Atlas Resource Agrees to Buy $733MM in Natural Gas Reserves

Atlas Resource Partners L.P. has agreed to buy 466 billion cubic feet of natural gas proved reserves from EP Energy LLC for $733 million.

The reserves are located in the Raton Basin in New Mexico and Black Warrior Basin in Alabama.

In addition, parent company Atlas Energy LP (ATLS) will buy about 45 Bcf of natural gas proved reserves in the Arkoma Basin in southeastern Oklahoma from EP Energy for roughly $67 million.

The transaction is expected to close in the third quarter.

Atlas Energy offered full-year 2014 distribution guidance of $2.50 to $2.80 a unit, more than double the most recent annualized distribution of $1.24. Meanwhile, Atlas Resource projected at least $2.60 a unit, a roughly 27% increase over the current annualized distribution.

Atlas Energy Chief Executive Edward E. Cohen said the deal would significantly expand the breadth and scope of Atlas Resource's E&P operations, increase cash flow, and substantially de-risk its business.

Of the 466 Bcf of natural gas proved reserves, 93% are proved developed. The assets currently produce roughly 119 million of cubic feet per day of natural gas, which nearly doubles ARP's existing net production for May.

Atlas Resource plans to fund part of the acquisition costs by selling up to $125 million of its Class C convertible preferred units to Atlas Energy.

Copyright (c) 2012 Dow Jones & Company, Inc.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Technical Coordinator
Expertise: Client Representative|Process Management|Technical Writing
Location: Houston, TX
Executive Assistant
Expertise: Executive|Secretarial or Administrative
Location: United States
Regional Manager - Saybolt
Expertise: Executive|Operations Management
Location: Linden, NJ
search for more jobs

Brent Crude Oil : $51.38/BBL 2.44%
Light Crude Oil : $50.43/BBL 2.26%
Natural Gas : $3.14/MMBtu 0.94%
Updated in last 24 hours