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

Feb 25, 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