Subsequent Events (Tables) (Callon Properties, Subsequent Event)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2013
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Callon Properties | Subsequent Event
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Purchase Price Allocation for Acquisition |
The following table presents the preliminary purchase price allocation, including estimated adjustments, for the acquisition of the Callon Properties including in the First Closing (in thousands):
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Summary of Proforma Financial Information for Acquisition |
The following table presents a summary of our pro forma financial information (in thousands except earnings per share):
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Business Acquisition Pro Forma Information Incremental Items |
The following table presents incremental items included in the pro forma information reported above for the Callon Properties included in the First Closing (in thousands):
The sources of information and significant assumptions are described below: (a) Revenues and direct operating expenses for the Callon Properties were derived from the unaudited historical financial records of Callon. (b) Incremental costs for insurance were estimated from the incremental costs to add the Callon Properties included in the First Close to W&T’s insurance programs. The direct operating expenses for the Callon Properties described above exclude insurance costs. (c) DD&A was estimated using the full-cost method and determined as the incremental DD&A expense due to adding the Callon Properties’ costs, reserves and production into our currently existing full cost pool in order to compute such amounts. The purchase price allocation included $7.2 million that was allocated to the pool of unevaluated properties for oil and natural gas interests. Accordingly, no DD&A expense was estimated for the unevaluated properties. ARO was estimated by W&T management. (d) The acquisition was assumed to be funded entirely with borrowed funds. Interest expense was computed using assumed borrowings of $76.4 million, which equates to the cash component of the transaction, and an interest rate of 2.0%, which equates to the rates applied to incremental borrowings on the revolving bank credit facility. (e) The change to capitalized interest was computed for the addition to the pool of unevaluated properties and the capitalization interest rate was adjusted for the assumed borrowings. Positive amounts represent increases to net expenses. The negative amount represents a decrease to net expenses. (f) Income tax expense was computed using the 35% federal statutory rate. (g) The 2012 periods above do not include any pro forma adjustments related to the 2012 acquisition as described in Note 2. |