HOUSTON--(Business Wire)--
ATP Oil & Gas Corporation (NASDAQ:ATPG) today announced second
quarter 2008 results and hedging update.
Highlights include:
-- A production increase of 26% over second quarter 2007;
-- An increase in oil and gas revenues of 45% over second quarter
2007;
-- The sale of an interest in our Gomez Hub for $82.0 million
representing 4.5% of our Gomez Hub proved reserves at December
31, 2007;
-- The acquisition of proved reserves at Clipper for a minimal
upfront investment;
-- The refinancing of our debt, significantly extending the
maturity; and
-- The addition in July 2008 of costless oil collars for 2010 and
2011 with $105 per Bbl floor prices and ceiling prices ranging
from $187 to $197 per Bbl.
Oil and gas production increased 26% to 3.1 MMBoe (18.5 Bcfe) for
the second quarter of 2008, compared to 2.4 MMBoe (14.6 Bcfe) for the
second quarter of 2007. Oil production was 1.4 MMBbls and natural gas
production was 10.0 Bcf for the second quarter of 2008, compared to
1.0 MMBbls and 8.4 Bcfe for the second quarter of 2007. Oil and gas
production increased 31% to 6.7 MMBoe (40.0 Bcfe) for the six months
ended June 30, 2008, compared to 5.1 MMBoe (30.5 Bcfe) for the six
months ended June 30, 2007.
Revenues from oil and gas production increased 45% to $191.8
million for the second quarter of 2008, compared to $132.2 million for
the second quarter of 2007. Revenues from oil and gas production
increased 51% to $417.8 million for the six months ended June 30,
2008, compared to $276.9 million for the six months ended June 30,
2007.
ATP recorded a net loss of $11.8 million or $0.33 per basic and
diluted share for the second quarter of 2008, compared to net income
of $6.1 million or $0.20 per basic and diluted share for the second
quarter of 2007. ATP recorded net income of $35.1 million or $0.98 per
basic share and $0.97 per diluted share for the six months ended June
30, 2008, compared to $33.6 million or $1.12 per basic share and $1.10
per diluted share for the six months ended June 30, 2007.
Results for the second quarter of 2008 were impacted by two items
that research analysts typically exclude from their published
estimates, a charge related to the extinguishment of our prior debt of
$24.2 million ($15.7 million after tax) and a net unrealized loss on
derivatives no longer accounted for as hedges of $49.2 million ($26.8
million after tax). The $24.2 million charge related to the costs of
our previous debt which was required to be written off as a result of
the closing of a new senior secured term loan facility which extended
the maturity of ATP's long-term debt and will provide flexibility with
regard to the announced asset monetization program. Net income before
these items, a non-GAAP measure, in the second quarter of 2008 was
$30.8 million or $0.87 per basic share and $0.86 per diluted share.
The same metric in the second quarter of 2007 is $11.9 million or
$0.40 per basic and $0.39 per diluted share. A non-GAAP reconciliation
is provided near the end of this press release.
In the second quarter of 2008, ATP sold a limited term overriding
royalty interest at its Gomez Hub in the Gulf of Mexico for $82.0
million representing 5.8 Bcfe of proved reserves from this property.
While this transaction is considered a sale for accounting purposes,
the relevant guidance prevents ATP from recognizing a gain on this
transaction. As such, the sale proceeds are recorded as deferred
revenue on the balance sheet and will be recognized as oil and gas
revenues as the reserves attributable to the sold interest are
produced. During the second quarter of 2008 the production
attributable to the sold interest was 0.5 Bcfe. The related reserves
attributable to the sold interest have been removed from ATP's proved
reserves and the production will be excluded from ATP's reported
production.
Due to the sale, ATP's forecasted production from the Gomez Hub
has been reduced accordingly. In addition, as a result of changes in
timing of forecasted production related to the U.K. derivatives,
certain contracts were restructured. In each case the derivative
contracts related to the previously forecasted production no longer
qualify for hedge accounting treatment and, as a result, unrealized
losses previously deferred were charged to earnings in the current
period. Accordingly, during the second quarter of 2008, ATP recorded
derivatives expense of $50.2 million, which consists of the previously
noted $49.2 million noncash unrealized loss and a $1.0 million
realized loss. Subsequent changes in the fair value of these
derivatives will be recorded on a mark-to-market basis in the income
statement. In conjunction with changes in the timing of forecasted
production in the UK, ATP unwound 2.2 Bcfe of natural gas swaps with
an average price of $7.35 scheduled from October 2008 through March
2009, and replaced them with 3.1 Bcfe of natural gas swaps with an
average price of $9.28 from April 2009 through March 2010.
During the second quarter of 2008, ATP acquired a 55% working
interest in Clipper (Green Canyon Blocks 299 and 300), which includes
proved reserves. ATP acquired a 100% working interest in Mississippi
Canyon Block 304, expanding the Canyon Express Hub.
ATP has expanded its oil hedging program to include costless
collars. These are listed below. A detailed hedge and derivative
schedule is provided near the end of this press release.
Gulf of Mexico Oil Collars
-- 3,000 Bbls/day calendar year 2010, $105/Bbl (floor) to $195 -
$197/Bbl (ceiling)
-- 2,000 Bbls/day calendar year 2011, $105/Bbl (floor) to $187 -
$188/Bbl (ceiling)
ATP's selected operating statistics and financial information,
included within this press release, contain additional information on
the company's activities for the second quarter of 2008 and the
comparable period of 2007.
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*T
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2008 2007 2008 2007
------------------ -----------------
Selected Operating Statistics
(Unaudited)
Production
Natural gas (MMcf) 9,969 8,426 21,813 18,250
Gulf of Mexico 5,475 6,937 11,940 13,074
North Sea 4,494 1,489 9,873 5,176
Oil and condensate (MBbls) 1,414 1,027 3,036 2,039
Gulf of Mexico 1,402 1,024 3,012 2,029
North Sea 12 3 24 10
Natural gas equivalents (MMcfe) 18,455 14,590 40,029 30,486
Gulf of Mexico 13,892 13,082 30,014 25,251
North Sea 4,564 1,508 10,015 5,235
Average Prices (includes effect of
cash flow hedges)
Natural gas (per Mcf) $ 7.93 $ 8.24 $ 8.49 $ 8.74
Gulf of Mexico 9.99 8.47 9.61 8.47
North Sea 5.42 7.19 7.14 9.40
Oil and condensate (per Bbl) 74.89 60.80 74.39 57.48
Natural gas, oil and condensate
(per Mcfe) 10.02 9.05 10.26 9.07
Other Expenses, per Mcfe
Lease operating expense $ 1.29 $ 1.38 $ 1.21 $ 1.35
Gulf of Mexico 1.29 1.25 1.19 1.26
North Sea 1.27 2.45 1.28 1.77
Depreciation, depletion and
amortization 4.33 3.61 4.23 3.48
Gulf of Mexico 3.59 3.52 3.53 3.32
North Sea 6.57 4.32 6.31 4.22
Selected Unaudited Financial Data
(Unaudited)
(In Thousands, Except Per Share
Data)
Oil and gas revenues (1) $191,809 $131,919 $417,846 $276,593
Net income (loss) (11,780) 6,125 35,065 33,559
Net income (loss) per share:
Basic $ (0.33) $ 0.20 $ 0.98 $ 1.12
========= ======== ======== ========
Diluted $ (0.33) $ 0.20 $ 0.97 $ 1.10
========= ======== ======== ========
Weighted average shares
outstanding:
Basic 35,440 30,058 35,631 30,031
========= ======== ======== ========
Diluted 35,440 30,639 36,072 30,612
========= ======== ======== ========
__________________
(1) Includes settlements on derivatives qualifying for hedge
accounting.
*T
2nd Quarter 2008 Conference Call
ATP Oil & Gas Corporation (NASDAQ:ATPG) will host a conference
call on Thursday, August 7 at 10:00 am central time to discuss the
company's second quarter results, followed by a Q&A session.
Date: Thursday, August 7, 2008
Time: 11:00 am ET;10:00 am CT; 9:00 am MT and 8:00 am PT
ATP invites interested persons to listen to the live Internet
webcast on the company's website, www.atpog.com, linking through the
Investor Info page and the Conference Calls link. Phone participants
should dial (800) 524-3357. A digital replay of the conference call
will be available at (888) 203-1112, ID number 4053448, for a period
of 24 hours beginning at 12:00 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 focused on development and production of oil and
natural gas 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.
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*T
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2008 2007
----------- ------------
Assets
Current assets:
Cash and cash equivalents $ 278,323 $ 199,449
Restricted cash 14,027 13,981
Accounts receivable (net of allowances of
$382 and $382) 92,255 127,891
Deferred tax assets 43,312 84,110
Derivative assets 40 1,286
Other current assets 13,404 15,934
----------- ------------
Total current assets 441,361 442,651
----------- ------------
Oil and gas properties:
Oil and gas properties (using the
successful efforts method of accounting) 2,977,575 2,556,938
Less: Accumulated depletion, impairment and
amortization (897,550) (726,358)
----------- ------------
Oil and gas properties, net 2,080,025 1,830,580
----------- ------------
Furniture and fixtures, net 700 860
Derivative assets 1,315 673
Deferred tax assets 25,134 -
Deferred financing costs, net 15,348 19,873
Other assets, net 12,681 12,496
----------- ------------
Total assets $2,576,564 $2,307,133
=========== ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 188,642 $ 270,557
Current maturities of long-term debt 10,500 12,165
Asset retirement obligation 19,007 28,194
Derivative liabilities 54,397 11,335
Deferred tax liabilities 476 -
Other current liabilities 13,650 23,512
----------- ------------
Total current liabilities 286,672 345,763
Long-term debt 1,598,365 1,391,846
Asset retirement obligation 169,480 158,577
Deferred tax liabilities 64,963 85,256
Derivative Liabilities 34,126 13,242
Deferred revenue 75,144 -
Other liabilities 2,582 2,583
----------- ------------
Total liabilities 2,231,332 1,997,267
----------- ------------
Shareholders' equity:
Preferred stock: $0.001 par value - -
Common stock: $0.001 par value 36 36
Additional paid-in capital 394,072 388,250
Accumulated deficit (56,996) (92,061)
Accumulated other comprehensive income 9,031 14,552
Treasury stock, at cost (911) (911)
----------- ------------
Total shareholders' equity 345,232 309,866
----------- ------------
Total liabilities and shareholders'
equity $2,576,564 $2,307,133
=========== ============
*T
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CONSOLIDATED INCOME STATEMENTS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
2008 2007 2008 2007
--------- --------- ---------- ---------
Oil and gas revenues $191,809 $132,153 $ 417,846 $276,902
Other revenues - - 897 1,598
--------- --------- ---------- ---------
Total revenues 191,809 132,153 418,743 278,500
--------- --------- ---------- ---------
Costs and operating expenses:
Lease operating 23,770 20,105 48,388 41,174
Exploration - 10,605 - 11,336
General and administrative 8,831 6,572 18,067 15,340
Depreciation, depletion and
amortization 79,873 52,612 169,272 106,012
Impairment of oil and gas
properties - 5,770 - 5,770
Accretion of asset
retirement obligation 4,281 3,020 8,581 5,980
Loss on abandonment 1,036 2 1,413 79
Other, net (264) - (110) -
--------- --------- ---------- ---------
Total costs and operating
expenses 117,527 98,686 245,611 185,691
--------- --------- ---------- ---------
Income from operations 74,282 33,467 173,132 92,809
--------- --------- ---------- ---------
Other income (expense):
Interest income 644 2,550 1,872 4,618
Interest expense (24,236) (31,025) (52,363) (57,824)
Derivatives expense (50,190) - (50,150) -
Loss on debt extinguishment (24,220) - (24,220) -
--------- --------- ---------- ---------
Total other income
(expense) (98,002) (28,475) (124,861) (53,206)
--------- --------- ---------- ---------
Income (loss) before income
taxes (23,720) 4,992 48,271 39,603
--------- --------- ---------- ---------
Income tax (expense) benefit:
Current 2,078 22 (10,358) (34)
Deferred 9,862 1,111 (2,848) (6,010)
--------- --------- ---------- ---------
Total 11,940 1,133 (13,206) (6,044)
--------- --------- ---------- ---------
Net income (loss) $(11,780) $ 6,125 $ 35,065 $ 33,559
========= ========= ========== =========
Net income (loss) per share:
Basic $ (0.33) $ 0.20 $ 0.98 $ 1.12
========= ========= ========== =========
Diluted $ (0.33) $ 0.20 $ 0.97 $ 1.10
========= ========= ========== =========
Weighted average shares
outstanding:
Basic 35,440 30,058 35,631 30,031
========= ========= ========== =========
Diluted 35,440 30,639 36,072 30,612
========= ========= ========== =========
*T
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CONSOLIDATED CASH FLOW DATA
(In Thousands)
(Unaudited)
Six Months Ended
June 30,
-----------------------
2008 2007
------------ ----------
Cash flows from operating activities:
Net income $ 35,065 $ 33,559
Adjustments to operating activities 255,865 141,536
Changes in assets and liabilities (126,138) 2,434
------------ ----------
Net cash provided by operating activities 164,792 177,529
------------ ----------
Cash flows from investing activities:
Additions to oil and gas properties (349,008) (389,972)
Additions to furniture and fixtures (93) (207)
Proceeds from disposition of oil and gas
properties 82,450 -
Decrease in restricted cash - 1
------------ ----------
Net cash used in investing activities (266,651) (390,178)
------------ ----------
Cash flows from financing activities:
Proceeds from long-term debt 1,608,750 375,000
Principal payments of long-term debt (1,401,653) (181,369)
Deferred financing costs (15,391) (8,445)
Principal payments of capital lease - (23,950)
Net profits interest payments (10,871) -
Exercise of stock options 28 1,140
------------ ----------
Net cash provided by financing activities 180,863 162,376
------------ ----------
Effect of exchange rate changes on cash (130) 283
------------ ----------
Net increase (decrease) in cash and cash
equivalents 78,874 (49,990)
Cash and cash equivalents, beginning of period 199,449 182,592
------------ ----------
Cash and cash equivalents, end of period $ 278,323 $ 132,602
============ ==========
*T
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Reconciliation of Non-GAAP Net Income
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
----------------- ---------------
2008 2007 2008 2007
--------- ------- ------- -------
Net income (loss) $(11,780) $ 6,125 $35,065 $33,559
Impairment of oil and gas properties - 5,770 - 5,770
Loss on debt extinguishment, net of
tax 15,743 - 15,743 -
Unrealized derivatives expense, net
of tax 26,826 - 26,826 -
--------- ------- ------- -------
Pro forma net income $ 30,789 $11,895 $77,634 $39,329
========= ======= ======= =======
Pro forma net income per share:
Basic $ 0.87 $ 0.40 $ 2.18 $ 1.31
========= ======= ======= =======
Diluted $ 0.86 $ 0.39 $ 2.15 $ 1.28
========= ======= ======= =======
Weighted average shares outstanding:
Basic 35,440 30,058 35,631 30,031
========= ======= ======= =======
Diluted 35,848 30,639 36,072 30,612
========= ======= ======= =======
*T
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*T
Reconciliation of Non-GAAP Cash Flow Measures
(In Thousands)
(Unaudited)
Six Months Ended
June 30,
-----------------------
2008 2007
----------- ----------
Cash flows from operating activities:
Net income $ 35,065 $ 33,559
Adjustments to operating activities 255,865 141,536
----------- ----------
Pro forma cash flows from operating
activities before changes in assets and
liabilities 290,930 175,095
Changes in assets and liabilities (126,138) 2,434
----------- ----------
Net cash provided by operating activities $ 164,792 $ 177,529
=========== ==========
*T
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*T
2008
---------------------
3Q 4Q
---------------------
Gulf of Mexico
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) 3,960 3,055
Price ($/MMBtu) $ 8.63 $ 8.62
Crude Oil
Volumes (MBbls) 1,135 982
Price ($/Bbl) $ 77.84 $79.50
Equivalents
Volumes (MMMBtue) 10,770 8,947
Price ($/MMBtue) $ 11.38 $11.67
Puts
Crude Oil
Volumes (MBbls) 626 626
Floor Price ($/Bbl) $ 54.67 $54.67
Collars
Crude Oil
Volumes (MBbls) - -
Ceiling Price
($/Bbl) $ - $ -
Floor Price ($/Bbl) $ - $ -
North Sea
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) 4,610 4,370
Price ($/MMBtu) $ 6.65 $ 8.55
2009
-------------------------------------------
1Q 2Q 3Q 4Q
-------------------------------------------
Gulf of Mexico
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) 2,700 1,815 1,830 1,830
Price ($/MMBtu) $ 8.63 $ 7.56 $ 7.57 $ 8.10
Crude Oil
Volumes (MBbls) 788 705 713 621
Price ($/Bbl) $78.61 $75.83 $75.83 $76.61
Equivalents
Volumes (MMMBtue) 7,425 6,047 6,108 5,556
Price ($/MMBtue) $11.48 $11.12 $11.12 $11.23
Puts
Crude Oil
Volumes (MBbls) 369 373 377 377
Floor Price ($/Bbl) $54.00 $54.00 $54.00 $54.00
Collars
Crude Oil
Volumes (MBbls) - - - -
Ceiling Price
($/Bbl) $ - $ - $ - $ -
Floor Price ($/Bbl) $ - $ - $ - $ -
North Sea
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) 3,668 1,843 1,863 1,219
Price ($/MMBtu) $ 8.39 $ 8.72 $ 8.72 $ 8.42
----------------------------------------------------------------------
Exchange rate = 2 USD/GBP
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.
----------------------------------------------------------------------
Recent North Sea Natural Gas Swaps unwound:
June 30, 2008: 70,000 Btu/day October 2008 to March 2009 at GBP
3.00/MMBtu
June 30, 2008: 50,000 Btu/day October 2008 to March 2009 at GBP
4.64/MMBtu
Recent North Sea Natural Gas Swaps entered:
June 30, 2008: 120,000 Btu/day April 2009 to September 2009 at GBP
4.65/MMBtu
June 30, 2008: 50,000 Btu/day October 2009 to March 2010 at GBP
4.65/MMBtu
Recent Gulf of Mexico Oil Collars:
July 10, 2008: 1,000 Bbls/day calendar year 2010, $105/Bbl to $195/Bbl
July 10, 2008: 1,000 Bbls/day calendar year 2010, $105/Bbl to $196/Bbl
July 10, 2008: 1,000 Bbls/day calendar year 2010, $105/Bbl to $197/Bbl
July 10, 2008: 1,000 Bbls/day calendar year 2011, $105/Bbl to $187/Bbl
July 10, 2008: 1,000 Bbls/day calendar year 2011, $105/Bbl to $188/Bbl
*T
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*T
2010
---------------------------------------
1Q 2Q 3Q 4Q
---------------------------------------
Gulf of Mexico
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) - - - -
Price ($/MMBtu) $ - $ - $ - $ -
Crude Oil
Volumes (MBbls) 90 91 92 92
Price ($/Bbl) $ 68.20 $ 68.20 $ 68.20 $ 68.20
Equivalents
Volumes (MMMBtue) 540 546 552 552
Price ($/MMBtue) $ 11.37 $ 11.37 $ 11.37 $ 11.37
Puts
Crude Oil
Volumes (MBbls) - - - -
Floor Price ($/Bbl) $ - $ - $ - $ -
Collars
Crude Oil
Volumes (MBbls) 270 273 276 276
Ceiling Price ($/Bbl) $ 196.00 $196.00 $ 196.00 $196.00
Floor Price ($/Bbl) $ 105.00 $105.00 $ 105.00 $105.00
North Sea
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) 450 - - -
Price ($/MMBtu) $ 9.30 $ - $ - $ -
2011
----------------------------------------
1Q 2Q 3Q 4Q
----------------------------------------
Gulf of Mexico
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) - - - -
Price ($/MMBtu) $ - $ - $ - $ -
Crude Oil
Volumes (MBbls) 90 91 92 -
Price ($/Bbl) $ 68.20 $ 68.20 $ 68.20 $ -
Equivalents
Volumes (MMMBtue) 540 546 552 -
Price ($/MMBtue) $ 11.37 $ 11.37 $ 11.37 $ -
Puts
Crude Oil
Volumes (MBbls) - - - -
Floor Price ($/Bbl) $ - $ - $ - $ -
Collars
Crude Oil
Volumes (MBbls) 180 182 184 184
Ceiling Price ($/Bbl) $187.50 $ 187.50 $187.50 $ 187.50
Floor Price ($/Bbl) $105.00 $ 105.00 $105.00 $ 105.00
North Sea
Fixed Forwards & Swaps
Natural Gas
Volumes (MMMBtu) - - - -
Price ($/MMBtu) $ - $ - $ - $ -
----------------------------------------------------------------------
Exchange rate = 2 USD/GBP
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.
----------------------------------------------------------------------
*T
ATP Oil & Gas Corporation, Houston
T. Paul Bulmahn, 713-622-3311
Chairman and CEO
Albert L. Reese Jr., 713-622-3311
Chief Financial Officer
www.atpog.com
Copyright Business Wire 2008
