##### Table of Contents



United States
Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 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 0-52615
 ATLAS AMERICA SERIES 27-2006 L.P.
  Delaware
    
    20-5242075(State or other jurisdiction of
    
    (I.R.S. EmployerIncorporation or organization)
    
    Identification No.)Westpointe Corporate Center One1550 Coraopolis Heights Road, 2nd FloorMoon Township, PA
    
    15108(Address of principal executive offices)
    
    (Zip Code)
 (412) 262-2830
  Title of each class
    
    Name of each exchange on which registeredNone
    
    None
 
 Yes o No þ
 Yes o No þ
 Yes þ No o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ




---



##### 



ATLAS AMERICA SERIES 27-2006 L.P.
(A DELAWARE LIMITED PARTNERSHIP)
INDEX TO ANNUAL REPORT
 ON FORM 10-K
 PAGEPART IItem 1: Business
    
    
    3-5Item 2: Properties
    
    
    5-10Item 3: Legal Proceedings
    
    
    10Item 4: (Removed and Reserved)
    
    
    10PART IIItem 5: Market for Registrants Common Equity and Related Security Holder Matters
    
    
    10-11Item 7: Managements Discussion and Analysis of Financial Condition or Plan of Operations
    
    
    11-15Item 8: Financial Statements
    
    
    16-36Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    36Item 9A: Controls and Procedures
    
    
    36-37Item 9B: Other Information
    
    
    37PART IIIItem 10: Directors and Executive Officers of the Registrant
    
    
    37-40Item 11: Executive Compensation
    
    
    40Item 12: Security Ownership of Certain Beneficial Owners and Management
    
    
    40Item 13: Certain Relationships and Related Party Transactions
    
    
    40-41Item 14: Principal Accountant Fees and Services
    
    
    41PART IVItem 15: Exhibits
    
    
    41SIGNATURES
    
    
    42Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2Exhibit 99.1
   2




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The matters discussed within this report include forward-looking statements. These
statements may be identified by the use of forward-looking terminology such as anticipate,
believe, continue, could, estimate, expect, intend, may, might, plan,
potential, predict, should, or will, or the negative thereof or other variations thereon or
comparable terminology. In particular, statements about our expectations, beliefs, plans,
objectives, assumptions or future events or performance contained in this report are
forward-looking statements. We have based these forward-looking statements on our current
expectations, assumptions, estimates and projections. While we believe these expectations,
assumptions, estimates and projections are reasonable, such forward-looking statements are only
predictions and involve known and unknown risks and uncertainties, many of which are beyond our
control. These and other important factors may cause our actual results, performance or
achievements to differ materially from any future results, performance or achievements expressed or
implied by these forward-looking statements.
 
 PART I
 
 ITEM 1.
    
    DESCRIPTION OF BUSINESS
 General.
       3




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
    
    well tending, routine maintenance and adjustment;
 
    
    reading meters, recording production, pumping, maintaining appropriate books and
records; and
 
    
    preparation of reports for us and government agencies.
  Markets and Competition.
  Governmental Regulation.
 Regulation of oil and gas producing activities.
  4




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
    
    new well permit and well registration requirements, procedures and fees;
 
    
    minimum well spacing requirements;
 
    
    restriction on well locations and underground gas storage;
 
    
    certain well site restoration, groundwater protection and safety measures;
 
    
    landowner notification requirements;
 
    
    certain bonding or other security measures;
 
    
    various reporting requirements;
 
    
    well plugging standards and procedures; and
 
    
    broad enforcement powers.
 Environmental and Safety Regulation.
  Where can you find more information.
  
 
 ITEM 2.
    
    DESCRIPTION OF PROPERTIES
 Drilling Activity .
  5




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Summary of Producing Wells .
 Number of Producing WellsGross
    
    
    NetGas
    
    
    254
    
    
    
    204.12
 Production.
 AverageYear
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Production CostEnded
    
    Production
    
    
    Average Sales Price
    
    
    (Lifting Cost)December 31,
    
    Oil (bbls)(1)
    
    
    Gas (mcf)(1)
    
    
    per bbl(1) (3) (5)
    
    
    per mcf(1) (3) (4)
    
    
    per mcfe(1) (2)2009
    
    
    2,200
    
    
    
    869,800
    
    
    $
    62.86
    
    
    $
    7.93
    
    
    $
    2.462008
    
    
    3,600
    
    
    
    1,336,900
    
    
    $
    93.76
    
    
    $
    9.19
    
    
    $
    2.07
 
 (1)
    
    Mcf represents one thousand cubic feet of natural gas. Mcfe represents a thousand
cubic feet equivalent. Oil production is converted to mcfe at the rate of six mcf per
barrel (bbl).(2)
    
    Lifting costs include labor to operate the wells and related equipment, repairs
and maintenance, materials and supplies, property taxes, insurance and gathering
charges.(3)
    
    Average sales prices represent accrual basis pricing after reversing the effect
of previously recognized gains resulting from prior period impairment charges.(4)
    
    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 gains were $2,163,200 for the year ended December 31,
2009. The derivative gains are included in other comprehensive income and resulted from
prior period impairment charges.(5)
    
    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 $56,100 for the year ended December 31,
2009 the derivative gains are included in other comprehensive income and resulted from
prior period impairment charges. Natural Gas and Oil Reserve Information.
 
    
    Introduce a new definition of oil and gas producing activities. This new definition
allows companies to include in their reserve base volumes from unconventional resources.
Such unconventional resources include bitumen extracted from oil sands and oil and gas
extracted from coal beds and shale formations.
 
    
    Report oil and gas reserves using an unweighted average price using the prior 12-month
period, based on the closing prices on the first day of each month, rather than year-end
pricing. This should maximize the comparability of reserve estimates among companies and
mitigate the distortion of the estimates that arises when using a single pricing date.
 
    
    Permit companies to disclose their probable and possible reserves on a voluntary basis.
Current rules limit disclosure to only proved reserves.
 
    
    Update and revise reserve definitions to reflect changes in the oil and gas industry and
new technologies. New updated definitions include by geographic area and reasonable
certainty.
 
    
    Permit the use of new technologies to determine proved reserves if those technologies
have been demonstrated empirically to lead to reliable conclusions about reserves volumes.
 
    
    Require additional disclosures regarding the qualifications of the chief technical
person who oversees the companys overall reserve estimation process. Additionally,
disclosures are required related to internal controls over reserve estimation, as well as a
report addressing the independence and qualifications of a companys reserves preparer or
auditor based on Society of Petroleum Engineers criteria.
  6




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December 31,2009
    
    
    2008Natural gas (per mcf)
    
    $
    3.87
    
    
    $
    5.71Oil (per bbl)
    
    
    61.18
    
    
    
    44.80
   7




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At December 31,2009
    
    
    2008Natural gas reserves  Proved Reserves (Mcf) (1)(4):Proved developed reserves (2)
    
    
    5,894,900
    
    
    
    6,919,500Total proved reserves of natural gas
    
    
    5,894,900
    
    
    
    6,919,500Oil reserves  Proved Reserves (Bbl) (1)(4):Proved developed reserves (2)
    
    
    13,600
    
    
    
    12,800Total proved reserves of oil
    
    
    13,600
    
    
    
    12,800Total proved reserves (Mcfe)
    
    
    5,976,500
    
    
    
    6,996,300PV-10 estimate of cash flows of proved reserves (3)(4):Proved developed reserves
    
    $
    6,980,400
    
    
    $
    13,929,200Total PV-10 estimate
    
    $
    6,980,400
    
    
    $
    13,929,200PV-10 estimate per investor partner unit (5)
    
    $
    1,657
    
    
    $
    3,306Undiscounted estimate per investor partner unit (5)
    
    $
    2,715
    
    
    $
    5,485
 
 (1)
    
    Proved reserves generally refers to the estimated quantities of crude oil, natural
gas, and natural gas liquids which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs under
existing economic and operating conditions, i.e., prices and costs as of the date the
estimate is made. Prices include consideration of changes in existing prices provided
only by contractual arrangements, but not on escalations based upon future conditions.
Reservoirs are considered proved if economic production is supported by either actual
production or conclusive formation test. The area of a reservoir considered proved
includes: that portion delineated by drilling and defined by gas-oil and/or oil-water
contacts, if any; and the immediately adjoining portions not yet drilled, but which can
be reasonably judged as economically productive on the basis of available geological and
engineering data.(2)
    
    Proved developed reserves generally refers to reserves that can be expected to
be recovered through existing wells with existing equipment and operating methods.(3)
    
    The present value of estimated future net cash flows is calculated by discounting
estimated future net cash flows by 10% annually.(4)
    
    Please see Regulation S-X rule 4-10 for complete definitions of each reserve
category.(5)
    
    This value per $25,000 unit is determined by following the methodology used for
determining our proved reserves using the data discussed above. However, this value does
not necessarily reflect the fair market value of a unit, and each unit is illiquid.
Also, the value of a unit for purposes of presentment of the unit to our MGP for
purchase is different, because it is calculated under a formula set forth in the
partnership agreement.   8




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Title to Properties.
  Acreage.
 Developed AcreageLocation
    
    Gross(1)
    
    
    Net(2)New York
    
    
    200
    
    
    
    200Pennsylvania
    
    
    4,016
    
    
    
    3,325Tennessee
    
    
    2,399
    
    
    
    1,680Total
    
    
    6,615
    
    
    
    5,205
 
 (1)
    
    A gross acre is an acre in which we own a working interest.(2)
    
    A net acre represents the actual working interest we own in one gross acre
divided by one hundred. For example, a 50% working interest in an acre is one gross
acre, but a 0.5 net acre. Delivery Commitments.
    9




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ITEM 3.
    
    LEGAL PROCEEDINGS
   
 ITEM 4.
    
    (REMOVED AND RESERVED)
  
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS
 Market Information.
 
    
    our managing general partner consent;
 
    
    the transfer not result in materially adverse tax consequences to us; and
 
    
    the transfer not violate federal or state securities laws.
  
    
    the assignor gives the assignee the right;
 
    
    our MGP consents to the substitution;
 
    
    the assignee pays to us all costs and expenses incurred in connection with the
substitution; and
 
    
    the assignee executes and delivers the instruments, which our MGP requires to effect
the substitution and to confirm his or her agreement to be bound by the terms of our
partnership agreement.
  Holders.
 Distributions.
  10




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
    
    $4,805,900 and $7,637,400 to our limited partners; and
 
    
    $1,183,200 and $3,694,000 to our managing general partner, respectively.
 
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATIONS
  General.
    11




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Results of Operations.
 Years Ended December 31,2009
    
    
    2008Production revenues (in thousands):Gas
    
    $
    4,733
    
    
    $
    12,279Oil
    
    
    79
    
    
    
    335Total
    
    $
    4,812
    
    
    $
    12,614Production volumes:Gas (mcf/day) (1)
    
    
    2,383
    
    
    
    3,653Oil (bbls/day) (1)
    
    
    6
    
    
    
    10Total (mcfe/day) (1)
    
    
    2,419
    
    
    
    3,713Average sales prices: (2)Gas (per mcf) (1) (3)
    
    $
    7.93
    
    
    $
    9.19Oil (per bbl) (1) (4)
    
    $
    62.86
    
    
    $
    93.76Average production costs:As a percent of revenues
    
    
    45
    %
    
    
    22
    %Per mcfe (1)
    
    $
    2.46
    
    
    $
    2.07Depletion per mcfe
    
    $
    2.35
    
    
    $
    6.32
 
 (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 gains were $2,163,200 for the year ended December 31,
2009. The derivative gains are included in other comprehensive 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 $56,100 for the year ended December 31,
2009 the derivative gains are included in other comprehensive income and resulted from
prior period impairment charges. Natural Gas Revenues .
   12




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Oil Revenues.
 Expenses.
    Liquidity and Capital Resources.
     13




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Critical Accounting Policies.
 Impairment of Long-Lived Assets.
 Fair Value of Financial Instruments
  Level 1 
 Level 2 
 Level 3
    14




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Reserve Estimates .
 Asset Retirement Obligations.
 Working Interest.
  15




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ITEM 8.
    
    FINANCIAL STATEMENTS
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  16




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ATLAS AMERICA SERIES 27-2006 L.P.
BALANCE SHEETS
DECEMBER 31,
 2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    377,600
    
    
    $
    661,800Accounts receivable-affiliate
    
    
    1,449,900
    
    
    
    2,478,800Short-term hedge receivable due from affiliate
    
    
    856,100
    
    
    
    2,431,800Total current assets
    
    
    2,683,600
    
    
    
    5,572,400Oil and gas properties, net
    
    
    17,705,800
    
    
    
    19,685,600Long-term hedge receivable due from affiliate
    
    
    704,300
    
    
    
    1,539,700$
    21,093,700
    
    
    $
    26,797,700LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accrued liabilities
    
    $
    59,000
    
    
    $
    22,200Short-term hedge liability due to affiliate
    
    
    10,300
    
    
    
    214,100Total current liabilities
    
    
    69,300
    
    
    
    236,300Asset retirement obligation
    
    
    2,235,500
    
    
    
    2,013,000Long-term hedge liability due to affiliate
    
    
    107,300
    
    
    
    192,700Partners capital:Managing general partner
    
    
    4,080,200
    
    
    
    5,760,400Limited partners (2,840 units)
    
    
    14,504,000
    
    
    
    18,595,300Accumulated other comprehensive income
    
    
    97,400
    
    
    
    Total partners capital
    
    
    18,681,600
    
    
    
    24,355,700$
    21,093,700
    
    
    $
    26,797,700
   17




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ATLAS AMERICA SERIES 27-2006 L.P.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009 and 2008
 2009
    
    
    2008REVENUESNatural gas and oil
    
    $
    4,812,500
    
    
    $
    12,614,700Total revenues
    
    
    4,812,500
    
    
    
    12,614,700COSTS AND EXPENSESProduction
    
    
    2,175,000
    
    
    
    2,808,300Depletion
    
    
    2,072,000
    
    
    
    8,590,600Impairment of oil and gas properties
    
    
    
    
    
    
    38,135,500Accretion of asset retirement obligation
    
    
    120,800
    
    
    
    96,000General and administrative
    
    
    217,600
    
    
    
    278,400Total expenses
    
    
    4,585,400
    
    
    
    49,908,800Net earnings (loss)
    
    $
    227,100
    
    
    $
    (37,294,100
    )Allocation of net earnings (loss):Managing general partner
    
    $
    400,600
    
    
    $
    (4,841,900
    )Limited partners
    
    $
    (173,500
    )
    
    $
    (32,452,200
    )Net loss per limited partnership unit
    
    $
    (61
    )
    
    $
    (11,427
    )
   18




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ATLAS AMERICA SERIES 27-2006 L.P.
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2009 AND 2008
 2009
    
    
    2008Net earnings (loss)
    
    $
    227,100
    
    
    $
    (37,294,100
    )Other comprehensive income:Unrealized holding gain on hedging contracts
    
    
    412,900
    
    
    
    85,600Less: reclassification adjustment for (gains)
losses realized in net earnings (loss)
    
    
    (315,500
    )
    
    
    379,600Total other comprehensive income
    
    
    97,400
    
    
    
    465,200Comprehensive income (loss)
    
    $
    324,500
    
    
    $
    (36,828,900
    )
   19




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ATLAS AMERICA SERIES 27-2006 L.P.
STATEMENTS OF CHANGES IN PARTNERS CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2009 AND 2008
 AccumulatedManaging
    
    
    
    
    
    
    OtherGeneral
    
    
    Limited
    
    
    ComprehensivePartner
    
    
    Partners
    
    
    (Loss) Income
    
    
    TotalBalance at December 31, 2007
    
    $
    14,585,800
    
    
    $
    58,684,900
    
    
    $
    (465,200
    )
    
    $
    72,805,500Participation in revenue and costs and expensesNet production revenues
    
    
    3,196,900
    
    
    
    6,609,500
    
    
    
    
    
    
    
    9,806,400Depletion
    
    
    (1,455,500
    )
    
    
    (7,135,100
    )
    
    
    
    
    
    
    (8,590,600
    )Impairment of oil and gas properties
    
    
    (6,461,200
    )
    
    
    (31,674,300
    )
    
    
    
    
    
    
    (38,135,500
    )Accretion expense
    
    
    (31,300
    )
    
    
    (64,700
    )
    
    
    
    
    
    
    (96,000
    )General and administrative
    
    
    (90,800
    )
    
    
    (187,600
    )
    
    
    
    
    
    
    (278,400
    )Net loss
    
    
    (4,841,900
    )
    
    
    (32,452,200
    )
    
    
    
    
    
    
    (37,294,100
    )MGP asset returned
    
    
    (289,500
    )
    
    
    
    
    
    
    
    
    
    
    (289,500
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    465,200
    
    
    
    465,200Distributions to partners
    
    
    (3,694,000
    )
    
    
    (7,637,400
    )
    
    
    
    
    
    
    (11,331,400
    )Balance at December 31, 2008
    
    $
    5,760,400
    
    
    $
    18,595,300
    
    
    $
    
    
    
    $
    24,355,700Participation in revenue and costs and expensesNet production revenues
    
    
    859,800
    
    
    
    1,777,700
    
    
    
    
    
    
    
    2,637,500Depletion
    
    
    (348,900
    )
    
    
    (1,723,100
    )
    
    
    
    
    
    
    (2,072,000
    )Accretion expense
    
    
    (39,400
    )
    
    
    (81,400
    )
    
    
    
    
    
    
    (120,800
    )General and administrative
    
    
    (70,900
    )
    
    
    (146,700
    )
    
    
    
    
    
    
    (217,600
    )Net earnings (loss)
    
    
    400,600
    
    
    
    (173,500
    )
    
    
    
    
    
    
    227,100MGP asset returned
    
    
    (9,500
    )
    
    
    
    
    
    
    
    
    
    
    (9,500
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    97,400
    
    
    
    97,400Subordination
    
    
    (888,100
    )
    
    
    888,100
    
    
    
    
    
    
    
    Distributions to partners
    
    
    (1,183,200
    )
    
    
    (4,805,900
    )
    
    
    
    
    
    
    (5,989,100
    )Balance at December 31, 2009
    
    $
    4,080,200
    
    
    $
    14,504,000
    
    
    $
    97,400
    
    
    $
    18,681,600
   20




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ATLAS AMERICA SERIES 27-2006 L.P.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2009 AND 2008
 2009
    
    
    2008Cash flows from operating activities:Net earnings (loss)
    
    $
    227,100
    
    
    $
    (37,294,100
    )Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:Depletion
    
    
    2,072,000
    
    
    
    8,590,600Impairment of oil and gas properties
    
    
    
    
    
    
    41,700,300Non-cash loss (gain) on derivative
    
    
    2,219,300
    
    
    
    (3,564,700
    )Accretion of asset retirement obligation
    
    
    120,800
    
    
    
    96,000Increase (decrease) in accrued liabilities
    
    
    36,800
    
    
    
    (4,800
    )Decrease in accounts receivable-affiliate
    
    
    1,028,900
    
    
    
    1,327,600Net cash provided by operating activities
    
    
    5,704,900
    
    
    
    10,850,900Cash flows from financing activities:Distributions to partners
    
    
    (5,989,100
    )
    
    
    (11,331,400
    )Net cash used in financing activities
    
    
    (5,989,100
    )
    
    
    (11,331,400
    )Net decrease in cash and cash equivalents
    
    
    (284,200
    )
    
    
    (480,500
    )Cash and cash equivalents at beginning of period
    
    
    661,800
    
    
    
    1,142,300Cash and cash equivalents at end of period
    
    $
    337,600
    
    
    $
    661,800Supplemental Schedule of non-cash investing and financing activities:Assets contributed by (returned to) the managing general partner:Tangible equipment
    
    $
    (19,100
    )
    
    $
    (714,200
    )Intangible drilling costs
    
    
    9,600
    
    
    
    424,700Total assets returned to the managing general partner
    
    $
    (9,500
    )
    
    $
    (289,500
    )Asset retirement obligation
    
    $
    101,700
    
    
    $
    226,900
   21




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
 NOTE 1  DESCRIPTION OF BUSINESS
   NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
  Accounts Receivable and Allowance for Possible Losses
   22




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Revenue Recognition
   Fair Value of Financial Instruments
  Supplemental Cash Flow Information
  Concentration of Credit Risk
  Comprehensive Income (Loss)
   23




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Working Interest
  Oil and Gas Properties
   December 31,
    
    
    December 31,2009
    
    
    2008Natural gas and oil properties:Proved properties:Leasehold interests
    
    $
    1,716,900
    
    
    $
    1,716,900Wells and related equipment
    
    
    86,402,200
    
    
    
    86,310,00088,119,100
    
    
    
    88,026,900Accumulated depletion
    
    
    (70,413,300
    )
    
    
    (68,341,300
    )$
    17,705,800
    
    
    $
    19,685,600
  24




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##### Table of Contents



ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
   Asset Retirement Obligation
  Environmental Matters
    25




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Major Customers
  Income Taxes
  Recently Adopted Accounting Standards
   
    
    Introduce a new definition of oil and gas producing activities. This new definition
allows companies to include in their reserve base volumes from unconventional resources. Such
unconventional resources include bitumen extracted from oil sands and oil and gas extracted from
coal beds and shale formations;
    
    Report oil and gas reserves using an unweighted average price using the prior 12-month
period, based on the closing prices on the first day of each month, rather than year-end pricing.
This should maximize the comparability of reserve estimates among companies and mitigate the
distortion of the estimates that arises when using a single pricing date;
    
    Permit companies to disclose their probable and possible reserves on a voluntary basis.
Current rules limit disclosure to only proved reserves;
  26




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Recently Issued Financial Accounting Standards (Continued)
 
    
    Update and revise reserve definitions to reflect changes in the oil and gas industry and
new technologies. New updated definitions include by geographic area and reasonable certainty;
    
    Permit the use of new technologies to determine proved reserves if those technologies
have been demonstrated empirically to lead to reliable conclusions about reserves volumes; and
    
    Require additional disclosures regarding the qualifications of the chief technical person
who oversees the companys overall reserve estimation process. Additionally, disclosures are
required with regard to internal controls over reserve estimation, as well as a report addressing
the independence and qualifications of a companys reserves preparer or auditor based on Society of
Petroleum Engineers criteria.
     27




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Recently Issued Financial Accounting Standards (Continued)
      28




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 3  PARTICIPATION IN REVENUES AND COSTS
  ManagingGeneral
    
    
    LimitedPartner
    
    
    PartnersOrganization and offering costs
    
    
    100
    %
    
    
    0
    %Lease costs
    
    
    100
    %
    
    
    0
    %Revenues (1)
    
    
    32.60
    %
    
    
    67.40
    %Operating costs, administrative costs, direct costs and all other operating costs (2)
    
    
    32.60
    %
    
    
    67.40
    %Intangible drilling costs
    
    
    4.79
    %
    
    
    95.21
    %Tangible equipment costs
    
    
    60.11
    %
    
    
    39.89
    %
 
 (1)
    
    Subject to the MGPs subordination obligation, substantially all partnership
revenues will be shared in the same percentage as capital contributions are to the
total partnership capital contributions, except that the MGP will receive an additional
7% of the partnership revenues and the MGP revenue percentage may not exceed 40%.(2)
    
    These costs will be charged to the partners in the same ratio as the related
production revenues are credited. NOTE 4  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
  
    
    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 in 2009 and 2008 were $170,700 and $172,500, respectively.
 
    
    Monthly well supervision fees which are included in production expenses in the
Partnerships Statements of Operations are payable at $376 per well, per month in 2009 and
2008 for operating and maintaining the wells. Well supervision fees incurred in 2009 and
2008 were $855,500 and $868,600, 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 in 2009 and 2008 were $831,300 and $1,367,500, respectively.
 
    
    Direct costs which are included in production and general administrative expenses in the
Partnerships Statements of Operations are payable to the MGP and its affiliates as
reimbursement for all costs expended on the Partnerships behalf. Direct costs incurred in
2009 and 2008 were $535,100 and $678,100, respectively.
 
    
    Assets returned to the MGP, which are disclosed in the Partnerships Statements of Cash
Flows as a non-cash activity for the years ended December 31, 2009 and 2008, were $9,500
and $289,500, respectively.
   29




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##### Table of Contents



ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 5  COMMITMENTS
   NOTE 6  SUBORDINATION BY MANAGING GENERAL PARTNER
  NOTE 7  DERIVATIVE INSTRUMENTS
    30




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 7  DERIVATIVE INSTRUMENTS (Continued)
 Fair Value of Derivative Instruments:
 Asset Derivatives
    
    
    Liability DerivativesDerivatives in
    
    
    
    Fair Value
    
    
    
    
    Fair ValueCash Flow
    
    Balance Sheet
    
    December 31,
    
    
    December 31,
    
    
    Balance Sheet
    
    December 31,
    
    
    December 31,Hedging Relationships
    
    Location
    
    2009
    
    
    2008
    
    
    Location
    
    2009
    
    
    2008Commodity contracts:
    
    Current assets
    
    $
    856,100
    
    
    $
    2,431,800
    
    
    Current liabilities
    
    $
    10,300
    
    
    $
    214,100Long-term assets
    
    
    704,300
    
    
    
    1,539,700
    
    
    Long-term liabilities
    
    
    107,300
    
    
    
    192,700Total derivatives
    
    
    
    $
    1,560,400
    
    
    $
    3,971,500
    
    
    
    
    $
    117,600
    
    
    $
    406,800
 Effects of Derivative Instruments on Statements of Operations:
 Gain
    
    
    
    
    Gain (Loss)Recognized in OCI on Derivative
    
    
    
    
    Reclassified from OCI into Income(Effective Portion)
    
    
    Location of Gain/(Loss)
    
    (Effective Portion)Derivatives in
    
    Twelve Months Ended
    
    
    Reclassified from Accumulated
    
    Twelve Months EndedCash Flow
    
    December 31,
    
    
    December 31,
    
    
    OCI into Income
    
    December 31,
    
    
    December 31,Hedging Relationship
    
    2009
    
    
    2008
    
    
    (Effective Portion)
    
    2009
    
    
    2008Commodity contracts
    
    $
    412,900
    
    
    $
    85,600
    
    
    Natural gas and oil revenue
    
    $
    315,500
    
    
    $
    (379,600
    )
    31




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 7  DERIVATIVE INSTRUMENTS (Continued)
  Natural Gas Fixed Price Swaps
 Production
    
    
    
    
    
    AveragePeriod Ending
    
    Volumes
    
    
    Fixed Price
    
    
    Fair ValueDecember 31,
    
    (MMbtu)(1)
    
    
    (per MMbtu)(1)
    
    
    Asset(2)2010
    
    
    491,900
    
    
    $
    7.34
    
    
    $
    754,5002011
    
    
    257,100
    
    
    
    6.98
    
    
    
    227,0002012
    
    
    204,300
    
    
    
    7.22
    
    
    
    170,6002013
    
    
    110,600
    
    
    
    7.08
    
    
    
    46,200$
    1,198,300
 Natural Gas Costless Collars
 Production
    
    
    
    
    
    
    
    AveragePeriod Ending
    
    Option
    
    Volumes
    
    
    Floor & Cap
    
    
    Fair ValueDecember 31,
    
    Type
    
    (MMbtu)(1)
    
    
    (per MMbtu)(1)
    
    
    Asset(2)2010
    
    Puts purchased
    
    
    34,100
    
    
    $
    7.84
    
    
    $
    84,0002010
    
    Calls sold
    
    
    34,100
    
    
    
    9.01
    
    
    
    2011
    
    Puts purchased
    
    
    149,900
    
    
    
    6.45
    
    
    
    96,4002011
    
    Calls sold
    
    
    149,900
    
    
    
    7.63
    
    
    
    2012
    
    Puts purchased
    
    
    77,400
    
    
    
    6.51
    
    
    
    34,9002012
    
    Calls sold
    
    
    77,400
    
    
    
    7.71
    
    
    
    2013
    
    Puts purchased
    
    
    71,900
    
    
    
    6.58
    
    
    
    20,4002013
    
    Calls sold
    
    
    71,900
    
    
    
    7.79
    
    
    
    $
    235,700
 Crude Oil Fixed Price Swaps
 Production
    
    
    
    
    
    AveragePeriod Ending
    
    Volumes
    
    
    Fixed Price
    
    
    Fair ValueDecember 31,
    
    (Bbl)(1)
    
    
    (per Bbl)(1)
    
    
    Asset(3)2010
    
    
    300
    
    
    $
    97.40
    
    
    $
    5,4002011
    
    
    300
    
    
    
    77.46
    
    
    
    1,0002012
    
    
    200
    
    
    
    76.86
    
    
    
    2002013
    
    
    100
    
    
    
    77.36
    
    
    
    100$
    6,700
  32




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 7  DERIVATIVE INSTRUMENTS (Continued)
 Crude Oil Costless Collars
 Production
    
    
    
    
    
    
    
    AveragePeriod Ending
    
    Option
    
    Volumes
    
    
    Floor & Cap
    
    
    Fair ValueDecember 31,
    
    Type
    
    (Bbl)(1)
    
    
    (per Bbl)(1)
    
    
    Asset (Liability)(3)2010
    
    Puts purchased
    
    
    200
    
    
    $
    85.00
    
    
    $
    1,8002010
    
    Calls sold
    
    
    200
    
    
    
    112.92
    
    
    
    2011
    
    Puts purchased
    
    
    200
    
    
    
    67.22
    
    
    
    3002011
    
    Calls sold
    
    
    200
    
    
    
    89.44
    
    
    
    2012
    
    Puts purchased
    
    
    100
    
    
    
    65.51
    
    
    
    1002012
    
    Calls sold
    
    
    100
    
    
    
    91.45
    
    
    
    2013
    
    Puts purchased
    
    
    50
    
    
    
    65.36
    
    
    
    2013
    
    Calls sold
    
    
    50
    
    
    
    93.44
    
    
    
    (100
    )$
    2,100Total Net Asset
    
    $
    1,442,800
 
 (1)
    
    MMBTU represents million British Thermal Units. Bbl represents barrels.(2)
    
    Fair value based on forward NYMEX natural gas prices.(3)
    
    Fair value based on forward WTI crude oil prices. NOTE 8  FAIR VALUE OF FINANCIAL INSTRUMENTS
  Level 1 
    
    Unadjusted quoted prices in active markets for identical assets and
liabilities that the reporting entity has the ability to access at the measurement date.
 Level 2 
    
    Inputs other than quoted prices included within Level 1 that are observable
for the asset and liability or can be corroborated with observable market data for
substantially the entire contractual term of the asset or liability.
 Level 3 
    
    Unobservable inputs that reflect the entities own assumptions about the
assumptions that market participants would use in the pricing of the asset or liability
and are consequently not based on market activity, but rather through particular
valuation techniques.
  33




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 8  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
 Assets and Liabilities Measured at Fair Value on a Recurring Basis
  December 31, 2009
    
    
    December 31, 2008Level 2
    
    
    Total
    
    
    Level 2
    
    
    TotalCommodity-based derivatives
    
    $
    1,442,800
    
    
    $
    1,442,800
    
    
    $
    3,564,700
    
    
    $
    3,564,700Total
    
    $
    1,442,800
    
    
    $
    1,442,800
    
    
    $
    3,564,700
    
    
    $
    3,564,700
 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
   NOTE 9  ASSET RETIREMENT OBLIGATION
   34




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ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 9  ASSET RETIREMENT OBLIGATION (Continued)
   December 31,2009
    
    
    2008Asset retirement obligation at beginning of period
    
    $
    2,013,000
    
    
    $
    1,690,100Revision in estimates
    
    
    101,700
    
    
    
    226,900Accretion expense
    
    
    120,800
    
    
    
    96,000Asset retirement obligation at end of period
    
    $
    2,235,500
    
    
    $
    2,013,000
 NOTE 10  NATURAL GAS AND OIL PRODUCING ACTIVITIES (UNAUDITED)
 (1) Capitalized Costs Related to Oil and Gas Producing Activities
  At December 31,2009
    
    
    2008Leasehold interest:
    
    $
    1,716,900
    
    
    $
    1,716,900Wells and related equipment
    
    
    86,402,200
    
    
    
    86,310,000Accumulated depletion
    
    
    (70,413,300
    )
    
    
    (68,341,300
    )Net capitalized cost
    
    $
    17,705,800
    
    
    $
    19,685,600
 (2) Oil and Gas Reserve Information    35




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##### Table of Contents



ATLAS AMERICA SERIES 27-2006 L.P.
NOTES TO FINANCIAL STATEMENTS  (Continued)
DECEMBER 31, 2009 AND 2008
 NOTE 10  NATURAL GAS AND OIL PRODUCING ACTIVITIES (UNAUDITED) (Continued)
   Natural Gas
    
    
    Oil(Mcf)
    
    
    (Bbls)Balance at December 31, 2007
    
    
    10,981,700
    
    
    
    18,000Production
    
    
    (1,336,900
    )
    
    
    (3,600
    )Revisions to previous estimates
    
    
    (2,725,300
    )
    
    
    (1,600
    )Balance at December 31, 2008
    
    
    6,919,500
    
    
    
    12,800Production
    
    
    (869,800
    )
    
    
    (2,200
    )Revisions to previous estimates
    
    
    (154,800
    )
    
    
    3,000Balance at December 31, 2009
    
    
    5,894,900
    
    
    
    13,600
 
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
    36




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Managements Report on Internal Control over Financial Reporting
 Internal Control  Integrated
Framework
    
 ITEM 9B.
    
    OTHER INFORMATION
  
 PART III
 
 ITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 nd
 Executive Officers and Directors.
 NAME
    
    AGE
    
    POSITION OR OFFICEFreddie M. Kotek
    
    
    54
    
    
    Chairman of the Board of Directors, Chief Executive Officer and PresidentFrank P. Carolas
    
    
    50
    
    
    Executive Vice President  Land and Geology and a DirectorJeffrey C. Simmons
    
    
    51
    
    
    Executive Vice President  Operations and a DirectorJack L. Hollander
    
    
    53
    
    
    Senior Vice President  Direct Participation ProgramsSean P. McGrath
    
    
    38
    
    
    Chief Accounting OfficerMatthew A. Jones
    
    
    48
    
    
    Chief Financial Officer
  37




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##### Table of Contents




    
    the approximate amount of an individuals professional time devoted to the business and
affairs of our MGP and Atlas America have been aggregated because there is no reasonable
method for them to distinguish their activities between the two companies; and
 
    
    for those individuals who also hold senior positions with other affiliates of our MGP,
if it is stated that they devote approximately 100% of their professional time to our MGP
and Atlas America, it is because either the other affiliates are not currently active in
drilling new wells, such as Viking Resources or Resource Energy, and the individuals are
not required to devote a material amount of their professional time to the affiliates, or
there is no reasonable method to distinguish their activities between our MGP and Atlas
America as compared with the other affiliates of our MGP, such as Viking Resources or
Resource Energy.
 Freddie M. Kotek
 Frank P. Carolas.
 Jeffrey C. Simmons.
  38




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##### Table of Contents



Jack L. Hollander.
 Sean P. McGrath
 Matthew A. Jones
 Audit Committee Financial Expert.
 Remuneration of Officers and Directors.
  39




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##### Table of Contents



Code of Business Conduct and Ethics. nd
 
 ITEM 11.
    
    EXECUTIVE COMPENSATION
 Certain Relationships and Related Party Transactions
 
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  Organizational and Security Ownership of Beneficial Owners.
 
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 Oil and Gas Revenues.
 Administrative Costs.
 Direct Costs.
 Well Charges.
  40




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##### Table of Contents



Transportation Fees.
 Other Compensation.
 
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Audit Fees.
 Procedures for Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditor.
 
 PART IV
 
 ITEM 15.
    
    EXHIBITS
 
 EXHIBIT INDEX
 Description
    
    Location4(a)
    
    
    Certificate of Limited Partnership for Atlas America
Series 27-2006 L.P.
    
    Previously filed in our Form S-1 on
August 9, 20054(b)
    
    
    Amended and Restated Certificate and Agreement of
Limited Partnership for Atlas America Series
27-2006 L.P. (1)
    
    Previously filed in
our Form S-1 on
August 9, 20054(c)
    
    
    Drilling and Operating Agreement for Atlas America
Series 27-2006 L.P.
    
    Previously filed in our Form S-1 on
August 9, 200523.1
    
    
    Consent of Wright and Company, Inc.31.1
    
    

Rule 13a-14(a)/15(d)-14(a) Certification31.2
    
    

Rule 13a-14(a)/15(d)-14(a) Certification32.1
    
    
    Section 1350 Certification32.2
    
    
    Section 1350 Certification99.1
    
    
    Summary Reserve Report
 (1)
    
    Filed on April 30, 2007 in the Form S-1 Registration Statement dated April 30, 2007, File No. 0-52615  41




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##### Table of Contents



SIGNATURES
   Date:  March 30, 2010
    Atlas Resources, LLC, Managing General PartnerBy:
    /s/ Freddie M. KotekFreddie M. Kotek, Chairman of the Board of Directors, 
Chief Executive Officer and President  Date:  March 30, 2010
    By:
    /s/ Freddie M. KotekFreddie M. Kotek, Chairman of the Board of Directors, 
Chief Executive Officer and PresidentDate:  March 30, 2010
    By:
    /s/ Frank P. CarolasFrank P. Carolas, Executive Vice President  Land and GeologyDate:  March 30, 2010
    By:
    /s/ Jeffrey C. SimmonsJeffrey C. Simmons, Executive Vice President  OperationsDate:  March 30, 2010
    By:
    /s/ Sean P. McGrathSean P. McGrath, Chief Accounting OfficerDate:  March 30, 2010
    By:
    /s/ Matthew A. JonesMatthew A. Jones, Chief Financial Officer Supplemental information to be furnished with reports filed pursuant to Section 15(d) of the
Exchange Act by Non-reporting Issuers
   42