ATP Oil & Gas seeks OK of settlement with U.S. Department of Interior

By Jim Witters

Wilmington, Del., Feb. 28 - ATP Oil & Gas Corp. is seeking approval of a new reassessment agreement with the U.S. Department of the Interior regarding one of ATP's federal oil and gas leases, according to documents filed Feb. 27 with the U.S. Bankruptcy Court for the Southern District of Texas.

The proposed agreement would settle an appeal by the debtors of assessments secured by the Interior Board of Land Appeals related to the leases and rights of use.

Under the proposal, the bond amounts ATP is required to place into a series of decommissioning trusts are reduced to levels more in line with ATP's original estimates.

The trusts are intended to cover potential costs of plugging, abandonment, site clearance, removal and restoration for wells, equipment, platforms, pipelines, facilities and structures for certain of the debtor's federal oil and gas leases.

The proposed agreement eliminates a $12.77 million liability for the ATP estate, which fell due Jan. 31. And it produces an immediate cash refund of $2.1 million, which was paid to ATP on Feb. 1, court documents state.

The agreement for OCS Lease G-24786 covering West Cameron Block 663 includes terms similar to existing decommissioning trust agreements approved by the court for other ATP leases.

At the request of Interior's Bureau of Ocean Energy Management, the West Cameron Block 663 lease was removed from a multi-block decommissioning trust agreement approved by the court in November 2012.

The BOEM wanted the lease secured by a separate, lease-specific decommissioning trust agreement, which the debtor agreed to fully fund by Feb. 1, according to the court filing.

A hearing on the agreement is scheduled for March 28.

ATP Oil & Gas is a Houston-based offshore oil and gas development and production company focused in the Gulf of Mexico, the Mediterranean Sea and the North Sea. The company filed for bankruptcy on Aug. 17, 2012 under Chapter 11 case number 12-36187.

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