[LOGO OF ATLAS PIPELINE PARTNERS]
ATLAS PIPELINE PARTNERS, L.P.
MASTER LIMITED PARTNERSHIP CONFERENCE
FEBRUARY 28, 2005
SAFE HARBOR [LOGO OF ATLAS PIPELINE PARTNERS]
THE WORDS "BELIEVES, ANTICIPATES, EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED
TO IDENTIFY FORWARD LOOKING STATEMENTS.
SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES, WHICH COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD
LOOKING STATEMENTS.
THE RISKS AND UNCERTAINTIES ARE DISCUSSED IN OUR ANNUAL REPORT ON FORM 10-K, OUR
QUARTERLY REPORT ON FORM 10-Q; PARTICULARLY THE SECTION TITLED RISK FACTORS.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.
THE COMPANY UNDERTAKES NO OBLIGATIONS TO PUBLICLY RELEASE THE RESULTS OF ANY
REVISIONS TO FORWARD LOOKING STATEMENTS, WHICH MAY BE MADE TO REFLECT EVENTS OR
CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF
UNANTICIPATED EVENTS.
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OVERVIEW
APL - PROFILE [LOGO OF ATLAS PIPELINE PARTNERS]
ATLAS PIPELINE PARTNERS, L.P.
BUSINESS NATURAL GAS MID-STREAM
GAS GATHERING & processing
OPERATIONS DAY-TODAY OPERATIONS PROVIDED BY GENERAL
PARTNER - 40 YEAR HISTORY IN THE ENERGY
INDUSTRY.
STRUCTURE MASTER LIMITED PARTNERSHIP
NYSE SYMBOL "APL"
UNITS - IPO 1,641,026 SUBORDINATED UNITS
1,500,000 COMMON UNITS
- 5/03, 4/04 & 7/04 OFFERINGS 4,063,659 COMMON UNITS
----------------------------------------------------
- CURRENT 7,204,685 TOTAL UNITS
MARKET CAPITALIZATION $ 315 MILLION
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APL - INVESTMENT HIGHLIGHTS [LOGO OF ATLAS PIPELINE PARTNERS]
o DEMONSTRATED TRACK RECORD OF:
o VALUE CREATION
o CONSERVATIVE CAPITALIZATION
o STRATEGICALLY LOCATED ASSETS:
o LONG-LIVED APPALACHIAN BASIN
o PROLIFIC MID-CONTINENT REGION
o EFFICIENT ASSETS WITH LOW MAINTENANCE CAPITAL EXPENDITURE REQUIREMENTS
o RELATIONSHIP WITH ATLAS AMERICA, INC. (NASDAQ:ATLS)
o COMMITTED AND STRONG GENERAL PARTNER / MANAGEMENT TEAM
o ALIGNMENT OF INTERESTS
o GROWTH DRIVERS
o OBJECTIVE IS TO INCREASE DISTRIBUTIONS AND VALUE TO UNIT HOLDERS THROUGH
o ORGANIC GROWTH
o FURTHER MID-STREAM ACQUISITION
Page 5
VALUE CREATION
&
FINANCIAL OVERVIEW
APL - INVESTMENT HIGHLIGHTS [LOGO OF ATLAS PIPELINE PARTNERS]
APL MARKET PERFORMANCE SINCE IPO
[CHART APPEARS HERE]
Page 7
APL - INVESTMENT HIGHLIGHTS [LOGO OF ATLAS PIPELINE PARTNERS]
QUARTERLY DISTRIBUTION
[CHART APPEARS HERE]
o MARKET CAPITALIZATION INCREASED FROM $40 MM AT IPO TO $315 MM ON FEBRUARY
25, 2005
o DISTRIBUTION EFFECTIVE TAX SHIELD OF 100% IN 2005 AND ESTIMATED IN EXCESS
OF 70% FOR 2006
o TARGETING 10% DISTRIBUTION COVERAGE
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FINANCIAL OVERVIEW [LOGO OF ATLAS PIPELINE PARTNERS]
Balance Sheet Highlights at September 30, 2004
(in thousands)
Cash $ 29,020
PP&E, Net 172,312
Other 4,472
-----------
Total $ 220,258
===========
Total Debt $ 60,222
Partners Capital 129,446
Other 30,590
-----------
Total $ 220,258
===========
Income Statement & EBITDA Highlights
(in thousands)
Three Months Nine Months
ended 9/30/2004
------------------------------
Revenue $ 34,879 $ 43,674
Costs & Expenses
Direct Operating Costs 26,083 27,228
G&A 1,737 2,901
DD&A 1,022 2,132
Interest 1,075 1,202
Term. Acquisition 2,987 2,987
Total Costs & Expenses 32,904 36,450
------------ ------------
Net Income 1,975 7,224
Add back Terminated Acquisition 2,987 2,987
------------ ------------
Pro-forma adjusted Net Income $ 4,962 $ 10,211
============ ============
Add back
Interest $ 1,075 $ 1,202
DD&A $ 1,022 $ 2,132
------------ ------------
EBITDA -pro forma $ 7,059 $ 13,545
------------ ------------
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APPALACHIA OPERATIONS
ASSET OVERVIEW - APPALACHIA [LOGO OF ATLAS PIPELINE PARTNERS]
o APL owns approximately 1,400 miles of natural gas gathering pipelines in
long-lived Appalachian Basin - over 100 employees of GP operate the
Appalachian system.
o Over 4,250 producing wells delivering natural gas into system
o System throughput averaged 54.3 MMcf per day in 3Q2004
o Up from 41.9 MMcf per day in 1Q2000
o APL is paid 16% of the selling price of the gas delivered
o $.35 per mcf floor
o 75 separate delivery points connecting with public utility lines
o Abundant additional drilling locations in close proximity to the existing
system
o 1,166 new wells added in past five years & 430 through acquisition.
o 500 funded wells yet to be connected.
[GRAPHIC APPEARS HERE]
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ASSET OVERVIEW - APPALACHIA [LOGO OF ATLAS PIPELINE PARTNERS]
[GRAPHIC APPEARS HERE]
o Compression capacity:
o 13,000 hp (3,300 hp leased)
o 5,000 hp to be added in next 3 months
o Replacement of 2,000 leased hp
o Trend to electric driven units
o More cost effective
o lower maintenance
o less expensive fuel cost
o MAINTENANCE CAPITAL EXPENSE
o approx. $250,000 per year
o GROWTH CAPITAL EXPENSE
o Fayette County, PA
o Initiating major $3.5 mm expansion of our system and added delivery
point to increase capacity by 15 MMcf/d - to be on-line mid May 2005
o 21 other mainline projects currently in work - $4.5 mm
o Crawford & McKean Counties, PA
o Initiating further major $1 mm expansion or our system
o Routine well connection costs are predictable
o $13,500 per well in 1-3Q2004
[GRAPHIC APPEARS HERE]
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ASSET OVERVIEW - APPALACHIA [LOGO OF ATLAS PIPELINE PARTNERS]
APPALACHIAN GAS PRICES PER MMBTU
[CHART APPEARS HERE]
o APL - APPALACHIA PROVIDES TRANSPORTATION AND COMPRESSION ONLY
o 95% of throughput is controlled (directly or through managed partnerships)
by our GP
o APL receives 16% of the selling price of the gas as its t&c fee - some
fixed fee.
o GP periodically hedges its production and that of the partnerships it
manages.
o Physical hedges impact APL's t&c fee.
o Financial hedges (if any) do not
2005 2006
------------------------------ -----------------------------------------
2Q 3Q 4Q 1Q 2Q 3Q 4Q
-------- -------- -------- -------- -------- -------- --------
% GAS HEDGED 68.8 73.3 72.8 81.1 39.7 41.0 41.4
AVG. PRICE/MCF $ 6.88 $ 6.88 $ 6.92 $ 6.94 $ 7.10 $ 7.10 $ 7.10
APL T&C FEE/MCF $ 1.10 $ 1.10 $ 1.11 $ 1.11 $ 1.14 $ 1.14 $ 1.14
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MID-CONTINENT OPERATIONS
(ATLAS PIPELINE MID-CONTINENT LLC)
ASSET OVERVIEW - MID-CONTINENT [LOGO OF ATLAS PIPELINE PARTNERS]
o APL OWNS AND OPERATES APPROXIMATELY 1,900 MILES OF NATURAL GAS GATHERING
PIPELINES IN SOUTHERN OKLAHOMA AND NORTHERN TEXAS.
o Operations provided by 42 employees of our GP located in Tulsa and
Velma, Oklahoma.
o GAS IS GATHERED AND DELIVERED TO OUR GAS PROCESSING FACILITY IN VELMA,
OKLAHOMA WHERE NATURAL GAS LIQUIDS (NGL) AND IMPURITIES ARE REMOVED.
o Inlet volume currently approximately 64.5 mmcf/d
o Residue gas, currently approximately 51.5 mmcf/d, sold with average
9% retained by APL.
o NGL, currently approximately 6,500 barrels per day, sold with
average 28% retained by APL.
o Condensate, currently approximately 190 per day, sold with 60%
retained by APL.
o DEMONSTRATED ORGANIC GROWTH
o throughput averaged 55.1 mmcf per day in 3Q2004 compared to 44 mmcf
per day in 3Q2003
o Wells connected since July 2004 represent 16 mmcf/d in additional
volume.
o ACTIVE DRILLING IN CLOSE PROXIMITY TO THE EXISTING SYSTEM
o Over 560 producing wells delivering into system
o Currently have identified numerous wells permitted for drilling near
our system
o 188 active rigs in Oklahoma
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SYSTEM & FACILITY DESCRIPTION [LOGO OF ATLAS PIPELINE PARTNERS]
o 560 RECEIPT POINTS, OF WHICH 90% ARE MEASURED USING ELECTRONIC FLOW
EQUIPMENT
o 14,000 HP (5,000 HP IS LEASED) AT 16 FIELD BOOSTER SITES AND 20,000 HP AT
THE VELMA PLANT.
o GROWTH CAPITAL EXPENSE - RECENT:
o Sour gas injection well to replace SRU
o $6.9 million 29-mile, large diameter high pressure trunk line that
extends northwest from Velma plant to Duncan, Oklahoma.
o $11.6 mm renovation of the Velma Gas Plant, upgraded compression by
replacing thirty four gas-fired engines with six "top shelf"
electric-driven compressors.
o GROWTH CAPITAL EXPENSE - CURRENT:
o $6 mm expansion of compression capability will increase effective
plant inlet capacity from 60 mmcf/d to 90 mmcf/d.
[GRAPHIC APPEARS HERE]
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NATURAL GAS SUPPLY - MID-CONTINENT [LOGO OF ATLAS PIPELINE PARTNERS]
APL MID-CONTINENT PURCHASES, GATHERS, PROCESSES AND MARKETS
o 80% OF TOTAL VOLUMES UNDER PERCENTAGE OF PROCEEDS CONTRACTS
o 20% OF TOTAL VOLUMES UNDER FIXED-FEE CONTRACTS
o NO KEEP WHOLE CONTRACTS
o NATURAL GAS SUPPLY GENERALLY UNDER ACREAGE DEDICATION AND LONG TERM
AGREEMENTS.
o Approximately 600 active purchase and gathering contracts
o Producers are generally captive to our system
o APL MID-CONTINENT CONDUCTS HEDGING OF ITS EQUITY GAS, NGL AND CONDENSATE:
2005 2006
------------------------------ -----------------------------------------
2Q 3Q 4Q 1Q 2Q 3Q 4Q
-------- -------- -------- -------- -------- -------- --------
% GAS HEDGED 83 83 83 42 42 21 21
AVG. PRICE/MCF
(NYMEX) $ 6.24 $ 6.24 $ 6.24 $ 5.95 $ 5.95 $ 5.86 $ 5.74
% NGL HEDGED 84 84 84 52 52 26 26
AVG. PRICE/GALLON $ .59 $ .59 $ .59 $ .56 $ .56 $ .56 $ .56
% CONDENSATE
HEDGED 95 95 95 72 72 48 48
AVG. PRICE/BBL $ 34.25 $ 34.25 $ 34.25 $ 40.96 $ 40.96 $ 41.08 $ 40.77
$ 30.00 $ 30.00 $ 30.00
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ATLAS AMERICA, INC.
NASDAQ:ATLS
(GENERAL PARTNER OF APL)
ATLAS AMERICA, INC. (NASDAQ:ATLS) [LOGO OF ATLAS PIPELINE PARTNERS]
o LEADER IN APPALACHIAN DRILLING & PRODUCTION
o 493 wells completed during twelve months ended 9/30/2004
o 4,986 wells operated - holds interest in 5,896 wells
o 233,000 gross acres of developed mineral leases
o 250,000 gross acres of undeveloped mineral
o 227 employees
o OWNER OF ATLAS PIPELINE GP, LLC
o 25% Combined GP and LP Ownership
o 1.64 million units held by GP
o Subordination expired on 1/1/2005
o 2% GP interest with incentive splits up to 50%
o ATLAS AMERICA, INC. IPO ON MAY 10, 2004 - NASDAQ:ATLS
o $15.50 per share - currently trading at $39+/- per share
o Current market capitalization of $520+ million
o $70+ mm in value of APL units held by GP
o 80.2% owned By Resource America (NASDAQ:REXI) - pending tax-free
distribution to REXI shareholders upon IRS approval
[CHART APPEARS HERE]
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GENERAL PARTNER - DRIVING GROWTH [LOGO OF ATLAS PIPELINE PARTNERS]
ORGANIC - NEW WELL CONNECTION
INVESTOR FUNDS RAISED (MILLIONS OF DOLLARS)
[CHART APPEARS HERE]
WELLS DRILLED
[CHART APPEARS HERE]
COMPANY NATURAL GAS PROVED RESERVES
[CHART APPEARS HERE]
o Atlas America is a leading syndicator of natural gas drilling programs - 32
year track record
o $112 million raised in calendar 2004 representing approximately 648
wells to be drilled in Appalachia
o Expects significant growth in 2005
o Drilling success rate exceeds 97%
o Typically maintains 3 to 4 year development inventory
o Drilled more than 1,000 wells over last three years
o Connected 335 wells to the APL system in 2004 compared to 270 wells in 2003
o 380 Bcfe of owned and managed proved reserves - 156 Bcfe net proved
reserves to Atlas America
o Low-risk, long-lived reserves
o 250,000 gross undeveloped acres - 2,400 drill sites identified
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CONCLUSION
o DEMONSTRATED TRACK RECORD OF
VALUE CREATION
CONSERVATIVE CAPITAL STRUCTURE
ABILITY FOR IMMEDIATE GROWTH, ORGANIC OR ACQUISITION
o STRATEGICALLY LOCATED ASSETS
LONG-LIVED APPALACHIAN BASIN
PROLIFIC MID-CONTINENT REGION
EFFICIENT ASSETS WITH LOW MAINTENANCE CAPITAL EXPENDITURE REQUIREMENTS
o RELATIONSHIP WITH ATLAS AMERICA
ALIGNMENT OF INTERESTS
GROWTH DRIVERS
COMMITTED AND STRONG GENERAL PARTNER / MANAGEMENT TEAM
Page 21
[LOGO OF ATLAS PIPELINE PARTNERS]
February 28, 2005