Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 18, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | PrimeEnergy Resources Corporation | |
Entity Central Index Key | 0000056868 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | PNRG | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 1,920,500 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-7406 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 9821 Katy Freeway | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77024 | |
City Area Code | 713 | |
Local Phone Number | 735-0000 | |
Entity Tax Identification Number | 84-0637348 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 24,059 | $ 10,347 |
Accounts receivable, net | 16,943 | 14,208 |
Prepaid obligations | 783 | 733 |
Other current assets | 348 | 40 |
Total Current Assets | 42,133 | 25,328 |
Property and Equipment | ||
Oil and gas properties at cost | 545,345 | 539,484 |
Less: Accumulated depletion and depreciation | (380,287) | (359,742) |
Oil and gas properties, net | 165,058 | 179,742 |
Field and office equipment at cost | 28,013 | 27,080 |
Less: Accumulated depreciation | (23,041) | (22,159) |
Field and office equipment, net | 4,972 | 4,921 |
Total Property and Equipment, Net | 170,030 | 184,663 |
Derivative asset long-term and other assets | 736 | 923 |
Total Assets | 212,899 | 210,914 |
Current Liabilities | ||
Accounts payable | 6,168 | 7,282 |
Accrued liabilities | 10,526 | 7,821 |
Due to related Parties | 113 | 52 |
Current portion of asset retirement and other long-term obligations | 1,438 | 1,630 |
Derivative liability short-term | 3,975 | 4,935 |
Total Current Liabilities | 22,220 | 21,720 |
Long-Term Bank Debt | 0 | 36,000 |
Asset Retirement Obligations | 12,460 | 13,222 |
Derivative Liability Long-Term | 0 | 650 |
Deferred Income Taxes | 47,518 | 38,743 |
Other Long-Term Obligations | 1,323 | 1,488 |
Total Liabilities | 83,521 | 111,823 |
Commitments and Contingencies | ||
Equity | ||
Common stock, $.10 par value; 2022 and 2021: Authorized: 2,810,000 shares, outstanding 2022: 1,952,645 shares; outstanding 2021: 1,992,077 shares | 281 | 281 |
Additional paid-in capital | 7,555 | 7,555 |
Retained earnings | 164,181 | 128,902 |
Treasury stock, at cost; 2022: 879,300 shares; 2021: 817,923 shares | (42,639) | (37,647) |
Total Equity | 129,378 | 99,091 |
Total Liabilities and Equity | $ 212,899 | $ 210,914 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 2,810,000 | 2,810,000 |
Common stock, shares outstanding | 1,930,700 | 1,992,077 |
Treasury stock, shares | 879,300 | 817,923 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Realized (loss) on derivative instruments, net | $ (4,285) | $ (1,983) | $ (13,992) | $ (2,896) |
Unrealized gain (loss) on derivative instruments, net | 6,124 | (1,194) | 1,918 | (7,162) |
Other income | 0 | 1 | 29 | 30 |
Total Revenues | 39,651 | 17,311 | 101,562 | 42,292 |
Costs and Expenses | ||||
Lease operating expense | 8,679 | 6,396 | 26,613 | 15,298 |
Field service expense | 3,005 | 2,925 | 9,545 | 6,180 |
Depreciation, depletion, amortization and accretion on discounted liabilities | 7,732 | 6,883 | 21,931 | 19,990 |
General and administrative expense | 2,453 | 1,984 | 11,543 | 6,183 |
Total Costs and Expenses | 21,869 | 18,188 | 69,632 | 47,651 |
Gain on Sale and Exchange of Assets | 494 | 5 | 15,330 | 111 |
Income (Loss) from Operations | 18,276 | (872) | 47,260 | (5,248) |
Other Income (Expense) | ||||
Interest Income | 8 | 0 | 8 | 0 |
Interest Expense | (253) | (462) | (752) | (1,469) |
Income (Loss) Before Income Taxes | 18,031 | (1,334) | 46,516 | (6,717) |
Income Taxes Expense (Benefit) | 4,877 | (186) | 11,237 | (1,700) |
Net Income (Loss) | 13,154 | (1,148) | 35,279 | (5,017) |
Less: Net Income Attributable to Non-Controlling Interests | 0 | 15 | 0 | 4 |
Net Income (Loss) Attributable to PrimeEnergy | $ 13,154 | $ (1,163) | $ 35,279 | $ (5,021) |
Basic Income (Loss) Per Common Share | $ 6.79 | $ (0.58) | $ 17.95 | $ (2.52) |
Diluted Income (Loss) Per Common Share | $ 4.88 | $ (0.58) | $ 12.96 | $ (2.52) |
Oil sales [Member] | ||||
Revenues | ||||
Oil, gas and service income | $ 23,403 | $ 10,442 | $ 75,546 | $ 30,376 |
Natural gas sales [Member] | ||||
Revenues | ||||
Oil, gas and service income | 6,359 | 3,998 | 14,762 | 7,948 |
Natural gas liquids sales [Member] | ||||
Revenues | ||||
Oil, gas and service income | 4,204 | 3,632 | 12,477 | 7,781 |
Oil and gas service [Member] | ||||
Revenues | ||||
Oil, gas and service income | $ 3,846 | $ 2,415 | $ 10,822 | $ 6,215 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid in capital | Retained Earnings [Member] | Treasury Stock [Member] | Total Stockholders' Equity – PrimeEnergy [Member] | Non-Controlling Interest [Member] | Shares Outstanding [Member] |
Balance at Dec. 31, 2020 | $ 97,998 | $ 281 | $ 7,541 | $ 126,804 | $ (37,502) | $ 97,124 | $ 874 | |
Balance, shares at Dec. 31, 2020 | 1,994,177 | |||||||
Net (Loss) Income | (5,017) | (5,021) | (5,021) | 4 | ||||
Purchase of non- controlling interest | (6) | 19 | 19 | (25) | ||||
Balance at Sep. 30, 2021 | 92,975 | 281 | 7,560 | 121,783 | (37,502) | 92,122 | 853 | |
Balance, shares at Sep. 30, 2021 | 1,994,177 | |||||||
Balance at Dec. 31, 2021 | 99,091 | 281 | 7,555 | 128,902 | (37,647) | 99,091 | 0 | |
Balance, shares at Dec. 31, 2021 | 1,992,077 | |||||||
Purchase 61,377 shares of Common stock | (4,992) | (4,992) | (4,992) | $ (61,377) | ||||
Net (Loss) Income | 35,279 | 35,279 | 35,279 | 0 | ||||
Balance at Sep. 30, 2022 | $ 129,378 | $ 281 | $ 7,555 | $ 164,181 | $ (42,639) | $ 129,378 | $ 0 | |
Balance, shares at Sep. 30, 2022 | 1,930,700 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Parenthetical) | 9 Months Ended |
Sep. 30, 2022 shares | |
Repurchase of common stock, shares | 61,377 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net Income (Loss) | $ 35,279 | $ (5,017) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation, depletion, amortization and accretion on discounted liabilities | 21,931 | 19,990 |
Gain on sale of properties | (15,330) | (111) |
Unrealized (gain) loss on derivative instruments, net | (1,918) | 7,162 |
Provision for deferred income taxes | 8,775 | (1,700) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,735) | (7,120) |
Due to related parties | 61 | (4) |
Other assets | (308) | (655) |
Accounts payable | (1,114) | 6,170 |
Accrued liabilities | 2,705 | 109 |
Net Cash Provided by Operating Activities | 47,346 | 18,824 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (7,972) | (11,301) |
Proceeds from sale of properties and equipment | 15,330 | 111 |
Net Cash Provided by (Used in) Investing Activities | 7,358 | (11,190) |
Cash Flows from Financing Activities: | ||
Purchase of stock for treasury | (4,992) | 0 |
Purchase of non-controlling interests | 0 | (6) |
Proceeds from long-term bank debt and other long-term obligations | 0 | 3,000 |
Repayment of long-term bank debt and other long-term obligations | (36,000) | (8,000) |
Net Cash (Used in) Financing Activities | (40,992) | (5,006) |
Net Increase in Cash and Cash Equivalents | 13,712 | 2,628 |
Cash and Cash Equivalents at the Beginning of the Period | 10,347 | 996 |
Cash and Cash Equivalents at the End of the Period | 24,059 | 3,624 |
Supplemental Disclosures: | ||
Income taxes paid | 61 | 0 |
Interest paid | $ 714 | $ 1,384 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (1) Basis of Presentation: The accompanying condensed consolidated financial statements of PrimeEnergy Resources Corporation (“PrimeEnergy” or the “Company”) have not been audited by independent public accountants. Pursuant to applicable Securities and Exchange Commission (“SEC”) rules and regulations, the accompanying interim financial statements do not include all disclosures presented in annual financial statements and the reader should refer to the Company’s Form 10-K As of September 30, 2022, PrimeEnergy’s significant accounting policies are consistent with those discussed in Note 1—Description of Operations and Significant Accounting Policies of its consolidated financial statements contained in PrimeEnergy’s Annual Report on Form 10-K |
Acquisitions and Dispositions
Acquisitions and Dispositions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | (2) Acquisitions and Dispositions: In the first quarter of 2022, the Company sold net leasehold acres in Reagan and Midland Counties, Texas through two separate transactions receiving gross proceeds of $ million. In the second quarter of 2022, the Company sold net acres in Canadian County, Oklahoma for $ . In the third quarter of 2022, the Company sold an additional net acres in Canadian County, Oklahoma for $ . On November 14, 2022, the Company completed an acreage exchange of approximately 725 net acres in the Midland Basin creating a block of 1,200 contiguous acres. The Company entered into an agreement, including this acreage, to create a 2,560 AMI for the joint development of horizontal wells. As part of the agreement, the Company sold a portion of its interest in this acreage to the joint development partner for proceeds of $ 16.1 million. |
Additional Balance Sheet Inform
Additional Balance Sheet Information | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Balance Sheet Information | (3) Additional Balance Sheet Information: Certain balance sheet amounts are comprised of the following: (Thousands of dollars) September 30, 2022 December 31, 2021 Accounts Receivable: Joint interest billing $ 2,338 $ 1,902 Trade receivables 1,780 1,429 Oil and gas sales 13,095 11,154 Other 101 94 17,314 14,579 Less: Allowance for doubtful accounts (371 ) (371 ) Total $ 16,943 $ 14,208 Accounts Payable: Trade $ 1,428 $ 2,390 Royalty and other owners 3,605 2,802 Partner advances 1,062 1,209 Other 73 881 Total $ 6,168 $ 7,282 (Thousands of dollars) September 30, 2022 December 31, 2021 Accrued Liabilities: Compensation and related expenses $ 4,211 $ 3,919 Property costs 3,011 2,901 Taxes 3,213 893 Other 91 108 Total $ 10,526 $ 7,821 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | (4) Long-Term Debt: Bank Debt: On February 15, 2017, the Company and its lenders entered into a Third Amended and Restated Credit Agreement (the “2017 Credit Agreement”) with a maturity date of February 15, 2021. Under the 2017 Credit Agreement, the Company has a revolving line of credit and letter of credit facility of up to $300 million subject to a borrowing base that is determined semi-annually by the lenders based upon the Company’s financial statements and the estimated value of the Company’s oil and gas properties, in accordance with the Lenders’ customary practices for oil and gas loans. The credit facility is secured by substantially all of the Company’s oil and gas properties. The 2017 Credit Agreement includes terms and covenants that require the Company to maintain a minimum current ratio and total indebtedness to EBITDAX (earnings before depreciation, depletion, amortization, taxes, interest expense and exploration costs) ratio, as defined, and restrictions are placed on the payment of dividends, the amount of treasury stock the Company may purchase, commodity hedge agreements, and loans and investments in its consolidated subsidiaries and limited partnerships. On December 20, 2021 the company entered into a Seventh Amendment to the 2017 Credit Agreement and Citibank N.A was appointed as successor administrative agent replacing PNC Bank. Under this amendment the Company’s borrowing base is $50 million. Borrowings under the 2017 Credit Agreement will bear interest at alternate base rate (ABR) plus an applicable margin ranging from 2.00% to 3.00% or at the Company’s option, at a rate equal to the secured overnight financing rate (SOFR rate) as administered by the SOFR Administrator, in this case the Federal Reserve Bank of New York, plus an applicable margin ranging from 3.00% to 4.00%. The 2017 Credit Agreement matures February 11, 2023. The current borrowing base review and maturity extension was completed on July 5, 2022. The Company’s borrowings under this credit facility approximates fair value because the interest rates are variable and reflective of market rates. On July 5, 2022 , the Company and its lenders entered into a Fourth Amended and Restated Credit Agreement (the “2022 Credit Agreement”) with a maturity date of June 1, 2026. Under the 2022 Credit Agreement, the Company has a revolving line of credit and letter of credit facility of up to $300 million subject to a borrowing base that is determined semi-annually by the lenders based upon the Company’s financial statements and the estimated value of the Company’s oil and gas properties, in accordance with the Lenders’ customary practices for oil and gas loans. The initial borrowing base of the agreement is $75 million. The credit facility is secured by substantially all of the Company’s oil and gas properties. The 2022 Credit Agreement includes terms and covenants that require the Company to maintain a minimum current ratio and total indebtedness to EBITDAX (earnings before depreciation, depletion, amortization, taxes, interest expense and exploration costs) ratio, as defined, and restrictions are placed on the payment of dividends, the amount of treasury stock the Company may purchase, and commodity hedge agreements. As of September 30, 2022 the Company had |
Other Long-Term Obligations and
Other Long-Term Obligations and Commitments | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Other Long-Term Obligations and Commitments | (5) Other Long-Term Obligations and Commitments: Operating Leases: The Company leases office facilities under operating leases and recognizes lease expense on a straight-line basis over the lease term. Leases assets and liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term. A new finance lease for office equipment is included in property and equipment, other current liabilities and other long-term liabilities this quarter. As most of the Company’s lease contracts do not provide an implicit discount rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate used was 5.5%. Certain leases may contain variable costs above the minimum required payments and are not included in the right-of-use Operating lease costs for the nine months ended September 30, 2022 were $ thousand. Cash payments included in the operating lease costs for the nine months ended September 30, 2022 were $ thousand. The remaining operating lease terms range between to months. The Company amended certain leases for office space in Texas providing for remaining payments of $174,000 in 2022, $251,000 in 2023, $107,000 in 2024 and $27,000 in 2025. Office The payment schedule for the Company’s operating lease obligations as of September 30, 2022 is as follows: (Thousands of dollars) Operating Leases 2022 174 2023 251 2024 107 2025 27 Total undiscounted lease payments $ 559 Less: Amount associated with discounting (54 ) Net operating lease liabilities $ 505 Asset Retirement Obligation: A reconciliation of the liability for plugging and abandonment costs for the nine months ended September 30, 2022 is as follows: (Thousands of dollars) September 30, 2022 Asset retirement obligation at December 31, 2021 $ 14,295 Liabilities incurred 11 Liabilities settled (1,276 ) Accretion expense 503 Asset retirement obligation at September 30, 2022 $ 13,533 |
Contingent Liabilities
Contingent Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | (6) Contingent Liabilities: The Company is subject to environmental laws and regulations. Management believes that future expenses, before recoveries from third parties, if any, will not have a material effect on the Company’s financial condition. This opinion is based on expenses incurred to date for remediation and compliance with laws and regulations, which have not been material to the Company’s results of operations. From time to time, the Company is party to certain legal actions arising in the ordinary course of business. While the outcome of these events cannot be predicted with certainty, management does not expect these matters to have a materially adverse effect on the financial position or results of operations of the Company. |
Stock Options and Other Compens
Stock Options and Other Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Other Compensation | (7) Stock Options and Other Compensation: In May 1989, non-statutory |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (8) Related Party Transactions: Payables owed to related parties primarily represent receipts collected by the Company as agent for the joint venture partners, which may include members of the Company’s Board of Directors, for oil and gas sales net of expenses. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | (9) Financial Instruments Fair Value Measurements: Authoritative guidance on fair value measurements defines fair value, establishes a framework for measuring fair value and stipulates the related disclosure requirements. The Company follows a three-level hierarchy, prioritizing and defining the types of inputs used to measure fair value. The fair values of the Company’s interest rate swaps, natural gas and crude oil price collars and swaps are designated as Level 3. September 30, 2022 Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at September 30, 2022 (Thousands of dollars) Assets Commodity derivative contracts $ — $ — $ 308 $ 308 Total assets $ — $ — $ 308 $ 308 Liabilities Commodity derivative contracts $ — $ — $ (3,975 ) $ (3,975 ) Total liabilities $ — $ — $ (3,975 ) $ (3,975 ) December 31, 2021 Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2021 (Thousands of dollars) Assets Commodity derivative contracts $ — $ — $ — $ — Total assets $ — $ — $ — $ — Liabilities Total liabilities $ — $ — $ (5,585 ) $ (5,585 ) The derivative contracts were measured based on quotes from the Company’s counterparties. Such quotes have been derived using valuation models that consider various inputs including current market and contractual prices for the underlying instruments, quoted forward prices for natural gas and crude oil, volatility factors and interest rates, such as a LIBOR curve for a similar length of time as the derivative contract term as applicable. These estimates are verified using comparable NYMEX futures contracts or are compared to multiple quotes obtained from counterparties for reasonableness. The significant unobservable inputs for Level 3 derivative contracts include basis differentials and volatility factors. An increase (decrease) in these unobservable inputs would result in an increase (decrease) in fair value, respectively. The Company does not have access to the specific assumptions used in its counterparties’ valuation models. Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided. The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the nine months ended September 30, 2022. (Thousands of dollars) Net Liabilities – December 31, 2021 $ (5,585 ) Total realized and unrealized (gains) losses: Included in earnings (a) (12,074 ) Purchases, sales, issuances and settlements 13,992 Net Liabilities - September 30, 2022 $ (3,667 ) (a) Derivative instruments are reported in revenues as realized gain/loss and on a separately reported line item captioned unrealized gain/loss on derivative instruments. Derivative Instruments: The Company is exposed to commodity price and interest rate risk, and management considers periodically the Company’s exposure to cash flow variability resulting from the commodity price changes and interest rate fluctuations. Futures, swaps and options are used to manage the Company’s exposure to commodity price risk inherent in the Company’s oil and gas production operations. The Company does not apply hedge accounting to any of its commodity-based derivatives. Both realized and unrealized gains and losses associated with commodity derivative instruments are recognized in earnings. The following table sets forth the effect of derivative instruments on the consolidated balance sheets at September 30, 2022 and December 31, 2021: Fair Value (Thousands of dollars) Balance Sheet Location September 30, 2022 December 31, 2021 Asset Derivatives: Derivatives not designated as cash-flow hedging instruments: Crude oil commodity contracts Derivative asset short-term $ 308 $ — Total $ 308 $ — Liability Derivatives: Derivatives not designated as cash-flow hedging instruments: Crude oil commodity contracts Derivative liability short-term $ (2,072 ) $ (3,992 ) Natural gas commodity contracts Derivative liability short-term (1,903 ) (943 ) Crude oil commodity contracts Derivative liability long-term — (490 ) Natural gas commodity contracts Derivative liability long-term — (160 ) Total derivative instruments $ (3,975 ) $ (5,585 ) Total derivative instruments $ (3,667 ) $ (5,585 ) The following table sets forth the effect of derivative instruments on the consolidated statements of operations for the nine months ended September 30, 2022 and 2021: Amount of gain/loss recognized in income (Thousands of dollars) Location of gain/loss recognized in income 2022 2021 Derivatives not designated as cash-flow hedge instruments: Natural gas commodity contracts Unrealized (loss) on derivative instruments, net $ (800 ) $ (2,418 ) Crude oil commodity contracts Unrealized gain (loss) on derivative instruments, net 2,718 (4,744 ) Natural gas commodity contracts Realized (loss) on derivative instruments, net (3,603 ) (1,009 ) Crude oil commodity contracts Realized (loss) on derivative instruments, net (10,389 ) (1,887 ) $ (12,074 ) $ (10,058 ) |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | (10) Earnings Per Share: Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if dilutive potential common stock had been converted to common stock in gain periods. The following reconciles amounts reported in the financial statements: Nine Months Ended September 30, 2022 2021 Net Income Weighted Average Number of Shares Outstanding Per Share Amount Net Loss (In 000’s) Weighted Average Number of Shares Outstanding Per Share Amount Basic $ 35,279 1,965,334 $ 17.95 $ (5,021 ) 1,994,177 $ (2.52 ) Effect of dilutive securities: Options (a) — 757,218 — Diluted $ 35,279 2,722,522 $ 12.96 $ (5,021 ) 1,994,177 $ (2.52 ) Three Months Ended September 30, 2022 2021 Net Income (In 000’s) Weighted Average Number of Shares Outstanding Per Share Amount Net Loss (In 000’s) Weighted Average Number of Shares Outstanding Per Share Amount Basic $ 13,154 1,937,091 $ 6.79 $ (1,163 ) 1,994,177 $ (0.58 ) Effect of dilutive securities: Options (a) — 757,815 — — — — Diluted $ 13,154 2,694,906 $ 4.88 $ (1,163 ) 1,994,177 $ (0.58 ) (a) The effect of the 767,500 outstanding stock options is antidilutive for the nine and three months ended September 30, 2021 due to net loss for these periods. |
Additional Balance Sheet Info_2
Additional Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Balance Sheet Amounts | Certain balance sheet amounts are comprised of the following: (Thousands of dollars) September 30, 2022 December 31, 2021 Accounts Receivable: Joint interest billing $ 2,338 $ 1,902 Trade receivables 1,780 1,429 Oil and gas sales 13,095 11,154 Other 101 94 17,314 14,579 Less: Allowance for doubtful accounts (371 ) (371 ) Total $ 16,943 $ 14,208 Accounts Payable: Trade $ 1,428 $ 2,390 Royalty and other owners 3,605 2,802 Partner advances 1,062 1,209 Other 73 881 Total $ 6,168 $ 7,282 (Thousands of dollars) September 30, 2022 December 31, 2021 Accrued Liabilities: Compensation and related expenses $ 4,211 $ 3,919 Property costs 3,011 2,901 Taxes 3,213 893 Other 91 108 Total $ 10,526 $ 7,821 |
Other Long-Term Obligations a_2
Other Long-Term Obligations and Commitments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Operating and Financing Lease Obligation | The payment schedule for the Company’s operating lease obligations as of September 30, 2022 is as follows: (Thousands of dollars) Operating Leases 2022 174 2023 251 2024 107 2025 27 Total undiscounted lease payments $ 559 Less: Amount associated with discounting (54 ) Net operating lease liabilities $ 505 |
Reconciliation of Liability for Plugging and Abandonment Costs | A reconciliation of the liability for plugging and abandonment costs for the nine months ended September 30, 2022 is as follows: (Thousands of dollars) September 30, 2022 Asset retirement obligation at December 31, 2021 $ 14,295 Liabilities incurred 11 Liabilities settled (1,276 ) Accretion expense 503 Asset retirement obligation at September 30, 2022 $ 13,533 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2022 and December 31, 2021: September 30, 2022 Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at September 30, 2022 (Thousands of dollars) Assets Commodity derivative contracts $ — $ — $ 308 $ 308 Total assets $ — $ — $ 308 $ 308 Liabilities Commodity derivative contracts $ — $ — $ (3,975 ) $ (3,975 ) Total liabilities $ — $ — $ (3,975 ) $ (3,975 ) December 31, 2021 Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2021 (Thousands of dollars) Assets Commodity derivative contracts $ — $ — $ — $ — Total assets $ — $ — $ — $ — Liabilities Total liabilities $ — $ — $ (5,585 ) $ (5,585 ) |
Schedule of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3 | The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the nine months ended September 30, 2022. (Thousands of dollars) Net Liabilities – December 31, 2021 $ (5,585 ) Total realized and unrealized (gains) losses: Included in earnings (a) (12,074 ) Purchases, sales, issuances and settlements 13,992 Net Liabilities - September 30, 2022 $ (3,667 ) (a) Derivative instruments are reported in revenues as realized gain/loss and on a separately reported line item captioned unrealized gain/loss on derivative instruments. |
Effect of Derivative Instruments on Consolidated Balance Sheets | The following table sets forth the effect of derivative instruments on the consolidated balance sheets at September 30, 2022 and December 31, 2021: Fair Value (Thousands of dollars) Balance Sheet Location September 30, 2022 December 31, 2021 Asset Derivatives: Derivatives not designated as cash-flow hedging instruments: Crude oil commodity contracts Derivative asset short-term $ 308 $ — Total $ 308 $ — Liability Derivatives: Derivatives not designated as cash-flow hedging instruments: Crude oil commodity contracts Derivative liability short-term $ (2,072 ) $ (3,992 ) Natural gas commodity contracts Derivative liability short-term (1,903 ) (943 ) Crude oil commodity contracts Derivative liability long-term — (490 ) Natural gas commodity contracts Derivative liability long-term — (160 ) Total derivative instruments $ (3,975 ) $ (5,585 ) Total derivative instruments $ (3,667 ) $ (5,585 ) |
Effect of Derivative Instruments on Consolidated Statements of Operations | The following table sets forth the effect of derivative instruments on the consolidated statements of operations for the nine months ended September 30, 2022 and 2021: Amount of gain/loss recognized in income (Thousands of dollars) Location of gain/loss recognized in income 2022 2021 Derivatives not designated as cash-flow hedge instruments: Natural gas commodity contracts Unrealized (loss) on derivative instruments, net $ (800 ) $ (2,418 ) Crude oil commodity contracts Unrealized gain (loss) on derivative instruments, net 2,718 (4,744 ) Natural gas commodity contracts Realized (loss) on derivative instruments, net (3,603 ) (1,009 ) Crude oil commodity contracts Realized (loss) on derivative instruments, net (10,389 ) (1,887 ) $ (12,074 ) $ (10,058 ) |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings (Loss) per Share | The following reconciles amounts reported in the financial statements: Nine Months Ended September 30, 2022 2021 Net Income Weighted Average Number of Shares Outstanding Per Share Amount Net Loss (In 000’s) Weighted Average Number of Shares Outstanding Per Share Amount Basic $ 35,279 1,965,334 $ 17.95 $ (5,021 ) 1,994,177 $ (2.52 ) Effect of dilutive securities: Options (a) — 757,218 — Diluted $ 35,279 2,722,522 $ 12.96 $ (5,021 ) 1,994,177 $ (2.52 ) Three Months Ended September 30, 2022 2021 Net Income (In 000’s) Weighted Average Number of Shares Outstanding Per Share Amount Net Loss (In 000’s) Weighted Average Number of Shares Outstanding Per Share Amount Basic $ 13,154 1,937,091 $ 6.79 $ (1,163 ) 1,994,177 $ (0.58 ) Effect of dilutive securities: Options (a) — 757,815 — — — — Diluted $ 13,154 2,694,906 $ 4.88 $ (1,163 ) 1,994,177 $ (0.58 ) (a) The effect of the 767,500 outstanding stock options is antidilutive for the nine and three months ended September 30, 2021 due to net loss for these periods. |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 14, 2022 USD ($) a | Sep. 30, 2022 USD ($) a | Mar. 31, 2022 USD ($) a | Jun. 30, 2022 USD ($) a | |
Subsequent Event [Member] | ||||
Business Acquisition [Line Items] | ||||
Proceeds from Divestiture of Businesses | $ | $ 16,100 | |||
Number of acres exchanged | 725 | |||
Number of contiguous acres block created | 1,200 | |||
Number of acre created | 2,560 | |||
OKLAHOMA | ||||
Business Acquisition [Line Items] | ||||
Proceeds from Divestiture of Businesses | $ | $ 423,700 | $ 845,000 | ||
TEXAS | ||||
Business Acquisition [Line Items] | ||||
Number of Acres Sold | 1,809 | |||
Proceeds from Divestiture of Businesses | $ | $ 14,000 | |||
CANADA | ||||
Business Acquisition [Line Items] | ||||
Number of Acres Sold | 113 | 241 |
Additional Balance Sheet Info_3
Additional Balance Sheet Information - Components of Balance Sheet Amounts (Detail) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts Receivable: | ||
Joint interest billing | $ 2,338 | $ 1,902 |
Trade receivables | 1,780 | 1,429 |
Oil and gas sales | 13,095 | 11,154 |
Other | 101 | 94 |
Accounts Receivable, Gross | 17,314 | 14,579 |
Less: Allowance for doubtful accounts | (371) | (371) |
Total | 16,943 | 14,208 |
Accounts Payable: | ||
Trade | 1,428 | 2,390 |
Royalty and other owners | 3,605 | 2,802 |
Partner advances | 1,062 | 1,209 |
Other | 73 | 881 |
Total | 6,168 | 7,282 |
Accrued Liabilities: | ||
Compensation and related expenses | 4,211 | 3,919 |
Property costs | 3,011 | 2,901 |
Taxes | 3,213 | 893 |
Other | 91 | 108 |
Total | $ 10,526 | $ 7,821 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 9 Months Ended | |||
Dec. 20, 2021 | Sep. 30, 2022 | Jul. 05, 2022 | Feb. 15, 2017 | |
Debt Instrument [Line Items] | ||||
Outstanding borrowings under revolving credit facility | $ 0 | |||
2022 Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Credit facility borrowing capacity | $ 300,000,000 | |||
Equipment Loan, face amount | $ 75,000,000 | |||
2017 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility borrowing capacity | $ 300,000,000 | |||
Credit agreement date | Feb. 15, 2017 | |||
Line of credit facility, expiration date | Feb. 15, 2021 | |||
Equipment Loan, face amount | $ 50,000,000 | |||
Equipment Loan, maturity date | Feb. 11, 2023 | |||
2017 Credit Agreement [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 3% | |||
LIBOR Margin Rate | 4% | |||
2017 Credit Agreement [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 2% | |||
LIBOR Margin Rate | 3% |
Other Long-Term Obligations a_3
Other Long-Term Obligations and Commitments - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Lease period description | The Company leases office facilities under operating leases and recognizes lease expense on a straight-line basis over the lease term. Leases assets and liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term | |
Rent expense for office space | $ 563,000 | $ 441,000 |
Lease Payments With in One Year | 174,000 | |
Lease Payments Due Next year | 251,000 | |
Lease payments due next two years | 107,000 | |
Lease payments due next third years | $ 27,000 | |
Weighted-average discount rate | 5.50% | |
Operating Lease Payments | $ 499,000 | |
Operating Lease, Cost | $ 468,000 | |
Minimum [Member] | ||
Operating lease remaining lease term | 6 months | |
Maximum [Member] | ||
Operating lease remaining lease term | 30 months |
Other Long-Term Obligations a_4
Other Long-Term Obligations and Commitments - Summary of Operating and Financing Lease Obligation (Detail) | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 174,000 |
2023 | 251,000 |
2024 | 107,000 |
2025 | 27,000 |
Total undiscounted lease payments | 559,000 |
Less: Amount associated with discounting | (54,000) |
Net operating lease liabilities | $ 505,000 |
Other Long-Term Obligations a_5
Other Long-Term Obligations and Commitments - Reconciliation of Liability for Plugging and Abandonment Costs (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Asset retirement obligation | $ 14,295 |
Liabilities incurred | 11 |
Liabilities settled | (1,276) |
Accretion expense | 503 |
Asset retirement obligation | $ 13,533 |
Stock Options and Other Compe_2
Stock Options and Other Compensation - Additional Information (Detail) | Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 $ / shares | Sep. 30, 2021 $ / shares shares | May 31, 1989 Officers |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options outstanding, shares | shares | 767,500 | 767,500 | ||
Number of key executive officers to whom non-statutory stock options granted | Officers | 4 | |||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Average exercise price | $ / shares | $ 1 | $ 1 | ||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Average exercise price | $ / shares | $ 1.25 | $ 1.25 | ||
Nonstatutory Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options exercisable, shares | shares | 767,500 | 767,500 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Derivative assets | $ 308 | $ 0 |
Liabilities | ||
Derivative liabilities | (3,975) | (5,585) |
Commodity Contract [Member] | ||
Assets | ||
Derivative assets | 308 | 0 |
Liabilities | ||
Derivative liabilities | (3,975) | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets | ||
Derivative assets | 308 | 0 |
Liabilities | ||
Derivative liabilities | (3,975) | (5,585) |
Significant Unobservable Inputs (Level 3) [Member] | Commodity Contract [Member] | ||
Assets | ||
Derivative assets | 308 | $ 0 |
Liabilities | ||
Derivative liabilities | $ (3,975) |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3 (Detail) - Significant Unobservable Inputs (Level 3) [Member] $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net Liabilities at beginning of period | $ (5,585) | |
Total realized and unrealized (gains) losses: | ||
Included in earnings | (12,074) | [1] |
Purchases, sales, issuances and settlements | 13,992 | |
Net Liabilities end of period | $ (3,667) | |
[1]Derivative instruments are reported in revenues as realized gain/loss and on a separately reported line item captioned unrealized gain/loss on derivative instruments. |
Financial Instruments - Effect
Financial Instruments - Effect of Derivative Instruments on Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Total derivative instruments | $ (3,667) | $ (5,585) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 308 | |
Total derivative instruments | (3,975) | (5,585) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Natural Gas Commodity Contracts [Member] | Derivative liability short-term [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (1,903) | (943) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Natural Gas Commodity Contracts [Member] | Derivative liability Long Term [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (160) | |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Crude Oil Commodity Contracts [Member] | Derivative asset short-term [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 308 | |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Crude Oil Commodity Contracts [Member] | Derivative liability short-term [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ (2,072) | (3,992) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Crude Oil Commodity Contracts [Member] | Derivative liability Long Term [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ (490) |
Financial Instruments - Effec_2
Financial Instruments - Effect of Derivative Instruments on Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain/loss recognized in income | $ (12,074) | $ (10,058) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Natural Gas Commodity Contracts [Member] | Unrealized (loss) on derivative instruments, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain/loss recognized in income | (800) | (2,418) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Natural Gas Commodity Contracts [Member] | Realized (loss) on derivative instruments, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain/loss recognized in income | (3,603) | (1,009) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Crude Oil Commodity Contracts [Member] | Unrealized gain (loss) on derivative instruments, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain/loss recognized in income | 2,718 | (4,744) |
Derivatives Not Designated as Cash-Flow Hedging Instruments [Member] | Crude Oil Commodity Contracts [Member] | Realized (loss) gain on derivative instruments, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain/loss recognized in income | $ (10,389) | $ (1,887) |
Earnings per Share - Computatio
Earnings per Share - Computation of Basic and Diluted Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net (Loss) Income, Basic | $ 13,154 | $ (1,163) | $ 35,279 | $ (5,021) |
Net (Loss) Income, Diluted | $ 13,154 | $ (1,163) | $ 35,279 | $ (5,021) |
Weighted Average Number of Shares Outstanding, Basic | 1,937,091 | 1,994,177 | 1,965,334 | 1,994,177 |
Weighted Average Number of Shares Outstanding, Options | 757,815 | 757,218 | ||
Weighted Average Number of Shares Outstanding, Diluted | 2,694,906 | 1,994,177 | 2,722,522 | 1,994,177 |
Per Share Amount, Basic | $ 6.79 | $ (0.58) | $ 17.95 | $ (2.52) |
Per Share Amount, Diluted | $ 4.88 | $ (0.58) | $ 12.96 | $ (2.52) |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 767,500 | 767,500 |