During the August earnings call of one of my favorite E&P companies, one analyst compared the firm to the late Rodney Dangerfield. It's an apt analogy. ATP Oil & Gas
Perhaps most glaring is the miniscule multiple that Mr. Market is assigning to ATP's cash flows. Management has confirmed that the company is being valued at around one times expected 2008 cash flow. Meanwhile, a recent BMO report estimates a median multiple of 4.5 times cash flow for intermediates like Goodrich Petroleum
One explanation for this depressed valuation might be that ATP is growing at a glacial pace. But that doesn't fly, because the company just reported 31% year-over-year production growth for the six months through June.
OK, maybe the company operates in Venezuela like Harvest Natural Resources
There have been some operational hiccups, but ATP continues to execute on a unique path to upstream profits that I highlighted nearly a year ago. The only significant misstep since that time was a below-market equity offering that I believe left some shareholders feeling burned. But the company's chairman/founder/CEO stands closest to the flame as the single largest shareholder.
Like Ultra Petroleum
Just like Acergy SA