Atlas Energy, L.P. Reports Operating and Financial Results for the First Quarter 2013
PHILADELPHIA--(BUSINESS WIRE)-- Atlas Energy, L.P. (NYSE: ATLS) ("Atlas Energy" or "ATLS") today reported operating and financial results for the first quarter 2013.
ATLS declared a cash distribution of $0.31 per limited partner unit for the first quarter 2013, which represents a $0.01 per unit, or 3%, increase over the fourth quarter 2012, and a 24% increase over the prior year first quarter. The first quarter 2013 ATLS distribution will be paid on May 20, 2013 to holders of record as of May 6, 2013. ATLS confirms its distribution guidance of $1.70 to $2.00 for full year 2013.
Atlas Energy's E&P subsidiary, Atlas Resource Partners, L.P. (NYS: ARP) , reached record average net production of 133.0 million cubic feet of natural gas equivalents per day ("Mmcfed") for the first quarter 2013, a 21% increase from the fourth quarter 2012. ARP also recently completed seven horizontal wells in the Marcellus Shale in Lycoming Co., PA yielding aggregate initial flow rate production of approximately 140 Mmcfed, in which ARP owns an approximate 35% interest; ARP expects these wells to be online in early third quarter 2013.
Atlas Pipeline Partners, L.P. (NYS: APL) , Atlas Energy's midstream subsidiary, recently acquired 100% of the equity interests TEAK Midstream, L.L.C. ("TEAK") for $1 billion in cash. TEAK's midstream assets are located in the core of the Eagle Ford Shale. This acquisition will provide APL an immediate entry point into the Eagle Ford with proven assets positioned for further expansion. APL also reported record processing volumes at each of its systems, reaching a total of 1,032.9 Mmcfd and NGL production of over 84,000 barrels per day ("bpd") for the first quarter 2013.
Edward E. Cohen, Chief Executive Officer of Atlas Energy, stated, "We continue to fulfill our mission of ever-increasing distributions to our unit-holders --- at Atlas Energy itself and at APL and ARP. But no less importantly, our underlying businesses are booming. APL is setting new records in midstream operations, and ARP is vastly expanding gas and liquids production, enjoying the benefits of recent increases in natural gas prices and anticipating substantial expansion of its direct placement syndication business."
On April 25, 2013, ARP increased its quarterly cash distribution to $0.51 per unit for the first quarter 2013, which will be paid on May 15, 2013 to holders of record as of May 6, 2013. ATLS will receive approximately $11.6 million of cash distributions based upon ARP's first quarter 2013 distribution.
On April 24, 2013, APL declared an increased distribution for the first quarter 2013 of $0.59 per unit to holders of record on May 8, 2013, which will be paid on May 15, 2013. ATLS will receive approximately $7.4 million of cash distributions based upon APL's first quarter 2013 distribution.
On a GAAP basis, net loss attributable to limited partners was $12.6 million for the first quarter 2013 compared with $18.5 million for the prior year comparable period. The favorable change in net loss between periods was due primarily to higher gross margin from the expanded operations at ARP and APL, partially offset by an increase in non-cash expenses, including depreciation and non-cash stock compensation.
Atlas Pipeline's Acquisition of TEAK Midstream
In May 2013, APL acquired 100% of the equity interests in TEAK Midstream L.L.C. ("TEAK"), a privately owned midstream operator, for $1 billion in cash. TEAK is a natural gas gathering and processing company with assets located in the core of the Eagle Ford Shale in south Texas. This transaction provides APL with a strong entry point into the Eagle Ford Shale, one of the most prolific oil & gas basins in the U.S. The TEAK assets include a 200 MMcfd cryogenic processing facility, as well as a gathering system with over 750 MMcfd of throughput capacity.
As a result of the TEAK transaction, APL provided guidance for adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") for full year 2014 of $450 million to $500 million, and full year 2014 distribution guidance of $2.75 to $2.85 per unit.
Based on the forecasted earnings and cash flow to APL from the TEAK assets, ATLS expects to receive an additional $25 million to $40 million of annual distributable cash flow as the acquired assets grow and mature in the future. This represents approximately $0.45 to $0.75 per ATLS common unit of additional distributable cash flow on an annualized basis.
Atlas Resource's Marcellus Shale test results in Lycoming County, PA
ARP recently completed seven horizontal Marcellus Shale wells on two pad sites in Lycoming County, PA. All of these Marcellus Shale wells have been drilled with funding from ARP's partnership management programs. ARP has an approximate 35% working interest in these wells. There were a total of 131 frac stages completed amongst the seven wells, which had an average lateral length of approximately 4,000 feet. The wells were flowed at an average casing pressure of approximately 3,600 psi. ARP had substantial indications from these wells, which had aggregate peak flow rates of approximately 140 million cubic feet of natural gas per day ("MMcfd"), or an average of 20 mmcfd per well, with one well having a peak rate as high as 32 MMcfd. These wells are currently shut in and awaiting pipeline, which is expected in early third quarter 2013.
ARP currently expects to drill an additional 15 Marcellus Shale wells in Lycoming Co. through the end of 2014 within its partnership management programs.
Atlas Pipeline Senior Notes Offering
On May 7, 2013, APL entered into an agreement to sell $400 million of 4.75% Senior Notes due 2021 in a private placement transaction. APL expects to receive net proceeds of approximately $392 million after commissions and other transaction costs, and APL intends to use the net proceeds from this offering to reduce obligations under its revolving credit facility, and for general partnership purposes.
The senior notes will be subject to a registration rights agreement, which will require 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 First Quarter 2013 Highlights
ARP's average net daily production for the first quarter 2013 was 133.0 Mmcfed, an increase of 22.9 Mmcfed, or approximately 21%, compared with the fourth quarter 2012, and an increase of approximately 240% compared to the prior year first quarter. The production increase from fourth quarter 2012 was primarily due to a full quarter's volume from the acquisition of the Marble Falls oil & gas properties in the Fort Worth basin (TX) from DTE Energy in December 2012. The increase compared to the prior year quarter is due primarily to ARP's acquisitions of producing oil& gas properties in the Barnett Shale and Fort Worth basin in Texas and Hunton formation in Oklahoma. Oil and natural gas liquids production accounted for approximately 20% of total production volume for the period, compared with 13% for the fourth quarter 2012 and 10% for the prior year first quarter.
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 first quarter 2013 earnings release for additional details on its financial results.
Atlas Pipeline First Quarter 2013 Highlights
During the first quarter 2013, 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 1,032.9 Mmcfd of natural gas in the first quarter 2013 amongst its WestOK, WestTX, Velma and the newly-acquired Arkoma systems, 63% higher than the prior year comparable quarter's volumes. APL again attained record high volumes with over 84,000 bbl per day of natural gas liquids generated from its 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 7.5% 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 first quarter 2013 earnings release for additional details on its financial results.
Cash general and administrative expense, excluding amounts attributable to APL and ARP, was $3.0 million for the first quarter 2013, $1.5 million higher than the fourth quarter 2012 and $0.5 million higher than the prior year first quarter. The increase from fourth quarter 2012 was due primarily to higher seasonal corporate expenses incurred earlier in the year, including yearend compliance costs. Please refer to the consolidating 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 firstquarter 2013 results on Thursday, May 9, 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 May 9, 2013 by dialing 888-286-8010, passcode: 74304624.
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 7.5% 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, distribution amounts, 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 STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per unit data)
Three Months Ended
Gas and oil production
Well construction and completion
Gathering and processing
Administration and oversight
Loss on mark-to-market derivatives(1)
Costs and expenses:
Gas and oil production
Well construction and completion
Gathering and processing
General and administrative
Depreciation, depletion and amortization
Total costs and expenses
Loss on asset sales and disposal
Loss on early extinguishment of debt
Net loss before tax
Income tax benefit
Loss (Income) attributable to non-controlling interests
Net loss attributable to common limited partners
Net loss attributable to common limited partners per unit:
Basic and Diluted
Weighted average common limited partner units outstanding:
Basic and Diluted
Consists principally of hydrocarbon derivative gains / (losses) that relate to the operating activities of ATLS's consolidated subsidiary, APL. The underlying hydrocarbon derivatives do not represent present or potential future obligations of ATLS.
ATLAS ENERGY, L.P.
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands)
Cash and cash equivalents
Current portion of derivative asset
Prepaid expenses and other
Total current assets
Property, plant and equipment, net
Intangible assets, net
Investment in joint venture
Long-term derivative asset
Other assets, net
LIABILITIES AND PARTNERS' CAPITAL
Current portion of long-term debt
Liabilities associated with drilling contracts
Accrued producer liabilities
Current portion of derivative liability
Current portion of derivative payable to Drilling Partnerships
Accrued well drilling and completion costs
Total current liabilities
Long-term debt, less current portion
Long-term derivative liability
Long-term derivative payable to Drilling Partnerships
Deferred income taxes, net
Asset retirement obligations and other
Commitments and contingencies
Common limited partners' interests
Accumulated other comprehensive (loss) income
Total partners' capital
ATLAS ENERGY, L.P.
Financial and Operating Highlights
Three Months Ended
Net income (loss) attributable to common limited partners per unit - basic
Distributable cash flow per unit(1)(2)
Cash distributions paid per unit(3)
Natural gas (Mcfd)