Atlas America, Inc. Reports Record Financial Results for the First Quarter 2008

PHILADELPHIA--(Business Wire)--
Atlas America, Inc. (NASDAQ:ATLS) ("Atlas America" or "the
Company") today reported record financial results for the first
quarter 2008.

The results of the first quarter 2008 include:

-- Record adjusted earnings before interest, income taxes,
depreciation and amortization ("EBITDA"), a non-GAAP measure,
of $174.1 million, an increase of $131.8 million, or over
300%, from the first quarter 2007. A reconciliation of
non-GAAP measures, including adjusted EBITDA, EBITDA and
adjusted net income, is provided in the financial tables of
this release. The quarter-over-quarter increase was
principally attributable to contributions from the Michigan
assets acquired by Atlas Energy Resources, LLC (NYSE:ATN)
("Atlas Energy") in June 2007, contributions from the Chaney
Dell and Midkiff/Benedum natural gas gathering and processing
systems acquired by Atlas Pipeline Partners, L.P. (NYSE:APL)
("Atlas Pipeline") in July 2007, significant growth in Atlas
Energy's drilling partnership management business, and an
increase in production from Atlas Pipeline's legacy assets;

-- Adjusted net income of $12.8 million for the first quarter
2008, an increase of $1.0 million or 8%, compared to the first
quarter 2007. Adjusted diluted net income per share was $0.46
for the first quarter 2008, an increase of $0.06 per share or
15% compared to the first quarter 2007. On a GAAP basis, the
Company recognized net income of $6.4 million for the first
quarter 2008 compared with $10.2 million for the prior year
first quarter;

-- Excluding the effect of non-cash derivative expense, total
revenues were $568.6 million, an increase of $351.4 million,
or 162%, compared to the first quarter 2007. The
mark-to-market derivative charge, which was $88.8 million for
the first quarter 2008 compared with $2.3 million for the
prior year first quarter, was principally the result of higher
commodity prices and their impact on APL derivative contracts
for production volumes in future periods.

On May 5, 2008, the Company purchased an additional 600,000 Class
B common units of Atlas Energy for $42.00 per common unit in a private
placement. This common unit offering increased Atlas America's
ownership of Atlas Energy's common units to 29,952,996 common units.

On April 22, 2008, the Company announced that its Board of
Directors had declared a cash dividend of $0.05 per common share,
payable on May 20, 2008, to holders of record on May 7, 2008. The
Company also announced that its Board of Directors approved a 3-for-2
stock split to be effected in the form of a stock dividend.
Shareholders of record as of May 21, 2008 will receive one additional
share of common stock for each two shares of common stock they own on
that date. The shares will be distributed on or about May 30, 2008.
After the stock split, the Company will have approximately 40.3
million common shares issued and outstanding.

The Company owns an approximate 49% common unit interest and all
of the Class A and management incentive interests in Atlas Energy, a
publicly-traded partnership, and an approximate 64% limited partner
interest and 100% of the general partner interest in Atlas Pipeline
Holdings, L.P. (NYSE:AHD) ("Atlas Holdings"), a publicly-traded
partnership and general partner of Atlas Pipeline, a publicly-traded
partnership. The Company's financial results are presented on a
consolidated basis with those of Atlas Energy, Atlas Holdings, and
Atlas Pipeline. Non-controlling minority interests in Atlas Energy,
Atlas Pipeline Holdings, and Atlas Pipeline are reflected as an
expense in our consolidated statements of income and as a liability on
our consolidated balance sheet.

Please see the respective earnings releases for Atlas Energy,
Atlas Holdings and Atlas Pipeline for more information with regard to
their first quarter 2008 financial results.

Cash Distributions from Affiliates

-- Atlas Energy declared a record quarterly cash distribution of
$0.59 per common unit for the first quarter 2008 with a
distribution coverage ratio of approximately 1.4x. This
distribution represents a $0.16 increase, or 37%, from the
first quarter 2007's quarterly distribution, and a $0.02
increase, or 4%, from the fourth quarter 2007's quarterly
distribution. This quarter's distribution will be paid on May
15, 2008 to unitholders of record on May 7, 2008. The Company
has earned approximately $19.6 million of cash distributions
from its ownership interest in Atlas Energy for the first
quarter 2008, including $1.2 million of management incentive
interests ("MIIs"). The MIIs will be paid to the Company upon
ATN meeting certain tests under its limited liability company
agreement. The Company will receive cash distributions of
approximately $18.4 million from its ATN Common and Class A
units for the first quarter 2008.

-- Atlas Holdings declared a record quarterly cash distribution
for the first quarter 2008 of $0.43 per common limited partner
unit, which will be paid on May 20, 2008 to common unitholders
of record as of May 7, 2008. This distribution represents an
$0.18 increase, or 72%, from the first quarter 2007's
quarterly distribution, and a $0.09 increase, or 26%, from the
fourth quarter 2007's quarterly distribution. The Company will
receive approximately $7.5 million in cash distributions from
its ownership interest in Atlas Holdings for the first quarter
2008.

Atlas Energy Results

-- Atlas Energy continued to expand its acreage position and
development activities in the Marcellus Shale:

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-- Atlas Energy has drilled 52 vertical and one horizontal
Marcellus Shale wells to date and is currently producing 34
vertical wells and one horizontal well into a pipeline (18
wells are waiting on completion);
-- Atlas Energy currently controls approximately 516,000 Marcellus
acres in Pennsylvania, New York and West Virginia, of which
approximately 242,000 of these acres are located in the
Company's core Marcellus Shale position in southwestern
Pennsylvania;
-- Atlas Energy continues to realize average peak production rates
(24 hours into a pipeline) of over one million cubic feet
("Mmcf") per day, with its best wells having initial peak rates
of over 2 Mmcf per day.
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-- Atlas Energy drilled 250 gross wells in Appalachia in the
first quarter 2008, including 30 wells drilled into the
Marcellus Shale. Atlas Energy also drilled 46 gross wells
during the first quarter 2008 in Michigan. Atlas Energy's
Michigan Antrim Shale assets were acquired in June 2007.

-- At March 31, 2008, Atlas Energy held approximately 827,000 net
acres in the Appalachian Basin, of which 571,000 were
undeveloped, an increase of 28% from the net acreage position
at March 31, 2007 and a 10% increase from December 31, 2007.
At March 31, 2008, Atlas Energy had approximately 275,000 net
acres in the Antrim Shale in Michigan, of which approximately
43,000 were undeveloped.

-- Atlas Energy has identified approximately 3,700 geologically
favorable shallow drilling locations on its acreage in the
Appalachian Basin, which does not include any locations
prospective for the Marcellus Shale. In addition, Atlas Energy
has identified approximately 756 drilling locations in
Michigan.

-- Atlas Energy had interests in approximately 11,000 gross wells
March 31, 2008, of which Atlas Energy operates approximately
83%.

-- Natural gas and oil production was 91.8 million cubic feet
equivalents ("Mmcfe") per day for first quarter 2008, compared
to 25.8 Mmcfe per day from the first quarter 2007. The
increase is due primarily to the acquisition of the Antrim
Shale production in Michigan, and a 28% increase in Appalachia
production.

-- Partnership management fees were $20.4 million in the first
quarter 2008, an increase of approximately 18% compared to the
prior year first quarter and approximately 30% higher than the
fourth quarter 2007.

Atlas Pipeline Results

-- Average natural gas gathered volume for the first quarter 2008
was 1,227.7 million cubic feet per day ("MMcfd") for Atlas
Pipeline, an increase of 76% from natural gas gathered volume
for the prior year comparable quarter. The increase was
principally due to Atlas Pipeline's acquisition of the Chaney
Dell and Midkiff/Benedum gathering systems during July 2007 as
well as higher throughput from its NOARK, Appalachia, Elk
City/Sweetwater and Velma systems.

-- Atlas Pipeline connected 374 new wells to its natural gas
gathering systems during the first quarter 2008, an increase
of 137% from 158 new well connections for the prior year
comparable period. For the twelve month period ending March
31, 2008, Atlas Pipeline connected 1,631 wells to its
gathering systems.

-- Atlas Pipeline's processed natural gas volume for the first
quarter 2008 was 680.8 MMcfd, an increase of 156% from
processed natural gas volume for the prior year comparable
quarter. Also, Atlas Pipeline's gross natural gas liquids
("NGLs") volume for the first quarter 2008 was 50,115 barrels
per day ("bpd"), an increase of 239% from gross NGL volume for
the prior year comparable quarter. These increases were
principally due to Atlas Pipeline's acquisition of the Chaney
Dell and Midkiff/Benedum processing plants in July 2007 as
well as an increase in the utilization of the Sweetwater
processing plant.

-- Atlas Pipeline's gross condensate volume for the first quarter
2008 was 2,044 bpd, an increase of 292% from condensate volume
for the prior year comparable quarter.

Corporate and Other

-- General and administrative expense was $21.3 million for the
first quarter 2008, an increase of $6.5 million from the prior
year first quarter, primarily due to higher costs in managing
operations, including expenses related to the newly acquired
assets by Atlas Energy and Atlas Pipeline during June and July
2007, respectively.

-- Interest expense was $34.1 million for the first quarter 2008,
an increase of $26.8 million from the prior year comparable
period, primarily due to the financing of the assets acquired
by Atlas Energy and Atlas Pipeline in 2007.

At March 31, 2008, the Company had $2.1 billion of total
consolidated debt, all of which is held at its operating subsidiaries,
including $1.3 billion at Atlas Pipeline and $0.8 billion at Atlas
Energy.

Interested parties are invited to access the live webcast of an
investor call with management regarding Atlas America's first quarter
2008 results on Thursday morning, May 8, 2008 at 9:00 am ET by going
to the Investor Relations section of Atlas America's website at
www.atlasamerica.com. An audio replay of the conference call will also
be available beginning at 11:00 am ET on Thursday, May 8, 2008. To
access the replay, dial 1-888-286-8010 and enter conference code
62448546.

Atlas America, Inc. owns an approximate 64% limited partner
interest and 100% of the general partner interest in Atlas Pipeline
Holdings, L.P. (NYSE:AHD), which holds the general partner interest
and approximately 5.5 million limited partner units of Atlas Pipeline
Partners, L.P. (NYSE:APL), and an approximate 49% common unit interest
and all of the Class A and management incentive interests in Atlas
Energy Resources, LLC. For more information, please visit our website
at www.atlasamerica.com, or contact Investor Relations at
bbegley@atlasamerica.com.

Atlas Energy Resources, LLC develops and produces domestic natural
gas and to a lesser extent, oil. Atlas Energy is one of the largest
independent energy producers in the Appalachian Basin and northern
Michigan. The Company sponsors and manages tax-advantaged investment
partnerships, in which it co-invests, to finance the exploration and
development of the Company's acreage in the Appalachian Basin. Atlas
Energy is active principally in Pennsylvania, Michigan and Tennessee.
For more information, visit Atlas Energy's website at
www.atlasenergyresources.com or contact investor relations at
bbegley@atlasamerica.com.

Atlas Pipeline Holdings, L.P. (NYSE:AHD) is a limited partnership
which owns and operates the general partner of Atlas Pipeline
Partners, L.P., through which it owns a 2% general partner interest,
all the incentive distribution rights and approximately 5.5 million
common units of Atlas Pipeline Partners.

Atlas Pipeline Partners, L.P. (NYSE:APL) is active in the
transmission, gathering and processing segments of the midstream
natural gas industry. In the Mid-Continent region of Oklahoma,
Arkansas, northern and western Texas and the Texas panhandle, the
Partnership owns and operates eight gas processing plants and a
treating facility, as well as approximately 7,900 miles of active
intrastate gas gathering pipeline and a 565-mile interstate natural
gas pipeline. In Appalachia, it owns and operates approximately 1,600
miles of natural gas gathering pipelines in western Pennsylvania,
western New York and eastern Ohio. For more information, visit Atlas
Pipeline's website at www.atlaspipelinepartners.com or contact
bbegley@atlaspipelinepartners.com.

Certain matters discussed within this press release are
forward-looking statements. Although Atlas America, Inc. believes the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations
will be attained. Factors that could cause actual results to differ
materially from expectations include financial performance, regulatory
changes, changes in local or national economic conditions and other
risks detailed from time to time in Atlas America's reports filed with
the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K
and annual reports on Form 10-K.

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ATLAS AMERICA, INC.
Financial Summary
(in thousands, except per share data)

Three Months Ended
March 31,
-------------------
2008 2007
--------- ---------
REVENUES
Well construction and completion $104,138 $ 72,378
Gas and oil production 76,226 21,260
Transmission, gathering and processing 385,326 115,290
Administration and oversight 5,017 4,544
Well services 4,798 3,721
Loss on mark-to-market derivatives (88,781) (2,278)
--------- ---------
Total revenues 486,724 214,915
--------- ---------

COSTS AND EXPENSES
Well construction and completion 90,555 62,932
Gas and oil production 10,668 2,034
Transmission, gathering and processing 295,532 95,475
Well services 2,412 2,043
General and administrative 21,258 14,765
Depreciation, depletion and amortization 47,633 12,401
--------- ---------
Total costs and expenses 468,058 189,650
--------- ---------

OPERATING INCOME 18,666 25,265

OTHER INCOME (EXPENSE)
Interest expense (34,098) (7,256)
Minority interests 23,665 (3,186)
Other, net 2,030 1,444
--------- ---------
Total other income (expense) (8,403) (8,998)
--------- ---------

Income before income taxes 10,263 16,267
Provision for income taxes (3,841) (6,019)
--------- ---------
Net income $ 6,422 $ 10,248
========= =========

Net income per common share - basic $ 0.24 $ 0.36
========= =========
Weighted average common shares outstanding - basic 26,882 28,386
========= =========

Net income per common share - diluted $ 0.23 $ 0.35
========= =========
Weighted average common shares outstanding -
diluted 28,054 29,217
========= =========

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March 31, December 31,
2008 2007
---------- ------------
Balance Sheet Data (at period end):
----------------------------------------------
Cash and cash equivalents $ 116,386 $ 145,535
Property and equipment, net 3,544,974 3,442,036
Total assets 4,998,671 4,906,529
Total debt 2,143,413 1,994,456
Total stockholders' equity 388,879 413,163

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ATLAS AMERICA, INC.
Financial Information
(in thousands, except per share data)

Three Months Ended
March 31,
------------------
2008 2007
--------- --------
Reconciliation of net income to adjusted net
income(1):
Net income $ 6,422 $10,248
Adjustments to reflect cash impact of
derivatives 81,884 2,277
Non-cash stock compensation expense 192 4,036
Adjustment to minority interests for the above
items (71,899) (3,891)
Tax effect of the above items (3,809) (896)
--------- --------
Adjusted net income $ 12,790 $11,774
========= ========

Adjusted net income per common share:
Basic $ 0.48 $ 0.41
========= ========
Diluted $ 0.46 $ 0.40
========= ========

Weighted average common shares outstanding:
Basic 26,882 28,386
========= ========
Diluted 28,054 29,217
========= ========

Reconciliation of net income to non-GAAP
measures(1):
Net income $ 6,422 $10,248
Interest expense 34,098 7,256
Provision for income taxes 3,841 6,019
Depreciation, depletion and amortization 47,633 12,401
--------- --------
EBITDA 91,994 35,924
Adjustments to reflect cash impact of derivatives 81,884 2,277
Non-cash compensation expense 192 4,036
--------- --------

Adjusted EBITDA $174,070 $42,237
========= ========

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(1) Adjusted net income, EBITDA and Adjusted EBITDA are non-GAAP
financial measures under the rules of the Securities and Exchange
Commission. Management of the Company believes that EBITDA and
Adjusted EBITDA provide additional information with respect to
the Company's ability to meet its debt service, capital expense
and working capital requirements. EBITDA and Adjusted EBITDA are
measures commonly used by commercial banks, investment bankers,
rating agencies and investors in evaluating an entity's
performance relative to its peers. Adjusted net income, EBITDA
and Adjusted EBITDA are not measures of financial performance
under GAAP and, accordingly, should not be considered as a
substitute for net income or cash flows from operating activities
prepared in accordance with GAAP.
*T

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ATLAS AMERICA, INC.
Operating Highlights

Three Months Ended
March 31,
---------------------
ATLAS ENERGY: 2008 2007
------------------------------------------------ ----------- ---------
Production revenues (in thousands):
Gas(1) $ 72,874 $ 19,427
Oil 3,351 1,826

Production volume(1)(2)(3)(4):
Gas (mcfd) 89,342 23,681
Oil (bpd) 405 359
----------- ---------
Total (mcfed) 91,772 25,835
=========== =========

Average sales prices(3)(5):
Gas (per mcf)(6) $ 9.58 $ 9.12
Oil (per bbl) $ 91.03 $ 56.52

Production costs(7):
As a percent of production revenues 12% 10%
Per Mcfe(3) $ 1.11 $ 0.87

Depletion per Mcfe(3) $ 2.52 $ 2.31

ATLAS PIPELINE:
------------------------------------------------
Appalachia system throughput volume (mcfd)(3) 75,632 62,532

Velma system gathered gas volume (mcfd)(3) 62,400 61,017

Elk City/Sweetwater system gathered gas volume
(mcfd)(3) 305,377 287,892

Chaney Dell system gathered gas volume
(mcfd)(3)(8) 251,487 --

Midkiff/Benedum system gathered gas volume
(mcfd)(3)(8) 142,542 --

NOARK Ozark Gas Transmission throughput volume
(mcfd)(3) 390,293 286,891
----------- ---------

Combined throughput volume (mcfd)(3) 1,227,731 698,332
=========== =========

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(1) Excludes sales of residual gas and sales to landowners.

(2) Production quantities consist of the sum of (i) Atlas Energy's
proportionate share of production from wells in which it has a
direct interest, based on its proportionate net revenue interest
in such wells, and (ii) Atlas Energy's proportionate share of
production from wells owned by the investment partnerships in
which Atlas Energy has an interest, based on Atlas Energy's
equity interest in each such partnership and based on each
partnership's proportionate net revenue interest in these wells.

(3) "Mcf" and "mcfd" represents thousand cubic feet and thousand cubic
feet per day; "mcfe" and "mcfed" represents thousand cubic feet
equivalent and thousand cubic feet equivalent per day, and "bbl"
and "bpd" represents barrels and barrels per day. Barrels are
converted to mcfe using the ratio of six mcf's to one barrel.

(4) Atlas Energy acquired AGO on June 29, 2007, and production volume
from these assets have only been included from that date.

(5) Atlas Energy's average sales price before the effects of financial
hedging was $8.32 and $7.85 for the three months ended March 31,
2008 and 2007, respectively.

(6) Includes $5.0 million of derivative proceeds which were not
included as revenue in the first quarter 2008. No such derivative
proceeds were received during the first quarter 2007.

(7) Production costs include labor to operate the wells and related
equipment, repairs and maintenance, materials and supplies,
property taxes, severance taxes, insurance and production
overhead.

(8) Atlas Pipeline acquired the Chaney Dell and Midkiff/Benedum
systems on July 27, 2007, and production volume from these
systems have only been included from that date.
*T

Atlas America, Inc.
Brian J. Begley, 215-546-5005
Vice President, Investor Relations
Fax: 215-553-8455

Copyright Business Wire 2008