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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (35858)11/7/2009 4:51:43 AM
From: Paul Senior  Read Replies (1) of 78764
 
ATPG: "ATPG went from 2.6B$ NPV(2007 10k) to 1B$ NPV (2008 10k) probably due to crude prices) and they are based on management estimates and not numbers from a 3rd party audit firm."

There's a lot going on here. First and importantly, the oil/gas reserve numbers are made by 3rd party audit firms hired by ATPG. Once per year numbers as you say. I presume it's management who takes those reserve numbers and discounts them with a calculation to get NPV numbers, which are the proved figures and the proved&probable figures. And in turn from those figures, management calculates nav (where assets/liabilities - the balance sheet - are audited by the corporate auditing form).

I'm saying yes, I believe management makes some calculations, but the estimates - the important reserve estimates that start the process -- are made by the independent (presumed independent) reserve engineering firms.

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I'm not exactly sure what's being measured here:
"That is why I am skeptical of the numbers that ATPG is posting because it differs tremendously from the 12/31/08 number in the 10k."

I pull up a page from their latest presentation, and from the numbers for pv10 proved (and also pv10 proved&probable) from Dec '08 and June '09, they don't seem too different given changes in strip prices. I have to assume the pv10 numbers are based on the reserve numbers, and so I don't see much change from 12/08 through 6/09 for reserves. Again though, I don't dispute that these numbers cannot or will not change dramatically. I just don't see "reserves" as fluctuating and a possible clue of management overpromising something. (It may be so; I just don't get it from these numbers.)

phx.corporate-ir.net
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