ATP: Buybacks, Sales & The Future (ATPG, APC)

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ATP Oil & Gas (NASDAQ:ATPG) is a small-cap E&P company that is desperately trying to improveits share price. It is trading today about 85% lower than its 52-week high.That stinks and the company knows it.  This morning, the company announced a plan to buy back 3.5 million shares, or about 10% of shares outstanding, and it is taking on more shareholder-friendly initiatives.

About one-third of ATP’s net proved reserves are located in the NorthSea and the other two-thirds in the Gulf of Mexico. The company soldsome of its North Sea properties to a subsidiary of France’s EDF for$430 million in a move to cut the company’s debt. It has also reducedits cap-ex budget by $200 million for 2008 and 2009.

All this might help, and then again it might not. When chartedagainst a big-cap company like Anadarko (NYSE:APC), ATP’s overallweakness shows up dramatically. It’s fall is 30% greater thanAnadarko’s, mostly because it just doesn’t have the size to overcomefalling crude prices. Interestingly enough, ATP could find itself to bea takeover target before too long.

ATP Oil & Gas shares are down 7% at $8.68 today on rather thin trading volume.

Paul Ausick
October 28, 2008