ATP Oil: Starting a new chapter
One of the key attributes of value investing is finding good management. A good management team knows how to execute and they tend to execute even in the worst of business climates.
Today ATP Oil & Gas announced that they have executed successfully on the Telemark Hub. The company has started production on its first well from the Telemark Hub.
ATP Oil & Gas Corporation (NASDAQ: ATPG) today announced first oil production from its deepwater Atwater Valley (“AT 63”) #4 well at the Telemark Hub in approximately 4000 feet of water. ATP initiated production on Sunday after completing a sequence of inspections, certifications, permits and approvals of facilities, structures, safety systems and field development plan systems from required government regulatory bodies including the Minerals Management Service (MMS), Environmental Protection Agency (EPA) and U.S. Coast Guard as well as classification of the unit by the American Bureau of Shipping (FOI Spar). ATP owns a 100% working interest and is the operator of the Telemark Hub
“We have delivered on our goals and objectives by bringing the deepwater hub to first production utilizing our own floating drilling and production infrastructure, the ATP Titan,” said T. Paul Bulmahn, ATP’s Chairman and CEO. “Although ATP slowed development and capital expenditures during 2008-2009, this billion dollar deepwater project is now on production within 46 months from acquisition of the first Telemark Hub property. That is only 3.8 years from acquisition by ATP to first production in 4,000 feet of water. Offshore data shows that the average for deepwater developments utilizing tension leg platforms is 94.3 months or just under eight years and spar installations averaged 55.6 months or just under five years from discovery to first production. Through difficult financial times, ATP constructed, installed and is producing from a major piece of deepwater infrastructure within a very short development period.”
Management took on all the nay-sayers and executed on its plan in the last 4 yrs. The company had, and still has, piled on substantial debt. The market believed the company would not be able to get the Telemark project completed and the debt load would kill the company. Management carefully guided the company through the tough 2008-2009 cycle. The company now has an extremely strong future ahead. The Telemark project will completely change the company’s future prospects. Also, the company has a few more major project in the pipeline. With a management team that can delivery, shareholders can expect great things from the company’s strong pipeline.