UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q /A

Amendment No. 1

~~FORM 10-Q~~

x ~~QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934~~
☒
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2020

¨ ~~TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934~~
☐
TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~__________~~_______ to ~~__________.~~_______.

Commission file number: 000-29219

VIKING ENERGY GROUP, INC.
(Formerly Viking Investments Group, Inc.)
(Exact name of registrant as specified in its charter)

Nevada

98-0199508
(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

~~1330 Avenue of the Americas,~~15915 Katy Freeway, Suite ~~23 A,~~450

~~New York, NY~~ Houston, TX 77094~~10019~~

(Address of principal executive offices)

~~(212) 653 0946~~(281) 404 4387

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Not applicable.	Note applicable.	Not applicable.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x ☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~or a~~ smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer
¨☐
Accelerated Filer
¨☐
Non-Accelerated Filer
¨☒
Smaller Reporting Company
x☒
Emerging Growth Company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ ☐ No x☒

APPLICABLE ONLY TO CORPORATE ISSUERS

As of ~~November~~August 14, ~~2017,~~2020, the registrant had ~~66,220,524~~210,656,343 shares of common stock outstanding.

EXPLANATORY NOTE

This Amendment No. 1 to the Quarterly Report on Form 10-Q (the “Amended Report”) for the quarter ended June 30, 2020, of Viking Energy Group, Inc. (the “Company”) amends the Quarterly Report on Form 10-Q that was originally filed by the Company on August 20, 2020 (the “Original Report”), to (i) clarify the Company’s current percentage ownership of one of its subsidiaries in the “Plan of Operations” section of Part I, Item 2; and (ii) clarify the Company’s current liabilities in the “Results of Continuing Operations” section of Part I, Item 2. No other changes have been made to the Original Report, and this Amended Report is presented as of the filing date of the Original Report and does not reflect events occurring after that date or modify or update disclosures in any way other than as described herein.

VIKING ENERGY GROUP, INC.

Part I – Financial Information
Item 1
Financial Statements
4
Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019
4
Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019 (unaudited)
5
Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited)
6
Consolidated Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2020 and 2019 (unaudited)
7
Notes to Consolidated Financial Statements (unaudited)
8
Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
Item 3
Quantitative and Qualitative Disclosures about Market Risk
34
Item 4
Controls and Procedures
34
Part II – Other Information

Item 1
~~Financial Statements~~
3
~~Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016~~
3
~~Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2017 and 2016 (unaudited)~~
4
~~Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 (unaudited)~~
5
~~Consolidated Statements of Changes in Stockholders’ Deficit (unaudited)~~
6
~~Notes to Consolidated Financial Statements (unaudited)~~
7
~~Item 2~~
~~Management’s Discussion and Analysis or Plan of Operation~~
23
~~Item 3~~
~~Quantitative and Qualitative Disclosures about Market Risk~~
27
~~Item 4~~
~~Controls and Procedures~~
28
~~Part II – Other Information~~
~~Item 1~~
Legal Proceedings

2835

Item 2
Unregistered Sales of Equity Securities and Use of Proceeds

2835

Item 3
Defaults Upon Senior Securities

2836

Item 4
Mine Safety Disclosures

2836

Item 5
Other Information

2836

Item 6
Exhibits

2937

PART I—FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

~~ITEM 1. FINANCIAL STATEMENTS~~

VIKING ENERGY GROUP, INC.
Consolidated Balance Sheets
~~(Amounts expressed in US dollars)~~

	September 30,			December 31,
	2017			2016			June 30, 2020			December 31, 2019
	(unaudited)			(audited)			(unaudited)
ASSETS
Current assets:
Cash	$	568,222		$	18,605		$	1,921,408		$	1,761,495
Accounts receivable – oil and gas		63,257			66,176
Other receivable – related party		76,939			76,939
Restricted cash								2,569,003			3,877,229
Accounts receivable – oil and gas - net								4,667,407			2,864,114
Prepaid expenses		6,549			87,532			53,378			168,994
Total current assets		714,967			249,252			9,211,196			8,671,832

Oil and gas properties, full cost method
Proved developed producing oil and gas properties, net		2,254,925			1,765,373			87,818,028			68,924,441
Undeveloped and non-producing oil and gas properties, net		1,166,383			1,237,489
Proved undeveloped and non-producing oil and gas properties, net								58,047,338			50,817,675
Total oil and gas properties, net		3,421,308			3,002,862			145,865,366			119,742,116

Long term investment		-			106,930
Fixed assets, net								450,352			509,934
Derivative asset		683			-			8,428,610			-
Deposits								121,196			2,821,594
TOTAL ASSETS	$	4,136,958		$	3,359,044		$	164,076,720		$	131,745,476

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable							$	1,595,600		$	3,791,894
Accrued expenses and other current liabilities	$	253,491		$	179,421			4,082,845			3,229,594
Accounts payable		115,885			121,365
Undistributed revenues and royalties								2,992,029			2,247,678
Derivative liability		606,878			1,136,894			-			5,158,822
Amount due to directors		1,056,147			1,072,576
Current portion of long term debt – net of debt discount		1,518,464			1,302,476
Amount due to director								590,555			590,555
Current portion of long-term debt and other short-term borrowings – net of debt discount								63,059,086			19,225,045
Total current liabilities		3,550,865			3,812,732			72,320,115			34,243,588
Long term debt - net of current portion and debt discount		2,568,568			1,579,469			69,609,772			84,988,117
Operating lease liability								276,034			308,279
Asset retirement obligation		1,067,232			833,017			5,294,243			3,538,637
TOTAL LIABILITIES		7,186,665			6,225,218			147,500,164			123,078,621

Commitments and contingencies (Note 7)
Commitments and contingencies (Note 8)

STOCKHOLDERS’ DEFICIT
Capital Stock
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 28,092 shares issued and outstanding as of September 30, 2017 and December 31, 2016		28			28
Common stock, $0.001 par value, 100,000,000 shares authorized, 66,220,524 and 53,093,192 shares issued, issuable and outstanding as of September 30, 2017 and December 31, 2016 respectively.		66,221			53,093
Additional Paid-In Capital		14,011,458			11,526,847
Prepaid equity-based compensation		(50,072	)		(35,068	)
Accumulated other comprehensive loss		-			(1,446	)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 28,092 shares issued and outstanding as of June 30, 2020 and December 31, 2019								28			28
Common stock, $0.001 par value, 500,000,000 shares authorized, 160,072,118 and 124,198,309 shares issued and outstanding as of June 30, 2020 and December 31, 2019 respectively.								160,072			124,198
Additional paid-in capital								44,123,010			38,825,392
Accumulated deficit		(17,077,342	)		(14,409,628	)		(27,551,915	)		(30,282,763	)
TOTAL STOCKHOLDERS’ DEFICIT		(3,049,707	)		(2,866,174	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	4,136,958		$	3,359,044
Equity attributable to Viking Energy Group, Inc.								16,731,195			8,666,855
Noncontrolling interest								(154,639	)		-
TOTAL STOCKHOLDERS’ EQUITY								16,576,556			8,666,855
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY							$	164,076,720		$	131,745,476

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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VIKING ENERGY GROUP, INC.
Consolidated Statements of Operations ~~and Comprehensive Loss~~
(Unaudited)
~~(Amounts expressed in US dollars)~~

	Three months ended,						Nine months ended,						Three months ended						Six months ended
	September 30,						September 30,						June 30,						June 30,
	2017			2016			2017			2016			2020			2019			2020			2019

Revenue
Oil and gas sales	$	221,329		$	105,427		$	588,622		$	232,013		$	9,549,863		$	8,734,323		$	21,337,815		$	18,080,915

Operating expenses
Lease operating costs		172,893			66,456			437,477			165,773			4,396,789			2,857,278			8,155,992			5,456,672
General and administrative		180,400			186,508			666,323			439,604			917,190			1,257,959			2,201,837			2,291,304
Stock based compensation		153,155			172,219			1,304,175			578,363			197,632			2,500			451,382			42,082
Depreciation, depletion andamortization														2,921,208			2,228,191			6,098,410			4,598,879
Accretion - ARO		10,526			5,234			29,167			15,513			115,658			75,681			241,278			158,227
Depreciation, depletion and amortization		59,711			29,009			146,602			77,625
Total operating expenses		576,685			459,426			2,583,744			1,276,878			8,548,477			6,421,609			17,148,899			12,547,164

Loss from operations		(355,356	)		(353,999	)		(1,995,122	)		(1,044,865	)
Income from operations														1,001,386			2,312,714			4,188,916			5,533,751

Other income (expense)
Interest expense		(470,614	)		(542,107	)		(1,160,875	)		(1,966,015	)		(6,909,555	)		(3,192,574	)		(11,493,115	)		(6,323,967	)
Amortization of debt discount														(1,542,074	)		(2,304,291	)		(2,777,604	)		(4,583,250	)
Change in fair value of derivatives		40,370			2,765,013			495,468			833,418			(9,292,013	)		4,474,016			13,587,431			(5,271,567	)
Loss on sale of investments		-			-			(7,185	)		-
Gain on settlement of debt		-			-			-			75,000
Loss on financing settlements														(931,894	)		-			(931,894	)
Interest and other income														1,200			2,481			2,475			5,898
Total other income (expense)		(430,244	)		2,222,906			(672,592	)		(1,057,597	)		(18,674,336	)		(1,020,368	)		(1,612,707	)		(16,172,886	)

Net income (loss) before income taxes		(785,600	)		1,868,907			(2,667,714	)		(2,102,462	)		(17,672,950	)		1,292,346			2,576,209			(10,639,135	)
Income tax provision		-			(635,428	)		-			-
Benefit from utilization of net operating loss		-			635,428			-			-

Income tax benefit (expense)														-			-			-			-
Net income (loss)	$	(785,600	)	$	1,868,907		$	(2,667,714	)	$	(2,102,462	)		(17,672,950	)		1,292,346			2,576,209			(10,639,135	)

Other comprehensive income (loss)
Unrealized gain (loss) on securities available-for-sale		-			(3,394	)		1,446			148,663

Net Comprehensive income (loss)	$	(785,600	)	$	1,865,513		$	(2,666,268	)	$	(1,953,798	)
Net (income) loss attributable to noncontrolling interest														1,111,808			-			154,639			-
Net income (loss) attributable to Viking Energy Group, Inc.													$	(16,561,142	)	$	1,292,346		$	2,730,848		$	(10,639,135
Earnings (loss) per common share
Basic	$	(0.01	)	$	0.04		$	(0.04	)	$	(0.05	)
Diluted	$	(0.01	)	$	0.04		$	(0.04	)	$	(0.05	)
Weighted average number of common shares outstanding
Basic		64,051,015			45,837,636			60,723,535			43,584,699
Diluted		64,051,015			54,004,303			60,723,535			43,584,699
Basic and Diluted													$	(0.13	)	$	0.01		$	0.02		$	(0.12	)
Weighted average number of common shares outstanding
Basic and Diluted														133,722,276			91,192,033			129,521,255			91,147,958

The accompanying notes are an integral part of these unaudited consolidated financial statements.

45
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VIKING ENERGY GROUP, INC.
Consolidated Statements of Cash Flows
(Unaudited)
~~(Amounts expressed in US dollars)~~

Nine Months Ended

September 30,

2017

2016

Cash flows from operating activities:

Net loss

$ (2,667,714 )

$ (2,102,462 )
Adjustments to reconcile net loss to cash used in operating activities:

Derivative gain

(495,468 )

(833,418 )
Amortization of prepaid expenses

180,983

-

Stock based compensation

1,304,175

578,363

Stock based interest payment

52,500

Loss on sale of investments

7,185

-

Depreciation, depletion and amortization

146,602

77,625

Accretion – Asset retirement obligation

29,167

15,513

Amortization of debt discount

817,431

1,626,062

Changes in operating assets and liabilities

Accounts receivable

2,919

(11,947 )
Accounts payable

(5,480 )

(89,282 )
Accrued expenses and other current liabilities

90,975

151,862

Amounts due to directors

121,755

197,280

Net cash used in operating activities

(467,470 )

(337,904 )

Cash flows from investing activities:

Purchase of oil and gas properties

(360,000 )

(1,350,000 )
Proceeds from sale of investments

101,191

-

Net cash used in investing activities

(258,809 )

(1,350,000 )

Cash flows from financing activities:

Proceeds from amount due to directors

5,350

-

Repayment of amount due to directors

(348,438 )

(56,056 )
Proceeds from sale of common stock

331,667

388,125

Common stock issuance costs

-

(37,500 )
Proceeds from long term debt

3,288,650

2,021,875

Debt issuance costs

(216,000 )

-

Repayment of long term debt

(1,785,333 )

(570,500 )
Net cash provided by financing activities

1,275,896

1,745,944

Net increase in cash

549,617

58,040

Cash, beginning of period

18,605

30,585

Cash, end of period

$ 568,222

$ 88,625

Supplemental Cash Flow Information:

Cash paid for:

Interest

$ 209,307

$ 125,431

Income taxes

$ -

$ -

Supplemental disclosure of Non-Cash Investing and Financing Activities:

Conversion of convertible note payable

$ -

$ 6,778

Issuance of shares for oil and gas property acquisition

$ -

$ 820,250

Issuance of warrants for 4,062,500 common shares as debt discount

$ -

$ 416,315

Loan from director to pay convertible debt

$ -

$ 100,000

Issuance of shares as deposit for oil and gas property acquisition

$ -

$ 288,000

Prepayment of contract through amounts due directors

$ 100,000

$ -

Long term debt paid through amounts due directors

$ 104,904

$ -

Issuance of shares for contract services

$ 700,920

$ -

Sale of shares through satisfaction of unrelated notes payable

$ 127,215

$ -

Accrued expenses exchanged for long term debt

$ 9,500

$ -

Increase in oil and gas properties due to asset retirement obligation

$ 205,048

$ -

Issuance of shares and warrants as discount on debt

$ 684,411

$ -

	Six Months Ended
	June 30,
	2020			2019

Cash flows from operating activities:
Net income (loss)	$	2,576,209		$	(10,639,135	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Change in fair value of derivative liability		(13,587,431	)		5,271,567
Stock based compensation		451,382			42,082
Depreciation, depletion and amortization		6,098,410			4,598,879
Amortization of operational right-of-use assets		1,192			2,228
Accretion – Asset retirement obligation		241,278			158,227
Amortization of debt discount		2,777,604			4,583,250
Loss on financing settlement		931,894
Stock based interest expense		2,178,356
Changes in operating assets and liabilities
Accounts receivable		(1,803,293	)		(2,362,672	)
Prepaid expenses and other assets		66,014			33,874
Accounts payable		(2,196,294	)		(1,607,849	)
Accrued expenses and other current liabilities		1,688,127			1,727,325
Undistributed revenues and royalties		744,351			100,416
Net cash provided by operating activities		167,799			1,908,192

Cash flows from investing activities:
Investment in and acquisition of oil and gas properties		(1,184,830	)		(3,319,812	)
Proceeds from sale of oil and gas interests		-			287,966
Net cash used in investing activities		(1,184,830	)		(3,031,846	)

Cash flows from financing activities:
Proceeds from long term debt		8,641,421			2,734,143
Proceeds from amount due to director		-			195,000
Proceeds from exercise of warrants		38,000			-
Short term advance		-			693,706
Repayment of long-term debt		(8,810,703	)		(1,464,566	)
Net cash provided by (used in) financing activities		(131,282	)		2,158,283

Net increase (decrease) in cash		(1,148,313	)		1,034,629
Cash and Restricted Cash, beginning of period		5,638,724			4,009,892

Cash and Restricted Cash, end of period	$	4,490,411		$	5,044,521
Supplemental Cash Flow Information:
Cash paid for:
Interest	$	7,613,188		$	4,383,027
Income taxes	$	-		$	-

Supplemental disclosure of Non-Cash Investing and Financing Activities:
Recognition of asset retirement obligation	$	1,514,328		$	94,796
Recognition of right-of-use asset and lease liability	$	-		$	367,365
Amortization of right-of-use asset and lease liability	$	15,751		$	28,738
Purchase of transportation equipment through direct financing	$	-		$	56760
Proceeds from sale of oil and gas properties paid directly to reduce debt	$	-		$	3,800,000
Elimination of asset retirement obligation associated with sale of assets	$	-		$	797,796
Issuance of warrant shares as reduction of debt	$	15,000		$	-
Issuance of shares as discount on debt	$	718,860		$	-
Private placement debt exchanged for new private placement debt	$	2,160,150		$	-
Purchase of working interest through new debt	$	29,496,356		$	-
Accrued interest rolled into new private placement	$	103,583		$	-
Issuance of shares as reduction of debt and accrued expenses	$	4,110,250		$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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VIKING ENERGY GROUP, INC.
Consolidated Statements of Changes in Stockholders’ ~~Deficit~~
Equity (Unaudited)
~~(Amounts expressed in US dollars)~~

For the six months ended June 30, 2020

											Retained
	Preferred Stock				Common Stock				Additional		Earnings						Total
	Number		Amount		Number		Amount		Paid-in Capital		(Accumulated Deficit)			Noncontrolling Interest			Stockholders' Equity


Balances at December 31, 2019		28,092	$	28		124,198,309	$	124,198	$	38,825,392	$	(30,282,763	)	$	-		$	8,666,855

Shares issued for services						3,235,255		3,235		448,147								451,382
Warrant exercise						416,250		416		37,584								38,000
Warrants exercised to reduce debt						150,000		150		14,850								15,000
Shares issued as debt discount						5,921,018		5,921		712,939								718,860
Shares issued as payment on debt						26,151,286		26,152		4,084,098								4,110,250
Net income (loss)												2,730,848			(154,639	)		2,576,209

Balances at June 30, 2020		28,092	$	28		160,072,118	$	160,072	$	44,123,010	$	(27,551,915	)	$	(154,639	)	$	16,576,556

Accumulated

Additional

Prepaid

Other

Total

Common Stock

Shares to be Issued

Preferred Stock

Paid-in

Equity-Based

Comprehensive

Accumulated

Stockholders'

Number

Amount

Number

Amount

Number

Amount

Capital

Compensation

Loss

Deficit

Deficit

Balances at December 31, 2015

30,333,993

$ 30,334

-

$ -

28,092

$ 28

$ 7,960,372

$ (145,562 )

$ (158,424 )

$ (8,964,441 )

$ (1,277,693 )
Shares issued in satisfaction of debt

300,926

301

9,810

10,111

Derivative liability adjustments - satisfaction of convertible debt

685,668

685,668

Shares issued for consulting services

1,315,000

1,315

164,185

165,500

Shares issued in acquisition of oil and gas properties

14,862,021

14,862

1,430,829

1,445,691

Shares issued as prepaid equity-based compensation

5,000,000

5,000

795,000

(800,000 )

-

Cancellation of shares issued as prepaid equity-based compensation

(4,000,000 )

(4,000 )

(636,000 )

640,000

-

Sale of stock

2,841,667

2,842

423,408

426,250

Capital issuance costs

(37,500 )

(37,500 )
Shares issued as payment for interest expense

1,931,250

1,931

324,444

326,375

Shares issued as additional discount on debt

508,335

508

75,742

76,250

Warrants issued for services

330,889

330,889

Amortization of prepaid equity-based compensation

270,494

270,494

Unrealized gain (loss) on securities held for sale

156,978

156,978

Net loss for the year ended December 31, 2016

(5,445,187 )

(5,445,187 )
Balances at December 31, 2016

53,093,192

$ 53,093

-

$ -

28,092

$ 28

$ 11,526,847

$ (35,068 )

$ (1,446 )

$ (14,409,628 )

$ (2,866,174 )
Shares issued for consulting services

2,892,889

2,894

478,739

481,633

Shares issued as prepaid equity-based compensation

4,135,000

4,135

833,411

(837,546 )

-

Sale of stock

3,059,442

3,059

455,858

458,917

Derivative liability adjustments - satisfaction of convertible debt

35,232

35,232

Amortization of prepaid equity-based compensation

822,542

822,542

Unrealized gain (loss) on securities held for sale

1,446

1,446

Shares and warrants issued as discount on new debt

3,040,000

3,040

681,371

684,411

Net loss for the nine months ended September 30, 2017

(2,667,714 )

(2,667,714 )
Balances at September 30, 2017

66,220,523

$ 66,221

-

$ -

28,092

$ 28

$ 14,011,458

$ (50,072 )

$ -

$ (17,077,342 )

$ (3,049,707 )

For the six months ended June 30, 2019

											Retained
	Preferred Stock				Common Stock				Additional		Earnings					Total
	Number		Amount		Number		Amount		Paid-in Capital		(Accumulated Deficit)			Noncontrolling Interest		Stockholders' Equity

Balances at December 31, 2018		28,092	$	28		90,989,025	$	90,989	$	32,015,913	$	(10,891,913	)	$	-	$	21,215,017

Shares issued for services						210,929		211		41,871							42,082
Net loss												(10,639,135	)				(10,639,135	)

Balances at June 30, 2019		28,092	$	28		91,199,954	$	91,200	$	32,057,784	$	(21,531,048	)	$	-	$	10,617,964

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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VIKING ENERGY GROUP, INC.
Notes to Consolidated Financial Statements
(Unaudited)
~~(Amounts expressed in US dollars)~~

Note 11.Nature of Business and Going Concern

Viking Energy Group, Inc. (“Viking” or the “Company”) was incorporated under the laws of the State of Florida on May 3, 1989, as Sparta Ventures Corp. and remained inactive until June 27, 1998. After several name changes, the Company merged with and into a wholly-owned subsidiary, SinoCubate, Inc., which remained the surviving entity of the merger. SinoCubate, Inc. was formed in the State of Nevada on September 11, 2008. The merger resulted in a change of name of the Company from Synthenol Inc. to SinoCubate, Inc., and a change in the state of incorporation of the Company from Florida to Nevada. On June 13, 2012, the Company changed its name to Viking Investments Group, Inc., and the Company’s ticker symbol was changed to “VKIN.” On March 17, 2017, the Company changed its name to Viking Energy Group, Inc.

~~The Company's business plan~~ is ~~to engage~~engaged in the acquisition, exploration, development and production of oil and natural gas properties, both individually and through collaborative partnerships with other companies in this field of endeavor. ~~On March 8, 2016,~~Since the beginning of 2019 the Company ~~incorporated a wholly owned subsidiary, Viking Oil & Gas (Canada) ULC, in Alberta, Canada, to hold its Canadian oil and gas interests. In November of 2014,~~has had the ~~Company entered into its first contract relative to oil and gas activities involving jointly controlled assets and~~following related liabilities by purchasing an undivided 50% interest in the Joffre project located in Alberta, Canada. On February 23, 2016, the Company closed on the acquisition of working interests in four leases with access to the mineral rights (oil and gas) concerning approximately 281 acres of property in Miami and Franklin Counties in eastern Kansas. On August 30, 2016, the Company created an additional wholly owned subsidiary, Mid-Con Petroleum, LLC (“Mid-Con”), in the State of Kansas to hold its current acquisitions in the central United States. On October 4, 2016, the Company, through Mid-Con, completed an acquisition whereby the Company (i) increased its working interest in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas, and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property. On August 25, 2017, the Company created an additional wholly owned subsidiary, Mid-Con Drilling, LLC. (“Mid-Con Drilling”), in the State of Kansas to hold additional acquisitions in the central United States. On September 11, 2017, the Company through Mid-Con Drilling, completed an acquisition of a 90% working interest in four new oil and gas leases in Anderson County in Eastern Kansas, comprising approximately 980 acres of property.activities:

	·	On May 1, 2019, the Company’s subsidiary, Mid-Con Development, LLC sold all of its interests in the oil and gas assets Mid-Con Development, LLC owned in Ellis and Rooks Counties, Kansas, consisting of working interests in approximately 41 oil leases comprising several thousand acres.
	·	On May 10, 2019, Petrodome Louisiana Pipeline LLC ("Petrodome LA"), a subsidiary of the Company’s subsidiary, Petrodome Energy, LLC, acquired a majority working interest in 6 gas wells (including 2 producing gas wells), 1 producing oil well and 1 salt water disposal well located in the East Mud Lake Field in Cameron Parish, Louisiana, with leases to mineral rights (oil and gas) concerning approximately 765 acres.
	·	On February 3, 2020, Elysium Energy, LLC (“Elysium”), a wholly-owned subsidiary of Viking’s majority-owned subsidiary, Elysium Energy Holdings, LLC (“Elysium Holdings”), acquired interests in certain oil and gas properties located in Texas and Louisiana. The assets purchased included leases, working interests, and over-riding royalty interests in oil and gas properties in Texas (approximately 72 wells) and Louisiana (approximately 55 wells), along with associated equipment. On February 4, 2020, Elysium hedged 75% of the estimated oil and gas production associated with the newly acquired assets for 2020, 60% of the estimated production for 2021 and 50% of the estimated production for the period between January 2022 to July 2022. Theses hedges have a floor of $45 and a ceiling ranging from $52.70 to $56 for oil, and a floor of $2 and a ceiling of $2.425 for natural gas

These accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company ~~had~~generated net income of $2,576,209 for the six months ended June 30, 2020 as compared to a net ~~comprehensive~~ loss of ~~$2,666,268, and $1,953,798~~$10,639,135 for the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, respectively. The~~2019. As of June 30, 2020, the Company has ~~accumulated~~ a ~~stockholders’ deficit~~working capital deficiency in excess of ~~$3,049,707~~$62,000,000. The largest components of current liabilities creating this deficiency are (a) notes payable with a face value aggregating approximately $6.5 million as of ~~September~~June 30, ~~2017.~~ 2020, due in August and December of 2020, (b) a revolving credit facility with a balance of $7,090,000 as of June 30, 2020, due in May of 2021, (c) a note payable of approximately $15.5 million as of June 30, 2020, due in June of 2021, (d) a term loan agreement of approximately $31.7 million as of June 30, 2020, and (e) other debtor obligations requiring principal payments of approximately $2 million in 2020.

Management has evaluated these conditions and has developed a plan which, in part, address these obligations as follows:

	·	The acquisition of Petrodome Energy LLC in 2017 and the oil and gas expertise retained by Petrodome at the end of 2017 provided an internal lease operating company to efficiently evaluate development opportunities.

	·	The Ichor Energy Acquisition at the end of 2018 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a work over program to increase this purchased production beyond its current average daily production of 2,000 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, and distributions to Viking of $65,000 per month for general and administrative expenses, and a quarterly tax distribution at the current statutory rates if applicable. On a quarterly basis after appropriate distributions to the Company, any cash in excess of $2,000,000 plus unfunded approved development projects is swept by the term loan lender as an additional principal payment on the debt.

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	·	The Company has a revolving credit facility with CrossFirst Bank, which was approved for $30,000,000. The balance outstanding at June 30, 2020 is approximately $7,090,000 with a maturity date of May 10, 2021. Additional funds could be made available from this facility for projects reviewed and approved by the lender.

	·	The Elysium Energy Acquisition on February 3, 2020 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a development program to increase this purchased production beyond its current average daily production of 2,700 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, certain oil and gas development projects approved by the lender, and a cost allocation for general and administrative expenses of $150,000 per month. Additionally, to the extent that Elysium has excess cash flow (as specified in the term loan agreement), the Company is required to make mandatory prepayments of the term loan, without penalty or premium, equal to seventy-five percent (75%) of such Excess Cash Flow.

	·	With respect to the approximately $11.1 million at June 30, 2020 in face value of convertible notes due in August of 2020 and as discussed in Note 9, various holders have subsequently (i) exchanged approximately $2.2 million of such notes to for new convertible notes, that were then converted into shares of the Company’s stock, (ii) exchanged approximately $2.4 million of such notes into new convertible notes with a maturity of February 2022, and (iii) extended the due dates of approximately $6.3 million of such notes to December 31, 2020.

Additionally, recent oil and gas price volatility as a result of geopolitical conditions and the global COVID-19 pandemic have already had, and are expected to continue to have a negative impact on the Company’s financial position and results of operations. Negative impacts include but are not limited to: the Company’s ability to sell our oil and gas production, reduction in the selling price of the Company’s oil and gas, failure of a counterparty to make required hedge payments, disruption of production as a result of worker illness or mandated production shutdowns, impairment of our oil and gas properties, the Company’s ability to maintain compliance with or renegotiate loan covenants and/or refinance existing indebtedness, and access to new capital and financing.

These conditions raise substantial doubt ~~about~~regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to utilize the resources in place to generate future profitable operations, ~~and/~~to maintain compliance with or renegotiate its loan covenants, to develop additional acquisition opportunities, and to obtain the necessary financing to meet its obligations and repay its liabilities arising from ~~normal~~ business operations when they come due. Management ~~has no formal plan in place~~believes the Company will be able to ~~address this concern but considers that the Company~~continue to develop new opportunities, and will be able to obtain additional funds bythrough debt and / or equity ~~financing and/or related party advances;~~financings to facilitate its development strategy; however, there is no assurance of additional funding being available. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

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Note 22.Summary of Significant Accounting Policies

a) Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America ~~(“GAAP”~~("U.S. GAAP") and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in Viking’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. ~~Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.~~

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b) Basis of Consolidation

The financial statements presented herein reflect the consolidated financial results of the Company, ~~and~~ its wholly owned subsidiaries, ~~Viking Oil & Gas (Canada) ULC, a Canadian corporation formed on March 8, 2016, to provide a base of operations for properties in Canada,~~ Mid-Con Petroleum, LLC, ~~formed on August 30, 2016, and~~ Mid-Con Drilling, LLC, and Mid-Con Development, LLC, which were all formed ~~on August 25, 2017, both~~ to provide a base of operations for properties in the Central United ~~States.~~States, and Petrodome Energy, LLC, Ichor Holdings, LLC, Ichor Energy, LLC, Ichor Energy (TX), LLC, and Ichor Energy (LA), LLC., and its majority owned (75%) subsidiary, Elysium Energy Holdings, LLC, and its wholly owned subsidiaries, Elysium Energy, LLC, Elysium Energy TX, LLC, Elysium Energy LA, LLC, Pointe A La Hache, L.L.C., Potash, L.L.C., Ramos Field, L.L.C., and Turtle Bayou, L.L.C., all based in Houston, Texas which provides a base of operations to facilitate property acquisitions in Texas, Louisiana and Mississippi. The noncontrolling interest (30%) of Elysium Energy Holdings, LLC and its subsidiaries is separately stated in stockholders’ equity in the consolidated balance sheet and the net income attributable to the noncontrolling interest is stated separately in the consolidated statement of operations. All significant intercompany transactions and balances have been ~~eliminated upon consolidation.~~eliminated.

c) Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. ~~The Company's actual results could vary materially from management's estimates and assumptions.~~ Significant areas requiring the use of management estimates relate to impairment of long-lived assets, fair value of commodity derivatives, stock-based compensation, asset retirement obligations, and the determination of expected tax rates for future income tax ~~recoveries, stock-based compensation, embedded derivative liabilities, asset retirement obligations and impairment of long-lived assets.~~recoveries.

The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks.

Actual results could differ from the estimates and assumptions utilized.

d) Financial Instruments

~~ASC~~Accounting Standards Codification, “ASC” Topic 820-10, “Fair Value Measurement” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 820-10, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value ~~measures.~~measurement. The carrying amounts reported in the consolidated balance sheets for ~~other receivable – related party,~~deposits, accrued expenses and other current liabilities, accounts payable, derivative liabilities, amount due to ~~directors,~~director, and convertible notes each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

~~Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.~~

Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

~~Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement.~~

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Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Assets and liabilities measured at fair value as of ~~September~~June 30, ~~2017~~2020 are classified below based on the three fair value hierarchy described above:

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)

Financial Assets
Long term investment	$	-	$	-	$	-	$	1,446
Commodity Derivative		-		683		-		61,744		-		8,426,610		-		13,587,431
	$	-	$	683	$	-	$	69,190	$	-	$	8,426,610	$	-	$	13,587,431

Financial liabilities										-		-		-		-
Derivative liabilities	$	-	$	-	$	606,878	$	433,724
	$	-	$	-	$	606,878	$	433,724
Commodity Derivative									$	-	$	-	$	-	$	-

Assets and liabilities measured at fair value as of December 31, ~~2016~~2019 are classified below based on the three fair value hierarchy described above:

Description

Quoted Prices in Active Markets for Identical Assets
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)

Total Gains
(Losses)

Financial Assets

Long term investment

$ 106,930

$ -

$ -

$ 156,978

$ 106,930

$ -

$ -

$ 156,978

Financial liabilities

Derivative liabilities

$ -

$ -

$ 1,075,833

$ 265,448

Commodity Derivative

-

61,061

-

(61,061 )

$ -

$ 61,061

$ 1,075,833

$ 204,387

The Company’s long-term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment that has been recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 for the nine months ended September 30, 2017, and $148,663 for the nine months ended September 30, 2016.

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Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)

Financial Assets		-		-		-		-
Commodity Derivative	$	-	$	-	$	-	$	-

Financial liabilities
Commodity Derivative		-		5,158,822		-		(3,308,880	)
	$	-	$	5,158,822	$	-	$	(3,308,880	)

The Company ~~had~~has entered into certain commodity ~~financial derivatives~~derivative instruments containing swaps and collars, which management believes are effective in ~~place at September 30, 2017.~~mitigating commodity price risk associated with a portion of its future monthly natural gas and crude oil production and related cash flows. The Company does not designate its commodities derivative instruments as hedges and therefore does not apply hedge accounting. Changes in fair value of derivative instruments subsequent to the initial measurement are recorded as change in fair value on derivative liability, in other income (expense). The estimated fair value amounts of the Company’s commodity derivative instruments have been determined at discrete points in time based on relevant market information which resulted in the Company classifying such derivatives as Level 2. Although the Company’s commodity derivative instruments are valued using public indices, as well as the Black-Sholes model, the instruments themselves are traded with unrelated counterparties and are not openly traded on an exchange.

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In a commodities swap agreement, the Company trades the fluctuating market prices of oil or natural gas at specific delivery points over a specified period, for fixed prices. As a producer of oil and natural gas, the Company holds these commodity derivatives to protect the operating revenues and cash flows related to a portion of its future natural gas and crude oil sales from the risk of significant declines in commodity prices, which helps reduce exposure to price risk and improves the likelihood of funding its capital budget. If the price of a commodity rises above what the Company has agreed to receive in the swap agreement, the amount that it agreed to pay the counterparty is expected to be offset by the increased amount it received for its production.

The Company ~~uses~~has also entered into collar agreements related to oil and gas production with established floors and ceilings. Upon settlement, if the ~~Black-Scholes model~~current market price of the commodity is below the floor, the Company receives the difference. Conversely, if the current market price of the commodity is above the ceiling at settlement, the Company pays the excess over the ceiling price.

Although the Company is exposed to ~~value~~credit risk to the extent of nonperformance by the counterparties to these derivative contracts, the Company does not anticipate such nonperformance and monitors the credit worthiness of its derivative liabilities. This model takes into account inputs such as contract terms, including maturity and market parameters, including assumptions associated with interest rates, volatility and credit worthiness. counterparties on an ongoing basis.

The derivative assets were $8,428,610 and ~~liabilities of the Company were $683 and $606,878 respectively~~$0 as of ~~September~~June 30, ~~2017,~~2020 and December 31, 2019 respectively, and the derivative liabilities were $0 and ~~$1,075,833 respectively~~$5,158,822 as of June 30, 2020 and December 31, ~~2016,~~2019 and 2018 respectively. The change in the fair value of the derivative assets and liabilities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 consisted of an increase of ~~$61,744~~$12,756,834 associated with commodity derivatives ~~a decrease in derivative liabilities~~existing at the beginning of ~~$433,724 associated with warrants~~2020 and ~~the conversion features~~an increase of ~~convertible debt, and a reduction of $35,232~~$830,598 associated with the ~~satisfaction~~new commodity derivative related to Elysium’s acquisition on February 3, 2020.

The table below is a summary of ~~certain convertible debt and a gain recognized in~~ the ~~statement~~Company’s commodity derivatives as of ~~operations and comprehensive gain in the amount of $495,468.~~June 30, 2020:

Natural Gas	Period	Average MMBTU per Month		Fixed Price per MMBTU

Swap	Dec-18 to Dec-22		118,936		$2.715
Collar	Mar 20 / Aug 22		196,078	$2.00 / $2.43

Crude Oil	Period	Average BBL per Month		Price per BBL

Swap	Dec-18 to Dec- 22		24,600		$50.85
Swap	Jan-20 to Jun-20		1,400		$52.71
Collar	Dec-17 to Jun-20		4,000	$55.00 / $72.00
Collar	Feb 20 to Dec 20		16,278	$45.00 / $54.20
Collar	Jan 21 to Dec 21		10,135	$45.00 / $56.00
Collar	Jan 22 to July 22		6,934	$45.00 / $52.70

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e) Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and highly liquid investment securities that have original maturities of three months or less. At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company ~~does not have any~~has cash deposits ~~in Company accounts~~ in excess of FDIC insured ~~limits. At September 30, 2017,~~limits in the ~~Company had $82,500~~amounts of $3,675,254 and $4,163,360 respectively.

Restricted cash ~~held in escrow awaiting disbursement instructions from the estate of the noteholder of a secured promissory note~~ in the amount of ~~$75,000 plus interest,~~$2,569,003 as of June 30, 2020 consists of $2,081,144 held by Ichor Energy, LLC and/or its subsidiaries and ~~$465,985~~$487,859 held Elysium Energy, LLC and/or its subsidiaries.

Pursuant to the Term Loan Credit Agreement to which Ichor Energy LLC and its subsidiaries are parties, following March 31, 2019 the company is required at all times to maintain a minimum cash balance of $2,000,000 (the “MLR”). Within 30 days of the end of each quarter, commencing with the quarter ended June 30, 2019, the company is required to pay the lenders, as an additional principal payment on the debt, any cash in ~~escrow,~~excess of (i) the MLR and (ii) any funds necessary for the capital expenditures contemplated to be expended in the next six month period by an approved plan of development (“APOD Capex Amount”). At June 30, 2020, the restricted cash did not exceed the MLR and the APOD Capex Amount.

Pursuant to the Term Loan Credit Agreement to which ~~funds were utilized by~~Elysium Energy, LLC and its subsidiaries are parties, the ~~Company~~companies receipts are to ~~facilitate~~be deposited to a lockbox account under the ~~oil~~control of the administrative agent, and ~~gas property acquisition~~then subsequently transferred for operations to the company’s bank accounts, all of which are subject to deposit account control agreements. Commencing with the quarter ended September 30, 2020, the company is required to make mandatory prepayments of principal equal to 75% of Excess Cash Flow as defined in ~~October 2017.~~the agreement.

f) Accounts receivable

Accounts receivable consist of oil and gas receivables. ~~The Company has classified these as short-term assets in the balance sheet because the Company expects repayment or recovery within the next 12 months.~~ The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. The Company ~~deems all accounts receivable to be collectable, and~~ has ~~not~~ recorded ~~any~~an allowance for doubtful ~~accounts.~~accounts of $217,057 at June 30, 2020 and December 31, 2019 respectively.

g) ~~Prepaid equity based compensation~~

Prepaid equity-based expenses represent amounts paid in advance through the issuance of restricted shares of stock, for future contractual benefits to be received. These expenses paid in advance are recorded as prepaid equity-based compensation as a component of “Stockholders’ Deficit” and then amortized to the statements of operations and comprehensive loss over the life of the contract using the straight-line method. At September 30, 2017 and December 31, 2016, the balances of the prepaid equity-based compensation were comprised of the following:

September 30,
2017

December 31,
2016

In March 2016, three one-year consulting agreements with three unrelated parties for services related to the petroleum industry for a combined total amount of $800,000.

-

35,068

In February 2017, a one-year consulting agreement for services related to investor relations, market exposure and content development for a total amount of $44,160.

17,543

-

In April 2017, a one-year consulting agreement comprised of four quarterly incremental installments for services related to analysis of potential oil and gas acquisitions, for an initial quarterly amount of $40,250. In July 2017, the second quarterly installment was made in the amount of $28,000.

5,478

-

In June 2017, a six-month consulting agreement for services related to investor relations and social media for a total amount of $65,136.

27,051

-

$ 50,072

$ 35,068

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h) Oil and Gas Properties

The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized. General and administrative costs related to production and general overhead are expensed as incurred.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit of production method using estimates of proved reserves. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in operations. Unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is included in loss from ~~continuing~~ operations before income taxes and the adjusted carrying amount of the unproved properties is amortized on the unit-of-production method.

Depreciation, depletion and amortization expense utilizing the unit-of-production method for the Company’s oil and gas properties for the three and nine months ended September 30, 2017 and 2016 were as follows:

Oil and Gas Properties by Geographical Cost Center

Three months ended

Nine months ended,

September 30,

September 30,

Cost Center

2017

2016

2017

2016

Canada

$ 21,073

6,860

$ 38,301

$ 12,272

United States

38,638

22,149

108,301

65,353

$ 59,711

$ 29,009

$ 146,602

$ 77,625

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i)h) Limitation on Capitalized Costs

Under the full-cost method of accounting, ~~the Company is~~we are required, at the end of each reporting date, to perform a test to determine the limit on the book value of our oil and natural gas properties (the “Ceiling” test). If the capitalized costs of ~~its~~our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess or impairment is charged to expense. The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of:

(a) the present value, discounted at 10 percent, and assuming continuation of existing economic conditions, of 1) estimated future gross revenues from proved reserves, which is computed using oil and natural gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to SAB 103, less 2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, plus

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(b) the cost of properties not being amortized; plus

(d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties.

j)i) Oil and Gas Reserves

Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices.

~~k) Loss~~j) Income (loss) per Share

Basic net ~~loss~~income (loss) per share is computed by dividing the net ~~loss~~income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net ~~loss~~income (loss) per share is computed by dividing the net ~~loss~~income (loss) by the weighted-average number of common shares outstanding and adjusted by any effects of warrants and options outstanding ~~if dilutive, that may add to the number of common shares~~ during the ~~period. At September~~period, if dilutive. For the three and six months ended June 30, ~~2017 and 2016,~~2020 there were ~~10,145,834 and 12,229,167~~approximately 125,890,784 common stock equivalents ~~respectively,~~ that were ~~anti-dilutive and~~omitted from the calculation of diluted income per share as they were not ~~included in the calculation.~~dilutive

l)k) Revenue Recognition

All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectability is reasonably assured. Revenue is derived from the saleSales of crude oil, ~~and~~ natural ~~gas. Revenue from crude oil~~gas, and natural gas ~~sales~~liquids (NGLs) are included in revenue when production is ~~recognized when~~sold to a customer in fulfillment of performance obligations under the ~~product is delivered to the purchaser and collectability is reasonably assured. The Company follows the “sales method”~~terms of ~~accounting for~~agreed contracts. Performance obligations primarily comprise delivery of oil, ~~and natural~~ gas, ~~revenue, so it recognizes revenue on all~~or NGLs at a delivery point, as negotiated within each contract. Each barrel of oil, million BTU (MMBtu) of natural gas, or ~~crude oil sold~~other unit of measure is separately identifiable and represents a distinct performance obligation to ~~purchasers.~~which the transaction price is allocated. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the hydrocarbons, the transfer of significant risks and rewards, the Company’s right to payment, and transfer of legal title. In each case, the time between delivery and when payments are due is not significant.

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~~m) Comprehensive Loss~~

The following table disaggregates the Company’s revenue by source for the three and six months ended June 30, 2020 and 2019:

FASB ASC 220 “Comprehensive Income,” establishes standards for the reporting and presentation of comprehensive income and its components in the consolidated financial statements. For the nine months ended September 30, 2017 and 2016, comprehensive income (loss) was $1,446 and $148,663 respectively, and consisted primarily of unrealized gains and (losses) on available for sale securities.

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019

Oil	$	7,539,991	$	7,194,400	$	17,065,755	$	14,926,562
Natural gas and natural gas liquids		2,009,872		1,539,923		4,272,060		3,154,353

	$	9,549,863	$	8,734,323	$	21,337,815	$	18,080,915

n)l) Income Taxes

The Company accounts for income taxes under ~~FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25,~~the asset and liability method, which requires the recognition of deferred tax assets and liabilities ~~are recognized~~ for the expected future tax consequences ~~attributable to differences between the financial statement carrying amounts~~ of ~~existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income~~events that have been included in the ~~years in which those temporary differences are expected to be recovered or settled.~~consolidated financial statements. Under ~~ASC 740-10-25,~~this method, the ~~effect on~~Company determines deferred tax assets and liabilities on the basis of ~~a change in~~the differences between the consolidated financial statements and the tax basis of assets and liabilities by using estimated tax rates ~~is recognized~~for the year in ~~income in~~which the ~~period that includes the enactment date.~~ differences are expected to reverse.

The Company ~~provides a valuation allowance for~~recognizes deferred tax assets and liabilities to the extent that we believe that these assets and/or liabilities are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. If we determine that the Company would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

In assessing the realizability of its deferred tax assets, management evaluated whether it is more likely than not that some portion, or all of its deferred tax assets, will be realized. The realization of its deferred tax assets relates directly to the Company’s ability to generate taxable income. The valuation allowance is then adjusted accordingly.

The Company has estimated net operating loss carryforwards in excess of $20,000,000 at June 30, 2020. The potential benefit of these net operating losses has not been recognized in these financial statements because the Company cannot be assured it is more likely than not that it will utilize the net operating losses carried forward in future years. In December 2017, tax legislation was enacted limiting the deduction for net operating losses from taxable years beginning after December 31, 2017 to 80% of current year taxable income and eliminating net operating loss carrybacks for losses arising in taxable years ending after December 31, 2017.On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act was enacted which itmodified the prior legislation to allow 100% of the net operating losses arising in tax years 2018, 2019, and 2020 to be carried back five years. The Company does not ~~consider realization of such assets likely. The Company did not incur any material impact~~have taxable income available in the carryback period. Net operating losses originating in taxable years beginning prior to ~~its financial condition or results of operations due to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company is~~January 1, 2018 are still subject to ~~U.S federal jurisdiction income tax examinations for the tax years 2007~~former carryover rules. The net operating loss carryforwards generated prior to this date of approximately $11,000,000, will expire between 2020 through ~~2016. In addition, the Company is subject to state and local income tax examinations for the tax years 2007 through 2016.~~2038.

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o)m) Stock-Based Compensation

The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing ~~costs. In accordance with guidance in ASC Topic 718, the~~costs.The cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period.

The fair value of stock options and warrants ~~was~~is determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instrument. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends.

The following table represents stock warrant activity as of and for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2020:

Number of
Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual Life

Aggregate
Intrinsic
Value

Warrants Outstanding – December 31, 2016

5,720,834

0.19

3.6 years

-

Granted

1,475,000

0.30

-

-

Exercised

-

-

-

-

Forfeited/expired/cancelled

-

-

-

Warrants Outstanding – September 30, 2017

7,195,834

$ 0.21

3.8 years

$ -

Outstanding Exercisable – December 31, 2016

5,720,834

$ 0.19

3.6 years

$ -

Outstanding Exercisable – September 30, 2017

7,195,834

$ 0.21

3.8 years

$ -

~~p) Long-term Investment~~

Management determines the appropriate classification of investment securities at the time of purchase. Securities are classified held-to-maturity when the Company has both the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Securities that are bought and held principally for the purpose of selling in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Securities not classified as held-to-maturity or trading are classified as available-for-sale. Available-for-sale securities are stated at fair value, the changes in the market value of available-for-sale securities, excluding other-than-temporary impairments, are reflected in Other Comprehensive Income, with the impairment losses, net of income taxes, charged to net income in the period in which it occurs.

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Warrants Outstanding – December 31, 2019		44,629,939		0.26	6.0 years			-
Granted		-		-		-		-
Exercised		675,000		-		-		-
Forfeited/expired/cancelled		-				-		-

Warrants Outstanding – June 30, 2020		43,954,939	$	0.25	5.2 years		$	-

Outstanding Exercisable – June 30, 2020		43,954,939	$	0.25	5.2 years		$	-

The ~~fair value~~Company issued 566,250 common shares from the exercise of ~~securities is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. A decline in~~675,000 warrants during the ~~market value of any available-for-sale or held-for-maturity security below cost that is deemed to be other-then-temporary results in a reduction in carrying amount to fair value.~~six months ended June 30, 2020.

Impairments that are considered other-than-temporary are recognized as a loss in the consolidated statements of operations and comprehensive loss. The Company considers various factors in reviewing impairments, including the length of time and extent to which fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the investments for a period of time sufficient to allow for any anticipated recovery in market value.

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~~As of September 30, 2017, and December 31, 2016, the Company had no trading and held-to-maturity securities.~~

The Company’s long-term investment consisted of 1,437,500 common shares of Tanager Energy Inc., as of December 31, 2016, which is traded on the TSX Venture Exchange (Toronto Stock Exchange). During the three months ended March 31, 2017, the Company sold these shares. The change in the fair value of this investment, recognized as an unrealized gain in other comprehensive income on the statement of operations and comprehensive loss was $1,446 and 148,663 for the nine months ended September 30, 2017 and 2016, respectively.

q)n) Impairment of long-lived assets

~~In accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", the~~The Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

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Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset's expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There is no impairment of long-lived assets during the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016.~~2019.

~~r) Foreign Currency Exchange~~

An entity's functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management's judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the parent company is the U.S. Dollar. The reporting currency of the Company is the U.S. Dollar. The Company has oil and gas operations in Alberta, Canada in which the Canadian Dollar (“CAD” or “CS” herein) is the primary economic environment. The reporting currency of these consolidated financial statements is the U.S. Dollar.

For financial reporting purposes, the operational results of the Company's oil and gas operations in Canada are prepared using the CAD, and are translated into the Company's reporting currency, the U.S. Dollar. Revenue and expenses applicable to the oil and gas operations in Alberta, Canada are translated using average rates prevailing during each reporting period. Gains or losses resulting from the settlement of foreign currency transactions are recorded as a separate component of accumulated other comprehensive loss in stockholders' deficit when realized. There have been no settlement transactions that resulted in the recognition of a foreign currency exchange gain or loss during the nine months ended September 30, 2017 and 2016.

~~s) Convertible Notes Payable~~

The Company accounts for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free standing derivative financial instruments.

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The Company has evaluated the terms and conditions of its convertible notes under the guidance of ASC 815. The conversion feature did not meet the definition of “indexed to a company’s own stock” provided for in ASC 815 due to the down round protection feature. Therefore, the conversion feature requires bifurcation and liability classification. Additionally, the default put requires bifurcation because it is indexed to risks that are not associated with credit or interest risk. As a result, the compound embedded derivative comprises of (i) the embedded conversion feature and (i) the default put. Rather than bifurcating and recording the compound embedded derivative as a derivative liability, the Company elected to initially and subsequently measure the convertible note in its entirety at fair value, with changes in fair value recognized in earnings in accordance with ASC 815-15-25-4.

~~t) Derivative Liability~~

We review the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.

u)o) Accounting for Asset Retirement Obligations

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties.

The following table describes the changes in the Company’s asset retirement obligations for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 and the year ended December 31, 2016:~~2020:

	Nine months ended September 30, 2017		Year ended December 31, 2016		Six months ended June 30, 2020

Asset retirement obligation – beginning	$	833,017	$	416,246	$	3,538,637
Oil and gas purchases		205,048		393,808		1,514,328
Accretion expense		29,167		22,963		241,278

Asset retirement obligation - ending	$	1,067,232	$	833,017
Asset retirement obligation – ending					$	5,294,243

~~v) Recent Accounting Pronouncements~~p) Undistributed Revenues and Royalties

~~During~~The Company records a liability for cash collected from oil and gas sales that have not been distributed. The amounts get distributed in accordance with the ~~nine months ended September 30, 2017, there were several new accounting pronouncements issued by~~working interests of the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

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respective owners.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. It is effective for annual and interim reporting periods beginning after December 15, 2017. This standard permits early adoption and permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the potential impact of this standard on our financial position and results of operations, as well as our selected transition method. Based on our preliminary assessment, we believe the new standard will not have a material impact on our financial position and results of operations, as we do not expect to change the manner or timing of recognizing revenue on a majority of our revenue transactions.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019, and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently evaluating the timing of adoption and the potential impact of this standard on our financial position, but we do not expect it to have a material impact on our results of operations.

w)q) Subsequent events

The Company has evaluated all subsequent events from ~~September~~June 30, ~~2017,~~2020 through the date of filing this ~~report, and determined there are no additional items to disclose other than those disclosed in Note 8 below.~~report.

~~Note 3.~~ ~~Related Party Transactions~~

During April 2015, the Company made an advance to Tanager Energy Inc., in conjunction with a joint investment in the second oil well of the Joffre Project. As of September 30, 2017, the balance owed by Tanager to the Company is $153,877. The Company has determined to reserve 50% of the balance and has reduced the amount shown as other receivable – related party to $76,939 on the consolidated balance sheet.

On May 16, 2017, Tom Simeo, formerly the Company’s Executive Chairman and a Director, resigned from all positions with the Company. During the nine months ended September 30, 2017, Tom Simeo did not accrue payroll and made no advances to the Company. The Company paid a total of $20,643 against prior advances. Concurrent with his resignation, Mr. Simeo waived any remaining balance of prior advances previously payable to him. As of September 30, 2017, there are no remaining balances payable to Mr. Simeo.

During the nine months ended September 30, 2017, the Company’s CEO and Director, James Doris incurred expenses on behalf of, and made advances to the Company in the amount of $159,614 in order to provide the Company with funds to carry on its operations, and the Company made repayments of $336,794. These advances do not bear interest, are unsecured and have no specific terms of repayment. As of September 30, 2017, the amount due for advances and expenses paid on behalf of the Company is $193,757. The Company has not imputed interest as the amount is deemed immaterial. Additionally, during the nine months ended September 30, 2017, Mr. Doris made several loans to the Company totaling $196,855, all accruing interest at 12%, and payable on demand. As of September 30, 2017, the total amount due to Mr. Doris for advances and expenses paid on behalf of the Company and loans is $1,056,147. Accrued interest of $149,120 is included in accrued expenses and other current liabilities at September 30, 2017.

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Note 3.Business Acquisition

As discussed in Note 1, on February 3, 2020, the Company, through its subsidiary Elysium Energy, LLC (“Elysium Energy”) completed an acquisition of working interests in certain oil and gas leases in Texas and Louisiana.The aggregate consideration transferred for the working interests of $29,496,356 substantially consisted of (i) the net proceeds from the Company’s borrowings on February 3, 2020 with various lenders represented by 405 Woodbine, LLC and Camber Energy, Inc, less (ii) the net effect of the resolution of February 3, 2020 on all amounts outstanding under the Company’s December 2018 promissory note with RPM Investments in exchange for a new note with EMC Capital Partners, LLC (including the pay-down of such new note as a result of the post-closing adjustments). See Note 7 to the consolidated financial statements for further information on all of these borrowings. The aggregate consideration has been provisionally allocated to the fair value of assets and liabilities as follows:

Provisional Fair Value of Assets and Liabilities

Oil and Gas Properties	$	31,010,684
Asset retirement obligations assumed		(1,514,328	)

	$	29,496,356

Proforma unaudited condensed selected financial data for the three and six months ended June 30, 2019 as though the Elysium Energy Acquisition had taken place at January 1, 2019 are as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019

Revenues	$	15,613,974	$	28,200,088

Net loss	$	3,742,608	$	(8,865,491	)

Net loss per share	$	0.04	$	(0.10	)

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~~Note 4.~~ ~~Oil and Gas Properties~~

Note 4.Oil and Gas Properties

The following table summarizes the Company’s oil and gas activities by classification and geographical cost center for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2020:

	December 31, 2019			Adjustments			Impairments		June 30, 2020

Proved developed producing oil and gas properties
United States cost center	$	76,532,985		$	22,826,768		$	-	$	99,359,753
Accumulated depreciation, depletion and amortization		(7,608,544	)		(3,933,181	)		-		(11,541,725	)
Proved developed producing oil and gas properties, net	$	68,924,441		$	18,893,587		$	-	$	87,818,028

Undeveloped and non-producing oil and gas properties
United States cost center	$	56,168,428		$	9,362,913		$	-	$	65,531,341
Accumulated depreciation, depletion and amortization		(5,350,753	)		(2,133,250	)		-		(7,484,003	)
Undeveloped and non-producing oil and gas properties, net	$	50,817,675		$	7,229,663		$	-	$	58,047,338

Total Oil and Gas Properties, Net	$	119,742,116		$	26,123,250		$	-	$	145,865,366

December 31,
2016

Additions

Impairments

September 30,
2017

Proved developed producing oil and gas properties

Canada cost center

$ 34,733

$ -

$ -

$ 34,733

United States cost center

1,787,840

565,048

-

2,352,888

Accumulated depreciation, depletion and amortization

(57,200 )

(75,496 )

-

(132,696 )
Proved developed producing oil and gas properties, net

$ 1,765,373

$ 489,552

$ -

$ 2,254,925

Undeveloped and non-producing oil and gas properties

Canada cost center

$ 371,481

$ -

$ -

$ 371,481

United States cost center

917,184

-

-

917,184

Accumulated depreciation, depletion and amortization

(51,176 )

(71,106 )

-

(122,282 )
Undeveloped and non-producing oil and gas properties, net

$ 1,237,489

$ (71,106 )

$ -

$ 1,166,383

Total Oil and Gas Properties, Net

$ 3,002,862

$ 418,446

$ -

$ 3,421,308

Note 5.Related Party Transactions

The ~~following table summarizes the~~ Company’s ~~oil and gas activities by classification for the year ended December 31, 2016:~~

December 31,
2015

Additions

Impairments

December 31,
2016

Proved developed producing oil and gas properties

Canada cost center

$ 33,082

$ 1,651

$ -

$ 34,733

United States cost center

-

2,838,943

(1,051,103 )

1,787,840

Accumulated depreciation, depletion and amortization

(2,093 )

(55,107 )

-

(57,200 )
Proved developed producing oil and gas properties, net

$ 30,989

$ 2,785,487

$ (1,051,103 )

$ 1,765,373

Undeveloped and non-producing oil and gas properties

Canada cost center

$ 518,269

$ (1,652 )

$ (145,136 )

$ 371,481

United States cost center

-

1,456,414

(539,230 )

917,184

Accumulated depreciation, depletion and amortization

(32,788 )

(43,464 )

25,076

(51,176 )
Undeveloped and non-producing oil and gas properties, net

$ 485,481

$ 1,411,298

$ (659,290 )

$ 1,237,489

Total Oil and Gas Properties, Net

$ 516,470

$ 2,092,625

$ (1,710,393 )

$ 3,002,862

On February 23, 2016, with an effective date of February 1, 2016, the Company closed on the acquisition of working interests in four leases with access to the mineral rights (oil and gas) concerning approximately 281 acres of property in Miami and Franklin Counties in eastern Kansas. This project produces oil from the Cherokee formation at a depth of approximately 600 feet. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by the Company.

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~~As consideration for this transaction, the Company paid $1,350,000 plus 4,650,000 shares of common stock valued at $.085 per share, or $395,250.~~

The Company also purchased a 100% working interest (Net Revenue Interest of 83%) in certain Non-Producing Leases as follows: (i) three leases with access to the mineral rights (oil and gas) concerning approximately 270 acres of property in Miami and Franklin Counties in eastern Kansas; and (ii) 31 leases with access to the mineral rights (oil and gas) concerning approximately 5,500 acres of property in Cass and Bates Counties in Missouri. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by Viking. As consideration for this transaction, Viking agreed to issue the vendors 5,000,000 shares of common stock valued at $.085 per share or $425,000.

To facilitate these acquisitions, the Company borrowed $1,625,000 from private lenders pursuant to a 15% Senior Secured Convertible Promissory Note (the "Note"), arranged through a licensed broker/dealer, with the primary terms of the loan being as follows: (i) ~~Term~~ ~~– 6 months; (ii)~~ ~~Rate~~ ~~– 15% per annum; (iii)~~ ~~Security~~ ~~– 1~~^st ~~ranking charge against company assets pursuant to a Security and Pledge Agreement (the "Security Agreement"); (iv)~~ ~~Conversion~~ ~~– the lenders have a right to convert all or part of the note into common stock of Viking at a price of $0.15 per share, subject to certain ownership restrictions; and (v)~~ ~~Warrants~~ – the lenders were given an option to purchase, within the next 5 years, 4,062,500 shares of common stock of Viking at an exercise price of $0.20 per share pursuant to a Common Stock Purchase Warrant. Viking's CEO and director, James Doris, ~~also personally guaranteed repayment~~has incurred expenses on behalf of, and made advances to, the ~~loan~~Company in order to provide the Company with funds to carry on its operations. Additionally, Mr. Doris has made several loans through promissory notes to the Company, all accruing interest at 12%, and ~~granted~~payable on demand. As of June 30, 2020, the ~~lenders a security~~total amount due to Mr. Doris for these loans is $590,555. Accrued interest of $37,841 is included in ~~his assets.~~accrued expenses and other current liabilities at June 30, 2020.

~~On October 4, 2016,~~The Company’s CFO, Frank W. Barker, Jr., renders professional services to the Company through ~~Mid-Con Petroleum, LLC, completed~~FWB Consulting, Inc., an ~~acquisition whereby~~affiliate of Mr. Barker’s. As of June 30, 2020, the ~~Company (i) increased its working interest~~total amount due to FWB Consulting, Inc. is $174,468 and is included in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas, and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property.accounts payable.

As ~~consideration for this transaction,~~of June 30, 2020, Troy Caruso and various entities affiliated with Mr. Caruso owned in aggregate more than 10% of the Company’s outstanding common stock. Mr. Caruso and his affiliates have provided funding under certain of the Company’s private placements, and consulting services. During the three months ended June 30, 2020, the Company ~~paid $920,857 plus 5,212,021~~repaid all short-term borrowings due to Mr. Caruso and certain of his affiliated entities which were advanced between September 30, 2019 and February 7, 2020, which included the issuance of 17,954,565 common shares at a fair value of ~~common stock valued at $625,442.~~$2,748,504. As of June 30, 2020, Mr. Caruso and affiliated entities hold $550,000 of the Company’s convertible debt offering which commenced on February 18, 2020 and is included in long term debt.

On September 11, 2017, the Company through Mid-Con Drilling, LLC, completed an acquisition of a 90% working interest in four new oil and gas leases in Anderson County in Eastern Kansas, comprising approximately 980 acres of property. To facilitate this acquisition, the Company executed a Promissory Note ~~dated September 8, 2017, through its wholly owned subsidiary, Mid-Con Drilling, LLC, in the amount of $256,982. The acquisition price for this acquisition was $360,000.~~6.Equity

~~Note 5.~~ ~~Capital Stock and Additional Paid-in Capital~~

~~(a)~~
(a) Preferred Stock

The Company is authorized to issue 5,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”), of which 50,000 have been designated as Series C Preferred Stock (the “Series C Preferred Stock”).

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~~Each~~ Pursuant to the amended Certification of Designation of the Series C Preferred Stock filed on June 17, 2020, each share of Series C Preferred Stock entitles the holder thereof to ~~two thousand (2,000)~~37,500 votes on all matters submitted to athe vote of the stockholders of the Company. In the event the Company shall at any time on or after the date that Preferred Stock has been issued declare or pay any dividend on common stock payable in shares of common stock, or effect a subdivision or combination or consolidation of the outstanding shares of common stock (by reclassification or otherwise than by payment of a dividend in shares of common stock) into a greater or lesser number of shares of common stock, then in each such case the number of votes per share to which holders of shares of Series C Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction of the numerator of which is the number of shares of common stock outstanding immediately after such event and the denominator of which is the number of shares of common stock that were outstanding immediately prior to such event.

Each share of Series C Preferred Stock ~~shall be~~is convertible, at the option of the holder, at any time after the date of issuance of such share, at the office of the Company or any transfer agent for such stock, into one share of fully paid and non-assessable common stock.

~~(b)~~
~~Common Stock~~

~~The Company is authorized to issue 100,000,000 shares of common stock, par value $0.001 per share.~~

~~On January 12, 2016, the Company issued 300,926 common shares for convertible debt in the amount of $10,111.~~

~~On March 16, 2016, the Company issued 1,000,000 common shares for services, valued at $102,500.~~

~~On February 1, 2016, the Company authorized the issuance of 9,650,000 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.~~

On March 21, 2016, the Company executed a one-year advisory services agreement requiring the issuance of 1,000,000 common shares for the contract. The shares are to be issued as 375,002 upon execution of the contract, with 56,818 shares being issued at the beginning of each month for the remaining eleven months.

~~As of April 29, 2016, the Company, pursuant to a securities purchase agreement, sold 1,250,000 shares of its common stock at $0.15 per share.~~

~~On August 18, 2016, the Company authorized the issuance of 156,250 common shares pursuant to an extension agreement on certain convertible notes that had become due.~~

On September 28, 2016, the Company issued 2,400,000 common shares, at the current market value of $288,000 as part of the consideration for the acquisition of the Oil and Gas Properties acquired on October 4, 2016.

During September 2016, the Company negotiated the payment of certain convertible notes, and committed to the issuance of 375,000 common shares at the current market value of $52,500 as additional interest.

~~As of September 30, 2016, the Company, pursuant to a securities purchase agreement, sold $1,337,500 shares of its common stock at $0.15 per share.~~

~~On October 4, 2016, the Company authorized the issuance of 2,752,021 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.~~

~~On October 4, 2016, the Company issued 60,000 common shares as part of the consideration for the acquisition of the Oil and Gas properties made at that time.~~

~~On October 21, 2016, the Company issued 1,400,000 common shares valued at $252,000 pursuant to an extension agreement on certain convertible notes that had become due.~~

~~On October 21, 2016, the Company sold 187,500 common shares, pursuant to a securities purchase agreement, at $0.15 per share.~~

~~During November 2016, the Company authorized the issuance of 508,335 common shares as additional discount on debt previously issued, and an amendment extending the due date of the debt.~~

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(b) Common Stock

On ~~December 30, 2016,~~November 5, 2018, the Company ~~sold 66,667~~amended its Articles of Incorporation to increase the number of shares of common ~~shares pursuant~~stock the Company is authorized to ~~a securities purchase agreement, at $0.15 per share.~~issue from 100,000,000 to 500,000,000.

~~As of December 31, 2016,~~During the six months ended June 30, 2020, the Company ~~pursuant to a securities purchase agreement, sold $1,337,500~~issued shares of its common stock ~~at $0.15 per share.~~as follows:

	·	3,235,255 shares of common stock issued for services valued at fair value on the date of the transactions, totaling $451,382.
	·	566,250 shares of common stock pursuant to the exercise of 675,000 warrants.
	·	5,921,018 shares of common stock issued as discount on debt valued at fair value on the date of the transaction totaling $718,860.
	·	26,151,286 shares of common stock issued in settlement of debt and short term borrowings, valued at fair value on the date of the transaction totaling $4,110,250, and resulting in a loss on financing settlements of $931,894.

During the six months ended June 30, 2019, the Company issued shares of its common stock as follows:

210,929 shares of common stock issued for services valued at fair value on the date of the transaction totaling $42,082.

As described in Note 7 to the consolidated financial statements, on February 3, 2020 and June 26, 2020, Viking borrowed $5.0 million and $4.2 million respectively from Camber Energy, Inc. As additional consideration for each loan, Viking assigned Camber 25% and 5% (respectively) of ~~December 31, 2016,~~ the ~~Company authorized~~membership interests in Elysium Holdings, LLC. At the ~~issuance~~time of ~~315,000 common shares for services.~~assignments, the fair value of each such interest was zero.

~~During January 2017,~~The following schedule discloses the ~~Company issued 62,500 common shares~~effects of changes in the Company’s ownership interest in its subsidiaries on the Company’s equity for ~~services.~~the six months ended June 30, 2020:

~~On January 9, 2017, the Company issued 3,000,000 common shares upon the execution of a six-month services contract.~~

Noncontrolling interest - December 31, 2019	$	-

Transfers to the noncontrolling interest
Recognition of noncontrolling interest at fair value		-

Net loss attributable to noncontrolling interest		154,639

Change from net income attributable to Viking Energy Group, Inc. and transfers to from noncontrolling interest	$	154,639

~~On January 25, 2017, the Company sold 333,333 common shares, pursuant to a securities purchase agreement, at $0.15 per share.~~

~~On February 16, 2017, the Company sold 666,666 common shares pursuant to a securities purchase agreement at $0.15 per share.~~

~~On March 23, 2017, the Company sold 2,059,443 common shares pursuant to a securities purchase agreement at $0.15 per share.~~

~~On April 1, 2017, the Company issued 77,777 common shares as compensation for an extended maturity date on debt.~~

~~On April 18, 2017, the Company issued 250,000 common shares pursuant to a one-year consulting agreement.~~

~~On May 3, 2017, the Company issued 1,000,000 common shares for services.~~

~~On May 3, 2017, the Company issued 59,625 common shares for services.~~

~~On May 4, 2017, the Company issued 340,292 common shares for services.~~

~~On May 4, 2017, the Company issued 21,750 common shares for services.~~

~~On May 12, 2017, the Company issued 1,000,000 common shares for services~~

~~On June 15, 2017, the Company issued 395,000 common shares upon the execution of a six-month consulting agreement.~~

~~On July 18, 2017, the Company issued 250,000 common shares as a second quarterly payment a consulting agreement executed in April of 2017.~~

~~On August 4, 2017, the Company issued 154,688 common shares for services.~~

~~During July and August of 2017, pursuant to a private placement, the Company issued 590,000 common shares concurrently with raising $1,475,000.~~

~~During August and September of 2017, pursuant to a separate private placement, the Company issued 1,837,500 common shares concurrently with raising $1,225,000.~~

~~On August 30, 2017, the Company issued 176,258 common shares for services~~

~~On September 30, 2017, the Company issued 612,500 common shares for services.~~

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Note 6.7. Long Term Debt and Other Short-term Borrowings

Long term debt and other short-term borrowings consisted of the following at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016:~~ 2019:

September 30,
2017

December 31,
2016

On February 19, 2016, the Company issued a total of $1,625,000 15% convertible notes with a term expiring August 18, 2016 (the “Maturity Date”). The principal amounts of each note and interest is payable on the maturity date. Placement fees of $145,000 were subtracted from proceeds. The notes are convertible into common stock at any time, at the holder’s option, the conversion price shall be the lowest of (i) $0.15, (ii) 58% of the price of the Company’s securities that are sold in any offering of the Company’s securities in excess of $100,000, of (iii) the conversion price of any Equity converted on or prior to the Conversion Date.

-

125,000

On April 29, 2016, the Company issued a total of $375,000 of 10% Secured Subordinated promissory notes with a term expiring January 12, 2017 (the “Maturity Date”), and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the Maturity Date. The balance shown is net of unamortized discount of $8,824 at December 31, 2016.

-

366,176

On July 27, 2016, the Company issued a promissory note in the amount of $20,000, bearing interest at 12%, with an initial maturity date of August 27, 2016, and a provision for an extension of six additional terms of 30 days.

-

20,000

As of December 31, 2016, the Company issued a total of $630,000 of 10% Secured promissory notes with a term expiring April 3, 2017 (the “Maturity Date”), and an original issue discount of thirty-seven and one-half percent (37.5%). The discount was modified to fifty percent (50%) retroactively with an extension of the maturity to June 2017. During the quarter ended March 31, 2017, the Company issued an additional $917,833 of 10% Secured promissory notes with terms expiring in June, August and September of 2017, and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the various maturity dates. The balance shown is net of unamortized discount of $0 and $208,064 at September 30, 2017 and December 31, 2016 respectively. At September 30, 2017, the funds necessary to satisfy this obligation are being held in escrow awaiting disbursement instructions from the estate of the noteholder.

75,000

421,936

On October 4, 2016, the Company issued a non-interest-bearing note, payable on demand in the amount of $203,000. This amount has been paid in full as of November 1, 2017.

203,000

203,000

On October 4, 2016, the Company closed on a revolver loan with Crossfirst Bank in the amount of $1,800,000, payable at $15,000 per month, interest at 10%, with all unpaid principal and accrued interest payable on September 30, 2018. The balance shown is net of unamortized discount of $13,826 and $24,167 at September 30, 2017 and December 31, 2016 respectively.

1,621,174

1,745,833

During July and August of 2017, the Company borrowed $1,475,000 from private lenders pursuant to a 10% Secured Convertible Promissory Note with a twelve-month maturity. The balance shown is net of unamortized discount of $400,710 and $0 at September 30, 2017 and December 31, 2016 respectively.

1,074,290

-

During August and September of 2017, the Company borrowed $1,225,000 from private lenders pursuant to a 10% Secured Promissory Note with all principal and accrued interest payable on the maturity date of October 31, 2018. The balance shown is net of unamortized discount of $368,415 and $0 at September 30, 2017 and December 31, 2016 respectively.

856,585

-

On September 8, 2017, the Company closed on a Promissory Note with Cornerstone Bank in the amount of $256,983, payable interest only for the first twelve months commencing October 8, 2017, variable interest rate, currently at 5.5%, followed by 83 monthly payments of $3,765, interest at 6%, final payment due on September 8, 2025.

256,983

-

4,087,032

2,881,945

Less current portion

(1,518,464 )

(1,302,476 )

$ 2,568,568

$ 1,579,469

	June 30, 2020		December 31, 2019

Long-term debt:

During June through December of 2018, the Company borrowed $9,459,750 from private lenders, and exchanged $5,514,000 of amounts due lenders from prior borrowings as well as $191,250 in accrued interest, pursuant to a 10% Secured Promissory Note with 50% of the principal convertible into the Company’s common stock at $0.20 per share, all principal and accrued interest payable on the maturity date of August 31, 2020 (“the 2018 Convertible Notes”). The notes are secured by the Company’s membership interests in its subsidiaries, Petrodome Energy, LLC, Mid-Con Petroleum, LLC, Mid-Con Drilling, LLC, and Mid-Con Development, LLC. The balance shown is net of unamortized discount of $530,051 at June 30, 2020 and $2,086,008 at December 31, 2019. A majority of these lenders are also Viking shareholders.		10,544,164		11,163,357

On June 13, 2018, the Company borrowed $12,400,000 pursuant to a revolving line of credit facility with a maximum principal amount of $30,000,000 from Crossfirst Bank, bearing interest 1.5% above a base rate equal to the prime rate of interest published by the Wall Street Journal, interest only for June and July of 2018, at which time Principal is payable at $100,000 monthly through the maturity date of May 10, 2021, at which time all remaining unpaid principal and accrued interest shall be due. The loan is secured by a mortgage on all of the oil and gas leases of Petrodome Energy, LLC and its subsidiaries, a security agreement covering all of Petrodome Energy, LLC’s assets and a guaranty by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $0 at June 30, 2020 and $34,411 at December 31, 2019		7,090,000		7,655,589

On December 28, 2018, to facilitate the acquisition of certain oil and gas assets, the Company, through its subsidiary, Ichor Energy LLC, entered into a Term Loan Credit Agreement with various lenders represented by ABC Funding, LLC as administrative agent. The agreement provided for a total loan amount of $63,592,000, bearing interest at a rate per annum equal to the greater of (i) a floating rate of interest equal to 10% plus LIBOR, and (ii) a fixed rate of interest equal to 12%, payable monthly on the last day of each calendar month, commencing January 31, 2019. Principal payments are made quarterly at 1.25% of the initial loan amount, commencing on the last business day of the fiscal quarter ending June 30, 2019. On June 3, 2020, the Term Loan Credit Agreement was amended to reduce the permitted Asset Coverage Ratio for the fiscal quarters ending March 31, 2020, June 30, 2020 and September 30, 2020 from 1.35:1.00 to 1.15:1.00.Additionally, the First Amendment revises the interest rate under the Term Loan for the period from May 16, 2020 a per annum interest rate (i) if, as of the last day of the immediately preceding fiscal quarter, the Asset Coverage Ratio is less than 1.50:1.00, then the interest rate is the greater of (x) a floating rate of interest equal to 11.00% plus LIBOR, and (y) a fixed rate of interest equal to 13.00%, or (ii) if, as of the last day of the immediately preceding fiscal quarter, the Asset Coverage Ratio is greater than or equal to 1.50:1.00, then the interest rate is the greater of (x) a floating rate of interest equal to 10.50% plus LIBOR and (y) a fixed rate of interest equal to 12.50%.Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the Term Loan, approximately $12,000,000 of oil and gas development projects approved by the lender, and distributions to the Company of $65,000 per month for general and administrative expenses, and a quarterly tax distribution at the current statutory rates. Within 30 days of the end of each quarter, commencing with the quarter ended June 30, 2019, Ichor Energy, LLC is required to pay, as an additional principal payment on the debt, any cash in excess of the MLR and the APOD Capex Amount. To the extent not previously paid, all loans under the Loan Agreement shall be due and payable on the December 28, 2023 (the Maturity Date). The loan agreement contains prepayment penalties through December 28, 2021 and “make-whole” obligations through December 28, 2020. In addition, at maturity (or sooner under certain circumstances which include prepayment of the loan or sale of Ichor Energy, LLC) the lenders will receive a payment approximating 7% of the fair value of Ichor Energy, LLC at that time; such amount is not estimable. Obligations under the loan agreement are secured by mortgages on the oil and gas leases of Ichor Energy, LLC and all of its subsidiaries, a security agreement covering all assets of Ichor Energy, LLC, and a pledge by Ichor Holdings of all if the membership interests in Ichor Energy LLC. The balance shown is net of unamortized discount of $3,069,544 at June 30, 2020 and $3,507,364 at December 31, 2019.		52,547,961		53,699,940

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On December 28, 2018, the Company issued a 10% secured promissory note in the amount of $23,777,948, payable to RPM Investments, secured by 100% of the membership interests of Ichor Energy Holdings, LLC. All accrued interest and unpaid principal were due on the earlier of (i) the date the Company or one of its affiliates completes an acquisition with one or more of the sellers for a purchase price equal to or greater than $50,000,000 or (ii) January 31, 2020. This note was secured by a pledge of all of the membership interests of Viking’s wholly-owned subsidiary, Ichor Energy Holdings, LLC. On February 3, 2020 in connection with an acquisition of oil and gas interests this note (including all unpaid accrued interest of $2,625,346) was settled and replaced with a new note.	-	23,777,948

On February14, 2019, the Company executed a promissory note payable to CrossFirst Bank in the amount of $56,760 for the purchase of transportation equipment, bearing interest at 7.15%, payable in 60 installments of $1,130, secured by a vehicle, with a maturity date of February 14, 2024.	43,567	48,658

On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Petroleum, LLC, executed a promissory note payable to Cornerstone Bank in the amount of $2,241,758, bearing interest at 6%, payable interest only for the first year, then payable in 59 installments of $43,438, with a final payment due on a maturity date of July 24, 2025.The note is secured by a first mortgage on all of the assets of Mid-Con Petroleum, LLC and a guarantee of payment by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $24,161 at June 30, 2020 and $26,538 at December 31, 2019.	2,217,598	2,215,221

On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Drilling, LLC, executed a promissory note payable to Cornerstone Bank in the amount of $1,109,341, bearing interest at 6%, payable interest only for the first year, then payable in 59 installments of $21,495, with a final payment due on a maturity date of July 24, 2025. The note is secured by a first mortgage on all of the assets of Mid-Con Drilling, LLC and a guarantee of payment by Viking Energy Group, Inc. The balance shown is net of unamortized discount of $24,093 at June 30, 2020 and $26,464 at December 31, 2019.	1,034,585	1,032,215

On February 3, 2020, the Company executed a promissory note payable to Camber Energy, Inc. in the amount of $5,000,000, bearing interest at 10.5% payable quarterly with a maturity date of February 3, 2022.On June 26, 2020, the Company executed a second promissory note payable to Camber Energy, Inc. in the amount of $4,200,000, also bearing interest at 10.5% payable quarterly with a maturity date of February 3, 2022. Both of these notes are generally convertible into common shares of Viking at a conversion price of $0.24 per share subject to certain restrictions. The terms of the notes provide Camber with a security interest (subject to certain prerequisites) in Viking’s 70% ownership of Elysium Holdings, LLC and 100% of Ichor Energy Holdings, LLC. Additionally, Viking provided Camber a junior security interest in the membership or common stock of ownership interests of all of Viking’s other existing and future, directly-owned or majority-owned subsidiaries.	9,200,000	-

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On February 3, 2020, in connection with an acquisition of oil and gas interests, the Company executed a secured promissory note in the amount of $20,869,218, payable to EMC Capital Partners, LLC, subject to revision to the extent of any post-closing adjustment payments in connection with the acquisition. Such payments were to be applied to reduce the balance owing under the promissory note. During April 2020 the Company received post-closing adjustment payments in the amount of $5,277,589 which were applied to the note balance. This note replaced the secured promissory dated December 18, 2018 in favor of RPM Investments. This note bears interest at 10% and is payable along with the full amount of principal on June 11, 2021 and is secured by a pledge of all of the membership interests of Viking’s wholly-owned subsidiary, Ichor Energy Holdings, LLC. If the note is paid in full on or before the 150^th day following the date of its issuance, all interest will be waived.	15,591,629	-

On February 3, 2020, to facilitate the acquisition of certain oil and gas assets, the Company, through one of its subsidiaries, Elysium Energy LLC, entered into a Term Loan Credit Agreement with various lenders represented by 405 Woodbine, LLC as administrative agent. The agreement provides for a total loan amount of $35,000,000 at a 4.0% original issue discount. bearing interest at the prime rate plus seven and three quarters percent (7.75%) payable monthly. Principal payments are due beginning on May 1, 2020, and on each month thereafter at one percent (1%) of the then-outstanding balance, and to the extent not paid on the maturity date of August 3, 2022. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the Term Loan, oil and gas development projects approved by the lender, and a cost allocation of $150,000 per month for general and administrative expenses of the Company. The Borrower shall have the right at any time to prepay all or a portion of the Loan Balance. The loan agreement contains a prepayment penalty of 5% of any voluntary prepayment of principal through February 3, 2021 and 3% of any voluntary prepayment of principal on or between February 3, 2021 and February 3, 2022. Commencing with the quarter ended September 30, 2020 the Borrower is required to make mandatory prepayments of principal equal to 75% of Excess Cash Flow as defined in the agreement without any prepayment penalty fees. The loans are secured by mortgages on the oil and gas leases of Elysium Energy LLC and its subsidiaries, a security agreement covering all assets of Elysium and its subsidiaries, and a pledge of all of Elysium’s membership interests. The balance shown is net of unamortized discount of $3,645,437 at June 30, 2020.	31,730,047	-

On or about February 18, 2020, the Company commenced an offering of securities consisting of a subordinated, secured, convertible debt instrument with equity features; during the six months ended June 30, 2020, the Company borrowed $2,780,554 under this offering from private lenders. The notes bear interest at 12%, payable quarterly, contain a conversion entitlement to convert all or a portion of the amount outstanding into common shares of the Company at $0.175 per share, and provide for the issuance of 150,000 common shares of the Company for every $100,000 exchanged or advanced. As security, the holders received, pari passu with all other holders and with Camber Energy, Inc., a pledge of the Company’s membership interest in Elysium Energy Holdings, LLC, and, as soon as the Company’s obligations to EMC Capital Partners, LLC are satisfied, a pledge of the Company’s membership interest in Ichor Energy Holdings, LLC. Any unpaid principal and interest is due on the maturity date of February 11, 2022. The balance shown is net of unamortized discount of $460,898.	2,319,656	-

On April 18, 2020, the Company entered into an unsecured promissory note with Crossfirst Bank in the principal amount of $149,600 related to the CARES Act Payroll Protection Program. This note is fully guaranteed by the Small Business Administration and may be forgivable provided that certain criteria are met. The interest rate on the loan is 1%, and the note has a two-year maturity. The Company is required to make payments on the remaining principal of the note net of any loan forgiveness beginning November 18, 2020.	149,600	-

	132,468,807	99,592,928

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Other short-term borrowings – with related parties:

On September 30, 2019, the Company received $910,000 under an agreement that requires the Company to make 28 weekly payments aggregating $1,237,600 through April 13, 2020. On December 23, 2019, the Company received an additional $242,750 under a replacement agreement that requires the Company to make 25 weekly payments aggregating $1,620,000 through June 15, 2020. The balance shown is net of the maximum discount of $413,445 at December 31, 2019.	-	1,141,755

On October 3, 2019, the Company received $480,200 under an agreement that requires the Company to make 28 weekly payments aggregating $666,400 through April 20, 2020. The balance shown is net of the maximum discount of $132,289 at December 31, 2019.	-	423,111

On December 23, 2019, the Company received $2,939,970 under an agreement that requires the Company to make 25 weekly payments aggregating $4,050,000 through June 15, 2020.The balance shown is net of the maximum discount of $1,110,030 at December 31, 2019.	-	2,855,368

On February 7, 2020, the Company received $900,000 from a company. The advance is non-interest bearing and payable on demand.	-	-

Other short-term borrowings:

On November 26, 2019, the Company received $200,000 from an individual. The advance was non-interest bearing and payable on demand	-	200,000

During May and June 2020, the Company received $350,000 from short-term unsecured promissory notes payable in six months from date of issue. The notes bear interest at 13.25% payable monthly and provide for the issuance of 500,000 common shares of the Company for every $100,000 invested. The balance shown is net of unamortized discount of $174,949.	175,051	-

On June 3, 2020, the Company received $25,000 from an individual.	25,000

Total long-term debt and other short-term borrowings		132,668,858			104,213,162
Less current portion		(63,059,086	)		(19,225,045	)
	$	69,609,772		$	84,988,117

As described in Note 9, subsequent to June 30, 2020, holders of approximately $4.6 million of the Company’s 2018 Convertible Notes either (i) exchanged their notes for new convertible notes that were then converted into shares of the Company’s common stock or (ii) exchanged their notes for new convertible notes with a maturity date of February 2022. As a result, this $4.6 million of debt which was otherwise due in August 2020 has been classified as long term at June 30, 2020.

Principal maturities of long-term debt for the next five years and thereafter are as follows:

Twelve-month period ended June 30,
	Principal		Unamortized Discount		Net
2021	$	68,529,121	$	5,470,035	$	63,059,086
2022		20,125,000		1,117,414		19,007,586
2023		3,591,444		888,057		2,703,387
2024		47,610,812		443,490		47,167,322
2025		705,253		10,138		695,115
Thereafter		36,362		-		36,362

	$	140,597,992	$	7,929,134	$	132,668,858

~~Note 7.~~ ~~Commitments and contingencies~~

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Loan Covenants

Pursuant to the terms of the Revolving Line of Credit Facility executed on June 13, 2018 with CrossFirst Bank for a maximum principal amount of $30,000,000, the Company is required to provide on a quarterly basis, certain information to the Bank relative to operational performance of the Borrowers, to include internally prepared consolidated financial statements, hedge reports, and a compliance certificate. At June 30, 2020, the Company is in compliance with these loan covenants.

Pursuant to the terms of the Term Loan Credit Agreement executed on December 28, 2018 with various lenders in the initial amount of $63,592,000 (and as amended in June 2020), the Company is required to provide, periodically to the lenders, certain information (including restrictive financial ratios) relative to financial and operational performance of the related assets, accompanied by a compliance certificate. At June 30, 2020, the Company is in compliance with these loan covenants.

Pursuant to the terms of the Term Loan Credit Agreement executed on February 3, 2020 with various lenders in the initial amount of $36,458,333, the Company is required to provide, periodically to the lenders, certain information (including regarding restrictive financial ratios) relative to financial and operational performance of the related assets, accompanied by a compliance certificate. The Company was in compliance with all loan covenants except certain required financial ratios at June 30, 2020; the Company has obtained a waiver from the lenders for such noncompliance at June 30, 2020. As a result, the Company has classified the debt related to this covenant violation as current as the Company has not been able to determine its ability to comply in the future.

Note 8.Commitments and Contingencies

Office lease

In April 2018, the Company’s subsidiary, Petrodome Energy, LLC entered into a 66-month lease for 4,147 square feet of office space for the Company’s corporate office in Houston, Texas. The annual base rent commenced at $22.00 per square foot, and escalates at $0.50 per foot each year through expiration of the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease expense was $48,192 for the six months ended June 30, 2020 and 2019.

Pending Merger

On February 3, 2020, the Company entered into an Agreement and Plan of Merger with Camber Energy, Inc. The Merger Agreement provides that a newly-formed wholly-owned subsidiary of Camber will merge with and into Viking, with Viking surviving the merger as a wholly-owned subsidiary of Camber. The proposed merger contemplates Camber issuing newly-issued shares of common stock, with the equity holders of Viking having an 80% interest in the post-closing entity. The merger, if completed, will provide the opportunity for our common stock to be listed on the NYSE American.

The Merger Agreement provides, among other things, that the board of directors of the combined company will be comprised of five directors, one to be appointed by Camber and four to be appointed by Viking. The Merger Agreement also provides that James A. Doris, the Chief Executive Officer of Viking, shall serve as the Chief Executive Officer of the combined company. The combined company will have its headquarters in Houston, Texas.

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The completion of the Merger is subject to numerous conditions including (i) the effectiveness of a registration statement registering the shares of Camber common stock to be issued to Viking’s shareholders in the merger and (ii) shareholder approval of the merger transactions by Camber’s shareholders and Viking’s shareholders. Additional closing conditions include (i) that in the event the NYSE American determines that the merger constitutes, or will constitute, a “back-door listing”/”reverse merger”, Camber (and its common stock) is required to qualify for initial listing on the NYSE American, and (ii) that the only loan obligations with a maturity date in 2020 that Viking shall have at closing shall be the 2018 Convertible Notes.

The Merger can be terminated under various conditions or circumstances. The Merger Agreement contains customary indemnification obligations of the parties and representations and warranties. Upon consummation of the merger, Viking will be deemed the acquirer for accounting purposes.

Legal matters

From time to time the Company may be a party to litigation ~~matters~~ involving commercial claims against the Company. Management believes that ~~there are no current~~the ultimate resolution of these matters ~~that would~~will not have a material effect on the Company’s ~~consolidated~~ financial position or results of operations.

~~Note 8.~~ ~~Subsequent Events~~

The ~~Company~~staff (the “Staff”) of the SEC’s Division of Enforcement has ~~evaluated subsequent events from September 30, 2017, through the date of filing this Form 10-Q, and determined there are no additional items to disclose other than the below.~~

~~On October 2, 2017,~~notified the Company, ~~through~~that the Staff has made a ~~wholly-owned subsidiary, Mid-Con Drilling, LLC (“Mid-Con Drilling”), executed a Promissory Note in favor~~preliminary determination to recommend that the SEC file an enforcement action against the Company, as well as against its CEO and it CFO, for alleged violations of ~~Cornerstone Bank (“Cornerstone”). The principal amount~~Section 17(a) of the ~~Note, which loan transaction formally closed on October 2, 2017, is $290,000,~~Securities Act of 1933 and ~~the maturity date~~Section 10(b) of the ~~Note~~Securities Exchange Act of 1934 and Rule 10b-5 thereunder during the period from early 2014 through late 2016. The Staff’s notice is ~~October 2, 2025. For the first 12 months, the Note bears interest at Cornerstone’s corporate base rate (currently 4.5%) plus 1.0%, and thereafter the interest rate shall be 6% per annum.~~

~~The Note is secured~~not a formal allegation or a finding of wrongdoing by ~~a first-ranking security interest and mortgage against the assets acquired by the Company described below, and a guaranty from each of~~ the Company, and the ~~Company’s President~~Company is in dialogue with the Staff regarding its preliminary determination. The Company believes it has adequate defenses and ~~Chief Executive Officer, James Doris.~~intends to vigorously defend any enforcement action that may be initiated by the SEC.

~~$286,016 of~~Note 9. Subsequent Events

In early July 2020, the ~~loan proceeds were used on October~~Company issued a Promissory Note to Radium 2 ~~2017, as payment of~~Capital, Inc. (“Radium” a related party through affiliation with Troy Caruso), in connection with $1,350,000 advanced by Radium to the Company. The Promissory Note permitted Radium to convert all or a portion of the purchase price for a 100% working interest in six new oil and gas leases in Miami and Franklin Counties in Eastern Kansas purchased by Mid-Con Drilling effective October 1, 2017. Existing production from the acquired interests at closing was approximately twenty-two barrels of oil per day. The purchase included an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by Mid-Con Drilling. The leases produce oil from the Cherokee formation and offer the potential for several future drilling locations. The acquisition price for this transaction was $530,000. The balance of the purchase price was provided by the Company from cash on-hand via a recently completed private placement.

~~On October 3, 2017, Mid-Con Drilling executed an additional Promissory Note in favor of Cornerstone Bank. The principal~~ amount of the Note is $204,000, and the maturity date of the Note is October 3, 2025. For the first 12 months, the Note bears interest at Cornerstone’s corporate base rate (currently 4.5%) plus 1.0%, and thereafter the interest rate shall be 6% per annum. The Note is secured by a first-ranking security interest and mortgage against the assets acquired by the Company described below, and a guaranty from eachowing into common shares of the Company at a conversion price of $0.122 per share. Subsequently in July 2020, Radium elected to convert the entire principal amount and the ~~Company’s President and Chief Executive Officer, James Doris.~~

$200,441 of the loan proceeds were used on October 4, 2017, as payment of a portion of the purchase price for an 80% working interest in six new oil and gas leases in Riley, Geary and Wabaunsee Counties in Kansas by Mid-Con Drilling. Existing production from the acquired interests at closing was approximately thirteen barrels of oil per day. The purchase included an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by Mid-Con Drilling. The leases produce oil from various zones, including the Conglomerate (at depths of 1,650 to 1,800 feet), Viola and Simpson Sandstone (at depths of 2,917 to 3,063 feet), and offer the potential for several future drilling locations. The acquisition price for this transaction was $400,000. The balance of the purchase price was provided by the Company ~~from cash on-hand via a recently completed private placement.~~

On or about October 19, 2017 the Company executed a consulting agreement pursuant to which the consultant agreed to among other things: (i) assess potential acquisition and investment opportunities; (ii) interview and provide input with respect to persons considered by the Company for advisory, director or officer positions; and (iii) review, critique and provide guidance with respect to the Company’s strategic plan. In exchange for the services the consultant is to receive an equivalent of $5,000 per month inissued Radium 11,065,574 common shares in the ~~capital stock~~conversion.

Additionally, in early July 2020, the Company issued an investor a convertible promissory note in the principal amount of $500,000 and 1,600,000 shares of the ~~Company.~~Company’s common stock. The ~~number of common shares earned each month is to be calculated based~~note matures on the ~~average daily traded value~~earlier of (i) 180 days after the date of the ~~common stock for~~note, or (ii) the ~~last 5 business days~~completion of the ~~particular month, as reported on~~Company’s up-listing to a national stock exchange, whether via merger or otherwise, if repayment of the ~~exchange on which Company’s shares are traded or any exchange upon which~~note is required by a third party; the common stock may be traded in the future. All common shares earned by the consultant pursuant to the agreement are to be issued by the Company on a quarterly basis. The Company may terminate the agreement for any reason upon 60 days’ written notice to the consultant,note accrues interest at 12% per annum, with interest due at maturity; and the ~~consultant may terminate the agreement at any time upon 30 days’ notice to the Company.~~

On or about October 25, 2017 the Company executed a consulting agreement pursuant to which the consultant agreed to among other things: (i) assess potential acquisition and investment opportunities; (ii) interview and provide input with respect to persons considered by the Company for advisory, director or officer positions; (iii) review, critique and provide guidance with respect to the Company’s strategic plan. In exchange for the services the consultantnote is to receive 50,000 common shares in the capital stock of the Company per month during the term of the agreement. All common shares earned by the consultant pursuant to the agreement are to be issued by the Company on a quarterly basis. The Company may terminate the agreement for any reason upon 60 days’ written notice to the consultant, and the consultant may terminate the agreement at any time upon 30 days’ notice to the Company.

~~On November 10, 2017, Viking Energy Group, Inc. (the “Company”) entered~~convertible into a Membership Interest Purchase Agreement with Black Rhino, LP (the “Seller”), to acquire some of the oil and gas business membership interests owned by the Seller in exchange for (i) making a $3,000,000 cash payment to the Seller at closing; (ii) issuing to the Seller 2,000,000 shares of the Company’s common stock at ~~closing;~~a fixed conversion price of $0.15, subject to a 4.99% waivable beneficial ownership limitation.

From July 1, 2020 to August 14, 2020, the Company had the following activity regarding the 2018 Convertible Notes:

Noteholders representing $2,197,745 of such principal amount, (and approximately $38,400 of accrued interest) exchanged into new convertible promissory notes with a maturity date of February 11, 2022. Pursuant to the terms of the issuance agreements, the noteholders were also issued 3,354,218 common shares of the Company in connection with the issuance of the new notes. Immediately thereafter, the noteholders converted the entire principal amount due under the notes into common shares of the Company at $0.15 per share pursuant to the terms of the new convertible notes, and were issued 14,907,633 common shares of the Company in the conversions.

	·	Noteholders representing $2,453,150 of such principal amount exchanged into new convertible promissory notes with a maturity date of February 11, 2022, and were issued 3,679,725 common shares of the Company in connection with the issuance of the new notes.

	·	Noteholders representing $6,301,020 of such principal amount agreed to extend the maturity date of their convertible promissory notes from August 31, 2020 to December 31, 2020.

In a series of separate transactions subsequent to June 30, 2020, the Company issued, in the aggregate, 15,154,811 shares of common stock in exchange for services rendered by several parties.

In a series of separate transactions subsequent to June 30, 2010, the Company issued in the aggregate 610,972 shares of common stock to various noteholders as payment for interest.

On or about July 7, 2020, an individual holder of a $25,000 promissory note exchanged into a new convertible promissory note with a maturity date of February 11, 2022, and ~~(iii) granting~~was also issued 37,500 common shares of the ~~Seller a 1.5% over-riding royalty interest~~Company in ~~(a) all existing oil and gas leases associated~~connection with the ~~purchased interests, and (b) all new oil and gas wells drilled on some~~issuance of the ~~prospects identified by~~new note. Immediately thereafter, the ~~Seller which expire on October 31, 2020. The scheduled closing date~~noteholder converted the entire principal amount into common shares of the ~~transaction is on or before December 22, 2017. The completion~~Company at $0.15 per share and was issued 166,667 common shares of the ~~transaction is conditional upon~~Company in the conversion.

On or about July 31, 2020, the Company ~~securing financing~~issued 7,125 shares of common stock pursuant to ~~satisfy the cash component to be paid to the Seller at closing, and there is no guaranty that such condition will be satisfied.~~a cashless exercise of warrants.

On or about July 31, 2020, the Company issued for services common stock warrants to purchase 2,500,000 shares of common stock at a price equal to $0.001 per share. The warrants have a five-year term and include a cashless exercise feature.

As discussed in Note 7, the February 3, 2020 loan agreement with various lenders in the initial amount of $36,458,333 required the Elysium subsidiaries to maintain certain financial ratios regarding collateral coverage and maximum leverage, and on August 19, 2020, the lenders waived any defaults at June 30, 2020, relating to those financial ratios in consideration of the Elysium subsidiaries agreeing to pay the lenders $87,000.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with the financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form ~~10-Q. In~~10-Q.In preparing the management’s discussion and analysis, the registrant presumes that you have read or have access to the discussion and analysis for the preceding fiscal year.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 or the Reform Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earning, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions of performance; and statements of belief; and any statements of assumptions underlying any of the foregoing. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: our ability to raise capital and the terms thereof; ability to gain an adequate player base to generate the expected revenue; competition with established gaming websites; adverse changes in government regulations or polices; and other factors referenced in this Form 10-Q.

The use in this Form 10-Q of such words as “believes”, “plans”, “anticipates”, “expects”, “intends”, and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements present the Company’s estimates and assumptions only as of the date of this Report. Except for the Company’s ongoing obligation to disclose material information as required by the federal securities laws, the Company does not intend, and undertakes no obligation, to update any forward-looking statements.

Although the Company believes that the expectations reflected in any of the forward-looking statements are reasonable, actual results could differ materially from those projected or assumed or any of the Company’s forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.

PLAN OF OPERATIONS

Overview

~~Overview~~Viking Energy Group, Inc. (“Viking” or the “Company”) is an independent exploration and production company engaged in the sale of crude oil, natural gas and natural gas liquids, focused on the acquisition and development of oil and natural gas properties in the Gulf Coast and Mid-Continent regions of the United States. The Company owns oil and gas leases in Texas, Louisiana, Mississippi and Kansas. The Company targets under-valued assets with realistic appreciation potential.

The Company's business plan is to engage in the acquisition, exploration, development of and production offrom oil and natural gas properties, both individually and through collaborative partnerships with other companies in this field of endeavor. ~~On March 8, 2016, the~~Viking has relationships with industry experts and formulated an acquisition strategy, with emphasis on acquiring under-valued, producing properties from distressed vendors or those deemed as non-core assets by larger sector participants. The Company ~~incorporated a wholly owned subsidiary, Viking Oil & Gas (Canada) ULC, in Alberta, Canada, to hold its Canadian~~does not focus on speculative exploration programs, but rather targets oil and gas ~~interests. In November of 2014,~~properties with current production and untapped reserves. The Company’s growth strategy includes the following key initiatives:

	·	Acquisition of under-valued producing oil and gas assets
	·	Employ enhanced recovery techniques to maximize production: and
	·	Implement responsible, lower-risk drilling programs on existing assets
	·	Aggressively pursue cost-efficiencies
	·	Opportunistically explore strategic mergers and/or acquisitions
	·	Actively hedge to mitigate commodity risk

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The following overview provides a background for the current strategy being implemented by management

Acquisitions – Texas, Louisiana and Mississippi

On December 22, 2017, the Company ~~entered into its first contract relative to~~completed an acquisition of 100% of the membership interests of Petrodome Energy, LLC, a privately-owned company, with working interests in multiple oil and gas ~~activities involving jointly controlled~~fields across Texas, Louisiana and Mississippi, comprising approximately 11,700 acres.

As a part of this acquisition, the Company retained an operational office in Houston, Texas that includes several senior level professionals with over 100 years of combined oil and gas experience which provides the Company the capability of operating many of its own wells internally. This expertise has since been utilized to evaluate potential oil and gas acquisitions, evaluate the management of the Company’s oil and gas assets, and ~~related liabilities by purchasing an undivided 50% interest in the Joffre project located in Alberta, Canada.~~ evaluate and develop new drilling prospects.

Acquisitions – Texas and Louisiana

On ~~February 23, 2016,~~December 28, 2018, the Company, ~~closed on the~~through its newly formed Ichor Energy subsidiaries completed an acquisition (the “Ichor Energy Acquisition”) of working interests in ~~four~~oil and gas leases in Texas (primarily in Orange and Jefferson Counties) and Louisiana (primarily in Calcasiue Parish), which included 58 producing wells and 31 salt water disposal wells. The properties produce hydrocarbons from known reservoirs/sands in the on-shore Gulf Coast region, with ~~access~~an average well depth in excess of 10,600 feet, and daily production volumes averaging in excess of 2,000 BOE. This acquisition of these assets is consistent with the location of the Company’s Petrodome assets and the acquired assets are effectively managed from the Company’s Houston office.

On May 10, 2019, Petrodome Louisiana Pipeline LLC ("Petrodome LA"), a subsidiary of the Company’s subsidiary, Petrodome Energy, LLC, acquired a majority working interest in 6 gas wells (including 2 producing gas wells), 1 producing oil well and 1 salt water disposal well located in the East Mud Lake Field in Cameron Parish, Louisiana, with leases to ~~the~~ mineral rights (oil and gas) concerning approximately ~~281 acres~~765 acres.

On February 3, 2020, the subsidiary of ~~property~~the Company’s then-75%-owned subsidiary, Elysium Energy Holdings, LLC (now 70%-owned), acquired interests in Miami and Franklin Counties in eastern Kansas. On August 30, 2016, the Company created an additional wholly owned subsidiary, Mid-Con Petroleum, LLC (“Mid-Con”), in the State of Kansas to hold its current acquisitions in the central United States. On October 4, 2016, the Company, through Mid-Con, completed an acquisition whereby the Company (i) increased its working interest in three existing oil and gas properties located in Texas and Louisiana, which included leases, ~~in Miami~~working interests, and ~~Franklin Counties~~over-riding royalty interests in ~~Eastern Kansas, and (ii) acquired a working interest in four new~~ oil and gas ~~leases~~properties in Texas (approximately 72 wells in 11 counties) and Louisiana (approximately 55 wells in 6 parishes), along with associated equipment. On February 4, 2020, Elysium hedged 75% of the same region, comprising approximately 660 acres of property. On August 25, 2017, the Company created an additional wholly owned subsidiary, Mid-Con Drilling, LLC. (“Mid-Con Drilling”), in the State of Kansas to hold additional acquisitions in the central United States. On September 11, 2017, the Company through Mid-Con Drilling completed an acquisition of a 90% working interest in four newestimated oil and gas ~~leases in Anderson County in Eastern Kansas, comprising approximately 980 acres~~production associated with the newly acquired assets for 2020, 60% of ~~property. On October 2, 2017,~~ the ~~Company through Mid-Con Drilling completed an acquisition~~estimated production for 2021 and 50% of the estimated production for the period between January, 2022 to July, 2022. Theses hedges have a ~~100% working interest in six new~~floor of $45 and a ceiling ranging from $52.70 to $56.00 for oil, and ~~gas leases in Miami~~a floor of $2.00 and ~~Franklin Counties in Eastern Kansas, and on October 4, 2017, the Company through Mid-Con Drilling completed an acquisition~~a ceiling of ~~an 80% working interest in six new oil and gas leases in Riley, Geary and Wabaunsee Counties in Kansas.~~$2.425 for natural gas.

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Pending Merger

These accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company generated net income of $2,576,209 for the six months ended June 30, 2020 as compared to a net loss of $10,639,135 for the six months ended June 30, 2019. As of June 30, 2020, the Company has a working capital deficiency in excess of $62,000,000. The largest components of current liabilities creating this deficiency are (a) notes payable with a face value aggregating approximately $6.5 million as of June 30, 2020, due in August and December of 2020, (b) a revolving credit facility with a balance of $7,090,000 as of June 30, 2020, due in May of 2021, (c) a note payable of approximately $15.5 million as of June 30, 2020, due in June of 2021, (d) a term loan agreement of approximately $31.7 million as of June 30, 2020, and (e) other debtor obligations requiring principal payments of approximately $2 million in 2020.

Going Concern Qualification

These accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company generated net income of $2,576,209 for the six months ended June 30, 2020 as compared to a net loss of $10,639,135 for the six months ended June 30, 2019. As of June 30, 2020, the Company has a working capital deficiency in excess of $62,000,000. The largest components of current liabilities creating this deficiency are (a) notes payable with a face value aggregating approximately $6.5 million as of June 30, 2020, due in August and December of 2020, (b) a revolving credit facility with a balance of $7,090,000 as of June 30, 2020, due in May of 2021, (c) a note payable of approximately $15.5 million as of June 30, 2020, due in June of 2021, (d) a term loan agreement of approximately $31.7 million as of June 30, 2020, and (e) other debtor obligations requiring principal payments of approximately $2 million in 2020.

Management has evaluated these conditions and has developed a plan which, in part, address these obligations as follows:

	·	The acquisition of Petrodome Energy LLC in 2017 and the oil and gas expertise retained by Petrodome at the end of 2017 provided an internal lease operating company to efficiently evaluate development opportunities.

	·	The Ichor Energy Acquisition at the end of 2018 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a work over program to increase this purchased production beyond its current average daily production of 2,000 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, and distributions to Viking of $65,000 per month for general and administrative expenses, and a quarterly tax distribution at the current statutory rates if applicable. On a quarterly basis after appropriate distributions to the Company, any cash in excess of $2,000,000 plus unfunded approved development projects is swept by the term loan lender as an additional principal payment on the debt.

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	·	The Company has a revolving credit facility with CrossFirst Bank, which was approved for $30,000,000. The balance outstanding at June 30, 2020 is approximately $7,090,000 with a maturity date of May 10, 2021. Additional funds could be made available from this facility for projects reviewed and approved by the lender.

	·	The Elysium Energy Acquisition on February 3, 2020 is believed to provide cash flow sufficient to not only satisfy the Company’s debt service associated with this acquisition, but to also fund a development program to increase this purchased production beyond its current average daily production of 2,700 BOE and provide a quicker principal reduction, resulting in an increased equity position relative to these assets. Cash generated from the operation of these assets is restricted to lease operating expenses, the payment of debt service on the associated term loan, certain oil and gas development projects approved by the lender, and a cost allocation for general and administrative expenses of $150,000 per month. Additionally, to the extent that Elysium has excess cash flow (as specified in the term loan agreement), the Company is required to make mandatory prepayments of the term loan, without penalty or premium, equal to seventy-five percent (75%) of such Excess Cash Flow.

	·	With respect to the approximately $11.1 million at June 30, 2020 in face value of convertible notes due in August of 2020 and as discussed in Note 9, various holders have subsequently (i) exchanged approximately $2.2 million of such notes to for new convertible notes, that were then converted into shares of the Company’s stock, (ii) exchanged approximately $2.4 million of such notes into new convertible notes with a maturity of February 2022, and (iii) extended the due dates of approximately $6.3 million of such notes to December 31, 2020.

Additionally, recent oil and gas price volatility as a result of geopolitical conditions and the global COVID-19 pandemic have already had, are expected to continue to have a negative impact on the Company’s financial position and results of operations. Negative impacts include but are not limited to: the Company’s ability to sell our oil and gas production, reduction in the selling price of the Company’s oil and gas, failure of a counterparty to make required hedge payments, disruption of production as a result of worker illness or mandated production shutdowns, impairment of our oil and gas properties, the Company’s ability to maintain compliance with or renegotiate loan covenants and/or refinance existing indebtedness, and access to new capital and financing.

~~Going Concern Qualification~~

These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to utilize the resources in place to generate future profitable operations, ~~and/~~to maintain compliance with or renegotiate its loan covenants, to develop additional acquisition opportunities, and to obtain the necessary financing to meet its obligations and repay its liabilities arising from ~~normal~~ business operations when they come due. Management ~~has no formal plan in place~~believes the Company will be able to ~~address this concern but considers that the Company~~continue to develop new opportunities, and will be able to obtain additional funds bythrough debt and / or equity ~~financing and/or related party advances;~~financings to facilitate its development strategy; however, there is no assurance of additional funding being available. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

RESULTS OF CONTINUING OPERATIONS

The following discussion of the financial condition and results of operation of the Company for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2019, filed with the SEC on ~~April 17, 2017.~~March 30, 2020.

Liquidity and Capital Resources

As of ~~September~~June 30, ~~2017,~~2020, and December 31, ~~2016,~~2019, the Company had ~~$568,222~~$4,490,411 (of which $2,569,003 is restricted) and ~~$18,605~~$5,638,724 (of which $3,877,229 is restricted) in cash holdings, respectively.

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Restricted cash in the amount of $2,569,003 as of June 30, 2020 consists of $2,081,144 held by Ichor Energy, LLC and/or its subsidiaries and $487,859 held Elysium Energy, LLC and/or its subsidiaries.

Pursuant to the Term Loan Credit Agreement to which the Company’s subsidiary, Ichor Energy LLC and its subsidiaries are parties, following March 31, 2019 the company is required at all times to maintain a minimum cash balance of $2,000,000 (the “MLR”). Within 30 days of the end of each quarter, commencing with the quarter ended June 30, 2019, the borrower is required to pay the lenders, as an additional principal payment on the debt, any cash in excess of (i) the MLR and (ii) any funds necessary for the capital expenditures contemplated to be expended in the next six month period by an approved plan of development (“APOD Capex Amount”). At June 30, 2020, the restricted cash did not exceed the MLR and the APOD Capex Amount.

Pursuant to the Term Loan Credit Agreement to which the Company’s majority-owned subsidiary, Elysium Energy, LLC and its subsidiaries are parties, all receipts are to be deposited to a lockbox account under the control of the administrative agent, and then subsequently transferred for operations to the company’s bank accounts, all of which are subject to deposit account control agreements. Commencing with the quarter ended September 30, 2020, the company is required to make mandatory prepayments of principal equal to 75% of excess cash flow as specified in the agreement.

As of June 30, 2020, the Company has total long-term debt and other short-term borrowings of $132,668,858, with a current portion of $63,059,086. The current portion consists primarily of (a) notes payable with a face value aggregating approximately $6.5 million as of June 30, 2020, due in August and December of 2020, (b) a revolving credit facility with a balance of $7,090,000 as of June 30, 2020, due in May of 2021, (c) a note payable of approximately $15.5 million as of June 30, 2020, due in June of 2021, (d) a term loan agreement of approximately $31.7 million as of June 30, 2020, and (e) other debtor obligations requiring principal payments of approximately $2 million in 2020 (see Going Concern Qualification in Note 1 to the consolidated financial statements included elsewhere herein).

Three months ended ~~September~~June 30, ~~2017,~~2020 compared to the three months ended ~~September~~June 30, ~~2016~~2019

Revenue

The Company had gross revenues of ~~$221,329~~$9,549,863 for the three months ended ~~September~~June 30, ~~2017,~~2020, as compared to ~~$105,427~~$8,734,323 for the three months ended ~~September~~June 30, ~~2016, representing its share~~2019, reflecting an increase in excess of 9% or $815,540.This increase in revenue is primarily a result of the increased production from ~~its operations~~the oil and gas assets acquired in ~~Canada and the central United States.~~February of 2020.

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Expenses

The Company’s operating expenses increased by ~~$117,259~~approximately 33%, or $2,126,868 to ~~$576,685~~$8,548,477 for the three-month period ended ~~September~~June 30, ~~2017,~~2020, from ~~$459,426~~$6,421,609 in the corresponding prior period. Lease operating costs increased by approximately 54%, or $1,539,511, to 4,396,789 from $2,857,278 as compared to the three months ended June 30, 2019. DD&A expense, a non-cash expense, increased by $693,0178, to $2,921,208 from $2,228,191 for the corresponding period in ~~2016.~~ 2019. These expense increases were primarily the result of acquiring additional oil and gas assets during the quarter ended March 31, 2020. General and administrative expenses reflected a decrease of approximately 27%, to $917,190, when compared to $1,257,959 in the corresponding prior period due primarily to reduction in personnel.

Income (loss) from Operations

The ~~increase is mainly attributable to increased lease operating costs commensurate with~~Company, through the increased production ~~during~~coming from its latest acquisition, and controlling the ~~three-month period~~cost of operations and administration, has generated an income from operations for the three months ended ~~September~~June 30, ~~2017, as~~2020 of $1,001,386, when compared to income from operations of $2,312,714 for the ~~three-month period~~three months ended ~~September~~June 30, ~~2016.~~2019.

Other ~~income (expense)~~Income (Expense)

The Company had other ~~income (expense)~~expense of ~~$(430,244)~~$18,674,336 for the three months ended ~~September~~June 30, ~~2017,~~2020, as compared to ~~$2,222,906~~other expense of $(1,020,368) for the three months ended ~~September~~June 30, ~~2016. This~~2019.This significant difference is primarily a result of a ~~large derivative gain during~~loss on the ~~three months ended September 30, 2016~~Company’s commodity derivatives, stock-based interest expense related to certain financing transactions, a loss on financing settlements and increased interest expense and amortization of ~~$2,765,013 as compared~~debt discount due to ~~$40,370 for the three months ended September 30, 2017.~~increased debt associated with acquisitions.

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Net Income (Loss)

The Company ~~incurred a~~had net ~~(loss)~~loss of ~~$(785,600)~~$(17,672,950) during the three-month period ended ~~September~~June 30, ~~2017,~~2020, compared with a net income of ~~$1,868,907~~$1,292,346 for the three-month period ended ~~September~~June 30, ~~2016. The decrease in net loss was mainly due to~~2019, a $18,965,296 difference primarily as a result of the items ~~referred to in the analysis of operating expenses and other income (expense).~~discussed above.

~~Nine~~Six months ended ~~September~~June 30, ~~2017,~~2020, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2019

Revenue

The Company had gross revenues of ~~$588,622~~$21,337,815 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, as compared to ~~$232,013~~$18,080,915 for the ~~nine~~six months ended ~~September~~June 30, ~~2017, representing its share~~2019, reflecting an increase in excess of 18% or $3,256,900.This increase in revenue is primarily a result of the increased production from ~~its operations~~the oil and gas assets acquired in ~~Canada~~February of 2020, and ~~the central United States.~~to a lesser extent enhancements to existing wells.

Expenses

The Company’s operating expenses increased by ~~$1,306,866~~approximately 37%, or $4,601,735 to ~~$2,583,744~~$17,148,899 for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017,~~2020, from ~~$1,276,878~~$12,547,164 in the corresponding prior period. Lease operating costs increased by approximately 49%, or $2,699,320, to 8,155,992 from $5,456,672 as compared to the six months ended June 30, 2019. DD&A expense, a non-cash expense, increased by $1,499,531, to $6,098,410 from $4,598,879 for the corresponding period in ~~2016. The increase is mainly attributable to increased lease operating costs commensurate with increased production, an increase in general~~2019. These expense increases were primarily the result of acquiring additional oil and gas assets during the three months ended March 31, 2020. General and administrative expenses ~~and~~reflected a ~~significant increase in stock-based compensation during the nine-month period ended September 30, 2017, as~~decrease of $89,467 to $2,201,837, when compared to $2,291,304 in the ~~nine-month period ended September 30, 2016.~~corresponding prior period.

Income (loss) from Operations

The Company generated an income from operations for the six months ended June 30, 2020 of $4,188,916, when compared to income from operations of $5,533,751 for the six months ended June 30, 2019.

Other ~~income (expense)~~Income (Expense)

The Company had other ~~income (expense)~~expense of ~~$(672,592)~~$(1,612,707) for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, as compared to ~~($1,057,597)~~other expense of $(16,172,886) for the ~~nine~~six months ended ~~September~~June 30, ~~2016. This increase in other income~~2019.This significant difference is primarily a result of a ~~reduced~~gain on the Company’s commodity derivatives offset by stock-based interest expense related to certain financing transactions, a loss on financing settlements and increased interest expense and amortization of ~~$1,160,875 for the nine months ended September 30, 2017, as compared~~debt discount due to $1,966,015 for the nine months ended September 30, 2016, offset by a derivative gain of $495,468 for the nine months ended September 30, 2017, as compared to a derivative gain of $833,418 for the nine months ended September 30, 2016.increased debt associated with acquisitions.

Net Income (Loss)

The Company ~~incurred a~~had net ~~(loss)~~income of ~~$(2,667,714)~~$2,576,209 during the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2017,~~2020, compared with a net ~~(loss)~~loss of ~~$(2,102,462)~~$(10,639,135) for the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2016. The decrease in net loss was mainly due to~~2019, a $13,215,344 difference primarily as a result of the items ~~referred to in the analysis of operating expenses and other income (expense).~~discussed above.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our financial statements, as well as the sufficiency of the disclosures pertaining to our accounting policies in the footnotes accompanying our financial statements. Described below are the most significant policies we apply in preparing our consolidated financial statements, some of which are subject to alternative treatments under GAAP. We also describe the most significant estimates and assumptions we make in applying these policies. See “Note 32 - Summary of Significant Accounting Policies” to our consolidated financial statements.

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Oil and Gas Property Accounting

The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs of acquisition, exploration and development of oil and natural gas properties (including such costs as leasehold acquisition costs, geological expenditures, dry hole costs, tangible and intangible development costs and direct internal costs) are capitalized as the cost of oil and natural gas properties when incurred.

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The full cost method requires the Company to calculate quarterly, by cost center, a ~~"ceiling,"~~“ceiling,” or limitation on the amount of properties that can be capitalized on the balance sheet. To the extent capitalized costs of oil and natural gas properties, less accumulated depletion and related deferred taxes exceed the sum of the discounted future net revenues of proved oil and natural gas reserves, the lower of cost or estimated fair value of unproved not properties subject to amortization, the cost of properties not being amortized, and the related tax amounts, such excess capitalized costs are considered an impairment and are charged to expense.

~~Proved Reserves~~

Estimates of our proved reserves included in this report are prepared in accordance with U.S. SEC guidelines for reporting corporate reserves and future net revenue. The accuracy of a reserve estimate is a function of:

i.
the quality and quantity of available data;

ii.
the interpretation of that data;

iii.
the accuracy of various mandated economic assumptions; and

iv.
the judgment of the persons preparing the estimate.

Our proved reserve information included in this report was predominately based on estimates. Because these estimates depend on many assumptions, all of which may substantially differ from future actual results, reserve estimates will be different from the quantities of oil and gas that are ultimately recovered. In addition, results of drilling, testing and production after the date of an estimate may justify material revisions to the estimate.

~~In accordance with SEC requirements, we~~We based the estimated discounted future net cash flows from proved reserves on the unweighted arithmetic average of the prior 12-month commodity prices as of the first day of each of the months constituting the period and costs on the date of the estimate. Consequently, because of the use of a 12-month average, a period of falling prices (such as the one that has occurred during the COVID-19 pandemic) may result in an impairment during an accounting period subsequent to the period when the falling prices have occurred.

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The estimates of proved reserves materially impact depreciation, depletion, amortization and accretion (“DD&A”) expense. If the estimates of proved reserves decline, the rate at which we record DD&A expense will increase, reducing future net income. Such a decline may result from lower market prices, which may make it uneconomic to drill for and produce from higher-cost fields.

Asset Retirement Obligation

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount we will incur to plug, abandon and remediate our producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. We determined our ARO by calculating the present value of estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties. Periodic accretion of discount of the estimated liability is recorded as accretion expense in the accompanying consolidated statements of ~~operations and comprehensive income.~~

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operations.

ARO liability is determined using significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive lives of wells and a risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated ARO.

Revenues from oil and gas properties are recognized under the entitlements method of accounting, whereby revenue is recognized on the amount the Company is entitled to, based on its interest in the property after all costs associated with exploration, gathering, marketing and sales relative to the volumes of product sold.Commodity derivatives

Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, the final results may ultimately differ from actual results. Certain accounting policies involve significant judgments and assumptions, which have a material impact on the Company’s financial condition and results. Management believes its critical accounting policies reflect its most significant estimates and assumptions used in the presentation of the Company’s financial statements. The Company does not designate its commodities derivative instruments as hedges and therefore does not apply hedge accounting. Changes in fair value of derivative instruments subsequent to the initial measurement are recorded as change in fair value on derivative liability, in other income (expense). The estimated fair value amounts of the Company’s commodity derivative instruments have ~~off-balance sheet arrangements, financings, or other relationships~~been determined at discrete points in time based on relevant market information which resulted in the Company classifying such derivatives as Level 2. Although the Company’s commodity derivative instruments are valued using public indices, as well as the Black-Sholes model, the instruments themselves are traded with ~~unconsolidated entities or other persons, also known as “special purpose entities.”~~unrelated counterparties and are not openly traded on an exchange.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company does not currently maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures would include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Company’s Chief Executive Officer, the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~September~~June 30, ~~2017,~~2020, have been evaluated, and, based upon this evaluation, the Company’s Chief Executive Officer has concluded that these controls and procedures are not effective in providing reasonable assurance of compliance.

Changes in Internal Control over Financial Reporting

Management ~~and directors~~ will continue to monitor and evaluate the effectiveness of the Company's internal controls and procedures and the Company's internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. There were no changes in Internal Control ~~over~~Over Financial Reporting during the quarter ended ~~September~~June 30, ~~2017.~~2020.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company may be involved in litigation relating to claims arising out of commercial operations in the normal course of business. As of ~~September~~June 30, ~~2017,~~2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations.

In April of 2019, the staff (the “Staff”) of the SEC’s Division of Enforcement notified the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company, as well as against its CEO and its CFO, for alleged violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder during the period from early 2014 through late 2016. The Staff’s notice is not a formal allegation or a finding of wrongdoing by the Company, and the Company has communicated with the Staff regarding its preliminary determination. The Company believes it has adequate defenses and intends to vigorously defend any enforcement action that may be initiated by the SEC.

ITEM 1A. RISK FACTORS

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~On July 18, 2017,~~During the three months ended June 30, 2020, the Company issued ~~250,000 common shares to a third-party consultant~~unregistered equity securities as ~~a second quarterly payment a consulting agreement executed in April of 2017.~~described below:

On April 1, 2020, the Company issued 972,000 shares of Company common stock as additional consideration to six third-party investors in the Company’s prior convertible promissory note offering for their election, during the prior quarter, to convert $1,080,000 in principal owing to them under the prior notes maturing August 31, 2020, into Company convertible promissory notes maturing February 11, 2022.

On April 7, 2020, the Company issued (i) 1,311,343 shares of Company common stock, and (ii) $874,228.94 in convertible promissory notes maturing February 11, 2022, to four third-party investors in consideration of the investors’ cancellation of $774,500.00 in prior convertible promissory notes maturing August 31, 2020, accrued interest of $49,314.76 and cash in the amount of $50,414.18.

On April 8, 2020, the Company issued (i) 300,000 shares of Company common stock, and (ii) a $200,000 convertible promissory note maturing February 11, 2022, to a third-party investor in consideration of the investor’s cancellation of a $186,300 prior convertible promissory note maturing August 31, 2020 and accrued interest of $13,700.00.

On May 1, 2020, the Company issued (i) 120,000 shares of Company common stock, and (ii) a $80,000 convertible promissory note maturing February 11, 2022, to a third-party investor in consideration for cash in the amount of $80,000.

On May 12, 2020, the Company issued (i) 18,000 shares of Company common stock, and (ii) a $12,000 convertible promissory note maturing February 11, 2022, to a third-party investor in consideration of the investor’s cancellation of a $11,025 prior convertible promissory note maturing August 31, 2020 and accrued interest of $975.00.

On June 29, 2020, the Company issued (i) 15,375 shares of Company common stock, and (ii) a $10,125 convertible promissory note maturing February 11, 2022, to a third-party investor in consideration of the investor’s cancellation of a $10,125 prior convertible promissory note maturing August 31, 2020.

~~On August 4, 2017, the Company issued 154,688 common shares to a third-party consultant for services.~~

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On June 30, 2020, the Company issued (i) 786,300 shares of Company common stock, and (ii) $524,200 in convertible promissory notes maturing February 11, 2022, to three third-party investors in consideration of the investors’ cancellation of $524,200 in prior convertible promissory notes maturing August 31, 2020.

The issuances of the foregoing shares were made in reliance on the exemptions from registration provided by either (i) Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as each of the investors were prior investors of the Company, there was no general solicitation to the investors, the investors were accredited, and the transactions with the investors did not involve a public offering; or (ii) Rule 506(c) promulgated under Section 4(a)(2) as the investors were accredited.

On April 16, 2020, the Company issued 1,300,000 shares of Company common stock to a consultant for $143,130 of consulting services rendered to the Company. On May 8, 2020, the Company issued 250,000 shares of Company common stock to a consultant for $25,850 of consulting services rendered to the Company. On June 30, 2020, the Company issued 172,500 shares of Company common stock to a consultant for $28,652 of consulting services rendered to the Company. The issuances of the foregoing shares were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation to the consultants, the consultants were accredited, and the transactions with the investors did not involve a public offering.

On April 27, 2020, May 8, 2020, May 22, 2020, June 18, 2020, and June 25, 2020, the Company issued 1,118,877 shares, 1,179,591 shares, 1,076,056 shares, 949,512 shares, and 701,966 shares, respectively, of Company common stock to a lender in lieu of making weekly payments of approximately $60,107 to the lender. The Company then paid in full its obligations to the lender in the aggregate amount of $6,147,434, by (i) making a $4,000,000 cash payment to the lender on June 26, 2020, and (ii) issuing the lender on June 30, 2020, 12,928,563 shares of Company common stock at a fair value of $2,147,434. The issuances of the foregoing shares to the lender were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation to the lender, the lender was accredited, and the transactions with the lender did not involve a public offering.

On May 11, 2020, May 19, 2020, June 8, 2020, June 8, 2020, and June 17, 2020, the Company issued 500,000 shares, 250,000 shares, 250,000 shares, 250,000 shares, and 500,000 shares, respectively, of Company common stock to five lenders as partial consideration of the lenders making non-convertible bridge loans to the Company in the amounts of $100,000, $50,000, $50,000, $50,000, and $100,000, respectively. The issuances of these shares were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation to the lenders, the lenders were accredited, and the transactions with the lenders did not involve a public offering.

On June 30, 2020, the Company issued 8,196,721 to a lender in consideration of the lender’s $1,000,000 reduction in principal owing to the lender by the Company. The issuance of these shares was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder, as there was no general solicitation to the lenders, the lenders were accredited, and the transactions with the lenders did not involve a public offering.

~~During July and August of 2017, pursuant to a private placement, the Company issued 590,000 common shares to various third-party investors concurrently with raising $1,475,000.~~

~~During August and September of 2017, pursuant to a separate private placement, the Company issued 1,837,500 common shares to various third-party investors concurrently with raising $1,225,000.~~

~~On August 30, 2017, the Company issued 176,258 common shares to a third-party consultant for services~~

~~On September 30, 2017, the Company issued 612,500 common shares to a third-party placement agent for services.~~

The share issuances described above were issued pursuant to exemptions from registration requirements relying on Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506 of Regulation D promulgated thereunder as there was no general solicitation, and the transactions did not involve a public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

~~None.~~

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ITEM 6. EXHIBITS

~~ITEM 6.~~ ~~EXHIBITS~~

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10.7		10% Secured Promissory Note, dated December 27, 2018, issued by Viking Energy Group, Inc. to RPM Investments, a Division of Opus Bank, in favor of Sellers (incorporated by reference to our Current Report on Form 8-K filed on December 31, 2018)

~~10.7~~10.8		Security and Pledge Agreement, executed as of December 27, 2018, by and among Viking Energy Group, Inc. and Bodel Holdings, L.L.C., Cleveland Holdings, L.L.C., Delbo Holdings, L.L.C., DeQuincy Holdings, L.L.C., Gulf Coast Working Partners, L.L.C., Oakley Holdings, L.L.C., SamJam Energy, L.L.C., and Perry Point Holdings, L.L.C. (incorporated by reference to our Current Report on Form 8-K filed on December 31, 2018)

10.9		~~Acknowledgment~~Purchase and Sale Agreement, dated as of October 10, 2019, by and among Elysium Energy, LLC, 5Jabor, LLC, Bass Petroleum, L.L.C., Bodel Holdings, LLC, Delbo Holdings, L.L.C., James III Investments, L.L.C., JamSam Energy, LLC, Lake Boeuf Investments, LLC, Oakley Holdings, L.L.C., and Plaquemines Holdings, L.L.C. (incorporated by reference to our Current Report on Form 8-K filed on October 11, 2019)

10.10		First Amendment to Purchase and Sale Agreement, effective as of December 23, 2019, by and among 5Jabor, LLC; Bass Petroleum, L.L.C.; Bodel Holdings, LLC; Delbo Holdings, L.L.C.; James III Investments, LLC; JamSam Energy, L.L.C.; Lake Boeuf Investments, LLC; Oakley Holdings, L.L.C.; Plaquemines Holdings, L.L.C.; Elysium Energy, LLC; Viking Energy Group, Inc. and Five JAB, Inc. (incorporated by reference to our Current Report on Form 8-K filed on December 30, 2019)

10.11		Second Amendment to Purchase and Sale Agreement and Waiver, effective as of February 2, 2020, by and among 5Jabor, LLC; Bass Petroleum, L.L.C.; Bodel Holdings, LLC; Delbo Holdings, L.L.C.; James III Investments, LLC; JamSam Energy, L.L.C.; Lake Boeuf Investments LLC; Oakley Holdings, L.L.C.; Plaquemines Holdings, L.L.C. and Elysium Energy, LLC (incorporated by reference to our Current Report on Form 8-K filed on February 6, 2020)

10.12		Term Loan Agreement, dated as of February 3, 2020, by and among Elysium Energy Holdings, LLC; Elysium Energy, LLC; Elysium Energy LA, LLC; Elysium Energy TX, LLC; Pointe a la Hache, L.L.C.; Turtle Bayou, L.L.C.; Potash, L.L.C.; Ramos Field, L.L.C.; 405 Woodbine LLC, as Administrative Agent, and the Lenders signatory thereto. (incorporated by reference to our Current Report on Form 8-K filed on February 6, 2020)

10.13		Security Agreement, dated as of February 3, 2020, by and among Elysium Energy, LLC; Elysium Energy LA, LLC; Elysium Energy TX, LLC; Pointe a la Hache, L.L.C.; Turtle Bayou, L.L.C.; Potash, L.L.C.; Ramos Field, L.L.C. and 405 Woodbine LLC (incorporated by reference to our Current Report on Form 8-K filed on February 6, 2020)

10.14		Guarantee and Pledge Agreement, dated as of February 3, 2020, by Elysium Energy Holdings, LLC and 405 Woodbine LLC (incorporated by reference to our Current Report on Form 8-K filed on February 6, 2020)

10.15		Securities Purchase Agreement, dated as of February 3, 2020, by and between Viking Energy Group, Inc. and Camber Energy, Inc. (incorporated by reference to our Current Report on Form 8-K filed on February 5, 2020)

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10.16	$5,000,000 10.5% Secured Promissory Note, dated as of February 3, 2020, Issued by Viking Energy Group, Inc. to Camber Energy, Inc. (incorporated by reference to our Current Report on Form 8-K filed on February 5, 2020)

10.17	Security and Pledge Agreement, dated as of February 3, 2020, by and between Viking Energy Group, Inc. and Camber Energy, Inc. (incorporated by reference to our Current Report on Form 8-K filed on February 5, 2020)

10.18	Security and Pledge Agreement, dated as of February 3, 2020, by and between Viking Energy Group, Inc. and Camber Energy, Inc. (incorporated by reference to our Current Report on Form 8-K filed on February 5, 2020)

10.19	Assignment of Membership Interests by Viking Energy Group, Inc. in favor of Camber Energy, Inc. dated February 3, 2020 (incorporated by reference to our Current Report on Form 8-K filed on February 5, 2020)

10.20	Employment Agreement with Mark Finckle dated as of September 9, 2019 (incorporated by reference to our Quarterly Report on Form 10-Q filed on ~~May 15, 2017)~~November 12, 2019)

~~10.8~~10.21	~~Purchase and Sale~~Restricted Stock Agreement ~~(incorporated~~with Mark Finckle dated as of September 9, 2019 (incorporated by reference to our ~~Current~~Quarterly Report on Form ~~8-K~~10-Q filed on ~~September~~November 12, ~~2017)~~2019)

~~10.9~~21.1*	~~Purchase and Sale Agreement~~ ~~(incorporated~~Subsidiaries of Viking Energy Group, Inc. (incorporated by reference to our ~~Current~~Annual Report on Form ~~8-K~~10-K filed on ~~October 3, 2017)~~March 30, 2020)
~~10.10~~		~~Purchase and Sale Agreement~~ ~~(incorporated by reference to our Current Report on Form 8-K filed on October 4, 2017)~~
31.1*	Certification of Principal Executive Officer ~~and~~required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*	Certification of Principal Financial and Accounting Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63

32.2*	Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63
101.INS*
101.INS**	XBRL Instance Document
101.SCH*
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL*
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

________

* Filed ~~herewith.~~herewith

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

ITEM 7. OFF BALANCE-SHEET ARRANGEMENTS

None.

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SIGNATURES

In accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VIKING ENERGY GROUP, INC.
(Registrant)

Date: ~~November 14, 2017~~August 19, 2020
~~By:~~
/s/James Doris

Principal Executive Officer ~~and~~
Date: August 19, 2020
/s/ Frank W. Barker, Jr.
Principal Financial and
Accounting Officer

Nevada		98-0199508
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Large Accelerated Filer	¨☐	Accelerated Filer	¨☐
Non-Accelerated Filer	¨☒	Smaller Reporting Company	x☒
		Emerging Growth Company	☐

Part I – Financial Information

Item 1	Financial Statements	4
	Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019	4
	Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019 (unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited)	6
	Consolidated Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2020 and 2019 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4	Controls and Procedures	34

Part II – Other Information

Item 1	~~Financial Statements~~	3
	~~Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016~~	3
	~~Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2017 and 2016 (unaudited)~~	4
	~~Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 (unaudited)~~	5
	~~Consolidated Statements of Changes in Stockholders’ Deficit (unaudited)~~	6
	~~Notes to Consolidated Financial Statements (unaudited)~~	7
~~Item 2~~	~~Management’s Discussion and Analysis or Plan of Operation~~	23
~~Item 3~~	~~Quantitative and Qualitative Disclosures about Market Risk~~	27
~~Item 4~~	~~Controls and Procedures~~	28

~~Part II – Other Information~~

~~Item 1~~	Legal Proceedings	2835
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	2835
Item 3	Defaults Upon Senior Securities	2836
Item 4	Mine Safety Disclosures	2836
Item 5	Other Information	2836
Item 6	Exhibits	2937

	Nine Months Ended
	September 30,
	2017			2016

Cash flows from operating activities:
Net loss	$	(2,667,714	)	$	(2,102,462	)
Adjustments to reconcile net loss to cash used in operating activities:
Derivative gain		(495,468	)		(833,418	)
Amortization of prepaid expenses		180,983			-
Stock based compensation		1,304,175			578,363
Stock based interest payment					52,500
Loss on sale of investments		7,185			-
Depreciation, depletion and amortization		146,602			77,625
Accretion – Asset retirement obligation		29,167			15,513
Amortization of debt discount		817,431			1,626,062
Changes in operating assets and liabilities
Accounts receivable		2,919			(11,947	)
Accounts payable		(5,480	)		(89,282	)
Accrued expenses and other current liabilities		90,975			151,862
Amounts due to directors		121,755			197,280
Net cash used in operating activities		(467,470	)		(337,904	)

Cash flows from investing activities:
Purchase of oil and gas properties		(360,000	)		(1,350,000	)
Proceeds from sale of investments		101,191			-
Net cash used in investing activities		(258,809	)		(1,350,000	)

Cash flows from financing activities:
Proceeds from amount due to directors		5,350			-
Repayment of amount due to directors		(348,438	)		(56,056	)
Proceeds from sale of common stock		331,667			388,125
Common stock issuance costs		-			(37,500	)
Proceeds from long term debt		3,288,650			2,021,875
Debt issuance costs		(216,000	)		-
Repayment of long term debt		(1,785,333	)		(570,500	)
Net cash provided by financing activities		1,275,896			1,745,944

Net increase in cash		549,617			58,040
Cash, beginning of period		18,605			30,585

Cash, end of period	$	568,222		$	88,625
Supplemental Cash Flow Information:
Cash paid for:
Interest	$	209,307		$	125,431
Income taxes	$	-		$	-

Supplemental disclosure of Non-Cash Investing and Financing Activities:
Conversion of convertible note payable	$	-		$	6,778
Issuance of shares for oil and gas property acquisition	$	-		$	820,250
Issuance of warrants for 4,062,500 common shares as debt discount	$	-		$	416,315
Loan from director to pay convertible debt	$	-		$	100,000
Issuance of shares as deposit for oil and gas property acquisition	$	-		$	288,000
Prepayment of contract through amounts due directors	$	100,000		$	-
Long term debt paid through amounts due directors	$	104,904		$	-
Issuance of shares for contract services	$	700,920		$	-
Sale of shares through satisfaction of unrelated notes payable	$	127,215		$	-
Accrued expenses exchanged for long term debt	$	9,500		$	-
Increase in oil and gas properties due to asset retirement obligation	$	205,048		$	-
Issuance of shares and warrants as discount on debt	$	684,411		$	-

																					Accumulated
															Additional			Prepaid			Other						Total
	Common Stock						Shares to be Issued				Preferred Stock				Paid-in			Equity-Based			Comprehensive			Accumulated			Stockholders'
	Number			Amount			Number		Amount		Number		Amount		Capital			Compensation			Loss			Deficit			Deficit

Balances at December 31, 2015		30,333,993		$	30,334			-	$	-		28,092	$	28	$	7,960,372		$	(145,562	)	$	(158,424	)	$	(8,964,441	)	$	(1,277,693	)
Shares issued in satisfaction of debt		300,926			301											9,810												10,111
Derivative liability adjustments - satisfaction of convertible debt																685,668												685,668
Shares issued for consulting services		1,315,000			1,315											164,185												165,500
Shares issued in acquisition of oil and gas properties		14,862,021			14,862											1,430,829												1,445,691
Shares issued as prepaid equity-based compensation		5,000,000			5,000											795,000			(800,000	)								-
Cancellation of shares issued as prepaid equity-based compensation		(4,000,000	)		(4,000	)										(636,000	)		640,000									-
Sale of stock		2,841,667			2,842											423,408												426,250
Capital issuance costs																(37,500	)											(37,500	)
Shares issued as payment for interest expense		1,931,250			1,931											324,444												326,375
Shares issued as additional discount on debt		508,335			508											75,742												76,250
Warrants issued for services																330,889												330,889
Amortization of prepaid equity-based compensation																			270,494									270,494
Unrealized gain (loss) on securities held for sale																						156,978						156,978
Net loss for the year ended December 31, 2016																									(5,445,187	)		(5,445,187	)
Balances at December 31, 2016		53,093,192		$	53,093			-	$	-		28,092	$	28	$	11,526,847		$	(35,068	)	$	(1,446	)	$	(14,409,628	)	$	(2,866,174	)
Shares issued for consulting services		2,892,889			2,894											478,739												481,633
Shares issued as prepaid equity-based compensation		4,135,000			4,135											833,411			(837,546	)								-
Sale of stock		3,059,442			3,059											455,858												458,917
Derivative liability adjustments - satisfaction of convertible debt																35,232												35,232
Amortization of prepaid equity-based compensation																			822,542									822,542
Unrealized gain (loss) on securities held for sale																						1,446						1,446
Shares and warrants issued as discount on new debt		3,040,000			3,040											681,371												684,411
Net loss for the nine months ended September 30, 2017																									(2,667,714	)		(2,667,714	)
Balances at September 30, 2017		66,220,523		$	66,221			-	$	-		28,092	$	28	$	14,011,458		$	(50,072	)	$	-		$	(17,077,342	)	$	(3,049,707	)

	September 30, 2017		December 31, 2016

In March 2016, three one-year consulting agreements with three unrelated parties for services related to the petroleum industry for a combined total amount of $800,000.		-		35,068

In February 2017, a one-year consulting agreement for services related to investor relations, market exposure and content development for a total amount of $44,160.		17,543		-

In April 2017, a one-year consulting agreement comprised of four quarterly incremental installments for services related to analysis of potential oil and gas acquisitions, for an initial quarterly amount of $40,250. In July 2017, the second quarterly installment was made in the amount of $28,000.		5,478		-

In June 2017, a six-month consulting agreement for services related to investor relations and social media for a total amount of $65,136.		27,051		-

	$	50,072	$	35,068

Oil and Gas Properties by Geographical Cost Center
	Three months ended				Nine months ended,
	September 30,				September 30,
Cost Center	2017		2016		2017		2016

Canada	$	21,073		6,860	$	38,301	$	12,272
United States		38,638		22,149		108,301		65,353

	$	59,711	$	29,009	$	146,602	$	77,625

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value

Warrants Outstanding – December 31, 2016		5,720,834		0.19	3.6 years			-
Granted		1,475,000		0.30		-		-
Exercised		-		-		-		-
Forfeited/expired/cancelled		-				-		-
Warrants Outstanding – September 30, 2017		7,195,834	$	0.21		3.8 years	$	-
Outstanding Exercisable – December 31, 2016		5,720,834	$	0.19		3.6 years	$	-
Outstanding Exercisable – September 30, 2017		7,195,834	$	0.21		3.8 years	$	-

	December 31, 2016			Additions			Impairments		September 30, 2017

Proved developed producing oil and gas properties
Canada cost center	$	34,733		$	-		$	-	$	34,733
United States cost center		1,787,840			565,048			-		2,352,888
Accumulated depreciation, depletion and amortization		(57,200	)		(75,496	)		-		(132,696	)
Proved developed producing oil and gas properties, net	$	1,765,373		$	489,552		$	-	$	2,254,925

Undeveloped and non-producing oil and gas properties
Canada cost center	$	371,481		$	-		$	-	$	371,481
United States cost center		917,184			-			-		917,184
Accumulated depreciation, depletion and amortization		(51,176	)		(71,106	)		-		(122,282	)
Undeveloped and non-producing oil and gas properties, net	$	1,237,489		$	(71,106	)	$	-	$	1,166,383

Total Oil and Gas Properties, Net	$	3,002,862		$	418,446		$	-	$	3,421,308

	December 31, 2015			Additions			Impairments			December 31, 2016

Proved developed producing oil and gas properties
Canada cost center	$	33,082		$	1,651		$	-		$	34,733
United States cost center		-			2,838,943			(1,051,103	)		1,787,840
Accumulated depreciation, depletion and amortization		(2,093	)		(55,107	)		-			(57,200	)
Proved developed producing oil and gas properties, net	$	30,989		$	2,785,487		$	(1,051,103	)	$	1,765,373

Undeveloped and non-producing oil and gas properties
Canada cost center	$	518,269		$	(1,652	)	$	(145,136	)	$	371,481
United States cost center		-			1,456,414			(539,230	)		917,184
Accumulated depreciation, depletion and amortization		(32,788	)		(43,464	)		25,076			(51,176	)
Undeveloped and non-producing oil and gas properties, net	$	485,481		$	1,411,298		$	(659,290	)	$	1,237,489

Total Oil and Gas Properties, Net	$	516,470		$	2,092,625		$	(1,710,393	)	$	3,002,862

	September 30, 2017			December 31, 2016

On February 19, 2016, the Company issued a total of $1,625,000 15% convertible notes with a term expiring August 18, 2016 (the “Maturity Date”). The principal amounts of each note and interest is payable on the maturity date. Placement fees of $145,000 were subtracted from proceeds. The notes are convertible into common stock at any time, at the holder’s option, the conversion price shall be the lowest of (i) $0.15, (ii) 58% of the price of the Company’s securities that are sold in any offering of the Company’s securities in excess of $100,000, of (iii) the conversion price of any Equity converted on or prior to the Conversion Date.		-			125,000

On April 29, 2016, the Company issued a total of $375,000 of 10% Secured Subordinated promissory notes with a term expiring January 12, 2017 (the “Maturity Date”), and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the Maturity Date. The balance shown is net of unamortized discount of $8,824 at December 31, 2016.		-			366,176

On July 27, 2016, the Company issued a promissory note in the amount of $20,000, bearing interest at 12%, with an initial maturity date of August 27, 2016, and a provision for an extension of six additional terms of 30 days.		-			20,000

As of December 31, 2016, the Company issued a total of $630,000 of 10% Secured promissory notes with a term expiring April 3, 2017 (the “Maturity Date”), and an original issue discount of thirty-seven and one-half percent (37.5%). The discount was modified to fifty percent (50%) retroactively with an extension of the maturity to June 2017. During the quarter ended March 31, 2017, the Company issued an additional $917,833 of 10% Secured promissory notes with terms expiring in June, August and September of 2017, and an original issue discount of fifty percent (50%). Interest is payable on the outstanding principal of these notes at 10% per annum on the various maturity dates. The balance shown is net of unamortized discount of $0 and $208,064 at September 30, 2017 and December 31, 2016 respectively. At September 30, 2017, the funds necessary to satisfy this obligation are being held in escrow awaiting disbursement instructions from the estate of the noteholder.		75,000			421,936

On October 4, 2016, the Company issued a non-interest-bearing note, payable on demand in the amount of $203,000. This amount has been paid in full as of November 1, 2017.		203,000			203,000

On October 4, 2016, the Company closed on a revolver loan with Crossfirst Bank in the amount of $1,800,000, payable at $15,000 per month, interest at 10%, with all unpaid principal and accrued interest payable on September 30, 2018. The balance shown is net of unamortized discount of $13,826 and $24,167 at September 30, 2017 and December 31, 2016 respectively.		1,621,174			1,745,833

During July and August of 2017, the Company borrowed $1,475,000 from private lenders pursuant to a 10% Secured Convertible Promissory Note with a twelve-month maturity. The balance shown is net of unamortized discount of $400,710 and $0 at September 30, 2017 and December 31, 2016 respectively.		1,074,290			-

During August and September of 2017, the Company borrowed $1,225,000 from private lenders pursuant to a 10% Secured Promissory Note with all principal and accrued interest payable on the maturity date of October 31, 2018. The balance shown is net of unamortized discount of $368,415 and $0 at September 30, 2017 and December 31, 2016 respectively.		856,585			-

On September 8, 2017, the Company closed on a Promissory Note with Cornerstone Bank in the amount of $256,983, payable interest only for the first twelve months commencing October 8, 2017, variable interest rate, currently at 5.5%, followed by 83 monthly payments of $3,765, interest at 6%, final payment due on September 8, 2025.		256,983			-
		4,087,032			2,881,945
Less current portion		(1,518,464	)		(1,302,476	)
	$	2,568,568		$	1,579,469

Number	Description

2.1	Agreement and Plan of Merger, dated as of February 3, 2020, by and between Viking Energy Group, Inc. and Camber Energy, Inc. (incorporated by reference to our Current Report on Form 8-K filed on February 5, 2020)

3.1	Articles of Incorporation (incorporated by reference to our Definitive Information Statement on Schedule 14C filed on October 14, 2008)

3.2	Bylaws (incorporated by reference to our Definitive Information Statement on Schedule 14C filed on October 14, 2008)

3.3	Certificate of Amendment to Articles of Incorporation (incorporated by reference to our ~~Definitive Information Statement~~Current Report on ~~Schedule 14C~~Form 8-K filed on ~~May 23, 2012)~~November 6, 2018)

3.4	Certificate of Amendment to Designation - After Issuance of Class or Series (incorporated by reference to our Current Report on Form 8-K filed on September 5, 2019)

10.1	Term Loan Agreement, dated December 22, 2017, by the Borrowers listed therein, 405 Petrodome LLC, as Administrative Agent, and 405 Petrodome LLC and Cargill, Incorporated, as Lenders (incorporated by reference to our Current Report on Form 8-K filed on December 29, 2017)

10.2	Purchase and Sale ~~Petroleum~~Agreement, executed as of September 1, 2018, by and ~~Natural Gas Conveyance~~among Viking Energy Group, Inc. and Bodel Holdings, L.L.C., Cleveland Holdings, L.L.C., Delbo Holdings, L.L.C., DeQuincy Holdings, L.L.C., Gulf Coast Working Partners, L.L.C., Oakley Holdings, L.L.C., SamJam Energy, L.L.C., and Perry Point Holdings, L.L.C. (incorporated by reference to our Current Report on Form 8-K filed on September 5, 2018)

10.3	First Amendment to Purchase and Sale Agreement, ~~with Tanager~~executed as of November 1, 2018, by and among Viking Energy Group, Inc. ~~dated November 3, 2014~~and Bodel Holdings, L.L.C., Cleveland Holdings, L.L.C., Delbo Holdings, L.L.C., DeQuincy Holdings, L.L.C., Gulf Coast Working Partners, L.L.C., Oakley Holdings, L.L.C., SamJam Energy, L.L.C., and Perry Point Holdings, L.L.C. (incorporated by reference to our Current Report on Form 8-K filed on November ~~10, 2014)~~5, 2018)
~~10.2~~		~~Purchase, Sale and Capital Contribution Agreement~~ ~~(incorporated by reference to our Annual Report on Form 10-K/A filed on May 16, 2016)~~
~~10.3~~	~~Purchase, Sale and Capital Contribution Agreement~~ ~~(incorporated by reference to our Quarterly Report on Form 10-Q filed on May 15, 2017)~~
10.4	Second Amendment to Purchase and Sale Agreement, executed as of November 1, 2018, by and ~~Capital Contribution Agreement~~ ~~(incorporated~~among Viking Energy Group, Inc. and Bodel Holdings, L.L.C., Cleveland Holdings, L.L.C., Delbo Holdings, L.L.C., DeQuincy Holdings, L.L.C., Gulf Coast Working Partners, L.L.C., Oakley Holdings, L.L.C., SamJam Energy, L.L.C., and Perry Point Holdings, L.L.C. (incorporated by reference to our ~~Quarterly~~Current Report on Form ~~10-Q~~8-K filed on ~~May 15, 2017)~~December 31, 2018)

10.5	Collateral Agreement to Purchase and Sale Agreement, executed as of December 26, 2018, by and ~~Capital Contribution Agreement~~ ~~(incorporated~~among Viking Energy Group, Inc. and Bodel Holdings, L.L.C., Cleveland Holdings, L.L.C., Delbo Holdings, L.L.C., DeQuincy Holdings, L.L.C., Gulf Coast Working Partners, L.L.C., Oakley Holdings, L.L.C., SamJam Energy, L.L.C., and Perry Point Holdings, L.L.C. (incorporated by reference to our ~~Quarterly~~Current Report on Form ~~10-Q~~8-K filed on ~~May 15, 2017)~~December 31, 2018)

10.6	~~Purchase, Sale~~Term Loan Credit Agreement, dated as of December 28, 2018, by and ~~Capital Contribution Agreement~~ ~~(incorporated~~among Ichor Energy Holdings, LLC, Ichor Energy, LLC, ABC Funding, LLC, as Administrative Agent, and the Lender Parties (incorporated by reference to our ~~Quarterly~~Current Report on Form ~~10-Q~~8-K filed on ~~May 15, 2017)~~December 31, 2018)

	VIKING ENERGY GROUP, INC. (Registrant)

Date: ~~November 14, 2017~~August 19, 2020	~~By:~~	/s/James Doris
		Principal Executive Officer ~~and~~


Date: August 19, 2020		/s/ Frank W. Barker, Jr.
		Principal Financial and Accounting Officer