ATPG: WTF is going on?

[Petrovale]

Anyone have any ideas about today's 50% jump on 12.5M volume, followed by a 25% dump towards close on 6M shares ???

Strange, never seen this one before...

Best,
Petro

[admin]

Certainly wild west, Petro. I have to admit I never quite warmed to that company because its debt load gives them little margin for error, but the potential is there

[ValueSleuth]

Caught the falling knife yesterday at $3.75 on the common and $23.00 on small additions to positions. These are up by about 35% from purchase prices. Unexpected timing, but I'll take it.

Only question needed to be answered yesterday was, "does ATP survive?"

I guess I voted "yes," but must expect the unexpected, like today's surge from grossly oversold regions.

VS

[Petrovale]

Coincidentally caught a burbot today at $5, and sold it next day. Some say there is news coming from Israel. I hope that's true. Good and bad experience with this company.

Have a good weekend,
Petro

[ValueSleuth]

Petro,

FYI, Sam Tibbs and I have been analyzing and investing in ATPG for several years through thick and thin. Outstanding potential if they can survive the effects of the Gulf suspensions and some under-performance on the wells connected to Titan.

VS

[ValueSleuth]

Porter Stansbury and his minions are out trashing the stock after Porter published an analysis on Friday in his "The S&A Digest" email.

Unfortunately, some of Porter's key points do not reflect reality, so the view is grossly distorted. He seems to have forgotten the Macondo well blow up. In addition, he effectively claims that the possible resources from Shimshon are already reserves and apparently doesn't realize that the 1st exploratory well hasn't even been evaluated. Add to that the various wells pending hookup before the end of the year that will effectively double production. Well, you get the picture.

This makes his case of using ATP as proving his bigger point on leveraged companies less than compelling.

Nice try, but no sale, Porter.

The only point on which he's really correct is nothing we don't already know -- ATP is highly leveraged.

His comments about buying the debt and selling the stock is quite a no brainer, so there's nothing new there.

However, for the venturesome, those who think ATP will avoid bankruptcy, will profit handsomely from owning equity securities -- i.e. the common stock and the perpetual cumulative convertible preferred stock.

If he Shimsohn well comes through and actually confirms the resources, ATP's 1 TCF share will DOUBLE reserves. There'll be no bankruptcy in that case.

VS

[admin]

Thanks for that update, Value. Risk/reward asserting itself once again, I guess.

[ValueSleuth]

With the stock surging this morning, the 8% Perpetual Cumulative Convertible Preferred (ATPGP) is a compelling buy, IF (and that's a BIG IF) you believe the company will avoid bankruptcy -- which I do.

The valuation between the Common Stock and the Preferred issue is all relative and jumps around a lot.

Trying to purchase the Convertible Preferred can be very tricky. You'll be ripped off if you don't use limit orders and play the game.

As I type, the premium to conversion is NEGATIVE and over the next three years of dividends (IF they are paid) will result in recovering more than the price of buying the Convertible Preferreds today (last trade $14.10 vs $8 annual dividend). I believe this situation is due to the fact that the Convertible Preferred went ex yesterday and a lot of the issue was dumped at that point, driving the price way down. With all the negativity, and perhaps some end of quarter dumping, margin calls etc. in the common, it may well present a "buying opportunity" of epic proportions. (I was buying yesterday.)

For the HIGHLY VENTUROUS, this has a greater potential for price appreciation than IOC, believe it or not.

VS

[Petrovale]

09:35 AM EDT, 07/02/2012 (MidnightTrader) -- ATP Oil & Gas Corporation (ATPG) today announced its success at the Shimshon well in the Levant Basin of offshore Israel. The company said the Shimshon well encountered more than 62 feet (19 meters) of natural gas pay in the Bet Guvrin sands.
ATPG is up 11.3% to $3.74 on a 52-week range of $2.78 - $16.23.
Price: 3.74, Change: +0.38, Percent Change: +11.31

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[ArtM72]

Can somebody tell me how to interpret "62 feet (19 meters) of natural gas pay"? If a "1," were put on the front and a zero on the back I'd say, "Hmm. That's interesting". But 62 feet of pay a success? All things must really be relative.