Atlas Energy Resources — Investor Presentation (September 2007)
30 slides from Atlas Energy Resources's investor presentation, Sep 10, 2007
Slide 1: Safe Harbor Statement
Safe Harbor Statement THE WORDS “BELIEVES, ANTICIPATES, EXPECTS” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD LOOK
Slide 2: Atlas Energy Resources, LLC
Atlas Energy Resources, LLC Net Atlas Proved Reserves (1) 795 Bcfe Proved Reserves Managed for Others 308 Bcfe Total Proved Reserves Managed by Atlas 1,103 Bcfe Over 1.1 Trillion Mcfe of Natural Gas Reserves Under Management Reflect proved reserve quantities in Appalachia as of 12/31/06 and proved r
Slide 3: Atlas Energy Gas and Oil Operations
Appalachian Primary Areas of Operation Michigan Primary Areas of Operation Proved Reserves Proved Reserves Net Proved Reserves as of 12/31/06 181 Bcfe Net Proved Reserves as of 6/30/07 614 Bcfe Current Average Daily Production 30 Mmcfe / d Current Average Daily Production 60 Mmcfe / d Reserve Life (
Slide 4: Gas and Oil Production Partnership Management
Gas and Oil Production Partnership Management Atlas Energy’s Unique Business Model: Scaleable, Low Risk, High Return • Leading sponsor of tax advantaged investment partnerships – Raised $218 million 2006 – Expect to raise at least $340 million in 2007 • Enhanced rates of returns on our capital – Gen
Slide 5: Investment Highlights
Investment Highlights Dynamic approach to growth – Among 10 most active drillers in the country; over 1,100 wells to be drilled in – Completed accretive acquisitions for $1.3 billion in first nine months since IPO (December 2006) Continuing success in exceeding expectations – Increased guidance for
Slide 6: Partnership Management Summary
Partnership Management Summary
Slide 7: Atlas Energy Resources, LLC
Atlas Energy Resources, LLC
Slide 8: Investment Partnerships Enhance Returns to Atlas Energy
ATN Net Investment Assumptions IRR to ATN Investment Partnerships Enhance Returns to Atlas Energy ATN Partnership Contribution $(104,500) Plus: Land Contribution 11,300 Plus: Administrative Fee 15,000 Plus: Well Construction Mark-Up 36,750 ATN Net Investment $(41,450) EUR 156 Mmcfe Realized natural
Slide 9: Net Investment Assumptions and Anticipated IRR to Investor
Net Investment Assumptions Anticipated IRR to Investor Investment $10,000 Realized Natural Gas Price $8.00 Total Well EUR 156 Mmcf Decline Profile Typical Appalachia Federal Tax Rate 35% State Tax Rate 5% Gas Price Sensitivity IRR @ $10.00 Mcf 27% IRR @ $8.00 Mcf 19% IRR @ $6.00 Mcf 9% Base Case ($1
Slide 10: ATN: Partnership Funds Raised
Capital Raised ($MM) $75.1 $111.6 $156.9 $218.5 $200.0 YTD $340.0 (Expected ) 0.0 50.0 100.0 150.0 200.0 250.0 300.0 $350.0 2007E ATN: Partnership Funds Raised
Slide 11: ATN: Partnership Management Segment Margin
Segment Margin ($MM) $60.0 – $70.0 $19.4 $24.8 $33.8 $43.3 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 $80.0 2007E ATN: Partnership Management Segment Margin
Slide 12: Partnership Management Business has Large Barriers to Entry
• ATN has the trust of the financial planning community – 35+ years of continuous programs • Diverse base of broker dealers and investors would take years to cultivate – More than 100 separate broker dealers are selling our programs in 2007, up from 80 in – AIG, ING, Lincoln Financial, Mass Mutual,
Slide 13: Appalachian Gas and Oil Asset Overview
Appalachian Gas and Oil Asset Overview
Slide 14: Operational Highlights Primary Areas of Operation
Operational Highlights Primary Areas of Operation Atlas Energy Gas and Oil Operations – Appalachia • Atlas Energy Appalachia is one of the largest operators in the Appalachian Basin – Operate over 6,700 wells producing over 90 Mmcfe per day – Will drill over 1,000 wells in 2007 • Wells produce 30 to
Slide 15: Atlas Energy Resources, LLC
Atlas Energy Resources, LLC
Slide 16: Gas and Oil Production - Appalachia
Production (Bcfe) 10.3 – 10.7 9.9 8.7 8.4 7.9 7.0 8.0 9.0 10.0 11.0 2007E Gas and Oil Production - Appalachia
Slide 17: Appalachia Gas and Oil Segment Margin
Segment Margin ($MM) Appalachia Gas and Oil Segment Margin $75 - $85 $32.2 $44.0 $64.1 $74.6 0.0 20.0 40.0 60.0 80.0 100.0 2007E
Slide 18: Michigan Gas and Oil Asset Overview
Michigan Gas and Oil Asset Overview
Slide 19: Michigan Antrim Shale
Michigan Antrim Shale Atlas Energy Gas and Oil Operations – Michigan Antrim Shale • Antrim has been producing since the 1940 ’ s • Drilling nuisance until the 1980 ’ s • Section 29 tax credit and existing infrastructure created drilling boom • One of first shale plays to evolve and mature
Slide 20: Antrim Shale – Michigan Operational Highlights
Antrim Shale – Michigan Operational Highlights Net Acreage 294,000 Developed 228,000 Undeveloped 66,000 Net Reserves (Bcfe) 613.7 Identified Future Drilling and Recompletion Locations Current Daily Net Production (Mmcfe/d) Atlas Energy Gas and Oil Operations – Michigan • ATN Michigan is now the larg
Slide 21: Antrim Economics: Cost Analysis and Type Curve
Cost Analysis Typical Type Curve Historical Drilling Costs ($MM / well) IRRs at Various Gas Prices Years $290 $288 $295 $289 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% $5.00 $6.00 $7.00 $8.00 $9.00 Atlas Energy Gas and Oil Operations – Antrim Economics Capital Costs Amount ($) D
Slide 22: Atlas Energy Resources, LLC
tlas Energy esources, LLC
Slide 23: Acquisition Strategy
Acquisition Strategy • Third Party Acquisitions of Proved Producing Properties: – Sustained accretion to distributable cash flow per share – Long-lived established production – Minimal technical / reserve risk – Aggressive use of hedging to secure future cash flow • Acreage and Drilling Locations to
Slide 24: Atlas Energy Resources, LLC
tlas Energy esources, LLC
Slide 25: Financial Snapshot
As of % of ($ in millions) June 30, 2007 Capitalization Cash and Cash Equivalents $5.6 Revolving Credit Facility $713.9 46.7% Other Secured Debt 0.0 0.0% Total Debt $713.9 46.7% Total Stockholder's Equity $815.1 53.3% Total Capitalization $1,529.0 100.0% Credit Metrics Total Debt / Book Capitalizati
Slide 26: Atlas Energy Financial Performance: EBITDA
EBITDA ($MM) Atlas Energy Financial Performance $62.3 $80.6 $94.6 $175 - $190 2007E
Slide 27: Attractive Distribution Yield
7.08% 3.58% 5.47% 5.65% 6.08% 6.27% 4.35% 5.37% 5.76% 6.83% 7.24% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% Atlas Energy Resources LLC Public MLP General Partners Mid Cap Pipeline/ Midstream MLPs MLP Average Coal MLPs Large Cap Pipeline/ Midstream MLPs Constellation Energy Partners, LP B
Slide 28: Atlas Energy Resources, LLC
tlas Energy esources, LLC
Slide 29: Hedged Production Volume and Key Attributes of Distribution Stability
Hedged Production Volume Key Attributes of Distribution Stability 88% 81% 70% 56% 53% 27% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% – $2.00 $4.00 $6.00 $8.00 $10.00 % Hedged Average Hedge Price Distribution Stability • Fee based revenues from investment partnerships • Long-lived, high success rate
Slide 30: Atlas Energy Hedges
Fixed Price Swaps Costless Collars Avg. Hedge Avg. Hedge (%) Floor Ceiling Calendar Year Hedged (2)(4) ($ / Mcf) (1)(3) ($ / Mcf) (1)(3) 2% $8.42 $9.59 2% $8.42 $10.43 – – – 3% $8.70 $9.76 9% $8.45 $9.46 Avg. Hedge (%) Price Calendar Year Hedged (2) ($ / Mcf) (1)(3) 86% $8.89 79% $9.23 70% $8.94 53%
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