Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TELLURIAN INC. /DE/ | santos-8kxfiling.htm |
| EX-99.2 - PRESS RELEASE - TELLURIAN INC. /DE/ | exhibit992pressrelease.htm |
Exhibit 99.1
MAGELLAN PETROLEUM CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Introduction
On May 25, 2012 (the “Closing Date”), Magellan Petroleum Corporation ( “Magellan”) completed an asset swap agreement (the “Santos SA”) entered into by its wholly owned subsidiary Magellan Petroleum (N.T.) Pty Ltd (“Magellan NT”) with Santos QNT Pty Ltd (“Santos QNT”) and Santos Limited (collectively the “Santos Entities”). The net cash proceeds from the Santos SA were approximately $24.4 million as of the Closing Date. Including adjustments of approximately $3.6 million, the total cash proceeds from the Santos SA will be approximately $28.0 million.
Following the completion of the Santos SA, Magellan has become the sole owner of the Palm Valley Interests and the Dingo Interests, and the Santos Entities have become the sole owner of the Mereenie Interests. In accordance with the terms of the Santos SA, the transaction is deemed to be effective as of July 1, 2011.
The unaudited pro forma condensed combined financial statements presented below are based on the historical condensed consolidated financial statements of Magellan give effect to the disposal of the Mereenie Interests and acquisition of the Palm Valley Interests and the Dingo Interests as contemplated in the Santos SA. It is assumed that the Santos SA gives effect to the condensed combined statement of operations as of July 1, 2010, and gives effect to the condensed combined balance sheet as of March 31, 2012. The pro forma adjustments below are (1) considered directly attributable to the Santos SA, (2) factually supportable, and (3) with respect to the condensed combined statement of operations, expected to have a continuing impact on the consolidated results.
The unaudited pro forma condensed combined 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 Magellan closed on the Santos SA during the specified periods. The unaudited pro forma condensed combined financial statements, including the notes thereto, have been derived and should be read in conjunction with, the historical consolidated financial statements of Magellan, which are incorporated in this document by reference, included in its Annual Report on Form 10-K for the year ended June 30, 2011, and its unaudited condensed financial statements included in its Form 10-Q for the three, six, and nine month period ending September 30, 2011, December 31, 2011, and March 31, 2012, respectively.
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MAGELLAN PETROLEUM CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET as of March 31, 2012
Magellan as Reported | Pro Forma | ||||||||||||||
Acquisition (a) | Disposition (b) | Combined | |||||||||||||
ASSETS | (In thousands) | ||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 17,210 | $ | (2,927 | ) | (c) | $ | 27,314 | (d) | $ | 41,597 | ||||
Accounts receivable - trade (net of allowance for doubtful accounts of $66,702) | 2,375 | — | — | 2,375 | |||||||||||
Accounts receivable - working interest partners | 1,012 | 561 | (c) | 3,006 | (d) | 4,579 | |||||||||
Inventories | 591 | — | — | 591 | |||||||||||
Assets held for sale | 1,755 | — | (1,755 | ) | — | ||||||||||
Prepaid assets | 774 | — | — | 774 | |||||||||||
Other assets | 1,329 | — | — | 1,329 | |||||||||||
Total current assets | 25,046 | (2,366 | ) | 28,565 | 51,245 | ||||||||||
Property and equipment, net (successful efforts method): | |||||||||||||||
Proved oil and gas properties | 34,031 | 2,808 | (c) | — | 36,839 | ||||||||||
Less accumulated depletion, depreciation and amortization | (11,309 | ) | — | — | (11,309 | ) | |||||||||
Unproved oil and gas properties | 3,220 | 1,394 | (c) | — | 4,614 | ||||||||||
Wells in progress | 6,485 | — | — | 6,485 | |||||||||||
Land, buildings and equipment (net of accumulated depreciation of $3,984,985) | 989 | 354 | (c) | — | 1,343 | ||||||||||
Net property and equipment | 33,416 | 4,556 | — | 37,972 | |||||||||||
Other non-current assets: | |||||||||||||||
Securities available for sale | 167 | — | — | 167 | |||||||||||
Goodwill | 4,695 | — | (4,288 | ) | (e) | 407 | |||||||||
Other long term assets | 242 | — | — | 242 | |||||||||||
Total other non-current assets | 5,104 | — | (4,288 | ) | 816 | ||||||||||
Total assets | $ | 63,566 | $ | 2,190 | $ | 24,277 | $ | 90,033 | |||||||
LIABILITIES AND EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Short term line of credit | $ | 650 | $ | — | $ | — | $ | 650 | |||||||
Current portion of note payable | 504 | — | — | 504 | |||||||||||
Accounts payable | 2,643 | — | — | 2,643 | |||||||||||
Income tax payable | — | — | — | (f) | 0 | ||||||||||
Accrued liabilities | 3,350 | — | — | 3,350 | |||||||||||
Liability related to asset held for sale | 7,202 | — | (7,202 | ) | — | ||||||||||
Total current liabilities | 14,349 | — | (7,202 | ) | 7,147 | ||||||||||
Long term liabilities: | |||||||||||||||
Note payable | 498 | — | — | 498 | |||||||||||
Other long term liabilities | 245 | — | — | 245 | |||||||||||
Asset retirement obligations | 5,430 | 2,190 | (c) | — | 7,620 | ||||||||||
Contingent consideration payable | 4,279 | — | — | 4,279 | |||||||||||
Total long term liabilities | 10,452 | 2,190 | — | 12,642 | |||||||||||
Commitments and contingencies | |||||||||||||||
Equity: | |||||||||||||||
Total equity attributable to Magellan | 38,765 | — | 31,479 | (g) | 70,244 | ||||||||||
Total equity | 38,765 | — | 31,479 | 70,244 | |||||||||||
Total liabilities and equity | $ | 63,566 | $ | 2,190 | $ | 24,277 | $ | 90,033 | |||||||
See notes to the unaudited pro forma condensed combined financial statements.
2
MAGELLAN PETROLEUM CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THE YEAR ENDED June 30, 2011
Magellan as Reported | Pro Forma | ||||||||||||||
Acquisition (a) | Disposition (b) | Combined | |||||||||||||
(In thousands) | |||||||||||||||
REVENUES: | |||||||||||||||
Oil production | $ | 11,815 | $ | — | $ | (6,842 | ) | $ | 4,973 | ||||||
Gas production | 1,796 | 1,762 | — | 3,558 | |||||||||||
Other | 4,565 | 2,730 | (1,971 | ) | 5,324 | ||||||||||
Total revenues | 18,176 | 4,492 | (8,813 | ) | 13,855 | ||||||||||
OPERATING EXPENSES: | |||||||||||||||
Lease operating | 9,247 | 955 | (5,677 | ) | 4,525 | ||||||||||
Depletion, depreciation, amortization, and accretion | 2,891 | 968 | (990 | ) | 2,869 | ||||||||||
Exploration | 2,854 | 27 | (671 | ) | 2,210 | ||||||||||
General and administrative | 16,307 | 110 | (350 | ) | 16,067 | ||||||||||
Loss on Evans Shoal Deposit | 15,893 | — | — | 15,893 | |||||||||||
Gain on sale of assets | (969 | ) | (23 | ) | 4 | (988 | ) | ||||||||
Impairment loss | 173 | — | — | 173 | |||||||||||
Total operating expenses | 46,396 | 2,037 | (7,684 | ) | 40,749 | ||||||||||
Loss from operations | (28,220 | ) | 2,455 | (1,129 | ) | (26,894 | ) | ||||||||
Other income (expense) | |||||||||||||||
Interest income, net | 923 | 16 | (15 | ) | 924 | ||||||||||
Total other income | 923 | 16 | (15 | ) | 924 | ||||||||||
Loss before income tax benefit | (27,297 | ) | 2,471 | (1,144 | ) | (25,970 | ) | ||||||||
Income tax expense | 5,141 | — | (f) | — | (f) | 5,141 | |||||||||
Net loss after income tax benefit | (32,438 | ) | 2,471 | (1,144 | ) | (31,111 | ) | ||||||||
Net (loss) income attributable to non-controlling interest in subsidiaries | (5 | ) | — | — | (5 | ) | |||||||||
Net loss attributable to Magellan Petroleum Corporation | $ | (32,443 | ) | $ | 2,471 | $ | (1,144 | ) | $ | (31,106 | ) | ||||
Average number of basic and dilutive common shares outstanding | 52,398,936 | 52,398,936 | |||||||||||||
Net loss per basic and dilutive common shares attributable to Magellan Petroleum Corporation common shareholders | $ | (0.62 | ) | $ | (0.59 | ) | |||||||||
See notes to the unaudited pro forma condensed combined financial statements.
3
MAGELLAN PETROLEUM CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED March 31, 2012
Magellan as Reported | Pro Forma | ||||||||||||||
Acquisition (a) | Disposition (b) | Combined | |||||||||||||
(In thousands) | |||||||||||||||
REVENUES: | |||||||||||||||
Oil production | $ | 10,641 | $ | — | $ | (5,909 | ) | $ | 4,732 | ||||||
Gas production | 1,148 | 1,050 | — | 2,198 | |||||||||||
Other | (46 | ) | (25 | ) | 18 | (53 | ) | ||||||||
Total revenues | 11,743 | 1,025 | (5,891 | ) | 6,877 | ||||||||||
OPERATING EXPENSES: | |||||||||||||||
Lease operating | 10,412 | 1,026 | (5,790 | ) | 5,648 | ||||||||||
Depletion, depreciation, amortization, and accretion | 1,242 | 115 | (273 | ) | 1,084 | ||||||||||
Exploration | 3,619 | 32 | (432 | ) | 3,219 | ||||||||||
General and administrative | 9,083 | 107 | (38 | ) | 9,152 | ||||||||||
Loss (gain) on sale of assets | (4,029 | ) | (27 | ) | (205 | ) | (4,261 | ) | |||||||
Total operating expenses | 20,327 | 1,253 | (6,738 | ) | 14,842 | ||||||||||
Loss from operations | (8,584 | ) | (228 | ) | 847 | (7,965 | ) | ||||||||
Other income (expense) | |||||||||||||||
Interest income, net | 357 | 5 | (12 | ) | 350 | ||||||||||
Other expenses | 5 | — | — | 5 | |||||||||||
Total other income | 362 | 5 | (12 | ) | 355 | ||||||||||
Loss before income tax benefit | (8,222 | ) | (223 | ) | 835 | (7,610 | ) | ||||||||
Income tax expense | — | — | (f) | — | (f) | ||||||||||
Net loss after income tax benefit | (8,222 | ) | (223 | ) | 835 | (7,610 | ) | ||||||||
Net (loss) income attributable to non-controlling interest in subsidiaries | 15 | — | — | 15 | |||||||||||
Net loss attributable to Magellan Petroleum Corporation | $ | (8,207 | ) | $ | (223 | ) | $ | 835 | $ | (7,595 | ) | ||||
Average number of basic and dilutive common shares outstanding | 53,592,958 | 53,592,958 | |||||||||||||
Magellan Petroleum Corporation common shareholders Net loss per basic and dilutive common shares attributable to | $ | (0.15 | ) | $ | (0.14 | ) | |||||||||
See notes to the unaudited pro forma condensed combined financial statements.
4
MAGELLAN PETROLEUM CORPORATION
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1 - Unaudited Pro Forma Adjustments
The Company will finalize amounts recognized in terms of the Santos SA as information necessary to complete the analysis is obtained. The Company expects to finalize these amounts during fiscal 2012, which will remain subject to change until finalized.
(a) | Reflects the acquisition of assets, liabilities, and results from operations for the periods presented related to the Palm Valley Interests and the Dingo Interests in accordance with the terms of the Santos SA. |
(b) | Reflects the elimination of assets, liabilities, and results from operations for the periods presented related to the disposal of the Mereenie Interests in accordance with the terms of the Santos SA. |
(c) | The Company has determined that the purchase of the Palm Valley Interests qualifies as a business combination and that the purchase of the Dingo Interests qualifies as an asset acquisition. The following table summarizes the values of the assets acquired and liabilities assumed as of the Closing Date based on the most recent preliminary purchase price allocation as of May 25, 2012. |
Palm Valley Interests | Dingo Interests | Total | |||||||
(In thousands) | |||||||||
Accounts receivable - working interest partners | $ | 558 | $ | 3 | $ | 561 | |||
Proved oil and gas properties | 2,808 | — | 2,808 | ||||||
Unproved oil and gas properties | — | 1,394 | 1,394 | ||||||
Land, buildings and equipment | 354 | — | 354 | ||||||
Total assets | 3,720 | 1,397 | 5,117 | ||||||
Asset retirement obligations | 2,056 | 134 | 2,190 | ||||||
Net assets acquired | $ | 1,664 | $ | 1,263 | $ | 2,927 | |||
Cash consideration | $ | 1,664 | $ | 1,263 | $ | 2,927 | |||
The Company has not recognized a contingent asset related to the series of contingent payments (the “Bonus Amounts”) set out in the Santos SA as such amounts are not reasonable assured.
(d) | The net cash proceeds from the Santos SA, as of the Closing Date, in addition to the purchase price adjustment to be finalized during fiscal 2012, is summarized in the following table: |
Mereenie Interests | Palm Valley Interests | Dingo Interests | Total | |||||||||
(In thousands) | ||||||||||||
Cash consideration received/(paid) | $ | 27,314 | $ | (1,664 | ) | $ | (1,263 | ) | $ | 24,387 | ||
Purchase price adjustment | 3,006 | 558 | 3 | 3,567 | ||||||||
Total net consideration received for asset swap transaction | $ | 30,320 | $ | (1,106 | ) | $ | (1,260 | ) | $ | 27,954 | ||
(e) | Represents the preliminary allocation of goodwill as of the Closing Date of the representative fair value of the Mereenie Interests as a separate portion of a reporting segment of the Company. |
(f) | The Company has estimated that it has sufficient U.S. state net operating losses, state net operating loss carry forwards, and Australian capital loss tax credits available, and as a result no income tax effect on the gain from the disposition of the Mereenie Interests have been provided for. |
(g) | Represents the estimated gain related to the Santos SA, net of income taxes. |
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