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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: buckbldr who wrote (125473)11/6/2009 8:03:20 AM
From: Ed Ajootian   of 206166
 
buck, ATP -- They primarily relate to things that will be happening at ATP in both the current quarter and the next. Rather than recreate the wheel I will just paste up a great recap of these things from "swizzlexx" on the ATP Yahoo board (emphasis added):

Re: Long Term Long. But Realistic 5-Nov-09 11:02 am I just typed a reply to this with my numbers and it didn't post. Will try again.

They are going to be fine on this covenant. I'm pissed that there is no gain on the Gomez pipeline sale as I was led to believe by management that there would be. But they are going to be fine.

Here is how I calculate it.

Q1 $67mil
Q2 $72mil
Q3 $42mil (from today's numbers)
Q4 $42mil (assume Q4 isn't higher, which it will be)

total trailing $222mil

Current net debt $1.312bil less $317mil cash = $995mil

With $995mil debt they need EBITAX to be $995mil / 4 = $248mil. Or alternatively with EBITAX of $222mil they need net debt to be $222mil x 4 = $888mil

So they either net EBITAX to be $248mil - $222mil = $26mil higher in Q4. Or they need net debt to be down $107mil. Or some combination of the two.

So why am I confident that they will get there ?

First the EBITAX in Q4 will be higher, likely considerably higher

1) The compressor issue at Gomez is fixed
2) The sleeve shift at Gomez should be completed (which by itself is going to raise production 30%)
3) They are putting a well on at Canyon Express in Q4 which will by itself raise production by 20%
4) The Wenlock curtailment will be done and back on production
5) Oil prices are now $80 instead of $70
6) NG prices are now closer to $5 than $4

Second, the net debt figure is likely to increase as the Titan is monetized for $300mil.

Q1 2010 will be even much better as likely 2 wells from Telemark will be up and one well is a 30% increase from current production. By the time we get to mid Q1 2010 with the Gomez sleeve done, a well at Canyon, at least one well at Telemark we will pretty much have doubled Q3 2009 production levels.
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