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United States
Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 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 000-51271
 ATLAS AMERICA SERIES 25-2004 (B) L.P.
  Delaware
    
    34-1980376(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)Westpointe Corporate Center One1550 Coraopolis Heights Rd. 2nd FloorMoon Township, PA
    
    15108(Address of principal executive offices)
    
    (zip code)
 (412) 262-2830
 Yes þ No o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 Yes o No þ
 Yes o No þ




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##### 



ATLAS AMERICA SERIES 25-2004 (B) L.P.
(A Delaware Limited Partnership)
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
 PAGEPART I. FINANCIAL INFORMATIONItem 1: Financial StatementsBalance Sheets as of March 31, 2011 and December 31, 2010
    
    
    3Statements of Operations for the Three Months ended March 31, 2011 and 2010
    
    
    4Statement of Changes in Partners Capital for the Three Months ended March 31, 2011
    
    
    5Statements of Cash Flows for the Three Months ended March 31, 2011 and 2010
    
    
    6Notes to Financial Statements
    
    
    7-14Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15-18Item 4: Controls and Procedures
    
    
    18PART II. OTHER INFORMATIONItem 1: Legal Proceedings
    
    
    19Item 6: Exhibits
    
    
    19SIGNATURES
    
    
    20CERTIFICATIONSExhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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ATLAS AMERICA SERIES 25-2004(B) L.P.
 
 
 
 BALANCE SHEETS
 March 31,
    
    
    December 31,2011
    
    
    2010(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    47,000
    
    
    $
    69,400Accounts receivable-affiliate
    
    
    480,100
    
    
    
    401,800Short-term hedge receivable due from affiliate
    
    
    
    
    
    
    323,400Total current assets
    
    
    527,100
    
    
    
    794,600Oil and gas properties, net
    
    
    6,180,700
    
    
    
    6,281,700Long-term hedge receivable due from affiliate
    
    
    
    
    
    
    316,100Long-term receivable due from affiliate
    
    
    229,500
    
    
    
    $
    6,937,300
    
    
    $
    7,392,400LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accrued liabilities
    
    $
    13,000
    
    
    $
    11,900Short-term hedge liability due to affiliate
    
    
    
    
    
    
    3,400Total current liabilities
    
    
    13,000
    
    
    
    15,300Asset retirement obligation
    
    
    2,283,400
    
    
    
    2,249,700Long-term hedge liability due to affiliate
    
    
    
    
    
    
    56,200Partners capital:Managing general partner
    
    
    1,978,400
    
    
    
    2,253,200Limited partners (1,265.38 units)
    
    
    2,445,500
    
    
    
    2,716,700Accumulated other comprehensive income
    
    
    217,000
    
    
    
    101,300Total partners capital
    
    
    4,640,900
    
    
    
    5,071,200$
    6,937,300
    
    
    $
    7,392,400
   3




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ATLAS AMERICA SERIES 25-2004(B) L.P.
 
 STATEMENTS OF OPERATIONS
 (Unaudited)
 Three Months EndedMarch 31,2011
    
    
    2010REVENUESNatural gas and oil
    
    $
    224,100
    
    
    $
    567,800Total revenues
    
    
    224,100
    
    
    
    567,800COSTS AND EXPENSESProduction
    
    
    212,300
    
    
    
    241,500Depletion
    
    
    101,000
    
    
    
    259,000Accretion of asset retirement obligation
    
    
    33,700
    
    
    
    25,800General and administrative
    
    
    46,800
    
    
    
    43,000Total costs and expenses
    
    
    393,800
    
    
    
    569,300Net loss
    
    $
    (169,700
    )
    
    $
    (1,500
    )Allocation of net (loss) income:Managing general partner
    
    $
    (52,100
    )
    
    $
    37,300Limited partners
    
    $
    (117,600
    )
    
    $
    (38,800
    )Net loss per limited partnership unit
    
    $
    (93
    )
    
    $
    (31
    )
   4




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ATLAS AMERICA SERIES 25-2004(B) L.P.
 
 STATEMENT OF CHANGES IN PARTNERS CAPITAL
 FOR THE THREE MONTHS ENDED
 March 31, 2011
 (Unaudited)
 AccumulatedManaging
    
    
    
    
    
    
    OtherGeneral
    
    
    Limited
    
    
    ComprehensivePartner
    
    
    Partners
    
    
    Income
    
    
    TotalBalance at January 1, 2011
    
    $
    2,253,200
    
    
    $
    2,716,700
    
    
    $
    101,300
    
    
    $
    5,071,200Participation in revenues and expenses:Net production revenues
    
    
    (2,800
    )
    
    
    14,600
    
    
    
    
    
    
    
    11,800Depletion
    
    
    (21,100
    )
    
    
    (79,900
    )
    
    
    
    
    
    
    (101,000
    )Accretion of asset retirement obligation
    
    
    (11,800
    )
    
    
    (21,900
    )
    
    
    
    
    
    
    (33,700
    )General and administrative
    
    
    (16,400
    )
    
    
    (30,400
    )
    
    
    
    
    
    
    (46,800
    )Net loss
    
    
    (52,100
    )
    
    
    (117,600
    )
    
    
    
    
    
    
    (169,700
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    115,700
    
    
    
    115,700Distributions to partners
    
    
    (222,700
    )
    
    
    (153,600
    )
    
    
    
    
    
    
    (376,300
    )Balance at March 31, 2011
    
    $
    1,978,400
    
    
    $
    2,445,500
    
    
    $
    217,000
    
    
    $
    4,640,900
   5




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ATLAS AMERICA SERIES 25-2004(B) L.P.
 
 STATEMENTS OF CASH FLOWS
 (Unaudited)
 Three Months EndedMarch 31,2011
    
    
    2010Cash flows from operating activities:Net loss
    
    $
    (169,700
    )
    
    $
    (1,500
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depletion
    
    
    101,000
    
    
    
    259,000Non-cash loss (gain) on derivative value
    
    
    78,700
    
    
    
    (17,600
    )Accretion of asset retirement obligation
    
    
    33,700
    
    
    
    25,800Decrease in accounts receivable  affiliate
    
    
    169,100
    
    
    
    31,300Increase (decrease) in accrued liabilities
    
    
    1,100
    
    
    
    (7,500
    )Net cash provided by operating activities
    
    
    213,900
    
    
    
    289,500Cash flows from financing activities:Distributions to partners
    
    
    (236,300
    )
    
    
    (286,400
    )Net cash used in financing activities
    
    
    (236,300
    )
    
    
    (286,400
    )Net (decrease) increase in cash and cash equivalents
    
    
    (22,400
    )
    
    
    3,100Cash and cash equivalents at beginning of period
    
    
    69,400
    
    
    
    116,400Cash and cash equivalents at end of period
    
    $
    47,000
    
    
    $
    119,500Supplemental schedule of non-cash operating, investing and financing
activities:Assets contributed by managing general partner:Tangible equipment
    
    $
    
    
    
    $
    1,200$
    
    
    
    $
    1,200Distribution to managing general partner
    
    $
    140,000
    
    
    $
    
   6




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ATLAS AMERICA SERIES 25-2004(B) L.P.
 
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2011
 (Unaudited)
 NOTE 1  DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
    NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Use of Estimates
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ATLAS AMERICA SERIES 25-2004(B) L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011
(Unaudited)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Use of Estimates (Continued)
  Accounts Receivable and Allowance for Possible Losses
  Oil and Gas Properties
   March 31,
    
    
    December 31,2011
    
    
    2010Proved properties:Leasehold interests
    
    $
    898,600
    
    
    $
    898,600Wells and related equipment
    
    
    40,865,500
    
    
    
    40,865,50041,764,100
    
    
    
    41,764,100Accumulated depletion
    
    
    (35,583,400
    )
    
    
    (35,482,400
    )$
    6,180,700
    
    
    $
    6,281,700
  8




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ATLAS AMERICA SERIES 25-2004(B) L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011
(Unaudited)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Impairment of Long-Lived Assets
    Working Interest
   9




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ATLAS AMERICA SERIES 25-2004(B) L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011
(Unaudited)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Revenue Recognition
   Recently Adopted Accounting Standards
  NOTE 3  ASSET RETIREMENT OBLIGATION
    10




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ATLAS AMERICA SERIES 25-2004(B) L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011
(Unaudited)
 NOTE 3  ASSET RETIREMENT OBLIGATION (Continued)
  Three Months EndedMarch 31,2011
    
    
    2010Asset retirement obligation at beginning of period
    
    $
    2,249,700
    
    
    $
    1,721,100Accretion expense
    
    
    33,700
    
    
    
    25,800Asset retirement obligation at end of period
    
    $
    2,283,400
    
    
    $
    1,746,900
 NOTE 4  COMPREHENSIVE (LOSS) INCOME
  Three Months EndedMarch 31,2011
    
    
    2010Net loss
    
    $
    (169,700
    )
    
    $
    (1,500
    )Other comprehensive income:Net unrealized gain
    
    
    168,200
    
    
    
    538,300Less: reclassification adjustment for gain realized in net loss
    
    
    (52,500
    )
    
    
    (144,800
    )Total other comprehensive income
    
    
    115,700
    
    
    
    393,500Comprehensive (loss) income
    
    $
    (54,000
    )
    
    $
    392,000
 NOTE 5  DERIVATIVE INSTRUMENTS
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ATLAS AMERICA SERIES 25-2004(B) L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011
(Unaudited)
 NOTE 5  DERIVATIVE INSTRUMENTS (Continued)
     12




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ATLAS AMERICA SERIES 25-2004(B) L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011
(Unaudited)
 NOTE 5  DERIVATIVE INSTRUMENTS (Continued)
  Fair Value of Derivative Instruments:
 Fair ValueBalance Sheet
    
    December 31,Derivatives in Cash Flow Hedging Relationships
    
    Location
    
    2010Derivative Commodity Contracts
    
    Current Assets
    
    $
    323,400Long-Term Assets
    
    
    316,100639,500Current liabilities
    
    
    (3,400
    )Long-term liabilities
    
    
    (56,200
    )(59,600
    )Total
    
    $
    579,900
 Effects of Derivative Instruments on Statements of Operations:
 Gain
    
    
    Location of Gain
    
    GainRecognized in OCI on Derivative
    
    
    Reclassified from Accumulated
    
    Reclassified from OCI into Net LossDerivatives in
    
    Three Months Ended
    
    
    OCI into Income
    
    Three Months EndedCash Flow
    
    March 31,
    
    
    March 31,
    
    
    
    
    March 31,
    
    
    March 31,Hedging Relationship
    
    2011
    
    
    2010
    
    
    
    
    2011
    
    
    2010Commodity contracts
    
    $
    168,200
    
    
    $
    538,300
    
    
    Natural gas and oil revenue
    
    $
    52,500
    
    
    $
    144,800
 NOTE 6  FAIR VALUE OF FINANCIAL INSTRUMENTS
  Level 1
 Level 2
 Level 3
  13




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ATLAS AMERICA SERIES 25-2004(B) L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011
(Unaudited)
 NOTE 6  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
 Assets and Liabilities Measured at Fair Value on a Recurring Basis
  Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
  NOTE 7  TRANSACTIONS WITH ATLAS RESOURCES, LLC, AND ITS AFFILIATES
  
    
    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 months ended March 31, 2011 and 2010 were
$29,600 and $29,700, respectively.
 
    
    Monthly well supervision fees which are included in production expenses in the
Partnerships statements of operations are payable at $313 per well per month for
operating and maintaining the wells. Well supervision fees incurred for the three months
ended March 31, 2011 and 2010 were $121,900 and $122,700, 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 months ended March 31, 2011 and 2010 were
$35,800 and $57,800, respectively.
 
    
    Assets contributed by the MGP, which are disclosed in the Partnerships statements of
cash flows as a non-cash activity for the three months ended March 31, 2010, were
$1,200.
  Subordination by Managing General Partner
   14




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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
 Forward-Looking Statements
 When used in this Form 10-Q , the words believes, anticipates, expects and similar
expressions are intended to identify forward-looking statements. These risks and uncertainties
could cause actual results to differ materially from the results stated or implied in this
document. Readers are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. We undertake no obligation to publicly release the results
of any revisions to forward-looking statements which we may make to reflect events or circumstances
after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.
  General
     15




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Results of Operations
  Three Months EndedMarch 31,2011
    
    
    2010Production revenues (in thousands):Gas
    
    $
    218
    
    
    $
    523Oil
    
    
    6
    
    
    
    45Total
    
    $
    224
    
    
    $
    568Production volumes:Gas (mcf/day) (1)
    
    
    557
    
    
    
    840Oil (bbls/day) (1)
    
    
    1
    
    
    
    7Total (mcfe/day) (1)
    
    
    563
    
    
    
    882Average sales prices(2):Gas (per mcf) (1) (3)
    
    $
    5.91
    
    
    $
    6.68Oil (per bbl) (1) (4)
    
    $
    80.06
    
    
    $
    72.22Average production costs:As a percent of revenues
    
    
    95
    %
    
    
    43
    %Per mcfe (1)
    
    $
    4.20
    
    
    $
    3.04Depletion per mcfe
    
    $
    1.99
    
    
    $
    3.26
 
 (1)
    
    Mcf represents thousand cubic feet, mcfe represents thousand cubic feet
equivalent, and bbls represents barrels. Bbls are converted to mcfe using the ratio
of six mcfs to one bbl.(2)
    
    Average sales prices represent accrual basis pricing after reversing the effect
of previously recognized gains resulting from prior period impairment charges.(3)
    
    Average gas prices are calculated by including in total revenue derivative gains
previously recognized into income and dividing by the total volume for the period.
Previously recognized derivative gain of $78,500 and a loss of $18,100 for the three
months ended March 31, 2011 and 2010, respectively. The derivative gains are included
in other comprehensive (loss) income and resulted from prior period impairment charges.(4)
    
    Average oil prices are calculated by including in total revenue derivative gains
previously recognized into income and dividing by the total volume for the period.
Previously recognized derivative gains were $200 and $500 for the three months ended
March 31, 2011 and 2010, respectively. The derivative gains are included in other
comprehensive (loss) income and resulted from prior period impairment charges. Natural Gas Revenues.
  16




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Oil Revenues.
 Costs and Expenses.
   Liquidity and Capital Resources
      17




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Critical Accounting Policies
  Subordination by Managing General Partner
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
   18




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PART II OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
   
 ITEM 6.
    
    EXHIBITS
 EXHIBIT INDEX
 Exhibit No.

    
    Description4.0
    
    
    Amended and Restated Certificate and Agreement of Limited Partnership for Atlas America
Series 25-2004
(B) L.P. (1)10.1
    
    
    Drilling and Operating Agreement for Atlas America Series 25-2004 (B) L.P. (1)31.1
    
    
    Certification Pursuant to Rule 13a-14/15(d)-1431.2
    
    
    Certification Pursuant to Rule 13a-14/15(d)-1432.1
    
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley
Act of 200232.2
    
    
    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 29, 2005 in the Form S-1 Registration Statement dated April 29, 2005, File No. 000-51271  19




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SIGNATURES
   Atlas Resources, LLC, Managing General PartnerDate:  May 13, 2011
    By:
    /s/ Freddie M. KotekFreddie M. Kotek,
Chairman of the Board of Directors, Chief Executive Officer and President  Date:  May 13, 2011
    By:
    /s/ Jeffrey C. SimmonsJeffrey C. Simmons, Executive Vice President  OperationsDate:  May 13, 2011
    By:
    /s/ Sean P. McGrathSean P. McGrath, Chief Financial Officer  20