Exhibit 99.1
ATP Announces Third Quarter 2008 Results and Update
HOUSTON--(BUSINESS WIRE)--November 5, 2008--ATP Oil & Gas Corporation (NASDAQ:ATPG) today announced third quarter 2008 results and update.
Highlights include:
- Net income of $36.5 million or $1.03 per share;
- Record nine month production and revenues despite the impact of hurricanes Gustav and Ike;
- Executed an agreement to sell 80% of certain assets in the U.K. North Sea for approximately $430 million, which represents significant progress toward our previously announced monetization program;
- Continued progress on our 2008 development program including completion and first production at West Cameron 462 during early fourth quarter 2008.
Oil and gas production for the third quarter of 2008 was 2.0 MMBoe (12.2 Bcfe) compared to 2.2 MMBoe (13.3 Bcfe) for the third quarter of 2007. Production for the quarter was significantly impacted by hurricanes Gustav and Ike resulting in a deferral of production during the quarter of approximately 1.0 MMBoe (5.7 Bcfe). Despite these deferrals our quarterly production was down only 9% from the comparable quarter in 2007. Oil production was 0.8 MMBbls and natural gas production was 7.3 Bcf for the third quarter of 2008, compared to 0.9 MMBbls and 8.0 Bcfe for the third quarter of 2007. Oil and gas production increased 19% to 8.7 MMBoe (52.2 Bcfe) for the nine months ended September 30, 2008, compared to 7.3 MMBoe (43.8 Bcfe) for the nine months ended September 30, 2007.
Revenues from oil and gas production were $118.3 million for the third quarter of 2008, compared to $117.0 million for the third quarter of 2007. Revenues from oil and gas production increased 36% to $536.2 million for the nine months ended September 30, 2008, compared to $393.6 million for the nine months ended September 30, 2007.
ATP recorded net income of $36.5 million or $1.03 per basic and $1.02 per diluted share for the third quarter of 2008, compared to net income of $2.3 million or $0.08 per basic and diluted share for the third quarter of 2007. ATP recorded net income of $71.5 million or $2.02 per basic share and $1.99 per diluted share for the nine months ended September 30, 2008, compared to $35.9 million or $1.19 per basic share and $1.17 per diluted share for the nine months ended September 30, 2007. During the third quarter of 2008 ATP recognized $12.6 million of oil and gas production revenue from the amortization of deferred revenue related to the second quarter 2008 sale of a limited-term overriding royalty interest. In addition, ATP recorded $12.5 million in capitalized interest.
Results for the third quarter included items that research analysts typically exclude from their published estimates, such as unrealized gains and losses on derivatives and impairments. Net income before these items, a non-GAAP measure, in the third quarter of 2008 was $21.6 million or $0.61 per basic share and $0.60 per diluted share, compared to $4.9 million or $0.16 per basic and diluted share in the third quarter of 2007. A non-GAAP reconciliation is provided near the end of this press release.
ATP previously announced that it had entered into a sale and purchase agreement for GBP 265.0 million (approximately $430 million) with EDF Production U.K. Limited, a subsidiary of EDF International of France, for certain of ATP's assets in the U.K. North Sea. Upon closing, the agreement will transfer 80% of ATP's interest in Tors (a 68% working interest) and Wenlock (an 80% working interest) to EDF, effective July 1, 2008. The sale has been approved by the respective boards and parents of ATP and EDF and is subject to approval by the U.K. regulatory authority. Closing and funding of the sale is expected before the end of 2008. ATP will remain as operator of both Tors and Wenlock.
ATP's selected operating statistics and financial information, included within this press release, contain additional information on the company’s activities for the third quarter of 2008 and the comparable period of 2007.
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||
Selected Operating Statistics (Unaudited) | ||||||||||||
Production | ||||||||||||
Natural gas (MMcf) | 7,267 | 8,021 | 29,080 | 26,271 | ||||||||
Gulf of Mexico | 3,794 | 5,374 | 15,734 | 18,449 | ||||||||
North Sea | 3,473 | 2,647 | 13,346 | 7,822 | ||||||||
Oil and condensate (MBbls) | 821 | 887 | 3,857 | 2,926 | ||||||||
Gulf of Mexico | 817 | 881 | 3,829 | 2,911 | ||||||||
North Sea | 4 | 6 | 28 | 15 | ||||||||
Natural gas equivalents (MMcfe) | 12,190 | 13,343 | 52,219 | 43,830 | ||||||||
Gulf of Mexico | 8,693 | 10,661 | 38,707 | 35,913 | ||||||||
North Sea | 3,497 | 2,682 | 13,512 | 7,917 | ||||||||
Average Prices (includes effect of cash flow hedges) | ||||||||||||
Natural gas (per Mcf) | $ | 7.32 | $ | 7.25 | $ | 8.20 | $ | 8.28 | ||||
Gulf of Mexico | 9.39 | 7.63 | 9.55 | 8.22 | ||||||||
North Sea | 5.06 | 6.49 | 6.60 | 8.42 | ||||||||
Oil and condensate (per Bbl) | 64.01 | 66.30 | 72.18 | 60.15 | ||||||||
Natural gas, oil and condensate (per Mcfe) | 8.67 | 8.77 | 9.90 | 8.98 | ||||||||
Other Expenses, per Mcfe | ||||||||||||
Lease operating expense | $ | 2.03 | $ | 1.59 | $ | 1.40 | $ | 1.42 | ||||
Gulf of Mexico | 2.20 | 1.69 | 1.41 | 1.39 | ||||||||
North Sea | 1.61 | 1.17 | 1.36 | 1.57 | ||||||||
Depreciation, depletion and amortization | 4.33 | 4.02 | 4.25 | 3.64 | ||||||||
Gulf of Mexico | 3.51 | 3.71 | 3.53 | 3.44 | ||||||||
North Sea | 6.38 | 5.25 | 6.33 | 4.57 | ||||||||
Selected Financial Data (Unaudited) | ||||||||||||
(In Thousands, Except Per Share Data) | ||||||||||||
Oil and gas revenues (1) | $ | 118,347 | $ | 116,738 | $ | 536,193 | $ | 393,640 | ||||
Net income | 36,483 | 2,321 | 71,548 | 35,880 | ||||||||
Net income per share: | ||||||||||||
Basic | $ | 1.03 | $ | 0.08 | $ | 2.02 | $ | 1.19 | ||||
Diluted | $ | 1.02 | $ | 0.08 | $ | 1.99 | 1.17 | |||||
Weighted average shares outstanding: | ||||||||||||
Basic | 35,452 | 30,118 | 35,441 | 30,060 | ||||||||
Diluted | 35,815 | 30,771 | 35,871 | 30,669 | ||||||||
| ||||||||||||
(1) Includes settlements on derivatives qualifying for hedge accounting. Additionally, the 2008 periods reflect oil and gas production revenues from amortization of deferred revenue related to the sale of a limited-term overriding royalty interest during the second quarter of 2008. |
3rd Quarter 2008 Conference Call
ATP Oil & Gas Corporation (NASDAQ: ATPG) will host a conference call on Thursday, November 6 at 10:30 am central time to discuss the company’s third quarter results, followed by a Q&A session.
Date: | Thursday, November 6, 2008 |
Time: | 11:30 am ET; 10:30 am CT; 9:30 am MT and 8:30 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 (888) 812-8594. A digital replay of the conference call will be available at (888) 203-1112, ID# 9742913, for a period of 24 hours beginning at 12:30 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.
CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | ||||||||
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 178,358 | $ | 199,449 | ||||
Restricted cash | - | 13,981 | ||||||
Accounts receivable (net of allowances of $358 and $382) | 44,460 | 127,891 | ||||||
Deferred tax assets | 45,049 | 84,110 | ||||||
Derivative assets | 1,409 | 1,286 | ||||||
Other current assets | 12,582 | 15,934 | ||||||
Total current assets | 281,858 | 442,651 | ||||||
Oil and gas properties: | ||||||||
Oil and gas properties (using the successful efforts method of accounting) | 3,167,919 | 2,556,938 | ||||||
Less: Accumulated depletion, impairment and amortization | (931,092 | ) | (726,358 | ) | ||||
Oil and gas properties, net | 2,236,827 | 1,830,580 | ||||||
Furniture and fixtures, net | 589 | 860 | ||||||
Derivative assets | 431 | 673 | ||||||
Deferred tax assets | 19,841 | - | ||||||
Deferred financing costs, net | 14,504 | 19,873 | ||||||
Other assets, net | 17,741 | 12,496 | ||||||
Total assets | $ | 2,571,791 | $ | 2,307,133 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accruals | $ | 220,317 | $ | 270,557 | ||||
Current maturities of long-term debt | 10,500 | 12,165 | ||||||
Asset retirement obligation | 19,075 | 28,194 | ||||||
Derivative liabilities | 32,659 | 11,335 | ||||||
Other current liabilities | 14,164 | 23,512 | ||||||
Total current liabilities | 296,715 | 345,763 | ||||||
Long-term debt | 1,598,392 | 1,391,846 | ||||||
Asset retirement obligation | 167,778 | 158,577 | ||||||
Deferred tax liabilities | 83,814 | 85,256 | ||||||
Derivative Liabilities | 12,185 | 13,242 | ||||||
Deferred revenue | 62,549 | - | ||||||
Other liabilities | 2,582 | 2,583 | ||||||
Total liabilities | 2,224,015 | 1,997,267 | ||||||
Shareholders' equity: | ||||||||
Preferred stock: $0.001 par value | - | - | ||||||
Common stock: $0.001 par value | 36 | 36 | ||||||
Additional paid-in capital | 397,354 | 388,250 | ||||||
Accumulated deficit | (20,513 | ) | (92,061 | ) | ||||
Accumulated other comprehensive income | (28,190 | ) | 14,552 | |||||
Treasury stock, at cost | (911 | ) | (911 | ) | ||||
Total shareholders' equity | 347,776 | 309,866 | ||||||
Total liabilities and shareholders' equity | $ | 2,571,791 | $ | 2,307,133 | ||||
CONSOLIDATED INCOME STATEMENTS (In Thousands, Except Per Share Amounts) (Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Oil and gas revenues | $ | 118,347 | $ | 116,738 | $ | 536,193 | $ | 393,640 | ||||||||
Other revenues | - | - | 897 | 1,598 | ||||||||||||
Total revenues | 118,347 | 116,738 | 537,090 | 395,238 | ||||||||||||
Costs and operating expenses: | ||||||||||||||||
Lease operating | 24,723 | 21,152 | 73,111 | 62,326 | ||||||||||||
Exploration | 48 | 1,799 | 48 | 13,135 | ||||||||||||
General and administrative | 9,212 | 7,610 | 27,279 | 22,950 | ||||||||||||
Depreciation, depletion and amortization | 52,825 | 53,617 | 222,097 | 159,629 | ||||||||||||
Impairment of oil and gas properties | - | 4,028 | - | 9,798 | ||||||||||||
Accretion of asset retirement obligation | 4,211 | 3,039 | 12,792 | 9,019 | ||||||||||||
Loss on abandonment | 896 | 300 | 2,309 | 379 | ||||||||||||
Other, net | (149 | ) | (1,785 | ) | (259 | ) | (1,785 | ) | ||||||||
Total costs and operating expenses | 91,766 | 89,760 | 337,377 | 275,451 | ||||||||||||
Income from operations | 26,581 | 26,978 | 199,713 | 119,787 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income | 1,079 | 1,329 | 2,951 | 5,947 | ||||||||||||
Interest expense | (26,606 | ) | (29,717 | ) | (78,969 | ) | (87,541 | ) | ||||||||
Derivatives income (expense) | 40,963 | 284 | (9,187 | ) | 284 | |||||||||||
Loss on debt extinguishment | - | - | (24,220 | ) | - | |||||||||||
Total other income (expense) | 15,436 | (28,104 | ) | (109,425 | ) | (81,310 | ) | |||||||||
Income (loss) before income taxes | 42,017 | (1,126 | ) | 90,288 | 38,477 | |||||||||||
Income tax (expense) benefit: | ||||||||||||||||
Current | 6,710 | 1,566 | (3,648 | ) | 1,532 | |||||||||||
Deferred | (12,244 | ) | 1,881 | (15,092 | ) | (4,129 | ) | |||||||||
Total | (5,534 | ) | 3,447 | (18,740 | ) | (2,597 | ) | |||||||||
Net income | $ | 36,483 | $ | 2,321 | $ | 71,548 | $ | 35,880 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 1.03 | $ | 0.08 | $ | 2.02 | $ | 1.19 | ||||||||
Diluted | $ | 1.02 | $ | 0.08 | $ | 1.99 | $ | 1.17 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 35,452 | 30,118 | 35,441 | 30,060 | ||||||||||||
Diluted | 35,815 | 30,771 | 35,871 | 30,669 | ||||||||||||
CONSOLIDATED CASH FLOW DATA (In Thousands) (Unaudited) | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 71,548 | $ | 35,880 | ||||
Adjustments to operating activities | 292,852 | 204,801 | ||||||
Changes in assets and liabilities | (111,052 | ) | (2,930 | ) | ||||
Net cash provided by operating activities | 253,348 | 237,751 | ||||||
Cash flows from investing activities: | ||||||||
Additions to oil and gas properties | (544,176 | ) | (636,597 | ) | ||||
Additions to furniture and fixtures | (129 | ) | (296 | ) | ||||
Proceeds from disposition of oil and gas properties | 82,644 | - | ||||||
Decrease in restricted cash | 13,864 | 14,096 | ||||||
Net cash used in investing activities | (447,797 | ) | (622,797 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from long-term debt | 1,608,750 | 574,500 | ||||||
Principal payments of long-term debt | (1,404,278 | ) | (184,552 | ) | ||||
Deferred financing costs | (15,523 | ) | (13,449 | ) | ||||
Principal payments of capital lease | - | (23,950 | ) | |||||
Net profits interest payments | (13,602 | ) | - | |||||
Exercise of stock options | 33 | 2,004 | ||||||
Net cash provided by financing activities | 175,380 | 354,553 | ||||||
Effect of exchange rate changes on cash | (2,022 | ) | 882 | |||||
Net decrease in cash and cash equivalents | (21,091 | ) | (29,611 | ) | ||||
Cash and cash equivalents, beginning of period | 199,449 | 182,592 | ||||||
Cash and cash equivalents, end of period | $ | 178,358 | $ | 152,981 | ||||
Reconciliation of Non-GAAP Net Income (In Thousands, Except Per Share Amounts) (Unaudited) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
Net income | $ | 36,483 | $ | 2,321 | $ | 71,548 | $ | 35,880 | |||||
Adjustments to net income, net of tax: | |||||||||||||
Impairment of oil and gas properties | - | 2,618 | - | 6,369 | |||||||||
Loss on debt extinguishment | - | - | 15,743 | - | |||||||||
Unrealized derivatives (income) expense | (14,868 | ) | - | 11,958 | - | ||||||||
Pro forma net income | $ | 21,615 | $ | 4,939 | $ | 99,249 | $ | 42,249 | |||||
Pro forma net income per share: | |||||||||||||
Basic | $ | 0.61 | $ | 0.16 | $ | 2.80 | $ | 1.41 | |||||
Diluted | $ | 0.60 | $ | 0.16 | $ | 2.77 | $ | 1.38 | |||||
Weighted average shares outstanding: | |||||||||||||
Basic | 35,452 | 30,118 | 35,441 | 30,060 | |||||||||
Diluted | 35,815 | 30,771 | 35,871 | 30,669 | |||||||||
2008 | 2009 | ||||||||||||||||||||
4Q | FY | 1Q | 2Q | 3Q | 4Q | FY | |||||||||||||||
Gulf of Mexico | |||||||||||||||||||||
Fixed Forwards & Swaps | |||||||||||||||||||||
Natural Gas | |||||||||||||||||||||
Volumes (MMMBtu) | 3,055 | 3,055 | 2,700 | 1,815 | 1,830 | 1,830 | 8,175 | ||||||||||||||
Price ($/MMBtu) | $ | 8.62 | $ | 8.62 | $ | 8.63 | $ | 7.56 | $ | 7.57 | $ | 8.10 | $ | 8.04 | |||||||
Crude Oil | |||||||||||||||||||||
Volumes (MBbls) | 982 | 982 | 788 | 705 | 713 | 621 | 2,827 | ||||||||||||||
Price ($/Bbl) | $ | 79.50 | $ | 79.50 | $ | 78.61 | $ | 75.83 | $ | 75.83 | $ | 76.61 | $ | 76.78 | |||||||
Equivalents | |||||||||||||||||||||
Volumes (MMMBtue) | 8,947 | 8,947 | 7,425 | 6,047 | 6,108 | 5,556 | 25,136 | ||||||||||||||
Price ($/MMBtue) | $ | 11.67 | $ | 11.67 | $ | 11.48 | $ | 11.12 | $ | 11.12 | $ | 11.23 | $ | 11.25 | |||||||
Puts | |||||||||||||||||||||
Crude Oil | |||||||||||||||||||||
Volumes (MBbls) | 626 | 626 | 369 | 373 | 377 | 377 | 1,497 | ||||||||||||||
Floor Price ($/Bbl) | $ | 54.67 | $ | 54.67 | $ | 54.00 | $ | 54.00 | $ | 54.00 | $ | 54.00 | $ | 54.00 | |||||||
North Sea | |||||||||||||||||||||
Fixed Forwards & Swaps | |||||||||||||||||||||
Natural Gas | |||||||||||||||||||||
Volumes (MMMBtu) | 4,370 | 4,370 | 3,668 | 1,843 | 1,863 | 1,219 | 8,592 | ||||||||||||||
Price ($/MMBtu) | $ | 7.78 | $ | 7.78 | $ | 7.63 | $ | 7.94 | $ | 7.94 | $ | 7.66 | $ | 7.77 | |||||||
Exchange rate = 1.82 USD/GBP as of September 30,2008 | |||||||||||||||||||||
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. | |||||||||||||||||||||
2010 | 2011 | |||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | FY | 1Q | 2Q | 3Q | 4Q | FY | |||||||||||||||||||||
Gulf of Mexico | ||||||||||||||||||||||||||||||
Fixed Forwards & Swaps | ||||||||||||||||||||||||||||||
Natural Gas | ||||||||||||||||||||||||||||||
Volumes (MMMBtu) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||
Price ($/MMBtu) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Crude Oil | ||||||||||||||||||||||||||||||
Volumes (MBbls) | 90 | 91 | 92 | 92 | 365 | 90 | 91 | 92 | - | 273 | ||||||||||||||||||||
Price ($/Bbl) | $ | 68.20 | $ | 68.20 | $ | 68.20 | $ | 68.20 | $ | 68.20 | $ | 68.20 | $ | 68.20 | $ | 68.20 | $ | - | $ | 68.20 | ||||||||||
Equivalents | ||||||||||||||||||||||||||||||
Volumes (MMMBtue) | 540 | 546 | 552 | 552 | 2,190 | 540 | 546 | 552 | - | 1,638 | ||||||||||||||||||||
Price ($/MMBtue) | $ | 11.37 | $ | 11.37 | $ | 11.37 | $ | 11.37 | $ | 11.37 | $ | 11.37 | $ | 11.37 | $ | 11.37 | $ | - | $ | 11.37 | ||||||||||
Puts | ||||||||||||||||||||||||||||||
Crude Oil | ||||||||||||||||||||||||||||||
Volumes (MBbls) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||
Floor Price ($/Bbl) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
North Sea | ||||||||||||||||||||||||||||||
Fixed Forwards & Swaps | ||||||||||||||||||||||||||||||
Natural Gas | ||||||||||||||||||||||||||||||
Volumes (MMMBtu) | 450 | - | - | - | 450 | - | - | - | - | - | ||||||||||||||||||||
Price ($/MMBtu) | $ | 8.46 | $ | - | $ | - | $ | - | $ | 8.46 | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| ||||||||||||||||||||||||||||||
Exchange rate = 1.82 USD/GBP as of September 30,2008 | ||||||||||||||||||||||||||||||
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. | ||||||||||||||||||||||||||||||
CONTACT:
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