Alabama | 63-0757759 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
605 Richard Arrington Jr. Boulevard North, Birmingham, Alabama 35203-2707 | 35203-2707 | |
(Address of principal executive offices) | (Zip Code) |
(b) | Pro Forma Financial Information |
(d) | Exhibits. |
NUMBER | DESCRIPTION |
99.1 | Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2016, Unaudited Pro Forma Condensed Consolidated Statement of Income for the three months ended March 31, 2016, Unaudited Pro Forma Condensed Consolidated Statement of Income for the three months ended March 31, 2015 and Unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended December 31, 2015 |
July 20, 2016 | By /s/ Charles W. Porter, Jr. | |
Charles W. Porter, Jr. | ||
Vice President, Chief Financial Officer and Treasurer of Energen Corporation |
Exhibit 99.1 | |||||||||||
ENERGEN CORPORATION | |||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET | |||||||||||
AS OF MARCH 31, 2016 | |||||||||||
Pro Forma | |||||||||||
(in thousands, except share data) | As Reported | Adjustments | Pro Forma | ||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | 35,806 | $ | 368,872 | a | $ | 404,678 | ||||
Accounts receivable, net | 61,434 | — | 61,434 | ||||||||
Inventories | 12,185 | — | 12,185 | ||||||||
Assets held for sale | 183,234 | (183,234 | ) | b | — | ||||||
Derivative instruments | 18,810 | — | 18,810 | ||||||||
Prepayments and other | 21,772 | — | 21,772 | ||||||||
Total current assets | 333,241 | 185,638 | 518,879 | ||||||||
Property, Plant and Equipment | |||||||||||
Oil and natural gas properties, successful efforts method | |||||||||||
Proved properties | 7,491,304 | (54,823 | ) | b | 7,436,481 | ||||||
Unproved properties | 117,988 | (17,015 | ) | b | 100,973 | ||||||
Less accumulated depreciation, depletion and amortization | 3,611,302 | (46,511 | ) | b | 3,564,791 | ||||||
Oil and natural gas properties, net | 3,997,990 | (25,327 | ) | 3,972,663 | |||||||
Other property and equipment, net | 47,186 | — | 47,186 | ||||||||
Total property, plant and equipment, net | 4,045,176 | (25,327 | ) | 4,019,849 | |||||||
Other postretirement assets | 4,366 | — | 4,366 | ||||||||
Noncurrent derivative instruments | 148 | — | 148 | ||||||||
Other assets | 10,087 | — | 10,087 | ||||||||
TOTAL ASSETS | $ | 4,393,018 | $ | 160,311 | $ | 4,553,329 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current Liabilities | |||||||||||
Accounts payable | $ | 47,550 | $ | — | $ | 47,550 | |||||
Accrued taxes | 13,230 | — | 13,230 | ||||||||
Accrued wages and benefits | 9,127 | — | 9,127 | ||||||||
Accrued capital costs | 58,221 | — | 58,221 | ||||||||
Revenue and royalty payable | 56,949 | — | 56,949 | ||||||||
Liabilities related to assets held for sale | 14,102 | (14,102 | ) | b | — | ||||||
Derivative instruments | 5,468 | — | 5,468 | ||||||||
Other | 13,215 | — | 13,215 | ||||||||
Total current liabilities | 217,862 | (14,102 | ) | 203,760 | |||||||
Long-term debt | 551,147 | — | 551,147 | ||||||||
Asset retirement obligations | 90,223 | (45 | ) | b | 90,178 | ||||||
Deferred income taxes | 446,335 | 62,805 | d | 509,140 | |||||||
Noncurrent derivative instruments | 273 | — | 273 | ||||||||
Other long-term liabilities | 10,718 | — | 10,718 | ||||||||
Total liabilities | 1,316,558 | 48,658 | 1,365,216 |
Commitments and Contingencies | |||||||||||
Shareholders’ Equity | |||||||||||
Preferred stock, cumulative, $0.01 par value, 5,000,000 shares authorized | — | — | — | ||||||||
Common shareholders’ equity | |||||||||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 100,126,767 shares issued | 1,001 | — | 1,001 | ||||||||
Premium on capital stock | 1,363,178 | — | 1,363,178 | ||||||||
Retained earnings | 1,842,900 | 111,653 | c | 1,954,553 | |||||||
Accumulated other comprehensive income (loss), net of tax | |||||||||||
Pension and postretirement plans | 2,066 | — | 2,066 | ||||||||
Deferred compensation plan | 2,246 | — | 2,246 | ||||||||
Treasury stock, at cost; 3,122,759 shares | (134,931 | ) | — | (134,931 | ) | ||||||
Total shareholders’ equity | 3,076,460 | 111,653 | 3,188,113 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 4,393,018 | $ | 160,311 | $ | 4,553,329 | |||||
Exhibit 99.1 | |||||||||||
ENERGEN CORPORATION | |||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME | |||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2016 | |||||||||||
Pro Forma | |||||||||||
(in thousands, except share data) | As Reported | Adjustments | Pro Forma | ||||||||
Revenues | |||||||||||
Oil, natural gas liquids and natural gas sales | 122,764 | (10,863 | ) | e | 111,901 | ||||||
Gain (loss) on derivative instruments, net | 5,455 | — | 5,455 | ||||||||
Total revenues | 128,219 | (10,863 | ) | 117,356 | |||||||
Operating Costs and Expenses | |||||||||||
Oil, natural gas liquids and natural gas production | 47,727 | (6,232 | ) | e | 41,495 | ||||||
Production and ad valorem taxes | 11,170 | (1,355 | ) | e | 9,815 | ||||||
Depreciation, depletion and amortization | 119,362 | (5,033 | ) | e | 114,329 | ||||||
Asset impairment | 220,025 | (7,576 | ) | e | 212,449 | ||||||
Exploration | 242 | (59 | ) | e | 183 | ||||||
General and administrative | 29,525 | (569 | ) | e | 28,956 | ||||||
Accretion of discount on asset retirement obligations | 1,757 | (249 | ) | e | 1,508 | ||||||
(Gain) loss on sale of assets and other, net | 222 | (142 | ) | e | 80 | ||||||
Total operating costs and expenses | 430,030 | (21,215 | ) | 408,815 | |||||||
Operating Income (Loss) | (301,811 | ) | 10,352 | (291,459 | ) | ||||||
Other Income (Expense) | |||||||||||
Interest expense | (9,833 | ) | — | (9,833 | ) | ||||||
Other income | 95 | (39 | ) | e | 56 | ||||||
Total other expense | (9,738 | ) | (39 | ) | (9,777 | ) | |||||
Income (Loss) Before Income Taxes | (311,549 | ) | 10,313 | (301,236 | ) | ||||||
Income tax expense (benefit) | (108,433 | ) | 3,767 | f | (104,666 | ) | |||||
Net Income (Loss) | $ | (203,116 | ) | $ | 6,546 | $ | (196,570 | ) | |||
Diluted Earnings per Average Common Share | $ | (2.34 | ) | $ | 0.07 | g | $ | (2.27 | ) | ||
Basic Earnings per Average Common Share | $ | (2.34 | ) | $ | 0.07 | g | $ | (2.27 | ) | ||
Diluted Average Common Shares Outstanding | 86,632,378 | 86,632,378 | |||||||||
Common Average Common Shares Outstanding | 86,632,378 | 86,632,378 |
Exhibit 99.1 | |||||||||||
ENERGEN CORPORATION | |||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME | |||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2015 | |||||||||||
Pro Forma | |||||||||||
(in thousands, except share data) | As Reported | Adjustments | Pro Forma | ||||||||
Revenues | |||||||||||
Oil, natural gas liquids and natural gas sales | 187,822 | (13,518 | ) | e | 174,304 | ||||||
Gain (loss) on derivative instruments, net | 34,036 | — | 34,036 | ||||||||
Total revenues | 221,858 | (13,518 | ) | 208,340 | |||||||
Operating Costs and Expenses | |||||||||||
Oil, natural gas liquids and natural gas production | 67,754 | (4,724 | ) | e | 63,030 | ||||||
Production and ad valorem taxes | 19,065 | (1,770 | ) | e | 17,295 | ||||||
Depreciation, depletion and amortization | 134,381 | (9,158 | ) | e | 125,223 | ||||||
Asset impairment | 6,583 | (248 | ) | e | 6,335 | ||||||
Exploration | 763 | (44 | ) | e | 719 | ||||||
General and administrative | 32,055 | (224 | ) | e | 31,831 | ||||||
Accretion of discount on asset retirement obligations | 2,010 | (171 | ) | e | 1,839 | ||||||
(Gain) loss on sale of assets and other, net | (28,344 | ) | (135 | ) | e | (28,479 | ) | ||||
Total operating costs and expenses | 234,267 | (16,474 | ) | 217,793 | |||||||
Operating Income (Loss) | (12,409 | ) | 2,956 | (9,453 | ) | ||||||
Other Income (Expense) | |||||||||||
Interest expense | (11,758 | ) | — | (11,758 | ) | ||||||
Other income | 46 | (13 | ) | e | 33 | ||||||
Total other expense | (11,712 | ) | (13 | ) | (11,725 | ) | |||||
Income (Loss) From Continuing Operations Before Income Taxes | (24,121 | ) | 2,943 | (21,178 | ) | ||||||
Income tax expense (benefit) | (8,701 | ) | 1,059 | f | (7,642 | ) | |||||
Income (Loss) from Continuing Operations | $ | (15,420 | ) | $ | 1,884 | $ | (13,536 | ) | |||
Diluted Earnings per Average Common Share | $ | (0.21 | ) | $ | 0.02 | g | $ | (0.19 | ) | ||
Basic Earnings per Average Common Share | $ | (0.21 | ) | $ | 0.02 | g | $ | (0.19 | ) | ||
Diluted Average Common Shares Outstanding | 72,830,439 | 72,830,439 | |||||||||
Common Average Common Shares Outstanding | 72,830,439 | 72,830,439 |
Exhibit 99.1 | |||||||||||
ENERGEN CORPORATION | |||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME | |||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2015 | |||||||||||
Pro Forma | |||||||||||
(in thousands, except share data) | As Reported | Adjustments | Pro Forma | ||||||||
Revenues | |||||||||||
Oil, natural gas liquids and natural gas sales | $ | 763,261 | $ | (57,918 | ) | e | $ | 705,343 | |||
Gain (loss) on derivative instruments, net | 115,293 | — | 115,293 | ||||||||
Total revenues | 878,554 | (57,918 | ) | 820,636 | |||||||
Operating Costs and Expenses | |||||||||||
Oil, natural gas liquids and natural gas production | 228,380 | (22,478 | ) | e | 205,902 | ||||||
Production and ad valorem taxes | 57,380 | (6,523 | ) | e | 50,857 | ||||||
Depreciation, depletion and amortization | 593,789 | (41,573 | ) | e | 552,216 | ||||||
Asset impairment | 1,292,308 | (186,132 | ) | e | 1,106,176 | ||||||
Exploration | 14,878 | (5,215 | ) | e | 9,663 | ||||||
General and administrative | 149,132 | (3,520 | ) | e | 145,612 | ||||||
Accretion of discount on asset retirement obligations | 7,108 | (888 | ) | e | 6,220 | ||||||
(Gain) loss on sale of assets and other, net | (26,570 | ) | (358 | ) | e | (26,928 | ) | ||||
Total operating costs and expenses | 2,316,405 | (266,687 | ) | 2,049,718 | |||||||
Operating Income (Loss) | (1,437,851 | ) | 208,769 | (1,229,082 | ) | ||||||
Other Income (Expense) | |||||||||||
Interest expense | (43,108 | ) | — | (43,108 | ) | ||||||
Other income | 223 | (96 | ) | e | 127 | ||||||
Total other expense | (42,885 | ) | (96 | ) | (42,981 | ) | |||||
Income (Loss) From Continuing Operations Before Income Taxes | (1,480,736 | ) | 208,673 | (1,272,063 | ) | ||||||
Income tax expense (benefit) | (535,005 | ) | 76,653 | f | (458,352 | ) | |||||
Income (Loss) From Continuing Operations | $ | (945,731 | ) | $ | 132,020 | $ | (813,711 | ) | |||
Diluted Earnings per Average Common Share | |||||||||||
Continuing Operations | $ | (12.43 | ) | $ | 1.73 | g | $ | (10.70 | ) | ||
Basic Earnings per Average Common Share | |||||||||||
Continuing Operations | $ | (12.43 | ) | $ | 1.73 | g | $ | (10.70 | ) | ||
Diluted Average Common Shares Outstanding | 76,078,371 | 76,078,371 | |||||||||
Common Average Common Shares Outstanding | 76,078,371 | 76,078,371 |
1. | Unaudited Pro Forma Condensed Consolidated Balance Sheet Adjustments |
a) | The estimated sales proceeds of $372 million used in the unaudited pro forma condensed consolidated balance sheet were reduced by estimated transaction costs of $3 million. These proceeds do not consider approximately $10.7 million of purchase price adjustments related to the operations of the properties subsequent to the effective dates and other one-time adjustments including transfer payments and certain amounts due the buyer. |
b) | Reflects the removal of the net assets sold the majority of which had been previously identified as held for sale. |
c) | The estimated after-tax net gain on the sale is reflected as an adjustment to retained earnings. The sales proceeds excluding $3 million of transaction costs were offset by $194 million in net assets sold. The estimated tax expense on the gain is approximately $63 million. As the gain is directly attributable to the transactions and is not expected to have a continuing impact on Energen's operations, the estimated gain is only reflected in retained earnings on the unaudited pro forma condensed consolidated balance sheet. |
d) | Deferred income taxes changed due to the anticipated additional net operating loss utilization of approximately $54.4 million and the $8.4 million reversal of deferred tax assets associated with the properties sold. |
2. | Unaudited Pro Forma Condensed Consolidated Statement of Income Adjustments |
e) | Reflects the elimination of the operating results of certain non-core Permian Basin assets in the Delaware Basin and the San Juan Basin assets. |
f) | Income tax expense has been calculated utilizing a blended federal and state statutory tax rate of approximately 36 percent. Income tax expense also includes an additional benefit of $0.1 million for the three months ended March 31, 2016 and an additional benefit of $1.5 million for the year ended December 31, 2015 as a result of re-measuring the Company’s state deferred tax liabilities. This re-measurement reflected the state apportionment changes primarily related to the sale of the San Juan Basin properties. |
g) | The calculations of pro forma basic and diluted earnings per share for the period presented reflect the effect of the above-mentioned revenue and expense items. |