Atlas Energy Group, LLC Reports Operating And Financial Results For The Fourth Quarter And Full Year 2015

25 Feb, 2016, 21:39 ET from Atlas Energy Group, LLC

PHILADELPHIA, Feb. 25, 2016 /PRNewswire/ -- Atlas Energy Group, LLC (NYSE: ATLS) ("Atlas Energy", the "Company" or "ATLS") today reported operating and financial results for the fourth quarter and full year 2015.

  • ATLS received approximately $0.6 million in management fees and cash distributions during the fourth quarter 2015 from its E&P development subsidiary, Atlas Growth Partners, L.P. ("AGP"). AGP raised approximately $233 million in investor capital in its most recent fundraising which closed on June 30, 2015.
  • ATLS received $0.6 million in cash distributions in the fourth quarter 2015 from Arc Logistics Partners, LP (NYSE: ARCX), a master limited partnership of which approximately 16% of its general partner interest and approximately 12% of its limited partner interest is owned by ATLS through the Company's interest in Lightfoot Capital Partners. In January 2016, ARCX announced a quarterly cash distribution of $0.44 per common unit for the fourth quarter 2015, unchanged from the third quarter 2015 and 7.3% higher than the prior year comparable quarter.
  • Atlas Resource Partners, L.P. (NYSE: ARP), Atlas Energy's E&P subsidiary, paid monthly cash distributions totaling $0.0375 per common limited partner unit for the fourth quarter 2015 at a distribution coverage ratio of approximately 5.25x. On January 28, 2016, ARP announced the December 2015 monthly distribution of $0.0125 per common unit ($0.15 per unit on an annualized basis), which was paid on Friday February 12, 2016 to unitholders of record as of February 8, 2016.
  • Atlas Energy's Distributable Cash Flow, a non-GAAP measure, was approximately ($0.1) million(1), or ($0.00) per common unit, in the fourth quarter 2015, compared to $6.0 million, or $0.23 per common unit, in the third quarter 2015. The decrease in Distributable Cash Flow was in part due to lower amounts of cash received from the Company's investment in Atlas Resource Partners due to the reduction made on ARP's common unit distribution.
  • On a GAAP basis, net loss was $297.4 million for the fourth quarter 2015, compared with a loss of $582.3 million for the third quarter 2015 and a net loss of $594.6 million in the prior year fourth quarter.  Net loss in the current period was principally due to non-cash expenses at ARP, specifically an asset impairment charge on certain of ARP's oil and gas properties due to recent declines in forward commodity prices, partially offset by the mark-to-market gains recognized in the current quarter from ARP's financial hedge positions.

ATLS owns 100% of ARP's general partner Class A units and incentive distribution rights, and an approximate 23% 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 an adjustment to net income in ATLS' consolidated statements of operations and as a component of unitholders' equity 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 2015 earnings release for additional details on its financial results.

ARP's Fourth Quarter 2015 Highlights

  • Average net daily production for the fourth quarter 2015 was 249.5 million cubic feet equivalent per day ("Mmcfed"), approximately 16% lower than the prior year comparable quarter. The decrease in net production from the prior year quarter was due primarily to the sale of our Non-Operated interest in the County Line CBM Field in Wyoming effective October 1st as well as shutting in high volume Marcellus wells in Lycoming County, Pennsylvania for over half of the quarter. Average net daily production for the full year 2015 was 266.4 Mmcfed, as compared to 281.5 Mmcfed average for full year 2014.
  • ARP's net realized price for natural gas including the effect of hedge positions was $3.42 per thousand cubic feet ("mcf") for the fourth quarter 2015, compared to $3.30 per mcf for the third quarter 2015. Net realized oil prices including the effect of hedge positions averaged $85.26 per barrel for the fourth quarter 2015, compared to $88.42 for the third quarter 2015.
  • Investment partnership margin, which includes well services margin, contributed $5.0 million to Adjusted EBITDA and distributable cash flow for the fourth quarter 2015 compared with $12.0 million for the sequential quarter. The $7.0 million decrease in investment partnership margin was due to lower amounts of capital deployed during the fourth quarter due to scheduled changes in well drilling activity.
  • During the fourth quarter 2015, ARP was approximately 76% hedged on its net natural gas production and approximately 108% hedged on its net oil production. During the year ended December 31, 2015, ARP received approximately $179.1 million of cash from realized natural gas and oil hedge positions.

AGP's Fourth Quarter 2015 Highlights

AGP had net daily production of over 6,600 thousand cubic feet equivalent per day ("Mcfed") in the fourth quarter 2015, compared to average daily net production of approximately 6,400 Mcfed in the third quarter 2015. AGP connected two additional wells in the Eagle Ford shale during the fourth quarter 2015 as well as two more wells in the current quarter.

Corporate Expenses

  • Cash general and administrative expense, excluding amounts attributable to AGP and ARP, was $1.4 million for the fourth quarter 2015, compared to $2.6 million for the third quarter 2015. The decrease in expense from the prior quarter was due primarily to the timing of certain employee benefit costs. Please refer to the consolidating statements of operations provided in the financial tables of this release.
  • Cash interest expense was $1.7 million for the fourth quarter 2015, compared to $1.8 million for the third quarter 2015. ATLS had approximately $72.7 million of debt on its balance sheet at December 31, 2015, and a cash position of approximately $6.5 million.

ATLS will be discussing its fourth quarter and full year 2015 results on an investor call with management on Friday, February 26, 2016 at 9:00 am Eastern Time. Interested parties are invited to access the live webcast of the investor call 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 Resource website and telephonically beginning at approximately 12:30 p.m. ET on February 26, 2016 by dialing 855-859-2056, passcode: 35819906.

Atlas Energy Group, LLC (NYSE: ATLS) is a limited liability company which owns the following interests: all of the general partner interest, incentive distribution rights and an approximate 23% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P.; a general partner interest, incentive distribution rights and limited partner interests in Atlas Growth Partners, L.P.; and a general partner interest in Lightfoot Capital Partners, an entity that invests directly in energy-related businesses and assets. 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 14,500 producing natural gas and oil wells, located primarily in Appalachia, the Eagle Ford Shale (TX), the Barnett Shale (TX), the Mississippi Lime (OK), the Raton Basin (NM), the Black Warrior Basin (AL), the Arkoma Basin (OK) and the Rangely Field in Colorado.  ARP is also the largest sponsor of natural gas and oil investment partnerships in the U.S. For more information, please visit ARP's website at www.atlasresourcepartners.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.

Cautionary Note Regarding Forward-Looking Statements

This press release 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' and its subsidiaries' 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 acquisitions; 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' and its subsidiaries' level of indebtedness, leverage and liquidity, including borrowing base availability and covenant compliance; 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' and ARP'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.

(1)  A reconciliation of GAAP net income (loss) to Distributable Cash Flow is provided in the financial tables of this release. Please see footnote 61 to the Financial Information table of this release.

ATLAS ENERGY GROUP, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS

 (unaudited; in thousands, except per unit data)

Three Months Ended

Years Ended

December 31,

December 31,

Revenues:

2015

2014

2015

2014

      Gas and oil production

$        68,596

$     133,302

$      368,845

$     475,758

      Well construction and completion

12,840

46,647

76,505

173,564

      Gathering and processing

1,385

2,820

7,431

14,107

      Administration and oversight

511

3,492

7,812

15,564

      Well services

5,254

6,518

23,822

24,959

      Gain on mark-to-market derivatives

57,619

2,819

268,085

2,819

      Other, net

408

572

993

1,739

          Total revenues

146,613

196,170

753,493

708,510

Costs and expenses:

      Gas and oil production

39,974

49,706

171,882

184,296

      Well construction and completion

11,165

40,562

66,526

150,925

      Gathering and processing

2,207

3,625

9,613

15,525

      Well services

2,427

2,482

9,162

10,007

      General and administrative

27,532

26,989

109,569

90,476

      Depreciation, depletion and amortization

35,886

64,566

166,929

242,079

      Asset impairment

294,444

580,654

973,981

580,654

          Total costs and expenses

413,635

768,584

1,507,662

1,273,962

Operating loss

(267,022)

(572,414)

(754,169)

(565,452)

Loss on asset sales and disposal

(905)

(176)

(1,181)

(1,859)

Loss on extinguishment of debt

(4,726)

Interest expense

(29,430)

(21,961)

(125,658)

(73,435)

Net loss

(297,357)

(594,551)

(885,734)

(640,746)

Preferred unitholders' dividends

(1,014)

(3,360)

Loss attributable to non-controlling interests

228,905

437,611

649,316

471,439

Net loss attributable to unitholders'/owner's interests

$       (69,466)

$  (156,940)

$     (239,778)

$   (169,307)

Allocation of net loss attributable to unitholders'/owner's interests:

Portion applicable to owner's interest (period prior      to the transfer of assets on February 27, 2015)

$                —

$  (156,940)

$      (10,475)

$   (169,307)

Portion applicable to unitholders' interest (period      subsequent to the transfer of assets on February 27, 2015)

(69,466)

(229,303)

Net loss attributable to unitholders' /owner's interests

$       (69,466)

$  (156,940)

$     (239,778)

$   (169,307)

Net loss attributable to unitholders per common unit:

Basic

$          (2.67)

$              —

$          (8.82)

$             —

Diluted

$          (2.67)

$              —

$          (8.82)

$             —

Weighted average common units outstanding:

Basic

26,011

26,011

Diluted

26,011

26,011

 

 

ATLAS ENERGY GROUP, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED BALANCE SHEETS

 (unaudited; in thousands)

December 31,

December 31,

ASSETS

2015

2014

Current assets:

      Cash and cash equivalents

$             31,214

$             58,358

      Accounts receivable

65,920

115,290

      Advances to affiliates

4,389

      Current portion of derivative asset

159,763

144,259

      Subscriptions receivable

19,877

32,398

      Prepaid expenses and other

22,997

26,789

          Total current assets

299,771

381,483

Property, plant and equipment, net

1,316,897

2,419,289

Intangible assets, net

456

691

Goodwill, net

13,639

13,639

Long-term derivative asset

198,371

130,602

Other assets, net

88,980

80,611

$        1,918,114

$        3,026,315

LIABILITIES AND UNITHOLDERS'/OWNER'S EQUITY

Current liabilities:

      Current portion of long-term debt

$                    —

$               1,500

      Accounts payable

52,550

123,670

      Liabilities associated with drilling contracts

21,483

40,611

      Accrued interest

25,452

26,479

      Accrued well drilling and completion costs

33,555

92,910

      Accrued liabilities

45,014

170,786

          Total current liabilities

178,054

455,956

Long-term debt, less current portion

1,607,182

1,541,085

Asset retirement obligations and other

124,919

114,059

Commitments and contingencies

Unitholders'/owner's equity:

      Common unitholders' deficit

(99,788)

      Series A preferred equity

37,515

      Owner's equity

147,308

      Accumulated other comprehensive income

4,284

54,008

(57,989)

201,316

      Non-controlling interests

65,948

713,899

Total unitholders'/owner's equity

7,959

915,215

$         1,918,114

$         3,026,315

 

 

ATLAS ENERGY GROUP, LLC

Financial and Operating Highlights

(unaudited)

Three Months Ended

Years Ended

December 31,

December 31,

2015

2014

2015

 

2014

Net loss attributable to unitholders per common unit -  basic

$             (2.67)

 

$              —

$             (8.82)

$              —

Production volume: (1)(2)

  ATLAS GROWTH:

Natural gas (Mcfd)

449

796

557

691

Oil (Bpd)

967

104

667

117

Natural gas liquids (Bpd)

71

99

81

88

Total (Mcfed)

6,679

2,018

5,047

1,920

  ATLAS RESOURCE:

Natural gas (Mcfd)

203,121

239,690

216,613

238,054

Oil (Bpd)

4,898

5,440

5,139

3,436

Natural gas liquids (Bpd)

2,824

4,040

3,155

3,802

Total (Mcfed)

249,450

296,571

266,374

281,486

  TOTAL:

Natural gas (Mcfd)

203,570

240,486

217,170

238,745

Oil (Bpd)

5,865

5,544

5,806

3,553

Natural gas liquids (Bpd)

2,895

4,140

3,236

3,891

Total (Mcfed)

256,129

298,590

271,421

283,406

Average realized sales prices:(2)

  ATLAS GROWTH:

Natural gas (per Mcf)

$             2.13

$             3.45

$             2.55

$             4.00

Oil (per Bbl) (4)

$           44.11

$           71.75

$           46.83

$           88.61

Natural gas liquids (per Bbl)

$           12.07

$           22.11

$           12.51

$           28.80

  ATLAS RESOURCE:

Natural gas (per Mcf) (3)

$             3.42

$             3.66

$             3.41

$             3.76

Oil (per Bbl)(4)

$           85.26

$           84.81

$           84.30

$           87.76

Natural gas liquids (per Bbl) (5)

$           23.17

$           26.97

$           22.40

$           29.59

Production costs per Mcfe:(2)(6)

  ATLAS GROWTH:

Lease operating expenses per Mcfe

$             0.51

$             2.35

$             0.83

$           2.47

Production taxes per Mcfe

0.28

0.43

0.31

0.48

Transportation and compression expenses per Mcfe

0.10

0.02

0.07

0.00

Total production costs per Mcfe

$             0.89

$             2.79

$             1.21

$           2.95

  ATLAS RESOURCE:

Lease operating expenses per Mcfe

$             1.33

$             1.32

$             1.34

$           1.27

Production taxes per Mcfe

0.17

0.28

0.19

0.27

Transportation and compression expenses per Mcfe

0.23

0.22

0.24

0.25

Total production costs per Mcfe

$             1.73

$             1.82

$             1.76

$           1.80

  TOTAL:

Lease operating expenses per Mcfe

$             1.31

$             1.33

$             1.33

$           1.28

Production taxes per Mcfe

0.17

0.28

0.19

0.27

Transportation and compression expenses per Mcfe

0.23

0.22

0.23

0.25

Total production costs per Mcfe

$             1.71

$             1.83

$             1.75

$           1.81

 

(1)   Production quantities consist of the sum of (i) the proportionate share of production from wells in which AGP 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.

 

(2)   "Mcf" and "Mcfd" represent thousand cubic feet and thousand cubic feet per day; "Mcfe" and "Mcfed" represent thousand cubic feet equivalents and thousand cubic feet equivalents per day, and "Bbl" and "Bpd" represent barrels and barrels per day.  Barrels are converted to Mcfe using the ratio of six Mcf's to one barrel.

 

(3)   ARP's average sales prices for natural gas before the effects of financial hedging were $1.96 per Mcf and $3.52 per Mcf for the three months ended December 31, 2015 and 2014, respectively, and $2.23 per Mcf and $3.93 per Mcf for the years ended December 31, 2015 and 2014, respectively. ARP's amounts exclude the impact of subordination of ARP's production revenues to investor partners within its investor partnerships. Including the effects of this subordination, ARP's average natural gas sales prices were $3.39 per Mcf ($1.93 per Mcf before the effects of financial hedging) and $3.61 per Mcf ($3.46 per Mcf before the effects of financial hedging) for the three months ended December 31, 2015 and 2014, respectively, and $3.36 per Mcf ($2.19 per Mcf before the effects of financial hedging) and $3.67 per Mcf ($3.84 per Mcf before the effects of financial hedging) for the years ended December 31, 2015 and 2014, respectively.

 

(4)   AGP's average sales price for oil before the effects of financial hedging was $41.27 per barrel and $71.75 per barrel for the three months ended December 31, 2015 and 2014, respectively, and $44.98 per barrel and $88.61 per barrel for the years ended December 31, 2015 and 2014, respectively. ARP's average sales prices for oil before the effects of financial hedging were $36.13 per barrel and $65.29 per barrel for the three months ended December 31, 2015 and 2014, respectively, and $44.19 per barrel and $82.22 per barrel for the years ended December 31, 2015 and 2014, respectively.

 

(5)   ARP's average sales prices for natural gas liquids before the effects of financial hedging were $11.99 per barrel and $21.80 per barrel for the three months ended December 31, 2015 and 2014, respectively, and $12.77 per barrel and $29.39 per barrel for the years ended December 31, 2015 and 2014, 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, ARP's lease operating expenses per Mcfe were $1.32 per Mcfe ($1.72 per Mcfe for total production costs) and $1.31 per Mcfe ($1.80 per Mcfe for total production costs) for the three months ended December 31, 2015 and 2014, respectively, and $1.32 per Mcfe ($1.74 per Mcfe for total production costs) and $1.25 per Mcfe ($1.77 per Mcfe for total production costs) for the years ended December 31, 2015 and 2014, respectively. Including the effects of these costs, total lease operating expenses per Mcfe were $1.29 per Mcfe ($1.70 per Mcfe for total production costs) and $1.31 per Mcfe ($1.81 per Mcfe for total production costs) for the three months ended December 31, 2015 and 2014, respectively, and $1.31 per Mcfe ($1.73 per Mcfe for total production costs) and $1.26 per Mcfe ($1.78 per Mcfe for total production costs) for the years ended December 31, 2015 and 2014, respectively.

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                

ATLAS ENERGY GROUP, LLC

Financial Information

(unaudited; in thousands except per unit amounts)

Three Months Ended

Years Ended

December 31,

December 31

Reconciliation of net loss to non-GAAP measures(1):

2015

2014

2015

2014

Net loss

$     (297,357)

$      (594,551)

$      (885,734)

$          (640,746)

Distributable cash flow not attributable to unitholders prior to      February 27, 2015 (the asset transfer date)(2)

 

 

(15,823)

 

(4,291)

 

(58,738)

Atlas Resource net loss attributable to unitholders

62,926

153,157

177,410

151,831

Atlas Resource cash distributions earned by ATLS(3)

2,816

18,720

30,930

73,284

Atlas Growth net loss attributable to unitholders

6

352

237

837

Atlas Growth cash distributions earned by ATLS(3)

154

64

441

197

Non-recurring spinoff and acquisition costs

17,825

77

Amortization of deferred finance costs and predecessor

    Term Loan interest expense

 

761

 

329

 

16,785

 

1,270

Non-cash stock compensation expense

2,357

5,678

Gain on asset sales and disposal

(7)

(10)

Loss on extinguishment of debt

4,726

Preferred unit distributions

(1,014)

(3,360)

Other non-cash adjustments

369

148

2,105

559

Loss attributable to non-controlling interests

228,905

437,611

649,316

471,439

Distributable Cash Flow attributable to unitholders(1)

$               (77)

$                  —

$          12,068

$                    —

Supplemental Adjusted EBITDA and Distributable Cash Flow Summary:

Atlas Resource Cash Distributions Earned(3):

Limited Partner Units

$            2,699

$          14,580

$          28,871

$            57,905

Series A Preferred Units (2%)

117

1,074

2,059

4,077

Incentive Distribution Rights

3,066

11,302

Total Atlas Resource Cash Distributions Earned(3)

2,816

18,720

30,930

73,284

per limited partner unit

$            0.038

$            0.590

$            1.013

$              2.343

Atlas Growth Cash Distributions Earned(3)

154

64

441

197

Total Cash Distributions Earned

2,970

18,784

31,371

73,481

Cash general and administrative expenses(4)

(1,444)

(1,146)

(9,406)

(6,909)

Other, net

1,066

701

4,494

2,187

Adjusted EBITDA(1)

2,592

18,339

26,459

68,759

Cash interest expense(5)

(1,655)

(2,516)

(6,740)

(10,021)

Preferred unit distributions

(1,014)

(3,360)

Distributable Cash Flow(1)

$               (77)

$         15,823

$         16,359

$            58,738

Distributable cash flow not attributable to unitholders prior to    February 27, 2015 (the asset transfer date)(2)

 

 

(15,823)

 

(4,291)

 

(58,738)

Distributable Cash Flow attributable to unitholders(1)

$               (77)

$                 —

$         12,068

$                   —

(1)

EBITDA and Distributable Cash Flow is relevant and useful, because they help 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' 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;

·           Ability to generate sufficient cash flows to support its distributions to unitholders;

·           Ability to incur and service debt and fund capital expansion;

·           Viability of potential acquisitions and other capital expenditure projects; and

·           Ability to comply with financial covenants in its debt facility, which is calculated based upon Adjusted EBITDA.

 

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;

·           Income tax expense;

·           Depreciation, depletion and amortization.

 

ATLS defines Adjusted EBITDA as EBITDA plus the following adjustments:

 

·           Cash distributions paid by ARP and AGP within 45 days after the end of the respective quarter, based upon their distributable cash flow generated during that quarter;

·           Asset impairments;

·           Acquisition and related costs;

·           Non-cash stock compensation;

·           (Gains) losses on asset disposal;

·           Cash proceeds received from monetization of derivative transactions;

·           Amortization of premiums paid on swaption derivative contracts; and

·           Other items.

 

ATLS adjusts DCF for non-cash, non-recurring and other items for the sole purpose of evaluating its cash distribution for the quarterly period, with EBITDA and Adjusted EBITDA adjusted in the same manner for consistency. ATLS defines DCF as Adjusted EBITDA less the following adjustments:

 

·           Cash interest expense; and

·           Maintenance capital expenditures.

 

(2)

In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the spin-off assets for all periods prior to its spin-off date of February 27, 2015.

(3)

Represents the cash distribution paid by ARP and AGP within 45 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter.

(4)

Excludes non-cash stock compensation expense and certain non-recurring spinoff costs and acquisition and related costs.

(5)

Excludes non-cash amortization of deferred financing costs.

 

 

ATLAS ENERGY GROUP, LLC

CAPITALIZATION INFORMATION

 (unaudited; in thousands)

December 31, 2015

Atlas

Atlas

Energy

Resource

Consolidated

Total debt

$        72,700

$  1,534,482

$     1,607,182

Less:  Cash

(29,861)

(1,353)

(31,214)

Total net debt

42,839

1,533,129

1,575,968

Unitholders' equity (deficit)

83,922

(84,628)

      7,959(1)

Total capitalization

$        126,761

$  1,448,501

$    1,583,927

Ratio of net debt to capitalization

0.34x 

(1)        Net of eliminated amounts.             

December 31, 2014

Atlas

Atlas

Energy

Resource

Consolidated

Total debt

$        148,125

$1,394,460

$    1,542,585

Less:  Cash

(43,111)

(15,247)

(58,358)

Total net debt

105,014

1,379,213

1,484,227

Owner's equity

267,637

947,537

      915,215(2)

Total capitalization

$        372,651

$2,326,750

$    2,399,442

Ratio of net debt to capitalization

0.28x 

(2)        Net of eliminated amounts.             

 

 

ATLAS ENERGY GROUP, LLC

CONSOLIDATING STATEMENTS OF OPERATIONS

 (unaudited; in thousands)

Three Months Ended December 31, 2015

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$          3,840

$        64,756

$                 −

$        68,596

      Well construction and completion

12,840

12,840

      Gathering and processing

1,385

1,385

      Administration and oversight

511

511

      Well services

5,254

5,254

      Gain on mark-to-market derivatives

102

57,517

57,619

      Other, net

247

161

408

          Total revenues

4,189

142,424

146,613

Costs and expenses:

      Gas and oil production

545

39,429

39,974

      Well construction and completion

11,165

11,165

      Gathering and processing

2,207

2,207

      Well services

2,427

2,427

      General and administrative

5,964

21,568

27,532

      Depreciation, depletion and amortization

3,856

32,030

35,886

      Asset impairment

55

294,389

294,444

          Total costs and expenses

10,420

403,215

413,635

Operating loss

(6,231)

(260,791)

(267,022)

Loss on asset sales and disposal

(905)

(905)

Interest expense

(2,402)

(27,028)

(29,430)

Net loss

(8,633)

(288,724)

(297,357)

Preferred unitholders' dividends

(1,014)

(1,014)

  Loss attributable to non-controlling    interests

 

 

 

228,905

 

228,905

Net loss attributable to unitholders

$         (9,647)

$     (288,724)

$      228,905

$       (69,466)

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS

 (unaudited; in thousands)

Three Months Ended December 31, 2014

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$          1,144

$      132,158

$                 −

$      133,302

      Well construction and completion

46,647

46,647

      Gathering and processing

2,820

2,820

      Administration and oversight

3,492

3,492

      Well services

6,518

6,518

      Gain on mark-to-market derivatives

2,819

2,819

      Other, net

325

247

572

          Total revenues

1,469

194,701

196,170

Costs and expenses:

      Gas and oil production

518

49,188

49,706

      Well construction and completion

40,562

40,562

      Gathering and processing

3,625

3,625

      Well services

2,482

2,482

      General and administrative

5,534

21,455

26,989

      Depreciation, depletion and amortization

720

63,846

64,566

      Asset impairment

6,880

573,774

580,654

          Total costs and expenses

13,652

754,932

768,584

Operating loss

(12,183)

(560,231)

(572,414)

Gain (loss) on asset sales and disposal

7

(183)

(176)

Interest expense

(2,845)

(19,116)

(21,961)

Net loss

(15,021)

(579,530)

(594,551)

  Loss attributable to non-controlling    interests

 

 

 

437,611

 

437,611

Net loss attributable to owner

$       (15,021)

$     (579,530)

$      437,611

$     (156,940)

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS

 (unaudited; in thousands)

Year Ended December 31, 2015

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$        11,846

$      356,999

$                 −

$      368,845

      Well construction and completion

76,505

76,505

      Gathering and processing

7,431

7,431

      Administration and oversight

7,812

7,812

      Well services

23,822

23,822

      Gain on mark-to-market derivatives

862

267,223

268,085

      Other, net

752

241

993

          Total revenues

13,460

740,033

753,493

Costs and expenses:

      Gas and oil production

2,229

169,653

171,882

      Well construction and completion

66,526

66,526

      Gathering and processing

9,613

9,613

      Well services

9,162

9,162

      General and administrative

43,601

65,968

109,569

      Depreciation, depletion and amortization

8,951

157,978

166,929

      Asset impairment

7,346

966,635

973,981

          Total costs and expenses

62,127

1,445,535

1,507,662

Operating loss

(48,667)

(705,502)

(754,169)

Loss on asset sales and disposal

(1,181)

(1,181)

Loss on extinguishment of debt

(4,726)

(4,726)

Interest expense

(23,525)

(102,133)

(125,658)

Net loss

(76,918)

(808,816)

(885,734)

Preferred unitholders' dividends

(3,360)

(3,360)

  Loss attributable to non-controlling    interests

 

 

 

649,316

 

649,316

Net loss attributable to unitholders/owner

 

$       (80,278)

 

$     (808,816)

 

$      649,316

 

$     (239,778)

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS

 (unaudited; in thousands)

Year Ended December 31, 2014

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$         5,707

$      470,051

$                 −

$      475,758

      Well construction and completion

173,564

173,564

      Gathering and processing

14,107

14,107

      Administration and oversight

15,564

15,564

      Well services

24,959

24,959

      Gain on mark-to-market derivatives

2,819

2,819

      Other, net

1,149

590

1,739

          Total revenues

6,856

701,654

708,510

Costs and expenses:

      Gas and oil production

2,070

182,226

184,296

      Well construction and completion

150,925

150,925

      Gathering and processing

15,525

15,525

      Well services

10,007

10,007

      General and administrative

18,127

72,349

90,476

      Depreciation, depletion and amortization

2,156

239,923

242,079

      Asset impairment

6,880

573,774

580,654

          Total costs and expenses

29,233

1,244,729

1,273,962

Operating loss

(22,377)

(543,075)

(565,452)

Gain (loss) on asset sales and disposal

10

(1,869)

(1,859)

Interest expense

(11,291)

(62,144)

(73,435)

Net loss

(33,658)

(607,088)

(640,746)

  Loss attributable to non-controlling    interests

 

 

 

471,439

 

471,439

Net loss attributable to owner

$       (33,658)

$     (607,088)

$      471,439

$     (169,307)

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONDENSED CONSOLIDATING BALANCE SHEETS

 (unaudited; in thousands)

December 31, 2015

Atlas

Atlas

ASSETS

Energy

Resource

Eliminations

Consolidated

Current assets:

      Cash and cash equivalents

$        29,861

$          1,353

$                 −

$          31,214

      Accounts receivable

3,492

63,367

(939)

65,920

      Receivable from (advances to)

          affiliates

 

9,924

 

(9,924)

 

 

      Current portion of derivative asset

303

159,460

159,763

      Subscriptions receivable

19,877

19,877

      Prepaid expenses and other

62

22,935

22,997

          Total current assets

43,642

257,068

(939)

299,771

Property, plant and equipment, net

125,286

1,191,611

1,316,897

Intangible assets, net

456

456

Goodwill, net

13,639

13,639

Long-term derivative asset

109

198,262

198,371

Investment in subsidiaries

(7,726)

7,726

Other assets, net

27,997

60,044

939

88,980

$      189,308

$   1,721,080

$          7,726

$   1,918,114

LIABILITIES AND UNITHOLDERS' EQUITY (DEFICIT)

Current liabilities:

      Accounts payable

$          3,301

$       49,249

$                  −

$         52,550

      Liabilities associated with drilling

          contracts

 

 

21,483

 

 

21,483

      Accrued interest

16

25,436

25,452

      Accrued well drilling and completion

          costs

 

6,641

 

26,914

 

 

33,555

      Accrued liabilities

16,959

28,994

(939)

45,014

          Total current liabilities

26,917

152,076

(939)

178,054

Long-term debt, less current portion

72,700

1,534,482

1,607,182

Asset retirement obligations and other

5,769

119,150

124,919

Unitholders' equity (deficit):

      Common unitholders' deficit

(99,788)

(99,788)

      Series A preferred equity

37,515

37,515

      Partners' deficit

(104,003)

104,003

      Accumulated other comprehensive

          income

 

4,284

 

19,375

 

(19,375)

 

4,284

(57,989)

(84,628)

84,628

(57,989)

      Non-controlling interests

141,911

(75,963)

65,948

          Total unitholders' equity (deficit)

83,922

(84,628)

8,665

7,959

$      189,308

$   1,721,080

$         7,726

$     1,918,114

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONDENSED CONSOLIDATING BALANCE SHEETS

(unaudited; in thousands)

December 31, 2014

Atlas

Atlas

ASSETS

Energy

Resource

Eliminations

Consolidated

Current assets:

      Cash and cash equivalents

$       43,111

$        15,247

$                 −

$          58,358

      Accounts receivable

7,007

114,520

(6,237)

115,290

      Receivable from (advances to)

          affiliates

 

6,638

 

(2,249)

 

 

4,389

      Current portion of derivative asset

144,259

144,259

      Subscriptions receivable

32,398

32,398

      Prepaid expenses and other

493

26,296

26,789

          Total current assets

57,249

330,471

(6,237)

381,483

Property, plant and equipment, net

155,469

2,263,820

2,419,289

Intangible assets, net

691

691

Goodwill, net

13,639

13,639

Long-term derivative asset

130,602

130,602

Investment in subsidiaries

306,196

(306,196)

Other assets, net

24,293

50,081

6,237

80,611

$     543,207

$   2,789,304

$    (306,196)

$   3,026,315

LIABILITIES AND OWNER'S EQUITY

Current liabilities:

      Current portion of long-term debt

$         1,500

$                 −

$                 −

$            1,500

      Accounts payable

12,472

111,198

123,670

      Liabilities associated with drilling

          contracts

 

 

40,611

 

 

40,611

      Accrued interest

27

26,452

26,479

      Accrued well drilling and completion

          costs

 

12,506

 

80,404

 

 

92,910

      Accrued liabilities

98,364

78,659

(6,237)

170,786

          Total current liabilities

124,869

337,324

(6,237)

455,956

Long-term debt, less current portion

146,625

1,394,460

1,541,085

Asset retirement obligations and other

4,076

109,983

114,059

Owner's equity:

      Owner's equity

147,308

147,308

      Partners' capital

756,066

(756,066)

      Accumulated other comprehensive

          income

 

54,008

 

191,471

 

(191,471)

 

54,008

201,316

947,537

(947,537)

201,316

      Non-controlling interests

66,321

647,578

713,899

          Total owner's equity

267,637

947,537

(299,959)

915,215

$     543,207

$   2,789,304

$    (306,196)

$     3,026,315

 

 

ATLAS ENERGY GROUP, LLC

Ownership Interests Summary

Atlas Energy Ownership Interests as of February 25, 2016:

Amount

Overall

Ownership

Interest

Percentage

ATLAS RESOURCE:

      General partner interest

100%

2.0%

      Common units

20,962,485

19.7%

      Preferred units

3,749,986

3.5%

      Incentive distribution rights

100%

N/A

            Total Atlas Energy ownership interests in Atlas Resource

25.2%

ATLAS GROWTH:

      General partner interest

80.0%

2.0%

      Common units

500,010

2.1%

      Incentive distribution rights

80.0%

   N/A

            Total Atlas Energy ownership interests in Atlas                Growth

4.1%

LIGHTFOOT CAPITAL PARTNERS, GP LLC:

      Approximate general partner ownership interest

15.9%

      Approximate limited partner ownership interest

12.0%

 

 

SOURCE Atlas Energy Group, LLC



RELATED LINKS

http://www.atlasenergy.com