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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Atlas Energy Resources Llc | NYSE:ATN | NYSE | Ordinary Share |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 30.19 | 0.00 | 00:00:00 |
From Feb 2020 to Feb 2025
Atlas Energy Resources, LLC (NYSE: ATN) (“Atlas Energy” or “the Company”) today reported financial results for the second quarter 2009 and announced a sharp increase in estimated potential Marcellus Shale reserves from its acreage position in southwestern Pennsylvania.
Highlights from Atlas Energy’s operational and financial results include the following:
Edward E. Cohen, Chairman and Chief Executive Officer, stated, "This has been a great quarter - we have enhanced our balance sheet, we have expanded our investor programs, we have confirmed a substantial increase in Marcellus Shale reserves, we have operated on a net cash flow positive basis, and debt amounts will be further reduced upon consummation of the merger with Atlas America, Inc. In short, we are poised to accelerate our success, especially in the Marcellus Shale play."
Recent Events
Senior Notes Offering and Reduction in Bank Loan Outstanding
In July 2009, the Company issued $200 million aggregate principal amount of 12.125% senior unsecured notes due 2017. Net proceeds from the offering were used to reduce outstanding borrowings under its revolving credit facility.
New Natural Gas Gathering Agreement and Sale of Natural Gas Gathering and Processing Assets
On June 1, 2009, the Company entered into new natural gas gathering agreements with Laurel Mountain, a newly-formed joint venture in the northern Appalachian Basin between the Company’s affiliate, Atlas Pipeline Partners, L.P. (NYSE: APL) (“Atlas Pipeline”), and Williams. These new agreements superseded the previous master gas gathering agreement and omnibus agreement between the Company and Atlas Pipeline. As part of the transaction, the Company completed the sale of two natural gas processing plants and associated pipelines located in southwestern Pennsylvania for cash of $10.0 million to Laurel Mountain. The Company used the net proceeds from the sale to reduce borrowings under its revolving credit facility. Williams is the operator of Laurel Mountain’s assets.
Merger with Atlas America
On April 27, 2009, Atlas Energy and Atlas America, Inc. (NASDAQ: ATLS) (“Atlas America”), which owns approximately 48% of the Class B common units and Class A units including the management incentive interests in Atlas Energy, jointly announced that they executed a definitive merger agreement, pursuant to which a newly formed subsidiary of Atlas America will merge with and into Atlas Energy, with Atlas Energy surviving as a wholly owned subsidiary of Atlas America. In the merger, each Class B common unit of Atlas Energy not currently held by Atlas America will be converted into 1.16 shares of Atlas America common stock, and Atlas America will be renamed “Atlas Energy, Inc.” The Atlas America Board of Directors has approved the merger agreement and has resolved to recommend that the Atlas America stockholders vote in favor of the transactions contemplated by the merger agreement. The Atlas Energy board of directors and a special committee of Atlas Energy directors comprised entirely of independent directors have also approved the merger agreement and have resolved to recommend that the Atlas Energy unitholders vote in favor of the merger.
The transaction is expected to create a stronger balance sheet and capital structure at the combined entity, along with a lower cost of capital. The net debt outstanding at Atlas Energy will be reduced by cash on hand at Atlas America. Furthermore, liquidity should be greatly improved from the larger, newly combined company. The retention and investment of future cash flows will also reduce the need to raise capital from outside sources under unfavorable market conditions.
The transaction is subject to approval by holders of a majority of the outstanding Atlas America common stock and a majority of the outstanding Atlas Energy Class B units, and other customary closing conditions.
(1) Atlas Energy’s subsidiary serves as managing general partner of the partnership. A written prospectus meeting the requirements of Section 10 of the Securities Act may be obtained when available from Anthem Securities, Inc. (a subsidiary of Atlas Energy), 1550 Coraopolis Heights Rd. – 2nd Floor, Moon Township, PA 15108.
Appalachia Segment Results
Michigan/Indiana Segment Results
Corporate and Other
Hedging Summary
The Company entered into additional hedging contracts during the second quarter 2009 for its natural gas production.
A summary of the Company’s current equity hedge positions as of August 10, 2009 is as follows:
Natural Gas
Fixed Price Swaps
Average Production Period Fixed Price Volumes Ended December 31, (per mcf)(1)(2) (per mcf)(1) 2009(3) $ 8.37 15,082,745 2010 $ 7.91 22,876,782 2011 $ 7.19 15,181,497 2012 $ 7.24 13,926,950 2013 $ 7.259,884,650
Costless Collars
Average Average Production Period Floor Price Ceiling Price Volumes Ended December 31, (per mcf)(1)(2) (per mcf)(1)(2) (per mcf)(1) 2009(3) $ 11.25 $ 15.68 85,572 2010 $ 8.03 $ 9.22 2,420,926 2011 $ 6.46 $ 7.66 7,045,685 2012 $ 6.64 $ 7.86 3,066,981 2013 $ 6.71 $ 8.04 4,152,862Crude Oil
Fixed Price Swaps
Average Production Period Fixed Price Volumes Ended December 31, (per bbl)(1) (bbls)(1) 2009(3) $ 99.32 21,691 2010 $ 97.30 36,977 2011 $ 69.77 32,194 2012 $ 71.55 26,139 2013 $ 72.26 5,900Costless Collars
Average Average Production Period Floor Price Ceiling Price Volumes Ended December 31, (per bbl)(1) (per bbl)(1) (bbls)(1) 2009(3) $ 85.00 $ 116.56 13,371 2010 $ 85.00 $ 112.72 23,442 2011 $ 60.00 $ 80.92 20,361 2012 $ 60.00 $ 86.50 16,777 2013 $ 60.00 $ 88.90 3,540_______________________________________________________________
(1) “Mcf” represents thousand cubic feet; “bbl” represents barrel. (2) Includes an estimated positive basis differential and Btu (British thermal units) adjustment. (3) Reflects hedges covering the last six months of 2009.Interested parties are invited to access the live webcast of Atlas Energy’s second quarter 2009 results on Tuesday, August 11, 2009 at 9:00 am ET by going to the Investor Relations section of Atlas Energy’s website at www.atlasenergyresources.com. An audio replay of the conference call will also be available beginning at 11:00 am ET on Tuesday, August 11, 2009. To access the replay, dial 1-888-286-8010 and enter conference code 11875571.
Atlas Energy Resources, LLC is one of the largest independent natural gas producers in the Appalachian and Michigan Basins. The Company is also the country’s largest sponsor and manager of tax-advantaged energy investment partnerships that finance the exploration and development of the Company’s acreage. For more information, visit Atlas Energy’s website at www.atlasenergyresources.com or contact investor relations at InvestorRelations@atlasamerica.com.
Atlas America, Inc. owns approximately 48% of the Class B common unit interests and all of the management incentive interests in Atlas Energy Resources, LLC. Atlas America, Inc. also owns 1.1 million common units in Atlas Pipeline Partners, L.P. (NYSE: APL) and a 64% interest in Atlas Pipeline Holdings, L.P. (NYSE: AHD). For more information, please visit our website at www.atlasamerica.com, or contact Investor Relations at InvestorRelations@atlasamerica.com.
Atlas Pipeline Partners, L.P. is active in the transmission, gathering and processing segments of the midstream natural gas industry. In the Mid-Continent region of Oklahoma, southern Kansas, northern and western Texas and the Texas panhandle, APL owns and operates eight active gas processing plants and a treating facility, as well as approximately 8,750 miles of active intrastate gas gathering pipeline. In Appalachia, APL is a 49% joint venture partner with Williams in Laurel Mountain Midstream, LLC, which manages the natural gas gathering system in that region, namely from the Marcellus Shale in southwestern Pennsylvania. For more information, visit the Partnership’s website at www.atlaspipelinepartners.com or contact investorrelations@atlaspipelinepartners.com.
Atlas Pipeline Holdings, L.P. is a limited partnership which owns and operates the general partner of Atlas Pipeline Partners, L.P., through which it owns a 2% general partner interest, all the incentive distribution rights and approximately 5.8 million common and 15,000 $1,000 par value 12% preferred limited partner units of Atlas Pipeline Partners, L.P.
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. Atlas Energy Resources, LLC (“Atlas Energy”) 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 or assumptions regarding whether the proposed merger between Atlas America, Inc. (“Atlas America”) and Atlas Energy will occur, statements about the benefits of such proposed merger, including future financial and operating results, the combined company’s 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 price; the possibility that the proposed merger might not occur; inability to obtain capital needed for operations; the level of indebtedness; changes in government environmental policies; tax consequences of business transactions; and other risks, assumptions and uncertainties detailed from time to time in either company’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including each company’s report on Form 10-K for the year ended December 31, 2008. There can be no assurance that the transactions described in this document will be consummated. Forward-looking statements speak only as of the date hereof, and each company assumes no obligation to update such statements.
Additional Information About the Merger
In connection with the proposed merger between Atlas America and Atlas Energy, Atlas America filed with the SEC a Registration Statement on Form S-4 that includes a joint proxy statement of Atlas America and Atlas Energy, which will also constitute a prospectus of Atlas America. Each of Atlas America and Atlas Energy will mail the joint proxy statement/prospectus to their respective equity holders.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER IF AND WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
Investors may obtain free copies of the joint proxy statement/prospectus when it becomes available, as well as other filings containing information about Atlas America and Atlas Energy, without charge, at the SEC’s website at www.sec.gov. In addition, the documents filed with the SEC by Atlas America may be obtained free of charge by directing such request to: Investor Relations, Atlas America, Inc., Westpointe Corporate Center One, 1550 Coraopolis Heights, Moon Township, PA 15108, (412) 262-2830. These documents may also be obtained for free from Atlas America’s Investor Relations website at www.atlasamerica.com. The documents filed with the SEC by Atlas Energy Resources may be obtained free of charge by directing such request to: Investor Relations, Atlas Energy Resources, LLC, Westpointe Corporate Center One, 1550 Coraopolis Heights, Moon Township, PA 15108, (412) 262-2830. These documents may also be obtained for free from Atlas Energy Resource’s Investor Relations website at www.atlasenergyresources.com.
Atlas America, Atlas Energy and their respective directors and executive officers and other members of management and employees may be deemed to participate in the solicitation of proxies in respect of the proposed transaction. Information regarding Atlas America’s directors and executive officers is available in Atlas America’s proxy statement for its 2008 annual meeting of shareholders, which was filed with the SEC on May 8, 2008, and information regarding Atlas Energy’s directors and executive officers is available in Atlas Energy’s proxy statement for its 2008 annual meeting of shareholders, which was filed with the SEC on May 8, 2008. Additional information regarding the interests of such potential participants will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC if and when they become available.
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
ATLAS ENERGY RESOURCES, LLC
FINANCIAL SUMMARY
(unaudited; in thousands, except per unit data)
Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 REVENUES Well construction and completion $ 63,367 $ 122,341 $ 175,735 $ 226,479 Gas and oil production 69,979 78,957 141,922 155,183 Administration and oversight 2,642 5,137 6,494 10,154 Well services 4,806 5,266 9,899 10,064 Gathering 5,388 5,855 10,112 10,265 Total revenues 146,182 217,556 344,162 412,145 COSTS AND EXPENSES Well construction and completion 53,701 106,384 149,098 196,939 Gas and oil production 12,712 15,205 27,294 28,286 Well services 2,120 2,650 4,544 5,062 Gathering fee 6,485 5,610 10,978 9,733 General and administrative 12,268 12,286 26,817 24,078 Depreciation, depletion and amortization 27,275 22,948 55,303 44,758 Loss on asset sale 4,250 — 4,250 — Total costs and expenses 118,811 165,083 278,284 308,856 OPERATING INCOME 27,371 52,473 65,878 103,289 OTHER INCOME (EXPENSE): Interest expense (15,124) (14,563) (28,108) (27,868) Other, net (1) 466 79 519 Total other expense, net (15,125) (14,097) (28,029) (27,349) Net income 12,246 38,376 37,849 75,940 Income attributable to non-controlling interests (15) (17) (30) (38) Net income attributable to members’ interests $ 12,231 $ 38,359 $ 37,819 $ 75,902 Allocation of net income attributable to members’ interests: Class A member’s units $ 245 $ 2,465 $ (7,199) $ 4,419 Class B members’ units 11,986 35,894 45,018 71,483 Net income attributable to members’ interests $ 12,231 $ 38,359 $ 37,819 $ 75,902 Net income attributable to Class B members per unit: Basic $ 0.19 $ 0.57 $ 0.70 $ 1.15 Diluted $ 0.19 $ 0.57 $ 0.70 $ 1.14 Weighted Average Class B members’ units outstanding: Basic 63,381 62,144 63,381 61,427 Diluted 63,381 62,819 63,381 61,912 June 30, December 31, 2009 2008Balance Sheet Data (at period end):
Cash and cash equivalents
$ 4,849 $ 5,655Property, plant and equipment, net
1,988,375 1,963,891Total assets
2,304,813 2,291,317Total debt
862,289 873,655Total members’ equity
1,064,937 1,039,523ATLAS ENERGY RESOURCES, LLC
FINANCIAL INFORMATION
(unaudited; in thousands)
Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Capital Expenditure data: Maintenance capital expenditures $ 12,975 $ 12,975 $ 25,950 $ 25,950 Expansion capital expenditures 26,231 67,078 70,463 109,720 Total $ 39,206 $ 80,053 $ 96,413 $ 135,670 Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Reconciliation of net income to non-GAAP measures(1): Net income $ 12,246 $ 38,376 $ 37,849 $ 75,940 Income attributable to non-controlling interests (15) (17) (30) (38) Depreciation, depletion and amortization 27,275 22,948 55,303 44,758 Interest expense 15,124 14,563 28,108 27,868 EBITDA 54,630 75,870 121,230 148,528 Adjustment to reflect cash impact of derivatives(2) 29,019 2,920 30,623 7,948 Non-cash loss on sale of assets 4,250 — 4,250 — Non-cash compensation expense 1,453 1,339 2,981 2,659 Adjusted EBITDA 89,352 80,129 159,084 159,135 Interest expense (15,124) (14,563) (28,108) (27,868) Amortization of deferred financing costs(included within interest expense)
1,002
742
1,667
1,512
Maintenance capital expenditures (12,975) (12,975) (25,950) (25,950) Distributable cash flow $ 62,255 $ 53,333 $ 106,693 $ 106,829 (1) EBITDA, adjusted EBITDA and distributable cash flow are non-GAAP (generally accepted accounting principles) financial measures under the rules of the Securities and Exchange Commission. Management of the Company believes that EBITDA, adjusted EBITDA and distributable cash flow provide additional information for evaluating the Company’s ability to make distributions to its unitholders, among other things. These measures are widely used by commercial banks, investment bankers, rating agencies and investors in evaluating performance relative to peers and pre-set performance standards. EBITDA is also a financial measurement that, with certain negotiated adjustments, is utilized within the Company’s financial covenants under its credit facility. EBITDA, adjusted EBITDA and distributable cash flow are not measures of financial performance under GAAP and, accordingly, should not be considered as a substitute for net income, operating income, or cash flows from operating activities in accordance with GAAP. (2) Consists of (i) $28.5 million of cash proceeds received in May 2009 from the early settlement of natural gas and oil derivative positions and (ii) cash proceeds received from the settlement of ineffective derivative gains recognized in connection with the acquisition of the Company’s Michigan assets in June 2007 but not reflected in its consolidated statements of income for the three and six months ended June 30, 2009 and 2008.ATLAS ENERGY RESOURCES, LLC
Operating Highlights
Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Production revenues (in thousands): Gas $ 66,897 $ 74,217 $ 136,771 $ 147,092 Oil $ 3,082 $ 4,740 $ 5,151 $ 8,091 Production volume:(1) (2) Appalachia: Gas (Mcfd) 40,770 32,259 40,341 31,272 Oil (Bpd) 471 419 432 409 Total (Mcfed) Oil (Bbls/day) 43,596 34,773 42,933 33,726 Michigan: Gas (Mcfd) 58,058 59,767 58,154 59,411 Oil (Bpd) 11 15 9 11 Total (Mcfed) Oil (Bbls/day) 58,124 59,857 58,208 59,477 Total (Mcfed) 101,720 94,630 101,141 93,203 Average sales prices: (2) Gas (per Mcf) (3)(4) $ 7.49 $ 9.21 $ 7.79 $ 9.39 Oil (per Bbl)(5) $ 70.23 $ 120.00 $ 67.66 $ 106.02 Production costs(2)(6) Lease operating expenses as a percent of production revenues 11% 9% 10% 9% Lease operating expenses per Mcfe $ 0.78 $ 0.83 $ 0.84 $ 0.81 Production taxes per Mcfe 0.14 0.43 0.17 0.38 Total production costs per Mcfe $ 0.92 $ 1.26 $ 1.01 $ 1.19 Depletion per Mcfe(2) $ 2.82 $ 2.56 $ 2.90 $ 2.54 (1) Production quantities consist of the sum of (i) the Company’s proportionate share of production from wells in which it has a direct interest, based on the Company’s proportionate net revenue interest in such wells, and (ii) the Company’s proportionate share of production from wells owned by the investment partnerships in which the Company has an interest, based on its equity interest in each such partnership and based on each partnership’s proportionate net revenue interest in these wells. (2) “Mcf” and “Mcfd” represent thousand cubic feet and thousand cubic feet per day; “Mcfe” and “Mcfed” represent thousand cubic feet equivalents and thousand cubic feet equivalents per day, and “Bbl” and “Bpd” represent barrels and barrels per day. Barrels are converted to Mcfe using the ratio of six Mcf’s to one barrel. (3) The Company’s average sales price for gas before the effects of financial hedging were $3.50 and $11.21 per Mcf for the three months ended June 30, 2009 and 2008, respectively, and $4.35 and $9.79 per Mcf for the six months ended June 30, 2009 and 2008, respectively. (4) Includes cash proceeds received from the settlement of derivative contracts of $0.5 million and $2.9 million for the three months ended June 30, 2009 and 2008, respectively, and $2.1 million and $7.9 million for the six months ended June 30, 2009 and 2008, respectively. The cash proceeds received from the settlement of derivative contracts were not included as gas revenue for the respective periods. (5) The Company’s average sales price for oil before the effects of financial hedging was $57.16 and $125.99 per barrel for the three months ended June 30, 2009 and 2008, respectively, and $46.26 and $109.12 per barrel for the six months ended June 30, 2009 and 2008, respectively. (6) Production costs include labor to operate the wells and related equipment, repairs and maintenance, materials and supplies, property taxes, severance taxes, insurance and production overhead.
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