Annual report pursuant to Section 13 and 15(d)

Acquisitions and Divestitures (Tables)

v3.3.1.900
Acquisitions and Divestitures (Tables)
12 Months Ended
Dec. 31, 2015
Fairway  
Business Acquisition [Line Items]  
Purchase Price Allocation for Acquisition

The following table presents the purchase price allocation, including estimated 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 estimated 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 (in thousands, except earnings per share):

 

 

(unaudited)

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

Revenue

 

$

971,595

 

 

$

1,047,037

 

Net income

 

 

(5,503

)

 

 

71,412

 

Basic and diluted earnings per common share

 

 

(0.08

)

 

 

0.94

 

 

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)

 

 

 

Year Ended December 31,

 

 

 

2014 (a)

 

 

2013

 

Revenues (b)

 

$

22,887

 

 

$

62,949

 

Direct operating expenses (b)

 

 

4,417

 

 

 

9,583

 

DD&A (c)

 

 

8,385

 

 

 

20,503

 

G&A (d)

 

 

300

 

 

 

800

 

Interest expense (e)

 

 

330

 

 

 

990

 

Capitalized interest (f)

 

 

(19

)

 

 

165

 

Income tax expense (g)

 

 

3,316

 

 

 

10,818

 

 

The sources of information and significant assumptions are described below:

 

(a)

The adjustments for 2014 are for the period from January 1, 2014 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)

Estimated insurance costs related to the Woodside Properties.

 

(e)

The 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.

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

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

 

Cash consideration:

 

 

 

Evaluated properties including equipment

$

73,752

 

Unevaluated properties

 

9,248

 

Sub-total cash consideration

 

83,000

 

Non-cash consideration:

 

 

 

Asset retirement obligations - current

 

90

 

Asset retirement obligations - non-current

 

4,143

 

Sub-total non-cash consideration

 

4,233

 

Total consideration

$

87,233

 

 

Summary of Proforma Financial Information for Acquisition

The following table presents a summary of our pro forma financial information (in thousands except earnings per share):

 

(unaudited)

 

 

 

 

Year Ended

 

 

 

 

December 31, 2013

 

 

 

Revenue

$

1,018,118

 

 

 

Net income

 

59,015

 

 

 

Basic and diluted earnings per common share

 

0.78

 

 

 

 

Business Acquisition Pro Forma Information Incremental Item

For the pro forma financial information, certain information was derived from financial records and certain information was estimated.  The following table presents incremental items included in the pro forma information reported above for the Callon Properties (in thousands):

 

(unaudited)

 

 

 

 

Year Ended

 

 

 

 

December 31, 2013 (a)

 

 

 

Revenues (b)

$

34,030

 

 

 

Direct operating expenses (b)

 

6,405

 

 

 

DD&A (c)

 

14,931

 

 

 

G&A (d)

 

(361

)

 

 

Interest expense (e)

 

1,383

 

 

 

Capitalized interest (f)

 

(164

)

 

 

Income tax expense (g)

 

4,143

 

 

 

The sources of information and significant assumptions are described below:

 

(a)

The adjustments for 2013 are for the period from January 1, 2013 to the respective property transfer date, all of which occurred in the fourth quarter of 2013.

 

(b)

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

 

(c)

DD&A was estimated using the full-cost method and determined as the incremental DD&A expense due to adding the Callon Properties’ costs, reserves and production into our currently existing 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)

G&A adjustments related to incremental transaction expenses, which were assumed to be funded from cash on hand, and were adjusted from the 2013 results.

 

(e)

The acquisition was assumed to be funded entirely with borrowed funds.  Interest expense was computed using assumed borrowings of $83.0 million, which equates to the cash component of the transaction, and an interest rate of 2.0%, 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.  A positive amount represents an increase to net expenses and a 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.