Previous Statements by ATLS
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Now in connection with the planned distribution of common units of our newly formed E&P MLP, Atlas Resource Partners, which will trade under the ticker symbol ARP on the New York Stock Exchange starting March 14, Atlas Resource Partners’ Form 10 registration statement was declared effective by the SEC earlier this month. The Form 10 registration statement contains important information about Atlas Research Partners and the planned distribution, including a discussion of risks and uncertainties. All Atlas Energy unitholders of record as of today will receive their proportionate share of common units of Atlas Research Partners on March 13.In our earnings release, we provide a reconciliation from net income to adjusted EBITDA and distributable cash flow as we believe that these non-GAAP measures offer the best means of evaluating the results of our business. Lastly, Atlas Energy will be participating in several upcoming investor conferences, including the Morgan Stanley MLP Corporate Access Day on March 7 and 8, and the IPAA conference in New York on March 16 through 18. With that, I’d like to turn the call over to our Chief Executive Officer, Ed Cohen for his remarks. Ed? Edward Cohen Hello everyone. First of all, let me assure you that this is no routine quarterly conference report. Today, we celebrate the completion of the reconstruction of Atlas Energy. One year and 10 days ago, after the sale of old Atlas to Chevron, we’re now launching our new E&P subsidiary, Atlas Resource Partners. All holders of ATLS stock as of today’s date will be entitled to receive on March 13 the proportionate share of the 19.6% of Atlas Resource Partners which is being distributed. ATLS will of course retain the remaining 80.4% and will retain all the incentive distribution rights – the so-called IDRs – in Atlas Resource Partners. These IDRs together with Atlas’ general partnership interest progress to a maximum split level of 50%.
Just as with Atlas’ pipeline where we are enjoying a crescendo of growth in distribution through our IDRs and from our common units, the ownership of incentive distribution rights – these IDRs – in Atlas Resource Partners will become increasingly more valuable when and as the distributable cash flow of Atlas Resource Partners increases in the future. Most importantly, such gains at APL and at ARP will occur without ATLS shareholders themselves suffering any dilution through the issuance of new shares and without ATLS itself borrowing any monies.Now, you may remember that in an October call, we had set forth our expectations for the new ARP and the benefits that we thought it would bring to its own unitholders and to ATLS’ unitholders. All this is on the verge of being realized. I know that some observers thought that we were being overly optimistic in suggesting that we could move within three to four months from concept to reality, but the SEC has been quite efficient and our Form 10 filing was declared effective on February 14. We are now in a position to reaffirm our initial expectation that in the first 12 months of operation, ARP will be able to distribute $1.60 to its unitholders. As you will hear in more detail from Matt Jones shortly, our new Marcellus wells, although being connected slightly later than originally anticipated, these wells have shown even greater initial test production than anticipated and greater volume should largely compensate for any shortfall in realized prices as against initial projections. I should note that in addition to the final wells completed in cooperation with Chevron on our old acreage in southwestern Pennsylvania and now about to be turned on, we have already moved into new areas of the Marcellus in West Virginia and northeastern Pennsylvania, areas not covered by the Chevron restrictions which, in any event, expire partly in February 2013 and fully in February 2014; and we anticipate highly favorable results from these fresh initiatives. Read the rest of this transcript for free on seekingalpha.com