ATP Oil & Gas: Production Should Triple in Next 9 Months

I’ve written three previous times about ATP Oil & Gas (ATPG) this year (see here, here and here). I’m going to keep this one brief because I believe the case for very significant stock price appreciation over the next year is getting pretty obvious.

There are three parts to this story.

1. A huge increase in production is beginning right now
2. The balance sheet will continue to improve
3. There will be more reserve growth (there always is with ATP)

Production Will Be Triple Current Levels Nine Months from Now

I’m going to talk about production in terms of millions of cubic feet of gas equivalent per day. But be aware that ATP is already almost 60% oil producing and is only going to move more towards oil.

Current daily production: About 100 million cubic feet a day. 59% oil, 41% natural gas.

By the end of June 2010, daily production is going to be somewhere around 300 million cubic feet a day. Here is how it gets there. There are six big wells coming on production

1. Gomez sleeve shift – The company is currently working on a recompletion of a well at their largest producing property called Gomez in the Gulf of Mexico. Once finished, this is going to add the equivalent of 30 million cubic feet a day of production, about 75% oil. Source of the size of this increase is ATP President Leland Tate in the last earnings call
2. Canyon Express – The company is currently drilling a well that will be completed in Q4 of this year at their Canyon Express property. These Canyon Express wells are big producers. It is 100% natural gas, but will be in the region of 50 million cubic feet a day, which ATP will have a 50% share of. Source of the size of the Canyon Express well is again Leland Tate at an early 2008 conference.
3. Mirage well #1 – This will be the first producing well from the long awaited Telemark hub. ATP has been developing this property for 3 years. This has been drilled to total depth and will come on very early in 2010 or in a best case scenario at the end of 2009. This well is expected to produce at a rate of 30 million cubic feet a day and is almost 80% oil. The rate of production was disclosed by ATP president Leland Tate on their Q3 2008 conference call. Although I should mention that the company found pay area three times the size of what they expected when this was drilled (see recent press release) so I might be vastly understating the rate it will be produced at.
4. Morgus well #1 – The second producing well at the Telemark hub. It has been drilled down to something like 13,000 feet and had casing set. The final completion will be drilled from the ATP Titan and expect it to start producing in the first quarter of 2010. It is also expected to produce at 30 million cubic feet a day and is again almost 80% oil. Again the source for this rate of production is Leland Tate on the Q3 2008 conference call.
5. Mirage well #2 - The second producing well at the Telemark hub. It has also been drilled down to something like 13,000 feet and had casing set. The final completion will be drilled from the ATP Titan and expect it to start producing in the first quarter of 2010. It is also expected to produce at 30 million cubic feet a day and is again almost 80% oil. Again the source for this rate of production is Leland Tate on the Q3 2008 conference call.
6. Atwater 63 well – this will be through a subsea connection to the ATP Titan. This will be drilled in December and first production is expected before the end of June 2010. This is a bigger well, with first production expected to be at a rate of 42 to 60 million cubic feet a day and is 75% plus oil. The source again is Leland Tate on the Q3 2008 conference call.

So total all of those up and you are looking at incremental production of about 200 million cubic feet a day, likely 75% of it oil. This is on top of the current 100 million cubic feet a day of company production. That means by the end of Q2 2010 ATP will have about 300 million cubic feet of production which is triple the current level.

That is a pretty noteworthy increase.

From a revenue perspective, assuming strip pricing which is pretty flat on the oil front right now, that is going to take them from an annual run rate of $300mil to more that $1.1bil as you get both the triple in production and an increase in percent of production that is oil from 59% to closer to 65%.

My estimate is that about 75% to 80% of this revenue gets through as cash flow from operations for ATP. So that is about $900mil of cash flow from operations, which is about $17 per share. The current share price for ATP is $16.45.

The really great part is that they have another project called Cheviot in the North Sea that is on schedule for 2012 production that is going to result in a similar increase in production.

The Balance Sheet Will Continue to Improve

ATP management found out this year that they had too much debt for $40 oil and $4 natural gas at their current rate of production. The price has been some dilution of shareholders as management worked to get the balance sheet back in shape and continued with progress on Telemark.

The recently raised $300mil of cash through the sale of a pipeline at Gomez for $80mil, and the issuance of $140mil of convertible pref and $90mil of common shares.

There is more improvement coming. According to CFO Al Reese, they will have a deal finalized later this year to bring in a partner on the ATP Titan (the brand new floating production unit with a 40 year useful life that is about to be deployed at Telemark). They did a similar deal on the ATP Innovator in March of this year with GE. If the Titan deal is structured the same we should expect proceeds of about $300mil and ATP will keep 50% and control of the floating unit (they don’t give up any of the ownership of the reserves at the location). I’ve been following this company very closely and Al has told shareholders several times about deals that he believed would be completed and they have subsequently delivered as advertised.

And there is more than that. We can expect that once Telemark is producing (early 2010) that the Telemark pipeline will also be monetized like the Gomez pipeline just was. Proceeds for the Telemark pipeline according to Al will be $160mil. He told us proceeds for the Gomez pipeline would be $75mil to $80mil and they were in the end $78mil.

So that is $750mil of cash that is being added to the balance sheet. $300mil of it already received. The company had net debt of $1.2bil at the end of June, so bringing in $750mil in cash puts them in very good shape.

I think down the road as some point we could very well see the infrastructure vehicle that these assets have been put into taken public. ATP will still have a 50% interest in these assets through the entity, the value of those assets will be $150mil of the Innovator and $300mil of the Titan. That will be another $450mil of value hiding within the company.

There Will Be Additions to Reserves in the Year End Reserve Report

ATP is a company that has always rapidly grown reserves. Up to 2005 this growth came through acquisition. Since then is has come through extensions at there large Deepwater properties. This year is going to be no exception.

Here is the detail from the drilling of the first well to total depth at the Telemark Hub:

As previously announced, ATP experienced outstanding results with the MC 941 #3 well that was drilled to total measured depth of 20,043 feet. The MC 941 #3 well encountered approximately 266 net feet of logged hydrocarbon pay as compared to the discovery well (the Vastar MC 941 #1 sidetrack 1) that encountered approximately 87 net feet of logged hydrocarbon pay. These additional pay sands will increase production and the proved and probable reserves at the Telemark Hub.

That was the Mirage block. I found this very exciting because it was the portion of the Telemark hub where I didn’t expect upside reserve revisions. There is real potential for more significant upside at both Morgus and Atwater (the other two blocks).

With respect to Morgus, the size of the reservoir is not fully delineated. The discovery well has a very nice pay sand that is filled to the base and the delineation well drilled too far down dip to find the oil water contact. Since the oil water contact is unknown, ATP can only book proven reserves to the base of the sand in the original well.

Also, they can only carry one sand thickness (about 150’) down structure as the probable reserves even though there is some seismic evidence that the oil water contact is much deeper. That means the reservoir at Morgus could be much larger than what is on the books.

Atwater 63 is the same as Morgus. The size of the field has not been fully delineated, so they know it is bigger, the just don’t know how much bigger. It could be significant and they have been pretty excited about it.

So there you have it. Production to triple, revenue and cash flow to almost quadruple, another $450mil of cash being added to the balance sheet and significant reserve additions coming.

But Does the Current Share Price Already Reflect All of This?

The short answer is no.

I showed earlier that the cash flow per share once Telemark is ramped up is going to be somewhere around $17 with the current share price being only $16.45. A more sensible multiple would be 5x which would imply a share price of $85. You could argue that the multiple should be even higher given the Cheviot development is going to mean another step change up in production in 2012.

You can also look at this on a reserve basis.

• PV10 of 2P reserves is $5.3bil
• Value of infrastructure is $1bil (and it is being unlocked)
• Net debt is ($1.2bil)
• Total is $5.1bil / 56mil shares (assuming pref is converted) = $91 per share

So a couple of ways to value it both suggest $80 plus. I’m more conservative, I think more like $65 but I also believe that is a number that is going to grow considerably as we learn more about Telemark and the reserve upside as well as have oil and natural gas prices work in our favour.

The balance sheet has been holding the stock price down. With $750mil of cash added to it and production increasing, I think the stock market will start valuing the assets this company controls more appropriately.

Disclosure: I am a shareholder of ATP Oil & Gas

Comments

[Devon Shire:]

“its all hype”

You are one confusing fellow William. In a prior conversation you told me the following:

“I,also am long atpg, but i dont need to hype it non-stop . I think a double in production is doable as well as a double in price to the 30 and 40's. Beyond that, is a pipe dream.”

Here is the link to it:

seekingalpha.com/insta...

So you are also an ATP shareholder and think it could trade for $40. That’s a pretty bullish opinion. Why do you think it could trade for twice the current price ? You must like something about it. Considering how much time you spend making negative comments about the company it’s a bit of surprise that you are a shareholder.

“Devon shire is a well know lunatic that also goes by Swizzle on yahoo. He posts incessanctly on Motley Fool and Yahoo under multiple niks and only post every good item he can scrounge up”

I do post a lot on the Motley Fool Board and the Yahoo board. I follow the stock closely and I find it helps me to consistently put my thinking in writing. I’m a little surprised that you think I’m using more then Swizzled as a username. You have read everything I’ve written (you’ve told me so) and I would have thought you could spot the difference between me and someone who rants on about “frying the shorts” on an hourly basis.

I also am surprised that you would bring this up as I’ve been told by a few people that you post on the yahoo board as “Aliceoilexpert” and “Falcontix” and as Billy921. I read a few posts by all of those names and would have to say that they all certainly look like your writing. Same content, same comments about Swizzled as being a hyping hyena. Same $1mil of interest every 3 days comment. Same abbreviated writing style full of spelling errors. But honestly, I don’t care who provides the comment. I care about the content.

“he doesnt tell you that atpg is so debt laden that its interest cost is 1 m every 3 days or 40 dollars a barrel on current production”

C’mon Bill. You have read everything I’ve written. In each Seeking Alpha article I’ve written I’ve referred the reader back to my prior articles. The very first one covered the debt in very specific detail. In fact my mantra for months to anyone who would listen has been that ATP is either going to be a $70 stock or bankrupt. I felt that the asset value per share was multiples of the stock price, but that they had near term liquidity and covenant issues. You had to make the decision about whether or not they can handle their debt load prior to bringing Telemark on production. My analysis showed me that they could. Shareholders have suffered more dilution than I expected which has hurt value per share, but that dilution has taken away a huge amount of risk.

Here is my first article which covered the debt in detail.

seekingalpha.com/artic...

“They are so broke that thy ask their drilling company for debt extensions, they ask they floating production maker for deferals and they did the same with octobuoy”

It’s true they did get arrangements where payment for services would come out of production. I thought it was extremely positive for the company to have these arranged. Their vendors are willing to provide their services for very little cash now and take on full reservoir and production risk for their payment.

“they own so many people so much money, very little will flow to them”

These are the kinds of statements that you make that do annoy me. Why don’t you provide some support for this statement ? Why do you own shares if this is the case ?

The deferrals that they have arranged on the Telemark property total $200mil. With Telemark on full production next June ATP is going to have an annual cash flow from operations (assuming current oil prices) of over $800mil. So one quarter will cover the entire amount owed. The assumptions I used to arrive at those cash flow estimates are the current 100 million cubic feet a day of production, plus the incremental production from the 6 wells that are coming on line that I covered in detail in the article that these comments are attached to. The cash flow beyond this $200mil that they owe will go into Cheviot which is going to increase their production by an amount similar to what Telemark will.

Challenge my numbers. Do some work rather than make statements without evidence.


“Your NAV calculation is ludicrous”

Which part is ridiculous ? Again, no support. Just a statement. The independent 3rd party reserve engineers provide the PV10 number of $5.3bil that is the basis for the valuation. Tell me why it is ridiculous. Can you ?

And guess what. I think $5.3bil likely understates the PV10. So not only do I think that it is not ridiculous, but I think it is too conservative. And I’ll tell you why (I won’t make a statement without reasoning which is all you seem capable of). First, ATP found 3 times the expected reserves at the Mirage well. That means a pretty significant increase to the 3rd party reserve report. I think it could mean another 15 million BOE (Morgus/Mirage had 35 million BOE combined, so if you have triple what you expected at one of the two, a 15 million BOE increase is likely conservative) Second, they drilled an exploration well at Wenlock that hit pay and was put on at 50 million cubic feet a day (20% is ATP’s), these reserves were not in the 3rd party reserve report. Third, there is no oil/water contact known at either Morgus, or Atwater 63. There are additional reserves there, none of which are included in the $5.3bil PV10 figure. It could be significant. There is an excellent post on the Motley Fool Board by TMFDoodlebugger that covers the Telemark reserves. He thinks reserves at Telemark could easily double over time. Fourth, the $5.3bil PV10 figure was calculated with oil at $70 and gas under $4. Oil is now $80 and gas closer to $5.

So please tell me how the number is ridiculous. I’m willing to listen, just provide some reasoning to support your usual statement. I think my estimate is conservative.

“Did you tell everyone that Barclays has a sell on it?”

Are you kidding me ? You want me to tell everyone that Barclays has a sell on it but you don’t mention that there have been 6 recent upgrades ? Not one. Six. Do you even have proof that Barclays has a sell ? Here are the recent upgrades:

Sanders Morris
Canaccord Adams
Pritchard Capital
Wunderlich
Global Hunter
Howard Weil


“Did you tell everyone prof shorts arae shorting it?”

Yes. Read my articles. I’ve frequently questioned to wisdom of being short a stock that has a net asset value so many times it’s current share price.

“Did you tell everyone that they have over ONE BILLION IN DEBT + off balance sheet expense commitments to ge for the Innovator?”

Yes, again go to my earlier articles which mainly focused on the debt. Please name me a single E&P company that doesn’t have off balance sheet commitments that relates to the cost of lifting and transporting production. They also have future salary costs, and will have future toilet paper expense for the office as well.

“Did you tell people they can even pay Diamond Offshore for drilling expenses?”

You already mentioned the deferrals once. What you are doing is trying to make a very long list of things. I guess better that than make a short list of valid criticisms.

“Did you tell anyine that atpg cant pay for the titan and had to defer 89 m?”

Same point again on the deferrals. $200mil of deferred costs that will come out of Telemark production. Once Telemark is producing ATP will have over $800mil in cash flow and over $1bil in annual revenue. I believe these deferrals are a positive, not a negative.

“Did you tell anyone that they owe gifi for the 2nd min doc they cant afford?”

What do they owe them ? I’ve read all of GIFI’s disclosures, listened to their conference call and haven’t seen anywhere that ATP owes GIFI anything for delaying the MINDOC II. If you can provide some evidence (it is obvious that you can’t as you have raised this issue without evidence multiple times without providing evidence) please do.

“Until you do, you will afectionatly be called the hyping hyena!”

I like the nickname. Thanks.


“This guy is so sensitive he will probably run to seeking alpha to have me banned “

We would I do that ? When haven’t I ever replied to your lovely posts ?


“admit it to the world, you gave the cfo your nav calculations

admit it, im calling you out”

Do you think I somehow invented the idea of a NAV calculation ? Is ATP the first oil and gas company you have read something about ?
Here is a link to a 2004 presentation that ATP gave. In it is of all things…..a NAV calculation !

media.corporate-ir.net...

Here is another ATP NAV calculation presented by West Coast Asset Management at the 2008 fall Value Investing Congress. Before I even owned shares ! Someone else calculating a NAV per share for ATP ! That must mean that I am also a member of West Coast Asset Management ! Just like I am every other person on the internet ! Didn’t you even suggest that I am Al Reese once ?
seekingalpha.com/artic...

And here is a link to West Coast Asset Management’s investing book that they wrote. In it they discuss ATP Oil and Gas.

search.barnesandnoble....


Why do I keep replying to you ? I don’t know. You touch on some valid points. But you list 15 things when only 2 of them make sense, sometimes repeating the same thing 4 different ways. I suspect you are not a shareholder of ATP and have some motivation to try and discredit anything positive written about them. But as I have always said to you, some of your points are valid.

So keep on doing what you do, and the hyena will keep hyping. I think pretty much everything I write is pretty well supported with evidence or reasoning. I’m sure you will disagree.

The really important thing though is that this company still needs to execute and bring this production on line at the rates they have indicated. Until then, the outcome of my investment is not known in my opinion.

Oct 26 10:54 AM

[mind_geek:]

Bottom line is to make money on a stock... period. Im not sure what your avg cost is...if you rode this glorious company from 55 down to 6, if you bought at 6 and rode it up..etc, but with your blind faith and countless hours of research (Im betting youve invested a significant amount of time and effort offering rebuttals to every post) have you actually made any money on this stock? Is there any other reason to own a stock??

I spent 30 mins researching telemark, reserve ratios, sector analysis and most importantly pricing trends and charts. I made a bucket of money from 10 to 19, shorted it at 22 when your last article came out (best time to short is when the blogsters are pumping there stocks) and with todays market blow-up..looking to cover that short.

You have been a relative pariah for when to buy and when to sell this stock..I typically do the opposite of the timing of your posts which has been a great system in itself (props to you). You may easily blow me out of the water with your endless knowledge and devotion for ATPG, but at the end of the day...have you really made any money?

Your posts would be better suited as research reports than as investment advice.

Oct 30 02:55 PM

[mind_geek:]

So how'd that trade work out for you 4 points down from the 23rd? Earnings do little to move a stock like ATPG in this market (maybe in grandmas market of old, but not anymore) If there were ever 4 letters that signified doing the opposite..it would be CNBC!

Covered my short in this stock after market close today on panic selling. My guess is its patterning down again slightly for Monday...and then a total reversal of sentiment that things are once again rosy as the week goes on. This stock trades ONLY on the direction of oil itself and as you can see..it exaggerates the move in both directions.

This market and ATPG is a traders dream!


On Oct 23 01:52 AM CNBC Kicker wrote:

> Chill out guys. I love ATPG and buying before earnings. Hope to get
> a $3-$4 pop.

Oct 30 08:42 PM

[Offering:]

Hey

Oct 31 09:31 AM

[Offering:]

Hey Devon,

Always enjoy your posts. Not sure if you have read the last presentation by ATPG, but the CFO states that a double in revenues is possible (ref: Bloomberg interview). Now I'm not sure if he is reffering to this years revenues and it will double next year. I think he stated that 1 billion in revenues is not out of the questions...Maybe run the numbers on EPS at a billion and it may give you a better picture. But I'm not sure how much of that will got tot he contractors for their services.

Enjoy the posts,

Mark

Oct 31 09:39 AM

[Devon Shire:]

I have to say Mr. Geek. Your investing ability is impressive. Yes, it is embarrassing to watch you make money by doing exactly the opposite of what I suggest. But impressive nonetheless.

Look at how you have played me for a fool:

Article 1 published April 25 - Value after a stock and commodity collapse. Stock price at the time $6.36. Stock price now $17.50. 6 months have passed and the stock is up 275%. Certainly not up to your standards.

Article 2 published May 17 - ATP forgotten infrastructure value. Stock price at the time $7.00. Stock price now $17.50. 5 months have passed and the stock price is up 250%. Again, not up to your standards.

Article 3 published June 3 - 10 upcoming catalysts for ATP. Stock price at the time $9.01. Stock price now $17.50. 4 and a half months and stock price is up 194%. Just not what you are looking for.

Article 4 published Oct 5 - Production should triple in next 9 months. Stock price at the time $16.50. Almost a month ago and stock price is up 6%. That is awful. Only 6% in a month.

And to think. You are making buckets and buckets of money doing the opposite of what I suggest ! How much are you making ? The average annualized returns since my articles have been written must be over 400%. And you are somehow using me as a contrarian indicator to make gobs of money !

All I can say is congratulations. But I have to ask. If you are making that much money with all of 30 minutes of research how rich are you ? Do you have $500 million ? A billion ? More ?

I think Warren Buffett is pretty much the greatest stock investor of all time. His real glory years were the 1950s when his partnership averaged 29% per year. And here you are making multiples of this spending 30 minutes per investment. I'd suggest you write a book immediately, but why bother if you can play fools like me so easily without sharing your secret.

Here is what I think you should do. Next time when you get one of your ideas (other than simply doing the opposite of me which is like taking candy from a baby) how about you post here at the time you buy or short the stock. Your reports on the incredible amounts of money you make after the fact are great, but I'd really like to see it real time so I can put to rest any doubts that someone might have that you are full of it.

Now, with respect to me. I'm doing ok on this investment. I started buying in Oct 2008 as the panic was really getting going. I think I started in above $16 and averaged down most of the winter. I didn't ride it down from $55 as you suggest, but I'm not in at the bottom either. I feel damn lucky oil has turned around as fast as it has or this could have had a very bad outcome for me. I'm very optimistic that the stock price could be quite a bit higher by next June as this production comes on and oil prices keep rising. I'm hoping the Saudis do not loosen too early, as I believe they have the ability to control the price at this point.

I will write again in the future. Likely after we have a better idea of the upside in the reserves at Telemark. So get your considerable resources ready to short again after I "Pump" again.

Until then I will remain humbled by your ability to use me as your contrarian indicator to make vast amounts of money.


On Oct 30 02:55 PM mind_geek wrote:

> Bottom line is to make money on a stock... period. Im not sure what
> your avg cost is...if you rode this glorious company from 55 down
> to 6, if you bought at 6 and rode it up..etc, but with your blind
> faith and countless hours of research (Im betting youve invested
> a significant amount of time and effort offering rebuttals to every
> post) have you actually made any money on this stock? Is there any
> other reason to own a stock??
>
> I spent 30 mins researching telemark, reserve ratios, sector analysis
> and most importantly pricing trends and charts. I made a bucket of
> money from 10 to 19, shorted it at 22 when your last article came
> out (best time to short is when the blogsters are pumping there stocks)
> and with todays market blow-up..looking to cover that short.
>
> You have been a relative pariah for when to buy and when to sell
> this stock..I typically do the opposite of the timing of your posts
> which has been a great system in itself (props to you). You may easily
> blow me out of the water with your endless knowledge and devotion
> for ATPG, but at the end of the day...have you really made any money?
>
>
> Your posts would be better suited as research reports than as investment
> advice.

Nov 02 09:32 AM

[Devon Shire:]

I think what you are actually referring to is that production levels will double in 2010. Revenue levels is going to be much more than a double in 2010 over 2009 levels. There is first the benefit of the much higher production (see my article or the company's last presentation), then the fact that they are going be even more heavily weighted to oil (Telemark is 76% oil) and finally they are going to be selling oil at higher prices than 2009.

They will likely not hit a billion in revenue in 2010, but by June/July their annual run rate will be over a billion if production ramps up as expected. Telemark comes on in stages during the first half of the year.


On Oct 31 09:39 AM Offering wrote:

> Hey Devon,
>
> Always enjoy your posts. Not sure if you have read the last presentation
> by ATPG, but the CFO states that a double in revenues is possible
> (ref: Bloomberg interview). Now I'm not sure if he is reffering to
> this years revenues and it will double next year. I think he stated
> that 1 billion in revenues is not out of the questions...Maybe run
> the numbers on EPS at a billion and it may give you a better picture.
> But I'm not sure how much of that will got tot he contractors for
> their services.
>
> Enjoy the posts,
>
> Mark

Nov 02 12:45 PM

[Offering:]

Hey Devon,

Do you have any feel for EPS or estimates? I'm uncertain with the contractors sharing revenues from Telemark. Also I'm not sure of cost basis. I guess difficult to predict...Do you have any projections of EPS next year?

Thanks,

Mark


On Nov 02 12:45 PM Devon Shire wrote:

> I think what you are actually referring to is that production levels
> will double in 2010. Revenue levels is going to be much more than
> a double in 2010 over 2009 levels. There is first the benefit of
> the much higher production (see my article or the company's last
> presentation), then the fact that they are going be even more heavily
> weighted to oil (Telemark is 76% oil) and finally they are going
> to be selling oil at higher prices than 2009.
>
> They will likely not hit a billion in revenue in 2010, but by June/July
> their annual run rate will be over a billion if production ramps
> up as expected. Telemark comes on in stages during the first half
> of the year.

Nov 02 07:51 PM

[Devon Shire:]

I haven't ever really looked at EPS. More interested in cash flow.

I've plugged in the company numbers from their last presentation with respect to production from Telemark and assumed they complete the Gomez sleeve shift as expected. Using $75 oil and $6 gas I see revenue in 2010 of $931mil and cash flow from operations of $745mil.

If Cheviot comes on in 2012 I believe ATP will have over $1bil in revenue every year from 2011 - 2014. That assumes no major hurricane shut downs and oil averaging just over $80.


On Nov 02 07:51 PM Offering wrote:

> Hey Devon,
>
> Do you have any feel for EPS or estimates? I'm uncertain with the
> contractors sharing revenues from Telemark. Also I'm not sure of
> cost basis. I guess difficult to predict...Do you have any projections
> of EPS next year?
>
> Thanks,
>
> Mark

Nov 03 11:50 AM

[mind_geek:]

Well I guess you got me there...I was thinking shorter term than "article date such and such" now 6 months later up X.XX%! Everything goes up eventually...and down eventually if you stretch that date out to to suit your point. There were MAJOR dips in between your article dates...enough to give the avg investor a bloody heart attack!

My last article stated..."My guess is its patterning down again slightly for Monday (happened)...and then a total reversal of sentiment that things are once again rosy as the week goes on" (happening). Im not pulling this stuff out of my kiester....theres a logic to the madness.

"buckets" of money for me are not in the billions as you so -cleverly- suggest. Im hardly rich and maybe only right about 60% of the time on stock picks in general...it only matters making money on the patterned and hedge fund friendly stocks (aka..manipulated) that follow what the charts and volumes are telling me. Always keep a tight stop loss to minimize the damage if wrong (and I wrong often)...nothing hard about investing if you are disciplined.

Lets try a 3rd time to see if you can actually answer these simple questions that I keep asking over and over...

1. Overall..have you actually made any money on this stock?

2. Are all these countless hours and articles on a single company worth all the time you spend doing them?
(Honestly its very bizarre for a supposed passive investor to investigate every doing and intricate detail of a single company, post it to the world and get extremely defensive EVERY time anything negative is posted..who actually does that??)

3. Is this your only investment? Do you post this much info on every company you own stock in?

4. Is this your full time job and how much is ATPG paying you?


Unless you have significant amounts of money tied up in just this 1 stock...Q4 looks pretty obvious...

Nov 04 01:41 AM

[Devon Shire:]

I'm not sure why you continue our conversation. I'm certainly not getting anything out of it and I doubt that you feel that you are either.

So I'll answer your questions and maybe we can wrap it up for a while.

" 1. Overall..have you actually made any money on this stock?"

At this point $18, yes I'm up quite a bit. I was certainly hurting at $3 and more importantly at that point I thought I may have lost all of my investment. I started in last fall at $16.80. I averaged down several times under $10 every time they executed as they said they would (received the Wenlock proceeds, sold the Innovator, arranged for the NPIS). But I haven't sold, so I haven't locked in any gains.

"2. Are all these countless hours and articles on a single company
> worth all the time you spend doing them?
> (Honestly its very bizarre for a supposed passive investor to investigate
> every doing and intricate detail of a single company, post it to
> the world and get extremely defensive EVERY time anything negative
> is posted..who actually does that??)"

I guess only I do that. I knew I'd be sitting on this investment for a long time and it was getting uncomfortable so I started writing about it. Therapy I think. I guess I get defensive about your comments because I think they are pretty much out to lunch. You think a stock is a piece of paper, I think it is an ownership in the business. You've done (as you have told me) 30 minutes of research and make comments about how terrible management is. I've looked at every move they have made over 10 years and have a different opinion. I think I'm quite open to different opinions about this thing. Hell, I even agree with Billy on some things and have said so. What I'm not real agreeable to are statements that are supported by no facts or reasoning. But you are making tons of money by doing the opposite of me, so who am I to say.

"3. Is this your only investment? Do you post this much info on every company you own stock in?"

It isn't. It is the only one that I felt had the chance to go up an enormous amount in a pretty short time frame (a couple of years) though. I do only own a couple of other stocks and they have been performing (the companies) very well so they really haven't been all that interesting to write about as they aren't all that undervalued any more.

"4. Is this your full time job and how much is ATPG paying you?"

It's not my full time job and they certainly aren't paying me. What do you think ATP actually gains by anyone writing a positive opinion on a blog ? How can my writing help them find more oil and gas or develop it economically ?

So I've answered your questions. I'll let you have a reply and last word. I see someone else wrote a bullish Seeking Alpha article on ATP today. Find out if they have him on payroll and let me know. I am willing to accept cash and I think my articles are quite a bit better than his so I should be on a higher pay grade.


On Nov 04 01:41 AM mind_geek wrote:

> Well I guess you got me there...I was thinking shorter term than
> "article date such and such" now 6 months later up X.XX%! Everything
> goes up eventually...and down eventually if you stretch that date
> out to to suit your point. There were MAJOR dips in between your
> article dates...enough to give the avg investor a bloody heart attack!
>
>
> My last article stated..."My guess is its patterning down again slightly
> for Monday (happened)...and then a total reversal of sentiment that
> things are once again rosy as the week goes on" (happening). Im not
> pulling this stuff out of my kiester....theres a logic to the madness.
>
>
> "buckets" of money for me are not in the billions as you so -cleverly-
> suggest. Im hardly rich and maybe only right about 60% of the time
> on stock picks in general...it only matters making money on the patterned
> and hedge fund friendly stocks (aka..manipulated) that follow what
> the charts and volumes are telling me. Always keep a tight stop loss
> to minimize the damage if wrong (and I wrong often)...nothing hard
> about investing if you are disciplined.
>
> Lets try a 3rd time to see if you can actually answer these simple
> questions that I keep asking over and over...
>
> 1. Overall..have you actually made any money on this stock?
>
> 2. Are all these countless hours and articles on a single company
> worth all the time you spend doing them?
> (Honestly its very bizarre for a supposed passive investor to investigate
> every doing and intricate detail of a single company, post it to
> the world and get extremely defensive EVERY time anything negative
> is posted..who actually does that??)
>
> 3. Is this your only investment? Do you post this much info on every
> company you own stock in?
>
> 4. Is this your full time job and how much is ATPG paying you?<br/>
>
>
> Unless you have significant amounts of money tied up in just this
> 1 stock...Q4 looks pretty obvious...

Nov 04 08:57 AM

[mind_geek:]

Thanks for answering my questions..while it doesnt seem to accomplish anything bantering back and forth on the surface, it does help the avg investor out there who is consistently mislead by people pumping up a stock for personal reasons or stating opinions meant as investment advice and others who actually work PR for the company they are they are blogging about without disclosure.

Most investment advice is crap..we all know that and the people that give you the advice is more often than not meant for self-enrichment reasons only at the expense of the reader.

While you are very unique in the time spent and technique as a stock holder as Ive stated before, its more obvious now that you don't fall into the categories Ive described above. I mistook you for 1 the other 80% of sheisters who frequent yahoo finance. Im a jerk..I'll admit it, but Ive exposed others posing as passive investors..maybe I need a new paid hobby. (Full disclosure...yes, I get paid for doing this)

ATPG is a good investment into 2010 and I'll probably jump in and out as before since Im a devout chartist. I bought it again yesterday and will ride it to 22 as long as the fundamentals hold up. And again, I will spent no more than 30 minutes before I purchased, because Im a short time holder. Your intentions are longer term as stated and typically its WISE to spend more time researching obviously.

You'll be pleased to hear no doubt to know that you will no longer be "geeked". I will thank you 1 last time however for making me aware of this company...it trades like a schizophrenic biotech on steroids..what every trader hopes for! Onward and upward.

Nov 04 03:32 PM

[mind_geek:]

Facts as of today 11/5...

- Q3 (Sep) loss of $0.20 per share, $0.12 worse than consensus of ($0.08)

- revenues fell 36.6% year/year to $75 mln vs the $85.8 mln consensus

- In the Gulf of Mexico unplanned maintenance on the turbine-compressors at Gomez and normal declines in production rates contributed to lower production volumes during the same comparable periods

- oil revenues have accounted for more than half of ATP's revenues

This company may have a bright mid-late 2010...but for now it continues to struggle on day to day operations. Earnings dont mean much for a company like this...but the continued revenue declines for the past 5 quarters is certainly a red flag as management cant seem to monetize increased production to the bottom line. I would guess there will be more asset sales and/or share dilution before 1st Q end 2010.

After hearing of another large revenue decline I sold my most recent position at a small loss. Will look to get in again around $16.50..if not for the positive market news, this stock would have taken a major haircut today.

Nov 05 11:47 AM

[mna:]

The lackluster Q3 results were anticipated. Nothing materially changed, so the investment is intact. I'm really more interested in their ability to stick to their schedule for Titan production. Management says early Q2 2010 for the first 2 wells, I'm a bit more pessimistic at early Q3 2010 for first production.

The question now is whether they can get to production before they run out of cash and have to refinance (read: dilute). I think they can, but only time will tell.

Nov 05 03:44 PM

[mind_geek:]

Devonshire wrote:

What do you think ATP actually gains by anyone writing a positive opinion on a blog ? How can my writing help them find more oil and gas or develop it economically ?
______________________...

I have to at least comment on these statements...

- Most people dont write up elaborate articles about a company for the fun of it..they do it because thousands of people read it and yes, it helps prop up a stock (you claimed it yourself in a response to my post on how well the stock did after every article). Rumors and opinions always cause movement in a stock..this isnt exactly a small forum and this isnt exactly a large company. If you had wrote an article about Exxon, then no it probably wouldnt have mattered. Just stating the obvious.

After this latest batch of bad news for the company...wait another week or 2 to send out a new, glowing ATPG post and we'll see what immediate effect it has on the stock.

In case anyone cares...as predicted it fell to around $16.50 on Friday (read my last post) and I bought in again since its in an oversold pattern for now. Oil seems to bottom out at $77 and then proceeds to go into the low $80s over and over..SGY & ATPG are 2 of your best oil plays for this see-saw action.

Nov 09 01:06 AM

[Devon Shire:]

Mind Geek wrote:

"You'll be pleased to hear no doubt to know that you will no longer be "geeked". I will thank you 1 last time however for making me aware of this company...it trades like a schizophrenic biotech on steroids..what every trader hopes for! Onward and upward"

What happened ? This was like two days ago and I see you've posted twice more since then ! I thought I was free from any more "Geekings" ?


On Nov 09 01:06 AM mind_geek wrote:

> Devonshire wrote:
>
> What do you think ATP actually gains by anyone writing a positive
> opinion on a blog ? How can my writing help them find more oil and
> gas or develop it economically ?
> ______________________...
>
> I have to at least comment on these statements...
>
> - Most people dont write up elaborate articles about a company for
> the fun of it..they do it because thousands of people read it and
> yes, it helps prop up a stock (you claimed it yourself in a response
> to my post on how well the stock did after every article). Rumors
> and opinions always cause movement in a stock..this isnt exactly
> a small forum and this isnt exactly a large company. If you had wrote
> an article about Exxon, then no it probably wouldnt have mattered.
> Just stating the obvious.
>
> After this latest batch of bad news for the company...wait another
> week or 2 to send out a new, glowing ATPG post and we'll see what
> immediate effect it has on the stock.
>
> In case anyone cares...as predicted it fell to around $16.50 on Friday
> (read my last post) and I bought in again since its in an oversold
> pattern for now. Oil seems to bottom out at $77 and then proceeds
> to go into the low $80s over and over..SGY &amp; ATPG are 2 of your
> best oil plays for this see-saw action.

Nov 09 01:01 PM

[mind_geek:]

No shots your way..looks like folks have stopped posting anyways since the price is on the decline (funny how that is). For the trader this company is pretty much dead money for now as it broke a short term support level at $16.40. All the positive news and posts of $65 grandeur (Ok..a small shot) have failed to rally the stock so there doesnt seem to be much catalyst to move up for the rest of 09 since it posted a lousy quarter.

If there was tremendous value at this price, then a buyout would certainly be in the cards here. ..but, it would have probably already happened by now. (same goes for my beloved SGY)

I had high hopes of at least $22 but it looks like that may be a stretch now...it was a glorious ride up from 10 to 19 however! Maybe when the gold rush it over, people will pay attention to the small developer stocks. The predictions by some of $3000 gold prices are more fun to "geek" at these days.


> What happened ? This was like two days ago and I see you've posted
> twice more since then ! I thought I was free from any more "Geekings"
> ?

Nov 22 03:32 AM

[Offering:]

Hey Devon,

Hope your doing well. I had a great trade. Second best of the year with ATPG. Watching for now with a potential rally in the dollar could add more pressure to oil. I have a couple of questions about ATPG and it's value.
1-Do they have any of there production hedged? Reason for asking, is that if the dollar rally hard, Oil could have a nice pullback into first quarter.

2-Does anyone have a good feel how the reserves are priced. I'm looking for other Oil companies that have been sold recently and it's closer to $10 a barrell of oil. Making ATPG closer to a $40 target vs. your $80. Either way a premium from here.

3-Also How much of an increase in proven reserves could be coming? They mentioned a increase, a few months back. But nothing since then.

Thanks again for you informative posts....

Mark

Dec 06 09:34 AM

[Devon Shire:]

Hi Mark,

1) They do have a fair bit of the Gomez production hedged, but hadn't hedged any Telemark production as of the last 10Q. As Telemark is going to be producing close to 200MMcfe/d when fully on production vs the entire company production of 100MMcfe/d in Q3 09 that means they have quite a bit unhedged. Interestingly the oil hedges ATP has have re-participation clauses whereby if oil gets over $97 the hedges come off. Clearly they think oil prices could spike up in the fairly near future.

2) Can you provide some examples of the $10 per barrel transactions. Were they really oil producers or were they weighted towards gas ? Were they sellers under real pressure to unload assets ?

3) It's really only a guess as ATP is willing to say that they expect an increase but won't give much color until the 3rd party engineers do the work. They did give a nice hint though in their most recent presentation and in an interview Al Reese did on Bloomberg. In both instances they suggested that Telemark may now be their largest property instead of Cheviot. That would mean about at 20 million BOE increase at Telemark at a minimum. I think the increase at year end could actually be a fair bit bigger than that as they have also indicated that there will be reserve increases at Wenlock, Ladybug and Gomez in addition to the new pay sands at Mirage.


On Dec 06 09:34 AM Offering wrote:

> Hey Devon,
>
> Hope your doing well. I had a great trade. Second best of the year
> with ATPG. Watching for now with a potential rally in the dollar
> could add more pressure to oil. I have a couple of questions about
> ATPG and it's value.
> 1-Do they have any of there production hedged? Reason for asking,
> is that if the dollar rally hard, Oil could have a nice pullback
> into first quarter.
>
> 2-Does anyone have a good feel how the reserves are priced. I'm looking
> for other Oil companies that have been sold recently and it's closer
> to $10 a barrell of oil. Making ATPG closer to a $40 target vs. your
> $80. Either way a premium from here.
>
> 3-Also How much of an increase in proven reserves could be coming?
> They mentioned a increase, a few months back. But nothing since then.
>
>
> Thanks again for you informative posts....
>
> Mark

Dec 07 11:10 AM

[Offering:]

Hey Devon,

China again sought to satisfy its hunger for natural resources, as state-owned Sinopec Group agreed to acquire oil-exploration company Addax Petroleum Corp. for 8.27 billion Canadian dollars (US$7.19 billion), in what would mark the largest overseas takeover by a Chinese company.

Addax information: The best cacalulations I could figure was that Addax would recieve a little less then $10 for proven, probable and possible reserves per barrell.....rouglhy 738.1(MMbbl) X $10 gives you close to the US$7.2 billion paid. Also both companies with similiar dept issues. This would value ATPG 200-220 (MMbbl) X $10=US$2-2.2 billion ($40-$45 a share). Obviously there are some very real differences between Addax & ATPG. But It tells you where the market is at.....


Link to information:
www.addaxpetroleum.com...


• Founded in 1994 with shares listed on the TSX (since February 2006) and the Main Market
of the LSE (since May 2007) under the trading symbol “AXC”
• With average production of 136.5 Mbbl/d for 2008, Addax Petroleum is one of the largest
independent oil producers in West Africa and the Middle East
• Total reserves and resources of approximately 1.9 billion boe as at December 31, 2008
comprised of:
- 536.7 MMbbl of 2P reserves
- 825.1 MMbbl of risked prospective oil resources (2,772 MMbbl unrisked)
- 2.8 Tcf of contingent gas resources plus 83.5 MMbbl of associated gas liquids
• 2P reserve life index of 10.8 years
• Significant participating interests in four blocks of the highly prospective JDZ & a 72.5%
interest in deepwater offshore Nigeria block OPL291, immediately adjacent to Chevron’s
OML127 (Agbami)
• 45% interest in the Taq Taq license area and 26.67% interest in the Sangaw North license
area in the Kurdistan Region of Iraq
• Total exploration, development and production acreage of 4.4 million acres net to
Addax Petroleum
Addax Petroleum Corporation (AXC) is an international oil and gas E&P company focused on
Africa and the Middle East
MARKET CAPITALIZATION
CDN$4.3 BILLION (£2.4 BILLION)
* as at March 31, 2009
TOTAL SHARES OUTSTANDING
157 MILLION
(1) As at December 31, 2008, as set out in Addax Petroleum’s Annual Information Form dated March 4th, 2009. Totals may not add due to rounding.
Properties
Key Facts
2008 SALES
US$4.6 BILLION
2008 FUNDS FLOW FROM OPERATIONS
US$1.9 BILLION
Snapshot
2008 CAPITAL INVESTMENT
US$1.8 BILLION
LONG-TERM DEBT (DEC 31, 2008)
US$1.2 BILLION
Country

Dec 08 09:40 PM