Exhibit 99.1
NEWS RELEASE
CONTACT: | Brian J. Begley | |
Vice President - Investor Relations | ||
Atlas Energy, L.P. | ||
(877) 280-2857 | ||
(215) 405-2718 (fax) |
ATLAS ENERGY, L.P. REPORTS OPERATING AND FINANCIAL RESULTS
FOR THE THIRD QUARTER 2012
Philadelphia, PA – October 31, 2012 - Atlas Energy, L.P. (NYSE: ATLS) (“Atlas Energy” or “ATLS”) today reported operating and financial results for the third quarter 2012.
• | ATLS declared a cash distribution of $0.27 per limited partner unit for the third quarter 2012. The third quarter 2012 distribution represents a $0.02 per unit increase, or 8%, over the second quarter 2012 and a 13% increase over the prior year quarter. The third quarter 2012 ATLS distribution is payable November 19, 2012 to holders of record as of November 5, 2012. |
• | Atlas Energy’s E&P subsidiary, Atlas Resource Partners, L.P. (NYSE: ARP), reached record average net production of 96.3 Mmcfed for the third quarter 2012, a 54% increase from the sequential quarter and over a 175% increase from the prior year quarter. |
• | In September 2012, ARP acquired the following for approximately $40 million from Equal Energy, Ltd. (NYSE: EQU), its joint venture partner in the Mississippi Lime formation in Oklahoma: the remaining 50% interest in Equal’s approximately 8,500 net undeveloped acres in the core of the oil & liquids rich Mississippi Lime play in northwestern Oklahoma, approximately 8 Mmcfe/d of net production in the Mississippi Lime region and substantial salt water disposal infrastructure. ARP now controls approximately 20,000 net acres in the play and plans to add a second rig by the end of 2012. |
• | Atlas Pipeline Partners, L.P. (NYSE: APL), Atlas Energy’s midstream subsidiary, announced record processing volumes at each of its systems, reaching a total of 769.0 Mmcfd and natural gas liquids (NGL) production of 56,363 bpd for the third quarter 2012. |
Edward E. Cohen, Chief Executive Officer of Atlas Energy, stated, “ATLS’s success reflects the success of both of its subsidiaries — ARP and APL. ARP is achieving record production and benefitting from its recent acquisitions. APL is rapidly and successfully expanding organically. As a result, ATLS is anticipating near-term substantial increases in distributable cash flow.”
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Financial Results
• | On October 25, 2012, ARP increased its quarterly cash distribution to $0.43 per unit for the third quarter 2012, which is payable November 14, 2012 to holders of record as of November 5, 2012. ATLS earned approximately $9.4 million of cash distributions based upon ARP’s recently announced third quarter 2012 distribution. |
• | On October 24, 2012, APL declared an increased distribution for the third quarter of 2012 of $0.57 per common limited partner unit to holders of record on November 7, 2012, which will be paid on November 14, 2012. ATLS earned approximately $5.7 million of cash distributions based upon APL’s recently announced third quarter 2012 distribution. |
• | On a GAAP basis, net loss attributable to limited partners was $11.4 million for the third quarter 2012 compared to net income of $7.1 million for the prior year comparable period. The loss for the third quarter 2012 is due primarily to Atlas Energy’s $4.3 million of non-cash stock compensation expense, and its ownership interest in ARP, which recognized a $7.7 million estimated expense regarding its reconciliation process with Chevron Corporation (“Chevron”) over certain liabilities assumed in the February 2011 transaction, as well as APL’s $18.9 million non-cash mark-to-market loss on derivative contracts. The net income in the prior year quarter was primarily attributable to ATLS’ ownership interest in APL’s $23.8 million non-cash mark-to-market gain on derivative contracts and ARP’s recognition of $6.2 million of fees recognized related to the transition service agreement with Chevron. Please see the reconciliation of GAAP net income (loss) to Adjusted EBITDA and distributable cash flow in the financial tables of this release for further information. |
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Recent Events
Atlas Resource’s Acquisition of Mississippi Lime Acreage from Equal Energy
On September 24, 2012, ARP entered into and simultaneously closed an agreement with Equal Energy, Ltd. (“Equal”) (NYSE: EQU; TSX: EQU) to acquire the following for approximately $40 million: the remaining 50% interest in Equal’s approximately 8,500 net undeveloped acres in the core of the oil & liquids rich Mississippi Lime play in northwestern Oklahoma, approximately 8 Mmcfe/d of net production in the Mississippi Lime region and substantial salt water disposal infrastructure. This transaction increases ARP’s position in the Mississippi Lime to approximately 20,000 net acres. The acreage position ARP has acquired in the Mississippi Lime is located in Alfalfa, Garfield and Grant Counties, Oklahoma and is almost entirely held by existing production. ARP will be able to increase its drilling activity in the play at its discretion going forward, and ARP intends to activate a second rig in the Mississippi Lime by the end of 2012. ARP financed this transaction with available borrowings under its revolving credit facility.
Atlas Pipeline’s Mid-Continent Expansion Projects
In September 2012, APL brought online its new cryogenic, 200 MMcfd expansion of their WestOK processing facility (“Waynoka II”). The new Waynoka II facility is currently operating at over 60% capacity, and this expansion brings total processing capacity at WestOK to 458 Mmcfd. Also, APL continues construction on the WestTX Driver Plant expansion, which is comprised of an additional 200 Mmcfd of processing capacity at the system. The first phase which comprises 100 Mmcf/d in capacity is scheduled to be in service in the first quarter 2013.
Atlas Pipeline Bond Offering
On September 28, 2012, APL completed a private offering of $325 million 6.625% senior notes due in 2020. APL used the net proceeds of approximately $320 million from the offering to repay a portion of outstanding borrowings under its revolving credit facility. As of September 30, 2012, APL had cash and available borrowing capacity on its revolving credit facility of approximately $520.1 million.
Atlas Resource Third Quarter 2012 Highlights
• | ARP’s average net daily production for the third quarter 2012 was 96.3 Mmcfed, an increase of approximately 33.7 Mmcfed, or 54%, compared with the second quarter 2012. The increase was primarily due to the acquisition of Titan Operating, LLC (“Titan”) in the Barnett Shale in July 2012, a full quarter’s volume from ARP’s initial acquisition in the Barnett Shale in April 2012, and additional legacy Marcellus Shale wells connected in southwestern Pennsylvania during the quarter. |
• | During the third quarter 2012, ARP continued drilling on initial locations in the oil & natural gas liquids (NGL) rich Mississippi Lime basin in northwestern Oklahoma. Two wells in ARP’s recently expanded Mississippi Lime position have been completed and are currently producing into a sales line, and one well is awaiting completion. ARP also drilled six wells this quarter in Hood County, Texas in the wet gas window of its Barnett Shale position. An additional two wells in the wet gas region of Tarrant County, Texas were also turned into line. |
ATLS owns 100% of the general partner Class A units and the incentive distribution rights, and a 52% common limited partner interest in ARP. ATLS’ financial results are presented on a consolidated basis with those of ARP. Non-controlling interests in ARP are reflected as income (expense) in ATLS’ consolidated combined statements of operations and as a component of partners’ capital on its consolidated combined balance sheets. A consolidating combined statement of operations and balance sheet have also been provided in the financial tables to this release for the comparable periods presented. Please refer to the ARP third quarter 2012 earnings release for additional details on its financial results.
Atlas Pipeline Third Quarter 2012 Highlights
• | During the third quarter 2012, APL operated near or at nameplate capacity on all of its gathering and processing systems in the Mid Continent. APL processed an average of approximately 769 Mmcfd of natural gas in the third quarter 2012 amongst its WestOK, WestTX and Velma systems, 36% higher than the prior year comparable quarter’s volumes. APL again attained record high volumes over 56,300 bbl per day of natural gas liquids generated from APL’s three processing systems in Oklahoma and Texas. |
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ATLS owns a 2.0% general partner interest, all of the incentive distribution rights, and a 10.5% common limited partner interest in APL. ATLS’ financial results are presented on a consolidated basis with those of APL. Non-controlling interests in APL are reflected as income (expense) in ATLS’ consolidated combined statements of operations and as a component of partners’ capital on its consolidated combined balance sheets. A consolidating combined statement of operations and balance sheet have also been provided in the financial tables to this release for the comparable periods presented. Please refer to the APL third quarter 2012 earnings release for additional details on its financial results.
Corporate Expenses
• | Cash general and administrative expense, excluding amounts attributable to APL and ARP, was $1.4 million for the third quarter 2012, a $0.7 million decrease from the second quarter 2012 due to the timing of third party costs. Please refer to the consolidating combined statements of operations provided in the financial tables of this release. |
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Interested parties are invited to access the live webcast of an investor call with management regarding Atlas Energy, L.P.’s third quarter 2012 results on Thursday, November 1, 2012 at 9:00 am ET by going to theInvestor Relations section of Atlas Energy’s website at www.atlasenergy.com. For those unavailable to listen to the live broadcast, the replay of the webcast will be available following the live call on the Atlas Energy website and telephonically beginning at 11:00 a.m. ET on November 1, 2012 by dialing 888-286-8010, passcode: 31065841.
Atlas Energy, L.P. (NYSE: ATLS) is a master limited partnership which owns all of the general partner Class A units and incentive distribution rights and an approximate 52% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P. Additionally, Atlas Energy owns and operates the general partner of its midstream oil & gas subsidiary, Atlas Pipeline Partners, L.P., through all of the general partner interest, all the incentive distribution rights and an approximate 11% limited partner interest. For more information, please visit our website atwww.atlasenergy.com, or contact Investor Relations atInvestorRelations@atlasenergy.com.
Atlas Resource Partners, L.P. (NYSE: ARP)is an exploration & production master limited partnership which owns an interest in over 9,900 producing natural gas and oil wells, primarily in Appalachia and the Barnett Shale in Texas. ARP is also the largest sponsor of natural gas and oil investment partnerships in the U.S. For more information, please visit our website atwww.atlasresourcepartners.com, or contact Investor Relations atInvestorRelations@atlasenergy.com.
Atlas Pipeline Partners, L.P. (NYSE: APL) is active in the gathering and processing segments of the midstream natural gas industry. In the midcontinent region of Oklahoma, southern Kansas, and northern and western Texas, APL owns and operates nine active gas processing plants as well as approximately 9,700 miles of active intrastate gas gathering pipeline. APL also has a 20% interest in West Texas LPG Pipeline Limited Partnership, which is operated by Chevron Corporation. For more information, visit the Partnership’s website atwww.atlaspipeline.com or contact IR@atlaspipeline.com.
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements that involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. ATLS cautions readers that any forward-looking information is not a guarantee of future performance. Such forward-looking statements include, but are not limited to, statements about future financial and operating results, resource potential, ATLS’ plans, objectives, expectations and intentions and other statements that are not historical facts. Risks, assumptions and uncertainties that could cause actual results to materially differ from the forward-looking statements include, but are not limited to, those associated with general economic and business conditions; changes in commodity prices; changes in the costs and results of drilling operations; uncertainties about estimates of reserves and resource potential; inability to obtain capital needed for operations; ATLS’ level of indebtedness; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax consequences of business transactions; and other risks, assumptions and uncertainties detailed from time to time in ATLS’ reports filed with the U.S. Securities and Exchange Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Forward-looking statements speak only as of the date hereof, and ATLS assumes no obligation to update such statements, except as may be required by applicable law.
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ATLAS ENERGY, L.P.
CONSOLIDATED COMBINED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per unit data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues: | ||||||||||||||||
Gas and oil production | $ | 24,699 | $ | 16,305 | $ | 61,323 | $ | 51,654 | ||||||||
Well construction and completion | 36,317 | 35,657 | 92,277 | 64,336 | ||||||||||||
Gathering and processing | 298,024 | 357,620 | 859,786 | 983,572 | ||||||||||||
Administration and oversight | 4,440 | 2,337 | 8,586 | 5,073 | ||||||||||||
Well services | 5,086 | 4,910 | 15,344 | 15,051 | ||||||||||||
Gain (loss) on mark-to-market derivatives(2) | (18,907 | ) | 23,760 | 36,905 | 8,952 | |||||||||||
Other, net | 5,270 | 890 | 8,575 | 26,657 | ||||||||||||
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Total revenues | 354,929 | 441,479 | 1,082,796 | 1,155,295 | ||||||||||||
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Costs and expenses: | ||||||||||||||||
Gas and oil production | 7,295 | 3,990 | 16,247 | 11,953 | ||||||||||||
Well construction and completion | 31,581 | 30,449 | 79,882 | 54,754 | ||||||||||||
Gathering and processing | 245,230 | 301,625 | 710,827 | 832,080 | ||||||||||||
Well services | 2,232 | 2,043 | 7,076 | 6,077 | ||||||||||||
General and administrative(1) | 33,991 | 18,617 | 108,846 | 57,046 | ||||||||||||
Estimated expense on Chevron transaction | 7,670 | — | 7,670 | — | ||||||||||||
Depreciation, depletion and amortization | 37,079 | 27,541 | 99,563 | 81,518 | ||||||||||||
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Total costs and expenses | 365,078 | 384,265 | 1,030,111 | 1,043,428 | ||||||||||||
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Operating income (loss) | (10,149 | ) | 57,214 | 52,685 | 111,867 | |||||||||||
Gain (loss) on asset sales and disposal | 2 | 8 | (7,019 | ) | 255,722 | |||||||||||
Interest expense(1) | (11,245 | ) | (6,315 | ) | (30,630 | ) | (30,960 | ) | ||||||||
Loss on early extinguishment of debt | — | — | — | (19,574 | ) | |||||||||||
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Income (loss) from continuing operations | (21,392 | ) | 50,907 | 15,036 | 317,055 | |||||||||||
Loss from discontinued operations | — | — | — | (81 | ) | |||||||||||
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Net income (loss) | (21,392 | ) | 50,907 | 15,036 | 316,974 | |||||||||||
(Income) loss attributable to non-controlling interests | 9,982 | (43,794 | ) | (52,574 | ) | (263,097 | ) | |||||||||
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Net income (loss) after non-controlling interests | (11,410 | ) | 7,113 | (37,538 | ) | 53,877 | ||||||||||
Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition)(1) | — | — | — | (4,711 | ) | |||||||||||
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Net income (loss) attributable to common limited partners | $ | (11,410 | ) | $ | 7,113 | $ | (37,538 | ) | $ | 49,166 | ||||||
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Net income (loss) attributable to common limited partners per unit – basic: | ||||||||||||||||
Income (loss) from continuing operations attributable to common limited partners | $ | (0.22 | ) | $ | 0.13 | $ | (0.73 | ) | $ | 1.02 | ||||||
Loss from discontinued operations attributable to common limited partners | — | — | — | — | ||||||||||||
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Net income (loss) attributable to common limited partners | $ | (0.22 | ) | $ | 0.13 | $ | (0.73 | ) | $ | 1.02 | ||||||
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Net income (loss) attributable to common limited partners per unit – diluted: | ||||||||||||||||
Income (loss) from continuing operations attributable to common limited partners | $ | (0.22 | ) | $ | 0.13 | $ | (0.73 | ) | $ | 0.99 | ||||||
Loss from discontinued operations attributable to common limited partners | — | — | — | — | ||||||||||||
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Net income (loss) attributable to common limited partners | $ | (0.22 | ) | $ | 0.13 | $ | (0.73 | ) | $ | 0.99 | ||||||
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Weighted average common limited partner units outstanding: | ||||||||||||||||
Basic | 51,335 | 51,257 | 51,316 | 47,212 | ||||||||||||
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Diluted | 51,335 | 53,100 | 51,316 | 48,488 | ||||||||||||
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Net income (loss) attributable to common limited partners: | ||||||||||||||||
Income (loss) from continuing operations | $ | (11,410 | ) | $ | 7,113 | $ | (37,538 | ) | $ | 49,176 | ||||||
Loss from discontinued operations | — | — | — | (10 | ) | |||||||||||
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Net income (loss) attributable to common limited partners | $ | (11,410 | ) | $ | 7,113 | $ | (37,538 | ) | $ | 49,166 | ||||||
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(1) | In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the exploration and production business acquired from Chevron (the “Transferred Business”) for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods. |
(2) | Consists principally of hydrocarbon derivative gains / (losses) that relate to the operating activities of ATLS’s consolidated subsidiary, APL. The underlying hydrocarbon derivatives do not represent present or potential future obligations of ATLS. |
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ATLAS ENERGY, L.P.
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands)
September 30, 2012 | December 31, 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 33,255 | $ | 77,376 | ||||
Accounts receivable | 139,279 | 136,853 | ||||||
Current portion of derivative asset | 32,738 | 15,447 | ||||||
Subscriptions receivable | 8,495 | 34,455 | ||||||
Prepaid expenses and other | 17,956 | 24,779 | ||||||
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Total current assets | 231,723 | 288,910 | ||||||
Property, plant and equipment, net | 2,825,201 | 2,093,283 | ||||||
Intangible assets, net | 106,861 | 104,777 | ||||||
Investment in joint venture | 85,714 | 86,879 | ||||||
Goodwill, net | 31,784 | 31,784 | ||||||
Long-term derivative asset | 22,339 | 30,941 | ||||||
Other assets, net | 59,744 | 48,197 | ||||||
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$ | 3,363,366 | $ | 2,684,771 | |||||
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LIABILITIES AND PARTNERS’ CAPITAL | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 11,103 | $ | 2,085 | ||||
Accounts payable | 102,176 | 93,554 | ||||||
Liabilities associated with drilling contracts | 5,550 | 71,719 | ||||||
Accrued producer liabilities | 71,884 | 88,096 | ||||||
Current portion of derivative liability | 280 | — | ||||||
Current portion of derivative payable to Drilling Partnerships | 13,363 | 20,900 | ||||||
Accrued interest | 9,834 | 1,629 | ||||||
Accrued well drilling and completion costs | 50,169 | 17,585 | ||||||
Accrued liabilities | 78,757 | 61,653 | ||||||
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Total current liabilities | 343,116 | 357,221 | ||||||
Long-term debt, less current portion | 997,510 | 522,055 | ||||||
Long-term derivative liability | 4,051 | — | ||||||
Long-term derivative payable to Drilling Partnerships | 4,483 | 15,272 | ||||||
Asset retirement obligation and other | 62,300 | 46,142 | ||||||
Commitments and contingencies | ||||||||
Partners’ Capital: | ||||||||
Common limited partners’ interests | 454,725 | 554,999 | ||||||
Accumulated other comprehensive income | 4,490 | 29,376 | ||||||
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459,215 | 584,375 | |||||||
Non-controlling interests | 1,492,691 | 1,159,706 | ||||||
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Total partners’ capital | 1,951,906 | 1,744,081 | ||||||
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$ | 3,363,366 | $ | 2,684,771 | |||||
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ATLAS ENERGY, L.P.
Financial and Operating Highlights
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2012 | 2011(1) | 2012 | 2011(1) | |||||||||||||
Net income (loss) attributable to common limited partners per unit - basic | $ | (0.22 | ) | $ | 0.13 | $ | (0.73 | ) | $ | 1.02 | ||||||
Distributable cash flow per unit(2)(3) | $ | 0.27 | $ | 0.39 | $ | 0.78 | $ | 0.99 | ||||||||
Cash distributions paid per unit(4) | $ | 0.27 | $ | 0.24 | $ | 0.77 | $ | 0.57 | ||||||||
ATLAS RESOURCE: | ||||||||||||||||
Production volume:(5)(6) | ||||||||||||||||
Natural gas (Mcfd) | 88,208 | 30,629 | 60,531 | 31,687 | ||||||||||||
Oil (Bpd) | 277 | 294 | 291 | 297 | ||||||||||||
Natural gas liquids (Bpd) | 1,067 | 408 | 652 | 448 | ||||||||||||
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Total (Mcfed) | 96,275 | 34,845 | 66,189 | 36,158 | ||||||||||||
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Average sales prices:(6) | ||||||||||||||||
Natural gas (per Mcf) (7) | $ | 3.01 | $ | 5.10 | $ | 3.42 | $ | 5.24 | ||||||||
Oil (per Bbl)(8) | $ | 87.86 | $ | 83.34 | $ | 95.70 | $ | 90.65 | ||||||||
Natural gas liquids (per gallon) | $ | 0.61 | $ | 1.18 | $ | 0.79 | $ | 1.15 | ||||||||
Production costs:(6)(9) | ||||||||||||||||
Lease operating expenses per Mcfe(10) | $ | 0.75 | $ | 1.12 | $ | 0.80 | $ | 1.05 | ||||||||
Production taxes per Mcfe | 0.13 | 0.11 | 0.12 | 0.10 | ||||||||||||
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Total production costs per Mcfe(10) | $ | 0.88 | $ | 1.23 | $ | 0.92 | $ | 1.15 | ||||||||
ATLAS PIPELINE: | ||||||||||||||||
Production volume:(6) | ||||||||||||||||
Gathered gas volume(Mcfd) | 860,026 | 621,476 | 780,426 | 575,292 | ||||||||||||
Processed gas volume (Mcfd) | 768,988 | 566,652 | 696,445 | 529,750 | ||||||||||||
Residue gas volume (Mcfd) | 658,846 | 466,437 | 579,771 | 431,204 | ||||||||||||
Processed NGL volume (Bpd) | 56,363 | 52,977 | 59,557 | 52,617 | ||||||||||||
Condensate volume (Bpd) | 3,756 | 3,389 | 3,417 | 2,988 | ||||||||||||
Average sales prices:(6) | ||||||||||||||||
Natural gas (per Mcf) | $ | 2.60 | $ | 4.04 | $ | 2.39 | $ | 4.04 | ||||||||
Condensate (per Bbl) | $ | 86.65 | $ | 85.77 | $ | 90.07 | $ | 90.91 | ||||||||
Natural gas liquids (per gallon) | $ | 0.87 | $ | 1.27 | $ | 0.90 | $ | 1.21 |
(1) | In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods. |
(2) | A reconciliation from net income to distributable cash flow is provided in the financial tables of this release. |
(3) | Calculation consists of distributable cash flow divided by the weighted average common limited partner units outstanding of 51,335,000 and 51,257,000 for the three months ended September 30, 2012 and 2011, respectively, and 51,316,000 for the nine months ended September 30, 2012. For the nine months ended September 30, 2011, the weighted average common limited partner units outstanding of 51,242,000 utilized for the calculation is the weighted average common limited partner units outstanding for the period subsequent to February 17, 2011, the date of acquisition for the Transferred Business, which includes the 23.4 million common limited partner units issued as partial consideration for the acquisition. |
(4) | Represents the cash distributions declared per limited partner unit for the respective period and paid by ATLS within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. The nine months ended September 30, 2011 includes a cash distribution payment of $0.11 per limited partner unit for the 1st quarter 2011, which reflected a prorated cash distribution for the period from February 17, 2011, the date of acquisition for the Transferred Business, to March 31, 2011. |
(5) | Production quantities consist of the sum of (i) ARP’s proportionate share of production from wells in which it has a direct interest, based on ARP’s proportionate net revenue interest in such wells, and (ii) ARP’s proportionate share of production from wells owned by the investment partnerships in which ARP has an interest, based on its equity interest in each such partnership and based on each partnership’s proportionate net revenue interest in these wells. |
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(6) | “Mcf” and “Mcfd” represent thousand cubic feet and thousand cubic feet per day; “Mcfe” and “Mcfed” represent thousand cubic feet equivalents and thousand cubic feet equivalents per day, and “Bbl” and “Bpd” represent barrels and barrels per day. Barrels are converted to Mcfe using the ratio of six Mcf’s to one barrel. |
(7) | ARP’s average sales price for natural gas before the effects of financial hedging was $2.46 per Mcf and $4.90 per Mcf for the three months ended September 30, 2012 and 2011, respectively, and $2.60 per Mcf and $4.69 per Mcf for the nine months ended September 30, 2012 and 2011, respectively. These amounts exclude the impact of subordination of production revenues to investor partners within the investor partnerships. Including the effects of subordination, average natural gas sales prices were $2.46 per Mcf ($1.91 per Mcf before the effects of financial hedging) and $4.33 per Mcf ($4.13 per Mcf before the effects of financial hedging) for the three months ended September 30, 2012 and 2011, respectively, and $2.88 per Mcf ($2.07 per Mcf before the effects of financial hedging) and $4.44 per Mcf ($3.89 per Mcf before the effects of financial hedging) for the nine months ended September 30, 2012 and 2011, respectively. |
(8) | ARP’s average sales price for oil before the effects of financial hedging was $84.30 per barrel and $81.85 per barrel for the three months ended September 30, 2012 and 2011, respectively, and $93.38 per barrel and $89.79 per barrel for the nine months ended September 30, 2012 and 2011, respectively. |
(9) | Production costs include labor to operate the wells and related equipment, repairs and maintenance, materials and supplies, property taxes, severance taxes, insurance and production overhead. These amounts exclude the effects of ARP’s proportionate share of lease operating expenses associated with subordination of production revenue to investor partners within ARP’s investor partnerships. Including the effects of these costs, lease operating expenses per Mcfe were $0.45 per Mcfe ($0.58 per Mcfe for total production costs) and $0.73 per Mcfe ($0.84 per Mcfe for total production costs) for the three months ended September 30, 2012 and 2011, respectively, and $0.51 per Mcfe ($0.63 per Mcfe for total production costs) and $0.71 per Mcfe ($0.82 per Mcfe for total production costs) for the nine months ended September 30, 2012 and 2011, respectively. |
(10) | The amount for the nine months ended September 30, 2011 was adjusted to reflect current period classification resulting from the misclassification of lease operating production expenses and transportation production expenses. |
11
ATLAS ENERGY, L.P.
Financial Information
(unaudited; in thousands except per unit amounts)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2012 | 2011(1) | 2012 | 2011(1) | |||||||||||||
Adjusted EBITDA and Distributable Cash Flow Summary: | ||||||||||||||||
Atlas Resource Cash Distributions Earned(2): | ||||||||||||||||
Limited Partner Units | $ | 9,013 | $ | — | $ | 19,913 | $ | — | ||||||||
Class A Units (2%) | 350 | — | 677 | — | ||||||||||||
Incentive Distribution Rights | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Atlas Resource Cash Distributions Earned(2) | 9,363 | — | 20,590 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
per limited partner unit | $ | 0.43 | $ | — | $ | 0.95 | $ | — | ||||||||
Atlas Pipeline Cash Distributions Earned(2): | ||||||||||||||||
Limited Partner Units | 3,280 | 3,107 | 9,724 | 8,121 | ||||||||||||
General Partner 2% Interest | 664 | 535 | 1,961 | 1,466 | ||||||||||||
Incentive Distribution Rights | 1,745 | 1,304 | 4,885 | 1,776 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Atlas Pipeline Cash Distributions Earned(2) | 5,689 | 4,946 | 16,570 | 11,363 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
per limited partner unit | $ | 0.57 | $ | 0.54 | $ | 1.69 | $ | 1.41 | ||||||||
Total Cash Distributions Earned | 15,052 | 4,946 | 37,160 | 11,363 | ||||||||||||
E&P Operations Adjusted EBITDA prior to spinoff on March 5, 2012(3) | — | 17,304 | 9,111 | 39,617 | ||||||||||||
Cash general and administrative expenses(4) | (1,394 | ) | (311 | ) | (5,910 | ) | (7,076 | ) | ||||||||
Other, net | 537 | 677 | 983 | 14,987 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Adjusted EBITDA(5) | 14,195 | 22,616 | 41,344 | 58,891 | ||||||||||||
Cash interest expense(6) | (80 | ) | (208 | ) | (253 | ) | (524 | ) | ||||||||
Maintenance capital expenditures(3) | — | (2,300 | ) | (1,231 | ) | (7,533 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Distributable Cash Flow(5) | $ | 14,115 | $ | 20,108 | $ | 39,860 | $ | 50,834 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Distributions Paid(7) | $ | 13,866 | $ | 12,305 | $ | 39,527 | $ | 29,216 | ||||||||
per limited partner unit | $ | 0.27 | $ | 0.24 | $ | 0.77 | $ | 0.57 | ||||||||
Distribution coverage ratio | 1.0x | 1.6x | 1.0x | 1.7x | ||||||||||||
Reconciliation of non-GAAP measures to net income (loss)(5): | ||||||||||||||||
Distributable cash flow | $ | 14,115 | $ | 20,108 | $ | 39,860 | $ | 50,834 | ||||||||
Distributable cash flow of Transferred Business as of and prior to February 17, 2011 (the date of acquisition)(1) | — | — | — | 8,261 | ||||||||||||
E&P Operations EBITDA prior to spinoff on March 5, 2012(3) | — | (17,304 | ) | (9,111 | ) | (39,617 | ) | |||||||||
E&P Operations EBITDA of Transferred Business as of and prior to February 17, 2011(1) | — | — | — | (8,510 | ) | |||||||||||
Atlas Resource net loss attributable to ATLS common limited partners | (6,845 | ) | 9,400 | (23,444 | ) | 24,640 | ||||||||||
Atlas Resource cash distributions earned by ATLS(2) | (9,363 | ) | — | (20,590 | ) | — | ||||||||||
Atlas Pipeline net income attributable to ATLS common limited partners | 392 | 6,465 | 12,842 | 37,555 | ||||||||||||
Atlas Pipeline cash distributions earned by ATLS(2) | (5,689 | ) | (4,946 | ) | (16,570 | ) | (11,363 | ) | ||||||||
Non-recurring spinoff and acquisition costs | — | — | (8,370 | ) | (2,087 | ) | ||||||||||
Amortization of deferred finance costs | (50 | ) | (171 | ) | (179 | ) | (5,356 | ) | ||||||||
Non-cash stock compensation expense | (4,327 | ) | (4,319 | ) | (13,626 | ) | (8,931 | ) | ||||||||
Maintenance capital expenditures(3) | — | 2,300 | 1,231 | 7,533 | ||||||||||||
Other non-cash adjustments | 357 | (4,420 | ) | 419 | 918 | |||||||||||
Income attributable to non-controlling interests | (9,982 | ) | 43,794 | 52,574 | 263,097 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income (loss) | $ | (21,392 | ) | $ | 50,907 | $ | 15,036 | $ | 316,974 | |||||||
|
|
|
|
|
|
|
|
(1) | In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods. |
12
(2) | Represents the cash distribution paid by ARP and APL within 45 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. |
(3) | Represents the E&P Operations Adjusted EBITDA generated and maintenance capital expenditures incurred by ATLS on a stand-alone basis prior to the transfer of its E&P assets to ARP on March 5, 2012. |
(4) | Excludes non-cash stock-compensation expense, non-recurring spinoff costs and non-recurring acquisition costs incurred, including amounts in connection with the acquisition of the Transferred Business. |
(5) | Adjusted EBITDA and distributable cash flow are non-GAAP (generally accepted accounting principles) financial measures under the rules of the Securities and Exchange Commission. Management of ATLS believes that adjusted EBITDA and distributable cash flow provide additional information for evaluating ATLS’s performance, among other things. These measures are widely used by commercial banks, investment bankers, rating agencies and investors in evaluating performance relative to peers and pre-set performance standards. Adjusted EBITDA is also a financial measurement that, with certain negotiated adjustments, is utilized within ATLS’s financial covenants under its credit facility. Adjusted EBITDA and distributable cash flow are not measures of financial performance under GAAP and, accordingly, should not be considered as a substitute for net income, operating income, or cash flows from operating activities in accordance with GAAP. |
(6) | Excludes non-cash amortization of deferred financing costs. |
(7) | Represents the cash distribution paid within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. |
13
ATLAS ENERGY, L.P.
CAPITALIZATION INFORMATION
(unaudited; in thousands)
September 30, 2012 | ||||||||||||||||
Atlas Energy | Atlas Resource | Atlas Pipeline | Consolidated | |||||||||||||
Total debt | $ | — | $ | 222,000 | $ | 786,613 | $ | 1,008,613 | ||||||||
Less: Cash | (8,824 | ) | (24,266 | ) | (165 | ) | (33,255 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total net debt /(cash) | (8,824 | ) | 197,734 | 786,448 | 975,358 | |||||||||||
Partners’ capital | 459,215 | 708,748 | 1,224,060 | 1,951,906 | (1) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total capitalization | $ | 450,391 | $ | 906,482 | $ | 2,010,508 | $ | 2,927,264 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ratio of net debt to capitalization | 0.00x |
(1) | Net of eliminated amounts. |
December 31, 2011 | ||||||||||||||||
Atlas Energy | Atlas Resource | Atlas Pipeline | Consolidated | |||||||||||||
Total debt | $ | — | $ | — | $ | 524,140 | $ | 524,140 | ||||||||
Less: Cash | (22,500 | ) | (54,708 | ) | (168 | ) | (77,376 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total net debt /(cash) | (22,500 | ) | (54,708 | ) | 523,972 | 446,764 | ||||||||||
Partners’ capital | 584,375 | 457,175 | 1,236,228 | 1,744,081 | (2) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total capitalization | $ | 561,875 | $ | 402,467 | $ | 1,760,200 | $ | 2,190,845 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ratio of net debt to capitalization | 0.00x |
(2) | Net of eliminated amounts. |
14
ATLAS ENERGY, L.P.
CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Three Months Ended September 30, 2012
Atlas Energy | Atlas Resource | Atlas Pipeline | Eliminations | Consolidated Combined | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Gas and oil production | $ | — | $ | 24,699 | $ | — | $ | — | $ | 24,699 | ||||||||||
Well construction and completion | — | 36,317 | — | — | 36,317 | |||||||||||||||
Gathering and processing | — | 4,134 | 293,890 | — | 298,024 | |||||||||||||||
Administration and oversight | — | 4,440 | — | — | 4,440 | |||||||||||||||
Well services | — | 5,086 | — | — | 5,086 | |||||||||||||||
Loss on mark-to-market derivatives | — | — | (18,907 | ) | — | (18,907 | ) | |||||||||||||
Other, net | 894 | 67 | 4,309 | — | 5,270 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total revenues | 894 | 74,743 | 279,292 | — | 354,929 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Costs and expenses: | ||||||||||||||||||||
Gas and oil production | — | 7,295 | — | — | 7,295 | |||||||||||||||
Well construction and completion | — | 31,581 | — | — | 31,581 | |||||||||||||||
Gathering and processing | — | 4,558 | 240,672 | — | 245,230 | |||||||||||||||
Well services | — | 2,232 | — | — | 2,232 | |||||||||||||||
General and administrative | 5,721 | 16,147 | 12,123 | — | 33,991 | |||||||||||||||
Estimated expense on Chevron transaction | — | 7,670 | — | — | 7,670 | |||||||||||||||
Depreciation, depletion and amortization | — | 13,918 | 23,161 | — | 37,079 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total costs and expenses | 5,721 | 83,401 | 275,956 | — | 365,078 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income (loss) | (4,827 | ) | (8,658 | ) | 3,336 | — | (10,149 | ) | ||||||||||||
Gain on asset sales and disposal | — | 2 | — | — | 2 | |||||||||||||||
Interest expense | (130 | ) | (1,423 | ) | (9,692 | ) | — | (11,245 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Loss from continuing operations | (4,957 | ) | (10,079 | ) | (6,356 | ) | — | (21,392 | ) | |||||||||||
Discontinued operations | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net loss | (4,957 | ) | (10,079 | ) | (6,356 | ) | — | (21,392 | ) | |||||||||||
Income attributable to non-controlling interests | — | — | (1,511 | ) | 11,493 | 9,982 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net loss attributable to common limited partners | $ | (4,957 | ) | $ | (10,079 | ) | $ | (7,867 | ) | $ | 11,493 | $ | (11,410 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
15
ATLAS ENERGY, L.P.
CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Three Months Ended September 30, 2011
Atlas Energy | Atlas Resource(1) | Atlas Pipeline | Eliminations | Consolidated Combined(1) | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Gas and oil production | $ | — | $ | 16,305 | $ | — | $ | — | $ | 16,305 | ||||||||||
Well construction and completion | — | 35,657 | — | — | 35,657 | |||||||||||||||
Gathering and processing | — | 4,431 | 353,189 | — | 357,620 | |||||||||||||||
Administration and oversight | — | 2,337 | — | — | 2,337 | |||||||||||||||
Well services | — | 4,910 | — | — | 4,910 | |||||||||||||||
Gain on mark-to-market derivatives | — | — | 23,760 | — | 23,760 | |||||||||||||||
Other, net | (3,743 | ) | (50 | ) | 4,683 | — | 890 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total revenues | (3,743 | ) | 63,590 | 381,632 | — | 441,479 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Costs and expenses: | ||||||||||||||||||||
Gas and oil production | — | 3,990 | — | — | 3,990 | |||||||||||||||
Well construction and completion | — | 30,449 | — | — | 30,449 | |||||||||||||||
Gathering and processing | — | 4,880 | 296,745 | — | 301,625 | |||||||||||||||
Well services | — | 2,043 | — | — | 2,043 | |||||||||||||||
General and administrative | 4,630 | 4,757 | 9,230 | — | 18,617 | |||||||||||||||
Depreciation, depletion and amortization | — | 8,071 | 19,470 | — | 27,541 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total costs and expenses | 4,630 | 54,190 | 325,445 | — | 384,265 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income (loss) | (8,373 | ) | 9,400 | 56,187 | — | 57,214 | ||||||||||||||
Gain on asset sales and disposal | — | — | 8 | — | 8 | |||||||||||||||
Interest expense | (379 | ) | — | (5,936 | ) | — | (6,315 | ) | ||||||||||||
Loss on early extinguishment of debt | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income (loss) from continuing operations | (8,752 | ) | 9,400 | 50,259 | — | 50,907 | ||||||||||||||
Discontinued operations | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) | (8,752 | ) | 9,400 | 50,259 | — | 50,907 | ||||||||||||||
Income attributable to non-controlling interests | — | — | (1,760 | ) | (42,034 | ) | (43,794 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) after non-controlling interests | (8,752 | ) | 9,400 | 48,499 | (42,034 | ) | 7,113 | |||||||||||||
Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition(1)) | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) attributable to common limited partners | $ | (8,752 | ) | $ | 9,400 | $ | 48,499 | $ | (42,034 | ) | $ | 7,113 | ||||||||
|
|
|
|
|
|
|
|
|
|
(1) | In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods. |
16
ATLAS ENERGY, L.P.
CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Nine Months Ended September 30, 2012
Atlas Energy | Atlas Resource | Atlas Pipeline | Eliminations | Consolidated Combined | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Gas and oil production | $ | — | $ | 61,323 | $ | — | $ | — | $ | 61,323 | ||||||||||
Well construction and completion | — | 92,277 | — | — | 92,277 | |||||||||||||||
Gathering and processing | — | 10,311 | 849,475 | — | 859,786 | |||||||||||||||
Administration and oversight | — | 8,586 | — | — | 8,586 | |||||||||||||||
Well services | — | 15,344 | — | — | 15,344 | |||||||||||||||
Gain on mark-to-market derivatives | — | — | 36,905 | — | 36,905 | |||||||||||||||
Other, net | 1,402 | (4,952 | ) | 12,125 | — | 8,575 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total revenues | 1,402 | 182,889 | 898,505 | — | 1,082,796 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Costs and expenses: | ||||||||||||||||||||
Gas and oil production | — | 16,247 | — | — | 16,247 | |||||||||||||||
Well construction and completion | — | 79,882 | — | — | 79,882 | |||||||||||||||
Gathering and processing | — | 13,185 | 697,642 | — | 710,827 | |||||||||||||||
Well services | — | 7,076 | — | — | 7,076 | |||||||||||||||
General and administrative | 27,906 | 48,427 | 32,513 | — | 108,846 | |||||||||||||||
Estimated expense on Chevron transaction | — | 7,670 | — | — | 7,670 | |||||||||||||||
Depreciation, depletion and amortization | — | 33,848 | 65,715 | — | 99,563 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total costs and expenses | 27,906 | 206,335 | 795,870 | — | 1,030,111 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating income (loss) | (26,504 | ) | (23,446 | ) | 102,635 | — | 52,685 | |||||||||||||
Loss on asset sales and disposal | — | (7,019 | ) | — | — | (7,019 | ) | |||||||||||||
Interest expense | (432 | ) | (2,529 | ) | (27,669 | ) | — | (30,630 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income (loss) from continuing operations | (26,936 | ) | (32,994 | ) | 74,966 | — | 15,036 | |||||||||||||
Discontinued operations | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) | (26,936 | ) | (32,994 | ) | 74,966 | — | 15,036 | |||||||||||||
Income attributable to non-controlling interests | — | — | (4,108 | ) | (48,466 | ) | (52,574 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income (loss) attributable to common limited partners | $ | (26,936 | ) | $ | (32,994 | ) | $ | 70,858 | $ | (48,466 | ) | $ | (37,538 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
17
ATLAS ENERGY, L.P.
CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Nine Months Ended September 30, 2011
Atlas Energy | Atlas Resource(1) | Atlas Pipeline | Eliminations | Consolidated Combined(1) | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Gas and oil production | $ | — | $ | 51,654 | $ | — | $ | — | $ | 51,654 | ||||||||||
Well construction and completion | — | 64,336 | — | — | 64,336 | |||||||||||||||
Gathering and processing | — | 14,048 | 969,524 | — | 983,572 | |||||||||||||||
Administration and oversight | — | 5,073 | — | — | 5,073 | |||||||||||||||
Well services | — | 15,051 | — | — | 15,051 | |||||||||||||||
Gain on mark-to-market derivatives | — | — | 8,952 | — | 8,952 | |||||||||||||||
Other, net | 16,071 | (115 | ) | 10,701 | — | 26,657 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total revenues | 16,071 | 150,047 | 989,177 | — | 1,155,295 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Costs and expenses: | ||||||||||||||||||||
Gas and oil production | — | 11,953 | — | — | 11,953 | |||||||||||||||
Well construction and completion | — | 54,754 | — | — | 54,754 | |||||||||||||||
Gathering and processing | — | 16,377 | 815,703 | — | 832,080 | |||||||||||||||
Well services | — | 6,077 | — | — | 6,077 | |||||||||||||||
General and administrative | 17,954 | �� | 12,275 | 26,817 | — | 57,046 | ||||||||||||||
Depreciation, depletion and amortization | — | 24,019 | 57,499 | — | 81,518 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total costs and expenses | 17,954 | 125,455 | 900,019 | — | 1,043,428 | |||||||||||||||
|
|
|
|
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| |||||||||||
Operating income (loss) | (1,883 | ) | 24,592 | 89,158 | — | 111,867 | ||||||||||||||
Gain on asset sales and disposal | — | 48 | 255,674 | — | 255,722 | |||||||||||||||
Interest expense | (6,435 | ) | — | (24,525 | ) | — | (30,960 | ) | ||||||||||||
Loss on early extinguishment of debt | — | — | (19,574 | ) | — | (19,574 | ) | |||||||||||||
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| |||||||||||
Income (loss) from continuing operations | (8,318 | ) | 24,640 | 300,733 | — | 317,055 | ||||||||||||||
Discontinued operations | — | — | (81 | ) | — | (81 | ) | |||||||||||||
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Net income (loss) | (8,318 | ) | 24,640 | 300,652 | — | 316,974 | ||||||||||||||
Income attributable to non-controlling interests | — | — | (4,492 | ) | (258,605 | ) | (263,097 | ) | ||||||||||||
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Net income (loss) after non-controlling interests | (8,318 | ) | 24,640 | 296,160 | (258,605 | ) | 53,877 | |||||||||||||
Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition(1)) | — | (4,711 | ) | — | — | (4,711 | ) | |||||||||||||
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Net income (loss) attributable to common limited partners | $ | (8,318 | ) | $ | 19,929 | $ | 296,160 | $ | (258,605 | ) | $ | 49,166 | ||||||||
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(1) | In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods. |
18
ATLAS ENERGY, L.P.
CONDENSED CONSOLIDATING BALANCE SHEETS
(unaudited; in thousands)
September 30, 2012
Atlas Energy | Atlas Resource | Atlas Pipeline | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 8,824 | $ | 24,266 | $ | 165 | $ | — | $ | 33,255 | ||||||||||
Accounts receivable | 15 | 30,994 | 108,270 | — | 139,279 | |||||||||||||||
Receivable from (advances from) affiliates | 3,790 | (1,251 | ) | (2,539 | ) | — | — | |||||||||||||
Current portion of derivative asset | — | 6,518 | 26,220 | — | 32,738 | |||||||||||||||
Subscriptions receivable | — | 8,495 | — | — | 8,495 | |||||||||||||||
Prepaid expenses | 166 | 7,107 | 10,683 | — | 17,956 | |||||||||||||||
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| |||||||||||
Total current assets | 12,795 | 76,129 | 142,799 | — | 231,723 | |||||||||||||||
Property, plant and equipment, net | — | 1,016,110 | 1,809,091 | — | 2,825,201 | |||||||||||||||
Goodwill and intangible assets, net | — | 33,149 | 105,496 | — | 138,645 | |||||||||||||||
Long-term derivative asset | — | 5,144 | 17,195 | — | 22,339 | |||||||||||||||
Investment in joint venture | — | — | 85,714 | — | 85,714 | |||||||||||||||
Investment in subsidiaries | 440,117 | — | — | (440,117 | ) | — | ||||||||||||||
Other assets, net | 22,327 | 8,410 | 29,007 | — | 59,744 | |||||||||||||||
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| |||||||||||
$ | 475,239 | $ | 1,138,942 | $ | 2,189,302 | $ | (440,117 | ) | $ | 3,363,366 | ||||||||||
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LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 11,103 | $ | — | $ | 11,103 | ||||||||||
Accounts payable | 29 | 42,831 | 59,316 | — | 102,176 | |||||||||||||||
Liabilities associated with drilling contracts | — | 5,550 | — | — | 5,550 | |||||||||||||||
Accrued producer liabilities | — | — | 71,884 | — | 71,884 | |||||||||||||||
Current portion of derivative liability | — | 280 | — | — | 280 | |||||||||||||||
Current portion of derivative payable to Partnerships | — | 13,363 | — | — | 13,363 | |||||||||||||||
Accrued interest | — | 111 | 9,723 | — | 9,834 | |||||||||||||||
Accrued well drilling and completion costs | — | 50,169 | — | — | 50,169 | |||||||||||||||
Accrued liabilities | 14,581 | 32,928 | 31,248 | — | 78,757 | |||||||||||||||
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| |||||||||||
Total current liabilities | 14,610 | 145,232 | 183,274 | — | 343,116 | |||||||||||||||
Long-term debt, less current portion | — | 222,000 | 775,510 | — | 997,510 | |||||||||||||||
Long-term derivative liability | — | 4,051 | — | — | 4,051 | |||||||||||||||
Long-term derivative payable to Partnerships | — | 4,483 | — | — | 4,483 | |||||||||||||||
Asset retirement obligation and other | 1,414 | 54,428 | 6,458 | — | 62,300 | |||||||||||||||
Partners’ Capital: | ||||||||||||||||||||
Common limited partners’ interests | 454,725 | 700,104 | 1,249,231 | (1,949,335 | ) | 454,725 | ||||||||||||||
Accumulated other comprehensive income (loss) | 4,490 | 8,644 | (1,057 | ) | (7,587 | ) | 4,490 | |||||||||||||
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| |||||||||||
459,215 | 708,748 | 1,248,174 | (1,956,922 | ) | 459,215 | |||||||||||||||
Non-controlling interests | — | — | (24,114 | ) | 1,516,805 | 1,492,691 | ||||||||||||||
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| |||||||||||
Total partners’ capital | 459,215 | 708,748 | 1,224,060 | (440,117 | ) | 1,951,906 | ||||||||||||||
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| |||||||||||
$ | 475,239 | $ | 1,138,942 | $ | 2,189,302 | $ | (440,117 | ) | $ | 3,363,366 | ||||||||||
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19
ATLAS ENERGY, L.P.
CONDENSED CONSOLIDATING BALANCE SHEETS
(unaudited; in thousands)
December 31, 2011
Atlas Energy | Atlas Resource | Atlas Pipeline | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 22,500 | $ | 54,708 | $ | 168 | $ | — | $ | 77,376 | ||||||||||
Accounts receivable | 869 | 20,572 | 115,412 | — | 136,853 | |||||||||||||||
Receivable from (advances from) affiliates | 3,928 | (1,253 | ) | (2,675 | ) | — | — | |||||||||||||
Current portion of derivative asset | — | 13,802 | 1,645 | — | 15,447 | |||||||||||||||
Subscriptions receivable | — | 34,455 | — | — | 34,455 | |||||||||||||||
Prepaid expenses | 1,462 | 7,676 | 15,641 | — | 24,779 | |||||||||||||||
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| |||||||||||
Total current assets | 28,759 | 129,960 | 130,191 | — | 288,910 | |||||||||||||||
Property, plant and equipment, net | 4,571 | 520,883 | 1,567,829 | — | 2,093,283 | |||||||||||||||
Goodwill and intangible assets, net | — | 33,285 | 103,276 | — | 136,561 | |||||||||||||||
Long-term derivative asset | — | 16,127 | 14,814 | — | 30,941 | |||||||||||||||
Investment in joint venture | — | — | 86,879 | — | 86,879 | |||||||||||||||
Investment in subsidiaries | 533,697 | — | — | (533,697 | ) | — | ||||||||||||||
Other assets, net | 22,190 | 858 | 25,149 | — | 48,197 | |||||||||||||||
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| |||||||||||
$ | 589,217 | $ | 701,113 | $ | 1,928,138 | $ | (533,697 | ) | $ | 2,684,771 | ||||||||||
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| |||||||||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | 2,085 | $ | — | $ | 2,085 | ||||||||||
Accounts payable | 2,179 | 36,731 | 54,644 | — | 93,554 | |||||||||||||||
Liabilities associated with drilling contracts | — | 71,719 | — | — | 71,719 | |||||||||||||||
Accrued producer liabilities | — | — | 88,096 | — | 88,096 | |||||||||||||||
Current portion of derivative payable to Partnerships | — | 20,900 | — | — | 20,900 | |||||||||||||||
Accrued interest | 5 | — | 1,624 | — | 1,629 | |||||||||||||||
Accrued well drilling and completion costs | — | 17,585 | — | — | 17,585 | |||||||||||||||
Accrued liabilities | 2,418 | 35,952 | 23,283 | — | 61,653 | |||||||||||||||
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| |||||||||||
Total current liabilities | 4,602 | 182,887 | 169,732 | — | 357,221 | |||||||||||||||
Long-term debt, less current portion | — | — | 522,055 | — | 522,055 | |||||||||||||||
Long-term derivative payable to Partnerships | — | 15,272 | — | — | 15,272 | |||||||||||||||
Asset retirement obligation and other | 240 | 45,779 | 123 | — | 46,142 | |||||||||||||||
Partners’ Capital: | ||||||||||||||||||||
Common limited partners’ interests | 554,999 | 427,246 | 1,269,019 | (1,696,265 | ) | 554,999 | ||||||||||||||
Accumulated other comprehensive income (loss) | 29,376 | 29,929 | (4,390 | ) | (25,539 | ) | 29,376 | |||||||||||||
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| |||||||||||
584,375 | 457,175 | 1,264,629 | (1,721,804 | ) | 584,375 | |||||||||||||||
Non-controlling interests | — | — | (28,401 | ) | 1,188,107 | 1,159,706 | ||||||||||||||
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|
|
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| |||||||||||
Total partners’ capital | 584,375 | 457,175 | 1,236,228 | (533,697 | ) | 1,744,081 | ||||||||||||||
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| |||||||||||
$ | 589,217 | $ | 701,113 | $ | 1,928,138 | $ | (533,697 | ) | $ | 2,684,771 | ||||||||||
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20
ATLAS ENERGY, L.P.
Ownership Interests Summary
Atlas Energy Ownership Interests as of September 30, 2012: | Amount | Overall Ownership Interest Percentage | ||||||
ATLAS RESOURCE: | ||||||||
General partner interest | 100 | % | 2.0 | % | ||||
Common units | 20,962,485 | 51.5 | % | |||||
Incentive distribution rights | 100 | % | N/A | |||||
|
| |||||||
Total Atlas Energy ownership interests in Atlas Resource | 53.5 | % | ||||||
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| |||||||
ATLAS PIPELINE: | ||||||||
General partner interest | 100 | % | 2.0 | % | ||||
Common units | 5,754,253 | 10.5 | % | |||||
Incentive distribution rights | 100 | % | N/A | |||||
|
| |||||||
Total Atlas Energy ownership interests in Atlas Pipeline | 12.5 | % | ||||||
|
| |||||||
LIGHTFOOT CAPITAL PARTNERS, GP LLC: | ||||||||
Approximate general partner ownership interest | 15.9 | % | ||||||
Approximate limited partner ownership interest | 12.1 | % |
21