0000844965-11-000053.txt : 20110603 0000844965-11-000053.hdr.sgml : 20110603 20110603171618 ACCESSION NUMBER: 0000844965-11-000053 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20110531 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110603 DATE AS OF CHANGE: 20110603 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TETRA TECHNOLOGIES INC CENTRAL INDEX KEY: 0000844965 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 742148293 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13455 FILM NUMBER: 11893118 BUSINESS ADDRESS: STREET 1: 24955 INTERSTATE 45 NORTH CITY: THE WOODLANDS STATE: TX ZIP: 77380 BUSINESS PHONE: 2813671983 MAIL ADDRESS: STREET 1: 24955 INTERSTATE 45 NORTH CITY: THE WOODLANDS STATE: TX ZIP: 77380 8-K 1 tti8k-20110603.htm FORM 8-K tti8k-20110603.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported): May 31, 2011


TETRA Technologies, Inc.
(Exact name of registrant as specified in its charter)


Delaware
1-13455
74-2148293
(State or other jurisdiction
(Commission File Number)
(IRS Employer
of incorporation)
  
Identification No.)
     
24955 Interstate 45 North
The Woodlands, Texas 77380
(Address of Principal Executive Offices and Zip Code)
     
Registrant’s telephone number, including area code: (281) 367-1983

 
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))
 
 
 
 
 
 
Item 1.01 Entry into a Material Definitive Agreement.

Item 2.01. Completion of Acquisition or Disposition of Assets.

On May 31, 2011, Maritech Resources, Inc. (“Maritech”), a wholly-owned subsidiary of TETRA Technologies, Inc. (the “Company”), finalized the sale of all of its interest in 21 federal offshore oil and gas leases in the Gulf of Mexico, one Louisiana offshore oil and gas lease, and six leases in state waters, which collectively represent approximately 79% of Maritech’s total proved reserves as of December 31, 2010. The sale was made pursuant to a Purchase and Sale Agreement (the “Agreement”) with Tana Exploration Company LLC (“Tana”), a subsidiary of TRT Holdings, Inc. (“TRT”), which was previously signed on April 1, 2011. The assets (the “Assets”) sold include producing and non-producing wells and related reserves, production, contracts, platforms, equipment, gathering systems, production facilities, and other related properties. The sale has an effective date of January 1, 2011. The base purchase price for the Assets was $222.25 million, $11.1 million of which was prepaid in April 2011 at the time the Purchase and Sale Agreement was signed. At the closing of the sale, Maritech received $173.3 million cash, representing the base purchase price, less the amount prepaid and purchase price adjustments, including those adjustments reflecting post-effective date cash flows. The proceeds are subject to post-closing adjustments and do not reflect associated transaction expenses.

The pro forma financial information required to be filed pursuant to Items 2.01 and 9.01 is set forth below under Item 9.01. Additionally, on June 1, 2011, the Company issued a press release announcing the closing of the Agreement. The press release is attached hereto as Exhibit 99.2 and is hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.

(a)  
Pro forma financial information.

The pro forma financial information required to be filed pursuant to Item 9.01 (b) is filed as Exhibit 99.1 and is incorporated herein by reference.

(b)  
Exhibits.

Exhibit Number
  
Description
99.1
  
Pro forma financial information.
99.2
  
Press release dated June 1, 2011, issued by TETRA Technologies, Inc.
 

 
 
1
 


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.


 
TETRA Technologies, Inc.
By:
/s/Bass C. Wallace, Jr.
 
Bass C. Wallace, Jr.
 
Sr. Vice President & General Counsel
Date: June 3, 2011
  


 
 

 
 
2
 

 
EXHIBIT INDEX


Exhibit Number
  
Description
99.1
  
Pro forma financial information.
99.2
  
Press release dated June 1, 2011, issued by TETRA Technologies, Inc.


 
 
 
 
 
 
 3
EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
Exhibit 99.1
 
TETRA TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Introduction

The following unaudited pro forma financial statements reflect the sale of approximately 79% of Maritech Resources, Inc.’s (“Maritech”) proved reserves as of December 31, 2010 to Tana Exploration Company LLC (“Tana”), a subsidiary of TRT Holdings, Inc. (“TRT”) pursuant to a Purchase and Sale Agreement dated April 1, 2011. The unaudited pro forma financial statements of TETRA Technologies, Inc. (the “Company”) as of March 31, 2011 and the three months ended March 31, 2011 and the year ended December 31, 2010 are based on the historical consolidated balance sheet and results of operations of the Company. These unaudited pro forma financial statements are qualified in their entirety by reference to such historical financial statements of the Company and related notes.

The pro forma adjustments have been prepared as if the transaction had taken place on March 31, 2011, in the case of the pro forma balance sheet, or as of January 1, 2010, in the case of the pro forma statements of operations for the year ended December 31, 2010 and the three months ended March 31, 2011. The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not purport to present what the actual results of operations would have been had the transaction occurred on the respective dates assumed, nor is it necessarily indicative of the Company’s future operating results. However, the pro forma adjustments reflected in the accompanying unaudited pro forma consolidated financial information reflect estimates and assumptions that the Company believes to be reasonable.


 
1
 

 
TETRA TECHNOLOGIES, INC.
UNAUDITED PRO FORMA BALANCE SHEET
 
March 31, 2011
 
   
Historical Results
    
Pro Forma Adjustments
  
Pro Forma Results
  
   
(In thousands)
  
ASSETS
  
Current Assets:
                    
Cash and cash equivalents                                                                              
   $ 72,481     $ 173,274  
(a)
   $ 242,455  
              (3,300 )
(b)
        
Restricted cash
     99                 99  
Trade accounts receivable, net of allowance for doubtful accounts
     158,314       (702 )
(c)
     157,612  
Inventories                                                                              
     98,376       (674 )
(c)
     97,702  
Deferred tax asset                                                                              
     32,211       269    (d)     32,480  
Prepaid expenses and other current assets                                                                              
     41,618       (4,547 )
(c)
     37,071  
Total current assets                                                                              
     403,099                 567,419  
                           
Property, plant and equipment:
                          
Land and building                                                                           
     77,309                 77,309  
Machinery and equipment                                                                           
     449,514                 449,514  
Automobiles and trucks                                                                           
     46,377                 46,377  
Chemical plants                                                                           
     156,366                 156,366  
Oil and gas producing properties                                                                           
     585,141       (467,084 )
(c)
     118,057  
Construction in progress                                                                           
     20,933                 20,933  
Less accumulated depreciation and depletion
     (652,317 )     277,239  
(c)
     (375,078 )
Net property, plant and equipment                                                                           
     683,323                 493,478  
Other assets:
                          
Goodwill                                                                           
     99,005                 99,005  
Patents, trademarks, and other intangible assets
     13,987                 13,987  
Other assets                                                                           
     31,920       (440 )
(c)
     31,480  
Total other assets                                                                           
     144,912                 144,472  
Total assets                                                                              
   $ 1,231,334               $ 1,205,369  
   
LIABILITIES AND STOCKHOLDERS’ EQUITY
  
Current liabilities:
                          
Trade accounts payable                                                                              
   $ 32,445               $ 32,445  
Accrued liabilities                                                                              
     79,197       (906 )
(c)
     78,291  
Decommissioning and other asset retirement obligations
     100,718                 100,718  
Derivative liabilities                                                                              
     12,046                 12,046  
Total current liabilities                                                                              
     224,406                 223,500  
                           
Long-term debt                                                                              
     305,035                 305,035  
Deferred income taxes                                                                              
     42,039       17,881  
(d)
     59,920  
Decommissioning and other asset retirement obligations
     130,116       (72,086 )
(c)
     58,030  
Other long-term liabilities                                                                              
     12,385                 12,385  
      489,575                 435,370  
 
Stockholders’ equity                                                                              
     517,353       29,146  
(e)
     546,499  
Total liabilities and partners’ capital/net parent equity
   $ 1,231,334               $ 1,205,369  

See accompanying notes to unaudited pro forma financial statements.
 
 
 
2
 


TETRA TECHNOLOGIES, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
 
Year Ended December 31, 2010
 
   
Historical Results
    
Pro Forma Adjustments
  
Pro Forma Results
  
   
(In thousands, except unit and per unit data)
  
Revenue:
                    
Product sales                                                                           
   $ 419,926       (103,317 )
(f)
   $ 316,609  
Services and rentals                                                                           
     452,752       (1,706 )
(f)
     451,046  
Total revenues                                                                           
     872,678                 767,655  
                           
Cost of revenues:
                          
Cost of product sales                                                                           
     302,675       (41,207 )
(f)
     261,468  
Cost of services and rentals                                                                           
     289,407                 289,407  
Depreciation, depletion, amortization, and accretion
     148,022       (52,137 )
(f)
     95,885  
Impairments of long-lived assets                                                                           
     88,867       (15,547 )
(f)
     73,320  
Total cost of revenues                                                                           
     828,971                 720,080  
           Gross profit                                                                              
     43,707                 47,575  
General and administrative expense                                                                              
     100,132       1,374  
(f)
     101,506  
           Operating income (loss)                                                                              
     (56,425 )               (53,931 )
Interest expense                                                                              
     17,304                 17,304  
Other (income) expense, net                                                                              
     64                 64  
Income (loss) before income taxes and discontinued operations
     (73,793 )               (71,299 )
Provision (benefit) for income taxes                                                                              
     (30,468 )     905  
(g)
     (29,563 )
Net loss before discontinued operations                                                                           
   $ (43,325 )             $ (41,736 )
 
Net loss per common unit (basic and diluted)                                                                              
   $ (0.57 )             $ (0.55 )

See accompanying notes to unaudited pro forma financial statements.

 
 
3
 


TETRA TECHNOLOGIES, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
 
Three Months Ended March 31, 2011
 
   
Historical Results
    
Pro Forma Adjustments
  
Pro Forma Results
  
   
(In thousands, except unit and per unit data)
  
Revenue:
                    
Product sales                                                                           
   $ 106,523       (37,626 )
(f)
   $ 68,897  
Services and rentals                                                                           
     116,022       (298 )
(f)
     115,724  
Total revenues                                                                           
     222,545                 184,621  
                           
Cost of revenues:
                          
Cost of product sales                                                                           
     77,018       (11,352 )
(f)
     65,666  
Cost of services and rentals                                                                           
     81,771                 81,771  
Depreciation, depletion, amortization, and accretion
     37,392       (15,091 )
(f)
     22,301  
Total cost of revenues                                                                           
     196,181                 169,738  
           Gross profit                                                                              
     26,364                 14,883  
General and administrative expense                                                                              
     27,762       439  
(f)
     28,201  
           Operating income (loss)                                                                              
     (1,398 )               (13,318 )
Interest expense                                                                              
     4,191                 4,191  
Other (income) expense, net                                                                              
     (1,548 )               (1,548 )
Income (loss) before income taxes and discontinued operations
     (4,041 )               (15,961 )
Provision (benefit) for income taxes                                                                              
     (1,529 )     (4,203 )
(g)
     (5,732 )
Net loss before discontinued operations                                                                           
   $ (2,512 )             $ (10,229 )
 
Net loss per common unit (basic and diluted)                                                                              
   $ (0.03 )             $ (0.13 )

See accompanying notes to unaudited pro forma financial statements.
 
 
 
4
 
 
TETRA TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
 
A.  
Basis of Presentation

The historical financial information is derived from the historical consolidated financial statements of the Company. The pro forma adjustments have been prepared as if the transactions effected had taken place on March 31, 2011, in the case of the pro forma balance sheet, or as of January 1, 2010, in the case of the pro forma statements of operations for the year ended December 31, 2010 and the three months ended March 31, 2011. The unaudited pro forma financial statements reflect the sale of approximately 79% of Maritech’s proved reserves as of December 31, 2010 to Tana pursuant to a Purchase and Sale Agreement dated April 1, 2011.

As a result of the sale of the properties to Tana, Maritech will record a net pretax gain on sales of the properties, which the Company currently estimates will be approximately $60 million (estimated to be approximately $37 million after tax), and this net gain is not reflected in the unaudited pro forma statements of operations. The unaudited pro forma financial statements also do not give effect to the following transactions or plans that are associated with the Company’s sale of Maritech’s oil and gas properties:

(a)  
The February and March 2011 sales of additional Maritech oil and gas properties, that were individually not significant, and which resulted in the disposal of approximately 12% of Maritech’s December 31, 2010 proved reserves.
(b)  
The April 2011 liquidation of all of the derivative cash flow hedges of Maritech’s oil and gas production cash flows. These derivative instruments were liquidated in exchange for a payment of $14.2 million, which will result in a charge to earnings during the second quarter of 2011.
(c)  
The May 2011 agreement between Tana and the Company whereby Tana will sublease certain office space in the Company’s corporate headquarters building.
(d)  
The June 2011 incentive payments made to certain Maritech employees associated with consummating the sale of Maritech oil and gas properties to Tana.
(e)  
Maritech’s plans to reduce its general and administrative expenses to reflect its reduced activity going forward.


B.  
Pro Forma Adjustments and Assumptions

1.  
Adjustments to Balance Sheet:
 
(a)  
Adjustment to record proceeds from the sale of oil and gas properties to Tana, net of purchase price adjustments including post-effective date cash flows.
(b)  
Adjustment to reflect cash payment of transaction fees.
 
(c)
Adjustment to reflect sale of working capital, inventories, oil and gas producing properties less accumulated depletion, and assumption by Tana of decommissioning and other asset retirement obligations associated with the properties sold.
 
(d)
Adjustment to deferred tax liabilities associated with the oil and gas properties sold.
 
(e)
Adjustment to increase stockholders’ equity to reflect the gain on sale that would have been recognized assuming the transaction occurred on March 31, 2011.

2.  
Adjustments to Statements of Operations:

 
(f)
Adjustment to eliminate revenue and direct operating expenses, including depletion and impairment expense, associated with the oil and gas properties sold.
 
(g)
Adjustment to reflect income tax expense based on the Company’s pro forma tax rate applied to the cumulative effect of changes referenced within the unaudited pro forma statement of operations.
 
 
 5
EX-99.2 3 ex99_2.htm EXHIBIT 99.2 ex99_2.htm
Exhibit 99.2
 
FOR IMMEDIATE RELEASE

TETRA TECHNOLOGIES, INC.
ANNOUNCES CLOSING OF STRATEGIC TRANSACTION

June 1, 2011 (The Woodlands, Texas), TETRA Technologies, Inc. (TETRA or the Company) (NYSE:TTI) today announced that its wholly-owned Maritech Resources, Inc. subsidiary (Maritech) has completed the previously announced sale of its interests in oil and gas properties that collectively represent approximately 79% of Maritech’s total proved reserves and $72 million of associated asset retirement obligations as of December 31, 2010. The sale was made to Tana Exploration Company LLC (Tana), a subsidiary of TRT Holdings, Inc. (TRT), for a base purchase price of $222.25 million. At the closing of the sale, Maritech received $173.3 million, representing the base purchase price less $11.1 million that was prepaid in April 2011 and purchase price adjustments, including those adjustments reflecting post-effective date cash flows. The proceeds are subject to post-closing adjustments and do not reflect related transaction expenses.

Stuart M. Brightman, TETRA’s President and Chief Executive Officer, stated, “With this transaction, we have achieved our objective of essentially exiting the E&P business, since we will be retaining only a small remainder of Maritech’s assets. Our focus going forward will be to invest in the growth of our service businesses. We believe that our strong balance sheet positions us to successfully pursue this strategy.”

TETRA is a geographically diversified  oil and gas services company focused on completion fluids and other products, production testing, wellhead compression, and selected offshore services including well plugging and abandonment, decommissioning, and diving.

Forward Looking Statements

This press release includes certain statements that are deemed to be forward-looking statements. Generally, the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “projects,” “anticipate,” “believe,” “assume,” “could,” “should,” “plans,” “targets” or similar expressions that convey the uncertainty of future events, activities, expectations or outcomes identify forward-looking statements that the Company intends to be included within the safe harbor protections provided by the federal securities laws. These forward-looking statements include statements concerning the expected benefits from the sale of oil and gas properties, expected results of operational business segments for 2011, financial guidance, estimated earnings, earnings per share, and statements regarding the Company’s beliefs, expectations, plans, goals, future events and performance, and other statements that are not purely historical. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of risks and uncertainties, many of which are beyond the control of the Company. Investors are cautioned that any such statements are not guarantees of future performances or results and that actual results or developments may differ materially from those projected in the forward-looking statements. Some of the factors that could affect actual
 
 
 
 
 
results are described in the section titled “Certain Business Risks” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, as well as other risks identified from time to time in its reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission.

 
Contact:
TETRA Technologies, Inc., The Woodlands, Texas
Stuart M. Brightman, 281/367-1983
Fax: 281/364-4346
www.tetratec.com                                                                           
 
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