Atlas Completes Acquisition of Andarko's Gas Gathering System

Atlas America, which owns 17.5 million common units of Atlas Pipeline Holdings, representing an approximate 64% limited partner interest, announced that Atlas Pipeline Partners, has completed the previously announced acquisition of control of Anadarko Petroleum Corporation's interests in the Chaney Dell and Midkiff-Benedum natural gas gathering and processing systems for $1.85 billion, subject to final post-closing adjustments. By virtue of the closing of the Acquisition, APL is entitled to all income from and responsible for all property costs incurred by both systems retroactive to July 1, 2007.

Atlas Holdings expects to distribute between $0.58 and $0.65 per common unit for the second half of 2007, and between $1.60 and $1.80 per common unit in 2008. Through its common unit ownership in Atlas Holdings, Atlas America expects to receive approximately $28 million to $31 million in cash distributions from Atlas Holdings in 2008 based on this projection.

Additionally, Atlas Pipeline Mid-Continent WestTex, LLC, a subsidiary of APL, has reached an agreement with Pioneer Natural Resources Company (NYSE: PXD) ("Pioneer"), which currently holds an approximate 27% interest in the Midkiff-Benedum system, regarding Pioneer's preferential right to purchase Anadarko's interest in the system:

-- The parties will extend the term of Pioneer's percentage of proceeds ("POP") contract for gas processed by the Midkiff-Benedum system for an additional ten years through 2022. During 2006, the system processed more than 138 million cubic feet of gas per day ("Mmcf/d"), a majority of which was supplied by Pioneer. The agreement also allows for incremental annual increases in Pioneer's POP beginning in 2009.

-- Pioneer will have an option to buy up to an additional 14.5% interest in the Midkiff-Benedum system one year after the closing, and up to an additional 7.5% interest two years after the closing. If the option is fully exercised, Pioneer would increase its interest in the system to approximately 49%. Pioneer would pay approximately $230 million for the additional 22% interest if fully exercised. APL will manage and control the Midkiff-Benedum system regardless of whether Pioneer exercises the purchase options.

APL partially financed the Acquisition through a private placement of $1.125 billion of its common units, of which Atlas Holdings purchased approximately $168 million of common units, or 3.8 million APL common units. Atlas Holdings financed the purchase of the APL units through its own private placement of 6.25 million of its common units generating total proceeds of approximately $168 million. In order to maintain its 2% general partner interest in APL, Atlas Holdings contributed approximately $23 million to APL, which it funded with an advance against its existing $50 million credit facility that matures in 2010.

The Chaney Dell natural gas processing and gathering system is located in northwest Oklahoma and southern Kansas, near the center of the Anadarko Basin. Throughput on the Chaney Dell system averaged 226 million cubic feet per day ("Mmcf/d") in 2006, and is centered within an active drilling area. The Midkiff/Benedum natural gas processing and gathering system is located in the Spraberry Trend of the Permian Basin, near Midland, Texas.


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