Exhibit 99.1
ATP Achieves Record Quarterly Net Income and Revenue
HOUSTON--(BUSINESS WIRE)--May 10, 2007--ATP Oil & Gas Corporation
(NASDAQ: ATPG) today announced first quarter 2007 results and provided
an operations update.
-- Achieved quarterly record net income of $0.92 per basic share;
-- Achieved quarterly record revenue of $146.3 million;
-- Expanded the Canyon Express Hub;
-- Expanded the Gomez Hub;
-- Expanded the Tors Hub;
-- Lowered cost of capital by refinancing Libor + 4.75% second
lien debt with first lien debt at Libor + 3.5% and improved
financial strength by adding $191.5 million in liquidity.
Results of Operations
Natural gas and oil production increased 168% from 5.9 Bcfe (66
MMcfe/d) for the first quarter 2006 to 15.9 Bcfe (177 MMcfe/d).
Natural gas, oil and condensate price realizations per Mcfe increased
19% from $7.62 for the first quarter 2006 to $9.11. The increase in
price realizations primarily reflects improved cash flow hedges.
Revenues from production increased 220% from $45.2 million for the
first quarter 2006 to $144.7 million. The increase in revenue was
principally due to the aforementioned increases in production and
price realizations.
Lease operating expenses (LOE) per Mcfe was $1.33, compared to
$1.80 per Mcfe in the first quarter 2006. The decrease per Mcfe was
primarily attributable to higher production levels during 2007 and the
additional first quarter 2006 costs related to the 2005 hurricanes.
General and administrative (G&A) expense increased $0.8 million to
$8.8 million from the first quarter 2006. Included in G&A expense is
$1.6 million in the first quarter 2007 and $2.2 million in the first
quarter 2006 of non-cash stock based compensation. The G&A increase
was primarily due to increased employee compensation and higher legal,
professional and accounting fees. Depreciation, depletion, and
amortization (DD&A) per Mcfe was $3.36 for the first quarter, compared
to $2.91 for the first quarter 2006.
ATP recorded net income available to common shareholders in the
first quarter of $27.4 million or $0.92 per basic share and $0.89 per
diluted share, compared to a net loss available to common shareholders
of $9.9 million or $0.34 per basic and diluted share in the first
quarter 2006.
The company's selected operating statistics and financial
information included within this press release contains additional
information on activities for the first quarter and the comparable
2006 period.
Three Months Ended
March 31,
-------------------
2007 2006
--------- --------
Selected Operating Statistics
Production
Natural gas (MMcf) 9,825 5,033
Gulf of Mexico 6,138 4,426
North Sea 3,687 607
Oil and condensate (MBbls) 1,012 150
Gulf of Mexico 1,005 150
North Sea 7 -
Natural gas equivalents (MMcfe) 15,896 5,935
Gulf of Mexico 12,170 5,326
North Sea 3,727 608
Average Prices (includes effect of cash
flow hedges)
Natural gas (per Mcf) $9.15 $7.65
Gulf of Mexico 8.47 7.40
North Sea 10.29 9.48
Oil and condensate (per Bbl) 54.09 44.72
Natural gas, oil and condensate (per Mcfe) 9.11 7.62
Other Expenses, per Mcfe
Lease operating expense (per Mcfe) $1.33 $1.80
Gulf of Mexico 1.27 1.85
North Sea 1.49 1.36
Depreciation, depletion and amortization (DD&A) 3.36 2.91
Gulf of Mexico 3.11 2.82
North Sea 4.18 3.67
Selected Financial Data
(In Thousands, Except Per Share Data)
Oil and gas revenues, including settled derivatives
(1) $144,675 $45,225
Net income (loss) 27,434 (3,045)
Preferred dividends - (6,818)
Net income (loss) available to common shareholders 27,434 (9,863)
Net income (loss) per common share - basic $0.92 $(0.34)
========= ========
Net income (loss) per common share - diluted $0.89 $(0.34)
========= ========
Average number of common shares outstanding
Basic 29,969 29,435
========= ========
Diluted 30,702 29,435
========= ========
__________________
(1) See oil and gas revenue reconciliation on the last page of this
press release.
Acquisitions
Gomez Hub Expansion - On January 23, 2007, ATP acquired, primarily
through the granting of a limited net profits interest, a 100% working
interest in Mississippi Canyon ("MC") 755 ("Anduin"), a 50% working
interest in a prospect at MC 754 ("Anduin West"), and a 25% working
interest in a prospect at MC 800 ("Gladden").
Canyon Express Hub Expansion - On January 8, 2007, ATP completed
the acquisition of a 50% working interest in MC Block 305
("Aconcagua"), a 16.7% working interest in MC Block 348 ("Camden
Hills"), and an additional 25.8% interest in 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 the
company's King's Peak field, produce through the Canyon Express
pipeline, in which ATP owns a 45.1% interest following this
acquisition. In addition to the proved producing reserves, ATP
completed this transaction primarily to acquire the undeveloped
reservoirs of Aconcagua, for further study of Camden Hills, and to
expand its interest in the Canyon Express Hub.
Operations and Development
North Sea
Tors - Production commenced from the Garrow G1 well in February
2007. The G1 well, along with the Kilmar K1 and K2 wells, comprise the
three producing wells at Tors. The Kilmar K3 well, which is scheduled
to be drilled this summer, will be the fourth well at Tors and should
increase field production capacity to approximately 80 MMcf/d net. At
this time, ATP anticipates drilling additional wells, subject to
reservoir performance.
Wenlock - ATP is currently drilling the horizontal leg of the
Wenlock W1 well in the productive horizon. The W1 well is expected to
be completed before the end of the second quarter with first
production scheduled this summer.
Gulf of Mexico Deepwater
Gomez Hub - Immediately following the acquisition of Anduin, ATP
moved a semi-submersible drilling rig on location to reenter,
sidetrack and complete the MC 755 #2 ST1 well. The operation was
successful and the well will be tied back to the ATP Innovator and
placed on production this summer.
ATP is currently drilling the second stage of the MC 711 #8 well
and is targeting proved, probable, and logged hydrocarbons in the
northern portion of the MC 711 block. The first stage of the well
targeted an extension opportunity in an adjacent fault block on MC
667. This zone contained an insufficient amount of pay and has been
deemed non-commercial. As a result, ATP expects to record exploration
expense of approximately $10 million in the second quarter for the
portion of the well attributable to MC 667. The development well
should be completed by the second quarter and placed on production
this summer.
Production commenced from the MC 711 #5 well located in the
northern portion of the block in March 2007. This well brought field
production to approximately 115 MMcfe/d net, meeting the current
processing capacity of the ATP Innovator. ATP intends to expand the
capacity of the ATP Innovator to approximately 200 MMcfe/d this
summer. The facility upgrade should take roughly 30 to 45 days and
involves installing a second natural gas compression and processing
module on the platform and redesigning the subsea architecture to
accommodate additional wells, including the Anduin discovery (MC 755
#2 ST1) and the second northern well at MC 711 (MC 711 #8).
Telemark Hub (MC 941/942 and Atwater Valley 63) - The hull and
topsides construction of the MinDOC are progressing. The well design
and planning are also underway. The MinDOC sail-out is scheduled for
summer 2008 with first production late in 2008.
Gulf of Mexico Shelf
Ship Shoal ("SS") 351 - Two successful wells were drilled during
2007. Based on these results, the company intends to drill up to three
additional wells before beginning completion operations. SS 351 will
be tied back to ATP's SS 358 platform and is scheduled to commence
production late in the second quarter.
South Timbalier ("ST") 77 - ATP drilled the ST 77 #6 extension
well. This well found proved reserves in the adjacent fault block from
ATP's ST 77 #4 well and commenced production on March 15, 2007.
High Island ("HI") A-589 - The jacket and topsides construction
are underway with installation of the platform scheduled for July
2007. The platform rig from SS 351 will move to HI A-589 once the
drilling program at SS 351 is complete. There are up to two wells
planned for HI A-589 with first production expected late 2007 or early
2008.
Capital Resources and Liquidity
During the first quarter, ATP expanded and improved the terms of
its first lien term loans. The expansion resulted in $191.5 million of
incremental proceeds. The company refinanced its $175.0 million second
lien term loan with first lien term loan proceeds at an annual
interest savings of 1.25% or $2.2 million. The interest rate of LIBOR
+ 3.5% and maturity of April 14, 2010 of the first lien term loan
remains unchanged. The amendment also allows for a pre-agreement for
an MLP structure of up to $500 million.
Cash flow from operating activities was $84.2 million during the
first quarter, compared to $28.8 million in cash flow from operating
activities for the same 2006 period. Cash flow from operating
activities prior to changes in assets and liabilities, a non-GAAP
measure frequently used by research analysts, was $96.2 million for
the first quarter, compared to $19.5 million for the same 2006 period.
A non-GAAP reconciliation of cash flow from operating activities prior
to changes in assets and liabilities can be found near the end of this
press release.
At March 31, 2007, ATP had working capital of $127.4 million,
compared to $77.5 million at December 31, 2006. ATP had $261.7 million
in cash and cash equivalents on hand at March 31, 2007, compared to
$182.6 million in cash and cash equivalents at December 31, 2006. Cash
paid for acquisition and development activities for the three months
ended March 31, 2007 was $169.5 million, compared to $96.1 million in
the same 2006 period.
ATP has been active in the derivatives market this year. Since the
beginning of 2007, the company has purchased crude oil puts and
entered into crude oil and natural gas fixed forward sales
representing approximately 64 Bcfe of production at an average hedge
price of $8.71/Mcfe. In total for 2007, 2008, and 2009, ATP has 112
Bcfe hedged at an average price of $9.22/Mcfe, representing potential
future revenue of more than $1.0 billion. A complete listing of the
company's hedge positions can be found near the end of this press
release.
1st Quarter 2007 Conference Call
ATP Oil & Gas Corporation will host a live conference call on
Thursday, May 10th at 10:00 am central time. 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 discuss the company's first quarter results followed by a Q&A
session.
Date: Thursday, May 10, 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 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) 802-2266. 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
3595344, 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 an international offshore oil and gas development
and production company with operations in the Gulf of Mexico and the
North Sea. The company trades publicly as ATPG on the NASDAQ Global
Select Market. For more information about ATP Oil & Gas, 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 our 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 our SEC filings.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, December 31,
2007 2006
------------- -------------
Assets
Current assets:
Cash and cash equivalents $261,749 $182,592
Restricted cash 27,556 27,497
Accounts receivable (net of allowances of
$382 and $409) 91,231 105,030
Deferred tax asset 8,112 1,113
Derivative asset 367 1,170
Other current assets 10,012 9,931
------------- -------------
Total current assets 399,027 327,333
------------- -------------
Oil and gas properties:
Oil and gas properties (using the
successful efforts
method of accounting) 1,792,150 1,539,352
Less: Accumulated depletion, impairment
and amortization (497,287) (443,707)
------------- -------------
Oil and gas properties, net 1,294,863 1,095,645
------------- -------------
Furniture and fixtures, net 1,096 1,079
Deferred tax asset 1,515 -
Deferred financing costs, net 20,542 13,272
Other assets, net 9,571 9,729
------------- -------------
32,724 24,080
------------- -------------
Total assets $1,726,614 $1,447,058
============= =============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $220,252 $195,846
Current maturities of long-term debt 12,737 8,987
Current maturities of long-term capital
lease - 23,699
Asset retirement obligation 20,142 21,297
Other current liabilities 18,465 -
------------- -------------
Total current liabilities 271,596 249,829
Long-term debt 1,255,520 1,062,454
Asset retirement obligation 100,738 87,092
Deferred tax liability 27,511 11,765
Other long-term liabilities and deferred
obligations 4,765 -
------------- -------------
Total liabilities 1,660,130 1,411,140
------------- -------------
Shareholders' equity:
Preferred stock: $0.001 par value - -
Common stock: $0.001 par value 30 30
Additional paid-in capital 153,251 151,467
Accumulated deficit (113,247) (140,681)
Accumulated other comprehensive income 27,361 26,013
Treasury stock, at cost (911) (911)
------------- -------------
Total shareholders' equity 66,484 35,918
------------- -------------
Total liabilities and shareholders'
equity $1,726,614 $1,447,058
============= =============
CONSOLIDATED INCOME STATEMENTS
(In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
-------------------
2007 2006
--------- --------
Oil and gas revenues $144,749 $45,245
Other revenues 1,598 -
--------- --------
Total revenues 146,347 45,245
--------- --------
Costs and operating expenses:
Lease operating 21,069 10,693
Exploration 731 141
General and administrative 8,768 7,985
Depreciation, depletion and amortization 53,400 17,270
Accretion 2,960 1,547
Loss on abandonment 77 55
--------- --------
Total costs and operating expenses 87,005 37,691
--------- --------
Income from operations 59,342 7,554
--------- --------
Other income (expense):
Interest income 2,068 573
Interest expense (26,799) (11,172)
--------- --------
Total other income (expense) (24,731) (10,599)
--------- --------
Income (loss) before income taxes 34,611 (3,045)
--------- --------
Income tax expense:
Current (56) -
Deferred (7,121) -
--------- --------
Total (7,177) -
--------- --------
Net income (loss) $27,434 $(3,045)
========= ========
Preferred dividends - (6,818)
--------- --------
Net income (loss) available to common shareholders $27,434 $(9,863)
========= ========
Net income (loss) per common share:
Basic $0.92 $(0.34)
========= ========
Diluted $0.89 $(0.34)
========= ========
Weighted average common shares outstanding:
Basic 29,969 29,435
========= ========
Diluted 30,702 29,435
========= ========
CONSOLIDATED CASH FLOW DATA
(In Thousands)
Three Months Ended
March 31,
-------------------
2007 2006
--------- ---------
Cash flows from operating activities:
Net income (loss) $27,434 $(3,045)
Adjustments to operating activities 68,722 22,583
Changes in assets and liabilities (11,973) 9,306
--------- ---------
Net cash provided by operating activities 84,183 28,844
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (169,485) (96,077)
Additions to furniture and fixtures (154) (76)
Increase in restricted cash (14) (38)
--------- ---------
Net cash used in investing activities (169,653) (96,191)
--------- ---------
Cash flows from financing activities:
Proceeds from long-term debt 375,000 -
Principal payments of long-term debt (178,184) (875)
Deferred financing costs (8,445) -
Issuance of preferred stock, net of related costs - 145,463
Principal payments of capital lease (23,950) (2,089)
Exercise of stock options 230 1,200
--------- ---------
Net cash provided by financing activities 164,651 143,699
--------- ---------
Effect of exchange rate changes on cash (24) (3,852)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 79,157 72,500
Cash and cash equivalents, beginning of period 182,592 65,566
--------- ---------
Cash and cash equivalents, end of period $261,749 $138,066
========= =========
Hedges, Derivatives and Fixed Price Contracts
2007
---------------------------------------
1Q 2Q 3Q 4Q FY
------- ------- ------- ------- -------
Gulf of Mexico
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 2,255 3,175 2,740 3,648 11,818
Price ($/MMBtu) $9.81 $8.17 $8.24 $8.40 $8.57
Crude Oil
Volumes (MBbls) 297 346 396 396 1,434
Price ($/Bbl) $69.61 $70.74 $70.90 $70.90 $70.60
Equivalents
Volumes
(MMMBtue) 4,037 5,250 5,114 6,022 20,422
Price ($/MMBtue) $10.60 $9.60 $9.90 $9.74 $9.92
Puts
Crude Oil
Volumes (MBbls) 585 91 92 92 860
Floor Price
($/Bbl) $57.88 $60.00 $60.00 $60.00 $58.56
North Sea
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 2,700 910 920 5,520 10,050
Price ($/MMBtu) $12.69 $8.02 $8.02 $9.19 $9.92
Hedges, Derivatives and Fixed Price Contracts
2008
-------------------------------------------------
1Q 2Q 3Q 4Q FY
----------------- ------- ------- ------- -------
Gulf of Mexico
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 4,078 3,625 2,740 2,745 13,188
Price ($/MMBtu) $8.45 $7.98 $8.09 $8.43 $8.24
Crude Oil
Volumes (MBbls) 273 273 276 276 1,098
Price ($/Bbl) $70.76 $70.76 $70.76 $70.76 $70.76
Equivalents
Volumes
(MMMBtue) 5,716 5,263 4,396 4,401 19,776
Price ($/MMBtue) $9.41 $9.17 $9.49 $9.69 $9.43
Puts
Crude Oil
Volumes (MBbls) 619 619 626 626 2,489
Floor Price
($/Bbl) $54.68 $54.68 $54.68 $54.68 $54.68
North Sea
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 5,460 3,640 3,680 4,140 16,920
Price ($/MMBtu) $9.45 $6.49 $6.49 $8.95 $8.05
2009
---------------------------------------
1Q 2Q 3Q 4Q FY
------- ------- ------- ------- -------
Gulf of Mexico
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 2,700 1,815 1,830 1,830 8,175
Price ($/MMBtu) $8.60 $7.56 $7.57 $8.10 $8.03
Crude Oil
Volumes (MBbls) 180 182 184 184 730
Price ($/Bbl) $66.23 $66.23 $66.23 $66.23 $66.23
Equivalents
Volumes (MMMBtue) 3,780 2,907 2,934 2,934 12,555
Price ($/MMBtue) $9.29 $8.87 $8.87 $9.21 $9.08
Puts
Crude Oil
Volumes (MBbls) 369 373 377 377 1,497
Floor Price ($/Bbl) $54.00 $54.00 $54.00 $54.00 $54.00
North Sea
Fixed Forwards
Natural Gas
Volumes (MMMBtu) 3,150 - - - 3,150
Price ($/MMBtu) $8.30 $- $- $- $8.30
---------------------------------------------------------------------
Exchange rate = 1.9997 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 Swaps:
March 29, 2007: 5,000 MMBtu/d October 2008 to March 2009 at GBP
4.64/MMBtu
Recent Gulf of Mexico Oil Puts:
April 13, 2007: 4,100 Bbls/d January 2008 to December 2009 floor at
$54.00 /Bbl
April 13, 2007: 2,000 Bbls/d January 2008 to December 2008 floor at
$55.50 /Bbl
April 13, 2007: 700 Bbls/d January 2008 to December 2008 floor at
$56.30 /Bbl
Oil and Gas Revenue Reconciliation (1)
(In Thousands)
Three Months Ended
March 31,
------------------
2007 2006
--------- --------
Oil and gas revenues, including the effects of
settled derivatives (1) $144,675 $45,225
Hedging ineffectiveness and other (2) 74 20
--------- --------
Oil and gas revenue per income statements $144,749 $45,245
========= ========
(1) Oil and gas revenues including the effects of settled
derivative activities differ from our 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.
Cash Flow From Operating Activities
(In Thousands)
Three Months
Ended
March 31,
-----------------
2007 2006
-------- --------
Cash flows from operating activities:
Net income (loss) $27,434 $(3,045)
Adjustments to operating activities 68,722 22,583
-------- --------
Cash flows from operating activities
before changes in assets and liabilities 96,156 19,538
Changes in assets and liabilities (11,973) 9,306
-------- --------
Net cash provided by operating activities $84,183 $28,844
======== ========
CONTACT: ATP Oil & Gas
T. Paul Bulmahn, Chairman and President
Albert L. Reese Jr., Chief Financial Officer
713-622-3311
www.atpog.com