☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2021 | 2020 | 2019 | ||||||||||||||||||||||
Gross | Net | Gross | Net | Gross | Net | |||||||||||||||||||
Exploratory: | ||||||||||||||||||||||||
Oil | — | — | — | — | — | — | ||||||||||||||||||
Gas | — | — | — | — | — | — | ||||||||||||||||||
Dry | — | — | — | — | — | — | ||||||||||||||||||
Development: | ||||||||||||||||||||||||
Oil | 12 | 4.61 | 1 | 0.1 | 18 | 1.6 | ||||||||||||||||||
Gas | — | — | — | — | — | — | ||||||||||||||||||
Dry | — | — | — | — | — | — | ||||||||||||||||||
Total: | ||||||||||||||||||||||||
Oil | 12 | 4.61 | 1 | 0.1 | 18 | 1.6 | ||||||||||||||||||
Gas | — | — | — | — | — | — | ||||||||||||||||||
Dry | — | — | — | — | — | — | ||||||||||||||||||
12 | 4.61 | 1 | 0.1 | 18 | 1.6 | |||||||||||||||||||
Gross | Net | |||||||
Producing wells (1) : | ||||||||
Oil Wells | 926 | 498 | ||||||
Gas Wells | 281 | 66 |
2021 | 2020 | 2019 | ||||||||||
Oil (barrels) | 738,000 | 726,996 | 1,242,000 | |||||||||
NGL (barrels) | 416,000 | 435,260 | 574,000 | |||||||||
Gas (Mcf) | 3,236,000 | 3,374,397 | 4,397,000 |
2021 | 2020 | 2019 | ||||||||||
Average sales price per barrel of oil | $ | 68.39 | $ | 38.02 | $ | 55.04 | ||||||
Average sales price per barrel of NGL | $ | 26.97 | $ | 11.22 | $ | 15.87 | ||||||
Average sales price per Mcf of natural gas | $ | 3.53 | $ | 1.24 | $ | 1.49 | ||||||
Average production costs per net equivalent barrel of oil (1) | $ | 13.76 | $ | 12.25 | $ | 11.52 |
2021 | 2020 | 2019 | ||||||||||
Average sales price per barrel of oil | $ | 64.04 | $ | 45.79 | $ | 53.58 | ||||||
Average sales price per barrel of NGL | $ | 26.97 | $ | 11.22 | $ | 16.49 | ||||||
Average sales price per Mcf of natural gas | $ | 2.97 | $ | 1.38 | $ | 1.51 |
Developed | Undeveloped | Total | ||||||||||||||||||||||
Gross | Net | Gross | Net | Gross | Net | |||||||||||||||||||
Leasehold acreage | 90,933 | 25,358 | — | — | 90,933 | 25,358 | ||||||||||||||||||
Mineral fee acreage | 1,640 | 117 | 19,257 | 417 | 20,897 | 534 | ||||||||||||||||||
Total | 92,573 | 25,475 | 19,257 | 417 | 111,830 | 25,892 | ||||||||||||||||||
Reserve Category | ||||||||||||||||||||||||||||||||||||||||||||||||
Proved Developed | Proved Undeveloped | Total | ||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, | Oil (MBbls) | NGLs (MBbls) | Gas (MMcf) | Total (MBoe) | Oil (MBbls) | NGLs (MBbls) | Gas (MMcf) | Total (MBoe) | Oil (MBbls) | NGLs (MBbls) | Gas (MMcf) | Total (MBoe) | ||||||||||||||||||||||||||||||||||||
2019 | 4,381 | 2,914 | 19,995 | 10,268 | 1,833 | 1,017 | 4,547 | 3,608 | 6,214 | 3,931 | 24,542 | 14,235 | ||||||||||||||||||||||||||||||||||||
2020 | 2,684 | 2,258 | 13,633 | 7,214 | 1,784 | 787 | 3,897 | 3,221 | 4,468 | 3,045 | 17,530 | 10,435 | ||||||||||||||||||||||||||||||||||||
2021 | 5,386 | 2,882 | 23,902 | 12,252 | — | — | — | — | 5,386 | 2,882 | 23,902 | 12,252 |
Proved Developed | Proved Undeveloped | Total | ||||||||||||||||||||||||||||||
As of December 31, | Future Net Revenue | Present Value 10 Of Future Net Revenue | Future Net Revenue | Present Value 10 Of Future Net Revenue | Future Net Revenue | Present Value 10 Of Future Net Revenue | Present Value 10 Of Future Income Taxes | Standardized Measure of Discounted Cash flow | ||||||||||||||||||||||||
2019 | $ | 116,592 | $ | 82,155 | $ | 42,700 | $ | 17,876 | $ | 159,292 | $ | 100,031 | $ | 18,419 | $ | 81,612 | ||||||||||||||||
2020 | $ | 43,886 | $ | 34,717 | $ | 37,346 | $ | 21,823 | $ | 81,232 | $ | 56,539 | $ | 14,920 | $ | 41,619 | ||||||||||||||||
2021 | $ | 275,227 | $ | 171,906 | $ | — | $ | — | $ | 275,227 | $ | 171,906 | $ | 36,100 | $ | 135,806 |
Gulf Coast | Mid- Continent | West Texas | Other | Total | ||||||||||||||||
Proved Reserves as of December 31, 2021 (MBoe) | ||||||||||||||||||||
Developed | 906 | 2,383 | 8,957 | 6 | 12,252 | |||||||||||||||
Undeveloped | — | — | — | — | — | |||||||||||||||
Total | 906 | 2,383 | 8,957 | 6 | 12,252 | |||||||||||||||
Average Net Daily Production (Boe per day) | 336 | 747 | 2,878 | 3 | 3,964 | |||||||||||||||
Gross Productive Wells (Working Interest and ORRI Wells) | 207 | 549 | 576 | 200 | 1,532 | |||||||||||||||
Gross Productive Wells (Working Interest Only) | 189 | 400 | 530 | 88 | 1,207 | |||||||||||||||
Net Productive Wells (Working Interest Only) | 105 | 189 | 263 | 6 | 564 | |||||||||||||||
Gross Operated Productive Wells | 137 | 195 | 321 | — | 653 | |||||||||||||||
Gross Operated Water Disposal, Injection and Supply wells | 7 | 44 | 6 | — | 57 |
High | Low | |||||||
2021 | ||||||||
First Quarter | $ | 98.00 | $ | 34.33 | ||||
Second Quarter | 53.72 | 39.89 | ||||||
Third Quarter | 73.80 | 45.20 | ||||||
Fourth Quarter | 71.71 | 58.50 | ||||||
2020 | ||||||||
First Quarter | $ | 154.38 | $ | 47.68 | ||||
Second Quarter | 110.79 | 49.70 | ||||||
Third Quarter | 79.13 | 62.60 | ||||||
Fourth Quarter | 71.80 | 42.39 |
Shares | per share | Shares that May Yet Be Purchased Under The Program at | ||||||||||
2021 Month | Number of Shares | Average Price Paid per share | Maximum Number of Shares that May Yet Be Purchased Under The Program at Month-End | |||||||||
August | — | — | 147,721 | |||||||||
September | — | — | 147,721 | |||||||||
October | — | — | 147,721 | |||||||||
November | — | — | 147,721 | |||||||||
December | 2,100 | 69.04 | 145,621 | |||||||||
Total / Average | 2,100 | $ | 69.04 | |||||||||
2022 | 2023 | 2022 | 2023 | |||||||||||||
Swap Agreements | ||||||||||||||||
Natural Gas (MMBTU) | 1,528,000 | 377,000 | $ | 3.15 | $ | 3.87 | ||||||||||
Oil (barrels) | 530,600 | 114,200 | $ | 66.20 | $ | 74.07 |
Twelve months ended December 31, | Increase / (Decrease) | Increase / (Decrease) | ||||||||||||||
2021 | 2020 | |||||||||||||||
Barrels of Oil Produced | 738,000 | 733,000 | 5,000 | 0.68 | % | |||||||||||
Average Price Received | $ | 68.39 | $ | 38.02 | $ | 30.38 | 79.91 | % | ||||||||
Oil Revenue (In 000’s) | $ | 50,474 | $ | 27,865 | $ | 22,609 | 81.14 | % | ||||||||
Mcf of Gas Sold | 3,236,000 | 3,381,000 | (145,000 | ) | (4.29 | )% | ||||||||||
Average Price Received | $ | 3.53 | $ | 1.24 | $ | 2.29 | 184.25 | % | ||||||||
Gas Revenue (In 000’s) | $ | 11,432 | $ | 4,202 | $ | 7,230 | 172.06 | % | ||||||||
Barrels of Natural Gas Liquids Sold | 416,000 | 437,000 | (21,000 | ) | (4.85 | )% | ||||||||||
Average Price Received | $ | 26.97 | $ | 11.22 | $ | 15.75 | 140.36 | % | ||||||||
Natural Gas Liquids Revenue (In 000’s) | $ | 11,220 | $ | 4,906 | $ | 6,314 | 128.70 | % | ||||||||
Total Oil & Gas Revenue (In 000’s) | $ | 73,126 | $ | 36,973 | $ | 36,153 | 97.78 | % |
Twelve months ended December 31, | ||||||||
2021 | 2020 | |||||||
Oil derivatives – realized (losses) gains | $ | (3,212 | ) | $ | 5,697 | |||
Oil derivatives – unrealized (losses) gains | (4,055 | ) | 161 | |||||
Total (losses) gains on oil derivatives | $ | (7,267 | ) | $ | 5,858 | |||
Natural gas derivatives – realized (losses) gains | (1,833 | ) | 476 | |||||
Natural gas derivatives – unrealized (losses) | (859 | ) | (351 | ) | ||||
Total (losses) gains on natural gas derivatives | $ | (2,692 | ) | $ | 125 | |||
Total (losses) gains on oil and natural gas | $ | (9,959 | ) | $ | 5,983 | |||
2021 | 2020 | Increase / (Decrease) | Increase / (Decrease) | |||||||||||||
Oil Price | $ | 64.04 | $ | 45.79 | $ | 18.25 | 39.9 | % | ||||||||
Gas Price | $ | 2.97 | $ | 1.38 | $ | 1.58 | 114.4 | % | ||||||||
NGL Price | $ | 26.97 | $ | 11.22 | $ | 15.75 | 140.4 | % |
☐ | ||
Accelerated Filer |
Smaller Reporting Company | ☒ | |||||
☐ |
Description of the Matter | At December 31, unit-of-production Interest costs related to financing major oil and gas projects in progress are capitalized until the projects are evaluated or until the projects are substantially complete and ready for their intended use if the projects are evaluated and successful. The Company reviews long-lived assets, including oil and gas properties, for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recovered. If the carrying amounts are not expected to be recovered by undiscounted cash flows, the assets are impaired, and an impairment loss is recorded. The amount of impairment is based on the estimated fair value of the assets determined by discounting anticipated future net cash flows. Proved oil and gas reserves directly impact financial accounting estimates, including depreciation, depletion and amortization. Proved reserves represent estimated quantities of natural gas, crude oil, condensate, and natural gas liquids that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions existing at the time the estimates were made. The process of estimating quantities of proved oil and gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. Consequently, material revisions (upward or downward) to existing reserve estimates may occur from time to time. Estimates of oil and gas reserves, as determined by independent petroleum engineers, are continually subject to revision based on price, production history and other factors. Depletion expense, which is computed based on the units of production method, could be significantly impacted by changes in such estimates. Additionally, U.S. generally accepted accounting principles require that if the expected future undiscounted cash flows from an asset are less than its carrying cost, that asset must be written down to its fair market value. As the fair market value of an oil and gas property will usually be significantly less than the total undiscounted future net revenues expected from that asset, slight changes in the estimates used to determine future net revenues from an asset could lead to the necessity of recording a significant impairment of that asset. Auditing the Company’s DD&A and impairment calculations is complex because of the use of independent petroleum engineers and the evaluation of management’s determination of the inputs described above used by the engineers in estimating oil and gas reserves. |
How We Addressed the Matter in Our Audit | We obtained an understanding and evaluated the design of the Company’s controls over its process to calculate DD&A and impairment, including management’s controls over the completeness and accuracy of the financial data utilized by the engineers in estimating oil and gas reserves. Our audit procedures included, among others, evaluating the professional qualifications and objectivity of the Company’s independent petroleum engineers responsible for the preparation of the proved oil and gas reserve estimates for select properties. We also utilized the services of an independent auditor-engaged specialist to ensure the methodologies and assumptions utilized by the Company’s independent engineers were reasonable and in accordance with industry standards. In addition, we compared the Company’s recent production with its reserve estimates for properties that have significant production or significant reserve quantities and inquired of disproportionate ratios that did not align with our expectations. We also tested the mathematical accuracy of the DD&A and impairment calculations, including comparing the oil and gas reserve amounts used in the calculations to the Company’s reserve reports. | |
Accounting for Asset Retirement Obligations | ||
Description of the Matter | At December 31, The Company’s liability is determined using significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive life of wells and a risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligation. Revisions to the asset retirement obligation are recorded with an offsetting change to producing properties, resulting in prospective changes to depreciation, depletion and amortization expense and accretion of discount. Because of the subjectivity of assumptions and the relatively long life of most of the Company’s wells, the costs to ultimately retire the wells may vary significantly from previous estimates. Auditing the Company’s ARO is complex and highly judgmental because of the significant estimation by management in determining the obligation. In particular, the estimate was sensitive to significant subjective assumptions such as retirement cost estimates and the estimated timing of settlements, which are both affected by expectations about future market and economic conditions. |
How We Addressed the Matter in Our Audit | We obtained an understanding and evaluated the design of the Company’s internal controls over its ARO estimation process, including management’s review of the significant assumptions that have a material effect on the determination of the obligations. |
As of December 31, | ||||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 10,347 | $ | 996 | ||||
Accounts receivable, net | 14,208 | 7,221 | ||||||
Prepaid obligations | 733 | 590 | ||||||
Other current assets | 40 | 104 | ||||||
Total Current Assets | 25,328 | 8,911 | ||||||
Property and Equipment | ||||||||
Oil and gas properties at cost | 539,484 | 520,488 | ||||||
Less: Accumulated depletion and depreciation | (359,742 | ) | (335,390 | ) | ||||
179,742 | 185,098 | |||||||
Field and office equipment at cost | 27,080 | 26,797 | ||||||
Less: Accumulated depreciation | (22,159 | ) | (20,842 | ) | ||||
4,921 | 5,955 | |||||||
Total Property and Equipment, Net | 184,663 | 191,053 | ||||||
Derivative asset long-term and other assets | 923 | 520 | ||||||
Total Assets | $ | 210,914 | $ | 200,484 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 7,282 | $ | 5,217 | ||||
Accrued liabilities | 7,821 | 6,787 | ||||||
Due to related parties | 52 | 38 | ||||||
Current portion of long-term debt | — | 487 | ||||||
Current portion of asset retirement and other long-term obligations | 1,630 | 867 | ||||||
Derivative liability short-term | 4,935 | 724 | ||||||
Total Current Liabilities | 21,720 | 14,120 | ||||||
Long-Term Bank Debt | 36,000 | 38,267 | ||||||
Asset Retirement Obligations | 13,222 | 12,891 | ||||||
Derivative Liability Long-Term | 650 | 44 | ||||||
Deferred Income Taxes | 38,743 | 36,367 | ||||||
Other Long-Term Obligations | 1,488 | 797 | ||||||
Total Liabilities | 111,823 | 102,486 | ||||||
Commitments and Contingencies | ||||||||
Equity | ||||||||
Common stock, $.10 par value; 2021 and 2020: Authorized: 2,810,000 shares, outstanding 2021: 1,992,077 shares; outstanding 2020: 1,994,177 shares . | 281 | 281 | ||||||
Paid-in capital | 7,555 | 7,541 | ||||||
Retained earnings | 128,902 | 126,804 | ||||||
Treasury stock, at cost; 2021: 817,923 shares; 2020: 815,823 | (37,647 | ) | (37,502 | ) | ||||
Total Stockholders’ Equity – PrimeEnergy | 99,091 | 97,124 | ||||||
Non-controlling interest | 0 | 874 | ||||||
Total Equity | 99,091 | 97,998 | ||||||
Total Liabilities and Equity | $ | 210,914 | $ | 200,484 | ||||
For the Year Ended December 31, | ||||||||
2021 | 2020 | |||||||
Revenues | ||||||||
Oil sales | $ | 50,474 | $ | 27,865 | ||||
Natural gas sales | 11,432 | 4,202 | ||||||
Natural gas liquids sales | 11,220 | 4,906 | ||||||
Realized gain (loss) on derivative instruments, net | (5,045 | ) | 6,173 | |||||
Field service income | 11,806 | 11,120 | ||||||
Administrative overhead fees | 4,611 | 4,163 | ||||||
Unrealized (loss) on derivative instruments | (4,914 | ) | (190 | ) | ||||
Other income | 29 | 182 | ||||||
Total Revenues | 79,613 | 58,421 | ||||||
Costs and Expenses | ||||||||
Lease operating expense | 27,804 | 23,028 | ||||||
Field service expense | 11,580 | 9,006 | ||||||
Depreciation, depletion, amortization and accretion on discounted liabilities | 26,325 | 28,176 | ||||||
General and administrative expense | 10,426 | 15,027 | ||||||
Total Costs and Expenses | 76,135 | 75,237 | ||||||
Gain on Sale and Exchange of Assets | 1,478 | 15,836 | ||||||
Income (Loss) from Operations | 4,956 | (980 | ) | |||||
Other Income and Expenses | ||||||||
Less: Interest expense | (2,007 | ) | (1,902 | ) | ||||
Add: Other income | — | 2 | ||||||
Add: PPP Loan Forgiveness | 1,693 | — | ||||||
Income (Loss) Before Provision for (Benefit from) Income Taxes | 4,642 | (2,880 | ) | |||||
Provision (Benefit from) Income Taxes | 2,516 | (517 | ) | |||||
Net Income (Loss) | 2,126 | (2,363 | ) | |||||
Less: Net Income (Loss) Attributable to Non-Controlling Interest | 28 | (47 | ) | |||||
Net Income (Loss) Attributable to PrimeEnergy | $ | 2,098 | $ | (2,316 | ) | |||
Basic Income (Loss) Per Common Share | $ | 1.05 | $ | (1.16 | ) | |||
Diluted Income (Loss) Per Common Share | $ | 0.76 | $ | (1.16 | ) | |||
Shares Outstanding | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Total Stockholders’ Equity – PrimeEnergy | Non- Controlling Interest | Total Equity | |||||||||||||||||||||||||
Balance at December 31, 2019 | 1,998,978 | $ | 281 | $ | 7,505 | $ | 129,120 | $ | (36,792 | ) | $ | 100,114 | $ | 3,249 | $ | 103,363 | ||||||||||||||||
Purchase 4,801 shares of common stock | (4,801 | ) | — | — | — | (710 | ) | (710 | ) | — | (710 | ) | ||||||||||||||||||||
Net loss | — | — | — | (2,316 | ) | — | (2,316 | ) | (47 | ) | (2,363 | ) | ||||||||||||||||||||
Purchase of non-controlling interest | — | — | 36 | — | — | 36 | (58 | ) | (22 | ) | ||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | — | (2,270 | ) | (2,270 | ) | ||||||||||||||||||||||
Balance at December 31, 2020 | 1,994,177 | $ | 281 | $ | 7,541 | $ | 126,804 | $ | (37,502 | ) | $ | 97,124 | $ | 874 | $ | 97,998 | ||||||||||||||||
Purchase 2,100 shares of common stock | (2,100 | ) | — | — | — | (145 | ) | (145 | ) | — | (145 | ) | ||||||||||||||||||||
Net Income | — | — | — | 2,098 | — | 2,098 | 28 | 2,126 | ||||||||||||||||||||||||
Purchase of non-controlling interest | — | — | 14 | 0 | — | 14 | (58 | ) | (44 | ) | ||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | 0 | — | — | (844 | ) | (844 | ) | ||||||||||||||||||||||
Balance at December 31, 2021 | 1,992,077 | $ | 281 | $ | 7,555 | $ | 128,902 | $ | (37,647 | ) | $ | 99,091 | $ | 0 | $ | 99,091 | ||||||||||||||||
For the Year Ended December 31, | ||||||||
2021 | 2020 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income (Loss) | $ | 2,126 | $ | (2,363 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation, depletion, amortization and accretion on discounted liabilities | 26,325 | 28,176 | ||||||
Gain on sale of properties | (1,478 | ) | (15,836 | ) | ||||
Unrealized loss (gain) on derivative instruments | 4,914 | 190 | ||||||
PPP Loan forgiveness | (1.693 | ) | — | |||||
Provision for deferred income taxes | 2,376 | 443 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (6,987 | ) | 7,139 | |||||
Due to related parties | 14 | 38 | ||||||
Prepaid expenses and other assets | (79 | ) | 58 | |||||
Accounts payable | 2,065 | (1,417 | ) | |||||
Accrued liabilities | 1,034 | (49 | ) | |||||
Net Cash Provided by Operating Activities | 28,617 | 16,379 | ||||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures, including exploration expense | (20,726 | ) | (10,523 | ) | ||||
Proceeds from sale of properties and equipment | 1,478 | 10,862 | ||||||
Net Cash (Used in) provided by Investing Activities | (19,248 | ) | 339 | |||||
Cash Flows from Financing Activities: | ||||||||
Purchase of stock for treasury | (145 | ) | (710 | ) | ||||
Purchase of non-controlling interests | (676 | ) | (742 | ) | ||||
Increase in long-term bank debt and other long-term obligations | 11,209 | 6,755 | ||||||
Repayment of long-term bank debt and other long-term obligations | (10,209 | ) | (21,983 | ) | ||||
Distribution to non-controlling interest | (197 | ) | (57 | ) | ||||
Net Cash (used in) Financing Activities | (18 | ) | (16,737 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | 9,351 | (19 | ) | |||||
Cash and Cash Equivalents at the Beginning of the Year | 996 | 1,015 | ||||||
Cash and Cash Equivalents at the End of the Year | $ | 10,347 | $ | 996 | ||||
Supplemental Disclosures: | ||||||||
Income taxes paid during the year | $ | 343 | $ | 1 | ||||
Interest paid during the year | $ | 1,957 | $ | 2,052 | ||||
Non-Cash Disclosures: | ||||||||
Purchase of non-controlling interest | $ | 14 | $ | 36 | ||||
Distribution of non-controlling interest in liquidated partnerships | $ | 647 | $ | 1,550 |
December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Joint interest billings | $ | 1,902 | $ | 2,475 | ||||
Trade receivables | 1,429 | 1,073 | ||||||
Oil and gas sales | 11,154 | 3,469 | ||||||
Other | 94 | 802 | ||||||
14,579 | 7,819 | |||||||
Less: Allowance for doubtful accounts | (371 | ) | (598 | ) | ||||
Total | $ | 14,208 | $ | 7,221 | ||||
December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Trade | $ | 2,390 | $ | 876 | ||||
Royalty and other owners | 2,802 | 3,569 | ||||||
Partner advances | 1,209 | 193 | ||||||
Other | 881 | 579 | ||||||
�� | ||||||||
Total | $ | 7,282 | $ | 5,217 | ||||
December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Compensation and related expenses | $ | 3,919 | $ | 3,331 | ||||
Property costs | 2,901 | 2,056 | ||||||
Taxes | 893 | 1,016 | ||||||
Other | 108 | 384 | ||||||
Total | $ | 7,821 | $ | 6,787 | ||||
(Thousands of dollars) | Operating Leases | |||
2022 | $ | 601 | ||
2023 | 150 | |||
Total undiscounted lease payments | $ | 751 | ||
Less: Amount associated with discounting | (59 | ) | ||
Net operating lease liabilities | $ | 692 | ||
Year Ended December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Asset retirement obligation at beginning of period | $ | 13,660 | $ | 21,118 | ||||
Liabilities incurred | 724 | 4 | ||||||
Liabilities settled | (1,047 | ) | (1,286 | ) | ||||
Liabilities divested | (52 | ) | (5,731 | ) | ||||
Accretion expense | 642 | 856 | ||||||
Revisions in estimated liabilities | 368 | (1,301 | ) | |||||
Asset retirement obligation at end of period | $ | 14,295 | $ | 13,660 | ||||
Year Ended December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Current: | ||||||||
Federal | $ | 81 | $ | 950 | ||||
State | 59 | 80 | ||||||
Total current | 140 | 1,030 | ||||||
Deferred: | ||||||||
Federal | 1,802 | (1,491 | ) | |||||
State | 574 | (56 | ) | |||||
Total deferred | 2,376 | (1,547 | ) | |||||
Total income tax provision | $ | 2,516 | $ | (517 | ) | |||
At December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Deferred Tax Assets: | ||||||||
Accrued liabilities | $ | 80 | $ | (584 | ) | |||
Allowance for doubtful accounts | 85 | 136 | ||||||
Derivative Contracts | 1,272 | 153 | ||||||
State Net operating loss carry-forwards | 470 | 760 | ||||||
Total deferred tax assets | 1,907 | 465 | ||||||
Deferred Tax Liabilities: | ||||||||
Partnership basis difference | (98 | ) | 544 | |||||
Depletion and depreciation | 40,748 | 36,288 | ||||||
Total deferred tax liabilities | 40,650 | 36,832 | ||||||
Net deferred tax liabilities | $ | 38,743 | $ | 36,367 | ||||
Year Ended December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Expected tax expense | $ | 975 | $ | (595 | ) | |||
Net changes in deferred assets and liabilities | 2,376 | (1,547 | ) | |||||
Permanent differences | (677 | ) | 521 | |||||
State income tax, net of federal benefit | 47 | 63 | ||||||
Provision to return adjustment | 744 | 1,547 | ||||||
Tax Credits | (948 | ) | (502 | ) | ||||
Other, net | (1 | ) | (4 | ) | ||||
Total income tax provision (benefit) | $ | 2,516 | $ | (517 | ) | |||
Dated: April 18, 2023 | By: | /s/ Charles E. Drimal, Jr. | ||||
Charles E. Drimal, Jr. | ||||||
Chairman, President |
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 | $ | — | $ | — | $ | 0 | $ | 0 | ||||||||
Total assets | $ | — | $ | — | $ | 0 | $ | 0 | ||||||||
Liabilities | ||||||||||||||||
Commodity derivative contracts | $ | — | $ | — | $ | (5,585 | ) | $ | (5,585 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (5,585 | ) | $ | (5,585 | ) | ||||||
December 31, 2020 | 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, 2020 | ||||||||||||
(Thousands of dollars) | ||||||||||||||||
Assets | ||||||||||||||||
Commodity derivative contracts | $ | — | $ | — | $ | 97 | $ | 97 | ||||||||
Total assets | $ | — | $ | — | $ | 97 | $ | 97 | ||||||||
Liabilities | ||||||||||||||||
Commodity derivative contract | $ | — | $ | — | $ | (768 | ) | $ | (768 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (768 | ) | $ | (768 | ) | ||||||
(Thousands of dollars) | ||||
Net Liabilities – December 31, 2020 | $ | (671 | ) | |
Total realized and unrealized gains (losses): | ||||
Included in earnings (a) | (9,959 | ) | ||
Purchases, sales, issuances and settlements | 5,045 | |||
Net Liabilities — December 31, 2021 | $ | (5,585 | ) | |
Fair Value | ||||||||||
(Thousands of dollars) | Balance Sheet Location | �� | December 31, 2021 | December 31, 2020 | ||||||
Asset Derivatives: | ||||||||||
Derivatives not designated as cash-flow hedging instruments: | ||||||||||
Natural gas commodity contracts | Derivative asset long-term and | $ | — | $ | 97 | |||||
Total | $ | — | $ | 97 | ||||||
Liability Derivatives: | ||||||||||
Derivatives not designated as cash-flow hedging instruments: | ||||||||||
Crude oil commodity contracts | Derivative liability short-term | $ | (3,992 | ) | $ | (428 | ) | |||
Natural gas commodity contracts | Derivative liability short-term | (943 | ) | (296 | ) | |||||
Crude oil commodity contracts | Derivative liability long-term | (490 | ) | — | ||||||
Natural gas commodity contracts | Derivative liability long-term | (160 | ) | (44 | ) | |||||
Total | $ | (5,585 | ) | $ | (768 | ) | ||||
Total derivative instruments | $ | (5,585 | ) | $ | (671 | ) |
(Thousands of dollars) | Location of gain/loss recognized in income | Amount of gain/loss recognized in income | ||||||||
2021 | 2020 | |||||||||
Derivatives not designated as cash-flow hedge instruments: | ||||||||||
Natural gas commodity contracts | Unrealized (loss) gain on derivative instruments, net | (859 | ) | (351 | ) | |||||
Crude oil commodity contracts | Unrealized (loss) gain on derivative instruments, net | (4,055 | ) | 161 | ||||||
Natural gas commodity contracts | Realized (loss) on derivative instruments, net | (1,833 | ) | 476 | ||||||
Crude oil commodity contracts | Realized (loss) gain on derivative instruments, net | (3,212 | ) | 5,697 | ||||||
$ | (9,959 | ) | $ | 5,983 | ||||||
Year Ended December 31, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Net Income (In 000’s) | Weighted Average Number of Shares Outstanding | Per Share Amount | Net Income (In 000’s) | Weighted Average Number of Shares Outstanding | Per Share Amount | |||||||||||||||||||
Basic | $ | 2,098 | 1,992,077 | $ | 1.05 | $ | (2,316 | ) | 1,994,425 | $ | (1.16 | ) | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||
Options (a) | — | 752,085 | — | |||||||||||||||||||||
Diluted | $ | 2,098 | 2,744,162 | $ | 0.76 | $ | (2,316 | ) | 1,994,425 | $ | (1.16 | ) | ||||||||||||
As of December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Proved Developed oil and gas properties | $ | 539,484 | $ | 520,488 | ||||
Proved Undeveloped oil and gas properties | 0 | 0— | ||||||
Total Capitalized Costs | 539,484 | 520,488 | ||||||
Accumulated depreciation, depletion and valuation allowance | (359,742 | ) | (335,390 | ) | ||||
Net Capitalized Costs | $ | 179,742 | $ | 185,098 | ||||
Year Ended December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Development Costs | $ | 18,678 | $ | 9,339 |
As of December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Future cash inflows | $ | 501,431 | $ | 221,090 | ||||
Future production costs | (207,697 | ) | (100,691 | ) | ||||
Future development costs | (18,507 | ) | (39,167 | ) | ||||
Future income tax expenses | (57,798 | ) | (15,135 | ) | ||||
Future Net Cash Flows | 217,429 | 66,097 | ||||||
10% annual discount for estimated timing of cash flows | (81,623 | ) | (24,479 | ) | ||||
Standardized Measure of Discounted Future Net Cash Flows | $ | 135,806 | $ | 41,619 | ||||
Year Ended December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Sales of oil and gas produced, net of production costs | $ | (45,322 | ) | $ | (13,945 | ) | ||
Net changes in prices and production costs | 143,750 | (16,578 | ) | |||||
Extensions, discoveries and improved recovery | 6,440 | 314 | ||||||
Revisions of previous quantity estimates | 18,991 | (36,919 | ) | |||||
Net change in development costs | (12,904 | ) | 20,724 | |||||
Reserves sold | (136 | ) | (874 | ) | ||||
Reserves purchased | 0 | 218 | ||||||
Accretion of discount | 4,162 | 8,161 | ||||||
Net change in income taxes | (21,180 | ) | 5,386 | |||||
Changes in production rates (timing) and other | 386 | (6,480 | ) | |||||
Net change | 94,187 | (39,993 | ) | |||||
Standardized measure of discounted future net cash flow: | ||||||||
Beginning of year | 41,619 | 81,612 | ||||||
End of year | $ | 135,806 | $ | 41,619 | ||||
As of December 31, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Oil (MBbls) | NGL’s (MBbls) | Gas (MMcf) | Oil (MBbls) | NGLs (MBbls) | Gas (MMcf) | |||||||||||||||||||
Proved Developed Reserves: | ||||||||||||||||||||||||
Beginning of year | 2,684 | 2,258 | 13,633 | 4,381 | 2,914 | 19,995 | ||||||||||||||||||
Extensions, discoveries and improved recovery | 69 | 1 | 628 | 11 | 7 | 36 | ||||||||||||||||||
Revisions of previous estimates | 133 | (29 | ) | 5,312 | (995 | ) | (239 | ) | (1,721 | ) | ||||||||||||||
Converted from undeveloped reserves | 1,747 | 231 | 1,067 | 25 | 5 | 66 | ||||||||||||||||||
Reserves sold | 15 | 5 | 26 | (29 | ) | 0 | (1,400 | ) | ||||||||||||||||
Reserve purchased | — | — | — | 24 | 8 | 38 | ||||||||||||||||||
Production | 738 | 416 | 3,236 | (733 | ) | (437 | ) | (3,381 | ) | |||||||||||||||
End of year | 5,386 | 2,882 | 23,902 | 2,684 | 2,258 | 13,633 | ||||||||||||||||||
Proved Undeveloped Reserves: | ||||||||||||||||||||||||
Beginning of year | 1,784 | 787 | 3,897 | 1,833 | 1,017 | 4,547 | ||||||||||||||||||
Extensions, discoveries and improved recovery | (61 | ) | (557 | ) | (2,726 | ) | — | — | — | |||||||||||||||
Revisions of previous estimates | 31 | 4 | 386 | (24 | ) | (224 | (584 | ) | ||||||||||||||||
Converted to developed reserves | (1,747 | ) | (231 | ) | (1,067 | ) | (25 | ) | (5 | ) | (66 | ) | ||||||||||||
Reserves Sold | (7 | ) | (4 | ) | (489 | ) | — | — | — | |||||||||||||||
End of year | — | — | — | 1,784 | 787 | 3,897 | ||||||||||||||||||
Total Proved Reserves at the End of the Year | 5,386 | 2,882 | 23,902 | 4,468 | 3,045 | 17,530 | ||||||||||||||||||
Year Ended December 31, | ||||||||
(Thousands of dollars) | 2021 | 2020 | ||||||
Revenue: | ||||||||
Oil and gas sales | $ | 73,126 | $ | 36,973 | ||||
Costs and Expenses: | ||||||||
Lease operating expenses | 27,804 | 23,028 | ||||||
Depreciation, depletion and accretion | 26,325 | 25,921 | ||||||
Income tax expense | 3,989 | (2,515 | ) | |||||
Total Costs and Expenses | 58,118 | 46,434 | ||||||
Results of Operations from Producing Activities (excluding corporate overhead and interest costs) | $ | 15,008 | $ | (9,461 | ) | |||