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8-K - FORM 8-K - IVANHOE ENERGY INCeh1201296_8k.htm
EX-99.2 - EXHIBIT 99.2 - IVANHOE ENERGY INCeh1201296_ex9902.htm
EXHIBIT 99.1
 
IVANHOE ENERGY INC.
Unaudited Pro-forma Condensed Consolidated Statement of Financial Position
September 30, 2012
 
(US$000s)
 
As
Reported
   
Pan-China Divestiture
Pro-Forma Adjustments
     
Pro-forma
 
                     
Assets
                   
Current Assets
                   
Cash and cash equivalents
    16,882       33,880  
(a)
    50,762  
Restricted cash
    20,500               20,500  
Accounts receivable
    3,724       593  
(b)
    4,317  
Note receivable
    232               232  
Prepaid and other
    1,189       (116 )
(c)
    1,073  
Assets held for sale
    53,405               53,405  
 
    95,932       34,357         130,289  
                           
Intangible
    282,189               282,189  
Property, plant and equipment
    48,023       (37,608 )
(d)
    10,415  
Long term receivables
    6,419               6,419  
 
    432,563       (3,251 )       429,312  
                           
Liabilities and Shareholders’ Equity
                         
Current Liabilities
                         
Accounts payable and accrued liabilities
    21,738       (5,426 )
(e)
    16,312  
Short term debt
    57,980               57,980  
Income taxes
    397       (397 )
(f)
     
 
    80,115       (5,823 )       74,292  
                           
Long term debt
    65,410               65,410  
Long term derivative instruments
    74               74  
Long term provisions
    3,122               3,122  
Deferred income taxes
    17,196       (2,313 )
(g)
    14,883  
      165,917       (8,136 )       157,781  
                           
Shareholders’ Equity
                         
Share capital
    586,108               586,108  
Contributed surplus
    28,945               28,945  
Accumulated deficit
    (348,407 )     4,885  
(h)
    (343,522 )
 
    266,646       4,885         271,531  
 
    432,563       (3,251 )       429,312  
 
 
 
 
 

 
 
IVANHOE ENERGY INC.
Unaudited Pro-forma Condensed Consolidated Statement of Loss and Comprehensive Loss
For the Nine Months Ended September 30, 2012
 
(US$000s, except share and per share amounts)
 
As
Reported
   
Pan-China Divestiture
Pro-Forma Adjustments
     
Pro-forma
 
                     
Revenue
                   
Oil
    27,997       (27,997 )
(i)
     
Interest
    22       (1 )
(j)
    21  
      28,019       (27,998 )       21  
                           
Expenses and other
                         
Operating
    13,725       (10,226 )
(k)
    3,499  
Exploration and evaluation
    22,800               22,800  
General and administrative
    31,515       (2,027 )
(l)
    29,488  
Depletion and depreciation
    6,371       (5,562 )
(m)
    809  
Foreign currency exchange loss
    1,855       27  
(n)
    1,882  
Derivative instruments gain
    (1,721 )             (1,721 )
Finance
    2,088               2,088  
Other expenses     309               309  
      76,942       (17,788 )       59,154  
                           
Loss before income taxes
    (48,923 )     (10,210 )       (59,133 )
                           
(Provision for) recovery of income taxes
                         
   Current
    (1,566 )     1,566  
(o)
     
   Deferred
    577       1,324  
(p)
    1,901  
      (989 )     2,890         1,901  
                           
Net loss and comprehensive loss
    (49,912 )     (7,320 )       (57,232 )
                           
Net loss per common share
                         
Basic and diluted
    (0.15 )               (0.17 )
                           
Weighted average number of common shares
                         
Basic and diluted (000s)
    344,139                 344,139  
 
 
 
2

 
 
 
IVANHOE ENERGY INC.
Unaudited Pro-forma Condensed Consolidated Statement of Loss and Comprehensive Loss
For the Nine Months Ended September 30, 2011
 
(US$000s, except share and per share amounts)
 
As
Reported
   
Pan-China Divestiture
Pro-Forma Adjustments
     
Pro-forma
 
                     
Revenue
                   
Oil
    28,277       (28,277 )
(i)
     
Interest
    429       (2 )
(j)
    427  
      28,706       (28,279 )       427  
                           
Expenses and other
                         
Operating
    15,351       (11,692 )
(k)
    3,659  
Exploration and evaluation
    2,143               2,143  
General and administrative
    37,400       (1,982 )
(l)
    35,418  
Depletion and depreciation
    5,853       (5,045 )
(m)
    808  
Foreign currency exchange gain
    (1,133 )     (107 )
(n)
    (1,240 )
Derivative instruments gain
    (12,629 )             (12,629 )
Finance
    798               798  
Gain on derecognition of long term provision
    (1,900 )             (1,900 )
      45,883       (18,826 )       27,057  
                           
Loss before income taxes
    (17,177 )     (9,453 )       (26,630 )
                           
(Provision for) recovery of income taxes
                         
   Current
    (1,481 )     1,560  
(o)
    79  
   Deferred
    (736 )     3,414  
(p)
    2,678  
      (2,217 )     4,974         2,757  
                           
Net loss and comprehensive loss
    (19,394 )     (4,479 )       (23,873 )
                           
Net loss per common share
                         
Basic and diluted
    (0.06 )               (0.07 )
                           
Weighted average number of common shares
                         
Basic and diluted (000s)
    342,173                 342,173  
 
 
 
3

 
 
 
IVANHOE ENERGY INC.
Unaudited Pro-forma Condensed Consolidated Statement of Loss and Comprehensive Loss
For the Year Ended December 31, 2011
 
(US$000s, except share and per share amounts)
 
As
Reported
   
Pan-China Divestiture
Pro-Forma Adjustments
     
Pro-forma
 
                     
Revenue
                   
Oil
    37,403       (37,403 )
(i)
     
Interest
    576       (2 )
(j)
    574  
      37,979       (37,405 )       574  
                           
Expenses and other
                         
Operating
    20,131       (15,570 )
(k)
    4,561  
Exploration and evaluation
    2,774               2,774  
General and administrative
    48,449       (2,604 )
(l)
    45,845  
Depletion and depreciation
    8,030       (6,917 )
(m)
    1,113  
Foreign currency exchange gain
    (355 )     (112 )
(n)
    (467 )
Derivative instruments gain
    (12,965 )             (12,965 )
Finance
    361               361  
Gain on derecognition of long term provision
    (1,900 )             (1,900 )
      64,525       (25,203 )       39,322  
                           
Loss before income taxes
    (26,546 )     (12,202 )       (38,748 )
                           
(Provision for) recovery of income taxes
                         
   Current
    (2,122 )     2,201  
(o)
    79  
   Deferred
    3,392       989  
(p)
    4,381  
      1,270       3,190         4,460  
                           
Net loss and comprehensive loss
    (25,276 )     (9,012 )       (34,288 )
                           
Net loss per common share
                         
Basic and diluted
    (0.07 )               (0.10 )
                           
Weighted average number of common shares
                         
Basic and diluted (000s)
    342,678                 342,678  
 
 
 
4

 
 
 
IVANHOE ENERGY INC.
Unaudited Pro-forma Condensed Consolidated Statement of Loss and Comprehensive Loss
For the Year Ended December 31, 2010
 
(US$000s, except share and per share amounts)
 
As
Reported
   
Pan-China Divestiture
Pro-Forma Adjustments
     
Pro-forma
 
                     
Revenue
                   
Oil
    21,720       (21,720 )
(i)
     
Interest
    208       (1 )
(j)
    207  
      21,928       (21,721 )       207  
                           
Expenses and other
                         
Operating
    13,625       (9,381 )
(k)
    4,244  
Exploration and evaluation
    8,471               8,471  
General and administrative
    42,807       (684 )
(l)
    42,123  
Depletion and depreciation
    6,524       (6,203 )
(m)
    321  
Foreign currency exchange gain
    (3,325 )     (4 )
(n)
    (3,329 )
Derivative instruments gain
    (18,571 )             (18,571 )
Finance
    24               24  
      49,555       (16,272 )       33,283  
                           
Loss before income taxes
    (27,627 )     (5,449 )       (33,076 )
                           
(Provision for) recovery of income taxes
                         
   Current
    (126 )     25  
(o)
    (101 )
   Deferred
    1,171               1,171  
      1,045       25         1,070  
                           
Net loss and comprehensive loss
    (26,582 )     (5,424 )       (32,006 )
                           
Net loss per common share
                         
Basic and diluted
    (0.08 )               (0.10 )
                           
Weighted average number of common shares
                         
Basic and diluted (000s)
    327,442                 327,442  
 
 
 
 
5

 
 
IVANHOE ENERGY INC.
Notes to the Unaudited Pro-forma Condensed Consolidated Financial Statements
 
1.  Basis of Presentation
 
The historical condensed consolidated statement of financial position as at September 30, 2012 and historical condensed consolidated statements of loss and comprehensive loss for the nine months ended September 30, 2012 and 2011 and twelve months ended December 31, 2011 and 2010 (“Financial Statements”) is derived from and should be read in conjunction with Ivanhoe’s audited consolidated financial statements, contained in the Company’s 2011 Annual Report on Form 10-K filed on March 15, 2012, and Ivanhoe’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2012, filed on November 8, 2012.
 
The Financial Statements reflect the impact of the Pan-China Transaction on Ivanhoe’s operating results. The unaudited pro-forma condensed consolidated statement of financial position has been prepared assuming the Pan-China Transaction occurred on September 30, 2012. The unaudited pro-forma condensed consolidated statements of loss and comprehensive loss reflect the Pan-China Transaction as if it had occurred on January 1, 2010.
 
The preparation of the Financial Statements is based on financial statements prepared using International Financial Reporting Standards, as issued by the International Accounting Standards Board, that the Company adopted effective January 1, 2010 in its audited consolidated financial statements for the years ending December 31, 2011 and 2010. These principles require the use of estimates that affect the reported amounts of revenues and expenses. Actual results could differ from those estimates.
 
The pro-forma financial statements are provided for illustrative purposes only and do not purport to be indicative of the Company’s financial position or results of operations that would have actually occurred had the divestitures occurred on the indicated dates, nor are they necessarily indicative of future results.
 
2.  Pro-forma Adjustments and Assumptions
 
The pro-forma financial statements have been prepared by adjusting the Company’s historical Financial Statements as described below:
 
(a)
Reflects the closing of the Pan-China Transaction including the receipt of $45 million in proceeds less estimated closing adjustments of $5.4 million, $4 million as a customary holdback and a pro-forma adjustment of $1.7 million for cash included in Pan-China.
 
(b)
To reflect the amounts receivable on closing of the Pan-China Transaction that includes $4 million as a customary holdback less a pro-forma adjustment of $3.4 million to remove accounts receivable associated with Pan-China.
 
(c)
To remove prepaid expenses included in Pan-China.
 
(d)
To remove the carrying value of property, plant and equipment in Pan-China.
 
(e)
Adjustment to reflect the payable resulting from estimated transaction costs of $1.2 million and to remove $6.6 million in payables associated with Pan-China.
 
(f)
To remove the current income tax recorded in Pan-China.
 
(g)
Adjustment to remove the deferred income taxes associated with Pan-China.
 
(h)
Includes an estimated gain on disposal of approximately $11.5 million resulting from the divestiture offset by pro-forma closing adjustments (Note(a)) and estimated transaction costs (Note(e)). The gain on disposal is non-recurring and is not included as an adjustment in the unaudited pro-forma condensed consolidated statement of loss and comprehensive loss.
 
(i)
To remove the oil revenue generated by Pan-China.
 
(j)
The unaudited pro-forma condensed consolidated statements of loss and comprehensive loss do not assume any interest income on the estimated net cash proceeds from the sale transaction. A pro-forma adjustment was shown in order to remove the interest income that is associated with Pan-China in the period.
 
 
 
6

 
 
 
(k)
Adjustment to remove the operating costs incurred in Pan-China.
 
(l)
Adjustment to remove the direct general and administrative expenses associated with Pan-China.
 
(m)
Adjustment to remove the depletion expense incurred in Pan-China.
 
(n)
Adjustment to remove the foreign exchange impact resulting from the revaluation of monetary assets and liabilities held in a currency other than the functional currency.
 
(o)
Adjustment to remove the current income tax expense incurred in Pan-China.
 
(p)
Adjustment to remove the deferred income tax expense/recovery in Pan-China.
 
 
 
 
 
 
 
 
7