Atlas Pipeline Partners, L.P. (APL)
Q4 2012 Earnings Call
February 19, 2013 10:00 am ET
Executives
Matthew Skelly – Head-Investor Relations
Eugene N. Dubay – President and Chief Executive Officer
Robert W. Karlovich, III – Chief Financial Officer
Patrick J. McDonie – Senior Vice President and Chief Operating Officer
Analysts
Ethan H. Bellamy – Robert W. Baird & Co.
Sunil K. Sibal – Citigroup Global Markets Inc.
Derek B. Walker – Bank of America Merrill Lynch
Helen Jung Ryoo – Barclays Capital, Inc.
Sharon Lui – Wells Fargo Advisors LLC
Selman Akyol – Stifel, Nicolaus & Co., Inc.
James A. Spicer – Wells Fargo Securities LLC
Presentation
Operator
Good day, ladies and gentlemen, and welcome to the Quarter Four 2012 Atlas Pipeline Partners Earnings Conference Call. My name is Ian. I'll be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions) As a reminder, the call is being recorded for replay purposes.
Now, I’ll like to turn the call over to Mr. Matthew Skelly, Head of Investor Relations. Please proceed, Sir.
Matthew Skelly
Thank you, Ian. Good morning and thank you for joining us for today’s fourth quarter and year-end 2012 earnings call. Before our management team provides comments on our fourth quarters’ results, I’d like to remind everyone of the following Safe Harbor provision.
During this conference call, we may make certain forward-looking statements that is statements related to future, and not past events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition and often contain words such as expect, anticipate, intend, believe, and similar words or phrases.
Forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected in the forward-looking statements. We discuss these risks in our quarterly report on Form 10-Q and our annual report on Form 10-K, particularly in Item one. I would like to caution you not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof.
The company undertakes no obligations to publicly update our forward-looking statements, or 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.
Lastly, management’s discussion this morning includes references to items such as adjusted EBITDA and distributable cash flow, which represent non-GAAP measures. A reconciliation of these non-GAAP measures is provided in the financial tables of our quarterly earnings release that went off last night, as well as our Form 10-Q.
With that, I will turn the call over to our Chief Executive Officer, Gene Dubay, for his remarks. Gene?
Eugene N. Dubay
Thank you, Matt. Ladies and gentlemen, thank you for taking your time today with us at Atlas Pipeline Partners. We appreciate very much your interest in the company. This has been an exiting time for the company. In this past quarter, we acquired the Cardinal assets in South East Oklahoma. We increased the distribution through our unit holders. We hedged our residue production well into 2014 and 2015, and we extended and re-cashed our contract with SandRidge in Western Oklahoma.
The volumes of gas we are gathering continue to come up across our systems. In fact as of this week, we only have approximately 65 million cubic feet per day of capacity available across our systems. This represents only 6% of the overall 1.1 billion cubic feet per day in overall processing capacity.
The addition of the Cardinal assets which were purchased in December, and now referred to as our Arkoma assets; add 220 million cubic feet per day of processing capacity to our operations. A 100 million cubic feet per day of that processing capacity is jointly owned with MarkWest Energy.
Atlas Pipeline now has approximately 1 BCF per day of processing capacity and that total will soon increase to a total of 1.2 BCF per day of capacity with the addition of the Driver plant in West Texas. Over a four year period, we have increased the volume of gas we are processing across these systems by over 100%. I emphasis or I cannot emphasis enough how exciting a time this is for us at Atlas Pipeline.
Towards the end of this quarter and the beginning of the second quarter, we expect that the Driver plant in West Texas will come on line. DCP will complete their natural gas liquids pipeline construction projects, relieving our liquids production constraints in Western Oklahoma and West Texas. And our liquids production should increase dramatically as a consequence of these events.
Pat McDonie our Chief Operating Officer will elaborate on our field operations shortly. Trey Karlovich, our Chief Financial Officer will speak to the financial results for the quarter. However, beyond what we believe were good results for the quarter. We believe we have strengthened the company with the addition of the Arkoma assets and the fee income associated with that operation.
We have reduced our commodity sensitivity with the renegotiation of the SandRidge contract to a percentage of proceeds agreement, and we have elongated our hedge book.
The fourth quarter and the current quarter are building blocks which we believe will result in a very robust year and position us positively for future growth and future success. We very much appreciate your interest in Atlas Pipeline Partners. And with that, I’ll ask Pat McDonie to speak to our field operations. Pat? Thank you.
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