Attached files
| file | filename |
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| 8-K/A - SUN RIVER ENERGY, INC. - SUN RIVER ENERGY, INC | sunriver8ka042111.htm |
| EX-23.1 - SUN RIVER ENERGY, INC | ex231.htm |
| EX-23.2 - SUN RIVER ENERGY, INC | ex232.htm |
| EX-99.2 - SUN RIVER ENERGY, INC | ex992.htm |
Exhibit 99.3
SCHEDULE B
SUN RIVER ENERGY, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements and related notes are presented to show effects of the acquisition of the working and net revenue interests of certain properties purchased by Sun River from Katy effective February 7, 2011.
The pro forma condensed consolidated statements of operations are presented to show net income attributable to common stock as if the Acquisitions occurred effective February 7, 2011 during the entire period presented. The pro forma condensed consolidated balance sheet is based on the assumption that the Acquisitions were effective the first day at the beginning of the period.
Pro forma data are based on assumptions and include adjustments as explained in the notes to the unaudited pro forma condensed consolidated financial statements. The pro forma data are not necessarily indicative of the financial results that would have been attained had the Acquisitions occurred on the dates referenced above, and should not be viewed as indicative of operations in future periods. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the notes thereto, Sun River's Annual Report on Form 10-K for the year ended April 30, 2010, its Quarterly Report on Form 10-QSB for the quarter ended January 31, 2011, and all reports on form 8-K during the periods, and the Statement of Combined Revenues and Direct Operating Expenses included herein as
SCHEDULE A.
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Sun River Energy, Inc.
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Consolidated Balance Sheets
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(Unaudited)
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January 31, 2011
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April 30, 2010
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Proforma
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Proforma
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Sun River
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Acquisition
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Adjustments
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Proforma
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Sun River
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Acquisition
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Adjustments
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Proforma
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Assets
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Current assets
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Cash and cash equivalents
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$ | 568,189 | 568,189 | $ | 39,817 | 39,817 | ||||||||||||||||||||||||||
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Accounts receivable, net
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140,387 | 213,279 | 353,666 | - | 208,536 | 208,536 | ||||||||||||||||||||||||||
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Total current assets
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708,576 | 213,279 | 0 | 921,855 | 39,817 | 208,536 | 0 | 248,353 | ||||||||||||||||||||||||
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Oil and gas properties—net, based on full cost method of
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accounting
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6,944,995 | 12,972,623 | 11,189 | 19,928,807 | 998,781 | 12,972,623 | (44,607 | ) | 13,926,797 | |||||||||||||||||||||||
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Property and equipment—net
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98,210 | 98,210 | - | - | ||||||||||||||||||||||||||||
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Goodwill
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286,605 | 286,605 | - | - | ||||||||||||||||||||||||||||
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Deposits
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464,496 | (450,000 | ) | 14,496 | - | - | ||||||||||||||||||||||||||
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Total assets
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$ | 8,502,882 | 12,735,902 | 11,189 | 21,249,973 | $ | 1,038,598 | 13,181,159 | (44,607 | ) | 14,175,150 | |||||||||||||||||||||
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Liabilities and stockholders' equity (deficit)
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Current liabilities
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Accounts payable and accrued expenses
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$ | 2,300,213 | 220,276 | 2,520,489 | $ | 1,639,948 | 636,045 | 2,275,993 | ||||||||||||||||||||||||
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Accounts payable - related party
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80,403 | 240,000 | 320,403 | 320,000 | 320,000 | |||||||||||||||||||||||||||
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Asset retirement obligations – current
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16,660 | 8,263 | 24,923 | - | 8,733 | 8,733 | ||||||||||||||||||||||||||
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Notes payable
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717,685 | 717,685 | 628,616 | 628,616 | ||||||||||||||||||||||||||||
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Notes payable - related party
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4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||||||||||||||||||||
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Convertible notes payable – related party
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1,000,000 | 1,000,000 | 575,679 | 575,679 | ||||||||||||||||||||||||||||
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Total current liabilities
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4,114,961 | 4,220,276 | 248,263 | 8,583,500 | 2,844,243 | 4,636,045 | 328,733 | 7,809,021 | ||||||||||||||||||||||||
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Asset retirement obligations
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22,625 | 90,381 | 113,006 | - | 92,513 | 92,513 | ||||||||||||||||||||||||||
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Total liabilities
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4,137,586 | 4,220,276 | 338,644 | 8,696,506 | 2,844,243 | 4,636,045 | 421,246 | 7,901,534 | ||||||||||||||||||||||||
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Commitments and contingencies
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Stockholders’ equity (deficit)
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Preferred Stock, 8,750,000 shares authorized,
par value $.01 no shares issued and outstanding
at January 31, 2011 and April 30, 2010, respectively
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8% Series A cumulative convertible preferred stock, par value $.01; authorized 1,250,000 shares, 147,806 and 0 shares issued as of January 31, 2011 and April 30, 2010, respectively.
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953 | 556 | 1,509 | - | 556 | 556 | ||||||||||||||||||||||||||
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Common stock — $.0001 par value; authorized, 100,000,000 shares; 26,027,005 shares at January 31, 2011 and 20,957,705 issued shares at April 30, 2010
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2,444 | 158 | 2,602 | 1,938 | 158 | 2,096 | ||||||||||||||||||||||||||
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Additional paid-in-capital
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16,856,017 | 8,521,909 | 25,377,926 | 7,416,145 | 8,971,909 | 16,388,054 | ||||||||||||||||||||||||||
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Accumulated deficit
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(12,023,683 | ) | (6,997 | ) | (327,455 | ) | (12,358,135 | ) | (8,753,293 | ) | (427,509 | ) | (465,853 | ) | (9,646,655 | ) | ||||||||||||||||
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Common stock to be delivered for debt
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(470,435 | ) | (470,435 | ) | (470,435 | ) | (470,435 | ) | ||||||||||||||||||||||||
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Total stockholders’ equity (deficit)
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4,365,296 | 8,515,626 | (327,455 | ) | 12,553,467 | (1,805,645 | ) | 8,545,114 | (465,853 | ) | 6,273,616 | |||||||||||||||||||||
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Total liabilities and stockholders' equity (deficit)
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$ | 8,502,882 | 12,735,902 | 11,189 | 21,249,973 | $ | 1,038,598 | 13,181,159 | (44,607 | ) | 14,175,150 | |||||||||||||||||||||
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The accompanying notes are an integral part of these financial statements.
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SUN RIVER ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
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For the Three Months Ended
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For the Nine Months Ended
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For the Year Ended
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January 31, 2011
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January 31, 2011
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April 30, 2010
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Proforma
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Proforma
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Proforma
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Sun River
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Acquisition
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Adjustments
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Proforma
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Sun River
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Acquisition
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Adjustments
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Proforma
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Sun River
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Acquisition
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Adjustments
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Proforma
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Revenues
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$ | - | $ | - | $ | - | $ | - | $ | - | $ | 213,279 | $ | - | $ | 213,279 | $ | - | $ | 208,536 | $ | - | $ | 208,536 | ||||||||||||||||||||||||
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Operational expenses:
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Depreciation, depletion and amortization
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20,088 | 20,088 | 47,784 | 79,647 | 127,431 | 540 | 135,443 | 135,983 | ||||||||||||||||||||||||||||||||||||||||
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Consulting expenses
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338,502 | 338,502 | 1,357,474 | 1,357,474 | 1,049,227 | 1,049,227 | ||||||||||||||||||||||||||||||||||||||||||
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Litigation expense
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1,748 | 1,748 | 42,333 | 42,333 | 150,000 | 150,000 | ||||||||||||||||||||||||||||||||||||||||||
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Lease operating expense and taxes
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11,085 | 5,974 | 17,059 | 21,190 | 153,609 | 174,799 | - | 547,156 | 547,156 | |||||||||||||||||||||||||||||||||||||||
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General and administrative
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1,365,008 | 1,365,008 | 2,243,552 | 2,243,552 | 1,140,035 | 1,140,035 | ||||||||||||||||||||||||||||||||||||||||||
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Total operational expenses
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1,736,431 | 5,974 | - | 1,742,405 | 3,712,333 | 153,609 | 79,647 | 3,945,589 | 2,339,802 | 547,156 | 135,443 | 3,022,401 | ||||||||||||||||||||||||||||||||||||
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Net loss from operations
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(1,736,431 | ) | (5,974 | ) | - | (1,742,405 | ) | (3,712,333 | ) | 59,670 | (79,647 | ) | (3,732,310 | ) | (2,339,802 | ) | (338,620 | ) | (135,443 | ) | (2,813,865 | ) | ||||||||||||||||||||||||||
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Other income (expenses)
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Interest income
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485 | 485 | 485 | 485 | 920 | 920 | ||||||||||||||||||||||||||||||||||||||||||
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Interest expense
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(56,401 | ) | (82,603 | ) | (139,004 | ) | (108,542 | ) | (247,808 | ) | (356,350 | ) | (114,318 | ) | (330,410 | ) | (444,728 | ) | ||||||||||||||||||||||||||||||
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Forgiveness of debt
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- | - | - | - | 75,773 | 75,773 | ||||||||||||||||||||||||||||||||||||||||||
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Gain on settlement of litigation
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- | - | 550,000 | 550,000 | - | |||||||||||||||||||||||||||||||||||||||||||
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Total other income (expenses)
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(55,916 | ) | - | (82,603 | ) | (138,519 | ) | 441,943 | - | (247,808 | ) | 194,135 | (37,625 | ) | - | (330,410 | ) | (368,035 | ) | |||||||||||||||||||||||||||||
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Net loss
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(1,792,347 | ) | (5,974 | ) | (82,603 | ) | (1,880,924 | ) | (3,270,390 | ) | 59,670 | (327,455 | ) | (3,538,175 | ) | (2,377,427 | ) | (338,620 | ) | (465,853 | ) | (3,181,900 | ) | |||||||||||||||||||||||||
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Less dividends on preferred shares
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(25,966 | ) | (22,222 | ) | (48,188 | ) | (25,966 | ) | (66,667 | ) | (92,633 | ) | (25,966 | ) | (88,889 | ) | (114,855 | ) | ||||||||||||||||||||||||||||||
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Net loss applicable to common stockholders
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$ | (1,818,313 | ) | $ | (5,974 | ) | $ | (104,825 | ) | $ | (1,929,112 | ) | $ | (3,296,356 | ) | $ | 59,670 | $ | (394,122 | ) | $ | (3,630,808 | ) | $ | (2,403,393 | ) | $ | (338,620 | ) | $ | (554,742 | ) | $ | (3,296,755 | ) | |||||||||||||
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Per share information
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Net loss per common share
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Basic and diluted
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(0.08 | ) | (0.00 | ) | (0.07 | ) | (0.15 | ) | 0.04 | (0.15 | ) | (0.14 | ) | (0.21 | ) | (0.17 | ) | |||||||||||||||||||||||||||||||
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Weighted average number
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of common stock outstanding
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24,138,397 | 1,583,710 | 25,722,107 | 22,120,108 | 1,583,710 | 23,703,818 | 17,479,385 | 1,583,710 | 19,063,095 | |||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
SUN RIVER ENERGY, INC AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The unaudited pro forma statement of operations for the year ended April 30, 2010, is based on the financial statements of Sun River Energy, Inc. for the year ended April, 2010, the audited statement of combined revenues and direct operating expenses for properties purchased from Katy, and the adjustments and assumptions described below.
The unaudited pro forma statement of operations for the three and nine months ended January 31, 20111 and the unaudited pro forma balance sheet as of January 31, 2011 are based on the unaudited financial statements of Sun River as of and for the three and nine months ended January 31, 2011, the unaudited statement of combined revenues and direct operating expenses for properties purchased from Katy, for the three and nine months ended January 31, 2011, and the adjustments and assumptions described below.
PRO FORMA ADJUSTMENTS
The unaudited pro forma statements of operations reflect the following adjustments:
a. Record incremental depletion and amortization expense ("DD&A") using the units-of-production method, resulting from the purchase of properties from Katy, based on the reserve report from Cawley, Gillespie & Associates, Inc. dated November 30, 2010.
b. Record interest expense associated with debt of approximately $4 million incurred under Sun River's note due to the acquisition to fund a portion of the purchase price. Applicable interest rates on the note were 8 percent for all applicable periods.
c. Record the 1,587,710 shares issued with the purchase of the Katy properties. 200,000 shares were valued at $2.25 (the closing price when the deposit was agreed to). 1,387,710 shares were valued at $4.75 based on the closing price on the date of the Amended Purchase and Sale Agreement.
d. Record the dividends payable associated with the issuance of the preferred stock.
e. Record the accretion associated with the asset recovery obligation.
The unaudited pro forma balance sheet reflects the following adjustments:
1. Record the purchase price of properties from Katy funded with:
. $1 million raised by the issuance of Series A cumulative convertible preferred stock, net after commissions would have been 55,556 shares.
. $4 million raised by the issuance of a note payable to Katy, at a stated interest rate of 8% per annum
. The issuance of 1,583,710 restricted common stock shares.
2. Record the associated plugging and abandonment costs associated with the Katy properties.
3. Record the associated receivable and payable derived from the direct revenues and expenses of the Katy properties.
4. Record the associated interest expense with the note payable.
5. Record the associated dividends due from the preferred stock issued to raise the $1 million in cash due on the acquisition of the Katy properties.
The following table sets forth certain unaudited pro forma information concerning Sun River's proved oil and gas reserves as of January 31, 2011 giving effect to the purchase of properties from Katy as if they had occurred on February 7, 2011. There are numerous uncertainties inherent in estimating the quantities of proved reserves and projection of future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact.
Sun River Energy, Inc.
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Gas
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Oil
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Total Proved Reserves:
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(MCF)
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(BLS)
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Proved Developed
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8,889,967 | 1,235 | ||||||
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Proved Developed - Behind Pipe
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18,791,000 | 6,400 | ||||||
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Proved Undeveloped
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167,369,000 | 53,300 | ||||||
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Production
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(54,476 | ) | (115 | ) | ||||
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Balance at April 30, 2010
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194,995,491 | 60,820 | ||||||
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Proved Developed
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8,939,000 | 1,300 | ||||||
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Proved Developed - Behind Pipe
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18,791,000 | 6,400 | ||||||
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Proved Undeveloped
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167,369,000 | 53,300 | ||||||
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Production
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(51,754 | ) | (90 | ) | ||||
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Balance at January 31, 2011
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195,047,246 | 60,910 | ||||||
The following table sets forth unaudited pro forma information concerning the discounted future net cash flows from proved oil and gas reserves of Sun River Energy as of January 31, 2011, net of income tax expense, and giving effect to the acquisition of the Katy properties as if they had occurred on November 30, 2011. There has been no provision for income tax expense due to net operating loss carry-forwards available to Sun River. Cash flows relating to the Acquisitions are based on Cawley, Gillespie & Associates, Inc., evaluation of reserves and on information provided by Sun River. The information should be viewed only as a form of standardized disclosure concerning possible future cash flows that would result under the assumptions used but should not be viewed as indicative of fair market value. Reference should be made to Sun River's financial statements for the fiscal year ended April 30, 2010, and the Statement of Combined Revenues and Direct Operating Expenses included herein as Schedule A, for a discussion of the assumptions used in preparing the information presented.
Sun River Energy, Inc.
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As of
January 31, 2011
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Future cash flows
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$ | 118,551,900 | ||
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Severance taxes
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$ | 8,736,400 | ||
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Ad Valorem taxes
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$ | 2,196,300 | ||
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Future operating expenses
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$ | 22,638,500 | ||
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Future development costs
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$ | 29,129,700 | ||
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Future net cash flows
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$ | 55,851,000 | ||
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10% discount factor
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$ | (39,291,500 | ) | |
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Standardized measure of dscounted future net cash inflows
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$ | 16,559,500 | ||
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Estimated future development cost anticipated
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for following two years on existing properties
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$ | 29,082,158 | ||