Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - GRAN TIERRA ENERGY INC. | v469573_8k.htm |
| EX-2.4 - EXHIBIT 2.4 - GRAN TIERRA ENERGY INC. | v469573_ex2-4.htm |
| EX-2.3 - EXHIBIT 2.3 - GRAN TIERRA ENERGY INC. | v469573_ex2-3.htm |
| EX-2.2 - EXHIBIT 2.2 - GRAN TIERRA ENERGY INC. | v469573_ex2-2.htm |
| EX-2.1 - EXHIBIT 2.1 - GRAN TIERRA ENERGY INC. | v469573_ex2-1.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On June 30, 2017, Gran Tierra Energy Inc. (“Gran Tierra”), through two of its indirect subsidiaries (the “Selling Subsidiaries”), completed the previously announced disposition of Gran Tierra’s assets in Brazil, including its 100% working interest in the Tiê Field and all of Gran Tierra’s interest in exploration rights and obligations held pursuant to concession agreements granted by the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (“ANP”) of Brazil. Pursuant to the terms of a Share and Loan Purchase Agreement dated February 5, 2017 by and among the Selling Subsidiaries and Maha Energy AB (“Maha”) and subsequent amending agreements dated May 30, 2017, June 22, 2017 and June 26, 2017, Gran Tierra completed the disposition of its Brazil business unit for a purchase price of US$35 million which, after certain interim closing adjustments, resulted in cash consideration paid to the Selling Subsidiaries of approximately US$38 million. On February 7, 2017, Maha paid Gran Tierra a deposit of US$3.5 million.
The accompanying unaudited pro forma consolidated balance sheet as at March 31, 2017, and the unaudited pro forma consolidated statements of operations for the three months ended March 31, 2017, and the year ended December 31, 2016, (the “Pro Forma Statements”) have been prepared in compliance with the requirements of SEC Regulation S-X using accounting policies in accordance with generally accepted accounting principles in the United States of America (“USGAAP”). Accounting policies used in the preparation of the Pro Forma Statements are consistent with those disclosed in the audited consolidated financial statements of Gran Tierra as at and for the year ended December 31, 2016 (the "Annual Financial Statements") and the unaudited consolidated financial statements as at for the three months ended March 31, 2017 (the "Interim Financial Statements").
The note disclosure requirements of annual consolidated financial statements provide additional disclosures to that required for pro forma consolidated financial statements. The Pro Forma Statements have been prepared from the Interim Financial Statements and the Annual Financial Statements, and should be read in conjunction with the Interim Financial Statements and the Annual Financial Statements.
The accompanying unaudited condensed pro forma consolidated balance sheet as of March 31, 2017, has been prepared to give effect to the divestiture as if it had occurred on March 31, 2017. The unaudited condensed pro forma consolidated statements of operations for the three months ended March 31, 2017, and the year ended December 31, 2016 have been prepared to give effect to the divestiture as if it had occurred on January 1, 2016.
In the opinion of Gran Tierra’s management, these Pro Forma Statements include all material adjustments to be in accordance with USGAAP. The notes to the Pro Forma Statements provide a discussion of how such adjustments were derived and presented in the Pro Forma Statements. The Pro Forma Statements are presented for illustrative purposes only and may not be indicative of the results of operations that would have occurred if the events reflected therein had been in effect on the dates indicated.
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Balance Sheet (Unaudited)
As at March 31, 2017
(Thousands of U.S. Dollars)
| Gran Tierra | Proforma Adjustments | Note 2 | Proforma | |||||||||||
| ASSETS | ||||||||||||||
| Current Assets | ||||||||||||||
| Cash and cash equivalents | $ | 26,716 | $ | 37,771 | (a)(b) | $ | 64,487 | |||||||
| Restricted cash and cash equivalents | 7,663 | — | 7,663 | |||||||||||
| Accounts receivable | 46,912 | (1,581 | ) | (b) | 45,331 | |||||||||
| Derivatives | 1,425 | — | 1,425 | |||||||||||
| Inventory | 7,285 | (75 | ) | (b) | 7,210 | |||||||||
| Taxes receivable | 23,284 | (225 | ) | (b) | 23,059 | |||||||||
| Other prepaids | 4,404 | (342 | ) | (b) | 4,062 | |||||||||
| Total Current Assets | 117,689 | 35,548 | 153,237 | |||||||||||
| Oil and gas properties (using the full cost method of accounting) | ||||||||||||||
| Proved | 460,937 | (37,095 | ) | (b) | 423,842 | |||||||||
| Unproved | 620,045 | (18,456 | ) | (b) | 601,589 | |||||||||
| Total Oil and Gas Properties | 1,080,982 | (55,551 | ) | 1,025,431 | ||||||||||
| Other capital assets | 6,314 | (442 | ) | (b) | 5,872 | |||||||||
| Total Property, Plant and Equipment | 1,087,296 | (55,993 | ) | 1,031,303 | ||||||||||
| Other Long-Term Assets | ||||||||||||||
| Deferred tax assets | 100,260 | — | 100,260 | |||||||||||
| Other long-term assets | 24,467 | — | 24,467 | |||||||||||
| Goodwill | 102,581 | — | 102,581 | |||||||||||
| Total Other Long Term Assets | 227,308 | — | 227,308 | |||||||||||
| Total Assets | $ | 1,432,293 | $ | (20,445 | ) | $ | 1,411,848 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Current Liabilities | ||||||||||||||
| Accounts payable and accrued liabilities | $ | 112,414 | $ | (9,828 | ) | (a)(b) | $ | 102,586 | ||||||
| Taxes payable | 38,210 | — | 38,210 | |||||||||||
| Asset retirement obligation | 1,214 | (512 | ) | (b) | 702 | |||||||||
| Total Current Liabilities | 151,838 | (10,340 | ) | 141,498 | ||||||||||
| Long-term liabilities | ||||||||||||||
| Long-term debt | 193,159 | — | 193,159 | |||||||||||
| Deferred tax liabilities | 36,061 | — | 36,061 | |||||||||||
| Asset retirement obligation | 42,960 | (1,282 | ) | (b) | 41,678 | |||||||||
| Other long-term liabilities | 11,332 | (1,061 | ) | (b) | 10,271 | |||||||||
| Total Long-Term Liabilities | 283,512 | (2,343 | ) | 281,169 | ||||||||||
| Shareholders' Equity | ||||||||||||||
| Common stock | 10,303 | — | 10,303 | |||||||||||
| Additional paid in capital | 1,343,365 | — | 1,343,365 | |||||||||||
| Deficit | (356,725 | ) | (7,762 | ) | (a) | (364,487 | ) | |||||||
| Total Shareholders' Equity | 996,943 | (7,762 | ) | 989,181 | ||||||||||
| Total Liabilities and Shareholders' Equity | $ | 1,432,293 | $ | (20,445 | ) | $ | 1,411,848 | |||||||
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Statement of Operations (Unaudited)
For the Three Months Ended March 31, 2017
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
| Gran Tierra | Proforma Adjustments | Note 2 | Proforma | |||||||||||
| OIL AND NATURAL GAS SALES | $ | 94,659 | $ | (4,195 | ) | (c) | $ | 90,464 | ||||||
| EXPENSES | ||||||||||||||
| Operating | 23,937 | (784 | ) | (c) | 23,153 | |||||||||
| Transportation | 6,942 | (176 | ) | (c) | 6,766 | |||||||||
| Depletion, depreciation and accretion | 26,593 | (1,213 | ) | (c) | 25,380 | |||||||||
| Asset impairment | 283 | — | 283 | |||||||||||
| General and administrative | 8,712 | (318 | ) | (c) | 8,394 | |||||||||
| Equity tax | 1,224 | — | 1,224 | |||||||||||
| Foreign exchange gain | (1,847 | ) | (200 | ) | (c) | (2,047 | ) | |||||||
| Financial instruments gain | (5,439 | ) | — | (5,439 | ) | |||||||||
| Interest expense | 3,095 | — | 3,095 | |||||||||||
| 63,500 | (2,691 | ) | 60,809 | |||||||||||
| INTEREST INCOME | 408 | (1 | ) | (c) | 407 | |||||||||
| INCOME BEFORE INCOME TAX | 31,567 | (1,505 | ) | 30,062 | ||||||||||
| INCOME TAX (EXPENSE) RECOVERY | ||||||||||||||
| Current | (7,417 | ) | 159 | (c) | (7,258 | ) | ||||||||
| Deferred | (11,379 | ) | — | (11,379 | ) | |||||||||
| NET INCOME | $ | 12,771 | $ | (1,346 | ) | $ | 11,425 | |||||||
| NET INCOME PER SHARE - BASIC AND DILUTED | $ | 0.03 | $ | 0.03 | ||||||||||
| Weighted average shares outstanding - basic | 399,007,086 | 399,007,086 | ||||||||||||
| Weighted average shares outstanding - diluted | 399,045,114 | 399,045,114 | ||||||||||||
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Statement of Operations (Unaudited)
For the Year Ended December 31, 2016
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
| Gran Tierra | Proforma Adjustments | Note 2 | Proforma | |||||||||||
| OIL AND NATURAL GAS SALES | $ | 289,269 | $ | (8,397 | ) | (c) | $ | 280,872 | ||||||
| EXPENSES | ||||||||||||||
| Operating | 86,925 | (2,149 | ) | (c) | 84,776 | |||||||||
| Transportation | 31,776 | (429 | ) | (c) | 31,347 | |||||||||
| Depletion, depreciation and accretion | 139,535 | (3,819 | ) | (c) | 135,716 | |||||||||
| Asset impairment | 616,649 | (71,143 | ) | (c)(d) | 545,506 | |||||||||
| General and administrative | 33,218 | (992 | ) | (c) | 32,226 | |||||||||
| Transaction | 7,325 | — | 7,325 | |||||||||||
| Severance | 1,319 | (128 | ) | (c) | 1,191 | |||||||||
| Equity tax | 3,098 | — | 3,098 | |||||||||||
| Foreign exchange gain | (1,469 | ) | (638 | ) | (c) | (2,107 | ) | |||||||
| Financial instruments loss | 10,279 | — | 10,279 | |||||||||||
| Other gain | (929 | ) | — | (929 | ) | |||||||||
| Interest expense | 14,145 | — | 14,145 | |||||||||||
| 941,871 | (79,298 | ) | 862,573 | |||||||||||
| INTEREST INCOME | 2,368 | (274 | ) | (c) | 2,094 | |||||||||
| LOSS BEFORE INCOME TAX | (650,234 | ) | 70,627 | (579,607 | ) | |||||||||
| INCOME TAX (EXPENSE) RECOVERY | ||||||||||||||
| Current | (20,122 | ) | 245 | (c) | (19,877 | ) | ||||||||
| Deferred | 204,791 | 432 | (c) | 205,223 | ||||||||||
| NET LOSS | $ | (465,565 | ) | $ | 71,304 | $ | (394,261 | ) | ||||||
| NET LOSS PER SHARE - BASIC AND DILUTED | $ | (1.45 | ) | $ | (1.23 | ) | ||||||||
| Weighted average shares outstanding - basic and diluted | 320,851,838 | 320,851,838 | ||||||||||||
Gran Tierra Energy Inc.
Notes to the Pro Forma Statements (Unaudited)
(Expressed in U.S. Dollars, unless otherwise indicated)
1. Overview
On June 30, 2017, Gran Tierra through the Selling Subsidiaries, completed disposition of Gran Tierra’s assets in Brazil, including its 100% working interest in the Tiê Field and all of Gran Tierra’s interest in exploration rights and obligations held pursuant to concession agreements granted by the ANP of Brazil. Pursuant to the terms of a Share and Loan Purchase Agreement dated February 5, 2017 by and among the Selling Subsidiaries and Maha and subsequent amending agreements dated May 30, 2017, June 22, 2017 and June 26, 2017, Gran Tierra completed the disposition of its Brazil business unit for a purchase price of US$35 million which, after certain interim closing adjustments, resulted in cash consideration paid to the Selling Subsidiaries of approximately US$38 million.
2. Pro Forma Adjustments
| (a) | To adjust for the net cash proceeds of US$38.0 million received from the sale, including a deposit of US$3.5 million received on February 7, 2017. The adjustment reflects the estimated after tax loss on the sale as if it had occurred on March 31, 2017. The actual loss to be recognized will be based on the carrying amounts of the assets sold and liabilities assumed or released on the date of the divestiture and may be materially different than the loss noted herein. Pro forma adjustments also reflect a US$4.7 million cash payment received from Maha reflecting the covenant by Maha to finalize the documentation and other arrangements to assume liabilities associated with letter of credit arrangements and the release of Gran Tierra from any liabilities in connection with the same, which payment will be reimbursable to Maha once such covenant is discharged. The pro forma presentations included herein should not be relied upon as indicative of the actual loss to be recorded. . |
| (b) | To adjust for assets sold and liabilities assumed or released as part of the divestiture. |
| (c) | To eliminate production revenue and direct expenses related to Gran Tierra’s Brazil business unit. |
| (d) | To eliminate a US$71.1 million ceiling test impairment loss related to Gran Tierra’s Brazil cost center for the year ended December 31, 2016. |