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Operationally, ATP continued to focus on its Telemark Hub. Since the end of the second quarter, 2009 ATP:
-- Discovered additional pay sands at Mississippi Canyon ("MC") 941 in the Telemark Hub;
-- On November 1, 2009, ATP's new deepwater drilling and production facility, the ATP Titan, sailed out of dry dock and should arrive on location at MC 941 next week.
During the nine months ended September 30, 2009, ATP incurred $339.1 million of capital expenditures toward its capital expenditure budget. Additionally, ATP's vendors agreed to defer payment of $23.6 million of property development costs and contributed services in exchange for net profits interests in Telemark totaling $101.7 million during the year. Total capital expenditures during the period were $559.6 million, including capitalized interest of approximately $71.5 million and foreign exchange gains and other noncash additions totaling $23.5 million. These costs were incurred primarily at the Telemark Hub for the activities mentioned above, the Gomez Hub and the Canyon Express Hub in the Gulf of Mexico and the Cheviot development in the North Sea. We are revising our 2009 estimated capital expenditure budget, which excludes capitalized interest, to a range of $400 to $450 million from the previously announced range of $350 million to $400 million.
From a financial standpoint, ATP was extremely active with asset monetization, capital market transactions and financing activities. Since the end of the second quarter of 2009 ATP:
-- Executed an agreement with its contractor to defer $99 million of Octabuoy hull construction costs without delaying the construction schedule;
-- Realized $74.5 million, net of fees and expenses, from monetizing both the oil and natural gas pipelines that service ATP's Gomez Hub;
-- Conveyed an overriding royalty interest for $15 million;
-- Raised $93.4 million by selling common stock and $135.5 million by selling perpetual convertible preferred stock, net of fees and expenses;
-- Amended its senior secured term loan facilities to improve financial flexibility;
-- Reduced outstanding Term Loans by $112.6 million since June 30, 2009.
ATP had working capital of approximately $73.2 million as of September 30, 2009, an increase of approximately $36.7 million from December 31, 2008. Working capital, as defined in our Senior Secured Credit Facility, was $235.2 million as of September 30, 2009, compared to $72.6 million as of December 31, 2008. ATP had cash of $317.1 million at September 30, 2009, compared to $215.0 million at December 31, 2008.
ATP amended its agreement with COSCO Nantong Shipyard Ltd. ("COSCO") of China to defer $99 million of primarily 2010 construction costs for the Octabuoy hull. This amendment will keep construction of the Octabuoy hull on pace for a 2011 delivery and facilitates ATP's objective to achieve first oil production at Cheviot in 2012.
ATP executed an asset sale agreement in the third quarter of 2009 for net proceeds of $74.5 million for the oil and gas pipelines that service the Gomez Hub at MC 711. ATP used $42.2 million of net proceeds from this asset sale to reduce indebtedness. This transaction has been accounted for as a financing obligation in our financial statements.
ATP executed an asset sale agreement in October 2009 for net proceeds of $15.0 million for a dollar-denominated limited-term override in the Gomez Hub. ATP used $10.9 million of net proceeds from this asset sale to reduce indebtedness.
On September 29, 2009, ATP closed a public offering of 5.3 million shares of its common stock at a public offering price of $18.50 per share and a private placement of a new series of 8.0% convertible perpetual preferred stock. Net proceeds from the offerings were approximately $228.9 million. In the fourth quarter, ATP sold an additional 515,000 shares at $18.50 per share for $9.1 million in net proceeds pursuant to the underwriters' overallotment option. ATP used $59.5 million of net proceeds from these equity offerings to reduce indebtedness.
On November 2, 2009, ATP added flexibility to its Senior Secured Credit Facility by widening its covenants for the reporting periods from December 31, 2009 through December 31, 2010. General terms of the amendment expand the Net Debt to EBITDAX ratio from 3.0x to 4.0x, the EBITDAX to Interest ratio from 2.5x to 2.0x and the current ratio from 1.0x to 0.8x. During this period, the spread on the rate for ATP's Term Loans will increase by 2.75% through December 31, 2010. Beginning January 1, 2011, the spread on the rate for ATP's Term Loans will decrease by 1.75% through final maturity in July 2014. ATP paid an initial fee to the lenders of a half percent at closing.
ATP's selected financial data schedule included within this press release contains additional information on the company's activities for the third quarter 2009 and comparable period in 2008.
Selected Financial Data Three Months Ended Nine Months Ended
(Unaudited) September 30, September 30,
2009 2008 2009 2008
Production
Natural gas (MMcf) 3,689 7,267 12,113 29,080
Gulf of Mexico 2,925 3,794 9,811 15,734
North Sea 764 3,473 2,302 13,346
Oil and condensate (MBbls) 792 821 2,605 3,857
Gulf of Mexico 791 817 2,598 3,829
North Sea 1 4 7 28
Natural gas, oil and condensate
MMcfe 8,438 12,190 27,740 52,219
MBoe 1,406 2,032 4,623 8,703
Average Prices (1)
Natural gas (per Mcf) $ 3.92 $ 7.32 $ 4.33 $ 8.20
Gulf of Mexico 3.54 9.39 4.08 9.55
North Sea 5.38 5.06 5.39 6.60
Oil and condensate (per Bbl) 64.28 64.01 53.49 72.18
Natural gas, oil and condensate
Per Mcfe $ 7.75 $ 8.67 $ 6.91 $ 9.90
Per Boe 46.50 52.02 41.46 59.40
Deferred Revenue Recognized ($000's)
Natural gas $ 1,789 $ 2,434 $ 6,045 $ 3,843
Oil and condensate 7,931 10,161 26,350 15,608
Total 9,720 12,595 32,395 19,451
Gain (Loss) on Oil and Gas Derivatives ($000's)
Natural gas contracts
Realized or settled during the period $ 2,801 $ (3,605 ) $ 39,627 $ (3,605 )
Unrealized (557 ) 17,261 (17,209 ) (16,718 )
Oil and condensate contracts
Realized or settled during the period (1,289 ) 19,032 (1,744 ) 16,713
Unrealized (4,413 ) 8,336 (5,675 ) (5,509 )
Total (3,458 ) 41,024 14,999 (9,119 )
(1) Includes the effect of cash flow hedges in 2008. Effective
January 1, 2009, four U.K. contracts are accounted for as hedges and
aggregate net settlements of $0.9 million and $1.5 million are
reflected in the average oil and gas prices noted above for the
three and nine months ended September 30, 2009, respectively.
3rd Quarter 2009 Conference Call
ATP Oil & Gas Corporation (NASDAQ:ATPG) will host a live conference call on Thursday, November 5th at 11:00 am CT to discuss the company's third quarter results followed by a Q&A session.
Date: Thursday, November 5, 2009
Time: 12:00 pm ET; 11:00 am CT; 10:00 am MT and 9:00 am PT
ATP invites interested persons to listen to the live webcast on the company's website at www.atpog.com. Phone participants should dial 800-263-0877. A digital replay of the conference call will be available at 888-203-1112, ID# 7814540, for a period of 24 hours beginning at 1:00 pm CT, and the webcast will be archived for 30 business days at www.atpog.com.
About ATP Oil & Gas Corporation
ATP Oil & Gas is an international offshore oil and gas development and production company with operations in the Gulf of Mexico and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market. For more information about ATP Oil & Gas Corporation, visit www.atpog.com.
Forward-looking Statements
Certain statements included in this news release are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. ATP cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those ATP expects include changes in natural gas and oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as ATP's ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business. More information about the risks and uncertainties relating to ATP's forward-looking statements are found in the Company's SEC filings.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
September 30, December 31,
2009 2008
Assets
Current assets:
Cash and cash equivalents $ 317,129 $ 214,993
Restricted cash 7,534 -
Accounts receivable (net of allowance of $290 and $352, respectively) 50,804 93,915
Deferred tax asset 35,371 39,150
Derivative asset 2,755 15,366
Other current assets 24,571 11,954
Total current assets 438,164 375,378
Oil and gas properties:
Oil and gas properties (using the successful efforts method of
accounting):
Proved properties 3,349,352 2,802,315
Unproved properties 15,061 14,705
3,364,413 2,817,020
Less accumulated depletion, impairment and amortization (1,069,008 ) (944,817 )
Oil and gas properties, net 2,295,405 1,872,203
Furniture and fixtures (net of accumulated depreciation) 391 470
Deferred financing costs, net 14,517 13,493
Other assets, net 14,628 14,066
Total assets $ 2,763,105 $ 2,275,610
Liabilities and Equity
Current liabilities:
Accounts payable and accruals $ 199,399 $ 277,914
Current maturities of term loans 109,949 10,500
Asset retirement obligation 30,156 32,854
Derivative liability 5,648 8,114
Deferred tax liability 27 -
Other current liabilities 19,789 9,537
Total current liabilities 364,968 338,919
Term loans 1,203,265 1,356,130
Other long-term obligations 189,712 2,582
Asset retirement obligation 111,138 99,254
Deferred tax liability 99,219 101,953
Derivative liability 3,730 1,194
Deferred revenue 26,834 59,229
Total liabilities 1,998,866 1,959,261
Temporary equity-redeemable noncontrolling interest 139,598 -
Shareholders' equity:
Preferred stock, $0.001 par value, at liquidation value 140,000 -
Common stock, $0.001 par value 50 36
Additional paid-in capital 563,558 400,334
Retained earnings 17,855 29,644
Accumulated other comprehensive loss (95,911 ) (112,754 )
Treasury stock, at cost (911 ) (911 )
Total shareholders' equity 624,641 316,349
Total equity 764,239 316,349
Total liabilities and equity $ 2,763,105 $ 2,275,610
CONSOLIDATED INCOME STATEMENTS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Oil and gas revenues $ 75,010 $ 118,347 $ 224,163 $ 536,193
Other - - 13,664 897
75,010 118,347 237,827 537,090
Costs and operating expenses:
Lease operating 22,891 24,723 60,463 73,111
Exploration - 48 267 48
General and administrative 6,945 9,212 25,153 27,279
Depreciation, depletion and amortization 37,460 52,825 120,433 222,097
Impairment of oil and gas properties - - 8,748 -
Accretion of asset retirement obligation 2,995 4,211 8,940 12,792
Loss on abandonment 1,936 896 2,949 2,309
Other, net 408 (149 ) 696 (259 )
72,635 91,766 227,649 337,377
Income from operations 2,375 26,581 10,178 199,713
Other income (expense):
Interest income 182 1,079 555 2,951
Interest expense (net) (9,000 ) (26,606 ) (31,797 ) (78,969 )
Derivative income (expense) (3,458 ) 40,963 14,999 (9,187 )
Loss on extinguishment of debt - - - (24,220 )
(12,276 ) 15,436 (16,243 ) (109,425 )
Income (loss) before income taxes (9,901 ) 42,017 (6,065 ) 90,288
Income tax (expense) benefit:
Current (376 ) 6,710 (22 ) (3,648 )
Deferred 4,770 (12,244 ) 4,116 (15,092 )
Total 4,394 (5,534 ) 4,094 (18,740 )
Net income (loss) (5,507 ) 36,483 $ (1,971 ) 71,548
Less net income attributable to the redeemable noncontrolling (3,552 ) - (9,818 ) -
interest
Net income (loss) attributable to shareholders (9,059 ) 36,483 (11,789 ) 71,548
Less preferred stock dividends (62 ) - (62 ) -
Net income (loss) attributable to common shareholders $ (9,121 ) $ 36,483 $ (11,851 ) $ 71,548
Net income (loss) per share attributable to common shareholders:
Basic $ (0.20 ) $ 1.03 $ (0.30 ) $ 2.02
Diluted $ (0.20 ) $ 1.02 $ (0.30 ) $ 1.99
Weighted average shares outstanding:
Basic 44,520 35,452 39,038 35,441
Diluted 44,520 35,815 39,038 35,871
CONSOLIDATED CASH FLOW DATA
(In Thousands)
(Unaudited)
Nine Months Ended
September 30,
2009 2008
Restated
Cash flows from operating activities:
Net income $ (1,971 ) $ 71,548
Adjustments to operating activities 145,670 292,852
Changes in assets and liabilities (18,547 ) 36,303
Net cash provided by operating activities 125,152 400,703
Cash flows from investing activities:
Additions to oil and gas properties (464,983 ) (691,531 )
Additions to furniture and fixtures (126 ) (129 )
Proceeds from disposition of oil and gas properties - 82,644
Decrease in restricted cash (7,534 ) 13,864
Net cash used in investing activities (472,643 ) (595,152 )
Cash flows from financing activities:
Proceeds from term loans - 1,608,750
Principal payments of term loans (61,289 ) (1,404,278 )
Deferred financing costs - (15,523 )
Proceeds from sale of noncontrolling interest 148,751 -
Partner distributions (15,408 ) -
Pipeline transaction 74,511 -
Net profits interest payments (1,211 ) (13,602 )
Sale of common stock, net of issuance costs 161,592 -
Sale of convertible preferred stock, net of issuance costs 135,549 -
Exercise of stock options 83 33
Net cash provided by financing activities 442,578 175,380
Effect of exchange rate changes on cash 7,049 (2,022 )
Net increase (decrease) in cash and cash equivalents 102,136 (21,091 )
Cash and cash equivalents, beginning of period 214,993 199,449
Cash and cash equivalents, end of period $ 317,129 $ 178,358
Hedges and Derivatives Contracts
2010
4Q FY 1Q 2Q 3Q 4Q FY
Gulf of Mexico
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) 1,912 1,912 1,800 905 910 910 4,525
Price ($/MMBtu) $ 4.93 $ 4.93 $ 5.37 $ 5.73 $ 5.73 $ 5.73 $ 5.58
Crude Oil
Volumes (MBbls) 460 460 450 455 184 184 1,273
Price ($/Bbl) $ 67.60 $ 67.60 $ 67.60 $ 67.60 $ 70.00 $ 70.00 $ 68.29
Reparticipation calls ($/Bbl) $ 95.00 $ 95.00 $ 95.00 $ 95.00 $ 110.00 $ 110.00 $ 99.34
Collars
Natural Gas
Volumes (MMMBtu) 460 460 450 1,365 1,380 1,380 4,575
Floor Price ($/MMBtu) $ 4.00 $ 4.00 $ 4.00 $ 4.75 $ 4.75 $ 4.75 $ 4.68
Ceiling Price ($/MMBtu) $ 7.00 $ 7.00 $ 7.00 $ 7.95 $ 7.95 $ 7.95 $ 7.86
Puts
Crude Oil
Volumes (MBbls) 460 460 90 91 92 92 365
Floor Price ($/Bbl) $ 29.75 $ 29.75 $ 24.70 $ 24.70 $ 24.70 $ 24.70 $ 24.70
North Sea
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) 759 759 270 273 276 276 1,095
Price ($/MMBtu)(1) $ 6.50 $ 6.50 $ 7.26 $ 7.26 $ 7.26 $ 7.26 $ 7.26
Collars
Natural Gas
Volumes (MMMBtu) 450 455 460 460 1,825
Floor Price ($/MMBtu)(1) $ 6.27 $ 6.27 $ 6.27 $ 6.27 $ 6.27
Ceiling Price ($/MMBtu)(1) $ 9.41 $ 9.41 $ 9.41 $ 9.41 $ 9.41
The above are ATP's outstanding financial and physical commodity
contracts.
Additional hedges, derivatives and fixed price contracts, if any,
will be announced during the year.
(1) Assumes USD $1.65 to GBP 1.00 currency translation rate.
2011
1Q 2Q 3Q 4Q FY
Gulf of Mexico
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu)
Price ($/MMBtu)
Crude Oil
Volumes (MBbls) 90 91 181
Price ($/Bbl) $ 72.00 $ 72.00 $ 72.00
Reparticipation calls ($/Bbl) $ 115.00 $ 115.00 $ 115.00
Collars
Natural Gas
Volumes (MMMBtu) 1,350 1,350
Floor Price ($/MMBtu) $ 4.75 $ 4.75
Ceiling Price ($/MMBtu) $ 7.95 $ 7.95
Puts
Crude Oil
Volumes (MBbls)
Floor Price ($/Bbl)
North Sea
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu)
Price ($/MMBtu)(1)
Collars
Natural Gas
Volumes (MMMBtu) 270 270
Floor Price ($/MMBtu)(1) $ 6.27 $ 6.27
Ceiling Price ($/MMBtu)(1) $ 9.41 $ 9.41
The above are ATP's outstanding financial and physical commodity
contracts.
Additional hedges, derivatives and fixed price contracts, if any,
will be announced during the year.
(1) Assumes USD $1.65 to GBP 1.00 currency translation rate.
SOURCE: ATP Oil & Gas Corporation
ATP Oil & Gas Corporation, Houston Chairman and CEO T. Paul Bulmahn, 713-622-3311 or Chief Financial Officer Albert L. Reese Jr., 713-622-3311 www.atpog.com
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