• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Atlas Energy Resources, LLC Reports Record Financial Results for the First Quarter 2007

Posted on: Monday, 30 April 2007, 21:00 CDT

Atlas Energy Resources, LLC (NYSE: ATN) ("Atlas Energy") today reported record earnings before interest, income taxes, depreciation and amortization ("EBITDA"), a non-GAAP measure, of $26.2 million for the first quarter 2007, as compared with $17.1 million in the first quarter 2006, an increase of $9.1 million, or approximately 53%. Net income for the first quarter 2007 was $19.9 million, an increase of approximately 60% over the prior year comparable period. Revenues rose to a record level of $105.2 million, an increase of $23.1 million, or approximately 28%, compared to the prior year comparable period. Average natural gas and oil production volumes were 25.8 million cubic feet equivalent ("mmcfe") per day for the first quarter 2007, representing an increase of approximately 10% from the first quarter 2006. Revenue and earnings growth in the current quarter reflect increased natural gas and oil production compared to the prior year comparable quarter, as well as increased drilling activity.

On April 26, 2007, Atlas Energy declared its first full quarterly cash distribution of $0.43 per common unit for the first quarter 2007, which will be paid on May 15, 2007 to common unitholders of record as of May 8, 2007.

On April 2, 2007, the Company's registration statement with the Securities and Exchange Commission for the Public 16 Drilling Program became effective. Atlas Energy expects to raise approximately $200 million in this program, its initial offering of the year, and expects to recognize well construction and administration fees from this program through most of 2007.

"We are pleased to report solid earnings for Atlas Energy's first full quarter," said Edward E. Cohen, Chairman and Chief Executive Officer of Atlas Energy. "Our revenue and earnings growth in the first quarter show the success of our expanded drilling operations. We are also currently receiving funds for our largest public drilling program and we anticipate meeting our record partnership fundraising goal of $270 million in 2007. Our natural gas and oil production was up 10% from last year's quarter and we expect this to grow as we further develop our acreage position. Finally, we have made progress on exploration of the Marcellus Shale and are working towards the next phase of development in this emerging play. As a result, we have announced our first full quarterly distribution of $0.43 to our common unitholders."

Natural Gas Hedging

Atlas Energy entered into additional hedging contracts in the current period for its natural gas production. A summary of Atlas Energy's hedge positions as of March 31, 2007 are as follows:

 Fixed Price Swaps                        Average                      Hedge Price Production Period      (1) (3)    Percentage Ended December 31,    (per mcf)   Hedged (2)(4) ------------------   ------------ ----------- 2007                 $       9.60          69% 2008                 $       9.63          67% 2009                 $       9.20          65% 2010                 $       8.48          38% 2011                 $       8.23          20% Costless Collars                          Average         Average                      Hedge Floor (1) Hedge Ceiling Production Period          (3)           (1) (3)       Percentage Ended December 31,      (per mcf)       (per mcf)    Hedged (2) (4) -----------------    --------------- --------------- -------------- 2007                 $          8.36 $          9.53              8% 2008                 $          8.36 $         10.37              6% (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 

Well Construction and Completion

 --  The number of gross wells drilled was 303 for the first quarter 2007,     an increase of 97 wells or approximately 47% from the prior year comparable     quarter.  Atlas Energy connected 197 wells in the first quarter 2007.      --  Well drilling segment revenues increased by approximately 42% in the     first quarter 2007 compared to the prior year comparable quarter.      

Acreage

 --  Atlas Energy had approximately 645,000 gross acres, or 590,000 net     acres, at March 31, 2007, an increase of approximately 24% from the net     acreage position at March 31, 2006 and an approximate 8% increase from     December 31, 2006.  Additionally, Atlas Energy has a joint venture with     Knox Energy through December 2007, which provides an opportunity to drill     wells on approximately 200,000 acres in Tennessee.      --  Undeveloped acreage at March 31, 2007 was approximately 362,000 net     acres, up approximately 39% from the net acreage position at March 31,     2006, exclusive of the joint venture with Knox Energy.      --  Beginning in early December 2006, Atlas Energy and its investment     partnerships drilled three vertical wells to the Marcellus Shale in Western     Pennsylvania. All three 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 over 180,000 acres, up from 105,000 acres in December     2006, which management believes is prospective for the Marcellus Shale.     Management plans 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 3,150 geologically     favorable sites for additional well drilling, not including any locations     within the Marcellus Shale.      

Wells & Production

 --  Atlas Energy had interests in over 7,500 gross wells March 31, 2007,     an increase of approximately 11% from March 31, 2006, and operates     approximately 85% of these wells.      --  Natural gas and oil production was 25.8 mmcfe per day for first     quarter 2007, an increase of 2.4 mmcfe per day, or approximately 10%, from     the prior year comparable period.      

Interested parties are invited to access the live webcast of Atlas Energy's first quarter 2007 results on Tuesday morning, May 1, 2007 at 9:00 am EDT by going to the home page of Atlas Energy's website at www.atlasenergyresources.com. An audio replay of the conference call will also be available beginning at 11:00 am EDT on Tuesday, May 1, 2007. To access the replay, dial 1-888-286-8010 and enter conference code 91655019.

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. (NASDAQ: ATLS) owns a 79% 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 10-Q, 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)                                (Unaudited)                                                       Three Months Ended                                                           March 31,                                                     ----------------------                                                        2007        2006                                                     ----------  ----------- REVENUES    Well construction and completion                 $   72,378  $    50,883    Gas and oil production                               21,260       22,866    Administration and oversight                          4,544        3,309    Well services                                         3,721        2,766    Gathering                                             3,288        2,287                                                     ----------  ----------- Total revenues                                         105,191       82,111 COSTS AND EXPENSES    Well construction and completion                     62,932       44,246    Gas and oil production                                3,902        3,397    Well services                                         2,043        1,766    Gathering                                             3,288        7,989    General and administrative                            6,899        7,695    Depreciation, depletion and amortization              5,868        4,663                                                     ----------  ----------- Total costs and expenses                                84,932       69,756                                                     ----------  ----------- Operating income                                        20,259       12,355 Other income (expense)-net                                (318)         114                                                     ----------  ----------- Net income                                          $   19,941  $    12,469                                                     ==========  =========== 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)                                          $       --  $    12,469 Portion applicable to members' interests (period  subsequent to the initial public offering on  December 18, 2006)                                     19,941           --                                                     ----------  ----------- Net income                                          $   19,941  $    12,469                                                     ==========  =========== Allocation of net income attributable to members'  interests:    Common units                                     $   19,542    Class A units                                           399                                                     ---------- Net income attributable to members' interests       $   19,941                                                     ========== Basic and diluted net income per common unit:       $     0.53                                                     ========== Weighted average common units outstanding:    Basic                                                36,627                                                     ==========    Diluted                                              36,967                                                     ==========                          ATLAS ENERGY RESOURCES, LLC                             FINANCIAL INFORMATION                                (in thousands)                                  (Unaudited)                                                    March 31,   December 31,                                                       2007         2006                                                   ------------ ------------ BALANCE SHEET DATA:    Cash and cash equivalents                      $      6,767 $      8,833    Property and equipment, net                         293,574      277,814    Total assets                                        394,651      415,463    Total debt                                           56,553           68    Total capital                                       210,601      212,682                                                      Three Months Ended                                                           March 31,                                                   -------------------------                                                       2007         2006                                                   ------------ ----------- CAPITAL EXPENDITURE DATA:    Maintenance capital expenditures               $      8,750 $    n/a (1)    Growth capital expenditures                          13,327      n/a (1)                                                   ------------ -----------    Total                                          $     22,077 $    15,290                                                   ============ ===========                                                      Three Months Ended                                                          March 31,                                                   ------------------------ Reconciliation of Net Income to EBITDA and  Distributable Cash Flow (2):                         2007         2006                                                   -----------  ------------ Net income                                        $    19,941  $     12,469    Interest expense                                       410             2    Depreciation, depletion and amortization             5,868         4,663                                                   -----------  ------------ EBITDA                                                 26,219  $     17,134                                                                ============ Interest expense                                         (410) Non-cash compensation expense                           1,045 Amortization of deferred financing costs  (included within interest expense)                        13 Maintenance capital expenditures                       (8,750)                                                   ----------- Distributable cash flow                           $    18,117                                                   =========== (1)    Atlas Energy did not characterize capital expenditures as        maintenance or growth and did not plan capital expenditures in a        manner intended to maintain or expand its asset base or production        before its initial public offering. (2)    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 Atlas Energy        believes that EBITDA and distributable cash flow provide additional        information for evaluating the Company's ability to make        distributions to its unitholders, 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. EBITDA is also a        financial measurement that, with certain negotiated adjustments,        is utilized within Atlas Energy financial covenants under its        credit facility. EBITDA and distributable cash flow are not        measures of financial performance under GAAP and, accordingly,        should not be considered as a substitute for net income, operating        income, or cash flows from operating activities in accordance        with GAAP.                          ATLAS ENERGY RESOURCES, LLC                              FINANCIAL INFORMATION                                                       Three Months Ended                                                           March 31,                                                     ----------------------                                                        2007        2006                                                     ----------  ---------- Production revenues (in thousands):     Gas (1)                                         $   19,427  $   20,492     Oil                                             $    1,826  $    2,365 Production volume (3):     Gas (mcf/day) (1) (2)                               23,681      20,866     Oil (bbls/day)                                         359         423                                                     ----------  ----------     Total (mcfe/day)                                    25,835      23,404                                                     ==========  ========== Average sales prices (3):     Gas (per mcf) (4)                               $     9.12  $    10.91     Oil (per bbl)                                   $    56.52  $    62.13 Production costs (5):     As a percent of production revenues                     10%          8%     Per mcfe (3)                                    $     0.87  $     0.90 Depletion per mcfe (3)                              $     2.31  $     1.98 (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 $7.85 and $9.37 for the three months ended March 31,        2007 and 2006, respectively. (5)    Production costs include labor to operate the wells and related        equipment, repairs and maintenance, materials and supplies, property        taxes, severance taxes, insurance, and 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

More News in this Category