Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - NEWFIELD EXPLORATION CO /DE/ | nfx8-k.htm |
| EX-2.1 - EXHIBIT 2.1 - NEWFIELD EXPLORATION CO /DE/ | nfxspa.htm |
| EX-2.2 - EXHIBIT 2.2 - NEWFIELD EXPLORATION CO /DE/ | ex22.htm |
| EX-99.1 - EXHIBIT 99.1 - NEWFIELD EXPLORATION CO /DE/ | ex991.htm |
Exhibit 99.2
6
NEWFIELD EXPLORATION COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On February 10, 2014, Newfield Exploration Company (the “Company” or “Newfield”) sold all shares of Newfield Malaysia Holding Inc. and its subsidiaries Newfield Peninsula Malaysia Inc., Newfield Sarawak Inc., and Newfield Sabah Inc. (“the Malaysia Business”) to SapuraKencana Petroleum Berhad (“SapuraKencana”) (the “Malaysia Sale”) for total proceeds of approximately $896 million, subject to customary post-closing adjustments. The proceeds were used to repay all amounts owed under the Company’s credit facility. The Company started reporting our Malaysia business along with our China business as discontinued operations in the second quarter of 2013. The following unaudited pro forma condensed financial information reflects the historical financial statements of the Company adjusted on a pro forma basis to give effect to the sale.
The pro forma adjustments reflecting Newfield’s sale of the Malaysia Business include the use of estimates and assumptions as described in the related notes. The pro forma adjustments are based on information available to management at the time these unaudited pro forma condensed consolidated financial statements were prepared. Newfield believes the estimates and assumptions used are reasonable and the significant effects of the transaction have been properly reflected. However, the estimates and assumptions are subject to change as additional information becomes available.
The unaudited pro forma condensed consolidated balance sheet is based on the unaudited September 30, 2013 Newfield balance sheet and includes pro forma adjustments to give effect to the Malaysia Sale as if it occurred on September 30, 2013. The unaudited pro forma condensed consolidated statements of operations for the nine month period ended September 30, 2013, and the comparative nine month period ended September 30, 2012 have not been presented as the financial statements for those periods previously reported the Malaysia Business as a discontinued operation in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013. The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010 are based on the audited statements of operations of Newfield Exploration Company, and include pro forma adjustments to give effect to the Malaysia Sale as if the transaction had occurred on January 1, 2010 as well as the adjustments necessary to reflect our China business as discontinued operations for the years ended December 31, 2012, 2011 and 2010. The unaudited pro forma statements of income do not purport to represent what the Company’s results of operations would have been if the transaction had occurred on January 1, 2010. The Company believes the assumptions used herein provide a reasonable basis for presenting the significant effects directly attributable to the transaction described above.
The unaudited pro forma financial information is for informational purposes only and is not intended to represent or to be indicative of the results that actually would have occurred had the transaction described above been completed as of the dates set forth in this unaudited pro forma financial information and should not be viewed as indicative of Newfield’s future results of operations or financial position. Actual results may vary significantly from those reflected in the unaudited pro forma financial information for a number of reasons, including but not limited to, differences between the assumptions used to prepare the unaudited pro forma financial information and actual results. The unaudited pro forma financial information should be read in conjunction with the accompanying footnotes, Newfield’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013, and Newfield’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and other information Newfield has filed with the Securities and Exchange Commission.
1
NEWFIELD EXPLORATION COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
|
September 30, 2013
|
|||||||||||||
|
Historical
Consolidated
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||||||
|
ASSETS
|
|||||||||||||
|
Current assets:
|
|||||||||||||
| $ | 89 | $ | (43 | ) |
(a)
|
$ | 495 | ||||||
| 889 |
(a)
|
||||||||||||
| (440 | ) |
(b)
|
|||||||||||
|
Accounts receivable
|
441 | (88 | ) |
(a)
|
353 | ||||||||
|
Inventories
|
146 | (107 | ) |
(a)
|
39 | ||||||||
|
Derivative assets
|
29 | — | 29 | ||||||||||
|
Deferred taxes
|
7 | — | 7 | ||||||||||
|
Other current assets
|
61 | (26 | ) |
(a)
|
35 | ||||||||
|
Total current assets
|
773 | 185 | 958 | ||||||||||
|
Property and equipment, at cost
|
15,920 | (1,398 | ) |
(a)
|
14,522 | ||||||||
|
Less — accumulated depreciation, depletion and amortization
|
(8,110 | ) | 927 |
(a)
|
(7,183 | ) | |||||||
|
Total property and equipment, net
|
7,810 | (471 | ) | 7,339 | |||||||||
|
Derivative assets
|
31 | — | 31 | ||||||||||
|
Long-term investments
|
62 | — | 62 | ||||||||||
|
Deferred taxes
|
26 | (26 | ) |
(a)
|
— | ||||||||
|
Other assets
|
41 | — | 41 | ||||||||||
|
Total assets
|
$ | 8,743 | $ | (312 | ) | $ | 8,431 | ||||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||||||||
|
Current liabilities:
|
|||||||||||||
|
Accounts payable
|
$ | 87 | $ | (28 | ) |
(a)
|
$ | 59 | |||||
|
Accrued liabilities
|
893 | (151 | ) |
(a)
|
742 | ||||||||
|
Advances from joint owners
|
41 | (12 | ) |
(a)
|
29 | ||||||||
|
Asset retirement obligation
|
6 | (4 | ) |
(a)
|
2 | ||||||||
|
Derivative liabilities
|
49 | — | 49 | ||||||||||
|
Total current liabilities
|
1,076 | (195 | ) | 881 | |||||||||
|
Other liabilities
|
42 | (14 | ) |
(a)
|
28 | ||||||||
|
Derivative liabilities
|
1 | — | 1 | ||||||||||
|
Long-term debt
|
3,485 | (440 | ) |
(b)
|
3,045 | ||||||||
|
Asset retirement obligation
|
144 | (39 | ) |
(a)
|
105 | ||||||||
|
Deferred taxes
|
1,076 | (37 | ) |
(a)
|
1,039 | ||||||||
|
Total long-term liabilities
|
4,748 | (530 | ) | 4,218 | |||||||||
|
Commitments and contingencies
|
|||||||||||||
|
Stockholders’ equity:
|
|||||||||||||
|
Common stock
|
1 | — | 1 | ||||||||||
|
Additional paid-in capital
|
1,528 | — | 1,528 | ||||||||||
|
Treasury stock
|
(16 | ) | — | (16 | ) | ||||||||
|
Accumulated other comprehensive income (loss)
|
(4 | ) | — | (4 | ) | ||||||||
|
Retained earnings
|
1,410 | 413 |
(a)
|
1,823 | |||||||||
|
Total stockholders’ equity
|
2,919 | 413 | 3,332 | ||||||||||
|
Total liabilities and stockholders’ equity
|
$ | 8,743 | $ | (312 | ) | $ | 8,431 | ||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
2
NEWFIELD EXPLORATION COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share data)
|
Year Ended December 31, 2012
|
|||||||||||||||||||||
|
Historical
Consolidated
|
China (f)
|
Malaysia
Disposition (c)
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||||||||||||
|
Oil, gas and NGL revenues
|
$ | 2,567 | $ | (86 | ) | $ | (1,005 | ) | $ | — | $ | 1,476 | |||||||||
|
Operating expenses:
|
|||||||||||||||||||||
|
Lease operating
|
514 | (7 | ) | (101 | ) | — | 406 | ||||||||||||||
|
Production and other taxes
|
344 | (18 | ) | (259 | ) | — | 67 | ||||||||||||||
|
Depreciation, depletion and amortization
|
955 | (21 | ) | (251 | ) | — | 683 | ||||||||||||||
|
General and administrative
|
218 | — | (7 | ) | 2 |
(e)
|
213 | ||||||||||||||
|
Ceiling test impairment
|
1,488 | — | — | — | 1,488 | ||||||||||||||||
|
Other
|
15 | — | — | — | 15 | ||||||||||||||||
|
Total operating expenses
|
3,534 | (46 | ) | (618 | ) | 2 | 2,872 | ||||||||||||||
|
Income (loss) from operations
|
(967 | ) | (40 | ) | (387 | ) | (2 | ) | (1,396 | ) | |||||||||||
|
Other income (expense):
|
|||||||||||||||||||||
|
Interest expense
|
(205 | ) | — | — | — | (205 | ) | ||||||||||||||
|
Capitalized interest
|
68 | — | — | — | 68 | ||||||||||||||||
|
Commodity derivative income (expense)
|
120 | — | — | — | 120 | ||||||||||||||||
|
Other
|
(4 | ) | — | 2 | (2 | ) | |||||||||||||||
| (21 | ) | — | 2 | — | (19 | ) | |||||||||||||||
|
Income (loss) before income taxes
|
(988 | ) | (40 | ) | (385 | ) | (2 | ) | (1,415 | ) | |||||||||||
|
Income tax provision (benefit)
|
196 | (12 | ) | (146 | ) | (549 | ) |
(d)
|
(511 | ) | |||||||||||
|
Net income (loss) from continuing operations
|
$ | (1,184 | ) | $ | (28 | ) | $ | (239 | ) | $ | 547 | $ | (904 | ) | |||||||
|
Earnings (loss) per share:
|
|||||||||||||||||||||
|
Basic – Income (loss) from continuing operations
|
$ | (8.80 | ) | $ | (6.70 | ) | |||||||||||||||
|
Diluted – Income (loss) from continuing operations
|
$ | (8.80 | ) | $ | (6.70 | ) | |||||||||||||||
|
Weighted average number of shares outstanding for basic earnings per share
|
135 | 135 | |||||||||||||||||||
|
Weighted average number of shares outstanding for diluted earnings per share
|
135 | 135 | |||||||||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
3
NEWFIELD EXPLORATION COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share data)
|
Year Ended December 31, 2011
|
|||||||||||||||||||||
|
Historical
Consolidated
|
China (f)
|
Malaysia
Disposition (c)
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||||||||||||
|
Oil, gas and NGL revenues
|
$ | 2,471 | $ | (82 | ) | $ | (647 | ) | $ | — | $ | 1,742 | |||||||||
|
Operating expenses:
|
|||||||||||||||||||||
|
Lease operating
|
453 | (5 | ) | (90 | ) | — | 358 | ||||||||||||||
|
Production and other taxes
|
330 | (20 | ) | (242 | ) | — | 68 | ||||||||||||||
|
Depreciation, depletion and amortization
|
767 | (20 | ) | (126 | ) | — | 621 | ||||||||||||||
|
General and administrative
|
185 | (1 | ) | (4 | ) | 3 |
(e)
|
183 | |||||||||||||
|
Total operating expenses
|
1,735 | (46 | ) | (462 | ) | 3 | 1,230 | ||||||||||||||
|
Income from operations
|
736 | (36 | ) | (185 | ) | (3 | ) | 512 | |||||||||||||
|
Other income (expense):
|
|||||||||||||||||||||
|
Interest expense
|
(175 | ) | — | — | — | (175 | ) | ||||||||||||||
|
Capitalized interest
|
82 | — | — | — | 82 | ||||||||||||||||
|
Commodity derivative expense
|
195 | — | — | — | 195 | ||||||||||||||||
|
Other
|
2 | — | — | — | 2 | ||||||||||||||||
| 104 | — | — | — | 104 | |||||||||||||||||
|
Income (loss) before income taxes
|
840 | (36 | ) | (185 | ) | (3 | ) | 616 | |||||||||||||
|
Income tax provision (benefit)
|
301 | (10 | ) | (73 | ) | — | 218 | ||||||||||||||
|
Net income (loss) from continuing operations
|
$ | 539 | $ | (26 | ) | $ | (112 | ) | $ | (3 | ) | $ | 398 | ||||||||
|
Earnings (loss) per share:
|
|||||||||||||||||||||
|
Basic – Income (loss) from continuing operations
|
$ | 4.03 | $ | 2.98 | |||||||||||||||||
|
Diluted – Income (loss) from continuing operations
|
$ | 3.99 | $ | 2.95 | |||||||||||||||||
|
Weighted average number of shares outstanding for basic earnings per share
|
134 | 134 | |||||||||||||||||||
|
Weighted average number of shares outstanding for diluted earnings per share
|
135 | 135 | |||||||||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
4
NEWFIELD EXPLORATION COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share data)
|
Year Ended December 31, 2010
|
|||||||||||||||||||||
|
Historical
Consolidated
|
China (f)
|
Malaysia
Disposition (c)
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||||||||||||
|
Oil, gas and NGL revenues
|
$ | 1,883 | $ | (57 | ) | $ | (399 | ) | $ | — | $ | 1,427 | |||||||||
|
Operating expenses:
|
|||||||||||||||||||||
|
Lease operating
|
326 | (6 | ) | (56 | ) | — | 264 | ||||||||||||||
|
Production and other taxes
|
126 | (9 | ) | (73 | ) | — | 44 | ||||||||||||||
|
Depreciation, depletion and amortization
|
644 | (17 | ) | (110 | ) | — | 517 | ||||||||||||||
|
General and administrative
|
156 | (1 | ) | (5 | ) | 1 |
(e)
|
151 | |||||||||||||
|
Ceiling test and other impairments
|
7 | — | — | — | 7 | ||||||||||||||||
|
Total operating expenses
|
1,259 | (33 | ) | (244 | ) | 1 | 983 | ||||||||||||||
|
Income from operations
|
624 | (24 | ) | (155 | ) | (1 | ) | 444 | |||||||||||||
|
Other income (expense):
|
|||||||||||||||||||||
|
Interest expense
|
(156 | ) | — | — | — | (156 | ) | ||||||||||||||
|
Capitalized interest
|
58 | — | — | — | 58 | ||||||||||||||||
|
Commodity derivative income
|
316 | — | — | — | 316 | ||||||||||||||||
|
Other
|
(13 | ) | — | 5 | — | (8 | ) | ||||||||||||||
| 205 | — | 5 | — | 210 | |||||||||||||||||
|
Income (loss) before income taxes
|
829 | (24 | ) | (150 | ) | (1 | ) | 654 | |||||||||||||
|
Income tax provision (benefit)
|
306 | (7 | ) | (56 | ) | — | 243 | ||||||||||||||
|
Net income (loss) from continuing operations
|
$ | 523 | $ | (17 | ) | $ | (94 | ) | $ | (1 | ) | $ | 411 | ||||||||
|
Earnings (loss) per share:
|
|||||||||||||||||||||
|
Basic – Income (loss) from continuing operations
|
$ | 3.97 | $ | 3.12 | |||||||||||||||||
|
Diluted – Income (loss) from continuing operations
|
$ | 3.91 | $ | 3.07 | |||||||||||||||||
|
Weighted average number of shares outstanding for basic earnings per share
|
132 | 132 | |||||||||||||||||||
|
Weighted average number of shares outstanding for diluted earnings per share
|
134 | 134 | |||||||||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
5
NEWFIELD EXPLORATION COMPANY
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The unaudited pro forma condensed consolidated balance sheet is based on the unaudited September 30, 2013 Newfield balance sheet and includes pro forma adjustments to give effect to the Malaysia Sale as if it occurred on September 30, 2013.
The unaudited pro forma condensed consolidated statements of operations for the nine month period ended September 30, 2013, and the comparative nine month period ended September 30, 2012 have not been presented as the financial statements for those periods previously reported the Malaysia Business as a discontinued operation in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013.
The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010 are based on the audited statements of operations of Newfield Exploration Company, and include pro forma adjustments to give effect to the Malaysia Sale as if the transaction had occurred on January 1, 2010 as well as the adjustments necessary to reflect our China business as discontinued operations for the years ended December 31, 2012, 2011 and 2010.
The unaudited pro forma condensed consolidated statements of operations exclude the impact of non-recurring expenses Newfield has incurred or will incur as a result of the sale of the Malaysia Business. Such non-recurring costs primarily consist of legal fees, contract service fees and the gain on the sale of the Malaysia Business.
Newfield believes that the estimates and assumptions used in the preparation of these unaudited pro forma condensed consolidated financial statements provide a reasonable basis for presenting the effects directly attributable to the transactions described above.
Note 2. Pro Forma Adjustments – Unaudited Pro Forma Condensed Consolidated Balance Sheet
The following adjustments were made in the preparation of the unaudited pro forma condensed consolidated balance sheet as of September 30, 2013:
|
(a)
|
Adjustment to remove the historical book value of the assets and liabilities of the Malaysia Business, reflect the proceeds from the sale of $896 million less transactional costs of $7 million and the associated gain to retained earnings.
|
|
(b)
|
Represents adjustments resulting from the assumed reduction of $440 million borrowings under our credit facility using the proceeds from the sale.
|
Note 3. Pro Forma Adjustments – Unaudited Pro Forma Condensed Consolidated Statements of Operations
The following adjustments were made in the preparation of the unaudited pro forma condensed consolidated statement of operations:
|
(c)
|
Represents adjustments to remove historical revenues, operating expenses and other specifically identifiable expenses for the Malaysia Business as a result of the sale. Income tax expense on the historical revenues and operating expenses associated with the sale of the Malaysia Business were calculated using the 38% statutory Malaysia income tax rate.
|
|
(d)
|
In the fourth quarter of 2012 we decided to repatriate earnings from our foreign operations, which resulted in our inception-to-date earnings and profits of our Malaysia Business being taxed both in the U.S and the local country.
|
|
(e)
|
Represents adjustments resulting from corporate costs that were previously allocated to the Malaysia Business during the period presented. As these costs would have been incurred regardless of the sale of the Malaysia business, they are added back as pro forma adjustments.
|
|
(f)
|
Represents adjustments for our international operations in China that were classified as discontinued operations during the second quarter of 2013.
|
6