Quarterly report pursuant to Section 13 or 15(d)

Acquisitions and Divestitures (Tables)

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Acquisitions and Divestitures (Tables)
9 Months Ended
Sep. 30, 2015
Fairway  
Business Acquisition [Line Items]  
Purchase Price Allocation for Acquisition

The following table presents the purchase price allocation, including adjustments, for the increased ownership interest in Fairway (in thousands):  

Cash consideration:

 

 

 

Evaluated properties including equipment

$

18,693

 

Non-cash consideration:

 

 

 

Asset retirement obligations - non-current

 

6,124

 

Total consideration

$

24,817

 

 

Woodside Properties  
Business Acquisition [Line Items]  
Purchase Price Allocation for Acquisition

The following table presents the purchase price allocation, including adjustments, for the acquisition of the Woodside Properties (in thousands):  

 

Cash consideration:

 

 

 

Evaluated properties including equipment

$

52,347

 

Unevaluated properties

 

2,660

 

Sub-total cash consideration

 

55,007

 

Non-cash consideration:

 

 

 

Asset retirement obligations - current

 

782

 

Asset retirement obligations - non-current

 

10,543

 

Sub-total non-cash consideration

 

11,325

 

Total consideration

$

66,332

 

 

Summary of Proforma Financial Information for Acquisition

The following table presents a summary of our pro forma financial information giving pro forma effect to the Woodside Properties acquisition (in thousands, except earnings per share):

 

 

 

(unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30, 2014

 

Revenue

 

$

774,918

 

Net income

 

 

27,803

 

Basic and diluted earnings per common share

 

 

0.36

 

 

Business Acquisition Pro Forma Information Incremental Item

The following table presents incremental items included in the pro forma information reported above for the Woodside Properties (in thousands):

 

 

 

(unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30, 2014 (a)

 

Revenues (b)

 

$

22,887

 

Direct operating expenses (b)

 

 

4,417

 

DD&A (c)

 

 

8,385

 

G&A (d)

 

 

400

 

Interest expense (e)

 

 

330

 

Capitalized interest (f)

 

 

(19

)

Income tax expense (g)

 

 

3,281

 

 

The sources of information and significant assumptions are described below:

 

(a)

The adjustments for the period presented are from the beginning of the period to May 20, 2014.  

 

(b)

Revenues and direct operating expenses for the Woodside Properties were derived from the historical financial records of Woodside.

 

(c)

DD&A was estimated using the full-cost method and determined as the incremental DD&A expense due to adding the Woodside Properties’ costs, reserves and production into our full cost pool in order to compute such amounts.  The purchase price allocated to unevaluated properties for oil and natural gas interests was excluded from the DD&A expense estimation.  ARO was estimated by W&T management.

 

(d)

Consists of estimated incremental insurance costs related to the Woodside Properties.

 

(e)

The Woodside Properties acquisition was assumed to be funded entirely with borrowed funds.  Interest expense was computed using assumed borrowings of $55.0 million, which equates to the cash component of the acquisition purchase price, and an interest rate of 1.8%, which equates to the rates applied to incremental borrowings on the revolving bank credit facility.

 

(f)

The change to capitalized interest was computed for the addition to the pool of unevaluated properties and the capitalization interest rate was adjusted for the assumed borrowings.  The negative amount represents a decrease to net expenses.

 

(g)

Income tax expense was computed using the 35% federal statutory rate.

The pro forma adjustments do not include adjustments related to any other acquisitions or divestitures.  As the acquisition occurred in the second quarter of 2014, pro forma financial information for the three months ended September 30, 2014 is not presented as there would be no differences from reported results.