I have for sometime been a fan of Atlas America (NSDQ: ATLS) and its publicly traded subsidiary companies, Atlas Energy Resources (NYSE: ATN) and Atlas Pipeline Holdings (NYSE: AHD). The Atlas companies as I will refer to the three, are some of the best-run energy companies available to private investors. The Cohen family, which manages all three as will as several other publicly traded companies have this profound ability to turn everything the touch into gold. Atlas America is no exception to this rule.
I prefer Atlas America as an investment because it allows you to gain exposure to all of the Atlas companies through its role as a holding company. I have previously talked in detail about Atlas America and a review of the company and my opinions of it can be found here. Today, I thought I would highlight the superb results that came out last night from Atlas Energy Resources of which Atlas America owns a 48% interest.
For the quarter ended on March 31st Atlas Energy Resources reported a 189% jump in EBITDA from $21 million during the same quarter last year to $79 million this year. Distributable cash flow, which is incredibly important to valuing Atlas Energy Resources as it is a limited partnership, jumped 196% to $53 million from $18 million in same quarter last year. Revenues as a whole, which is derived primarily from natural gas production, jumped 85% on a year over year basis. The firm is clearly showing dramatic organic growth and a profound ability to successfully integrate its 2007 acquisitions.
Several points in the press release which I believe should be of special interest to investors are the company's statements that organic growth in its appalachian division was 26% for the quarter while the firm's margins improved by 30% as a result of the success of its partnerships. For those of you that are not aware of Atlas Energy Resource's unique partnership model I would advise looking into it as it allows the company to conduct substantial amounts of drilling without investing significant amounts of its own capital, leaving more money for shareholder dividends and future growth.
An example of the size and importance of these partnerships can be found in the companies launch of a new partnership fund that is expected to bring in $236 million. The partnership arrangement cannot support all future growth as seen in the companies dramatic increase in capital expenditures to $42 million for the quarter from a mere $13 million a year ago. These investments will undoubtedly help to lay the groundwork for the firm's future success. This quarter's results make Atlas America (as the majority owner of Atlas Energy Resources) as compelling as ever, the firm is without a doubt worth some of your time as it offers a rare opportunity to outperform the market with less risk over the long haul.
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