Petroleum Equity completes US$133 million investment in ATP Oil & Gas UK

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11 February 2014

Petroleum Equity, a newly-established private equity firm focused on the upstream oil and gas market, has announced the completion of its acquisition, via its Alpha Petroleum investment vehicle, of ATP Oil & Gas (UK) Limited (“ATP UK”) from US parent company ATP Oil & Gas Corporation (“ATP Corporation”). The total transaction value stands at approximately US$133 million.

ATP Corporation is a Houston, Texas-based company that developed and produced oil and natural gas in the Gulf of Mexico and the North Sea. In late 2012, it filed for protection under Chapter 11 of the US Bankruptcy Code and commenced a sale process for its subsidiary, ATP UK. Petroleum Equity acted on an opportunity to acquire ATP UK when the process stalled in 2013.

Daniel Reis, one of four Founding Partners at Petroleum Equity, comments: “One of the most important elements of this investment is that following a Company Voluntary Arrangement process, we have secured the write-off of more than US$1.2 billion of debts, leaving ATP UK free of all debts and liabilities to rebuild its business.

“The company now has a clean balance sheet and is properly funded with equity to go forward with its business plan. We are delighted to have completed this highly complex transaction and are very confident that this will prove to be an excellent investment on behalf of our investors.”

ATP UK’s assets include four producing gas fields and substantial 2P (proven plus probable) development reserves. The company retains the operatorship on all its licenses and the Department for Energy and Climate Change (“DECC”) has recently indicated its support to ATP UK by agreeing to substantial extensions to the Cheviot, Blythe, and Skipper licenses. The remaining fields are already in production and do not require licence extensions.

The Cheviot field is a particularly significant asset in the context of the UK Continental Shelf, with oil-in-place of 200 million barrels and certified 2P reserves in excess of 50 million barrels of oil equivalent (“mmboe”).

Bernhard Schmidt, also a Founding Partner at Petroleum Equity and former Head of E&P at Wintershall, comments: “As part of the restructuring, the expensive and overdue Octabuoy development concept for the Cheviot field has been shelved. We are now working with management to review the options for developing the field as soon as possible in a manner that best suits its North Sea location; most likely with an FPSO.

“ATP UK currently holds 100 per cent of the Cheviot license. Part of our investment plan is that ATP UK will seek to farm-down a portion of its interest in the field in due course.”

About ATP Oil & Gas UK

ATP Oil & Gas UK is a UK independent exploration and production company. The company was established in 2000 to pursue the development and production of oil and gas fields in the UK North Sea as the subsidiary of the US-based ATP Oil & Gas Corporation. ATP UK’s principal assets comprise four producing gas fields (Kilmar, Garrow, Wenlock and Helvellyn) and three development fields (Cheviot, Skipper and Blythe).

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