ATP Oil & Gas Reports First Quarter 2004 Results

ATP Oil & Gas Corporation (Nasdaq: ATPG) announced first quarter results and activities including:

  • Almost doubled daily production from the beginning of the quarter to more than 80 MMcfe per day by the end of the quarter
  • Commenced production from four new wells from three properties in the Gulf of Mexico and one in the North Sea
  • Oil and gas revenues of $24.0 million and a net loss of $2.4 million, including a charge of $3.3 million on early extinguishment of debt
  • New $185.0 million credit facility, $36.8 million in cash and positive working capital of $7.4 million at quarter end.


  • Production Increase

    During the first quarter 2004, ATP brought to production four wells at three properties in the Gulf of Mexico and one property in the North Sea:

    
         Helvellyn             North Sea       On production February 10, 2004
         Ship Shoal 358 (A-1)  Gulf of Mexico  On production March 26, 2004
         Matagorda Island 709  Gulf of Mexico  On production March 26, 2004
         Garden Banks 186      Gulf of Mexico  On production March 29, 2004


    These wells, along with the installation of a compressor at ATP's Brazos 544 platform, were significant contributors to the Company's increase in production during the first quarter. ATP's production increased from 42 MMcfe per day during the first ten days of January 2004 to more than 80 MMcfe per day during the last ten days of March 2004.

    During the first quarter 2004, ATP produced 4.6 Bcfe (78% gas), exceeding both previously announced guidance of 4.5 Bcfe and fourth quarter 2003 production of 3.3 Bcfe. In addition to the four wells described above, ATP completed and placed on production on April 29, 2004 the A-2 well at Ship Shoal 358. ATP reaffirms its previously announced guidance of 6.5 Bcfe for the second quarter 2004.

    Results of Operations

    Oil and natural gas revenues were $24.0 million from production of 172 MBbls and 3,617 MMcf for the first quarter of 2004. Comparable amounts in the first quarter of 2003 were oil and natural gas revenues of $20.4 million and production of 343 MBbls and 2,934 MMcf. Primarily as a result of improvement in our risk management activities, ATP recognized a 37% increase in average price realizations in the first quarter of 2004, $5.13 per Mcfe, compared to the same period in 2003, $3.75 per Mcfe. Natural gas price realizations increased 70% to $5.11 per Mcf and oil price realizations increased 8% to $31.13 per barrel from the first quarter 2003 to the first quarter 2004. For the first quarter 2004 the net loss was $2.4 million or $0.10 per basic and diluted share. Included in the net loss was a charge of $3.3 million on early extinguishment of debt. Net income in the first quarter 2003 was $2.4 million or $0.12 per basic and diluted share. See our selected operating statistics, income statement and cash flow data located within this press release for further details.

    For the first quarter of 2004, lease operating expense per Mcfe was $0.96, an increase from $0.73 per Mcfe in the same period in 2003, but a decrease of $0.41 per Mcfe from the fourth quarter 2003. As production increases, it is anticipated that lease operating expense per Mcfe will decrease as demonstrated by the improvement from the fourth quarter 2003 to the first quarter 2004. General and administrative expense increased to $4.1 million for the first quarter of 2004 compared to $3.1 million for the same period of 2003 primarily due to an increase in accounting fees of $0.4 million. In addition, we opened an office in the Netherlands late in the fourth quarter of 2003. Also in the first quarter of 2004, we incurred costs of $1.9 million in connection with our previous credit facility. These costs consisted primarily of legal fees of $0.8 million and professional fees of $0.8 million.

    In February, 2004 ATP entered into an agreement to sell an undivided 25% working interest in ten offshore blocks comprising seven developments (93.5% proved undeveloped) in the Gulf of Mexico. Total proceeds of the sale of the 10.56 Bcfe of proved reserves associated with the properties were $19.5 million of which $10.5 million was received in February 2004 and the balance was received in April 2004. In connection with the sale, the Company recognized a gain of $3.0 million in the first quarter of 2004. The gain associated with the second transaction will be recognized in the second quarter of 2004 when final purchase price adjustments are determinable.

    DD&A per Mcfe rose to $2.49 per Mcfe from $1.55 in the first quarter of 2003. A contributor to this increase was production from the Company's first property in the North Sea. Helvellyn, located in the Southern Gas Basin of the North Sea, began producing during the first quarter of 2004 and thus had no impact in 2003.
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