Attached files
| file | filename |
|---|---|
| EX-31.1 - EX-31.1 - Gastar Exploration Inc. | gst-ex311_8.htm |
| EX-31.2 - EX-31.2 - Gastar Exploration Inc. | gst-ex312_9.htm |
| EX-2.3 - EX-2.3 - Gastar Exploration Inc. | gst-ex23_174.htm |
| EX-2.6 - EX-2.6 - Gastar Exploration Inc. | gst-ex26_173.htm |
| EX-32.1 - EX-32.1 - Gastar Exploration Inc. | gst-ex321_7.htm |
| 10-Q - 10-Q - Gastar Exploration Inc. | gst-10q_20160331.htm |
Exhibit 99.1
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On February 19, 2016, Gastar Exploration Inc. (the “Company” or “Gastar”) entered into a Purchase and Sale Agreement, by and between the Company and THQ Appalachia I, LLC to sell substantially all of its producing assets and proved reserves and a significant portion of its undeveloped acreage in the Appalachian Basin for approximately $80.0 million, subject to certain adjustments and customary closing conditions, (the “Appalachian Basin Sale”). The Appalachian Basin Sale had an effective date of January 1, 2016 and was completed on April 8, 2016. After certain adjustments, cash proceeds from the Appalachian Basin Sale were approximately $76.6 million, subject to certain additional adjustments.
The following unaudited pro forma financial information is derived from the historical financial statements of the Company and reflects the estimated impact of the Appalachian Basin Sale. The Unaudited Pro Forma Combined Balance Sheet of Gastar as of March 31, 2016 has been prepared assuming the Appalachian Basin Sale was consummated on March 31, 2016. The Unaudited Pro Forma Combined Statement of Operations of Gastar for the three months ended March 31, 2016 has been prepared assuming the Appalachian Basin Sale was consummated on January 1, 2016. These unaudited pro forma combined financial statements should be read in conjunction with the notes hereto and the consolidated financial statements and notes thereto of Gastar filed on Form 10-K for the year ended December 31, 2015.
The unaudited pro forma financial information is not indicative of the financial position or results of operations of Gastar which would have actually occurred if the transaction had occurred at the dates presented or which may be obtained in the future. In addition, future results may vary significantly from the results reflected in such statements due to normal oil and natural gas production declines, reductions in prices paid for oil or natural gas, future acquisitions or dispositions and other factors.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF MARCH 31, 2016
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Pro Forma Adjustments |
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Gastar Historical |
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Appalachian Basin Sale |
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Pro Forma |
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(in thousands, except share data) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
26,950 |
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$ |
(3,427 |
) |
(a)(e) |
$ |
23,523 |
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Accounts receivable, net of allowance for doubtful accounts of $0, respectively |
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11,905 |
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— |
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11,905 |
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Commodity derivative contracts |
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7,767 |
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— |
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7,767 |
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Prepaid expenses |
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4,956 |
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— |
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4,956 |
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Total current assets |
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51,578 |
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(3,427 |
) |
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48,151 |
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PROPERTY, PLANT AND EQUIPMENT: |
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Oil and natural gas properties, full cost method of accounting: |
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Unproved properties, excluded from amortization |
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103,221 |
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(20,876 |
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(b) |
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82,345 |
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Proved properties |
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1,292,089 |
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(58,116 |
) |
(b) |
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1,233,973 |
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Total natural gas and oil properties |
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1,395,310 |
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(78,992 |
) |
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1,316,318 |
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Furniture and equipment |
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3,072 |
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— |
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3,072 |
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Total property, plant and equipment |
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1,398,382 |
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(78,992 |
) |
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1,319,390 |
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Accumulated depreciation, depletion and amortization |
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(1,115,342 |
) |
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— |
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(1,115,342 |
) |
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Total property, plant and equipment, net |
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283,040 |
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(78,992 |
) |
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204,048 |
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OTHER ASSETS: |
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Commodity derivative contracts |
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8,309 |
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— |
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8,309 |
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Deferred charges, net |
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1,667 |
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— |
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1,667 |
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Advances to operators and other assets |
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629 |
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— |
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629 |
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Other |
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4,944 |
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— |
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4,944 |
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Total other assets |
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15,549 |
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— |
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15,549 |
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TOTAL ASSETS |
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$ |
350,167 |
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$ |
(82,419 |
) |
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$ |
267,748 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
6,942 |
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$ |
— |
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$ |
6,942 |
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Revenue payable |
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9,812 |
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(2,750 |
) |
(c) |
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7,062 |
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Accrued interest |
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10,660 |
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— |
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10,660 |
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Accrued drilling and operating costs |
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2,102 |
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— |
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2,102 |
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Advances from non-operators |
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147 |
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— |
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147 |
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Commodity derivative premium payable |
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1,723 |
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— |
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1,723 |
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Asset retirement obligation |
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89 |
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— |
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89 |
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Other accrued liabilities |
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6,053 |
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1,025 |
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(d) |
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7,078 |
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Total current liabilities |
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37,528 |
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(1,725 |
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35,803 |
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LONG-TERM LIABILITIES: |
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Long-term debt |
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496,927 |
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(80,000 |
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(e) |
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416,927 |
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Commodity derivative premium payable |
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2,339 |
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— |
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2,339 |
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Asset retirement obligation |
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6,111 |
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(694 |
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(f) |
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5,417 |
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Total long-term liabilities |
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505,377 |
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(80,694 |
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424,683 |
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Commitments and contingencies |
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STOCKHOLDERS' EQUITY: |
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Preferred stock, 40,000,000 shares authorized |
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Series A Preferred stock, par value $0.01 per share; 10,000,000 shares designated; 4,045,000 shares issued and outstanding at March 31, 2016 with liquidation preference of $25.00 per share |
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41 |
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— |
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41 |
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Series B Preferred stock, par value $0.01 per share; 10,000,000 shares designated; 2,140,000 shares issued and outstanding at March 31, 2016 with liquidation preference of $25.00 per share |
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21 |
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— |
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21 |
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Common stock, par value $0.001 per share; 275,000,000 shares authorized; 81,837,274 shares issued and outstanding at March 31, 2016 |
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82 |
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— |
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82 |
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572,867 |
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— |
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572,867 |
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Accumulated deficit |
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(765,749 |
) |
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— |
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(765,749 |
) |
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Total stockholders' equity |
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(192,738 |
) |
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— |
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(192,738 |
) |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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$ |
350,167 |
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$ |
(82,419 |
) |
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$ |
267,748 |
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See accompanying notes to unaudited pro forma combined financial statements.
GASTAR EXPLORATION INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016
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Pro Forma Adjustments |
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Gastar Historical |
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Appalachian Basin Sale |
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Pro Forma |
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(in thousands, except share and per share data) |
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REVENUES: |
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Oil and condensate |
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$ |
8,813 |
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$ |
(464 |
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(g) |
$ |
8,349 |
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Natural gas |
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4,018 |
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(2,268 |
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(g) |
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1,750 |
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NGLs |
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1,695 |
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(457 |
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(g) |
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1,238 |
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Total oil and condensate, natural gas and NGLs revenues |
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14,526 |
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(3,189 |
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11,337 |
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Gain (loss) on commodity derivatives contracts |
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285 |
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— |
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285 |
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Total revenues |
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14,811 |
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(3,189 |
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11,622 |
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EXPENSES: |
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Production taxes |
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705 |
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(323 |
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(h) |
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382 |
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Lease operating expenses |
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6,079 |
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(557 |
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(h) |
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5,522 |
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Transportation, treating and gathering |
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613 |
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(528 |
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(h) |
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85 |
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Depreciation, depletion and amortization |
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13,729 |
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(5,698 |
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(i) |
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8,031 |
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Impairment of natural gas and oil properties |
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48,497 |
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— |
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48,497 |
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Accretion of asset retirement obligation |
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105 |
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(14 |
) |
(j) |
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91 |
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General and administrative expense |
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5,675 |
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— |
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5,675 |
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Total expenses |
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75,403 |
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(7,120 |
) |
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68,283 |
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INCOME (LOSS) FROM OPERATIONS |
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(60,592 |
) |
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3,931 |
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(56,661 |
) |
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OTHER INCOME (EXPENSE): |
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Interest expense |
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(9,298 |
) |
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898 |
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(k) |
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(8,400 |
) |
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Investment and other income |
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33 |
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33 |
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INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES |
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(69,857 |
) |
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4,829 |
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(65,028 |
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Income tax benefit |
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— |
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— |
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— |
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NET INCOME (LOSS) |
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(69,857 |
) |
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4,829 |
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(65,028 |
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Dividends on preferred stock |
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(3,618 |
) |
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— |
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(3,618 |
) |
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NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS |
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$ |
(73,475 |
) |
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$ |
4,829 |
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$ |
(68,646 |
) |
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NET INCOME (LOSS) PER SHARE OF COMMON STOCK ATTRIBUTABLE TO COMMON STOCKHOLDERS: |
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Basic |
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$ |
(0.93 |
) |
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$ |
(0.87 |
) |
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Diluted |
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$ |
(0.93 |
) |
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$ |
(0.87 |
) |
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WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING: |
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Basic |
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78,788,133 |
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— |
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78,788,133 |
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Diluted |
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|
78,788,133 |
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— |
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|
78,788,133 |
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See accompanying notes to unaudited pro forma combined financial statements.
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1. |
Pro Forma Adjustments for the Appalachian Basin Sale |
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(a) |
To record cash proceeds, net of purchase price adjustments including revenue suspense funds, of $76.6 million for the Appalachian Basin Sale at March 31, 2016. |
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(b) |
To record the reduction in property, plant and equipment for the sales proceeds net of purchase price adjustments and non-recurring estimated transaction costs of approximately $1.0 million directly related to the divestiture and to reduce the property, plant and equipment balance for the related asset retirement obligation costs at March 31, 2016. |
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(c) |
To record the release of the revenue in suspense liability to the buyer at March 31, 2016. |
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(d) |
To record a liability for estimated non-recurring transaction costs directly related to the divestiture at March 31, 2016. |
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(e) |
To record the $80.0 million payment to reduce the outstanding borrowings under the revolving credit facility at March 31, 2016. Such payment was made using the cash proceeds from the Appalachian Basin Sale and other funds. |
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(f) |
To record the reduction in the asset retirement obligation liability at March 31, 2016. |
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(g) |
To record the reduction in oil and condensate, natural gas and NGLs sales revenues for the three months ended March 31, 2016. |
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(h) |
To record the reduction in direct operating expenses for the three months ended March 31, 2016. |
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(i) |
To record the reduction in DD&A expense for the three months ended March 31, 2016. |
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(j) |
To record the reduction in accretion expense on the asset retirement obligation for the three months ended March 31, 2016. |
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(k) |
To record the reduction in interest expense resulting from the repayment of borrowings outstanding for the three months ended March 31, 2016 had the Appalachian Basin Sale occurred on January 1, 2016. |