U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB (Mark One) [ X ] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended Sept 30, 1999 [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 333-62167 Atlas-Energy for the Nineties-Public #7 Ltd. (Name of small business issuer in its charter) Pennsylvania 25-1814688 (State or other jurisdiction of ( I.R.S. Employer identification No.) incorporated or organization) 311 Rouser Road, Moon Township, Pennsylvania 15108 (Address of principal executive offices) (Zip Code) Issuer's telephone (412) 262-2830 (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Transitional Small Business Disclosure Format (check one): Yes X No - ----------------------------------------------------------------------------- PART I Item 1. Financial Statements The unaudited Financial Statements of Atlas-Energy for the Nineties-Public #7 Ltd. (the "Partnership") for the period January 1, 1999 to Sept 30, 1999 Item 2. Description of Business The Partnership has placed into production 57.5 net wells to the Clinton/Medina formation in Mercer and Lawrence counties, Pennsylvania and Stark and Trumbull counties in Ohio. As of Sept. 30, 1999, all 57.5 net wells are in production. The first quarterly distribution was on July 10, 1999 for natural gas production during January, February, March and April, 1999. Natural gas sales revenue for the three months was $514,349 which includes landowner royalties. Expenses for this period include $75.00 per month per well for administrative costs and $275.00 per month per well for pumpers fees. For the next twelve months management believes that the Partnership has adequate capital. No other wells will be drilled and, therefore, no additional funds will be required. Although management does not anticipate that the Partnership will have to do so, any additional funds which may be required will be obtained from production revenues from Partnership wells or from borrowings by the Partnership from Atlas or its affiliates, although Atlas is not contractually committed to make such a loan. No borrowings will be obtained from third parties. PART II Item 1. Legal Proceeding None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Securities Holders None Item 5. Other Matters None Item 6. Reports on Form 8-K The registrant filed no reports on Form 8-K during the last quarter of the period covered by this report. - ----------------------------------------------------------------------------- UNAUDITED FINANCIAL STATEMENTS ATLAS-ENERGY FOR THE NINETIES--PUBLIC #7 LTD. A PENNSYLVANIA LIMITED PARTNERSHIP BALANCE SHEET As of Sept 30, 1999 and December 31, 1998 BALANCE SHEET ASSETS 09/30/99 12/31/98 Increase (unaudited) (decrease) Cash $ 321,590 $ - $321,590 Accounts receivable 429,680 29,592 400,088 ------- ------- --------- TOTAL CURRENT ASSETS 751,270 29,592 721,678 Oil and gas drilling contracts/leases ,net of accum. depl. & amort. 13,116,968 14,042,536 (925,568) Organizational/syndication costs (note 3) -0- 1,798,253 (1,798,253) ---------- ---------- ---------- TOTAL ASSETS $13,868,238 $15,870,381$(2,002,143) ========== ========== ========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 22,706 $ - $ 22,706 Partners' capital 13,845,532 15,870,381 (2,024,849) ---------- ---------- ---------- TOTAL LIABILITIES AND PARTNERS CAPITAL $13,868,238 $15,870,381$(2,002,143) ========== ========== ========== The notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------- ATLAS-ENERGY FOR THE NINETIES--PUBLIC #7 LTD. A PENNSYLVANIA LIMITED PARTNERSHIP STATEMENT OF INCOME (Unaudited) For the nine months ended Sept 30, 1999 and 1998 Nine Months Ended Third Quarter Ended Sept 30, Sept 30, 1999 1998 1999 1998 ------------------ ------------------- REVENUE Natural gas sales $1,124,956 $- $514,349 $- Interest Income 4,664 - 4,228 - --------- ----- ------- ---- Total Revenue 1,129,620 - 518,577 - EXPENSES Well operating expense 181,258 - 84,671 - Depletion and depreciation of oil and gas wells and leases 855,232 - 336,614 - General and administ. fees 25,902 - 11,850 - Professional fees 5,491 - (2,700) - Amortiza. of organ/synd costs -0- - - - Other 893 - (67) - ---------- ------- -------- ------- Total Expenses 1,068,776 - 430,368 - ---------- ------- --------- ------- Earnings before cumulative effect of chg. in acctg. principle 60,844 - 88,209 - Cumulative effect of chg. in acctg. principle(Note3) (1,798,253) -0- -0- -0- ----------- ------ -------- ------- Net Earnings (Loss) $(1,737,409) $ - $88,209 $ - ============ ========= ======== ====== The notes to Financial Statements are an integral part of this statement. - ----------------------------------------------------------------------------- ATLAS-ENERGY FOR THE NINETIES--PUBLIC #7 LTD. A PENNSYLVANIA LIMITED PARTNERSHIP STATEMENT OF CASH FLOWS (UNAUDITED) For the nine months ended Sept 30, 1999 and 1998 Nine Months Ended Sept 30, 1999 1998 -------------------- Increase (Decrease) in Cash Cash flows from operating activities Net Earnings ($ 1,737,409) $- Adjustments to reconcile net earnings to net cash provided by operating activities: Cumulative effect of change in acctg. principle 1,798,253 -0- Depletion and depreciation 855,232 0 (Increase) accounts receivable (400,088) 0 Increase in accounts payable 22,706 0 ----------- ---------- Cash provided by operating activities 538,694 0 Cash flows used in financing activities: Distributions to Partners (217,104) 0 ---------- --------- Net Increase in Cash 321,590 0 Cash at beginning of period 0 0 ---------- --------- Cash at end of period $ 321,590 $ 0 ========== ========= Noncash Financing Activity: - -------------------------- Adjustments to partners' capital for final drilling costs (70,336) 0 ========== ======== The notes to Financial Statements are an integral part of this statement. - ----------------------------------------------------------------------------- ATLAS-ENERGY FOR THE NINETIES--PUBLIC #7 LTD. A PENNSYLVANIA LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL ACCOUNTS (Unaudited) For the nine months ended Sept 30, 1999 MANAGING GENERAL OTHER PARTNER PARTNERS TOTAL BALANCE AT JANUARY 1, 1999 $3,852,439 $12,017,942 $15,870,381 Adjustments to partners' capital for final drilling costs: Leaseholds (9,000) 0 (9,000) Tangible costs (31,289) (30,047) (61,336) Participation in revenue and expenses: Net production revenues 292,546 651,152 943,698 Interest 1,446 3,218 4,664 Depletion and depreciation (115,884) (739,348) (855,232) Other costs ( 10,009) ( 22,277) (32,286) ----------- ---------- -------- Earnings before cumulative effect of change in acctg. principle 168,099 (107,255) 60,844 Cumulative effect of chg. in acctg. principle (1,798,253) -0- (1,798,253) Distributions (34,877) (182,227) (217,104) ----------- ----------- ---------- BALANCE AT Sept 30, 1999 $ 2,147,119 $11,698,414 $13,845,532 =========== ========== ============= The notes to Financial Statements are an integral part of this statement. - ----------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) ATLAS-ENERGY FOR THE NINETIES--PUBLIC #7 LTD. A PENNSYLVANIA LIMITED PARTNERSHIP Sept 30, 1999 1. INTERIM FINANCIAL STATEMENTS The financial statements as of Sept 30, 1999 and for the nine months then ended have been prepared by the management of the Partnership without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Partnership believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited December 31, 1998 financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for presentation have been included. 2. SIGNIFICANT ACCOUNTING POLICIES The Partnership uses the successful efforts method of accounting for oil and gas activities. Costs to acquire mineral interests in oil and gas properties and drill and equip wells are capitalized. Oil and gas properties are periodically assessed and when unamortized costs exceed expected future net cash flows, a loss is recognized by a charge to income. Capitalized costs of oil and gas wells and leases are depreciated, depleted and amortized by the unit of production method. 3. REPORTING ON THE COSTS OF START-UP ACTIVITIES In 1998, the AICPA issued Statement of Position 98-5 ("SOP 98-5"), Reporting on the Costs of Start-Up Activities. This statement requires costs of start-up activities and organization costs, as defined, to be expensed as incurred. The partnership was required to adopt the provisions of SOP 98-5 effective January 1, 1999 and as a result has written-off the unamortized balance of Organizational/Syndication costs as of that date. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ATLAS-ENERGY FOR THE NINETIES-PUBLIC #7 LTD. Management's discussion and analysis should be read in conjunction with the financial statements and notes thereto. Results of Operations - --------------------- Nine Months Ended Sept 30, 1999 - ------------------------------------------- The Partnership commenced production in January, 1999. Natural gas sales revenue for the nine months ended Sept 30,1999 amounted to $1,124,956 based on gas production of 565,283 Mcf. The average sales price for gas production during this period was $2.28/Mcf. Quarter Ended Sept 30, 1999 Natural gas sales revenue for the three months ended Sept 30, 1999 amounted to $514,349. Gas production was 240,439 Mcf; and the average sales price was $2.45/Mcf. Financial Condition - ------------------- Liquidity - --------- Cash provided by operating activities during the nine months ended Sept 30, 1999 results primarily from sales of natural gas. The partnership's working capital increased from $29,592 at December 31, 1998 to $728,564 at Sept 30, 1999. The increase is attributable to the commencement of natural gas production for new wells turned on-line during the current quarter, which resulted in higher receivables in connection with sales of gas produced. Capital Resources - ----------------- There were no new material commitments for capital expenditures during the period and the Partnership does not expect any in the foreseeable future. By (Signature and Title): /s/ James R. O'Mara James R. O'Mara President, Chief Executive Officer and a Director Date: Sept 30, 1999 In Accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ James R. O'Mara James R. O'Mara President, Chief Executive Officer and a Director Date: Sept 30, 1999 By (Signature and Title): /S/ Tony C. Banks Tony C. Banks Vice President and Chief Financial Officer Date: Sept 30, 1999 - ------------------------------------------------------------------------