Exhibit 99.1
ATP Announces Annual Financials and 2006 Record Results
HOUSTON--(BUSINESS WIRE)--March 2, 2007--ATP Oil & Gas Corporation
(NASDAQ:ATPG) today announced annual and fourth quarter 2006 results
which includes record revenues, record production, and record
reserves.
2006 results include:
-- Increased production of 155% to a record 50.9 Bcfe and fourth
quarter production of 186% to 15.4 Bcfe;
-- Reported 636.9 Bcfe of proved reserves (+21%) and 213.8 Bcfe
of proved developed reserves (+67%) at year-end;
-- Replaced 315% of production, exceeding the company's target of
200%;
-- Realization of record annual and fourth quarter revenue of
$419.8 million and $132.9 million, respectively;
-- Realization of an annual and fourth quarter net loss available
to common shareholders of $39.3 million and $37.0 million,
respectively;
-- Commencement of first production at five new projects,
including Mississippi Canyon ("MC") 711 in the deepwater Gulf
of Mexico and Tors in the U.K. North Sea; and
-- Completion of three capital financings, the latest of which
eliminated the 13.5% and 12.5% dividend rates by redeeming all
of the company's preferred shares and reducing the cost of its
debt capital approximately 200 basis points.
Recent and year-to-date highlights include:
-- Acquisition of Aconcagua and Anduin in the deepwater Gulf of
Mexico in January 2007 -- not included in year-end 2006 proved
reserves;
-- Achievement of first production at Garrow on February 21, 2007
-- Tors field currently producing in excess of 50 MMcfe/d net;
-- Resumed production at Garden Banks 409 ("Ladybug") on February
13, 2007; and
-- Initiated flow from the third well at MC 711 on March 1, 2007
-- field production to increase above 120 MMcfe/d net in
March.
Results of Operations
Natural gas and oil production increased 155% to 50.9 Bcfe for
2006. Natural gas and oil production increased 186% to 15.4 Bcfe for
the fourth quarter 2006 compared to the fourth quarter 2005. The
increase in annual and fourth quarter 2006 production was primarily
attributable to achieving first production at Mississippi Canyon 711
and Tors in the first quarter 2006 as well as restoring production in
2006 at certain properties impacted by hurricanes Rita and Katrina in
2005.
Commodity price realizations increased 11% from $7.36 per Mcfe for
2005 to $8.14 per Mcfe for 2006. The increase was primarily
attributable to higher Gulf of Mexico natural gas and crude oil price
realizations in the early part of 2006 offset by lower North Sea
natural gas price realizations. Commodity price realizations decreased
11% from $9.27 per Mcfe for the fourth quarter 2005 to $8.26 per Mcfe
for the fourth quarter 2006. The decrease reflected lower Gulf of
Mexico and North Sea natural gas price realizations partially offset
by higher crude oil price realizations.
Natural gas and oil revenues totaled $419.8 million for 2006 and
$132.9 million for the fourth quarter 2006, compared to $146.7 million
for 2005 and $49.9 million for the fourth quarter 2005. The increase
in natural gas and oil revenues reflects increased production volumes
and improved crude oil and natural gas price realizations in the Gulf
of Mexico offset by lower natural gas price realizations in the North
Sea.
Lease operating expense (LOE) per Mcfe was $1.42 for 2006 and
$1.15 for the fourth quarter 2006, compared to $1.19 for 2005 and
$1.53 for the fourth quarter 2005. The annual 2006 per Mcfe increase
reflects the price spikes experienced for materials and labor in the
Gulf of Mexico after the 2005 hurricanes. The fourth quarter 2006
decrease is primarily attributable to higher production volumes.
General and administrative expense (G&A) totaled $21.5 million for
2006 and $7.0 million for the fourth quarter 2006, compared to $24.3
for 2005 and $11.0 million for the fourth quarter 2005. The decrease
in G&A was primarily due to the prior year inclusion of the ATP
Employee Volvo Challenge and other compensation-related costs.
Depreciation, depletion, and amortization (DD&A) per Mcfe was
$3.34 for 2006 and $3.52 for the fourth quarter 2006, compared to
$3.22 for 2005 and $2.99 for the fourth quarter 2005. The increase in
DD&A per Mcfe primarily reflects continued increases in offshore
project costs.
ATP recorded a net loss available to common shareholders for 2006
of $39.3 million or $1.33 per basic and diluted share, compared to a
net loss available to common shareholders for 2005 of $12.6 million or
$0.43 per basic and diluted share. ATP recorded a net loss available
to common shareholders for the fourth quarter 2006 of $37.0 million or
$1.24 per basic and diluted share, compared to net income available to
common shareholders for the fourth quarter 2005 of $0.3 million or
$0.01 per basic and diluted share.
Net income available to common shareholders for 2006 was impacted
by three non-cash items, including impairment of oil and gas
properties of $19.5 million, a loss on abandonment of $9.6 million,
and a loss on extinguishment of debt of $28.1 million. Research
analysts typically exclude these items from their published estimates.
Accordingly, after adjusting for these items, ATP had net income
available to common shareholders of $17.9 million or $0.60 and $0.59
per basic and diluted share. A non-GAAP reconciliation is provided
near the end of this press release.
ATP's selected operating statistics and financial information,
included within this press release, contain additional information on
the company's activities for annual and fourth quarter 2006 as well as
comparable periods in 2005.
Three Months Ended Year Ended
December 31, December 31,
--------------------------------------
2006 2005 2006 2005
------------------ -------------------
Selected Operating Statistics
Production
Natural gas (MMcf) 8,844 4,582 31,224 15,614
Oil and condensate (MBbls) 1,091 133 3,273 717
Natural gas equivalents
(MMcfe) 15,392 5,377 50,860 19,914
Gulf of Mexico (GOM, in
MMcfe) 11,545 5,034 38,696 18,659
North Sea (MMcfe) 3,846 343 12,164 1,255
Average Prices (includes effect
of cash flow hedges)
Natural gas (per Mcf) $ 8.29 $ 9.64 $ 7.50 $ 7.46
Natural gas (per Mcf) - GOM 7.90 9.20 7.59 7.31
Natural gas (per Mcf) - N.
Sea 8.80 15.06 7.35 9.17
Oil and condensate (per Bbl) 49.28 43.03 54.25 41.92
Natural gas, oil and
condensate (per Mcfe) 8.26 9.27 8.14 7.36
Other Expenses, per Mcfe
Lease operating expense (per
Mcfe) $ 1.15 $ 1.53 $ 1.42 $ 1.19
Lease operating expense
(per Mcfe) - GOM 0.97 1.54 1.42 1.16
Lease operating expense
(per Mcfe) - N. Sea 1.69 1.50 1.45 1.60
Depreciation, depletion and
amortization (DD&A) 3.52 2.99 3.34 3.22
DD&A - GOM 3.35 2.93 3.27 3.17
DD&A - N. Sea 4.01 3.80 3.53 3.93
Selected Financial Data
(In Thousands, Except Per Share
Data)
Oil and gas revenues, including
settled derivatives (1) $132,869 $49,864 $414,072 $146,484
Net income (loss) (20,147) 6,426 6,877 (2,716)
Preferred dividends (16,885) (6,102) (46,225) (9,858)
Net income (loss) available to
common shareholders (37,032) 324 (39,348) (12,574)
Net income (loss) per common
share - basic and diluted $ (1.24) $ 0.01 $ (1.33) $ (0.43)
================== ===================
Average number of common shares
outstanding
Basic 29,841 29,301 29,693 29,080
================== ===================
Diluted 30,911 30,113 30,402 29,902
================== ===================
- -------------------------------
(1) See oil and gas revenue reconciliation on the last page of this
press release.
2006 Gulf of Mexico Acquisitions
ATP acquired an interest in eight Gulf of Mexico blocks during
2006, five of which came from three private company transactions. The
remaining three blocks were acquired at the 2006 Western and Central
Gulf of Mexico Lease Sales. Total cash acquisition costs in the Gulf
of Mexico in 2006 were $34.4 million.
Telemark Hub -- ATP acquired a 100% working interest in
Mississippi Canyon 941 and 942 and Atwater Valley 63, collectively
called the Telemark Hub, in two separate private transactions in the
second and third quarters 2006. The Telemark Hub contains proved and
probable reserves as well as additional exploratory opportunities. As
of December 31, 2006, the company had begun engineering and
construction of a floating drilling and production facility for the
Telemark Hub which is expected to be installed in mid-2008. ATP serves
as operator of each of the blocks.
Ship Shoal 351 -- ATP increased its working interest from 50% to
100% at Ship Shoal 351. There are no proved reserves associated with
this acquisition, although previous drilling has indicated the
presence of recoverable hydrocarbons.
Offshore Lease Sales -- ATP acquired a 100% working interest in
Green Canyon 37 at the Central Gulf of Mexico Offshore Lease Sale held
March 15, 2006. Green Canyon 37, which is located in 1,800 feet of
water, was originally drilled in 1996 and logged both gas and oil pay
sands, but was not taken to development during a period of relatively
low oil and gas prices. ATP acquired a 100% working interest in Garden
Banks 388 and Garden Banks 187 at the Western Gulf of Mexico Lease
Sale held August 16, 2006. Previous drilling at Garden Banks 388
encountered logged hydrocarbons. All of these properties are scheduled
for development during the next three-year period.
2007 Gulf of Mexico Acquisitions
King's Peak/Canyon Express Hub -- On January 8, 2007, ATP expanded
its King's Peak/Canyon Express Hub with the acquisition of a 50%
working interest in MC 305 ("Aconcagua"), a 17% working interest in MC
348 ("Camden Hills"), and an additional 26% interest in the Canyon
Express Pipeline Common System ("Canyon Express"). Both Aconcagua
(located in 6,820' of water) and Camden Hills (located in 7,112' of
water) along with King's Peak produce through Canyon Express in which
ATP now owns a 45% interest as a result of this acquisition.
Gomez Hub (MC 711/667/668/754/755/800) -- On January 24, 2007, ATP
expanded its Gomez Hub with the acquisition of a 100% working interest
in MC 755 ("Anduin") and the potential to earn a 50% working interest
in MC 754 ("Anduin West") and a 25% working interest in MC 800
("Gladden").
2006 North Sea Acquisitions
Wenlock Hub -- ATP's wholly-owned subsidiary, ATP Oil & Gas (U.K.)
Limited, acquired a 100% working interest in Block 49/12b in the
Southern Gas Basin of the U.K. North Sea during the fourth quarter
2006. Block 49/12b is a high potential exploratory opportunity
offsetting the company's Wenlock development. The exploratory well
will be drilled from ATP's Wenlock platform, and if successful, will
be immediately completed and placed on production.
Operations and Development
During 2006, ATP placed eight wells on production and achieved a
155% increase in production. Since the company's last operations
update on January 10, 2007, ATP has placed three wells on production.
January and February 2007 production averaged 172 MMcfe/d. ATP's
current production is averaging approximately 210 MMcfe/d, and
depending upon natural gas prices in the North Sea, ATP projects a
first quarter exit rate of 200 to 250 MMcfe/d. One additional well is
scheduled to commence production before the end of the first quarter
2007. By mid-2007, ATP intends to upgrade facilities capacity at MC
711 to approximately 200 MMcfe/d net as well as bring to production
four additional wells in the Gulf of Mexico and U.K. North Sea.
Gulf of Mexico Deepwater
Gomez Hub (MC 711/667/668/754/755/800) -- ATP placed MC 711 on
production on March 9, 2006. The property produced 21 Bcfe net through
year-end 2006 from two wells located in the southern portion of the MC
711 block. The third well at Gomez, located in the northern portion of
the MC 711 block, was completed during the third quarter 2006 and
production commenced on March 1, 2007. Production from the third well
will be gradually increased until total field production reaches 120
MMcfe/d net, the production capacity prior to upgrading the
facilities.
ATP moved a drilling rig on location immediately following the
acquisition of a 100% working interest in MC 755 (Anduin) on January
24, 2007. The drilling rig has encountered the productive reservoir
and completion operations are underway. Anduin will be tied back to
the ATP Innovator at MC 711 and is scheduled to be placed on
production in mid-2007. The ATP Innovator is the company's first
floating production system for its Hub concept in the Gulf of Mexico
and North Sea. The Hub concept provides ATP a competitive advantage
within the area and allows the company to spread the costs of
facilities over multiple properties.
Upon the successful completion of Anduin, ATP will also earn
interests in two prospects: a 50% working interest in MC 754 and a 25%
working interest in MC 800 (Gladden). Gladden is scheduled to be
drilled later this year with MC 754 planned for 2008. As part of the
purchase and sale agreement, ATP has agreed to process hydrocarbons
from MC 754 and/or MC 800 starting in January 2009.
The next well planned for the Gomez Hub is the step out MC 667 #1
which will target possible gas-bearing sands at 11,500' true vertical
depth and, if commercial, is scheduled to be placed on production in
mid-2007.
Telemark Hub (MC 941/942 and Atwater Valley 63) -- Engineering and
construction of a MinDOC system, ATP's second floating production
facility, is underway with installation scheduled for mid-2008. The
MinDOC hull design was selected over competing technologies because of
higher variable load capacity and lower cost. Drilling will commence
immediately after platform installation from a 2,000 hp platform rig.
Ladybug Hub (Garden Banks 409 and 410) -- Ladybug resumed
production on February 13, 2007 from a new well drilled to an updip
attic location and a previously behind pipe zone of an existing well.
The field is currently producing 15 MMcfe/d net from two wells.
Gulf of Mexico Shelf
Development -- On the Gulf of Mexico Shelf during 2006, five wells
were drilled, all of which were successful. Four of the wells located
at West Cameron 663, High Island 74, South Marsh Island 233 and West
Cameron 237 were completed and placed on production in 2006. The
remaining well at South Timbalier 77 is expected to be placed on
production in the first half of 2007.
South Timbalier ("ST") 77 -- The ST 77 exploratory well discovered
commercial hydrocarbons at the 16,000' level. The well has been
completed. The company is currently installing a platform and a 2-mile
pipeline. First production is expected late first quarter 2007. ATP
operates ST 77 with a 78% working interest.
Ship Shoal ("SS") 351 -- During the first quarter 2007, ATP
completed the installation of a platform and commenced drilling the
first of at least a two-well program. This property is scheduled for
initial production in the second quarter 2007. ATP operates SS 351
with a 100% working interest.
North Sea
Tors (Kilmar & Garrow) -- The Garrow G1 well commenced production
on February 20, 2007. The Tors field, including the Garrow G1 well and
Kilmar K1 and K2 wells, is currently producing in excess of 50 MMcfe/d
net. ATP intends to drill up to two more wells at its Tors field,
including the third Kilmar well scheduled to spud in mid-2007. ATP
operates the Tors field with an 85% working interest.
Wenlock -- The jacket and deck were installed in 2006.
Installation of the 27-kilometer pipeline was completed in the first
quarter 2007. The horizontal well is scheduled to spud in March 2007
and will target a 150-meter column of Rotliegend sandstone as well as
an exploratory opportunity in an adjacent and upthrown fault block.
First production is expected in the second quarter 2007. ATP operates
Wenlock with a 100% working interest.
Capital Resources and Liquidity
The 2006 acquisitions along with the significant increase in
proved reserves and proved developed reserves coupled with additional
recoverable hydrocarbons identified by ATP and the increase in
production allowed the company to complete three new financings in
2006. During the first quarter 2006, ATP issued $150.0 million of
non-convertible perpetual preferred stock, which raised net proceeds
of $145.5 million. The security did not have a stated maturity and
accrued dividends at a rate of 12.5%. During the second quarter 2006,
ATP amended and improved the terms of the company's Senior Secured
Credit Facility by expanding it to $525.0 million and reducing the
interest rate. Net of transaction costs, this amendment added $167.7
million in additional liquidity.
In the fourth quarter 2006, ATP redeemed all of its outstanding
preferred shares by expanding the company's first lien term loan by
$375.0 million, adding a new revolving credit facility of up to $50.0
million and adding a new second lien facility of $175.0 million.
Subsequent to the closing, ATP had first lien debt of $898.7 million
at a rate of LIBOR plus 3.5% with a maturity of April 14, 2010, an
additional undrawn $50.0 million revolving credit facility with a rate
of LIBOR plus 3.5% with a maturity of October 14, 2009, and a new
second lien tranche of $175.0 million at a rate of LIBOR plus 4.75%
with a maturity of October 14, 2010. The collateral package for these
facilities is similar to the previous first lien facility. The new
financing added $155.5 million in additional liquidity and reduced the
overall cost of capital (preferred dividends plus interest) by
approximately 200 basis points.
Cash flow from operating activities was $258.5 million for the
year ended December 31, 2006, compared to $43.6 million in cash flow
from operating activities for 2005. Cash flow from operating
activities prior to changes in assets and liabilities (a non-GAAP
measure frequently used by research analysts) was a record $266.3
million for the year ended December 31, 2006, compared to $67.9
million for the same period in 2005. A non-GAAP reconciliation is
provided near the end of this press release. ATP had working capital
at December 31, 2006 of $77.5 million, an increase of approximately
$76.9 million from December 31, 2005. This increase is primarily
attributable to fourth quarter 2006 financings discussed in the
previous paragraph.
ATP had $182.6 million in cash and cash equivalents on hand at
December 31, 2006, compared to $65.6 million at December 31, 2005.
Cash paid for acquisition and development activities for the year 2006
was $577.0 million, compared to $420.5 million in 2005.
2007 Operational and Financial Objectives
ATP will continue to pursue acquisitions that meet its criteria as
well as devote considerable resources to the company's developments in
2007. In January 2007, ATP acquired additional blocks at its Gomez Hub
and King's Peak/Canyon Express Hub. The Gomez Hub addition is expected
to add proved undeveloped reserves, an interest in two adjacent blocks
and a commitment to process up to a designated amount of production
from these two blocks beginning in 2009. The blocks at the King's
Peak/Canyon Express Hub included an increase in the company's
ownership percentage in the Canyon Express Pipeline System and one
producing property, which will add proved reserves. The technical
evaluation of these properties is being refined and no reserves from
these 2007 acquisitions were included in ATP's year-end 2006 reserve
report.
During 2007, efforts will be spent completing and bringing to
production at least two more wells at Gomez and Ship Shoal 351 and an
additional well at South Timbalier 77. As noted earlier, the third
well at Tors (the Garrow #1) and the two wells at Ladybug began
producing during February 2007.
In addition to these developments, at December 31, 2006, ATP has
projects with proved undeveloped reserves that are scheduled for 2007
development and production. The company also has scheduled for
drilling or completion properties in which previous drilling into
targeted reservoirs indicates the presence of commercially productive
quantities of hydrocarbons, although these reservoirs did not meet the
SEC definition of proved reserves at the end of 2006. For example, the
previously discussed Ship Shoal 351 is a property that ATP believes
has commercially productive hydrocarbons that are not included in the
company's year-end 2006 reserve report.
The company has commenced engineering and design activities at its
Cheviot property in the U.K. North Sea. Cheviot, ATP's largest
property in terms of proved reserves, is a multi-year development with
first production targeted in late 2009 or 2010. ATP has also begun
engineering, procurement and construction at its Telemark Hub in the
Gulf of Mexico. Installation of the floating drilling and production
facility is planned for mid-2008 with first anticipated production in
late 2008 or early 2009. Other potential developments for 2007 in the
Gulf of Mexico and North Sea are currently being evaluated. ATP
believes its 2007 production will exceed that of 2006 as a result of
the company's recent development programs and projects scheduled for
development in 2007.
ATP's production may command lower realized oil and gas prices in
2007 than in recent years as a result of current strip prices compared
to recent years. The company's 2007 contracted hedge prices are
currently in excess of many of the 2007 strip prices which should
provide a realized price in excess of the strip prices for those
volumes covered by hedges, if prices do not increase. ATP's revenues,
profitability and cash flows are highly dependent upon many factors,
particularly the company's production results and the price of oil and
natural gas. To mitigate future price volatility, ATP may hedge
additional production.
4th Quarter 2006 Conference Call
ATP Chairman and President T. Paul Bulmahn, Senior Vice President
Gerald W. Schlief, Chief Operating Officer Leland E. Tate and Chief
Financial Officer Albert L. Reese, Jr will host a live conference call
on Friday, March 2 at 10:00 am central time to discuss the company's
year-end results followed by a Q&A session.
4th Quarter and Year-end 2006 Conference Call
Date: Friday, March 2, 2007
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 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) 819-9193. The audio download file in MP3 format will be
released within 48 hours of the call. A digital replay of the
conference call will be available at 888-203-1112, ID number 4920156,
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
ATP Oil & Gas is focused on development and production of natural
gas and oil 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)
December 31, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 182,592 $ 65,566
Restricted cash 27,497 12,209
Accounts receivable (net of allowances of
$409 and $367) 105,030 83,571
Deferred tax asset 1,113 -
Derivative asset 1,170 -
Other current assets 9,931 4,454
------------ ------------
Total current assets 327,333 165,800
------------ ------------
Oil and gas properties:
Oil and gas properties (using the
successful efforts method of accounting) 1,539,352 899,284
Less: Accumulated depletion, impairment
and amortization (443,707) (271,863)
------------ ------------
Oil and gas properties, net 1,095,645 627,421
------------ ------------
Furniture and fixtures, net 1,079 1,175
Deferred tax asset - 4,025
Deferred financing costs, net 13,272 17,922
Other assets, net 9,729 7,420
------------ ------------
24,080 30,542
------------ ------------
Total assets $ 1,447,058 $ 823,763
============ ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 195,846 $ 144,675
Current maturities of long-term debt 8,987 3,500
Current maturities of long-term capital
lease 23,699 8,679
Asset retirement obligation 21,297 7,097
Derivative liability - 1,282
------------ ------------
Total current liabilities 249,829 165,233
Long-term debt 1,062,454 337,489
Long-term capital lease - 34,437
Asset retirement obligation 87,092 60,267
Deferred tax liability 11,765 -
Other long-term liabilities and deferred
obligations - 8,826
------------ ------------
Total liabilities 1,411,140 606,252
------------ ------------
Shareholders' equity:
Preferred stock: $0.001 par value - 184,858
Common stock: $0.001 par value 30 29
Additional paid-in capital 151,467 149,267
Accumulated deficit (140,681) (101,333)
Accumulated other comprehensive income 26,013 (4,693)
Unearned compensation - (9,706)
Treasury stock, at cost (911) (911)
------------ ------------
Total shareholders' equity 35,918 217,511
------------ ------------
Total liabilities and shareholders'
equity $ 1,447,058 $ 823,763
============ ============
CONSOLIDATED INCOME STATEMENTS
(In Thousands, Except Per Share Amounts)
Three Months Ended Year Ended
December 31, December 31,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Oil and gas revenues $132,869 $ 49,864 $419,821 $146,674
--------- --------- --------- ---------
Costs and operating expenses:
Lease operating 17,646 8,252 72,446 23,629
Exploration 63 633 2,231 6,208
General and administrative 7,022 11,028 21,499 24,274
Stock-based compensation 2,791 57 11,477 57
Depreciation, depletion and
amortization 54,159 16,076 169,704 64,069
Impairment of oil and gas
properties 7,760 - 19,520 -
Accretion 2,603 1,437 8,076 3,238
(Gain) loss on abandonment 5,748 (1,056) 9,603 (732)
Gain on disposal of oil &
gas properties - (2,743) - (2,743)
--------- --------- --------- ---------
Total costs and operating
expenses 97,792 33,684 314,556 118,000
--------- --------- --------- ---------
Income from operations 35,077 16,180 105,265 28,674
--------- --------- --------- ---------
Other income (expense):
Interest income 1,375 1,058 4,532 4,064
Interest expense (19,969) (11,076) (58,018) (35,720)
Loss on debt extinguishment (28,115) - (28,115) -
Other income 7 417 7 419
--------- --------- --------- ---------
Total other income
(expense) (46,702) (9,601) (81,594) (31,237)
--------- --------- --------- ---------
Income (loss) before income
taxes (11,625) 6,579 23,671 (2,563)
Provision for income taxes (8,522) (153) (16,794) (153)
--------- --------- --------- ---------
Net income (loss) $(20,147) $ 6,426 $ 6,877 $ (2,716)
========= ========= ========= =========
Preferred dividends (16,885) (6,102) (46,225) (9,858)
--------- --------- --------- ---------
Net income (loss) available to
common shareholders $(37,032) $ 324 $(39,348) $(12,574)
========= ========= ========= =========
Net income (loss) per common
share - basic and diluted $ (1.24) $ 0.01 $ (1.33) $ (0.43)
========= ========= ========= =========
Weighted average number of
common shares:
Basic 29,841 29,301 29,693 29,080
========= ========= ========= =========
Diluted 29,841 30,113 29,693 29,080
========= ========= ========= =========
CONSOLIDATED CASH FLOW DATA
(In Thousands)
Year Ended
December 31,
---------------------
2006 2005
---------- ----------
Cash flows from operating activities:
Net income (loss) $ 6,877 $ (2,716)
Adjustments to operating activities 259,444 70,664
Changes in assets and liabilities (7,807) (24,360)
---------- ----------
Net cash provided by operating activities 258,514 43,588
---------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (577,012) (420,516)
Proceeds from disposition of assets - 19,820
Additions to furniture and fixtures (381) (900)
Increase in restricted cash (13,290) (12,476)
---------- ----------
Net cash used in investing activities (590,683) (414,072)
---------- ----------
Cash flows from financing activities:
Proceeds from long-term debt 728,500 132,113
Principal payments of long-term debt (4,435) (3,175)
Deferred financing costs (24,551) (10,416)
Issuance of preferred stock, net of related
costs 145,463 169,437
Redemption of preferred stock (381,083) -
Proceeds from capital lease - 44,774
Principal payments of capital lease (20,869) (1,658)
Exercise of stock options 4,966 4,507
Other - (68)
---------- ----------
Net cash provided by financing activities 447,991 335,514
---------- ----------
Effect of exchange rate changes on cash 1,204 (2,238)
---------- ----------
Net increase (decrease) in cash and cash
equivalents 117,026 (37,208)
Cash and cash equivalents, beginning of period 65,566 102,774
---------- ----------
Cash and cash equivalents, end of period $ 182,592 $ 65,566
========== ==========
Hedges, Derivatives and Fixed Price Contracts
2007
--------------------------------------
1Q 2Q 3Q 4Q
--------------------------------------
Gulf of Mexico
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 2,255 3,175 2,740 3,648
Price ($/MMBtu) $ 9.81 $ 8.17 $ 8.24 $ 8.40
Crude Oil
Volumes (MBbls) 297 346 396 396
Price ($/Bbl) $ 69.61 $ 70.74 $ 70.90 $ 70.90
Equivalents
Volumes (MMMBtue) 4,037 5,250 5,114 6,022
Price ($/MMBtue) $ 10.60 $ 9.60 $ 9.90 $ 9.74
Puts
Crude Oil
Volumes (MBbls) 585 91 92 92
Floor Price ($/Bbl) $ 57.88 $ 60.00 $ 60.00 $ 60.00
North Sea
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 2,700 910 920 4,600
Price ($/MMBtu) $ 12.47 $ 7.88 $ 7.88 $ 9.15
- ----------------------------------------------------------------------
2008 2009
------------------------------- -------
1Q 2Q 3Q 4Q 1Q
------------------------------- -------
Gulf of Mexico
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 4,078 2,720 2,740 1,530 900
Price ($/MMBtu) $ 8.45 $ 8.09 $ 8.09 $ 8.07 $ 8.05
Crude Oil
Volumes (MBbls) 182 182 184 184 -
Price ($/Bbl) $73.25 $73.25 $73.25 $73.25 $ -
Equivalents
Volumes (MMMBtue) 5,170 3,812 3,844 2,634 900
Price ($/MMBtue) $ 9.24 $ 9.27 $ 9.27 $ 9.81 $ 8.05
Puts
Crude Oil
Volumes (MBbls) - - - - -
Floor Price ($/Bbl) $ - $ - $ - $ - $ -
North Sea
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 4,550 3,640 3,680 2,300 1,350
Price ($/MMBtu) $ 9.46 $ 6.37 $ 6.37 $ 8.95 $ 7.56
- ----------------------------------------------------------------------
Exchange rate = 1.9643 USD/GBP
The above are hedges, derivatives and fixed price contracts that are
currently in effect or have settled prior to such date.
Additional hedges, derivatives and fixed price contracts, if any, will
be announced during the year.
- ----------------------------------------------------------------------
Recent North Sea Gas Fixed Forwards:
February 1, 2007: 15,000 MMBtu/d October 2007 to March 2008 at GBP
3.86/MMBtu
February 1, 2007: 10,000 MMBtu/d April 2008 to September 2008 at GBP
2.90/MMBtu
February 1, 2007: 10,000 MMBtu/d October 2008 to March 2009 at GBP
3.85/MMBtu
Recent Gulf of Mexico Gas Fixed Forwards:
February 14, 2007: 8,000 MMBTU/day November 2007 to March 2008 at
$9.1875
February 14, 2007: 210,000 MMBTU/month November 2007 to March 2008
at $9.16
February 21, 2007: 5,000 MMBTU/day March 2007 to May 2007 at $7.71
February 21, 2007: 150,000 MMBTU/month March 2007 at $7.80
February 21, 2007: 150,000 MMBTU/month April 2007 at $7.86
Cash Flow From Operating Activities
(In Thousands)
Year Ended
December 31,
-------------------
2006 2005
--------- ---------
Cash flows from operating activities:
Net income (loss) $ 6,877 $ (2,716)
Adjustments to operating activities 259,444 70,664
--------- ---------
Cash flows from operating activities before
changes in assets and liabilities 266,321 67,948
Changes in assets and liabilities (7,807) (24,360)
--------- ---------
Net cash provided by operating activities $258,514 $ 43,588
========= =========
Net Income Before Impairment, Loss on Debt Extinguishment and
Abandonment of Oil and Gas Properties
(In Thousands)
Year Ended
December 31,
-------------------
2006 2005
--------- ---------
Net income (loss) available to common shareholders $(39,349) $(12,574)
Impairment of oil and gas properties 19,520 -
Loss on debt extinguishment 28,115 -
(Gain) loss on abandonment 9,603 (732)
-------------------
Pro forma net income (loss) available to common
shareholders before significant non-recurring
charges $ 17,889 $(13,306)
========= =========
Pro forma net income (loss) per common share:
Basic $ 0.60 $ (0.46)
========= =========
Diluted $ 0.59 $ (0.46)
========= =========
Weighted average number of common shares:
Basic 29,693 29,080
========= =========
Diluted 30,402 29,080
========= =========
Three Months Ended Year Ended
December 31, December 31,
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
Oil and gas revenues, including
the effects of settled
derivatives (1) $127,075 $49,864 $414,072 $146,484
Loss of Production Insurance
proceeds 5,639 - 5,639 -
Hedging ineffectiveness and
other (2) 155 - 110 190
--------- -------- --------- ---------
Oil and gas revenue per income
statements $132,869 $49,864 $419,821 $146,674
========= ======== ========= =========
(1) Oil and gas revenues including the effects of settled derivative
activities differ from ATP's reported revenues from oil and gas
production because such numbers omit the effects of previously
recognized changes in the fair market value of derivatives settled
during the period. Set forth above is a table reconciling the
presented information with revenues from oil and gas production. The
total of oil and gas revenues, including the effects of settled
derivative activities, is presented because of its acceptance as an
indicator of the company's realized cash flow from its oil and gas
production during the period for which it is presented.
(2) Hedging ineffectiveness is the portion of gains (losses) on
derivatives that is based on imperfect correlations to benchmark oil
and natural gas prices.
CONTACT: ATP Oil & Gas Corporation
T. Paul Bulmahn, 713-622-3311
Chairman and President
Albert L. Reese Jr., 713-622-3311
Chief Financial Officer
www.atpog.com