HOUSTON--(BUSINESS WIRE)--ATP Oil & Gas Corporation (NASDAQ:ATPG) today announced the formation of ATP Titan LLC to monetize its investment in the ATP Titan. The ATP Titan is a new U.S.-built floating production facility that began production operations at ATP’s deepwater Telemark Hub in March 2010. This is the second monetization of ATP’s floating production infrastructure; ATP monetized the ATP Innovator located at ATP’s deepwater Gomez Hub in March 2009.
ATP Oil & Gas Corporation (“ATP” or “the Corporation”) contributed its ownership in the ATP Titan platform and related assets to ATP Titan LLC (the “LLC”), a wholly owned and unrestricted subsidiary. Simultaneously with the transfer, the Corporation entered into an exclusive platform use agreement with LLC and LLC secured a $350 million term loan facility with CLG Energy Finance, LLC (“CLG Energy”), an affiliate of Beal Bank Nevada. The facility was funded $150 million at closing with an additional draw request of $100 million when ATP begins production from the second well at the Telemark Hub, the Mississippi Canyon 941 #3 well. An additional $100 million in equal draws may be requested as ATP brings to production the third and fourth wells at the Telemark Hub. The terms of the loan between LLC and CLG Energy call for principal reductions of 8% in the first year, 9% during the second year and then 10% thereafter until maturity in September 2017. All payments are made quarterly and bear an annual interest rate of LIBOR (floor of 0.75%) + 8%. ATP does not guarantee the debt of LLC. The net cash proceeds from the initial term loan were distributed from LLC to the Corporation where the funds will be used for continued development of its properties in the Gulf of Mexico, the North Sea and for other corporate purposes. ATP holds a 100% ownership in LLC, remains operator and continues to hold a 100% working interest in the Telemark Hub and its oil and gas reserves.
T. Paul Bulmahn, ATP’s Chairman and CEO stated, “The formation of ATP Titan LLC demonstrates our continued commitment to monetizing our reusable fleet of floating production platforms. The ATP Titan has a designed capacity of 25 MBbls/d of oil and 50 MMscf/d of gas, ample space for additional growth, and a 40-year life. The ATP Titan will be reused and redeployed multiple times during its life span in water depths of 1,500 to 9,500 feet. We are extremely pleased to have CLG Energy and Beal Bank Nevada as our lender in the ATP Titan LLC venture.”
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc (NASDAQ:RODM) served as an advisor to ATP and ATP Titan LLC.
About ATP Oil & Gas Corporation
ATP Oil & Gas is an international offshore oil and gas development and production company with operations in the Gulf of Mexico and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market. For more information about ATP Oil & Gas Corporation, visit www.atpog.com.
About CLG Energy Finance, LLC
CLG Energy Finance, LLC is based in Plano, Texas and is a division of CLG Hedge Fund, LLC, an affiliate of Beal Bank Nevada, a multi-billion dollar private financial institution. CLG Energy seeks to facilitate direct lending in energy and energy-related companies, with particular emphasis on debt financing in the upstream oil and gas sector. CLG Energy considers both traditional senior-secured structures as well as structured secured loans at the project or corporate level in amounts ranging from $20M to $500M.
Certain statements included in this news release are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. ATP cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those ATP expects include changes in natural gas and oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as our ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business. During December 2008, the SEC issued the final rule, “Modernization of Oil and Gas Reporting” and we have adopted it as of December 31, 2009. Those new regulations allow, among other things, disclosure of probable and possible reserve quantities in reports filed with the SEC. While we do not file such reserves, we occasionally will include them in presentations and discuss such reserves publicly. We and our independent third party reservoir engineers use the term “probable” to describe volumes of reserves potentially recoverable through additional drilling or recovery techniques that, by their nature, are more speculative than estimates of proved reserves. All estimates of reserves in this news release have been prepared by our independent third party engineers. More information about the risks and uncertainties relating to ATP's forward-looking statements is found in our SEC filings.