UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 000-32261
ATP OIL & GAS CORPORATION
(Exact name of registrant as specified in its charter)
| Texas | 76-0362774 | |||
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
4600 Post Oak Place, Suite 200
Houston, Texas 77027
(Address of principal executive offices)
(Zip Code)
(713) 622-3311
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x
The number of shares outstanding of Registrant’s common stock, par value $0.001, as of May 12, 2004, was 24,533,356.
ATP OIL & GAS CORPORATION
| Page | ||
| PART I. FINANCIAL INFORMATION |
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| ITEM 1. FINANCIAL STATEMENTS (Unaudited) |
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| Consolidated Balance Sheets: |
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| 3 | ||
| Consolidated Statements of Operations: |
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| 4 | ||
| Consolidated Statements of Cash Flows: |
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| 5 | ||
| Consolidated Statements of Comprehensive Income (Loss): |
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| 6 | ||
| 7 | ||
| ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
13 | |
| ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
18 | |
| 19 | ||
| 19 | ||
2
ITEM 1. FINANCIAL STATEMENTS
ATP OIL & GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
(Unaudited))
| March 31, 2004 |
December 31, 2003 |
|||||||
| Assets | ||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 36,801 | $ | 4,564 | ||||
| Accounts receivable (net of allowance of $1,266) |
32,134 | 15,874 | ||||||
| Assets held for sale |
7,398 | — | ||||||
| Deferred tax asset (net of valuation allowance of $271 at March 31, 2004) |
— | — | ||||||
| Other current assets |
2,863 | 2,461 | ||||||
| Total current assets |
79,196 | 22,899 | ||||||
| Oil and gas properties (using the successful efforts method of accounting) |
450,334 | 450,858 | ||||||
| Less: Accumulated depletion, impairment and amortization |
(263,347 | ) | (261,733 | ) | ||||
| Oil and gas properties, net |
186,987 | 189,125 | ||||||
| Furniture and fixtures (net of accumulated depreciation) |
690 | 666 | ||||||
| Deferred tax asset (net of valuation allowance of $34,484 at March 31, 2004 and $33,646 at December 31, 2003) |
— | — | ||||||
| Other assets, net |
10,211 | 4,995 | ||||||
| Total assets |
$ | 277,084 | $ | 217,685 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities |
||||||||
| Accounts payable and accruals |
$ | 63,241 | $ | 63,054 | ||||
| Current maturities of long term debt |
1,850 | — | ||||||
| Asset retirement obligation |
5,938 | 6,102 | ||||||
| Derivative liability |
775 | 166 | ||||||
| Total current liabilities |
71,804 | 69,322 | ||||||
| Long-term debt |
173,425 | 115,409 | ||||||
| Asset retirement obligation |
15,362 | 15,005 | ||||||
| Deferred revenue |
880 | 926 | ||||||
| Other long-term liabilities and deferred obligations |
9,446 | 12,691 | ||||||
| Total liabilities |
270,917 | 213,353 | ||||||
| Shareholders’ equity |
||||||||
| Preferred stock: $0.001 par value, 10,000,000 shares authorized; none issued |
— | — | ||||||
| Common stock: $0.001 par value, 100,000,000 shares authorized; 24,599,196 issued and 24,523,356 outstanding at March 31, 2004; 24,596,196 issued and 24,520,356 outstanding at December 31, 2003 |
25 | 25 | ||||||
| Additional paid in capital |
96,456 | 92,277 | ||||||
| Accumulated deficit |
(92,508 | ) | (90,115 | ) | ||||
| Accumulated other comprehensive income |
3,105 | 3,056 | ||||||
| Treasury stock |
(911 | ) | (911 | ) | ||||
| Total shareholders’ equity |
6,167 | 4,332 | ||||||
| Total liabilities and shareholders’ equity |
$ | 277,084 | $ | 217,685 | ||||
See accompanying notes to consolidated financial statements.
3
ATP OIL & GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
| Three Months Ended March 31, |
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| 2004 |
2003 |
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| Revenues |
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| Oil and gas production |
$ | 24,011 | $ | 20,441 | ||||
| Costs and operating expenses |
||||||||
| Lease operating expenses |
4,498 | 3,627 | ||||||
| Geological and geophysical expenses |
85 | 154 | ||||||
| General and administrative expenses |
4,083 | 3,112 | ||||||
| Credit facility and related expenses |
1,851 | 100 | ||||||
| Non-cash compensation expense |
— | (39 | ) | |||||
| Depreciation, depletion and amortization |
11,583 | 7,762 | ||||||
| Asset retirement accretion expense |
491 | 729 | ||||||
| Gain on abandonment |
(256 | ) | — | |||||
| Gain on disposition of properties |
(2,982 | ) | — | |||||
| Total costs and operating expenses |
19,353 | 15,445 | ||||||
| Income from operations |
4,658 | 4,996 | ||||||
| Other income (expense) |
||||||||
| Interest income |
24 | 12 | ||||||
| Interest expense |
(3,749 | ) | (2,337 | ) | ||||
| Loss on debt extinguishment |
(3,326 | ) | — | |||||
| Total other expense |
(7,051 | ) | (2,325 | ) | ||||
| Income (loss) before income taxes and cumulative effect of change in accounting principle |
(2,393 | ) | 2,671 | |||||
| Income tax expense |
— | (935 | ) | |||||
| Income (loss) before cumulative effect of change in accounting principle |
(2,393 | ) | 1,736 | |||||
| Cumulative effect of change in accounting principle |
— | 662 | ||||||
| Net income (loss) |
$ | (2,393 | ) | $ | 2,398 | |||
| Basic and diluted income (loss) per common share: |
||||||||
| Income (loss) before cumulative effect of change in accounting principle |
$ | (0.10 | ) | $ | 0.09 | |||
| Cumulative effect of change in accounting principle |
— | 0.03 | ||||||
| Net income (loss) |
$ | (0.10 | ) | $ | 0.12 | |||
| Weighted average number of common shares: |
||||||||
| Basic |
24,523 | 20,332 | ||||||
| Diluted |
24,523 | 20,521 | ||||||
See accompanying notes to consolidated financial statements.
4
ATP OIL & GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
| Three Months Ended March 31, |
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| 2004 |
2003 |
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| Cash flows from operating activities |
||||||||
| Net income (loss) |
$ | (2,393 | ) | $ | 2,398 | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities— |
||||||||
| Depreciation, depletion and amortization |
11,583 | 7,762 | ||||||
| Gain on disposition of properties |
(2,982 | ) | — | |||||
| Accretion of asset retirement obligation |
491 | 729 | ||||||
| Amortization of deferred financing costs |
684 | 320 | ||||||
| Deferred taxes |
— | 935 | ||||||
| Non-cash compensation expense |
— | (39 | ) | |||||
| Loss on extinguishment of debt |
3,326 | — | ||||||
| Other non-cash items |
1,283 | (254 | ) | |||||
| Non-cash interest and credit facility expenses |
1,709 | — | ||||||
| Cumulative effect of change in accounting principle |
— | (662 | ) | |||||
| Changes in assets and liabilities— |
||||||||
| Accounts receivable and other |
(16,662 | ) | (3,754 | ) | ||||
| Restricted cash |
— | 414 | ||||||
| Net (assets) liabilities from risk management activities |
(166 | ) | (1,645 | ) | ||||
| Accounts payable and accruals |
(2,218 | ) | 13,867 | |||||
| Other long-term assets |
— | 531 | ||||||
| Other long-term liabilities and deferred obligations |
(3,291 | ) | (311 | ) | ||||
| Net cash provided by (used in) operating activities |
(8,636 | ) | 20,291 | |||||
| Cash flows from investing activities |
||||||||
| Additions and acquisitions of oil and gas properties |
(22,628 | ) | (22,321 | ) | ||||
| Proceeds from disposition of properties |
10,500 | — | ||||||
| Additions to furniture and fixtures |
(109 | ) | (56 | ) | ||||
| Net cash used in investing activities |
(12,237 | ) | (22,377 | ) | ||||
| Cash flows from financing activities |
||||||||
| Proceeds from long-term debt |
227,000 | — | ||||||
| Payments of long-term debt |
(164,668 | ) | (1,500 | ) | ||||
| Deferred financing costs |
(8,476 | ) | — | |||||
| Repurchase of warrants |
(750 | ) | — | |||||
| Other |
4 | 23 | ||||||
| Net cash provided by (used in) financing activities |
53,110 | (1,477 | ) | |||||
| Increase (decrease) in cash and cash equivalents |
32,237 | (3,563 | ) | |||||
| Cash and cash equivalents, beginning of period |
4,564 | 6,944 | ||||||
| Cash and cash equivalents, end of period |
$ | 36,801 | $ | 3,381 | ||||
| Supplemental disclosures of cash flow information: |
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| Cash paid during the period for interest |
$ | 5,783 | $ | 1,394 | ||||
See accompanying notes to consolidated financial statements.
5
ATP OIL & GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In Thousands)
(Unaudited)
| Three Months Ended March 31, |
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| 2004 |
2003 |
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| Net income (loss) |
$ | (2,393 | ) | $ | 2,398 | |||
| Other comprehensive income (loss): |
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