Atlas Resource Partners, L.P. (NYSE: ARP) (“ARP” or “the Company”) hereby provides an operational update on its activities, as well as an update to its oil & natural gas hedge positions and financial outlook for the remainder of 2013 and full year 2014. The Company also plans to release results for the third quarter 2013 on Thursday, November 7, 2013 after market hours, and invites investors and other interested parties to listen to the live webcast of its quarterly conference call on Friday, November 8, 2013, at 9:00 am ET.
ARP continued to develop its oil & gas properties in the third quarter 2013, further expanding several key operating areas.
Edward E. Cohen, Chief Executive Officer, commented, “Our well results in recent months have been exhilarating. But we are not immune from adverse outside phenomena --- natural disasters, third-party delays in providing infrastructure, reductions in forward “strip” prices, and so forth. Achieving or exceeding the upper end of our new guidance range of $2.60 in 2014 depends largely on performing in line with or better than analysts’ expectations in our operating areas, in syndication achievements, and in new growth opportunities. We’ve often done it before, and I’m confident that we’ll do it again.”Matthew A. Jones, President, added, “Few would have anticipated the scale of our growth during the first 18 months of ARP’s existence --- a short time during which we have expanded our proved reserves by over 700% while increasing distributions to our unitholders by a peer-leading 40%. We believe that we will continue to accelerate growth in 2014 and beyond.”
- During the third quarter 2013, ARP connected eight horizontal Marcellus Shale wells located in Lycoming County, PA, which demonstrated exceptionally strong initial flow rates. Despite limitations of infrastructure that have inhibited operation at full capacity, total gross daily production from the eight wells reached maximum pipeline capacity of approximately 62 Mmcfd. The characteristics of these well sites are highly favorable compared to other wells in the region due to: the thickness and depth of the shale in the area, level of porosity (~10-14%), permeability (up to 400 nD), TOC (up to 6%), and a high pressure gradient (~0.89 psi/ft). Nonetheless, ARP has experienced substantially lower than expected natural gas revenues from these wells due to weakness in Transco-Leidy Line pricing.
- In September 2013, ARP began connecting its five initial wells drilled in the Utica-Point Pleasant formation in northern Harrison County, OH. Early results indicated higher levels of high-grade condensate than originally expected. ARP had previously secured capacity to several processing plants in the area, namely the Natrium and Hastings plants via Blue Racer Midstream’s gathering system. A major fire occurred at the Natrium processing plant on September 21 st, causing the plant to shut down and, subsequently, forcing ARP to temporarily shut in the Harrison County wells. ARP has successfully made arrangements in the interim to send a portion of the Harrison County production to other plants, and several of the wells have been brought back online at limited production. ARP is in the process of identifying additional third-party capacity in order to optimize production.
- ARP has drilled approximately 40 wells to date in the oil and liquids rich Marble Falls play, primarily in Jack County, TX in which the Company holds approximately 75,000 net acres. ARP has now identified additional productive zones located above and below the Marble Falls play, including the Caddo formation, Bend conglomerates and Chappel Reefs. Early testing of these formations has yielded initial production rates of 100-300 barrels of oil per day. Additional 3-D seismic is being undertaken to further develop these formations in conjunction with the Marble Falls.
- ARP continues to experience favorable results from approximately 466 billion cubic feet (“Bcf”) of proved reserves in the Raton (NM), Black Warrior (AL) and County Line (WY) basins, which were purchased from EP Energy in July 2013. To date, the assets have been producing at rates higher than the Company’s forecasted expectations. ARP has also identified a number of high-returning work over opportunities on Raton and Black Warrior locations that are expected to be completed over the coming year.
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