Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TRANSATLANTIC PETROLEUM LTD. | tat-8k_20160229.htm |
| EX-2.1 - EX-2.1 - TRANSATLANTIC PETROLEUM LTD. | tat-ex21_6.htm |
| EX-10.1 - EX-10.1 - TRANSATLANTIC PETROLEUM LTD. | tat-ex101_7.htm |
| EX-99.1 - EX-99.1 - TRANSATLANTIC PETROLEUM LTD. | tat-ex991_8.htm |
Exhibit 99.2
TRANSATLANTIC PETROLEUM LTD.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial statements give effect to the following transaction of TransAtlantic Petroleum Ltd. (“TransAtlantic” or the “Company”).
Sale of Stream Oil & Gas Ltd.
On February 29, 2016, TransAtlantic Holdings, B.C. (“TAT Holdings”), a subsidiary of TransAtlantic Petroleum Ltd. (the “Company”), entered into and closed a Share Purchase Agreement (the “Purchase Agreement”) with GBC Oil Company Ltd. (“GBC Oil”). Pursuant to the Purchase Agreement, TAT Holdings sold all of the equity interests in Stream Oil & Gas Ltd. (“Stream”), a subsidiary of TAT Holdings, to GBC Oil in exchange for (i) the future payment of $2.3 million to Raiffeisen Sh.A (“Raiffeisen”) to pay down a term loan facility (the “Term Loan Facility”) dated as of September 17, 2014 between Stream’s subsidiary, TransAtlantic Albania Ltd. (“TransAtlantic Albania”) and Raiffeisen, and (ii) the assumption of $29.2 million of liabilities owed by Stream, consisting of $23.1 million of accounts payable and accrued liabilities and $6.1 million of debt. In addition, GBC Oil issued a warrant to TAT Holdings pursuant to which TAT Holdings has the right to acquire up to 25% of the fully diluted equity interests in TransAtlantic Albania for nominal consideration at any time on or before March 1, 2019. In addition, TAT Holdings has indemnified GBC Oil and Stream for approximately $12.9 million of liabilities related to the Delvina gas operations, which may be assumed by a subsidiary of the Company, as described below.
Pursuant to the Purchase Agreement, TransAtlantic Albania executed an assignment and assumption agreement pursuant to which TransAtlantic Albania will assign its Delvina gas assets and approximately $12.9 million of associated liabilities (the “Delvina Assets and Liabilities”) to Delvina Gas Company Ltd. (“DelvinaCo”), a newly formed, wholly-owned subsidiary of the Company, to be effective immediately upon receipt of required contractual and governmental consents and the expiration of required notice periods. TAT Holdings and GBC Oil have agreed to use commercially reasonable efforts to obtain the required contractual and governmental consents for the assignment of the Delvina Assets and Liabilities. There is no assurance that TAT Holdings will be able to obtain the required contractual and governmental consents.
The Company is currently negotiating a joint venture with a third party for the purchase of a portion of DelvinaCo. There is no assurance that the Company will be able to complete a joint venture for purchase of a portion of DelvinaCo.
Basis of Presentation
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2015 is based on the historical consolidated financial statements of the Company as of September 30, 2015 after giving effect to the transaction as if the disposition had occurred on September 30, 2015. The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2015 is based on the historical consolidated financial statements of the Company after giving effect to the transaction as if the disposition had occurred on January 1, 2015. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2014 is based on the historical consolidated financial statements of the Company after giving effect to the transaction as if the disposition had occurred on January 1, 2014. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the Company’s historical consolidated financial statements and notes thereto in the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2015 and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
The preparation of the unaudited pro forma condensed consolidated financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates that affect the reported amounts of revenue and expenses. Actual results could differ from those estimates.
The unaudited pro forma condensed consolidated financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized had Stream not been consolidated with TransAtlantic during the periods shown. The pro forma adjustments are based on information available at the time of the preparation of these unaudited pro forma condensed consolidated financial statements.
TRANSATLANTIC PETROLEUM LTD.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2015
(Thousands of U.S. Dollars)
|
|
|
TransAtlantic Historic |
|
|
Pro Forma Adjustments |
|
|
Combined Pro Forma Amounts |
|
|||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,576 |
|
|
$ |
368 |
|
A |
$ |
10,208 |
|
|
Accounts receivable, net |
|
|
26,555 |
|
|
|
2,493 |
|
A |
|
24,062 |
|
|
Prepaid and other current assets |
|
|
25,868 |
|
|
|
6,540 |
|
A |
|
19,328 |
|
|
Assets held for sale |
|
|
27 |
|
|
|
- |
|
|
|
27 |
|
|
Total current assets |
|
|
63,026 |
|
|
|
9,401 |
|
|
|
53,625 |
|
|
Property and equipment, net |
|
|
303,253 |
|
|
|
107,732 |
|
A |
|
195,521 |
|
|
Other long-term assets |
|
|
42,637 |
|
|
|
- |
|
|
|
42,637 |
|
|
Total assets |
|
$ |
408,916 |
|
|
$ |
117,133 |
|
|
$ |
291,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
46,239 |
|
|
$ |
20,569 |
|
B |
$ |
25,670 |
|
|
Accounts payable - related party |
|
|
9,146 |
|
|
|
- |
|
C |
|
9,146 |
|
|
Other current liabilities |
|
|
34,847 |
|
|
|
6,427 |
|
D |
|
28,420 |
|
|
Liabilities held for sale |
|
|
6,506 |
|
|
|
- |
|
|
|
6,506 |
|
|
Total current liabilities |
|
|
96,738 |
|
|
|
26,996 |
|
|
|
69,742 |
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans payable |
|
|
76,849 |
|
|
|
- |
|
|
|
76,849 |
|
|
Loans payable - related party |
|
|
20,800 |
|
|
|
- |
|
|
|
20,800 |
|
|
Other long-term liabilities |
|
|
68,946 |
|
|
|
35,046 |
|
D |
|
33,900 |
|
|
Total long-term liabilities |
|
|
166,595 |
|
|
|
35,046 |
|
|
|
131,549 |
|
|
Total liabilities |
|
|
263,333 |
|
|
|
62,042 |
|
|
|
201,291 |
|
|
Shareholders' equity: |
|
|
145,583 |
|
|
|
55,091 |
|
E |
|
90,492 |
|
|
Total liabilities and shareholders' equity |
|
$ |
408,916 |
|
|
$ |
117,133 |
|
|
$ |
291,783 |
|
See accompanying notes to these unaudited pro forma condensed consolidated financial statements
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2015
(Thousands of U.S. Dollars, except per share amounts)
|
|
|
TransAtlantic Historic |
|
|
Pro Forma Adjustments |
|
|
Combined Pro Forma Amounts |
|
|||
|
Total revenues |
|
$ |
75,701 |
|
|
$ |
6,554 |
|
A |
$ |
69,147 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production |
|
|
18,319 |
|
|
|
8,260 |
|
A |
|
10,059 |
|
|
Transportation costs |
|
|
499 |
|
|
|
499 |
|
A |
|
- |
|
|
Exploration, abandonment and impairment |
|
|
21,752 |
|
|
|
13,550 |
|
A |
|
8,202 |
|
|
Cost of purchased natural gas |
|
|
1,403 |
|
|
|
- |
|
|
|
1,403 |
|
|
Seismic and other exploration |
|
|
330 |
|
|
|
2 |
|
A |
|
328 |
|
|
General and administrative |
|
|
23,558 |
|
|
|
4,560 |
|
A |
|
18,998 |
|
|
Depreciation, depletion and amortization |
|
|
29,755 |
|
|
|
1,572 |
|
A |
|
28,183 |
|
|
Accretion of asset retirement obligations |
|
|
321 |
|
|
|
44 |
|
A |
|
277 |
|
|
Total expenses |
|
|
95,937 |
|
|
|
28,487 |
|
|
|
67,450 |
|
|
Operating loss |
|
|
(20,236 |
) |
|
|
(21,933 |
) |
|
|
1,697 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other expense |
|
|
(10,300 |
) |
|
|
(689 |
) |
A |
|
(9,611 |
) |
|
Interest and other income |
|
|
2,153 |
|
|
|
1,470 |
|
A |
|
683 |
|
|
Gain on commodity derivative contracts |
|
|
25,430 |
|
|
|
- |
|
|
|
25,430 |
|
|
Foreign exchange (loss) gain |
|
|
(6,007 |
) |
|
|
861 |
|
A |
|
(6,868 |
) |
|
Total other income |
|
|
11,276 |
|
|
|
1,642 |
|
|
|
9,634 |
|
|
Loss from continuing operations before income taxes |
|
|
(8,960 |
) |
|
|
(20,291 |
) |
|
|
11,331 |
|
|
Income tax (expense) benefit |
|
|
(3,599 |
) |
|
|
2,147 |
|
A |
|
(5,746 |
) |
|
Net loss from continuing operations |
|
$ |
(12,559 |
) |
|
$ |
(18,144 |
) |
|
$ |
5,585 |
|
|
Net loss from discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net (loss) income |
|
$ |
(12,559 |
) |
|
$ |
(18,144 |
) |
|
$ |
5,585 |
|
|
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(50,279 |
) |
|
|
- |
|
|
|
(50,279 |
) |
|
Comprehensive loss |
|
$ |
(62,838 |
) |
|
$ |
(18,144 |
) |
|
$ |
(44,694 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.31 |
) |
|
|
|
|
|
$ |
0.14 |
|
|
Weighted average common shares outstanding |
|
|
40,895 |
|
|
|
|
|
|
|
40,895 |
|
|
Diluted net loss per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.31 |
) |
|
|
|
|
|
$ |
0.14 |
|
|
Weighted average common and common equivalent shares outstanding |
|
|
40,895 |
|
|
|
|
|
|
|
40,895 |
|
See accompanying notes to these unaudited pro forma condensed consolidated financial statements
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2014
(Thousands of U.S. Dollars, except per share amounts)
|
|
|
TransAtlantic Historic |
|
|
Pro Forma Adjustments |
|
|
Combined Pro Forma Amounts |
|
|||
|
Total revenues |
|
$ |
140,728 |
|
|
$ |
1,898 |
|
A |
$ |
138,830 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production |
|
|
19,999 |
|
|
|
1,806 |
|
A |
|
18,193 |
|
|
Transportation costs |
|
|
284 |
|
|
|
284 |
|
A |
|
- |
|
|
Exploration, abandonment and impairment |
|
|
19,864 |
|
|
|
- |
|
|
|
19,864 |
|
|
Cost of purchased natural gas |
|
|
2,055 |
|
|
|
- |
|
|
|
2,055 |
|
|
Seismic and other exploration |
|
|
4,285 |
|
|
|
- |
|
|
|
4,285 |
|
|
Revaluation of contingent consideration |
|
|
(2,500 |
) |
|
|
- |
|
|
|
(2,500 |
) |
|
General and administrative |
|
|
31,625 |
|
|
|
554 |
|
A |
|
31,071 |
|
|
Depreciation, depletion and amortization |
|
|
48,927 |
|
|
|
333 |
|
A |
|
48,594 |
|
|
Accretion of asset retirement obligations |
|
|
413 |
|
|
|
7 |
|
A |
|
406 |
|
|
Total expenses |
|
|
124,952 |
|
|
|
2,984 |
|
|
|
121,968 |
|
|
Operating income (loss) |
|
|
15,776 |
|
|
|
(1,086 |
) |
|
|
16,862 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other expense |
|
|
(6,213 |
) |
|
|
(169 |
) |
A |
|
(6,044 |
) |
|
Interest and other income |
|
|
1,124 |
|
|
|
- |
|
|
|
1,124 |
|
|
Gain on commodity derivative contracts |
|
|
37,454 |
|
|
|
- |
|
|
|
37,454 |
|
|
Foreign exchange (loss) gain |
|
|
(5,998 |
) |
|
|
525 |
|
A |
|
(6,523 |
) |
|
Total other income |
|
|
26,367 |
|
|
|
356 |
|
|
|
26,011 |
|
|
Income (loss) from continuing operations before income taxes |
|
|
42,143 |
|
|
|
(730 |
) |
|
|
42,873 |
|
|
Income tax (expense) benefit |
|
|
(13,047 |
) |
|
|
612 |
|
A |
|
(13,659 |
) |
|
Net income (loss) from continuing operations |
|
|
29,096 |
|
|
|
(118 |
) |
|
|
29,214 |
|
|
Net loss from discontinued operations |
|
|
(20 |
) |
|
|
- |
|
|
|
(20 |
) |
|
Net income (loss) |
|
$ |
29,076 |
|
|
$ |
(118 |
) |
|
$ |
29,194 |
|
|
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(14,325 |
) |
|
|
- |
|
|
|
(14,325 |
) |
|
Comprehensive income (loss) |
|
$ |
14,751 |
|
|
$ |
(118 |
) |
|
$ |
14,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.77 |
|
|
|
|
|
|
$ |
0.77 |
|
|
Discontinued operations |
|
$ |
- |
|
|
|
|
|
|
$ |
- |
|
|
Weighted average common shares outstanding |
|
|
37,829 |
|
|
|
|
|
|
|
37,829 |
|
|
Diluted net income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.77 |
|
|
|
|
|
|
$ |
0.77 |
|
|
Discontinued operations |
|
$ |
- |
|
|
|
|
|
|
$ |
- |
|
|
Weighted average common and common equivalent shares outstanding |
|
|
38,031 |
|
|
|
|
|
|
|
38,031 |
|
See accompanying notes to these unaudited pro forma condensed consolidated financial statements
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Unaudited Pro Forma Condensed Consolidated Balance Sheet Adjustments (As of September 30, 2015)
A – To record the removal of Stream’s asset balances as of September 30, 2015.
B – To record the removal of Stream’s $24.3 million of accounts payable and accrued liability balances as of September 30, 2015. This amount excludes $3.7 million related to the Delvina gas liabilities for which we have indemnified the buyer. Additionally, during the three months ended December 31, 2015, we recorded an additional accrued liability of $4.9 million related to the Delvina gas liabilities for which we have also indemnified the buyer.
C – Of Stream’s total accounts payable-related party balance of $3.5 million, we indemnified the buyer for all of these liabilities, which are related to the Delvina gas operations.
D – To record the removal of Stream’s other current and long-term liability balances as of September 30, 2015.
E – To record the change in retained earnings associated with the sale of Stream.
2. Description of Unaudited Pro Forma Adjustments to Condensed Consolidated Statement of Operations (Nine Months Ended September 30, 2015)
A – To record the removal of all revenues and expenses associated with the operations of Stream.
3. Description of Unaudited Pro Forma Adjustments to Condensed Consolidated Statement of Operations (Year Ended December 31, 2014)
A – To record the removal of all revenues and expenses associated with the operations of Stream.
* * * * * * *