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ATP OİL & GAS AO Message Board

  • drill2011 drill2011 May 9, 2011 10:31 PM Flag

    Q1 2011: not a bad quarter at all!

    1- Positive cash flow from operations of $86 million
    2- ATP was almost cash flow neutral after investing activities!
    3- Plenty of liquidity - Unrestricted cash increased from $154MM to $182MM
    4- The per share loss is largely a result of the derivatives expense (a result of the price of oil rising..hardly a negative!), higher D&A and the moratorium related expenses.
    5- Revenue was $167MM!
    6- Drilling of the next telemark well is underway and on time!

    What does this quarter tell us? That ATP is alive and has sufficient cash to continue ahead with its plans to bring online the next 2 telemark wells. At that point, the shorts thesis will be effectively dead!

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    • Well I can definitely see why this is your #2-Job & I strongly recommend you keep your #1-Job as you'll need it.

      Now I'm sure there will be as seems to be always another buying opportunity as weak minded investors will sell the headline of $2.34/sh loss for Q1, but savvy investors will be buying those shares based on the $1.69/share operating cash flow prior to capex. There may be a small sell-off also due to the pogo-stick of oil prices we're currently riding - currently down $1.64/bbl, but I look for that to begin to stabilize as the markets take action:

      Oil prices tumbled after the CME group raised crude futures margins by 25 percent following volatile trading in recent sessions -

      Now tomorrows buying opportunity may be very short lived as Drill2011 has pointed out the market has already priced in a big GAAP loss, and may have already overpriced that in. The $167M in revenues is basically what I expected +/-$5M after I learned about Mars & Louisiana Sweet oil pricing.

      Back to some of your erroneous comments #2_Job -

      Writing $60M in NPI's/ORRI's - Actually they wrote $44.7M in NPI's/ORRI's/Vendor deferrals - They also paid $86.5M, resulting in a drop of $41.8M net.

      Now it is somewhat true that they are still "addicted to debt", but it is becoming close to a neutral position even before the next well comes online. Net Cash Provided by Financing Activities = $39.7M w/ $18.5M of non-recurring drilling moratorium costs & $85.9M of Non-Capitalized Capex.

      As far as MC941#4, they've been stating July production for 2-months, how is "early 3rd quarter" significantly different?

      As far as the current $153 short fall between Current Assets & Liabilities, $101M of these are tied to the NPI's/ORRI's/Deferrals and the other $52M will be very easily covered from existing Cash-Flow from Operations especially since WTI was $110+/bbl in April, w/ Mars Blend at $120/bbl and still at $110/bbl -

      Personally I bought another 9 Jan2012-$12.50 calls yesterday morning @ $5.45/sh trying to maximize my 2011 Roth IRA contribution. If there is another pull-back tomorrow I will be adding more in mt STD acct.

      GLTA Longs - DYODD

      I'm laid up now for the next 2-weeks or so after having Arthroscopic knee surgery today, so I plan to take advantage during market hours as much as possible. (Gotta test out my retirement plan -LOL) If I'm out for 3 weeks as the doctor expects I will be attending the May 26 Annual Shareholders Meeting, pending doctors approval on May 17th.

      Number 1 thing I'm looking for in tomorrows CC is additional clarity on MC941#4 & what the 2 bypasses were in relationship to. Number 2 would be Israel, but I really don't expect any thing other than lease info for another 6-9 months.

    • Thank you kindly Drill. Very much appreciate your input.

    • Hey Vik,

      The $90.8MM is a GAAP accrual figure while the $95.6MM on the cash flow statement is an actual cash number.

      It could be a timing difference, for instance, an expense was recorded in Q4 2010 but the cash only went out the door during Q1 2011.


    • Drill,

      Your explanation of derivative accounting was very helpful in understanding the story.

      If you don't mind my asking, why is the $(95.648) mil of additions to oil and gas properties on the cash flow statement different from the $90.8 mil of cap ex reported in the fifth paragraph of the Capital Resources & Liquidity section?

      Thanks in advance.

      - Vik

    • Do you have ANY understand of accounting whatsoever?

      The loss on the derivatives is a function of the rise in oil prices.

      Would you prefer that they don't hedge their production??

      They hedged their oil at $90, but oil rose to $110 - So for every barrel they sold, they "lost" $20 - Do you understand that it's not a true loss, but rather the "opportunity cost" of hedging?

    • Hey, they beat nicely on revenues. That was good to see.

    • Not bad...

    • Unfortunately the only thing that matters is the headline...And this is the reason why they waited till deadline to file.

    • and of course we all should have known that ATP can never beat a schedule...we can all hope that they don't slide too far into Q3...

    • If the shorts succeed in keeping this thing down tomorrow, I will be buying for the first time in over 12 months. I can see the light with this thing. Oil prices will only move up and they are already working on their next source of increased reserves.

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