EXHIBIT 99.1
Viking Energy Group, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
VIKING ENERGY GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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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 July 8, 2022, four of the wholly-owned subsidiaries of Petrodome Energy, LLC (“Petrodome”), a wholly owned subsidiary of Viking Energy Group, Inc. (“Viking”), entered into Purchase and Sale Agreements (the “Purchase Agreements”) to sell all of their interests in the oil and gas assets owned by those Petrodome subsidiaries, including in the aggregate, interests in 8 producing wells, 8 shut-in wells, 2 salt water disposal wells and 1 inactive well, to the third parties and on the headline terms described below (collectively the “Dispositions”). On July 8, 2022, the Dispositions were completed and the purchase price in each of the Dispositions was received by each of the subsidiaries, and applied to repay CrossFirst Bank all amounts owed to it by Petrodome under the June 13, 2018, revolving line of credit loan, which loan was secured by a mortgage on all of the oil and gas leases of Petrodome and its subsidiaries, a security agreement covering all of Petrodome assets, and a guaranty by Viking.
| · | On July 8, 2022, Petrodome Napoleonville, LLC, the wholly owned Louisiana subsidiary of Petrodome, entered into (i) a Purchase and Sale Agreement to sell 50% of its oil and gas assets to Napoleonville, L.L.C., a Delaware limited liability company, for a $37,500 purchase price, and (ii) a Purchase and Sale Agreement to sell the remaining 50% of its oil and gas assets to WPP Petro, L.L.C., a Delaware limited liability company, for a $37,500 purchase price. |
| · | On July 8, 2022, Petrodome Bloomington, LLC, the wholly owned Texas subsidiary of Petrodome, entered into (i) a Purchase and Sale Agreement to sell 50% of its oil and gas assets to Bloomington, L.L.C., a Delaware limited liability company, for a $25,000 purchase price, and (ii) a Purchase and Sale Agreement to sell the remaining 50% of its oil and gas assets |
| · | On July 8, 2022, Petrodome Pineville, LLC, the wholly owned Mississippi subsidiary of Petrodome, entered into (i) a Purchase and Sale Agreement to sell 50% of its oil and gas assets to Bay Springs North, L.L.C., a Delaware limited liability company, for a $1,657,500 purchase price, and (ii) a Purchase and Sale Agreement to sell the remaining 50% of its oil and gas assets to WPP Petro, L.L.C., a Delaware limited liability company, for a $1,657,500 purchase price. |
| · | On July 8, 2022, Petrodome Louisiana Pipeline, LLC, the wholly owned Louisiana subsidiary of Petrodome, entered into (i) a Purchase and Sale Agreement to sell 50% of its oil and gas assets to East Mud Lake, L.L.C., a Delaware limited liability company, for a $75,000 purchase price, and (ii) a Purchase and Sale Agreement to sell the remaining 50% of its oil and gas assets to WPP Petro, L.L.C., a Delaware limited liability company, for a $75,000 purchase price. |
The unaudited pro forma condensed consolidated balance sheet as of June 30, 2022 and statements of operations for the six months ended June 30, 2022 and the year ended December 31, 2021 give pro forma effect to the elimination of certain assets and liabilities associated with the Dispositions as if they occurred on June 30, 2022 (in the case of the balance sheet) or January 1, 2021 (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, 2021.
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 CONSOLIDATED FINANCIAL STATEMENTS
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2022
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| Historical June 30, 2022 |
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| Pro Forma Adjustments |
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| Pro Forma June 30, 2022 |
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| ASSETS |
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| Current assets: |
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| Cash |
| $ | 3,332,399 |
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|
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| $ | 3,332,399 |
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| Accounts receivable, net |
|
| 6,125,290 |
|
|
|
|
|
| 6,125,290 |
| |
| Inventory |
|
| 8,146,111 |
|
|
|
|
|
| 8,146,111 |
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| Notes receivable |
|
| 1,960,000 |
|
|
|
|
|
| 1,960,000 |
| |
| Prepaids and other current assets |
|
| 670,957 |
|
|
|
|
|
| 670,957 |
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| Total current assets |
|
| 20,234,757 |
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|
|
|
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| 20,234,757 |
| |
|
|
|
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| Total oil and gas properties, net |
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| 14,162,055 |
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| (12,791,680 | )(a) |
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| 1,370,375 |
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| Fixed assets, net |
|
| 1,510,486 |
|
|
|
|
|
|
| 1,510,486 |
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| Right of use assets, net |
|
| 5,000,859 |
|
|
|
|
|
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| 5,000,859 |
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| ESG Clean Energy license, net |
|
| 4,732,747 |
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|
|
|
|
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| 4,732,747 |
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| Due from related parties |
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| 456,965 |
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|
|
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| 456,965 |
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| Other intangibles – Simson Maxwell, net |
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| 3,790,935 |
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|
|
|
|
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| 3,790,935 |
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| Other intangibles – Variable Interest Entities |
|
| 15,433,340 |
|
|
|
|
|
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| 15,433,340 |
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| Goodwill |
|
| 252,290 |
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|
|
|
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| 252,290 |
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| Deposits and other assets |
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| 10,300 |
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|
|
|
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| 10,300 |
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| TOTAL ASSETS |
| $ | 65,584,734 |
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| $ | 52,793,054 |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
| $ | 3,324,595 |
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| $ | 3,324,595 |
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| Accrued expenses and other current liabilities |
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| 879,004 |
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|
|
|
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| 879,004 |
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| Customer deposits |
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| 1,396,347 |
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| 1,396,347 |
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| Due to Camber Energy, Inc. |
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| 8,022,300 |
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|
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| 8,022,300 |
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| Undistributed revenues and royalties |
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| 3,228,070 |
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| 3,228,070 |
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| Current portion of operating lease liability |
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| 1,354,637 |
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| 1,354,637 |
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| Due to related parties |
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| 674,604 |
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| 674,604 |
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| Current portion of notes payable – related parties |
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| 74,645 |
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| 74,645 |
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| Bank indebtedness – credit facility |
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| 3,310,982 |
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| 3,310,982 |
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| Current portion of long-term debt – net of discount |
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| 4,549,393 |
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| (3,590,000 | )(a) |
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| 959,393 |
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| Total current liabilities |
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| 26,814,577 |
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| 23,224,577 |
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| Notes payable – related parties – net of current portion |
|
| 673,252 |
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|
|
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|
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| 673,252 |
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| Long term debt - net of current portion and debt discount |
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| 2,425,034 |
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| 2,425,034 |
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| Operating lease liability, net of current portion |
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| 3,786,750 |
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| 3,786,750 |
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| Contingent obligations |
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| 1,435,757 |
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| 1,435,757 |
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| Asset retirement obligation |
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| 2,193,281 |
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| (239,975 | )(a) |
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| 1,953,306 |
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| TOTAL LIABILITIES |
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| 37,328,651 |
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| 33,498,676 |
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| Commitments and contingencies |
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| - |
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| STOCKHOLDERS’ EQUITY |
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| Preferred Stock Series C, $0.001 par value, 50,000 shares authorized, 28,092 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively |
|
| 28 |
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| 28 |
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| Preferred Stock Series E, $0.001 par value, 2,075 shares authorized, 475 and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively |
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| 5 |
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| 5 |
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| Common stock, $0.001 par value, 500,000,000 shares authorized, 114,780,967 and 111,030,965 shares issued and outstanding as of June 30, 2022, and December 31, 2021, respectively. |
|
| 114,781 |
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| 114,781 |
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| Additional paid-in capital |
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| 126,909,137 |
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| 126,909,137 |
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| Accumulated other comprehensive loss |
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| (112,686 | ) |
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|
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|
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| (112,686 | ) |
| Accumulated deficit |
|
| (110,046,514 | ) |
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| (8,961,705 | )(a) |
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| (119,008,219 | ) |
| Parent’s Stockholders’ Equity in Viking |
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| 16,864,751 |
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| 7,903,046 |
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| Non-controlling interest |
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| 11,391,332 |
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|
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|
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| 11,391,332 |
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| TOTAL STOCKHOLDERS’ EQUITY |
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| 28,256,083 |
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| 19,294,378 |
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 65,584,734 |
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|
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| $ | 52,793,054 |
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| 3 |
VIKING ENERGY GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2022
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| Historical Six Months Ended June 30, 2022 |
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| Pro Forma Adjustments |
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| Pro Forma Six Months Ended June 30, 2022 |
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| Revenue |
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| Oil and gas sales |
| $ | 3,548,872 |
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| (2,070,975 | )(b) |
| $ | 1,477,897 |
|
| Power generation units and parts |
|
| 3,634,127 |
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|
|
|
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| 3,634,127 |
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| Service and repairs |
|
| 5,322,563 |
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|
|
|
|
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| 5,322,563 |
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|
|
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| 12,505,562 |
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|
|
|
|
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| 10,434,587 |
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| Operating expenses |
|
|
|
|
|
|
|
|
|
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| Cost of goods sold |
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| 5,053,599 |
|
|
|
|
|
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| 5,053,599 |
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| Lease operating costs |
|
| 1,186,168 |
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| (757,564 | )(b) |
|
| 428,604 |
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| General and administrative |
|
| 8,480,762 |
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|
|
|
|
|
| 8,480,762 |
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| Stock based compensation |
|
| 588,870 |
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|
|
|
|
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| 588,870 |
|
| Depreciation, depletion and amortization |
|
| 1,013,470 |
|
|
| (470,513 | )(b) |
|
| 542,957 |
|
| Accretion - ARO |
|
| 81,631 |
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|
| (11,076 | )(b) |
|
| 70,555 |
|
| Total operating expenses |
|
| 16,404,500 |
|
|
|
|
|
|
| 15,165,347 |
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|
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| Income (loss) from operations |
|
| (3,898,938 | ) |
|
|
|
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| (4,730,760 | ) |
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| Other income (expense) |
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| Interest expense |
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| (353,045 | ) |
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|
|
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|
| (353,045 | ) |
| Amortization of debt discount |
|
| (94,896 | ) |
|
|
|
|
|
| (94,896 | ) |
| Change in fair value of derivatives |
|
| - |
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|
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|
|
| - |
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| Loss on financing settlements |
|
| - |
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|
|
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|
|
| - |
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| Other income |
|
| 511,855 |
|
|
|
|
|
|
| 511,855 |
|
| Total other income (expense) |
|
| 63,914 |
|
|
|
|
|
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| 63,914 |
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|
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| Net loss before income taxes |
|
| (3,835,024 | ) |
|
|
|
|
|
| (4,666,846 | ) |
| Income tax benefit (expense) |
|
| - |
|
|
|
|
|
|
| - |
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| Net loss |
|
| (3,835,024 | ) |
|
|
|
|
|
| (4,666,846 | ) |
| Net loss attributable to non-controlling interest |
|
| (548,854 | ) |
|
|
|
|
|
| (548,854 | ) |
| Net loss attributable to Viking Energy Group, Inc. |
| $ | (3,286,170 | ) |
|
|
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| $ | (4,117,992 | ) |
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| Earnings (loss) per common share |
|
|
|
|
|
|
|
|
|
|
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| Basic and Diluted |
|
| (0.03 | ) |
|
|
|
|
|
| (0.04 | ) |
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and Diluted |
|
| 114,364,300 |
|
|
|
|
|
|
| 114,364,300 |
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| 4 |
VIKING ENERGY GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2021
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| Historical Year Ended December 31, 2021 |
|
| Pro Forma Adjustments |
|
| Pro Forma Year Ended December 31, 2021 |
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| Revenue |
|
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|
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| Oil and gas sales |
| $ | 33,679,679 |
|
|
| (2,767,176 | )(b) |
| $ | 30,912,503 |
|
| Power generation units and parts |
|
| 1,607,077 |
|
|
|
|
|
|
| 1,607,077 |
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| Service and repairs |
|
| 2,701,208 |
|
|
|
|
|
|
| 2,701,208 |
|
|
|
|
| 37,987,964 |
|
|
|
|
|
|
| 35,220,788 |
|
| Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
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| Cost of goods sold |
|
| 3,003,044 |
|
|
|
|
|
|
| 3,003,044 |
|
| Lease operating costs |
|
| 15,878,437 |
|
|
| (1,414,019 | )(b) |
|
| 14,464,418 |
|
| General and administrative |
|
| 8,121,519 |
|
|
|
|
|
|
| 8,121,519 |
|
| Stock based compensation |
|
| 1,738,145 |
|
|
|
|
|
|
| 1,738,145 |
|
| Depreciation, depletion and amortization |
|
| 7,307,157 |
|
|
| (1,348,660 | )(b) |
|
| 5,958,497 |
|
| Accretion - ARO |
|
| 608,691 |
|
|
| (25,243 | )(b) |
|
| 583,448 |
|
| Total operating expenses |
|
| 36,656,993 |
|
|
|
|
|
|
| 33,869,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from operations |
|
| 1,330,971 |
|
|
|
|
|
|
| 1,351,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
| (10,053,014 | ) |
|
|
|
|
|
| (10,053,014 | ) |
| Amortization of debt discount |
|
| (3,704,049 | ) |
|
|
|
|
|
| (3,704,049 | ) |
| Change in fair value of derivatives |
|
| (17,338,784 | ) |
|
|
|
|
|
| (17,338,784 | ) |
| Loss on financing settlements |
|
| (4,774,628 | ) |
|
|
|
|
|
| (4,774,628 | ) |
| Equity in earnings of unconsolidated subsidiary |
|
| (178,942 | ) |
|
|
|
|
|
| (178,942 | ) |
| Gain on disposal of membership interests |
|
| 19,457,104 |
|
|
|
|
|
|
| 19,457,104 |
|
| Interest and other income |
|
| 470,492 |
|
|
|
|
|
|
| 470,492 |
|
| Total other income (expense) |
|
| (16,121,821 | ) |
|
|
|
|
|
| (16,121,821 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss before income taxes |
|
| (14,790,850 | ) |
|
|
|
|
|
| (14,770,104 | ) |
| Income tax benefit (expense) |
|
| - |
|
|
|
|
|
|
| - |
|
| Net loss |
|
| (14,790,850 | ) |
|
|
|
|
|
| (14,770,104 | ) |
| Net loss attributable to non-controlling interest |
|
| 305,003 |
|
|
|
|
|
|
| 305,003 |
|
| Net loss attributable to Viking Energy Group, Inc. |
| $ | (14,485,847 | ) |
|
|
|
|
| $ | (15,075,107 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and Diluted |
|
| (0.18 | ) |
|
|
|
|
|
| (0.18 | ) |
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and Diluted |
|
| 82,228,404 |
|
|
|
|
|
|
| 82,228,404 |
|
| 5 |
VIKING ENERGY GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Disposition 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, 2022.
|
| a) | Reflects the elimination of assets and liabilities and resulting loss on disposition of assets sold. |
Disposition Adjustments to the Unaudited Pro Forma Condensed Consolidated Statement 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, 2022, and for the year ended December 31, 2021.
|
| b) | Represents the elimination of oil and gas production revenues and expenses for the assets sold. |
| 6 |
VIKING ENERGY GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
UNAUDITED PRO FORMA EFFECT OF THE DISPOSITION OF OIL AND GAS ASSETS
| Reserve Category |
| Historical December 31, 2021 |
|
| Pro Forma Dispositions |
|
| Pro Forma December 31, 2021 |
| |||
| Proved Reserves |
|
|
|
|
|
|
|
|
| |||
| Developed, Producing |
|
| 1,164,578 |
|
|
| (1,034,526 | ) |
|
| 130,052 |
|
| Developed, Non Producing |
|
| 414,418 |
|
|
| (350,963 | ) |
|
| 63,455 |
|
| Total Proved Reserves |
|
| 1,578,996 |
|
|
| (1,385,489 | ) |
|
| 193,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Estimated Future Net Cash Flows |
| $ | 26,837,237 |
|
| $ | (22,638,200 | ) |
| $ | 4,199,037 |
|
| 10% annual discount for estimated timing of cash flows |
|
| (11,822,285 | ) |
|
| 10,427,800 |
|
|
| (1,394,485 | ) |
| Discounted Future Net Cash Flows |
| $ | 15,014,952 |
|
| $ | (12,210,400 | ) |
| $ | 2,804,552 |
|
| 7 |