Each one in plain English, with the numbers worked through for a shareholder.
20 June 2006material agreement● Neutral
On June 14, 2006, the date of the annual shareholders meeting, ATP signed restricted stock agreements with eight non-employee directors. Each gets about $100,000 of restricted common stock (2,727 shares), vesting 50%/25%/25% over three years. Five of them (Swonke, Brisack, Wendlandt, Dilly, Thomas) also get a one-time grant of 6,300 shares vesting January 15, 2007. All vest immediately on a change of control. Bulmahn received none. The new shares add modestly to the share count.
21 Mar 2006capital raising announcement● NeutralMajor
On March 20, 2006 ATP privately sold 150,000 shares of new 12 1/2% series B cumulative perpetual preferred stock at $1,000 each, raising $150.0M gross and paying $4.50M in placement commissions. Like the August 2005 series A preferred, it is not convertible into common stock, so it adds a second preferred class to the share structure. The filing does not say how the money will be used.
On December 29, 2005 ATP signed employment contracts with 12 officers, including Chairman and President T. Paul Bulmahn, CFO Albert Reese Jr. and Senior VP Gerald Schlief. Pay stays at current base salary, and the contracts run to November 30, 2008 with automatic one-year extensions. If an officer is fired without cause or leaves for good reason, they get salary through the contract term plus a pro rata bonus, immediate vesting of restricted stock and one year of benefits. After a change in control, most get 1.5 times salary, Bulmahn gets 2.99 times salary and three years of benefits, and ATP also covers excise taxes under section 4999 on these payments. These are costs to shareholders in a takeover or dismissal, and they sit alongside the October 2005 rights plan.
This amendment to the September 2005 report adds the required financial statements for the Kings Peak properties ATP bought from BP for $18.6M; it does not change the deal. The seller's statements show oil and gas sales of $167.1M in 2003, $75.6M in 2004 and $27.0M for January 1 to September 21, 2005. Proved reserves fell from 73,366 MMcfe at end-2003 to 56,583 MMcfe at September 21, 2005 (the earlier figures are the seller's back-calculated estimates).
On October 19, 2005 ATP agreed to buy the Rowan Midland mobile offshore drilling unit from Rowandrill, Inc. for a net $50M, to be converted into a floating offshore production unit. It paid a $10M deposit at closing, then $1,050,000 a month for 15 months, with the balance due January 31, 2007 (prepayable without penalty). Until then the vessel is chartered to ATP for its Gulf of Mexico production operations.
On October 1, 2005 ATP's board adopted a shareholder rights plan, distributing one preferred share purchase right per common share to holders of record October 17, 2005. The rights become exercisable if a person or group acquires 15% or more of the common stock (or starts a tender offer for that), letting other holders buy shares at a discount; the rights expire October 17, 2015. The company says it is not a response to any specific takeover threat.
On September 21, 2005 ATP bought BP's 55% working interest in the Kings Peak leases (Mississippi Canyon 173/217 and Desoto Canyon 133/177) in the Gulf of Mexico, plus BP's 19.25% share of the Canyon Express Pipeline System, for $18.6M cash. ATP will operate the field, which has two producing subsea wells. The company is still deciding whether it must file financial statements for the properties.
8 Aug 2005capital raising announcement● NeutralMajor
On August 2, 2005 ATP privately sold 175,000 shares of new 13 1/2% series A cumulative perpetual preferred stock at $1,000 each, raising $175.0M gross and paying $5.25M in placement commissions. The preferred is not convertible into common stock. It ranks as a new class of securities ahead of common shareholders in the share structure (inference: standard for preferred stock, not stated in the filing).
On April 14, 2005 ATP refinanced again with Credit Suisse First Boston: the first lien term loan was raised to $350.0M, the second lien was terminated, margins were cut (LIBOR margin 6.25% to 5.50%), and maturity was extended to April 2010. Borrowings rose by $132.1M, giving $117.8M net proceeds after interest and fees. The press release ties the extra cash to Gulf of Mexico development and acquisitions and North Sea work at The Tors and Cheviot. This continues the 2004 loan amendments, with more debt outstanding.
3 Dec 2004capital raising announcement● NeutralMajor
ATP sold 4,000,000 new common shares at $14.00 each in a private placement to accredited investors, closing December 1, 2004, for about $53.2M net after $2.8M in placement fees. Chairman T. Paul Bulmahn separately sold 435,857 of his own shares in the offering, with no proceeds to the company. New shares increase the share count, and the company must file a resale registration statement within 30 days of closing.
What it means for a shareholder
4.0m new shares at $14.00 to raise about $53.2m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
On September 24, 2004 ATP and Credit Suisse First Boston amended the March 2004 first lien ($150.0M) and second lien ($35.0M) term loans. The first lien grew by $35.0M (to $185M per the press release), interest margins were cut (LIBOR margin 9.5% to 6.25%, 2% LIBOR floor removed) and covenants were loosened. ATP also bought back 1,926,837 of the 2,432,336 warrants (struck at $7.25) for $6.00 each, up to $11.6M, which the company says reduces dilution; net new cash was $18.4M.
ATP's audit committee dismissed KPMG LLP, its auditor since 1997, on April 16, 2004 and hired Deloitte & Touche LLP on April 19 to audit the 2004 accounts. The filing says there were no disagreements with KPMG and its 2002 and 2003 audit reports were not adverse; the only added wording concerned accounting changes for asset retirement obligations and derivatives. Shareholders will be asked to ratify Deloitte at the annual meeting.
