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ATPG - ATP Oil and Gas


Myth465

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Yes a similar thing happened with ICO and FBK. I am noticing a trend. In the future I will buy the bonds and then the common once the bonds recover.

 

I tried getting those bonds when they were there, but they were for only qualified investors at the time. Any way around that?

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  • 2 weeks later...

It's finally time for ATP to execute!!! If we can hedge production at these rates + hopefully announce an increase in reseves and keep costs in check then we are definitely off to the races...

 

Hey Y'all. We got another permit! Let's just hope this commodity mania doesn't sink the economy!

 

http://phx.corporate-ir.net/phoenix.zhtml?c=123846&p=irol-newsArticle&ID=1548141&highlight=

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Is anyone adding to their position?  It's down today about 3% today and I am seriously looking at doubling my position!!!  With the potential of significant production growth from the GOM and higher oil hedges in place, we should be good long term.

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Is anyone adding to their position?  It's down today about 3% today and I am seriously looking at doubling my position!!!   With the potential of significant production growth from the GOM and higher oil hedges in place, we should be good long term.

 

I am overweight, and will be holding. Will lighten up a bit at $20. We will correct with everything else. Just the way of the world / markets. I am interested in the speech / update tomorrow.

 

---

 

Updated Presentation. Someone liked it  ;D. I cant wait until December 2011, my leaps expire in Jan but I think the transformation will be complete. With Capex being covered and FCF being generated I suspect we will get repriced. After that I hope they start looking at the debt.

 

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDIxNDY0fENoaWxkSUQ9NDM1MTcxfFR5cGU9MQ==&t=1

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If I had to guess I would say 24.9 in the exit rate production leaving Q4, 21 is the average, and 25.5 is the average for Q1 with an exit rate around 29. This is purely speculation on my part. I think Management should standardize their figures but its tough everyone is focused on breakeven cash flow vs. capex.

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I just listened to the latest call. Not much new info. If you believe about oil price will stay high ($70+), ATPG is the stock to own.

 

He needs to improve his presentation skills. Kind of odd. Sounded to be he is going to lose his breathe.

 

I am quite happy holding. He is an owner manager which is good for us, but ya his presentation leaves a bit to be deasired. I think he spends too much time on the history of ATP and not enough on the near term catalysts, valuation, pending cash flow, and pending capex. Perhaps I am too used to Tom Ward who has his stik down to a model T.

 

A simple schedule showing current production, and all pending production adds till mid 2012 would do wonders. Another schedule showing current annual cash flow, and various cash flow at different production levels would do even more wanders. Pointing out that they can hedge new production at above $100, and then showing the valuation gap on a flowing BOE, reserves / net assets, and projected cash flow would be the final thing I would like.

 

Mr. Market wants them to adjust their debt. I live in Houston and they are 1 really bad hurricane season away from a nightmare. A plan to spin out the infrastructure assets into an MLP with the debt, or a creadible plan showing that cash flow at 40k barrels with $90 oil and $4 gas = x, capex = y, and debt paydowns for 2012 will equal x-y+asset split / production paydowns.

 

I dont think you win by fighting Mr. Market. Just give him what he wants in a simple table format. Though I had similar comments about Tom Ward when he bought the Miss. I am glad I dont run companies. If we hit 40k barrels, get our second permit on time, and have a none eventful hurricane season with oil ending around $90 then I think the 2012 leaps will work out well.

 

Those are my thoughts, but I am a Johny come lately looking to make a quick buck (ok a few quick bucks). The old man has built a great company from scratch. I cant blame him for wanting to talk about it. I wonder what their end game is. They are getting old. I learned one very interesting piece of info. Most majors have something going on with mid east companies, which typically dont allow you to do work in Israel. Perhaps this is why ATP got the sweet deal. Its amazing that I own one of the few oil companies that is cheaper then it was in 2008 when oil was less than $60, and one where production has doubled. Interesting market.

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Its amazing that I own one of the few oil companies that is cheaper then it was in 2008 when oil was less than $60, and one where production has doubled. Interesting market.

 

ATPG collapsed to < $5 with the price of oil in 2008, and shares issued have increased by 60% including converted preferreds.

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True but it was at $23 prior to the spill. I should have picked a better date / been more specific. I guess my point was oil is at $120, and production is up significantly from early - mid 2008 (but I guess this is when oil hit $150) when it was at $40, and pre spill at $23 (I would say oil was around $60 here).

 

Most other stocks in the oil patch are at 52 week highs, except for Petrobank which is my other holding lol.

 

Basically what I meant to say is we should at least be at pre spill levels. The only downside is debt is up alot, but production is also and so are oil prices.

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  • 4 weeks later...

I was reading an article, and this image was in the article. Made me immediately think of management at ATPG, specifically T. Paul.

 

http://adventuresincapitalism.com/webservices/stupid_idiots.jpg

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#1 - have you heard the CEO speak? It's awful.

#2 - after latest earnings...drew $60m more debt (keep in mind debt this time last year was 1.2b, now almost 2b, enormous amount relative to market cap), 25m more in NPI and 40m more in overrides

#3 - buying into israel? to me that seems like someone being 200% long and buying more cheap stocks saying: look! they have so much potential, I can just flip it to someone else for a profit and the cost is so little. Take care of your own house first before going out and making more commitments.

 

Point being, I don't look at myself as a great investor, but I do think that I can tell if management is poor, and in this case I believe that they are. That being said, I still own shares. However, on initially buying shares, I planned to hold this company until the new platform (octabuoy) was online and fully running so that I would benefit from financial recovery as well as growth in the business. After seeing management continue to not exercise caution with regards to their finances, and not create any sort of margin of safety as far as expectations, I don't plan on holding this stock if it is anywhere close to being fairly priced. Just like to be an owner in companies where I respect management.

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Honestly I cant argue with any of that, which speaks for itself. Your take on Israel is also interesting. I need to review the fillings, but I dont mind Israel if the leases are cheap and they dont fully finance the capex.

 

2012 looks interesting, It doesnt look like much will be happening for most of the year. I am holding for the revaluation which should occur once the Titan is maxed out, $20 - $25 sounds like heaven right now. I do agree though, debt has ballooned over the last year, and they dont seem to understand that the market has alot of issues with their debt level / strategy. I am hoping for a light hurricane season, and a revaluation post titan. After that I will take a significant amount off the table.

 

Still need to listen to the Q1 call.

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Management may not be a as dumb as we think.

 

http://www.valueinvestorsclub.com/value2/Idea/ViewIdea/46399

 

Login as a guest to view. I am short term oriented, and looking for a large / quick profit. I am starting to believe that its not in Management's best interest to listen to me. If this post is true, though I will hold some of my options after $24......

 

Anyway these guys own a big chunk of the company, they feel our pain to some degree, and want the same outcome though with perhaps a different time frame. Give em room and let em work, is my plan.

 

I have seen info like this posted a few places, but VIC isnt usually part of the pump and dump crowd, and this seems quite logical and is what I would do / what a number of other companies have done with undervalued infrastructure.

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Yeha I saw that thing posted on the yahoo board a little while back. Though I think VIC is a pretty credible place, if there was a multiple choice test and one of the questions was - after reading that statement, is that information considered material non-public information, and I think I would select yes. Therefore though I hope that it is true, but I'm not banking on anything like that happening because I believe it would be illegal for them not to publicly disclose that and tell one investor group.

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I agree, and thats what I have thought when I have seen it around. I have listened to all of the presentations over the past 8 months and have heard no mention either. VIC as you said is a bit more credible though. Perhaps though these are thoughts, and nothing concrete has occurred so no need to share anything.

 

Its really the only real answer they can give to quickly address the situation. CHK and alot of other oil and gas stocks have done the same thing. Other wise it will take years to pay off the debt via cash flow. Why not get the stock price up so you have other options and levers of value. You also reduce the risk of a take over. I have no problem with Management wanting to own the infrastructure, just do it under another ticker and leave ATPG debt free / under levered. Charge a profit share / lease to ATPG and we can all move on, with a higher share price. The infrastructure will trade down to a 6% yield, and can fund other asset purchases. It seems like a no brainer, no loss situation.

 

I need to listen to the call to see if there is anything similar being eluded to. Management has been reminded time and time again (quite frankly on the last call by an analyst), that the street finds their business model reckless. I find it hard to believe that they just dont care, but stranger things have happened?

 

Management will capitulate to the market or will face a hostile bid at some point inmo. Either way my fears lie with the Hurricane Season. This year started with a bang, and my guess is it ends with one....

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Are you guys referring to the idea where they will move all the infrastructure assets and most of its debt into a new company and the old ATPG just paid the new ATPG fee on using the equipment?

 

 

Yep. I listened to the call today and they alluded to it, so I dont think there is a violation in terms of only telling certain shareholders. All and all I am pleased with how things are progressing, though they need to keep us better informed on those outages. Also President Obama is feeling the heat on gas prices so I think permits will flow a little freer. Here is hoping for 1 more ugly quarter with a very nice production end rate.

 

Now is the perfect time to do such a thing. Income investors are paying MLPs 6% which beats our high interest rates and low stock price.

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The idea makes sense and it will not be hard to implement as they are approaching +cash flow. The market needs to see a picture financial picture and cash flow and that will achieve both. As you said, they need to do it quick because rate goes up.

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