VQ » Topics » 1. Basis of Presentation

This excerpt taken from the VQ 8-K filed Feb 6, 2009.

1.              Basis of Presentation

The unaudited pro forma condensed consolidated financial statements are presented to give effect to the sale on February 2, 2009 of the Company’s principal interests in the Hastings Complex (“Hastings Sale”).

 

The pro forma condensed consolidated balance sheet as of September 30, 2008, and the pro forma condensed consolidated statement of operations for the nine months ended September 30, 2008 were derived from and should be read in conjunction with the Company’s unaudited financial statements included in the September 30, 2008, Form 10-Q, filed on November 6, 2008.  The pro forma condensed consolidated statement of operations for the year ended December 31, 2007 was derived from and should be read in conjunction with the Company’s audited financial statements included in the December 31, 2007, Form 10-K, filed on March 17, 2008.

 

-                    The unaudited pro forma condensed consolidated balance sheet reflects results as though the Hastings Sale closed on September 30, 2008.

-                    The unaudited pro forma condensed consolidated statements of operations reflect results as though the Hastings Sale closed on January 1, 2007.

 

The unaudited pro forma financial information is for informational purposes only and does not purport to present what our results would have been had these transactions actually occurred on the dates presented or to project our results of operations or financial position for any future period.

 

This excerpt taken from the VQ 10-Q filed Nov 14, 2006.

1.     BASIS OF PRESENTATION

        Description of Operations—Venoco, Inc. ("Venoco" or the "Company"), a Delaware corporation, is engaged in the business of acquiring interests in, and exploring for and developing, oil and natural gas properties with a focus offshore and onshore California and with additional operations in Texas.

        Condensed Consolidated Financial Statements—The condensed unaudited consolidated financial statements include the accounts of Venoco and its subsidiaries, all of which are wholly owned. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all material adjustments considered necessary for a fair presentation of the Company's interim results have been reflected. Venoco's Annual Report on Form 10-K for the year ended December 31, 2005 includes certain definitions and a summary of significant accounting policies and should be read in conjunction with this report. The results for interim periods are not necessarily indicative of annual results.

        Stock Split—All common share amounts in the accompanying financial statements have been adjusted for the 1,000-for-one reverse stock split effected on February 10, 2005 and a one-for-7,500 stock split approved by the board of directors of the Company on October 13, 2005 and effected on November 8, 2005.

        Earnings Per Share—Statement of Financial Accounting Standards No. 128, Earnings Per Share, requires presentation of "basic" and "diluted" earnings per share. Basic net income per common share of stock is calculated by dividing net income by the weighted average number of common shares outstanding during each period. Diluted net income per common share of stock is calculated by dividing net income by the weighted average number of common shares outstanding and other dilutive securities. The only securities considered dilutive are the Company's non-qualified stock option awards.

        The following table sets forth the calculation of basic and diluted earnings per share (in thousands except per share amounts):

 
  Three Months Ended September 30,
  Nine Months Ended September 30,
 
  2005
  2006
  2005
  2006
Net income (loss)   $ (1,833 ) $ 16,239   $ 129   $ 21,670
Adjustments to net income for dilution                
   
 
 
 
  Net income (loss) adjusted for the effect of dilution   $ (1,833 ) $ 16,239   $ 129   $ 21,670
   
 
 
 
Basic weighted average common shares outstanding     32,693     32,693     32,693     32,693
Add: dilutive effect of stock options         1,970     38     1,575
   
 
 
 
  Diluted weighted average common shares outstanding     32,693     34,663     32,731     34,268
   
 
 
 
Basic earnings per common share   $ (0.06 ) $ 0.50   $   $ 0.66
Diluted earnings per common share   $ (0.06 ) $ 0.47   $   $ 0.63

        Common Control Merger—On March 21, 2005, the Company acquired Marquez Energy, a Colorado limited liability company that was majority-owned and controlled by Tim Marquez. Because of the common ownership of Marquez Energy and the Company, this acquisition has been recorded in a manner similar to a pooling-of-interests. Common control occurred in July 2004 when Tim Marquez

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acquired an additional 53% of the Company's common stock bringing his common stock holdings to 94%. The Company's financial statements have been adjusted to give effect to the acquisition of Marquez Energy as if it had occurred in July 2004.

This excerpt taken from the VQ 10-Q filed Aug 14, 2006.

1.     BASIS OF PRESENTATION

        Description of Operations—Venoco, Inc. ("Venoco" or the "Company"), a Delaware corporation, is engaged in the business of acquiring interests in, and exploring for and developing, oil and natural gas properties with a focus offshore and onshore California and with additional operations in Texas.

        Condensed Consolidated Financial Statements—The condensed unaudited consolidated financial statements include the accounts of Venoco and its subsidiaries, all of which are wholly owned. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all material adjustments considered necessary for a fair presentation of the Company's interim results have been reflected. Venoco's 2005 Annual Report on Form 10-K includes certain definitions and a summary of significant accounting policies and should be read in conjunction with this report. The results for interim periods are not necessarily indicative of annual results.

        Stock Split—All common share amounts in the accompanying financial statements have been adjusted for the 1,000-for-one reverse stock split effected on February 10, 2005 and a one-for-7,500 stock split approved by the board of directors of the Company on October 13, 2005 and effected on November 8, 2005.

        Earnings Per Share—Statement of Financial Accounting Standards No. 128, Earnings Per Share,requires presentation of "basic" and "diluted" earnings per share. Basic net income per common share of stock is calculated by dividing net income by the weighted average number of common shares outstanding during each period. Diluted net income per common share of stock is calculated by dividing net income by the weighted average number of common shares outstanding and other dilutive securities. The only securities considered dilutive are the Company's non-qualified stock option awards.

        The following table sets forth the calculation of basic and diluted earnings per share (in thousands except per share amounts):

 
  Three Months Ended June 30,
  Six Months Ended June 30,
 
  2005
  2006
  2005
  2006
Net income (loss)   $ 8,780   $ 324     1,962   $ 5,431
Adjustments to net income for dilution                
   
 
 
 
  Net income (loss) adjusted for the effect of dilution   $ 8,780   $ 324   $ 1,962   $ 5,431
   
 
 
 
Basic weighted average common shares outstanding     32,693     32,693     32,693     32,693
Add: dilutive effect of stock options         1,477         1,329
   
 
 
 
  Diluted weighted average common shares outstanding     32,693     34,170     32,693     34,022
   
 
 
 
Basic earnings per common share   $ 0.27   $ 0.01   $ 0.06   $ 0.17
Diluted earnings per common share   $ 0.27   $ 0.01   $ 0.06   $ 0.16

        Common Control Merger—On March 21, 2005, the Company acquired Marquez Energy, a Colorado limited liability company that was majority-owned and controlled by Tim Marquez. Because of the common ownership of Marquez Energy and the Company, this acquisition has been recorded in a manner similar to a pooling-of-interests. Common control occurred in July 2004 when Tim Marquez acquired an additional 53% of the Company's common stock bringing his common stock holdings to

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94%. The Company's financial statements have been adjusted to give effect to the acquisition of Marquez Energy as if it had occurred in July 2004.

These excerpts taken from the VQ 8-K filed Jun 14, 2006.

1.     Basis of Presentation

        The accompanying unaudited pro forma statements of operations present the pro forma effects of the acquisition. The statements of operations are presented as though the acquisition had occurred on January 1, 2005. Venoco and TexCal both use the full cost method of accounting for their oil and natural gas producing activities. Venoco accounted for the acquisition using the purchase method of accounting. The purchase price was allocated to TexCal's assets and liabilities, based on their estimated fair values as of the date of the acquisition. The purchase method of accounting requires that the TexCal assets acquired and liabilities assumed by Venoco be recorded at their estimated fair values. In addition, deferred income taxes are recognized for the differences between the revised carrying amounts of TexCal's assets and liabilities and their associated tax bases.

        The calculation of the total purchase price and the preliminary allocation of this price to assets and liabilities are shown below.

 
  (in thousands)
 
Calculation of purchase price:        
  Costs paid by Venoco   $ 455,879  
  Plus: Estimated acquisition costs to be incurred     725  
   
 
    Total purchase price   $ 456,604  
   
 
Allocation of purchase price:        
  Current assets   $ 25,834  
  Oil and gas properties     458,740  
  Other property and equipment     786  
  Other non-current assets     1,018  
  Current liabilities     (22,052 )
  Asset retirement obligation     (7,722 )
   
 
    Net assets   $ 456,604  
   
 

        The purchase price allocation is preliminary and is subject to change for actual acquisition costs incurred. These changes will impact future depletion expense. For purposes of these pro forma financial statements, fair values were assessed as of the date of the acquisition and, accordingly, subsequent adjustments in historical amounts will be included in the amount allocated to oil and natural gas properties.

Basis of Presentation

        The results of operations and cash flows and related disclosures for periods prior to October 1, 2004, the effective date of the transaction in which the Company acquired its properties from the Predecessor (the "Effective Date"), are presented as the results of the Predecessor. The financial position, results of operations and cash flows and related disclosures subsequent to the Effective Date as of and for the three months ended December 31, 2004 and for the year ended December 31, 2005 are those of the Successor.

        The consolidated financial statements of the Successor as of and from Inception (October 1, 2004) to December 31, 2004 and for the year ended December 31, 2005 reflect the acquisition of TDC under the purchase method of accounting in accordance with Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations.

        The results of the Successor are not comparable to the results of the Predecessor as they are presented on a different cost basis from that for the periods before the Effective Date. Furthermore, all amounts contained within the consolidated financial statements for the year ended December 31, 2003 and the nine months ended September 30, 2004 include oil and natural gas properties located offshore in the shallow waters of the Gulf of Mexico which were not acquired by the Successor and costs related to the bankruptcy of the Predecessor.

        In accordance with GAAP, the Predecessor has applied American Institute of Certified Public Accountants' ("AICPA") Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code" ("SOP 90-7"), in preparing the Consolidated Financial Statements for the year ended December 31, 2003 and for the nine months ended September 30, 2004. SOP 90-7 requires that the financial statements, for periods subsequent to the Chapter 11 filing, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain revenues, expenses (including professional fees), realized gains and losses and provisions for losses that are realized or incurred in the bankruptcy proceedings are recorded in reorganization costs, net on the accompanying Consolidated Statements of Operations.

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TEXCAL ENERGY (LP) LLC AND SUBSIDIARIES

This excerpt taken from the VQ 10-Q filed Nov 22, 2005.

1.   BASIS OF PRESENTATION

Interim Financial StatementsThe accompanying condensed consolidated financial statements of Venoco Inc. are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company’s financial position at March 31, 2005 and the results of operations and cash flows for the three months ended March 31, 2005 and 2004. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, these financial statements should be read in conjunction with the Company’s audited 2004 financial statements contained in its Registration Statement on Form S-4/A (Registration No. 333-123711) as filed with the Securities and Exchange Commission on April 20, 2005. The results for interim periods are not necessarily indicative of annual results.

Stock Split—All common share amounts in the accompanying financial statements have been adjusted for the 1,000-for-one reverse stock split effected on February 10, 2005 and a one-for-7,500 stock split approved by the board of directors of the Company on October 13, 2005 and effected on November 8, 2005.

New Company Basis—During 2004, the Company’s CEO, Tim Marquez, increased his ownership in the Company from 41% to 100%. As a result of a transaction that closed on July 12, 2004, Mr. Marquez purchased 53% of the common shares (2,468 common shares) of the Company from two of the Company’s former officers and their respective affiliates. On December 22, 2004, the Company merged with a corporation the sole stockholder of which was a trust controlled by Mr. Marquez. This merger had the effect of giving Mr. Marquez the remaining 6% of the Company’s common stock.

As a result of Mr. Marquez obtaining control of over 95% of the common stock of the Company on December 22, 2004, SEC Staff Accounting Bulletin No. 54 requires the acquisition by Mr. Marquez to be “pushed-down”, meaning the post-transaction condensed consolidated balance sheet and the condensed consolidated statements of operations and cash flows of the Company reflect a new basis of accounting (“successor basis”). The pre-transaction condensed consolidated statements of operations and cash flows are presented on the historical basis (“predecessor basis”).

Common Control Merger—On March 21, 2005 the Company completed the acquisition of Marquez Energy, LLC, a Colorado limited liability company (“Marquez Energy”) majority-owned and controlled by Timothy Marquez, the Company’s CEO and sole shareholder. Due to the common control aspects of the transaction, the financial statements of Marquez Energy have been combined with the consolidated financial statements of the Company and its subsidiaries in a manner similar to a pooling-of-interests, since the date that common control was achieved. Therefore, the Company’s financial statements since July 12, 2004 were restated to include Marquez Energy’s financial results.

This excerpt taken from the VQ 10-Q filed May 16, 2005.

1.     BASIS OF PRESENTATION

        Interim Financial Statements—The accompanying condensed consolidated financial statements of Venoco Inc. as of and for the three months ended March 31, 2005 and 2004 are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals only) necessary to present fairly the Company's financial position at March 31, 2005 and the results of operations and cash flows for the three months ended March 31, 2005 and 2004. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, these financial statements should be read in conjunction with our audited 2004 financial statements contained in our Registration Statement on Form S-4/A (Registration No. 333-123711) as filed with the Securities and Exchange Commission on April 20, 2005. The results for interim periods are not necessarily indicative of annual results.

        New Company Basis—During 2004, the Company's CEO, Tim Marquez, increased his ownership in the Company from 41% to 100%. As a result of a transaction that closed on July 12, 2004, Mr. Marquez purchased 53% of the common shares (2,468 common shares) of the Company from two of the Company's former officers and their respective affiliates. On December 22, 2004, the Company merged with a corporation the sole stockholder of which was a trust controlled by Mr. Marquez. This merger had the effect of giving Mr. Marquez the remaining 6% of the Company's common stock.

        As a result of Mr. Marquez obtaining control of over 95% of the common stock of the Company on December 22, 2004, SEC Staff Accounting Bulletin No. 54 requires the acquisition by Mr. Marquez to be "pushed-down", meaning the post-transaction condensed consolidated balance sheet and the condensed consolidated statements of operations and cash flows of the Company reflect a new basis of accounting ("successor basis"). The pre-transaction condensed consolidated statements of operations and cash flows are presented on the historical basis ("predecessor basis").

        Common Control Merger—On March 21, 2005 the Company completed the acquisition of Marquez Energy, LLC, a Colorado limited liability company ("Marquez Energy") majority-owned and controlled by Timothy Marquez, the Company's CEO and sole shareholder. Due to the common control aspects of the transaction, the financial statements of Marquez Energy have been combined with the consolidated financial statements of the Company and its subsidiaries in a manner similar to a pooling-of-interests, since the date that common control was achieved. Therefore, the Company's financial statements since July 12, 2004 were restated to include Marquez Energy's financial results.

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