Exhibit 99.2
Bill Barrett Corporation
Unaudited Pro Forma Condensed Consolidated Financial Information
On December 10, 2013, Bill Barrett Corporation (the “Company”) closed on its previously announced sale to funds affiliated with EnerVest, Ltd. (“EnerVest”) of all of the Company’s natural gas producing properties and related compression and gathering assets in the West Tavaputs area of the Uinta Basin (the “Assets”) under the Purchase and Sale Agreement between the Company and EnerVest dated October 22, 2013 (the “Agreement”). Total consideration, prior to customary closing adjustments, was $369.0 million and included approximately $46.0 million for EnerVest's assumption of the Company's lease financing obligation related to compressor units on the property.
The following unaudited pro forma condensed consolidated balance sheet information as of September 30, 2013 is based on the historical financial statements of the Company, including certain pro forma adjustments, and has been prepared to illustrate the pro forma effect of the sale of the Assets on December 10, 2013 as if the sale had occurred on September 30, 2013.
The unaudited pro forma condensed consolidated statements of operations for the three and nine months ended September 30, 2013 and the year ended December 31, 2012 are based on the historical financial statements of the Company, including certain pro forma adjustments, and assume that the sale of the Assets occurred as of the beginning of the periods presented.
The unaudited pro forma condensed consolidated financial information has been prepared based upon available information and management estimates. Actual amounts may differ from these estimated amounts. In preparing the pro forma information, the Company eliminated all direct revenues and expenses related to the Assets, but did not adjust general and administrative expenses or commodity hedging activity. The unaudited pro forma condensed consolidated financial information is for informational purposes only and is not intended to represent or be indicative of the results of operations or financial position of the Company or the pro forma effect of closing of the sale and should not be taken as indicative of the Company’s future results of operations or financial position. Actual results may differ significantly from those reflected in the unaudited pro forma condensed consolidated financial information for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma condensed consolidated financial information and actual results. The pro forma adjustments are described in Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
The unaudited pro forma condensed consolidated financial information should be read in conjunction with the financial statements and notes and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 and the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
The accompanying unaudited pro forma condensed consolidated financial statements give effect to pro forma adjustments to reflect the sale of the Assets as if the sale had occurred as of the beginning of the periods presented in the pro forma statements of operations for the three and nine months ended September 30, 2013 and for the year ended December 31, 2012 and as if the sale had occurred on September 30, 2013 in the pro forma condensed consolidated balance sheet.
The unaudited pro forma condensed consolidated statements of operations and condensed consolidated balance sheet reflect the effect of the following pro forma adjustments:
| |
| (a) | The sale of the Assets as if the sale had occurred on September 30, 2013. The Company classified the related assets and liabilities as held for sale as of September 30, 2013. See table below for detailed information: |
|
| | | |
| | As of September 30, 2013 |
| | (in thousands) |
| Assets | |
| Proved properties | $ | 1,070,400 |
|
| Unproved properties | 12,469 |
|
| Furniture, equipment and other | 4,205 |
|
| Accumulated depreciation, depletion, amortization and impairment | (704,520 | ) |
| Total assets held for sale | $ | 382,554 |
|
| | |
| Liabilities | |
| Asset retirement obligation held for sale | 13,082 |
|
| Lease financing obligation held for sale | 46,363 |
|
| Total liabilities held for sale | $ | 59,445 |
|
| | |
| Net assets | $ | 323,109 |
|
| |
| (b) | The effect on stockholders’ equity as a result of adjustment (a). |
| |
| (c) | The effect on deferred income taxes as a result of adjustment (a). |
| |
| (d) | The assumed paydown of outstanding borrowings under the Company’s bank revolving credit facility with the cash proceeds of $323.0 million from the sale. |
| |
| (e) | The outstanding balance of the Company's bank revolving credit facility at September 30, 2013 was $390.0 million. A pro rata portion of credit facility interest expense and accrued interest expense is reversed herein based on a paydown in the amount of the cash proceeds of $323.0 million. In conjunction with the sale, EnerVest assumed the Company's lease financing obligation related to compressor units on the property, and that portion of interest expense and accrued interest expense is also included in this pro forma adjustment. |
| |
| (f) | Elimination of sales of natural gas and oil related revenues directly related to the Assets for the three and nine months ended September 30, 2013 and for the year ended December 31, 2012. The production volumes eliminated through this pro forma adjustment were 27 MBbls of oil and 17,971 MMcf of natural gas for the nine months ended September 30, 2013, 4 MBbls of oil and 5,353 MMcf of natural gas for the three months ended September 30, 2013 and 61 MBbls of oil and 34,497 MMcf of natural gas for the twelve months ended December 31, 2012. |
| |
| (g) | Elimination of direct operating expenses and income taxes related to the Assets for the three and nine months ended September 30, 2013 and for the year ended December 31, 2012. |
BILL BARRETT CORPORATION
Unaudited Pro Forma Condensed Consolidated Balance Sheet
September 30, 2013
|
| | | | | | | | | | | | | | |
| | | Bill Barrett Historical | | Pro Forma Adjustments | | | | Unaudited Pro Forma Balance Sheet |
| | | | | (In thousands) | | | | |
| Assets: | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 60,530 |
| | $ | — |
| | | | $ | 60,530 |
|
| Accounts receivable, net of allowance for doubtful accounts | | 99,537 |
| | — |
| | | | 99,537 |
|
| Derivative Assets | | 3,506 |
| | — |
| | | | 3,506 |
|
| Prepayments and other current assets | | 5,478 |
| | — |
| | | | 5,478 |
|
| Total current assets | | 169,051 |
| | — |
| | | | 169,051 |
|
| Property and Equipment — At cost, successful efforts method for oil and gas properties: | | | | | | | | |
| Proved oil and gas properties | | 2,675,696 |
| | — |
| | | | 2,675,696 |
|
| Unproved oil and gas properties, excluded from amortization | | 362,386 |
| | — |
| | | | 362,386 |
|
| Oil and gas properties held for sale, net | | 382,554 |
| | (382,554 | ) | | (a) | | |
| Furniture, equipment and other | | 42,252 |
| | — |
| | | | 42,252 |
|
| | | 3,462,888 |
| | (382,554 | ) | | | | 3,080,334 |
|
| Accumulated depreciation, depletion, amortization and impairment | | (929,743 | ) | | — |
| | | | (929,743 | ) |
| Total property and equipment, net | | 2,533,145 |
| | (382,554 | ) | | | | 2,150,591 |
|
| Deferred financing costs and other noncurrent assets | | 24,065 |
| | — |
| | | | 24,065 |
|
| Total | | $ | 2,726,261 |
| | $ | (382,554 | ) | | | | $ | 2,343,707 |
|
| | | | | | | | | |
| Liabilities and Stockholders' Equity: | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 123,409 |
| | $ | (281 | ) | | (e) | | $ | 123,128 |
|
| Amounts payable to oil and gas property owners | | 22,367 |
| | — |
| | | | 22,367 |
|
| Production taxes payable | | 41,803 |
| | — |
| | | | 41,803 |
|
| Derivative liabilities | | 2,271 |
| | — |
| | | | 2,271 |
|
| Deferred income taxes | | 11,833 |
| | — |
| | | | 11,833 |
|
| Current portion of long-term debt | | 4,554 |
| | — |
| | | | 4,554 |
|
| Total current liabilities | | 206,237 |
| | (281 | ) | | | | 205,956 |
|
| Long-term debt | | 1,255,243 |
| | (322,966 | ) | | (d) | | 932,277 |
|
| Asset retirement obligations | | 38,292 |
| | — |
| | | | 38,292 |
|
| Liabilities associated with assets held for sale | | 59,445 |
| | (59,445 | ) | | (a) | | — |
|
| Deferred income taxes | | 156,034 |
| | (1,894 | ) | | (c) | | 154,140 |
|
| Derivatives and other noncurrent liabilities | | 4,012 |
| | — |
| | | | 4,012 |
|
| Total stockholders’ equity | | 1,006,998 |
| | 2,032 |
| | (b) | | 1,009,030 |
|
| Total | | $ | 2,726,261 |
| | $ | (382,554 | ) | | | | $ | 2,343,707 |
|
BILL BARRETT CORPORATION
Unaudited Pro Forma Condensed Consolidated Statements of Operations
For the nine months ended September 30, 2013
|
| | | | | | | | | | | | | | |
| | | Bill Barrett Historical | | Pro Forma Adjustments | | | | Unaudited Pro Forma Statement of Operations |
| | | (in thousands, except share and per share amounts) |
| Operating and Other Revenues: | | | | | | | | |
| Oil, gas and NGL production | | $ | 424,130 |
| | $ | (76,606 | ) | | (f) | | $ | 347,524 |
|
| Other | | 5,001 |
| | — |
| | | | 5,001 |
|
| Total operating and other revenues | | 429,131 |
| | (76,606 | ) | | | | 352,525 |
|
| Operating Expenses: | | | | | | | | |
| Lease operating expense | | 53,138 |
| | (12,182 | ) | | (g) | | 40,956 |
|
| Gathering, transportation and processing expense | | 50,734 |
| | (16,288 | ) | | (g) | | 34,446 |
|
| Production tax expense | | 21,915 |
| | (2,117 | ) | | (g) | | 19,798 |
|
| Exploration expense | | 212 |
| | (24 | ) | | (g) | | 188 |
|
| Impairment, dry hole costs and abandonment expense | | 227,646 |
| | (201,343 | ) | | (g) | | 26,303 |
|
| Depreciation, depletion and amortization | | 214,792 |
| | (52,224 | ) | | (g) | | 162,568 |
|
| General and administrative expense | | 48,257 |
| | — |
| | | | 48,257 |
|
| Total operating expenses | | 616,694 |
| | (284,178 | ) | | | | 332,516 |
|
| Operating Income (Loss) | | (187,563 | ) | | 207,572 |
| | | | 20,009 |
|
| Other Income and Expense: | | | | | | | | |
| Interest and other income | | 123 |
| | — |
| | | | 123 |
|
| Interest expense | | (69,346 | ) | | 3,095 |
| | (e) | | (66,251 | ) |
| Commodity derivative gain (loss) | | (18,607 | ) | | — |
| | | | (18,607 | ) |
| Gain (loss) on extinguishment of debt | | (21,460 | ) | | — |
| | | | (21,460 | ) |
| Total other income and expense | | (109,290 | ) | | 3,095 |
| | | | (106,195 | ) |
| Income (Loss) before Income Taxes | | (296,853 | ) | | 210,667 |
| | | | (86,186 | ) |
| Provision for (Benefit from) Income Taxes | | (111,319 | ) | | 79,169 |
| | (g) | | (32,150 | ) |
| Net Income (Loss) | | $ | (185,534 | ) | | $ | 131,498 |
| | | | $ | (54,036 | ) |
| Net Income Per Common Share, Basic | | $ | (3.91 | ) | | | | | | $ | (1.14 | ) |
| Net Income Per Common Share, Diluted | | $ | (3.91 | ) | | | | | | $ | (1.14 | ) |
| Weighted Average Common Shares Outstanding, Basic | | 47,452,865 |
| | | | | | 47,452,865 |
|
| Weighted Average Common Shares Outstanding, Diluted | | 47,452,865 |
| | | | | | 47,452,865 |
|
BILL BARRETT CORPORATION
Unaudited Pro Forma Condensed Consolidated Statements of Operations
For the three months ended September 30, 2013
|
| | | | | | | | | | | | | | |
| | | Bill Barrett Historical | | Pro Forma Adjustments | | | | Unaudited Pro Forma Statement of Operations |
| | | (in thousands, except share and per share amounts) |
| Operating and Other Revenues: | | | | | | | | |
| Oil, gas and NGL production | | $ | 149,345 |
| | $ | (24,137 | ) | | (f) | | $ | 125,208 |
|
| Other | | (790 | ) | | — |
| | | | (790 | ) |
| Total operating and other revenues | | 148,555 |
| | (24,137 | ) | | | | 124,418 |
|
| Operating Expenses: | | | | | | | | |
| Lease operating expense | | 18,280 |
| | (4,091 | ) | | (g) | | 14,189 |
|
| Gathering, transportation and processing expense | | 16,374 |
| | (5,435 | ) | | (g) | | 10,939 |
|
| Production tax expense | | 8,183 |
| | (343 | ) | | (g) | | 7,840 |
|
| Exploration expense | | (24 | ) | | (10 | ) | | (g) | | (34 | ) |
| Impairment, dry hole costs and abandonment expense | | 219,363 |
| | (201,343 | ) | | (g) | | 18,020 |
|
| Depreciation, depletion and amortization | | 72,047 |
| | (15,475 | ) | | (g) | | 56,572 |
|
| General and administrative expense | | 14,402 |
| | — |
| | | | 14,402 |
|
| Total operating expenses | | 348,625 |
| | (226,697 | ) | | | | 121,928 |
|
| Operating Income (Loss) | | (200,070 | ) | | 202,560 |
| | | | 2,490 |
|
| Other Income and Expense: | | | | | | | | |
| Interest and other income | | 52 |
| | — |
| | | | 52 |
|
| Interest expense | | (20,078 | ) | | 1,907 |
| | (e) | | (18,171 | ) |
| Commodity derivative gain (loss) | | (25,595 | ) | | — |
| | | | (25,595 | ) |
| Gain (loss) on debt extinguishment | | (21,460 | ) | | — |
| | | | (21,460 | ) |
| Total other income and expense | | (67,081 | ) | | 1,907 |
| | | | (65,174 | ) |
| Income (Loss) before Income Taxes | | (267,151 | ) | | 204,467 |
| | | | (62,684 | ) |
| Provision for (Benefit from) Income Taxes | | (100,495 | ) | | 76,838 |
| | (g) | | (23,657 | ) |
| Net Income (Loss) | | $ | (166,656 | ) | | $ | 127,629 |
| | | | $ | (39,027 | ) |
| Net Income Per Common Share, Basic | | $ | (3.51 | ) | | | | | | $ | (0.82 | ) |
| Net Income Per Common Share, Diluted | | $ | (3.51 | ) | | | | | | $ | (0.82 | ) |
| Weighted Average Common Shares Outstanding, Basic | | 47,535,124 |
| | | | | | 47,535,124 |
|
| Weighted Average Common Shares Outstanding, Diluted | | 47,535,124 |
| | | | | | 47,535,124 |
|
BILL BARRETT CORPORATION
Unaudited Pro Forma Condensed Consolidated Statements of Operations
For the year ended December 31, 2012
|
| | | | | | | | | | | | | | |
| | | Bill Barrett Historical | | Pro Forma Adjustment | | | | Unaudited Pro Forma Statement of Operations |
| | | (in thousands, except share and per share amounts) |
| Operating and Other Revenues: | | | | | | | | |
| Oil and gas production | | $ | 700,639 |
| | $ | (116,403 | ) | | (f) | | $ | 584,236 |
|
| Other | | (444 | ) | | — |
| | | | (444 | ) |
| Total operating and other revenues | | 700,195 |
| | (116,403 | ) | | | | 583,792 |
|
| Operating Expenses: | | | | | | | | |
| Lease operating expense | | 72,734 |
| | (14,364 | ) | | (g) | | 58,370 |
|
| Gathering, transportation and processing expense | | 106,548 |
| | (28,161 | ) | | (g) | | 78,387 |
|
| Production tax expense | | 25,513 |
| | (1,785 | ) | | (g) | | 23,728 |
|
| Exploration expense | | 8,814 |
| | (31 | ) | | (g) | | 8,783 |
|
| Impairment, dry hole costs and abandonment expense | | 67,869 |
| | — |
| | | | 67,869 |
|
| Depreciation, depletion and amortization | | 326,842 |
| | (94,690 | ) | | (g) | | 232,152 |
|
| General and administrative expense | | 68,666 |
| | — |
| | | | 68,666 |
|
| Total operating expenses | | 676,986 |
| | (139,031 | ) | | | | 537,955 |
|
| Operating Income | | 23,209 |
| | 22,628 |
| | | | 45,837 |
|
| Other Income and Expense: | | | | | | | | |
| Interest income and other income (expense) | | 155 |
| | — |
| | | | 155 |
|
| Interest expense | | (95,506 | ) | | 283 |
| | (e) | | (95,223 | ) |
| Commodity derivative gain (loss) | | 72,759 |
| | — |
| | | | 72,759 |
|
| Gain (loss) on debt extinguishment | | 1,601 |
| | — |
| | | | 1,601 |
|
| Total other income and expense | | (20,991 | ) | | 283 |
| | | | (20,708 | ) |
| Income before Income Taxes | | 2,218 |
| | 22,911 |
| | | | 25,129 |
|
| Provision for Income Taxes | | 1,636 |
| | 8,610 |
| | (g) | | 10,246 |
|
| Net Income | | $ | 582 |
| | $ | 14,301 |
| | | | $ | 14,883 |
|
| Net Income Per Common Share, Basic | | $ | 0.01 |
| | | | | | $ | 0.32 |
|
| Net Income Per Common Share, Diluted | | $ | 0.01 |
| | | | | | $ | 0.31 |
|
| Weighted Average Common Shares Outstanding, Basic | | 47,194,668 |
| | | | | | 47,194,668 |
|
| Weighted Average Common Shares Outstanding, Diluted | | 47,353,951 |
| | | | | | 47,353,951 |
|
