Attached files
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| 8-K - ATP OIL & GAS CORP. 8-K - ATP OIL & GAS CORP | a6823872.htm |
Exhibit 99.1
ATP Announces Second Quarter 2011 Results
HOUSTON--(BUSINESS WIRE)--August 8, 2011--ATP Oil & Gas Corporation (NASDAQ:ATPG) today announced second quarter 2011 results.
Results of Operations
Revenues from oil and gas production were $172.9 million for the second quarter 2011, compared to $101.1 million for the second quarter 2010. Increased revenues from production were attributable to higher production volumes and higher oil prices. Oil and gas production for the second quarter 2011 was 2.1 MMBoe (23.6 MBoe/d) compared to 1.9 MMBoe (21.3 MBoe/d) for the second quarter 2010, an 11% increase. Average prices were up 68% over the same period a year ago. Oil represented 68% of total production for the second quarter 2011, compared to 48% of total production for the second quarter 2010.
ATP recorded a net loss attributable to common shareholders of $56.9 million or $(1.11) per basic and diluted share for the second quarter 2011, compared to $82.9 million or $(1.63) per basic and diluted share for the same 2010 period. The net loss attributable to common shareholders for the second quarter of 2011 was impacted by several items analysts often exclude from their published estimates. Those items include impairment expense of $45.7 million, workover expenses of $17.3 million and $1.2 million of drilling interruption costs associated with the Gulf of Mexico moratorium. Also, the items include $45.1 million related to the unrealized derivative income for the quarter. As a result of production increases and higher oil prices, ATP reduced its estimate of the time required to repay a dollar-denominated Override at Gomez. This change in estimate resulted in our recognizing $21.9 million in incremental interest expense related to this Override in the second quarter of 2011 compared to the first quarter of 2011.
The impairment expense of $45.7 million during the second quarter of 2011 related primarily to South Timbalier (“ST”) Block 77 (acquired in 2005), due to ATP’s decision not to move forward with a capital expenditure on this property in the second half of 2011. The workover expense is related to the Gomez MC 711 #5 well, which was placed back on production late in the second quarter.
Capital Resources and Liquidity
In the second quarter 2011, ATP conveyed dollar-denominated Overrides and NPI’s in the Gomez Hub and the Telemark Hub for net proceeds of $70.3 million. These Overrides and NPI’s obligate ATP to deliver a percentage of the proceeds from the future sale of hydrocarbons in the specified proved properties until the purchasers achieve a specified return.
In June 2011 ATP closed a perpetual preferred equity offering that provided net proceeds of $123.3 million, net of discount, related option contract costs and issuance costs. Shares of the preferred are convertible into common shares at $22.20 per share.
During July 2011, ATP entered into a crude oil prepaid swap transaction for 274,500 barrels at a net price of $111.84 per barrel. ATP received $30.7 million at closing. A schedule summarizing ATP’s outstanding oil and gas derivatives can be found near the end of this press release.
ATP incurred $220.5 million of capital expenditures ($209 million, excluding capitalized interest) on oil and gas properties during the first half of 2011, of which $34.8 million was funded through vendor deferral and net profit interest programs. These capital expenditures were predominantly related to the Gomez and Telemark Hubs, and the Octabuoy production platform. In the remainder of 2011, ATP anticipates incurring $250 million to $300 million in total capital expenditures, excluding capitalized interest, of which $150 million to $200 million will be contributed by vendors through existing NPI programs or deferral programs.
ATP had unrestricted cash of $185.9 million and restricted cash of $47.4 million at June 30, 2011.
ATP's selected financial data schedule below contains additional information on the company’s activities for the second quarter 2011 and comparable period in 2010.
| Selected Financial Data | Three Months Ended | Six Months Ended | ||||||||||||||
| (Unaudited) | June 30, | June 30, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Production | ||||||||||||||||
| Natural gas (MMcf) | 4,095 | 6,014 | 8,544 | 9,765 | ||||||||||||
| Gulf of Mexico | 3,589 | 5,107 | 7,402 | 7,885 | ||||||||||||
| North Sea | 506 | 907 | 1,142 | 1,880 | ||||||||||||
| Oil and condensate (MBbls) | 1,461 | 934 | 3,061 | 1,806 | ||||||||||||
| Gulf of Mexico | 1,460 | 932 | 3,059 | 1,801 | ||||||||||||
| North Sea | 1 | 2 | 2 | 5 | ||||||||||||
| Natural gas, oil and condensate | ||||||||||||||||
| MMcfe | 12,863 | 11,622 | 26,911 | 20,605 | ||||||||||||
| Boe | 2,144 | 1,937 | 4,485 | 3,434 | ||||||||||||
| Average Prices | ||||||||||||||||
| Natural gas (per Mcf) | $ | 5.30 | $ | 4.61 | $ | 5.10 | $ | 4.88 | ||||||||
| Gulf of Mexico | 4.81 | 4.47 | 4.55 | 4.74 | ||||||||||||
| North Sea | 8.79 | 5.41 | 8.67 | 5.50 | ||||||||||||
| Oil and condensate (per Bbl) | 103.48 | 70.12 | 96.64 | 70.86 | ||||||||||||
| Natural gas, oil and condensate | ||||||||||||||||
| Per Mcfe | $ | 13.44 | $ | 8.02 | $ | 12.61 | $ | 8.52 | ||||||||
| Per Boe | 80.64 | 48.12 | 75.66 | 51.12 | ||||||||||||
| Deferred Revenue Recognized ($000's) | ||||||||||||||||
| Natural gas | $ | - | $ | - | $ | - | $ | 1,517 | ||||||||
| Oil and condensate | - | 7,864 | - | 16,967 | ||||||||||||
| Total | - | 7,864 | - | 18,484 | ||||||||||||
| Gain (Loss) on Oil and Gas Derivatives ($000's) | ||||||||||||||||
| Natural gas contracts | ||||||||||||||||
| Realized or settled during the period | $ | (8 | ) | $ | 3,208 | $ | 598 | $ | 3,990 | |||||||
| Unrealized | 2,944 | (12,914 | ) | (692 | ) | (729 | ) | |||||||||
| Oil and condensate contracts | ||||||||||||||||
| Realized or settled during the period | (9,140 | ) | (2,588 | ) | (17,152 | ) | (5,439 | ) | ||||||||
| Unrealized | 42,122 | 36,223 | 2,902 | 29,642 | ||||||||||||
| Total | 35,918 | 23,929 | (14,344 | ) | 27,464 | |||||||||||
Second Quarter 2011 Conference Call
ATP Oil & Gas Corporation (NASDAQ:ATPG) will host a conference call on Tuesday, August 9th at 10:30 am CDT to discuss the company’s second quarter results followed by a Q&A session.
2nd Quarter Results Conference Call
Date: Tuesday,
August 9, 2011
Time: 11:30 am EDT; 10:30 am CDT; 9:30 am MDT
and 8:30 am PDT
ATP invites interested persons to listen to the live webcast on the company’s website at www.atpog.com. Phone participants should dial 877-591-4951. A digital replay of the conference call will be available at 888-203-1112, ID# 7259443, for a period of 24 hours beginning at 1:30 pm CDT.
About ATP Oil & Gas Corporation
ATP Oil & Gas is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and 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 oil and natural gas 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 ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting its business. While ATP does not file reports with the SEC containing probable and possible reserve quantities, ATP occasionally will include them in presentations and discuss such reserves publicly. ATP and its independent third party reservoir engineers use the term “probable” to describe volumes of reserves potentially recoverable through additional drilling or recovery techniques that, by their nature, are more speculative than estimates of proved reserves. Any estimates of reserves in this news release have been prepared by our independent third party engineers. More information about the risks and uncertainties relating to ATP's forward-looking statements is found in the company's SEC filings.
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In Thousands) | ||||||||
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 185,860 | $ | 154,695 | ||||
| Restricted cash | 37,448 | 30,270 | ||||||
| Accounts receivable (net of allowance of $225 and $225, respectively) | 70,782 | 92,737 | ||||||
| Deferred tax asset | 3,390 | 8,191 | ||||||
| Derivative asset | 206 | 1,688 | ||||||
| Other current assets | 9,677 | 26,408 | ||||||
| Total current assets | 307,363 | 313,989 | ||||||
| Oil and gas properties (using the successful efforts method of accounting): | ||||||||
| Proved properties | 4,513,526 | 4,291,440 | ||||||
| Unproved properties | 23,003 | 20,402 | ||||||
| 4,536,529 | 4,311,842 | |||||||
| Less accumulated depletion, depreciation, impairment and amortization | (1,612,753 | ) | (1,407,206 | ) | ||||
| Oil and gas properties, net | 2,923,776 | 2,904,636 | ||||||
| Restricted cash | 10,000 | 10,000 | ||||||
| Deferred financing costs, net | 45,460 | 48,353 | ||||||
| Other assets, net | 13,093 | 13,124 | ||||||
| Total assets | $ | 3,299,692 | $ | 3,290,102 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accruals | $ | 236,710 | $ | 230,703 | ||||
| Current maturities of long-term debt | 27,727 | 21,625 | ||||||
| Asset retirement obligation | 47,897 | 43,386 | ||||||
| Deferred tax liability | 143 | - | ||||||
| Derivative liability | 25,176 | 37,893 | ||||||
| Current maturities of other long-term obligations | 113,364 | 86,521 | ||||||
| Total current liabilities | 451,017 | 420,128 | ||||||
| Long-term debt | 1,946,586 | 1,857,784 | ||||||
| Other long-term obligations | 438,207 | 472,500 | ||||||
| Asset retirement obligation | 114,649 | 123,472 | ||||||
| Deferred tax liability | 7,107 | 16,956 | ||||||
| Derivative liability | 17,445 | 6,425 | ||||||
| Total liabilities | 2,975,011 | 2,897,265 | ||||||
| Temporary equity-redeemable noncontrolling interest | 115,405 | 140,851 | ||||||
| Temporary equity-convertible preferred stock, $0.001 par value | 68,174 | - | ||||||
| Shareholders' equity: | ||||||||
| Convertible preferred stock, $0.001 par value | 224,583 | 140,000 | ||||||
| Common stock, $0.001 par value | 52 | 51 | ||||||
| Additional paid-in capital | 538,778 | 570,739 | ||||||
| Accumulated deficit | (527,721 | ) | (356,866 | ) | ||||
| Accumulated other comprehensive loss | (93,679 | ) | (101,027 | ) | ||||
| Treasury stock, at cost | (911 | ) | (911 | ) | ||||
| Total shareholders' equity | 141,102 | 251,986 | ||||||
| Total liabilities and equity | $ | 3,299,692 | $ | 3,290,102 | ||||
|
CONSOLIDATED INCOME STATEMENTS |
||||||||||||||||
|
(In Thousands, Except Per Share Amounts) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Oil and gas production revenues | $ | 172,883 | $ | 101,099 | $ | 339,383 | $ | 194,128 | ||||||||
| Costs, operating expenses and other: | ||||||||||||||||
| Lease operating | 41,640 | 32,295 | 74,047 | 61,930 | ||||||||||||
| Exploration | 1,000 | 9 | 1,000 | 721 | ||||||||||||
| General and administrative | 10,166 | 8,060 | 19,902 | 18,623 | ||||||||||||
| Depreciation, depletion and amortization | 74,318 | 60,115 | 153,638 | 96,116 | ||||||||||||
| Impairment of oil and gas properties | 45,704 | 3,853 | 45,704 | 12,090 | ||||||||||||
| Accretion of asset retirement obligation | 3,771 | 3,463 | 7,435 | 6,853 | ||||||||||||
| Drilling interruption costs | 1,193 | 8,714 | 19,691 | 8,714 | ||||||||||||
| Loss on abandonment | 114 | 50 | 1,383 | 201 | ||||||||||||
| Gain on exchange/disposal of properties | - | (46 | ) | - | (12,020 | ) | ||||||||||
| 177,906 | 116,513 | 322,800 | 193,228 | |||||||||||||
| Income (loss) from operations | (5,023 | ) | (15,414 | ) | 16,583 | 900 | ||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 59 | 154 | 116 | 298 | ||||||||||||
| Interest expense, net | (97,043 | ) | (64,645 | ) | (172,528 | ) | (76,864 | ) | ||||||||
| Derivative income (expense) | 35,918 | 23,929 | (14,344 | ) | 27,464 | |||||||||||
| Gain (loss) on debt extinguishment | 1,091 | (78,171 | ) | 1,091 | (78,171 | ) | ||||||||||
| (59,975 | ) | (118,733 | ) | (185,665 | ) | (127,273 | ) | |||||||||
| Loss before income taxes | (64,998 | ) | (134,147 | ) | (169,082 | ) | (126,373 | ) | ||||||||
| Income tax benefit (expense): | ||||||||||||||||
| Current | - | 326 | - | (227 | ) | |||||||||||
| Deferred | 14,494 | 57,473 | 5,352 | 56,621 | ||||||||||||
| Total | 14,494 | 57,799 | 5,352 | 56,394 | ||||||||||||
| Net loss | (50,504 | ) | (76,348 | ) | (163,730 | ) | (69,979 | ) | ||||||||
| Less income attributable to the redeemable noncontrolling interest | (3,562 | ) | (3,771 | ) | (7,125 | ) | (8,226 | ) | ||||||||
| Less convertible preferred stock dividends | (2,786 | ) | (2,800 | ) | (5,544 | ) | (5,600 | ) | ||||||||
| Net loss attributable to common shareholders | $ | (56,852 | ) | $ | (82,919 | ) | $ | (176,399 | ) | $ | (83,805 | ) | ||||
| Net loss per share attributable to common shareholders: | ||||||||||||||||
| Basic | $ | (1.11 | ) | $ | (1.63 | ) | $ | (3.46 | ) | $ | (1.66 | ) | ||||
| Diluted | $ | (1.11 | ) | $ | (1.63 | ) | $ | (3.46 | ) | $ | (1.66 | ) | ||||
| Weighted average number of common shares: | ||||||||||||||||
| Basic | 51,048 | 50,767 | 51,034 | 50,609 | ||||||||||||
| Diluted | 51,048 | 50,767 | 51,034 | 50,609 | ||||||||||||
| CONSOLIDATED CASH FLOW DATA | ||||||||
| (In Thousands) | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2011 | 2010 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (163,730 | ) | $ | (69,979 | ) | ||
| Adjustments to operating activities | 227,153 | 37,417 | ||||||
| Changes in assets and liabilities | (21,134 | ) | 14,773 | |||||
| Net cash provided by (used in) operating activities | 42,289 | (17,789 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Additions to oil and gas properties | (169,180 | ) | (377,329 | ) | ||||
| Proceeds from disposal of assets | - | 2,053 | ||||||
| Increase in restricted cash | (7,178 | ) | (2,436 | ) | ||||
| Net cash used in investing activities | (176,358 | ) | (377,712 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from senior second lien notes, net of discount | - | 1,492,965 | ||||||
| Proceeds from first lien term loans | 59,400 | 147,000 | ||||||
| Proceeds from term loan facility -ATP Titan assets | 45,000 | - | ||||||
| Proceeds from term loans | - | 46,000 | ||||||
| Payments of term loans | (12,047 | ) | (1,262,610 | ) | ||||
| Deferred financing costs | (3,035 | ) | (52,613 | ) | ||||
| Proceeds from other long-term obligations | 70,327 | 171,136 | ||||||
| Payments of other long-term obligations | (89,181 | ) | (39,605 | ) | ||||
| Distributions to noncontrolling interest | (7,126 | ) | (7,125 | ) | ||||
| Proceeds from preferred stock, net of costs | 149,767 | - | ||||||
| Purchase of capped-call options on ATP common stock | (26,500 | ) | - | |||||
| Preferred stock dividends | (5,544 | ) | (5,656 | ) | ||||
| Other financings, net | (16,954 | ) | - | |||||
| Exercise of stock options/warrants | 189 | 3,547 | ||||||
| Net cash provided by financing activities | 164,296 | 493,039 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 938 | (567 | ) | |||||
| Increase in cash and cash equivalents | 31,165 | 96,971 | ||||||
| Cash and cash equivalents, beginning of period | 154,695 | 108,961 | ||||||
| Cash and cash equivalents, end of period | $ | 185,860 | $ | 205,932 | ||||
| Other Long-term Obligations | ||||||||
| (In Thousands) | ||||||||
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Net profits interests | $ | 325,015 | $ | 331,776 | ||||
| Dollar-denominated overriding royalty interests | 54,725 | 52,825 | ||||||
| Gomez pipeline obligation | 74,104 | 73,868 | ||||||
| Vendor deferrals – Gulf of Mexico | 6,942 | 7,096 | ||||||
| Vendor deferrals – North Sea | 88,203 | 90,874 | ||||||
| Other | 2,582 | 2,582 | ||||||
| Total | 551,571 | 559,021 | ||||||
| Less current maturities | (113,364 | ) | (86,521 | ) | ||||
| Other long-term obligations | $ | 438,207 | $ | 472,500 | ||||
| Cash Payments Related to Other Long-term Obligations | ||||||||||
| (In Thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months | Six Months | |||||||||
| Ended | Ended | |||||||||
| June 30, | June 30, | |||||||||
| 2011 | 2011 | |||||||||
| Net profits interests | $ | 54,587 | $ | 73,154 | ||||||
| Dollar-denominated overriding royalty interests | 42,701 | 72,103 | ||||||||
| Gomez pipeline financing | 6,089 | 10,592 | ||||||||
| Vendor deferrals | 7,497 | 17,438 | ||||||||
| Total payments | $ | 110,874 | $ | 173,287 |
(1) |
|||||
|
(1) |
Includes principal of $89,181 and interest of $84,106. The weighted average effective interest rate on our other long-term obligations was 17.9% as of June 30, 2011. | |||||||||
| Derivatives Schedule | ||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||
| 2011 | 2012 | 2013 | ||||||||||||||||||||||||||||
| 3Q | 4Q | FY | 1Q | 2Q | 3Q | 4Q | FY | 1Q | FY | |||||||||||||||||||||
| Gulf of Mexico | ||||||||||||||||||||||||||||||
| Natural Gas Swaps | ||||||||||||||||||||||||||||||
| Volumes (MMMBtu) | 1,380 | 1,380 | 2,760 |
|
1,365 | - | - | - | 1,365 | |||||||||||||||||||||
| Price ($/MMBtu) | $ | 4.64 | $ | 4.64 | $ | 4.64 |
|
$ | 4.64 | $ | - | $ | - | $ | - | $ | 4.64 | |||||||||||||
| Natural Gas Calls | ||||||||||||||||||||||||||||||
| Volumes (MMMBtu) | 920 | 920 | 1,840 | 910 | 910 | 920 | 920 | 3,660 | ||||||||||||||||||||||
| Price ($/MMBtu) | $ | 4.70 | $ | 5.10 | $ | 4.91 | $ | 5.30 | $ | 5.30 | $ | 5.30 | $ | 5.50 | $ | 5.35 | ||||||||||||||
| Crude Oil Swaps | ||||||||||||||||||||||||||||||
| Volumes (MBbls) | 797 | 943 | 1,740 | 865 | 842 | 805 | 782 | 3,294 | 90 | 90 | ||||||||||||||||||||
| Price ($/Bbl) | $ | 93.49 | $ | 93.41 | $ | 93.45 | $ | 91.00 | $ | 91.58 | $ | 90.42 | $ | 89.79 | $ | 90.72 | $ | 90.40 | $ | 90.40 | ||||||||||
| Crude Oil Reparticipation Calls | ||||||||||||||||||||||||||||||
| Volumes (MBbls) | 184 | 184 | 368 | |||||||||||||||||||||||||||
| Price ($/Bbl) | $ | 110.00 | $ | 110.00 | $ | 110.00 | ||||||||||||||||||||||||
| North Sea | ||||||||||||||||||||||||||||||
| Natural Gas Swaps | ||||||||||||||||||||||||||||||
| Volumes (MMMBtu) | 460 | 460 | 920 | 455 | 455 | 460 | 276 | 1,646 | ||||||||||||||||||||||
| Price ($/MMBtu)(1) | $ | 8.20 | $ | 9.73 | $ | 8.96 | $ | 9.73 | $ | 8.46 | $ | 8.46 | $ | 9.59 | $ | 9.00 | ||||||||||||||
|
The above are ATP's financial and physical commodity contracts
outstanding as of August 8, 2011. |
||||||||||||||||||||||||||||||
|
(1) Assumes currency translation rate of 1.64 USD per GBP which approximates the rate as of August 8, 2011 |
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CONTACT:
ATP Oil & Gas Corporation, Houston
T. Paul Bulmahn,
713-622-3311
Chairman and CEO
or
Albert L. Reese Jr.,
713-622-3311
Chief Financial Officer
www.atpog.com