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Atlas Pipeline Partners L.P. Reports Operating Results (10-Q)

November 05, 2012 | About:

Atlas Pipeline Partners L.P. (APL) filed Quarterly Report for the period ended 2012-09-30.

Atlas Pipeline Partners Lp has a market cap of $1.91 billion; its shares were traded at around $34.67 with a P/E ratio of 12.4 and P/S ratio of 1.5. The dividend yield of Atlas Pipeline Partners Lp stocks is 6.3%.

Highlight of Business Operations:

On May 31, 2012, we entered into an amendment to the revolving credit facility agreement, which among other changes: (1) increased the revolving credit facility from $450.0 million to $600.0 million; (2) extended the maturity date from December 22, 2015 to May 31, 2017; (3) reduced the Applicable Margin used to determine interest rates by 0.50%; (4) revised the negative covenants to (i) permit investments in joint ventures equal to the greater of 20% of Consolidated Net Tangible Assets (as defined in the Credit Agreement) or $340 million, provided we meet certain requirements, and (ii) increased the general investment basket to 5% of Consolidated Net Tangible Assets; (5) revised the definition of Consolidated EBITDA to provide for the inclusion of the first twelve months of projected revenues for identified capital expansion projects, upon completion of the projects; and (6) provided for the option of additional revolving credit commitments of up to $200.0 million.

Gross margin from natural gas and liquids sales and the related natural gas and liquids cost of sales for the three months ended September 30, 2012 decreased primarily due to lower natural gas and NGL sales prices partially offset by higher production volumes.

Transportation, processing and other fees for the three months ended September 30, 2012 increased primarily due to increased processing fee revenue on the WestOK and Velma systems related to the increased volumes gathered on the systems.

rising in the current quarter and falling in the prior year comparable period; offset by a $6.8 million favorable variance for realized settlements in the current period mainly as a result of lower NGL prices. While we utilize either quoted market prices or observable market data to calculate the fair value of natural gas and crude oil derivatives, valuations of NGL fixed price swaps are based on a forward price curve modeled on a regression analysis of quoted price curves for NGLs for similar geographic locations, and valuations of NGL options are based on forward price curves developed by third-party financial institutions. The use of unobservable market data for NGL fixed price swaps and NGL options has no impact on the settlement of these derivatives. However, a change in managements estimated fair values for these derivatives could impact net income, although it would have no impact on liquidity or capital resources (see Item 1. Notes to Consolidated Financial Statements (Unaudited) Note 9 for further discussion of derivative instrument valuations). We recognized a $11.2 million mark-to-market loss and a $5.9 million mark-to-market gain on derivatives, which are valued based upon unobservable inputs, for the three months ended September 30, 2012 and 2011, respectively. We enter into derivative instruments solely to hedge our forecasted natural gas, NGLs and condensate sales against the variability in expected future cash flows attributable to changes in market prices. See further discussion of derivatives under Item 3:

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