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 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 direr significantly from the pro forma amounts reflected herein due to a variety of factors

 

 
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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

 

 

 
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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

 

   

 
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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 )

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Basis and Diluted

 

$ (2.42 )

 

 

 

 

 

$ (1.69 )

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

Basis and Diluted

 

 

26,459,006

 

 

 

 

 

 

 

26,459,006

 

 

 
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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. 

 

 
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