Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 13, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | PEDEVCO Corp. | |
Entity Central Index Key | 0001141197 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 79,461,603 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-35922 | |
Entity Incorporation State Country Code | TX | |
Entity Tax Identification Number | 22-3755993 | |
Entity Address Address Line 1 | 575 N. Dairy Ashford | |
Entity Address Address Line 2 | Suite 210 | |
Entity Address City Or Town | Houston | |
Entity Address State Or Province | TX | |
Entity Address Postal Zip Code | 77079 | |
City Area Code | 713 | |
Local Phone Number | 221-1768 | |
Security 12b Title | Common Stock, $0.001 par value per share | |
Trading Symbol | PED | |
Security Exchange Name | NYSEAMER | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 19,335,000 | $ 8,027,000 |
Accounts receivable - oil and gas | 1,537,000 | 660,000 |
Prepaid expenses and other current assets | 27,000 | 66,000 |
Total current assets | 20,899,000 | 8,753,000 |
Oil and gas properties: | ||
Oil and gas properties, subject to amortization, net | 65,152,000 | 66,994,000 |
Oil and gas properties, not subject to amortization, net | 4,000 | 4,000 |
Total oil and gas properties, net | 65,156,000 | 66,998,000 |
Operating lease - right-of-use asset | 222,000 | 270,000 |
Other assets | 3,563,000 | 3,543,000 |
Total assets | 89,840,000 | 79,564,000 |
Current liabilities: | ||
Accounts payable | 652,000 | 212,000 |
Accrued expenses | 401,000 | 303,000 |
Revenue payable | 904,000 | 836,000 |
PPP loan, current | 0 | 288,000 |
Operating lease liabilities - current | 109,000 | 105,000 |
Asset retirement obligations - current | 189,000 | 234,000 |
Total current liabilities | 2,255,000 | 1,978,000 |
Long-term liabilities: | ||
PPP loan, net of current portion | 0 | 82,000 |
Operating lease liabilities, net of current portion | 139,000 | 195,000 |
Asset retirement obligations, net of current portion | 1,795,000 | 1,673,000 |
Total liabilities | 4,189,000 | 3,928,000 |
Shareholders' equity: | ||
Common stock, $0.001 par value, 200,000,000 shares authorized; 79,461,603 and 72,463,340 shares issued and outstanding, respectively | 79,000 | 72,000 |
Additional paid-in capital | 213,355,000 | 203,850,000 |
Accumulated deficit | (127,783,000) | (128,286,000) |
Total shareholders' equity | 85,651,000 | 75,636,000 |
Total liabilities and shareholders' equity | $ 89,840,000 | $ 79,564,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Stockholders' Equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 79,461,603 | 72,463,340 |
Common stock, shares outstanding | 79,461,603 | 72,463,340 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue: | ||||
Oil and gas sales | $ 3,740,000 | $ 656,000 | $ 7,271,000 | $ 3,488,000 |
Operating expenses: | ||||
Lease operating costs | 1,455,000 | 750,000 | 2,741,000 | 2,272,000 |
Exploration expense | 0 | 0 | 0 | 30,000 |
Selling, general and administrative expense | 1,330,000 | 1,422,000 | 3,097,000 | 3,545,000 |
Depreciation, depletion, amortization and accretion | 1,602,000 | 1,912,000 | 3,163,000 | 5,349,000 |
Total operating expenses | 4,387,000 | 4,084,000 | 9,001,000 | 11,196,000 |
Gain on sale of oil and gas properties | 0 | 0 | (1,805,000) | 0 |
Operating income (loss) | (647,000) | (3,428,000) | 75,000 | (7,708,000) |
Other income (expense): | ||||
Interest expense | 0 | 0 | (1,000) | 0 |
Interest income | 3,000 | 8,000 | 7,000 | 32,000 |
Other income | 45,000 | 679,000 | 48,000 | 678,000 |
Gain on forgiveness of PPP loan | 374,000 | 0 | 374,000 | 0 |
Total other income | 422,000 | 687,000 | 428,000 | 710,000 |
Net income (loss) | $ (225,000) | $ (2,741,000) | $ 503,000 | $ (6,998,000) |
Loss per common share: | ||||
Basic | $ 0 | $ (0.04) | $ 0.01 | $ (0.10) |
Diluted | $ 0 | $ (0.04) | $ 0.01 | $ (0.10) |
Weighted average number of common shares outstanding: | ||||
Basic | 79,461,603 | 72,125,328 | 78,157,942 | 72,060,812 |
Diluted | 79,461,603 | 72,125,328 | 78,233,772 | 72,060,812 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 503,000 | $ (6,998,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation, depletion, amortization and accretion | 3,163,000 | 5,349,000 |
Gain on sale of oil and gas properties | 1,805,000 | 0 |
Loss on disposal of fixed asset | 0 | 24,000 |
Amortization of right-of-use asset | 48,000 | 44,000 |
Share-based compensation expense | 1,275,000 | 1,572,000 |
Gain on forgiveness of PPP loan | (374,000) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable - oil and gas | (877,000) | 3,956,000 |
Prepaid expenses and other current assets | 39,000 | 40,000 |
Accounts payable | 331,000 | (2,199,000) |
Accrued expenses | 102,000 | (1,673,000) |
Revenue payable | 68,000 | (28,000) |
Net cash provided by operating activities | 2,473,000 | 87,000 |
Cash Flows From Investing Activities: | ||
Cash paid for property and equipment | (35,000) | 0 |
Cash paid for drilling and completion costs | (1,238,000) | (12,663,000) |
Proceeds from the sale of oil and gas property | 1,871,000 | 0 |
Net cash provided by (used in) investing activities | 598,000 | (12,663,000) |
Cash Flows From Financing Activities: | ||
Proceeds from PPP loan | 0 | 740,000 |
Repayment of PPP loan | 0 | (370,000) |
Proceeds from issuance of shares, net of offering costs | 8,237,000 | 0 |
Net cash provided by financing activities | 8,237,000 | 370,000 |
Net increase (decrease) in cash and restricted cash | 11,308,000 | (12,206,000) |
Cash and restricted cash at beginning of period | 11,324,000 | 25,712,000 |
Cash and restricted cash at end of period | 22,632,000 | 13,506,000 |
Cash paid for: | ||
Interest | 0 | 0 |
Income taxes | 0 | 0 |
Noncash investing and financing activities: | ||
Change in accrued oil and gas development costs | 16,000 | 7,261,000 |
Changes in estimates of asset retirement costs, net | 54,000 | 230,000 |
Issuance of restricted common stock | $ 1,000 | $ 1,000 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 71,061,328 | |||
Balance, amount at Dec. 31, 2019 | $ 105,502,000 | $ 71,000 | $ 201,027,000 | $ (95,596,000) |
Issuance of restricted common stock, shares | 1,119,000 | |||
Issuance of restricted common stock, amount | 0 | $ 1,000 | (1,000) | 0 |
Rescinded restricted common stock, shares | (55,000) | |||
Rescinded restricted common stock, amount | 0 | $ 0 | 0 | 0 |
Share-based compensation | 853,000 | 0 | 853,000 | 0 |
Net loss | (4,257,000) | $ 0 | 0 | (4,257,000) |
Balance, shares at Mar. 31, 2020 | 72,125,328 | |||
Balance, amount at Mar. 31, 2020 | 102,098,000 | $ 72,000 | 201,879,000 | (99,853,000) |
Balance, shares at Dec. 31, 2019 | 71,061,328 | |||
Balance, amount at Dec. 31, 2019 | 105,502,000 | $ 71,000 | 201,027,000 | (95,596,000) |
Net loss | (6,998,000) | |||
Balance, shares at Jun. 30, 2020 | 72,125,328 | |||
Balance, amount at Jun. 30, 2020 | 100,076,000 | $ 72,000 | 202,598,000 | (102,594,000) |
Balance, shares at Mar. 31, 2020 | 72,125,328 | |||
Balance, amount at Mar. 31, 2020 | 102,098,000 | $ 72,000 | 201,879,000 | (99,853,000) |
Share-based compensation | 719,000 | 0 | 719,000 | 0 |
Net loss | (2,741,000) | $ 0 | 0 | (2,741,000) |
Balance, shares at Jun. 30, 2020 | 72,125,328 | |||
Balance, amount at Jun. 30, 2020 | 100,076,000 | $ 72,000 | 202,598,000 | (102,594,000) |
Balance, shares at Dec. 31, 2020 | 72,463,340 | |||
Balance, amount at Dec. 31, 2020 | 75,636,000 | $ 72,000 | 203,850,000 | (128,286,000) |
Issuance of restricted common stock, shares | 960,000 | |||
Issuance of restricted common stock, amount | 0 | $ 1,000 | (1,000) | 0 |
Rescinded restricted common stock, shares | (16,667) | |||
Rescinded restricted common stock, amount | 0 | $ 0 | 0 | 0 |
Share-based compensation | 684,000 | 0 | 684,000 | 0 |
Net loss | 728,000 | $ 0 | 0 | 728,000 |
Issuance of common stock to non-affiliate, shares | 5,968,500 | |||
Issuance of common stock to non-affiliate, amount | 8,303,000 | $ 6,000 | 8,297,000 | 0 |
Cashless exercise of stock options, shares | 86,430 | |||
Cashless exercise of stock options, amount | 0 | $ 0 | 0 | 0 |
Balance, shares at Mar. 31, 2021 | 79,461,603 | |||
Balance, amount at Mar. 31, 2021 | 85,351,000 | $ 79,000 | 212,830,000 | (127,558,000) |
Balance, shares at Dec. 31, 2020 | 72,463,340 | |||
Balance, amount at Dec. 31, 2020 | 75,636,000 | $ 72,000 | 203,850,000 | (128,286,000) |
Net loss | $ 503,000 | |||
Cashless exercise of stock options, shares | 191,999 | |||
Balance, shares at Jun. 30, 2021 | 79,461,603 | |||
Balance, amount at Jun. 30, 2021 | $ 85,651,000 | $ 79,000 | 213,355,000 | (127,783,000) |
Balance, shares at Mar. 31, 2021 | 79,461,603 | |||
Balance, amount at Mar. 31, 2021 | 85,351,000 | $ 79,000 | 212,830,000 | (127,558,000) |
Share-based compensation | 591,000 | 0 | 591,000 | 0 |
Net loss | (225,000) | 0 | 0 | (225,000) |
Offering costs incurred for issuance of common stock to non-affiliate | (66,000) | $ 0 | (66,000) | 0 |
Balance, shares at Jun. 30, 2021 | 79,461,603 | |||
Balance, amount at Jun. 30, 2021 | $ 85,651,000 | $ 79,000 | $ 213,355,000 | $ (127,783,000) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2021 | |
BASIS OF PRESENTATION | |
NOTE 1- BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION The accompanying interim unaudited consolidated financial statements of PEDEVCO Corp. (“PEDEVCO” or the “Company”), have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in PEDEVCO’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate disclosures contained in the audited financial statements for the most recent fiscal year, as reported in the Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 23, 2021 (the “2020 Annual Report”), have been omitted. The Company’s consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and subsidiaries in which the Company has a controlling financial interest. All significant inter-company accounts and transactions have been eliminated in consolidation. The Company’s future financial condition and liquidity will be impacted by, among other factors, the success of our drilling program, the number of commercially viable oil and natural gas discoveries made and the quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, the actual cost of exploration, appraisal and development of our prospects, the prevailing prices for, and demand for, oil and natural gas. |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2021 | |
DESCRIPTION OF BUSINESS | |
NOTE 2- DESCRIPTION OF BUSINESS | NOTE 2 – DESCRIPTION OF BUSINESS PEDEVCO is an oil and gas company focused on the development, acquisition and production of oil and natural gas assets where the latest in modern drilling and completion techniques and technologies have yet to be applied. In particular, the Company focuses on legacy proven properties where there is a long production history, well defined geology and existing infrastructure that can be leveraged when applying modern field management technologies. The Company’s current properties are located in the San Andres formation of the Permian Basin situated in West Texas and eastern New Mexico (the “Permian Basin”) and in the Denver-Julesburg Basin (“D-J Basin”) in Colorado. The Company holds its Permian Basin acres located in Chaves and Roosevelt Counties, New Mexico, through its wholly-owned operating subsidiary, Pacific Energy Development Corp. (“PEDCO”), which asset the Company refers to as its “Permian Basin Asset,” and it holds its D-J Basin acres located in Weld and Morgan Counties, Colorado, through its wholly-owned operating subsidiary, Red Hawk Petroleum, LLC (“Red Hawk”), which asset the Company refers to as its “D-J Basin Asset.” The Company believes that horizontal development and exploitation of conventional assets in the Permian Basin and development of the Wattenberg and Wattenberg Extension in the D-J Basin represent among the most economic oil and natural gas plays in the United States (“U.S.”). Moving forward, the Company plans to optimize its existing assets and opportunistically seek additional acreage proximate to its currently held core acreage, as well as other attractive onshore U.S. oil and gas assets that fit the Company’s acquisition criteria, that Company management believes can be developed using its technical and operating expertise and be accretive to shareholder value. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 3- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company has provided a discussion of significant accounting policies, estimates and judgments in its 2020 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2020. Recently Issued Accounting Pronouncements The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. Subsequent Events The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 6 Months Ended |
Jun. 30, 2021 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
NOTE 4- REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 4 – REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue from Contracts with Customers. Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Oil sales $ 3,505 $ 605 $ 6,938 $ 3,307 Natural gas sales 210 41 285 131 Natural gas liquids sales 25 10 48 50 Total revenue from customers $ 3,740 $ 656 $ 7,271 $ 3,488 There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of June 30, 2021. |
CASH
CASH | 6 Months Ended |
Jun. 30, 2021 | |
CASH | |
NOTE 5- CASH | NOTE 5 – CASH The following table provides a reconciliation of cash and restricted cash reported within the balance sheets, which sum to the total of such amounts in the periods indicated (in thousands): June 30, 2021 December 31, 2020 Cash $ 19,335 $ 8,027 Restricted cash included in other assets 3,297 3,297 Total cash and restricted cash $ 22,632 $ 11,324 |
OIL AND GAS PROPERTIES
OIL AND GAS PROPERTIES | 6 Months Ended |
Jun. 30, 2021 | |
OIL AND GAS PROPERTIES | |
NOTE 6- OIL AND GAS PROPERTIES | NOTE 6 – OIL AND GAS PROPERTIES The following table summarizes the Company’s oil and gas activities by classification for the six months ended June 30, 2021 (in thousands): Balance at December 31, 2020 Additions Disposals Transfers Balance at June 30, 2021 Oil and gas properties, subject to amortization $ 146,950 $ 1,222 $ (66 ) $ - $ 148,106 Oil and gas properties, not subject to amortization 4 - - - 4 Asset retirement costs 1,108 (49 ) (5 ) - 1,054 Accumulated depreciation, depletion and impairment (81,064 ) (2,944 ) - - (84,008 ) Total oil and gas assets $ 66,998 $ (1,771 ) $ (71 ) $ - $ 65,156 For the six-month period ended June 30, 2021, the Company incurred $1,222,000 in capital costs primarily related to capital workovers for our Permian Basin Asset, which included three clean outs, converting two wells from electric submersible pumps (“ESP”) to rod pumps, installation of a new ESP, and purchase in place of ESP systems that were previously rentals. On March 18, 2021, the Company, through its wholly-owned subsidiary Red Hawk, consummated the sale of certain assets and associated liabilities located in its D-J Basin Asset to third parties pursuant to a Purchase and Sale Agreement. The Company received net cash at closing of $1.9 million. The final purchase price was further subject to customary post-closing adjustments, resulting in an additional $52,000 paid by Red Hawk subsequently in July 2021. As a result of the transaction, the Company recognized a $1.8 million gain on sale of oil and gas properties on the Statement of Operations for the six months ended June 30, 2021. The depletion recorded for production on proved properties for the three and six months ended June 30, 2021 and 2020, amounted to $1,511,000 compared to $1,808,000, and $2,944,000, compared to $5,186,000, respectively. |
PPP LOANS
PPP LOANS | 6 Months Ended |
Jun. 30, 2021 | |
PPP LOANS | |
NOTE 7- PPP LOANS | NOTE 7 – PPP LOANS On April 22, 2020, the Company received loan proceeds of $370,000 (the “Original PPP Loan”) under the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and on April 23, 2020, the SBA issued guidance that cast doubt on the ability of public companies to qualify for a PPP loan. As a result, out of an abundance of caution, on May 1, 2020, the Company repaid the full amount of the Original PPP Loan to Texas Capital Bank, N.A. On June 2, 2020, the Company again received loan proceeds of $370,000 (the “New PPP Loan”) under the SBA PPP. The New PPP Loan is evidenced by a promissory note, dated as of May 28, 2020 (the “Note”), between the Company and Texas Capital Bank, N.A. The Note has a two-year term, bears interest at the rate of 1.00% per annum, and may be prepaid at any time without payment of any premium. Effective May 20, 2021, the Company received notification from Texas Capital Bank, N.A. that the SBA had fully forgiven the Company’s New PPP Loan principal and accrued interest of $370,000 and $4,000, respectively. Therefore, as of June 30, 2021, the Company recognized no debt or accrued interest related to the New PPP Loan on the balance sheet and a gain on forgiveness of PPP Loan of $374,000 for the three and six months ended June 30, 2021 in connection with such forgiveness. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2021 | |
ASSET RETIREMENT OBLIGATIONS | |
NOTE 8- ASSET RETIREMENT OBLIGATIONS | NOTE 8 – ASSET RETIREMENT OBLIGATIONS Activity related to the Company’s asset retirement obligations is as follows (in thousands): Six Months Ended June 30, 2021 Balance at the beginning of the period (1) $ 1,907 Accretion expense 204 Liabilities settled (73 ) Changes in estimates, net (54 ) Balance at end of period (2) $ 1,984 (1) Includes $234,000 of current asset retirement obligations at December 31, 2020. (2) Includes $189,000 of current asset retirement obligations at June 30, 2021. |
COMMITMENT AND CONTINGENCIES
COMMITMENT AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENT AND CONTINGENCIES | |
NOTE 9- COMMITMENT AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES Lease Agreements Currently, the Company has one operating lease for office space that requires Accounting Standards Codification (ASC) Topic 842 treatment, discussed below. The Company’s leases typically do not provide an implicit rate. Accordingly, the Company is required to use its incremental borrowing rate in determining the present value of lease payments based on the information available at the commencement date. The Company’s incremental borrowing rate would reflect the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. However, the Company currently maintains no debt, and in order to apply an appropriate discount rate, the Company used an average discount rate of eight publicly traded peer group companies similar to it based on size, geographic location, asset types, and/or operating characteristics. The Company has a sublease for its corporate offices in Houston, Texas on approximately 5,200 square feet of office space that expires on August 31, 2023 and has a base monthly rent of approximately $10,000. Supplemental cash flow information related to the Company’s operating lease is included in the table below (in thousands): Six Months June 30, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 60 Supplemental balance sheet information related to operating leases is included in the table below (in thousands): June 30, 2021 Operating lease – right-of-use asset $ 222 Operating lease liabilities - current $ 109 Operating lease liabilities - long-term 139 Total lease liability $ 248 The weighted-average remaining lease term for the Company’s operating lease is 2.2 years as of June 30, 2021, with a weighted-average discount rate of 5.35%. Lease liability with enforceable contract terms that have greater than one-year terms are as follows (in thousands): Remainder of 2021 $ 59 2022 121 2023 82 Thereafter - Total lease payments 262 Less imputed interest (14 ) Total lease liability $ 248 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
Shareholders' equity: | |
NOTE 10- SHAREHOLDERS' EQUITY | NOTE 10 – SHAREHOLDERS’ EQUITY Common Stock During the six months ended June 30, 2021, the Company granted an aggregate of 960,000 restricted stock awards to various employees of the Company. Additionally, 16,667 shares of restricted common stock were forfeited to the Company and canceled due to an employee termination (see Note 11 below). On February 5, 2021, the Company closed an underwritten public offering of 5,968,500 shares of common stock at a public offering price of $1.50 per share, which included the full exercise of the underwriter’s over-allotment option, for net proceeds (after deducting the underwriters’ discount equal to 6% of the public offering price and expenses associated with the offering) of approximately $8.2 million. Warrants During the six months ended June 30, 2021, warrants to purchase 150,329 shares of common stock outstanding, with an exercise price of $0.32 per share expired unexercised on June 25, 2021. As of June 30, 2021, the Company has no warrants outstanding. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2021 | |
SHARE-BASED COMPENSATION | |
NOTE 11- SHARE-BASED COMPENSATION | NOTE 11 – SHARE-BASED COMPENSATION The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award over the vesting period. Common Stock On January 19, 2021, restricted stock awards were granted to officers of the Company for an aggregate of 940,000 of the Company’s common stock, under the Company’s Amended and Restated 2012 Equity Incentive Plan. The grant for the 940,000 shares of restricted stock vest as follows: 33.3% vest each subsequent year from the date of grant contingent upon the recipient’s continued service with the Company. These shares have a total fair value of $1,307,000 based on the market price on the issuance date. On February 5, 2021, the Company closed an underwritten public offering of 5,968,500 shares of common stock at a public offering price of $1.50 per share, which included the full exercise of the underwriter’s over-allotment option, for net proceeds (after deducting the underwriters’ discount equal to 6% of the public offering price and expenses associated with the offering) of approximately $8.2 million. On February 28, 2021, 16,667 shares of restricted common stock were rescinded due to an employee termination. As a result, these shares were canceled and the shares once again became eligible for future awards under the Company’s Amended and Restated 2012 Equity Incentive Plan. On March 31, 2021, 20,000 restricted stock awards were granted to a new employee of the Company, under the Company’s Amended and Restated 2012 Equity Incentive Plan. The grant for the 20,000 shares of restricted stock vest as follows: 100% vest on March 22, 2022, contingent upon the recipient’s continued service with the Company. These shares have a total fair value of $29,000 based on the market price on the issuance date. Stock-based compensation expense recorded related to the vesting of restricted stock for the six months ended June 30, 2021 was $1,034,000. The remaining unamortized stock-based compensation expense at June 30, 2021 related to restricted stock was $1,418,000. Options On January 19, 2021, the Company granted options to purchase an aggregate of 550,000 shares of common stock to various Company employees at an exercise price of $1.39 per share. The options have a term of five years and fully vest in January 2024, with 33.3% vesting each subsequent year from the date of grant, contingent upon each recipient’s continued service with the Company. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $654,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 0.45% based on the applicable US Treasury bill rate, (2) expected term of 3.5 years, (3) expected volatility of 156% based on the trading history of the Company, and (4) zero expected dividends. On January 28, 2021, the Company issued 86,430 total shares of common stock upon the cashless exercise of stock options to purchase an aggregate of 191,999 shares of common stock with exercise prices ranging between $1.10 and $1.68 per share, based on a then-current market value of $2.89 per share, under the terms of the options. The options had an intrinsic value of $250,000 on the exercise date. During the six months ended June 30, 2021, the Company recognized stock option expense of $241,000. The remaining amount of unamortized stock options expense at June 30, 2021, was $583,000. The intrinsic value of outstanding and exercisable options at June 30, 2021 was $125,000. Option activity during the six months ended June 30, 2021 was: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at December 31, 2020 1,234,849 $ 2.43 2.7 Granted 550,000 $ 1.39 Exercised (191,999 ) $ 1.59 Expired/Canceled (314,414 ) $ 4.11 Outstanding at June 30, 2021 1,278,436 $ 1.70 3.3 Exercisable at June 30, 2021 456,435 $ 2.04 1.8 |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2021 | |
EARNINGS (LOSS) PER COMMON SHARE | |
NOTE 12- EARNINGS (LOSS) PER COMMON SHARE | NOTE 12 – EARNINGS (LOSS) PER COMMON SHARE Earnings (loss) per common share-basic is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net (loss) income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net (loss) income per common share-diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect. Three Months Ended June 30, Six Months Ended June 30, Numerator: 2021 2020 2021 2020 Net income (loss) $ (225 ) $ (2,741 ) $ 503 $ (6,998 ) Denominator: Weighted average common shares– basic 79,461,603 72,125,328 78,157,942 72,060,812 Dilutive effect of common stock equivalents: Options and Warrants - - 75,830 - Denominator: Weighted average common shares – diluted 79,461,603 72,125,328 78,233,772 72,060,812 Earnings (loss) per share – basic $ (0.00 ) $ (0.04 ) $ 0.01 $ (0.10 ) Earnings (loss) per share – diluted $ (0.00 ) $ (0.04 ) $ 0.01 $ (0.10 ) For the three and six month periods ended June 30, 2021 and 2020, share equivalents related to options and warrants to purchase 1,278,436 compared to 262,829, and 1,126,769 compared to 262,829, shares of common stock, respectively, were excluded from the computation of diluted net income (loss) per share as the inclusion of such shares would be anti-dilutive. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2021 | |
INCOME TAXES | |
NOTE 13- INCOME TAXES | NOTE 13 – INCOME TAXES The Company has estimated that its effective tax rate for U.S. purposes will be zero for the 2021 and 2020 fiscal years as a result of net losses and a full valuation allowance against the net deferred tax assets. Consequently, the Company has recorded no provision or benefit for income taxes for the three and six months ended June 30, 2021 and 2020, respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Recently Issued Accounting Pronouncements | The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. |
Subsequent Events | The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Revenue by significant product type | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Oil sales $ 3,505 $ 605 $ 6,938 $ 3,307 Natural gas sales 210 41 285 131 Natural gas liquids sales 25 10 48 50 Total revenue from customers $ 3,740 $ 656 $ 7,271 $ 3,488 |
CASH (Tables)
CASH (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
CASH | |
Cash and restricted cash | June 30, 2021 December 31, 2020 Cash $ 19,335 $ 8,027 Restricted cash included in other assets 3,297 3,297 Total cash and restricted cash $ 22,632 $ 11,324 |
OIL AND GAS PROPERTIES (Tables)
OIL AND GAS PROPERTIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
OIL AND GAS PROPERTIES | |
Oil and gas properties | Balance at December 31, 2020 Additions Disposals Transfers Balance at June 30, 2021 Oil and gas properties, subject to amortization $ 146,950 $ 1,222 $ (66 ) $ - $ 148,106 Oil and gas properties, not subject to amortization 4 - - - 4 Asset retirement costs 1,108 (49 ) (5 ) - 1,054 Accumulated depreciation, depletion and impairment (81,064 ) (2,944 ) - - (84,008 ) Total oil and gas assets $ 66,998 $ (1,771 ) $ (71 ) $ - $ 65,156 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
ASSET RETIREMENT OBLIGATIONS | |
Asset retirement obligation | Six Months Ended June 30, 2021 Balance at the beginning of the period (1) $ 1,907 Accretion expense 204 Liabilities settled (73 ) Changes in estimates, net (54 ) Balance at end of period (2) $ 1,984 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENT AND CONTINGENCIES | |
Supplemental information related to operating lease | Six Months June 30, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 60 |
Schedule of operating lease | June 30, 2021 Operating lease – right-of-use asset $ 222 Operating lease liabilities - current $ 109 Operating lease liabilities - long-term 139 Total lease liability $ 248 |
Lease liability maturity | Remainder of 2021 $ 59 2022 121 2023 82 Thereafter - Total lease payments 262 Less imputed interest (14 ) Total lease liability $ 248 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SHARE-BASED COMPENSATION | |
Stock option activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at December 31, 2020 1,234,849 $ 2.43 2.7 Granted 550,000 $ 1.39 Exercised (191,999 ) $ 1.59 Expired/Canceled (314,414 ) $ 4.11 Outstanding at June 30, 2021 1,278,436 $ 1.70 3.3 Exercisable at June 30, 2021 456,435 $ 2.04 1.8 |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
EARNINGS (LOSS) PER COMMON SHARE | |
Earnings (loss) per share | Three Months Ended June 30, Six Months Ended June 30, Numerator: 2021 2020 2021 2020 Net income (loss) $ (225 ) $ (2,741 ) $ 503 $ (6,998 ) Denominator: Weighted average common shares– basic 79,461,603 72,125,328 78,157,942 72,060,812 Dilutive effect of common stock equivalents: Options and Warrants - - 75,830 - Denominator: Weighted average common shares – diluted 79,461,603 72,125,328 78,233,772 72,060,812 Earnings (loss) per share – basic $ (0.00 ) $ (0.04 ) $ 0.01 $ (0.10 ) Earnings (loss) per share – diluted $ (0.00 ) $ (0.04 ) $ 0.01 $ (0.10 ) |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Total revenue from customers | $ 3,740 | $ 656 | $ 7,271 | $ 3,488 |
Oil Sales | ||||
Total revenue from customers | 3,505 | 605 | 6,938 | 3,307 |
Natural Gas Sales | ||||
Total revenue from customers | 210 | 41 | 285 | 131 |
Natural Gas Liquids Sales | ||||
Total revenue from customers | $ 25 | $ 10 | $ 48 | $ 50 |
CASH (Details)
CASH (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
CASH | ||||
Cash | $ 19,335 | $ 8,027 | ||
Restricted cash included in other assets | 3,297 | 3,297 | ||
Total cash and restricted cash | $ 22,632 | $ 11,324 | $ 13,506 | $ 25,712 |
OIL AND GAS PROPERTIES (Details
OIL AND GAS PROPERTIES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Oil and gas properties, subject to amortization | $ 148,106 | $ 146,950 |
Oil and gas properties, not subject to amortization | 4 | 4 |
Asset retirement costs | 1,054 | 1,108 |
Accumulated depreciation, depletion and impairment | (84,008) | (81,064) |
Total oil and gas properties, net | 65,156 | $ 66,998 |
Additions | ||
Oil and gas properties, subject to amortization | 1,222 | |
Oil and gas properties, not subject to amortization | 0 | |
Asset retirement costs | (49) | |
Accumulated depreciation, depletion and impairment | (2,944) | |
Total oil and gas properties, net | 1,771 | |
Disposals | ||
Oil and gas properties, subject to amortization | 66 | |
Oil and gas properties, not subject to amortization | 0 | |
Asset retirement costs | (5) | |
Accumulated depreciation, depletion and impairment | 0 | |
Total oil and gas properties, net | 71 | |
Transfers | ||
Oil and gas properties, subject to amortization | 0 | |
Oil and gas properties, not subject to amortization | 0 | |
Asset retirement costs | 0 | |
Accumulated depreciation, depletion and impairment | 0 | |
Total oil and gas properties, net | $ 0 |
OIL AND GAS PROPERTIES (Detai_2
OIL AND GAS PROPERTIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
OIL AND GAS PROPERTIES | ||||
Capital costs for recently completed wells | $ 1,222,000,000 | |||
Depletion | $ 1,511,000,000 | $ 2,944,000,000 | 1,808,000,000 | $ 5,186,000,000 |
Net cash received | $ 1,900 | 1,900 | ||
Gains on sales | $ 1,800 | |||
Description of additional paid | an additional $52,000 paid by Red Hawk subsequently in July 2021 |
PPP LOANS (Details Narrative)
PPP LOANS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
May 20, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | |
Gains on forgiveness of ppp loan | $ 374,000 | $ 374,000 | ||
Loan | $ 370,000 | |||
Accrued interest | $ 4,000 | |||
Proceed from loan | 0 | $ 740,000 | ||
April 20,2020 [Member] | U.S. Small Business Administration's [Member] | ||||
Proceed from loan | 370,000 | |||
June 20, 2021 [Member] | ||||
Proceed from loan | $ 370,000 | |||
Interest rate | 1.00% |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
ASSET RETIREMENT OBLIGATIONS | |
Balance at the beginning of the period | $ 1,907 |
Accretion expense | 204 |
Liabilities settled | (73) |
Changes in estimates | (54) |
Balance at end of period | $ 1,984 |
ASSET RETIREMENT OBLIGATIONS _2
ASSET RETIREMENT OBLIGATIONS (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
ASSET RETIREMENT OBLIGATIONS | ||
Cureent asset retirement | $ 189,000 | $ 234,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
COMMITMENT AND CONTINGENCIES | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 60 | |
Operating lease - right-of-use asset | 222 | $ 270 |
Operating lease liabilities | 109 | |
Operating lease liabilities - long-term | 139 | |
Total lease liability | $ 248 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) $ in Thousands | Jun. 30, 2021USD ($) |
COMMITMENT AND CONTINGENCIES | |
Remainder of 2021 | $ 59 |
2022 | 121 |
2023 | 82 |
Thereafter | 0 |
Total lease payments | 262 |
Less imputed interest | (14) |
Total lease liability | $ 248 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
COMMITMENT AND CONTINGENCIES | |
Rent expenses | $ 10,000 |
Weighted-average remaining lease term | 2 years 2 months 12 days |
Description of lease hold commitments | In the Permian Basin Asset, 1,088 acres are due to expire during the remainder of 2021 and 1,331 net acres expire |
Weighted-average discount rate | 5.35% |
SHAREHOLDERS EQUITY (Details Na
SHAREHOLDERS EQUITY (Details Narrative) - USD ($) | Feb. 05, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Shareholders' equity: | |||
Restricted stock awards granted | 960,000 | ||
Warrants to purchase common stock | 150,329 | ||
Warrants to purchase common stock,expired | Jun. 25, 2021 | ||
Common stock underwriting to public offering | 5,968,500 | ||
Intrinsic value of warrants exercisable | $ 320 | ||
Common stock,price per share | $ 1.50 | $ 0.001 | $ 0.001 |
Description of net proceeds | net proceeds (after deducting the underwriters’ discount equal to 6% of the public offering price and expenses associated with the offering) of approximately $8.2 million |
SHAREBASED COMPENSATION (Detail
SHAREBASED COMPENSATION (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Jan. 28, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | |
SHARE-BASED COMPENSATION | |||
Number of options outstanding, beginning | 1,234,849 | 1,234,849 | 1,234,849 |
Granted | 191,999 | 550,000 | |
Exercised | (191,999) | ||
Expired/canceled | (314,414) | ||
Number of options outstanding, ending | 1,354,516 | 1,278,436 | |
Number of options exercisable | 456,435 | ||
Weighted average exercise price outstanding, beginning | $ 2.43 | $ 2.43 | $ 2.43 |
Granted | 1.39 | ||
Exercised | 1.59 | ||
Expired/canceled | 4.11 | ||
Weighted average exercise price outstanding, ending | $ 1.85 | 1.70 | |
Weighted average exercise price exercisable | $ 2.04 | ||
Weighted average remaining contractual life (in years) outstanding, beginning | 2.7 | ||
Weighted average remaining contractual life (in years) outstanding, ending | 3.3 | ||
Weighted average remaining contractual life (in years) exercisable | 1.8 |
SHAREBASED COMPENSATION (Deta_2
SHAREBASED COMPENSATION (Details Narrative) - USD ($) | Feb. 05, 2021 | Mar. 31, 2021 | Jan. 28, 2021 | Jan. 19, 2021 | Feb. 28, 2020 | Jun. 30, 2021 | Dec. 31, 2020 |
Common stock underwriting to public offering | $ 5,968,500 | ||||||
Common stock,price per share | $ 1.50 | $ 0.001 | $ 0.001 | ||||
Description of net proceeds | net proceeds (after deducting the underwriters’ discount equal to 6% of the public offering price and expenses associated with the offering) of approximately $8.2 million | ||||||
Shares of restricted common stock | 16,667 | ||||||
Unamortized stock-based compensation expense, restricted stock | $ 1,881,000 | ||||||
Stock-based compensation expense, stock option | 241,000,000 | ||||||
Unamortized stock-based compensation expense, stock option | 583,000,000 | ||||||
Intrinsic value of options exercisable | 125,000,000 | ||||||
Stock based compensation expenses | 1,034,000 | ||||||
Unamortized stock-based compensation expense | $ 1,418,000 | ||||||
Common stock shares | 550,000 | ||||||
Common stock shares,exercise price | $ 1.39 | ||||||
Aggregate fair value of the options | $ 654,000 | ||||||
Fair value of the options discount rate | 0.45% | ||||||
Fair value of the options, expexted term | 3 years 6 months | ||||||
Fair value of the options, expected volatility | 156.00% | ||||||
Description of option term | The options have a term of five years and fully vest in January 2024, with 33.3% vesting each subsequent year from the date of grant | ||||||
Aggregate intrinsic value of options | $ 250,000 | ||||||
Common stock shares issued | 86,430 | ||||||
Coomo stock ,aggregate shares | 191,999 | 550,000 | |||||
Coomon stock,market value | $ 2.89 | ||||||
Maximum [Member] | |||||||
Coomon stock shares,exercise price | 1.68 | ||||||
Minimum [Member] | |||||||
Coomon stock shares,exercise price | $ 1.10 | ||||||
Amended and Restated 2012 Equity Incentive Plan [Member] | |||||||
Common stock underwriting to public offering | $ 29,000 | $ 1,307,000 | |||||
Common stock shares issued | 20,000 | 940,000 | |||||
Description of restricted stock | The grant for the 20,000 shares of restricted stock vest as follows: 100% vest | The grant for the 940,000 shares of restricted stock vest as follows: 33.3% vest |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator | ||||||
Net loss | $ (225,000) | $ 728,000 | $ (2,741,000) | $ (4,257,000) | $ 503,000 | $ (6,998,000) |
Effect of common stock equivalents | 0 | 0 | 0 | 0 | ||
Net income (loss) adjusted for common stock equivalents | $ (225) | $ (2,741) | $ 503 | $ (6,998) | ||
Denominator: | ||||||
Weighted average number of common shares outstanding: basic | 79,461,603 | 72,125,328 | 78,157,942 | 72,060,812 | ||
Dilutive effect of common stock equivalents: | ||||||
Options and warrants | $ 0 | $ 0 | $ 75,830,000 | $ 0 | ||
Denominator: | ||||||
Weighted average number of common shares outstanding: diluted | 79,461,603 | 72,125,328 | 78,233,772 | 72,060,812 | ||
Loss per common share: basic | $ 0 | $ (0.04) | $ 0.01 | $ (0.10) | ||
Loss per common share: diluted | $ 0 | $ (0.04) | $ 0.01 | $ (0.10) |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
EARNINGS (LOSS) PER COMMON SHARE | ||||
Purchase of options and warrants | $ 1,278,436 | $ 631,667 | $ 262,829 | $ 262,829 |