Atlas Resource Partners, L.P. (ARP) (“Atlas Resource Partners” or “ARP”) and Atlas Energy Group, LLC (ATLS) (“Atlas Energy Group” or “ATLS”) announce today that ARP has agreed to acquire natural gas producing properties in the Arkoma basin from its parent company, ATLS, for $35.5 million. The purchase price is subject to customary closing conditions and adjustments and the transaction is expected to close in the second quarter 2015.
Daniel C. Herz, Chief Executive Officer – ARP and President of ATLS, stated, “Retaining the assets within the Atlas complex should benefit both ATLS and ARP. The steady cash flow, coupled with upside from higher natural gas prices, makes the Arkoma assets ideal for ARP. Additionally, the transaction is immediately accretive to ARP’s distributable cash flow per unit, while the financing also enhances ARP’s balance sheet and liquidity position.”
The Arkoma assets consist of approximately 41 billion cubic feet (“Bcf”) of mature, low-decline natural gas reserves, which currently produces approximately 11 million cubic feet per day from over 550 active wells. The reserve information presented above is based solely on internal evaluation and interpretation in the course of due diligence with respect to the pending acquisition and has not been verified or estimated by independent reserve engineers.
ATLS expects to use the net proceeds from the sale of the Arkoma assets to pay down a portion of its existing term loan, which had an outstanding balance of $104.4 million as of March 31, 2015.
The terms of the acquisition were recommended for approval by the Conflicts Committee (“Committee”) of the board of managers of Atlas Energy Holdings Operating Company LLC, which is a wholly owned subsidiary of ARP. The Committee is comprised entirely of independent directors and was advised by Stifel regarding financial matters and Covington & Burling LLP and Paul Hastings LLP regarding legal matters. The board of directors of ATLS was advised by Evercore regarding financial matters and Jones Day regarding legal matters.
Atlas Resource Partners, L.P. (ARP) is an exploration & production master limited partnership which owns an interest in over 14,000 producing natural gas and oil wells, located primarily in Appalachia, the Barnett Shale (TX), the Mississippi Lime (OK), the Eagle Ford Shale (TX), the Raton Basin (NM), Black Warrior Basin (AL) and the Rangely Field (CO). ARP is also the largest sponsor of natural gas and oil investment partnerships in the U.S. For more information, please visit our website at www.atlasresourcepartners.com, or contact Investor Relations atInvestorRelations@atlasenergy.com.
Atlas Energy Group, LLC (ATLS) is a master limited partnership which owns the following interests: all of the general partner interest, incentive distribution rights and an approximate 28% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P.; the general partner interests, incentive distribution rights and limited partner interests in its private E&P development subsidiary; 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 atInvestorRelations@atlasenergy.com.