ATP OIL & GAS CORP

24 Dec 2008asset acquisition disposition● NeutralMajor

On December 18, 2008 ATP closed the sale of part of its UK North Sea Tors and Wenlock interests to EDF for £258.2M cash (about $388.9M) net of brokers' fees, with EDF also assuming future abandonment liabilities. This completes the deal announced in October 2008. The pro forma statements assume about $273M of debt is paid down under the term loan's 75% proceeds requirement, which would cut long-term debt to about $1.33B, and they show one-time charges for settling fixed price forward contracts and losing hedge accounting. Pro forma figures also show oil and gas properties falling by roughly $346M net and nine-month 2008 revenue falling from $537.1M to $462.7M.

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29 Oct 2008material agreement● NeutralMajor

On October 23, 2008 ATP's UK subsidiary signed an agreement to sell EDF Production UK 80% of its working interests in the Tors and Wenlock North Sea fields for £265M (about $430M), effective July 1, 2008, with closing expected by December 31, 2008 subject to UK regulatory approval. EDF also received an option to buy the remaining 20% for at least £72.39M, exercisable after the later of December 1, 2008 or closing, and for 60 days after that. ATP UK stays operator; Bulmahn says proceeds will reduce debt, fund the 2008-2009 development program and other purposes, and ties the sale to the asset monetization program launched in June 2008 with Scotia Waterous. This puts the Asset Sale Facility from the June 2008 loan to use, and the North Sea assets are being sold.

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27 June 2008debt financing● NeutralMajor

Effective June 27, 2008 ATP took new senior secured term loans from a Credit Suisse-led group: $1.05B maturing July 2014 and a $600.0M 'Asset Sale Facility' maturing January 2011, at LIBOR+5.25% (LIBOR floor 3.25%) with a 2.5% original issue discount, plus a $50.0M revolver (can rise to $100.0M). Proceeds refinance the $1.2B senior term loan due April 2010 and the $210.0M subordinated notes due September 2011, and go to general purposes. The loans are secured by substantially all Gulf of Mexico oil and gas assets and 65% of the stock of the UK and Netherlands subsidiaries; covenants include a maximum net debt/EBITDAX of 3.0x, and at least 75% of asset sale proceeds must repay the Asset Sale Facility. This replaces the earlier first lien and the 2007 subordinated loan, pushing out maturities at a higher rate.

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10 Apr 2008auditor change▼ BadMajor

On April 7, 2008 ATP's audit committee, after a competitive bid process, appointed PricewaterhouseCoopers as auditor for 2008 and dismissed Deloitte & Touche, which had served since 2004. Deloitte's report said ATP did not maintain effective internal control over financial reporting at December 31, 2007 because of a material weakness; its audit opinions on the 2006 and 2007 financial statements were not adverse or qualified, and the filing states there were no disagreements. PwC's appointment goes to shareholders for ratification at the 2008 annual meeting.

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20 Nov 2007material agreement● NeutralMajor

On November 15, 2007 ATP signed an underwriting agreement with Howard Weil and Johnson Rice to sell 5,000,000 common shares to the public at $47.00 each, off the shelf registration filed in October and amended in November. Chairman and President T. Paul Bulmahn, as selling shareholder, also gave the underwriters an option over up to 750,000 of his own shares for over-allotments; ATP gets no proceeds from his sales. The press release says about $56M (25% of net proceeds) must go to prepay term loans under the credit agreement (lenders may decline, and ATP may keep declined amounts), with the rest for drilling and development (a possible second MinDOC at Telemark, possible wells at Wenlock, Canyon Express and Green Canyon 37) and general purposes. This is the stock offering that followed the shelf filings of Oct-Nov 2007, and it adds new shares to the share count after the 2007 debt raises.

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14 Sept 2007debt financing▼ BadMajor

On September 14, 2007 ATP enlarged the September 7 subordinated loan from $160.0M to $210.0M on the same terms (11.25%, due September 7, 2011). Net proceeds of the extra amount were $47.5M after $2.5M of discount, fees and expenses, and the expected all-in rate is about 15.3% if held to maturity. The press release attributes the increase to strong demand.

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7 Sept 2007debt financing▼ BadMajor

On September 7, 2007 ATP took on a $160.0M unsecured subordinated loan from Credit Suisse and other lenders at 11.25% interest, maturing September 7, 2011, and ranking behind the senior credit agreement. Net proceeds were $146.3M after $13.7M of discount, fees and expenses. ATP expects the all-in cost, including non-cash charges, to be about 15.6% if held to maturity. The money is for near-term development, acquisitions and general purposes. This adds a new layer of debt on top of the senior loan.

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23 Mar 2007material agreement● NeutralMajor

On March 23, 2007 ATP amended its Third Amended and Restated Credit Agreement (dated December 28, 2006), adding $375.0M of first lien term loans at LIBOR+3.5%. Of that, $8.5M goes to fees and the $175.0M second lien term loan (LIBOR+4.75%) is repaid in full. Net cash to ATP was $191.5M, and total borrowings rose by a net $200.0M to $1.262 billion. The press release says the money is mainly for 2007 acquisitions and development, including Anduin, Aconcagua, Camden Hills and more of the Canyon Express Pipeline, and that the deal pre-agrees a possible MLP structure of up to $500M. This continues the pattern of repeated debt increases.

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