Stone Energy (SGY) 8-K/A Financial Statements and Exhibits

Exhibit 99.1

STONE ENERGY CORPORATION
INTRODUCTION TO THE UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

     The following unaudited pro forma condensed consolidated financial statements and explanatory notes present the financial statements of Stone Energy Corporation (“Stone”) had the merger with Bois d’Arc Energy, Inc. (“Bois d’Arc”) and related transactions, including borrowings under the amended and restated credit facility, occurred as of June 30, 2008 (with respect to the balance sheet information using currently available fair value information) or as of January 1, 2007 (with respect to statements of operations information). The pro forma financial statements are prepared using the purchase method of accounting for business combinations. The purchase method of accounting requires Stone to record the assets and liabilities of Bois d’Arc at their fair values.

     The unaudited pro forma condensed consolidated financial statements have been derived from and should be read together with the historical consolidated financial statements and the related notes of Stone included in its Annual Report on Form 10-K for the year ended December 31, 2007 and its Quarterly Report on Form 10-Q for the quarters ended March 31, 2008 and June 30, 2008 and the historical consolidated financial statements and the related notes of Bois d’Arc included in its Annual Report on Form 10-K for the year ended December 31, 2007 and its Quarterly Report on Form 10-Q for the quarters ended March 31, 2008 and June 30, 2008.

     The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and do not indicate the results of operations or financial position of Stone had the companies actually been combined on the dates noted above, and do not project the results of operations or financial position of Stone for any future periods. The pro forma adjustments are based on available information and certain assumptions that management believes are reasonable. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma financial information have been made.

F-1

STONE ENERGY CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 2008
(In thousands of dollars)

				Bois d’Arc		Pro Forma
	Stone			Historical		Adjustments			Pro Forma
	Historical			(1)		(Note 4)			Combined
ASSETS
Current assets:
Cash and cash equivalents	$	568,117		$	25,374		($512,929	) (a)	$	80,562
Accounts receivable		192,314			56,618		(147	) (a)		248,785
Fair value of hedging contracts		272			—		—			272
Deferred tax asset		52,188			—		—			52,188
Other current assets		1,044			1,102		—			2,146
Total current assets		813,935			83,094		(513,076	)		383,953
Oil and gas properties — United States — full cost method of accounting:
Proved, net of accumulated depletion		1,001,271			893,620		578,695	(a)		2,473,586
Unevaluated		204,985			26,421		398,694	(a)		630,100
Oil and gas properties — China — full cost method of accounting:
Unevaluated, net of accumulated depletion		20,659			—		—			20,659
Building and land, net		5,620			—		—			5,620
Fixed assets, net		5,097			2,631		(2,362	) (a)		5,366
Other assets, net		24,530			574		(458	) (a)		24,646
Goodwill		—			—		337,879	(a)		337,879
Total assets	$	2,076,097		$	1,006,340	$	799,372		$	3,881,809
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	18,000		($18,000	) (a)	$	—
Accounts payable to vendors		143,296			36,793		—			180,089
Undistributed oil and gas proceeds		42,530			15,051		215	(a)		57,796
Fair value of hedging contracts		118,922			—		—			118,922
Asset retirement obligations		31,349			—		—			31,349
Current income taxes payable		10,500			3,891		(4,595	) (a)		9,796
Other current liabilities		6,146			1,154		—			7,300
Total current liabilities		352,743			74,889		(22,380	)		405,252
Long-term debt		400,000			—		425,000	(a)		825,000
Deferred taxes		110,461			198,034		335,836	(a)		644,331
Asset retirement obligations		200,249			46,112		26,252	(a)		272,613
Fair value of hedging contracts		34,602			—		—			34,602
Other long-term liabilities		8,129			4,082		—			12,211
Total liabilities		1,106,184			323,117		764,708			2,194,009
Common stock		283			665		113	(a)		396
							(665	) (a)
Treasury stock		(860	)		—		—			(860	)
Additional paid-in capital		541,515			507,371		717,774	(a)		1,259,289
							(507,371	) (a)
Retained earnings		527,297			175,187		(175,187	) (a)		527,297
Accumulated other comprehensive loss		(98,322	)		—		—			(98,322	)
Total stockholders’ equity		969,913			683,223		34,664			1,687,800
Total liabilities and stockholders’ equity	$	2,076,097		$	1,006,340	$	799,372		$	3,881,809

(1) Amounts presented herein are consistent with those presented in the Bois d’Arc Quarterly Report on Form 10-Q as of June 30, 2008; however, certain amounts have been reclassified to conform with Stone’s presentation. The Bois d’Arc historical balances are presented using the successful efforts method of accounting.

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

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STONE ENERGY CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2008
(In thousands, except per share amounts)

				Bois d’Arc			Pro Forma
	Stone			Historical			Adjustments			Pro Forma
	Historical			(1)			(Note 4)			Combined
Operating revenue:
Oil production	$	279,276		$	105,065		$	—		$	384,341
Gas production		186,919			156,191			—			343,110
Total operating revenue		466,195			261,256			—			727,451
Operating expenses:
Lease operating expenses		65,153			33,989			—			99,142
Production taxes		4,903			1,690			—			6,593
Depreciation, depletion and amortization		134,218			54,526			73,115	(b)		261,859
Write-down of oil and gas properties		10,100			—			—			10,100
Exploration expense		—			40,302			(40,302	) (d)		—
Accretion expense		8,221			1,379			—			9,600
Salaries, general and administrative expenses		21,534			6,597			—			28,131
Incentive compensation expense		1,900			1,245			—			3,145
Derivative expenses, net		3,612			—			—			3,612
Total operating expenses		249,641			139,728			32,813			422,182
Income (loss) from operations		216,554			121,528			(32,813	)		305,269
Other (income) expenses:
Interest expense		7,492			2,298			1,516	(e)		11,306
Interest income		(8,346	)		(158	)		—			(8,504	)
Other income, net		(2,354	)		(250	)		—			(2,604	)
Total other (income) expenses, net		(3,208	)		1,890			1,516			198
Income (loss) before taxes		219,762			119,638			(34,329	)		305,071
Income tax provision:
Current		46,978			24,187			—			71,165
Deferred		27,731			17,534			(12,015	) (f)		33,250
Total income taxes		74,709			41,721			(12,015	)		104,415
Net income (loss)	$	145,053		$	77,917			($22,314	)	$	200,656
Basic earnings per share	$	5.19								$	5.11
Diluted earnings per share		5.13									5.07
Average shares outstanding		27,948						11,302	(g)		39,250
Average shares outstanding assuming dilution		28,260						11,302	(g)		39,562

(1) Amounts presented herein are consistent with those presented in the Bois d’Arc Quarterly Report on Form 10-Q for the quarter ended June 30, 2008; however, certain amounts have been reclassified to conform with Stone’s presentation. The Bois d’Arc historical results are presented using the successful efforts method of accounting.

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

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STONE ENERGY CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2007
(In thousands, except per share amounts)

				Bois d’Arc			Pro Forma
	Stone			Historical			Adjustments			Pro Forma
	Historical			(1)			(Note 4)			Combined
Operating revenue:
Oil production	$	424,205		$	123,895		$	—		$	548,100
Gas production		329,047			231,565			—			560,612
Total operating revenue		753,252			355,460			—			1,108,712
Operating expenses:
Lease operating expenses		149,702			56,346			—			206,048
Production taxes		9,945			2,495			—			12,440
Depreciation, depletion and amortization		302,739			112,197			162,369	(b)		577,305
Write-down of oil and gas properties		8,164			344			(344	) (c)		8,164
Exploration expense		—			36,040			(36,040	) (d)		—
Accretion expense		17,620			3,088			—			20,708
Salaries, general and administrative expenses		33,584			12,179			—			45,763
Incentive compensation expense		5,117			2,690			—			7,807
Derivative expenses, net		666			—			—			666
Total operating expenses		527,537			225,379			125,985			878,901
Gain on Rocky Mountain Region properties divestiture		59,825			—			—			59,825
Income (loss) from operations		285,540			130,081			(125,985	)		289,636
Other (income) expenses:
Interest expense		32,068			9,033			3,029	(e)		44,130
Interest income		(12,135	)		(512	)		—			(12,647	)
Other income, net		(5,657	)		(541	)		—			(6,198	)
Early extinguishment of debt		844			—			—			844
Total other (income) expenses, net		15,120			7,980			3,029			26,129
Income (loss) before taxes		270,420			122,101			(129,014	)		263,507
Income tax provision (benefit):
Current		95,579			13,717			—			109,296
Deferred		(6,595	)		29,714			(45,155	) (f)		(22,036	)
Total income taxes		88,984			43,431			(45,155	)		87,260
Net income (loss)	$	181,436		$	78,670			($83,859	)	$	176,247
Basic earnings per share	$	6.57								$	4.53
Diluted earnings per share	$	6.54								$	4.52
Average shares outstanding		27,612						11,302	(g)		38,914
Average shares outstanding assuming dilution		27,723						11,302	(g)		39,025

(1) Amounts presented herein are consistent with those presented in the Bois d’Arc Annual Report on Form 10-K for the year ended December 31, 2007; however, certain amounts have been reclassified to conform with Stone’s presentation. The Bois d’Arc historical results are presented using the successful efforts method of accounting.

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

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STONE ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation

     The accompanying unaudited pro forma condensed consolidated financial statements and explanatory notes present the financial statements of Stone Energy Corporation (“Stone”) had the merger with Bois d’Arc Energy, Inc. (“Bois d’Arc”) and related transactions, including borrowings under the amended and restated credit facility, occurred as of June 30, 2008 (with respect to the balance sheet information using currently available fair value information) or as of January 1, 2007 (with respect to statements of operations information). The transactions for which these pro forma financial statements are presented are explained in more detail in the following footnotes.

Note 2 — Background of Merger

     On April 30, 2008, Stone announced that it had entered into a definitive merger agreement pursuant to which Bois d’Arc would merge with and into Stone Energy Offshore, L.L.C. (“Stone Offshore”), with Stone Offshore surviving the merger as a wholly owned subsidiary of Stone. At that time, Bois d’Arc was an independent exploration company engaged in the discovery and production of oil and natural gas in the Gulf of Mexico. The board of directors of Stone and Bois d’Arc each unanimously approved the transaction. Stone management and its board of directors continued in their current positions with Stone following the completion of the merger. The merger closed on August 28, 2008.

     In the merger, each issued and outstanding share of Bois d’Arc common stock was converted into (i) 0.165 shares of common stock of Stone, and (ii) $13.65 per share in cash, without interest. Pursuant to the merger agreement, Stone paid total merger consideration of approximately $935 million in cash and issued approximately 11.3 million shares of its common stock valued at $63.52 per share, resulting in total merger consideration of approximately $1.7 billion. The source of funds for the cash component of the merger consideration included approximately $510 million of cash on hand and borrowings of $425 million under Stone’s amended and restated credit facility.

Note 3 — Method of Accounting for the Merger

     Stone accounted for the Bois d’Arc merger using the purchase method of accounting for business combinations. Stone is deemed to be the acquirer of Bois d’Arc for purposes of accounting for the merger. The purchase method of accounting requires Stone to record the assets and liabilities of Bois d’Arc at their fair values.

     The purchase price of Bois d’Arc’s net assets acquired in the merger was based on the total value of the cash consideration and the Stone common stock issued to Bois d’Arc stockholders. For accounting purposes, the per share value of the Stone common stock issued is $63.52, which represents the average closing price of Stone’s common stock for the two days prior to through the two days after the announcement date of April 30, 2008.

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Note 4 — Combined Pro Forma Adjustments

     The unaudited pro forma condensed consolidated financial statements include the following pro forma adjustments:

     (a) To record the acquisition of Bois d’Arc in accordance with the terms of the merger agreement, including estimated direct merger costs. The allocation of the purchase price is preliminary and is subject to change.

     The following table represents the allocation of the total purchase price of Bois d’Arc to the acquired assets and liabilities of Bois d’Arc. The allocation represents the fair values assigned to each of the assets acquired and liabilities assumed. The purchase price allocation is preliminary, subject to finalized fair value appraisals and completed evaluations of proved and unevaluated oil and gas properties, deferred income taxes, contractual arrangements and legal and environmental matters. These and other estimates are subject to change as additional information becomes available and is assessed by Stone.

	(In thousands)
Fair value of Bois d’Arc’s net assets:
Net working capital	$	30,438
Proved oil and gas properties		1,472,315
Unevaluated oil and gas properties		425,115
Fixed and other assets .		385
Goodwill		337,879
Deferred tax liability		(533,870	)
Dismantlement reserve		(4,082	)
Asset retirement obligations		(72,364	)
Total fair value of net assets	$	1,655,816

     The following table represents the breakdown of the consideration paid for Bois d’Arc’s net assets.

	(In thousands)
Consideration paid for Bois d’Arc’s net assets:
Cash consideration paid	$	935,425
Stone common stock issued		717,887
Aggregate purchase consideration issued to Bois d’Arc stockholders		1,653,312
Plus: Estimated direct merger costs *		2,504
Total purchase price	$	1,655,816

* Estimated direct merger costs include legal and accounting fees, printing fees, investment banking expenses and other merger-related costs.

     (b) To adjust depreciation, depletion and amortization expense for the additional basis allocated to proved oil and gas properties acquired and accounted for using the full cost method of accounting as if both companies had been combined as of January 1, 2007.

     (c) To reverse the write-down of oil and gas properties recorded by Bois d’Arc under the successful efforts method of accounting. Stone follows the full cost method of accounting under which cost centers are represented by entire countries, while under successful efforts, cost centers are represented by fields, or some reasonable aggregation of fields with common production facilities or geological structural features.

     (d) To reverse the expensing of exploration costs recorded by Bois d’Arc under the successful efforts method of accounting. Under the successful efforts method of accounting, exploratory costs associated with unsuccessful exploratory wells are expensed, while under full cost accounting, such costs are capitalized. Assuming the companies had been combined as of January 1, 2007, under full cost accounting, no expensing of exploratory costs would have been required.

     (e) To record interest expense (including amortization of deferred financing costs related to the merger) associated with $425 million of borrowings under our new credit facility to fund the acquisition (see Note 6), net of capitalized interest associated with the unevaluated costs from the acquired Bois d’Arc properties.

     (f) To reflect the income tax effects of the pro forma adjustments at an estimated effective tax rate of 35%.

     (g) To adjust Stone’s weighted average basic and diluted common shares outstanding during the six months ended June 30, 2008 and the year ended December 31, 2007 based on 11.3 million shares of Stone common stock issued, as described in Note 2 above.

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Note 5 — Goodwill

     The allocation of the purchase price includes $337.9 million of asset valuation attributable to goodwill. Goodwill has been determined in accordance with Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations”, and represents the amount by which the total purchase price exceeds the aggregate fair values of assets acquired and liabilities assumed in the merger, other than goodwill. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets”, goodwill is tested for impairment on at least an annual basis. If goodwill becomes impaired, its carrying value is reduced to fair value through an impairment provision that is recorded as a charge to earnings in the period in which the impairment is measured.

Note 6 — Merger Financing

     The merger was financed with approximately $510 million of cash on hand and borrowings of $425 million under an amended and restated credit facility. On August 28, 2008, Stone entered into an amended and restated revolving credit facility totaling $700 million through a syndicate of banks led by Bank of America, N.A. and Banc of America Securities LLC. The credit facility matures on July 1, 2011. The facility is required to be guaranteed by all of the material direct and indirect subsidiaries of Stone. As of August 28, 2008, the facility is guaranteed by Stone Energy Offshore, L.L.C., a Delaware limited liability company and a wholly owned subsidiary of Stone (“Stone Offshore”).

     Stone’s availability under the credit facility will be governed by a borrowing base which is currently set at $700 million. The determination of the future borrowing base will be made by the lenders taking into consideration the estimated value of the oil and gas properties of Stone and its direct and indirect material subsidiaries in accordance with the lenders’ customary practices for oil and gas loans. This process involves reviewing estimated proved reserves and their valuation of such properties. The borrowing base is redetermined semi-annually each May 1 and November 1 and the available borrowing amount could be increased or decreased as a result of such redeterminations. In addition, the borrowing base may be redetermined up to two additional times in any calendar year if requested by lenders holding 66 2/3% of the outstanding loans and commitments under the credit facility, and may be redetermined up to two additional times in any calendar year if requested by Stone. Finally, the borrowing base may be redetermined from time to time upon the occurrence of a material adverse change as defined in the credit facility.

     Stone and Stone Offshore are required to mortgage, and grant a security interest in, their oil and gas reserves representing at least 80% of the discounted present value of the future net income of Stone, Stone Offshore and their material subsidiaries oil and gas reserves reviewed in determining the borrowing base.

     At Stone’s option, loans under the credit facility will bear interest at a rate based on the adjusted London Interbank Offering Rate plus an applicable margin, or a rate based on the prime rate or Federal funds rate plus an applicable margin. The credit facility provides for optional and mandatory prepayments, affirmative and negative covenants, and interest coverage ratio and leverage ratio maintenance covenants.

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Note 7 — Supplementary Pro Forma Information for Oil and Gas Producing Activities

     The following supplementary pro forma information for oil and gas producing activities is presented pursuant to the disclosure requirements of SFAS No. 69, “Disclosures About Oil and Gas Producing Activities.”

Pro Forma Costs Incurred in Oil and Gas Exploration and Development Activities

     The following costs were incurred in oil and gas acquisition, exploration, and development activities of Stone, Bois d’Arc and on a pro forma combined basis for the year ended December 31, 2007:

						Pro Forma
	Stone		Bois d’Arc			Combined
	(In thousands)
Acquisition costs, net of sales of unevaluated properties	$	18,730	$	8,913		$	27,643
Development costs		154,507		102,661			257,168
Exploratory costs		10,966		96,219	(1)		107,185
Subtotal		184,203		207,793			391,996
Capitalized salaries, general and administrative costs and interest, net of fees and reimbursements		36,178		—			36,178
Total costs incurred	$	220,381	$	207,793		$	428,174

(1) Includes $36,040 of expensed exploratory costs.

Pro Forma Reserve Quantity Information

     The following table sets forth the change in estimated net reserve quantities of oil and natural gas and total proved reserves, all of which are located onshore and offshore the continental United States, of Stone, Bois d’Arc and on a pro forma combined basis for the year ended December 31, 2007:

	Stone									Bois d’Arc (a)									Pro Forma Combined
							Oil and									Oil and									Oil and
				Natural			Natural						Natural			Natural									Natural
	Oil			Gas			Gas			Oil			Gas			Gas			Oil			Natural Gas			Gas
	(MBbls)			(MMcf)			(MMcfe)			(MBbls)			(MMcf)			(MMcfe)			(MBbls)			(MMcf)			(MMcfe)
Total estimated proved reserves:
Balance at January 1, 2007		41,360			342,782			590,942			20,425			221,463			344,013			61,785			564,245			934,955
Revisions of previous estimates		4,584			27,183			54,688			(1,405	)		25,266			16,836			3,179			52,449			71,524
Extensions, discoveries and other additions		1,635			20,765			30,573			1,485			29,587			38,497			3,120			50,352			69,070
Sales of reserves in place		(9,905	)		(132,559	)		(191,988	)		—			—			—			(9,905	)		(132,559	)		(191,988	)
Improved recovery		—			—	��		—			5,798			6,004			40,792			5,798			6,004			40,792
Production		(6,088	)		(45,088	)		(81,617	)		(1,671	)		(32,186	)		(42,212	)		(7,759	)		(77,274	)		(123,829	)
Balance at December 31, 2007		31,586			213,083			402,598			24,632			250,134			397,926			56,218			463,217			800,524
Estimated proved developed reserves at December 31, 2007		25,172			171,815			322,846			17,390			189,249			293,589			42,562			361,064			616,435

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Pro Forma Standardized Measure of Discounted Future Net Cash Flows

     The following tables set forth the standardized measure of discounted future net cash flows relating to estimated proved oil and natural gas reserves, all of which are located onshore and offshore the continental United States, of Stone, Bois d’Arc and on a pro forma combined basis as of December 31, 2007 as well as changes therein for the year then ended for Stone, Bois d’Arc and on a pro forma combined basis:

							Pro Forma
	Stone			Bois d’Arc (a)			Combined
	(in thousands)
Future cash inflows	$	4,538,017		$	4,146,589		$	8,684,606
Future production costs		(915,166	)		(591,581	)		(1,506,747	)
Future development costs		(842,040	)		(340,846	)		(1,182,886	)
Future income taxes		(734,139	)		(596,511	)		(1,330,650	)
Future net cash flows		2,046,672			2,617,651			4,664,323
10% annual discount		(525,083	)		(836,362	)		(1,361,445	)
Standardized measure of discounted future net cash flows	$	1,521,589		$	1,781,289		$	3,302,878

							Pro Forma
	Stone			Bois d’Arc (a)			Combined
	(in thousands)
Standardized measure of discounted future net cash flows relating to proved oil and gas reserves, at beginning of year	$	1,248,830		$	1,081,011		$	2,329,841
Changes resulting from:
Sales and transfers of oil and gas produced, net of production costs		(593,605	)		(296,619	)		(890,224	)
Changes in price, net of future production costs		857,529			563,281			1,420,810
Extensions, discoveries, and improved recovery net of future production and development costs		114,729			476,080			590,809
Changes in estimated future development costs, net of development costs incurred during the period		(25,223	)		(12,911	)		(38,134	)
Revisions of quantity estimates		363,783			102,373			466,156
Accretion of discount		142,605			131,712			274,317
Net change in income taxes		(338,336	)		(179,150	)		(517,486	)
Sales of reserves in-place		(202,648	)		—			(202,648	)
Changes in production rates due to timing and other		(46,075	)		(84,488	)		(130,563	)
Net increase in standardized measure		272,759			700,278			973,037
Standardized measure of discounted future net cash flows relating to proved oil and gas reserves , at end of year	$	1,521,589		$	1,781,289		$	3,302,878

(a)

The reserve information disclosed is based on estimates by Bois d’Arc’s independent petroleum consultants at December 31, 2007. Stone and its independent petroleum consultants have not completed a comprehensive review of the Bois d’Arc reserves. Stone’s preliminary review of Bois d’Arc’s estimated proved reserves indicated estimated oil and natural gas reserve volumes of 335,000 MMcfe at December 31, 2007.

Stone and its independent petroleum consultants will undertake a comprehensive review of Bois d’Arc’s reserves at December 31, 2008. Reserve engineering is a complex and subjective process of estimating underground accumulations of natural gas and oil that cannot be measured in an exact way and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, estimates prepared by one engineer may vary from those prepared by another. Upon completion of such a review, it is likely that the Stone estimate of Bois d’Arc’s reserves will be different, and those differences could be significant.

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