EX-99.1 3 vkin_ex991.htm UNAUDITED PRO FORMA FINANCIAL STATEMENTS vkin_ex991.htm

  EXHIBIT 99.1

 

Viking Energy Group, Inc.

Unaudited Pro Forma Condensed Combined Financial Statements

 

 

 

   

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

The following sets forth unaudited pro forma condensed consolidated financial information of Viking Energy Group, Inc. (the “Company”) prepared in accordance with Article 8-05 of Regulation S-X.  You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Risk Factors” and the Company’s consolidated financial statements and related notes and other financial information included in its most recent Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q.  The unaudited pro forma condensed consolidated financial information is based on and has been derived from the Company’s historical consolidated financial statements.

 

On October 5, 2021, the Company entered into an Assignment of Membership Interests (the “Assignment Agreement”) with TO Ichor 2021, L.L.C. (“Assignee”), pursuant to which the Company assigned all of its membership interests in Ichor Energy Holdings, L.L.C. (“Holdings”) to the Assignee, effective October 5, 2021 (the “Assignment”).

 

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2021 and statements of operations for the year ended December 31, 2020 and the six months ended June 30, 2021 give pro forma effect to the elimination of certain assets and liabilities associated with the Assignment as if it occurred on June 30, 2021 (in the case of the balance sheet) or January 1, 2020 (in the case of the statement of operations).  The unaudited pro forma effects of the disposition on the Company’s oil and gas reserves and the standardized measure of future net cash flows, give pro forma effect to the dispositions of the reserves based on the information disclosed in the Company’s annual report as of and for the year ended December 31, 2020.

   

The unaudited pro forma condensed consolidated financial information includes unaudited pro forma adjustments that are factually supportable and directly attributable to the respective transactions.  In addition, the unaudited pro forma adjustments are expected to have a continuing impact on the Company’s results.  The Company has prepared the unaudited pro forma condensed consolidated financial information for illustrative purposes only and it does not purport to represent what the results of operations or financial condition would have been had the respective transactions actually occurred on the dates indicated, nor does the Company purport to project the results of operations or financial condition for any future period or as of any future date.  The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors

   

 
2

 

  

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Historical,

June 30, 2021

 

 

Pro Forma Adjustments

 

 

Pro Forma

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 $ 7,471,030

 

 

 

 (3,525,933 )(a)

 

 $ 3,945,097

 

Accounts receivable

 

 

 5,836,331

 

 

 

 (2,449,384 )(a)

 

 

 3,386,947

 

Total current assets

 

 

 13,307,361

 

 

 

 

 

 

 

 7,332,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and gas properties, net

 

 

 97,656,287

 

 

 

 (56,955,136 )(a)

 

 

 40,701,151

 

Fixed assets, net

 

 

 357,770

 

 

 

 

 

 

 

 357,770

 

Deposits

 

 

 57,896

 

 

 

 

 

 

 

 57,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 $ 111,379,314

 

 

 

 

 

 

 $ 48,448,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND MEMBERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 $ 5,328,304

 

 

 

 (1,622,859 )(a)

 

 

 3,705,445

 

Derivative liability

 

 

 12,649,422

 

 

 

 (8,844,538 )(a)

 

 

 3,804,884

 

Undistributed revenue and royalties

 

 

 5,833,882

 

 

 

 (2,192,997 )(a)

 

 

 3,640,885

 

Current portion of long term debt

 

 

 44,325,164

 

 

 

 (2,301,067 )(a)

 

 

 42,024,097

 

Total current liabilities

 

 

 68,136,772

 

 

 

 

 

 

 

 53,175,311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long term debt - net of current portion

 

 

 51,636,447

 

 

 

 (48,740,242 )(a)

 

 

 2,896,205

 

Operating lease liability

 

 

 204,714

 

 

 

 

 

 

 

 204,714

 

Asset retirement obligations

 

 

 6,455,705

 

 

 

 (2,000,485 )(a)

 

 

 4,455,220

 

Total Liabilities

 

 

 126,433,638

 

 

 

 

 

 

 

 60,731,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Equity and accumulated income (loss)

 

 

 (15,054,324 )

 

 

 2,771,736 (a)

 

 

 (12,282,588 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Stockholders' Equity (Deficit)

 

 

 (15,054,324 )

 

 

 

 

 

 

 (12,282,588 )

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND  STOCKHOLDERS' DEFICIT

 

 $ 111,379,314

 

 

 

 

 

 

 $ 48,448,862

 

 

 
3

 

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Historical Six Months Ended

June 30, 2021

 

 

Pro Forma Adjustments

 

 

Pro Formal Six Months Ended

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

Oil and gas sales

 

 $ 21,190,712

 

 

 

 (8,919,858 )(b)

 

 $ 12,270,854

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating costs

 

 

 9,974,748

 

 

 

 (4,120,767 )(b)

 

 

 5,853,981

 

General and administrative

 

 

 2,320,934

 

 

 

 (590,960 )(b)

 

 

 1,729,974

 

Stock based compensation

 

 

 388,543

 

 

 

 

 

 

 

 388,543

 

Depreciation, depletion and amortization

 

 

 4,663,227

 

 

 

 (2,017,637 )(b)

 

 

 2,645,590

 

Accretion - ARO

 

 

 289,674

 

 

 

 (92,348 )(b)

 

 

 197,326

 

TOTAL OPERATING EXPENSES

 

 

 17,637,126

 

 

 

 

 

 

 

 10,815,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

 3,553,586

 

 

 

 

 

 

 

 1,455,440

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 (6,431,875 )

 

 

 3,505,183 (b)

 

 

 (2,926,692 )

Amortization of debt discount

 

 

 (2,145,036 )

 

 

 435,414 (b)

 

 

 (1,709,622 )

Change in fair value of derivatives

 

 

 (12,976,173 )

 

 

 10,064,747 (b)

 

 

 (2,911,426 )

Loss on financing settlements

 

 

 (926,531 )

 

 

 

 

 

 

 (926,531 )

Other income (expense)

 

 

 22,002

 

 

 

 

 

 

 

 22,002

 

TOTAL OTHER INCOME (EXPENSE)

 

 

 (22,457,613 )

 

 

 

 

 

 

 (8,452,269 )

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

 $ (18,904,027 )

 

 

 

 

 

 $ (6,996,829 )

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Basis and Diluted

 

 $ (0.28 )

 

 

 

 

 

 $ (0.10 )

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

Basis and Diluted

 

 

 67,350,993

 

 

 

 

 

 

 

 67,350,993

 

   

 
4

 

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2020

 

 

 

 

 

 

 

 

 

Historical Year Ended

December 31,

2020

 

 

Pro Forma Adjustments

 

 

Pro Forma Year Ended

December 31,

2020

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

 

 

 

 

 

 

 

 

Oil and gas sales

 

 $ 40,266,780

 

 

 

 (20,897,507 )(b)

 

 $ 19,369,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating costs

 

 

 19,075,749

 

 

 

 (8,691,873 )(b)

 

 

 10,383,876

 

Impairment of oil and gas properties

 

 

 37,500,000

 

 

 

 (20,568,275 )(b)

 

 

 16,931,725

 

General and administrative

 

 

 4,966,059

 

 

 

 (1,027,404 )(b)

 

 

 3,938,655

 

Stock based compensation

 

 

 5,625,302

 

 

 

 

 

 

 

 5,625,302

 

Depreciation, depletion and amortization

 

 

 13,513,735

 

 

 

 (6,029,318 )(b)

 

 

 7,484,417

 

Accretion - asset retirement obligations

 

 

 1,111,266

 

 

 

 (5,797 )(b)

 

 

 1,105,469

 

TOTAL OPERATING EXPENSES

 

 

 81,792,111

 

 

 

 

 

 

 

 45,469,444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

 (41,525,331 )

 

 

 

 

 

 

 (26,100,171 )

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 (19,697,942 )

 

 

 7,234,611 (b)

 

 

 (12,463,331 )

Amortization of debt discount

 

 

 (7,321,178 )

 

 

 880,449 (b)

 

 

 (6,440,729 )

Change in fair value of derivatives

 

 

 5,485,573

 

 

 

 (6,227,391 )(b)

 

 

 (741,818 )

Loss on financing settlements

 

 

 (931,894 )

 

 

 

 

 

 

 (931,894 )

Other income (expense)

 

 

 2,527

 

 

 

 (23,583 )(b)

 

 

 (21,056 )

TOTAL OTHER INCOME (EXPENSE)

 

 

 (22,462,914 )

 

 

 

 

 

 

 (20,598,828 )

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

 

 (63,988,245 )

 

 

 

 

 

 

 (46,698,999 )

Net loss attributable to noncontrolling interest

 

 

 1,996,511

 

 

 

 

 

 

 

 1,996,511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO VIKING ENERGY GROUP, INC.

 

 (61,991,734 )

 

 

 

 

 

 (44,702,488 )

Preferred stock deemed dividend

 

 

-

 

 

 

 

 

 

 

(42,002,301

) 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

 

$ 

 (61,991,734

) 

 

 

 

 

 

$ 

(86,704,789

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Basis and Diluted

 

 $ (2.42 )

 

 

 

 

 

 $

(3.28

)

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

Basis and Diluted

 

 

 26,459,006

 

 

 

 

 

 

 

 26,459,006

 

 

 
5

 

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

  

VIKING ENERGY GROUP, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

 

Ichor Energy Assignment Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet 

         

The following adjustments have been made to the accompanying unaudited pro forma condensed consolidated balance sheet as of June 30, 2021 

         

 

(a)

Represents the elimination of assets and liabilities and resulting gain on membership interest assignment of the properties sold.

 

Ichor Energy Assignment Adjustments to the Unaudited Pro Forma Condensed Consolidated Statements of Operations 

         

The following adjustments have been made to the accompanying unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2021, and the year ended December 31, 2020. 

         

 

(b)

Represents the elimination of gas and oil production revenue and expenses for the properties sold. 

 

 

6

 

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

VIKING ENERGY GROUP, INC.

UNAUDITED PRO FORMA EFFECT OF THE DISPOSITION OF OIL AND GAS RESERVES

AS OF DECEMBER 31, 2020

 

Estimated Quantities of Proved Reserves *(BOE) - 12/31/2020

 

 

Oil and Gas Dispositions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

Ichor Energy Holdings, LLC

 

 

Pro forma balances post disposition

 

 

 

 

 

 

 

 

 

 

 

Proved Developed, Producing

 

 

 12,483,138

 

 

 

 5,994,750

 

 

 

 6,488,388

 

Proved Developed, Non Producing

 

 

 3,471,570

 

 

 

 1,306,080

 

 

 

 2,165,490

 

Total Proved Developed

 

 

 15,954,708

 

 

 

 7,300,830

 

 

 

 8,653,878

 

Proved Undeveloped

 

 

 3,340,107

 

 

 

 1,579,820

 

 

 

 1,760,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 19,294,815

 

 

 

 8,880,650

 

 

 

 10,414,165

 

 

* BOE is calculated on a 6 to 1 ratio (mcf to bbl)       

      

Standardized Measure of Disocunted Future Net Cash Flows - 12/31/2020

 

 

Oil and Gas Dispositions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

Ichor Energy Holdings, LLC

 

 

Pro forma balances post disposition

 

 

 

 

 

 

 

 

 

 

 

Future cash inflows

 

 $ 457,438,654

 

 

 $ 252,990,920

 

 

 $ 204,447,734

 

Future production costs

 

 

 (202,285,561 )

 

 

 (101,418,180 )

 

 

 (100,867,381 )
Future development costs

 

 

 (32,860,370 )

 

 

 (12,862,070 )

 

 

 (19,998,300 )
Future income tax expense

 

 

 (8,424,790 )

 

 

 (5,257,134 )

 

 

 (3,167,656 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Future net cash flows

 

 

 213,867,933

 

 

 

 133,453,536

 

 

 

 80,414,397

 

10% annual discount for estimated timing of cash flows

 

 

 (96,141,109 )

 

 

 (60,054,091 )

 

 

 (36,087,018 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 $ 117,726,824

 

 

 $ 73,399,445

 

 

 $ 44,327,379

 

 

 

7