Saturday, 11 August 2012

ATP Oil and Gas - Imminent Bankruptcy

It appears that ATP Oil and Gas will be forced to restructure via a bankruptcy filing in the coming weeks, the Wall Street Journal is reporting.  Shares are trading well into penny-stock territory, at just $0.36.  Negotiations are said to be ongoing with senior creditors, and the company delayed its second quarter filing until matters become more clear.  The company will obtain a $600 million loan to remain liquid during legal proceedings.

At this point it’s unclear what, if anything, might be left over for the disheartened – and now impoverished – owners of the common stock.  The stock once traded at well above $50, and it’s a harsh reminder that “debt” can be the cruelest four-letter word in the English language.

My original write-up on ATP Oil and Gas is here.
Disclosure: At the time this article was published, the author was long ATP Oil and Gas options.

Disclaimer: The host of this blog shall not be held responsible or liable for, and indeed expressly disclaims any responsibility or liability for any losses, financial or otherwise, or damages of any nature whatsoever, that may result from or relate to the use of this blog. This disclaimer applies to all material that is posted or published anywhere on this blog.


  1. Very educating thread- been really interesting reading the whole thing now, from high expectations to the painful fall.

    Assuming the court will aprove the filing, how do you believe ATP will go on operating with all of it's suppliers trying to cache what is owed to them?

  2. ATP secured a $600 million-plus "debtor-in-possesion" loan, which will allow the company to continue operating even as it moves through the bankruptcy process.

    While there is a lot of variability between different bankruptcy cases, secured creditors will be first in line to be repaid, unsecured next, and common stock holders at or near the bottom of the pecking order, hence the current stock price.

    Visit this link for a good overview of US bankruptcy filings: