Transactions with Atlas Resources, LLC, and its Affiliates

9 Months Ended

Sep. 30, 2011

TRANSACTIONS WITH ATLAS RESOURCES, LLC AND ITS AFFILIATES

TRANSACTIONS WITH ATLAS RESOURCES, LLC AND ITS AFFILIATES

NOTE 7 — TRANSACTIONS WITH ATLAS RESOURCES, LLC AND ITS AFFILIATES

The Partnership has entered into the following significant transactions with the MGP and its affiliates as provided under the 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. Administrative costs incurred for the three and nine months ended September 30, 2011 were, $46,000 and $137,400, respectively. Administrative costs incurred for the three and nine months ended September 30, 2010 were $48,800 and $145,800, respectively.

• Monthly well supervision fees which are included in production expenses in the Partnership's statements of operations are payable at $318 per well per month, for operating and maintaining the wells. Well supervision fees incurred for the three and nine months September 30, 2011 were $195,000 and $582,200, respectively. Well supervision fees incurred for the three and nine months ended September 30, 2010 were $206,900 and $617,900, respectively.

• Transportation fees which are included in production expenses in the Partnership's statements of operations are generally payable at 13% of the natural gas sales price. Transportation fees incurred for the three and nine months ended September 30, 2011 were $74,700 and $196,800, respectively. Transportation fees incurred for the three and nine months ended September 30, 2010 were $80,700 and $259,500, respectively.

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.

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 limited partners (July 2005). The MGP subordinated $57,000 of its net production revenue to the limited partners for the nine months ended September 30, 2010.