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What: Shares of ATP Oil & Gas
So what: In the third quarter, production averaged 24,000 barrels of crude, down from 31,000 in August, and a pair of the company's wells have slowed production. The lower production has sent ATP's bond yields skyrocketing, a major problem for a company that has $2 billion in long-term debt.
Now what: When you use as much leverage as ATP Oil & Gas, the risk is that your operations don't perform flawlessly and creditors lose faith in you. That's been happening slowly for ATP, and the stock now trades at about one-third of its 52-week high. I would stay away from this stock right now and wait for production to improve before jumping into shares and trying to catch a falling knife.
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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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