Energy explorer ATP Oil & Gas Corp. (ATPG) reported weak fourth quarter results, pulled down by higher lease operating costs, higher general and administrative expenses, as well as delays related to a well re-completion.
Loss per share, excluding one-time items, came in at 20 cents, 8 cents wider than the Zacks Consensus Estimate. In the year-ago period, the Houston-based company earned $2.20 per share on an adjusted basis.
Revenue of $74.3 million was down 8.2% from the fourth quarter 2008 level. However, oil and gas sales rose 52.8% year-over-year and the decline in total revenues was due to the absence of revenue from other sources in this year’s quarter.
Volume Analysis
Total production during the quarter was up approximately 42.9% from the year-ago level to 1,250 thousand barrels of oil equivalent (MBOE). Natural gas volumes increased 8.1% to 3,006 million cubic feet (MMcf), while oil & liquids production during the quarter rose 82.9% to 748 thousand barrels (MBbls).
Realized Prices
During the quarter, the company’s realized commodity prices increased 3.2% over the fourth quarter of 2008 to $53.46 per barrel of oil equivalent (BOE). Average price for natural gas declined 24.0% to $4.70 per thousand cubic feet (MCF), while average oil price for the quarter rose 2.4% to $70.47 per barrel.
Expenses
Operating expenses during the quarter came in at $101.7 million, up 32.9% year-over-year. Lease operating expense rose 35.4% from the fourth quarter of 2008 to $24.5 million, while general and administrative expenses increased 32.6% from the prior year level to $19.1 million.
Balance Sheet
As of December 31, 2009, ATP had cash on hand of $109.0 million and long-term debt of approximately $1.2 billion, representing a debt-to-capitalization ratio of 67.1%.
Deepwater Update
ATP also provided an update on two of its deepwater developments, the Telemark Hub and the Canyon Express Hub. The company informed that Telemark Hub, its major deepwater Gulf of Mexico development, is on track to start production later this month.
ATP’s other deepwater development, Canyon Express Hub, was commissioned for initial production on Mar 11, 2010 at the rate of 30 million cubic feet per day (MMcf/d) gross.
Year-End Proved Reserves
As of year-end 2009, ATP had 135.2 million barrels of oil equivalent (MMBOE) in proved reserves, of which roughly 58% was oil and condensate. The company’s 2009 year-end proved reserves tally was 14% above the year-earlier level, while achieving a reserve replacement ratio of 376%.
Guidance
The company said that it expects first quarter 2010 production to be approximately 1,500 MBOE. For 2010, ATP guided towards a capital investment program of $570 million.
Company Overview
ATP Oil & Gas is engaged in the acquisition, development and production of natural gas and oil properties in the Gulf of Mexico and the North Sea. The company concentrates its efforts on natural gas and oil properties with proved undeveloped reserves that are economically attractive but are not strategic to larger or exploration-oriented independent oil and gas companies.
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