-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, oV2/nDiy8JGCSy4BZF/G6q2KeqKykvqtEmz4OuCdmIRM5wSODS7gnHUom5Ias1YA q+RBOhG/hyzcIJHodCtWGQ== 0000950152-95-000755.txt : 19950427 0000950152-95-000755.hdr.sgml : 19950427 ACCESSION NUMBER: 0000950152-95-000755 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950210 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950426 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELDEN & BLAKE CORP/ CENTRAL INDEX KEY: 0000734778 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 341419840 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08656 FILM NUMBER: 95531572 BUSINESS ADDRESS: STREET 1: 5200 STONEHAM ROAD STREET 2: P O BOX 2500 CITY: NORTH CANTON STATE: OH ZIP: 44720 BUSINESS PHONE: 2164991660 MAIL ADDRESS: STREET 2: 5200 STONEHAM ROAD CITY: NORTH CANTON STATE: OH ZIP: 44720 FORMER COMPANY: FORMER CONFORMED NAME: BELDEN & BLAKE ENERGY CO DATE OF NAME CHANGE: 19920703 8-K/A 1 BELDEN & BLAKE 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) February 10, 1995 AMENDMENT NO. 1 BELDEN & BLAKE CORPORATION -------------------------- (Exact name of registrant as specified in charter) Ohio 0-20100 34-1686642 - --------------- ---------------- -------------------- (State or other (Commission File (IRS Employer Identi- jurisdiction of Number) fication No.) incorporation) 5200 Stoneham Road, North Canton, Ohio 44720 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (216) 499-1660 ------------- ________________________________________________________________________________ (Former name or former address, if changed since last report) 2 Item 7. Financial Statements -------------------- (a) Financial Statements of Business Acquired See Index to Financial Statements (b) Pro Forma Financial Information See Index to Financial Statements Signatures - ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 26, 1995 BELDEN & BLAKE CORPORATION (Registrant) By: /s/ Ronald E. Huff ------------------------- Ronald E. Huff, Senior Vice President and Chief Financial Officer 3 BELDEN & BLAKE CORPORATION INDEX TO FINANCIAL STATEMENTS CONTENTS
Page ---- HISTORICAL FINANCIAL STATEMENTS OF WARD LAKE DRILLING, INC. Report of Independent Auditors F-1 Balance Sheet F-2 Statement of Revenues and Expenses and Retained Earnings F-4 Statement of Cash Flows F-5 Notes to Financial Statements F-6 UNAUDITED PRO FORMA FINANCIAL STATEMENTS Unaudited Pro Forma Consolidated Balance Sheet F-14 Unaudited Pro Forma Consolidated Statement of Operations F-16 Notes to Unaudited Pro Forma Financial Statements F-17
4 REPORT OF INDEPENDENT AUDITORS Board of Directors Ward Lake Drilling, Inc. We have audited the accompanying balance sheet of Ward Lake Drilling, Inc. as of December 31, 1994, and the related statements of revenues and expenses and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ward Lake Drilling, Inc. at December 31, 1994, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. ERNST & YOUNG LLP February 24, 1995 F-1 5 WARD LAKE DRILLING, INC. BALANCE SHEET December 31, 1994 ASSETS Current assets: Cash and cash equivalents $ 2,667,287 Marketable securities 1,926,317 Accounts receivable (less allowance for doubtful accounts of $27,000) 2,513,352 Accounts receivable--related parties 2,182,000 Inventories 102,790 Other current assets 71,489 ------------ Total current assets 9,463,235 Property and equipment: Oil and gas properties (operated) 1,663,292 Oil and gas properties (non-operated) 5,308,065 Land, buildings, machinery and equipment 1,083,738 ------------ 8,055,095 Less accumulated depreciation, depletion and amortization 1,344,464 ------------ 6,710,631 Other long-term assets 351,297 ------------ Total assets $ 16,525,163 ============
F-2 6 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,003,329 Accounts payable--related parties 598,813 Accrued and other expenses 2,832,395 Notes payable and other short-term debt 3,176,783 Notes payable--related parties 280,000 Current portion of long-term liabilities 1,035,000 ------------ Total current liabilities 11,926,320 Notes payable and other long-term debt 968,447 Shareholders' equity: Common stock, $1 par value; 50,000 shares authorized, issued and outstanding 50,000 Retained earnings 3,580,396 ------------ Total shareholders' equity 3,630,396 ------------ Total liabilities and shareholders' equity $ 16,525,163 ============
See accompanying notes. F-3 7 WARD LAKE DRILLING, INC. STATEMENT OF REVENUES AND EXPENSES AND RETAINED EARNINGS Year ended December 31, 1994 Revenues: Oil and gas activities: Production revenue $3,540,171 Well operating revenue 3,049,694 Interest and other 743,878 ---------- 7,333,743 Expenses: Production and well operating expense 3,361,007 Exploration expense 28,313 General and administrative expense 1,835,369 Interest expense 419,737 Depreciation, depletion and amortization 756,232 ---------- 6,400,658 ---------- Net income 933,085 Retained earnings at beginning of year 3,539,109 Distributions to shareholders (891,798) ---------- Retained earnings at end of year $3,580,396 ==========
See accompanying notes. F-4 8 WARD LAKE DRILLING, INC. STATEMENT OF CASH FLOWS Year ended December 31, 1994 OPERATING ACTIVITIES Net income $ 933,085 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 756,232 Loss on disposal of oil and gas property and property and equipment 67,713 Changes in operating assets and liabilities, net of effects of purchases of businesses: Accounts receivable 1,164,376 Prepaids and other current assets (122,681) Inventories 82,158 Accounts payable and accrued expenses (3,384,654) ---------- Net cash used in operating activities (503,771) INVESTING ACTIVITIES Proceeds from sale of oil and gas properties and other property and equipment 125,813 Additions to oil and gas properties (1,097,056) ---------- Net cash used in investing activities (971,243) FINANCING ACTIVITIES Proceeds from long-term debt 6,838,328 Repayment of long-term debt (4,625,177) Distributions to shareholders (782,087) ---------- Net cash provided by financing activities 1,431,064 ---------- Decrease in cash and cash equivalents (43,950) Cash and cash equivalents at beginning of year 2,711,237 ---------- Cash and cash equivalents at end of year $2,667,287 ==========
See accompanying notes. F-5 9 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS December 31, 1994 1. ORGANIZATION AND NATURE OF BUSINESS Ward Lake Drilling, Inc. (the "Company"), a Michigan subchapter S Corporation, is a domestic, independent oil and gas exploration and production company. 2. ACCOUNTING POLICIES CASH EQUIVALENTS AND MARKETABLE SECURITIES For purposes of the statement of cash flows, cash equivalents are defined as all highly liquid debt instruments purchased with an initial maturity of three months or less. Marketable securities, principally U.S. Government securities, are treated as available for sale securities and are stated at cost which approximates fair value. INVENTORIES Inventories consist primarily of oil field casing and tubular goods utilized in the Company's exploration activities and are valued at the lower of cost (first-in, first-out method) or market. PROPERTY AND EQUIPMENT The Company follows the successful efforts method of accounting for its oil and gas producing activities. Acquisition costs for proved and unproved properties are capitalized when incurred. Costs of unproved properties are transferred to proved properties when proved reserves are discovered. Exploration costs, including geological and geophysical costs and costs of carrying and retaining unproved properties, are charged against income as incurred. Exploratory drilling costs are capitalized initially; however, if it is determined that an exploratory well does not contain sufficient proved reserves, such capitalized costs are charged to expense, as dry hole costs, at that time. Development costs are capitalized. Costs incurred to operate and maintain wells and equipment and to lift oil and gas to the surface are generally expensed. The net costs of proved oil and gas properties are annually subjected to a test of recoverability on a property by property basis by comparison to their estimated present value of future net cash flows from proved reserves. Unproved oil and gas properties are also subjected to an impairment test. Any capitalized costs in excess of future net cash flows are expensed in the year in which such an excess occurs. F-6 10 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS (continued) 2. ACCOUNTING POLICIES (CONTINUED) Depreciation, depletion and amortization of oil and gas properties are computed on a units-of-production method based on proven reserves. The provision for depreciation, depletion and amortization is calculated by applying the ratio of current production divided by beginning reserves to net capitalized property costs. Other property and equipment are recorded at cost, and depreciation is calculated using the straight-line and declining balance methods over the respective estimated useful lives of the assets. INCOME TAXES The Company has elected to be taxed as a subchapter S Corporation. As a result, earnings are not subject to the federal or state corporation income taxes but are S-Corp earnings allocated to the shareholders of the Company for inclusion on their personal income tax returns. 3. PROPERTY AND EQUIPMENT Property and equipment consist of the following at December 31: Land, buildings and improvements $ 402,043 Machinery and equipment 681,695 ---------- 1,083,738 Less accumulated depreciation 444,105 ---------- $ 639,633 ==========
4. OIL AND GAS PROPERTIES Oil and gas properties consist of the following at December 31: Non operated properties $5,308,065 Operated properties 1,663,292 ---------- 6,971,357 Less accumulated depletion 900,359 ---------- $6,070,998 ==========
F-7 11 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. CERTIFICATES OF DEPOSIT The United States Environmental Protection Agency (EPA) requires that an owner or operator of a disposal well will provide assurance that funds will be available when needed for plugging and abandonment of the disposal well. The Company had entered into a trust agreement with the EPA, providing that the Company establish a trust fund for the benefit of the EPA. This fund is comprised of certificates of deposit totaling approximately $332,000 which are held for the life of each disposal well. Funds are disbursed under direction of the EPA for the costs of plugging and abandonment of the disposal well. These amounts are included in other long-term assets. 6. PLUGGING AND ABANDONMENT FUNDS The Company retains a portion of its own and outside investors' monthly gas and oil production proceeds to be utilized for future well plugging and abandonment costs. The funds totaling $1,926,317 at December 31, 1994, are invested in securities issued or guaranteed by the United States Treasury and maintained in accounts segregated from those of the Company. Interest earned on the funds accrue to the benefit of the working interest owners. 7. LONG-TERM DEBT AND NOTES PAYABLE
Long-term debt and notes payable consist of the following as of December 31, 1994: Notes payable to bank, monthly payments of $83,333 plus interest at 7.375%, concluding September 30, 1996, collateralized by all assets of the Company $1,833,333 Notes payable to banks, monthly payments totaling $2,192, including interest rates ranging from prime plus 1% to 10.25%, concluding with balloon payments of approximately $104,150 in November 1996, collateralized by real estate mortgages 130,819 Notes payable to bank, monthly payments of $1,405, including interest rates up to 7.4%, concluding at various dates through April 1997, collateralized by specific equipment and vehicles 39,295 --------- 2,003,447 Less current portion of long-term debt 1,035,000 --------- Total long-term debt $ 968,447 =========
F-8 12 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 7. LONG-TERM DEBT AND NOTES PAYABLE (CONTINUED) At December 31, 1994, the aggregate long-term debt maturing in the next three years is as follows: 1995--$1,035,000; 1996--$962,793 and 1997--$5,654. At December 31, 1994, the Company has a revolving credit line with a maximum amount available of $3,000,000 and interest payable monthly at 10%. The Company also has a line-of-credit with a maximum amount available of $1,000,000 and interest payable monthly at prime rate, as adjusted (10.5% at December 31, 1994). The amounts outstanding on these loans totaled $3,176,783 at December 31, 1994. 8. LEASES The Company has entered into certain noncancellable leasing agreements for gas compression equipment used on gas wells. These operating leases are generally for three to five year terms, which are renewable. The Company has also entered into noncancellable operating lease agreements for its office space and vehicles. The following is a schedule by year of the estimated future minimum rental payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of December 31, 1994:
COMPANY TOTAL PORTION ------------------------------- 1995 $2,005,000 $361,000 1996 1,316,000 237,000 1997 873,000 157,000 1998 544,000 98,000 1999 and thereafter 284,000 51,000 ------------- ----------- $5,022,000 $904,000 ============= ===========
The above rental payments attributable to the gas compression leases in the total column represent the total rental payments due under the leases as of December 31, 1994. The Company, as operator, has signed these leases and is contingently liable. The Company bills the working interest investors participating in each project for their portion of the monthly rental payments. The Company's total rental expense for all operating leases for the year ended December 31, 1994 is approximately $478,000. F-9 13 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 9. RETIREMENT PLAN The Company has a 401(k) profit-sharing plan. Employees are eligible to participate 90 days after date of hire. The Company will match fifty percent of the employee's contribution to a maximum of three percent of the employee's pay. The Company can also make a discretionary contribution to the plan. The Company's contributions for the 1994 plan year was approximately $31,000. 10. RELATED PARTY TRANSACTIONS The Company advanced funds to shareholders in the amount of $2,182,000 which are classified as accounts receivable-related parties. As described in Note 14, these notes were cancelled subsequent to December 31, 1994 and treated as a capital transaction. The shareholders of the Company are also shareholders of Antrim Services, Inc. (Antrim). Antrim provides construction services related to the construction of wells, pipelines and facilities. Total fees for these services amounted to approximately $1,400,000 in 1994. In addition, the Company purchased fixed assets from Antrim amounting to approximately $500,000. The Company owed Antrim approximately $600,000 at December 31, 1994. Antrim owed the Company approximately $11,500 at December 31, 1994. These amounts are appropriately included in accounts payable and accounts receivable. The Company has a variable rate (4.8% at December 31, 1994) demand note payable to a shareholder in the amount of $280,000 at December 31, 1994. The shareholders of the Company are also shareholders of Ward Corporation (Ward Corp.). The Company leases gas compressors from Ward Corp. The Company and Ward Corp. have arranged to offset repair and maintenance services to provided compressors against rental payments. The total net receivable from Ward Corp. in 1994 was approximately $12,000. The Company obtains legal services from one of its shareholders. The total fees charged by this shareholder for legal services were approximately $60,000 in 1994. Dividends paid to shareholders during the year ended December 31, 1994 were $891,798, including a property dividend of $109,711 which related to a transfer of working interest in oil and gas properties. 11. MAJOR CUSTOMERS Oil and gas sales to one individual customer that exceeded 10% of total revenue during the year ended December 31, 1994 amounted to approximately $2,978,000. F-10 14 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 12. CONCENTRATIONS OF CREDIT RISK The Company operates exclusively in the oil and gas industry. Sales of oil and gas are ultimately made to refineries, gas utilities and industrial consumers in Michigan. Credit limits, ongoing credit evaluation and account monitoring procedures are utilized to minimize the risk of loss. Collateral is generally not required. Expected losses have been within management's expectations. 13. SUPPLEMENTARY INFORMATION ON OIL AND GAS ACTIVITIES The following disclosures are presented in accordance with the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards No. 69 (SFAS 69). The following table sets forth costs incurred by the Company during the year ended December 31, 1994: Acquisition: Proved properties $200,018 Unproved properties 399,636 Exploration 28,313
PROVED OIL AND GAS RESERVES (UNAUDITED) The Company's proved developed and undeveloped reserves are all located within the United States. The Company cautions that there are many uncertainties inherent in estimating proved reserve quantities and in projecting future production rates and the timing of development expenditures. In addition, estimates of new discoveries are more imprecise than those of properties with a production history. Accordingly, these estimates are expected to change as future information becomes available. Material revisions to reserve estimates may occur in the future, development and production of the oil and gas reserves may not occur in the periods assumed, and actual prices realized and actual costs incurred many vary significantly from those used. Proved reserves represent estimated quantities of natural gas, crude oil and condensate that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions existing at the time the estimates were made. Proved developed reserves are proved reserves expected to be recovered through wells and equipment in place and under operating methods being utilized at the time the estimates were made. F-11 15 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 13. SUPPLEMENTARY INFORMATION ON OIL AND GAS ACTIVITIES (CONTINUED) The estimates of proved developed reserves were prepared by the Company's petroleum engineers.
GAS (MCF) ----------- Proved developed reserves as of December 31, 1993 15,613,634 Revisions of previous estimates (195,844) Production (1,751,747) ----------- Proved developed reserves as of December 31, 1994 13,666,043 ===========
No estimate of proved undeveloped reserves has been prepared. STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED RESERVES (UNAUDITED) The following tables, which present a standardized measure of discounted future net cash flows and changes therein relating to proved oil and gas reserves, are presented pursuant to SFAS 69. In computing this data, assumptions other than those required by the FASB could produce different results. Accordingly, the data should not be construed as representative of the fair market value of the Company's proved oil and gas reserves. The following assumptions have been made at December 31, 1994: - Future revenues were based on year end oil and gas prices. Future price changes were included only to the extent provided by existing contractual agreements. - Production and development costs were computed using year end costs assuming no change in present economic conditions. - Future net cash flows were discounted at an annual rate of 10%. - Future income taxes were computed using the approximate statutory tax rate and giving effect to available net operating losses, tax credits and statutory depletion. F-12 16 WARD LAKE DRILLING, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) 13. SUPPLEMENTARY INFORMATION ON OIL AND GAS ACTIVITIES (CONTINUED) Estimated future cash inflows (outflows): Revenues from sale of oil and gas $ 24,793,777 Production and development costs (11,895,483) ------------- Future net cash flows 12,898,294 10% timing discount (4,157,372) ------------- Standardized measure of discounted future net cash flows $ 8,740,922 ============= Beginning of year $ 10,656,155 Sale of oil and gas, net of production costs (1,292,597) Net changes in prices and production costs (1,688,252) Accretion of 10% timing discount 1,065,616 ------------- End of year $ 8,740,922 =============
14. SUBSEQUENT EVENT Effective January 1995, the Company was purchased by Belden & Blake Corporation, a publicly-held, vertically integrated exploration and production company headquartered in North Canton, Ohio, for approximately $15.1 million. During the settlement of the purchase agreement, approximately $5.3 million of outstanding notes payable and long-term debt was satisfied. Additionally, certain net related party receivables in the amount of $2,182,000 were cancelled in connection with the purchase agreement. The cancellation of these amounts was treated as a capital transaction subsequent to December 31, 1994. F-13 17 BELDEN & BLAKE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS December 31, 1994
Historical Pro Forma --------------------------------- -------------------------------- Company Ward Lake Adjustments Combined -------------- ------------- ------------- --------------- ASSETS CURRENT ASSETS Cash and cash equivalents and marketable securities $ 3,649,005 $ 4,593,604 $ $ 8,242,609 Accounts receivable, net 13,068,663 4,695,352 17,764,015 Inventories 6,676,884 102,790 6,779,674 Deferred income taxes 1,741,093 1,741,093 Other current assets 956,699 71,489 1,028,188 ------------- ------------- ------------- --------------- TOTAL CURRENT ASSETS 26,092,344 9,463,235 -- 35,555,579 PROPERTY AND EQUIPMENT Oil and gas properties (successful efforts method) 122,279,367 6,971,357 4,466,701(a) 133,717,425 Gas gathering systems 18,120,365 18,120,365 Land, buildings, machinery and equipment 19,564,247 1,083,738 (696,738)(b) 19,951,247 ------------- ------------- ------------- --------------- 159,963,979 8,055,095 3,769,963 171,789,037 Less accumulated depreciation, depletion and amortization 40,788,899 1,344,464 (1,344,464)(c) 40,788,899 ------------- ------------- ------------- --------------- PROPERTY AND EQUIPMENT, NET 119,175,080 6,710,631 5,114,427 131,000,138 OTHER ASSETS 2,905,371 351,297 968,181(d) 4,224,849 ------------- ------------- ------------- --------------- $ 148,172,795 $ 16,525,163 $ 6,082,608 $ 170,780,566 ============= ============= ============= ===============
See accompanying notes. F-14 18 BELDEN & BLAKE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS December 31, 1994
Historical Pro Forma --------------------------------- --------------------------------- Company Ward Lake Adjustments Combined -------------- -------------- ------------- --------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 3,593,811 $ 4,602,142 $ $ 8,195,953 Accrued expenses 8,440,315 2,832,395 11,272,710 Current portion of long-term liabilities 447,257 4,491,783 4,939,040 -------------- -------------- ------------- --------------- TOTAL CURRENT LIABILITIES 12,481,383 11,926,320 -- 24,407,703 LONG-TERM LIABILITIES Senior notes 35,000,000 35,000,000 Convertible subordinated debentures 7,350,000 7,350,000 Bank and other long-term debt 4,239,682 968,447 9,713,004(e) 14,921,133 Capitalized lease obligations 645,314 645,314 Other 623,162 623,162 -------------- -------------- ------------- --------------- TOTAL LONG-TERM LIABILITIES 47,858,158 968,447 9,713,004 58,539,609 DEFERRED INCOME TAXES 6,691,408 6,691,408 SHAREHOLDERS' EQUITY Common stock without par value; $.10 stated value per share; authorized 12,000,000 shares; issued and outstanding 7,084,737 shares 708,474 50,000 (50,000)(f) 708,474 Preferred stock without par value; $100 stated value per share; authorized 8,000,000 shares; issued and outstanding 24,000 shares 2,400,000 2,400,000 Paid in capital 70,378,839 70,378,839 Retained earnings 7,879,483 3,580,396 (3,580,396)(f) 7,879,483 Unearned portion of restricted stock (224,950) (224,950) -------------- -------------- ------------- --------------- TOTAL SHAREHOLDERS' EQUITY 81,141,846 3,630,396 (3,630,396) 81,141,846 -------------- -------------- ------------- --------------- $ 148,172,795 $ 16,525,163 $ 6,082,608 $ 170,780,566 ============== ============== ============= ==============
See accompanying notes. F-15 19 BELDEN & BLAKE CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (NOTE 1) For the year ended December 31, 1994
Historical Pro Forma -------------------------------- ------------------------------- Company Ward Lake Adjustments Combined -------------- ------------- ------------- -------------- REVENUES Oil and gas sales $ 32,574,114 $ 3,540,171 $ $ 36,114,285 Gas marketing and gathering 33,085,304 33,085,304 Oilfield sales and service 16,885,669 3,049,694 (3,049,694)(g) 16,885,669 Interest and other 558,842 743,878 1,302,720 -------------- ------------- ------------- -------------- 83,103,929 7,333,743 (3,049,694) 87,387,978 Expenses Production expense 9,292,349 3,361,007 (3,049,694)(g) 9,642,554 38,892(h) Cost of gas and gathering expense 29,133,553 29,133,553 Oilfield sales and service 16,296,539 16,296,539 Exploration expense 2,807,278 28,313 2,835,591 General and administrative expense 3,965,754 1,835,369 (673,088)(i) 5,128,035 Interest expense 3,587,207 419,737 687,223(j) 4,694,167 Depreciation, depletion and amortization 12,021,258 756,232 413,760(k) 13,191,250 -------------- ------------- ------------- -------------- 77,103,938 6,400,658 (2,582,907) 80,921,689 -------------- ------------- ------------- -------------- INCOME BEFORE INCOME TAXES 5,999,991 933,085 (466,787) 6,466,289 Provision for income taxes 2,157,070 96,610(l) 2,253,680 -------------- ------------- ------------- -------------- NET INCOME $ 3,842,921 $ 933,085 (563,397) 4,212,609 ============== ============= ============= ============== NET INCOME PER COMMON SHARE $ 0.52 $ .57 ============== ============== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 7,080,227 7,080,227 ============== ==============
See accompanying notes. F-16 20 BELDEN & BLAKE CORPORATION Notes to Unaudited Pro Forma Financial Statements 1. Basis of Presentation --------------------- The unaudited pro forma financial statements set forth unaudited pro forma financial information for the Company for the year ended December 31, 1994. The unaudited pro forma condensed balance sheet assumes that Ward Lake Drilling, Inc. ("Ward Lake") had been acquired as of December 31, 1994. The unaudited pro forma results of operations assume that the acquisition of Ward Lake had occurred on January 1, 1994. Unaudited pro forma results of operations cannot be considered indicative of future operations. 2. Pro Forma Adjustments --------------------- (a) Adjustment to reflect the fair market value of the oil and gas properties at the time of acquisition. (b) Adjustment to reduce the historical cost of land, buildings, machinery, and equipment acquired by the Company to reflect the fair market value at time of acquisition. (c) Adjustment to eliminate Ward Lake's historical accumulated depreciation. (d) Adjustment to recognize the fair market value of other assets at the time of acquisition. (e) Adjustment to recognize additional debt incurred by the Company in connection with the acquisition of Ward Lake. (f) Adjustment to eliminate Ward Lake's historical common stock and retained earnings. (g) Adjustment to present certain well operating revenues (pumper and administrative fees) as a reduction of production expenses, so as to conform with the Company's existing presentation policy. (h) Adjustment to recognize additional production expense associated with pay increases granted at the time of acquisition. (i) Adjustment to reflect reduced general and administrative expenses associated with the closing of one administrative office and the discontinuing of the employment of Ward Lake's executive group and support staff. (j) Adjustment to reflect increased interest expense associated with additional debt incurred by the Company in connection with the acquisition of Ward Lake. See adjustment (e). (k) Adjustment to recognize additional depreciation, depletion and amortization incurred due to recording the purchase price of the assets at fair market value rather than at historical cost. See adjustments (a), (b) and (d). (l) Adjustment to the combined unaudited pro forma provision for income taxes. Prior to the acquisition Ward Lake was a subchapter S Corporation and accordingly did not provide for income taxes. F-17 -----END PRIVACY-ENHANCED MESSAGE-----