Atlas Energy Group, LLC Reports Operating And Financial Results For The Third Quarter 2015

Nov 09, 2015, 17:01 ET from Atlas Energy Group, LLC

PITTSBURGH, Nov. 9, 2015 /PRNewswire/ -- Atlas Energy Group, LLC (NYSE: ATLS) ("Atlas Energy", the "Company" or "ATLS") today reported operating and financial results for the third quarter 2015.

  • Atlas Energy's Distributable Cash Flow, a non-GAAP measure, was approximately $6.0 million(1), or $0.23 per common unit, in the third quarter 2015, compared to $5.0 million, or $0.19 per common unit, in the second quarter 2015. The increase in Distributable Cash Flow was in part due to a higher amount of cash received from the Company's investment in Lightfoot Capital Partners due to the distribution of funds from the prior sale of certain assets.
  • Atlas Resource Partners, L.P. (NYSE: ARP), Atlas Energy's E&P subsidiary, paid monthly cash distributions totaling $0.325 per common limited partner unit for the third quarter 2015 at a distribution coverage ratio of approximately 0.9x. On October 28, 2015, ARP announced the September 2015 monthly distribution of $0.1083 per common unit ($1.30 per unit on an annualized basis), which will be paid on November 13, 2015 to unitholders of record as of November 9, 2015.
  • ATLS received approximately $0.6 million in management fees and cash distributions during the third 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 $1.4 million in cash distributions in the third quarter 2015 from Arc Logistics Partners, LP (NYSE: ARCX), a master limited partnership of which approximately 16% of its general partner is owned by ATLS through the Company's interest in Lightfoot Capital Partners. In October 2015, ARCX announced a quarterly cash distribution of $0.44 per common unit for the third quarter 2015, a 3.5% increase from the second quarter 2015 and 7.5% higher than the prior year comparable quarter.
  • On a GAAP basis, net loss was $582.3 million for the third quarter 2015, compared with a loss of $59.5 million for the second quarter 2015 and a net loss of $4.3 million in the prior year third 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.

ATLS Term Loan Refinancing

On August 10, 2015, ATLS entered into an agreement for a new term loan facility maturing in August 2020. The new facility refinanced the Company's existing term loan and had an initial balance of $82.7 million at an interest rate of LIBOR (floor of 1%) plus 7%. At September 30, 2015, $82.7 million was outstanding under the Term Loan Facility.

ARP's Third Quarter 2015 Highlights

  • ARP's average net daily production for the third quarter 2015 was 264.2 million cubic feet equivalents per day ("Mmcfed"), as compared to 270.8 Mmcfed for the second quarter 2015. ARP's third quarter 2015 production was comprised of 82% natural gas, 11% oil and 7% natural gas liquids ("NGL"). ARP connected two Mississippi Lime wells during the third quarter, and now operates 27 wells in the Eagle Ford shale. ARP is currently connecting additional wells on its Eagle Ford position and expects oil volumes to increase into 2016 as a result of its activity.
  • ARP's net realized price for natural gas including the effect of hedge positions was $3.30 per thousand cubic feet ("mcf") for the third quarter 2015, compared to $3.33/mcf for the second quarter 2015. Net realized oil prices including the effect of hedge positions averaged $88.42 per barrel ("bbl") for the third quarter 2015, compared to $83.19/bbl for the second quarter 2015. ARP was hedged approximately 71% on its natural gas production and approximately 100% on its oil production in the third quarter 2015.
  • Lease operating expenses decreased 6% from the second quarter 2015 to $1.30/mcf, and overall production costs of $1.74/mcf in the third quarter 2015 were 22% lower than the prior year comparable quarter. The decrease in expenses is due to ARP's ongoing production cost-reduction efforts, namely focused on water disposal, compression and fuel costs.
  • Investment partnership margin was approximately $12.0 million in the third quarter 2015, compared with $6.7 million for the second quarter 2015. The increase in investment partnership margin was due to increased deployment of partnership capital during the current quarter, which generated higher fee income, specifically Administration and Oversight Fees realized from the drilling of new investment program wells.

AGP's Third Quarter 2015 Highlights

AGP had net daily production of over 6,400 Mmcfed in the third quarter 2015, compared to average daily net production of approximately 2,800 Mmcfed in the second quarter 2015. AGP connected two additional wells in the Eagle Ford shale during the current quarter.

Corporate Expenses

  • Cash general and administrative expense, excluding amounts attributable to AGP and ARP, was $2.6 million for the third quarter 2015, compared to $2.0 million for the second quarter 2015. The increase 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 $1.8 million for the third quarter 2015, compared to $2.3 million for the second quarter 2015. ATLS had approximately $82.7 million of debt on its consolidated balance sheet at September 30, 2015, and a cash position of approximately $14.3 million.

*  *  *

ATLS will be discussing its third quarter 2015 results on an investor call with management on Tuesday, November 10, 2015 at 9:00 a.m. Eastern Time. Interested parties are invited to access the live webcast 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 ARP website and telephonically beginning at approximately 1:00 p.m. ET on November 10, 2015 by dialing (855) 859-2056, passcode: 66843641.

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; 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.

 

CONTACT:

Brian J. Begley

Vice President - Investor Relations

Atlas Energy Group, LLC

(877) 280-2857

(215) 405-2718 (fax)

 

 

ATLAS ENERGY GROUP, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS

 (unaudited; in thousands, except per unit data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

Revenues:

2015

2014

2015

2014

      Gas and oil production

$        94,612

$     130,937

$      300,249

$     342,456

      Well construction and completion

23,054

61,204

63,665

126,917

      Gathering and processing

1,685

3,061

6,046

11,287

      Administration and oversight

5,495

6,177

7,301

12,072

      Well services

5,842

6,597

18,568

18,441

      Gain on mark-to-market derivatives

131,777

210,466

Other, net

369

613

585

1,167

          Total revenues

262,834

208,589

606,880

512,340

Costs and expenses:

      Gas and oil production

42,300

52,004

131,908

134,590

      Well construction and completion

20,046

53,221

55,361

110,363

      Gathering and processing

2,473

3,214

7,406

11,900

      Well services

2,398

2,617

6,735

7,525

      General and administrative

21,704

17,299

82,037

63,487

Depreciation, depletion and amortization

43,311

65,068

131,043

177,513

Asset impairment

679,537

679,537

          Total costs and expenses

811,769

193,423

1,094,027

505,378

Operating income (loss)

(548,935)

15,166

(487,147)

6,962

Loss on asset sales and disposal

(362)

(92)

(276)

(1,683)

Loss on extinguishment of debt

(4,726)

(4,726)

Interest expense

(28,290)

(19,423)

(96,228)

(51,474)

Net loss

(582,313)

(4,349)

(588,377)

(46,195)

Preferred unitholders' dividends

(1,009)

(2,346)

Loss attributable to non-controlling interests

439,969

5,137

420,411

33,828

Net income (loss) attributable to unitholders'/owner's interests

$     (143,353)

$            788

$     (170,312)

$     (12,367)

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

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

$                —

$            788

$      (10,475)

$     (12,367)

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

(143,353)

(159,837)

Net income (loss) attributable to unitholders' /owner's interests

$     (143,353)

$            788

$     (170,312)

$     (12,367)

Net income (loss) attributable to unitholders per common unit:

Basic

$          (5.51)

$              —

$          (6.15)

$             —

Diluted

$          (5.51)

$              —

$          (6.15)

$             —

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)

September 30,

December 31,

ASSETS

2015

2014

Current assets:

      Cash and cash equivalents

$             54,950

$             58,358

      Accounts receivable

91,706

115,290

      Advances to affiliates

4,389

      Current portion of derivative asset

147,021

144,259

      Subscriptions receivable

23,054

32,398

      Prepaid expenses and other

26,022

26,789

          Total current assets

342,753

381,483

Property, plant and equipment, net

1,659,358

2,419,289

Intangible assets, net

515

691

Goodwill, net

13,639

13,639

Long-term derivative asset

206,142

130,602

Other assets, net

83,454

80,611

$        2,305,861

$        3,026,315

LIABILITIES AND UNITHOLDERS'/OWNER'S EQUITY

Current liabilities:

      Current portion of long-term debt

$                    —

$               1,500

      Accounts payable

85,792

123,670

      Liabilities associated with drilling contracts

40,611

      Accrued interest

11,428

26,479

      Accrued well drilling and completion costs

65,629

92,910

      Accrued liabilities

87,272

170,786

          Total current liabilities

250,121

455,956

Long-term debt, less current portion

1,587,747

1,541,085

Asset retirement obligations and other

122,982

114,059

Commitments and contingencies

Unitholders'/owner's equity:

      Common unitholders' equity

(34,624)

      Series A preferred equity

38,393

      Owner's equity

147,308

      Accumulated other comprehensive income

10,388

54,008

14,157

201,316

      Non-controlling interests

330,854

713,899

Total unitholders'/owner's equity

345,011

915,215

$         2,305,861

$         3,026,315

 

 

ATLAS ENERGY GROUP, LLC

Financial and Operating Highlights

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

Net income (loss) attributable to unitholders per common unit - basic

$           (5.51)

$             —

$       (6.15)

$             —

Production volume: (1)(2)

  ATLAS GROWTH:

Natural gas (Mcfd)

574

770

594

656

Oil (Bpd)

885

111

566

121

Natural gas liquids (Bpd)

91

104

84

85

Total (Mcfed)

6,426

2,058

4,497

1,887

  ATLAS RESOURCE:

Natural gas (Mcfd)

216,414

245,996

221,159

237,503

Oil (Bpd)

4,842

4,598

5,220

2,761

Natural gas liquids (Bpd)

3,121

4,048

3,266

3,722

Total (Mcfed)

264,196

297,876

272,077

276,403

  TOTAL:

Natural gas (Mcfd)

216,988

246,766

221,753

238,158

Oil (Bpd)

5,727

4,710

5,786

2,882

Natural gas liquids (Bpd)

3,212

4,152

3,350

3,807

Total (Mcfed)

270,623

299,934

276,574

278,290

Average realized sales prices:(2)

  ATLAS GROWTH:

Natural gas (per Mcf)

$          2.63

$          3.92

$          2.65

$       4.22

Oil (per Bbl) (4)

$        47.14

$        92.96

$        48.39

$     93.52

Natural gas liquids (per Bbl)

$       11.88

$       32.44

$       12.63

$     31.45

  ATLAS RESOURCE:

Natural gas (per Mcf) (3)

$          3.30

$          3.56

$          3.41

$       3.79

Oil (per Bbl)(4)

$        88.42

$        90.18

$        83.99

$     89.71

Natural gas liquids (per Bbl) (5)

$       21.42

$        32.21

$       22.17

$     30.54

Production costs per Mcfe:(2)(6)

  ATLAS GROWTH:

Lease operating expenses per Mcfe

$          0.81

$          2.71

$          0.99

$          2.51

Production taxes per Mcfe

0.31

0.52

0.32

0.50

Transportation and compression expenses per Mcfe

0.07

0.06

Total production costs per Mcfe

$          1.20

$          3.24

$          1.37

$          3.01

  ATLAS RESOURCE:

Lease operating expenses per Mcfe

$          1.30

$          1.37

$          1.34

$          1.26

Production taxes per Mcfe

0.19

0.30

0.20

0.27

Transportation and compression expenses per Mcfe

0.24

0.23

0.24

0.26

Total production costs per Mcfe

$          1.74

$          1.89

$          1.78

$          1.79

  TOTAL:

Lease operating expenses per Mcfe

$          1.29

$          1.37

$          1.33

$          1.26

Production taxes per Mcfe

0.19

0.30

0.20

0.27

Transportation and compression expenses per Mcfe

0.24

0.23

0.23

0.26

Total production costs per Mcfe

$          1.72

$          1.90

$          1.77

$          1.80

 

(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 $2.28 per Mcf and $3.48 per Mcf for the three months ended September 30, 2015 and 2014, respectively, and $2.32 per Mcf and $4.05 per Mcf for the nine months ended September 30, 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 $3.25 per Mcf ($2.23 per Mcf before the effects of financial hedging) and $3.50 per Mcf ($3.43 per Mcf before the effects of financial hedging) for the three months ended September 30, 2015 and 2014, respectively, and $3.35 per Mcf ($2.27 per Mcf before the effects of financial hedging) and $3.69 per Mcf ($3.97 per Mcf before the effects of financial hedging) for the nine months ended September 30, 2015 and 2014, respectively.

(4)   AGP's average sales price for oil before the effects of financial hedging was $44.72 per barrel and $92.96 per barrel for the three months ended September 30, 2015 and 2014, respectively, and $47.09 per barrel and $93.52 per barrel for the nine months ended September 30, 2015 and 2014, respectively. ARP's average sales prices for oil before the effects of financial hedging were $43.25 per barrel and $91.08 per barrel for the three months ended September 30, 2015 and 2014, respectively, and $46.74 per barrel and $93.45 per barrel for the nine months ended September 30, 2015 and 2014, respectively.

(5)   ARP's average sales prices for natural gas liquids before the effects of financial hedging were $11.01 per barrel and $32.18 per barrel for the three months ended September 30, 2015 and 2014, respectively, and $13.00 per barrel and $32.16 per barrel for the nine months ended September 30, 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 $1.28 per Mcfe ($1.71 per Mcfe for total production costs) and $1.35 per Mcfe ($1.88 per Mcfe for total production costs) for the three months ended September 30, 2015 and 2014, respectively, and $1.32 per Mcfe ($1.75 per Mcfe for total production costs) and $1.23 per Mcfe ($1.76 per Mcfe for total production costs) for the nine months ended September 30, 2015 and 2014, respectively. Including the effects of these costs, total lease operating expenses per Mcfe were $1.27 per Mcfe ($1.70 per Mcfe for total production costs) and $1.36 per Mcfe ($1.88 per Mcfe for total production costs) for the three months ended September 30, 2015 and 2014, respectively, and $1.31 per Mcfe ($1.75 per Mcfe for total production costs) and $1.24 per Mcfe ($1.77 per Mcfe for total production costs) for the nine months ended September 30, 2015 and 2014, respectively.

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                

ATLAS ENERGY GROUP, LLC

Financial Information

(unaudited; in thousands except per unit amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30

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

2015

2014

2015

2014

Net loss

$     (582,313)

$       (4,349)

$   (588,377)

$ (46,195)

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

 

 

(15,794)

 

(4,291)

 

(42,915)

Atlas Resource net (income) loss attributable to unitholders

129,501

(4,371)

114,484

(1,326)

Atlas Resource cash distributions earned by ATLS(3)

9,407

18,720

28,114

54,564

Atlas Growth net (income) loss attributable to unitholders

217

147

231

485

Atlas Growth cash distributions earned by ATLS(3)

127

51

287

133

Non-recurring spinoff and acquisition costs

651

17,825

77

Amortization of deferred finance costs and predecessor

    Term Loan interest expense

 

1,308

 

323

 

16,024

 

941

Non-cash stock compensation expense

2,375

3,321

Gain on asset sales and disposal

(3)

Loss on extinguishment of debt

4,726

4,726

Preferred unit distributions

(1,009)

(2,346)

Other non-cash adjustments

1,052

136

1,736

411

Loss attributable to non-controlling interests

439,969

5,137

420,411

33,828

Distributable Cash Flow attributable to unitholders(1)

$          6,011

$            —

$     12,145

$         —

Supplemental Adjusted EBITDA and Distributable Cash Flow Summary:

Atlas Resource Cash Distributions Earned(3):

Limited Partner Units

$          8,723

$        14,580

$        26,172

$   43,325

Series A Preferred Units (2%)

684

1,074

1,942

3,003

Incentive Distribution Rights

3,066

8,236

Total Atlas Resource Cash Distributions Earned(3)

9,407

18,720

28,114

54,564

per limited partner unit

$            0.325

$            0.590

$            0.975

$     1.753

Atlas Growth Cash Distributions Earned(3)

127

51

287

133

Total Cash Distributions Earned

9,534

18,771

28,401

54,697

Cash general and administrative expenses(4)

(2,601)

(1,103)

(7,962)

(5,763)

Other, net

1,863

649

3,428

1,486

Adjusted EBITDA(1)

8,796

18,317

23,867

50,420

Cash interest expense(5)

(1,776)

(2,523)

(5,085)

(7,505)

Preferred unit distributions

(1,009)

(2,346)

Distributable Cash Flow(1)

$          6,011

$        15,794

$        16,436

$   42,915

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

 

 

(15,794)

 

(4,291)

 

(42,915)

Distributable Cash Flow attributable to unitholders(1)

$          6,011

$               —

$        12,145

$          —

(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)

September 30, 2015

Atlas

Atlas

Energy

Resource

Consolidated

Total debt

$        82,700

$  1,505,047

$     1,587,747

Less:  Cash

(52,532)

(2,418)

(54,950)

Total net debt

30,168

1,502,629

1,532,797

Unitholders' equity

164,689

244,877

      345,011(1)

Total capitalization

$        194,857

$1,747,506

$    1,877,808

Ratio of net debt to capitalization

0.15x

(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 September 30, 2015

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$          3,878

$        90,734

$                 −

$        94,612

      Well construction and completion

23,054

23,054

      Gathering and processing

1,685

1,685

      Administration and oversight

5,495

5,495

      Well services

5,842

5,842

      Gain on mark-to-market derivatives

712

131,065

131,777

Other, net

349

20

369

          Total revenues

4,939

257,895

262,834

Costs and expenses:

      Gas and oil production

709

41,591

42,300

      Well construction and completion

20,046

20,046

      Gathering and processing

2,473

2,473

      Well services

2,398

2,398

      General and administrative

7,726

13,978

21,704

      Depreciation, depletion and amortization

2,848

40,463

43,311

7,291

672,246

679,537

          Total costs and expenses

18,574

793,195

811,769

Operating loss

(13,635)

(535,300)

(548,935)

Loss on asset sales and disposal

(362)

(362)

Loss on extinguishment of debt

(4,726)

(4,726)

Interest expense

(3,098)

(25,192)

(28,290)

Net loss

(21,459)

(560,854)

(582,313)

Preferred unitholders' dividends

(1,009)

(1,009)

  Loss attributable to non-controlling interests.

 

 

 

439,969

 

439,969

Net loss attributable to unitholders

$       (22,468)

$     (560,854)

$      439,969

$     (143,353)

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS

 (unaudited; in thousands)

Three Months Ended September 30, 2014

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$          1,538

$      129,399

$                 −

$      130,937

      Well construction and completion

61,204

61,204

      Gathering and processing

3,061

3,061

      Administration and oversight

6,177

6,177

      Well services

6,597

6,597

Other, net

352

261

613

          Total revenues

1,890

206,699

208,589

Costs and expenses:

      Gas and oil production

613

51,391

52,004

      Well construction and completion

53,221

53,221

      Gathering and processing

3,214

3,214

      Well services

2,617

2,617

      General and administrative

4,175

13,124

17,299

Depreciation, depletion and amortization

 

490

 

64,578

 

 

65,068

          Total costs and expenses

5,278

188,145

193,423

Operating income (loss)

(3,388)

18,554

15,166

Loss on asset sales and disposal

(92)

(92)

Interest expense

(2,846)

(16,577)

(19,423)

Net income (loss)

(6,234)

1,885

(4,349)

  Loss attributable to non-controlling interests.

 

 

 

5,137

 

5,137

Net income (loss) attributable to owner

$         (6,234)

$          1,885

$          5,137

$             788

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS

 (unaudited; in thousands)

Nine Months Ended September 30, 2015

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$          8,006

$      292,243

$                 −

$      300,249

      Well construction and completion

63,665

63,665

      Gathering and processing

6,046

6,046

      Administration and oversight

7,301

7,301

      Well services

18,568

18,568

      Gain on mark-to-market derivatives

760

209,706

210,466

Other, net

505

80

585

          Total revenues

9,271

597,609

606,880

Costs and expenses:

      Gas and oil production

1,684

130,224

131,908

      Well construction and completion

55,361

55,361

      Gathering and processing

7,406

7,406

      Well services

6,735

6,735

      General and administrative

37,637

44,400

82,037

      Depreciation, depletion and amortization

5,095

125,948

131,043

      Asset impairment

7,291

672,246

679,537

          Total costs and expenses

51,707

1,042,320

1,094,027

Operating loss

(42,436)

(444,711)

(487,147)

Loss on asset sales and disposal

(276)

(276)

Loss on extinguishment of debt

(4,726)

(4,726)

Interest expense

(21,123)

(75,105)

(96,228)

Net loss

(68,285)

(520,092)

(588,377)

Preferred unitholders' dividends

(2,346)

(2,346)

  Loss attributable to non-controlling interests.

 

 

 

420,411

 

420,411

Net loss attributable to unitholders/owner

 

$       (70,631)

 

$     (520,092)

 

$      420,411

 

$     (170,312)

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS

 (unaudited; in thousands)

Nine Months Ended September 30, 2014

Atlas

Atlas

Energy

Resource

Eliminations

Consolidated

Revenues:

      Gas and oil production

$         4,563

$      337,893

$                 −

$      342,456

      Well construction and completion

126,917

126,917

      Gathering and processing

11,287

11,287

      Administration and oversight

12,072

12,072

      Well services

18,441

18,441

Other, net

824

343

1,167

          Total revenues

5,387

506,953

512,340

Costs and expenses:

      Gas and oil production

1,552

133,038

134,590

      Well construction and completion

110,363

110,363

      Gathering and processing

11,900

11,900

      Well services

7,525

7,525

      General and administrative

12,593

50,894

63,487

Depreciation, depletion and amortization

 

1,436

 

176,077

 

 

177,513

          Total costs and expenses

15,581

489,797

505,378

Operating income (loss)

(10,194)

17,156

6,962

Gain (loss) on asset sales and disposal

3

(1,686)

(1,683)

Interest expense

(8,446)

(43,028)

(51,474)

Net loss

(18,637)

(27,558)

(46,195)

  Loss attributable to non-controlling interests

 

 

 

33,828

 

33,828

Net loss attributable to owner

$       (18,637)

$       (27,558)

$        33,828

$       (12,367)

 

 

ATLAS ENERGY GROUP, LLC

COMBINED CONDENSED CONSOLIDATING BALANCE SHEETS

 (unaudited; in thousands)

September 30, 2015

Atlas

Atlas

ASSETS

Energy

Resource

Eliminations

Consolidated

Current assets:

      Cash and cash equivalents

$        52,532

$         2,418

$                 −

$          54,950

      Accounts receivable

5,448

89,402

(3,144)

91,706

      Receivable from (advances from) affiliates

 

(1,178)

 

1,178

 

 

      Current portion of derivative asset

399

146,622

147,021

      Subscriptions receivable

23,054

23,054

      Prepaid expenses and other

615

25,407

26,022

          Total current assets

57,816

288,081

(3,144)

342,753

Property, plant and equipment, net

124,640

1,534,718

1,659,358

Intangible assets, net

515

515

Goodwill, net

13,639

13,639

Long-term derivative asset

163

205,979

206,142

Investment in subsidiaries

67,699

(67,699)

Other assets, net

26,484

53,826

3,144

83,454

$      276,802

$  2,096,758

$      (67,699)

$   2,305,861

LIABILITIES AND UNITHOLDERS' EQUITY

Current liabilities:

      Accounts payable

3,583

82,209

85,792

      Accrued interest

643

10,785

11,428

      Accrued well drilling and completion costs

 

9,329

 

56,300

 

 

65,629

      Accrued liabilities

9,965

80,451

(3,144)

87,272

          Total current liabilities

23,520

229,745

(3,144)

250,121

Long-term debt, less current portion

82,700

1,505,047

1,587,747

Asset retirement obligations and other

5,893

117,089

122,982

Unitholders' equity:

      Common unitholders' equity

(34,624)

(34,624)

      Series A preferred equity

38,393

38,393

      Partners' capital

198,475

(198,475)

      Accumulated other comprehensive income

 

10,388

 

46,402

 

(46,402)

 

10,388

14,157

244,877

(244,877)

14,157

      Non-controlling interests

150,532

180,322

330,854

          Total unitholders' equity

164,689

244,877

(64,555)

345,011

$      276,802

$  2,096,758

$      (67,699)

$     2,305,861

 

 

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 November 9, 2015:

Amount

Overall

Ownership

Interest

Percentage

ATLAS RESOURCE:

      General partner interest

100%

2.0%

      Common units

20,962,485

19.8%

      Preferred units

3,749,986

3.5%

      Incentive distribution rights

100%

N/A

            Total Atlas Energy ownership interests in Atlas Resource

25.3%

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