Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 08, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Entity Registrant Name | RING ENERGY, INC. | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67,977,095 | |
Entity Central Index Key | 0001384195 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-36057 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 90-0406406 | |
Entity Address, Address Line One | 901 West Wall St. 3rd Floor | |
Entity Address, City or Town | Midland | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 79701 | |
City Area Code | (432) | |
Local Phone Number | 682-7464 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Security Exchange Name | NYSE | |
Trading Symbol | REI |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 12,531,388 | $ 10,004,622 |
Accounts receivable | 12,027,477 | 22,909,195 |
Joint interest billing receivable | 2,444,702 | 1,812,469 |
Derivative receivable | 3,334,128 | 0 |
Derivative asset | 34,056,600 | 0 |
Prepaid expenses and retainers | 397,802 | 3,982,255 |
Total Current Assets | 64,792,097 | 38,708,541 |
Properties and Equipment | ||
Oil and natural gas properties subject to amortization | 1,100,005,708 | 1,083,966,135 |
Financing lease asset subject to depreciation | 858,513 | 858,513 |
Fixed assets subject to depreciation | 1,465,551 | 1,465,551 |
Total Properties and Equipment | 1,102,329,772 | 1,086,290,199 |
Accumulated depreciation, depletion and amortization | (170,757,041) | (157,074,044) |
Net Properties and Equipment | 931,572,731 | 929,216,155 |
Operating lease asset | 1,577,993 | 1,867,044 |
Derivative asset | 10,030,002 | 0 |
Deferred Financing Costs | 3,025,326 | 3,214,408 |
Total Assets | 1,010,998,149 | 973,006,148 |
Current Liabilities | ||
Accounts payable | 39,051,572 | 54,635,602 |
Financing lease liability | 284,630 | 280,970 |
Operating lease liability | 1,056,690 | 1,175,904 |
Derivative liabilities | 0 | 3,000,078 |
Total Current Liabilities | 40,392,892 | 59,092,554 |
Deferred income taxes | 18,451,092 | 6,001,176 |
Revolving line of credit | 366,500,000 | 366,500,000 |
Financing lease liability, less current portion | 352,660 | 424,126 |
Operating lease liability, less current portion | 521,303 | 691,140 |
Asset retirement obligations | 16,792,356 | 16,787,219 |
Total Liabilities | 443,010,303 | 449,496,215 |
Stockholders' Equity | ||
Preferred stock - $0.001 par value; 50,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock - $0.001 par value; 150,000,000 shares authorized; 67,993,797 shares and 67,993,797 shares issued and outstanding, respectively | 67,994 | 67,994 |
Additional paid-in capital | 526,975,076 | 526,301,281 |
Retained earnings (accumulated deficit) | 40,944,776 | (2,859,342) |
Total Stockholders' Equity | 567,987,846 | 523,509,933 |
Total Liabilities and Stockholders' Equity | $ 1,010,998,149 | $ 973,006,148 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
CONDENSED BALANCE SHEETS | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 67,993,797 | 67,993,797 |
Common Stock, Shares, Outstanding | 67,993,797 | 67,993,797 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED STATEMENTS OF OPERATIONS | ||
Oil and Gas Revenues | $ 39,570,328 | $ 41,798,315 |
Costs and Operating Expenses | ||
Oil and gas production costs | 10,378,461 | 9,408,764 |
Oil and gas production taxes | 1,870,245 | 2,082,875 |
Depreciation, depletion and amortization | 13,682,996 | 12,929,054 |
Asset retirement obligation accretion | 231,962 | 215,945 |
Lease expense | 289,051 | 128,175 |
General and administrative expense | 3,035,895 | 6,798,017 |
Total Costs and Operating Expenses | 29,488,610 | 31,562,830 |
Income from Operations | 10,081,718 | 10,235,485 |
Other Income (Expense) | ||
Interest income | 5 | 12,236 |
Interest expense | (4,248,498) | (773,017) |
Realized gain on derivatives | 3,334,128 | 0 |
Unrealized gain (loss) on change in fair value of derivatives | 47,086,681 | (340,685) |
Net Other Income (Expense) | 46,172,316 | (1,101,466) |
Income before tax provision | 56,254,034 | 9,134,019 |
Provision for Income Taxes | (12,449,916) | (4,864,759) |
Net Income | $ 43,804,118 | $ 4,269,260 |
Basic Income per Share | $ 0.64 | $ 0.07 |
Diluted Income per Share | $ 0.64 | $ 0.07 |
CONDENSED STATEMENTS OF STOCKHO
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total |
Balance at Dec. 31, 2018 | $ 63,230 | $ 494,892,093 | $ (32,355,893) | $ 462,599,430 |
Balance (in shares) at Dec. 31, 2018 | 63,229,710 | |||
Share-based compensation | $ 0 | 834,465 | 0 | 834,465 |
Net income | 0 | 0 | 4,269,260 | 4,269,260 |
Balance at Mar. 31, 2019 | $ 63,230 | 495,726,558 | (28,086,633) | 467,703,155 |
Balance (in shares) at Mar. 31, 2019 | 63,229,710 | |||
Balance at Dec. 31, 2019 | $ 67,994 | 526,301,281 | (2,859,342) | 523,509,933 |
Balance (in shares) at Dec. 31, 2019 | 67,993,797 | |||
Share-based compensation | $ 0 | 673,795 | 0 | 673,795 |
Net income | 0 | 0 | 43,804,118 | 43,804,118 |
Balance at Mar. 31, 2020 | $ 67,994 | $ 526,975,076 | $ 40,944,776 | $ 567,987,846 |
Balance (in shares) at Mar. 31, 2020 | 67,993,797 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities | ||
Net income | $ 43,804,118 | $ 4,269,260 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, depletion and amortization | 13,682,996 | 12,929,054 |
Accretion expense | 231,962 | 215,945 |
Amortization of deferred financing costs | 189,082 | 0 |
Share-based compensation | 673,795 | 834,465 |
Deferred income tax provision | 12,028,380 | 1,918,144 |
Excess tax deficiency related to share-based compensation | 421,536 | 2,946,615 |
Change in fair value of derivative instruments | (47,086,680) | 340,685 |
Changes in assets and liabilities: | ||
Accounts receivable | 6,915,357 | (15,808,739) |
Prepaid expenses and retainers | 3,584,453 | 180,452 |
Accounts payable | (6,614,029) | 2,111,804 |
Settlement of asset retirement obligation | (293,212) | (107,770) |
Net Cash Provided by Operating Activities | 27,537,758 | 9,829,915 |
Cash Flows From Investing Activities | ||
Payments to purchase oil and natural gas properties | (480,048) | (13,358,132) |
Payments to develop oil and natural gas properties | (24,463,138) | (42,228,740) |
Net Cash Used in Investing Activities | (24,943,186) | (55,586,872) |
Cash Flows From Financing Activities | ||
Proceeds from revolving line of credit | 0 | 45,000,000 |
Reduction of financing lease liabilities | (67,806) | 0 |
Net Cash Provided by (Used in) Financing Activities | (67,806) | 45,000,000 |
Net Change in Cash | 2,526,766 | (756,957) |
Cash at Beginning of Period | 10,004,622 | 3,363,726 |
Cash at End of Period | 12,531,388 | 2,606,769 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 4,211,754 | 708,951 |
Noncash Investing and Financing Activities | ||
Asset retirement obligation incurred during development | 66,387 | 175,173 |
Capitalized expenditures attributable to drilling projects financed through current liabilities | 6,200,000 | 34,605,000 |
Acquisition of oil and gas properties | ||
Assumption of joint interest billing receivable | 0 | 1,464,394 |
Assumption of prepaid assets | 0 | 2,864,554 |
Assumption of accounts and revenue payables | 0 | (1,234,862) |
Asset retirement obligation | 0 | (2,979,645) |
Acquisition payable to be settled through equity | 0 | (28,356,396) |
Acquisition payable to be settled through cash payment | 0 | (256,877,766) |
Oil and gas properties subject to amortization | $ 0 | $ 285,119,721 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Condensed Financial Statements These unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2019. Organization and Nature of Operations – COVID - 19 Use of Estimates Fair Measurements Fair Values of Financial Instruments Derivative Instruments and Hedging Activities When applicable, the Company records all derivative instruments, other than those that meet the normal purchases and sales exception, on the balance sheet as either an asset or liability measured at fair value. Changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. During the three months ended During the three months ended March 31, 2020, the Company had a realized gain of $3,334,128 on derivatives. During the three months ended March 31, 2019, the Company had no realized Concentration of Credit Risk and Major Customer Approximately 83% of the Company’s accounts and joint interest billing receivables are from purchasers of oil and gas. Oil and gas sales are generally unsecured. The Company has not had any significant credit losses in the past and believes its accounts and joint interest billing receivables are fully collectable. Accordingly, no allowance for doubtful accounts has been provided at March 31, 2020. The Company also has joint interest billing receivable. Joint interest billing receivables are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself. Oil and Gas Properties All capitalized costs of oil and gas properties, plus estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves as determined by independent petroleum engineers. The Company evaluates oil and gas properties for impairment quarterly. Depreciation, depletion and amortization expense for the three months ended March 31, 2020 was $13,682,996 based on depletion at the rate of $13.81 per barrel of oil equivalent compared to $12,929,054 based on depletion at the rate of $14.72 per barrel of oil equivalent for the three months ended March 31, 2019. These amounts include $111,191 of depreciation for the three months ended March 31, 2020, compared to $41,154 of depreciation for the three months ended March 31, 2019. Equipment, vehicles and leasehold improvements 5 Asset Retirement Obligation Share-Based Employee Compensation Share-Based Compensation to Non-Employees Income Taxes Recently Adopted Accounting Pronouncements Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). Basic and Diluted Earnings per Share |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 2 – REVENUE RECOGNITION The Company predominantly derives its revenue from the sale of produced crude oil and natural gas. The contractual performance obligation is satisfied when the product is delivered to the customer. Revenue is recorded in the month the product is delivered to the purchaser and the Company receives payment from one to three months after delivery. The transaction price includes variable consideration as product pricing is based on published market prices and reduced for contract specified differentials. The guidance does not require that the transaction price be fixed or stated in the contract. Estimating the variable consideration does not require significant judgment and Ring engages third party sources to validate the estimates. Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration the Company expects to receive in exchange for those products. Oil sales Under the Company’s oil sales contracts, the Company sells oil production at the point of delivery and collects an agreed upon index price, net of pricing differentials. The Company recognizes revenue when control transfers to the purchaser at the point of delivery at the net price received. Natural gas sales Under the Company’s natural gas sales contracts, the Company delivers unprocessed natural gas to a midstream processing entity at the wellhead. The midstream processing entity obtains control of the natural gas at the wellhead. The midstream processing entity gathers and processes the natural gas and remits proceeds to the Company for the resulting sale of natural gas. Under these agreements, the Company recognizes revenue when control transfers to the purchaser at the point of delivery. Disaggregation of Revenue. For The Three Months Ended March 31, 2020 2019 Operating revenues Oil $ 38,637,199 $ 40,877,983 Natural gas 933,129 920,332 Total operating revenues $ 39,570,328 $ 41,798,315 All revenues are from production from the Permian Basin in Texas and New Mexico. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
LEASES | NOTE 3 – LEASES Effective January 1, 2019, the Company adopted ASU 2016-02, Leases The Company made accounting policy elections to not capitalize leases with a lease term of twelve months or less and to not separate lease and non-lease components for all asset classes. The Company has also elected to adopt the package of practical expedients within ASU 2016-02 that allows an entity to not reassess prior to the effective date not elect the practical expedient of hindsight The Company has operating leases for our offices in Midland, Texas and Tulsa, Oklahoma that are month to month but which the Company intends to continue through at least December 31, 2020. As such, these leases have been accounted for as operating leases with terms that end on December 31, 2020. The office space being leased in Tulsa is owned by Arenaco, LLC, a company that is owned by Mr. Rochford, Chairman of the Board of the Company, and Mr. McCabe, a Director of the Company. The Company also has month to month leases for office equipment and compressors used in our operations on which the Company has elected to apply ASU 2016-02. While these leases are month to month, the Company intends to continue these leases for the useful life of the assets. As such, these leases have been accounted for as if the lease term lasts through the estimated useful life of the assets. The Company also has month to month leases or other short-term leases for equipment used in our operations on which the Company has made accounting policy elections not to capitalize these leases. These leases are for terms that are less than 12 months and the Company does not intend to continue to lease this equipment for more than 12 months. The lease costs associated with these leases is reflected in the short-term lease costs below. The Company also has financing leases for vehicles. These leases have a term of 36 months Future lease payments associated with these operating and financing leases as of March 31, 2020 are as follows: 2020 2021 2022 Operating lease payments (1) $ 927,584 $ 708,392 $ — Financing lease payments (2) 233,405 311,206 132,499 (1) The weighted average discount rate as of March 31, 2020 for operating leases was 4.49%. Based on this rate, the future lease payments above include imputed interest of $57,982. (2) The weighted average discount rate as of March 31, 2020 for financing leases was 5.26%. Based on this rate, the future lease payments above include imputed interest of $38,159. The following table provides supplemental information regarding cash flows from operations: 2020 2019 Operating lease costs $ 309,195 $ 128,175 Short term lease costs (1) 851,949 153,759 Financing lease costs: Amortization of financing lease assets (2) 71,853 — Interest on lease liabilities (3) 8,822 — (1) Amount included in Oil and gas production costs (2) Amount included in Depreciation, depletion and amortization (3) Amount included in Interest expense |
EARNINGS PER SHARE INFORMATION
EARNINGS PER SHARE INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE INFORMATION | |
EARNINGS (LOSS) PER SHARE INFORMATION | NOTE 4 – EARNINGS PER SHARE INFORMATION For The Three Months Ended March 31, 2019 2020 (restated) Net Income $ 43,804,118 $ 4,269,260 Basic Weighted-Average Shares Outstanding 67,993,797 63,229,710 Effect of dilutive securities: Stock options — 590,098 Restricted stock 3,295 172,741 Diluted Weighted-Average Shares Outstanding 67,997,092 63,992,549 Basic Income per Share $ 0.64 $ 0.07 Diluted Income per Share $ 0.64 $ 0.07 Stock options to purchase 2,748,500 shares of common stock and 1,329,489 shares of unvested restricted stock were excluded from the computation of diluted earnings per share during the three months ended March 31, 2020, as their effect would have been anti-dilutive. Stock options to purchase 993,500 shares of common stock and 326,200 shares of unvested restricted stock were excluded from the computation of diluted earnings per share during the three months ended March 31, 2019, as their effect would have been anti-dilutive. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2020 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 5 – ACQUISITIONS On April 9, 2019, the Company completed the acquisition of oil and gas properties from Wishbone Energy Partners, LLC, Wishbone Texas Operating Company LLC and WB WaterWorks LLC on the Northwest Shelf in Gaines, Yoakum, Runnels and Coke Counties, Texas and Lea County, New Mexico (the “Acquisition”). The acquired properties consist of 49,754 gross (38,230 net) acres and include a 77% average working interest and a 58% average net revenue interest. The Company incurred approximately $3.5 million in acquisition related costs, which were recognized in general and administrative expense during the three months ended March 31, 2019. The Acquisition was recognized as a business combination whereby Ring recorded the assets acquired and the liabilities assumed at their fair values as of February 1, 2019, which is the date the Company obtained control of the properties and was the acquisition date for financial reporting purposes. Revenues and related expenses for the Acquisition are included in our condensed statement of operations beginning February 1, 2019. The estimated fair value of the acquired properties approximated the consideration paid, which the Company concluded approximated the fair value that would be paid by a typical market participant. The following table summarizes the fair values of the assets acquired and the liabilities assumed: Assets acquired: Joint interest billing receivable $ 1,464,394 Prepaid assets 2,864,554 Liabilities assumed Draw on revolving line of credit (15,000,000) Accounts and revenues payable (1,234,862) Asset retirement obligations (2,979,645) Acquisition payable settled through equity (28,356,396) Acquisition payable settled through cash payment (256,877,766) Total Identifiable Net Assets $ (300,119,721) The $15 million draw on the revolving line of credit was the deposit placed at the signing of the Purchase and Sale Agreement on February 25, 2019. The Acquisition closed on April 9, 2019, at which time we issued 4,581,001 shares of common stock and paid the cash settlement amounts through the amendment and restatement of the Credit Facility as discussed further in Note 8. The Company will continue to evaluate the fair value of the assets and liabilities reflected above and will record any adjustments, if needed, in future periods. The following unaudited pro forma information for the three months ended March 31, 2019 is presented to reflect the operations of the Company as if the acquisition of assets had been completed on January 1, 2019: For The Three Months Ended March 31, 2019 Oil and Gas Revenues $ 48,463,729 Net Income $ 11,379,247 Basic Earnings per Share $ 0.17 Diluted Earnings per Share $ 0.17 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to fluctuations in crude oil and natural gas prices on its production. It can utilize derivative strategies that consist of either a single derivative instrument or a combination of instruments to manage the variability in cash flows associated with the forecasted sale of its future domestic oil and natural gas production. While the use of derivative instruments may limit or partially reduce the downside risk of adverse commodity price movements, the use also may limit future income from favorable commodity price movements. During April and November of 2019 and February and March of 2020, the Company entered into derivative contracts in the form of costless collars of WTI Crude Oil prices in order to protect the Company’s cash flow from price fluctuation and maintain its capital programs. “Costless collars” are the combination of two options, a put option (floor) and a call option (ceiling) with the options structured so that the premium paid for the put option will be offset by the premium received from selling the call option. The trades were for a total of 5,500 barrels of oil per day for the period of January 2020 through December 2020 and 4,500 barrels of oil per day for the period of January 2021 through December 2021. The following table reflects the put and call prices of those contracts: Date entered into Barrels per day Put price Call price 2020 contracts 04/01/19 1,000 $ 50.00 $ 65.83 04/01/19 1,000 50.00 65.40 11/05/19 1,000 50.00 58.40 11/07/19 1,000 50.00 58.25 11/11/19 1,500 50.00 58.65 2021 contracts 02/25/20 1,000 $ 45.00 $ 54.75 02/25/20 1,000 45.00 52.71 02/27/20 1,000 40.00 55.08 03/02/20 1,500 40.00 55.35 Derivative financial instruments are recorded at fair value and included as either assets or liabilities in the accompanying balance sheets. Any gains or losses resulting from changes in fair value of outstanding derivative financial instruments and from the settlement of derivative financial instruments are recognized in earnings and included as a component of other income (expense) in the accompanying statements of operations. The use of derivative transactions involves the risk that the counterparties, which generally are financial institutions, will be unable to meet the financial terms of such transactions. At March 31, 2020, 100% of our volumes subject to derivative instruments are with lenders under our Credit Facility (as defined in Note 8). |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 7 – FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The authoritative guidance requires disclosure of the framework for measuring fair value and requires that fair value measurements be classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We consider active markets as those in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that we value using observable market data. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy. We continue to evaluate our inputs to ensure the fair value level classification is appropriate. When transfers between levels occur, it is our policy to assume that the transfer occurred at the date of the event or change in circumstances that caused the transfer. The fair values of the Company’s derivatives are not actively quoted in the open market. The Company uses a market approach to estimate the fair values of its derivative instruments on a recurring basis, utilizing commodity futures pricing for the underlying commodities provided by a reputable third party, a Level 2 fair value measurement. The following table summarizes the valuation of our assets and liabilities that are measured at fair value on a recurring basis. Fair Value Measurement Classification Quoted prices in Actives Markets for Identical Assets Significant Other Significant or (Liabilities) Observable Inputs Unobservable (Level 1) (Level 2) Inputs (Level 3) Total As of March 31, 2019 Oil and gas derivative (liabilities) $ — $ (340,685) $ — $ (340,685) Total $ — $ (340,685) $ — $ (340,685) Fair Value Measurement Classification Quoted prices in Actives Markets for Identical Assets Significant Other Significant or (Liabilities) Observable Inputs Unobservable (Level 1) (Level 2) Inputs (Level 3) Total As of March 31, 2020 Oil and gas derivative assets $ — $ 47,420,730 $ — $ 47,420,730 Total $ — $ 47,420,730 $ — $ 47,420,730 |
REVOLVING LINE OF CREDIT
REVOLVING LINE OF CREDIT | 3 Months Ended |
Mar. 31, 2020 | |
REVOLVING LINE OF CREDIT | |
REVOLVING LINE OF CREDIT | NOTE 8 – REVOLVING LINE OF CREDIT On July 1, 2014, the Company entered into a Credit Agreement with SunTrust Bank, as lender, issuing bank and administrative agent for several banks and other financial institutions and lenders (the “Administrative Agent”), which was amended on June 14, 2018, May 18, 2016, July 24, 2015, and June 26, 2015. In April 2019, the Company amended and restated its Credit Agreement with the Administrative Agent (as amended and restated, the “Credit Facility”). The amendment and restatement of the Credit Facility, among other things, increased the maximum borrowing amount to $1 billion, increased the borrowing base (the “Borrowing Base”) to $425 million, subject to periodic redeterminations, extended the maturity date through April 2024 and made other modifications to the terms of the Credit Facility. The Credit Facility is secured by a first lien security interest on substantially all of the Company’s assets. The Borrowing Base is subject to periodic redeterminations, mandatory reductions and further adjustments from time to time. The Borrowing Base is redetermined semi-annually on each May 1 and November 1. The May redetermination is in process. The Borrowing Base will also be reduced in certain circumstances such as the sale or disposition of certain oil and gas properties of the Company or its subsidiaries and cancellation of certain hedging positions. The Credit Facility allows for Eurodollar Loans and Base Rate Loans. The interest rate on each Eurodollar Loan will be the adjusted LIBOR for the applicable interest period plus a margin between 1.75% and 2.75% (depending on the then-current level of Borrowing Base usage). The annual interest rate on each Base Rate Loan is (a) the greatest of (i) the Administrative Agent’s prime lending rate, (ii) the Federal Funds Rate (as defined in the Credit Facility) plus 0.5% per annum, (iii) the adjusted LIBOR determined on a daily basis for an interest period of one-month, plus 1.00% per annum and (iv) 0.00% per annum, plus (b) a margin between 0.75% and 1.75% (depending on the then-current level of Borrowing Base usage). The Credit Facility contains certain covenants, which, among other things, require the maintenance of (i) a total Leverage Ratio (as defined in the Credit Facility) of not more than 4.0 to 1.0 and (ii) a minimum ratio of Current Assets to Current Liabilities (as such terms are defined in the Credit Facility) of 1.0 to 1.0. The Credit Facility also contains other customary affirmative and negative covenants and events of default. As of March 31, 2020, $366,500,000 was outstanding on the Credit Facility. The Company was in compliance with all covenants contained in the Credit Facility as of March 31, 2020. |
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION | 3 Months Ended |
Mar. 31, 2020 | |
ASSET RETIREMENT OBLIGATION | |
ASSET RETIREMENT OBLIGATION | NOTE 9 – ASSET RETIREMENT OBLIGATION The Company provides for the obligation to plug and abandon oil and gas wells at the dates properties are either acquired or the wells are drilled. The asset retirement obligation is adjusted each quarter for any liabilities incurred or settled during the period, accretion expense and any revisions made to the estimated cash flows. The asset retirement obligation incurred at the time of drilling was computed using the annual credit-adjusted risk-free discount rate at the applicable dates. Changes in the asset retirement obligation were as follows: Balance, December 31, 2019 $ 16,787,219 Liabilities incurred 66,387 Liabilities settled (293,212) Accretion expense 231,962 Balance, March 31, 2020 $ 16,792,356 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY Common Stock Issued in Public Offering |
EMPLOYEE STOCK OPTIONS AND REST
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | 3 Months Ended |
Mar. 31, 2020 | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | |
EMPLOYEE STOCK OPTIONS, RESTRICTED STOCK AWARD PLAN AND 401(k) | NOTE 11 – EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN Compensation expense charged against income for share-based awards during the three months ended March 31, 2020, was $673,795 as compared to $834,465 for the three months ended March 31, 2019. These amounts are included in general and administrative expense in the accompanying financial statements. In 2011, the board of directors and stockholders approved and adopted a long-term incentive plan which allowed for the issuance of up to 2,500,000 shares of common stock through the grant of qualified stock options, non-qualified stock options and restricted stock. In 2013, the Company’s board of directors and stockholders approved an amendment to the long-term incentive plan, increasing the number of shares eligible under the plan to 5,000,000 shares. As of March 31, 2020, there were 31,355 shares remaining eligible for issuance under the plan. Stock Options A summary of the stock option activity as of March 31, 2019 and 2020, respectively, and changes during the three months then ended is as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2018 2,751,000 $ 6.28 Granted — $ — Forfeited or rescinded (2,500) $ 11.70 Vested — $ — Outstanding, March 31, 2019 2,748,500 $ 6.28 5.3 Years $ 3,366,300 Exercisable, March 31, 2019 2,323,400 $ 5.42 4.6 Years Outstanding, December 31, 2019 2,748,500 $ 6.28 Granted — $ — Forfeited or rescinded — $ — Vested — $ — Outstanding, March 31, 2020 2,748,500 $ 6.28 3.7 Years $ — Exercisable, March 31, 2020 2,506,700 $ 5.78 3.4 Years The intrinsic value was calculated using the closing price on March 31, 2019 and 2020 of $5.87 and $0.66, respectively. As of March 31, 2020, there was $575,402 of unrecognized compensation cost related to stock options that is expected be recognized over a weighted-average period of 1.3 years. Restricted Stock A summary of the restricted stock activity as of March 31, 2019 and 2020, and changes during the three months then ended is as follows: Weighted- Average Grant Restricted stock Date Fair Value Outstanding, December 31, 2018 878,360 $ 7.36 Granted — — Forfeited or rescinded (4,400) 7.53 Vested — — Outstanding, March 31, 2019 873,960 $ 7.36 Outstanding, December 31, 2019 1,341,889 $ 4.94 Granted — — Forfeited or rescinded (2,400) 4.78 Vested — — Outstanding, March 31, 2020 1,339,489 $ 4.93 As of March 31, 2020, there was $3,905,640 of unrecognized compensation cost related to restricted stock grants that will be recognized over a weighted average period of 1.6 years. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 12 – CONTINGENCIES AND COMMITMENTS Standby Letters of Credit Surety Bonds |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS On April 13, 2020, the Company drew $21.5 million on the Credit Facility, increasing the total amount outstanding to $388 million. On April 9, 2020, the Company entered into a Purchase and Sale Agreement to sell its Delaware Basin assets, consisting of approximately 20,000 net acres located in Culberson and Reeves Counties, Texas. The sales price is $31.5 million. The Company has received a $500,000 non-refundable deposit and expects to close the transaction in approximately 60 days |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Condensed Financial Statements | Condensed Financial Statements These unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2019. |
Organization and Nature of Operations | Organization and Nature of Operations – |
COVID - 19 | COVID - 19 |
Use of Estimates | Use of Estimates |
Fair Measurements | Fair Measurements |
Fair Values of Financial Instruments | Fair Values of Financial Instruments |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities When applicable, the Company records all derivative instruments, other than those that meet the normal purchases and sales exception, on the balance sheet as either an asset or liability measured at fair value. Changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. During the three months ended During the three months ended March 31, 2020, the Company had a realized gain of $3,334,128 on derivatives. During the three months ended March 31, 2019, the Company had no realized |
Concentration of Credit Risk and Major Customer | Concentration of Credit Risk and Major Customer Approximately 83% of the Company’s accounts and joint interest billing receivables are from purchasers of oil and gas. Oil and gas sales are generally unsecured. The Company has not had any significant credit losses in the past and believes its accounts and joint interest billing receivables are fully collectable. Accordingly, no allowance for doubtful accounts has been provided at March 31, 2020. The Company also has joint interest billing receivable. Joint interest billing receivables are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself. |
Oil and Gas Properties | Oil and Gas Properties All capitalized costs of oil and gas properties, plus estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves as determined by independent petroleum engineers. The Company evaluates oil and gas properties for impairment quarterly. Depreciation, depletion and amortization expense for the three months ended March 31, 2020 was $13,682,996 based on depletion at the rate of $13.81 per barrel of oil equivalent compared to $12,929,054 based on depletion at the rate of $14.72 per barrel of oil equivalent for the three months ended March 31, 2019. These amounts include $111,191 of depreciation for the three months ended March 31, 2020, compared to $41,154 of depreciation for the three months ended March 31, 2019. |
Equipment, vehicles and leasehold improvements | Equipment, vehicles and leasehold improvements 5 |
Asset Retirement Obligation [Policy Text Block] | Asset Retirement Obligation |
Share-Based Employee Compensation | Share-Based Employee Compensation |
Share-Based Compensation to Non-Employees | Share-Based Compensation to Non-Employees |
Income Taxes | Income Taxes |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue | For The Three Months Ended March 31, 2020 2019 Operating revenues Oil $ 38,637,199 $ 40,877,983 Natural gas 933,129 920,332 Total operating revenues $ 39,570,328 $ 41,798,315 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
Schedule of future lease payments of operating lease and finance lease | 2020 2021 2022 Operating lease payments (1) $ 927,584 $ 708,392 $ — Financing lease payments (2) 233,405 311,206 132,499 (1) The weighted average discount rate as of March 31, 2020 for operating leases was 4.49%. Based on this rate, the future lease payments above include imputed interest of $57,982. (2) The weighted average discount rate as of March 31, 2020 for financing leases was 5.26%. Based on this rate, the future lease payments above include imputed interest of $38,159. |
Schedule of lease cost | 2020 2019 Operating lease costs $ 309,195 $ 128,175 Short term lease costs (1) 851,949 153,759 Financing lease costs: Amortization of financing lease assets (2) 71,853 — Interest on lease liabilities (3) 8,822 — (1) Amount included in Oil and gas production costs (2) Amount included in Depreciation, depletion and amortization (3) Amount included in Interest expense |
EARNINGS (LOSS) PER SHARE INFOR
EARNINGS (LOSS) PER SHARE INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE INFORMATION | |
Schedule of earnings per share, Basic and Diluted | For The Three Months Ended March 31, 2019 2020 (restated) Net Income $ 43,804,118 $ 4,269,260 Basic Weighted-Average Shares Outstanding 67,993,797 63,229,710 Effect of dilutive securities: Stock options — 590,098 Restricted stock 3,295 172,741 Diluted Weighted-Average Shares Outstanding 67,997,092 63,992,549 Basic Income per Share $ 0.64 $ 0.07 Diluted Income per Share $ 0.64 $ 0.07 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ACQUISITIONS | |
Schedule of fair values of the assets acquired and the liabilities assumed | Assets acquired: Joint interest billing receivable $ 1,464,394 Prepaid assets 2,864,554 Liabilities assumed Draw on revolving line of credit (15,000,000) Accounts and revenues payable (1,234,862) Asset retirement obligations (2,979,645) Acquisition payable settled through equity (28,356,396) Acquisition payable settled through cash payment (256,877,766) Total Identifiable Net Assets $ (300,119,721) |
Schedule of business acquisition pro forma information | For The Three Months Ended March 31, 2019 Oil and Gas Revenues $ 48,463,729 Net Income $ 11,379,247 Basic Earnings per Share $ 0.17 Diluted Earnings per Share $ 0.17 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of put and call prices of those contracts | Date entered into Barrels per day Put price Call price 2020 contracts 04/01/19 1,000 $ 50.00 $ 65.83 04/01/19 1,000 50.00 65.40 11/05/19 1,000 50.00 58.40 11/07/19 1,000 50.00 58.25 11/11/19 1,500 50.00 58.65 2021 contracts 02/25/20 1,000 $ 45.00 $ 54.75 02/25/20 1,000 45.00 52.71 02/27/20 1,000 40.00 55.08 03/02/20 1,500 40.00 55.35 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE MEASUREMENTS | |
Schedule of valuation of assets and liabilities that are measured at fair value on a recurring basis | Fair Value Measurement Classification Quoted prices in Actives Markets for Identical Assets Significant Other Significant or (Liabilities) Observable Inputs Unobservable (Level 1) (Level 2) Inputs (Level 3) Total As of March 31, 2019 Oil and gas derivative (liabilities) $ — $ (340,685) $ — $ (340,685) Total $ — $ (340,685) $ — $ (340,685) Fair Value Measurement Classification Quoted prices in Actives Markets for Identical Assets Significant Other Significant or (Liabilities) Observable Inputs Unobservable (Level 1) (Level 2) Inputs (Level 3) Total As of March 31, 2020 Oil and gas derivative assets $ — $ 47,420,730 $ — $ 47,420,730 Total $ — $ 47,420,730 $ — $ 47,420,730 |
ASSET RETIREMENT OBLIGATION (Ta
ASSET RETIREMENT OBLIGATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ASSET RETIREMENT OBLIGATION | |
Schedule of asset retirement obligation | Balance, December 31, 2019 $ 16,787,219 Liabilities incurred 66,387 Liabilities settled (293,212) Accretion expense 231,962 Balance, March 31, 2020 $ 16,792,356 |
EMPLOYEE STOCK OPTIONS AND RE_2
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | |
Schedule of Stock Options Activity | Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2018 2,751,000 $ 6.28 Granted — $ — Forfeited or rescinded (2,500) $ 11.70 Vested — $ — Outstanding, March 31, 2019 2,748,500 $ 6.28 5.3 Years $ 3,366,300 Exercisable, March 31, 2019 2,323,400 $ 5.42 4.6 Years Outstanding, December 31, 2019 2,748,500 $ 6.28 Granted — $ — Forfeited or rescinded — $ — Vested — $ — Outstanding, March 31, 2020 2,748,500 $ 6.28 3.7 Years $ — Exercisable, March 31, 2020 2,506,700 $ 5.78 3.4 Years |
Schedule of Restricted Stock Grants | Weighted- Average Grant Restricted stock Date Fair Value Outstanding, December 31, 2018 878,360 $ 7.36 Granted — — Forfeited or rescinded (4,400) 7.53 Vested — — Outstanding, March 31, 2019 873,960 $ 7.36 Outstanding, December 31, 2019 1,341,889 $ 4.94 Granted — — Forfeited or rescinded (2,400) 4.78 Vested — — Outstanding, March 31, 2020 1,339,489 $ 4.93 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Depreciation | $ 111,191 | $ 41,154 | |
Unrealized Gain (Loss) on Derivatives | 47,086,681 | (340,685) | |
Realized loss on derivatives | 0 | ||
Realized gain on derivatives | $ 3,334,128 | 0 | |
Percentage Of Accounts Receivables | 83.00% | 83.00% | |
Amortization expense | $ 13,682,996 | 12,929,054 | |
Depletion At The Rate Per Barrel | $ 13.81 | $ 14.72 | |
Maximum | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Minimum | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Sales Revenue, Net | Customer One | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration Risk, Percentage | 49.00% | ||
Concentration Risk, Percentage | 49.00% | ||
Sales Revenue, Net | Customer Two | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration Risk, Percentage | 29.00% | ||
Concentration Risk, Percentage | 29.00% | ||
Accounts Receivable | Customer One | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration Risk, Percentage | 48.00% | ||
Concentration Risk, Percentage | 48.00% | ||
Accounts Receivable | Customer Two | |||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration Risk, Percentage | 35.00% | ||
Concentration Risk, Percentage | 35.00% |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
REVENUE RECOGNITION | ||
Oil | $ 38,637,199 | $ 40,877,983 |
Natural gas | 933,129 | 920,332 |
Total operating revenues | $ 39,570,328 | $ 41,798,315 |
LEASES - Future lease payments
LEASES - Future lease payments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2019 | |
LEASES | ||
Lease, Practical Expedients, Package [true false] | true | |
Lease, Practical Expedient, Use of Hindsight [true false] | false | |
Lease term of financing leases for vehicles | 36 months | |
Operating lease payments | ||
2020 | $ 927,584 | |
2021 | 708,392 | |
Weighted average discount rate | 4.49% | |
Imputed interest | $ 57,982 | |
Financing lease payments | ||
2020 | 233,405 | |
2021 | 311,206 | |
2022 | $ 132,499 | |
Weighted average discount rate | 5.26% | |
Imputed interest | $ 38,159 |
LEASES - Supplemental informati
LEASES - Supplemental information regarding cash flows from operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
LEASES | ||
Operating lease costs | $ 309,195 | $ 128,175 |
Short term lease costs (1) | 851,949 | $ 153,759 |
Financing lease costs: | ||
Amortization of financing lease assets (2) | 71,853 | |
Interest on lease liabilities (3) | $ 8,822 |
EARNINGS PER SHARE INFORMATION
EARNINGS PER SHARE INFORMATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net Income | $ 43,804,118 | $ 4,269,260 |
Basic Weighted-Average Shares Outstanding | 67,993,797 | 63,229,710 |
Effect of dilutive securities: | ||
Diluted Weighted-Average Shares Outstanding | 67,997,092 | 63,992,549 |
Basic Income per Share | $ 0.64 | $ 0.07 |
Diluted Income per Share | $ 0.64 | $ 0.07 |
Restricted Stock | ||
Effect of dilutive securities: | ||
Weighted Average Number Diluted Shares Outstanding Adjustment | 3,295 | 172,741 |
Stock options | ||
Effect of dilutive securities: | ||
Weighted Average Number Diluted Shares Outstanding Adjustment | 590,098 |
EARNINGS PER SHARE INFORMATIO_2
EARNINGS PER SHARE INFORMATION - Additional information (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares were excluded from the computation of diluted earnings per share | 1,329,489 | 326,200 |
Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares were excluded from the computation of diluted earnings per share | 2,748,500 | 993,500 |
ACQUISITIONS - The fair values
ACQUISITIONS - The fair values of the assets acquired and the liabilities assumed (Details) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 25, 2019 |
Assets acquired | |||
Joint interest billing receivable | $ 0 | $ 1,464,394 | |
Prepaid assets | 0 | 2,864,554 | |
Liabilities assumed | |||
Draw on revolving line of credit | (15,000,000) | $ (15,000,000) | |
Accounts and revenues payable | 0 | (1,234,862) | |
Asset retirement obligation | $ 0 | (2,979,645) | |
Acquisition payable settled through equity | (28,356,396) | ||
Acquisition payable settled through cash payment | (256,877,766) | ||
Total Identifiable Net Assets | $ (300,119,721) |
ACQUISITIONS - The operations o
ACQUISITIONS - The operations of the Company as if the acquisition of assets (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / shares | |
ACQUISITIONS | |
Oil and Gas Revenues | $ | $ 48,463,729 |
Business Acquisition, Pro Forma Net Income (Loss) | $ | $ 11,379,247 |
Basic Earnings per Share | $ / shares | $ 0.17 |
Diluted Earnings per Share | $ / shares | $ 0.17 |
ACQUISITIONS - Additional infor
ACQUISITIONS - Additional information (Details) | Apr. 09, 2019ashares | Mar. 31, 2019USD ($) | Feb. 25, 2019USD ($) |
Business Acquisition [Line Items] | |||
Gas and Oil Area, Developed, Net | a | 38,230 | ||
Gas and Oil Area, Developed, Gross | a | 49,754 | ||
Business Combination, Acquisition Related Costs | $ | $ 3,500,000 | ||
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Current Liabilities Revolving Line Of Credit | $ | $ 15,000,000 | $ 15,000,000 | |
Wishbone Acquisition | |||
Business Acquisition [Line Items] | |||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 4,581,001 | ||
Average Working Interest | |||
Business Acquisition [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 77.00% | ||
Average Net Revenue Interest | |||
Business Acquisition [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 58.00% |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Details) | Mar. 31, 2020bbl$ / bbl |
Commodity Contract | |
Barrels per day | bbl | 1,000 |
Commodity Contract | Put Option | |
Put price | 50 |
Commodity Contract | Call Option | |
Call price | 65.83 |
Commodity Contract A | |
Barrels per day | bbl | 1,000 |
Commodity Contract A | Put Option | |
Put price | 50 |
Commodity Contract A | Call Option | |
Call price | 65.40 |
Commodity Contract B | |
Barrels per day | bbl | 1,000 |
Commodity Contract B | Put Option | |
Put price | 50 |
Commodity Contract B | Call Option | |
Call price | 58.40 |
Commodity Contract C | |
Barrels per day | bbl | 1,000 |
Commodity Contract C | Put Option | |
Put price | 50 |
Commodity Contract C | Call Option | |
Call price | 58.25 |
Commodity Contract D | |
Barrels per day | bbl | 1,500 |
Commodity Contract D | Put Option | |
Put price | 50 |
Commodity Contract D | Call Option | |
Call price | 58.65 |
Commodity Contract E | |
Barrels per day | bbl | 1,000 |
Commodity Contract E | Put Option | |
Put price | 45 |
Commodity Contract E | Call Option | |
Call price | 54.75 |
Commodity Contract F | |
Barrels per day | bbl | 1,000 |
Commodity Contract F | Put Option | |
Put price | 45 |
Commodity Contract F | Call Option | |
Call price | 52.71 |
Commodity Contract G | |
Barrels per day | bbl | 1,000 |
Commodity Contract G | Put Option | |
Put price | 40 |
Commodity Contract G | Call Option | |
Call price | 55.08 |
Commodity Contract H | |
Barrels per day | bbl | 1,500 |
Commodity Contract H | Put Option | |
Put price | 40 |
Commodity Contract H | Call Option | |
Call price | 55.35 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS (Details) | Mar. 31, 2020bbl |
January 2020 Through December 2020 | |
Number Of Barrels Per Day | 5,500 |
January 2021 Through December 2021 | |
Number Of Barrels Per Day | 4,500 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Oil and gas derivative (liabilities) | $ (340,685) | |
Oil and gas derivative assets | $ 47,420,730 | |
Total | 47,420,730 | (340,685) |
Fair Value, Inputs, Level 1 [Member] | ||
Oil and gas derivative (liabilities) | 0 | |
Total | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Oil and gas derivative (liabilities) | (340,685) | |
Oil and gas derivative assets | 47,420,730 | |
Total | $ 47,420,730 | (340,685) |
Fair Value, Inputs, Level 3 [Member] | ||
Oil and gas derivative (liabilities) | 0 | |
Total | $ 0 |
REVOLVING LINE OF CREDIT (Detai
REVOLVING LINE OF CREDIT (Details) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2020 | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 30, 2019USD ($) | |
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000,000 | |||
Line of Credit Facility, Current Borrowing Capacity | $ 425,000,000 | |||
Debt Instrument, Basis Spread on Variable Rate | 0.00% | |||
Long-term Line of Credit | $ 366,500,000 | $ 366,500,000 | ||
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |||
Leverage Ratio, Total | 1 | |||
Current Ratio | 1 | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||
Leverage Ratio, Total | 4 | |||
Federal Funds Purchased | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||
London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | |||
London Interbank Offered Rate (LIBOR) | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||
London Interbank Offered Rate (LIBOR) | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 2.75% |
ASSET RETIREMENT OBLIGATION (De
ASSET RETIREMENT OBLIGATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
ASSET RETIREMENT OBLIGATION | ||
Balance | $ 16,787,219 | |
Liabilities incurred | 66,387 | |
Liabilities settled | (293,212) | |
Accretion expense | 231,962 | $ 215,945 |
Balance | $ 16,792,356 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional information (Details) - Wishbone Partners, LLC - USD ($) | 1 Months Ended | |
Apr. 30, 2019 | Feb. 25, 2019 | |
Class of Stock [Line Items] | ||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 4,581,001 | |
Common Stock Held in Escrow | 2,538,071 | |
Business Acquisition, Share Price | $ 6.19 | |
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 28,356,396 |
EMPLOYEE STOCK OPTIONS AND RE_3
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Status of the Stock Options (Details) - Equity Option [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Outstanding at beginning of the year | 2,748,500 | 2,751,000 | |
Granted | 0 | 0 | |
Forfeited or rescinded | 0 | (2,500) | |
Options Vested | 0 | 0 | |
Options Outstanding at end of year | 2,748,500 | 2,748,500 | |
Options Exercisable at end of year | 2,506,700 | 2,323,400 | |
Weighted Average Exercise Price, Outstanding at beginning of the year | $ 6.28 | $ 6.28 | |
Weighted Average Exercise Price, Granted | 0 | 0 | |
Weighted Average Exercise Price, Forfeited or rescinded | 0 | 11.70 | |
Weighted Average Exercise Price, Vested | 0 | 0 | |
Weighted Average Exercise Price, Outstanding at end of year | 6.28 | 6.28 | |
Weighted Average Exercise Price, Exercisable at end of year | $ 5.78 | $ 5.42 | |
Options Outstanding - Weighted-Average Remaining Contractual Life (in years) | 3 years 8 months 12 days | 5 years 3 months 18 days | |
Options Exercisable - Weighted-Average Remaining Contractual Life (in years) | 3 years 4 months 24 days | 4 years 7 months 6 days | |
Aggregate Intrinsic Value | $ 0 | $ 3,366,300 |
EMPLOYEE STOCK OPTIONS AND RE_4
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Status of Restricted Stock Grants (Details) - Restricted Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock, Outstanding at beginning of the year | 1,341,889 | 878,360 |
Restricted stock, Granted | 0 | 0 |
Restricted stock, Forfeited or rescinded | (2,400) | (4,400) |
Restricted stock, Vested | 0 | 0 |
Restricted stock, Outstanding at end of year | 1,339,489 | 873,960 |
Weighted-Average Grant Date Fair Value, Outstanding at beginning of the year | $ 4.94 | $ 7.36 |
Weighted-Average Grant Date Fair Value, Granted | 0 | 0 |
Weighted-Average Grant Date Fair Value, Forfeited or rescinded | 4.78 | 7.53 |
Weighted-Average Grant Date Fair Value, Vested | 0 | 0 |
Weighted-Average Grant Date Fair Value, Outstanding at end of year | $ 4.93 | $ 7.36 |
EMPLOYEE STOCK OPTIONS AND RE_5
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2013 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation Expenses Charged Against Income For Share Based Awards Included In General And Administrative Expenses | $ 673,795 | $ 834,465 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,500,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 5,000,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 31,355 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ 0.66 | $ 5.87 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 575,402 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 3 months 18 days | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 3,905,640 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days |
CONTINGENCIES AND COMMITMENTS -
CONTINGENCIES AND COMMITMENTS - Additional Information - (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Loss Contingencies [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000,000 | |
Standby letters of credit drawn | 0 | $ 45,000,000 |
Standby Letters of Credit | ||
Loss Contingencies [Line Items] | ||
Standby letters of credit drawn | 0 | |
Surety Bond | ||
Loss Contingencies [Line Items] | ||
Issued surety bonds | $ 500,438 | |
Extended term for surety bonds (in years) | 1 year | |
Surety bonds renewal amount | $ 400,000 | |
Surety bonds renewal amount, not applicable | 100,438 | |
State And Federal Agencies | Standby Letters of Credit | ||
Loss Contingencies [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 260,000 | |
Extended term under letter of credit arrangement (in years) | 1 year | |
Electric Utility Companies | Standby Letters of Credit | ||
Loss Contingencies [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 741,000 | |
Debt Term (in years) | 1 year |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Apr. 13, 2020USD ($) | Apr. 09, 2020USD ($)a | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Subsequent Event [Line Items] | |||||
Proceeds from Lines of Credit | $ 0 | $ 45,000,000 | |||
Long-term Line of Credit | $ 366,500,000 | $ 366,500,000 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from Lines of Credit | $ 21,500,000 | ||||
Long-term Line of Credit | $ 388,000,000 | ||||
Subsequent Event | Texas | |||||
Subsequent Event [Line Items] | |||||
Number of acres | a | 20,000 | ||||
Subsequent Event | Delaware Basin asset | |||||
Subsequent Event [Line Items] | |||||
Sales price | $ 31,500,000 | ||||
Non-refundable deposit received | $ 500,000 | ||||
Number of days to close the transaction | 60 days |