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Executives

Paul Bulmahn – Chairman and Chief Executive Officer

Leland Tate – President

Al Reese – Chief Financial Officer

Analysts

Philip McPherson – Global Hunter Securities

David Snow – Energy Equities

Leo Mariani – RBC Capital Markets

Ronald Mills – Johnson Rice & Company

Irene Haas – Canaccord Adams

Vance Shaw – Credit Suisse

Stephen Berman – Pritchard Capital Partners

Robert Murray – Credit Capital

Richard Tullis – Capital One Southcoast, Inc.

Bryan Claggett – Canaccord Capital

Michael Cannon – ORIX

Greg Bordelon – Decade Capital

Joshua Donfeld – Canyon Capital

ATP Oil and Gas Corp. (ATPG) Q4 2008 Earnings Call March 2, 2009 4:00 PM ET

Operator

Welcome to the ATP Oil and Gas Corporation fourth quarter and year end 2008 results conference call. (Operator Instructions). I will now turn the call over to Paul Bulmahn, Chief Executive Officer of ATP Oil and Gas Corporation.

Paul Bulmahn

Hello Americans, this is Paul Bulmahn. Stand by for the ATP earnings conference call. I lost a friend Saturday. Paul Harvey passed away. I never met him but he visited my house regularly as I was growing up. My parents believed their children should be aware of the news of the world. Paul Harvey brought the calamities and tragedies of global news to us, but focused as well on positive news and instilled in me a desire to generate positive happenings in things I touch.

Over the last six months, the financial community has been in meltdown with global financial turbulence never before witnessed by any of us. National security continues to be threatened by terrorism. Hurricane Ike roared through the Gulf and one ATP property is still unable to produce into damaged third party infrastructure.

But ATP has many positive facts to share with you today. Two thousand eight was yet another year in which ATP achieved some milestones. We had a reserve replacement of 214% of our 2008 oil and gas production and that is the benchmark of a company's ability to continue growing as it produces the reserves it already developed.

In 2008, we added 20 million barrels of proved reserves through acquisitions, revisions, extensions and discoveries to be developed and produced in the future. We produced 57 billion cubic feet, had asset sales of reserves despite the fact that oil and gas prices were plummeting dramatically from $147 a barrel to $35 a barrel during this timeframe. And we closed the year with proved reserves of 119 million barrels equivalent or 714 billion cubic feet equivalent, which is where we started the year before we produced and sold $472 million worth of assets.

ATP had record annual revenues of $618 million, which provided record annual net income for our shareholders. We further are entering into a partnership with GE Capital to recognize immediate value of $150 million to ATP for a floating steel infrastructure production platform with a 30-year life. Can we find things to grouse about during the year?

Absolutely, but I confess to you that in the face of the financial community turbulence our Hurricane Ike related loss of production in 2008, the consequent deferral of those revenues into future periods, at the same time the commodities price collapsed and we were subject to the one point in time 12/31/08 SEC valuation of our reserves for our debt covenants. Despite the chaff, our wheat harvest was exceptional.

Earlier this morning we issued our press release reporting our fourth quarter and year end 2008 results. This conference call is subject to the Safe Harbor language included in that press release and our last Form 10-Q.

Let me introduce at this time Leland Tate, our ATP President to share with you operational details to be followed by Al Reese, our Chief Financial Officer with financial notes, and following that we will open to a question-and-answer session. Leland, if you could begin.

Leland Tate

As Paul has just indicated, year 2008 was a year of extremes marked by record high crude oil prices, which plummeted to multiyear lows at year end. Natural gas prices also reached high levels early in 2008 and then fell sharply later in the year. There were major impacts to ATP's production resulting from Hurricanes Gustav and Ike. Yet through all of this, ATP achieved record financial results with significant additions to our reserve base for the year 2008.

This morning I will briefly report on these areas, as well as our progress on ongoing development and discuss the year end production results. Before getting to our development program, I would like to echo Paul's point that we experienced another great year concerning reserve additions by adding proved reserves by more than 20 million barrels equivalent during the year resulting in production replacement ratio of 214%

A key point to these proved reserve additions is that 81% of the additions during 2008 came from revisions, the extensions and discovers, which I believe is a strong indication of the quality of our reserve base.

As for our development activities, progress continued at a steady pace during 2008. We had a busy fourth quarter as we completed work at High Island 589 and South Marsh Island 190. The High Island 589 field came on production just before year end, and South Marsh Island 190 awaits the repair of a pipeline that was damaged as a result of Hurricane Ike.

At Gomez, a work-over on the number eight well was initiated and will be available for production during the first quarter. ATP made good progress during 2008 at the Telemark Hub in the Gulf of Mexico.

The first Mindock has been named the ATP Titan and is scheduled for installation at Mississippi Canyon 941 during the second quarter of 2009 with drilling to commence early in the fourth quarter and first production of the Mirage/Morgus fields late in the fourth quarter of 2009 or early first quarter 2010.

The development plan for Telemark field or at Atwater Valley 63 block has changed. The second Mindock planed for Atwater Valley 63 has been deferred. Instead of installing a dedicated Mindock, the first Telemark field well will be tied into Mindock I as soon as it can be drilled in the Subsea pipeline lake.

When the Mirage and Morgus fields are depleted, the Titan will then be moved to Atwater Valley 63 or the Telemark field to produce the remaining prude reserves at Telemark. This revised development plan will accelerate first production from the Telemark field and reduce overall CapEx by as much as $400 million.

In the U.K., the Cheviot project has also been delayed one year with a 2012 startup. Work on the floating hull has been deferred to match the new startup schedule. And the Wenlock #2 well was initiated in late 2008 as being prepared for production. This well tested at rates in excess of 55 million cubic feet a day and ATP has a 20% working interest and is the operator.

The 2009 development program will focus on our larger projects, which include the Telemark Hub and the Gomez Hub in the U.S. and Cheviot in the U.K. ATP estimates $300 to $500 million of development capital will be spent during 2009.

With the projects that we have in hand, we have large future growth potential and that potential will be supplemented by continued future acquisitions. We will carefully monitor the 2009 CapEx to ensure that our capital needs will be satisfied by cash on hand plus cash generated during 2009. Because ATP operates almost every development, we have the ability to slow down or speed up development if the need arises.

Production, as for production, we produced Bcfe in the fourth quarter of 2008 resulting in 57.4 Bcfe for the year. Production in the fourth quarter was significantly reduced because of the impacts from Hurricanes Gustav and Ike. ATP sustained very little damage to its facilities. However, our production was shut-in for a long period of time as a result of downstream pipeline repair needs.

We estimate that approximately 10 Bcfe of production was deferred to future periods from 2008. Production resumed at Gomez by about the 18th of January and has slowly been ramped up. And as I mentioned earlier, South Marsh Island 190 remains shut-in until late in the second quarter or earlier in the third quarter.

At present, we are producing approximately 130 million cubic feet a day equivalent and have already produced more in the first quarter than the entire fourth quarter of 2008. We're looking forward to startup of the number eight well at Gomez and the Wenlock well in the U.K.

I look forward to reporting to you further as the year progresses, and with that I will turn the program over to Al Reese, our CFO.

Al Reese

My name is Al Reese. I am the Chief Financial Officer. I will be following the press release that we put out. I will be mentioning page numbers, obviously, there may be different pages due to pagination, but I will try to keep my remarks as brief as possible. My goal will be, not to read what is already in the press release, but to give as much color as I can direction as we get into 2009 and maybe even a little bit toward 2010.

On the production that Leland has already talked about on selected operating statistics, we had previously announced 57 Bcfe for the year. Actual production was 57.468 Bcfe for the year. Fourth quarter previously announced about 4.8 actual was 5.2.

Clearly, Gulf of Mexico was down in the fourth quarter primarily due to Gomez. We are pleased to report that that is back online. It came back on line in the middle of January when the discovery pipeline was completed, and we are moving forward with ramping that production up even as we speak.

Revenues for the year, income statement fourth quarter $48 million about 60% is oil for 2008 $584 million, $585 million of revenue 55% oil. This is six straight quarters where oil has made up more than 50% of our revenue, even though both for 2007 and 2008 on a Mcfe basis gas made up more than half of the quantity.

That's one of the reasons you will begin to see us try to switch from a Mcfe basis to a BOE basis. You'll see us actually put it in print both ways and we will have a tendency to talk in BOEs at times and Mcfes at times.

In lease operating expenses in the Gulf of Mexico, clearly hurricane impact here $21.93 per barrel for LOE $3.65 per Mcfe. To put that in perspective, for the last two years we have averaged about $8.76 per barrel on LOE $1.46 per Mcfe. Most of that has to do with higher cost in the fourth quarter accompanied with the lower production that Leland has already mentioned.

First quarter as we look forward, I would expect first quarter to be higher than the $1.46, which has been our average. But as we get into the second, third and fourth quarter for the year, get toward more normalized production you would see our LOE begin to come back in line with previous years.

North Sea, North Sea LOE was a little higher this year than it has been in the past that's related to a one-time transportation charge. Total LOE in the North Sea this quarter was about $5.5 million roughly half of that amount $2.8 million related to a one-time transportation charge leaving about $2.7 million under normal recurring, which would be about $1.51 for LOE in the North Sea.

Over the past five quarters, our LOE in the North Sea has averaged between $1.27 and $1.61. So right in line where it has been in the past. And one thing I always talk about the operating margin. Clearly the operating margin was down for the quarter about 60% of realized price, but for the year 84% operating margin that's realized price less LOE. The operating margin resulted in a net Mcfe of $8.59 for the year, $51.54 per BOE.

DD&A for the quarter, $4.65 per Mcfe $27.88 per barrel. Gulf of Mexico was a little higher than it has been in the past primarily because Gomez, which is a property that has already achieved payout and is carrying a relatively low DD&A rate, was off production for most of the time. So in doing so what you're having is some of your newer higher cost properties pushup the DD&A that was offset by lower DD&A over in the U.K.

Flipping now to the balance sheet, which is on my page six, a strong year end cash position of $215 million, working capital of about $36 million, for bank working capital and for covenant compliance we are able to exclude or include certain items. It ends up being $73 million per the credit agreement.

To talk about the debt, we did redo our debt in June of 2008 middle of last year, which was very fortuitous in timing. We have $1.05 billion that is due in July of 2014 so it's not due for almost another five years. And the annual payment on that is just over $10 million per year principal and the balance is interest.

And the $600 million asset sale facility is due in January of 2011 so it's due in roughly two years from now. We've already reduced that by $273 million down to $327 million. Talk about the infrastructure partnership later that we announced last week. There is a further reduction coming from that. Effective rate on all of that borrowing is only 8.5%. That's LIBOR with a floor of 3.25 plus 5.25.

Key on our debt we are in compliance with all of our covenants at 12/31/08. We expect to be in compliance on pro forma basis for the balance of 2009. For the reserve report information, you have in the press release the SEC amount. We use scrip pricing for our bank.

We also are able to use part of our probable reserves for the bank and we have a PV-10 value of $3.7 billion for our reserves for bank compliance. Included on deferred revenue $59.229 million. This relates to the override sale that was completed in June of last year, $3.3 million of that was recognized in the fourth quarter.

Income statement other revenue you have $32.3 million for the quarter and $33.2 million for the year. All of that relates to the business interruption insurance that relates to the Gomez property. The $32.3 has essentially all been received and there is another $13.7 that is scheduled to be received much of which has already been received that will be recognized in the first quarter of 2009.

G&A expense was up for the year compared to 2007 $41.7 million compared to $32.0 last year. Roughly half of that amount $4.9 million relates to the non-cash stock compensation associated with 123R. The balance of roughly half relates to increased compensation, professional fees and just other G&A.

We did achieve a gain on the sale of our properties over in the North Sea of $119 million. All of that gain is associated with the Tors and Wenlock sale. We also had derivative income of $98 million as we've announced over the past quarter or so we have been in a restructuring program within our hedges. We have taken some hedges off the table.

We have rearranged timing on some hedges and of the $98 million $12 million is a mark-to-market gain. The other $86 million is both settlements of hedges as well as restructurings that had occurred during the fourth quarter.

Net income for the quarter $50 million $121.7 million for the year, as Paul has already pointed out, the 2008 of $121 is a record at $3.39 per diluted share. On the cash flow statement, $547 million in 2008 from operations compared to $329 in 2007. That's a 66% increase in cash flow.

And as I point out, that is in spite of the outages that we had in the fourth quarter, and in spite of some of the drop in oil and gas prices that occurred late in the year, we still had 66% increase in cash flow from operating activities. Before changes in assets and liabilities, that was $466 million from this year compared to $383 million last year. One of the key points, cash flow on this metric was $13.01 per share.

Our additions to oil and gas properties on a net basis $432 million this year compared to $835 million last year. Of the $918 million gross, $43 million of that relates to capitalized interest, so $874 million without capitalized interest essentially in line with what we had spent last year the $849 million from last year.

One of the things you will notice in our 10-K this year, there will be an adjustment to previously reported additions to oil and gas properties, as well as net cash provided from operating activities. This has to do a shift of both adding dollars to the cash flow from operations as well as CapEx. It had no impact on our cash or any of the other statements. It's purely just a readjustment of what had previously been reported.

As Leland has already talked about for this year, about $300 to $500 million in CapEx is our current estimate. The real key here, as Leland has pointed out, over $400 million was removed from our program this year, and that's all because we operate the project we have the ability to change the development costs and change in develop strategy for these projects and still recover the same amount of reserves.

We will live within our cash and cash flow for the year you hear a lot of companies say that. Fortunately we operate practically everything that we have, and we do have the ability to do that and we've shown the ability to make changes where necessary.

Last thing to talk about is the infrastructure partnership that we've talked about for several quarters now and my hats off to the GE team for working with us on this partnership. This is a very, very good transaction. I think it's' a good transaction for them. I know it's a good transaction for us. We will continue to be the managing partner. We will own 51% and be the GP for this situation. The effective date is June 1, 2008, which was the original date when we were talking to General Electric.

One of the key points here no reserves have been sold. I've talked to a few shareholders and questions have come up but the answer is no reserves were sold in this transaction. We continue to be the operator of the Gomez field and we continue to own 100% of the reserves that we owned before this transaction.

Is this the first of many transactions? I hope so. I think this is an excellent form of financing and sale of this floating arm for us. We have the Titan, which is scheduled to be on location middle of this year. We have the other projects that we'll be looking at, and so this is something that would certainly put into our portfolio as we go forward. Closing should occur in the next several weeks and, as already mentioned, the debt of 75% of the net cash proceeds received from this transaction will be used for pay down.

The 10-K is due today. I can tell you right now we will be filing for an extension on our 10-K. With all the activities of last week, we have decided that we've gotten the earnings release out, we're going to go through the 10-K a couple more times. So look for it to be filed hopefully before the end of this week, maybe the early part of next week.

Nothing to be alarmed about her purely just too much going on as we make a lot of these closings here in year end, and with that I will turn it back to Paul.

Paul Bulmahn

I think it's appropriate to begin questions at this point.

Question-and-Answer Session

Operator

(Operator instructions) Our first question is from Philip McPherson – Global Hunter Securities

Philip McPherson – Global Hunter Securities

I've got a lot of questions I'll just hit a couple and then re-queue. Can you talk about the reserve additions and the 3.8 million that was added to the acquisition what particular acquisition that is related to?

Leland Tate

Leland here, the 3.8 million barrels is from our Clipper project, that's Green Canyon 299 and 300. We acquired a 55% working interest there. The others I think we described, Phil. Did you need something specific more on those?

Philip McPherson – Global Hunter Securities

Just the extensions, did you get a big reserve boost at Gomez or I know in the past that's where a lot of it has been, was there anything in particular there that was?

Leland Tate

Actually, it was spread around quite a lot. We did get an increase at Gomez it was a nice increase. We got one at Tors in the U.K. we got one at Cheviot and in the U.K. our Canyon Express properties got some additions also. So it was pretty well companywide, as far as the overall reserves go.

Philip McPherson – Global Hunter Securities

One for Al, should we expect a gain in the first quarter on the sale of the Innovator, can you give us any guidance there?

Al Reese

Phil, no we will not recognize a gain for accounting purposes. This is effectively a transfer to a controlled partnership where we will be GP.

Philip McPherson – Global Hunter Securities

Great and I'll go back to Leland for one and then I'll hop off. Leland, what's the Gomez currently producing right now out of the $130 that you're producing as companywide?

Leland Tate

It produces right around 10,000 barrels a day gross and somewhere around 24 to 25 million a day of gas that goes along with that.

Philip McPherson – Global Hunter Securities

And how do you see that ramping up? What is the well capacity out there right now, not the capacity but what are the wells producing like?

Leland Tate

After coming back on after the hurricane they actually did quite well. They came on at even stronger than they were before. And then, of course, as the fresher spread out in the reservoir actually that kind of settled back down to about where they were. After we bring on the number eight well I would say we'll probably be in the 13,000 barrel a day range somewhere in the 35 million to 40 million a day gas.

Philip McPherson – Global Hunter Securities

Is the number eight the last one to drill out there or how many more do we have?

Leland Tate

There are at least two more wells that we will ultimately drill. And, of course, you know this year we are bringing in the Mississippi Canyon 800 and the Mississippi Canyon 754 wells, that being Gladden and Anduin and those are scheduled for late this year, early next year. So there will be continued work ongoing at Gomez for quite a long time in the future.

Operator

Our next question is from David Snow – Energy Equities

David Snow – Energy Equities

Do we just take 75% of the $150 million of your half of that $75 million times 75% and it all goes to pay down of your facility?

Al Reese

No. The transaction is effective June 1st. There will be fees that will be due from June 1st through closing. There's tax entry. There's some other adjustments. We're probably a couple of weeks away before we have that final number. But just like we did with Wenlock and Tors 75% of the net cash proceeds will go to the lenders.

David Snow – Energy Equities

It will be less than the just your gross calculation or more?

Al Reese

It will be less than the $150.

Operator

Our next question is from Leo Mariani – RBC Capital Markets

Leo Mariani – RBC Capital Markets

Question on your rigs right now, just trying to get a sense of what you guys have out there under contract for 2009 on the rig side and what the rates and the terms are on that?

Leland Tate

We have rigs contracted for three of our developments, actually four counting the work going on in the U.K. That the rigs over there are contracted through the end of the next well, and then, of course, here in the U.S. we have a rig for our Canyon Express project, one for the Mirage and Morgus piece of our project.

And then another rig that is a floater that can be used at Telemark as well as Clipper and in other locations that ATP has wells that it needs to drill. The rates range from in the mid-60s for our platform rig up to $540,000 a day for the largest of the floaters.

Leo Mariani – RBC Capital Markets

And what's the term on that floater in terms of how long you guys have that for?

Leland Tate

It's a one-year term or six wells, whichever is less.

Leo Mariani – RBC Capital Markets

And has that started or is that starting in the next few months?

Leland Tate

It has not started. The rig is on contract with others at this point, and when we get it will be a function of when its time is used up with the other operators. We're working presently with Diamond to try to determine when that will be. We want to be sure we have it before the October timeframe, some time around the October timeframe to be able to get our late year drilling done.

Leo Mariani – RBC Capital Markets

So that's going to move the start drilling those Telemark wells?

Leland Tate

It will either start at Telemark or Clipper. We're not sure which.

Leo Mariani – RBC Capital Markets

Jumping over to sort of Gladden and Anduin West, you mentioned trying to get those on stream by the end of 2009. I guess those are Newfield operated. Can you remind me again of what your interest is in those two fields and if you have any update as to where a new field is in the process?

Leland Tate

Yes. I certainly can. At Mississippi Canyon 754 we have a 25% working interest and at Mississippi Canyon 800, that's Gladden. We have a 10% working interest. We're working with Newfield in that we have to make some minor modifications to the Innovator in order to be able to get the risers up on the Innovator. So we're working with them on that. They are progressing in putting their plans together and getting materials to be able to try to get out there and get the pipe laid later on in the summer.

Leo Mariani – RBC Capital Markets

Okay. And what's you expectation of gross production from those properties? Do you guys have anything in terms of what you're thinking for when they start up?

Leland Tate

I'm not sure what Newfield has announced on those. I was trying to remember what we've said in the past. I want to say in the 20 to 30 million a day equivalent range on Gladden, and somewhere in the same equivalent, though it be in more oil on the 754 project or Anduin West. I got them backwards, there's more oil on Gladden and less oil on 754.

Leo Mariani – RBC Capital Markets

Last question for your guys here, what are the development costs associated with your proved reserves at year end '08.

Al Reese

I will have to look at our reserve report and I will answer that question later on this call. Sorry I don't have that number in the top of my head or available in front of me right now.

Operator

Our next question is from Ron Mills – Johnson Rice.

Ronald Mills – Johnson Rice & Company

Question about the ATP Innovator deal, just curious how it's going to look going forward in terms of, not necessarily what the transportation or tolling fee is per barrel, but how should we look at forecasting either a lower realized price or a higher LOE related to now having to report some sort of fee being paid to that MLP?

Al Reese

The transaction is I'll use the term, a very simple or relatively simple transaction. There will be ownership of the Innovator by the partnership. The partnership will have ATP as the general partner, ATP as a 49% limited partner and the GE group as a 49% limited partner.

There's a tolling fee that ATP Oil and Gas will pay to the partnership for use of the Innovator. It's based on a MCFE basis. And as that fee is collected by the partnership, the partnership will then make effectively fixed distributions out to the limited partners.

Both we and GE have agreed not to reveal those numbers at this point pending closing. As I said, closing should take place in the next few weeks, at which time some of that information will be released. It's been pointed out by Keith Godwin, who is our Chief Accounting Officer, this is a consolidated entity.

So what you will see on our financial statements and our income statements in all likelihood is a cutback for minority interest associated with the distributions, as well as the fee that's paid.

Ronald Mills – Johnson Rice & Company

You all talked about over $130 million a day the Gomez rate. Can you walk through your other production by area, North Sea, Shelf and the Deepwater?

Leland Tate

Yes. It's Leland. The Deepwater portion of that, of course here in the Gulf of Mexico, is on the order of let's see I'm trying to be sure I get the right number, about $77 million a day. And the North Sea at the present time but prior to bringing our Wenlock back on is about $7 or $8 million a day, and the rest of it is on the Shelf.

Ronald Mills – Johnson Rice & Company

You talked about South Marsh Island 190 still not being on line. It sounds like Gomez is still ramping and you have to the Wenlock #2 well to come online. Is there anything else from a development standpoint, and what is the connection timeline look, just so we can try to offset or see where the offset to the natural declines will come in?

Leland Tate

It's Leland. Throughout the year we will be adding production both from the Shelf and from small projects on the Shelf, as well as another Deepwater project that we have ongoing in Canyon Express. That's why we have a range on capital; it's from $300 to $500 million. Depending on how much of that we actually spend, that number can be higher or lower.

Contributing, of course, is the Deepwater project at Canyon Express, which would come on later in the year, and then our small Shelf projects would be filling in as time goes on to somewhat keep the Shelf flat. Gomez should come on in the first quarter and then, of course, South Marsh Island 190 is either late second quarter or early third quarter.

So we should be able to basically keep our production where it is and grow it somewhat as the year goes on.

Ronald Mills – Johnson Rice & Company

And then with the Mirage mortgage now sounds like more than likely is going to be an early 2010 startup, at least from an impact standpoint, to the company.

Leland Tate

It's Leland. I think that's right from an impact perspective. We're hoping to get the first of the wells on there right at the end of the year, but it could slip over right into the early part of next year.

Ronald Mills – Johnson Rice & Company

Can you remind me what your expected production is at that area?

Leland Tate

The facility is designed for about 25,000 barrels a day and 16 million cubic feet of gas. The wells will be ramped up one at a time. So we'll start out in the range of 7,000 barrels a day per well and 5 to 7, and gas with that will be anywhere from 5 to 7 million a day to go along with it.

The Telemark well, which is the Subsea well that we're bringing in from the Atwater Valley 63 block, should be able to produce at a bit higher rate than that just above 10,000 barrels a day. Part of what we're trying to work right now is the drilling program that would allow that well to be actually tied in and put on production.

It will probably be after the first of the year sometime, depending on when we actually get the rig and get the well tied in. We have to lay that Subsea pipeline about 11 miles down to Mississippi Canyon 941 where the Titan will be sitting and tie the well in.

Ronald Mills – Johnson Rice & Company

And then one last mop up for you, Al, capitalized interest for the year you said was $43 million. As you look ahead to 2009, would you expect a similar level of capitalized interest off your $300 to $500 million budget or should it come down a little bit?

Al Reese

This is Al Reese. I would expect that number to come down during 2909 simple because our CapEx budget should be less.

Ronald Mills – Johnson Rice & Company

And can it be somewhat proportional versus the $875 million you spent last year or what's the best way to look at that?

Al Reese

Give me a couple of minutes to talk with some people around here and I'll answer that question before we get off the call.

Operator

Our next question comes from Irene Haas – Canaccord Adams.

Irene Haas – Canaccord Adams

Maybe a little color on share buyback, if you haven't covered that already, and a little bit on the remaining project that you have in U.K., Cheviot, how is that looking in terms of timeline?

Al Reese

Yes. This is Al Reese on the share buyback program. We have not bought any shares up to now. We have thought about it, we are looking very hard at it. Now that we have some of the announcements out there on some of the deals that we have closed, we will in all likelihood be pursuing at various times what the Board has directed us to do and that is to acquire some shares on the open market.

Leland Tate

Irene, on the Cheviot project, as I said earlier, it is progressing. We have slowed it down. In the markets we're in today it felt like and it seemed to us that it needed to be moved back at least one year, and so we have done that.

And we've been able to match the spending profile on the hull, which is basically all, that we had initiated work on to fit with that. So it will need to be constructed to be scaled out and installed in the middle of 2012 for a late year start of production.

Irene Haas – Canaccord Adams

Do you have any interested partners?

Leland Tate

During the process with Scotia Watrous, we talked to several people. We have re-initiated calls and conversations with some of those people. We think that there's a reasonable chance on the proven undeveloped property that we'll be able to get some people interested in it.

Part of the problem with it is that it's a long lived project, long-term before you startup and we're still working trying to get the field development plan finally approved with the gas off-take route. It was a little too far away. We think now that we're where we are that there'll be more interest than there was before.

One question that came up earlier, I'm sorry, this is Leland, was on the future capital costs in the reserves. In our proven undeveloped reserves, we have about $2.50 a barrel somewhere in that range $2.25 to $2.75 for the CapEx that we will be spending going forward per Mcfe. It's a little bit less than that that we will be spending to complete the reserve report.

Al Reese

This is Al Reese on Ryan Mills question regarding the capitalized interest. At this particular point, use essentially the same number that we had in 2008 for capitalized interest. We will be proactive in updating that on a quarterly basis and trying to provide a little more guidance as we go through. But right now, somewhere in the same neighborhood we used for 2008.

Operator

Our next question is from Vance Shaw – Credit Suisse.

Vance Shaw – Credit Suisse

This is from Credit Suisse on the buy side. A quick question on the option that the French company had on your North Sea properties you sold, I believe it was a 60-day option, has that passed?

Leland Tate

It's Leland Tate here. Yes, it expired in early February on the 16th, so they let it pass. Additional conversations are ongoing around that, but the contract itself has expired.

Vance Shaw – Credit Suisse

I understand, but there's still some discussions, which could be interesting, I guess. You answered the question, thank you very much for the lenders on the call, that the $150 million asset sell to GE and there will be some lower amount you say times I guess 75% of some amount under the $150 million will gone down to pay down the term loan Bs?

Al Reese

That is correct.

Leland Tate

That is correct.

Vance Shaw – Credit Suisse

Were you drawn on the revolver as of the end of the year?

Al Reese

Yes, we are drawing on the revolver as of end of year.

Vance Shaw – Credit Suisse

I guess we'll wait for the 10-K on that to get the exact figure?

Al Reese

Yes. I mean, it was fully drawn. There is $50 million available of which $31 million is drawn and $19 million is reserved for a letter of credit issued for our Octabouy over in the U.K.

Vance Shaw – Credit Suisse

And it looks like, just looking at the numbers very quickly, that quite a bit of the hedge was monetized here in the 4th quarter. Do you have any thoughts on sort of future hedging positions or has your strategy changed?

Al Reese

This is Al Reese. I'll make a comment and Leland may want to do the same. Yes, we did monetize several of our hedges at the end of the year in conjunction with a restructuring program. Clearly with the asset sale that we have going on, volumes that previously had been hedged with the asset sold over in the U.K. we did unwind some of those hedges.

As we looked at the development plans for Telemark in the Gulf of Mexico, for Gomez in the Gulf of Mexico, we made a decision to restructure some of our hedges. We are in process of finalizing a new program now attached to the earnings releases is a hedge report that has our position as of this morning. Over the next several days and weeks we will be continuing to update that.

Vance Shaw – Credit Suisse

It seems to say that, obviously, you have production coming down because of these asset sales and also maybe some of the push out of some CapEx that maybe you don't need as many hedges as you had before.

Al Reese

That is correct.

Operator

Our next question comes from Steve Berman – Pritchard Capital.

Stephen Berman – Pritchard Capital Partners

Just to clarify the question the prior caller asked on the debt pay down, isn't that going towards the asset sale facility as opposed to the term loan?

Al Reese

Well, the term loan B is broken into two facilities. There's the $1.05 billion that's due in July of 2014 and then the asset sale facility is currently $327 million. So any asset sale that we make 75% of the net cash proceeds will be used to reduce the asset sale piece.

Stephen Berman – Pritchard Capital Partners

I just call them different things, but that's fine, that clears that up. Al, while you have the floor, what was the capitalized interest in Q4 08 added at 43?

Al Reese

Dave, I'll have to get…

Stephen Berman – Pritchard Capital Partners

I can look, that's not a problem. More importantly, since you've given out some numbers as far as covenant purposes go, in terms of EBITDAX for the quarter and the year, what is that number, as far as the banks are concerned, especially in Q4 where you had a big impairment and again on sale and the big derivative income number? How did that all figure into that calculation, if you have what that number is.

Al Reese

This is Al Reese. I do not have that in front of me but it is a fairly straightforward calculation. Our credit agreement is filed with the SEC and in that there is the definition of it. Essentially, it's a typical EBITDAX calculation, backs out impairment, backs our DD&A, backs out taxes, things of that nature.

Stephen Berman – Pritchard Capital Partners

So the gain on sale you'd have to back that out, for example?

Al Reese

No. Gain on sale is actually part of the calculation because it's in the ordinary course.

Stephen Berman – Pritchard Capital Partners

I came on a few minutes late. Did anyone give any Q1 or full year production guidance?

Al Reese

No. We did not.

Operator

Our next question comes from Robert Murray – Credit Capital.

Robert Murray – Credit Capital

To follow up on some of the previous questions. What percent of your production would you like to have hedged for 2009?

Leland Tate

We are required by our bank covenants to have about 60% of our PDPs hedged in the first year and 40% the year after, and our first objective, obviously, is to stay within the covenants as required. Of course, PDPs are not all of the production that we'll have during the year.

Historically, and probably going forward, we will stay in that 50%, 60% of overall production for the year in that first year. And what we're trying to do is restructure our fixed forward instruments a bit and allow ourselves more upside with some puts and some collars. So I would say in that 50% to 60% range of overall production and more flexible instruments is what we're trying to do.

Robert Murray – Credit Capital

And after the dust settled on your monetization was there a net cash gain?

Al Reese

This is Al Reese. Yes on the sale to EDF and the North Sea the Wenlock and Tors there was a $119 million recognized gain on that transaction.

Robert Murray – Credit Capital

Okay. Last question your SEC PV-10 value, can you tell us the prices that were used in that calculation, your end prices?

Leland Tate

I don't have the prices directly in front of me. It's the same ones the whole industry uses. It was in the order of $4.56 for gas as I recall, and I think oil was $45 somewhere in that range.

Operator

Our next question is from Richard Tullis – Capital One South.

Richard Tullis – Capital One Southcoast Inc.

Looking at the CapEx budget for '09 the $300 to $500 million, could you provide that by major project Mindock 1 etc.?

Leland Tate

It's Leland. As you can well imagine, that's still a fluid calculation for us. It will be though primary spent at the Telemark Hub that being mirage, Morgus and Telemark. At the Gomez Hub where we're finishing off the current well that we're working on, and at our Canyon Express properties where we will be participating in the drilling of two wells there. And then on the Cheviot project in the U.K.

Those are the major places that that money will get spent. There is a small percentage that gets spent on our Shelf projects throughout the year, but in terms of the overall, it's not great.

Richard Tullis – Capital One Southcoast Inc.

Okay. Leland, just roughly how much will go towards Cheviot?

Leland Tate

Cheviot it has restructured somewhere around $30 million that goes into it.

Richard Tullis – Capital One Southcoast Inc.

Okay. How much roughly is still left to spend on Mindock 1 for 2009?

Leland Tate

In 2009, it will have about $100 million, not primarily on construction, but on the mooring and instillation of the facility, the installation of the deck on top of the hull and in the hook up and commission.

Richard Tullis – Capital One Southcoast Inc.

What is the primary driver for the shift in the initial production? I know on the call last time we were thinking maybe 2Q something along those lines and I know it shifted out to probably about five, six months.

Leland Tate

It's Leland. It's primarily driven by moving capital around and being able to stay within our overall cash flow. That is what we committed to do and so as a result that's one of the projects that we were able to reshuffle to move out.

Richard Tullis – Capital One Southcoast Inc.

On the EBITDAX, I know you had mentioned most likely you plan to be within debt covenants for all of 2009. What sort of estimate are you using for EBITDAX for 2009?

Al Reese

This is Al Reese. The estimate is being driven off our internal estimates of production and we have not revealed that at this point. We've not provided official guidance. The price decks we used essential the strip pricing. We use our strip pricing supported by hedges. We then take adjustments to that either increases or decreases as we may see fit. The strip pricing is the primary driver of what we use for our pricing mechanism.

Richard Tullis – Capital One Southcoast Inc.

So at this point you're not ready to put out any guides for 1Q or 2009?

Al Reese

No. Not at this particular point.

Before we go to the next one, Steve Berman had asked about capitalized interest for the for the fourth quarter, $15.9 million is capitalized interest for the fourth quarter.

Leland Tate

It's Leland, I want to make a correction also on the oil pricing. On the reserve report actually the oil price is $44.60 a barrel and the gas price was $5.71 instead of $4.60, I was off on gas.

Operator

Our next question comes from Philip McPherson – Global Hunter Securities.

Philip McPherson – Global Hunter Securities

Just a couple of follow ups. I guess I was a little surprised that you closed out all the 2010 hedges and are you guys, for lack of better word, trying to call a bottom to the oil market here and cash them out and then potentially re-hedge as things approve or is there a little bit of strategy behind this? Can you kind of elaborate what you're thinking?

Al Reese

This is Al Reese. Phil, that's probably the best analyst we can give. As we moved into the October, November period of timeframe, we saw the oil prices, as well as gas prices, really beginning to bottom or certainly fall.

We took some hedges off the table in conjunction with restructuring I don't want to say it was all 100% cash call or pricing call. But, yes, I think that we have been very patient. I think we will be rewarded ultimately obviously with pricing doing what its doing right now can be questioned. But I think ultimately it will be proved to be the right move.

Philip McPherson – Global Hunter Securities

And you said that of the $98 million in the fourth quarter you broke it down as part was cash can you just give me those numbers again?

Al Reese

Yes. It was $12 million was a mark-to-market gain on future, and the balance was $86 million. A portion of that was actually settled during the fourth quarter for gains, and the balance of that was actually cash. I think it was a little than $10 million was settlement and the other was recognized gain.

Philip McPherson – Global Hunter Securities

Great. And Leland, a little bit more on the Cheviot. Can you tell us what you spent up to this point and you made a comment that you had a positive reserve revision there. Can you explain being that you never produced from there, what they saw differently from a year ago on the seismic or how you can get an increase on reserves without any production performance?

Leland Tate

It's Leland here. One thing I'd add to what Al said also on the hedges, we actually believe in gas prices could be lower than where they are in fact left our gas hedges in place in the $7.50 to $8 range somewhere around $20 million a day for most of this year and part of next. So believing the oil prices is going to go back up is one thing and the gas prices could easily could go down. That's kind of been our strategy.

At Cheviot we, two things you asked there how much we spent. Through year end we about $60 million primarily in the hull. And then in addition to that we see spending around somewhere around another $30 million maybe $35 million in 2009 to get us into the long-term program, which really starts in 2010.

The reserve changes there are around a change in development plan. We had done some more work looking at that field. We have a very strong feeling that that field is higher quality than maybe it was giving credit for and that the reserves could be substantially larger than what we were carrying. We did some work and believe that there are additional infield locations that will add reserves so we've added developmental wells.

And in addition to that, one of the issues with the reservoir is that it's not a strong water drive as such and so we've added a small source water injection project to go along with it. So it's really a combination of more wells and source water injections. So we've really change the development plan quite a lot.

Philip McPherson – Global Hunter Securities

I know you guys are reluctant to give guidance so maybe I can back into it here. If we're at 130 today and we're waiting for South Marsh Island to come in the second quarter or third quarter. Can you give us what that would add and then in the same way what the Canyon Express would add and maybe we can kind of build out own decline rates and maybe get a little closer to some type of production number?

Leland Tate

It's Leland. The South Marsh Island actually adds about $7 million a day somewhere in that range. It's not a large well. It's one of our shale properties. Canyon Express on a gross basis could add $25 to even $35 million a day. You have to net that down. We're only a 50% owner there so our net revenue interest is around 50%, so that's the incremental add for Canyon Express.

The smaller shale properties have the ability to add somewhere in the I'll use $5 to $15 million day a range because there's several of them and they're small work-overs and things like that and they come on throughout the year. And then the Wenlock well, as I mentioned earlier, it'll come on at about $50 to $60 million a day and we get 20% of that.

So that mixed in with timing should help you with the overall rates. And I mentioned earlier the Gomez well itself the number eight, that should take us on up around 13,000 barrels a day and somewhere in the $35 to $40 million a day gross gas rate.

Philip McPherson – Global Hunter Securities

And then off the gross we should use about 75% NRI?

Leland Tate

Actually it's about 0.625 because of the limited term override, which will end somewhere around the end of the year.

Operator

Our next question is from Bryan Claggett – Canaccord Capital.

Bryan Claggett – Canaccord Capital

A quick sort of 30,000 foot view down. You guys talk a great story. What is everybody telling you privately or maybe publicly what they don't like about ATP has driven the stock down $3.00? It's a third of book value and well less than your asset. What are people not seeing that you're seeing? I mean cut to the chase.

Paul Bulmahn

Brian this is Paul Bulmahn. I believe we have had more criticism of our debt than any other factor.

Bryan Claggett – Canaccord Capital

I was going to get to that.

Paul Bulmahn

I believe there are a lot of folks who look at us, and because we're in the E&P sector with all of the other E&P companies, they look at us and try to have a very similar simple view of us, as well as with all of the other E&P companies. And we do very little E where all of the other E companies, the E&P companies out there, it would not be very smart if they were borrowing to be drilling wildcat wells.

Because we have a 98% success rate of everything we've touched since I founded the company back in 1991, we have been more willing to have a larger debt component than anyone else in our sector. Now having said that, we also recognized that earlier last year long before others were even shouting that we were going to have a financial turbulence in the United States.

We already took steps to try to see where we would be able to monetize some assets and reduce our debt. And we've worked very prudently I think and very patiently to try to accomplish that in an absolutely crazy environment of the price of oil going from $40 to $147 a barrel and back down to $35.

Bryan Claggett – Canaccord Capital

I agree it's been a difficult market.

Paul Bulmahn

It's just been crazy to try to accomplish some of the objectives that we set for ourselves and I am not going to give a property away. You can count on that.

Bryan Claggett – Canaccord Capital

Just a bump on that. I assume though that in the other platforms or what have you, you might do something along the same line with some of the other platforms that you've got if you're in development and just about finished and pipelines what have you if the opportunity comes along.

Paul Bulmahn

Bryan, that's right on target. We have been looking at and talking to several parties about that. I think the GE partnership really expresses a great deal of the way we feel about that area of our business and GE is a quality partner. We've spoken with some other folks as well about perhaps partnering on a pipeline or other of our assets, and GE certainly has also expressed a great deal of interest in doing more things with ATP.

Bryan Claggett – Canaccord Capital

Last question along the same line, I assume that you're not doing an aggressive share buyback of 10 million shares or something in order to give yourselves some breathing room with the banks not to put your debt covenants at any risk whatsoever, is that accurate? Or why wouldn't you do a 10 million share buyback?

Al Reese

Well, to begin with the board has approved a 10% buyback, so we would be limited to essentially 3.6 million shares under the current approval. But, yes, you're right. Management here, along with the board, every employee, we own 23% I think is the exact number on the reporting figures of the company. Our focus is bringing value to shareholders. We're going to do what's necessary to do that. We're not going to put the company in jeopardy.

One of the points you made and Paul made with the debt situation. One of the things that I have to say I am very proud of is this. We put our new debt in place back in June of 2008 when oil was $130, $140 a barrel gas was around $13.

Here we are at the end of 2008 when oil and gas prices are clearly significantly less than that, roughly two-thirds less than what it was then and our covenants still work within a debt that we put in place back in June.

And I think that's a testimony to the lenders. It's a testimony to ATP and putting the structure in place that works and has the ability to work, not just in a high price environment, but can also work in a low price environment.

Bryan Claggett – Canaccord Capital

I think that was very prudent and good management to do that because I know of a couple companies who didn't do that and are not here to talk about it six months after the fact. Thank you very much for your help.

Operator

Our next question comes from Mike Cannon – ORIX.

Michael Cannon – ORIX

I was just wondering I think back a month or so ago you guys gave some CapEx guidance, or maybe it was in the last earnings call, a seven handle on it and we ended up over 900. Maybe I missed this earlier on the call and I apologize if I did, I was wondering if that was an acceleration of something or?

Al Reese

Mike, this is Al Reese. You may have missed it on the call and what you will see in our 10-K is this. In the fourth quarter of this year, we discovered an adjustment that needed to be made both in our cash flow from operations and our cash committed into oil and gas properties. The total was $147 million that needed to be run through in the fourth quarter that actually related to the first, second, and third quarter.

It will be spelled out very clearly in the 10-K. It had nothing to do with the income statement. Nothing to do with cash. Nothing to do with a balance sheet. It had to do purely with the manner in which some transactions had been recorded that essentially under reported cash flow from operations and at the same time under reported the amount spent on capital.

Michael Cannon – ORIX

Did you all provide you may not have it in front of you, what the negative price related revisions were realizing that the audit isn't done?

Al Reese

This is Al Reese. No, we did not. We did have impairment and I was checking my notes as we've been going through the questions I forgot to mention the impairment in my prepared remarks. The impairment of primarily exclusive related to our Shelf properties this year.

So from the impairments side it all was Shelf related. It had nothing to do with our U.K. properties. It had nothing to do with any of our development properties or producing properties in the Gulf of Mexico, Canyon Express, Gomez, Telemark, Ladybug, none of those were impaired in this environment.

Michael Cannon – ORIX

Okay. It looks like the negative revisions would be pretty small.

Leland Tate

It's Leland here. Yes, the nature of the Gulf of Mexico is essentially that. Being technical a bit, they're typically a water drive reservoir. You will get to the end of block and then have a very, very, very steep decline, so you do not really get much reduction in reserves by price.

In the U.K., it's usually a longer, flatter decline, but you are at low enough rate by the time you get there that price is not very impacted either at all. My estimate is a 1% to 3% kind of an impact from the price ranges that we have seen. We did not feel that it was substantial in our year end reserve reports.

Michael Cannon – ORIX

Okay. And on the GE investment or partnership, you may have mentioned this, but do you have an expectation on a closing timeline for that?

Al Reese

This is Al Reese. I would expect closing within the next week or so.

Michael Cannon – ORIX

At that point, will you be providing disclosure on what the net proceeds are, if you will, or is that going to take more time?

Al Reese

This is Al Reese. It will take a few days thereafter. A credit agreement requires I think it's either 10 business days or 10 calendar days for the net cash proceeds reduction, so our goal is to definitely be within that 10-day period.

Michael Cannon – ORIX

I was wondering if there are any acquisitions factored into your CapEx guidance.

Leland Tate

It is Leland. If you look back at us, typically our acquisitions come through overrides or through net pocket interests that kind of thing. We do not have any money laid out for expenditures on acquisitions, so we believe that there will be some. In fact, we are talking to people about some now that we think could happen.

We find that it is a really good time, both at the bottom and at the top of a market, to be able to add things and I think we could go back and demonstrate that it sort of worked out that way for us. But we do not have cash we do not plan to spend cash on acquisitions at this point.

Michael Cannon – ORIX

That is not rated, correct?

Al Reese

Yes, that is correct. Our debt is not rated.

Michael Cannon – ORIX

Okay. Had you contemplated the buying any of that back? I do not know where, trade?

Al Reese

This is Al Reese again. We are not allowed within our current structure of the credit agreement to make acquisitions in the open market. We are always looking for ways that we might be able to take advantage of a disconnect between the pricing and would love to be able to acquire some of that at the current trading prices.

Operator

Our next question is from Ron Mills – Johnson Rice.

Ron Mills – Johnson Rice & Company

Al, just a couple cleanups on just the cost structure, the G&A for the fourth quarter, plus or minus $14 or $15 million, was a lot higher than what your run rate had been. What should we look for as a run rate going forward? Can you breakout the expected non-cash comps?

Al Reese

Is your question relating to general and administrative?

Ron Mills – Johnson Rice & Company

Yes.

Al Reese

I would expect for 2009 the numbers should be essentially what it was in 2008. Will it be exactly 25% each quarter? I cannot say that, but I would certainly expect it to be in that particular neighborhood and, before we get off this call, I will see if I can get a better handle on the non-cash component.

Ron Mills – Johnson Rice & Company

Then, also just follow ones on that, you talked about the LOE being higher, obviously, in the first quarter because of volumes. How quickly do you think you all can get back to that plus or minus $1.50 per Mcf range?

Leland Tate

It is Leland here. I think we will come back to it fairly quickly. As we get our production rates back up in the $150 million a day range and I think you will start to see those come down. The thing that Al mentioned earlier that I am not sure everyone caught was that we had unusual costs also in the fourth quarter, which helped drive it up.

Two things, one here in the U.S. was the amount of money that we spent on hurricane repairs during the fourth quarter and there will be some of that that will rollover also early here in the first quarter. In the U.K., we also had the one-time pay down of sender pay that we had, which caused it to go up. So, you should start to see it coming back more in line, certainly, end of this quarter and beginning second, third and fourth quarter.

Ron Mills – Johnson Rice & Company

Al, what would you suggest from a DD&A rate? Just assume that the fourth quarter is a good number going forward or should that come down a little bit thanks to the impairment charge?

Al Reese

I would expect a $4.00 handle for both the Gulf of Mexico, as well as the U.K., as we go into 2009. Is it $4.10 or $4.80, I am not quite sure right now. Use $4.00 and something and I think you will probably be within talking range.

Ron Mills – Johnson Rice & Company

Then, two last ones. On the accretion expense as a fourth quarter run rate $2.5 to $3 million a good run rate or what should we do there?

Al Reese

I would expect $2 to $3 million accretion is a good number.

Ron Mills – Johnson Rice & Company

Then on U.K., can you give us a sense of U.K. pricing and what it looks like over there right now?

Leland Tate

It is Leland here. Prices have come down somewhat. We are going to be looking at somewhere around 40 to 50 pence per therm, which is roughly $6 to $7 maybe $8 in Mcfe. And, as you know, it goes down in the summer and up in the winter. So, it has come down with crude oil, but it is still a very, very strong gas market.

Ron Mills – Johnson Rice & Company

Al, can I just follow up via e-mail on what the fourth quarter stock comp was and do you think that it will be a similar split as to '08 where you had about 75% of your comp was cash and 25% was non-cash?

Al Reese

That sounds reasonable and hopefully before we get off the call, I can get you a better number. You can follow up with e-mail.

Operator

Our next question is from Greg Bordelon – Decade Capital.

Greg Bordelon – Decade Capital

Just a quick question for you on your year end '08 reserves, can you give us an idea just a rough cut on how much of the $720 million you have of PV-10 value for your undeveloped reserves is it attributable to Cheviot or Telemark projects?

Al Reese

I am sorry, Greg. You are asking about the CapEx that is in there for those two projects?

Greg Bordelon – Decade Capital

No. I am asking about the actual PV-10 value, how much of that is attributable to Cheviot and Telemark?

Al Reese

If you have other questions, I can give that to you.

Greg Bordelon – Decade Capital

Well, that was all and I can go ahead and get back in queue.

Operator

Our next question is from Josh Donfeld – Canyon Capital.

Joshua Donfeld – Canyon Capital

I was wondering in your PV-10 report what sort of production is assumed in the first couple of years in your PV-10 report?

Leland Tate

It is Leland here. I do not have those numbers specifically. We typically do not give them out, but basically the way that is generated is, since it is primarily PDP, it is generated off of the decline curves from the wells. So it should be very similar to the kinds of numbers that we have been talking about here today as far as when we add things throughout the year.

Operator

Our next question is from Steve Berman – Pritchard Capital.

Stephen Berman – Pritchard Capital Partners

Guys, I am just trying to get a sense for a G type feel on the Titan. I do not want to call it Mindock anymore. What has the investment been in that through December 31st, can you give us that number?

Al Reese

This is Al Reese. I am going to give you some information you did not ask because I had a previous question about it offline. The gross investment in the Innovator itself was about $300 million, which was essentially the value in which it was transferred into the partnership. So your question about what we have invested in the Titan is right on.

We will have invested slightly in excess of $500 million in the Titan when it is on location, moored up and ready to go. That relates to just the piece that would essentially go into a partnership or some kind of financing structure to where it could move from that location to the next to the next.

Stephen Berman – Pritchard Capital Partners

And that includes the 100 million that Leland mentioned before as incremental for '09? That's the number you think when it's all said and done, 500.

Al Reese

It would be in excess of 500. It wouldn't be six but the first number will be a five.

Stephen Berman – Pritchard Capital Partners

And since you mentioned the Innovator the $300 million is including what you paid for it when you originally bought it back in, what's that '06?

Al Reese

Yes. That would include the original purchase price of $60 million, the initial upgrade that took place in 2005 and 2006, as well as the expansion that took place in 2007.

Before we go to the next question, the stock compensation non-cash for 2009 as of today for existing is $7.1 million, again, that is all non-cash that would be included in 2009.

Leland Tate

It's Leland here, one other question on the PV-10 of Cheviot and Telemark, Mirage and Morgus, we're somewhere around $200 million PV-10 and the SEC report for Cheviot and somewhere around $550 million PV-10 for Telemark, Mirage and Morgus.

Operator

Our next question comes from Bryan Claggett – Canaccord Capital.

Bryan Claggett – Canaccord Capital

Just a follow-up question, I assume in the other revenues you guys quoted in the quarter end numbers was the insurance payments for the down time. Is that correct and I assume you guys will still have it in subsequent years?

Al Reese

This is Al Reese. Yes. All of the $32 or $33 million, depending upon the way whether you're either looking at fourth quarter or all year, was related to the loss production income business interruption. In addition, we have $13.7 million that should be recognized and received in the first quarter of 2009.

Operator

This concludes our question and answer session. AT this time, I'd like to turn the conference back over to Paul Bulmahn for any closing comments.

Paul Bulmahn

At this time, we have an announcement we wish to make. The well at Wenlock has just come on production during the day today at ramp up rates of approximately $25 million a day or approximately half of where we expect to produce it. And if you remember, we have 20% of that well and we are the operator and we're ecstatic to be able to share this news with you before we got off this call.

We're very proud of the strong performance in 2008 and we look forward to 2009 as we continue to execute our business strategy and monetize our assets. I thank the entire ATP team for their terrific efforts and I thank you for your continued interest and confidence in ATP Oil and Gas Corporation. Paul Bulmahn, good day.

Operator

Ladies and gentlemen, if you wish to access the replay for this call you may do so by dialing 888-203-1112 or 719-457-0820 with an ID of 7548787. This concludes our conference for today. Thank you for participating and have a nice day. All parties may now disconnect.

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Source: ATP Oil and Gas Corp. Q4 2008 Earnings Call Transcript
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