Atlas Completes Natural Gas Asset Acquisitions

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
67MM
Description

Acquired 45 Bcf of natural gas proved reserves in the Arkoma Basin.

Atlas Energy LP (NYSE: ATLS) completed its acquisition of 45 billion cubic feet (Bcf) of natural gas proved reserves in the Arkoma Basin in southeastern Oklahoma from EP Energy E&P Co. LP for US $67 million, the company announced on Aug. 1.

In addition, Atlas Energy’s E&P subsidiary, Atlas Resource Partners LP (NYSE: ARP), completed its acquisition of 466 Bcf of natural gas proved reserves primarily in the Ration and Black Warrior Basins of New Mexico and Alabama, respectively, from EP Energy for $733 million. In conjunction with the closing, Atlas Energy purchased 3.75 million class C preferred units of Atlas Resource Partners for $87 million.

Atlas Energy funded the acquisition of the Arkoma assets and the purchase of the preferred units with the issuance of a six-year $240 million senior secured term loan credit facility. The term loan was priced at LIBOR plus 550 basis points with a 1% LIBOR floor. Deutsche Bank Securities and Wells Fargo were joint lead arrangers and joint book-runners for the syndication of the term loan facility.

Atlas Resource Partners financed a portion of the transaction with $400 million in equity, including $313 million through a public offering of newly issued common units and $87 million of the preferred units purchased by Atlas Energy. In addition, Atlas Resource Partners financed a portion of the transaction with a $250 million offering of senior unsecured notes maturing in 2021, and the remainder of the transaction was funded with its revolving credit facility. As a result of the closing of the EP Energy acquisition, the borrowing base on its revolving credit facility has been increased from $430 million to $835 million.

Deutsche Bank Securities was financial advisor, and Wachtell, Lipton, Rosen & Katz, and Ledgewood (Philadelphia) were legal advisors to Atlas Resource Partners.

Atlas Energy LP engages in the development and production of natural gas, crude oil, and NGLs in basins across the U.S. Atlas Resource Partners LP is an independent energy company engaged in the production of natural gas, crude oil, and NGLs in basins across the U.S. The companies are based in Pittsburgh.