for the Stock Market Project you will analyze a major U.S. corporation and its competitor. After doing the analysis, you are to recommend whether to buy, sell, or hold that U.S. corporation

Running Head : CAPITAL DECISIONS

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CAPITAL DECISIONS

Introduction

ATP Oil and Gas Corporation was incorporated in Texas in 1991 (Brigham 1995 . The corporation was formed to engage in acquisition development and production of oil and natural gas (Ibid , 1995 . Headquartered in Houston , Texas , the corporation primarily focuses its effort on oil and natural gas properties . Previous drilling has encountered reservoirs that are likely to contain commercial viable quantities of oil and gas (Krefetz , 1988 . The corporation in a public listed company in NASDAQ

br under ticker symbol ATPG (Ibid , 1988

On July 24 , 2005 in Business Wire (Houston , ATP oil and Gas Corporation announced that it has recently acquired four more drilling rigs in addition to their previously committed two rigs , that is , Nabors 2002 and Diamond Ocean confidence (Lev , 1997 . The acquisition of these rigs boosted their development prospects of key properties (Gibson , 1997

On August 6 , 2008 , the corporation announced the second quarter results of 2008 . The main highlights include production increased by 26 over the second quarter 2007 , revenues increased by 45 from 132 .2 million to 191 .8 million over second quarter 2007 , refinancing of debt significantly extended the maturity (Krefetz , 1988 . The 24 .2 million change pertaining to the cost of previous debt which was required to be written off as a result of the closing of a new second term loan facility which extended maturity of ATP 's long term debt , this will provide flexibility

Apache corporation is an energy company that engages in exploration development and production of oil and natural gas in Gulf of Mexico western Canada , onshore of Egypt , offshore of western Australia and North Sea , onshores of Argentina among others (Lev , 1994 . The company has holding interests through subsidiaries in US , Canada and other international properties including Apache Canada Ltd , DEK Energy Company , Apache Energy Ltd , Apache North America Inc and Apache Overseas Inc (Krefetz , 1988 . The company is listed in New York Stock Exchange

Comparative study of profitability of ATP oil and Gas Corp and Apache Corporation for the quarter year ending 30 June 2008 : -

ATP Oil Gas Apache Corporation

Profit (Loss ) Margin Net Income (Loss 77 ,500 ,000 (0 .09 1 ,461 ,100 ,000 (0 .37

Sales 75 ,250 ,000 3 ,904 ,000 ,000

Return on Asset Net Income 77 ,500 ,000 (0 .03 1 ,461 ,100 ,000 (0 .04

Average ROE Net Income 77 ,500 ,000 (0 .22 1 ,461 ,100 ,000 (0 .09

Average Stockholders Equity 345 ,232 ,000 16 ,514 ,500 ,000 ( HYPERLINK "http /www .atog .com " www .atog .com ( HYPERLINK "http /www .Apachecorp .com " www .Apachecorp .com

As observed , operations efficiency in Apache Corp are high as they have high profitability ratios as compared to ATP oil and gas Corporation

Comparative study of Asset Utilization ratios

ATP Oil Gas Apache Corp

Asset turnover Sales 875 ,250 ,000 (0 .34 3 ,904 ,100 ,000 (0 .12

br ROA Net Income 77 ,500 ,000 (0 .03 1 ,461 ,100 ,000 (0 .04

Average...