8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 27, 2007

Commission file number 1-32169

ATLAS AMERICA, INC.

(Exact name of registrant as specified in its charter)

Delaware	51-0404430
(State of incorporation or organization)	(I.R.S. Employer Identification No.)

Westpointe Corporate Center, 1550 Coraopolis Heights Rd, 2^nd Fl, Moon Township, PA 15108

(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (412-262-2830)

(Former name or former address, if changed since last report)

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (127 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (27 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (27 CFR 240.13e-4(c))

Item 9.01Financial Statements and Exhibits

(a) Financial Statements of Business Acquired

On June 29, 2007, Atlas Energy Resources, LLC (“Atlas Energy”) completed the acquisition of DTE Gas & Oil Company (“DTE”) from DTE Energy Company and MCN Energy Enterprises. Atlas Energy Management, Inc. (“AEM”) is the managing member of Atlas Energy and owns 1,238,986 Class A units, or a 2% interest, through which it manages and effectively controls Atlas Energy. AEM is a wholly-owned subsidiary of Atlas America, Inc. (the “Company”). The following financial statements are attached hereto as Exhibits 5.2 and 5.3:

DTE Gas & Oil Company

· Audited balance sheets as of December 31, 2006 and 2005, the related statements of operations, comprehensive income, equity and cash flows for the years ended December 31, 2006, 2005 and 2004.

· Unaudited balance sheet as of March 31, 2007, related statements of operations, comprehensive income, and cash flows for the three months ended March 31, 2007 and 2006, and statement of equity for the three months ended March 31, 2007.

On July 27, 2007, Atlas Pipeline Partners, L.P. (“Atlas Pipeline”) completed the acquisition of control of the Chaney Dell natural gas gathering system and processing plants and a 72.8% undivided joint venture ownership interest in the MidKiff/Benedum natural gas gathering system and processing plants (the “Assets”) from subsidiaries of Anadarko Petroleum Corporation (collectively, “Anadarko”). Atlas Pipeline Holdings, L.P. (“Atlas Pipeline Holdings”) is the parent of Atlas Pipeline Partners GP, LLC, Atlas Pipeline’s general partner and owner of a 2.0% general partner interest, all of the incentive distribution rights, and approximately 5.5 million common units in Atlas Pipeline (combined with units held directly by Atlas Pipeline Holdings). Atlas America, Inc. (the “Company”) is the owner of Atlas Pipeline Holdings general partner and has a 64% ownership interest in Atlas Pipeline Holdings. The following financial statements are attached hereto as Exhibit 5.5, 5.6, 5.7 and 5.8:

Anadarko Chaney Dell System

· Combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses as of December 31, 2006 and for the years ended December 31, 2006, 2005 and 2004, and the related notes, together with independent auditors’ report thereon.

· Unaudited combined statements of revenues and direct operating expenses for the six months ended June 30, 2007 and 2006.

Anadarko Midkiff/Benedum System

· Combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses as of December 31, 2006 and for the years ended December 31, 2006, 2005 and 2004, and the related notes, together with independent auditors’ report thereon.

· Unaudited statements of revenues and direct operating expenses for the six months ended June 30, 2007 and 2006.

(b) Pro Forma Financial Information

The unaudited pro forma consolidated balance sheet of the Company as of June 30, 2007, and the related pro forma consolidated statements of income for the six months ended June 30, 2007 and the year ended December 31, 2006 and the related notes are attached to this report as Exhibit 5.9.

(c) Exhibits

5.1 Consent of Grant Thornton LLP.

5.2 Audited statements of DTE Gas & Oil Company for the years ended December 31, 2006, 2005, and 2004.

5.3 Unaudited Financial Statements of DTE Gas & Oil Company for the three months ended March 31, 2007 and 2006.

5.4 Consent of KPMG LLP

5.5 Anadarko Chaney Dell System combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses as of December 31, 2006 and for the years ended December 31, 2006, 2005 and 2004, and the related notes, together with independent auditors’ report thereon.

5.6 Anadarko Chaney Dell System combined statements of revenues and direct operating expenses for the six months ended June 30, 2007 and 2006.

5.7 Anadarko Midkiff/Benedum System combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses as of December 31, 2006 and for the years ended December 31, 2006, 2005 and 2004, and the related notes, together with the independent auditors’ report thereon.

5.8 Anadarko Midkiff/Benedum System combined statements of revenues and direct operating expenses for the six months ended June 30, 2007 and 2006.

5.9 Unaudited pro forma consolidated financial statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Atlas America, Inc.
November 8, 2007	By:	/s/ Matthew A. Jones
		Matthew A. Jones
		Chief Financial Officer

EX-5.1

Exhibit 5.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-126343) of Atlas America, Inc. of our report dated September 11, 2007 relating to the financial statements of DTE Gas and Oil Company, which appears in this Current Report on Form 8-K of Atlas America, Inc.

/s/ Grant Thornton LLP

Oklahoma City, Oklahoma

November 8, 2007

EX-5.2

Exhibit 5.2

DTE Gas & Oil Company

Financial Statements

Years ended December 31, 2006, 2005 and 2004

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

DTE Gas and Oil Company

We have audited the accompanying balance sheets of DTE Gas and Oil Company as of December 31, 2006 and 2005, and the related statements of operations, comprehensive income, equity, and cash flows for the three years ended December 31, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of DTE Gas and Oil Company as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the three years ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Oklahoma City, Oklahoma

September 11, 2007

DTE GAS AND OIL COMPANY

BALANCE SHEETS

	December 31,			December 31,
	2006			2005
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	―		$	―
Accounts receivable		5,172			8,230
Due from affiliates		29,715			44,963
Deferred tax asset		24,522			53,142
Other		266			277
Total current assets		59,675			106,612
Property and equipment, net		322,018			292,613
Derivative assets		157			―
Deferred tax asset		127,783			193,781
	$	509,633		$	593,006
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	17,408		$	34,429
Due to affiliates		1,801			1,249
Short-term borrowings from affiliate		145,877			174,077
Accrued liabilities		3,208			2,998
Derivative liabilities		65,039			147,295
Total current liabilities		233,333			360,048
Asset retirement obligations		13,050			11,285
Derivative liabilities		230,403			366,189
Other		7			9
Commitments and contingencies (Note 5)
Stockholder’s equity (deficit):
Common stock, $0.01 par value: 50,000 authorized shares		―			―
Additional paid-in capital		142,968			112,697
Accumulated deficit		(110,445	)		(257,222	)
Accumulated other comprehensive income		317			―
Total stockholder’s equity (deficit)		32,840			(144,525	)
	$	509,633		$	593,006

See accompanying notes to financial statements

DTE GAS AND OIL COMPANY

    STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2006			2005			2004
				(in thousands)
REVENUES
Gas and oil production	$	141,862		$	166,388		$	125,584
Derivative gain (loss)		149,172			(384,579	)		(118,197	)
Other		312			370			735
Total net revenues		291,346			(217,821	)		8,122
COSTS AND EXPENSES
Gas and oil production		19,851			18,793			18,138
Severance and other property taxes		8,473			10,042			7,363
General and administrative		3,826			2,951			3,070
Expense reimbursement - affiliate		3,050			—			2,953
Depreciation, depletion and amortization		19,566			18,411			18,801
Total operating expenses		54,766			50,197			50,325
Operating income (loss)		236,580			(268,018	)		(42,203	)
OTHER INCOME (EXPENSE)
Interest expense - affiliate		(10,096	)		(8,899	)		(10,244	)
Other - net		(674	)		―			―
Total other expense		(10,770	)		(8,899	)		(10,244	)
Net income (loss) before income taxes		225,810			(276,917	)		(52,447	)
(Provision) benefit for income taxes		(79,033	)		96,921			18,356
Net income (loss)	$	146,777		$	(179,996	)	$	(34,091	)

See accompanying notes to financial statements

DTE GAS AND OIL COMPANY

STATEMENTS OF COMPREHENSIVE INCOME

	Years Ended December 31,
	2006		2005			2004
	(in thousands)
Net income (loss)	$	146,777	$	(179,996	)	$	(34,091	)
Other comprehensive income:
Unrealized holding gains on hedging contracts, net of taxes of $171		317		—			—
		317		—			—
Comprehensive income (loss)	$	147,094	$	(179,996	)	$	(34,091	)

See accompanying notes to financial statements

DTE GAS AND OIL COMPANY

STATEMENTS OF EQUITY

(in thousands, except share data)

											Accumulated
					Additional						Other			Total
	Common stock				Paid-in			Accumulated			Comprehensive			Stockholder’s
	Shares		Amount		Capital			Deficit			Income			Equity (Deficit)
Balance, January 1, 2004		516.8	$	-	$	139,856		$	(43,135	)		$	-	$	96,721
Net loss		-		-		-			(34,091	)			-		(34,091	)
Balance, December 31, 2004		516.8		-		139,856			(77,226	)			-		62,630
Net change in affiliate advances		-		-		(27,159	)		-				-		(27,159	)
Net loss		-		-		-			(179,996	)			-		(179,996	)
Balance, December 31, 2005		516.8		-		112,697			(257,222	)			-		(144,525	)
Net income		-		-		−			146,777				-		146,777
Net change in affiliate advances		-		-		30,271			-				-		30,271
Other comprehensive income		-		-		-			-				317		317
Balance, December 31, 2006		516.8	$	-	$	142,968		$	(110,445	)		$	317	$	32,840

See accompanying notes to financial statements

DTE GAS AND OIL COMPANY

STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2006			2005			2004
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	146,777		$	(179,996	)	$	(34,091	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		19,566			18,411			18,801
Deferred income taxes		94,447			(96,920	)		23,337
Non-cash (gain) loss on derivative contracts		(217,711	)		285,030			62,654
Asset impairments		479			186			368
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		3,058			(1,376	)		1,408
Advances (to)/from affiliates		15,800			(16,420	)		(10,036	)
Increase (decrease) in accounts payable		(17,021	)		10,855			2,510
Increase (decrease) in other operating assets and liabilities		10			251			(167	)
Net cash provided by operating activities		45,405			20,021			64,784
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(47,476	)		(35,790	)		(21,893	)
Net cash used in investing activities		(47,476	)		(35,790	)		(21,893	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from (payments to) affiliate		2,071			15,769			(42,891	)
Net cash provided by (used in) financing activities		2,071			15,769			(42,891	)
Change in cash and cash equivalents		—			—			—
Cash and cash equivalents at beginning of period		―			―			―
Cash and cash equivalents at end of period	$	—		$	―		$	—

See accompanying notes to financial statements

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DTE Gas and Oil Company (“the Company”) is a company engaged primarily in the development and production of natural gas and, to a lesser extent, oil in northern Michigan. The Company is a wholly-owned subsidiary of MCN Energy Enterprises (“the Parent”), which is a wholly-owned subsidiary of DTE Energy Company (NYSE:DTE).

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and costs and expenses during the reporting period. Actual results could differ from these estimates.

Comprehensive Income

Comprehensive income includes net income and all other changes in the equity of a business during a period from transactions and other events and circumstances from non-owner sources. These changes, other than net income, are referred to as “other comprehensive income” and for the Company include only changes in the fair value of unrealized hedging gains and losses.

Business Segments

The Company’s operations are organized into one reportable business segment under Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosure about Segments of an Enterprise and Related Information”.

Income Taxes

The Company is included in the consolidated federal income tax return of its Parent. Income taxes are calculated as if the Company filed a return on a separate company basis. As part of the process of preparing financial statements, the Company is required to estimate income taxes in each of the jurisdictions in which it operates. Significant judgment is required in determining the income tax expense provision. The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company assesses the likelihood of its deferred tax assets being recovered from future taxable income. The Company then provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. The Company considers future taxable income and ongoing prudent and feasible tax planning strategies in assessing the valuation allowance. Any decrease or increase in the valuation allowance could have a material impact on net income in the period in which such determination is made. The deferred tax provision or benefit each year represents the net change during that year in the deferred tax asset and liability balances. Separate company state tax returns are filed in those states in which the Company is registered to do business.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivables and Allowance for Possible Losses

In evaluating its allowance for possible losses, the Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current creditworthiness, as determined by the Company’s review of its customer’s credit information. The Company extends credit on an unsecured basis to many of its customers. The Company sells substantially all its production to an affiliate at current market prices. At December 31, 2005 and 2006, the Company’s credit evaluation indicated that it had no need for an allowance for possible losses.

Property and Equipment

Property and equipment is stated at cost. Depreciation, depletion and amortization is based on cost less estimated salvage value primarily using the units-of-production or straight-line method over the assets estimated useful lives. Maintenance and repairs are expensed as incurred. Major renewals and improvements that extend the useful lives of property are capitalized. Other property and equipment are being depreciated over 3 to 20 years on a straight line basis.

Property and equipment consists of the following at the dates indicated (in thousands):

	December 31,
	2006			2005
Mineral interests:
Proved properties	$	36,253		$	31,901
Unproved properties		5,373			6,376
Wells and related equipment		374,434			329,826
Other		2,852			2,810
		418,912			370,913
Accumulated depreciation, depletion and amortization:
Oil and gas properties		(95,522	)		(77,098	)
Other		(1,372	)		(1,202	)
		(96,894	)		(78,300	)
	$	322,018		$	292,613

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Oil and Gas Properties

The Company follows the successful efforts method of accounting for oil and gas producing activities. Exploratory drilling costs are capitalized pending determination of whether a well is successful. Exploratory wells subsequently determined to be dry holes are charged to expense. Costs resulting in exploratory discoveries and all development costs, whether successful or not, are capitalized. Geological and geophysical costs and delay rentals are expensed. Oil is converted to gas equivalent basis (“Mcfe”) at the rate one barrel equals 6 thousand cubic feet (“Mcf”). Depletion is provided on the units-of-production method using estimated remaining reserve quantities. Unproved properties are reviewed annually for impairment or whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment charges are recorded if conditions indicate the Company will not explore the acreage prior to expiration of the applicable leases or if it is determined that the carrying value of the properties is above their fair value.

The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Long-lived assets are reviewed for potential impairments at the lowest levels for which there are identifiable cash flows that are largely independent of other groups of assets. The review is done by determining if the historical cost of proved properties less the applicable accumulated depreciation, depletion and amortization and abandonment is less than the estimated expected undiscounted future cash flows. The expected future cash flows are estimated based on the Company’s plans to continue to produce and develop proved reserves. Expected future cash flow from the sale of production of reserves is calculated based on estimated future prices. The Company estimates prices based upon market related information including published futures prices. The estimated future level of production is based on assumptions surrounding future levels of prices and costs, field decline rates, market demand and supply, and the economic and regulatory climates. If the carrying value exceeds such cash flows, an impairment loss is recognized for the difference between the estimated fair market value, (as determined by discounted future cash flows) and the carrying value of the assets.

Upon the sale or retirement of a complete field of a proved property, the cost is eliminated from the property accounts, and the resultant gain or loss is reclassified to income. Upon the sale of an individual well the proceeds are credited to accumulated depreciation and depletion. Upon the sale of an entire interest in an unproved property where the property had been assessed for impairment individually, a gain or loss is recognized in the statements of income. If a partial interest in an unproved property is sold, any funds received are accounted for as a reduction of the cost in the interest retained.

Capitalized Interest

The Company capitalizes interest on funds borrowed from its affiliate related to its costs associated with the drilling and completion of new wells and other capital projects. Interest is capitalized only during the periods in which these assets are brought to their intended use.

The weighted average interest rate used to capitalize interest was 6.75%, 6.75% and 6.0% for the years ended December 31, 2006, 2005 and 2004, respectively, which resulted in interest capitalized of $291, $212 and $92 for the respective periods.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Asset Retirement Obligations

The Company accounts for asset retirement obligations as required under SFAS No. 143, “Accounting for Retirement Asset Obligations” (“SFAS 143”) and FASB Interpretation No. 47 “Accounting for Conditional Asset Retirement Obligations” (“FIN 47”) which require that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred, with the associated asset retirement costs being capitalized as a part of the carrying amount of the long-lived asset. The Company has asset retirement obligations related to the plugging and abandonment of its oil and gas wells. SFAS 143 requires the Company to consider estimated salvage value in the calculation of depreciation, depletion and amortization.

Fair Value of Financial Instruments

The Company used the following assumptions in estimating the fair value of each class of financial instrument for which it is practicable to estimate fair value:

· For receivables and payables, the carrying amounts approximate fair value because of the short maturity of these instruments.

· For derivatives the carrying value approximates fair value because the Company marks to market all derivatives.

· For debt the carrying value approximates fair value because of the substantially short maturity of these instruments.

Derivative Instruments

The Company applies the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” and its various amendments (“SFAS 133”). SFAS 133 requires each derivative instrument to be recorded in the balance sheet as either an asset or liability measured at fair value. Changes in a derivative instrument’s fair value are recognized currently in earnings unless specific hedge accounting criteria are met. All activity reflected in the financial statements related to natural gas derivative contracts were transacted with DTE affiliate companies.

Environmental Matters

The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. The Company has established procedures for the ongoing evaluation of its operations, to identify potential environmental exposures and to comply with regulatory policies and procedures.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company accounts for environmental contingencies in accordance with Statement of Position 96-1 “Environmental Remediation Liabilities” and SFAS No. 5 “Accounting for Contingencies.” Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and do not contribute to current or future revenue generation, are expensed. Liabilities for environmental contingencies are recorded when environmental assessments and/or clean-ups are probable and the costs can be reasonably estimated. The Company maintains insurance which may cover in whole or in part certain types of environmental contingencies. For the years ended December 31, 2006, 2005 and 2004, the Company had no environmental contingencies requiring specific disclosure or the recording of a liability.

Revenue Recognition

The Company records the income from the working interests and overriding royalties of wells in which it owns an interest when the gas and oil are delivered.

Because there are timing differences between the delivery of natural gas and oil and the Company’s receipt of a delivery statement, the Company has unbilled revenues. These revenues are accrued based upon volumetric data from the Company’s records and applicable product prices. The Company had unbilled receivables at December 31, 2006 and 2005 of $32.0 million and $51.0 million, respectively, which are included in Accounts receivable and Accounts receivable-affiliate on its Balance Sheets.

Supplemental Cash Flow Information

	Years Ended December 31,
	2006		2005		2004
Cash paid for:
Interest, net of amounts capitalized	$	10,096	$	8,899	$	10,244
Income taxes	$	―	$	―	$	―

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Financial Accounting Standards

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits entities to choose to measure eligible financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The statement will be effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. The Statement offers various options in electing to apply the provisions of this Statement, and at this time the Company has not made any decision as to its application and is evaluating the impact of the adoption of SFAS 159 on the Company’s financial position and results of operations.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurement” (“SFAS 157”). SFAS 157 addresses the need for increased consistency in fair value measurements, defining fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a framework for measuring fair value and expands disclosure requirements. SFAS 157 is effective for the Company beginning January 1, 2008. The Company is currently evaluating the impact of the adoption of SFAS 157 on its financial position and results of operations.

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements,” or SAB 108. SAB 108 was issued to provide consistency in how registrants quantify financial statement misstatements. The Company initially applied SAB 108 in connection with the preparation of its financial statements for the year ended December 31, 2006. The application of SAB 108 did not have a material impact on the Company’s financial position or results of operations.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109, (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and provides guidance on the recognition, de-recognition and measurement of benefits related to an entity’s uncertain tax positions. FIN 48 is effective for the Company beginning January 1, 2007. The Company does not expect the adoption of FIN 48 to have a significant impact on its financial position or results of operations.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 3—ASSET RETIREMENT OBLIGATIONS

The Company follows SFAS No 143 “Accounting for Asset Retirement Obligations” (“SFAS 143”) and FASB Interpretation No. 47 “Accounting for Conditional Asset Retirement Obligations,” which require the Company to recognize an estimated liability for the plugging and abandonment of its oil and gas wells. Under SFAS 143, the Company must currently recognize a liability for future asset retirement obligations if a reasonable estimate of the fair value of that liability can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS 143 requires the Company to consider estimated salvage value in the calculation of depreciation, depletion and amortization.

The estimated liability is based on historical experience in plugging and abandoning wells, estimated remaining lives of those wells based on reserve estimates, external estimates as to the cost to plug and abandon the wells in the future, and federal and state regulatory requirements. The liability is discounted using an assumed credit-adjusted risk-free interest rate. Revisions to the liability could occur due to changes in estimates of plugging and abandonment costs or remaining lives of the wells, or if federal or state regulators enact new plugging and abandonment requirements.

The Company has no assets legally restricted for purposes of settling asset retirement obligations. Except for the item previously referenced, the Company has determined that there are no other material retirement obligations associated with tangible long-lived assets.

A reconciliation of the Company’s liability for well plugging and abandonment costs for the periods indicated is as follows (in thousands):

	Years Ended December 31,
	2006		2005		2004
Asset retirement obligations, beginning of period	$	11,285	$	10,090	$	9,209
Liabilities incurred		564		514		323
Liabilities settled		—		—		(60	)
Revision in estimates		439		—		─
Accretion expense		762		681		618
Asset retirement obligations, end of period	$	13,050	$	11,285	$	10,090

The above accretion expense is included in depreciation, depletion and amortization in the Company’s Statements of Operations.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 4—DERIVATIVE INSTRUMENTS

From time to time, the Company’s Parent enters into natural gas derivative financial instruments, primarily swaps, to hedge the Company’s exposure to changes in natural gas prices. The Company is also subject to physical fixed price contracts with affiliates of DTE which qualify as derivative instruments.

The Company’s Parent did not historically designate all derivative contracts with or on behalf of the Company as cash flow hedges, which involves formally documenting all relationships between hedging instruments and the items being hedged, including the risk management objective and strategy for undertaking the hedging transactions. This also includes matching the natural gas derivative contracts to the forecasted transactions. For contracts that have been designated as cash flow hedges, and where the Company is a party to the contract, the Company’s Parent assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives are highly effective in offsetting changes in the fair value of the hedged items. The Company is a party to the derivative contracts in which cash flow hedge accounting is elected by its Parent to be applied in the Company’s financial statements. Gains or losses on contracts that are designated as cash flow hedges are charged or credited to Accumulated Other Comprehensive Income (Loss) and recognized as a component of gas production revenues in the month the hedged gas is sold. If it is determined that a derivative is not highly effective as a hedge or it has ceased to be a highly effective hedge, due to the loss of correlation between changes in gas reference prices under a hedging instrument and actual gas prices, the Company will discontinue hedge accounting for the derivative and subsequent changes in fair value for the derivative will be recognized immediately into earnings. For contracts that have not been designated as cash flow hedges, the Company has recorded changes in their fair values within earnings. Gains or losses on contracts are determined as the difference between the contract price and a reference price, generally prices on NYMEX.

At December 31, 2006, the Company had natural gas swap and forward sales contracts related to natural gas sales covering 102.8 million MMBtus of natural gas, maturing through December 31, 2014 at a combined average settlement price of $3.65 per MMBtu. The Company recognized a gain of $149.2 million and losses of $384.6 million and $118.2 million on contracts covering natural gas production for the years ended December 31, 2006, 2005 and 2004, respectively. The Company recognized a non-cash gain of $217.7 million and non-cash losses of $285.0 million and $62.7 million during the above periods related to the mark-to-market of non-hedge designated derivatives and hedge ineffectiveness, which is included in derivative gain (loss) on its Statement of Operations.

Of the $317,000 net gain in Accumulated Other Comprehensive Income at December 31, 2006, the Company will not reclassify any amounts to its Statements of Operations over the next twelve month period, as these contracts expire $317,000 of gains will be reclassified in later periods if the fair values of the instruments remain at current market values.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 4 - DERIVATIVE INSTRUMENTS (CONTINUED)

As of December 31, 2006, the Company had the following natural gas derivative contracts with affiliates of DTE:

Fixed Price Swaps

Twelve Month
Period Ending December 31,	Volumes		Average Fixed Price		Fair Value Liability
	(MMBtu)		(per MMBtu)		(in thousands)
2007		14,986,000	$	3.27	$	(53,531	)
2008		16,202,400	$	3.73		(63,218	)
2009		14,986,000	$	3.48		(54,524	)
2010		14,986,000	$	3.59		(44,141	)
2011		11,927,600	$	3.70		(28,162	)
2012		9,000,000	$	3.80		(16,040	)
2013		9,000,000	$	3.92		(13,435	)
2014		9,000,000	$	4.04		(10,726	)
					$	(283,777	)

Forward Sales

Twelve Month
Period Ending December 31,	Volumes		Average Fixed Price		Fair Value Liability
	(MMBtu)		(per MMBtu)		(in thousands)
2007		2,814,533	$	2.74	$	(11,508	)
					$	(11,508	)
				Net Liability	$	(295,285	)

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 5—COMMITMENTS AND CONTINGENCIES

The Company is one of four defendants in a personal injury action filed in Antrim County Circuit Court in northern Michigan in August, 2006.  The complaint alleges that plaintiff suffered serious personal injuries as a result of the defendants’ negligence.  The Company intends to vigorously defend itself in this matter and does not believe that any settlement will be material to its financial position or results of operations.

The Company is also a party to various routine legal proceedings arising out of the ordinary course of its business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition or results of operations.

NOTE 6 — CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

All derivative agreements are contracted with affiliates (see Note 4) and the Company is included in its Parent’s consolidated tax return (see Note 7). In addition, oil and gas production revenues of $134.9 million, $157.9 million and $120.5 million were sold to affiliates in the years ended December 31, 2006, 2005 and 2004, respectively.

The Company utilizes the cash management services of its ultimate Parent. As such, the Parent invests the Company’s excess cash or advances funds as needed. These services are covered by a cash management and working capital loan agreement. This agreement calls for monthly interest payments at an interest rate determined by DTE. Any loans have a maturity date twelve months after the date of each agreement and may be extended for an additional twelve months, t hese loans are shown as short-term borrowings from affiliate on the Company’s Balance Sheets . Interest rates charged to the Company on such loans were 6.75%, 6.75% and 6.0% for the years ended December 31, 2006, 2005 and 2004, respectively.

Due to/from affiliates shown on the Company’s Balance Sheets represents amounts owed or receivable for advances and other transactions in the normal course of business. The Company depends on its parent company, DTE Energy Company and its affiliates, for many management and administrative functions. The Company is billed a fee and reimburses DTE for management and administrative services and expenses incurred on its behalf. This fee and expense reimbursement is shown as Expense reimbursement-affiliate on the Company’s Statements of Operations, the Company was not charged a fee by its Parent in 2005.

NOTE 7 — INCOME TAXES

The following table details the components of the Company’s provision for income taxes for the periods indicated:

	Years Ended December 31,
	2006			2005		2004
	(in thousands)
(Provision) benefit for income taxes:
Current	$	-		$	-	$	-
Deferred		(79,033	)		96,921		18,356
	$	(79,033	)	$	96,921	$	18,356

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 7— INCOME TAXES (CONTINUED)

A reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate is as follows:

	Years Ended December 31,
	2006			2005			2004
Statutory tax rate		35	%		35	%		35	%
		35	%		35	%		35	%

The components of the Company’s net deferred tax assets are as follows:

	December 31,
	2006			2005
	(in thousands)
Deferred tax assets related to:
Accrued expenses	$	1,644		$	1,384
Unrealized loss on derivatives		103,924			180,431
Asset retirement obligations		4,568			3,950
Net operating loss carry forwards		35,536			40,937
Tax credit carryforwards		67,493			67,493
		213,165			294,195
Deferred tax liabilities related to:
Unrealized gain on derivatives	$	(171	)	$	-
Property and equipment basis differences		(60,689	)		(47,272	)
		(60,860	)		(47,272	)
Net deferred tax asset	$	152,305		$	246,923

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 7 — INCOME TAXES - (CONTINUED)

Deferred income tax assets and liabilities are classified as current or long-term consistent with the classification of the related temporary difference and are recorded in the Company’s balance sheets as follows:

	December 31,
	2006		2005
	(in thousands)
Current deferred tax asset	$	24,522	$	53,142
Non-current deferred tax asset		127,783		193,781
	$	152,305	$	246,923

The Company had net operating loss carryforwards of $101.5 million at December 31, 2006, primarily related to federal income taxes that will expire beginning in 2019 and ending in 2021 if unused.

NOTE 8—SUPPLEMENTAL OIL AND GAS INFORMATION

Results of operations from oil and gas producing activities for the periods indicated are as follows (in thousands):

	Years Ended December 31,
	2006			2005			2004
Revenues (1)	$	73,323		$	66,839		$	70,041
Production costs		(28,324	)		(28,835	)		(25,501	)
Exploration expenses		−			−			−
Depreciation, depletion and amortization		(19,474	)		(18,302	)		(18,675	)
Income tax provision		(8,934	)		(6,896	)		(9,053	)
Results of operations from oil and gas producing activities	$	16,591		$	12,806		$	16,812

(1) Excludes gains or losses on mark-to-market financial commodity derivative contracts, see Note 4.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 8—SUPPLEMENTAL OIL AND GAS INFORMATION - (CONTINUED)

Capitalized Costs Related to Oil and Gas Producing Activities. The components of capitalized costs related to the Company’s oil and gas producing activities at the dates indicated are as follows (in thousands):

	At December 31,
	2006			2005
Mineral interests:
Proved properties	$	36,253		$	31,901
Unproved properties		5,373			6,376
Wells and related equipment		374,434			329,826
		416,060			368,103
Accumulated depreciation, depletion and amortization		(95,522	)		(77,098	)
Net capitalized costs	$	320,538		$	291,005

Costs Incurred in Oil and Gas Producing Activities . The costs incurred by the Company in its oil and gas activities for the periods indicated are as follows (in thousands):

	Years Ended December 31,
	2006		2005		2004
Property acquisition costs:
Proved properties	$	3,454	$	2,017	$	1,085
Unproved properties		372		1,842		669
Exploration costs		202		183		285
Development costs		44,753		32,311		20,358
	$	48,781	$	36,353	$	22,397

The development costs above were substantially all incurred for the development of proved undeveloped properties.

Oil and Gas Reserve Information (Unaudited)

The estimates of the Company’s proved and unproved gas and oil reserves are based upon evaluations made by management and verified by independent petroleum engineers. All reserves are located within the United States. Reserves are estimated in accordance with guidelines established by the Securities and Exchange Commission and the Financial Accounting Standards Board which require that reserve estimates be prepared under existing economic and operating conditions with no provisions for price and cost escalation except by contractual arrangements.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 8—SUPPLEMENTAL OIL AND GAS INFORMATION - (CONTINUED)

Proved oil and gas reserves are the estimated quantities of natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e. prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions.

· Reservoirs are considered proved if economic producibility is supported by either actual production or conclusive formation tests. The area of a reservoir considered proved includes (a) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and (b) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir.

· Reserves which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the “proved” classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based.

· Estimates of proved reserves do not include the following: (a) oil that may become available from known reservoirs but is classified separately as “indicated additional reservoirs”; (b) crude oil and natural gas, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics or economic factors; (c) crude oil and natural gas, that may occur in undrilled prospects; and natural gas, that may be recovered from oil shales, coal, gilsonite and other such sources.

Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operation methods. Additional oil and gas expected to be obtained through the application of fluid injection or other improved recovery techniques for supplementing the natural forces and mechanisms of primary recovery should be included as “proved developed reserves” only after testing by a pilot project or after the operation of an installed program has confirmed through production response that increased recovery will be achieved.

There are numerous uncertainties inherent in estimating quantities of proven reserves and in projecting future net revenues and the timing of development expenditures. The reserve data presented represents estimates only and should not be construed as being exact. Additionally, the standardized measure of discounted future net cash flows may not represent the fair market value of the Company’s oil and gas reserves or the present value of future cash flows of equivalent reserves, due to anticipated future changes in oil and gas prices and in production and development costs and other factors for effects have not been proved.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 8—SUPPLEMENTAL OIL AND GAS INFORMATION - (CONTINUED)

The Company’s reconciliation of changes in proved reserve quantities is as follows (unaudited):

	Gas			Oil
	(MMcf)			(MBbls)
Balance January 1, 2004		351,816			21
Current additions		14,133			―
Revisi ons		(8,306	)		27
Production		(22,481	)		(13	)
Balance December 31, 2004		335,162			35
Current additions		31,455			―
Revisions		(6,900	)		(10	)
Production		(21,498	)		(5	)
Balance December 31, 2005		338,219			20
Current additions		130,738			―
Revisi ons		(5,495	)		(8	)
Production		(21,416	)		(9	)
Balance December 31, 2006		442,046			3
Proved developed reserves at:
December 31, 2004		310,701			35
December 31, 2005		317,235			20
December 31, 2006		302,969			3

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 8—SUPPLEMENTAL OIL AND GAS INFORMATION - (CONTINUED)

The following schedule presents the standardized measure of estimated discounted future net cash flows relating to proved oil and gas reserves. The estimated future production is priced at year-end prices, adjusted only for fixed and determinable increases in natural gas and oil prices provided by contractual agreements. The resulting estimated future cash inflows are reduced by estimated future costs to develop and produce the proved reserves based on year-end cost levels and includes the effect on cash flows of settlement of asset retirement obligations on gas and oil properties. The future net cash flows are reduced to present value amounts by applying a 10% discount factor. The standardized measure of future cash flows was prepared using the prevailing economic conditions existing at December 31, 2004, 2005 and 2006 and such conditions continually change. Accordingly, such information should not serve as a basis in making any judgment on the potential value of recoverable reserves or in estimating future results of operations.

	Years Ended December 31,
	2006			2005			2004
	(in thousands, unaudited)
Future cash inflows	$	2,444,857		$	3,510,353		$	2,273,271
Future production costs		(703,709	)		(470,876	)		(577,255	)
Future development costs		(131,555	)		(21,838	)		(16,594	)
Future income tax expense		(425,189	)		(900,843	)		(432,675	)
Future net cash flows		1,184,404			2,116,796			1,246,747
Less 10% annual discount for estimating timing of cash flows		(648,642	)		(1,154,842	)		(646,442	)
Standardized measure of discounted future net cash flows	$	535,762		$	961,954		$	600,305

The future cash flows estimated to be spent to develop proved undeveloped properties in the years ended December 31, 2007, 2008, 2009 and 2010 are $60.5 million, $44.1 million, $23.0 million and $4.0 million, respectively.

DTE GAS AND OIL COMPANY

NOTES TO FINANCIAL STATEMENTS — (CONTINUED)

DECEMBER 31, 2006

NOTE 8—SUPPLEMENTAL OIL AND GAS INFORMATION - (CONTINUED)

The following table (in thousands) summarizes the changes in the standardized measure of discounted future net cash flows from estimated production of proved oil and gas reserves after income taxes for the years ended December 31, 2004, 2005 and 2006.

	Years Ended December 31,
	2006			2005			2004
				(unaudited)
Balance, beginning of period	$	961,954		$	600,305		$	359,159
Increase (decrease) in discounted future net cash flows:
Sales of oil and gas, net of related costs		(114,169	)		(137,873	)		(100,917	)
Net changes in prices and production costs		(723,715	)		557,585			302,975
Revisions of previous quantity estimates		(10,034	)		(44,872	)		(20,206	)
Development costs incurred		21,519			15,285			14,230
Changes in future development costs		(109,717	)		(5,245	)		6,184
Extensions, discoveries, and improved recovery less related costs		236,532			145,814			34,954
Accretion of discount		96,195			60,031			35,916
Net changes in future income taxes		217,045			(201,046	)		(67,606	)
Other		(39,848	)		(28,030	)		35,616
Balance, end of period	$	535,762		$	961,954		$	600,305

NOTE 9 - SUBSEQUENT EVENT

On June 29, 2007, the Company was acquired by Atlas Energy Resources, LLC (NASDAQ:ATN) for $1.268 billion, including adjustments for working capital of $10.4 million and current year capital expenditures of $19.0 million. Simultaneous with this transaction, DTE assumed all income tax liabilities, affiliate debt not specifically related to oil and gas production and derivative contracts. Subsequent to the acquisition of DGO, the Company changed its name to Atlas Gas & Oil Company (“AGO”).

EX-5.3

Exhibit 5.3

EX-5.4

Exhibit 5.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the registration statement on Form S-8 (No. 333-126343) of Atlas America, Inc. of our reports dated September 14, 2007, with respect to the combined statements of assets acquired and liabilities assumed as of December 31, 2006 and the related revenues and direct operating expenses of Anadarko Chaney Dell System and Anadarko Midkiff/Benedum System, for each of the years in the three-year period ended December 31, 2006, which reports appear in the Form 8-K of Atlas America, Inc. dated on November 8, 2007.

These combined statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 1. The statements are not intended to be a complete presentation of the Anadarko Chaney Dell System and Anadarko Midkiff/Benedum System.

/s/ KPMG LLP

Denver, Colorado

November 7, 2007

EX-5.5

Exhibit 5.5

ANADARKO CHANEY DELL SYSTEM

Combined Statements of Assets Acquired and Liabilities Assumed and the related

Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(With Independent Auditors’ Report Thereon)

Independent Auditors’ Report

The Board of Directors

Anadarko Petroleum Corporation:

We have audited the accompanying combined statement of assets acquired and liabilities assumed of the Anadarko Chaney Dell System (Chaney Dell System) as of December 31, 2006, acquired on July 27, 2007 by Atlas Pipeline Partners, L.P., and the related combined statements of revenues and direct operating expenses for each of the years in the three-year period ended December 31, 2006. These combined financial statements are the responsibility of Anadarko Petroleum Corporation’s management. Our responsibility is to express an opinion on these statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation  of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 1. The financial statements are not intended to be a complete presentation of the Chaney Dell Systems’ assets, liabilities, revenues, expenses, or cash flows.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the assets acquired and liabilities assumed as of December 31, 2006 and the related revenues and direct operating expenses of the Chaney Dell System for each of the years in the three-year period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Denver, Colorado

September 14, 2007

ANADARKO CHANEY DELL SYSTEM

Combined Statement of Assets Acquired and Liabilities Assumed

December 31, 2006

(Amounts in thousands)

Property, plant, and equipment, net	$	923,935
Inventory		2,228
Total assets acquired	$	926,163
Asset retirement obligation	$	3,582
Total liabilities assumed	$	3,582

See accompanying notes to the combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses.

ANADARKO CHANEY DELL SYSTEM

Combined Statements of Revenues and Direct Operating Expenses

Years ended December 31, 2006, 2005, and 2004

(Amounts in thousands)

	2006		2005		2004
Revenues:
Sale of gas	$	203,647		251,249		192,667
Sale of natural gas liquids		123,431		92,788		73,254
Gathering and processing		22,185		19,187		15,060
Marketing fees		4,805		4,725		4,010
Total revenues		354,068		367,949		284,991
Direct operating expenses:
Product purchases		268,118		300,148		231,097
Plant operating expenses		17,201		13,630		11,960
Total direct operating expenses		285,319		313,778		243,057
Revenues in excess of direct
operating expenses	$	68,749		54,171		41,934

See accompanying notes to the combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses.

ANADARKO CHANEY DELL SYSTEM

Notes to Statements of Assets Acquired and Liabilities Assumed and

the related Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(1) Basis of Presentation

On June 1, 2007, Atlas Pipeline Partners, L.P. (Atlas) entered into an agreement with Western Gas Resources, a wholly owned subsidiary of Anadarko Petroleum Corporation (Anadarko) whereby Anadarko received $1.85 billion and Atlas acquired control of Anadarko’s interests in the Chaney Dell (Chaney Dell System) and Midkiff/Benedum natural gas gathering systems and associated processing plants. The parties formed two separate joint ventures to effect the transactions, which closed in July 2007. The effective date of the transactions in the agreement is July 1, 2007.

The accompanying historical combined statement of assets acquired and liabilities assumed together with the combined statements of revenues and direct operating expenses are presented using the accrual basis, and represent the historical carrying value of assets acquired and liabilities assumed as well as revenues and direct operating expenses attributable to Anadarko’s interest in the Chaney Dell System located in the Anadarko Basin in northwest Oklahoma and southwest Kansas. The combined system consists of approximately 3,500 miles of gathering lines, 12 field compressor stations, and the Chaney Dell, Waynoka, and Chester processing facilities. The Waynoka processing facility was constructed during 2006 and placed into service in December 2006. After this facility was placed into service, the Chaney Dell processing facility was temporarily idled.

Anadarko did not prepare separate stand-alone historical financial statements for the Chaney Dell System in accordance with accounting principles generally accepted in the United States of America. Accordingly, it is not practicable to identify all assets and liabilities, or other indirect operating costs applicable to the Chaney Dell System. The accompanying financial statements were prepared from the historical accounting records of Anadarko.

Certain indirect expenses, as further described in note 4, were not allocated to the Chaney Dell System’s historical financial records. Any attempt to allocate these expenses would require significant and judgmental allocations.

The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to represent a complete set of financial statements reflecting financial position, results of operations, shareholders’ equity, and cash flows of the Chaney Dell System, and are not indicative of the results of operations for the Chaney Dell System going forward.

(2) Significant Accounting Policies

(a) Principles of Combination and Use of Estimates

The combined statement of assets acquired and liabilities assumed at December 31, 2006 and the related combined statements of revenues and direct operating expenses are derived from the accounts of Anadarko. All significant intercompany transactions and balances have been eliminated in combination of the financial statements. Accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses. Actual balances and results could be different from those estimates.

ANADARKO CHANEY DELL SYSTEM

Notes to Statements of Assets Acquired and Liabilities Assumed and

the related Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(b) Property, Plant, and Equipment

Anadarko capitalizes all construction-related direct labor and material costs, as well as indirect construction costs. Indirect costs include general engineering, taxes, and other. Anadarko does not capitalize the cost of funds during construction. The cost of renewals and betterments that extend the useful life of property, plant and equipment is also capitalized. The cost of repairs, replacements and major maintenance projects, which do not extend the useful life or increase the expected output of property, plant and equipment, is expensed as it is incurred.

Depreciation on property and equipment is calculated using the straight-line method based on the estimated useful life of each facility, which ranges from 18 to 38 years. Useful lives are determined based on the shorter of the estimated life of the equipment or the estimated reserves serviced by our equipment. Among other factors, the estimates consider our experience with similar assets and technical analysis of the reserves. If the actual life of the equipment or the reserves serviced by the equipment were less than originally estimated, we may be required to record a loss upon retirement of a specific asset.

(c) Asset Retirement Obligation

Anadarko uses significant judgment in estimating the liability for future asset retirements. An evaluation is performed over each asset and in some cases individual components of assets to determine and estimate the future cost and timing of retiring those assets. The estimate of the future costs is then discounted back to the present and recorded as a liability. This liability will vary upon the probability, timing and extent of the remediation necessary to reclaim those facilities, the discount factor used in those determinations, and the projected costs of the remediation. Anadarko evaluates these estimates on an ongoing basis and modifies our assumptions as appropriate.

(d) Revenue Recognition

Gas gathered and processed in the Chaney Dell System is supplied under three types of contracts. A majority of the Chaney Dell System’s gross margin (or revenues at the plant less product purchases) for each of the years in the three-year period ended December 31, 2006, was under percentage-of-proceeds agreements in which Anadarko is typically responsible for the marketing of the gas and Natural Gas Liquids (NGLs). Under these agreements, Anadarko pays producers a specified percentage of the net proceeds received from the sale of the gas and the NGLs. Revenue is recognized when the gas or NGLs are sold and the related product purchases are recorded as a percentage of the sale of the product.

To a lesser extent, the Chaney Dell System’s gross margin for the same period was under contracts that are primarily fee-based from which the Company receives a set fee for each Mcf of gas gathered and/or processed. These types of contracts are typically paired with a “keepwhole” agreement providing the operator with an option to process the gas once it is gathered. Revenue is recognized under these contracts when the related services are rendered.

A small percentage of the Chaney Dell System’s gross margin was under contracts with “keepwhole” arrangements or wellhead purchase contracts. Under the “keepwhole contracts”, Anadarko retains the NGLs recovered by the processing facility and keeps the producers whole by returning to the producers at the tailgate of the plant an amount of gas equal, on a Btu basis, to the natural gas received at the plant inlet. The “keepwhole” component of the contracts permits the Company to benefit when the value of the NGLs is greater as a liquid than as a portion of the residue gas stream. Under the majority of these contracts, the option to process is at the Company’s discretion. Under this type of contract, revenue is recognized when the product is sold.

ANADARKO CHANEY DELL SYSTEM

Notes to Statements of Assets Acquired and Liabilities Assumed and

the related Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

Under many of these contracts, the Company also receives a marketing fee on NGLs. The marketing fee is earned when the product is sold and title transfers.

(e) Direct Operating Expenses

Direct operating expenses are recognized when incurred and consist of direct expenses of operating the Chaney Dell System. The direct operating expenses include product purchases and plant operating expenses. Product purchases include costs associated with the purchase of natural gas from wells to process and treat natural gas to meet pipeline specifications and to extract NGLs. Plant operating expenses also include expenses directly associated with support personnel, support services, equipment, and facilities directly related to gas processing activities.

(3) Commitments and Contingencies

(a) Contingencies

The activities of the Chaney Dell System are subject to potential claims and litigation in the normal course of operations. Anadarko does not believe that any liability resulting from any pending or threatened litigation will have a materially adverse effect on the operations or financial results of the Chaney Dell System.

(b) Lease Commitments

In the normal course of the Company’s business operations, the Company enters into operating leases for compression equipment. These leases are classified as operating leases and have terms ranging from four to five years. The leases have purchase options at various times throughout the primary terms of the agreements and have renewal provisions. Rental payments under operating leases totaled $610,000, $607,000, and $404,000 in 2006, 2005, and 2004, respectively. Future operating lease payments under these leases are as follows (amounts in thousands):

2007	$	534
2008		534
2009		534
2010		512
2011		109
Total	$	2,223

ANADARKO CHANEY DELL SYSTEM

Notes to Statements of Assets Acquired and Liabilities Assumed and

the related Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(4) Excluded Expenses (Unaudited)

The Chaney Dell System was part of a much larger enterprise prior to closing the sale to Atlas. Indirect general and administrative expenses, interest, income taxes, and other indirect expenses were not allocated to the Chaney Dell System, and have been excluded from the accompanying combined statements. In addition, management of Anadarko believes such indirect expenses are not indicative of future costs or recoveries that may be incurred by Atlas.

Depreciation and amortization have been excluded from the accompanying combined statements of revenues and direct operating expenses as such amounts would not be indicative of those expenses, which would be incurred based on the amounts expected to be allocated to the Chaney Dell System in connection with the purchase price allocation by Atlas.

(5) Cash Flow Information (Unaudited)

Capital expenditures were approximately $54.5 million, $54.6 million, and $15.0 million for the years ended December 31, 2006, 2005, and 2004, respectively. Other cash flow information is not available on a stand-alone basis for the Chaney Dell System.

EX-5.6

Exhibit 5.6

ANADARKO CHANEY DELL SYSTEM

Combined Statements of Revenues and Direct Operating Expenses

For the Six Months Ended June 30, 2007 and 2006

(Amounts in thousands - Unaudited)

	For the Six Months Ended June 30,
	2007		2006
Revenues:
Sale of gas	$	96,283	$	112,101
Sale of natural gas liquids		71,451		53,816
Gathering and processing		11,881		10,900
Marketing fees		1,790		2,528
Total revenues		181,405		179,345
Direct operating expenses:
Product purchases		136,460		140,492
Plant operating expenses		6,175		7,638
Total direct operating expenses		142,635		148,130
Revenues in excess of direct operating expenses	$	38,770	$	31,215

See accompanying notes to the combined statements of revenues and direct operating expenses.

ANADARKO CHANEY DELL SYSTEM

Notes to Combined Statements of Revenues and Direct Operating Expenses

 For the Six Months Ended June 30, 2007 and 2006

(1) Basis of Presentation

On June 1, 2007, Atlas Pipeline Partners, L.P. (Atlas) entered into an agreement with Western Gas Resources, a wholly owned subsidiary of Anadarko Petroleum Corporation (Anadarko) whereby Anadarko receives $1.85 billion and Atlas acquires control of Anadarko’s interests in the Chaney Dell (Chaney Dell System) and Midkiff/Benedum natural gas gathering systems and associated processing plants. The parties formed two separate joint ventures to effect the transactions, which closed in July 2007. The effective date of the transactions in the agreement is July 1, 2007.

The accompanying historical combined statements of revenues and direct operating expenses are presented using the accrual basis, and represent the historical revenues and direct operating expenses attributable to Anadarko’s interest in the Chaney Dell System located in the Anadarko Basin in northwest Oklahoma and southwest Kansas. The combined system consists of approximately 3,500 miles of gathering lines, 12 field compressor stations, and the Chaney Dell, Waynoka, and Chester processing facilities. The Waynoka processing facility was constructed during 2006 and placed into services in December 2006. After this facility was placed into services, the Chaney Dell processing facility was temporarily idled.

Anadarko did not prepare separate stand-alone historical financial statements for the Chaney Dell System in accordance with accounting principles generally accepted in the United States of America. Accordingly, it is not practicable to identify all indirect operating costs applicable to the Chaney Dell System. The accompanying combined statements of revenues and direct operating costs were prepared from the historical accounting records of Anadarko.

Certain indirect expenses, as further described in note 4, were not allocated to the Chaney Dell System historical financial records. Any attempt to allocate these expenses would require significant and judgmental allocations.

The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to represent a complete set of financial statements reflecting financial position, results of operations, shareholders’ equity, and cash flows of the Chaney Dell System, and are not indicative of the results of operations for the Chaney Dell System going forward.

(2) Significant Accounting Policies

(a)Principles of Combination and Use of Estimates

The combined statements of revenues and direct operating expenses are derived from the accounts of Anadarko. All significant intercompany transactions and balances have been eliminated in combination of the combined statements of revenues and direct operating expenses. Accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the combined statements of revenues and direct operating expenses. Actual balances and results could be different from those estimates.

(b)Revenue Recognition

Gas gathered and processed through the Chaney Dell System is supplied under three types of contracts. A majority of the Chaney Dell System’s gross margin (or revenues at the plant less product purchases) for each both the six months ended June 30, 2007 and 2006 was under percentage-of-proceeds agreements in which Anadarko is typically responsible for the marketing of the gas and Natural Gas Liquids (NGLs). Under these agreements, Anadarko pays producers a specified percentage of the net proceeds received from the sale of the gas and the NGLs. Revenue is recognized when the gas or NGLs are sold and the related product purchases are recorded as a percentage of the sale of the product.

ANADARKO CHANEY DELL SYSTEM

Notes to Combined Statements of Revenues and Direct Operating Expenses

For the Six Months Ended June 30, 2007 and 2006

A small percentage of the Chaney Dell System’s gross margin was under contracts with “keepwhole” arrangements or wellhead purchase contracts. Under the “keepwhole contracts”, Anadarko retains the NGLs recovered by the processing facility and keeps the producers whole by returning to the producers at the tailgate of the plant an amount of gas equal on a Btu basis to the natural gas received at the plant inlet. The “keepwhole” component of the contracts permits the Company to benefit when the value of the NGLs is greater as a liquid than as a portion of the residue gas stream. Under the majority of these contracts, the option to process is at the Company’s discretion. Under this type of contract, the revenue is recognized when the product is sold.

Under many of these contracts, the Company also receives a marketing fee on NGLs. The marketing fee is earned when the product is sold and title transfers.

(c)Direct Operating Expenses

Direct operating expenses are recognized when incurred and consist of direct expenses of operating the Chaney Dell System. The direct operating expenses include product purchases and plant operating expenses. Product purchases include costs associated with the purchase of natural gas from wells to process and treat natural gas to meet pipeline specifications and to extract NGLs. Plant operating expenses also include expenses directly associated with support personnel, support services, equipment, and facilities directly related to gas processing activities.

(3) Contingencies

The activities of the Chaney Dell System are subject to potential claims and litigation in the normal course of operations. Anadarko does not believe that any liability resulting from any pending or threatened litigation will have a materially adverse effect on the operations or financial results of the Chaney Dell System.

(4) Excluded Expenses

The Chaney Dell System was part of a much larger enterprise prior to closing the sale to Atlas. Indirect general and administrative expenses, interest, income taxes, and other indirect expenses were not allocated to the Chaney Dell System, and have been excluded from the accompanying combined statements. In addition, management of Anadarko believes such indirect expenses are not indicative of future costs or recoveries that may be incurred by Atlas.

Depreciation and amortization have been excluded from the accompanying combined statements of revenues and direct operating expenses as such amounts would not be indicative of those expenses, which would be incurred based on the amounts expected to be allocated to the Chaney Dell System in connection with the purchase price allocation by Atlas.

(5) Cash Flow Information

Capital expenditures were approximately $16.7 million and $34.9 million for the six months ended June 30, 2007 and 2006, respectively. Other cash flow information is not available on a stand-alone basis for the Chaney Dell System.

EX-5.7

Exhibit 5.7

ANADARKO MIDKIFF/BENEDUM SYSTEM

Combined Statements of Assets Acquired and Liabilities Assumed and the related

Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(With Independent Auditors’ Report Thereon)

Independent Auditors’ Report

The Board of Directors

Anadarko Petroleum Corporation:

We have audited the accompanying combined statement of assets acquired and liabilities assumed of the Anadarko Midkiff/Benedum System (Midkiff System) as of December 31, 2006, acquired on July 27, 2007 by Atlas Pipeline Partners, L.P., and the related combined statements of revenues and direct operating expenses for each of the years in the three-year period ended December 31, 2006. These financial statements are the responsibility of Anadarko Petroleum Corporation’s management. Our responsibility is to express an opinion on these statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 1. The financial statements are not intended to be a complete presentation of the Midkiff Systems’ assets, liabilities, revenues, expenses, and cash flows.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the assets acquired and liabilities assumed as of December 31, 2006 and the related revenues and direct operating expenses of the Midkiff System for each of the years in the three-year period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Denver, Colorado

September 14, 2007

ANADARKO MIDKIFF/BENEDUM SYSTEM

Combined Statement of Assets Acquired and Liabilities Assumed

December 31, 2006

(Amounts in thousands)

Property, plant, and equipment, net	$	578,956
Total assets acquired	$	578,956
Asset retirement obligation	$	2,883
Total liabilities assumed	$	2,883

See accompanying notes to the combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses.

ANADARKO MIDKIFF/BENEDUM SYSTEM

Combined Statements of Revenues and Direct Operating Expenses

Years ended December 31, 2006, 2005, and 2004

(Amounts in thousands)

	2006		2005		2004
Revenues:
Sale of gas	$	108,885		141,091		107,053
Sale of natural gas liquids		154,220		132,764		107,650
Processing fees		—		492		504
Marketing fees		400		449		399
Total revenues		263,505		274,796		215,606
Direct operating expenses:
Product purchases		182,644		190,164		147,669
Plant operating expenses		20,518		18,334		17,484
Total direct operating expenses		203,162		208,498		165,153
Revenues in excess of direct operating expenses	$	60,343		66,298		50,453

See accompanying notes to the combined statements of assets acquired and liabilities assumed and the related revenues and direct operating expenses.

ANADARKO MIDKIFF/BENEDUM SYSTEM

Notes to Combined Statements of Assets Acquired and Liabilities Assumed and the related

Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(1) Basis of Presentation

On June 1, 2007, Atlas Pipeline Partners, L.P. (Atlas) entered into an agreement with Western Gas Resources, a wholly owned subsidiary of Anadarko Petroleum Corporation (Anadarko) whereby Anadarko receives $1.85 billion and Atlas acquired control of Anadarko’s interests in the Chaney Dell and Midkiff/Benedum (Midkiff System) natural gas gathering systems and associated processing plants. The parties formed two separate joint ventures to effect the transactions, which closed in July 2007. The effective date of the transactions in the agreement is July 1, 2007.

The accompanying historical combined statement of assets acquired and liabilities assumed together with the combined statements of revenues and direct operating expenses are presented using the accrual basis, and represent the historical carrying value of the assets acquired and liabilities assumed as well as revenues and direct operating expenses attributable to Anadarko’s interest in the Midkiff System located in the southeast quadrant of the Permian Basin, southeast of Midland, Texas. The Midkiff System consists of approximately 2,500 miles of gathering lines, 12 field compressor stations, and the Midkiff and Benedum processing facilities. Anadarko’s interest in these facilities is a 72.8% undivided ownership interest with the remaining 27.2% interest held by Pioneer Natural Resources, Inc. Anadarko accounts for this system on a pro-rata basis and, accordingly, only records its 72.8% interest in the revenues and expenses.

Anadarko did not prepare separate stand-alone historical financial statements for the Midkiff System in accordance with accounting principles generally accepted in the United States of America. Accordingly, it is not practicable to identify all assets and liabilities, or other indirect operating costs applicable to the Midkiff System. The accompanying financial statements were prepared from the historical accounting records of Anadarko.

Certain indirect expenses, as further described in note 4, were not allocated to the Midkiff System historical financial records. Any attempt to allocate these expenses would require significant and judgmental allocations.

The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to represent a complete set of financial statements reflecting financial position, results of operations, shareholders’ equity, and cash flows of the Midkiff System, and are not indicative of the results of operations for the Midkiff System going forward.

(2) Significant Accounting Policies

(a) Principles of Combination and Use of Estimates

The combined statement of assets acquired and liabilities assumed at December 31, 2006 and the related combined statements of revenues and direct operating expenses are derived from the accounts of Anadarko. All significant intercompany transactions and balances have been eliminated in combination of the financial statements. Accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the combined statements of assets acquired ad liabilities assumed and the related revenues and direct operating expenses. Actual balances and results could be different from those estimates.

ANADARKO MIDKIFF/BENEDUM SYSTEM

Notes to Combined Statements of Assets Acquired and Liabilities Assumed and the related

Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(b) Property, Plant and Equipment

Anadarko capitalizes all construction-related direct labor and material costs, as well as indirect construction costs. Indirect costs include general engineering, taxes, and other. Anadarko does not capitalize the cost of funds during construction. The cost of renewals and betterments that extend the useful life of property, plant and equipment is also capitalized. The cost of repairs, replacements and major maintenance projects, which do not extend the useful life or increase the expected output of property, plant and equipment, is expensed as it is incurred.

Depreciation on property and equipment is calculated using the straight-line method based on the estimated useful life of each facility, which ranges from 18 to 38 years. Useful lives are determined based on the shorter of the estimated life of the equipment or the estimated reserves serviced by our equipment. Among other factors, the estimates consider our experience with similar assets and technical analysis of the reserves. If the actual life of the equipment or the reserves serviced by the equipment were less than originally estimated, we may be required to record a loss upon retirement of a specific asset.

(c) Asset Retirement Obligation

Anadarko uses significant judgment in estimating the liability for future asset retirements. An evaluation is performed over each asset and in some cases individual components of assets to determine and estimate the future cost and timing of retiring those assets. The estimate of the future costs is then discounted back to the present and recorded as a liability. This liability will vary upon the probability, timing and extent of the remediation necessary to reclaim those facilities, the discount factor used in those determinations, and the projected costs of the remediation. Anadarko evaluates these estimates on an ongoing basis and modifies our assumptions as appropriate.

(d) Revenue Recognition

Gas gathered and processed through the Midkiff System is supplied by unrelated third parties under percentage-of-proceeds agreements. Under these agreements, Anadarko pays producers a specified percentage of the net proceeds received from the sale of the gas and the Natural Gas Liquids (NGLs). Revenue is recognized when the gas or NGLs are sold and the related product purchases are recorded as a percentage of the sale of the product. Under many of these contracts, Anadarko also receives a marketing fee on NGLs. The marketing fee is earned when the product is sold and title transfers.

(e) Direct Operating Expenses

Direct operating expenses are recognized when incurred and consist of direct expenses of operating the Midkiff System. The direct operating expenses include product purchases and plant operating expenses. Product purchases include costs associated with the purchase of natural gas from oil and gas wells to process and treat natural gas to meet pipeline specifications and to extract NGLs. Plant operation expenses also include expenses directly associated with support personnel, support services, equipment, and facilities directly related to gas processing activities.

Anadarko Midkiff/Benedum System

Notes to Combined Statements of Assets Acquired and Liabilities Assumed and the related

Revenues and Direct Operating Expenses

As of December 31, 2006 and for the years ended December 31, 2006, 2005, and 2004

(3) Contingencies

The activities of the Midkiff System are subject to potential claims and litigation in the normal course of operations. Anadarko does not believe that any liability resulting from any pending or threatened litigation will have a materially adverse effect on the operations or financial results of the Midkiff System.

(4) Excluded Expenses (Unaudited)

The Midkiff System was part of a much larger enterprise prior to closing the sale to Atlas. Indirect general and administrative expenses, interest, income taxes, and other indirect expenses were not allocated to the Midkiff System, and have been excluded from the accompanying combined statements. In addition, management of Anadarko believes such indirect expenses are not indicative of future costs or recoveries that may be incurred by Atlas.

Depreciation and amortization have been excluded from the accompanying combined statements of revenues and direct operating expenses as such amounts would not be indicative of those expenses, which would be incurred based on the amounts expected to be allocated to the Midkiff System in connection with the purchase price allocation by Atlas.

(5) Cash Flow Information (Unaudited)

Capital expenditures were approximately $9.1 million, $15.6 million, and $9.1 million for the years ended December 31, 2006, 2005, and 2004, respectively. Other cash flow information is not available on a stand-alone basis for the Midkiff System.

EX-5.8

Exhibit 5.8

ANADARKO MIDKIFF/BENEDUM SYSTEM

Combined Statements of Revenues and Direct Operating Expenses

For the Six Months Ended June 30, 2007 and 2006

(Amounts in thousands - Unaudited)

	For the Six Months Ended June 30,
	2007		2006
Revenues:
Sale of gas	$	61,005	$	55,816
Sale of natural gas liquids		74,455		72,702
Marketing fees		208		237
Total revenues		135,668		128,755
Direct operating expenses:
Product purchases		96,314		88,106
Plant operating expenses		6,923		10,533
Total direct operating expenses		103,237		98,639
Revenues in excess of direct operating expenses	$	32,431	$	30,116

See accompanying notes to the combined statements of revenues and direct operating expenses.

ANADARKO MIDKIFF/BENEDUM SYSTEM

Notes to Combined Statements of Revenues and Direct Operating Expenses

For the Six Months Ended June 30, 2007 and 2006

(1) Basis of Presentation

On June 1, 2007, Atlas Pipeline Partners, L.P. (Atlas) entered into an agreement with Western Gas Resources, a wholly owned subsidiary of Anadarko Petroleum Corporation (Anadarko) whereby Anadarko receives $1.85 billion and Atlas acquires control of Anadarko’s interests in the Chaney Dell and Midkiff/Benedum (Midkiff System) natural gas gathering systems and associated processing plants. The parties formed two separate joint ventures to effect the transactions, which closed in July 2007. The effective date of the transactions in the agreement is July 1, 2007.

The accompanying historical combined statements of revenues and direct operating expenses are presented using the accrual basis, and represent the historical revenues and direct operating expenses attributable to Anadarko’s interest in the Midkiff System located in the southeast quadrant of the Permian Basin, southeast of Midland, Texas. The Midkiff System consists of approximately 2,500 miles of gathering lines, 12 field compressor stations, and the Midkiff and Benedum processing facilities. Anadarko’s interest in these facilities is a 72.8% undivided ownership interest with the remaining 27.2% interest held by Pioneer Natural Resources, Inc. Anadarko accounts for this system on a pro-rata basis and, accordingly, only records its 72.8% interest in the revenues and expenses.

Anadarko did not prepare separate stand-alone historical financial statements for the Midkiff System in accordance with accounting principles generally accepted in the United States of America. Accordingly, it is not practicable to identify all indirect operating costs applicable to the Midkiff System. The accompanying combined statements of revenues and direct operating costs were prepared from the historical accounting records of Anadarko.

Certain indirect expenses, as further described in note 4, were not allocated to the Midkiff System historical financial records. Any attempt to allocate these expenses would require significant and judgmental allocations.

The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to represent a complete set of financial statements reflecting financial position, results of operations, shareholders’ equity, and cash flows of the Midkiff System, and are not indicative of the results of operations for the Midkiff System going forward.

(2) Significant Accounting Policies

(a) Principles of Combination and Use of Estimates

The combined statements of revenues and direct operating expenses are derived from the accounts of Anadarko. All significant intercompany transactions and balances have been eliminated in combination of the combined statements of revenues and direct operating expenses. Accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the combined statements of revenues and direct operating expenses. Actual balances and results could be different from those estimates.

(b) Revenue Recognition

Gas gathered and processed through the Midkiff System is supplied by unrelated third parties under percentage-of-proceeds agreements. Under these agreements, Anadarko pays producers a specified percentage of the net proceeds received from the sale of the gas and the Natural Gas Liquids (NGLs). Revenue is recognized when the gas or NGLs are sold and the related product purchases are recorded as a percentage of the sale of the product. Under many of these contracts, Anadarko also receives a marketing fee on NGLs. The marketing fee is earned when the product is sold and title transfers.

ANADARKO MIDKIFF/BENEDUM SYSTEM

Notes to Combined Statements of Revenues and Direct Operating Expenses

For the Six Months Ended June 30, 2007 and 2006

(c) Direct Operating Expenses

Direct operating expenses are recognized when incurred and consist of direct expenses of operating the Midkiff System. The direct operating expenses include product purchases and plant operating expenses. Product purchases include costs associated with the purchase of natural gas from oil and gas wells to process and treat natural gas to meet pipeline specifications and to extract NGLs. Plant operation expenses also include expenses directly associated with support personnel, support services, equipment, and facilities directly related to gas processing activities.

(3) Contingencies

The activities of the Midkiff System are subject to potential claims and litigation in the normal course of operations. Anadarko does not believe that any liability resulting from any pending or threatened litigation will have a materially adverse effect on the operations or financial results of the Midkiff System.

(4) Excluded Expenses

The Midkiff System was part of a much larger enterprise prior to closing the sale to Atlas. Indirect general and administrative expenses, interest, income taxes, and other indirect expenses were not allocated to the Midkiff System, and have been excluded from the accompanying combined statements. In addition, management of Anadarko believes such indirect expenses are not indicative of future costs or recoveries that may be incurred by Atlas.

Depreciation and amortization have been excluded from the accompanying combined statements of revenues and direct operating expenses as such amounts would not be indicative of those expenses, which would be incurred based on the amounts expected to be allocated to the Midkiff System in connection with the purchase price allocation by Atlas.

(5) Cash Flow Information

Capital expenditures were approximately $11.5 million and $9.9 million for the six months ended June 30, 2007 and 2006, respectively. Other cash flow information is not available on a stand-alone basis for the Midkiff System.

EX-5.9

Exhibit 5.9

PRO FORMA FINANCIAL DATA

The following unaudited pro forma financial data reflects our historical results as adjusted on a pro forma basis to give effect to (a) Atlas Pipeline Holdings’ July 2007 offering of common units and the completion of its July 2006 initial public offering (“IPO”), (b) Atlas Pipeline’s July 2007 offering of common units and the completion of its Chaney Dell and Midkiff/Benedum acquisition, its May 2006 offering of common units, issuance of senior notes, and completion of its acquisition of the remaining 25% ownership interest in NOARK pipeline, and other transactions, and (c) Atlas Energy’s June 2007 offering of common units, the completion of its DGO acquisition and the completion of its December 2006 IPO. The adjustments are described in the notes to the unaudited pro forma financial data.

We accounted for Atlas Pipeline’s NOARK, Chaney Dell, and Midkiff/Benedum acquisitions and Atlas Energy’s DGO acquisition in the unaudited pro forma financial data using the purchase method in accordance with the guidance of Statement of Financial Accounting Standards No. 141, “Business Combinations.” For purposes of developing the unaudited pro forma financial information, we have allocated the purchase prices to NOARK’s, Chaney Dell’s, and Midkiff/Benedum’s gas gathering, processing and/or transmission facilities and DGO’s oil and gas producing properties and related assets based on their fair value. Due to the recent date of Atlas Pipeline’s Chaney Dell and Midkiff/Benedum acquisition and Atlas Energy’s DGO acquisition, the purchase price allocations for these assets acquired and liabilities assumed are based upon estimated fair values, which are subject to adjustment and could change significantly as Atlas Pipeline and Atlas Energy continue to evaluate these preliminary allocations.

The unaudited pro forma balance sheet information reflects the following transactions as if they occurred as of June 30, 2007:

· Atlas Pipeline’s acquisition of control of the 100% interest in the Chaney Dell System and the approximate 73% interest in the Midkiff/Bendum System (collectively, the “Chaney Dell and Midkiff/Benedum Assets”), which occurred on July 27, 2007, through the formation of two joint venture companies which own the respective systems, to which Atlas Pipeline contributed $1.85 billion and Anadarko contributed the Chaney Dell and Midkiff/Benedum Assets, plus $9.7 million of estimated transaction costs;

· Atlas Pipeline’s July 27, 2007 private placement of 25.6 million common units to investors at a negotiated purchase price of $44.00 per unit, including 3.8 million to Atlas Pipeline Holdings, and a $23.1 million capital contribution by Atlas Pipeline Partners GP, LLC (“Atlas Pipeline GP”), a wholly-owned subsidiary of Atlas Pipeline Holdings, to Atlas Pipeline to maintain its 2% general partner interest, the net proceeds of which were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets. Atlas Pipeline GP funded its capital contribution through borrowings of $24.0 million under Atlas Pipeline Holdings’ $50.0 million senior secured revolving credit facility;

· the issuance of Atlas Pipeline’s $830.0 million senior secured term loan which matures July 2014 and its new $300.0 million senior secured revolving credit facility that matures in July 2013, which occurred on July 27, 2007, and borrowings under these facilities that were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets; and

· Atlas Pipeline Holding’s private placement of 6.25 million common units to investors at a negotiated purchase price of $27.00 per unit, which occurred on July 27, 2007, the net proceeds of which were used to finance Atlas Pipeline Holding’s purchase of 3.8 million of Atlas Pipeline’s common units as previously mentioned.

 The unaudited pro forma statement of operations information for the year ended December 31, 2006 reflects the following transactions as if they occurred as of January 1, 2006:

· Atlas Pipeline’s issuance of $30.0 million of 6.5% cumulative convertible preferred units in March 2006 and an additional $10.0 million of such units in May 2006 under a purchase agreement with Sunlight Capital Partners, LLC (“Sunlight”), the net proceeds of which Atlas Pipeline used to fund a portion of its expansion capital expenditures and repay a portion of the indebtedness under Atlas Pipeline’s credit facility incurred in connection with the acquisition of the remaining 25% interest in NOARK; in April 2007, in consideration for their agreement to amend certain provisions within the purchase agreement, Atlas Pipeline issued $8.5 million 8.125% senior unsecured notes due 2015 to Sunlight;

· Atlas Pipeline’s acquisition of the remaining 25% ownership interest in NOARK for a net purchase price of $65.5 million, consisting of $69.0 million of cash to the seller, less the seller’s interest in NOARK’s working capital (including cash on hand and net payables to the seller) at the date of acquisition of $3.5 million, in May 2006; in connection with this transaction, Southwestern agreed to acquire the issuer of the NOARK notes and retain the obligation for the outstanding NOARK notes, with the result that neither NOARK nor Atlas Pipeline had any further liability with respect to such notes;

· Atlas Pipeline’s issuance of $35.0 million of senior unsecured notes at 103% of par value in a private placement in May 2006, the net proceeds of which were used to repay a portion of the indebtedness under Atlas Pipeline’s credit facility incurred in connection with the acquisition of the remaining 25% interest in NOARK;

· Atlas Pipeline’s issuance of 500,000 common limited partner units in May 2006, the net proceeds of which were used to repay a portion of the indebtedness under Atlas Pipeline’s credit facility incurred in connection with the acquisition of the remaining 25% ownership interest in NOARK;

· Atlas Pipeline Holdings’ issuance of 3.6 million common units in an IPO at a price of $23.00 per unit for net proceeds of approximately $74.3 million, after deducting underwriting discounts and commissions and offering expenses incurred by Atlas Pipeline Holdings. The net proceeds from this offering were distributed to the Company, which owns the general partner and 17,500,000 common units of Atlas Pipeline Holdings;

· Atlas Energy’s issuance of 7.3 million common units in an IPO at a price of $21.00 per unit for net proceeds of approximately $139.9 million, after deducting underwriting discounts and commissions and offering expenses incurred by Atlas Energy. The net proceeds from this offering were distributed to the Company, which owns the general partner and 29,352,996 common units of Atlas Energy;

· Atlas Energy’s acquisition of DTE Gas & Oil Company, which occurred on June 29, 2007, from DTE Energy Company and MCN Energy Enterprises for total consideration of $1.268 billion, including adjustments for working capital of $10.4 million and current year capital expenditures of $19.0 million;

· Atlas Energy’s private placement of 16.7 million Class D units and 7.3 million Class B Common units to investors, which occurred on June 29, 2007, for $597.5 million, net of underwriting fees and other offering costs, which was used to partially finance Atlas Energy’s acquisition of DTE;

· Atlas Energy’s borrowings of $714.7 million under its new senior secured credit facility, which matures June 2012, to fund the remaining portion of the purchase price for the DTE acquisition, refinance $56.5 million outstanding under Atlas Energy’s previous credit facility, and pay $9.9 million of debt issuance costs;

· Atlas Pipeline’s acquisition of control of the Chaney Dell System and the Midkiff/Benedum System, which occurred on July 27, 2007, through the formation of two joint venture companies which own the respective systems, to which Atlas Pipeline contributed $1.85 billion and Anadarko contributed the Chaney Dell and Midkiff/Benedum Assets, plus $9.7 million of estimated transaction costs;

· Atlas Pipeline’s private placement of 25.6 million common units to investors, including 3.8 million to Atlas Pipeline GP, at a negotiated purchase price of $44.00 per unit, which occurred on July 27, 2007, and a $23.1 million capital contribution by Atlas Pipeline GP to maintain its 2% general partner interest in Atlas Pipeline, the net proceeds of which were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets. Atlas Pipeline GP funded its capital contribution through borrowings of $24.0 million under Atlas Pipeline Holdings’ $50.0 million senior secured revolving credit facility;

· Atlas Pipeline’s issuance of an $830.0 million senior secured term loan which matures July 2014 and their new $300.0 million senior secured revolving credit facility that matures in July 2013, which occurred on July 27, 2007, and borrowings under these facilities that were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets; and

· Atlas Pipeline Holdings’ private placement of 6.25 million common units to investors at a negotiated purchase price of $27.00 per unit, which occurred on July 27, 2007, the net proceeds of which were used to finance its purchase of 3.8 million of Atlas Pipeline’s common units as previously mentioned.

The unaudited pro forma statement of operations information for the six months ended June 30, 2007 reflects the following transactions as if they occurred as of January 1, 2007 for Atlas Pipeline's acquisition of control of the Chaney Dell System and the Midkiff/Benedum System and January 1, 2006 for Atlas Energy's acquisition of DTE Gas & Oil Company:

· Atlas Pipeline’s issuance of $8.5 million of 8.125% senior unsecured notes due 2015 to Sunlight in April 2007 in consideration for their agreement to amend certain provisions within the purchase agreement for the 6.5% cumulative convertible preferred units issued to Sunlight during 2006;

· Atlas Energy’s acquisition of DTE Gas & Oil Company, which occurred on June 29, 2007, from DTE Energy Company and MCN Energy Enterprises for total consideration of $1.268 billion, including adjustments for working capital of $10.4 million and current year capital expenditures of $19.0 million;

· Atlas Energy’s private placement of 16.7 million Class D units and 7.3 million Class B Common units to investors, which occurred on June 29, 2007, for $597.5 million, net of underwriting fees and other offering costs, which was used to partially finance Atlas Energy’s acquisition of DTE;

· Atlas Energy’s borrowings of $714.7 million under its new senior secured credit facility, which matures June 2012, to fund the remaining portion of the purchase price for the DTE acquisition, refinance $56.5 million outstanding under Atlas Energy’s previous credit facility, and pay $9.9 million of debt issuance costs;

· Atlas Pipeline’s acquisition of control of the Chaney Dell System and the Midkiff/Benedum System, which occurred on July 27, 2007, through the formation of two joint venture companies which own the respective systems, to which Atlas Pipeline contributed $1.85 billion and Anadarko contributed the Chaney Dell and Midkiff/Benedum Assets, plus $9.7 million of estimated transaction costs;

· Atlas Pipeline’s private placement of 25.6 million common units to investors, including 3.8 million to Atlas Pipeline GP, at a negotiated purchase price of $44.00 per unit, which occurred on July 27, 2007, and a $23.1 million capital contribution by Atlas Pipeline GP to maintain its 2% general partner interest, the net proceeds of which were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets. Atlas Pipeline GP funded its capital contribution through borrowings of $24.0 million under Atlas Pipeline Holdings’ $50.0 million senior secured revolving credit facility;

· the issuance of Atlas Pipeline’s $830.0 million senior secured term loan, which matures July 2014, and their new $300.0 million senior secured revolving credit facility that matures in July 2013, which occurred on July 27, 2007, and borrowings under these facilities that were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets; and

· Atlas Pipeline Holdings’ private placement of 6.25 million common units to investors at a negotiated purchase price of $27.00 per unit, which occurred on July 27, 2007, the net proceeds of which were used to finance its purchase of 3.8 million of Atlas Pipeline’s common units as previously mentioned.

In connection with Atlas Pipeline’s Chaney Dell and Midkiff/Benedum acquisitions, Atlas Pipeline reached an agreement with Pioneer Natural Resources Company (NYSE: PXD - “Pioneer”), which currently holds an approximate 27% interest in the Midkiff/Benedum system, whereby Pioneer will have an option to buy up to an additional 14.6% interest in the Midkiff/Benedum system one year after the closing of Atlas Pipeline’s acquisition of Anadarko’s interest, and up to an additional 7.5% interest two years after the closing of Atlas Pipeline’s acquisition of Anadarko’s interest. If the option is fully exercised, Pioneer would increase its interest in the system to approximately 49%. Pioneer would pay approximately $230 million for the additional 22% interest if fully exercised. Atlas Pipeline will manage and control the Midkiff/Benedum system regardless of whether Pioneer exercises the purchase options. Also in connection with Atlas Pipeline’s Chaney Dell and Midkiff/Benedum acquisitions, Atlas Pipeline GP has also agreed to allocate a portion of its future incentive distribution rights to Atlas Pipeline in connection with Atlas Pipeline’s Chaney Dell and Midkiff/Benedum acquisitions. Atlas Pipeline GP has agreed to allocate up to $5.0 million of incentive distribution rights per quarter to Atlas Pipeline for the first 8 quarters after closing of the transaction and up to $3.75 million per quarter after the initial 8 quarter period.

The unaudited pro forma balance sheet and the pro forma statements of operations were derived by adjusting our historical financial statements. However, our management believes that the adjustments provide a reasonable basis for presenting the significant effects of the transactions described above. The unaudited pro forma financial data presented are for informational purposes only and are based upon available information and assumptions that we believe are reasonable under the circumstances. You should not construe the unaudited pro forma financial data as indicative of the combined financial position or results of operations that we, Atlas Pipeline Holdings, Atlas Pipeline, Atlas Energy, NOARK, the Chaney Dell System, the Midkiff/Benedum System, and DGO would have achieved had the transactions been consummated on the dates assumed. Moreover, they do not purport to represent our, Atlas Pipeline Holdings’, Atlas Pipeline’s, Atlas Energy’s, NOARK’s, the Chaney Dell System’s, the Midkiff/Benedum System’s, or DGO’s combined financial position or results of operations for any future date or period.

ATLAS AMERICA, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED BALANCE SHEET

JUNE 30, 2007

(in thousands)

	Atlas			Andadarko		Anadarko
	America,			Chaney		Midkiff/
	Inc.			Dell		Benedum		Adjustments			Pro forma
ASSETS
Current assets:
Cash and cash equivalents	$	83,073		$	−	$	−	$	1,791,688	(a)	$	91,984
									191,063	(b)
									(125,423	)(c)
									(1,848,417	) (e)
Accounts receivable		118,527			−		−		−			118,527
Current portion of derivative asset		33,956			−		−		−			33,956
Prepaid expenses		9,360			2,228		−		−			9,360
Deferred tax asset		9,722			−		−		−			11,950
Total current assets		254,638			2,228		−		8,911			265,777
Property and equipment, net		2,227,117			923,935		578,956		39,905	(c)		4,119,676
									351,346	(d)
									(1,583	)(d)
Note receivable		−			−		−		1,848,417	(e)		−
									(1,848,417	)(e)
Other assets, net		53,439			−		−		11,518	(c)		59,876
									(5,081	)(f)
Intangible assets, net		29,546			−		−		−			29,546
Goodwill		98,607			−		−		−			98,607
	$	2,663,347		$	926,163	$	578,956	$	405,016		$	4,573,482
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	70		$	−	$	−	$	−		$	70
Accounts payable		70,164			−		−		−			70,164
Liabilities associated with drilling contracts		62,291			−		−		−			62,291
Accrued producer liabilities		29,999			−		−		−			29,999
Accrued hedge liability		33,686			−		−		−			33,686
Accrued liabilities		60,916			−		−		−			60,916
Advances from affiliate		105			−		−		−			105
Total current liabilities		257,231			−		−		−			257,231
Long-term debt		1,082,369			−		−		845,000	(a)		1,877,369
									24,000	(b)
									(74,000	)(c)
Deferred tax liability		165,015			−		−		34,216	(g)		199,231
Long-term derivative liability		47,346			−		−		−			47,346
Other liabilities		46,999			3,582		2,883		−			53,464
Minority interests		706,584			−		−		946,688	(a)		1,728,576
									167,063	(b)
									1,848,417	(d)
									(1,848,417	)(e)
									(4,564	)(f)
									(87,195	)(g)
Stockholders’ equity:
Preferred stock		−			−		−		−			−
Common stock		290			−		−		−			290
Additional paid-in capital		335,620			−		−		52,979	(g)		388,599
Treasury stock, at cost		(109,374	)		−		−		−			(109,374	)
ESOP loan receivable		(453	)		−		−		−			(453	)
Accumulated other comprehensive income (loss)		(3,267	)		−		−		−			(3,784	)
Retained earnings		134,987			922,581		576,073		(1,498,654	)(d)		134,987
									(517	)(f)
Total stockholders’ equity		357,803			922,581		576,073		(1,446,192	)		410,265
	$	2,663,347		$	926,163	$	578,956	$	405,016		$	4,573,482

See accompanying notes to unaudited pro forma consolidated financial statements.

ATLAS AMERICA, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2007

(in thousands, except per share data)

	Atlas			DTE Gas			Anadarko		Anadarko
	America,			& Oil			Chaney		Midkiff/
	Inc.			Company			Dell		Benedum		Adjustments			Pro forma
REVENUES:
Well construction and completion	$	137,517		$	−		$	−	$	−	$	−		$	137,517
Gas and oil production		46,575			70,004			−		−		−			116,579
Transmission, gathering and processing		234,399			−			181,405		135,668		−			551,472
Administration and oversight		7,983			−			−		−		−			7,983
Well services		7,876			−			−		−		−			7,876
Derivative gain (loss) and other		(4,569	)		(54,116	)		−		−		−			(58,685	)
		429,781			15,888			181,405		135,668		−			762,742
COSTS AND EXPENSES:
Well construction and completion		119,580			−			−		−		−			119,580
Gas and oil production		4,525			14,443			−		−		−			18,968
Transmission, gathering and processing		190,324			−			142,635		103,237		−			436,196
Well services		4,190			−			−		−		−			4,190
General and administrative		35,777			4,566			−		−		224	(h)		43,067
												2,500	(i)
Net expense reimbursement - affiliate		529			−			−		−		−			529
Depreciation, depletion and amortization		25,877			8,246			−		−		23,174	(j)		91,987
												34,690	(k)
		380,802			27,255			142,635		103,237		60,588			714,517
OPERATING INCOME		48,979			(11,367	)		38,770		32,431		(60,588	)		48,225
OTHER INCOME (EXPENSE)
Interest expense		(16,201	)		(5,322	)		−		−		(21,478	)(l)		(86,055	)
												(1,762	)(m)
												(34,180	)(n)
												(915	)(o)
												(205	)(p)
												(911	)(q)
												(5,081	)(f)
Minority interests		8,590			−			−		−		(1,909	)(r)		5,393
												(1,303	)(s)
												15	(t)
Other, net		2,899			−			−		−		4,159	(u)		7,058
		(4,712	)		(5,322	)		−		−		(63,570	)		(73,604	)
Income (loss) before income taxes		44,267			(16,689	)		38,770		32,431		(124,158	)		(25,379	)
Provision for income taxes		(14,153	)		5,841			−		−		(5,841	)(v)		8,114
												22,267	(w)
Net income (loss)	$	30,114		$	(10,848	)	$	38,770	$	32,431	$	(107,732	)	$	(17,265	)
Net income (loss) per common share -basic
Net income (loss) per common share - basic	$	1.09												$	(0.63	)
Weighted average common shares outstanding		27,595													27,595
Net income (loss) per common share - diluted
Net income (loss) per common share - diluted	$	1.06												$	(0.63	)
Weighted average common shares outstanding		28,536													27,595

See accompanying notes to unaudited pro forma combined and consolidated financial statements.

ATLAS AMERICA, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2006

(in thousands, except per unit data)

	Atlas			DTE Gas			Anadarko		Anadarko
	America,			& Oil			Chaney		Midkiff/
	Inc.			Company			Dell		Benedum		Adjustments			Pro forma
REVENUES:
Well construction and completion	$	88,449		$	−		$	−	$	−	$	−		$	88,449
Gas and oil production		198,567			141,862			−		−		−			340,429
Transmission, gathering and processing		437,575			−			354,068		263,505		−			1,055,148
Administration and oversight		11,762			−			−		−		−			11,762
Well services		12,953			−			−		−		−			12,953
Derivative gain (loss) and other		−			149,484			−		−		−			149,484
		749,306			291,346			354,068		263,505		−			1,658,225
COSTS AND EXPENSES:
Well construction and completion		172,666			−			−		−		−			172,666
Gas and oil production		8,499			28,234			−		−		−			36,733
Transmission, gathering and processing		361,045			−			285,319		203,162		−			849,526
Well services		7,337			−			−		−		−			7,337
General and administrative		46,517			3,826			−		−		448	(h)		56,229
												5,000	(i)
												438	(x)
Net expense reimbursement - affiliate		1,237			3,050			−		−		−			4,287
Depreciation, depletion and amortization		45,643			19,656			−		−		65,574	(j)		200,253
												69,380	(k)
		642,944			54,766			285,319		203,162		140,840			1,327,031
OPERATING INCOME		106,362			236,580			68,749		60,343		(140,840	)		331,194
OTHER INCOME (EXPENSE)
Interest expense		(27,313	)		(10,096	)		−		−		(43,504	)(l)		(162,298	)
												(3,523	)(m)
												(68,361	)(n)
												(1,829	)(o)
												(5,081	)(f)
												(693	)(p)
												(1,822	)(q)
												(146	)(x)
												(1,725	)(y)
												938	(z)
												857	(z)
Minority interests		(18,383	)		−			−		−		(3,756	)(p)		(158,522	)
												(3,152	)(r)
												(600	)(t)
												(132,849	)(s)
												118	(z)
Other, net		8,564			(674	)		−		−		8,318	(u)		16,208
		(37,032	)		(10,770	)		−		−		(256,810	)		(304,612	)
Income before income taxes and cumulative effect of accounting change		69,330			225,810			68,749		60,343		(397,650	)		26,582
Provision for income taxes		(27,308	)		(79,033	)		−		−		79,033	(v)		(10,470	)
												16,838	(w)
Net income before cumulative effect of accounting change		42,022			146,777			68,749		60,343		(301,779	)		16,112
Cumulative effect of accounting change, net of taxes		3,825			−			−		−		−			3,825
Net income (loss)	$	45,847		$	146,777		$	68,749	$	60,343	$	(301,779	)	$	19,937
Net income per common share - basic
Net income before cumulative effect of accounting change - basic	$	1.42												$	0.54
Cumulative effect of accounting change - basic		0.13													0.13
Net income per common share - basic	$	1.55												$	0.67
Weighted average common shares outstanding		29,575													29,575
Net income per common share - diluted
Net income before cumulative effect of accounting change - diluted	$	1.39												$	0.53
Cumulative effect of accounting change - diluted		0.13													0.13
Net income per common share - diluted	$	1.52												$	0.66
Weighted average common shares outstanding		30,236													30,236

See accompanying notes to unaudited pro forma combined and consolidated financial statements.

ATLAS AMERICA, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

(a) To reflect Atlas Pipeline’s net proceeds of (1) $946.7 million from its private placement of 21.7 million common units to third-party investors at a negotiated purchase price of $44.00 per unit and (2) the issuance of an $830.0 million senior secured term loan and $15.0 million of borrowings under Atlas Pipeline’s new $300.0 million senior secured revolving credit facility, both of which were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets and related acquisition and financing costs.

(b) To reflect (1) Atlas Pipeline Holdings’ net proceeds of $167.1 million from its private placement of 6.3 million common units to third-party investors at a negotiated purchase price of $27.00 per unit, the net proceeds of which were utilized to purchase 3.8 million Atlas Pipeline common units at a negotiated purchase price of $44.00 per unit and (2) Atlas Pipeline GP’s $23.1 million capital contribution to Atlas Pipeline to maintain its 2% general partner interest, the net proceeds of which were used by Atlas Pipeline to partially finance the acquisition of the Chaney Dell and Midkiff/Benedum Assets. Atlas Pipeline GP’s capital contribution to Atlas Pipeline was funded by Atlas Pipeline Holdings through borrowings of $24.0 million under its $50.0 million senior secured revolving credit facility. The net proceeds Atlas Pipeline received from Atlas Pipeline Holdings’ purchase of 3.8 million of its common units were used to partially finance Atlas Pipeline’s acquisition of the Chaney Dell and Midkiff/Benedum Assets and related acquisition and financing costs.

(c) To reflect the partial application of Atlas Pipeline’s net proceeds from the private placement of common units and borrowings under its term loan and new credit facility for (1) the repayment of existing borrowings under its previous revolving senior secured credit facility for $74.0 million, (2) the payment of $11.5 million of senior secured term loan and revolving credit facility fees and other transaction costs, which will be amortized over the remaining term of the respective debt instrument, and (3) the payment of acquisition costs, including a tax payment of $30.2 million and other estimated costs of approximately $9.7 million, which are allocated to the underlying assets and liabilities acquired as described in note (d). Due to the recent date of Atlas Pipeline’s Chaney Dell and Midkiff/Benedum acquisitions, the purchase price allocations for these assets acquired and liabilities assumed are based upon estimated fair values, which are subject to adjustment and could change significantly as Atlas Pipeline continues to evaluate this preliminary allocation.

(d) To reflect the formation of the joint ventures in connection with Atlas Pipeline’s acquisition of control of the Chaney Dell and Midkiff/Benedum Assets and the preliminary allocation of the acquisition consideration to the underlying assets and liabilities, including (1) Atlas Pipeline’s contribution of $1.85 billion and Anadarko’s contribution of the Chaney Dell and Midkiff/Benedum Assets, with Anadarko’s members’ interest in the joint ventures represented as Minority Interest on our pro forma balance sheet, and (2) the preliminary allocation of acquisition costs incurred as described in note (c) to the assets and liabilities acquired. Due to the recent date of Atlas Pipeline’s Chaney Dell and Midkiff/Benedum acquisitions, the purchase price allocations for these assets acquired and liabilities assumed are based upon estimated fair values, which are subject to adjustment and could change significantly as Atlas Pipeline continues to evaluate this preliminary allocation.

(e) To reflect the note receivable issued to Anadarko of $1.85 billion from the joint ventures and the reclassification of such note as Minority Interests in the pro forma balance sheet in connection with Atlas Pipeline’s acquisition of control of the Chaney Dell and Midkiff/Benedum Assets.

(f) To reflect the write-off of unamortized deferred financing costs in connection with Atlas Pipeline’s previously existing senior secured revolving credit facility. Atlas Pipeline entered into a new $300.0 million senior secured revolving credit facility in connection with its acquisition of the Chaney Dell and Midkiff/Benedum Assets.

(g) To reflect the Company’s recognition of a net gain of $53.0 million resulting from Atlas Pipeline Holdings’ and Atlas Pipeline’s issuance of common units as described in note (a) and (b) based upon the Company’s cost basis in its ownership interest in Atlas Pipeline Holdings. This amount represents the Company’s portion of the excess net offering price per common unit of Atlas Pipeline Holdings to the book carrying amount per unit. The Company has accounted for this gain in accordance with Staff Accounting Bulletin No. 51, “Accounting by the Parent in Consolidation for Sales of Stock by a Subsidiary” (“SAB No. 51”) and has adopted a policy to recognize gains or losses on such transactions as a credit to stockholders’ equity rather than as income or loss.

(h) To reflect the recognition of incremental common unit awards issued in conjunction with Atlas Energy’s acquisition of DGO.

(i) To reflect estimated indirect costs expected to be incurred by Atlas Pipeline for the Chaney Dell and Midkiff/Benedum Assets for the respective periods as the amounts included for the Chaney Dell and Midkiff/Benedum Assets only represent revenues and direct operating expenses.

(j) To reflect the adjustment to depreciation, depletion and amortization expense for Atlas Energy’s DGO acquisition based upon the estimated fair value allocated to the assets acquired.

(k) To reflect the adjustment to depreciation expense for the Chaney Dell and Midkiff/Benedum Assets based upon the estimated fair value allocated to the assets acquired and calculated using the estimated depreciable lives ranging from 3 to 40 years and the straight-line depreciable method.

(l) To reflect adjustments to interest expense resulting from Atlas Energy’s borrowings of $714.7 million under its new $850.0 million senior secured revolving credit facility at a current interest rate of approximately 7.5%; the proceeds were used to finance a portion of its acquisition purchase price for DGO acquisition and repay $56.5 million outstanding under its previous credit facility.

(m) To reflect the amortization of deferred financing costs related to Atlas Energy’s new senior secured credit facility over its term.

(n) To reflect the adjustments to interest expense resulting from Atlas Pipeline’s issuance of an $830.0 million senior secured term loan and $15.0 million of borrowings under its new $300.0 million senior secured revolving credit facility, both of which were used to finance its acquisition of the Chaney Dell and Midkiff/Benedum Assets and related acquisition and financing costs, at a current interest rate of approximately 8.1%.

(o) To reflect the amortization of deferred financing costs related to Atlas Pipeline’s new senior secured term loan and credit facility over each borrowing instrument’s respective term.

(p) To adjust (1) the Atlas Pipeline’s preferred unit dividend effect to reflect the amount as if it had been incurred as of the beginning of the period presented and (2) interest expense upon the $8.5 million of Atlas Pipeline’s senior unsecured notes issued in April 2007. In April 2007, Atlas Pipeline and the holder of its preferred units, Sunlight, agreed to amend the preferred units. In consideration of this consent, Atlas Pipeline issued $8.5 million of its 8.125% senior unsecured notes due 2015 to Sunlight. With respect to this issuance of senior unsecured notes to Sunlight, Atlas Pipeline reduced its net income in April 2007 by $3.8 million of this amount, which is the portion deemed to be attributable to the concessions of its common limited partners and its general partner to the preferred unitholder.

(q) To reflect the adjustment to interest expense resulting from Atlas Pipeline Holdings’ borrowings of $24.0 million under its $50.0 million senior secured revolving credit facility to finance Atlas Pipeline GP’s capital contribution to Atlas Pipeline to maintain its 2% general partner interest in connection with Atlas Pipeline’s private placement of common units. The adjustment to interest expense for this borrowing was calculated at a current interest rate of approximately 8.1%.

(r) To reflect Anadarko’s 5% member interest in the operating results of the joint ventures formed in connection with Atlas Pipeline’s acquisition of control of the Chaney Dell and Midkiff/Benedum Assets.

(s) To adjustment the minority interest in the net income of Atlas Pipeline, Atlas Pipeline Holdings, and Atlas Energy as a result of the effect of the pro forma statements of operations adjustments noted. The allocation of Atlas Pipeline net income to minority interests is based upon the historical distributions received by its partners. It is impracticable to determine what the cash available would have been on a pro forma basis. Accordingly, the allocation of Atlas Pipeline’s net income to the minority interest owners reflects historical distributions.

(t) To adjust the imputed dividend cost of Atlas Pipeline’s 6.5% cumulative convertible preferred units to reflect the amount as if the preferred units were issued as of the beginning of the respective periods presented.

(u) To reflect interest income on the $1.85 billion note receivable issued by the joint ventures to Anadarko in connection with Atlas Pipeline’s acquisition of control of the Chaney Dell and Midkiff/Benedum Assets.

(v) To reflect the elimination of the income tax provision associated with the operations of DGO as it is now a non-taxable pass-through entity.

(w) To adjust the Company’s income tax provision as a result of the inclusion of the operating results for Atlas Pipeline’s Chaney Dell and Midkiff/Benedum systems and Atlas Energy’s DGO operations and other pro forma adjustments.

(x) To reflect the adjustment of Atlas Pipeline Holdings’ general and administrative costs for estimated incremental expenses as a result of its commencement as a public entity on July 26, 2006, including, among other things, estimated incremental accounting and audit fees, director fees, director and officer liability insurance expenses and other miscellaneous costs. Also reflects the adjustment of interest expense for credit facility fees associated with the credit facility Atlas Pipeline Holdings entered into.

(y) To reflect the adjustment to interest expense to finance borrowings under Atlas Pipeline’s then existing credit facility of $69.0 million incurred in connection with its acquisition of the remaining 25% interest in NOARK at an interest rate of 7.5%. As discussed in note (o), the borrowings under Atlas Pipeline’s then existing credit facility to finance its acquisition of the 25% interest in NOARK were subsequently repaid principally with the net proceeds from Atlas Pipeline’s May 2006 issuance of additional common units, Atlas Pipeline’s May 2006 issuance of senior unsecured notes, and Atlas Pipeline’s May 2006 issuance of preferred units. The effect of the adjustments discussed in note (n) is to remove the effect of the interest expense on the borrowings under the then existing credit facility to finance the acquisition of the 25% interest in NOARK and to reflect interest expense upon the transactions undertaken to finance Atlas Pipeline’s acquisition.

(z) To reflect the elimination of the interest associated with Atlas Pipeline’s NOARK notes and minority interest in NOARK in connection with Atlas Pipeline’s acquisition of the remaining 25% interest in NOARK in May 2006 and the seller’s agreement to acquire the issuer of the NOARK notes and retain the obligation for the outstanding NOARK notes, with the result that neither Atlas Pipeline nor NOARK had any further liability with respect to such notes. Adjustments have also been included to reflect the reduction to interest expense resulting from repayment of amounts outstanding under Atlas Pipeline’s then existing credit facility with the net proceeds from (1) Atlas Pipeline’s May 2006 equity offering, (2) Atlas Pipeline’s May 2006 issuance of senior unsecured notes and the amortization of deferred financing costs related to the issuance of these notes, and (3) Atlas Pipeline’s May 2006 issuance of $10.0 million 6.5% cumulative convertible preferred units.