SOURCE: Atlas America, Inc.

November 05, 2007 23:08 ET

Atlas America, Inc. Reports Record Financial Results for the Third Quarter 2007

Recent Acquisitions by Atlas Pipeline and Atlas Energy Provide Significant Increase to Revenues and Earnings

PHILADELPHIA, PA--(Marketwire - November 5, 2007) - Atlas America Inc. (NASDAQ: ATLS) ("Atlas America" or "the Company") reported adjusted earnings before interest, income taxes, depreciation and amortization ("EBITDA"), a non-GAAP measure, of $132.4 million for the three months ended September 30, 2007, compared with $35.8 million for the comparable prior year period, an increase of $96.6 million. The increase in adjusted EBITDA is due primarily to the contribution from the interest in the natural gas gathering and processing assets purchased from Anadarko Petroleum Corporation (NYSE: APC) ("Anadarko") by Atlas Pipeline Partners, L.P. (NYSE: APL) ("Atlas Pipeline"), and from the natural gas and oil producing assets purchased from DTE Energy Company (NYSE: DTE) by Atlas Energy Resources, LLC (NYSE: ATN) ("Atlas Energy") in the current quarter. Further detail on the respective acquisitions is provided below.

Net income for the three months ended September 30, 2007 was $7.1 million, compared with $10.0 million for the comparable prior year period, representing a decrease of $2.9 million. After accounting for certain items, Adjusted Net Income was $12.7 million for the third quarter 2007, compared to Adjusted Net Income of $10.0 million for the comparable prior year period. Adjusted Net Income per diluted common share was $0.45 for the third quarter 2007, compared to $0.33 per common share for the third quarter 2006, an increase of $0.12 per share. The increase in Adjusted Net Income is due primarily to higher overall volumes provided by the assets acquired by Atlas Pipeline and Atlas Energy in the current quarter. Total revenues reached $411.5 million for the third quarter 2007, compared to $190.6 million in the prior year comparable period, an increase of $220.9 million. A schedule is provided at the end of this release to reconcile net income to Adjusted EBITDA and Adjusted Net Income.

On October 23, 2007, the Company announced that its Board of Directors had declared a cash dividend of $0.05 per share of common stock, payable on November 14, 2007, to holders of record on November 7, 2007.

"We are pleased by the results this quarter from our growing businesses," stated Edward E. Cohen, Chairman and Chief Executive Officer of the Company. "As these companies continue to expand their operations, we will look for additional opportunities to increase the returns to our shareholders."

Recent Acquisitions

On July 27, 2007, for a payment of approximately $1.9 billion, Atlas Pipeline acquired control of Anadarko's 100% interest in the Chaney Dell natural gas gathering system and processing plants located in Oklahoma and its 72.8% undivided joint interest in the Midkiff/Benedum natural gas gathering system and processing plants located in Texas (the "Assets"). (The Company owns an approximate 64% common unit interest in the parent of Atlas Pipeline's general partner, Atlas Pipeline Holdings, L.P. (NYSE: AHD) ("Atlas Holdings")). The Chaney Dell System includes 3,470 miles of gathering pipeline and three processing plants, and the Midkiff/Benedum System includes 2,500 miles of gathering pipeline and two processing plants. The transaction was effected by the formation of two joint venture companies which own the respective systems. In connection with this acquisition, Atlas Pipeline reached an agreement with Pioneer Natural Resources Company (NYSE: PXD) ("Pioneer"), which held a right of first refusal to purchase the Midkiff/Benedum system. Pioneer provides approximately 50% of the natural gas processed by the Midkiff/Benedum system under its obligation to connect its wells within a certain distance of the Midkiff/Benedum system. Under this new agreement, Pioneer waived its right of first refusal and extended its obligation to the Midkiff/Benedum system an additional 10 years through 2022. Atlas Pipeline granted to Pioneer, which currently holds a 27.2% interest in the Midkiff/Benedum system, an option to buy up to an additional 14.6% interest in the Midkiff/Benedum system one year after the closing of Atlas Pipeline's acquisition of Anadarko's interest, and up to an additional 7.5% interest two years after the closing of Atlas Pipeline's acquisition of Anadarko's interest. If the options are fully exercised, Pioneer would increase its interest in the system to approximately 49.2%. Pioneer would pay approximately $230 million, subject to certain adjustments, for the additional 22% interest if fully exercised. Atlas Pipeline will manage and control the Midkiff/Benedum system regardless of whether Pioneer exercises the purchase options.

Atlas Pipeline funded the purchase price of the acquisition in part from a private placement of 25.6 million common limited partner units, generating gross proceeds of $1.125 billion. Atlas Holdings purchased 3.8 million of the 25.6 million common limited partner units issued by Atlas Pipeline. Atlas Pipeline funded the remaining purchase price with an $830.0 million senior secured term loan which matures in July 2014 and a partial advance against a new $300.0 million senior secured revolving credit facility which matures in July 2013. Atlas Holdings, which owns all of the incentive distribution rights in Atlas Pipeline, has agreed to allocate a portion of its future incentive distribution rights back to Atlas Pipeline in connection with the Anadarko acquisition, namely up to $5.0 million of incentive distribution rights per quarter to Atlas Pipeline through the quarter ended June 30, 2009, and up to $3.75 million per quarter thereafter.

On June 29, 2007, Atlas Energy, of which the Company owns approximately 67% of the outstanding Class B common units as well as 100% of the Class A units and management incentive interests, acquired all of the outstanding equity interests of DTE Gas & Oil Company, now referred to as Atlas Gas & Oil ("AGO"), from DTE Energy Company for $1.268 billion. AGO's assets are located in the northern lower peninsula of Michigan on approximately 299,500 net developed acres and 65,600 net undeveloped acres and include interests in 2,234 natural gas wells with estimated proved reserves of approximately 611 billion cubic feet of natural gas equivalents. Atlas Energy funded the acquisition purchase price in part with a private placement of 24.0 million common and Class D units, generating gross proceeds of approximately $600.0 million. The remainder of the purchase price was funded with a new $850.0 million senior secured credit facility which expires in 2012.

Cash Distributions from Affiliates

Atlas Energy declared a record quarterly cash distribution of $0.55 per common unit for the third quarter 2007 with a distribution coverage ratio that exceeded 1.3x. This quarter's distribution will be paid on November 14, 2007 to common unitholders of record as of November 7, 2007. The Company will receive approximately $16.8 million in cash distributions from its ownership interest in Atlas Energy with regard to this quarterly distribution.

Atlas Holdings declared a quarterly cash distribution for the third quarter 2007 of $0.32 per common limited partner unit, which will be paid on November 19, 2007 to common unitholders of record as of November 7, 2007. The Company will receive approximately $5.6 million in cash distributions from its ownership interest in Atlas Holdings with regard to this quarterly distribution.

Based on the 2008 distribution guidance for Atlas Energy and Atlas Holdings, the Company expects to receive approximately $95 million to $100 million in common unit distributions next year.

Please see Atlas Energy's, Atlas Holdings' and Atlas Pipeline's respective earnings releases regarding their third quarter 2007 financial results.

Marcellus Shale Development

Based upon results from its previously announced initiative to drill Marcellus Shale wells, Atlas Energy intends to drill an additional 120 vertical Marcellus Shale wells during the next 18 months. As of September 30, 2007, Atlas Energy held oil and gas rights to approximately 240,000 acres (up from approximately 105,000 acres at year-end 2006) that it believes are prospective for the Marcellus Shale and it continues to expand its Marcellus Shale acreage position. Atlas Energy's present holdings alone, however, are believed capable of providing over 2,000 drilling locations, and it estimates that its present Marcellus leasehold may contain between 1.5 trillion cubic feet equivalent ("Tcfe") to 3.0 Tcfe of natural gas. (Atlas Energy cautions, however, that this estimate is based upon its evaluation of the wells that it has drilled and completed to date and that it cannot provide any assurance that the estimated reserves are recoverable, or that its estimate will not change over time. Atlas Energy's estimate has not yet been confirmed by its independent petroleum engineering consultants).

Of the thirteen vertical Marcellus Shale wells that Atlas Energy has drilled, ten have been completed as commercial producers and the remaining three are scheduled to be fractured and completed in the next thirty days. For the last five wells completed, stabilized initial rates of production into a pipeline have ranged from 1.0 million cubic feet per day ("Mmcf/d") to 1.8 Mmcf/d as compared to an average of below 0.5 Mmcf/d for the first five wells completed. Management believes that the significant improvement in results for the later wells is due to Atlas Energy's adjustments to drilling, completion and production techniques that it has refined since beginning its Marcellus drilling program approximately one year ago. Atlas Energy's experience with its existing Marcellus Shale wells suggests that production from the wells generally settles at about 30% to 40% of the initial stabilized rate of production after approximately 45 to 60 days of "flush" production and, thereafter, exhibits a shallow decline production profile. However, Atlas Energy has not yet determined the full decline curve or estimated productive life of a Marcellus Shale well.

As of today, each of Atlas Energy's Marcellus Shale wells has been drilled in southwestern Pennsylvania where it has approximately 160,000 prospective acres. Based upon data from these wells, the Marcellus Shale is found at depths between 7,800 and 8,100 feet, is between 120 feet and 150 feet thick, generally produces a dry natural gas stream having on average 1,020 British Thermal Units per thousand cubic feet of natural gas, and has average reservoir pressures in excess of 3,000 pounds per square inch.

Atlas Energy also holds oil and gas rights to approximately 80,000 additional acres in central and northwestern Pennsylvania which it believes may be suitable for Marcellus Shale development. Atlas Energy anticipates that it will drill several Marcellus Shale wells on this acreage over the coming months.

Based on experiences of other operators in the Barnett Shale and Fayetteville Shale, which are analogous to the Marcellus Shale, horizontal drilling has the potential to further enhance the economics of this play. Atlas Energy has spud a horizontal test well in a 50/50 joint venture with an industry participant and plans to complete the well in the next few months. The joint venture is designed to share the cost of the test and does not entitle either operator to any other rights.

Atlas Energy Results

-- On October 17, 2007, Atlas Energy's registration statement with the
   Securities and Exchange Commission for the Public #17-2007 (A) Drilling
   Program became effective. Atlas Energy expects to raise approximately
   $140 million in this program and expects to recognize well construction
   and administration fees from this program through the remainder of 2007
   and first quarter 2008. A written prospectus for the Public #17-2007 (A)
   Drilling Program meeting the requirements of Section 10 of the
   Securities Act may be obtained from Anthem Securities, Inc. (a
   subsidiary of Atlas Energy), 1550 Coraopolis Heights Rd. - 2nd Floor,
   Moon Township, PA 15108.

-- Atlas Energy drilled 298 gross wells in Appalachia and 64 gross wells
   in Michigan in the third quarter 2007. In addition, Atlas Energy
   connected 260 wells in Appalachia and 56 wells in Michigan in the third
   quarter 2007. Appalachia well drilling segment revenues increased by
   approximately $52.7 million, or over 200%, in the third quarter 2007
   compared to the similar quarter in the prior year.

-- At September 30, 2007, Atlas Energy held approximately 711,000 net acres
   in the Appalachian Basin, of which 467,000 were undeveloped, an increase
   of 38% from the net acreage position at September 30, 2006 and an 8%
   increase from June 30, 2007. Additionally, Atlas Energy has a joint
   venture with Knox Energy through December 2007, which provides an
   opportunity to drill wells on approximately 200,000 acres in Tennessee.
   At September 30, 2007, Atlas Energy had approximately 299,000 net
   undeveloped acres in the Antrim Shale in Michigan, and approximately
   66,000 net undeveloped acres.

-- Atlas Energy has identified approximately 3,360 geologically favorable
   shallow drilling locations on its acreage in the Appalachian Basin,
   which does not include any locations prospective for the Marcellus
   Shale. In addition, the Company has identified approximately 800
   drilling and re-completion opportunities in Michigan.

-- Atlas Energy had interests in over 10,300 gross wells September 30,
   2007, of which Atlas Energy operates approximately 83%, an increase
   of approximately 4% in gross wells from June 30, 2007.

-- Natural gas and oil production was 91.3 million cubic feet equivalents
   ("Mmcfe") per day for third quarter 2007, an increase of 60.2 Mmcfe per
   day from the quarter ended June 30, 2007. The increase is due primarily
   to the acquisition of the Antrim Shale production in Michigan, as well
   as increased production in Appalachia.

Atlas Pipeline Results

-- Atlas Pipeline's Mid-Continent segment recognized total revenue of
   $233.2 million for the third quarter 2007, an increase of $119.7 million
   from the prior year comparable quarter.  Total system volume in the
   Mid-Continent segment averaged 1,094.6 Mmcf per day for the third
   quarter 2007, an increase of approximately 521.1 Mmcf per day or
   approximately 96% from the prior year comparable period. The significant
   increase in system volumes was primarily due to the acquisition of the
   Chaney Dell and Midkiff/Benedum systems in northwestern Oklahoma and
   western Texas, respectively.

-- Total revenue for Atlas Pipeline's Appalachia system was $9.1 million
   for the third quarter 2007 compared with $7.1 million for the third
   quarter 2006, an increase of $2.0 million due principally to higher
   throughput volume and higher realized transportation rates.  Throughput
   volume increased to 71.9 Mmcfd for the third quarter 2007, approximately
   a 12% increase from the comparable prior year quarter, due primarily to
   increased well drilling by Atlas Energy.

Corporate and Other

-- General and administrative expense was $48.7 million for the third
   quarter 2007, an increase of $35.9 million from the prior year
   comparable period, primarily due to increases in non-cash stock
   compensation expense at Atlas Pipeline, as well as expenses related to
   the newly acquired assets by Atlas Energy and Atlas Pipeline in the
   current quarter.

-- Interest expense was $37.5 million for the third quarter 2007, an
   increase of $31.6 million from the prior year comparable period,
   primarily due to the financing of the assets acquired by Atlas Energy
   and Atlas Pipeline in the current quarter.

Interested parties are invited to access the live webcast of an investor call with management regarding Atlas America's third quarter results on Tuesday morning, November 6, 2007 at 9:00 am ET by going to the Investor Relations section of Atlas America's website at www.atlasamerica.com. An audio replay of the conference call will also be available beginning at 11:00 am ET on Tuesday, November 6, 2007. To access the replay, dial 1-888-286-8010 and enter conference code 72832809.

Atlas America, Inc. (NASDAQ: ATLS) owns an approximate 64% limited partner interest in Atlas Pipeline Holdings, L.P. (NYSE: AHD), which holds the general partner interest and 5.5 million limited partner units of Atlas Pipeline Partners, L.P. (NYSE: APL), and an approximate 67% Class B common unit interest and all of the Class A and management incentive interests in Atlas Energy Resources, LLC. For more information, please visit Atlas America's website at www.atlasamerica.com, or contact Investor Relations at bbegley@atlasamerica.com.

Atlas Energy Resources, LLC is an energy concern focused on the development and production of natural gas and, to a lesser extent, oil principally in the eastern United States. Atlas Energy sponsors and manages tax advantaged investment partnerships, in which it co-invests, to finance the exploration and development of its acreage in the Appalachian Basin and drills on its own account in the Antrim Shale of Michigan. For more information, visit Atlas Energy's website at www.atlasenergyresources.com or contact investor relations at bbegley@atlasamerica.com.

Atlas Pipeline Holdings, L.P. (NYSE: AHD) is a limited partnership which owns and operates the general partner of Atlas Pipeline Partners, L.P., through which it owns a 2% general partner interest, all the incentive distribution rights and approximately 5.5 million common units of Atlas Pipeline Partners.

Atlas Pipeline Partners, L.P. (NYSE: APL) is active in the transmission, gathering and processing segments of the midstream natural gas industry. In the Mid-Continent region of Oklahoma, Arkansas, northern and western Texas and the Texas panhandle, the Partnership owns and operates eight gas processing plants and a treating facility, as well as approximately 7,900 miles of active intrastate gas gathering pipeline and a 565-mile interstate natural gas pipeline. In Appalachia, it owns and operates approximately 1,600 miles of natural gas gathering pipelines in western Pennsylvania, western New York and eastern Ohio. For more information, visit Atlas Pipeline's website at www.atlaspipelinepartners.com or contact bbegley@atlaspipelinepartners.com.

Certain matters discussed within this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Atlas America, Inc. 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. Factors that could cause actual results to differ materially from expectations include financial performance, regulatory changes, inability of Atlas Pipeline or Atlas Energy to successfully integrate the operations at the acquired assets, changes in local or national economic conditions and other risks detailed from time to time in the Company'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.



                           ATLAS AMERICA, INC.
                    CONSOLIDATED STATEMENTS OF INCOME
                  (in thousands, except per share data)
                              (Unaudited)


                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------  --------------------
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------

REVENUES
Well construction and
 completion                     $ 103,324  $  50,641  $ 240,841  $ 135,329
Gas and oil production             63,265     21,888    109,840     66,696
Transmission, gathering and
 processing                       246,195    111,019    480,594    326,886
Administration and oversight        5,364      2,990     13,347      8,487
Well services                       4,845      3,346     12,721      9,498
Gain/(loss) on mark-to-market
 derivatives                      (11,467)       733    (16,036)       990
                                ---------  ---------  ---------  ---------
                                  411,526    190,617    841,307    547,886
                                ---------  ---------  ---------  ---------

COSTS AND EXPENSES
Well construction and
 completion                        89,847     44,037    209,427    117,677
Gas and oil production              9,887      2,315     14,412      6,437
Transmission, gathering and
 processing                       187,416     96,205    377,740    270,981
Well services                       2,515      1,752      6,705      5,540
General and administrative         48,923     13,159     85,229     34,238
Depreciation, depletion and
 amortization                      35,187     12,442     61,064     33,158
                                ---------  ---------  ---------  ---------
                                  373,775    169,910    754,577    468,031
                                ---------  ---------  ---------  ---------

OPERATING INCOME                   37,751     20,707     86,730     79,855

OTHER INCOME (EXPENSE)
Interest expense                  (37,480)    (5,932)   (53,681)   (19,448)
Minority interests                  6,402     (2,021)    14,992    (12,987)
Other, net                          3,526      3,518      6,425      4,643
                                ---------  ---------  ---------  ---------
                                  (27,552)    (4,435)   (32,264)   (27,792)
                                ---------  ---------  ---------  ---------

Income before income taxes         10,199     16,272     54,466     52,063
Provision for income taxes         (3,096)    (6,302)   (17,249)   (20,632)
                                ---------  ---------  ---------  ---------
Net income                      $   7,103  $   9,970  $  37,217  $  31,431
                                =========  =========  =========  =========

Net income per common share -
 basic                          $    0.26  $    0.34       1.36  $    1.06
                                =========  =========  =========  =========
Weighted average common shares
 outstanding - basic               26,853     29,396     27,345     29,759
                                =========  =========  =========  =========

Net income per common share -
 diluted                        $    0.25  $    0.33  $    1.31  $    1.03
                                =========  =========  =========  =========
Weighted average common shares
 outstanding - diluted             27,979     30,000     28,348     30,409
                                =========  =========  =========  =========


                             September 30, December 31,
                                 2007         2006
                              ----------- -----------
Balance Sheet Data
 (at period end):
   Cash and cash equivalents  $   113,812 $   185,401
   Property and equipment, net  4,189,603     884,812
   Total assets                 4,740,513   1,379,838
   Total debt                   1,922,045     324,151



                           ATLAS AMERICA, INC.
                         FINANCIAL INFORMATION
                              (Unaudited)


                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------- ---------------------
                                   2007      2006        2007      2006
                                ---------- ---------  ---------- ---------
Reconciliation of net income to
 non-GAAP measure(1):
  Net income                    $    7,103 $   9,970  $   37,217 $  31,431
  Interest expense                  37,480     5,932      53,681    19,448
  Provision for income taxes         3,096     6,302      17,249    20,632
  Depreciation, depletion and
   amortization                     35,187    12,442      61,064    33,158
                                ---------- ---------  ---------- ---------
     EBITDA                         82,866    34,646     169,211   104,669
  Loss/(gain) on mark-to-market
   derivatives                      14,933      (733)     19,502      (990)
  Non-recurring derivative fees         --        --       3,873        --
  Non-cash compensation expense     34,582     1,861      43,506     6,312
                                ---------- ---------  ---------- ---------
     Adjusted EBITDA            $  132,381 $  35,774  $  236,092 $ 109,991
                                ========== =========  ========== =========


                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------  --------------------
                                   2007       2006       2007       2006
                                ---------  ---------  ---------  ---------
Reconciliation of net income to
 adjusted net income:
  Net income                    $   7,103  $   9,970  $  37,217  $  31,431
    Non-recurring, non-cash
     stock compensation(2)         31,242         --     31,242         --
    Unrecognized economic impact
     of Atlas Pipeline's
     acquisition of the Chaney
     Dell and Midkiff/Benedum
     Assets(3)                     10,423         --     10,423         --
  Adjustment to reflect cash
   impact of derivatives            9,603        733     19,502        990
  Adjustment to minority
   interests for the above items  (43,251)      (646)   (65,303)      (646)
  Tax effect of the above items    (2,433)       (34)     1,310       (136)
                                ---------  ---------  ---------  ---------
   Adjusted net income          $  12,687  $  10,023  $  34,391  $  31,639
                                =========  =========  =========  =========

   Adjusted net income per
    common share:
       Basic                    $    0.47  $    0.34  $    1.26  $    1.06
                                =========  =========  =========  =========
       Diluted                  $    0.45  $    0.33  $    1.21  $    1.04
                                =========  =========  =========  =========

   Weighted average common
    shares outstanding:
       Basic                       26,853     29,396     27,345     29,759
                                =========  =========  =========  =========
       Diluted                     27,979     30,000     28,348     30,409
                                =========  =========  =========  =========

(1)  EBITDA is a non-GAAP financial measure under the rules of the
     Securities and Exchange Commission. Management of the Company believes
     that EBITDA provides additional information with respect to the
     Company's ability to meet its debt service, capital expense and
     working capital requirements. EBITDA is a commonly used measure by
     commercial banks, investment bankers, rating agencies and investors in
     evaluating an entity's performance relative to its peers. EBITDA is
     not a measure of financial performance under GAAP and, accordingly,
     should not be considered as a substitute for net income or cash flows
     from operating activities prepared in accordance with GAAP.
(2)  During the 3rd quarter 2007, Atlas Pipeline recognized $31.2 million
     of non-cash compensation expense resulting from incentive compensation
     agreements with certain key employees located in its Mid-Continent
     headquarters in Tulsa, OK. These awards were based upon the
     accomplishment of certain predetermined performance targets through
     December 2008 related to various acquisitions, including the
     acquisition of the Chaney Dell and Midkiff/Benedum systems. The
     compensation expense amount recorded for these common unit awards
     reflects management's current estimate with regard to the achievement
     of the predetermined performance targets. The vesting period for such
     awards concluded on September 30, 2007 and all compensation expense
     related to the awards was recorded as of that date. Management
     anticipates that adjustments will be recorded in future periods with
     respect to the awards under the incentive compensation agreements
     based upon the actual financial performance of the assets in future
     periods in comparison to their estimated performance.
(3)  The acquisition of the Chaney Dell and Midkiff/Benedum systems was
     consummated on July 27, 2007, although the acquisitions' effective
     date was July 1, 2007. As such, Atlas Pipeline received the economic
     benefits of ownership of the assets as of July 1, 2007. However, in
     accordance with accounting regulations, Atlas Pipeline has only
     recorded the results of the acquired assets commencing on the closing
     date of the acquisition.



                           ATLAS AMERICA, INC.
                          OPERATING HIGHLIGHTS


                                 Three Months Ended     Six Months Ended
                                    September 30,         September 30,
                                --------------------  --------------------
ATLAS ENERGY:                      2007       2006       2007       2006
-------------                   ---------  ---------  ---------  ---------
 Production revenues
  (in thousands):
   Gas(1)                       $  60,302  $  19,402  $ 102,439  $  59,332
   Oil                              2,938      2,489      7,357      7,323

 Production volume:
   Gas (mcfd)(1)(2)(3)             88,628     25,955     85,545     24,064
   Oil (bpd)                          446        416        425        415
                                ---------  ---------  ---------  ---------
   Total (mcfed)(3)                91,304     28,451     88,095     26,554
                                =========  =========  =========  =========

 Average sales prices(3):
   Gas (per mcf)(3)(4)          $    8.19  $    8.13  $    8.55  $    9.03
   Oil (per bbl)(3)             $   71.63  $   65.01  $   63.75  $   64.59

 Production costs(5):
   As a percent of production
    revenues                           16%        11%        13%        10%
   Per mcfe(3)                  $    1.19  $    0.93  $    1.07  $    0.92

 Depletion per mcfe(3)          $    2.19  $    2.14  $    2.24  $    2.04

ATLAS PIPELINE:
---------------
 Appalachia system throughput
  volume (mcfd)(3)                 71,876     63,909     66,888     61,473

 Velma system gathered gas
  volume (mcfd)(3)                 63,757     62,113     62,531     61,641

 Elk City/Sweetwater system
  gathered gas volume (mcfd)(3)   299,450    284,461    298,724    270,957

 Chaney Dell system gathered gas
  volume (mcfd)(3)                255,649         --    255,649         --

 Midkiff/Benedum system gathered
  gas volume (mcfd)(3)            150,061         --    150,061         --

 NOARK Ozark Gas Transmission
  throughput volume (mcfd)(3)     325,652    226,962    311,562    236,331
                                ---------  ---------  ---------  ---------

 Combined throughput volume
  (mcfd)(3)                     1,166,445    637,445  1,145,415    630,402
                                =========  =========  =========  =========

(1)  Excludes sales to landowners. Production volume also includes activity
     for Atlas Energy's recently acquired assets in the Antrim Shale in
     Michigan.

(2)  Production quantities consist of the sum of (i) ATN's proportionate
     share of production from wells in which it has a direct interest,
     based on its proportionate net revenue interest in such wells, and
     (ii) ATN's proportionate share of production from wells owned by the
     investment partnerships in which ATN has an interest, based on ATN's
     equity interest in each such partnership and based on each
     partnership's proportionate net revenue interest in these wells.

(3)  "Mcf" and "mcfd" means thousand cubic feet and thousand cubic feet per
     day; "mcfe" and "mcfed" means thousand cubic feet equivalent and
     thousand cubic feet equivalent per day, and "bbl" and "bpd" means
     barrels and barrels per day. Bbl's are converted to mcfe using the
     ratio of six mcf's to one bbl.

(4)  Atlas Energy's average sales price before the effects of financial
     hedging was $6.55 and $7.32 for the three months ended September 30,
     2007 and 2006, respectively, and $7.12 and $8.10 for the nine months
     ended September 30, 2007 and 2006, respectively.

(5)  Production costs include labor to operate the wells and related
     equipment, repairs and maintenance, materials and supplies, property
     taxes, severance taxes, insurance and production overhead.

Contact Information

  • CONTACT:
    Brian J. Begley
    Investor Relations
    Atlas America, Inc.
    1845 Walnut Street
    Philadelphia, PA 19103
    215/546-5005
    215/553-8455 (fax)