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Atlas Energy Resources, LLC Reports Information for the Quarter and Year Ended December 31, 2006

Posted on: Thursday, 1 March 2007, 09:00 CST

Atlas Energy Resources, LLC (NYSE: ATN) ("Atlas Energy") today reported earnings and production results for the quarter and year ended December 31, 2006. Total revenues reached $321.0 million for the year ended December 31, 2006, an approximate 32% increase from the prior year comparable period. For the fourth quarter 2006, revenues were $94.1 million, or approximately 29% higher than the prior year comparable quarter. Average natural gas and oil production volume was 27.0 million cubic feet equivalents ("mmcfe") per day for the year ended December 31, 2006, representing an increase of approximately 14% from the prior year comparable period. For the fourth quarter 2006, production volumes reached 28.3 mmcfe, an increase of approximately 18% from the prior year comparable quarter.

Atlas Energy, a leading sponsor of natural gas drilling investment programs in the Appalachian Basin, issued approximately 7.3 million common units (approximately 20%) in an initial public offering at a price of $21.00 per common unit on December 18, 2006. The financial results presented consist primarily of the results of Atlas Energy's predecessor, Atlas America, Inc. (NASDAQ: ATLS) and also include the results of Atlas Energy for the 14-day period from December 18 to December 31, 2006..

On January 24, 2007, Atlas Energy declared its initial quarterly cash distribution for the fourth quarter 2006 of $0.06 per common unit, which was paid on February 14, 2007 to common unitholders of record as of February 7, 2007. This distribution represents a pro-rated distribution of $0.42 per common unit for the period from December 18, 2006, the date of its initial public offering, through December 31, 2006.

On February 23, 2007, Atlas Energy filed an amendment to its registration statement with the Securities and Exchange Commission for the Public 16 drilling program. Atlas Energy expects to raise approximately $200 million in this program, the initial offering of the year, and expects to recognize drilling and management fees from this program through most of 2007.

"I am very pleased with the excellent year that we've enjoyed," said Edward E. Cohen, Chairman and Chief Executive Officer of Atlas Energy. "Total revenues for the year grew by 32% to a record $321.0 million, reflecting strong growth in both our investment program business and the production of natural gas. During the year, $218.5 was raised million from syndicated drilling programs, a 39% increase over the full year 2005, and production of natural gas and oil increased by 14% over 2005. With over 3,100 identified drilling locations on our existing acreage position, which does not include our emerging play in the Marcellus Shale, we have a growing inventory of locations to support our drilling programs. We continue to see strong demand for our drilling programs and we plan to raise at least $270 million through these programs in 2007."

In January 2007, Atlas Energy entered into additional hedging contracts covering future production through the end of 2011. A summary of Atlas Energy's hedge positions are as follows:

 Fixed Price Swaps -----------------                              Average Production Period         Hedge Price (3)     Percentage Ended December 31,          (per mcf)        Hedged (2)(4) -----------------         -------------      ------------      2007                    $   9.88             77%(5)      2008                    $  10.10             74%(6)      2009                    $   9.72             68%      2010                    $   8.79             28%      2011                    $   8.02             10% (1) In thousand cubic feet ("mcf") (2) Based upon Atlas Energy's estimated net interest of the natural gas      production (3) Includes an estimated positive basis differential and Btu adjustment (4) Based upon projected natural gas production volumes for the     full year 2007 (5) Includes costless collar positions with an average floor of $8.31     per mcf and an average cap of $9.45 per mcf (6) Includes costless collar positions with an average floor of $8.31     per mcf and an average cap of $10.29 per mcf Reserves --  Proved reserves net to Atlas Energy's interest grew to 180.9 billion     cubic feet of natural gas equivalents ("bcfe") at December 31, 2006, up     approximately 5% from 171.5 bcfe at December 31, 2005. --  Atlas Energy managed an additional 229.3 bcfe of reserves for its     drilling programs as of December 31, 2006, a decrease of 1% from 232.0     bcfe of reserves at December 31, 2005. --  The PV-10 value of these reserves was $280.2 million on December 31,     2006, compared with $597.1 million on December 31, 2005. This valuation     is based on using the weighted average price for Atlas Energy's natural     gas at December 31, 2006 of $6.33 per mcf, versus a weighted average     price of $10.84 per mcf for the prior year comparable period. Drilling & Fundraising --  The number of wells drilled, net to both Atlas Energy's interest and     that of its sponsored drilling programs, was 205 for the three months     ended December 31, 2006, an increase of 18 wells or approximately 10%     from the prior year comparable quarter. Overall, 715 wells were drilled     for the full year 2006, an increase of approximately 8% from the prior year     comparable period. --  Fund raising from Atlas Energy's investment drilling partnerships,     which is utilized to finance well drilling, reached $218.5 million in     2006, an increase of approximately 39% from the prior year comparable     period. Atlas Energy expects to raise approximately $270 million from     investment drilling partnerships in calendar year 2007. --  Atlas Energy connected 865 wells in 2006, compared to 451 wells     connected in calendar year 2005. Well Construction and Completion --  Revenues generated by Atlas Energy's well drilling segment increased     by approximately 25% in the current quarter compared to the similar     quarter in the prior year. Acreage --  Atlas Energy had approximately 547,000 net acres at December 31, 2006,     an increase of approximately 17% from the net acreage position at     December 31, 2005 and an approximate 6% increase from September 30,     2006. Additionally, Atlas Energy has a joint venture with Knox     Energy, which provides an opportunity to drill wells on approximately     200,000 acres in the state of Tennessee. In December 2006, the parties     extended the underlying agreement through December 2007 and expanded     the original drilling area to include an additional approximately     3,800 acres that will have a term of five years. --  Undeveloped acreage at December 31, 2006 was approximately 323,000 net     acres, up approximately 25% from the net acreage position at December     31, 2005, exclusive of the joint venture with Knox Energy. --  During the fourth quarter of 2006 and the first quarter of 2007, Atlas     Energy and its investment partnerships drilled three vertical wells to     the Marcellus Shale in Western Pennsylvania. Two of these wells have     been completed and management is pleased with the results. The Marcellus     Shale is a black, organic rich shale formation located at depths     between 7,000 and 8,500 feet and ranges in thickness from 100 to 150           feet on Atlas Energy's acreage. Leases are currently held on 157,500        acres, up from 105,000 acres in December 2006, which management      believes is prospective for the Marcellus Shale. Management expects to      drill several more vertical wells within the Marcellus Shale over the next      two quarters and is planning a full development program beginning in the        fourth quarter of 2007. --  Atlas Energy has currently identified over 3,100 geologically     favorable sites for additional well drilling, not including any     locations within the Marcellus Shale. Wells & Production --  Atlas Energy had interests in over 7,200 gross wells at December 31,     2006, an increase of approximately 11% from December 31, 2005, and     operates approximately 85% of these wells. --  Natural gas and oil production was 28.2 mmcfe per day for the three     months ended December 31, 2006, an increase of 4.2 mmcfe per day, or     approximately 18%, from the prior year comparable period. 

Atlas Energy Resources, LLC is an energy concern focused on the development and production of natural gas and, to a lesser extent, oil principally in the Appalachian Basin. Atlas Energy sponsors and manages tax advantaged investment partnerships, in which it co-invests, to finance the exploration and development of its acreage. For more information, visit Atlas Energy's website at www.atlasenergyresources.com or contact investor relations at bbegley@atlasamerica.com.

Atlas America, Inc. owns an 80% common unit interest and all of the Class A and management incentive interests in Atlas Energy Resources, LLC. For more information, please visit its website at www.atlasamerica.com, or contact Investor Relations at bbegley@atlasamerica.com.

Certain matters discussed within this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Atlas Energy Resources, LLC 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. Factors that could cause actual results to differ materially from expectations include financial performance, regulatory changes, changes in local or national economic conditions and other risks detailed from time to time in Atlas Energy's reports filed with the SEC, including

quarterly reports on Form 10Q, reports on Form 8-K and annual reports on Form 10-K.

                        ATLAS ENERGY RESOURCES, LLC                   CONSOLIDATED STATEMENTS OF OPERATIONS                    (in thousands, except per unit data)                                  Three Months Ended   Twelve Months Ended                                     December 31,          December 31,                                 --------------------- ---------------------                                   2006       2005       2006       2005                                 ---------- ---------- ---------- --------- REVENUES Well construction and  completion                     $   63,238 $   42,145 $  198,567 $ 145,925 Gas and oil production              21,753     24,086     88,449    72,926 Gathering fees(1)                    2,349      1,407      9,251     4,607 Administration and oversight         3,275      2,964     11,762    10,400 Well services                        3,455      2,561     12,953     9,865                                 ---------- ---------- ---------- ---------                                     94,070     73,163    320,982   243,723                                 ---------- ---------- ---------- --------- COSTS AND EXPENSES Well construction and  completion                         54,989     36,648    172,666   126,891 Gas and oil production               3,331      2,440     13,881     8,856 Gathering fees(1)                    6,667      7,968     29,545    24,648 Well services                        1,797      1,487      7,337     5,463 General and administrative           6,024      5,819     23,367    16,822 Net expense reimbursement -  affiliate                             196        163      1,237       552 Depreciation, depletion and  amortization                        6,180      4,916     22,491    15,811                                 ---------- ---------- ---------- ---------                                     79,184     59,441    270,524   199,043                                 ---------- ---------- ---------- --------- OPERATING INCOME                    14,886     13,722     50,458    44,680 OTHER INCOME (EXPENSE) Interest income                        313         32        966       348 Other, net                              94         25        403      (214)                                 ---------- ---------- ---------- ---------                                        407         57      1,369       134                                 ---------- ---------- ---------- --------- Income before cumulative impact  of accounting change               15,293     13,779     51,827    44,814 Cumulative effect of change in  accounting principle                6,355          -      6,355         -                                 ---------- ---------- ---------- --------- Net income                      $   21,648 $   13,779 $   58,182 $  44,814                                 ========== ========== ========== ========= Allocation of net income  attributable to members'  interests/owners:  Portion applicable to owners'   interest (period prior to the   initial public offering on   December 18, 2006)            $   18,841 $   13,779 $   55,375 $  44,814  Portion applicable to members'   interests (period subsequent   to the initial public   offering on December 18,   2006)                              2,807          -      2,807         -                                 ---------- ---------- ---------- ---------           Net income            $   21,648 $   13,779 $   58,182 $  44,814                                 ========== ========== ========== ========= Allocation of net income  attributable to members'  interests:   Common units                  $    2,751            $    2,751   Class A units                         56                    56                                 ----------            ----------     Net income attributable to      members' interests         $    2,807            $    2,807                                 ==========            ========== Net income attributable to  members' interests per common    unit - basic and diluted     $     0.08            $     0.08                                 ==========            ========== Weighted average common units  outstanding:   Basic                             36,627                36,627                                 ==========            ==========   Diluted                           36,638                36,638                                 ==========            ========== (1)  Historically, the gathering fees due to Atlas Pipeline      Partners, L.P. were insufficient to cover the gathering expenses      paid to Atlas Pipeline Partners, L.P. Upon the completion of Atlas      Energy's initial public offering on December 18, 2006, Atlas      America, Inc. agreed to retain the obligation to pay the difference      between gathering fees paid to Atlas Energy by the drilling      partnerships and gathering fees due to Atlas Pipeline Partners, L.P.      under the gas gathering agreement.                       ATLAS ENERGY RESOURCES, LLC                           FINANCIAL INFORMATION                             (in thousands)                                                        December 31,                                                  --------------------------                                                      2006          2005                                                  ------------  ------------ BALANCE SHEET DATA:   Cash and cash equivalents                      $      8,833  $     20,918   Property and equipment, net                         277,814       214,701   Total assets                                        415,463       315,052   Total debt                                               68           156   Total members' interests/owners' equity             212,682       154,519                                               Reconciliation of net             Three Months Ended   Twelve Months Ended  income to non-GAAP                  December 31,          December 31,    measures(1):                      2006      2005      2006       2005                                   --------- ---------  --------- --------- Net income                        $  21,648 $  13,779  $  58,182  $ 44,814   Depreciation, depletion and    amortization                       6,180     4,916     22,491    15,811   Cumulative impact of change    in accounting policy(2)           (6,355)        -    (6,355)         -                                   --------- ---------  --------- --------- EBITDA                               21,473    18,695    74,318     60,625   Non-recurring item -     transportation charges(3)          4,318     6,561    20,294     20,041 Adjusted EBITDA                   $  25,791 $  25,256  $ 94,612  $  80,666                                   ========= ========= ========= ========== (1) EBITDA is a non-GAAP financial measure under the rules of the      Securities and Exchange Commission. Management of Atlas Energy believes     that EBITDA provides additional information with respect to Atlas     Energy's ability to meet its debt service, capital expense and working      capital requirements. EBITDA is a commonly used measure by commercial     banks, investment bankers, rating agencies and investors in evaluating     an entity's performance relative to its peers. It is also a financial     measurement that, with certain negotiated adjustments, is utilized      within Atlas Energy's financial covenants under its credit facility.     EBITDA is not a measure of financial performance under GAAP and,     accordingly, should not be considered as a substitute for net income     or cash flows from operating activities prepared in accordance     with GAAP. (2) The change in accounting principle relates to the adoption by Atlas      Energy of Financial Accounting Standards Board Interpretation No. 47,     "Accounting for Conditional Asset Retirement Obligations" ("FIN 47").     FIN 47 required Atlas Energy to disregard any probability factor that     is applied to either the timing and/or method of settlement of its      asset retirement obligations related to the plugging and abandonment     liabilities of its oil and gas properties. (3) Reflects the reduction to gathering fees resulting from the retention     by Atlas America of the obligation to pay the difference between      gathering fees paid to Atlas Energy by the drilling partnerships and      gathering fees due to Atlas Pipeline Partners, L.P. under the gas     gathering agreement.  Atlas America is obligated for this differential     upon completion of Atlas Energy's initial public offering on      December 18, 2006.                         ATLAS ENERGY RESOURCES, LLC                            OPERATING HIGHLIGHTS                                       Three Months Ended  Twelve Months Ended                                        December 31,        December 31,                                     ------------------- -------------------                                        2006      2005      2006      2005                                     --------- --------- --------- --------- Production revenues (in thousands):    Gas (1)                          $  19,684 $  21,852 $  79,016 $  64,531    Oil                              $   2,060 $   2,227 $   9,384 $   8,324 Production volume per day (3):    Gas (mcf/day) (1) (2)               25,835    21,468    24,511    21,190    Oil (bbls/day)                         405       431       413       429                                     --------- --------- --------- ---------    Total (mcfe/day)                    28,264    24,056    26,989    23,761 Aggregate production volume(3):    Gas (mcf) (1) (2)                2,376,779 1,975,099 8,946,376 7,734,445    Oil (bbls)                          37,253    39,678   150,628   156,415                                     --------- --------- --------- ---------    Total (mcfe)                     2,600,298 2,213,168 9,850,146 8,672,932 Average sales prices (3):    Gas (per mcf) (4)                $    8.28 $   11.06 $    8.83 $    8.34    Oil (per bbl)                    $   55.31 $   56.13 $   62.30 $   53.22 Production costs per mcfe (3)(5)    $    0.79 $    0.78 $    0.86 $    0.76 Depletion per mcfe (3)              $    2.18 $    2.01 $    2.08 $    1.61 (1) Excludes sales to landowners. (2) Production quantities consist of the sum of (i) Atlas Energy's     proportionate share of production from wells in which it had a      direct interest, based on its proportionate net revenue interest in     such wells, and (ii) Atlas Energy's proportionate share of production     from wells owned by the investment partnerships in which it has an      interest, based on Atlas Energy's equity interest in each such      partnership and based on each partnership's proportionate net revenue     interest in these wells. (3) "Mcf" and "mmcf" means thousand cubic feet and million cubic feet,     respectively, "mcfe" and "mmcfe" means thousand cubic feet equivalent     and million cubic feet equivalent, respectively, and "bbls" means     barrels.  Barrels are converted to mcfe using the ratio of six mcfs     to one barrel. (4) Average natural gas sales price before the effects of financial      hedging was $7.35 and $7.90 for the three and twelve months ended     December 31, 2006.  There were no natural gas financial hedges for the     three and twelve months ended December 31, 2005. (5) Production costs include labor to operate the wells and related     equipment, repairs and maintenance, materials and supplies, property     taxes, severance taxes, insurance, production overhead. 

 CONTACT: Brian J. Begley Investor Relations Atlas Energy Resources, LLC 1845 Walnut Street - Suite 1000 Philadelphia, PA 19103 215/546-5005 215/561-5692 (facsimile)  

SOURCE: Atlas Energy Resources, LLC

Source: MARKET WIRE

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