ATP Announces Annual Financials and 2007 Record Results

ATP Oil & Gas Corporation (NASDAQ:ATPG) today announced annual and fourth quarter 2007 results which include record revenues, record production and record reserves. Highlights include: -- $599.3 million of 2007 oil and gas revenue, a 45% increase over previous year, of which 48% was derived from oil and condensate; -- Annual net income available to common shareholders of $48.6 million; -- Annual production increase of 26%; -- Pre-tax PV-10 of $3.5 billion of proved reserves, with an estimated 63% of future revenues from oil and condensate sales (see non-GAAP reconciliation toward the end of this press release); -- 119.3 MMBoe (715.6 Bcfe) of proved reserves, a 12% increase over previous year; -- 41.3 MMBoe (247.8 Bcfe) of proved developed reserves, a 16% increase over previous year; -- 6.7 MMBoe (40.4 Bcfe) net upward proved reserve revisions Results of Operations Oil and gas production increased 26% to 10.7 MMBoe (64.0 Bcfe) for 2007, compared to 8.5 MMBoe (50.9 Bcfe) for 2006. Oil and gas production increased 31% to 3.4 MMBoe (20.2 Bcfe) in the fourth quarter 2007, compared to 2.5 MMBoe (15.4 Bcfe) for the fourth quarter 2006. Revenue from oil and gas production totaled $599.3 million for 2007, compared to $414.2 million for 2006. Revenue from oil and gas production totaled $205.7 million for the fourth quarter 2007, compared to $127.2 million for the fourth quarter 2006. ATP recorded net income available to common shareholders of $48.6 million or $1.58 per basic and $1.55 per diluted share for 2007, compared to a net loss available to common shareholders of $39.3 million or $1.33 per basic and $1.33 per diluted share for 2006. ATP recorded net income available to common shareholders of $12.7 million or $0.39 per basic and $0.38 per diluted share for the fourth quarter 2007, compared to a net loss available to common shareholders of $37.0 million or $1.24 per basic and $1.24 per diluted share for the fourth quarter 2006. Net income available to common shareholders for the fourth quarter 2007 was impacted by three non-recurring items research analysts typically exclude from their published estimates, including impairment of oil and gas properties of $24.5 million, loss on abandonment of $18.3 million and revenues from insurance of $7.0 million related to loss of production income insurance claims realized. Accordingly, net income before these three nonrecurring items, a non-GAAP measure, in the fourth quarter 2007 was $48.5 million or $1.47 per basic and $1.45 per diluted share. For the same metric in 2007, ATP recorded $93.0 million or $3.02 per basic and $2.97 per diluted share. A non-GAAP reconciliation is provided near the end of this press release. ATP's selected operating statistics and financial information, included within this press release, contain additional information on the company’s activities for annual and fourth quarter 2007 and the comparable periods in 2006.   Three Months EndedDecember 31,   Year EndedDecember 31, 2007   2006 2007   2006 Selected Operating Statistics   Production Natural gas (MMcf) 10,742 8,844 37,013 31,224 Gulf of Mexico 6,478 5,031 24,926 19,195 North Sea 4,264 3,813 12,087 12,029   Oil and condensate (MBbls) 1,572 1,091 4,498 3,273 Gulf of Mexico 1,564 1,086 4,475 3,250 North Sea 7 5 23 23   Natural gas equivalents (MMcfe) 20,172 15,392 64,002 50,860 Gulf of Mexico 15,864 11,545 51,776 38,696 North Sea 4,308 3,846 12,225 12,164   Average Prices (includes effect of cash flow hedges) Natural gas (per Mcf) $ 8.65 $ 8.29 $ 8.39 $ 7.57 Gulf of Mexico 8.51 7.90 8.30 7.59 North Sea 8.87 8.80 8.57 7.35 Oil and condensate (per Bbl) 71.74 49.28 64.20 54.25 Natural gas, oil and condensate (per Mcfe) 10.20 8.26 9.36 8.14   Other Expenses, per Mcfe Lease operating expense (per Mcfe) $ 1.46 $ 1.15 $ 1.43 $ 1.42 Gulf of Mexico 1.44 0.97 1.41 1.42 North Sea 1.52 1.69 1.55 1.45 Depreciation, depletion and amortization (DD&A) 4.35 3.52 3.87 3.34 Gulf of Mexico 3.87 3.35 3.57 3.27 North Sea 6.12 4.01 5.12 3.53   Selected Financial Data (In Thousands, Except Per Share Data)   Oil and gas revenues, including settled derivatives (1) $ 205,684 $ 127,075 $ 599,250 $ 414,072 Net income (loss) 12,740 (20,147 ) 48,620 6,877 Preferred dividends - (16,885 ) - (46,225 ) Net income (loss) available to common shareholders 12,740 (37,032 ) 48,620 (39,348 )   Net income (loss) per common share Basic $ 0.39   $ (1.24 ) $ 1.58   $ (1.33 ) Diluted $ 0.38   $ (1.24 ) $ 1.55   $ (1.33 )   Weighted average number of common shares outstanding Basic   32,967     29,841     30,793     29,693   Diluted   33,472     30,911     31,301     30,402     (1) See oil and gas revenue reconciliation toward the end of this press release. 4th Quarter 2007 Conference Call ATP management will host a conference call on Monday, March 3 at 10:00 am central time to discuss the company’s year-end results followed by a Q&A session. 4th Quarter and Year-End 2007 Conference Call Date: Monday, March 3, 2008 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 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 (877) 723-9511. A digital replay of the conference call will be available at (888) 203-1112, ID number 4514680, 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 focused on development and production of natural gas and oil 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 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 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 ATP’s 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 the company’s SEC filings. CONSOLIDATED BALANCE SHEETS (In Thousands)         December 31, 2007 2006 Assets   Current assets: Cash and cash equivalents $ 199,449 $ 182,592 Restricted cash 13,981 27,497 Accounts receivable (net of allowance of $382 and $409) 127,891 105,030 Deferred tax asset 84,110 1,113 Derivative asset 1,286 1,170 Other current assets   15,934     9,931   Total current assets   442,651     327,333     Oil and gas properties: Oil and gas properties (using the successful efforts method of accounting) 2,556,938 1,539,352 Less: Accumulated depletion, impairment and amortization   (726,358 )   (443,707 ) Oil and gas properties, net   1,830,580     1,095,645     Furniture and fixtures, net 860 1,079 Derivative asset 673 - Deferred financing costs, net 19,873 13,272 Other assets, net   12,496     9,729   Total assets $ 2,307,133   $ 1,447,058     Liabilities and Shareholders' Equity   Current liabilities: Accounts payable and accruals $ 270,557 $ 195,846 Current maturities of long-term debt 12,165 8,987 Current maturities of long-term capital lease - 23,699 Asset retirement obligation 28,194 21,297 Derivative liability 11,335 - Other current liabilities   23,512     -   Total current liabilities 345,763 249,829   Long-term debt 1,391,846 1,062,454 Asset retirement obligation 158,577 87,092 Deferred tax liability 85,256 11,765 Derivative liability 13,242 - Other liabilities   2,583     -   Total liabilities   1,997,267     1,411,140     Shareholders' equity: Preferred stock: $0.001 par value - - Common stock: $0.001 par value 36 30 Additional paid-in capital 388,250 151,467 Accumulated deficit (92,061 ) (140,681 ) Accumulated other comprehensive income 14,552 26,013 Treasury stock, at cost   (911 )   (911 ) Total shareholders' equity   309,866     35,918   Total liabilities and shareholders' equity $ 2,307,133   $ 1,447,058   CONSOLIDATED INCOME STATEMENTS (In Thousands, Except Per Share Amounts)         Three Months Ended Year Ended December 31, December 31, 2007 2006 2007 2006   Oil and gas production $ 205,684 $ 127,230 $ 599,324 $ 414,182 Other revenues   7,013     5,639     8,611     5,639   Total revenues   212,697     132,869     607,935     419,821     Costs, operating expenses and other: Lease operating 29,367 17,646 91,693 72,446 Exploration 621 63 13,756 2,231 General and administrative 9,068 9,813 32,018 32,976 Depreciation, depletion and amortization 87,749 54,159 247,378 169,704 Impairment of oil and gas properties 24,544 7,760 34,342 19,520 Accretion of asset retirement obligation 3,098 2,603 12,117 8,076 Loss on abandonment 18,270 5,748 18,649 9,603 Other, net   (1,637 )   (7 )   (3,706 )   (7 ) Total costs, operating expenses and other   171,080     97,785     446,247     314,549   Income from operations   41,617     35,084     161,688     105,272     Other income (expense): Interest income 1,656 1,375 7,603 4,532 Interest expense (33,761 ) (19,969 ) (121,302 ) (58,018 ) Loss on extinguishment of debt   -     (28,115 )   -     (28,115 ) Total other expense   (32,105 )   (46,709 )   (113,699 )   (81,601 )   Income (loss) before income taxes   9,512     (11,625 )   47,989     23,671   Income tax benefit (expense): Current (353 ) 1,508 1,179 (2,528 ) Deferred   3,581     (10,030 )   (548 )   (14,266 ) Total   3,228     (8,522 )   631     (16,794 )   Net income   12,740     (20,147 )   48,620     6,877     Preferred dividends   -     (16,885 )   -     (46,225 )   Net income (loss) available to common shareholders $ 12,740   $ (37,032 ) $ 48,620   $ (39,348 )   Net income (loss) per common share: Basic $ 0.39   $ (1.24 ) $ 1.58   $ (1.33 ) Diluted $ 0.38   $ (1.24 ) $ 1.55   $ (1.33 )   Weighted average common shares outstanding: Basic   32,967     29,841     30,793     29,693   Diluted   33,472     30,911     31,301     30,402   CONSOLIDATED CASH FLOW DATA (In Thousands)         Year Ended December 31, 2007 2006   Cash flows from operating activities: Net income $ 48,620 $ 6,877 Adjustments to operating activities 335,237 259,444 Changes in assets and liabilities   (54,469 )   (7,807 ) Net cash provided by operating activities   329,388     258,514     Cash flows from investing activities: Additions to oil and gas properties (849,491 ) (577,012 ) Proceeds from disposition of assets 650 - Additions to furniture and fixtures (348 ) (381 ) (Increase) decrease in restricted cash   14,096     (13,290 ) Net cash used in investing activities   (835,093 )   (590,683 )   Cash flows from financing activities: Proceeds from long-term debt 574,500 728,500 Principal payments of long-term debt (244,287 ) (4,435 ) Deferred financing costs (14,148 ) (24,551 ) Issuance of preferred stock, net of related costs - 145,463 Issuance of common stock, net of related costs 226,706 - Redemption of preferred stock - (381,083 ) Principal payments of capital lease (23,950 ) (20,869 ) Exercise of stock options   2,974     4,966   Net cash provided by financing activities   521,795     447,991     Effect of exchange rate changes on cash   767     1,204     Net increase in cash and cash equivalents 16,857 117,026 Cash and cash equivalents, beginning of period   182,592     65,566     Cash and cash equivalents, end of period $ 199,449   $ 182,592   Reconciliation of PV-10 to Standardized Measure (In thousands)   Net present value of future net cash flows, before income taxes, or PV-10 $ 3,497,262 Future income taxes, discounted at 10%   (857,295) Standardized measure of discounted future net cash flows $ 2,639,967   Note: PV-10 is not a substitute for the standardized measure. Our PV-10 measure and the standardized measure of discounted future net cash flows do not purport to present the fair value of our natural gas and oil reserves. We include it herein because we believe analysts typically use this measure to compare companies in the oil and gas industry. Pro Forma Net Income Before Significant Nonrecurring Items (In thousands, except per share amounts)           Three Months Ended Year Ended December 31, December 31,   2007     2006     2007     2006   Net income (loss) available to common shareholders $ 12,740 $ (37,032 ) $ 48,620 $ (39,348 ) Insurance recoveries (7,013 ) (5,639 ) (8,611 ) (5,639 ) Impairment of oil and gas properties 24,544 7,760 34,342 19,520 Loss on debt extinguishment - 28,115 - 28,115 Loss on abandonment   18,270     5,748     18,649     9,603   Pro forma net income (loss) available to common shareholders before significant non-recurring items $ 48,541   $ (1,048 ) $ 93,000   $ 12,251     Pro forma net income (loss) per common share: Basic $ 1.47   $ (0.04 ) $ 3.02   $ 0.41   Diluted $ 1.45   $ (0.03 ) $ 2.97   $ 0.40     Weighted average number of common shares outstanding: Basic   32,967     29,841     30,793     29,693   Diluted   33,472     30,911     31,301     30,402   Revenue Reconcilation (In thousands)         Three Months Ended Year Ended December 31, December 31, 2007 2006 2007 2006   Oil and gas revenues, including the effects of settled derivatives $ 205,684 $ 127,075 $ 599,250 $ 414,072 Hedging ineffectiveness   -   155   74   110 Revenues from oil and gas production per income statements $ 205,684 $ 127,230 $ 599,324 $ 414,182