westland’s shareholders of record immediately prior to the Merger as a dividend on a one-for-one basis in accordance with each such shareholder’s respective ownership of Westland common stock. The spin-off was treated for federal income tax purposes as a taxable dividend of Westland’s earnings and profits. Westland’s shareholders received their Class A Units from the paying agent for the Merger promptly following completion of the Merger on December 7, 2006.

Prior to, and contingent upon, the completion of the Merger, we and Westland entered into a Transition Services Agreement, dated December 4, 2006 (the “Transition Services Agreement”), in a form mutually agreed upon by such parties, pursuant to which Westland will provide us with up to $200,000 per year in certain administrative support services for the period beginning at the effective time of the Merger and ending on the third anniversary of the completion of the Merger.

Following the spin-off and the completion of the Merger, (i) Westland’s shareholders of record immediately prior to the Merger owned 100% of the Class A Units; and (ii) Westland owned the sole Class B Unit.

Our headquarters is located at 1730 Montano NW, Suite B Albuquerque, NM 87107. Our telephone number is (505) 836-0306. Our website address is www.atriscooilandgas.com.

Purpose

We were formed for the limited purpose of (a) receiving, holding, protecting and exploiting the Mineral Assets; (b) paying or providing for any costs or liabilities incurred in carrying out our purpose; (c) making permitted distributions to the Class A unitholders (the “Class A Unitholders”); and (d) performing all activities necessary or incidental to the foregoing. We do not currently intend to engage in any other trade or business.

In serving this purpose we will seek to maximize revenue generated from leases entered into with natural resource exploration companies for subsequent distribution to the Class A Unitholders. The maintenance and exploitation of the Mineral Assets will be undertaken by, or under the supervision of, our officers and directors. Our ability to exploit the Mineral Assets will be subject to the limitations in the Deed and the Leases and to the approval rights of the Class B unitholder (the “Class B Unitholder,” and together with the Class A Unitholders, the “Unitholders”).

Distributions

Any excess cash held by us which is derived from the income, if any, received from the Mineral Assets, net of a reasonable reserve for our future operating costs and expenses, will be distributed by us to the Class A Unitholders in proportion to the number of Class A Units held by them, at least annually, or as otherwise determined by our board of directors (the “Board”).

We will make no distributions to the Class B Unitholder. The Class B Unitholder will not be entitled to share in our profits, losses or assets.

Results of Operations

Three Months Ended September 30, 2007

Operations were initiated in the three months ended September 30, 2006.

Revenues

Our revenues for the three months ended September 30, 2007 were $172,755 and were composed of the following:

	Three Months Ended September 30, 2007
Revenues
Oil and Gas Leases	$	27,568
Transition Services Agreement	$	145,187

We had no revenue for the three months ended September 30, 2006 as we had not begun operations at such time.

Operating Expenses

During the three month period ended September 30, 2007, total operating expenses for the three month period ended September 30, 2007 were $209,676. We incurred $173,264 in professional fees; $12,823 in occupancy expenses and $12,859 in Unitholder services expense during this period. Included in professional fees were $121,541 in services provided under the Transition Services Agreement and $39,446 in legal fees.

We had no expenses for the three months ended September 30, 2006 as we had not begun operations at such time.

Nine Months Ended September 30, 2007

Revenues

Our revenues for the nine months ended September 30, 2007 were $315,070 and were composed of the following:

	Nine Months Ended September 30, 2007
Revenues
Oil and Gas Leases	$	86,970
Transitional Services Agreement	$	228,100

We had no revenue for the nine months ended September 30, 2006 as we had not begun operations at such time.

Operating Expenses

Total operating expenses for the nine months ended September 30, 2007 were $317,912. We incurred $271,827 in professional fees, $13,656 in occupancy expense and $17,058 in unitholder services expense during this period. Included in professional fees were $178,701 in services provided under the Transition Services Agreement and $56,476 in legal fees.

We had no expenses for the nine months ended September 30, 2006 as we had not begun operations at such time.

Liquidity and Capital Resources

For the nine months ended September 30, 2007, we provided net cash of $303,298 from operating activities.

Cash used in investing activities for the nine months ended September 30, 2007 were $24,429 for the purchase of office furniture and equipment.

Cash provided by financing activities for the nine months ended September 30, 2007 were $3,156 from the financing of our insurance premiums.

At September 30, 2007 and December 31, 2006, we had cash and cash equivalents available in the amounts of $282,052 and $27, an increase of $282,025.

There are currently no known trends, commitments, events or uncertainties that will result in a change in our liquidity. We have traditionally used our current assets for liquidity and intend to continue to do so in the future.

We have no commitment for capital resources and no material changes are currently planned for changes in capital resources.

Contractual Obligations

Executive Consultant Agreement

Oil, Gas and Mineral Lease

Operating Leases

Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Office Lease	126,206	$	31,357	$	66,045	$	28,804	$	-
Total	126,206	$	31,357	$	66,045	$	28,804	$	-

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements. These statements have been prepared in accordance with generally accepted accounting principles in the United States of America.

Use of estimates in preparation of financial statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, based on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The following critical accounting policies rely upon assumptions, judgments and estimates and were used in the preparation of our consolidated financial statements.

Mineral Assets

The value of the Mineral Assets, at the time acquired by us in the Merger transaction was based upon the valuation of an independent appraiser.

Revenue Recognition

We recognize revenue in accordance with Staff Accounting Bulletin No. 104 when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable and collectability is reasonably assured.

Oil and gas lease revenue is recognized on a straight-line basis over the term of the leases.

Contingent Liability

In accordance with Statement of Financial Accounting Standards Interpretation No. 14, we may have certain contingent liabilities with respect to material existing or potential claims, lawsuits and other proceedings. We accrue liabilities when it is probable that future cost will be incurred and such cost can be measured. At September 30, 2007 we did not have any contingent liabilities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4T. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It is the responsibility of our management to establish and maintain adequate internal controls over our financial reporting.

As required by Rule 13a-15 of the Exchange Act, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2007. Based on that

evaluation, the officers concluded that our disclosure controls and procedures were effective as of September 30, 2007.

This Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Report.

Changes in Internal Control Over Financial Reporting

During the quarter ended September 30, 2007 there were no changes in our internal control over financial reporting in the quarter covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

ITEM 1A. Risk factors

Not applicable.

ITEM 2. UNREGISTERED SALEs OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

Item 6. Exhibits

The Exhibits below are filed as part of this Report.

* Indicates an Exhibit that is incorporated by reference.

Exhibit Number		Description

3.1*		Articles of Organization of Atrisco Oil and Gas, L.L.C. (filed as Exhibit 2.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

3.2*		Limited Liability Company Agreement of Atrisco Oil and Gas, L.L.C. (filed as Exhibit 3.2 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

3.3*		Amendment to Limited Liability Company Agreement, dated June 15, 2007 (filed as Exhibit 3.3 to the Form 10-Q for the fiscal quarter ended June 30, 2007, filed with the SEC on March 23, 2009).

10.1*		Oil and Gas Lease and Addendum from Westland Development Co., Inc. to SunValley Energy Corporation, dated June 6, 2000, recorded in Book A6, page 7854 (all recording references to the Office of the County Clerk of Bernalillo County, New Mexico, covering a total of approximately 7,210.53 acres as to all depths covered by said lease as amended) (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.2*		Partial Release of Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated June 15, 2001, recorded in Book A21, page 5985 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).


10.3*		Second Addendum to Correct Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated August 2, 2000 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.4*		Option to Exercise Oil & Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated August 2, 2002 (filed as Exhibit 10.4 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.5*		Second Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated June 3, 2003 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.6*		Third Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated effective November 1, 2003 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.7*		Fourth Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated June 6, 2004 (filed as Exhibit 10.7 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.8*		Fourth Amendment to Oil and Gas Lease and Option Agreement between Westland Development Co., Inc. and SunValley Energy Corporation, dated May 3, 2005 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.9*		Partial Assignment of Oil & Gas Leases, dated February 10, 2006, among Sun Valley Energy Corporation and Sierra Oil & Gas, Inc., Rally Exploration, Inc. KHL, Inc. and Tecton Energy, LLC (filed as Exhibit 10.9 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.10*		Fifth Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated April 21, 2006, recorded in book A115, page 7121 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.11*		Oil and Gas Lease from Westland Development Co., Inc. to Great Northern Gas Company, dated September 17, 2001, recorded in Book A25, page 1245 (all recording references to the Office of the County Clerk of Bernalillo County, New Mexico, covering a total of approximately 9,068 acres as to all depths covered by said lease as amended) (filed as Exhibit 6.2 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.12*		Amendment to Oil and Gas Lease between Westland Development Co., Inc. and Great Northern Gas Company, dated November 1, 2003, recorded in Book A70, page 3152 (filed as Exhibit 6.2 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.13*		Amendment to Oil and Gas Lease between Westland Development Co., Inc. and Great Northern Gas Company, dated August 26, 2004 (filed as Exhibit 6.2 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.14*		Consent to Assignment of Oil and Gas Lease between Westland Development Co., Inc. and Great Northern Gas Company from Great Northern Gas Company to TXO Energy, Inc., dated November 5, 2003 (filed as Exhibit 10.14 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.15*		Consent to Assignment of Oil and Gas Lease between Westland Development Co., Inc. and TXO Energy, Inc. from TXO Energy, Inc. to Tecton Energy, LLC, dated May 12, 2006 (filed as Exhibit 10.15 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).


10.16*		Term Assignment of Oil and Gas Lease between Great Northern Gas Company, as Assignor, and Sun Valley Energy Corporation, as Assignee, dated March 13, 2003 (filed as Exhibit 10.16 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.17*		Term Assignment of Oil and Gas Lease between Sun Valley Energy Corporation, as Assignor, and Great Northern Gas Company, as Assignee, dated March 13, 2003 (filed as Exhibit 10.17 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.18*		Form of Quitclaim Mineral Deed and Assignment of Oil and Gas Leases (filed as Exhibit 6.3 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.19*		Renewal Oil & Gas Lease, dated September 17, 2006, between Westland Development Co., Inc. and Tecton Energy, LLC (filed as Exhibit 6.5 to the Form 10-SB12G/A, filed with the SEC on October 6, 2006).

10.20*		Transition Services Agreement, dated December 4, 2006, by and between Westland Development Co., Inc. and Atrisco Oil and Gas, L.L.C. (filed as Exhibit 10.20 to the Form 10-K for the fiscal year ended December 31, 2006, filed with the SEC on March 23, 2009).

10.21*		Consultant Agreement, dated February 15, 2007, by and between Peter Sanchez and Atrisco Oil and Gas, L.L.C. (filed as Exhibit 10.21 to the Form 10-Q for the fiscal quarter ended March 31, 2007, filed with the SEC on March 23, 2009).

10.22		Oil, Gas and Mineral Lease, dated August 20, 2007, by and between Tecton Energy, LLC and Atrisco Oil and Gas, L.L.C.

31.1		Chief Executive Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Chief Financial Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Chief Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Chief Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	Atrisco Oil and Gas, L.L.C.

March 24, 2009	By:	/s/ Peter Sanchez
		Name:	Peter Sanchez
		Title:	Chief Executive Officer (Principal Executive Officer)

EXHIBIT INDEX

* Indicates an Exhibit that is incorporated by reference.

Exhibit Number		Description

3.1*		Articles of Organization of Atrisco Oil and Gas, L.L.C. (filed as Exhibit 2.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

3.2*		Limited Liability Company Agreement of Atrisco Oil and Gas, L.L.C. (filed as Exhibit 3.2 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

3.3*		Amendment to Limited Liability Company Agreement, dated June 15, 2007 (filed as Exhibit 3.3 to the Form 10-Q for the fiscal quarter ended June 30, 2007, filed with the SEC on March 23, 2009).

10.1*		Oil and Gas Lease and Addendum from Westland Development Co., Inc. to SunValley Energy Corporation, dated June 6, 2000, recorded in Book A6, page 7854 (all recording references to the Office of the County Clerk of Bernalillo County, New Mexico, covering a total of approximately 7,210.53 acres as to all depths covered by said lease as amended) (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.2*		Partial Release of Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated June 15, 2001, recorded in Book A21, page 5985 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.3*		Second Addendum to Correct Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated August 2, 2000 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.4*		Option to Exercise Oil & Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated August 2, 2002 (filed as Exhibit 10.4 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.5*		Second Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated June 3, 2003 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.6*		Third Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated effective November 1, 2003 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.7*		Fourth Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated June 6, 2004 (filed as Exhibit 10.7 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.8*		Fourth Amendment to Oil and Gas Lease and Option Agreement between Westland Development Co., Inc. and SunValley Energy Corporation, dated May 3, 2005 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.9*		Partial Assignment of Oil & Gas Leases, dated February 10, 2006, among Sun Valley Energy Corporation and Sierra Oil & Gas, Inc., Rally Exploration, Inc. KHL, Inc. and Tecton Energy, LLC (filed as Exhibit 10.9 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).


10.10*		Fifth Amendment to Oil and Gas Lease between Westland Development Co., Inc. and SunValley Energy Corporation, dated April 21, 2006, recorded in book A115, page 7121 (filed as Exhibit 6.1 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.11*		Oil and Gas Lease from Westland Development Co., Inc. to Great Northern Gas Company, dated September 17, 2001, recorded in Book A25, page 1245 (all recording references to the Office of the County Clerk of Bernalillo County, New Mexico, covering a total of approximately 9,068 acres as to all depths covered by said lease as amended) (filed as Exhibit 6.2 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.12*		Amendment to Oil and Gas Lease between Westland Development Co., Inc. and Great Northern Gas Company, dated November 1, 2003, recorded in Book A70, page 3152 (filed as Exhibit 6.2 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.13*		Amendment to Oil and Gas Lease between Westland Development Co., Inc. and Great Northern Gas Company, dated August 26, 2004 (filed as Exhibit 6.2 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.14*		Consent to Assignment of Oil and Gas Lease between Westland Development Co., Inc. and Great Northern Gas Company from Great Northern Gas Company to TXO Energy, Inc., dated November 5, 2003 (filed as Exhibit 10.14 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.15*		Consent to Assignment of Oil and Gas Lease between Westland Development Co., Inc. and TXO Energy, Inc. from TXO Energy, Inc. to Tecton Energy, LLC, dated May 12, 2006 (filed as Exhibit 10.15 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.16*		Term Assignment of Oil and Gas Lease between Great Northern Gas Company, as Assignor, and Sun Valley Energy Corporation, as Assignee, dated March 13, 2003 (filed as Exhibit 10.16 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.17*		Term Assignment of Oil and Gas Lease between Sun Valley Energy Corporation, as Assignor, and Great Northern Gas Company, as Assignee, dated March 13, 2003 (filed as Exhibit 10.17 to the Form 10-Q for the fiscal quarter ended September 30, 2006, filed with the SEC on March 20, 2009).

10.18*		Form of Quitclaim Mineral Deed and Assignment of Oil and Gas Leases (filed as Exhibit 6.3 to the Form 10-SB12G, filed with the SEC on September 29, 2006).

10.19*		Renewal Oil & Gas Lease, dated September 17, 2006, between Westland Development Co., Inc. and Tecton Energy, LLC (filed as Exhibit 6.5 to the Form 10-SB12G/A, filed with the SEC on October 6, 2006).

10.20*		Transition Services Agreement, dated December 4, 2006, by and between Westland Development Co., Inc. and Atrisco Oil and Gas, L.L.C. (filed as Exhibit 10.20 to the Form 10-K for the fiscal year ended December 31, 2006, filed with the SEC on March 23, 2009).

10.21*		Consultant Agreement, dated February 15, 2007, by and between Peter Sanchez and Atrisco Oil and Gas, L.L.C. (filed as Exhibit 10.21 to the Form 10-Q for the fiscal quarter ended March 31, 2007, filed with the SEC on March 23, 2009).

10.22		Oil, Gas and Mineral Lease, dated August 20, 2007, by and between Tecton Energy, LLC and Atrisco Oil and Gas, L.L.C.

31.1		Chief Executive Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Chief Financial Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1		Chief Executive Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Chief Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Good

Atrisco Oil & Gas Inactive 10-Q2007 Q3 Quarterly report

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