SOURCE: Atlas Energy Resources, LLC

April 18, 2008 07:42 ET

Atlas Energy Resources, LLC Announces Its Decision Not to Proceed at This Time With Offering of Class B Units

PITTSBURGH, PA--(Marketwire - April 18, 2008) - Atlas Energy Resources, LLC (NYSE: ATN) ("Atlas Energy") has determined not to proceed at this time with the previously announced offering of its Class B common units, as set forth in its preliminary prospectus supplement filed on April 17, 2008 with the SEC, in order to allow investors sufficient time to become aware of information relating to certain non-cash balance sheet adjustments resulting from its natural gas and oil derivative contracts.

With the objective of enhancing the predictability of future revenues, from time to time Atlas Energy enters into natural gas and oil derivative contracts. Atlas Energy accounts for these derivative contracts by applying the provisions of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." In the course of preparing its financial results for the first quarter of 2008, due to the mark-to-market accounting treatment for Atlas Energy's derivative contracts, Atlas Energy has estimated that it will recognize a net loss of approximately $112 million in its accumulated other comprehensive loss within members' equity at March 31, 2008 in comparison to a net loss of $5 million at December 31, 2007. The recognition of these incremental hedge liabilities are the result of recent increases in reference prices for natural gas and oil. Gains or losses on derivative contracts are calculated as the difference between the contract price and the reference price, which are generally prices on NYMEX. Atlas Energy's gains or losses on derivative contracts are recognized in accumulated other comprehensive income within member's equity. Atlas Energy will reclassify this balance within members' equity, if the fair values of these derivative instruments remain at current market values, to its consolidated statements of income in the month the hedged commodity is sold, and anticipates it will simultaneously recognize revenue for its physical sale of natural gas and crude oil at then-prevailing market commodity prices, effectively netting the reclassified losses and revenue. After netting such losses and such revenues, the result will be that Atlas Energy will recognize revenue within its consolidated statements of income at the contract price established by its derivative instruments for the respective commodities and periods and not at the prevailing market price.

Matt Jones, Atlas Energy's Chief Financial Officer, noted that, "The rapid increase in natural gas prices during the first quarter of 2008 was generally favorable to us, since our sale of unhedged production was at a higher price than anticipated. On hedged production, by far the majority of our output, we will receive exactly the price anticipated at the time our hedges were placed. However, for accounting purposes, the anticipated difference for future periods between hedged prices and the March 31st spot price resulted in the non-cash balance sheet adjustment described above."

Atlas Energy Resources, LLC develops and produces domestic natural gas and to a lesser extent, oil. Atlas Energy is one of the largest independent energy producers in the Appalachian Basin and northern Michigan. Atlas Energy sponsors and manages tax-advantaged investment partnerships, in which it co-invests, to finance the exploration and development of the Company's acreage in the Appalachian Basin. Atlas Energy is active principally in Pennsylvania, Michigan and Tennessee. For more information, visit Atlas Energy's website at or contact Investor Relations at

Certain matters discussed within this press release are forward-looking statements. Although Atlas Energy Resources, LLC 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, changes in local or national economic conditions and other risks detailed from time to time in Atlas Energy'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.