North America Equity Research

15 July 2010

Underweight
ATP Oil & Gas ATPG, ATPG US
Price: $9.11
Correcting Error in Model
Price Target: $10.00

On Tuesday, July 13, we published a note on ATPG titled, “Trading at a Exploration & Production
Premium; Financing Needs Likely Greater Than Market Thinks; Joseph Allman, CFA
AC
Downgrading to Underweight.” In that note we made an error of (1-212) 622-4864
approximately $450MM in our calculation of ATPG’s financing needs. joseph.d.allman@jpmchase.com
J.P. Morgan Securities Inc.
• Double counted re-payments for overrides and net profits interests. Anne Cameron
We model ATPG’s overrides (ORRIs) and net profits interests (NPIs) (1-212) 622-6617
and attempt to calculate the cash flow impact of these financial anne.p.cameron@jpmorgan.com
transactions. ATPG re-pays a "principal" portion and an "interest" J.P. Morgan Securities Inc.
portion for these financings. We double counted the principal portion of Xin Liu, CFA
repayments for years 2010 and 2011. The magnitude of this error is (1-212) 622-4915
around $450MM. xin.liu@jpmorgan.com

J.P. Morgan Securities Inc.

• Adjusted model for error. The attached model adjusts for the above
Ronny M Eisemann
mentioned error. In our July 13 note, we stated that it appeared that (1-212) 622-6756
ATPG would need $500MM of external capital. This model corrects ronny.m.eisemann@jpmorgan.com
that error and reduces that need to $50MM. J.P. Morgan Securities Inc.

Vinay Kumar
(91-22) 6157 3324
vinay.x.kumar@jpmorgan.com

J.P. Morgan India Private Limited

Price Performance
25

20

$ 15

10

5
Jul-09 Oct-09 Jan-10 Apr-10 Jul-10

YTD 1m 3m 12m
Abs -53.1% -7.7% -59.8% 41.0%

ATP Oil & Gas (ATPG;ATPG US)

2008A 2009A 2010E 2010E 2011E 2011E Company Data
(Old) (New) (Old) (New) Price ($) 9.11
CF/Sh ($) Date Of Price 14 Jul 10
Q1 (Mar) 4.24 1.01 (0.52)A (0.52)A (1.85) 0.07 52-week Range ($) 23.97 - 6.58
Q2 (Jun) 2.77 0.58 (0.90)A (0.32)A 0.09 1.24 Mkt Cap ($ mn) 465.83
Q3 (Sep) 1.98 0.05 (1.30)A (0.36)A 0.46 2.15 Fiscal Year End Dec
Q4 (Dec) 1.66 (0.72) (1.70)A (0.30)A 1.08 2.73 Shares O/S (mn) 51
FY 10.72 0.54 (4.41)A (1.48)A (0.21) 6.20 Price Target ($) 10.00
Source: Company data, Bloomberg, J.P. Morgan estimates. Price Target End Date 31 Dec 10

See page 7 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.
Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

Estimates
Table 1: Quarterly Estimates
10Q2 10Q3 10Q4 10CY
EPS
JPM ($1.06) ($1.31) ($1.54) ($4.30)
Consensus Median ($0.24) ($0.04) $0.14 ($0.16)

CFPS
JPM ($0.32) ($0.36) ($0.30) ($1.48)
Consensus Median $0.52 $0.79 $1.46 $2.60
Source: Bloomberg, J.P. Morgan estimates Note: We deduct ATP’s dollar-denominated override payments, net profits interest
payments, and limited partner distributions from our discretionary cash flow calculation and recurring earnings calculations

Valuation and Rating Analysis

Our price target approximates our estimate of current NAV, which we calculate
using a discounted cash flow (DCF) model. Our NAV model starts with an estimate
of the company’s proved reserves and then estimates the value of unbooked reserves
(probable, possible and other potential). Therefore, our NAV model includes credit
for 4P (3P─proved, probable, and possible─plus other potential that is not in the 3P
categories). It also adjusts for hedges, other assets, and other balance sheet items.
The near-term uncertainty in the equity, debt and commodities markets increases the
risk of cash flows for E&Ps, in our view.
For ATPG, we are using the following assumption for WACC:
• WACC: 11%

Table 2: JPM Price Deck

2010e 2011e 2012e Beyond
WTI Oil ($/bbl) $79.99 $86.67 $90.00 $90.00
Henry Hub Gas($/Mcf) $4.58 $5.06 $5.63 $6.17
Source: J.P. Morgan.Valuation

Net Asset Value. Based on the price deck in Appendix I, we calculate an NAV of
$9.88/share. In our analysis, we value the proved reserves alone (minus balance
sheet, cash taxes, and G&A) at $6.44/share. Most of the value of the stock is the
significant potential that is un-booked. We risk that potential and value it at
$3.44/share after deducting corporate cash charges associated with that production,
including cash income taxes and G&A. The main components of ATP's (un-booked)
potential include:

• Telemark. 63% or $3.22 /share of the $5.10/share gross potential is for the un-
booked potential for the potential from development and exploration within this
large field.
• Gomez. 55% or $2.79/share of the $5.10/share gross potential is for the un-
booked potential from this play.
Thesis. ATP appears to generate significant free cash flow in 2012. Spill-related
improvements in the Gulf of Mexico could help all GOM producers, including
ATPG. Thus, the stock could see some positive catalysts. We base our Underweight
on ATPG’s valuation relative to the group. At this writing, the stock is trading at
91% of JPM NAV versus the group that is trading closer to 70%.

2
Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

Risks to Our Rating

Levered to news about GOM. When BP successfully kills the Macondo well, we
think all GOM-levered names could outperform. ATP also could outperform if the
Department of Interior relaxes the terms of the Moratorium and allows development
drilling.

Financing. If ATP successfully sells or monetizes the Titan (and raises more capital
than the market is expecting), the stock could outperform. If oil prices recover and
ATP raises additional debt, the stock could outperform.

Telemark hub production. If production rates from the field are higher than the
rates the company has posted in recent presentations, the stock could outperform.

Leverage to oil. Given the company’s short reserve life, high financial leverage and
high upfront capital costs, ATP has significant leverage to crude oil. Liquids
comprise ~57% of ATP’s total YE09 reserves versus the group at ~ 20% liquids. If
the strip appreciates or if oil prices are above our forecast, the stock could
outperform.

Asset concentration. Eighty-eight percent of the company’s 2009 YE reserves came

from four fields: Gomez, Cheviot, Canyon Express, and Telemark. Should the fields
produce better than expected, the stock could outperform.

3
Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

Appendix I: ATPG NAV

Assumptions
Commodity Price
Commodity Price J.P. Morgan NYMEX Futures Custom Deck
Options: Gas Oil Gas Oil Gas Oil J.P. Morgan Price Deck

2006-A $7.23 $66.10 as of 7/9/2010 NYMEX Futures

2007-A $6.86 $72.30
Other Price Deck
2008-A $9.05 $99.68
Discounting
2009-A $3.99 $62.22 $4.06 $58.64
2010-E $4.58 $67.50 $4.69 $76.67 $4.58 $67.50 Period Ending 1Q10
2011-E $5.06 $86.67 $5.31 $79.57 $5.00 $70.00
2012-E $5.63 $90.00 $5.69 $81.93 $5.00 $70.00 Disc. Rate 1 11.0%
Beyond $6.17 $90.00 $5.91 $83.23 $5.00 $70.00
Disc. Rate 2 11.0%

Shares Outstanding:
Escalation Assumptions
Common Shares Outstanding 51.1 as of 1Q10 Commodity Price
0.0%
Potential Dilution 0.0 G&A Costs 0.0%
Total Potential Shares 51.1 LOE Costs 0.0%

Service & Drilling Costs 0.0%

Methodology: Use the company's PV-10 data from the 10-K to back into a production profile. Use that production profile with J.P. Morgan's commodity price and service cost
forecasts to generate a cash flow profile for proved reserves. Subtract out cash taxes, G&A, and balance sheet items. Develop risked production profiles and cost schedules for
unbooked reserves. Discount cash flows at the appropriate discount rate and take the summation.

Valuation Breakdown
J.P. Morgan Prices NYMEX Strip Prices
UnRsk Rsrv Reserves Rsk Rsrv Discounted Value Pre-Tax Discounted Value
PROVED RESERVES (at YE09) (Bcfe) Risking (Bcfe) Net CF Per Share PV-10 Net CF Per Share
U.S. Proved Reserves 548 0.0% 548 $1,843 $36.05 $3.37 $1,762 $34.46
North Sea Proved Reserves 263 0.0% 263 $576 $11.27 $2.19 $519 $10.16
Telemark $50MM NPI 0 0.0% 0 ($50) ($0.98) NA ($50) ($0.98)
YTD adjustment (add PUD capex, subtract proved cash flow) $170 $3.33 $170 $3.33
Total Value of Proved Reserves 811 811 $2,540 $49.67 $3.13 $2,402 $46.97

BALANCE SHEET (As of 1Q10): Value Per Share Value Per Share
Long-Term Debt ($1,245) ($24.35) ($1,245) ($24.35)
Other Liabilities (excludes taxes, ARO, & derivative liabilities) ($501) (9.81) ($501) (9.81)
Net Working Capital (excludes taxes, ARO, and derivative liabilities) ($80) (1.56) ($80) (1.56)
Investments & Other Assets (excludes goodwill) $38 0.74 $38 0.74
ARO, Taxes, and Hedges are included
Infrastructure 3rd Party Use $12 0.24 $12 0.24
elsewhere in the model and are based
Convertible Perpetual Preferred Stock ($140) (2.74) ($140) (2.74)
on user input rather than static book
Risked PV of Reuse of Infrastructure values. $100 1.96 $100 1.96
Net Balance Sheet ($1,816) ($35.52) ($1,816) ($35.52)

FUTURE COSTS & OTHER Value Per Share Value Per Share
Discounted Future Cash G&A (Proved Reserves) ($257) (5.02) ($257) (5.02)
Discounted Cash Taxes (Proved Reserves) 80% Assumed Tax Shield ($144) (2.81) ($128) (2.49)
Gathering and Marketing $0 0.00 $0 0.00
Present Value Of Hedges $6 0.12 $8 0.17
Other Costs / Revenue ($394) ($7.70) ($376) ($7.35)

Value Of Proved Reserves (After Taxes, Balance Sheet, & Hedges) $329 $6.44 $209 $4.09

RISKED POTENTIAL UnRsk Rsrv Reserves Rsk Rsrv Disc Future Value Pre-Tax Disc Future Value
(Everything Unbooked at YE08) (Bcfe) Risking (Bcfe) Net CF Per Share PV-10 Net CF Per Share
Telemark 143 50.0% 72 165 3.22 2.30 141 2.76
Gomez 57 25.0% 43 143 2.79 3.35 125 2.44
Green Canyon 37 37 25.0% 28 39 0.76 1.40 28 0.55
Cheviot 101 25.0% 76 (113) (2.21) (1.49) (147) (2.87)
Entrada 142 30.0% 100 28 0.54 0.28 7 0.14
Gross Potential NAV 317 $261 $5.10 0.82 $154 $3.02

YTD adjustment (add exploration capex, subtract cash flow from potential reserves) $13 0.26 13 0.26
Discounted Future Cash G&A (Potential Reserves) (79) (1.55) (79) (1.55)
Discounted Cash Taxes (Potential Reserves) (19) (0.37) (11.5) (0.23)
Other Costs ($85) ($1.66) ($78) ($1.52)

Total Potential NAV $176 $3.44 $77 $1.50

Total Current NAV / Share 1,128 $505 $9.88 $286 $5.60

Source: J.P. Morgan & Company Reports

4
Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

Appendix II: ATPG Model

J.P. Morgan Price Deck 2009 Quarterly Estimates 2010 Quarterly Estimates Full Year Results/Estimates
COMMODITY PRICE DECK: Q1-A Q2-A Q3-A Q4-A Q1-A Q2-E Q3-E Q4-E 2008-A 2009-A 2010-E 2011-E
Natural Gas (Henry Hub Bid Week) $4.91 $3.49 $3.40 $4.16 $5.30 $4.09 $4.58 $4.36 $9.05 $3.99 $4.58 $5.06
Crude Oil (WTI Cushing Spot) $43.18 $59.69 $69.98 $76.03 $78.84 $77.88 $80.00 $83.33 $99.68 $62.22 $80.03 $86.67

Price Realizations (after hedging)

Natural Gas ($/Mcf) $4.74 $4.24 $3.92 $5.71 $5.44 $5.29 $5.27 $5.10 $8.02 $4.66 $5.25 $5.16
Crude Oil ($/bbl) $38.97 $58.76 $64.28 $65.30 $71.65 $72.48 $74.63 $77.11 $71.85 $56.13 $74.46 $81.62
NGLs ($/bbl) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

PRODUCTION VOLUMES:
Natural Gas (Bcf) 4.5 4.0 3.7 3.0 3.8 4.8 5.2 6.1 31.9 15.1 19.8 38.6
Crude Oil (MMbbl) 0.9 0.9 0.8 0.8 0.9 1.4 1.6 1.8 4.3 3.4 5.6 11.9
NGLs (MMbbl) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Production (Bcfe) 10.0 9.3 8.4 7.5 9.0 12.9 14.6 17.2 57.5 35.2 53.7 110.2
% Natural Gas 45% 42% 44% 40% 42% 37% 36% 35% 55% 43% 37% 35%

INCOME STATEMENT: ($MM)

E&P Revenue $68 $81 $75 $74 $93 $124 $144 $173 $ 585 $ 298 $ 534 $ 1,173
Operating Costs (74) (71) (70) (79) (81) (108) (120) (140) (395) (294) (449) (817)
Operating Income (EBIT) (6) 10 5 (4) 12 16 24 34 190 5 85 356
Net Interest Expense $8 ($10) ($9) ($9) ($12) ($53) ($52) ($53) $ (95) $ (20) $ (171) $ (195)
Other 21 2 (6) (39) 8 0 0 0 82 (22) 8 0
Pretax Income $24 $1 ($10) ($52) $8 ($38) ($29) ($19) $178 ($37) ($77) $161
Effective Tax Rate -4% 110% 44% 35% 18% 36% 36% 36% 28% 61% 38% 36%
Preferred Dividends / Minority Interest (2) (4) (4) (6) (7) (29) (48) (66) 0 (16) (150) (306)
Reported Net Income $23 ($4) ($9) ($40) ($1) ($53) ($66) ($78) 128 (31) (198) (203)
Non-Recurring Items (After tax) (7) 0 3 26 (19) 0 0 0 (47) 21 (19) 0
Recurring Earnings $ 15 $ (4) $ (6) $ (14) $ (20) $ (53) $ (66) $ (78) $ 80 $ (9) $ (217) $ (203)
Recurring EPS (Diluted) $0.43 ($0.11) ($0.14) ($0.29) ($0.40) ($1.06) ($1.31) ($1.54) $2.24 ($0.23) ($4.30) ($4.02)
Basic Shares Outstanding 36 37 45 50 50 50 50 50 35 42 50 50
Diluted Shares Outstanding 36 37 45 50 50 50 50 50 36 42 50 50

DISCRETIONARY CASH FLOW: ($MM)

Recurring Net Income $15 ($4) ($6) ($14) ($20) ($53) ($66) ($78) $80 ($9) ($217) ($203)
DD&A (E&P and Non E&P) 42 47 40 35 39 57 64 75 262 164 235 483
Exploration Expense 0 0 0 0 1 1 1 1 0 0 4 9
Deferred Taxes (1) 2 (4) (18) 1 (14) (10) (7) 48 (23) (29) 58
Other (21) (23) (28) (39) (47) (7) (7) (7) (6) (110) (68) (35)
Discretionary Cash Flow $ 36 $ 21 $ 2 $ (36) $ (26) $ (16) $ (18) $ (15) $ 384 $ 23 $ (75) $ 313
DCF / Share $1.01 $0.58 $0.05 ($0.72) ($0.52) ($0.32) ($0.36) ($0.30) $10.72 $0.54 ($1.48) $6.20

Adjusted E&P EBITDAX * $37 $56 $45 $31 $52 $74 $89 $111 $452 $169 $325 $848

UNIT COSTS ($/MCFE):

Revenue $6.85 $8.66 $8.89 $9.90 $10.36 $9.58 $9.87 $10.11 $10.18 $8.47 $9.96 $10.65
Lease Operating Expense ($2.03) ($1.86) ($2.71) ($3.26) ($3.30) ($2.97) ($2.97) ($2.97) ($1.59) ($2.41) ($3.02) ($2.46)
Severance and Other Taxes $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
DD&A ($4.25) ($4.99) ($4.79) ($4.67) ($4.39) ($4.39) ($4.39) ($4.39) ($4.56) ($4.67) ($4.39) ($4.39)
G&A ($1.11) ($0.76) ($0.82) ($2.54) ($1.28) ($0.93) ($0.82) ($0.70) ($0.72) ($1.25) ($0.89) ($0.49)
Operating Margin ($0.54) $1.05 $0.56 ($0.57) $1.39 $1.30 $1.70 $2.06 $3.31 $0.14 $1.67 $3.31
Cash Margins $3.71 $6.04 $5.35 $4.10 $5.78 $5.69 $6.08 $6.45 $7.87 $4.80 $6.05 $7.70

ASSET INTENSITY: F&D:

2009 DCF $ 23 MM CAPEX $918 $636 $332 $500
2009 Prod 35 Bcfe RESERVES @ YE (Bcfe) 714 811 859 855
2009 PD F&D*** (118.02) /Mcfe RESERVE REPLACEMENT 213% 436% 189% 97%
Asset Intensity -18379% RAC (exc. revisions) ($/Mcfe)**** $21.35 $30.32 $3.33 $4.77
*EBITDAX adds back exploration expense Free Cash Flow ($MM)** ($843) ($1,046) ($253) ($213)
**Free Cash Flow is defined as Discretionary Cash Flow - Reserve Maintenance CAPEX Drilling RAC ($/Mcfe)**** $49.72 $30.77 $3.33 $4.77
***Includes estimated capital spent on leasehold/acreage. E&D only PD F&D for 2008 is -$7.11/Mcfe.
****Includes estimated capital spent on leasehold/acreage. E&D only RAC for 2008 is $8.76/Mcfe.
Source: J.P. Morgan estimates, company reports

5
Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

ATP Oil & Gas: Summary of Financials

Income Statement - Annual FY09A FY10E FY11E FY12E 1Q10A 2Q10E 3Q10E 4Q10E

Natural Gas Price (Henry Hub Bid Week) - $/MMBtu 3.99 4.58 5.06 - Natural Gas Price (Henry Hub Bid Week) - $/MMBtu 5.30 4.09 4.58 4.36
Crude Oil (WTI Cushing Spot) -$/Bbl 62.22 80.03 86.67 - Crude Oil (WTI Cushing Spot) -$/Bbl 78.84 77.88 80.00 83.33
Average Realized Price ($/Mcfe)-after hedging 7.34 9.77 10.65 - Average Realized Price ($/Mcfe)-after hedging 9.23 9.58 9.87 10.11
Total Production(Bcfe) 35 54 110 - Total Production(Bcfe) 9 13 15 17
%Natural Gas 42.9% 36.9% 35.1% - %Natural Gas 41.8% 36.8% 35.8% 35.3%

E&P Revenues ($MM) 298 534 1,173 - E&P Revenues ($MM) 93 124 144 173
Operating expenses 294 449 817 - Operating expenses 81 108 120 140
EBIT 5 85 356 - EBIT 12 16 24 34
E&P EBITDAX 169 325 848 - E&P EBITDAX 52 74 89 111

Interest Expense (20) (171) (195) - Interest Expense (12) (53) (52) (53)
Other Expenses (22) 8 0 - Other Expenses 8 0 0 0
Pretax income (37) (77) 161 - Pretax income 8 (38) (29) (19)
Tax rate (%) 60.6% 37.8% 36.0% - Tax rate (%) 18.1% 36.0% 36.0% 36.0%
Preferred Dividends/Minority Interest (16) (150) (306) - Preferred Dividends/Minority Interest (7) (29) (48) (66)
Reported net income (31) (198) (203) - Reported net income (1) (53) (66) (78)
Non-recurring items, discont. ops 21 (19) 0 - Non-recurring items, discont. ops (19) 0 0 0
Adjusted net income (9) (217) (203) - Adjusted net income (20) (53) (66) (78)
Recurring EPS (Diluted) (0.23) (4.30) (4.02) - Recurring EPS (Diluted) (0.40) (1.06) (1.31) (1.54)
Average diluted shares outstanding 42 50 50 - Average diluted shares outstanding 50 50 50 50
Discretionary Cash Flow 23 (75) 313 - Discretionary Cash Flow (26) (16) (18) (15)
DCF/share 0.54 (1.48) 6.20 - DCF/share (0.52) (0.32) (0.36) (0.30)

Unit Costs ($Mcfe) Unit Costs ($Mcfe)

Lease Operating Expense 2.41 3.02 2.46 - Lease Operating Expense 3.30 2.97 2.97 2.97
Severance and Other Taxes 0.00 0.00 0.00 - Severance and Other Taxes 0.00 0.00 0.00 0.00
DD&A 4.67 4.39 4.39 - DD&A 4.39 4.39 4.39 4.39
G&A 1.25 0.89 0.49 - G&A 1.28 0.93 0.82 0.70
Operating Margin (0.99) 1.48 3.31 - Operating Margin 0.26 1.30 1.70 2.06
Cash Margin 3.68 5.86 7.70 - Cash Margin 4.65 5.69 6.08 6.45

Balance Sheet and Cash Flow Data FY09A FY10E FY11E FY12E Ratio Analysis FY09A FY10E FY11E FY12E

Cash and cash equivalents 109 183 46 - Valuation

Other current assets 177 171 171 - P/E (adjusted) (40.4) (2.1) (2.3) -
Total current assets 286 354 216 - P/DCF 31.4 NM 2.7 -
Net PP&E 2,486 2,740 2,782 - Enterprise value/EBITDAX 10.6 7.8 3.2 -
Other assets 31 3 3 - EV/Mcfe 2.21 2.96 3.75 -
Total assets 2,803 3,096 3,002 - RLI (Years) 28 16 3 -

Total debt 1,217 1,521 1,521 - Ratios

Total liabilities 2,207 2,546 2,604 - Net debt/equity 299.7% 402.9% 694.9% -
Minority interests/Preferred stock - - - - Net debt/book capital 75.0% 80.1% 87.4% -
Shareholders' equity 456 411 258 - Net coverage ratio 9.2 1.9 4.3 -
ROE (2.1%) (44.5%) (64.8%) -
Discretionary Cash Flow 23 (75) 313 - ROCE (0.1%) (5.7%) (3.9%) -
Change in working capital 136 31 0 -
Cash flow from operations 159 (43) 313 - Yield and cash returns
Capex (636) (332) (500) - CFPS 0.54 (1.48) 6.20 -
Dividends 0 0 0 - DCF yield 5.31% (8.46%) 35.29% -
Share buybacks (net) (171) (3) (50) - Total cash returns(%) - - - -
Change in debt (164) 295 0 -
Other uses of cash 364 153 0 - PD Asset Intensity
Change in cash (106) 74 (137) - Production 35 54 110 -
PD F&D 21,851.00 59,352.50 270,040.00 -
Reserves @ YE (Bcfe) 811 859 714 - Asset Intensity 3,402,672% (4,252,681%) 9,521,551% -
Reserve Replacement 126 101 414 - RODD - - - -
RAC (exc.Revisions)($/Mcfe) 6.40 3.33 3.33 -
Free cash flow ($MM)** - - - - Mkt Cap (current) ($bn) 0.47
Drilling Traditional F&D ($Mcfe) 30.77 3.33 9.92 - Enterprise Value (current) 868

Source: Company reports and J.P. Morgan estimates.

Note: $ in millions (except per-share data). Fiscal year ends Dec
**Free Cash Flow is defined as Discretionary Cash Flow -Reserve Maintenance CAPEX

6
Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

Analyst Certification:
The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily
responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with
respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report
accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research
analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the
research analyst(s) in this report.
Important Disclosures

• Market Maker: JPMSI makes a market in the stock of ATP Oil & Gas.
• Lead or Co-manager: JPMSI or its affiliates acted as lead or co-manager in a public offering of equity and/or debt securities for
ATP Oil & Gas within the past 12 months.
• Client of the Firm: ATP Oil & Gas is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to
the company investment banking services, non-investment banking securities-related services and non-securities-related services.
• Investment Banking (past 12 months): JPMSI or its affiliates received in the past 12 months compensation for investment banking
services from ATP Oil & Gas.
• Investment Banking (next 3 months): JPMSI or its affiliates expect to receive, or intend to seek, compensation for investment
banking services in the next three months from ATP Oil & Gas.
• Non-Investment Banking Compensation: JPMSI has received compensation in the past 12 months for products or services other
than investment banking from ATP Oil & Gas. An affiliate of JPMSI has received compensation in the past 12 months for products
or services other than investment banking from ATP Oil & Gas.

ATP Oil & Gas (ATPG) Price Chart

100
Date Rating Share Price Price Target
N $14 ($) ($)
25-Mar-10 N 18.21 22.00
80 N UW
$18 $10 07-May-10 N 15.15 18.00
28-May-10 N 10.64 14.00
N $22 N $10 12-Jul-10 N 10.43 10.00
60
Price($) 13-Jul-10 UW 10.43 10.00

40

20

0
Oct Jul Apr Jan Oct Jul
06 07 08 09 09 10

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Initiated coverage Mar 25, 2010. This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst
may or may not have covered it over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Explanation of Equity Research Ratings and Analyst(s) Coverage Universe:

J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] J.P. Morgan Cazenove’s UK Small/Mid-Cap dedicated research
analysts use the same rating categories; however, each stock’s expected total return is compared to the expected total return of the FTSE
All Share Index, not to those analysts’ coverage universe. A list of these analysts is available on request. The analyst or analyst’s team’s
coverage universe is the sector and/or country shown on the cover of each publication. See below for the specific stocks in the certifying
analyst(s) coverage universe.

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Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

Coverage Universe: Joseph Allman, CFA: ATP Oil & Gas (ATPG), Anadarko Petroleum (APC), Apache Corporation
(APA), Approach Resources (AREX), Atlas Energy (ATLS), Berry Petroleum (BRY), Brigham Exploration Company
(BEXP), Cabot Oil & Gas (COG), Carrizo Oil & Gas Inc. (CRZO), Chesapeake Energy (CHK), Cobalt International Energy
(CIE), Concho Resources, Inc. (CXO), Continental Resources, Inc. (CLR), Delta Petroleum Corporation (DPTR), Denbury
Resources Inc. (DNR), Devon Energy (DVN), EOG Resources, Inc. (EOG), EQT Corporation (EQT), EXCO Resources,
Inc. (XCO), El Paso Corp. (EP), Goodrich Petroleum (GDP), Mariner Energy, Inc. (ME), McMoRan Exploration Company
(MMR), Newfield Exploration Company (NFX), Noble Energy (NBL), Penn Virginia Corporation (PVA), PetroQuest
Energy, Inc. (PQ), Petrohawk Energy (HK), Petroleum Development Corporation (PETD), Pioneer Natural Resources
(PXD), Plains Exploration & Production (PXP), QEP Resources (QEP), Questar Corp. (STR), Quicksilver Resources Inc
(KWK), Range Resources Corp (RRC), SandRidge Energy Inc. (SD), Southwestern Energy Company (SWN), St. Mary
Land & Exploration (SM), Swift Energy Company (SFY), Ultra Petroleum Corp (UPL), Venoco, Inc. (VQ), Whiting
Petroleum Corporation (WLL), Williams Companies (WMB)

J.P. Morgan Equity Research Ratings Distribution, as of June 30, 2010

Overweight Neutral Underweight
(buy) (hold) (sell)
JPM Global Equity Research Coverage 46% 42% 12%
IB clients* 49% 46% 31%
JPMSI Equity Research Coverage 44% 48% 9%
IB clients* 68% 61% 53%
*Percentage of investment banking clients in each rating category.
For purposes only of NASD/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category.

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the front of this note or your J.P. Morgan representative.

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Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

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Joseph Allman, CFA North America Equity Research
(1-212) 622-4864 15 July 2010
joseph.d.allman@jpmchase.com

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“Other Disclosures” last revised March 1, 2010.

Copyright 2010 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of J.P. Morgan.

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