This excerpt taken from the CHK 8-K filed Nov 1, 2005.
PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following unaudited pro forma condensed combined financial statements are derived from the historical financial statements of Chesapeake Energy Corporation and Columbia Energy Resources, LLC (Columbia). The pro forma combined statements of operations for the nine months ended September 30, 2005 and for the year ended December 31, 2004 reflect the Columbia acquisition as if the acquisition occurred on January 1, 2004. The pro forma combined balance sheet at September 30, 2005 reflects the consummation of the Columbia acquisition as if it occurred on September 30, 2005. The unaudited pro forma condensed combined financial data should be read in conjunction with the notes thereto and the historical financial statements of Chesapeake and Columbia, including the notes thereto.
The unaudited pro forma condensed combined financial statements do not purport to be indicative of the results of operations that would actually have occurred if the transaction described had occurred as presented in such statements or that may occur in the future. In addition, future results may vary significantly from the results reflected in such statements due to general economic conditions, oil and gas commodity prices, Chesapeakes ability to successfully integrate the operations of Columbia with its current business and several other factors, many of which are beyond Chesapeakes control.
The Columbia acquisition will be accounted for using the purchase method of accounting. The purchase cost will be allocated to the identifiable Columbia tangible and intangible assets and liabilities based on their respective fair values, including derivatives whose valuation will be dependent upon gas prices at the time of closing. The final allocation of the actual purchase price is subject to the final valuation of the acquired assets, but that allocation is not expected to differ materially from the preliminary allocation presented in these pro forma condensed combined financial statements.