In both our Atlas Energy and Atlas Resource earnings releases, we provide a reconciliation for net income to adjusted EBITDA and distributable cash flow, as we believe that these non-GAAP measures offer the best means for evaluating the results of our business.And lastly, we'll be participating in several upcoming investor conferences, including the EnerCom Oil and Gas Conference in Denver on August 15 th, and the Citi MLP Conference in Las Vegas in August 22 nd and 23 rd. And with that, I'd like to turn the call over to our Chief Executive Officer, Ed Cohen, for his remarks on the quarter. Ed? Ed Cohen Thanks Brian, and hello, everyone. I'm glad to report that Atlas Energy L.P. and its MLP subsidiaries did enjoy a good second quarter. E&P production volumes at Atlas Resource Partners increased over 70% to 62.5 million cubic feet equivalent per day from only 36.6 million for the comparable 2011 period. Gathered gas volumes at Atlas pipeline were up almost 35% year to year from 574.5 cubic feet per day to 775 million. And despite low prices for both natural gas and natural gas liquids, ATLS cash distributions at $0.25 for the quarter were 14% higher than for the corresponding 2011 period and much higher on a pro forma basis. And day ARP in its first full quarter distributed $0.40 with a 1.1 coverage ratio. Nonetheless, this period should be seen as a mere prelude to the sharp acceleration in distributable cash flow that we anticipate in future quarters. We have taken the last months to effectuate major transformations, acquisitions, new plants, new fields, new block bluster wells, and new investor program, that are now generating and will increasingly in the near future generate substantial growth in distributable cash flow in both our downstream that is ARP, and midstream APL operations. And of course, because of its incentive distribution rights as a general partner of both ARP and APL our parent company ATLS in turn will likewise experience greatly enhanced distributable cash flow.
A major reason for our success in this low price environment has been strong hedge protection. And I might point out that in fact, we took advantage of the recent upward flip in natural gas prices to layer in yet more hedges.At the present time, APL's projected margins and cash flow, excluding ethane, are approximately 78% protected for the second half of 2012, and approximately 75% hedged in 2013. ARP is even more heavily protected. For the full period through 2016, present production is approximately 75% hedged and entirely hedged for the second half of 2012 and the entire year 2013. The impact of our protected polices has been quite favorable. Without financial hedging, ARP would have received at market only $2.03 per Mcf during the second quarter. With hedging, APR actually received $3.49 per Mcf, that's almost 75% above market. As a happy result, despite spot price deterioration, and all the other negative factors impacting our industry, and our national economy, ARP is still able now to reaffirm our earlier projections for the rest of 2012 and into 2013. For the second half of 2012, we anticipate distributions at ARP of $0.90 to $1.00 and for the full year 2013, we reaffirm our earlier guidance of $2.30 to $2.45 per unit. Beginning in the present third quarter, distributable cash flow at ARP will rise sharply as the benefits of the Carrizo and Piken acquisitions kick in, as our new Barnett division adds liquids rich new wells to be accretive existing production purchase in the second quarter, and as our new direct investment program make substantial contribution in drilling and other fees that were substantially absent in the second quarter. Read the rest of this transcript for free on seekingalpha.com