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Atlas Energy, L.P. Reports Operating And Financial Results For The Second Quarter 2013

Stocks in this article: APL ARP ATLS

Atlas Energy, L.P. (NYSE: ATLS) (“Atlas Energy” or “ATLS”) today reported operating and financial results for the second quarter 2013.

Edward E. Cohen, Chief Executive Officer of Atlas Energy, stated, “Our results and substantial distribution increase this quarter reflect the strong performance of both our subsidiaries, ARP and APL. Happily, both businesses are fully integrating their recent accretive acquisitions, positioning them well for significant future returns to their stakeholders, as well as for ATLS.”

  • ATLS declared a cash distribution of $0.44 per limited partner unit for the second quarter 2013, which represents a $0.13 per unit, or 42%, increase over the first quarter 2013, and a 76% increase over the prior year second quarter. The second quarter 2013 ATLS distribution will be paid on August 19, 2013 to holders of record as of August 6, 2013. ATLS confirms its distribution guidance of $1.70 to $2.00 per unit for full year 2013, as well as distribution guidance of $2.50 to $2.80 per unit for full year 2014.
  • Atlas Energy completed its previously announced acquisition of approximately 45 billion cubic feet (“Bcf”) of natural gas proved reserves in the Arkoma Basin in southeastern Oklahoma from EP Energy E&P Company, L.P. (“EP Energy”) for $64.5 million net of purchase price adjustments. In addition, ATLS’ E&P subsidiary, Atlas Resource Partners, L.P. (NYSE: ARP), completed its acquisition of natural gas assets from EP Energy for $706 million net of purchase price adjustments. In conjunction with the closing ARP’s transaction with EP Energy, ATLS purchased approximately 3.75 million Class C convertible preferred units from ARP for approximately $87 million.
  • Atlas Pipeline Partners, L.P. (NYSE: APL), Atlas Energy’s midstream subsidiary, reported record processing volumes of over 1.25 Bcf per day and NGL production of over 118,000 barrels per day (“bpd”) for the second quarter 2013. The increase in processed volumes was primarily due to the addition of gathering and processing assets in the Eagle Ford Shale in south Texas through APL’s acquisition of TEAK Midstream in April 2013 for $1 billion, subject to customary purchase price adjustments.

Financial Results

  • On July 25, 2013, ARP increased its quarterly cash distribution to $0.54 per unit for the second quarter 2013, a 6% increase from ARP’s first quarter 2013 distribution. ATLS will receive approximately $13.2 million of cash distributions based upon ARP’s second quarter 2013 distribution.
  • On July 24, 2013, APL declared an increased distribution for the second quarter 2013 of $0.62 per unit, a 5% increase from APL’s first quarter 2013 distribution. ATLS will receive approximately $9.4 million of cash distributions based upon APL’s second quarter 2013 distribution.
  • On a GAAP basis, net loss attributable to limited partners was $5.2 million for the second quarter 2013 compared with net income of $51.6 million for the prior year comparable period. The difference in net income between current and prior year periods was due primarily to higher mark-to-market derivative gains recognized in the prior year quarter by Atlas Pipeline.

Recent Events

Atlas Energy’s and Atlas Resource’s Acquisition of EP Energy Assets

On July 31, 2013, ATLS acquired approximately 45 Bcf of natural gas proved reserves in the Arkoma Basin (southeastern Oklahoma; “Arkoma Assets”) from EP Energy for approximately $64.5 million in cash net of purchase price adjustments. In addition, on the same date, ARP acquired approximately 466 Bcf of natural gas proved reserves in the Raton (New Mexico) and Black Warrior (Alabama) Basins from EP Energy for $706 million in cash net of purchase price adjustments. Both transactions have an effective date of May 1, 2013 pursuant to the terms of the acquisition agreements, through which ATLS and ARP received cash flows from EP Energy for the respective assets acquired for the period after the acquisition effective date through the closing date.

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