Atlas Pipeline Partners, L.P. Accelerates Growth, Adds Margin Protection And Confirms Guidance -- Announces acceleration of WestTX 200 mmcfd Driver expansion to early 2013 -- Partnership enters into long-term POP deal with largest producer in Mississippi Lime formation -- Reaffirms 2013 Adjusted EBITDA guidance of $310-360 Million PR Newswire PHILADELPHIA, Jan. 14, 2013 PHILADELPHIA, Jan. 14, 2013 /PRNewswire/ --Atlas Pipeline Partners, L.P. (NYSE: APL) ("APL", "Atlas Pipeline", or the "Partnership") announced today that the Partnership is updating the timing of its WestTX expansion, the 200 Million cubic feet per day ("mmcfd") Driver cryogenic processing facility. This facility was originally expected to come online in two phases with phase one online in 1Q'13 and phase two online in 1Q'14, with each phase consisting of 100 mmcfd of processing capacity. The Driver facility is now expected to have the entire 200 mmcfd come online by the end of the first quarter or early second quarter of 2013. Based on the continued volume growth from the Partnership's producer customers in the Permian Basin, management expects to utilize approximately 60% of the Driver facility's capacity at start-up and anticipates steady growth in volumes throughout the year. Management is also pleased to announce that the Partnership has entered into a new contract with SandRidge Energy, Inc. ("SandRidge") (NYSE: SD). SandRidge is currently the Partnership's largest producer customer in the Mississippian Lime. The new agreement, a five year contract commencing January 1, 2013, is extendable at the option of SandRidge to a nine year term if a minimum level of throughput volume is met. It is a percent-of-proceeds (POP) contract, complimented by additional fixed-fee gathering cash flow associated with underlying throughput volumes from SandRidge. At the termination of the existing contract, all volumes under that agreement will be transferred to this new agreement, materially reducing the Partnership's keep-whole exposure. In addition to the extension in tenor from the previous contract, SandRidge has agreed to dedicate three additional areas in Southern Kansas, including Harper, Sumner, and Cowley counties. Including the originally dedicated areas within SandRidge's Oklahoma Mississippian position, the new agreement now includes the majority of SandRidge's developed acreage within the burgeoning Mississippi Lime formation. "We are pleased to be announcing a new long term agreement with a key producer in the Mississippi Lime as well as the acceleration of the start of the full Driver plant in West Texas within the next couple of months. These positive developments will secure future growth through our growing relationships with our producer customers. Accordingly, we have added a significant amount of further protection through our risk management program that will preserve margin over the next several years. We will continue to pursue additional value creation opportunities for the long term for our customers, stakeholders, and employees", stated Eugene Dubay, Chief Executive Officer of the Partnership. As a result of this new POP agreement with SandRidge, the Partnership has added significant natural gas protection to its risk management portfolio, as well as continuing to elongate the program and adding further margin protection through hedging activities. Atlas Pipeline now has 76% of expected 2013 margin protected (ex-ethane) and a full table of risk management positions is included at the end of this release. The Partnership is reaffirming its guidance for 2013 for Adjusted EBITDA of $310 - $360 Million based on current commodity prices and management's volume expectations. These forecasted amounts are based on various assumptions, including, among others, the Partnership's expected cost and timing for completion of its announced capital expenditure program, timing of incremental volumes on its gathering and processing systems, known contract structures, scheduled maintenance of facilities including those of third-parties that impact the Partnership's operations, estimated interest rates, and budgeted operating and general administrative costs. Management does not forecast certain items, including GAAP revenues, depreciation, amortization, and non-cash changes in derivatives, and therefore is unable to provide forecasted Net Income, a comparable GAAP measure, for the periods presented. The reconciling items between these non-GAAP measures and Net Income are expected to be similar to those for the most recently completed quarterly period and are not expected to be significant to the Partnership's cash flows. ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES Unaudited Current Commodity Risk Management Positions (as of January 9, 2013) Note: The natural gas, natural gas liquid and condensate price risk management positions shown below represent the contracts in place through December 31, 2015. NGL contracts are traded at Mt. Belvieu unless otherwise disclosed. SWAP CONTRACTS NATURAL GAS HEDGES Purchased Avg. Production Period /Sold Commodity MMBTUs Fixed Price 2Q 2013 Sold Natural gas 600,000 3.43 3Q 2013 Sold Natural gas 600,000 3.52 4Q 2013 Sold Natural gas 1,000,000 3.60 1Q 2014 Sold Natural gas 1,350,000 3.90 2Q 2014 Sold Natural gas 2,350,000 3.86 3Q 2014 Sold Natural gas 2,350,000 3.89 4Q 2014 Sold Natural gas 2,350,000 3.96 1Q 2015 Sold Natural gas 1,000,000 4.24 2Q 2015 Sold Natural gas 1,000,000 4.00 3Q 2015 Sold Natural gas 1,000,000 4.06 4Q 2015 Sold Natural gas 1,000,000 4.23 NATURAL GAS LIQUIDS HEDGES Purchased Avg. Production Period /Sold Commodity Gallons Fixed Price 1Q 2013 Sold Propane - 3,780,000 0.94 Conway 1Q 2013 Sold Propane 9,072,000 1.22 1Q 2013 Sold Isobutane 504,000 1.86 1Q 2013 Sold Normal butane 1,134,000 1.66 2Q 2013 Sold Propane - 1,260,000 1.06 Conway 2Q 2013 Sold Propane 10,836,000 1.27 2Q 2013 Sold Isobutane 630,000 1.77 2Q 2013 Sold Normal butane 1,260,000 1.66 3Q 2013 Sold Propane - 1,260,000 1.06 Conway 3Q 2013 Sold Propane 11,718,000 1.28 4Q 2013 Sold Propane - 1,260,000 1.06 Conway 4Q 2013 Sold Propane 12,222,000 1.28 1Q 2014 Sold Propane 6,930,000 1.02 1Q 2014 Sold Natural 1,260,000 2.08 gasoline 2Q 2014 Sold Propane 3,780,000 1.00 2Q 2014 Sold Normal butane 1,260,000 1.50 2Q 2014 Sold Natural 2,520,000 1.92 gasoline 3Q 2014 Sold Propane 3,780,000 1.00 3Q 2014 Sold Normal butane 1,260,000 1.50 3Q 2014 Sold Natural 1,890,000 1.92 gasoline 4Q 2014 Sold Propane 3,780,000 1.00 4Q 2014 Sold Normal butane 1,260,000 1.53 4Q 2014 Sold Natural 1,890,000 1.93 gasoline 1Q 2015 Sold Natural 630,000 1.97 gasoline 2Q 2015 Sold Natural 630,000 1.97 gasoline 3Q 2015 Sold Natural 630,000 1.97 gasoline 4Q 2015 Sold Natural 630,000 1.97 gasoline CONDENSATE HEDGES Purchased Avg. Production Period /Sold Commodity Barrels Fixed Price 1Q 2013 Sold Crude 93,000 97.49 2Q 2013 Sold Crude 99,000 97.33 3Q 2013 Sold Crude 78,000 97.08 4Q 2013 Sold Crude 75,000 96.66 1Q 2014 Sold Crude 78,000 95.49 2Q 2014 Sold Crude 75,000 93.12 3Q 2014 Sold Crude 75,000 89.86 4Q 2014 Sold Crude 30,000 88.09 OPTION CONTRACTS NGL OPTIONS Production Avg. Period Purchased/Sold Type Commodity Gallons Strike Price 1Q 2013 Purchased Put Isobutane 504,000 1.79 1Q 2013 Purchased Put Normal Butane 1,512,000 1.74 1Q 2013 Purchased Put Natural 5,292,000 2.15 Gasoline 2Q 2013 Purchased Put Isobutane 630,000 1.72 2Q 2013 Purchased Put Normal Butane 1,638,000 1.66 2Q 2013 Purchased Put Natural 5,796,000 2.10 Gasoline 3Q 2013 Purchased Put Isobutane 1,512,000 1.66 3Q 2013 Purchased Put Normal Butane 3,528,000 1.64 3Q 2013 Purchased Put Natural 6,300,000 2.09 Gasoline 4Q 2013 Purchased Put Isobutane 1,512,000 1.66 4Q 2013 Purchased Put Normal Butane 3,780,000 1.66 4Q 2013 Purchased Put Natural 6,552,000 2.09 Gasoline CRUDE OPTIONS Production Avg. Period Purchased/Sold Type Commodity Barrels Strike Price 1Q 2013 Purchased Put Crude Oil 66,000 100.10 2Q 2013 Purchased Put Crude Oil 69,000 100.10 3Q 2013 Purchased Put Crude Oil 72,000 100.10 4Q 2013 Purchased Put Crude Oil 75,000 100.10 1Q 2014 Purchased Put Crude Oil 166,500 101.86 2Q 2014 Purchased Put Crude Oil 45,000 88.18 3Q 2014 Purchased Put Crude Oil 60,000 88.85 4Q 2014 Purchased Put Crude Oil 90,000 91.56 1Q 2015 Purchased Put Crude Oil 15,000 91.00 2Q 2015 Purchased Put Crude Oil 15,000 90.25 3Q 2015 Purchased Put Crude Oil 15,000 89.85 4Q 2015 Purchased Put Crude Oil 15,000 89.35 Atlas Pipeline Partners, L.P. (NYSE: APL) is active in the gathering and processing segments of the midstream natural gas industry. In Oklahoma, southern Kansas, northern and western Texas, and Tennessee, APL owns and operates 12 active gas processing plants, 18 gas treating facilities as well as approximately 10,100 miles of active intrastate gas gathering pipeline. APL also has a 20% interest in West Texas LPG Pipeline Limited Partnership, which is operated by Chevron Corporation. For more information, visit the Partnership's website at www.atlaspipeline.com or contact IR@atlaspipeline.com. Atlas Energy, L.P. (NYSE: ATLS) is a master limited partnership which owns and operates the general partner of its midstream oil & gas subsidiary, Atlas Pipeline Partners, L.P., through all of the general partner interest, all the incentive distribution rights and an approximate 9% limited partner interest. Additionally, Atlas Energy owns all of the general partner Class A units and incentive distribution rights and an approximate 44% limited partner interest in its upstream oil & gas subsidiary, Atlas Resource Partners, L.P. For more information, please visit the Partnership's website at www.atlasenergy.com, or contact Investor Relations at InvestorRelations@atlasenergy.com. Certain matters discussed within this press release are forward-looking statements. Although Atlas Pipeline Partners, L.P. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Atlas Pipeline does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in commodity process and local or national economic conditions and other risks detailed from time to time in Atlas Pipeline's reports filed with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Contact: Matthew Skelly Vice President Investor Relations 1845 Walnut Street Philadelphia, PA 19103 (877) 950-7473 (215) 561-5692 (facsimile) SOURCE Atlas Pipeline Partners, L.P. Website: http://www.atlaspipeline.com Website: http://www.atlasenergy.com
Atlas Pipeline Partners, L.P. Accelerates Growth, Adds Margin Protection And Confirms Guidance
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