Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - GRAN TIERRA ENERGY INC. | v382816_8k.htm |
| EX-2.1 - EXHIBIT 2.1 - GRAN TIERRA ENERGY INC. | v382816_ex2-1.htm |
| EX-2.2 - EXHIBIT 2.2 - GRAN TIERRA ENERGY INC. | v382816_ex2-2.htm |
Exhibit 99.1
Unaudited Condensed Pro Forma Consolidated Financial Statements
Completion of Acquisition or Disposition of Assets
On June 25, 2014, Gran Tierra Energy Inc. (“Gran Tierra Energy”), through several of its indirect subsidiaries (the “Selling Subsidiaries”), sold to Madalena Energy Inc. ("Madalena") Gran Tierra Energy’s Argentina business unit for aggregate consideration of approximately $69 million, comprising $55 million in cash and $14 million in Madalena shares. The sale was made pursuant to agreements entered into by the Selling Subsidiaries, a description of which is set forth in the Current Report on Form 8-K filed by Gran Tierra Energy on June 4, 2014, and is incorporated by reference here.
Financial Statements and Exhibits
The following unaudited condensed pro forma consolidated financial information is presented to illustrate the effect of Gran Tierra Energy’s sale of its Argentina business unit on its historical financial position and operating results. The accompanying unaudited condensed pro forma consolidated balance sheet and unaudited condensed pro forma consolidated statements of operations have been prepared to assist in analysis of the financial effects of the divestiture. This information is based on the historical financial statements of Gran Tierra Energy and should be read in conjunction with the financial statements included in Gran Tierra Energy’s Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 25, 2014, and Quarterly Report on Form 10-Q for the three months ended March 31, 2014, filed on May 6, 2014.
The accompanying unaudited condensed pro forma consolidated balance sheet as of March 31, 2014, has been prepared to give effect to the divestiture as if it had occurred on March 31, 2014. The unaudited condensed pro forma consolidated statements of operations for the three months ended March 31, 2014, and the years ended December 31, 2013, 2012 and 2011 have been prepared to give effect to the divestiture as if it had occurred on January 1, 2011.
The unaudited condensed pro forma consolidated balance sheet and statements of operations included herein are not necessarily indicative of the results that might have occurred had the divestiture taken place on the respective dates assumed. The operating results of the Argentina business unit are expected to meet the criteria for presentation as discontinued operations when reported in the next periodic financial report of Gran Tierra Energy on Form 10-Q.
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Balance Sheet (Unaudited)
As at March 31, 2014
(Thousands of U.S. Dollars)
| As Reported | Pro Forma Adjustments (Note 2) |
As Adjusted | ||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ | 390,953 | $ | 36,643 | (a)(b) | $ | 427,596 | |||||
| Restricted cash | 394 | — | 394 | |||||||||
| Accounts receivable | 106,517 | (12,783 | )(b) | 93,734 | ||||||||
| Other financial instruments | 2,409 | — | 2,409 | |||||||||
| Inventory | 14,407 | (2,102 | )(b) | 12,305 | ||||||||
| Taxes receivable | 13,921 | (2,428 | )(b) | 11,493 | ||||||||
| Prepaids | 7,025 | (1,572 | )(b) | 5,453 | ||||||||
| Deferred tax assets | 770 | — | 770 | |||||||||
| Investment | — | 14,000 | (b) | 14,000 | ||||||||
| Total Current Assets | 536,396 | 31,758 | 568,154 | |||||||||
| Oil and Gas Properties (using the full cost method of accounting) | ||||||||||||
| Proved | 795,830 | (73,215 | )(b) | 722,615 | ||||||||
| Unproved | 489,817 | (17,653 | )(b) | 472,164 | ||||||||
| Total Oil and Gas Properties | 1,285,647 | (90,868 | ) | 1,194,779 | ||||||||
| Other capital assets | 10,059 | (1,316 | )(b) | 8,743 | ||||||||
| Total Property, Plant and Equipment | 1,295,706 | (92,184 | ) | 1,203,522 | ||||||||
| Other Long-Term Assets | ||||||||||||
| Restricted cash | 2,876 | — | 2,876 | |||||||||
| Deferred tax assets | 1,375 | — | 1,375 | |||||||||
| Taxes receivable | 14,246 | (1,819 | )(b) | 12,427 | ||||||||
| Other long-term assets | 6,815 | — | 6,815 | |||||||||
| Goodwill | 102,581 | — | 102,581 | |||||||||
| Total Other Long-Term Assets | 127,893 | (1,819 | ) | 126,074 | ||||||||
| Total Assets | $ | 1,959,995 | $ | (62,245 | ) | $ | 1,897,750 | |||||
| As Reported | Pro Forma Adjustments (Note 2) |
As Adjusted | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Current Liabilities | ||||||||||||
| Accounts payable | $ | 51,734 | $ | (3,276 | )(b) | $ | 48,458 | |||||
| Accrued liabilities | 103,692 | (12,596 | )(b) | 91,096 | ||||||||
| Taxes payable | 121,877 | (15,586 | )(b) | 106,291 | ||||||||
| Deferred tax liabilities | 1,265 | — | 1,265 | |||||||||
| Asset retirement obligation | 518 | — | 518 | |||||||||
| Total Current Liabilities | 279,086 | (31,458 | ) | 247,628 | ||||||||
| Long-Term Liabilities | ||||||||||||
| Deferred tax liabilities | 169,798 | — | 169,798 | |||||||||
| Asset retirement obligation | 22,654 | (10,176 | )(b) | 12,478 | ||||||||
| Other long-term liabilities | 10,776 | — | 10,776 | |||||||||
| Total Long-Term Liabilities | 203,228 | (10,176 | ) | 193,052 | ||||||||
| Contingencies | ||||||||||||
| Shareholders’ Equity | ||||||||||||
| Common Stock (272,792,843 shares of Common Stock and 10,528,740 exchangeable shares, par value $0.001 per share, issued and outstanding as at March 31, 2014.) | 10,187 | — | 10,187 | |||||||||
| Additional paid in capital | 1,011,404 | (354 | )(c) | 1,011,050 | ||||||||
| Retained earnings | 456,090 | (20,257 | )(a)(c) | 435,833 | ||||||||
| Total Shareholders’ Equity | 1,477,681 | (20,611 | ) | 1,457,070 | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | 1,959,995 | $ | (62,245 | ) | $ | 1,897,750 | |||||
See accompanying notes to the unaudited condensed pro forma consolidated financial statements
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Statement of Operations (Unaudited)
For the Three Months Ended March 31, 2014
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
| As Reported | Pro Forma Adjustments (Note 2) |
As Adjusted | ||||||||||
| REVENUE AND OTHER INCOME | ||||||||||||
| Oil and natural gas sales | $ | 168,525 | $ | (17,420 | )(d) | $ | 151,105 | |||||
| Interest income | 1,154 | (404 | )(d) | 750 | ||||||||
| 169,679 | (17,824 | ) | 151,855 | |||||||||
| EXPENSES | ||||||||||||
| Operating | 28,293 | (6,428 | )(d) | 21,865 | ||||||||
| Depletion, depreciation, accretion and impairment | 53,157 | (8,893 | )(d) | 44,264 | ||||||||
| General and administrative | 15,204 | (2,341 | )(d) | 12,863 | ||||||||
| Foreign exchange loss (gain) | 126 | (4,334 | )(d) | (4,208 | ) | |||||||
| Financial instruments gain | (2,409 | ) | — | (2,409 | ) | |||||||
| 94,371 | (21,996 | ) | 72,375 | |||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 75,308 | 4,172 | (d) | 79,480 | ||||||||
| Income tax expense | (30,179 | ) | 470 | (d) | (29,709 | ) | ||||||
| NET INCOME FROM CONTINUING OPERATIONS | $ | 45,129 | $ | 4,642 | $ | 49,771 | ||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — BASIC | $ | 0.16 | $ | 0.18 | ||||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — DILUTED | $ | 0.16 | $ | 0.17 | ||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | 283,235,202 | 283,235,202 | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | 288,636,904 | 288,636,904 | ||||||||||
See accompanying notes to the unaudited condensed pro forma
consolidated financial statements
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Statement of Operations (Unaudited)
For the Year Ended December 31, 2013
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
| As Reported | Pro Forma Adjustments (Note 2) |
As Adjusted | ||||||||||
| REVENUE AND OTHER INCOME | ||||||||||||
| Oil and natural gas sales | $ | 720,450 | $ | (73,495 | )(d) | $ | 646,955 | |||||
| Interest income | 3,193 | (1,019 | )(d) | 2,174 | ||||||||
| 723,643 | (74,514 | ) | 649,129 | |||||||||
| EXPENSES | ||||||||||||
| Operating | 149,059 | (38,886 | )(d) | 110,173 | ||||||||
| Depletion, depreciation, accretion and impairment | 267,146 | (64,295 | )(d)(e) | 202,851 | ||||||||
| General and administrative | 53,400 | (12,442 | )(d) | 40,958 | ||||||||
| Foreign exchange gain | (12,198 | ) | (6,496 | )(d) | (18,694 | ) | ||||||
| Other loss | 4,400 | — | 4,400 | |||||||||
| 461,807 | (122,119 | ) | 339,688 | |||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 261,836 | 47,605 | (d) | 309,441 | ||||||||
| Income tax expense | (135,548 | ) | (7,287 | )(d) | (128,261 | ) | ||||||
| NET INCOME FROM CONTINUING OPERATIONS | $ | 126,288 | $ | 54,892 | $ | 181,180 | ||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — BASIC | $ | 0.45 | $ | 0.64 | ||||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — DILUTED | $ | 0.44 | $ | 0.63 | ||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | 282,808,497 | 282,808,497 | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | 286,127,897 | 286,127,897 | ||||||||||
See accompanying notes to the unaudited condensed pro forma consolidated financial statements
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Statement of Operations (Unaudited)
For the Year Ended December 31, 2012
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
| As Reported | Pro Forma Adjustments (Note 2) |
As Adjusted | ||||||||||
| REVENUE AND OTHER INCOME | ||||||||||||
| Oil and natural gas sales | $ | 583,109 | $ | (79,642 | )(d) | $ | 503,467 | |||||
| Interest income | 2,078 | (369 | )(d) | 1,709 | ||||||||
| 585,187 | (80,011 | ) | 505,176 | |||||||||
| EXPENSES | ||||||||||||
| Operating | 124,903 | (32,696 | )(d) | 92,207 | ||||||||
| Depletion, depreciation, accretion and impairment | 182,037 | (31,466 | )(d) | 150,571 | ||||||||
| General and administrative | 58,882 | (12,335 | )(d) | 46,547 | ||||||||
| Other gain | (9,336 | ) | — | (9,336 | ) | |||||||
| Foreign exchange loss | 31,338 | (2,610 | )(d) | 28,728 | ||||||||
| 387,824 | (79,107 | ) | 308,717 | |||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 197,363 | (904 | ) | 196,459 | ||||||||
| Income tax expense | (97,704 | ) | (1,438 | )(d) | (96,266 | ) | ||||||
| NET INCOME FROM CONTINUING OPERATIONS | $ | 99,659 | $ | 534 | $ | 100,193 | ||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — BASIC | $ | 0.35 | $ | 0.36 | ||||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — DILUTED | $ | 0.35 | $ | 0.35 | ||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | 280,741,255 | 280,741,255 | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | 284,172,254 | 284,172,254 | ||||||||||
See accompanying notes to the unaudited condensed pro forma consolidated financial statements
Gran Tierra Energy Inc.
Condensed Pro Forma Consolidated Statement of Operations (Unaudited)
For the Year Ended December 31, 2011
(Thousands of U.S. Dollars, Except Share and Per Share Amounts)
| As Reported | Pro Forma Adjustments (Note 2) |
As Adjusted | ||||||||||
| REVENUE AND OTHER INCOME | ||||||||||||
| Oil and natural gas sales | $ | 596,191 | $ | (48,016 | )(d) | $ | 548,175 | |||||
| Interest income | 1,216 | (91 | )(d) | 1,125 | ||||||||
| 597,407 | (48,107 | ) | 549,300 | |||||||||
| EXPENSES | ||||||||||||
| Operating | 86,497 | (27,076 | )(d) | 59,421 | ||||||||
| Depletion, depreciation, accretion and impairment | 231,235 | (45,539 | )(d)(f) | 185,696 | ||||||||
| General and administrative | 60,389 | (8,044 | )(d) | 52,345 | ||||||||
| Equity tax | 8,271 | — | 8,271 | |||||||||
| Financial instruments gain | (1,522 | ) | 168 | (1,354 | ) | |||||||
| Gain on acquisition | (21,699 | ) | 9,085 | (d) | (12,614 | ) | ||||||
| Foreign exchange gain | (11 | ) | (243 | )(d) | (254 | ) | ||||||
| 363,160 | (71,649 | ) | 291,511 | |||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 234,247 | 23,542 | 257,789 | |||||||||
| Income tax expense | (107,330 | ) | 7,961 | (d) | (115,291 | ) | ||||||
| NET INCOME FROM CONTINUING OPERATIONS | $ | 126,917 | $ | 15,581 | $ | 142,498 | ||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — BASIC | $ | 0.46 | $ | 0.52 | ||||||||
| NET INCOME PER SHARE FROM CONTINUING OPERATIONS — DILUTED | $ | 0.45 | $ | 0.51 | ||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | 273,491,564 | 273,491,564 | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | 281,287,002 | 281,287,002 | ||||||||||
See accompanying notes to the unaudited pro forma consolidated financial statements
Notes to the Unaudited Condensed Pro Forma Consolidated Financial Statements
1. Overview
On June 25, 2014, Gran Tierra Energy through several of its indirect subsidiaries sold Gran Tierra Energy’s Argentina business unit to Madalena for aggregate consideration of approximately $69 million, comprising $55 million in cash and $14 million in Madalena shares.
2. Pro Forma Adjustments
(a) To adjust for the net cash proceeds expected to be received from the sale of $53 million, the proceeds from the sale in the form of common shares of Madalena of $14 million and the estimated after tax loss on the sale of $18 million. The adjustment reflects the estimated after tax loss on the sale as if it had occurred on March 31, 2014. The actual loss to be recognized will be based on the carrying amounts of the assets sold and liabilities assumed or released on the date of the divestiture and may be materially different than the loss noted herein. The pro forma presentations included herein should not be relied upon as indicative of the actual loss to be recorded.
(b) To adjust for asset sold and liabilities assumed or released as part of the divestiture.
(c) To adjust for stock-based compensation relating to stock options that vested upon closing of the divestiture. Actual behavior of Gran Tierra Energy’s Argentina business unit staff cannot be predicted but, as of the closing prices on the closing day, $4 million could be received in stock option proceeds relating to in the money options that vested on account of the closing.
(d) To eliminate production revenue, direct expenses and gains related to Gran Tierra Energy’s Argentina business unit.
(e) To eliminate a $30.8 million ceiling test impairment loss related to Gran Tierra Energy’s Argentina cost center.
(f) To eliminate a $25.7 million ceiling test impairment loss related to Gran Tierra Energy’s Argentina cost center.