ATP Announces Third Quarter 2010 Results and Operations Update

ATP Oil & Gas Corporation (NASDAQ: ATPG) today announced results for third quarter 2010 and an update on operations.

Results of Operations

Production for the third quarter 2010 averaged 21.1 MBoe/day, compared to 21.3 MBoe/day for the second quarter and 38% greater than the comparable quarter in 2009. Revenues from oil and gas production were $102.1 million for the third quarter 2010 compared to $75.0 million for the third quarter 2009. Oil continued to represent a majority of revenues, accounting for 77% of revenues in the third quarter 2010 and 78% in the comparable 2009 period.

A net loss attributable to common shareholders of $58.4 million, or $1.15 per basic and diluted share for the third quarter 2010 was recorded. This compares to a third quarter 2009 net loss of $9.1 million, or $0.20 per basic and diluted share.

Lease operating expense for the third quarter 2010 was $27.5 million ($21.6 million recurring and $5.9 million workover expenses) compared to $22.9 million ($17.1 million recurring and $5.8 million workover expense) for the third quarter 2009. The increase in recurring operating expense was primarily due to the new production from the Telemark Hub and additional insurance costs associated with ATP’s annual July 1 renewal. ATP began recording lease operating expenses at its Telemark Hub in the second quarter 2010 with the commencement of production from the Atwater Valley 63 #4 well. No such expenses had been recorded in the comparable 2009 period.

General and administrative expense for the third quarter 2010 increased $2.7 million from the same period in 2009 to $9.6 million. Third quarter 2010 includes $1.8 million of noncash stock-based compensation compared with a similar amount in the comparable 2009 quarter. The overall increase was primarily due to higher net compensation expense and professional fees.

Interest expense for the third quarter 2010 was $69.2 million, net of $3.3 million capitalized related to the Octabuoy construction. Interest expense for the third quarter 2009 was $9.0 million, net of $25.7 million capitalized related to the development of the Telemark Hub and $2.0 million capitalized related to the Octabuoy construction. With installation of the ATP Titan at the company’s Telemark Hub and commencement of production at this location on March 28, 2010, the Telemark Hub no longer qualifies for interest capitalization. For the third quarter 2010, interest expense includes ATP’s first lien and senior secured second lien bonds (a total of $50.8 million), the new loan associated with the financing of the ATP Titan as discussed below ($0.3 million) and other obligations, less amounts capitalized as discussed above. A summary of payments related to other long-term obligations is set forth at the end of this release.

Gulf of Mexico Oil Spill and Drilling Moratorium Update

ATP is in the process of filing permits for additional wells at the Telemark and Gomez Hubs with the lifting of the deepwater moratorium in the Gulf of Mexico on October 12 by the Department of Interior (DOI). Although the moratorium has ended, ATP cannot predict when permits will be granted under the DOI’s new requirements.

Operations Update

Telemark Hub

A second well, Mississippi Canyon ("MC”) Block 941 A-1 formerly the MC 941#3, was completed at this hub in early October 2010. During October’s production cycle, the well averaged 8.2 MBoe/d (86% oil) with an October exit rate of 12.2 MBoe/d (86% oil). ATP has completed and filed the permit application to finalize drilling and completion of the next well at the Telemark Hub and the operation to move the platform rig to the slot for the well is underway. The third and fourth wells at this hub were both drilled to approximately 12,000 feet in 2009. The target depth for each well is approximately 20,000 feet. ATP operates the deepwater Telemark Hub with a 100% working interest and owns 100% of the subsidiary that owns the ATP Titan and associated pipelines and infrastructure.

Gomez Hub

Development operations at Anduin West, part of the Gomez Hub, to tie-in the MC 754 #3 well have been delayed while ATP awaits approval to lay the pipeline. Approval is expected allowing pipeline installation to commence before year’s end. The MC 754 #3 well was originally drilled and completed in the second quarter 2008. ATP operates MC 754 with a 75% working interest.

Tors Hub

ATP operates the Tors Hub consisting of Kilmar and Garrow in the UK North Sea with a 17% working interest. ATP drilled and tested a step-out appraisal well on Kilmar in May. A sidetrack to this well into a separate fault block has been completed and evaluation is underway. After the work at Kilmar, the drilling rig was moved to the Garrow field where the Garrow G2 well is being drilled with production expected in late 2010.

Cheviot (Octabuoy)

The construction of the Octabuoy Hull, which will be initially deployed at Cheviot, ATP’s largest development in terms of proved and probable reserves in the UK North Sea, is approaching 80% completion. ATP is in discussions with the hull building contractor to also construct the topsides using a similar construction and finance agreement.

Acquisitions and Divestitures

In the third quarter of 2010, ATP sold a 67% working interest in the deep operating rights of one of its Gulf of Mexico properties to a third party for an undisclosed amount resulting in a $15.0 million gain. In addition, ATP retained a 10.005% overriding royalty interest that decreases to 1.6675% following the conclusion of deepwater royalty relief.

Effective July 1, 2010, ATP was granted a lease on Ship Shoal Block 361 (SS 361). ATP bid on SS 361 at the Central Gulf of Mexico Offshore Lease Sale 213 held in New Orleans in March 2010. SS 361 is located six miles west of ATP’s SS 358 Hub and was the subject of previous drilling activity. The water depth for this block is approximately 387 feet.

During the third quarter, payout was achieved on the limited term overriding royalty interests at MC 711 resulting in a net revenue interest assigned back to ATP of 12.825% in MC 711 and MC 755. In June 2008, ATP received $82.0 million in exchange for this limited term overriding royalty interest.

ATP Titan Transaction

On September 24, 2010, ATP contributed its ownership in the ATP Titan platform and related assets to ATP Titan LLC ("Titan LLC"), a wholly-owned and unrestricted subsidiary. Simultaneously with the transfer, ATP entered into an exclusive platform use agreement with Titan LLC and Titan LLC secured a $350 million term loan facility with CLG Energy Finance, LLC ("CLG Energy"), an affiliate of Beal Bank Nevada. The facility was funded $150 million at closing, with future draws available subject to lender approval. In accordance with the agreement, Titan LLC is in the process of completing an additional draw request of $100 million now that the second well at the Telemark Hub has commenced production. An additional $100 million in equal draws of $50 million each may be requested as ATP commences production from the third and fourth wells at the Telemark Hub. The terms of the loan between Titan LLC and CLG Energy call for annual principal reductions of 8% in the first year, 9% during the second year and then 10% thereafter until maturity in September 2017. All payments are made quarterly and bear interest at LIBOR (floor of 0.75%) plus 8%. As a 100% wholly-owned subsidiary, all operations of Titan LLC are consolidated into ATP.

2010 Revised Guidance for Production and CAPEX

The impact from the BP oil spill and resulting moratorium discussed above has caused significant adjustments to ATP’s production estimates and CAPEX program. ATP incurred CAPEX costs of $631.7 million during the first nine months of 2010. Of this amount, $50.0 million was capitalized interest, $118.5 million was financed by suppliers through NPI and vendor deferral programs with the balance paid by ATP. For the fourth quarter 2010, ATP anticipates that it will incur $60 - $70 million in total CAPEX of which $45 – $50 million will be cash with the balance contributed by suppliers through existing NPI programs or deferral programs. These capital expenditures include continued development operations at Telemark and the laying of pipeline and final connections for the Anduin West project at the Gomez Hub in the Gulf of Mexico. In the North Sea, capital activities will include completion operations for the Garrow G2 well at Tors and continued construction of the Octabuoy for ATP’s Cheviot development. Regarding production, ATP reaffirms its previously estimated 8.0 MMBoe minimum production target for the year.

ATP's selected financial data schedule below contains additional information on the company’s activities for the third quarter 2010 and comparable 2009 period.

Third Quarter 2010 Conference Call

ATP Oil & Gas Corporation (NASDAQ: ATPG) will host a conference call on Monday, November 8^th at 10:00 am CST to discuss the company’s third quarter results followed by a Q&A session.

3^rd Quarter Results Conference Call
Date: Monday, November 8, 2010
Time: 11:00 am EST; 10:00 am CST; 9:00 am MST and 8:00 am PST

ATP invites interested persons to listen to the live webcast on the company’s website at www.atpog.com. Phone participants should dial 888-359-3613. A digital replay of the conference call will be available at 888-203-1112, ID# 8124759, for a period of 24 hours beginning at 2:00 pm CST.

About ATP Oil & Gas Corporation

ATP Oil & Gas is an international offshore oil and gas development and production company with operations in the Gulf of Mexico and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market. For more information about ATP Oil & Gas Corporation, visit www.atpog.com.

Forward-looking Statements

Certain statements included in this news release are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. ATP cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those ATP expects include changes in natural gas and oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the company’s ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting ATP’s business. While ATP does not file reports with the SEC containing probable and possible reserve quantities, it occasionally will include them in presentations and discuss such reserves publicly. ATP and its independent third party reservoir engineers use the term "probable” to describe volumes of reserves potentially recoverable through additional drilling or recovery techniques that, by their nature, are more speculative than estimates of proved reserves. All estimates of reserves in this news release have been prepared by ATP’s independent third party engineers. More information about the risks and uncertainties relating to ATP's forward-looking statements is found in the company’s SEC filings.