ATP Files Voluntary Petition for Chapter 11 Reorganization & Receives Commitment for $617.6 Million in DIP Financing; Oil & G...
August 17 2012 - 5:32PM
Business Wire
ATP Oil & Gas Corporation (NASDAQ: ATPG) today announced
that it has filed a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of Texas. ATP has taken this action
in order to undertake a comprehensive financial restructuring. ATP
expects its oil and gas operations to continue in the ordinary
course throughout the reorganization process and sees the
reorganization as a helpful step towards deleveraging the company
to position it for future development of its assets. ATP believes
that the rights and protections afforded it by a court-supervised
reorganization process, including the ability to access new
financing, will provide ATP with the time and flexibility it needs
to fully address its financial challenges and position ATP for
long-term viability.
The primary reason for the reorganization began with the Macondo
well blowout in April 2010 and the imposition beginning in May 2010
of the moratoria on drilling and related activities in the Gulf of
Mexico. These events prevented ATP from bringing to production in
2010 and in early 2011 six development wells that would have added
significant production to ATP. As of the date of this filing, three
of these wells are yet to be drilled. Had ATP been allowed to drill
and complete these wells, ATP believes it would have provided a
material production change in 2010 continuing to today. This
projected increase in production should have substantially
increased cash flows, shareholder value and allowed the company the
ability to withstand normal operational issues experienced by
owners of oil and gas properties in the Gulf of Mexico. In
addition, these incremental cash flows would have mitigated or
prevented the need to enter into many of the financings ATP has
closed since the imposition of the moratoria—financings that
require relatively high rates of return and monthly payments.
ATP has obtained a commitment for $617.6 million of
debtor-in-possession (DIP) financing from members of its existing
senior lender group, which will provide $250 million of additional
funds and refinance into the DIP facility the amounts owed to those
existing first lien lenders that participate in providing
additional funds. Upon approval by the Bankruptcy Court, the new
financing and cash generated from ATP’s ongoing operations will be
used to support the business and ATP’s efforts to negotiate and
implement a reorganization plan acceptable to its stakeholders.
ATP has filed various “first-day” motions with the Bankruptcy
Court to obtain the relief needed to ensure that the filing does
not adversely affect day-to-day operations for its employees or
suppliers, including requesting authorization to continue paying
employee wages and providing health care and other benefits. As a
result of their receipt of the DIP financing, ATP has the capacity
and intends to pay its suppliers in full under normal terms for any
goods and services provided after the filing date of August 17,
2012.
Additional information is available on ATP’s website at
www.atpog.com or at
www.kccllc.net/atpog and by calling (866) 967-1787.
ATP’s legal advisor on the restructuring is Mayer Brown LLP and
its financial advisors are Jefferies & Company, Inc. and
Opportune LLP.
About ATP Oil & Gas
Corporation
ATP Oil & Gas Corporation is an international offshore oil
and gas development and production company focused in the Gulf of
Mexico, Mediterranean Sea and the North Sea. For more information
about ATP Oil & Gas Corporation, visit
www.atpog.com.
Forward-looking
Statements
Certain statements in this press release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
These statements involve certain risks and uncertainties that may
be beyond our control and may cause our actual future results to
differ materially from our current expectations both in connection
with the Chapter 11 filings ATP is announcing today and our
business and financial prospects. Statements of management's
expectations, including its desire to successfully restructure in
order to position ATP for long-term viability and success, to
address its financial challenges, to address important issues in an
orderly way and to make ATP stronger and more competitive are based
on current assumptions and expectations. No assurance can be made
that these events will come to fruition. We do not undertake to
update our forward-looking statements. Factors that could
affect our results include, but are not limited to: (i) the ability
of ATP to continue as a going concern, (ii) the ability of ATP to
obtain Bankruptcy Court approval with respect to motions in the
Chapter 11 case, (iii) the ability of ATP to prosecute, develop and
consummate one or more plans of reorganization with respect to the
Chapter 11 case, (iv) the effects of the bankruptcy filing on ATP
and the interests of various creditors, equity holders and other
constituents, (v) Bankruptcy Court rulings in the Chapter 11 case
and the outcome of the cases in general, (vi) the length of time
ATP will operate under the Chapter 11 cases, (vii) risks associated
with third-party motions in the Chapter 11 case, which may
interfere with the ability of ATP to develop one or more plans of
reorganization and consummate such plans once they are developed,
(viii) the potential adverse effects of the Chapter 11
proceedings on ATP’s liquidity or results of operations, (ix) the
ability to execute ATP’s business and restructuring plans,
(x) increased legal costs related to ATP’s bankruptcy filing
and other litigation, and (xi) the ability of ATP to maintain
contracts that are critical to its operation, including to obtain
and maintain normal terms with their vendors, customers, landlords
and service providers and to retain key executives, managers and
employees. In the event that the risks disclosed in ATP’s public
filings and those discussed above cause results to differ
materially from those expressed in ATP’s forward-looking
statements, ATP’s business, financial condition, results of
operations or liquidity, and the interests of creditors, equity
holders and other constituents, could be materially adversely
affected. ATP undertakes no obligation (and expressly disclaims any
such obligation) to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. For additional information concerning factors that could
cause actual results to materially differ from those projected
herein, please refer to ATP’s periodic reports on Form 10-K and
Form 10-Q.
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