1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) September 8, 1995
(July 13, 1995)
---------------
LOMAK PETROLEUM, INC.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER 0-9592
DELAWARE 34-1312571
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
500 THROCKMORTON STREET 76102
FORT WORTH, TEXAS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (817) 870-2601
The purpose of this filing is to make the following amendments pursuant to Item
7(a) and 7(b) Financial Statements and Exhibits:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
----------------------------------
(a) Financial Statements of Assets Acquired
---------------------------------------
Report of Independent Public Accountants
Statements of assets (other than productive oil and gas
properties) and liabilities as of December 31, 1994 and June
30, 1995
Statements of revenues and direct operating expenses for the
year ended December 31, 1994 and the six months Ended June
30, 1995
Notes to statements of assets (other than productive oil and
gas properties) and liabilities and statements of revenues
and direct operating expenses
(b) Pro Forma Financial Information
-------------------------------
Pro forma combined statement of income for the year ended
December 31, 1994
Pro forma combined statement of income for the six months
ended June 30, 1995
Pro forma combined balance sheet at June 30, 1995
Notes to pro forma combined financial statements
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOMAK PETROLEUM, INC.
By /s/ Thomas W. Stoelk
----------------------------
Thomas W. Stoelk
Chief Financial Officer
September 8, 1995
2
3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
THE BOARD OF DIRECTORS AND STOCKHOLDERS
LOMAK PETROLEUM, INC.
We have audited the accompanying statement of assets (other than
productive oil and gas properties) and liabilities of Parker & Parsley
Interests, as of December 31, 1994 acquired pursuant to the purchase by Lomak
Petroleum, Inc. ("Lomak"), effective June 30, 1995, as described in Note 1 and
the related statement of revenues and direct operating expenses for the year
ended December 31, 1994. The statement of assets (other than productive oil
and gas properties) and liabilities and statement of revenues and direct
operating expenses are the responsibility of Lomak's management. Our
responsibility is to express an opinion on the statement of assets (other than
productive oil and gas properties) and liabilities and statement of revenues
and direct operating expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of assets (other than
productive oil and gas properties) and liabilities and statement of revenues
and direct operating expenses are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of assets (other than productive oil and gas
properties) and liabilities and statement of revenues and direct operating
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets (other than productive oil and gas properties) and
liabilities and statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the statement of assets (other than productive oil and
gas properties) and liabilities and statement of revenues and direct operating
expenses referred to above present fairly, in all material respects, the assets
(other than productive oil and gas properties) and liabilities of Parker &
Parsley Interests as of December 31, 1994 acquired pursuant to the purchase by
Lomak Petroleum, Inc., effective June 30, 1995, as described in Note 1, and the
related revenues and direct operating expenses for the year ended December 31,
1994 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
August 4, 1995
3
4
PARKER & PARSLEY INTERESTS
STATEMENTS OF ASSETS (OTHER THAN PRODUCTIVE
OIL AND GAS PROPERTIES) AND LIABILITIES (NOTE 1)
December 31, June 30,
1994 1995
------------ ------------
(unaudited)
Assets (other than productive oil and gas properties)
Accounts receivable $ 959,278 $ 823,379
Accounts payable and accrued liabilities (287,670) (246,101)
------------ ------------
Excess of assets (other than productive oil and gas
properties) acquired over liabilities assumed $ 671,608 $ 577,278
============ ============
See accompanying notes.
4
5
PARKER & PARSLEY INTERESTS
STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (NOTE 1)
Year ended Six months ended
December 31, June 30,
1994 1995
------------ ------------
(unaudited)
Revenues, net $ 5,975,137 $ 2,894,682
Direct operating expenses (2,928,350) (1,269,707)
------------ ------------
Excess of revenues over direct operating expenses $ 3,046,787 $ 1,624,975
============ ============
See accompanying notes.
5
6
PARKER & PARSLEY INTERESTS
NOTES TO STATEMENTS OF ASSETS
(OTHER THAN PRODUCTIVE OIL AND GAS PROPERTIES)
AND LIABILITIES AND STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES
(1) GENERAL:
ORGANIZATION
The accompanying statements present the assets (other than productive
oil and gas properties) and liabilities and revenues and direct operating
expenses of certain working and other interests in oil and gas properties (the
"Parker & Parsley Interests") purchased by Lomak Petroleum, Inc. ("Lomak") in
June 1995. Such financial statements were derived from the historical records
of the predecessor owner and represent Lomak's interest.
The Parker & Parsley Interests consist of ownership in approximately
825 gross producing oil and gas wells and 300 miles of gas gathering lines.
Over 90% of the Parker & Parsley Interests are located in Pennsylvania.
BASIS OF PRESENTATION
Full historical statements, including general and administrative
expenses and interest expense, have not been presented as such a presentation
would not be meaningful. The Parker & Parsley Interests acquired represent
developed producing properties.
Parker & Parsley Interests is not a taxpaying entity. Accordingly, no
provision for income taxes has been reflected in the statements of revenues and
direct operating expenses.
(2) SALES TO MAJOR CUSTOMERS:
For the year ended December 31, 1994, three purchasers accounted for
44%, 15% and 11%, respectively of oil and gas sales. For the six months ended
June 30, 1995, three purchasers accounted for 50%, 17% and 11%, respectively of
oil and gas sales..
(3) OIL AND GAS RESERVES INFORMATION (UNAUDITED):
The estimates of the Parker & Parsley Interests in proved oil and gas
reserves, which are located entirely in the United States, are based on
evaluations by an independent petroleum engineer. Reserves at December 31,
1994, were estimated in accordance with guidelines established by the
Securities and Exchange Commission which require that reserve reports be
prepared under existing economic and operating conditions with no provision for
price escalations except by contractual arrangements.
Lomak's management emphasizes that reserve estimates are inherently
imprecise. Accordingly, the estimates are expected to change as future
information becomes available.
6
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PARKER & PARSLEY INTERESTS
NOTES TO STATEMENTS OF ASSETS
(OTHER THAN PRODUCTIVE OIL AND GAS PROPERTIES)
AND LIABILITIES AND STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES
The following unaudited table sets forth the estimated proved oil and gas
reserve quantities of the Parker & Parsley Interests at December 31, 1994:
Natural Gas
(mcfs)
------------
PROVED RESERVES
Balance, December 31, 1993 34,623,274
Production (2,732,171)
------------
Balance, December 31, 1994 31,891,103
============
PROVED DEVELOPED RESERVES
Balance, December 31, 1994 30,359,848
============
The "Standardized Measure of Discounted Future Net Cash Flows Relating
to Proved Oil and Gas Reserves" (Standardized Measure) is a disclosure
requirement under Statement of Financial Accounting Standards No. 69. The
Standardized Measure does not purport to present the fair market value of
proved oil and gas reserves. This would require consideration of expected
future economic and operating conditions, which are not taken into account in
calculating the Standardized Measure.
Future cash inflows were estimated by applying year end prices,
adjusted for fixed and determinable escalations to the estimated future
production less estimated future production costs based on year end costs and
future development costs. Future net cash inflows were discounted using a 10%
annual discount rate to arrive at the Standardized Measure.
The standardized measure of discounted future net cash flows relating
to proved oil and gas properties are as follows:
As of
December 31,
1994
---------------
Future cash inflows $ 73,004,542
Future costs:
Production (32,957,919)
Development (965,000)
---------------
Future net cash flows 39,081,623
Income taxes -
---------------
Undiscounted future net cash flows 39,081,623
10% discount factor (15,819,896)
---------------
Standardized measure $ 23,261,727
===============
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PARKER & PARSLEY INTERESTS
STATEMENTS OF ASSETS
(OTHER THAN PRODUCTIVE OIL AND GAS PROPERTIES)
AND LIABILITIES AND STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES
Changes in standardized measure of discounted future net cash flows from proved reserve quantities are as follows:
Year ended
December 31,
1994
---------------
Standardized measure, beginning of year $ 26,308,514
Production (3,046,787)
---------------
Standardized measure, end of year $ 23,261,727
===============
8
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PRO FORMA COMBINED FINANCIAL STATEMENTS
WITH RESPECT TO THE TRANSACTIONS
The accompanying unaudited pro forma combined statement of income
gives effect to (i) the purchase by the Company of 100% of the equity of
Gillring Oil Company ("Gillring"), accounted for as a purchase, (ii) the
purchase by the Company of 100% of the equity of Red Eagle Resources
Corporation ("Red Eagle"), accounted for as a purchase and (iii) the purchase
by the Company of certain oil and gas properties from a subsidiary of Parker &
Parsley Petroleum Co. The unaudited pro forma combined statement of income for
the year ended December 31, 1994 was prepared as if all transactions had
occurred on January 1, 1994. The unaudited pro forma combined statement of
income for the six months ended June 30, 1995 was prepared as if all
transactions had occurred on January 1, 1995. The accompanying unaudited pro
forma combined balance sheet of the Company as of June 30, 1995 has been
prepared as if the Parker & Parsley acquisition had occurred as of that date.
The historical information provided in the statement of income for the year
ended December 31, 1994, represents the following periods for the various
acquisitions: (i) Gillring represents the period from January 1, 1994 through
January 31, 1994, (ii) Red Eagle represents the period from January 1, 1994
through December 31, 1994 and (iii) Parker & Parsley represents the periods
from January 1, 1994 through December 31, 1994 and from January 1, 1995 through
June 30, 1995.
This information is not necessarily indicative of future combined
operations and it should be read in conjunction with the separate historical
statements and related notes of the respective entities appearing elsewhere in
this filing or incorporated by reference herein.
9
10
LOMAK PETROLEUM, INC.
PRO FORMA COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
Gillring Parker &
Lomak Oil Co. Red Eagle Parsley
----------- ----------- ----------- -----------
Historical Historical Historical Historical Pro Forma
Year Ended Month Ended Year Ended Year Ended Adjustments for
December 31, January 31, December 31, December 31, the acquisitions Pro Forma
1994 1994 1994 1994 (Note 1) Combined
----------- ----------- ----------- ----------- ----------- -----------
Revenues
Oil and gas production $24,460,945 $540,019 $4,236,396 $5,975,137 $ - $35,212,497
Field services 7,667,135 - 6,634,668 - - 14,301,803
Gas marketing and
transportation 2,194,892 - 993,902 - - 3,188,794
Interest and other 470,562 28,484 693,624 - (28,484) (e) 1,164,186
----------- ----------- ----------- ----------- ----------- -----------
34,793,534 568,503 12,558,590 5,975,137 (28,484) 53,867,280
----------- ----------- ----------- ----------- ----------- -----------
Expenses
Oil and gas production 10,018,941 222,198 2,481,906 2,928,350 (1,153,140) (c) 14,498,255
Field services 5,777,690 - 2,503,305 - - 8,280,995
Gas marketing and
transportation 490,097 - - - - 490,097
Exploration 359,315 8,975 473,916 - - 842,206
General and administrative 2,477,680 67,780 3,786,925 - (3,064,388) (c) 3,267,997
Interest 2,807,216 21,488 144,900 - 1,776,816 (a) 4,750,420
Depletion, depreciation and
amortization 10,104,987 - 2,106,549 - 3,705,170 (b) 15,916,706
Lease impairments - - 1,097,000 - (1,097,000) (g) 0
Commodity trading losses - - 2,136,122 - (2,136,122) (f) 0
----------- ----------- ----------- ----------- ----------- -----------
32,035,926 320,441 14,730,623 2,928,350 (1,968,664) 48,046,676
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before income
taxes 2,757,608 248,062 (2,172,033) 3,046,787 1,940,180 5,820,604
Income taxes
Current (20,531) - (86,976) - (20,493) (d) (128,000)
Deferred (118,523) - 475,180 - (1,193,657) (d) (837,000)
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from continuing
operations $2,618,554 $248,062 ($1,783,829) $3,046,787 $726,030 $4,855,604
=========== =========== =========== =========== =========== ===========
Income from continuing
operations applicable to
common shares $2,243,554 $4,480,604
=========== ===========
Net income per common share $0.25 $0.37
=========== ===========
Weighted average shares
outstanding 9,050,558 2,861,374 38,268 11,950,200
=========== ===========
See notes to pro forma combined financial statements.
10
11
LOMAK PETROLEUM, INC.
PRO FORMA COMBINED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
Lomak Red Eagle Parker &
Parsley
---------- --------- ----------
Historical Historical Historical Pro Forma
Six One Six
Months Month Ended Months Ended Adjustments for
Ended
June 30, January 31, June 30, the acquisitions Pro Forma
1995 1995 1995 (Note 2) Combined
---------- --------- ---------- ---------- ----------
Revenues
Oil and gas production $15,333,138 $271,957 $2,894,682 ($271,957) (j) $18,227,820
Field services 4,893,388 497,505 0 (497,505) 4,893,388
Gas marketing and
transportation 1,514,513 19,116 0 (19,116) (j) 1,514,513
Interest and other 751,004 3,905 0 (3,905) (j) 751,004
---------- --------- ---------- ---------- ----------
22,492,043 792,483 2,894,682 (792,483) 25,386,725
---------- --------- ---------- ---------- ----------
Expenses
Oil and gas production 6,438,378 137,153 1,269,707 (768,048) (j,l) 7,077,190
Field services 2,876,328 265,918 0 (265,918) (j) 2,876,328
Gas marketing and
transportation 389,754 3,823 0 (3,823) (j) 389,754
Exploration 275,448 2,618 0 (2,618) (j) 275,448
General and administrative 1,518,844 182,588 0 (273,563)(j,k,l 1,427,869
Interest 2,398,489 3,586 0 768,278 (h,j) 3,170,353
Depletion, depreciation and
amortization 6,104,474 160,950 0 792,099 (i,j) 7,057,523
---------- --------- ---------- ---------- ----------
20,001,715 756,636 1,269,707 246,407 22,274,465
---------- --------- ---------- ---------- ----------
Income (loss) before income
taxes 2,490,328 35,847 1,624,975 (1,038,890) 3,112,260
Income taxes
Current (47,513) 0 0 (50,487) (m) (98,000)
Deferred (622,028) (12,188) 0 (165,784) (j,m) (800,000)
---------- --------- ---------- ---------- ----------
Income (loss) from continuing
operations $1,820,787 $23,659 $1,624,975 ($1,255,161) $2,214,260
========== ========= ========== ========== ==========
Income from continuing
operations
applicable to common shares $1,633,287 $2,026,760
=========== ===========
Net income per common share $0.14 $0.17
=========== ===========
Weighted average shares
outstanding 11,314,495 944,737 12,259,232
=========== ===========
See notes to pro forma combined financial statements.
11
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LOMAK PETROLEUM, INC.
PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 1995
(UNAUDITED)
Lomak Parker &
Parsley
------------ ------------
Pro Forma
Historical Historical Adjustments for
as of June 30, as of June 30, the acquisition Pro Forma
1995 1995 (Note 2) Combined
------------ ------------ ------------ ------------
ASSETS
Current assets
Cash and equivalents $5,307,307 $ - $ - $5,307,307
Accounts receivable 8,215,895 823,379 - 9,039,274
Inventory and other 1,417,251 - - 1,417,251
------------ ------------ ------------ ------------
Total current assets 14,940,453 823,379 - 15,763,832
------------ ------------ ------------ ------------
Oil and gas properties 155,109,796 (577,278) 17,347,200 (n) 171,879,718
Accumulated depletion and amortization (25,866,264) - - (25,866,264)
------------ ------------ ------------ ------------
129,243,532 (577,278) 17,347,200 146,013,454
------------ ------------ ------------ ------------
Gas transportation and field service
assets 16,294,400 - 2,852,800 (n) 19,147,200
Accumulated depreciation (3,256,841) - - (3,256,841)
------------ ------------ ------------ ------------
13,037,559 - 2,852,800 15,890,359
------------ ------------ ------------ ------------
Other assets - - - -
------------ ------------ ------------ ------------
$157,221,544 $246,101 $20,200,000 $177,667,645
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $5,940,545 $ - $ - $5,940,545
Accrued liabilities 3,750,285 246,101 - 3,996,386
Current portion of debt 502,519 - - 502,519
------------ ------------ ------------ ------------
Total current liabilities 10,193,349 246,101 - 10,439,450
------------ ------------ ------------ ------------
Long-term debt 71,131,900 - 20,200,000 (n) 91,331,900
Deferred income taxes 17,012,420 - - 17,012,420
Stockholders' equity
Preferred stock 200,000 - - 200,000
Common stock 119,241 - - 119,241
Capital in excess of par value 64,475,994 - - 64,475,994
Retained earnings (deficit) (5,911,360) - - (5,911,360)
------------ ------------ ------------ ------------
Total stockholders equity 58,883,875 - - 58,883,875
------------ ------------ ------------ ------------
$157,221,544 $246,101 $20,200,000 $177,667,645
============ ============ ============ ============
See notes to pro forma combined financial statements.
12
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LOMAK PETROLEUM, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE (1) PRO FORMA ADJUSTMENTS FOR THE ACQUISITIONS OF GILLRING AND PARKER &
PARSLEY'S APPALACHIAN ASSETS AND THE MERGER WITH RED EAGLE -- THE TWELVE MONTHS
ENDED DECEMBER 31, 1994
On March 5, 1994, the Company completed the acquisition of Gillring Oil
Company ("Gillring") for approximately $11.5 million. Gillring's assets
included approximately $5.4 million of working capital. As a result of the
acquisition, the Company acquired 100% of Gillring's assets including its oil
and natural gas producing properties and its 67% interest in a Texas limited
partnership, Gillring Oil L.P. The transaction was accounted for using the
purchase method of accounting.
On October 28, 1994, Lomak and Red Eagle Resources Corporation ("Red
Eagle") executed a definitive merger agreement pursuant to which Red Eagle was
acquired by the Company. The consideration paid for the acquisition totals $11
million in cash and 2,862,000 shares of Lomak common stock.
On June 30, 1995, the Company purchased properties in Pennsylvania and West
Virginia from a subsidiary of Parker & Parsley Petroleum Company for
approximately $20.2 million.
The accompanying unaudited pro forma combined statement of income for the
year ended December 31, 1994 has been prepared as if the acquisitions had
occurred on January 1, 1994 and reflects the following adjustments:
(a) To adjust interest expense for the estimated amounts that would have been
incurred on the incremental borrowings to acquire Gillring, Red Eagle and
Parker & Parsley's Appalachian assets.
Interest Period of Interest
Amount Rate Time Expense
----------- ----------- ------------ ------------
Gillring 6,371,930 6.1% 45 days 48,585
Red Eagle 7,851,095 6.1% 365 days 478,917
Parker & Parsley 20,200,000 6.1% 365 days 1,249,314
----------- ------------
34,423,025 1,776,816
Interest expense ............................................... 1,776,816
Cash ....................................................... 1,776,816
(b) To record depletion expense for the acquisitions of Gillring and Parker &
Parsley's assets at $4.77 and to adjsut the historical depletion rate for Lomak
and Red Eagle from $4.41 and $3.08, respectively to $4.77.
Depletion
Bbls Mcfs BOE Adjustment
--------- ----------- ----------- -----------
Lomak historical 639,615 6,996,202 1,805,649 650,034
Gillring 5,917 235,644 45,191 215,561
Red Eagle 61,909 1,998,358 394,969 667,498
Parker & Parsley - 2,732,171 455,362 2,172,077
--------- ----------- ----------- -----------
707,441 11,962,375 2,701,171 3,705,170
Depletion expense ..................................................... 3,705,170
Accumulated depletion ............................................. 3,705,170
13
14
LOMAK PETROLEUM, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
(c) To adjust oil and gas production expense and general and administrative
expenses for the reduction in costs after the acquisitions of Gillring, Red
Eagle and Parker & Parsley's assets.
Accrued expenses ...................................................... 4,217,528
Oil and gas production expense - Parker & Parsley ................. 1,153,140
General & administrative expenses - Gillring ...................... 33,388
General & administrative expenses - Red Eagle ..................... 3,031,000
(d) To adjust the provision for income taxes for the change in taxable income
resulting from the Gillring, Red Eagle and Parker & Parsley acquisitions and
the effect on deferred taxes recorded at January 1, 1994 had the acquisitions
taken place at that time.
Income taxes expense-current ............................... 20,493
Income tax expense-deferred ................................ 1,193,657
Income tax payable ................................. 20,493
Deferred income taxes .............................. 1,193,657
(e) To reduce interest income on Gillring for cash balances used to reduce
incremental borrowings.
Interest income ..................................................... 28,484
Cash ............................................................. 28,484
(f) To eliminate 1994 losses realized by Red Eagle on speculative commodity
trade. Lomak has never and does not anticipate in the future participating in
speculative commodity trading.
Cash .............................................................. 2,136,122
Commodity trading income ....................................... 2,136,122
(g) To eliminate impairment losses on oil & gas properties.
Oil and gas properties .................................. 1,097,000
Lease impairments .................................... 1,097,000
14
15
LOMAK PETROLEUM, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE (2) PRO FORMA ADJUSTMENTS FOR THE ACQUISITION OF PARKER & PARSLEY'S
APPALACHIAN ASSETS AND THE MERGER WITH RED EAGLE -- AS OF AND FOR THE SIX
MONTHS ENDED JUNE 30, 1995
The accompanying unaudited pro forma combined balance sheet has been
prepared as if the Parker & Parsley acquisition had occured on June 30, 1995.
The accompanying unaudited pro forma combined statement of income for the six
months ended June 30, 1995 has been prepared as if the acquisition had occurred
on January 1, 1995 and reflects the following adjustments:
(h) To adjust interest expense for the estimated amounts that would have been
incurred on the incremental borrowings to acquire Parker & Parsley's
Appalachian assets.
Interest Period of Interest
Amount Rate Time Expense
----------- ------------ ------------- -----------
Parker & Parsley 20,200,000 7.6% 181 days 771,864
Interest expense ................................................. 771,864
Cash ......................................................... 771,864
(i) To record depletion expense for the acquisition of Parker & Parsley's
assets at $4.34 and to adjust the historical depletion rate for Lomak and Red
Eagle from $4.38 and $3.21, respectively to $4.34.
Depletion
Bbls Mcfs BOE Adjustment
--------- ----------- ----------- ----------
Lomak historical 413,139 4,766,275 1,207,518 (48,301)
Red Eagle 3,966 147,825 28,604 32,323
Parker & Parsley - 1,339,665 223,278 969,027
--------- ----------- ----------- ----------
417,105 6,253,765 1,459,400 953,049
Depletion expense .................................................. 953,049
Accumulated depletion .......................................... 953,049
15
16
LOMAK PETROLEUM, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
(j) To eliminate January 1995 Red Eagle income statement activity.
Oil and gas production revenue ...................................... 271,957
Field services revenue .............................................. 497,505
Gas transportation and marketing revenue ............................ 19,116
Interest and other income ........................................... 3,905
Oil and gas production expense .................................. 137,153
Field services expense .......................................... 265,918
Gas transportation and marketing expense ........................ 3,823
Exploration expense ............................................. 2,618
General and administrative expense .............................. 182,588
Interest expense ................................................ 3,586
Depletion, depreciation and amortization expense ................ 160,950
Income tax expense .............................................. 12,188
Retained earnings ............................................... 23,658
(k) To remove minority interest from January 1995 Red Eagle income statement.
Retained earnings ................................................... 12,181
General and administrative expense ............................... 12,181
(l) To reduce oil and gas production and general and adminstrative expenses
for cost reductions.
Accrued expenses .................................................... 709,689
Oil and gas production expense ................................... 630,895
General and administrative expense ............................... 78,794
(m) To adjust the provision for income taxes for the change in taxable income
resulting from the Gillring, Red Eagle and Parker & Parsley acquisitions and
the effect on deferred taxes recorded at January 1, 1994 had the acquisitions
taken place at that time.
Income taxes expense-current ........................................ 50,487
Income tax expense-deferred ......................................... 177,972
Income tax payable ............................................... 50,487
Deferred income taxes ............................................ 177,972
(n) To record the purchase of Parker & Parsley's Appalachian oil & gas
properties, funded through the Company's credit facility.
Oil and gas properties .............................................. 17,347,200
Gas transportation and field service assets ......................... 2,852,800
Long-term debt ................................................... 20,200,000
16
