Atlas Energy, L.P. Reports Operating and Financial Results for the Fourth Quarter and Full Year 2012
Atlas Energy, L.P. Reports Operating and Financial Results for the Fourth Quarter and Full Year 2012
PHILADELPHIA--(BUSINESS WIRE)-- Atlas Energy, L.P. (NYSE: ATLS) ("Atlas Energy" or "ATLS") today reported operating and financial results for the fourth quarter and full year 2012.
ATLS declared a cash distribution of $0.30 per limited partner unit for the fourth quarter 2012, which represents a $0.03 per unit, or 11%, increase over the third quarter 2012, and a 25% increase over the prior year quarter. The fourth quarter 2012 ATLS distribution was paid on February 19, 2013 to holders of record as of February 6, 2013.
Atlas Energy's E&P subsidiary, Atlas Resource Partners, L.P. (NYS: ARP) , reached record average net production of 110.1 million cubic feet of natural gas equivalents per day (Mmcfed) for the fourth quarter 2012, a 14% increase from the prior quarter. In December 2012, ARP completed its most recent acquisition of oil & natural gas liquids (NGL) rich reserves in the Marble Falls region of the Fort Worth Basin from DTE Energy ("DTE") for approximately $255 million. ARP completed approximately $650 million in acquisitions in the Fort Worth Basin in 2012.
Atlas Pipeline Partners, L.P. (NYS: APL) , Atlas Energy's midstream subsidiary, announced record processing volumes at each of its systems, reaching a total of 1,001.9 Mmcfd and NGL production of 80,120 barrels per day (bpd) for the fourth quarter 2012. APL also recently completed its acquisition of Cardinal Midstream in December 2012, in which APL acquired valuable gathering and processing facilities.
Edward E. Cohen, Chief Executive Officer of Atlas Energy, stated, "Our results in 2012 at ATLS should only be exceeded by our accomplishments this year and beyond. All of our success is attributable to the tremendous efforts of both ARP and APL, both of which had strong performances through the end of the year. We expect continued value creation for all of our stakeholders."
Financial Results
On January 24, 2013, ARP increased its quarterly cash distribution to $0.48 per unit for the fourth quarter 2012, which was paid on February 14, 2013 to holders of record as of February 6, 2013. ATLS received approximately $10.7 million of cash distributions based upon ARP's fourth quarter 2012 distribution.
On January 23, 2013, APL declared an increased distribution for the fourth quarter 2012 of $0.58 per unit to holders of record on February 7, 2013, which was paid on February 14, 2013. ATLS received approximately $6.5 million of cash distributions based upon APL's fourth quarter 2012 distribution.
On a GAAP basis, net loss attributable to limited partners was $14.9 million for the fourth quarter 2012 compared to net loss of $4.2 million for the prior year comparable period. The loss for the fourth quarter 2012 is due primarily to Atlas Energy's $4.6 million of non-cash stock compensation expense, and its ownership interest in ARP, which recognized $9.5 million of non-cash asset impairments on certain non-core legacy oil and gas properties and $8.7 million of acquisition costs related to the DTE acquisition.
Recent Events
Atlas Resources' Acquisition of Barnett Shale/Marble Falls properties from DTE Energy
On December 20, 2012, ARP completed its acquisition DTE Gas Resources, LLC, an affiliate of DTE Energy Company ("DTE"), which owned approximately 35 million barrels of oil equivalents (MMboe) of proved reserves and substantial resource potential in the Fort Worth Basin in Texas for approximately $255 million. This transaction represented ARP's third acquisition in 2012 in the Fort Worth Basin, and ARP has invested a total of approximately $650 million to acquire estimated proved reserves of over 700 billion cubic feet equivalents (Bcfe) at the time of acquisition.
Included in the DTE transaction was approximately 88,000 net acres in the Fort Worth Basin of Texas, primarily in Jack County, offsetting ARP's current Barnett Shale position. This acreage position includes approximately 75,000 net acres prospective for the oil and NGL rich Marble Falls play, in which there are approximately 700 identified vertical drilling locations in ARP's position. ARP also believes that there are further potential development opportunities through vertical down-spacing and horizontal drilling in the Marble Falls formation. ARP commenced initial drilling operations in the Marble Falls play in January 2013.
Atlas Resources' Issuance of $275 million 7.75% 2021 Senior Notes
On January 23, 2013, ARP issued $275 million of 7.75% Senior Notes due 2021 in a private placement transaction issued at par. ARP received net proceeds of $268.3 million after underwriting commissions and other transaction costs, and utilized the proceeds to repay and terminate ARP's $75.4 million term loan and reduce the outstanding balance on its revolving credit facility. The senior notes are subject to a registration rights agreement entered in connection with the transaction, which requires ARP, among other things, to file a registration statement with the SEC and exchange the privately placed notes for registered notes by certain dates.
Atlas Pipeline's Acquisition of Cardinal Midstream
In December 2012, APL acquired 100% of the equity interests held by Cardinal Midstream, LLC ("Cardinal") in its three wholly-owned subsidiaries for approximately $600.0 million in cash, subject to customary purchase price adjustments. The assets of these companies represent the majority of the operating assets of Cardinal and include the following owned and/or operated assets: three cryogenic processing plants totaling 220 million cubic feet of natural gas per day (MMcfd) in processing capacity, approximately 60 miles of associated gathering pipelines, and a gas treating business that includes 15 treating facilities located in numerous hydrocarbon basins. Over 80% of Cardinal's current gross margin is derived from fixed fee contracts.
Atlas Pipeline Senior Notes Offerings
On February 11, 2013, APL issued $650 million of 5.875% Senior Notes due 2023 in a private placement transaction issued at par. APL received net proceeds of approximately $638.2 million after underwriting commissions and other transaction costs, and utilized the proceeds to redeem any or all of its outstanding 8.75% Senior Notes due 2018 in a related tender offer, as well as repay a portion of its outstanding indebtedness under its existing credit facility.
In September 2012, APL issued $325.0 million of 6.625% Senior Notes due 2020 in a private placement transaction. Subsequently, in December 2012, APL completed a follow-on private offering of $175 million of 6.625% Senior Notes due 2020 at 103% of their principal amount, plus accrued interest from September 28, 2012, representing a yield to worst of 6.003%. APL received net proceeds of approximately $176.3 million after underwriting commissions and other transaction costs, and utilized the proceeds from the December offering to fund a portion of its acquisition of Cardinal.
The senior notes are subject to a registration rights agreement entered in connection with the transaction, which requires APL, among other things, to file a registration statement with the SEC and exchange the privately placed notes for registered notes by certain dates.
Atlas Resource Fourth Quarter 2012 Highlights
ARP's average net daily production for the fourth quarter 2012 was 110.1 Mmcfed, an increase of approximately 13.8 Mmcfed, or 14%, compared with the third quarter 2012. The increase was primarily due to a full quarter's volume from the acquisition of the remaining 50% interest in Equal Energy, Ltd.'s approximately 8,500 net undeveloped acres in the core of the Mississippi Lime play in northwestern Oklahoma in September 2012, and a full quarter's volume from the acquisition of Titan Operating, LLC ("Titan") in the Barnett Shale in July 2012.
ATLS owns 100% of the general partner Class A units and the incentive distribution rights, and a 43% common limited partner interest in ARP.ATLS' financial results are presented on a consolidated basis with those of ARP.Non-controlling interests in ARP are reflected as income (expense) in ATLS' consolidated statements of operations and as a component of partners' capital on its consolidated balance sheets.A consolidating statement of operations and balance sheet have also been provided in the financial tables to this release for the comparable periods presented.Please refer to the ARP fourth quarter and full year 2012 earnings release for additional details on its financial results.
Atlas Pipeline Fourth Quarter 2012 Highlights
During the fourth quarter 2012, APL operated near or at nameplate capacity on all of its gathering and processing systems in the Mid Continent. APL processed an average of approximately 1,001.9 Mmcfd of natural gas in the fourth quarter 2012 amongst its WestOK, WestTX, Velma and the newly-acquired Arkoma systems, 67% higher than the prior year comparable quarter's volumes. APL again attained record high volumes with over 80,100 bbl per day of natural gas liquids generated from APL's four processing systems, which primarily reside in Oklahoma and Texas.
ATLS owns a 2.0% general partner interest, all of the incentive distribution rights, and a 8.7% common limited partner interest in APL.ATLS' financial results are presented on a consolidated basis with those of APL.Non-controlling interests in APL are reflected as income (expense) in ATLS' consolidated statements of operations and as a component of partners' capital on its consolidated balance sheets.A consolidating statement of operations and balance sheet have also been provided in the financial tables to this release for the comparable periods presented. Please refer to the APL fourth quarter and full year 2012 earnings release for additional details on its financial results.
Corporate Expenses
Cash general and administrative expense, excluding amounts attributable to APL and ARP, was $1.5 million for the fourth quarter 2012, relatively consistent with the third quarter 2012. Please refer to the consolidating combined statements of operations provided in the financial tables of this release.
Interested parties are invited to access the live webcast of an investor call with management regarding Atlas Energy, L.P.'s fourthquarter 2012 results on Friday, February 22, 2013 at 9:00 am ET by going to the Investor Relations section of Atlas Energy's website at www.atlasenergy.com. For those unavailable to listen to the live broadcast, the replay of the webcast will be available following the live call on the Atlas Energy website and telephonically beginning at 11:00 a.m. ET on February 22, 2013 by dialing 888-286-8010, passcode: 12321370.
Atlas Energy, L.P. (NYSE: ATLS) is a master limited partnership which owns all of the general partner Class A units and incentive distribution rights and an approximate 43% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P. Additionally, Atlas Energy owns and operates the general partner of its midstream oil & gas subsidiary, Atlas Pipeline Partners, L.P., through all of the general partner interest, all the incentive distribution rights and an approximate 9% limited partner interest. For more information, please visit our website at www.atlasenergy.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.
Atlas Resource Partners, L.P. (NYSE: ARP) is an exploration & production master limited partnership which owns an interest in over 10,200 producing natural gas and oil wells, primarily in Appalachia and the Barnett Shale in Texas. ARP is also the largest sponsor of natural gas and oil investment partnerships in the U.S. For more information, please visit our website at www.atlasresourcepartners.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.
Atlas Pipeline Partners, L.P. (NYSE: APL) is active in the gathering and processing segments of the midstream natural gas industry. In Oklahoma, southern Kansas, northern and western Texas, and Tennessee, APL owns and operates 12 active gas processing plants, 18 gas treating facilities, as well as approximately 10,100 miles of active intrastate gas gathering pipeline. APL also has a 20% interest in West Texas LPG Pipeline Limited Partnership, which is operated by Chevron Corporation. For more information, visit the Partnership's website at www.atlaspipeline.com or contact IR@atlaspipeline.com.
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements that involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements.ATLS cautions readers that any forward-looking information is not a guarantee of future performance.Such forward-looking statements include, but are not limited to, statements about future financial and operating results, resource potential, ATLS' plans, objectives, expectations and intentions and other statements that are not historical facts. Risks, assumptions and uncertainties that could cause actual results to materially differ from the forward-looking statements include, but are not limited to, those associated with general economic and business conditions; changes in commodity prices; changes in the costs and results of drilling operations; uncertainties about estimates of reserves and resource potential; inability to obtain capital needed for operations; ATLS' level of indebtedness; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax consequences of business transactions; and other risks, assumptions and uncertainties detailed from time to time in ATLS', ARP's and APL's reports filed with the U.S. Securities and Exchange Commission, including quarterly reports on Form 10-Q, current reports on Form 8-K and annual reports on Form 10-K. Forward-looking statements speak only as of the date hereof, and ATLS assumes no obligation to update such statements, except as may be required by applicable law.
ATLAS ENERGY, L.P. | ||||||||||||||||
CONSOLIDATED COMBINED STATEMENTS OF OPERATIONS | ||||||||||||||||
(unaudited; in thousands, except per unit data) | ||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
Revenues: | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Gas and oil production | $ | 31,578 | $ | 15,325 | $ | 92,901 | $ | 66,979 | ||||||||
Well construction and completion | 39,219 | 70,947 | 131,496 | 135,283 | ||||||||||||
Gathering and processing | 360,386 | 346,102 | 1,219,815 | 1,329,418 | ||||||||||||
Administration and oversight | 3,224 | 2,668 | 11,810 | 7,741 | ||||||||||||
Well services | 4,697 | 4,752 | 20,041 | 19,803 | ||||||||||||
Gain (loss) on mark-to-market derivatives(2) | (4,965 | ) | (29,405 | ) | 31,940 | (20,453 | ) | |||||||||
Other, net | 4,865 | 5,146 | 13,440 | 31,803 | ||||||||||||
Total revenues | 439,004 | 415,535 | 1,521,443 | 1,570,574 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Gas and oil production | 10,377 | 5,147 | 26,624 | 17,100 | ||||||||||||
Well construction and completion | 34,197 | 60,876 | 114,079 | 115,630 | ||||||||||||
Gathering and processing | 298,630 | 291,227 | 1,009,100 | 1,123,051 | ||||||||||||
Well services | 2,204 | 2,661 | 9,280 | 8,738 | ||||||||||||
General and administrative(1) | 56,931 | 23,538 | 165,777 | 80,584 | ||||||||||||
Chevron transaction expense | — | — | 7,670 | — | ||||||||||||
Depreciation, depletion and amortization | 43,048 | 27,855 | 142,611 | 109,373 | ||||||||||||
Asset impairment | 9,507 | 6,995 | 9,507 | 6,995 | ||||||||||||
Total costs and expenses | 454,894 | 418,299 | 1,484,648 | 1,461,471 | ||||||||||||
Operating income (loss) | (15,890 | ) | (2,764 | ) | 36,795 | 109,103 | ||||||||||
Gain (loss) on asset sales and disposal | 39 | 570 | (6,980 | ) | 256,292 | |||||||||||
Interest expense(1) | (15,890 | ) | (7,434 | ) | (46,520 | ) | (38,394 | ) | ||||||||
Loss on early extinguishment of debt | — | — | — | (19,574 | ) | |||||||||||
Income (loss) from continuing operations before tax | (31,741 | ) | (9,628 | ) | (16,705 | ) | 307,427 | |||||||||
Income tax expense | (176 | ) | — | (176 | ) | — | ||||||||||
Income (loss) from continuing operations | (31,917 | ) | (9,628 | ) | (16,881 | ) | 307,427 | |||||||||
Loss from discontinued operations | — | — | — | (81 | ) | |||||||||||
Net income (loss) | (31,917 | ) | (9,628 | ) | (16,881 | ) | 307,346 | |||||||||
(Income) loss attributable to non-controlling interests | 17,042 | 5,454 | (35,532 | ) | (257,643 | ) | ||||||||||
Net income (loss) after non-controlling interests | (14,875 | ) | (4,174 | ) | (52,413 | ) | 49,703 | |||||||||
Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition)(1) | — | — | — | (4,711 | ) | |||||||||||
Net income (loss) attributable to common limited partners | $ | (14,875 | ) | $ | (4,174 | ) | $ | (52,413 | ) | $ | 44,992 | |||||
Net income (loss) attributable to common limited partners per unit - basic: | ||||||||||||||||
Income (loss) from continuing operations attributable to common limited partners | $ | (0.29 | ) | $ | (0.08 | ) | $ | (1.02 | ) | $ | 0.91 | |||||
Loss from discontinued operations attributable to common limited partners | — | — | — | — | ||||||||||||
Net income (loss) attributable to common limited partners | $ | (0.29 | ) | $ | (0.08 | ) | $ | (1.02 | ) | $ | 0.91 | |||||
Net income (loss) attributable to common limited partners per unit - diluted: | ||||||||||||||||
Income (loss) from continuing operations attributable to common limited partners | $ | (0.29 | ) | $ | (0.08 | ) | $ | (1.02 | ) | $ | 0.88 | |||||
Loss from discontinued operations attributable to common limited partners | — | — | — | — | ||||||||||||
Net income (loss) attributable to common limited partners | $ | (0.29 | ) | $ | (0.08 | ) | $ | (1.02 | ) | $ | 0.88 | |||||
Weighted average common limited partner units outstanding: | ||||||||||||||||
Basic | 51,359 | 51,271 | 51,327 | 48,235 | ||||||||||||
Diluted | 51,359 | 51,271 | 51,327 | 49,676 | ||||||||||||
Net income (loss) attributable to common limited partners: | ||||||||||||||||
Income (loss) from continuing operations | $ | (14,875 | ) | $ | (4,174 | ) | $ | (52,413 | ) | $ | 45,002 | |||||
Loss from discontinued operations | — | — | — | (10 | ) | |||||||||||
Net income (loss) attributable to common limited partners | $ | (14,875 | ) | $ | (4,174 | ) | $ | (52,413 | ) | $ | ||||||
