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Atlas Pipeline Partners, L.P. Accelerates Growth, Adds Margin Protection And Confirms Guidance

January 14, 2013

PHILADELPHIA, Jan. 14, 2013 /PRNewswire/ — Atlas Pipeline Partners, L.P. (NYSE: APL) (“APL”, “Atlas Pipeline”, or the “Partnership”) announced today that the Partnership is updating the timing of its WestTX expansion, the 200 Million cubic feet per day (“mmcfd”) Driver cryogenic processing facility. This facility was originally expected to come online in two phases with phase one online in 1Q’13 and phase two online in 1Q’14, with each phase consisting of 100 mmcfd of processing capacity. The Driver facility is now expected to have the entire 200 mmcfd come online by the end of the first quarter or early second quarter of 2013. Based on the continued volume growth from the Partnership’s producer customers in the Permian Basin, management expects to utilize approximately 60% of the Driver facility’s capacity at start-up and anticipates steady growth in volumes throughout the year.

Management is also pleased to announce that the Partnership has entered into a new contract with SandRidge Energy, Inc. (“SandRidge”) (NYSE: SD). SandRidge is currently the Partnership’s largest producer customer in the Mississippian Lime. The new agreement, a five year contract commencing January 1, 2013, is extendable at the option of SandRidge to a nine year term if a minimum level of throughput volume is met. It is a percent-of-proceeds (POP) contract, complimented by additional fixed-fee gathering cash flow associated with underlying throughput volumes from SandRidge. At the termination of the existing contract, all volumes under that agreement will be transferred to this new agreement, materially reducing the Partnership’s keep-whole exposure. In addition to the extension in tenor from the previous contract, SandRidge has agreed to dedicate three additional areas in Southern Kansas, including Harper, Sumner, and Cowley counties. Including the originally dedicated areas within SandRidge’s Oklahoma Mississippian position, the new agreement now includes the majority of SandRidge’s developed acreage within the burgeoning Mississippi Lime formation.

“We are pleased to be announcing a new long term agreement with a key producer in the Mississippi Lime as well as the acceleration of the start of the full Driver plant in West Texas within the next couple of months. These positive developments will secure future growth through our growing relationships with our producer customers. Accordingly, we have added a significant amount of further protection through our risk management program that will preserve margin over the next several years. We will continue to pursue additional value creation opportunities for the long term for our customers, stakeholders, and employees”, stated Eugene Dubay, Chief Executive Officer of the Partnership.

As a result of this new POP agreement with SandRidge, the Partnership has added significant natural gas protection to its risk management portfolio, as well as continuing to elongate the program and adding further margin protection through hedging activities. Atlas Pipeline now has 76% of expected 2013 margin protected (ex-ethane) and a full table of risk management positions is included at the end of this release.

The Partnership is reaffirming its guidance for 2013 for Adjusted EBITDA of $310 – $360 Million based on current commodity prices and management’s volume expectations. These forecasted amounts are based on various assumptions, including, among others, the Partnership’s expected cost and timing for completion of its announced capital expenditure program, timing of incremental volumes on its gathering and processing systems, known contract structures, scheduled maintenance of facilities including those of third-parties that impact the Partnership’s operations, estimated interest rates, and budgeted operating and general administrative costs. Management does not forecast certain items, including GAAP revenues, depreciation, amortization, and non-cash changes in derivatives, and therefore is unable to provide forecasted Net Income, a comparable GAAP measure, for the periods presented. The reconciling items between these non-GAAP measures and Net Income are expected to be similar to those for the most recently completed quarterly period and are not expected to be significant to the Partnership’s cash flows.

                                                                                         ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                                                     Unaudited Current Commodity Risk Management Positions
                                                                                                    (as of January 9, 2013)

    Note: The natural gas, natural gas liquid and condensate price risk management positions shown below represent the contracts in place through December 31, 2015. NGL contracts are traded at
     Mt. Belvieu unless otherwise disclosed.

    SWAP CONTRACTS

    NATURAL GAS HEDGES
    ------------------

                                 Production Period                          Purchased /Sold                          Commodity                                            MMBTUs                  Avg. Fixed Price
                                 -----------------                          ---------------                          ---------                                            ------                  ----------------
                                 2Q 2013                                    Sold                                     Natural gas                                         600,000                              3.43
                                 3Q 2013                                    Sold                                     Natural gas                                         600,000                              3.52
                                 4Q 2013                                    Sold                                     Natural gas                                       1,000,000                              3.60
                                 1Q 2014                                    Sold                                     Natural gas                                       1,350,000                              3.90
                                 2Q 2014                                    Sold                                     Natural gas                                       2,350,000                              3.86
                                 3Q 2014                                    Sold                                     Natural gas                                       2,350,000                              3.89
                                 4Q 2014                                    Sold                                     Natural gas                                       2,350,000                              3.96
                                 1Q 2015                                    Sold                                     Natural gas                                       1,000,000                              4.24
                                 2Q 2015                                    Sold                                     Natural gas                                       1,000,000                              4.00
                                 3Q 2015                                    Sold                                     Natural gas                                       1,000,000                              4.06
                                 4Q 2015                                    Sold                                     Natural gas                                       1,000,000                              4.23

    NATURAL GAS LIQUIDS HEDGES
    --------------------------

                                 Production Period                          Purchased /Sold                          Commodity                                           Gallons                  Avg. Fixed Price
                                 -----------------                          ---------------                          ---------                                           -------                  ----------------
                                 1Q 2013                                    Sold                                     Propane - Conway                                  3,780,000                              0.94
                                 1Q 2013                                    Sold                                     Propane                                           9,072,000                              1.22
                                 1Q 2013                                    Sold                                     Isobutane                                           504,000                              1.86
                                 1Q 2013                                    Sold                                     Normal butane                                     1,134,000                              1.66
                                 2Q 2013                                    Sold                                     Propane - Conway                                  1,260,000                              1.06
                                 2Q 2013                                    Sold                                     Propane                                          10,836,000                              1.27
                                 2Q 2013                                    Sold                                     Isobutane                                           630,000                              1.77
                                 2Q 2013                                    Sold                                     Normal butane                                     1,260,000                              1.66
                                 3Q 2013                                    Sold                                     Propane - Conway                                  1,260,000                              1.06
                                 3Q 2013                                    Sold                                     Propane                                          11,718,000                              1.28
                                 4Q 2013                                    Sold                                     Propane - Conway                                  1,260,000                              1.06
                                 4Q 2013                                    Sold                                     Propane                                          12,222,000                              1.28
                                 1Q 2014                                    Sold                                     Propane                                           6,930,000                              1.02
                                 1Q 2014                                    Sold                                     Natural gasoline                                  1,260,000                              2.08
                                 2Q 2014                                    Sold                                     Propane                                           3,780,000                              1.00
                                 2Q 2014                                    Sold                                     Normal butane                                     1,260,000                              1.50
                                 2Q 2014                                    Sold                                     Natural gasoline                                  2,520,000                              1.92
                                 3Q 2014                                    Sold                                     Propane                                           3,780,000                              1.00
                                 3Q 2014                                    Sold                                     Normal butane                                     1,260,000                              1.50
                                 3Q 2014                                    Sold                                     Natural gasoline                                  1,890,000                              1.92
                                 4Q 2014                                    Sold                                     Propane                                           3,780,000                              1.00
                                 4Q 2014                                    Sold                                     Normal butane                                     1,260,000                              1.53
                                 4Q 2014                                    Sold                                     Natural gasoline                                  1,890,000                              1.93
                                 1Q 2015                                    Sold                                     Natural gasoline                                    630,000                              1.97
                                 2Q 2015                                    Sold                                     Natural gasoline                                    630,000                              1.97
                                 3Q 2015                                    Sold                                     Natural gasoline                                    630,000                              1.97
                                 4Q 2015                                    Sold                                     Natural gasoline                                    630,000                              1.97

    CONDENSATE HEDGES
    -----------------

                                 Production Period                          Purchased /Sold                          Commodity                                           Barrels                  Avg. Fixed Price
                                 -----------------                          ---------------                          ---------                                           -------                  ----------------
                                 1Q 2013                                    Sold                                     Crude                                                93,000                             97.49
                                 2Q 2013                                    Sold                                     Crude                                                99,000                             97.33
                                 3Q 2013                                    Sold                                     Crude                                                78,000                             97.08
                                 4Q 2013                                    Sold                                     Crude                                                75,000                             96.66
                                 1Q 2014                                    Sold                                     Crude                                                78,000                             95.49
                                 2Q 2014                                    Sold                                     Crude                                                75,000                             93.12
                                 3Q 2014                                    Sold                                     Crude                                                75,000                             89.86
                                 4Q 2014                                    Sold                                     Crude                                                30,000                             88.09

    OPTION CONTRACTS

    NGL OPTIONS
    -----------

    Production
     Period                      Purchased/Sold                             Type                                     Commodity                                           Gallons                 Avg. Strike Price
    ----------                   --------------                             ----                                     ---------                                           -------                 -----------------
    1Q 2013                      Purchased                                  Put                                      Isobutane                                           504,000                              1.79
    1Q 2013                      Purchased                                  Put                                      Normal Butane                                     1,512,000                              1.74
    1Q 2013                      Purchased                                  Put                                      Natural Gasoline                                  5,292,000                              2.15
    2Q 2013                      Purchased                                  Put                                      Isobutane                                           630,000                              1.72
    2Q 2013                      Purchased                                  Put                                      Normal Butane                                     1,638,000                              1.66
    2Q 2013                      Purchased                                  Put                                      Natural Gasoline                                  5,796,000                              2.10
    3Q 2013                      Purchased                                  Put                                      Isobutane                                         1,512,000                              1.66
    3Q 2013                      Purchased                                  Put                                      Normal Butane                                     3,528,000                              1.64
    3Q 2013                      Purchased                                  Put                                      Natural Gasoline                                  6,300,000                              2.09
    4Q 2013                      Purchased                                  Put                                      Isobutane                                         1,512,000                              1.66
    4Q 2013                      Purchased                                  Put                                      Normal Butane                                     3,780,000                              1.66
    4Q 2013                      Purchased                                  Put                                      Natural Gasoline                                  6,552,000                              2.09

    CRUDE OPTIONS
    -------------

    Production
     Period                      Purchased/Sold                             Type                                     Commodity                                           Barrels                 Avg. Strike Price
    ----------                   --------------                             ----                                     ---------                                           -------                 -----------------
    1Q 2013                      Purchased                                  Put                                      Crude Oil                                            66,000                            100.10
    2Q 2013                      Purchased                                  Put                                      Crude Oil                                            69,000                            100.10
    3Q 2013                      Purchased                                  Put                                      Crude Oil                                            72,000                            100.10
    4Q 2013                      Purchased                                  Put                                      Crude Oil                                            75,000                            100.10
    1Q 2014                      Purchased                                  Put                                      Crude Oil                                           166,500                            101.86
    2Q 2014                      Purchased                                  Put                                      Crude Oil                                            45,000                             88.18
    3Q 2014                      Purchased                                  Put                                      Crude Oil                                            60,000                             88.85
    4Q 2014                      Purchased                                  Put                                      Crude Oil                                            90,000                             91.56
    1Q 2015                      Purchased                                  Put                                      Crude Oil                                            15,000                             91.00
    2Q 2015                      Purchased                                  Put                                      Crude Oil                                            15,000                             90.25
    3Q 2015                      Purchased                                  Put                                      Crude Oil                                            15,000                             89.85
    4Q 2015                      Purchased                                  Put                                      Crude Oil                                            15,000                             89.35

Atlas Pipeline Partners, L.P. (NYSE: APL) is active in the gathering and processing segments of the midstream natural gas industry. In Oklahoma, southern Kansas, northern and western Texas, and Tennessee, APL owns and operates 12 active gas processing plants, 18 gas treating facilities as well as approximately 10,100 miles of active intrastate gas gathering pipeline. APL also has a 20% interest in West Texas LPG Pipeline Limited Partnership, which is operated by Chevron Corporation. For more information, visit the Partnership’s website at www.atlaspipeline.com or contact IR@atlaspipeline.com.

Atlas Energy, L.P. (NYSE: ATLS) is a master limited partnership which owns and operates the general partner of its midstream oil & gas subsidiary, Atlas Pipeline Partners, L.P., through all of the general partner interest, all the incentive distribution rights and an approximate 9% limited partner interest. Additionally, Atlas Energy owns all of the general partner Class A units and incentive distribution rights and an approximate 44% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P. For more information, please visit the Partnership’s website at www.atlasenergy.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.

Certain matters discussed within this press release are forward-looking statements. Although Atlas Pipeline Partners, L.P. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Atlas Pipeline does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in commodity process and local or national economic conditions and other risks detailed from time to time in Atlas Pipeline’s reports filed with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.

    Contact:                 Matthew Skelly
                             Vice President
                             Investor Relations
                             1845 Walnut Street
                             Philadelphia, PA 19103
                             (877) 950-7473
                             (215) 561-5692 (facsimile)

SOURCE Atlas Pipeline Partners, L.P.


Source: PR Newswire