Atlas Pipeline Holdings, L.P. (AHD)

Q4 2010 Earnings Call

February 22, 2010 9:00 AM ET



Matthew Skelly – VP, IR

Gene Dubay – President and CEO

Glenn Powell – COO

Eric Kalamaras – CFO


Steve Maresca – Morgan Stanley

Sharon Lui – Wells Fargo

James Spicer – Wells Fargo

Brandon Osten – Venator

Kelly Krenger – Bank of America/Merrill Lynch

Yves Siegel – Credit Suisse


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Previous Statements by AHD
» Atlas Pipeline Holdings L.P. Q1 2010 Earnings Call Transcript
» Atlas Pipeline Holdings, L.P. Q4 2009 Earnings Call Transcript
» Atlas Pipeline Holdings, L.P. Q3 2009 Earnings Call Transcript

Good day, ladies and gentlemen, and welcome to the 2010 fourth quarter Atlas Pipeline Partners earnings conference call. I’ll be your operator for today. At this time, all participants are in listen-only mode. Later we will facilitate a question-and-answer session.

(Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Matthew Skelly, Head of Investor Relations. Please proceed, Mr. Skelly.

Matthew Skelly

Good morning and thank you for joining us today for the fourth quarter and full-year 2010 earnings call. Before our management team provides comments on our results, I would like to remind everyone of the following Safe Harbor provision.

During this conference call, we may make certain forward-looking statements, that is statements related to future, not past events. In this context, forward-looking statements often address our expected future business and financial performance, and financial condition and often contain words such as expect, anticipate, intend, believe, and similar words or phrases. Forward-looking statements by their nature address matters that are to different degrees uncertain and are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in the forward-looking statements. We discuss these risks in our Quarterly Report on Form 10-Q, and our Annual Report on Form 10-K, particularly in item 1.

I would like to caution you not to place undue reliance on these forward-looking statements, which reflects management’s analysis only as of the date hereof. The company undertakes no obligation to publicly update our forward-looking statements or 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.

Lastly, management’s discussion this morning includes references to items as adjusted EBITDA and distributable cash flow, which represent non-GAAP measures. A reconciliation of these non-GAAP measures is provided in the financial tables of our quarterly earnings release as well as our Form 10-Q.

With that, I will turn the call over to our Chief Executive Officer, Gene Dubay for his remarks.

Gene Dubay

Thank you, Matt. Ladies and gentlemen, thank you for your presence and your interest in Atlas Pipeline Partners.

Today, the company is poised to produce very meaningful results in the coming year. We announced on Friday of last week that we had closed on the sale of our interest in Laurel Mountain partnership to Chevron for $403 million. We will in the near term further reduce our leverage to maximize distributable cash flow leaving the company with less than one times debt to EBITDA. In the intermediate term, we see that we have some great developmental projects that we will be in position to fund with the liquidity that we now have.

We are fortunate to operate three systems that have such developmental opportunities in oil plays such as the Spraberry-Wolfberry, Trenton, Texas, as well as the liquid rich plays of Oklahoma.

In this past quarter, we continued to see very positive growth and development in the areas that we operate. Our plants in The Chaney Dell system are full; we are operating close to our capacity at Velma; and we expect that our West Texas plants will be at capacity when the winter weather abates and the heater treaters come offline in the spring or shortly thereafter in the early summer. We are in position to expand the net capacity in each of our operating areas in the very near term. That expansion of capacity is needed in each of the areas as a result of the drilling activity taking place around our assets.

Glenn Powell, our Chief Operating Officer, will speak to you shortly about each of the operating areas, the volume improvement that we are seeing and the developments that are occurring in those areas.

Our financial results reflect the buildup of volumes across our systems. In addition, we have reduced the commodity exposure in our contract mix and we continue to add hedges at appropriate price levels to ensure the stability of our distributable cash flow.

Eric Kalamaras, our Chief Financial Officer, will describe our hedge positions and enumerate our financial results for the quarter.

For the management team, this has been a journey. For a year we struggled to remain complaint with our debt obligations and maintain liquidity. In this past year, our second year, we focused on maximizing the throughput across our system and rationalizing our asset base. We achieved our goals, which were to improve our balance sheet, reduce leverage, maximize return on our assets, and reinstate the distribution.

Now our challenge is to utilize our liquidity and balance sheet to grow the business in a manner that maximizes the return for our unit holders. In order to accomplish this, we must maintain our fiscal discipline. We need to be proactive and energetic in our business development activities and remain focused in our field operations. We need to remember that our producer customers are the key to our success.

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