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Atlas Energy, L.P. Reports Operating and Financial Results for the Third Quarter 2011
  • Atlas Energy announces the formation of a new E&P master limited partnership, Atlas Resource Partners, L.P., which will allow for growth both through accretive acquisitions and organic expansion
  • Atlas Energy reports $22.8 million in Adjusted EBITDA for the third quarter 2011
  • Distributable cash flow was $20.3 million for the current quarter, or $0.40 per common unit
    • PHILADELPHIA, Nov 07, 2011 (BUSINESS WIRE) -- Atlas Energy, L.P. (NYSE: ATLS) ("Atlas Energy" or "ATLS") today reported operating and financial results for the third quarter 2011.

      Third Quarter 2011 Highlights & Results

      • Adjusted earnings before interest, income taxes, depreciation and amortization ("EBITDA"), a non-GAAP measure, of $22.8 million(1)(2);
      • Distributable cash flow, a non-GAAP measure, of $20.3 million, or $0.40 per common unit(1)(2);
      • ATLS declared a cash distribution of $0.24 per limited partner unit based on the financial results for the third quarter 2011, a $0.02 per unit, or 9%, increase from the preceding quarter;
      • On a GAAP basis, consolidated income from continuing operations of $50.9 million for the third quarter 2011 compared with a loss of $3.2 million for the prior year comparable period; and,
      • Total net production of 34.8 million cubic feet equivalents per day ("mmcfed").
      (1) A reconciliation of GAAP net income to adjusted EBITDA and distributable cash flow is provided in the financial tables of this release.
      (2)

      On February 17, 2011, ATLS acquired certain assets and assumed certain liabilities (the "Transferred Business") from Atlas Energy, Inc., the former owner of ATLS' general partner. ATLS' gross margin, adjusted EBITDA and distributable cash flow include the results of operations of the Transferred Business from the date of acquisition. However, in accordance with prevailing accounting principles, all other ATLS financial information, including revenues and net income, are presented combined with those of the Transferred Business for historical periods prior to the date of acquisition, although ATLS did not own the Transferred Business for these periods.

      Recent Events

      Atlas Energy Announces the Formation of Atlas Resource Partners, L.P.

      In October 2011, ATLS announced that it will create a newly formed E&P master limited partnership named Atlas Resource Partners, L.P. ("Atlas Resource Partners"), which will hold substantially all of ATLS' current natural gas and oil development and production assets and the partnership management business. ATLS intends to take Atlas Resource Partners public by distributing to ATLS unitholders common units representing an approximate 19.6% limited partner interest in Atlas Resource Partners. Atlas Resource Partners intends to apply to list its common units on the New York Stock Exchange.

      ATLS management believes that this transaction will substantially enhance unitholder value by separating the company's current E&P assets and partnership management business from ATLS' general partner interests and incentive distribution rights in Atlas Pipeline Partners, L.P. (NYSE: APL). The distribution of limited partner interests in Atlas Resource Partners will also create a separate currency denominated in units of Atlas Resource Partners, which will enable Atlas Resource Partners to expand cash flows from its natural gas and oil production assets through strategic acquisitions and organic development, without diluting ATLS' ownership in its other assets, including its interest in APL.

      ATLS will distribute common units representing an approximately 19.6% limited partner interest in Atlas Resource Partners to ATLS unitholders as of a record date to be determined. The precise number of common units of Atlas Resource Partners to be distributed will be determined at a later date. ATLS expects the transaction to be completed during the first quarter of 2012.

      Immediately following the transaction, ATLS will hold common units representing an approximate 78.4% limited partner interest in Atlas Resource Partners. ATLS will also own the general partner of Atlas Resource Partners, which will own a 2% general partner interest and all of the incentive distribution rights in Atlas Resource Partners. The incentive distribution rights and general partner interests will provide its holder with an increasing percentage of the distributions of Atlas Resource Partners if target distributions are achieved, up to a 50% share of distributions. ATLS will also continue to own the general partner interest and incentive distribution rights of Atlas Pipeline Partners, ATLS' midstream subsidiary. In addition, ATLS will continue to own an 18% general partner interest in Lightfoot Capital Partners, LP, an entity established to incubate new MLPs and invest in existing MLPs.

      GE Energy Financial Services Invests in Lightfoot Capital; Lightfoot Acquires Interest in LNG Facility

      In October 2011, ATLS announced that GE Energy Financial Services, a unit of GE (NYSE: GE), has joined Lightfoot Capital Partners ("Lightfoot"). GE Energy Financial Services will own a general partner interest and a 58% limited partner interest and will participate in future growth at Lightfoot and the terminals business. Following this investment, ATLS will hold an approximate 16% general partner interest and 12% limited partner interest in Lightfoot. Lightfoot is the general partner and majority owner of Arc Terminals LP, a leading independent operator of petroleum and refined product terminals in eight states. In conjunction with this transaction, Lightfoot will make a direct investment and own a 48% interest in Arc LNG Holdings LLC, which will own a 20% interest in Gulf LNG Energy's terminal in Pascagoula, Mississippi. This newly constructed liquefied natural gas ("LNG") facility will have 1.3 billion cubic feet per day of capacity, which is contracted under 20-year firm service agreements for all of its capacity.

      E&P Operations

      • Average net daily production for the third quarter 2011 for the Appalachia segment was 31.3 mmcfed.
      • ATLS expects to connect 16 Marcellus horizontal wells, drilled through the partnership management business, during the first quarter 2012. Eleven of these wells were drilled in 2011, and five of these Marcellus wells have been previously drilled and completed and are awaiting pipeline connection.
      • Average net daily production for the New Albany/Antrim segment for the third quarter 2011 was 3.1 mmcfed.
      • Average net daily production for the third quarter 2011 for the Niobrara segment was 461 thousand cubic feet equivalents per day ("mcfed").

      Partnership Management Segment

      • Partnership management margin(2) contributed $10.4 million to distributable cash flow for the third quarter 2011 compared with $6.2 million for the second quarter 2011. The increase compared with the sequential quarter was primarily due to the increase in funds raised and capital deployed for the direct investment programs.
      (2) Partnership management margin is comprised of Well Construction and Completion margin, Well Services margin and Administration and Oversight Fee revenues.

      Atlas Pipeline Partners, L.P.

      • On October 26, 2011, APL declared a cash distribution of $0.54 per unit on its outstanding common limited partner units, representing the cash distribution for the quarter ended September 30, 2011, a $0.07 per unit, or 14.9%, increase from the preceding quarter. ATLS will receive $4.9 million of cash distributions from APL on November 14, 2011, the date of payment for the APL third quarter 2011 distribution.
      • During the third quarter 2011, APL operated at or above nameplate capacity on all of its gathering and processing systems in the Mid Continent. APL processed approximately 567 mmcfd of natural gas, a 21% increase over the prior year comparable quarter's volumes, amongst its WestOK, WestTX and Velma systems in the third quarter 2011. Record volumes of approximately 53,000 bbl per day of gross natural gas liquids were generated from APL's three processing systems.
      • At September 30, 2011, ATLS owned a 2.0% general partner interest, all of the incentive distribution rights, and an 10.7% common limited partner interest in APL. ATLS' financial results are presented on a consolidated basis with those of APL. Non-controlling interests in APL are reflected as income (expense) in ATLS' consolidated combined statements of operations and as a component of partners' capital on its consolidated combined balance sheets. A consolidating combined statement of operations and balance sheet have also been provided in the financial tables to this release for the comparable periods presented.

      Please refer to the Atlas Pipeline third quarter 2011 earnings release for additional details on its financial results.

      Corporate and Other

      • Cash general and administrative expense, excluding amounts attributable to APL, was $5.1 million for the third quarter 2011. The current period is presented net of $5.6 million of fees received, net of $0.6 million of associated costs, from ATLS' Transition Service Agreement with Chevron Corp. (NYSE: CVX), through which ATLS provides accounting and other services. ATLS will recognize these fees over the period the services are provided, which generally extends through the fourth quarter of 2011. Please refer to the consolidating combined statements of operations provided in the financial tables of this release.
      • Cash interest expense, excluding amounts attributable to APL, was $0.2 million for the third quarter 2011. As of September 30, 2011, ATLS had no amounts outstanding under its revolving credit facility, which has a current borrowing base of $160 million, and had a cash position of $72.2 million.

      Hedging Summary

      • ATLS entered into derivative contracts during the third quarter 2011 for its natural gas and oil production. ATLS currently has approximately 24.6 billion cubic feet equivalents of its future production hedged through 2015. A summary of the ATLS' current derivative positions as of November 1, 2011 is as follows:

      Natural Gas

      Fixed Price Swaps
      Average
      Production Period Fixed Price Volumes
      Ended December 31, (per mcf)(a)(b) (per mcf)(a) % Hedged(d)

      2011

      (c)

      $ 4.85 1,485,714 53%
      2012 $ 5.40 5,257,143

      47%

      2013 $ 5.70 2,971,429

      27%

      2014 $ 6.02 2,742,857

      25%

      2015 $ 6.30 2,742,857

      25%

      Costless Collars
      Average Average
      Production Period Floor Price Ceiling Price Volumes
      Ended December 31, (per mcf)(a)(b) (per mcf)(a)(b) (per mcf)(a) % Hedged(d)

      2011

      (c)

      $ 4.28

      $ 6.01

      771,429 27%
      2012

      $ 4.61

      $ 6.54

      1,828,571 16%
      2013

      $ 5.13

      $ 6.52

      2,971,429 27%
      2014

      $ 5.08

      $ 6.37

      1,371,429 12%
      2015

      $ 5.29

      $ 6.69

      1,371,429 12%

      Crude Oil

      Costless Collars
      Average Average
      Production Period Floor Price Ceiling Price Volumes
      Ended December 31, (per bbl)(a) (per bbl)(a) (bbls)(a) % Hedged(d)

      2011

      (c)

      $ 90.00

      $ 125.31

      15,000 55%
      2012

      $ 90.00

      $ 117.91

      60,000 56%
      2013

      $ 90.00

      $ 116.40

      60,000 56%
      2014

      $ 80.00

      $ 121.25

      24,000 22%
      2015

      $ 80.00

      $ 120.75

      24,000 22%

      _______________________________________________________________

      (a) "Mcf" represents thousand cubic feet; "bbl" represents barrel.
      (b) Includes an estimated positive basis differential and Btu (British thermal units) adjustment.
      (c) Reflects hedges covering the last three months of 2011.
      (d) Hedge percentages based on Q3 2011 average production rates.

      Interested parties are invited to access the live webcast of an investor call with management regarding Atlas Energy, L.P.'s thirdquarter 2011 results on Tuesday, November 8, 2011 at 9:00 am ET by going to the Investor Relations section of Atlas Energy's website at http://www.atlasenergy.com. For those unavailable to listen to the live broadcast, the replay of the webcast will be available following the live call on the Atlas Energy website and telephonically beginning at 12:00 p.m. ET on November 8, 2011 by dialing 888-286-8010, passcode: 22529130.

      Atlas Energy, L.P. is a master limited partnership which owns an interest in over 8,500 producing natural gas and oil wells, representing approximately 187 Bcfe of net proved reserves. Additionally, Atlas Energy owns and operates the general partner of Atlas Pipeline Partners, L.P. (NYSE: APL), through which it owns a 2% general partner interest, all of the incentive distribution rights and approximately 5.75 million common limited partner units of APL. For more information, please visit our website at , or contact Investor Relations at InvestorRelations@atlasenergy.com.

      Atlas Pipeline Partners, L.P. (NYSE: APL) is active in the gathering and processing segments of the midstream natural gas industry. In the Mid-Continent region of Oklahoma, southern Kansas, and northern and western Texas, APL owns and operates five active gas processing plants as well as approximately 8,600 miles of active intrastate gas gathering pipeline. For more information, visit APL's website at http://www.atlaspipeline.com or contact IR@atlaspipeline.com.

      Cautionary Note Regarding Forward-Looking Statements

      This document contains forward-looking statements that involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements.ATLS cautions readers that any forward-looking information is not a guarantee of future performance.Such forward-looking statements include, but are not limited to, statements about future financial and operating results, resource potential, ATLS' plans, objectives, expectations and intentions and other statements that are not historical facts. Risks, assumptions and uncertainties that could cause actual results to materially differ from the forward-looking statements include, but are not limited to, those associated with general economic and business conditions; changes in commodity prices; changes in the costs and results of drilling operations; uncertainties about estimates of reserves and resource potential; inability to obtain capital needed for operations; ATLS' level of indebtedness; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax consequences of business transactions; and other risks, assumptions and uncertainties detailed from time to time in ATLS' reports filed with the U.S. Securities and Exchange Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Forward-looking statements speak only as of the date hereof, and ATLS assumes no obligation to update such statements, except as may be required by applicable law.

      ATLAS ENERGY, L.P.
      CONSOLIDATED COMBINED STATEMENTS OF OPERATIONS

      (unaudited; in thousands, except per share data)

      Three Months Ended Nine Months Ended
      September 30, September 30,
      Revenues: 2011

      2010(1)

      2011(1)

      2010(1)

      Gas and oil production $ 16,305 $ 20,106 $ 51,654 $ 70,816
      Well construction and completion 35,657 60,748 64,336 176,685
      Gathering and processing 357,620 232,774 983,572 683,336
      Administration and oversight 2,337 3,561 5,073 7,473
      Well services 4,910 5,497 15,051 15,589
      Gain (loss) on mark-to-market derivatives(2) 23,760 (6,801 ) 8,952 3,738
      Other, net 890 4,130 26,657 10,631
      Total revenues 441,479 320,015 1,155,295 968,268
      Costs and expenses:
      Gas and oil production 3,990 6,257 11,953 16,863
      Well construction and completion 30,449 51,481 54,754 149,724
      Gathering and processing 301,625 196,218 832,080 575,207
      Well services 2,043 2,416 6,077 7,691
      General and administrative(1) 18,617 8,037 57,046 25,350
      Depreciation, depletion and amortization 27,541 30,364 81,518 87,576
      Total costs and expenses 384,265 294,773 1,043,428 862,411
      Operating income 57,214 25,242 111,867 105,857
      Gain (loss) on asset sales 8 -- 255,722 (2,947 )
      Interest expense(1) (6,315 ) (24,089 ) (30,960 ) (76,229 )
      Loss on early extinguishment of debt -- (4,359 ) (19,574 ) (4,359 )
      Income (loss) from continuing operations 50,907 (3,206 ) 317,055 22,322
      Income (loss) from discontinued operations -- 305,927 (81 ) 320,684
      Net income 50,907 302,721 316,974 343,006
      Income attributable to non-controlling interests (43,794 ) (252,564 ) (263,097 ) (255,059 )
      Net income after non-controlling interests 7,113 50,157 53,877 87,947

      Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition)(1)

      --

      (15,711

      )

      (4,711

      )

      (56,005

      )

      Net income attributable to common limited partners $ 7,113 $ 34,446 $ 49,166 $ 31,942
      Net income attributable to common limited partners per unit - basic:
      Income (loss) from continuing operations attributable to common limited partners $ 0.13 $ (0.13 ) $ 1.02 $ (0.29 )
      Income from discontinued operations attributable to common limited partners -- 1.37 -- 1.44
      Net income attributable to common limited partners $ 0.13 $ 1.24 $ 1.02 $ 1.15
      Net income attributable to common limited partners per unit - diluted:
      Income (loss) from continuing operations attributable to common limited partners $ 0.13 $ (0.13 ) $ 0.99 $ (0.29 )
      Income from discontinued operations attributable to common limited partners -- 1.37 -- 1.44
      Net income attributable to common limited partners $ 0.13 $ 1.24 $ 0.99 $ 1.15
      Weighted average common limited partner units outstanding:
      Basic 51,257 27,704 47,212 27,704
      Diluted 53,100 27,704 48,507 27,704
      Net income attributable to common limited partners:
      Income (loss) from continuing operations $ 7,113 $ (3,552 ) $ 49,176 $ (7,918 )
      Income (loss) from discontinued operations -- 37,998 (10 ) 39,860
      Net income attributable to common limited partners $ 7,113 $ 34,446 $ 49,166 $ 31,942

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of the Partnership, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as the Partnership was unable to identify and allocate such amounts to the Transferred Business for the respective periods.

      (2)

      Consists principally of hydrocarbon derivative gains / (losses) that relate to the operating activities of the Partnership's consolidated subsidiary, APL. The underlying hydrocarbon derivatives do not represent present or potential future obligations of the Partnership.

      ATLAS ENERGY, L.P.

      CONDENSED CONSOLIDATED BALANCE SHEETS

      (unaudited; in thousands)

      September 30,

      December 31,

      ASSETS

      2011

      2010(1)

      Current assets:

      Cash and cash equivalents $ 72,384 $ 247
      Accounts receivable 143,836 120,697
      Current portion of derivative asset 17,998 36,621
      Prepaid expenses and other 31,755 23,652
      Total current assets 265,973 181,217

      Property, plant and equipment, net

      2,008,075 1,849,486

      Intangible assets, net

      110,704 128,543

      Investment in joint venture

      86,688 153,358

      Goodwill, net

      31,784 31,784

      Long-term derivative asset

      34,299 36,125

      Other assets, net

      44,679 54,749
      $ 2,582,202 $ 2,435,262

      LIABILITIES AND PARTNERS' CAPITAL

      Current liabilities:

      Current portion of long-term debt $ 2,054 $ 35,625
      Accounts payable 85,684 75,339
      Liabilities associated with drilling contracts 33,194 65,072
      Accrued producer liabilities 89,658 72,996
      Current portion of derivative liability -- 4,917
      Current portion of derivative payable to Drilling Partnerships 23,664 30,797
      Accrued interest 5,896 1,921
      Accrued well drilling and completion costs 17,433 30,126
      Advances from affiliates -- 14,335
      Accrued liabilities 60,954 42,654
      Total current liabilities 318,537 373,782

      Long-term debt, less current portion

      423,927 565,764

      Long-term derivative liability

      -- 11,901

      Long-term derivative payable to Drilling Partnerships

      19,808 34,796

      Other long-term liabilities

      44,070 42,896

      Commitments and contingencies

      Partners' Capital:

      Common limited partners' interests 573,839 413,054
      Accumulated other comprehensive income 12,693 3,882
      586,532 416,936
      Non-controlling interests 1,189,328 989,187
      Total partners' capital 1,775,860 1,406,123
      $ 2,582,202 $ 2,435,262

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011.
      ATLAS ENERGY, L.P.
      Financial and Operating Highlights

      Three Months Ended Nine Months Ended
      September 30, September 30,
      2011

      2010(1)

      2011(1)

      2010(1)

      Net income attributable to common limited partners per

      unit - basic

      $ 0.13 $ 1.24 $ 1.02 $ 1.15
      Distributable cash flow per unit(2)(3) $ 0.40 $ -- $ 1.00 $ --
      Cash distributions paid per unit(2)(4) $ 0.24 $ -- $ 0.57 $ --
      Production revenues (in thousands):
      Natural gas $ 12,189 $ 15,864 $ 38,383 $ 57,801
      Oil(5) 4,116 4,242 13,271 13,015
      Total production revenues(5) $ 16,305 $ 20,106 $ 51,654 $ 70,816
      Production volume:(6)(7)

      Appalachia(8):

      Natural gas (Mcfd) 27,088 33,119 28,166 34,995
      Oil (Bpd)(9) 703 948 745 884

      Total (Mcfed)

      31,304 38,809 32,637 40,299

      New Albany/Antrim:

      Natural gas (Mcfd) 3,081 2,193 3,172 1,614
      Oil (Bpd) -- -- -- --
      Total (Mcfed) 3,081 2,193 3,172 1,614

      Niobrara:

      Natural gas (Mcfd) 461 -- 349 --
      Oil (Bpd) -- -- -- --
      Total (Mcfed) 461 -- 349 --

      Total:

      Natural gas (Mcfd) 30,629 35,312 31,687 36,610
      Oil (Bpd)(9) 703 948 745 884
      Total (Mcfed) 34,845 41,002 36,158 41,914
      Average sales prices:(7)
      Natural gas (per Mcf) (10) $ 5.10 $ 6.59 $ 5.24 $ 7.15
      Oil (per Bbl)(11) $ 83.34 $ 74.71 $ 90.65 $ 75.66
      Production costs:(7)(12)
      Lease operating expenses per Mcfe $ 1.12 $ 1.55 $ 1.01 $ 1.27
      Production taxes per Mcfe 0.06 0.03 0.05 0.03
      Total production costs per Mcfe $ 1.18 $ 1.58 $ 1.06 $ 1.30
      Depletion per Mcfe(7) $ 2.15 $ 2.97 $ 2.09 $ 2.45

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011.

      (2)

      A reconciliation from net income to distributable cash flow is provided in the financial tables of this release.

      (3)

      Calculation consists of distributable cash flow divided by 51,257,000 weighted average common limited partner units outstanding for the 3rd quarter 2011 and 51,242,000, which is the weighted average common limited partner units outstanding for the period subsequent to February 17, 2011, the date of acquisition for the Transferred Business, which includes the 23.4 million common limited partner units issued as partial consideration for the acquisition.

      (4) Represents the cash distributions paid per limited partner unit by the Partnership within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter.
      (5) Includes NGL production revenue.
      (6)

      Production quantities consist of the sum of (i) the Partnership's proportionate share of production from wells in which it has a direct interest, based on the Partnership's proportionate net revenue interest in such wells, and (ii) the Partnership's proportionate share of production from wells owned by the investment partnerships in which the Partnership has an interest, based on its equity interest in each such partnership and based on each partnership's proportionate net revenue interest in these wells.

      (7) "Mcf" and "Mcfd" represent thousand cubic feet and thousand cubic feet per day; "Mcfe" and "Mcfed" represent thousand cubic feet equivalents and thousand cubic feet equivalents per day, and "Bbl" and "Bpd" represent barrels and barrels per day. Barrels are converted to Mcfe using the ratio of six Mcf's to one barrel.
      (8) Appalachia consists of the Partnership's production located in Pennsylvania, Ohio, New York, West Virginia and Tennessee.
      (9) Includes NGL production volume.
      (10)

      The Partnership's average sales price for natural gas before the effects of financial hedging was $4.90 per Mcf and $4.12 per Mcf for the three months ended September 30, 2011 and 2010, respectively, and $4.69 per Mcf and $4.74 per Mcf for the nine months ended September 30, 2011 and 2010, respectively. These amounts exclude the impact of certain allocations of production revenues to investor partners within the investor partnerships. Including the effects of these allocations, average natural gas sales prices were $4.33 per Mcf ($4.13 per Mcf before the effects of financial hedging) and $4.88 per Mcf ($2.41 per Mcf before the effects of financial hedging) for the three months ended September 30, 2011 and 2010, respectively, and $4.44 per Mcf ($3.89 per Mcf before the effects of financial hedging) and $5.78 per Mcf ($3.47 per Mcf before the effects of financial hedging) for the nine months ended September 30, 2011 and 2010, respectively.

      (11) The Partnership's average sales price for oil before the effects of financial hedging was $81.85 per barrel and $66.36 per barrel for the three months ended September 30, 2011 and 2010, respectively, and $89.79 per barrel and $69.07 per barrel for the nine months ended September 30, 2011 and 2010, respectively.

      (12)

      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. These amounts exclude the effects of the Partnership's proportionate share of lease operating expenses associated with certain allocations of production revenue to investor partners within the Partnership's investor partnerships. Including the effects of these costs, lease operating expenses per Mcfe were $0.73 per Mcfe ($0.79 per Mcfe for total production costs) and $1.05 per Mcfe ($1.08 per Mcfe for total production costs) for the three months ended September 30, 2011 and 2010, respectively, and $0.67 per Mcfe ($0.72 per Mcfe for total production costs) and $0.86 per Mcfe ($0.89 per Mcfe for total production costs) for the nine months ended September 30, 2011 and 2010, respectively.

      ATLAS ENERGY, L.P.
      CAPITALIZATION INFORMATION

      (unaudited; in thousands)

      September 30, 2011 December 31, 2010(1)
      Atlas Atlas Atlas Atlas Consolidated
      Energy Pipeline Consolidated Energy Pipeline Combined
      Total debt $ -- $ 425,981 $ 425,981 $ 35,415 $ 565,974 $ 601,389
      Less: Cash (72,217 ) (167 ) (72,384 ) (83 ) (164 ) (247 )
      Total net debt/(cash) (72,217 ) 425,814 353,597 35,332 565,810 601,142
      Partners' capital 587,299 1,270,318

      1,775,860(2)

      418,369 1,041,647

      1,406,123(2)

      Total capitalization $ 515,082 $ 1,696,132 $ 2,129,457 $ 453,701 $ 1,607,457 $ 2,007,265
      Ratio of net debt to

      capitalization

      0.00x

      0.08x

      ______________________________

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011.

      (2)

      Net of eliminated amounts.
      ATLAS ENERGY, L.P.
      CAPITAL EXPENDITURE DATA

      (unaudited; in thousands)

      Three Months Ended Nine Months Ended
      September 30, September 30,
      2011

      2010(1)

      2011

      2010(1)

      Atlas Energy

      Maintenance capital expenditures(2) $ 2,300 $ -- $ 7,533 $ --
      Expansion capital expenditures 19,588 28,460 28,737 70,716
      Total $ 21,888 $ 28,460 $ 36,270 $ 70,716

      Atlas Pipeline

      Maintenance capital expenditures $ 4,980 $ 2,595 $ 13,451 $ 6,478
      Expansion capital expenditures 51,195 8,764 134,693 24,716
      Total $ 56,175 $ 11,359 $ 148,144 $ 31,194

      Consolidated Combined

      Maintenance capital expenditures $ 7,280 $ 2,595 $ 20,984 $ 6,478
      Expansion capital expenditures 70,783 37,224 163,430 95,432
      Total $ 78,063 $ 39,819 $ 184,414 $ 101,910

      ______________________________

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011.

      (2)

      Prior to the Partnership's acquisition of the Transferred Business on February 17, 2011, the Partnership had no maintenance capital requirements with regard to its oil and gas properties.
      ATLAS ENERGY, L.P.
      Financial Information

      (unaudited; in thousands)

      Three Months Ended Nine Months Ended
      September 30, September 30,
      Atlas Energy Stand-Alone Adjusted EBITDA and 2011 2010 2011 2010
      Distributable Cash Flow Summary:
      Gas and oil production margin $ 12,315 $ -- $ 31,128 $ --
      Well construction and completion margin 5,208 -- 7,074 --
      Administration and oversight margin 2,337 -- 4,061 --
      Well services margin 2,867 -- 7,437 --
      Gathering (449 ) -- (1,670 ) --
      Gross Margin 22,278 -- 48,030 --
      Cash general and administrative expenses(1) (5,068 ) (86 ) (15,153 ) (747 )
      Atlas Pipeline cash distributions(2) 4,946 -- 11,363 --
      Other, net 627 -- 14,985 --
      Adjusted EBITDA(3) 22,783 (86 ) 59,225 (747 )
      Cash interest expense(4) (208 ) (1,002 ) (524 ) (2,144 )
      Maintenance capital expenditures(5) (2,300 ) -- (7,533 ) --
      Distributable Cash Flow(3) $ 20,275 $ (1,088 ) $ 51,168 $ (2,891 )
      Distributions Paid(6) $ 12,303 $ -- $ 29,214 $ --
      per limited partner unit $ 0.24 $ -- $ 0.57 $ --
      Reconciliation of non-GAAP measures to net income (loss) attributable to common limited partners(3):
      Atlas Energy stand-alone distributable cash flow $ 20,275 $ (1,088 ) $ 51,168 $ (2,891 )
      Distributable cash flow of Transferred Business as of and prior to February 17, 2011 (the date of acquisition)(7)

      --

      27,875

      8,261

      91,661

      Atlas Pipeline net income attributable to common limited partners

      6,465

      35,906

      37,555

      35,940

      Atlas Pipeline cash distributions(2) (4,946 ) -- (11,363 ) --
      Non-recurring acquisition costs -- -- (2,087 ) --
      Depreciation, depletion and amortization (8,071 ) (11,798 ) (24,019 ) (31,929 )
      Amortization of deferred finance costs (171 ) -- (5,356 ) --
      Non-cash stock compensation expense (4,319 ) (373 ) (8,931 ) (1,082 )
      Maintenance capital expenditures(5) 2,300 -- 7,533 --
      Non-cash net gain (loss) on asset sales -- -- 48 (2,947 )
      Other non-cash adjustments (4,420 ) (365 ) 1,068 (805 )

      Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition)(7)

      --

      (15,711

      )

      (4,711

      )

      (56,005

      )

      Net income attributable to common limited partners

      $

      7,113

      $

      34,446

      $

      49,166

      $

      31,942

      ______________________________

      (1) Excludes non-cash stock-compensation expense and non-recurring costs incurred in connection with the acquisition of the Transferred Business.
      (2) Represents the cash distribution earned from Atlas Pipeline during the respective quarterly period (and paid from to the Partnership within 45 days after the completion of the respective quarterly period).
      (3) 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 that adjusted EBITDA and distributable cash flow provide additional information for evaluating the Partnership's performance, 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 a financial measurement that, with certain negotiated adjustments, is utilized within the Partnership's financial covenants under its credit facility. Adjusted 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.
      (4) Excludes non-cash amortization of deferred financing costs.
      (5) Prior to the Partnership's acquisition of the Transferred Business on February 17, 2011, the Partnership had no maintenance capital requirements with regard to its oil and gas properties.
      (6) Represents the cash distributions paid by the Partnership within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter.
      (7) In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011.
      ATLAS ENERGY, L.P.
      CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS

      (unaudited; in thousands)

      Three Months Ended September 30, 2011

      Atlas Atlas Consolidated
      Energy Pipeline Eliminations Combined
      Revenues:
      Gas and oil production $ 16,305 $ -- $ -- $ 16,305
      Well construction and completion 35,657 -- -- 35,657
      Gathering and processing 4,431 353,189 -- 357,620
      Administration and oversight 2,337 -- -- 2,337
      Well services 4,910 -- -- 4,910
      Gain on mark-to-market derivatives -- 23,760 -- 23,760
      Other, net (3,793 ) 4,683 -- 890
      Total revenues 59,847 381,632 -- 441,479
      Costs and expenses:
      Gas and oil production 3,990 -- -- 3,990
      Well construction and completion 30,449 -- -- 30,449
      Gathering and processing 4,880 296,745 -- 301,625
      Well services 2,043 -- -- 2,043
      General and administrative 9,387 9,230 -- 18,617
      Depreciation, depletion and amortization 8,071 19,470 -- 27,541
      Total costs and expenses 58,820 325,445 -- 384,265
      Operating income 1,027 56,187 -- 57,214
      Gain on asset sales -- 8 -- 8
      Interest expense (379 ) (5,936 ) -- (6,315 )
      Loss on early extinguishment of debt -- -- -- --
      Income from continuing operations 648 50,259 -- 50,907
      Discontinued operations -- -- -- --
      Net income 648 50,259 -- 50,907
      Income attributable to non-controlling interests -- (1,760 ) (42,034 ) (43,794 )
      Net income attributable to common limited partners $ 648 $ 48,499 $ (42,034 ) $ 7,113
      ATLAS ENERGY, L.P.
      CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS

      (unaudited; in thousands)

      Three Months Ended September 30, 2010

      Atlas Atlas Consolidated
      Energy(1) Pipeline Eliminations Combined(1)
      Revenues:
      Gas and oil production $ 20,106 $ -- $ -- $ 20,106
      Well construction and completion 60,748 -- -- 60,748
      Gathering and processing 2,345 230,429 -- 232,774
      Administration and oversight 3,561 -- -- 3,561
      Well services 5,497 -- -- 5,497
      Loss on mark-to-market derivatives -- (6,801 ) -- (6,801 )
      Other, net (147 ) 4,277 -- 4,130
      Total revenues 92,110 227,905 -- 320,015
      Costs and expenses:
      Gas and oil production 6,257 -- -- 6,257
      Well construction and completion 51,481 -- -- 51,481
      Gathering and processing 4,446 191,772 -- 196,218
      Well services 2,416 -- -- 2,416
      General and administrative 459

      (1)

      7,578 -- 8,037
      Depreciation, depletion and amortization 11,798 18,566 -- 30,364
      Total costs and expenses 76,857 217,916 -- 294,773
      Operating income 15,253 9,989 -- 25,242
      Gain (loss) on asset sales -- -- -- --
      Interest expense (1,002 )

      (1)

      (23,087 ) -- (24,089 )
      Loss on early extinguishment of debt -- (4,359 ) -- (4,359 )
      Income (loss) from continuing operations 14,251 (17,457 ) -- (3,206 )
      Discontinued operations -- 305,927 -- 305,927
      Net income 14,251 288,470 -- 302,721
      Income attributable to non-controlling interests -- (1,316 ) (251,248 ) (252,564 )
      Net income after non-controlling interests 14,251 287,154 (251,248 ) 50,157

      Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition(1))

      (15,711

      )

      --

      --

      (15,711

      )

      Net income (loss) attributable to common limited partners

      $

      (1,460

      )

      $

      287,154

      $

      (251,248

      )

      $

      34,446

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of the Partnership, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as the Partnership was unable to identify and allocate such amounts to the Transferred Business for the respective periods.
      ATLAS ENERGY, L.P.
      CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS

      (unaudited; in thousands)

      Nine Months Ended September 30, 2011

      Atlas Atlas Consolidated
      Energy(1) Pipeline Eliminations Combined(1)
      Revenues:
      Gas and oil production $ 51,654 $ -- $ -- $ 51,654
      Well construction and completion 64,336 -- -- 64,336
      Gathering and processing 14,048 969,524 -- 983,572
      Administration and oversight 5,073 -- -- 5,073
      Well services 15,051 -- -- 15,051
      Gain on mark-to-market derivatives -- 8,952 -- 8,952
      Other, net 15,956 10,701 -- 26,657
      Total revenues 166,118 989,177 -- 1,155,295
      Costs and expenses:
      Gas and oil production 11,953 -- -- 11,953
      Well construction and completion 54,754 -- -- 54,754
      Gathering and processing 16,377 815,703 -- 832,080
      Well services 6,077 -- -- 6,077
      General and administrative 30,229

      (1)

      26,817 -- 57,046
      Depreciation, depletion and amortization 24,019 57,499 -- 81,518
      Total costs and expenses 143,409 900,019 -- 1,043,428
      Operating income 22,709 89,158 -- 111,867
      Gain on asset sales 48 255,674 -- 255,722
      Interest expense (6,435 )

      (1)

      (24,525 ) -- (30,960 )
      Loss on early extinguishment of debt -- (19,574 ) -- (19,574 )
      Income from continuing operations 16,322 300,733 -- 317,055
      Discontinued operations -- (81 ) -- (81 )
      Net income 16,322 300,652 -- 316,974
      Income attributable to non-controlling interests -- (4,492 ) (258,605 ) (263,097 )
      Net income after non-controlling interests 16,322 296,160 (258,605 ) 53,877

      Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition(1))

      (4,711

      )

      --

      --

      (4,711

      )

      Net income attributable to common limited partners $ 11,611 $ 296,160 $ (258,605 ) $ 49,166

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of the Partnership, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as the Partnership was unable to identify and allocate such amounts to the Transferred Business for the respective periods.
      ATLAS ENERGY, L.P.
      CONSOLIDATING COMBINED STATEMENTS OF OPERATIONS

      (unaudited; in thousands)

      Nine Months Ended September 30, 2010

      Atlas Atlas Consolidated
      Energy(1) Pipeline Eliminations Combined(1)
      Revenues:
      Gas and oil production $ 70,816 $ -- $ -- $ 70,816
      Well construction and completion 176,685 -- -- 176,685
      Gathering and processing 11,414 671,922 -- 683,336
      Administration and oversight 7,473 -- -- 7,473
      Well services 15,589 -- -- 15,589
      Gain on mark-to-market derivatives -- 3,738 -- 3,738
      Other, net (344 ) 10,975 -- 10,631
      Total revenues 281,633 686,635 -- 968,268
      Costs and expenses:
      Gas and oil production 16,863 -- -- 16,863
      Well construction and completion 149,724 -- -- 149,724
      Gathering and processing 16,499 558,708 -- 575,207
      Well services 7,691 -- -- 7,691
      General and administrative 1,829

      (1)

      23,521 -- 25,350
      Depreciation, depletion and amortization 31,929 55,647 -- 87,576
      Total costs and expenses 224,535 637,876 -- 862,411
      Operating income 57,098 48,759 -- 105,857
      Loss on asset sales (2,947 ) -- -- (2,947 )
      Interest expense (2,144 )

      (1)

      (74,085 ) -- (76,229 )
      Loss on early extinguishment of debt -- (4,359 ) -- (4,359 )
      Income (loss) from continuing operations 52,007 (29,685 ) -- 22,322
      Discontinued operations -- 320,684 -- 320,684
      Net income 52,007 290,999 -- 343,006
      Income attributable to non-controlling interests -- (3,578 ) (251,481 ) (255,059 )
      Net income after non-controlling interests 52,007 287,421 (251,481 ) 87,947

      Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition(1))

      (56,005

      )

      --

      --

      (56,005

      )

      Net income (loss) attributable to common limited partners

      $

      (3,998

      )

      $

      287,421

      $

      (251,481

      )

      $

      31,942

      (1)

      In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of the Partnership, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as the Partnership was unable to identify and allocate such amounts to the Transferred Business for the respective periods.
      ATLAS ENERGY, L.P.
      CONDENSED CONSOLIDATING BALANCE SHEETS

      (unaudited; in thousands)

      September 30, 2011

      Atlas Atlas
      ASSETS Energy Pipeline Eliminations Consolidated
      Current assets:
      Cash and cash equivalents $ 72,217 $ 167 $ -- $ 72,384
      Accounts receivable 28,534 115,302 -- 143,836
      Current portion of derivative asset 6,111 11,887 -- 17,998
      Prepaid expenses and other 7,446 24,309 -- 31,755
      Total current assets 114,308 151,665 -- 265,973
      Property, plant and equipment, net 526,634 1,481,441 -- 2,008,075
      Goodwill and intangible assets, net 33,436 109,052 -- 142,488
      Long-term derivative asset 7,349 26,950 -- 34,299
      Investment in joint venture -- 86,688 -- 86,688
      Investment in subsidiaries 81,757 -- (81,757 ) --
      Other assets, net 22,838 21,841 -- 44,679
      $ 786,322 $ 1,877,637 $ (81,757 ) $ 2,582,202
      LIABILITIES AND PARTNERS' CAPITAL
      Current liabilities:
      Current portion of long-term debt $ -- $ 2,054 $ -- $ 2,054
      Accounts payable 40,405 45,279 -- 85,684
      Liabilities associated with drilling contracts 33,194 -- -- 33,194
      Accrued producer liabilities -- 89,658 -- 89,658
      Current portion of derivative liability -- -- -- --
      Current portion of derivative payable to

      Partnerships

      23,664

      --

      --

      23,664

      Accrued interest -- 5,896 -- 5,896
      Accrued well drilling and completion costs 17,433 -- -- 17,433
      Advances from affiliates -- -- -- --
      Accrued liabilities 20,576 40,378 -- 60,954
      Total current liabilities 135,272 183,265 -- 318,537
      Long-term debt, less current portion -- 423,927 -- 423,927
      Long-term derivative liability -- -- -- --
      Long-term derivative payable to Partnerships 19,808 -- -- 19,808
      Other long-term liabilities 43,943 127 -- 44,070
      Partners' Capital:
      Common limited partners' interests 573,839 1,306,289 (1,306,289 ) 573,839
      Accumulated other comprehensive income (loss) 13,460 (6,106 ) 5,339 12,693
      587,299 1,300,183 (1,300,950 ) 586,532
      Non-controlling interests -- (29,865 ) 1,219,193 1,189,328
      Total partners' capital 587,299 1,270,318 (81,757 ) 1,775,860
      $ 786,322 $ 1,877,637 $ (81,757 ) $ 2,582,202
      ATLAS ENERGY, L.P.
      CONDENSED CONSOLIDATING COMBINED BALANCE SHEETS

      (unaudited; in thousands)

      December 31, 2010

      Atlas Atlas Consolidated
      ASSETS Energy(1) Pipeline Eliminations Combined(1)
      Current assets:
      Cash and cash equivalents $ 83 $ 164 $ -- $ 247
      Accounts receivable 20,938 99,759 -- 120,697
      Current portion of derivative asset 36,621 -- -- 36,621
      Prepaid expenses and other 8,534 15,118 -- 23,652
      Total current assets 66,176 115,041 -- 181,217
      Property, plant and equipment, net 508,484 1,341,002 -- 1,849,486
      Goodwill and intangible assets, net 33,948 126,379 -- 160,327
      Long-term derivative asset 36,125 -- -- 36,125
      Investment in joint venture -- 153,358 -- 153,358
      Investment in subsidiaries 53,893 -- (53,893 ) --
      Other assets, net 25,681 29,068 -- 54,749
      $ 724,307 $ 1,764,848 $ (53,893 ) $ 2,435,262
      LIABILITIES AND PARTNERS' CAPITAL
      Current liabilities:
      Current portion of long-term debt $ 35,415 $ 210 $ -- $ 35,625
      Accounts payable 45,957 29,382 -- 75,339
      Liabilities associated with drilling contracts 65,072 -- -- 65,072
      Accrued producer liabilities -- 72,996 -- 72,996
      Current portion of derivative liability 353 4,564 -- 4,917
      Current portion of derivative payable to

      Partnerships

      30,797

      --

      --

      30,797

      Accrued interest -- 1,921 -- 1,921
      Accrued well drilling and completion costs 30,126 -- -- 30,126
      Advances from affiliates 2,055 12,280 -- 14,335
      Accrued liabilities 12,401 30,253 -- 42,654
      Total current liabilities 222,176 151,606 -- 373,782
      Long-term debt, less current portion -- 565,764 -- 565,764
      Long-term derivative liability 6,293 5,608 -- 11,901
      Long-term derivative payable to Partnerships 34,796 -- -- 34,796
      Other long-term liabilities 42,673 223 -- 42,896
      Partners' Capital:
      Common limited partners' interests 413,054 1,085,408 (1,085,408 ) 413,054
      Accumulated other comprehensive income (loss) 5,315 (11,224 ) 9,791 3,882
      418,369 1,074,184 (1,075,617 ) 416,936
      Non-controlling interests -- (32,537 ) 1,021,724 989,187
      Total partners' capital 418,369 1,041,647 (53,893 ) 1,406,123
      $ 724,307 $ 1,764,848 $ (53,893 ) $ 2,435,262
      (1) In accordance with prevailing accounting literature, the Partnership has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011.
      ATLAS ENERGY, L.P.
      Ownership Interests Summary
      Overall
      Ownership
      Interest

      Atlas Energy Ownership Interests as of September 30, 2011:

      Amount Percentage
      ATLAS PIPELINE:
      General partner interest 100% 2.0 %
      Common units 5,754,253 10.7 %
      Incentive distribution rights 100% N/A
      Total Atlas Energy ownership interests in Atlas Pipeline 12.7 %
      LIGHTFOOT CAPITAL PARTNERS, GP LLC:
      Approximate general partner ownership interest 16.0 %
      Approximate limited partner ownership interest 12.0 %

      SOURCE: Atlas Energy, L.P.

      Atlas Energy, L.P.
      Brian J. Begley
      Investor Relations
      877-280-2857
      215-405-2718 (fax)