Atlas Energy, L.P. (NYSE:ATLS)

Atlas Pipeline Holdings (AHD) is the parent company of Atlas Pipeline Partners, which is active in the transmission, gathering and compressing segments of the midstream natural gas industry. The company operates in the mid-continent and Appalachian regions. The primary objective AHD is to increase cash distributions to its unit holders through the growth at Atlas Pipeline Partners.

Atlas Pipeline Partners owns and operates approximately 1,600 miles of natural gas gathering pipelines in the Appalachian basin. This area could prove to be a gold mine considering the fact that it has proven natural gas reserves in the range of 79 to 95 trillion cubic feet, which remains greatly unexplored. This future for the company holds good, as its major customer is Atlas Energy, which is one of the active players in the Appalachian basin. Also, prospects for compression activities are fine considering the aging oil natural gas fields and the rising usage of unconventional sources to produce natural gas.

Atlas Pipeline’s Mid-continent operations that currently contribute over 93% to the revenues grew by over 25% driven by acquisition of NOARK pipeline system and the Elk City system. Looking ahead, the company is aiming to build up their asset base in the Mid-continent region and ramp up its Sweetener processing facility. Also management is on the verge of expanding its gas gathering system in Oklahoma and Texas to drive future growth. Moreover, plans are underway to increase the compression facilities on their NOARK system, which would increase its throughput capacity by over 80%. Considering these factors, the stock does seem to be an attractive investment proposition in the near future.