Atlas Pipeline Partners – Prospects look bright

I recently listened to the year end conference call for Atlas Pipeline Partners LP (APL: 36.41 0.00 0.00%). The company had an outstanding 2007 and prospects look good for 2008. APL is majority owned by Atlas America (ATLS: 25.04 0.00 0.00%) which manages several related companies in the natural gas business. Here is an excerpt I received as a comment on my first post concerning APL.

APL is actually owned by AHD which in turn is owned by ATLS. ATLS actually owns and manages APL, ATN and AHD.Sincerely,

Robert R. Firth
COO Atlas Pipeline Holdings (AHD)
President and CEO APLMC (APL)

Although I find the corporate structure a little confusing this is what I took away from the conference call:

They are drilling for and finding natural gas in their several exploration areas.
They are transporting natural gas.
They are processing natural gas.
They are selling natural gas.
Their prospects to make money from natural gas are excellent.

APL generates revenues in the transporting and processing stages, earning a percentage of the value on all the gas transported and processed. The $3.70 dividend for 2007 should approach $4.00 for 2008. If gas prices increase, even better.

Many natural gas watchers (??!) believe this clean energy source has remained undervalued in relation to oil. Many are projecting near term price increases. In this site’s 20 Stock Portfolio, APL and Penn West Energy (PWE: 21.87 0.00 0.00%) give high income exposure to this important energy source.

Note: I currently do not have a position in APL. I have a long position in PWE.

Comments

andy dee

andy dee said on 2nd March:

Of the many, many entities in this complex corporate conglomerate – (including, but not limited to…APL, AHD, ATN, ATLS, REXI, Lightfoot), I like ATN which is Atlas Energy Resources.

In 30 words or less…

They have significant acreage in the Marcellus Shale, and have drilled enough wells to know they are in a sweet spot. They have APL as their “gatherer”, by contract, and they finance drilling through partnerships where they put up only about 25% of the expenses but get almost 40% of the returns plus management fees.

That’s 52 words. Sorry.

Re: APL. Also interesting, but a bit riskier than your normal “upstream” pipeline gatherer/processor, because a good deal of their revenue comes from reselling NG and NGLs, at the “tailgate” of their processing plants. The major “fee” income is from collection for ATN, principally in Appalachia, and soon in Tennessee.

I’m not an expert in these areas – I’ve been studying the companies and MLPs in general for about three weeks now. Have a lot to learn.
andy dee

andy dee said on 2nd March:

Found four more “Cohen” Corporations – all publicly traded this morning. Doesn’t say anything with regard to APL, but it seems as though the “Cohen Energy” has to be dissipated a bit watching over all of these “children”.

Anyway Ed Cohen, the “pater nostra” of the family has at least two sons, Jonathan and Daniel, and a wife Betsy.

Jonathan in addition to serving as vice-chairman of one of the energy companies, also runs Resource America, REXI, and RSO, Resource Capital Co.. Daniel in turn runs RAS, RAIT Financial Trust and is the Executive Chairman of AFN, Alesco Financial. Betsy, half of the duo that produced these talented children, is no slouch herself – she is the CEO and founder of TBBK, The Bancorp Corp. These companies appear to do business with each other – nothing wrong there…good to keep it in the family.

Have I missed anything?
Tim

Tim said on 2nd March:

Andy, thanks for the informative comments. As I wrote, I have not taken time to get my head around the corporate interconnects of the “A’s”. I think your info will be helpful to other readers here.

Tim

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Atlas Pipeline Partners – Prospects look bright

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