Atlas Energy’s E&P subsidiary, Atlas Resource Partners, L.P. (NYSE: ARP), recently closed two acquisitions in the Barnett Shale (TX), which added a total of approximately 527 Bcfe of net proved reserves, bringing ARP’s total pro forma net proved reserves to approximately 700 Bcfe, or an increase of almost four times the amount of ARP’s initial net proved reserves in March 2012. ARP reached record average net production of 62.5 Mmcfe/d for the second quarter 2012, a 57% increase from the sequential quarter and a 71% increase from the prior year quarter. Following the second quarter 2012, pro forma average net daily production reached a peak rate of approximately 102 Mmcfe/d, due to the closing of the Titan transaction in the Barnett Shale.

Atlas Pipeline Partners, L.P. (NYSE: APL), Atlas Energy’s midstream subsidiary, announced record processing volumes at each of its systems of 681 Mmcf/d and natural gas liquids (NGL) production of 61,350 bpd for the second quarter 2012.

ATLS declared a cash distribution of $0.25 per limited partner unit for the second quarter 2012. The second quarter 2012 distribution represents a $0.03 per unit increase, or 14%, over the prior year comparable quarter.

On June 28, 2012, ARP declared a quarterly cash distribution for the second quarter 2012 of $0.40 per unit, which is payable August 14, 2012 to holders of record as of July 12, 2012. ATLS earned approximately $8.6 million of cash distributions based upon ARP’s recently announced second quarter 2012 distribution.

On July 17, 2012, APL declared a distribution for the second quarter of 2012 of $0.56 per common limited partner unit to holders of record on August 7, 2012, which will be paid on August 14, 2012. ATLS earned approximately $5.4 million of cash distributions based upon APL’s recently announced second quarter 2012 distribution.

On a GAAP basis, net loss attributable to limited partners was $7.6 million for the second quarter 2012 compared to income of $16.5 million for the prior year comparable period. The loss for the second quarter 2012 is due primarily to transaction costs related to ARP’s recent Barnett Shale acquisition. The net income in the prior year quarter was primarily attributable to ATLS’ share of Lightfoot Capital Partners, GP LLC’s recognized gain on its sale of International Resource Partners. Please see the reconciliation of GAAP net income (loss) to Adjusted EBITDA and distributable cash flow in the financial tables of this release for further information.

Average net daily production for the second quarter 2012 was 62.5 million cubic feet equivalents per day (“Mmcfed”), an increase of approximately 23.1 Mmcfed, or 59%, compared with the first quarter 2012. The increase was primarily due to the Barnett Shale assets acquired in April 2012, as well as additional legacy Marcellus Shale wells connected in southwestern Pennsylvania during the quarter.

During the second quarter 2012, ARP began initial drilling on locations in the oil & natural gas liquids (NGL) rich Mississippi Lime basin in northwestern Oklahoma. ARP is currently the operating partner in a 50/50 joint venture with Equal Energy, Ltd. (NYSE: EQU), in which the parties will develop locations in Alfalfa, Grant and Garfield Counties in Oklahoma.

During the second quarter 2012, APL operated near or at nameplate capacity on all of its gathering and processing systems in the Mid Continent. APL processed approximately 681 Mmcf/d of natural gas in the second quarter 2012 amongst its WestOK, WestTX and Velma systems, almost 8% higher than the first quarter 2012 and 27% higher than the prior year comparable quarter’s volumes. APL again attained record high volumes of approximately 61,350 bbl per day of gross natural gas liquids generated from APL’s three processing systems in Oklahoma and Texas.

Cash general and administrative expense, excluding amounts attributable to APL and ARP, was $2.1 million for the second quarter 2012, a $4.1 million decrease from the prior year comparable quarter. In February 2011, ATLS completed its acquisition of the exploration and production operations from Chevron Corp, which assumed the majority of Atlas Energy’s expenses in the prior year second quarter. Please refer to the consolidating combined statements of operations provided in the financial tables of this release.

Revenues:

Gas and oil production

Well construction and completion

Gathering and processing

Administration and oversight

Well services

Gain (loss) on mark-to-market derivatives⁽²⁾

Other, net

Total revenues

Costs and expenses:

Gas and oil production

Well construction and completion

Gathering and processing

Well services

General and administrative⁽¹⁾

Depreciation, depletion and amortization

Total costs and expenses

Operating income

Gain (loss) on asset sales and disposal

Interest expense⁽¹⁾

Loss on early extinguishment of debt

Income from continuing operations

Loss from discontinued operations

Net income

Income attributable to non-controlling interests

Net income (loss) after non-controlling interests

Income not attributable to common limited partners (results of operations of the Transferred Business as of and prior to February 17, 2011, the date of acquisition)⁽¹⁾

Net income (loss) attributable to common limited partners

Net income (loss) attributable to common limited partners per unit – basic:

Income (loss) from continuing operations attributable to common limited partners

Loss from discontinued operations attributable to common limited partners

Net income (loss) attributable to common limited partners

Net income (loss) attributable to common limited partners per unit – diluted:

Income (loss) from continuing operations attributable to common limited partners

Loss from discontinued operations attributable to common limited partners

Net income (loss) attributable to common limited partners

Weighted average common limited partner units outstanding:

Basic

Diluted

Net income (loss) attributable to common limited partners:

Income (loss) from continuing operations

Loss from discontinued operations

Net income (loss) attributable to common limited partners

In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the exploration and production business acquired from Chevron Corp (the “Transferred Business”) for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods.

Consists principally of hydrocarbon derivative gains / (losses) that relate to the operating activities of ATLS’s consolidated subsidiary, APL. The underlying hydrocarbon derivatives do not represent present or potential future obligations of ATLS.

Current assets:

Cash and cash equivalents

Accounts receivable

Current portion of derivative asset

Prepaid expenses and other

Total current assets

Property, plant and equipment, net

Intangible assets, net

Investment in joint venture

Goodwill, net

Long-term derivative asset

Other assets, net

Current liabilities:

Current portion of long-term debt

Accounts payable

Liabilities associated with drilling contracts

Accrued producer liabilities

Current portion of derivative payable to Drilling Partnerships

Accrued interest

Accrued well drilling and completion costs

Accrued liabilities

Total current liabilities

Long-term debt, less current portion

Long-term derivative payable to Drilling Partnerships

Asset retirement obligation and other

Commitments and contingencies

Partners’ Capital:

Common limited partners’ interests

Accumulated other comprehensive income

Non-controlling interests

Total partners’ capital

Net income (loss) attributable to common limited partners per unit - basic

Distributable cash flow per unit⁽²⁾⁽³⁾

Cash distributions paid per unit⁽⁴⁾

ATLAS RESOURCE:

Production volume:⁽⁵⁾⁽⁶⁾

Natural gas (Mcfd)

Oil (Bpd)

Natural gas liquids (Bpd)

Total (Mcfed)

Average sales prices:⁽⁶⁾

Natural gas (per Mcf) ⁽⁷⁾

Oil (per Bbl)⁽⁸⁾

Natural gas liquids (per gallon)

Production costs:⁽⁶⁾⁽⁹⁾

Lease operating expenses per Mcfe⁽¹⁰⁾

Production taxes per Mcfe

Total production costs per Mcfe⁽¹⁰⁾

ATLAS PIPELINE:

Production volume:⁽⁶⁾

Gathered gas volume(Mcfd)

Processed gas volume (Mcfd)

Residue gas volume (Mcfd)

Processed NGL volume (Bpd)

Condensate volume (Bpd)

Average sales prices:⁽⁶⁾

Natural gas (per Mcf)

Condensate (per Bbl)

Natural gas liquids (per gallon)

In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods.

A reconciliation from net income to distributable cash flow is provided in the financial tables of this release.

Calculation consists of distributable cash flow divided by the weighted average common limited partner units outstanding of 51,318,000 and 51,235,000 for the three months ended June 30, 2012 and 2011, respectively, and 51,306,000 for the six months ended June 30, 2012. For the six months ended June 30, 2011, the weighted average common limited partner units outstanding utilized for the calculation is the weighted average common limited partner units outstanding for the period subsequent to February 17, 2011, the date of acquisition for the Transferred Business, which includes the 23.4 million common limited partner units issued as partial consideration for the acquisition.

Represents the cash distributions declared per limited partner unit for the respective period and paid by ATLS within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. The six months ended June 30, 2011 includes a cash distribution payment of $0.11 per limited partner unit for the 1^st quarter 2011, which reflected a prorated cash distribution for the period from February 17, 2011, the date of acquisition for the Transferred Business, to March 31, 2011.

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

“Mcf” and “Mcfd” represent thousand cubic feet and thousand cubic feet per day; “Mcfe” and “Mcfed” represent thousand cubic feet equivalents and thousand cubic feet equivalents per day, and “Bbl” and “Bpd” represent barrels and barrels per day. Barrels are converted to Mcfe using the ratio of six Mcf’s to one barrel.

ARP’s average sales price for natural gas before the effects of financial hedging was $2.03 per Mcf and $5.05 per Mcf for the three months ended June 30, 2012 and 2011, respectively, and $2.76 per Mcf and $4.64 per Mcf for the six months ended June 30, 2012 and 2011, respectively. These amounts exclude the impact of subordination of production revenues to investor partners within the investor partnerships. Including the effects of subordination, average natural gas sales prices were $2.87 per Mcf ($1.40 per Mcf before the effects of financial hedging) and $4.31 per Mcf ($4.20 per Mcf before the effects of financial hedging) for the three months ended June 30, 2012 and 2011, respectively, and $3.29 per Mcf ($2.24 per Mcf before the effects of financial hedging) and $4.49 per Mcf ($3.82 per Mcf before the effects of financial hedging) for the six months ended June 30, 2012 and 2011, respectively.

ARP’s average sales price for oil before the effects of financial hedging was $94.39 per barrel and $99.70 per barrel for the three months ended June 30, 2012 and 2011, respectively, and $97.60 per barrel and $92.25 per barrel for the six months ended June 30, 2012 and 2011, respectively.

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. These amounts exclude the effects of ARP’s proportionate share of lease operating expenses associated with subordination of production revenue to investor partners within ARP’s investor partnerships. Including the effects of these costs, lease operating expenses per Mcfe were $0.38 per Mcfe ($0.49 per Mcfe for total production costs) and $0.71 per Mcfe ($0.80 per Mcfe for total production costs) for the three months ended June 30, 2012 and 2011, respectively, and $0.56 per Mcfe ($0.67 per Mcfe for total production costs) and $0.70 per Mcfe ($0.80 per Mcfe for total production costs) for the six months ended June 30, 2012 and 2011, respectively.

The amount for the six months ended June 30, 2011 was adjusted to reflect current period classification resulting from the misclassification of lease operating production expenses and transportation production expenses.

Adjusted EBITDA and Distributable Cash Flow Summary:

Atlas Resource Cash Distributions Earned⁽²⁾:

Limited Partner Units

Class A Units (2%)

Incentive Distribution Rights

Total Atlas Resource Cash Distributions Earned⁽²⁾

per limited partner unit

Atlas Pipeline Cash Distributions Earned⁽²⁾:

Limited Partner Units

General Partner 2% Interest

Incentive Distribution Rights

Total Atlas Pipeline Cash Distributions Earned⁽²⁾

per limited partner unit

Total Cash Distributions Earned

E&P Operations Adjusted EBITDA prior to spinoff on March 5, 2012⁽³⁾

Cash general and administrative expenses⁽⁴⁾

Other, net

Adjusted EBITDA⁽⁵⁾

Cash interest expense⁽⁶⁾

Maintenance capital expenditures⁽³⁾

Distributable Cash Flow⁽⁵⁾

Distributions Paid⁽⁷⁾

per limited partner unit

Distribution coverage ratio

Reconciliation of non-GAAP measures to net income (loss)⁽⁵⁾:

Distributable cash flow

Distributable cash flow of Transferred Business as of and prior to February 17, 2011 (the date of acquisition)⁽¹⁾

E&P Operations EBITDA prior to spinoff on March 5, 2012⁽³⁾

E&P Operations EBITDA of Transferred Business as of and prior to February 17, 2011⁽¹⁾

Atlas Resource net loss attributable to ATLS common limited partners

Atlas Resource cash distributions earned by ATLS⁽²⁾

Atlas Pipeline net income attributable to ATLS common limited partners

Atlas Pipeline cash distributions earned by ATLS⁽²⁾

Non-recurring spinoff and acquisition costs

Amortization of deferred finance costs

Non-cash stock compensation expense

Maintenance capital expenditures⁽³⁾

Other non-cash adjustments

Income attributable to non-controlling interests

Net income

In accordance with prevailing accounting literature, ATLS has adjusted its historical financial statements to present them combined with the historical financial results of the Transferred Business for all periods prior to its acquisition date of February 17, 2011. However, since the results of operations of the Transferred Business prior to its acquisition date are not attributable to the common limited partners of ATLS, these amounts have been deducted to obtain net income (loss) attributable to common limited partners for the respective period. Also, the historical results of the Transferred Business prior to the acquisition date do not reflect general and administrative expenses and interest expense as ATLS was unable to identify and allocate such amounts to the Transferred Business for the respective periods.

Represents the cash distribution paid by ARP and APL within 45 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter.

Represents the E&P Operations Adjusted EBITDA generated and maintenance capital expenditures incurred by ATLS on a stand-alone basis prior to the transfer of its E&P assets to ARP on March 5, 2012.

Excludes non-cash stock-compensation expense, non-recurring spinoff costs and non-recurring acquisition costs incurred, including amounts in connection with the acquisition of the Transferred Business.

Adjusted EBITDA and distributable cash flow are non-GAAP (generally accepted accounting principles) financial measures under the rules of the Securities and Exchange Commission. Management of ATLS believes that adjusted EBITDA and distributable cash flow provide additional information for evaluating ATLS’s performance, among other things. These measures are widely used by commercial banks, investment bankers, rating agencies and investors in evaluating performance relative to peers and pre-set performance standards. Adjusted EBITDA is also a financial measurement that, with certain negotiated adjustments, was utilized within ATLS’s financial covenants under its previously existing credit facility. Adjusted EBITDA and distributable cash flow are not measures of financial performance under GAAP and, accordingly, should not be considered as a substitute for net income, operating income, or cash flows from operating activities in accordance with GAAP.

Excludes non-cash amortization of deferred financing costs.

Represents the cash distribution paid within 50 days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter.

Total debt

Less: Cash

Total net debt /(cash)

Partners’ capital

Total capitalization

Ratio of net debt to capitalization

Net of eliminated amounts.

Total debt

Less: Cash

Total net debt /(cash)

Partners’ capital

Total capitalization

Ratio of net debt to capitalization

Net of eliminated amounts.

Revenues:

Gas and oil production

Well construction and completion

Gathering and processing

Administration and oversight

Well services

Gain on mark-to-market derivatives

Other, net

Total revenues

Costs and expenses:

Gas and oil production