PRO FORMA FINANCIAL INFORMATION
The pro forma financial statements are based on the historical financial
statements of Enterra, Total Energy Services Company ("TOTAL"), prior to its
acquisition by Enterra on August 12, 1994, and Zapata Energy Industries
("Zapata Energy Industries"), giving effect, under the purchase method of
accounting, to certain adjustments. The pro forma balance sheet was prepared
as if the acquisitions occurred on June 30, 1995. The pro forma statements
of operations were prepared as if the acquisitions had occurred as of January
1, 1994 and do not include any incremental revenues or the effect of any
modifications in operations that might have occurred had Enterra owned and
operated the businesses during the periods except as described below.
The pro forma financial statements should be read in conjunction with
the notes to the following pro forma financial statements and with the
Consolidated Financial Statements of Enterra and TOTAL and the related notes
thereto incorporated by reference herein and the Audited and Interim Combined
Financial Statements of Zapata Energy Industries and the related notes
thereto contained elsewhere in this Current Report on Form 8-K. The pro
forma financial information has been prepared based upon assumptions deemed
appropriate by management of Enterra. This information is not necessarily
indicative of the actual results or financial condition that would have been
achieved had the acquisitions occurred at these dates or of future results.
Actual results of TOTAL's operations are included with Enterra's results
after August 11, 1994 and actual results of Zapata Energy Industries will be
included with Enterra's results only from the date on which the acquisition
is consummated.
UNAUDITED PRO FORMA BALANCE SHEET
JUNE 30, 1995
(In thousands)
HISTORICAL PRO FORMA
--------------------------------- -------------------------------------
ZAPATA
ENERGY
ENTERRA INDUSTRIES ADJUSTMENTS(a) ADJUSTED
--------------- -------------- ----------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 7,305 $ 2,202 $ -- $ 9,507
Accounts receivable 126,699 10,198 -- 136,897
Inventories 101,387 24,173 -- 125,560
Deferred tax and other current assets 23,065 -- -- 23,065
----------- ----------- ------------ -----------
Total current assets 258,456 36,573 -- 295,029
Property, plant and equipment 543,355 67,307 (7,810) 602,852
Less accumulated depreciation 308,343 7,810 (7,810) 308,343
----------- ----------- ------------ -----------
Property, plant and equipment, net 235,012 59,497 -- 294,509
Deferred charges and other assets 6,159 1,493 -- 7,652
Goodwill, net 178,265 18,523 18,915 215,703
----------- ----------- ------------ -----------
$ 677,892 $ 116,086 $ 18,915 $ 812,893
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,142 $ 27,228 $ (27,228) $ 1,142
Accounts payable 32,724 3,558 (3,558) 32,724
Other current liabilities 57,502 4,743 (4,743) 57,502
----------- ----------- ------------ -----------
Total current liabilities 91,368 35,529 (35,529) 91,368
Long-term debt 128,643 763 135,000 263,643
(763)
Deferred income taxes 12,198 1,591 (1,591) 12,198
Other liabilities 470 52,902 (52,902) 470
Minority interest 1,756 -- -- 1,756
Stockholders' equity:
Common stock 27,775 3 (3) 27,775
Additional paid-in capital 288,946 20,787 (20,787) 288,946
Cumulative translation adjustment (8,529) -- -- (8,529)
Retained earnings 135,265 4,510 (4,510) 135,265
----------- ----------- ------------ -----------
Total stockholders' equity 443,457 25,300 (25,300) 443,457
----------- ----------- ------------ -----------
$ 677,892 $ 116,085 $ 18,915 $ 812,892
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
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ENTERRA CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(In thousands, except per share data)
HISTORICAL PRO FORMA
--------------------------------- -------------------------------------
ENERGY
ENTERRA INDUSTRIES ADJUSTMENTS ADJUSTED
--------------- -------------- ----------------- ---------------
REVENUES $ 229,605 $ 34,923 $ -- $ 264,528
COSTS AND EXPENSES
Costs of operations 141,474 25,289 (2,374) (c) 164,389
Selling, general and administrative 49,017 3,840 (1,960) (c) 50,897
Depreciation and amortization 24,242 2,916 536 (d) 27,694
Unusual charges 28,281 -- -- 28,821
---------- ---------- ---------- ----------
243,014 32,045 (3,798) 271,261
---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) (13,409) 2,878 3,798 (6,733)
Other income (expense)
Interest income 390 156 -- 546
Interest and debt expense (4,647) (1,650) (2,974)(e) (9,271)
Other 871 474 -- 1,345
---------- ---------- ----------- ----------
Income (loss) before income taxes and minority
interests (16,795) 1,858 824 (14,113)
Income tax provision (benefit) (9,396) 820 311(f) (8,265)
---------- ---------- ---------- ----------
Income (loss) before minority interests (7,399) (1,038) 513 (5,848)
Minority interests in (income) loss of
subsidiaries 311 -- -- 311
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (7,088) $ 1,038 $ 513 $ (5,537)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Average shares outstanding 27,755 -- -- 27,755
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
NET INCOME (LOSS) PER SHARE $ (0.26) $ -- $ -- $ (0.20)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Adjusted shares outstanding (k) 23,437 23,437
---------- ----------
---------- ----------
Adjusted net income (loss)
per share (k) $ (0.30) $ (0.24)
---------- ----------
---------- ----------
3
ENTERRA CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
DECEMBER 31, 1994
(In thousands, except per share data)
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
----------------------------------------------- -------------------------------------
ZAPATA
ENERGY
ENTERRA TOTAL ADJUSTMENTS ADJUSTED INDUSTRIES ADJUSTMENTS ADJUSTED
------------ --------- ----------- -------- ------------- ----------- -----------
January 1
Year Ended to Eleven Months
December 31, August 11, Ended
1994 1994 September 30,
1994
------------ ---------- ----------- --------- ------------- ----------- -----------
REVENUES $ 302,243 $ 146,390 -- $ 448,633 $ 72,522 $ 6,014 (b) $ 527,169
COSTS AND EXPENSES
Costs of operations 179,629 100,089 279,718 52,768 5,080 (b) 332,818
(4,748)(c)
Selling, general and admin. 69,055 27,763 (1,910)(g) 94,908 6,917 390 (b) 98,295
(3,920)(c)
Depreciation and amortization 33,104 7,833 3,114 (h) 44,051 4,867 490 (b) 50,480
1,072 (d)
--------- ---------- ------ -------- -------- ------- ---------
281,788 135,685 1,204 418,677 64,552 1,636 481,593
--------- ---------- ------ -------- -------- ------- ---------
OPERATING INCOME (LOSS) 20,455 10,705 (1,204) 29,956 7,970 7,650 45,576
Other income (expense)
Interest income 1,019 303 -- 1,322 -- -- 1,322
Interest and debt expense (3,066) (2,841) 77 (i) (5,830) (3,124) (4,058)(e) (13,012)
Other 246 (517) -- (271) -- 221 (50)
--------- ---------- ------ -------- -------- ------- ---------
Income before income taxes and
minority interests 18,654 7,650 (1,127) 25,177 4,846 3,813 33,836
Income tax provision (benefit) 6,256 2,586 331 (j) 9,173 2,049 1,408 (f) 12,630
--------- ---------- ------ -------- -------- ------- ---------
Income before minority interests 12,398 5,064 (1,458) 16,004 2,797 2,405 21,206
Minority interests 119 123 -- 242 -- -- 242
--------- ---------- ------ -------- -------- ------- ---------
NET INCOME (LOSS) $ 12,517 $ 5,187 $(1,458) $ 16,246 $ 2,797 $ 2,405 $ 21,448
--------- ---------- ------ -------- -------- ------- ---------
Average shares outstanding 20,832 -- 6,904 27,736 -- -- 27,736
--------- ---------- ------ -------- -------- ------- ---------
--------- ---------- ------ -------- -------- ------- ---------
NET INCOME (LOSS) PER SHARE $ 0.60 $ -- $ -- $ 0.59 $ 0.77
--------- ---------- ------ -------- -------- ------- ---------
--------- ---------- ------ -------- -------- ------- ---------
Adjusted shares outstanding(k) 17,603 5,834 23,437 23,437
--------- ---------- ------ -------- -------- ------- ---------
--------- ---------- ------ -------- -------- ------- ---------
Adjusted net income (loss)
per share(k) $ 0.71 $ 0.69 $ 0.92
--------- ---------- ------ -------- -------- ------- ---------
--------- ---------- ------ -------- -------- ------- ---------
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(a) Assumes Enterra will purchase the assets only of Zapata Energy Industries
in a taxable transaction for cash of $130 million and will incur
transaction costs of $5 million. All necessary funds are assumed borrowed
pursuant to an increase in Enterra's current revolving line of credit.
Due to the recent acquisition of these assets by Zapata Energy Industries'
parent and the write-up to fair market value at that time, no further
write-up is expected. Consequently, the transaction assumes goodwill
will be recorded in the amount of $37,438 ($18,915 more than reflected
on Zapata Energy Industries financials) and such will be amortized over
40 years.
(b) To reflect the results of operations for Zapata Energy Industries for the
month of October 1993, a period prior to its ownership by Zapata.
(c) Reflects the elimination of salaries, benefits and related costs as well as
other facilities and overhead costs that are expected as a result of the
overlapping operations of Zapata Energy Industries and Enterra's
compression business.
(d) Reflects an increase in depreciation due to an adjustment to conform to the
shorter life assigned to rental assets by Enterra's compression business
and an increase in goodwill amortization expense due to the increase in
goodwill created by the acquisition of Zapata Energy Industries.
(e) Reflects increased interest expense caused by the borrowing of $135
million in connection with the acquisition of Zapata Energy Industries.
(f) Reflects an adjustment to income tax expense for the incremental pretax
income that results from the acquisition of Zapata Energy Industries and
the adjustments reflected above.
(g) Reflects the elimination of salaries, benefits and related costs incurred
during 1994 of the TOTAL corporate staff and other administrative personnel
who were not retained by the combined entity as a result of overlapping
positions.
(h) Reflects increased depreciation expense due to the write-up of fixed
assets depreciated over the estimated ten year life and increased
amortization related to goodwill amortized over 40 years, related to the
TOTAL acquisition.
(i) Reflects a net decrease in interest expense that would have resulted from
Enterra's more favorable borrowing rates, offset in part by increased
borrowings, from the TOTAL acquisition.
(j) Reflects an adjustment to tax expense for the above TOTAL adjustments and
to reflect Enterra's incremental tax rate.
(k) Adjusted shares outstanding and adjusted net income (loss) per share
reflect the conversion of Enterra's actual common shares outstanding to the
pro forma common shares of Weatherford International Incorporated
("Weatherford") (0.845 shares of Weatherford for each Enterra share
after giving effect to a one-for-two reverse stock split to be effected
by Weatherford at the effective time of the merger) that will be received
by Enterra stockholders assuming the merger of Enterra and Weatherford is
approved as proposed in the Joint Proxy Statement/Prospectus of Enterra
and Weatherford. This information is provided herein solely for
comparative purposes to information provided in the Joint Proxy
Statement/Prospectus.
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