Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 11, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | PEDEVCO Corp. | |
Entity Central Index Key | 0001141197 | |
Document Type | 10-Q/A | |
Amendment Flag | true | |
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, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Entity Common Stock Shares Outstanding | 87,040,267 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-35922 | |
Entity Tax Identification Number | 22-3755993 | |
Entity Address Postal Zip Code | 77079 | |
Entity Incorporation State Country Code | TX | |
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 | |
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 | NYSE | |
Amendment Description | On October 13, 2023, management of PEDEVCO Corp. (the “Company”) concluded, and the Audit Committee of the Board of Directors concurred, that the Company’s previously-issued unaudited financial statements as of and for the three- and six- month periods ended June 30, 2023, which were included in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, originally filed with the Securities and Exchange Commission (the “SEC”) on August 14, 2023 (the “Original Filing”), should no longer be relied upon and should be restated to correct the errors discussed below. The Company is filing this Amendment No. 1 to the Quarterly Report on Form 10-Q/A (the “Amendment”), which sets forth the information in the Original Filing in its entirety, as adjusted for the effects of the restatement described below. During the process of reviewing receivables recorded in the oil, natural gas liquids (NGL) and natural gas revenue accrual as of September 30, 2023, the Company identified a misstatement of approximately $2,046,000 attributable to errors in previous revenue accrual estimates and existing accrual amounts from new third-party operators not being adequately reversed or accurately accrued during the three-months ended June 30, 2023, resulting in an overstatement of the Company’s net production in 14 third-party operated wells (overstatement of 31,463 barrels of oil equivalent (BOE) production). Oil and gas sales, accounts receivable – oil and gas, marketing costs, severance taxes and depletion expense were misstated by approximately $2,362,000, $2,383,000, $137,000, $158,000, and $337,000, respectively, for the three and six months ended June 30, 2023. These corresponding misstatements were related to the revenue accrual misstatement noted above for the quarter ended June 30, 2023 and do not affect cash balances for the three- and six-month periods ended June 30, 2023. See also Note 1 – “Basis of Presentation and Restatement of Financial Statements—Restatement of Previously-Issued Unaudited Financial Statements” in the notes to the consolidated financial statements included in Part I, Item 1. Financial Statements, for a more detailed discussion of the restatements. This Amendment is being filed to (i) restate the unaudited financial statements to correct the misstatements described above (and to reflect corresponding changes to the Risk Factors in Part II, Item 1A, and to Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2), and (ii) amend Part 1, Item 4 (Controls and Procedures) to address the material weakness in internal control that caused the misstatements. To reflect the restatement of items described above, this Amendment revises the following sections of the Original Filing: ·Part I - Item 1. Financial Statements; ·Part I - Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations; ·Part I - Item 4. Controls and Procedures; ·Part II - Item 1A. Risk Factors; and ·Part II - Item 6. Exhibits The misstatements giving rise to this Amendment resulted from a material weakness in internal control over financial reporting. As such, Item 4 of Part I has been amended to include our assessment of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended. This Amendment includes new certifications from the Company’s Chief Executive Officer and Chief Accounting Officer dated as of the date of the filing of this Amendment, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications are filed with this Amendment as Exhibits 31.1, 31.2, 32.1 and 32.2. Except as described above, no other changes have been made to the Original Filing. This Amendment does not reflect events occurring after, nor does it modify or update any disclosures that may have been affected by events occurring subsequent to, the date of the filing of the Original Filing. Accordingly, this Amendment should be read in conjunction with our filings made with the Securities and Exchange Commission after the date of the Original Filing. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Cash and cash equivalents | $ 12,464 | $ 29,430 |
Accounts receivable - oil and gas | 4,058 | 2,430 |
Prepaid expenses and other current assets | 50 | 249 |
Total current assets | 16,572 | 32,109 |
Oil and gas properties: | ||
Oil and gas properties, subject to amortization, net | 82,349 | 79,372 |
Oil and gas properties, not subject to amortization, net | 4,970 | 775 |
Total oil and gas properties, net | 87,319 | 80,147 |
Operating lease - right-of-use asset | 18 | 71 |
Other assets | 3,819 | 3,783 |
Total assets | 107,728 | 116,110 |
Current liabilities: | ||
Accounts payable | 1,019 | 1,556 |
Accrued expenses | 1,322 | 13,835 |
Revenue payable | 1,011 | 1,018 |
Operating lease liabilities - current | 21 | 81 |
Asset retirement obligations - current | 699 | 472 |
Total current liabilities | 4,072 | 16,962 |
Long-term liabilities: | ||
Asset retirement obligations, net of current portion | 2,826 | 2,689 |
Total liabilities | 6,898 | 19,651 |
Shareholders' equity: | ||
Common stock, $0.001 par value, 200,000,000 shares authorized; 87,040,267 and 85,790,267 shares issued and outstanding, respectively | 87 | 86 |
Additional paid-in capital | 224,148 | 223,114 |
Accumulated deficit | (123,405) | (126,741) |
Total shareholders' equity | 100,830 | 96,459 |
Total liabilities and shareholders' equity | $ 107,728 | $ 116,110 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares Issued | 87,040,267 | 85,790,267 |
Common Stock, Shares Outstanding | 87,040,267 | 85,790,267 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||
Oil and gas sales | $ 8,548 | $ 9,547 | $ 16,712 | $ 16,637 |
Operating expenses: | ||||
Lease operating costs | 2,830 | 2,802 | 5,296 | 5,158 |
Selling, general and administrative expense | 1,332 | 1,296 | 2,820 | 2,888 |
Depreciation, depletion, amortization and accretion | 2,898 | 2,228 | 5,479 | 4,114 |
Total operating expenses | 7,060 | 6,326 | 13,595 | 12,160 |
Operating income | 1,488 | 3,221 | 3,117 | 4,477 |
Interest income | 86 | 4 | 184 | 7 |
Other income (expense) | 0 | (15) | 35 | 65 |
Total other income (expense) | 86 | (11) | 219 | 72 |
Net income | $ 1,574 | $ 3,210 | $ 3,336 | $ 4,549 |
Basic | $ 0.02 | $ 0.04 | $ 0.04 | $ 0.05 |
Diluted | $ 0.02 | $ 0.04 | $ 0.04 | $ 0.05 |
Weighted average number of common shares outstanding: | ||||
Basic | 87,040,267 | 85,479,421 | 86,881,427 | 85,305,583 |
Diluted | 87,040,267 | 85,479,421 | 86,881,427 | 85,305,583 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows From Operating Activities: | ||
Net income | $ 3,336 | $ 4,549 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion, amortization and accretion | 5,479 | 4,114 |
Amortization of right-of-use asset | 53 | 50 |
Share-based compensation expense | 1,035 | 1,100 |
Changes in operating assets and liabilities: | ||
Accounts receivable - oil and gas | (1,628) | (3,002) |
Prepaid expenses and other current assets | 199 | 289 |
Accounts payable | (386) | (138) |
Accrued expenses | 293 | 73 |
Revenue payable | (7) | 96 |
Net cash provided by operating activities | 8,374 | 7,131 |
Cash Flows From Investing Activities: | ||
Cash paid for drilling and completion costs | (25,295) | (10,047) |
Cash paid for vehicle | (45) | 0 |
Net cash used in investing activities | (25,340) | (10,047) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of shares, net of offering costs | 0 | 50 |
Net cash provided by financing activities | 0 | 50 |
Net decrease in cash and restricted cash | (16,966) | (2,866) |
Cash and restricted cash at beginning of period | 32,977 | 29,227 |
Cash and restricted cash at end of period | 16,011 | 26,361 |
Cash paid for: | ||
Interest | 0 | 0 |
Income taxes | 0 | 0 |
Noncash investing and financing activities: | ||
Change in accrued oil and gas development costs | 13,017 | 1,604 |
Changes in estimates of asset retirement costs, net | 31 | 80 |
Issuance of restricted common stock | $ 1 | $ 1 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Dec. 31, 2021 | 84,236,146 | |||
Balance, amount at Dec. 31, 2021 | $ 91,483 | $ 84 | $ 220,984 | $ (129,585) |
Issuance of restricted common stock, shares | 1,200,000 | |||
Issuance of restricted common stock, amount | 0 | $ 1 | (1) | 0 |
Share-based compensation | 563 | 0 | 563 | 0 |
Net income | 1,339 | $ 0 | 0 | 1,339 |
Balance, shares at Mar. 31, 2022 | 85,436,146 | |||
Balance, amount at Mar. 31, 2022 | 93,385 | $ 85 | 221,546 | (128,246) |
Balance, shares at Dec. 31, 2021 | 84,236,146 | |||
Balance, amount at Dec. 31, 2021 | 91,483 | $ 84 | 220,984 | (129,585) |
Net income | 4,549 | |||
Balance, shares at Jun. 30, 2022 | 85,550,267 | |||
Balance, amount at Jun. 30, 2022 | 97,182 | $ 85 | 222,133 | (125,036) |
Balance, shares at Mar. 31, 2022 | 85,436,146 | |||
Balance, amount at Mar. 31, 2022 | 93,385 | $ 85 | 221,546 | (128,246) |
Share-based compensation | 537 | 0 | 537 | 0 |
Net income | 3,210 | $ 0 | 0 | 3,210 |
Sale of common stock to non-affiliate, shares | 87,121 | |||
Sale of common stock to non-affiliate, amount | 50 | $ 0 | 50 | 0 |
Balance, shares at Jun. 30, 2022 | 85,550,267 | |||
Balance, amount at Jun. 30, 2022 | 97,182 | $ 85 | 222,133 | (125,036) |
Balance, shares at Dec. 31, 2022 | 85,790,267 | |||
Balance, amount at Dec. 31, 2022 | 96,459 | $ 86 | 223,114 | (126,741) |
Issuance of restricted common stock, shares | 1,250,000 | |||
Issuance of restricted common stock, amount | 0 | $ 1 | (1) | 0 |
Share-based compensation | 518 | 0 | 518 | 0 |
Net income | 1,762 | $ 0 | 0 | 1,762 |
Balance, shares at Mar. 31, 2023 | 87,040,267 | |||
Balance, amount at Mar. 31, 2023 | 98,739 | $ 87 | 223,631 | (124,979) |
Balance, shares at Dec. 31, 2022 | 85,790,267 | |||
Balance, amount at Dec. 31, 2022 | 96,459 | $ 86 | 223,114 | (126,741) |
Net income | 3,336 | |||
Balance, shares at Jun. 30, 2023 | 87,040,267 | |||
Balance, amount at Jun. 30, 2023 | 100,830 | $ 87 | 224,148 | (123,405) |
Balance, shares at Mar. 31, 2023 | 87,040,267 | |||
Balance, amount at Mar. 31, 2023 | 98,739 | $ 87 | 223,631 | (124,979) |
Share-based compensation | 517 | 0 | 517 | 0 |
Net income | 1,574 | $ 0 | 0 | 1,574 |
Balance, shares at Jun. 30, 2023 | 87,040,267 | |||
Balance, amount at Jun. 30, 2023 | $ 100,830 | $ 87 | $ 224,148 | $ (123,405) |
BASIS OF PRESENTATION AND RESTA
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS | |
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS | NOTE 1 – BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS 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, 2022, filed with the SEC on March 29, 2023 (the “2022 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. Restatement of Previously-Issued Unaudited Financial Statements The Company has restated its unaudited financial statements, which were included in the Company’s June 30, 2023 Form 10-Q that was previously filed with the SEC on August 14, 2023, to correct an error in its oil and gas revenue accrual, which impacted accounts receivable – oil and gas and oil and gas sales as well as depletion expense to oil and gas properties. This error was identified during the process of collecting production data recorded in the oil, NGL and natural gas sales receivable balance as of September 30, 2023. The following tables illustrate the effect of the error correction on all affected line items of the Company’s previously-issued Balance Sheet as of June 30, 2023; Statements of Operations for the three and six months ended June 30, 2023; Statement of Cash Flows for the six months ended June 30, 2023; and Statements of Stockholders' Equity for the three months ended June 30, 2023. Balance Sheet (in thousands) June 30, 2023 As Reported Adjustments Revised Accounts receivable – oil and gas 6,441 (2,383 ) 4,508 Total current assets 18,955 (2,383 ) 16,572 Oil and gas properties, subject to amortization, net 82,012 337 82,349 Total oil and gas properties, net 86,982 337 87,319 Total assets $ 109,774 $ (2,046 ) $ 107,728 Accumulated deficit (121,359 ) (2,046 ) (123,405 ) Total shareholders’ equity 102,876 (2,046 ) 100,830 Total liabilities and shareholders’ equity $ 109,774 $ (2,046 ) $ 107,728 Statements of Operations (in thousands) Three Months Ended June 30,2023 As Reported Adjustments Revised Oil and gas sales $ 10,910 $ (2,362 ) $ 8,548 Lease operating costs 2,809 21 2,830 Depreciation, depletion, amortization and accretion 3,235 (337 ) 2,898 Total operating expenses 7,376 (316 ) 7,060 Net income $ 3,620 $ (2,046 ) $ 1,574 Earnings per common share: Basic $ 0.04 $ (0.02 ) $ 0.02 Diluted $ 0.04 $ (0.02 ) $ 0.02 (in thousands) Six Months Ended June 30, 2023 As Reported Adjustments Revised Oil and gas sales $ 19,074 $ (2,362 ) $ 16,712 Lease operating costs 5,275 21 5,296 Depreciation, depletion, amortization and accretion 5,816 (337 ) 5,479 Total operating expenses 13,911 (316 ) 13,595 Net income $ 5,382 $ (2,046 ) $ 3,336 Earnings per common share: Basic $ 0.06 $ (0.02 ) $ 0.04 Diluted $ 0.06 $ (0.02 ) $ 0.04 Statement of Cash Flows (in thousands) Six Months Ended June 30, 2023 As Reported Adjustments As Restated Cash Flows From Operating Activities: Net income $ 5,382 $ (2,046 ) $ 3,336 Adjustments to reconcile net income to net cash used in operating activities: Depreciation, depletion, amortization and accretion 5,816 (337 ) 5,479 Changes in operating assets and liabilities: Accounts receivable – oil and gas (4,011 ) 2,383 (1,628 ) Statements of Stockholders’ Equity (in thousands) Retained Earnings As Reported Adjustments As Restated Net income 3,620 (2,046 ) 1,574 Balances at June 30, 2023 (121,359 ) (2,046 ) (123,405 ) Total Stockholder Equity As Reported Adjustments As Restated Net income 3,620 (2,046 ) 1,574 Balances at June 30, 2023 102,876 (2,046 ) 100,830 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2023 | |
DESCRIPTION OF BUSINESS | |
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 and Wyoming. The Company holds its Permian Basin leasehold acres located in Chaves and Roosevelt Counties, New Mexico, through its wholly-owned subsidiary, Pacific Energy Development Corp. (“PEDCO”), which asset the Company refers to as its “Permian Basin Asset,” and operates its Permian Basin Asset through its wholly-owned operating subsidiaries EOR Operating Company and Ridgeway Arizona Oil Corp. The Company holds its D-J Basin leasehold acres located in Weld and Morgan Counties, Colorado, and Laramie County, Wyoming, through its newly formed wholly-owned subsidiary PRH Holdings LLC, which asset the Company refers to as its “D-J Basin Asset,” and operates its D-J Basin Asset through its wholly-owned operating subsidiary Red Hawk Petroleum, LLC (“Red Hawk”). 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, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
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 2022 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2022. Recently Issued Accounting Pronouncements On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments 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, 2023 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
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, 2023 2022 2023 2022 As Restated As Restated Oil sales $ 7,812 $ 8,725 $ 15,271 $ 15,120 Natural gas sales 265 473 769 894 Natural gas liquids sales 471 349 672 623 Total revenue from customers $ 8,548 $ 9,547 $ 16,712 $ 16,637 There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of June 30, 2023. |
CASH
CASH | 6 Months Ended |
Jun. 30, 2023 | |
CASH | |
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, 2023 December 31, 2022 Cash $ 12,464 $ 29,430 Restricted cash included in other assets 3,547 3,547 Total cash and restricted cash $ 16,011 $ 32,977 |
OIL AND GAS PROPERTIES
OIL AND GAS PROPERTIES | 6 Months Ended |
Jun. 30, 2023 | |
OIL AND GAS PROPERTIES | |
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, 2023 (in thousands): Balance at December 31, 2022 Additions Disposals Transfers Balance at June 30, 2023 Oil and gas properties, subject to amortization $ 176,253 $ 8,083 $ - $ - $ 184,336 Oil and gas properties, not subject to amortization 775 4,195 - - 4,970 Asset retirement costs 1,407 31 - - 1,438 Accumulated depreciation, depletion and impairment (As Restated) (98,288 ) (5,137 ) - - (103,425 ) Total oil and gas assets (As Restated) $ 80,147 $ 7,172 $ - $ - $ 87,319 For the six-month period ended June 30, 2023, the Company incurred $7,846,000 of capital costs primarily related to non-operated drilling and completion costs related to the Company’s participation in eight new non-operated wells in the D-J Basin Asset in which the Company participated, together with costs related to certain workovers for lift conversions and cleanouts in the Company’s Permian Basin Asset. The Company also acquired approximately 267 net mineral acres, and 5,592 net lease acres, in and around its existing footprint in the D-J Basin through multiple transactions with total acquisition and due diligence costs of $483,000 for the net mineral acres and $3,949,000 for the net lease acres. The depletion recorded for production on proved properties for the three and six months ended June 30, 2023 and 2022, amounted to $2,690,000, compared to $2,127,000, and $5,137,000, compared to $3,872,000, respectively. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2023 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | NOTE 7 – ASSET RETIREMENT OBLIGATIONS Activity related to the Company’s asset retirement obligations is as follows (in thousands): Six Months Ended June 30, 2023 Balance at the beginning of the period (1) $ 3,161 Accretion expense 333 Changes in estimates, net 31 Balance at end of period (2) $ 3,525 (1) Includes $472,000 of current asset retirement obligations at December 31, 2022. (2) Includes $699,000 of current asset retirement obligations at June 30, 2023. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES Lease Agreements Currently, the Company has one operating sublease for office space that requires 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. In December 2022, the Company entered into a new lease agreement for its existing office space that will commence on September 1, 2023, and expire on February 28, 2027. The base monthly rent will be approximately $9,200 for the first 18 months and increase to approximately $9,500 thereafter. The Company paid both a security deposit and prepaid rent for $14,700, respectively. Supplemental cash flow information related to the Company’s operating lease is included in the table below (in thousands): Six Months Ended June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities $ 62 Supplemental balance sheet information related to operating leases is included in the table below (in thousands): June 30, 2023 Operating lease – right-of-use asset $ 18 Operating lease liabilities - current $ 21 Operating lease liabilities - long-term - Total lease liability $ 21 The weighted-average remaining lease term for the Company’s operating lease is 0.2 years as of June 30, 2023, with a weighted-average discount rate of 5.35%. Leasehold Drilling Commitments The Company’s oil and gas leasehold acreage is subject to expiration of leases if the Company does not drill and hold such acreage by production or otherwise exercises options to extend such leases, if available, in exchange for payment of additional cash consideration. In the D-J Basin Asset, no net acres expire during the remainder of 2023, and no significant net acres expire within the next two-year period (net to our direct ownership interest only). In the Permian Basin Asset, 61 acres are due to expire during the remainder of 2023 and 40 net acres expire thereafter (net to our direct ownership interest only). The Company plans to hold significantly all of this acreage through a program of drilling and completing producing wells. If the Company is not able to drill and complete a well before lease expiration, the Company may seek to extend leases where able. Other Commitments Although the Company may, from time to time, be involved in litigation and claims arising out of its operations in the normal course of business, the Company is not currently a party to any material legal proceeding. In addition, the Company is not aware of any material legal or governmental proceedings against it or contemplated to be brought against it. As part of its regular operations, the Company may become party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning its commercial operations, products, employees and other matters. Although the Company provides no assurance about the outcome of any future legal and administrative proceedings and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on the Company’s financial condition or results of operations. |
SHAREHOLDERS EQUITY
SHAREHOLDERS EQUITY | 6 Months Ended |
Jun. 30, 2023 | |
Shareholders' equity: | |
SHAREHOLDERS' EQUITY | NOTE 9 – SHAREHOLDERS’ EQUITY Common Stock During the six months ended June 30, 2023, the Company granted an aggregate of 1,250,000 restricted stock awards to various employees of the Company (see Note 10 below). |
SHAREBASED COMPENSATION
SHAREBASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
SHAREBASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE 10 – 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 23, 2023, an aggregate of 1,250,000 shares of restricted common stock were granted to officers of the Company under the Company’s 2021 Equity Incentive Plan. The grant of the 1,250,000 shares of restricted common 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 had a total fair value of $1,363,000 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, 2023, was $824,000. The remaining unamortized stock-based compensation expense at June 30, 2023 related to restricted stock was $1,417,000. Options On January 23, 2023, the Company granted options to purchase an aggregate of 540,000 shares of common stock to various Company employees at an exercise price of $1.09 per share under the Company’s 2021 Equity Incentive Plan. The options have a term of five years and fully vest in January 2026. 33.3% vest each subsequent year from the date of grant, contingent upon the 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 $429,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 3.61% based on the applicable US Treasury bill rate, (2) expected term of 3.5 years, (3) expected volatility of 113% based on the trading history of the Company, and (4) zero expected dividends. During the six months ended June 30, 2023, the Company recognized stock option expense of $211,000. The remaining amount of unamortized stock options expense at June 30, 2023 was $421,000. The intrinsic value of outstanding and exercisable options at June 30, 2023 was $-0-. Option activity during the six months ended June 30, 2023 was: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at December 31, 2022 1,407,667 $ 1.51 2.7 Granted 540,000 $ 1.09 Expired/Canceled (21,666 ) $ 1.68 Outstanding at June 30, 2023 1,926,001 $ 1.39 2.9 Exercisable at June 30, 2023 959,334 $ 1.63 1.8 |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER COMMON SHARE | |
EARNINGS PER COMMON SHARE | NOTE 11 – EARNINGS PER COMMON SHARE Earnings per common share-basic is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Net income per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net 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. The calculation of earnings per share for the periods indicated below were as follows (amounts in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: As Restated As Restated Net income $ 1,574 $ 3,210 $ 3,336 $ 4,549 Denominator: Weighted average common shares – basic 87,040,267 85,479,421 86,881,427 85,305,583 Dilutive effect of common stock equivalents: Options - - - - Denominator: Weighted average common shares – diluted 87,040,267 85,479,421 86,881,427 85,305,583 Earnings per share – basic $ 0.02 $ 0.04 $ 0.04 $ 0.05 Earnings per share – diluted $ 0.02 $ 0.04 $ 0.04 $ 0.05 For the three and six months ended June 30, 2023 and 2022, share equivalents related to options to purchase 1,926,001, compared to 1,597,667, and 1,926,001 compared to 1,597,667, shares of common stock, respectively, were excluded from the computation of diluted net income per share as the inclusion of such shares would be anti-dilutive. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 12 – INCOME TAXES The Company has estimated that its effective tax rate for U.S. purposes will be zero for the 2023 and 2022 fiscal years as a result of prior 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 months ended June 30, 2023 and 2022, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS In August 2023, the Company acquired approximately 494 net lease acres in and around its existing footprint in the D - |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Recently Issued Accounting Pronouncements | On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments |
Subsequent Events | The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
BASIS OF PRESENTATION AND RES_2
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS | |
Schedule of Balance Sheet | (in thousands) June 30, 2023 As Reported Adjustments Revised Accounts receivable – oil and gas 6,441 (2,383 ) 4,508 Total current assets 18,955 (2,383 ) 16,572 Oil and gas properties, subject to amortization, net 82,012 337 82,349 Total oil and gas properties, net 86,982 337 87,319 Total assets $ 109,774 $ (2,046 ) $ 107,728 Accumulated deficit (121,359 ) (2,046 ) (123,405 ) Total shareholders’ equity 102,876 (2,046 ) 100,830 Total liabilities and shareholders’ equity $ 109,774 $ (2,046 ) $ 107,728 |
Schedule of Statements of Operations | (in thousands) Three Months Ended June 30,2023 As Reported Adjustments Revised Oil and gas sales $ 10,910 $ (2,362 ) $ 8,548 Lease operating costs 2,809 21 2,830 Depreciation, depletion, amortization and accretion 3,235 (337 ) 2,898 Total operating expenses 7,376 (316 ) 7,060 Net income $ 3,620 $ (2,046 ) $ 1,574 Earnings per common share: Basic $ 0.04 $ (0.02 ) $ 0.02 Diluted $ 0.04 $ (0.02 ) $ 0.02 (in thousands) Six Months Ended June 30, 2023 As Reported Adjustments Revised Oil and gas sales $ 19,074 $ (2,362 ) $ 16,712 Lease operating costs 5,275 21 5,296 Depreciation, depletion, amortization and accretion 5,816 (337 ) 5,479 Total operating expenses 13,911 (316 ) 13,595 Net income $ 5,382 $ (2,046 ) $ 3,336 Earnings per common share: Basic $ 0.06 $ (0.02 ) $ 0.04 Diluted $ 0.06 $ (0.02 ) $ 0.04 |
Schedule of Statement of Cash Flows | (in thousands) Six Months Ended June 30, 2023 As Reported Adjustments As Restated Cash Flows From Operating Activities: Net income $ 5,382 $ (2,046 ) $ 3,336 Adjustments to reconcile net income to net cash used in operating activities: Depreciation, depletion, amortization and accretion 5,816 (337 ) 5,479 Changes in operating assets and liabilities: Accounts receivable – oil and gas (4,011 ) 2,383 (1,628 ) |
Schedule of Statements of Stockholders' Equity | (in thousands) Retained Earnings As Reported Adjustments As Restated Net income 3,620 (2,046 ) 1,574 Balances at June 30, 2023 (121,359 ) (2,046 ) (123,405 ) Total Stockholder Equity As Reported Adjustments As Restated Net income 3,620 (2,046 ) 1,574 Balances at June 30, 2023 102,876 (2,046 ) 100,830 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Revenue From Contract with Customers | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 As Restated As Restated Oil sales $ 7,812 $ 8,725 $ 15,271 $ 15,120 Natural gas sales 265 473 769 894 Natural gas liquids sales 471 349 672 623 Total revenue from customers $ 8,548 $ 9,547 $ 16,712 $ 16,637 |
CASH (Tables)
CASH (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
CASH | |
Cash And Restricted Cash | June 30, 2023 December 31, 2022 Cash $ 12,464 $ 29,430 Restricted cash included in other assets 3,547 3,547 Total cash and restricted cash $ 16,011 $ 32,977 |
OIL AND GAS PROPERTIES (Tables)
OIL AND GAS PROPERTIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
OIL AND GAS PROPERTIES | |
Oil And Gas Properties | Balance at December 31, 2022 Additions Disposals Transfers Balance at June 30, 2023 Oil and gas properties, subject to amortization $ 176,253 $ 8,083 $ - $ - $ 184,336 Oil and gas properties, not subject to amortization 775 4,195 - - 4,970 Asset retirement costs 1,407 31 - - 1,438 Accumulated depreciation, depletion and impairment (As Restated) (98,288 ) (5,137 ) - - (103,425 ) Total oil and gas assets (As Restated) $ 80,147 $ 7,172 $ - $ - $ 87,319 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
ASSET RETIREMENT OBLIGATIONS | |
Asset Retirement Obligation | Six Months Ended June 30, 2023 Balance at the beginning of the period (1) $ 3,161 Accretion expense 333 Changes in estimates, net 31 Balance at end of period (2) $ 3,525 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Supplemental Information Related To Operating Lease | Six Months Ended June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities $ 62 |
Schedule Of Operating Lease | June 30, 2023 Operating lease – right-of-use asset $ 18 Operating lease liabilities - current $ 21 Operating lease liabilities - long-term - Total lease liability $ 21 |
SHAREBASED COMPENSATION (Tables
SHAREBASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
SHAREBASED COMPENSATION | |
Stock Option Activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at December 31, 2022 1,407,667 $ 1.51 2.7 Granted 540,000 $ 1.09 Expired/Canceled (21,666 ) $ 1.68 Outstanding at June 30, 2023 1,926,001 $ 1.39 2.9 Exercisable at June 30, 2023 959,334 $ 1.63 1.8 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER COMMON SHARE | |
Earnings Per Share | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: As Restated As Restated Net income $ 1,574 $ 3,210 $ 3,336 $ 4,549 Denominator: Weighted average common shares – basic 87,040,267 85,479,421 86,881,427 85,305,583 Dilutive effect of common stock equivalents: Options - - - - Denominator: Weighted average common shares – diluted 87,040,267 85,479,421 86,881,427 85,305,583 Earnings per share – basic $ 0.02 $ 0.04 $ 0.04 $ 0.05 Earnings per share – diluted $ 0.02 $ 0.04 $ 0.04 $ 0.05 |
BASIS OF PRESENTATION AND RES_3
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts receivable - oil and gas | $ 4,058 | $ 2,430 | ||||
Total current assets | 16,572 | 32,109 | ||||
Oil and gas properties, subject to amortization, net | 82,349 | 79,372 | ||||
Total oil and gas properties, net | 87,319 | 80,147 | ||||
Total assets | 107,728 | 116,110 | ||||
Total shareholders' equity | 100,830 | $ 98,739 | 96,459 | $ 97,182 | $ 93,385 | $ 91,483 |
Total liabilities and shareholders' equity | 107,728 | 116,110 | ||||
Total liabilities and shareholders' equity | (107,728) | $ (116,110) | ||||
As Reported | ||||||
Accounts receivable - oil and gas | 6,441 | |||||
Total current assets | 18,955 | |||||
Oil and gas properties, subject to amortization, net | 82,012 | |||||
Total oil and gas properties, net | 86,982 | |||||
Total assets | 109,774 | |||||
Accumulated deficit | (121,359) | |||||
Total shareholders' equity | 102,876 | |||||
Total liabilities and shareholders' equity | 109,774 | |||||
Total liabilities and shareholders' equity | (109,774) | |||||
Adjustments | ||||||
Accounts receivable - oil and gas | 2,383 | |||||
Total current assets | 2,383 | |||||
Oil and gas properties, subject to amortization, net | 337 | |||||
Total oil and gas properties, net | 337 | |||||
Total assets | 2,046 | |||||
Accumulated deficit | (2,046) | |||||
Total shareholders' equity | (2,046) | |||||
Total liabilities and shareholders' equity | 2,046 | |||||
Total liabilities and shareholders' equity | (2,046) | |||||
Revised [Member] | ||||||
Accounts receivable - oil and gas | 4,508 | |||||
Total current assets | 16,572 | |||||
Oil and gas properties, subject to amortization, net | 82,349 | |||||
Total oil and gas properties, net | 87,319 | |||||
Total assets | 107,728 | |||||
Accumulated deficit | (123,405) | |||||
Total shareholders' equity | 100,830 | |||||
Total liabilities and shareholders' equity | 107,728 | |||||
Total liabilities and shareholders' equity | $ (107,728) |
BASIS OF PRESENTATION AND RES_4
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Oil and gas sales | $ 8,548 | $ 9,547 | $ 16,712 | $ 16,637 |
Lease operating costs | 2,830 | 2,802 | 5,296 | 5,158 |
Depreciation, depletion, amortization and accretion | 5,479 | 4,114 | ||
Depreciation, depletion, amortization and accretion | (5,479) | (4,114) | ||
Total operating expenses | 7,060 | 6,326 | 13,595 | 12,160 |
Net income | $ 1,574 | $ 3,210 | $ 3,336 | $ 4,549 |
Basic | $ 0.02 | $ 0.04 | $ 0.04 | $ 0.05 |
Diluted | $ 0.02 | $ 0.04 | $ 0.04 | $ 0.05 |
As Reported | ||||
Oil and gas sales | $ 10,910 | $ 19,074 | ||
Lease operating costs | 2,809 | 5,275 | ||
Depreciation, depletion, amortization and accretion | 3,235 | 5,816 | ||
Depreciation, depletion, amortization and accretion | (3,235) | (5,816) | ||
Total operating expenses | 7,376 | 13,911 | ||
Net income | $ 3,620 | $ 5,382 | ||
Basic | $ 0.04 | $ 0.06 | ||
Diluted | $ 0.04 | $ 0.06 | ||
Adjustments | ||||
Oil and gas sales | $ (2,362) | $ (2,362) | ||
Lease operating costs | 21 | 21 | ||
Depreciation, depletion, amortization and accretion | (337) | 337 | ||
Depreciation, depletion, amortization and accretion | 337 | (337) | ||
Total operating expenses | (316) | (316) | ||
Net income | $ (2,046) | $ (2,046) | ||
Basic | $ (0.02) | $ (0.02) | ||
Diluted | $ (0.02) | $ (0.02) | ||
Revised [Member] | ||||
Oil and gas sales | $ 8,548 | $ 16,712 | ||
Lease operating costs | 2,830 | 5,296 | ||
Depreciation, depletion, amortization and accretion | 2,898 | 5,479 | ||
Depreciation, depletion, amortization and accretion | (2,898) | (5,479) | ||
Total operating expenses | 7,060 | 13,595 | ||
Net income | $ 1,574 | $ 3,336 | ||
Basic | $ 0.02 | $ 0.04 | ||
Diluted | $ 0.02 | $ 0.04 |
BASIS OF PRESENTATION AND RES_5
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows From Operating Activities: | ||||||
Net income | $ 1,574 | $ 1,762 | $ 3,210 | $ 1,339 | $ 3,336 | $ 4,549 |
Depreciation, depletion, amortization and accretion | (5,479) | (4,114) | ||||
Depreciation, depletion, amortization and accretion | 5,479 | 4,114 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable - oil and gas | (1,628) | $ (3,002) | ||||
As Reported | ||||||
Cash Flows From Operating Activities: | ||||||
Net income | 5,382 | |||||
Depreciation, depletion, amortization and accretion | (3,235) | (5,816) | ||||
Depreciation, depletion, amortization and accretion | 3,235 | 5,816 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable - oil and gas | 4,011 | |||||
Adjustments | ||||||
Cash Flows From Operating Activities: | ||||||
Net income | (2,046) | |||||
Depreciation, depletion, amortization and accretion | 337 | (337) | ||||
Depreciation, depletion, amortization and accretion | (337) | 337 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable - oil and gas | 2,383 | |||||
Revised [Member] | ||||||
Cash Flows From Operating Activities: | ||||||
Net income | 3,336 | |||||
Depreciation, depletion, amortization and accretion | (2,898) | (5,479) | ||||
Depreciation, depletion, amortization and accretion | $ 2,898 | 5,479 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable - oil and gas | $ 1,628 |
BASIS OF PRESENTATION AND RES_6
BASIS OF PRESENTATION AND RESTATEMENT OF FINANCIAL STATEMENTS (Details 3) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Net income | $ 1,574,000 | $ 3,210,000 | $ 3,336,000 | $ 4,549,000 | ||||
Accumulated deficit | (123,405,000) | (123,405,000) | $ (126,741,000) | |||||
Stockholder equity | 100,830,000 | $ 97,182,000 | 100,830,000 | $ 97,182,000 | $ 98,739,000 | $ 96,459,000 | $ 93,385,000 | $ 91,483,000 |
As Reported Retained Earnings [Member] | ||||||||
Accumulated deficit | (121,359) | (121,359) | ||||||
As Adjustment Retained Earnings [Member] | ||||||||
Accumulated deficit | (2,046) | (2,046) | ||||||
As Restated Retained Earnings [Member] | ||||||||
Accumulated deficit | (123,405) | (123,405) | ||||||
As Reported Stockholder Equity [Member] | ||||||||
Stockholder equity | 102,876 | 102,876 | ||||||
As Adjustments Stockholder Equity [Member] | ||||||||
Stockholder equity | (2,046) | (2,046) | ||||||
As Restated Stockholder Equity [Member] | ||||||||
Stockholder equity | $ 100,830 | 100,830 | ||||||
Operating Income Loss [Member] | As Reported Retained Earnings [Member] | ||||||||
Net income | 3,620 | |||||||
Operating Income Loss [Member] | As Adjustment Retained Earnings [Member] | ||||||||
Net income | (2,046) | |||||||
Operating Income Loss [Member] | As Restated Retained Earnings [Member] | ||||||||
Net income | 1,574 | |||||||
Operating Income Loss [Member] | As Reported Stockholder Equity [Member] | ||||||||
Net income | 3,620 | |||||||
Operating Income Loss [Member] | As Adjustments Stockholder Equity [Member] | ||||||||
Net income | (2,046) | |||||||
Operating Income Loss [Member] | As Restated Stockholder Equity [Member] | ||||||||
Net income | $ 1,574 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Total revenue from customers | $ 8,548 | $ 9,547 | $ 16,712 | $ 16,637 |
Oil Sales | ||||
Total revenue from customers | 7,812 | 8,725 | 15,271 | 15,120 |
Natural Gas Sales | ||||
Total revenue from customers | 265 | 473 | 769 | 894 |
Natural Gas Liquids Sales | ||||
Total revenue from customers | $ 471 | $ 349 | $ 672 | $ 623 |
CASH (Details)
CASH (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
CASH | ||
Cash and Cash Equivalents | $ 12,464 | $ 29,430 |
Restricted cash included in other assets | 3,547 | 3,547 |
Total cash and cash equivalents and restricted cash | $ 16,011 | $ 32,977 |
OIL AND GAS PROPERTIES (Details
OIL AND GAS PROPERTIES (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Oil and gas properties, subject to amortization | $ 184,336 | $ 176,253 |
Oil and gas properties, not subject to amortization | 4,970 | 775 |
Asset retirement costs | 1,438 | 1,407 |
Accumulated depreciation, depletion and impairment | (103,425) | (98,288) |
Total oil and gas properties, net | 87,319 | $ 80,147 |
Additions | ||
Oil and gas properties, subject to amortization | 8,083 | |
Oil and gas properties, not subject to amortization | 4,195 | |
Asset retirement costs | 31 | |
Accumulated depreciation, depletion and impairment | (5,137) | |
Total oil and gas properties, net | 7,172 | |
Disposals | ||
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 | |
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, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
OIL AND GAS PROPERTIES | |||||
Capital cost of drilling and completion | $ 7,846,000 | ||||
Due deligance cost | $ 483,000 | 483,000 | $ 3,949,000 | ||
Depletion | $ 2,690,000 | $ 2,127,000 | $ 5,137,000 | $ 3,872,000 | |
Description of additional acquired | The Company also acquired approximately 267 net mineral acres, and 5,592 net lease |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
ASSET RETIREMENT OBLIGATIONS | |
Balance at the beginning of the period | $ 3,161 |
Accretion expense | 333 |
Changes in estimates, net | 31 |
Balance at end of period | $ 3,525 |
ASSET RETIREMENT OBLIGATIONS _2
ASSET RETIREMENT OBLIGATIONS (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
ASSET RETIREMENT OBLIGATIONS | ||
Cureent asset retirement | $ 699,000 | $ 472,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 62 | |
Operating lease - right-of-use asset | 18 | $ 71 |
Operating lease liabilities - current | 21 | |
Operating lease liabilities - long-term | 0 | |
Total lease liability | $ 21 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 6 Months Ended |
Jun. 30, 2023 USD ($) ft² | |
COMMITMENTS AND CONTINGENCIES | |
Weighted-average discount rate | 5.35% |
Expiry of lease date | Feb. 28, 2027 |
Office space | ft² | 5,200 |
Expiry of lease of office space | Aug. 31, 2023 |
Rent expenses | $ | $ 10,000 |
Weighted-average remaining lease term | 2 months 12 days |
Description of lease hold commitments | In the Permian Basin Asset, 61 acres are due to expire during the remainder of 2023 and 40 net acres expire thereafter (net to our direct ownership interest only) |
Description of lease payments | The base monthly rent will be approximately $9,200 for the first 18 months and increase to approximately $9,500 thereafter. The Company paid both a security deposit and prepaid rent for $14,700, respectively |
SHAREHOLDERS EQUITY (Details Na
SHAREHOLDERS EQUITY (Details Narrative) | 6 Months Ended |
Jun. 30, 2023 shares | |
Shareholders' equity: | |
Restricted stock awards granted | 1,250,000 |
SHAREBASED COMPENSATION (Detail
SHAREBASED COMPENSATION (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
SHAREBASED COMPENSATION | |
Number of options outstanding,beginning | shares | 1,407,667 |
Number of options granted | shares | 540,000 |
Number of options expired/cancelled | shares | (21,666) |
Number of options outstanding, Ending | shares | 1,926,001 |
Number of options exercisable | shares | 959,334 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 1.51 |
Weighted average exercise price granted | $ / shares | 1.09 |
Weighted average exercise price expired/cancelled | $ / shares | 1.68 |
Weighted average exercise price outstanding, ending | $ / shares | 1.39 |
Weighted average exercise price exercisable | $ / shares | $ 1.63 |
Weighted average remaining contractual life (in years) outstanding, beginning | 2 years 8 months 12 days |
Weighted average remaining contractual life (in years) outstanding, ending | 2 years 10 months 24 days |
Weighted average remaining contractual life (in years) exercisable | 1 year 9 months 18 days |
SHAREBASED COMPENSATION (Deta_2
SHAREBASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jan. 23, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Unamortized stock-based compensation expense, restricted stock | $ 1,417,000 | |||
Stock-based compensation expense | 824,000 | |||
Intrinsic value of outstanding and exercisable | 0 | |||
Aggregate fair value of the options | $ 50,000 | |||
Common stock, total fair value | 1,000 | $ 1,000 | ||
2021 Equity Incentive Plan [Member] | ||||
Description of restricted stock | The grant of the 1,250,000 shares of restricted common stock vest as follows: 33.3% vest each subsequent year from the date of grant | |||
Common stock shares issued | 1,250,000 | |||
Common stock, total fair value | $ 1,363,000 | |||
Option [Member] | ||||
Unamortized stock-based compensation expense, restricted stock | 421,000 | |||
Stock-based compensation expense, stock option | $ 211,000 | |||
Common stock shares | 540,000 | |||
Common stock shares, exercise price | $ 1.09 | |||
Aggregate fair value of the options | $ 429,000 | |||
Fair value of the options discount rate | 3.61% | |||
Fair value of the options, expexted term | 3 years 6 months | |||
Fair value of the options, expected volatility | 113% | |||
Description of option term | The options have a term of five years and fully vest in January 2026. 33.3% vest each subsequent year from the date of grant, contingent upon the recipient’s continued service with the Company |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator | ||||
Net income | $ 1,574 | $ 3,210 | $ 3,336 | $ 4,549 |
Weighted average common shares - basic | 87,040,267 | 85,479,421 | 86,881,427 | 85,305,583 |
Dilutive Effect Of Common Stock Equivalents: | ||||
Dilutive effect of common stock equivalents: Options | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average common shares - diluted | 87,040,267 | 85,479,421 | 86,881,427 | 85,305,583 |
Earnings per common share - basic | $ 0.02 | $ 0.04 | $ 0.04 | $ 0.05 |
Earnings per common share - diluted | $ 0.02 | $ 0.04 | $ 0.04 | $ 0.05 |
EARNINGS PER COMMON SHARE (De_2
EARNINGS PER COMMON SHARE (Details Narrative) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
EARNINGS PER COMMON SHARE | ||||
Share Equivalents Related To Options To Purchase | 1,926,001 | 1,597,667 | 1,926,001 | 1,597,667 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 1 Months Ended |
Aug. 31, 2023 USD ($) | |
Subsequent Event [Member] | |
Acquisition and due diligence costs | $ 508,000 |