ATP Entitled to Receive Production Payment

ATP Oil & Gas reports that it is entitled to receive a production payment of up to $5 million from Vermilion 408 as a result of a 1999 Purchase and Sale Agreement. In 1998 ATP acquired from Statoil all of Statoil's properties in the Outer Continental Shelf of the Gulf of Mexico. In 1999, ATP sold to The Houston Exploration Company four exploratory prospects received in the Statoil purchase. The four prospects comprised six blocks including the one-block Vermilion 408 prospect. In July 2004 ATP was notified that it is entitled to receive a production payment, capped at $5 million, from Vermilion Block 408 effective as of March 1, 2004. This production payment is a 5.3125% non operating, non expense bearing limited royalty interest in Vermilion 408. The last reported gross production at Vermilion 408 is approximately 3,300 Boepd. This production payment represents the third receipt of consideration received by ATP in addition to the 1999 sale proceeds.