Quantcast
 
New book by Larry Connors Click here Improve your trading - See how


 

Atlas Energy, Inc. Reports Operating and Financial Results for the Third Quarter 2009

Fri. November 06, 2009; Posted: 12:10 AM
Stocks RSS
PHILADELPHIA, Nov 06, 2009 (BUSINESS WIRE) -- APL | Quote | Chart | News | PowerRating -- Atlas Energy, Inc. (NASDAQ: ATLS | Quote | Chart | News | PowerRating) ("Atlas Energy" or "the Company") today reported operating and financial results for the third quarter 2009.

Highlights of Atlas Energy's operations (as previously reported) and financial results include the following:

-- Atlas Energy successfully drilled and completed two additional horizontal Marcellus Shale wells in southwestern Pennsylvania: one in western Fayette County and another in eastern Greene County. The Fayette County well, which is the first horizontal Marcellus Shale well drilled and completed in the county, has produced into a pipeline an average of 3.3 million cubic feet per day ("Mmcf/d") for its first 30 days. This well inclined for most of its first 30 days and is showing very little decline after 40 days. The Company's second horizontal Marcellus Shale well drilled during 2009 in Greene County is exhibiting a similar flat production profile after an initial peak rate of 3.5 Mmcf/d. Both of these wells are producing at rates that exceed the Company's assumed 4 billion cubic feet ("Bcf") type curve. Atlas's last four horizontal Marcellus Shale wells that were turned into line in southwestern Pennsylvania had an average peak 24-hour rate of 5.1 Mmcfe/d;

-- During the first nine months of 2009, Atlas successfully drilled 14 horizontal Marcellus Shale wells. Four of these wells are online, one is flowing but not yet online, three will be returned to production as a gas processing plant has been brought back onto production this week, and six are yet to be frac'd;

-- Adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"), a non-GAAP measure, was $56.2 million for the Company's Exploration and Production operations ("E&P Operations") for the third quarter 2009, as compared with $75.9 million for the prior year comparable quarter. The decrease from the prior year comparable quarter was primarily related to 1) lower commodity prices, partially offset by higher natural gas production volumes and strong hedge protection, and 2) the comparable year over year timing of the offering of direct investment programs (funds received in the fourth quarter 2009 are already five times higher than funds received in the third quarter 2009). As a result of the currently realized and continued expected increase in direct investment funds received in the fourth quarter 2009, and higher anticipated production volumes and realized natural gas prices compared to the third quarter 2009, the Company expects to generate $68 million to $72 million of adjusted EBITDA in the fourth quarter 2009. A reconciliation from net income to adjusted EBITDA is provided in the financial tables of this release;

-- The Company reaffirms its 2009 total production guidance of 37 to 37.5 billion cubic feet equivalents ("Bcfe"), up approximately 7% from 2008, and between 45 and 50 Bcfe for 2010, up 28% at the midpoint compared to estimated 2009 production. Due to increasing Marcellus Shale production, Atlas Energy expects to exit 2009 with over 50 million cubic feet ("Mmcf") per day of net production in Appalachia and expects this figure to more than double by the end of 2010;

-- Atlas Energy's natural gas and oil production in Appalachia was 41.3 million cubic feet equivalents ("Mmcfe") per day for the third quarter 2009, compared to 35.7 Mmcfe per day for the prior year third quarter, up approximately 16%. The increase is due primarily to Atlas Energy's expanding drilling programs and increased production from the Marcellus Shale. Michigan segment natural gas production was 58.6 Mmcfe per day in the third quarter 2009, compared to 60.5 Mmcfe per day in the prior year comparable quarter, but higher than the second quarter 2009 production of 58.1 Mmcfe per day; and

-- Adjusted net income was $3.8 million for the third quarter 2009 compared with $9.9 million for the prior year third quarter. Adjusted diluted net income per share was $0.09 for the third quarter 2009 compared with $0.23 per share for the third quarter 2008. Inclusive of the impact of the consolidation of Atlas Pipeline Partners, L.P. ("APL") and Atlas Pipeline Holdings, L.P. ("AHD") and other items, on a GAAP basis, the Company recognized a net loss of $0.7 million for the third quarter 2009 compared with net income of $24.1 million for the prior year third quarter. A reconciliation of net income to adjusted net income is provided in the financial tables of this release.

Recent Events

-- On September 29, 2009, Atlas America, Inc. and Atlas Energy Resources, LLC ("ATN") completed their merger (the "Merger") to form Atlas Energy, Inc. Atlas Energy's common stock continues to trade on NASDAQ under the symbol "ATLS." Atlas Energy expects to continue the accelerated expansion of its leading Marcellus Shale position in southwestern Pennsylvania with retained cash flows from operations. As a result of the Merger, Atlas Energy has a single class of publicly traded common equity with one board of directors.

-- Atlas Energy began marketing the $275 million Atlas Resources Public #18-2009 (C) drilling program (1) in September of this year. When combined with the $125 million Atlas Resources Public #18-2009 (B) drilling program completed earlier this year, Atlas expects to raise approximately $400 million in 2009 through its direct investment programs.

-- ATN's bank group, as a result of the regularly scheduled semi-annual review, approved ATN's borrowing base related to its senior secured revolving credit facility at $575 million. All other terms and conditions remain the same. JP Morgan led the group of 26 lenders in the review process. As of September 30, 2009, ATN had $270 million outstanding against the revolving facility.

Appalachia Segment

-- Atlas Energy drilled 19 gross vertical Marcellus Shale wells and 5 gross horizontal Marcellus Shale wells in the third quarter 2009.

-- As of September 30, 2009, the Company held approximately 873,600 net acres in the Appalachian Basin, of which approximately 599,800 were undeveloped.

-- As of September 30, 2009, the Company had an interest in approximately 9,900 gross producing wells in Appalachia, of which it operated approximately 85%.

-- Partnership management margin (2) was $18.1 million for the third quarter 2009, compared to $23.0 million for the prior year third quarter. The lower partnership management margin in the third quarter 2009 compared to the prior year was due primarily to the comparable year over year timing of the offering of direct investment programs.

Michigan/Indiana Segment

-- Natural gas and oil production from the Michigan segment averaged 58.6 Mmcfe per day during the third quarter 2009, up from 58.1 Mmcfe per day in the second quarter 2009.

-- At September 30, 2009, the Company had approximately 271,900 net acres in the Antrim Shale in Michigan, of which approximately 26,400 were undeveloped. The Company also had access to approximately 250,000 gross acres in the New Albany Shale in Indiana, of which approximately 243,000 acres were undeveloped.

Corporate and Other

-- General and administrative expense, excluding amounts attributable to APL and AHD, was $22.5 million for the third quarter 2009, compared to $14.4 million for the prior year comparable quarter. The increase in the third quarter 2009 compared to the prior year was primarily related to 1) $6.1 million of non-recurring expenses related to the Merger and 2) the timing of the offering and receipt of funds associated with the direct investment programs, which influences the capitalization of costs directly related to those programs.

-- Depreciation, depletion and amortization expense, excluding amounts attributable to APL and AHD, was $24.6 million in the third quarter 2009, compared to $23.6 million in the prior year comparable quarter. The increase was due primarily to the increase in production in the Company's Appalachia segment, notably from Marcellus Shale production.

-- Interest expense, excluding amounts attributable to APL and AHD, was $18.5 million for the third quarter 2009, compared to $14.8 million for the prior year third quarter. The increase in interest expense was primarily due to ATN's $200 million 12.5% senior note offering in July 2009, partially offset by lower average borrowings under its credit facility.

Hedging Summary

The Company entered into additional hedging contracts during the third quarter 2009 for its natural gas production.

A summary of the Company's current equity hedge positions as of November 5, 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))           $       8.48             7,338,385
2010                $       7.75             25,551,562
2011                $       7.20             16,073,364
2012                $       7.23             13,954,642
2013                $       7.27             9,886,929
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       42,746
2010                $       8.03     $       9.22        2,420,645
2011                $       6.45     $       7.68        8,685,232
2012                $       6.67     $       7.88        7,650,684
2013                $       6.77     $       8.00        8,773,111

Crude Oil

Fixed Price Swaps
                    Average
Production Period   Fixed Price    Volumes
Ended December 31,  (per bbl)(1)   (bbls)(1)
2009((3))           $      98.85          9,017
2010                $      97.30          36,977
2011                $      69.77          32,194
2012                $      71.55          26,139
2013                $      72.26          5,900
Costless 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   $      115.72  5,589
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 three months of 2009.

Interest in Atlas Pipeline and Atlas Pipeline Holdings

Through Atlas Energy's controlling interest in Atlas Pipeline Holdings, L.P. (NYSE: AHD), which owns and operates the general partner of Atlas Pipeline Partners, L.P. (NYSE: APL | Quote | Chart | News | PowerRating) and owns 5.8 million limited partner units in APL, the Company recognizes approximately 11% of APL's net income after eliminating minority interest from non-controlling parties. A consolidating statement of operations and balance sheet has been provided in the financial tables of the release, which segregates the Atlas Energy E&P Operations financial results from the Atlas Pipeline midstream financial results.

Interested parties are invited to access the live webcast of an investor call with management regarding Atlas Energy, Inc.'s third quarter 2009 results on Friday, November 6, 2009 at 9:00 am ET by going to the Investor Relations section of Atlas Energy's website at www.atlasenergyresources.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 12:00 p.m. ET on November 6, 2009 by dialing 888-286-8010, passcode: 75002061.

(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 of 1933, as amended, may be obtained from Anthem Securities, Inc. (a subsidiary of Atlas Energy), 1550 Coraopolis Heights Rd. -- 3rd Floor, Moon Township, PA 15108.

(2) Partnership management margin is comprised of Well Construction & Completion margin, Well Services margin and Administration & Oversight Fee revenues.

The Company has a 100.0% ownership interest in Atlas Energy Resources, LLC ("ATN"), an approximate 2.2% direct ownership interest in Atlas Pipeline Partners, L.P. ("APL"), a publicly-traded limited partnership, and an approximate 64.4% limited partner interest and 100% of the general partner interest in Atlas Pipeline Holdings, L.P. ("AHD"). The Company's financial results are presented on a consolidated basis with those of ATN, AHD, and APL. Non-controlling minority interests in ATN, AHD, and APL are reflected as income (expense) in the Company's consolidated statements of operations and as a component of stockholders' equity on its consolidated balance sheet. A consolidating statement of operations and balance sheet has also been provided in the financial tables to the release for the comparable periods presented.

Please see the respective AHD and APL earnings releases for more information with regard to their third quarter 2009 financial results.

Atlas Energy, Inc. is one of the largest independent natural gas producers in the Appalachian and Michigan Basins and a leading producer in the Marcellus Shale in Pennsylvania. Atlas Energy, Inc. is also the country's largest sponsor and manager of tax-advantaged energy investment partnerships. Atlas Energy, Inc. also owns 1.1 million common units in Atlas Pipeline Partners, L.P. (NYSE: APL | Quote | Chart | News | PowerRating) and a 64% interest in Atlas Pipeline Holdings, L.P. (NYSE: AHD), a limited partnership which owns the general partner interest, all the incentive distribution rights and approximately 5.8 million common units of Atlas Pipeline Partners, L.P. 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 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 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, Inc. 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 the benefits of the recently completed merger between a subsidiary of Atlas America and Atlas Energy Resources, 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; 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, and subsequent quarterly reports on Forms 10-Q. Forward-looking statements speak only as of the date hereof, and each company assumes no obligation to update such statements.

ATLAS ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
                                                                   Three Months Ended             Nine Months Ended
                                                                   September 30,                  September 30,
                                                                   2009           2008            2009             2008
Revenue:
Well construction and completion                                   $  81,496      $  116,987      $  257,231       $  343,466
Gas and oil production                                                65,986         81,235          207,908          236,417
Transmission, gathering and processing                                205,603        410,942         555,373          1,218,359
Administration and oversight                                          3,149          5,216           9,644            15,370
Well services                                                         5,012          5,299           14,911           15,363
Gain on asset sales                                                   55             a^'             105,746          a^'
Gain (loss) on mark-to-market derivatives(1)                          1,032          147,505         (17,245   )      (257,344  )
Other, net                                                            4,851          3,818           11,696           11,842
Total revenue                                                         367,184        771,002         1,145,264        1,583,473
Costs and expenses:
Well construction and completion                                      69,138         101,727         218,236          298,666
Gas and oil production                                                12,128         12,688          33,217           35,735
Transmission, gathering and processing                                167,862        333,988         470,752          992,504
Well services                                                         2,378          2,753           6,922            7,815
General and administrative                                            32,066         12,647          81,619           58,592
Depreciation, depletion and amortization                              46,460         44,325          147,427          129,539
Total costs and expenses                                              330,032        508,128         958,173          1,522,851
Operating income (loss)                                               37,152         262,874         187,091          60,622
Interest expense                                                      (47,754 )      (37,331  )      (124,322  )      (106,538  )
Income (loss) from continuing operations before income                (10,602 )      225,543         62,769           (45,916   )
tax provision (benefit)
Provision (benefit) for income taxes                                  (716    )      13,647          5,555            12,288
Net income (loss) from continuing operations                          (9,886  )      211,896         57,214           (58,204   )
Discontinued operations:
Gain on sale of discontinued operations (net of income
tax provision of $2,228 for the nine months ended
September 30, 2009)                                                   a^'            a^'             48,851           a^'
Income from discontinued operations (net of income tax
provision of $277 for the three months ended
September 30, 2008 and $498 and $848 for the nine
months ended September 30, 2009 and 2008,
respectively)                                                         a^'            6,261           10,918           20,181
Net income (loss)                                                     (9,886  )      218,157         116,983          (38,023   )
(Income) loss attributable to non-controlling                         9,172          (194,054 )      (103,686  )      60,777
interests
Net income (loss) attributable to common shareholders              $  (714    )   $  24,103       $  13,297        $  22,754
Net income (loss) attributable to common shareholders per share
- basic:
Income (loss) from continuing operations attributable to common    $  (0.02   )   $  0.59         $  0.23          $  0.54
shareholders
Discontinued operations attributable to common shareholders           0.00           0.01            0.11             0.03
Net income (loss) attributable to common shareholders              $  (0.02   )   $  0.60         $  0.34          $  0.57
Net income (loss) attributable to common shareholders per share -
diluted:
Income (loss) from continuing operations attributable to common    $  (0.02   )   $  0.56         $  0.22          $  0.51
shareholders
Discontinued operations attributable to common shareholders           0.00           0.01            0.11             0.03
Net income (loss) attributable to common shareholders              $  (0.02   )   $  0.57         $  0.33          $  0.54
Weighted average common shares outstanding:
Basic                                                                 39,780         40,093          39,460           40,251
Diluted                                                               39,780         41,994          40,051           42,121
Income (loss) attributable to common shareholders:
Income (loss) from continuing operations (net of income
tax provision (benefit) of ($716) and $13,647 for the
three months ended September 30, 2009 and 2008,
respectively, and $5,555 and $12,288 for the nine
months ended September 30, 2009 and 2008,
respectively)                                            $ (714 )  $ 23,670   $ 9,044    $ 21,431
Discontinued operations (net of income tax provision of
$277 for the three months ended September 30, 2008
and $2,726 and $848 for the nine months ended
September 30, 2009 and 2008, respectively)                 a^'       433        4,253      1,323
Net income (loss) attributable to common shareholders    $ (714 )  $ 24,103   $ 13,297   $ 22,754
(1)  Consists principally of hydrocarbon derivative gains / (losses) that
     relate to the operating activities of the Company's consolidated
     subsidiary, Atlas Pipeline, and the underlying hydrocarbon
     derivatives do not represent present or potential future obligations
     of the Company.
ATLAS ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands, except per share data)
                                                September 30,     December 31,
ASSETS                                          2009              2008
Current assets:
Cash and cash equivalents                       $      35,693     $      104,496
Accounts receivable                                    145,894           172,427
Current portion of derivative asset                    88,960            152,726
Prepaid expenses and other                             28,781            57,679
Current assets of discontinued operations              a^'               13,441
Total current assets                                   299,328           500,769
Property, plant and equipment, net                     3,708,389         3,744,815
Goodwill and intangible assets, net                    212,705           232,651
Long-term derivative asset                             42,405            69,451
Investment in joint venture                            133,740           a^'
Other assets, net                                      75,159            56,030
Long-term assets of discontinued operations            a^'               242,165
                                                $      4,471,726  $      4,845,881
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt               $      12,000     $      a^'
Accounts payable                                       105,929           140,725
Liabilities associated with drilling contracts         16,590            96,883
Accrued producer liabilities                           45,539            66,846
Current portion of derivative liability                46,570            73,776
Accrued and other current liabilities                  188,783           138,424
Current liabilities of discontinued operations         a^'               10,572
Total current liabilities                              415,411           527,226
Long-term debt, less current portion                   2,115,505         2,413,082
Deferred tax liability                                 51,158            242,058
Long-term derivative liability                         33,847            59,103
Other long-term liabilities                            71,962            74,844
Stockholders' equity:
Stockholders' equity                                   1,131,025         390,372
Accumulated other comprehensive income                 50,351            21,143
                                                       1,181,376         411,515
Non-controlling interests                              602,467           1,118,053
Total stockholders' equity                             1,783,843         1,529,568
                                                $      4,471,726  $      4,845,881
ATLAS ENERGY, INC.
Financial and Operating Highlights
                                               Three Months Ended          Nine Months Ended
                                               September 30,               September 30,
                                               2009            2008        2009         2008
Net income attributable to common              $   (0.02  )    $   0.60    $   0.34     $   0.57
shareholders per share - basic
Adjusted net income attributable to common     $   0.09        $   0.25    $   0.63     $   0.76
shareholders per share - basic(1)
Pro forma adjusted net income attributable to  $   0.10        $   0.30    $   0.65     $   0.78
common shareholders per share - basic(1)
E&P Operations Discretionary Cash Flow per     $   0.58        $   0.78    $   2.18     $   2.36
Share(2)
Production revenues (in thousands):
Gas                                            $   62,748      $   77,253  $   199,519  $   224,345
Oil                                                3,238           3,982       8,389        12,072
Production volume:(3) (4)
Appalachia:
Gas (Mcfd)                                         38,579          33,228      39,749       31,929
Oil (Bpd)                                          460             413         442          410
Total (Mcfed)                                      41,339          35,706      42,401       34,389
Michigan:
Gas (Mcfd)                                         58,519          60,436      58,277       59,755
Oil (Bpd)                                          9               11          9            11
Total (Mcfed)                                      58,573          60,502      58,331       59,821
Total:
Gas (Mcfd)                                         97,098          93,664      98,026       91,684
Oil (Bpd)                                          469             424         451          421
Total (Mcfed)                                      99,912          96,208      100,732      94,210
Average sales prices: (4)
Gas (per Mcf) (5)(6)                           $   7.29        $   9.26    $   7.67     $   9.35
Oil (per Bbl)(7)                                   75.03           101.34      68.13        104.15
Production costs:(4)(8)
Lease operating expenses per Mcfe              $   0.81        $   0.82    $   0.84     $   0.82
Production taxes per Mcfe                          0.14            0.41        0.16         0.39
Total production costs per Mcfe                $   0.95        $   1.23    $   1.00     $   1.21
Depletion per Mcfe(4)                          $   2.55        $   2.57    $   2.79     $   2.55
(1)  A reconciliation from net income to adjusted net income attributable
     to common shareholders per share and pro forma adjusted net income
     attributable to common shareholders per share is provided in the
     financial tables of this release.
(2)  Calculation consists of discretionary cash flow divided by pro forma
     weighted average common shares outstanding for the respective
     period. A reconciliation from net income to discretionary cash flow
     is provided in the financial tables of this release. Pro forma
     weighted average common shares outstanding for the respective period
     consists of the historical basic weighted average shares of the
     Company for the respective period, adjusted for the 38.8 million
     shares of the Company's common stock issued in connection with the
     Merger.
(3)  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.
(4)  "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.
(5)  The Company's average sales price for gas before the effects of
     financial hedging was $3.20 and $10.49 per Mcf for the three months
     ended September 30, 2009 and 2008, respectively, and $4.01 and
     $10.03 per Mcf for the nine months ended September 30, 2009 and
     2008, respectively. Including the effects of certain allocations of
     the Company's production revenue to the investor partners within the
     Company's investment partnerships, average gas sales prices for the
     three and nine months ended September 30, 2009 was $7.06 per Mcf
     ($2.97 per Mcf before the effects of financial hedging) and $7.55
     per Mcf ($3.89 per Mcf before the effects of financial hedging),
     respectively.
(6)  Includes cash proceeds of $0.3 million and $2.6 million for the
     three months ended September 30, 2009 and 2008, respectively, and
     $2.4 million and $10.5 million for the nine months ended September
     30, 2009 and 2008, respectively, received from the settlement of
     ineffective derivative gains associated with the acquisition of the
     Company's Michigan operations but not reflected in the consolidated
     statements of operations.
(7)  The Company's average sales price for oil before the effects of
     financial hedging was $62.81 and $106.94 per barrel for the three
     months ended September 30, 2009 and 2008, respectively, and $52.30
     and $108.09 per barrel for the nine months ended September 30, 2009
     and 2008, respectively.
(8)  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. Including
     the effects of the Company's proportionate share of lease operating
     expenses associated with certain allocations of production revenue
     to investor partners within its investment partnerships (see Note
     5), lease operating expenses per Mcfe for the three and nine months
     ended September 30, 2009 was $0.73 per Mcfe (total production costs
     per Mcfe were $0.87) and $0.80 per Mcfe (total production costs per
     Mcfe were $0.96), respectively.
ATLAS ENERGY, INC.
CAPITALIZATION INFORMATION
(unaudited;
in thousands, except per share data)
                      September 30, 2009                                              December 31, 2008
                                        Atlas                                                           Atlas
                                        Pipeline                                                        Pipeline
                                        and Atlas                                                       and Atlas
                      Atlas             Pipeline                                      Atlas             Pipeline
                      Energy            Holdings            Consolidated              Energy            Holdings            Consolidated
Total debt            $  872,455        $   1,255,050       $    2,127,505            $  873,655        $   1,539,427       $    2,413,082
Less: Cash               (30,105   )        (5,588    )          (35,693      )          (97,211   )        (7,285    )          (104,496     )
Total net debt           842,350            1,249,462            2,091,812               776,444            1,532,142            2,308,586
Stockholders' equity     1,185,545          716,454              1,783,843(1)            1,168,768          588,889              1,529,568(1)
Total capitalization  $  2,027,895      $   1,965,916       $    3,875,655            $  1,945,212      $   2,121,031       $    3,838,154
Ratio of net debt to                                        0.54x                                                           0.60x
capitalization
(1) Net of eliminated amounts.
ATLAS ENERGY, INC.
CAPITAL EXPENDITURE DATA
(unaudited; in thousands, except per share data)
                                   Three Months Ended        Nine Months Ended
                                   September 30,             September 30,
                                   2009        2008((1))     2009         2008((1))
Atlas Energy                       $   34,372  $    89,300   $   130,785  $    224,970
Atlas Pipeline Partners                7,116        81,714       137,610       223,768
Consolidated capital expenditures  $   41,488  $    171,014  $   268,395  $    448,738
(1)  Restated to reflect amounts reclassified to discontinued operations
     due to APL's sale of its NOARK gas gathering and interstate pipeline
     system.
ATLAS ENERGY, INC.
Financial Information
(unaudited; in thousands, except per share data)
                                                        Three Months Ended                Nine Months Ended
                                                        September 30,                     September 30,
                                                        2009             2008             2009              2008
E&P Operations:
Well construction and completion margin                 $   12,358       $   15,260       $   38,995        $   44,800
Gas and oil production margin(1)                            54,211           67,481           199,463           202,325
Administration and oversight margin                         3,149            5,216            9,644             15,370
Well services margin                                        2,634            2,546            7,989             7,548
Gas gathering                                               (1,874  )        (3,645  )        (6,720   )        (9,142   )
E&P Operations Gross Margin                                 70,478           86,858           249,371           260,901
Cash general and administrative costs(2)                    (15,390 )        (11,729 )        (41,824  )        (35,795  )
Other income (loss), net                                    1,082            737              (337     )        1,622
E&P Operations Adjusted EBITDA(3)                           56,170           75,866           207,210           226,728
Cash interest expense(4)                                    (17,903 )        (14,099 )        (44,287  )        (40,398  )
Cash income tax refunds (payments)                          7,298            a^'              7,298             a^'
E&P Operations Discretionary Cash Flow(3)                   45,565           61,767           170,221           186,330
Capital expenditures                                        (34,372 )        (89,300 )        (130,785 )        (224,970 )
E&P Operations Free Cash Flow(3)(5)                     $   11,193       $   (27,533 )    $   39,436        $   (38,640  )
                                                        Three Months Ended                Nine Months Ended
                                                        September 30,                     September 30,
                                                        2009             2008             2009              2008
Reconciliation of non-GAAP measures to net income
attributable to common shareholders(3):
E&P Operations Discretionary Cash Flow                  $   45,565       $   61,767       $   170,221       $   186,330
Atlas Pipeline and Atlas Pipeline Holdings net (income)     (2,614  )        25,865           6,233             (1,326   )
loss attributable to common shareholders
Cash income tax payments (refunds)                          (7,298  )        a^'              (7,298   )        a^'
Income tax benefit (provision)                              716              (13,647 )        (5,555   )        (12,288  )
Non-recurring Merger costs                                  (6,108  )        a^'              (6,752   )        a^'
Depreciation, depletion and amortization                    (24,563 )        (23,584 )        (79,863  )        (68,339  )
Amortization of deferred finance costs                      (1,230  )        (670    )        (2,897   )        (2,182   )
Non-cash stock compensation expense                         (1,034  )        (2,706  )        (6,055   )        (8,121   )
Non-cash net loss on sale of assets                         (1,444  )        a^'              (5,694   )        a^'
Income attributable to ATN non-controlling interests(6)     (2,351  )        (20,361 )        (18,067  )        (60,811  )
Adjustment to reflect the cash impact of derivatives(1)     (353    )        (2,561  )        (30,976  )        (10,509  )
Net income (loss) attributable to common                $   (714    )    $   24,103       $   13,297        $   22,754
shareholders
(1)  Includes adjustments to reflect the cash impact of derivatives,
     including (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 operations for the three
     and nine months ended September 30, 2009 and 2008.
(2)  Excludes non-cash stock-compensation expense and non-recurring costs
     incurred in connection with the Merger.
(3)  Adjusted EBITDA, discretionary cash flow and net 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 adjusted EBITDA,
     discretionary cash flow and net cash flow provide additional
     information for evaluating the Company's performance, 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.
     Adjusted EBITDA is also a financial measurement that, with certain
     negotiated adjustments, is utilized within Atlas Energy Resources'
     financial covenants under its credit facility. Adjusted EBITDA,
     discretionary cash flow and net 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.
(4)  Excludes non-cash amortization of deferred financing costs.
(5)  Excludes the impact of cash distributions paid by Atlas Energy
     Resources, LLC to its non-controlling interests for periods prior to
     the Merger on September 29, 2009.
(6)  Represents the non-controlling interests in the net income (loss) of
     Atlas Energy Resources, LLC prior to the Merger on September 29,
     2009.
ATLAS ENERGY, INC.
Financial Information
(unaudited; in thousands, except per share data)
                                                                 Three Months Ended           Nine Months Ended
                                                                 September 30,                September 30,
                                                                 2009          2008           2009           2008
Reconciliation of net income (loss) to non-GAAP measure(1):
Net income (loss) attributable to common shareholders            $  (714   )   $  24,103      $  13,297      $  22,754
Atlas Pipeline and Atlas Pipeline Holdings loss                     2,614         (25,865 )      (6,233  )      1,326
(income) attributable to common shareholders, net
of attributable income tax provision (benefit)
Non-recurring Merger costs                                          6,108         a^'            6,752          a^'
Adjustments to reflect the cash impact of derivatives               353           2,561          30,976         10,509
Non-cash net loss on sale of assets                                 1,444         a^'            5,694          a^'
Non-cash compensation expense                                       1,034         2,706          6,055          8,121
Adjustment to non-controlling interests for the above items         (4,295 )      (2,028  )      (24,192 )      (7,442  )
Tax effect of the above items                                       (2,786 )      8,387          (7,312  )      (4,529  )
Adjusted net income                                              $  3,758      $  9,864       $  25,037      $  30,739
Adjusted net income per common share:
Basic                                                            $  0.09       $  0.25        $  0.63        $  0.76
Diluted                                                          $  0.09       $  0.23        $  0.63        $  0.73
Weighted average common shares outstanding:
Basic                                                               39,780        40,093         39,460         40,251
Diluted                                                             40,706        41,994         40,051         42,121
Pro forma adjusted net income per share(2):
Adjusted net income                                              $  3,758      $  9,864       $  25,037      $  30,739
Adjustment to remove non-controlling interests for Atlas Energy     6,646         22,389         42,259         51,747
Resources
Tax effect of the above item                                        (2,393 )      (8,198  )      (16,219 )      (18,940 )
Pro forma adjusted net income                                    $  8,011      $  24,055      $  51,077      $  63,546
Pro forma adjusted net income per common
share:
Basic                                                            $  0.10       $  0.30        $  0.65        $  0.80
Diluted                                                          $  0.10       $  0.30        $  0.65        $  0.78
Pro forma weighted average common shares
outstanding(3):
Basic                                                               78,136        78,869         78,095         79,027
Diluted                                                             79,144        81,307         78,714         81,451
(1)  Adjusted net income is a non-GAAP financial measure under the rules
     of the Securities and Exchange Commission. Management of the Company
     believes that the above financial measure provides additional
     information with respect to the Company's ability to meet its
     capital expense and working capital requirements. Adjusted net
     income is not a measure of financial performance under GAAP and,
     accordingly, should not be considered as a substitute for revenues,
     net income or cash flows from operating activities prepared in
     accordance with GAAP.
(2)  Adjusted to reflect the Merger on September 29, 2009, through which
     the Company issued 38.8 million shares of its common stock in
     exchange for the 33.4 million Class B common units of ATN not
     previously held by the Company. The Merger effectively removes the
     non-controlling interests in the net income of Atlas Energy
     Resources, LLC upon the completion of the transaction.
(3)  Consists of the historical basic and diluted weighted average shares
     of the Company for the respective period, adjusted for the 38.8
     million shares of the Company's common stock issued in connection
     with the Merger (see Note 2).
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
Three Months Ended September 30,
2009
                                                                         Atlas Pipeline
                                                                         and Atlas
                                                        Atlas            Pipeline
                                                        Energy           Holdings           Eliminations   Consolidated
Revenue:
Well construction and completion                        $   81,496       $    a^'           $      a^'     $    81,496
Gas and oil production                                      65,986            a^'                  a^'          65,986
Transmission, gathering and processing                      6,098             199,505              a^'          205,603
Administration and oversight                                3,149             a^'                  a^'          3,149
Well services                                               5,012             a^'                  a^'          5,012
Gain (loss) on asset sales                                  (1,444  )         1,499                a^'          55
Gain on mark-to-market derivatives                          a^'               1,032                a^'          1,032
Other income, net                                           424               4,427                a^'          4,851
Total revenue                                               160,721           206,463              a^'          367,184
Costs and expenses:
Well construction and completion                            69,138            a^'                  a^'          69,138
Gas and oil production                                      12,128            a^'                  a^'          12,128
Transmission, gathering and processing                      7,972             159,890              a^'          167,862
Well services                                               2,378             a^'                  a^'          2,378
General and administrative                                  22,532            9,534                a^'          32,066
Depreciation, depletion and amortization                    24,563            21,897               a^'          46,460
Total costs and expenses                                    138,711           191,321              a^'          330,032
Operating income                                            22,010            15,142               a^'          37,152
Interest expense                                            (18,475 )         (29,279 )            a^'          (47,754 )
Income (loss) from continuing operations before income      3,535             (14,137 )            a^'          (10,602 )
tax provision (benefit)
Provision (benefit) for income taxes                        (716    )         a^'                  a^'          (716    )
Net income (loss) from continuing operations                4,251             (14,137 )            a^'          (9,886  )
Discontinued operations                                     a^'               a^'                  a^'          a^'
Net income (loss)                                           4,251             (14,137 )            a^'          (9,886  )
Income attributable to non-controlling                      (2,351  )         a^'                  a^'          (2,351  )
interests - E&P Operations
(Income) loss attributable to non-controlling               a^'               (953    )            12,476       11,523
interests - Atlas Pipeline and Atlas Pipeline
Holdings
Net income (loss) attributable to common                $   1,900        $    (15,090 )     $      12,476  $    (714    )
shareholders
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
Three Months Ended September 30,
2008
                                                                Atlas Pipeline
                                                                and Atlas
                                                 Atlas          Pipeline
                                                 Energy         Holdings           Eliminations        Consolidated
Revenue:
Well construction and completion                 $  116,987     $    a^'           $    a^'            $    116,987
Gas and oil production                              81,235           a^'                a^'                 81,235
Transmission, gathering and processing              4,886            418,077            (12,021  )          410,942
Administration and oversight                        5,216            a^'                a^'                 5,216
Well services                                       5,299            a^'                a^'                 5,299
Gain on mark-to-market derivatives                  a^'              147,505            a^'                 147,505
Other income, net                                   737              3,081              a^'                 3,818
Total revenue                                       214,360          568,663            (12,021  )          771,002
Costs and expenses:
Well construction and completion                    101,727          a^'                a^'                 101,727
Gas and oil production                              16,315           a^'                (3,627   )          12,688
Transmission, gathering and processing              8,531            333,851            (8,394   )          333,988
Well services                                       2,753            a^'                a^'                 2,753
General and administrative                          14,435           (1,788  )          a^'                 12,647
Depreciation, depletion and amortization            23,584           20,741             a^'                 44,325
Total costs and expenses                            167,345          352,804            (12,021  )          508,128
Operating income                                    47,015           215,859            a^'                 262,874
Interest expense                                    (14,769 )        (22,562 )          a^'                 (37,331  )
Income from continuing operations before income     32,246           193,297            a^'                 225,543
tax provision
Provision for income taxes                          13,647           a^'                a^'                 13,647
Net income from continuing operations               18,599           193,297            a^'                 211,896
Discontinued operations                             a^'              6,261              a^'                 6,261
Net income                                          18,599           199,558            a^'                 218,157
Income attributable to non-controlling              (20,361 )        a^'                a^'                 (20,361  )
interests - E&P Operations
Income attributable to non-controlling              a^'              (2,591  )          (171,102 )          (173,693 )
interests - Atlas Pipeline and Atlas Pipeline
Holdings
Net income (loss) attributable to common         $  (1,762  )   $    196,967       $    (171,102 )     $    24,103
shareholders
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
Nine Months Ended September 30,
2009
                                                                 Atlas Pipeline
                                                                 and Atlas
                                                Atlas            Pipeline
                                                Energy           Holdings           Eliminations       Consolidated
Revenue:
Well construction and completion                $   257,231      $    a^'           $    a^'           $    257,231
Gas and oil production                              207,908           a^'                a^'                207,908
Transmission, gathering and processing              16,210            555,929            (16,766 )          555,373
Administration and oversight                        9,644             a^'                a^'                9,644
Well services                                       14,911            a^'                a^'                14,911
Gain (loss) on asset sales                          (5,694  )         111,440            a^'                105,746
Loss on mark-to-market derivatives                  a^'               (17,245 )          a^'                (17,245   )
Other income (loss), net                            (995    )         12,691             a^'                11,696
Total revenue                                       499,215           662,815            (16,766 )          1,145,264
Costs and expenses:
Well construction and completion                    218,236           a^'                a^'                218,236
Gas and oil production                              39,421            a^'                (6,204  )          33,217
Transmission, gathering and processing              22,930            458,384            (10,562 )          470,752
Well services                                       6,922             a^'                a^'                6,922
General and administrative                          54,631            26,988             a^'                81,619
Depreciation, depletion and amortization            79,863            67,564             a^'                147,427
Total costs and expenses                            422,003           552,936            (16,766 )          958,173
Operating income                                    77,212            109,879            a^'                187,091
Interest expense                                    (46,526 )         (77,796 )          a^'                (124,322  )
Income from continuing operations before income     30,686            32,083             a^'                62,769
tax provision
Provision for income taxes                          5,555             a^'                a^'                5,555
Net income from continuing operations               25,131            32,083             a^'                57,214
Discontinued operations                             a^'               59,769             a^'                59,769
Net income                                          25,131            91,852             a^'                116,983
Income attributable to non-controlling              (18,067 )         a^'                a^'                (18,067   )
interests - E&P Operations
Income attributable to non-controlling              a^'               (2,075  )          (83,544 )          (85,619   )
interests - Atlas Pipeline and Atlas Pipeline
Holdings
Net income (loss) attributable to common        $   7,064        $    89,777        $    (83,544 )     $    13,297
shareholders
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
Nine Months Ended September 30,
2008
                                                                       Atlas Pipeline
                                                                       and Atlas
                                                        Atlas          Pipeline
                                                        Energy         Holdings             Eliminations       Consolidated
Revenue:
Well construction and completion                        $  343,466     $    a^'             $    a^'           $    343,466
Gas and oil production                                     236,417          a^'                  a^'                236,417
Transmission, gathering and processing                     15,151           1,235,976            (32,768 )          1,218,359
Administration and oversight                               15,370           a^'                  a^'                15,370
Well services                                              15,363           a^'                  a^'                15,363
Gain on asset sales                                        a^'              a^'                  a^'                a^'
Loss on mark-to-market derivatives                         a^'              (257,344  )          a^'                (257,344  )
Other income, net                                          1,622            10,220               a^'                11,842
Total revenue                                              627,389          988,852              (32,768 )          1,583,473
Costs and expenses:
Well construction and completion                     
For full details on Atlas Energy Inc (ATLS) click here. Atlas Energy Inc (ATLS) has Short Term PowerRatings of 3. Details on Atlas Energy Inc (ATLS) Short Term PowerRatings is available at This Link.

    


More News:   Market Updates | Stock Alerts | All Trading News | Stock Index

Email
Print
Archives
Feedback
Email Article Link
Close X
Recipients email address
Your name
Your email
Add a note (optional)




Stocks RSS





Most Popular News
  UPCOMING EVENTS
Learn new strategies, how to trade in this market, and the stocks you should be focusing on each day. Join us for our free 20 minute tele-seminars during the week.
* Attendance is strictly limited and are filled on a first-come, first-served basis.
PREMIER SPONSORED LINKS
TRADE CENTER
 
The TradingMarkets Directory
RELATED SITES
Nothing but forex
Please call 1-213-955-5858 ext. 1

About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback

Disclaimer:

The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.

It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302

© Copyright 2009 The Connors Group, Inc.


All analyst commentary provided on TradingMarkets.com is provided for educational purposes only. The analysts and employees or affiliates of TradingMarkets.com may hold positions in the stocks or industries discussed here. This information is NOT a recommendation or solicitation to buy or sell any securities. Your use of this and all information contained on TradingMarkets.com is governed by the Terms and Conditions of Use. Please click the link to view those terms. Follow this link to read our Editorial Policy.

© 2009 The Connors Group, Inc.