ATP Oil & Gas Corp. more than doubled its borrowing capacity with a new $110 million asset-based credit facility, said Albert Reese, Jr., senior v.p. and cfo. He explained that the offshore oil and gas development and production company previously had a $50 million, asset-based revolver through Union Bank of California that was set to expire in April 2004. But ATP selected Wells Fargo Foothill and Ableco Finance to provide the new deal. "They had a good borrowing base for the assets," he said of the decision to select the lenders. Reese added that the Houston-based company reviewed several proposals from lenders that had approached ATP before making the final choice.
The interest rate on the new revolver is 8.9%, said Reese, adding that the credit matures in August 2007 and is secured by substantially all of ATP's oil and gas properties in the Gulf of Mexico. ATP has leasehold and other interests in 50 offshore blocks, 29 platforms and 70 wells in the federal waters of the Gulf of Mexico. Funds from the new credit were used to retire the entire amount of ATP's outstanding subordinated notes, which would have matured in 2005 and carried approximately a 161/2% interest rate. As of last June, ATP had been subject to interest costs totaling about 11.3% from both the credit and note deals, which accrued off of $81.3 million in outstanding debt. The new credit eliminated the higher interest rate note, bringing the debt down to the new 8.9% rate level.