Atlas Pipeline Eyes Merger, Spinoff From Related Cos.
Date : 06/02/2009 @ 11:06AM
Source : Dow Jones News
Stock : Atlas Pipeline Holdings L.P. (AHD)
Quote : 3.19 -0.16 (-4.78%) @ 8:00PM
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Atlas Pipeline Eyes Merger, Spinoff From Related Cos.
By Christine Buurma
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Atlas Pipeline Partners LP (APL) chairman Edward Cohen said Tuesday that the natural gas processor and pipeline owner may merge with an affiliated company, Atlas Pipeline Holdings LP (AHD), and be spun off from other related companies involved in natural gas exploration and production.
The reshuffling would separate the Atlas companies involved in processing and pipelines from the companies focused on exploration and production, making the businesses easier for investors to understand, Cohen said during a conference call with analysts.
"We're striving to rationalize [Atlas Pipeline Partners] and make our situation much more transparent," he said. "The final step is totally severing the relationship between the E&P company and the processing company."
Cohen offered no timetable for the merger, saying Atlas Pipeline Partners is continuing to shore up its balance sheet. Atlas Pipeline Partners has been hard-hit by tumbling commodity prices, forcing the company to put assets on the sale block.
Moon Township, Pa.-based Atlas Pipeline Partners, which owns natural gas gathering and processing systems, is partially owned by Atlas Pipeline Holdings. Atlas America, Inc. (ATLS), in turn, owns an interest in Atlas Pipeline Holdings and in Atlas Energy Resources, LLC (ATN), which develops and produces U.S. natural gas.
In April, Atlas America said it would acquire the remaining 52% of Atlas Energy Resources it doesn't already own for about $500 million, renaming the company Atlas Energy Inc.
Cohen also said Tuesday that Atlas Pipeline Partners is nearing a deal to sell its Sweetwater II processing plant in Oklahoma.
In April, Atlas Pipeline Partners agreed to sell its Noark natural gas gathering and transmission system for $300 million to Spectra Energy Partners (SEP). Atlas Pipeline Partners has also formed a joint venture with Williams Cos. (WMB) to own and operate a gas gathering system in Appalachia's Marcellus Shale.
On Monday, Atlas Pipeline Partners said it had amended a debt agreement to improve the company's financial flexibility as it struggles with a heavy debt load and meager cash flows.
Cohen said Tuesday that Atlas Pipeline Partners could generate about $280 million in earnings for the year, or $3.65 a unit if prices for natural gas liquids, such as butane and propane, continue to recover.
Atlas Pipeline Partners units were recently trading 12 cents lower, or 2.22%, at $5.29. The unit price is down 88% from the 52-week high of $43.97.
-By Christine Buurma, Dow Jones Newswires; 201-938-2061; christine.buurma@dowjones.com
