UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 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 August 2, 2004, was 24,555,892.
TABLE OF CONTENTS
2
ATP OIL & GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
(Unaudited)
| June 30, 2004 |
December 31, 2003 |
|||||||
| Assets | ||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 37,980 | $ | 4,564 | ||||
| Accounts receivable (net of allowances of $1,259 and $1,266) |
32,818 | 15,874 | ||||||
| Other current assets |
3,085 | 2,461 | ||||||
| Total current assets |
73,883 | 22,899 | ||||||
| Oil and gas properties (using the successful efforts method of accounting) |
389,720 | 450,858 | ||||||
| Less: Accumulated depletion, impairment and amortization |
(206,462 | ) | (261,733 | ) | ||||
| Oil and gas properties, net |
183,258 | 189,125 | ||||||
| Furniture and fixtures, net |
636 | 666 | ||||||
| Deferred tax asset (net of allowances of $32,498 and $33,646) |
— | — | ||||||
| Other assets, net |
10,679 | 4,995 | ||||||
| Total assets |
$ | 268,456 | $ | 217,685 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities |
||||||||
| Accounts payable and accruals |
$ | 47,190 | $ | 63,054 | ||||
| Current maturities of long-term debt |
1,850 | — | ||||||
| Asset retirement obligation |
6,116 | 6,102 | ||||||
| Derivative liability |
1,272 | 166 | ||||||
| Total current liabilities |
56,428 | 69,322 | ||||||
| Long-term debt |
173,509 | 115,409 | ||||||
| Asset retirement obligation |
16,068 | 15,005 | ||||||
| Deferred revenue |
834 | 926 | ||||||
| Other long-term liabilities and deferred obligations |
9,024 | 12,691 | ||||||
| Total liabilities |
255,863 | 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; 24,616,232 issued and 24,540,392 outstanding at June 30, 2004; 24,596,196 issued and 24,520,356 outstanding at December 31, 2003 |
25 | 25 | ||||||
| Additional paid in capital |
96,485 | 92,277 | ||||||
| Accumulated deficit |
(85,582 | ) | (90,115 | ) | ||||
| Accumulated other comprehensive income |
2,576 | 3,056 | ||||||
| Treasury stock |
(911 | ) | (911 | ) | ||||
| Total shareholders’ equity |
12,593 | 4,332 | ||||||
| Total liabilities and shareholders’ equity |
$ | 268,456 | $ | 217,685 | ||||
See accompanying notes to consolidated financial statements.
3
ATP OIL & GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Oil and gas revenues |
$ | 32,879 | $ | 18,540 | $ | 56,890 | $ | 38,981 | ||||||||
| Costs and operating expenses: |
||||||||||||||||
| Lease operating expenses |
4,944 | 3,702 | 9,442 | 7,329 | ||||||||||||
| Geological and geophysical expenses |
195 | 146 | 280 | 300 | ||||||||||||
| General and administrative expenses |
3,694 | 3,111 | 7,778 | 6,223 | ||||||||||||
| Credit facility and related expenses |
— | 240 | 1,850 | 340 | ||||||||||||
| Non-cash compensation expense |
— | — | — | (39 | ) | |||||||||||
| Depreciation, depletion and amortization |
13,961 | 6,095 | 25,544 | 13,857 | ||||||||||||
| Asset retirement accretion expense |
483 | 718 | 974 | 1,447 | ||||||||||||
| (Gain) loss on abandonment |
(17 | ) | 2,655 | (273 | ) | 2,655 | ||||||||||
| (Gain) on disposition of properties |
(3,029 | ) | — | (6,011 | ) | — | ||||||||||
| Total costs and operating expenses |
20,231 | 16,667 | 39,584 | 32,112 | ||||||||||||
| Income from operations |
12,648 | 1,873 | 17,306 | 6,869 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
108 | 22 | 132 | 34 | ||||||||||||
| Interest expense |
(6,010 | ) | (2,316 | ) | (9,759 | ) | (4,653 | ) | ||||||||
| Loss on extinguishment of debt |
— | — | (3,326 | ) | — | |||||||||||
| Other |
180 | 1,084 | 180 | 1,084 | ||||||||||||
| Total other income (expense) |
(5,722 | ) | (1,210 | ) | (12,773 | ) | (3,535 | ) | ||||||||
| Income before income taxes and cumulative effect of change in accounting principle |
6,926 | 663 | 4,533 | 3,334 | ||||||||||||
| Income tax expense |
— | (232 | ) | — | (1,167 | ) | ||||||||||
| Income before cumulative effect of change in accounting principle |
6,926 | 431 | 4,533 | 2,167 | ||||||||||||
| Cumulative effect of change in accounting principle, net of income tax |
— | — | — | 662 | ||||||||||||
| Net income |
$ | 6,926 | $ | 431 | $ | 4,533 | $ | 2,829 | ||||||||
| Basic and diluted income per common share: |
||||||||||||||||
| Income before cumulative effect of change in accounting principle |
$ | 0.28 | $ | 0.02 | $ | 0.18 | $ | 0.10 | ||||||||
| Cumulative effect of change in accounting principle, net of income tax |
— | — | — | 0.03 | ||||||||||||
| Net income per common share |
$ | 0.28 | $ | 0.02 | $ | 0.18 | $ | 0.13 | ||||||||
| Weighted average number of common shares: |
||||||||||||||||
| Basic |
24,530 | 22,481 | 24,526 | 21,413 | ||||||||||||
| Diluted |
24,715 | 22,584 | 24,706 | 21,558 | ||||||||||||
See accompanying notes to consolidated financial statements.
4
ATP OIL & GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
| Six Months Ended June 30, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities |
||||||||
| Net income |
$ | 4,533 | $ | 2,829 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities – |
||||||||
| Depreciation, depletion and amortization |
25,544 | 13,857 | ||||||
| Gain on disposition of properties |
(6,011 | ) | — | |||||
| Accretion of discount of asset retirement obligation |
974 | 1,447 | ||||||
| Amortization of deferred financing costs |
1,106 | 640 | ||||||
| Deferred taxes |
— | 1,167 | ||||||
| Non-cash compensation expense |
— | (39 | ) | |||||
| Loss on extinguishment of debt |
3,326 | — | ||||||
| Other non-cash items |
632 | 914 | ||||||
| Non-cash interest and credit facility expenses |
1,709 | — | ||||||
| Cumulative effect of change in accounting principle |
— | (662 | ) | |||||
| Ineffectiveness of cash flow hedges |
20 | 267 | ||||||
| Changes in assets and liabilities – |
||||||||
| Accounts receivable and other |
(17,568 | ) | (2,188 | ) | ||||
| Restricted cash |
— | 414 | ||||||
| Derivative liability |
(166 | ) | (3,210 | ) | ||||
| Accounts payable and accruals |
(15,856 | ) | ||||||