ATP Files for Chapter 11, Blames GOM Moratorium

ATP Oil & Gas on Friday announced that it has filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. ATP has taken this action in order to undertake a comprehensive financial restructuring.

ATP expects its oil and gas operations to continue in the ordinary course throughout the reorganization process and sees the reorganization as a helpful step towards deleveraging the company to position it for future development of its assets. ATP believes that the rights and protections afforded it by a court-supervised reorganization process, including the ability to access new financing, will provide ATP with the time and flexibility it needs to fully address its financial challenges and position ATP for long-term viability.

The primary reason for the reorganization began with the Macondo well blowout in April 2010 and the imposition beginning in May 2010 of the moratoria on drilling and related activities in the Gulf of Mexico. These events prevented ATP from bringing to production in 2010 and in early 2011 six development wells that would have added significant production to ATP. As of the date of this filing, three of these wells are yet to be drilled. Had ATP been allowed to drill and complete these wells, ATP believes it would have provided a material production change in 2010 continuing to today.

This projected increase in production should have substantially increased cash flows, shareholder value and allowed the company the ability to withstand normal operational issues experienced by owners of oil and gas properties in the Gulf of Mexico. In addition, these incremental cash flows would have mitigated or prevented the need to enter into many of the financings ATP has closed since the imposition of the moratoria—financings that require relatively high rates of return and monthly payments.

ATP has obtained a commitment for $617.6 million of debtor-in-possession (DIP) financing from members of its existing senior lender group, which will provide $250 million of additional funds and refinance into the DIP facility the amounts owed to those existing first lien lenders that participate in providing additional funds. Upon approval by the Bankruptcy Court, the new financing and cash generated from ATP’s ongoing operations will be used to support the business and ATP’s efforts to negotiate and implement a reorganization plan acceptable to its stakeholders.

ATP has filed various “first-day” motions with the Bankruptcy Court to obtain the relief needed to ensure that the filing does not adversely affect day-to-day operations for its employees or suppliers, including requesting authorization to continue paying employee wages and providing health care and other benefits. As a result of their receipt of the DIP financing, ATP has the capacity and intends to pay its suppliers in full under normal terms for any goods and services provided after the filing date of August 17, 2012.


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Stan Thurber | Aug. 21, 2012
Yes, it is a shame, but our industry brought this on itself by its own stupid actions. ATP should file suit against BP for causing the moratorium.

TOM JONES | Aug. 20, 2012
ATP FULL OF BS! Were these oil or gas wells . The whole bit of the timimng of get wells completed along with dramatic price swings especially with natural gas prices declining may have had the same impact. Poor management financial must share the bulk of the blame here. What were the projects and their flow projections?

Michael Davis | Aug. 20, 2012
Anyone that knows me knows Im not a big fan of the current administration for many reasons and obviously I didnt believe the moratorium was necessary and I think the blame for Macondo falls squarely on the head of both BP and the MMS and about 50%/50% and there should have been MMS officials arrested if there were BP engineers and also Tony Hayward should be in jail for lying to congress that the BOPE was to blame and the Obama administration that relied on those lies and shut the gulf deepwater fleet down should either be in bigger trouble over the consequences and admit that Hayward was lying. This a day or so after releasing the BSEE final ruling on the two barrier regulation they should be willing to admit the failure to have two barriers was the biggest reason for Macondo and go after Hayward and the administration for imposing an arbitrary ruling that has costs millions of innocent US citizens more than just money and at least one company to go bankrupt. Obama is doing the same thing by not allowing LNG to be exported. Is Romney listening?


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