ATP Acquires Acreage in Gulf of Mexico, North Sea

Mississippi Canyon
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ATP Oil & Gas Corporation on Wednesday announced its most recent acquisitions of oil and gas properties including three blocks in the Gulf of Mexico and one in the North Sea, record production for 2006 and an operations and development update.


On January 8, 2007, ATP completed the acquisition of a 50% working interest in Mississippi Canyon Block 305 ("Aconcagua"), a 16.67% working interest in Mississippi Canyon Block 348 ("Camden Hills"), and an additional 25.834% interest in the Canyon Express Pipeline Common System ("Canyon Express"). Aconcagua is currently producing approximately 10 MMcfe per day net to ATP and Camden Hills produced previously, but is currently shut-in. Both Aconcagua (located in 6,820' of water) and Camden Hills (located in 7,112' of water), along with the company's King's Peak, produce through Canyon Express, in which ATP now owns a 45.084% interest as a result of this acquisition. In addition to the proved producing reserves, ATP completed this transaction primarily to acquire the undeveloped reservoirs on Aconcagua, for further study of Camden Hills and to expand its interest in the King's Peak/Canyon Express hub area. ATP expects to be named operator of Aconcagua and Canyon Express and plans further development of Aconcagua beginning in 2009.

ATP increased its working interest in the fourth quarter 2006 from 50% to 100% at Ship Shoal 351 located in 350' of water in the Gulf of Mexico. Ship Shoal 351 is being developed targeting logged hydrocarbons similar to those being produced at ATP's Ship Shoal 358. Drilling is planned to begin in the first quarter 2007. ATP also acquired a 100% working interest in Block 49/12B adjacent to its Wenlock property in the Southern Gas Basin in the UK North Sea. This block contains an exploratory offset location to the proved reserves at Wenlock. The company plans to develop the reserves at Wenlock in 2007 with Block 49/12B slated for drilling in 2008. ATP is the operator of Ship Shoal 351 and Block 49/12B.

During 2006, ATP acquired an interest in eight blocks in the Gulf of Mexico and one block in the UK North Sea. ATP's independent reserve engineers are currently evaluating the properties to determine the proved, probable and possible reserves at these locations.


ATP estimates record production for 2006 of approximately 50.5 Bcfe or approximately 8.4 MMBOE. Of significance in 2006 is the increased Gulf of Mexico oil and North Sea gas production. Estimated oil production from the Gulf of Mexico for 2006 was approximately 3.2 MMBOE, compared to 0.7 MMBOE in 2005. Estimated gas production from the North Sea for 2006 was approximately 12.1 Bcf, compared to 1.4 Bcf in 2005. Actual production will be announced on or about March 1, 2007 in conjunction with ATP's year-end report of financial results and oil and gas reserves. Leland Tate, ATP's Chief Operating Officer stated, "The year 2006 was the most prolific year of production in ATP's history. The new production at Gomez in the Gulf of Mexico and Tors in the North Sea were the big drivers for us. The fourth quarter, however, encountered several setbacks including unusually low prices, bad weather and equipment delays at Gardens Banks 409 ("Ladybug") and a sidetrack of the third well at Tors. Collectively, these events accounted for approximately 3 Bcfe of production being deferred from the fourth quarter 2006 into 2007. We have completed the final connections at Ladybug. Production is scheduled later this quarter as soon as downstream third-party pipeline repairs are completed. The third well at Tors is now scheduled to be completed late in the first quarter 2007.

"My congratulations to our entire team for their efforts in 2006 and their commitment to 2007. Major Gulf of Mexico developments for 2007 are scheduled at Mississippi Canyon 711 (expansion of capacity), ATP's Telemark Hub (design and construction of the MinDOC), South Timbalier 77 (completion of a new well), and Ship Shoal 351 and High Island 589 (both platform drilling operations). In 2007 in the North Sea, we plan to complete the developments at Tors and Wenlock with significant progress expected in the field development plan approval at Cheviot. Our goal in 2007 is two-fold - continue significant growth in production and conversion of undeveloped properties to proved producing."


ATP also completed the most recent stage of an ongoing oil and gas hedge program. Below is a summary of ATP's hedged volumes and average prices by location and contract year as of January 8, 2007:

Gulf of Mexico
     2007      7.43 Bcf          $8.77 per Mcf
     2008      6.05 Bcf          $8.11 per Mcf

     2007      1.434 MMBbls      $70.60 per Bbl
     2008      0.732 MMBbls      $73.25 per Bbl

North Sea
               7.75 Bcf          GBP 0.523 per therm, or approx.
     2007                         $10.47 per Mcf
               8.68 Bcf          GBP 0.423 per therm, or approx. $8.46
     2008                         per Mcf

As of January 8, 2007, the above hedges account for a gain against current market prices of approximately $65.1 million. In addition to the above fixed forward hedges, ATP has oil puts in place for 2007 that provide a minimum average sale price of $58.56 on another 0.86 MMBbls. These puts are in the money yielding another $0.5 million gain. Please refer to the company's most recent investor presentation posted January 10, 2007, at for a complete listing of hedges and a more complete discussion of 2007 property developments.

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.

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