Petrohawk Energy 8-K/A Financial Statements and Exhibits

EXHIBIT 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION

     The following unaudited pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Petrohawk and Mission may have appeared had the businesses actually been combined as of June 30, 2005 (with respect to the balance sheet information using currently available fair value information) or as of January 1, 2004 (with respect to statements of operations information). The unaudited pro forma condensed combined financial information shows the impact of the merger of Petrohawk and Mission on the historical financial position and results of operations under the purchase method of accounting with Petrohawk treated as the acquirer. Under this method of accounting, the assets and liabilities of Mission are recorded by Petrohawk at their estimated fair values as of the date the merger is completed. The unaudited pro forma condensed combined financial information combines the historical financial information of Petrohawk on a pro forma basis, taking into account Petrohawk’s November 23, 2004 acquisition of Wynn-Crosby, with Mission as of and for the six months ended June 30, 2005. The unaudited pro forma condensed combined balance sheet as of June 30, 2005 assumes the merger was completed on that date. The unaudited pro forma condensed combined statements of operations gives effect to the merger with Mission, as if it had been completed on January 1, 2004. The unaudited pro forma condensed combined financial information has been derived from and should be read together with the historical consolidated financial statements and the related notes of Petrohawk and Mission.

     The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined and had the impact of possible revenue enhancements, expense efficiencies, asset dispositions and share repurchases, among other factors, been considered. In addition, as explained in more detail in the accompanying notes to the unaudited pro forma condensed combined financial information, the allocation of the purchase price reflected in the pro forma condensed combined financial information is subject to adjustment and may vary from the actual purchase price allocation that will be recorded upon the effective time of the merger.

Petrohawk Energy Corporation and Subsidiaries
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2005

										Petrohawk
	Petrohawk			Mission			Merger			Pro Forma
	Historical			Historical			Adjustments			Combined
				(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,879		$	3,054		$	142,000	(3)	$	8,830
								(137,700	)(3)
								(4,403	)(3)
Accounts receivable		22,541			23,564			—			46,105
Deferred income taxes		2,826			6,558			1,845	(6)		11,229
Receivables from price risk management activities		74			—			—			74
Prepaid expenses and other		3,859			3,350			—			7,209
TOTAL CURRENT ASSETS		35,179			36,526			1,742			73,447
PROPERTY AND EQUIPMENT, AT COST
Oil and gas properties, full cost method
Subject to amortization		492,646			951,724			(951,724	)(2)		916,646
								424,000	(2)
Not subject to amortization		77,605			20,474			(20,474	)(2)		227,605
								150,000	(2)
Other property and equipment		3,742			4,411			—			8,153
		573,993			976,609			(398,198	)		1,152,404
Allowance for depreciation, depletion and amortization		(71,798	)		(596,349	)		596,349	(2)		(71,798	)
		502,195			380,260			198,151			1,080,606
Other assets		6,106			7,594			2,803	(3)		9,669
								(6,834	)(3)
Goodwill		—			—			157,474	(2)		157,474
TOTAL ASSETS	$	543,480		$	424,380		$	353,336		$	1,321,196
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and other	$	25,565		$	9,480		$	—		$	35,045
Current price risk management activities		7,730			18,882			—			26,612
Current portion of long-term debt		500			—			—			500
Other accrued liabilities					33,286			—			33,286
TOTAL CURRENT LIABILITIES		33,795			61,648			—			95,443
Revolving Credit Facility		133,000			29,000			(29,000	)(3)		250,000
								117,000	(3)
Term loan		49,500			25,000			(25,000	)(3)		74,500
								25,000	(3)
Senior 9 7/8% notes, including $11,901 premium		—			130,000			11,091	(3)		141,091
Asset retirement obligation		13,740			35,952			—			49,692
Deferred tax liability		17,005			22,764			(22,764	)(4)		170,619
								153,614	(4)
Price risk management activities		20,637			6,176			—			26,813
Other		7,288			—			—			7,288
STOCKHOLDERS’ EQUITY
Preferred stock		1			—			—			1
Common stock		49			421			(421	)(3)		69
								20	(3)
Additional paid-in capital		300,133			210,480			(210,480	)(3)		537,348
								209,913	(3)
								27,302	(3)
Treasury stock		(36	)		(1,937	)		1,937	(3)		(36	)
Other comprehensive income		—			(15,779	)		15,779	(1)		—
Accumulated deficit		(31,632	)		(79,345	)		79,345	(3)		(31,632	)
		268,515			113,840			123,395			505,750
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	543,480		$	424,380		$	353,336		$	1,321,196

See Notes to the Unaudited Pro Forma Condensed Combined Financial Statements.

Petrohawk Energy Corporation and Subsidiaries
Unaudited Proforma Condensed Combined Statement of Operations
For the Six Months Ended June 30, 2005

										Petrohawk
	Petrohawk			Mission			Merger			Pro Forma
	Historical			Historical			Adjustments			Combined
Revenues:
Oil and natural gas	$	68,284		$	78,167		$	8,505	(1)	$	154,956
Other		226			—			—			226
Total revenue		68,510			78,167			8,505			155,182
Costs and expenses:
Lease operating expense		11,409			16,785			—			28,194
Production and other taxes		4,409			5,599			—			10,008
General and administrative		7,504			9,256			(2,010	)(7)		14,750
Stock-based compensation		2,223			—			—			2,223
Depreciation, depletion and amortization		22,124			23,226			(45,350	)(2)		40,867
								40,867	(2)
Accretion of asset retirement obligations		384			842			—			1,226
Total costs and expenses		48,053			55,708			(6,493	)		97,268
Income from operations		20,457			22,459			14,998			57,914
Other income (expense):
Net gain (loss) on derivatives		(36,983	)		—			(21,604	)(1)		(58,587	)
Interest expense		(10,383	)		(8,873	)		8,873	(5)		(19,105	)
								(8,722	)(5)
Interest income (expense) and other		—			(987	)		—			(987	)
Total other income (expense)		(47,366	)		(9,860	)		(21,453	)		(78,679	)
Income (loss) from before income tax		(26,909	)		12,599			(6,455	)		(20,765	)
Income tax benefit (provision)		10,455			(4,661	)		(5,794	)(6)		7,891
								7,891	(6)
Net income (loss)		(16,454	)		7,938			(4,358	)		(12,874	)
Preferred dividends		(219	)		—			—			(219	)
Net income (loss) applicable to common stockholder	$	(16,673	)	$	7,938		$	(4,358	)	$	(13,093	)
Basic net income (loss) per common share	$	(0.42	)							$	(0.22	)
Diluted net income (loss) per common share	$	(0.42	)							$	(0.22	)
Weighted average shares outstanding:
Basic		40,063						19,565	(3)		59,628
Fully Diluted		40,063						19,565	(3)		59,628

See Notes to the Unaudited Proforma Condensed Combined Financial Statements.

Petrohawk Energy Corporation and Subsidiaries
Unaudited Proforma Condensed Combined Statement of Operations
For the Year Ended December 31, 2004

										Petrohawk
	Petrohawk			Mission			Merger			Pro Forma
	Pro Forma			Historical			Adjustments			Combined
Revenues:
Oil and natural gas	$	125,542		$	128,707		$	20,656	(1)	$	274,905
Other		446			—			—			446
Total revenue		125,988			128,707			20,656			275,351
Costs and expenses:
Lease operating expense		30,978			29,060			—			60,038
Production and other taxes		1,195			9,400			—			10,595
Gathering, transportation and other		—			346			—			346
Field services		168			—			—			168
General and administrative		10,939			12,751			—			23,690
Stock-based compensation		3,529			4,120			—			7,649
Depreciation, depletion and amortization		38,074			44,229			(82,303	)(2)		82,703
								82,703	(2)
Accretion of asset retirement obligations		593			1,202			—			1,795
Other		491			—			—			491
Total costs and expenses		85,967			101,108			400			187,475
Income from operations		40,021			27,599			20,256			87,876
Other income (expense):
Net gain (loss) on derivatives		3,917			—			(23,940	)(1)		(20,023	)
Equity income of non-affiliates		85			—			—			85
Investment income		20			—			—			20
Interest expense		(10,994	)		(19,818	)		19,818	(5)		(28,546	)
								(17,552	)(5)
Interest income (expense) and other		236			(3,067	)		—			(2,831	)
Total other income (expense)		(6,736	)		(22,885	)		(21,674	)		(51,295	)
Income (loss) from before income tax		33,285			4,714			(1,418	)		36,581
Income tax benefit (provision)		(12,532	)		(1,765	)		14,297	(6)		(13,901	)
								(13,901	)(6)
Net income (loss)		20,753			2,949			(1,022	)		22,680
Preferred dividends		(445	)		—			—			(445	)
Net income (loss) applicable to common stockholders	$	20,308		$	2,949		$	(1,022	)	$	22,235
Basic net income (loss) per common share	$	1.88								$	0.73
Diluted net income (loss) per common share	$	0.87								$	0.49
Weighted average shares outstanding:
Basic		10,809						19,565			30,374
Fully Diluted		23,854						21,937			45,791

See Notes to the Unaudited Proforma Condensed Combined Financial Statements.

Petrohawk Energy Corporation

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2004

			Petrohawk			Wynn-Crosby			Petrohawk
			Historical			Adjustments			Pro Forma
			(In thousands)
Revenues:
	Oil and natural gas		$	33,229		$	92,313		$	125,542
	Other			348			98			446
		Total revenue		33,577			92,411			125,988
Costs and Expenses:
	Production:
		Lease operations		5,692			25,286			30,978
		Production and other taxes		2,319			(1,124	)		1,195
		Gathering, transportation and other		—			—			—
	Field services			168			—			168
	General and administrative			7,802			3,137			10,939
	Stock-based compensation			3,529			—			3,529
	Depreciation, depletion and amortization			9,231			28,843			38,074
	Accretion of asset retirement obligations			137			456			593
	Other			—			491			491
		Total costs and expenses		28,878			57,089			85,967
Income From Operations				4,699			35,322			40,021
Other income (expense):
	Net gain (loss) on derivatives			7,441			(3,524	)		3,917
	Equity income of non-affiliates			—			85			85
	Investment income			—			20			20
	Interest expense			(3,178	)		(7,816	)		(10,994	)
	Interest income and other			284			(48	)		236
		Total other income (expense)		4,547			(11,283	)		(6,736	)
Income (loss) before income tax				9,246			24,039			33,285
Income tax provision				(1,129	)		(11,403	)		(12,532	)
Net income (loss)				8,117			12,636			20,753
Preferred dividends				(445	)		—			(445	)
Net income (loss) applicable to common stockholders			$	7,672		$	12,636		$	20,308
Basic net income per common share									$	1.88
Diluted net income per common share									$	0.87
Weighted average shares outstanding:
	Basic									10,809
	Fully Diluted									23,854

See Notes to the Unaudited Pro Forma Condensed Combined Financial Statements.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Data

The unaudited “Petrohawk Pro Forma” financial data has been prepared to give effect to Petrohawk’s acquisition of Wynn-Crosby Energy, Inc. in November 2004. Information under the heading “Merger Adjustments” gives effect to the adjustments related to the acquisition of Mission. The unaudited pro forma consolidated statements are not necessarily indicative of the results of Petrohawk’s future operations.

(1)	To reflect Petrohawk’s recognition of mark-to-market losses associated with derivative liabilities assumed in the merger with Mission. As a result of the business combination, Mission’s costless collars will not qualify for hedge accounting treatment, and, as a result, Petrohawk will continue to recognize mark-to-market gains and losses in future earnings until the collars mature.
(2)	To record the preliminary purchase price allocation to evaluated and unevaluated property and goodwill. These adjustments also adjust depreciation, depletion and amortization expense to give effect to the purchase price allocation using the unit of production method under the full cost method of accounting.
(3)	To record the retirement and issuance of debt and equity instruments, and related costs, in connection with the merger.
(4)	To record the deferred tax position of the combined company, inclusive of the deferred tax gross-up in connection with the merger.
(5)	To adjust interest expense to give effect to the financing activities in connection with the Mission merger.
(6)	To record income tax expense on the combined company results of operations based on a 38% combined federal and state tax rate for the six months ended June 30, 2005 and for the year ended December 31, 2004.
(7)	Consulting and legal fees of approximately $2 million were reported by Mission, in general and administrative expenses through June 30, 2005. These costs are directly attributable to the transaction and have been excluded from the pro forma financial statements as they represent material nonrecurring charges. Mission Resources expects to incur approximately $14.8 million in transaction costs consisting of accounting, consulting and legal fees in addition to costs associated with employee severance.