Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 09, 2019 | |
Income Taxes All Open Details | ||
Entity Registrant Name | PEDEVCO CORP | |
Entity Central Index Key | 0001141197 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,877,065 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 13,370 | $ 3,463 |
Restricted cash | 0 | 2,316 |
Accounts receivable - oil and gas | 1,381 | 842 |
Prepaid expenses and other current assets | 62 | 204 |
Total current assets | 14,813 | 6,825 |
Oil and gas properties: | ||
Oil and gas properties, subject to amortization, net | 72,351 | 51,946 |
Oil and gas properties, not subject to amortization, net | 2,190 | 8,516 |
Total oil and gas properties, net | 74,541 | 60,462 |
Other assets | 3,575 | 238 |
Total assets | 92,929 | 67,525 |
Current liabilities: | ||
Accounts payable | 2,843 | 4,509 |
Accrued expenses | 1,335 | 3,391 |
Revenue payable | 817 | 831 |
Asset retirement obligations - current | 129 | 119 |
Total current liabilities | 5,124 | 8,850 |
Long-term liabilities: | ||
Accrued expenses | 0 | 14 |
Accrued expenses - related party | 0 | 943 |
Notes payable - Subordinated | 0 | 400 |
Notes payable - Subordinated - related party | 0 | 30,200 |
Notes payable - related party, net of debt discount of $-0- and $161, respectively | 0 | 7,694 |
Asset retirement obligations | 2,516 | 2,452 |
Total liabilities | 7,640 | 50,553 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common stock, $0.001 par value, 200,000,000 shares authorized; 53,827,065 and 15,808,445 shares issued and outstanding, respectively | 53 | 16 |
Additional paid-in-capital | 175,185 | 101,450 |
Accumulated deficit | (89,949) | (84,494) |
Total shareholders' equity | 85,289 | 16,972 |
Total liabilities and shareholders' equity | $ 92,929 | $ 67,525 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Notes payable - related party, net of debt discount | $ 0 | $ 161 |
Stockholders' equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 53,827,065 | 15,808,445 |
Common stock, shares outstanding | 53,827,065 | 15,808,445 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue: | ||||
Oil and gas sales | $ 4,070 | $ 898 | $ 5,638 | $ 1,542 |
Operating expenses: | ||||
Lease operating costs | 2,095 | 417 | 3,065 | 729 |
Exploration expense | 13 | 28 | 23 | 38 |
Selling, general and administrative expense | 1,644 | 616 | 2,972 | 1,354 |
Depreciation, depletion, amortization and accretion | 2,784 | 701 | 5,033 | 1,283 |
Total operating expenses | 6,536 | 1,762 | 11,093 | 3,404 |
Gain on sale of oil and gas properties | 0 | 0 | 920 | 0 |
Operating loss | (2,466) | (864) | (4,535) | (1,862) |
Other income (expense): | ||||
Interest expense | 0 | (3,155) | (826) | (6,391) |
Interest Income | 9 | 0 | 9 | 0 |
Gain on debt restructuring | 0 | 70,309 | 0 | 70,309 |
Other expense | (3) | 0 | (103) | 0 |
Total other income (expense) | 6 | 67,154 | (920) | 63,918 |
Net income (loss) | $ (2,460) | $ 66,290 | $ (5,455) | $ 62,056 |
Earnings (loss) per common share: Basic | $ (0.05) | $ 9.01 | $ (0.14) | $ 8.48 |
Earnings (loss) per common share: Diluted | $ (0.05) | $ 4.73 | $ (0.14) | $ 4.44 |
Weighted average number of common shares outstanding: Basic | 49,198,625 | 7,357,234 | 38,572,537 | 7,318,211 |
Weighted average number of common shares outstanding: Diluted | 49,198,625 | 14,026,722 | 38,572,537 | 13,982,684 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (5,455) | $ 62,056 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation, depletion and amortization | 5,033 | 1,283 |
Stock-based compensation expense | 697 | 349 |
Interest expense deferred and capitalized in debt restructuring | 0 | 3,803 |
Gain on debt restructuring | 0 | (70,309) |
Gain on sale of oil and gas properties | (920) | 0 |
Amortization of debt discount | 161 | 1,391 |
Changes in operating assets and liabilities: | ||
Accounts receivable - oil and gas | (539) | (345) |
Prepaid expenses and other current assets | 142 | 46 |
Accounts payable | 4,373 | 244 |
Accrued expenses | (450) | 1,109 |
Accrued expenses - related parties | (943) | 0 |
Revenue payable | (14) | 97 |
Net cash provided by (used in) operating activities | 2,085 | (276) |
Cash Flows From Investing Activities: | ||
Cash paid for the acquisition of oil and gas properties | (1,056) | 0 |
Cash paid for drilling and completion costs | (24,269) | 0 |
Proceeds from the sale of oil and gas property | 1,175 | 0 |
Cash paid for property and equipment | (47) | 0 |
Net cash used in investing activities | (24,197) | 0 |
Cash Flows From Financing Activities: | ||
Proceeds from notes payable - related parties | 15,000 | 7,700 |
Repayment of notes payable | 0 | (7,795) |
Proceeds from issuance of common shares | 18,000 | 0 |
Net cash provided by (used in) financing activities | 33,000 | (95) |
Net increase (decrease) in cash and restricted cash | 10,888 | (371) |
Cash and restricted cash at beginning of period | 5,779 | 917 |
Cash and restricted cash at end of period | 16,667 | 546 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for: Interest | 0 | 0 |
Cash paid for: Income Taxes | 0 | 0 |
Noncash Investing and Financing Activities: | ||
Change in accrued oil and gas development costs | 6,039 | 0 |
Acquisition of asset retirement obligations | 33 | 0 |
Changes in estimates of asset retirement obligations | 129 | 7 |
Common stock issued as debt inducement | 0 | 185 |
Common stock issued for debt conversion | $ 55,075 | $ 0 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Series A Convertible Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2017 | $ 0 | $ 7 | $ 100,954 | $ (138,101) | $ (37,140) |
Beginning Balance, Shares at Dec. 31, 2017 | 66,625 | 7,278,754 | |||
Shared-based compensation | 183 | 183 | |||
Net income/(loss) | (4,234) | (4,234) | |||
Ending Balance, Amount at Mar. 31, 2018 | $ 0 | $ 7 | 101,137 | (142,335) | (41,191) |
Ending Balance, Shares at Mar. 31, 2018 | 66,625 | 7,278,754 | |||
Beginning Balance, Amount at Dec. 31, 2017 | $ 0 | $ 7 | 100,954 | (138,101) | (37,140) |
Beginning Balance, Shares at Dec. 31, 2017 | 66,625 | 7,278,754 | |||
Issuance of common stock for exercise of warrants, Amount | 185 | ||||
Net income/(loss) | 62,056 | ||||
Ending Balance, Amount at Jun. 30, 2018 | $ 0 | $ 8 | 101,809 | (76,045) | 25,772 |
Ending Balance, Shares at Jun. 30, 2018 | 66,625 | 7,989,602 | |||
Beginning Balance, Amount at Mar. 31, 2018 | $ 0 | $ 7 | 101,137 | (142,335) | (41,191) |
Beginning Balance, Shares at Mar. 31, 2018 | 66,625 | 7,278,754 | |||
Conversion of stock options, Shares | 30,848 | ||||
Issuance of restricted common stock, Shares | 80,000 | ||||
Issuance of common stock for debt conversions, Amount | $ 1 | 184 | 185 | ||
Issuance of common stock for debt conversions, Shares | 600,000 | ||||
Issuance of warrants for debt repayment | 322 | 322 | |||
Shared-based compensation | 166 | 166 | |||
Net income/(loss) | 66,290 | 66,290 | |||
Ending Balance, Amount at Jun. 30, 2018 | $ 0 | $ 8 | 101,809 | (76,045) | 25,772 |
Ending Balance, Shares at Jun. 30, 2018 | 66,625 | 7,989,602 | |||
Beginning Balance, Amount at Dec. 31, 2018 | $ 0 | $ 16 | 101,450 | (84,494) | 16,972 |
Beginning Balance, Shares at Dec. 31, 2018 | 0 | 15,808,445 | |||
Issuance of common stock for debt conversions, Amount | $ 29 | 55,046 | 55,075 | ||
Issuance of common stock for debt conversions, Shares | 29,480,383 | ||||
Shared-based compensation | 299 | 299 | |||
Net income/(loss) | (2,995) | (2,995) | |||
Ending Balance, Amount at Mar. 31, 2019 | $ 0 | $ 45 | 156,795 | (87,489) | 69,351 |
Ending Balance, Shares at Mar. 31, 2019 | 0 | 45,288,828 | |||
Beginning Balance, Amount at Dec. 31, 2018 | $ 0 | $ 16 | 101,450 | (84,494) | 16,972 |
Beginning Balance, Shares at Dec. 31, 2018 | 0 | 15,808,445 | |||
Issuance of common stock for exercise of warrants, Amount | 0 | ||||
Net income/(loss) | (5,455) | ||||
Ending Balance, Amount at Jun. 30, 2019 | $ 0 | $ 53 | 175,185 | (89,949) | 85,289 |
Ending Balance, Shares at Jun. 30, 2019 | 0 | 53,827,065 | |||
Beginning Balance, Amount at Mar. 31, 2019 | $ 0 | $ 45 | 156,795 | (87,489) | 69,351 |
Beginning Balance, Shares at Mar. 31, 2019 | 0 | 45,288,828 | |||
Issuance of restricted common stock, Shares | 160,000 | ||||
Issuance of common stock to non-affiliates, Amount | $ 1 | 2,999 | 3,000 | ||
Issuance of common stock to non-affiliates, Shares | 1,500,000 | ||||
Issuance of common stock to affiliate, Amount | $ 7 | 14,993 | 15,000 | ||
Issuance of common stock to affiliate, Shares | 6,818,181 | ||||
Issuance of common stock for exercise of warrants, Shares | 60,056 | ||||
Shared-based compensation | 398 | 398 | |||
Net income/(loss) | (2,460) | (2,460) | |||
Ending Balance, Amount at Jun. 30, 2019 | $ 0 | $ 53 | $ 175,185 | $ (89,949) | $ 85,289 |
Ending Balance, Shares at Jun. 30, 2019 | 0 | 53,827,065 |
1. BASIS OF PRESENTATION
1. BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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, 2018, filed with the SEC on April 1, 2019, 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, and the actual cost of exploration, appraisal and development of our prospects. |
2. DESCRIPTION OF BUSINESS
2. DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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-Julesberg Basin (“D-J Basin”) in Colorado. The Company holds its Permian Basin acres located in Chavez and Roosevelt Counties, New Mexico, through its wholly-owned operating subsidiary, Pacific Energy Development Corp. (“PEDCO”), which asset the Company refers to as its “Permian Basin Asset,” and it holds its D-J Basin acres located in Weld and Morgan Counties, Colorado, through its wholly-owned operating subsidiary, Red Hawk Petroleum, LLC (“Red Hawk”), which asset the Company refers to as its “D-J Basin Asset.” The Company’s strategy is to be the operator, directly or through its subsidiaries and joint ventures, in the majority of its acreage so it can dictate the pace of development in order to execute its business plan. The majority of its capital expenditure budget through 2019 will be focused on the development of the Company’s Permian Basin Asset, with a secondary focus on development of its D-J Basin Asset. The Company’s 2019 total development plan calls for the deployment of an estimated $50 million in capital, of which approximately $40 million has been raised to date. On the Company’s Permian Basin Asset, four initial horizontal wells were drilled in the first quarter of 2019 in Phase One of its development plan. Phase Two of the development program began in July 2019, which plans for the drilling and completion of four new horizontal San Andres wells, drilling of one salt water disposal well, the completion of one drilled uncompleted horizontal well, and putting on first production of a well drilled and completed in Phase One which was not put on production during Phase One due to salt water disposal constraints. The Company’s future D-J Basin Asset development plans are currently under evaluation for its operated acreage, but the Company anticipates deploying approximately $1 million in capital to participate in drilling and completion operations by other operators on its non-operated acreage through 2019. The Company expects that it will have sufficient cash available to meet its needs over the foreseeable future, which cash the Company anticipates being available from (i) its projected cash flows from operations, (ii) its existing cash on hand, (iii) equity infusions or loans (which may be convertible) made available from SK Energy LLC, which is 100% owned and controlled by Dr. Simon Kukes, the Company’s Chief Executive Officer and director (“SK Energy”), which funding SK Energy is under no obligation to provide, and (iv) funding through credit or loan facilities. In addition, the Company may seek additional funding through asset sales, farm-out arrangements, lines of credit, or public or private debt or equity financings to fund additional 2019 capital expenditures and/or acquisitions. If market conditions are not conducive to raising additional funds, the Company may choose to extend the drilling program and associated capital expenditures further into 2020. |
3. SUMMARY OF SIGNIFICANT ACCOU
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | The Company has provided a discussion of significant accounting policies, estimates and judgments in its 2018 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2018. Recently Adopted Accounting Pronouncements Revenue Recognition. Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” Revenue Recognition (Topic 605) Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases (Topic 842)” Leases (Topic 842): Targeted Improvements” In addition, the Company elected practical expedients provided by the new standard whereby, the Company has elected to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs and to retain off-balance sheet treatment of short-term leases (i.e., 12 months or less and does not contain a purchase option that the Company is reasonably certain to exercise). As a result of the short-term expedient election, the Company has no leases that require the recording of a net lease asset and lease liability on the Company’s consolidated balance sheet or have a material impact on consolidated earnings or cash flows as of June 30, 2019. Moving forward, the Company will evaluate any new lease commitments for application of Topic 842. Compensation-Stock Compensation. In June 2018, the FASB issued ASU 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”. Recently Issued Accounting Pronouncements The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. Subsequent Events The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
4. REVENUE FROM CONTRACTS WITH
4. REVENUE FROM CONTRACTS WITH CUSTOMERS | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | Exploration and Production. Disaggregation of Revenue from Contracts with Customers. Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Oil sales $ 4,037 $ 5,490 Natural gas sales 26 135 Natural gas liquids sales 7 13 Total revenue from customers $ 4,070 $ 5,638 There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of June 30, 2019. |
5. RESTRICTED CASH
5. RESTRICTED CASH | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
RESTRICTED 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 shown in the accompanying consolidated statements of cash flows (in thousands): As of June 30, 2019 2018 Cash $ 13,370 $ 917 Restricted cash included in other assets 3,297 - Total cash and restricted cash as shown in the consolidated statements of cash flows $ 16,667 $ 917 |
6. OIL AND GAS PROPERTIES
6. OIL AND GAS PROPERTIES | 6 Months Ended |
Jun. 30, 2019 | |
Oil and Gas Property [Abstract] | |
OIL AND GAS PROPERTIES | The following table summarizes the Company’s oil and gas activities by classification for the six months ended June 30, 2019 (in thousands): Balance at December 31, Balance at June 30, 2018 Additions Disposals Transfers 2019 Oil and gas properties, subject to amortization $ 70,803 $ 19,016 $ (255 ) $ 6,596 $ 96,160 Oil and gas properties, not subject to amortization 8,516 270 - (6,596 ) 2,190 Asset retirement costs 2,188 (96 ) - - 2,092 Accumulated depreciation and depletion (21,045 ) (4,856 ) - - (24,901 ) Total oil and gas assets $ 60,462 $ 14,334 $ (255 ) $ - $ 74,541 On February 1, 2019, for consideration of $700,000, the Company completed an asset purchase from Manzano, LLC and Manzano Energy Partners II, LLC, whereby the Company purchased approximately 18,000 net leasehold acres, ownership and operated production from one horizontal well currently producing from the San Andres play in the Permian Basin, ownership of three additional shut-in wells and ownership of one saltwater disposal well. The Company subsequently drilled one Manzano well in Phase Two of its 2019 development plan, which has yet to be completed as of June 30, 2019. On March 7, 2019, Red Hawk sold rights to 85.5 net acres of oil and gas leases located in Weld County, Colorado, to a third party, for aggregate proceeds of $1.2 million and recognized a gain on sale of oil and gas properties of $920,000 on the statement of operations. The sale agreement included a provision whereby the purchaser was required to assign Red Hawk 85 net acres of leaseholds in an area located where the Company already owns other leases in Weld County, Colorado, within nine months from the date of the sale, or to repay the Company up to $200,000 (proportionally adjusted for the amount of leasehold delivered). The purchaser has not yet identified or assigned the required leasehold acreage to the Company. Effective June 10, 2019, for consideration of $350,000, the Company completed an asset purchase from a private operator, whereby the Company purchased approximately 2,076 net leasehold acres, ownership and operated production from 22 vertical wells currently producing from the San Andres play in the Permian Basin and ownership of three injection wells. For the three and six months ended June 30, 2019, the Company has incurred $5.4 million and $18.2 million, respectively, in capital cost which included drilling costs for the drilling of five wells (four of which were completed), and corresponding facility costs. There were no drilling costs for the three and six months ended June 30, 2018. The depletion recorded for production on proved properties for the three and six months ended June 30, 2019 and 2018, amounted to $2,715,000 compared to $688,000, and $4,855,000, compared to $1,251,000, respectively. |
7. OTHER CURRENT ASSETS
7. OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Other Assets [Abstract] | |
OTHER CURRENT ASSETS | On September 11, 2013, the Company entered into a Shares Subscription Agreement (“SSA”) to acquire an approximate 51% ownership in Asia Sixth Energy Resources Limited (“Asia Sixth”), which held an approximate 60% ownership interest in Aral Petroleum Capital Limited Partnership (“Aral”), a Kazakhstan entity. In August 2014 the SSA was restructured (the “Aral Restructuring”), in connection with which the Company received a promissory note in the principal amount of $10.0 million from Asia Sixth (the “A6 Promissory Note”), which was to be converted into a 10.0% interest in Caspian Energy, Inc. (“Caspian Energy”), an Ontario, Canada company listed at that time on the NEX Board of the TSX Venture Exchange, upon the consummation of the Aral Restructuring. The Aral Restructuring was consummated on May 20, 2015, upon which date the A6 Promissory Note was converted into 23,182,880 shares of common stock of Caspian Energy. In February 2015, the Company expanded its D-J Basin position through the acquisition of acreage from Golden Globe Energy (US), LLC (“GGE”)(the “GGE Acquisition” and the “GGE Acquired Assets”). In connection with the GGE Acquisition, on February 23, 2015, the Company provided GGE an option to acquire its interest in Caspian Energy for $100,000 payable upon exercise of the option (with an expiration date of May 12, 2019) recorded in prepaid expenses and other current assets. As a result, the carrying value of the 23,182,880 shares of common stock of Caspian Energy which were issued upon conversion of the A6 Promissory Note at December 31, 2015 was $100,000. The shares of Caspian Energy underlying the option were classified as part of other current assets. The option expired without being exercised on May 12, 2019. The Company fully reserved the $100,000 and recognized no value related to the shares of Caspian Energy on the Company’s balance sheet as of June 30, 2019 as the Company determined the value of the shares to be $0 as a result of it delisting from the NEX Board of the TSX Venture Exchange. |
8. NOTES PAYABLE
8. NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2019 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | The Company’s notes payable consisted of the following (in thousands): June 30, December 31, 2019 2018 Notes Payable - Subordinated $ - $ 400 Notes Payable - Subordinated Related Party - 30,200 Notes Payable - Related Party - 7,855 - 38,455 Unamortized Debt Discount - (161 ) Total Notes Payable $ - $ 38,294 Convertible Note Issuances On June 26, 2018, the Company borrowed $7.7 million from SK Energy under a Promissory Note dated June 25, 2018, in the amount of $7.7 million (the “June 2018 SK Energy Note”) and shown on the balance sheet as Note Payable – Related Party, net of debt discount from the issuance of 600,000 shares of common stock (as described below) with a fair value of $185,000 based on the market price at the issuance date. The June 2018 SK Energy Note accrues interest monthly at 8% per annum, payable quarterly, in either cash or shares of common stock (at the option of the Company), or, with the consent of SK Energy, such interest may be accrued and capitalized. As additional consideration for SK Energy agreeing to the terms of the June 2018 SK Energy Note, the Company agreed to issue SK Energy 600,000 shares of common stock (the “Loan Shares”), with a fair value of $185,000 based on the market price on the date of issuance that was accounted for as a debt discount and is being amortized over the term of the note. Based on a conversion price equal to $2.18 per share, pursuant to the conversion terms of the June 2018 SK Energy Note, the amount of interest under the June 2018 SK Energy Note as of December 31, 2018 equaled $155,000 and was included in the outstanding principal balance of $7,855,000, for interest not paid or issued in common stock when due, the amount is recapitalized into the face value of the note, per the terms of the June 2018 SK Energy Note. The total amount of the remaining debt discount reflected on the accompanying balance sheet as of December 31, 2018 was $161,000, which was amortized in full as of June 30, 2019, due to the note conversions, which included $107,000 of additional interest that was included in the principal balance, noted below under “Convertible Notes Amendment and Conversion” and “SK Energy Note Amendment; Note Purchases and Conversion”. On August 1, 2018, the Company received total proceeds of $23,600,000 from the sale of multiple Convertible Promissory Notes (the “Convertible Notes”). A total of $22,000,000 in Convertible Notes were purchased by SK Energy (the “August 2018 SK Energy Note”); $200,000 in Convertible Notes were purchased by an executive officer of SK Energy; $500,000 in Convertible Notes were purchased by a trust affiliated with John J. Scelfo, a director of the Company; $500,000 in Convertible Notes were purchased by an entity affiliated with Ivar Siem, our director, and J. Douglas Schick, President of the Company; $200,000 in Convertible Notes was purchased by H. Douglas Evans (who became a Director and related party on September 27, 2018); and $200,000 in Convertible Notes were purchased by an unaffiliated party. The $23,600,000 is accounted for on the balance sheet as $23,200,000 of subordinated notes payable – related party and $400,000 as subordinated notes, as these notes are subordinated to the original June 2018 SK Energy Note. The Convertible Notes accrue interest monthly at 8.5% per annum, which interest is payable on the maturity date unless otherwise converted into our common stock as described below. The accrued interest is accounted for on the balance sheet as of December 31, 2018 as $943,000 of accrued interest – related party and $14,000 of accrued interest. As of June 30, 2019, there was no accrued interest – related party or accrued interest, as $347,000 of accrued interest – related party and $6,000 of accrued interest incurred during 2019 together with the accrued interest outstanding as of December 31, 2018 was converted into shares of common stock due to the note conversions described below. The Convertible Notes and all accrued interest thereon are convertible into shares of our common stock, from time to time after August 29, 2018, at the option of the holders thereof, at a conversion price equal to $2.13 per share, per terms of the Convertible Notes. On October 25, 2018, the Company borrowed an additional $7.0 million from SK Energy, through the sale of a convertible promissory note in the amount of $7.0 million (the “October 2018 SK Energy Note”). The October 2018 SK Energy Note had substantially similar terms as the August 2018 SK Energy Note, except that it had a conversion price of $1.79 per share. The October 2018 SK Energy Note is due and payable on October 25, 2021 but may be prepaid at any time without penalty. The accrued interest expense related to this note for the year ended December 31, 2018 was $109,000 and is accounted for on the balance sheet as accrued interest – related party. As of June 30, 2019, there was no accrued interest – related party, as accrued interest of $78,000 incurred during 2019 together with the accrued interest outstanding as of December 31, 2018 was converted into shares of common stock due to the note conversions described below. January 2019 SK Energy Convertible Note On January 11, 2019, the Company borrowed an additional $15.0 million from SK Energy, through the sale of a convertible promissory note in the amount of $15.0 million (the “January 2019 SK Energy Note”). The January 2019 SK Energy Note had substantially similar terms as the August 2018 SK Energy Note, except that it had a conversion price of $1.50 per share. The January 2019 SK Energy Note is due and payable on January 11, 2022 but may be prepaid at any time without penalty. As of June 30, 2019, there was no outstanding principal or accrued interest – related party due to the note conversions described below. Accrued interest-related party for this note prior to the conversion totaled $126,000. Convertible Notes Amendment and Conversion On February 15, 2019, the Company and SK Energy agreed to amend the Convertible Notes (including the August 2018 SK Energy Note), October 2018 SK Energy Note, and the January 2019 SK Energy Note, to remove the conversion limitation that previously prevented SK Energy from converting any portion of the notes into common stock of the Company if such conversion would have resulted in SK Energy beneficially owning more than 49.9% of the Company’s outstanding shares of common stock Immediately following the entry into the amendment, on February 15, 2019, SK Energy elected to convert (i) all $15,000,000 of the outstanding principal and all $126,000 of accrued interest then owed under the January 2019 SK Energy Note into common stock of the Company at a conversion price of $1.50 per share, as set forth in the January 2019 SK Energy Note into 10,083,819 shares of restricted common stock of the Company, and (ii) all $7,000,000 of the outstanding principal and all $187,000 of accrued interest under the October 2018 SK Energy Note into common stock of the Company at a conversion price of $1.79 per share, as set forth in the October 2018 SK Energy Note, into 4,014,959 shares of restricted common stock of the Company. On March 1, 2019, the Company and SK Energy amended the June 2018 SK Energy Note, to provide SK Energy the right, at any time, at its option, to convert the principal and interest owed under such June 2018 SK Energy Note, into shares of the Company’s common stock, at a conversion price of $2.13 per share. In addition, on March 1, 2019, the holders of $1,500,000 in aggregate principal amount of Convertible Notes sold their Convertible Notes at face value plus accrued and unpaid interest through March 1, 2019 to SK Energy (the “Convertible Note Sale”). Holders which sold their Convertible Notes pursuant to the Convertible Note Sale to SK Energy, included an executive officer of SK Energy ($200,000 in principal amount of Convertible Notes); a trust affiliated with John J. Scelfo, a director of the Company ($500,000 in principal amount of Convertible Notes); an entity affiliated with Ivar Siem, a director of the Company, and J. Douglas Schick the President of the Company ($500,000 in principal amount of Convertible Notes); and Harold Douglas Evans, a director of the Company ($200,000 in principal amount of Convertible Notes). Immediately following the effectiveness of the SK Energy Note Amendment and Convertible Note Sale, on March 1, 2019, SK Energy and the Unaffiliated Holder elected to convert all $31,300,000 of outstanding principal and an aggregate of $1,460,000 of accrued interest under the June 2018 SK Energy Note, SK Energy’s $22 million Convertible Note and all other Convertible Notes, into common stock of the Company at a conversion price of $2.13 per share (the “Conversion Price” and the “Conversions”) as set forth in the June 2018 SK Energy Note, as amended, and the Convertible Notes (including SK Energy’s $22 million Convertible Note (collectively, the “Notes”), into an aggregate of 15,381,605 shares of restricted common stock of the Company (the “Conversion Shares”). |
9. ASSET RETIREMENT OBLIGATIONS
9. ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | Activity related to the Company’s asset retirement obligations is as follows (in thousands): Six Months Ended June 30, 2019 Balance at the beginning of the period (1) $ 2,571 Accretion expense 170 Obligations incurred for acquisition 33 Changes in estimates (129 ) Balance at end of period (2) $ 2,645 (1) Includes $119,000 of current asset retirement obligations included in accrued liabilities at December 31, 2018. (2) Includes $129,000 of current asset retirement obligations included in accrued liabilities at June 30, 2019. |
10. COMMITMENTS AND CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Office Lease Change in Accounting Policy. “Leases (Topic 842)” and Leases (Topic 842): Targeted Improvements” In June 2018, the Company assumed the lease for its corporate office space located in Houston, Texas from American Resources, Inc., an entity beneficially owned and controlled by Ivar Siem, a director of the Company, and J. Douglas Schick, the Company’s President. The term of the lease ends on August 31, 2019, and the obligation for the remainder of this lease is $22,000. Effective September 1, 2019, the Company plans to move its corporate headquarters from 1250 Wood Branch Park Dr., Suite 400, Houston, Texas 77079 to 575 N. Dairy Ashford, Houston, Texas 77079 in connection with the expiration of its current office space lease. The Company entered into a sublease 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 with the first month rent due beginning on January 1, 2020. The Company will be required to pay a security deposit of $9,600. On the effective date of the new lease, the Company will apply the new lease Topic 842 and does not expect the lease to have a significant impact on its consolidated balance sheet or statements of operations or cash flows. The Company also leased space for its former corporate headquarters in Danville, California that was scheduled to expire July 31, 2019, but was terminated in January 2019 without penalty or other amounts due. In February 2019, the Company entered into a six-month lease agreement for 187 square feet of new office space located in Danville, California for the Company’s General Counsel. The monthly rent is $1,200, and the Company paid a $1,200 security deposit. In August 2019, the lease was extended for an additional six months. The total current obligation for the remainder of this lease through January 2020 is $7,200. For the six months ended June 30, 2019 and 2018, the Company incurred lease expense of $76,000 and $28,800, respectively, for the combined leases. 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 significant net acres expire during the remainder of 2019, and 31 net acres expire thereafter (net to our direct ownership interest only). In the Permian Basin Asset, no net acres are due to expire in 2019 and 14,500 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 these or any other pending 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. |
11. SHAREHOLDERS' EQUITY
11. SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Shareholders' equity: | |
SHAREHOLDERS' EQUITY | Common Stock On February 15, 2019 and March 1, 2019, $22.3 million and $32.8 million of outstanding note payables and accrued interest were converted into 14,098,778 and 15,381,605 shares of the Company’s common stock, respectively (see Note 8 above for further discussion of the note conversions). On May 21, 2019, SK Energy, which is owned and controlled by Dr. Kukes, the Company’s Chief Executive Officer and a member of the Board of Directors, purchased 6,818,181 shares of restricted common stock from the Company at a price of $2.20 per share, or $15 million in aggregate, pursuant to a subscription agreement. As a result of the purchase, SK Energy, which beneficially owned 78.2% of our outstanding common stock prior to the subscription agreement, beneficially owned 81.0% of our outstanding common stock after the purchase. In addition, on May 16, 2019, the Company sold an aggregate of 1,500,000 shares of its restricted common stock to two third party purchasers at a price a price of $2.00 per share, or $3 million in aggregate, pursuant to subscription agreements. Warrants During the six months ended June 30, 2019, no warrants were granted, and warrants to purchase 100,000 shares of common stock expired. Additionally, on April 1, 2019, the Company issued 60,056 total shares of common stock upon the cashless exercise of two warrants to purchase an aggregate of 596,280 shares of common stock with an exercise price of $2.50 per share, based on a current market value of $2.78 per share, under the terms of each warrant. The intrinsic value of outstanding, as well as exercisable, warrants, at June 30, 2019 was $265,000. Warrant activity during the six months ended June 30, 2019 was: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at December 31, 2018 1,216,686 $ 7.44 1.4 Exercised (596,280 ) $ 2.50 Expired/Cancelled (100,000 ) $ 25.00 Outstanding at June 30, 2019 520,406 $ 7.20 0.9 Exercisable at June 30, 2019 520,406 $ 7.20 0.9 |
12. STOCK OPTIONS AND WARRANTS
12. STOCK OPTIONS AND WARRANTS | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
STOCK OPTIONS AND WARRANTS | 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 In April 2019, restricted stock awards were granted to three new employees and one consultant for an aggregate of 160,000 shares of the Company’s common stock, under the Company’s Amended and Restated 2012 Equity Incentive Plan. The grant for a total of 50,000 of the restricted stock awards vests as follows: 100% on the one-year anniversary of the grant date, subject to the recipient’s continued service with the Company. These shares have a total fair value of $135,000 based on the market price on the issuance date. The grants for 110,000 shares of restricted stock vest as follows: 50% on the one-year anniversary of the grant date and 50% on the second-year anniversary of the grant date, subject to the recipient’s continued service with the Company. These shares have a total fair value of $253,000 based on the market price on the issuance date. The awarded shares above are subject to trading restrictions, and forfeiture, subject to the vesting terms described above. When such securities are vested in accordance with their terms, the trading restrictions are lifted. Stock-based compensation expense recorded related to the vesting of restricted stock for the three and six months ended June 30, 2019 and 2018 was $285,000, compared to $148,000 and $471,000, compared to $314,000, respectively. The remaining unamortized stock-based compensation expense at June 30, 2019 related to restricted stock was $883,000. Options During the six months ended June 30, 2019, no options were granted, exercised or expired, and a total of 890,232 options to purchase common stock are outstanding, with exercise prices ranging from $0.3088 to $302.40 per share, and a weighted-average exercise price of $3.26 per share. Of the total amount of options to purchase common stock outstanding, 620,232 are exercisable as of June 30, 2019, with a weighted-average exercise price of $3.91 per share and a weighted average life of 2.1 years. During the three and six months ended June 30, 2019 and 2018, the Company recognized stock option expense of $113,000 compared to $18,000 and $226,000 compared to $35,000, respectively. The remaining amount of unamortized stock options expense at June 30, 3019, was $93,000. The intrinsic value of outstanding and exercisable options at June 30, 2019 was $290,000. |
13. EARNINGS (LOSS) PER COMMON
13. EARNINGS (LOSS) PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | Earnings (loss) per common share-basic is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net (loss) income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net (loss) income per common share-diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ (2,460 ) $ 66,290 $ (5,455 ) $ 62,056 Denominator: Weighted average common shares – basic 49,198,625 7,357,234 38,572,537 7,318,211 Dilutive effect of common stock equivalents: Options and Warrants - 6,988 - 1,973 Preferred Stock - 6,662,500 - 6,662,500 Denominator: Weighted average common shares – diluted 49,198,625 14,026,722 38,572,537 13,982,684 Earnings (loss) per share – basic $ (0.05 ) $ 9.01 $ (0.14 ) $ 8.48 Earnings (loss) per share – diluted $ (0.05 ) $ 4.73 $ (0.14 ) $ 4.44 For the three and six months periods ended June 30, 2019 and 2018, the following share equivalents related to preferred stock, and options and warrants to purchase shares of common stock were excluded from the computation of diluted net income (loss) per share as the inclusion of such shares would be anti-dilutive. Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Common Shares Issuable for: Options and Warrants 1,410,638 3,259,939 1,410,638 3,264,954 Series A Preferred Stock - 662,500 - 662,500 Total 1,410,638 3,922,439 1,410,638 3,927,454 |
14. RELATED PARTY TRANSACTIONS
14. RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The following table reflects the related party amounts for SK Energy, Directors and Officers included in the balance sheets of the period indicated (in thousands): June 30, December 31 2019 2018 Long-term accrued expenses $ - $ 943 Long-term notes payable – subordinated - 30,200 Long-term notes payable, net of discount of $-0- and $161, respectively - 7,694 Total related party liabilities $ - $ 38,837 See Note 8 above for a further discussion of the debt conversions and subsequent retirement of all related party debt. Additionally, on May 21, 2019, SK Energy, which is owned and controlled by Dr. Kukes, our Chief Executive Officer and a member of the Board of Directors, purchased 6,818,181 shares of restricted common stock from the Company at a price of $2.20 per share, or $15 million in aggregate (see Note 11 above for a further discussion of the issuance of the restricted common stock). |
14. INCOME TAXES
14. INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company has estimated that its effective tax rate for U.S. purposes will be zero for the 2019 and 2018 fiscal years as a result of net losses and a full valuation allowance against the net deferred tax assets. Consequently, the Company has recorded no provision or benefit for income taxes for the six months ended June 30, 2019 and 2018. |
15. SUBSEQUENT EVENTS
15. SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Effective July 18, 2019, 50,000 shares of restricted stock were awarded to an advisor under the Company’s Amended and Restated 2012 Equity Incentive Plan. The restricted stock vests as follows: 100% on the six-month anniversary of the grant date, subject to the recipient’s continued service with the Company. These shares have a total fair value of $82,500, based on the market price on the issuance date. |
3. SUMMARY OF SIGNIFICANT ACC_2
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncements | Revenue Recognition. Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” Revenue Recognition (Topic 605) Leases. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases (Topic 842)” Leases (Topic 842): Targeted Improvements” In addition, the Company elected practical expedients provided by the new standard whereby, the Company has elected to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs and to retain off-balance sheet treatment of short-term leases (i.e., 12 months or less and does not contain a purchase option that the Company is reasonably certain to exercise). As a result of the short-term expedient election, the Company has no leases that require the recording of a net lease asset and lease liability on the Company’s consolidated balance sheet or have a material impact on consolidated earnings or cash flows as of June 30, 2019. Moving forward, the Company will evaluate any new lease commitments for application of Topic 842. Compensation-Stock Compensation. In June 2018, the FASB issued ASU 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”. |
Recently Issued Accounting Pronouncements | The Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. |
Subsequent Events | The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
4. REVENUE FROM CONTRACTS WIT_2
4. REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue by significant product type | Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Oil sales $ 4,037 $ 5,490 Natural gas sales 26 135 Natural gas liquids sales 7 13 Total revenue from customers $ 4,070 $ 5,638 |
5. RESTRICTED CASH (Tables)
5. RESTRICTED CASH (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Summary of cash and restricted cash | As of June 30, 2019 2018 Cash $ 13,370 $ 917 Restricted cash included in other assets 3,297 - Total cash and restricted cash as shown in the consolidated statements of cash flows $ 16,667 $ 917 |
6. OIL AND GAS PROPERTIES (Tabl
6. OIL AND GAS PROPERTIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Oil and Gas Property [Abstract] | |
Oil and gas interests | Balance at December 31, Balance at June 30, 2018 Additions Disposals Transfers 2019 Oil and gas properties, subject to amortization $ 70,803 $ 19,016 $ (255 ) $ 6,596 $ 96,160 Oil and gas properties, not subject to amortization 8,516 270 - (6,596 ) 2,190 Asset retirement costs 2,188 (96 ) - - 2,092 Accumulated depreciation and depletion (21,045 ) (4,856 ) - - (24,901 ) Total oil and gas assets $ 60,462 $ 14,334 $ (255 ) $ - $ 74,541 |
8. NOTES PAYABLE (Tables)
8. NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Notes Payable [Abstract] | |
Debt restructuring | June 30, December 31, 2019 2018 Notes Payable - Subordinated $ - $ 400 Notes Payable - Subordinated Related Party - 30,200 Notes Payable - Related Party - 7,855 - 38,455 Unamortized Debt Discount - (161 ) Total Notes Payable $ - $ 38,294 |
9. ASSET RETIREMENT OBLIGATIO_2
9. ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
Asset retirement obligation | Six Months Ended June 30, 2019 Balance at the beginning of the period (1) $ 2,571 Accretion expense 170 Obligations incurred for acquisition 33 Changes in estimates (129 ) Balance at end of period (2) $ 2,645 |
11. SHAREHOLDERS' EQUITY (Table
11. SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Shareholders' equity: | |
Schedule of stock option and warrant activity | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at December 31, 2018 1,216,686 $ 7.44 1.4 Exercised (596,280 ) $ 2.50 Expired/Cancelled (100,000 ) $ 25.00 Outstanding at June 30, 2019 520,406 $ 7.20 0.9 Exercisable at June 30, 2019 520,406 $ 7.20 0.9 |
12. STOCK OPTIONS AND WARRANTS
12. STOCK OPTIONS AND WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Schedule of stock option and warrant activity | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at December 31, 2018 1,216,686 $ 7.44 1.4 Exercised (596,280 ) $ 2.50 Expired/Cancelled (100,000 ) $ 25.00 Outstanding at June 30, 2019 520,406 $ 7.20 0.9 Exercisable at June 30, 2019 520,406 $ 7.20 0.9 |
13. EARNINGS (LOSS) PER COMMO_2
13. EARNINGS (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ (2,460 ) $ 66,290 $ (5,455 ) $ 62,056 Denominator: Weighted average common shares – basic 49,198,625 7,357,234 38,572,537 7,318,211 Dilutive effect of common stock equivalents: Options and Warrants - 6,988 - 1,973 Preferred Stock - 6,662,500 - 6,662,500 Denominator: Weighted average common shares – diluted 49,198,625 14,026,722 38,572,537 13,982,684 Earnings (loss) per share – basic $ (0.05 ) $ 9.01 $ (0.14 ) $ 8.48 Earnings (loss) per share – diluted $ (0.05 ) $ 4.73 $ (0.14 ) $ 4.44 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Common Shares Issuable for: Options and Warrants 1,410,638 3,259,939 1,410,638 3,264,954 Series A Preferred Stock - 662,500 - 662,500 Total 1,410,638 3,922,439 1,410,638 3,927,454 |
14. RELATED PARTY TRANSACTIONS
14. RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | June 30, December 31 2019 2018 Long-term accrued expenses $ - $ 943 Long-term notes payable – subordinated - 30,200 Long-term notes payable, net of discount of $-0- and $161, respectively - 7,694 Total related party liabilities $ - $ 38,837 |
4. REVENUE FROM CONTRACTS WIT_3
4. REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Total revenue from customers | $ 4,070 | $ 5,638 |
Oil Sales | ||
Total revenue from customers | 4,037 | 5,490 |
Natural Gas Sales | ||
Total revenue from customers | 26 | 135 |
Natural Gas Liquids Sales | ||
Total revenue from customers | $ 7 | $ 13 |
5. RESTRICTED CASH (Details)
5. RESTRICTED CASH (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||||
Cash | $ 13,370 | $ 917 | ||
Restricted cash | 0 | 2,316 | ||
Restricted cash included in other assets | 3,297 | 0 | ||
Cash, cash equivalents and restricted cash | $ 16,667 | $ 5,779 | $ 546 | $ 917 |
6. OIL AND GAS PROPERTIES (Deta
6. OIL AND GAS PROPERTIES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Oil and gas properties, subject to amortization | $ 96,160 | $ 70,803 |
Oil and gas properties, not subject to amortization | 2,190 | 8,516 |
Asset retirement costs | 2,092 | 2,188 |
Accumulated depreciation, depletion and impairment | (24,901) | (21,045) |
Total oil and gas assets | 74,541 | $ 60,462 |
Additions [Member] | ||
Oil and gas properties, subject to amortization | 19,016 | |
Oil and gas properties, not subject to amortization | 270 | |
Asset retirement costs | (96) | |
Accumulated depreciation, depletion and impairment | (4,856) | |
Total oil and gas assets | 14,334 | |
Disposals [Member] | ||
Oil and gas properties, subject to amortization | (255) | |
Oil and gas properties, not subject to amortization | 0 | |
Asset retirement costs | 0 | |
Accumulated depreciation, depletion and impairment | 0 | |
Total oil and gas assets | (255) | |
Transfers [Member] | ||
Oil and gas properties, subject to amortization | 6,596 | |
Oil and gas properties, not subject to amortization | (6,596) | |
Asset retirement costs | 0 | |
Accumulated depreciation, depletion and impairment | 0 | |
Total oil and gas assets | $ 0 |
6. OIL AND GAS PROPERTIES (De_2
6. OIL AND GAS PROPERTIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Oil and Gas Property [Abstract] | ||||
Depletion | $ 2,715 | $ 688 | $ 4,855 | $ 1,251 |
8. NOTES PAYABLE (Details)
8. NOTES PAYABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Notes Payable | $ 0 | $ 38,455 |
Unamortized Debt Discount | 0 | (161) |
Notes Payable | 0 | 38,294 |
Note 1 | ||
Notes Payable | 0 | 400 |
Note 2 | ||
Notes Payable | 0 | 30,200 |
Note 3 | ||
Notes Payable | $ 0 | $ 7,855 |
9. ASSET RETIREMENT OBLIGATIO_3
9. ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Asset Retirement Obligation [Abstract] | ||
Balance at the beginning of the period | $ 2,571 | |
Accretion expense | 170 | |
Obligations incurred for acquisition | 33 | |
Changes in estimates | (129) | $ (7) |
Balance at end of period | $ 2,645 |
11. SHAREHOLDERS' EQUITY (Detai
11. SHAREHOLDERS' EQUITY (Details) | Dec. 31, 2018shares |
Total [Member] | |
Common stock shares | 15,808,445 |
11. SHAREHOLDERS' EQUITY (Det_2
11. SHAREHOLDERS' EQUITY (Details Narrative) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Shareholders' equity: | ||
Preferred stock shares authorized | 100,000,000 | |
Preferred stock shares par value | $ 0.001 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares outstanding | 53,827,065 | 15,808,445 |
12. STOCK OPTIONS AND WARRANT_2
12. STOCK OPTIONS AND WARRANTS (Details) - Warrant | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of Shares | |
Number of Options Outstanding, Beginning | shares | 1,216,686 |
Number of Options Exercised | shares | (596,280) |
Number of Options Forfeited and cancelled | shares | (100,000) |
Number of Options Outstanding, Ending | shares | 520,406 |
Number of Options Exercisable | shares | 520,406 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 7.44 |
Weighted Average Exercise Price Exercised | $ / shares | 2.50 |
Weighted Average Exercise Price Forfeited and cancelled | $ / shares | 25 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 7.20 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 7.20 |
Weighted Average Remaining Contractual Life (in years) | |
Weighted Average Remaining Contractual Life (in years) Outstanding, Beginning | 1 year 4 months 24 days |
Weighted Average Remaining Contractual Life (in years) Outstanding, Ending | 10 months 24 days |
Weighted Average Remaining Contractual Life (in years) Exercisable | 10 months 24 days |
12. STOCK OPTIONS AND WARRANT_3
12. STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Option | ||
Intrinsic value of options outstanding | $ 290 | $ 36 |
Warrant | ||
Intrinsic value of options outstanding | $ 265 | $ 65 |
13. EARNINGS (LOSS) PER COMMO_3
13. EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||||
Net income (loss) | $ (2,460) | $ (2,995) | $ 66,290 | $ (4,234) | $ (5,455) | $ 62,056 |
Denominator: | ||||||
Weighted average common shares – basic | 49,198,625 | 7,357,234 | 38,572,537 | 7,318,211 | ||
Dilutive effect of common stock equivalents: Options and Warrants | 0 | 6,988 | 0 | 1,973 | ||
Dilutive effect of common stock equivalents: Preferred Stock | 0 | 6,662,500 | 0 | 6,662,500 | ||
Weighted average common shares – diluted | 49,198,625 | 14,026,722 | 38,572,537 | 13,982,684 | ||
Earnings (loss) per share – basic | $ (0.05) | $ 9.01 | $ (0.14) | $ 8.48 | ||
Earnings (loss) per share – diluted | $ (0.05) | $ 4.73 | $ (0.14) | $ 4.44 |
13. EARNINGS (LOSS) PER COMMO_4
13. EARNINGS (LOSS) PER COMMON SHARE (Details 1) - shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Total | 1,410,638 | 3,922,439 | 1,410,638 | 3,927,454 | ||
Options and Warrants | ||||||
Total | 1,410,638 | 3,259,939 | 1,410,638 | 3,264,954 | ||
Series A Preferred Stock | ||||||
Total | 0 | 662,500 | 0 | 662,500 |
14. RELATED PARTY TRANSACTION_2
14. RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Long-term accrued expenses | $ 0 | $ 943 |
Long-term notes payable - subordinated | 0 | 30,200 |
Long-term notes payable, net of discount of $-0- and $161, respectively | 0 | 7,694 |
Total related party liabilities | $ 0 | $ 38,837 |