Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Antero Resources LLC | a12-15394_18k.htm |
| EX-2.1 - EX-2.1 - Antero Resources LLC | a12-15394_1ex2d1.htm |
| EX-10.1 - EX-10.1 - Antero Resources LLC | a12-15394_1ex10d1.htm |
Exhibit 99.1
Antero Resources LLC
Unaudited Pro Forma Condensed Consolidated Financial Information
The following pro forma condensed consolidated financial information is based on the historical financial statements of Antero Resources LLC (“Antero”, or “the Company”), including certain pro forma adjustments, and has been prepared to illustrate the pro forma effect of the Company’s sale of its Arkoma Basin assets on June 29, 2012.
The unaudited pro forma consolidated statements of income for the three months ended March 31, 2012 and the years ended December 31, 2011, 2010, and 2009 assume that the sale occurred as of the beginning of the period presented. The unaudited pro form consolidated balance sheet as of March 31, 2012 is presented as if the sale had occurred as of March 31, 2012.
The unaudited pro forma condensed consolidated financial information has been prepared based upon available information and management estimates; actual amounts may differ from these estimated amounts. In preparing the pro forma information, the Company eliminated all direct expenses related to the Arkoma Basin properties, but did not adjust general and administrative expenses or interest expense. The pro forma financial information is not necessarily indicative of the financial position or results of operations that might have occurred had the distribution occurred as of the dates stated above. The pro forma adjustments are described in the notes.
The unaudited pro forma condensed consolidated financial information should be read in conjunction with the financial statements and notes and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2012 and the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.
Antero Resources LLC
Notes to Unaudited Pro Forma Consolidated Financial Statements
(1) Basis of Presentation
The accompanying unaudited pro forma consolidated financial statements give effect to the pro forma adjustments necessary to reflect the sale of Antero’s Arkoma Basin assets as if it had occurred as of the beginning of the period presented in the pro forma statements of income for the three months ended March 31, 2012 and the years ended December 31, 2011, 2010, and 2009 and as of March 31, 2012 in the pro forma balance sheet.
(2) Pro Forma Adjustments
The unaudited pro forma condensed consolidated statements of income and balance sheet reflect the effect of the following pro forma adjustments:
(a) Elimination of sales of natural gas, natural gas liquids, oil, gas gathering and processing revenue, and realized and unrealized gains or losses on commodity derivative instruments directly related to the Arkoma Basin assets. Gathering and processing revenues in 2010 and 2009 were eliminated as they were associated with Arkoma Basin midstream assets that were sold in 2010.
(b) Elimination of direct operating expenses related to the Arkoma Basin assets.
(c) Effects of the sale of the oil and gas assets and commodity hedging instruments as if the sale had occurred on March 31, 2012.
(d) The effect on owners’ equity as a result of adjustment (c).
Antero Resources LLC
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2012
|
|
|
|
|
Pro Forma |
|
|
| |
|
|
|
|
|
Adjustments |
|
Unaudited |
| |
|
|
|
|
|
for Activity of |
|
Pro Forma |
| |
|
|
|
|
|
Net Assets |
|
Balance |
| |
|
|
|
Historical |
|
Disposed |
|
Sheet |
| |
|
Assets |
|
|
|
|
|
|
| |
|
Current assets: |
|
|
|
|
|
|
| |
|
Cash and cash equivalents |
|
$ |
6,493 |
|
281,200 |
(c) |
287,693 |
|
|
Accounts receivable |
|
39,178 |
|
— |
|
39,178 |
| |
|
Notes receivable - short-term portion |
|
7,555 |
|
— |
|
7,555 |
| |
|
Accrued revenue |
|
25,870 |
|
— |
|
25,870 |
| |
|
Derivative instruments |
|
318,002 |
|
(61,676 |
)(c) |
256,326 |
| |
|
Other |
|
13,333 |
|
— |
|
13,333 |
| |
|
Total current assets |
|
410,431 |
|
219,524 |
|
629,955 |
| |
|
Property and equipment: |
|
|
|
|
|
|
| |
|
Natural gas properties, at cost (successful efforts method): |
|
|
|
|
|
|
| |
|
Unproved properties |
|
897,400 |
|
(86,658 |
)(c) |
810,742 |
| |
|
Producing properties |
|
2,663,096 |
|
(997,926 |
)(c) |
1,665,170 |
| |
|
Gathering systems and facilities |
|
89,095 |
|
— |
|
89,095 |
| |
|
Other property and equipment |
|
8,584 |
|
— |
|
8,584 |
| |
|
|
|
3,658,175 |
|
(1,084,584 |
) |
2,573,591 |
| |
|
Less accumulated depletion, depreciation, and amortization |
|
(646,675 |
) |
329,575 |
|
(317,100 |
) | |
|
Property and equipment, net |
|
3,011,500 |
|
(755,009 |
) |
2,256,491 |
| |
|
|
|
|
|
|
|
|
| |
|
Derivative instruments |
|
674,935 |
|
(66,068 |
) |
608,867 |
| |
|
Notes receivable - long-term portion |
|
4,111 |
|
— |
|
4,111 |
| |
|
Other assets, net |
|
26,961 |
|
— |
|
26,961 |
| |
|
Total assets |
|
$ |
4,127,938 |
|
(601,553 |
) |
3,526,385 |
|
|
|
|
|
|
|
|
|
| |
|
Liabilities and Equity |
|
|
|
|
|
|
| |
|
Current liabilities: |
|
|
|
|
|
|
| |
|
Accounts payable |
|
$ |
116,556 |
|
— |
|
116,556 |
|
|
Accrued liabilities |
|
43,169 |
|
— |
|
43,169 |
| |
|
Revenue distributions payable |
|
37,766 |
|
— |
|
37,766 |
| |
|
Advances from joint interest owners |
|
2,478 |
|
— |
|
2,478 |
| |
|
Current income tax liability |
|
16,500 |
|
— |
|
16,500 |
| |
|
Deferred income tax liability |
|
101,189 |
|
— |
|
101,189 |
| |
|
Total current liabilities |
|
317,658 |
|
— |
|
317,658 |
| |
|
|
|
|
|
|
|
|
| |
|
Long-term liabilities: |
|
|
|
|
|
|
| |
|
Long-term debt |
|
1,095,252 |
|
(143,000 |
)(c) |
952,252 |
| |
|
Deferred income tax liability |
|
415,801 |
|
— |
|
415,801 |
| |
|
Other long-term liabilities |
|
12,690 |
|
— |
|
12,690 |
| |
|
Total liabilities |
|
1,841,401 |
|
(143,000 |
) |
1,698,401 |
| |
|
|
|
|
|
|
|
|
| |
|
Equity: |
|
|
|
|
|
|
| |
|
Members’ equity |
|
1,460,947 |
|
— |
|
1,460,947 |
| |
|
Accumulated earnings |
|
825,590 |
|
(458,553 |
)(d) |
367,037 |
| |
|
Total equity |
|
2,286,537 |
|
(458,553 |
) |
1,827,984 |
| |
|
Total liabilities and equity |
|
$ |
4,127,938 |
|
(601,553 |
) |
3,526,385 |
|
Antero Resources LLC
Unaudited Pro Forma Consolidated Statement of Income
For the Three Months Ended March 31, 2012
(in thousands)
|
|
|
|
|
Pro Forma |
|
|
| |
|
|
|
|
|
Adjustments |
|
Unaudited |
| |
|
|
|
|
|
for Activity of |
|
Pro Forma |
| |
|
|
|
|
|
Net Assets |
|
Statement of |
| |
|
|
|
Historical |
|
Disposed |
|
Income |
| |
|
Revenue: |
|
|
|
|
|
|
| |
|
Natural gas sales |
|
$ |
73,686 |
|
(18,936 |
)(a) |
54,750 |
|
|
Natural gas liquids sales |
|
11,457 |
|
(2,269 |
)(a) |
9,188 |
| |
|
Oil sales |
|
7,342 |
|
(89 |
)(a) |
7,253 |
| |
|
Realized and unrealized gain on commodity derivative instruments |
|
283,042 |
|
(25,543 |
)(a) |
257,499 |
| |
|
Gain on sale of gathering system |
|
291,305 |
|
— |
|
291,305 |
| |
|
Total revenue |
|
666,832 |
|
(46,837 |
) |
619,995 |
| |
|
Operating expenses: |
|
|
|
|
|
|
| |
|
Lease operating expenses |
|
8,327 |
|
(1,908 |
)(b) |
6,419 |
| |
|
Gathering, compression and transportation |
|
27,948 |
|
(9,292 |
)(b) |
18,656 |
| |
|
Production taxes |
|
5,576 |
|
(185 |
)(b) |
5,391 |
| |
|
Exploration expenses |
|
2,016 |
|
(148 |
)(b) |
1,868 |
| |
|
Impairment of unproved properties |
|
1,036 |
|
(409 |
)(b) |
627 |
| |
|
Depletion, depreciation and amortization |
|
47,672 |
|
(18,300 |
)(b) |
29,372 |
| |
|
Accretion of asset retirement obligations |
|
128 |
|
(27 |
)(b) |
101 |
| |
|
General and administrative |
|
9,173 |
|
— |
|
9,173 |
| |
|
Total operating expenses |
|
101,876 |
|
(30,269 |
) |
71,607 |
| |
|
Operating income |
|
564,956 |
|
(16,568 |
) |
548,388 |
| |
|
|
|
|
|
|
|
|
| |
|
Interest expense |
|
(24,370 |
) |
— |
|
(24,370 |
) | |
|
Income before income taxes |
|
540,586 |
|
(16,568 |
) |
524,018 |
| |
|
Provision for income taxes |
|
(212,855 |
) |
— |
|
(212,855 |
) | |
|
Net income attributable to Antero equity owners |
|
$ |
327,731 |
|
(16,568 |
) |
311,163 |
|
Antero Resources LLC
Unaudited Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 2011
(in thousands)
|
|
|
|
|
Pro Forma |
|
|
| |
|
|
|
|
|
Adjustments |
|
Unaudited |
| |
|
|
|
|
|
for Activity of |
|
Pro Forma |
| |
|
|
|
|
|
Net Assets |
|
Statement of |
| |
|
|
|
Historical |
|
Disposed |
|
Income |
| |
|
Revenue: |
|
|
|
|
|
|
| |
|
Natural gas sales |
|
$ |
341,834 |
|
(100,999 |
)(a) |
240,835 |
|
|
Natural gas liquids sales |
|
34,718 |
|
(10,565 |
)(a) |
24,153 |
| |
|
Oil sales |
|
15,442 |
|
(1,237 |
)(a) |
14,205 |
| |
|
Realized and unrealized gain on commodity derivative instruments |
|
676,194 |
|
(78,984 |
)(a) |
597,210 |
| |
|
Total revenue |
|
1,068,188 |
|
(191,785 |
) |
876,403 |
| |
|
Operating expenses: |
|
|
|
|
|
|
| |
|
Lease operating expenses |
|
30,645 |
|
(7,088 |
)(b) |
23,557 |
| |
|
Gathering, compression and transportation |
|
87,768 |
|
(30,575 |
)(b) |
57,193 |
| |
|
Production taxes |
|
18,222 |
|
(615 |
)(b) |
17,607 |
| |
|
Exploration expenses |
|
9,876 |
|
(851 |
)(b) |
9,025 |
| |
|
Impairment of unproved properties |
|
11,051 |
|
(1,490 |
)(b) |
9,561 |
| |
|
Depletion, depreciation and amortization |
|
170,521 |
|
(71,299 |
)(b) |
99,222 |
| |
|
Accretion of asset retirement obligations |
|
435 |
|
(101 |
)(b) |
334 |
| |
|
General and administrative |
|
33,342 |
|
— |
|
33,342 |
| |
|
Loss on sale of assets |
|
8,700 |
|
— |
|
8,700 |
| |
|
Total operating expenses |
|
370,560 |
|
(112,019 |
) |
258,541 |
| |
|
Operating income |
|
697,628 |
|
(79,766 |
) |
617,862 |
| |
|
Other expense: |
|
|
|
|
|
|
| |
|
Interest expense |
|
(74,404 |
) |
— |
|
(74,404 |
) | |
|
Realized and unrealized losses on interest derivative instruments |
|
(94 |
) |
— |
|
(94 |
) | |
|
Total other expense |
|
(74,498 |
) |
— |
|
(74,498 |
) | |
|
Income before income taxes |
|
623,130 |
|
(79,766 |
) |
543,364 |
| |
|
Provision for income taxes — benefit (expense) |
|
(230,452 |
) |
— |
|
(230,452 |
) | |
|
Net income attributable to Antero equity owners |
|
$ |
392,678 |
|
(79,766 |
) |
312,912 |
|
Antero Resources LLC
Unaudited Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 2010
(in thousands)
|
|
|
|
|
Pro Forma |
|
|
| |
|
|
|
|
|
Adjustments |
|
Unaudited |
| |
|
|
|
|
|
for Activity of |
|
Pro Forma |
| |
|
|
|
|
|
Net Assets |
|
Statement of |
| |
|
|
|
Historical |
|
Disposed |
|
Income |
| |
|
Revenue: |
|
|
|
|
|
|
| |
|
Natural gas sales |
|
$ |
189,713 |
|
(97,840 |
)(a) |
91,873 |
|
|
Natural gas liquids sales |
|
8,278 |
|
(8,278 |
)(a) |
— |
| |
|
Oil sales |
|
8,471 |
|
(1,834 |
)(a) |
6,637 |
| |
|
Realized and unrealized gain on commodity derivative instruments |
|
244,284 |
|
(87,775 |
)(a) |
156,509 |
| |
|
Gas gathering and processing revenue |
|
20,554 |
|
(20,554 |
)(a) |
— |
| |
|
Gain on sale of Oklahoma midsteam assets |
|
147,559 |
|
(147,559 |
)(a) |
— |
| |
|
Total revenue |
|
618,859 |
|
(363,840 |
) |
255,019 |
| |
|
Operating expenses: |
|
|
|
|
|
|
| |
|
Lease operating expenses |
|
25,511 |
|
(9,664 |
)(b) |
15,847 |
| |
|
Gathering, compression and transportation |
|
45,809 |
|
(27,475 |
)(b) |
18,334 |
| |
|
Production taxes |
|
8,777 |
|
(2,901 |
)(b) |
5,876 |
| |
|
Exploration expenses |
|
24,794 |
|
(3,428 |
)(b) |
21,366 |
| |
|
Impairment of unproved properties |
|
35,859 |
|
(27,974 |
)(b) |
7,885 |
| |
|
Depletion, depreciation and amortization |
|
133,955 |
|
(75,719 |
)(b) |
58,236 |
| |
|
Accretion of asset retirement obligations |
|
317 |
|
(85 |
)(b) |
232 |
| |
|
Expenses related to business acquisition |
|
2,544 |
|
— |
|
2,544 |
| |
|
General and administrative |
|
21,952 |
|
— |
|
21,952 |
| |
|
Total operating expenses |
|
299,518 |
|
(147,246 |
) |
152,272 |
| |
|
Operating income |
|
319,341 |
|
(216,594 |
) |
102,747 |
| |
|
Other expense: |
|
|
|
|
|
|
| |
|
Interest expense |
|
(56,463 |
) |
— |
|
(56,463 |
) | |
|
Realized and unrealized losses on interest derivative instruments |
|
(2,677 |
) |
— |
|
(2,677 |
) | |
|
Total other expense |
|
(59,140 |
) |
— |
|
(59,140 |
) | |
|
Income before income taxes |
|
260,201 |
|
(216,594 |
) |
43,607 |
| |
|
Provision for income taxes — benefit (expense) |
|
(30,009 |
) |
1,205 |
|
(28,804 |
) | |
|
Net income |
|
230,192 |
|
(215,389 |
) |
14,803 |
| |
|
Noncontrolling interest in net income of consolidated subsidiary |
|
(1,564 |
) |
1,564 |
|
— |
| |
|
Net income attributable to Antero equity owners |
|
$ |
228,628 |
|
(213,825 |
) |
14,803 |
|
Antero Resources LLC
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2009
(in thousands)
|
|
|
|
|
Pro Forma |
|
|
| |
|
|
|
|
|
Adjustments |
|
Unaudited |
| |
|
|
|
|
|
for Activity of |
|
Pro Forma |
| |
|
|
|
|
|
Net Assets |
|
Statement of |
| |
|
|
|
Historical |
|
Disposed |
|
Income |
| |
|
Revenue: |
|
|
|
|
|
|
| |
|
Natural gas sales |
|
$ |
116,329 |
|
(81,015 |
)(a) |
35,314 |
|
|
Natural gas liquids sales |
|
7,586 |
|
(7,586 |
)(a) |
— |
| |
|
Oil sales |
|
5,706 |
|
(1,733 |
)(a) |
3,973 |
| |
|
Realized and unrealized gain on commodity derivative instruments |
|
55,364 |
|
(38,952 |
)(a) |
16,412 |
| |
|
Gas gathering and processing revenue |
|
23,005 |
|
(23,005 |
)(a) |
— |
| |
|
Total revenue |
|
207,990 |
|
(152,291 |
) |
55,699 |
| |
|
Operating expenses: |
|
|
|
|
|
|
| |
|
Lease operating expenses |
|
17,606 |
|
(5,336 |
)(b) |
12,270 |
| |
|
Gathering, compression and transportation |
|
28,190 |
|
(22,265 |
)(b) |
5,925 |
| |
|
Production taxes |
|
4,940 |
|
(3,233 |
)(b) |
1,707 |
| |
|
Exploration expenses |
|
10,228 |
|
(4,916 |
)(b) |
5,312 |
| |
|
Impairment of unproved properties |
|
54,204 |
|
(51,428 |
)(b) |
2,776 |
| |
|
Depletion, depreciation and amortization |
|
139,813 |
|
(88,118 |
)(b) |
51,695 |
| |
|
Accretion of asset retirement obligations |
|
265 |
|
(73 |
)(b) |
192 |
| |
|
General and administrative |
|
20,843 |
|
— |
|
20,843 |
| |
|
Total operating expenses |
|
276,089 |
|
(175,369 |
) |
100,720 |
| |
|
Operating income (loss) |
|
(68,099 |
) |
23,078 |
|
(45,021 |
) | |
|
Other expense: |
|
|
|
|
|
|
| |
|
Interest expense |
|
(36,053 |
) |
— |
|
(36,053 |
) | |
|
Realized and unrealized losses on interest derivative instruments |
|
(4,985 |
) |
— |
|
(4,985 |
) | |
|
Total other expense |
|
(41,038 |
) |
— |
|
(41,038 |
) | |
|
Loss before income taxes |
|
(109,137 |
) |
23,078 |
|
(86,095 |
) | |
|
Provision for income taxes — benefit |
|
2,605 |
|
— |
|
2,605 |
| |
|
Net loss |
|
(106,532 |
) |
23,078 |
|
(83,454 |
) | |
|
Noncontrolling interest in net loss of consolidated subsidiary |
|
363 |
|
(363 |
) |
— |
| |
|
Net losss attributable to Antero equity owners |
|
$ |
(106,169 |
) |
22,715 |
|
(83,454 |
) |