ATP Oil & Gas (ATPG): An E&P Co. Without Any "E" Message Board

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Gold/Mining/Energy : ATP Oil & Gas (ATPG): An E&P Co. Without Any "E"

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To: Ed Ajootian who wrote (1)	12/8/2002 11:52:23 AM
From: Ed Ajootian	Read Replies (1) of 35

Isn't that UK farmout # amazing? They spend $4 M for UK acquisition costs in '01 (for 3 properties, including Helvellyn), then spend (thru 9/30) $5M for development, and they farmout a half interest in one of their properties for $17 M! They now have a "negative" investment in their UK operations. How do you calculate an ROI when the "I" is a negative #??!! The CIBC report on ATP dated 11/12 calls for '03 cash flow per share of $3.51, but that is using benchmark prices of $3.50 gas and $22 oil. IMO its now pretty safe to say that gas will average well in excess of that figure. Also, he assumed that Helvellyn would come on stream at 7/1. Should any stock, even the doggiest of dogs, sell for nearly 1 x cash flow? Maybe if it was way overindebted, and was in danger of going under. That's obviously not the case for ATP (they are projected to have an interest coverage ratio of 9:1 next year). I believe the stock has nearly completed its consolidation here around the $4 mark. I believe the stock could take one more dip under $4 but it will not stay there for long. At this point anyone wanting to take a meaningful position in the stock is gonna have to just bid it up.

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