2009-10-26-2009-04-28-2009-09-30

Bought remaining 52% interest in MLP subsidiary with 1.25 million net acres in the Marcellus, Antrim, New Albany and Chattanooga shales in OH, PA, NY, WV, KY, gaining 98 MMcfe/d, 1 Tcf proved.

Philadelphia-based Atlas America Inc. (Nasdaq: ATLS) has closed its acquisition of the remaining 52% interest in its MLP subsidiary Atlas Energy Resources LLC, Pittsburgh, Pa., (NYSE: ATN) in a stock-for-stock deal valued at approximately $550 million. The merged company is renamed Atlas Energy Inc. and trades on the Nasdaq as ATLS. Atlas America shareholders hold a 50.3% interest in the combined company. The deal values the combined company at $1.8 billion, according to Atlas America. The MLP Atlas Energy held 1.25 million net acres in the Marcellus, Antrim, New Albany and Chattanooga shales, with approximately 750,000 undeveloped. Production was 98 million cubic feet per day from interests in 10,957 gross wells in Ohio, Pennsylvania, Tennessee, New York, West Virginia and Kentucky. Total net proved reserves acquired are 1 trillion cubic feet. Approximately 550,000 net acres are in the Marcellus. Atlas America held interest in Atlas Energy LLC and through its subsidiary, Atlas Pipeline Partners LP, (NYSE: APL) which operates transmission, gathering and processing of natural gas in the Midcontinent and the Appalachian regions. The board of the combined entity consists of the 10 independent directors of Atlas America and Atlas Energy, as well as chief executive Edward E. Cohen and vice chairman Jonathan Z. Cohen of both Atlas America and Atlas Energy. Edward Cohen, chairman and chief executive of Atlas America, says, "The merger will allow the combined companies to sharply accelerate expansion and development of its Marcellus shale position by reinvesting a far greater portion of its combined cash flow in America's greatest natural gas play. And the other benefits are enormous." Atlas Energy LLC president Richard D. Weber says, "As one of the leading producers in the Marcellus shale…it is imperative that we redirect our company's cash flow to fully realize the potential value of these assets for our existing unit holders. We believe that, by merging with Atlas America, we will create a new entity that will have the financial resources to accelerate and expand the development of our Marcellus shale assets where we have already identified 4 to 6 trillion cubic feet of additional reserves." JPMorgan Securities Inc. was financial advisor and Wachtell, Lipton, Rosen & Katz was legal counsel to Atlas America. UBS Investment Bank was financial advisor and K&L Gates was legal counsel to Atlas Energy LLC. In May 2007, Atlas Energy acquired DTE Gas & Oil Co., a subsidiary of DTE Energy Co., Detroit, (NYSE: DTE) for $1.23 billion in cash, gaining 613 billion cubic feet equivalent (100% gas), and probable and possible reserves of approximately 76 billion cubic feet equivalent in the Antrim shale in Michigan's northern lower peninsula. Stifel, Nicolaus & Co. Inc. analyst Michael A. Hall says following repeated appeals to management from unit holders, many are "finally getting what they want" in the restructuring of Atlas Energy and Atlas America. "The proposed merged entities will be, in our view, a more proper and suitable vehicle by which to grow Atlas Energy's significant Marcellus shale holding," Hall says. "We believe Atlas Energy unit holders are treated fairly and see meaningful potential upside in the proposed remaining entity."