Atlas America Series 27-2006 10-Q 2009 Q1 Quarterly report

	United States
	Securities and Exchange Commission
	Washington, D.C. 20549
	Form 10-Q
(Mark One)
R	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2009
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____ to _____
	Commission file number 0-52615
	ATLAS AMERICA SERIES 27-2006 L.P.
	(Name of small business issuer in its charter)
Delaware		20-5242075
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
Westpointe Corporate Center One
1550 Coraopolis Heights Road, 2nd Floor
Moon Township, PA		15108
(Address of principal executive offices)		(zip code)
Issuer’s telephone number, including area code: (412) 262-2830
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 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.  YesR No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes o No R
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 (Check One) Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company R
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No R
Transitional Small Business Disclosure Format (check one): Yes o No R

ATLAS AMERICA SERIES 27-2006 L.P.

(A Delaware Limited Partnership)

INDEX TO QUARTERLY REPORT

ON FORM 10-Q

PART I.	FINANCIAL INFORMATION	PAGE
Item 1:	Financial Statements
	Balance Sheets as of March 31, 2009 and December 31, 2008	3
	Statements of Net Earnings for the Three Months ended March 31, 2009 and 2008	4
	Statement of Changes in Partners’ Capital for the Three Months ended March 31, 2009	5
	Statements of Cash Flows for the Three Months ended March 31, 2009 and 2008	6
	Notes to Financial Statements	7-15
Item 2:	Management’s Discussion and Analysis of Financial Condition or Plan of Operations	15-19
Item 4:	Controls and Procedures	19
PART II.	OTHER INFORMATION
Item 1:	Legal Proceedings	19
Item 6:	Exhibits	20
SIGNATURES		20
CERTIFICATIONS		21-24

2

ATLAS AMERICA SERIES 27-2006 L.P.

BALANCE SHEETS

	March 31,			December 31,
	2009			2008
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	643,300		$	661,800
Accounts receivable – affiliate		1,911,800			2,478,800
Short-term hedge receivable due from affiliate		1,288,700			2,431,800
Total current assets		3,843,800			5,572,400
Oil and gas properties, net		19,167,000			19,685,600
Long-term hedge receivable due from affiliate		808,900			1,539,700
	$	23,819,700		$	26,797,700
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accrued liabilities	$	18,700		$	22,200
Short-term hedge liability due to affiliate		3,000			214,100
Total current liabilities		21,700			236,300
Asset retirement obligation		2,043,200			2,013,000
Long-term hedge liability due to affiliate		300			192,700
Partners’ capital:
Managing general partner		5,177,400			5,760,400
Limited partners (2,840 units)		17,423,000			18,595,300
Accumulated other comprehensive loss		(845,900	)		—
Total partners' capital		21,754,500			24,355,700
	$	23,819,700		$	26,797,700

The accompanying notes are an integral part of these financial statements.

3

ATLAS AMERICA SERIES 27-2006 L.P.

STATEMENTS OF NET EARNINGS

(Unaudited)

	Three Months Ended
	March 31,
	2009		2008
REVENUES
Natural gas and oil	$	1,472,800	$	3,955,600
Total revenues		1,472,800		3,955,600
COSTS AND EXPENSES
Production		585,800		990,600
Depletion		518,600		2,560,200
Accretion of asset retirement obligation		30,200		(66,400	)
General and administrative		61,000		63,700
Total expenses		1,195,600		3,548,100
Net earnings	$	277,200	$	407,500
Allocation of net earnings (loss):
Managing general partner	$	172,000	$	569,900
Limited partners	$	105,200	$	(162,400	)
Net earnings (loss) per limited partnership unit	$	37	$	(57	)

The accompanying notes are an integral part of these financial statements.

4

ATLAS AMERICA SERIES 27-2006 L.P.

STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

FOR THE THREE MONTHS ENDED

March 31, 2009

(Unaudited)

							Accumulated
	Managing						Other
	General			Limited			Comprehensive
	Partner			Partners			Loss			Total
Balance at January 1, 2009	$	5,760,400		$	18,595,300		$	—		$	24,355,700
Participation in revenues and expenses:
Net production revenues		289,100			597,900			—			887,000
Depletion		(87,400	)		(431,200	)		—			(518,600	)
Accretion of asset retirement obligation		(9,800	)		(20,400	)		—			(30,200	)
General and administrative		(19,900	)		(41,100	)		—			(61,000	)
Net earnings		172,000			105,200			—			277,200
Other comprehensive loss		—			—			(845,900	)		(845,900	)
Subordination		(92,400	)		92,400			—			—
Distributions to partners		(662,600	)		(1,369,900	)		—			(2,032,500	)
Balance at March 31, 2009	$	5,177,400		$	17,423,000		$	(845,900	)	$	21,754,500

The accompanying notes are an integral part of these financial statements.

5

ATLAS AMERICA SERIES 27-2006 L.P.

STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31,
	2009			2008
Cash flows from operating activities:
Net earnings	$	277,200		$	407,500
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depletion		518,600			2,560,200
Non-cash loss on derivative value		624,500			—
Accretion of asset retirement obligation		30,200			(66,400	)
Decrease in accounts receivable-affiliate		567,000			331,200
Decrease in accrued liabilities		(3,500	)		(19,700	)
Net cash provided by operating activities		2,014,000			3,212,800
Cash flows from financing activities:
Distributions to partners		(2,032,500	)		(3,145,800	)
Net cash used in financing activities		(2,032,500	)		(3,145,800	)
Net (decrease) increase in cash and cash equivalents		(18,500	)		67,000
Cash and cash equivalents at beginning of period		661,800			1,142,300
Cash and cash equivalents at end of period	$	643,300		$	1,209,300
Supplemental schedule of non-cash investing and financing activities:
Assets returned to managing general partner:
Tangible equipment	$	—		$	(39,600	)
Intangible drilling costs		—			(392,900	)
	$	—		$	(432,500	)

The accompanying notes are an integral part of these financial statements.

6

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS

March 31, 2009

(Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Atlas America Series 27-2006 L.P. (the “Partnership”) is a Delaware Limited Partnership which includes Atlas Resources, LLC of Pittsburgh, Pennsylvania, as Managing General Partner ("MGP") and Operator, and 1,365 subscribers to units as Limited Partners. The Partnership was formed on July 21, 2006 to drill and operate gas wells located in Pennsylvania, New York and Tennessee. The Partnership has no employees and relies on its MGP for management which, in turn, relies on its parent company, Atlas Energy Resources, LLC (NYSE:ATN), ("Atlas Energy"), for administrative services.

The financial statements as of March 31, 2009 and for the three months ended March 31, 2009 and 2008 are unaudited.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission.  However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented.  The unaudited interim financial statements should be read in conjunction with the audited financial statements included in the Partnership's Form 10-K for the year ended December 31, 2008.  The results of operations for the three months ended March 31, 2009 may not necessarily be indicative of the results of operations for the year ended December 31, 2009.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

In addition to matters discussed further in this note, the Partnership’s significant accounting policies are detailed in its audited financial statements and notes thereto in the Partnership’s Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission.

Accounts Receivable and Allowance for Possible Losses

In evaluating the need for an allowance for possible losses, the Partnership's MGP, performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current creditworthiness, as determined by review of its customers' credit information.  Credit is extended on an unsecured basis to many of its energy customers. At March 31, 2009 and December 31, 2008, the Partnership's MGP's credit evaluation indicated that the Partnership has no need for an allowance for possible losses.

Use of Estimates

Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues, costs and expenses during the reporting period.  Actual results could differ from these estimates.

Revenue Recognition

Because there are timing differences between the delivery of the Partnership’s natural gas and oil and the receipt of a delivery statement, the Partnership has unbilled revenues.  These revenues are accrued based upon volumetric data from the Partnership’s records and estimates of the related transportation and compression fees which are, in turn, based upon applicable product prices. The Partnership had unbilled trade receivables of $1,326,800 at March 31, 2009 and $1,789,600 at December 31, 2008, which are included in Accounts receivable-affiliate on the Partnership's Balance Sheets.

7

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Oil and Gas Properties

Oil and gas properties are recorded at cost. Depletion is based on cost less estimated salvage value primarily using the unit-of-production method over the assets' estimated useful lives. In addition, accumulated depletion includes impairment adjustments to reflect the write-down to fair market value of the oil and gas properties. Maintenance and repairs are expensed as incurred. Major renewals and improvements that extend the useful lives of property are capitalized.

Oil and gas properties consist of the following at the dates indicated:	March 31,			December 31,
	2009			2008
Natural gas and oil properties:
Proved properties:
Leasehold interests	$	1,716,900		$	1,716,900
Wells and related equipment		86,310,000			86,310,000
		88,026,900			88,026,900
Accumulated depletion		(68,859,900	)		(68,341,300	)
	$	19,167,000		$	19,685,600

Recently Issued Financial Accounting Standards

In May 2008, the Financial Accounting Standards Board, ("FASB") issued Statement of Financial Accounting Standards No. 162, The Hierarchy of Generally Accepted Accounting Policies ("SFAS 162"), which reorganizes the GAAP hierarchy. The purpose of the new standard is to improve financial reporting by providing a consistent framework for determining what accounting principles should be used when preparing the U.S. GAAP financial statements. The standard is effective 60 days after the SEC's approval of the PCAOB's amendments to AU Section 411. The adoption of SFAS 162 will not have an impact on the Partnership's financial position or results of operations.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, or SFAS 161, an amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, (“SFAS 133”). SFAS 161 requires entities to provide qualitative disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of and gains and losses on derivative contracts, and details of credit-risk-related contingent features in their hedged positions. The standard is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged, but not required. SFAS 161 also requires entities to disclose more information about the location and amounts of derivative instruments in financial statements; how derivatives and related hedges are accounted for under SFAS 133 and how the hedges affect the entity’s financial position, financial performance, and cash flows. The Partnership adopted the provision of SFAS 161 on January 1, 2009 and its adoption resulted in additional disclosures related to its commodity derivatives (See Note 5).

8

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Financial Accounting Standards (Continued)

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurement (“SFAS 157”). SFAS 157 addresses the need for increased consistency in fair value measurements, defining fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a framework for measuring fair value and expands disclosure requirements. In February 2008, the FASB issued FSP FAS 157-2, "Effective Date of FASB Statement No. 157," 157-2, (“FSP FAS 157-2”). FSP FAS 157-2, which was effective upon issuance, delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value at least once a year, to fiscal years beginning after November 15, 2008. On January 1, 2009, the Partnership adopted SFAS No. 157 for nonfinancial assets and liabilities that are not measured at fair value on a recurring basis. For the Partnership, the nonfinancial assets and liabilities is limited to the initial recognition of asset retirement obligations and the impairment of oil and gas properties. FSP FAS 157-2 also covers interim periods within the fiscal years for items within its scope. The Partnership adopted SFAS 157 as of January 1, 2008 with respect to its commodity derivative instruments which are measured at fair value within its financial statements (See Note 6).

NOTE 3 - TRANSACTIONS WITH ATLAS RESOURCES, LLC AND ITS AFFILIATES

The Partnership has entered into the following significant transactions with its MGP and its affiliates as provided under its Partnership agreement:

·   Administrative costs which are included in general and administrative expenses in the Partnership’s Statements of Net Earnings are payable at $75 per well per month. Administrative costs incurred for the three months ended March 31, 2009 and 2008 were $43,300 and $44,300, respectively.

·   Monthly well supervision fees which are included in production expenses in the Partnership’s Statements of Net Earnings are payable at $376 per well per month in 2009 and 2008, for operating and maintaining the wells. Well supervision fees incurred, for the three months ended March 31, 2009 and 2008 were $217,000 and $222,200, respectively.

·   Transportation fees which are included in production expenses in the Partnership’s Statements of Net Earnings are generally payable at 13% of the natural gas sales price. Transportation fees incurred for the three months ended March 31, 2009 and 2008 were $240,100 and $633,100, respectively.

·   Assets returned to the MGP which are disclosed on the Partnership's Statements of Cash Flows as a non-cash activity for the three months ended March 31, 2008 were $432,500.

The MGP and its affiliates perform all administrative and management functions for the Partnership including billing revenues and paying expenses. “Accounts receivable-affiliate” on the Partnership's Balance Sheets represents the net production revenues due from the MGP.

9

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 3 - TRANSACTIONS WITH ATLAS RESOURCES, LLC AND ITS AFFILIATES (Continued)

Subordination by Managing General Partner

Under the terms of the Partnership agreement, the MGP may be required to subordinate up to 50% of its share of net production revenues of the Partnership to provide a distribution to the limited partners equal to at least 10% of their agreed subscriptions. Subordination is determined on a cumulative basis, in each of the first five years of Partnership operations, commencing with the first distribution of net revenues to the investor partners (July 2007) and expiring 60 months from that date. For the three months ended March 31, 2009, the MGP was required to subordinate $92,400 of its net revenues of $184,700. Therefore MGP distributions were decreased and the limited partners were increased by $92,400 as shown on the Statement of Changes in Partners’ Capital for the three months ended March 31, 2009.

NOTE 4 – COMPREHENSIVE LOSS

Comprehensive loss includes net income and all other changes in equity of a business during a period from transactions and other events and circumstances from non-owner sources. These changes, other than net income, are referred to as "other comprehensive income (loss)" and, for the Partnership, include changes in the fair value of unsettled derivative contracts accounted for as cash flow hedge. A reconciliation of the Partnership’s comprehensive loss for the periods indicated is as follows:

	Three Months Ended
	March 31,
	2009			2008
Net earnings	$	277,200		$	407,500
Other comprehensive loss:
Unrealized holding loss on hedging contracts		(997,200	)		(3,845,000	)
Less: reclassification adjustment for losses (gains) realized in net earnings		151,300			(438,000	)
Total other comprehensive loss		(845,900	)		(4,283,000	)
Comprehensive loss	$	(568,700	)	$	(3,875,500	)

NOTE 5 – DERIVATIVE INSTRUMENTS

The Partnership applies the provisions of SFAS 133, which requires each derivative instrument to be recorded in the balance sheet as either an asset or liability measured at fair value. Changes in a derivative instrument’s fair value are recognized currently in earnings unless specific hedge accounting criteria are met.

The Partnership is exposed to certain risks relating to its ongoing business operations. The risk is managed by using derivative instruments related to commodity price risk. Forward contracts on natural gas and oil are entered into to manage the price risk associated with forecasted sales of natural gas and crude oil. In accordance with SFAS No. 133, the Partnership designates these derivatives as cash flow hedges and the derivative instruments have been recorded as either assets or liabilities at fair value in the balance sheet. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified to earnings in the same period during which the hedged transaction affects earnings. The following table summarizes the fair value of derivative instruments as of March 31, 2009 and December 31, 2008, as well as the gain or loss recognized for the three months ended March 31, 2009 and 2008, respectively. There were no gains or losses recognized in income for ineffective derivative instruments for the three months ended March 31, 2009 and 2008, respectively.

10

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 5 – DERIVATIVE INSTRUMENTS (Continued)

Fair Value of Derivative Instruments:
	Asset Derivatives					Liability Derivatives
Derivatives in		Fair Value					Fair Value
SFAS 133 Cash Flow	Balance Sheet	March 31,		December 31,		Balance Sheet	March 31,			December 31,
Hedging Relationships	Location	2009		2008		Location	2009			2008
Commodity contracts:	Current assets	$	1,288,700	$	2,431,800	Current liabilities	$	(3,000	)	$	(214,100	)
	Long-term assets		808,900		1,539,700	Long-term liabilities		(300	)		(192,700	)
Total derivatives under SFAS No. 133		$	2,097,600	$	3,971,500		$	(3,300	)	$	(406,800	)

Effects of Derivative Instruments on Statements of Net Earnings:

Derivatives in	Gain/(Loss) Recognized in OCI on Derivative (Effective Portion) Three Months Ended						Location of Gain/(Loss) Reclassified from Accumulated		Gain/(Loss) Reclassified from OCI into Income (Effective Portion) Three Months Ended
SFAS 133 Cash Flow	March 31,			March 31,			OCI into Income		March 31,			March 31,
Hedging Relationship	2009			2008			(Effective Portion)		2009			2008
Commodity contracts	$	(997,200	)	$	(3,845,000	)		Natural gas and oil revenue	$	(151,300	)	$	438,000

Atlas Energy on behalf of the Partnership from time to time enters into natural gas and crude oil future option contracts and collar contracts to hedge exposure to changes in natural gas prices and oil prices. At any point in time, such contracts may include regulated New York Mercantile Exchange (“NYMEX”) futures, options contracts and non-regulated over-the-counter futures contracts with qualified counterparties. NYMEX contracts are generally settled with offsetting positions, but may be settled by the delivery of natural gas. Crude oil contracts are based on a West Texas Intermediate ("WTI") index. These contracts have qualified and been designated as cash flow hedges and recorded at their fair values.

At March 31, 2009, the Partnership reflected a net hedge asset on its Balance Sheets of $2,094,300, however unrealized gains of $2,940,200 were netted with impairment charges of the Partnership’s oil and gas properties for the period ended December 31, 2008 which results in a net unrealized accumulated loss of $845,900. Of the remaining $845,900 net unrealized loss in accumulated other comprehensive loss at March 31, 2009, if the fair values of the instruments remain at current market values, the Partnership will reclassify $448,100 of net losses to its Statements of Net Earnings over the next twelve month period as these contracts settle, and $397,800 of net losses in later periods. Actual amounts that will be reclassified will vary as a result of future price changes. Ineffective hedge gains or losses are recorded within the Statements of Net Earnings while the hedge contract is open and may increase or decrease until settlement of the contract. The Partnership recognized no gains or losses during the three months ended March 31, 2009 and 2008 for hedge ineffectiveness or as a result of the discontinuance of cash flow hedges.

11

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 5 – DERIVATIVE INSTRUMENTS (Continued)

As of March 31, 2009, Atlas Energy had allocated to the Partnership the following natural gas and oil volumes hedged:

Natural Gas Fixed Price Swaps

Production			Average
Period Ending	Volumes		Fixed Price		Fair Value
December 31,	(MMbtu) (1)		(per MMbtu)		Asset (2)
2009		276,600	$	8.24	$	1,092,500
2010		226,900		8.11		489,400
2011		152,800		7.84		171,800
2012		108,200		8.06		112,500
2013		11,500		8.73		17,000
					$	1,883,200

Natural Gas Costless Collars

Production				Average
Period Ending	Option	Volumes		Floor & Cap		Fair Value
December 31,	Type	(MMbtu) (1)		(per MMbtu)		Asset (2)
2009	Puts purchased		1,600	$	11.00	$	10,700
2009	Calls sold		1,600		15.35		—
2010	Puts purchased		28,900		7.84		60,700
2010	Calls sold		28,900		9.01		—
2011	Puts purchased		61,300		7.48		63,300
2011	Calls sold		61,300		8.44		—
2012	Puts purchased		8,000		7.00		3,200
2012	Calls sold		8,000		8.32		—
2013	Puts purchased		2,300		7.00		500
2013	Calls sold		2,300		8.25		—
						$	138,400

Crude Oil Fixed Price Swaps

Production			Average
Period Ending	Volumes		Fixed Price		Fair Value
December 31,	(Bbl)		(per Bbl)		Asset (3)
2009		400	$	99.73	$	18,900
2010		400		97.40		13,900
2011		300		96.44		9,300
2012		200		96.00		6,000
2013		100		96.06		1,600
					$	49,700

12

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 5 – DERIVATIVE INSTRUMENTS (Continued)

Crude Oil Costless Collars

Production				Average
Period Ending	Option	Volumes		Floor & Cap		Fair Value
December 31,	Type	(Bbl)		(per Bbl)		Asset (3)
2009	Puts purchased		200	$	85.00	$	8,100
2009	Calls sold		200		117.48		—
2010	Puts purchased		200		85.00		6,600
2010	Calls sold		200		112.92		—
2011	Puts purchased		200		85.00		4,600
2011	Calls sold		200		110.81		—
2012	Puts purchased		200		85.00		3,000
2012	Calls sold		200		110.06		—
2013	Puts purchased		100		85.00		700
2013	Calls sold		100		110.09		—
						$	23,000
				Total Net Asset		$	2,094,300

____________

(1)   MMBTU represents million British Thermal Units.

(2)   Fair value based on forward NYMEX natural gas prices.

(3)   Fair value based on forward WTI crude oil prices.

NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS 157 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Partnership prioritizes the inputs of the valuation techniques used to measure fair value into three levels.

Level 1– Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2– Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3– Unobservable inputs that reflect the entity's own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

13

ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

All of the Partnership’s derivatives contracts are defined as Level 2. The Partnership's natural gas and crude oil derivative contracts are valued based on prices quoted on the NYMEX or WTI and adjusted by the respective counterparty using various assumptions including quoted forward prices, time value, volatility factors, and contractual prices for the underlying instruments. In accordance with SFAS 157, the following table represents the Partnership's fair value hierarchy for its financial instruments at March 31, 2009.

	Fair Value Measurements at March 31, 2009 Using
	Quoted prices		Significant other		Significant
	in active		observable		unobservable
	markets		inputs		inputs
	(Level 1)		(Level 2)		(Level 3)
Commodity-based derivatives	$	—	$	2,094,300	$	—
Total	$	—	$	2,094,300	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Partnership has certain assets and liabilities that are reported at fair value on a nonrecurring basis in its Balance Sheets. The following methods and assumptions were used to estimate fair values.

Oil and Gas Property Impairments. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Partnership reviews its proved oil and gas properties for impairment annually or when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties. The Partnership estimates the expected future cash flows from its oil and gas properties and compares such future cash flows to the carrying amount of the oil and gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Partnership will adjust the carrying amount of the oil and gas properties to their fair value in the current period. The factors used to determine fair value include, but are not limited to, estimates of reserves, future production estimates, anticipated capital expenditures, and a discount rate commensurate with the risk associated with realizing the expected cash flows projected. The Partnership recorded an impairment of $38,135,500 for the year ended December 31, 2008, however there were no impairment indicators and thus there was no impairment charge for the three months ended March 31, 2009 and 2008.

Asset Retirement Obligations. The Partnership estimates the fair value of asset retirement obligations based on discounted cash flow projections using numerous estimates, assumptions and judgments regarding such factors at the date of establishment for a legal obligation for an asset retirement obligation such as: amounts and timing of settlements; interest rates; and estimated inflation rates. There were no new asset retirement obligations incurred for the threemonths ended March 31, 2009 and 2008, respectively.

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ATLAS AMERICA SERIES 27-2006 L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

March 31, 2009

(Unaudited)

NOTE 7 - ASSET RETIREMENT OBLIGATION

The Partnership accounts for the estimated plugging and abandonment costs for its oil and gas properties in accordance with Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (“SFAS 143”) and FASB, Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations.

A reconciliation of the Partnership’s liability for plugging and abandonment costs for the periods indicated is as follows:

	Three Months Ended
	March 31,
	2009		2008
Asset retirement obligation at beginning of period	$	2,013,000	$	1,690,100
Accretion expense		30,200		(66,400	)
Asset retirement obligation at end of period	$	2,043,200	$	1,623,700

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATIONS (UNAUDITED)

Forward-Looking Statements

The matters discussed within this report include forward-looking statements. These statements may be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should,” or “will,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this report are forward-looking statements. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

Management’s Discussion and Analysis should be read in conjunction with our Financial Statements and the Notes to our Financial Statements.

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General

We were formed as a Delaware limited partnership on July 21, 2006, with Atlas Resources, LLC as our Managing General Partner, or MGP, to drill natural gas development wells. Atlas Resources, Inc. was merged into a newly-formed limited liability company, Atlas Resources LLC, which became an indirect subsidiary of Atlas America, Inc. Atlas Resources, LLC now serves as our MGP. We have no employees and rely on our MGP for management which, in turn relies on its parent company, Atlas Energy Resources, LLC (NYSE:ATN), or Atlas Energy, for administrative services.

Our wells are currently producing natural gas and, to a far lesser extent, oil which are our only products. Substantially all of our gas is gathered and delivered to market through Atlas Pipeline Partners, L.P.’s gas gathering system, which is managed by an affiliate of our MGP.  We do not plan to sell any of our wells and will continue to produce them until they are depleted or become uneconomical to produce, at which time they will be plugged and abandoned or sold.

Results of Operations

The following table sets forth information relating to our production revenues, volumes, sales prices, production costs and depletion during the periods indicated:

	Three Months Ended
	March 31,
	2009			2008
Production revenues (in thousands):
Gas	$	1,455		$	3,859
Oil		18			97
Total	$	1,473		$	3,956
Production volumes:
Gas (mcf/day) (1)		2,449			4,866
Oil (bbls/day) (1)		5			13
Total (mcfe/day) (1)		2,479			4,944
Average sales prices:
Gas (per mcf) (1)	$	6.60		$	8.71
Oil (per bbl) (1)	$	40.32		$	85.16
Average production costs:
As a percent of revenues		40	%		25	%
Per mcfe (1)	$	2.63		$	2.20
Depletion per mcfe	$	2.32		$	5.69

_____________

(1)   “Mcf” means thousand cubic feet, “mcfe” means thousand cubic feet equivalent and “bbls” means barrels.  Bbls are converted to mcfe using the ratio of six mcfs to one bbl.

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Natural Gas Revenues.  Our natural gas revenues were $1,454,900 and $3,858,400 for the three months ended March 31, 2009 and 2008, respectively, a decrease of $2,403,500 (62%). This decrease was due to a decrease in production volumes to 2,449 mcf per day for the three months ended March 31, 2009 from 4,866 mcf per day for the three months ended March 31, 2008, a decrease of 2,417 mcf per day (50%) and a decrease in the average sales price we received for our natural gas to $6.60 per mcf for the three months ended March 31, 2009 as compared to $8.71 per mcf for the three months ended March 31, 2008, a decrease of $2.11 per mcf (24%). The $2,403,500 decrease in natural gas revenues for the three months ended March 31, 2009 as compared to the prior year similar period was attributable to a $1,937,400 decrease in production volumes and a $466,100 decrease in natural gas sales prices after the effect of financial hedges. The overall decrease in natural gas production volumes for the three months ended March 31, 2009 resulted from the normal decline inherent in the life of a well.

Oil Revenues. We drill wells primarily to produce natural gas, rather than oil, but some wells have limited oil production. Our oil revenues were $17,900 and $97,200 for the three months ended March 31, 2009 and 2008, respectively, a decrease of $79,300 (82%). This decrease was due to a decrease in production volumes to 5 bbls per day for the three months ended March 31, 2009 from 13 bbls per day for the three months ended March 31, 2008, a decrease of 8 bbls per day (62%) and a decrease in the average sales price we received for our oil to $40.32 per bbl for the three months ended March 31, 2009 as compared to $85.16 per bbl for the three months ended March 31, 2008, a decrease of $44.84 per bbl (53%). The $79,300 decrease in oil revenues for the three months ended March 31, 2009 as compared to the prior year similar period was attributable to a $59,300 decrease in production volumes and a $20,000 decrease in oil prices.

Expenses.  Production expenses were $585,800 and $990,600 for the three months ended March 31, 2009 and 2008, respectively, a decrease of $404,800 (41%). This decrease was primarily attributable to a decrease in the transportation fees and other variable expenses for the three months ended March 31, 2009 as compared to the prior year similar period.

Depletion of oil and gas properties as a percentage of oil and gas revenues were 35% and 65% for the three months ended March 31, 2009 and 2008, respectively. This percentage change is directly attributable to revenues, oil and gas reserve quantities, product prices, production volumes and changes in the depletable cost basis of our oil and gas properties.

General and administrative expenses for the three months ended March 31, 2009 and 2008, were $61,000 and $63,700, respectively, a decrease of $2,700 (4%). These expenses include third-party costs for services as well as the monthly administrative fees charged by our MGP. This decrease was primarily due to lower third-party costs as compared to the prior year similar period.

Liquidity and Capital Resources

Cash provided by operating activities decreased $1,198,800 in the three months ended March 31, 2009 to $2,014,100 as compared to $3,212,800 for the three months ended March 31, 2008. This decrease was primarily due to a decrease in net earnings before depletion, net non-cash loss on derivative value and accretion of $1,450,800. In addition, the change in accounts receivable affiliate increased operating cash flows by $235,800 in the three months ended March 31, 2009 as compared to the three months ended March 31, 2008.

Cash used in financing activities decreased $1,113,300 during the three months ended March 31, 2009 to $2,032,500 from $3,145,800 for the three months ended March 31, 2008. This decrease was due to lower distributions to partners.

Our MGP may withhold funds for future plugging and abandonment costs. Any additional funds, if required, will be obtained from production revenues or borrowings from our MGP or its affiliates, which are not contractually committed to make loans to us. The amount that we may borrow may not at any time exceed 5% of our total subscriptions, and we will not borrow from third-parties.

We believe that our future cash flows from operations and amounts available from borrowings from our MGP or its affiliates, if any, will be adequate to fund our operations.

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Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. On an on-going basis, we evaluate our estimates, including those related to our asset retirement obligations, depletion and certain accrued receivables and liabilities. We base our estimates on historical experience and on various other assumptions that we believe 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. A discussion of our significant accounting policies we have adopted and followed in the preparation of our financial statements is included within “Notes to Financial Statements” in Part I, Item 1, “Financial Statements” in this quarterly report and in our Annual Report on Form 10-K for the year ended December 31, 2008.

Subordination by Managing General Partner

Under the terms of the Partnership agreement, the MGP may be required to subordinate up to 50% of its share of net production revenues of the Partnership to provide a distribution to the limited partners equal to at least 10% of their agreed subscriptions. Subordination is determined on a cumulative basis, in each of the first five years of Partnership operations, commencing with the first distribution of net revenues to the investor partners (July 2007) and expiring 60 months from that date. For the three months ended March 31, 2009, the MGP was required to subordinate $92,400 of its net revenues of $184,700. Therefore MGP distributions were decreased and the limited partners were increased by $92,400 as shown on the Statement of Changes in Partners’ Capital for the three months ended March 31, 2009.

Recently Issued Financial Accounting Standards

In May 2008, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards, No. 162, The Hierarchy of Generally Accepted Accounting Policies, or SFAS 162, which reorganizes the GAAP hierarchy. The purpose of the new standard is to improve financial reporting by providing a consistent framework for determining what accounting principles should be used when preparing U.S. GAAP financial statements. The standard is effective 60 days after the SEC's approval of the PCAOB's amendments to AU Section 411. The adoption of SFAS 162 will not have an impact on our financial position or results of operations.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, or SFAS 161, an amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, or SFAS 133. SFAS 161 requires entities to provide qualitative disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of and gains and losses on derivative contracts, and details of credit-risk-related contingent features in their hedged positions. The standard is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged, but not required. SFAS 161 also requires entities to disclose more information about the location and amounts of derivative instruments in financial statements; how derivatives and related hedges are accounted for under SFAS 133 and how the hedges affect the entity’s financial position, financial performance, and cash flows. We adopted the provision of SFAS 161 on January 1, 2009 and its adoption resulted in additional disclosures related to its commodity derivatives (See Note 5).

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In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurement, or SFAS 157. SFAS 157 addresses the need for increased consistency in fair value measurements, defining fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a framework for measuring fair value and expands disclosure requirements. In February 2008, the FASB issued FSP FAS 157-2, "Effective Date of FASB Statement No. 157," 157-2, or FSP FAS 157-2. FSP FAS 157-2, which was effective upon issuance, delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value at least once a year, to fiscal years beginning after November 15, 2008. On January 1, 2009 we adopted SFAS No. 157 for nonfinancial assets and liabilities that are not measured at fair value on a recurring basis. Our nonfinancial assets and liabilities is limited to the initial recognition of asset retirement obligations and the impairment of oil and gas properties. FSP FAS 157-2 also covers interim periods within the fiscal years for items within its scope. We adopted SFAS 157 as of January 1, 2008 with respect to our commodity derivative instruments which are measured at fair value within our financial statements (See Note 6).

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in Securities and Exchange Act of 1934 reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the MGP’s management, including the chief executive officer and the chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, the MGP’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the MGP’s management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision of the chief executive officer and chief financial officer, the MGP has carried out an evaluation of the effectiveness of the Partnership’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the chief executive officer and chief financial officer concluded that the Partnership’s disclosure controls and procedures are effective at the reasonable assurance level at March 31, 2009.

There have been no changes in the Partnership’s internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially effect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Managing General Partner is not aware of any legal proceedings filed against the Partnership.

Affiliates of the MGP and their subsidiaries are party to various routine legal proceedings arising in the ordinary course of their collective business. The MGP management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on the MGP's financial condition or results of operations.

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ITEM 6.  EXHIBITS

EXHIBIT INDEX

Exhibit No.	Description
4.0	Amended and Restated Certificate and Agreement of Limited Partnership for Atlas America Series 27-2006 L.P. (1)
10.1	Drilling and Operating Agreement for Atlas America Series 27-2006 L.P. (1)
31.1	Certification Pursuant to Rule 13a-14/15(d)-14
31.2	Certification Pursuant to Rule 13a-14/15(d)-14
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
	Act of 2002
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
	Act of 2002

______________

(1) Filed on April 30, 2007 in the Form S-1 Registration Statement dated April 30, 2007, File No. 0-52615

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SIGNATURES

Pursuant to the requirements of the Securities of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Atlas America Series 27-2006 L.P.
	Atlas Resources, LLC, Managing General Partner
Date:  May 14, 2009	By:/s/ Freddie M. Kotek
	Freddie M. Kotek, Chairman of the Board of Directors, Chief Executive Officer
	and President
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.
Date:  May 14, 2009	By:/s/ Freddie M. Kotek
	Freddie M. Kotek, Chairman of the Board of Directors, Chief Executive
	Officer and President
Date:  May 14, 2009	By:/s/ Matthew A. Jones
	Matthew A. Jones, Chief Financial Officer
Date:  May 14, 2009	By:/s/ Sean P. McGrath
	Sean P. McGrath, Chief Accounting Officer

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