CFO Corner: Albert Reese, Financial Beacon for ATP Oil & Gas through the Deepwater Moratorium
1. What was the biggest challenge your company faced over the last 12 months and how were you able to overcome it with financial leadership? The Moratorium in the Deepwater Gulf of Mexico – no question. Over 90% of our revenues come from the Gulf of Mexico, and more than half of our capital expenditures are allocated to it. What started out as a 30 day reprieve in May 2010 became two six-month moratoriums and ultimately an unlimited cessation of business. We overcame the imposition by being creative with our financings, working with our suppliers who were equally impacted by the shut down, and postponing all unnecessary expenditures. This was truly a team effort both within our company and with our partners.
2. What has made your company stand out and be successful financially? We have an unusual business model in the energy exploration business – we acquire properties that have been discovered, but haven’t been developed by the current owner. Many reasons can cause an owner to divest of a property with proven undeveloped reserves – change in management teams, change in ownership of the current owner, changes in energy prices, reallocation of resources are merely a few of the reasons. We acquire these properties with a definitive development plan and move forward as prudently as possible with the development. Since the company’s inception in 1991, we’ve had a 98% success rate in taking a property that was not producing and transforming the property into commercial production.
3. What is the most important thing you’ve learned in your position? Always, always, always have a Plan B! Expect the best, but plan for the worse. There are so many things in the world today that can impact a business plan that have absolutely nothing to do with the business model. We’ve seen this recently the financial crisis in Greece and other European countries where there’s been a sharp reversal in capital markets in a single day. Isolated events can have major impacts and disruptions. Always have another avenue or approach to a situation.
4. What advice do you have for other CFOs? Listen. There is never a single correct plan to address each situation. Consult with those around you for input and use compromise and leadership to reach a decision because any decision, whether a tough or an easy one, will impact the company and its employees. Attempt to gather pertinent information before rushing to a conclusion. This does not mean it has to take a long time to make decisions; it merely means that appropriate input, benefits and consequences should be considered.
Albert L. Reese, Jr. has served in the field of finance and management for almost 40 years. He has served as Chief Financial Officer of ATP Oil & Gas Corporation in Houston, Texas, for the past ten years and prior to that, served in a consulting capacity as Director of Finance for the company since it was formed in 1991. ATP is a multinational oil and gas company with a major emphasis in the Gulf of Mexico and the North Sea.