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Gold/Mining/Energy : Oil & Gas Exploration & Production Co.'s

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To: Ed Ajootian who started this subject5/11/2003 10:50:39 AM
From: Ed Ajootian  Read Replies (1) of 112
ATP Price Target $7.50/share, by CK Cooper & Co.

C. K. COOPER & COMPANY – Industry Report, April, 2003

C. K. Cooper & Company has not
provided Financial Advisory services to
this issue in the past 12 months.
The covering analyst does have an
ownership position in this issue.
C. K. cooper & Company does not own
5% or more of this issue.

ATP Oil & Gas does one thing and they do it efficiently, acquire
offshore proven undeveloped reserves that are deemed non-core
assets by the majors and then institute their team of experts and
complete the development of the well. This strategy has pioneered
the company to achieve 7 straight years of increased production.
In 2001 ATP made a bold move. They decided to apply their
proven business techniques into a new offshore area, the North Sea
of the U.K. After several years of hard work and a sizeable amount of capital expenditures their first well
the Helvellyn, tested in January at 60 Mmcfe per day, of which ATP owns 50%. This well is waiting for
completion to a BP platform; upon completion the company’s daily production will be more than 100 Mcfe
per day. For a small independent these production numbers are astonishing and prove that the
company’s business model is working.
It seems that the market has recently grown impatient waiting for the Helvellyn to begin production. This
has resulted in a stock sell off, in our opinion, creating a ripe opportunity for investors looking to
capitalize on the current natural gas shortage in the U.S. especially given the fact that 85% of ATP’s
proven reserves are natural gas.

“Innovation Driving Business Opportunities”
ATP’s first completed subsea tieback well, the Ladybug #1 in the Garden Banks Block 409, utilized a
groundbreaking methodology of simultaneously installing both the pipeline and the umbilical cord. This
process resulted in lowering developmental costs while at the same time limiting diver exposure. ATP
has long been recognized for pushing existing technologies to new levels. Their experience and use of
subsea technology will manifest seamlessly into their projects in the North Sea. ATP has recently
announced their second international acquisition in the North Sea, this time in the Dutch Sector with the
attainment of Block L06. Understand that this block hugs the coastline of the Netherlands, a prominent
import/export hub that on average sees over 300 merchant ships per day transporting goods all across
the world. With such heavy traffic, the use of traditional platforms has been discouraged given the
dangers related to fog and inclement weather that could lead to disastrous environmental damage if an
accident where to occur. At the request of Shell, ATP will begin the process of evaluating several PUD
locations that lie in or around these shipping channels. Their goal is to utilize their expertise in subsea
technology to capitalize on the immense amount of “low hanging fruit” installing umbilical cords to
already existing platforms allowing unproductive reserves to begin production. Additionally there is a
large area of the North Sea that is primarily used for bombing practice by the U.K. Air Force; this area will
also provide the company with another ideal area of exploitation utilizing subsea technology.

“Undervalued & Unique”
In conclusion ATP Oil & Gas has an enormous amount of unique and exciting prospects to keep their
team of experts hard at work. When you combine current production and strong commodity price
environment the resultant affects for a small company such as ATP is an enormous amount of cash flow
to fund future development operations. With projected cash flow of approximately $70 million for 2003
and $100 million for 2004 and a market cap of only $70 million the company is trading at one times cash
flow. The typical industry peer group trades well above three times cash flow. We would argue that ATP
represents a compelling fundamental value. Additionally we would also argue that as their GOM success
transfers to the North Sea, ATP would be a prime candidate for larger Oil & Gas Company looking to
expand operations. It is often rare to find a company that operates efficiently in one key area, let alone
a company that potentially will have significant first mover advantage in three distinct areas. We
maintain our current ratings of Short-Term/Long-Term Buy.
Philip J. McPherson - Oil & Gas Group
April 30, 2003
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