Atlas Resource Partners Acquires Barnett Shale Assets (ARP, CRZO, ATLS)

Independent oil & gas partnership Atlas Resource Partners L.P. (NYSE: ARP) has agreed to purchase approximately 277 billion cubic feet equivalent of proved natural gas resources from Carrizo Oil & Gas Inc. (NASDAQ: CRZO) for about $190 million. The assets are located in the Barnett shale play in the Dallas-Fort Worth area.

Atlas Energy L.P. (NYSE: ATLS) yesterday completed a distribution of about 19.6% of the common units of Atlas Resource Partners to unitholders of Atlas Energy. Atlas Resource Partners commenced “regular way” trading on the NYSE yesterday.

Atlas is paying about $0.69/thousand cubic feet equivalent of natural gas for 198 producing wells on more than 12,000 acres. The assets are 99% natural gas with 52% being proved and developed. Current net production is about 36 million cubic feet equivalent/day.

At the same time, Atlas announced an increase in its distributions to limited partners. The company will raise its distribution from $0.80/common unit for the second half of 2012 to a range of $0.85-$0.90. The company had previously guided full-year distributions of $1.60/common unit.

For fiscal year 2013, Atlas is guiding distributions at $2.25-$2.40/common unit, an increase of 45% over the original 2012 guidance of $1.60/common unit.

Atlas will pay for the acquisition with proceeds from a private placement of 6 million common units at $20 each and borrowing from its revolving credit facility.

Atlas shares closed yesterday at $21.51 in a 52-week range of $20.00-$23.90.

Paul Ausick