Atlas Resource Partners, L.P. (NYSE:ARP)
(“ARP” or the “Partnership”) reported operating
and financial results for the first quarter 2016.
Daniel Herz, Chief Executive Officer of ARP,
stated, “The energy environment remains extremely challenging, and
ARP is not immune. We continue to work to reduce ARP’s outstanding
debt. I am pleased with how our assets have performed over the last
quarter, and appreciate all of our employee’s dedication to get as
much out of our assets as possible, while at the same time
minimizing our capital and operating expenses.”
- First quarter 2016 Adjusted EBITDA, a non-GAAP measure, was
$43.7 million(1), compared to $57.8 million for the fourth quarter
2015, and $70.9 million for the prior year first quarter. The
decrease in Adjusted EBITDA compared to the prior quarter and to
the prior year financial quarter was primarily due to declines in
production volume and commodity prices during the respective
periods, and the lower amount of funds raised within our 2015 Eagle
Ford drilling partnership program.
- 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. For the first quarter 2016, ARP paid common unit cash
distributions totaling approximately $0.025 per limited partner
unit.
- On a GAAP basis, net income was $12.8 million for the first
quarter 2016 compared with net loss of $288.7 million for the
fourth quarter 2015 and net income of $87.6 million for the prior
year first quarter. As compared to the previous quarter which
recorded a loss due to a non-cash impairment charge, net income for
the first quarter 2016 was principally generated from operating
cash flow and a gain on the early extinguishment of debt at a
discount to par value.
(1) A reconciliation of GAAP net income (loss) to Adjusted
EBITDA and Net Free Cash Flow is provided in the financial tables
of this release. Please see footnote 1 to the Financial Information
table of this release.
E&P Operating Results
- 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 the
Partnership’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.
Hedge Positions
- A summary of ARP's derivative positions as of May 16, 2016 is
provided in the financial tables of this release. 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, the
Partnership received approximately $48.7 million of cash from
realized natural gas and oil hedge positions.
Corporate Expenses & Capital
Position
- Cash general and administrative expense was $16.8 million for
the first quarter 2016, $1.2 million higher than the fourth quarter
2015 and $5.2 million higher than the prior year first quarter. The
increase compared with prior periods was due primarily to lower
capitalized selling and administrative costs associated with lower
funds raised in our 2015 drilling partnership program and the
timing of certain seasonal costs.
- Cash interest expense was $23.6 million for the first quarter
2016, $1.8 million higher than the fourth quarter 2015 and $5.6
million higher than the prior year first quarter. The increase
compared with the prior year period was primarily due to the $250
million second lien financing entered into by ARP in February 2015
and a higher level of amounts outstanding on the revolving credit
facility.
- At March 31, 2016, ARP had $1.553 billion of total debt,
including $672.0 million outstanding under its revolving credit
facility. On May 10, 2016, ARP entered into a ninth amendment to
its revolving credit facility due July 2018 to waive compliance
with certain financial covenants as of March 31, 2016, which
automatically waived compliance with similar covenants under its
term loan facility due February 2020. Based on the terms of the
amendment, ARP classified $906.2 million of outstanding amounts
under these facilities, net of certain deferring financing costs
and unamortized discounts, as current portion of long term debt
within its consolidated balance sheet as of March 31, 2016.
ARP 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 the Partnership’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 Atlas Resource website and
telephonically beginning at approximately 12:30 p.m. ET on May 17,
2016 by dialing 855-859-2056, passcode: 10307133.
Additional details regarding ARP's operations
and financial results are available in its first quarter 2016
report on Form 10-Q, which has been filed with the Securities and
Exchange Commission and is available at the Investor Relations
section of the Partnership's website or at www.SEC.gov.
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), 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 its website at
www.atlasresourcepartners.com, or contact Investor Relations at
InvestorRelations@atlasenergy.com.
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.; 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 its 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. (“ARP”) 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. ARP 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, and ARP’s
plans, objectives, expectations, 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
level of indebtedness, potential changes to ARP’s 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 potential balance sheet
and other 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.
ATLAS RESOURCE PARTNERS,
L.P.CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited; in thousands, except per unit
data)
|
Three Months Ended |
|
March 31, |
|
|
2016 |
|
|
|
2015 |
|
Revenues: |
|
|
|
Gas and oil production |
$ |
48,492 |
|
|
$ |
104,249 |
|
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 |
|
46,120 |
|
|
|
105,585 |
|
Other, net |
|
114 |
|
|
|
33 |
|
Total revenues |
|
103,208 |
|
|
|
243,589 |
|
|
|
|
|
Costs and expenses: |
|
|
|
Gas and oil production |
|
35,842 |
|
|
|
45,498 |
|
Well construction and
completion |
|
1,826 |
|
|
|
20,570 |
|
Gathering and processing |
|
2,279 |
|
|
|
2,417 |
|
Well services |
|
2,178 |
|
|
|
2,198 |
|
General and administrative |
|
17,077 |
|
|
|
17,135 |
|
Depreciation, depletion and
amortization |
|
30,045 |
|
|
|
42,991 |
|
Total costs and expenses |
|
89,247 |
|
|
|
130,809 |
|
|
|
|
|
Operating income |
|
13,961 |
|
|
|
112,780 |
|
|
|
|
|
Gain
(loss) on asset sales and disposal |
|
9 |
|
|
|
(11 |
) |
Gain on
early extinguishment of debt, net |
|
26,498 |
|
|
|
— |
|
Interest
expense |
|
(27,705 |
) |
|
|
(25,197 |
) |
|
|
|
|
Net income |
|
12,763 |
|
|
|
87,572 |
|
|
|
|
|
Preferred limited partner
dividends |
|
(3,648 |
) |
|
|
(3,653 |
) |
Net
income attributable to common limited partners and the general
partner |
$ |
9,115 |
|
|
$ |
83,919 |
|
|
|
|
|
Allocation of net income attributable to common limited
partners and the general partner: |
|
|
|
|
|
|
|
General partner’s interest |
$ |
182 |
|
|
$ |
3,575 |
|
Common limited partners’
interest |
|
8,933 |
|
|
|
80,344 |
|
Net income attributable to common
limited partners and the general partner |
$ |
9,115 |
|
|
$ |
83,919 |
|
|
|
|
|
Net income attributable to common limited partners per
unit: |
Basic |
$ |
0.09 |
|
|
$ |
0.93 |
|
Diluted |
$ |
0.09 |
|
|
$ |
0.91 |
|
|
|
|
|
Weighted average common limited partner units
outstanding: |
Basic |
|
102,403 |
|
|
|
85,529 |
|
Diluted |
|
102,696 |
|
|
|
90,010 |
|
|
|
|
|
|
|
|
|
ATLAS RESOURCE PARTNERS, L.P.CONSOLIDATED BALANCE
SHEETS(unaudited; in thousands)
|
|
March 31, |
|
December 31, |
ASSETS |
|
|
2016 |
|
|
|
2015 |
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
19,285 |
|
|
$ |
1,353 |
|
Accounts receivable |
|
|
57,152 |
|
|
|
63,367 |
|
Advances to affiliates |
|
|
10,997 |
|
|
|
— |
|
Current portion of derivative
asset |
|
|
159,745 |
|
|
|
159,460 |
|
Subscriptions receivable |
|
|
— |
|
|
|
19,877 |
|
Prepaid expenses and other |
|
|
16,635 |
|
|
|
22,935 |
|
Total current assets |
|
|
263,814 |
|
|
|
266,992 |
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
1,175,045 |
|
|
|
1,191,611 |
|
Goodwill
and intangible assets, net |
|
|
14,062 |
|
|
|
14,095 |
|
Long-term derivative asset |
|
|
195,074 |
|
|
|
198,262 |
|
Other
assets, net |
|
|
31,502 |
|
|
|
28,989 |
|
Total assets |
|
$ |
1,679,497 |
|
|
$ |
1,699,949 |
|
|
|
|
|
|
LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT) |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
46,120 |
|
|
$ |
49,249 |
|
Advances from affiliates |
|
|
— |
|
|
|
9,924 |
|
Liabilities associated with
drilling contracts |
|
|
— |
|
|
|
21,483 |
|
Accrued well drilling and
completion costs |
|
|
4,053 |
|
|
|
26,914 |
|
Distribution payable |
|
|
4,337 |
|
|
|
4,334 |
|
Accrued liabilities |
|
|
31,082 |
|
|
|
50,096 |
|
Current portion of long-term
debt |
|
|
906,156 |
|
|
|
— |
|
Total current liabilities |
|
|
991,748 |
|
|
|
162,000 |
|
|
|
|
|
|
Long-term debt, less current portion, net |
|
|
647,604 |
|
|
|
1,503,427 |
|
Asset
retirement obligations and other |
|
|
123,626 |
|
|
|
119,150 |
|
|
|
|
|
|
|
|
|
|
|
Partners’ capital (deficit): |
|
|
|
|
General partner’s interest |
|
|
(30,989 |
) |
|
|
(31,054 |
) |
Preferred limited partners’
interests |
|
|
188,097 |
|
|
|
188,739 |
|
Common limited partners’
interests |
|
|
(257,625 |
) |
|
|
(262,864 |
) |
Class C common limited partner
warrants |
|
|
1,176 |
|
|
|
1,176 |
|
Accumulated other comprehensive
income |
|
|
15,860 |
|
|
|
19,375 |
|
Total partners’ deficit |
|
|
(83,481 |
) |
|
|
(84,628 |
) |
Total liabilities and
partners’ deficit |
|
$ |
1,679,497 |
|
|
$ |
1,699,949 |
|
|
|
|
|
|
|
|
|
|
ATLAS RESOURCE PARTNERS,
L.P.Financial and Operating
Highlights(unaudited)
|
Three Months Ended |
|
March 31, |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
Net income
attributable to common limited partners per unit -
basic |
$ |
0.09 |
|
|
$ |
0.93 |
|
|
|
|
|
Cash
distributions paid per unit(1) |
$ |
0.025 |
|
|
$ |
0.325 |
|
|
|
|
|
Production
revenues (in thousands): |
|
|
|
Natural gas |
$ |
31,284 |
|
|
$ |
66,541 |
|
Oil |
|
15,312 |
|
|
|
32,385 |
|
Natural gas liquids |
|
1,896 |
|
|
|
5,323 |
|
Total production revenues |
$ |
48,492 |
|
|
$ |
104,249 |
|
|
|
|
|
Production
volume:(2)(3) |
|
|
|
Appalachia: (4) |
|
|
|
Natural gas (Mcfd) |
|
31,545 |
|
|
|
35,158 |
|
Oil (Bpd) |
|
295 |
|
|
|
359 |
|
Natural gas liquids (Bpd) |
|
290 |
|
|
|
240 |
|
Total (Mcfed) |
|
35,054 |
|
|
|
38,752 |
|
Coal-bed Methane: (4) |
|
|
|
Natural gas (Mcfd) |
|
120,549 |
|
|
|
134,133 |
|
Oil (Bpd) |
|
— |
|
|
|
— |
|
Natural gas liquids (Bpd) |
|
— |
|
|
|
— |
|
Total (Mcfed) |
|
120,549 |
|
|
|
134,133 |
|
Barnett/Marble Falls: |
|
|
|
Natural gas (Mcfd) |
|
36,821 |
|
|
|
49,617 |
|
Oil (Bpd) |
|
322 |
|
|
|
749 |
|
Natural gas liquids (Bpd) |
|
1,457 |
|
|
|
2,274 |
|
Total (Mcfed) |
|
47,497 |
|
|
|
67,755 |
|
Rangely: |
|
|
|
Natural gas (Mcfd) |
|
— |
|
|
|
— |
|
Oil (Bpd) |
|
2,354 |
|
|
|
2,361 |
|
Natural gas liquids (Bpd) |
|
256 |
|
|
|
253 |
|
Total (Mcfed) |
|
15,657 |
|
|
|
15,680 |
|
Eagle Ford: |
|
|
|
Natural gas (Mcfd) |
|
389 |
|
|
|
500 |
|
Oil (Bpd) |
|
1,362 |
|
|
|
1,550 |
|
Natural gas liquids (Bpd) |
|
81 |
|
|
|
106 |
|
Total (Mcfed) |
|
9,049 |
|
|
|
10,434 |
|
Mid-Continent:(4) |
|
|
|
Natural gas (Mcfd) |
|
5,246 |
|
|
|
7,931 |
|
Oil (Bpd) |
|
231 |
|
|
|
514 |
|
Natural gas liquids (Bpd) |
|
425 |
|
|
|
615 |
|
Total (Mcfed) |
|
9,178 |
|
|
|
14,709 |
|
Total Production: (3) |
|
|
|
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 |
|
|
|
|
|
Average sales
prices: (3) |
|
|
|
Natural gas (per Mcf) (5) |
$ |
3.41 |
|
|
$ |
3.58 |
|
Oil (per Bbl)(6) |
$ |
77.16 |
|
|
$ |
80.81 |
|
Natural gas liquids (per Bbl)
(7) |
$ |
8.31 |
|
|
$ |
22.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs:(3)(8) |
|
|
|
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 |
|
|
|
|
|
Depletion per
Mcfe(3) |
$ |
1.23 |
|
|
$ |
1.58 |
|
|
|
|
|
|
|
|
|
(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, West Virginia (excluding
the Cedar Bluff area), and the Chattanooga (Tennessee) and New
Albany (Indiana) Shales; 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 and the Arkoma Basin in eastern Oklahoma;
Mid-Continent includes ARP’s production located in the Mississippi
Lime and Hunton plays and the Niobrara Shale (northeastern
Colorado).
(5) 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. 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 $3.37 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.
(6) 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.
(7) 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.
(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
$1.23 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.
ATLAS RESOURCE PARTNERS,
L.P.CAPITALIZATION
INFORMATION (unaudited; in thousands)
|
March 31,2016 |
|
December 31, 2015 |
Total
debt(1) |
$ |
1,553,760 |
|
|
$ |
1,503,427 |
|
Less:
Cash |
|
(19,285 |
) |
|
|
(1,353 |
) |
Total net
debt/(cash) |
|
1,534,475 |
|
|
|
1,502,074 |
|
|
|
|
|
Partners’
deficit |
|
(83,481 |
) |
|
|
(84,628 |
) |
|
|
|
|
Total
capitalization |
$ |
1,450,994 |
|
|
$ |
1,417,446 |
|
|
|
|
|
Ratio of
net debt to capitalization |
|
1.06 |
x |
|
|
1.06 |
x |
|
|
|
|
|
|
|
|
(1) Total debt is net of deferred financing
costs and unamortized discounts totaling $35.9 million and $38.6
million at March 31, 2016 and December 31, 2015,
respectively.
ATLAS RESOURCE PARTNERS,
L.P.Financial
Information(unaudited; in thousands, except per
unit amounts)
|
Three Months Ended |
|
March 31, |
Reconciliation of net income to non-GAAP
measures(1): |
|
2016 |
|
|
2015 |
|
Net income |
$ |
12,763 |
|
|
$ |
87,572 |
|
Acquisition and related costs |
|
307 |
|
|
|
2,171 |
|
Depreciation, depletion and amortization |
|
30,045 |
|
|
|
42,991 |
|
Amortization of deferred finance costs |
|
4,100 |
|
|
|
7,199 |
|
Non-cash stock compensation expense |
|
(47 |
) |
|
|
3,346 |
|
Capital expenditures |
|
(13,170 |
) |
|
|
(42,498 |
) |
Preferred unit distributions |
|
(3,654 |
) |
|
|
(4,085 |
) |
(Gain) loss on asset sales and disposal |
|
(9 |
) |
|
|
11 |
|
Gain on early extinguishment of debt |
|
(26,498 |
) |
|
|
— |
|
Cash settlements on commodity derivative contracts(2) |
|
45,622 |
|
|
|
15,203 |
|
Gain on mark-to-market derivatives |
|
(46,120 |
) |
|
|
(105,585 |
) |
Distributions paid to common limited partners(3) |
|
(2,639 |
) |
|
|
(28,483 |
) |
Other |
|
(93 |
) |
|
|
(12 |
) |
Net Free Cash Flow(1) |
$ |
607 |
|
|
$ |
(22,170 |
) |
|
|
|
|
Supplemental Adjusted EBITDA and Net Free Cash Flow
Summary: |
Gas and oil production
margin |
$ |
58,272 |
|
|
$ |
73,954 |
|
Well construction and
completion margin |
|
274 |
|
|
|
3,085 |
|
Administration and
oversight margin |
|
455 |
|
|
|
1,259 |
|
Well services
margin |
|
2,254 |
|
|
|
4,426 |
|
Gathering and
processing margin |
|
(784 |
) |
|
|
(233 |
) |
Cash general and
administrative expenses(4) |
|
(16,817 |
) |
|
|
(11,618 |
) |
Other, net |
|
21 |
|
|
|
21 |
|
Adjusted
EBITDA(1) |
|
43,675 |
|
|
|
70,894 |
|
Cash interest
expense(5) |
|
(23,605 |
) |
|
|
(17,998 |
) |
Capital
expenditures |
|
(13,170 |
) |
|
|
(42,498 |
) |
Preferred unit
distributions |
|
(3,654 |
) |
|
|
(4,085 |
) |
Free Cash Flow before
distributions paid to common limited partners(1) |
$ |
3,246 |
|
|
$ |
6,313 |
|
Distributions paid to
common limited partners(3) |
|
(2,639 |
) |
|
|
(28,483 |
) |
Net Free Cash
Flow (1) |
$ |
607 |
|
|
$ |
(22,170 |
) |
|
|
|
|
Distribution per
limited partner unit |
$ |
0.025 |
|
|
$ |
0.325 |
|
|
|
|
|
|
|
|
|
(1) Although not prescribed under generally accepted accounting
principles (“GAAP”), ARP’s management believes the presentation of
Adjusted EBITDA, Free Cash Flow before distributions paid to common
limited partners (“FCF”), and Net Free Cash Flow is relevant and
useful because it helps ARP’s investors understand its operating
performance 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 FCF. Adjusted EBITDA and Net Free
Cash Flow 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
Adjusted EBITDA, FCF, and Net Free Cash Flow 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. Adjusted EBITDA, FCF, and Net Free Cash
Flow 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 Amended
Credit Facility, which is calculated based upon Adjusted
EBITDA.
FCF 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 total 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 sales and disposal;
- Cash proceeds received from monetization of derivative
transactions;
- Premiums paid on swaption derivative contracts;
- Non-cash valuation allowances; and
- Other items.
ARP adjusts FCF 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 FCF as Adjusted EBITDA
less the following adjustments:
- Cash interest expense;
- Preferred unit cash distributions; and
- Total capital expenditures.
ARP defines Net Free Cash Flow as FCF less distributions paid to
common unit holders.
(2) 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.
(3) 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.
(4) Excludes non-cash stock compensation expense and certain
acquisition and related costs.
(5) Excludes non-cash amortization of deferred financing
costs.
ATLAS RESOURCE PARTNERS,
L.P.Hedge Position Summary(as of
May 16, 2016)
Natural Gas
Fixed Price Swaps |
|
|
|
|
|
|
|
Average |
|
|
|
Production Period |
|
Fixed Price |
|
Volumes |
|
Ended December 31, |
|
(per mmbtu)(a) |
|
(mmbtus)(a) |
|
|
|
|
|
|
|
2016(b) |
|
$ |
4.23 |
|
|
40,354,500 |
|
2017 |
|
$ |
4.22 |
|
|
50,120,000 |
|
2018 |
|
$ |
4.17 |
|
|
40,300,000 |
|
2019 |
|
$ |
4.02 |
|
|
15,860,000 |
|
|
|
|
|
|
|
|
|
Put
Options – Drilling Partnerships |
|
|
|
|
|
|
|
|
Average |
|
Average |
|
|
Production Period |
|
Fixed Price |
|
Volumes |
|
|
Ended December 31, |
|
(per mmbtu)(a) |
|
(mmbtus)(a) |
|
|
|
|
|
|
|
|
|
2016(b) |
|
$ |
4.15 |
|
|
1,080,000 |
|
|
|
|
|
|
|
|
|
Crude Oil
Fixed Price Swaps |
|
|
|
|
|
|
Average |
|
|
Production Period |
|
Fixed Price |
|
Volumes |
Ended December 31, |
|
(per bbl)(a) |
|
(bbls)(a) |
|
|
|
|
|
2016(b) |
|
$ |
81.68 |
|
|
1,230,800 |
2017 |
|
$ |
77.61 |
|
|
1,200,000 |
2018 |
|
$ |
76.28 |
|
|
1,080,000 |
2019 |
|
$ |
68.37 |
|
|
540,000 |
|
|
|
|
|
|
|
_______________________________________________________________
(a) |
“mmbtu” represents million
metric British thermal units; “bbl” represents barrel. |
(b) |
Reflects hedges covering
the remaining 9 months of unrealized production in 2016 (2Q – 4Q
2016). |
|
|
CONTACT:
Matthew Skelly
Vice President – Head of Investor Relations
Atlas Resource Partners, L.P.
(877) 280-2857
(215) 405-2718 (fax)