Atlas Energy Update – 125 Layoffs Companywide

On Tuesday, after receiving ongoing tips that layoffs had occurred at Atlas Energy (a company with assets in the Marcellus/Utica), we published a post with an unconfirmed rumor that Atlas had laid off 30 or more people in its Waynesburg, PA location (see Atlas Energy – Rumored Layoff of 30+ People in PA). We later received another tip that indicated the layoffs may have been more “surgical” than “mass” in nature. Since that time, we’ve received a fifth tip–this one from a highly place source that we trust implicitly. This new tipster could not verify the 30 layoffs in Waynesburg, but the tipster does have knowledge that recently the company laid off ~125 people companywide. Atlas has still not responded to our requests for comment. We’ll continue to update when/if we learn more.

Atlas Energy – Rumored Layoff of 30+ People in PA

cutting jobsUPDATE Feb. 24: MDN posted a follow-up, with more insight/rumor, from a fourth source. See the end of the article.

For a week now MDN has been hearing rumors that Atlas Energy was about to, or already has, laid off a number of workers. Atlas, you may recall, once seemed to be the golden child–everything they touched turned to gold. They sold much of their Marcellus operation in 2011 to Chevron for $4.3 billion, and later sold another batch of Marcellus assets to Targa Resources for a staggering $7.7 billion. They still have some operations in the Marcellus, but recently the New York Stock Exchange threatened the company with de-listing their stock (see Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing). In January the company announced an IPO in which they hope to raise $1 billion (see Atlas Energy Subsidiary Threatened with NYSE De-Listing, IPO?!). One week ago we got a tip from an MDN subscriber that there were rumors of a layoff…
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Atlas Energy Subsidiary Threatened with NYSE De-Listing, IPO?!

As we pointed out last week in a post, Atlas Energy (based in Pittsburgh) used to be a major player in the Marcellus but sold off huge holdings in the Marcellus in two different tranches–in a $4.3 billion deal with Chevron in 2011 and in a $7.7 billion deal with Targa Resources in 2014. Atlas still has some holdings in the northeast, but as we previously pointed out, the company with a golden touch seems to have lost that touch. In December the New York Stock Exchange sent Atlas Energy (stock ticker ATLS) a notice that the stock price had fallen so far they are in danger of having it de-listed (see Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing). We noticed two more stories from yesterday. One story is about a second notice from the NYSE telling Atlas that their subsidiary company Atlas Resource Partners (ticker symbol ARP) is now also in danger of being de-listed. The other story is about yet another Atlas subsidiary company–Atlas Growth Partners–filing a plan with the Securities and Exchange Commission to float an initial public offering (IPO) of 100 million shares of stock, hoping to raise $1 billion! Stock for two parts of the company is threatened with becoming penny stock, and yet they’re offering new stock in essentially the same company hoping to raise another bil. Go figure…
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Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing

Atlas Energy, a once-major driller in the Marcellus Shale, sold much of their Marcellus operations to Chevron in 2011 (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward). The Cohen family that runs the company is interesting and colorful. They bought into the company in the 1990s and happened to be in the right place at the right time, just prior to the discovery of the Marcellus (see The Unconventional Rise & Sale of Atlas Energy). In October 2014, the Cohens did it again. Talk about perfect timing! The Cohens sold more of what was left–for a truly astonishing $7.7 billion–to Targa Resources Partners, just prior to the crash of natgas prices (see Atlas Energy/Pipeline Sells Itself (Again) – for $7.7 BILLION!). What’s left now? With respect to the Marcellus, we don’t think there’s much left. But Atlas still does own operating interests in Marcellus wells. It looks like maybe the Cohen family’s good luck may have run out. The New York Stock Exchange has issued Atlas a notice that unless it’s stock price and market capitalization goes up, the NYSE will de-list the company from the exchange…
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Indian Giant RIL Looking to Dump its Marcellus Joint Ventures

The single largest company in India, and one of the largest energy companies in the world, is Reliance Industries Limited (RIL). As of July 2013, RIL had invested a massive $5.7 billion in three shale joint ventures–the bulk of that in the Marcellus Shale. The company was planning to double it’s shale investment to over $10 billion! But a funny thing happened on the way the Forum. Prices for oil and gas started to slump, and RIL’s return on their shale investments slumped with it. RIL invested $3.5 billion in a Marcellus joint venture with Atlas Energy in 2010 (see Joint Venture Between Reliance Industries and Atlas Energy Worth $3.5 Billion Over 10 Years). RIL later battled Chevron to buy Atlas–but Chevron won, so RIL became a jv partner with Chevron (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward). RIL currently has 3 jv’s, the Chevron jv in the Marcellus (owns 40% of that acreage), a jv with Carrizo Oil & Gas in the Marcellus (owns 60% of that acreage), and a jv with Pioneer Natural Resources in the Texas Eagle Ford (owns 45% of that acreage). Now comes word that RIL wants to exit all of their jv’s and wash their hands of U.S. shale, a 180 degree reversal from just a few years ago…
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Atlas Resources Takes Out “2nd Lien” to Raise $250M in Cash – Why?

Sometimes the world of high finance and elaborate corporate structures–particularly in the oil and gas industry–just boggles our minds. Sometimes it’s hard to wrap your brain around it. This is one of those times. In the past we’ve chronicled the rise and sale of Atlas Energy, a once-major driller in the Marcellus Shale. In 2011 Chevron bought a big chunk of Atlas for $4.3 billion (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward). The Cohen family that runs the company is interesting and colorful. They bought into the company in the 1990s and happened to be in the right place at the right time, just prior to the discovery of the Marcellus (see The Unconventional Rise & Sale of Atlas Energy). Then in October of last year, the Cohens did it again. They sold more of what was left–for a truly astonishing $7.7 billion–to Targa Resources Partners (see Atlas Energy/Pipeline Sells Itself (Again) – for $7.7 BILLION!). What’s left now? With respect to the Marcellus, we don’t think there’s much left. But Atlas still does own operating interests in Marcellus wells, so when we saw a press release from the company saying they have just taken a “second lien” on the company to raise $250 million in cash, it piqued our interest…
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Chesapeake, Atlas Try Forced Pooling in Columbiana County, OH

Forced pooling, or as it’s called in Ohio, “unitization”–it’s something we understand, but we don’t like it. Chesapeake Energy and Atlas Noble have filed petitions seeking forced pooling for property owned by a number of landowners in Columbiana County, OH. Some of those petitions have been approved by the Ohio Dept. of Natural Resources (ODNR). Some are still pending.

The industry and landowners who have leased will argue it’s not fair that one or two hold-outs who won’t lease can scuttle a deal to drill and therefore should be forced to lease if they can’t come to reasonable terms. Landowners who don’t want to lease say it’s their land and drillers can figure out how to drill around them–I don’t say you can’t drill, and you don’t say I have to drill under my land. We favor the later position, to the consternation of our friends in the shale drilling industry. We say, make it worth their while–give them an offer they can’t refuse. Here’s some of the details on the forced pooling being sought by Chessy and Atlas in eastern OH:
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The Unconventional Rise & Sale of Atlas Energy

Atlas Energy, aka Atlas Resource Partners and Atlas Pipeline Partners, is a Pittsburgh-based exploration and production (E&P) and midstream company with active drilling operations not only in the Marcellus/Utica region but another four resource plays as well. The company has an unconventional history, to say the least. The entrepreneurial Cohen family from Philadelphia bought a major stake in the company in the late 1990s and installed son Jonathan in Pittsburgh to help run it. The Cohens had no special knowledge or foresight but seemed to be in the right place at the right time (the Marcellus Shale), because in 2010 the Cohens sold Atlas Energy to Chevron for a pile of cash (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward).

An interesting story about the entrepreneurial Cohen family, the businesses they’ve founded or grown, and the rise of Atlas Energy as a major driller in the Marcellus…
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Atlas Resource 3Q13: Production Up, Losses (Way) Up Too

Atlas Resource Partners is a Pittsburgh-based exploration and production (E&P) company with active drilling operations not only in the Marcellus/Utica region but another four resource plays as well. Production for the company has gone up–way up–in 3Q13 thanks to newly acquired acreage and operations, but also due to more wells going online in the Marcellus/Utica. However, the company’s financials continue to be troubled. They show a net loss of $39.7 million for 3Q13–which is almost 4x the loss for the same period last year.

Revenue was up for Atlas in 3Q13 (that’s a good thing), but costs and expenses rose even more (that’s a bad thing). Selected portions of the Atlas 3Q13 update:
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Atlas Update: Finding Alternatives to Blue Racer Natrium Plant

Atlas Resource Partners (ARP), a driller working in several plays–including the Marcellus and the Utica–issued a financial and operations update yesterday. Included in the update are details of Atlas’ recent activities in the northeast–number of wells drilled, etc. Pretty standard stuff–the “normal” kind of periodic press release issued by drillers, except…

It’s interesting to MDN that in Atlas’ update they mention, rather prominently, the ongoing issue that Blue Racer Midstream’s Natrium processing plant has been shut down since an explosion and fire occurred on Sept. 21st (see Natrium, WV Fractionation Plant Still Closed After Explosion/Fire). The shut-down is having a significant negative affect on Atlas’ ability to get gas to market. So Atlas, like other drillers in the Ohio Valley area, is seeking alternative sources to process their gas. They’ve located a partial solution and continue to look.

Blue Racer has a growing problem on their hands with the continued shut-down of Natrium if their customers continue to find other solutions…
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PA’s Top 10 Marcellus Drillers Based on Number of Permits

Top 10Who doesn’t love a Top 10 list? David Letterman has built a career on them. There are a lot of different ways to measure who the biggest drillers are in Pennsylvania–the Top 10 drillers. Recently, the Pittsburgh Business Times took a fresh stab at it. They counted how many shale gas wells have been permitted for drilling companies. It doesn’t mean the wells have been drilled yet, but you don’t spend big bucks on a permit to not drill. We can safely assume if it’s permitted, it either has been or soon will be drilled.

So who are the Top 10? The names of the drillers in the list may not surprise you, but we bet the number of permitted wells they have and their order in the list may surprise you…
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Top 5 Drillers in SW Pennsylvania by Number of Wells Drilled

Each year the Pittsburgh Business Times ranks the “top 25” drillers in southwestern PA according to the total number of wells they’ve drilled to date in the Marcellus Shale. The 2013 list was published today.

Here’s the top five from that list—with driller name and the number of wells drilled:

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