Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | EVOLUTION PETROLEUM CORP | |
Entity Central Index Key | 1,006,655 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 33,062,297 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Current assets | ||
Cash and cash equivalents | $ 20,220,249 | $ 34,077,060 |
Receivables | 3,372,199 | 2,638,188 |
Deferred tax asset | 0 | 105,321 |
Derivative assets, net | 47,965 | 14,132 |
Prepaid expenses and other current assets | 697,346 | 251,749 |
Total current assets | 24,337,759 | 37,086,450 |
Oil and natural gas property and equipment, net (full-cost method of accounting) | 62,771,528 | 59,970,463 |
Other property and equipment, net | 45,194 | 28,649 |
Total property and equipment | 62,816,722 | 59,999,112 |
Other assets | 312,842 | 365,489 |
Total assets | 87,467,323 | 97,451,051 |
Current liabilities | ||
Accounts payable | 1,707,415 | 5,809,107 |
Accrued liabilities and other | 694,051 | 2,097,951 |
State and federal income taxes payable | 457,306 | 621,850 |
Total current liabilities | 2,858,772 | 8,528,908 |
Long term liabilities | ||
Deferred income taxes | 14,814,714 | 11,840,693 |
Asset retirement obligations | 811,226 | 760,300 |
Total liabilities | 18,484,712 | 21,129,901 |
Commitments and contingencies (Note 15) | ||
Stockholders’ equity | ||
Preferred stock, par value $0.001; 5,000,000 shares authorized:8.5% Series A Cumulative Preferred Stock, 1,000,000 shares designated, 317,319 shares issued; no shares outstanding at March 31, 2017 as all shares were redeemed November 14, 2016 (Note 8); and 317,319 shares outstanding at June 30, 2016 with a liquidation preference of $7,932,975 ($25.00 per share) | 0 | 317 |
Common stock; par value $0.001; 100,000,000 shares authorized: issued and outstanding 33,062,297 shares and 32,907,863 as of March 31, 2017 and June 30, 2016, respectively | 33,062 | 32,907 |
Additional paid-in capital | 40,659,387 | 47,171,563 |
Retained earnings | 28,290,162 | 29,116,363 |
Total stockholders’ equity | 68,982,611 | 76,321,150 |
Total liabilities and stockholders’ equity | $ 87,467,323 | $ 97,451,051 |
Consolidated Condensed Balance3
Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Jun. 30, 2016 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 33,062,297 | 32,907,863 |
Common stock, shares issued | 33,062,297 | 32,907,863 |
Series A Cumulative Preferred Stock | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Cumulative Preferred Stock (as a percent) | 8.50% | 8.50% |
Preferred stock, shares issued | 317,319 | 317,319 |
Preferred stock, shares outstanding | 0 | 317,319 |
Preferred stock, total liquidation preference (in dollars) | $ 7,932,975 | |
Preferred stock, liquidation preference (in dollars per share) | $ 25 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenues | |||||
Total revenues | $ 9,525,437 | $ 5,106,735 | $ 25,649,194 | $ 19,109,068 | |
Operating costs | |||||
Production costs | 2,811,258 | 2,192,217 | 7,448,320 | 7,030,537 | |
Depreciation, depletion and amortization | 1,523,475 | 1,268,800 | 4,104,424 | 3,958,644 | |
Accretion of discount on asset retirement obligations | 13,562 | 11,695 | 39,892 | 34,555 | |
General and administrative expenses | [1] | 1,283,906 | 2,304,237 | 3,760,348 | 6,046,603 |
Restructuring charges | [2] | 0 | 0 | 0 | 1,257,433 |
Total operating costs | 5,632,201 | 5,787,882 | 15,352,984 | 18,398,704 | |
Income (loss) from operations | 3,893,236 | (681,147) | 10,296,210 | 710,364 | |
Other | |||||
Gain on realized derivative instruments, net | 3,350 | 1,795,431 | 3,440 | 3,960,059 | |
Gain (loss) on unrealized derivative instruments, net | 47,965 | (1,314,044) | 33,833 | 119,679 | |
Delhi field insurance recovery related to pre-reversion event | 0 | 0 | 0 | 1,074,957 | |
Interest and other income | 13,099 | 11,851 | 39,905 | 23,516 | |
Interest expense | (20,317) | (14,036) | (61,373) | (51,162) | |
Income (loss) before income taxes | 3,937,333 | (201,945) | 10,312,015 | 5,837,413 | |
Income tax provision (benefit) | 1,518,190 | (72,337) | 3,768,463 | 2,051,521 | |
Net income (loss) attributable to the Company | 2,419,143 | (129,608) | 6,543,552 | 3,785,892 | |
Dividends on preferred stock | 0 | 168,575 | 250,990 | 505,726 | |
Deemed dividend on preferred shares called for redemption | 0 | 0 | 1,002,440 | 0 | |
Net income (loss) available to common stockholders | $ 2,419,143 | $ (298,183) | $ 5,290,122 | $ 3,280,166 | |
Earnings (loss) per common share | |||||
Basic (in dollars per share) | $ 0.07 | $ (0.01) | $ 0.16 | $ 0.10 | |
Diluted (in dollars per share) | $ 0.07 | $ (0.01) | $ 0.16 | $ 0.10 | |
Weighted average number of common shares | |||||
Basic (in shares) | 33,062,297 | 32,879,381 | 33,021,865 | 32,779,234 | |
Diluted (in shares) | 33,115,699 | 32,879,381 | 33,064,708 | 32,834,765 | |
Crude oil | |||||
Revenues | |||||
Total revenues | $ 9,060,796 | $ 5,005,955 | $ 25,184,468 | $ 18,897,572 | |
Natural gas liquids | |||||
Revenues | |||||
Total revenues | 464,641 | 597 | 464,730 | 2,332 | |
Natural gas | |||||
Revenues | |||||
Total revenues | 0 | 183 | (4) | 1,204 | |
Artificial lift technology services | |||||
Revenues | |||||
Total revenues | 0 | 100,000 | 0 | 207,960 | |
Operating costs | |||||
Production costs | $ 0 | $ 10,933 | $ 0 | $ 70,932 | |
[1] | General and administrative expenses for the three months ended March 31, 2017 and 2016 included non-cash stock-based compensation expense of $291,151 and $277,907, respectively. For the corresponding nine month periods, non-cash stock compensation expense was $878,023 and $708,746, respectively. | ||||
[2] | Restructuring charges include $569,228 of non-cash impairment charges and $59,339 of non-cash stock compensation expense for the nine months ended March 31, 2016. |
Consolidated Condensed Stateme5
Consolidated Condensed Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based compensation expense | $ 878,023 | $ 768,085 | ||
General and administrative expenses | ||||
Stock-based compensation expense | $ 291,151 | $ 277,907 | $ 878,023 | 708,746 |
Restructuring charges | ||||
Stock-based compensation expense | 59,339 | |||
Non-cash impairment charges | $ 569,228 |
Consolidated Condensed Stateme6
Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities | ||
Net income attributable to the Company | $ 6,543,552 | $ 3,785,892 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 4,146,898 | 3,991,055 |
Impairments included in restructuring charge | 0 | 569,228 |
Stock-based compensation | 878,023 | 768,085 |
Accretion of discount on asset retirement obligations | 39,892 | 34,555 |
Settlements of asset retirement obligations | (157,910) | 0 |
Deferred income taxes | 3,079,342 | (399,256) |
(Gain) loss on derivative instruments, net | (37,273) | (4,099,759) |
Write-off of deferred loan costs | 0 | 50,414 |
Changes in operating assets and liabilities: | ||
Receivables | (723,161) | 1,178,053 |
Prepaid expenses and other current assets | (445,597) | 20,696 |
Accounts payable and accrued expenses | (1,808,566) | (98,254) |
Income taxes payable | (164,544) | (35,405) |
Net cash provided by operating activities | 11,350,656 | 5,765,304 |
Cash flows from investing activities | ||
Derivative settlement payments (paid) received | (318,618) | 3,513,285 |
Capital expenditures for oil and natural gas properties | (10,096,475) | (12,191,121) |
Capital expenditures for other property and equipment | (32,260) | (1,876) |
Other assets | 0 | (161,345) |
Net cash used in investing activities | (10,447,353) | (8,841,057) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 0 | 51,000 |
Cash dividends to preferred stockholders | (250,990) | (505,726) |
Cash dividends to common stockholders | (6,116,323) | (4,932,247) |
Common share repurchases, including shares surrendered for tax withholding | (459,858) | (1,355,880) |
Tax benefits related to stock-based compensation | 0 | 3,727,913 |
Redemption of preferred shares | (7,932,975) | 0 |
Other | 32 | (21,969) |
Net cash used in financing activities | (14,760,114) | (3,036,909) |
Net decrease in cash and cash equivalents | (13,856,811) | (6,112,662) |
Cash and cash equivalents, beginning of period | 34,077,060 | 20,118,757 |
Cash and cash equivalents, end of period | 20,220,249 | 14,006,095 |
Supplemental disclosures of cash flow information: | ||
Income taxes paid | 1,383,773 | 480,000 |
Louisiana carryback income tax refund and related interest received | 0 | 1,556,999 |
Non-cash transactions: | ||
Change in accounts payable used to acquire property and equipment | (3,181,640) | (130,202) |
Deferred loan costs charged to oil and gas property costs | 0 | 107,196 |
Oil and natural gas property costs incurred through recognition of asset retirement obligations | 14,119 | 0 |
Settlement of accrued treasury stock purchases | 0 | (170,283) |
Royalty rights acquired through non-monetary exchange of patent and trademark assets | $ 0 | $ 108,512 |
Consolidated Condensed Stateme7
Consolidated Condensed Statement of Changes in Stockholders' Equity (Unaudited) - 9 months ended Mar. 31, 2017 - USD ($) | Total | Preferred | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock |
Beginning Balance at Jun. 30, 2016 | $ 76,321,150 | $ 317 | $ 32,907 | $ 47,171,563 | $ 29,116,363 | $ 0 |
Beginning Balance (shares) at Jun. 30, 2016 | 32,907,863 | 317,319 | 32,907,863 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of restricted common stock (shares) | 227,889 | |||||
Issuance of restricted common stock | $ 32 | $ 228 | (196) | |||
Common share repurchases, including shares surrendered for tax withholding (shares) | (73,455) | |||||
Common share repurchases, including shares surrendered for tax withholding | (459,858) | (459,858) | ||||
Retirements of treasury stock | $ (73) | (459,785) | 459,858 | |||
Stock-based compensation | 878,023 | 878,023 | ||||
Redemption of preferred shares (shares) | (317,319) | |||||
Redemption of preferred shares | (7,932,975) | $ (317) | (6,930,218) | (1,002,440) | ||
Net income attributable to the Company | 6,543,552 | 6,543,552 | ||||
Common stock cash dividends | (6,116,323) | (6,116,323) | ||||
Preferred stock cash dividends | (250,990) | (250,990) | ||||
Ending Balance at Mar. 31, 2017 | $ 68,982,611 | $ 0 | $ 33,062 | $ 40,659,387 | $ 28,290,162 | $ 0 |
Ending Balance (shares) at Mar. 31, 2017 | 33,062,297 | 0 | 33,062,297 |
Organization and Basis of Prepa
Organization and Basis of Preparation | 9 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Preparation | Organization and Basis of Preparation Nature of Operations. Evolution Petroleum Corporation ("EPM") and its subsidiaries (the "Company", "we", "our" or "us"), is an independent petroleum company headquartered in Houston, Texas and incorporated under the laws of the State of Nevada. We are engaged primarily in the development and production of oil and gas reserves. Interim Financial Statements. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the appropriate rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. All adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods presented have been included. The interim financial information and notes hereto should be read in conjunction with the Company’s 2016 Annual Report on Form 10-K for the fiscal year ended June 30, 2016 , as filed with the SEC. The results of operations for interim periods are not necessarily indicative of results to be expected for a full fiscal year. Principles of Consolidation and Reporting. Our consolidated financial statements include the accounts of EPM and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The consolidated financial statements for the previous year include certain reclassifications that were made to conform to the current presentation. Such reclassifications have no impact on previously reported net income or stockholders' equity. As a result of the separation of our artificial lift technology operations at December 31, 2015, previously reported revenues for the Delhi field and our artificial lift technology operations have been reclassified as appropriate to crude oil, natural gas liquids, natural gas and artificial lift technology service revenues. Before the reclassification, artificial lift technology revenues included crude oil, natural gas liquids and gas revenues produced by certain of the Company’s operated wells which used our artificial lift technology, together with service revenues derived from the use of the Company’s technology on third party wells. Previously reported production costs for our artificial lift technology operations have been reclassified as appropriate to oil and gas production costs and cost of artificial lift technology services. Use of Estimates. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include (a) reserve quantities and estimated future cash flows associated with proved reserves, which significantly impact depletion expense and potential impairments of oil and natural gas properties, (b) asset retirement obligations, (c) stock-based compensation, (d) fair values of derivative assets and liabilities, (e) income taxes and the valuation of deferred tax assets and (f) commitments and contingencies. We analyze our estimates based on historical experience and various other assumptions that we believe to be reasonable. While we believe that our estimates and assumptions used in preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates. New Accounting Pronouncements. In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2015-14, which defers the effective date of ASU 2014-09 Revenue from Contracts with Customers (Topic 606) (" ASU 2014-09") by one year and allows entities the option to early adopt the new revenue standard as of the original effective date. Issued in May 2014, ASU 2014-09 provided guidance on revenue recognition on contracts with customers to transfer goods or services or on contracts for the transfer of nonfinancial assets. ASU 2014-09 requires that revenue recognition on contracts with customers depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public companies, ASU 2014-09 is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The standard provides for either the full retrospective or modified retrospective transition methods. We expect to adopt this standard using the modified retrospective method. The Company expects that additional disclosures will be required as a result of adopting ASU 2014-09 and is currently assessing the impact of the guidance on its consolidated financial statements. On February 25, 2016, the FASB issued ASU 2016-02 , Leases (“ASU 2016-02”), which relates to the accounting for leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than twelve months. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are evaluating the impact the adoption of ASU 2016-02 will have on our consolidated financial statements. New Accounting Pronouncements Adopted. The Company early adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, to be applied prospectively effective for the three months ended September 30, 2016, the first quarter of our fiscal year. This amended guidance simplifies the balance sheet position presentation and reduces complexity in accounting for deferred income tax assets and liabilities. The update requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. As a result, current deferred tax assets of $105,321 have been netted together with noncurrent deferred income tax liabilities on the March 31, 2017 consolidated condensed balance sheet. The prior period presented has not been retrospectively adjusted. The Company early adopted ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting, effective for the three months ended September 30, 2016. This amended guidance simplifies and improves several aspects of the accounting for employee share-based payment transactions. Under previous guidance excess tax benefits were recognized as paid in capital to the extent they reduced cash taxes otherwise payable, and tax deficiencies were recognized as an offset to accumulated excess benefits, if any, or in the statement of operations. The new guidance requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statements of operations when the awards vest or are settled. Under the required modified retrospective transition, the Company had no cumulative-effect adjustment to retained earnings at the beginning of the period of adoption, as its accumulated excess tax benefits had been completely used in reducing taxable income for the year ended June 30, 2016. For vestings which occurred in the nine months ended March 31, 2017 , a related tax deficiency of $24,597 was recognized in income tax expense. The Company also elected to prospectively adopt the presentation of excess tax benefits in the operating section of the statements of cash flows. Accordingly, such statements for pre-adoption periods will continue to present excess tax benefits in the financing section. The amended guidance permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock-based compensation: to continue to estimate the total number of awards for which the requisite service period will not be rendered as currently required or, to be applied on a modified retrospective basis, to account for forfeitures as they occur. Upon early adoption, the Company elected to change its accounting policy to account for forfeitures as they occur. Except for income tax expense mentioned above, none of the other provisions in this amended guidance had a material impact on our condensed consolidated financial statements. |
Receivables
Receivables | 9 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Receivables | Receivables As of March 31, 2017 and June 30, 2016 , our receivables consisted of the following: March 31, June 30, Receivables from oil and gas sales $ 3,353,528 $ 2,637,593 Receivable from settled derivatives 10,850 — Other 7,821 595 Total receivables $ 3,372,199 $ 2,638,188 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Mar. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets As of March 31, 2017 and June 30, 2016 , our prepaid expenses and other current assets consisted of the following: March 31, June 30, Prepaid insurance $ 71,911 $ 168,681 Retainers and deposits 7,553 30,568 Prepaid federal and state income taxes 531,713 — Other prepaid expenses 86,169 52,500 Prepaid expenses and other current assets $ 697,346 $ 251,749 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment As of March 31, 2017 and June 30, 2016 , our oil and natural gas properties and other property and equipment consisted of the following: March 31, June 30, Oil and natural gas properties Property costs subject to amortization $ 84,337,308 $ 77,408,353 Less: Accumulated depreciation, depletion, and amortization (21,565,780 ) (17,437,890 ) Unproved properties not subject to amortization — — Oil and natural gas properties, net $ 62,771,528 $ 59,970,463 Other property and equipment Furniture, fixtures, office equipment and other, at cost $ 231,432 $ 235,752 Less: Accumulated depreciation (186,238 ) (207,103 ) Other property and equipment, net $ 45,194 $ 28,649 During the nine months ended March 31, 2017 , the Company incurred capital expenditures of $6.9 million for the Delhi field, including approximately $4.8 million for the NGL plant project. We have incurred approximately $26.3 million on a cumulative basis for the NGL plant. |
Other Assets
Other Assets | 9 Months Ended |
Mar. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets As of March 31, 2017 and June 30, 2016 , other assets consisted of the following: March 31, June 30, Royalty rights $ 108,512 $ 108,512 Less: Accumulated amortization of royalty rights (16,955 ) (6,782 ) Investment in Well Lift Inc., at cost 108,750 108,750 Deferred loan costs 168,972 168,972 Less: Accumulated amortization of deferred loan costs (56,437 ) (13,963 ) Other assets, net $ 312,842 $ 365,489 The Company accounts for its investment in Well Lift Inc. using the cost method under which any return of capital reduces cost and any dividends paid are recorded as income. Investment value is evaluated for impairment at least quarterly or when management identifies any events or changes in circumstances that might have a significant adverse effect on the fair value of the investment. There is no published market value for this private investment, so it is not practicable to value it at fair market value on a periodic basis. |
Accrued Liabilities and Other
Accrued Liabilities and Other | 9 Months Ended |
Mar. 31, 2017 | |
Other Liabilities, Current [Abstract] | |
Accrued Liabilities and Other | Accrued Liabilities and Other As of March 31, 2017 and June 30, 2016 , our other current liabilities consisted of the following: March 31, June 30, Accrued incentive and other compensation $ 389,746 $ 999,172 Asset retirement obligations due within one year — 201,896 Accrued royalties, including suspended accounts 41,640 49,580 Accrued franchise taxes 114,651 62,834 Accrued restructuring costs 103,174 419,488 Payables for settled derivatives — 318,708 Other accrued liabilities 44,840 46,273 Accrued liabilities and other $ 694,051 $ 2,097,951 Accrued Restructuring Costs On December 31, 2015 we terminated three employees of the Company in connection with the separation of our artificial lift technology operations and recorded a $1,257,433 restructuring charge which consisted of $569,228 for the impairment of technology assets, $59,339 of stock-based compensation from accelerated vesting of terminated employees' equity awards and $628,866 of accrued salary and benefit continuation expenses. The separation agreements included releases from liabilities and other provisions including agreements not to compete. Our current estimate of remaining restructuring obligations as of March 31, 2017 is as follows: December 31, Payments (1) March 31, Salary expense $ 530,387 $ (441,989 ) $ 88,398 Payroll taxes and benefits expense 98,479 (83,703 ) 14,776 Accrued liability for restructuring costs $ 628,866 $ (525,692 ) $ 103,174 (1) During the nine months ended March 31, 2017 , we paid $265,193 of salary continuation and $51,121 of related payroll taxes and benefits. |
Asset Retirement Obligations
Asset Retirement Obligations | 9 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations Our asset retirement obligations represent the estimated present value of the amount we will incur to plug, abandon and remediate our producing properties at the end of their productive lives in accordance with applicable laws. The following is a reconciliation of the beginning and ending asset retirement obligations for the nine months ended March 31, 2017 and for the year ended June 30, 2016: March 31, June 30, Asset retirement obligations — beginning of period $ 962,196 $ 772,990 Liabilities incurred 14,119 28,505 Liabilities settled (157,164 ) — Liabilities sold (a) (47,817 ) — Accretion of discount 39,892 49,054 Revision of previous estimates — 111,647 Asset retirement obligations — end of period $ 811,226 $ 962,196 Less current portion in accrued liabilities (b) — (201,896 ) Long-term portion of asset retirement obligations $ 811,226 $ 760,300 (a) We conveyed our interest in a well to the previous operator in exchange for the assumption of our asset retirement obligation. (b) As we have now retired our remaining operated wells, our asset retirement obligations consist entirely of our working interest obligations in the Delhi field. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock As of March 31, 2017 , we had 33,062,297 sh ares of common stock outstanding. Commencing in December 2013, the Board of Directors initiated a quarterly cash dividend on our common stock at a quarterly rate of $0.10 per share. This rate was subsequently adjusted to $0.05 per share during the quarter ended March 31, 2015. During the nine months ended March 31, 2017 , the Board of Directors made two increases to the quarterly cash dividend resulting in rates of $0.065 per share for the December 31, 2016 dividend payment and $0.07 per share for the March 31, 2017 dividend payment. During the nine months ended March 31, 2017 , the Company declared three quarterly dividends on its common stock and paid $6,116,323 to its common stockholders. On May 12, 2015, the Board of Directors approved a share repurchase program covering up to $5 million of the Company's common stock. Since commencing in June 2015, 265,762 shares have been repurchased at an average price of $6.05 per share (totaling $1,609,008 ). There have been no shares repurchased in the open market since mid-December 2015. Under the program's terms, shares are repurchased only on the open market and in accordance with the requirements of the Securities and Exchange Commission. Such shares are initially recorded as treasury stock, then subsequently canceled. The timing and amount of repurchases depends upon several factors, including financial resources and market and business conditions. There is no fixed termination date for this repurchase program, and it may be suspended or discontinued at any time. During the nine months ended March 31, 2017 , the Company acquired 73,455 shares of treasury stock at an average cost of $6.26 per share (totaling $459,858 ) from holders of newly vested stock-based awards to fund the recipients' payroll taxes paid in the quarter. The treasury shares were subsequently canceled. During the nine months ended March 31, 2016 , the Company purchased 202,390 shares of treasury stock at an average cost of $5.80 per share (totaling $1,173,899 ) under its share repurchase program and also acquired 2,230 shares of treasury stock at an average cost of $5.25 per share (totaling $11,698 ) from holders of newly vested stock-based awards to fund the recipients' payroll taxes paid in the quarter. All treasury shares were subsequently canceled. Series A Cumulative Perpetual Preferred Stock Called for Redemption On September 30, 2016, the Company declared the preferred dividend for the month of October 2016 and elected to redeem all 317,319 outstanding shares of the Company’s 8.5% Series A Cumulative (perpetual) Preferred Stock. The redemption occurred on November 14, 2016 at the issue's $25.00 per share liquidation value plus all accumulated and unpaid distributions from October 31, 2016 (the last dividend payment date before the redemption date) through the redemption date, for an aggregate redemption price of approximately $25.082639 per share: Consideration paid to preferred shareholders at redemption at liquidation preference $ 7,932,975 Payments for dividends accrued at September 30, 2016 (1) $ 82,415 (1) Includes the monthly dividend for October 2016 declared by the Company. On September 30, 2016, in connection with the planned redemption, the Company recorded a deemed dividend of $1,002,440 , representing the difference between the redemption consideration paid and the historical net issuance proceeds of the preferred shares. Accordingly, net income was adjusted for this deemed dividend to determine net income attributable to common shareholders and earnings per common share. The Series A Cumulative Preferred Stock was not convertible into our common stock and there were no sinking fund or redemption rights available to the holders thereof. With respect to dividend rights and rights upon our liquidation, winding-up or dissolution, the Series A Preferred Stock ranked senior to our common stockholders, but subordinate to any of our existing and future debt. Dividends on the Series A Cumulative Preferred Stock accrued and accumulated at a fixed rate of 8.5% per annum on the $25.00 per share liquidation preference, payable monthly at $0.177083 per share, as, if and when declared by our Board of Directors through its Dividend Committee. We paid cash dividends of $250,990 and $505,726 to holders of our Series A Preferred Stock during the nine months ended March 31, 2017 and 2016 , respectively. Expected Tax Treatment of Dividends For the fiscal year ended June 30, 2016, all preferred and common dividends were treated for tax purposes as qualified dividend income to recipients. Based on our current projections for the fiscal year ending June 30, 2017, we also expect all common and remaining preferred dividends for such period will be treated as qualified dividend income. |
Stock-Based Incentive Plan
Stock-Based Incentive Plan | 9 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Incentive Plan | Stock-Based Incentive Plan At the December 8, 2016 annual meeting, the stockholders approved the adoption of the Evolution Petroleum Corporation 2016 Equity Incentive Plan (the “2016 Plan”), which replaced the Evolution Petroleum Corporation Amended and Restated 2004 Stock Plan (the "2004 Plan"). The 2016 Plan authorizes the issuance of 1,100,000 shares of common stock prior to its expiration on December 8, 2026. Incentives under the 2016 Plan may be granted to employees, directors and consultants of the Company in any one or a combination of the following forms: incentive stock options and non-statutory stock options, stock appreciation rights, restricted stock awards and restricted stock unit awards, performance share awards, performance cash awards, and other forms of incentives valued in whole or in part by reference to, or otherwise based on, our common stock, including its appreciation in value. As of March 31, 2017 , 1,100,000 shares were available for grant under the 2016 Plan. At March 31, 2017, there were no shares remaining available for grant under the 2004 Plan. We were authorized to issue 6,500,000 shares of common stock under the 2004 Plan prior to its scheduled expiration on October 24, 2017. In connection with the adoption of the 2016 Plan, the Board terminated the 2004 Plan on December 8, 2016 and 32,146 remaining reserved shares were released to the Company's authorized but unissued and unreserved shares. All outstanding awards granted under the 2004 Plan continue to be subject to the terms and conditions as set forth in the agreements evidencing such awards and the terms of the 2004 Plan. Under these agreements, we have granted option awards to purchase common stock (the "Stock Options"), restricted common stock awards ("Restricted Stock"), contingent restricted common stock awards ("Contingent Restricted Stock") and/or unrestricted fully vested common stock, to employees, directors, and consultants of the Company. Stock Options No Stock Options have been granted since August 2008 and all compensation costs attributable to Stock Options have been recognized in prior periods. The following summary presents information regarding outstanding Stock Options as of March 31, 2017 , and the changes during the period: Number of Stock Weighted Average Aggregate Weighted Stock Options outstanding at July 1, 2016 35,231 $ 2.19 Stock Options outstanding at March 31, 2017 35,231 $ 2.19 $ 204,692 0.4 Vested and exercisable at March 31, 2017 35,231 $ 2.19 $ 204,692 0.4 (1) Based upon the difference between the market price of our common stock on the last trading date of the period ( $8.00 as of March 31, 2017 ) and the Stock Option exercise price of in-the-money Stock Options. Restricted Stock and Contingent Restricted Stock Prior to August 28, 2014, all Restricted Stock grants contained a four -year vesting period based solely on service. Restricted Stock which vests based solely on service is valued at the fair market value on the date of grant and amortized over the service period. In August 2014, December 2015 and September 2016, the Company awarded grants of both Restricted Stock and Contingent Restricted Stock as part of its long-term incentive plan. Such grants, which expire after four years if unvested, contain service-based, performance-based and market-based vesting provisions. The common shares underlying the Restricted Stock grants were issued on the date of grant, whereas the Contingent Restricted Stock are reserved from the Plan, but will be issued only upon the attainment of specified performance-based or market-based vesting provisions. Performance-based grants vest upon the attainment of earnings, revenue and other operational goals and require that the recipient remain an employee or director of the Company through the vesting date. The Company recognizes compensation expense for performance-based awards ratably over the expected vesting period based on the grant date fair value when it is deemed probable, for accounting purposes, that the performance criteria will be achieved. The expected vesting period may be deemed to be shorter than the four -year term. As of March 31, 2017 , certain contingent performance-based awards were not considered probable of vesting for accounting purposes and no compensation expense has been recognized with regard to these awards. If these awards are later determined to be probable of vesting, cumulative compensation expense will be recorded at that time and amortization would continue over the remaining expected vesting period. Market-based awards granted in 2014 and 2015 entitle employees to vest in a fixed number of shares when the three-year trailing total return on the Company’s common stock exceeds the corresponding total returns of various quartiles of companies comprising the SIG Exploration and Production Index (NASDAQ EPX) during defined measurement periods. Market-based awards granted in 2016 entitle employees to vest in a fixed number of shares when the three-year trailing total return on the Company’s common stock exceeds the corresponding total returns of various quartiles of an index consisting of designated peer companies during defined measurement periods. The fair value and expected vesting period of these awards were determined using a Monte Carlo simulation based on the historical volatility of the Company's total return compared to the historical volatilities of the other companies in the index. During the nine months ended March 31, 2017 , we granted market-based awards with grant date fair values ranging from $3.42 to $5.62 per share, all with an expected vesting period of 2.83 years, based on the various quartiles of comparative market performance. During the fiscal year ended June 30, 2016, we granted market-based awards with grant date fair values ranging from $2.93 to $5.07 per share, all with an expected vesting period of 3.83 years , based on the various quartiles of comparative market performance. During the fiscal year ended June 30, 2015, we granted market-based awards with grant date fair values ranging from $4.26 to $8.40 per share and with expected vesting periods of 3.30 years to 2.55 years , based on the various quartiles of comparative market performance. Compensation expense for market-based awards is recognized over the expected vesting period using the straight-line method, so long as the award holder remains an employee of the Company. Total compensation expense is based on the fair value of the awards at the date of grant and is independent of vesting or expiration of the awards, except for termination of service. Unvested Restricted Stock awards at March 31, 2017 consisted of the following: Number of Weighted Service-based awards 219,940 $ 7.08 Performance-based awards 54,475 5.67 Market-based awards 119,227 4.97 Unvested Restricted Stock at March 31, 2017 393,642 $ 6.25 The following table sets forth the Restricted Stock transactions for the nine months ended March 31, 2017 : Number of Weighted Unamortized Compensation Expense at March 31, 2017 Weighted Average Remaining Amortization Period (Years) Unvested at July 1, 2016 406,848 $ 6.74 Service-based shares granted 86,563 7.02 Performance-based shares granted 54,475 5.67 Market-based shares granted 54,475 5.44 Vested (208,719 ) 7.17 Unvested Restricted Stock at March 31, 2017 393,642 $ 6.25 $ 1,923,545 2.2 Unvested Contingent Restricted Stock awards at March 31, 2017 consisted of the following: Number of Weighted Performance-based awards 39,403 $ 7.02 Market-based awards 73,867 3.37 Unvested contingent shares at March 31, 2017 113,270 $ 4.64 The following table sets forth Contingent Restricted Stock transactions for the nine months ended March 31, 2017 : Number of Weighted Unamortized Compensation Expense at March 31, 2017 (1) Weighted Average Remaining Amortization Period (Years) Unvested at July 1, 2016 91,172 $ 5.21 Performance-based awards granted 27,237 5.67 Market-based awards granted 27,237 3.42 Vested (32,376 ) 6.09 Unvested contingent shares at March 31, 2017 113,270 $ 4.64 $ 149,015 2.2 (1) Excludes $276,702 of potential future compensation expense for contingent performance-based awards for which vesting is not considered probable at this time for accounting purposes. Stock-based compensation expense related to Restricted Stock and Contingent Restricted Stock grants for the three months ended March 31, 2017 and 2016 was $291,151 and $277,907 , respectively. For the corresponding nine month periods, non-cash stock compensation expense was $878,023 and $768,085 , respectively. |
Derivatives
Derivatives | 9 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives In early June 2015, the Company began using derivative instruments to reduce its exposure to crude oil price volatility for a substantial portion of its near-term forecasted production. The Company's objectives for this program are to achieve a more predictable level of cash flows to support the Company’s capital expenditure program and to provide better financial visibility for the payment of dividends on common stock. The Company may use both fixed price swap agreements and costless collars to manage its exposure to crude oil price risk. While these derivative instruments are intended to limit the downside risk of adverse price movements, they may also limit future revenues from favorable price movements. The Company does not intend to enter into derivative instruments for speculative or trading purposes. The Company accounts for derivatives under the provisions of ASC 815 Derivatives and Hedgin g ("ASC 815") under which the Company records the fair value of the instruments on the balance sheet at each reporting date, with changes in fair value recognized in income. Given cost and complexity considerations, the Company did not elect to use cash flow hedge accounting provided under ASC 815. Under cash flow hedge accounting, the effective portion of the change in fair value of the derivative instruments would be deferred in other comprehensive income and not recognized in earnings until the underlying hedged item impacts earnings. These derivative instruments can result in both fair value asset and liability positions held with each counterparty. These positions are offset to a single net fair value asset or liability at the end of each reporting period. The Company nets its fair value amounts of derivative instruments executed with the same counterparty pursuant to ISDA master agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract. The Company monitors the credit rating of its counterparties and believes it does not have significant credit risk. Accordingly, we do not currently require our counterparties to post collateral to support the net asset positions of our derivative instruments. As such, the Company is exposed to credit risk to the extent of nonperformance by the counterparties to its derivative instruments. As of March 31, 2017 the Company held a net asset position with its counterparty which had a fair value of $47,965 and has not subsequently acquired any crude oil derivative positions. For the nine months ended March 31, 2017 , the Company recorded in the consolidated statement of operations a gain on derivative instruments of $37,273 consisting of a realized gain of $3,440 on settled derivatives and an unrealized net gain of $33,833 on unsettled derivatives. For the nine months ended March 31, 2016 , the Company recorded in its consolidated statement of operations a gain on derivative instruments of $4,079,738 consisting of an unrealized gain of $119,679 on open positions and a realized net gain of $3,960,059 on settled positions. The following sets forth a summary of the Company's crude oil derivative positions at average NYMEX WTI prices as of March 31, 2017 : Period Type of Contract Volumes (in Bbls./day) Weighted Average Floor Price per Bbl. Weighted Average Ceiling Price per Bbl. Months of April 2017 through May 2017 Costless Collar 819.7 $50.00 $58.00 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Accounting guidelines for measuring fair value establish a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows: Level 1—Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities. Level 2—Other inputs that are observable directly or indirectly such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3—Unobservable inputs for which there is little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities. Fair Value of Derivative Instruments. The following table summarize the location and amounts of the Company’s assets and liabilities measured at fair value on a recurring basis as presented in the consolidated balance sheets as of March 31, 2017 . All items included in the tables below are Level 2 inputs within the fair value hierarchy: March 31, 2017 Asset (Liability) Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheets Current derivative assets $ 49,366 $ (1,401 ) $ 47,965 Current derivative liabilities (1,401 ) 1,401 — Total $ 47,965 $ — $ 47,965 The fair values of the Company’s derivative assets and liabilities are based on a third-party industry-standard pricing model that uses market data obtained from third-party sources, including quoted forward prices for oil and gas, discount rates and volatility factors. The fair values are also compared to the values provided by the counterparty for reasonableness and are adjusted for the counterparty's credit quality for derivative assets and the Company’s credit quality for derivative liabilities. To date, adjustments for credit quality have not had a material impact on the fair values. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We file a consolidated federal income tax return in the United States and various combined and separate filings in several state and local jurisdictions. There were neither unrecognized tax benefits nor any accrued interest or penalties associated with unrecognized tax benefits during the nine months ended March 31, 2017 . We believe we have appropriate support for the income tax positions taken and to be taken on our tax returns and that the accruals for tax liabilities are adequate for all open years based on our assessment of various factors including past experience and interpretations of tax law applied to the facts of each matter. The Company’s federal and state income tax returns are open to audit under the statute of limitations for the years ended June 30, 2013 through June 30, 2016 for federal tax purposes and for the years ended June 30, 2011 through June 30, 2016 for state tax purposes. To the extent we utilize net operating losses generated in earlier years, such earlier years may also be subject to audit. We recognized income tax expense of $3,768,463 and $2,051,521 for the nine months ended March 31, 2017 and 2016 , respectively, with corresponding effective tax rates of 37% and 35% . Our effective tax rate will typically differ from the statutory federal rate as a result of state income taxes, primarily in the State of Louisiana, and differences related to percentage depletion in excess of basis, stock-based compensation and other permanent differences. The effective tax rate for the nine months ended March 31, 2017 was slightly higher than the statutory federal rate as a result of state income taxes and the tax effects of stock-based compensation, offset by percentage depletion in excess of basis. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The following table sets forth the computation of basic and diluted income per share: Three Months Ended March 31, Nine Months Ended March 31, 2017 2016 2017 2016 Numerator Net income (loss) available to common shareholders $ 2,419,143 $ (298,183 ) $ 5,290,122 $ 3,280,166 Denominator Weighted average number of common shares — Basic 33,062,297 32,879,381 33,021,865 32,779,234 Effect of dilutive securities: Contingent restricted stock grants 27,216 — 17,860 8,418 Stock options 26,186 — 24,983 47,113 Weighted average number of common shares and dilutive potential common shares used in diluted EPS 33,115,699 32,879,381 33,064,708 32,834,765 Net income (loss) per common share — Basic $ 0.07 $ (0.01 ) $ 0.16 $ 0.10 Net income (loss) per common share — Diluted $ 0.07 $ (0.01 ) $ 0.16 $ 0.10 Outstanding potentially dilutive securities as of March 31, 2017 were as follows: Outstanding Potentially Dilutive Securities Weighted At March 31, 2017 Contingent Restricted Stock grants $ — 113,270 Stock Options 2.19 35,231 Total outstanding potentially dilutive securities $ 0.52 148,501 Outstanding potentially dilutive securities as of March 31, 2016 were as follows: Outstanding Potentially Dilutive Securities Weighted At March 31, 2016 Contingent Restricted Stock grants $ — 91,172 Stock Options 2.36 65,231 Total outstanding potentially dilutive securities $ 0.98 156,403 |
Senior Secured Credit Agreement
Senior Secured Credit Agreement | 9 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Senior Secured Credit Agreement | Senior Secured Credit Agreement On April 11, 2016, the Company entered into a three -year, senior secured reserve-based credit facility ("Facility") in an amount up to $50 million . The Facility replaces the Company's previous unsecured credit facility which expired in April 2016. The initial borrowing base under the Facility was set at $10,000,000 . As of March 31, 2017 , the Company was in compliance with all covenants contained in the Facility, and no amounts were outstanding under the Facility. Borrowings from the Facility may be used for the acquisition and development of oil and gas properties and for letters of credit and other general corporate purposes. Availability of borrowings under the Facility is subject to semi-annual borrowing base redeterminations. The Facility included a placement fee of 0.50% on the initial borrowing base, amounting to $50,000 , and carries a commitment fee of 0.25% per annum on the undrawn portion of the borrowing base. Any borrowings under the Facility will bear interest, at the Company’s option, at either LIBOR plus 2.75% or the Prime Rate, as defined, plus 1.00% . The Facility contains financial covenants including a requirement that the Company maintain, as of the last day of each fiscal quarter, (a) a maximum total leverage ratio of not more than 3.00 to 1.00, (b) a debt service coverage ratio of not less than 1.10 to 1.00, and (c) a consolidated tangible net worth of not less than $40 million , all as defined under the Facility. In connection with this agreement, the Company incurred $168,972 of debt issuance costs. Such costs were capitalized in Other Assets and are being amortized to expense. The unamortized balance in debt issuance costs related to the Facility was $112,535 as of March 31, 2017 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to various claims and contingencies in the normal course of business. In addition, from time to time, we receive communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which we operate. At a minimum we disclose such matters if we believe it is reasonably possible that a future event or events will confirm a loss through impairment of an asset or the incurrence of a liability. We accrue a loss if we believe it is probable that a future event or events will confirm a loss and we can reasonably estimate such loss and we do not accrue future legal costs related to that loss. Furthermore, we will disclose any matter that is unasserted if we consider it probable that a claim will be asserted and there is a reasonable possibility that the outcome will be unfavorable. We expense legal defense costs as they are incurred. On December 3, 2013, our wholly owned subsidiary, NGS Sub Corp., was served with a lawsuit filed in the 8th Judicial District Court of Winn Parish, Louisiana by Cecil M. Brooks and Brandon Hawkins, residents of Louisiana, alleging that in 2006 a former subsidiary of NGS Sub Corp. improperly disposed of water from an off-lease well into a well located on the plaintiffs’ lands in Winn Parish. The plaintiffs requested monetary damages and other relief. The plaintiffs subsequently filed an amended petition joining the Company as defendants in its capacity as parent company of NGS Sub Corp. NGS Sub Corp. divested its ownership of the property in question along with its ownership of the subsidiary in 2008 to a third party. NGS Sub Corp. and the Company have denied the plaintiffs’ claims. The district court dismissed the claim of Brooks against NGS Sub Corp. and the Company because Brooks purchased the land where the well is located subsequent to the divestiture of the property by NGS Sub. Corp. The claim of Hawkins is still being defended. Trial is currently scheduled for late November 2017. We will continue to vigorously defend the claims and based on the input of our legal counsel, we consider the likelihood of a material loss to the Company in this matter to be remote. Lease Commitments. We have a non-cancelable operating lease for office space that expires on May 31, 2019. Future minimum lease commitments as of March 31, 2017 under this operating lease are as follows: Twelve months ended March 31, 2018 $ 73,073 2019 $ 73,073 2020 $ 12,179 Rent expense for the three months ended March 31, 2017 and 2016 was $14,656 and $46,286 , respectively. Rent expense for the corresponding nine month periods was $68,081 and $137,185 , respectively. |
Organization and Basis of Pre23
Organization and Basis of Preparation (Policies) | 9 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Reporting | Principles of Consolidation and Reporting. Our consolidated financial statements include the accounts of EPM and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The consolidated financial statements for the previous year include certain reclassifications that were made to conform to the current presentation. Such reclassifications have no impact on previously reported net income or stockholders' equity. As a result of the separation of our artificial lift technology operations at December 31, 2015, previously reported revenues for the Delhi field and our artificial lift technology operations have been reclassified as appropriate to crude oil, natural gas liquids, natural gas and artificial lift technology service revenues. Before the reclassification, artificial lift technology revenues included crude oil, natural gas liquids and gas revenues produced by certain of the Company’s operated wells which used our artificial lift technology, together with service revenues derived from the use of the Company’s technology on third party wells. Previously reported production costs for our artificial lift technology operations have been reclassified as appropriate to oil and gas production costs and cost of artificial lift technology services. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include (a) reserve quantities and estimated future cash flows associated with proved reserves, which significantly impact depletion expense and potential impairments of oil and natural gas properties, (b) asset retirement obligations, (c) stock-based compensation, (d) fair values of derivative assets and liabilities, (e) income taxes and the valuation of deferred tax assets and (f) commitments and contingencies. We analyze our estimates based on historical experience and various other assumptions that we believe to be reasonable. While we believe that our estimates and assumptions used in preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates. |
New Accounting Pronouncements | New Accounting Pronouncements. In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2015-14, which defers the effective date of ASU 2014-09 Revenue from Contracts with Customers (Topic 606) (" ASU 2014-09") by one year and allows entities the option to early adopt the new revenue standard as of the original effective date. Issued in May 2014, ASU 2014-09 provided guidance on revenue recognition on contracts with customers to transfer goods or services or on contracts for the transfer of nonfinancial assets. ASU 2014-09 requires that revenue recognition on contracts with customers depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public companies, ASU 2014-09 is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The standard provides for either the full retrospective or modified retrospective transition methods. We expect to adopt this standard using the modified retrospective method. The Company expects that additional disclosures will be required as a result of adopting ASU 2014-09 and is currently assessing the impact of the guidance on its consolidated financial statements. On February 25, 2016, the FASB issued ASU 2016-02 , Leases (“ASU 2016-02”), which relates to the accounting for leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than twelve months. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are evaluating the impact the adoption of ASU 2016-02 will have on our consolidated financial statements. New Accounting Pronouncements Adopted. The Company early adopted ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, to be applied prospectively effective for the three months ended September 30, 2016, the first quarter of our fiscal year. This amended guidance simplifies the balance sheet position presentation and reduces complexity in accounting for deferred income tax assets and liabilities. The update requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. As a result, current deferred tax assets of $105,321 have been netted together with noncurrent deferred income tax liabilities on the March 31, 2017 consolidated condensed balance sheet. The prior period presented has not been retrospectively adjusted. The Company early adopted ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting, effective for the three months ended September 30, 2016. This amended guidance simplifies and improves several aspects of the accounting for employee share-based payment transactions. Under previous guidance excess tax benefits were recognized as paid in capital to the extent they reduced cash taxes otherwise payable, and tax deficiencies were recognized as an offset to accumulated excess benefits, if any, or in the statement of operations. The new guidance requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statements of operations when the awards vest or are settled. Under the required modified retrospective transition, the Company had no cumulative-effect adjustment to retained earnings at the beginning of the period of adoption, as its accumulated excess tax benefits had been completely used in reducing taxable income for the year ended June 30, 2016. For vestings which occurred in the nine months ended March 31, 2017 , a related tax deficiency of $24,597 was recognized in income tax expense. The Company also elected to prospectively adopt the presentation of excess tax benefits in the operating section of the statements of cash flows. Accordingly, such statements for pre-adoption periods will continue to present excess tax benefits in the financing section. The amended guidance permits entities to make an accounting policy election related to how forfeitures will impact the recognition of compensation cost for stock-based compensation: to continue to estimate the total number of awards for which the requisite service period will not be rendered as currently required or, to be applied on a modified retrospective basis, to account for forfeitures as they occur. Upon early adoption, the Company elected to change its accounting policy to account for forfeitures as they occur. Except for income tax expense mentioned above, none of the other provisions in this amended guidance had a material impact on our condensed consolidated financial statements. |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Receivables | As of March 31, 2017 and June 30, 2016 , our receivables consisted of the following: March 31, June 30, Receivables from oil and gas sales $ 3,353,528 $ 2,637,593 Receivable from settled derivatives 10,850 — Other 7,821 595 Total receivables $ 3,372,199 $ 2,638,188 |
Prepaid Expenses and Other Cu25
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses and other current assets | As of March 31, 2017 and June 30, 2016 , our prepaid expenses and other current assets consisted of the following: March 31, June 30, Prepaid insurance $ 71,911 $ 168,681 Retainers and deposits 7,553 30,568 Prepaid federal and state income taxes 531,713 — Other prepaid expenses 86,169 52,500 Prepaid expenses and other current assets $ 697,346 $ 251,749 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of oil and natural gas properties and other property and equipment | As of March 31, 2017 and June 30, 2016 , our oil and natural gas properties and other property and equipment consisted of the following: March 31, June 30, Oil and natural gas properties Property costs subject to amortization $ 84,337,308 $ 77,408,353 Less: Accumulated depreciation, depletion, and amortization (21,565,780 ) (17,437,890 ) Unproved properties not subject to amortization — — Oil and natural gas properties, net $ 62,771,528 $ 59,970,463 Other property and equipment Furniture, fixtures, office equipment and other, at cost $ 231,432 $ 235,752 Less: Accumulated depreciation (186,238 ) (207,103 ) Other property and equipment, net $ 45,194 $ 28,649 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other assets | As of March 31, 2017 and June 30, 2016 , other assets consisted of the following: March 31, June 30, Royalty rights $ 108,512 $ 108,512 Less: Accumulated amortization of royalty rights (16,955 ) (6,782 ) Investment in Well Lift Inc., at cost 108,750 108,750 Deferred loan costs 168,972 168,972 Less: Accumulated amortization of deferred loan costs (56,437 ) (13,963 ) Other assets, net $ 312,842 $ 365,489 |
Accrued Liabilities and Other (
Accrued Liabilities and Other (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Other Liabilities, Current [Abstract] | |
Schedule of accrued liabilities | As of March 31, 2017 and June 30, 2016 , our other current liabilities consisted of the following: March 31, June 30, Accrued incentive and other compensation $ 389,746 $ 999,172 Asset retirement obligations due within one year — 201,896 Accrued royalties, including suspended accounts 41,640 49,580 Accrued franchise taxes 114,651 62,834 Accrued restructuring costs 103,174 419,488 Payables for settled derivatives — 318,708 Other accrued liabilities 44,840 46,273 Accrued liabilities and other $ 694,051 $ 2,097,951 |
Schedule of restructuring obligations | Our current estimate of remaining restructuring obligations as of March 31, 2017 is as follows: December 31, Payments (1) March 31, Salary expense $ 530,387 $ (441,989 ) $ 88,398 Payroll taxes and benefits expense 98,479 (83,703 ) 14,776 Accrued liability for restructuring costs $ 628,866 $ (525,692 ) $ 103,174 (1) During the nine months ended March 31, 2017 , we paid $265,193 of salary continuation and $51,121 of related payroll taxes and benefits. |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of reconciliations of the beginning and ending asset retirement obligation balances | The following is a reconciliation of the beginning and ending asset retirement obligations for the nine months ended March 31, 2017 and for the year ended June 30, 2016: March 31, June 30, Asset retirement obligations — beginning of period $ 962,196 $ 772,990 Liabilities incurred 14,119 28,505 Liabilities settled (157,164 ) — Liabilities sold (a) (47,817 ) — Accretion of discount 39,892 49,054 Revision of previous estimates — 111,647 Asset retirement obligations — end of period $ 811,226 $ 962,196 Less current portion in accrued liabilities (b) — (201,896 ) Long-term portion of asset retirement obligations $ 811,226 $ 760,300 (a) We conveyed our interest in a well to the previous operator in exchange for the assumption of our asset retirement obligation. (b) As we have now retired our remaining operated wells, our asset retirement obligations consist entirely of our working interest obligations in the Delhi field. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of preferred stock called for redemption | The redemption occurred on November 14, 2016 at the issue's $25.00 per share liquidation value plus all accumulated and unpaid distributions from October 31, 2016 (the last dividend payment date before the redemption date) through the redemption date, for an aggregate redemption price of approximately $25.082639 per share: Consideration paid to preferred shareholders at redemption at liquidation preference $ 7,932,975 Payments for dividends accrued at September 30, 2016 (1) $ 82,415 (1) Includes the monthly dividend for October 2016 declared by the Company. |
Stock-Based Incentive Plan (Tab
Stock-Based Incentive Plan (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of information regarding outstanding Stock Options and Incentive Warrants and the changes during the fiscal year | The following summary presents information regarding outstanding Stock Options as of March 31, 2017 , and the changes during the period: Number of Stock Weighted Average Aggregate Weighted Stock Options outstanding at July 1, 2016 35,231 $ 2.19 Stock Options outstanding at March 31, 2017 35,231 $ 2.19 $ 204,692 0.4 Vested and exercisable at March 31, 2017 35,231 $ 2.19 $ 204,692 0.4 (1) Based upon the difference between the market price of our common stock on the last trading date of the period ( $8.00 as of March 31, 2017 ) and the Stock Option exercise price of in-the-money Stock Options. |
Schedule of Restricted Stock transactions | Unvested Contingent Restricted Stock awards at March 31, 2017 consisted of the following: Number of Weighted Performance-based awards 39,403 $ 7.02 Market-based awards 73,867 3.37 Unvested contingent shares at March 31, 2017 113,270 $ 4.64 Unvested Restricted Stock awards at March 31, 2017 consisted of the following: Number of Weighted Service-based awards 219,940 $ 7.08 Performance-based awards 54,475 5.67 Market-based awards 119,227 4.97 Unvested Restricted Stock at March 31, 2017 393,642 $ 6.25 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Restricted Stock transactions | The following table sets forth the Restricted Stock transactions for the nine months ended March 31, 2017 : Number of Weighted Unamortized Compensation Expense at March 31, 2017 Weighted Average Remaining Amortization Period (Years) Unvested at July 1, 2016 406,848 $ 6.74 Service-based shares granted 86,563 7.02 Performance-based shares granted 54,475 5.67 Market-based shares granted 54,475 5.44 Vested (208,719 ) 7.17 Unvested Restricted Stock at March 31, 2017 393,642 $ 6.25 $ 1,923,545 2.2 |
Contingent Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Restricted Stock transactions | The following table sets forth Contingent Restricted Stock transactions for the nine months ended March 31, 2017 : Number of Weighted Unamortized Compensation Expense at March 31, 2017 (1) Weighted Average Remaining Amortization Period (Years) Unvested at July 1, 2016 91,172 $ 5.21 Performance-based awards granted 27,237 5.67 Market-based awards granted 27,237 3.42 Vested (32,376 ) 6.09 Unvested contingent shares at March 31, 2017 113,270 $ 4.64 $ 149,015 2.2 (1) Excludes $276,702 of potential future compensation expense for contingent performance-based awards for which vesting is not considered probable at this time for accounting purposes. |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following sets forth a summary of the Company's crude oil derivative positions at average NYMEX WTI prices as of March 31, 2017 : Period Type of Contract Volumes (in Bbls./day) Weighted Average Floor Price per Bbl. Weighted Average Ceiling Price per Bbl. Months of April 2017 through May 2017 Costless Collar 819.7 $50.00 $58.00 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities measured on recurring basis | The following table summarize the location and amounts of the Company’s assets and liabilities measured at fair value on a recurring basis as presented in the consolidated balance sheets as of March 31, 2017 . All items included in the tables below are Level 2 inputs within the fair value hierarchy: March 31, 2017 Asset (Liability) Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheets Current derivative assets $ 49,366 $ (1,401 ) $ 47,965 Current derivative liabilities (1,401 ) 1,401 — Total $ 47,965 $ — $ 47,965 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted income per share | The following table sets forth the computation of basic and diluted income per share: Three Months Ended March 31, Nine Months Ended March 31, 2017 2016 2017 2016 Numerator Net income (loss) available to common shareholders $ 2,419,143 $ (298,183 ) $ 5,290,122 $ 3,280,166 Denominator Weighted average number of common shares — Basic 33,062,297 32,879,381 33,021,865 32,779,234 Effect of dilutive securities: Contingent restricted stock grants 27,216 — 17,860 8,418 Stock options 26,186 — 24,983 47,113 Weighted average number of common shares and dilutive potential common shares used in diluted EPS 33,115,699 32,879,381 33,064,708 32,834,765 Net income (loss) per common share — Basic $ 0.07 $ (0.01 ) $ 0.16 $ 0.10 Net income (loss) per common share — Diluted $ 0.07 $ (0.01 ) $ 0.16 $ 0.10 |
Schedule of outstanding potentially dilutive securities | Outstanding potentially dilutive securities as of March 31, 2017 were as follows: Outstanding Potentially Dilutive Securities Weighted At March 31, 2017 Contingent Restricted Stock grants $ — 113,270 Stock Options 2.19 35,231 Total outstanding potentially dilutive securities $ 0.52 148,501 Outstanding potentially dilutive securities as of March 31, 2016 were as follows: Outstanding Potentially Dilutive Securities Weighted At March 31, 2016 Contingent Restricted Stock grants $ — 91,172 Stock Options 2.36 65,231 Total outstanding potentially dilutive securities $ 0.98 156,403 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease commitments under the operating lease | Future minimum lease commitments as of March 31, 2017 under this operating lease are as follows: Twelve months ended March 31, 2018 $ 73,073 2019 $ 73,073 2020 $ 12,179 |
Organization and Basis of Pre36
Organization and Basis of Preparation - Additional Information (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Decrease in current deferred tax assets | $ 0 | $ (105,321) |
Increase in noncurrent deferred tax liabilities | 14,814,714 | $ 11,840,693 |
Income Tax Expense | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Related tax deficiency | 24,597 | |
ASU 2015-07 | Adjustments for New Accounting Principle, Early Adoption | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Decrease in current deferred tax assets | 105,321 | |
Increase in noncurrent deferred tax liabilities | $ 105,321 |
Receivables (Details)
Receivables (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Receivables [Abstract] | ||
Receivables from oil and gas sales | $ 3,353,528 | $ 2,637,593 |
Receivable from settled derivatives | 10,850 | 0 |
Other | 7,821 | 595 |
Total receivables | $ 3,372,199 | $ 2,638,188 |
Prepaid Expenses and Other Cu38
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 71,911 | $ 168,681 |
Retainers and deposits | 7,553 | 30,568 |
Prepaid federal and state income taxes | 531,713 | 0 |
Other prepaid expenses | 86,169 | 52,500 |
Prepaid expenses and other current assets | $ 697,346 | $ 251,749 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2016 | |
Oil and natural gas properties | ||
Property costs subject to amortization | $ 84,337,308 | $ 77,408,353 |
Less: Accumulated depreciation, depletion, and amortization | (21,565,780) | (17,437,890) |
Unproved properties not subject to amortization | 0 | 0 |
Oil and natural gas properties, net | 62,771,528 | 59,970,463 |
Other property and equipment | ||
Furniture, fixtures, office equipment and other, at cost | 231,432 | 235,752 |
Less: Accumulated depreciation | (186,238) | (207,103) |
Other property and equipment, net | 45,194 | $ 28,649 |
Delhi field | ||
Other property and equipment | ||
Capital expenditures | 6,900,000 | |
NGL Plant Project | ||
Other property and equipment | ||
Capital expenditures | 4,800,000 | |
Incurred costs on a cumulative basis | $ 26,300,000 |
Other Assets (Details)
Other Assets (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Royalty rights | $ 108,512 | $ 108,512 |
Less: Accumulated amortization of royalty rights | (16,955) | (6,782) |
Investment in Well Lift Inc., at cost | 108,750 | 108,750 |
Deferred loan costs | 168,972 | 168,972 |
Less: Accumulated amortization of deferred loan costs | (56,437) | (13,963) |
Other assets, net | $ 312,842 | $ 365,489 |
Accrued Liabilities and Other41
Accrued Liabilities and Other (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2015 | |
Other Liabilities, Current [Abstract] | ||||
Accrued incentive and other compensation | $ 389,746 | $ 999,172 | ||
Asset retirement obligations due within one year | [1] | 0 | 201,896 | |
Accrued royalties, including suspended accounts | 41,640 | 49,580 | ||
Accrued franchise taxes | 114,651 | 62,834 | ||
Accrued restructuring costs | 103,174 | 419,488 | $ 628,866 | |
Payables for settled derivatives | 0 | 318,708 | ||
Other accrued liabilities | 44,840 | 46,273 | ||
Accrued liabilities and other | $ 694,051 | $ 2,097,951 | ||
[1] | As we have now retired our remaining operated wells, our asset retirement obligations consist entirely of our working interest obligations in the Delhi field. |
Accrued Liabilities and Other -
Accrued Liabilities and Other - Additional Information (Details) | Dec. 31, 2015USD ($)employee | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | [1] | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($) | Jun. 30, 2016USD ($) | ||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Number of employees terminated | employee | 3 | |||||||||||
Restructuring charges | $ 1,257,433 | $ 0 | [1] | $ 0 | $ 0 | [1] | $ 1,257,433 | [1] | ||||
Impairments included in restructuring charge | 569,228 | 0 | 569,228 | |||||||||
Stock-based compensation | 878,023 | 768,085 | ||||||||||
Accrued restructuring costs | 628,866 | $ 103,174 | 103,174 | $ 103,174 | $ 419,488 | |||||||
Payments for restructuring | [2] | $ 525,692 | ||||||||||
Restructuring charges | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Stock-based compensation | $ 59,339 | $ 59,339 | ||||||||||
Salary continuation | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Payments for restructuring | 265,193 | |||||||||||
Related payroll taxes and benefits | ||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||
Payments for restructuring | $ 51,121 | |||||||||||
[1] | Restructuring charges include $569,228 of non-cash impairment charges and $59,339 of non-cash stock compensation expense for the nine months ended March 31, 2016. | |||||||||||
[2] | During the nine months ended March 31, 2017, we paid $265,193 of salary continuation and $51,121 of related payroll taxes and benefits. |
Accrued Liabilities and Other43
Accrued Liabilities and Other - Restructuring Obligations (Details) - USD ($) | 9 Months Ended | 15 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2017 | ||
Restructuring Reserve [Roll Forward] | |||
Restructuring, beginning balance | $ 419,488 | $ 628,866 | |
Payments | [1] | (525,692) | |
Restructuring, ending balance | 103,174 | 103,174 | |
Salary expense | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring, beginning balance | 530,387 | ||
Payments | [1] | (441,989) | |
Restructuring, ending balance | 88,398 | 88,398 | |
Payroll taxes and benefits expense | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring, beginning balance | 98,479 | ||
Payments | [1] | (83,703) | |
Restructuring, ending balance | $ 14,776 | $ 14,776 | |
[1] | During the nine months ended March 31, 2017, we paid $265,193 of salary continuation and $51,121 of related payroll taxes and benefits. |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | ||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||||||
Asset retirement obligations — beginning of period | $ 962,196 | $ 772,990 | |||||
Liabilities incurred | 14,119 | $ 28,505 | |||||
Liabilities settled | (157,164) | 0 | |||||
Liabilities sold | [1] | (47,817) | 0 | ||||
Accretion of discount | $ 13,562 | $ 11,695 | 39,892 | $ 34,555 | 49,054 | ||
Revision of previous estimates | 0 | 111,647 | |||||
Asset retirement obligations — end of period | 811,226 | 811,226 | $ 772,990 | ||||
Less current portion in accrued liabilities | [2] | 0 | 0 | $ (201,896) | |||
Long-term portion of asset retirement obligations | $ 811,226 | $ 811,226 | $ 760,300 | ||||
[1] | We conveyed our interest in a well to the previous operator in exchange for the assumption of our asset retirement obligation. | ||||||
[2] | As we have now retired our remaining operated wells, our asset retirement obligations consist entirely of our working interest obligations in the Delhi field. |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Dividends and Buyback Program (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 16 Months Ended | |||||
Dec. 31, 2016$ / shares | Jun. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2013$ / shares | Mar. 31, 2017quarterly_dividend$ / sharesshares | Mar. 31, 2015$ / shares | Mar. 31, 2017USD ($)increasequarterly_dividend$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | Mar. 31, 2017quarterly_dividendshares | May 12, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock outstanding | shares | 33,062,297 | 33,062,297 | 33,062,297 | ||||||
Cash dividend (in dollars per share) | $ / shares | $ 0.065 | $ 0.10 | $ 0.07 | $ 0.05 | |||||
Number of increases to quarterly cash dividend | increase | 2 | ||||||||
Cash dividends to common stockholders | $ 6,116,323 | ||||||||
Common Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of quarterly dividends declared | quarterly_dividend | 3 | 3 | 3 | ||||||
Number of shares repurchased | shares | 73,455 | 2,230 | |||||||
Average price of shares repurchased (in dollars per share) | $ / shares | $ 6.26 | $ 5.25 | |||||||
Value of shares repurchased | $ 459,858 | $ 11,698 | |||||||
Common Stock | 2015 Share Repurchase Program | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Authorized amount to be repurchased | $ 5,000,000 | ||||||||
Number of shares repurchased | shares | 265,762 | 202,390 | 0 | ||||||
Average price of shares repurchased (in dollars per share) | $ / shares | $ 6.05 | $ 5.80 | |||||||
Value of shares repurchased | $ 1,609,008 | $ 1,173,899 |
Stockholders' Equity - Series A
Stockholders' Equity - Series A Cumulative Perpetual Preferred Stock (Details) - USD ($) | Sep. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | |
Series A Cumulative Perpetual Preferred Stock | |||||
Consideration paid to preferred shareholders at redemption at liquidation preference | $ 7,932,975 | ||||
Cash dividends to preferred stockholders | 250,990 | $ 505,726 | |||
Preferred | |||||
Series A Cumulative Perpetual Preferred Stock | |||||
Consideration paid to preferred shareholders at redemption at liquidation preference | $ 317 | ||||
Series A cumulative perpetual preferred stock | |||||
Series A Cumulative Perpetual Preferred Stock | |||||
Preferred stock dividend rate (as a percent) | 8.50% | 8.50% | |||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | ||||
Series A cumulative perpetual preferred stock | Preferred | |||||
Series A Cumulative Perpetual Preferred Stock | |||||
Number of shares sold of series A cumulative perpetual preferred stock | 317,319 | ||||
Preferred stock dividend rate (as a percent) | 8.50% | 8.50% | |||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | |||
Redemption price per share (in dollars per share) | $ 25.082639 | ||||
Consideration paid to preferred shareholders at redemption at liquidation preference | $ 7,932,975 | ||||
Payments for dividends accrued | [1] | 82,415 | |||
Deemed dividend | $ 1,002,440 | ||||
Amount of sinking fund available to stockholders | $ 0 | ||||
Dividend payable monthly on preferred stock (in dollars per share) | $ 0.177083 | ||||
Cash dividends to preferred stockholders | $ 250,990 | $ 505,726 | |||
[1] | Includes the monthly dividend for October 2016 declared by the Company. |
Stock-Based Incentive Plan - Na
Stock-Based Incentive Plan - Narrative (Details) - USD ($) | Aug. 27, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 08, 2016 |
Restricted Stock, Market-Based | ||||||||
Stock-Based Incentive Plan | ||||||||
Vesting period | 2 years 9 months 29 days | 3 years 303 days | ||||||
Fair value at grant date, per share (in dollars per share) | $ 5.44 | |||||||
Restricted Stock and Contingent Restricted Stock | ||||||||
Stock-Based Incentive Plan | ||||||||
Stock-based compensation expense | $ 291,151 | $ 277,907 | $ 878,023 | $ 768,085 | ||||
2016 Plan | ||||||||
Stock-Based Incentive Plan | ||||||||
Number of shares of common stock authorized for issuance under plan | 1,100,000 | |||||||
Number of shares remaining available for grant under plan | 1,100,000 | 1,100,000 | ||||||
2004 Stock Plan | ||||||||
Stock-Based Incentive Plan | ||||||||
Number of shares of common stock authorized for issuance under plan | 6,500,000 | 6,500,000 | ||||||
Number of shares remaining available for grant under plan | 0 | 0 | 32,146 | |||||
2004 Stock Plan | Restricted Stock | ||||||||
Stock-Based Incentive Plan | ||||||||
Vesting period | 4 years | |||||||
2004 Stock Plan | Restricted Stock and Contingent Restricted Stock | ||||||||
Stock-Based Incentive Plan | ||||||||
Expiration period | 4 years | |||||||
2004 Stock Plan | Performance-based Awards | ||||||||
Stock-Based Incentive Plan | ||||||||
Vesting period | 4 years | |||||||
Minimum | Restricted Stock, Market-Based | ||||||||
Stock-Based Incentive Plan | ||||||||
Vesting period | 3 years 109 days | |||||||
Fair value at grant date, per share (in dollars per share) | $ 3.42 | $ 2.93 | $ 4.26 | |||||
Maximum | Restricted Stock, Market-Based | ||||||||
Stock-Based Incentive Plan | ||||||||
Vesting period | 2 years 200 days | |||||||
Fair value at grant date, per share (in dollars per share) | $ 5.62 | $ 5.07 | $ 8.40 |
Stock-Based Incentive Plan - St
Stock-Based Incentive Plan - Stock Options and Incentive Warrants (Details) | 9 Months Ended | |
Mar. 31, 2017USD ($)$ / sharesshares | ||
Common Stock | ||
Additional disclosures of Stock Options and Incentive Warrants | ||
Market price of common stock on the last trading date of the period (in dollars per share) | $ 8 | |
Stock Options | ||
Number of Stock Options | ||
Stock Options outstanding at the beginning of the period (in shares) | shares | 35,231 | |
Stock Options outstanding at the end of the period (in shares) | shares | 35,231 | |
Vest and Exercisable at the end of the period (in shares) | shares | 35,231 | |
Weighted Average Exercise Price | ||
Stock Options outstanding at the beginning of the period (in dollars per share) | $ 2.19 | |
Stock Options outstanding at the end of the period (in dollars per share) | 2.19 | |
Vested and Exercisable at the end of the period (in dollars per share) | $ 2.19 | |
Aggregate Intrinsic Value, Stock Options outstanding | $ | $ 204,692 | [1] |
Aggregate Intrinsic Value, Vested and Exercisable | $ | $ 204,692 | [1] |
Weighted Average Remaining Contractual Term, Stock Options outstanding | 4 months 24 days | |
Weighted Average Remaining Contractual Term, Vested and Exercisable | 4 months 24 days | |
[1] | Based upon the difference between the market price of our common stock on the last trading date of the period ($8.00 as of March 31, 2017) and the Stock Option exercise price of in-the-money Stock Options. |
Stock-Based Incentive Plan - Un
Stock-Based Incentive Plan - Unvested Restricted Stock (Details) | 9 Months Ended | |
Mar. 31, 2017USD ($)$ / sharesshares | ||
Restricted Stock, Service-Based | ||
Number of Restricted Shares | ||
Granted (in shares) | shares | 86,563 | |
Unvested at the end of the period (in shares) | shares | 219,940 | |
Weighted Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ / shares | $ 7.02 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 7.08 | |
Restricted Stock, Performance-Based | ||
Number of Restricted Shares | ||
Granted (in shares) | shares | 54,475 | |
Unvested at the end of the period (in shares) | shares | 54,475 | |
Weighted Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ / shares | $ 5.67 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 5.67 | |
Restricted Stock, Market-Based | ||
Number of Restricted Shares | ||
Granted (in shares) | shares | 54,475 | |
Unvested at the end of the period (in shares) | shares | 119,227 | |
Weighted Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ / shares | $ 5.44 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 4.97 | |
Restricted Stock | ||
Number of Restricted Shares | ||
Unvested at the beginning of the period (in shares) | shares | 406,848 | |
Vested (in shares) | shares | (208,719) | |
Unvested at the end of the period (in shares) | shares | 393,642 | |
Weighted Average Grant-Date Fair Value | ||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 6.74 | |
Vested (in dollars per share) | $ / shares | 7.17 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 6.25 | |
Additional disclosures of restricted stock | ||
Unrecognized stock compensation expense related to Restricted Stock | $ | $ 1,923,545 | |
Weighted average remaining service period over which unrecognized compensation cost is expected to be recognized | 2 years 2 months 12 days | |
Contingent Restricted Stock, Performance-Based | ||
Number of Restricted Shares | ||
Granted (in shares) | shares | 27,237 | |
Unvested at the end of the period (in shares) | shares | 39,403 | |
Weighted Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ / shares | $ 5.67 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 7.02 | |
Additional disclosures of restricted stock | ||
Potential future compensation expense | $ | $ 276,702 | |
Contingent Restricted Stock, Market-Based | ||
Number of Restricted Shares | ||
Granted (in shares) | shares | 27,237 | |
Unvested at the end of the period (in shares) | shares | 73,867 | |
Weighted Average Grant-Date Fair Value | ||
Granted (in dollars per share) | $ / shares | $ 3.42 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 3.37 | |
Contingent Restricted Stock | ||
Number of Restricted Shares | ||
Unvested at the beginning of the period (in shares) | shares | 91,172 | |
Vested (in shares) | shares | (32,376) | |
Unvested at the end of the period (in shares) | shares | 113,270 | |
Weighted Average Grant-Date Fair Value | ||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 5.21 | |
Vested (in dollars per share) | $ / shares | 6.09 | |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 4.64 | |
Additional disclosures of restricted stock | ||
Unrecognized stock compensation expense related to Restricted Stock | $ | $ 149,015 | [1] |
Weighted average remaining service period over which unrecognized compensation cost is expected to be recognized | 2 years 2 months 12 days | |
[1] | Excludes $276,702 of potential future compensation expense for contingent performance-based awards for which vesting is not considered probable at this time for accounting purposes. |
Derivatives (Details)
Derivatives (Details) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017USD ($)$ / bbl | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($)$ / bblbbl | Mar. 31, 2016USD ($) | |
Derivative [Line Items] | ||||
Gain on derivatives | $ 37,273 | $ 4,079,738 | ||
Gain on settled derivatives | 3,440 | 119,679 | ||
Gain on unrealized derivative instruments, net | $ 47,965 | $ (1,314,044) | 33,833 | 119,679 |
Unrealized gain on open positions | $ 3,960,059 | |||
Options Held | Crude Oil | ||||
Derivative [Line Items] | ||||
Derivatives held | $ 47,965 | $ 47,965 | ||
Volumes (in Bbls./day) | bbl | 819.6721311475 | |||
Weighted Average Floor Price ($ per Bbl) | $ / bbl | 50 | 50 | ||
Weighted Average Ceiling Price ($ per Bbl) | $ / bbl | 58 | 58 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Level 2 | Mar. 31, 2017USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Current derivative assets, Gross Amounts Recognized | $ 49,366 |
Current derivative assets, Gross Amounts Offset in the Consolidated Balance Sheet | (1,401) |
Current derivative assets, Net Amounts Presented in the Consolidated Balance Sheets | 47,965 |
Current derivative liabilities, Gross Amounts Recognized | (1,401) |
Current derivative liabilities, Gross Amounts Offset in the Consolidated Balance Sheet | 1,401 |
Current derivative liabilities, Net Amounts Presented in the Consolidated Balance Sheets | 0 |
Total, Gross Amounts Recognized | 47,965 |
Total, Gross Amounts Offset in the Consolidated Balance Sheet | 0 |
Total, Net Amounts Presented in the Consolidated Balance Sheets | $ 47,965 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,518,190 | $ (72,337) | $ 3,768,463 | $ 2,051,521 |
Income tax expense, effective rates (as a percent) | 37.00% | 35.00% |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator | ||||
Net income (loss) available to common shareholders | $ 2,419,143 | $ (298,183) | $ 5,290,122 | $ 3,280,166 |
Denominator | ||||
Weighted average number of common shares — Basic (in shares) | 33,062,297 | 32,879,381 | 33,021,865 | 32,779,234 |
Effect of dilutive securities: | ||||
Weighted average number of common shares and dilutive potential common shares used in diluted EPS (in shares) | 33,115,699 | 32,879,381 | 33,064,708 | 32,834,765 |
Net income (loss) per common share - Basic (in dollars per share) | $ 0.07 | $ (0.01) | $ 0.16 | $ 0.10 |
Net income (loss) per common share - Diluted (in dollars per share) | $ 0.07 | $ (0.01) | $ 0.16 | $ 0.10 |
Contingent restricted stock grants | ||||
Effect of dilutive securities: | ||||
Weighted average of securities (in shares) | 27,216 | 0 | 17,860 | 8,418 |
Stock options | ||||
Effect of dilutive securities: | ||||
Weighted average of securities (in shares) | 26,186 | 0 | 24,983 | 47,113 |
Net Income Per Share - Schedu54
Net Income Per Share - Schedule of Dilutive Securities (Details) - $ / shares | 9 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Outstanding Potential Dilutive Securities | ||
Weighted Average Exercise Price (in dollars per share) | $ 0.52 | $ 0.98 |
Balance at the end of the period (in shares) | 148,501 | 156,403 |
Contingent restricted stock grants | ||
Outstanding Potential Dilutive Securities | ||
Weighted Average Exercise Price (in dollars per share) | $ 0 | $ 0 |
Balance at the end of the period (in shares) | 113,270 | 91,172 |
Stock options | ||
Outstanding Potential Dilutive Securities | ||
Weighted Average Exercise Price (in dollars per share) | $ 2.19 | $ 2.36 |
Balance at the end of the period (in shares) | 35,231 | 65,231 |
Senior Secured Credit Agreeme55
Senior Secured Credit Agreement (Details) - Senior Secured Reserve-Based Credit Facility - Line of Credit - Revolving credit facility | Apr. 11, 2016USD ($) | Mar. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||
Term of revolving credit facility | 3 years | |
Maximum amount available under revolving credit facility | $ 50,000,000 | |
Initial borrowing base | $ 10,000,000 | |
Amount outstanding | $ 0 | |
Placement fee percentage | 0.50% | |
Placement fee percentage | $ 50,000 | |
Commitment fee percentage | 0.25% | |
Maximum total leverage ratio (not more than) | 3 | |
Debt service coverage ratio (not less than) | 1.10 | |
Minimum consolidated tangible net worth | $ 40,000,000 | |
Debt issuance costs | $ 168,972 | |
Unamortized debt issuance costs | $ 112,535 | |
LIBOR | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.75% | |
Prime rate | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.00% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Mar. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 73,073 |
2,019 | 73,073 |
2,020 | $ 12,179 |
Commitments and Contingencies57
Commitments and Contingencies - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 14,656 | $ 46,286 | $ 68,081 | $ 137,185 |