Delaware | | | 1311 | | | 87-0267438 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Kristin L. Lentz Davis Graham & Stubbs 1550 17th Street, Suite 500 Denver, Colorado 80202 (303) 892-7334 | | | Amy R. Curtis Thompson & Knight LLP 1722 Routh Street, Suite 1500 Dallas, Texas 75201 (214) 969-1763 | | | Beth di Santo, Esq. di Santo Law PLLC 171 Christopher Street New York, New York 10014 (212) 766-2466 |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☐ |
Non-accelerated filer | | | ☐ | | | Smaller reporting Company | | | ☒ |
| | | | Emerging growth company | | | ☐ |
Title of Each Class of Securities to be Registered | | | Amount to be Registered(1) | | | Proposed Maximum Offering Price Per Share(2) | | | Proposed Maximum Aggregate Offering Price(3) | | | Amount of Registration Fee(4) |
Common stock, par value $0.001 per share | | | 203,039,549 | | | N/A | | | $236,210,012 | | | $25,770.52 |
Michael J. Rugen Chief Executive Officer Tengasco, Inc. | | | Bobby D. Riley Chief Executive Officer Riley Exploration – Permian, LLC |
1) | Proposal to approve and adopt the merger agreement, a copy of which is attached as Annex A to this proxy statement/prospectus, and the transactions contemplated thereby, including the merger and the issuance of shares of TGC common stock pursuant to the terms of the merger agreement, in an amount necessary to complete the merger (the “TGC share issuance proposal”). |
2) | Proposal to approve and adopt an amendment to TGC’s amended and restated certificate of incorporation (which we refer to as the “TGC charter”) to increase the number of authorized shares of TGC common stock from 100 million to 240 million, which will be effective upon the closing of the merger (or shortly prior to such closing) (the “TGC share increase proposal”). |
3) | Proposal to approve and adopt an amendment to the TGC charter to change the corporate name of TGC from “Tengasco, Inc.” to “Riley Exploration Permian, Inc.” (the “TGC name change proposal”). |
4) | Proposal to approve and adopt an amendment to the TGC charter to effect a reverse stock split of TGC’s outstanding common stock in a ratio of between one-for-eight and one-for-twelve (the “reverse stock split”), in the sole discretion of the board of directors of TGC and to be mutually agreed to between TGC and REP, prior to the effectiveness of the merger (the “TGC reverse split proposal”). |
5) | Proposal to approve and adopt an amendment to the TGC charter to effect a waiver of corporate opportunities that could be owed to TGC by investment funds sponsored or managed by Yorktown Partners LLC, Bluescape Riley Exploration Holdings LLC and Boomer Petroleum, LLC, which will be effective upon the closing of the merger (or shortly prior to such closing) (the “TGC corporate opportunities proposal”). |
6) | Proposal to approve and adopt an amendment to the TGC charter to effect a requirement that the holders of at least 66 2/3% in voting power of the outstanding shares of stock of TGC entitled to vote thereon are required to approve amendments to the TGC charter after a certain date (the “TGC charter amendments provision proposal”). |
7) | Proposal to approve an amendment to TGC’s amended and restated bylaws (which we refer to as the “TGC bylaws”) to effect a requirement that the holders of at least 66 2/3% in voting power of the outstanding shares of stock of TGC entitled to vote thereon are required to approve amendments to the TGC bylaws after a certain date (the “TGC bylaws amendments provision proposal”). |
8) | Proposal to approve and adopt the Riley Exploration Permian, Inc. 2021 Long Term Incentive Plan (the “TGC equity plan proposal”). |
9) | Proposal to approve, on a non-binding advisory basis, the compensation that may become payable to TGC’s named executive officers in connection with the completion of the merger (the “TGC compensation proposal”). |
10) | Proposal to adjourn the TGC special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the TGC share issuance proposal, TGC share increase proposal, TGC name change proposal, TGC reverse split proposal, TGC corporate opportunities proposal, TGC charter amendments provision proposal, TGC bylaws amendments provision proposal, TGC equity plan proposal or to ensure that any supplement or amendment to the accompanying proxy statement/prospectus is timely provided to TGC stockholders (the “TGC adjournment proposal”). |
| | Page | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
EXHIBIT INDEX | | | |
SIGNATURES | | |
Q: | What is the merger? |
A: | TGC, Merger Sub and REP have entered into the merger agreement. The merger agreement contains the terms and conditions of the proposed business combination of TGC and REP. Under the merger agreement, Merger Sub will merge with and into REP, with REP continuing as a wholly owned subsidiary of TGC and the surviving company of the merger. |
Q: | What will happen to TGC if, for any reason, the merger does not close? |
A: | If, for any reason, the merger does not close, the TGC board of directors may elect to, among other things, attempt to complete another strategic transaction like the merger, attempt to sell or otherwise dispose of the various assets of TGC or continue to operate the business of TGC. |
Q: | Why are the two companies proposing to merge? |
A: | REP and TGC believe that the merger will result in a new breed of exploration and production companies that offers a mix of assets that provides for strong capital efficiency and optionality for our stakeholders. For a discussion of TGC’s and REP’s reasons for the merger, please see the section titled “The Merger-TGC Reasons for the Merger” and “The Merger-REP Reasons for the Merger” in this proxy statement/prospectus. |
Q: | Why am I receiving this proxy statement/prospectus? |
A: | You are receiving this proxy statement/prospectus because you have been identified as a TGC stockholder or an REP member as of the applicable record date, and you are entitled, as applicable, to (i) vote at the TGC special meeting to approve the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of TGC common stock pursuant to the merger agreement, or (ii) sign and return the REP written consent to adopt the merger agreement and approve the transactions contemplated thereby, including the merger. This document serves as: |
Q: | What will REP members receive in the merger? |
A: | As of the date of the execution of the merger agreement, it was estimated that immediately after the consummation of the merger, based on the Exchange Ratio of 97.796467, REP members as of immediately prior to the merger will collectively own approximately 95% and TGC stockholders as of immediately prior to the merger will own approximately 5% of the outstanding shares of common stock of the combined company. |
Q: | Who will be the directors of TGC following the merger? |
A: | Following the consummation of the merger, the size of the TGC board of directors will be increased to a total of five directors. |
Name | | | Current Principal Affiliation |
Michael J. Rugen | | | Tengasco, Inc., Chief Financial Officer/Interim Chief Executive Officer |
Bobby D. Riley | | | Riley Exploration – Permian, LLC, Chief Executive Officer |
Bryan H. Lawrence | | | Yorktown Partners, LLC, Managing Member |
| | ||
| | Chairman and Chief Investment Officer of Hollow Brook Wealth Management, LLC |
Q: | Who will be the executive officers of TGC immediately following the merger? |
A: | Immediately following the consummation of the merger, the executive management team of TGC is expected to be composed as follows: |
Name | | | Title |
Bobby D. Riley | | | Chairman of the Board and Chief Executive Officer |
Kevin Riley | | | President |
Michael J. Rugen | | | Chief Financial Officer |
Corey Riley | | | Executive Vice President Business Intelligence |
Michael Palmer | | | Executive Vice President Corporate Land |
Q: | What are the material U.S. federal income tax consequences of the reverse stock split? |
A: | The reverse stock split is expected to constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a TGC stockholder generally should not recognize gain or loss upon the reverse stock split, except with respect to cash received in lieu of a fractional share of TGC common stock. For more information, please see the section of this proxy statement/prospectus titled “Matters Being Submitted to a Vote of TGC Stockholders-Proposal No. 4: Approval of an Amendment to the Amended and Restated Certificate of Incorporation of TGC Effecting the Reverse Stock Split-Material U.S. Federal Income Tax Consequences of the Reverse Stock Split.” |
Q: | What are the material U.S. federal income tax consequences of the merger to U.S. holders of TGC common stock? |
A: | TGC and REP intend that the merger will qualify as an exchange under Section 351 of the Code. No gain or loss is expected to be recognized by the U.S. holders of TGC common stock as a result of the merger. For a more detailed summary of the material U.S. federal income tax consequences of the merger, see “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page |
Q: | What are the material U.S. federal income tax consequences of the merger to REP members? |
A: | TGC and REP intend that the merger will qualify as an exchange under Section 351 of the Code. As a result, subject to the limitations and qualifications described in “Material U.S. Federal Income Tax Consequences of the Merger,” no gain or loss is expected to be recognized by the U.S. holders of REP common units as a result of the merger, except with respect to any cash received in lieu of any fractional shares of TGC common stock. However, an REP member will recognize taxable gain upon the exchange of REP common units in the merger if and to the extent that the aggregate amount of REP liabilities attributable to the REP common units exchanged by the REP member exceeds their aggregate tax basis in the REP common units exchanged by such REP member. For a more detailed summary of the material U.S. federal income tax consequences of the merger, see “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page |
Q: | As a TGC stockholder, how does the TGC board of directors recommend that I vote? |
A: | After careful consideration, the TGC board of directors recommends that TGC stockholders vote “FOR” all of the proposals. |
Q: | What is the ownership interests of the current directors and officers in TGC? |
A: | As a group, the current directors and officers of TGC beneficially own 5,500,411 shares of TGC’s common stock, which was approximately 51.5% of the shares outstanding as of January 15, 2021. Each of the directors of TGC, consisting of Messrs. Behrent, Salas, and Thon beneficially owned 64,400, 5,298,366, and 32,500 shares of TGC common stock, respectively, which represented less than 1%, approximately 49.6%, and less than 1%, respectively, of the shares outstanding as of January 15, 2021. Each of the officers of TGC, consisting of Messrs. Rugen and Sorensen, beneficially owned 81,522, and 23,623 shares of TGC common stock, respectively, which represented in each case less than 1% of the shares outstanding as of January 15, 2021. |
Q: | As an REP member, how does the REP board of managers recommend that I vote? |
A: | After careful consideration, the REP board of managers recommends that REP members execute the written consent to adopt the merger agreement and approve the merger and the transactions contemplated therein, substantially in accordance with the terms of the merger agreement and the other agreements contemplated by the merger agreement. |
Q: | What risks should I consider in deciding whether to vote in favor of the merger or to execute and return the written consent, as applicable? |
A: | You should carefully review the section of this proxy statement/prospectus titled “Risk Factors,” which sets forth certain risks and uncertainties related to the merger, risks and uncertainties to which the combined company’s business will be subject, and risks and uncertainties to which each of TGC and REP, as independent companies, are subject. |
Q: | Who can vote at the Special Meeting? |
A: | Only TGC stockholders of record at the close of business on [•], |
Q: | How many votes do I have? |
A: | On each matter to be voted upon, you have one vote for each share of TGC common stock you own as of the Record Date. |
Q: | What is the quorum requirement? |
A: | A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority in voting power of the shares of TGC common stock issued and outstanding and entitled to |
Q: | What are “broker non-votes”? |
A: | If you hold shares beneficially in street name and do not provide your broker or other agent with voting instructions, your shares may constitute “broker non-votes.” Broker non-votes occur on a matter when banks, brokers and other nominees are not permitted to vote on certain non-discretionary matters without instructions from the beneficial owner and instructions are not given. These matters are referred to as “non-routine” matters. All of the proposals to be acted on at the TGC special meeting, except for Proposal No. 4 regarding the reverse stock split and Proposal No. 10 regarding the adjournment of the TGC special meeting, are anticipated to be non-routine matters. Proposal Nos. 2, 3, 4, 5, 6 and 7 require the affirmative vote of a majority of the outstanding shares of TGC common stock entitled to vote on the proposal and accordingly broker non-votes with respect to these proposals will have the same effect as a vote “AGAINST” such proposals. Broker non-votes will not be considered votes cast by the holders of all of the shares of TGC common stock present in virtually or by proxy at the TGC special meeting and voting affirmatively or negatively and will therefore not have any effect with respect to Proposal Nos. 1, 8, 9 and 10. |
Q: | What is required to consummate the merger? |
A: | To consummate the merger, TGC stockholders must adopt and approve the merger agreement, thereby approving the merger and the issuance of TGC common stock pursuant to the merger agreement (Proposal No. 1), and REP members must adopt the merger agreement, thereby approving the merger and the other transactions contemplated by the merger agreement. |
Q: | When do you expect the merger to be consummated? |
A: | TGC and REP anticipate that the merger will occur sometime soon after the TGC special meeting to be held on [•], |
Q: | What do I need to do now? |
A: | TGC and REP urge you to read this proxy statement/prospectus carefully, including its annexes, and to consider how the merger affects you. |
Q: | How do TGC stockholders vote and attend the special meeting? |
A: | If you are the “record holder” of shares of TGC common stock, meaning that your shares are registered in your name in the records of TGC’s transfer agent, Continental Stock Transfer & Trust Company: |
Q: | What happens if I do not return a proxy card or otherwise provide proxy instructions, as applicable? |
A: | If you are a TGC stockholder, the failure to return your proxy card or otherwise provide proxy instructions will reduce the aggregate number of votes required to approve Proposal Nos. 1, 8, 9 and 10 and will have the same effect as a vote “AGAINST” Proposal Nos. 2, 3, 4, 5, 6, and 7. |
Q: | How do I attend the Special Meeting of TGC stockholders? |
A: | The TGC special meeting will be held virtually at the following URL address, [•], at [•] a.m., Mountain time, on [•], |
Q: | Why hold the TGC special meeting virtually? |
A: | As part of our effort to maintain a safe and healthy environment for our directors, members of management and stockholders who wish to attend the TGC special meeting, in light of the COVID-19 pandemic, we believe that holding the TGC special meeting virtually is in the best interest of TGC and its stockholders. In addition, we are excited to use the latest technology to provide expanded access, improved communication and cost savings for our stockholders and TGC while providing stockholders the same rights and opportunities to participate as they would have at an in-person meeting. We believe the virtual meeting format enables increased stockholder attendance and participation because stockholders can participate from any location around the world. |
Q: | How do I ask questions if I attend the TGC special meeting virtually? |
A: | If you attend the TGC special meeting virtually, you may only submit questions in the question box provided at [•]. TGC will respond to as many inquiries at the TGC special meeting as time allows. |
Q: | What if during the check-in time or during the TGC special meeting I have technical difficulties or trouble accessing the virtual meeting website? |
A: | TGC will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the TGC special meeting virtually during the check-in or meeting time, please call the technical support number that will be posted on the TGC special meeting website log-in page. |
Q: | May I change my vote after I have submitted a proxy or provided proxy instructions? |
A: | If your shares are registered directly in your name, you may revoke your proxy and change your vote at any time before the vote is taken at the TGC special meeting. To do so, you must do one of the following: |
1. | Vote over the Internet or by telephone as instructed above. Only your latest Internet or telephone vote is counted. |
2. | Sign and return a new proxy card. Only your latest dated and timely received proxy card will be counted. |
3. | Attend the TGC special meeting and vote virtually as instructed above. Simply attending the TGC special meeting will not, by itself, revoke your proxy or change your vote. |
4. | Give TGC’s corporate secretary written notice before or at the meeting that you want to revoke your proxy. |
Q: | Who is paying for this proxy solicitation? |
A: | TGC will pay the cost of printing and filing this proxy statement/prospectus and the proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of TGC common stock for the forwarding of solicitation materials to the beneficial owners of TGC common stock. TGC will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials. |
Q: | Who can help answer my questions? |
A: | If you are a TGC stockholder and would like additional copies, without charge, of this proxy statement/prospectus or if you have questions about the merger, including the procedures for voting your shares, you should contact: |
Name | | | Title |
Bobby D. Riley | | | Chairman of the Board and Chief Executive Officer |
Kevin Riley | | | President |
Michael J. Rugen | | | Chief Financial Officer |
Corey Riley | | | Executive Vice President Business Intelligence |
Michael Palmer | | | Executive Vice President Corporate Land |
Consolidated Statements of Operations (in thousands, except per share data) | | | Six Months Ended June 30, (unaudited) | | Year Ended December 31, | | | Nine Months Ended September 30, (unaudited) | | Year Ended December 31, | ||||||||||||||||||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | 2016 | | 2015 | | | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | 2016 | | 2015 | |||||||||||||
Revenues: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Oil and natural gas sales, net | | 1,526 | | 2,562 | | 4,911 | | 5,871 | | 4,683 | | 4,113 | | 5,631 | | 2,292 | | 3,777 | | 4,911 | | 5,871 | | 4,683 | | 4,113 | | 5,631 | ||||||||||||||
Contract services – related parties | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Total Revenues | | 1,526 | | 2,562 | | 4,911 | | 5,871 | | 4,683 | | 4,113 | | 5,631 | | 2,292 | | 3,777 | | 4,911 | | 5,871 | | 4,683 | | 4,113 | | 5,631 | ||||||||||||||
Costs and Expenses: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Lease operating expenses | | 1,638 | | 1,676 | | 3,368 | | 3,554 | | 3,414 | | 3,046 | | 3,678 | | 2,379 | | 2,582 | | 3,368 | | 3,554 | | 3,414 | | 3,046 | | 3,678 | ||||||||||||||
Gathering, processing & transportation | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Delay rentals | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Production taxes | | 14 | | 15 | | 30 | | 37 | | 30 | | 18 | | 53 | | 20 | | 22 | | 30 | | 37 | | 30 | | 18 | | 53 | ||||||||||||||
Exploration costs | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Depletion, depreciation, amortization and accretion | | 315 | | 380 | | 716 | | 795 | | 862 | | 1,077 | | 2,616 | | 461 | | 566 | | 716 | | 795 | | 862 | | 1,077 | | 2,616 | ||||||||||||||
General and administrative: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Administrative costs | | 632 | | 606 | | 1,285 | | 1,222 | | 1,157 | | 1,388 | | 2,057 | | 1,313 | | 899 | | 1,285 | | 1,222 | | 1,157 | | 1,388 | | 2,057 | ||||||||||||||
Unit-based compensation expense | | 7 | | 10 | | 17 | | 23 | | 14 | | 17 | | 12 | | 11 | | 14 | | 17 | | 23 | | 14 | | 17 | | 12 | ||||||||||||||
Cost of contract services - related parties | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Restructuring costs | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Transaction costs | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Impairment costs | | — | | — | | — | | — | | — | | 2,805 | | 14,526 | | — | | — | | — | | — | | — | | 2,805 | | 14,526 | ||||||||||||||
Total Costs and Expenses | | 2,606 | | 2,687 | | 5,416 | | 5,631 | | 5,477 | | 8,351 | | 22,942 | | 4,184 | | 4,083 | | 5,416 | | 5,631 | | 5,477 | | 8,351 | | 22,942 | ||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||||||||||||
Income (Loss) From Operations | | (1,080) | | (125) | | (505) | | 240 | | (794) | | (4,238) | | (17,311) | | (1,892) | | (306) | | (505) | | 240 | | (794) | | (4,238) | | (17,311) |
Consolidated Statements of Operations (in thousands, except per share data) | | | Six Months Ended June 30, (unaudited) | | | Year Ended December 31, | |||||||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |
Other Income (Expense): | | | | | | | | | | | | | | | |||||||
Interest expense | | | (4) | | | (6) | | | (10) | | | (5) | | | (53) | | | (102) | | | (80) |
Gain on sale of assets | | | 3 | | | 44 | | | 45 | | | 33 | | | 2 | | | 1 | | | 41 |
Other income | | | — | | | — | | | 6 | | | 157 | | | — | | | — | | | — |
Total Other Income (Expense) | | | (1) | | | 38 | | | 41 | | | 185 | | | (51) | | | (101) | | | (39) |
Income (Loss) From Operations Before Income Taxes | | | (1,081) | | | (87) | | | (464) | | | 425 | | | (845) | | | (4,339) | | | (17,350) |
Income tax benefit (expense) | | | — | | | — | | | 28 | | | 17 | | | 242 | | | — | | | (7,351) |
Net Income (Loss) From Continuing Operations | | | (1,081) | | | (87) | | | (436) | | | 442 | | | (603) | | | (4,339) | | | (24,701) |
Net Income (Loss) From Discontinued Operations | | | — | | | — | | | — | | | 1,127 | | | 29 | | | 140 | | | (20) |
Net Income (Loss) | | | (1,081) | | | (87) | | | (436) | | | 1,569 | | | (574) | | | (4,199) | | | (24,721) |
Dividends on preferred units | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Net Income (Loss) Attributable to Common Stockholders | | | (1,081) | | | (87) | | | (436) | | | 1,569 | | | (574) | | | (4,199) | | | (24,721) |
Net Income (Loss) per Share: | | | | | | | | | | | | | | | |||||||
Basic – Continuing Operations | | | (0.10) | | | (0.01) | | | (0.04) | | | 0.04 | | | (0.06) | | | (0.71) | | | (4.06) |
Basic – Discontinued Operations | | | — | | | — | | | — | | | 0.11 | | | 0.00 | | | 0.02 | | | (0.00) |
Diluted – Continuing Operations | | | (0.10) | | | (0.01) | | | (0.04) | | | 0.04 | | | (0.06) | | | (0.71) | | | (4.06) |
Diluted – Discontinued Operations | | | — | | | — | | | — | | | 0.11 | | | 0.00 | | | 0.02 | | | (0.00) |
Weighted Average Common Stock Outstanding (in thousands): | | | | | | | | | | | | | | | |||||||
Basic | | | 10,670 | | | 10,646 | | | 10,651 | | | 10,628 | | | 10,081 | | | 6,091 | | | 6,084 |
Diluted | | | 10,670 | | | 10,646 | | | 10,651 | | | 10,628 | | | 10,081 | | | 6,091 | | | 6,084 |
Consolidated Balance Sheets ($ in thousands) | | | June 30, (unaudited) | | | December 31, | |||||||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |
Assets | | | | | | | | | | | | | | | |||||||
Current Assets: | | | | | | | | | | | | | | | |||||||
Cash and cash equivalents | | | 2,710 | | | 3,382 | | | 3,055 | | | 3,115 | | | 185 | | | 76 | | | 40 |
Accounts receivable | | | 422 | | | 559 | | | 557 | | | 533 | | | 517 | | | 441 | | | 370 |
Accounts receivable – related parties | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Other accounts receivable | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Prepaid expenses and other current assets | | | 470 | | | 543 | | | 666 | | | 699 | | | 671 | | | 1,018 | | | 866 |
Current derivative assets | | | — | | | — | | | — | | | — | | | — | | | — | | | |
Discontinued operations included in current assets | | | — | | | — | | | — | | | — | | | 121 | | | 79 | | | 106 |
Total Current Assets | | | 3,602 | | | 4,484 | | | 4,278 | | | 4,347 | | | 1,494 | | | 1,614 | | | 1,382 |
Non-Current Assets: | | | | | | | | | | | | | | | |||||||
Oil and natural gas properties, net (full cost accounting method) | | | 4,045 | | | 4,485 | | | 4,385 | | | 4,804 | | | 4,720 | | | 5,225 | | | 8,838 |
Other property and equipment, net | | | 126 | | | 159 | | | 149 | | | 190 | | | 135 | | | 140 | | | 200 |
Operating lease ROU asset | | | 73 | | | 70 | | | 41 | | | — | | | — | | | — | | | — |
Non-current derivative assets | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Other non-current assets | | | 7 | | | 140 | | | 69 | | | 143 | | | 259 | | | 24 | | | — |
Discontinued operations included in non-current assets | | | — | | | — | | | — | | | — | | | 1,497 | | | 1,559 | | | 1,573 |
Total Non-Current Assets | | | 4,251 | | | 4,854 | | | 4,644 | | | 5,137 | | | 6,611 | | | 6,948 | | | 10,611 |
| | | | | | | | | | | | | | ||||||||
Total Assets | | | 7,853 | | | 9,338 | | | 8,922 | | | 9,484 | | | 8,105 | | | 8,562 | | | 11,993 |
Consolidated Statements of Operations (in thousands, except per share data) | | | Nine Months Ended September 30, (unaudited) | | | Year Ended December 31, | |||||||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |
Other Income (Expense): | | | | | | | | | | | | | | | |||||||
Interest expense | | | (6) | | | (8) | | | (10) | | | (5) | | | (53) | | | (102) | | | (80) |
Gain on sale of assets | | | 4 | | | 45 | | | 45 | | | 33 | | | 2 | | | 1 | | | 41 |
Other income | | | — | | | — | | | 6 | | | 157 | | | — | | | — | | | — |
Total Other Income (Expense) | | | (2) | | | 37 | | | 41 | | | 185 | | | (51) | | | (101) | | | (39) |
Income (Loss) From Operations Before Income Taxes | | | (1,894) | | | (269) | | | (464) | | | 425 | | | (845) | | | (4,339) | | | (17,350) |
Income tax benefit (expense) | | | — | | | — | | | 28 | | | 17 | | | 242 | | | — | | | (7,351) |
Net Income (Loss) From Continuing Operations | | | (1,894) | | | (269) | | | (436) | | | 442 | | | (603) | | | (4,339) | | | (24,701) |
Net Income (Loss) From Discontinued Operations | | | — | | | — | | | — | | | 1,127 | | | 29 | | | 140 | | | (20) |
Net Income (Loss) | | | (1,894) | | | (269) | | | (436) | | | 1,569 | | | (574) | | | (4,199) | | | (24,721) |
Dividends on preferred units | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Net Income (Loss) Attributable to Common Stockholders | | | (1,894) | | | (269) | | | (436) | | | 1,569 | | | (574) | | | (4,199) | | | (24,721) |
Net Income (Loss) per Share: | | | | | | | | | | | | | | | |||||||
Basic – Continuing Operations | | | (0.18) | | | (0.03) | | | (0.04) | | | 0.04 | | | (0.06) | | | (0.71) | | | (4.06) |
Basic – Discontinued Operations | | | — | | | — | | | — | | | 0.11 | | | 0.00 | | | 0.02 | | | (0.00) |
Diluted – Continuing Operations | | | (0.18) | | | (0.03) | | | (0.04) | | | 0.04 | | | (0.06) | | | (0.71) | | | (4.06) |
Diluted – Discontinued Operations | | | — | | | — | | | — | | | 0.11 | | | 0.00 | | | 0.02 | | | (0.00) |
Weighted Average Common Stock Outstanding (in thousands): | | | | | | | | | | | | | | | |||||||
Basic | | | 10,673 | | | 10,649 | | | 10,651 | | | 10,628 | | | 10,081 | | | 6,091 | | | 6,084 |
Diluted | | | 10,673 | | | 10,649 | | | 10,651 | | | 10,628 | | | 10,081 | | | 6,091 | | | 6,084 |
Consolidated Balance Sheets ($ in thousands) | | | September 30, (unaudited) | | | December 31, | |||||||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |
Assets | | | | | | | | | | | | | | | |||||||
Current Assets: | | | | | | | | | | | | | | | |||||||
Cash and cash equivalents | | | 2,545 | | | 3,482 | | | 3,055 | | | 3,115 | | | 185 | | | 76 | | | 40 |
Accounts receivable | | | 262 | | | 511 | | | 557 | | | 533 | | | 517 | | | 441 | | | 370 |
Accounts receivable – related parties | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Other accounts receivable | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Prepaid expenses and other current assets | | | 462 | | | 517 | | | 666 | | | 699 | | | 671 | | | 1,018 | | | 866 |
Current derivative assets | | | — | | | — | | | — | | | — | | | — | | | — | | | |
Discontinued operations included in current assets | | | — | | | — | | | — | | | — | | | 121 | | | 79 | | | 106 |
Total Current Assets | | | 3,269 | | | 4,510 | | | 4,278 | | | 4,347 | | | 1,494 | | | 1,614 | | | 1,382 |
Non-Current Assets: | | | | | | | | | | | | | | | |||||||
Oil and natural gas properties, net (full cost accounting method) | | | 3,914 | | | 4,344 | | | 4,385 | | | 4,804 | | | 4,720 | | | 5,225 | | | 8,838 |
Other property and equipment, net | | | 134 | | | 134 | | | 149 | | | 190 | | | 135 | | | 140 | | | 200 |
Operating lease ROU asset | | | 58 | | | 55 | | | 41 | | | — | | | — | | | — | | | — |
Non-current derivative assets | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Other non-current assets | | | 2 | | | 139 | | | 69 | | | 143 | | | 259 | | | 24 | | | — |
Discontinued operations included in non-current assets | | | — | | | — | | | — | | | — | | | 1,497 | | | 1,559 | | | 1,573 |
Total Non-Current Assets | | | 4,108 | | | 4,672 | | | 4,644 | | | 5,137 | | | 6,611 | | | 6,948 | | | 10,611 |
| | | | | | | | | | | | | | ||||||||
Total Assets | | | 7,377 | | | 9,182 | | | 8,922 | | | 9,484 | | | 8,105 | | | 8,562 | | | 11,993 |
Consolidated Balance Sheets ($ in thousands) | | | June 30, (unaudited) | | December 31, | | | September 30, (unaudited) | | December 31, | ||||||||||||||||||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | 2016 | | 2015 | | | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | 2016 | | 2015 | |||||||||||||
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Current Liabilities: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Accounts payable | | 113 | | 130 | | 269 | | 132 | | 340 | | 418 | | 303 | | 304 | | 127 | | 269 | | 132 | | 340 | | 418 | | 303 | ||||||||||||||
Accounts payable – related parties | | — | | — | | — | | — | | — | | — | | 634 | | — | | — | | — | | — | | — | | — | | 634 | ||||||||||||||
Accrued liabilities | | 127 | | 202 | | 164 | | 282 | | 187 | | 267 | | 267 | | 255 | | 231 | | 164 | | 282 | | 187 | | 267 | | 267 | ||||||||||||||
Lease liabilities - finance leases - current | | 59 | | 64 | | 41 | | — | | — | | — | | — | | 58 | | 59 | | 41 | | — | | — | | — | | — | ||||||||||||||
Lease liabilities – operating leases - current | | 62 | | 60 | | 61 | | — | | — | | — | | — | | 58 | | 56 | | 61 | | — | | — | | — | | — | ||||||||||||||
Asset retirement obligations - current | | 75 | | 83 | | 75 | | 83 | | — | | — | | — | | 75 | | 83 | | 75 | | 83 | | — | | — | | — | ||||||||||||||
Revenue payable | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Advances from joint interest owners | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Notes payable – current | | 64 | | — | | — | | 51 | | 41 | | 55 | | 65 | | 101 | | — | | — | | 51 | | 41 | | 55 | | 65 | ||||||||||||||
Current derivative liabilities | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Discontinued operations included in current liabilities | | — | | — | | — | | — | | 43 | | 51 | | 96 | | — | | — | | — | | — | | 43 | | 51 | | 96 | ||||||||||||||
Total Current Liabilities | | 500 | | 539 | | 610 | | 548 | | 611 | | 791 | | 1,365 | | 851 | | 556 | | 610 | | 548 | | 611 | | 791 | | 1,365 | ||||||||||||||
Non-Current Liabilities: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Notes payable – non-current | | 102 | | — | | — | | 73 | | 49 | | 47 | | 87 | | 65 | | — | | — | | 73 | | 49 | | 47 | | 87 | ||||||||||||||
Non-current derivative liabilities | | — | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | — | | ||||||||||||||||
Asset retirement obligations - noncurrent | | 1,936 | | 2,066 | | 1,923 | | 2,096 | | 2,270 | | 2,046 | | 2,222 | | 1,954 | | 2,085 | | 1,923 | | 2,096 | | 2,270 | | 2,046 | | 2,222 | ||||||||||||||
Revolving credit facility | | — | | — | | — | | — | | — | | 2,400 | | 859 | | — | | — | | — | | — | | — | | 2,400 | | 859 | ||||||||||||||
Deferred tax liabilities | | — | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | — | | ||||||||||||||||
Lease liabilities – finance leases - noncurrent | | 30 | | 33 | | 41 | | — | | — | | — | | — | | 42 | | 29 | | 41 | | — | | — | | — | | — | ||||||||||||||
Lease liabilities – operating leases - noncurrent | | 11 | | 10 | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Other non-current liabilities | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Total Non-Current Liabilities | | 2,079 | | 2,109 | | 1,964 | | 2,169 | | 2,319 | | 4,493 | | 3,168 | | 2,061 | | 2,114 | | 1,964 | | 2,169 | | 2,319 | | 4,493 | | 3,168 | ||||||||||||||
Total Liabilities | | 2,579 | | 2,648 | | 2,574 | | 2,717 | | 2,930 | | 5,284 | | 4,533 | | 2,912 | | 2,670 | | 2,574 | | 2,717 | | 2,930 | | 5,284 | | 4,533 | ||||||||||||||
Stockholders’ Equity | | 5,274 | | 6,690 | | 6,348 | | 6,767 | | 5,175 | | 3,278 | | 7,460 | | 4,465 | | 6,512 | | 6,348 | | 6,767 | | 5,175 | | 3,278 | | 7,460 | ||||||||||||||
Total Liabilities and Stockholders’ Equity | | 7,853 | | 9,338 | | 8,922 | | 9,484 | | 8,105 | | 8,562 | | 11,993 | | 7,377 | | 9,182 | | 8,922 | | 9,484 | | 8,105 | | 8,562 | | 11,993 |
Consolidated Statements of Operations Data ($ in thousands) | | | Three Months Ended June 30, (unaudited) | | Nine Months Ended June 30, (unaudited) | | Year Ended September 30, | ||||||||||||||||||||||||||||||||
Consolidated Statements of Operations Data | | | For the Years Ended September 30, | ||||||||||||||||||||||||||||||||||||
($ in thousands) | | ||||||||||||||||||||||||||||||||||||||
| | 2020 | | 2019 | | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | 2016 | | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | ||||||||||||
Revenues: | | | | | | | | | | | | | | ||||||||||||||||||||||||||
Oil and natural gas sales, net | | $4,969 | | $26,207 | | $57,824 | | $71,713 | | $101,096 | | $69,872 | | $21,808 | | $4,130 | | $73,133 | | $101,096 | | $69,872 | | $21,808 | | $4,130 | |||||||||||||
Contract services – related | | 3,800 | | 1,900 | | — | | — | | — | |||||||||||||||||||||||||||||
Total Revenues | | 6,019 | | 27,107 | | 60,974 | | 72,613 | | 102,996 | | 69,872 | | 21,808 | | 4,130 | | 76,933 | | 102,996 | | 69,872 | | 21,808 | | 4,130 | |||||||||||||
Costs and Expenses: | | | | | | | | | | | | | | ||||||||||||||||||||||||||
Lease operating expenses | | 3,760 | | 6,917 | | 15,517 | | 15,732 | | 23,808 | | 11,044 | | 5,796 | | 2,779 | | 20,997 | | 23,808 | | 11,044 | | 5,796 | | 2,779 | |||||||||||||
Gathering, processing & transportation | | — | | — | | — | | — | | — | | 735 | | — | | — | | — | | — | | 735 | | — | | — | |||||||||||||
Production taxes | | 293 | | 1,267 | | 2,808 | | 3,409 | | 4,804 | | 3,207 | | 1,206 | | 194 | | 3,526 | | 4,804 | | 3,207 | | 1,206 | | 194 | |||||||||||||
Exploration costs | | 6,757 | | 1,061 | | 9,231 | | 3,227 | | 5,074 | | 5,992 | | 11,882 | | 45 | | 9,923 | | 5,074 | | 5,992 | | 11,882 | | 45 | |||||||||||||
Depletion, depreciation, amortization and accretion | | 5,028 | | 5,402 | | 16,020 | | 14,870 | | 20,182 | | 15,714 | | 5,876 | | 1,366 | | 21,479 | | 20,182 | | 15,714 | | 5,876 | | 1,366 | |||||||||||||
General and administrative: | | | | | | | | | | | | | | ||||||||||||||||||||||||||
Administrative Costs | | 1,936 | | 3,136 | | 8,669 | | 8,960 | | 12,168 | | 14,175 | | 5,806 | | 3,863 | | 10,826 | | 12,168 | | 14,175 | | 5,806 | | 3,863 | |||||||||||||
Unit-based compensation expense | | 291 | | 101 | | 650 | | 745 | | 898 | | — | | — | | — | | 963 | | 898 | | — | | — | | — | |||||||||||||
Cost of contract services – related parties | | 97 | | — | | 403 | | — | | 21 | | — | | — | | — | | 503 | | 21 | | — | | — | | — | |||||||||||||
Transaction Costs | | 15 | | — | | 42 | | 3,940 | | 4,553 | | 878 | | 1,766 | | — | | 1,431 | | 4,553 | | 878 | | 1,766 | | — | |||||||||||||
Total Costs and Expenses | | 18,177 | | 17,884 | | 53,340 | | 50,433 | | 71,508 | | 51,745 | | 32,332 | | 8,247 | | 69,648 | | 71,508 | | 51,745 | | 32,332 | | 8,247 | |||||||||||||
Income (Loss) From Operations | | $(12,158) | | $9,223 | | $7,634 | | $22,180 | | $31,488 | | $18,127 | | $(10,524) | | $(4,117) | | $7,285 | | $31,488 | | $18,127 | | $(10,524) | | $(4,117) | |||||||||||||
Other Income (Expense): | | | | | | | | | | | | | | ||||||||||||||||||||||||||
Interest expense | | (1,302) | | (1,369) | | (4,086) | | (3,545) | | (4,924) | | (1,707) | | — | | — | | (5,299) | | (4,924) | | (1,707) | | — | | — | |||||||||||||
Gain (loss) on derivatives | | (14,205) | | 5,733 | | 36,999 | | 11,697 | | 26,712 | | (17,143) | | (1,450) | | — | | 33,876 | | 26,712 | | (17,143) | | (1,450) | | — | |||||||||||||
Total Other Income (Expense) | | (15,507) | | 4,364 | | 32,913 | | 8,152 | | 21,788 | | (18,850) | | (1,450) | | — | | 28,577 | | 21,788 | | (18,850) | | (1,450) | | — | |||||||||||||
Net Income (Loss) Before Income Taxes | | (27,665) | | 13,587 | | 40,547 | | 30,332 | | 53,276 | | (723) | | (11,974) | | (4,117) | | 35,862 | | 53,276 | | (723) | | (11,974) | | (4,117) | |||||||||||||
Interest tax expense | | (319) | | — | | (319) | | — | | (1,410) | | — | | — | | 9 | |||||||||||||||||||||||
Income tax expense | | (718) | | (1,410) | | — | | — | | (9) | |||||||||||||||||||||||||||||
Net Income (Loss) | | (27,984) | | 13,587 | | 40,228 | | 30,332 | | 51,866 | | (723) | | (11,974) | | (4,126) | | 35,144 | | 51,866 | | (723) | | (11,974) | | (4,126) | |||||||||||||
Dividends on preferred units | | (890) | | (839) | | (2,631) | | (2,479) | | (3,330) | | (3,129) | | (1,409) | | — | | (3,535) | | (3,330) | | (3,129) | | (1,409) | | — | |||||||||||||
Net Income (Loss) Attributable to Common Unitholders | | $(28,874) | | $12,748 | | $37,597 | | $27,853 | | $48,536 | | $(3,852) | | $(13,383) | | $(4,126) | | $31,609 | | $48,536 | | $(3,852) | | $(13,383) | | $(4,126) | |||||||||||||
Net Income (Loss) per Unit: | | | | | | | | | | | | | | ||||||||||||||||||||||||||
Basic | | $(18.87) | | $8.35 | | $24.60 | | $18.31 | | $31.87 | | $(2.57) | | $(11.63) | | — | | $20.67 | | $31.87 | | $(2.57) | | $(11.63) | | — | |||||||||||||
Diluted | | $(18.87) | | $6.80 | | $19.86 | | $15.28 | | $26.03 | | $(2.57) | | $(11.63) | | — | | $17.24 | | $26.03 | | $(2.57) | | $(11.63) | | — | |||||||||||||
Weighted Average Common Units Outstanding: | | | | | | | | | | | | | | ||||||||||||||||||||||||||
Basic | | 1,530 | | 1,527 | | 1,528 | | 1,521 | | 1,523 | | 1,500 | | 1,151 | | — | | 1,529 | | 1,523 | | 1,500 | | 1,151 | | — | |||||||||||||
Diluted(1) | | 1,530 | | 1,998 | | 2,025 | | 1,985 | | 1,992 | | 1,500 | | 1,151 | | — | | 2,038 | | 1,992 | | 1,500 | | 1,151 | | — |
(1) | For the |
Consolidated Balance Sheet Data ($ in thousands) | | | As Of June 30 (unaudited) | | | As Of September 30, | |||||||||
| | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Cash and cash equivalents | | | $918 | | | $3,726 | | | $3,339 | | | $3,683 | | | $— |
Oil and natural gas properties, net (successful efforts) | | | 310,920 | | | 289,301 | | | 239,506 | | | 166,596 | | | 42,530 |
Total Assets | | | $355,602 | | | $326,747 | | | $258,483 | | | 177,989 | | | 43,407 |
Revolving credit facility | | | 104,000 | | | 97,000 | | | 53,500 | | | — | | | — |
Total Liabilities | | | 121,392 | | | 120,554 | | | 97,555 | | | 16,640 | | | 6,087 |
Series A Preferred Units | | | 59,402 | | | 56,810 | | | 53,529 | | | 49,823 | | | — |
Total Liabilities and Members’ Equity | | | $355,602 | | | 326,747 | | | 258,483 | | | 177,989 | | | 43,407 |
Statement of Cash Flow Data ($ in thousands) | | | Nine Months Ended June 30, (unaudited) | | | Year Ended September 30, | ||||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Statement of Cash Flows Data: | | | | | | | | | | | | | ||||||
Net cash provided by operating activities | | | $49,509 | | | $37,694 | | | $52,007 | | | $38,619 | | | $3,289 | | | $(9,125) |
Net cash used in investing activities | | | $(46,202) | | | $(69,473) | | | $(83,398) | | | $(88,389) | | | $(54,781) | | | $(24,087) |
Net cash provided by financing activities | | | $(6,115) | | | $32,232 | | | $31,778 | | | $49,426 | | | $55,175 | | | $33,212 |
Consolidated Balance Sheet Data ($ in thousands) | | | As Of September 30, | ||||||||||||
| | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Cash and cash equivalents | | | $1,660 | | | $3,726 | | | $3,339 | | | $3,683 | | | $— |
Oil and natural gas properties, net (successful efforts) | | | 310,726 | | | 289,301 | | | 239,506 | | | 166,596 | | | 42,530 |
Total Assets | | | $350,992 | | | $326,747 | | | $258,483 | | | 177,989 | | | 43,407 |
Revolving credit facility | | | 101,000 | | | 97,000 | | | 53,500 | | | — | | | — |
Total Liabilities | | | 124,083 | | | 120,554 | | | 97,555 | | | 16,640 | | | 6,087 |
Series A Preferred Units | | | 60,292 | | | 56,810 | | | 53,529 | | | 49,823 | | | — |
Total Liabilities and Members’ Equity | | | $350,992 | | | 326,747 | | | 258,483 | | | 177,989 | | | 43,407 |
Statement of Cash Flow Data ($ in thousands) | | | Year Ended September 30, | ||||||||||||
| | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Statement of Cash Flows Data: | | | | | | | | | | | |||||
Net cash (used) in/provided by operating activities | | | $62,550 | | | $52,007 | | | $38,619 | | | $3,289 | | | $(9,125) |
Net cash used in investing activities | | | $(51,521) | | | $(83,398) | | | $(88,389) | | | $(54,781) | | | $(24,087) |
Net cash (used) in/provided by financing activities | | | $(13,095) | | | $31,778 | | | $49,426 | | | $55,175 | | | $33,212 |
| | Pro Forma | ||||
| | Six Months Ended June 30, 2020 | | | Year Ended December 31, 2019 | |
| | (in thousands, except share and per unit amounts) | ||||
Combined Statement of Operations Data: | | | | | ||
Total revenues | | | $32,952 | | | $107,907 |
Total costs and expenses | | | (38,928) | | | (76,893) |
Income (loss) from operations | | | (5,976) | | | 31,014 |
Other income (expense): | | | | | ||
Interest expense | | | (2,723) | | | (4,934) |
Gain on sale of assets and other income | | | 3 | | | 51 |
Gain on derivatives, net | | | 55,035 | | | 26,712 |
Total other income, net | | | 52,315 | | | 21,829 |
Income tax expense | | | (10,093) | | | (12,887) |
Net income attributable to common shares/units | | | $36,246 | | | $39,956 |
Weighted average common shares/units outstanding—basic and diluted | | | 209,098,826 | | | 205,461,904 |
Net income per share attributable to common stockholders—basic and diluted | | | $0.17 | | | $0.19 |
Weighted average common shares/units outstanding—After 1 for 8 reverse stock split | | | 26,137,353 | | | 25,682,738 |
Net income per share attributable to common stockholders—basic and diluted—after 1 for 8 reverse stock split | | | $1.39 | | | $1.56 |
Weighted average common shares/units outstanding—After 1 for 12 reverse stock split | | | 17,424,902 | | | 17,121,825 |
Net income per share attributable to common stockholders—basic and diluted—after 1 for 12 reverse stock split | | | $2.08 | | | $2.33 |
| | Pro Forma | |
| | For the Year ended September 30, 2020 | |
| | (in thousands, except share and per unit amounts) | |
Combined Statement of Operations Data: | | | |
Total revenues | | | $80,359 |
Total costs and expenses | | | (75,120) |
Income (loss) from operations | | | 5,239 |
Other income (expense): | | | |
Interest expense | | | (5,307) |
Gain on sale of assets and other income | | | 10 |
Gain on derivatives, net | | | 33,876 |
Total other income, net | | | 28,579 |
Income tax expense | | | (7,626) |
Net income attributable to common shares/units | | | $26,192 |
Weighted average common shares/units outstanding—basic and diluted | | | 209,978,802 |
Net income per share attributable to common stockholders—basic and diluted | | | $0.12 |
Weighted average common shares/units outstanding - After 1 for 8 reverse stock split | | | 26,247,350 |
Net income per share attributable to common stockholders—basic and diluted - after 1 for 8 reverse stock split | | | $1.00 |
Weighted average common shares/units outstanding - After 1 for 12 reverse stock split | | | 17,498,233 |
Net income per share attributable to common stockholders—basic and diluted - after 1 for 12 reverse stock split | | | $1.50 |
| | Pro Forma As of | |
| | (Unaudited) | |
| | (in thousands) | |
Combined Balance Sheet Data: | | | |
Cash and cash equivalents | | | $ |
Oil and natural gas properties, net (successful efforts) | | | |
Total assets | | | |
Long term debt | | | |
Total liabilities and stockholders' equity | | |
| | Six Months Ended June 30, 2020 | | | Year Ended December 31, 2019 | |
TGC | | | | | ||
Book value per share—historical(1) | | | $0.49 | | | $0.60 |
Basic and diluted net loss per share—historical | | | $(0.10) | | | $(0.04) |
| | | | |||
REP | | | | | ||
Book value per share—historical(1) | | | $114.31 | | | $98.09 |
Basic income per share—historical | | | $29.63 | | | $31.87 |
Diluted income per share—historical | | | $23.20 | | | $26.03 |
| | | | |||
Unaudited Pro Forma Combined | | | | | ||
Book value per share—pro forma(2) | | | $1.03 | | | |
Basic and diluted net income per share—pro forma | | | $0.17 | | |
| | Year Ended September 30, 2020 | |
TGC | | | |
Book value per share—historical(1) | | | $0.42 |
Basic and diluted net loss per share—historical | | | $(0.19) |
| | ||
REP | | | |
Book value per share—historical(1) | | | $109.00 |
Basic income per share—historical | | | $20.67 |
Diluted income per share—historical | | | $17.24 |
| | ||
Unaudited Pro Forma Combined | | | |
Book value per share—pro forma(2) | | | $0.89 |
Basic and diluted net income per share—pro forma | | | $0.12 |
(1) | Presented only for pro forma purposes. Historical book value per share is calculated by taking total stockholders’ equity divided by total outstanding common shares. |
(2) | Combined pro forma book value per share is calculated by taking pro forma combined total stockholders’ equity divided by pro forma combined total outstanding common shares. |
| | Year Ended December 31, 2019 | | | | | Year Ended September 30, 2020 | | | |||||||||
| | TGC Historical | | REP Historical | | Pro Forma Combined | | | REP Historical | | TGC Historical | | Pro Forma Combined | |||||
Proved reserves: | | | | | | | ||||||||||||
Oil (MBbls) | | 803 | | 37,159 | | 37,962 | | 37,158 | | 650 | | 37,808 | ||||||
NGLs (MBbls) | | — | | 10,812 | | 10,812 | | 10,681 | | — | | 10,681 | ||||||
Natural Gas (MMcfe) | | — | | 40,991 | | 40,991 | ||||||||||||
Natural Gas (MMcf) | | 53,683 | | — | | 53,683 | ||||||||||||
Oil equivalents (MBoe) | | 803 | | 54,803 | | 55,606 | | 56,786 | | 650 | | 57,436 | ||||||
Proved developed reserves: | | | | | | | ||||||||||||
Oil (MBbls) | | 803 | | 19,198 | | 20,001 | | 19,149 | | 650 | | 19,799 | ||||||
NGLs (MBbls) | | — | | 6,045 | | 6,045 | | 5,847 | | — | | 5,847 | ||||||
Natural Gas (MMcfe) | | — | | 23,096 | | 23,096 | ||||||||||||
Natural Gas (MMcf) | | 31,138 | | — | | 31,138 | ||||||||||||
Oil equivalents (MBoe) | | 803 | | 29,092 | | 29,894 | | 30,186 | | 650 | | 30,836 |
| | Year Ended December 31, 2019 | | | |||||
| | TGC Historical | | | REP Historical | | | Pro Forma Combined | |
Production: | | | | | | | |||
Oil (MBbls) | | | 94 | | | 1,975 | | | 2,069 |
NGLs (MBbls) | | | — | | | 135 | | | 135 |
Natural Gas (MMcfe) | | | — | | | 886 | | | 886 |
Oil equivalents (MBoe) | | | 94 | | | 2,258 | | | 2,352 |
| | Six Months Ended June 30, 2020 | | | Six Months Ended June 30, 2020 | | | ||
| | TGC Historical | | | REP Historical | | | Pro Forma Combined | |
Production: | | | | | | | |||
Oil (MBbls) | | | 46 | | | 1,041 | | | 1,087 |
NGLs (MBbls) | | | — | | | 123 | | | 123 |
Natural Gas (MMcfe) | | | — | | | 783 | | | 783 |
Oil equivalents (MBoe) | | | 46 | | | 1,295 | | | 1,340 |
| | Year Ended September 30, 2020 | | | |||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Production: | | | | | | | |||
Oil (MBbls) | | | 2,060 | | | 88 | | | 2,148 |
NGLs (MBbls) | | | 260 | | | — | | | 260 |
Natural Gas (MMcf) | | | 1,628 | | | — | | | 1,628 |
Oil equivalents (MBoe) | | | 2,591 | | | 88 | | | 2,679 |
○ | the supply of, or demand for, crude oil, natural gas and NGLs; |
○ | the combined company’s operating costs or our operating flexibility; |
1. | Proposal to approve and adopt the merger agreement, a copy of which is attached as Annex A to this proxy statement/prospectus, and the transactions contemplated thereby, including the merger and the issuance of shares of TGC common stock pursuant to the terms of the merger agreement, in an amount necessary to complete the merger (the “TGC share issuance proposal”). |
2. | Proposal to approve and adopt an amendment to TGC’s amended and restated certificate of incorporation (which we refer to as the “TGC charter”) to increase the number of authorized shares of TGC common stock from 100 million to 240 million, which will be effective upon the closing of the merger (or shortly prior to such closing) (the “TGC share increase proposal”). |
3. | Proposal to approve and adopt an amendment to the TGC charter to change the corporate name of TGC from “Tengasco, Inc.” to “Riley Exploration Permian, Inc.” (the “TGC name change proposal”). |
4. | Proposal to approve and adopt an amendment to the TGC charter to effect a reverse stock split of TGC’s outstanding common stock in a ratio of between one-for-eight and one-for-twelve (the “reverse stock split”), in the sole discretion of the board of directors of TGC and to be mutually agreed to between TGC and REP, prior to the effectiveness of the merger (the “TGC reverse split proposal”). |
5. | Proposal to approve and adopt an amendment to the TGC charter to effect a waiver of corporate opportunities that could be owed to TGC by investment funds sponsored or managed by Yorktown Partners LLC, Bluescape Riley Exploration Holdings LLC and Boomer Petroleum, LLC, which will be effective upon the closing of the merger (or shortly prior to such closing) (the “TGC corporate opportunities proposal”). |
6. | Proposal to approve and adopt an amendment to the TGC charter to effect a requirement that the holders of at least 66 2/3% in voting power of the outstanding shares of stock of TGC entitled to vote thereon are required to approve amendments to the TGC charter after a certain date (the “TGC charter amendments provision proposal”). |
7. | Proposal to approve and adopt an amendment to the TGC bylaws to effect a requirement that the holders of at least 66 2/3% in voting power of the outstanding shares of stock of TGC entitled to vote thereon are required to approve amendments to the TGC bylaws after a certain date (the “TGC bylaws amendments provision proposal”). |
8. | Proposal to approve and adopt the 2021 Long Term Incentive Plan (the “TGC equity plan proposal”). |
9. | Proposal to approve, on a non-binding advisory basis, the compensation that may become payable to TGC’s named executive officers in connection with the completion of the merger (the “TGC compensation proposal”). |
10. | Proposal to adjourn the TGC special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the TGC share issuance proposal, TGC share increase proposal, TGC name change proposal, TGC reverse split proposal, TGC corporate opportunities proposal, TGC charter amendments provision proposal, TGC bylaws amendments |
○ | The expected relative percentage ownership of TGC’s stockholders and REP members in the combined company initially at the closing and the implied valuation of REP and TGC; |
○ | The parties’ representations, warranties and covenants and the conditions to their respective obligations; and |
○ | The limited number and nature of the conditions of the obligation of TGC to consummate the merger; and |
| | Low | | | Median | | | High | |
Total enterprise value divided by: | | | | | | | |||
Net Daily Production ($/BOE/D) | | | $35,957.1 | | | $40,032.1 | | | $47,217.3 |
Net Proved Reserves ($/BOE) | | | $6.16 | | | $7.80 | | | $10.89 |
TTM Adjusted EBITDA | | | 4.1x | | | 4.7x | | | 5.1x |
| | Low | | | Median | | | High | |
Total enterprise value divided by: | | | | | | | |||
Net Daily Production ($/BOE/D) | | | $27,252.0 | | | $28,389.3 | | | $34,682.0 |
Net Proved Reserves ($/BOE) | | | $3.26 | | | $3.94 | | | $5.90 |
TTM Adjusted EBITDA | | | 2.7x | | | 3.5x | | | 4.7x |
| | Net Daily Production ($/BOE/D) | | | Net Proved Reserves (BOE) | | | TTM Adjusted EBITDA | ||||||||||
| | Low | | | High | | | Low | | | High | | | Low | | | High | |
| | 64.882276 | | | 117.539848 | | | 132.471782 | | | 387.78766 | | | 337.10792 | | | 450.94386 | |
Implied Exchange Ratio Ranges | | | x | | | x | | | 2x | | | 1x | | | 7x | | | 4x |
| | Low | | | High | |
Total enterprise value divided by: | | | | | ||
Net Daily Production ($/BOE/D) | | | $36,660.0 | | | $40,864.9 |
Net Proved Reserves ($/BOE) | | | $3.14 | | | $6.28 |
| | Net Daily Production ($/BOE/D) | | | Net Proved Reserves (BOE) | |||||||
| | Low | | | High | | | Low | | | High | |
Implied Exchange Ratio Ranges | | | 94.963958x | | | 180.298458x | | | 49.679015x | | | 241.570483x |
| | Independent Reserve Report | | | Management Reserve Report | |||||||
| | Low | | | High | | | Low | | | High | |
Implied Exchange Ratio Ranges | | | 122.651781x | | | 241.108210x | | | 185.342565x | | | 391.225955x |
| | | | | | | Debt Adjusted Contribution | | | | | | | | Debt Adjusted Contribution | |||||||||||||||||||||||||||||||||
| | Contribution | | Implied Ownership | | | | | Contribution | | Implied Ownership | | | |||||||||||||||||||||||||||||||||||
| | TGC ($MM) | | TGC (%) | | REP ($MM) | | REP (%) | | Combined | | TGC (%) | | REP (%) | | Implied Exchange Ratio | | | TGC ($MM) | | TGC (%) | | REP ($MM) | | REP (%) | | Combined | | TGC (%) | | REP (%) | | Implied Exchange Ratio | |||||||||||||||
2019 Adjusted EBITDA | | 0.4 | | 0.6% | | 70.5 | | 99.4% | | 70.9 | | 1% | | 99% | | 567.320698x | | 0.4 | | 0.6% | | 70.5 | | 99.4% | | 70.9 | | 1% | | 99% | | 567.320698x | ||||||||||||||||
TTM Adjusted EBITDA | | 0.0 | | 0.0% | | 74.0 | | 100.0% | | 74.0 | | 0% | | 100% | | NM | | 0.0 | | 0.0% | | 74.0 | | 100.0% | | 74.0 | | 0% | | 100% | | NM | ||||||||||||||||
6/30/20 Daily Production (Boe/d) | | 242.0 | | 3.4% | | 6,831.8 | | 96.6% | | 7,073.8 | | 9% | | 91% | | 52.484964x | | 242.0 | | 3.4% | | 6,831.8 | | 96.6% | | 7,073.8 | | 9% | | 91% | | 52.484964x | ||||||||||||||||
Total Proved Reserves (Mboe) | | 729.0 | | 0.6% | | 115,512.6 | | 99.4% | | 116,241.6 | | 1% | | 99% | | 521.829388x | ||||||||||||||||||||||||||||||||
Total Proved Developed Producing Reserves (Mboe) | | 708.5 | | 2.7% | | 25,527.2 | | 97.3% | | 26,235.7 | | 6% | | 94% | | 80.592766x | ||||||||||||||||||||||||||||||||
Total Proved Reserves (MBoe) | | 729.0 | | 0.6% | | 115,512.6 | | 99.4% | | 116,241.6 | | 1% | | 99% | | 521.829388x | ||||||||||||||||||||||||||||||||
Total Proved Developed Producing Reserves (MBoe) | | 708.5 | | 2.7% | | 25,527.2 | | 97.3% | | 26,235.7 | | 6% | | 94% | | 80.592766x | ||||||||||||||||||||||||||||||||
Total Proved PV-10 | | 4.7 | | 0.7% | | 682.2 | | 99.3% | | 686.8 | | 1% | | 99% | | 479.445619x | | 4.7 | | 0.7% | | 682.2 | | 99.3% | | 686.8 | | 1% | | 99% | | 479.445619x | ||||||||||||||||
Total Proved Developed Producing PV-10 | | 4.3 | | 1.7% | | 250.7 | | 98.3% | | 255.0 | | 3% | | 97% | | 162.667493x | | 4.3 | | 1.7% | | 250.7 | | 98.3% | | 255.0 | | 3% | | 97% | | 162.667493x |
| | Option Awards | | | Option Awards | |||||||||||||||||||||||||
Name | | Number of Shares of TGC Common Stock Underlying Unexercised Options (#) Exercisable | | Number of Shares of TGC Common Stock Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | | Number of Shares of TGC Common Stock Underlying Unexercised Options (#) Exercisable | | Number of Shares of TGC Common Stock Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | ||||||||||||
Current Executive Officers | | | | | | | | | | | ||||||||||||||||||||
Michael J. Rugen | | 0 | | 0 | | N/A | | N/A | | | 0 | | 0 | | N/A | | N/A | | ||||||||||||
Cary V. Sorensen | | 0 | | 0 | | N/A | | N/A | | | 0 | | 0 | | N/A | | N/A | | ||||||||||||
| | | | | | | | | | |||||||||||||||||||||
Current Directors | | | | | | | | | | | ||||||||||||||||||||
Peter Salas | | 625 | | 0 | | $1.20 | | January 3, 2021 | | | 0 | | 0 | | N/A | | N/A | | ||||||||||||
Richard M. Thon | | 625 | | 0 | | $1.20 | | January 3, 2021 | | | 0 | | 0 | | N/A | | N/A | | ||||||||||||
Matthew K. Behrent | | 625 | | 0 | | $1.20 | | January 3, 2021 | | | 0 | | 0 | | N/A | | N/A | |
Name | | Fees earned or paid in cash ($) | | Stock awards Compensation(1) ($) | | Total ($) | | Fees earned or paid in cash ($) | | Stock awards Compensation(1) ($) | | Total ($) | ||||||
Matthew K. Behrent | | $15,000 | | $1,840 | | $16,840 | | $15,000 | | $1,145 | | $16,145 | ||||||
Richard M. Thon | | $15,000 | | $1,840 | | $16,840 | | $15,000 | | $1,145 | | $16,145 | ||||||
Peter E. Salas | | $15,000 | | $1,840 | | $16,840 | | $15,000 | | $1,145 | | $16,145 |
(1) | The amounts represented in this column are equal to the aggregate grant date fair value of the award computed in accordance with FASB ASC Topic 718, Compensation-Stock Compensation, in connection with options granted under the Tengasco, Inc. Stock Incentive Plan. |
Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($) | | All Other Compensation(1) ($) | | Total ($) | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($) | | All Other Compensation(1) ($) | | Total ($) | ||||||||||||
Michael J. Rugen, Chief Financial Officer Chief Executive Officer (interim)(2) | | | 2019 | | 199,826 | | 23,507 | | 12,147 | | 8,128 | | 243,608 | | | 2020 | | 199,826 | | 23,944 | | 10,633 | | 8,132 | | 242,535 | ||||||||||
| 2018 | | 184,213 | | 21,821 | | 15,097 | | 7,482 | | 228,613 | | 2019 | | 199,826 | | 23,507 | | 12,147 | | 8,128 | | 243,608 | |||||||||||||
Cary V. Sorensen, General Counsel | | | 2019 | | 91,000 | | — | | — | | 3,707 | | 94,707 | | | 2020 | | 91,000 | | — | | — | | 3,720 | | 94,720 | ||||||||||
| 2018 | | 87,050 | | — | | — | | 3,550 | | 90,600 | | 2019 | | 91,000 | | — | | — | | 3,707 | | 94,707 |
(1) | The amounts in this column consist of the TGC’s matching contributions to its 401 (k) plan and the portion of company-wide group term life insurance premiums allocable to these named executive officers. |
(2) | Mr. Rugen was appointed interim Chief Executive Officer on June 28, 2013. The bonus and stock award information for Mr. Rugen for |
| | Golden Parachute Compensation | ||||
Name | | | Cash(1) | | | Total |
Michael J. Rugen | | | $99,913.06 | | | $99,913.06 |
Cary V. Sorensen | | | $45,500.00 | | | $45,500.00 |
(1) | The cash amount payable to the named executive officers pursuant to their CIC Severance Agreements upon a qualifying termination following the merger based on the employee’s base salary and years of service to TGC. The cash severance payable to Mr. Rugen and Mr. Sorensen is paid in a lump sum within ten (10) days of their execution and non-revocation of a release of claims and is equal to 26 weeks of such officer’s base salary. Cash severance is a “double-trigger” payment in that it is payable upon a termination of employment without cause or resignation for good reason within 12 months following the merger. |
Directors and Executive Officers | | | Number of REP Common Units Held Immediately Prior to the Closing |
Bobby D. Riley(1) | | | 27,331.34 |
Kevin Riley(2) | | | 15,203.08 |
Bryan H. Lawrence(3) | | | — |
Philip Riley(4) | | | — |
Alvin Libin(5) | | | — |
(1) | Includes 13,238.01 unvested restricted REP units. |
(2) | Includes 7,643.67 unvested restricted REP units. |
(3) | Yorktown XI Company LP is the sole general partner of Yorktown Energy Partners XI, L.P. Yorktown XI Associates LLC is the sole general partner of Yorktown XI Company LP. The managers of Yorktown XI Associates LLC, who act by majority approval, are Bryan H. Lawrence, one of REP’s directors, W. Howard Keenan, Jr., Peter A. Leidel, Tomás R. LaCosta, Robert A. Signorino, Bryan R. Lawrence and James C. Crain. As a result, Yorktown XI Associates LLC may be deemed to share the power to vote or direct the vote or to dispose or direct the disposition of the common stock owned by Yorktown Energy Partners XI, L.P. Yorktown XI Company LP and Yorktown XI Associates LLC disclaim beneficial ownership of the common stock held by Yorktown Energy Partners XI, L.P. in excess of their pecuniary interest therein. The managers of Yorktown XI Associates LLC disclaim beneficial ownership of the common stock held by Yorktown Energy Partners XI, L.P. The address of such funds is 410 Park Avenue, 19th Floor, New York, New York 10022. See “Principal Equityholders of REP” for additional information. |
(4) | Bluescape Riley Exploration Acquisition LLC is a Delaware limited liability company and beneficially owns REP’s common units. Bluescape Riley Exploration Holdings LLC is a Delaware limited liability company and beneficially owns units of REP’s Series A Preferred Units in Riley Exploration—Permian, LLC. Bluescape Riley Exploration Acquisition LLC is a wholly owned subsidiary of Bluescape Riley Exploration Holdings LLC. Bluescape Energy Recapitalization and Restructuring Fund III LP has voting and dispositive power over REP’s shares held by Bluescape Riley Exploration Acquisition LLC and Bluescape Riley Exploration Holdings LLC and therefore may also be deemed to be the beneficial owner of these shares. Bluescape Energy Partners III GP LLC may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares by virtue of Bluescape Energy Partners III GP LLC being the sole general partner of Bluescape Energy Recapitalization and Restructuring Fund III LP. Bluescape Resources GP Holdings LLC may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares by virtue of Bluescape Resources GP Holdings LLC being the manager of Bluescape Energy Partners III GP LLC. Charles John Wilder, Jr. may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares by virtue of Charles John Wilder, Jr. being the manager of Bluescape Resources GP Holdings LLC. Each of Bluescape Riley Exploration Acquisition LLC, Bluescape Riley Exploration Holdings LLC, Bluescape Energy Recapitalization and Restructuring Fund III LP, Bluescape Energy Partners III GP LLC, Bluescape Resources GP Holdings LLC, and Charles John Wilder, Jr. disclaims beneficial ownership of the shares reported as held by Bluescape Riley Exploration Holdings LLC in excess of its respective pecuniary interest in such shares. The address of Bluescape Riley Exploration Acquisition LLC and Bluescape Riley Exploration Holdings LLC and mailing address of each listed beneficial owner is 200 Crescent Court, Suite 1900, Dallas, Texas 75201. See “Principal Equityholders of REP” for additional information. |
(5) | Boomer Petroleum, LLC is a Delaware limited liability company that is owned 50% by Texel Resources Inc., a Canadian corporation, and 50% by Balmon California, Inc., a California corporation. The President of Boomer Petroleum, LLC is Alvin Libin, one of REP’s directors. The address of Boomer Petroleum, LLC is 3200 255 5th Avenue SW, Calgary, Alberta, Canada T2P 3G6. See “Principal Equityholders of REP” for additional information. |
Restricted Unitholder Name | | | Grant Date | | | Vesting Dates | | | Number of REP Restricted Units as of |
Bobby D. Riley | | | | | 2/1/2021 | | | ||
| 4/25/2019 | | | 2/1/2022 | | | 2,726.67 | ||
| | | 2/1/2021 | | | ||||
| | | 2/1/2022 | | | ||||
| 2/1/2020 | | | 2/1/2023 | | | 4,077 | ||
| | | 10/1/2021 | | | ||||
| | | 10/1/2022 | | | ||||
| 10/1/2020 | | | 10/1/2023 | | | 4,166.67 | ||
| | | 10/1/2021 | | | ||||
| | | 10/1/2022 | | | ||||
| 10/1/2020 | | | 10/1/2023 | | | 2,267.67 | ||
Kevin Riley | | | | | 2/1/2021 | | | ||
| 4/25/2019 | | | 2/1/2022 | | | 1,894 | ||
| | | 2/1/2021 | | | ||||
| | | 2/1/2022 | | | ||||
| 2/1/2020 | | | 2/1/2023 | | | 2,833 | ||
| | | 10/1/2021 | | | ||||
| | | 10/1/2022 | | |||||
| 10/1/2020 | | | 10/1/2023 | | | 2,916.67 | ||
Corey Riley | | | | | 2/1/2021 | | | ||
| | | 2/1/2022 | | | ||||
| 2/1/2020 | | | 2/1/2023 | | | 1,250 | ||
| | | 10/1/2021 | | | ||||
| | | 10/1/2022 | | | ||||
| 10/1/2020 | | | 10/1/2023 | | | 2,708.33 | ||
Michael Palmer | | | | | 2/1/2021 | | | ||
| | | 2/1/2022 | | | ||||
| 2/1/2020 | | | 2/1/2023 | | | 1,250 | ||
| | | 10/1/2021 | | | ||||
| | | 10/1/2022 | | | ||||
| 10/1/2020 | | | 10/1/2023 | | | 1,250 |
• | if there shall have been a breach of any representation, warranty, covenant, or agreement on the part of REP set forth in the merger agreement such that the conditions to the closing of the merger set forth in the merger agreement would not be satisfied and, in either such case, such breach is incapable of being cured by the End Date; provided, that TGC shall have given REP at least 30 days written notice prior to such termination stating TGC’s intention to terminate the merger agreement; provided further, that TGC shall not have the right to terminate the merger agreement pursuant to this provision if TGC or Merger Sub is then in material breach of any representation, warranty, covenant, or obligation under the merger agreement, which breach has not been cured; or |
Area | | Gross Production MBOE | | Average Net Revenue Interest | | Percentage of Total Oil Production | | Gross Production MBoe | | Average Net Revenue Interest | | Percentage of Total Oil Production | ||||||
Rooks County, KS | | 76.7 | | 0.830134 | | 69.1% | | 76.7 | | 0.830134 | | 69.1% | ||||||
Trego County, KS | | 12.8 | | 0.806984 | | 11.5% | | 12.8 | | 0.806984 | | 11.5% | ||||||
Ellis County, KS | | 5.8 | | 0.800628 | | 5.2% | | 5.8 | | 0.800628 | | 5.2% | ||||||
Barton County, KS | | 5.2 | | 0.814272 | | 4.7% | | 5.2 | | 0.814272 | | 4.7% | ||||||
Russell County, KS | | 2.9 | | 0.827102 | | 2.7% | | 2.9 | | 0.827102 | | 2.7% | ||||||
Graham County, KS | | 2.9 | | 0.873081 | | 2.6% | | 2.9 | | 0.873081 | | 2.6% | ||||||
Rush County, KS | | 2.1 | | 0.872476 | | 1.9% | | 2.1 | | 0.872476 | | 1.9% | ||||||
Osborne County, KS | | 1.2 | | 0.597838 | | 1.1% | | 1.2 | | 0.597838 | | 1.1% | ||||||
Pawnee County, KS | | 1.2 | | 0.833196 | | 1.1% | | 1.2 | | 0.833196 | | 1.1% | ||||||
Stafford County, KS | | 0.1 | | 0.716151 | | 0.1% | | 0.1 | | 0.716151 | | 0.1% | ||||||
Total | | 110.9 | | | 100.0% | | 110.9 | | | 100.0% |
Area | | | Proved Developed | | | Proved Undeveloped | | | Proved Reserves | | | % of Total |
Rooks County, KS | | | $5,885 | | | $— | | | $5,885 | | | 70.3% |
Trego County, KS | | | 1,029 | | | — | | | 1,029 | | | 12.3% |
Barton County, KS | | | 525 | | | — | | | 525 | | | 6.3% |
Ellis County, KS | | | 314 | | | — | | | 314 | | | 3.7% |
Graham County, KS | | | 248 | | | — | | | 248 | | | 3.0% |
Rush County, KS | | | 232 | | | — | | | 232 | | | 2.8% |
Russell County, KS | | | 68 | | | — | | | 68 | | | 0.8% |
Pawnee County, KS | | | 64 | | | — | | | 64 | | | 0.8% |
Osborne County, KS | | | — | | | — | | | — | | | —% |
Stafford County, KS | | | — | | | — | | | — | | | —% |
Ness County, KS | | | — | | | — | | | — | | | —% |
Logan County, KS | | | — | | | — | | | — | | | —% |
Total | | | $8,365 | | | $— | | | $8,365 | | | 100.0% |
| | Producing | | | Non-Producing | | | Undeveloped | | | Total | |
Oil (MBbl) | | | 766 | | | 37 | | | — | | | 803 |
Future net cash flows before income taxes discounted at 10% (in thousands) | | | $7,592 | | | $773 | | | $— | | | $8,365 |
| | Producing | | | Non-producing | | | Undeveloped | | | Total | |
Oil (MBbl) | | | 948 | | | 28 | | | 118 | | | 1,094 |
Future net cash flows before income taxes discounted at 10% (in thousands) | | | $12,534 | | | $739 | | | $703 | | | $13,976 |
Kansas | |||||||||||||||||||||
| | Gross Production | | | Net Production | | | Cost of Net Production | | | Average Sales Price | ||||||||||
Years Ended December 31, | | | Oil (MBbl) | | | Gas (MMcf) | | | Oil (MBbl) | �� | | Gas (MMcf) | | | (Per BOE) | | | Oil (Bbl) | | | Gas (Per Mcf) |
2019 | | | 111 | | | — | | | 91 | | | — | | | $34.55 | | | $52.12 | | | — |
2018 | | | 120 | | | — | | | 98 | | | — | | | $32.52 | | | $59.48 | | | — |
| | For Years Ending December 31, | ||||||||||
| | 2019 | | | 2018 | |||||||
| | Gross | | | Net | | | Gross | | | Net | |
Kansas | | | | | | | | | ||||
Productive Wells | | | 2 | | | 1.1 | | | 1 | | | 0.9 |
Dry Holes | | | 1 | | | 0.9 | | | 4 | | | 1.5 |
| | Developed | | | Undeveloped | | | Total | ||||||||||
| | Gross Acres | | | Net Acres | | | Gross Acres | | | Net Acres | | | Gross Acres | | | Net Acres | |
Kansas | | | 14,320 | | | 11,361 | | | 2,232 | | | 455 | | | 16,552 | | | 11,816 |
| | 2021 | | | Total | |
Gross Acres | | | 2,232 | | | 2,232 |
Net Acres | | | 455 | | | 455 |
Reserve Type | | Oil (MBbls)(1) | | Natural Gas (MMcf)(1) | | NGL (MBbls)(1) | | Total (MBoe)(1) | | %Oil | | % Liquids(2) | | % Developed(3) | | Oil (MBbls)(1) | | Natural Gas (MMcf)(1) | | NGL (MBbls)(1) | | Total (MBoe)(1) | | %Oil | | % Liquids(2) | | % Developed(3) | ||||||||||||||
Proved Reserves | | 37,158.8 | | 40,991.3 | | 10,812.3 | | 54,803.0 | | 68% | | 88% | | 53% | | 37,157.5 | | 53,683.4 | | 10,681.6 | | 56,786.3 | | 65% | | 84% | | 53% | ||||||||||||||
Probable Reserves | | 42,138.8 | | 42,444.4 | | 11,367.0 | | 60,580.0 | | 70% | | 88% | | | 42,612.5 | | 53,601.8 | | 11,580.5 | | 63,126.6 | | 68% | | 86% | | 2% | |||||||||||||||
Possible Reserves | | 6,804.8 | | 4,878.1 | | 1,307.7 | | 8,926.0 | | 76% | | 91% | | | 9,422.3 | | 9,376.3 | | 2,021.1 | | 13,006.3 | | 72% | | 88% | | 0% |
(1) | Prices used in this |
(2) | Includes both oil and NGLs. |
(3) | Includes both Proved Developed Producing and Proved Developed Non-Producing. |
Reserve Type | | Gross Horizontal Drilling Locations | | % by Reserve Type | | Net Horizontal Drilling Locations | | % by Reserve Type | | Gross Horizontal Drilling Locations | | % by Reserve Type | | Net Horizontal Drilling Locations | | % by Reserve Type | ||||||||
Proved | | 75 | | 31% | | 49 | | 29% | | 69 | | 30% | | 50 | | 29% | ||||||||
Probable | | 124 | | 51% | | 99 | | 58% | | 117 | | 50% | | 97 | | 56% | ||||||||
Possible | | 42 | | 17% | | 22 | | 13% | | 47 | | 20% | | 27 | | 15% | ||||||||
Total | | 241 | | 100% | | 170 | | 100% | | 233 | | 100% | | 174 | | 100% |
| | As of September 30, | |
Proved Reserves: | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Total Proved Reserves (MBoe) | | | |
Proved Developed Producing Reserves: | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Proved Developed Producing Reserves (MBoe) | | | |
Proved Developed Producing Reserves as a % of Proved Reserves | | | |
Proved Developed Non-Producing Reserves: | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Proved Developed Non-Producing Reserves (MBoe) | | | |
Proved Developed Non-Producing Reserves as a % of Proved Reserves | | | |
Proved Undeveloped Reserves: | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Proved Undeveloped Reserves (MBoe) | | | |
Proved Undeveloped Reserves as a % of Proved Reserves | | | 47% |
Probable Reserves:(2) | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Total Probable Reserves (MBoe) | | | |
Probable Developed Non-Producing Reserves:(2) | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Probable Developed Non-Producing Reserves (MBoe) | | | |
Probable Undeveloped Reserves:(2) | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Probable Undeveloped Reserves (MBoe) | | | |
Possible Reserves:(3) | | | |
Oil (MBbls) | | | |
Natural Gas (MMcf) | | | |
Natural Gas Liquids (MBbls) | | | |
Possible Undeveloped Reserves (MBoe) | | |
(1) | Prices used in this |
(2) | REP’s estimated probable reserves are classified as both developed non-producing and as undeveloped. |
Proved undeveloped reserves at September 30, 2019 | | | |
Conversions | | | (1,310.8) |
Extensions, discoveries and other additions | | | 2,008.1 |
Revisions | | | 192.1 |
Proved undeveloped reserves at September 30, 2020 | | | 26,600.7 |
| | For the Three Months Ended June 30, | | For the Nine Months Ended June 30, | | For the Years Ended September 30, | | | For the Years Ended September 30, | |||||||||||||||||||||
| | 2020 | | 2019 | | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | | 2020 | | 2019 | | 2018 | |||||||||
Total Sales Volumes: | | | | | | | | | | | ||||||||||||||||||||
Oil (MBbls) | | 487 | | 486 | | 1,564 | | 1,424 | | 1,975 | | 1,195 | | 470 | | 2,060 | | 1,975 | | 1,195 | ||||||||||
Natural Gas (MMcf) | | 400 | | 310 | | 1,162 | | 526 | | 886 | | 197 | | 76 | | 1,628 | | 886 | | 197 | ||||||||||
NGL (MBbls) | | 61 | | 53 | | 181 | | 83 | | 135 | | 41 | | 21 | | 260 | | 135 | | 41 | ||||||||||
Total (MBoe)(1) | | 615 | | 591 | | 1,938 | | 1,595 | | 2,258 | | 1,269 | | 503 | | 2,592 | | 2,258 | | 1,269 | ||||||||||
Daily Sales Volumes: | | | | | | | | | | | ||||||||||||||||||||
Oil sales (Bbl/d) | | 5,409 | | 5,403 | | 5,706 | | 5,217 | | 5,411 | | 3,274 | | 1,286 | | 5,630 | | 5,411 | | 3,274 | ||||||||||
Natural gas sales (Mcf/d) | | 4,444 | | 3,446 | | 4,242 | | 1,927 | | 2,428 | | 541 | | 209 | | 4,448 | | 2,428 | | 541 | ||||||||||
Natural gas liquids sales (Bbl/d) | | 682 | | 585 | | 660 | | 303 | | 370 | | 113 | | 58 | | 710 | | 370 | | 113 | ||||||||||
Total (BOE/d)(1) | | 6,757 | | 6,490 | | 7,073 | | 5,841 | | 6,186 | | 3,477 | | 1,379 | | 7,081 | | 6,186 | | 3,477 | ||||||||||
Average sales price(1): | | | | | | | | | | | ||||||||||||||||||||
Oil sales (per Bbl) | | $12.63 | | $54.85 | | $38.09 | | $50.53 | | $51.45 | | $57.19 | | $45.10 | | $36.35 | | $51.45 | | $57.19 | ||||||||||
Oil sales with derivative settlements (per Bbl)(2) | | 42.76 | | 53.91 | | 50.98 | | 50.38 | | 51.71 | | 50.89 | | 42.01 | | 49.41 | | 51.71 | | 50.89 | ||||||||||
Natural gas sales (per Mcf) | | (1.85) | | (0.58) | | (0.87) | | (0.17) | | (0.32) | | 2.04 | | 2.66 | | (0.78) | | (0.32) | | 2.04 | ||||||||||
Natural gas sales with derivative settlements (per Mcf)(2) | | (1.85) | | (0.58) | | (0.87) | | (0.17) | | (0.32) | | 2.04 | | 2.66 | | (0.78) | | (0.32) | | 2.04 | ||||||||||
Natural gas liquids sales (per Bbl) | | (7.31) | | (5.06) | | (3.95) | | (3.24) | | (1.74) | | 27.45 | | 20.38 | | (1.90) | | (1.74) | | 27.45 | ||||||||||
Natural gas liquids with derivative settlements (per Bbl)(2) | | (7.31) | | (5.06) | | (3.95) | | (3.24) | | (1.74) | | 27.45 | | 20.38 | | (1.90) | | (1.74) | | 27.45 | ||||||||||
Average price per BOE excluding derivative settlements(1)(2) | | 8.08 | | 44.37 | | 29.84 | | 44.97 | | 44.78 | | 52.53 | | 43.32 | | 28.22 | | 44.78 | | 52.53 | ||||||||||
Average price per BOE including derivative settlements(1)(2) | | 31.95 | | 43.59 | | 40.24 | | 44.83 | | 45.00 | | 46.60 | | 40.44 | | 38.61 | | 45.00 | | 46.60 | ||||||||||
Expenses per BOE(1): | | | | | | | | | | | ||||||||||||||||||||
Lease operating expenses | | $6.12 | | $11.71 | | $8.01 | | $9.86 | | $10.54 | | $8.70 | | $11.52 | | $8.10 | | $10.54 | | $8.70 | ||||||||||
Production and ad valorem taxes | | 0.48 | | 2.15 | | 1.45 | | 2.14 | | 2.13 | | 2.53 | | 2.40 | | 1.36 | | 2.13 | | 2.53 | ||||||||||
Exploration expenses | | 10.99 | | 1.80 | | 4.76 | | 2.02 | | 2.25 | | 4.72 | | 23.62 | | 3.83 | | 2.25 | | 4.72 | ||||||||||
Depletion, depreciation, amortization, and accretion | | 8.18 | | 9.15 | | 8.27 | | 9.32 | | 8.94 | | 12.38 | | 11.68 | | 8.29 | | 8.94 | | 12.38 | ||||||||||
General and administrative expenses, inclusive of unit-based compensation expense(3) | | 3.62 | | 5.48 | | 4.81 | | 6.08 | | 5.79 | | 11.17 | | 11.54 | | 3.08 | | 4.95 | | 11.17 | ||||||||||
Transaction costs(4) | | 0.02 | | — | | 0.02 | | 2.19 | | 2.02 | | 0.69 | | 3.51 | | 0.55 | | 2.02 | | 0.69 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average prices shown in table reflect prices both before and after the effects of REP’s settlements of our commodity derivative contracts. REP’s calculation of such effects includes both gains or losses on cash settlements for commodity derivatives. |
(3) | General and administrative expenses, inclusive of unit-based compensation expense shown after effect of revenue from contract services for management services agreement. |
(4) | Transaction costs include non-cash cost related to our previously aborted IPO. |
Proved Developed Producing | | | Wells | | | Avg. WI |
Operated | | | 67 | | | 95% |
Non-Operated | | | 63 | | | 11% |
Total | | | 130 | | | 54% |
Proved Developed Producing | | | Wells | | | Avg. WI |
Operated | | | 64 | | | 94% |
Non-Operated | | | 63 | | | 11% |
Total | | | 127 | | | 53% |
Developed Acreage(1) | Developed Acreage(1) | | Undeveloped Acreage(2) | | Total Acreage(5) | Developed Acreage(1) | | Undeveloped Acreage(2) | | Total Acreage(5) | ||||||||||||||||||||
Gross(3) | | Net(4) | | Gross(3) | | Net(4) | | Gross(3) | | Net(4) | | Net(4) | | Gross(3) | | Net(4) | | Gross(3) | | Net(4) | ||||||||||
18,526 | | 11,589 | | 46,664 | | 33,292 | | 65,189 | | 44,880 | ||||||||||||||||||||
18,529 | | 11,792 | | 48,142 | | 33,385 | | 66,671 | | 45,178 |
(1) | Developed acreage is acres spaced or assigned to productive wells and does not include undrilled acreage held by production under the terms of the lease. |
(2) | Undeveloped acreage are acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil or natural gas, regardless of whether such acreage contains proved reserves. |
(3) | A gross acre is an acre in which a working interest is owned. The number of gross acres is the total number of acres in which a working interest is owned. |
(4) | A net acre is deemed to exist when the sum of the fractional ownership working interests in gross acres equals one. The number of net acres is the sum of the fractional working interests owned in gross acres expressed as whole numbers and fractions thereof. |
Net Undeveloped Acreage(1) | ||||||
2020 | | | 2021 | | | 2022+ |
3,226 | | | 20,850 | | | 2,694 |
Net Undeveloped Acreage(1) | ||||||
2021 | | | 2022 | | | 2023+ |
23,466 | | | 2,084 | | | 26,208 |
(1) | All acreage represented is as of |
| | For the Nine Months Ended | | Year Ended | | | Year Ended | |||||||||||||||||||||||||||||||||||
| | June 30, | | September 30, | | | September 30, | |||||||||||||||||||||||||||||||||||
| | 2020 | | 2019 | | 2018 | | 2017 | | | 2020 | | 2019 | | 2018 | |||||||||||||||||||||||||||
| | Gross(3) | | Net(3) | | Gross | | Net | | Gross | | Net | | Gross | | Net | | | Gross | | Net | | Gross | | Net | | Gross | | Net | |||||||||||||
Development Wells: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Productive(1) | | 19 | | 11 | | 19 | | 14 | | 24 | | 12 | | 21 | | 11 | | 11 | | 3 | | 20 | | 13 | | 25 | | 13 | ||||||||||||||
Dry(2) | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Exploratory Wells: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Productive(1) | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Dry(2) | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||
Total Wells: | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Productive(1) | | 19 | | 11 | | 19 | | 14 | | 24 | | 12 | | 21 | | 11 | | 11 | | 3 | | 20 | | 13 | | 25 | | 13 | ||||||||||||||
Dry(2) | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — |
(1) | Although a well may be classified as productive upon completion, future changes in oil, natural gas and NGL prices, operating costs and production may result in the well becoming uneconomical, particularly exploratory wells where there is no production history. |
(2) | Does not include a wellbore temporarily abandoned due to mechanical failure. |
| | Year Ended December 31, 2019 | | | Year Ended December 31,2018 | |
Revenue (in thousands): | | | | | ||
Crude oil | | | $4,884 | | | $5,840 |
Saltwater disposal fees | | | 27 | | | 31 |
Total | | | $4,911 | | | $5,871 |
Contractual Obligations | | | Total | | | 2020 | | | 2021 | | | 2022 |
Long-Term Debt Obligations(1) | | | $— | | | $— | | | $— | | | $— |
Operating Lease Obligations | | | 42 | | | 42 | | | — | | | — |
Finance Lease Obligations | | | 104 | | | 65 | | | 39 | | | — |
Estimated Interest on Obligations | | | 7 | | | 6 | | | 1 | | | — |
Total | | | $153 | | | $113 | | | $40 | | | $— |
(1) | The credit facility with Prosperity Bank had a zero balance at December 31, 2019. |
| | For the Nine Months Ended June 30, | | For the Years Ended September 30 | | | For the Years Ended September 30, | |||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | | 2020 | | 2019 | | 2018 | |||||||
Oil (MBbls) | | 1,564 | | 1,424 | | 1,975 | | 1,195 | | 470 | | 2,060 | | 1,975 | | 1,195 | ||||||||
Natural gas (MMcf) | | 1,162 | | 526 | | 886 | | 197 | | 76 | | 1,628 | | 886 | | 197 | ||||||||
NGL (MBbls) | | 181 | | 83 | | 135 | | 41 | | 21 | | 260 | | 135 | | 41 | ||||||||
Total (MBoe)(1) | | 1,939 | | 1,595 | | 2,258 | | 1,269 | | 504 | | 2,592 | | 2,258 | | 1,269 | ||||||||
Average net sales (BOE/d) | | 7,073 | | 5,841 | | 6,186 | | 3,477 | | 1,379 | | 7,081 | | 6,186 | | 3,477 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average net sales (BOE/d) was derived by dividing the total MBoe by 366 days for the year ended 2020 and by 365 days for the years ended 2019 and 2018. |
| | For the Nine Months Ended June 30, | | For the Years Ended September 30, | | | For the Years Ended September 30, | |||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | | 2020 | | 2019 | | 2018 | |||||||
Oil | | | | | | | | | ||||||||||||||||
NYMEX WTI High ($/Bbl) | | $63.27 | | $76.40 | | $76.40 | | $77.41 | | $54.48 | | $63.27 | | $76.40 | | $77.41 | ||||||||
NYMEX WTI Low ($/Bbl) | | (36.98) | | 44.48 | | 44.48 | | 49.34 | | 42.48 | | (36.98) | | 44.48 | | 49.34 | ||||||||
NYMEX WTI Average ($/Bbl) | | 43.37 | | 57.76 | | 57.76 | | 64.01 | | 49.26 | | 42.74 | | 57.76 | | 64.01 | ||||||||
Average Realized Price ($/Bbl) | | 38.09 | | 50.53 | | 51.45 | | 57.19 | | 45.10 | | 36.35 | | 51.45 | | 57.19 | ||||||||
Average Realized Price, with derivative settlements ($/Bbl) | | 50.98 | | 50.38 | | 51.71 | | 50.89 | | 42.01 | | 49.41 | | 51.71 | | 50.89 | ||||||||
Averaged Realized Price as a % of Average NYMEX WTI(1) | | 88% | | 87% | | 89% | | 89% | | 92% | | 85% | | 89% | | 89% | ||||||||
Differential ($/Bbl) to Average NYMEX WTI | | (5.28) | | (7.22) | | (6.30) | | (6.82) | | (4.16) | | (6.39) | | (6.30) | | (6.82) | ||||||||
Natural Gas(3) | | | | | | | | | ||||||||||||||||
NYMEX Henry Hub High ($/MMBtu) | | $2.87 | | $4.70 | | $4.70 | | $6.24 | | $3.80 | | $2.87 | | $4.70 | | $6.24 | ||||||||
NYMEX Henry Hub Low ($/MMBtu) | | 1.50 | | 2.02 | | 2.02 | | 2.49 | | 2.08 | | 1.33 | | 2.02 | | 2.49 | ||||||||
NYMEX Henry Hub Average ($/MMBtu) | | 2.11 | | 2.94 | | 2.94 | | 2.94 | | 3.03 | | 2.00 | | 2.90 | | 2.94 | ||||||||
Average Realized Price ($/Mcf) | | (0.87) | | (0.17) | | (0.32) | | 2.04 | | 2.66 | | (0.78) | | (0.33) | | 2.04 | ||||||||
Average Realized Price, with derivative settlements ($/Mcf) | | (0.87) | | (0.17) | | (0.32) | | 2.04 | | 2.66 | | (0.78) | | (0.33) | | 2.04 | ||||||||
Averaged Realized Price as a % of Average NYMEX Henry Hub | | -41% | | -6% | | -11% | | 69% | | 88% | | -39% | | -11% | | 69% | ||||||||
Differential ($/Mcf) to Average NYMEX Henry Hub(1) | | (2.98) | | (3.11) | | (3.26) | | (0.90) | | (0.37) | | (2.78) | | (3.23) | | (0.90) | ||||||||
Natural Gas Liquids(3) | | | | | | | | | ||||||||||||||||
Average Realized Price ($/Bbl) | | $(3.95) | | $(3.24) | | $(1.74) | | $27.45 | | $20.38 | | $(1.90) | | $(1.75) | | $27.44 | ||||||||
Averaged Realized Price as a % of Average NYMEX WTI | | -9% | | -6% | | -3% | | 43% | | 41% | | -4% | | -3% | | 43% | ||||||||
BOE (Barrel of Oil Equivalent) | | | | | | | | | ||||||||||||||||
Average price per BOE(1) | | $29.84 | | $44.97 | | $44.78 | | $52.53 | | $43.32 | | $28.22 | | $44.78 | | $55.05 | ||||||||
Average price per BOE with derivative settlements(1)(2) | | 40.24 | | 44.83 | | 45.00 | | 46.60 | | 40.44 | | 38.61 | | 45.00 | | 49.12 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average prices shown in table reflect prices both before and after the effects of our settlements of REP’s commodity derivative contracts. REP’s calculation of such effects includes both gains or losses on cash settlements for commodity derivatives. |
(3) | Realized prices are reflected at net of the deduction of gathering, processing and transportation costs. |
Calendar Quarter | | Notional Volume | | | Weighted Average Price | |||||||||||||||||||
| | | Weighted Average Price | |||||||||||||||||||||
Calendar Quarter | | Notional Volume | | | Fixed | | Put | | Call | | Notional Volume | | Fixed | | Put | | Call | |||||||
| ($ per Bbl) | | | (Bbl) | | ($ per Bbl) | ||||||||||||||||||
Crude Oil Swaps(1) | | | | | | | | | ||||||||||||||||
Q3 2020 | | 285,000 | | $52.98 | | $— | | $— | ||||||||||||||||
Q4 2020 | | 339,000 | | $57.15 | | $— | | $— | | 339,000 | | $57.15 | | $— | | $— | ||||||||
2021 | | 1,380,000 | | $54.49 | | $— | | $— | ||||||||||||||||
Q1 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q2 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q3 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q4 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
2022 | | 360,000 | | $45.25 | | $— | | $— | ||||||||||||||||
Crude Oil Collars(1) | | | | | | | | | ||||||||||||||||
Q3 2020 | | 45,000 | | $— | | $50.00 | | $56.48 | ||||||||||||||||
Q4 2020 | | 45,000 | | $— | | $50.00 | | $56.48 | | 45,000 | | $— | | $50.00 | | $56.48 | ||||||||
2021 | | — | | $— | | $— | | $— | ||||||||||||||||
2022 | | 360,000 | | $— | | $35.00 | | $42.63 | | 360,000 | | $— | | $35.00 | | $42.63 | ||||||||
Crude Oil Basis(2) | | | | | | | | | ||||||||||||||||
Q3 2020 | | 384,000 | | $0.25 | | $— | | $— | ||||||||||||||||
Q4 2020 | | 384,000 | | $0.39 | | $— | | $— | | 384,000 | | $0.39 | | $— | | $— | ||||||||
2021 | | 1,740,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q1 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q2 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q3 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q4 2021 | | 435,000 | | $0.40 | | $— | | $— |
(1) | Reference Price is NYMEX WTI Price, referring to the West Texas Intermediate crude oil price on the New York Mercantile Exchange. |
(2) | Reference Price is NYMEX WTI vs. WTI Midland (Argus) Calendar Trade Month. |
| | Historical Derivative Positions and Settlement Amounts | |||||||||||||
| | For the Nine Months ended June 30, | | | For the Years Ended September 30, | ||||||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
NYMEX WTI Crude Swaps(1): | | | | | | | | | | | |||||
Notional volume (MBbl) | | | 2,538 | | | 2,982 | | | 3,267 | | | 697 | | | 107 |
Weighted average fixed price ($/Bbl) | | | $53.77 | | | $56.22 | | | $56.05 | | | $54.82 | | | $49.37 |
NYMEX WTI Crude Collars(1): | | | | | | | | | | | |||||
Notional volume (MBbl) | | | | | | | | | | | |||||
Weighted average fixed price ($/Bbl) | | | | | | | | | | | |||||
NYMEX WTI vs. WTI Midland (Argus) Crude Basis (2): | | | | | | | | | | | |||||
Notional volume (MBbl) | | | | | | | | | | | |||||
Weighted average fixed price ($/Bbl) | | | | | | | | | | | |||||
Total Amounts Received/(Paid) from Settlement (in thousands) | | | $20,161 | | | $(217) | | | $514 | | | $(7,527) | | | $173 |
| | Historical Derivative Positions and Settlement Amounts | |||||||
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Fair value of net asset (liability) beginning of period | | | $14,959 | | | $ (11,239) | | | $(1,623) |
Gain (loss) on derivatives | | | 33,876 | | | 26,712 | | | (17,143) |
Net cash (receipts) from payments on derivatives | | | (26,914) | | | (514) | | | 7,527 |
Fair value of net asset (liability) end of period | | | $21,921 | | | $14,959 | | | $(11,239) |
(1) | NYMEX WTI refers to West Texas Intermediate crude oil price on the New York Mercantile Exchange. |
(2) | Reference Price is NYMEX WTI vs. WTI Midland (Argus) Calendar Trade Month. |
| | For the Nine Months Ended June 30, (unaudited) | | For the Years Ended September 30, | | | For the Years Ended September 30, | |||||||||||||||||
| (in thousands) | | | (in thousands) | ||||||||||||||||||||
| | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | | 2020 | | 2019 | | 2018 | |||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDAX | | | | | | | | | ||||||||||||||||
Net Income (Loss) | | $40,228 | | $30,332 | | $51,866 | | $(723) | | $(11,974) | | $35,144 | | $51,866 | | $(723) | ||||||||
Exploration expense | | 9,231 | | 3,227 | | 5,074 | | 5,992 | | 11,882 | | 9,923 | | 5,074 | | 5,992 | ||||||||
Depletion, depreciation, amortization and accretion | | 16,020 | | 14,870 | | 20,182 | | 15,714 | | 5,876 | | 21,479 | | 20,182 | | 15,714 | ||||||||
Interest expense | | 4,086 | | 3,545 | | 4,924 | | 1,707 | | — | | 5,299 | | 4,924 | | 1,707 | ||||||||
Unrealized (gain)/loss on derivatives | | (16,838) | | (11,914) | | (26,198) | | 9,616 | | 1,623 | | (6,962) | | (26,198) | | 9,616 | ||||||||
Unit-based compensation expense | | 650 | | 745 | | 898 | | — | | — | | 963 | | 898 | | 4,000 | ||||||||
Restructuring costs | | 392 | | — | | — | ||||||||||||||||||
Transaction costs | | 42 | | 3,490 | | 4,553 | | 878 | | 1,766 | | 1,431 | | 4,553 | | 878 | ||||||||
Income tax expense | | 319 | | — | | 1,410 | | — | | — | | 718 | | 1,410 | | — | ||||||||
| | | | | ||||||||||||||||||||
Adjusted EBITDAX | | $51,738 | | $44,295 | | $62,709 | | $33,184 | | $9,173 | | $68,387 | | $62,709 | | $37,184 |
| | For the Three Months Ended June 30, | | For the Nine Months Ended June 30, | | For the Years Ended September 30, | ||||||||||||||||||||||||
| (unaudited) | | (unaudited) | | | | | | For the Years Ended September 30, | |||||||||||||||||||||
| | 2020 | | 2019 | | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | | ($ and units in thousands, except per unit amounts) | |||||||||||||
| ($ in Thousands, Except Unit and Per Unit Amounts) | | | 2020 | | 2019 | | 2018 | ||||||||||||||||||||||
Statement of Operations Data: | | | | | | | | | | | ||||||||||||||||||||
Revenues: | | | | | | | | | | | ||||||||||||||||||||
Oil and natural gas sales, net | | $4,969 | | $26,207 | | $57,824 | | $71,713 | | $101,096 | | $69,872 | | $21,808 | | $73,133 | | $101,096 | | $69,872 | ||||||||||
Contract services - related parties | | 1,050 | | 900 | | 3,150 | | 900 | | 1,900 | | — | | — | | 3,800 | | 1,900 | | — | ||||||||||
Total Revenues | | 6,019 | | 27,107 | | 60,974 | | 72,613 | | 102,996 | | 69,872 | | 21,808 | | 76,933 | | 102,996 | | 69,872 | ||||||||||
Operating Expenses: | | | | | | | | | | | ||||||||||||||||||||
Lease operating expenses | | 3,760 | | 6,917 | | 15,517 | | 15,732 | | 23,808 | | 11,044 | | 5,796 | | 20,997 | | 23,808 | | 11,044 | ||||||||||
Gathering, processing & transportation | | — | | — | | — | | — | | — | | 735 | | — | | — | | — | | 735 | ||||||||||
Production taxes | | 293 | | 1,267 | | 2,808 | | 3,409 | | 4,804 | | 3,207 | | 1,206 | | 3,526 | | 4,804 | | 3,207 | ||||||||||
Exploration costs | | 6,757 | | 1,061 | | 9,231 | | 3,227 | | 5,074 | | 5,992 | | 11,882 | | 9,923 | | 5,074 | | 5,992 | ||||||||||
Depletion, depreciation, amortization, and accretion | | 5,028 | | 5,402 | | 16,020 | | 14,870 | | 20,182 | | 15,714 | | 5,876 | | 21,479 | | 20,182 | | 15,714 | ||||||||||
General and administrative costs | | | | | | | | | | | ||||||||||||||||||||
Administrative Costs | | 1,936 | | 3,136 | | 8,669 | | 8,960 | | 12,168 | | 14,175 | | 5,806 | | 10,826 | | 12,168 | | 14,175 | ||||||||||
Unit-based compensation expense | | 291 | | 101 | | 650 | | 745 | | 898 | | — | | — | | 963 | | 898 | | — | ||||||||||
Cost of contract services - related party | | 97 | | — | | 403 | | — | | 21 | | — | | — | | 503 | | 21 | | — | ||||||||||
Transaction costs | | 15 | | — | | 42 | | 3,490 | | 4,553 | | 878 | | 1,766 | | 1,431 | | 4,553 | | 878 | ||||||||||
Total Operating Expenses | | 18,177 | | 17,884 | | 53,340 | | 50,433 | | 71,508 | | 51,745 | | 32,332 | | 69,648 | | 71,508 | | 51,745 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Income (Loss) From Operations | | (12,158) | | 9,223 | | 7,634 | | 22,180 | | 31,488 | | 18,127 | | (10,524) | | 7,285 | | 31,488 | | 18,127 | ||||||||||
Other Income (Expenses): | | | | | | | | | | | ||||||||||||||||||||
Interest Expense | | (1,302) | | (1,369) | | (4,086) | | (3,545) | | (4,924) | | (1,707) | | — | | (5,299) | | (4,924) | | (1,707) | ||||||||||
Gain (loss) on derivatives | | (14,205) | | 5,733 | | 36,999 | | 11,697 | | 26,712 | | (17,143) | | (1,450) | | 33,876 | | 26,712 | | (17,143) | ||||||||||
Total Other Income (Expense) | | (15,507) | | 4,364 | | 32,913 | | 8,152 | | 21,788 | | (18,850) | | (1,450) | | 28,577 | | 21,788 | | (18,850) | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Net Income (Loss) Before Income Taxes | | (27,665) | | 13,587 | | 40,547 | | 30,332 | | 53,276 | | (723) | | (11,974) | | 35,862 | | 53,276 | | (723) | ||||||||||
Income Tax Expense | | (319) | | — | | (319) | | — | | (1,410) | | — | | | (718) | | (1,410) | | — | |||||||||||
Net Income (Loss) | | (27,984) | | 13,587 | | 40,228 | | 30,332 | | 51,866 | | (723) | | (11,974) | | 35,144 | | 51,866 | | (723) | ||||||||||
Dividends on Preferred Units | | (890) | | (839) | | (2,631) | | (2,479) | | (3,330) | | (3,129) | | (1,409) | | (3,535) | | (3,330) | | (3,129) | ||||||||||
Net Income (Loss) Attributable to Common Unitholders | | $(28,874) | | $12,748 | | $37,597 | | $27,853 | | $48,536 | | $(3,852) | | $(13,383) | | $31,609 | | $48,536 | | $(3,852) | ||||||||||
Net Income (loss) per unit: | | | | | | | | | | | ||||||||||||||||||||
Basic | | $(18.87) | | $8.35 | | $24.60 | | $18.31 | | $31.87 | | $(2.57) | | $(11.63) | | $20.67 | | $31.87 | | $(2.57) | ||||||||||
Diluted | | $(18.87) | | $6.80 | | $19.86 | | $15.28 | | $26.03 | | $(2.57) | | $(11.63) | | $17.24 | | $26.03 | | $(2.57) | ||||||||||
Weighted Average Common Units Outstanding: | | | | | | | | | | | ||||||||||||||||||||
Basic | | 1,529,937 | | 1,527,460 | | 1,528,094 | | 1,521,358 | | 1,522,883 | | 1,500,000 | | 1,151,000 | | 1,529 | | 1,523 | | 1,500 | ||||||||||
Diluted | | 1,529,937 | | 1,998,100 | | 2,025,192 | | 1,985,179 | | 1,987,615 | | 1,500,000 | | 1,151,000 | | 2,038 | | 1,992 | | 1,500 |
| | For the Three Months Ended June 30, | | For the Nine Months Ended June 30, | | For the Years Ended September 30, | | | For the Years Ended September 30, | |||||||||||||||||||||
| | 2020 | | 2019 | | 2020 | | 2019 | | 2019 | | 2018 | | 2017 | | | 2020 | | 2019 | | 2018 | |||||||||
Total Sales Volumes: | | | | | | | | | | | ||||||||||||||||||||
Oil (MBbls) | | 487 | | 486 | | 1,564 | | 1,424 | | 1,975 | | 1,195 | | 470 | | 2,060 | | 1,975 | | 1,195 | ||||||||||
Natural Gas (MMcf) | | 400 | | 310 | | 1,162 | | 526 | | 886 | | 197 | | 76 | | 1,628 | | 886 | | 197 | ||||||||||
NGL (MBbls) | | 61 | | 53 | | 181 | | 83 | | 135 | | 41 | | 21 | | 260 | | 135 | | 41 | ||||||||||
Total (MBoe)(1) | | 615 | | 591 | | 1,938 | | 1,595 | | 2,258 | | 1,269 | | 503 | | 2,592 | | 2,258 | | 1,269 | ||||||||||
Daily Sales Volumes: | | | | | | | | | | | ||||||||||||||||||||
Oil sales (Bbl/d) | | 5,409 | | 5,403 | | 5,706 | | 5,217 | | 5,411 | | 3,274 | | 1,286 | | 5,630 | | 5,411 | | 3,274 | ||||||||||
Natural gas sales (Mcf/d) | | 4,444 | | 3,446 | | 4,242 | | 1,927 | | 2,428 | | 541 | | 209 | | 4,448 | | 2,428 | | 541 | ||||||||||
Natural gas liquids sales (Bbl/d) | | 682 | | 585 | | 660 | | 303 | | 370 | | 113 | | 58 | | 710 | | 370 | | 113 | ||||||||||
Total (BOE/d)(1) | | 6,757 | | 6,490 | | 7,073 | | 5,841 | | 6,186 | | 3,477 | | 1,379 | | 7,081 | | 6,186 | | 3,477 | ||||||||||
Average sales price(1): | | | | | | | | | | | ||||||||||||||||||||
Oil sales (per Bbl) | | $12.63 | | $54.85 | | $38.09 | | $50.53 | | $51.45 | | $57.19 | | $45.10 | | $36.35 | | $51.45 | | $57.19 | ||||||||||
Oil sales with derivative settlements (per Bbl)(2) | | 42.76 | | 53.91 | | 50.98 | | 50.38 | | 51.71 | | 50.89 | | 42.01 | | 49.41 | | 51.71 | | 50.89 | ||||||||||
Natural gas sales (per Mcf) | | (1.85) | | (0.58) | | (0.87) | | (0.17) | | (0.32) | | 2.04 | | 2.66 | | (0.78) | | (0.33) | | 2.04 | ||||||||||
Natural gas sales with derivative settlements (per Mcf)(2) | | (1.85) | | (0.58) | | (0.87) | | (0.17) | | (0.32) | | 2.04 | | 2.66 | | (0.78) | | (0.33) | | 2.04 | ||||||||||
Natural gas liquids sales (per Bbl) | | (7.31) | | (5.06) | | (3.95) | | (3.24) | | (1.74) | | 27.45 | | 20.38 | | (1.90) | | (1.75) | | 27.44 | ||||||||||
Natural gas liquids with derivative settlements (per Bbl)(2) | | (7.31) | | (5.06) | | (3.95) | | (3.24) | | (1.74) | | 27.45 | | 20.38 | | (1.90) | | (1.75) | | 27.44 | ||||||||||
Average price per BOE excluding derivative settlements(1)(2) | | 8.08 | | 44.37 | | 29.84 | | 44.97 | | 44.78 | | 52.53 | | 43.32 | | 28.22 | | 44.78 | | 55.05 | ||||||||||
Average price per BOE including derivative settlements(1)(2) | | 31.95 | | 43.59 | | 40.24 | | 44.83 | | 45.00 | | 46.60 | | 40.44 | | 38.61 | | 45.00 | | 49.12 | ||||||||||
Expenses per BOE(1): | | | | | | | | | | | ||||||||||||||||||||
Lease operating expenses | | $6.12 | | $11.71 | | $8.01 | | $9.86 | | $10.54 | | $8.70 | | $11.52 | | $8.10 | | $10.54 | | $8.70 | ||||||||||
Production and ad valorem taxes | | 0.48 | | 2.15 | | 1.45 | | 2.14 | | 2.13 | | 2.53 | | 2.40 | | 1.36 | | 2.13 | | 2.53 | ||||||||||
Exploration expenses | | 10.99 | | 1.80 | | 4.76 | | 2.02 | | 2.25 | | 4.72 | | 23.62 | | 3.83 | | 2.25 | | 4.72 | ||||||||||
Depletion, depreciation, amortization, and accretion | | 8.18 | | 9.15 | | 8.27 | | 9.32 | | 8.94 | | 12.38 | | 11.68 | | 8.29 | | 8.94 | | 12.38 | ||||||||||
General and administrative expenses, inclusive of unit-based compensation expense(3) | | 3.62 | | 5.48 | | 4.81 | | 6.08 | | 5.79 | | 11.17 | | 11.54 | | 3.08 | | 4.95 | | 11.17 | ||||||||||
Transaction costs(4) | | 0.02 | | ��� | — | | 0.02 | | 2.19 | | 2.02 | | 0.69 | | 3.51 | | 0.55 | | 2.02 | | 0.69 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average prices shown in table reflect prices both before and after the effects of REP’s settlements of our commodity derivative contracts. REP’s calculation of such effects includes both gains or losses on cash settlements for commodity derivatives. |
(3) | General and administrative expenses, inclusive of unit-based compensation expense shown after effect of revenue from contract services for management services agreement. |
(4) | Transaction costs include non-cash cost related to REP’s previously aborted IPO. |
| | For the Nine Months Ended June 30, | | | For the Years Ended September 30, | ||||||||||
| | (unaudited) | | | | | | | |||||||
| | 2020 | | | 2019 | | | 2019 | | | 2018 | | | 2017 | |
| | (in Thousands) | |||||||||||||
Statement of Cash Flows Data: | | | | | | | | | | | |||||
Net cash provided by operating activities | | | 49,509 | | | 37,694 | | | 52,007 | | | 38,619 | | | 3,289 |
Net cash used in investing activities | | | (46,202) | | | (69,473) | | | (83,398) | | | (88,389) | | | (54,781) |
Net cash provided by financing activities | | | (6,115) | | | 32,232 | | | 31,778 | | | 49,426 | | | 55,175 |
Contractual Obligations | | | Total | | | 2020 | | | 2021 | | | 2022 |
Long-Term Debt Obligations(1) | | | $— | | | $— | | | $— | | | $— |
Operating Lease Obligations | | | 42 | | | 42 | | | — | | | — |
Finance Lease Obligations | | | 104 | | | 65 | | | 39 | | | — |
Estimated Interest on Obligations | | | 7 | | | 6 | | | 1 | | | — |
Total | | | $153 | | | $113 | | | $40 | | | $— |
(1) | The credit facility with Prosperity Bank had a zero balance at December 31, 2019. |
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Oil (MBbls) | | | 2,060 | | | 1,975 | | | 1,195 |
Natural gas (MMcf) | | | 1,628 | | | 886 | | | 197 |
NGL (MBbls) | | | 260 | | | 135 | | | 41 |
Total (MBoe)(1) | | | 2,592 | | | 2,258 | | | 1,269 |
Average net sales (BOE/d)(2) | | | 7,081 | | | 6,186 | | | 3,477 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average net sales (BOE/d) was derived by dividing the total MBoe by 366 days for the year ended 2020 and by 365 days for the years ended 2019 and 2018. |
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Oil | | | | | | | |||
NYMEX WTI High ($/Bbl) | | | $63.27 | | | $76.40 | | | $77.41 |
NYMEX WTI Low ($/Bbl) | | | (36.98) | | | 44.48 | | | 49.34 |
NYMEX WTI Average ($/Bbl) | | | 42.74 | | | 57.76 | | | 64.01 |
Average Realized Price ($/Bbl) | | | 36.35 | | | 51.45 | | | 57.19 |
Average Realized Price, with derivative settlements ($/Bbl) | | | 49.41 | | | 51.71 | | | 50.89 |
Averaged Realized Price as a % of Average NYMEX WTI(1) | | | 85% | | | 89% | | | 89% |
Differential ($/Bbl) to Average NYMEX WTI | | | (6.39) | | | (6.30) | | | (6.82) |
Natural Gas(3) | | | | | | | |||
NYMEX Henry Hub High ($/MMBtu) | | | $2.87 | | | $4.70 | | | $6.24 |
NYMEX Henry Hub Low ($/MMBtu) | | | 1.33 | | | 2.02 | | | 2.49 |
NYMEX Henry Hub Average ($/MMBtu) | | | 2.00 | | | 2.90 | | | 2.94 |
Average Realized Price ($/Mcf) | | | (0.78) | | | (0.33) | | | 2.04 |
Average Realized Price, with derivative settlements ($/Mcf) | | | (0.78) | | | (0.33) | | | 2.04 |
Averaged Realized Price as a % of Average NYMEX Henry Hub | | | -39% | | | -11% | | | 69% |
Differential ($/Mcf) to Average NYMEX Henry Hub(1) | | | (2.78) | | | (3.23) | | | (0.90) |
Natural Gas Liquids(3) | | | | | | | |||
Average Realized Price ($/Bbl) | | | $(1.90) | | | $(1.75) | | | $27.44 |
Averaged Realized Price as a % of Average NYMEX WTI | | | -4% | | | -3% | | | 43% |
BOE (Barrel of Oil Equivalent) | | | | | | | |||
Average price per BOE(1) | | | $28.22 | | | $44.78 | | | $55.05 |
Average price per BOE with derivative settlements(1)(2) | | | 38.61 | | | 45.00 | | | 49.12 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average prices shown in table reflect prices both before and after the effects of our settlements of REP’s commodity derivative contracts. REP’s calculation of such effects includes both gains or losses on cash settlements for commodity derivatives. |
(3) | Realized prices are reflected at net of the deduction of gathering, processing and transportation costs. |
| | | | Weighted Average Price | ||||||||
Calendar Quarter | | | Notional Volume | | | Fixed | | | Put | | | Call |
| | (Bbl) | | | ($ per Bbl) | |||||||
Crude Oil Swaps(1) | | | | | | | | | ||||
Q4 2020 | | | 339,000 | | | $57.15 | | | $— | | | $— |
Q1 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q2 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q3 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q4 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
2022 | | | 360,000 | | | $45.25 | | | $— | | | $— |
Crude Oil Collars(1) | | | | | | | | | ||||
Q4 2020 | | | 45,000 | | | $— | | | $50.00 | | | $56.48 |
2022 | | | 360,000 | | | $— | | | $35.00 | | | $42.63 |
Crude Oil Basis(2) | | | | | | | | | ||||
Q4 2020 | | | 384,000 | | | $0.39 | | | $— | | | $— |
Q1 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q2 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q3 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q4 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
(1) | Reference Price is NYMEX WTI Price, referring to the West Texas Intermediate crude oil price on the New York Mercantile Exchange. |
(2) | Reference Price is NYMEX WTI vs. WTI Midland (Argus) Calendar Trade Month. |
| | Historical Derivative Positions and Settlement Amounts | |||||||
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Fair value of net asset (liability) beginning of period | | | $14,959 | | | $ (11,239) | | | $(1,623) |
Gain (loss) on derivatives | | | 33,876 | | | 26,712 | | | (17,143) |
Net cash (receipts) from payments on derivatives | | | (26,914) | | | (514) | | | 7,527 |
Fair value of net asset (liability) end of period | | | $21,921 | | | $14,959 | | | $(11,239) |
(1) | NYMEX WTI refers to West Texas Intermediate crude oil price on the New York Mercantile Exchange. |
(2) | Reference Price is NYMEX WTI vs. WTI Midland (Argus) Calendar Trade Month. |
| | For the Years Ended September 30, | |||||||
| | (in thousands) | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Reconciliation of Net Income (Loss) to Adjusted EBITDAX | | | | | | | |||
Net Income (Loss) | | | $35,144 | | | $51,866 | | | $(723) |
Exploration expense | | | 9,923 | | | 5,074 | | | 5,992 |
Depletion, depreciation, amortization and accretion | | | 21,479 | | | 20,182 | | | 15,714 |
Interest expense | | | 5,299 | | | 4,924 | | | 1,707 |
Unrealized (gain)/loss on derivatives | | | (6,962) | | | (26,198) | | | 9,616 |
Unit-based compensation expense | | | 963 | | | 898 | | | 4,000 |
Restructuring costs | | | 392 | | | — | | | — |
Transaction costs | | | 1,431 | | | 4,553 | | | 878 |
Income tax expense | | | 718 | | | 1,410 | | | — |
Adjusted EBITDAX | | | $68,387 | | | $62,709 | | | $37,184 |
| | For the Years Ended September 30, | |||||||
| | ($ and units in thousands, except per unit amounts) | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Statement of Operations Data: | | | | | | | |||
Revenues: | | | | | | | |||
Oil and natural gas sales, net | | | $73,133 | | | $101,096 | | | $69,872 |
Contract services - related parties | | | 3,800 | | | 1,900 | | | — |
Total Revenues | | | 76,933 | | | 102,996 | | | 69,872 |
Operating Expenses: | | | | | | | |||
Lease operating expenses | | | 20,997 | | | 23,808 | | | 11,044 |
Gathering, processing & transportation | | | — | | | — | | | 735 |
Production taxes | | | 3,526 | | | 4,804 | | | 3,207 |
Exploration costs | | | 9,923 | | | 5,074 | | | 5,992 |
Depletion, depreciation, amortization, and accretion | | | 21,479 | | | 20,182 | | | 15,714 |
General and administrative costs | | | | | | | |||
Administrative Costs | | | 10,826 | | | 12,168 | | | 14,175 |
Unit-based compensation expense | | | 963 | | | 898 | | | — |
Cost of contract services - related party | | | 503 | | | 21 | | | — |
Transaction costs | | | 1,431 | | | 4,553 | | | 878 |
Total Operating Expenses | | | 69,648 | | | 71,508 | | | 51,745 |
| | | | | | ||||
Income (Loss) From Operations | | | 7,285 | | | 31,488 | | | 18,127 |
Other Income (Expenses): | | | | | | | |||
Interest Expense | | | (5,299) | | | (4,924) | | | (1,707) |
Gain (loss) on derivatives | | | 33,876 | | | 26,712 | | | (17,143) |
Total Other Income (Expense) | | | 28,577 | | | 21,788 | | | (18,850) |
| | | | | | ||||
Net Income (Loss) Before Income Taxes | | | 35,862 | | | 53,276 | | | (723) |
Income Tax Expense | | | (718) | | | (1,410) | | | — |
Net Income (Loss) | | | 35,144 | | | 51,866 | | | (723) |
Dividends on Preferred Units | | | (3,535) | | | (3,330) | | | (3,129) |
Net Income (Loss) Attributable to Common Unitholders | | | $31,609 | | | $48,536 | | | $(3,852) |
Net Income (loss) per unit: | | | | | | | |||
Basic | | | $20.67 | | | $31.87 | | | $(2.57) |
Diluted | | | $17.24 | | | $26.03 | | | $(2.57) |
Weighted Average Common Units Outstanding: | | | | | | | |||
Basic | | | 1,529 | | | 1,523 | | | 1,500 |
Diluted | | | 2,038 | | | 1,992 | | | 1,500 |
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Total Sales Volumes: | | | | | | | |||
Oil (MBbls) | | | 2,060 | | | 1,975 | | | 1,195 |
Natural Gas (MMcf) | | | 1,628 | | | 886 | | | 197 |
NGL (MBbls) | | | 260 | | | 135 | | | 41 |
Total (MBoe)(1) | | | 2,592 | | | 2,258 | | | 1,269 |
Daily Sales Volumes: | | | | | | | |||
Oil sales (Bbl/d) | | | 5,630 | | | 5,411 | | | 3,274 |
Natural gas sales (Mcf/d) | | | 4,448 | | | 2,428 | | | 541 |
Natural gas liquids sales (Bbl/d) | | | 710 | | | 370 | | | 113 |
Total (BOE/d)(1) | | | 7,081 | | | 6,186 | | | 3,477 |
Average sales price(1): | | | | | | | |||
Oil sales (per Bbl) | | | $36.35 | | | $51.45 | | | $57.19 |
Oil sales with derivative settlements (per Bbl)(2) | | | 49.41 | | | 51.71 | | | 50.89 |
Natural gas sales (per Mcf) | | | (0.78) | | | (0.33) | | | 2.04 |
Natural gas sales with derivative settlements (per Mcf)(2) | | | (0.78) | | | (0.33) | | | 2.04 |
Natural gas liquids sales (per Bbl) | | | (1.90) | | | (1.75) | | | 27.44 |
Natural gas liquids with derivative settlements (per Bbl)(2) | | | (1.90) | | | (1.75) | | | 27.44 |
Average price per BOE excluding derivative settlements(1)(2) | | | 28.22 | | | 44.78 | | | 55.05 |
Average price per BOE including derivative settlements(1)(2) | | | 38.61 | | | 45.00 | | | 49.12 |
Expenses per BOE(1): | | | | | | | |||
Lease operating expenses | | | $8.10 | | | $10.54 | | | $8.70 |
Production and ad valorem taxes | | | 1.36 | | | 2.13 | | | 2.53 |
Exploration expenses | | | 3.83 | | | 2.25 | | | 4.72 |
Depletion, depreciation, amortization, and accretion | | | 8.29 | | | 8.94 | | | 12.38 |
General and administrative expenses, inclusive of unit-based compensation expense(3) | | | 3.08 | | | 4.95 | | | 11.17 |
Transaction costs(4) | | | 0.55 | | | 2.02 | | | 0.69 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average prices shown in table reflect prices both before and after the effects of REP’s settlements of our commodity derivative contracts. REP’s calculation of such effects includes both gains or losses on cash settlements for commodity derivatives. |
(3) | General and administrative expenses, inclusive of unit-based compensation expense shown after effect of revenue from contract services for management services agreement. |
(4) | Transaction costs include non-cash cost related to REP’s previously aborted IPO. |
Contractual Obligations | | | Total | | | 2020 | | | 2021 | | | 2022 |
Long-Term Debt Obligations(1) | | | $— | | | $— | | | $— | | | $— |
Operating Lease Obligations | | | 42 | | | 42 | | | — | | | — |
Finance Lease Obligations | | | 104 | | | 65 | | | 39 | | | — |
Estimated Interest on Obligations | | | 7 | | | 6 | | | 1 | | | — |
Total | | | $153 | | | $113 | | | $40 | | | $— |
(1) | The credit facility with Prosperity Bank had a zero balance at December 31, 2019. |
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Oil (MBbls) | | | 2,060 | | | 1,975 | | | 1,195 |
Natural gas (MMcf) | | | 1,628 | | | 886 | | | 197 |
NGL (MBbls) | | | 260 | | | 135 | | | 41 |
Total (MBoe)(1) | | | 2,592 | | | 2,258 | | | 1,269 |
Average net sales (BOE/d)(2) | | | 7,081 | | | 6,186 | | | 3,477 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average net sales (BOE/d) was derived by dividing the total MBoe by 366 days for the year ended 2020 and by 365 days for the years ended 2019 and 2018. |
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Oil | | | | | | | |||
NYMEX WTI High ($/Bbl) | | | $63.27 | | | $76.40 | | | $77.41 |
NYMEX WTI Low ($/Bbl) | | | (36.98) | | | 44.48 | | | 49.34 |
NYMEX WTI Average ($/Bbl) | | | 42.74 | | | 57.76 | | | 64.01 |
Average Realized Price ($/Bbl) | | | 36.35 | | | 51.45 | | | 57.19 |
Average Realized Price, with derivative settlements ($/Bbl) | | | 49.41 | | | 51.71 | | | 50.89 |
Averaged Realized Price as a % of Average NYMEX WTI(1) | | | 85% | | | 89% | | | 89% |
Differential ($/Bbl) to Average NYMEX WTI | | | (6.39) | | | (6.30) | | | (6.82) |
Natural Gas(3) | | | | | | | |||
NYMEX Henry Hub High ($/MMBtu) | | | $2.87 | | | $4.70 | | | $6.24 |
NYMEX Henry Hub Low ($/MMBtu) | | | 1.33 | | | 2.02 | | | 2.49 |
NYMEX Henry Hub Average ($/MMBtu) | | | 2.00 | | | 2.90 | | | 2.94 |
Average Realized Price ($/Mcf) | | | (0.78) | | | (0.33) | | | 2.04 |
Average Realized Price, with derivative settlements ($/Mcf) | | | (0.78) | | | (0.33) | | | 2.04 |
Averaged Realized Price as a % of Average NYMEX Henry Hub | | | -39% | | | -11% | | | 69% |
Differential ($/Mcf) to Average NYMEX Henry Hub(1) | | | (2.78) | | | (3.23) | | | (0.90) |
Natural Gas Liquids(3) | | | | | | | |||
Average Realized Price ($/Bbl) | | | $(1.90) | | | $(1.75) | | | $27.44 |
Averaged Realized Price as a % of Average NYMEX WTI | | | -4% | | | -3% | | | 43% |
BOE (Barrel of Oil Equivalent) | | | | | | | |||
Average price per BOE(1) | | | $28.22 | | | $44.78 | | | $55.05 |
Average price per BOE with derivative settlements(1)(2) | | | 38.61 | | | 45.00 | | | 49.12 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average prices shown in table reflect prices both before and after the effects of our settlements of REP’s commodity derivative contracts. REP’s calculation of such effects includes both gains or losses on cash settlements for commodity derivatives. |
(3) | Realized prices are reflected at net of the deduction of gathering, processing and transportation costs. |
| | | | Weighted Average Price | ||||||||
Calendar Quarter | | | Notional Volume | | | Fixed | | | Put | | | Call |
| | (Bbl) | | | ($ per Bbl) | |||||||
Crude Oil Swaps(1) | | | | | | | | | ||||
Q4 2020 | | | 339,000 | | | $57.15 | | | $— | | | $— |
Q1 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q2 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q3 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q4 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
2022 | | | 360,000 | | | $45.25 | | | $— | | | $— |
Crude Oil Collars(1) | | | | | | | | | ||||
Q4 2020 | | | 45,000 | | | $— | | | $50.00 | | | $56.48 |
2022 | | | 360,000 | | | $— | | | $35.00 | | | $42.63 |
Crude Oil Basis(2) | | | | | | | | | ||||
Q4 2020 | | | 384,000 | | | $0.39 | | | $— | | | $— |
Q1 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q2 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q3 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q4 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
(1) | Reference Price is NYMEX WTI Price, referring to the West Texas Intermediate crude oil price on the New York Mercantile Exchange. |
(2) | Reference Price is NYMEX WTI vs. WTI Midland (Argus) Calendar Trade Month. |
| | Historical Derivative Positions and Settlement Amounts | |||||||
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Fair value of net asset (liability) beginning of period | | | $14,959 | | | $ (11,239) | | | $(1,623) |
Gain (loss) on derivatives | | | 33,876 | | | 26,712 | | | (17,143) |
Net cash (receipts) from payments on derivatives | | | (26,914) | | | (514) | | | 7,527 |
Fair value of net asset (liability) end of period | | | $21,921 | | | $14,959 | | | $(11,239) |
(1) | NYMEX WTI refers to West Texas Intermediate crude oil price on the New York Mercantile Exchange. |
(2) | Reference Price is NYMEX WTI vs. WTI Midland (Argus) Calendar Trade Month. |
| | For the Years Ended September 30, | |||||||
| | (in thousands) | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Reconciliation of Net Income (Loss) to Adjusted EBITDAX | | | | | | | |||
Net Income (Loss) | | | $35,144 | | | $51,866 | | | $(723) |
Exploration expense | | | 9,923 | | | 5,074 | | | 5,992 |
Depletion, depreciation, amortization and accretion | | | 21,479 | | | 20,182 | | | 15,714 |
Interest expense | | | 5,299 | | | 4,924 | | | 1,707 |
Unrealized (gain)/loss on derivatives | | | (6,962) | | | (26,198) | | | 9,616 |
Unit-based compensation expense | | | 963 | | | 898 | | | 4,000 |
Restructuring costs | | | 392 | | | — | | | — |
Transaction costs | | | 1,431 | | | 4,553 | | | 878 |
Income tax expense | | | 718 | | | 1,410 | | | — |
Adjusted EBITDAX | | | $68,387 | | | $62,709 | | | $37,184 |
| | For the Years Ended September 30, | |||||||
| | ($ and units in thousands, except per unit amounts) | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Statement of Operations Data: | | | | | | | |||
Revenues: | | | | | | | |||
Oil and natural gas sales, net | | | $73,133 | | | $101,096 | | | $69,872 |
Contract services - related parties | | | 3,800 | | | 1,900 | | | — |
Total Revenues | | | 76,933 | | | 102,996 | | | 69,872 |
Operating Expenses: | | | | | | | |||
Lease operating expenses | | | 20,997 | | | 23,808 | | | 11,044 |
Gathering, processing & transportation | | | — | | | — | | | 735 |
Production taxes | | | 3,526 | | | 4,804 | | | 3,207 |
Exploration costs | | | 9,923 | | | 5,074 | | | 5,992 |
Depletion, depreciation, amortization, and accretion | | | 21,479 | | | 20,182 | | | 15,714 |
General and administrative costs | | | | | | | |||
Administrative Costs | | | 10,826 | | | 12,168 | | | 14,175 |
Unit-based compensation expense | | | 963 | | | 898 | | | — |
Cost of contract services - related party | | | 503 | | | 21 | | | — |
Transaction costs | | | 1,431 | | | 4,553 | | | 878 |
Total Operating Expenses | | | 69,648 | | | 71,508 | | | 51,745 |
| | | | | | ||||
Income (Loss) From Operations | | | 7,285 | | | 31,488 | | | 18,127 |
Other Income (Expenses): | | | | | | | |||
Interest Expense | | | (5,299) | | | (4,924) | | | (1,707) |
Gain (loss) on derivatives | | | 33,876 | | | 26,712 | | | (17,143) |
Total Other Income (Expense) | | | 28,577 | | | 21,788 | | | (18,850) |
| | | | | | ||||
Net Income (Loss) Before Income Taxes | | | 35,862 | | | 53,276 | | | (723) |
Income Tax Expense | | | (718) | | | (1,410) | | | — |
Net Income (Loss) | | | 35,144 | | | 51,866 | | | (723) |
Dividends on Preferred Units | | | (3,535) | | | (3,330) | | | (3,129) |
Net Income (Loss) Attributable to Common Unitholders | | | $31,609 | | | $48,536 | | | $(3,852) |
Net Income (loss) per unit: | | | | | | | |||
Basic | | | $20.67 | | | $31.87 | | | $(2.57) |
Diluted | | | $17.24 | | | $26.03 | | | $(2.57) |
Weighted Average Common Units Outstanding: | | | | | | | |||
Basic | | | 1,529 | | | 1,523 | | | 1,500 |
Diluted | | | 2,038 | | | 1,992 | | | 1,500 |
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Total Sales Volumes: | | | | | | | |||
Oil (MBbls) | | | 2,060 | | | 1,975 | | | 1,195 |
Natural Gas (MMcf) | | | 1,628 | | | 886 | | | 197 |
NGL (MBbls) | | | 260 | | | 135 | | | 41 |
Total (MBoe)(1) | | | 2,592 | | | 2,258 | | | 1,269 |
Daily Sales Volumes: | | | | | | | |||
Oil sales (Bbl/d) | | | 5,630 | | | 5,411 | | | 3,274 |
Natural gas sales (Mcf/d) | | | 4,448 | | | 2,428 | | | 541 |
Natural gas liquids sales (Bbl/d) | | | 710 | | | 370 | | | 113 |
Total (BOE/d)(1) | | | 7,081 | | | 6,186 | | | 3,477 |
Average sales price(1): | | | | | | | |||
Oil sales (per Bbl) | | | $36.35 | | | $51.45 | | | $57.19 |
Oil sales with derivative settlements (per Bbl)(2) | | | 49.41 | | | 51.71 | | | 50.89 |
Natural gas sales (per Mcf) | | | (0.78) | | | (0.33) | | | 2.04 |
Natural gas sales with derivative settlements (per Mcf)(2) | | | (0.78) | | | (0.33) | | | 2.04 |
Natural gas liquids sales (per Bbl) | | | (1.90) | | | (1.75) | | | 27.44 |
Natural gas liquids with derivative settlements (per Bbl)(2) | | | (1.90) | | | (1.75) | | | 27.44 |
Average price per BOE excluding derivative settlements(1)(2) | | | 28.22 | | | 44.78 | | | 55.05 |
Average price per BOE including derivative settlements(1)(2) | | | 38.61 | | | 45.00 | | | 49.12 |
Expenses per BOE(1): | | | | | | | |||
Lease operating expenses | | | $8.10 | | | $10.54 | | | $8.70 |
Production and ad valorem taxes | | | 1.36 | | | 2.13 | | | 2.53 |
Exploration expenses | | | 3.83 | | | 2.25 | | | 4.72 |
Depletion, depreciation, amortization, and accretion | | | 8.29 | | | 8.94 | | | 12.38 |
General and administrative expenses, inclusive of unit-based compensation expense(3) | | | 3.08 | | | 4.95 | | | 11.17 |
Transaction costs(4) | | | 0.55 | | | 2.02 | | | 0.69 |
(1) | One BOE is equal to six Mcf of natural gas or one Bbl of oil or NGL based on the approximate energy equivalency. This is an energy content correlation and does not reflect value or price relationship between the commodities. |
(2) | Average prices shown in table reflect prices both before and after the effects of REP’s settlements of our commodity derivative contracts. REP’s calculation of such effects includes both gains or losses on cash settlements for commodity derivatives. |
(3) | General and administrative expenses, inclusive of unit-based compensation expense shown after effect of revenue from contract services for management services agreement. |
(4) | Transaction costs include non-cash cost related to REP’s previously aborted IPO. |
| | For the Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in Thousands) | |||||||
Statement of Cash Flows Data: | | | | | | | |||
Net cash provided by operating activities | | | $62,550 | | | $52,007 | | | $38,619 |
Net cash used in investing activities | | | $(51,521) | | | $(83,398) | | | $(88,389) |
Net cash (used) in/provided by financing activities | | | $(13,095) | | | $31,778 | | | $49,426 |
| | Payments due by Period | | | Payments due by Period | |||||||||||||||||||||||||
| | Total | | Less than 1 Year | | 1-3 Years | | 3-5 Years | | More than 5 Years | | | Total | | Less than 1 Year | | 1-3 Years | | 3-5 Years | | More than 5 Years | |||||||||
| (unaudited) | | (unaudited) | |||||||||||||||||||||||||||
Contractual Obligations | | | | | | | | | | | ||||||||||||||||||||
Credit Facility(1) | | $97,000 | | $— | | $97,000 | | $— | | $— | | $101,000 | | $— | | $101,000 | | $— | | $— | ||||||||||
Interest expenses related to Credit Facility(2) | | $21,844 | | $5,461 | | $16,383 | | $— | | $— | | $16,524 | | $4,131 | | $12,393 | | $— | | $— | ||||||||||
Office lease(3) | | $1,055 | | $389 | | $666 | | $— | | $— | | $740 | | $419 | | $321 | | $— | | $— | ||||||||||
Total | | $119,899 | | $5,850 | | $114,049 | | $— | | $— | | $118,264 | | $4,550 | | $113,714 | | $— | | $— |
(1) | The REP credit facility matures on September 28, 2023. |
(2) | Includes interest expense on our outstanding borrowings calculated using the weighted average interest rate of |
(3) | REP leases office headquarters under a five-year operating lease agreement terminating in July 2022. Base rent is subject to a two percent (2%) escalation in each subsequent year. |
| | | Weighted Average Price | | | | Weighted Average Price | |||||||||||||||||
Calendar Quarter | | Notional Volume | | Fixed | | Put | | Call | | Notional Volume | | Fixed | | Put | | Call | ||||||||
| (Bbl) | | ($ per Bbl) | | (Bbl) | | ($ per Bbl) | |||||||||||||||||
Crude Oil Swaps(1) | | | | | | | | | ||||||||||||||||
Q3 2020 | | 285,000 | | $52.98 | | $— | | $— | ||||||||||||||||
Q4 2020 | | 339,000 | | $57.15 | | $— | | $— | | 339,000 | | $57.15 | | $— | | $— | ||||||||
2021 | | 1,380,000 | | $54.49 | | $— | | $— | ||||||||||||||||
Q1 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q2 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q3 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q4 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
2022 | | 360,000 | | $45.25 | | $— | | $— | ||||||||||||||||
Crude Oil Collars(1) | | | | | | | | | ||||||||||||||||
Q3 2020 | | 45,000 | | $— | | $50.00 | | $56.48 | ||||||||||||||||
Q4 2020 | | 45,000 | | $— | | $50.00 | | $56.48 | | 45,000 | | $— | | $50.00 | | $56.48 | ||||||||
2021 | | — | | $— | | $— | | $— | ||||||||||||||||
2022 | | 360,000 | | $— | | $35.00 | | $42.63 | | 360,000 | | $— | | $35.00 | | $42.63 | ||||||||
Crude Oil Basis(2) | | | | | | | | | ||||||||||||||||
Q3 2020 | | 384,000 | | $0.25 | | $— | | $— | ||||||||||||||||
Q4 2020 | | 384,000 | | $0.39 | | $— | | $— | | 384,000 | | $0.39 | | $— | | $— | ||||||||
2021 | | 1,740,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q1 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q2 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q3 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q4 2021 | | 435,000 | | $0.40 | | $— | | $— |
(1) | Reference Price is NYMEX WTI Price, referring to the West Texas Intermediate crude oil price on the New York Mercantile Exchange. |
(2) | Reference Price is NYMEX WTI vs. WTI Midland (Argus) Calendar Trade Month. |
Name | | | Age | | | Position |
Executive Officers | | | | | ||
Bobby D. Riley | | | 65 | | | Chairman of the Board and Chief Executive Officer |
Kevin Riley | | | 39 | | | President |
Michael J. Rugen | | | 60 | | | Chief Financial Officer and Director |
Corey Riley | | | 42 | | | Executive Vice President Business Intelligence |
Michael Palmer | | | 40 | | | Executive Vice President Corporate Land |
Name | | | Principal Position |
Bobby D. Riley | | | Chairman of the Board and CEO |
Kevin Riley | | | President and Interim Chief Financial Officer |
Jeffrey M. Gutman(1) | | | Former Executive Vice President, Chief Financial Officer and Treasurer |
Corey Riley | | | Executive Vice President Business Intelligence |
Michael Palmer | | | Executive Vice President Corporate Land |
(1) | Mr. Gutman resigned from his position with REP on October 5, 2020. |
| | Year | | | Salary ($) | | | Non-Equity Incentive Plan(1) ($) | | | Unit Awards(2)(3) ($) | | | All Other Compensation(4) ($) | | | Total ($) | |
Bobby D. Riley Chairman of the Board & CEO | | | 2020 | | | $500,870 | | | $125,982 | | | $410,513 | | | $43,874 | | | $1,081,239 |
| 2019 | | | $485,672 | | | $247,073 | | | $2,785,193 | | | $43,522 | | | $3,561,459 | ||
| 2018 | | | $388,863 | | | $475,000 | | | $— | | | $31,036 | | | $894,899 | ||
| | | | | | | | | | | | |||||||
Kevin M. Riley President and Interim Chief Financial Officer | | | 2020 | | | $347,973 | | | $87,524 | | | $285,255 | | | $38,341 | | | $759,093 |
| 2019 | | | $337,414 | | | $171,650 | | | $1,714,943 | | | $36,290 | | | $2,260,298 | ||
| 2018 | | | $323,109 | | | $330,000 | | | $— | | | $28,781 | | | 681,890 | ||
| | | | | | | | | | | | |||||||
Jeffrey M. Gutman(5) Former Executive Vice President, Chief Financial Officer and Treasurer | | | 2020 | | | $332,156 | | | $83,546 | | | $272,266 | | | $32,224 | | | $720,191 |
| 2019 | | | $322,077 | | | $163,849 | | | $621,726 | | | $31,583 | | | $1,139,236 | ||
| 2018 | | | $118,125 | | | $315,000 | | | $— | | | $9,086 | | | $442,211 | ||
| | | | | | | | | | | | |||||||
Corey Riley(6) Executive Vice President Business Intelligence | | | 2020 | | | $360,062 | | | $54,075 | | | $125,863 | | | $36,997 | | | $576,997 |
| 2019 | | | $145,833 | | | $136,752 | | | $— | | | $14,731 | | | $297,316 | ||
| 2018 | | | $— | | | | | $— | | | $— | | | $— | |||
| | | | | | | | | | | | |||||||
Michael Palmer Executive Vice President Corporate Land | | | 2020 | | | $243,928 | | | $36,634 | | | $125,863 | | | $33,086 | | | $439,510 |
| 2019 | | | $237,111 | | | $70,000 | | | $— | | | $31,119 | | | $338,230 | ||
| 2018 | | | $225,176 | | | $124,937 | | | $— | | | $25,272 | | | $375,384 |
(1) | For a description of annual bonuses for the applicable year, see “-Additional Narrative Disclosures-Cash Bonuses” section below. |
(2) | Amounts in this column reflect the grant date fair value of stock awards. |
(3) | For unit awards, the disclosed amount is the dollar amount recognized for such individual for the fiscal year of the actual grant date (as opposed to any prior periods of service for which the grant was received). |
(4) | Amounts in this column reflect (a) matching contributions to the 401(k) Plan (as defined below) made on behalf of REP's named executive officers and (b) health and welfare premiums paid for the benefit of REP's named executives. See “-Additional Narrative Disclosures-Other Benefits and Pension Benefits” below for more information on health and welfare premiums and matching contributions to the 401(k) Plan. |
(5) | Mr. Gutman served as REP's acting Chief Financial Officer since January 2018 and joined REP as Executive Vice President, Chief Financial Officer and Treasurer as of May 2018. Mr. Gutman resigned from his position with REP on October 5, 2020. |
(6) | Mr. Corey Riley, Executive Vice President Business Intelligence became employed by the company on April 23, 2019. The compensation for that period reflects the partial year of service. |
| | Grant Date | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | Grant Date Fair Value of Stock and Option Awards(2) | | | Grant Date | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | Grant Date Fair Value of Stock and Option Awards(2) | |||||
Bobby D. Riley Chairman of the Board & CEO | | 02/01/20 | | 4,077.00 | | 410,513.13 | | 02/01/20 | | 4,077.00 | | 410,513.13 | ||||||
Kevin M. Riley President | | 02/01/20 | | 2,833.00 | | 285,254.77 | | 02/01/20 | | 2,833.00 | | 285,254.77 | ||||||
Jeffrey M. Gutman(1) Former Executive Vice President, Chief Financial Officer and Treasurer | | 02/01/20 | | 2,704.00 | | 272,265.76 | | 02/01/20 | | 2,704.00 | | 272,265.76 | ||||||
Corey Riley Executive Vice President Business Intelligence | | 02/01/20 | | 1,250.00 | | 125,862.50 | ||||||||||||
Michael Palmer Executive Vice President Corporate Land | | 02/01/20 | | 1,250.00 | | 125,862.50 |
| | Grant Date | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | Grant Date Fair Value of Stock and Option Awards(2) | |
Corey Riley Executive Vice President Business Intelligence | | | 02/01/20 | | | 1,250.00 | | | 125,862.50 |
Michael Palmer Executive Vice President Corporate Land | | | 02/01/20 | | | 1,250.00 | | | 125,862.50 |
(1) | Mr. Gutman served as REP's acting Chief Financial Officer since January 2018 and joined REP as Executive Vice President, Chief Financial Officer and Treasurer as of May 2018. Mr. Gutman resigned from his position with REP on October 5, 2020. |
(2) | Grant date fair value of Awards is $100.69 per unit for awards made on for 2/01/20 and 2/02/20. |
| | Stock Awards | |||||||||||||
| | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested (2) ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | |||
Bobby D. Riley Chairman of the Board & CEO | | | 2,726.67(3) | | | $274,548.40 | | | — | | | — | | ||
| 4,077(4) | | | $410,513.13 | | | | | | ||||||
| | | | | | | | | |||||||
Kevin M. Riley President | | | 1,894(3) | | | $190,706.86 | | | — | | | — | | ||
| 2,833(4) | | | $285,254.77 | | | | | | ||||||
| | | | | | | | | |||||||
Jeffrey M. Gutman(1) Former Executive Vice President, Chief Financial Officer and Treasurer | | | 3,161.33(5) | | | $318,314.32 | | | — | | | — | | ||
| | | | | | | | | |||||||
Corey Riley Executive Vice President Business Intelligence | | | 1,250.00(4) | | | $125,862.50 | | | — | | | — | | ||
| | | | | | | | | |||||||
Michael Palmer Executive Vice President Corporate Land | | | 1,250.00(4) | | | $125,862.50 | | | — | | | — | |
(1) | Mr. Gutman served as REP's acting Chief Financial Officer since January 2018 and joined REP as Executive Vice President, Chief Financial Officer and Treasurer as of May 2018. Mr. Gutman resigned from his position with REP on October 5, 2020. |
(2) | Market Value of Shares or Units of Stock That Have Not Vested based on the valuation of REP units on September 30, 2020 of $100.69. |
(3) | These awards have vesting dates of February 1, 2021 and February 1, 2022. |
(4) | These awards have vesting dates of February 1, 2021, February 1, 2022 and February 1, 2023. |
(5) | This award has a vesting date of February 1, 2021. |
| | Stock Awards | ||||
| | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting(2) ($) | |
Bobby D. Riley Chairman of the Board & CEO | | | 14,093.33 | | | 1,419,057.40 |
| | | | |||
Kevin M. Riley President and Interim Chief Financial Officer | | | 7,559.41 | | | 761,156.99 |
| | | | |||
Jeffrey M. Gutman(1) Former Executive Vice President, Chief Financial Officer and Treasurer | | | 1,397.36 | | | 140,700.18 |
| | | | |||
Corey Riley(5) Executive Vice President Business Intelligence | | | — | | | — |
| | | | |||
Michael Palmer Executive Vice President Corporate Land | | | — | | | — |
(1) | Mr. Gutman served as REP's acting Chief Financial Officer since January 2018 and joined REP as Executive Vice President, Chief Financial Officer and Treasurer as of May 2018. Mr. Gutman resigned from his position with REP on October 5, 2020. |
(2) | Value Realized on Shares or Units of Stock That Have Vested based on |
Plan Category | | | Number of Securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted-average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) |
| | (a) | | | (b) | | | (c) | |
Equity compensation plans approved by security holders | | | 0 | | | 0 | | | 135,680 |
Equity compensation plans not approved by security holders | | | 0 | | | 0 | | | 0 |
Total | | | 0 | | | 0 | | | 135,680 |
1) | any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors; |
2) | any person who is known by us to be the beneficial owner of more than 5% of our common stock; |
3) | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our common stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of our common stock; and |
4) | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest. |
| | TGC Historical | | REP Historical | | Reclassification Adjustments | | Pro Forma Adjustments | | Pro Forma Combined | | | REP Historical | | TGC Historical | | Reclassification Adjustments | | | | | Pro Forma Adjustments | | | | | Pro Forma Combined | |||||||||
Assets | | | | | | | | | | | | | ||||||||||||||||||||||||
Current assets: | | | | | | | | | | | | | ||||||||||||||||||||||||
Cash and cash equivalents | | $2,710 | | $918 | | $— | | $— | | $3,628 | | $1,660 | | $ 2,545 | | $— | | | $— | | | $4,205 | ||||||||||||||
Accounts receivable | | 422 | | 6,000 | | — | | — | | 6,422 | | 10,128 | | 262 | | — | | | — | | | 10,390 | ||||||||||||||
Accounts receivable - related parties | | — | | 345 | | — | | — | | 345 | | 55 | | — | | — | | | — | | | 55 | ||||||||||||||
Inventory | | 293 | | — | | — | | — | | 293 | | — | | 302 | | — | | | — | | | 302 | ||||||||||||||
Current derivative assets | | — | | 23,210 | | — | | — | | 23,210 | | 18,819 | | — | | — | | | — | | | 18,819 | ||||||||||||||
Prepaid expenses and other current assets | | 177 | | 1,767 | | — | | — | | 1,944 | | 1,752 | | 160 | | — | | | — | | | 1,912 | ||||||||||||||
Total current assets | | 3,602 | | 32,240 | | — | | — | | 35,842 | | 32,414 | | 3,269 | | — | | | — | | | 35,683 | ||||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Non-current assets: | | | | | | | | | | | | | ||||||||||||||||||||||||
Loan fees, net | | 3 | | — | | — | | — | | 3 | | — | | 2 | | — | | | — | | | 2 | ||||||||||||||
Right of use asset | | 73 | | 795 | | — | | — | | 868 | | 700 | | 58 | | — | | | — | | | 758 | ||||||||||||||
Oil and gas properties, net (full cost, accounting method) | | 4,045 | | — | | (4,045)(a) | | — | | — | | — | | 3,914 | | (3,914) | | (a) | | — | | | — | |||||||||||||
Oil and natural gas properties, net (successful efforts) | | — | | 310,920 | | 4,045(a) | | (1,771)(b) | | 313,194 | | 310,726 | | — | | 3,914 | | (a) | | (1,517) | | (b) | | 313,123 | ||||||||||||
Other property and equipment, net | | 126 | | 1,852 | | — | | — | | 1,978 | | 1,801 | | 134 | | — | | | — | | | 1,935 | ||||||||||||||
Goodwill | | — | | — | | — | | 3,532(h) | | 3,532 | | — | | — | | — | | | 8,362 | | (h) | | 8,362 | |||||||||||||
Non-current derivative assets | | — | | 8,587 | | — | | — | | 8,587 | | 3,102 | | — | | — | | | — | | | 3,102 | ||||||||||||||
Other non-current assets | | 4 | | 1,208 | | — | | — | | 1,212 | | 2,249 | | — | | — | | | — | | | 2,249 | ||||||||||||||
Total non-current assets | | 4,251 | | 323,362 | | — | | 1,761 | | 329,374 | | 318,578 | | 4,108 | | — | | | 6,845 | | | 329,531 | ||||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Total assets | | $7,853 | | $355,602 | | $— | | $1,761 | | $365,216 | | $ 350,992 | | $ 7,377 | | $— | | | $ 6,845 | | | $ 365,214 | ||||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Liabilities and Stockholders' Equity | | | | | | |||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | | | | | | | | |||||||||||||||||||||||||||||
Current liabilities: | | | | | | | | | | | | | ||||||||||||||||||||||||
Accounts payable | | 113 | | 1,768 | | — | | — | | 1,881 | | 4,739 | | 304 | | — | | | — | | | 5,043 | ||||||||||||||
Accrued liabilities | | 127 | | 7,309 | | — | | 5,000(i) | | 12,436 | | 8,746 | | 255 | | — | | | 3,500 | | (i) | | 12,501 | |||||||||||||
Revenue payable | | — | | 3,317 | | — | | — | | 3,317 | | 4,432 | | — | | — | | | — | | | 4,432 | ||||||||||||||
Current lease liability | | 121 | | 385 | | — | | — | | 506 | | 392 | | 116 | | — | | | — | | | 508 | ||||||||||||||
Current maturities of long-term debt | | 64 | | — | | — | | — | | 64 | | — | | 101 | | — | | | | | 101 | |||||||||||||||
Asset retirement obligation - current | | 75 | | — | | — | | 667(c) | | 742 | | — | | 75 | | — | | | (17) | | (c) | | 58 | |||||||||||||
Advances from joint interest owners | | — | | 243 | | — | | — | | 243 | | 254 | | — | | — | | | — | | | 254 | ||||||||||||||
Current derivative liabilities | | — | | — | | — | | — | | — | | — | | — | | — | | | — | | | — | ||||||||||||||
Total current liabilities | | 500 | | 13,022 | | — | | 5,667 | | 19,189 | | 18,563 | | 851 | | — | | | 3,483 | | | 22,897 | ||||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Non-Current Liabilities: | | | | | | | | | | | | | ||||||||||||||||||||||||
Non-current lease liability | | 41 | | 416 | | — | | — | | 457 | | 314 | | 42 | | — | | | — | | | 356 | ||||||||||||||
Asset retirement obligations | | 1,936 | | 2,303 | | — | | (1,383)(c) | | 2,856 | | 2,268 | | 1,954 | | — | | | (794) | | (c) | | 3,428 | |||||||||||||
Long-term debt, less current maturities | | 102 | | — | | — | | — | | 102 | | — | | 65 | | — | | | — | | | 65 | ||||||||||||||
Revolving credit facility | | — | | 104,000 | | — | | — | | 104,000 | ||||||||||||||||||||||||||
Deferred tax liabilities - state | | — | | 1,573 | | — | | — | | 1,573 | ||||||||||||||||||||||||||
Deferred tax liabilities - federal | | — | | — | | — | | 47,730(d) | | 47,730 | ||||||||||||||||||||||||||
Other non-current liabilities | | — | | 78 | | — | | — | | 78 | ||||||||||||||||||||||||||
Total Non-Current Liabilities | | 2,079 | | 108,370 | | — | | 46,347 | | 156,796 | ||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||||||
Total liabilities | | 2,579 | | 121,392 | | — | | 52,014 | | 175,985 |
| | REP Historical | | TGC Historical | | Reclassification Adjustments | | | | | Pro Forma Adjustments | | | | | Pro Forma Combined | ||||||||||||||||||||
Revolving credit facility | | 101,000 | | — | | — | | | — | | | 101,000 | ||||||||||||||||||||||||
Deferred tax liabilities - state | | 1,834 | | — | | — | | | — | | | 1,834 | ||||||||||||||||||||||||
Deferred tax liabilities - federal | | — | | — | | | | 49,615 | | (d) | | 49,615 | ||||||||||||||||||||||||
Other non-current liabilities | | 104 | | — | | — | | | — | | | 104 | ||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||||||
Total Non-Current Liabilities | | 105,520 | | 2,061 | | — | | | 48,821 | | | 156,402 | ||||||||||||||||||||||||
| | | | | | | ||||||||||||||||||||||||||||||
Total liabilities | | 124,083 | | 2,912 | | — | | | 52,304 | | | 179,299 | ||||||||||||||||||||||||
| | TGC Historical | | REP Historical | | Reclassification Adjustments | | Pro Forma Adjustments | | Pro Forma Combined | | | | | | | | |||||||||||||||||||
Series A preferred units | | — | | 59,402 | | — | | (59,402)(e) | | — | | 60,292 | | — | | — | | | (60,292) | | (e) | | — | |||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Members' equity | | — | | 174,808 | | — | | (174,808)(e) | | — | ||||||||||||||||||||||||||
Members' equity: | | 166,617 | | — | | — | | | (166,617) | | (e) | | — | |||||||||||||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Stockholders' equity | | | | | | |||||||||||||||||||||||||||||||
Stockholders’ equity | | | | | | | | |||||||||||||||||||||||||||||
Preferred stock, 25,000,000 shares authorized: | | | | | | | | | | | | | ||||||||||||||||||||||||
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding | | — | | — | | — | | — | | — | | — | | — | | — | | | — | | | — | ||||||||||||||
Common stock, $0.001 par value, authorized 100,000,000 shares; 10,673,539 and 10,658,775 shares issued and outstanding | | 11 | | — | | — | | 203(e) | | 214 | ||||||||||||||||||||||||||
Common stock, $0.001 par value, authorized 100,000,000 shares; 10,680,050 and 10,658,775 shares issued and outstanding | | — | | 11 | | — | | | 203 | | (e) | | 214 | |||||||||||||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Additional paid-in capital | | 58,300 | | — | | — | | 183,447(e)(f)(h) | | 241,747 | | — | | 58,304 | | — | | | 180,512 | | (e)(f)(h) | | 238,816 | |||||||||||||
| | | | | | | ||||||||||||||||||||||||||||||
Accumulated deficit | | (53,037) | | — | | — | | 307(d)(g)(i) | | (52,730) | | — | | (53,850) | | — | | | 735 | | (d)(g)(i) | | (53,115) | |||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Total stockholders' equity | | 5,274 | | — | | — | | 183,957 | | 189,231 | | — | | 4,465 | | — | | | 181,450 | | | 185,915 | ||||||||||||||
| | | | | | | | | | | | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | | $7,853 | | $355,602 | | $— | | $1,761 | | $365,216 | ||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | | $350,992 | | $7,377 | | $— | | | $ 6,845 | | | $365,214 |
| | TGC Historical | | | REP Historical | | | Reclassification Adjustments | | | Pro Forma Adjustments | | | Pro Forma Combined | |
Revenues: | | | | | | | | | | | |||||
Oil and natural gas sales, net | | | $— | | | $29,326 | | | $1,526(j) | | | $— | | | $30,852 |
Oil and gas properties | | | 1,526 | | | — | | | (1,526)(j) | | | — | | | — |
Contract services - related parties | | | — | | | 2,100 | | | — | | | — | | | 2,100 |
Total revenues | | | 1,526 | | | 31,426 | | | — | | | — | | | 32,952 |
Costs and expenses | | | | | | | | | | | |||||
Lease operating expenses | | | — | | | 9,788 | | | — | | | — | | | 9,788 |
Production costs and taxes | | | 1,652 | | | 1,449 | | | — | | | — | | | 3,101 |
Exploration costs | | | — | | | 8,504 | | | — | | | 1(k) | | | 8,505 |
Depletion, depreciation, amortization and accretion | | | 315 | | | 10,383 | | | — | | | (29)(l) | | | 10,669 |
General and administrative | | | 639 | | | 5,449 | | | — | | | — | | | 6,088 |
Costs of contract services - related party | | | — | | | 235 | | | — | | | — | | | 235 |
Unit-based compensation expense | | | — | | | 499 | | | — | | | — | | | 499 |
Transaction costs | | | — | | | 43 | | | — | | | — | | | 43 |
Total costs and expenses | | | 2,606 | | | 36,350 | | | — | | | (28) | | | 38,928 |
| | | | | | | | | | ||||||
Loss from operations | | | (1,080) | | | (4,924) | | | — | | | 28 | | | (5,976) |
| | | | | | | | | | ||||||
Other Income (Expense): | | | | | | | | | | | |||||
Interest expense | | | (4) | | | (2,719) | | | — | | | — | | | (2,723) |
Gain on sale of assets | | | 3 | | | — | | | — | | | — | | | 3 |
Gain on derivatives, net | | | — | | | 55,035 | | | — | | | — | | | 55,035 |
Total other income (loss) | | | (1) | | | 52,316 | | | — | | | — | | | 52,315 |
| | | | | | | | | | ||||||
Net Income (Loss) Before Income Taxes | | | (1,081) | | | 47,392 | | | — | | | 28 | | | 46,339 |
| | | | | | | | | | ||||||
Income tax expense | | | — | | | (319) | | | — | | | (9,764)(m) | | | (10,093) |
Net income (loss) | | | (1,081) | | | 47,073 | | | — | | | (9,746) | | | 36,246 |
| | | | | | | | | | ||||||
Dividends on preferred units | | | — | | | (1,767) | | | — | | | 1,767(n) | | | — |
Net income (loss) attributable to common units | | | (1,081) | | | 45,306 | | | — | | | (7,979) | | | 36,246 |
Earnings (loss) per unit/share: | | | | | | | | | | | |||||
Basic | | | $(0.10) | | | $29.63 | | | — | | | — | | | $0.17 |
Diluted | | | $(0.10) | | | $23.20 | | | — | | | — | | | $0.17 |
Weighted average common shares/units outstanding: | | | | | | | | | | | |||||
Basic | | | 10,669,794 | | | 1,529,246 | | | — | | | — | | | 209,098,826 |
Diluted | | | 10,669,794 | | | 2,029,092 | | | — | | | 198,429,032(t) | | | 209,098,826(1) |
| | REP Historical | | | TGC Historical | | | Reclassification Adjustments | | | | | Pro Forma Adjustments | | | | | Pro Forma Combined | |||
Revenues: | | | | | | | | | | | | ��� | | | |||||||
Oil and natural gas sales, net | | | $73,133 | | | $— | | | $3,426 | | | (j) | | | $— | | | | | $76,559 | |
Oil and gas properties | | | — | | | 3,426 | | | (3,426) | | | (j) | | | — | | | | | — | |
Contract services - related parties | | | 3,800 | | | — | | | — | | | | | — | | | | | 3,800 | ||
Total revenues | | | 76,933 | | | 3,426 | | | — | | | | | — | | | | | 80,359 | ||
Costs and expenses: | | | | | | | | | | | | | | | |||||||
Lease operating expenses | | | 20,997 | | | — | | | 3,165 | | | (k) | | | — | | | | | 24,162 | |
Production costs and taxes | | | 3,526 | | | 3,193 | | | (3,165) | | | (k) | | | — | | | | | 3,554 | |
Exploration costs | | | 9,923 | | | — | | | — | | | | | 10 | | | (m) | | | 9,933 | |
Depletion, depreciation, amortization and accretion | | | 21,479 | | | 611 | | | — | | | | | (55) | | | (n) | | | 22,035 | |
General and administrative | | | 10,826 | | | 1,713 | | | (14) | | | (l) | | | — | | | | | 12,525 | |
Unit-based compensation expense | | | 963 | | | — | | | 14 | | | (l) | | | — | | | | | 977 | |
Costs of contract services - related party | | | 503 | | | — | | | — | | | | | — | | | | | 503 | ||
Transaction costs | | | 1,431 | | | — | | | — | | | | | — | | | | | 1,431 | ||
Total costs and expenses | | | 69,648 | | | 5,517 | | | — | | | | | (45) | | | | | 75,120 | ||
| | | | | | | | | | | | | | ||||||||
Income (loss) from operations | | | 7,285 | | | (2,091) | | | — | | | | | 45 | | | | | 5,239 | ||
| | | | | | | | | | | | | | ||||||||
Other Income (Expense): | | | | | | | | | | | | | | | |||||||
Interest expense | | | (5,299) | | | (8) | | | — | | | | | — | | | | | (5,307) | ||
Gain on sale of assets and other income | | | — | | | 10 | | | — | | | | | — | | | | | 10 | ||
Gain on derivatives, net | | | 33,876 | | | — | | | — | | | | | — | | | | | 33,876 | ||
Total other income | | | 28,577 | | | 2 | | | — | | | | | — | | | | | 28,579 | ||
| | | | | | | | | | | | | | ||||||||
Net Income (Loss) Before Income Taxes | | | 35,862 | | | (2,089) | | | — | | | | | 45 | | | | | 33,818 | ||
| | | | | | | | | | | | | | ||||||||
Income tax benefit (expense) | | | (718) | | | 28 | | | — | | | | | (6,936) | | | (o) | | | (7,626) | |
Net income (loss) | | | 35,144 | | | (2,061) | | | — | | | | | (6,891) | | | | | 26,192 | ||
| | | | | | | | | | | | | | ||||||||
Dividends on preferred units | | | (3,535) | | | — | | | — | | | | | 3,535 | | | (p) | | | — | |
Net income (loss) attributable to common units | | | 31,609 | | | (2,061) | | | — | | | | | (3,356) | | | | | 26,192 | ||
Earnings per unit/share: | | | | | | | | | | | | | | | |||||||
Basic | | | $20.67 | | | $(0.19) | | | — | | | | | — | | | | | $0.12 | ||
Diluted | | | $17.24 | | | $(0.19) | | | — | | | | | — | | | | | $0.12 | ||
Weighted average common shares/units outstanding: | | | | | | | | | | | | | | | |||||||
Basic | | | 1,528,555 | | | 10,669,602 | | | — | | | | | — | | | | | 209,978,802 | ||
Diluted | | | 2,037,952 | | | 10,669,602 | | | — | | | | | 199,309,200 | | | (q) | | | 209,978,802(1) |
| | Unaudited Reconciliation of REP's historical statement of operations for the six month period fromJanuary 1, 2020 through June 30, 2020 | |||||||
| | For the Nine Months Ended | | | For the three Months Ended | | | For the six month period | |
| | June 30, 2020 (Unaudited) | | | December 31, 2019 (Unaudited) | | | January 1, 2020 - June 30, 2020 (Unaudited) | |
| | (In Thousands) | |||||||
Revenues: | | | | | | | |||
Oil and natural gas sales, net | | | $ 57,824 | | | $28,498 | | | $ 29,326 |
Contract services - related parties | | | 3,150 | | | 1,050 | | | $2,100 |
Total Revenues | | | 60,974 | | | 29,548 | | | 31,426 |
| | | | | | ||||
Operating Expenses: | | | | | | | |||
Lease operating expenses | | | 15,517 | | | 5,729 | | | 9,788 |
Production taxes | | | 2,808 | | | 1,359 | | | 1,449 |
Exploration costs | | | 9,231 | | | 727 | | | 8,504 |
Depletion, depreciation, amortization, and accretion | | | 16,020 | | | 5,637 | | | 10,383 |
General and administrative expenses | | | — | | | — | | | — |
Administrative Costs | | | 8,669 | | | 3,220 | | | 5,449 |
Unit-based compensation expense | | | 650 | | | 151 | | | 499 |
Cost of contract services - related party | | | 403 | | | 168 | | | 235 |
Transaction costs | | | 42 | | | (1) | | | 43 |
Total Operating Expenses | | | 53,340 | | | 16,990 | | | 36,350 |
| | | | | | ||||
Income (Loss) From Operations | | | 7,634 | | | 12,558 | | | (4,924) |
| | | | | | ||||
Other Income (Expenses): | | | | | | | |||
Interest Expense | | | (4,086) | | | (1,367) | | | (2,719) |
Gain (loss) on derivatives | | | 36,999 | | | (18,036) | | | 55,035 |
Total Other Income (Expense) | | | 32,913 | | | (19,403) | | | 52,316 |
| | | | | | ||||
Net Income (Loss) Before Income Taxes | | | 40,547 | | | (6,845) | | | 47,392 |
| | | | | | ||||
Income Tax Expense | | | (319) | | | — | | | (319) |
Net Income (Loss) | | | 40,228 | | | (6,845) | | | 47,073 |
| | | | | | ||||
Dividends on Preferred Units | | | (2,631) | | | (864) | | | (1,767) |
Net Income (Loss) Attributable to Common Unitholders | | | $ 37,597 | | | $(7,709) | | | $ 45,306 |
| | TGC Historical | | | REP Historical | | | Reclassification Adjustments | | | Pro Forma Adjustments | | | Pro Forma Combined | |
Revenues: | | | | | | | | | | | |||||
Oil and natural gas sales, net | | | $— | | | $101,096 | | | $4,911(o) | | | $— | | | $106,007 |
Oil and gas properties | | | 4,911 | | | — | | | (4,911)(o) | | | — | | | — |
Contract services - related parties | | | — | | | 1,900 | | | — | | | — | | | 1,900 |
Total revenues | | | 4,911 | | | 102,996 | | | — | | | — | | | 107,907 |
Costs and expenses | | | | | | | | | | | |||||
Lease operating expenses | | | — | | | 23,808 | | | — | | | — | | | 23,808 |
Production costs and taxes | | | 3,398 | | | 4,804 | | | — | | | — | | | 8,202 |
Exploration costs | | | — | | | 5,074 | | | — | | | 137(p) | | | 5,211 |
Depletion, depreciation, amortization and accretion | | | 716 | | | 20,182 | | | — | | | (168)(q) | | | 20,730 |
General and administrative | | | 1,302 | | | 13,066 | | | — | | | — | | | 14,368 |
Costs of contract services - related party | | | — | | | 21 | | | — | | | — | | | 21 |
Transaction costs | | | — | | | 4,553 | | | — | | | — | | | 4,553 |
Total costs and expenses | | | 5,416 | | | 71,508 | | | — | | | (31) | | | 76,893 |
| | | | | | | | | | ||||||
Income (loss) from operations | | | (505) | | | 31,488 | | | — | | | 31 | | | 31,014 |
| | | | | | | | | | ||||||
Other Income (Expense): | | | | | | | | | | | |||||
Interest expense | | | (10) | | | (4,924) | | | — | | | — | | | (4,934) |
Gain on sale of assets and other income | | | 51 | | | — | | | — | | | — | | | 51 |
Gain on derivatives, net | | | — | | | 26,712 | | | — | | | — | | | 26,712 |
Total other income | | | 41 | | | 21,788 | | | — | | | — | | | 21,829 |
| | | | | | | | | | ||||||
Net Income (Loss) Before Income Taxes | | | (464) | | | 53,276 | | | — | | | 31 | | | 52,843 |
| | | | | | | | | | ||||||
Income tax benefit (expense) | | | 28 | | | (1,410) | | | — | | | (11,505)(r) | | | (12,887) |
Net income (loss) | | | (436) | | | 51,866 | | | — | | | (11,474) | | | 39,956 |
| | | | | | | | | | ||||||
Dividends on preferred units | | | — | | | (3,330) | | | — | | | 3,330(s) | | | — |
Net income (loss) attributable to common units/shares | | | (436) | | | 48,536 | | | — | | | (8,144) | | | 39,956 |
Earnings (loss) per unit/share: | | | | | | | | | | | |||||
Basic | | | $(0.04) | | | $31.87 | | | — | | | — | | | $0.19 |
Diluted | | | $(0.04) | | | $26.03 | | | — | | | — | | | $0.19 |
Weighted average common shares/units outstanding: | | | | | | | | | | | |||||
Basic | | | 10,651,342 | | | 1,522,883 | | | — | | | — | | | 205,461,904 |
Diluted | | | 10,651,342 | | | 1,992,198 | | | — | | | 194,810,562(t) | | | 205,461,904(1) |
(1) | As discussed in the |
| | For the year ended | |
Weighted average common shares/units outstanding | | | |
Weighted average common shares/units outstanding | | | |
Weighted average common shares/units outstanding | | | |
Earnings per unit/share | | | $ |
Earnings per unit/share | | | $ |
(2) | TGC’s historical statements of operations were adjusted to only include the twelve months ended September 30, 2020. The data in the above table includes the financials for the period October 1, 2019 through September 30, 2020. The historical data in the above table will not be comparative to the financials included in other sections of this filling. The table below includes a reconciliation of TGC’s historical statement of operations for the nine month period ended September 30, 2020 to the twelve month period ended September 30, 2020. |
| | For the Nine Months Ended September 30 2020 (Unaudited) | | | For the Three Months Ended December 31 2019 (Unaudited) | | | For the Twelve Month Period October 1, 2019 - September 30, 2020 (Unaudited) | |
| | (In Thousands) | |||||||
Revenues | | | | | | | |||
Oil and gas properties | | | $2,292 | | | $1,134 | | | $3,426 |
Total revenues | | | 2,292 | | | 1,134 | | | 3,426 |
| | | | | | ||||
Cost and expenses | | | | | | | |||
Production costs and taxes | | | 2,399 | | | 794 | | | 3,193 |
Depreciation, depletion, and amortization | | | 461 | | | 150 | | | 611 |
General and administrative | | | 1,324 | | | 389 | | | 1,713 |
Total cost and expenses | | | 4,184 | | | 1,333 | | | 5,517 |
| | | | | | ||||
Net loss from operations | | | (1,892) | | | (199) | | | (2,091) |
| | | | | | ||||
Other income (expense) | | | | | | | |||
Interest expense | | | (6) | | | (2) | | | (8) |
Gain on sale of assets and other income | | | 4 | | | 6 | | | 10 |
Total other income (expense) | | | (2) | | | 4 | | | 2 |
| | | | | | ||||
Net loss from operations before income tax | | | (1,894) | | | (195) | | | (2,089) |
| | | | | | ||||
Deferred income tax benefit | | | — | | | 28 | | | 28 |
Net loss | | | (1,894) | | | (167) | | | (2,061) |
| | $ | |
| | ||
Total | | | $ |
| | Preliminary Purchase Price Allocation | |
| | (In thousands) | |
Consideration: | | | |
Fair value of | | | $ |
Total consideration | | | $ |
Fair value of assets acquired: | | | |
Cash and cash equivalents | | | $ |
Accounts receivable | | | |
Inventory | | | |
Prepaid expenses and other current assets | | | |
Oil and Gas Properties | | | |
Loan fees, net | | | |
Other property and equipment, net of lease liabilities | | | |
Amounts attributable to assets acquired | | | $ |
Fair value of liabilities assumed: | | | |
Accounts payable - trade | | | $ |
Accrued liabilities | | | |
Asset retirement obligations - current | | | |
Asset retirement obligations - non-current | | | |
Amounts attributable to liabilities assumed | | | $ |
Total tangible net assets | | | $ |
Goodwill | | | $ |
Total tangible net assets and goodwill | | | $ |
(unaudited, in thousands) | | | Purchase Price | | | Estimated Goodwill |
As presented in the pro forma combined results | | | $12,287 | | | $8,362 |
10% increase in total consideration | | | 13,516 | | | 9,591 |
10% decrease in total consideration | | | 11,058 | | | 7,133 |
(a) | Represents a reclassification of approximately |
(b) | Adjustment to reflect a |
(c) | Adjustment to reflect a decrease of |
(d) | Adjustment to reflect the pro forma net deferred tax liability of |
(e) | Adjustment to reflect the recapitalization of REP upon closing of the Transaction. REP will be issued approximately 203 million shares of TGC Common Stock. REP existing Members’ Equity less the par value of TGC stock will be reclassified to Additional Paid-In Capital. |
(f) | Adjustment to reflect a decrease of |
(g) | Adjustment to reflect the elimination of TGC’s historical cumulative deficit in connection with the acquisition method of accounting. |
(h) | Adjustment to reflect a |
(i) | Reflects the estimated transaction costs of |
(j) | Reclassification of |
(k) | Reclassification to reflect the $3.165 million of lease operating expense incurred by TGC for the twelve months ended September 30, 2020 under the successful efforts method of accounting. |
(l) | Reclassification to reflect the $0.014 million of general and administrative expense to conform to REP’s presenation of unit-based compensation expense. |
Adjustment to reflect the |
Adjustment to eliminate TGC’s historical depreciation, depletion and amortization (“DD&A”) of |
Adjustment to reflect |
Adjustment to remove the dividend accrued related to the Series A Preferred Units which are assumed to have been converted on October 1, |
Adjustment to reflect the Pro Forma number of common shares that would have been issued by taking REP’s weighted average diluted common units outstanding for their respective periods multiplied by the share consideration ratio of 97.796467. The diluted units assume a 1 to 1 conversion of the Series A preferred units into REP’s common units initially and then together all of REP’s common units outstanding are exchanged for TGC’s common shares using the consideration ratio. See Note 4 for further details below. |
(in thousands, except per share data) | | | Six Months Ended June 30, 2020 | | | Year Ended December 31 2019 |
Net income (loss) from continuing operations | | | $36,247 | | | $39,956 |
REP's weighted average units | | | 1,529 | | | 1,523 |
REP's convertible preferred units | | | 491 | | | 462 |
REP's restricted units | | | 9 | | | 7 |
Total REP's units converted | | | 2,029 | | | 1,992 |
Weighted average REP shares outstanding - basic and diluted | | | 2,029 | | | 1,992 |
Share consideration ratio | | | 97.796467 | | | 97.796467 |
Post-share consolidation shares | | | 198,429 | | | 194,811 |
TGC shares outstanding as of June 30, 2020 - basic and diluted | | | 10,670 | | | 10,651 |
Adjusted weighted average shares outstanding - basic and diluted | | | 209,099 | | | 205,462 |
Net income from continuing operations per share: | | | | | ||
Basic and diluted | | | $0.17 | | | $0.19 |
| | Year Ended September 30, 2020 | |
(in thousands, except per share data) | | | |
Net income from continuing operations | | | $ 26,192 |
REP's weighted average units | | | 1,529 |
REP's convertible preferred units | | | 491 |
REP's restricted units | | | 19 |
Total REP's units converted | | | 2,038(1) |
Weighted average REP shares outstanding - basic and diluted | | | 2,038 |
| | Year Ended September 30, 2020 | |
(in thousands, except per share data) | | | |
Share consideration ratio | | | 97.796467 |
Post-share consolidation shares | | | 199,309 |
Weighted average TGC shares outstanding - basic and diluted | | | 10,670 |
Adjusted weighted average shares outstanding - basic and diluted | | | 209,979 |
Net income from continuing operations per share: | | | |
Basic and diluted | | | $0.12 |
(1) | The total units converted represents the number of REP’s units considered outstanding on a fully diluted basis as of September 30, 2020 which were 2,038. As of December 15, 2020, 2,076 REP were outstanding on a fully diluted basis, which would result in 203 million shares of TGC common stock being issued to REP members. |
| | Oil (MBbls) | | ||||||
| | TGC Historical | | | REP Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 1,094 | | | 23,642 | | | 24,736 |
Extensions, discoveries and other additions | | | 8 | | | 13,670 | | | 13,678 |
Acquisitions (sale) | | | (2) | | | 259 | | | 257 |
Revision of previous estimates | | | (203) | | | 1,564 | | | 1,361 |
Production | | | (94) | | | (1,975) | | | (2,069) |
As of September 30, 2019 and December 31, 2019 | | | 803 | | | 37,159 | | | 37,962 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 976 | | | 13,764 | | | 14,740 |
As of September 30, 2019 and December 31, 2019 | | | 803 | | | 19,198 | | | 20,001 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 118 | | | 9,878 | | | 9,996 |
As of September 30, 2019 and December 31, 2019 | | | — | | | 17,961 | | | 17,961 |
| | Oil (MBbls) | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 37,159 | | | 803 | | | 37,962 |
Extensions, discoveries and other additions | | | 2,265 | | | — | | | 2,265 |
Revision of previous estimates | | | (206) | | | (86) | | | (292) |
Production | | | (2,060) | | | (67) | | | (2,127) |
As of September 30, 2020 | | | 37,158 | | | 650 | | | 37,808 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 19,198 | | | 803 | | | 20,001 |
As of September 30, 2020 | | | 19,149 | | | 650 | | | 19,799 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 17,961 | | | — | | | 17,961 |
As of September 30, 2020 | | | 18,009 | | | — | | | 18,009 |
| | Natural Gas (MMcf) | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 40,991 | | | — | | | 40,991 |
Extensions, discoveries and other additions | | | 3,030 | | | — | | | 3,030 |
Revision of previous estimates | | | 11,290 | | | — | | | 11,290 |
Production | | | (1,628) | | | — | | | (1,628) |
As of September 30, 2020 | | | 53,683 | | | — | | | 53,683 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 23,096 | | | — | | | 23,096 |
As of September 30, 2020 | | | 31,138 | | | — | | | 31,138 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 17,895 | | | — | | | 17,895 |
As of September 30, 2020 | | | 22,545 | | | — | | | 22,545 |
| | Natural Gas (MMcf) | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 12,078 | | | — | | | 12,078 |
Extensions, discoveries and other additions | | | 13,658 | | | — | | | 13,658 |
Acquisitions (sale) | | | 128 | | | — | | | 128 |
Revision of previous estimates | | | 16,013 | | | — | | | 16,013 |
Production | | | (886) | | | — | | | (886) |
As of September 30, 2019 and December 31, 2019 | | | 40,991 | | | — | | | 40,991 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 7,481 | | | — | | | 7,481 |
As of September 30, 2019 and December 31, 2019 | | | 23,096 | | | — | | | 23,096 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 4,597 | | | — | | | 4,597 |
As of September 30, 2019 and December 31, 2019 | | | 17,895 | | | — | | | 17,895 |
| | NGLs (MBbls) | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 2,446 | | | — | | | 2,446 |
Extensions, discoveries and other additions | | | 3,634 | | | — | | | 3,634 |
Acquisitions (sale) | | | 34 | | | — | | | 34 |
Revision of previous estimates | | | 4,834 | | | — | | | 4,834 |
Production | | | (135) | | | — | | | (135) |
As of September 30, 2019 and December 31, 2019 | | | 10,812 | | | — | | | 10,812 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 1,486 | | | — | | | 1,486 |
As of September 30, 2019 and December 31, 2019 | | | 6,045 | | | — | | | 6,045 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 960 | | | — | | | 960 |
As of September 30, 2019 and December 31, 2019 | | | 4,767 | | | — | | | 4,767 |
| | Total Reserves Equivalent (Mboe) | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 28,101 | | | 1,094 | | | 29,195 |
Extensions, discoveries and other additions | | | 19,579 | | | 8 | | | 19,587 |
Acquisitions (sale) | | | 314 | | | (2) | | | 312 |
Revision of previous estimates | | | 9,066 | | | (203) | | | 8,863 |
Production | | | (2,258) | | | (94) | | | (2,352) |
As of September 30, 2019 and December 31, 2019 | | | 54,803 | | | 803 | | | 55,606 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 16,497 | | | 976 | | | 17,473 |
As of September 30, 2019 and December 31, 2019 | | | 29,092 | | | 803 | | | 29,895 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2018 and December 31, 2018 | | | 11,605 | | | 118 | | | 11,723 |
As of September 30, 2019 and December 31, 2019 | | | 25,711 | | | — | | | 25,711 |
| | NGLs (MBbls) | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 10,812 | | | — | | | 10,812 |
Extensions, discoveries and other additions | | | 642 | | | — | | | 642 |
Revision of previous estimates | | | (513) | | | — | | | (513) |
Production | | | (260) | | | — | | | (260) |
As of September 30, 2020 | | | 10,681 | | | — | | | 10,681 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 6,045 | | | — | | | 6,045 |
As of September 30, 2020 | | | 5,847 | | | — | | | 5,847 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 4,767 | | | — | | | 4,767 |
As of September 30, 2020 | | | 4,834 | | | — | | | 4,834 |
| | Total Reserves Equivalent (MBoe) | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
Proved developed and undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 54,803 | | | 803 | | | 55,606 |
Extensions, discoveries and other additions | | | 3,412 | | | — | | | 3,412 |
Revision of previous estimates | | | 1,163 | | | (86) | | | 1,077 |
Production | | | (2,592) | | | (67) | | | (2,659) |
As of September 30, 2020 | | | 56,786 | | | 650 | | | 57,436 |
Proved developed reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 29,092 | | | 803 | | | 29,895 |
As of September 30, 2020 | | | 30,186 | | | 650 | | | 30,836 |
Proved undeveloped reserves: | | | | | | | |||
As of September 30, 2019 and December 31, 2019 | | | 25,711 | | | — | | | 25,711 |
As of September 30, 2020 | | | 26,601 | | | — | | | 26,601 |
| | Year Ended September 30, 2019 and December 31, 2019 | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
| | (In thousands) | |||||||
Future cash inflows | | | $1,951,657 | | | $40,655 | | | $1,992,312 |
Future production costs | | | (555,124) | | | (24,829) | | | (579,953) |
Future development costs | | | (164,036) | | | (542) | | | (164,578) |
Future income tax expense | | | (4,059) | | | — | | | (4,059) |
Future net cash flows for estimated timing of cash flows | | | 1,228,438 | | | 15,284 | | | 1,243,722 |
10% annual discount for estimated timing of cash flows | | | (786,226) | | | (6,919) | | | (793,145) |
Standardized measure of discounted future net cash flows | | | $442,212 | | | $8,365 | | | $450,577 |
| | Year Ended September 30, 2020 | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
| | (In thousands) | |||||||
Future cash inflows | | | $1,533,286 | | | $25,100 | | | $1,558,386 |
Future production costs | | | (550,427) | | | (17,278) | | | (567,705) |
Future development costs | | | (144,912) | | | (539) | | | (145,451) |
| | Year Ended September 30, 2020 | |||||||
| | REP Historical | | | TGC Historical | | | Pro Forma Combined | |
| | (In thousands) | |||||||
Future income tax expense | | | (3,167) | | | — | | | (3,167) |
Future net cash flows for estimated timing of cash flows | | | 834,780 | | | 7,283 | | | 842,063 |
10% annual discount for estiamted timing of cash flows | | | (532,442) | | | (3,058) | | | (535,500) |
Standardized measure of discounted future net cash flows | | | $302,338 | | | $4,225 | | | $306,563 |
| | Year Ended September 30, 2019 and December 31, 2019 | | | Year Ended September 30, 2020 | |||||||||||||
| | REP Historical | | TGC Historical | | Pro Forma Combined | | | REP Historical | | TGC Historical | | Pro Forma Combined | |||||
| (In thousands) | | (In thousands) | |||||||||||||||
As of September 30, 2018 and December 31, 2018 | | $382,023 | | $13,976 | | $395,999 | ||||||||||||
As of September 30, 2019 and December 31, 2019 | | $442,212 | | $8,365 | | $450,577 | ||||||||||||
Sales of crude oil, natural gas and NGLs, net | | (85,921) | | (1,646) | | (87,567) | | 7,328 | | (204) | | 7,124 | ||||||
Net change in prices and production costs | | (133,615) | | (3,348) | | (136,963) | | (162,571) | | (2,896) | | (165,467) | ||||||
Net change in future development costs | | (1,226) | | 1,016 | | (210) | | (12,348) | | (309) | | (12,657) | ||||||
Extension, discoveries and other additions | | 135,350 | | 154 | | 135,504 | | 17,490 | | — | | 17,490 | ||||||
Acquisition (sale) of reserves | | 1,294 | | (26) | | 1,268 | ||||||||||||
Revisions of previous quantities | | 85,381 | | (3,058) | | 82,323 | | (48,611) | | (983) | | (49,594) | ||||||
Previously estimated development costs incurred | | 20,769 | | — | | 20,769 | | 10,448 | | — | | 10,448 | ||||||
Net change in income taxes | | (987) | | — | | (987) | | 891 | | — | | 891 | ||||||
Accretion of discount | | 38,509 | | 1,211 | | 39,720 | | 44,627 | | 518 | | 45,145 | ||||||
Other | | 635 | | 86 | | 721 | | 2,872 | | (266) | | 2,606 | ||||||
As of September 30, 2019 and December 31, 2019 | | $442,212 | | $8,365 | | $450,577 | ||||||||||||
As of September 30, 2020 | | $302,338 | | $4,225 | | $306,563 |
Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | Weighted-average exercise price of outstanding, options, warrants and rights (b) | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | Weighted-average exercise price of outstanding, options, warrants and rights (b) | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||
Equity compensation plans approve by security holders(1) | | 9,375 | | $2.18 | | 273,067 | | 1,250 | | $1.20 | | 253,425 | ||||||
Equity compensation plans not approved by security holders | | — | | — | | — | | — | | — | | — | ||||||
Total | | 9,375 | | $2.18 | | 273,067 | | 1,250 | | $1.20 | | 253,425 |
(1) | Refers to Tengasco, Inc. 2018 Stock Incentive Plan (the “2018 Plan”) which was adopted to provide an incentive to key employees, officers, directors and consultants of the Company and its present and future subsidiary corporations, and to offer an additional inducement in obtaining the services of such individuals. The 2018 Plan contains the same substantive terms of the Company’s previous stock incentive plan adopted in October, 2000 and as thereafter amended until its expiration on January 10, 2018. The 2018 Plan provided an aggregate number of shares for which shares, options, and stock appreciation rights may be issued under the 2018 Plan equal to the number of shares that were available in the previous plan upon its expiration. The 2018 Plan was approved by a majority of the Company’s shareholders acting on written consent and the shares thereunder were subject to Registration Statement on Form S-8 filed August 27, 2018. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
Elections of Directors or Managers; Voting; Procedural Matters | ||||||
| | | | |||
Authorized Equity | | | An aggregate of 1,700,128 common units have been authorized for issuance under the REP LLC Agreement, including 1,500,000 of which were issued under contribution agreements in September 2017 at a per unit price of $100 and 200,128 of which are reserved and authorized for issuance solely pursuant to the REP 2018 Long Term Incentive Plan. An aggregate of 511,695 series A preferred units have been authorized for issuance under the REP LLC Agreement, including an aggregate of 416,666 of which were issued under unit purchase agreements in March and September 2017 at a per unit price of $120 and an aggregate of 95,029 of which were issued as distributions on the series a preferred units that were paid in-kind to the holders thereof. In addition to the remaining 135,680 common units authorized for issuance under the REP 2018 Long Term | | | The TGC charter authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. As of |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | Incentive Plan, additional common units and series As of | | | ||
Number of Directors or Managers | | | The REP LLC Agreement provides that the REP board of managers shall consist of up to four (4) natural persons who need not be REP members or residents of the State of Delaware. REP currently has four managers. | | | The TGC charter and the TGC bylaws currently provide that the number of directors that constitute the whole TGC board of directors is fixed by, or in the manner provided in, the TGC bylaws. The TGC bylaws currently state that the number of directors of TGC shall not be less than three (3) or more than ten (10). TGC currently has 3 directors. |
| | | | |||
Regular Meetings of Directors or Managers | | | The REP LLC Agreement provides that the REP board of managers shall be held not less often than quarterly at such times and places as may be fixed from time to time by resolution adopted by the managers. Except as otherwise provided by statute or the REP certificate, any and all business that may be performed by the REP board of managers hereunder may be transacted at any regular meeting. REP shall provide to each manager not less than three (3) business days prior to each such regular meeting a briefing book containing the relevant information to be conducted at such regular meeting. | | | The TGC bylaws provide that the TGC board of directors shall schedule regular meeting as they deem necessary by a vote of majority of the directors then serving, provided, however, the TGC board of directors shall have at least one annual regular meeting immediately after the annual meeting of TGC stockholders. Notice of regular meetings, unless waived, shall be given by mail, electronic transmission or fax transmission or in person to each director, at his or her address as the same may appear on the records of TGC, or in the absence of such address, at his or her residence or usual place of business, at least three (3) days before the day on which the meeting is to be held. |
| | | | |||
Special Meetings of Directors or Managers | | | The REP LLC Agreement provides that special meetings of the REP board of managers may be called by any manager by giving written notice thereof to the other managers. Such notice of a special meeting shall state the time, date and purpose or purposes of the proposed meeting, and it shall be given to the other managers so that it is actually received no less than two (2) business days, and no more than 14 calendar days, prior to the date of the meeting. | | | The TGC bylaws provide that special meetings of the TGC board of directors may be held any time on the call of the Chief Executive Officer of TGC, the Chairman of the TGC board of directors or at the request in writing of a majority of the members of the TGC board of directors then serving. Notice of the time and place of all special meetings of the TGC board of directors shall be orally or in writing, by telephone, facsimile, electronic mail, telegraph or telex, during normal business hours, at |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | | | least twenty-four (24) hours before the date and time of the meeting, or sent in writing to each director by first class mail, charges prepaid, at least three (3) days before the date of the meeting. Notice of any special meeting of the TGC board of directors shall state the purpose thereof. If the Secretary of TGC shall fail or refuse to give such notice, then the notice may be given by the officer or any one of the directors making the call. | ||
| | | | |||
Stockholder or Member Nominations and Proposals | | | The REP LLC Agreement provides that the REP members shall vote all of their REP common units and any other voting securities of REP over which they have voting control, at any regular or special meeting, in order to cause (i) the election to the REP board of managers of one (1) representative designated by Yorktown Energy Partners XI, L.P.; (ii) the election to the REP board of managers of one (1) representative designated by Riley Exploration Group, Inc.; (iii) the election to the REP board of managers of one (1) representatives designated by Boomer Petroleum, LLC; and (iv) the election to the Board of Managers of one (1) representative designated by Bluescape Riley Exploration Holdings LLC. | | | The TGC bylaws provide that nominations of any person for election to the TGC board of directors at an annual meeting or at a special meeting may be made (i) by the TGC board of directors or (ii) by any TGC stockholder who timely complies with the notice procedures set forth below. The TGC bylaws further provide that a stockholder’s notice must be received in writing by the secretary at TGC’s principal executive offices as follows: (i) in the case of an election of directors at an annual meeting of stockholders, not less than 120 days immediately preceding the date of the mailing of the notice of annual meeting and proxy statement and other materials for the preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be received not later than the close of business on the tenth day following the day on which the notice of the date of the meeting was mailed or public disclosure was made, which ever first occurs. |
| | | | |||
Classified Board of Directors or Managers | | | The REP certificate and the REP LLC Agreement do not provide for the division of the REP board of managers into staggered classes. | | | The TGC charter and TGC bylaws do not provide for the division of the TGC board of directors into staggered classes. |
| | | | |||
Director or Manager Action by Written Consent | | | The REP LLC Agreement provides that unless otherwise restricted by the REP certificate, any action required or permitted to be taken at any meeting of | | | The TGC bylaws provide that any action required or permitted to be taken at any meeting of the TGC board of directors or any committee thereof may be taken |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | the REP board of managers, or any committee designated by the REP board of managers, may be taken without a meeting if all members of the REP board of managers or committee thereof, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the REP board of managers or committee thereof. | | | without a meeting, if a written consent to such action is signed by all members of the TGC board of directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the TGC board of directors or committee. | |
| | | | |||
Removal of Directors or Managers | | | Under the REP LLC Agreement, the REP members shall vote all of their REP common units and any other voting securities of REP over which they have voting control, at any regular or special meeting, in order to cause the removal from the REP board of managers (with or without cause) of any manager at the written request of the party entitled to designate such manager (but only upon such written request and under no other circumstances). | | | Under the TGC bylaws, any or all of the TGC directors may be removed for cause by a majority vote of the TGC stockholders present, either in person or by proxy, at a meeting called for such purpose and notice of which was provided to the stockholders in accordance with the TGC bylaws. |
| | | | |||
Special Meeting of the Stockholders or Members | | | Pursuant to the REP LLC Agreement, the REP members may hold meetings from time to time and such meetings shall be held at such times and places, as often and in such manner as shall be determined by holders of at least 85% of the then-outstanding REP common units, including for the purposes of such determination that number of REP common units as would be issuable upon conversion of all of the outstanding REP series A preferred units on the date of such determination (a “supermajority interest of the REP members”). | | | The TGC bylaws provide that special meetings of TGC stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by a majority of the TGC board of directors then serving, the Chairman of the TGC board of directors, or the Chief Executive Officer of TGC. |
| | | | |||
Cumulative Voting | | | Neither the REP certificate nor the REP LLC Agreement grant the REP members the right to engage in cumulative voting. | | | The TGC charter specifically denies the ability of the TGC stockholders to engage in cumulative voting. |
| | | | |||
Vacancies | | | The REP LLC Agreement provides that the REP members shall vote all of their REP common units and any other voting securities of REP over which they have voting control, at any regular or special meeting, in order to cause, in the event that any manager for any reason ceases to serve as a member of the REP board of managers during his or her term of office, or is temporarily incapable of participating in a meeting of the REP | | | The TGC bylaws provide that if the office of any director becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, creation of a new directorship, or otherwise, a majority of the remaining members of the TGC board of directors, though less than a quorum, shall choose a successor or successors, or a director to fill the newly created directorship. In no event shall the TGC stockholders |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | board of managers for purposes of achieving a quorum and voting therein, the resulting vacancy on the REP board of managers be filled by the person entitled to appoint such REP manager as described in “Stockholder or Member Nominations and Proposals” above, provided that each so appointed manager is either: (A) an employee of REP, (B) an affiliate of the appointing person, or (C) an employee, advisor, or consultant of the appointing person or its affiliate. | | | have the right to fill such vacancies, unless the TGC board of directors has determined by resolution that the TGC stockholders shall fill such vacancy at a meeting of the TGC stockholders. | |
| | | | |||
Voting Equity | | | Under the REP LLC Agreement, it is the intention that the involvement of the REP Members in REP (except as set forth in the paragraph below) is for the purpose of informing the REP members with respect to various REP matters, explaining any information furnished to the REP members in connection therewith, answering any questions the REP members may have with respect thereto and receiving any ideas or suggestions the REP members may have with respect thereto; it being the further intention that the REP board of managers shall have full and exclusive power and authority on behalf of REP to acquire, manage, control and administer the assets, business and affairs of REP, subject to the below. Pursuant to the REP LLC Agreement, REP (and the officers and agents acting on its behalf) shall not take action in connection with the following matters without the approval of supermajority interest of the REP members: (i) the issuance or repurchase of any debt or equity securities of REP, other than (A) REP units issued as outlined in the REP LLC Agreement; (B) REP units convertible, exchangeable or exercisable in connection with any debt or equity securities approved by each of the REP board of managers and a supermajority interest of the REP members; (C) REP units issued pursuant to an employee stock option plans, employee incentive plans, employee benefit plans, or employment agreements approved by the REP board of managers (D) REP units convertible, exchangeable or exercisable in connection | | | Under the TGC charter, subject to the rights of any other class or series of stock and the provisions of the laws of the State of Delaware governing business corporations, voting rights of TGC shall be vested in the holders of TGC common stock. Each holder of TGC common stock shall have one vote in respect of each share of such TGC common stock held. Under the TGC bylaws, when a quorum is present at any meeting of the TGC stockholders, and subject to the provisions of the DGCL, the TGC charter or the TGC bylaws in respect of the vote that shall be required for a specific action, the vote of the holders of a majority of the TGC stock having voting power, present in person or represented by proxy duly authorized by the stockholder and filed with the Secretary of TGC, shall decide any question brought before the meeting, unless the question is one upon which, by express provision of the statutes or of the TGC charter or of the TGC bylaws, a different vote is required, in which case the express provision shall govern and control the decision of such question. Each TGC stockholder shall have one (1) vote for each share of stock having voting power registered in his or her name on the books of TGC, except as otherwise provided in the TGC charter. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | with securities outstanding under employee stock option plans, employee incentive plans, employee benefit plans or employment agreements approved by the REP board of managers; (E) REP units (or other equity interests of REP) issued in connection with any stock split or stock dividend applicable to the REP units on a pro rata basis; and (F) REP units (or other equity interests in REP) offered by REP in an initial public offering or exchanged or transferred in connection with any transaction or series of transactions that result in (I) the listing of REP’s (or successor thereto) securities on a national securities exchange or (II) the REP members receiving in exchange for their equity in REP, securities listed on a national securities exchange or over the counter market (a “Listing Transaction”); (ii) the authorization or issuance of a new class or series of equity securities of REP; (iii) except in the case of an initial public offering or Listing Transaction, (A) the sale of all or substantially all of the assets of REP on a consolidated basis, (B) a merger, reorganization or consolidation of REP, (C) the sale of all or a majority of the outstanding equity interests in REP whether by share exchange or otherwise or (D) any other transaction or series of transactions in which, the owners of REP’s outstanding voting power prior to such transaction do not own at least a majority of the outstanding voting power of the successor entity immediately upon completion of the transaction; (iv) entering into any substantially dissimilar business from the business of REP; (v) entering into, terminating or replacing any credit agreement or REP’s credit facility or any of its subsidiaries; (vi) the commencement of a voluntary bankruptcy by REP or consent to the appointment of a receiver, custodian, liquidator or trustee for REP or for all or any substantial portion of its property; (vii) the declaration or payment of any distribution or dividend to the REP members; (viii) an initial public offering that reflects a pre-money valuation of less than $150,000,000; (ix) providing any compensation to the REP managers, other | | |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | than as contemplated by the REP LLC Agreement or provided to the REP managers by such person’s sponsoring person, in compensation for such person’s role as an REP manager; or (x) any incurrence of indebtedness for money borrowed of any kind (or guarantees thereof) by REP or its subsidiaries except for first lien debt to consist only of a conforming revolving credit facility provided by a money center banking institution. No approval, vote, or consent of the REP members shall be required for any transactions undertaken by REP and its affiliates in connection with or related to an initial public offering or Listing Transaction. The REP LLC Agreement further provides that the holders of REP series A preferred units will have such voting rights pursuant to the REP LLC Agreement as such holders of REP series A preferred units would have if such REP series A preferred units were converted into REP common units, at the Series A Conversion Price then in effect, and vote together with the REP common units as a single class. In addition to the rights granted above in “Voting Equity”, the affirmative vote or consent of the holders of a Supermajority Interest of the Members shall be necessary for effecting or validating the following actions relating to the REP series A preferred units: (i) any amendment, alteration or repeal of the REP certificate or the REP LLC Agreement (including by way of merger, consolidation or conversion) which materially and adversely affects the rights or preferences of the REP series A preferred units (it being understood that any issuance or creation of membership interests ranking junior to the REP series A preferred units shall not require any vote, consent or approval of the Members under this provision, (ii) issuance or reclassification of membership interests ranking pari passu or senior to the REP series A preferred units, (iii) any of the following events: (A) a merger, consolidation or transaction which, after giving effect to such merger, consolidation or transaction, | | |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | will result in holders of REP’s existing units and their respective affiliates ceasing to continue to own at least 75% (by voting power) of the outstanding shares or other voting securities of REP (or surviving or acquiring corporation or entity, as applicable), (B) a merger or consolidation other than one in which holders of REP’s existing units and their respective affiliates own at least a majority (by voting power) of the outstanding shares or other voting securities of the surviving or acquiring corporation or entity, (C) a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of REP, or (D) any voluntary or involuntary liquidation, dissolution or winding up of REP (each, an “REP Event”) other than a Listing Transaction in which the holders of the REP series A preferred units do not receive, upon the consummation of such REP Event an amount in cash or other consideration equal to (1) $120 with respect to each outstanding REP series A preferred unit held by such holder, determined as of the date immediately prior to the date of the consummation of the REP Event plus (2) any accrued but unpaid dividends on the REP series A preferred units as of such date (such amount, the “series A preferred preference amount”); provided that, in the event an REP Event is not approved by a supermajority interest of the REP members, REP may elect to redeem the outstanding REP series A preferred units in cash in an amount equal to the series A preferred preference amount immediately prior to the consummation of such REP Event and consummate such REP Event (for the avoidance of doubt, after payment in full to the holders of REP series A preferred units of the series A preferred preference amount, such holders of REP series A preferred units as such shall have no right or claim to any of the remaining assets of REP in respect of their ownership of such REP series A preferred units; and (iv) other than pursuant to the REP unit purchase agreements, a call for capital contributions from holders of REP series A preferred units. | | |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
Drag Along Rights | | | Pursuant to the REP LLC Agreement, at any time an REP member proposes a transaction where (i) any consolidation, conversion, merger or other business combination involving REP in which all of REP’s outstanding equity securities are exchanged for or converted into cash, securities of a corporation or other business organization or other property, (ii) a sale or other disposition of all or substantially all of the assets of REP to be followed promptly by a liquidation of REP or a distribution to the REP members of all or substantially all of the net proceeds of such disposition after payment or other satisfaction of liabilities and other obligations of REP, or (iii) the sale by all the REP members of all their equity securities; provided that, except as set forth below, each of the material terms and provisions of any such transaction described in clauses (i), (ii) and (iii) provides for equal and/or proportionate treatment of each of the REP members (each, a “drag-along transaction”) and if such proposed drag-along transaction has been approved by a supermajority interest of the REP members (any such approved drag-along transaction, an “approved sale”), then all REP members shall consent to and raise no objections against the approved sale, and if the approved sale is structured as (A) a merger, share exchange or consolidation of REP, or a sale of all or substantially all of the assets of REP, each REP member shall vote in favor of the approved sale and shall waive any dissenters rights, appraisal rights or similar rights in connection with such merger, consolidation or asset sale, or (B) a sale of REP units, the REP members shall agree to sell all their respective REP units which are the subject of the approved sale, on the terms and conditions of such approved sale. The REP members shall promptly take all necessary and desirable actions in connection with the consummation of the approved sale, including the execution of such agreements and such instruments and other actions reasonably necessary to (I) provide customary representations, | | | TGC does not have any drag along rights in place. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | warranties, indemnities, and escrow arrangements relating to such approved sale and (II) effectuate the allocation and distribution of the aggregate consideration upon the approved sale; provided, however, that (x) no holder of REP units who is not an officer of REP shall be obligated to be subject to any non-competition, non-solicitation, or similar restrictive covenants in connection with any Approved Sale, (y) any liability relating to representations, warranties, covenants, indemnities and agreements, other indemnification obligations regarding the business of REP shall be shared by the REP members pro rata on a several (but not joint) basis in proportion to the consideration to be received in the approved sale by each REP member and (z) in no event shall a REP member be responsible for any liabilities or indemnities in connection with such approved sale in excess of the proceeds received by such REP member in the approved sale. The REP members shall be permitted to sell their respective REP units pursuant to an approved sale without complying with any other provisions of the REP LLC Agreement. The REP LLC Agreement also provides that in furtherance of, but only to the extent that an REP member breaches its obligations under, these provisions, each of the REP members hereby (i) irrevocably appoints the officer duly authorized by the REP board of managers as its agent and attorney-in-fact (with full power of substitution) to execute all agreements, instruments and certificates and take all actions necessary or desirable to effectuate any approved sale hereunder; and (ii) grants to the agent or attorney-in-fact a proxy (which shall be deemed to be coupled with an interest and irrevocable) to vote the REP units held by such REP member in favor of any approved sale. | | |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
Stockholder or Member Rights Plan | | | REP does not have any REP member rights plans in place. | | | TGC has a stockholder rights plan. TGC has confirmed it has taken all necessary action so that the rights under such plan will expire, and will no longer be exercisable, immediately prior to the effective time without any payment being made in respect thereof. |
| | | | |||
Stockholder or Member Action by Written Consent | | | Under the REP LLC Agreement, any action required or permitted to be taken at a meeting of the REP members (voting as a class or otherwise) may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by REP members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the REP members entitled to vote were present and voting. Prompt notice of the taking of the action without a meeting by less than unanimous consent shall be given in writing to those REP members who did not consent in writing. | | | Pursuant to the TGC bylaws, in the event of the delivery to TGC of a written consent or consents in accordance with Section 228 of the DGCL purporting to authorize or take corporate action and/or related revocations, the Secretary of TGC shall provide for the safekeeping of such consents and shall, as soon as practicable thereafter, conduct such reasonable investigation as he or she deems necessary or appropriate for the purpose of ascertaining the validity of such consents and all matters incident thereto, including, without limitation, whether the holders of shares having the requisite voting power to authorize or take the action specified in the consents have given consent; provided, however, that if the corporate action to which the consents relate is the removal or election of one or more members of the TGC board of directors, the Secretary of TGC shall designate an independent, qualified inspector with respect to such consents and such inspector shall discharge the functions of the Secretary of TGC under these provisions. If, after such investigation, the Secretary of TGC or the inspector, as the case may be, shall determine that any action purportedly taken by such consents has been validly taken, that fact shall be certified on the records of TGC kept for the purpose of recording the proceedings of meetings of the TGC stockholders and the consents shall be filed with such records. |
| | | | |||
Notice of Stockholder or Member Meeting | | | Pursuant to the REP LLC Agreement, all notices, elections, demands, or other communications required or permitted to be made or given pursuant to REP members shall be in writing and shall be considered as properly given or made on the date of actual delivery if given by (i) personal delivery, (ii) United States | | | Pursuant to the TGC bylaws, written notice of each meeting of TGC stockholders, stating the date, time and place, and in the case of a special meeting the object thereof, shall be mailed, postage prepaid, not less than ten (10) nor more than sixty (60) days before the meeting, to each TGC |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | mail, (iii) expedited overnight delivery service with proof of delivery, or (iv) via facsimile or electronic mail with confirmation of delivery by the receiving equipment, addressed to the respective addressee(s), and their counsel, where indicated, as set forth in the REP LLC Agreement. Any REP member may change its address by giving notice in writing to the other REP members of its new address. | | | stockholder entitled to vote thereat, at the address of the TGC stockholder which appears on the books of TGC. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the TGC stockholder at his address as it appears on the stock transfer books of TGC, with postage thereon prepaid. | |
| | | | |||
Conversion Rights and Protective Provisions | | | The REP LLC Agreement does not provide that holders of REP common units have conversion rights. The REP LLC Agreement provides that at any time prior to an initial public offering or Listing Transaction and at a holder of REP series A preferred units’ sole discretion, such holder may elect to convert such REP series A preferred units to a number of REP common units (rounded up to the nearest whole unit number) in an amount equal to the quotient of (i) the product of (A) the number of REP series A preferred units to be converted by (B) $120 plus the amount of any accrued but unpaid dividends on such REP series A preferred units as of any time of determination (the “series A preferred liquidation preference”), divided by (ii) $120 per REP series A preferred unit, as adjusted to reflect any subdivision, stock split, recapitalization, reclassification or consolidation of the REP common units following August 5, 2020; provided, however, that an automatic conversion of the REP series A preferred unit in accordance with the mechanism below shall not be subject to adjustment (the “series A conversion price”) then in effect by the delivery of written notice to REP. Immediately prior to any such conversion, all accrued or declared but unpaid dividends on the REP series A preferred units shall be paid in kind to such holder electing to convert its REP series A preferred units. The REP LLC Agreement also provides that immediately following the execution of an underwriting agreement but prior to the closing of an initial public offering, all | | | The TGC charter and TGC bylaws do not provide that holders of TGC common stock have conversion or other protective rights. The TGC charter provides that any preferred stock that may be issued by TGC may have conversion or exchange privileges into or for, at the option of the holder or TGC or upon the happening of a specified event, shares of any other class or classes or of any other series of the same or other class or classes of stock of TGC and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such event as the TGC board of directors shall determine. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | outstanding REP series A preferred units shall automatically and without further action required by any REP member or person be converted into common stock of the initial public offering issuer or surviving entity that are listed on a national security exchange at a conversion rate equal to the quotient of (i) the product of (A) the number of REP series A preferred units to be converted multiplied by (B) the series A preferred liquidation preference, divided by (ii) the lesser of (A) the series A conversion price or (B) a 20.0% discount to the price to the public in an initial public offering as listed on the cover page of the final prospectus for such initial public offering. REP shall cause the initial public offering issuer to provide for such conversion mechanism in its organizational documents. Without limiting the foregoing, at the request of any holder of REP series A preferred units, the initial public offering shall involve the merger or consolidation of any blocker corporation into REP following such initial public offering in a transaction intended to qualify as a tax-free reorganization, the utilization of such blocker corporation as REP following such initial public offering or otherwise structuring the transaction so that the blocker corporation is not subject to a level of corporate tax on the initial public offering or subsequent dividend payments or sales of shares, provided that any such request and related structuring does not unreasonably delay or otherwise materially interfere with the timely closing of such initial public offering. At or prior to the closing of a Listing Transaction and/or an internal restructuring relating thereto, all outstanding REP series A preferred units shall automatically and without further action required by any REP member or person be converted into REP common units at a conversion rate equal to the series A conversion price. REP shall cause the definitive agreements relating to a Listing Transaction and/or internal restructure to provide for such conversion mechanism (or to provide for conversion of the REP series A preferred units directly into common stock of the | | |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | initial public offering issuer or surviving entity that are listed on a national security exchange on the same basis as if the REP series A preferred units had converted into REP common units in accordance with these provisions) in the organizational documents or other definitive agreements relating thereto. The REP LLC Agreement provides that on the date that is one year following the expiration of REP’s revolving credit facility (as may be further amended, restated, supplemented, modified or replaced from time to time), REP shall be required to redeem all of the outstanding REP series A preferred units in cash in an amount equal to the series A preferred liquidation preference for such REP series A preferred units on the date of redemption. Subject to applicable law, REP shall effect any such redemption by paying cash for each REP series A preferred unit to be redeemed in an amount equal to the series A preferred liquidation preference to the holders of the REP series A preferred units to be redeemed on such date. | | | ||
| | | | |||
Preemptive Rights | | | Pursuant to the REP LLC Agreement, at any time prior to the consummation of an initial public offering or a Listing Transaction, each REP member of the then outstanding REP common units or the REP series A preferred units has the right to purchase such holder’s pro rata share (for the purposes of such determination that number of REP common units as would be issuable upon conversion of all of the outstanding REP series A preferred units on the date of such determination in accordance with “Conversion Rights and Protective Provisions”) of all or any part of any units (or other equity interests in REP) and rights, options or warrants to purchase units (or other equity interests in REP), and securities of any type whatsoever that are or may become, convertible into or exchange for units (or other equity interests in REP) (however, the following are excluded: (i) units issued simultaneously with the execution and delivery of the REP LLC Agreement, | | | The TGC charter and TGC bylaws do not provide that holders of TGC common stock have preemptive rights. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | (ii) units (or other equity interests) issued or issuable to parties providing REP with equipment leases, real property leases, loans, credit lines, guaranties of indebtedness, cash price reductions or similar financing, under arrangements approved by the REP board of managers, (iii) units (or other equity interests) issued to persons pursuant to the acquisition of another corporation or entity by REP by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which REP acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or 50% or more of the voting power of such other corporation or entity or 50% or more of the equity ownership of such other entity, (iv) securities or units granted, issued or reserved for issuance under any employee stock option plans or other employee benefit plans, or securities or units granted, issued or reserved for issuance pursuant to any employment agreement between REP and an officer of REP which was duly approved by the REP board of managers, (v) units (or other equity interests) issued in connection with any stock split or stock dividend, (vi) units (or other equity interests in REP) offered by the issuer in an initial public offering or offered by an initial public offering issuer to the public pursuant to a registration statement filed under the Securities Act, (vii) units (or other equity interests) offered or issued in connection with a conversion or internal restructure in connection with a Listing Transaction, (viii) units (or other equity interests in REP) convertible, exchangeable or exercisable for REP series A preferred units or other preferred securities (or convertible debt securities in REP) duly approved, authorized and issued by the REP board of managers, and (ix) REP common units issued pursuant to and in accordance with a contribution agreement dated March 6, 2017) that REP may from time to time issue after August 5, 2020. | | | ||
| | | | |||
Right of First Refusal | | | Under the REP LLC Agreement, REP shall have a right of first refusal (the “ROFR”) to purchase all or any portion | | | TGC does not have a right of first refusal in place. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | of the REP units proposed to be transferred, if REP gives written notice of the exercise of such right to the selling REP member within 30 days (the “ROFR period”) from the receipt of notice to REP from the selling REP member. If REP does not intend to exercise the ROFR in full or if REP is not lawfully able to repurchase all of such units, REP will send written notice thereof to the selling REP member and to each other REP member at least 10 days before the expiration of the ROFR period. The purchase price for the units proposed to be transferred to be purchased by REP upon exercise of the ROFR will be the bona fide cash price (or the fair market value of any non-cash consideration as determined in good faith by the REP board of managers) per unit for which the selling REP member proposes to transfer such units to the proposed purchaser(s) (subject to any rights REP may have under any other agreement to purchase all or some of such units at a lower price), and will be payable within 30 days after the date of REP’s notice that it does not intend to exercise the ROFR. Payment of the purchase price will be made, at the option of REP, consisting of (i) the consideration offered by the proposed purchaser, (ii) in cash (by cashier’s check), (iii) by wire transfer of immediately available funds to the selling REP member, or (iv) by any combination of the foregoing. If REP determines that it does not intend to exercise the ROFR in full, each REP member shall have the right, but not the obligation, up to such REP member’s pro rata share of REP units, to purchase such portion of the units proposed to be transferred equal to such REP member’s pro rata share of REP multiplied by the amount of units proposed to be transferred not acquired by REP as set forth in REP’s notice. For purposes of calculating the pro rata share, the selling REP member’s proposed units to be transferred will disregarded. If some but not all of the non-selling REP members desire to acquire such units proposed to be transferred, the REP members interested in acquiring such | | |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | units may each acquire their proportionate share of 100% of such available units. Such REP member shall have 15 days from receipt of REP’s notice that it does not intend to exercise the ROFR in full to provide REP and each other REP member with written notice of such REP member’s exercise of such right. The purchase price for the units to be purchased by such REP member upon exercise of such right shall be calculated as set forth in the paragraph above and will be payable within 30 days after the date of the notice from REP determining that it does not intend to exercise the ROFR in full. Payment of the purchase price will be made, at the option of such purchasing REP member, consisting of (i) the consideration offered by the proposed purchaser, (ii) in cash (by cashier’s check), (iii) by wire transfer of immediately available funds to the selling REP member, or (iv) by any combination of the foregoing. | | | ||
| | | | |||
Right of Co-Sale | | | Under the REP LLC Agreement, if REP and other REP members do not exercise their rights to acquire units proposed to be transferred in full, the selling REP Member shall offer in writing (the “participation offer”) to the other REP members designated by the REP board of managers as having rights under these provisions (each recipient is referred to as a “tag-along REP member”) to include in the proposed disposition a number of such other REP member’s units equal to the product of (a) such Member’s pro rata share of REP multiplied by (b) the amount of units proposed to be transferred not acquired by REP or acquired by other REP members. If any REP member accepts the participation offer, the selling REP member shall, to the extent necessary, reduce the units it otherwise would have included in such proposed transfer so as to permit the REP members who want to participate to include in such transfer a number of units corresponding to the amount that they are entitled to include pursuant to these provisions. Any such purchase shall be made in accordance with the following: (i) each tag-along REP member shall have no more than 20 days from the receipt of the | | | TGC does not have a right of co-sale in place. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | participation offer in which to accept such participation offer, in whole or in part and (ii) the closing of such purchase shall occur within 30 days after such acceptance or at such other time as the selling REP member, the tag-along REP members and the purchaser of such units proposed to be transferred may agree. | | | ||
| | | | |||
Forum Selection | | | The REP LLC Agreement provides that it and the rights and obligations of the parties thereunder shall be governed by and interpreted, construed and enforced in accordance with the internal laws of the State of Delaware, without regard to rules or principles of conflicts of law requiring the application of the law of another State. The REP LLC Agreement does not dictate a specific forum. | | | The TGC bylaws provide that unless TGC consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of TGC (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of TGC to TGC or TGC stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants. |
| | | | |||
Tax Status | | | REP is treated as a partnership for federal income tax purposes. | | | TGC is taxable as a corporation for federal income tax purposes. |
| | | | |||
Indemnification of Officers and Directors and Advancement of Expenses; Limitation on Personal Liability | ||||||
| | | | |||
Indemnification | | | The REP LLC Agreement provides that REP shall indemnity to the maximum extent permitted under the DLLCA and save harmless (i) the REP managers, their respective partners, members, officers, employees and agents and (ii) the REP members and their respective affiliates, partners, members, officers, employees and agents (the “REP indemnitees”) from all liabilities and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the REP indemnitees in connection with a proceeding; provided, however, that no REP indemnitee shall be indemnified by REP for any acts or omissions by such REP indemnitee that constitute fraud, gross negligence, willful misconduct or intentional violation of law. An REP indemnitee shall not be denied | | | The TGC bylaws provide that TGC shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of TGC) by reason of the fact that he is or was a director, officer, employee or agent of TGC, or is or was serving at the request of TGC as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent provided by Delaware law against expenses (including attorneys' fees, judgments, fines, Employee Retirement Income Security Act excise taxes or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by him in connection with such action, suit or proceeding if he |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | indemnification in whole or in part under these provisions because the REP indemnitee had an interest in the transaction in with respect to which the indemnification applies if the transaction was otherwise permitted and approved pursuant to the terms of the REP LLC Agreement and in the absence of any fraud on behalf of the REP indemnitee and its affiliates. The REP LLC Agreement further provides that REP, by adoption of a resolution of the REP board of managers, may indemnify and advance expenses to an officer, employee or agent of REP to the same extent and subject to the same conditions under which it may indemnify and advance expenses to an REP indemnitee as described above. The REP LLC Agreement states that to the extent required by law, any indemnification of or advance of expenses in accordance with these provisions shall be reported in writing to the REP members as soon as reasonably practicable and in any case, within the 12-month period immediately following the date of the indemnification or advance. | | | acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The TGC bylaws further provide that TGC shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of TGC) by reason of the fact that he is or was a director, officer, employee or agent of TGC, or is or was serving at the request of TGC as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent provided by Delaware law against expenses (including attorneys' fees, judgments, fines, Employee Retirement Income Security Act excise taxes or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | | | be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The TGC bylaws further provide that to the extent that a director, officer, employee or agent of TGC has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the paragraphs above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. The TGC bylaws provide that any indemnification under the paragraphs above (unless ordered by a court) shall be made by TGC only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in the paragraphs above. Such determination shall be made (i) by the TGC board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the TGC stockholders. Notwithstanding the foregoing, a director, officer, employee or agent of TGC shall be able to contest any determination that the director, officer, employee or agent has not met the applicable standard of conduct set forth in the paragraphs above by petitioning a court of appropriate jurisdiction. | ||
| | | | |||
Advancement of Expenses | | | The REP LLC Agreement provides that the right to indemnification conferred therein shall include the right to be paid or reimbursed by REP the reasonable expenses incurred by an REP indemnitee who was in or is threatened to be made a named defendant or respondent in a proceeding in advance of the final disposition of the proceeding and without | | | The TGC bylaws provide that the expenses (including attorneys' fees) incurred by a TGC officer or director in defending or settling any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by TGC in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | any determination as to the REP indemnitee’s ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such REP indemnitee in advance of the final disposition of a proceeding, shall be made only upon delivery to REP of a written affirmation by such REP indemnitee of his or her good faith belief that he has met the standard of conduct necessary for indemnification under the REP LLC Agreement and a written undertaking, by or on behalf of such REP indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such REP indemnitee is not entitled to be indemnified under the REP LLC Agreement or otherwise. | | | director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by TGC as authorized in this provision. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the TGC board of directors deems appropriate. | |
| | | | |||
Limitation on Personal Liability | | | The REP LLC Agreement states that no REP manager shall have any liability whatsoever to REP or to the REP members for loss caused by any act or by the failure to do any act if the loss suffered arises out of a good faith mistake in business judgment of the manager, or if the manager, in good faith, had determined that the action or lack of action giving rise to the loss was in the best interests of REP or if the action or lack of action giving rise to the loss was based on the written advice of legal counsel regularly employed by REP in connection with the affairs of REP; provided, however, that such exculpation from liability shall not apply to any liability for loss caused by any act or by the failure to do any act which arises out of the fraud, gross negligence, willful misconduct or intentional violation of law by any manager. The REP members and REP recognize that this limitation relieves a manager from any and all liabilities arising or to arise out of any ordinary negligence by any such manager. The REP LLC Agreement also states that the REP members shall not be liable for the debts, liabilities, contracts or other obligations of REP except (i) for any unpaid capital contributions agreed to be made by such REP member, and (ii) as otherwise provided in the DLLCA. | | | The TGC charter states that no director of TGC shall be held personally liable to TGC or the TGC stockholders for monetary damages of any kind for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to TGC or the TGC stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of TGC or the TGC stockholders law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of TGC shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended from time to time. No amendment to, or repeal of, these provisions shall adversely affect any right or protection of any director of TGC existing at the time of such amendment or repeal for or with respect to acts or omissions of such director prior to such amendment or repeal. |
| | | |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
Dividends | ||||||
| | | | |||
Dividends Declaration and Payment of Dividends | | | The REP LLC Agreement provides that for REP common units REP may distribute to the REP members funds of REP that the REP board of managers reasonably determines are not needed for the payment of existing or foreseeable REP obligations and expenditures (“Distributable Funds”). Subject to the paragraph below, these distributions may be made at such times and in such amounts as the REP board of managers, in its sole discretion, determines to be appropriate. Subject to the paragraph below, all such distributions shall be made to the REP members holding REP common units according to their respective proportion, expressed as a percentage that such REP member’s REP common units bear to the total number of REP common units outstanding as of the date of such determination. The REP LLC Agreement provides that during the period from and after the REP series A preferred unit was issued and ending on December 31, 2022 (the “dividend period”), distributions for the REP series A preferred stock at the rate per annum of 6.0% of $120, computed on the basis of a 360-day year comprised of 30-day months, shall accrue on each REP series A preferred units (the “series A preferred dividends”). Series A preferred dividends shall accrue from day to day, whether or not declared, and shall be cumulative. Series A preferred dividends shall be payable in kind by the issuance of additional REP series A preferred units and in arrears on each Series A preferred dividend payment date (the date that is 30 days after the end of each fiscal quarter of REP, unless the REP board of managers determines an earlier date) for the fiscal quarter ending immediately prior to such payment date (or with respect to the first applicable payment date, for the period commencing on the date that the REP series A preferred unit was issued and ending on the last day of the fiscal | | | The TGC charter provides that the holders of shares of TGC common stock shall be entitled to receive, when and as declared by the TGC board of directors, out of the assets of TGC legally available therefor, such dividends as may be declared from time to time by the TGC board of directors. The TGC charter further provides that the TGC board of directors may determine for any preferred stock issued whether the holders of shares of that series shall be entitled to receive dividends and, if so, the rates of such dividends, conditions under which and times such dividends may be declared or paid, any preferences of any such dividend to, and the relation to, the dividends payable on any other class or classes of stock or any other series of that same class and whether dividends shall be cumulative or noncumulative and, if cumulative, from which date or dates. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | quarter following such date); provided, however, that the REP board of managers may determine in its sole discretion to pay Series A preferred dividends in cash and shall give the holders of REP series A preferred units notice of such determination within 10 (ten) days prior to such payment date. The REP LLC Agreement further provides that if any REP series A preferred units are converted into a security in REP (or its successor or other company in a Listing Transaction) on a date during the period between the close of business on the first day of any fiscal quarter and the close of business on the corresponding REP series A preferred unit payment date for such fiscal quarter, the accrued Series A Preferred Dividends with respect to such converted REP series A preferred units shall be paid in kind on or prior to the date of such conversion. If any REP series A preferred units are redeemed by REP in accordance with the REP LLC Agreement on a date during the period between the close of business on the first day of any fiscal quarter and the close of business on the corresponding REP series A preferred unit payment date for such fiscal quarter, the accrued Series A Preferred Dividends with respect to such redeemed REP series A preferred units shall be added to the $120 for purposes of such redemption. For the avoidance of doubt, such accrued Series A preferred dividends shall include dividends accruing from, and including, the last day of the most recently preceding fiscal quarter to, but not including, the applicable redemption date. | | | ||
| | | | |||
Amendments to Certificate of Incorporation or Bylaws | ||||||
| | | | |||
General Provisions | | | The REP LLC Agreement provides that subject to the rights of the REP members, neither REP, any of its consolidated subsidiaries or any of its or their officers or agents acting on its or their behalves shall take action in connection with amending, restating or revoking the REP certificate or, except as described below, | | | The TGC charter provides that the TGC board of directors is expressly authorized to make, alter or repeal the TGC bylaws, and that TGC reserves the right to amend, alter, change or repeal any provision contained in the TGC charter, in the manner prescribed by the DGCL, and all rights conferred upon TGC stockholders |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | the REP LLC Agreement, except in connection with any initial public offering or Listing Transaction without the approval of a majority of the REP board of managers. Any provisions of the REP LLC Agreement relating to the preemptive rights may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), upon the approval of the REP board of managers and a Supermajority Interest of the REP members. In addition to the right of the Board of Managers to amend the REP LLC Agreement, any change, modification, or amendment to the REP LLC Agreement shall be effective if made by an instrument in writing that has been duly approved by the REP board of managers and a Supermajority Interest of the members. Notwithstanding, with respect to any change, modification or amendment to the REP LLC Agreement that would adversely affect any of the REP members in any disproportionate and material respect as compared to the other REP members, such change, modification or amendment shall not be binding on such REP member unless contained in a written instrument duly executed by such REP member; provided, however, any amendment which is made to facilitate an internal restructure, to facilitate a merger or consolidation of REP with any corporation, partnership or other entity, to convert REP into another entity, or to cause REP to participate in an exchange of interests or some type of business combination with any corporation, partnership or other entity, shall require the approval only of the REP board of managers if each of the material terms and provisions of such merger, consolidation, conversion, exchange, or combination provides for equal and/or proportionate treatment of each of the REP members, provided that the REP board of managers notifies the REP members of such change, modification, or amendment. With respect | | | therein are granted subject to that reservation. The TGC bylaws provide that the TGC board of directors, by affirmative vote of a majority of the total number of directors fixed pursuant to the TGC bylaws, may adopt, amend, or repeal the TGC bylaws at any meeting, subject to the provisions in the TGC charter. Subject to the provisions in the TGC charter, the TGC bylaws may also be amended or repealed, and new bylaws adopted, by the TGC stockholders; provided, however, that any amendment or repeal of provisions relating to calling of special meetings of stockholders, stockholder proposals, director vacancies or bylaw amendments may be made only by the affirmative vote of the holders of a majority of the issued and outstanding TGC common stock entitled to vote thereon at any annual meeting or special meeting of TGC stockholders, and only if notice of the proposed amendment or repeal is contained in the notice of the meeting. |
Provision | | | REP (Pre-Merger) | | | TGC (Pre-Merger) |
| | to any change, modification, or amendment to the REP LLC Agreement that would change the name of REP, reflect the issuance of new securities or admit new or substituted REP members, or any other change, modification, or amendment which does not adversely affect any of the REP members in any disproportionate and material respect as compared to the other REP members, and any change, modification, or amendment which the REP board of managers determines is necessary or advisable to ensure that REP is not and will not be treated as an association taxable as a corporation for federal income tax purposes or to conform with changes in applicable tax law (provided such changes do not have a material adverse effect on the REP members), such change, modification, or amendment may be contained in a written instrument that has been duly approved by the REP board of managers, provided that the REP board of managers notifies the REP members of such change, modification, or amendment promptly thereafter. | | |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
Authorized Equity; Name; Reverse Stock Split | ||||||
Authorized Equity | | | The TGC charter authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. As of | | | The TGC charter authorizes the issuance of up to 240,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. |
| | | | |||
Name | | | Tengasco, Inc. | | | Riley Exploration Permian, Inc. |
| | | | |||
Reverse Stock Split | | | The TGC charter states that on March 23, 2016 (the “reverse split effective time”), each share of TGC common stock, par value $.001 per share issued and outstanding immediately prior to the reverse split effective time (the “original TGC common stock”), shall be reclassified into 1/10 shares of TGC common stock, such TGC common stock to have the rights and powers set forth in the amended and restated certificate of incorporation and under the DGCL (the “reverse split”). All shares of TGC common stock issued to any holder of original TGC common stock as a result of the reverse split shall be aggregated for the purpose of determining the number of shares of TGC common stock to which such holder shall be entitled, and no fractional shares shall be issued in connection with the reclassification. At and after the reverse split effective time, outstanding certificates that prior | | | The TGC charter states that upon the effectiveness of the amended and restated certificate of incorporation of TGC (the “reverse split effective time”), each share of TGC common stock, par value $.001 per share issued and outstanding immediately prior to the reverse split effective time (the “original TGC common stock”), shall be reclassified into a range from 1/8 to 1/12 shares of TGC common stock, such TGC common stock to have the rights and powers set forth in the second amended and restated certificate of Incorporation and under the DGCL (the “reverse split”). All shares of TGC common stock issued to any holder of original TGC common stock as a result of the reverse split shall be aggregated for the purpose of determining the number of shares of TGC common stock to which such holder shall be entitled, and no fractional shares shall be issued in connection with the reverse split. At |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | |||
| | | | |||
Corporate Opportunities | | | The TGC charter do not contain any limitations on corporate opportunities. | | | The TGC charter states that Yorktown, Bluescape and Boomer own and will own substantial equity interests in other entities (existing and future) that participate in the energy industry (“portfolio companies”) and may make investments and enter into advisory service agreements and other agreements from time to time with those portfolio companies. Certain members of the TGC board of directors may also serve as employees, partners, officers or directors of members of Yorktown, Bluescape or Boomer or portfolio companies and, at any given time, Yorktown, Bluescape or Boomer or portfolio companies may be in direct or indirect competition with TGC and/or its subsidiaries. TGC waives, to the maximum extent permitted by law, the application of the doctrine of corporate |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | For purposes of this section, the following terms have the following definitions: (a) “affiliate” means, with respect to a specified person, a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, such specified person; with respect to Yorktown, Bluescape or Boomer, an “affiliate” shall include (1) any person who is the direct or indirect ultimate holder of “equity securities” (as such term is described in Rule 405 under the Securities Act of 1933, as amended) of such person, and (2) any investment fund, alternative investment vehicle, special purpose vehicle or holding company that is directly or indirectly managed, advised or controlled by Yorktown, Bluescape or Boomer, including any portfolio company, and (b) “person” means any individual, corporation, partnership, limited liability company, joint venture, firm, association, or other entity. To the fullest extent permitted by applicable law, any person purchasing or otherwise acquiring any interest in any shares of capital stock of TGC shall be deemed to have notice of, and to have consented to, the provisions of this section. This section shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of TGC under the TGC Second Amended and Restated Certificate of Incorporation, the TGC bylaws or any applicable law. | ||
| | | | |||
Number of Directors | | | The TGC charter and the TGC bylaws currently provide that the number of directors that constitute the whole TGC board of directors is fixed by, or in the manner provided in, the TGC bylaws. The | | | Pursuant to the bylaws, subject to the rights of the holders of any series of TGC preferred stock to elect directors under specified circumstances, if any, the number of directors shall be fixed from |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | |||
| | | | |||
Regular Meetings of Directors | | | The TGC bylaws provide that the TGC board of directors shall schedule regular meeting as they deem necessary by a vote of majority of the directors then serving, provided, however, the TGC board of directors shall have at least one annual regular meeting immediately after the annual meeting of TGC stockholders. Notice of regular meetings, unless waived, shall be given by mail, electronic transmission or fax transmission or in person to each director, at his or her address as the same may appear on the records of TGC, or in the absence of such address, at his or her residence or usual place of business, at least three (3) days before the day on which the meeting is to be held. | | | Pursuant to the bylaws, subject to notice of meetings, regular meetings of the TGC board of directors shall be held on such dates, and at such times and places, as are determined from time to time by resolution of the TGC board of directors. Notice of any special meeting of directors shall be given to each director at his business or residence in writing by hand delivery, first-class or overnight mail, courier service or facsimile or electronic transmission or orally by telephone. If mailed by first-class mail, such notice shall be deemed adequately delivered if deposited in the United States mails so addressed, with postage thereon prepaid, at least five days before such meeting. If by overnight mail or courier service, such notice shall be deemed adequately delivered if the notice is delivered to the overnight mail or courier service company at least 24 hours before such meeting. If by facsimile or electronic transmission, such notice shall be deemed adequately delivered if the notice is transmitted at least 24 hours before such meeting. If by telephone or by hand delivery, the notice shall be given at least 24 hours prior to the time set for the meeting and shall be confirmed by facsimile or electronic transmission that is sent promptly thereafter. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the TGC board of directors need be specified in the notice of such meeting, except for amendments to the TGC bylaws. |
| | | | |||
Special Meetings of Directors | | | The TGC bylaws provide that special meetings of the TGC board of directors may be held any time on the call of the Chief Executive Officer of TGC, the Chairman of the TGC board of directors or at the request in writing of a majority of the members of the TGC board of directors then serving. Notice of the time | | | Pursuant to the bylaws, special meetings of the TGC board of directors shall be called at the request of the Chairman of the Board, the Executive Chairman, the President and Chief Executive Officer or a majority of the TGC board of directors then in office. The person or persons authorized to call special meetings of the |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | |||
| | | | |||
Stockholder Nominations and Proposals | | | The TGC bylaws provide that nominations of any person for election to the TGC board of directors at an annual meeting or at a special meeting may be made (i) by the TGC board of directors or (ii) by any TGC stockholder who (x) timely complies with the notice procedures set forth below, (y) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting and (z) is entitled to vote at such meeting. The TGC bylaws further provide that a stockholder’s notice must be received in writing by the secretary at TGC’s principal | | | The TGC bylaws provide that at any meeting of TGC stockholders, no business shall be conducted which has not been properly brought before the meeting. To be properly brought before a meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the TGC board of directors, (ii) otherwise properly brought before the meeting by or at the direction of the TGC board of directors, or (iii) otherwise properly brought before the meeting by a stockholder. For stockholder proposals to be properly brought before a meeting by a TGC stockholder, the TGC stockholder must |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | In the case of TGC stockholder proposals, the notice shall set forth (i) a brief description of the proposal or business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name, age, business and residence address of the stockholder submitting the proposal, (iii) the principal occupation or employment of such stockholder, (iv) the number of shares of TGC which are beneficially owned by such stockholder and the date which shares were first acquired by the shareholder, and (v) any material interest of the stockholder in such proposal. The Chairman of the TGC board of directors shall, if the facts warrant, determine and declare to the meeting that a proposal was not properly brought before the meeting in accordance with the provisions of this section, and if he or she should so determine, and any proposal not properly brought before the meeting shall not be transacted. Notwithstanding anything in the TGC bylaws to the contrary, no business shall be conducted at any meeting except in accordance with these procedures. | ||
| | | |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
Director Action by Written Consent | | | The TGC bylaws provide that any action required or permitted to be taken at any meeting of the TGC board of directors or any committee thereof may be taken without a meeting, if a written consent to such action is signed by all members of the TGC board of directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the TGC board of directors or committee. | | | The TGC bylaws provide that any action required or permitted to be taken at any meeting of the TGC board of directors or of any committee thereof may be taken without a meeting if all members of the TGC board of directors or committee, as the case may be, consent thereto in writing, including by electronic transmission, and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the TGC board of directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Such consent shall have the same force and effect as a unanimous vote at a meeting, and may be stated as such in any document or instrument filed with the Secretary of State of the State of Delaware. |
| | | | |||
Removal of Directors | | | Under the TGC bylaws, any or all of the TGC directors may be removed for cause by a majority vote of the TGC stockholders present, either in person or by proxy, at a meeting called for such purpose and notice of which was provided to the stockholders in accordance with the TGC Bylaws. | | | The TGC bylaws provide that until the trigger date, subject to the rights of the holders of shares of any class or series of TGC preferred stock, if any, to elect additional directors pursuant to the TGC charter (including any certificate of designation thereunder), any director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the voting power of the outstanding shares of stock of TGC entitled to vote generally for the election of directors, voting together as a single class and acting at a meeting of the stockholders or by written consent (if permitted) in accordance with the DGCL, the TGC charter and the TGC bylaws. On and after the trigger date, subject to the rights of the holders of shares of any class or series of TGC preferred stock, if any, to elect additional directors pursuant to the TGC charter (including any certificate of designation thereunder), any director may be removed only for cause, upon the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding shares of stock of TGC |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | entitled to vote generally for the election of directors, voting together as a single class and acting at a meeting of the stockholders in accordance with the DGCL, the TGC charter and the TGC bylaws. Except as applicable law otherwise provides, cause for the removal of a director shall be deemed to exist only if the director whose removal is proposed: (1) has been convicted of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (2) has been found to have been grossly negligent in the performance of his duties to TGC in any matter of substantial importance to TGC by (a) the affirmative vote of at least 80% of the directors then in office at any meeting of the TGC board of directors called for that purpose or (b) a court of competent jurisdiction; or (3) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability to serve as a director of TGC. | ||
| | | | |||
Special Meeting of the Stockholders | | | The TGC bylaws provide that special meetings of TGC stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by a majority of the TGC board of directors then serving, the Chairman of the TGC board of directors, or the Chief Executive Officer of TGC. | | | The TGC bylaws provide that special meetings of stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by a majority of the directors then serving on the TGC board of directors, the Chairman of the Board, or the Chief Executive Officer. |
| | | | |||
Vacancies | | | The TGC bylaws provide that if the office of any director becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, creation of a new directorship, or otherwise, a majority of the remaining members of the TGC board of directors, though less than a quorum, shall choose a successor or successors, or a director to fill the newly created directorship. In no event shall the TGC stockholders have the right to fill such vacancies, unless the TGC board of directors has determined by resolution that the TGC stockholders shall fill such vacancy at a meeting of the TGC stockholders. | | | The TGC bylaws provide that if the office of any director or directors becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, creation of a new directorship, or otherwise, a majority of the remaining directors, though less than a quorum, shall choose a successor or successors, or a director to fill the newly created directorship. In no event shall the shareholders have the right to fill such vacancies, unless the TGC board of directors has determined by resolution that TGC stockholders shall fill such vacancy at a meeting of stockholders. A director elected to fill a vacancy caused by resignation, death or removal shall be |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | elected to hold office for the unexpired term of his predecessor. | ||
| | | | |||
Voting Equity | | | Under the TGC charter, subject to the rights of any other class or series of stock and the provisions of the laws of the State of Delaware governing business corporations, voting rights of TGC shall be vested in the holders of TGC common stock. Each holder of TGC common stock shall have one vote in respect of each share of such TGC common stock held. Under the TGC bylaws, when a quorum is present at any meeting of the TGC stockholders, and subject to the provisions of the DGCL, the TGC charter or the TGC bylaws in respect of the vote that shall be required for a specific action, the vote of the holders of a majority of the TGC stock having voting power, present in person or represented by proxy duly authorized by the stockholder and filed with the Secretary of TGC, shall decide any question brought before the meeting, unless the question is one upon which, by express provision of the statutes or of the TGC charter or of the TGC bylaws, a different vote is required, in which case the express provision shall govern and control the decision of such question. Each TGC stockholder shall have one (1) vote for each share of stock having voting power registered in his or her name on the books of TGC, except as otherwise provided in the TGC charter. | | | Under the TGC bylaws, except as otherwise required by applicable law or by the TGC charter, the holders of a majority of the voting power of all of the outstanding shares of stock of TGC entitled to vote at the meeting, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of a majority of the voting power of all of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. The Chairman of the meeting may adjourn or recess the meeting from time to time for any reasonable reason, whether or not there is such a quorum. The stockholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment or recess, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Any meeting of stockholders, annual or special, may adjourn or recess from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned or recessed meeting if the date, time and place thereof are announced at the meeting at which the adjournment or recess is taken; provided, however, that if the adjournment or recess is for more than 30 days, a notice of the adjourned or recessed meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned or recessed meeting, TGC may transact any business that might have been transacted at the original meeting. |
| | | | |||
Stockholder Action by Written Consent | | | Pursuant to the TGC bylaws, in the event of the delivery to TGC of a written consent or consents in accordance with Section 228 of the DGCL purporting to authorize or take corporate action and/or | | | Pursuant to the TGC bylaws, prior to the trigger date, any action required or permitted to be taken at any annual meeting or special meeting of the TGC stockholders may be taken without a |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | related revocations, the Secretary of TGC shall provide for the safekeeping of such consents and shall, as soon as practicable thereafter, conduct such reasonable investigation as he or she deems necessary or appropriate for the purpose of ascertaining the validity of such consents and all matters incident thereto, including, without limitation, whether the holders of shares having the requisite voting power to authorize or take the action specified in the consents have given consent; provided, however, that if the corporate action to which the consents relate is the removal or election of one or more members of the TGC board of directors, the Secretary of TGC shall designate an independent, qualified inspector with respect to such consents and such inspector shall discharge the functions of the Secretary of TGC under these provisions. If, after such investigation, the Secretary of TGC or the inspector, as the case may be, shall determine that any action purportedly taken by such consents has been validly taken, that fact shall be certified on the records of TGC kept for the purpose of recording the proceedings of meetings of the TGC stockholders and the consents shall be filed with such records. | | | meeting, without prior notice and without a vote of stockholders, if a consent or consents in writing, setting forth the action so taken, is or are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. On and after the trigger date, subject to the rights of holders of any class or series of any TGC preferred stock with respect to such class or series of preferred stock, any action required or permitted to be taken by the TGC stockholders must be taken at a duly held annual or special meeting of stockholders and may not be taken by any consent in writing of such stockholders. | |
| | | | |||
Notice of Stockholder Meeting | | | Pursuant to the TGC bylaws, written notice of each meeting of TGC stockholders, stating the date, time and place, and in the case of a special meeting the object thereof, shall be mailed, postage prepaid, not less than ten (10) nor more than sixty (60) days before the meeting, to each TGC stockholder entitled to vote thereat, at the address of the TGC stockholder which appears on the books of TGC. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the TGC stockholder at his address as it appears on the stock transfer books of TGC, with postage thereon prepaid. | | | Pursuant to the TGC bylaws, written notice, stating the place, if any, date and time of the meeting, shall be given, not less than ten days nor more than 60 days before the date of the meeting, to each TGC stockholder of record entitled to vote at such meeting. The notice shall specify (A) the record date for determining the TGC stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), (B) the place, if any, date and time of such meeting, (C) the means of remote communications, if any, by which TGC stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and (D) in the case of a special meeting, the purpose or purposes for |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | which such meeting is called. If the TGC stockholder list referred to in the TGC bylaws is made accessible on an electronic network, the notice of meeting must indicate how the stockholder list can be accessed. If the meeting of TGC stockholders is to be held solely by means of electronic communications, the notice of meeting must provide the information required to access such stockholder list during the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his address as it appears on the stock transfer books of TGC. TGC may provide stockholders with notice of a meeting by electronic transmission provided such stockholders have consented to receiving electronic notice in accordance with the DGCL. Such further notice shall be given as may be required by applicable law. Only such business shall be conducted at a special meeting of TGC stockholders as shall have been brought before the meeting pursuant to the notice of meeting | ||
| | | | |||
Forum Selection | | | The TGC bylaws provide that unless TGC consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of TGC (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of TGC to TGC or TGC stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants. | | | The TGC bylaws provide that unless TGC consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any TGC stockholder (including a beneficial owner) to bring (A) any derivative action or proceeding brought on behalf of TGC, (B) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of TGC to TGC or TGC’s stockholders, (C) any action asserting a claim against TGC, or any directors, officers or employees or agents of the Corporation arising pursuant to any provision of the DGCL, the TGC charter or the TGC bylaws, or (D) any action asserting a claim against TGC, its directors, officers or employees or agents governed by the internal affairs doctrine, except as to each of (A) through (D) above, for any claim as to which the |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or over which the Court of Chancery does not have subject matter jurisdiction. Unless TGC consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for any TGC stockholder (including a beneficial owner) to bring a complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of TGC shall be deemed to have notice of and consented to these provisions. | ||
| | | | |||
Dividends | | | The TGC charter provides that the holders of shares of TGC common stock shall be entitled to receive, when and as declared by the TGC board of directors, out of the assets of TGC legally available therefor, such dividends as may be declared from time to time by the TGC board of directors. The TGC charter further provides that the TGC board of directors may determine for any preferred stock issued whether the holders of shares of that series shall be entitled to receive dividends and, if so, the rates of such dividends, conditions under which and times such dividends may be declared or paid, any preferences of any such dividend to, and the relation to, the dividends payable on any other class or classes of stock or any other series of that same class and whether dividends shall be cumulative or noncumulative and, if cumulative, from which date or dates. | | | The TGC bylaws provide that except as otherwise provided by law or the TGC charter, the TGC board of directors may from time to time declare, and TGC may pay, dividends on its outstanding shares of stock, which dividends may be paid in either cash, property or shares of stock of TGC. A member of the TGC board of directors, or a member of any committee designated by the TGC board of directors, shall be fully protected in relying in good faith upon the records of TGC and upon such information, opinions, reports or statements presented to TGC by any of its officers or employees, or committees of the TGC board of directors, or by any other person as to matters the director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of TGC, as to the value and amount of the assets, liabilities or net profits of TGC, or any other facts pertinent to the existence and amount of surplus or other funds from |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | which dividends might properly be declared and paid. | ||
| | | | |||
Indemnification of Officers and Directors and Advancement of Expenses; Limitation on Personal Liability | ||||||
| | | | |||
Indemnification | | | The TGC bylaws provide that TGC shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of TGC) by reason of the fact that he is or was a director, officer, employee or agent of TGC, or is or was serving at the request of TGC as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent provided by Delaware law against expenses (including attorneys' fees, judgments, fines, Employee Retirement Income Security Act excise taxes or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The TGC bylaws further provide that TGC shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of TGC) by reason of the fact that | | | TGC shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of TGC or, while a director or officer of TGC, is or was serving at the request of TGC as a director, officer, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (a “covered person”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, trustee, employee or agent, or in any other capacity while serving as a director, officer, trustee, employee or agent, against all expenses, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by such covered person in connection with such proceeding. The rights to indemnification and advancement of expenses under the bylaws shall be contract rights and such rights shall continue as to a covered person who has ceased to be a director, officer, trustee, employee or agent and shall inure to the benefit of his heirs, executors and administrators. Notwithstanding the foregoing provisions of this section, except for proceedings to enforce rights to indemnification and advancement of expenses, TGC shall indemnify and advance expenses to a covered person in connection with a proceeding (or part thereof) initiated by such covered person only if such |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | he is or was a director, officer, employee or agent of TGC, or is or was serving at the request of TGC as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent provided by Delaware law against expenses (including attorneys' fees, judgments, fines, Employee Retirement Income Security Act excise taxes or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of TGC, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The TGC bylaws further provide that to the extent that a director, officer, employee or agent of TGC has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the paragraphs above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. The TGC bylaws provide that any indemnification under the paragraphs above (unless ordered by a court) shall be made by TGC only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in the paragraphs above. Such determination | | | proceeding (or part thereof) was authorized by the TGC board of directors. The TGC bylaws provide that if a claim for indemnification under this section (following the final disposition of such proceeding) is not paid in full within 60 days after TGC has received a claim therefor by the covered person, or if a claim for any advancement of expenses under this section is not paid in full within 30 days after TGC has received a statement or statements requesting such amounts to be advanced, the covered person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part, the covered person shall be entitled to be paid the expense of prosecuting such claim, or a claim brought by TGC to recover an advancement of expenses prior to the terms of an undertaking, to the fullest extent permitted by applicable law. In any such action, TGC shall have the burden of proving that the covered person is not entitled to the requested indemnification or advancement of expenses under applicable law. In (1) any suit brought by a covered person to enforce a right to indemnification hereunder (but not in a suit brought by a covered person to enforce a right to an advancement of expenses) it shall be a defense that, and (2) in any suit brought by TGC to recover an advancement of expenses pursuant to the terms of an undertaking, TGC shall be entitled to recover such expenses upon a final adjudication that, the covered person has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of TGC (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the covered person is proper in the circumstances because the covered person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by TGC (including its |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | shall be made (i) by the TGC board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the TGC stockholders. Notwithstanding the foregoing, a director, officer, employee or agent of TGC shall be able to contest any determination that the director, officer, employee or agent has not met the applicable standard of conduct set forth in the paragraphs above by petitioning a court of appropriate jurisdiction. | | | directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) that the covered person has not met such applicable standard of conduct, shall create a presumption that the covered person has not met the applicable standard of conduct or, in the case of such a suit brought by the covered person, be a defense to such suit. In any suit brought by the covered person to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by TGC to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the covered person is not entitled to be indemnified, or to such advancement of expenses, under this section or otherwise shall be on TGC. The rights conferred on any covered person by this section shall not be exclusive of any other rights that such covered person may have or hereafter acquire under any statute, any provision of the TGC charter, the TGC bylaws, any agreement or vote of stockholders or disinterested directors or otherwise. This section shall not limit the right of TGC, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than covered persons when and as authorized by appropriate corporate action. The TGC bylaws provide that any covered person entitled to indemnification and/or advancement of expenses, in each case pursuant to this section, may have certain rights to indemnification, advancement and/or insurance provided by one or more persons with whom or which such covered person may be associated (including, without limitation, any of the sponsors). TGC hereby acknowledges and agrees that (1) TGC shall be the indemnitor of first resort with respect to any proceeding, expense, liability or matter that is the subject of this section, (2) TGC shall be primarily liable for all such obligations and any indemnification afforded to a covered person in respect of a proceeding, expense, liability or matter |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | that is the subject of this section, whether created by law, organizational or constituent documents, contract or otherwise, (3) any obligation of any persons with whom or which a covered person may be associated (including, without limitation, any of the sponsors) to indemnify such covered person and/or advance expenses or liabilities to such covered person in respect of any proceeding shall be secondary to the obligations of TGC hereunder, (4) TGC shall be required to indemnify each Covered Person and advance expenses to each covered person hereunder to the fullest extent provided herein without regard to any rights such covered person may have against any other person with whom or which such covered person may be associated (including, without limitation, any of the sponsors) or insurer of any such person, and (5) TGC irrevocably waives, relinquishes and releases any other person with whom or which a covered person may be associated (including, without limitation, any of the sponsors) from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by TGC hereunder. TGC shall maintain insurance, at its expense, to protect itself and any person who is or was serving as a director, officer, employee or agent of TGC or is or was serving at the request of TGC as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not TGC would have the power to indemnify such person against such expense, liability or loss under the DGCL. | ||
| | | | |||
Advancement of Expenses | | | The TGC bylaws provide that the expenses (including attorneys' fees) incurred by a TGC officer or director in defending or settling any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by TGC in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is | | | The TGC bylaws provide that TGC shall, to the fullest extent not prohibited by applicable law as it presently exists or may hereafter be amended, pay the expenses (including attorneys’ fees) incurred by a covered person in defending any proceeding in advance of its final disposition; provided, however, that to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | not entitled to be indemnified by TGC as authorized in this provision. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the TGC board of directors deems appropriate. | | | made only upon receipt of an undertaking by the covered person to repay all amounts advanced if it should be ultimately determined by final judicial decision from which there is no further right to appeal (hereinafter, a “final adjudication”) that the covered person is not entitled to be indemnified under this section or otherwise. | |
| | | | |||
Amendments to Certificate of Incorporation or Bylaws | ||||||
| | | | |||
General Provisions | | | The TGC charter provides that the TGC board of directors is expressly authorized to make, alter or repeal the TGC bylaws, and that TGC reserves the right to amend, alter, change or repeal any provision contained in the TGC charter, in the manner prescribed by the DGCL, and all rights conferred upon TGC stockholders therein are granted subject to that reservation. The TGC bylaws provide that the TGC board of directors, by affirmative vote of a majority of the total number of directors fixed pursuant to the TGC bylaws, may adopt, amend, or repeal the TGC bylaws at any meeting, subject to the provisions in the TGC charter. Subject to the provisions in the TGC charter, the TGC bylaws may also be amended or repealed, and new bylaws adopted, by the TGC stockholders; provided, however, that any amendment or repeal of provisions relating to calling of special meetings of stockholders, stockholder proposals, director vacancies or bylaw amendments may be made only by the affirmative vote of the holders of a majority of the issued and outstanding TGC common stock entitled to vote thereon at any annual meeting or special meeting of TGC stockholders, and only if notice of the proposed amendment or repeal is contained in the notice of the meeting. | | | The TGC charter provides that TGC shall have the right, subject to any express provisions or restrictions contained in the TGC charter, from time to time, to amend the TGC charter or any provision hereof in any manner now or hereafter provided by applicable law, and all rights and powers of any kind conferred upon a director or stockholder of TGC by the TGC charter or any amendment hereof are subject to such right of TGC. Notwithstanding any other provision of TGC charter or the TGC bylaws (and in addition to any other vote that may be required by applicable law or the TGC charter), (A) prior to the first date on which any investment funds sponsored or managed by Yorktown, Bluescape and Boomer (collectively, the “sponsors”) and their respective affiliates no longer individually or collectively beneficially own (or otherwise have the right to vote or direct the vote of) more than 50% of the outstanding shares of TGC common stock, par value $0.001 per share (such date, the “trigger date”), the affirmative vote of the holders of a majority in voting power of the outstanding shares of stock of TGC entitled to vote thereon, voting together as a single class and acting at a meeting of the TGC stockholders or by written consent (if permitted) in accordance with the DGCL, the TGC charter and the TGC bylaws, shall be required to amend, alter or repeal any provision of the TGC charter and (B) on and after the trigger date, the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of stock of TGC entitled to vote thereon, voting together as a single class, shall be required to amend, alter or repeal any provision of the TGC charter; provided, |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | however, that the amendment, alteration or repeal of this section shall only require the affirmative vote of the holders of a majority in voting power of the outstanding shares of stock of TGC entitled to vote thereon, voting together as a single class. The TGC bylaws state that in furtherance of, and not in limitation of, the powers conferred by the laws of the state of Delaware, prior to the trigger date, the TGC board of directors is authorized to adopt, amend or repeal the TGC bylaws only with the approval of a majority of the whole TGC board of directors and the affirmative vote of holders of not less than 50% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class. On and after the trigger date, TGC board of directors shall be expressly authorized to adopt, amend or repeal by the TGC bylaws only with the approval of a majority of the whole TGC board of directors. TGC stockholders shall also have the power to adopt, amend or repeal the TGC bylaws without any requirement to obtain separate TGC board of directors approval; provided, however, that, in addition to any vote of the holders of any class or series of stock of TGC required by law or by the TGC charter, the TGC bylaws may be adopted, altered, amended or repealed by the TGC stockholders only (A) prior to the trigger date, by the affirmative vote of holders of not less than 50% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class, or (B) on and after the trigger date, by the affirmative vote of holders of not less than 66 2⁄3% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class. No TGC bylaws hereafter made or adopted, nor any repeal of or amendment thereto, shall invalidate any prior act of TGC board of directors that was valid at the time it was taken. Notwithstanding the foregoing, no amendment, alteration or repeal of the amendments section shall adversely affect any right or protection existing under the |
Provision | | | TGC (Pre-Merger) | | | TGC (Post-Merger) |
| | | | TGC bylaws immediately prior to such amendment, alteration or repeal, including any right or protection of a present or former director, officer or employee thereunder in respect of any act or omission occurring prior to the time of such amendment. |
| Name and Address | | | Title | | | Number of Shares Beneficially Owned | | | Percent of Class | |
| Dolphin Offshore Partners, L.P. c/o Dolphin Mgmt. Services, Inc. P.O. Box 16867 Fernandina Beach, FL 32035 | | | Stockholder | | | 5,288,241 | | | 49.5% | |
(1) | Unless otherwise stated, all shares of Common Stock are directly held with sole voting and dispositive power. The shares set forth in the table are as of |
| Name and Address | | | Title | | | Number of Shares Beneficially Owned(1) | | | Percent of Class(2) | | Name and Address | | | Title | | | Number of Shares Beneficially Owned(1) | | | Percent of Class(2) | |
| Matthew K. Behrent(3) | | | Director | | | 65,025 | | | Less than 1% | | Matthew K. Behrent(3) | | | Director | | | 64,400 | | | Less than 1% | |
| Michael J. Rugen(4) | | | Chief Executive Officer (interim); Chief Financial Officer | | | 81,522 | | | Less than 1% | | Michael J. Rugen(4) | | | Chief Executive Officer (interim); Chief Financial Officer | | | 81,522 | | | Less than 1% | |
| Peter E. Salas(5) | | | Director; Chairman of the Board | | | 5,298,366 | | | 49.6% | | Peter E. Salas(5) | | | Director; Chairman of the Board | | | 5,298,366 | | | 49.6% | |
| Cary V. Sorensen(6) | | | Vice President; General Counsel; Secretary | | | 23,623 | | | Less than 1% | | Cary V. Sorensen(6) | | | Vice President; General Counsel; Secretary | | | 23,623 | | | Less than 1% | |
| Richard M. Thon(7) | | | Director | | | 33,125 | | | Less than 1% | | Richard M. Thon(7) | | | Director | | | 32,500 | | | Less than 1% | |
| All Officers and Directors as a group(8) | | | | | 5,501,661 | | | 51.5% | | All Officers and Directors as a group(8) | | | | | 5,500,411 | | | 51.5% | |
(1) | Unless otherwise stated, all shares of common stock are directly held with sole voting and dispositive power. The shares set forth in the table are as of |
(2) | Calculated pursuant to Rule 13d-3(d) under the Securities Exchange Act of 1934 based upon |
(3) | Consists of 64,400 shares held |
(4) | Consists of 81,522 shares held directly. |
(5) | Consists of |
(6) | Consists of 23,623 shares held directly. |
(7) | Consists of 32,500 shares held |
(8) | Consists of |
1) | each person known to REP to beneficially own more than 5% of any class of REP’s units; |
2) | each member of REP’s board of managers; |
3) | each of REP’s named executive officers; and |
4) | all of REP’s managers and executive officers as a group. |
| Owners(1) | | | Number of Shares Beneficially Owned | | | Percent of Class | | Owners(1) | | | Number of Shares Beneficially Owned | | | Percent of Class | |
| 5% Equityholders: | | | | | | 5% Equityholders: | | | | | | ||||
| Riley Exploration Group, Inc.(2) | | | 573,408 | | | 27.6% | | Riley Exploration Group, LLC(2) | | | 573,408 | | | 27.6% | |
| Yorktown Energy Partners XI, L.P.(3) | | | 218,918 | | | 10.5% | | Yorktown Energy Partners XI, L.P.(3) | | | 218,918 | | | 10.5% | |
| Boomer Petroleum, LLC(4) | | | 433,721 | | | 20.9% | | Boomer Petroleum, LLC(4) | | | 433,721 | | | 20.9% | |
| Bluescape Riley Exploration Acquisition, LLC(5) | | | 470,092 | | | 22.6% | | Bluescape Riley Exploration Acquisition, LLC(5) | | | 470,092 | | | 22.6% | |
| Bluescape Riley Exploration Holdings LLC(5) | | | 248,056 | | | 11.9% | | Bluescape Riley Exploration Holdings LLC(5) | | | 248,056 | | | 11.9% | |
| Managers and Named Executive Officers: | | | | | | Managers and Named Executive Officers: | | | | | | ||||
| Bobby D. Riley(6) | | | 27,331.34 | | | 1.3% | | Bobby D. Riley(6) | | | 27,331.34 | | | 1.3% | |
| Kevin M. Riley(7) | | | 15,203.08 | | | * | | Kevin M. Riley(7) | | | 15,203.08 | | | * | |
| Jeffrey M. Gutman(8) | | | 4,558.69 | | | * | | Jeffrey M. Gutman(8) | | | 4,558.69 | | | * | |
| Corey Riley(9) | | | 4,389.33 | | | * | | Corey Riley(9) | | | 4,389.33 | | | * | |
| Michael Palmer(10) | | | 2,500 | | | * | | Michael Palmer(10) | | | 2,500 | | | * | |
| Bryan H. Lawrence(3) | | | — | | | — | | Bryan H. Lawrence(3) | | | — | | | — | |
| Alvin Libin(4) | | | — | | | — | | Alvin Libin(4) | | | — | | | — | |
| Philip Riley(5) | | | — | | | — | | Philip Riley(5) | | | — | | | — | |
| All Managers and Executive Officers as a group | | | 53,982.44 | | | 2.6% | | All Managers and Executive Officers as a group | | | 53,982.44 | | | 2.6% | |
* | Less than one percent |
(1) | The amounts and percentages of common units beneficially owned are reported on the bases of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as otherwise indicated in these footnotes, each of the beneficial owners has, to REP’s knowledge, sole voting and investment power with respect to the indicated number of common units, except to the extent this power may be shared with a spouse. |
(2) |
(3) | Yorktown XI Company LP is the sole general partner of Yorktown Energy Partners XI, L.P. Yorktown XI Associates LLC is the sole general partner of Yorktown XI Company LP. The managers of Yorktown XI Associates LLC, who act by majority approval, are Bryan H. Lawrence, one of REP’s managers, W. Howard Keenan, Jr., Peter A. Leidel, Tomás R. LaCosta, Robert A. Signorino, Bryan R. Lawrence and James C. Crain. As a result, Yorktown XI Associates LLC may be deemed to share the power to vote or direct the vote or to dispose or direct the disposition of the common units owned by Yorktown Energy Partners XI, L.P. Yorktown XI Company LP and Yorktown XI Associates LLC disclaim beneficial ownership of the common units held by Yorktown Energy Partners XI, L.P. in excess of their pecuniary interest therein. The managers of Yorktown XI Associates LLC disclaim beneficial ownership of the common units held by Yorktown Energy Partners XI, L.P. The address of such funds is 410 Park Avenue, 19th Floor, New York, New York 10022. |
(4) | Boomer Petroleum, LLC is a Delaware limited liability company that is owned 50% by Texel Resources Inc., a Canadian corporation, and 50% by Balmon California, Inc., a California corporation. The President of Boomer Petroleum, LLC is Alvin Libin, one of REP’s managers. The address of Boomer Petroleum, LLC is 3200 255 5th Avenue SW, Calgary, Alberta, Canada T2P 3G6. |
(5) | Bluescape Riley Exploration Acquisition LLC is a Delaware limited liability company and beneficially owns REP’s common units. Bluescape Riley Exploration Holdings LLC is a Delaware limited liability company and beneficially owns REP’s common units, and prior to the conversion of REP’s Series A Preferred Units into common units immediately prior to the merger is a beneficial owner of shares of our Series A Preferred Units in Riley Exploration—Permian, LLC. Bluescape Riley Exploration Acquisition LLC is a wholly owned subsidiary of Bluescape Riley Exploration Holdings LLC. Bluescape Energy Recapitalization and Restructuring Fund III LP has voting and dispositive power over REP units held by Bluescape Riley Exploration Acquisition LLC and Bluescape Riley Exploration Holdings LLC and therefore may also be deemed to be the beneficial owner of these units. Bluescape Energy Partners III GP LLC may be deemed to share voting and dispositive power over these units and therefore may also be deemed to be the beneficial owner of these units by virtue of Bluescape Energy Partners III GP LLC being the sole general partner of Bluescape Energy Recapitalization and Restructuring Fund III LP. Bluescape Resources GP Holdings LLC may be deemed to share voting and dispositive power over these units and therefore may also be deemed to be the beneficial owner of these units by virtue of Bluescape Resources GP Holdings LLC being the manager of Bluescape Energy Partners III GP LLC. Charles John Wilder, Jr. may be deemed to share voting and dispositive power over these units and therefore may also be deemed to be the beneficial owner of these units by virtue of Charles John Wilder, Jr. being the manager of Bluescape Resources GP Holdings LLC. Each of Bluescape Riley Exploration Acquisition LLC, Bluescape Riley Exploration Holdings LLC, Bluescape Energy Recapitalization and Restructuring Fund III LP, Bluescape Energy Partners III GP LLC, Bluescape Resources GP Holdings LLC, and Charles John Wilder, Jr. disclaims beneficial ownership of the units reported as held by Bluescape Riley Exploration Holdings LLC in excess of its respective pecuniary interest in such units. The address of Bluescape Riley Exploration Acquisition LLC and Bluescape Riley Exploration Holdings LLC and mailing address of each listed beneficial owner is 200 Crescent Court, Suite 1900, Dallas, Texas 75201. |
(6) | Includes 13,238.01 unvested restricted REP units. |
(7) | Includes 7,643.67 unvested restricted REP units. |
(8) | Includes 3,161.33 unvested restricted REP units. |
(9) | Includes 3,958.33 unvested restricted REP units. |
(10) | Includes 2,500 unvested restricted REP units. |
| Owners(1) | | | Number of Shares Beneficially Owned | | | Percent of Class | | Owners(1) | | | Number of Shares Beneficially Owned | | | Percent of Class | |
| 5% Equityholders: | | | | | | 5% Equityholders: | | | | | | ||||
| Riley Exploration Group, Inc.(2) | | | 56,077,276 | | | 26.2% | | Riley Exploration Group, LLC(2) | | | 56,077,276 | | | 26.2% | |
| Yorktown Energy Partners XI, L.P.(3) | | | 21,409,402 | | | 10.0% | | Yorktown Energy Partners XI, L.P.(3) | | | 21,409,402 | | | 10.0% | |
| Boomer Petroleum, LLC(4) | | | 42,416,372 | | | 19.9% | | Boomer Petroleum, LLC(4) | | | 42,416,372 | | | 19.9% | |
| Bluescape Riley Exploration Acquisition, LLC(5) | | | 45,973,327 | | | 21.5% | | Bluescape Riley Exploration Acquisition, LLC(5) | | | 45,973,327 | | | 21.5% | |
| Bluescape Riley Exploration Holdings LLC(5) | | | 24,258,995 | | | 11.4% | | Bluescape Riley Exploration Holdings LLC(5) | | | 24,258,995 | | | 11.4% | |
| Directors, Director Nominees and Named Executive Officers: | | | | | | Directors, Director Nominees and Named Executive Officers: | | | | | | ||||
| Bobby D. Riley | | | 2,672,972 | | | 1.3% | | Bobby D. Riley | | | 2,672,972 | | | 1.3% | |
| Kevin M. Riley | | | 1,486,807 | | | * | | Kevin M. Riley | | | 1,486,807 | | | * | |
| Corey Riley | | | 429,261 | | | * | | Corey Riley | | | 429,261 | | | * | |
| Michael Palmer | | | 244,491 | | | * | | Michael Palmer | | | 244,491 | | | * | |
| Bryan H. Lawrence(3) | | | — | | | — | | Bryan H. Lawrence(3) | | | — | | | — | |
| Michael J. Rugen | | | 81,522 | | | * | | Michael J. Rugen | | | 81,522 | | | * | |
| Philip Riley(5) | | | — | | | — | | Brent Arriaga | | | — | | | — | |
| All Directors, Director Nominees and Executive Officers as a group | | | 6,384,447 | | | 3.0% | | E. Wayne Nordberg | | | — | | | — | |
| All Directors, Director Nominees and Executive Officers as a group | | | 6,384,447 | | | 3.0% | |
* | Less than one percent |
(1) | The amounts and percentages of common units beneficially owned are reported on the bases of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under |
(2) | Certain investment funds managed by Yorktown Partners own an aggregate of approximately 94% of REG. The address of REG is 2008 North Council Avenue, Blanchard, OK 73010. |
(3) | Yorktown XI Company LP is the sole general partner of Yorktown Energy Partners XI, L.P. Yorktown XI Associates LLC is the sole general partner of Yorktown XI Company LP. The managers of Yorktown XI Associates LLC, who act by majority approval, are Bryan H. Lawrence, one of REP’s managers, W. Howard Keenan, Jr., Peter A. Leidel, Tomás R. LaCosta, Robert A. Signorino, Bryan R. Lawrence and James C. Crain. As a result, Yorktown XI Associates LLC may be deemed to share the power to vote or direct the vote or to dispose or direct the disposition of the TGC common stock to be owned by Yorktown Energy Partners XI, L.P. Yorktown XI Company LP and Yorktown XI Associates LLC disclaim beneficial ownership of the TGC common stock to be held by Yorktown Energy Partners XI, L.P. in excess of their pecuniary interest therein. The managers of Yorktown XI Associates LLC disclaim beneficial ownership of the TGC common stock to be held by Yorktown Energy Partners XI, L.P. The address of such funds is 410 Park Avenue, 19th Floor, New York, New York 10022. |
(4) | Boomer Petroleum, LLC is a Delaware limited liability company that is owned 50% by Texel Resources Inc., a Canadian corporation, and 50% by Balmon California, Inc., a California corporation. The President of Boomer Petroleum, LLC is Alvin Libin, one of REP’s managers. The address of Boomer Petroleum, LLC is 3200 255 5th Avenue SW, Calgary, Alberta, Canada T2P 3G6. |
(5) | Bluescape Riley Exploration Acquisition LLC is a Delaware limited liability company and will beneficially own TGC common stock. Bluescape Riley Exploration Holdings LLC is a Delaware limited liability company and will beneficially own TGC common stock. Bluescape Riley Exploration Acquisition LLC is a wholly owned subsidiary of Bluescape Riley Exploration Holdings LLC. Bluescape Energy Recapitalization and Restructuring Fund III LP has voting and dispositive power over TGC common stock to be held by Bluescape Riley Exploration Acquisition LLC and Bluescape Riley Exploration Holdings LLC and therefore may also be deemed to be the beneficial owner of these shares. Bluescape Energy Partners III GP LLC may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares by virtue of Bluescape Energy Partners III GP LLC being the sole general partner of Bluescape Energy Recapitalization and Restructuring Fund III LP. Bluescape Resources GP Holdings LLC may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares by virtue of Bluescape Resources GP Holdings LLC being the manager of Bluescape Energy Partners III GP LLC. Charles John Wilder, Jr. may be deemed to share voting and dispositive power over these shares and therefore may also be deemed to be the beneficial owner of these shares by virtue of Charles John Wilder, Jr. being the manager of Bluescape Resources GP Holdings LLC. Each of Bluescape Riley Exploration Acquisition LLC, Bluescape Riley Exploration Holdings LLC, Bluescape Energy Recapitalization and Restructuring Fund III LP, Bluescape Energy Partners III GP LLC, Bluescape Resources GP Holdings LLC, and Charles John Wilder, Jr. disclaims beneficial ownership of the shares reported as held by Bluescape Riley Exploration Holdings LLC in excess of its respective pecuniary interest in such shares. The address of Bluescape Riley Exploration Acquisition LLC and Bluescape Riley Exploration Holdings LLC and mailing address of each listed beneficial owner is 200 Crescent Court, Suite 1900, Dallas, Texas 75201. |
Tengasco, Inc. | | | Riley Exploration – Permian, LLC |
8000 E. Maplewood Ave., Suite 130 Greenwood Village, Colorado 80111 | | | 29 E. Reno Avenue, Suite 500 Oklahoma City, Oklahoma 73104 |
| | ||
Telephone: (720) 420-4460 | | | Telephone: (405) 415-8677 |
Attn: Investor Relations | | | Attn: Chief Financial Officer |
| | Page | |
Tengasco, Inc. | | | |
Audited Annual Financial Statements | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
Unaudited Interim Financial Statements | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
Riley Exploration – Permian, LLC | | | |
Audited Annual Financial Statements | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | December 31, | ||||
| | 2019 | | | 2018 | |
Assets | | | | | ||
Current | | | | | ||
Cash and cash equivalents | | | $3,055 | | | $3,115 |
Accounts receivable | | | 557 | | | 533 |
Inventory | | | 415 | | | 464 |
Prepaid expenses | | | 247 | | | 235 |
Other current assets | | | 4 | | | — |
Total current assets | | | 4,278 | | | 4,347 |
Loan fees, net | | | 4 | | | 9 |
Right of use asset - operating leases | | | 41 | | | — |
Oil and gas properties, net (full cost accounting method) | | | 4,385 | | | 4,804 |
Other property and equipment, net | | | 149 | | | 190 |
Accounts receivable - noncurrent | | | 65 | | | 130 |
Other noncurrent assets | | | — | | | 4 |
Total assets | | | $8,922 | | | $9,484 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities | | | | | ||
Accounts payable – trade | | | $269 | | | $132 |
Accrued liabilities | | | 164 | | | 282 |
Lease liabilities - operating leases - current | | | 41 | | | — |
Lease liabilities - finance leases - current | | | 61 | | | — |
Current maturities of long-term debt | | | — | | | 51 |
Asset retirement obligation - current | | | 75 | | | 83 |
Total current liabilities | | | 610 | | | 548 |
Lease liabilities - finance leases - noncurrent | | | 41 | | | — |
Long term debt, less current maturities | | | — | | | 73 |
Asset retirement obligation - non current | | | 1,923 | | | 2,096 |
Total liabilities | | | 2,574 | | | 2,717 |
Commitments and contingencies (Note 9) | | | | | ||
Stockholders’ equity | | | | | ||
Preferred stock, 25,000,000 shares authorized: | | | | | ||
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding | | | — | | | — |
Common stock, $.001 par value: authorized 100,000,000 Shares; 10,658,775 and 10,639,290 shares issued and outstanding | | | 11 | | | 11 |
Additional paid in capital | | | 58,293 | | | 58,276 |
Accumulated deficit | | | (51,956) | | | (51,520) |
Total stockholders’ equity | | | 6,348 | | | 6,767 |
Total liabilities and stockholders’ equity | | | $8,922 | | | $9,484 |
| | Year ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | | | ||
Oil and gas properties | | | $4,911 | | | $5,871 |
Total revenues | | | 4,911 | | | 5,871 |
Cost and expenses | | | | | ||
Production costs and taxes | | | 3,398 | | | 3,591 |
Depreciation, depletion, and amortization | | | 716 | | | 795 |
General and administrative | | | 1,302 | | | 1,245 |
Total cost and expenses | | | 5,416 | | | 5,631 |
Net income (loss) from operations | | | (505) | | | 240 |
Other income (expense) | | | | | ||
Net interest expense | | | (10) | | | (5) |
Gain on sale of assets | | | 45 | | | 33 |
Other income | | | 6 | | | 157 |
Total other income (expense) | | | 41 | | | 185 |
Income (loss) from operations before income tax | | | (464) | | | 425 |
Deferred income tax benefit | | | 28 | | | 17 |
Net income (loss) from continuing operations | | | (436) | | | 442 |
Net income from discontinued operations | | | — | | | 1,127 |
Net income (loss) | | | $(436) | | | $1,569 |
Net income (loss) per share - basic and fully diluted | | | | | ||
Continuing operations | | | $(0.04) | | | $0.04 |
Discontinued operations | | | $— | | | $0.11 |
Shares used in computing earnings per share | | | | | ||
Basic and fully diluted | | | 10,651,342 | | | 10,628,170 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2017 | | | 10,619,924 | | | $11 | | | $58,253 | | | $(53,089) | | | $5,175 |
Net income | | | — | | | — | | | — | | | 1,569 | | | 1,569 |
Compensation expense related to stock issued | | | 19,366 | | | — | | | 23 | | | — | | | 23 |
Balance, December 31, 2018 | | | 10,639,290 | | | $11 | | | $58,276 | | | $(51,520) | | | $6,767 |
Net loss | | | — | | | — | | | — | | | (436) | | | (436) |
Compensation expense related to stock issued | | | 19,485 | | | — | | | 17 | | | — | | | 17 |
Balance, December 31, 2019 | | | 10,658,775 | | | $11 | | | $58,293 | | | $(51,956) | | | $6,348 |
| | Year ended December 31, | ||||
| | 2019 | | | 2018 | |
Operating activities | | | | | ||
Net income (loss) from continuing operations | | | $(436) | | | $442 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | | | | | ||
Depreciation, depletion, and amortization | | | 716 | | | 795 |
Amortization of loan fees-interest expenses | | | 5 | | | 4 |
Accretion of discount on asset retirement obligation | | | 132 | | | 141 |
Gain on asset sales | | | (45) | | | (33) |
Compensation and services paid in stock / stock options | | | 17 | | | 23 |
Changes in assets and liabilities: | | | | | ||
Accounts receivable | | | 41 | | | 96 |
Inventory, prepaid expense, and other assets | | | (68) | | | (28) |
Accounts payable | | | 63 | | | (58) |
Accrued liabilities | | | (123) | | | (64) |
Settlement on asset retirement obligations | | | (76) | | | (25) |
Net cash provided by operating activities - continuing operations | | | 226 | | | 1,293 |
Net cash provided by operating activities - discontinued operations | | | — | | | 44 |
Net cash provided by operating activities | | | 226 | | | 1,337 |
Investing activities | | | | | ||
Additions to oil and gas properties | | | (437) | | | (1,011) |
Proceeds from sale of oil and gas properties | | | 56 | | | 7 |
Additions to other property & equipment | | | (2) | | | (27) |
Proceeds from sale of other property & equipment | | | 150 | | | 8 |
Net cash used in investing activities - continuing operations | | | (233) | | | (1,023) |
Net cash provided by investing activities - discontinued operations | | | — | | | 2,658 |
Net cash provided by (used in) investing activities | | | (233) | | | 1,635 |
Financing activities | | | | | ||
Proceeds from borrowings | | | — | | | 100 |
Repayment of borrowings | | | (53) | | | (142) |
Net cash used in financing activities - continuing operations | | | (53) | | | (42) |
Net cash used in financing activities - discontinued operations | | | — | | | — |
Net cash used in financing activities | | | (53) | | | (42) |
Net change in cash and cash equivalents | | | (60) | | | 2,930 |
Cash and cash equivalents, beginning of period | | | 3,115 | | | 185 |
Cash and cash equivalents, end of period | | | $3,055 | | | $3,115 |
Supplemental cash flow information: | | | | | ||
Cash interest payments | | | $5 | | | $— |
Supplemental non-cash investing and financing activities: | | | | | ||
Financed company vehicles | | | $57 | | | $136 |
Asset retirement obligations incurred | | | $12 | | | $7 |
Revisions to asset retirement obligations | | | $(187) | | | $(198) |
Capital expenditures included in accounts payable and accrued liabilities | | | $88 | | | $9 |
| | Year ended December 31, | ||||
| | 2019 | | | 2018 | |
Crude oil | | | $4,884 | | | 5,840 |
Saltwater disposal fees | | | 27 | | | 31 |
Total | | | $4,911 | | | $5,871 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Oil – carried at cost | | | $415 | | | $359 |
Equipment and materials – carried at market | | | — | | | 105 |
Total inventory | | | $415 | | | $464 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Revenue | | | $415 | | | $396 |
Tax | | | 65 | | | 129 |
Joint interest | | | 77 | | | 8 |
Accounts receivable - current | | | $557 | | | $533 |
| | | | |||
Tax - noncurrent | | | $65 | | | $130 |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Income (numerator): | | | | | ||
Net income (loss) from continuing operations | | | $(436) | | | $442 |
Net income from discontinued operations | | | — | | | 1,127 |
Weighted average shares (denominator): | | | | | ||
Weighted average shares - basic | | | 10,651,342 | | | 10,628,170 |
Dilution effect of share-based compensation, treasury method | | | — | | | — |
Weighted average shares - dilutive | | | 10,651,342 | | | 10,628,170 |
Income (loss) per share – Basic and Dilutive: | | | | | ||
Continuing operations | | | $(0.04) | | | $0.04 |
Discontinued operations | | | $— | | | $0.11 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Oil and gas properties | | | $6,751 | | | $6,503 |
Unevaluated properties | | | — | | | 23 |
Accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Oil and gas properties, net | | | $4,385 | | | $4,804 |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $— | | | $6 |
Production costs and taxes | | | — | | | (40) |
Depreciation, depletion, and amortization | | | — | | | (4) |
Interest income | | | — | | | — |
Gain on sale of assets | | | — | | | 1,165 |
Deferred income tax benefit | | | — | | | — |
Net income from discontinued operations | | | $— | | | $1,127 |
Type | | | Depreciable Life | | | Gross Cost | | | Accumulated Depreciation | | | Net Book Value |
Vehicles | | | 2-3 yrs | | | 295 | | | 146 | | | 149 |
Other | | | 5-7 yrs | | | 83 | | | 83 | | | — |
Total | | | | | $378 | | | $229 | | | $149 |
Type | | | Depreciable Life | | | Gross Cost | | | Accumulated Depreciation | | | Net Book Value |
Vehicles | | | 2-3 years | | | 293 | | | 103 | | | 190 |
Other | | | 5-7 years | | | 83 | | | 83 | | | — |
Total | | | | | $376 | | | $186 | | | $190 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Note payable to a bank, with interest only payment until maturity. | | | $— | | | $— |
| | | | |||
Installment notes bearing interest at the rate of 5.0% to 6.5% per annum collateralized by vehicles with monthly payments including interest, insurance and maintenance of approximately $10 | | | — | | | 124 |
Total long-term debt | | | — | | | 124 |
Less current maturities | | | — | | | (51) |
Long-term debt, less current maturities | | | $— | | | $73 |
| | 2020 | | | 2021 | | | 2022 | | | Total | |
Bank Credit Facility | | | $— | | | $— | | | $— | | | $— |
Total | | | $— | | | $— | | | $— | | | $— |
| | | | For the years ended December 31, | |||||
| | Income Statement Account | | | 2019 | | | 2018 | |
Operating lease cost: | | | | | | | |||
| | Production costs and taxes | | | $13 | | | $— | |
| | General and administrative | | | 49 | | | — | |
Total operating lease cost | | | | | $62 | | | $— | |
Finance lease cost: | | | | | | | |||
Amortization of right of use assets | | | Depreciation, depletion, and amortization | | | $79 | | | $— |
Interest on lease liabilities | | | Net interest expense | | | 5 | | | — |
Total finance lease cost | | | | | $84 | | | $— |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | | | ||
Operating cash flows from operating leases | | | $62 | | | $— |
Operating cash flows from finance leases | | | 5 | | | — |
Finance cash flows from finance leases | | | $53 | | | $— |
Right of use assets obtained in exchange for lease obligations: | | | | | ||
Operating leases | | | $98 | | | $— |
| | Balance Sheet as of December 31, | ||||
| | 2019 | | | 2018 | |
Operating Leases: | | | | | ||
Right of use asset - operating leases | | | $41 | | | $— |
Lease liabilities - current | | | $41 | | | $— |
Lease liabilities - noncurrent | | | — | | | — |
Total operating lease liabilities | | | $41 | | | $— |
Finance Leases: | | | | | ||
Other property and equipment, gross | | | $295 | | | $— |
Accumulated depreciation | | | (146) | | | — |
Other property and equipment, net | | | $149 | | | $— |
Lease liabilities - current | | | $61 | | | $— |
Lease liabilities - noncurrent | | | 41 | | | — |
Total finance lease liabilities | | | $102 | | | $— |
| | Operating Leases | | | Finance Leases | |
Weighted average remaining lease term | | | 0.7 years | | | 0.9 years |
Weighted average discount rate | | | 6.0% | | | 5.6% |
| | Operating Leases | | | Finance Leases | |
2020 | | | 42 | | | 65 |
2021 | | | — | | | 39 |
Total lease payments | | | 42 | | | 104 |
Less imputed interest | | | (1) | | | (2) |
Total | | | $41 | | | $102 |
Balance December 31, 2017 | | | $2,270 |
| | ||
Accretion expense | | | 141 |
Liabilities incurred | | | 7 |
Liabilities settled | | | (41) |
Revisions in estimated liabilities | | | (198) |
Balance December 31, 2018 | | | $2,179 |
| | ||
Accretion expense | | | 132 |
Liabilities incurred | | | 12 |
Liabilities settled | | | (83) |
Liabilities sold properties | | | (55) |
Revisions in estimated liabilities | | | (187) |
Balance December 31, 2019 | | | $1,998 |
| | 2019 | | | 2018 | |||||||
| | Shares | | | Weighted Average Exercise Price | | | Shares | | | Weighted Average Exercise Price | |
Outstanding, beginning of year | | | 16,875 | | | $3.18 | | | 30,000 | | | $3.73 |
Granted | | | — | | | $— | | | — | | | $— |
Exercised | | | — | | | $— | | | — | | | $— |
Expired/cancelled | | | (7,500) | | | $4.43 | | | (13,125) | | | $4.43 |
Outstanding, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Exercisable, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Weighted Average Exercise Price | | | Options Outstanding (shares) | | | Weighted Average Remaining Contractual Life (years) | | | Options Exercisable (shares) |
$2.50 | | | 1,875 | | | — | | | 1,875 |
$2.30 | | | 1,875 | | | 0.2 | | | 1,875 |
$2.70 | | | 1,875 | | | 0.5 | | | 1,875 |
$2.20 | | | 1,875 | | | 0.8 | | | 1,875 |
$1.20 | | | 1,875 | | | 1.0 | | | 1,875 |
| | 9,375 | | | | | 9,375 |
Year Ended December 31, 2019 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $(99) |
State income tax (benefit) expense | | | 321 |
Permanent difference | | | — |
Return to provision | | | (40) |
Stock Compensation Tax Deficit - ASU 2016-09 | | | 4 |
2019 NOL Expiration | | | 557 |
Net change in deferred tax asset valuation allowance | | | (771) |
Total income tax provision (benefit) | | | $(28) |
Year Ended December 31, 2018 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $326 |
State income tax (benefit) expense | | | 95 |
Permanent difference | | | 1 |
Return to provision | | | 152 |
Net change in deferred tax asset valuation allowance | | | (591) |
Total income tax provision (benefit) | | | $(17) |
| | Year Ended December 31, | ||||
| | 2019 | | | 2018 | |
Net deferred tax assets (liabilities): | | | | | ||
Net operating loss carryforwards | | | $9,119 | | | $9,675 |
Oil and gas properties | | | 1,054 | | | 1,327 |
Property, Plant and Equipment | | | (5) | | | (163) |
Asset retirement obligation | | | 500 | | | 592 |
Tax credits | | | 65 | | | 130 |
Miscellaneous | | | 36 | | | 45 |
Valuation allowance | | | (10,704) | | | (11,476) |
Net deferred tax asset | | | $65 | | | $130 |
Fiscal Year Ended 2019 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,171 | | | $1,390 | | | $1,215 | | | $1,135 |
Net income (loss) from continuing operations | | | (96) | | | 9 | | | (182) | | | (167) |
Income (loss) per common share from continuing operations | | | $(0.01) | | | $0.00 | | | $(0.02) | | | $(0.01) |
Fiscal Year Ended 2018 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,367 | | | $1,475 | | | $1,654 | | | $1,375 |
Net income (loss) from continuing operations | | | 133 | | | 99 | | | 298 | | | (88) |
Income (loss) per common share from continuing operations | | | $0.01 | | | $0.01 | | | $0.03 | | | $(0.01) |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Proved oil and gas properties | | | $6,751 | | | $6,503 |
Unproved properties | | | — | | | 23 |
Total proved and unproved oil and gas properties | | | $6,751 | | | $6,526 |
Less accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Net oil and gas properties | | | $4,385 | | | $4,804 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Property acquisitions proved | | | $— | | | $164 |
Property acquisitions unproved | | | 14 | | | 23 |
Exploration cost | | | 491 | | | 590 |
Development cost | | | 7 | | | 243 |
Total | | | $512 | | | $1,020 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $4,911 | | | $5,871 |
Production costs and taxes | | | (3,398) | | | (3,591) |
Depreciation, depletion and amortization | | | (637) | | | (722) |
Income from oil and gas producing activities | | | $876 | | | $1,558 |
| | Oil (MBbl) | | Gas (MMcf) | | MBOE | | | Oil (MBbl) | | Gas (MMcf) | | MBoe | |||||
Proved reserves at December 31, 2017 | | 870 | | — | | 870 | | 870 | | — | | 870 | ||||||
Revisions of previous estimates | | 223 | | — | | 223 | | 223 | | — | | 223 | ||||||
Improved recovery | | — | | — | | — | | — | | — | | — | ||||||
Purchase of reserves in place | | 13 | | — | | 13 | | 13 | | — | | 13 | ||||||
Extensions and discoveries | | 86 | | — | | 86 | | 86 | | — | | 86 | ||||||
Production | | (98) | | — | | (98) | | (98) | | — | | (98) | ||||||
Sales of reserves in place | | — | | — | | — | | — | | — | | — | ||||||
Proved reserves at December 31, 2018 | | 1,094 | | — | | 1,094 | | 1,094 | | — | | 1,094 | ||||||
Revisions of previous estimates | | (203) | | — | | (203) | | (203) | | — | | (203) | ||||||
Improved recovery | | — | | — | | — | | — | | — | | — | ||||||
Purchase of reserves in place | | — | | — | | — | | — | | — | | — | ||||||
Extensions and discoveries | | 8 | | — | | 8 | | 8 | | — | | 8 | ||||||
Production | | (94) | | — | | (94) | | (94) | | — | | (94) | ||||||
Sales of reserves in place | | (2) | | — | | (2) | | (2) | | — | | (2) | ||||||
Proved reserves at December 31, 2019 | | 803 | | — | | 803 | | 803 | | — | | 803 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBOE | |
Proved developed reserves at: | | | | | | | |||
December 31, 2017 | | | 832 | | | — | | | 832 |
December 31, 2018 | | | 976 | | | — | | | 976 |
December 31, 2019 | | | 803 | | | — | | | 803 |
Proved undeveloped reserves at: | | | | | | | |||
December 31, 2017 | | | 38 | | | — | | | 38 |
December 31, 2018 | | | 118 | | | — | | | 118 |
December 31, 2019 | | | — | | | — | | | — |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved developed reserves at: | | | | | | | |||
December 31, 2017 | | | 832 | | | — | | | 832 |
December 31, 2018 | | | 976 | | | — | | | 976 |
December 31, 2019 | | | 803 | | | — | | | 803 |
Proved undeveloped reserves at: | | | | | | | |||
December 31, 2017 | | | 38 | | | — | | | 38 |
December 31, 2018 | | | 118 | | | — | | | 118 |
December 31, 2019 | | | — | | | — | | | — |
| | Year Ended 12/31/2019 | | | Year Ended 12/31/2018 | | | Year Ended 12/31/2017 | |||||||||||||||||||
| | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | |
Total proved reserves year-end reserve report | | | $8,365 | | | — | | | $8,365 | | | $13,976 | | | — | | | $13,976 | | | $8,170 | | | — | | | $8,170 |
Proved developed producing reserves (PDP) | | | $7,592 | | | — | | | $7,592 | | | $12,534 | | | — | | | $12,534 | | | $7,065 | | | — | | | $7,065 |
% of PDP reserves to total proved reserves | | | 91% | | | — | | | 91% | | | 90% | | | — | | | 90% | | | 87% | | | — | | | 87% |
Proved developed non-producing reserves | | | $773 | | | — | | | $773 | | | $739 | | | — | | | $739 | | | $1,082 | | | — | | | $1,082 |
% of PDNP reserves to total proved reserves | | | 9% | | | — | | | 9% | | | 5% | | | — | | | 5% | | | 13% | | | — | | | 13% |
Proved undeveloped reserves (PUD) | | | $— | | | — | | | $— | | | $703 | | | — | | | $703 | | | $23 | | | — | | | $23 |
% of PUD reserves to total proved reserves | | | — | | | — | | | — | | | 5% | | | — | | | 5% | | | — | | | — | | | — |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Future cash inflows | | | $40,655 | | | $65,871 | | | $39,889 |
Future production costs and taxes | | | (24,829) | | | (35,877) | | | (23,343) |
Future development costs | | | (542) | | | (2,833) | | | (1,586) |
Future income tax expenses | | | — | | | — | | | — |
Future net cash flows | | | 15,284 | | | 27,161 | | | 14,960 |
Discount at 10% for timing of cash flows | | | (6,919) | | | (13,185) | | | (6,790) |
Standardized measure of discounted future net cash flows | | | $8,365 | | | $13,976 | | | $8,170 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Balance, beginning of year | | | $13,976 | | | $8,170 | | | $5,815 |
Sales, net of production costs and taxes | | | (1,646) | | | (2,611) | | | (1,239) |
Discoveries and extensions, net of costs | | | 154 | | | 798 | | | 123 |
Purchase of reserves in place | | | — | | | 143 | | | — |
Sale of reserves in place | | | (26) | | | — | | | — |
Net changes in prices and production costs | | | (3,348) | | | 4,304 | | | 1,780 |
Revisions of quantity estimates | | | (3,058) | | | 2,180 | | | 1,611 |
Previously estimated development cost incurred during the year | | | — | | | 210 | | | — |
Changes in future development costs | | | 1,016 | | | 78 | | | (228) |
Changes in timing and other | | | 86 | | | (4) | | | (164) |
Accretion of discount | | | 1,211 | | | 708 | | | 472 |
Net change in income taxes | | | — | | | — | | | — |
Balance, end of year | | | $8,365 | | | $13,976 | | | $8,170 |
| | June 30, 2020 | | December 31, 2019 | | | September 30, 2020 | | December 31, 2019 | |||
Assets | | | | | ||||||||
Current | | | | | ||||||||
Cash and cash equivalents | | $2,710 | | $3,055 | | $2,545 | | $3,055 | ||||
Accounts receivable | | 422 | | 557 | | 262 | | 557 | ||||
Inventory | | 293 | | 415 | | 302 | | 415 | ||||
Prepaid expenses | | 177 | | 247 | | 156 | | 247 | ||||
Other current assets | | — | | 4 | | 4 | | 4 | ||||
Total current assets | | 3,602 | | 4,278 | | 3,269 | | 4,278 | ||||
Loan fees, net | | 3 | | 4 | | 2 | | 4 | ||||
Right of use asset - operating leases | | 73 | | 41 | ||||||||
Right of use asset – operating leases | | 58 | | 41 | ||||||||
Oil and gas properties, net (full cost accounting method) | | 4,045 | | 4,385 | | 3,914 | | 4,385 | ||||
Other property and equipment, net | | 126 | | 149 | | 134 | | 149 | ||||
Accounts receivable - noncurrent | | — | | 65 | ||||||||
Other noncurrent assets | | 4 | | — | ||||||||
Accounts receivable – noncurrent | | — | | 65 | ||||||||
Total assets | | $7,853 | | $8,922 | | $7,377 | | $8,922 |
| | June 30, 2020 | | December 31, 2019 | | | September 30, 2020 | | December 31, 2019 | |||
Liabilities and Stockholders’ Equity | | | | | ||||||||
Current liabilities | | | | | ||||||||
Accounts payable – trade | | $113 | | $269 | | $304 | | $269 | ||||
Accrued liabilities | | 127 | | 164 | | 255 | | 164 | ||||
Lease liabilities - operating leases – current | | 62 | | 41 | ||||||||
Lease liabilities - finance leases – current | | 59 | | 61 | ||||||||
Lease liabilities – operating leases – current | | 58 | | 41 | ||||||||
Lease liabilities – finance leases – current | | 58 | | 61 | ||||||||
Current maturities long-term debt | | 64 | | — | | 101 | | — | ||||
Asset retirement obligation – current | | 75 | | 75 | | 75 | | 75 | ||||
Total current liabilities | | 500 | | 610 | | 851 | | 610 | ||||
Lease liabilities - finance leases - noncurrent | | 30 | | 41 | ||||||||
Lease liabilities - operating leases - noncurrent | | 11 | | — | ||||||||
Lease liabilities – finance leases – noncurrent | | 42 | | 41 | ||||||||
Long-term debt, less current maturities | | 102 | | — | | 65 | | — | ||||
Asset retirement obligation - noncurrent | | 1,936 | | 1,923 | ||||||||
Asset retirement obligation – noncurrent | | 1,954 | | 1,923 | ||||||||
Total liabilities | | 2,579 | | 2,574 | | 2,912 | | 2,574 | ||||
Commitments and contingencies (Note 10) | | | | | ||||||||
Stockholders’ equity | | | | | ||||||||
Preferred stock, 25,000,000 shares authorized: | | | | | ||||||||
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding | | — | | — | | — | | — | ||||
Common stock, $0.001 par value, authorized 100,000,000 shares, 10,673,539 and 10,658,775 shares issued and outstanding | | 11 | | 11 | ||||||||
Common stock, $0.001 par value, authorized 100,000,000 shares, 10,680,050 and 10,658,775 shares issued and outstanding | | 11 | | 11 | ||||||||
Additional paid–in capital | | 58,300 | | 58,293 | | 58,304 | | 58,293 | ||||
Accumulated deficit | | (53,037) | | (51,956) | | (53,850) | | (51,956) | ||||
Total stockholders’ equity | | 5,274 | | 6,348 | | 4,465 | | 6,348 | ||||
Total liabilities and stockholders’ equity | | $7,853 | | $8,922 | | $7,377 | | $8,922 |
| | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, | |||||||||||||||
| | 2020 | | 2019 | | 2020 | | 2019 | | | 2020 | | 2019 | | 2020 | | 2019 | |||||||
Revenues | | | | | | | | | ||||||||||||||||
Oil and gas properties | | $563 | | $1,390 | | $1,526 | | $2,562 | | $765 | | $1,215 | | $2,292 | | $3,777 | ||||||||
Total revenues | | 563 | | 1,390 | | 1,526 | | 2,562 | | 765 | | 1,215 | | 2,292 | | 3,777 | ||||||||
Cost and expenses | | | | | | | | | ||||||||||||||||
Production costs and taxes | | 689 | | 912 | | 1,652 | | 1,691 | | 746 | | 913 | | 2,399 | | 2,604 | ||||||||
Depreciation, depletion, and amortization | | 155 | | 196 | | 315 | | 380 | | 146 | | 186 | | 461 | | 566 | ||||||||
General and administrative | | 272 | | 269 | | 639 | | 616 | | 685 | | 297 | | 1,324 | | 913 | ||||||||
Total cost and expenses | | 1,116 | | 1,377 | | 2,606 | | 2,687 | | 1,577 | | 1,396 | | 4,184 | | 4,083 | ||||||||
Net income (loss) from operations | | (553) | | 13 | | (1,080) | | (125) | ||||||||||||||||
Net loss from operations | | (812) | | (181) | | (1,892) | | (306) | ||||||||||||||||
Other income (expense) | | | | | | | | | ||||||||||||||||
Interest expense | | (2) | | (3) | | (4) | | (6) | | (2) | | (2) | | (6) | | (8) | ||||||||
Gain (loss) on sale of assets | | 1 | | (1) | | 3 | | 44 | ||||||||||||||||
Gain on sale of assets | | 1 | | 1 | | 4 | | 45 | ||||||||||||||||
Total other income (expense) | | (1) | | (4) | | (1) | | 38 | | (1) | | (1) | | (2) | | 37 | ||||||||
Net loss from operations before income tax | | (554) | | 9 | | (1,081) | | (87) | | (813) | | (182) | | (1,894) | | (269) | ||||||||
Deferred income tax benefit (expense) | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||
Net income (loss) | | $(554) | | $9 | | $(1,081) | | $(87) | ||||||||||||||||
Net income (loss) per share | | | | | ||||||||||||||||||||
Net loss | | $(813) | | $(182) | | $(1,894) | | $(269) | ||||||||||||||||
Net loss per share | | | | | ||||||||||||||||||||
Basic and fully diluted | | $(0.05) | | $— | | $(0.10) | | $(0.01) | | $(0.08) | | $(0.02) | | $(0.18) | | $(0.03) | ||||||||
Shares used in computing earnings per share | | | | | | | | | ||||||||||||||||
Basic and fully diluted | | 10,673,458 | | 10,648,663 | | 10,669,794 | | 10,646,442 | | 10,680,050 | | 10,653,550 | | 10,673,238 | | 10,648,838 |
| | For the Six Months Ended June 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | 2019 | | | 2020 | | 2019 | |||
Operating activities | | | | | ||||||||
Net loss | | $(1,081) | | $(87) | | $(1,894) | | $(269) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | ||||||||
Depreciation, depletion, and amortization | | 315 | | 380 | | 461 | | 566 | ||||
Amortization of loan fees-interest expense | | 1 | | 3 | | 2 | | 4 | ||||
Accretion on asset retirement obligation | | 63 | | 67 | | 94 | | 100 | ||||
Gain on asset sales | | (3) | | (44) | | (4) | | (45) | ||||
Stock based compensation | | 7 | | 10 | | 11 | | 14 | ||||
Changes in assets and liabilities: | | | | | ||||||||
Accounts receivable | | 200 | | (26) | ||||||||
Inventory and other assets | | 192 | | 51 | ||||||||
Accounts receivable, current and noncurrent | | 360 | | 22 | ||||||||
Inventory, prepaid expenses and other assets | | 204 | | 78 | ||||||||
Accounts payable | | (73) | | 7 | | 118 | | 4 | ||||
Accrued and other current liabilities | | (32) | | (93) | | 96 | | (51) | ||||
Settlement on asset retirement obligation | | (3) | | (38) | | (13) | | (52) | ||||
Net cash provided by (used in) operating activities | | (414) | | 230 | ||||||||
Net cash (used in) provided by operating activities | | (565) | | 371 | ||||||||
Investing activities | | | | | ||||||||
Additions to oil and gas properties | | (102) | | (117) | | (103) | | (153) | ||||
Proceeds from sale of oil and gas properties | | 33 | | 41 | | 36 | | 41 | ||||
Additions to other property and equipment | | (5) | | (6) | | (10) | | (2) | ||||
Proceeds from sale of other property and equipment | | — | | — | ||||||||
Proceeds from sale of materials inventory | | — | | 150 | | — | | 150 | ||||
Net cash provided by (used in) investing activities | | (74) | | 68 | ||||||||
Net cash (used in) provided by investing activities | | (77) | | 36 | ||||||||
Financing activities | | | | | ||||||||
Repayments of borrowings | | (23) | | (31) | ||||||||
Repayments of financing leases | | (34) | | (40) | ||||||||
Proceeds from borrowings | | 166 | | — | | 166 | | — | ||||
Net cash provided by (used in) financing activities | | 143 | | (31) | | 132 | | (40) | ||||
Net change in cash and cash equivalents | | (345) | | 267 | | (510) | | 367 | ||||
Cash and cash equivalents, beginning of period | | 3,055 | | 3,115 | | 3,055 | | 3,115 | ||||
Cash and cash equivalents, end of period | | $2,710 | | $3,382 | | $2,545 | | $3,482 | ||||
Supplemental cash flow information: | | | | | ||||||||
Cash interest payments | | $3 | | $3 | | $4 | | $4 | ||||
Supplemental non-cash investing and financing activities: | | | | | ||||||||
Financed company vehicles | | $31 | | $30 | | $54 | | $30 | ||||
Capital expenditures included in accounts payable and accrued liabilities | | $— | | $13 |
| | Common Stock | | | Paid-in Capital | | Accumulated Deficit | | Total | | | Common Stock | | | Paid-in Capital | | Accumulated Deficit | | Total | |||||||||||
| | Shares | | Amount | | | | Shares | | Amount | | |||||||||||||||||||
Balance, December 31, 2019 | | 10,658,775 | | $11 | | $58,293 | | $(51,956) | | $6,348 | | 10,658,775 | | $11 | | $58,293 | | $(51,956) | | $6,348 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Net loss | | — | | — | | — | | (527) | | (527) | | — | | — | | — | | (527) | | (527) | ||||||||||
Compensation expense related to stock issued | | 7,436 | | — | | 4 | | — | | 4 | | 7,436 | | — | | 4 | | — | | 4 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Balance, March 31, 2020 | | 10,666,211 | | $11 | | $58,297 | | $(52,483) | | $5,825 | | 10,666,211 | | $11 | | $58,297 | | $(52,483) | | $5,825 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Net loss | | — | | — | | — | | (554) | | (554) | | — | | — | | — | | (554) | | (554) | ||||||||||
Compensation expense related to stock issued | | 7,328 | | — | | 3 | | — | | 3 | | 7,328 | | — | | 3 | | — | | 3 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Balance, June 30, 2020 | | 10,673,539 | | $11 | | $58,300 | | $(53,037) | | $5,274 | | 10,673,539 | | $11 | | $58,300 | | $(53,037) | | $5,274 | ||||||||||
| | | | | ||||||||||||||||||||||||||
Net loss | | — | | — | | — | | (813) | | (813) | ||||||||||||||||||||
Compensation expense related to stock issued | | 6,511 | | — | | 4 | | — | | 4 | ||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||
Balance, September 30, 2020 | | 10,680,050 | | $11 | | $58,304 | | $(53,850) | | $4,465 |
| | Common Stock | | | Paid-in Capital | | Accumulated Deficit | | Total | | | Common Stock | | | Paid-in Capital | | Accumulated Deficit | | Total | |||||||||||
| | Shares | | Amount | | | | Shares | | Amount | | |||||||||||||||||||
Balance, December 31, 2018 | | 10,639,290 | | $11 | | $58,276 | | $(51,520) | | $6,767 | | 10,639,290 | | $11 | | $58,276 | | $(51,520) | | $6,767 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Net loss | | — | | — | | — | | (96) | | (96) | | — | | — | | — | | (96) | | (96) | ||||||||||
Compensation expense related to stock issued | | 4,962 | | — | | 4 | | — | | 4 | | 4,962 | | — | | 4 | | — | | 4 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Balance, March 31, 2019 | | 10,644,252 | | $11 | | $58,280 | | $(51,616) | | $6,675 | | 10,644,252 | | $11 | | $58,280 | | $(51,616) | | $6,675 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Net income | | — | | — | | — | | 9 | | 9 | | — | | — | | — | | 9 | | 9 | ||||||||||
Compensation expense related to stock issued | | 4,411 | | — | | 6 | | — | | 6 | | 4,411 | | — | | 6 | | — | | 6 | ||||||||||
| | | | | | | | | | |||||||||||||||||||||
Balance, June 30, 2019 | | 10,648,663 | | $11 | | $58,286 | | $(51,607) | | $6,690 | | 10,648,663 | | $11 | | $58,286 | | $(51,607) | | $6,690 | ||||||||||
| | | | | ||||||||||||||||||||||||||
Net loss | | — | | — | | — | | (182) | | (182) | ||||||||||||||||||||
Compensation expense related to stock issued | | 4,887 | | — | | 4 | | — | | 4 | ||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||
Balance, September 30, 2019 | | 10,653,550 | | $11 | | $58,290 | | $(51,789) | | $6,512 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Revenue | | | $415 | | | $396 |
Tax | | | 65 | | | 129 |
Joint interest | | | 77 | | | 8 |
Accounts receivable - current | | | $557 | | | $533 |
| | | | |||
Tax - noncurrent | | | $65 | | | $130 |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Income (numerator): | | | | | ||
Net income (loss) from continuing operations | | | $(436) | | | $442 |
Net income from discontinued operations | | | — | | | 1,127 |
Weighted average shares (denominator): | | | | | ||
Weighted average shares - basic | | | 10,651,342 | | | 10,628,170 |
Dilution effect of share-based compensation, treasury method | | | — | | | — |
Weighted average shares - dilutive | | | 10,651,342 | | | 10,628,170 |
Income (loss) per share – Basic and Dilutive: | | | | | ||
Continuing operations | | | $(0.04) | | | $0.04 |
Discontinued operations | | | $— | | | $0.11 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Oil and gas properties | | | $6,751 | | | $6,503 |
Unevaluated properties | | | — | | | 23 |
Accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Oil and gas properties, net | | | $4,385 | | | $4,804 |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $— | | | $6 |
Production costs and taxes | | | — | | | (40) |
Depreciation, depletion, and amortization | | | — | | | (4) |
Interest income | | | — | | | — |
Gain on sale of assets | | | — | | | 1,165 |
Deferred income tax benefit | | | — | | | — |
Net income from discontinued operations | | | $— | | | $1,127 |
Type | | | Depreciable Life | | | Gross Cost | | | Accumulated Depreciation | | | Net Book Value |
Vehicles | | | 2-3 yrs | | | 295 | | | 146 | | | 149 |
Other | | | 5-7 yrs | | | 83 | | | 83 | | | — |
Total | | | | | $378 | | | $229 | | | $149 |
Type | | | Depreciable Life | | | Gross Cost | | | Accumulated Depreciation | | | Net Book Value |
Vehicles | | | 2-3 years | | | 293 | | | 103 | | | 190 |
Other | | | 5-7 years | | | 83 | | | 83 | | | — |
Total | | | | | $376 | | | $186 | | | $190 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Note payable to a bank, with interest only payment until maturity. | | | $— | | | $— |
| | | | |||
Installment notes bearing interest at the rate of 5.0% to 6.5% per annum collateralized by vehicles with monthly payments including interest, insurance and maintenance of approximately $10 | | | — | | | 124 |
Total long-term debt | | | — | | | 124 |
Less current maturities | | | — | | | (51) |
Long-term debt, less current maturities | | | $— | | | $73 |
| | 2020 | | | 2021 | | | 2022 | | | Total | |
Bank Credit Facility | | | $— | | | $— | | | $— | | | $— |
Total | | | $— | | | $— | | | $— | | | $— |
| | | | For the years ended December 31, | |||||
| | Income Statement Account | | | 2019 | | | 2018 | |
Operating lease cost: | | | | | | | |||
| | Production costs and taxes | | | $13 | | | $— | |
| | General and administrative | | | 49 | | | — | |
Total operating lease cost | | | | | $62 | | | $— | |
Finance lease cost: | | | | | | | |||
Amortization of right of use assets | | | Depreciation, depletion, and amortization | | | $79 | | | $— |
Interest on lease liabilities | | | Net interest expense | | | 5 | | | — |
Total finance lease cost | | | | | $84 | | | $— |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | | | ||
Operating cash flows from operating leases | | | $62 | | | $— |
Operating cash flows from finance leases | | | 5 | | | — |
Finance cash flows from finance leases | | | $53 | | | $— |
Right of use assets obtained in exchange for lease obligations: | | | | | ||
Operating leases | | | $98 | | | $— |
| | Balance Sheet as of December 31, | ||||
| | 2019 | | | 2018 | |
Operating Leases: | | | | | ||
Right of use asset - operating leases | | | $41 | | | $— |
Lease liabilities - current | | | $41 | | | $— |
Lease liabilities - noncurrent | | | — | | | — |
Total operating lease liabilities | | | $41 | | | $— |
Finance Leases: | | | | | ||
Other property and equipment, gross | | | $295 | | | $— |
Accumulated depreciation | | | (146) | | | — |
Other property and equipment, net | | | $149 | | | $— |
Lease liabilities - current | | | $61 | | | $— |
Lease liabilities - noncurrent | | | 41 | | | — |
Total finance lease liabilities | | | $102 | | | $— |
| | Operating Leases | | | Finance Leases | |
Weighted average remaining lease term | | | 0.7 years | | | 0.9 years |
Weighted average discount rate | | | 6.0% | | | 5.6% |
| | Operating Leases | | | Finance Leases | |
2020 | | | 42 | | | 65 |
2021 | | | — | | | 39 |
Total lease payments | | | 42 | | | 104 |
Less imputed interest | | | (1) | | | (2) |
Total | | | $41 | | | $102 |
Balance December 31, 2017 | | | $2,270 |
| | ||
Accretion expense | | | 141 |
Liabilities incurred | | | 7 |
Liabilities settled | | | (41) |
Revisions in estimated liabilities | | | (198) |
Balance December 31, 2018 | | | $2,179 |
| | ||
Accretion expense | | | 132 |
Liabilities incurred | | | 12 |
Liabilities settled | | | (83) |
Liabilities sold properties | | | (55) |
Revisions in estimated liabilities | | | (187) |
Balance December 31, 2019 | | | $1,998 |
| | 2019 | | | 2018 | |||||||
| | Shares | | | Weighted Average Exercise Price | | | Shares | | | Weighted Average Exercise Price | |
Outstanding, beginning of year | | | 16,875 | | | $3.18 | | | 30,000 | | | $3.73 |
Granted | | | — | | | $— | | | — | | | $— |
Exercised | | | — | | | $— | | | — | | | $— |
Expired/cancelled | | | (7,500) | | | $4.43 | | | (13,125) | | | $4.43 |
Outstanding, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Exercisable, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Weighted Average Exercise Price | | | Options Outstanding (shares) | | | Weighted Average Remaining Contractual Life (years) | | | Options Exercisable (shares) |
$2.50 | | | 1,875 | | | — | | | 1,875 |
$2.30 | | | 1,875 | | | 0.2 | | | 1,875 |
$2.70 | | | 1,875 | | | 0.5 | | | 1,875 |
$2.20 | | | 1,875 | | | 0.8 | | | 1,875 |
$1.20 | | | 1,875 | | | 1.0 | | | 1,875 |
| | 9,375 | | | | | 9,375 |
Year Ended December 31, 2019 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $(99) |
State income tax (benefit) expense | | | 321 |
Permanent difference | | | — |
Return to provision | | | (40) |
Stock Compensation Tax Deficit - ASU 2016-09 | | | 4 |
2019 NOL Expiration | | | 557 |
Net change in deferred tax asset valuation allowance | | | (771) |
Total income tax provision (benefit) | | | $(28) |
Year Ended December 31, 2018 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $326 |
State income tax (benefit) expense | | | 95 |
Permanent difference | | | 1 |
Return to provision | | | 152 |
Net change in deferred tax asset valuation allowance | | | (591) |
Total income tax provision (benefit) | | | $(17) |
| | Year Ended December 31, | ||||
| | 2019 | | | 2018 | |
Net deferred tax assets (liabilities): | | | | | ||
Net operating loss carryforwards | | | $9,119 | | | $9,675 |
Oil and gas properties | | | 1,054 | | | 1,327 |
Property, Plant and Equipment | | | (5) | | | (163) |
Asset retirement obligation | | | 500 | | | 592 |
Tax credits | | | 65 | | | 130 |
Miscellaneous | | | 36 | | | 45 |
Valuation allowance | | | (10,704) | | | (11,476) |
Net deferred tax asset | | | $65 | | | $130 |
Fiscal Year Ended 2019 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,171 | | | $1,390 | | | $1,215 | | | $1,135 |
Net income (loss) from continuing operations | | | (96) | | | 9 | | | (182) | | | (167) |
Income (loss) per common share from continuing operations | | | $(0.01) | | | $0.00 | | | $(0.02) | | | $(0.01) |
Fiscal Year Ended 2018 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,367 | | | $1,475 | | | $1,654 | | | $1,375 |
Net income (loss) from continuing operations | | | 133 | | | 99 | | | 298 | | | (88) |
Income (loss) per common share from continuing operations | | | $0.01 | | | $0.01 | | | $0.03 | | | $(0.01) |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Proved oil and gas properties | | | $6,751 | | | $6,503 |
Unproved properties | | | — | | | 23 |
Total proved and unproved oil and gas properties | | | $6,751 | | | $6,526 |
Less accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Net oil and gas properties | | | $4,385 | | | $4,804 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Property acquisitions proved | | | $— | | | $164 |
Property acquisitions unproved | | | 14 | | | 23 |
Exploration cost | | | 491 | | | 590 |
Development cost | | | 7 | | | 243 |
Total | | | $512 | | | $1,020 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $4,911 | | | $5,871 |
Production costs and taxes | | | (3,398) | | | (3,591) |
Depreciation, depletion and amortization | | | (637) | | | (722) |
Income from oil and gas producing activities | | | $876 | | | $1,558 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved reserves at December 31, 2017 | | | 870 | | | — | | | 870 |
Revisions of previous estimates | | | 223 | | | — | | | 223 |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | 13 | | | — | | | 13 |
Extensions and discoveries | | | 86 | | | — | | | 86 |
Production | | | (98) | | | — | | | (98) |
Sales of reserves in place | | | — | | | — | | | — |
Proved reserves at December 31, 2018 | | | 1,094 | | | — | | | 1,094 |
Revisions of previous estimates | | | (203) | | | — | | | (203) |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | — | | | — | | | — |
Extensions and discoveries | | | 8 | | | — | | | 8 |
Production | | | (94) | | | — | | | (94) |
Sales of reserves in place | | | (2) | | | — | | | (2) |
Proved reserves at December 31, 2019 | | | 803 | | | — | | | 803 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved developed reserves at: | | | | | | | |||
December 31, 2017 | | | 832 | | | — | | | 832 |
December 31, 2018 | | | 976 | | | — | | | 976 |
December 31, 2019 | | | 803 | | | — | | | 803 |
Proved undeveloped reserves at: | | | | | | | |||
December 31, 2017 | | | 38 | | | — | | | 38 |
December 31, 2018 | | | 118 | | | — | | | 118 |
December 31, 2019 | | | — | | | — | | | — |
| | Year Ended 12/31/2019 | | | Year Ended 12/31/2018 | | | Year Ended 12/31/2017 | |||||||||||||||||||
| | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | |
Total proved reserves year-end reserve report | | | $8,365 | | | — | | | $8,365 | | | $13,976 | | | — | | | $13,976 | | | $8,170 | | | — | | | $8,170 |
Proved developed producing reserves (PDP) | | | $7,592 | | | — | | | $7,592 | | | $12,534 | | | — | | | $12,534 | | | $7,065 | | | — | | | $7,065 |
% of PDP reserves to total proved reserves | | | 91% | | | — | | | 91% | | | 90% | | | — | | | 90% | | | 87% | | | — | | | 87% |
Proved developed non-producing reserves | | | $773 | | | — | | | $773 | | | $739 | | | — | | | $739 | | | $1,082 | | | — | | | $1,082 |
% of PDNP reserves to total proved reserves | | | 9% | | | — | | | 9% | | | 5% | | | — | | | 5% | | | 13% | | | — | | | 13% |
Proved undeveloped reserves (PUD) | | | $— | | | — | | | $— | | | $703 | | | — | | | $703 | | | $23 | | | — | | | $23 |
% of PUD reserves to total proved reserves | | | — | | | — | | | — | | | 5% | | | — | | | 5% | | | — | | | — | | | — |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Future cash inflows | | | $40,655 | | | $65,871 | | | $39,889 |
Future production costs and taxes | | | (24,829) | | | (35,877) | | | (23,343) |
Future development costs | | | (542) | | | (2,833) | | | (1,586) |
Future income tax expenses | | | — | | | — | | | — |
Future net cash flows | | | 15,284 | | | 27,161 | | | 14,960 |
Discount at 10% for timing of cash flows | | | (6,919) | | | (13,185) | | | (6,790) |
Standardized measure of discounted future net cash flows | | | $8,365 | | | $13,976 | | | $8,170 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Balance, beginning of year | | | $13,976 | | | $8,170 | | | $5,815 |
Sales, net of production costs and taxes | | | (1,646) | | | (2,611) | | | (1,239) |
Discoveries and extensions, net of costs | | | 154 | | | 798 | | | 123 |
Purchase of reserves in place | | | — | | | 143 | | | — |
Sale of reserves in place | | | (26) | | | — | | | — |
Net changes in prices and production costs | | | (3,348) | | | 4,304 | | | 1,780 |
Revisions of quantity estimates | | | (3,058) | | | 2,180 | | | 1,611 |
Previously estimated development cost incurred during the year | | | — | | | 210 | | | — |
Changes in future development costs | | | 1,016 | | | 78 | | | (228) |
Changes in timing and other | | | 86 | | | (4) | | | (164) |
Accretion of discount | | | 1,211 | | | 708 | | | 472 |
Net change in income taxes | | | — | | | — | | | — |
Balance, end of year | | | $8,365 | | | $13,976 | | | $8,170 |
| | September 30, 2020 | | | December 31, 2019 | |
Assets | | | | | ||
Current | | | | | ||
Cash and cash equivalents | | | $2,545 | | | $3,055 |
Accounts receivable | | | 262 | | | 557 |
Inventory | | | 302 | | | 415 |
Prepaid expenses | | | 156 | | | 247 |
Other current assets | | | 4 | | | 4 |
Total current assets | | | 3,269 | | | 4,278 |
Loan fees, net | | | 2 | | | 4 |
Right of use asset – operating leases | | | 58 | | | 41 |
Oil and gas properties, net (full cost accounting method) | | | 3,914 | | | 4,385 |
Other property and equipment, net | | | 134 | | | 149 |
Accounts receivable – noncurrent | | | — | | | 65 |
Total assets | | | $7,377 | | | $8,922 |
| | September 30, 2020 | | | December 31, 2019 | |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities | | | | | ||
Accounts payable – trade | | | $304 | | | $269 |
Accrued liabilities | | | 255 | | | 164 |
Lease liabilities – operating leases – current | | | 58 | | | 41 |
Lease liabilities – finance leases – current | | | 58 | | | 61 |
Current maturities long-term debt | | | 101 | | | — |
Asset retirement obligation – current | | | 75 | | | 75 |
Total current liabilities | | | 851 | | | 610 |
Lease liabilities – finance leases – noncurrent | | | 42 | | | 41 |
Long-term debt, less current maturities | | | 65 | | | — |
Asset retirement obligation – noncurrent | | | 1,954 | | | 1,923 |
Total liabilities | | | 2,912 | | | 2,574 |
Commitments and contingencies (Note 10) | | | | | ||
Stockholders’ equity | | | | | ||
Preferred stock, 25,000,000 shares authorized: | | | | | ||
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding | | | — | | | — |
Common stock, $0.001 par value, authorized 100,000,000 shares, 10,680,050 and 10,658,775 shares issued and outstanding | | | 11 | | | 11 |
Additional paid–in capital | | | 58,304 | | | 58,293 |
Accumulated deficit | | | (53,850) | | | (51,956) |
Total stockholders’ equity | | | 4,465 | | | 6,348 |
Total liabilities and stockholders’ equity | | | $7,377 | | | $8,922 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Revenues | | | | | | | | | ||||
Oil and gas properties | | | $765 | | | $1,215 | | | $2,292 | | | $3,777 |
Total revenues | | | 765 | | | 1,215 | | | 2,292 | | | 3,777 |
Cost and expenses | | | | | | | | | ||||
Production costs and taxes | | | 746 | | | 913 | | | 2,399 | | | 2,604 |
Depreciation, depletion, and amortization | | | 146 | | | 186 | | | 461 | | | 566 |
General and administrative | | | 685 | | | 297 | | | 1,324 | | | 913 |
Total cost and expenses | | | 1,577 | | | 1,396 | | | 4,184 | | | 4,083 |
Net loss from operations | | | (812) | | | (181) | | | (1,892) | | | (306) |
Other income (expense) | | | | | | | | | ||||
Interest expense | | | (2) | | | (2) | | | (6) | | | (8) |
Gain on sale of assets | | | 1 | | | 1 | | | 4 | | | 45 |
Total other income (expense) | | | (1) | | | (1) | | | (2) | | | 37 |
Net loss from operations before income tax | | | (813) | | | (182) | | | (1,894) | | | (269) |
Deferred income tax benefit (expense) | | | — | | | — | | | — | | | — |
Net loss | | | $(813) | | | $(182) | | | $(1,894) | | | $(269) |
Net loss per share | | | | | | | | | ||||
Basic and fully diluted | | | $(0.08) | | | $(0.02) | | | $(0.18) | | | $(0.03) |
Shares used in computing earnings per share | | | | | | | | | ||||
Basic and fully diluted | | | 10,680,050 | | | 10,653,550 | | | 10,673,238 | | | 10,648,838 |
| | For the Nine Months Ended September 30, | ||||
| | 2020 | | | 2019 | |
Operating activities | | | | | ||
Net loss | | | $(1,894) | | | $(269) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | ||
Depreciation, depletion, and amortization | | | 461 | | | 566 |
Amortization of loan fees-interest expense | | | 2 | | | 4 |
Accretion on asset retirement obligation | | | 94 | | | 100 |
Gain on asset sales | | | (4) | | | (45) |
Stock based compensation | | | 11 | | | 14 |
Changes in assets and liabilities: | | | | | ||
Accounts receivable, current and noncurrent | | | 360 | | | 22 |
Inventory, prepaid expenses and other assets | | | 204 | | | 78 |
Accounts payable | | | 118 | | | 4 |
Accrued and other current liabilities | | | 96 | | | (51) |
Settlement on asset retirement obligation | | | (13) | | | (52) |
Net cash (used in) provided by operating activities | | | (565) | | | 371 |
Investing activities | | | | | ||
Additions to oil and gas properties | | | (103) | | | (153) |
Proceeds from sale of oil and gas properties | | | 36 | | | 41 |
Additions to other property and equipment | | | (10) | | | (2) |
Proceeds from sale of materials inventory | | | — | | | 150 |
Net cash (used in) provided by investing activities | | | (77) | | | 36 |
Financing activities | | | | | ||
Repayments of financing leases | | | (34) | | | (40) |
Proceeds from borrowings | | | 166 | | | — |
Net cash provided by (used in) financing activities | | | 132 | | | (40) |
Net change in cash and cash equivalents | | | (510) | | | 367 |
Cash and cash equivalents, beginning of period | | | 3,055 | | | 3,115 |
Cash and cash equivalents, end of period | | | $2,545 | | | $3,482 |
Supplemental cash flow information: | | | | | ||
Cash interest payments | | | $4 | | | $4 |
Supplemental non-cash investing and financing activities: | | | | | ||
Financed company vehicles | | | $54 | | | $30 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2019 | | | 10,658,775 | | | $11 | | | $58,293 | | | $(51,956) | | | $6,348 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (527) | | | (527) |
Compensation expense related to stock issued | | | 7,436 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2020 | | | 10,666,211 | | | $11 | | | $58,297 | | | $(52,483) | | | $5,825 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (554) | | | (554) |
Compensation expense related to stock issued | | | 7,328 | | | — | | | 3 | | | — | | | 3 |
| | | | | | | | | | ||||||
Balance, June 30, 2020 | | | 10,673,539 | | | $11 | | | $58,300 | | | $(53,037) | | | $5,274 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (813) | | | (813) |
Compensation expense related to stock issued | | | 6,511 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2020 | | | 10,680,050 | | | $11 | | | $58,304 | | | $(53,850) | | | $4,465 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2018 | | | 10,639,290 | | | $11 | | | $58,276 | | | $(51,520) | | | $6,767 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (96) | | | (96) |
Compensation expense related to stock issued | | | 4,962 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2019 | | | 10,644,252 | | | $11 | | | $58,280 | | | $(51,616) | | | $6,675 |
| | | | | | | | | | ||||||
Net income | | | — | | | — | | | — | | | 9 | | | 9 |
Compensation expense related to stock issued | | | 4,411 | | | — | | | 6 | | | — | | | 6 |
| | | | | | | | | | ||||||
Balance, June 30, 2019 | | | 10,648,663 | | | $11 | | | $58,286 | | | $(51,607) | | | $6,690 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (182) | | | (182) |
Compensation expense related to stock issued | | | 4,887 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2019 | | | 10,653,550 | | | $11 | | | $58,290 | | | $(51,789) | | | $6,512 |
| | For the Three Months Ended June 30, | | | For the Six Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Crude oil | | | $558 | | | $1,384 | | | $1,517 | | | $2,549 |
Saltwater disposal fees | | | 5 | | | 6 | | | 9 | | | 13 |
Total | | | $563 | | | $1,390 | | | $1,526 | | | $2,562 |
| | June 30, 2020 | | | December 31, 2019 | |
Oil – carried at lower of cost or market | | | $293 | | | $415 |
Total inventory | | | $293 | | | $415 |
| | December 31, | ||||||||||
| | June 30, 2020 | | December 31, 2019 | | | 2019 | | 2018 | |||
Revenue | | $267 | | $415 | | $415 | | $396 | ||||
Tax | | 130 | | 65 | | 65 | | 129 | ||||
Joint interest | | 25 | | 77 | | 77 | | 8 | ||||
Accounts receivable - current | | $422 | | $557 | | $557 | | $533 | ||||
| | | | |||||||||
Tax - noncurrent | | $— | | $65 | | $65 | | $130 |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Income (numerator): | | | | | ||
Net income (loss) from continuing operations | | | $(436) | | | $442 |
Net income from discontinued operations | | | — | | | 1,127 |
Weighted average shares (denominator): | | | | | ||
Weighted average shares - basic | | | 10,651,342 | | | 10,628,170 |
Dilution effect of share-based compensation, treasury method | | | — | | | — |
Weighted average shares - dilutive | | | 10,651,342 | | | 10,628,170 |
Income (loss) per share – Basic and Dilutive: | | | | | ||
Continuing operations | | | $(0.04) | | | $0.04 |
Discontinued operations | | | $— | | | $0.11 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Oil and gas properties | | | $6,751 | | | $6,503 |
Unevaluated properties | | | — | | | 23 |
Accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Oil and gas properties, net | | | $4,385 | | | $4,804 |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $— | | | $6 |
Production costs and taxes | | | — | | | (40) |
Depreciation, depletion, and amortization | | | — | | | (4) |
Interest income | | | — | | | — |
Gain on sale of assets | | | — | | | 1,165 |
Deferred income tax benefit | | | — | | | — |
Net income from discontinued operations | | | $— | | | $1,127 |
Type | | | Depreciable Life | | | Gross Cost | | | Accumulated Depreciation | | | Net Book Value |
Vehicles | | | 2-3 yrs | | | 295 | | | 146 | | | 149 |
Other | | | 5-7 yrs | | | 83 | | | 83 | | | — |
Total | | | | | $378 | | | $229 | | | $149 |
Type | | | Depreciable Life | | | Gross Cost | | | Accumulated Depreciation | | | Net Book Value |
Vehicles | | | 2-3 years | | | 293 | | | 103 | | | 190 |
Other | | | 5-7 years | | | 83 | | | 83 | | | — |
Total | | | | | $376 | | | $186 | | | $190 |
| | December 31, | ||||
| | 2019 | | | 2018 | |
Note payable to a bank, with interest only payment until maturity. | | | $— | | | $— |
| | | | |||
Installment notes bearing interest at the rate of 5.0% to 6.5% per annum collateralized by vehicles with monthly payments including interest, insurance and maintenance of approximately $10 | | | — | | | 124 |
Total long-term debt | | | — | | | 124 |
Less current maturities | | | — | | | (51) |
Long-term debt, less current maturities | | | $— | | | $73 |
| | 2020 | | | 2021 | | | 2022 | | | Total | |
Bank Credit Facility | | | $— | | | $— | | | $— | | | $— |
Total | | | $— | | | $— | | | $— | | | $— |
| | | | For the years ended December 31, | |||||
| | Income Statement Account | | | 2019 | | | 2018 | |
Operating lease cost: | | | | | | | |||
| | Production costs and taxes | | | $13 | | | $— | |
| | General and administrative | | | 49 | | | — | |
Total operating lease cost | | | | | $62 | | | $— | |
Finance lease cost: | | | | | | | |||
Amortization of right of use assets | | | Depreciation, depletion, and amortization | | | $79 | | | $— |
Interest on lease liabilities | | | Net interest expense | | | 5 | | | — |
Total finance lease cost | | | | | $84 | | | $— |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | | | ||
Operating cash flows from operating leases | | | $62 | | | $— |
Operating cash flows from finance leases | | | 5 | | | — |
Finance cash flows from finance leases | | | $53 | | | $— |
Right of use assets obtained in exchange for lease obligations: | | | | | ||
Operating leases | | | $98 | | | $— |
| | Balance Sheet as of December 31, | ||||
| | 2019 | | | 2018 | |
Operating Leases: | | | | | ||
Right of use asset - operating leases | | | $41 | | | $— |
Lease liabilities - current | | | $41 | | | $— |
Lease liabilities - noncurrent | | | — | | | — |
Total operating lease liabilities | | | $41 | | | $— |
Finance Leases: | | | | | ||
Other property and equipment, gross | | | $295 | | | $— |
Accumulated depreciation | | | (146) | | | — |
Other property and equipment, net | | | $149 | | | $— |
Lease liabilities - current | | | $61 | | | $— |
Lease liabilities - noncurrent | | | 41 | | | — |
Total finance lease liabilities | | | $102 | | | $— |
| | Operating Leases | | | Finance Leases | |
Weighted average remaining lease term | | | 0.7 years | | | 0.9 years |
Weighted average discount rate | | | 6.0% | | | 5.6% |
| | Operating Leases | | | Finance Leases | |
2020 | | | 42 | | | 65 |
2021 | | | — | | | 39 |
Total lease payments | | | 42 | | | 104 |
Less imputed interest | | | (1) | | | (2) |
Total | | | $41 | | | $102 |
Balance December 31, 2017 | | | $2,270 |
| | ||
Accretion expense | | | 141 |
Liabilities incurred | | | 7 |
Liabilities settled | | | (41) |
Revisions in estimated liabilities | | | (198) |
Balance December 31, 2018 | | | $2,179 |
| | ||
Accretion expense | | | 132 |
Liabilities incurred | | | 12 |
Liabilities settled | | | (83) |
Liabilities sold properties | | | (55) |
Revisions in estimated liabilities | | | (187) |
Balance December 31, 2019 | | | $1,998 |
| | 2019 | | | 2018 | |||||||
| | Shares | | | Weighted Average Exercise Price | | | Shares | | | Weighted Average Exercise Price | |
Outstanding, beginning of year | | | 16,875 | | | $3.18 | | | 30,000 | | | $3.73 |
Granted | | | — | | | $— | | | — | | | $— |
Exercised | | | — | | | $— | | | — | | | $— |
Expired/cancelled | | | (7,500) | | | $4.43 | | | (13,125) | | | $4.43 |
Outstanding, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Exercisable, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Weighted Average Exercise Price | | | Options Outstanding (shares) | | | Weighted Average Remaining Contractual Life (years) | | | Options Exercisable (shares) |
$2.50 | | | 1,875 | | | — | | | 1,875 |
$2.30 | | | 1,875 | | | 0.2 | | | 1,875 |
$2.70 | | | 1,875 | | | 0.5 | | | 1,875 |
$2.20 | | | 1,875 | | | 0.8 | | | 1,875 |
$1.20 | | | 1,875 | | | 1.0 | | | 1,875 |
| | 9,375 | | | | | 9,375 |
Year Ended December 31, 2019 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $(99) |
State income tax (benefit) expense | | | 321 |
Permanent difference | | | — |
Return to provision | | | (40) |
Stock Compensation Tax Deficit - ASU 2016-09 | | | 4 |
2019 NOL Expiration | | | 557 |
Net change in deferred tax asset valuation allowance | | | (771) |
Total income tax provision (benefit) | | | $(28) |
Year Ended December 31, 2018 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $326 |
State income tax (benefit) expense | | | 95 |
Permanent difference | | | 1 |
Return to provision | | | 152 |
Net change in deferred tax asset valuation allowance | | | (591) |
Total income tax provision (benefit) | | | $(17) |
| | Year Ended December 31, | ||||
| | 2019 | | | 2018 | |
Net deferred tax assets (liabilities): | | | | | ||
Net operating loss carryforwards | | | $9,119 | | | $9,675 |
Oil and gas properties | | | 1,054 | | | 1,327 |
Property, Plant and Equipment | | | (5) | | | (163) |
Asset retirement obligation | | | 500 | | | 592 |
Tax credits | | | 65 | | | 130 |
Miscellaneous | | | 36 | | | 45 |
Valuation allowance | | | (10,704) | | | (11,476) |
Net deferred tax asset | | | $65 | | | $130 |
Fiscal Year Ended 2019 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,171 | | | $1,390 | | | $1,215 | | | $1,135 |
Net income (loss) from continuing operations | | | (96) | | | 9 | | | (182) | | | (167) |
Income (loss) per common share from continuing operations | | | $(0.01) | | | $0.00 | | | $(0.02) | | | $(0.01) |
Fiscal Year Ended 2018 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,367 | | | $1,475 | | | $1,654 | | | $1,375 |
Net income (loss) from continuing operations | | | 133 | | | 99 | | | 298 | | | (88) |
Income (loss) per common share from continuing operations | | | $0.01 | | | $0.01 | | | $0.03 | | | $(0.01) |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Proved oil and gas properties | | | $6,751 | | | $6,503 |
Unproved properties | | | — | | | 23 |
Total proved and unproved oil and gas properties | | | $6,751 | | | $6,526 |
Less accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Net oil and gas properties | | | $4,385 | | | $4,804 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Property acquisitions proved | | | $— | | | $164 |
Property acquisitions unproved | | | 14 | | | 23 |
Exploration cost | | | 491 | | | 590 |
Development cost | | | 7 | | | 243 |
Total | | | $512 | | | $1,020 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $4,911 | | | $5,871 |
Production costs and taxes | | | (3,398) | | | (3,591) |
Depreciation, depletion and amortization | | | (637) | | | (722) |
Income from oil and gas producing activities | | | $876 | | | $1,558 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved reserves at December 31, 2017 | | | 870 | | | — | | | 870 |
Revisions of previous estimates | | | 223 | | | — | | | 223 |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | 13 | | | — | | | 13 |
Extensions and discoveries | | | 86 | | | — | | | 86 |
Production | | | (98) | | | — | | | (98) |
Sales of reserves in place | | | — | | | — | | | — |
Proved reserves at December 31, 2018 | | | 1,094 | | | — | | | 1,094 |
Revisions of previous estimates | | | (203) | | | — | | | (203) |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | — | | | — | | | — |
Extensions and discoveries | | | 8 | | | — | | | 8 |
Production | | | (94) | | | — | | | (94) |
Sales of reserves in place | | | (2) | | | — | | | (2) |
Proved reserves at December 31, 2019 | | | 803 | | | — | | | 803 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved developed reserves at: | | | | | | | |||
December 31, 2017 | | | 832 | | | — | | | 832 |
December 31, 2018 | | | 976 | | | — | | | 976 |
December 31, 2019 | | | 803 | | | — | | | 803 |
Proved undeveloped reserves at: | | | | | | | |||
December 31, 2017 | | | 38 | | | — | | | 38 |
December 31, 2018 | | | 118 | | | — | | | 118 |
December 31, 2019 | | | — | | | — | | | — |
| | Year Ended 12/31/2019 | | | Year Ended 12/31/2018 | | | Year Ended 12/31/2017 | |||||||||||||||||||
| | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | |
Total proved reserves year-end reserve report | | | $8,365 | | | — | | | $8,365 | | | $13,976 | | | — | | | $13,976 | | | $8,170 | | | — | | | $8,170 |
Proved developed producing reserves (PDP) | | | $7,592 | | | — | | | $7,592 | | | $12,534 | | | — | | | $12,534 | | | $7,065 | | | — | | | $7,065 |
% of PDP reserves to total proved reserves | | | 91% | | | — | | | 91% | | | 90% | | | — | | | 90% | | | 87% | | | — | | | 87% |
Proved developed non-producing reserves | | | $773 | | | — | | | $773 | | | $739 | | | — | | | $739 | | | $1,082 | | | — | | | $1,082 |
% of PDNP reserves to total proved reserves | | | 9% | | | — | | | 9% | | | 5% | | | — | | | 5% | | | 13% | | | — | | | 13% |
Proved undeveloped reserves (PUD) | | | $— | | | — | | | $— | | | $703 | | | — | | | $703 | | | $23 | | | — | | | $23 |
% of PUD reserves to total proved reserves | | | — | | | — | | | — | | | 5% | | | — | | | 5% | | | — | | | — | | | — |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Future cash inflows | | | $40,655 | | | $65,871 | | | $39,889 |
Future production costs and taxes | | | (24,829) | | | (35,877) | | | (23,343) |
Future development costs | | | (542) | | | (2,833) | | | (1,586) |
Future income tax expenses | | | — | | | — | | | — |
Future net cash flows | | | 15,284 | | | 27,161 | | | 14,960 |
Discount at 10% for timing of cash flows | | | (6,919) | | | (13,185) | | | (6,790) |
Standardized measure of discounted future net cash flows | | | $8,365 | | | $13,976 | | | $8,170 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Balance, beginning of year | | | $13,976 | | | $8,170 | | | $5,815 |
Sales, net of production costs and taxes | | | (1,646) | | | (2,611) | | | (1,239) |
Discoveries and extensions, net of costs | | | 154 | | | 798 | | | 123 |
Purchase of reserves in place | | | — | | | 143 | | | — |
Sale of reserves in place | | | (26) | | | — | | | — |
Net changes in prices and production costs | | | (3,348) | | | 4,304 | | | 1,780 |
Revisions of quantity estimates | | | (3,058) | | | 2,180 | | | 1,611 |
Previously estimated development cost incurred during the year | | | — | | | 210 | | | — |
Changes in future development costs | | | 1,016 | | | 78 | | | (228) |
Changes in timing and other | | | 86 | | | (4) | | | (164) |
Accretion of discount | | | 1,211 | | | 708 | | | 472 |
Net change in income taxes | | | — | | | — | | | — |
Balance, end of year | | | $8,365 | | | $13,976 | | | $8,170 |
| | September 30, 2020 | | | December 31, 2019 | |
Assets | | | | | ||
Current | | | | | ||
Cash and cash equivalents | | | $2,545 | | | $3,055 |
Accounts receivable | | | 262 | | | 557 |
Inventory | | | 302 | | | 415 |
Prepaid expenses | | | 156 | | | 247 |
Other current assets | | | 4 | | | 4 |
Total current assets | | | 3,269 | | | 4,278 |
Loan fees, net | | | 2 | | | 4 |
Right of use asset – operating leases | | | 58 | | | 41 |
Oil and gas properties, net (full cost accounting method) | | | 3,914 | | | 4,385 |
Other property and equipment, net | | | 134 | | | 149 |
Accounts receivable – noncurrent | | | — | | | 65 |
Total assets | | | $7,377 | | | $8,922 |
| | September 30, 2020 | | | December 31, 2019 | |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities | | | | | ||
Accounts payable – trade | | | $304 | | | $269 |
Accrued liabilities | | | 255 | | | 164 |
Lease liabilities – operating leases – current | | | 58 | | | 41 |
Lease liabilities – finance leases – current | | | 58 | | | 61 |
Current maturities long-term debt | | | 101 | | | — |
Asset retirement obligation – current | | | 75 | | | 75 |
Total current liabilities | | | 851 | | | 610 |
Lease liabilities – finance leases – noncurrent | | | 42 | | | 41 |
Long-term debt, less current maturities | | | 65 | | | — |
Asset retirement obligation – noncurrent | | | 1,954 | | | 1,923 |
Total liabilities | | | 2,912 | | | 2,574 |
Commitments and contingencies (Note 10) | | | | | ||
Stockholders’ equity | | | | | ||
Preferred stock, 25,000,000 shares authorized: | | | | | ||
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding | | | — | | | — |
Common stock, $0.001 par value, authorized 100,000,000 shares, 10,680,050 and 10,658,775 shares issued and outstanding | | | 11 | | | 11 |
Additional paid–in capital | | | 58,304 | | | 58,293 |
Accumulated deficit | | | (53,850) | | | (51,956) |
Total stockholders’ equity | | | 4,465 | | | 6,348 |
Total liabilities and stockholders’ equity | | | $7,377 | | | $8,922 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Revenues | | | | | | | | | ||||
Oil and gas properties | | | $765 | | | $1,215 | | | $2,292 | | | $3,777 |
Total revenues | | | 765 | | | 1,215 | | | 2,292 | | | 3,777 |
Cost and expenses | | | | | | | | | ||||
Production costs and taxes | | | 746 | | | 913 | | | 2,399 | | | 2,604 |
Depreciation, depletion, and amortization | | | 146 | | | 186 | | | 461 | | | 566 |
General and administrative | | | 685 | | | 297 | | | 1,324 | | | 913 |
Total cost and expenses | | | 1,577 | | | 1,396 | | | 4,184 | | | 4,083 |
Net loss from operations | | | (812) | | | (181) | | | (1,892) | | | (306) |
Other income (expense) | | | | | | | | | ||||
Interest expense | | | (2) | | | (2) | | | (6) | | | (8) |
Gain on sale of assets | | | 1 | | | 1 | | | 4 | | | 45 |
Total other income (expense) | | | (1) | | | (1) | | | (2) | | | 37 |
Net loss from operations before income tax | | | (813) | | | (182) | | | (1,894) | | | (269) |
Deferred income tax benefit (expense) | | | — | | | — | | | — | | | — |
Net loss | | | $(813) | | | $(182) | | | $(1,894) | | | $(269) |
Net loss per share | | | | | | | | | ||||
Basic and fully diluted | | | $(0.08) | | | $(0.02) | | | $(0.18) | | | $(0.03) |
Shares used in computing earnings per share | | | | | | | | | ||||
Basic and fully diluted | | | 10,680,050 | | | 10,653,550 | | | 10,673,238 | | | 10,648,838 |
| | For the Nine Months Ended September 30, | ||||
| | 2020 | | | 2019 | |
Operating activities | | | | | ||
Net loss | | | $(1,894) | | | $(269) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | ||
Depreciation, depletion, and amortization | | | 461 | | | 566 |
Amortization of loan fees-interest expense | | | 2 | | | 4 |
Accretion on asset retirement obligation | | | 94 | | | 100 |
Gain on asset sales | | | (4) | | | (45) |
Stock based compensation | | | 11 | | | 14 |
Changes in assets and liabilities: | | | | | ||
Accounts receivable, current and noncurrent | | | 360 | | | 22 |
Inventory, prepaid expenses and other assets | | | 204 | | | 78 |
Accounts payable | | | 118 | | | 4 |
Accrued and other current liabilities | | | 96 | | | (51) |
Settlement on asset retirement obligation | | | (13) | | | (52) |
Net cash (used in) provided by operating activities | | | (565) | | | 371 |
Investing activities | | | | | ||
Additions to oil and gas properties | | | (103) | | | (153) |
Proceeds from sale of oil and gas properties | | | 36 | | | 41 |
Additions to other property and equipment | | | (10) | | | (2) |
Proceeds from sale of materials inventory | | | — | | | 150 |
Net cash (used in) provided by investing activities | | | (77) | | | 36 |
Financing activities | | | | | ||
Repayments of financing leases | | | (34) | | | (40) |
Proceeds from borrowings | | | 166 | | | — |
Net cash provided by (used in) financing activities | | | 132 | | | (40) |
Net change in cash and cash equivalents | | | (510) | | | 367 |
Cash and cash equivalents, beginning of period | | | 3,055 | | | 3,115 |
Cash and cash equivalents, end of period | | | $2,545 | | | $3,482 |
Supplemental cash flow information: | | | | | ||
Cash interest payments | | | $4 | | | $4 |
Supplemental non-cash investing and financing activities: | | | | | ||
Financed company vehicles | | | $54 | | | $30 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2019 | | | 10,658,775 | | | $11 | | | $58,293 | | | $(51,956) | | | $6,348 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (527) | | | (527) |
Compensation expense related to stock issued | | | 7,436 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2020 | | | 10,666,211 | | | $11 | | | $58,297 | | | $(52,483) | | | $5,825 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (554) | | | (554) |
Compensation expense related to stock issued | | | 7,328 | | | — | | | 3 | | | — | | | 3 |
| | | | | | | | | | ||||||
Balance, June 30, 2020 | | | 10,673,539 | | | $11 | | | $58,300 | | | $(53,037) | | | $5,274 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (813) | | | (813) |
Compensation expense related to stock issued | | | 6,511 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2020 | | | 10,680,050 | | | $11 | | | $58,304 | | | $(53,850) | | | $4,465 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2018 | | | 10,639,290 | | | $11 | | | $58,276 | | | $(51,520) | | | $6,767 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (96) | | | (96) |
Compensation expense related to stock issued | | | 4,962 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2019 | | | 10,644,252 | | | $11 | | | $58,280 | | | $(51,616) | | | $6,675 |
| | | | | | | | | | ||||||
Net income | | | — | | | — | | | — | | | 9 | | | 9 |
Compensation expense related to stock issued | | | 4,411 | | | — | | | 6 | | | — | | | 6 |
| | | | | | | | | | ||||||
Balance, June 30, 2019 | | | 10,648,663 | | | $11 | | | $58,286 | | | $(51,607) | | | $6,690 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (182) | | | (182) |
Compensation expense related to stock issued | | | 4,887 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2019 | | | 10,653,550 | | | $11 | | | $58,290 | | | $(51,789) | | | $6,512 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Crude oil | | | $757 | | | $1,208 | | | $2,275 | | | $3,757 |
Saltwater disposal fees | | | 8 | | | 7 | | | 17 | | | 20 |
Total | | | $765 | | | $1,215 | | | $2,292 | | | $3,777 |
| | September 30, 2020 | | | December 31, 2019 | |
Oil – carried at lower of cost or market | | | $302 | | | $415 |
Total inventory | | | $302 | | | $415 |
| | September 30, 2020 | | | December 31, 2019 | |
Revenue | | | $259 | | | $415 |
Tax | | | — | | | 65 |
Joint interest | | | 3 | | | 77 |
Accounts receivable – current | | | $262 | | | $557 |
Tax – noncurrent | | | $— | | | $65 |
| | | | For the years ended December 31, | |||||
| | Income Statement Account | | | 2019 | | | 2018 | |
Operating lease cost: | | | | | | | |||
| | Production costs and taxes | | | $13 | | | $— | |
| | General and administrative | | | 49 | | | — | |
Total operating lease cost | | | | | $62 | | | $— | |
Finance lease cost: | | | | | | | |||
Amortization of right of use assets | | | Depreciation, depletion, and amortization | | | $79 | | | $— |
Interest on lease liabilities | | | Net interest expense | | | 5 | | | — |
Total finance lease cost | | | | | $84 | | | $— |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | | | ||
Operating cash flows from operating leases | | | $62 | | | $— |
Operating cash flows from finance leases | | | 5 | | | — |
Finance cash flows from finance leases | | | $53 | | | $— |
Right of use assets obtained in exchange for lease obligations: | | | | | ||
Operating leases | | | $98 | | | $— |
| | Balance Sheet as of December 31, | ||||
| | 2019 | | | 2018 | |
Operating Leases: | | | | | ||
Right of use asset - operating leases | | | $41 | | | $— |
Lease liabilities - current | | | $41 | | | $— |
Lease liabilities - noncurrent | | | — | | | — |
Total operating lease liabilities | | | $41 | | | $— |
Finance Leases: | | | | | ||
Other property and equipment, gross | | | $295 | | | $— |
Accumulated depreciation | | | (146) | | | — |
Other property and equipment, net | | | $149 | | | $— |
Lease liabilities - current | | | $61 | | | $— |
Lease liabilities - noncurrent | | | 41 | | | — |
Total finance lease liabilities | | | $102 | | | $— |
| | Operating Leases | | | Finance Leases | |
Weighted average remaining lease term | | | 0.7 years | | | 0.9 years |
Weighted average discount rate | | | 6.0% | | | 5.6% |
| | Operating Leases | | | Finance Leases | |
2020 | | | 42 | | | 65 |
2021 | | | — | | | 39 |
Total lease payments | | | 42 | | | 104 |
Less imputed interest | | | (1) | | | (2) |
Total | | | $41 | | | $102 |
| | For the Three Months Ended June 30, | | | For the Six Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Income (numerator): | | | | | | | | | ||||
Net income (loss) | | | $(554) | | | $9 | | | $(1,081) | | | $(87) |
Weighted average shares (denominator): | | | | | | | | | ||||
Weighted average shares – basic | | | 10,673,458 | | | 10,648,663 | | | 10,669,794 | | | 10,646,442 |
Dilution effect of share-based compensation, treasury method | | | — | | | — | | | — | | | — |
Weighted average shares – dilutive | | | 10,673,458 | | | 10,648,663 | | | 10,669,794 | | | 10,646,442 |
Income (loss) per share: | | | | | | | | | ||||
Basic and fully diluted | | | $(0.05) | | | $0.00 | | | $(0.10) | | | $(0.01) |
| | June 30, 2020 | | | December 31, 2019 | |
Oil and gas properties | | | $6,687 | | | $6,751 |
Unevaluated properties | | | — | | | — |
Accumulated depreciation, depletion, and amortization | | | (2,642) | | | (2,366) |
Oil and gas properties, net | | | $4,045 | | | $4,385 |
Balance December 31, 2017 | | | $2,270 |
| | ||
Accretion expense | | | 141 |
Liabilities incurred | | | 7 |
Liabilities settled | | | (41) |
Revisions in estimated liabilities | | | (198) |
Balance December 31, 2018 | | | $2,179 |
| | ||
Accretion expense | | | 132 |
Liabilities incurred | | | 12 |
Liabilities settled | | | (83) |
Liabilities sold properties | | | (55) |
Revisions in estimated liabilities | | | (187) |
Balance December 31, 2019 | | | $1,998 |
| | 2019 | | | 2018 | |||||||
| | Shares | | | Weighted Average Exercise Price | | | Shares | | | Weighted Average Exercise Price | |
Outstanding, beginning of year | | | 16,875 | | | $3.18 | | | 30,000 | | | $3.73 |
Granted | | | — | | | $— | | | — | | | $— |
Exercised | | | — | | | $— | | | — | | | $— |
Expired/cancelled | | | (7,500) | | | $4.43 | | | (13,125) | | | $4.43 |
Outstanding, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Exercisable, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Weighted Average Exercise Price | | | Options Outstanding (shares) | | | Weighted Average Remaining Contractual Life (years) | | | Options Exercisable (shares) |
$2.50 | | | 1,875 | | | — | | | 1,875 |
$2.30 | | | 1,875 | | | 0.2 | | | 1,875 |
$2.70 | | | 1,875 | | | 0.5 | | | 1,875 |
$2.20 | | | 1,875 | | | 0.8 | | | 1,875 |
$1.20 | | | 1,875 | | | 1.0 | | | 1,875 |
| | 9,375 | | | | | 9,375 |
| | Total | |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $(99) |
State income tax (benefit) expense | | | |
| | — | |
| | ||
| | ||
| | 557 | |
Net change in deferred tax asset valuation allowance | | | (771) |
Total income tax provision (benefit) | | | $(28) |
Year Ended December 31, 2018 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $326 |
State income tax (benefit) expense | | | 95 |
Permanent difference | | | 1 |
Return to provision | | | 152 |
Net change in deferred tax asset valuation allowance | | | (591) |
Total income tax provision (benefit) | | | $ |
| | Year Ended December 31, | ||||
| | 2019 | | | 2018 | |
Net deferred tax assets (liabilities): | | | | | ||
Net operating loss carryforwards | | | $9,119 | | | $9,675 |
Oil and gas properties | | | 1,054 | | | 1,327 |
Property, Plant and Equipment | | | (5) | | | (163) |
Asset retirement obligation | | | 500 | | | 592 |
Tax credits | | | 65 | | | 130 |
Miscellaneous | | | 36 | | | 45 |
Valuation allowance | | | (10,704) | | | (11,476) |
Net deferred tax asset | | | $65 | | | $130 |
Fiscal Year Ended 2019 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,171 | | | $1,390 | | | $1,215 | | | $1,135 |
Net income (loss) from continuing operations | | | (96) | | | 9 | | | (182) | | | (167) |
Income (loss) per common share from continuing operations | | | $(0.01) | | | $0.00 | | | $(0.02) | | | $(0.01) |
Fiscal Year Ended 2018 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,367 | | | $1,475 | | | $1,654 | | | $1,375 |
Net income (loss) from continuing operations | | | 133 | | | 99 | | | 298 | | | (88) |
Income (loss) per common share from continuing operations | | | $0.01 | | | $0.01 | | | $0.03 | | | $(0.01) |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Proved oil and gas properties | | | $6,751 | | | $6,503 |
Unproved properties | | | — | | | 23 |
Total proved and unproved oil and gas properties | | | $6,751 | | | $6,526 |
Less accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Net oil and gas properties | | | $4,385 | | | $4,804 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Property acquisitions proved | | | $— | | | $164 |
Property acquisitions unproved | | | 14 | | | 23 |
Exploration cost | | | 491 | | | 590 |
Development cost | | | 7 | | | 243 |
Total | | | $512 | | | $1,020 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $4,911 | | | $5,871 |
Production costs and taxes | | | (3,398) | | | (3,591) |
Depreciation, depletion and amortization | | | (637) | | | (722) |
Income from oil and gas producing activities | | | $876 | | | $1,558 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved reserves at December 31, 2017 | | | 870 | | | — | | | 870 |
Revisions of previous estimates | | | 223 | | | — | | | 223 |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | 13 | | | — | | | 13 |
Extensions and discoveries | | | 86 | | | — | | | 86 |
Production | | | (98) | | | — | | | (98) |
Sales of reserves in place | | | — | | | — | | | — |
Proved reserves at December 31, 2018 | | | 1,094 | | | — | | | 1,094 |
Revisions of previous estimates | | | (203) | | | — | | | (203) |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | — | | | — | | | — |
Extensions and discoveries | | | 8 | | | — | | | 8 |
Production | | | (94) | | | — | | | (94) |
Sales of reserves in place | | | (2) | | | — | | | (2) |
Proved reserves at December 31, 2019 | | | 803 | | | — | | | 803 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved developed reserves at: | | | | | | | |||
December 31, 2017 | | | 832 | | | — | | | 832 |
December 31, 2018 | | | 976 | | | — | | | 976 |
December 31, 2019 | | | 803 | | | — | | | 803 |
Proved undeveloped reserves at: | | | | | | | |||
December 31, 2017 | | | 38 | | | — | | | 38 |
December 31, 2018 | | | 118 | | | — | | | 118 |
December 31, 2019 | | | — | | | — | | | — |
| | Year Ended 12/31/2019 | | | Year Ended 12/31/2018 | | | Year Ended 12/31/2017 | |||||||||||||||||||
| | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | |
Total proved reserves year-end reserve report | | | $8,365 | | | — | | | $8,365 | | | $13,976 | | | — | | | $13,976 | | | $8,170 | | | — | | | $8,170 |
Proved developed producing reserves (PDP) | | | $7,592 | | | — | | | $7,592 | | | $12,534 | | | — | | | $12,534 | | | $7,065 | | | — | | | $7,065 |
% of PDP reserves to total proved reserves | | | 91% | | | — | | | 91% | | | 90% | | | — | | | 90% | | | 87% | | | — | | | 87% |
Proved developed non-producing reserves | | | $773 | | | — | | | $773 | | | $739 | | | — | | | $739 | | | $1,082 | | | — | | | $1,082 |
% of PDNP reserves to total proved reserves | | | 9% | | | — | | | 9% | | | 5% | | | — | | | 5% | | | 13% | | | — | | | 13% |
Proved undeveloped reserves (PUD) | | | $— | | | — | | | $— | | | $703 | | | — | | | $703 | | | $23 | | | — | | | $23 |
% of PUD reserves to total proved reserves | | | — | | | — | | | — | | | 5% | | | — | | | 5% | | | — | | | — | | | — |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Future cash inflows | | | $40,655 | | | $65,871 | | | $39,889 |
Future production costs and taxes | | | (24,829) | | | (35,877) | | | (23,343) |
Future development costs | | | (542) | | | (2,833) | | | (1,586) |
Future income tax expenses | | | — | | | — | | | — |
Future net cash flows | | | 15,284 | | | 27,161 | | | 14,960 |
Discount at 10% for timing of cash flows | | | (6,919) | | | (13,185) | | | (6,790) |
Standardized measure of discounted future net cash flows | | | $8,365 | | | $13,976 | | | $8,170 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Balance, beginning of year | | | $13,976 | | | $8,170 | | | $5,815 |
Sales, net of production costs and taxes | | | (1,646) | | | (2,611) | | | (1,239) |
Discoveries and extensions, net of costs | | | 154 | | | 798 | | | 123 |
Purchase of reserves in place | | | — | | | 143 | | | — |
Sale of reserves in place | | | (26) | | | — | | | — |
Net changes in prices and production costs | | | (3,348) | | | 4,304 | | | 1,780 |
Revisions of quantity estimates | | | (3,058) | | | 2,180 | | | 1,611 |
Previously estimated development cost incurred during the year | | | — | | | 210 | | | — |
Changes in future development costs | | | 1,016 | | | 78 | | | (228) |
Changes in timing and other | | | 86 | | | (4) | | | (164) |
Accretion of discount | | | 1,211 | | | 708 | | | 472 |
Net change in income taxes | | | — | | | — | | | — |
Balance, end of year | | | $8,365 | | | $13,976 | | | $8,170 |
| | September 30, 2020 | | | December 31, 2019 | |
Assets | | | | | ||
Current | | | | | ||
Cash and cash equivalents | | | $2,545 | | | $3,055 |
Accounts receivable | | | 262 | | | 557 |
Inventory | | | 302 | | | 415 |
Prepaid expenses | | | 156 | | | 247 |
Other current assets | | | 4 | | | 4 |
Total current assets | | | 3,269 | | | 4,278 |
Loan fees, net | | | 2 | | | 4 |
Right of use asset – operating leases | | | 58 | | | 41 |
Oil and gas properties, net (full cost accounting method) | | | 3,914 | | | 4,385 |
Other property and equipment, net | | | 134 | | | 149 |
Accounts receivable – noncurrent | | | — | | | 65 |
Total assets | | | $7,377 | | | $8,922 |
| | September 30, 2020 | | | December 31, 2019 | |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities | | | | | ||
Accounts payable – trade | | | $304 | | | $269 |
Accrued liabilities | | | 255 | | | 164 |
Lease liabilities – operating leases – current | | | 58 | | | 41 |
Lease liabilities – finance leases – current | | | 58 | | | 61 |
Current maturities long-term debt | | | 101 | | | — |
Asset retirement obligation – current | | | 75 | | | 75 |
Total current liabilities | | | 851 | | | 610 |
Lease liabilities – finance leases – noncurrent | | | 42 | | | 41 |
Long-term debt, less current maturities | | | 65 | | | — |
Asset retirement obligation – noncurrent | | | 1,954 | | | 1,923 |
Total liabilities | | | 2,912 | | | 2,574 |
Commitments and contingencies (Note 10) | | | | | ||
Stockholders’ equity | | | | | ||
Preferred stock, 25,000,000 shares authorized: | | | | | ||
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding | | | — | | | — |
Common stock, $0.001 par value, authorized 100,000,000 shares, 10,680,050 and 10,658,775 shares issued and outstanding | | | 11 | | | 11 |
Additional paid–in capital | | | 58,304 | | | 58,293 |
Accumulated deficit | | | (53,850) | | | (51,956) |
Total stockholders’ equity | | | 4,465 | | | 6,348 |
Total liabilities and stockholders’ equity | | | $7,377 | | | $8,922 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Revenues | | | | | | | | | ||||
Oil and gas properties | | | $765 | | | $1,215 | | | $2,292 | | | $3,777 |
Total revenues | | | 765 | | | 1,215 | | | 2,292 | | | 3,777 |
Cost and expenses | | | | | | | | | ||||
Production costs and taxes | | | 746 | | | 913 | | | 2,399 | | | 2,604 |
Depreciation, depletion, and amortization | | | 146 | | | 186 | | | 461 | | | 566 |
General and administrative | | | 685 | | | 297 | | | 1,324 | | | 913 |
Total cost and expenses | | | 1,577 | | | 1,396 | | | 4,184 | | | 4,083 |
Net loss from operations | | | (812) | | | (181) | | | (1,892) | | | (306) |
Other income (expense) | | | | | | | | | ||||
Interest expense | | | (2) | | | (2) | | | (6) | | | (8) |
Gain on sale of assets | | | 1 | | | 1 | | | 4 | | | 45 |
Total other income (expense) | | | (1) | | | (1) | | | (2) | | | 37 |
Net loss from operations before income tax | | | (813) | | | (182) | | | (1,894) | | | (269) |
Deferred income tax benefit (expense) | | | — | | | — | | | — | | | — |
Net loss | | | $(813) | | | $(182) | | | $(1,894) | | | $(269) |
Net loss per share | | | | | | | | | ||||
Basic and fully diluted | | | $(0.08) | | | $(0.02) | | | $(0.18) | | | $(0.03) |
Shares used in computing earnings per share | | | | | | | | | ||||
Basic and fully diluted | | | 10,680,050 | | | 10,653,550 | | | 10,673,238 | | | 10,648,838 |
| | For the Nine Months Ended September 30, | ||||
| | 2020 | | | 2019 | |
Operating activities | | | | | ||
Net loss | | | $(1,894) | | | $(269) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | ||
Depreciation, depletion, and amortization | | | 461 | | | 566 |
Amortization of loan fees-interest expense | | | 2 | | | 4 |
Accretion on asset retirement obligation | | | 94 | | | 100 |
Gain on asset sales | | | (4) | | | (45) |
Stock based compensation | | | 11 | | | 14 |
Changes in assets and liabilities: | | | | | ||
Accounts receivable, current and noncurrent | | | 360 | | | 22 |
Inventory, prepaid expenses and other assets | | | 204 | | | 78 |
Accounts payable | | | 118 | | | 4 |
Accrued and other current liabilities | | | 96 | | | (51) |
Settlement on asset retirement obligation | | | (13) | | | (52) |
Net cash (used in) provided by operating activities | | | (565) | | | 371 |
Investing activities | | | | | ||
Additions to oil and gas properties | | | (103) | | | (153) |
Proceeds from sale of oil and gas properties | | | 36 | | | 41 |
Additions to other property and equipment | | | (10) | | | (2) |
Proceeds from sale of materials inventory | | | — | | | 150 |
Net cash (used in) provided by investing activities | | | (77) | | | 36 |
Financing activities | | | | | ||
Repayments of financing leases | | | (34) | | | (40) |
Proceeds from borrowings | | | 166 | | | — |
Net cash provided by (used in) financing activities | | | 132 | | | (40) |
Net change in cash and cash equivalents | | | (510) | | | 367 |
Cash and cash equivalents, beginning of period | | | 3,055 | | | 3,115 |
Cash and cash equivalents, end of period | | | $2,545 | | | $3,482 |
Supplemental cash flow information: | | | | | ||
Cash interest payments | | | $4 | | | $4 |
Supplemental non-cash investing and financing activities: | | | | | ||
Financed company vehicles | | | $54 | | | $30 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2019 | | | 10,658,775 | | | $11 | | | $58,293 | | | $(51,956) | | | $6,348 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (527) | | | (527) |
Compensation expense related to stock issued | | | 7,436 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2020 | | | 10,666,211 | | | $11 | | | $58,297 | | | $(52,483) | | | $5,825 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (554) | | | (554) |
Compensation expense related to stock issued | | | 7,328 | | | — | | | 3 | | | — | | | 3 |
| | | | | | | | | | ||||||
Balance, June 30, 2020 | | | 10,673,539 | | | $11 | | | $58,300 | | | $(53,037) | | | $5,274 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (813) | | | (813) |
Compensation expense related to stock issued | | | 6,511 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2020 | | | 10,680,050 | | | $11 | | | $58,304 | | | $(53,850) | | | $4,465 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2018 | | | 10,639,290 | | | $11 | | | $58,276 | | | $(51,520) | | | $6,767 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (96) | | | (96) |
Compensation expense related to stock issued | | | 4,962 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2019 | | | 10,644,252 | | | $11 | | | $58,280 | | | $(51,616) | | | $6,675 |
| | | | | | | | | | ||||||
Net income | | | — | | | — | | | — | | | 9 | | | 9 |
Compensation expense related to stock issued | | | 4,411 | | | — | | | 6 | | | — | | | 6 |
| | | | | | | | | | ||||||
Balance, June 30, 2019 | | | 10,648,663 | | | $11 | | | $58,286 | | | $(51,607) | | | $6,690 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (182) | | | (182) |
Compensation expense related to stock issued | | | 4,887 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2019 | | | 10,653,550 | | | $11 | | | $58,290 | | | $(51,789) | | | $6,512 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Crude oil | | | $757 | | | $1,208 | | | $2,275 | | | $3,757 |
Saltwater disposal fees | | | 8 | | | 7 | | | 17 | | | 20 |
Total | | | $765 | | | $1,215 | | | $2,292 | | | $3,777 |
| | September 30, 2020 | | | December 31, 2019 | |
Oil – carried at lower of cost or market | | | $302 | | | $415 |
Total inventory | | | $302 | | | $415 |
| | September 30, 2020 | | | December 31, 2019 | |
Revenue | | | $259 | | | $415 |
Tax | | | — | | | 65 |
Joint interest | | | 3 | | | 77 |
Accounts receivable – current | | | $262 | | | $557 |
Tax – noncurrent | | | $— | | | $65 |
| | | | For the years ended December 31, | |||||
| | Income Statement Account | | | 2019 | | | 2018 | |
Operating lease cost: | | | | | | | |||
| | Production costs and taxes | | | $13 | | | $— | |
| | General and administrative | | | 49 | | | — | |
Total operating lease cost | | | | | $62 | | | $— | |
Finance lease cost: | | | | | | | |||
Amortization of right of use assets | | | Depreciation, depletion, and amortization | | | $79 | | | $— |
Interest on lease liabilities | | | Net interest expense | | | 5 | | | — |
Total finance lease cost | | | | | $84 | | | $— |
| | For the years ended December 31, | ||||
| | 2019 | | | 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | | | | | ||
Operating cash flows from operating leases | | | $62 | | | $— |
Operating cash flows from finance leases | | | 5 | | | — |
Finance cash flows from finance leases | | | $53 | | | $— |
Right of use assets obtained in exchange for lease obligations: | | | | | ||
Operating leases | | | $98 | | | $— |
| | Balance Sheet as of December 31, | ||||
| | 2019 | | | 2018 | |
Operating Leases: | | | | | ||
Right of use asset - operating leases | | | $41 | | | $— |
Lease liabilities - current | | | $41 | | | $— |
Lease liabilities - noncurrent | | | — | | | — |
Total operating lease liabilities | | | $41 | | | $— |
Finance Leases: | | | | | ||
Other property and equipment, gross | | | $295 | | | $— |
Accumulated depreciation | | | (146) | | | — |
Other property and equipment, net | | | $149 | | | $— |
Lease liabilities - current | | | $61 | | | $— |
Lease liabilities - noncurrent | | | 41 | | | — |
Total finance lease liabilities | | | $102 | | | $— |
| | Operating Leases | | | Finance Leases | |
Weighted average remaining lease term | | | 0.7 years | | | 0.9 years |
Weighted average discount rate | | | 6.0% | | | 5.6% |
| | Operating Leases | | | Finance Leases | |
2020 | | | 42 | | | 65 |
2021 | | | — | | | 39 |
Total lease payments | | | 42 | | | 104 |
Less imputed interest | | | (1) | | | (2) |
Total | | | $41 | | | $102 |
Balance December 31, 2017 | | | $2,270 |
| | ||
Accretion expense | | | 141 |
Liabilities incurred | | | 7 |
Liabilities settled | | | (41) |
Revisions in estimated liabilities | | | (198) |
Balance December 31, 2018 | | | $2,179 |
| | ||
Accretion expense | | | 132 |
Liabilities incurred | | | 12 |
Liabilities settled | | | (83) |
Liabilities sold properties | | | (55) |
Revisions in estimated liabilities | | | (187) |
Balance December 31, 2019 | | | $1,998 |
| | 2019 | | | 2018 | |||||||
| | Shares | | | Weighted Average Exercise Price | | | Shares | | | Weighted Average Exercise Price | |
Outstanding, beginning of year | | | 16,875 | | | $3.18 | | | 30,000 | | | $3.73 |
Granted | | | — | | | $— | | | — | | | $— |
Exercised | | | — | | | $— | | | — | | | $— |
Expired/cancelled | | | (7,500) | | | $4.43 | | | (13,125) | | | $4.43 |
Outstanding, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Exercisable, end of year | | | 9,375 | | | $2.18 | | | 16,875 | | | $3.18 |
Weighted Average Exercise Price | | | Options Outstanding (shares) | | | Weighted Average Remaining Contractual Life (years) | | | Options Exercisable (shares) |
$2.50 | | | 1,875 | | | — | | | 1,875 |
$2.30 | | | 1,875 | | | 0.2 | | | 1,875 |
$2.70 | | | 1,875 | | | 0.5 | | | 1,875 |
$2.20 | | | 1,875 | | | 0.8 | | | 1,875 |
$1.20 | | | 1,875 | | | 1.0 | | | 1,875 |
| | 9,375 | | | | | 9,375 |
Year Ended December 31, 2019 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $(99) |
State income tax (benefit) expense | | | 321 |
Permanent difference | | | — |
Return to provision | | | (40) |
Stock Compensation Tax Deficit - ASU 2016-09 | | | 4 |
2019 NOL Expiration | | | 557 |
Net change in deferred tax asset valuation allowance | | | (771) |
Total income tax provision (benefit) | | | $(28) |
Year Ended December 31, 2018 | | | Total |
Statutory rate | | | 21% |
Tax (benefit) expense at statutory rate | | | $326 |
State income tax (benefit) expense | | | 95 |
Permanent difference | | | 1 |
Return to provision | | | 152 |
Net change in deferred tax asset valuation allowance | | | (591) |
Total income tax provision (benefit) | | | $(17) |
| | Year Ended December 31, | ||||
| | 2019 | | | 2018 | |
Net deferred tax assets (liabilities): | | | | | ||
Net operating loss carryforwards | | | $9,119 | | | $9,675 |
Oil and gas properties | | | 1,054 | | | 1,327 |
Property, Plant and Equipment | | | (5) | | | (163) |
Asset retirement obligation | | | 500 | | | 592 |
Tax credits | | | 65 | | | 130 |
Miscellaneous | | | 36 | | | 45 |
Valuation allowance | | | (10,704) | | | (11,476) |
Net deferred tax asset | | | $65 | | | $130 |
Fiscal Year Ended 2019 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,171 | | | $1,390 | | | $1,215 | | | $1,135 |
Net income (loss) from continuing operations | | | (96) | | | 9 | | | (182) | | | (167) |
Income (loss) per common share from continuing operations | | | $(0.01) | | | $0.00 | | | $(0.02) | | | $(0.01) |
Fiscal Year Ended 2018 | | | 1st Quarter | | | 2nd Quarter | | | 3rd Quarter | | | 4th Quarter |
Revenues | | | $1,367 | | | $1,475 | | | $1,654 | | | $1,375 |
Net income (loss) from continuing operations | | | 133 | | | 99 | | | 298 | | | (88) |
Income (loss) per common share from continuing operations | | | $0.01 | | | $0.01 | | | $0.03 | | | $(0.01) |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Proved oil and gas properties | | | $6,751 | | | $6,503 |
Unproved properties | | | — | | | 23 |
Total proved and unproved oil and gas properties | | | $6,751 | | | $6,526 |
Less accumulated depreciation, depletion and amortization | | | (2,366) | | | (1,722) |
Net oil and gas properties | | | $4,385 | | | $4,804 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Property acquisitions proved | | | $— | | | $164 |
Property acquisitions unproved | | | 14 | | | 23 |
Exploration cost | | | 491 | | | 590 |
Development cost | | | 7 | | | 243 |
Total | | | $512 | | | $1,020 |
| | Years Ended December 31, | ||||
| | 2019 | | | 2018 | |
Revenues | | | $4,911 | | | $5,871 |
Production costs and taxes | | | (3,398) | | | (3,591) |
Depreciation, depletion and amortization | | | (637) | | | (722) |
Income from oil and gas producing activities | | | $876 | | | $1,558 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved reserves at December 31, 2017 | | | 870 | | | — | | | 870 |
Revisions of previous estimates | | | 223 | | | — | | | 223 |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | 13 | | | — | | | 13 |
Extensions and discoveries | | | 86 | | | — | | | 86 |
Production | | | (98) | | | — | | | (98) |
Sales of reserves in place | | | — | | | — | | | — |
Proved reserves at December 31, 2018 | | | 1,094 | | | — | | | 1,094 |
Revisions of previous estimates | | | (203) | | | — | | | (203) |
Improved recovery | | | — | | | — | | | — |
Purchase of reserves in place | | | — | | | — | | | — |
Extensions and discoveries | | | 8 | | | — | | | 8 |
Production | | | (94) | | | — | | | (94) |
Sales of reserves in place | | | (2) | | | — | | | (2) |
Proved reserves at December 31, 2019 | | | 803 | | | — | | | 803 |
| | Oil (MBbl) | | | Gas (MMcf) | | | MBoe | |
Proved developed reserves at: | | | | | | | |||
December 31, 2017 | | | 832 | | | — | | | 832 |
December 31, 2018 | | | 976 | | | — | | | 976 |
December 31, 2019 | | | 803 | | | — | | | 803 |
Proved undeveloped reserves at: | | | | | | | |||
December 31, 2017 | | | 38 | | | — | | | 38 |
December 31, 2018 | | | 118 | | | — | | | 118 |
December 31, 2019 | | | — | | | — | | | — |
| | Year Ended 12/31/2019 | | | Year Ended 12/31/2018 | | | Year Ended 12/31/2017 | |||||||||||||||||||
| | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | | | Oil | | | Gas | | | Total | |
Total proved reserves year-end reserve report | | | $8,365 | | | — | | | $8,365 | | | $13,976 | | | — | | | $13,976 | | | $8,170 | | | — | | | $8,170 |
Proved developed producing reserves (PDP) | | | $7,592 | | | — | | | $7,592 | | | $12,534 | | | — | | | $12,534 | | | $7,065 | | | — | | | $7,065 |
% of PDP reserves to total proved reserves | | | 91% | | | — | | | 91% | | | 90% | | | — | | | 90% | | | 87% | | | — | | | 87% |
Proved developed non-producing reserves | | | $773 | | | — | | | $773 | | | $739 | | | — | | | $739 | | | $1,082 | | | — | | | $1,082 |
% of PDNP reserves to total proved reserves | | | 9% | | | — | | | 9% | | | 5% | | | — | | | 5% | | | 13% | | | — | | | 13% |
Proved undeveloped reserves (PUD) | | | $— | | | — | | | $— | | | $703 | | | — | | | $703 | | | $23 | | | — | | | $23 |
% of PUD reserves to total proved reserves | | | — | | | — | | | — | | | 5% | | | — | | | 5% | | | — | | | — | | | — |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Future cash inflows | | | $40,655 | | | $65,871 | | | $39,889 |
Future production costs and taxes | | | (24,829) | | | (35,877) | | | (23,343) |
Future development costs | | | (542) | | | (2,833) | | | (1,586) |
Future income tax expenses | | | — | | | — | | | — |
Future net cash flows | | | 15,284 | | | 27,161 | | | 14,960 |
Discount at 10% for timing of cash flows | | | (6,919) | | | (13,185) | | | (6,790) |
Standardized measure of discounted future net cash flows | | | $8,365 | | | $13,976 | | | $8,170 |
| | Years Ended December 31, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Balance, beginning of year | | | $13,976 | | | $8,170 | | | $5,815 |
Sales, net of production costs and taxes | | | (1,646) | | | (2,611) | | | (1,239) |
Discoveries and extensions, net of costs | | | 154 | | | 798 | | | 123 |
Purchase of reserves in place | | | — | | | 143 | | | — |
Sale of reserves in place | | | (26) | | | — | | | — |
Net changes in prices and production costs | | | (3,348) | | | 4,304 | | | 1,780 |
Revisions of quantity estimates | | | (3,058) | | | 2,180 | | | 1,611 |
Previously estimated development cost incurred during the year | | | — | | | 210 | | | — |
Changes in future development costs | | | 1,016 | | | 78 | | | (228) |
Changes in timing and other | | | 86 | | | (4) | | | (164) |
Accretion of discount | | | 1,211 | | | 708 | | | 472 |
Net change in income taxes | | | — | | | — | | | — |
Balance, end of year | | | $8,365 | | | $13,976 | | | $8,170 |
| | September 30, 2020 | | | December 31, 2019 | |
Assets | | | | | ||
Current | | | | | ||
Cash and cash equivalents | | | $2,545 | | | $3,055 |
Accounts receivable | | | 262 | | | 557 |
Inventory | | | 302 | | | 415 |
Prepaid expenses | | | 156 | | | 247 |
Other current assets | | | 4 | | | 4 |
Total current assets | | | 3,269 | | | 4,278 |
Loan fees, net | | | 2 | | | 4 |
Right of use asset – operating leases | | | 58 | | | 41 |
Oil and gas properties, net (full cost accounting method) | | | 3,914 | | | 4,385 |
Other property and equipment, net | | | 134 | | | 149 |
Accounts receivable – noncurrent | | | — | | | 65 |
Total assets | | | $7,377 | | | $8,922 |
| | September 30, 2020 | | | December 31, 2019 | |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities | | | | | ||
Accounts payable – trade | | | $304 | | | $269 |
Accrued liabilities | | | 255 | | | 164 |
Lease liabilities – operating leases – current | | | 58 | | | 41 |
Lease liabilities – finance leases – current | | | 58 | | | 61 |
Current maturities long-term debt | | | 101 | | | — |
Asset retirement obligation – current | | | 75 | | | 75 |
Total current liabilities | | | 851 | | | 610 |
Lease liabilities – finance leases – noncurrent | | | 42 | | | 41 |
Long-term debt, less current maturities | | | 65 | | | — |
Asset retirement obligation – noncurrent | | | 1,954 | | | 1,923 |
Total liabilities | | | 2,912 | | | 2,574 |
Commitments and contingencies (Note 10) | | | | | ||
Stockholders’ equity | | | | | ||
Preferred stock, 25,000,000 shares authorized: | | | | | ||
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding | | | — | | | — |
Common stock, $0.001 par value, authorized 100,000,000 shares, 10,680,050 and 10,658,775 shares issued and outstanding | | | 11 | | | 11 |
Additional paid–in capital | | | 58,304 | | | 58,293 |
Accumulated deficit | | | (53,850) | | | (51,956) |
Total stockholders’ equity | | | 4,465 | | | 6,348 |
Total liabilities and stockholders’ equity | | | $7,377 | | | $8,922 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Revenues | | | | | | | | | ||||
Oil and gas properties | | | $765 | | | $1,215 | | | $2,292 | | | $3,777 |
Total revenues | | | 765 | | | 1,215 | | | 2,292 | | | 3,777 |
Cost and expenses | | | | | | | | | ||||
Production costs and taxes | | | 746 | | | 913 | | | 2,399 | | | 2,604 |
Depreciation, depletion, and amortization | | | 146 | | | 186 | | | 461 | | | 566 |
General and administrative | | | 685 | | | 297 | | | 1,324 | | | 913 |
Total cost and expenses | | | 1,577 | | | 1,396 | | | 4,184 | | | 4,083 |
Net loss from operations | | | (812) | | | (181) | | | (1,892) | | | (306) |
Other income (expense) | | | | | | | | | ||||
Interest expense | | | (2) | | | (2) | | | (6) | | | (8) |
Gain on sale of assets | | | 1 | | | 1 | | | 4 | | | 45 |
Total other income (expense) | | | (1) | | | (1) | | | (2) | | | 37 |
Net loss from operations before income tax | | | (813) | | | (182) | | | (1,894) | | | (269) |
Deferred income tax benefit (expense) | | | — | | | — | | | — | | | — |
Net loss | | | $(813) | | | $(182) | | | $(1,894) | | | $(269) |
Net loss per share | | | | | | | | | ||||
Basic and fully diluted | | | $(0.08) | | | $(0.02) | | | $(0.18) | | | $(0.03) |
Shares used in computing earnings per share | | | | | | | | | ||||
Basic and fully diluted | | | 10,680,050 | | | 10,653,550 | | | 10,673,238 | | | 10,648,838 |
| | For the Nine Months Ended September 30, | ||||
| | 2020 | | | 2019 | |
Operating activities | | | | | ||
Net loss | | | $(1,894) | | | $(269) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | ||
Depreciation, depletion, and amortization | | | 461 | | | 566 |
Amortization of loan fees-interest expense | | | 2 | | | 4 |
Accretion on asset retirement obligation | | | 94 | | | 100 |
Gain on asset sales | | | (4) | | | (45) |
Stock based compensation | | | 11 | | | 14 |
Changes in assets and liabilities: | | | | | ||
Accounts receivable, current and noncurrent | | | 360 | | | 22 |
Inventory, prepaid expenses and other assets | | | 204 | | | 78 |
Accounts payable | | | 118 | | | 4 |
Accrued and other current liabilities | | | 96 | | | (51) |
Settlement on asset retirement obligation | | | (13) | | | (52) |
Net cash (used in) provided by operating activities | | | (565) | | | 371 |
Investing activities | | | | | ||
Additions to oil and gas properties | | | (103) | | | (153) |
Proceeds from sale of oil and gas properties | | | 36 | | | 41 |
Additions to other property and equipment | | | (10) | | | (2) |
Proceeds from sale of materials inventory | | | — | | | 150 |
Net cash (used in) provided by investing activities | | | (77) | | | 36 |
Financing activities | | | | | ||
Repayments of financing leases | | | (34) | | | (40) |
Proceeds from borrowings | | | 166 | | | — |
Net cash provided by (used in) financing activities | | | 132 | | | (40) |
Net change in cash and cash equivalents | | | (510) | | | 367 |
Cash and cash equivalents, beginning of period | | | 3,055 | | | 3,115 |
Cash and cash equivalents, end of period | | | $2,545 | | | $3,482 |
Supplemental cash flow information: | | | | | ||
Cash interest payments | | | $4 | | | $4 |
Supplemental non-cash investing and financing activities: | | | | | ||
Financed company vehicles | | | $54 | | | $30 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2019 | | | 10,658,775 | | | $11 | | | $58,293 | | | $(51,956) | | | $6,348 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (527) | | | (527) |
Compensation expense related to stock issued | | | 7,436 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2020 | | | 10,666,211 | | | $11 | | | $58,297 | | | $(52,483) | | | $5,825 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (554) | | | (554) |
Compensation expense related to stock issued | | | 7,328 | | | — | | | 3 | | | — | | | 3 |
| | | | | | | | | | ||||||
Balance, June 30, 2020 | | | 10,673,539 | | | $11 | | | $58,300 | | | $(53,037) | | | $5,274 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (813) | | | (813) |
Compensation expense related to stock issued | | | 6,511 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2020 | | | 10,680,050 | | | $11 | | | $58,304 | | | $(53,850) | | | $4,465 |
| | Common Stock | | | Paid-in Capital | | | Accumulated Deficit | | | Total | ||||
| | Shares | | | Amount | | |||||||||
Balance, December 31, 2018 | | | 10,639,290 | | | $11 | | | $58,276 | | | $(51,520) | | | $6,767 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (96) | | | (96) |
Compensation expense related to stock issued | | | 4,962 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, March 31, 2019 | | | 10,644,252 | | | $11 | | | $58,280 | | | $(51,616) | | | $6,675 |
| | | | | | | | | | ||||||
Net income | | | — | | | — | | | — | | | 9 | | | 9 |
Compensation expense related to stock issued | | | 4,411 | | | — | | | 6 | | | — | | | 6 |
| | | | | | | | | | ||||||
Balance, June 30, 2019 | | | 10,648,663 | | | $11 | | | $58,286 | | | $(51,607) | | | $6,690 |
| | | | | | | | | | ||||||
Net loss | | | — | | | — | | | — | | | (182) | | | (182) |
Compensation expense related to stock issued | | | 4,887 | | | — | | | 4 | | | — | | | 4 |
| | | | | | | | | | ||||||
Balance, September 30, 2019 | | | 10,653,550 | | | $11 | | | $58,290 | | | $(51,789) | | | $6,512 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Crude oil | | | $757 | | | $1,208 | | | $2,275 | | | $3,757 |
Saltwater disposal fees | | | 8 | | | 7 | | | 17 | | | 20 |
Total | | | $765 | | | $1,215 | | | $2,292 | | | $3,777 |
| | September 30, 2020 | | | December 31, 2019 | |
Oil – carried at lower of cost or market | | | $302 | | | $415 |
Total inventory | | | $302 | | | $415 |
| | September 30, 2020 | | | December 31, 2019 | |
Revenue | | | $259 | | | $415 |
Tax | | | — | | | 65 |
Joint interest | | | 3 | | | 77 |
Accounts receivable – current | | | $262 | | | $557 |
Tax – noncurrent | | | $— | | | $65 |
| | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Income (numerator): | | | | | | | | | ||||
Net loss | | | $(813) | | | $(182) | | | $(1,894) | | | $(269) |
Weighted average shares (denominator): | | | | | | | | | ||||
Weighted average shares – basic | | | 10,680,050 | | | 10,653,550 | | | 10,673,238 | | | 10,648,838 |
Dilution effect of share-based compensation, treasury method | | | — | | | — | | | — | | | — |
Weighted average shares – dilutive | | | 10,680,050 | | | 10,653,550 | | | 10,673,238 | | | 10,648,838 |
Loss per share: | | | | | | | | | ||||
Basic and fully diluted | | | $(0.08) | | | $(0.02) | | | $(0.18) | | | $(0.03) |
| | September 30, 2020 | | | December 31, 2019 | |
Oil and gas properties | | | $6,685 | | | $6,751 |
Unevaluated properties | | | — | | | — |
Accumulated depreciation, depletion, and amortization | | | (2,771) | | | (2,366) |
Oil and gas properties, net | | | $3,914 | | | $4,385 |
Balance December 31, 2019 | | | $1,998 |
Accretion expense | | | 94 |
Liabilities incurred | | | — |
Liabilities settled | | | — |
Liabilities relieved – sold properties | | | (63) |
Balance September 30, 2020 | | | $2,029 |
| | | Period Ended | | | | Period Ended | |||||||||||||||||||||||
| | Statement of Operations Account | | | For the Three Months Ended | | For the Six Months Ended | | | | For the Three Months Ended | | For the Nine Months Ended | |||||||||||||||||
| | June 30, 2020 | | June 30, 2019 | | June 30, 2020 | | June 30, 2019 | | | Statement of Operations Account | | September 30, 2020 | | September 30, 2019 | | September 30, 2020 | | September 30, 2019 | |||||||||||
Operating lease cost: | | | | | | | | | | | ||||||||||||||||||||
| Production costs and taxes | | $4 | | $3 | | $7 | | $6 | | Production costs and taxes | | $3 | | $3 | | $10 | | $10 | |||||||||||
| General and administrative | | 13 | | 12 | | 25 | | 24 | | General and administrative | | 13 | | 12 | | 37 | | 37 | |||||||||||
Total operating lease cost | | | $17 | | $15 | | $32 | | $30 | | | $16 | | $15 | | $47 | | $47 | ||||||||||||
Finance lease cost: | | | | | | | | | | | ||||||||||||||||||||
Amortization of right of use assets | | Depreciation, depletion, and amortization | | $18 | | $20 | | $36 | | $41 | | Depreciation, depletion, and amortization | | $20 | | $21 | | $56 | | $62 | ||||||||||
Interest on lease liabilities | | Net interest expense | | 2 | | 2 | | 3 | | 3 | | Net interest expense | | 1 | | 1 | | 4 | | 4 | ||||||||||
Total finance lease cost | | | $20 | | $22 | | $39 | | $44 | | | $21 | | $22 | | $60 | | $66 |
| | Period Ended | ||||||||||||||||||||||
| | For the Three Months Ended | | For the Six Months Ended | | | Period Ended | |||||||||||||||||
| | June 30, 2020 | | June 30, 2019 | | June 30, 2020 | | June 30, 2019 | | | For the Three Months Ended | | For the Nine Months Ended | |||||||||||
| | | | | | September 30, 2020 | | September 30, 2019 | | September 30, 2020 | | September 30, 2019 | ||||||||||||
Cash paid for amounts included in lease liabilities: | | | | | | | | | ||||||||||||||||
Operating cash flows from operating leases | | $17 | | $15 | | $32 | | $30 | | $16 | | $15 | | $47 | | $45 | ||||||||
Operating cash flows from finance leases | | 2 | | 2 | | 3 | | 3 | | 1 | | 1 | | 4 | | 4 | ||||||||
Finance cash flows from finance leases | | 15 | | 19 | | 23 | | 31 | | 15 | | 9 | | 34 | | 40 | ||||||||
Right of use assets obtained in exchange for lease obligations: | | | | | | | | | ||||||||||||||||
Operating leases | | 63 | | — | | 63 | | 98 | | — | | — | | 63 | | 98 |
| | Balance Sheet as of | | | Balance Sheet as of | |||||||
| | June 30, 2020 | | December 31, 2019 | | | September 30, 2020 | | December 31, 2019 | |||
Operating Leases: | | | | | ||||||||
Right of use asset - operating leases | | $73 | | $41 | ||||||||
Lease liabilities - current | | $62 | | $41 | ||||||||
Lease liabilities - noncurrent | | 11 | | — | ||||||||
Right of use asset – operating leases | | $58 | | $41 | ||||||||
Lease liabilities – current | | $58 | | $41 | ||||||||
Lease liabilities – noncurrent | | — | | — | ||||||||
Total operating lease liabilities | | $73 | | $41 | | $58 | | $41 | ||||
Finance Leases: | | | | | ||||||||
Other property and equipment, gross | | $264 | | $295 | | $293 | | $295 | ||||
Accumulated depreciation | | (138) | | (146) | | (159) | | (146) | ||||
Other property and equipment, net | | $126 | | $149 | | $134 | | $149 | ||||
Lease liabilities - current | | $59 | | $61 | ||||||||
Lease liabilities - noncurrent | | 30 | | 41 | ||||||||
Lease liabilities – current | | $58 | | $61 | ||||||||
Lease liabilities – noncurrent | | 42 | | 41 | ||||||||
Total finance lease liabilities | | $89 | | $102 | | $100 | | $102 |
| | Operating Leases | | Finance Leases | | | Operating Leases | | Finance Leases | |||
Weighted average remaining lease term | | 1.2 years | | 0.9 years | | 0.9 years | | 1.1 years | ||||
Weighted average discount rate | | 4.07% | | 5.44% | | 3.75% | | 5.35% |
| | Operating Leases | | Finance Leases | | | Operating Leases | | Finance Leases | |||
2020 | | $32 | | $33 | | $16 | | $21 | ||||
2021 | | 43 | | 56 | | 43 | | 67 | ||||
2022 | | — | | 15 | ||||||||
Total lease payments | | 75 | | 89 | | 59 | | 103 | ||||
Less imputed interest | | (2) | | — | | (1) | | (3) | ||||
Total | | $73 | | $89 | | $58 | | $100 |
| | September 30, | ||||
| | 2019 | | | 2018 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $3,726 | | | $3,339 |
Accounts receivable | | | 11,643 | | | 8,930 |
Accounts receivable – related parties | | | 504 | | | — |
Prepaid expenses and other current assets | | | 1,410 | | | 322 |
Current derivative assets | | | 7,503 | | | — |
Total Current Assets | | | 24,786 | | | 12,591 |
| | | | |||
Non-Current Assets: | | | | | ||
Oil and natural gas properties, net (successful efforts) | | | 289,301 | | | 239,506 |
Other property and equipment, net | | | 2,000 | | | 1,885 |
Non-current derivative assets | | | 7,936 | | | — |
Other non-current assets | | | 2,724 | | | 4,501 |
Total Non-Current Assets | | | 301,961 | | | 245,892 |
Total Assets | | | $326,747 | | | $258,483 |
| | | | |||
Liabilities and Members' Equity | | | | | ||
Current Liabilities: | | | | | ||
Accounts payable | | | $2,422 | | | $9,496 |
Accrued liabilities | | | 13,177 | | | 16,503 |
Revenue payable | | | 4,516 | | | 5,374 |
Advances from joint interest owners | | | 362 | | | 600 |
Current derivative liabilities | | | 328 | | | 9,981 |
Total Current Liabilities | | | 20,805 | | | 41,954 |
| | | | |||
Non-Current Liabilities: | | | | | ||
Non-current derivative liabilities | | | 152 | | | 1,258 |
Asset retirement obligations | | | 1,203 | | | 843 |
Revolving credit facility | | | 97,000 | | | 53,500 |
Deferred tax liabilities | | | 1,333 | | | — |
Other non-current liabilities | | | 61 | | | — |
Total Non-Current Liabilities | | | 99,749 | | | 55,601 |
Total Liabilities | | | 120,554 | | | 97,555 |
| | | | |||
Series A Preferred Units | | | 56,810 | | | 53,529 |
Members' Equity | | | 149,383 | | | 107,399 |
Total Liabilities and Members' Equity | | | $326,747 | | | $258,483 |
| | Years Ended September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Revenues: | | | | | | | |||
Oil and natural gas sales, net | | | $101,096 | | | $69,872 | | | $21,808 |
Contract services – related parties | | | 1,900 | | | — | | | — |
Total Revenues | | | 102,996 | | | 69,872 | | | 21,808 |
| | | | | | ||||
Costs and Expenses: | | | | | | | |||
Lease operating expenses | | | 23,808 | | | 11,044 | | | 5,796 |
Gathering, processing & transportation | | | — | | | 735 | | | — |
Production taxes | | | 4,804 | | | 3,207 | | | 1,206 |
Exploration costs | | | 5,074 | | | 5,992 | | | 11,882 |
Depletion, depreciation, amortization and accretion | | | 20,182 | | | 15,714 | | | 5,876 |
General and administrative: | | | | | | | |||
Administrative costs | | | 12,168 | | | 14,175 | | | 5,806 |
Unit-based compensation expense | | | 898 | | | — | | | — |
Cost of contract services – related parties | | | 21 | | | — | | | — |
Transaction costs | | | 4,553 | | | 878 | | | 1,766 |
Total Costs and Expenses | | | 71,508 | | | 51,745 | | | 32,332 |
| | | | | | ||||
Income (Loss) From Operations | | | 31,488 | | | 18,127 | | | (10,524) |
| | | | | | ||||
Other Income (Expense): | | | | | | | |||
Interest expense | | | (4,924) | | | (1,707) | | | — |
Gain (loss) on derivatives | | | 26,712 | | | (17,143) | | | (1,450) |
Total Other Income (Expense) | | | 21,788 | | | (18,850) | | | (1,450) |
| | | | | | ||||
Net Income (Loss) Before Income Taxes | | | 53,276 | | | (723) | | | (11,974) |
| | | | | | ||||
Income tax expense | | | (1,410) | | | — | | | — |
Net Income (Loss) | | | 51,866 | | | (723) | | | (11,974) |
| | | | | | ||||
Dividends on preferred units | | | (3,330) | | | (3,129) | | | (1,409) |
Net Income (Loss) Attributable to Common Unitholders | | | $48,536 | | | $(3,852) | | | $(13,383) |
| | | | | | ||||
Net Income (Loss) per Unit: | | | | | | | |||
Basic | | | $31.87 | | | $(2.57) | | | $(11.63) |
Diluted | | | $26.03 | | | $(2.57) | | | $(11.63) |
| | | | | | ||||
Weighted Average Common Units Outstanding: | | | | | | | |||
Basic | | | 1,523 | | | 1,500 | | | 1,151 |
Diluted | | | 1,992 | | | 1,500 | | | 1,151 |
| | September 30, 2020 | | | September 30, 2019 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $1,660 | | | $3,726 |
Accounts receivable | | | 10,128 | | | 11,643 |
Accounts receivable – related parties | | | 55 | | | 504 |
Prepaid expenses and other current assets | | | 1,752 | | | 1,410 |
Current derivative assets | | | 18,819 | | | 7,503 |
Total Current Assets | | | 32,414 | | | 24,786 |
| | | | |||
Non-Current Assets: | | | | | ||
Oil and natural gas properties, net (successful efforts) | | | 310,726 | | | 289,301 |
Other property and equipment, net | | | 1,801 | | | 2,000 |
Right of use assets | | | 700 | | | — |
Non-current derivative assets | | | 3,102 | | | 7,936 |
Other non-current assets | | | 2,249 | | | 2,724 |
Total Non-Current Assets | | | 318,578 | | | 301,961 |
Total Assets | | | $350,992 | | | $326,747 |
| | | | |||
Liabilities, Series A Preferred Units, and Members' Equity | | | | | ||
Current Liabilities: | | | | | ||
Accounts payable | | | $4,739 | | | $2,422 |
Accrued liabilities | | | 8,746 | | | 13,177 |
Current lease liability | | | 392 | | | — |
Revenue payable | | | 4,432 | | | 4,516 |
Advances from joint interest owners | | | 254 | | | 362 |
Current derivative liabilities | | | — | | | 328 |
Total Current Liabilities | | | 18,563 | | | 20,805 |
| | | | |||
Non-Current Liabilities: | | | | | ||
Non-current derivative liabilities | | | — | | | 152 |
Asset retirement obligations | | | 2,268 | | | 1,203 |
Revolving credit facility | | | 101,000 | | | 97,000 |
Deferred tax liabilities | | | 1,834 | | | 1,333 |
Non-current lease liability | | | 314 | | | — |
Other non-current liabilities | | | 104 | | | 61 |
Total Non-Current Liabilities | | | 105,520 | | | 99,749 |
Total Liabilities | | | 124,083 | | | 120,554 |
| | | | |||
Series A Preferred Units | | | 60,292 | | | 56,810 |
Members' Equity | | | 166,617 | | | 149,383 |
Total Liabilities, Series A Preferred Units, and Members' Equity | | | $350,992 | | | $326,747 |
| | Members' Equity | | | | | ||||||
| | Units Outstanding | | | Amount | | | Parent Net Investment | | | Total | |
Balance, September 30, 2016 | | | — | | | $— | | | $37,320 | | | $37,320 |
Change in parent net investment | | | — | | | — | | | 5,210 | | | 5,210 |
Contribution of net assets of Riley Exploration Group, Inc. in exchange for common units | | | 573 | | | 41,574 | | | (41,574) | | | — |
Contribution of net assets in exchange for common units | | | 927 | | | 82,379 | | | — | | | 82,379 |
Dividends on preferred units | | | — | | | (1,409) | | | — | | | (1,409) |
Net loss | | | — | | | (11,018) | | | (956) | | | (11,974) |
Balance, September 30, 2017 | | | 1,500 | | | $111,526 | | | $— | | | $111,526 |
Distributions to Riley Exploration Group, Inc. | | | — | | | (275) | | | — | | | (275) |
Dividends on preferred units | | | — | | | (3,129) | | | — | | | (3,129) |
Net loss | | | — | | | (723) | | | — | | | (723) |
Balance, September 30, 2018 | | | 1,500 | | | $107,399 | | | $— | | | $107,399 |
Issuance of common units under long-term incentive plan | | | 40 | | | 4,000 | | | — | | | 4,000 |
Purchase of common units under long-term incentive plan | | | (13) | | | (1,456) | | | — | | | (1,456) |
Dividends on preferred units | | | — | | | (3,330) | | | — | | | (3,330) |
Dividends on common units | | | — | | | (9,994) | | | — | | | (9,994) |
Unit-based compensation expense | | | — | | | 898 | | | — | | | 898 |
Net income | | | — | | | 51,866 | | | — | | | 51,866 |
Balance, September 30, 2019 | | | 1,527 | | | $149,383 | | | $— | | | $149,383 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Revenues: | | | | | | | |||
Oil and natural gas sales, net | | | $73,133 | | | $101,096 | | | $69,872 |
Contract services – related parties | | | 3,800 | | | 1,900 | | | — |
Total Revenues | | | 76,933 | | | 102,996 | | | 69,872 |
| | | | | | ||||
Costs and Expenses: | | | | | | | |||
Lease operating expenses | | | 20,997 | | | 23,808 | | | 11,044 |
Gathering, processing & transportation | | | — | | | — | | | 735 |
Production taxes | | | 3,526 | | | 4,804 | | | 3,207 |
Exploration costs | | | 9,923 | | | 5,074 | | | 5,992 |
Depletion, depreciation, amortization and accretion | | | 21,479 | | | 20,182 | | | 15,714 |
General and administrative: | | | | | | | |||
Administrative costs | | | 10,826 | | | 12,168 | | | 14,175 |
Unit-based compensation expense | | | 963 | | | 898 | | | — |
Cost of contract services – related parties | | | 503 | | | 21 | | | — |
Transaction costs | | | 1,431 | | | 4,553 | | | 878 |
Total Costs and Expenses | | | 69,648 | | | 71,508 | | | 51,745 |
| | | | | | ||||
Income From Operations | | | 7,285 | | | 31,488 | | | 18,127 |
| | | | | | ||||
Other Income (Expense): | | | | | | | |||
Interest expense | | | (5,299) | | | (4,924) | | | (1,707) |
Gain (loss) on derivatives | | | 33,876 | | | 26,712 | | | (17,143) |
Total Other Income (Expense) | | | 28,577 | | | 21,788 | | | (18,850) |
| | | | | | ||||
Net Income (Loss) Before Income Taxes | | | 35,862 | | | 53,276 | | | (723) |
| | | | | | ||||
Income tax expense | | | (718) | | | (1,410) | | | — |
Net Income (Loss) | | | 35,144 | | | 51,866 | | | (723) |
| | | | | | ||||
Dividends on preferred units | | | (3,535) | | | (3,330) | | | (3,129) |
Net Income (Loss) Attributable to Common Unitholders | | | $31,609 | | | $48,536 | | | $(3,852) |
| | | | | | ||||
Net Income (Loss) per Unit: | | | | | | | |||
Basic | | | $20.67 | | | $31.87 | | | $(2.57) |
Diluted | | | $17.24 | | | $26.03 | | | $(2.57) |
| | | | | | ||||
Weighted Average Common Units Outstanding: | | | | | | | |||
Basic | | | 1,529 | | | 1,523 | | | 1,500 |
Diluted | | | 2,038 | | | 1,992 | | | 1,500 |
| | Years Ended September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Cash Flows From Operating Activities: | | | | | | | |||
Net income (loss) | | | $51,866 | | | $(723) | | | $(11,974) |
| | | | | | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | |||
Oil and gas lease abandonments | | | 4,839 | | | 5,837 | | | 11,862 |
Depletion, depreciation, amortization and accretion | | | 20,182 | | | 15,714 | | | 5,876 |
(Gain) loss on derivatives | | | (26,712) | | | 17,143 | | | 1,450 |
Settlements on derivative contracts | | | 514 | | | (7,527) | | | 173 |
Amortization of debt issuance costs | | | 502 | | | 306 | | | — |
Write-off of previously deferred IPO costs | | | 2,658 | | | — | | | — |
Unit-based compensation expense | | | 898 | | | — | | | — |
Deferred income tax expense | | | 1,333 | | | — | | | — |
| | | | | | ||||
Changes in operating assets and liabilities: | | | | | | | |||
Accounts receivable | | | (2,713) | | | (3,967) | | | (295) |
Accounts receivable – related parties | | | (504) | | | — | | | — |
Prepaid expenses and other current assets | | | (1,088) | | | (138) | | | (80) |
Other non-current assets | | | (107) | | | (6) | | | (693) |
Accounts payable and accrued liabilities | | | 1,435 | | | 8,392 | | | (5,416) |
Revenue payable | | | (858) | | | 3,036 | | | 2,338 |
Advances from joint interest owners | | | (238) | | | 552 | | | 48 |
Net Cash Provided By Operating Activities | | | 52,007 | | | 38,619 | | | 3,289 |
| | | | | | ||||
Cash Flows From Investing Activities: | | | | | | | |||
Additions to oil and natural gas properties | | | (77,557) | | | (68,581) | | | (52,613) |
Acquisitions of oil and natural gas properties | | | (5,356) | | | (19,507) | | | (200) |
Additions to other property and equipment | | | (485) | | | (301) | | | (1,968) |
Net Cash Used In Investing Activities | | | (83,398) | | | (88,389) | | | (54,781) |
Cash Flows From Financing Activities: | | | | | | | |||
Additional issuance costs of Series A Preferred units | | | — | | | (30) | | | — |
Proceeds from issuance of Series A Preferred Units, net | | | — | | | — | | | 49,823 |
Equity offering costs | | | — | | | (2,658) | | | — |
Net investment from parent | | | — | | | — | | | 5,210 |
Distribution to REG | | | — | | | (275) | | | — |
Net proceeds from revolving credit facility | | | 43,228 | | | 52,607 | | | — |
Proceeds from notes payable | | | — | | | — | | | 154 |
Payments of notes payable | | | — | | | (218) | | | (12) |
Payment of common unit dividends | | | (9,994) | | | — | | | — |
Purchase of common units under long-term incentive plan | | | (1,456) | | | — | | | — |
Net Cash Provided By Financing Activities | | | 31,778 | | | 49,426 | | | 55,175 |
| | | | | | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | | | 387 | | | (344) | | | 3,683 |
Cash and Cash Equivalents, Beginning of Period | | | 3,339 | | | 3,683 | | | — |
Cash and Cash Equivalents, End of Period | | | $3,726 | | | $3,339 | | | $3,683 |
| | Units Outstanding | | | Amount | |
Balance, September 30, 2017 | | | 1,500 | | | $111,526 |
Distributions to Riley Exploration Group, Inc. | | | — | | | (275) |
Dividends on preferred units | | | — | | | (3,129) |
Net loss | | | — | | | (723) |
Balance, September 30, 2018 | | | 1,500 | | | $107,399 |
Issuance of common units under long-term incentive plan | | | 40 | | | 4,000 |
Purchase of common units under long-term incentive plan | | | (13) | | | (1,456) |
Dividends on preferred units | | | — | | | (3,330) |
Dividends on common units | | | — | | | (9,994) |
Unit-based compensation expense | | | — | | | 898 |
Net income | | | — | | | 51,866 |
Balance, September 30, 2019 | | | 1,527 | | | $149,383 |
Issuance of common units under long-term incentive plan | | | 31 | | | — |
Purchase of common units under long-term incentive plan | | | (3) | | | (322) |
Dividends on preferred units | | | — | | | (3,535) |
Dividends on common units | | | — | | | (15,016) |
Unit-based compensation expense | | | — | | | 963 |
Net income | | | — | | | 35,144 |
Balance, September 30, 2020 | | | 1,555 | | | $166,617 |
| | Years Ended September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Supplemental Disclosure of Cash Flow Information | | | | | | | |||
| | | | | | ||||
Cash Paid For: | | | | | | | |||
Interest | | | $4,212 | | | $1,229 | | | $3 |
| | | | | | ||||
Non-Cash Investing and Financing Activities: | | | | | | | |||
Changes in capital expenditures in accounts payable and accrued liabilities | | | $(7,825) | | | $5,877 | | | $549 |
Asset retirement obligations | | | $318 | | | $754 | | | $19 |
Issuance of common units under long-term incentive plan | | | $4,000 | | | $— | | | $— |
Preferred unit dividends paid in kind | | | $3,281 | | | $3,736 | | | $— |
Preferred unit dividends | | | $3,330 | | | $3,129 | | | $1,409 |
Contribution of net assets in exchange for common units | | | $— | | | $— | | | $82,379 |
Contribution of net assets of Riley Exploration Group, Inc. in exchange for common units | | | $— | | | $— | | | $41,574 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Cash Flows from Operating Activities: | | | | | | | |||
Net income (loss) | | | $35,144 | | | $51,866 | | | $(723) |
| | | | | | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | |||
Oil and gas lease abandonments | | | 7,902 | | | 4,839 | | | 5,837 |
Depletion, depreciation, amortization and accretion | | | 21,341 | | | 20,182 | | | 15,714 |
Loss on plugging liabilities | | | 138 | | | — | | | — |
(Gain) loss on derivatives | | | (33,876) | | | (26,712) | | | 17,143 |
Settlements on derivative contracts | | | 26,914 | | | 514 | | | (7,527) |
Amortization of debt issuance costs | | | 648 | | | 502 | | | 306 |
Write-off of previously deferred IPO costs | | | — | | | 2,658 | | | — |
Unit-based compensation expense | | | 963 | | | 898 | | | — |
Deferred income tax expense | | | 665 | | | 1,333 | | | — |
| | | | | | ||||
Changes in operating assets and liabilities: | | | | | | | |||
Accounts receivable | | | 1,515 | | | (2,713) | | | (3,967) |
Accounts receivable – related parties | | | 449 | | | (504) | | | — |
Prepaid expenses and other current assets | | | 839 | | | (1,088) | | | (138) |
Other non-current assets | | | 84 | | | (107) | | | (6) |
Accounts payable and accrued liabilities | | | 16 | | | 1,435 | | | 8,392 |
Revenue payable | | | (84) | | | (858) | | | 3,036 |
Advances from joint interest owners | | | (108) | | | (238) | | | 552 |
Net Cash Provided By Operating Activities | | | 62,550 | | | 52,007 | | | 38,619 |
| | | | | | ||||
Cash Flows From Investing Activities: | | | | | | | |||
Additions to oil and natural gas properties | | | (47,183) | | | (77,557) | | | (68,581) |
Acquisitions of oil and natural gas properties | | | (4,110) | | | (5,356) | | | (19,507) |
Additions to other property and equipment | | | (228) | | | (485) | | | (301) |
Net Cash Used In Investing Activities | | | (51,521) | | | (83,398) | | | (88,389) |
Cash Flows From Financing Activities: | | | | | | | |||
Additional issuance costs of Series A Preferred Units | | | — | | | — | | | (30) |
Debt issuance costs | | | (1,476) | | | — | | | — |
Equity offering costs | | | — | | | — | | | (2,658) |
Distribution to Riley Exploration Group, Inc. | | | — | | | — | | | (275) |
Net proceeds from revolving credit facility | | | 4,000 | | | 43,228 | | | 52,607 |
Payments of notes payable | | | — | | | — | | | (218) |
Payment of common unit dividends | | | (15,297) | | | (9,994) | | | — |
Purchase of common units under long-term incentive plan | | | (322) | | | (1,456) | | | — |
Net Cash Provided By (Used In) Financing Activities | | | (13,095) | | | 31,778 | | | 49,426 |
| | | | | | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | | | (2,066) | | | 387 | | | (344) |
Cash and Cash Equivalents, Beginning of Period | | | 3,726 | | | 3,339 | | | 3,683 |
Cash and Cash Equivalents, End of Period | | | $1,660 | | | $3,726 | | | $3,339 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Supplemental Disclosure of Cash Flow Information Cash Paid For: | | | | | | | |||
Interest | | | $4,206 | | | $4,212 | | | $1,229 |
| | | | | | ||||
Non-Cash Investing and Financing Activities: | | | | | | | |||
Changes in capital expenditures in accounts payable and accrued liabilities | | | $(2,301) | | | $(7,825) | | | $5,877 |
Common unit dividends incurred but not paid | | | $173 | | | $— | | | $— |
Asset retirement obligations | | | $1,184 | | | $318 | | | $754 |
Issuance of common units under long-term incentive plan | | | $— | | | $4,000 | | | $— |
Preferred unit dividends paid in kind | | | $3,482 | | | $3,281 | | | $3,736 |
Preferred unit dividends | | | $3,535 | | | $3,330 | | | $3,129 |
Nature of Business |
2. | Basis of Presentation |
3. | Summary of Significant Accounting Policies |
| | September 30, | | | September 30, | |||||||
| | 2019 | | 2018 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
Oil, natural gas and NGL sales | | $10,366 | | $8,441 | | $6,919 | | $10,366 | ||||
Joint interest accounts receivable | | 788 | | 423 | | 1,022 | | 788 | ||||
Realized derivative receivable | | 288 | | — | | 2,187 | | 288 | ||||
Other accounts receivable | | 201 | | 66 | | — | | 201 | ||||
Total accounts receivable | | $11,643 | | $8,930 | | $10,128 | | $11,643 |
| | September 30, | | | September 30, | |||||||
| | 2019 | | 2018 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
Accrued capital expenditures | | $4,786 | | $6,192 | | $2,964 | | $4,786 | ||||
Accrued lease operating expenses | | 3,503 | | 1,246 | | 1,617 | | 3,503 | ||||
Accrued ad valorem tax | | 793 | | 222 | | 680 | | 793 | ||||
Accrued general and administrative costs | | 2,570 | | 7,858 | | 2,125 | | 2,570 | ||||
Accrued interest expense | | 177 | | 172 | | 63 | | 177 | ||||
Accrued dividends on preferred units | | 851 | | 802 | | 903 | | 851 | ||||
Accrued dividends on common units | | 419 | | — | | 95 | | 419 | ||||
Other accrued expenditures | | 78 | | 11 | | 299 | | 78 | ||||
Total accrued liabilities | | $13,177 | | $16,503 | | $8,746 | | $13,177 |
| | September 30, | | | September 30, | |||||||
| | 2019 | | 2018 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
ARO, beginning balance | | $843 | | $76 | | $1,203 | | $843 | ||||
Liabilities incurred | | 140 | | 255 | | 68 | | 140 | ||||
Liabilities acquired | | 215 | | 499 | | 1,161 | | 215 | ||||
Revision of estimated obligations | | 57 | | — | | (45) | | 57 | ||||
Liability settlements and disposals | | (94) | | — | | (131) | | (94) | ||||
Accretion | | 42 | | 13 | | 70 | | 42 | ||||
ARO, ending balance | | $1,203 | | $843 | | 2,326 | | 1,203 | ||||
Less current ARO | | (58) | | — | ||||||||
ARO, long-term | | $2,268 | | $1,203 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Operating revenues: | | | | | | | |||
Oil | | | $74,895 | | | $101,619 | | | $68,336 |
Natural gas | | | (1,267) | | | (288) | | | 402 |
Natural gas liquids | | | (495) | | | (235) | | | 1,134 |
Total operating revenues | | | $73,133 | | | $101,096 | | | $69,872 |
| | Years Ended September 30, | | | Years Ended September 30, | |||||||||||||
| | 2019 | | 2018 | | 2017 | | | 2020 | | 2019 | | 2018 | |||||
| ($ in thousands) | | ($ in thousands) | |||||||||||||||
Business combination acquisition costs | | $1,431 | | $— | | $— | ||||||||||||
Deferred IPO costs | | $4,553 | | $— | | $— | | — | | 4,553 | | — | ||||||
Other | | — | | 878 | | 1,766 | | — | | — | | 878 | ||||||
Total transaction costs | | $4,553 | | $878 | | $1,766 | | $1,431 | | $4,553 | | $878 |
4. | Oil and Natural Gas Properties |
| | September 30, | | | September 30, | |||||||
| | 2019 | | 2018 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
Proved | | $291,226 | | $216,719 | | $326,420 | | $291,226 | ||||
Unproved | | 36,658 | | 41,063 | | 32,084 | | 36,658 | ||||
Work-in-progress | | 3,750 | | 4,287 | | 15,398 | | 3,750 | ||||
| 331,634 | | 262,069 | | 373,902 | | 331,634 | |||||
Accumulated depletion, depreciation and amortization | | (42,333) | | (22,563) | ||||||||
Accumulated depletion and amortization | | (63,176) | | (42,333) | ||||||||
Total oil and natural gas properties, net | | $289,301 | | $239,506 | | $310,726 | | $289,301 |
| | Boomer | | | Bluescape and DR/CM | | | Total | |
Oil and natural gas properties: | | | | | | | |||
Proved | | | $26,962 | | | $26,590 | | | $53,552 |
Unproved | | | 17,695 | | | 17,075 | | | 34,770 |
| | 44,657 | | | 43,665 | | | 88,322 | |
Revenue receivables | | | 1,411 | | | 2,408 | | | 3,819 |
Joint interest payables | | | (4,336) | | | (5,393) | | | (9,729) |
ARO liabilities | | | (16) | | | (17) | | | (33) |
Net assets contributed | | | $41,716 | | | $40,663 | | | $82,379 |
5. | Other Non-Current Assets |
| | September 30, | ||||
| | 2019 | | | 2018 | |
| | ($ in thousands) | ||||
Debt issuance costs | | | $1,039 | | | $1,270 |
Deferred IPO costs | | | — | | | 2,658 |
Prepayments to outside operators | | | 1,560 | | | 557 |
Other deposits | | | 125 | | | 16 |
Total | | | $2,724 | | | $4,501 |
| | September 30, | ||||
| | 2020 | | | 2019 | |
| | ($ in thousands) | ||||
Debt issuance costs, net | | | $1,867 | | | $1,039 |
Prepayments to outside operators | | | 284 | | | 1,560 |
Other deposits | | | 98 | | | 125 |
Total other non-current assets | | | $2,249 | | | $2,724 |
6. | Derivative Instruments |
| | | | Weighted Average Price | ||||||||
Calendar Quarter | | | Notional Volume | | | Fixed | | | Put | | | Call |
| | (Bbl) | | | ($ per Bbl) | |||||||
Crude Oil Swaps | | | | | | | | | ||||
Q4 2019 | | | 431,600 | | | $59.14 | | | $— | | | $— |
Q1 2020 | | | 339,000 | | | $57.52 | | | $— | | | $— |
Q2 2020 | | | 339,000 | | | $57.52 | | | $— | | | $— |
Q3 2020 | | | 297,000 | | | $57.65 | | | $— | | | $— |
Q4 2020 | | | 294,000 | | | $57.62 | | | $— | | | $— |
2021 | | | 1,380,000 | | | $54.49 | | | $— | | | $— |
| | | | | | | | |||||
Crude Oil Collars | | | | | | | | | ||||
Q1 2020 | | | 48,000 | | | $— | | | $50.00 | | | $56.48 |
Q2 2020 | | | 48,000 | | | $— | | | $50.00 | | | $56.76 |
Q3 2020 | | | 45,000 | | | $— | | | $50.00 | | | $56.48 |
Q4 2020 | | | 45,000 | | | $— | | | $50.00 | | | $56.48 |
| | | | | | | | |||||
Crude Oil Basis | | | | | | | | | ||||
Q4 2019 | | | 261,000 | | | $(0.33) | | | $— | | | $— |
Q1 2020 | | | 294,000 | | | $0.12 | | | $— | | | $— |
Q2 2020 | | | 294,000 | | | $0.12 | | | $— | | | $— |
Q3 2020 | | | 294,000 | | | $0.12 | | | $— | | | $— |
Q4 2020 | | | 354,000 | | | $0.23 | | | $— | | | $— |
| | | | Weighted Average Price | ||||||||
Calendar Quarter | | | Notional Volume | | | Fixed | | | Put | | | Call |
| | (Bbl) | | | ($ per Bbl) | |||||||
Crude Oil Swaps | | | | | | | | | ||||
Q4 2020 | | | 339,000 | | | $57.15 | | | $— | | | $— |
Q1 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q2 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q3 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q4 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
2022 | | | 360,000 | | | $45.25 | | | $— | | | $— |
Crude Oil Collars | | | | | | | | | ||||
Q4 2020 | | | 45,000 | | | $— | | | $50.00 | | | $56.48 |
2022 | | | 360,000 | | | $— | | | $35.00 | | | $42.63 |
Crude Oil Basis | | | | | | | | | ||||
Q4 2020 | | | 384,000 | | | $0.39 | | | $— | | | $— |
Q1 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q2 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q3 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q4 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Operating revenues: | | | | | | | |||
Oil | | | $74,895 | | | $101,619 | | | $68,336 |
Natural gas | | | (1,267) | | | (288) | | | 402 |
Natural gas liquids | | | (495) | | | (235) | | | 1,134 |
Total operating revenues | | | $73,133 | | | $101,096 | | | $69,872 |
| | September 30, 2019 | |||||||
Balance Sheet Classification | | | Gross Fair Value | | | Amounts Netted | | | Net Fair Value |
| | ($ in thousands) | |||||||
Derivative assets | | | $7,982 | | | $(479) | | | $7,503 |
Non-current derivative assets | | | 8,135 | | | (199) | | | 7,936 |
Derivative liabilities | | | (807) | | | 479 | | | (328) |
Non-current derivative liabilities | | | (351) | | | 199 | | | (152) |
Total | | | $14,959 | | | $— | | | $14,959 |
| | September 30, 2018 | |||||||
Balance Sheet Classification | | | Gross Fair Value | | | Amounts Netted | | | Net Fair Value |
| | ($ in thousands) | |||||||
Derivative liabilities | | | $9,981 | | | $— | | | $9,981 |
Non-current derivative liabilities | | | 1,258 | | | — | | | 1,258 |
Total | | | $11,239 | | | $— | | | $11,239 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Business combination acquisition costs | | | $1,431 | | | $— | | | $— |
Deferred IPO costs | | | — | | | 4,553 | | | — |
Other | | | — | | | — | | | 878 |
Total transaction costs | | | $1,431 | | | $4,553 | | | $878 |
| | Years Ended September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
| | ($ in thousands) | |||||||
Fair value of net liability beginning of period | | | $(11,239) | | | $(1,623) | | | $— |
Gain (loss) on derivatives | | | 26,712 | | | (17,143) | | | (1,450) |
Settlements on derivatives | | | (514) | | | 7,527 | | | (173) |
Fair value of net asset (liability) end of period | | | $14,959 | | | $(11,239) | | | $(1,623) |
| | September 30, 2019 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | ($ in thousands) | ||||||||||
Financial assets: | | | | | | | | | ||||
Commodity derivative assets | | | $— | | | $16,117 | | | $— | | | $16,117 |
Financial liabilities: | | | | | | | | | ||||
Commodity derivative liabilities | | | $— | | | $(922) | | | $— | | | $(922) |
Interest rate liabilities | | | $— | | | $(236) | | | $— | | | $(236) |
| | September 30, 2018 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | ($ in thousands) | ||||||||||
Financial assets: | | | | | | | | | ||||
Commodity derivative assets | | | $— | | | $— | | | $— | | | $— |
Financial liabilities: | | | | | | | | | ||||
Commodity derivative liabilities | | | $— | | | $(11,239) | | | $— | | | $(11,239) |
| | September 30, | ||||
| | 2020 | | | 2019 | |
| | ($ in thousands) | ||||
Proved | | | $326,420 | | | $291,226 |
Unproved | | | 32,084 | | | 36,658 |
Work-in-progress | | | 15,398 | | | 3,750 |
| | 373,902 | | | 331,634 | |
Accumulated depletion and amortization | | | (63,176) | | | (42,333) |
Total oil and natural gas properties, net | | | $310,726 | | | $289,301 |
5. | Other Non-Current Assets |
| | September 30, | ||||
| | 2020 | | | 2019 | |
| | ($ in thousands) | ||||
Debt issuance costs, net | | | $1,867 | | | $1,039 |
Prepayments to outside operators | | | 284 | | | 1,560 |
Other deposits | | | 98 | | | 125 |
Total other non-current assets | | | $2,249 | | | $2,724 |
6. | Derivative Instruments |
| | Units | | | Amount | |
| | ($ in thousands) | ||||
Balance, September 30, 2016 | | | — | | | $— |
Issuance of preferred units | | | 416,667 | | | 50,000 |
Deferred financing costs | | | — | | | (207) |
Balance, September 30, 2017 | | | 416,667 | | | 49,793 |
Dividends paid in kind | | | 31,142 | | | 3,736 |
Balance, September 30, 2018 | | | 447,809 | | | 53,529 |
Dividends paid in kind | | | 27,343 | | | 3,281 |
Balance September 30, 2019 | | | 475,152 | | | $56,810 |
| | Years Ended September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
Net income (loss) attributable to common unitholders (in thousands) | | | $48,536 | | | $(3,852) | | | $(13,383) |
Basic weighted-average common units outstanding | | | 1,522,883 | | | 1,500,000 | | | 1,151,000 |
Effecting of dilutive securities: | | | | | | | |||
Series A preferred units | | | 462,493 | | | — | | | — |
Restricted units | | | 6,822 | | | — | | | — |
Diluted weighted-average common units outstanding | | | 1,992,198 | | | 1,500,000 | | | 1,151,000 |
Net income (loss) per unit: | | | | | | | |||
Basic | | | $31.87 | | | $(2.57) | | | $(11.63) |
Diluted | | | $26.03 | | | $(2.57) | | | $(11.63) |
| | | | Weighted Average Price | ||||||||
Calendar Quarter | | | Notional Volume | | | Fixed | | | Put | | | Call |
| | (Bbl) | | | ($ per Bbl) | |||||||
Crude Oil Swaps | | | | | | | | | ||||
Q4 2020 | | | 339,000 | | | $57.15 | | | $— | | | $— |
Q1 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q2 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q3 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
Q4 2021 | | | 405,000 | | | $53.01 | | | $— | | | $— |
2022 | | | 360,000 | | | $45.25 | | | $— | | | $— |
Crude Oil Collars | | | | | | | | | ||||
Q4 2020 | | | 45,000 | | | $— | | | $50.00 | | | $56.48 |
2022 | | | 360,000 | | | $— | | | $35.00 | | | $42.63 |
Crude Oil Basis | | | | | | | | | ||||
Q4 2020 | | | 384,000 | | | $0.39 | | | $— | | | $— |
Q1 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q2 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q3 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
Q4 2021 | | | 435,000 | | | $0.40 | | | $— | | | $— |
| | Year Ended September 30, 2019 | |||||||
| | Under ASC 606 | | | Under ASC 605 | | | Change | |
| | ($ in thousands) | |||||||
Operating revenues: | | | | | | | |||
Oil and natural gas sales, net | | | $101,096 | | | $104,494 | | | $3,398 |
Operating expenses: | | | | | | | |||
Gathering, processing and transportation | | | — | | | 3,398 | | | 3,398 |
Net income | | | $101,096 | | | $101,096 | | | $— |
| | Years Ended September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
| | ($ in thousands) | |||||||
Operating revenues: | | | | | | | |||
Oil | | | $101,619 | | | $68,336 | | | $21,174 |
Natural gas | | | (288) | | | 402 | | | 203 |
Natural gas liquids | | | (235) | | | 1,134 | | | 431 |
Total operating revenues | | | $101,096 | | | $69,872 | | | $21,808 |
2. | Basis of Presentation |
| | September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
| | ($ in thousands) | |||||||
Acquisition of properties | | | | | | | |||
Proved | | | $1,962 | | | $5,887 | | | $53,552 |
Unproved | | | 8,604 | | | 14,002 | | | 34,770 |
Exploration costs | | | 5,074 | | | 5,992 | | | 11,882 |
Development costs | | | 64,127 | | | 68,765 | | | 51,871 |
Total costs incurred | | | $79,767 | | | $94,646 | | | $152,075 |
| | September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
| | ($ in thousands) | |||||||
Oil, natural gas and NGL sales | | | $101,096 | | | $69,872 | | | $21,808 |
Lease operating expenses | | | 23,808 | | | 11,044 | | | 5,796 |
Gathering, processing & transportation | | | — | | | 735 | | | — |
Production taxes | | | 4,804 | | | 3,207 | | | 1,206 |
Exploration costs | | | 5,074 | | | 5,992 | | | 11,882 |
Depreciation, depletion, accretion and amortization | | | 20,182 | | | 15,714 | | | 5,876 |
Results of operations | | | $47,228 | | | $33,180 | | | $(2,952) |
| | Crude Oil | | | Natural Gas | | | NGLs | | | Total | |
| | (Mbbl) | | | (MMcf) | | | (Mbbl) | | | (Mboe) | |
September 30, 2016 | | | 2,904.3 | | | 1,030.8 | | | 278.5 | | | 3,354.6 |
Extensions, discoveries and other additions | | | 2,575.4 | | | 967.6 | | | 205.8 | | | 2,942.5 |
Acquisitions | | | 4,732.2 | | | 1,677.1 | | | 452.8 | | | 5,464.5 |
Revisions | | | 2,283.5 | | | 1,221.4 | | | 263.4 | | | 2,750.5 |
Production | | | (469.5) | | | (76.4) | | | (21.2) | | | (503.5) |
September 30, 2017 | | | 12,025.9 | | | 4,820.5 | | | 1,179.3 | | | 14,008.6 |
Extensions, discoveries and other additions | | | 9,829.0 | | | 4,721.0 | | | 990.6 | | | 11,606.4 |
Acquisitions | | | 1,361.1 | | | 379.6 | | | 81.3 | | | 1,505.7 |
Revisions | | | 1,613.9 | | | 2,355.4 | | | 235.0 | | | 2,241.5 |
Production | | | (1,187.5) | | | (198.1) | | | (40.5) | | | (1,261.0) |
September 30, 2018 | | | 23,642.4 | | | 12,078.4 | | | 2,445.7 | | | 28,101.2 |
Extensions, discoveries and other additions | | | 13,669.5 | | | 13,658.2 | | | 3,633.5 | | | 19,579.4 |
Acquisitions | | | 258.5 | | | 127.6 | | | 34.2 | | | 314.0 |
Revisions | | | 1,563.5 | | | 16,013.4 | | | 4,833.8 | | | 9,066.2 |
Production | | | (1,975.0) | | | (886.2) | | | (135.0) | | | (2,257.7) |
September 30, 2019 | | | 37,158.9 | | | 40,991.4 | | | 10,812.2 | | | 54,803.1 |
| | | | | | | | |||||
Proved Developed Reserves, Included Above | | | | | | | | | ||||
September 30, 2017 | | | 7,064.4 | | | 2,814.3 | | | 692.1 | | | 8,225.5 |
September 30, 2018 | | | 13,764.0 | | | 7,481.0 | | | 1,485.8 | | | 16,496.6 |
September 30, 2019 | | | 19,197.6 | | | 23,096.0 | | | 6,044.9 | | | 29,091.8 |
| | | | | | | | |||||
Proved Undeveloped Reserves, Included Above | | | | | | | | | ||||
September 30, 2017 | | | 4,961.5 | | | 2,006.2 | | | 487.2 | | | 5,783.1 |
September 30, 2018 | | | 9,878.4 | | | 4,597.4 | | | 959.9 | | | 11,604.6 |
September 30, 2019 | | | 17,961.3 | | | 17,895.4 | | | 4,767.3 | | | 25,711.3 |
| | September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
| | ($ in thousands) | |||||||
Future crude oil, natural gas and NGLs sales(1)(2)(3) | | | $1,951,657 | | | $1,413,978 | | | $562,349 |
Future production costs | | | (555,124) | | | (342,782) | | | (156,563) |
Future development costs | | | (164,036) | | | (90,357) | | | (42,849) |
Future income tax expense(4) | | | (4,059) | | | (7,423) | | | (2,953) |
Future net cash flows | | | 1,228,438 | | | 973,416 | | | 359,984 |
10% annual discount | | | (786,226) | | | (591,393) | | | (216,797) |
Standardized measure of discounted future net cash flows | | | $442,212 | | | $382,023 | | | $143,187 |
| | Years Ended September 30, | |||||||
| | 2019 | | | 2018 | | | 2017 | |
| | ($ in thousands) | |||||||
Balance, beginning of period | | | $382,023 | | | $143,187 | | | $19,124 |
Sales of crude oil, natural gas and NGLs, net | | | (85,921) | | | (58,093) | | | (15,223) |
Net change in prices and production costs | | | (133,615) | | | 64,892 | | | 18,491 |
Net changes in future development costs | | | (1,226) | | | (137) | | | (1,307) |
Extensions, discoveries and other additions | | | 135,350 | | | 143,389 | | | 29,241 |
Acquisition of reserves | | | 1,294 | | | 16,505 | | | 43,718 |
Revisions of previous quantity estimates | | | 85,381 | | | 36,093 | | | 28,676 |
Previously estimated development costs incurred | | | 20,769 | | | 20,621 | | | 4,491 |
Net change in income taxes | | | (987) | | | (1,863) | | | 81 |
Accretion of discount | | | 38,509 | | | 14,439 | | | 4,792 |
Other | | | 635 | | | 2,990 | | | 11,103 |
Balance, end of period | | | $442,212 | | | $382,023 | | | $143,187 |
| | 2019 First Quarter | | | 2019 Second Quarter | | | 2019 Third Quarter | | | 2019 Fourth Quarter | |
| | ($ in thousands except per share data) | ||||||||||
Total revenues | | | $21,979 | | | $23,527 | | | $26,207 | | | $29,383 |
Income from operations | | | $3,941 | | | $9,016 | | | $9,223 | | | $9,308 |
Net income (loss) | | | $21,735 | | | $(4,990) | | | $13,587 | | | $21,534 |
Net income (loss) attributable to common unitholders | | | $20,921 | | | $(5,816) | | | $12,748 | | | $20,683 |
Net income (loss) per common unit: | | | | | | | | | ||||
Basic | | | $13.86 | | | $(3.81) | | | $8.35 | | | $13.54 |
Diluted | | | $11.07 | | | $(3.81) | | | $6.80 | | | $10.74 |
| | 2018 First Quarter | | | 2018 Second Quarter | | | 2018 Third Quarter | | | 2018 Fourth Quarter | |
| | ($ in thousands except per share data) | ||||||||||
Total revenues | | | $12,242 | | | $16,759 | | | $18,597 | | | $22,274 |
Income from operations | | | 2,750 | | | 5,002 | | | 1,223 | | | 9,152 |
Net income (loss) | | | (2,466) | | | 1,899 | | | (5,260) | | | 5,104 |
Net income (loss) attributable to common unitholders | | | (3,241) | | | 1,137 | | | (6,050) | | | 4,302 |
Net income (loss) per common unit: | | | | | | | | | ||||
Basic | | | $(2.16) | | | $0.76 | | | $(4.03) | | | $2.87 |
Diluted | | | $(2.16) | | | $0.76 | | | $(4.03) | | | $2.61 |
| | June 30, 2020 | | | September 30, 2019 | |
Assets | | | | | ||
Current Assets: | | | | | ||
Cash and cash equivalents | | | $918 | | | $3,726 |
Accounts receivable | | | 6,000 | | | 11,643 |
Accounts receivable – related parties | | | 345 | | | 504 |
Prepaid expenses and other current assets | | | 1,767 | | | 1,410 |
Current derivative assets | | | 23,210 | | | 7,503 |
Total Current Assets | | | 32,240 | | | 24,786 |
| | | | |||
Non-Current Assets: | | | | | ||
Oil and natural gas properties, net (successful efforts) | | | 310,920 | | | 289,301 |
Other property and equipment, net | | | 1,852 | | | 2,000 |
Right of use assets | | | 795 | | | — |
Non-current derivative assets | | | 8,587 | | | 7,936 |
Other non-current assets | | | 1,208 | | | 2,724 |
Total Non-Current Assets | | | 323,362 | | | 301,961 |
Total Assets | | | $355,602 | | | $326,747 |
| | | | |||
Liabilities and Members' Equity | | | | | ||
Current Liabilities: | | | | | ||
Accounts payable | | | $1,768 | | | $2,422 |
Accrued liabilities | | | 7,309 | | | 13,177 |
Current lease liability | | | 385 | | | — |
Revenue payable | | | 3,317 | | | 4,516 |
Advances from joint interest owners | | | 243 | | | 362 |
Current derivative liabilities | | | — | | | 328 |
Total Current Liabilities | | | 13,022 | | | 20,805 |
| | | | |||
Non-Current Liabilities: | | | | | ||
Non-current derivative liabilities | | | — | | | 152 |
Asset retirement obligations | | | 2,303 | | | 1,203 |
Revolving credit facility | | | 104,000 | | | 97,000 |
Deferred tax liabilities | | | 1,573 | | | 1,333 |
Non-current lease liability | | | 416 | | | — |
Other non-current liabilities | | | 78 | | | 61 |
Total Non-Current Liabilities | | | 108,370 | | | 99,749 |
Total Liabilities | | | 121,392 | | | 120,554 |
| | | | |||
Series A Preferred Units | | | 59,402 | | | 56,810 |
Members' Equity | | | 174,808 | | | 149,383 |
Total Liabilities and Members' Equity | | | $355,602 | | | $326,747 |
| | September 30, | ||||
| | 2020 | | | 2019 | |
| | ($ in thousands) | ||||
Oil, natural gas and NGL sales | | | $6,919 | | | $10,366 |
Joint interest accounts receivable | | | 1,022 | | | 788 |
Realized derivative receivable | | | 2,187 | | | 288 |
Other accounts receivable | | | — | | | 201 |
Total accounts receivable | | | $10,128 | | | $11,643 |
| | Three Months Ended June 30, | | | Nine Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Revenues: | | | | | | | | | ||||
Oil and natural gas sales, net | | | $4,969 | | | $26,207 | | | $57,824 | | | $71,713 |
Contract services – related parties | | | 1,050 | | | 900 | | | 3,150 | | | 900 |
Total Revenues | | | 6,019 | | | 27,107 | | | 60,974 | | | 72,613 |
Costs and Expenses: | | | | | | | | | ||||
Lease operating expenses | | | 3,760 | | | 6,917 | | | 15,517 | | | 15,732 |
Production taxes | | | 293 | | | 1,267 | | | 2,808 | | | 3,409 |
Exploration costs | | | 6,757 | | | 1,061 | | | 9,231 | | | 3,227 |
Depletion, depreciation, amortization and accretion | | | 5,028 | | | 5,402 | | | 16,020 | | | 14,870 |
General and administrative: | | | | | | | | | ||||
Administrative costs | | | 1,936 | | | 3,136 | | | 8,669 | | | 8,960 |
Unit-based compensation expense | | | 291 | | | 101 | | | 650 | | | 745 |
Cost of contract services – related parties | | | 97 | | | — | | | 403 | | | — |
Transaction costs | | | 15 | | | — | | | 42 | | | 3,490 |
Total Costs and Expenses | | | 18,177 | | | 17,884 | | | 53,340 | | | 50,433 |
Income (Loss) From Operations | | | (12,158) | | | 9,223 | | | 7,634 | | | 22,180 |
Other Income (Expense): | | | | | | | | | ||||
Interest expense | | | (1,302) | | | (1,369) | | | (4,086) | | | (3,545) |
Gain (loss) on derivatives | | | (14,205) | | | 5,733 | | | 36,999 | | | 11,697 |
Total Other Income (Expense) | | | (15,507) | | | 4,364 | | | 32,913 | | | 8,152 |
Net Income (Loss) Before Income Taxes | | | (27,665) | | | 13,587 | | | 40,547 | | | 30,332 |
Income tax expense | | | (319) | | | — | | | (319) | | | — |
Net Income (Loss) | | | (27,984) | | | 13,587 | | | 40,228 | | | 30,332 |
Dividends on preferred units | | | (890) | | | (839) | | | (2,631) | | | (2,479) |
Net Income (Loss) Attributable to Common Unitholders | | | $(28,874) | | | $12,748 | | | $37,597 | | | $27,853 |
Net Income (Loss) per Unit: | | | | | | | | | ||||
Basic | | | $(18.87) | | | $8.35 | | | $24.60 | | | $18.31 |
Diluted | | | $(18.87) | | | $6.80 | | | $19.86 | | | $15.28 |
Weighted Average Common Units Outstanding: | | | | | | | | | ||||
Basic | | | 1,530 | | | 1,527 | | | 1,528 | | | 1,521 |
Diluted | | | 1,530 | | | 1,998 | | | 2,025 | | | 1,985 |
| | Members' Equity | ||||
| | Units Outstanding | | | Amount | |
For the Nine Months Ended June 30, 2019 | | | | | ||
Balance, September 30, 2018 | | | 1,500 | | | $107,399 |
Issuance of common units under long-term incentive plan | | | 40 | | | 4,000 |
Purchase of common units under long-term incentive plan | | | (13) | | | (1,456) |
Dividends on preferred units | | | — | | | (814) |
Unit-based compensation expense | | | — | | | 644 |
Net income | | | — | | | 21,735 |
Balance, December 31, 2018 | | | 1,527 | | | $131,508 |
Dividends on preferred units | | | — | | | (826) |
Net loss | | | — | | | (4,990) |
Balance, March 31, 2019 | | | 1,527 | | | $125,692 |
Dividends on preferred units | | | — | | | (839) |
Dividends on common units | | | — | | | (4,997) |
Unit-based compensation expense | | | — | | | 101 |
Net income | | | — | | | 13,587 |
Balance, June 30, 2019 | | | 1,527 | | | $133,544 |
| | | | |||
For the Nine Months Ended June 30, 2020 | | | | | ||
Balance, September 30, 2019 | | | 1,527 | | | $149,383 |
Issuance of common units under long-term incentive plan | | | 15 | | | — |
Purchase of common units under long-term incentive plan | | | (2) | | | (194) |
Dividends on preferred units | | | — | | | (864) |
Dividends on common units | | | — | | | (4,997) |
Unit-based compensation expense | | | — | | | 153 |
Net loss | | | — | | | (6,841) |
Balance, December 31, 2019 | | | 1,540 | | | $136,640 |
Issuance of common units under long-term incentive plan | | | 16 | | | — |
Purchase of common units under long-term incentive plan | | | (1) | | | (124) |
Dividends on preferred units | | | — | | | (877) |
Dividends on common units | | | — | | | (4,988) |
Unit-based compensation expense | | | — | | | 206 |
Net income | | | — | | | 75,053 |
Balance, March 31, 2020 | | | 1,555 | | | $205,910 |
Purchase of common units under long-term incentive plan | | | — | | | (4) |
Dividends on preferred units | | | — | | | (890) |
Dividends on common units | | | — | | | (2,515) |
Unit-based compensation expense | | | — | | | 291 |
Net loss | | | — | | | (27,984) |
Balance, June 30, 2020 | | | 1,555 | | | $174,808 |
| | September 30, | ||||
| | 2020 | | | 2019 | |
| | ($ in thousands) | ||||
Accrued capital expenditures | | | $2,964 | | | $4,786 |
Accrued lease operating expenses | | | 1,617 | | | 3,503 |
Accrued ad valorem tax | | | 680 | | | 793 |
Accrued general and administrative costs | | | 2,125 | | | 2,570 |
Accrued interest expense | | | 63 | | | 177 |
Accrued dividends on preferred units | | | 903 | | | 851 |
Accrued dividends on common units | | | 95 | | | 419 |
Other accrued expenditures | | | 299 | | | 78 |
Total accrued liabilities | | | $8,746 | | | $13,177 |
| | Nine Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Cash Flows from Operating Activities: | | | | | ||
Net income | | | $40,228 | | | $30,332 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | ||
Oil and gas lease abandonments | | | 7,288 | | | 3,213 |
Depletion, depreciation, amortization and accretion | | | 16,020 | | | 14,870 |
Gain on derivatives | | | (36,999) | | | (11,697) |
Settlements on derivative contracts | | | 20,161 | | | (217) |
Amortization of debt issuance costs | | | 484 | | | 372 |
Write-off of previously deferred IPO costs | | | — | | | 2,658 |
Unit-based compensation expense | | | 650 | | | 745 |
Deferred income tax expense | | | 319 | | | — |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | 5,643 | | | (996) |
Accounts receivable – related parties | | | 159 | | | (769) |
Prepaid expenses and other current assets | | | (424) | | | (896) |
Other non-current assets | | | 82 | | | (908) |
Accounts payable and accrued liabilities | | | (2,784) | | | 136 |
Revenue payable | | | (1,199) | | | 1,049 |
Advances from joint interest owners | | | (119) | | | (198) |
Net Cash Provided By Operating Activities | | | 49,509 | | | 37,694 |
Cash Flows From Investing Activities: | | | | | ||
Additions to oil and natural gas properties | | | (41,228) | | | (65,113) |
Acquisitions of oil and natural gas properties | | | (4,806) | | | (4,023) |
Additions to other property and equipment | | | (168) | | | (337) |
Net Cash Used In Investing Activities | | | (46,202) | | | (69,473) |
Cash Flows From Financing Activities: | | | | | ||
Debt issuance costs | | | (293) | | | — |
Net proceeds from revolving credit facility | | | 7,000 | | | 37,229 |
Payment of common unit dividends | | | (12,500) | | | (4,997) |
Purchase of common units under long-term incentive plan | | | (322) | | | — |
Net Cash Provided By Financing Activities | | | (6,115) | | | 32,232 |
| | | | |||
Net Increase (Decrease) in Cash and Cash Equivalents | | | (2,808) | | | 453 |
| | | | |||
Cash and Cash Equivalents, Beginning of Period | | | 3,726 | | | 3,339 |
Cash and Cash Equivalents, End of Period | | | $918 | | | $3,792 |
| | September 30, | ||||
| | 2020 | | | 2019 | |
| | ($ in thousands) | ||||
ARO, beginning balance | | | $1,203 | | | $843 |
Liabilities incurred | | | 68 | | | 140 |
Liabilities acquired | | | 1,161 | | | 215 |
Revision of estimated obligations | | | (45) | | | 57 |
Liability settlements and disposals | | | (131) | | | (94) |
Accretion | | | 70 | | | 42 |
ARO, ending balance | | | 2,326 | | | 1,203 |
Less current ARO | | | (58) | | | — |
ARO, long-term | | | $2,268 | | | $1,203 |
| | Nine Months Ended June 30, | ||||
| | 2020 | | | 2019 | |
Supplemental Disclosure of Cash Flow Information | | | | | ||
Cash Paid For: | | | | | ||
Interest | | | $3,129 | | | $2,977 |
Non-Cash Investing and Financing Activities: | | | | | ||
Changes in capital expenditures in accounts payable and accrued liabilities | | | (3,838) | | | 2,888 |
Asset retirement obligations | | | 924 | | | 370 |
Issuance of common units under long-term incentive plan | | | — | | | 4,000 |
Preferred unit dividends paid in kind | | | 2,592 | | | 2,442 |
Preferred unit dividends | | | 2,631 | | | 2,479 |
2. | Basis of Presentation |
3. | Summary of Significant Accounting Policies |
| | September 30, | ||||||||||
| | June 30, 2020 | | September 30, 2019 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
Oil, natural gas and NGL sales | | $1,507 | | $10,366 | | $6,919 | | $10,366 | ||||
Joint interest accounts receivable | | 858 | | 788 | | 1,022 | | 788 | ||||
Realized derivative receivable | | 3,633 | | 288 | | 2,187 | | 288 | ||||
Other accounts receivable | | 2 | | 201 | | — | | 201 | ||||
Total accounts receivable | | $6,000 | | $11,643 | | $10,128 | | $11,643 |
| | September 30, | ||||||||||
| | June 30, 2020 | | September 30, 2019 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
Accrued capital expenditures | | $1,656 | | $4,786 | | $2,964 | | $4,786 | ||||
Accrued lease operating expenses | | 1,815 | | 3,503 | | 1,617 | | 3,503 | ||||
Accrued ad valorem tax | | 454 | | 793 | | 680 | | 793 | ||||
Accrued general and administrative expenses | | 1,846 | | 2,570 | ||||||||
Accrued general and administrative costs | | 2,125 | | 2,570 | ||||||||
Accrued interest expense | | 359 | | 177 | | 63 | | 177 | ||||
Accrued dividends on preferred units | | 890 | | 851 | | 903 | | 851 | ||||
Accrued dividends on common units | | 83 | | 419 | | 95 | | 419 | ||||
Other accrued expenditures | | 206 | | 78 | | 299 | | 78 | ||||
Total accrued liabilities | | $7,309 | | $13,177 | | $8,746 | | $13,177 |
| | September 30, | ||||||||||
| | June 30, 2020 | | September 30, 2019 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
ARO, beginning balance | | $1,203 | | $843 | | $1,203 | | $843 | ||||
Liabilities incurred | | 68 | | 140 | | 68 | | 140 | ||||
Liabilities acquired | | 1,161 | | 215 | | 1,161 | | 215 | ||||
Revision of estimated obligations | | (45) | | 57 | | (45) | | 57 | ||||
Liability settlements and disposals | | (131) | | (94) | | (131) | | (94) | ||||
Accretion | | 47 | | 42 | | 70 | | 42 | ||||
ARO, ending balance | | $2,303 | | $1,203 | | 2,326 | | 1,203 | ||||
Less current ARO | | (58) | | — | ||||||||
ARO, long-term | | $2,268 | | $1,203 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Operating revenues: | | | | | | | |||
Oil | | | $74,895 | | | $101,619 | | | $68,336 |
Natural gas | | | (1,267) | | | (288) | | | 402 |
Natural gas liquids | | | (495) | | | (235) | | | 1,134 |
Total operating revenues | | | $73,133 | | | $101,096 | | | $69,872 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Business combination acquisition costs | | | $1,431 | | | $— | | | $— |
Deferred IPO costs | | | — | | | 4,553 | | | — |
Other | | | — | | | — | | | 878 |
Total transaction costs | | | $1,431 | | | $4,553 | | | $878 |
4. | Oil and Natural Gas Properties |
| | September 30, | ||||||||||
| | June 30, 2020 | | September 30, 2019 | | | 2020 | | 2019 | |||
| ($ in thousands) | | ($ in thousands) | |||||||||
Proved | | $319,470 | | $291,226 | | $326,420 | | $291,226 | ||||
Unproved | | 31,388 | | 36,658 | | 32,084 | | 36,658 | ||||
Work-in-progress | | 17,921 | | 3,750 | | 15,398 | | 3,750 | ||||
| 368,779 | | 331,634 | | 373,902 | | 331,634 | |||||
Accumulated depletion, depreciation and amortization | | (57,859) | | (42,333) | ||||||||
Accumulated depletion and amortization | | (63,176) | | (42,333) | ||||||||
Total oil and natural gas properties, net | | $310,920 | | $289,301 | | $310,726 | | $289,301 |
5. | Other Non-Current Assets |
| | June 30, 2020 | | | September 30, 2019 | |
| | ($ in thousands) | ||||
Debt issuance costs | | | $848 | | | $1,039 |
Prepayments to outside operators | | | 244 | | | 1,560 |
Other deposits | | | 116 | | | 125 |
Total other non-current assets | | | $1,208 | | | $2,724 |
| | September 30, | ||||
| | 2020 | | | 2019 | |
| | ($ in thousands) | ||||
Debt issuance costs, net | | | $1,867 | | | $1,039 |
Prepayments to outside operators | | | 284 | | | 1,560 |
Other deposits | | | 98 | | | 125 |
Total other non-current assets | | | $2,249 | | | $2,724 |
6. | Derivative Instruments |
| | | Weighted Average Price | | | | Weighted Average Price | |||||||||||||||||
Calendar Quarter | | Notional Volume | | Fixed | | Put | | Call | | Notional Volume | | Fixed | | Put | | Call | ||||||||
| (Bbl) | | ($ per Bbl) | | (Bbl) | | ($ per Bbl) | |||||||||||||||||
Crude Oil Swaps | | | | | | | | | ||||||||||||||||
Q3 2020 | | 285,000 | | $52.98 | | $— | | $— | ||||||||||||||||
Q4 2020 | | 339,000 | | $57.15 | | $— | | $— | | 339,000 | | $57.15 | | $— | | $— | ||||||||
2021 | | 1,380,000 | | $54.49 | | $— | | $— | ||||||||||||||||
| | | | |||||||||||||||||||||
Q1 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q2 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q3 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
Q4 2021 | | 405,000 | | $53.01 | | $— | | $— | ||||||||||||||||
2022 | | 360,000 | | $45.25 | | $— | | $— | ||||||||||||||||
Crude Oil Collars | | | | | | | | | ||||||||||||||||
Q3 2020 | | 45,000 | | $— | | $50.00 | | $56.48 | ||||||||||||||||
Q4 2020 | | 45,000 | | $— | | $50.00 | | $56.48 | | 45,000 | | $— | | $50.00 | | $56.48 | ||||||||
2021 | | — | | $— | | $— | | $— | ||||||||||||||||
2022 | | 360,000 | | $— | | $35.00 | | $42.63 | | 360,000 | | $— | | $35.00 | | $42.63 | ||||||||
| | | | |||||||||||||||||||||
Crude Oil Basis | | | | | | | | | ||||||||||||||||
Q3 2020 | | 384,000 | | $0.25 | | $— | | $— | ||||||||||||||||
Q4 2020 | | 384,000 | | $0.39 | | $— | | $— | | 384,000 | | $0.39 | | $— | | $— | ||||||||
2021 | | 1,740,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q1 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q2 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q3 2021 | | 435,000 | | $0.40 | | $— | | $— | ||||||||||||||||
Q4 2021 | | 435,000 | | $0.40 | | $— | | $— |
| | June 30, 2020 | |||||||
Balance Sheet Classification | | | Gross Fair Value | | | Amounts Netted | | | Net Fair Value |
| | ($ in thousands) | |||||||
Derivative assets | | | $24,060 | | | $(850) | | | $23,210 |
Non-current derivative assets | | | 9,750 | | | (1,163) | | | 8,587 |
Derivative liabilities | | | (850) | | | 850 | | | — |
Non-current derivative liabilities | | | (1,163) | | | 1,163 | | | — |
Total | | | $31,797 | | | $— | | | $31,797 |
| | September 30, 2019 | |||||||
Balance Sheet Classification | | | Gross Fair Value | | | Amounts Netted | | | Net Fair Value |
| | ($ in thousands) | |||||||
Derivative assets | | | $7,982 | | | $(479) | | | $7,503 |
Non-current derivative assets | | | 8,135 | | | (199) | | | 7,936 |
Derivative liabilities | | | (807) | | | 479 | | | (328) |
Non-current derivative liabilities | | | (351) | | | 199 | | | (152) |
Total | | | $14,959 | | | $— | | | $14,959 |
| | September 30, 2020 | |||||||
Balance Sheet Classification | | | Gross Fair Value | | | Amounts Netted | | | Net Fair Value |
| | ($ in thousands) | |||||||
Current derivative assets | | | $19,690 | | | $(871) | | | $18,819 |
Non-current derivative assets | | | 4,651 | | | (1,549) | | | 3,102 |
Current derivative liabilities | | | (871) | | | 871 | | | — |
Non-current derivative liabilities | | | (1,549) | | | 1,549 | | | — |
Total | | | $21,921 | | | $— | | | $21,921 |
| | September 30, 2019 | |||||||
Balance Sheet Classification | | | Gross Fair Value | | | Amounts Netted | | | Net Fair Value |
| | ($ in thousands) | |||||||
Current derivative assets | | | $7,982 | | | $(479) | | | $7,503 |
Non-current derivative assets | | | 8,135 | | | (199) | | | 7,936 |
Current derivative liabilities | | | (807) | | | 479 | | | (328) |
Non-current derivative liabilities | | | (351) | | | 199 | | | (152) |
Total | | | $14,959 | | | $— | | | $14,959 |
| | Three Months Ended June 30, | | Nine Months Ended June 30, | | | Years Ended September 30, | ||||||||||||||
| | 2020 | | 2019 | | 2020 | | 2019 | | | 2020 | | 2019 | | 2018 | ||||||
| ($ in thousands) | | ($ in thousands) | | ($ in thousands) | ||||||||||||||||
Fair value of net asset (liability) beginning of period | | $60,672 | | $(5,515) | | $14,959 | | $(11,239) | |||||||||||||
Fair value of net asset (liability), beginning of period | | $14,959 | | $(11,239) | | $(1,623) | |||||||||||||||
Gain (loss) on derivatives | | (14,205) | | 5,733 | | 36,999 | | 11,697 | | 33,876 | | 26,712 | | (17,143) | |||||||
Settlements on derivatives | | (14,670) | | 457 | | (20,161) | | 217 | | (26,914) | | (514) | | 7,527 | |||||||
Fair value of net asset end of period | | $31,797 | | $675 | | $31,797 | | $675 | |||||||||||||
Fair value of net asset (liability), end of period | | $21,921 | | $14,959 | | $(11,239) |
7. | Fair Value Measurements |
| | June 30, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | ($ in thousands) | ||||||||||
Financial assets: | | | | | | | | | ||||
Commodity derivative assets | | | $— | | | $33,810 | | | $— | | | $33,810 |
Financial liabilities: | | | | | | | | | ||||
Commodity derivative liabilities | | | — | | | (1,079) | | | — | | | (1,079) |
Interest rate liabilities | | | $— | | | $(934) | | | $— | | | $(934) |
| | September 30, 2019 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | ($ in thousands) | ||||||||||
Financial assets: | | | | | | | | | ||||
Commodity derivative assets | | | $— | | | $16,117 | | | $— | | | $16,117 |
Financial liabilities: | | | | | | | | | ||||
Commodity derivative liabilities | | | — | | | (922) | | | — | | | (922) |
Interest rate liabilities | | | $— | | | $(236) | | | $— | | | $(236) |
| | September 30, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | ($ in thousands) | ||||||||||
Financial assets: | | | | | | | | | ||||
Commodity derivative assets | | | $ — | | | $ 24,341 | | | $ — | | | $ 24,341 |
Financial liabilities: | | | | | | | | | ||||
Commodity derivative liabilities | | | $ — | | | $(1,672) | | | $ — | | | $(1,672) |
Interest rate liabilities | | | $ — | | | $(748) | | | $ — | | | $(748) |
| | September 30, 2019 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | ($ in thousands) | ||||||||||
Financial assets: | | | | | | | | | ||||
Commodity derivative assets | | | $ — | | | $ 16,117 | | | $ — | | | $ 16,117 |
Financial liabilities: | | | | | | | | | ||||
Commodity derivative liabilities | | | $ — | | | $(922) | | | $ — | | | $(922) |
Interest rate liabilities | | | $ — | | | $(236 | | | $ — | | | $(236) |
8. | Transactions with Related Parties |
| | Three Months Ended June 30, | | | Nine Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| | ($ in thousands) | | | ($ in thousands) | |||||||
Combo | | | $750 | | | $750 | | | $2,250 | | | $750 |
REG | | | 300 | | | 150 | | | 900 | | | 150 |
Contract services - related parties | | | $1,050 | | | $900 | | | $3,150 | | | $900 |
| | June 30, 2020 | | | September 30, 2019 | |
| | ($ in thousands) | ||||
Combo | | | $345 | | | $343 |
REG | | | — | | | 161 |
Accounts receivable - related parties | | | $345 | | | $504 |
9. | Leases |
| | Three Months Ended June 30, 2020 | | | Nine Months Ended June 30, 2020 | |
| | ($ in thousands) | ||||
Cash paid for amounts included in the measurement of lease liabilities | | | $103 | | | $306 |
ROU assets added in exchange for lease obligations (since adoption) | | | — | | | 40 |
| | September 30, 2020 | |
| | ($ in thousands) | |
Cash paid for amounts included in the measurement of lease liabilities | | | $410 |
ROU assets added in exchange for lease obligations (since adoption) | | | 40 |
| | ||
Weighted Average Remaining Lease Term | | | |
Weighted Average Discount Rate | | | 5.17% |
| | Operating Leases | |
| | ($ in thousands) | |
Remainder of Fiscal Year (Through September 30, 2020) | | | $105 |
2021 | | | 419 |
2022 | | | 320 |
2023 | | | 1 |
Thereafter | | | — |
Total future minimum lease payments | | | 845 |
Less imputed interest | | | (44) |
Present value of future minimum lease payments | | | $801 |
| | Operating Leases | |
| | ($ in thousands) | |
2021 | | | $419 |
2022 | | | 320 |
2023 | | | 1 |
Thereafter | | | — |
Total future minimum lease payments | | | 740 |
Less imputed interest | | | (34) |
Present value of future minimum lease payments | | | $706 |
| | Operating Leases | |
| | ($ in thousands) | |
Fiscal Year 2020 | | | $389 |
Fiscal Year 2021 | | | 378 |
Fiscal Year 2022 | | | 288 |
Thereafter | | | — |
Total future minimum lease payments | | | $1,055 |
10. | Revolving Credit Facility |
| | Three Months Ended June 30, | | | Nine Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| | ($ in thousands) | | | ($ in thousands) | |||||||
Interest expense | | | $1,084 | | | $1,193 | | | $3,403 | | | $3,013 |
Amortization of debt issuance costs | | | 166 | | | 130 | | | 484 | | | 372 |
Unused commitment fees | | | 52 | | | 46 | | | 199 | | | 160 |
Total interest expense | | | $1,302 | | | $1,369 | | | $4,086 | | | $3,545 |
11. | Members’ Equity |
12. | Preferred Units |
| | Units | | | Amount | |
| | | | ($ in thousands) | ||
Balance, September 30, 2019 | | | 475,152 | | | $56,810 |
Dividends paid in kind | | | 7,094 | | | 851 |
Balance, December 31, 2019 | | | 482,246 | | | 57,661 |
Dividends paid in kind | | | 7,199 | | | 864 |
Balance, March 31, 2020 | | | 489,445 | | | 58,525 |
Dividends paid in kind | | | 7,307 | | | 877 |
Balance, June 30, 2020 | | | 496,752 | | | $59,402 |
| | Units | | | Amount | |
| | | | ($ in thousands) | ||
Balance, September 30, 2018 | | | 447,809 | | | $53,529 |
Dividends paid in kind | | | 6,684 | | | 802 |
Balance, December 31, 2018 | | | 454,493 | | | 54,331 |
Dividends paid in kind | | | 6,784 | | | 814 |
Balance, March 31, 2019 | | | 461,277 | | | 55,145 |
Dividends paid in kind | | | 6,886 | | | 826 |
Balance, June 30, 2019 | | | 468,163 | | | $55,971 |
| | Units | | | Amount | |
| | ($ in thousands) | ||||
Balance, September 30, 2017 | | | 416,667 | | | $49,793 |
Dividends paid in kind | | | 31,142 | | | 3,736 |
Balance, September 30, 2018 | | | 447,809 | | | 53,529 |
Dividends paid in kind | | | 27,343 | | | 3,281 |
Balance, September 30, 2019 | | | 475,152 | | | 56,810 |
Dividends paid in kind | | | 29,016 | | | 3,482 |
Balance, September 30, 2020 | | | 504,168 | | | $60,292 |
13. | Unit-Based Compensation |
14. | Net Income (Loss) Per Unit |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Net income (loss) attributable to common unitholders (in thousands) − Basic | | | $31,609 | | | $48,536 | | | $(3,852) |
Plus: Dividends on preferred units | | | 3,535 | | | 3,330 | | | 3,129 |
Net income (loss) (in thousands) − Diluted | | | $35,144 | | | $51,866 | | | $(723) |
| | | | | | ||||
Basic weighted-average common units outstanding | | | 1,528,555 | | | 1,522,883 | | | 1,500,000 |
Effecting of dilutive securities: | | | | | | | |||
Series A preferred units | | | 490,735 | | | 462,493 | | | — |
Restricted units | | | 18,663 | | | 6,822 | | | — |
Diluted weighted-average common units outstanding | | | 2,037,953 | | | 1,992,198 | | | 1,500,000 |
Net income (loss per unit): | | | | | | | |||
Basic | | | $20.67 | | | $31.87 | | | $(2.57) |
Diluted | | | $17.24 | | | $26.03 | | | $(2.57) |
| | Three Months Ended June 30, | | | Nine Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Net income (loss) attributable to common units (in thousands) | | | $(28,874) | | | $12,748 | | | $37,597 | | | $27,853 |
Basic weighted-average common units outstanding | | | 1,529,937 | | | 1,527,460 | | | 1,528,094 | | | 1,521,358 |
Effecting of dilutive securities: | | | | | | | | | ||||
Series A preferred units | | | — | | | 465,868 | | | 487,081 | | | 459,049 |
Restricted units | | | — | | | 4,772 | | | 10,017 | | | 4,772 |
Diluted weighted-average common units outstanding | | | 1,529,937 | | | 1,998,100 | | | 2,025,192 | | | 1,985,179 |
Basic net income (loss) per common unit | | | $(18.87) | | | $8.35 | | | $24.60 | | | $18.31 |
Diluted net income (loss) per common unit | | | $(18.87) | | | $6.80 | | | $19.86 | | | $15.28 |
| | Three Months Ended June 30, | | | Nine Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Series A preferred units | | | 494,316 | | | — | | | — | | | — |
Restricted units | | | 25,159 | | | 13,423 | | | 17,499 | | | 13,423 |
15. |
| | Three Months Ended June 30, | | | Nine Months Ended June 30, | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| | ($ in thousands) | ||||||||||
Operating revenues: | | | | | | | | | ||||
Oil | | | $6,153 | | | $26,655 | | | $59,548 | | | $71,973 |
Natural gas | | | (738) | | | (180) | | | (1,009) | | | (88) |
Natural gas liquids | | | (446) | | | (268) | | | (715) | | | (172) |
Total operating revenues | | | $4,969 | | | $26,207 | | | $57,824 | | | $71,713 |
Commitments and Contingencies |
Subsequent Events |
17. | Supplemental Oil and Gas Information (Unaudited) |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Acquisition of properties | | | | | | | |||
Proved | | | $1,187 | | | $1,962 | | | $5,887 |
Unproved | | | 5,331 | | | 8,604 | | | 14,002 |
Exploration costs | | | 8,039 | | | 5,074 | | | 5,992 |
Development costs | | | 43,684 | | | 64,127 | | | 68,765 |
Total costs incurred | | | $58,241 | | | $79,767 | | | $94,646 |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Oil, natural gas and NGL sales | | | $73,133 | | | $101,096 | | | $69,872 |
Lease operating expenses | | | 20,997 | | | 23,808 | | | 11,044 |
Gathering, processing & transportation | | | — | | | — | | | 735 |
Production taxes | | | 3,526 | | | 4,804 | | | 3,207 |
Exploration costs | | | 9,923 | | | 5,074 | | | 5,992 |
Depreciation, depletion, amortization, impairment and accretion | | | 21,479 | | | 20,182 | | | 15,714 |
Results of operations | | | $17,208 | | | $47,228 | | | $33,180 |
| | Crude Oil | | | Natural Gas | | | NGLs | | | Total | |
| | (Mbbl) | | | (MMcf) | | | (Mbbl) | | | (Mboe) | |
September 30, 2017 | | | 12,025.9 | | | 4,820.5 | | | 1,179.3 | | | 14,008.6 |
Extensions, discoveries and other additions | | | 9,829.0 | | | 4,721.0 | | | 990.6 | | | 11,606.4 |
Acquisitions | | | 1,361.1 | | | 379.6 | | | 81.3 | | | 1,505.7 |
Revisions | | | 1,613.9 | | | 2,355.4 | | | 235.0 | | | 2,241.5 |
Production | | | (1,187.5) | | | (198.1) | | | (40.5) | | | (1,261.0) |
September 30, 2018 | | | 23,642.4 | | | 12,078.4 | | | 2,445.7 | | | 28,101.2 |
Extensions, discoveries and other additions | | | 13,669.5 | | | 13,658.2 | | | 3,633.5 | | | 19,579.4 |
Acquisitions | | | 258.5 | | | 127.6 | | | 34.2 | | | 314.0 |
Revisions | | | 1,563.5 | | | 16,013.4 | | | 4,833.8 | | | 9,066.2 |
Production | | | (1,975.0) | | | (886.2) | | | (135.0) | | | (2,257.7) |
September 30, 2019 | | | 37,158.9 | | | 40,991.4 | | | 10,812.2 | | | 54,803.1 |
Extensions, discoveries and other additions | | | 2,265.1 | | | 3,029.8 | | | 642.4 | | | 3,412.5 |
Revisions | | | (205.9) | | | 11,290.2 | | | (513.3) | | | 1,162.5 |
Production | | | (2,060.4) | | | (1,627.9) | | | (259.8) | | | (2,591.5) |
September 30, 2020 | | | 37,157.7 | | | 53,683.5 | | | 10,681.5 | | | 56,786.6 |
| | | | | | | | |||||
Proved Developed Reserves, Included Above | | | | | | | | | ||||
September 30, 2017 | | | 7,064.4 | | | 2,814.3 | | | 692.1 | | | 8,225.5 |
September 30, 2018 | | | 13,764.0 | | | 7,481.0 | | | 1,485.8 | | | 16,496.6 |
September 30, 2019 | | | 19,197.6 | | | 23,096.0 | | | 6,044.9 | | | 29,091.8 |
September 30, 2020 | | | 19,149.0 | | | 31,137.6 | | | 5,847.1 | | | 30,185.7 |
Proved Undeveloped Reserves, Included Above | | | | | | | | | ||||
September 30, 2017 | | | 4,961.5 | | | 2,006.2 | | | 487.2 | | | 5,783.1 |
September 30, 2018 | | | 9,878.4 | | | 4,597.4 | | | 959.9 | | | 11,604.6 |
September 30, 2019 | | | 17,961.3 | | | 17,895.4 | | | 4,767.3 | | | 25,711.3 |
September 30, 2020 | | | 18,008.7 | | | 22,545.9 | | | 4,834.4 | | | 26,600.9 |
| | September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Future crude oil, natural gas and NGLs sales(1)(2)(3) | | | $1,533,286 | | | $1,951,657 | | | $1,413,978 |
Future production costs | | | (550,427) | | | (555,124) | | | (342,782) |
Future development costs | | | (144,912) | | | (164,036) | | | (90,357) |
Future income tax expense(4) | | | (3,167) | | | (4,059) | | | (7,423) |
Future net cash flows | | | 834,780 | | | 1,228,438 | | | 973,416 |
10% annual discount | | | (532,442) | | | (786,226) | | | (591,393) |
| | | | | | ||||
Standardized measure of discounted future net cash flows | | | $302,338 | | | $442,212 | | | $382,023 |
(1) | 2020 proved reserves were derived based on prices of $41.91 per Bbl of crude oil, $(0.06) per Mcf of natural gas and $(1.96) per Bbl of NGL. |
(2) | 2019 proved reserves were derived based on prices of $54.38 per Bbl of crude oil, $(0.32) per Mcf of natural gas and $(5.19) per Bbl of NGL. |
(3) | 2018 proved reserves were derived based on prices of $57.92 per Bbl of crude oil, $1.62 per Mcf of natural gas and $10.25 per Bbl of NGL. |
(4) | The Company's calculations of the standardized measure of discounted future net cash flows as of September 30, 2020, 2019 and 2018, includes the Company’s obligation for Texas Margin Tax but excludes the effect of estimated future income tax expenses as the Company is a limited liability company and not subject to income taxes. |
| | Years Ended September 30, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | ($ in thousands) | |||||||
Balance, beginning of period | | | $442,212 | | | $382,023 | | | $143,187 |
Sales of crude oil, natural gas and NGLs, net | | | 7,328 | | | (85,921) | | | (58,093) |
Net change in prices and production costs | | | (162,571) | | | (133,615) | | | 64,892 |
Net changes in future development costs | | | (12,348) | | | (1,226) | | | (137) |
Extensions, discoveries and other additions | | | 17,490 | | | 135,350 | | | 143,389 |
Acquisition of reserves | | | — | | | 1,294 | | | 16,505 |
Revisions of previous quantity estimates | | | (48,611) | | | 85,381 | | | 36,093 |
Previously estimated development costs incurred | | | 10,448 | | | 20,769 | | | 20,621 |
Net change in income taxes | | | 891 | | | (987) | | | (1,863) |
Accretion of discount | | | 44,627 | | | 38,509 | | | 14,439 |
Other | | | 2,872 | | | 635 | | | 2,990 |
Balance, end of period | | | $302,338 | | | $442,212 | | | $382,023 |
18. | Quarterly Financial Data – Unaudited |
| | 2020 First Quarter | | | 2020 Second Quarter | | | 2020 Third Quarter | | | 2020 Fourth Quarter | |
| | ($ in thousands except per share data) | ||||||||||
Total revenues | | | $29,549 | | | $25,406 | | | $6,019 | | | $15,959 |
Income from operations | | | $12,560 | | | $7,232 | | | $(12,158) | | | $(349) |
Net income (loss) | | | $(6,841) | | | $75,053 | | | $(27,984) | | | $(5,084) |
Net income (loss) attributable to common unitholders | | | $(7,705) | | | $74,176 | | | $(28,874) | | | $(5,988) |
Net income (loss) per common unit: | | | | | | | | | ||||
Basic | | | $(5.04) | | | $48.51 | | | $(18.87) | | | $(3.92) |
Diluted | | | $(5.04) | | | $36.94 | | | $(18.87) | | | $(3.92) |
| | 2019 First Quarter | | | 2019 Second Quarter | | | 2019 Third Quarter | | | 2019 Fourth Quarter | |
| | ($ in thousands except per share data) | ||||||||||
Total revenues | | | $21,979 | | | $23,527 | | | $26,207 | | | $29,383 |
Income from operations | | | $3,941 | | | $9,016 | | | $9,223 | | | $9,308 |
Net income (loss) | | | $21,735 | | | $(4,990) | | | $13,587 | | | $21,534 |
Net income (loss) attributable to common unitholders | | | $20,921 | | | $(5,816) | | | $12,748 | | | $20,683 |
Net income (loss) per common unit: | | | | | | | | | ||||
Basic | | | $13.86 | | | $(3.81) | | | $8.35 | | | $13.54 |
Diluted | | | $11.07 | | | $(3.81) | | | $6.80 | | | $10.74 |
| | | | Page | ||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
| | | | Page | ||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
| | | | Page | ||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
Exhibit A | | | Second Amended and Restated Certificate of Incorporation of Tengasco, Inc. |
| | ||
Exhibit B | | | Second Amended and Restated Bylaws of Riley Exploration Permian, Inc. |
| | ||
Exhibit C | | | Amended and Restated Certificate of Formation of Surviving Company |
| | ||
Exhibit D | | | Substitute Award Agreement |
| | ||
Exhibit E | | | Riley Exploration Permian, Inc. 2021 Long Term Incentive Plan |
| | ||
Exhibit F | | | Form of Change of Control and Severance Agreement |
| | ||
Exhibit G | | | CR Insurance Policy Requirements |
If to Parent or Merger Sub, to: | | | Tengasco, Inc. | |||
| | 8000 E. Maplewood Ave., Suite 130 | ||||
| | Greenwood Village, CO 80111 | ||||
| | Attention: | | | Michael J. Rugen | |
| | | | Cary V. Sorensen | ||
| | Email: | | | mrugen@tengasco.com | |
| | | | csorensen@tengasco.com | ||
| | | ||||
with a copy (which will not constitute notice to Parent or Merger Sub) to: | | | Davis Graham & Stubbs LLP | |||
| | 1550 Seventeenth Street, Suite 500 | ||||
| | Denver, CO 80202 | ||||
| | Attention: | | | Kristin L. Lentz | |
| | Email: | | | kristin.lentz@dgslaw.com | |
| | | | |||
If to the Company, to: | | | Riley Exploration – Permian, LLC | |||
| | 29 E. Reno, Suite 500 | ||||
| | Oklahoma City, OK 73104 | ||||
| | Attention: | | | Bobby D. Riley | |
| | | | Kevin Riley | ||
| | Email: | | | bobby@rileypermian.com | |
| | | | kevin@rileypermian.com | ||
| | | | |||
with a copy (which will not constitute notice to the Company) to: | | | di Santo Law PLLC | |||
| 170 Christopher Street | |||||
| | New York, NY 10014 | ||||
| | Attention: | | | Beth A. di Santo | |
| | Email: | | | bdisanto@disantolaw.com |
RILEY EXPLORATION – PERMIAN, LLC | ||||||
| | | | |||
By: | | | /s/ Kevin Riley | | | |
Printed Name: Kevin Riley | | | ||||
Title: President & Interim CFO | | | ||||
| | | | |||
TENGASCO, INC. | ||||||
| | | | |||
By: | | | /s/ Michael J. Rugen | | | |
Printed Name: Michael J. Rugen | | | ||||
Title: CFO and Interim CEO | | | ||||
| | | | |||
ANTMAN SUB, LLC | ||||||
| | | | |||
By: | | | /s/ Michael J. Rugen | | | |
Printed Name: Michael J. Rugen | | | ||||
Title: President | | |
| | RILEY EXPLORATION – PERMIAN, LLC | ||||
| | | ||||
| | By: | | | /s/ Kevin Riley | |
| | Kevin Riley | ||||
| | President & Interim CFO | ||||
| | | | |||
| | TENGASCO, INC. | ||||
| | | | |||
| | By: | | | /s/ Michael J. Rugen | |
| | Michael J. Rugen | ||||
| | Chief Financial Officer and Interim Chief Executive Officer | ||||
| | | | |||
| | ANTMAN SUB, LLC | ||||
| | | | |||
| | By: | | | /s/ Michael J. Rugen | |
| | Michael J. Rugen | ||||
| | President |
(i) | reviewed certain publicly available and other business and financial information that we believe to be relevant to our inquiry; |
(ii) | reviewed certain internal financial statements and other financial and operating data concerning Tengasco and Riley, as provided by their respective representatives; |
(iii) | reviewed (a) a reserve engineering report, from Riley, prepared by Netherland Sewell and Associates (the “Riley Reserve Report”), (b) a reserve engineering report, from Tengasco, prepared by LaRoche Petroleum Consultants (the “Tengasco Reserve Report”), (c) a reserve engineering report prepared by Riley’s management (the “Riley Internal Report”), and (d) a reserve engineering report prepared by Tengasco’s management (the “Tengasco Internal Report” and, together with the Riley Reserve Report, the Tengasco Reserve Report and the Riley Internal Report, the “Reserve Reports”); |
(iv) | reviewed the reported prices and trading activity for the Tengasco Common Stock; |
(v) | compared selected market valuation metrics of certain publicly-traded companies we deemed relevant with those same metrics implied by the Transaction; |
(vi) | compared the financial performance, prices and trading activity of Tengasco Common Stock with that of certain publicly traded companies that we deemed relevant, and other trading data for public companies, which we deemed comparable to Tengasco; |
(vii) | reviewed recent comparable oil and gas acquisition and divestures, which are comparable to the terms of the Agreement; |
(viii) | compared the financial terms of the Transaction to financial terms of certain other acquisition transactions we deemed relevant; |
(ix) | participated in certain discussions with management of Tengasco and Riley, and with representatives of Tengasco’s Board of Directors and its legal and professional advisors; and |
(x) | performed such other analyses, reviewed such other information and considered such other data, financial studies, analyses, and financial, economic and market criteria, and such other factors as we have deemed appropriate. |
| | Very truly yours, | |
| | ||
| | ROTH CAPITAL PARTNERS, LLC |
| | Tengasco, Inc. | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | |
Item 20. | Indemnification of Directors and Officers |
Item 21. | Exhibits and Financial Statement Schedules |
Exhibit Number | | | Description |
| | Agreement and Plan of Merger, by and among Tengasco, Inc., Antman Sub, LLC, and Riley Exploration – Permian, LLC, dated as of October 21, 2020 (attached as Annex A to this proxy statement/prospectus which forms part of this Registration Statement). | |
| | ||
| | Amendment No. 1 to Agreement and Plan of Merger, by and among Tengasco, Inc., Antman Sub, LLC, and Riley Exploration – Permian, LLC, dated as of January 20, 2021 (attached as Annex A to this proxy statement/prospectus which forms part of this Registration Statement). | |
| | ||
| | Amended and Restated Certificate of Incorporation as of March 23, | |
| | ||
| | Amended and Restated Bylaws as of November 13, | |
| | ||
| | Agreement and Plan of Merger of Tengasco, Inc. (a Tennessee corporation with and into Tengasco, Inc., a Delaware corporation dated as of April 15, 2011) | |
| |
Exhibit Number | | | Description |
| | Second Amended and Restated Registration Rights Agreement dated October 7, 2020 by | |
| | ||
| | Opinion of Davis Graham & Stubbs LLP as to the validity of Tengasco, Inc.’s common stock being registered. | |
| | ||
| | Opinion of Davis Graham & Stubbs LLP regarding certain federal income tax matters. | |
| | ||
| | Opinion of Thompson & Knight LLP regarding certain federal income tax matters. | |
| | ||
| | Credit Agreement dated as of September 28, 2017, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | First Amendment to Credit Agreement dated as of February 27, 2018, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | Second Amendment to Credit Agreement dated as of November 9, 2018, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | Third Amendment to Credit Agreement dated as of April 3, 2019, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | Fourth Amendment to Credit Agreement dated as of October 15, 2019, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | Fifth Amendment to Credit Agreement dated as of May 7, 2020, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | Sixth Amendment to Credit Agreement dated as of August 31, 2020, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | Seventh Amendment and Consent to Credit Agreement dated as of October 21, 2020, by and among Riley Exploration – Permian, LLC, as borrower, Truist Bank, as administrative agent, and the lenders party thereto. | |
| | ||
| | Employment Agreement dated April 1, 2019 by and between Riley Exploration – Permian, LLC and Bobby D. Riley and assigned by Riley Exploration – Permian, LLC to Riley Permian Operating Company, LLC on June 8, 2019. | |
| | ||
| | Amendment No. 1 to Employment Agreement dated October 1, 2020 by and between Riley Permian Operating Company, LLC and Bobby D. Riley. | |
| | ||
| | Employment Agreement dated April 1, 2019 by and between Riley Exploration – Permian, LLC and Kevin Riley and assigned by Riley Exploration – Permian, LLC to Riley Permian Operating Company, LLC on June 8, 2019. | |
| | ||
| | Compensation Agreement between Tengasco, Inc. and Michael J. Rugen dated September 18, 2013. | |
| |
Exhibit Number | | | Description |
| | Form of Independent Director Agreement. | |
| | ||
| | Form of Indemnification Agreement. | |
| | ||
23.1* | | | |
| | ||
| | Consent of Moss Adams LLP, independent registered public accounting firm for Tengasco, Inc. | |
| | ||
| | Consent of BDO USA LLP, independent registered public accounting firm for Riley Exploration – Permian, LLC. | |
| | ||
| | Consent of LaRoche Petroleum Consultants, Ltd., Petroleum Consultants, with respect to the Tengasco, Inc. reserve report. | |
| | ||
| | Consent of Netherland, Sewell & Associates, Inc., Petroleum Consultants., with respect to the Riley Exploration – Permian, LLC. reserve report. | |
| | ||
| | Consent of Thompson & Knight LLP (included in Exhibit 8.2). | |
| | ||
| | Power of Attorney (included on the signature pages of this Registration Statement). | |
| | ||
| | Report of LaRoche Petroleum Consultants, Ltd., with respect to the reserves of Tengasco, Inc. as of December 31, | |
| | ||
| | Report of Netherland, Sewell & Associates, Inc., Petroleum Consultants., with respect to the reserves of Riley Exploration – Permian, LLC as of September 30, | |
| | ||
| | Consent of Roth Capital Partners, LLC. | |
| | ||
| | Form of Tengasco, Inc. proxy card for the Tengasco special meeting. | |
| | ||
| | Consent of Director Nominee (Michael J. Rugen). | |
| | ||
| | Consent of Director Nominee (Bobby D. Riley). | |
| | ||
| | Consent of Director Nominee (Bryan H. Lawrence). | |
| | ||
| | Consent of Director Nominee | |
| | ||
| | Consent of Director Nominee (E. Wayne Nordberg). | |
| | ||
101** | | | Interactive Data Files of Financial Statement and Notes. |
* | Filed herewith. |
** | Previously filed. |
± | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC. |
Item 22. | Undertakings |
(1) | to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”); |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | that, for the purpose of determining any liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(5) | that, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6) | that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act, that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(7) | that, prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) under the Securities Act, the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(8) | that every prospectus (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act, and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(9) | insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(10) | to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(11) | to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
| | TENGASCO, INC. | ||||
| | | | |||
| | By: | | | /s/ Michael J. Rugen | |
| | Michael J. Rugen | ||||
| | Chief Executive Officer and Chief Financial Officer | ||||
| | Principal Financial and Accounting Officer |
Signature | | | Title | | | Date |
/s/ Michael J. Rugen | | | | | ||
Michael J. Rugen | | | Chief Executive Officer and Chief Financial Officer (Principal Executive Financial and Accounting Officer) | | | |
| | | | |||
/s/ | | | | | ||
Peter E. Salas | | | Chairman of the Board | | | |
| | | | |||
/s/ | | | | | ||
Matthew K. Behrent | | | Director | | | |
| | | | |||
/s/ | | | | | ||
Richard M. Thon | | | Director | | |
* By: | | | /s/ Michael J. Rugen | | | |
| | Michael J. Rugen As Attorney-in-Fact | | |