Exhibit 99.1
CARRIZO OIL & GAS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
| | | | | | | | | | | | |
| | | December 31, 2011 | |
| | | Historical | | | Pro Forma
Adjustments | | | Pro Forma | |
| | | (In thousands, except per share amounts) | |
ASSETS | | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 28,112 | | | $ | 140,000 | (1) | | $ | 168,112 | |
Accounts receivable, net | | | 54,778 | | | | — | | | | 54,778 | |
Other current assets | | | 37,507 | | | | — | | | | 37,507 | |
| | | | | | | | | | | | |
Total current assets | | | 120,397 | | | | 140,000 | | | | 260,397 | |
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TOTAL PROPERTY AND EQUIPMENT, NET | | | 1,310,514 | | | | (187,000 | )(2) | | | 1,123,514 | |
DEFERRED INCOME TAXES | | | 59,755 | | | | (11,682 | )(3) | | | 48,073 | |
OTHER ASSETS | | | 37,014 | | | | — | | | | 37,014 | |
| | | | | | | | | | | | |
TOTAL ASSETS | | $ | 1,527,680 | | | $ | (58,682 | ) | | $ | 1,468,998 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 206,972 | | | $ | — | | | $ | 206,972 | |
Other current liabilities | | | 64,348 | | | | — | | | | 64,348 | |
| | | | | | | | | | | | |
Total current liabilities | | | 271,320 | | | | — | | | | 271,320 | |
| | | | | | | | | | | | |
LONG-TERM DEBT, NET OF DEBT DISCOUNT | | | 729,300 | | | | (47,000 | )(1) | | | 682,300 | |
ASSET RETIREMENT OBLIGATIONS | | | 11,242 | | | | (805 | )(4) | | | 10,437 | |
OTHER LIABILITIES | | | 5,963 | | | | — | | | | 5,963 | |
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY | | | 509,855 | | | | (10,877 | ) | | | 498,978 | |
| | | | | | | | | | | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,527,680 | | | $ | (58,682 | ) | | $ | 1,468,998 | |
| | | | | | | | | | | | |
See the accompanying notes to the unaudited pro forma condensed consolidated financial statements.
CARRIZO OIL & GAS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| | | | | | | | | | | | |
| | | For the Year Ended December 31, 2011 | |
| | | Historical | | | Pro Forma
Adjustments | | | Pro Forma | |
| | | (In thousands, except per share amounts) | |
OIL AND GAS REVENUES | | $ | 202,167 | | | $ | (42,401 | )(1) | | $ | 159,766 | |
COSTS AND EXPENSES | | | | | | | | | | | | |
Lease operating | | | 28,314 | | | | (8,198 | )(1) | | | 20,116 | |
Production tax | | | 5,697 | | | | (960 | )(1) | | | 4,737 | |
Ad valorem tax | | | 3,625 | | | | (947 | )(1) | | | 2,678 | |
Depreciation, depletion and amortization | | | 84,606 | | | | (21,345 | )(2) | | | 63,261 | |
General and administrative | | | 41,781 | | | | — | | | | 41,781 | |
Accretion expense related to asset retirement obligations | | | 311 | | | | (57 | )(3) | | | 254 | |
| | | | | | | | | | | | |
TOTAL COSTS AND EXPENSES | | | 164,334 | | | | (31,507 | ) | | | 132,827 | |
| | | | | | | | | | | | |
OPERATING INCOME (LOSS) | | | 37,833 | | | | (10,894 | ) | | | 26,939 | |
OTHER INCOME AND EXPENSES | | | | | | | | | | | | |
Interest expense | | | (52,803 | ) | | | 3,881 | (4) | | | (48,922 | ) |
Capitalized interest | | | 23,369 | | | | (990 | )(5) | | | 22,379 | |
Other income (expense), net | | | 46,450 | | | | — | | | | 46,450 | |
| | | | | | | | | | | | |
INCOME (LOSS) BEFORE INCOME TAXES | | | 54,849 | | | | (8,003 | ) | | | 46,846 | |
INCOME TAX (EXPENSE) BENEFIT | | | (18,220 | ) | | | 2,801 | (6) | | | (15,419 | ) |
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NET INCOME (LOSS) | | $ | 36,629 | | | $ | (5,202 | ) | | $ | 31,427 | |
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NET INCOME (LOSS) PER COMMON SHARE | | | | | | | | | | | | |
BASIC | | $ | 0.94 | | | | | | | $ | 0.80 | |
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DILUTED | | $ | 0.92 | | | | | | | $ | 0.79 | |
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | | | | | | | | | | |
BASIC | | | 39,077 | | | | | | | | 39,077 | |
DILUTED | | | 39,668 | | | | | | | | 39,668 | |
See the accompanying notes to the unaudited pro forma condensed consolidated financial statements.
CARRIZO OIL & GAS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
On April 30, 2012, Carrizo Oil & Gas, Inc. (the “Company”), along with certain of its wholly-owned subsidiaries, completed its sale, effective January 1, 2012, of a portion of its properties in the Barnett Shale (the “Divested Properties”) to a subsidiary of Atlas Resource Partners, L.P. for approximately $187 million in cash, subject to final post-closing adjustments. The following unaudited pro forma financial information is presented to illustrate the effect of the Company’s disposition of these properties on its historical financial position and operating results. The unaudited pro forma balance sheet as of December 31, 2011 is based on the historical statements of the Company as of December 31, 2011 after giving effect to the transaction as if the disposition had occurred on December 31, 2011. The unaudited pro forma statement of operations for the year ended December 31, 2011 is based on the historical financial statements of the Company after giving effect to the transaction as if the disposition had occurred on January 1, 2011. The unaudited pro forma financial information should be read in conjunction with the Company’s historical consolidated financial statements and notes thereto contained in the Company’s 2011 Annual Report on Form 10-K, filed on February 29, 2012.
The preparation of the unaudited pro forma consolidated financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates.
The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not purport to represent what the actual results of operations would have been had the transaction occurred on the respective date 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’s management believes to be reasonable.
2. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The unaudited pro forma condensed consolidated balance sheet at December 31, 2011 reflects the following pro forma adjustments:
| (1) | Reflect the use of a portion of the net proceeds to repay the amounts outstanding under the Company’s U.S. senior secured revolving credit facility with the remaining proceeds invested in cash and cash equivalents. |
| (2) | Reflect the net proceeds as a reduction of Property and Equipment, net. |
| (3) | Eliminate the deferred income taxes associated with the Divested Properties. |
| (4) | Eliminate the asset retirement obligations of the Divested Properties. |
3. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2011 reflects the following pro forma adjustments:
| (1) | Eliminate the revenues and direct operating expenses of the Divested Properties. |
| (2) | Reflect the reduction in depreciation, depletion and amortization resulting from the application of the net proceeds as a reduction of Property and Equipment, net. |
| (3) | Eliminate the accretion expense related to asset retirement obligations of the Divested Properties. |
| (4) | Reduce interest expense resulting from the application of a portion of the net proceeds as a reduction of the amounts outstanding under the Company’s U.S. senior secured revolving credit facility. |
| (5) | Reduce capitalized interest resulting from the reduction in unproved property costs associated with the Divested Properties. |
| (6) | Record income tax benefit of the pro forma adjustments using the U.S. federal statutory rate of 35%. |
