PEDEVCO (PED) 10-K 23 Mar 21 2020 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Mar. 19, 2021	Jun. 30, 2020
Cover [Abstract]
Entity Registrant Name	PEDEVCO CORP
Entity Central Index Key	0001141197
Document Type	10-K
Document Period End Date	Dec. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
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 Interactive Data Current	Yes
Entity Incorporation, State or Country Code	TX
Entity File Number	001-35922
Entity Common Stock, Shares Outstanding		79,441,603
Entity Public Float			$ 7,001,681
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash	$ 8,027	$ 22,415
Accounts receivable - oil and gas	660	4,602
Prepaid expenses and other current assets	66	73
Total current assets	8,753	27,090
Oil and gas properties:
Oil and gas properties, subject to amortization, net	66,994	76,952
Oil and gas properties, not subject to amortization, net	4	14,896
Total oil and gas properties, net	66,998	91,848
Operating lease - right-of-use asset	270	360
Other assets	3,543	3,598
Total assets	79,564	122,896
Current liabilities:
Accounts payable	212	12,099
Accrued expenses	303	1,972
Revenue payable	836	827
PPP loan - current	288	0
Operating lease liabilities - current	105	97
Asset retirement obligations - current	234	225
Total current liabilities	1,978	15,220
Long-term liabilities:
PPP loan	82	0
Operating lease liabilities, net of current portion	195	300
Asset retirement obligations, net of current portion	1,673	1,874
Total liabilities	3,928	15,220
Commitments and contingencies
Shareholders' equity:
Common stock, $0.001 par value, 200,000,000 shares authorized; 72,463,340 and 71,061,328 shares issued and outstanding, respectively	72	71
Additional paid-in-capital	203,850	201,027
Accumulated deficit	(128,286)	(95,596)
Total shareholders' equity	75,636	105,502
Total liabilities and shareholders' equity	$ 79,564	$ 122,896

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Stockholders' equity:
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	72,463,340	71,061,328
Common stock, shares outstanding	72,463,340	71,061,328

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenue:
Oil and gas sales	$ 8,059	$ 12,972
Operating expenses:
Lease operating costs	4,435	6,817
Exploration expense	31	110
Selling, general and administrative expense	6,741	5,785
Depreciation, depletion, amortization and accretion	11,343	11,031
Loss on settlement of asset retirement obligations	0	496
Impairment of oil and gas properties	19,331	0
Total operating expenses	41,881	24,239
Gain on sale of oil and gas properties	0	1,040
Operating loss	(33,822)	(10,227)
Other income (expense):
Interest expense	(2)	(824)
Interest income	40	55
Other income (expense)	1,094	(106)
Total other income (expense)	1,132	(875)
Net loss	$ (32,690)	$ (11,102)
Loss per common share: Basic	$ (0.45)	$ (0.22)
Loss per common share: Diluted	$ (0.45)	$ (0.22)
Weighted average number of common shares outstanding: Basic	72,209,553	51,214,986
Weighted average number of common shares outstanding: Diluted	72,209,553	51,214,986

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash Flows From Operating Activities:
Net loss	$ (32,690)	$ (11,102)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization	11,343	11,031
Impairment of oil and gas properties	19,331	0
Share-based compensation expense	2,824	1,557
Loss on disposal of fixed asset	24	0
Gain on sale of oil and gas properties	0	(1,040)
Amortization of debt discount	0	161
Amortization of right-of-use asset	90	37
Changes in operating assets and liabilities:
Accounts receivable - oil and gas	3,942	(3,760)
Prepaid expenses and other current assets	7	131
Accounts payable	(3,199)	5,414
Accrued expenses	(1,669)	(1,413)
Accrued expenses - related parties	0	1,175
Revenue payable	9	(10)
Net cash provided by operating activities	12	1,669
Cash Flows From Investing Activities:
Cash paid for the acquisition of oil and gas properties	0	(1,120)
Cash paid for drilling and completion costs	(14,770)	(39,700)
Cash paid for other property and equipment	0	(81)
Proceeds from the sale of oil and gas property	0	1,175
Cash paid for security deposit	0	(10)
Net cash used in investing activities	(14,770)	(39,736)
Cash Flows From Financing Activities:
Proceeds from PPP loans	740	0
Repayment of PPP loan	(370)	0
Proceeds from notes payable - related parties	0	15,000
Proceeds from issuance of common shares	0	43,000
Net cash provided by financing activities	370	58,000
Net (decrease) increase in cash and restricted cash	(14,388)	19,933
Cash and restricted cash at beginning of period	25,712	5,779
Cash and restricted cash at end of period	11,324	25,712
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	8,827	2,056
Acquisition of asset retirement obligations	0	54
Changes in estimates of asset retirement obligations	439	695
Common stock issued for debt conversion	0	55,075
Issuance of restricted common stock	$ 1	$ 1

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock	Additional Paid in Capital	Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2018	15,808,445
Beginning balance, amount at Dec. 31, 2018	$ 16	$ 101,450	$ (84,494)	$ 16,972
Issuance of common stock for debt conversions, shares	29,480,383
Issuance of common stock for debt conversions, amount	$ 29	55,046		55,075
Issuance of restricted common stock, shares	430,000
Issuance of restricted common stock, amount	$ 1	(1)		0
Issuance of common stock to non-affiliates, shares	10,150,000
Issuance of common stock to non-affiliates, amount	$ 10	14,990		15,000
Issuance of common stock to affiliate, shares	15,122,662
Issuance of common stock to affiliate, amount	$ 15	27,985		28,000
Issuance of common stock for exercise of warrants, shares	60,056
Issuance of common stock for exercise of warrants, amount				0
Cashless exercise of stock options, shares	9,782
Shared-based compensation		1,557		1,557
Net loss			(11,102)	(11,102)
Ending balance, shares at Dec. 31, 2019	71,061,328
Ending balance, amount at Dec. 31, 2019	$ 71	201,027	(95,596)	105,502
Issuance of restricted common stock, shares	1,359,000
Issuance of restricted common stock, amount	$ 1	(1)		0
Rescinded restricted common stock	(129,000)
Issuance of common stock to non-affiliates, shares	70,000
Issuance of common stock to non-affiliates, amount	$ 0			0
Issuance of common stock to affiliate, shares	70,000
Issuance of common stock to affiliate, amount	$ 0			0
Cashless exercise of stock options, shares	32,012
Shared-based compensation		2,824		2,824
Net loss			(32,690)	(32,690)
Ending balance, shares at Dec. 31, 2020	72,463,340
Ending balance, amount at Dec. 31, 2020	$ 72	$ 203,850	$ (128,286)	$ 75,636

1. BASIS OF PRESENTATION

1. BASIS OF PRESENTATION	12 Months Ended
	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	The accompanying consolidated financial statements of PEDEVCO Corp. (“PEDEVCO” or the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). 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.

2. DESCRIPTION OF BUSINESS

2. DESCRIPTION OF BUSINESS	12 Months Ended
	Dec. 31, 2020
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 Chaves and Roosevelt Counties, New Mexico, through its wholly-owned operating subsidiary, Pacific Energy Development Corp. (“PEDCO”), which asset the Company refers to as its “Permian Basin Asset,” and it holds its D-J Basin acres located in Weld and Morgan Counties, Colorado, through its wholly-owned operating subsidiary, Red Hawk Petroleum, LLC (“Red Hawk”), which asset the Company refers to as its “D-J Basin Asset.” The Company believes that horizontal development and exploitation of conventional assets in the Permian Basin and development of the Wattenberg and Wattenberg Extension in the D-J Basin represent among the most economic oil and natural gas plays in the United States (“U.S.”). Moving forward, the Company plans to optimize its existing assets and opportunistically seek additional acreage proximate to its currently held core acreage, as well as other attractive onshore U.S. oil and gas assets that fit the Company’s acquisition criteria, that Company management believes can be developed using its technical and operating expertise and be accretive to shareholder value.

3. SUMMARY OF SIGNIFICANT ACCOU

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Basis of Presentation and Principles of Consolidation. Use of Estimates in Financial Statement Preparation. Cash and Cash Equivalents. Concentrations of Credit Risk. Sales to two customers comprised 63% and 11%, respectively, of the Company’s total oil and gas revenues for the year ended December 31, 2020. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Company’s production, there are a substantial number of alternative buyers for its production at comparable prices. Accounts Receivable. Bad Debt Expense. Equipment. Oil and Gas Properties, Successful Efforts Method. Exploratory wells in areas not requiring major capital expenditures are evaluated for economic viability within one year of completion of drilling. The related well costs are expensed as dry holes if it is determined that such economic viability is not attained. Otherwise, the related well costs are reclassified to oil and gas properties and subject to impairment review. For exploratory wells that are found to have economically viable reserves in areas where major capital expenditure will be required before production can commence, the related well costs remain capitalized only if additional drilling is under way or firmly planned. Otherwise, the related well costs are expensed as dry holes. Exploration and evaluation expenditures incurred subsequent to the acquisition of an exploration asset in a business combination are accounted for in accordance with the policy outlined above. Depreciation, depletion and amortization of capitalized oil and gas properties is calculated on a field-by-field basis using the unit of production method. Lease acquisition costs are amortized over the total estimated proved developed and undeveloped reserves and all other capitalized costs are amortized over proved developed reserves. Costs specific to developmental wells for which drilling is in progress or uncompleted are capitalized as wells in progress and not subject to amortization until completion and production commences, at which time amortization on the basis of production will begin. Impairment of Long-Lived Assets. Asset Retirement Obligations. Revenue Recognition. Contracts with customers have varying terms, including month-to-month contracts, and contracts with a finite term. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs. Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. Income Taxes. Uncertain Tax Positions. The Company is subject to ongoing tax exposures, examinations and assessments in various jurisdictions. Accordingly, the Company may incur additional tax expense based upon the outcomes of such matters. In addition, when applicable, the Company will adjust tax expense to reflect the Company’s ongoing assessments of such matters, which require judgment and can materially increase or decrease its effective rate as well as impact operating results. Stock-Based Compensation. The Company estimates volatility by considering the historical stock volatility. The Company has opted to use the simplified method for estimating expected term, which is generally equal to the midpoint between the vesting period and the contractual term. Earnings (Loss) per Common Share. Recently Adopted Accounting Pronouncements.

4. CASH

4. CASH	12 Months Ended
	Dec. 31, 2020
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]
CASH	The following table provides a reconciliation of cash and restricted cash reported within the balance sheets on December 31, 2020 and 2019, which sum to the total of such amounts shown in the accompanying audited consolidated statements of cash flows (in thousands): 2020 2019 Cash $ 8,027 $ 22,415 Restricted cash included in other assets 3,297 3,297 Total cash and restricted cash as shown in the consolidated statements of cash flows $ 11,324 $ 25,712

5. REVENUE FROM CONTRACTS WITH

5. REVENUE FROM CONTRACTS WITH CUSTOMERS	12 Months Ended
	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
REVENUE FROM CONTRACTS WITH CUSTOMERS	Disaggregation of Revenue from Contracts with Customers. 2020 2019 Oil sales $ 7,551 $ 12,518 Natural gas sales 330 372 Natural gas liquids sales 178 82 Total revenue from customers $ 8,059 $ 12,972 There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of December 31, 2020 or 2019, respectively.

6. OIL AND GAS PROPERTIES

6. OIL AND GAS PROPERTIES	12 Months Ended
	Dec. 31, 2020
Extractive Industries [Abstract]
OIL AND GAS PROPERTIES	The following tables summarize the Company’s oil and gas activities by classification for the years ended December 31, 2020 and 2019, respectively (in thousands): Balance at December 31, Balance at December 31, 2019 Additions Disposals Transfers 2020 Oil and gas properties, subject to amortization $ 126,114 $ 5,542 $ - $ 15,294 $ 146,950 Oil and gas properties, not subject to amortization 14,896 402 - (15,294 ) 4 Asset retirement costs 1,547 (439 ) - - 1,108 Accumulated depreciation, depletion and impairment (50,709 ) (30,355 ) - - (81,064 ) Total oil and gas assets $ 91,848 $ (24,850 ) $ - $ - $ 66,998 Balance at December 31, Balance at December 31, 2018 Additions Disposals Transfers 2019 Oil and gas properties, subject to amortization $ 70,803 $ 29,900 $ (135 ) $ 6,596 $ 107,164 Oil and gas properties, not subject to amortization 8,516 12,976 - (6,596 ) 14,896 Asset retirement costs 2,188 (641 ) - - 1,547 Accumulated depreciation and depletion (21,045 ) (10,714 ) - - (31,759 ) Total oil and gas assets $ 60,462 $ 31,521 $ (135 ) $ - $ 91,848 For the year ended December 31, 2020, the Company incurred $5,943,000 in net capital costs primarily related to the drilling and completion of four new horizontal wells and a saltwater disposal well (“SWD”) in its Permian Basin Asset. The SWD was drilled to increase the produced water injection capacity for the Company’s Chaveroo field and, in turn, increase production of the corresponding wells therein. The drilling and completion of the SWD had been postponed due to the downturn in the economic conditions in the oil and gas industry during the first quarter of 2020, but with the subsequent partial uptick in oil prices, the Company completed the SWD in September 2020. Also, the Company transferred $15,294,000 in capital costs from the four completed wells and the SWD noted above, for which production had not commenced, from proved developed non-producing properties, to proved properties, when production began during the current year. The majority of the capital costs for three of the four wells were incurred in the prior year. For the year ended December 31, 2019, the Company incurred $26,362,000 in drilling and completion costs relating to the drilling of nine wells and corresponding facility costs in its Permian Basin Asset, in addition to amounts incurred for the participation (non-operated working interest) in the drilling of 11 total wells in the DJ Basin ($2,500,000 noted below), and the acquisition of oil and gas assets from Manzano LLC and Manzano Energy Partners II, LLC (“Manzano”) ($764,000 noted below) and from a private operator ($350,000 noted below). Also, the Company transferred $6,596,000 in capital costs from four wells which were not completed at the beginning of the period from unproved properties to proved properties when production began in March and April of 2019. At December 31, 2019, drilling and completion costs of $12,976,000 had been incurred for four of the nine wells in its Permian Asset; however, as production had not yet commenced, this amount was included in the amount not subject to amortization at December 31, 2019. The depletion recorded for production on proved properties for the year ended December 31, 2020 and 2019, amounted to $11,023,000 and $10,714,000, respectively. The Company recorded impairment of properties subject to amortization for the years ended December 31, 2020 and 2019, of $19,331,000 and $-0-, respectively. The impairment in 2020 was due to a reduction in the reserve value with our D-J Basin assets relative to the carrying amount of the D-J Basin assets. On February 1, 2019, for consideration of $743,000, plus $21,000 in acquisition costs, the Company completed an asset purchase from Manzano, 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. 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). In December 2019, the purchaser assigned Red Hawk 121 net acres of leaseholds with a value of $121,000, which the Company recognized as an additional gain on the Statement of Operations. On 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. During 2019, the Company participated in the drilling and completion of 11 horizontal wells in the D-J Basin by third-party outside operators and incurred $2.5 million in net participation costs.

7. PPP LOAN

7. PPP LOAN	12 Months Ended
	Dec. 31, 2020
Debt Disclosure [Abstract]
NOTES PAYABLE	On April 22, 2020, the Company received loan proceeds of $370,000 (the “Original PPP Loan”) under the U. S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) n April 23, 2020, the SBA issued guidance that cast doubt on the ability of public companies to qualify for a PPP loan. As a result, out of an abundance of caution, on May 1, 2020, the Company repaid the full amount of the Original PPP Loan to Upon the issuance of further guidance from the SBA, which clarified the ability of public companies to receive PPP loans, on June 2, 2020, the Company again received loan proceeds of $370,000 (the “New PPP Loan”) under the SBA PPP. The New PPP Loan is evidenced by a promissory note, dated as of May 28, 2020 (the “Note”), between the Company and Texas Capital Bank, N.A. The Note has a two-year term, bears interest at the rate of 1.00% per annum, and may be prepaid at any time without payment of any premium. No payments of principal or interest are due during the six-month period beginning on the date of the Note. The principal and accrued interest under the Note are forgivable after eight weeks if the Company uses the New PPP Loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities, and otherwise complies with PPP requirements, with the full principal and accrued interest expected to be forgiven in full by the Company. As of December 31, 2020, the Company has accrued $2,000 in interest on the Note. As of December 31, 2020, the full amount of the loan was outstanding, with $288,000 included in current liabilities on the balance sheet. As of the issuance date of these financial statements, the Company believes that it has used the loan proceeds only for eligible expenses, has submitted the necessary loan forgiveness application to Texas Capital Bank, N.A., and the SBA has notified the Company that the SBA has selected its loan for review. The Company is awaiting completion of the review and confirmation from the SBA on its loan forgiveness determination.

8. ASSET RETIREMENT OBLIGATIONS

8. ASSET RETIREMENT OBLIGATIONS	12 Months Ended
	Dec. 31, 2020
Asset Retirement Obligation [Abstract]
ASSET RETIREMENT OBLIGATIONS	Activity related to the Company’s asset retirement obligations is as follows for the year ended December 31, 2020 (in thousands): 2020 Balance at the beginning of the period (1) $ 2,099 Accretion expense 289 Liabilities settled (42 ) Changes in estimates (439 ) Balance at end of period (2) $ 1,907 (1) Includes $225,000 of current asset retirement obligations at December 31, 2019. (2) Includes $234,000 of current asset retirement obligations at December 31, 2020.

9. COMMITMENTS AND CONTINGENCIE

9. COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Lease Agreements Currently, the Company has one operating lease for office space that requires Accounting Standards Codification (ASC) Topic 842 treatment, discussed below. The Company’s leases typically do not provide an implicit rate. Accordingly, the Company is required to use its incremental borrowing rate in determining the present value of lease payments based on the information available at the commencement date. The Company’s incremental borrowing rate would reflect the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. However, the Company currently maintains no debt, and in order to apply an appropriate discount rate, the Company used an average discount rate of eight publicly traded peer group companies similar to it based on size, geographic location, asset types, and/or operating characteristics. The Company has a sublease for its corporate offices in Houston, Texas on approximately 5,200 square feet of office space that expires on August 31, 2023, and has a base monthly rent of approximately $10,000. The Company also had a lease for 187 square feet of office space located in Danville, California for the Company’s Executive Vice President and General Counsel. The monthly rent was $1,200, discounted to $960 from April 2020 through its expiration on August 28, 2020. The Company did not renew this lease upon expiration in an effort to further reduce Company expenses. For the year ended December 31, 2020, the Company incurred lease expense of $103,000, for the combined leases. Supplemental cash flow information related to the Company’s operating lease is included in the table below (in thousands): Year Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 115 Supplemental balance sheet information related to operating leases is included in the table below (in thousands): December 31, 2020 Operating lease – right-of-use asset $ 270 Operating lease liabilities - current $ 105 Operating lease liabilities - long-term 195 Total lease liability $ 300 The weighted-average remaining lease term for the Company’s operating lease is 2.7 years as of December 31, 2020, with a weighted-average discount rate of 5.35%. Lease liability with enforceable contract terms that have greater than one-year terms are as follows (in thousands): 2021 $ 118 2022 121 2023 82 Thereafter - Total lease payments 321 Less imputed interest (21 ) Total lease liability $ 300 Leasehold Drilling Commitments The Company’s oil and gas leasehold acreage is subject to expiration of leases if the Company does not drill and hold such acreage by production or otherwise exercises options to extend such leases, if available, in exchange for payment of additional cash consideration. In the D-J Basin Asset, no net acres expire during 2021, and no net acres expire thereafter (net to our direct ownership interest only), as all leases are held by production. In the Permian Basin Asset, 3,865, 1,395 and 80 net acres are set to expire for the years ending December 31, 2021, 2022 and 2023, respectively, without meeting drilling commitments or term assignment extensions (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 term assignment expiration, the Company may seek to extend terms of contractual assignments. 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.

10. SHAREHOLDERS' EQUITY

10. SHAREHOLDERS' EQUITY	12 Months Ended
	Dec. 31, 2020
Shareholders' equity:
SHAREHOLDERS' EQUITY	Common Stock During the year ended December 31, 2020, the Company granted an aggregate of 1,499,000 restricted stock awards to various employees, board members, affiliates, and a consultant of the Company. Additionally, 129,000 shares of restricted common stock were forfeited to the Company and canceled due to employee terminations (see Note 11 below). 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. 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 of $2.00 per share, or $3 million in aggregate, pursuant to subscription agreements, and on September 17, 2019, the Company sold an aggregate of 8,400,000 shares of its restricted common stock to an additional third-party purchaser, Viktor Tkachev, who became an affiliate of the Company, after the issuance, at a price of $1.43 per share, or $12 million in aggregate, pursuant to a subscription agreement. On May 21, 2019, SK Energy, which is owned and controlled by Mr. Simon 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, and on September 17, 2019, SK Energy purchased an additional 8,204,481 shares of restricted common stock from the Company at a price of $1.58 per share, or $13 million in aggregate, pursuant to a subscription agreement. As a result of the 2019 purchases above, SK Energy, which beneficially owned 78.2% of the Company’s outstanding common stock prior to the May 16, 2019 subscription agreement, beneficially owned 73.2% of the Company’s outstanding common stock after all of the subscriptions discussed above. Currently, SK Energy beneficially owns 65.2% of the Company’s outstanding common stock as of the date of this report. Warrants During the year ended December 31, 2020, no warrants were granted, exercised, or canceled, and as of December 31, 2020, the Company had warrants to purchase 150,329 shares of common stock outstanding, with an exercise price of $0.32 per share and a June 25, 2021 expiration date. During the year ended December 31, 2019, no warrants were granted, and warrants to purchase 470,077 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 December 31, 2020 and 2019 was $179,000 and $201,000, respectively. Warrant activity during the years ended December 31, 2020 and 2019 was: 2020 2019 Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at Beginning of Period 150,329 $ 0.32 1.5 1,216,686 $ 6.36 0.8 Expired/Cancelled - (470,077 ) 13.19 Exercised - (596,280 ) 2.50 Outstanding at End of Period 150,329 $ 0.32 0.5 150,329 $ 0.32 1.5 Exercisable at End of Period 150,329 $ 0.32 0.5 150,329 0.32 1.5

11. SHARE-BASED COMPENSATION

11. SHARE-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2020
Equity [Abstract]
SHARE-BASED COMPENSATION	2012 Incentive Plan On July 27, 2012, the shareholders of the Company approved the 2012 Equity Incentive Plan (the “2012 Incentive Plan”), which was previously approved by the Board of Directors on June 27, 2012 and authorizes the issuance of various forms of stock-based awards, including incentive or non-qualified options, restricted stock awards, performance shares and other securities as described in greater detail in the 2012 Incentive Plan, to the Company’s employees, officers, directors and consultants. The 2012 Incentive Plan was amended on June 27, 2014, October 7, 2015 and December 28, 2016, December 28, 2017, September 27, 2018 and August 28, 2019 to increase by 500,000, 300,000, 500,000, 1,500,000, 3,000,000 and 2,000,000 (to 8,000,000 currently), respectively, the number of shares of common stock reserved for issuance under the 2012 Incentive Plan. A total of 8,000,000 shares of common stock are eligible to be issued under the 2012 Incentive Plan as of December 31, 2020, of which 5,350,130 shares have been issued as restricted stock, 1,159,500 shares are subject to issuance upon exercise of issued and outstanding options, and 1,490,370 shares remain available for future issuance as of December 31, 2020. PEDCO 2012 Equity Incentive Plan As a result of the July 27, 2012 merger by and between the Company, Blast Acquisition Corp., a wholly-owned Nevada subsidiary of the Company (“MergerCo”), and Pacific Energy Development Corp., a privately-held Nevada corporation (“PEDCO”) pursuant to which MergerCo was merged with and into PEDCO, with PEDCO continuing as the surviving entity and becoming a wholly-owned subsidiary of the Company, in a transaction structured to qualify as a tax-free reorganization (the “Merger”), the Company assumed the PEDCO 2012 Equity Incentive Plan (the “PEDCO Incentive Plan”), which was adopted by PEDCO on February 9, 2012. The PEDCO Incentive Plan authorized PEDCO to issue an aggregate of 100,000 shares of common stock in the form of restricted shares, incentive stock options, non-qualified stock options, share appreciation rights, performance shares, and performance units under the PEDCO Incentive Plan. As of December 31, 2020, options to purchase an aggregate of 21,635 shares of the Company’s common stock and 55,168 shares of the Company’s restricted common stock have been granted under this plan (all of which were granted by PEDCO prior to the closing of the merger with the Company, with such grants being assumed by the Company and remaining subject to the PEDCO Incentive Plan following the consummation of the merger). The Company does not plan to grant any additional awards under the PEDCO Incentive Plan. The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award over the vesting period. Common Stock On January 13, 2020, restricted stock awards were granted to various employees and one consultant for an aggregate of 1,049,000 (including 924,000 restricted stock awards to officers of the Company) and 70,000 shares, respectively, of the Company’s common stock, under the Company’s Amended and Restated 2012 Equity Incentive Plan. The grant of the 1,049,000 shares of restricted stock vest as follows: 33.3% vest each subsequent year from the date of grant, contingent upon the recipient’s continued service with the Company. These shares have a total fair value of $1,172,000, based on the market price on the issuance date. The grant of the 70,000 shares of restricted stock was made to a Company advisor and vest as follows: 100% on the first anniversary of the grant date, subject to the recipient’s continued service with the Company. These advisor shares have a total fair value of $118,000, based on the market price on the issuance date. In February 2020 and August 2020, 55,000 and 74,000 shares of restricted common stock, respectively, were forfeited to the Company and canceled due to an employee termination. As a result, these shares are once again eligible to be awarded under the Company’s Amended and Restated 2012 Equity Incentive Plan. On August 27, 2020, restricted stock awards were granted to three board members, an affiliate and an advisor for an aggregate of 240,000, 70,000, and 70,000 shares, respectively, of the Company’s restricted common stock, under the Company’s Amended and Restated 2012 Equity Incentive Plan. The grant of the 240,000 shares of restricted common stock vest as follows: 100% of 170,000 shares and 100% of 70,000 shares vesting on July 12, 2021 and September 21, 2021, respectively, contingent upon each recipient’s continued service with the Company. These shares have a total fair value of $506,000, based on the market price on the issuance date. The grant of the remaining aggregate of 140,000 shares of restricted common stock vest as follows: 100% on the six-month anniversary of the grant date, subject to each recipient’s continued service with the Company. These affiliate and advisor shares have a total fair value of $295,000, based on the market price on the issuance date. 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. On 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 $83,000, based on the market price on the issuance date. On August 28, 2019, restricted stock awards were granted to three directors for an aggregate of 170,000 shares of the Company’s common stock, under the Company’s Amended and Restated 2012 Equity Incentive Plan. The grant for a total of 120,000 of the restricted stock awards vests as follows: 100% on July 12, 2020, subject to the recipient’s continued service with the Company. These shares have a total fair value of $187,000 based on the market price on the issuance date. The grants for 50,000 shares of restricted stock vest as follows: 100% on September 27, 2020, subject to the recipient’s continued service with the Company. These shares have a total fair value of $78,000 based on the market price on the issuance date. Additionally, 50,000 shares of restricted stock were awarded to a director for advisory services provided to the Company under the Company’s Amended and Restated 2012 Equity Incentive Plan. The restricted stock vests as follows: 100% on July 12, 2020, subject to the recipient’s continued service with the Company. These shares have a total fair value of $78,000, based on the market price on the issuance date. On October 5, 2019, 250,000 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 $350,000, based on the market price on the issuance date. On November 8, 2019, the Company entered into an Advisory Agreement and Restricted Shares Grant Agreement with Viktor Tkachev, a greater than 10% shareholder of the Company (who acquired $12 million of shares of common stock on September 17, 2019), under which Mr. Tkachev agreed to provide strategic planning and business development services, and pursuant to which 100,000 shares of restricted common stock were awarded to Mr. Tkachev under the Company’s Amended and Restated 2012 Equity Incentive Plan, 100% of which vest on the six-month anniversary of the grant date, subject to the recipient’s continued service with the Company and the terms and conditions of these agreements. These shares have a total fair value of $128,000 based on the market price on the issuance date. Also on November 8, 2019, the Company entered into an Advisory Agreement with Ivar Siem, a member of the Board of Directors, pursuant to which the 50,000 restricted shares of common stock previously awarded to Mr. Siem on August 28, 2019 under the Plan continue to vest, with 100% vesting on July 12, 2020, subject to Mr. Siem continuing to provide advisory services to the Company on such vesting date, and subject to the terms and conditions of a Restricted Shares Grant Agreement entered into by and between the Company and Mr. Siem on August 28, 2019. The Advisory Agreement contains customary confidentiality, indemnification and no conflict language; and may be terminated by the Company or the advisor with 15 days prior written notice for any reason. 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 restricted stock during the years ended December 31, 2020 and 2019 was $2,323,000 and $1,259,000, respectively. The remaining amount of unamortized stock-based compensation expense related to restricted stock at December 31, 2020 and 2019 was $1,144,000 and $999,000, respectively. Options On January 13, 2020, the Company granted options to purchase an aggregate of 733,000 shares of common stock to various Company employees at an exercise price of $1.68 per share. The options have a term of five years and fully vest in January 2023, with 33.3% of each grant vesting each subsequent year from the date of grant, contingent upon each recipient’s continued service with the Company. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $1,053,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.63% based on the applicable US Treasury bill rate, (2) expected term of 3.5 years, (3) expected volatility of 155% based on the trading history of the Company, and (4) zero expected dividends. On August 27, 2020, the Company issued 32,012 total shares of common stock upon the cashless exercise of stock options to purchase an aggregate of 37,500 shares of common stock with an exercise price of $0.3088 per share, based on a then-current market value of $2.11 per share, under the terms of the options. The options had an intrinsic value of $68,000 on the exercise date. On August 14, 2019, the Company issued 9,782 total shares of common stock upon the cashless exercise of stock options to purchase an aggregate of 12,500 shares of common stock with an exercise price of $0.31 per share, based on a then current market value of $1.42 per share, under the terms of the options. The options had an intrinsic value of $14,000 on the exercise date. During the year ended December 31, 2020 and 2019, the Company recognized stock option-based compensation expense related to options of $501,000 and $298,000, respectively. The remaining amount of unamortized stock options expense at December 31, 2020 and 2019 was $315,000 and $22,000, respectively. The intrinsic value of outstanding and exercisable options at December 31, 2020 and 2019 was $121,000 and $197,000, respectively. Option activity during the years ended December 31, 2020 and 2019 was: 2020 2019 Number of Stock Options Weighted Average Grant Price Weighted Average Remaining Contract Term (Years) Number of Stock Options Weighted Average Grant Price Weighted Average Remaining Contract Term (Years) Outstanding at Beginning of Period 753,349 $ 2.93 2.5 890,232 $ 3.26 3.3 Granted 733,000 1.68 - Expired/Canceled (214,000 ) 2.00 (124,383 ) 6.13 Exercised (37,500 ) 0.31 (12,500 ) 0.31 Outstanding at End of Period 1,234,849 $ 2.43 2.7 753,349 $ 2.93 2.5 Exercisable at End of Period 665,182 $ 3.08 1.6 720,016 $ 3.00 2.4

12. INCOME TAXES

12. INCOME TAXES	12 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
INCOME TAXES	Due to the Company’s net losses, there were no provisions for income taxes for the years ended December 31, 2020 and 2019. The following table reconciles the U.S. federal statutory income tax rate in effect for the years ended December 31, 2020 and 2019, and the Company’s effective tax rate: 2020 2019 U.S. federal statutory income tax (benefit) 21.00 % 21.00 % State and local income tax, net of benefits 6.64 % 6.64 % Amortization of debt discount 0.00 % -2.05 % Officer life insurance and D&O insurance 0.00 % -0.05 % Stock-based compensation -0.20 % -0.62 % Utilization of net operating loss carryforwards 0.02 % 0.03 % Tax rate changes and other 0.00 % 0.00 % Valuation allowance for deferred income tax assets -27.46 % -24.95 % Effective income tax rate 0.00 % 0.00 % Deferred income tax assets as of December 31, 2020 and 2019 are as follows (in thousands): Deferred Tax Assets 2020 2019 Difference in depreciation, depletion, and capitalization methods – oil and natural gas properties $ 712 $ 529 Accretion 80 80 Impairment 5,343 - Interest Expense - PPP Loan 1 - Stock-Based Compensation 975 584 Net Operating loss – federal taxes 25,507 23,183 Net operating loss – state taxes 3,874 3,139 Total deferred tax asset 36,492 27,515 Less valuation allowance (36,492 ) (27,515 ) Total deferred tax assets $ - $ - In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Utilization of NOL and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code (the “Code”), as amended, as well as similar state provisions. In general, an “ownership change” as defined by the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain shareholders or public groups. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at December 31, 2020 and 2019. The net change in the total valuation allowance from December 31, 2020 to December 31, 2019 was an Increase of $8,977,000. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of December 31, 2020 and 2019, the Company did not have any significant uncertain tax positions or unrecognized tax benefits. The Company did not have associated accrued interest or penalties, nor was any interest expense or penalties recognized for the years ended December 31, 2020 and 2019. As of December 31, 2020, the Company has federal net operating loss carryforwards of approximately $122,000,000, which if not utilized, approximately $95,000,000 of which will begin expiring in 2023 and ending 2037, respectively, and $27,000,000 under CARES Act can be carried back up to five years but also, can be carried forward indefinitely, limited to 80% of a given years taxable income. The Company currently has tax returns open for examination by the Internal Revenue Service for all years, since 2016.

13. SUBSEQUENT EVENTS

13. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2020
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	On January 19, 2021, the Company granted options to purchase an aggregate of 550,000 shares of common stock to various Company employees at an exercise price of $1.39 per share. The options have a term of five years and fully vest in January 2024. 33.3% vest each subsequent year from the date of grant, contingent upon the recipient’s continued service with the Company. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $654,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 0.045% based on the applicable US Treasury bill rate, (2) expected term of 3.5 years, (3) expected volatility of 156% based on the trading history of the Company, and (4) zero expected dividends. Additionally, on January 19, 2021, restricted stock awards were granted to officers of the Company for an aggregate of 940,000 of the Company’s common stock, under the Company’s Amended and Restated 2012 Equity Incentive Plan. The grant for the 940,000 shares of restricted stock vest as follows: 33.3% vest each subsequent year from the date of grant contingent upon the recipient’s continued service with the Company. These shares have a total fair value of $1,307,000 based on the market price on the issuance date. On January 28, 2021, the Company issued 86,430 total shares of common stock upon the cashless exercise of stock options to purchase an aggregate of 191,999 shares of common stock with an exercise price ranging between $1.10 and $1.68 per share, based on a then-current market value of $2.89 per share, under the terms of the options. The options had an intrinsic value of $250,000 on the exercise date. On February 5, 2021, the Company closed an underwritten public offering of 5,968,500 shares of common stock at a public offering price of $1.50 per share, which included the full exercise of the underwriter’s over-allotment option, for net proceeds (after deducting the underwriters’ discount equal to 6% of the public offering price and expenses associated with the offering) of approximately $8.3 million. On February 28, 2021, 16,667 shares of restricted common stock were rescinded due to an employee termination. As a result, these shares were canceled and returned to the Company’s Amended and Restated 2012 Equity Incentive Plan. On March 18, 2021, the Company consummated the sale of certain assets and associated liabilities located in its D-J Basin Asset to a third-party purchaser for an aggregate purchase price received at closing of $1.9 million, which purchase price is subject to certain standard post-closing adjustments.

3. SUMMARY OF SIGNIFICANT ACC_2

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	The consolidated financial statements herein have been prepared in accordance with GAAP and include the accounts of the Company and those of its wholly and partially-owned subsidiaries as follows: (i) Blast AFJ, Inc., a Delaware corporation; (ii) PEDCO, a Nevada corporation; (iii) Red Hawk, a Nevada limited liability company; (iv) Ridgeway Arizona Oil Corp., an Arizona corporation (“RAOC”); (v) EOR Operating Company, a Texas corporation (“EOR”); (vi) SRPT Acquisition, LLC, a Texas limited liability company formed on October 16, 2020 in connection with the Company’s proposed acquisition, which has since been abandoned, of all of the issued and outstanding Common Units of the SandRidge Permian Trust; and (vii) Condor Energy Technology LLC, a Nevada limited liability company (“Condor”), acquired by Red Hawk on August 1, 2018 in connection with the Company’s acquisition of part of its D-J Basin Asset, which was dissolved on October 30, 2019. All significant intercompany accounts and transactions have been eliminated.
Use of Estimates in Financial Statement Preparation	The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statement disclosures. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. Significant estimates generally include those with respect to the amount of recoverable oil and gas reserves, the fair value of financial instruments, oil and gas depletion, asset retirement obligations, and stock-based compensation.
Cash and Cash Equivalents	The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2020, and December 31, 2019, cash equivalents consisted of money market funds and cash on deposit. The Company includes restricted cash within cash and cash equivalents on the consolidated statements of cash flows.
Concentrations of Credit Risk	Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company periodically assesses the financial condition of its financial institutions and considers any possible credit risk to be minimal. Sales to two customers comprised 63% and 11%, respectively, of the Company’s total oil and gas revenues for the year ended December 31, 2020. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Company’s production, there are a substantial number of alternative buyers for its production at comparable prices.
Accounts Receivable	Accounts receivable typically consist of oil and gas receivables. The Company has classified these as short-term assets in the balance sheet because the Company expects repayment or recovery within the next 12 months. The Company evaluates these accounts receivable for collectability considering the results of operations of these related entities and, when necessary, records allowances for expected unrecoverable amounts. To date, no allowances have been recorded. Included in accounts receivable – oil and gas are $14,000 related to receivables from joint interest owners.
Bad Debt Expense	The Company’s ability to collect outstanding receivables is critical to its operating performance and cash flows. Accounts receivable are stated at an amount management expects to collect from outstanding balances. The Company extends credit in the normal course of business. The Company regularly reviews outstanding receivables and when the Company determines that a party may not be able to make required payments, a charge to bad debt expense in the period of determination is made. Though the Company’s bad debts have not historically been significant, the Company could experience increased bad debt expense should a financial downturn occur.
Equipment	Equipment is stated at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Renewals and betterments which extend the life or improve existing equipment are capitalized. Upon disposition or retirement of equipment, the cost and related accumulated depreciation are removed, and any resulting gain or loss is reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are 3 to 10 years.
Oil and Gas Properties, Successful Efforts Method	The successful efforts method of accounting is used for oil and gas exploration and production activities. Under this method, all costs for development wells, support equipment and facilities, and proved mineral interests in oil and gas properties are capitalized. Geological and geophysical costs are expensed when incurred. Costs of exploratory wells are capitalized as exploration and evaluation assets pending determination of whether the wells find proved oil and gas reserves. Proved oil and gas reserves are the estimated quantities of crude oil and natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, (i.e., prices and costs as of the date the estimate is made). Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions. Exploratory wells in areas not requiring major capital expenditures are evaluated for economic viability within one year of completion of drilling. The related well costs are expensed as dry holes if it is determined that such economic viability is not attained. Otherwise, the related well costs are reclassified to oil and gas properties and subject to impairment review. For exploratory wells that are found to have economically viable reserves in areas where major capital expenditure will be required before production can commence, the related well costs remain capitalized only if additional drilling is under way or firmly planned. Otherwise, the related well costs are expensed as dry holes. Exploration and evaluation expenditures incurred subsequent to the acquisition of an exploration asset in a business combination are accounted for in accordance with the policy outlined above. Depreciation, depletion and amortization of capitalized oil and gas properties is calculated on a field-by-field basis using the unit of production method. Lease acquisition costs are amortized over the total estimated proved developed and undeveloped reserves and all other capitalized costs are amortized over proved developed reserves. Costs specific to developmental wells for which drilling is in progress or uncompleted are capitalized as wells in progress and not subject to amortization until completion and production commences, at which time amortization on the basis of production will begin.
Impairment of Long-Lived Assets	The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of the asset by estimating the future net undiscounted cash flows expected to result from the asset, including eventual disposition. If the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and estimated fair value.
Asset Retirement Obligations	If a reasonable estimate of the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells can be made, the Company will record a liability (an asset retirement obligation or “ARO”) on its consolidated balance sheet and capitalize the present value of the asset retirement cost in oil and gas properties in the period in which the retirement obligation is incurred. In general, the amount of an ARO and the costs capitalized will be equal to the estimated future cost to satisfy the abandonment obligation assuming the normal operation of the asset, using current prices that are escalated by an assumed inflation factor up to the estimated settlement date, which is then discounted back to the date that the abandonment obligation was incurred using an assumed cost of funds for the Company. After recording these amounts, the ARO will be accreted to its future estimated value using the same assumed cost of funds and the capitalized costs are depreciated on a unit-of-production basis over the estimated proved developed reserves. Both the accretion and the depreciation will be included in depreciation, depletion and amortization expense on our consolidated statements of operations.
Revenue Recognition	The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to marketers, gatherers, and refiners. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, direct end-users, industrial users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to direct end-users, refiners, and marketers. Payment is generally received from the customer in the month following delivery. Contracts with customers have varying terms, including month-to-month contracts, and contracts with a finite term. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs. Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues.
Income Taxes	The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized.
Uncertain Tax Positions	The Company evaluates uncertain tax positions to recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard or are resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained. The Company is subject to ongoing tax exposures, examinations and assessments in various jurisdictions. Accordingly, the Company may incur additional tax expense based upon the outcomes of such matters. In addition, when applicable, the Company will adjust tax expense to reflect the Company’s ongoing assessments of such matters, which require judgment and can materially increase or decrease its effective rate as well as impact operating results.
Stock-Based Compensation	The Company utilizes the Black-Scholes option pricing model to estimate the fair value of employee stock option awards at the date of grant, which requires the input of highly subjective assumptions, including expected volatility and expected life. Changes in these inputs and assumptions can materially affect the measure of estimated fair value of our share-based compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. When estimating fair value, some of the assumptions will be based on, or determined from, external data and other assumptions may be derived from our historical experience with stock-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances. The Company estimates volatility by considering the historical stock volatility. The Company has opted to use the simplified method for estimating expected term, which is generally equal to the midpoint between the vesting period and the contractual term.
Earnings (Loss) per Common Share	Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. For the year ended December 31, 2020, potentially dilutive securities related to options (1,234,849) and warrants (150,329) were not included in the calculation of diluted net loss per share because to do so would be anti-dilutive.
Recently Adopted Accounting Pronouncements	Effective January 1, 2020, we adopted Financial Accounting Standard Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments, which changed the way entities recognize impairment of most financial assets. Short-term and long-term financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the financial statements, reflecting the net amount expected to be collected. The adoption of this standard did not have an impact on our Consolidated Financial Statements.

4. CASH (Tables)

4. CASH (Tables)	12 Months Ended
	Dec. 31, 2020
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]
Cash and restricted	2020 2019 Cash $ 8,027 $ 22,415 Restricted cash included in other assets 3,297 3,297 Total cash and restricted cash as shown in the consolidated statements of cash flows $ 11,324 $ 25,712

5. REVENUE FROM CONTRACTS WIT_2

5. REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)	12 Months Ended
	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Disaggregation of revenue	2020 2019 Oil sales $ 7,551 $ 12,518 Natural gas sales 330 372 Natural gas liquids sales 178 82 Total revenue from customers $ 8,059 $ 12,972

6. OIL AND GAS PROPERTIES (Tabl

6. OIL AND GAS PROPERTIES (Tables)	12 Months Ended
	Dec. 31, 2020
Extractive Industries [Abstract]
Oil and gas interests	Balance at December 31, Balance at December 31, 2019 Additions Disposals Transfers 2020 Oil and gas properties, subject to amortization $ 126,114 $ 5,542 $ - $ 15,294 $ 146,950 Oil and gas properties, not subject to amortization 14,896 402 - (15,294 ) 4 Asset retirement costs 1,547 (439 ) - - 1,108 Accumulated depreciation, depletion and impairment (50,709 ) (30,355 ) - - (81,064 ) Total oil and gas assets $ 91,848 $ (24,850 ) $ - $ - $ 66,998 Balance at December 31, Balance at December 31, 2018 Additions Disposals Transfers 2019 Oil and gas properties, subject to amortization $ 70,803 $ 29,900 $ (135 ) $ 6,596 $ 107,164 Oil and gas properties, not subject to amortization 8,516 12,976 - (6,596 ) 14,896 Asset retirement costs 2,188 (641 ) - - 1,547 Accumulated depreciation and depletion (21,045 ) (10,714 ) - - (31,759 ) Total oil and gas assets $ 60,462 $ 31,521 $ (135 ) $ - $ 91,848

8. ASSET RETIREMENT OBLIGATIO_2

8. ASSET RETIREMENT OBLIGATIONS (Tables)	12 Months Ended
	Dec. 31, 2020
Asset Retirement Obligation [Abstract]
Asset retirement obligation	2020 Balance at the beginning of the period (1) $ 2,099 Accretion expense 289 Liabilities settled (42 ) Changes in estimates (439 ) Balance at end of period (2) $ 1,907

9. COMMITMENTS AND CONTINGENC_2

9. COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Supplemental information related to operating lease	Supplemental cash flow information related to the Company’s operating lease is included in the table below (in thousands): Year Ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 115 Supplemental balance sheet information related to operating leases is included in the table below (in thousands): December 31, 2020 Operating lease – right-of-use asset $ 270 Operating lease liabilities - current $ 105 Operating lease liabilities - long-term 195 Total lease liability $ 300
Lease liability maturity	2021 $ 118 2022 121 2023 82 Thereafter - Total lease payments 321 Less imputed interest (21 ) Total lease liability $ 300

10. SHAREHOLDERS' EQUITY (Table

10. SHAREHOLDERS' EQUITY (Tables)	12 Months Ended
	Dec. 31, 2020
Shareholders' equity:
Warrant activity	2020 2019 Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term (Years) Outstanding at Beginning of Period 150,329 $ 0.32 1.5 1,216,686 $ 6.36 0.8 Expired/Cancelled - (470,077 ) 13.19 Exercised - (596,280 ) 2.50 Outstanding at End of Period 150,329 $ 0.32 0.5 150,329 $ 0.32 1.5 Exercisable at End of Period 150,329 $ 0.32 0.5 150,329 0.32 1.5

11. SHARE-BASED COMPENSATION (T

11. SHARE-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2020
Equity [Abstract]
Stock option activity	2020 2019 Number of Stock Options Weighted Average Grant Price Weighted Average Remaining Contract Term (Years) Number of Stock Options Weighted Average Grant Price Weighted Average Remaining Contract Term (Years) Outstanding at Beginning of Period 753,349 $ 2.93 2.5 890,232 $ 3.26 3.3 Granted 733,000 1.68 - Expired/Canceled (214,000 ) 2.00 (124,383 ) 6.13 Exercised (37,500 ) 0.31 (12,500 ) 0.31 Outstanding at End of Period 1,234,849 $ 2.43 2.7 753,349 $ 2.93 2.5 Exercisable at End of Period 665,182 $ 3.08 1.6 720,016 $ 3.00 2.4

12. INCOME TAXES (Tables)

12. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Effective income tax rate reconciliation	2020 2019 U.S. federal statutory income tax (benefit) 21.00 % 21.00 % State and local income tax, net of benefits 6.64 % 6.64 % Amortization of debt discount 0.00 % -2.05 % Officer life insurance and D&O insurance 0.00 % -0.05 % Stock-based compensation -0.20 % -0.62 % Utilization of net operating loss carryforwards 0.02 % 0.03 % Tax rate changes and other 0.00 % 0.00 % Valuation allowance for deferred income tax assets -27.46 % -24.95 % Effective income tax rate 0.00 % 0.00 %
Deferred income taxes assets	Deferred Tax Assets 2020 2019 Difference in depreciation, depletion, and capitalization methods – oil and natural gas properties $ 712 $ 529 Accretion 80 80 Impairment 5,343 - Interest Expense - PPP Loan 1 - Stock-Based Compensation 975 584 Net Operating loss – federal taxes 25,507 23,183 Net operating loss – state taxes 3,874 3,139 Total deferred tax asset 36,492 27,515 Less valuation allowance (36,492 ) (27,515 ) Total deferred tax assets $ - $ -

3. SUMMARY OF SIGNIFICANT ACC_3

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Receivables from joint interest owners	$ 14	$ 106
Customer One
Revenue risk percentage	63.00%
Customer Two
Revenue risk percentage	11.00%
Minimum
Estimated useful lives of the assets	3 years
Maximum
Estimated useful lives of the assets	10 years

4. CASH (Details)

4. CASH (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]
Cash	$ 8,027	$ 22,415
Restricted cash included in other assets	3,297	3,297
Total cash and restricted cash as shown in the consolidated statements of cash flows	$ 11,324	$ 25,712	$ 5,779

5. REVENUE FROM CONTRACTS WIT_3

5. REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Total revenue from customers	$ 8,059	$ 12,972
Oil Sales
Total revenue from customers	7,551	12,518
Natural Gas Sales
Total revenue from customers	330	372
Natural Gas Liquids Sales
Total revenue from customers	$ 178	$ 82

6. OIL AND GAS PROPERTIES (Deta

6. OIL AND GAS PROPERTIES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Oil and gas properties, subject to amortization	$ 146,950	$ 107,164	$ 70,803
Oil and gas properties, not subject to amortization	4	14,896	8,516
Asset retirement costs	1,108	1,547	2,188
Accumulated depreciation, depletion and impairment	(81,064)	(31,759)	(21,045)
Total oil and gas assets	66,998	91,848	$ 60,462
Additions
Oil and gas properties, subject to amortization	5,542	29,900
Oil and gas properties, not subject to amortization	402	12,976
Asset retirement costs	(439)	(641)
Accumulated depreciation, depletion and impairment	(30,355)	(10,714)
Total oil and gas assets	(24,850)	31,521
Disposals
Oil and gas properties, subject to amortization	0	(135)
Oil and gas properties, not subject to amortization	0	0
Asset retirement costs	0	0
Accumulated depreciation, depletion and impairment	0	0
Total oil and gas assets	0	(135)
Transfers
Oil and gas properties, subject to amortization	15,294	6,596
Oil and gas properties, not subject to amortization	(15,294)	(6,596)
Asset retirement costs	0	0
Accumulated depreciation, depletion and impairment	0	0
Total oil and gas assets	$ 0	$ 0

6. OIL AND GAS PROPERTIES (De_2

6. OIL AND GAS PROPERTIES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Extractive Industries [Abstract]
Depletion	$ 11,023	$ 10,714
Drilling and completion costs	5,943	26,362
Impairment of oil and gas properties	$ 19,331	$ 0

7. PPP LOAN (Details Narrative)

7. PPP LOAN (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Loan outstanding	$ 370	$ 0

8. ASSET RETIREMENT OBLIGATIO_3

8. ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2020		Dec. 31, 2019
Asset Retirement Obligation [Abstract]
Asset retirement obligation, beginning	[1]	$ 2,099
Accretion expense		289
Liabilities settled		(42)
Changes in estimates		(439)		$ (695)
Asset retirement obligation, ending		$ 1,907	[2]	$ 2,099	[1]
[1]	Includes $225,000 of current asset retirement obligations at December 31, 2019.
[2]	Includes $234,000 of current asset retirement obligations at December 31, 2020.

10. COMMITMENTS AND CONTINGENCI

10. COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 115
Operating lease - right-of-use asset	270	$ 360
Operating lease liabilities - current	105	97
Operating lease liabilities - long-term	195	$ 300
Total lease liability	$ 300

10. COMMITMENTS AND CONTINGEN_2

10. COMMITMENTS AND CONTINGENCIES (Details 1) $ in Thousands	Dec. 31, 2020USD ($)
Commitments and Contingencies Disclosure [Abstract]
2021	$ 118
2022	121
2023	82
Thereafter	0
Total lease payments	321
Less imputed interest	(21)
Total lease liability	$ 300

10. COMMITMENTS AND CONTINGEN_3

10. COMMITMENTS AND CONTINGENCIES (Details Narrative)	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Weighted-average remaining lease term	2 years 8 months 12 days
Weighted-average discount rate	5.35%

11. SHAREHOLDERS' EQUITY (Detai

11. SHAREHOLDERS' EQUITY (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Shareholders' equity:
Number of warrants outstanding, beginning	150,329	1,216,686
Number of warrants expired/cancelled	0	(470,077)
Number of warrants exercised	0	(596,280)
Number of warrants outstanding, ending	150,329	150,329
Number of warrants exercisable	150,329	150,329
Weighted average exercise price outstanding, beginning	$ 0.32	$ 6.36
Weighted average exercise price expired/cancelled	.00	13.19
Weighted average exercise price exercised	.00	2.50
Weighted average exercise price outstanding, ending	.32	0.32
Weighted average exercise price exercisable	$ .32	$ 0.32
Weighted average remaining contractual life (in years) outstanding, beginning	1 year 6 months	9 months 18 days
Weighted average remaining contractual life (in years) outstanding, ending	6 months	1 year 6 months
Weighted average remaining contractual life (in years) exercisable	6 months	1 year 6 months

12. SHARE-BASED COMPENSATION (D

12. SHARE-BASED COMPENSATION (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Equity [Abstract]
Number of options outstanding, beginning	753,349	890,232
Number of options granted	733,000	0
Number of options expired/cancelled	(214,000)	(124,383)
Number of options exercised	(37,500)	(12,500)
Number of options outstanding, ending	1,234,849	753,349
Number of options exercisable	665,182	720,016
Weighted average exercise price outstanding, beginning	$ 2.93	$ 3.26
Weighted average exercise price granted	1.68	0
Weighted average exercise price expired/cancelled	2	6.13
Weighted average exercise price exercised	.31	0.31
Weighted average exercise price outstanding, ending	2.43	2.93
Weighted average exercise price exercisable	$ 3.08	$ 3
Weighted average remaining contractual life (in years) outstanding, beginning	2 years 6 months	3 years 3 months 18 days
Weighted average remaining contractual life (in years) outstanding, ending	2 years 8 months 12 days	2 years 6 months
Weighted average remaining contractual life (in years) exercisable	1 year 7 months 6 days	2 years 4 months 24 days

12. SHARE-BASED COMPENSATION _2

12. SHARE-BASED COMPENSATION (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Equity [Abstract]
Stock-based compensation expense, restricted stock	$ 2,323	$ 1,259
Unamortized stock-based compensation expense, restricted stock	1,144	999
Stock-based compensation expense, stock option	501	298
Unamortized stock-based compensation expense, stock option	315	22
Intrinsic value of options exercisable	$ 121	$ 197

15. INCOME TAXES (Details)

15. INCOME TAXES (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax (benefit)	21.00%	21.00%
State and local income tax, net of benefits	6.64%	6.64%
Amortization of debt discount	0.00%	(2.05%)
Officer life insurance and D&O insurance	0.00%	(0.05%)
Stock-based compensation	(0.20%)	(0.62%)
Utilization of net operating loss carryforwards	0.02%	0.03%
Tax rate changes and other	0.00%	0.00%
Valuation allowance for deferred income tax assets	(27.46%)	(24.95%)
Effective income tax rate	0.00%	0.00%

15. INCOME TAXES (Details 1)

15. INCOME TAXES (Details 1) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred Tax Assets
Difference in depreciation, depletion, and capitalization methods - oil and natural gas properties	$ 712	$ 529
Accretion	80	80
Impairment	5,343	0
Interest expense - PPP loan	1	0
Stock-based compensation	975	584
Net operating losses - federal taxes	25,507	23,183
Net operating losses - state taxes	3,874	3,139
Total deferred tax asset	36,492	27,515
Less valuation allowance	(36,492)	(27,515)
Total deferred tax assets	$ 0	$ 0

15. INCOME TAXES (Details Narra

15. INCOME TAXES (Details Narrative) $ in Thousands	12 Months Ended
	Dec. 31, 2020USD ($)
Income Tax Disclosure [Abstract]
Net change in valuation allowance	$ 8,977
Federal net operating loss carryforwards	$ 122,000