Atlas Energy Group, LLC Reports Operating and Financial Results for the First Quarter 2016
May 16 2016 - 10:44PM
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, LLCCOMBINED 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, LLCCOMBINED 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, LLCFinancial 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, LLCFinancial
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, LLCCAPITALIZATION
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,
LLCCONSOLIDATING 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,
LLCCOMBINED 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, LLCCONDENSED
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, LLCCOMBINED 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, LLCOwnership
Interests Summary |
|
Atlas Energy Ownership Interests as of May 16,
2016: |
Amount |
|
OverallOwnershipInterestPercentage |
|
|
|
|
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)