Atlas America, Inc. Reports Record Financial Results for the Fourth Quarter and Full Year 2007
PHILADELPHIA--(BUSINESS WIRE)--February 28, 2008-- Atlas America Inc. (NASDAQ: ATLS) ("Atlas America" or "the Company") today reported record financial results for the fourth quarter and full year 2007.
The results of the full year 2007 include:
-- Record adjusted earnings before interest, income taxes,
depreciation and amortization ("Adjusted EBITDA"), a non-GAAP
measure, of $456.2 million, an increase of $306.3 million, or
over 200%, from the full year 2006. The increase in Adjusted
EBITDA is due primarily to the contributions from the
interests in the natural gas gathering and processing assets
purchased from Anadarko Petroleum Corporation by Atlas
Pipeline Partners, L.P. (NYSE: APL) ("Atlas Pipeline"),
contributions from the natural gas and oil producing assets
purchased from DTE Energy Company by Atlas Energy Resources,
LLC (NYSE: ATN) ("Atlas Energy"), and continued growth in the
legacy assets of Atlas Energy and Atlas Pipeline. A
reconciliation from net income to Adjusted EBITDA is provided
in the financial tables of this release;
-- Adjusted net income, a non-GAAP measure, was $50.3 million for
the full year 2007 compared to $44.2 million for the prior
year, an increase of $6.1 million or approximately 14%.
Adjusted diluted net income per share was $1.85 for the full
year 2007, compared to $1.50 per share for the full year 2006,
an increase of $0.35 per share or 23%. A reconciliation from
net income to adjusted net income is provided in the financial
tables of this release. On a GAAP basis, the Company
recognized net income of $35.3 million for the full year 2007
compared with $45.8 million for the prior year;
-- Excluding the effect of non-cash derivative expense, total
revenues of $1.36 billion for the full year 2007, an increase
of $613.9 million, or approximately 82%, compared to the full
year 2006.
The results of the fourth quarter 2007 include:
-- Adjusted EBITDA of $220.1 million, an increase of $179.0
million, or almost 440%, from the fourth quarter 2006;
-- Adjusted net income of $10.6 million compared with $11.9
million for the prior year fourth quarter. Adjusted diluted
net income per share was $0.39 for the fourth quarter 2007
compared with $0.41 per share for the fourth quarter 2006;
-- Excluding the effect of non-cash derivative expense, total
revenues were $503.6 million, an increase of $303.5 million,
or approximately 152%, compared to the fourth quarter 2006.
On February 14, 2008, the Company paid a cash dividend of $0.05 per share of common stock to holders of record on February 7, 2008.
Cash Distributions from Affiliates
-- Atlas Energy declared a record quarterly cash distribution of
$0.57 per common unit for the fourth quarter 2007 with a
distribution coverage ratio that approximated 1.3x. This
quarter's distribution was paid on February 14, 2008 to
unitholders of record on February 7, 2008. The Company owns
approximately 48% of the outstanding common units and all of
the Class A and management incentive interests of Atlas
Energy. The Company received approximately $17.4 million in
cash distributions from its ownership interest in Atlas Energy
for the fourth quarter 2007.
-- Atlas Pipeline Holdings, L.P. (NYSE: AHD) ("Atlas Holdings")
declared a quarterly cash distribution for the fourth quarter
2007 of $0.34 per common limited partner unit, which was paid
on February 19, 2008 to common unitholders of record as of
February 7, 2008. Atlas America owns approximately 64% of the
outstanding limited partner units of Atlas Holdings. The
Company received approximately $6.0 million in cash
distributions from its ownership interest in Atlas Holdings
for the fourth quarter 2007.
-- For the full year 2007, Atlas America received $81.6 million
in common unit distributions from its ownership in Atlas
Energy and Atlas Holdings.
Please see the respective earnings releases for Atlas Energy, Atlas Holdings and Atlas Pipeline for more information with regard to their fourth quarter 2007 financial results.
Marcellus Shale Development
As previously reported, Atlas Energy has drilled 27 vertical wells to date and is currently producing 21 wells into a pipeline in its Marcellus Shale acreage position. The remaining 6 wells are scheduled to be completed and turned into line shortly.
Atlas Energy currently controls approximately 483,000 Marcellus acres in Pennsylvania, New York and West Virginia and continues to aggressively add to its position. Atlas Energy is currently focused on its approximate 224,000 existing Marcellus acres in southwestern Pennsylvania, where it has drilled all but one of its Marcellus wells and has now, through this drilling, largely delineated its acreage.
Since implementing advanced drilling, completion and production techniques, Atlas Energy's initial daily rates (24 hours) into a pipeline have averaged 1.3 million cubic feet ("Mmcf") per day, and have been as high as 2.6 Mmcf per day, in southwestern Pennsylvania. To Atlas Energy's knowledge (based on published reports), these are the best initial daily production rates of any vertical wells in the Marcellus play. In response to these results, Atlas Energy plans to drill and complete at least 150 vertical Marcellus Shale wells over the next eighteen months.
Atlas Energy has drilled one horizontal well in southwestern Pennsylvania with an industry partner and plans to drill at least four additional horizontal wells during the remainder of 2008.
Atlas Energy Results
-- Proved reserves net to Atlas Energy's interest grew to 897 bcfe at
December 31, 2007, compared to 181 bcfe at December 31, 2006, an
increase of almost 400%. The increase in proved reserves is due
primarily to the addition of the Michigan segment reserves
acquired in June 2007 as well as continued growth from Atlas
Energy's drilling programs in Appalachia.
-- Atlas Energy completed fundraising for the Public #17-2007 (A)
drilling program, bringing the total investor funds raised in
2007 to approximately $363 million, representing a record for
Atlas Energy and more than 66% above 2006's then-record of $218
million. On February 1, 2008, Atlas Energy's Post-Effective
Amendment No. 1 to the Atlas Resources Public #17-2007 Drilling
Program Registration Statement became effective with the
Securities and Exchange Commission. The second partnership in the
program (Atlas Resources Public #17-2008(B) L.P.) is offering
units representing up to $236 million. Atlas Energy's subsidiary
serves as managing general partner of the partnership. A written
prospectus meeting the requirements of Section 10 of the
Securities Act may be obtained from Anthem Securities, Inc. (a
subsidiary of Atlas Energy), 1550 Coraopolis Heights Rd. - 2nd
Floor, Moon Township, PA 15108.
-- Atlas Energy drilled 277 gross wells in Appalachia in the fourth
quarter 2007, and increase of 75 gross wells or 37% from the
prior year fourth quarter, and 1,117 for the full year 2007, an
increase of 401 gross wells or 56% from the prior year. Atlas
Energy drilled 38 gross wells in Michigan in the fourth quarter
2007 and 115 gross wells since June 29, 2007, when Atlas Energy
acquired the Michigan assets in the Antrim Shale.
-- At December 31, 2007, Atlas Energy held approximately 752,000 net
acres in the Appalachian Basin, of which 501,000 were
undeveloped, an increase of 37% from the net acreage position at
December 31, 2006 and a 6% increase from September 30, 2007. At
December 31, 2007, Atlas Energy had approximately 232,000 net
developed acres in the Antrim Shale in Michigan, and
approximately 53,000 net undeveloped acres.
-- Atlas Energy has identified approximately 3,200 geologically
favorable shallow drilling locations on its acreage in the
Appalachian Basin, which does not include any locations
prospective for the Marcellus Shale. In addition, the Company has
identified approximately 768 drilling locations in Michigan.
-- Atlas Energy had interests in approximately 10,720 gross wells
December 31, 2007, of which Atlas Energy operates approximately
83%, an increase of approximately 4% in gross wells from
September 30, 2007.
-- Natural gas and oil production was 91.9 million cubic feet
equivalents ("Mmcfe") per day for fourth quarter 2007, compared
to 28.3 Mmcfe per day from the fourth quarter 2006. The increase
is due primarily to the acquisition of the Antrim Shale
production in Michigan, and a 15% increase in Appalachia
production.
Atlas Pipeline Results
Full Year
-- Excluding the effect of non-cash derivative expense, Atlas
Pipeline's Mid-Continent segment total revenue increased $371.1
million, or 86%, to $802.6 million for the full year 2007
compared with $431.5 million for the prior year. This increase
principally reflects the contribution from the acquisition of the
Chaney Dell and Midkiff/Benedum systems of $345.7 million and
higher volumes and commodity prices on its other systems.
-- Atlas Pipeline's NOARK system throughput volume increased 77.1
MMcfd, or 31%, to 326.7 MMcfd for the full year 2007 compared
with 249.6 MMcfd the full year 2006. Atlas Pipeline's Elk
City/Sweetwater system average gross natural gas processed volume
increased 71.8 MMcfd, or 47%, to 225.8 MMcfd for the full year
2007 compared with 154.0 MMcfd for the prior year, and 110 new wells were connected to the Elk City/Sweetwater system during the
full year 2007 compared with 64 new wells for the prior year.
Atlas Pipeline's Velma system average processed natural gas
volume increased 2.4 MMcfd, or 4%, to 60.5 MMcfd for the full
year 2007 compared with 58.1 MMcfd for the prior year, and 58 new
wells were connected to its Velma system during the full year
2007 compared with 60 new wells for the prior year.
-- Total revenue for the Atlas Pipeline Appalachia system increased
$4.7 million, or approximately 15%, to $35.6 million for the year
ended December 31, 2007 compared with $30.9 million for the prior
year due principally to higher throughput volume and $1.6 million
of natural gas and liquids sales associated with the Irishtown
processing plant, which was acquired in August 2007. Throughput
volume increased 6.8 MMcfd, or 11%, to 68.7 MMcfd for the year
ended December 31, 2007 compared with 61.9 MMcfd for the prior
year resulting from the connection of new wells to the Appalachia
gathering system and throughput associated with the gathering
system acquired in connection with the Irishtown processing
plant. The Appalachia system's average transportation rate per
thousand cubic feet ("mcf") was $1.35 for the full year 2007
compared with $1.34 for the full year 2006. During the fourth
quarter 2007, 166 new wells were connected to the Appalachia
gathering system. For the year ended December 31, 2007, 874 new
wells, including 267 Irishtown wells, which were acquired in
August 2007, were connected to the Appalachia gathering system
compared with 711 new wells for the prior year, representing a
23% increase.
Fourth Quarter
----------------------------------------------------------------------
-- Excluding the effect of non-cash derivative expense, Atlas
Pipeline's Mid-Continent segment total revenue increased $224.6
million, or 206%, to $333.6 million for the fourth quarter 2007
compared with $109.0 million for the prior year comparable
quarter. This increase principally reflects the contribution from
the acquisition of the Chaney Dell and Midkiff/Benedum systems of
$213.3 million and higher volumes and realized commodity prices
on its other systems.
-- Average gross natural gas processed volume for the fourth quarter
2007 was 256.1 MMcfd for Atlas Pipeline's Chaney Dell system and
101.5 MMcfd for the Midkiff/Benedum system. There were 68 new
wells connected to Atlas Pipeline's Chaney Dell system during the
fourth quarter 2007 and 57 new wells connected to the
Midkiff/Benedum system for the same period. Atlas Pipeline's
NOARK system throughput volume increased 82.5 MMcfd, or 29%, to
371.4 MMcfd for the fourth quarter 2007 compared with 288.9 MMcfd
for the fourth quarter 2006. Atlas Pipeline's Elk City/Sweetwater
system average gross natural gas processed volume increased 16.5
MMcfd, or 8%, to 229.5 MMcfd for the fourth quarter 2007 compared
with 213.0 MMcfd for the fourth quarter 2006; 17 new wells were
connected to the Elk City/Sweetwater system during the fourth
quarter 2007 compared with 10 new wells for the prior year
comparable quarter. Atlas Pipeline's Velma system average
processed natural gas volume increased 4.6 MMcfd, or 8%, to 60.5
MMcfd for the fourth quarter 2007 compared with 55.9 MMcfd for
the prior year comparable quarter. 10 new wells were connected to
its Velma system during the fourth quarter 2007 compared with 7
new wells for the prior year comparable quarter.
-- Total revenue for Atlas Pipeline's Appalachia system increased
$2.5 million, or 33%, to $10.1 million for the fourth quarter
2007 compared with $7.6 million for the fourth quarter 2006, due
principally to higher throughput volume and $1.2 million of
natural gas and liquids sales associated with the Irishtown
processing plant. Throughput volume increased 11.1 MMcfd, or 18%,
to 74.2 MMcfd for the fourth quarter 2007 compared with 63.1
MMcfd for the fourth quarter 2006 resulting from the connection
of new wells to the Appalachia gathering system and throughput
associated with the gathering system acquired in connection with
the Irishtown processing plant. The Appalachia system's average
transportation rate per thousand cubic feet ("mcf") was $1.30 for
both the fourth quarter 2007 and 2006.
Corporate and Other
-- General and administrative expense was $27.3 million for the
fourth quarter 2007, an increase of $13.8 million from the prior
year comparable period, primarily due to higher costs in
managing our operations, including expenses related to the newly
acquired assets by Atlas Energy and Atlas Pipeline during 2007.
-- Interest expense was $38.9 million for the fourth quarter 2007,
an increase of $31.0 million from the prior year comparable
period, primarily due to the financing of the assets acquired by
Atlas Energy and Atlas Pipeline in 2007.
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