Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
The following sets forth unaudited pro forma condensed financial information of Atlas Resources Series28-2010 L.P. (the “Company”) prepared in accordance with Article 11 of RegulationS-X. You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Company’s financial statements and related notes and other financial information included in its most recent Annual Report on Form10-K and Quarterly Reports on Form10-Q. The unaudited pro forma condensed financial information is based on, and has been derived from, the Company’s historical financial statements.
On May 4, 2017, certain subsidiaries of Titan Energy, LLC (“Titan”) entered into a purchase and sale agreement with Diversified Energy, LLC to sell its conventional Appalachia and Marcellus assets (the “Appalachia Assets”) for an aggregate of $84.2 million (the “Appalachia Asset Sale”). On June 30, 2017, Titan completed a majority of the Appalachia Asset Sale for cash proceeds of approximately $65.6 million, which included customary purchase price adjustments. On September 29, 2017, Titan completed the sale of the remainder of the Appalachia Assets for additional cash proceeds of $11.4 million (the “Second Closing”). The assets Titan sold to Diversified at the Second Closing included its indirect interests in certain of the assets of the Company (the “Company Appalachia Assets”).
The unaudited pro forma condensed balance sheet as of June 30, 2017 and statements of operations for the years ended December 31, 2016 and 2015 and the six months ended June 30, 2017 give pro forma effect to the sale and the discontinued operations treatment of the Company Appalachia Assets as if it occurred on June 30, 2017 (in the case of the balance sheet) or January 1, 2015 (in the case of the statements of operations).
The unaudited pro forma condensed financial information includes unaudited pro forma adjustments that are factually supportable and directly attributable to the sale of the Company Appalachia Assets. In addition, the unaudited pro forma adjustments are expected to have a continuing impact on the Company’s results. The Company has prepared the unaudited pro forma condensed financial information for illustrative purposes only and it does not purport to represent what the results of operations or financial condition would have been had the sale of the Company Appalachia Assets actually occurred on the dates indicated, nor does the Company purport to project the results of operations or financial condition for any future period or as of any future date. The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
ATLAS RESOURCES SERIES28-2010 L.P.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
JUNE 30, 2017
| Historical June 30, 2017 | Company Appalachia Assets Pro Forma Adjustments | Pro Forma June 30, 2017 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash | $ | 12,100 | $ | (11,900 | ) (a) | $ | 200 | |||||
Accounts receivable trade-affiliate | 1,725,900 | (1,124,000 | ) (a) | 601,900 | ||||||||
Sales proceeds receivable-affiliate | 17,800 | — | 17,800 | |||||||||
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Total current assets | 1,755,800 | (1,135,900 | ) | 619,900 | ||||||||
Gas and oil properties, net | 23,495,100 | (19,219,000 | ) (a) | 4,276,100 | ||||||||
Long-term asset retirement receivable-affiliate | 195,800 | (32,800 | ) (a) | 163,000 | ||||||||
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Total assets | $ | 25,446,700 | $ | (20,387,700 | ) | $ | 5,059,000 | |||||
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LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||
Current liabilities: | ||||||||||||
Accrued liabilities | $ | 156,900 | $ | (11,900 | ) (a) | $ | 145,000 | |||||
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Total current liabilities | 156,900 | (11,900 | ) | 145,000 | ||||||||
Asset retirement obligations | 3,523,400 | (1,748,800 | ) (a) | 1,774,600 | ||||||||
Partners’ capital: | ||||||||||||
Managing general partner’s interest | 3,846,600 | (2,833,600 | ) (b) | 1,013,000 | ||||||||
Limited partners’ interest (7,500 units) | 17,919,800 | (15,793,400 | ) (b) | 2,126,400 | ||||||||
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Total partners’ capital | 21,766,400 | (18,627,000 | ) | 3,139,400 | ||||||||
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Total liabilities and partners’ capital | $ | 25,446,700 | $ | (20,387,700 | ) | $ | 5,059,000 | |||||
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See accompanying notes to unaudited pro forma condensed financial statements.
ATLAS RESOURCES SERIES28-2010 L.P.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2017
| Historical Six Months Ended June 30, 2017 | Company Appalachia Assets Pro Forma Adjustments | Pro Forma Six Months Ended June 30, 2017 | ||||||||||
REVENUES | ||||||||||||
Natural gas | $ | 3,962,100 | $ | (2,291,700 | ) (c) | $ | 1,670,400 | |||||
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Total revenues | 3,962,100 | (2,291,700 | ) | 1,670,400 | ||||||||
COSTS AND EXPENSES | ||||||||||||
Production | 1,835,800 | (563,300 | ) (c) | 1,272,500 | ||||||||
Depletion | 867,000 | (617,500 | ) (d) | 249,500 | ||||||||
Accretion of asset retirement obligations | 89,000 | (50,700 | ) (d) | 38,300 | ||||||||
General and administrative | 66,400 | (27,300 | ) (c) | 39,100 | ||||||||
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Total costs and expenses | 2,858,200 | (1,258,800 | ) | 1,599,400 | ||||||||
Operating income | 1,103,900 | (1,032,900 | ) | 71,000 | ||||||||
Gain on sale of oil and gas properties | 514,500 | — | 514,500 | |||||||||
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Net income | $ | 1,618,400 | $ | (1,032,900 | ) | $ | 585,500 | |||||
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Allocation of net income: | ||||||||||||
Managing general partner | $ | 751,500 | $ | (539,800 | ) | $ | 211,700 | |||||
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Limited partners | $ | 866,900 | $ | (493,100 | ) | $ | 373,800 | |||||
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Net income per limited partnership unit | $ | 116 | $ | (66 | ) | $ | 50 | |||||
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See accompanying notes to unaudited pro forma condensed financial statements.
ATLAS RESOURCES SERIES28-2010 L.P.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2016
| Historical Year Ended December 31, 2016 | Company Appalachia Assets Pro Forma Adjustments | Pro Forma Year Ended December 31, 2016 | ||||||||||
REVENUES | ||||||||||||
Natural gas | $ | 5,351,700 | $ | (2,643,700 | ) (c) | $ | 2,708,000 | |||||
Gain onmark-to-market derivatives | 2,800 | 20,100 | (e) | 22,900 | ||||||||
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Total revenues | 5,354,500 | (2,623,600 | ) | 2,730,900 | ||||||||
COSTS AND EXPENSES | ||||||||||||
Production | 3,541,700 | (837,700 | ) (c) | 2,704,000 | ||||||||
Depletion | 1,898,700 | (1,327,900 | ) (d) | 570,800 | ||||||||
Impairment | 212,400 | — | 212,400 | |||||||||
Accretion of asset retirement obligations | 169,700 | (95,700 | ) (d) | 74,000 | ||||||||
General and administrative | 132,000 | (42,800 | ) (c) | 89,200 | ||||||||
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Total costs and expenses | 5,954,500 | (2,304,100 | ) | 3,650,400 | ||||||||
Operating loss | (600,000 | ) | (319,500 | ) | (919,500 | ) | ||||||
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Net loss | $ | (600,000 | ) | $ | (319,500 | ) | $ | (919,500 | ) | |||
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Allocation of net loss: | ||||||||||||
Managing general partner | $ | 88,000 | $ | (455,400 | ) | $ | (367,400 | ) | ||||
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Limited partners | $ | (688,000 | ) | $ | 135,900 | $ | (552,100 | ) | ||||
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Net loss per limited partnership unit | $ | (92 | ) | $ | 18 | $ | (74 | ) | ||||
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See accompanying notes to unaudited pro forma condensed financial statements.
ATLAS RESOURCES SERIES28-2010 L.P.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
| Historical Year Ended December 31, 2015 | Company Appalachia Assets Pro Forma Adjustments | Pro Forma Year Ended December 31, 2015 | ||||||||||
REVENUES | ||||||||||||
Natural gas | $ | 6,964,000 | $ | (3,471,400 | ) (c) | $ | 3,492,600 | |||||
Gain onmark-to-market derivatives | 654,500 | (357,900 | ) (e) | 296,600 | ||||||||
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Total revenues | 7,618,500 | (3,829,300 | ) | 3,789,200 | ||||||||
COSTS AND EXPENSES | ||||||||||||
Production | 4,317,800 | (1,100,000 | ) (c) | 3,217,800 | ||||||||
Depletion | 2,361,600 | (1,629,300 | ) (d) | 732,300 | ||||||||
Impairment | 6,320,500 | — | 6,320,500 | |||||||||
Accretion of asset retirement obligations | 216,300 | (86,700 | ) (d) | 129,600 | ||||||||
General and administrative | 137,800 | (54,100 | ) (c) | 83,700 | ||||||||
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Total costs and expenses | 13,354,000 | (2,870,100 | ) | 10,483,900 | ||||||||
Operating loss | (5,735,500 | ) | (959,200 | ) | (6,694,700 | ) | ||||||
Loss on abandonment of well | (288,200 | ) | — | (288,200 | ) | |||||||
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Net loss | $ | (6,023,700 | ) | $ | (959,200 | ) | $ | (6,982,900 | ) | |||
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Allocation of net loss: | ||||||||||||
Managing general partner | $ | (1,945,000 | ) | $ | (636,500 | ) | $ | (2,581,500 | ) | |||
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Limited partners | $ | (4,078,700 | ) | $ | (322,700 | ) | $ | (4,401,400 | ) | |||
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Net loss per limited partnership unit | $ | (544 | ) | $ | (43 | ) | $ | (587 | ) | |||
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See accompanying notes to unaudited pro forma condensed financial statements.
ATLAS RESOURCES SERIES28-2010 L.P.
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
Adjustments to the Unaudited Pro Forma Condensed Balance Sheet
The following adjustments have been made to the accompanying unaudited pro forma condensed balance sheet as of June 30, 2017:
(a) Reflects the elimination of assets and liabilities related to the Company Appalachia Assets.
(b) Reflects the change in Partner’s Capital due to the Company Appalachia Assets pro forma adjustments.
Adjustments to the Unaudited Pro Forma Condensed Statements of Operations
The following adjustments have been made to the accompanying unaudited pro forma condensed statements of operations for the six months ended June 30, 2017 and the years ended December 31, 2016 and 2015:
(c) Represents the elimination of natural gas production revenues and expenses for the Company Appalachia Assets.
(d) Represents the elimination of depletion and accretion expenses for asset retirement obligations related to the Company Appalachia Assets.
(e) Reflects the elimination of the gain onmark-to-market activity allocated to the Company Appalachia Assets, which was based on the relative proportion of the natural gas volumes by the Company Appalachia Assets to the Company’s total natural gas volumes produced.
