##### 



/s/ GRANT THORNTON LLPCleveland, OhioMarch 3, 2006
 107




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##### 



ATLAS PIPELINE PARTNERS GP, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
 December 31,2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    34,237Accounts receivable  affiliates
    
    
    4,649Accounts receivable
    
    
    57,528Current portion of hedge asset
    
    
    11,388Prepaid expenses
    
    
    2,454Total current assets
    
    
    110,256Property, plant and equipment, net
    
    
    445,066Long-term hedge asset
    
    
    4,388Intangible assets, net
    
    
    54,869Goodwill
    
    
    111,446Other assets, net
    
    
    16,701$
    742,726LIABILITIES AND OWNERS DEFICITCurrent liabilities:Current portion of long-term debt
    
    $
    1,263Accounts payable
    
    
    15,609Accrued liabilities
    
    
    16,064Current portion of hedge liability
    
    
    23,796Accrued producer liabilities
    
    
    36,712Total current liabilities
    
    
    93,444Long-term hedge liability
    
    
    22,410Long-term debt, less current portion
    
    
    297,362Minority interest in Atlas Pipeline
    
    
    350,511Commitments and contingenciesOwners equity:Owners equity
    
    
    9,074Accumulated other comprehensive loss
    
    
    (30,075
    )Total owners deficit
    
    
    (21,001
    )$
    742,726
  108




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
 NOTE 1  NATURE OF OPERATIONS
     NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation and Minority Interest
  109




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
  Use of Estimates
   Cash Equivalents
  Receivables
  Property, Plant and Equipment
  110




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
 Impairment of Long-Lived Assets
  Fair Value of Financial Instruments
  Derivative Instruments
  Intangible Assets
  December 31, 2005
    
    
    EstimatedGross Carrying
    
    
    Accumulated
    
    
    Useful LivesAmount
    
    
    Amortization
    
    
    in YearsAmortized intangible assets:Customer contracts
    
    $
    23,990
    
    
    $
    (1,339
    )
    
    
    8Customer relationships
    
    
    32,960
    
    
    
    (742
    )
    
    
    20$
    56,950
    
    
    $
    (2,081
    )
  111




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
 Goodwill
  Federal Income Taxes
  Stock-Based Compensation
  Environmental Matters
  112




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
 Segment Information
  New Accounting Standards
   NOTE 3  ATLAS PIPELINE EQUITY OFFERINGS
  113




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
  NOTE 4  ATLAS PIPELINE CASH DISTRIBUTIONS
  Atlas Pipeline
    
    Total AtlasDate Atlas Pipeline
    
    
    
    
    
    Cash Distribution
    
    Pipeline CashCash Distribution
    
    
    
    
    
    per Limited
    
    Distribution ToPaid
    
    For Quarter Ended
    
    Partner Unit
    
    Limited Partners(in thousands)February 11, 2005
    
    December 31, 2004
    
    $
    0.720
    
    
    $
    4,006May 13, 2005
    
    March 31, 2005
    
    $
    0.750
    
    
    $
    4,173August 5, 2005
    
    June 30, 2005
    
    $
    0.770
    
    
    $
    6,055November 14, 2005
    
    September 30, 2005
    
    $
    0.810
    
    
    $
    6,382
  NOTE 5  PROPERTY, PLANT AND EQUIPMENT
  EstimatedDecember 31,
    
    
    Useful Lives2005
    
    
    in YearsPipelines, processing and compression facilities
    
    $
    443,729
    
    
    
    15  40Rights of way
    
    
    19,252
    
    
    
    20  40Buildings
    
    
    3,350
    
    
    
    40Furniture and equipment
    
    
    1,525
    
    
    
    3  7Other
    
    
    889
    
    
    
    3  10468,745Less  accumulated depreciation
    
    
    (23,679
    )$
    445,066
 114




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
  NOTE 6  OTHER ASSETS
  December 31,2005Deferred finance costs, net of accumulated amortization of $1,636
    
    $
    15,034Security deposits
    
    
    1,599Other
    
    
    68$
    16,701
  NOTE 7  ACQUISITIONS
 NOARK
  Cash and cash equivalents
    
    $
    16,215Accounts receivable
    
    
    11,091Prepaid expenses
    
    
    497Property, plant and equipment
    
    
    126,238Other assets
    
    
    1,515Intangible assets  customer contracts
    
    
    11,600Intangible assets  customer relationships
    
    
    15,700Goodwill
    
    
    49,088Total assets acquired
    
    
    231,944Accounts payable and accrued liabilities
    
    
    (12,514
    )Total debt
    
    
    (39,600
    )Total liabilities assumed
    
    
    (52,114
    )Net assets acquired
    
    
    179,830Less: Cash and cash equivalents acquired
    
    
    (16,215
    )Net cash paid for acquisition
    
    $
    163,615
 115




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
  Elk City
  Accounts receivable
    
    $
    5,587Other assets
    
    
    497Property, plant and equipment
    
    
    104,106Intangible assets  customer contracts
    
    
    12,390Intangible assets  customer relationships
    
    
    17,260Goodwill
    
    
    61,136Total assets acquired
    
    
    200,976Accounts payable and accrued liabilities
    
    
    (4,970
    )Net assets acquired
    
    $
    196,006
  NOTE 8  DERIVATIVE INSTRUMENTS
   116




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
   Natural Gas Liquids Fixed  Price Swaps
 Production
    
    
    
    
    Average
    
    
    Fair ValuePeriod
    
    Volumes
    
    
    Fixed Price
    
    
    Liability(1)Ended December 31,
    
    (gallons)
    
    
    (per gallon)
    
    
    (in thousands)2006
    
    
    40,068,000
    
    
    $
    0.683
    
    
    $
    (12,119
    )2007
    
    
    36,036,000
    
    
    
    0.717
    
    
    
    (9,157
    )2008
    
    
    33,012,000
    
    
    
    0.697
    
    
    
    (7,365
    )$
    (28,641
    )
 Natural Gas Fixed  Price Swaps
 Production
    
    
    
    
    Average
    
    
    Fair ValuePeriod
    
    Volumes
    
    
    Fixed Price
    
    
    Liability(3)Ended December 31,
    
    (MMBTU)(2)
    
    
    (per MMBTU)
    
    
    (in thousands)2006
    
    
    3,192,500
    
    
    $
    7.186
    
    
    $
    (110
    )2007
    
    
    1,080,000
    
    
    
    7.255
    
    
    
    (3,242
    )2008
    
    
    240,000
    
    
    
    7.270
    
    
    
    (605
    )$
    (3,957
    )
 Natural Gas Basis Swaps
 Production
    
    
    
    
    
    Average
    
    
    Fair ValuePeriod
    
    Volumes
    
    
    Fixed Price
    
    
    Asset(3)Ended December 31,
    

(MMBTU)(2)
    
    
    (per MMBTU)
    
    
    (in thousands)2006
    
    
    3,527,500
    
    
    $
    (0.521
    )
    
    $
    (473
    )2007
    
    
    1,080,000
    
    
    
    (0.535
    )
    
    
    3,5802008
    
    
    240,000
    
    
    
    (0.555
    )
    
    
    808$
    3,915
 117




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
 Crude Oil Fixed  Price Swaps
 Production
    
    
    
    
    
    Average
    
    
    Fair ValuePeriod
    
    Volumes
    
    
    Strike Price
    
    
    Liability(3)Ended December 31,
    
    (barrels)
    
    
    (per barrel)
    
    
    (in thousands)2006
    
    
    77,600
    
    
    $
    51.545
    
    
    $
    (881
    )2007
    
    
    80,400
    
    
    
    56.069
    
    
    
    (643
    )2008
    
    
    62,400
    
    
    
    59.267
    
    
    
    (223
    )$
    (1,747
    )Total net liability
    
    
    $
    (30,430
    )
 
 (1)
    
    Fair value based upon management estimates, including forecasted
forward NGL prices as a function of forward NYMEX natural gas and
light crude prices.(2)
    
    MMBTU represents million British Thermal Units.(3)
    
    Fair value based on forward NYMEX natural gas and light crude prices, as
applicable. NOTE 9  DEBT
  December 31,2005Atlas Pipeline Credit Facility
    
    $
    9,500Atlas Pipeline Senior Notes
    
    
    250,000NOARK Notes
    
    
    39,000Other debt
    
    
    125298,625Less current maturities
    
    
    (1,263
    )$
    297,362
 Atlas Pipeline Credit Facility
   118




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
   Atlas Pipeline Senior Notes
    119




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
 NOARK Notes
   Years Ended December 31:2006
    
    $
    1,2632007
    
    
    1,2622008
    
    
    1,2002009
    
    
    1,2002010
    
    
    10,700Thereafter
    
    
    283,000$
    298,625
 NOTE 10  COMMITMENTS AND CONTINGENCIES
  Years Ended December 31:2006
    
    $
    1,7692007
    
    
    8532008
    
    
    8262009
    
    
    3732010
    
    
    7Thereafter
    
    
    $
    3,828
  120




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
   NOTE 11  FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
     NOTE 12  LONG-TERM INCENTIVE PLAN
 Long-Term
Incentive Plan
  121




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
   Incentive
Compensation Agreements
   NOTE 13  RELATED PARTY TRANSACTIONS
   122




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##### 



ATLAS PIPELINE PARTNERS GP, LLC
NOTES TO CONSOLIDATED BALANCE SHEET
   NOTE 14  OPERATING SEGMENT INFORMATION
  December 31,2005Balance sheetTotal assets:Mid-Continent
    
    $
    668,782Appalachia
    
    
    43,428Corporate other
    
    
    30,516$
    742,726Goodwill:Mid-Continent
    
    $
    109,141Appalachia
    
    
    2,305$
    111,446
 123