Atlas Pipeline Partners, L.P.

Transcription

1 Atlas Pipeline Partners, L.P. NYSE: APL 6 th Annual Wachovia Pipeline & MLP Symposium New York, NY December 6,

2 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 LOOKING STATEMENTS. THE RISKS AND UNCERTAINTIES ARE DISCUSSED IN OUR ANNUAL REPORT ON FORM 10-K, OUR QUARTERLY REPORT ON FORM 10-Q; PARTICULARLY IN THE SECTION TITLED RISK FACTORS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE PARTNERSHIP UNDERTAKES NO OBLIGATIONS TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO FORWARD LOOKING STATEMENTS, WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. 2

3 Geographic Focus Chaney Dell Gathering & Processing System Appalachian Gathering System New York Pennsylvania Located in Anadarko Basin 230 Mmcf/d processing capacity ~ 3,500 miles of gathering pipeline Expected drilling of wells annually into the system West Virginia Located in Appalachia Basin of eastern Ohio, western New York, and western Pennsylvania Over 1,600 mi. of active gathering pipeline; 6,500+ wells serviced Elk City/Sweetwater Gathering & Processing System Prentiss Treating Facility Elk City Plant Midkiff/Benedum Gathering & Processing System Velma Gathering & Processing System Velma Plant NOARK Pipeline System Located in Anadarko Basin of Oklahoma Over 440 receipt points serviced 2 processing facilities/1 treating facility 450 Mmcf/d inlet capacity Located in Spraberry Trend of Permian Basin 170 Mmcf/d processing capacity 2,500 miles of gathering pipeline 3 1,080 mi. of active gathering pipeline Approx. 640 receipt points serviced 100 Mmcf/d capacity processing facility Ozark Gas Transmission 565- mile FERC-regulated pipeline running from Oklahoma to Missouri Ozark Gas Gathering 370- mile non-ferc-regulated natural gas gathering system Increasing capacity to 500 MMcf/d by adding compression

4 Acquisition Growth Successfully completed five acquisitions totaling over $2.4 billion in the last three years: Velma system acquired for $142 million in July 2004 Elk City system acquired for $196 million in April 2005 NOARK system acquired in two separate transactions for a total of $249 million; 75% interest acquired in October 2005; remaining 25% interest acquired in May 2006 Chaney Dell and Midkiff/Benedum gathering and processing systems acquired from Anadarko for $1.85 billion in July

5 Organic Growth Initiatives Organic Growth Investment Reactivation of Chaney Dell 30 MMcf/d cryogenic facility 105 mile, 16 Pipeline connecting Chaney Dell system to Elk City/Sweetwater system Expansion of capacity on Sweetwater processing facility from 120MMcf/d to 180MMcf/d Expand throughput capacity on NOARK pipeline via added compression from 400MMcf/d to 500MMcf/d 120 MMcf/d 9 mile processing facility to be constructed along Chaney Dell to Elk City/Sweetwater pipeline Total Projected Capex: Expected Completion Jan nd Qtr nd Qtr rd Qtr th Qtr 2008 Approx. $150 million The integration of the Chaney Dell (Northwest OK) and Midkiff/Benedum (West TX) systems to the Mid-Continent operations has allowed APL to explore multiple organic growth possibilities soon after acquiring the assets Newly established footprints in the Anadarko basin (Chaney Dell) and Permian Basin (Midkiff/Benedum) creates strong advantages to access expanding production in these respective areas Growth increases the ability to become a primary choice of service across a wider horizon in each region of operation; building over 200MMcf/d of additional processing capacity in

6 Mid-Continent Operations Overview 6

7 Business Overview Mid-Continent Significant growth over the last three years APL Mid-Continent operates: 565 miles of FERC-regulated interstate pipeline Over 7,000 miles of active natural gas gathering pipelines Over 750 MMcf/d of processing plant capacity 200 MMcf/d in treating facility capacity Q307 natural gas throughput rose to record 1.1 Bcf/d 7

8 Chaney Dell System Summary Chaney Dell System Chaney Dell Operational Footprint Located in the prolific Anadarko Basin of northwest Oklahoma Extensive gathering system with processing flexibility provided by three plants History of growth in both volume and profitability Established customer base with active drilling programs Attractive contract mix 8

9 Chaney Dell System Key Characteristics Two gathering systems with approximately 3,470 miles of gathering pipeline located in north central Oklahoma s Anadarko Basin Three processing plants: Waynoka Plant - new 200 MMcf/d cryogenic unit Chester Plant - 30 MMcf/d cryogenic expander unit Chaney Dell Plant MMcf/d refrigerated lean oil absorption unit & 30 MMcf/d cryogenic unit Idled in 4Q06 following start-up of the Waynoka Plant; cryogenic unit to be reactivated in Jan Gathering Systems: Westana 1,320 miles of 2- to 24-inch pipe Chaney Dell / Chester 2,150 miles of 2- to 16-inch pipe Avg. Gathered Volumes: Westana 154 MMcf/d Chaney Dell / Chester 72 MMcf/d Expected drilling activity of wells annually Anticipated annual system volume growth of 5 7% Chaney Dell System New Well Connects CAGR: 15%

10 Chaney Dell System Growth Initiatives Growth initiatives include connection of the Chaney Dell system to the Elk City/Sweetwater System and the building of a new 120MMcf/d processing facility Two main components to project: Constructing 105 mile 16 pipeline connecting Chaney Dell system in northwestern OK to Elk City/ Sweetwater system in western OK Pipeline will allow for processing optionality for producers in different regions across western OK & TX Panhandle New, cryogenic 120 MMcf/d capacity processing facility ( 9 Mile plant ) will be built along the pipeline to access production in region between the two existing systems Pipeline & processing facility will create an extensive infrastructure across western OK to be become a primary option for midstream services in the region: Upon completion, all three systems will have almost 700 MMcf/d of processing capacity (including planned expansion of Sweetwater processing facility) Targeted completion: Connecting pipeline Early Q208 9 Mile Processing facility End of

11 Midkiff / Benedum System Midkiff / Benedum System (72.8% Interest) Midkiff / Benedum System Operational Footprint Located in the prolific Permian Basin Largest Spraberry gatherer and processor Co-ownership with Pioneer Natural Resources provides alignment with largest customer 100% POP contracts Established history of growth in both volume and profitability 11

12 Midkiff / Benedum - Key Characteristics Situated in the Spraberry Trend of the Permian Basin in west Texas; anchored with a strong producer / partner in Pioneer Natural Resources Two processing plants: Midkiff Plant MMcf/d cryogenic unit Benedum Plant - 43 MMcf/d cryogenic expander unit 300 Gathering System 240 Midkiff / Benedum 2,500 miles of 2- to 20-inch pipe Avg. Throughput 0 Midkiff / Benedum 139 MMcf/d Anticipated annual system volume growth of 5 7% Midkiff / Benedum System New Well Connects CAGR: 18% JV with Pioneer Natural Resources, which owns 27.2% of the Midkiff / Benedum System, with an option to increase its ownership stake in that system up to 49%

13 Elk City/Sweetwater & Velma Systems Sweetwater Processing Plant & Gathering System Operational as of September 2006 New 120 mmcf/d cryogenic processing plant Proximity to Elk City provides flexibility between the two plants during periods of overcapacity Total cost of approximately $40 million Expanding capacity by an additional 60 mmcf/d by Q208 Texas Oklahoma Velma Processing Plant & Gathering System 1,080 miles of active gathering pipeline 100 mmcf/d processing capacity Connected to over 640 receipt points More than 120 producers under acreage dedication and long term agreements Sweetwater Plant Elk City Processing Plant & Gathering System 450 miles of active gathering pipeline 130 mmcf/d processing capacity 200 mmcf/d treating capacity Connected to over 440 receipt points Long term relationships with more than 140 producers Prentiss Treating Facility 13 Elk City Plant Velma Plant Map Legend: Processing Plant Treatment Facility Existing Pipeline Sweetwater Pipeline

14 NOARK Pipeline System Overview NOARK Assets Strategically Positioned for Growth Ozark Gas Gathering (OGG) 370-mile natural gas gathering system 13 compressor stations Gathering assets out of FERC jurisdiction, allowing for negotiated rates Missouri Ozark Gas Transmission (OGT) 565-mile FERC-regulated natural gas interstate pipeline Total throughput capacity of 400 MMcf/d Approximately 30 supply and delivery interconnections 2 compressor stations Accesses prolific Arkoma Basin and developing Fayetteville Shale Oklahoma Map Legend: OGT Interstate Pipeline OGG Gathering System Arkansas 14

15 Appalachian Operations Overview 15

16 Appalachian Highlights APL owns and operates approximately 1,600 miles of natural gas gathering pipelines in western PA, western NY and eastern OH Appalachian System Operational Footprint Over 6,500 producing wells delivering natural gas into Appalachian system as of September 2007 Deerfield Mayville Jackson Center NY Current run-rate throughput volumes of ~ 76 MMcf/d Uniontown Connected 451 wells in 2005; 711 wells in 2006; 757 wells connected in LTM Q307 OH PA Atlas Energy Resources, LLC ( ATN ) is among the top 12 most active drillers for natural gas in U.S. (1) New Philadelphia Cumberland WV VA ATN controls 627 billion cubic feet equivalents ( bcfe ) of natural gas reserves in Appalachia as of 6/30/07 Pittsburgh Fayette Corporate Offices District Offices & Satellite Offices Gathering System (1) RigData.com report LTM ended 9/30/07 16

17 Relationship With Atlas Energy Substantially all of APL s throughput in the Appalachian Basin is owned and/or controlled by Atlas Energy; Atlas Energy targeting 1,000+ wells to be drilled in 2007 in Appalachia Atlas America s 64% ownership interest in Atlas Pipeline Holdings, the General Partner of APL, and its 48% ownership interest in ATN, aligns both entities interests Omnibus agreement with ATN provides significant source of volume growth Wells under contract are committed for the life of the lease (typically over 30 years) Atlas Energy Gross Wells Drilled YTD 9/07 APL gathering fees are based on gas prices Usually 16% of natural gas price ATN hedging program further reduces APL s commodity risk Atlas Energy Resources has drilled 13 wells and completed 10 wells in the emerging Marcellus Shale of Western Pennsylvania Holds over 250,000 acres of Marcellus acreage 17 Large base of new well connects ensures future throughput

18 Financial Information 18

19 APL Share Performance APL Unit Price: January 2002 December 2007 $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 Jul-04 May-04 Mar-04 Jan-04 Nov-03 Sep-03 Jul-03 May-03 Mar-03 Jan-03 Nov-02 Sep-02 Jul-02 May-02 Mar-02 Jan-02 Nov-07 Sep-07 Jul-07 May-07 Mar-07 Jan-07 Nov-06 Sep-06 Jul-06 May-06 Mar-06 Jan-06 Nov-05 Sep-05 Jul-05 May-05 Mar-05 Jan-05 Nov-04 Sep-04 APL s units currently yield 8.1% (based upon unit price at December 3, 2007) on annualized Q307 distribution of $

20 APL: Strong Earnings & Distribution Growth Historical Revenue Historical Adj. EBITDA $600 $500 $400 $300 $200 $100 $0 CAGR: 160% $15.8 $91.3 $371.5 $464.7 $100 $80 $60 $40 $20 $ LTM 9/07 $8.4 $21.8 $42.3 $150 $125 $100 $75 $50 $25 $0 $59.1 $11.7 Historical Distributable Cash Flow CAGR: 88% CAGR: 91% $25.6 $56.5 $86.3 $ LTM 9/07 $89.8 $ LTM 20 9/07

21 APL: Strong Distribution Growth Historical & Projected Distributions per Limited Partner Unit CAGR: 13% $3.80 $ $4.00 (1) $3.40 $3.16 $2.39 $2.67 $1.78 $ $1.85 $0.75 $0.85 $0.87 $0.91 $ Q206 Q207 Q307 2H07E 2008E (1) Full year 2008 distribution guidance is based on anticipated distribution coverage of 1.2x 21

22 Capitalization Maintain a flexible capital structure based on a strong balance sheet to allow for future growth and expansion APL has a new $300 million committed revolving credit facility which matures in 2013 APL also has a $830 million term loan maturing in 2014 APL s senior unsecured notes mature in 2015 As of September 30, 2007 Cash and Cash Equivalents $24.8 Debt: Credit Facility 33.5 Term Loan Senior Unsecured Notes (1) Total Debt $1,157.1 Partners' Capital: Common Unitholders Convertible Preferred Unitholders 36.4 General Partner 31.8 Accumulated Other Comprehensive Loss (54.7) Total Partners' Capital $1,422.5 Total Capitalization $2, Does not include $0.9 million of premiums received in connection with the May 2006 issuance of $35.0 million of senior notes issued at 103% of par value. 22

23 APL Hedging Overview Mid-Continent Long Gas Hedges (1) Mid-Continent Short Gas Hedges (2) Hedge Vol. % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q $8.20 $8.00 $7.80 $7.60 $7.40 $7.20 $7.00 Hedge Price per Mcf Hedge Vol. % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q $8.20 $8.10 $8.00 $7.90 $7.80 $7.70 $7.60 $7.50 $7.40 $7.30 $7.20 Swap Price per Mcf Appalachia Long Gas Hedges (3) Hedge Vol. % 80% 70% 60% 50% 40% 30% 20% $1.80 $1.70 $1.60 $1.50 $1.40 $1.30 $1.20 Swap Price per Mcf For all graphs, bars correspond to the Hedge Volume % on the left vertical axis; lines correspond to the Prices per Mcf on the right vertical axis. 10% $1.10 0% Q $1.00 (1) Volume Hedged % for Mid-Continent Long Gas Hedges is based upon estimated run-rate production. (2) Volume Hedged % for Mid-Continent Short Gas Hedges is based upon estimated run-rate production. (3) Hedges on Appalachian gathering system transportation rates are based on hedges on Atlas Energy Resources managed production and are represented as 16% of the gas hedge price as of Sept. 30, 2007; includes mostly swap contract positions as well as additional costless collar positions. 23

24 APL Hedging Overview Mid-Continent NGL Hedges (1) 120% $1.60 Hedge Vol. % 100% 80% 60% 40% 20% 0% Q $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 Swap/Collar Prices per gal. Collar Vol. Swap Vol. Collar Ceiling Collar Floor Swap Price (1) Volume Hedged % for Mid-Continent NGL Hedges is based upon estimated run-rate production. Costless collar positions are hedges on crude oil and NGL prices shown with respect to costless collar floor and ceiling prices are calculated using an approximate correlation to respective crude oil prices. 24

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