Atlas Energy Group, LLC Reports Operating And Financial Results For The Third Quarter 2015
PITTSBURGH, Nov. 9, 2015 /PRNewswire/ -- Atlas Energy Group, LLC (NYSE: ATLS) ("Atlas Energy", the "Company" or "ATLS") today reported operating and financial results for the third quarter 2015.
- Atlas Energy's Distributable Cash Flow, a non-GAAP measure, was approximately $6.0 million(1), or $0.23 per common unit, in the third quarter 2015, compared to $5.0 million, or $0.19 per common unit, in the second quarter 2015. The increase in Distributable Cash Flow was in part due to a higher amount of cash received from the Company's investment in Lightfoot Capital Partners due to the distribution of funds from the prior sale of certain assets.
- Atlas Resource Partners, L.P. (NYSE: ARP), Atlas Energy's E&P subsidiary, paid monthly cash distributions totaling $0.325 per common limited partner unit for the third quarter 2015 at a distribution coverage ratio of approximately 0.9x. On October 28, 2015, ARP announced the September 2015 monthly distribution of $0.1083 per common unit ($1.30 per unit on an annualized basis), which will be paid on November 13, 2015 to unitholders of record as of November 9, 2015.
- ATLS received approximately $0.6 million in management fees and cash distributions during the third quarter 2015 from its E&P development subsidiary, Atlas Growth Partners, L.P. ("AGP"). AGP raised approximately $233 million in investor capital in its most recent fundraising which closed on June 30, 2015.
- ATLS received $1.4 million in cash distributions in the third quarter 2015 from Arc Logistics Partners, LP (NYSE: ARCX), a master limited partnership of which approximately 16% of its general partner is owned by ATLS through the Company's interest in Lightfoot Capital Partners. In October 2015, ARCX announced a quarterly cash distribution of $0.44 per common unit for the third quarter 2015, a 3.5% increase from the second quarter 2015 and 7.5% higher than the prior year comparable quarter.
- On a GAAP basis, net loss was $582.3 million for the third quarter 2015, compared with a loss of $59.5 million for the second quarter 2015 and a net loss of $4.3 million in the prior year third quarter. Net loss in the current period was principally due to non-cash expenses at ARP, specifically an asset impairment charge on certain of ARP's oil and gas properties due to recent declines in forward commodity prices, partially offset by the mark-to-market gains recognized in the current quarter 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 third quarter 2015 earnings release for additional details on its financial results.
ATLS Term Loan Refinancing
On August 10, 2015, ATLS entered into an agreement for a new term loan facility maturing in August 2020. The new facility refinanced the Company's existing term loan and had an initial balance of $82.7 million at an interest rate of LIBOR (floor of 1%) plus 7%. At September 30, 2015, $82.7 million was outstanding under the Term Loan Facility.
ARP's Third Quarter 2015 Highlights
- ARP's average net daily production for the third quarter 2015 was 264.2 million cubic feet equivalents per day ("Mmcfed"), as compared to 270.8 Mmcfed for the second quarter 2015. ARP's third quarter 2015 production was comprised of 82% natural gas, 11% oil and 7% natural gas liquids ("NGL"). ARP connected two Mississippi Lime wells during the third quarter, and now operates 27 wells in the Eagle Ford shale. ARP is currently connecting additional wells on its Eagle Ford position and expects oil volumes to increase into 2016 as a result of its activity.
- ARP's net realized price for natural gas including the effect of hedge positions was $3.30 per thousand cubic feet ("mcf") for the third quarter 2015, compared to $3.33/mcf for the second quarter 2015. Net realized oil prices including the effect of hedge positions averaged $88.42 per barrel ("bbl") for the third quarter 2015, compared to $83.19/bbl for the second quarter 2015. ARP was hedged approximately 71% on its natural gas production and approximately 100% on its oil production in the third quarter 2015.
- Lease operating expenses decreased 6% from the second quarter 2015 to $1.30/mcf, and overall production costs of $1.74/mcf in the third quarter 2015 were 22% lower than the prior year comparable quarter. The decrease in expenses is due to ARP's ongoing production cost-reduction efforts, namely focused on water disposal, compression and fuel costs.
- Investment partnership margin was approximately $12.0 million in the third quarter 2015, compared with $6.7 million for the second quarter 2015. The increase in investment partnership margin was due to increased deployment of partnership capital during the current quarter, which generated higher fee income, specifically Administration and Oversight Fees realized from the drilling of new investment program wells.
AGP's Third Quarter 2015 Highlights
AGP had net daily production of over 6,400 Mmcfed in the third quarter 2015, compared to average daily net production of approximately 2,800 Mmcfed in the second quarter 2015. AGP connected two additional wells in the Eagle Ford shale during the current quarter.
Corporate Expenses
- Cash general and administrative expense, excluding amounts attributable to AGP and ARP, was $2.6 million for the third quarter 2015, compared to $2.0 million for the second quarter 2015. The increase in expense from the prior quarter was due primarily to the timing of certain employee benefit costs. Please refer to the consolidating statements of operations provided in the financial tables of this release.
- Cash interest expense was $1.8 million for the third quarter 2015, compared to $2.3 million for the second quarter 2015. ATLS had approximately $82.7 million of debt on its consolidated balance sheet at September 30, 2015, and a cash position of approximately $14.3 million.
* * *
ATLS will be discussing its third quarter 2015 results on an investor call with management on Tuesday, November 10, 2015 at 9:00 a.m. Eastern Time. Interested parties are invited to access the live webcast 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 ARP website and telephonically beginning at approximately 1:00 p.m. ET on November 10, 2015 by dialing (855) 859-2056, passcode: 66843641.
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 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 our website at www.atlasenergy.com, or contact Investor Relations at [email protected].
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), 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 ARP's website at www.atlasresourcepartners.com, or contact Investor Relations at [email protected].
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; 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' and 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 ATLS assumes no obligation to update such statements, except as may be required by applicable law.
(1) A reconciliation of GAAP net income (loss) to Distributable Cash Flow is provided in the financial tables of this release. Please see footnote 61 to the Financial Information table of this release.
CONTACT: |
Brian J. Begley |
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Vice President - Investor Relations |
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Atlas Energy Group, LLC |
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(877) 280-2857 |
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(215) 405-2718 (fax) |
ATLAS ENERGY GROUP, LLC AND SUBSIDIARIES |
|||||||
COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(unaudited; in thousands, except per unit data) |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
September 30, |
September 30, |
||||||
Revenues: |
2015 |
2014 |
2015 |
2014 |
|||
Gas and oil production |
$ 94,612 |
$ 130,937 |
$ 300,249 |
$ 342,456 |
|||
Well construction and completion |
23,054 |
61,204 |
63,665 |
126,917 |
|||
Gathering and processing |
1,685 |
3,061 |
6,046 |
11,287 |
|||
Administration and oversight |
5,495 |
6,177 |
7,301 |
12,072 |
|||
Well services |
5,842 |
6,597 |
18,568 |
18,441 |
|||
Gain on mark-to-market derivatives |
131,777 |
— |
210,466 |
— |
|||
Other, net |
369 |
613 |
585 |
1,167 |
|||
Total revenues |
262,834 |
208,589 |
606,880 |
512,340 |
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Costs and expenses: |
|||||||
Gas and oil production |
42,300 |
52,004 |
131,908 |
134,590 |
|||
Well construction and completion |
20,046 |
53,221 |
55,361 |
110,363 |
|||
Gathering and processing |
2,473 |
3,214 |
7,406 |
11,900 |
|||
Well services |
2,398 |
2,617 |
6,735 |
7,525 |
|||
General and administrative |
21,704 |
17,299 |
82,037 |
63,487 |
|||
Depreciation, depletion and amortization |
43,311 |
65,068 |
131,043 |
177,513 |
|||
Asset impairment |
679,537 |
— |
679,537 |
— |
|||
Total costs and expenses |
811,769 |
193,423 |
1,094,027 |
505,378 |
|||
Operating income (loss) |
(548,935) |
15,166 |
(487,147) |
6,962 |
|||
Loss on asset sales and disposal |
(362) |
(92) |
(276) |
(1,683) |
|||
Loss on extinguishment of debt |
(4,726) |
— |
(4,726) |
— |
|||
Interest expense |
(28,290) |
(19,423) |
(96,228) |
(51,474) |
|||
Net loss |
(582,313) |
(4,349) |
(588,377) |
(46,195) |
|||
Preferred unitholders' dividends |
(1,009) |
— |
(2,346) |
— |
|||
Loss attributable to non-controlling interests |
439,969 |
5,137 |
420,411 |
33,828 |
|||
Net income (loss) attributable to unitholders'/owner's interests |
$ (143,353) |
$ 788 |
$ (170,312) |
$ (12,367) |
|||
Allocation of net income (loss) attributable to unitholders'/owner's interests: |
|||||||
Portion applicable to owner's interest (period prior to the transfer of assets on February 27, 2015) |
$ — |
$ 788 |
$ (10,475) |
$ (12,367) |
|||
Portion applicable to unitholders' interest (period subsequent to the transfer of assets on February 27, 2015) |
(143,353) |
— |
(159,837) |
— |
|||
Net income (loss) attributable to unitholders' /owner's interests |
$ (143,353) |
$ 788 |
$ (170,312) |
$ (12,367) |
|||
Net income (loss) attributable to unitholders per common unit: |
|||||||
Basic |
$ (5.51) |
$ — |
$ (6.15) |
$ — |
|||
Diluted |
$ (5.51) |
$ — |
$ (6.15) |
$ — |
|||
Weighted average common units outstanding: |
|||||||
Basic |
26,011 |
— |
26,011 |
— |
|||
Diluted |
26,011 |
— |
26,011 |
— |
ATLAS ENERGY GROUP, LLC AND SUBSIDIARIES |
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COMBINED CONSOLIDATED BALANCE SHEETS |
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(unaudited; in thousands) |
||||
September 30, |
December 31, |
|||
ASSETS |
2015 |
2014 |
||
Current assets: |
||||
Cash and cash equivalents |
$ 54,950 |
$ 58,358 |
||
Accounts receivable |
91,706 |
115,290 |
||
Advances to affiliates |
− |
4,389 |
||
Current portion of derivative asset |
147,021 |
144,259 |
||
Subscriptions receivable |
23,054 |
32,398 |
||
Prepaid expenses and other |
26,022 |
26,789 |
||
Total current assets |
342,753 |
381,483 |
||
Property, plant and equipment, net |
1,659,358 |
2,419,289 |
||
Intangible assets, net |
515 |
691 |
||
Goodwill, net |
13,639 |
13,639 |
||
Long-term derivative asset |
206,142 |
130,602 |
||
Other assets, net |
83,454 |
80,611 |
||
$ 2,305,861 |
$ 3,026,315 |
|||
LIABILITIES AND UNITHOLDERS'/OWNER'S EQUITY |
||||
Current liabilities: |
||||
Current portion of long-term debt |
$ — |
$ 1,500 |
||
Accounts payable |
85,792 |
123,670 |
||
Liabilities associated with drilling contracts |
— |
40,611 |
||
Accrued interest |
11,428 |
26,479 |
||
Accrued well drilling and completion costs |
65,629 |
92,910 |
||
Accrued liabilities |
87,272 |
170,786 |
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Total current liabilities |
250,121 |
455,956 |
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Long-term debt, less current portion |
1,587,747 |
1,541,085 |
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Asset retirement obligations and other |
122,982 |
114,059 |
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Commitments and contingencies |
||||
Unitholders'/owner's equity: |
||||
Common unitholders' equity |
(34,624) |
— |
||
Series A preferred equity |
38,393 |
— |
||
Owner's equity |
— |
147,308 |
||
Accumulated other comprehensive income |
10,388 |
54,008 |
||
14,157 |
201,316 |
|||
Non-controlling interests |
330,854 |
713,899 |
||
Total unitholders'/owner's equity |
345,011 |
915,215 |
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$ 2,305,861 |
$ 3,026,315 |
ATLAS ENERGY GROUP, LLC |
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Financial and Operating Highlights |
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(unaudited) |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
September 30, |
September 30, |
||||||
2015 |
2014 |
2015 |
2014 |
||||
Net income (loss) attributable to unitholders per common unit - basic |
$ (5.51) |
$ — |
$ (6.15) |
$ — |
|||
Production volume: (1)(2) |
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ATLAS GROWTH: |
|||||||
Natural gas (Mcfd) |
574 |
770 |
594 |
656 |
|||
Oil (Bpd) |
885 |
111 |
566 |
121 |
|||
Natural gas liquids (Bpd) |
91 |
104 |
84 |
85 |
|||
Total (Mcfed) |
6,426 |
2,058 |
4,497 |
1,887 |
|||
ATLAS RESOURCE: |
|||||||
Natural gas (Mcfd) |
216,414 |
245,996 |
221,159 |
237,503 |
|||
Oil (Bpd) |
4,842 |
4,598 |
5,220 |
2,761 |
|||
Natural gas liquids (Bpd) |
3,121 |
4,048 |
3,266 |
3,722 |
|||
Total (Mcfed) |
264,196 |
297,876 |
272,077 |
276,403 |
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TOTAL: |
|||||||
Natural gas (Mcfd) |
216,988 |
246,766 |
221,753 |
238,158 |
|||
Oil (Bpd) |
5,727 |
4,710 |
5,786 |
2,882 |
|||
Natural gas liquids (Bpd) |
3,212 |
4,152 |
3,350 |
3,807 |
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Total (Mcfed) |
270,623 |
299,934 |
276,574 |
278,290 |
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Average realized sales prices:(2) |
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ATLAS GROWTH: |
|||||||
Natural gas (per Mcf) |
$ 2.63 |
$ 3.92 |
$ 2.65 |
$ 4.22 |
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Oil (per Bbl) (4) |
$ 47.14 |
$ 92.96 |
$ 48.39 |
$ 93.52 |
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Natural gas liquids (per Bbl) |
$ 11.88 |
$ 32.44 |
$ 12.63 |
$ 31.45 |
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ATLAS RESOURCE: |
|||||||
Natural gas (per Mcf) (3) |
$ 3.30 |
$ 3.56 |
$ 3.41 |
$ 3.79 |
|||
Oil (per Bbl)(4) |
$ 88.42 |
$ 90.18 |
$ 83.99 |
$ 89.71 |
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Natural gas liquids (per Bbl) (5) |
$ 21.42 |
$ 32.21 |
$ 22.17 |
$ 30.54 |
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Production costs per Mcfe:(2)(6) |
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ATLAS GROWTH: |
|||||||
Lease operating expenses per Mcfe |
$ 0.81 |
$ 2.71 |
$ 0.99 |
$ 2.51 |
|||
Production taxes per Mcfe |
0.31 |
0.52 |
0.32 |
0.50 |
|||
Transportation and compression expenses per Mcfe |
0.07 |
— |
0.06 |
— |
|||
Total production costs per Mcfe |
$ 1.20 |
$ 3.24 |
$ 1.37 |
$ 3.01 |
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ATLAS RESOURCE: |
|||||||
Lease operating expenses per Mcfe |
$ 1.30 |
$ 1.37 |
$ 1.34 |
$ 1.26 |
|||
Production taxes per Mcfe |
0.19 |
0.30 |
0.20 |
0.27 |
|||
Transportation and compression expenses per Mcfe |
0.24 |
0.23 |
0.24 |
0.26 |
|||
Total production costs per Mcfe |
$ 1.74 |
$ 1.89 |
$ 1.78 |
$ 1.79 |
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TOTAL: |
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Lease operating expenses per Mcfe |
$ 1.29 |
$ 1.37 |
$ 1.33 |
$ 1.26 |
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Production taxes per Mcfe |
0.19 |
0.30 |
0.20 |
0.27 |
|||
Transportation and compression expenses per Mcfe |
0.24 |
0.23 |
0.23 |
0.26 |
|||
Total production costs per Mcfe |
$ 1.72 |
$ 1.90 |
$ 1.77 |
$ 1.80 |
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(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 $2.28 per Mcf and $3.48 per Mcf for the three months ended September 30, 2015 and 2014, respectively, and $2.32 per Mcf and $4.05 per Mcf for the nine months ended September 30, 2015 and 2014, 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 $3.25 per Mcf ($2.23 per Mcf before the effects of financial hedging) and $3.50 per Mcf ($3.43 per Mcf before the effects of financial hedging) for the three months ended September 30, 2015 and 2014, respectively, and $3.35 per Mcf ($2.27 per Mcf before the effects of financial hedging) and $3.69 per Mcf ($3.97 per Mcf before the effects of financial hedging) for the nine months ended September 30, 2015 and 2014, respectively. |
(4) AGP's average sales price for oil before the effects of financial hedging was $44.72 per barrel and $92.96 per barrel for the three months ended September 30, 2015 and 2014, respectively, and $47.09 per barrel and $93.52 per barrel for the nine months ended September 30, 2015 and 2014, respectively. ARP's average sales prices for oil before the effects of financial hedging were $43.25 per barrel and $91.08 per barrel for the three months ended September 30, 2015 and 2014, respectively, and $46.74 per barrel and $93.45 per barrel for the nine months ended September 30, 2015 and 2014, respectively. |
(5) ARP's average sales prices for natural gas liquids before the effects of financial hedging were $11.01 per barrel and $32.18 per barrel for the three months ended September 30, 2015 and 2014, respectively, and $13.00 per barrel and $32.16 per barrel for the nine months ended September 30, 2015 and 2014, respectively. |
(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 $1.28 per Mcfe ($1.71 per Mcfe for total production costs) and $1.35 per Mcfe ($1.88 per Mcfe for total production costs) for the three months ended September 30, 2015 and 2014, respectively, and $1.32 per Mcfe ($1.75 per Mcfe for total production costs) and $1.23 per Mcfe ($1.76 per Mcfe for total production costs) for the nine months ended September 30, 2015 and 2014, respectively. Including the effects of these costs, total lease operating expenses per Mcfe were $1.27 per Mcfe ($1.70 per Mcfe for total production costs) and $1.36 per Mcfe ($1.88 per Mcfe for total production costs) for the three months ended September 30, 2015 and 2014, respectively, and $1.31 per Mcfe ($1.75 per Mcfe for total production costs) and $1.24 per Mcfe ($1.77 per Mcfe for total production costs) for the nine months ended September 30, 2015 and 2014, respectively. |
ATLAS ENERGY GROUP, LLC |
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Financial Information |
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(unaudited; in thousands except per unit amounts) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
September 30, |
September 30 |
|||||||
Reconciliation of net loss to non-GAAP measures(1): |
2015 |
2014 |
2015 |
2014 |
||||
Net loss |
$ (582,313) |
$ (4,349) |
$ (588,377) |
$ (46,195) |
||||
Distributable cash flow not attributable to unitholders prior to February 27, 2015 (the asset transfer date)(2) |
— |
(15,794) |
(4,291) |
(42,915) |
||||
Atlas Resource net (income) loss attributable to unitholders |
129,501 |
(4,371) |
114,484 |
(1,326) |
||||
Atlas Resource cash distributions earned by ATLS(3) |
9,407 |
18,720 |
28,114 |
54,564 |
||||
Atlas Growth net (income) loss attributable to unitholders |
217 |
147 |
231 |
485 |
||||
Atlas Growth cash distributions earned by ATLS(3) |
127 |
51 |
287 |
133 |
||||
Non-recurring spinoff and acquisition costs |
651 |
— |
17,825 |
77 |
||||
Amortization of deferred finance costs and predecessor Term Loan interest expense |
1,308 |
323 |
16,024 |
941 |
||||
Non-cash stock compensation expense |
2,375 |
— |
3,321 |
— |
||||
Gain on asset sales and disposal |
— |
— |
— |
(3) |
||||
Loss on extinguishment of debt |
4,726 |
— |
4,726 |
— |
||||
Preferred unit distributions |
(1,009) |
— |
(2,346) |
— |
||||
Other non-cash adjustments |
1,052 |
136 |
1,736 |
411 |
||||
Loss attributable to non-controlling interests |
439,969 |
5,137 |
420,411 |
33,828 |
||||
Distributable Cash Flow attributable to unitholders(1) |
$ 6,011 |
$ — |
$ 12,145 |
$ — |
||||
Supplemental Adjusted EBITDA and Distributable Cash Flow Summary: |
||||||||
Atlas Resource Cash Distributions Earned(3): |
||||||||
Limited Partner Units |
$ 8,723 |
$ 14,580 |
$ 26,172 |
$ 43,325 |
||||
Series A Preferred Units (2%) |
684 |
1,074 |
1,942 |
3,003 |
||||
Incentive Distribution Rights |
— |
3,066 |
— |
8,236 |
||||
Total Atlas Resource Cash Distributions Earned(3) |
9,407 |
18,720 |
28,114 |
54,564 |
||||
per limited partner unit |
$ 0.325 |
$ 0.590 |
$ 0.975 |
$ 1.753 |
||||
Atlas Growth Cash Distributions Earned(3) |
127 |
51 |
287 |
133 |
||||
Total Cash Distributions Earned |
9,534 |
18,771 |
28,401 |
54,697 |
||||
Cash general and administrative expenses(4) |
(2,601) |
(1,103) |
(7,962) |
(5,763) |
||||
Other, net |
1,863 |
649 |
3,428 |
1,486 |
||||
Adjusted EBITDA(1) |
8,796 |
18,317 |
23,867 |
50,420 |
||||
Cash interest expense(5) |
(1,776) |
(2,523) |
(5,085) |
(7,505) |
||||
Preferred unit distributions |
(1,009) |
— |
(2,346) |
— |
||||
Distributable Cash Flow(1) |
$ 6,011 |
$ 15,794 |
$ 16,436 |
$ 42,915 |
||||
Distributable cash flow not attributable to unitholders prior to February 27, 2015 (the asset transfer date)(2) |
— |
(15,794) |
(4,291) |
(42,915) |
||||
Distributable Cash Flow attributable to unitholders(1) |
$ 6,011 |
$ — |
$ 12,145 |
$ — |
||||
(1) |
EBITDA and Distributable Cash Flow is relevant and useful, because they help ATLS' 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, 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 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 · Maintenance capital expenditures.
|
|||||||
(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, LLC |
||||||
CAPITALIZATION INFORMATION |
||||||
(unaudited; in thousands) |
||||||
September 30, 2015 |
||||||
Atlas |
Atlas |
|||||
Energy |
Resource |
Consolidated |
||||
Total debt |
$ 82,700 |
$ 1,505,047 |
$ 1,587,747 |
|||
Less: Cash |
(52,532) |
(2,418) |
(54,950) |
|||
Total net debt |
30,168 |
1,502,629 |
1,532,797 |
|||
Unitholders' equity |
164,689 |
244,877 |
345,011(1) |
|||
Total capitalization |
$ 194,857 |
$1,747,506 |
$ 1,877,808 |
|||
Ratio of net debt to capitalization |
0.15x |
|||||
(1) Net of eliminated amounts. |
December 31, 2014 |
||||||
Atlas |
Atlas |
|||||
Energy |
Resource |
Consolidated |
||||
Total debt |
$ 148,125 |
$1,394,460 |
$ 1,542,585 |
|||
Less: Cash |
(43,111) |
(15,247) |
(58,358) |
|||
Total net debt |
105,014 |
1,379,213 |
1,484,227 |
|||
Owner's equity |
267,637 |
947,537 |
915,215(2) |
|||
Total capitalization |
$ 372,651 |
$2,326,750 |
$ 2,399,442 |
|||
Ratio of net debt to capitalization |
0.28x |
|||||
(2) Net of eliminated amounts. |
ATLAS ENERGY GROUP, LLC |
|||||||
CONSOLIDATING STATEMENTS OF OPERATIONS |
|||||||
(unaudited; in thousands) |
|||||||
Three Months Ended September 30, 2015 |
|||||||
Atlas |
Atlas |
||||||
Energy |
Resource |
Eliminations |
Consolidated |
||||
Revenues: |
|||||||
Gas and oil production |
$ 3,878 |
$ 90,734 |
$ − |
$ 94,612 |
|||
Well construction and completion |
− |
23,054 |
− |
23,054 |
|||
Gathering and processing |
− |
1,685 |
− |
1,685 |
|||
Administration and oversight |
− |
5,495 |
− |
5,495 |
|||
Well services |
− |
5,842 |
− |
5,842 |
|||
Gain on mark-to-market derivatives |
712 |
131,065 |
− |
131,777 |
|||
Other, net |
349 |
20 |
− |
369 |
|||
Total revenues |
4,939 |
257,895 |
− |
262,834 |
|||
Costs and expenses: |
|||||||
Gas and oil production |
709 |
41,591 |
− |
42,300 |
|||
Well construction and completion |
− |
20,046 |
− |
20,046 |
|||
Gathering and processing |
− |
2,473 |
− |
2,473 |
|||
Well services |
− |
2,398 |
− |
2,398 |
|||
General and administrative |
7,726 |
13,978 |
− |
21,704 |
|||
Depreciation, depletion and amortization |
2,848 |
40,463 |
− |
43,311 |
|||
7,291 |
672,246 |
− |
679,537 |
||||
Total costs and expenses |
18,574 |
793,195 |
− |
811,769 |
|||
Operating loss |
(13,635) |
(535,300) |
− |
(548,935) |
|||
Loss on asset sales and disposal |
− |
(362) |
− |
(362) |
|||
Loss on extinguishment of debt |
(4,726) |
− |
− |
(4,726) |
|||
Interest expense |
(3,098) |
(25,192) |
− |
(28,290) |
|||
Net loss |
(21,459) |
(560,854) |
− |
(582,313) |
|||
Preferred unitholders' dividends |
(1,009) |
− |
− |
(1,009) |
|||
Loss attributable to non-controlling interests. |
− |
− |
439,969 |
439,969 |
|||
Net loss attributable to unitholders |
$ (22,468) |
$ (560,854) |
$ 439,969 |
$ (143,353) |
|||
ATLAS ENERGY GROUP, LLC |
|||||||
COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS |
|||||||
(unaudited; in thousands) |
|||||||
Three Months Ended September 30, 2014 |
|||||||
Atlas |
Atlas |
||||||
Energy |
Resource |
Eliminations |
Consolidated |
||||
Revenues: |
|||||||
Gas and oil production |
$ 1,538 |
$ 129,399 |
$ − |
$ 130,937 |
|||
Well construction and completion |
− |
61,204 |
− |
61,204 |
|||
Gathering and processing |
− |
3,061 |
− |
3,061 |
|||
Administration and oversight |
− |
6,177 |
− |
6,177 |
|||
Well services |
− |
6,597 |
− |
6,597 |
|||
Other, net |
352 |
261 |
− |
613 |
|||
Total revenues |
1,890 |
206,699 |
− |
208,589 |
|||
Costs and expenses: |
|||||||
Gas and oil production |
613 |
51,391 |
− |
52,004 |
|||
Well construction and completion |
− |
53,221 |
− |
53,221 |
|||
Gathering and processing |
− |
3,214 |
− |
3,214 |
|||
Well services |
− |
2,617 |
− |
2,617 |
|||
General and administrative |
4,175 |
13,124 |
− |
17,299 |
|||
Depreciation, depletion and amortization |
490 |
64,578 |
− |
65,068 |
|||
Total costs and expenses |
5,278 |
188,145 |
− |
193,423 |
|||
Operating income (loss) |
(3,388) |
18,554 |
− |
15,166 |
|||
Loss on asset sales and disposal |
− |
(92) |
− |
(92) |
|||
Interest expense |
(2,846) |
(16,577) |
− |
(19,423) |
|||
Net income (loss) |
(6,234) |
1,885 |
− |
(4,349) |
|||
Loss attributable to non-controlling interests. |
− |
− |
5,137 |
5,137 |
|||
Net income (loss) attributable to owner |
$ (6,234) |
$ 1,885 |
$ 5,137 |
$ 788 |
|||
ATLAS ENERGY GROUP, LLC |
|||||||
COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS |
|||||||
(unaudited; in thousands) |
|||||||
Nine Months Ended September 30, 2015 |
|||||||
Atlas |
Atlas |
||||||
Energy |
Resource |
Eliminations |
Consolidated |
||||
Revenues: |
|||||||
Gas and oil production |
$ 8,006 |
$ 292,243 |
$ − |
$ 300,249 |
|||
Well construction and completion |
− |
63,665 |
− |
63,665 |
|||
Gathering and processing |
− |
6,046 |
− |
6,046 |
|||
Administration and oversight |
− |
7,301 |
− |
7,301 |
|||
Well services |
− |
18,568 |
− |
18,568 |
|||
Gain on mark-to-market derivatives |
760 |
209,706 |
− |
210,466 |
|||
Other, net |
505 |
80 |
− |
585 |
|||
Total revenues |
9,271 |
597,609 |
− |
606,880 |
|||
Costs and expenses: |
|||||||
Gas and oil production |
1,684 |
130,224 |
− |
131,908 |
|||
Well construction and completion |
− |
55,361 |
− |
55,361 |
|||
Gathering and processing |
− |
7,406 |
− |
7,406 |
|||
Well services |
− |
6,735 |
− |
6,735 |
|||
General and administrative |
37,637 |
44,400 |
− |
82,037 |
|||
Depreciation, depletion and amortization |
5,095 |
125,948 |
− |
131,043 |
|||
Asset impairment |
7,291 |
672,246 |
− |
679,537 |
|||
Total costs and expenses |
51,707 |
1,042,320 |
− |
1,094,027 |
|||
Operating loss |
(42,436) |
(444,711) |
− |
(487,147) |
|||
Loss on asset sales and disposal |
− |
(276) |
− |
(276) |
|||
Loss on extinguishment of debt |
(4,726) |
− |
− |
(4,726) |
|||
Interest expense |
(21,123) |
(75,105) |
− |
(96,228) |
|||
Net loss |
(68,285) |
(520,092) |
− |
(588,377) |
|||
Preferred unitholders' dividends |
(2,346) |
− |
− |
(2,346) |
|||
Loss attributable to non-controlling interests. |
− |
− |
420,411 |
420,411 |
|||
Net loss attributable to unitholders/owner |
$ (70,631) |
$ (520,092) |
$ 420,411 |
$ (170,312) |
|||
ATLAS ENERGY GROUP, LLC |
|||||||
COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS |
|||||||
(unaudited; in thousands) |
|||||||
Nine Months Ended September 30, 2014 |
|||||||
Atlas |
Atlas |
||||||
Energy |
Resource |
Eliminations |
Consolidated |
||||
Revenues: |
|||||||
Gas and oil production |
$ 4,563 |
$ 337,893 |
$ − |
$ 342,456 |
|||
Well construction and completion |
− |
126,917 |
− |
126,917 |
|||
Gathering and processing |
− |
11,287 |
− |
11,287 |
|||
Administration and oversight |
− |
12,072 |
− |
12,072 |
|||
Well services |
− |
18,441 |
− |
18,441 |
|||
Other, net |
824 |
343 |
− |
1,167 |
|||
Total revenues |
5,387 |
506,953 |
− |
512,340 |
|||
Costs and expenses: |
|||||||
Gas and oil production |
1,552 |
133,038 |
− |
134,590 |
|||
Well construction and completion |
− |
110,363 |
− |
110,363 |
|||
Gathering and processing |
− |
11,900 |
− |
11,900 |
|||
Well services |
− |
7,525 |
− |
7,525 |
|||
General and administrative |
12,593 |
50,894 |
− |
63,487 |
|||
Depreciation, depletion and amortization |
1,436 |
176,077 |
− |
177,513 |
|||
Total costs and expenses |
15,581 |
489,797 |
− |
505,378 |
|||
Operating income (loss) |
(10,194) |
17,156 |
− |
6,962 |
|||
Gain (loss) on asset sales and disposal |
3 |
(1,686) |
− |
(1,683) |
|||
Interest expense |
(8,446) |
(43,028) |
− |
(51,474) |
|||
Net loss |
(18,637) |
(27,558) |
− |
(46,195) |
|||
Loss attributable to non-controlling interests |
− |
− |
33,828 |
33,828 |
|||
Net loss attributable to owner |
$ (18,637) |
$ (27,558) |
$ 33,828 |
$ (12,367) |
|||
ATLAS ENERGY GROUP, LLC |
|||||||
COMBINED CONDENSED CONSOLIDATING BALANCE SHEETS |
|||||||
(unaudited; in thousands) |
|||||||
September 30, 2015 |
|||||||
Atlas |
Atlas |
||||||
ASSETS |
Energy |
Resource |
Eliminations |
Consolidated |
|||
Current assets: |
|||||||
Cash and cash equivalents |
$ 52,532 |
$ 2,418 |
$ − |
$ 54,950 |
|||
Accounts receivable |
5,448 |
89,402 |
(3,144) |
91,706 |
|||
Receivable from (advances from) affiliates |
(1,178) |
1,178 |
− |
− |
|||
Current portion of derivative asset |
399 |
146,622 |
− |
147,021 |
|||
Subscriptions receivable |
− |
23,054 |
− |
23,054 |
|||
Prepaid expenses and other |
615 |
25,407 |
− |
26,022 |
|||
Total current assets |
57,816 |
288,081 |
(3,144) |
342,753 |
|||
Property, plant and equipment, net |
124,640 |
1,534,718 |
− |
1,659,358 |
|||
Intangible assets, net |
− |
515 |
− |
515 |
|||
Goodwill, net |
− |
13,639 |
− |
13,639 |
|||
Long-term derivative asset |
163 |
205,979 |
− |
206,142 |
|||
Investment in subsidiaries |
67,699 |
− |
(67,699) |
− |
|||
Other assets, net |
26,484 |
53,826 |
3,144 |
83,454 |
|||
$ 276,802 |
$ 2,096,758 |
$ (67,699) |
$ 2,305,861 |
||||
LIABILITIES AND UNITHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Accounts payable |
3,583 |
82,209 |
− |
85,792 |
|||
Accrued interest |
643 |
10,785 |
− |
11,428 |
|||
Accrued well drilling and completion costs |
9,329 |
56,300 |
− |
65,629 |
|||
Accrued liabilities |
9,965 |
80,451 |
(3,144) |
87,272 |
|||
Total current liabilities |
23,520 |
229,745 |
(3,144) |
250,121 |
|||
Long-term debt, less current portion |
82,700 |
1,505,047 |
− |
1,587,747 |
|||
Asset retirement obligations and other |
5,893 |
117,089 |
− |
122,982 |
|||
Unitholders' equity: |
|||||||
Common unitholders' equity |
(34,624) |
− |
− |
(34,624) |
|||
Series A preferred equity |
38,393 |
− |
− |
38,393 |
|||
Partners' capital |
− |
198,475 |
(198,475) |
− |
|||
Accumulated other comprehensive income |
10,388 |
46,402 |
(46,402) |
10,388 |
|||
14,157 |
244,877 |
(244,877) |
14,157 |
||||
Non-controlling interests |
150,532 |
− |
180,322 |
330,854 |
|||
Total unitholders' equity |
164,689 |
244,877 |
(64,555) |
345,011 |
|||
$ 276,802 |
$ 2,096,758 |
$ (67,699) |
$ 2,305,861 |
ATLAS ENERGY GROUP, LLC |
|||||||
COMBINED CONDENSED CONSOLIDATING BALANCE SHEETS |
|||||||
(unaudited; in thousands) |
|||||||
December 31, 2014 |
|||||||
Atlas |
Atlas |
||||||
ASSETS |
Energy |
Resource |
Eliminations |
Consolidated |
|||
Current assets: |
|||||||
Cash and cash equivalents |
$ 43,111 |
$ 15,247 |
$ − |
$ 58,358 |
|||
Accounts receivable |
7,007 |
114,520 |
(6,237) |
115,290 |
|||
Receivable from (advances to) affiliates |
6,638 |
(2,249) |
− |
4,389 |
|||
Current portion of derivative asset |
− |
144,259 |
− |
144,259 |
|||
Subscriptions receivable |
− |
32,398 |
− |
32,398 |
|||
Prepaid expenses and other |
493 |
26,296 |
− |
26,789 |
|||
Total current assets |
57,249 |
330,471 |
(6,237) |
381,483 |
|||
Property, plant and equipment, net |
155,469 |
2,263,820 |
− |
2,419,289 |
|||
Intangible assets, net |
− |
691 |
− |
691 |
|||
Goodwill, net |
− |
13,639 |
− |
13,639 |
|||
Long-term derivative asset |
− |
130,602 |
− |
130,602 |
|||
Investment in subsidiaries |
306,196 |
− |
(306,196) |
− |
|||
Other assets, net |
24,293 |
50,081 |
6,237 |
80,611 |
|||
$ 543,207 |
$ 2,789,304 |
$ (306,196) |
$ 3,026,315 |
||||
LIABILITIES AND OWNER'S EQUITY |
|||||||
Current liabilities: |
|||||||
Current portion of long-term debt |
$ 1,500 |
$ − |
$ − |
$ 1,500 |
|||
Accounts payable |
12,472 |
111,198 |
− |
123,670 |
|||
Liabilities associated with drilling contracts |
− |
40,611 |
− |
40,611 |
|||
Accrued interest |
27 |
26,452 |
− |
26,479 |
|||
Accrued well drilling and completion costs |
12,506 |
80,404 |
− |
92,910 |
|||
Accrued liabilities |
98,364 |
78,659 |
(6,237) |
170,786 |
|||
Total current liabilities |
124,869 |
337,324 |
(6,237) |
455,956 |
|||
Long-term debt, less current portion |
146,625 |
1,394,460 |
− |
1,541,085 |
|||
Asset retirement obligations and other |
4,076 |
109,983 |
− |
114,059 |
|||
Owner's equity: |
|||||||
Owner's equity |
147,308 |
− |
− |
147,308 |
|||
Partners' capital |
− |
756,066 |
(756,066) |
− |
|||
Accumulated other comprehensive income |
54,008 |
191,471 |
(191,471) |
54,008 |
|||
201,316 |
947,537 |
(947,537) |
201,316 |
||||
Non-controlling interests |
66,321 |
− |
647,578 |
713,899 |
|||
Total owner's equity |
267,637 |
947,537 |
(299,959) |
915,215 |
|||
$ 543,207 |
$ 2,789,304 |
$ (306,196) |
$ 3,026,315 |
ATLAS ENERGY GROUP, LLC |
|||
Ownership Interests Summary |
|||
Atlas Energy Ownership Interests as of November 9, 2015: |
Amount |
Overall Ownership Interest Percentage |
|
ATLAS RESOURCE: |
|||
General partner interest |
100% |
2.0% |
|
Common units |
20,962,485 |
19.8% |
|
Preferred units |
3,749,986 |
3.5% |
|
Incentive distribution rights |
100% |
N/A |
|
Total Atlas Energy ownership interests in Atlas Resource |
25.3% |
||
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 |
15.9% |
||
Approximate limited partner ownership interest |
12.0% |
SOURCE Atlas Energy Group, LLC
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