Attached files
| file | filename |
|---|---|
| 8-K - PetroGas Co | g7893.htm |
| EX-10.1 - PetroGas Co | ex10-1.htm |
| EX-99.3 - PetroGas Co | ex99-3.htm |
| EX-99.1 - PetroGas Co | ex99-1.htm |
Exhibit 99.2
AMERICA RESOURCES EXPLORATION INC.
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
Introduction
The following pro forma condensed financial statements of America Resources Exploration, Inc. (the “Company”) reflects preliminary estimates and assumptions based on the information available at the time of preparation, including, but not limited to, the following events that occurred subsequent to December 31, 2014, which had a material effect on the capitalization and liquidity of the Company: the acquisition by America Resources Exploration Inc. of three (3) producing leases covering 714 acres situated in Atascosa and Frio Counties, Texas, located in the Eagle Ford Shale formation - the Jane Burns “C” Lease and the Theo Rogers “A”, “C”, and “D” Lease (“Rogers and Burns Leases”).
The pro forma condensed financial statements are not necessarily indicative of what the Company’s financial position and results of operations would have been had the aforementioned transaction been completed at the date indicated. The pro forma condensed financial statements should be read in conjunction with the audited financial statements of the Company for the year ended March 31, 2014 filed with the Securities and Exchange Commission in the Company’s registration statement on Form S-1 on August 13, 2014 and the audited Statements of Revenues and Direct Operating Expenses of the Rogers and Burns Leases for the period from April 1, 2013 to March 31, 2014 and the period from April 1, 2014 to March 31, 2015.
On June 12, 2015, the Company completed the acquisition of the Rogers and Burns Leases pursuant to the Asset Purchase Agreement. As a result of the completion of this acquisition, 4 million shares of the Company’s common stock were issued to Mr. Zheng Xiangwu, which owns the Company’s largest shareholder, Rise Fast Limited. The number of shares issued to Mr. Zheng was determined by valuing the Leases at $160,000 and valuing the Company’s stock at $0.04 per share.
The pro forma adjustments to the unaudited and audited historical statements of operations are based upon currently available information and certain estimates and assumptions. The actual effect of the transactions discussed in the accompanying notes ultimately may differ from the unaudited pro forma adjustments included herein. However, management believes that the assumptions utilized to prepare the pro forma adjustments provide a reasonable basis for presenting the significant effects of the transactions as currently contemplated and that the unaudited pro forma adjustments are factually supportable, give appropriate effect to the expected impact of events that are directly attributable to the transactions, and reflect those items expected to have a continuing impact on the Company.
F-1
AMERICA RESOURCES EXPLORATION INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AS OF DECEMBER 31, 2014
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America Resources
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| Exploration Inc. |
Pro forma
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Historical
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Adjustments
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Pro forma
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 7,221 | $ | - | $ | 7,221 | ||||||
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TOTAL CURRENT ASSETS
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7,221 | - | 7,221 | |||||||||
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PROPERTY AND EQUIPMENT
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Oil and gas properties
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- | 170,000 | 170,000 | |||||||||
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Equipment
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8,565 | 8,565 | ||||||||||
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TOTAL PROPERTY AND EQUIPMENT
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8,565 | 170,000 | 178,565 | |||||||||
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TOTAL ASSETS
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$ | 15,786 | $ | 170,000 | $ | 185,786 | ||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 100 | $ | - | $ | 100 | ||||||
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Loan from director
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9,050 | - | 9,050 | |||||||||
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TOTAL CURRENT LIABILITIES
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9,150 | - | 9,150 | |||||||||
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LONG TERM LIABILITIES
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Asset Retirement Obligations
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10,000 | 10,000 | ||||||||||
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TOTAL LIABILITIES
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9,150 | 10,000 | 19,150 | |||||||||
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STOCKHOLDERS’ EQUITY
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Common stock
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8,360 | 4,000 | 12,360 | |||||||||
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Additional paid-in capital
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21,159 | 156,000 | 177,159 | |||||||||
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Accumulated deficit
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(22,883 | ) | - | (22,883 | ) | |||||||
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TOTAL STOCKHOLDERS’ EQUITY
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6,636 | 160,000 | 166,636 | |||||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 15,786 | $ | 170,000 | $ | 185,786 | ||||||
See accompanying notes to the unaudited pro forma condensed statements of operations
F-2
AMERICA RESOURCES EXPLORATION INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED MARCH 31, 2014
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America Resources
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Roger's and
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| Exploration Inc. | Theo Leases |
Pro forma
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Historical
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Acquisition
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Adjustments |
Pro forma
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Revenues
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Oil and gas sales
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$ | - | $ | 64,074 | $ | 64,074 | ||||||||||
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Costs and expenses
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Lease operating expense
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- | 31,033 | 31,033 | |||||||||||||
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Production taxes
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- | 2,515 | 2,515 | |||||||||||||
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Depreciation, depletion and amortization
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- | - | 1,431 |
{a}
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1,431 | |||||||||||
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Asset retirement obligation accretion
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- | - | 1,500 |
{b}
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1,500 | |||||||||||
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General and administrative
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57 | - | 36,000 |
{c}
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36,057 | |||||||||||
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Other
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- | - | - | |||||||||||||
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Total costs and expenses
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57 | 33,548 | 72,536 | |||||||||||||
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Income (loss) before taxes
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(57 | ) | 30,526 | (8,462 | ) | |||||||||||
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Provision for income taxes
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- | - | - | |||||||||||||
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Net income (loss)
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$ | (57 | ) | $ | 30,526 | $ | (8,462 | ) | ||||||||
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Loss per share - Basic and diluted
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||||||
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Weighted Average Number of Common Shares Outstanding: Basic and Diluted
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6,000,000 | 10,000,000 | ||||||||||||||
See accompanying notes to the unaudited pro forma condensed statements of operations
F-3
AMERICA RESOURCES EXPLORATION INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 2014 TO DECEMBER 31, 2014
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America Resources
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Roger's and
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| Exploration Inc. | Theo Leases |
Pro forma
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Historical
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Acquisition
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Adjustments
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Pro forma | |||||||||||||
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Revenues
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Oil and gas sales
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$ | - | $ | 29,786 | $ | 29,786 | ||||||||||
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Costs and expenses
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Lease operating expense
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- | 14,962 | 14,962 | |||||||||||||
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Production taxes
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- | 1,429 | 1,429 | |||||||||||||
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Depreciation, depletion and amortization
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- | - | 733 |
{a}
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733 | |||||||||||
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Asset retirement obligation accretion
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- | - | 1,125 |
{b}
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1,125 | |||||||||||
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General and administrative
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22,826 | 145 | 27,000 |
{c}
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49,971 | |||||||||||
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Other
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- | 1,000 | 1,000 | |||||||||||||
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Total costs and expenses
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22,826 | 17,536 | 69,220 | |||||||||||||
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Income (loss) before taxes
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(22,826 | ) | 12,250 | (39,434 | ) | |||||||||||
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Provision for income taxes
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- | - | - | |||||||||||||
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Net income (loss)
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$ | (22,826 | ) | $ | 12,250 | $ | (39,434 | ) | ||||||||
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Loss per share - Basic and diluted
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||||||
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Weighted Average Number of Common Shares Outstanding: Basic and Diluted
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6,908,945 | 10,908,945 | ||||||||||||||
See accompanying notes to the unaudited pro forma condensed statements of operations
F-4
AMERICA RESOURCES EXPLORATION INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
Note 1. Pro Forma Adjustments and Assumptions
Pro Forma Condensed Balance Sheet
The pro forma adjustments in the pro forma condensed balance sheet reflect the acquisition of the Rogers and Theo Leases for an acquisition value of $160,000 completed with the issuance of 4 million shares of the Company’s stock. Management has preliminarily estimated the asset retirement obligation associated with the acquired oil & gas properties to be $10,000.
Pro Forma Condensed Statements of Operations
The pro forma condensed statements of operations are prepared assuming the acquisition of the Rogers and Theo Leases had occurred on April 1, 2013. The Acquisition column represents the Revenues and Direct Operating Expenses for 99.5% of the working interest in the properties acquired in the Rogers and Theo Leases Acquisition, as described below:
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{a}
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Pro forma adjustment to reflect the depreciation, depletion and amortization for the assets acquired by America Resources Exploration, Inc. as part of the Roger’s and Theo Leases Acquisition, using the unit of production method of accounting.
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{b}
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Pro forma adjustment to reflect the accretion of asset retirement obligations for the assets acquired by America Resources Exploration, Inc. as part of the Roger’s and Theo Leases Acquisition, assuming a 15% annual accretion rate.
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{c}
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Pro forma adjustment to reflect the yearly salary of Mr. Seabourn, head geologist for the Company.
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F-5