Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2016shares | |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
Entity Registrant Name | ATLAS RESOURCES SERIES 28-2010 L.P. |
Entity Central Index Key | 1,487,561 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 0 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 0 | $ 181,200 |
Accounts receivable trade -affiliate | 1,067,900 | 1,068,400 |
Current portion of derivative assets | 672,300 | 799,500 |
Total current assets | 1,740,200 | 2,049,100 |
Gas and oil properties, net | 26,205,900 | 26,622,200 |
Long-term asset retirement receivable-affiliate | 57,800 | 40,400 |
Total assets | 28,003,900 | 28,711,700 |
Current liabilities: | ||
Accrued liabilities | 230,000 | 181,600 |
Put premiums payable-affiliate | 114,700 | 162,700 |
Total current liabilities | 344,700 | 344,300 |
Asset retirement obligations | $ 3,835,400 | $ 3,793,000 |
Commitments and contingencies (Note 6) | ||
Partners’ capital: | ||
Managing general partner’s interest | $ 3,829,800 | $ 3,905,600 |
Limited partners’ interest (7,500 units) | 19,991,100 | 20,665,000 |
Accumulated other comprehensive income | 2,900 | 3,800 |
Total partners’ capital | 23,823,800 | 24,574,400 |
Total liabilities and partners’ capital | $ 28,003,900 | $ 28,711,700 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) | Mar. 31, 2016shares |
Statement Of Financial Position [Abstract] | |
Limited partners' units | 7,500 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUES | ||
Natural gas | $ 1,151,200 | $ 2,365,900 |
Gain on mark-to-market derivatives | 122,400 | 75,500 |
Total revenues | 1,273,600 | 2,441,400 |
COSTS AND EXPENSES | ||
Production | 968,000 | 1,076,200 |
Depletion | 416,300 | 597,100 |
Accretion of asset retirement obligations | 42,400 | 55,000 |
General and administrative | 33,600 | 34,200 |
Total costs and expenses | 1,460,300 | 1,762,500 |
Net (loss) income | (186,700) | 678,900 |
Allocation of net (loss) income: | ||
Managing general partner | (24,800) | 246,700 |
Limited partners | $ (161,900) | $ 432,200 |
Net (loss) income per limited partnership unit | $ (22) | $ 58 |
CONDENSED STATEMENTS OF COMPREH
CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net (loss) income | $ (186,700) | $ 678,900 |
Other comprehensive loss: | ||
Difference in estimated hedge receivable | 98,600 | |
Reclassification adjustment to net (loss) income of mark-to-market gains on cash flow hedges | (900) | (150,200) |
Total other comprehensive loss | (900) | (51,600) |
Comprehensive (loss) income | $ (187,600) | $ 627,300 |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN PARTNERS' CAPITAL - 3 months ended Mar. 31, 2016 - USD ($) | Total | Managing General Partner | Limited Partners | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2015 | $ 24,574,400 | $ 3,905,600 | $ 20,665,000 | $ 3,800 |
Participation in revenues, costs and expenses: | ||||
Net production revenues | 183,200 | 75,800 | 107,400 | |
Gain on mark-to-market derivatives | 122,400 | 122,400 | ||
Depletion | (416,300) | (72,100) | (344,200) | |
Accretion of asset retirement obligations | (42,400) | (15,900) | (26,500) | |
General and administrative | (33,600) | (12,600) | (21,000) | |
Net (loss) income | (186,700) | (24,800) | (161,900) | |
Other comprehensive loss | (900) | (900) | ||
Subordination | (51,000) | 51,000 | ||
Distributions to partners | (563,000) | (563,000) | ||
Ending balance at Mar. 31, 2016 | $ 23,823,800 | $ 3,829,800 | $ 19,991,100 | $ 2,900 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (186,700) | $ 678,900 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depletion | 416,300 | 597,100 |
Non-cash loss (gain) on derivative value | 78,300 | (127,100) |
Accretion of asset retirement obligations | 42,400 | 55,000 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable trade-affiliate | 500 | 307,300 |
Increase in asset retirement receivable-affiliate | (17,400) | (20,200) |
Increase (decrease) in accrued liabilities | 48,400 | (47,300) |
Net cash provided by operating activities | 381,800 | 1,443,700 |
Cash flows from investing activities: | ||
Proceeds from the sale of gas and oil properties | 0 | 150,000 |
Net cash provided by investing activities | 0 | 150,000 |
Cash flows from financing activities: | ||
Distributions to partners | (563,000) | (1,593,600) |
Net cash used in financing activities | (563,000) | (1,593,600) |
Net change in cash | (181,200) | 100 |
Cash beginning of period | 181,200 | 0 |
Cash at end of period | $ 0 | $ 100 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS Atlas Resources Series 28-2010 L.P. (the “Partnership”) is a Delaware limited partnership, formed on April 1, 2010 with Atlas Resources, LLC serving as its Managing General Partner and Operator (“Atlas Resources” or the “MGP”). Atlas Resources is an indirect subsidiary of Atlas Resource Partners, L.P. (“ARP”) (NYSE: ARP). Unless the context otherwise requires, references to “the Partnership,” “we,” “us” and “our”, refer to Atlas Resources Series 28-2010 L.P. Atlas Energy Group, LLC (“Atlas Energy Group”; OTCQX: ATLS) manages ARP’s operations and activities through its ownership of ARP’s general partner interest. The Partnership has drilled and currently operates wells located in Pennsylvania, Tennessee, Indiana and Colorado. The Partnership has no employees and relies on the MGP for management, which in turn, relies on its parent company, Atlas Energy Group, for administrative services. The Partnership’s operating cash flows are generated from its wells, which produce natural gas. Produced natural gas is then delivered to market through affiliated and/or third-party gas gathering systems. The Partnership intends to produce its wells until they are depleted or become uneconomical to produce, at which time they will be plugged and abandoned or sold. The Partnership does not expect to drill additional wells and expects no additional funds will be required for drilling. Liquidity and Capital Resources The Partnership is generally limited to the amount of funds generated by the cash flow from its operations to fund its obligations and make distributions, if any, to its partners. The natural gas, oil and natural gas liquids commodity price markets have suffered significant declines throughout 2015 and have continued to decline and remain low in 2016. The extreme ongoing volatility in the energy industry and commodity prices will likely continue to impact the Partnership’s outlook. The Partnership has experienced downward revisions of its natural gas and oil reserves volumes and values due to the significant declines in commodity prices. The MGP continues to implement various cost saving measures to reduce the Partnership’s operating and general and administrative costs, including renegotiating contracts with contractors, suppliers and service providers, reducing the number of staff and contractors and deferring and eliminating discretionary costs. The MGP will continue to be opportunistic and aggressive in managing the Partnership’s cost structure and, in turn, liquidity to meet its operating needs. To the extent commodity prices remain low or decline further, or the Partnership experiences other disruptions in the industry, the Partnership’s ability to fund its operations and make distributions may be further impacted, and could result in the MGP’s decision to liquidate the Partnership’s operations. If, however, the MGP were to decide to liquidate our operations, the liquidation valuation of the Partnership’s assets and liabilities would be determined by an independent expert. It is possible that based on such determination, we would not be able to make any liquidation distributions to our limited partners. A liquidation could result in the transfer of the post-liquidation assets and liabilities of the Partnership to the MGP and would occur without any further contributions from or distributions to the limited partners. Historically, there has been no need to borrow funds from the MGP to fund operations as the cash flow from the Partnership’s operations have been adequate to fund its obligations and distributions to its partners. However, the recent significant declines in commodity prices may make it uneconomical for the Partnership to produce its wells until they are depleted as the Partnership originally intended. To the extent commodity prices remain low or decline further, ARP experiences disruptions in the financial markets impacting its respective longer-term access to or cost of capital, or ARP experiences any of the other impacts to its liquidity discussed below, the MGP’s ability to continue the Partnership’s operations may be impacted. ARP’s revolving credit facility is currently in the process of its semi-annual redetermination. Based on projected market conditions, continued declines in commodity prices and recent conversations with its administrative agent, ARP expects that its borrowing base will be redetermined to a level below its outstanding borrowings as of March 31, 2016. If ARP’s borrowing base is redetermined below its current outstanding borrowings and ARP is unable to repay the deficiency or deposit additional collateral to eliminate such deficiency, or if ARP experiences any other event of default on its debt obligations, or if other debt agreements cross-default, and the lenders accelerate the maturity of any other outstanding debts, the MGP, may not have sufficient liquidity to continue the Partnership’s operations, and as a result, there would be substantial doubt regarding the Partnership’s ability to continue as a going concern. The condensed financial statements, which are unaudited, except for the balance sheet at December 31, 2015, which is derived from audited financial statements, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto presented in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the three months ended March 31, 2016 may not necessarily be indicative of the results of operations for the year ended December 31, 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the Partnership’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities that exist at the date of the Partnership’s financial statements, as well as the reported amounts of revenues and costs and expenses during the reporting periods. The Partnership’s financial statements are based on a number of significant estimates, including the revenue and expense accruals, depletion, impairments, fair value of derivative instruments and the probability of forecasted transactions. Actual results could differ from those estimates. The natural gas industry principally conducts its business by processing actual transactions as many as 60 days after the month of delivery. Consequently, the most recent two months’ financial results were recorded using estimated volumes and contract market prices. Differences between estimated and actual amounts are recorded in the following months’ financial results. Management believes that the operating results presented for the three months ended March 31, 2016 and 2015 represent actual results in all material respects . Gas and The following is a summary of gas and oil properties at the dates indicated: March 31, December 31, Proved properties: Leasehold interests $ 5,301,300 $ 5,301,300 Wells and related equipment 159,436,400 159,436,400 Total natural gas and oil properties 164,737,700 164,737,700 Accumulated depletion and impairment (138,531,800 ) (138,115,500 ) Gas and oil properties, net $ 26,205,900 $ 26,622,200 As a result of the recent significant declines in commodity prices and associated recorded impairment charges, remaining net book value of gas and oil properties on our balance sheet at March 31, 2016 and December 31, 2015 was primarily related to the estimated salvage value of such properties. The estimated salvage values were based on the MGP’s historical experience in determining such values. Recently Issued Accounting Standards In August 2014, the FASB updated the accounting guidance related to the evaluation of whether there is substantial doubt about an entity’s ability to continue as a going concern. The updated accounting guidance requires an entity’s management to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year from the date the financial statements are issued and provide footnote disclosures, if necessary. The updated guidance is effective as of January 1, 2017 and the Partnership is currently in the process of determining the impact of providing the enhanced disclosures, as applicable, within its financial statements. In May 2014, the FASB updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue, and by reducing the number of standards to which an entity has to refer. In July 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The updated accounting guidance provides companies with alternative methods of adoption. The Partnership is currently in the process of determining the impact that the updated accounting guidance will have on its financial statements and its method of adoption. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | NOTE 3 - DERIVATIVE INSTRUMENTS The MGP, on behalf of the Partnership, uses a number of different derivative instruments, principally put contracts, in connection with the partnership’s commodity price risk management activities. The Partnership does not apply hedge accounting to any of its derivative instruments. As a result, gains and losses associated with derivative instruments are recognized in earnings. The Partnership enters into commodity put contracts to achieve more predictable cash flows by hedging the Partnership’s exposure to changes in commodity prices. At any point in time, such contracts may include regulated NYMEX futures and 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 physical delivery of the commodity. These contracts have been recorded at their fair values. The Partnership reflected net derivative assets on its balance sheets of $672,300 and $799,500 at March 31, 2016 and December 31, 2015, respectively. The following table summarizes the gains or losses recognized within the statements of operations for derivative instruments previously designated as cash flow hedges for the periods indicated: Three Months Ended March 31, 2016 2015 Gains reclassified from accumulated other comprehensive income into natural gas and oil revenues $ (900 ) $ 150,200 Gains subsequent to hedge accounting recognized in gain on mark-to-market derivatives $ 122,400 $ 75,500 At March 31, 2016, the Partnership had the following commodity derivatives: Natural Gas Fixed Price Swaps - Limited Partners Production Volumes Average Fair Value (2 ) (MMBtu) (1) (per MMBtu) (1) 2016 172,300 $ 4.46 $ 384,800 Natural Gas Put Options - Limited Partners Production Volumes Average Fair Value (2) (MMBtu) (1) (per MMBtu) (1) 2016 149,400 $ 4.15 $ 287,500 Limited Partner’s Commodity Derivatives, net $ 672,300 (1) (2) At March 31, 2016, the MGP had a secured hedge facility agreement with a syndicate of banks under which the Partnership has the ability to enter into derivative contracts to manage its exposure to commodity price movements. Under the MGP’s revolving credit facility, the Partnership is required to utilize this secured hedge facility for future commodity risk management activity. The Partnership’s obligations under the facility are secured by mortgages on its gas and oil properties and first priority security interests in substantially all of its assets and are guaranteed by the MGP. The MGP administers the commodity price risk management activity for the Partnership under the secured hedge facility. The secured hedge facility agreement contains covenants that limit the Partnership’s ability to incur indebtedness, grant liens, make loans or investments, make distributions if a default under the secured hedge facility agreement exists or would result from the distribution, merge into or consolidate with other persons, enter into commodity or interest rate swap agreements that do not conform to specified terms or that exceed specified amounts, or engage in certain asset dispositions, including a sale of all or substantially all of its assets. As of March 31, 2016, only the Partnership’s natural gas swaps are included in the secured hedge facility. As the underlying prices and terms in the Partnership’s derivative contracts were consistent with the indices used to sell its natural gas and oil, there were no gains or losses recognized during the three months ended March 31, 2016 and 2015 for hedge ineffectiveness. Accumulated Other Comprehensive Income As a result of the put options, swaps and the unrealized gains recognized in income in prior periods due to natural gas and oil property impairments, the Partnership recorded a net deferred gain on its balance sheet in accumulated other comprehensive income of $2,900 as of March 31, 2016. Included in accumulated other comprehensive income are unrealized gains of $184,600, net of the MGP interest, that were recognized in income as a result of gas and oil property impairments during prior periods. During the three months ended March 31, 2016, $18,700 of net losses were recorded by the Partnership and allocated only to the limited partners. Of the remaining $2,900 of net unrealized gain in accumulated other comprehensive income, the Partnership will reclassify $2,900 of net gains to the Partnership’s statements of operations over the next twelve month period. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 4 - FAIR VALUE OF FINANCIAL INSTRUMENTS The Partnership uses a market approach fair value methodology to value the assets and liabilities for its outstanding derivative contracts Information for assets measured at fair value at March 31, 2016 and December 31, 2015 was as follows: Level 1 Level 2 Level 3 Total As of March 31, 2016 Derivative assets, gross Commodity swaps $ - $ 384,800 $ - $ 384,800 Commodity puts - 287,500 - 287,500 Total derivative assets, gross $ - $ 672,300 $ - $ 672,300 Level 1 Level 2 Level 3 Total As of December 31, 2015 Derivative assets, gross Commodity swaps $ - $ 447,200 $ - $ 447,200 Commodity puts - 352,300 - 352,300 Total derivative assets, gross $ - $ 799,500 $ - $ 799,500 |
Certain Relationships and Relat
Certain Relationships and Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | NOTE 5 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS The Partnership has entered into the following significant transactions with the 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 operations, are payable at $75 per well per month. Monthly well supervision fees, which are included in production expense in the Partnership’s statements of operations, are payable at $975 per well per month for Marcellus wells, $1,500 per well per month for New Albany wells, and for Colorado wells a fee of $400 is charged per well per month for operating and maintaining the wells. The following table provides information with respect to these costs and the periods incurred. Three Months Ended 2016 2015 Administrative fees $ 16,800 $ 18,400 Supervision fees 182,300 214,400 Transportation fees 123,400 231,800 Direct costs 679,100 645,700 Total $ 1,001,600 $ 1,110,300 The MGP and its affiliates perform all administrative and management functions for the Partnership, including billing revenues and paying expenses. Accounts receivable trade-affiliate on the Partnership’s balance sheets includes the net production revenues due from the MGP. 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 the benefit of the limited partners for an amount equal to at least 12% of their net subscriptions in the first 12-month subordination period, 10% of their net subscriptions in each of the next three 12-month subordination periods, and 8% of their net subscriptions in the fifth 12-month subordination period determined on a cumulative basis, in each of the first five years of Partnership operations, commencing with the first distribution to the limited partners (March 2011) and 60 months from that date. The MGP subordinated $51,000 and $287,100 of its net production revenues to the limited partners for the three months ended March 31, 2016 and 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 6 - COMMITMENTS AND CONTINGENCIES General Commitments Subject to certain conditions, investor partners may present their interests beginning in 2015 for purchase by the MGP. The purchase price is calculated by the MGP in accordance with the terms of the partnership agreement. The MGP is not obligated to purchase more than 5% of the total outstanding units in any calendar year. In the event that the MGP is unable to obtain the necessary funds, it may suspend its purchase obligation. Beginning one year after each of the Partnership’s wells has been placed into production, the MGP, as operator, may retain $200 per month per well to cover estimated future plugging and abandonment costs. As of March 31, 2016, the MGP has withheld $57,800 of net production revenue for future plugging and abandonment costs. Legal Proceedings The Partnership is a party to various routine legal proceedings arising out of the ordinary course of its business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on the Partnership’s financial condition or results of operations. Affiliates of the MGP and their subsidiaries are party to various routine legal proceedings arising in the ordinary course of their respective businesses. The MGP’s 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. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources The Partnership is generally limited to the amount of funds generated by the cash flow from its operations to fund its obligations and make distributions, if any, to its partners. The natural gas, oil and natural gas liquids commodity price markets have suffered significant declines throughout 2015 and have continued to decline and remain low in 2016. The extreme ongoing volatility in the energy industry and commodity prices will likely continue to impact the Partnership’s outlook. The Partnership has experienced downward revisions of its natural gas and oil reserves volumes and values due to the significant declines in commodity prices. The MGP continues to implement various cost saving measures to reduce the Partnership’s operating and general and administrative costs, including renegotiating contracts with contractors, suppliers and service providers, reducing the number of staff and contractors and deferring and eliminating discretionary costs. The MGP will continue to be opportunistic and aggressive in managing the Partnership’s cost structure and, in turn, liquidity to meet its operating needs. To the extent commodity prices remain low or decline further, or the Partnership experiences other disruptions in the industry, the Partnership’s ability to fund its operations and make distributions may be further impacted, and could result in the MGP’s decision to liquidate the Partnership’s operations. If, however, the MGP were to decide to liquidate our operations, the liquidation valuation of the Partnership’s assets and liabilities would be determined by an independent expert. It is possible that based on such determination, we would not be able to make any liquidation distributions to our limited partners. A liquidation could result in the transfer of the post-liquidation assets and liabilities of the Partnership to the MGP and would occur without any further contributions from or distributions to the limited partners. Historically, there has been no need to borrow funds from the MGP to fund operations as the cash flow from the Partnership’s operations have been adequate to fund its obligations and distributions to its partners. However, the recent significant declines in commodity prices may make it uneconomical for the Partnership to produce its wells until they are depleted as the Partnership originally intended. To the extent commodity prices remain low or decline further, ARP experiences disruptions in the financial markets impacting its respective longer-term access to or cost of capital, or ARP experiences any of the other impacts to its liquidity discussed below, the MGP’s ability to continue the Partnership’s operations may be impacted. ARP’s revolving credit facility is currently in the process of its semi-annual redetermination. Based on projected market conditions, continued declines in commodity prices and recent conversations with its administrative agent, ARP expects that its borrowing base will be redetermined to a level below its outstanding borrowings as of March 31, 2016. If ARP’s borrowing base is redetermined below its current outstanding borrowings and ARP is unable to repay the deficiency or deposit additional collateral to eliminate such deficiency, or if ARP experiences any other event of default on its debt obligations, or if other debt agreements cross-default, and the lenders accelerate the maturity of any other outstanding debts, the MGP, may not have sufficient liquidity to continue the Partnership’s operations, and as a result, there would be substantial doubt regarding the Partnership’s ability to continue as a going concern. The condensed financial statements, which are unaudited, except for the balance sheet at December 31, 2015, which is derived from audited financial statements, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto presented in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the three months ended March 31, 2016 may not necessarily be indicative of the results of operations for the year ended December 31, 2016. |
Use of Estimates | Use of Estimates The preparation of the Partnership’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities that exist at the date of the Partnership’s financial statements, as well as the reported amounts of revenues and costs and expenses during the reporting periods. The Partnership’s financial statements are based on a number of significant estimates, including the revenue and expense accruals, depletion, impairments, fair value of derivative instruments and the probability of forecasted transactions. Actual results could differ from those estimates. The natural gas industry principally conducts its business by processing actual transactions as many as 60 days after the month of delivery. Consequently, the most recent two months’ financial results were recorded using estimated volumes and contract market prices. Differences between estimated and actual amounts are recorded in the following months’ financial results. Management believes that the operating results presented for the three months ended March 31, 2016 and 2015 represent actual results in all material respects . |
Gas and Oil Properties | Gas and The following is a summary of gas and oil properties at the dates indicated: March 31, December 31, Proved properties: Leasehold interests $ 5,301,300 $ 5,301,300 Wells and related equipment 159,436,400 159,436,400 Total natural gas and oil properties 164,737,700 164,737,700 Accumulated depletion and impairment (138,531,800 ) (138,115,500 ) Gas and oil properties, net $ 26,205,900 $ 26,622,200 As a result of the recent significant declines in commodity prices and associated recorded impairment charges, remaining net book value of gas and oil properties on our balance sheet at March 31, 2016 and December 31, 2015 was primarily related to the estimated salvage value of such properties. The estimated salvage values were based on the MGP’s historical experience in determining such values. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2014, the FASB updated the accounting guidance related to the evaluation of whether there is substantial doubt about an entity’s ability to continue as a going concern. The updated accounting guidance requires an entity’s management to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year from the date the financial statements are issued and provide footnote disclosures, if necessary. The updated guidance is effective as of January 1, 2017 and the Partnership is currently in the process of determining the impact of providing the enhanced disclosures, as applicable, within its financial statements. In May 2014, the FASB updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue, and by reducing the number of standards to which an entity has to refer. In July 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The updated accounting guidance provides companies with alternative methods of adoption. The Partnership is currently in the process of determining the impact that the updated accounting guidance will have on its financial statements and its method of adoption. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Gas and Oil Properties | The following is a summary of gas and oil properties at the dates indicated: March 31, December 31, Proved properties: Leasehold interests $ 5,301,300 $ 5,301,300 Wells and related equipment 159,436,400 159,436,400 Total natural gas and oil properties 164,737,700 164,737,700 Accumulated depletion and impairment (138,531,800 ) (138,115,500 ) Gas and oil properties, net $ 26,205,900 $ 26,622,200 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Summary of Gains or Losses Recognized Within Statements of Operations for Derivative Instruments Previously Designated as Cash Flow Hedges | The following table summarizes the gains or losses recognized within the statements of operations for derivative instruments previously designated as cash flow hedges for the periods indicated: Three Months Ended March 31, 2016 2015 Gains reclassified from accumulated other comprehensive income into natural gas and oil revenues $ (900 ) $ 150,200 Gains subsequent to hedge accounting recognized in gain on mark-to-market derivatives $ 122,400 $ 75,500 |
Commodity Derivatives | At March 31, 2016, the Partnership had the following commodity derivatives: Natural Gas Fixed Price Swaps - Limited Partners Production Volumes Average Fair Value (2 ) (MMBtu) (1) (per MMBtu) (1) 2016 172,300 $ 4.46 $ 384,800 Natural Gas Put Options - Limited Partners Production Volumes Average Fair Value (2) (MMBtu) (1) (per MMBtu) (1) 2016 149,400 $ 4.15 $ 287,500 Limited Partner’s Commodity Derivatives, net $ 672,300 (1) (2) |
Fair Value of Financial Instr17
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | Information for assets measured at fair value at March 31, 2016 and December 31, 2015 was as follows: Level 1 Level 2 Level 3 Total As of March 31, 2016 Derivative assets, gross Commodity swaps $ - $ 384,800 $ - $ 384,800 Commodity puts - 287,500 - 287,500 Total derivative assets, gross $ - $ 672,300 $ - $ 672,300 Level 1 Level 2 Level 3 Total As of December 31, 2015 Derivative assets, gross Commodity swaps $ - $ 447,200 $ - $ 447,200 Commodity puts - 352,300 - 352,300 Total derivative assets, gross $ - $ 799,500 $ - $ 799,500 |
Certain Relationships and Rel18
Certain Relationships and Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Party Transactions | The following table provides information with respect to these costs and the periods incurred. Three Months Ended 2016 2015 Administrative fees $ 16,800 $ 18,400 Supervision fees 182,300 214,400 Transportation fees 123,400 231,800 Direct costs 679,100 645,700 Total $ 1,001,600 $ 1,110,300 |
Description of Business (Detail
Description of Business (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Atlas Resources Series 28-2010 L.P. | Apr. 1, 2010 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Summary of Gas and Oil Properties) (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Line Items] | ||
Total natural gas and oil properties | $ 164,737,700 | $ 164,737,700 |
Accumulated depletion and impairment | (138,531,800) | (138,115,500) |
Gas and oil properties, net | 26,205,900 | 26,622,200 |
Leasehold interests | ||
Property Plant And Equipment [Line Items] | ||
Total natural gas and oil properties | 5,301,300 | 5,301,300 |
Wells and related equipment | ||
Property Plant And Equipment [Line Items] | ||
Total natural gas and oil properties | $ 159,436,400 | $ 159,436,400 |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Net derivative assets | $ 672,300 | $ 799,500 | |
Gains (Losses) on Fair Value Hedge Ineffectiveness, Net | 0 | $ 0 | |
Accumulated other comprehensive income | 2,900 | $ 3,800 | |
Other Comprehensive Income (Loss) | |||
Derivative [Line Items] | |||
Unrealized gains (losses) due to natural gas and oil property impairments | 184,600 | ||
Cash Flow Hedge Gains (Loss) to be Reclassified within Twelve Months | 2,900 | ||
Allocation To Limited Partners | Other Comprehensive Income (Loss) | |||
Derivative [Line Items] | |||
Net Derivative Gains (Losses) Limited Partner | $ (18,700) |
Derivative Instruments (Summary
Derivative Instruments (Summary of Gains or Losses Recognized Within Statements of Operations for Derivative Instruments Previously Designated as Cash Flow Hedges) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Gains reclassified from accumulated other comprehensive income into natural gas and oil revenues | $ (900) | $ 150,200 |
Gains subsequent to hedge accounting recognized in gain on mark-to-market derivatives | $ 122,400 | $ 75,500 |
Derivative Instruments (Commodi
Derivative Instruments (Commodity Derivatives) (Details) | 3 Months Ended | ||
Mar. 31, 2016USD ($)MMBTU$ / MMBTU | Dec. 31, 2015USD ($) | ||
Derivative [Line Items] | |||
Fair Value Asset | $ 672,300 | $ 799,500 | |
Limited Partner's Commodity Derivatives, net | |||
Derivative [Line Items] | |||
Fair Value Asset | [1] | $ 672,300 | |
Designated as Hedging Instrument | Natural Gas Fixed Price Swaps Production Period December 31, 2016 | |||
Derivative [Line Items] | |||
Volumes | MMBTU | [2] | 172,300 | |
Average Fixed Price (per MMBtu) | $ / MMBTU | [2] | 4.46 | |
Fair Value Asset | [1] | $ 384,800 | |
Designated as Hedging Instrument | Natural Gas Put Options Production Period Ending December 31, 2016 | |||
Derivative [Line Items] | |||
Volumes | MMBTU | [2] | 149,400 | |
Average Fixed Price (per MMBtu) | $ / MMBTU | [2] | 4.15 | |
Fair Value Asset | [1] | $ 287,500 | |
[1] | Fair value based on forward NYMEX natural gas prices, as applicable. | ||
[2] | “MMBtu” represents million British Thermal Units. |
Fair Value of Financial Instr24
Fair Value of Financial Instruments (Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value Asset | $ 672,300 | $ 799,500 |
Commodity Swaps | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value Asset | 384,800 | 447,200 |
Commodity Puts | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value Asset | 287,500 | 352,300 |
Fair Value, Inputs, Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value Asset | 672,300 | 799,500 |
Fair Value, Inputs, Level 2 | Commodity Swaps | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value Asset | 384,800 | 447,200 |
Fair Value, Inputs, Level 2 | Commodity Puts | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value Asset | $ 287,500 | $ 352,300 |
Certain Relationships and Rel25
Certain Relationships and Related Party Transactions (Narrative) (Details) | 3 Months Ended | |
Mar. 31, 2016USD ($)$ / mo | Mar. 31, 2015USD ($) | |
Related Party Transaction [Line Items] | ||
Managing General Partner Maximum Subordination Percentage Of Share Of Net Production Revenues | 50.00% | |
MGP | ||
Related Party Transaction [Line Items] | ||
Subordination | $ | $ 51,000 | $ 287,100 |
MGP | First 12 Month Subordination Period | ||
Related Party Transaction [Line Items] | ||
Subordination Target Return Rate For Limited Partner Subscriptions | 12.00% | |
MGP | Next Three 12 Month Subordination Periods | ||
Related Party Transaction [Line Items] | ||
Subordination Target Return Rate For Limited Partner Subscriptions | 10.00% | |
MGP | Fifth 12 Month Subordination Period | ||
Related Party Transaction [Line Items] | ||
Subordination Target Return Rate For Limited Partner Subscriptions | 8.00% | |
MGP and Affiliates | Administrative | ||
Related Party Transaction [Line Items] | ||
Monthly Administrative Costs Per Well | 75 | |
MGP and Affiliates | Production | ||
Related Party Transaction [Line Items] | ||
Transportation Fee Rate As Percentage Of Natural Gas Sales Price | 16.00% | |
MGP and Affiliates | Production | Marcellus wells | ||
Related Party Transaction [Line Items] | ||
Monthly Supervision Fees Per Well | 975 | |
MGP and Affiliates | Production | New Albany Wells | ||
Related Party Transaction [Line Items] | ||
Monthly Supervision Fees Per Well | 1,500 | |
MGP and Affiliates | Production | Colorado Wells | ||
Related Party Transaction [Line Items] | ||
Monthly Supervision Fees Per Well | 400 |
Certain Relationships and Rel26
Certain Relationships and Related Party Transactions (Certain Relationships and Related Party Transactions) (Details) - MGP and Affiliates - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 1,001,600 | $ 1,110,300 |
Administrative fees | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | 16,800 | 18,400 |
Supervision fees | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | 182,300 | 214,400 |
Transportation fees | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | 123,400 | 231,800 |
Direct costs | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 679,100 | $ 645,700 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / mo | |
Commitments And Contingencies Disclosure [Abstract] | |
Investor Partners Ownership Interest Presented For Purchase By The MGP, Maximum Percentage | 5.00% |
Operator Fee Per Well To Cover Estimated Future Plugging And Abandonment Costs, Monthly | $ / mo | 200 |
Net production revenue for future plugging and abandonment costs | $ | $ 57,800 |