Exhibit 99.1
GMX RESOURCES INC.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
INDEX TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
GMX Resources Inc. and Subsidiaries
|
| |
| Introduction | |
| Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2012 | |
| Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2011 | |
| Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2012 | |
| Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements | |
Introduction
The following unaudited condensed consolidated pro forma financial information is based upon the historical financial statements of GMX Resources Inc. and its consolidated subsidiaries (collectively, the “Company” or “GMX”), adjusted to reflect the proposed sale of specified operated and non-operated oil and gas properties in the Cotton Valley Sands and shallow rights located in East Texas and Louisiana (the “Assets”) pursuant to a Purchase and Sale Agreement, dated October 1, 2012, between the Company and Summit Energy, LLC (the “Purchase and Sale Agreement”).
Following are the unaudited pro forma financial information for the year ended December 31, 2011 and the six months ended June 30, 2012, which give effect to the sale of the Assets assuming no other adjustments to the purchase price at or after closing. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2012 reflects the disposition of the Assets as if it occurred as of such date. The unaudited pro forma condensed consolidated statements of operations assume the disposition of the Assets occurred on January 1, 2011. The pro forma adjustments are described in the related Notes.
The pro forma adjustments are based on the best available information and certain assumptions that the Company's management believes are reasonable. The unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only and does not purport to be indicative of the operating results or financial position that would have occurred if the transaction described above had occurred as presented in such statements. In addition, future results may vary significantly from the results reflected in such statements. For example, this financial information does not reflect any potential earnings or other impacts from the use of the proceeds from the disposition or other transactions during 2011 and 2012.
The following unaudited pro forma condensed consolidated financial information of the Company should be read in conjunction with the related notes and with the historical consolidated financial statements of the Company and the related notes included in its Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2012 filed with the Securities and Exchange Commission.
GMX Resources Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
|
| | | | | | | | | | | |
| | June 30, 2012 |
| | Historical | | Pro Forma Adjustments | | Pro Forma |
| ASSETS | | | | | |
| CURRENT ASSETS: | (In thousands) |
| Cash and cash equivalents | $ | 32,122 |
| | $ | 66,743 |
| (a) | $ | 98,865 |
|
| Restricted cash | 4,325 |
| | — |
| | 4,325 |
|
| Short-term investments | 6,008 |
| | — |
| | 6,008 |
|
| Accounts receivable | 10,657 |
| | — |
| | 10,657 |
|
| Other current assets | 4,248 |
| | — |
| | 4,248 |
|
| Total current assets | 57,360 |
| | 66,743 |
| | 124,103 |
|
| OIL AND NATURAL GAS PROPERTIES, BASED ON THE FULL COST METHOD | | | | | |
| Properties being amortized, net | 101,657 |
| | (62,483 | ) | (b) | 39,174 |
|
| Properties not subject to amortization | 162,783 |
| | — |
| | 162,783 |
|
| | 264,440 |
| | (62,483 | ) | | 201,957 |
|
| PROPERTY AND EQUIPMENT, AT COST, NET | 63,159 |
| | — |
| | 63,159 |
|
| OTHER ASSETS | 9,833 |
| | — |
| | 9,833 |
|
| TOTAL ASSETS | $ | 394,792 |
| | $ | 4,260 |
| | $ | 399,052 |
|
| LIABILITIES AND EQUITY | | | | | |
| CURRENT LIABILITIES: | | | | | |
| Accounts payable, accrued expenses and other current liabilities | $ | 39,199 |
| | $ | — |
| | $ | 39,199 |
|
| Current maturities of long-term debt | 51,256 |
| | — |
| | 51,256 |
|
| Total current liabilities | 90,455 |
| | — |
| | 90,455 |
|
| LONG-TERM DEBT, LESS CURRENT MATURITIES | 362,987 |
| | — |
| | 362,987 |
|
| OTHER LIABILITIES | 9,023 |
| | (6,039 | ) | (b) | 2,984 |
|
| EQUITY | (67,673 | ) | | 10,299 |
| | (57,374 | ) |
| TOTAL LIABILITIES AND EQUITY | $ | 394,792 |
| | $ | 4,260 |
| | $ | 399,052 |
|
GMX Resources Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Operations
|
| | | | | | | | | | | |
| | Year Ended December 31, 2011 |
| | Historical | | Pro Forma Adjustments | | Pro Forma |
| | (In thousands, except share data) |
| REVENUE | | | | |
|
|
| Oil and gas sales | $ | 116,741 |
| | $ | (28,985 | ) | (a) | $ | 87,756 |
|
| Gathering, transportation and other | — |
| | 2,434 |
| (b) | 2,434 |
|
| Total revenue | 116,741 |
| | (26,551 | ) | | 90,190 |
|
| | | | | | |
| EXPENSES: | | | | | |
| Lease operations | 13,420 |
| | (9,983 | ) | (a) | 3,437 |
|
| Gathering and transportation | — |
| | 1,709 |
| (b) | 1,709 |
|
| Production and severance taxes | 1,196 |
| | (904 | ) | (a) | 292 |
|
| Depreciation, depletion, and amortization | 50,270 |
| | (6,709 | ) | (c) | 43,561 |
|
| Impairment of oil and natural gas properties and assets held for sale | 205,754 |
| | (6,667 | ) | (d) | 199,087 |
|
| General and administrative | 28,863 |
| | 195 |
| (a) | 29,058 |
|
| Total expenses | 299,503 |
| | (22,359 | ) | | 277,144 |
|
| Loss from operations | (182,762 | ) | | (4,192 | ) | | (186,954 | ) |
| NON-OPERATING INCOME (EXPENSES): | | | | | |
| Interest expense | (31,875 | ) | | — |
| | (31,875 | ) |
| Other non-operating income | 8,804 |
| | — |
| | 8,804 |
|
| Total non-operating expenses | (23,071 | ) | | — |
| | (23,071 | ) |
| Loss before income taxes | (205,833 | ) | | (4,192 | ) | | (210,025 | ) |
| INCOME TAXES PROVISION | (615 | ) | | — |
| | (615 | ) |
| NET LOSS | (206,448 | ) | | (4,192 | ) | | (210,640 | ) |
| Net income attributable to noncontrolling interest | 5,389 |
| | — |
| | 5,389 |
|
| NET LOSS APPLICABLE TO GMX | (211,837 | ) | | (4,192 | ) | | (216,029 | ) |
| Preferred stock dividends | 6,720 |
| | — |
| | 6,720 |
|
| NET LOSS APPLICABLE TO COMMON SHAREHOLDERS | $ | (218,557 | ) | | $ | (4,192 | ) | | $ | (222,749 | ) |
| LOSS PER SHARE—Basic | $ | (4.12 | ) | | | | $ | (4.20 | ) |
| LOSS PER SHARE—Diluted | $ | (4.12 | ) | | | | $ | (4.20 | ) |
| WEIGHTED AVERAGE COMMON SHARES—Basic | 53,071,200 |
| | | | 53,071,200 |
|
| WEIGHTED AVERAGE COMMON SHARES—Diluted | 53,071,200 |
| | | | 53,071,200 |
|
GMX Resources Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Operations
|
| | | | | | | | | | | |
| | Six Months Ended June 30, 2012 |
| | Historical | | Pro Forma Adjustments | | Pro Forma |
| | (In thousands, except share data) |
| REVENUE | | | | |
|
|
| Oil and gas sales | $ | 33,684 |
| | $ | (9,288 | ) | (a) | $ | 24,396 |
|
| Gathering, transportation and other | — |
| | 1,006 |
| (b) | 1,006 |
|
| Total revenue | 33,684 |
| | (8,282 | ) | | 25,402 |
|
| | | | | | |
| EXPENSES: | | | | | |
| Lease operations | 5,996 |
| | (3,875 | ) | (a) | 2,121 |
|
| Gathering and transportation | — |
| | 485 |
| (b) | 485 |
|
| Production and severance taxes | 319 |
| | (303 | ) | (a) | 16 |
|
| Depreciation, depletion, and amortization | 14,439 |
| | (3,476 | ) | (c) | 10,963 |
|
| Impairment of oil and natural gas properties and assets held for sale | 120,690 |
| | (34,259 | ) | (d) | 86,431 |
|
| General and administrative | 13,797 |
| | 86 |
| (a) | 13,883 |
|
| Total expenses | 155,241 |
| | (41,342 | ) | | 113,899 |
|
| Loss from operations | (121,557 | ) | | 33,060 |
| | (88,497 | ) |
| NON-OPERATING INCOME (EXPENSES): | | | | | |
| Interest expense | (20,825 | ) | | — |
| | (20,825 | ) |
| Other non-operating income | 4,499 |
| | — |
| | 4,499 |
|
| Total non-operating expense | (16,326 | ) | | — |
| | (16,326 | ) |
| Loss before income taxes | (137,883 | ) | | 33,060 |
| | (104,823 | ) |
| INCOME TAX PROVISION | (3,305 | ) | | — |
| | (3,305 | ) |
| NET LOSS | (141,188 | ) | | 33,060 |
| | (108,128 | ) |
| Net income attributable to noncontrolling interest | 1,870 |
| | — |
| | 1,870 |
|
| NET LOSS APPLICABLE TO GMX RESOURCES | (143,058 | ) | | 33,060 |
| | (109,998 | ) |
| Preferred stock dividends | 3,673 |
| | — |
| | 3,673 |
|
| NET LOSS APPLICABLE TO COMMON SHAREHOLDERS | $ | (146,731 | ) | | $ | 33,060 |
| | $ | (113,671 | ) |
| LOSS PER SHARE – Basic | $ | (2.23 | ) | | | | $ | (1.73 | ) |
| LOSS PER SHARE – Diluted | $ | (2.23 | ) | | | | $ | (1.73 | ) |
| WEIGHTED AVERAGE COMMON SHARES – Basic | 65,832,321 |
| | | | 65,832,321 |
|
| WEIGHTED AVERAGE COMMON SHARES – Diluted | 65,832,321 |
| | | | 65,832,321 |
|
GMX Resources Inc. and Subsidiaries
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
The accompanying unaudited pro forma condensed consolidated balance sheet as of June 30, 2012 reflect the following adjustments:
| |
| (a) | Adjustment to recognize the net cash proceeds of $66.7 million for the properties sold. This represents the sales price of $69.0 million less related estimated transaction expenses and fees. |
| |
| (b) | Adjustment to eliminate the carrying value of the properties sold and the related asset retirement obligations. |
The accompanying unaudited pro forma condensed statements of operations for the year ended December 31, 2011 and the six months ended June 30, 2012 reflect the following adjustments:
| |
| (a) | Adjustment to eliminate the operating revenues and operating costs attributable to the properties sold. |
| |
| (b) | Adjustments to reflect third-party revenues and expenses related to gathering and transportation for properties sold. |
| |
| (c) | Adjustment to eliminate depreciation, depletion and amortization (DD&A) expense for the properties sold. |
| |
| (d) | Adjustment to eliminate impairment expense for the properties sold. |
