ATP Reports Results and Operations

Business Wire, Nov 7, 2007

HOUSTON -- ATP Oil & Gas Corporation (NASDAQ:ATPG) today announced third quarter 2007 results and an operational update:

* Achieved quarterly production revenue of $116.7 million and achieved net income of $2.3 million or $0.08 per basic and diluted share;

* Achieved 250 MMcfe/d November to-date company-wide production rate including five wells producing near the facility limits as a result of the upgrade to the ATP Innovator and expansion of the Gomez Hub;

* Completed the four-well development at Ship Shoal 351 on the Gulf of Mexico shelf which is currently producing at the facilities limit;

* Encountered the targeted reservoir and completed the first lateral of the Tors K3 well;

* Hedged an additional 39 Bcfe for the fourth quarter 2007 and beyond at an average price of $11.74 per Mcfe since the second quarter earnings release.

Results of Operations

ATP achieved total production of 43.8 Bcfe during the nine months ended September 30, 2007, a 24% increase over the first nine months of 2006. Oil, primarily from ATP's Gulf of Mexico deepwater program, continues to increase in importance to ATP, comprising 40% of total production volumes and 45% of total nine months oil and gas revenues of $393.6 million. For the first six days of November production has averaged approximately 250 MMcfe/d. In October, ATP produced an average of approximately 170 MMcfe/d and for the first nine months of 2007, ATP averaged 160 MMcfe/d. With the expansion at Gomez complete and the North Sea program on target for completion by year-end, ATP reaffirms its commitment to achieve 300 MMcfe/d before the end of 2007.

Production was 13.3 Bcfe (145 MMcfe per day) during the third quarter of 2007, a 17% decrease from the comparative period in 2006, primarily as a result of the subsea expansion work at Gomez. Revenues from production decreased 12% to $116.7 million during this same period. Price realizations reflect an overall 6% increase in our average sales price per Mcfe from $8.30 for the third quarter 2006 to $8.77 for the third quarter of 2007.

Lease operating expenses for the third quarter of 2007 decreased to $21.2 million ($1.59 per Mcfe) from $22.8 million ($1.43 per Mcfe) in the third quarter of 2006. Lease operating expenses declined in the Netherlands and UK during the three months ended September 30, 2007 compared to the same period of the prior year primarily due to lower production rates. In the Gulf of Mexico costs increased as a result of higher insurance premiums and an increase in costs due to our newly acquired Canyon Express Pipeline interests. During the three months ended September 30, 2007 and 2006, Gulf of Mexico costs included $2.2 million ($0.21 per Mcfe) and $0.4 million ($0.03 per Mcfe) of nonrecurring workover expenses.

General and administrative expense decreased 2% to $7.6 million for the third quarter of 2007 compared to $7.8 million for the same period of 2006. Noncash stock-based compensation expense decreased to $1.8 million for the three months ended September 30, 2007 compared to $3.2 million for the three months ended September 30, 2006. This decrease was offset by an increase in other salary expense.

ATP recorded a net tax benefit of $3.4 million during the quarter ended September 30, 2007, related to our foreign jurisdictions, based on the expected 2007 effective tax rate of each jurisdiction. The rates were determined based on the projected results of operations for the year, the valuation allowance released associated with the U.S. income before taxes for the quarter and permanent differences affecting the overall tax rate in each foreign jurisdiction. In the comparable quarter of 2006 we recorded a tax provision of $5.0 million related to our foreign jurisdictions. In the U.S., the tax provision recorded on our book income for both periods was offset by a release of valuation allowance.

For the third quarter 2007, ATP reported net income available to common shareholders of $2.3 million, or $0.08 per basic and diluted share, as compared with a net income available to common shareholders of $1.2 million, or $0.04 per basic and diluted share for the third quarter 2006.

Third quarter net income available to common shareholders was impacted by an impairment expense of $4.0 million and a loss on abandonment of $0.3 million. Research analysts typically exclude these nonrecurring charges from their published estimates. Accordingly, after adjusting for nonrecurring charges, ATP had net income available to common shareholders of $6.6 million or $0.22 per basic and diluted share. A reconciliation of non-GAAP net income for the quarter can be found near the end of this press release.

The company's selected operating statistics and financial information included within this press release contains additional information on activities for the third quarter and the comparable 2006 period.

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Operations and Development

Gulf of Mexico

Mississippi Canyon ("MC") 711 (Gomez Hub - 100% Working Interest) - The processing capacity upgrade project and the final subsea work for the MC 755 (Anduin) #2 ST-1 and MC 711 #8 wells has been completed. The Gomez Hub is now comprised of five flowing wells, compared to two wells for most of the 2006 period. As of October 31, 2007 the five wells were flowing at a combined gross rate of 20,000 bopd, with an additional 60 MMcf/d of associated gas. ATP holds an 85.5% net revenue interest in the Gomez Hub.