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Atlas Energy (NYSE:ATLS)

Q2 2011 Earnings Conference Call

August 4, 2011 09:00 ET

Executives

Brian Begley – Head of Investor Relations

Ed Cohen – Chief Executive Officer

Gene Dubay – Senior Vice President - Midstream of the General Partner

Sean McGrath – Chief Financial Officer

Analysts

Stephen Maresca – Morgan Stanley

Sharon Lui – Wells Fargo

Operator

Good day, ladies and gentlemen, and welcome to the Second Quarter 2011 Atlas Energy, L.P. Earnings Conference Call. My name is Jeff and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will facilitate a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Brian Begley, Head of Investor Relations. Please proceed, Mr. Begley.

Brian Begley – Head of Investor Relations

Good morning, everyone, and thank you for joining us for today’s second quarter 2011 earnings call. As we get started, I'd like to remind everyone that during this conference call, we'll make certain forward-looking statements and in this context, forward-looking statements often address our expected future business and financial performance and financial condition and often contains words such as expects, anticipates and similar words or phrases.

Forward-looking statements by their nature address matters that are uncertain and are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in the forward-looking statements. To discuss these risks in our Quarterly Report on Form 10-Q and our Annual Report also on the Form 10-K, particularly in Item I.

And I’d also like to caution you not to place undue reliance on these forward-looking statements which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly update our forward-looking statement or to publicly release the results of any revisions to forward-looking statements that may be made to reflect events or circumstances after the date thereof or reflect the occurrence of unanticipated events.

Now, before I turn the call over to our management team for their comments, I’d like to remind everyone of our upcoming investor conference appearances later this month. These include Tuohy Brothers Energy Conference on August 9th in New York City, the EnerCom, Oil & Gas Conference in Denver on August 18th and the Citigroup One on One MLP Conference in Las Vegas on August 24th and 25th. And with that I’d like to turn the call over to our Chief Executive Officer, Ed Cohen for his remarks. Ed?

Ed Cohen – President and Chief Executive Officer

Hello everyone operating results for Atlas Energy LP for the second quarter I am glad to report were excellent. Income from continuing operations year-to-year increased more than threefold from $7.3 million to $24.4 million and other initiative were similarly favorable. Gratifying results that our CFO, Sean McGrath will shortly discuss in detail. But the real news for Atlas Energy during the quarter lay in the extraordinary progress the company made toward its overarching goal and that goal is to recreate with even greater inherent value, unique enterprise that was Atlas Energy prior to its sale in part to Chevron in February 2011.

I am here to report now that the second quarter saw enormous progress toward that goal and toward to continue to rapid multiplication of shareholder value at Atlas and in light of this progress we are now reaffirming our prior guidance for 2011. Now then the old Atlas Energy was exceptional, exceptional in its shale assets that included both highly desirable acreage as well as a technical staff of energy professionals, second for its size tonight. It was exceptional on a considerable cash flow drive towards control of Atlas Pipeline APL and from the incentive distribution rates IDRs that a company this control.

Exceptional in the cash flow and other advantages drive from a syndication business that has provided energy investment opportunities to tens of thousands of wealthy individuals. And exceptional and in its inventiveness, the old Atlas Energy always surprised even its admirers with its creative innovation. We held out the new Atlas Energy. As I noted in February in our first conference call after the Chevron sales, our guiding principle remains a revolutionary more of the same, work cash flow, more good acreage, greater professional skills and more innovation all of which were measurably increased in the second quarter. As for acreage, we have obtained farm-out drilling rights already to 185,000 acres of highly perspective Niobrara acreage. This is beyond the residual acreage we retained after the Chevron’s sale. And we are strenuously working to build our Marcellus position in West Virginia.

Our processing and transportation subsidiary, Atlas Pipeline Partners, is once again furnishing incentive distribution payments to Atlas Energy. Cash flow that we believe will increase rapidly and significantly in the near future.

During the second quarter, we signed a number of world-class professionals. Most of them were leaving major multinational companies to fill senior positions at Atlas Energy, cutting-edge drilling and completion engineers, senior geologist, senior land executives and so forth joining the talented group who restarted Atlas Energy in February 2011.

Most importantly perhaps, our reconstituted land department now headed by a former senior executive of Shell with over 30 years of experience at building strong positions in new basins, this revitalized department should enhance our strategic acreage position providing sites and drilling leases and farm-outs worthy of our dream team energy professionals and Matt Jones, President of our E&P Division shortly will address our success in assembling this team.

On another front, we are once again actively raising money for our investment programs. With every expectation that this year’s raise will meet previously announced expectations. We anticipate that our future offerings will match or exceed our top past programs and dollars raised and that we will be quick to respond has in the past the possible future changes and investment fashions on government rules.

Too phenomena from the second quarter are especially illustrative of Atlas Energy’s resurgence. Our success in restoring IDR income from Atlas Pipeline and our lucrative gain from the sale of the coal business owned by Lightfoot Partners, an investment vehicle that we played a major role in creating a few years ago.

First, APL, all three of Atlas Pipeline’s processing facilities are currently operating at full capacity. And APL is in fact bypassing offloading rejecting and otherwise disposing of excess intake. Loss profits, which will be reaped when there are some $400 million in organic projects and our expansion of liquid line takeaway capacity are effectuated in the coming weeks and months. This burgeoning success story was shortly be elaborated upon by Gene Dubay, Atlas Energy Senior Vice President and CEO of APL who serves with Jon Cohen and myself as the Executive Committee of APL. But what a difference a year makes?

Only last year, APL was struggling with excessive debt and unused capacity, but we succeeded in selling APL’s Elk City, Sweetwater, and Nine Mile processing plants for $682 million in cash. Although this sale eliminated over 400 million cubic feet per day of APL’s total processing capacity of 900 million cubic feet per day. Much of the divested capacity was in fact unused.

Less than a year later, we are replacing all this underutilized capacity with reconstituted organic growth at our rapidly expanding West Texas, West Oklahoma, and Velma facilities. When our expansion projects are mature and completed, capacity will again be 900 million cubic feet roughly, but it should all be utilized and profitable. And Atlas Pipeline’s balance sheet is now extremely low-leveraged. Although substantial sums have already been expanded for growth capital projects, especially in the second quarter, APL has not yet begun to generate revenue from these organic growth projects although revenues in these organic projects should begin in the current quarter.

As a result, APL and its general partner, Atlas Energy, have their interest perfectly aligned. As the Manager of APL, Atlas Energy will continue to increase APL’s distributable cash flow and will increasingly share in these distributions through its incentive distribution rights. As Morgan Stanley indicated in note to investors yesterday, APL’s second quarter results suggest an early return to what Morgan Stanley called the high-splits, that’s where Atlas Energy receives 50% of any additional growth in APL distributions. An event that Morgan Stanley estimates will occur within six months.

Atlas Energy itself in its E&P operations has reached a height of low leverage. We in fact have no debt outstanding. And we remain at Atlas Energy on the E&P side highly hedged. Borrowing base of our E&P bank credit facility at Atlas Energy E&P was recently increased by almost 30% to $160 million, but as I said, we have absolutely nothing drawn against this facility.

And for hedging, note that for the remainder of this year, Atlas Energy’s current production is 77% hedged at favorable prices. And even as far out as 2103, Atlas Energy’s current production is already 51% hedged. But beyond our E&P and processing and transportation assets, Atlas has many other assets, which are often overlooked. Let me mention of them Lightfoot Capital Partners which is a good example for the second quarter. Now, we played a leading role in starting this operation in 2007 and Atlas Energy’s Chairman, Jon Cohen serves as Chairman of Lightfoot’s general partner.

In March 2011, total net investment of Lightfoot of some $12 million, Atlas Energy received over $24 million from a single transaction relating to Lightfoot’s coal assets. $13.7 million in cash received and a further $10 million, which we are keeping at Lightfoot, approximately $3 million of which is in escrow. Lightfoot’s new task is to build further it’s existing in my opinion highly promising terminal operations. I invite you to stay tuned now.

Now, Gene Dubay and Matt Jones are going to proceed to highlight certain aspects of our processing and E&P businesses respectively. After which, Sean McGrath will discuss the financial aspects of our second quarter. Gene?

Gene Dubay – Senior Vice President - Midstream of the General Partner

Thank you, Ed. This past quarter has been one in which Atlas Pipeline Partners has continued prosper. During the second quarter of 2011, we gathered 575 million cubic feet per day of natural gas. This was an increase of 9% over the prior quarter and an increase of 17% over the second quarter of 2010.

Our natural gas liquids recoveries increased by 5% over the prior quarter despite the fact that we are constrained on our production. Our condensate recoveries increased by 31% on a daily basis over the prior quarter. The volumes of gas that we are receiving in each of the areas we operate exceeds the processing capacity we have currently available.

To remedy this situation and to maximize the margin to be generated, we are focused on adding capacity with the plant projects announced earlier in the second quarter. In our Western Oklahoma operation, we are processing 220 million cubic feet per day offloading approximately 20 million cubic feet per day in bypassing 40 million cubic feet per day.

Our new 200 million a day cryogenic plant is on order, we expect delivery in November and we expect the plant to be fully operational by the end of the second quarter of 2012. At Velma, we are processing at 106 million cubic feet per day. We are entering into offloading agreements for incremental production, which we expect on our system shortly. We have a new 60 million a day cryogenic plant that has been ordered for this facility and we expect that plant to be on line by the end of the second quarter of 2012.

In West Texas, we are processing 205 million cubic feet per day. However, given constraints on our liquids takeaway capacity, we are rejecting up to 2000 barrels per day of ethane. We expect to get some additional liquids takeaway capacity in the area in the near-term, which will be much needed with restart of the Midkiff plant and the additional 60 million a day of incremental capacity now will be added to our operation. We expect the plant to be back in service in the next two weeks.

With respect to our interest in the West Texas LPG line, which Chevron operates, the result of that operation is consistent with were slightingly better than in our forecast. The cash flow from net investment will not impact DCF until the third quarter, when we receive the proceeds from the second quarter cash flow. We continue to work with Chevron to ensure that that pipeline remains full and we are exploring ways to increase the earnings potential of this asset. We are pleased with our strategic acquisition.

The distribution we announced last week increased 17% from the previous quarter. We have new opportunities presenting themselves to us today and are challenged to maintain our focus and execute at level that will provide substantial incremental value for our investors and the investors of Atlas Energy. I am confident we can accomplish these tasks and take advantage of the opportunities that are developing for our business.

Now I will turn over the discussion to Matt Jones, the President of Atlas Energy E&P Division. Matt?

Matt Jones – President, Atlas Energy E&P Division

Thank you, Eugene. During our first 120 days of operation is the new E&P Davidson of Atlas Energy. We focused on maximizing the opportunities available to us from the asset based we acquired from former Atlas Energy, Inc. enterprise increasing our acreage areas and drilling opportunities and enhancing our technical staff to support our long-term growth objectives. I am happy to confirm that we have succeeded in all fronts.

Let me begin by stating that we have brought together over the last few months of world class technical staff including senior managers who left major integrated oil and gas companies to join us. With the addition of these key people to our company, we now have the internal capability to thoroughly and fully evaluate any oil and gas basin in the United States and in fact may very well indentified new opportunities in previously unidentified areas, which has the potential of creating substantial value for our company.

All of the activities that we undertake in our business to man the highest caliber of technical professionals with deep experience in knowledge in our industry including geology and geoscience, production, completions and drilling engineering, land acquisition and administration, oil and gas field services among others.

With respect to this we mentioned on our first quarter call, our first quarterly earnings call is the new Atlas Energy that we have indentified highly capable and experienced technical professionals who we are considering for addition to our staff. So, I am happy to report today, that we have been very successful in attracting and hiring outstanding professionals in all of these areas.

With their collective experience of more than 200 years in the field patch, I am highly confident that these new senior leaders in our company combined with a strong staff of 380 or so employees, who joined us from the old Atlas Energy will significantly contribute to the successful future expansion of our business. In fact our team is already hard at work finding attractive opportunities that will lead to our next stage of growth.

With respect to the expansion of our assets and drilling opportunities, we have identified favorable current and future drilling opportunities on your Tennessee, Indiana and Ohio acreage positions, will include some of these drilling sites currently in our partnership business and likely others and future partnership programs.

In addition to these organic drilling opportunities, we have established joint venture relationships that will allow us to drill 13 Marcellus wells in West Virginia and Niobrara natural gas wells in Colorado. With these wells will also be included in our partnership management business. Also with respect to Colorado, we formed in to roughly 180,000 acres of land opportunity.

We have announced in the recent past that we have added 50 square miles to our 3D seismic shoot on the most promising acreage including in our Niobrara farm-out arrangement. We will review the interpreted data in the near future and we are hopeful that the additional seismic information will result in the identification of hundreds of additional drilling sites.

Drilling and completion work for the fourth coming syndication program wells is scheduled to commence shortly and we will continue to the upcoming fall and winter months. From an earnings perspective, we will generate upfront fees as we deploy our drilling partner’s capital to fund the drilling and completion activities as well as our connected last this year and early next year, we in a partners, who will benefit from the oil and gas production generated from these wells. We will also operate the wells to the duration of their productive lines and we will receive monthly fees from our partners for this service.

Separately, we continue to progress with the drilling and completion of 11 Marcellus horizontal wells located in Fayette County, Pennsylvania that are being funded through a 2010 drilling program. Of these 11 wells, 8 have been drilled to total debt and the remaining three are scheduled to be drilled to total debt this morning. The (indiscernible) on these wells have been very encouraging. Completion work is scheduled for October and November and we expect to turn these wells in line in December and January. Again the deployment of our drilling partner’s capital here for these wells will also result in additional upfront and ongoing fees for our company. In addition to these 11 Marcellus horizontal wells, we’ve also drilled and completed 5 horizontal Marcellus wells located in Westmoreland, Fayette and Washington Counties in Pennsylvania. These wells showed very encouraging initial flow rates and are scheduled for connection later this year and early next year upon the completion of required infrastructure.

Collectively with the addition of the wells that will add to our systems from our current partnership program business, the 11 horizontal Marcellus wells located in Fayette County that will be completed over the next couple of months and the five completed horizontal Marcellus wells which should be connected over the next several months or so. We anticipate generating meaningful increases in our production beginning late in the fourth quarter of this year and into the first half of next year. Also and again the deployment of our drilling partner’s capital over this period will add to our stream of upfront and ongoing fee generation. Of course, this significant identifiable growth doesn’t take into consideration the various organic and external growth opportunities that we’re evaluating now. These include promising developmental opportunities, where our capital investment requirement is limited.

We’ve expanded discussions with a number of potential new joint venture partners, we have attractive well drilling opportunities available for our company and the investors in our oil and gas investment partnership programs. Additionally, we’re reviewing organic and external leasing opportunities in Appalachia and other regions, where we can most effectively execute our business plan. We are ready to substantially build unitholder value and we look forward to the quarters ahead.

With that, I’ll turn the call to Sean McGrath, our Chief Financial Officer.

Sean McGrath – Chief Financial Officer

Thank you, Matt. I thank all of you for joining us on the call this morning. We appreciate your interest in Atlas Energy. Overall, Atlas Energy generated adjusted EBITDA of 26.4 million and distributable cash flow of 22.7 million, $0.44 per unit for the period. Production margin for the period was 13.7 million, $4.10 per Mcfe, which impacted favorably by higher natural gas and higher stock prices. Unhedged natural gas prices for the period were over $5 per Mcf and approximately 10% increase over the first quarter of 2011 while unhedged oil prices nearly reached $100 per barrel, a 14% increase over the first quarter.

Our results were strengthened on our strong derivative position as we were hedged on over 75% of our natural gas production and a 5.50% on our oil production for the period. total production cost for the period were slightly higher with the first quarter which were principally due to the prior quarter being impacted by the timing of cost incurred and allocation of this cost to Chevron. Partnership management margins for the period were $6.2 million. As a reminder, we recognized well drilling and completion revenue as we invest by drilling partner’s capital, administrative and oversight revenues for drilling program wells are started.

At the end of the quarter, we had approximately $36.4 million of expense rate in 2010 that remained to be the point, which we expect to occur to the remainder of 2011, and the early part of 2012 and will generate fee margin of approximately $5.5 million. This capital will be deployed on our 11 Marcellus horizontal wells that we expect to complete and connect during the fourth quarter of 2011 and the first quarter of 2012, which will significantly impact production volume and have a favorable effect on these operating expenses per Mcfe.

Cash distributions received from Atlas Pipeline were $2.7 million for the period which are reflecting our results during the period received. For the third quarter of 2011 we will have got $3.7 million of cash distributions received from APL including $0.5 million incentive distributions based upon our recently amounted distribution of $0.47 per common unit. APL positioned itself for significant growth in the near-term and that will be a significant driver of our financial results in the coming period.

As Ed previously discussed our results were also favorably impacted by a $13.7 million cash distributions received from Lightfoot from the sale of International Resource Partners for $475 million in cash. On a GAAP basis, the sale of IRP resulted in a gain of $18.1 million, which is recognized within other income.

Net cash general and administrative expense was $9.6 million for the period. Cash G&A cost for the first half of 2011 were normal as they’re effected by the first quarter closing of the Chevron transaction and cost incurred for the partnership fund raising program which I look forward to see credit upon receipt of the funds during the third quarter. G&A expenses also reflects the cost to expand our technical support team during the period which Ed and Matt have previously mentioned.

Net cash G&A expense for the period have presented net of $6.2 million reimbursements from Chevron for services provided by us under our Transition Service Agreement. And that agreement Atlas will receive net reimbursements from Chevron for multiple administrative and operational services provided between the parties generally through November of this year subject to various expansion options.

Going forward we would expect G&A for the second half of the year to come in at lower run rate in the second quarter. We expect second half 2011 G&A expense to be between $11 million and $13 million net of the reimbursement. To remind that we are reestablishing our business platform we are adding the necessary resources and skilled individuals for substantially growing our operations required for our future plan.

Total capital expenditures for the period were $6.7 million, including $3.6 million of maintenance capital expenditures. Total capital expenditures consist principally of our investment and drilling programs, planned lease cost, and gathering pipeline expenditures. Maintenance capital expenditures for the period reflect management’s estimate and reserve replacement cost based on our current levels of production.

With regard to risk management activities, we have been methodical and yet opportunistic in adding to hedge business significantly mitigate potential downside volatility associated with movements in natural gas and oil markets and provide us with better clarity with respect to anticipated cash flows. Currently we have derivatives covering 24.2 Bcfe of production for periods through 2015 consisting of a combination of swaps and collars provided with outside protection -- with outside potential and [ph] for natural gas price environment.

Based on second quarter production levels, the natural gas production is approximately 77% protected for the remainder of 2011, 61% protected for 2012, 51% protected for 2013 at an effective average poor price because of $5 for this period. We are committed to adding protection to our business and will continue to do so as we have demonstrated in the past. Please see the tables in our press release for more information about our hedges.

Moving on to our debt position and liquidity, we ended the quarter with no amounts drawn on its revolving credit facility. During the period in connection with our regularly scheduled predetermination, we increased our borrowing base by $35 million to $160 million. In addition we have a cash position of $108.5 million at the end of the period.

With that, thank you for your time, I will turn the call to our President and CEO, Ed Cohen.

Ed Cohen – President and Chief Executive Officer

And I am going to ask our operator Jeff to open the lines for questions.

Question-and-Answer Session

Operator

Thank you, Mr. Cohen. (Operator Instructions) Our first question comes from the line of Stephen Maresca with Morgan Stanley. Please proceed.

Stephen Maresca – Morgan Stanley

Hi, good morning everybody.

Ed Cohen

Good morning Stephen.

Sean McGrath

Hi.

Stephen Maresca – Morgan Stanley

Hi, thanks as always for the details and candor. I wanted to talk a little bit picture on the partnership drilling program and the final opportunities that you guys have and you talked a little bit about favorable opportunities Tennessee, Indiana, Ohio that are currently in the partnership. Once you get new money, where do you see most opportunities, is the focus going to be in Appalachia and specifically do you see any opportunity in moving more towards some of these newer liquids price like a unit covered to pursuing that we’re talking over the past week or so?

Ed Cohen

As our opportunities arise we plan to make sure that the partnership business gets full opportunity to be involved. Right now however our present offering is on the streets and we’re not in a position for securities reasons to discuss that in detail.

Stephen Maresca – Morgan Stanley

Okay, one more, when will the partnership race be completed and want to know how much has been raised?

Ed Cohen

Our expectation is that – that will be not far in the future. And we had a second offering coming down the pipe before the end of the year. So, within the next 150 days without the results not only the first two offering, but also the second.

Stephen Maresca – Morgan Stanley

Okay, how should we also be thinking about it obviously extremely strong cash flow you’re not even full up and running, but how should we thinking about the coverage and you had almost two times on a cash flow to what you paid out coverage for the quarter and realized there are some moving pieces, but how should we be – how are you guys thinking about that going forward in terms of what you like to pay-out in terms of what you are generating?

Ed Cohen

Well, I think once we get into an ongoing situation where our quarterly results are likely to be in a regularized fashion that will be up to our Board to Directors to determine the actual pay-out ratio, but my expectation is that it will be a fairly conservative ratio with fine coverage and a lot of retention. So whether that means a 1.2 times ratio or even ratio as high as 1.4, 1.5, that will have to be determined by the Board based on circumstances at that time, but you are right our cash flow is amazingly strong and this should order very well for both very conservative policies and for very substantial and very satisfying pay-outs – actual pay-outs.

Stephen Maresca – Morgan Stanley

Okay. Final question, you talked a lot about increasing staff on the technical side and hiring some pretty good people away from world-class majors, are you filled up in personnel or do you need more to continue over the growth over the next 12 to 18 months?

Ed Cohen

For our present expectation of regenerating the old Atlas with its world-class staff and its incredible capability, I think where they are already. It’s really an increase in staff. We really were replacing people that were necessary to our operation and we have done that. So we are very pleased about it. My hope of course is and I’d only say my expectation to that is we expand the scope of our operations will find ourselves forced although we’ll always pay close attention to keeping cost under control. We’ll find ourselves force to go out and increase the dream team even further, but I can’t guarantee that we’ll be able to find people with same high caliber. We have done it twice now, but maybe the third time will be beyond even us.

Stephen Maresca – Morgan Stanley

Okay, thanks a lot everybody.

Ed Cohen

Thank you.

Operator

(Operator Instructions) Up next we have Sharon Lui with Wells Fargo. Please proceed.

Sharon Lui – Wells Fargo

Hi, good morning.

Ed Cohen

Hi, Sharon.

Sharon Lui – Wells Fargo

Just wanted to get some clarification about the timing of the drilling partnerships, is the expectation to, I guess, deploy the string of funds in the third quarter and potentially complete, I guess, the fall rates in the fourth quarter?

Ed Cohen

We have Freddie Kotek with us who heads that operation and we are going to ask Freddie to respond. Freddie, did you hear Sharon’s question.

Freddie Kotek

Yeah, I am not sure what you are referring to from the spring funds. We have funds still being deployed from last year’s raise and funds that are going to be raised in either program this year will be deployed in the some in the third quarter, the fourth quarter, and then well into several quarters of next year. So, funds raise take at least generally from the close of the deal depending on where we are drilling and the types of wells we are drilling could take up to a year or so to deploy after we close.

Sharon Lui – Wells Fargo

Okay. But they expect….

Ed Cohen

Sharon, I might just say the second quarter was unusual. In that, the new funds were not yet available and the old funds were not in a position to be deployed. We expect that the recognition of revenue will be much stronger and more consistent in future quarters for the foreseeable future.

Sharon Lui – Wells Fargo

Okay. But the expectation is that you will still raise at least $150 million this year?

Ed Cohen

Yeah. As I said, we are reaffirming our guidance and we stay and buy what we have previously anticipated.

Sharon Lui – Wells Fargo

Okay. And maybe if you could just talk about the rationale for paying out the net proceeds from the sale versus maybe retaining some of that cash flow for future investments?

Ed Cohen

When you the sale, are you speaking about the Lightfoot sale?

Sharon Lui – Wells Fargo

Yes, that’s correct.

Ed Cohen

We haven’t paid out any of the proceeds. What we had – what we received at the company by agreement of the partners was just added to our general funds and the various partners who include BlackRock and Barclays as I recall and other people of similar stature. The partners are so optimistic about the expectations for the terminal business that we determine to leave proportional amounts in the life of business and as I indicated there is a certain portion that hasn’t yet been freed up in our case it represents about $3 million.

And while it’s a nice transaction obviously it’s a relatively insignificant amount compare to our other continuing revenues in the proceeds that our shareholders received from the deal like Chevron. I thought, but it highlighted was we just have bits and pieces of assets at Atlas Energy, which I think people very seldom think about in which very little value it seems to be attributed to.

But there are occasionally they blaze and do some very good things for the company. So, that’s why he was emphasizing the receipt of or in a event of generated less than $25 million and that gave us in cash, even a smaller amount because it something we generally don’t count in, but it something that people and our staff are working on in a continuing basis.

Sharon Lui – Wells Fargo

Okay, great. Thanks a lot.

Ed Cohen

You are welcome.

Operator

And ladies and gentlemen that will conclude the Q&A portion of the call. I would now like to turn the presentation back over to Mr. Cohen for closing remarks.

Ed Cohen – President and Chief Executive Officer

Thank you all for joining us. I hope that we will have equally good progress to report when the third quarter is announced and we will have the conference call and at this point since, we already into the third quarter, I am confident that you will be quite pleased with our results with the third quarter. Thank you all and good bye.

Operator

Ladies and gentlemen that does conclude today’s conference. Thank you for your participation. You may now disconnect. Have a wonderful day.

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