Quantcast

Atlas Pipeline Partners, L.P. Reports Second Quarter 2014 Results

August 4, 2014

– Previously announced growth of quarterly distribution to $0.63 per common limited partner unit, at approximately 1.1x coverage

PHILADELPHIA, Aug. 4, 2014 /PRNewswire/ — Atlas Pipeline Partners, L.P. (NYSE: APL) (“APL”, “Atlas Pipeline”, or the “Partnership”) today reported adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”), of $92.9 million for the second quarter of 2014. Processed natural gas volumes averaged 1,503 million cubic feet per day (“MMCFD”), a 20% increase over the second quarter of 2013. Distributable Cash Flow was $62.8 million for the second quarter of 2014, or $0.78 per average common limited partner unit, compared to $58.0 million for the prior year’s second quarter. The Partnership recognized net income of $60.5 million for the second quarter of 2014, compared to net income of $10.1 million for the prior year’s second quarter. Net income was higher for second quarter 2014 compared to the prior year’s second quarter, mainly due to a $48.5 million gain recognized on the sale of the Partnership’s subsidiaries that held a 20% interest in West Texas LPG Pipeline Limited Partnership.

Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures, which are reconciled to their most directly comparable GAAP measures in the tables included at the end of this news release. The Partnership believes these measures provide a more accurate comparison of the operating results for the periods presented.

On July 23, 2014, the Partnership declared a cash distribution for the second quarter of 2014 of $0.63 per common limited partner unit to holders of record on August 7, 2014, which will be paid on August 14, 2014. This distribution represents Distributable Cash Flow coverage per limited partner unit of approximately 1.1x for the second quarter of 2014.

Eugene Dubay, Chief Executive Officer of the Partnership, commented, “The quarter came in as expected and we were pleased to be able to raise the distribution. The Partnership has progressed on executing its plans for bringing online the expansion projects that we have invested in over the past year, adding additional capacity in Southern Oklahoma and South Texas. We expect to complete an additional processing expansion in West Texas this fall and expect to see more organic capital projects and opportunities as we move forward. We look forward to continuing to provide best in class service to our customers and increasing value to all of our stakeholders.”

Capitalization and Liquidity

The Partnership had total liquidity (cash plus available capacity on its revolving credit facility) of $500.9 million as of June 30, 2014. Total debt outstanding was $1,654.3 million at June 30, 2014, compared to $1,706.8 million at December 31, 2013, a decrease of $52.5 million. Based upon total debt outstanding at June 30, 2014, total leverage was approximately 4.7x for purposes of calculations under our revolving credit facility, and debt to total capital was 41%.

Risk Management

The Partnership continues to add further protection to its risk management portfolio for forecasted production in 2014 through 2017. As of August 1, 2014, the Partnership had natural gas, natural gas liquids and condensate protection in place for 2014, 2015 and 2016 for approximately 70%, 50%, and 13%, respectively, of associated margin value (exclusive of ethane). Counterparties to the Partnership’s risk management activities consist of investment grade commercial banks that are lenders under the Partnership’s credit facility, or affiliates of those banks. A table summarizing the Partnership’s risk management portfolio as of August 1, 2014 is included in this release.

Operating Results

Gathered volumes for the three months ended June 30, 2014 were approximately 1.6 BCFD and processed volumes were approximately 1.5 BCFD, an increase of over 12% and 20%, respectively, compared to the Partnership’s second quarter 2013 reported results. Growth capital spending, including contributions to joint ventures, was $146.4 million during the second quarter of 2014, as organic expansion projects continue across all gathering and processing systems, including the processing plant expansions in SouthOK (120 MMCFD Stonewall plant), SouthTX (200 MMCFD Silver Oak II plant), and WestTX (200 MMCFD Edward plant in the southern portion and 200 MMCFD Buffalo plant in the northern portion of the Permian Basin). In addition, construction continues on multiple gathering pipeline projects, including the pipeline connecting the Velma and Arkoma portions of the SouthOK system.

Gross margin from operations was $136.8 million for the second quarter 2014, compared to $108.7 million for the prior year period, a result of increasing producer activity in APL’s areas of operations and the start-up of the Stonewall plant in May 2014. Gross margin, a non-GAAP financial measure, includes natural gas and liquids sales, and transportation, processing and other fees, less purchased product costs and non-cash gains (or losses) included in these items. The higher gross margin for the quarter was primarily due to the increased volumes and expansions that have been completed on the SouthOK, WestOK and WestTX systems. The gross margin for the quarter does not include approximately $6.6 million of realized derivative settlement losses, which are excluded in the calculation of gross margin, compared to $2.8 million realized derivative settlement gains excluded from gross margin in the second quarter of 2013.

WestTX System

The WestTX system’s average natural gas processed volume was 439.4 MMCFD for the second quarter of 2014, compared to 313.5 MMCFD for the second quarter of 2013, an increase of 40% over the past year. Increased processed volumes are primarily due to continued significant drilling activity in the Permian Basin. The completion of the Driver Plant in April 2013 increased processing capacity on the WestTX system to 455 MMCFD, supporting the increased gathered volumes. Average natural gas liquids (NGL) production was 56,165 barrels per day (“BPD”) for the second quarter of 2014, a 41% increase over the second quarter of 2013 with the entire system utilizing 97% of its available processing capacity for the quarter. This system continues to operate in partial ethane rejection due to the value of ethane compared to the value of residue natural gas.

Pioneer Natural Resources, Inc. (“Pioneer”), a 27.2% partner in the WestTX system, continues to be the largest producer on this system and the contract between APL and Pioneer was recently extended 10 additional years through 2032 and includes additional acreage dedicated from Pioneer. The Partnership expects processed volumes on this system to continue to increase through 2014 and beyond as Pioneer, and the Partnership’s many other producer customers, continue to pursue their drilling plans over the coming years in the Permian Basin. The previously announced 200 MMCFD Edward plant is expected to be complete in September of 2014 and the previously announced new Buffalo plant, an incremental 200 MMCFD cryogenic processing plant to be located in the northern part of the system, is expected to be complete in the second half of 2015. These two plants will serve the increasing activity in the Permian Basin and will be fully integrated with APL’s WestTX gathering and processing system, increasing the processing capacity in the Permian Basin to 855 MMCFD in 2015. Management currently expects to install a new 200 MMCFD cryogenic processing facility in each of the next five years, along with all necessary infrastructure, in support of the current production plans of the Partnership’s producer customers in this area.

WestOK System

The WestOK system had average natural gas processed volume of 530.5 MMCFD for the second quarter of 2014, a 10% increase from the second quarter of 2013. Average NGL production was 23,678 BPD for the second quarter of 2014, a 7% increase from the second quarter of 2013, due to the continued increased production on the gathering system.

Activity continues to be strong by APL’s producer customers, with Atlas Pipeline continuing to connect over a well per day in the Mississippi Lime over the past quarter. During the second quarter, a contract change was implemented with APL’s largest customer at WestOK, SandRidge Energy, Inc. (“SandRidge”). The contract transfers all existing volumes that were under SandRidge’s previous Keep-Whole contract to the current Percent-of-Proceeds (“POP”) contract. As a result, APL’s exposure to Keep-Whole contracts has been reduced to an insignificant portion of its overall contract mix. Included in the contract change was an additional acreage dedication, and, today APL has dedication of a significant portion of the 1.9 million acres SandRidge has in the core of the Mississippi Lime under this long-term POP contract. The Partnership continues to add capital projects to this area to accommodate growing development from SandRidge and others, including (i) adding compression, (ii) looping gathering lines, and (iii) adding off-load capabilities to third party processors. The Partnership continues to evaluate the need for further processing capacity in this area.

SouthOK System

The SouthOK system’s average natural gas processed volume was 408.6 MMCFD for the second quarter 2014, a 22% increase from second quarter 2013. The increase in processed volumes is primarily due to the start-up of the previously announced Stonewall plant, which increased processing capacity by 120 MMCFD. Average NGL production was 29,344 BPD for the second quarter 2014, a decrease of approximately 30% compared to the second quarter 2013. The Partnership has made operational improvements in 2014 that have increased the overall margin received per thousand cubic feet (MCF) of rich gas that is gathered and processed on this system. These improvements result in additional ethane rejection, which reduces the amount of barrels of NGLs produced, however enhances profit.

The Stonewall plant, a new cryogenic processing facility, was brought into operation on May 1, 2014 and is now fully operational. This plant was constructed under the Centrahoma joint venture, which is a joint venture with MarkWest Energy Partners of which APL owns 60%. The Partnership plans to accelerate the timeframe of the scheduled 80 MMCFD expansion at this plant, due to the increased activity in Southern Oklahoma, including production from the Woodford Shale, SCOOP, Arkoma and Ardmore Basins. This expansion will allow the facility to operate at its name-plate 200 MMCFD capacity and bring total gross processing capacity on the SouthOK system to 580 MMCFD by the end of 2014. Additionally, construction is continuing on the project to connect the Velma and Arkoma portions of the SouthOK system, which is expected be complete in September 2014.

SouthTX System

The SouthTX system recognized revenues on average natural gas processed volumes of 124.5 MMCFD for the second quarter 2014, including volumes processed under midstream sharing agreements. Under certain existing contractual agreements, APL receives a share of the economic interest from certain volumes currently processed by a third party midstream provider, as well as shares certain economic interests on volumes processed internally with a third party midstream provider. The volumes reported do not include any deficiencies under minimum volume commitments with producers during the period.

APL continues to make commercial progress in the SouthTX area and has connected newly acquired gas from two prominent operators in the Eagle Ford during the second quarter as previously expected. The first connection was in mid-May and the second connection was completed at the end of June. As a result, actual physical volumes processed by APL during the second quarter 2014 increased approximately 22% compared to first quarter 2014, and preliminary estimates for the month of July have indicated actual physical processed volume were approximately 143.5 MMCFD, which is a 25% increase over second quarter average physical processed volume. The new, 200 MMCFD processing facility, Silver Oak II, recently came on-line and is expected to provide incremental processing capacity for the remainder of 2014 and beyond.

Corporate and Other

General and administrative costs, excluding non-cash compensation, for the second quarter of 2014 totaled $12.0 million, compared to $9.1 million in the same period in 2013. The increase in G&A is related to the continued expansion of the business, including in South Texas. Net of deferred financing costs, interest expense was $21.2 million for the second quarter of 2014, as compared to $20.8 million in the second quarter of 2013.

Interested parties are invited to access the live webcast of an investor call with management regarding the Partnership’s second quarter 2014 results on Tuesday, August 5, 2014 at 10:00 am ET by going to the Investor Relations section of the Partnership’s website at www.atlaspipeline.com. An audio replay of the conference call will also be available beginning at 2:00 pm ET on Tuesday, August 5, 2014. To access the replay, dial 1-888-286-8010 and enter conference code 62895511.

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, Texas, and Tennessee, APL owns and operates 16 gas processing plants, 18 gas treating facilities, as well as approximately 11,200 miles of active intrastate gas gathering pipeline. 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 all of the general partner Class A units and incentive distribution rights and an approximate 28% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P. Additionally, Atlas Energy 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 6% limited partner interest. For more information, please visit our 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 prices 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, current reports on Form 8-K and annual reports on Form 10-K.

Contact: Matthew Skelly
VP – Investor Relations
1845 Walnut Street
Philadelphia, PA 19103
(877) 280-2857
(215) 561-5692 (facsimile)


                                                                               ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                                                            Financial Summary(1)
                                                                             (unaudited; in thousands except per unit amounts)

                                                                                                                       Three Months Ended                  Six Months Ended

                                                                                                                            June 30,                           June 30,
                                                                                                                            --------                           --------

                                                                                                                        2014                     2013     2014                   2013
                                                                                                                        ----                     ----     ----                   ----

    Revenue:

    Natural gas and liquids sales                                                                                     $667,549                   $491,230             $1,330,679                   $875,078

    Transportation, processing and other fees(2)                                                                      50,043                     40,306                 93,480                     73,031

    Derivative gain (loss), net                                                                                      (6,367)                    27,107               (15,038)                    15,024

    Other income, net                                                                                                  2,731                      2,296                  4,839                      5,718
                                                                                                                       -----                      -----                  -----                      -----

       Total revenues                                                                                                713,956                    560,939              1,413,960                    968,851
                                                                                                                     -------                    -------              ---------                    -------

    Costs and expenses:

    Natural gas and liquids cost of sales                                                                            580,885                    424,216              1,156,353                    749,756

    Operating expenses                                                                                                26,983                     24,770                 52,111                     46,629

    General and administrative                                                                                        11,973                      9,110                 23,474                     18,524

    General and administrative - non-cash unit-based compensation(3)                                                   6,443                      3,436                 12,882                      7,820

    Other (revenues) costs                                                                                              (20)                    18,370                     17                     18,900

    Depreciation and amortization                                                                                     49,220                     46,383                 98,459                     76,841

    Interest                                                                                                          23,059                     22,581                 46,722                     41,267
                                                                                                                      ------                     ------                 ------                     ------

       Total costs and expenses                                                                                      698,543                    548,866              1,390,018                    959,737
                                                                                                                     -------

    Equity income (loss) in joint ventures                                                                           (3,875)                     (472)               (5,753)                     1,568

    Loss on early extinguishment of debt                                                                         ?                       (19)                   ?                     (26,601)

    Gain (loss) on asset dispositions                                                                                 48,465                    (1,519)                48,465                    (1,519)

    Income (loss) before income taxes                                                                                 60,003                     10,063                 66,654                   (17,438)

    Income tax benefit                                                                                                 (498)                      (28)                 (896)                      (37)

    Net income (loss)                                                                                                 60,501                     10,091                 67,550                   (17,401)

    Income attributable to non-controlling interests                                                                 (3,965)                   (1,810)               (6,427)                   (3,179)

    Preferred unit dividends                                                                               (2,609)                           ?            (3,015)                            ?

    Preferred unit imputed dividend effect                                                                          (11,378)                   (6,729)              (22,756)                   (6,729)

    Preferred unit dividends in kind                                                                                (10,406)                   (5,341)              (20,125)                   (5,341)
                                                                                                                     -------                     ------                -------                     ------

    Net income (loss) attributable to common limited partners and the General Partner                                  $32,143                   $(3,789)               $15,227                  $(32,650)
                                                                                                                       =======                    =======                =======                   ========

    Net income (loss) attributable to common limited partners per unit:

    Basic and diluted                                                                                                    $0.27                    $(0.11)                 $0.04                    $(0.57)

    Weighted average common limited partner units (basic)                                                             80,979                     74,340                 80,788                     69,520

    Weighted average common limited partner units (diluted)                                                           96,890                     74,340                 96,498                     69,520
    (1)     Based on the GAAP statements of operations to be included in Form 10-Q, with
     additional detail of certain items included

    (2)     Includes affiliate revenues related to transportation and processing provided to
     Atlas Resource Partners, L.P

    (3)     Non-cash costs associated with unit-based compensation, which have been reflected
     in the general and administrative costs and expenses, the category associated with the
     direct personnel cash costs in the GAAP statements of operations to be included in Form
     10-Q.  General and administrative also includes any compensation reimbursement to
     affiliates
                                                      ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                               Financial Summary (continued)
                                                    (unaudited; in thousands, except per unit amounts)

                                                                         Three Months Ended                                Six Months Ended

                                                                              June 30,                                         June 30,
                                                                              --------                                         --------

                                                                        2014                   2013                        2014              2013
                                                                        ----                   ----                        ----              ----

    Summary Cash Flow Data:

    Cash provided by operating activities                                        $73,741                               $30,465                       $139,909                    $71,721

    Cash used in investing activities                                         (19,728)                          (1,107,853)                     (150,412)               (1,216,244)

    Cash provided by (used in) financing activities                           (59,695)                            1,090,208                          9,663                  1,162,206

    Capital Expenditure Data:

    Maintenance capital expenditures                                              $5,555                                $3,848                        $10,880                     $7,703

    Expansion capital expenditures                                             146,693                               103,345                        269,699                    208,006

    Acquisitions                                                           ?                          1,000,785                               ?               1,000,785
                                                                         ---                          ---------                             ---               ---------

       Total                                                                    $152,248                            $1,107,978                       $280,579                 $1,216,494
                                                                                ========                            ==========                       ========                 ==========

                                                                      ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                                           Condensed Consolidated Balance Sheet
                                                                                 (unaudited; in thousands)

                                                       ASSETS                                               June 30,             December 31,
                                                                                                                 2014                     2013
                                                                                                                 ----                     ----

    Current assets:

    Cash and cash equivalents                                                                                             $4,074                   $4,914

    Other current assets                                                                                                 281,502                  236,864

       Total current assets                                                                                              285,576                  241,778

    Property, plant and equipment, net                                                                                 2,984,168                2,724,192

    Intangible assets, net                                                                                               999,849                1,064,843

    Equity method investment in joint ventures                                                                           179,054                  248,301

    Other assets, net                                                                                                     44,382                   48,731

                                                                                                                      $4,493,029               $4,327,845
                                                                                                                      ==========               ==========

                                               LIABILITIES AND EQUITY

    Current liabilities                                                                                                 $399,549                 $320,226

    Long-term debt, less current portion                                                                               1,654,319                1,706,786

    Deferred income taxes, net                                                                                            32,394                   33,290

    Other long-term liabilities                                                                                            7,227                    7,638

    Total partners' capital                                                                                            2,327,760                2,200,645

    Non-controlling interest                                                                                              71,780                   59,260
                                                                                                                          ------                   ------

    Total equity                                                                                                       2,399,540                2,259,905

                                                                                                                      $4,493,029               $4,327,845
                                                                                                                      ==========               ==========

                                                               ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                                    Reconciliation of Non-GAAP Measures
                                                                         (unaudited; in thousands)

                                                                         Three Months Ended                                Six Months Ended

                                                                              June 30,                                         June 30,
                                                                              --------                                         --------

                                                                      2014                      2013                     2014                     2013
                                                                      ----                      ----                     ----                     ----

    Gross margin calculations:

    Natural gas and liquids sales                                              $667,549                             $491,230                             $1,330,679             $875,078

    Transportation, processing, and other fees                                 50,043                               40,306                                 93,480               73,031

    Less: non-cash linefill gain (loss)                                          (49)                             (1,339)                                    94              (1,371)

    Less: natural gas and liquids cost of sales                               580,885                              424,216                              1,156,353              749,756
                                                                              -------                              -------                              ---------              -------

    Gross margin                                                               $136,756                             $108,659                               $267,712             $199,724
                                                                               --------                             --------                               --------             --------

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

    Net income (loss)                                                           $60,501                              $10,091                                $67,550            $(17,401)

    Depreciation and amortization                                              49,220                               46,383                                 98,459               76,841

    Income tax benefit                                                          (498)                                (28)                                 (896)                (37)

    Interest expense                                                           23,059                               22,581                                 46,722               41,267
                                                                               ------                               ------                                 ------               ------

    EBITDA                                                                    132,282                               79,027                                211,835              100,670

    Income attributable to non-controlling interests(2)                       (3,965)                             (1,810)                               (6,427)             (3,179)

    Non-controlling interest depreciation, amortization and
     interest(3)                                                                (906)                             (1,121)                               (1,612)             (1,971)

    Adjustment for cash flow from investment in joint ventures                  6,075                                2,272                                  9,953                2,032

    (Gain) loss on asset disposition                                         (48,465)                               1,519                               (48,465)               1,519

    Non-cash gain on derivatives                                                (252)                            (24,263)                               (1,416)            (10,544)

    Other (revenues) costs                                                       (20)                              18,370                                     17               18,900

    Premium expense on derivative instruments                                     892                                3,745                                  3,515                7,020

    Unrecognized economic impact of acquisitions                         ?                                 1,126                                   ?                 1,126

    Loss on early termination of debt                                    ?                                    19                                   ?                26,601

    Other non-cash losses(4)                                                    7,246                                7,428                                 16,291               11,844

    Adjusted EBITDA                                                            92,887                               86,312                                183,691              154,018

    Interest expense                                                         (23,059)                            (22,581)                              (46,722)            (41,267)

    Amortization of deferred finance costs                                      1,874                                1,739                                  3,730                3,283

    Preferred dividend obligation                                  (2,609)                                     ?                            (3,015)                     ?

    Premium expense on derivative instruments                                   (892)                             (3,745)                               (3,515)             (7,020)

    Maintenance capital expenditures(5)                                       (5,405)                             (3,713)                              (10,538)             (7,527)
                                                                               ------                               ------                                -------               ------

    Distributable Cash Flow                                                     $62,796                              $58,012                               $123,631             $101,487
                                                                                =======                              =======                               ========             ========



    (1)  EBITDA, Adjusted EBITDA and
     Distributable Cash Flow are non-
     GAAP (generally accepted
     accounting principles) financial
     measures under the rules of the
     Securities and Exchange
     Commission.  Management of the
     Partnership believes EBITDA,
     Adjusted EBITDA and Distributable
     Cash Flow provide additional
     information for evaluating the
     Partnership's ability to make
     distributions to its common unit
     holders and the general partner,
     among other things.  These
     measures are widely-used by
     commercial banks, investment
     bankers, rating agencies and
     investors in evaluating
     performance relative to peers and
     pre-set performance standards.
     Adjusted EBITDA is also similar to
     the Consolidated EBITDA
     calculation utilized for the
     Partnership's financial covenants
     under its credit facility, with
     the exception that Adjusted EBITDA
     includes some non-cash items
     specifically excluded under the
     credit facility. EBITDA, Adjusted
     EBITDA and Distributable Cash Flow
     are not measures of financial
     performance under GAAP and,
     accordingly, should not be
     considered in isolation or as a
     substitute for net income,
     operating income, or cash flows
     from operating activities in
     accordance with GAAP.

    (2)  Represents Anadarko Petroleum
     Corporation's ("Anadarko" - NYSE:
     APC) non-controlling interest in
     the operating results of Atlas
     Pipeline Mid-Continent WestOk,
     LLC ("WestOK") and Atlas Pipeline
     Mid-Continent WestTex, LLC
     ("WestTX"); and MarkWest's non-
     controlling interest in
     Centrahoma.

    (3)  Represents the depreciation,
     amortization and interest expense
     included in income attributable to
     non-controlling interest for
     MarkWest's interest in Centrahoma.

    (4)  Includes the non-cash impact
     of commodity price movements on
     pipeline linefill inventory, non-
     cash compensation and minimum
     volume adjustments on certain
     producer throughput contracts.

    (5)  Net of non-controlling
     interest maintenance capital of
     $150 thousand and $135 thousand
     for the three months ended June
     30, 2014 and 2013, respectively,
     and $342 thousand and $176
     thousand for the six months ended
     June 30, 2014 and 2013,
     respectively.

                                                          ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                                 Unaudited Operating Highlights(1)

                                                Three Months Ended June 30,                              Six Months Ended June 30,
                                                ---------------------------                              -------------------------

                                            2014                     2013                       Percent Change                     2014           2013        Percent Change
                                            ----                     ----                       --------------                     ----           ----        --------------

    Pricing (unhedged):

    Weighted average market prices:

    NGL price per gallon - Conway hub                $0.87                                   $0.75                      16.0%                  $0.94                    $0.79   19.0%

    NGL price per gallon - Mt. Belvieu hub          0.87                                    0.80                       8.7%                   0.92                     0.83   10.8%

    Natural gas sales ($/MCF):

    SouthOK                                 4.29                     3.88                     10.6%                      4.52            3.53           28.0%

    WestOK                                  4.16                     3.84                      8.3%                      4.44            3.54           25.4%

    WestTX                                  4.23                     3.74                     13.1%                      4.46            3.45           29.3%

    Weighted average                        4.19                     3.82                      9.7%                      4.45            3.59           24.0%

    NGL sales ($/gallon):

    SouthOK                                 1.00                     0.71                     40.8%                      1.03            0.69           49.3%

    SouthTX                                 0.76                     0.75                      1.3%                      0.93            0.75           24.0%

    WestOK                                  1.11                     0.96                     15.6%                      1.15            0.97           18.6%

    WestTX                                  0.93                     0.86                      8.1%                      0.96            0.89            7.9%

    Weighted average                        0.98                     0.84                     16.7%                      1.02            0.84           21.4%

    Condensate sales ($/barrel):

    SouthOK                                96.45                    91.76                      5.1%                     92.96           90.89            2.3%

    SouthTX                                87.14                    92.78                    (6.1)%                     86.57           92.78          (6.7)%

    WestOK                                 96.71                    84.53                     14.4%                     91.36           84.10            8.6%

    WestTX                                 95.02                    93.96                      1.1%                     96.25           91.97            4.7%

    Weighted average                       95.78                    89.15                      7.4%                     92.74           88.09            5.3%

                                                                                           ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                                                                 Unaudited Operating Highlights(1)

                                                                                     Three Months Ended June 30,                               Six Months Ended June 30,
                                                                                     ---------------------------                               -------------------------

                                                                                      2014                          2013                       Percent Change                              2014                          2013                       Percent Change
                                                                                      ----                          ----                       --------------                              ----                          ----                       --------------

    Volumes:

    SouthOK system(2):

    Gathered gas volume (MCFD)                                                     433,294                       422,974                                      2.4%                      416,590                       407,323                                      2.3%

    Processed gas volume(3) (MCFD)                                                 408,615                       334,812                                     22.0%                      390,733                       330,767                                     18.1%

    Residue gas volume (MCFD)                                                      378,325                       319,650                                     18.4%                      356,980                       314,892                                     13.4%

    Processed NGL volume (BPD)                                                      29,344                        41,791                                   (29.8)%                       28,810                        37,841                                   (23.9)%

    Condensate volume (BPD)                                                            585                           536                                      9.1%                          693                           550                                     26.0%

    WestOK system:

    Gathered gas volume (MCFD)                                                     554,233                       506,487                                      9.4%                      543,003                       479,577                                     13.2%

    Processed gas volume(3) (MCFD)                                                 530,455                       483,504                                      9.7%                      520,364                       454,628                                     14.5%

    Residue gas volume (MCFD)                                                      488,224                       444,670                                      9.8%                      477,805                       420,815                                     13.5%

    Processed NGL volume (BPD)                                                      23,678                        22,233                                      6.5%                       23,346                        19,258                                     21.2%

    Condensate volume (BPD)                                                          2,420                         1,949                                     24.2%                        2,292                         1,959                                     17.0%

    SouthTX system(4):

    Gathered gas volume (MCFD)                                                     127,979                       122,245                                      4.7%                      122,925                       122,245                                      0.6%

    Processed gas volume(3) (MCFD)                                                 124,468                       121,338                                      2.6%                      119,880                       121,338                                    (1.2)%

    Residue gas volume (MCFD)                                                       94,537                        96,606                                    (2.1)%                       85,317                        96,606                                   (11.7)%

    Processed NGL volume (BPD)                                                      13,805                        15,041                                    (8.2)%                       12,843                        15,041                                   (14.6)%

    Condensate volume (BPD)                                                            171                            65                                    163.1%                          159                            65                                    144.6%

    WestTX system(2):

    Gathered gas volume (MCFD)                                                     460,410                       352,865                                     30.5%                      434,614                       332,829                                     30.6%

    Processed gas volume(3) (MCFD)                                                 439,447                       313,504                                     40.2%                      414,867                       297,220                                     39.6%

    Residue gas volume (MCFD)                                                      327,994                       229,777                                     42.7%                      307,577                       219,889                                     39.9%

    Processed NGL volume (BPD)                                                      56,165                        39,901                                     40.8%                       53,231                        36,591                                     45.5%

    Condensate volume (BPD)                                                          2,219                         1,993                                     11.3%                        1,708                         1,516                                     12.7%

    Other systems:

    Gathered gas volumes (MCFD)                                                     28,435                        28,247                                      0.7%                       28,637                        29,563                                    (3.1)%

    Consolidated Volumes:

    Gathered gas volume (MCFD)                                                   1,604,351                     1,432,818                                     12.0%                    1,545,769                     1,371,537                                     12.7%

    Processed gas volume (MCFD)                                                  1,502,985                     1,253,158                                     19.9%                    1,445,844                     1,203,953                                     20.1%

    Residue gas volume (MCFD)                                                    1,289,080                     1,090,703                                     18.2%                    1,227,679                     1,052,202                                     16.7%

    Processed NGL volume (BPD)                                                     122,992                       118,966                                      3.4%                      118,230                       108,731                                      8.7%

    Condensate volume (BPD)                                                          5,395                         4,543                                     18.8%                        4,852                         4,090                                     18.6%

    (1)  "MCF" represents thousand cubic feet; "MCFD" represents thousand cubic feet per day; "BPD" represents barrels per day

    (2)  Operating data for the SouthOK and WestTX systems represents 100% of operating activity

    (3)  Processed gas volumes include volumes offloaded and processed by third parties as well as volumes bypassed and delivered as residue gas

    (4)  Gathered and processed gas volumes on the SouthTX system include volumes processed by a third-party in which the Partnership receives the economic interest. Actual physical gathered and processed volumes totaled 118,133 MCFD and 114,623 MCFD, respectively, during the three
     months ended June 30, 2014, and 107,293 MCFD and 104,249 MCFD, respectively, during the six months ended June 30, 2014


                                                                                ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                                                            Unaudited Current Commodity Risk Management Positions
                                                                                            (as of August 1, 2014)

    Note: NGL contracts are traded at Mt. Belvieu unless otherwise disclosed.

    SWAP CONTRACTS

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

    Production Period                            Purchased /Sold                           Commodity                                 Gallons Avg. Fixed Price
    -----------------                            ---------------                           ---------                                 ------- ----------------

    3Q14                                         Sold                                      Propane                                12,474,000             $0.99

    3Q14                                         Sold                                      Iso Butane                              1,260,000              1.26

    3Q14                                         Sold                                      Normal Butane                           1,260,000              1.50

    3Q14                                         Sold                                      Natural Gasoline                        3,780,000              1.97

    4Q14                                         Sold                                      Propane                                12,852,000              1.00

    4Q14                                         Sold                                      Iso Butane                              1,260,000              1.26

    4Q14                                         Sold                                      Normal Butane                           1,260,000              1.53

    4Q14                                         Sold                                      Natural Gasoline                        3,906,000              1.98

    1Q15                                         Sold                                      Propane                                13,734,000              0.99

    1Q15                                         Sold                                      Natural Gasoline                        4,662,000              1.97

    2Q15                                         Sold                                      Propane                                15,624,000              0.99

    2Q15                                         Sold                                      Natural Gasoline                        4,914,000              2.02

    3Q15                                         Sold                                      Propane                                14,238,000              1.05

    3Q15                                         Sold                                      Natural Gasoline                        3,780,000              2.00

    4Q15                                         Sold                                      Propane                                11,088,000              1.02

    4Q15                                         Sold                                      Natural Gasoline                        1,260,000              2.00

    1Q16                                         Sold                                      Propane                                 6,930,000              1.03

    2Q16                                         Sold                                      Propane                                 5,040,000              1.03

    3Q16                                         Sold                                      Propane                                 6,300,000              1.04

    4Q16                                         Sold                                      Propane                                 3,780,000              1.04

    1Q17                                         Sold                                      Propane                                 2,520,000              1.04

    2Q17                                         Sold                                      Propane                                 2,520,000              1.04

    3Q17                                         Sold                                      Propane                                 2,520,000              1.04

    4Q17                                         Sold                                      Propane                                 2,520,000              1.04

                                         ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                      Unaudited Current Commodity Risk Management Positions
                                                     (as of August 1, 2014)

    SWAP CONTRACTS

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

    Production Period Purchased /Sold                          Commodity                    Barrels        Avg. Fixed Price
    ----------------- ---------------                          ---------                    -------        ----------------

    3Q14              Sold                                     Crude Oil                            90,000                  92.39

    4Q14              Sold                                     Crude Oil                            69,000                  91.71

    1Q15              Sold                                     Crude Oil                            75,000                  92.11

    2Q15              Sold                                     Crude Oil                            75,000                  90.45

    3Q15              Sold                                     Crude Oil                            45,000                  88.58

    4Q15              Sold                                     Crude Oil                            15,000                  85.13

    1Q16              Sold                                     Crude Oil                            15,000                  90.00

    2Q16              Sold                                     Crude Oil                            15,000                  90.00


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

    Production Period  Purchased /Sold Commodity   MMBTUs           Avg. Fixed Price
    -----------------  --------------- ---------   ------           ----------------

    3Q14               Sold            Natural Gas        5,050,000                  4.06

    4Q14               Sold            Natural Gas        5,350,000                  4.15

    1Q15               Sold            Natural Gas        5,965,000                  4.41

    2Q15               Sold            Natural Gas        4,615,000                  4.18

    3Q15               Sold            Natural Gas        4,615,000                  4.18

    4Q15               Sold            Natural Gas        4,315,000                  4.26

    1Q16               Sold            Natural Gas        3,150,000                  4.34

    2Q16               Sold            Natural Gas        1,650,000                  4.24

    3Q16               Sold            Natural Gas        1,650,000                  4.24

    4Q16               Sold            Natural Gas        1,650,000                  4.24

    1Q17               Sold            Natural Gas        1,200,000                  4.47

                                         ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
                                     Unaudited Current Commodity Risk Management Positions
                                                     (as of August 1, 2014)

    OPTION CONTRACTS

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

    Production Period Purchased/Sold            Type               Commodity                 Gallons Avg. Strike Price
    ----------------- --------------            ----               ---------                 ------- -----------------

    3Q14              Purchased                 Put                Propane                 2,520,000                   0.95

    3Q14              Sold                      Call               Propane                 1,260,000                   1.31

    4Q14              Purchased                 Put                Propane                 2,520,000                   0.96

    4Q14              Sold                      Call               Propane                 1,260,000                   1.34

    1Q15              Purchased                 Put                Propane                 1,890,000                   0.98

    1Q15              Sold                      Call               Propane                 1,260,000                   1.28

    3Q15              Purchased                 Put                Propane                 1,260,000                   0.88

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

    Production Period Purchased/Sold Type Commodity Barrels Avg. Strike Price
    ----------------- -------------- ---- --------- ------- -----------------

    3Q14              Purchased      Put  Crude Oil  90,000                   89.91

    4Q14              Purchased      Put  Crude Oil 117,000                   91.57

    1Q15              Purchased      Put  Crude Oil  45,000                   91.33

    2Q15              Purchased      Put  Crude Oil  75,000                   89.49

    3Q15              Purchased      Put  Crude Oil  75,000                   88.59

    4Q15              Purchased      Put  Crude Oil  75,000                   88.15

    NATURAL GAS OPTIONS
    -------------------

    Production Period   Purchased/Sold Type Commodity   MMBTUs         Avg. Strike Price
    -----------------   -------------- ---- ---------   ------         -----------------

    3Q 2014             Purchased      Put  Natural Gas        300,000                   4.15

SOURCE Atlas Pipeline Partners, L.P.


Source: PR Newswire



comments powered by Disqus