Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - American Standard Energy Corp. | v313506_8ka.htm |
| EX-99.1 - EXHIBIT 99.1 - American Standard Energy Corp. | v313506_ex99-1.htm |
Exhibit 99.2
American Standard Energy Corp. and Subsidiary
Pro Forma Combined Balance Sheet
(Unaudited)
| December 31, 2011 | ||||||||||||
| The Company Historical | Pro Forma Adjustments | Pro Forma Combined | ||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 733,049 | $ | - | $ | 733,049 | ||||||
| Oil and gas sales receivables | 1,556,414 | - | 1,556,414 | |||||||||
| Oil and gas sales receivables - related parties | 639,714 | - | 639,714 | |||||||||
| Other current assets | 308,208 | - | 308,208 | |||||||||
| Total current assets | 3,237,385 | - | 3,237,385 | |||||||||
| Oil and natural gas properties at cost, successful efforts method | ||||||||||||
| Proved | 76,919,789 | - | 76,919,789 | |||||||||
| Unproved | 25,212,635 | 35,000,000 | a | 84,144,922 | ||||||||
| 13,500,000 | a | |||||||||||
| 8,500,000 | b | |||||||||||
| 1,500,000 | a | |||||||||||
| 432,287 | c | |||||||||||
| Accumulated depletion and depreciation | (14,310,006 | ) | - | (14,310,006 | ) | |||||||
| Total oil and natural gas properties, net | 87,822,418 | 58,932,287 | 146,754,705 | |||||||||
| Debt issuance costs, net of amortization of $69,184 | 720,175 | - | 720,175 | |||||||||
| Prepaid drilling costs | 2,590,356 | - | 2,590,356 | |||||||||
| Deposit on properties with affiliate | 1,500,000 | (1,500,000 | ) | a | - | |||||||
| Other assets, net of accumulated depreciation of $7,380 | 24,403 | - | 24,403 | |||||||||
| Total assets | $ | 95,894,737 | $ | 57,432,287 | $ | 153,327,024 | ||||||
| Current liabilities: | ||||||||||||
| Accounts payable - trade | $ | 3,373,262 | $ | 432,287 | c | $ | 3,805,549 | |||||
| Accounts payable and accrued liabilities - related parties | 8,574,017 | - | 8,574,017 | |||||||||
| Accrued withholding tax | 1,338,308 | - | 1,338,308 | |||||||||
| Commodity derivatives | 243,996 | - | 243,996 | |||||||||
| Other accrued liabilities | 36,665 | - | 36,665 | |||||||||
| Total current liabilities | 13,566,248 | 432,287 | 13,998,535 | |||||||||
| Term loan and revolving credit facility, net of discount of $9,907,057 | 7,262,832 | 35,000,000 | a | 48,462,497 | ||||||||
| 8,500,000 | b | |||||||||||
| (2,300,335 | ) | b | ||||||||||
| Asset retirement obligations | 394,177 | - | 394,177 | |||||||||
| Commodity derivatives | 421,964 | - | 421,964 | |||||||||
| Warrant derivative liabilities | 15,298,658 | - | 15,298,658 | |||||||||
| Total liabilities | 36,943,879 | 41,631,952 | 78,575,831 | |||||||||
| Stockholders' equity | ||||||||||||
| Preferred stock, $.001 par value; 1,000,000 shares authorized; None issued and outstanding | - | - | - | |||||||||
| Common stock, $.001 par value; 100,000,000 shares authorized, 40,178,060 shares issued and 39,971,367 shares outstanding at December 31, 2011 | 40,178 | 5,000 | a | 45,178 | ||||||||
| Additional paid-in capital | 75,504,243 | 13,495,000 | a | 91,299,578 | ||||||||
| 2,300,335 | b | |||||||||||
| Treasury stock, 206,693 shares at cost | (1,116,514 | ) | - | (1,116,514 | ) | |||||||
| Accumulated deficit | (15,477,049 | ) | - | (15,477,049 | ) | |||||||
| Total stockholders' equity | 58,950,858 | 15,800,335 | 74,751,193 | |||||||||
| Total liabilities and stockholders' equity | $ | 95,894,737 | $ | 57,432,287 | $ | 153,327,024 | ||||||
See accompanying notes to unaudited pro forma combined financial statements.
| 1 |
American Standard Energy Corp. and Subsidiary
Pro Forma Combined Statement of Operations
(Unaudited)
| Year Ended December 31, 2011 | ||||||||||||||||
| The Company Historical | The XOG Properties Historical | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
| Operating revenues: | ||||||||||||||||
| Oil and natural gas revenues | $ | 12,407,774 | $ | 4,924,000 | $ | - | $ | 17,331,774 | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Oil and natural gas production costs | 3,067,087 | 3,301,000 | - | 6,368,087 | ||||||||||||
| General and administrative | 16,387,633 | - | - | 16,387,633 | ||||||||||||
| Impairment of oil and natural gas properties | 1,027,552 | - | - | 1,027,552 | ||||||||||||
| Depreciation, depletion and amortization | 3,313,250 | - | - | 3,313,250 | ||||||||||||
| Accretion of discount on asset retirement obligations | 20,951 | - | - | 20,951 | ||||||||||||
| Total operating costs and expenses | 23,816,473 | 3,301,000 | - | 27,117,473 | ||||||||||||
| Income (loss) from operations | (11,408,699 | ) | 1,623,000 | - | (9,785,699 | ) | ||||||||||
| Other income (expense), net: | ||||||||||||||||
| Realized and unrealized loss on commodity derivatives | (670,659 | ) | - | - | (670,659 | ) | ||||||||||
| Interest expense, including accretion of debt discount | (1,184,862 | ) | - | (3,508,515 | ) | d | (5,460,155 | ) | ||||||||
| (766,778 | ) | e | ||||||||||||||
| Unrealized expense on warrant derivatives | (409,668 | ) | - | - | (409,668 | ) | ||||||||||
| Total other income (expense), net | (2,265,189 | ) | - | (4,275,293 | ) | (6,540,482 | ) | |||||||||
| Income (loss) before income taxes | (13,673,888 | ) | 1,623,000 | (4,275,293 | ) | (16,326,181 | ) | |||||||||
| Income tax benefit | - | - | - | - | ||||||||||||
| Net income (loss) | $ | (13,673,888 | ) | $ | 1,623,000 | $ | (4,275,293 | ) | $ | (16,326,181 | ) | |||||
| Weighted average common shares outstanding | 35,413,541 | - | 5,000,000 | 40,413,541 | ||||||||||||
| Loss per share basic and diluted | $ | (0.39 | ) | $ | (0.40 | ) | ||||||||||
See accompanying notes to unaudited pro forma combined financial statements.
| 2 |
American Standard Energy Corp. and Subsidiary
Notes to Unaudited Pro Forma Combined Financial Statement
1. Basis of Presentation:
The financial statements included in this report present the pro forma combined balance sheet and pro forma combined results of operations reflecting the pro forma effect of certain transactions, discussed in detail below, entered into by American Standard Energy Corp. (the “Company”).
The unaudited pro forma combined balance sheet as of December 31, 2011 included in this report gives effect to the Company’s March 5, 2012 acquisition of certain oil and natural gas properties (referred to as the “XOG Properties”) acquired from XOG Operating LLC (“XOG”) and Geronimo Holding Corporation (“Geronimo” and together with XOG, the “Sellers”).
The unaudited pro forma combined balance sheet as of December 31, 2011 is derived from:
| · | the historical consolidated financial statements of the Company; |
| · | the purchase price allocation of oil and natural gas properties acquired from the Sellers. |
The unaudited pro forma combined statement of operations for the year ended December 31, 2011 included in this report gives effect to the Company’s acquisition of the XOG Properties for the period January 1, 2011 through December 31, 2011.
The unaudited pro forma combined statement of operations for the year ended December 31, 2011 is derived from:
| · | the historical consolidated financial statements of the Company; |
| · | the historical statements of revenues and direct operating expenses of certain oil and natural gas properties acquired by the Company from the Sellers; |
| · | pro forma adjustments based on assumptions we have deemed appropriate. |
The transaction and the related adjustments are described in the accompanying notes. In the opinion of Company management, all adjustments have been made that are necessary to present fairly, in accordance with Regulation S-X, the pro forma combined financial statements.
The unaudited pro forma combined balance sheet and unaudited pro forma combined state of operations are presented for illustrative purposes only, and does not purport to be indicative of the financial position or results of operations that would actually have occurred if the transactions described had occurred as presented in such statements or that may be obtained in the future. In addition, future results may vary significantly from the results reflected in such statement due to factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2011 and elsewhere in the Company’s reports and filings with the Securities and Exchange Commission (“SEC”). The unaudited pro forma statement of operations should be read in conjunction with our historical consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011.
The pro forma statements should also be read in conjunction with the historical financial statements and the notes thereto of the acquired businesses reflected therein as filed by the Company with the SEC in this amended 8-K/A.
2. Pro Forma Adjustments
The unaudited pro forma combined financial statements reflect the following adjustments:
| a. | On March 5, 2012, the Company purchased the XOG Properties from the Sellers in exchange for the delivery by the Company to the Sellers of $10 million in cash, including a $1.5 million cash deposit previously paid by the Company, a note in the principal amount of $35,000,000 made by the Company in favor of Geronimo and 5,000,000 shares of the common stock of the Company. The value assigned to the common stock was $2.70 per share, the closing price of the Company’s common stock on March 5, 2012. | |
| The Company allocated all of the purchase price of the acquisition to unproved properties as the producing properties acquired were deemed to be uneconomic at the time of acquisition and when their associated fair value was assessed. Thus, no adjustment for depletion and amortization has been reflected in the pro forma financial statements. |
| b. | To record the pro-rata portion of the $20,000,000 Pentwater note that was used for funding the acquisition and to the related note payable pro-rata discount from the issuance of warrants to the note holder. On February 10, 2012, the Company and ASEN 2, Corp. (“ASEN 2”), a wholly-owned subsidiary of the Company formed on January 25, 2012, closed on a Note and Warrant Purchase Agreement dated February 9, 2012, (the “Purchase Agreement”), with Pentwater Equity Opportunities Master Fund Ltd. and PWCM Master Fund Ltd., (“Pentwater”) in connection with a $20 million private financing. The initial funding made by Pentwater to ASEN 2 on February 10, 2012 (“Pentwater Closing Date”), was in the amount of $10 million. The second funding for an additional $10 million, which closed on March 5, 2012, occurred concurrently with the closing of the purchase and sale agreement by and among the Company, Geronimo and XOG. Of the $10 million funded on March 5, 2012, $8.5 million was used to fund the XOG Properties acquisition. |
| c. | To accrue for purchase price adjustments from the effective date to the closing date. |
| d. | To record interest expense associated with $35.0 million note issued as partial consideration in the acquisition of the XOG Properties, using an interest rate of 7%. |
| e. | To record interest expense and accretion of debt discount associated with the Pentwater note payable. |
| 3 |