Mid-Con Energy Partners, LP - FORM 8-K/A - EX-99.2 - April 4, 2014

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8-K/A - FORM 8-K/A - Mid-Con Energy Partners, LPd703330d8ka.htm
EX-99.1 - EX-99.1 - Mid-Con Energy Partners, LPd703330dex991.htm
EX-23.1 - EX-23.1 - Mid-Con Energy Partners, LPd703330dex231.htm

Exhibit 99.2

MID-CON ENERGY PARTNERS, LP

Pro Forma Condensed Consolidated Balance Sheet

December 31, 2013

(In thousands, except number of units)

(Unaudited)

 

                 Partnership  
     Partnership     Pro Forma     Pro Forma  
     Consolidated     Adjustments     Combined  

CURRENT ASSETS:

       

Cash and cash equivalents

    $ 1,434      $ —        $ 1,434   

Accounts receivable:

       

Oil and natural gas sales

      6,778        —          6,778   

Other

      104        —          104   

Derivative financial instruments

      153        —          153   

Prepaids and other

      191        —          191   
  

 

 

    

 

 

    

 

 

  

Total current assets

      8,660        —          8,660   
  

 

 

    

 

 

    

 

 

  

PROPERTY AND EQUIPMENT, at cost:

       

Oil and natural gas properties, successful efforts method:

       

Proved properties

      216,680        41,541  (a)(b)      258,221   

Accumulated depletion, depreciation and amortization

      (36,148 )      —          (36,148 ) 
  

 

 

    

 

 

    

 

 

  

Total property and equipment, net

      180,532        41,541        222,073   
  

 

 

    

 

 

    

 

 

  

DERIVATIVE FINANCIAL INSTRUMENTS

      48        —          48   

OTHER ASSETS

      843        —          843   
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 190,083      $ 41,541      $ 231,624   
  

 

 

    

 

 

    

 

 

  

CURRENT LIABILITIES:

       

Accounts payable

       

Trade

    $ 2,184      $ —        $ 2,184   

Related parties

      2,982        —          2,982   

Derivative financial instruments

      1,627        —          1,627   

Accrued liabilities

      432        —          432   
  

 

 

    

 

 

    

 

 

  

Total current liabilities

      7,225        —          7,225   
  

 

 

    

 

 

    

 

 

  

OTHER LONG-TERM LIABILITIES

      128        —          128   

LONG-TERM DEBT

      112,000        6,999  (a)      118,999   

ASSET RETIREMENT OBLIGATIONS

      3,942        541  (b)      4,483   

COMMITMENTS AND CONTINGENCIES

       

EQUITY

       

Partnership equity

       

General partner interest

      1,716        —          1,716   

Limited partners, 20,819,362 units issued and outstanding as of December 31, 2013

      65,072        34,001  (a)      99,073   
  

 

 

    

 

 

    

 

 

  

Total equity

      66,788        34,001        100,789   
  

 

 

    

 

 

    

 

 

  

Total liabilities and equity

    $ 190,083      $ 41,541      $ 231,624   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to pro forma financial statements

MID-CON ENERGY PARTNERS, LP

Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2013

(In thousands, except per unit data)

(Unaudited)

 

                 Partnership  
    

Partnership

    Pro Forma     Pro Forma  
     Consolidated     Adjustments     Combined  

Revenues:

  

    

Oil sales

    $ 85,080      $ 11,943 (c)    $ 97,023   

Natural gas sales

      656        —          656   

Net settlements on derivatives

      288        —          288   

Loss on unsettled derivatives, net

      (5,963 )      —          (5,963 ) 
  

 

 

    

 

 

    

 

 

  

Total revenues

      80,061        11,943        92,004   
  

 

 

    

 

 

    

 

 

  

Operating costs and expenses:

       

Lease operating expenses

      16,366        3,884 (c)      20,250   

Oil and natural gas production taxes

      3,817        763 (c)      4,580   

Impairment of proved oil and natural gas properties

      1,578        —          1,578   

Depreciation, depletion and amortization

      14,421        3,231 (d)      17,652   

Accretion of discount on asset retirement obligations

      173        22 (e)      195   

General and administrative

      12,244        —          12,244   
  

 

 

    

 

 

    

 

 

  

Total operating costs and expenses

      48,599        7,900        56,499   
  

 

 

    

 

 

    

 

 

  

Income from operations

      31,462        4,043        35,505   
  

 

 

    

 

 

    

 

 

  

Other income (expense):

       

Interest income and other

      9        —          9   

Interest expense

      (3,282 )      (191 )(f)      (3,473 ) 
  

 

 

    

 

 

    

 

 

  

Total other income (expense)

      (3,273 )      (191 )      (3,464 ) 
  

 

 

    

 

 

    

 

 

  

Net income

    $ 28,189      $ 3,852      $ 32,041   
  

 

 

    

 

 

    

 

 

  

Computation of net income per limited partner unit:

       

General partners’ interest in net income

    $ 518          547   
  

 

 

      

 

 

  

Limited partners’ interest in net income

    $ 27,671        $ 31,494   
  

 

 

      

 

 

  

Net income per limited partner unit (basic and diluted)

    $ 1.44        $ 1.52   

Weighted average limited partner units outstanding:

       

Common limited partner units (basic)

      19,234          20,734   

Common limited partner units (diluted)

      19,249          20,749   

See accompanying notes to pro forma financial statements

 

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Mid-Con Energy Partners, LP

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

1. Basis of Presentation

The unaudited pro forma condensed consolidated financial statements give pro forma effect to the acquisition of certain oil properties located in Cimarron, Love and Texas County, Oklahoma and Potter County, Texas (the “Properties”). These properties represent approximately 22% of the total asset value of Mid-Con Energy Partners, LP (the “Partnership”) and approximately 13% of the oil and gas revenues less direct operating expenses of the oil and gas assets of the Partnership at December 31, 2013. The Partnership completed this acquisition on February 28, 2014.

The unaudited pro forma condensed consolidated balance sheet of the Partnership at December 31, 2013 has been prepared giving effect to the Properties as if the acquisition had occurred on December 31, 2013. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2013 has been prepared giving effect to the acquisition of the Properties as if the acquisition had occurred on January 1, 2013.

The unaudited condensed consolidated balance sheet and the unaudited consolidated statement of operations of the Partnership for the twelve months ended December 31, 2013 are derived from the Partnership’s financial statements included in its 2013 Form 10-K filing.

The pro forma adjustments are based upon available information and certain assumptions that management of the Partnership believes are reasonable. The pro forma condensed consolidated financial statements do not purport to represent what the Partnership’s financial position or results of operations actually would have been had such transactions in fact occurred on the dates indicated or to project the Partnership’s financial position or results of operations for any future date or period.

Acquisitions

On February 28, 2014, the Partnership acquired from one of its affiliates, Mid-Con Energy III, LLC, certain oil properties located in Cimarron, Love and Texas Counties, Oklahoma and Potter County, Texas. The combined purchase price for these properties was approximately $41.0 million. The Partnership paid the aggregate purchase price with (i) approximately $7.0 million in cash, financed through borrowings under the Partnership’s revolving credit facility, and (ii) the issuance of 1,500,000 limited partner units representing limited partner interests in the Partnership, having an approximate value of $34.0 million. The value of the limited partner units issued as partial consideration for the acquisition was based on a 2.5% discount to the trailing twenty day volume weighted average price of the limited partner units. The historical results of operations of the Properties are based on the audited statement of revenues and direct operating expenses for the year ended December 31, 2013 included elsewhere in this report.

 

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2. Pro Forma Adjustments

 

(a) These adjustments give effect to the acquisition of certain oil properties for cash with funds provided by the Partnership’s credit facility and the issuance of the Partnership’s limited partner units.
(b) These adjustments reflect the increase in the estimated asset retirement obligations associated with the Properties.
(c) The pro forma oil and gas sales, lease operating expenses and oil and natural gas production taxes have been adjusted to reflect the amounts from the lease operating statements of the previous owner of the Properties.
(d) The pro forma depreciation, depletion and amortization expense has been adjusted to reflect additional expense for the Properties. The pro forma depreciation, depletion and amortization expense for the Properties was computed using the pro forma capitalized costs, pro forma production and estimated reserves.
(e) The pro forma accretion has been adjusted to reflect additional accretion of asset retirement obligations associated with the Properties.
(f) The pro forma interest expense has been adjusted to reflect the estimated additional interest associated with the acquisition of the Properties from the funds provided by the Partnership’s credit facility.

 

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Mid-Con Energy Partners, LP Reports