Atlas Resources, Equal Energy Enter Mississippi Lime JV

To buy 50% interest in 14,500 net Oklahoma Mississippi lime acres in Alfalfa, Garfield & Grant cos.,

Atlas Resource Partners LP, Philadelphia, (NYSE: ARP) plans to acquire a 50% interest in Oklahoma Mississippi lime assets from Equal Energy Ltd., Calgary, (NYSE, Toronto: EQU) for US$18 million.

The joint venture will focus on Equal’s approximately 14,500 net undeveloped acres in the core of the oil and liquids-rich Mississippi Lime play in northwestern Oklahoma. The acreage position is in Alfalfa, Garfield and Grant counties and is almost entirely held by Equal’s existing production from the Hunton formation.

Atlas and Equal will launch an initial 12-well drilling program expected to commence early in the third quarter. Atlas and Equal will drill continuously with one rig in the Mississippi Lime for the first 18 months following the transaction’s closing. Atlas will conduct drilling and completion activities and Equal will operate the production once the wells are completed.

Atlas also has the option to drill an additional four net wells to its account in the 12 months following closing. After the initial 18 months, additional rigs may be added. Each party can contribute acreage to the venture through the establishment of an area of mutual interest closely surrounding Equal’s existing acreage position.

The project is expected to make use of Equal's existing Hunton water handling infrastructure in Grant, Garfield and Alfalfa counties thus minimizing infrastructure costs.

Atlas will finance this transaction with available borrowings under its revolving credit facility.

Atlas president and chief operating officer Matthew A. Jones says, “We expect our future development of the Mississippi Lime with Equal will add valuable oil & liquids reserves to ARP’s production profile. This new position also provides potential future drilling locations for our partnership management business. This transaction further strengthens the breadth of our E&P operations, and complements our already expanding presence in some of the highest returning basins in the U.S.”

Equal president and chief executive Don Klapko says, “This joint venture fulfills our promise to find a way to accelerate development of our Mississippian play. Atlas is an accomplished oil and gas operator with extensive drilling and completion experience over a number of horizontal plays in the U.S. The evolving Mississippian oil play in northern Oklahoma has garnered significant industry attention and has demonstrated strong results.”

The transaction is expected to close in late April.