exv99w5

EXHIBIT 99.5

ENCORE ACQUISITION COMPANY

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION

Encore Acquisition Company (“Encore”), a Delaware corporation, acquires and develops oil and natural gas reserves from onshore fields in the United States. Since 1998, it has acquired producing properties with proven reserves and leasehold acreage and grown the production and proven reserves by drilling, exploring, reengineering or expanding existing waterflood projects, and by applying tertiary recovery techniques.

On January 16, 2007, Encore entered into a Purchase and Sale Agreement to acquire certain oil and natural gas properties and related assets in the Big Horn Basin of Wyoming (“Big Horn”) from certain subsidiaries of Anadarko Petroleum Corporation (“Anadarko”). Big Horn is comprised of assets in or near the Elk Basin field (“Elk Basin”) in Park County, Wyoming and Carbon County, Montana and the Gooseberry field (“Gooseberry”) in Park County, Wyoming. The Big Horn acquisition was completed on March 7, 2007 and accordingly, the actual operating results related to the acquired properties are included in Encore’s operating results from that date forward.

On January 23, 2007, Encore entered into a Purchase and Sale Agreement to acquire certain oil and natural gas properties and related assets in the Williston Basin (“Williston” and together with Big Horn, the “Acquisitions”) of Montana and North Dakota from certain subsidiaries of Anadarko. The Williston acquisition was completed on April 11, 2007 and accordingly, the actual operating results related to the acquired properties are included in Encore’s operating results from that date forward.

The accompanying unaudited pro forma consolidated financial statements should be read together with the historical audited consolidated financial statements of Encore included in its Annual Report on Form 10-K for the year ended December 31, 2006, the unaudited consolidated financial statements of Encore included in its Quarterly Report on Form 10-Q for the three months ended March 31, 2007, and the audited Statements of Revenues and Direct Operating Expenses of each of the Acquisitions filed as exhibits to this report. The accompanying unaudited pro forma consolidated financial statements were derived by making certain adjustments to the historical financial statements of Encore. The adjustments are based on currently available information and certain estimates and assumptions. Therefore, the actual adjustments may differ from the unaudited consolidated pro forma adjustments. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the transactions as contemplated and that the unaudited consolidated pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma consolidated financial statements.

The accompanying unaudited consolidated pro forma financial statements give effect to the Acquisitions by Encore. The unaudited consolidated pro forma balance sheet assumes that the Williston acquisition and related transactions occurred on March 31, 2007 (the Big Horn acquisition was completed on March 7, 2007 and therefore included in Encore’s unaudited balance sheet as of March 31, 2007). The unaudited pro forma consolidated statements of operations for the year ended December 31, 2006 and for the three months ended March 31, 2007 assumes that the Acquisitions and related transactions occurred on January 1, 2006.

ENCORE ACQUISITION COMPANY

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2007
(in thousands, except share and per share amounts)


				Williston
	Encore			Pro Forma			Pro Forma
	Historical			Adjustments			as Adjusted
ASSETS

Current assets:
Cash and cash equivalents	$	626		$	—		$	626
Accounts receivable		82,151			2,746	(a)		84,897
Inventory		21,380			—			21,380
Derivatives		15,283			—			15,283
Deferred taxes		21,833			—			21,833
Prepaid expenses		3,357			—			3,357

Total current assets		144,630			2,746			147,376


Properties and equipment, at cost:
Proved properties, including wells and related equipment		2,525,564			380,139	(a)		2,905,703
Unproved properties		47,007			16,134	(a)		63,141
Accumulated depletion, depreciation, and amortization		(398,893	)		—			(398,893	)

		2,173,678			396,273			2,569,951

Other property and equipment		18,619			—			18,619
Accumulated depreciation		(8,260	)		—			(8,260	)

Total other property and equipment		10,359			—			10,359


Other assets:
Goodwill		60,606			—			60,606
Derivatives		40,269			—			40,269
Acquisition deposit		41,000			—			41,000
Other		55,298			—			55,298

Total other assets		197,173			—			197,173


Total assets	$	2,525,840		$	399,019		$	2,924,859


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	26,044		$	—		$	26,044
Accrued liabilities:
Lease operations expense		10,868			638	(a)		11,506
Development capital		35,572			—			35,572
Interest		14,766			—			14,766
Production, ad valorem, and severance taxes		13,389			247	(a)		13,636
Oil purchases		4,028			—			4,028
Derivatives		62,113			—			62,113
Other		24,302			1,168	(a)		25,470

Total current liabilities		191,082			2,053			193,135

Long-term debt		1,201,802			393,265	(a)		1,595,067
Deferred taxes		268,700			—			268,700
Derivatives		35,057			—			35,057
Future abandonment cost		29,043			3,701	(a)		32,744
Other		1,124			—			1,124

Total liabilities		1,726,808			399,019			2,125,827


Stockholders’ equity:
Preferred stock, $.01 par value, 5,000,000 authorized, none issued and outstanding		—			—			—
Common stock, $.01 par value, 144,000,000 authorized, 53,126,504 issued and outstanding		532			—			532
Additional paid-in capital		460,857			—			460,857
Treasury stock, at cost, of 17,809 shares		(392	)		—			(392	)
Retained earnings		365,181			—			365,181
Accumulated other comprehensive loss		(27,146	)		—			(27,146	)

Total stockholders’ equity		799,032			—			799,032


Total liabilities and stockholders’ equity	$	2,525,840		$	399,019		$	2,924,859

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.

ENCORE ACQUISITION COMPANY

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2007
(in thousands, except per share amounts)


				Big Horn Acquistion
	Encore			Gooseberry		Elk Basin		Williston		Pro Forma			Pro Forma
	Historical			Historical		Historical		Historical		Adjustments			as Adjusted
Revenues:
Oil	$	82,623		$	2,024	$	10,459	$	21,491	$	—		$	116,597
Natural gas		32,978			—		127		1,357		—			34,462
Marketing and other		14,941			—		3,575		—		—			18,516

Total revenues		130,542			2,024		14,161		22,848		—			169,575


Expenses:
Production:
Lease operations		30,520			307		1,965		5,737		—			38,529
Production, ad valorem, and severance taxes		12,515			260		1,262		1,714		—			15,751
Depletion, depreciation, and amortization		35,028			—		—		—		12,909	(c)		47,937
Exploration		11,521			—		—		—		—			11,521
General and administrative		7,360			—		—		—		—			7,360
Derivative fair value loss		45,614			—		—		—		—			45,614
Marketing and other operating		17,576			—		3,370		—		98	(e)		21,044

Total expenses		160,134			567		6,597		7,451		13,007			187,756


Operating income (loss)		(29,592	)		1,457		7,564		15,397		(13,007	)		(18,181	)


Other income (expenses):
Interest		(16,287	)		—		—		—		(11,382	)(d)		(27,943	)
											(274	)(b)

Other		431			—		—		—		—			431

Total other income (expenses)		(15,856	)		—		—		—		(11,656	)		(27,512	)


Income (loss) before income taxes		(45,448	)		1,457		7,564		15,397		(24,663	)		(45,693	)

Income tax benefit (provision)		16,019			—		—		—		92	(f)		16,111

Net income (loss)	$	(29,429	)	$	1,457	$	7,564	$	15,397	$	(24,571	)	$	(29,582	)


Net loss per common share:
Basic	$	(0.55	)										$	(0.56	)
Diluted	$	(0.55	)										$	(0.56	)

Weighted average common shares outstanding:
Basic		53,077												53,077
Diluted		53,077												53,077

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.

ENCORE ACQUISITION COMPANY

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2006
(in thousands, except per share amounts)


				Big Horn Acquistion
	Encore			Gooseberry		Elk Basin		Williston		Pro Forma			Pro Forma
	Historical			Historical		Historical		Historical		Adjustments			as Adjusted
Revenues:
Oil	$	346,974		$	12,365	$	63,695	$	108,057	$	—		$	531,091
Natural gas		146,325			—		2,395		7,042		—			155,762
Marketing and other		147,563			—		3,649		—		—			151,212

Total revenues		640,862			12,365		69,739		115,099		—			838,065


Expenses:
Production:
Lease operations		98,194			3,593		7,435		20,576		—			129,798
Production, ad valorem, and severance taxes		49,780			1,625		7,839		9,695		—			68,939
Depletion, depreciation, and amortization		113,463			—		—		—		77,925	(c)		191,388
Exploration		30,519			—		—		—		—			30,519
General and administrative		23,194			—		—		—		—			23,194
Derivative fair value gain		(24,388	)		—		—		—		—			(24,388	)
Marketing and other operating		158,594			—		5,598		—		513	(e)		164,705

Total expenses		449,356			5,218		20,872		30,271		78,438			584,155


Operating income (loss)		191,506			7,147		48,867		84,828		(78,438	)		253,910


Other income (expenses):
Interest		(45,131	)		—		—		—		(35,753	)(d)		(82,529	)
											(1,645	)(b)

Other		1,429			—		—		—		—			1,429

Total other income (expenses)		(43,702	)		—		—		—		(37,398	)		(81,100	)


Income (loss) before income taxes		147,804			7,147		48,867		84,828		(115,836	)		172,810

Income tax benefit (provision)		(55,406	)		—		—		—		(9,377	)(f)		(64,783	)

Net income (loss)	$	92,398		$	7,147	$	48,867	$	84,828	$	(125,213	)	$	108,027


Net income per common share:
Basic	$	1.78											$	2.08
Diluted	$	1.75											$	2.05

Weighted average common shares outstanding:
Basic		51,865												51,865
Diluted		52,736												52,736

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.

ENCORE ACQUISITION COMPANY

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The historical financial information is derived from the historical consolidated financial statements of Encore. The unaudited pro forma balance sheet as of March 31, 2007 has been prepared as if the Williston acquisition and related transactions had taken place on March 31, 2007 (the Big Horn acquisition was completed on March 7, 2007 and therefore included in Encore’s unaudited balance sheet as of March 31, 2007). The unaudited pro forma statement of operations for the year ended December 31, 2006 and for the three months ended March 31, 2007 assumes that the Acquisitions and related transactions occurred on January 1, 2006 (the Big Horn acquisition was completed on March 7, 2007 and therefore, the operating results from that date through March 31, 2007 are included in Encore’s unaudited statement of operations for the three months ended March 31, 2007).

Note 2. Pro Forma Assumptions and Adjustments

			We made the following adjustments in the preparation of the unaudited pro forma financial statements:

	a)		To record the Williston acquisition for $393.3 million (including estimated transaction costs of approximately $1.2 million) financed with borrowings under Encore’s revolving credit facilities. The allocation of the purchase price to the assets acquired and liabilities assumed is preliminary and, therefore, subject to change. Any future adjustments to the allocation of the purchase price are not expected to have a material effect on Encore’s financial condition, results of operations, or cash flows.

			The calculation of the total purchase price and the allocation to the fair value of the Williston assets acquired and liabilities assumed from Anadarko are as follows (in thousands):


Calculation of total purchase price:
Cash paid to Anadarko	$	392,065
Transaction costs		1,200

Total purchase price	$	393,265


Allocation of purchase price to the fair value of net assets acquired:
Accounts receivable	$	2,746
Proved properties, including wells and related equipment		380,139
Unproved properties		16,134

Total assets acquired		399,019

Current liabilities		(2,053	)
Future abandonment cost		(3,701	)

Total liabilities assumed		(5,754	)

Fair value of net assets acquired	$	393,265

	b)		Reflects the amortization of debt issuance costs over the term of Encore’s revolving credit facilities.

	c)		Reflects the adjustment of additional depletion, depreciation, and amortization of oil and natural gas properties associated with the Acquisitions. Certain plant and pipeline equipment is depreciated on a straight-line basis over estimated useful lives, which range from three to ten years. The remaining capitalized costs are amortized on a unit-of-production basis over the remaining life of total proved developed reserves or proved reserves, as applicable.

	d)		Reflects estimated incremental interest expense associated with borrowings under Encore’s revolving credit facilities to fund the Acquisitions. We assume none of that debt is paid off during the periods covered in the unaudited pro forma consolidated statements of operations. If the LIBOR rate increased 1/8%, we would incur an additional $1.0 million in interest expense for the year ended December 31, 2006, and if the rate decreased 1/8%, we would incur $1.0 million less. If the LIBOR rate increased 1/8%, we would incur an additional $0.2 million in interest expense for the quarter ended March 31, 2007, and if the rate decreased 1/8%, we would incur $0.2 million less.

	e)		Reflects the accretion of discount on amounts accrued for future abandonment costs of the Acquisitions.

	f)		Reflects estimated incremental income tax provision associated with the operating income of the Acquisitions and

ENCORE ACQUISITION COMPANY

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

the pro forma adjustments using a 38.5% and 37.5% incremental tax rate for the three months ended March 31, 2007 and for the year ended December 31, 2006, respectively.

Note 3. Pro Forma Earnings (Loss) Per Share

The following table reflects the pro forma earnings (loss) per share data for the periods indicated:


	Three Months
	Ended			Year Ended
	March 31,			December 31,
	2007			2006
	(in thousands, except per share data)
Numerator:
Pro forma net income (loss)	$	(29,582	)	$	108,027


Denominator:
Denominator for basic EPS:
Weighted average shares outstanding		53,077			51,865
Effect of dilutive options and diluted restricted stock (a)		—			871

Denominator for diluted EPS		53,077			52,736


Pro forma net income (loss) per common share:
Basic	$	(0.56	)	$	2.08
Diluted	$	(0.56	)	$	2.05


(a)		Options to purchase 1,498,202 shares and 190,406 shares of common stock were outstanding but not included in the above calculation of EPS for the three months ended March 31, 2007 and for the year ended December 31, 2006, respectively, because their effect would be antidilutive.

Note 4. Oil & Natural Gas Producing Activities

There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future rates of production and timing of development expenditures. Oil and natural gas reserve engineering is and must be recognized as a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in any exact way, and estimates of other engineers might differ materially from those included herein. The accuracy of any reserve estimate is a function of the quality of available data and engineering, and estimates may justify revisions. Accordingly, reserve estimates are often materially different from the quantities of oil and natural gas that are ultimately recovered. Reserve estimates are integral to management’s analysis of impairments of oil and natural gas properties and the calculation of depletion, depreciation, and amortization on these properties.

Estimated pro forma net quantities of proved oil and natural gas reserves are as follows as of December 31, 2006:


	Encore
	Historical		Big Horn		Williston		Total Pro Forma

Proved reserves:
Oil (MBbl)		153,434		19,074		16,611		189,119
Natural gas (MMcf)		306,764		3,726		15,770		326,260
Combined (MBOE)		204,561		19,695		19,239		243,495
Proved developed reserves:
Oil (MBbl)		94,246		16,695		15,358		126,269
Natural gas (MMcf)		235,049		2,975		15,254		253,278
Combined (MBOE)		133,421		17,161		17,900		168,482

ENCORE ACQUISITION COMPANY

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The changes in pro forma proved reserves were as follows for 2006:


	Encore Historical									Big Horn									Williston									Total Pro Forma
				Natural			Oil						Natural			Oil						Natural			Oil						Natural			Oil
	Oil			Gas			Equivalent			Oil			Gas			Equivalent			Oil			Gas			Equivalent			Oil			Gas			Equivalent
	(MBbl)			(MMcf)			(MBOE)			(MBbl)			(MMcf)			(MBOE)			(MBbl)			(MMcf)			(MBOE)			(MBbl)			(MMcf)			(MBOE)
Balance, December 31, 2005		148,387			283,865			195,698			22,275			7,663			23,553			19,281			16,328			22,002			189,943			307,856			241,253
Acquisitions of minerals-in-place		25			235			64			—			—			—			—			—			—			25			235			64
Extensions and discoveries		3,269			78,861			16,412			—			—			—			422			240			462			3,691			79,101			16,874
Improved recovery		10,935			941			11,092			—			—			—			—			—			—			10,935			941			11,092
Revisions of estimates		(1,847	)		(33,682	)		(7,461	)		(1,664	)		(3,575	)		(2,261	)		(1,280	)		398			(1,214	)		(4,791	)		(36,859	)		(10,936	)
Production		(7,335	)		(23,456	)		(11,244	)		(1,537	)		(362	)		(1,597	)		(1,812	)		(1,196	)		(2,011	)		(10,684	)		(25,014	)		(14,852	)

Balance, December 31, 2006		153,434			306,764			204,561			19,074			3,726			19,695			16,611			15,770			19,239			189,119			326,260			243,495

Reserves for the Big Horn acquisition as of December 31, 2005 as shown in the table above are derived from unaudited footnotes to the Statements of Revenues and Direct Operating Expenses of the Anadarko Elk Basin Operations and the Anadarko Gooseberry Operations. Reserves for the Williston acquisition as of December 31, 2006 and 2005 as shown in the table above are derived from unaudited footnotes to the Statements of Revenues and Direct Operating Expenses of the Anadarko Williston Operations. Reserves for the Big Horn acquisition as of December 31, 2006 as shown in the table above were estimated by our internal engineering staff. These reserve amounts for the Big Horn acquisition as of December 31, 2006 differ from the reserves at December 31, 2006 included in the unaudited footnotes to the Statements of Revenues and Direct Operating Expenses of the Anadarko Elk Basin Operations and the Anadarko Gooseberry Operations. Proved reserves and future net revenues as of December 31, 2006 and 2005 were estimated in accordance with the standards of the Securities and Exchange Commission Regulation S-X, Rule 4-10 (a). Differences in the two reserves estimates are based on the following reasons. Future forecasts of production volumes and future net revenues as of December 31, 2005 were based on the prevailing direct operating expenses, field performance and market pricing conditions combined to calculate an economic life for the properties. As of December 31, 2006, the prevailing economic environment changed, including direct operating expenses, field performance and market pricing conditions, leading to a different forecast of the economic life for the properties. The combination of these changes has resulted in a reduction to reserves. The amounts by which these reserve estimates differ at December 31, 2006 has been included as a revision of quantity estimates in the above table. The decrease in reserves attributable to revisions can be attributed to (1) different expectations as to future decline rates and the resultant property lives, (2) available time to perform engineering analysis required before undeveloped reserves can meet the criteria for being considered proved, (3) availability of geographical and/or geophysical information for the properties, (4) overall familiarity with the properties and availability of reliable data needed to calculate expected future yield of natural gas liquids, (5) differing expectations regarding the number of years over which liquids extraction is expected to be profitable and therefore the total volume of liquids included in reserves, and (6) noticeably lower natural gas prices at December 31, 2006 as compared to at December 31, 2005.

The pro forma standardized measure of discounted estimated future net cash flows was as follows as of December 31, 2006:


	Encore
	Historical			Big Horn			Williston			Total Pro Forma
	(in thousands)
Net future cash inflows	$	9,291,007		$	947,417		$	956,312		$	11,194,736
Future production costs		(3,803,000	)		(359,861	)		(375,445	)		(4,538,306	)
Future development costs		(371,396	)		(22,907	)		(19,786	)		(414,089	)
Future income tax expense		(1,499,290	)		(57,084	)		(190,818	)		(1,747,192	)

Future net cash flows		3,617,321			507,565			370,263			4,495,149
10% annual discount		(2,155,514	)		(231,679	)		(171,443	)		(2,558,636	)

Standardized measure of discounted estimated
future net cash flows	$	1,461,807		$	275,886		$	198,820		$	1,936,513

ENCORE ACQUISITION COMPANY

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The primary changes in the pro forma standardized measure of discounted estimated future net cash flows were as follows for 2006:


	Encore
	Historical			Big Horn			Williston			Total Pro Forma
	(in thousands)
Standardized measure, beginning of year	$	1,918,471		$	230,738		$	244,981		$	2,394,190
Net change in sales price and production costs		(634,033	)		204,794			5,884			(423,355	)
Acquisitions of minerals-in-place		539			—			—			539
Extensions, discoveries, and improved recovery		141,211			—			10,478			151,689
Revisions of quantity estimates		(62,615	)		(77,823	)		(20,486	)		(160,924	)
Sales, net of production costs		(340,036	)		(52,170	)		(84,828	)		(477,034	)
Development costs incurred during the year		253,484			2,382			33,889			289,755
Accretion of discount		191,847			23,074			37,210			252,131
Change in estimated future development costs		(185,212	)		(5,750	)		(21,323	)		(212,285	)
Net change in income taxes		248,491			(13,050	)		24,667			260,108
Change in timing and other		(70,340	)		(36,309	)		(31,652	)		(138,301	)

Standardized measure, end of year	$	1,461,807		$	275,886		$	198,820		$	1,936,513

The changes in standardized measure in the above table for the Acquisitions differ from the amounts disclosed in an unaudited footnote to the Statements of Revenues and Direct Operating Expenses of the Anadarko Elk Basin Operations and the Anadarko Gooseberry Operations due to differences in estimated proved reserves at December 31, 2006 as described above.