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:
