Attached files
| file | filename |
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| 8-K/A - FORM 8-K/A - Evolve Transition Infrastructure LP | d498242d8ka.htm |
EXHIBIT 99.1
Unaudited Pro Forma Financial Information of Constellation Energy Partners LLC.
The unaudited pro forma condensed consolidated financial statements are presented for Constellation Energy Partners LLC (“we” or “the Company”). The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2012, and the unaudited pro forma condensed consolidated statements of operations for the period ended September 30, 2012, and the years ended December 31, 2011, 2010 and 2009, should be read in conjunction with the September 30, 2012, unaudited historical consolidated financial statements of the Company and with the December 31, 2011, 2010 and 2009 audited historical consolidated financial statements of the Company, including the related notes, that we filed with the Securities and Exchange Commission (“SEC”) on Form 10-Q and Form 10-K filed on November 9, 2012, and on March 1, 2012, February 25, 2011, and February 25, 2010, respectively.
The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2012, is presented to illustrate the estimated effects of the sale of the Robinson’s Bend Field in the Black Warrior Basin of Alabama, pursuant to a Membership Interest Purchase and Sale Agreement between the Company, as seller and Castleton Commodities Upstream, LLC, (“CCI”) as buyer, dated as of February 1, 2013, as if the transaction had occurred on September 30, 2012. The unaudited pro forma condensed consolidated statement of operations for the period ended September 30, 2012, and the years ended December 31, 2011, 2010 and 2009 are presented to illustrate the estimated effects of the Robinson’s Bend Field in the Black Warrior Basin of Alabama sale as if the transaction had occurred on January 1, 2009, due to CCI acquiring the Robinson’s Bend Field. The pro forma adjustments and assumptions are described in Note 2 in the accompanying notes to the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed financial statements are based on assumptions that the Company believes are reasonable under the circumstances and are intended for informational purposes only. They are not necessarily indicative of the financial results that would have occurred if the transactions described herein had taken place on the dates indicated, nor are they indicative of future consolidated results.
CONSTELLATION ENERGY PARTNERS LLC and SUBSIDIARIES
Consolidated Balance Sheets
(In 000’s except unit data)
| September 30, 2012 | Adjustments for Robinson’s Bend Sale |
Pro Forma September 30, 2012 |
||||||||||
| ASSETS |
||||||||||||
| Current assets |
||||||||||||
| Cash and cash equivalents |
$ | 9,522 | $ | 63,000 | (a) | $ | 12,861 | |||||
| (4,892 | )(a, f) | |||||||||||
| (1,148 | )(a) | |||||||||||
| (1,240 | )(a) | |||||||||||
| (2,368 | )(a) | |||||||||||
| (50,000 | )(b) | |||||||||||
| (13 | )(c) | |||||||||||
| Accounts receivable |
4,922 | (1,227 | )(c) | 3,695 | ||||||||
| Prepaid expenses |
1,058 | (171 | )(c) | 887 | ||||||||
| Risk management assets |
16,279 | 772 | (a) | 17,501 | ||||||||
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| Total current assets |
31,781 | 2,713 | 34,494 | |||||||||
| Oil and natural gas properties |
||||||||||||
| Oil and natural gas properties, equipment and facilities |
795,355 | (207,335 | )(c) | 588,020 | ||||||||
| Material and supplies |
1,699 | (649 | )(c) | 1,050 | ||||||||
| Less accumulated depreciation, depletion, amortization, and impairments |
(534,993 | ) | 64,867 | (c) | (470,126 | ) | ||||||
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| Net oil and natural gas properties |
262,061 | (143,117 | ) | 118,944 | ||||||||
| Other assets |
||||||||||||
| Debt issue costs (net of accumulated amortization of $7,439 at September 30, 2012) |
1,463 | — | 1,463 | |||||||||
| Risk management assets |
9,384 | 1,596 | (a) | 10,980 | ||||||||
| Other non-current assets |
3,396 | 1,076 | (a) | 4,472 | ||||||||
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| Total assets |
$ | 308,085 | $ | (137,732 | ) | $ | 170,353 | |||||
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| LIABILITIES AND MEMBERS’ EQUITY | ||||||||||||
| Liabilities |
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| Current liabilities |
||||||||||||
| Accounts payable |
$ | 1,219 | $ | (90 | )(c) | $ | 1,129 | |||||
| Accrued liabilities |
7,417 | (992 | )(c) | 6,425 | ||||||||
| Royalty payable |
1,903 | (647 | )(c) | 1,256 | ||||||||
| Risk management liabilities |
— | — | — | |||||||||
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| Total current liabilities |
10,539 | (1,729 | ) | 8,810 | ||||||||
| Other liabilities |
||||||||||||
| Asset retirement obligation |
14,726 | (7,225 | )(c) | 7,501 | ||||||||
| Risk management liabilities |
412 | — | 412 | |||||||||
| Other non-current liabilities |
604 | 500 | (a) | 1,104 | ||||||||
| Debt |
88,400 | (50,000 | )(b) | 38,400 | ||||||||
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| Total other liabilities |
104,142 | (56,725 | ) | 47,417 | ||||||||
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| Total liabilities |
114,681 | (58,454 | ) | 56,227 | ||||||||
| Commitments and contingencies |
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| Members’ equity |
||||||||||||
| Class A units, 483,304 and 485,033 units authorized, issued and outstanding, respectively |
3,844 | (1,586 | )(d) | 2,258 | ||||||||
| Class B units, 24,124,378 and 24,124,378 units authorized, respectively, and 23,681,878 and 23,766,632 issued and outstanding, respectively |
188,339 | (77,692 | )(d) | 110,647 | ||||||||
| Accumulated other comprehensive income |
1,221 | — | 1,221 | |||||||||
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| Total members’ equity |
193,404 | (79,278 | ) | 114,126 | ||||||||
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| Total liabilities and members’ equity |
$ | 308,085 | $ | (137,732 | ) | $ | 170,353 | |||||
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See accompanying notes to consolidated financial statements.
CONSTELLATION ENERGY PARTNERS LLC and SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
| For the nine months ended September 30, 2012 |
Adjustments for Robinson’s Bend Sale |
Pro Forma For the nine months ended September 30, 2012 |
||||||||||
| (In 000’s except unit data) | ||||||||||||
| Revenues |
||||||||||||
| Natural gas sales |
$ | 41,549 | $ | (8,977 | )(e) | $ | 32,572 | |||||
| Oil and liquid sales |
8,971 | — | 8,971 | |||||||||
| Gain / (Loss) from mark-to-market activities |
(8,453 | ) | — | (8,453 | ) | |||||||
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| Total revenues |
42,067 | (8,977 | ) | 33,090 | ||||||||
| Expenses: |
||||||||||||
| Operating expenses: |
||||||||||||
| Lease operating expenses |
19,728 | (5,001 | )(e) | 14,727 | ||||||||
| Cost of sales |
923 | — | 923 | |||||||||
| Production taxes |
1,552 | (411 | )(e) | 1,141 | ||||||||
| General and administrative |
11,808 | (252 | )(e) | 11,556 | ||||||||
| Exploration costs |
— | — | — | |||||||||
| (Gain) / Loss on sale of assets |
— | — | — | |||||||||
| Depreciation, depletion and amortization |
13,186 | (6,108 | )(e) | 7,078 | ||||||||
| Asset impairments |
107 | — | 107 | |||||||||
| Accretion expense |
575 | (230 | )(e) | 345 | ||||||||
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| Total operating expenses |
47,879 | (12,002 | ) | 35,877 | ||||||||
| Other expense / (income) |
||||||||||||
| Interest expense |
5,288 | (2,246 | )(g) | 3,042 | ||||||||
| Interest expense (Gain)/Loss from mark-to-market activities |
(697 | ) | — | (697 | ) | |||||||
| Interest (income) |
(1 | ) | — | (1 | ) | |||||||
| Other expense (income) |
(114 | ) | — | (114 | ) | |||||||
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| Total other expenses / (income) |
4,476 | (2,246 | ) | 2,230 | ||||||||
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| Total expenses |
52,355 | (14,248 | ) | 38,107 | ||||||||
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| Net income (loss) |
$ | (10,288 | ) | $ | (5,271 | ) | $ | (5,017 | ) | |||
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| Earnings per unit |
||||||||||||
| Earnings (loss) per unit—Basic |
$ | (0.43 | ) | $ | (0.21 | ) | ||||||
| Units outstanding—Basic |
24,171,669 | 24,171,669 | ||||||||||
| Earnings (loss) per unit—Diluted |
$ | (0.43 | ) | $ | (0.21 | ) | ||||||
| Units outstanding—Diluted |
24,171,669 | 24,171,669 | ||||||||||
| Distributions declared and paid per unit |
$ | — | $ | — | ||||||||
See accompanying notes to consolidated financial statements.
CONSTELLATION ENERGY PARTNERS LLC and SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
| For the year ended December 31, 2011 |
Adjustments for Robinson’s Bend Sale |
Pro Forma For the year ended December 31, 2011 |
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| (In 000’s except unit data) | ||||||||||||
| Revenues |
||||||||||||
| Natural gas sales |
$ | 133,769 | $ | (18,629 | )(e) | $ | 115,140 | |||||
| Oil and liquid sales |
10,870 | — | 10,870 | |||||||||
| Gain / (Loss) from mark-to-market activities |
(39,422 | ) | — | (39,422 | ) | |||||||
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| Total revenues |
105,217 | (18,629 | ) | 86,588 | ||||||||
| Expenses: |
||||||||||||
| Operating expenses: |
||||||||||||
| Lease operating expenses |
27,949 | (7,160 | )(e) | 20,789 | ||||||||
| Cost of sales |
2,188 | — | 2,188 | |||||||||
| Production taxes |
2,897 | (1,004 | )(e) | 1,893 | ||||||||
| General and administrative |
16,599 | (458 | ) (e) | 16,141 | ||||||||
| Exploration costs |
131 | — | 131 | |||||||||
| (Gain) / Loss on sale of assets |
19 | — | 19 | |||||||||
| Depreciation, depletion and amortization |
22,139 | (9,685 | )(e) | 12,454 | ||||||||
| Asset impairments |
2,935 | (1,000 | )(e) | 1,935 | ||||||||
| Accretion expense |
907 | (424 | )(e) | 483 | ||||||||
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| Total operating expenses |
75,764 | (19,731 | ) | 56,033 | ||||||||
| Other expense / (income) |
||||||||||||
| Interest expense |
8,886 | (2,850 | )(g) | 6,036 | ||||||||
| Interest expense (Gain)/Loss from mark-to-market activities |
1,232 | — | 1,232 | |||||||||
| Interest (income) |
(2 | ) | — | (2 | ) | |||||||
| Other expense (income) |
(249 | ) | — | (249 | ) | |||||||
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| Total other expenses / (income) |
9,867 | (2,850 | ) | 7,017 | ||||||||
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| Total expenses |
85,631 | (22,581 | ) | 63,050 | ||||||||
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| Net income (loss) |
$ | 19,586 | $ | 3,952 | $ | 23,538 | ||||||
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| Earnings per unit |
||||||||||||
| Earnings (loss) per unit—Basic |
$ | 0.81 | $ | 0.97 | ||||||||
| Units outstanding—Basic |
24,273,491 | 24,273,491 | ||||||||||
| Earnings (loss) per unit—Diluted |
$ | 0.81 | $ | 0.97 | ||||||||
| Units outstanding—Diluted |
24,273,491 | 24,273,491 | ||||||||||
| Distributions declared and paid per unit |
$ | — | $ | — | ||||||||
See accompanying notes to consolidated financial statements.
CONSTELLATION ENERGY PARTNERS LLC and SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
| For the year ended December 31, 2010 |
Adjustments for Robinson’s Bend Sale |
Pro Forma For the year ended December 31, 2010 |
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| (In 000’s except unit data) | ||||||||||||
| Revenues |
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| Natural gas sales |
$ | 103,997 | $ | (21,174 | )(e) | $ | 82,823 | |||||
| Oil and liquid sales |
4,695 | — | 4,695 | |||||||||
| Gain / (Loss) from mark-to-market activities |
42,081 | — | 42,081 | |||||||||
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| Total revenues |
150,773 | (21,174 | ) | 129,599 | ||||||||
| Expenses: |
||||||||||||
| Operating expenses: |
||||||||||||
| Lease operating expenses |
30,798 | (7,100 | )(e) | 23,698 | ||||||||
| Cost of sales |
2,473 | — | 2,473 | |||||||||
| Production taxes |
3,179 | (1,142 | )(e) | 2,037 | ||||||||
| General and administrative |
20,351 | (1,684 | )(e) | 18,667 | ||||||||
| Exploration costs |
760 | — | 760 | |||||||||
| (Gain) / Loss on sale of assets |
(18 | ) | — | (18 | ) | |||||||
| Depreciation, depletion and amortization |
85,263 | (10,594 | )(e) | 74,669 | ||||||||
| Asset impairments |
272,487 | (525 | )(e) | 271,962 | ||||||||
| Accretion expense |
822 | (388 | )(e) | 434 | ||||||||
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| Total operating expenses |
416,115 | (21,433 | ) | 394,682 | ||||||||
| Other expense / (income) |
||||||||||||
| Interest expense |
12,721 | — | 12,721 | |||||||||
| Interest expense (Gain)/Loss from mark-to-market activities |
(765 | ) | — | (765 | ) | |||||||
| Interest (income) |
(3 | ) | — | (3 | ) | |||||||
| Other expense (income) |
(385 | ) | — | (385 | ) | |||||||
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| Total other expenses / (income) |
11,568 | — | 11,568 | |||||||||
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| Total expenses |
427,683 | (21,433 | ) | 406,250 | ||||||||
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| Net income (loss) |
$ | (276,910 | ) | $ | (259 | ) | $ | (276,651 | ) | |||
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| Earnings per unit |
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| Earnings (loss) per unit—Basic |
$ | (11.36 | ) | $ | (11.35 | ) | ||||||
| Units outstanding—Basic |
24,370,545 | 24,370,545 | ||||||||||
| Earnings (loss) per unit—Diluted |
$ | (11.36 | ) | $ | (11.35 | ) | ||||||
| Units outstanding—Diluted |
24,370,545 | 24,370,545 | ||||||||||
| Distributions declared and paid per unit |
$ | — | $ | — | ||||||||
See accompanying notes to consolidated financial statements.
CONSTELLATION ENERGY PARTNERS LLC and SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
| For the year ended December 31, 2009 |
Adjustments for Robinson’s Bend Sale |
Pro Forma For the year ended December 31, 2009 |
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| (In 000’s except unit data) | ||||||||||||
| Revenues |
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| Natural gas sales |
$ | 118,580 | $ | (20,205 | )(e) | $ | 98,375 | |||||
| Oil and liquid sales |
4,546 | — | 4,546 | |||||||||
| Gain / (Loss) from mark-to-market activities |
19,410 | — | 19,410 | |||||||||
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| Total revenues |
142,536 | (20,205 | ) | 122,331 | ||||||||
| Expenses: |
||||||||||||
| Operating expenses: |
||||||||||||
| Lease operating expenses |
33,535 | (7,182 | )(e) | 26,353 | ||||||||
| Cost of sales |
2,638 | — | 2,638 | |||||||||
| Production taxes |
3,153 | (1,150 | )(e) | 2,003 | ||||||||
| General and administrative |
18,506 | (614 | )(e) | 17,892 | ||||||||
| Exploration costs |
855 | (173 | )(e) | 682 | ||||||||
| (Gain) / Loss on sale of assets |
— | — | — | |||||||||
| Depreciation, depletion and amortization |
71,173 | (9,408 | )(e) | 61,765 | ||||||||
| Asset impairments |
5,113 | — | 5,113 | |||||||||
| Accretion expense |
406 | (215 | )(e) | 191 | ||||||||
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| Total operating expenses |
135,379 | (18,742 | ) | 116,637 | ||||||||
| Other expense / (income) |
||||||||||||
| Interest expense |
11,967 | — | 11,967 | |||||||||
| Interest expense (Gain)/Loss from mark-to-market activities |
4,338 | — | 4,338 | |||||||||
| Interest (income) |
(2 | ) | — | (2 | ) | |||||||
| Other expense (income) |
(123 | ) | — | (123 | ) | |||||||
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| Total other expenses / (income) |
16,180 | — | 16,180 | |||||||||
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| Total expenses |
151,559 | (18,742 | ) | 132,817 | ||||||||
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| Net income (loss) |
$ | (9,023 | ) | $ | 1,463 | $ | (10,486 | ) | ||||
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| Earnings per unit |
||||||||||||
| Earnings (loss) per unit—Basic |
$ | (0.40 | ) | $ | (0.46 | ) | ||||||
| Units outstanding—Basic |
22,664,895 | 22,664,895 | ||||||||||
| Earnings (loss) per unit—Diluted |
$ | (0.40 | ) | $ | (0.46 | ) | ||||||
| Units outstanding—Diluted |
22,664,895 | 22,664,895 | ||||||||||
| Distributions declared and paid per unit |
$ | 0.26 | $ | 0.26 | ||||||||
See accompanying notes to consolidated financial statements.
CONSTELLATION ENERGY PARTNERS LLC
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The historical information is derived from the historical consolidated financial statements of Constellation Energy Partners LLC. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2012, is presented to illustrate the estimated effects of the Robinson’s Bend Field in the Black Warrior Basin of Alabama sale as if the transaction had occurred on September 30, 2012. The unaudited pro forma condensed consolidated statement of operations is presented for the periods ended September 30, 2012, and December 31, 2011, 2010 and 2009.
NOTE 2. Pro Forma Adjustments and Assumptions
(a) Reflects the sale of the two entities that owned all of the Company’s operating assets in the Robinson’s Bend Field in the Black Warrior Basin of Alabama for $63.0 million plus adjustments for income and expenses related to operating the Robinson’s Bend Field since December 1, 2012 (“effective date”). These include estimated expenses of approximately $4.9 million for estimated income and expenses after the effective date of sale and NORM deducts and adjustments, $1.2 million in restricted cash held in escrow for 24 months, $1.2 million for commission and legal fees, approximately $2.4 million for interest rate and commodity swap repositioning costs and $3.3 million cash retained.
(b) Net proceeds from the Robinson’s Bend sale are used to repay $50.0 million in outstanding debt under the reserve-based credit facility which bears interest primarily based on a LIBOR rate plus the applicable margin.
(c) Reflects the assets to be acquired and liabilities to be assumed by CCI as a result of acquiring the two entities that own Robinson’s Bend Field in the Black Warrior Basin of Alabama.
(d) Reflects the net impact on our equity for the sale of the Robinson’s Bend Field in the Black Warrior Basin of Alabama.
(e) Reflects the operations for the sale of Robinson’s Bend Field in the Black Warrior Basin of Alabama in the above transaction for the periods presented.
(f) This amount includes $2.3 million in estimated amounts to be withheld by CCI from the purchase price for deductions attributable to the net revenues and expenses received from the Robinson’s Bend Field assets after the effective date for $2.6 million. As of February 28, 2013, CCI has received $0.4 million in net revenues and expenses from the Robinson’s Bend Field.
(g) This amount reflects a reduction in interest expense associated with the $50.0 million reduction in outstanding debt.