Your SlideShare is downloading. ×

Arp2012 ipaany conferencepresentation


Published on

Published in: Business, Economy & Finance

  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

No notes for slide


  • 1. IPAA OGIS East – New York, NY Monday, April 16, 2012<#>
  • 2. Safe Harbor Statement 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. Atlas Resource Partners, L.P. (“ARP”) cautions readers that any forward-looking information is not a guarantee of future performance. Such forward-looking statements include, but are not limited to, statements about future financial and operating results, resource potential, ARP’ 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, uncertainties regarding the expected financial results of ARP, which is dependent on future events or developments; assumptions and uncertainties associated with general economic and business conditions; changes in commodity prices; changes in the costs and results of drilling operations; uncertainties about estimates of reserves and resource potential; inability to obtain capital needed for operations; ARP’s level of indebtedness; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; and tax consequences of business transactions. In addition, ARP is subject to additional risks, assumptions and uncertainties detailed from time to time in the reports filed by ARP. with the U.S. Securities and Exchange Commission, including the risks, assumptions and uncertainties described in ARP’s registration statement on Form 10 and quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Forward-looking statements speak only as of the date hereof, and ARP does not assume any obligation to update such statements, except as may be required by applicable law. 2 <#>
  • 3. Organizational Structure Atlas Energy L.P. (NYSE: ATLS) Public Unitholders 63% LP & 2% GP Interest 35% LP Interest NYSE: ARP 3 <#>
  • 4. ARP Investment Highlights • Low Risk Profile • Long-lived reserve base • Strong hedging program • Low leverage position • Fee-based income stream from investment partnerships • Multiple Opportunities to Grow Cash Flow • Accretive Acquisitions • Organic Leasehold Expansion • Development through Investment Partnership Business • Uniquely Advantaged Business Model • Leading Sponsor of Tax Advantaged Investment Partnerships • Enhanced rate of return • Raised > $1.5 billion over last 6 years • Production and Drilling Opportunities in Attractive Plays • Marcellus & Utica Shales • Mississippi Lime • Barnett Shale 4 <#>
  • 5. “The First Three Weeks” ARP has already demonstrated its ability to provide strong value to its unitholders through accretive transactions 3/14/2012 ARP units are distributed to existing Atlas Energy, LP (ATLS) unitholders 3/16/2012 Two days later, ARP announces acquisition of 277 Bcfe of proved reserves and undeveloped locations in the Barnett Shale from Carrizo 4/4/2012 Two weeks later, ARP announces joint venture with Equal Energy, Ltd. in the core of the Mississippi Lime play in northwestern OK 5 <#>
  • 6. ARP Profile Atlas Resource Partners (NYSE: ARP) Market Capitalization ~ $900 million (32.2 MM common units outstanding)(1) Debt Outstanding $70 million(1) ($250 million borrowing base) Enterprise Value ~ $970 million Proved Reserves ~ 450 Bcfe(1) (~ 70% proved developed) ~ 825 Bcfe total reserves under management Oil & Gas Production ~ 70 Mmcfe/d(1) Focused Development Areas Appalachia (PA, OH, WV, TN); Colorado; Texas; Oklahoma Primary Targeted Plays Marcellus Shale; Utica Shale; Mississippi Lime; Barnett Shale As of 4/13/2012 (pro forma for Barnett acquisition):(1) Pro forma for additional 6 MM common units issued in conjunction with a private placement , as well as borrowings made on ARP’s credit facility, to fund the Barnett Shale assets acquired in April 2012 6 <#>
  • 7. Barnett Shale Transaction Atlas Resource Partners (NYSE: “ARP”) announced the acquisition of approximately 277 Bcfe of proved reserves in Texas’s Barnett Shale for approximately $190 MM from Carrizo Oil and Gas Provides ARP with entry point into the core of the Barnett Shale Transaction is expected to be accretive to 2H 2012 and FY 2013 common unit distributions ARP has hedged 100% of available production in the 1st year and a substantial amount in years 2-5 Pro forma for the transaction, ARP will remain under-leveraged at 0.9x Debt / EBITDA, substantially below the peer average; balance sheet flexibility allows for future expansion opportunities Transaction is expected to close in late April 2012 7 <#>
  • 8. Asset OverviewAtlas Asset DetailsChesapeake EnergyDevon EnergyEOG Resources Majority of the assets located in theEVEPQuicksilver Resources Core portion of the Barnett Shale Atlas Position Most assets located in the Mansfield region of Southeast Tarrant County and Southern Denton County 277 Bcfe of proved reserves; 99% gas, 52% PDP 198 gross producing wells; ~ 60% operated 97 Gross PUD & PDNP locations All acreage is held by production 8<#>
  • 9. Projected Accretion to Common Unitholders The acquisition of the Barnett Shale assets will be accretive to ARP common unit distributions 2H 2012 Common Unit Distributions 2013 Common Unit Distributions $1.00 $2.50 2H 2012 Accretion 2013 % Accretion 6% - 12% 7% - 15% $2.40 $0.90 $2.25 - $2.40 $0.85 - $0.90 Distribution per Common UnitDistribution per Common Unit $2.30 $0.80 $0.80 $2.20 $2.10 $2.10 $0.70 $2.00 $1.90 $0.60 Standalone Pro Forma Standalone Pro Forma 9 <#>
  • 10. Strong Gas Hedge Position Natural Gas Within 2 days of signing the $2.67 PSA with CRZO, ARP $3.44 $3.90 hedged 100% of its forward $4.15 12 month Barnett production, and a substantial amount of $4.68 $5.12 $5.08 $5.27 $4.40 the production for the $4.77 subsequent four years Crude Oil ARP continues to employ a consistent hedge strategy to ensure stability of its cash $90 – $90 – $80 – $80 – flow streams $117.91 $116.40 $121.25 $120.75 $103.58 $100.57 $97.69 $93.97 $92.08Prices shown are per thousand cubic feet (Mcf) for natural gas and per barrel (bbl) for oilCostless collar prices represent the floor and ceiling price established in the collar position.For natural gas hedges, price includes an estimated positive basis differential and Btu (British thermal unit) adjustment 10 <#>
  • 11. Pro Forma Reserve Summary The Barnett acquisition more than doubles ARP’s proved reserves and enhances the long-lived nature of its asset base 900 825 800 700 600 500 450 PUD/PDNP Bcfe 400 PDP 300 200 100 0 Net Pro Forma Reserves Total Managed Reserves (1) Based on 12/31/2011 reserve totals.11 <#>
  • 12. Comparable Peer Credit Profiles ARP plans to be one of the least levered companies in the E&P MLP sector with ample capacity to continue taking advantage of new opportunities that present themselves in the marketplace 2012E Debt / EBITDA (in mi lli ons $) Pro Forma(1) 5.0x December 31, 2011 4.4x Cash & Cash Equivalents $77.2 4.0x Credit Facility Borrowings $70.0 Partners Capital $707.3 Total Capitalization $854.5 2.9x 3.0x 2.7x 2.6x 2.5x 2.0x 1.6x 0.9x 1.0x 0.3x 0.0x A B C D E F ARP G(1) Pro forma for additional 6 MM common units issued in conjunction with a private placement , as well as borrowings made on ARP’s credit facility, to fund the Barnett Shale assets acquired in April 2012 <#> Source: Company Filings; FactSet. Comp group includes PSE, LINE, VNR, EVEP, BBEP, LGCY and QRE. 12 Note: Assumes ARP finances 2012 capital program with borrowings on existing credit facility.
  • 13. Mississippi Lime JV Position • ARP entered into a joint venture with Equal Energy (NYSE, TSX: EQU) to acquire a 50% interest in ~ 14,500 acres in the core of the Mississippi Lime play in northwestern OK • Acreage is located in Alfalfa, Grant and Garfield counties; oil & ARP/EQU liquids rich portion of the play JV Position • Position is primarily held by existing production in the Hunton formation • Joint venture transaction is expected to close in late April 2012 13 <#>
  • 14. Multiple Growth Drivers Development through Accretive Acquisitions Organic Leasehold Expansion Investment Partnership Programs Balanced and focused approach to growth provides multiple avenues for accretive cash flow expansion <#>
  • 15. Partnership Management:Strong History of Growth Over $1.5B in 40 year history funds raised in of fundraising the past 5 years Partnership Management Business Over 50,000 120+ broker individual dealers selling investors programs in all 50 states 15<#>
  • 16. Syndication Business Model Value to Value to Drilling Partners Atlas Resource • Substantial 1st year tax deduction • Upfront fees from fundraising; (~90% of investment) against 15-18% over costs paid by partners ordinary income • Carried interest of 5-7% in • Monthly cash flows from production; total working interest production of wells of ~30% • Tax deductions beyond 1st year • Ongoing monthly fees for life of for depletion and depreciation the well • Credit received for cost paid for leasehold acreage 16 <#>
  • 17. GP Sponsor of E&P Investment Programs:Growth in Fees and Production Cash Flow $100.00 $90.00 Partnership Margin (mm$) (1) $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $- $- $50 $100 $150 $200 $250 $300 $350 $400 Funds Raised (mm$) • Sponsorship of Investment Programs provide ATLS with up-front fees and on-going fees, as well as a promoted interest in the production of oil and gas wells (1) Partnership margin is comprised of Well Construction & Completion margin, Well Services margin and Administration & Oversight Fees 17 <#>
  • 18. Foundational Core Producing Assets NY Appalachia: • > 8,500 producing wells OH PA • 31.5 Mmcfe/d of net production as of Q4 2011 • Atlas is connecting 16 Marcellus wells in Q1 2012 (11 newly drilled wells + 5 re-connected); 8 turned online in March 2012 • Atlas also plans to drill several new Marcellus wells in northeastern TN PA in upcoming fundraising programs Niobrara: WY NE • 180,000 acres through farm-in arrangement in NE Colorado CO KS IL IN New Albany: • ~130,000 net acres (~ 83% undeveloped) • 3.1 Mmcf/d in net production as of Q4 2011 18 <#>
  • 19. Appalachia Assets Reserves > 80% PDP; >90% natural gas Over 8,500 producing wells located in PA, OH and NY Low-declining production, long lived wells Provides a solid base of cash flow Over 70% of the existing wells have been drilled through the syndicated programs over the years Includes over 200 vertical wells and 30 horizontal wells in the Marcellus Shale (additional horizontal wells to be completed and TIL this year) ARP plans to drill several new Marcellus horizontal wells in the northeastern PA region in 2012 through the investment partnership business Represents ARP’ first development in this region of the Marcellus Shale 19 <#>
  • 20. Ohio Operations Atlas Energy Has Over 2,900 Wells In OhioARP’s Ohio operations:– Over 2,900 producing wells– 75,000+ developed net acres Deerfield District– Long lived reserves with low decline (9 Office MMcf/d of gross production) New Philadelphia District OfficeARP has existing land operations in easternOhio to take advantage of development Cambridge Districtopportunities in the region Office 20 <#>
  • 21. 21<#>