Alberta, Canada | 001-32714 | 98-0570897 |
Delaware | 001-35211 | 38-3531640 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1331 Lamar Street, Suite 650 | ||
Houston, Texas | 77010 | |
(Address of principal executive offices) | (ZIP Code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
2.1* | Purchase and Sale Agreement, dated April 19, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714). |
2.2 | First Amendment of Purchase and Sale Agreement, dated as of June 11, 2013, but effective as of June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714). |
2.3 | Second Amendment of Purchase and Sale Agreement, dated as of June 27, 2013, but effective as June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 3, 2013. File No. 001-32714). |
2.4 | Third Amendment of Purchase and Sale Agreement, dated as of July 11, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 17, 2013. File No. 001-32714). |
2.5 | Fourth Amendment of Purchase and Sale Agreement, dated as of July 31, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated August 6, 2013. File No. 001-32714). |
2.6 | Fifth Amendment of Purchase and Sale Agreement, dated as of August 29, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated September 3, 2013. File No. 001-32714). |
2.7 | Sixth Amendment of Purchase and Sale Agreement, dated as of September 20, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated September 23, 2013. File No. 001-32714). |
2.8 | Cubic Letter Agreement, dated as of September 30, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated October 4, 2013. File No. 001-32714). |
99.1 | Unaudited Pro Forma Financial Information. |
* | Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and similar attachments were not previously filed. The registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request. |
Date: October 8, 2013 | GASTAR EXPLORATION LTD. | ||
By: | /s/ J. Russell Porter | ||
J. Russell Porter | |||
President and Chief Executive Officer | |||
GASTAR EXPLORATION USA, INC. | |||
By: | /s/ J. Russell Porter | ||
J. Russell Porter | |||
President |
2.1* | Purchase and Sale Agreement, dated April 19, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Quarterly Report on Form 10-Q dated May 2, 2013. File No. 001-32714). |
2.2 | First Amendment of Purchase and Sale Agreement, dated as of June 11, 2013, but effective as of June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K dated June 12, 2013. File No. 001-32714). |
2.3 | Second Amendment of Purchase and Sale Agreement, dated as of June 27, 2013, but effective as June 5, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 3, 2013. File No. 001-32714). |
2.4 | Third Amendment of Purchase and Sale Agreement, dated as of July 11, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated July 17, 2013. File No. 001-32714). |
2.5 | Fourth Amendment of Purchase and Sale Agreement, dated as of July 31, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated August 6, 2013. File No. 001-32714). |
2.6 | Fifth Amendment of Purchase and Sale Agreement, dated as of August 29, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated September 3, 2013. File No. 001-32714). |
2.7 | Sixth Amendment of Purchase and Sale Agreement, dated as of September 20, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated September 23, 2013. File No. 001-32714). |
2.8 | Cubic Letter Agreement, dated as of September 30, 2013, by and among Gastar Exploration Texas, LP, Gastar Exploration USA, Inc. and Cubic Energy, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated October 4, 2013. File No. 001-32714). |
99.1 | Unaudited Pro Forma Financial Information. |
* | Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and similar attachments were not previously filed. The registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request. |
Pro Forma Adjustments | |||||||||||||||||||
Gastar LTD | AMI | Newfield | East Texas | ||||||||||||||||
Historical | Election | Divestiture | Divestiture | Pro Forma | |||||||||||||||
(in thousands, except share data) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | 10,799 | $ | 12,123 | (a) | $ | 54,052 | (a) | $ | 41,589 | (a) | $ | 118,563 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $540 | 10,344 | — | — | — | 10,344 | ||||||||||||||
Commodity derivative contracts | 2,835 | — | — | — | 2,835 | ||||||||||||||
Prepaid expenses | 838 | — | — | — | 838 | ||||||||||||||
Total current assets | 24,816 | 12,123 | 54,052 | 41,589 | 132,580 | ||||||||||||||
PROPERTY, PLANT AND EQUIPMENT: | |||||||||||||||||||
Natural gas and oil properties, full cost method of accounting: | |||||||||||||||||||
Unproved properties, excluded from amortization | 152,665 | (7,100 | ) | (b) | (54,052 | ) | (b) | — | 91,513 | ||||||||||
Proved properties | 762,747 | (5,023 | ) | (b) | — | (48,233 | ) | (b) | 709,491 | ||||||||||
Total natural gas and oil properties | 915,412 | (12,123 | ) | (54,052 | ) | (48,233 | ) | 801,004 | |||||||||||
Furniture and equipment | 2,076 | — | — | 2,076 | |||||||||||||||
Total property, plant and equipment | 917,488 | (12,123 | ) | (54,052 | ) | (48,233 | ) | 803,080 | |||||||||||
Accumulated depreciation, depletion and amortization | (497,720 | ) | — | — | (497,720 | ) | |||||||||||||
Total property, plant and equipment, net | 419,768 | (12,123 | ) | (54,052 | ) | (48,233 | ) | 305,360 | |||||||||||
OTHER ASSETS: | |||||||||||||||||||
Commodity derivative contracts | 1,753 | — | — | — | 1,753 | ||||||||||||||
Deferred charges, net | 2,170 | — | — | — | 2,170 | ||||||||||||||
Advances to operators and other assets | 1,701 | — | — | — | 1,701 | ||||||||||||||
Total other assets | 5,624 | — | — | — | 5,624 | ||||||||||||||
TOTAL ASSETS | $ | 450,208 | $ | — | $ | — | $ | (6,644 | ) | $ | 443,564 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||
Accounts payable | $ | 25,413 | $ | — | $ | — | $ | — | $ | 25,413 | |||||||||
Revenue payable | 13,742 | — | — | — | 13,742 | ||||||||||||||
Accrued interest | 2,173 | — | — | — | 2,173 | ||||||||||||||
Accrued drilling and operating costs | 3,637 | — | — | — | 3,637 | ||||||||||||||
Advances from non-operators | 30,414 | — | — | — | 30,414 | ||||||||||||||
Commodity derivative contracts | 253 | — | — | — | 253 | ||||||||||||||
Asset retirement obligation | 358 | — | — | — | 358 | ||||||||||||||
Other accrued liabilities | 5,211 | — | — | (2,300 | ) | (c) | 2,911 | ||||||||||||
Total current liabilities | 81,201 | — | — | (2,300 | ) | 78,901 | |||||||||||||
LONG-TERM LIABILITIES: | |||||||||||||||||||
Long-term debt | 194,609 | — | — | — | 194,609 | ||||||||||||||
Asset retirement obligation | 8,235 | — | — | (4,344 | ) | (d) | 3,891 | ||||||||||||
Other accrued liabilities | 274 | — | — | — | 274 | ||||||||||||||
Total long-term liabilities | 203,118 | — | — | (4,344 | ) | 198,774 | |||||||||||||
Commitments and contingencies | |||||||||||||||||||
SHAREHOLDERS' EQUITY: | |||||||||||||||||||
Common stock, no par value; unlimited shares authorized; 61,593,024 shares issued and outstanding at June 30, 2013 | 306,593 | — | — | — | 306,593 | ||||||||||||||
Additional paid-in capital | 30,059 | — | — | — | 30,059 | ||||||||||||||
Accumulated deficit | (247,537 | ) | — | — | — | (247,537 | ) | ||||||||||||
Total shareholders' equity | 89,115 | — | — | — | 89,115 | ||||||||||||||
Non-controlling interest: | |||||||||||||||||||
Preferred stock of subsidiary, aggregate liquidation preference $98,954 at June 30, 2013 | 76,774 | — | — | — | 76,774 | ||||||||||||||
Total equity | 165,889 | — | — | — | 165,889 | ||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 450,208 | $ | — | $ | — | $ | (6,644 | ) | $ | 443,564 |
Pro Forma Adjustments | |||||||||||||||
Gastar LTD Historical | Hunton Transaction (1) | East Texas Divestiture | |||||||||||||
Pro Forma | |||||||||||||||
(in thousands, except share data) | |||||||||||||||
REVENUES: | |||||||||||||||
Natural gas | $ | 23,277 | $ | 1,940 | (e) | $ | (5,345 | ) | (j) | $ | 19,872 | ||||
Condensate and oil | 14,143 | 2,260 | (e) | (700 | ) | (j) | 15,703 | ||||||||
NGLs | 6,922 | 207 | (e) | — | 7,129 | ||||||||||
Total natural gas, oil and NGLs revenues | 44,342 | 4,407 | (6,045 | ) | 42,704 | ||||||||||
Unrealized hedge loss | (2,152 | ) | — | — | (2,152 | ) | |||||||||
Total revenues | 42,190 | 4,407 | (6,045 | ) | 40,552 | ||||||||||
EXPENSES: | |||||||||||||||
Production taxes | 1,793 | 227 | (f) | (8 | ) | (k) | 2,012 | ||||||||
Lease operating expenses | 4,006 | 1,255 | (f) | (1,738 | ) | (k) | 3,523 | ||||||||
Transportation, treating and gathering | 2,288 | 56 | (f) | (1,867 | ) | (k) | 477 | ||||||||
Depreciation, depletion and amortization | 12,961 | 814 | (g) | (2,825 | ) | (l) | 10,950 | ||||||||
Accretion of asset retirement obligation | 216 | 61 | (h) | (105 | ) | (m) | 172 | ||||||||
General and administrative expense | 7,966 | — | — | 7,966 | |||||||||||
Litigation settlement expense | 1,000 | — | — | 1,000 | |||||||||||
Total expenses | 30,230 | 2,413 | (6,543 | ) | 26,100 | ||||||||||
INCOME FROM OPERATIONS | 11,960 | 1,994 | 498 | 14,452 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain on acquisition of assets at fair value | 43,712 | — | — | 43,712 | |||||||||||
Interest expense | (4,154 | ) | (4,401 | ) | (i) | — | (8,555 | ) | |||||||
Investment income and other | 8 | — | — | 8 | |||||||||||
Foreign transaction loss | (12 | ) | — | — | (12 | ) | |||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 51,514 | (2,407 | ) | 498 | 49,605 | ||||||||||
Provision for income taxes | — | — | — | — | |||||||||||
NET INCOME | 51,514 | (2,407 | ) | 498 | 49,605 | ||||||||||
Dividend on preferred stock attributable to non-controlling interest | (4,264 | ) | — | — | (4,264 | ) | |||||||||
NET INCOME ATTRIBUTABLE TO GASTAR EXPLORATION LTD. | $ | 47,250 | $ | (2,407 | ) | $ | 498 | $ | 45,341 | ||||||
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO GASTAR EXPLORATION LTD. COMMON SHAREHOLDERS: | |||||||||||||||
Basic | $ | 0.75 | $ | 0.79 | |||||||||||
Diluted | $ | 0.74 | $ | 0.78 | |||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||
Basic | 63,089,987 | (5,882,528 | ) | (o) | — | 57,207,459 | |||||||||
Diluted | 63,699,525 | (5,882,528 | ) | (o) | — | 57,816,997 |
Pro Forma Adjustments | |||||||||||||||
Gastar LTD Historical | Hunton Transaction | East Texas Divestiture | |||||||||||||
Pro Forma | |||||||||||||||
(in thousands, except share data) | |||||||||||||||
REVENUES: | |||||||||||||||
Natural gas | $ | 33,829 | $ | 4,179 | (e) | $ | (10,101 | ) | (j) | $ | 27,907 | ||||
Condensate and oil | 12,377 | 7,080 | (e) | (1,452 | ) | (j) | 18,005 | ||||||||
NGLs | 9,300 | 681 | (e) | — | 9,981 | ||||||||||
Total natural gas, oil and NGLs revenues | 55,506 | 11,940 | (11,553 | ) | 55,893 | ||||||||||
Unrealized hedge loss | (5,566 | ) | — | — | (5,566 | ) | |||||||||
Total revenues | 49,940 | 11,940 | (11,553 | ) | 50,327 | ||||||||||
EXPENSES: | |||||||||||||||
Production taxes | 2,269 | 555 | (f) | (84 | ) | (k) | 2,740 | ||||||||
Lease operating expenses | 6,174 | 3,175 | (f) | (3,624 | ) | (k) | 5,725 | ||||||||
Transportation, treating and gathering | 4,965 | 121 | (f) | (3,746 | ) | (k) | 1,340 | ||||||||
Depreciation, depletion and amortization | 25,424 | 3,389 | (g) | (9,360 | ) | (l) | 19,453 | ||||||||
Impairment of natural gas and oil properties | 150,787 | — | — | 150,787 | |||||||||||
Accretion of asset retirement obligation | 388 | 160 | (h) | (215 | ) | (m) | 333 | ||||||||
General and administrative expense | 12,211 | — | — | 12,211 | |||||||||||
Litigation settlement expense | 1,250 | — | — | 1,250 | |||||||||||
Total expenses | 203,468 | 7,400 | (17,029 | ) | 193,839 | ||||||||||
LOSS FROM OPERATIONS | (153,528 | ) | 4,540 | 5,476 | (143,512 | ) | |||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (270 | ) | (12,516 | ) | (i) | (1,396 | ) | (n) | (14,182 | ) | |||||
Investment income and other | 9 | — | — | 9 | |||||||||||
Foreign transaction loss | (2 | ) | — | — | (2 | ) | |||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (153,791 | ) | (7,976 | ) | 4,080 | (157,687 | ) | ||||||||
Provision for income taxes | — | — | — | — | |||||||||||
NET LOSS | (153,791 | ) | (7,976 | ) | 4,080 | (157,687 | ) | ||||||||
Dividend on preferred stock attributable to non-controlling interest | (7,077 | ) | — | — | (7,077 | ) | |||||||||
NET LOSS ATTRIBUTABLE TO GASTAR EXPLORATION LTD. | $ | (160,868 | ) | $ | (7,976 | ) | $ | 4,080 | $ | (164,764 | ) | ||||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO GASTAR EXPLORATION LTD. COMMON SHAREHOLDERS: | |||||||||||||||
Basic | $ | (2.53 | ) | $ | (2.92 | ) | |||||||||
Diluted | $ | (2.53 | ) | $ | (2.92 | ) | |||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||
Basic | 63,538,362 | (6,781,768 | ) | (o) | — | 56,756,594 | |||||||||
Diluted | 63,538,362 | (6,781,768 | ) | (o) | — | 56,756,594 |
Pro Forma Adjustments | |||||||||||||||||||
Gastar USA | AMI | Newfield | East Texas | ||||||||||||||||
Historical | Election | Divestiture | Divestiture | Pro Forma | |||||||||||||||
(in thousands, except share data) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | 10,760 | $ | 12,123 | (a) | $ | 54,052 | (a) | $ | 41,589 | (a) | $ | 118,524 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $540 | 10,344 | — | — | — | 10,344 | ||||||||||||||
Commodity derivative contracts | 2,835 | — | — | — | 2,835 | ||||||||||||||
Prepaid expenses | 746 | — | — | — | 746 | ||||||||||||||
Total current assets | 24,685 | 12,123 | 54,052 | 41,589 | 132,449 | ||||||||||||||
PROPERTY, PLANT AND EQUIPMENT: | |||||||||||||||||||
Natural gas and oil properties, full cost method of accounting: | |||||||||||||||||||
Unproved properties, excluded from amortization | 152,665 | (7,100 | ) | (b) | (54,052 | ) | (b) | — | 91,513 | ||||||||||
Proved properties | 762,739 | (5,023 | ) | (b) | — | (48,233 | ) | (b) | 709,483 | ||||||||||
Total natural gas and oil properties | 915,404 | (12,123 | ) | (54,052 | ) | (48,233 | ) | 800,996 | |||||||||||
Furniture and equipment | 2,076 | — | — | — | 2,076 | ||||||||||||||
Total property, plant and equipment | 917,480 | (12,123 | ) | (54,052 | ) | (48,233 | ) | 803,072 | |||||||||||
Accumulated depreciation, depletion and amortization | (497,713 | ) | — | — | — | (497,713 | ) | ||||||||||||
Total property, plant and equipment, net | 419,767 | (12,123 | ) | (54,052 | ) | (48,233 | ) | 305,359 | |||||||||||
OTHER ASSETS: | |||||||||||||||||||
Commodity derivative contracts | 1,753 | — | — | — | 1,753 | ||||||||||||||
Deferred charges, net | 2,170 | — | — | — | 2,170 | ||||||||||||||
Advances to operators and other assets | 1,701 | — | — | — | 1,701 | ||||||||||||||
Total other assets | 5,624 | — | — | — | 5,624 | ||||||||||||||
TOTAL ASSETS | $ | 450,076 | $ | — | $ | — | $ | (6,644 | ) | $ | 443,432 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||
Accounts payable | $ | 25,413 | $ | — | $ | — | $ | — | $ | 25,413 | |||||||||
Revenue payable | 13,742 | — | — | — | 13,742 | ||||||||||||||
Accrued interest | 2,173 | — | — | — | 2,173 | ||||||||||||||
Accrued drilling and operating costs | 3,637 | — | — | — | 3,637 | ||||||||||||||
Advances from non-operators | 30,414 | — | — | — | 30,414 | ||||||||||||||
Commodity derivative contracts | 253 | — | — | — | 253 | ||||||||||||||
Asset retirement obligation | 358 | — | — | — | 358 | ||||||||||||||
Other accrued liabilities | 5,088 | — | — | (2,300 | ) | (c) | 2,788 | ||||||||||||
Total current liabilities | 81,078 | — | — | (2,300 | ) | 78,778 | |||||||||||||
LONG-TERM LIABILITIES: | |||||||||||||||||||
Long-term debt | 194,609 | — | — | — | 194,609 | ||||||||||||||
Asset retirement obligation | 8,228 | — | — | (4,344 | ) | (d) | 3,884 | ||||||||||||
Due to parent | 34,473 | — | — | — | 34,473 | ||||||||||||||
Other accrued liabilities | 274 | — | — | — | 274 | ||||||||||||||
Total long-term liabilities | 237,584 | — | — | (4,344 | ) | 233,240 | |||||||||||||
Commitments and contingencies | |||||||||||||||||||
SHAREHOLDERS' EQUITY: | |||||||||||||||||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 3,958,160 shares issued and outstanding at June 30, 2013 | 40 | — | — | — | 40 | ||||||||||||||
Common stock, no par value; 1,000 shares authorized; 750 shares issued and outstanding | 225,431 | — | — | — | 225,431 | ||||||||||||||
Additional paid-in capital | 76,734 | — | — | — | 76,734 | ||||||||||||||
Accumulated deficit | (170,791 | ) | — | — | — | (170,791 | ) | ||||||||||||
Total shareholders' equity | 131,414 | — | — | — | 131,414 | ||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 450,076 | $ | — | $ | — | $ | (6,644 | ) | $ | 443,432 |
Pro Forma Adjustments | |||||||||||||||
Gastar USA | Hunton | East Texas | |||||||||||||
Historical | Transaction(1) | Divestiture | Pro Forma | ||||||||||||
(in thousands) | |||||||||||||||
REVENUES: | |||||||||||||||
Natural gas | $ | 23,277 | $ | 1,940 | (e) | $ | (5,345 | ) | (j) | $ | 19,872 | ||||
Condensate and oil | 14,143 | 2,260 | (e) | (700 | ) | (j) | 15,703 | ||||||||
NGLs | 6,922 | 207 | (e) | — | 7,129 | ||||||||||
Total natural gas, oil and NGLs revenues | 44,342 | 4,407 | (6,045 | ) | 42,704 | ||||||||||
Unrealized hedge loss | (2,152 | ) | — | — | (2,152 | ) | |||||||||
Total revenues | 42,190 | 4,407 | (6,045 | ) | 40,552 | ||||||||||
EXPENSES: | |||||||||||||||
Production taxes | 1,793 | 227 | (f) | (8 | ) | (k) | 2,012 | ||||||||
Lease operating expenses | 4,006 | 1,255 | (f) | (1,738 | ) | (k) | 3,523 | ||||||||
Transportation, treating and gathering | 2,288 | 56 | (f) | (1,867 | ) | (k) | 477 | ||||||||
Depreciation, depletion and amortization | 12,961 | 814 | (g) | (2,825 | ) | (l) | 10,950 | ||||||||
Impairment of natural gas and oil properties | |||||||||||||||
Accretion of asset retirement obligation | 216 | 61 | (h) | (105 | ) | (m) | 172 | ||||||||
General and administrative expense | 7,397 | — | — | 7,397 | |||||||||||
Litigation settlement expense | 1,000 | — | — | 1,000 | |||||||||||
Total expenses | 29,661 | 2,413 | (6,543 | ) | 25,531 | ||||||||||
INCOME FROM OPERATIONS | 12,529 | 1,994 | 498 | 15,021 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain on acquisition of assets at fair value | 43,712 | — | — | 43,712 | |||||||||||
Interest expense | (4,154 | ) | (4,401 | ) | (i) | — | (8,555 | ) | |||||||
Investment income and other | 2 | — | — | 2 | |||||||||||
Foreign transaction loss | (8 | ) | — | — | (8 | ) | |||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 52,081 | (2,407 | ) | 498 | 50,172 | ||||||||||
Provision for income taxes | — | — | — | — | |||||||||||
NET INCOME | 52,081 | (2,407 | ) | 498 | 50,172 | ||||||||||
Dividend on preferred stock attributable to non-controlling interest | (4,264 | ) | — | — | (4,264 | ) | |||||||||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDER | $ | 47,817 | $ | (2,407 | ) | $ | 498 | $ | 45,908 |
Pro Forma Adjustments | |||||||||||||||
Gastar USA Historical | Hunton Transaction | East Texas Divestiture | |||||||||||||
Pro Forma | |||||||||||||||
(in thousands) | |||||||||||||||
REVENUES: | |||||||||||||||
Natural gas | $ | 33,829 | $ | 4,179 | (e) | $ | (10,101 | ) | (j) | $ | 27,907 | ||||
Condensate and oil | 12,377 | 7,080 | (e) | (1,452 | ) | (j) | 18,005 | ||||||||
NGLs | 9,300 | 681 | (e) | — | 9,981 | ||||||||||
Total natural gas, oil and NGLs revenues | 55,506 | 11,940 | (11,553 | ) | 55,893 | ||||||||||
Unrealized hedge loss | (5,566 | ) | — | — | (5,566 | ) | |||||||||
Total revenues | 49,940 | 11,940 | (11,553 | ) | 50,327 | ||||||||||
EXPENSES: | |||||||||||||||
Production taxes | 2,269 | 555 | (f) | (84 | ) | (k) | 2,740 | ||||||||
Lease operating expenses | 6,174 | 3,175 | (f) | (3,624 | ) | (k) | 5,725 | ||||||||
Transportation, treating and gathering | 4,965 | 121 | (f) | (3,746 | ) | (k) | 1,340 | ||||||||
Depreciation, depletion and amortization | 25,424 | 3,389 | (g) | (9,360 | ) | (l) | 19,453 | ||||||||
Impairment of natural gas and oil properties | 150,787 | — | — | 150,787 | |||||||||||
Accretion of asset retirement obligation | 388 | 160 | (h) | (215 | ) | (m) | 333 | ||||||||
General and administrative expense | 10,732 | — | — | 10,732 | |||||||||||
Litigation settlement expense | 1,250 | — | — | 1,250 | |||||||||||
Total expenses | 201,989 | 7,400 | (17,029 | ) | 192,360 | ||||||||||
LOSS FROM OPERATIONS | (152,049 | ) | 4,540 | 5,476 | (142,033 | ) | |||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (271 | ) | (12,516 | ) | (i) | (1,396 | ) | (n) | (14,183 | ) | |||||
Investment income and other | (4 | ) | — | — | (4 | ) | |||||||||
Foreign transaction gain | 2 | — | — | 2 | |||||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (152,322 | ) | (7,976 | ) | 4,080 | (156,218 | ) | ||||||||
Provision for income taxes | — | — | — | — | |||||||||||
NET LOSS | (152,322 | ) | (7,976 | ) | 4,080 | (156,218 | ) | ||||||||
Dividend on preferred stock attributable to non-controlling interest | (7,077 | ) | — | — | (7,077 | ) | |||||||||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDER | $ | (159,399 | ) | $ | (7,976 | ) | $ | 4,080 | $ | (163,295 | ) |
1. |
1. | Pro Forma Adjustments |
(a) | To record the net cash proceeds received for the AMI Election, the Newfield Divestiture and the East Texas Divestiture. The Newfield Divestiture cash proceeds are net of customary adjustments and expenses of approximately $6.0 million. The East Texas Divestiture cash proceeds are net of approximately $3.4 million of customary adjustments and $2.3 million of deposit received prior to June 30, 2013. |
(b) | To record the reduction in property, plant and equipment for the net sales proceeds for the AMI Election, the Newfield Divestiture and the East Texas Divestiture and to reduce the property, plant and equipment balance for the related asset retirement obligation costs at June 30, 2013 for the East Texas Divestiture. |
(c) | To record the application of the $2.3 million deposit previously received for the East Texas Divestiture prior to June 30, 2013. |
(d) | To record the reduction in the asset retirement obligation liability at June 30, 2013 for the East Texas Divestiture. |
(e) | To record natural gas, condensate and oil and NGLs sales revenues for the Hunton Transaction for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(f) | To record direct operating expenses for the Hunton Transaction for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(g) | To record additional depreciation, depletion and amortization (“DD&A”) expense for the Hunton Transaction for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(h) | To record additional accretion expense for the Hunton Transaction for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(i) | To record additional interest expense related to the issuance of $200.0 million of senior secured notes at an interest rate of 8.625% issued in part to fund the Chesapeake Acquisition and Chesapeake Share Repurchase, net of (i) interest expensed on any borrowings under the prior revolving credit facility and (ii) additional interest capitalized on unproved properties. |
(j) | To record the reduction in natural gas, condensate and oil sales revenues for the East Texas Divestiture for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(k) | To record the reduction in direct operating expenses for the East Texas Divestiture for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(l) | To record the reduction in DD&A expense for the East Texas Divestiture for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(m) | To record the reduction in accretion expense on the asset retirement obligation for the East Texas Divestiture for the six months ended June 30, 2013 and for the year ended December 31, 2012. |
(n) | To record interest expense, rather than capitalized interest, related to the East Texas unproven property for the year ended December 31, 2012 had the East Texas Divestiture occurred on January 1, 2012. |
(o) | To reflect the incremental impact of the Chesapeake Settlement and Share Repurchase on the weighted average shares outstanding for the six months ended June 30, 2013 and for the year ended December 31, 2012. |