A Look Back and Forward at ATP Gas

• Posted by ToddSullivan
• on November 3rd, 2009

Have been discussing ATP with a reader for a while.  I post his thoughts here for a few reasons. Knowing him to be a well thought person, his opinion carries value and we also have a presentation from 2008′s VIC on it here when the stock was at $7. It now sits at $16.69.

Note: I am neither recommending buying or avoiding this, I post simply for readers to make their own judgement. This is particularly interesting as we have a years worth of data to review.

The Reader Submits

Quick data points:

• *attractive oil and gas assets (PV10 5.3 billion)
• *attractive infrastructure assets that they have successfully monetized and will continue to do so
• *was overlevered in ’08/’09 and has successfully weathered that storm and is setup for a huge 2010
• *where are oil prices going in the long term???? I think higher long term.

Since late September:
1) More equity dilution through 5 million common at $18.50
2) More dilution through convertible preferred at $22.20
3) Sale of Gomez pipeline $78 mil
4) Excellent drilling results at Mirage. Should triple reserves booked there (Recently announced the #3 well at Mirage (MC 941) encountered 266’ of net pay, triple previous estimations. As a result, ATP should book incremental reserves at YE09.)

• Total of $300 million in cash raised since Sept. When the Titan comes online this month they will monetize a portion of it which will be another $300mil (they just did a similar transaction with GE for the Innovator this summer)
• All of this cash delevers the company significantly and sets them up for capex needs for 2010.
• See attached presentation – production should more than double in 2010.
• The company currently has their PV10 @ 5.3billion – but since that time (June ’09) natgas prices have risen substantially –ATPG is over 70% oil, so the natgas increase won’t add as much to the pv10, but that still will have an impact on a 640 million market cap. Plus, the company also has NOT updated their PV10 to reflect their most recent discoveries at Mirage.
• Insiders own 16% of the company.
• Here’s a series of posts with some good info:

Recent Investor Presentation:

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.