ATP Oil & Gas Reports Back-to-Back Quarterly Record Production and Third Quarter Results.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- ATP ATP: see adenosine triphosphate. ATP in full adenosine triphosphate Organic compound, substrate in many enzyme-catalyzed reactions (see catalysis) in the cells of animals, plants, and microorganisms. Oil & Gas Corporation (Nasdaq:ATPG ATPG Automatic Test Pattern Generation ATPG Automatic Test Program Generator ) today released its operations update and third quarter 2006 results: * Achieving a second consecutive quarter of record production with an average rate of 174.1 MMcfe/d, exceeding guidance of 170.0 MMcfe/d; * Recording quarterly revenue of $132.8 million and net income available to common shareholders of $1.2 million; * Adding six wells to production during the first nine months of 2006, with nine additional near-term near-term adj. Of, for, or involving a short period of time in the near future. wells scheduled to come online, three in the fourth quarter 2006 and six in the first half 2007; * Acquiring seven blocks in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east in 2006 and executed the contract to build a MinDOC floating production platform, which will service the company's deepwater Deepwater or Deep Water may refer to:
Results of Operations As a result of the continued ramp-up in production at ATP's Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by Canyon ("MC") 711 and Tors properties, production for the third quarter of 16.0 Bcfe (174.1 MMcfe/d) was 18% higher than the second quarter 2006 (148.6 MMcfe/d) and 321% higher than the third quarter 2005 (41.4 MMcfe/d). Price realizations of $8.30 per Mcfe in the third quarter were 3% above the second quarter and 20% above the third quarter 2005. Revenues for the third quarter of $132.8 million were 22% above the second quarter and 404% above the third quarter 2005. Production for the nine months ending September September: see month. 30, 2006 was 35.5 Bcfe, an increase of 144% over the same period in 2005. Revenues during the nine month 2006 period were $287.0 million, an increase of 196% over the comparable 2005 period. Lease operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. (LOE LOE Ley Orgánica de Educación (Spanish) LOE Level Of Effort LOE Limited Objective Experiment LOE Letter of Explanation LOE Language Other than English. ) per Mcfe was $1.43 for the third quarter of 2006, compared with $1.57 per Mcfe in the second quarter of 2006 and $1.26 in the third quarter of 2005. LOE per Mcfe has improved from the second quarter of 2006 (9% lower) and from the first quarter of 2006 (21% lower) primarily due to our rapid increase in production this year and our focus on reducing costs at properties with low production rates. The increase in LOE per Mcfe compared with the third quarter of 2005 (13% higher) was primarily due to increases in insurance and other operating costs operating costs npl → gastos mpl operacionales and costs of uninsured hurricane repairs. With our expectation of significant near-term production growth and our focus on reducing operating costs, we anticipate further improvement in the company's per unit LOE. General and administrative expenses (G&A) of $4.6 million for the third quarter were 14% above the second quarter 2006 and 19% above the third quarter 2005. The increase is primarily attributed to legal, professional and consulting fees, partially offset by the prior year provision that was recorded for the successful ATP Employee Volvo Challenge Plan. Depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able , and amortization (DD&A) per Mcfe was $3.44 in the third quarter, 7% above the second quarter and 6% above the third quarter 2005. The overall DD&A expense increase is mainly due to increased production from newly developed properties in 2006. In addition to DD&A, ATP also recorded a noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of $11.8 million related to three properties acquired in a package of properties in late 2005. While ATP believes that it could have performed additional activities at these three locations that, over time, might have resulted in added revenue, the decision was made to forego these capital expenditures. ATP recorded a tax provision during the third quarter relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its foreign jurisdictions based on the expected 2006 effective tax rate of each jurisdiction. The rates were determined based on the projected results of operations for the year, the valuation allowance that had previously been recorded at each jurisdiction and any permanent differences affecting the overall tax rate. ATP recorded net income available to common shareholders of $1.2 million or $0.04 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share in the third quarter 2006, compared to net income of $6.4 million in the second quarter and a net loss of $10.6 million in the third quarter 2005. For the nine months ending September 30, 2006, ATP recorded a net loss available to common shareholders of $2.3 million or $0.08 per basic and diluted share compared with a net loss available to common shareholders of $12.9 million or $0.44 per basic and diluted share during the same nine-month period in 2005. Third quarter net income available to common shareholders was impacted by the impairment expense noted above. Research analysts typically exclude this charge from their published estimates. Accordingly, after adjusting for this item, ATP had net income available to common shareholders before impairment expense of $12.9 million or $0.44 and $0.43 per basic and diluted share. ATP's selected operating statistics and financial information, included within this press release, contain additional information on the company's activities for the third quarter 2006 and comparable period in 2005. [TABLE OMITTED] Acquisitions, Development and Operations Update Thus far in 2006, ATP has acquired seven blocks in the Gulf of Mexico, all with a 100% working interest and operated by ATP. Four deepwater blocks were acquired in two separate private transactions: Telemark (Atwater Valley 63), Mirage (Mississippi Canyon - "MC" - 941), Oasis (MC 943) and Morgus (MC 942). ATP was also successful at both Gulf of Mexico lease sales conducted in 2006. At the March sale, ATP was awarded Green Canyon 37, a deepwater lease. At the August sale, ATP was awarded Garden Banks 388 and Garden Banks 187. Five of these properties have had previous drilling, which encountered hydrocarbons hydrocarbons (hīˈ·drō·kärˑ·b  nz),n. and all are scheduled for development during the next three year period. ATP placed on production six new wells during the first nine months of 2006. An additional nine wells are scheduled for first production between now and the middle of 2007. The new producing wells, particularly those at Mississippi Canyon 711 (Gomez) and Tors, have been the primary drivers for ATP's 144% increase in production during the first nine months of 2006 compared to the same period in 2005. New wells scheduled in the next nine months are projected to continue to increase production into 2007. In the first nine months of 2006, ATP paid $390.9 million for acquisition and development of oil and gas properties compared to $272.6 million during the same period in 2005. Hedging Update Since ATP reported second quarter earnings in August 2006, the company has hedged with fixed forward contracts an additional 6.7 Bcf of natural gas in the U.K. The hedges cover projected volumes for the fourth quarter 2006, calendar 2007 and first quarter 2008 at a weighted average price of $10.06 per Mcf. A detailed listing of the new hedges as well as previously existing hedges is provided near the end of this press release. Capital Resources and Liquidity Cash flow from operating activities was $105.3 million for the nine months ended September 30, 2006, compared to $61.4 million for the same period in 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 $179.4 million for the nine months ended September 30, 2006, compared to $49.9 million for the same period in 2005. A non-GAAP reconciliation is provided near the end of this press release. ATP had $61.3 million in cash and cash equivalents on hand at September 30, 2006, compared to $65.6 million at December 31, 2005. 3(rd) Quarter 2006 Conference Call ATP's Chairman & President T. Paul Bulmahn, Senior Vice President Gerald W. Schlief, Chief Financial Officer Albert L. Reese, Jr. and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. Leland E. Tate will host a conference call to discuss the company's third quarter results on Friday, November 3 at 10:00 am central time. Web listeners will need to log in to www.atpog.com at least 10 minutes prior to the start of the call. Phone participants should dial 800-819-9193. The audio download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. file in MP3 format will be released within 48 hours of the call. A recorded phone replay will be available at 888-203-1112, access code 5084901, for a period of 24 hours beginning at 1:00 pm CT, and the Web cast 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. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements included in this news release are "forward-looking statements" under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] Hedges, Derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. and Fixed Price Contracts [TABLE OMITTED] Oil and Gas Revenue Reconciliation ((1)) (In Thousands)
[TABLE OMITTED]
(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.
[TABLE OMITTED]
[TABLE OMITTED]
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