Atlas Energy, L.P. Reports Operating and Financial Results for the Third Quarter 2013
PHILADELPHIA--(BUSINESS WIRE)--Atlas Energy, L.P. (NYSE: ATLS) (“Atlas Energy” or “ATLS”) today reported operating and financial results for the third quarter 2013.
Edward E. Cohen, Chief Executive Officer of Atlas Energy, stated, “We continue our commitment to providing leading returns to our unitholders, as we have realized the highest total return in the MLP industry over the past several years. This has been possible due to the extraordinary growth of our subsidiaries, Atlas Resource and Atlas Pipeline, who have both substantially grown organically and have completed a combined $3.0 billion in accretive acquisitions over the past 18 months.”
ATLS declared a cash distribution of $0.46 per limited partner unit for the third quarter 2013, which represents a $0.02 per unit, or 4.5%, increase over the second quarter 2013, and a 70% increase over the prior year third quarter. The third quarter 2013 ATLS distribution will be paid on November 19, 2013 to holders of record as of November 6, 2013.
Distributions from Subsidiaries
- On October 24, 2013, Atlas Resource Partners, L.P. (NYSE: ARP), Atlas Energy’s E&P subsidiary, increased its quarterly cash distribution to $0.56 per unit for the third quarter 2013, a 4% increase from ARP’s second quarter 2013 distribution, and a 30% increase over the prior year third quarter distribution. ATLS will receive approximately $16.3 million of cash distributions based upon ARP’s third quarter 2013 distribution.
- On October 23, 2013, Atlas Pipeline Partners, L.P. (NYSE: APL), Atlas Energy’s midstream subsidiary, declared a distribution for the third quarter 2013 of $0.62 per unit, a 9% increase from APL’s prior year quarter. ATLS will receive approximately $9.6 million of cash distributions based upon APL’s third quarter 2013 distribution.
Recent Events
Atlas Pipeline Mid Continent Expansion Projects
APL recently announced several new expansion projects to its existing natural gas gathering and processing systems in the Mid Continent. APL has approved to extend the WestTX gathering system's footprint further into Martin County, Texas through a series of growth projects which will service the anticipated needs of their producer customers. APL will lay a high pressure gathering line into Martin County as well as add compression to increase utilization of WestTX's existing assets, including the recently announced Edward plant. In addition, this extension of the WestTX system is expected to accelerate APL’s need to install additional processing capacity, potentially by the end of 2015.
In the Woodford Shale in Southern Oklahoma, activity behind both the Velma and Arkoma systems continues to increase, namely from the emerging South Central Oklahoma Oil Province (SCOOP) play, which has attracted significant producer interest. APL has entered into fixed fee arrangements with some of these producers and, as a result, intends to add gathering infrastructure at an expected cost of $40 million to facilitate this anticipated growth. The Velma system's processing capacity today is fully utilized, and APL intends to provide capacity for the incremental SCOOP production by laying approximately 55 miles of pipeline between the Velma system and the Arkoma system. The Arkoma system is nearly fully utilized today, but will expand by an additional 120 million cubic feet per day (Mmcfd) upon installation of the Stonewall plant, expected in the first quarter of 2014. The Stonewall plant is expandable to 200 Mmcfd with minimal capital outlay.
Arc Logistics Partners LP Initial Public Offering
On November 6, 2013, Arc Logistics Partners, LP (ARCX), a master limited partnership which is involved in terminalling, storage, throughput and transloading of crude oil and petroleum products, began trading publicly on the New York Stock Exchange under the ticker symbol “ARCX”. ARCX’s cash flows are primarily fee-based under multi-year contracts, and their assets are located on the East Coast, Gulf Coast and Midwest regions of the U.S. Lightfoot Capital Partners, LP (“Lightfoot”), a private partnership, owns and controls the general partner of ARCX. Atlas Energy owns an approximate 16% interest in Lightfoot’s general partner, as well as an approximate 12% limited partner interest in Lightfoot. Atlas Energy expects to benefit from its interest in Lightfoot’s general partner as ARCX’s operations grow and distributions to unitholders increase in the future.
Atlas Resource Third Quarter 2013 Highlights
ARP’s average net daily production for the third quarter 2013 was approximately 261.4 million cubic feet of natural gas equivalents per day (“Mmcfed”), an increase of approximately 96% from the second quarter 2013. The increase in net production from the second quarter 2013 was due primarily to the recently acquired producing assets from EP Energy in July 2013, located in the Raton Basin (New Mexico), Black Warrior Basin (Alabama) and County Line region (Wyoming). Production also increased from additional wells connected in the third quarter in several of ARP’s key operating areas, including the Marcellus Shale, Utica Shale, Marble Falls and Mississippi Lime.
ATLS owns 100% of the general partner Class A units and the incentive distribution rights, and a 37% 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 third quarter 2013 earnings release for additional details on its financial results.
Atlas Pipeline Third Quarter 2013 Highlights
During the third quarter 2013, APL increased inlet volumes on its gathering and processing systems in the Mid Continent. APL processed an average of over 1.37 billion cubic feet per day (“Bcfd”) of natural gas in the third quarter 2013 amongst its WestOK, WestTX, Velma, Arkoma and SouthTX systems, approximately 10% higher than the second quarter 2013 and 78% higher than the prior year comparable quarter’s volumes. APL attained record high volumes with over 120,000 barrels per day (“bpd”) of natural gas liquids generated from its five processing systems in highly prolific oil & gas basins, which primarily reside in Oklahoma and Texas.
ATLS owns a 2.0% general partner interest, all of the incentive distribution rights, and a 6.2% 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 third quarter 2013 earnings release for additional details on its financial results.
Hedge Positions
In connection with its acquisition of the natural gas proved reserves in the Arkoma Basin (“Arkoma Assets”), ATLS entered into direct natural gas hedge positions for a substantial portion of its production through 2018. A summary of ATLS’s derivative positions as of November 7, 2013 is provided in the financial tables of this release.
Corporate Expenses
- Cash general and administrative expense, excluding amounts attributable to APL and ARP, was $1.7 million for the third quarter 2013, $0.4 million lower than the second quarter 2013. The decrease from second quarter 2013 was due primarily to a decrease in seasonal corporate expenses incurred during the second quarter, including audit and tax services. Please refer to the consolidating statements of operations provided in the financial tables of this release.
- Cash interest expense was $2.9 million for the third quarter 2013, an increase of $2.5 million compared to the second quarter 2013. The increase in interest expense is due primarily to entering into a $240 million term loan credit facility in July 2013, which was used to fund the acquisition of the Arkoma assets from EP Energy and the purchase of the Class C convertible preferred units from ARP. As of September 30, 2013, ATLS had $240 million of total debt, with no borrowings outstanding under its $50 million revolving credit facility, and a cash position of approximately $18 million.
Interested parties are invited to access the live webcast of an investor call with management regarding Atlas Energy, L.P.’s third quarter 2013 results on Friday, November 8, 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 November 8, 2013 by dialing 888-286-8010, passcode: 71563674.
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 37% 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 6% 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 12,000 producing natural gas and oil wells, located primarily in Appalachia, the Barnett Shale (TX), the Raton Basin (NM) and Black Warrior Basin (AL). 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 14 active gas processing plants, 18 gas treating facilities, as well as approximately 10,600 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 and production potential, planned expansions of capacity and other capital expenditures, 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; ability to realize the benefits of its acquisition; changes in commodity prices and hedge positions; 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Revenues: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Gas and oil production | $ | 83,032 | $ | 24,699 | $ | 176,190 | $ | 61,323 | ||||||||
| Well construction and completion | 10,964 | 36,317 | 92,293 | 92,277 | ||||||||||||
| Gathering and processing | 582,961 | 297,868 | 1,538,970 | 859,429 | ||||||||||||
| Administration and oversight | 4,447 | 4,440 | 8,923 | 8,586 | ||||||||||||
| Well services | 5,023 | 5,086 | 14,703 | 15,344 | ||||||||||||
| Gain (loss) on mark-to-market derivatives(1) | (24,517 | ) | (18,907 | ) | (9,493 | ) | 36,905 | |||||||||
| Other, net | (11,921 | ) | 5,270 | (5,700 | ) | 8,575 | ||||||||||
| Total revenues | 649,989 | 354,773 | 1,815,886 | 1,082,439 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Gas and oil production | 30,586 | 7,295 | 64,837 | 16,247 | ||||||||||||
| Well construction and completion | 9,534 | 31,581 | 80,255 | 79,882 | ||||||||||||
| Gathering and processing | 492,691 | 245,074 | 1,298,300 | 710,470 | ||||||||||||
| Well services | 2,386 | 2,232 | 7,009 | 7,076 | ||||||||||||
| General and administrative | 61,914 | 33,991 | 156,446 | 108,846 | ||||||||||||
| Chevron transaction expense | — | 7,670 | — | 7,670 | ||||||||||||
| Depreciation, depletion and amortization | 94,067 | 37,079 | 214,313 | 99,563 | ||||||||||||
| Total costs and expenses | 691,178 | 364,922 | 1,821,160 | 1,029,754 | ||||||||||||
| Operating income (loss) | (41,189 | ) | (10,149 | ) | (5,274 | ) | 52,685 | |||||||||
| Gain (loss) on asset sales and disposal | (661 | ) | 2 | (3,554 | ) | (7,019 | ) | |||||||||
| Interest expense | (38,513 | ) | (11,245 | ) | (91,854 | ) | (30,630 | ) | ||||||||
| Loss on early extinguishment of debt | — | — | (26,601 | ) | — | |||||||||||
| Net income (loss) before tax | (80,363 | ) | (21,392 | ) | (127,283 | ) | 15,036 | |||||||||
| Income tax benefit | 817 | — | 854 | — | ||||||||||||
| Net income (loss) | (79,546 | ) | (21,392 | ) | (126,429 | ) | 15,036 | |||||||||
| Loss (income) attributable to non-controlling interests | 52,022 | 9,982 | 78,062 | (52,574 | ) | |||||||||||
| Net loss attributable to common limited partners | $ | (27,524 | ) | $ | (11,410 | ) | $ | (48,367 | ) | $ | (37,538 | ) | ||||
| Net loss attributable to common limited partners per unit: | ||||||||||||||||
| Basic and Diluted | $ | (0.54 | ) | $ | (0.22 | ) | $ | (0.94 | ) | $ | (0.73 | ) | ||||
| Weighted average common limited partner units outstanding: | ||||||||||||||||
| Basic and Diluted | 51,390 | 51,335 | 51,380 | 51,316 | ||||||||||||
|
(1) |
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) |
||||||
|
September 30, |
December 31, |
|||||
|
ASSETS |
2013 |
2012 |
||||
|
Current assets: |
||||||
| Cash and cash equivalents | $ | 29,498 | $ | 36,780 | ||
| Accounts receivable | 289,817 | 196,249 | ||||
| Current portion of derivative asset | 25,733 | 35,351 | ||||
| Subscriptions receivable | 13,900 | 55,357 | ||||
| Prepaid expenses and other | 85,421 | 45,255 | ||||
| Total current assets | 444,369 | 368,992 | ||||
|
Property, plant and equipment, net |
4,958,551 | 3,502,609 | ||||
|
Intangible assets, net |
547,014 | 200,680 | ||||
|
Investment in joint venture |
238,221 | 86,002 | ||||
|
Goodwill, net |
535,721 | 351,069 | ||||
|
Long-term derivative asset |
37,504 | 16,840 | ||||
|
Long-term derivative receivable from Drilling Partnerships |
182 | − | ||||
|
Other assets, net |
123,529 | 71,002 | ||||
| $ | 6,885,091 | $ | 4,597,194 | |||
|
LIABILITIES AND PARTNERS’ CAPITAL |
||||||
|
Current liabilities: |
||||||
| Current portion of long-term debt | $ | 3,010 | $ | 10,835 | ||
| Accounts payable | 147,114 | 119,028 | ||||
| Liabilities associated with drilling contracts | − | 67,293 | ||||
| Accrued producer liabilities | 161,808 | 109,725 | ||||
| Current portion of derivative liability | 1,461 | − | ||||
| Current portion of derivative payable to Drilling Partnerships | 4,932 | 11,293 | ||||
| Accrued interest | 39,472 | 11,556 | ||||
| Accrued well drilling and completion costs | 47,149 | 47,637 | ||||
| Accrued liabilities | 126,124 | 103,291 | ||||
| Total current liabilities | 531,070 | 480,658 | ||||
|
Long-term debt, less current portion |
2,840,921 | 1,529,508 | ||||
|
Long-term derivative liability |
− | 888 | ||||
|
Long-term derivative payable to Drilling Partnerships |
− | 2,429 | ||||
|
Deferred income taxes, net |
34,696 | 30,258 | ||||
|
Asset retirement obligations and other |
97,650 | 73,605 | ||||
|
Commitments and contingencies |
||||||
|
Partners’ Capital: |
||||||
| Common limited partners’ interests | 405,285 | 456,171 | ||||
| Accumulated other comprehensive income | 19,941 | 9,699 | ||||
| 425,226 | 465,870 | |||||
| Non-controlling interests | 2,955,528 | 2,013,978 | ||||
| Total partners’ capital | 3,380,754 | 2,479,848 | ||||
| $ | 6,885,091 | $ | 4,597,194 | |||
|
ATLAS ENERGY, L.P. |
||||||||||||||||
|
Financial and Operating Highlights |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net loss attributable to common limited partners per unit - basic | $ | (0.54 | ) | $ | (0.22 | ) | $ | (0.94 | ) | $ | (0.73 | ) | ||||
| Cash distributions paid per unit(1) | $ | 0.46 | $ | 0.27 | $ | 1.21 | $ | 0.78 | ||||||||
| Production volume: (2)(3) | ||||||||||||||||
| ATLAS ENERGY: | ||||||||||||||||
| Natural gas (Mcfd) | 8,250 | − | 2,780 | − | ||||||||||||
| Oil (Bpd) | − | − | − | − | ||||||||||||
| Natural gas liquids (Bpd) | − | − | − | − | ||||||||||||
| Total (Mcfed) | 8,250 | − | 2,780 | − | ||||||||||||
| ATLAS RESOURCES: | ||||||||||||||||
| Natural gas (Mcfd) | 191,020 | 88,208 | 134,945 | 60,531 | ||||||||||||
| Oil (Bpd) | 1,517 | 277 | 1,301 | 291 | ||||||||||||
| Natural gas liquids (Bpd) | 3,734 | 1,067 | 3,441 | 652 | ||||||||||||
| Total (Mcfed) | 222,529 | 96,275 | 163,397 | 66,189 | ||||||||||||
| TOTAL: | ||||||||||||||||
| Natural gas (Mcfd) | 199,270 | 88,208 | 137,725 | 60,531 | ||||||||||||
| Oil (Bpd) | 1,517 | 277 | 1,301 | 291 | ||||||||||||
| Natural gas liquids (Bpd) | 3,734 | 1,067 | 3,441 | 652 | ||||||||||||
| Total (Mcfed) | 230,779 | 96,275 | 166,178 | 66,189 | ||||||||||||
| Average sales prices:(3) | ||||||||||||||||
| Natural gas (per Mcf) (4) | $ | 3.46 | $ | 3.01 | $ | 3.39 | $ | 3.42 | ||||||||
| Oil (per Bbl)(5) | $ | 93.07 | $ | 87.86 | $ | 91.19 | $ | 95.70 | ||||||||
| Natural gas liquids (per gallon) | $ | 0.69 | $ | 0.61 | $ | 0.67 | $ | 0.79 | ||||||||
| Production costs:(3)(6) | ||||||||||||||||
| ATLAS ENERGY: | ||||||||||||||||
| Lease operating expenses per Mcfe | $ | 0.77 | $ | − | $ | 0.77 | $ | − | ||||||||
| Production taxes per Mcfe | 0.21 | − | 0.21 | − | ||||||||||||
| Transportation and compression expenses per Mcfe | 0.56 | − | 0.56 | − | ||||||||||||
| Total production costs per Mcfe | $ | 1.54 | $ | − | $ | 1.54 | $ | − | ||||||||
| ATLAS RESOURCES: | ||||||||||||||||
| Lease operating expenses per Mcfe | $ | 1.15 | $ | 0.75 | $ | 1.12 | $ | 0.80 | ||||||||
| Production taxes per Mcfe | 0.11 | 0.13 | 0.17 | 0.12 | ||||||||||||
| Transportation and compression expenses per Mcfe | 0.24 | 0.25 | 0.22 | 0.27 | ||||||||||||
| Total production costs per Mcfe | $ | 1.50 | $ | 1.13 | $ | 1.51 | $ | 1.19 | ||||||||
| TOTAL: | ||||||||||||||||
| Lease operating expenses per Mcfe | $ | 1.13 | $ | 0.75 | $ | 1.11 | $ | 0.80 | ||||||||
| Production taxes per Mcfe | 0.11 | 0.13 | 0.17 | 0.12 | ||||||||||||
| Transportation and compression expenses per Mcfe | 0.25 | 0.25 | 0.22 | 0.27 | ||||||||||||
| Total production costs per Mcfe | $ | 1.50 | $ | 1.13 | $ | 1.51 | $ | 1.19 | ||||||||
| ATLAS PIPELINE: | ||||||||||||||||
|
Production volume:(3) |
||||||||||||||||
| Gathered gas volume(Mcfd) | 1,484,071 | 860,026 | 1,412,616 | 780,426 | ||||||||||||
| Processed gas volume (Mcfd) | 1,372,388 | 768,988 | 1,247,676 | 696,445 | ||||||||||||
| Residue gas volume (Mcfd) | 1,160,608 | 658,846 | 1,091,665 | 579,771 | ||||||||||||
| NGL volume (Bpd) | 120,126 | 56,363 | 113,292 | 59,557 | ||||||||||||
| Condensate volume (Bpd) | 4,906 | 3,756 | 4,371 | 3,417 | ||||||||||||
| Average sales prices:(3) | ||||||||||||||||
| Natural gas (per Mcf) | $ | 3.34 | $ | 2.60 | $ | 3.46 | $ | 2.39 | ||||||||
| Condensate (per Bbl) | $ | 101.48 | $ | 86.65 | $ | 92.82 | $ | 90.07 | ||||||||
| Natural gas liquids (per gallon) | $ | 0.92 | $ | 0.87 | $ | 0.87 | $ | 0.90 | ||||||||
|
(1) |
Represents the cash distributions declared per limited partner unit for the respective period and paid by ATLS within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. | |
|
(2) |
Production quantities consist of the sum of (i) the proportionate share of production from wells in which ATLS and ARP have a direct interest, based on the proportionate net revenue interest in such wells, and (ii) ARP’s proportionate share of production from wells owned by the investment partnerships in which ARP 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. | |
|
(3) |
“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. | |
|
(4) |
Average sales price for natural gas before the effects of financial hedging was $3.21 per Mcf and $2.46 per Mcf for the three months ended September 30, 2013 and 2012, respectively, and $3.20 per Mcf and $2.60 per Mcf for the nine months ended September 30, 2013 and 2012, respectively. These amounts exclude the impact of subordination of ARP’s production revenues to investor partners within its investor partnerships. Including the effects of this subordination, average natural gas sales prices were $3.28 per Mcf ($3.02 per Mcf before the effects of financial hedging) and $2.46 per Mcf ($1.91 per Mcf before the effects of financial hedging) for the three months ended September 30, 2013 and 2012, respectively, and $3.12 per Mcf ($2.93 per Mcf before the effects of financial hedging) and $2.88 per Mcf ($2.07 per Mcf before the effects of financial hedging) for the nine months ended September 30, 2013 and 2012, respectively. | |
|
(5) |
Average sales price for oil before the effects of financial hedging was $104.03 per barrel and $84.30 per barrel for the three months ended September 30, 2013 and 2012, respectively, and $96.50 per barrel and $93.38 per barrel for the nine months ended September 30, 2013 and 2012, respectively. | |
|
(6) |
Production costs include labor to operate the wells and related equipment, repairs and maintenance, materials and supplies, property taxes, severance taxes, insurance, production overhead and transportation and compression expenses. These amounts exclude the effects of ARP’s proportionate share of lease operating expenses associated with subordination of production revenue to investor partners within ARP’s investor partnerships. Including the effects of these costs, total lease operating expenses per Mcfe were $1.08 per Mcfe ($1.44 per Mcfe for total production costs) and $0.44 per Mcfe ($0.82 per Mcfe for total production costs) for the three months ended September 30, 2013 and 2012, respectively, and $1.03 per Mcfe ($1.43 per Mcfe for total production costs) and $0.50 per Mcfe ($0.90 per Mcfe for total production costs) for the nine months ended September 30, 2013 and 2012, respectively. | |
|
ATLAS ENERGY, L.P. |
||||||||||||||||
|
Financial Information |
||||||||||||||||
|
(unaudited; in thousands except per unit amounts) |
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Reconciliation of net loss to non-GAAP measures(1): | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Net income (loss) | $ | (79,546 | ) | $ | (21,392 | ) | $ | (126,429 | ) | $ | 15,036 | |||||
| E&P Operations EBITDA prior to spinoff on March 5, 2012(2) | − | − | − | 9,111 | ||||||||||||
| Atlas Resource net loss attributable to ATLS common limited partners |
13,317 |
6,845 |
19,766 |
23,444 |
||||||||||||
| Atlas Resource cash distributions earned by ATLS(3) | 16,282 | 9,363 | 41,123 | 20,590 | ||||||||||||
| Atlas Pipeline net income attributable to ATLS common limited partners |
(78 |
) |
(392 |
) |
(3,613 |
) |
(12,842 |
) |
||||||||
| Atlas Pipeline cash distributions earned by ATLS(3) | 9,580 | 5,689 | 26,395 | 16,570 | ||||||||||||
| Non-recurring spinoff and acquisition costs | 3,331 | − | 4,488 | 8,370 | ||||||||||||
| Amortization of deferred finance costs | 519 | 50 | 665 | 179 | ||||||||||||
| Depreciation, depletion and amortization | 1,331 | − | 1,331 | − | ||||||||||||
| Non-cash stock compensation expense | 6,370 | 4,327 | 17,724 | 13,626 | ||||||||||||
| Maintenance capital expenditures(4) | (200 | ) | − | (200 | ) | (1,231 | ) | |||||||||
| Other non-cash adjustments | (2,348 | ) | (357 | ) | (2,099 | ) | (419 | ) | ||||||||
| Amortization of premiums paid on swaption derivative contracts associated with asset acquisition(5) |
2,060 |
− |
2,287 |
− |
||||||||||||
| Loss(income) attributable to non-controlling interests | 52,022 | 9,982 | 78,062 | (52,574 | ) | |||||||||||
| Distributable Cash Flow(1) | $ | 22,640 | $ | 14,115 | $ | 59,500 | $ | 39,860 | ||||||||
| Supplemental Adjusted EBITDA and Distributable Cash Flow Summary: | ||||||||||||||||
| Atlas Resource Cash Distributions Earned(3): | ||||||||||||||||
| Limited Partner Units | $ | 13,839 | $ | 9,013 | $ | 35,850 | $ | 19,913 | ||||||||
| Class A Units (2%) | 766 | 350 | 1,961 | 677 | ||||||||||||
| Incentive Distribution Rights | 1,677 | − | 3,312 | − | ||||||||||||
| Total Atlas Resource Cash Distributions Earned(3) | 16,282 | 9,363 | 41,123 | 20,590 | ||||||||||||
| per limited partner unit | $ | 0.56 | $ | 0.43 | $ | 1.61 | $ | 0.95 | ||||||||
| Atlas Pipeline Cash Distributions Earned(3): | ||||||||||||||||
| Limited Partner Units | 3,567 | 3,280 | 10,530 | 9,724 | ||||||||||||
| General Partner 2% Interest | 1,100 | 664 | 3,155 | 1,961 | ||||||||||||
| Incentive Distribution Rights | 4,913 | 1,745 | 12,710 | 4,885 | ||||||||||||
| Total Atlas Pipeline Cash Distributions Earned(3) | 9,580 | 5,689 | 26,395 | 16,570 | ||||||||||||
| per limited partner unit | $ | 0.62 | $ | 0.57 | $ | 1.83 | $ | 1.69 | ||||||||
| Total Cash Distributions Earned | 25,862 | 15,052 | 67,518 | 37,160 | ||||||||||||
| Production Margin | 1,533 | − | 1,533 | − | ||||||||||||
|
E&P Operations Adjusted EBITDA prior to spinoff on March 5, 2012(2) |
− |
− |
− |
9,111 |
||||||||||||
| Cash general and administrative expenses(6) | (1,658 | ) | (1,394 | ) | (6,651 | ) | (5,910 | ) | ||||||||
| Other, net | 2 | 537 | 730 | 983 | ||||||||||||
| Adjusted EBITDA(1) | 25,739 | 14,195 | 63,130 | 41,344 | ||||||||||||
| Cash interest expense(7) | (2,899 | ) | (80 | ) | (3,430 | ) | (253 | ) | ||||||||
| Maintenance capital expenditures(4) | (200 | ) | − | (200 | ) | (1,231 | ) | |||||||||
| Distributable Cash Flow(1) | $ | 22,640 | $ | 14,115 | $ | 59,500 | $ | 39,860 | ||||||||
|
|
||||||||||||||||
| Discretionary adjustments considered by the Board of Directors of the General Partner in the determination of quarterly cash distributions: | ||||||||||||||||
| Net cash from acquisitions from the effective date through closing date(8) |
381 |
− |
1,851 |
− |
||||||||||||
| Distributable Cash Flow with discretionary adjustments by the Board of Directors of the General Partner(9) |
$ |
23,021 |
$ |
14,115 |
$ |
61,351 |
$ |
39,860 |
||||||||
| Distributions Paid(10) | $ | 23,644 | $ | 13,866 | $ | 62,179 | $ | 39,527 | ||||||||
| per limited partner unit | $ | 0.46 | $ | 0.27 | $ | 1.21 | $ | 0.77 | ||||||||
| Excess (shortfall) of distributable cash flow with discretionary adjustments by the Board of Directors of the General Partner after distributions to unitholders(11) |
$ |
(623 |
) |
$ |
249 |
$ |
(828 |
) |
$ |
333 |
||||||
|
(1) |
Although not prescribed under GAAP (generally accepted accounting
principles), ATLS’ management believes the presentation of EBITDA,
Adjusted EBITDA and Distributable Cash Flow (“DCF”) is relevant
and useful because it helps ATLS’ investors understand its
operating performance, allows for easier comparison of its results
with other master limited partnerships (“MLP”), and is a critical
component in the determination of quarterly cash distributions. As
a MLP, ATLS is required to distribute 100% of available cash, as
defined in its limited partnership agreement (“Available Cash”)
and subject to cash reserves established by its general partner,
to investors on a quarterly basis. ATLS refers to Available Cash
prior to the establishment of cash reserves as DCF. EBITDA,
Adjusted EBITDA and DCF should not be considered in isolation of,
or as a substitute for, net income as an indicator of operating
performance or cash flows from operating activities as a measure
of liquidity. While ATLS’s management believes that its
methodology of calculating EBITDA, Adjusted EBITDA and DCF is
generally consistent with the common practice of other MLPs, such
metrics may not be consistent and, as such, may not be comparable
to measures reported by other MLPs, who may use other adjustments
related to their specific businesses. EBITDA, Adjusted EBITDA and
DCF are supplemental financial measures used by ATLS’ management
and by external users of ATLS’ financial statements such as
investors, lenders under its credit facilities, research analysts,
rating agencies and others to assess its:
- Operating performance as compared to other publicly traded
partnerships and other companies in the upstream and midstream
energy sectors, without regard to financing methods, historical
cost basis or capital structure;
DCF is determined by calculating EBITDA, adjusting it for
non-cash, non-recurring and other items to achieve Adjusted
EBITDA, and then deducting cash interest expense and maintenance
capital expenditures. ATLS defines EBITDA as net income (loss)
plus the following adjustments:
- Interest expense; |
|
|
(2) |
Represents the E&P Operations Adjusted EBITDA generated and maintenance capital expenditures incurred by ATLS on a stand-alone basis prior to the transfer of its E&P assets to ARP on March 5, 2012 for the nine months ended September 30, 2012. | |
|
(3) |
Represents the cash distribution paid by ARP and APL within 45 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. | |
|
(4) |
Oil and gas assets naturally decline in future periods and, as such, ATLS recognizes the estimated capitalized cost of stemming such decline in production margin for the purpose of stabilizing its DCF and cash distributions, which it refers to as maintenance capital expenditures. ATLS calculates the estimate of maintenance capital expenditures by first multiplying its forecasted future full year production margin by its expected aggregate production decline of proved developed producing wells. Maintenance capital expenditures are then the estimated capitalized cost of wells that will generate an estimated first year margin equivalent to the production margin decline, assuming such wells are connected on the first day of the calendar year. ATLS does not incur specific capital expenditures expressly for the purpose of maintaining or increasing production margin, but such amounts are a hypothetical subset of wells it expects to drill in future periods on undeveloped acreage already leased. Estimated capitalized cost of wells included within maintenance capital expenditures are also based upon relevant factors, including utilization of public forward commodity exchange prices, current estimates for regional pricing differentials, estimated labor and material rates and other production costs. Generally, estimates for maintenance capital expenditures in the current year are the sum of the estimate calculated in the prior year plus estimates for the decline in production margin from wells connected during the current year and production acquired through acquisitions. ATLS considers expansion capital expenditures to be any capital expenditure costs expended that are not maintenance capital expenditures – generally, this will include expenditures to increase, rather than maintain, production margin in future periods, as well as land, gathering and processing, and other non-drilling capital expenditures. | |
|
(5) |
Swaption derivative contracts grant ATLS the option to enter into a swap derivative transaction to hedge future production period sales prices for a stated option period, which generally have a duration of a few months and commences upon entering into the derivative contract, in return for an upfront premium. The amounts included within the reconciliation reflect the amortization of premiums ATLS paid to enter into swaption derivative contracts for certain acquired volumes over the option period. Generally, ATLS enters into swaption derivative contracts to hedge acquired volumes after the announcement of the signed definitive purchase and sale agreement to acquire the oil and gas properties, but before it closes on the transaction, as its senior secured revolving credit agreement does not allow it to hedge production volume until it owns such volumes. ATLS excludes such costs in its determination of DCF, Adjusted EBITDA and cash distributions for the respective period as they are specific to the related transaction. |
|
|
(6) |
Excludes non-cash stock compensation expense and certain non-recurring spinoff costs and acquisition and related costs. | |
|
(7) |
Excludes non-cash amortization of deferred financing costs. | |
|
(8) |
These amounts reflect net cash proceeds received from the effective date through the closing date of the EP Energy assets acquired, less estimated and pro forma amounts of maintenance capital expenditures and financing costs. The management of ATLS believes these amounts are critical in its evaluation of Distributable Cash Flow and cash distributions for the period. Under GAAP, such amounts are characterized as purchase price adjustments and are reflected in the net purchase price paid for the acquired assets, rather than reflected as components of net income or loss for the period. For the 3rd quarter 2013, such amounts include net cash generated by the EP Energy assets of $0.8 million for period from July 1, 2013 to July 31, 2013, less pro forma interest expense of $0.3 million and estimated maintenance capital expenditures of $0.1 million. For the nine months ended September 30, 2013, such amounts include pro forma net cash generated by the EP Energy assets of $3.8 million from April 1, 2013 to July 31, 2013, less pro forma interest expense of $1.5 million and estimated maintenance capital expenditures of $0.5 million. | |
|
(9) |
Including the discretionary adjustments by the Board of Directors of the General Partner in the determination of quarterly cash distributions, Adjusted EBITDA would have been $26.1 million and $14.2 million for the three months ended September 30, 2013 and 2012, respectively, and $65.0 million and $41.3 million for the nine months ended September 30, 2013 and 2012, respectively. |
|
|
(10) |
Represents the cash distribution paid within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. | |
|
(11) |
ATLS seeks to at least maintain its current cash distribution in future quarterly periods, and expects to only increase such cash distributions when future Distributable Cash Flow amounts allow for it and are expected to be sustained. ATLS’ determination of quarterly cash distributions and its resulting determination of the amount of excess (shortfall) those cash distributions generate in comparison to Distributable Cash Flow are based upon its assessment of numerous factors which affect it, ARP and APL and the cash distributions it receives from these subsidiaries, including but not limited to future commodity price and interest rate movements, variability of operating asset performance, weather effects, and financial leverage. ATLS also considers its historical trailing four quarters of excess or shortfalls and future forecasted excess or shortfalls that its cash distributions generate in comparison to Distributable Cash Flow due to the variability of its Distributable Cash Flow generated each quarter, which could cause it to have more or less excess (shortfalls) generated from quarter to quarter. | |
|
ATLAS ENERGY, L.P. |
||||||||||||||||
|
CAPITALIZATION INFORMATION |
||||||||||||||||
|
(unaudited; in thousands) |
||||||||||||||||
| September 30, 2013 | ||||||||||||||||
| Atlas | Atlas | Atlas | ||||||||||||||
| Energy | Resource | Pipeline | Consolidated | |||||||||||||
| Total debt | $ | 240,000 | $ | 948,279 | $ | 1,655,652 | $ | 2,843,931 | ||||||||
| Less: Cash | (17,607 | ) | (1,452 | ) | (10,439 | ) | (29,498 | ) | ||||||||
| Total net debt | 222,393 | 946,827 | 1,645,213 | 2,814,433 | ||||||||||||
| Partners’ capital | 425,226 | 1,169,929 | 2,314,667 |
3,380,754 |
(1) |
|||||||||||
| Total capitalization | $ | 647,619 | $ | 2,116,756 | $ | 3,959,880 | $ | 6,195,187 | ||||||||
| Ratio of net debt to capitalization | 0.34x | |||||||||||||||
|
(1) Net of eliminated amounts. |
||||||||||||||||
| December 31, 2012 | ||||||||||||||||
| Atlas | Atlas | Atlas | ||||||||||||||
| Energy | Resource | Pipeline | Consolidated | |||||||||||||
| Total debt | $ | 9,000 | $ | 351,425 | $ | 1,179,918 | $ | 1,540,343 | ||||||||
| Less: Cash | (10,194 | ) | (23,188 | ) | (3,398 | ) | (36,780 | ) | ||||||||
| Total net debt /(cash) | (1,194 | ) | 328,237 | 1,176,520 | 1,503,563 | |||||||||||
| Partners’ capital | 465,870 | 862,006 | 1,606,408 |
2,479,848 |
(2) |
|||||||||||
| Total capitalization | $ | 464,676 | $ | 1,190,243 | $ | 2,782,928 | $ | 3,983,411 | ||||||||
| Ratio of net debt to capitalization | 0.00x | |||||||||||||||
|
(2) Net of eliminated amounts. |
||||||||||||||||
|
ATLAS ENERGY, L.P. |
||||
|
Hedge Position Summary – Directly-Held E&P Assets |
||||
|
(as of November 7, 2013) |
||||
|
Natural Gas |
||||
|
Fixed Price Swaps |
||||
| Average | ||||
| Production Period | Fixed Price | Volumes | ||
| Ended December 31, | (per mmbtu)(a) | (mmbtus)(a) | ||
| 2013(b) | $4.06 | 750,000 | ||
| 2014 | $4.18 | 2,760,000 | ||
| 2015 | $4.30 | 2,280,000 | ||
| 2016 | $4.43 | 1,440,000 | ||
| 2017 | $4.59 | 1,200,000 | ||
| 2018 | $4.80 | 420,000 | ||
|
__________________________ |
||
|
(a) |
“mmbtu” represents million metric British thermal units. |
|
|
(b) |
Reflects hedges covering the last three months of 2013. |
|
| ATLAS ENERGY, L.P. | ||||||||||||||||||||
| CONSOLIDATING STATEMENTS OF OPERATIONS | ||||||||||||||||||||
|
(unaudited; in thousands) |
||||||||||||||||||||
|
Three Months Ended September 30, 2013 |
||||||||||||||||||||
|
|
||||||||||||||||||||
| Atlas | Atlas | Atlas | ||||||||||||||||||
| Energy | Resource | Pipeline | Eliminations | Consolidated | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Gas and oil production | $ | 2,700 | $ | 80,332 | $ | − | $ | − | $ | 83,032 | ||||||||||
| Well construction and completion | − | 10,964 | − | − | 10,964 | |||||||||||||||
| Gathering and processing | − | 3,591 | 579,444 | (74 | ) | 582,961 | ||||||||||||||
| Administration and oversight | − | 4,447 | − | − | 4,447 | |||||||||||||||
| Well services | − | 5,023 | − | − | 5,023 | |||||||||||||||
| Loss on mark-to-market derivatives | − | − | (24,517 | ) | − | (24,517 | ) | |||||||||||||
| Other, net | 290 | (13,272 | ) | 1,061 | − | (11,921 | ) | |||||||||||||
| Total revenues | 2,990 | 91,085 | 555,988 | (74 | ) | 649,989 | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Gas and oil production | 1,167 | 29,419 | − | − | 30,586 | |||||||||||||||
| Well construction and completion | − | 9,534 | − | − | 9,534 | |||||||||||||||
| Gathering and processing | − | 4,395 | 488,370 | (74 | ) | 492,691 | ||||||||||||||
| Well services | − | 2,386 | − | − | 2,386 | |||||||||||||||
| General and administrative | 11,359 | 31,983 | 18,572 | − | 61,914 | |||||||||||||||
| Depreciation, depletion and amortization |
1,331 |
41,656 |
51,080 |
− |
94,067 |
|||||||||||||||
| Total costs and expenses | 13,857 | 119,373 | 558,022 | (74 | ) | 691,178 | ||||||||||||||
| Operating loss | (10,867 | ) | (28,288 | ) | (2,034 | ) | − | (41,189 | ) | |||||||||||
| Loss on asset sales and disposal | − | (661 | ) | − | − | (661 | ) | |||||||||||||
| Interest expense | (3,418 | ) | (10,748 | ) | (24,347 | ) | − | (38,513 | ) | |||||||||||
| Loss on early extinguishment of debt | − | − | − | − | − | |||||||||||||||
| Net loss before tax | (14,285 | ) | (39,697 | ) | (26,381 | ) | − | (80,363 | ) | |||||||||||
| Income tax benefit | − | − | 817 | − | 817 | |||||||||||||||
| Net loss | (14,285 | ) | (39,697 | ) | (25,564 | ) | − | (79,546 | ) | |||||||||||
| Loss attributable to non-controlling interests |
− |
− |
(1,514 |
) |
53,536 |
52,022 |
||||||||||||||
| Net loss attributable to common limited partners |
$ |
(14,285 |
) |
$ |
(39,697 |
) |
$ |
(27,078 |
) |
$ |
53,536 |
$ |
(27,524 |
) |
||||||
|
ATLAS ENERGY, L.P. CONSOLIDATING STATEMENTS OF OPERATIONS (unaudited; in thousands)
Three Months Ended September 30, 2012 |
||||||||||||||||||||
| Atlas | Atlas | Atlas | ||||||||||||||||||
| Energy | Resource | Pipeline | Eliminations | Consolidated | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Gas and oil production | $ | − | $ | 24,699 | $ | − | $ | − | $ | 24,699 | ||||||||||
| Well construction and completion | − | 36,317 | − | − | 36,317 | |||||||||||||||
| Gathering and processing | − | 4,134 | 293,890 | (156 | ) | 297,868 | ||||||||||||||
| Administration and oversight | − | 4,440 | − | − | 4,440 | |||||||||||||||
| Well services | − | 5,086 | − | − | 5,086 | |||||||||||||||
| Loss on mark-to-market derivatives | − | − | (18,907 | ) | − | (18,907 | ) | |||||||||||||
| Other, net | 894 | 67 | 4,309 | − | 5,270 | |||||||||||||||
| Total revenues | 894 | 74,743 | 279,292 | (156 | ) | 354,773 | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Gas and oil production | − | 7,295 | − | − | 7,295 | |||||||||||||||
| Well construction and completion | − | 31,581 | − | − | 31,581 | |||||||||||||||
| Gathering and processing | − | 4,558 | 240,672 | (156 | ) | 245,074 | ||||||||||||||
| Well services | − | 2,232 | − | − | 2,232 | |||||||||||||||
| General and administrative | 5,721 | 16,147 | 12,123 | − | 33,991 | |||||||||||||||
|
Chevron transaction expense |
− | 7,670 | − | − | 7,670 | |||||||||||||||
|
Depreciation, depletion and amortization |
|
− |
13,918 |
23,161 |
− |
37,079 |
||||||||||||||
|
Total costs and expenses |
5,721 | 83,401 | 275,956 | (156 | ) | 364,922 | ||||||||||||||
| Operating income (loss) | (4,827 | ) | (8,658 | ) | 3,336 | − | (10,149 | ) | ||||||||||||
| Gain on asset sales and disposal | − | 2 | − | − | 2 | |||||||||||||||
| Interest expense | (130 | ) | (1,423 | ) | (9,692 | ) | − | (11,245 | ) | |||||||||||
| Net loss | (4,957 | ) | (10,079 | ) | (6,356 | ) | − | (21,392 | ) | |||||||||||
| Loss attributable to non-controlling interests |
− |
− |
(1,511 |
) |
11,493 |
9,982 |
||||||||||||||
| Net loss attributable to common limited partners |
$ |
(4,957 |
) |
$ |
(10,079 |
) |
$ |
(7,867 |
) |
$ |
11,493 |
$ |
(11,410 |
) |
||||||
| ATLAS ENERGY, L.P. | ||||||||||||||||||||
| CONSOLIDATING STATEMENTS OF OPERATIONS | ||||||||||||||||||||
|
(unaudited; in thousands) |
||||||||||||||||||||
|
Nine Months Ended September 30, 2013 |
||||||||||||||||||||
|
|
||||||||||||||||||||
| Atlas | Atlas | Atlas | ||||||||||||||||||
| Energy | Resource | Pipeline | Eliminations | Consolidated | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Gas and oil production | $ | 2,700 | $ | 173,490 | $ | − | $ | − | $ | 176,190 | ||||||||||
| Well construction and completion | − | 92,293 | − | − | 92,293 | |||||||||||||||
| Gathering and processing | − | 11,639 | 1,527,553 | (222 | ) | 1,538,970 | ||||||||||||||
| Administration and oversight | − | 8,923 | − | − | 8,923 | |||||||||||||||
| Well services | − | 14,703 | − | − | 14,703 | |||||||||||||||
| Loss on mark-to-market derivatives | − | − | (9,493 | ) | − | (9,493 | ) | |||||||||||||
| Other, net | 542 | (14,589 | ) | 8,347 | − | (5,700 | ) | |||||||||||||
| Total revenues | 3,242 | 286,459 | 1,526,407 | (222 | ) | 1,815,886 | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Gas and oil production | 1,167 | 63,670 | − | − | 64,837 | |||||||||||||||
| Well construction and completion | − | 80,255 | − | − | 80,255 | |||||||||||||||
| Gathering and processing | − | 13,767 | 1,284,755 | (222 | ) | 1,298,300 | ||||||||||||||
| Well services | − | 7,009 | − | − | 7,009 | |||||||||||||||
| General and administrative | 28,863 | 63,767 | 63,816 | − | 156,446 | |||||||||||||||
| Depreciation, depletion and amortization |
1,331 |
85,061 |
127,921 |
− |
214,313 |
|||||||||||||||
| Total costs and expenses | 31,361 | 313,529 | 1,476,492 | (222 | ) | 1,821,160 | ||||||||||||||
| Operating income (loss) | (28,119 | ) | (27,070 | ) | 49,915 | − | (5,274 | ) | ||||||||||||
| Loss on asset sales and disposal | − | (2,035 | ) | (1,519 | ) | − | (3,554 | ) | ||||||||||||
| Interest expense | (4,095 | ) | (22,145 | ) | (65,614 | ) | − | (91,854 | ) | |||||||||||
| Loss on early extinguishment of debt | − | − | (26,601 | ) | − | (26,601 | ) | |||||||||||||
| Net loss before tax | (32,214 | ) | (51,250 | ) | (43,819 | ) | − | (127,283 | ) | |||||||||||
| Income tax benefit | − | − | 854 | − | 854 | |||||||||||||||
| Net loss | (32,214 | ) | (51,250 | ) | (42,965 | ) | − | (126,429 | ) | |||||||||||
| Loss attributable to non-controlling interests |
− |
− |
(4,693 |
) |
82,755 |
78,062 |
||||||||||||||
| Net loss attributable to common limited partners |
$ |
(32,214 |
) |
$ |
(51,250 |
) |
$ |
(47,658 |
) |
$ |
82,755 |
$ |
(48,367 |
) |
||||||
| ATLAS ENERGY, L.P. | ||||||||||||||||||||
| CONSOLIDATING STATEMENTS OF OPERATIONS | ||||||||||||||||||||
|
(unaudited; in thousands) |
||||||||||||||||||||
|
Nine Months Ended September 30, 2012 |
||||||||||||||||||||
|
|
||||||||||||||||||||
| Atlas | Atlas | Atlas | ||||||||||||||||||
| Energy | Resource | Pipeline | Eliminations | Consolidated | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Gas and oil production | $ | − | $ | 61,323 | $ | − | $ | − | $ | 61,323 | ||||||||||
| Well construction and completion | − | 92,277 | − | − | 92,277 | |||||||||||||||
| Gathering and processing | − | 10,311 | 849,475 | (357 | ) | 859,429 | ||||||||||||||
| Administration and oversight | − | 8,586 | − | − | 8,586 | |||||||||||||||
| Well services | − | 15,344 | − | − | 15,344 | |||||||||||||||
| Gain on mark-to-market derivatives | − | − | 36,905 | − | 36,905 | |||||||||||||||
| Other, net | 1,402 | (4,952 | ) | 12,125 | − | 8,575 | ||||||||||||||
| Total revenues | 1,402 | 182,889 | 898,505 | (357 | ) | 1,082,439 | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Gas and oil production | − | 16,247 | − | − | 16,247 | |||||||||||||||
| Well construction and completion | − | 79,882 | − | − | 79,882 | |||||||||||||||
| Gathering and processing | − | 13,185 | 697,642 | (357 | ) | 710,470 | ||||||||||||||
| Well services | − | 7,076 | − | − | 7,076 | |||||||||||||||
| General and administrative | 27,906 | 48,427 | 32,513 | − | 108,846 | |||||||||||||||
| Chevron transaction expense | − | 7,670 | − | − | 7,670 | |||||||||||||||
|
Depreciation, depletion and amortization |
− |
33,848 |
65,715 |
− |
99,563 |
|||||||||||||||
| Total costs and expenses | 27,906 | 206,335 | 795,870 | (357 | ) | 1,029,754 | ||||||||||||||
| Operating income (loss) | (26,504 | ) | (23,446 | ) | 102,635 | − | 52,685 | |||||||||||||
| Loss on asset sales and disposal | − | (7,019 | ) | − | − | (7,019 | ) | |||||||||||||
| Interest expense | (432 | ) | (2,529 | ) | (27,669 | ) | − | (30,630 | ) | |||||||||||
| Net income (loss) | (26,936 | ) | (32,994 | ) | 74,966 | − | 15,036 | |||||||||||||
| Income attributable to non-controlling interests |
− |
− |
(4,108 |
) |
(48,466 |
) |
(52,574 |
) |
||||||||||||
| Net income (loss) attributable to common limited partners |
$ |
(26,936 |
) |
$ |
(32,994 |
) |
$ |
70,858 |
$ |
(48,466 |
) |
$ |
(37,538 |
) |
||||||
| ATLAS ENERGY, L.P. | ||||||||||||||||||
| CONDENSED CONSOLIDATING BALANCE SHEETS | ||||||||||||||||||
|
(unaudited; in thousands) |
||||||||||||||||||
|
September 30, 2013 |
||||||||||||||||||
|
|
||||||||||||||||||
| Atlas | Atlas | Atlas | ||||||||||||||||
| ASSETS | Energy | Resource | Pipeline | Eliminations | Consolidated | |||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 17,607 | $ | 1,452 | $ | 10,439 | $ | − | $ | 29,498 | ||||||||
| Accounts receivable | 980 | 59,669 | 229,168 | − | 289,817 | |||||||||||||
|
Receivable from (advances from) affiliates |
28,164 |
(23,559 |
) |
(4,605 |
) |
− |
− |
|||||||||||
| Current portion of derivative asset | 1,082 | 19,474 | 5,177 | − | 25,733 | |||||||||||||
| Subscriptions receivable | − | 13,900 | − | − | 13,900 | |||||||||||||
| Prepaid expenses and other | 370 | 11,610 | 73,441 | − | 85,421 | |||||||||||||
| Total current assets | 48,203 | 82,546 | 313,620 | − | 444,369 | |||||||||||||
| Property, plant and equipment, net | 67,436 | 2,175,754 | 2,715,361 | − | 4,958,551 | |||||||||||||
| Intangible assets, net | − | 1,059 | 545,955 | − | 547,014 | |||||||||||||
| Investment in joint venture | − | − | 238,221 | − | 238,221 | |||||||||||||
| Goodwill, net | − | 31,784 | 503,937 | − | 535,721 | |||||||||||||
| Long-term derivative asset | 1,546 | 28,500 | 7,458 | − | 37,504 | |||||||||||||
|
Long-term derivative receivable from Drilling Partnerships |
− |
182 |
− |
− |
182 |
|||||||||||||
| Investment in subsidiaries | 529,068 | − | − | (529,068 | ) | − | ||||||||||||
| Other assets, net | 35,623 | 43,468 | 44,438 | − | 123,529 | |||||||||||||
| $ | 681,876 | $ | 2,363,293 | $ | 4,368,990 | $ | (529,068 | ) | $ | 6,885,091 | ||||||||
| LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Current portion of long-term debt | $ | 2,400 | $ | − | $ | 610 | $ | − | $ | 3,010 | ||||||||
| Accounts payable | 269 | 74,686 | 72,159 | − | 147,114 | |||||||||||||
| Accrued producer liabilities | − | − | 161,808 | − | 161,808 | |||||||||||||
| Current portion of derivative liability | − | 318 | 1,143 | − | 1,461 | |||||||||||||
|
Current portion of derivative payable to Drilling Partnerships |
− |
4,932 |
− |
− |
4,932 |
|||||||||||||
| Accrued interest | 43 | 8,822 | 30,607 | − | 39,472 | |||||||||||||
|
Accrued well drilling and completion costs |
− |
47,149 |
− |
− |
47,149 |
|||||||||||||
| Accrued liabilities | 10,224 | 25,051 | 90,849 | − | 126,124 | |||||||||||||
| Total current liabilities | 12,936 | 160,958 | 357,176 | − | 531,070 | |||||||||||||
| Long-term debt, less current portion | 237,600 | 948,279 | 1,655,042 | − | 2,840,921 | |||||||||||||
| Deferred income taxes, net | − | − | 34,696 | − | 34,696 | |||||||||||||
| Asset retirement obligations and other | 6,114 | 84,127 | 7,409 | − | 97,650 | |||||||||||||
| Partners’ Capital: | ||||||||||||||||||
| Common limited partners’ interests | 405,285 | 1,119,691 | 2,266,505 | (3,386,196 | ) | 405,285 | ||||||||||||
|
Accumulated other comprehensive income |
19,941 |
50,238 |
− |
(50,238 |
) |
19,941 |
||||||||||||
| 425,226 | 1,169,929 | 2,266,505 | (3,436,434 | ) | 425,226 | |||||||||||||
| Non-controlling interests | − | − | 48,162 | 2,907,366 | 2,955,528 | |||||||||||||
| Total partners’ capital | 425,226 | 1,169,929 | 2,314,667 | (529,068 | ) | 3,380,754 | ||||||||||||
| $ | 681,876 | $ | 2,363,293 | $ | 4,368,990 | $ | (529,068 | ) | $ | 6,885,091 | ||||||||
| ATLAS ENERGY, L.P. | ||||||||||||||||||
| CONDENSED CONSOLIDATING BALANCE SHEETS | ||||||||||||||||||
|
(unaudited; in thousands) |
||||||||||||||||||
|
December 31, 2012 |
||||||||||||||||||
|
|
||||||||||||||||||
|
Atlas |
Atlas | Atlas | ||||||||||||||||
| ASSETS | Energy | Resource | Pipeline | Eliminations | Consolidated | |||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 10,194 | $ | 23,188 | $ | 3,398 | $ | − | $ | 36,780 | ||||||||
| Accounts receivable | 5 | 38,718 | 157,526 | − | 196,249 | |||||||||||||
|
Receivable from (advances from) affiliates |
11,353 |
(5,853 |
) |
(5,500 |
) |
− |
− |
|||||||||||
| Current portion of derivative asset | − | 12,274 | 23,077 | − | 35,351 | |||||||||||||
| Subscriptions receivable | − | 55,357 | − | − | 55,357 | |||||||||||||
| Prepaid expenses and other | 118 | 9,063 | 36,074 | − | 45,255 | |||||||||||||
| Total current assets | 21,670 | 132,747 | 214,575 | − | 368,992 | |||||||||||||
| Property, plant and equipment, net | − | 1,302,228 | 2,200,381 | − | 3,502,609 | |||||||||||||
| Goodwill and intangible assets, net | − | 33,104 | 518,645 | − | 551,749 | |||||||||||||
| Long-term derivative asset | − | 8,898 | 7,942 | − | 16,840 | |||||||||||||
| Investment in joint venture | − | − | 86,002 | − | 86,002 | |||||||||||||
| Investment in subsidiaries | 454,436 | − | − | (454,436 | ) | − | ||||||||||||
| Other assets, net | 22,287 | 16,122 | 32,593 | − | 71,002 | |||||||||||||
| $ | 498,393 | $ | 1,493,099 | $ | 3,060,138 | $ | (454,436 | ) | $ | 4,597,194 | ||||||||
| LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Current portion of long-term debt | $ | − | $ | − | $ | 10,835 | $ | − | $ | 10,835 | ||||||||
| Accounts payable | 171 | 59,549 | 59,308 | − | 119,028 | |||||||||||||
|
Liabilities associated with drilling contracts |
− |
67,293 |
− |
− |
67,293 |
|||||||||||||
| Accrued producer liabilities | − | − | 109,725 | − | 109,725 | |||||||||||||
|
Current portion of derivative payable to Drilling Partnerships |
− |
11,293 |
− |
− |
11,293 |
|||||||||||||
| Accrued interest | 4 | 1,153 | 10,399 | − | 11,556 | |||||||||||||
|
Accrued well drilling and completion costs |
− |
47,637 |
− |
− |
47,637 |
|||||||||||||
|
Accrued liabilities |
21,304 | 24,235 | 57,752 | − | 103,291 | |||||||||||||
| Total current liabilities | 21,479 | 211,160 | 248,019 | − | 480,658 | |||||||||||||
| Long-term debt, less current portion | 9,000 | 351,425 | 1,169,083 | − | 1,529,508 | |||||||||||||
| Long-term derivative liability | − | 888 | − | − | 888 | |||||||||||||
| Long-term derivative payable to Drilling Partnerships |
− |
2,429 |
− |
− |
2,429 |
|||||||||||||
| Deferred income taxes, net | − | − | 30,258 | − | 30,258 | |||||||||||||
| Asset retirement obligations and other | 2,044 | 65,191 | 6,370 | − | 73,605 | |||||||||||||
| Partners’ Capital: | ||||||||||||||||||
| Common limited partners’ interests | 456,171 | 840,437 | 1,539,177 | (2,379,614 | ) | 456,171 | ||||||||||||
|
Accumulated other comprehensive income |
9,699 |
21,569 |
− |
(21,569 |
) |
9,699 |
||||||||||||
| 465,870 | 862,006 | 1,539,177 | (2,401,183 | ) | 465,870 | |||||||||||||
|
Non-controlling interests |
− | − | 67,231 | 1,946,747 | 2,013,978 | |||||||||||||
| Total partners’ capital | 465,870 | 862,006 | 1,606,408 | (454,436 | ) | 2,479,848 | ||||||||||||
| $ | 498,393 | $ | 1,493,099 | $ | 3,060,138 | $ | (454,436 | ) | $ | 4,597,194 | ||||||||
| ATLAS ENERGY, L.P. | |||||
| Ownership Interests Summary | |||||
| Overall | |||||
| Ownership | |||||
| Interest | |||||
|
Atlas Energy Ownership Interests as of September 30, 2013: |
Amount | Percentage | |||
| ATLAS RESOURCE: | |||||
| General partner interest | 100% | 2.0 | % | ||
| Common units | 20,962,485 | 31.3 | % | ||
| Preferred units | 3,749,986 | 5.6 | % | ||
| Incentive distribution rights | 100% | N/A | |||
| Total Atlas Energy ownership interests in Atlas Resource | 38.9 | % | |||
| ATLAS PIPELINE: | |||||
| General partner interest | 100% | 2.0 | % | ||
| Common units | 5,754,253 | 6.2 | % | ||
| Incentive distribution rights | 100% | N/A | |||
| Total Atlas Energy ownership interests in Atlas Pipeline | 8.2 | % | |||
| LIGHTFOOT CAPITAL PARTNERS, GP LLC: | |||||
| Approximate general partner ownership interest | 15.9 | % | |||
| Approximate limited partner ownership interest | 12.1 | % | |||