The following excerpt is from the company's SEC filing.
On September 30, 2016 (the Effective Time), certain wholly-owned subsidiaries (the Sellers) of Halcón Resources Corporation (Halcón or the Company) executed an Assignment and Assumption Agreement (the Assignment Agreement) with an affiliate of Apollo Global Management (the Buyer) pursuant to which the Sellers assigned to Buyer, as of the Effective Time, one hundred percent (100%) of the common shares (the Membership Interests) of HK TMS LLC (HK TMS), which transaction is referred to as the HK TMS Divestiture. HK TMS was previously a wholly-owned subsidiary of the Company and held all of the Com panys oil and natural gas properties in the Tuscaloosa Marine Shale. In exchange for the assignment of the Membership Interests, the Buyer assumed all obligations relating to the Membership Interests of HK TMS from and after the Effective Time.
The following unaudited pro forma condensed combined financial information and explanatory notes adjust Halcóns historical statements of operations to give effect to the HK TMS Divestiture as of January 1, 2015 with respect to the statements of operations information for the six months ended June 30, 2016 and the year ended December 31, 2015 and as of June 30, 2016, with respect to the balance sheet information. The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and are not intended to represent or be indicative of the consolidated results of operations or financial position of Halcón that would have been recorded had the HK TMS Divestiture been completed as of the dates presented and should not be taken as representative of future results of operations or financial position of Halcón. The unaudited pro forma condensed combined financial statements have been derived from and should be read in conjunction with the historical consolidated financial statements and accompanying notes contained in Halcóns Annual Report on Form 10-K for the year ended December 31, 2015 (audited) and Quarterly Report on Form 10-Q for the six months ended June 30, 2016 (unaudited), as filed with the Securities and Exchange Commission.
Halcón Resources Corporation and Subsidiaries
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2016
Receivables from derivative contracts
Debt issuance costs, net
Prepaids and other
Total current assets
Oil and natural gas properties (full cost method):
Gross oil and natural gas properties
Less - accumulated depletion
Net oil and natural gas properties
Other operating property and equipment:
Gas gathering and other operating assets
Less - accumulated depreciation
Net other operating property and equipment
Other noncurrent assets:
Equity in oil and natural gas partnership
Funds in escrow and other
Accounts payable and accrued liabilities
Asset retirement obligations
Current portion of long-term debt, net
Total current liabilities
Long-term debt, net
Other noncurrent liabilities:
Liabilities from derivative contracts
Redeemable noncontrolling interest
Stockholders equity (deficit):
Additional paid-in capital
Total stockholders equity (deficit)
Total liabilities and stockholders equity (deficit)
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Six Months Ended June 30, 2016
(in thousands, except per share amounts)
Oil, natural gas and natural gas liquids sales:
Natural gas liquids
Total oil, natural gas and natural gas liquids sales
Total operating revenues
Workover and other
Taxes other than income
Gathering and other
General and administrative
Depletion, depreciation and accretion
Full cost ceiling impairment
Other operating property and equipment impairment
Total operating expenses
Income (loss) from operations
Other income (expenses):
Net gain (loss) on derivative contracts
Interest expense and other, net
Gain (loss) on extinguishment of debt
Total other income (expenses)
Income (loss) before income taxes
Income tax benefit (provision)
Net income (loss)
Series A preferred dividends
Preferred dividends and accretion on redeemable noncontrolling interest
Net income (loss) available to common stockholders
Net income (loss) per share of common stock:
Weighted average common shares outstanding:
For the Year Ended December 31, 2015
Gain (loss) on extinguishment of Convertible Note and modification of February 2012 Warrants
Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
Eliminates cash and restricted cash of HK TMS.
Eliminates assets and liabilities attributable to HK TMS, including accounts receivable, oil and natural gas properties, other operating property and equipment, accounts payable, and asset retirement obligations.
Eliminates HK TMSs embedded derivative liability, which was recorded at fair value in the financial statements.
Eliminates the HK TMS preferred shares. As of June 30, 2016, 172,294 preferred shares were outstanding. The historical preferred shares were accreted up to the estimated required redemption value through June 30, 2016.
Eliminates HK TMSs historical accumulated deficit.
Eliminates operating revenues of HK TMS.
Eliminates operating and administrative expenses of HK TMS.
Eliminates depletion expense and the full cost ceiling impairments incurred by HK TMS on its oil and natural gas properties.
Eliminates the preferred dividends and the accretion of the preferred shares to the required redemption value.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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