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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

OR


[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 1-4998

ATLAS PIPELINE PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

Delaware
(State of other jurisdiction of
incorporation or organization)		     23-3011077
(I.R.S. Employer
Identification No.)
       
311 Rouser Road
Moon Township, Pennsylvania
(Address of principal executive office)		     15108
(Zip code)
       

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

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]     No [ ]

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [X]    No [ ]

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT
ON FORM 10-Q


PAGE
PART I FINANCIAL INFORMATION  
     
      Item 1.       Financial Statements  
     
         Consolidated Balance Sheets as of June 30, 2004 (Unaudited) and
               December 31, 2003 3
     
         Consolidated Statements of Income for the Three and Six Months Ended
                June 30, 2004 and 2003 (Unaudited) 4
     
         Consolidated Statement of Partners' Capital for the Six Months Ended
               June 30, 2004 (Unaudited) 5
     
         Consolidated Statements of Cash Flows for the Six Months Ended
               June 30, 2004 and June 30, 2003 (Unaudited) 6
     
         Notes to Consolidated Financial Statements - June 30, 2004 (Unaudited) 7 - 13
     
      Item 2.        Management's Discussion and Analysis of Financial Condition and Results
               of Operations 14 - 22
     
      Item 3.       Quantitative and Qualitative Disclosures About Market Risk 23
     
      Item 4.       Controls and Procedures 24
     
PART II OTHER INFORMATION
     
      Item 4.       Submission of Matters to a Vote of Security Holders 25
     
      Item 6.       Exhibits and Reports on Form 8-K 25
     
SIGNATURES   26

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

June 30,
2004
 December 31,
2003
(Unaudited)  
                                       ASSETS            
  Current assets:  
      Cash and cash equivalents   $ 37,380,400   $ 15,078,100  
      Accounts receivable     5,700     12,300  
      Prepaid expenses     238,900     66,600  
        Total current assets     37,625,000     15,157,000  
  Property and equipment:  
      Gas gathering and transmission facilities     39,435,500     37,018,200  
      Less - accumulated depreciation     (8,479,600 )   (7,390,100 )
         Net property and equipment     30,955,900     29,628,100  
   
  Goodwill (net of accumulated amortization of $285,300)    2,304,600    2,304,600  
   
  Other assets (net of accumulated amortization of $182,000  
      and $106,100)       5,084,200     2,422,400  
    $ 75,969,700   $ 49,512,100  
                          LIABILITIES AND PARTNERS' CAPITAL  
  Current liabilities:  
      Accounts payable and accrued liabilities   $ 804,800   $ 520,900  
      Accounts payable - affiliates    3,088,400    1,672,900  
      Distribution payable    3,654,300    3,073,200  
        Total current liabilities    7,547,500    5,267,000  
  Commitment and contingencies    --    --  
  Partners' capital (deficit):  
      Common unitholders, 3,463,659 and 2,713,659 units outstanding       67,764,400     43,551,400  
      Subordinated unitholder, 1,641,026 units outstanding    (151,000 )  354,200  
      General partner    808,800    339,500  
        Total partners' capital     68,422,200     44,245,100  
      $ 75,969,700   $ 49,512,100  
  




See accompanying notes to consolidated financial statements



3

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)


Three Months Ended
June 30,
 Six Months Ended
June 30,
2004
 2003
 2004
 2003
Revenues:                    
    Transportation and compression   $ 4,468,400   $ 4,325,000   $ 8,678,700   $ 7,653,400  
    Interest income and other    80,500    23,300    116,100    24,400  
      Total revenues    4,548,900    4,348,300    8,794,800    7,677,800  
    
Costs and expenses:  
    Transportation and compression    537,900    615,800    1,144,700    1,224,000  
    General and administrative    582,500    546,600    1,163,600    865,700  
    Depreciation and amortization    592,000    421,000    1,110,700    827,700  
    Interest expense    63,800    79,000    126,500    162,500  
      Total costs and expenses    1,776,200    1,662,400    3,545,500    3,079,900  
Net income   $ 2,772,700   $ 2,685,900   $ 5,249,300   $ 4,597,900  
Net income - limited partners   $ 2,359,200   $ 2,479,400   $ 4,480,700   $ 4,259,200  
Net income - general partner   $ 413,500   $ 206,500   $ 768,600   $ 338,700  
Basic net income per limited partner unit   $ .47   $ .63   $ .95   $ 1.18  
Weighted average limited partner  
    units outstanding - basic    5,038,751    3,934,493    4,696,718    3,600,196  
Diluted net income per limited partner unit   $ .47   $ .63   $ .95   $ 1.18  
Weighted average limited partner  
    units outstanding - diluted    5,055,262    3,934,493    4,705,939    3,600,196  




See accompanying notes to consolidated financial statements



4

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(Unaudited)

Number of Limited
Partner Units
 General Total
Partners'
Capital
 Common
 Subordinated
 Common
 Subordinated
 Partner
 (Deficit)
Balance at January 1, 2004      2,713,659    1,641,026   $ 43,551,400   $ 354,200   $ 339,500   $ 44,245,100  
Issuance of common units,
    net of offering costs		    750,000    --    25,187,800    --    --    25,187,800  
Capital contribution    --    --    --    --    512,700    512,700  
Distribution to partners    --    --    (1,710,700 )  (1,033,800 )  (373,900 )  (3,118,400 )
Distribution payable    --    --    (2,182,400 )  (1,033,800 )  (438,100 )  (3,654,300 )
Net income    --    --    2,918,300    1,562,400    768,600    5,249,300  
Balance at June 30, 2004    3,463,659    1,641,026   $ 67,764,400   $ (151,000 ) $ 808,800   $ 68,422,200  








See accompanying notes to consolidated financial statements



5

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited)


June 30,
2004
 June 30,
2003
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income   $ 5,249,300   $ 4,597,900  
Adjustments to reconcile net income to net cash  
  provided by operating activities:  
    Depreciation and amortization    1,110,700    827,700  
    Loss on disposal of fixed assets    7,800    --  
    Amortization of deferred finance costs    75,900    56,200  
Change in operating assets and liabilities:  
    Increase in accounts receivable and prepaid expenses     (459,500 )   (2,700 )
    Increase (decrease) accounts payable and accrued liabilities    283,900    (447,700 )
    Increase in accounts payable - affiliates      1,415,500     --  
      Net cash provided by operating activities     7,683,600     5,031,400  
CASH FLOWS FROM INVESTING ACTIVITIES:  
Increase in other assets     (2,078,600 )   --  
Proceeds from disposal of fixed assets     75,000     --  
Capital expenditures    (2,521,300 )  (2,154,400 )
      Net cash used in investing activities     (4,524,900 )   (2,154,400 )
CASH FLOWS FROM FINANCING ACTIVITIES:  
Borrowings on revolving credit facility    --    2,000,000  
Repayments of revolving credit facility    --    (8,500,000 )
Capital contributions    512,700    510,700  
Issuance of common units, net of offering costs    25,187,800    25,255,300  
Distributions paid to partners    (6,191,600 )  (3,835,500 )
Increase in other assets    (365,300 )  (279,900 )
      Net cash provided by financing activities    19,143,600    15,150,600  
Increase in cash and cash equivalents    22,302,300    18,027,600  
Cash and cash equivalents, beginning of period    15,078,100    1,858,600  
Cash and cash equivalents, end of period    $ 37,380,400   $ 19,886,200  
Supplemental Cash Flow Information:  
Cash paid during the period for interest    $ 75,800   $ 79,100  




See accompanying notes to consolidated financial statements



6

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

        The consolidated financial statements of Atlas Pipeline Partners, L.P. ("the Partnership") and its wholly-owned subsidiaries as of June 30, 2004 and for the three and six month periods ended June 30, 2004 and 2003 are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2003. The results of operations for the six month period ended June 30, 2004 may not necessarily be indicative of the results of operations for the full year ending December 31, 2004.

        Certain reclassifications have been made to the consolidated financial statements for the three and six month periods ended June 30, 2003 to conform to the presentation for the three and six month periods ended June 30, 2004.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        In addition to matters discussed below in this note, the Partnership’s significant accounting policies are detailed in its audited consolidated financial statements and notes thereto in the Partnership’s annual report on Form 10-K for the year ended December 31, 2003 filed with the Securities and Exchange Commission.

Fair Value of Financial Instruments

        For cash and cash equivalents, receivables and payables, the carrying amounts approximate fair values because of the short maturities of these items.

Net Income Per Unit

        Basic net income per limited partner unit is determined by dividing net income, after deducting the general partner’s 2% and incentive interest, by the weighted average number of outstanding common units and subordinated units. Net income per unit — diluted is determined by dividing net income by the sum of the weighted average number of common and subordinated units outstanding and dilutive potential units during the period. Dilutive potential units consist of common units issuable under the terms of the Partnership’s Long-Term Incentive Plan (see Note 8).



7

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
JUNE 30, 2004
(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)

Net Income Per Unit — (Continued)

        The following table presents a reconciliation of the components used in the computation of net income per unit-basic and net income per unit-diluted for the periods indicated:


Three Months Ended
June, 30
 Six Months Ended
June 30,
2004
 2003
 2004
 2003
Net income - limited partners     $ 2,359,200   $ 2,479,400   $ 4,480,700   $ 4,259,200  
Basic average limited partner units outstanding    5,038,751    3,934,493    4,696,718    3,600,196  
Dilutive effect of phantom units (see Note 5)       16,511     --     8,721     --  <