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Atlas Energy Group, LLC Reports Operating and Financial Results for the First Quarter 2016

PHILADELPHIA, May 16, 2016 (GLOBE NEWSWIRE) -- Atlas Energy Group, LLC (OTCQX:ATLS) (“Atlas Energy”, the “Company” or “ATLS”) today reported operating and financial results for the first quarter 2016.

  • ATLS received approximately $0.6 million in management fees and cash distributions during the first quarter 2016 from its E&P development subsidiary, Atlas Growth Partners, L.P. (“AGP”). AGP recently had its Form S-1 for its continuous $1 billion public offering declared effective by the Securities and Exchange Commission on April 5, 2016.

  • ATLS received $0.5 million in cash distributions in the first quarter 2016 from Arc Logistics Partners, LP (NYSE:ARCX), a master limited partnership of which approximately 16% of its general partner interest and approximately 12% of its limited partner interest is owned by ATLS through the Company’s interest in Lightfoot Capital Partners. In April 2016, ARCX announced a quarterly cash distribution of $0.44 per common unit for the first quarter 2016, unchanged from the fourth quarter 2015.

  • Atlas Resource Partners, L.P. (NYSE:ARP), Atlas Energy’s E&P subsidiary, paid common unit cash distributions totaling approximately $0.025 per limited partner unit for the first quarter 2016. On May 5, 2016, ARP announced that the Board of Directors elected to suspend monthly common unit distributions, beginning with the month of March 2016, as well as Preferred Class C distributions, due to the continued lower commodity price environment.

  • Atlas Energy’s Distributable Cash Flow, a non-GAAP measure, was approximately $0.5 million(1), or $0.02 per common unit, in the first quarter 2016, compared to $(0.1) million, or $(0.00) per common unit, in the fourth quarter 2015.

  • On a GAAP basis, net loss was approximately $1.3 million for the first quarter 2016, compared with a loss of $297.4 million for the fourth quarter 2015 and net income of $53.5 million in the prior year comparable quarter.  The year over year decline in net income was due primarily to lower mark-to-market derivative gains recognized from ARP’s financial hedge positions.
 
ATLS owns 100% of ARP’s general partner Class A units and incentive distribution rights, and an approximate 23% limited partner interest in ARP. ATLS’ financial results are presented on a consolidated basis with those of ARP. Non-controlling interests in ARP are reflected as an adjustment to net income in ATLS’ consolidated statements of operations and as a component of unitholders’ equity on its consolidated balance sheets. A consolidating 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 ARP first quarter 2016 earnings release for additional details on its financial results.
 
(1) A reconciliation of GAAP net income (loss) to Distributable Cash Flow is provided in the financial tables of this release. Please see footnote 1 to the Financial Information table of this release.

ARP’s First Quarter 2016 Highlights

  • Average net daily production for the first quarter 2016 was 237.0 million cubic feet equivalents per day (“Mmcfed") compared to 270.8 Mmcfed in the first quarter 2015. The decrease in net production from the prior year quarter was due primarily to temporarily shutting in older, mature production across ARP’s footprint, in response to the continued weaker commodity price environment.
     
  • ARP's net realized price for natural gas including the effect of hedge positions was $3.41 per thousand cubic feet (“mcf") for the first quarter 2016, compared to $3.42 per mcf for the fourth quarter 2015. Net realized oil prices including the effect of hedge positions averaged $77.16 per barrel for the first quarter 2016, compared to $85.26 for the fourth quarter 2015.
     
  • Investment partnership margin contributed $3.0 million to Adjusted EBITDA for the first quarter 2016 compared with $5.0 million for the previous quarter. The $2.0 million decrease in investment partnership margin was due to lower amounts of capital deployed during the first quarter 2016 due to scheduled changes in well drilling activity.
     
  • During the first quarter 2016, ARP was approximately 76% hedged on its net natural gas production and approximately 99% hedged on its net oil production. During the quarter ended March 31, 2016, ARP received approximately $48.7 million of cash from realized natural gas and oil hedge positions.

AGP’s First Quarter 2016 Highlights

AGP had net daily production of over 7,800 thousand cubic feet equivalent per day (“Mcfed”) in the first quarter 2016, compared to average daily net production of approximately 6,600 Mcfed in the fourth quarter 2015. AGP connected two additional wells in the Eagle Ford shale during the first quarter 2016. AGP recently had its Form S-1 for its continuous $1 billion public offering declared effective by the Securities and Exchange Commission on April 5, 2016.   

Corporate Expenses

  • Cash general and administrative expense, excluding amounts attributable to AGP and ARP, was $0.6 million for the first quarter 2016, compared to $1.4 million for the fourth quarter 2015. The decrease in expense from the prior quarter was due primarily to the timing of certain seasonal costs.
  • Cash interest expense was $1.5 million for the first quarter 2016, compared to $1.7 million for the fourth quarter 2015. ATLS had approximately $70.6 million of debt on its balance sheet at March 31, 2016, and a cash position of approximately $4.4 million.

ATLS will be discussing its first quarter 2016 results on an investor call with management on Tuesday, May 17, 2016 at 9:00 am Eastern Time. Interested parties are invited to access the live webcast of the investor call by going to the Investor Relations section of Atlas Energy's website at 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 approximately 12:30 p.m. ET on May 17, 2016 by dialing 855-859-2056, passcode: 10307133.

Atlas Energy Group, LLC (OTCQX:ATLS) is a limited liability company which owns the following interests: all of the general partner interest, incentive distribution rights and an approximate 23% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P.; a general partner interest, incentive distribution rights and limited partner interests in Atlas Growth Partners, L.P.; and a general partner interest in Lightfoot Capital Partners, an entity that invests directly in energy-related businesses and assets. For more information, please visit its website at www.atlasenergy.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.

Atlas Resource Partners, L.P. (NYSE:ARP) is an exploration & production master limited partnership which owns an interest in over 14,500 natural gas and oil wells, located primarily in Appalachia, the Eagle Ford Shale (TX), the Barnett Shale (TX), the Mississippi Lime (OK), the Raton Basin (NM), the Black Warrior Basin (AL), the Arkoma Basin (OK) and the Rangely Field in Colorado.  ARP is also the largest sponsor of natural gas and oil investment partnerships in the U.S. For more information, please visit its website at www.atlasresourcepartners.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.

Cautionary Note Regarding Forward-Looking Statements

This press release 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 and production potential, planned expansions of capacity and other capital expenditures, distribution amounts, ATLS’ and its subsidiaries’ 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; ability to realize the benefits of its acquisitions; changes in commodity prices and hedge positions; 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’ and its subsidiaries’ level of indebtedness, potential changes to ATLS or its subsidiaries capital structure, including refinancing, restructuring, or reorganizing its indebtedness; leverage and liquidity, including reductions in its borrowing base that may require repayment, and covenant compliance; 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’, ARP's, and AGP’s reports filed with the U.S. Securities and Exchange Commission, including quarterly reports on Form 10-Q, current 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 GROUP, LLC
COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited; in thousands, except per unit data)
 
  Three Months Ended
  March 31,
Revenues:   2016       2015  
Gas and oil production $ 51,593     $ 106,560  
Well construction and completion   2,100       23,655  
Gathering and processing   1,495       2,184  
Administration and oversight   455       1,259  
Well services   4,432       6,624  
Gain on mark-to-market derivatives   46,453       105,585  
Other, net   325       (68 )
Total revenues   106,853       245,799  
       
Costs and expenses:      
Gas and oil production   36,656       45,989  
Well construction and completion   1,826       20,570  
Gathering and processing   2,279       2,417  
Well services   2,178       2,198  
General and administrative   21,920       41,928  
Depreciation, depletion and amortization   34,272       44,456  
Total costs and expenses   99,131       157,558  
       
Operating income   7,722       88,241  
       
Gain (loss) on asset sales and disposal   9       (11 )
Gain on early extinguishment of debt, net   20,445        
Interest expense   (29,448 )     (34,751 )
       
Net income (loss)   (1,272 )     53,479  
Preferred unitholders’ dividends   (339 )     (333 )
Income attributable to non-controlling interests   (5,340 )     (58,298 )
Net loss attributable to unitholders’/owner’s interests $ (6,951 )   $ (5,152 )
       
Allocation of net loss attributable to unitholders/owner’s interests:
Portion applicable to owner’s interest (period prior to the transfer of assets on February 27, 2015) $     $ (10,475 )
Portion applicable to unitholders’ interest (period subsequent to the transfer of assets on February 27, 2015)   (6,951 )     5,323  
Net loss attributable to unitholders’/owner’s interests $ (6,951 )   $ (5,152 )
       
Net income (loss) attributable to unitholders per common unit:
Basic $ (0.27 )   $ 0.20  
Diluted $ (0.27 )   $ 0.18  
       
Weighted average common units outstanding:
Basic   26,028       26,011  
Diluted   26,028       30,976  


ATLAS ENERGY GROUP, LLC
COMBINED CONSOLIDATED BALANCE SHEETS
 (unaudited; in thousands)
 
    March 31,   December 31,
ASSETS     2016       2015  
Current assets:        
Cash and cash equivalents   $ 47,994     $ 31,214  
Accounts receivable     59,381       65,920  
Current portion of derivative asset     160,059       159,763  
Subscriptions receivable           19,877  
Prepaid expenses and other     16,666       22,997  
Total current assets     284,100       299,771  
         
Property, plant and equipment, net     1,295,637       1,316,897  
Intangible assets, net     423       456  
Goodwill, net     13,639       13,639  
Long-term derivative asset     195,267       198,371  
Other assets, net     54,713       54,112  
Total assets   $ 1,843,779     $ 1,883,246  
         
LIABILITIES AND UNITHOLDERS’ EQUITY (DEFICIT)        
         
Current liabilities:        
Accounts payable   $ 48,985     $ 52,550  
Liabilities associated with drilling contracts           21,483  
Accrued interest     10,177       25,452  
Accrued well drilling and completion costs     4,731       33,555  
Accrued liabilities     34,138       45,014  
Current portion of long-term debt     976,795       4,250  
Total current liabilities     1,074,826       182,304  
         
Long-term debt, less current portion, net     647,604       1,568,064  
Asset retirement obligations and other     127,708       124,919  
         
Unitholders’ equity (deficit):        
Common unitholders’ deficit     (108,159 )     (103,148 )
Series A preferred equity     40,740       40,875  
Accumulated other comprehensive income     3,498       4,284  
      (63,921 )     (57,989 )
Non-controlling interests     57,562       65,948  
Total unitholders’ equity (deficit)     (6,359 )     7,959  
Total liabilities and unitholders’ equity (deficit)   $ 1,843,779     $ 1,883,246  


ATLAS ENERGY GROUP, LLC
Financial and Operating Highlights
(unaudited)
 
  Three Months Ended
  March 31,
    2016       2015  
       
Net income (loss) attributable to unitholders per common unit - basic  $   (0.27 )   $   0.20  
       
Production volume: (1)(2)      
ATLAS GROWTH:      
Natural gas (Mcfd)      500         728  
Oil (Bpd)      1,138         490  
Natural gas liquids (Bpd)      85         100  
Total (Mcfed)      7,839         4,268  
ATLAS RESOURCE:      
Natural gas (Mcfd)      194,550         227,340  
Oil (Bpd)      4,563         5,533  
Natural gas liquids (Bpd)      2,509         3,488  
Total (Mcfed)      236,983         281,463  
TOTAL:      
Natural gas (Mcfd)      195,051         228,068  
Oil (Bpd)      5,701         6,023  
Natural gas liquids (Bpd)      2,594         3,588  
Total (Mcfed)      244,821         285,731  
       
Average realized sales prices:(2)      
ATLAS GROWTH:      
Natural gas (per Mcf)   $   1.91     $   2.70  
Oil (per Bbl) (4)  $   30.62     $   45.68  
Natural gas liquids (per Bbl)  $   10.34     $   13.25  
ATLAS RESOURCE:      
Natural gas (per Mcf) (3)  $   3.41     $   3.58  
Oil (per Bbl)(4)  $   77.16     $   80.81  
Natural gas liquids (per Bbl) (5)  $    8.31     $   22.49  
       
Production costs per Mcfe:(2)(6)      
ATLAS GROWTH:      
Lease operating expenses per Mcfe  $   0.85     $   0.94  
Production taxes per Mcfe    0.21       0.31  
Transportation and compression expenses per Mcfe    0.08       0.03  
Total production costs per Mcfe  $   1.14     $   1.28  
ATLAS RESOURCE:      
Lease operating expenses per Mcfe  $   1.25     $   1.35  
Production taxes per Mcfe    0.18       0.24  
Transportation and compression expenses per Mcfe    0.26       0.23  
Total production costs per Mcfe  $   1.69     $   1.82  
TOTAL:      
Lease operating expenses per Mcfe  $   1.24     $   1.35  
Production taxes per Mcfe    0.18       0.24  
Transportation and compression expenses per Mcfe    0.25       0.22  
Total production costs per Mcfe  $   1.67     $   1.81  


(1) Production quantities consist of the sum of (i) the proportionate share of production from wells in which AGP and ARP have a direct interest, based on the proportionate net revenue interest in such wells, and (ii) ARP’s proportionate share of production from wells owned by the investment partnerships in which ARP 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.
 
(2) “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.
 
(3) ARP’s average sales prices for natural gas before the effects of financial hedging were $1.78 per Mcf and $2.54 per Mcf for the three months ended March 31, 2016 and 2015, respectively. ARP’s amounts exclude the impact of subordination of ARP’s production revenues to investor partners within its investor partnerships.  Including the effects of this subordination, ARP’s average natural gas sales prices were $3.37 per Mcf ($1.74 per Mcf before the effects of financial hedging) and $3.53 per Mcf ($2.48 per Mcf before the effects of financial hedging) for the three months ended March 31, 2016 and 2015, respectively. 
 
(4) AGP’s average sales price for oil before the effects of financial hedging was $28.33 per barrel for the three months ended March 31, 2016. There was no hedging activity during the three months ended March 31, 2015. ARP’s average sales prices for oil before the effects of financial hedging were $29.51 per barrel and $43.46 per barrel for the three months ended March 31, 2016 and 2015, respectively.
 
(5) There was no effect of financial hedging on ARP’s average sales price for natural gas liquids for the three months ended March 31, 2016. ARP’s average sales price for natural gas liquids before the effects of financial hedging was $14.10 per barrel for the three months ended March 31, 2015.
 
(6) Production costs include labor to operate the wells and related equipment, repairs and maintenance, materials and supplies, property taxes, severance taxes, insurance, production overhead and transportation and compression expenses.  These amounts exclude the effects of ARP’s proportionate share of lease operating expenses associated with subordination of production revenue to investor partners within ARP’s investor partnerships.  Including the effects of these costs, ARP’s lease operating expenses per Mcfe were $1.23 per Mcfe ($1.66 per Mcfe for total production costs) and $1.33 per Mcfe ($1.80 per Mcfe for total production costs) for the three months ended March 31, 2016 and 2015, respectively. Including the effects of these costs, total lease operating expenses per Mcfe were $1.21 per Mcfe ($1.65 per Mcfe for total production costs) and $1.32 per Mcfe ($1.79 per Mcfe for total production costs) for the three months ended March 31, 2016 and 2015, respectively.
 


ATLAS ENERGY GROUP, LLC
Financial Information
(unaudited; in thousands except per unit amounts)
 
  Three Months Ended
  March 31,
Reconciliation of net income (loss) to non-GAAP measures(1):   2016       2015  
Net income (loss)  $   (1,272 )   $   53,479  
Distributable cash flow not attributable to unitholders prior to February 27, 2015 (the asset transfer date)(2)          (4,291 )
Atlas Resource net income attributable to unitholders      (3,286 )       (25,184 )
Atlas Resource cash distributions earned by ATLS(3)      1,877         9,334  
Atlas Growth net loss attributable to unitholders      45         64  
Atlas Growth cash distributions earned by ATLS(3)      154         72  
Non-recurring spinoff and acquisition costs            17,174  
Amortization of deferred finance costs and predecessor               
Term Loan interest expense    247       8,551  
Non-cash stock compensation expense      2,111         20  
Preferred unit distributions      (339 )       (333 )
Loss on early extinguishment of debt, net      6,053        
Other non-cash adjustments      260         557  
Income attributable to non-controlling interests      (5,340 )       (58,298 )
Distributable Cash Flow attributable to unitholders(1)  $   510     $   1,145  
       
Supplemental Adjusted EBITDA and Distributable Cash Flow Summary:
Atlas Resource Cash Distributions Earned(3):      
Limited Partner Units  $   1,799     $   8,726  
Series A Preferred Units (2%)      78         608  
Incentive Distribution Rights           
Total Atlas Resource Cash Distributions Earned(3)      1,877         9,334  
per limited partner unit  $   0.025     $   0.325  
       
Atlas Growth Cash Distributions Earned(3)      154         72  
       
Total Cash Distributions Earned      2,031         9,406  
       
Cash general and administrative expenses(4)      (613 )       (3,365 )
Other, net      927         731  
Adjusted EBITDA(1)      2,345         6,772  
Cash interest expense(5)      (1,496 )       (1,003 )
Preferred unit distributions      (339 )       (333 )
Distributable Cash Flow(1)  $   510     $   5,436  
Distributable cash flow not attributable to unitholders prior to February 27, 2015 (the asset transfer date)(2)          (4,291 )
Distributable Cash Flow attributable to unitholders(1)  $   510     $   1,145  
               


(1) EBITDA and Distributable Cash Flow are relevant and useful because they help ATLS’ investors understand its operating performance, allow for easier comparison of its results with other master limited partnerships (“MLP”), and are critical components in the determination of quarterly cash distributions. As a MLP, ATLS is required to distribute 100% of available cash, as defined in its limited partnership agreement (“Available Cash”) and subject to cash reserves established by its general partner, to investors on a quarterly basis.  ATLS refers to Available Cash prior to the establishment of cash reserves as DCF. EBITDA, Adjusted EBITDA and DCF should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. While ATLS’ management believes that its methodology of calculating EBITDA, Adjusted EBITDA and DCF is generally consistent with the common practice of other MLPs, such metrics may not be consistent and, as such, may not be comparable to measures reported by other MLPs, who may use other adjustments related to their specific businesses. EBITDA, Adjusted EBITDA and DCF are supplemental financial measures used by ATLS’ management and by external users of ATLS’ financial statements such as investors, lenders under its credit facilities, research analysts, rating agencies and others to assess its:
• Operating performance as compared to other publicly traded partnerships and other companies in the upstream and midstream energy sectors, without regard to financing methods, historical cost basis or capital structure;
• Ability to generate sufficient cash flows to support its distributions to unitholders;
• Ability to incur and service debt and fund capital expansion;
• Viability of potential acquisitions and other capital expenditure projects; and
• Ability to comply with financial covenants in its debt facility, which is calculated based upon Adjusted EBITDA.  
DCF is determined by calculating EBITDA, adjusting it for non-cash, non-recurring and other items to achieve Adjusted EBITDA, and then deducting cash interest expense and maintenance capital expenditures.  ATLS defines EBITDA as net income (loss) plus the following adjustments:
• Interest expense;
• Income tax expense;
• Depreciation, depletion and amortization.
ATLS defines Adjusted EBITDA as EBITDA plus the following adjustments:
• Cash distributions paid by ARP and AGP within 45 days after the end of the respective quarter, based upon their distributable cash flow generated during that quarter;
• Asset impairments;
• Acquisition and related costs;
• Non-cash stock compensation;
• (Gains) losses on asset sales and disposal;
• Cash proceeds received from monetization of derivative transactions;
• Amortization of premiums paid on swaption derivative contracts; and
• Other items.  
ATLS adjusts DCF for non-cash, non-recurring and other items for the sole purpose of evaluating its cash distribution for the quarterly period, with EBITDA and Adjusted EBITDA adjusted in the same manner for consistency.  ATLS defines DCF as Adjusted EBITDA less the following adjustments:
• Cash interest expense; and 
• Preferred unit distributions.  
(2) In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the spin-off assets for all periods prior to its spin-off date of February 27, 2015.
(3) Represents the cash distribution paid by ARP and AGP within 45 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter.
(4) Excludes non-cash stock compensation expense and certain non-recurring spinoff costs and acquisition and related costs.
(5) Excludes non-cash amortization of deferred financing costs.


 

ATLAS ENERGY GROUP, LLC
CAPITALIZATION INFORMATION
 (unaudited; in thousands)
 
  March 31, 2016
  Atlas   Atlas      
  Energy   Resource   Consolidated  
Total debt  $   70,639     $ 1,553,760     $    1,624,399    
Less:  Cash    (28,709 )     (19,285 )     (47,994 )  
Total net debt       41,930       1,534,475       1,576,405    
             
Unitholders’ equity (deficit)      68,322       (83,481 )     (6,359)(1)  
             
Total capitalization  $   110,252     $ 1,450,994     $   1,570,046    
             
Ratio of net debt to capitalization  0.38x          
             
(1)  Net of eliminated amounts.           


  December 31, 2015
  Atlas   Atlas      
  Energy   Resource   Consolidated  
Total debt  $   68,887     $ 1,503,427     $    1,572,314    
Less:  Cash    (29,861 )     (1,353 )     (31,214 )  
Total net debt      39,026       1,502,074       1,541,100    
             
Unitholders’ equity (deficit)       83,922         (84,628 )     7,959(2)  
             
Total capitalization  $   122,948     $ 1,417,446     $   1,549,059    
             
Ratio of net debt to capitalization  0.32x          
             
(2)  Net of eliminated amounts.           


ATLAS ENERGY GROUP, LLC
CONSOLIDATING STATEMENTS OF OPERATIONS
 (unaudited; in thousands)
 
Three Months Ended March 31, 2016
 
  Atlas   Atlas        
  Energy   Resource   Eliminations   Consolidated
Revenues:              
Gas and oil production $   3,101     $   48,492     $    −     $   51,593  
Well construction and completion   −         2,100       −         2,100  
Gathering and processing   −         1,495       −         1,495  
Administration and oversight   −         455       −         455  
Well services   −         4,432       −         4,432  
Gain on mark-to-market derivatives     333         46,120       −         46,453  
Other, net     211         114       −         325  
Total revenues     3,645         103,208       −         106,853  
               
Costs and expenses:              
Gas and oil production     814         35,842     −         36,656  
Well construction and completion   −         1,826     −         1,826  
Gathering and processing   −         2,279     −         2,279  
Well services   −         2,178     −         2,178  
General and administrative     4,843         17,077     −         21,920  
Depreciation, depletion and amortization     4,227         30,045     −         34,272  
Total costs and expenses     9,884         89,247     −         99,131  
               
Operating income (loss)     (6,239 )       13,961     −         7,722  
               
Gain on asset sales and disposal   −         9     −         9  
Gain (loss) on early extinguishment of debt, net   (6,053 )     26,498       −         20,445  
Interest expense     (1,743 )       (27,705 )   −         (29,448 )
               
Net income (loss)     (14,035 )       12,763     −         (1,272 )
Preferred unitholders’ dividends     (339 )     −     −         (339 )
Income attributable to non-controlling interests   −       −       (5,340 )     (5,340 )
Net income (loss) attributable to unitholders’ interests $  (14,374 )   $ 12,763     $  (5,340 )   $ (6,951 )
               


ATLAS ENERGY GROUP, LLC
COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS
 (unaudited; in thousands)
 
Three Months Ended March 31, 2015
 
  Atlas   Atlas        
  Energy   Resource   Eliminations   Consolidated
Revenues:              
Gas and oil production $   2,311     $   104,249     $   −     $   106,560  
Well construction and completion −         23,655       −         23,655  
Gathering and processing   −         2,184       −         2,184  
Administration and oversight   −         1,259       −         1,259  
Well services   −         6,624       −         6,624  
Gain on mark-to-market derivatives   −         105,585       −         105,585  
Other, net     (101 )       33       −         (68 )
Total revenues     2,210         243,589       −         245,799  
               
Costs and expenses:              
Gas and oil production     491         45,498       −         45,989  
Well construction and completion   −         20,570       −         20,570  
Gathering and processing   −         2,417       −         2,417  
Well services   −         2,198       −         2,198  
General and administrative     24,793         17,135       −         41,928  
Depreciation, depletion and amortization     1,465         42,991       −         44,456  
Total costs and expenses     26,749         130,809       −         157,558  
               
Operating income (loss)      (24,539 )       112,780       −         88,241  
               
Loss on asset sales and disposal     −         (11 )     −         (11 )
Interest expense      (9,554 )       (25,197 )     −         (34,751 )
               
Net income (loss)     (34,093 )       87,572       −         53,479  
Preferred unitholders’ dividends     (333 )     −       −         (333 )
Income attributable to non-controlling interests −     −       (58,298 )     (58,298 )
Net income (loss) attributable to unitholders’ / owners’ interests $ (34,426 )   $  87,572     $ (58,298 )   $  (5,152 )
               


ATLAS ENERGY GROUP, LLC
CONDENSED CONSOLIDATING BALANCE SHEETS
 (unaudited; in thousands)
March 31, 2016
 
  Atlas   Atlas        
ASSETS Energy   Resource   Eliminations   Consolidated
Current assets:              
Cash and cash equivalents $     28,709     $     19,285       $       $   47,994  
Accounts receivable     3,168         57,152         (939 )       59,381  
Receivable from (advances from) affiliates   (10,997 )     10,997     −     −  
Current portion of derivative asset     314         159,745       −         160,059  
Prepaid expenses and other     31         16,635       −         16,666  
Total current assets     21,225         263,814         (939 )       284,100  
               
Property, plant and equipment, net     120,592         1,175,045       −         1,295,637  
Intangible assets, net   −         423       −         423  
Goodwill, net   −         13,639       −         13,639  
Long-term derivative asset     193         195,074       −         195,267  
Investment in subsidiaries     (7,861 )     −         7,861       −  
Other assets, net     22,272         31,502         939         54,713  
  $     156,421     $     1,679,497     $     7,861     $     1,843,779  
               
LIABILITIES AND UNITHOLDERS’ EQUITY (DEFICIT)        
               
Current liabilities:              
Accounts payable $ 2,865     $ 46,120       $       $   48,985  
Accrued interest   43       10,134       −         10,177  
Accrued well drilling and completion costs   678       4,053     −       4,731  
Accrued liabilities   9,792       25,285         (939 )       34,138  
Current portion of long-term debt   70,639       906,156       −         976,795  
Total current liabilities   84,017       991,748         (939 )       1,074,826  
               
Long-term debt, less current portion, net −       647,604       −         647,604  
Asset retirement obligations and other   4,082       123,626       −         127,708  
               
Unitholders’ equity (deficit):              
Common unitholders’ deficit   (108,159 )   −      −         (108,159 )
Series A preferred equity   40,740     −     −         40,740  
Partners’ deficit −       (99,341 )     99,341       −  
Accumulated other comprehensive income   3,498         15,860        (15,860 )       3,498  
    (63,921 )     (83,481 )     83,481         (63,921 )
Non-controlling interests   132,243     −         (74,681 )       57,562  
Total unitholders’ equity (deficit)   68,322       (83,481 )       8,800         (6,359 )
  $     156,421     $     1,679,497     $   7,861     $   1,843,779  


ATLAS ENERGY GROUP, LLC
COMBINED CONDENSED CONSOLIDATING BALANCE SHEETS
 (unaudited; in thousands)
December 31, 2015
 
  Atlas   Atlas        
ASSETS Energy   Resource   Eliminations   Consolidated
Current assets:              
Cash and cash equivalents  $     29,861     $     1,353     $     $   31,214  
Accounts receivable      3,492         63,367         (939 )       65,920  
Receivable from (advances to) affiliates    9,924       (9,924 )   −     −  
Current portion of derivative asset      303         159,460     −         159,763  
Subscriptions receivable    −         19,877     −         19,877  
Prepaid expenses and other      62         22,935     −         22,997  
Total current assets      43,642         257,068         (939 )       299,771  
               
Property, plant and equipment, net      125,286         1,191,611       −         1,316,897  
Intangible assets, net    −         456       −         456  
Goodwill, net    −         13,639       −         13,639  
Long-term derivative asset      109         198,262       −         198,371  
Investment in subsidiaries      (7,726 )     −         7,726       −  
Other assets, net      24,184         28,989         939         54,112  
  $     185,495     $     1,690,025     $     7,726     $     1,883,246  
               
LIABILITIES AND UNITHOLDERS’ EQUITY (DEFICIT)        
               
Current liabilities:              
Accounts payable  $     3,301     $   49,249      $       $   52,550  
Liabilities associated with drilling contracts  −       21,483     −       21,483  
Accrued interest      16         25,436       −         25,452  
Accrued well drilling and completion costs    6,641       26,914     −       33,555  
Accrued liabilities      16,959         28,994         (939 )       45,014  
Current portion of long-term debt      4,250       −       −         4,250  
Total current liabilities      31,167         152,076         (939 )       182,304  
               
Long-term debt, less current portion, net      64,637         1,503,427       −         1,568,064  
Asset retirement obligations and other      5,769         119,150       −         124,919  
               
Unitholders’ equity (deficit):              
Common unitholders’ deficit     (103,148 )     −     −         (103,148 )
Series A preferred equity     40,875       −     −         40,875  
Partners’ deficit   −         (104,003 )       104,003       −  
Accumulated other comprehensive income   4,284       19,375       (19,375 )     4,284  
      (57,989 )       (84,628 )       84,628          (57,989 )
Non-controlling interests      141,911       −         (75,963 )       65,948  
Total unitholders’ equity (deficit)      83,922         (84,628 )       8,665         7,959  
  $     185,495     $     1,690,025     $    7,726     $   1,883,246  


ATLAS ENERGY GROUP, LLC
Ownership Interests Summary

 
Atlas Energy Ownership Interests as of May 16, 2016: Amount   Overall
Ownership
Interest
Percentage
       
ATLAS RESOURCE:      
General partner interest   100 %     2.0 %
Common units   20,962,485       19.7 %
Preferred units   3,749,986       3.5 %
Incentive distribution rights   100 %     N/A  
Total Atlas Energy ownership interests in Atlas Resource       25.2 %
       
ATLAS GROWTH:      
General partner interest   80.0 %     2.0 %
Common units   500,010       2.1 %
Incentive distribution rights   80.0 %     N/A  
Total Atlas Energy ownership interests in Atlas Growth       4.1 %
       
LIGHTFOOT CAPITAL PARTNERS, GP LLC:      
Approximate general partner ownership interest       15.4 %
Approximate limited partner ownership interest       12.0 %


CONTACT:
Matthew Skelly
Vice President – Head of Investor Relations
Atlas Energy Group, LLC
(877) 280-2857
(215) 405-2718 (fax)

Atlas Energy Group, LLC