EX-99.1

EX-99.1 2 d95269dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

NEWS RELEASE


CONTACT:		Brian J. Begley
		Vice President - Investor Relations
		Atlas Energy Group, LLC
		(877) 280-2857
		(215) 405-2718 (fax)

ATLAS ENERGY GROUP, LLC REPORTS OPERATING AND FINANCIAL RESULTS FOR THE SECOND QUARTER 2015

Pittsburgh, PA – August 6, 2015 - Atlas Energy Group, LLC (NYSE: ATLS) (“Atlas Energy”, the “Company” or “ATLS”) today reported operating and financial results for the second quarter 2015.

•

Atlas Energy’s Distributable Cash Flow, a non-GAAP measure, was approximately $5.0 million⁽¹⁾, or $0.19 per common unit, in the second quarter 2015.

•

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 second quarter 2015. The most recent ARP distribution for June 2015 will be paid on August 14, 2015 to holders of record as of August 7, 2015. Atlas Energy received $9.4 million in cash distributions in the second quarter 2015 from ownership in ARP.

•

Atlas Growth Partners, L.P. (“AGP”), Atlas Energy’s private E&P development subsidiary, recently completed its initial fundraising of approximately $233 million in investor capital for its operations, which are primarily focused in the Eagle Ford Shale.

•

In July 2015, Arc Logistics Partners, LP (NYSE: ARCX), a master limited partnership of which 16% of its general partner is owned by ATLS through the Company’s interest in Lightfoot Capital Partners, announced that it acquired all of the limited liability company interests of UET Midstream, LLC, a crude oil and terminal business, from United Energy Trading, LLC and Hawkeye Midstream, LLC for a total adjusted purchase price of $76.6 million.

ATLS owns 100% of ARP’s general partner Class A units and incentive distribution rights, and an approximate 25% 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 second quarter 2015 earnings release for additional details on its financial results.

Recent Events

Sale of Arkoma Properties to ARP

On June 5, 2015, ARP acquired Atlas Energy’s natural gas producing properties in the Arkoma basin 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. ATLS used the net proceeds from the sale of the Arkoma assets to pay down a portion of its existing term loan, which had a carrying value of $77.4 million, net of unamortized discount of $5.3 million, on its consolidated balance sheet as of June 30, 2015. ATLS and 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.

ARP’s Second Quarter 2015 Highlights

•

ARP’s 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. 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. ARP 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.

•

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 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 ARP’s second quarter earnings release.

Atlas Growth Partners

Atlas Energy’s private E&P development subsidiary, Atlas Growth Partners, L.P., completed its recent fundraising efforts during the second quarter 2015, accumulating approximately $233 million in investor capital. These funds are being deployed into AGP’s operations, namely in the oil-rich Eagle Ford Shale. AGP had net daily production of approximately 2,800 Mmcfed in the second quarter 2015, including production from 4 wells in the Eagle Ford Shale.

Corporate Expenses

•

Cash general and administrative expense, excluding amounts attributable to AGP and ARP, was $2.0 million for the second quarter 2015, approximately $1.4 million lower than the first quarter 2015. The decrease in expense from the first quarter 2015 was due primarily to the seasonality of certain ATLS’ public company costs. Please refer to the consolidating statements of operations provided in the financial tables of this release.

•

Cash interest expense was $2.3 million for the second quarter 2015, compared to $2.5 million for the prior year comparable quarter. ATLS had approximately $77.4 million of debt on its consolidated balance sheet at June 30, 2015, net of unamortized discount of $5.3 million, and a cash position of approximately $11.8 million.

* * *

ATLS 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 Energy’s website at www.atlasenergy.com. For those unavailable to listen to the live broadcast, the replay of the webcast will be available following the live call on the Atlas Resource website and telephonically beginning at approximately 1:00 p.m. ET on August 7, 2015 by dialing (855) 859-2056, passcode: 87417314.

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.; 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 InvestorRelations@atlasenergy.com.

Atlas Resource Partners, L.P. (NYSE: ARP) is an exploration & production master limited partnership which owns an interest in over 14,500 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 InvestorRelations@atlasenergy.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. ATLS cautions readers that any forward-looking information is not a guarantee of future performance. Such forward-looking statements include, but are not limited to, statements about future financial and operating results, resource and production potential, planned expansions of capacity and other capital expenditures, distribution amounts, ATLS’ 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’ 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.

ATLAS ENERGY GROUP, LLC AND SUBSIDIARIES

COMBINED 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	$	99,077		$	110,694		$	205,637		$	211,519
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		(26,896	)		—			78,689			—
Other, net		284			285			216			554

Total revenues		98,247			141,604			344,046			303,751


Costs and expenses:
Gas and oil production		43,619			43,828			89,608			82,586
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		18,405			24,797			60,333			46,188
Depreciation, depletion and amortization		43,276			60,406			87,732			112,445

Total costs and expenses		124,700			149,936			282,258			311,955


Operating income (loss)		(26,453	)		(8,332	)		61,788			(8,204	)

Gain (loss) on asset sales and disposal		97			12			86			(1,591	)
Interest expense		(33,187	)		(16,074	)		(67,938	)		(32,051	)


Net loss		(59,543	)		(24,394	)		(6,064	)		(41,846	)
(Income) loss attributable to non-controlling interests		38,745			18,383			(19,558	)		28,691

Net loss attributable to unitholders’/owner’s interests	$	(20,798	)	$	(6,011	)	$	(25,622	)	$	(13,155	)


Allocation of net loss attributable to unitholders’/owner’s interests:
Portion applicable to owner’s interest (period prior to the transfer of assets on February 27, 2015)	$	—		$	(6,011	)	$	(10,475	)	$	(13,155	)
Portion applicable to unitholders’ interest (period subsequent to the transfer of assets on February 27, 2015)		(20,798	)		—			(15,147	)		—

Net loss attributable to unitholders’ /owner’s interests	$	(20,798	)	$	(6,011	)	$	(25,622	)	$	(13,155	)


Net loss attributable to unitholders per common unit:
Basic	$	(0.80	)	$	—		$	(0.58	)	$	—

Diluted	$	(0.80	)	$	—		$	(0.58	)	$	—


Weighted average common units outstanding:
Basic		26,011			—			26,011			—

Diluted		26,011			—			26,011			—

ATLAS ENERGY GROUP, LLC AND SUBSIDIARIES

COMBINED CONSOLIDATED BALANCE SHEETS

(unaudited; in thousands)


	June 30,		December 31,
	2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	40,077	$	58,358
Accounts receivable		90,489		115,290
Advances to affiliates		—		4,389
Current portion of derivative asset		114,740		144,259
Subscriptions receivable		34,675		32,398
Prepaid expenses and other		25,016		26,789

Total current assets		304,997		381,483

Property, plant and equipment, net		2,392,656		2,419,289
Intangible assets, net		574		691
Goodwill, net		13,639		13,639
Long-term derivative asset		150,180		130,602
Other assets, net		82,792		80,611

	$	2,944,838	$	3,026,315


LIABILITIES AND UNITHOLDERS’/OWNER’S EQUITY

Current liabilities:
Current portion of long-term debt	$	77,371	$	1,500
Accounts payable		110,789		123,670
Liabilities associated with drilling contracts		—		40,611
Accrued interest		26,312		26,479
Accrued well drilling and completion costs		37,368		92,910
Accrued liabilities		80,740		170,786

Total current liabilities		332,580		455,956

Long-term debt, less current portion		1,491,612		1,541,085
Asset retirement obligations and other		120,287		114,059

Commitments and contingencies

Unitholders’/owner’s equity:
Common unitholders’ equity		105,649		—
Series A preferred equity		38,999		—
Owner’s equity		—		147,308
Accumulated other comprehensive income		32,626		54,008

		177,274		201,316
Non-controlling interests		823,085		713,899

Total unitholders’/owner’s equity		1,000,359		915,215

	$	2,944,838	$	3,026,315

ATLAS ENERGY GROUP, LLC

Financial and Operating Highlights

(unaudited)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2015			2014		2015			2014
Net loss attributable to unitholders per common unit - basic	$	(0.80	)	$	—	$	(0.58	)	$	—

Production volume:⁽¹⁾⁽²⁾
ATLAS GROWTH:
Natural gas (Mcfd)		481			939		604			597
Oil (Bpd)		320			200		405			125
Natural gas liquids (Bpd)		62			118		81			75

Total (Mcfed)		2,773			2,847		3,516			1,800

ATLAS RESOURCE:
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

TOTAL:
Natural gas (Mcfd)		220,325			239,314		224,175			233,783
Oil (Bpd)		5,613			2,284		5,817			1,953
Natural gas liquids (Bpd)		3,256			3,808		3,421			3,631

Total (Mcfed)		273,534			275,861		279,599			267,288


Average realized sales prices:⁽²⁾
ATLAS GROWTH:
Natural gas (per Mcf)	$	2.61		$	4.29	$	2.66		$	4.42
Oil (per Bbl)⁽⁴⁾	$	56.01		$	96.53	$	49.79		$	93.77
Natural gas liquids (per Bbl)	$	12.76		$	31.13	$	13.06		$	30.75
ATLAS RESOURCE:
Natural gas (per Mcf)⁽³⁾	$	3.33		$	3.79	$	3.46		$	3.92
Oil (per Bbl)⁽⁴⁾	$	83.19		$	90.66	$	81.98		$	89.12
Natural gas liquids (per Bbl)⁽⁵⁾	$	22.58		$	27.60	$	22.53		$	29.57

Production costs per Mcfe:⁽²⁾⁽⁶⁾
ATLAS GROWTH:
Lease operating expenses per Mcfe	$	1.47		$	2.22	$	1.15		$	2.39
Production taxes per Mcfe		0.36			0.50		0.33			0.49
Transportation and compression expenses per Mcfe		0.09			—		0.05			—

Total production costs per Mcfe	$	1.92		$	2.72	$	1.53		$	2.88

ATLAS RESOURCE:
Lease operating expenses per Mcfe	$	1.36		$	1.22	$	1.36		$	1.19
Production taxes per Mcfe		0.16			0.24		0.20			0.26
Transportation and compression expenses per Mcfe		0.24			0.27		0.24			0.28

Total production costs per Mcfe	$	1.77		$	1.73	$	1.79		$	1.73

TOTAL:
Lease operating expenses per Mcfe	$	1.37		$	1.23	$	1.36		$	1.20
Production taxes per Mcfe		0.17			0.25		0.20			0.26
Transportation and compression expenses per Mcfe		0.24			0.26		0.23			0.28

Total production costs per Mcfe	$	1.77		$	1.74	$	1.79		$	1.74

⁽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 $2.14 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. 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 $3.28 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.

⁽⁴⁾

AGP’s average sales price for oil before the effects of financial hedging was $55.84 per barrel and $96.53 per barrel for the three months ended June 30, 2015 and 2014, respectively, and $49.72 per barrel and $93.77 per barrel for the six months ended June 30, 2015 and 2014, respectively. 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.

⁽⁵⁾

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.

⁽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 $1.34 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. Including the effects of these costs, total lease operating expenses per Mcfe were $1.34 per Mcfe ($1.75 per Mcfe for total production costs) and $1.24 per Mcfe ($1.75 per Mcfe for total production costs) for the three months ended June 30, 2015 and 2014, respectively, and $1.33 per Mcfe ($1.77 per Mcfe for total production costs) and $1.17 per Mcfe ($1.71 per Mcfe for total production costs) for the six months ended June 30, 2015 and 2014, respectively.

ATLAS ENERGY GROUP, LLC

Financial Information

(unaudited; in thousands except per unit amounts)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Reconciliation of net income (loss) to non-GAAP measures⁽¹⁾:
Net loss	$	(59,543	)	$	(24,394	)	$	(6,064	)	$	(41,846	)
Distributable cash flow not attributable to unitholders prior to February 27, 2015 (the asset transfer date)⁽²⁾		—			(14,871	)		(4,291	)		(27,121	)
Atlas Resource net (income) loss attributable to unitholders		10,162			2,044			(15,017	)		3,045
Atlas Resource cash distributions earned by ATLS⁽³⁾		9,373			18,347			18,707			35,844
Atlas Growth net (income) loss attributable to unitholders		(50	)		83			14			338
Atlas Growth cash distributions earned by ATLS⁽³⁾		88			43			160			82
Non-recurring spinoff and acquisition costs		—			—			17,174			77
Amortization of deferred finance costs and predecessor Term Loan interest expense		6,165			309			14,716			618
Non-cash stock compensation expense		926			—			946			—
Gain on asset sales and disposal		—			(3	)		—			(3	)
Preferred unit distributions		(1,004	)		—			(1,337	)		—
Other non-cash adjustments		127			59			684			275
(Income) loss attributable to non-controlling interests		38,745			18,383			(19,558	)		28,691

Distributable Cash Flow attributable to unitholders⁽¹⁾	$	4,989		$	—		$	6,134		$	—


Supplemental Adjusted EBITDA and Distributable Cash Flow Summary:
Atlas Resource Cash Distributions Earned⁽³⁾:
Limited Partner Units	$	8,723		$	14,412		$	17,449		$	28,745
Series A Preferred Units (2%)		650			1,060			1,258			1,929
Incentive Distribution Rights		—			2,875			—			5,170

Total Atlas Resource Cash Distributions Earned⁽³⁾		9,373			18,347			18,707			35,844

per limited partner unit	$	0.325		$	0.583		$	0.650		$	1.163

Atlas Growth Cash Distributions Earned⁽³⁾		88			43			160			82

Total Cash Distributions Earned		9,461			18,390			18,867			35,926

Cash general and administrative expenses⁽⁴⁾		(1,996	)		(1,416	)		(5,361	)		(4,660	)
Other, net		834			399			1,565			837

Adjusted EBITDA⁽¹⁾		8,299			17,373			15,071			32,103
Cash interest expense⁽⁵⁾		(2,306	)		(2,502	)		(3,309	)		(4,982	)
Preferred unit distributions		(1,004	)		—			(1,337	)		—

Distributable Cash Flow⁽¹⁾	$	4,989		$	14,871		$	10,425		$	27,121
Distributable cash flow not attributable to unitholders prior to February 27, 2015 (the asset transfer date)⁽²⁾		—			(14,871	)		(4,291	)		(27,121	)

Distributable Cash Flow attributable to unitholders⁽¹⁾	$	4,989		$	—		$	6,134		$	—

⁽¹⁾

EBITDA and Distributable Cash Flow is relevant and useful because it helps 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)


	June 30, 2015
	Atlas Energy			Atlas Resource			Consolidated
Total debt	$	77,371		$	1,491,612		$	1,568,983
Less: Cash		(39,470	)		(607	)		(40,077	)

Total net debt		37,901			1,491,005			1,528,906

Unitholders’ equity		314,446			924,301			1,000,359	⁽¹⁾


Total capitalization	$	352,347		$	2,415,306		$	2,529,265


Ratio of net debt to capitalization		0.11x

⁽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 June 30, 2015


	Atlas			Atlas
	Energy			Resource			Eliminations		Consolidated
Revenues:
Gas and oil production	$	1,817		$	97,260		$	—	$	99,077
Well construction and completion		—			16,956			—		16,956
Gathering and processing		—			2,177			—		2,177
Administration and oversight		—			547			—		547
Well services		—			6,102			—		6,102
Gain (loss) on mark-to-market derivatives		48			(26,944	)		—		(26,896	)
Other, net		257			27			—		284

Total revenues		2,122			96,125			—		98,247


Costs and expenses:
Gas and oil production		484			43,135			—		43,619
Well construction and completion		—			14,745			—		14,745
Gathering and processing		—			2,516			—		2,516
Well services		—			2,139			—		2,139
General and administrative		5,118			13,287			—		18,405
Depreciation, depletion and amortization		782			42,494			—		43,276

Total costs and expenses		6,384			118,316			—		124,700


Operating loss		(4,262	)		(22,191	)		—		(26,453	)

Gain on asset sales and disposal		—			97			—		97
Interest expense		(8,471	)		(24,716	)		—		(33,187	)


Net loss		(12,733	)		(46,810	)		—		(59,543	)
Loss attributable to non-controlling interests		—			—			38,745		38,745

Net loss attributable to unitholders	$	(12,733	)	$	(46,810	)	$	38,745	$	(20,798	)

⁽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.

ATLAS ENERGY GROUP, LLC

CONSOLIDATING STATEMENTS OF OPERATIONS

(unaudited; in thousands)

Three Months Ended June 30, 2014


	Atlas			Atlas
	Energy			Resource			Eliminations		Consolidated
Revenues:
Gas and oil production	$	2,457		$	108,237		$	—	$	110,694
Well construction and completion		—			16,336			—		16,336
Gathering and processing		—			3,758			—		3,758
Administration and oversight		—			4,166			—		4,166
Well services		—			6,365			—		6,365
Other, net		250			35			—		285

Total revenues		2,707			138,897			—		141,604


Costs and expenses:
Gas and oil production		706			43,122			—		43,828
Well construction and completion		—			14,206			—		14,206
Gathering and processing		—			4,273			—		4,273
Well services		—			2,426			—		2,426
General and administrative		3,482			21,315			—		24,797
Depreciation, depletion and amortization		726			59,680			—		60,406

Total costs and expenses		4,914			145,022			—		149,936


Operating loss		(2,207	)		(6,125	)		—		(8,332	)

Gain on asset sales and disposal		3			9			—		12
Interest expense		(2,811	)		(13,263	)		—		(16,074	)


Net loss		(5,015	)		(19,379	)		—		(24,394	)
Loss attributable to non-controlling interests		—			—			18,383		18,383

Net loss attributable to owner	$	(5,015	)	$	(19,379	)	$	18,383	$	(6,011	)

ATLAS ENERGY GROUP, LLC

CONSOLIDATING STATEMENTS OF OPERATIONS

(unaudited; in thousands)

Six Months Ended June 30, 2015


	Atlas			Atlas
	Energy			Resource			Eliminations			Consolidated
Revenues:
Gas and oil production	$	4,128		$	201,509		$	—		$	205,637
Well construction and completion		—			40,611			—			40,611
Gathering and processing		—			4,361			—			4,361
Administration and oversight		—			1,806			—			1,806
Well services		—			12,726			—			12,726
Gain on mark-to-market derivatives		48			78,641			—			78,689
Other, net		156			60			—			216

Total revenues		4,332			339,714			—			344,046


Costs and expenses:
Gas and oil production		975			88,633			—			89,608
Well construction and completion		—			35,315			—			35,315
Gathering and processing		—			4,933			—			4,933
Well services		—			4,337			—			4,337
General and administrative		29,911			30,422			—			60,333
Depreciation, depletion and amortization		2,247			85,485			—			87,732

Total costs and expenses		33,133			249,125			—			282,258


Operating income (loss)		(28,801	)		90,589			—			61,788

Gain on asset sales and disposal		—			86			—			86
Interest expense		(18,025	)		(49,913	)		—			(67,938	)


Net income (loss)		(46,826	)		40,762			—			(6,064	)
Income attributable to non-controlling interests		—			—			(19,558	)		(19,558	)

Net income (loss) attributable to unitholders/owner	$	(46,826	)	$	40,762		$	(19,558	)	$	(25,622	)

ATLAS ENERGY GROUP, LLC

CONSOLIDATING STATEMENTS OF OPERATIONS

(unaudited; in thousands)

Six Months Ended June 30, 2014


	Atlas			Atlas
	Energy			Resource			Eliminations		Consolidated
Revenues:
Gas and oil production	$	3,025		$	208,494		$	—	$	211,519
Well construction and completion		—			65,713			—		65,713
Gathering and processing		—			8,226			—		8,226
Administration and oversight		—			5,895			—		5,895
Well services		—			11,844			—		11,844
Other, net		472			82			—		554

Total revenues		3,497			300,254			—		303,751


Costs and expenses:
Gas and oil production		939			81,647			—		82,586
Well construction and completion		—			57,142			—		57,142
Gathering and processing		—			8,686			—		8,686
Well services		—			4,908			—		4,908
General and administrative		8,418			37,770			—		46,188
Depreciation, depletion and amortization		946			111,499			—		112,445

Total costs and expenses		10,303			301,652			—		311,955


Operating loss		(6,806	)		(1,398	)		—		(8,204	)

Gain (loss) on asset sales and disposal		3			(1,594	)		—		(1,591	)
Interest expense		(5,600	)		(26,451	)		—		(32,051	)


Net loss		(12,403	)		(29,443	)		—		(41,846	)
Loss attributable to non-controlling interests		—			—			28,691		28,691

Net loss attributable to owner	$	(12,403	)	$	(29,443	)	$	28,691	$	(13,155	)

ATLAS ENERGY GROUP, LLC

CONDENSED CONSOLIDATING BALANCE SHEETS

(unaudited; in thousands)

June 30, 2015


	Atlas			Atlas
	Energy			Resource		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	39,470		$	607	$	—		$	40,077
Accounts receivable		4,451			89,169		(3,131	)		90,489
Receivable from (advances from) affiliates		(24,856	)		24,856		—			—
Current portion of derivative asset		30			114,710		—			114,740
Subscriptions receivable		34,675			—		—			34,675
Prepaid expenses and other		695			24,321		—			25,016

Total current assets		54,465			253,663		(3,131	)		304,997

Property, plant and equipment, net		165,839			2,226,817		—			2,392,656
Intangible assets, net		—			574		—			574
Goodwill, net		—			13,639		—			13,639
Long-term derivative asset		18			150,162		—			150,180
Investment in subsidiaries		241,519			—		(241,519	)		—
Other assets, net		23,422			56,239		3,131			82,792

	$	485,263		$	2,701,094	$	(241,519	)	$	2,944,838


LIABILITIES AND UNITHOLDERS’ EQUITY

Current liabilities:
Current portion of long-term debt	$	77,371		$	—	$	—		$	77,371
Accounts payable		33,186			77,603		—			110,789
Accrued interest		449			25,863		—			26,312
Accrued well drilling and completion costs		11,803			25,565		—			37,368
Accrued liabilities		42,143			41,728		(3,131	)		80,740

Total current liabilities		164,952			170,759		(3,131	)		332,580

Long-term debt, less current portion		—			1,491,612		—			1,491,612
Asset retirement obligations and other		5,865			114,422		—			120,287

Unitholders’ equity:
Common unitholders’ equity		105,649			—		—			105,649
Series A preferred equity		38,999			—		—			38,999
Partners’ capital		—			785,951		(785,951	)		—
Accumulated other comprehensive income		32,626			138,350		(138,350	)		32,626

		177,274			924,301		(924,301	)		177,274
Non-controlling interests		137,172			—		685,913			823,085

Total unitholders’ equity		314,446			924,301		(238,388	)		1,000,359

	$	485,263		$	2,701,094	$	(241,519	)	$	2,944,838

ATLAS ENERGY GROUP, LLC

CONDENSED CONSOLIDATING BALANCE SHEETS

(unaudited; in thousands)

December 31, 2014


	Atlas		Atlas
	Energy		Resource			Eliminations			Consolidated
ASSETS
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 August 6, 2015:	Amount			Overall Ownership Interest Percentage

ATLAS RESOURCE:
General partner interest		100	%		2.0	%
Common units		20,962,485			21.2	%
Preferred units		3,749,986			3.8	%
Incentive distribution rights		100	%		N/A

Total Atlas Energy ownership interests in Atlas Resource					27.0	%


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	%