PHILADELPHIA, Aug. 6, 2015 /PRNewswire/ --
- Adjusted EBITDA was $64.7
million(1) for the second quarter 2015 and
Distributable Cash Flow was $25.4
million(1) for the second quarter 2015
- Natural gas and oil production in the second quarter 2015
were hedged approximately 73% and 100%, respectively; ARP's market
value of its hedge portfolio is currently $327 million
- Production costs have decreased approximately $25 million on an annualized basis when compared
to fourth quarter 2014 as a result of the Company's operational
cost reduction efforts
- Full year 2015 G&A expense is expected to decrease
approximately 20% on a year over year basis
- Management will discuss second quarter 2015 financial and
operational results on a conference call at 9AM ET on Friday, August
7th
Atlas Resource Partners, L.P. (NYSE: ARP) ("ARP" or "the
Company") reported operating and financial results for the
second quarter 2015.
Daniel C. Herz, Chief
Executive Officer - ARP, stated, "Our executive team has
successfully navigated similar commodity price cycles in the past.
Our business and operations are performing at our expectations, and
we continued to benefit this period from our strong natural gas and
oil hedge positions. We believe our business is well-protected by
our hedges and the fee income from our partnership management
business, which will help us manage through this challenging
period. Most importantly, we are presently pursuing strategic
activities which would additionally strengthen the core of our
enterprise and position our business to take advantage of
opportunities in the current market environment."
- Second quarter 2015 Adjusted EBITDA, a non-GAAP measure, was
$64.7 million(1), compared
to $70.9 million for the first
quarter 2015. The decrease from the first quarter 2015 was due to
historical seasonality of ARP's partnership management business fee
recognition, as well as lower production margin as a result of
planned deferral of capital expenditures and well connections until
later in 2015.
- Distributable Cash Flow, a non-GAAP measure, was $25.4 million(1), or approximately
$0.27 per common unit, for the second
quarter 2015, compared with $52.9
million for the prior year second quarter.
- ARP paid monthly cash distributions totaling $0.325 per common limited partner unit for the
second quarter 2015 at a distribution coverage ratio of
approximately 0.83x. Distribution coverage for the first half of
2015 was approximately 1.0x. On July 22,
2015, ARP announced the June
2015 monthly distribution of $0.1083 per common unit ($1.30 per unit on an annualized basis), which
will be paid on August 14, 2015 to
unitholders of record as of August 7,
2015.
- On a GAAP basis, net loss was $46.8
million for the second quarter 2015, compared with a net
loss of $19.4 million for the prior
year second quarter. Net loss in the current period was principally
generated by the mark-to-market loss recognized in the period from
ARP's financial hedge positions, as ARP discontinued hedge
accounting as of January 1,
2015.
Arkoma Asset Acquisition from Atlas Energy
On June 5, 2015, ARP acquired
natural gas producing properties in the Arkoma basin from its
parent company, Atlas Energy Group, LLC (NYSE:ATLS), for
approximately $35.5 million. The
Arkoma assets consist of approximately 41 billion cubic feet
("Bcf") of mature, low-decline natural gas reserves, which
currently produce approximately 10.5 million cubic feet per day
from over 550 active wells. ARP accounted for the Arkoma
acquisition as a transaction between entities under common control,
and accordingly recast the comparative prior periods presented as
if the transaction had occurred at the beginning of the respective
periods.
Operating Results
- Average net daily production for the second quarter 2015 was
270.8 million cubic feet equivalents per day ("Mmcfed"), as
compared to 273.0 Mmcfed for the prior year second quarter. ARP's
second quarter 2015 production was comprised of 81% natural gas,
12% oil and 7% natural gas liquids ("NGL"). Oil volumes increased
to 5,293 barrels per day ("bpd") in the second quarter 2015,
compared to 2,084 bpd in the prior year quarter. The increase in
oil volumes was due primarily to the acquisition of oil-rich
production in the Eagle Ford Shale and Rangely field in 2014.
- ARP's net realized price for natural gas including the effect
of hedge positions was $3.33 per
thousand cubic feet ("mcf") for the second quarter 2015, compared
to $3.79/mcf for the prior year
second quarter. Net realized oil prices including the effect of
hedge positions averaged $83.19 per
barrel ("bbl") for the second quarter 2015, compared to
$90.66/bbl for the prior year second
quarter. The Company was hedged approximately 73% on its natural
gas production in the second quarter 2015 and approximately 100% on
its oil production.
- Investment partnership margin was $6.7
million in the second quarter 2015, compared with
$10.2 million for the prior year
comparable quarter. The decrease in investment partnership margin
was due to more partnership wells being initiated in the prior year
quarter, which generated higher administration and oversight
fees.
Hedge Positions
- ARP's hedge portfolio is comprised entirely of fixed-price swap
and costless collar positions through 2019, and is valued at
$327 million as of August 6, 2015.
- For the remainder of 2015 and the full years 2016, 2017, and
2018, ARP is hedged approximately 72%, 67%, 62% and 51%,
respectively, for its natural gas production at an average price of
$4.17/mcf, and is hedged
approximately 100%, 85%, 62% and 59%, respectively, for oil at an
average price of approximately $78/bbl based on second quarter 2015 average
production. A summary of ARP's derivative positions as of
August 6, 2015 is provided in the
financial tables of this release.
Corporate Expenses & Capital Position
- Cash general and administrative expense was $10.7 million for the second quarter 2015, which
was consistent with $10.5 million in
the prior year comparable period. ARP expects full year 2015
general and administrative expense to decrease approximately 20%
compared to the full year 2014 due primarily to labor and other
cost reductions.
- Cash interest expense was $21.2
million for the second quarter 2015, compared with
$11.6 million for the prior year
period. The increase compared to the prior year second quarter was
due to the issuance in follow-on offerings of $100 million of 7.75% Senior Notes due 2021 in
May 2014 and $75 million of 9.25% Senior Notes due 2021 in
October 2014 to partially fund ARP's
acquisitions of oil producing properties in the Rangely Field and
the Eagle Ford Shale, as well as the $250
million second lien financing entered into by ARP in
February 2015.
- At June 30, 2015, ARP had
$1.5 billion of total debt, which was
consistent with the balance at March 31,
2015. The outstanding debt balance included $550.0 million outstanding under its revolving
credit facility with a borrowing base of $750 million, which was reconfirmed on
July 29, 2015. ARP had approximately
$196 million of availability under
its revolving credit facility at June 30,
2015.
ARP will be discussing its second quarter 2015 results on an
investor call with management on Friday,
August 7, 2015 at 9:00 am Eastern
Time. Interested parties are invited to access the live
webcast the investor call by going to the Investor Relations
section of Atlas Resource's website at
www.atlasresourcepartners.com. For those unavailable to
listen to the live broadcast, the replay of the webcast will be
available following the live call on the ARP website and
telephonically beginning at approximately 1:00 p.m. ET on August 7,
2015 by dialing (855) 859-2056, passcode: 87417314.
Atlas Resource Partners, L.P. (NYSE: ARP) is an
exploration & production master limited partnership which owns
an interest in over 14,500 producing 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), Black Warrior Basin (AL), 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 our website at
www.atlasresourcepartners.com, or contact Investor Relations at
InvestorRelations@atlasenergy.com.
Atlas Energy Group, LLC (NYSE: ATLS) is a limited
liability company which owns the following interests: all of the
general partner interest, incentive distribution rights and an
approximate 25% limited partner interest in its upstream oil &
gas subsidiary, Atlas Resource Partners, L.P.; the general partner
interests, 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 our website at www.atlasenergy.com, or
contact Investor Relations at
InvestorRelations@atlasenergy.com.
Cautionary Note Regarding Forward-Looking
Statements
Certain matters discussed within this press release are
forward-looking statements. Although Atlas Resource Partners,
L.P. believes the expectations reflected in such forward-looking
statements are based on reasonable assumptions, it can give no
assurance that its expectations will be attained. Atlas
Resource Partners does not undertake any duty to update any
statements contained herein (including any forward-looking
statements), except as required by law. 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. ARP 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, ARP's 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; ARP's ability to realize the benefits of its
acquisitions; 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; ARP's 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 ARP'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 ARP assumes no
obligation to update such statements, except as may be required by
applicable law.
(1) A reconciliation of GAAP net income (loss)
to Adjusted EBITDA and Distributable Cash Flow is provided in the
financial tables of this release. Please see footnote 1 to the
Financial Information table of this release.
ATLAS RESOURCE
PARTNERS, L.P.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited; in
thousands, except per unit data)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
Gas and oil
production
|
$ 97,260
|
|
$ 108,237
|
|
$ 201,509
|
|
$ 208,494
|
Well construction and
completion
|
16,956
|
|
16,336
|
|
40,611
|
|
65,713
|
Gathering and
processing
|
2,177
|
|
3,758
|
|
4,361
|
|
8,226
|
Administration and
oversight
|
547
|
|
4,166
|
|
1,806
|
|
5,895
|
Well
services
|
6,102
|
|
6,365
|
|
12,726
|
|
11,844
|
Gain (loss) on
mark-to-market derivatives
|
(26,944)
|
|
—
|
|
78,641
|
|
—
|
Other,
net
|
27
|
|
35
|
|
60
|
|
82
|
Total revenues
|
96,125
|
|
138,897
|
|
339,714
|
|
300,254
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Gas and oil
production
|
43,135
|
|
43,122
|
|
88,633
|
|
81,647
|
Well construction and
completion
|
14,745
|
|
14,206
|
|
35,315
|
|
57,142
|
Gathering and
processing
|
2,516
|
|
4,273
|
|
4,933
|
|
8,686
|
Well
services
|
2,139
|
|
2,426
|
|
4,337
|
|
4,908
|
General and
administrative
|
13,287
|
|
21,315
|
|
30,422
|
|
37,770
|
Depreciation, depletion and
amortization
|
42,494
|
|
59,680
|
|
85,485
|
|
111,499
|
Total costs and expenses
|
118,316
|
|
145,022
|
|
249,125
|
|
301,652
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(22,191)
|
|
(6,125)
|
|
90,589
|
|
(1,398)
|
|
|
|
|
|
|
|
|
Gain (loss) on asset
sales and disposal
|
97
|
|
9
|
|
86
|
|
(1,594)
|
Interest
expense
|
(24,716)
|
|
(13,263)
|
|
(49,913)
|
|
(26,451)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(46,810)
|
|
(19,379)
|
|
40,762
|
|
(29,443)
|
|
|
|
|
|
|
|
|
Preferred limited
partner dividends
|
(4,234)
|
|
(4,424)
|
|
(7,887)
|
|
(8,823)
|
Net income (loss)
attributable to common limited
partners and the general partner
|
$ (51,044)
|
|
$ (23,803)
|
|
$ 32,875
|
|
$ (38,266)
|
|
|
|
|
|
|
|
|
Allocation of net
income (loss) attributable to common limited partners and the
general partner:
|
|
|
|
|
General partner's
interest
|
$
(1,021)
|
|
$ 2,400
|
|
$
658
|
|
$ 4,418
|
Common limited
partners' interest
|
(50,023)
|
|
(26,203)
|
|
32,217
|
|
(42,684)
|
Net income (loss)
attributable to common limited partners and the general
partner
|
$ (51,044)
|
|
$ (23,803)
|
|
$ 32,875
|
|
$ (38,266)
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common limited partners per unit:
|
|
|
|
|
Basic
|
$
(0.55)
|
|
$
(0.35)
|
|
$
0.36
|
|
$ (0.63)
|
Diluted
|
$
(0.55)
|
|
$
(0.35)
|
|
$
0.36
|
|
$ (0.63)
|
|
|
|
|
|
|
|
|
Weighted average
common limited partner units outstanding:
|
|
|
|
|
Basic
|
90,516
|
|
73,900
|
|
88,036
|
|
67,595
|
Diluted
|
90,516
|
|
73,900
|
|
88,616
|
|
67,595
|
ATLAS RESOURCE
PARTNERS, L.P.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited; in
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
ASSETS
|
|
2015
|
|
2014
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
607
|
|
$
15,247
|
Accounts
receivable
|
|
89,169
|
|
114,520
|
Advances to
affiliates
|
|
24,856
|
|
—
|
Current portion of
derivative asset
|
|
114,710
|
|
144,259
|
Subscriptions
receivable
|
|
—
|
|
32,398
|
Prepaid expenses and
other
|
|
24,321
|
|
26,296
|
Total current assets
|
|
253,663
|
|
332,720
|
|
|
|
|
|
Property, plant
and equipment, net
|
|
2,226,817
|
|
2,263,820
|
Goodwill and
intangible assets, net
|
|
14,213
|
|
14,330
|
Long-term
derivative asset
|
|
150,162
|
|
130,602
|
Other assets,
net
|
|
56,239
|
|
50,081
|
|
|
$
2,701,094
|
|
$
2,791,553
|
|
|
|
|
|
LIABILITIES AND
PARTNERS' CAPITAL
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
77,603
|
|
$
111,198
|
Advances from
affiliates
|
|
—
|
|
2,249
|
Liabilities
associated with drilling contracts
|
|
—
|
|
40,611
|
Accrued well
drilling and completion costs
|
|
25,565
|
|
80,404
|
Distribution
payable
|
|
13,541
|
|
20,876
|
Accrued
liabilities
|
|
54,050
|
|
84,235
|
Total current liabilities
|
|
170,759
|
|
339,573
|
|
|
|
|
|
Long-term
debt
|
|
1,491,612
|
|
1,394,460
|
Asset retirement
obligations and other
|
|
114,422
|
|
109,983
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Partners'
Capital:
|
|
|
|
|
General partner's
interest
|
|
(15,474)
|
|
(13,697)
|
Preferred limited
partners' interests
|
|
188,948
|
|
163,522
|
Common limited
partners' interests
|
|
611,301
|
|
605,065
|
Class C common limited
partner warrants
|
|
1,176
|
|
1,176
|
Accumulated other
comprehensive income
|
|
138,350
|
|
191,471
|
Total partners'
capital
|
|
924,301
|
|
947,537
|
|
|
$
2,701,094
|
|
$
2,791,553
|
ATLAS RESOURCE
PARTNERS, L.P
|
Financial and
Operating Highlights
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common limited partners per
unit - basic
|
$
(0.55)
|
|
$
(0.35)
|
|
$
0.36
|
|
$ (0.63)
|
|
|
|
|
|
|
|
|
Cash distributions
paid per unit(1)
|
$
0.325
|
|
$ 0.583
|
|
$
0.650
|
|
$ 1.163
|
|
|
|
|
|
|
|
|
Production
revenues (in thousands):
|
|
|
|
|
|
|
|
Natural gas
|
$ 56,548
|
|
$ 81,780
|
|
$ 123,089
|
|
$ 159,982
|
Oil
|
35,861
|
|
17,192
|
|
68,246
|
|
29,475
|
Natural gas
liquids
|
4,851
|
|
9,265
|
|
10,174
|
|
19,037
|
Total production
revenues
|
$ 97,260
|
|
$ 108,237
|
|
$ 201,509
|
|
$ 208,494
|
|
|
|
|
|
|
|
|
Production
volume:(2)(3)
|
|
|
|
|
|
|
|
Appalachia:
(4)
|
|
|
|
|
|
|
|
Natural gas
(Mcfd)
|
31,378
|
|
37,916
|
|
31,796
|
|
39,522
|
Oil (Bpd)
|
369
|
|
388
|
|
352
|
|
401
|
Natural gas liquids
(Bpd)
|
35
|
|
45
|
|
35
|
|
37
|
Total
(Mcfed)
|
33,804
|
|
40,513
|
|
34,118
|
|
42,152
|
Coal-bed Methane:
(4)
|
|
|
|
|
|
|
|
Natural gas
(Mcfd)
|
131,310
|
|
131,156
|
|
132,714
|
|
125,420
|
Oil (Bpd)
|
—
|
|
—
|
|
—
|
|
—
|
Natural gas liquids
(Bpd)
|
—
|
|
—
|
|
—
|
|
—
|
Total
(Mcfed)
|
131,310
|
|
131,156
|
|
132,714
|
|
125,420
|
Barnett/Marble
Falls:
|
|
|
|
|
|
|
|
Natural gas
(Mcfd)
|
47,369
|
|
59,711
|
|
48,487
|
|
58,810
|
Oil (Bpd)
|
633
|
|
1,231
|
|
691
|
|
1,034
|
Natural gas liquids
(Bpd)
|
2,095
|
|
2,762
|
|
2,184
|
|
2,666
|
Total
(Mcfed)
|
63,740
|
|
83,669
|
|
65,736
|
|
81,009
|
Rangely/Eagle Ford:
(4)
|
|
|
|
|
|
|
|
Natural gas
(Mcfd)
|
200
|
|
—
|
|
349
|
|
—
|
Oil (Bpd)
|
3,890
|
|
—
|
|
3,900
|
|
—
|
Natural gas liquids
(Bpd)
|
302
|
|
—
|
|
330
|
|
—
|
Total
(Mcfed)
|
25,354
|
|
—
|
|
25,732
|
|
—
|
Mississippi
Lime/Hunton:
|
|
|
|
|
|
|
|
Natural gas
(Mcfd)
|
6,429
|
|
6,325
|
|
7,001
|
|
6,100
|
Oil (Bpd)
|
383
|
|
437
|
|
448
|
|
369
|
Natural gas liquids
(Bpd)
|
534
|
|
543
|
|
574
|
|
514
|
Total
(Mcfed)
|
11,931
|
|
12,205
|
|
13,137
|
|
11,400
|
Other Operating
Areas:(4)
|
|
|
|
|
|
|
|
Natural gas
(Mcfd)
|
3,158
|
|
3,267
|
|
3,224
|
|
3,334
|
Oil (Bpd)
|
17
|
|
27
|
|
21
|
|
23
|
Natural gas liquids
(Bpd)
|
227
|
|
340
|
|
216
|
|
339
|
Total
(Mcfed)
|
4,622
|
|
5,470
|
|
4,645
|
|
5,506
|
Total
Production:(3)
|
|
|
|
|
|
|
|
Natural gas
(Mcfd)
|
219,844
|
|
238,375
|
|
223,571
|
|
233,186
|
Oil (Bpd)
|
5,293
|
|
2,084
|
|
5,412
|
|
1,827
|
Natural gas liquids
(Bpd)
|
3,194
|
|
3,689
|
|
3,340
|
|
3,556
|
Total
(Mcfed)
|
270,761
|
|
273,014
|
|
276,083
|
|
265,488
|
|
|
|
|
|
|
|
|
Average sales
prices: (3)
|
|
|
|
|
|
|
|
Natural gas (per Mcf)
(5)
|
$
3.33
|
|
$
3.79
|
|
$
3.46
|
|
$
3.92
|
Oil (per
Bbl)(6)
|
$ 83.19
|
|
$ 90.66
|
|
$ 81.98
|
|
$ 89.12
|
Natural gas liquids
(per Bbl) (7)
|
$ 22.58
|
|
$ 27.60
|
|
$ 22.53
|
|
$ 29.57
|
|
|
|
|
|
|
|
|
Production
costs:(3)(8)
|
$
1.36
|
|
$
1.22
|
|
$
1.36
|
|
$
1.19
|
Lease
operating expenses per Mcfe
|
0.16
|
|
0.24
|
|
0.20
|
|
0.26
|
Production taxes per
Mcfe
|
0.24
|
|
0.27
|
|
0.24
|
|
0.28
|
Transportation and
compression expenses per Mcfe
|
$
1.77
|
|
$
1.73
|
|
$
1.79
|
|
$
1.73
|
Total production costs
per Mcfe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depletion per
Mcfe(3)
|
$
1.60
|
|
$
2.30
|
|
$
1.59
|
|
$
2.22
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the cash
distributions declared for the respective period and paid by ARP
within 45 days after the end of each month within each quarter,
based upon the distributable cash flow generated during the
respective period.
|
|
(2)
|
Production quantities
consist of the sum of (i) ARP's proportionate share of production
from wells in which it has a direct interest, based on ARP's
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.
|
|
(3)
|
"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.
|
|
(4)
|
Appalachia includes
ARP's production located in Pennsylvania, Ohio, New York and West
Virginia (excluding the Cedar Bluff area); Coal-bed methane
includes ARP's production located in the Raton Basin in northern
New Mexico, the Black Warrior Basin in central Alabama, the Cedar
Bluff area of West Virginia and Virginia, the Arkoma Basin in
eastern Oklahoma and the County Line area of Wyoming; Rangely/Eagle
Ford includes ARP's 25% non-operated net working interest in oil
and natural gas liquids producing assets in the Rangely field in
northwest Colorado and its production located in southern Texas;
Other operating areas include ARP's production located in the
Chattanooga, New Albany/Antrim and Niobrara Shales.
|
|
(5)
|
ARP's average sales
prices for natural gas before the effects of financial hedging were
$2.14 per Mcf and $4.13 per Mcf for the three months ended June 30,
2015 and 2014, respectively, and $2.34 per Mcf and $4.39 per Mcf
for the six months ended June 30, 2015 and 2014, respectively.
These amounts exclude the impact of subordination of production
revenues to investor partners within the investor partnerships.
Including the effects of subordination, average natural gas sales
prices were $3.28 per Mcf ($2.09 per Mcf before the effects of
financial hedging) and $3.77 per Mcf ($4.12 per Mcf before the
effects of financial hedging) for the three months ended June 30,
2015 and 2014, respectively, and $3.40 per Mcf ($2.29 per Mcf
before the effects of financial hedging) and $3.79 per Mcf ($4.26
per Mcf before the effects of financial hedging) for the six months
ended June 30, 2015 and 2014, respectively.
|
|
(6)
|
ARP's average sales
prices for oil before the effects of financial hedging were $53.35
per barrel and $98.95 per barrel for the three months ended June
30, 2015 and 2014, respectively, and $48.32 per barrel and $96.49
per barrel for the six months ended June 30, 2015 and 2014,
respectively.
|
|
(7)
|
ARP's average sales prices for
natural gas liquids before the effects of financial hedging were
$13.78 per barrel and $28.93 per barrel for the three months ended
June 30, 2015 and 2014, respectively, and $13.95 per barrel and
$32.15 per barrel for the six months ended June 30, 2015 and 2014,
respectively.
|
|
(8)
|
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 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, lease operating
expenses per Mcfe were $1.34 per Mcfe ($1.75 per Mcfe for total
production costs) and $1.23 per Mcfe ($1.74 per Mcfe for total
production costs) for the three months ended June 30, 2015 and
2014, respectively, and $1.34 per Mcfe ($1.77 per Mcfe for total
production costs) and $1.16 per Mcfe ($1.70 per Mcfe for total
production costs) for the six months ended June 30, 2015 and 2014,
respectively.
|
ATLAS RESOURCE
PARTNERS, L.P.
|
CAPITALIZATION
INFORMATION
|
(unaudited; in
thousands)
|
|
|
June
30,
2015
|
|
December 31,
2014
|
Total debt
|
$ 1,491,612
|
|
$ 1,394,460
|
Less:
Cash
|
(607)
|
|
(15,247)
|
Total net
debt/(cash)
|
1,491,005
|
|
1,379,213
|
|
|
|
|
Partners'
capital
|
924,301
|
|
947,537
|
|
|
|
|
Total
capitalization
|
$ 2,415,306
|
|
$ 2,326,750
|
|
|
|
|
Ratio of net debt to
capitalization
|
0.62x
|
|
0.59x
|
ATLAS RESOURCE
PARTNERS, L.P.
|
CAPITAL
EXPENDITURE DATA
|
(unaudited; in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Maintenance capital
expenditures (1)
|
$ 13,905
|
|
$ 13,100
|
|
$ 29,332
|
|
$ 23,900
|
Expansion capital
expenditures
|
13,088
|
|
41,618
|
|
40,159
|
|
70,749
|
Total
|
$ 26,993
|
|
$ 54,718
|
|
$ 69,491
|
|
$ 94,649
|
|
|
|
|
|
|
|
|
(1)
|
Oil and gas assets
naturally decline in future periods and, as such, ARP recognizes
the estimated capitalized cost of stemming such decline in
production margin for the purpose of stabilizing its Distributable
Cash Flow and cash distributions, which it refers to as maintenance
capital expenditures. ARP calculates the estimate of maintenance
capital expenditures by first multiplying its forecasted future
full year production margin by its expected aggregate production
decline of proved developed producing wells. Maintenance capital
expenditures are then the estimated capitalized cost of wells that
will generate an estimated first year margin equivalent to the
production margin decline, assuming such wells are connected on the
first day of the calendar year. ARP does not incur specific capital
expenditures expressly for the purpose of maintaining or increasing
production margin, but such amounts are a hypothetical subset of
wells it expects to drill in future periods, including Marcellus
Shale, Utica Shale, Mississippi Lime and Marble Falls wells, on
undeveloped acreage already leased. Estimated capitalized cost of
wells included within maintenance capital expenditures are also
based upon relevant factors, including utilization of public
forward commodity exchange prices, current estimates for regional
pricing differentials, estimated labor and material rates and other
production costs. Estimates for maintenance capital expenditures in
the current year are the sum of the estimate calculated in the
prior year plus estimates for the decline in production margin from
wells connected during the current year and production acquired
through acquisitions. ARP considers expansion capital expenditures
to be any capital expenditure costs expended that are not
maintenance capital expenditures – generally, this will include
expenditures to increase, rather than maintain, production margin
in future periods, as well as land, gathering and processing, and
other non-drilling capital expenditures.
|
ATLAS RESOURCE
PARTNERS, L.P.
|
Financial
Information
|
(unaudited; in
thousands, except per unit amounts)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
Reconciliation of
net income (loss) to non-GAAP
measures(1):
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income
(loss)
|
$ (46,810)
|
|
$ (19,379)
|
|
$ 40,762
|
|
$ (29,443)
|
Acquisition and related
costs
|
1,710
|
|
8,791
|
|
3,881
|
|
11,170
|
Depreciation, depletion
and amortization
|
42,494
|
|
59,680
|
|
85,485
|
|
111,499
|
Amortization of
deferred finance costs
|
3,538
|
|
2,042
|
|
10,737
|
|
3,854
|
Non-cash stock
compensation expense
|
863
|
|
2,009
|
|
4,209
|
|
4,354
|
Maintenance capital
expenditures(2)
|
(13,905)
|
|
(10,650)
|
|
(29,332)
|
|
(21,150)
|
Preferred unit
distributions
|
(4,253)
|
|
(4,424)
|
|
(8,338)
|
|
(8,823)
|
(Gain) loss on asset
sales and disposal
|
(97)
|
|
(9)
|
|
(86)
|
|
1,594
|
Cash settlements on
commodity derivative contracts(3)
|
14,922
|
|
–
|
|
30,125
|
|
–
|
Unrealized (gain) loss
on mark-to-market derivatives
|
26,944
|
|
–
|
|
(78,641)
|
|
–
|
Other
|
(5)
|
|
5
|
|
(17)
|
|
2
|
Distributable cash
flow attributable to limited partners
and the general partner(1)
|
$ 25,401
|
|
$ 38,065
|
|
$ 58,785
|
|
$ 73,057
|
|
|
|
|
|
|
|
|
Supplemental
Adjusted EBITDA and Distributable Cash Flow Summary:
|
Gas and oil production
margin
|
$ 69,047
|
|
$ 65,115
|
|
$ 143,001
|
|
$ 126,847
|
Well construction and
completion margin
|
2,211
|
|
2,130
|
|
5,296
|
|
8,571
|
Administration and
oversight margin
|
547
|
|
4,166
|
|
1,806
|
|
5,895
|
Well services
margin
|
3,963
|
|
3,939
|
|
8,389
|
|
6,936
|
Gathering and
processing margin
|
(339)
|
|
(515)
|
|
(572)
|
|
(460)
|
Cash general and
administrative expenses(4)
|
(10,714)
|
|
(10,515)
|
|
(22,332)
|
|
(22,246)
|
Other, net
|
22
|
|
40
|
|
43
|
|
84
|
Adjusted
EBITDA(1)
|
64,737
|
|
64,360
|
|
135,631
|
|
125,627
|
Cash interest
expense(5)
|
(21,178)
|
|
(11,221)
|
|
(39,176)
|
|
(22,597)
|
Preferred unit
distributions
|
(4,253)
|
|
(4,424)
|
|
(8,338)
|
|
(8,823)
|
Maintenance capital
expenditures(2)
|
(13,905)
|
|
(10,650)
|
|
(29,332)
|
|
(21,150)
|
Distributable Cash
Flow attributable to limited partners and the general
partner(1)
|
$ 25,401
|
|
$ 38,065
|
|
$ 58,785
|
|
$ 73,057
|
|
|
|
|
|
|
|
|
Discretionary
adjustments considered by the Board of Directors of the General
Partner in the determination of quarterly cash
distributions:
|
Net cash from
acquisitions from the effective date through closing
date(6)
|
−
|
|
14,791
|
|
−
|
|
19,988
|
Distributable Cash
Flow with discretionary adjustments
by the Board of Directors of the General
Partner(7)
|
$ 25,401
|
|
$ 52,856
|
|
$ 58,785
|
|
$ 93,045
|
|
|
|
|
|
|
|
|
Distributions
Paid(8)
|
$ 30,555
|
|
$ 51,469
|
|
$ 59,038
|
|
$ 92,801
|
per limited
partner unit
|
$
0.325
|
|
$
0.583
|
|
$
0.650
|
|
$
1.163
|
|
|
|
|
|
|
|
|
Excess (shortfall)
of distributable cash flow with discretionary adjustments by the
Board of Directors of the General Partner after distributions to
unitholders(9)
|
$
(5,154)
|
|
$
1,387
|
|
$
(253)
|
|
$
244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Although not
prescribed under generally accepted accounting principles ("GAAP"),
ARP's management believes the presentation of EBITDA, Adjusted
EBITDA and Distributable Cash Flow ("DCF") is relevant and useful
because it helps ARP's investors understand its operating
performance, allows for easier comparison of its results with other
master limited partnerships ("MLP"), and is a critical component in
the determination of quarterly cash distributions. As a MLP, ARP 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. ARP 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
ARP's 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 the ARP's management and by external
users of ARP's financial statements such as investors, lenders
under ARP's credit facility, research analysts, rating agencies and
others to assess its:
-
Operating performance as compared to other publicly traded
partnerships and other companies in the upstream energy sector,
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;
-
The viability of potential acquisitions and other capital
expenditure projects; and
-
Ability to comply with financial covenants in its Credit 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. ARP defines
EBITDA as net income (loss) plus the following
adjustments:
-
Interest expense;
-
Income tax expense; and
-
Depreciation, depletion and amortization
ARP defines Adjusted
EBITDA as EBITDA plus the following adjustments:
-
Asset impairments;
-
Acquisition and related costs;
-
Non-cash stock compensation;
-
(Gains)
losses on asset disposal;
-
Cash proceeds received from monetization of derivative
transactions;
-
Premiums paid on swaption derivative contracts;
-
Non-cash valuation
allowances; and
-
Other items
ARP 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. ARP defines DCF as Adjusted EBITDA less the following
adjustments:
-
Cash interest
expense;
-
Preferred unit cash distributions; and
-
Maintenance capital expenditures
|
(2)
|
Production from oil
and gas assets naturally declines in future periods and, as such,
ARP recognizes the estimated capitalized cost of stemming such
declines in production margin for the purpose of stabilizing its
DCF and cash distributions, which it refers to as maintenance
capital expenditures. ARP calculates the estimate of maintenance
capital expenditures by first multiplying its forecasted future
full year production margin by its expected aggregate production
decline of proved developed producing wells. Maintenance capital
expenditures are then the estimated capitalized cost of wells that
will generate an estimated first year margin equivalent to the
production margin decline, assuming such wells are connected on the
first day of the calendar year. ARP does not incur specific capital
expenditures expressly for the purpose of maintaining or increasing
production margin, but such amounts are a hypothetical subset of
wells it expects to drill in future periods, including Marcellus
Shale, Utica Shale, Mississippi Lime, and Marble Falls wells, on
undeveloped acreage already leased. Estimated capitalized cost of
wells included within maintenance capital expenditures are also
based upon relevant factors, including utilization of public
forward commodity exchange prices, current estimates for regional
pricing differentials, estimated labor and material rates and other
production costs. Estimates for maintenance capital expenditures in
the current year are the sum of the estimate calculated in the
prior year plus estimates for the decline in production margin from
wells connected during the current year and production acquired
through acquisitions. ARP considers expansion capital expenditures
to be any capital expenditure costs expended that are not
maintenance capital expenditures – generally, this will include
expenditures to increase, rather than maintain, production margin
in future periods, as well as land, gathering and processing, and
other non-drilling capital expenditures
|
(3)
|
Includes cash
settlements on commodity derivative contracts not previously
recorded within accumulated other comprehensive income following
the de-designation of hedges on January 1, 2015
|
(4)
|
Excludes non-cash
stock compensation expense and certain acquisition and related
costs
|
(5)
|
Excludes non-cash
amortization of deferred financing costs
|
(6)
|
These amounts reflect
net cash proceeds received from the respective effective date
through the respective closing date of assets acquired, less
estimated and pro forma amounts of maintenance capital expenditures
and financing costs. The management of ARP believes these amounts
are critical in its evaluation of DCF and cash distributions for
the period. Under GAAP, such amounts are characterized as purchase
price adjustments and are reflected in the net purchase price paid
for the acquired assets, rather than reflected as components of net
income or loss for the period. For the three months ended June 30,
2014, such amounts include net cash generated by the GeoMet assets
from April 1, 2014 to May 11, 2014, and the Rangely assets from
April 1, 2014 to June 30, 2014 of $17.6 million, less pro forma
interest expense of $0.4 million and estimated maintenance capital
expenditures of $2.4 million. For the six months ended June 30,
2014, such amounts include net cash generated by the GeoMet assets
from January 1, 2014 to May 11, 2014, and the Rangely assets from
April 1, 2014 to June 30, 2014 of $23.1 million, less pro forma
interest expense of $0.4 million and estimated maintenance capital
expenditures of $2.7 million
|
(7)
|
Including the
discretionary adjustments by the Board of Directors of ARP's
General Partner in the determination of quarterly cash
distributions, Adjusted EBITDA would have been $82.0 million and
$148.8 million for the three and six months ended June 30, 2014,
respectively
|
(8)
|
Represents the cash
distributions declared for the respective period and paid by ARP
within 45 days after the end of each month within each quarter,
based upon the distributable cash flow generated during the
respective period
|
(9)
|
ARP seeks to at least
maintain its current cash distribution in future quarterly periods,
and expects to only increase such cash distributions when future
Distributable Cash Flow amounts allow for it and are expected to be
sustained. ARP's determination of quarterly cash distributions and
its resulting determination of the amount of excess (shortfall)
those cash distributions generate in comparison to Distributable
Cash Flow are based upon its assessment of numerous factors,
including but not limited to future commodity price and interest
rate movements, variability of well productivity, weather effects,
and financial leverage. ARP also considers its historical trailing
four quarters of excess or shortfalls and future forecasted excess
or shortfalls that its cash distributions generate in comparison to
Distributable Cash Flow due to the variability of its Distributable
Cash Flow generated each quarter, which could cause it to have more
or less excess (shortfalls) generated from quarter to
quarter
|
|
|
|
|
|
|
|
|
|
|
|
ATLAS RESOURCE
PARTNERS, L.P.
|
Hedge Position
Summary
|
(as of August 6,
2015)
|
|
Natural
Gas
|
|
Fixed Price
Swaps
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
mmbtu)(a)
|
|
(mmbtus)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 4.19
|
|
26,832,246
|
|
|
|
2016
|
|
$ 4.23
|
|
53,546,320
|
|
|
|
2017
|
|
$ 4.22
|
|
49,920,000
|
|
|
|
2018
|
|
$ 4.17
|
|
40,800,000
|
|
|
|
2019
|
|
$ 4.02
|
|
15,960,000
|
|
|
|
|
|
|
|
|
|
|
|
Costless
Collars
|
|
|
|
|
|
|
|
|
|
Average
|
|
Average
|
|
|
|
Production
Period
|
|
Floor
Price
|
|
Ceiling
Price
|
|
Volumes
|
|
Ended December
31,
|
|
(per
mmbtu)(a)
|
|
(per
mmbtu)(a)
|
|
(mmbtus)(a)
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 4.16
|
|
$ 5.00
|
|
1,560,000
|
|
|
|
|
|
|
|
|
|
Put Options –
Drilling
Partnerships
|
|
|
|
|
|
|
|
|
|
Average
|
|
Average
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
mmbtu)(a)
|
|
(mmbtus)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 4.00
|
|
720,000
|
|
|
|
2016
|
|
$ 4.15
|
|
1,440,000
|
|
|
|
|
|
|
|
|
|
|
|
WAHA Basis
Swaps
|
|
|
|
|
|
|
|
|
|
Average
|
|
Average
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
mmbtu)(a)
|
|
(mmbtus)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ (0.0821)
|
|
3,600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude
Oil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Price
Swaps
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
bbl)(a)
|
|
(bbls)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 87.65
|
|
966,000
|
|
|
|
2016
|
|
$ 81.47
|
|
1,557,000
|
|
|
|
2017
|
|
$ 77.28
|
|
1,140,000
|
|
|
|
2018
|
|
$ 76.28
|
|
1,080,000
|
|
|
|
2019
|
|
$ 68.37
|
|
540,000
|
|
|
|
|
|
|
|
|
|
|
|
Costless
Collars
|
|
|
|
|
|
|
|
|
|
Average
|
|
Average
|
|
|
|
Production
Period
|
|
Floor
Price
|
|
Ceiling
Price
|
|
Volumes
|
|
Ended December
31,
|
|
(per
bbl)(a)
|
|
(per
bbl)(a)
|
|
(bbls)(a)
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 83.85
|
|
$ 110.65
|
|
9,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas
Liquids
|
|
|
|
|
|
|
|
|
|
|
|
Crude
Oil Fixed Price Swaps
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
bbl)(a)
|
|
(bbls)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$ 85.65
|
|
84,000
|
|
|
|
2017
|
|
$ 83.78
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
Mt Belvieu Propane
Swaps
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
gallon)
|
|
(bbls)(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 1.0161
|
|
96,000
|
|
|
|
|
|
|
|
|
|
Mt Belvieu Butane
Swaps
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
gallon)
|
|
(bbls)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 1.2481
|
|
21,000
|
|
|
|
|
|
|
|
|
Mt Belvieu
Iso-Butane Swaps
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
gallon)
|
|
(bbls)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 1.2631
|
|
21,000
|
|
|
|
|
|
|
|
|
Mt Belvieu Natural
Gasoline Swaps
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Production
Period
|
|
Fixed
Price
|
|
Volumes
|
|
|
|
Ended December
31,
|
|
(per
gallon)
|
|
(bbls)(a)
|
|
|
|
|
|
|
|
|
|
|
|
2015(b)
|
|
$ 1.9446
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
"mmbtu" represents
million metric British thermal units.; "bbl" represents
barrel.
|
(b)
|
Reflects hedges
covering the last six months of 2015.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/atlas-resource-partners-lp-reports-operating-and-financial-results-for-the-second-quarter-2015-300125337.html
SOURCE Atlas Resource Partners, L.P.