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| 8-K - ATP OIL & GAS CORPORATION 8-K - ATP OIL & GAS CORP | a6716711.htm |
Exhibit 99.1
ATP Announces First Quarter 2011 Results and Operations Update
HOUSTON--(BUSINESS WIRE)--May 9, 2011--ATP Oil & Gas Corporation (NASDAQ:ATPG) today announced first quarter 2011 results and an update on its operations.
Results of Operations
Revenues from oil and gas production were $166.5 million for the first quarter 2011, compared to $93.0 million for the first quarter 2010. Increased revenues from production were attributable to higher production volumes and higher oil prices. Oil and gas production for the first quarter 2011 was 2.3 MMBoe (26.0 MBoe/d) compared to 1.5 MMBoe (16.6 MBoe/d) for the first quarter 2010, a 56% increase. Average prices were up 29% over the same period a year ago. Oil represented 68% of total production for the first quarter 2011, compared to 58% of total production for the first quarter 2010.
ATP recorded a net loss attributable to common shareholders of $119.5 million or $(2.34) per basic and diluted share for the first quarter 2011, compared to $0.9 million or $(0.02) per basic and diluted share for the same 2010 period. The 2011 period includes derivative expense of $50.3 million ($42.9 million of which is unrealized) and $18.5 million of drilling interruption costs associated with the Gulf of Mexico moratorium.
Telemark Hub Update
At the Mississippi Canyon (“MC”) 941 #4 well, ATP completed running intermediate casing above the targeted reservoir and is currently drilling ahead. Operations over the next 60-70 days will include drilling through the pay section, running production casing and cementing, followed by running the production risers and completing the well. Subsequent to completion, the well will be tied into the facilities and flow tested, with production expected in the early part of the third quarter.
The permit for the MC 942 #2 well has been submitted. Upon receipt of the permit and the completion of the MC 941#4 well, ATP plans initial drilling of the remaining portion of the MC 942 #2 well during the third quarter 2011 and expects its production during the fourth quarter 2011.
ATP operates the deepwater Telemark Hub with a 100% working interest and owns 100% of the ATP Titan and associated pipelines and infrastructure.
Israel Expansion
During February 2011, ATP entered into agreements to acquire interests in five deepwater licenses in the Mediterranean Sea off the coast of Israel. During April 2011 the Israeli Ministry of National Infrastructure approved the transfer of three of the licenses, allowing ATP to acquire the interest in and operate Daniel East, Daniel West and Shimshon. The remaining two licenses are expected to be approved during the second quarter 2011. ATP will operate all the licenses with working interests ranging from 40% to 50%.
Capital Resources and Liquidity
During February 2011, ATP entered into an Incremental Loan Assumption Agreement and Amendment No. 1 (the “Amendment”) relating to its Credit Agreement dated as of June 18, 2010 (the “Credit Agreement”) to, among other things, decrease the interest rate on the entire balance outstanding from 11% to 9%. Additional borrowings were $60.0 million ($58.0 million, net of transaction costs and discount).
During March 2011, ATP entered into the First Amendment to Term Loan Agreement and Limited Waiver (“Titan Amendment”) relating to its term loan facility– ATP Titan assets to, among other things, modify the conditions precedent for incremental borrowings drawn under the Titan facility. Additional borrowings were $50.0 million ($44.2 million, net of transactions costs and discount).
During April 2011, ATP conveyed a dollar-denominated override in the MC711 Hub for $25.0 million. This override obligates the company to deliver a percentage of the proceeds from the future sale of hydrocarbons in the specified proved properties until the purchaser recovers its original investment plus an overall rate of return. Upon payment of the agreed dollar amounts, ownership of the override reverts to the company.
Also during April 2011, ATP closed an NPI transaction in the Telemark Hub for $40.0 million. The purchaser acquired an existing vendor NPI for $19.7 million, thereby extinguishing the existing NPI liability of $20.8 million, and contributed an additional $20.3 million toward the development of the Telemark Hub in exchange for a larger percentage of the net profits from production at the Telemark Hub that will continue until the purchaser recovers $40.0 million, plus an overall rate of return. Upon payment of the agreed dollar amounts, ownership of the NPI reverts to ATP.
ATP incurred $90.8 million of capital expenditures ($85.9 million excluding capitalized interest) on oil and gas properties during the first quarter 2011, of which $0.4 million was funded through vendor deferral programs. These capital expenditures were predominantly related to the Gomez and Telemark Hubs, and the Octabuoy production platform.
In the remainder of 2011, ATP anticipates incurring $350 million to $450 million in total capital expenditures, excluding capitalized interest, of which $150 million to $225 million will be contributed by vendors through existing NPI programs or deferral programs.
ATP had unrestricted cash of $182.1 million and restricted cash of $43.8 million at March 31, 2011.
ATP's selected financial data schedule below contains additional information on the company’s activities for first quarter 2011 and comparable 2010 period.
| Selected Financial Data | Three Months Ended | |||||||
| (Unaudited) | March 31, | |||||||
| 2011 | 2010 | |||||||
| Production | ||||||||
| Natural gas (MMcf) | 4,449 | 3,751 | ||||||
| Gulf of Mexico | 3,813 | 2,778 | ||||||
| North Sea | 636 | 973 | ||||||
| Oil and condensate (MBbls) | 1,600 | 872 | ||||||
| Gulf of Mexico | 1,599 | 869 | ||||||
| North Sea | 1 | 3 | ||||||
| Natural gas, oil and condensate | ||||||||
| MMcfe | 14,048 | 8,983 | ||||||
| MBoe | 2,341 | 1,497 | ||||||
| Average Prices | ||||||||
| Natural gas (per Mcf) | $ | 4.91 | $ | 5.31 | ||||
| Gulf of Mexico | 4.30 | 5.22 | ||||||
| North Sea | 8.57 | 5.59 | ||||||
| Oil and condensate (per Bbl) | 90.40 | 71.65 | ||||||
| Natural gas, oil and condensate | ||||||||
| Per Mcfe | $ | 11.85 | $ | 9.17 | ||||
| Per Boe | 71.10 | 55.02 | ||||||
| Deferred Revenue Recognized ($000's) | ||||||||
| Natural gas | $ | - | $ | 1,517 | ||||
| Oil and condensate | - | 9,102 | ||||||
| Total | $ | - | $ | 10,619 | ||||
| Gain (Loss) on Oil and Gas Derivatives ($000's) | ||||||||
| Natural gas contracts | ||||||||
| Realized or settled during the period | $ | 606 | $ | 782 | ||||
| Unrealized | (3,636 | ) | 12,185 | |||||
| Oil and condensate contracts | ||||||||
| Realized or settled during the period | (8,012 | ) | (2,851 | ) | ||||
| Unrealized | (39,220 | ) | (6,581 | ) | ||||
| Total | $ | (50,262 | ) | $ | 3,535 | |||
First Quarter 2011 Conference Call
ATP Oil & Gas Corporation (NASDAQ: ATPG) will host a conference call on Tuesday, May 10th at 10:30 am CDT to discuss the company’s first quarter results followed by a Q&A session.
1st Quarter Results Conference Call
Date: Tuesday, May 10, 2011
Time: 11:30 am EDT; 10:30 am CDT; 9:30 am MDT and 8:30 am PDT
ATP invites interested persons to listen to the live webcast on the company’s website at www.atpog.com. Phone participants should dial 888-395-3241. A digital replay of the conference call will be available at 888-203-1112, ID# 7663088, for a period of 24 hours beginning at 2:00 pm CDT.
About ATP Oil & Gas Corporation
ATP Oil & Gas is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and 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 oil and natural gas 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 ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting its business. While ATP does not file reports with the SEC containing probable and possible reserve quantities, ATP occasionally will include them in presentations and discuss such reserves publicly. ATP and its independent third party reservoir engineers use the term “probable” to describe volumes of reserves potentially recoverable through additional drilling or recovery techniques that, by their nature, are more speculative than estimates of proved reserves. Any estimates of reserves in this news release have been prepared by our independent third party engineers. More information about the risks and uncertainties relating to ATP's forward-looking statements is found in the company's SEC filings.
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (In Thousands) | |||||||||
| (Unaudited) | |||||||||
| March 31, | December 31, | ||||||||
| 2011 | 2010 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 182,125 | $ | 154,695 | |||||
| Restricted cash | 33,774 | 30,270 | |||||||
| Accounts receivable (net of allowance of $225 and $225, respectively) | 99,057 | 92,737 | |||||||
| Deferred tax asset | 8,191 | 8,191 | |||||||
| Derivative asset | - | 1,688 | |||||||
| Other current assets | 22,207 | 26,408 | |||||||
| Total current assets | 345,354 | 313,989 | |||||||
| Oil and gas properties (using the successful efforts method of accounting): | |||||||||
| Proved properties | 4,381,633 | 4,291,440 | |||||||
| Unproved properties | 21,041 | 20,402 | |||||||
| 4,402,674 | 4,311,842 | ||||||||
| Less accumulated depletion, depreciation, impairment and amortization | (1,492,372 | ) | (1,407,206 | ) | |||||
| Oil and gas properties, net | 2,910,302 | 2,904,636 | |||||||
| Restricted cash | 10,000 | 10,000 | |||||||
| Deferred financing costs, net | 48,284 | 48,353 | |||||||
| Other assets, net | 13,139 | 13,124 | |||||||
| Total assets | $ | 3,327,079 | $ | 3,290,102 | |||||
| Liabilities and Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable and accruals | $ | 273,527 | $ | 230,703 | |||||
| Current maturities of long-term debt | 26,987 | 21,625 | |||||||
| Asset retirement obligation | 41,955 | 43,386 | |||||||
| Derivative liability | 54,885 | 37,893 | |||||||
| Other current liabilities | 101,341 | 86,521 | |||||||
| Total current liabilities | 498,695 | 420,128 | |||||||
| Long-term debt | 1,952,983 | 1,857,784 | |||||||
| Other long-term obligations | 405,949 | 472,500 | |||||||
| Asset retirement obligation | 127,001 | 123,472 | |||||||
| Deferred tax liability | 26,418 | 16,956 | |||||||
| Derivative liability | 32,734 | 6,425 | |||||||
| Total liabilities | 3,043,780 | 2,897,265 | |||||||
| Temporary equity-redeemable noncontrolling interest | 140,851 | 140,851 | |||||||
| Shareholders' equity: | |||||||||
| Convertible preferred stock, $0.001 par value | 140,000 | 140,000 | |||||||
| Common stock, $0.001 par value | 51 | 51 | |||||||
| Additional paid-in capital | 569,575 | 570,739 | |||||||
| Accumulated deficit | (473,655 | ) | (356,866 | ) | |||||
| Accumulated other comprehensive loss | (92,612 | ) | (101,027 | ) | |||||
| Treasury stock, at cost | (911 | ) | (911 | ) | |||||
| Total shareholders' equity | 142,448 | 251,986 | |||||||
| Total liabilities and equity | $ | 3,327,079 | $ | 3,290,102 | |||||
| CONSOLIDATED INCOME STATEMENTS | ||||||||
| (In Thousands, Except Per Share Amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
|
Oil and gas production revenues |
$ | 166,500 | $ | 93,029 | ||||
| Costs, operating expenses and other: | ||||||||
| Lease operating | 32,407 | 29,635 | ||||||
| Exploration | - | 712 | ||||||
| General and administrative | 9,745 | 11,509 | ||||||
| Depreciation, depletion and amortization | 79,320 | 36,001 | ||||||
| Impairment of oil and gas properties | - | 8,237 | ||||||
| Accretion of asset retirement obligation | 3,664 | 3,390 | ||||||
| Drilling interruption costs | 18,498 | - | ||||||
| Loss on abandonment | 1,269 | 151 | ||||||
| Gain on exchange/disposal of properties | - | (11,974 | ) | |||||
| Other, net | (9 | ) | (946 | ) | ||||
| 144,894 | 76,715 | |||||||
| Income from operations | 21,606 | 16,314 | ||||||
| Other income (expense): | ||||||||
| Interest income | 57 | 144 | ||||||
| Interest expense, net | (75,485 | ) | (12,219 | ) | ||||
| Derivative income (expense) | (50,262 | ) | 3,535 | |||||
| (125,690 | ) | (8,540 | ) | |||||
| Income (loss) before income taxes | (104,084 | ) | 7,774 | |||||
| Income tax expense: | ||||||||
| Current | - | (553 | ) | |||||
| Deferred | (9,142 | ) | (852 | ) | ||||
| (9,142 | ) | (1,405 | ) | |||||
| Net income (loss) | (113,226 | ) | 6,369 | |||||
|
Less income attributable to the redeemable
noncontrolling interest |
(3,563 | ) | (4,455 | ) | ||||
| Less convertible preferred stock dividends | (2,758 | ) | (2,800 | ) | ||||
| Net loss attributable to common shareholders | $ | (119,547 | ) | $ | (886 | ) | ||
| Net loss per share attributable to common shareholders: | ||||||||
| Basic | $ | (2.34 | ) | $ | (0.02 | ) | ||
| Diluted | $ | (2.34 | ) | $ | (0.02 | ) | ||
| Weighted average number of common shares: | ||||||||
| Basic | 51,020 | 50,450 | ||||||
| Diluted | 51,020 | 50,450 | ||||||
| CONSOLIDATED CASH FLOW DATA | ||||||||
| (In Thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (113,226 | ) | $ | 6,369 | |||
| Adjustments to operating activities | 153,903 | 26,430 | ||||||
| Changes in assets and liabilities | 45,498 | (27,330 | ) | |||||
| Net cash provided by operating activities | 86,175 | 5,469 | ||||||
| Cash flows from investing activities: | ||||||||
| Additions to oil and gas properties | (95,648 | ) | (157,349 | ) | ||||
| Proceeds from disposition of properties | - | 2,053 | ||||||
| Increase in restricted cash | (3,504 | ) | (35,477 | ) | ||||
| Net cash used in investing activities | (99,152 | ) | (190,773 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from first lien term loans | 59,400 | - | ||||||
| Proceeds from term loan facility - Titan assets | 45,000 | - | ||||||
| Proceeds from term loans | - | 46,000 | ||||||
| Payments of term loans | (5,000 | ) | (17,310 | ) | ||||
| Deferred financing costs | (2,781 | ) | (8,858 | ) | ||||
| Proceeds from other long-term obligations | - | 171,136 | ||||||
| Payments of other long-term obligations | (33,926 | ) | (13,450 | ) | ||||
| Distributions to noncontrolling interest | (3,563 | ) | (3,563 | ) | ||||
| Preferred stock dividends | (2,758 | ) | (2,856 | ) | ||||
| Payments of short-term borrowings | (16,854 | ) | - | |||||
| Exercise of stock options/warrants | 163 | 2,562 | ||||||
| Net cash provided by financing activities | 39,681 | 173,661 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 726 | (483 | ) | |||||
| Increase (decrease) in cash and cash equivalents | 27,430 | (12,126 | ) | |||||
| Cash and cash equivalents, beginning of period | 154,695 | 108,961 | ||||||
| Cash and cash equivalents, end of period | $ | 182,125 | $ | 96,835 | ||||
| Other Long-term Obligations | ||||||||
|
(In Thousands) |
||||||||
| March 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Net profits interests | $ | 315,275 | $ | 331,776 | ||||
| Dollar-denominated overriding royalty interests | 24,761 | 52,825 | ||||||
| Gomez pipeline obligation | 74,767 | 73,868 | ||||||
| Vendor deferrals – Gulf of Mexico | 2,824 | 7,096 | ||||||
| Vendor deferrals – North Sea | 87,081 | 90,874 | ||||||
| Other | 2,582 | 2,582 | ||||||
| Total | 507,290 | 559,021 | ||||||
| Less current maturities | (101,341 | ) | (86,521 | ) | ||||
| Other long-term obligations | $ | 405,949 | $ | 472,500 | ||||
| Cash Payments Related to Other Long-term Obligations | ||||
| (In Thousands) | ||||
| Three Months | ||||
| Ended | ||||
| March 31, | ||||
| 2011 | ||||
| Net profits interests | $ | 18,567 | ||
| Dollar-denominated overriding royalty interests | 29,402 | |||
| Gomez pipeline financing | 4,503 | |||
| Vendor deferrals | 9,941 | |||
| Total payments (1) | $ | 62,413 | ||
|
(1) Includes principal of $33,926 and interest of $28,487. The weighted average effective interest rate on our other long-term obligations was 17.8% as of March 31, 2011. |
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|
Hedging and Derivatives Contracts |
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|
(Unaudited) |
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| 2011 | 2012 | 2013 | |||||||||||||||||||||||||||||||||||
| 2Q | 3Q | 4Q | FY | 1Q | 2Q | 3Q | 4Q | FY | 1Q | FY | |||||||||||||||||||||||||||
| Gulf of Mexico | |||||||||||||||||||||||||||||||||||||
| Natural Gas Swaps | |||||||||||||||||||||||||||||||||||||
| Volumes (MMMBtu) | 1,365 | 1,380 | 1,380 | 4,125 |
|
1,365 | 1,365 | ||||||||||||||||||||||||||||||
| Price ($/MMBtu) | $ | 4.64 | $ | 4.64 | $ | 4.64 | $ | 4.64 |
|
$ | 4.64 | $ | 4.64 | ||||||||||||||||||||||||
| Natural Gas Calls | |||||||||||||||||||||||||||||||||||||
| Volumes (MMMBtu) | 610 | 920 | 920 | 2,450 | 910 | 910 | 920 | 920 | 3,660 | ||||||||||||||||||||||||||||
| Price ($/MMBtu) | $ | 4.70 | $ | 4.70 | $ | 5.10 | $ | 4.86 | $ | 5.30 | $ | 5.30 | $ | 5.30 | $ | 5.10 | $ | 5.35 | |||||||||||||||||||
| Crude Oil Swaps | |||||||||||||||||||||||||||||||||||||
| Volumes (MBbls) | 819 | 751 | 874 | 2,444 | 796 | 773 | 782 | 782 | 3,133 | 90 | 90 | ||||||||||||||||||||||||||
| Price ($/Bbl) | $ | 92.67 | $ | 92.37 | $ | 91.95 | $ | 92.32 | $ | 89.21 | $ | 89.79 | $ | 89.79 | $ | 89.79 | $ | 89.64 | $ | 90.40 | $ | 90.40 | |||||||||||||||
| Crude Oil Reparticipation Calls | |||||||||||||||||||||||||||||||||||||
| Volumes (MBbls) | 212 | 184 | 184 | 580 | |||||||||||||||||||||||||||||||||
| Price ($/Bbl) | $ | 110.71 | $ | 110.00 | $ | 110.00 | $ | 110.27 | |||||||||||||||||||||||||||||
| North Sea | |||||||||||||||||||||||||||||||||||||
| Natural Gas Swaps | |||||||||||||||||||||||||||||||||||||
| Volumes (MMMBtu) | 455 | 460 | 460 | 1,375 | 455 | 455 | 460 | 276 | 1,646 | ||||||||||||||||||||||||||||
| Price ($/MMBtu)(1) | $ | 7.50 | $ | 7.50 | $ | 8.90 | $ | 7.97 | $ | 8.90 | $ | 7.74 | $ | 7.74 | $ | 8.77 | $ | 8.23 | |||||||||||||||||||
| The above are ATP's financial and physical commodity contracts outstanding as of May 9, 2011 | |||||||||||||||||||||||||||||||||||||
| Additional hedges, derivatives and fixed price contracts, if any, will be announced during the year. | |||||||||||||||||||||||||||||||||||||
|
(1) Assumes currency translation rate of : 1.66 USD per GBP which approximates the rate as of May 9, 2011 |
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CONTACT:
ATP Oil & Gas Corporation, Houston
T. Paul Bulmahn,
713-622-3311
Chairman and CEO
or
Albert L. Reese Jr.,
713-622-3311
Chief Financial Officer
www.atpog.com