Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Mar. 31, 2014 | 9-May-14 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'RED MOUNTAIN RESOURCES, INC. | ' |
Entity Central Index Key | '0001483496 | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Trading Symbol | 'rdmp | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Wel Known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Common Stock, Shares Outstanding | ' | 14,810,864 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $1,233 | $1,112 |
Accounts receivable - oil and natural gas sales | 3,081 | 3,522 |
Accounts receivable - joint interest | 1,293 | 2,604 |
Debt issuance costs | 230 | 230 |
Prepaid expenses and other current assets | 509 | 420 |
Commodities derivative asset - current | 96 | 190 |
Deferred tax asset - current | 428 | 299 |
Total current assets | 6,870 | 8,377 |
Long-Term Investments: | ' | ' |
Debentures - held to maturity | 4,820 | 4,279 |
Oil and Natural Gas Properties, Successful Efforts Method: | ' | ' |
Proved properties | 80,684 | 63,891 |
Unproved properties | 19,793 | 19,539 |
Other property and equipment | 1,199 | 1,026 |
Less accumulated depreciation, depletion and impairment | -16,684 | -9,324 |
Oil and natural gas properties, net | 84,992 | 75,132 |
Other Assets: | ' | ' |
Commodities derivative asset, net of current portion | ' | 75 |
Restricted cash, long-term | 465 | 452 |
Debt issuance costs, net of current portion | 1,541 | 450 |
Security deposit and other assets | 131 | 465 |
Total Assets | 98,819 | 89,230 |
Current Liabilities: | ' | ' |
Accounts payable | 6,473 | 9,354 |
Revenues payable | 1,329 | 774 |
Preferred dividend payable | 298 | ' |
Accrued expenses | 2,280 | 1,137 |
Stock issuance liability | 154 | ' |
Commodities derivative liability | 92 | 34 |
Convertible notes payable, net of discount of $0 and $442, respectively | ' | 3,308 |
Notes payable - current | ' | 500 |
Asset retirement obligation - current | 228 | 228 |
Environmental remediation liability- current | 1,400 | 1,400 |
Total current liabilities | 12,254 | 16,735 |
Long-Term Liabilities: | ' | ' |
Line of credit, net of current portion | 23,800 | 19,800 |
Mandatorily redeemable preferred stock, net of discount of $3,105 and $0, respectively | 8,812 | ' |
Environmental remediation liability, net of current portion | 677 | 688 |
Deferred tax liability - long-term | 428 | 299 |
Asset retirement obligation, net of current portion | 5,047 | 4,751 |
Total long-term liabilities | 38,764 | 25,538 |
Total Liabilities | 51,018 | 42,273 |
Commitments and Contingencies (Note 10) | ' | ' |
Stockholders' Equity: | ' | ' |
Common stock, $0.00001 par value; 50,000 shares authorized; 13,422 shares issued and 13,401 outstanding as of March 31, 2014; 12,692 shares issued and 12,596 shares outstanding as of May 31, 2013 | 1 | 1 |
Noncontrolling interest | 6,001 | 5,603 |
Additional paid-in capital | 72,077 | 65,536 |
Accumulated deficit | -30,278 | -24,183 |
Total stockholders' equity | 47,801 | 46,957 |
Total Liabilities and Stockholders' Equity | $98,819 | $89,230 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2014 | 31-May-13 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Discount on convertible notes payable, current liability | $0 | $442 |
Discount on mandatorily redeemable preferred stock | $3,105 | $0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized shares | 50,000 | 50,000 |
Common stock, issued shares | 13,422 | 12,692 |
Common stock, outstanding shares | 13,401 | 12,596 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Feb. 28, 2013 |
Revenue: | ' | ' | ' | ' |
Oil and natural gas sales | $5,270 | $2,463 | $15,511 | $4,917 |
Operating Expenses: | ' | ' | ' | ' |
Exploration expense | 515 | 22 | 943 | 53 |
Production taxes | 386 | 77 | 1,564 | 180 |
Lease operating expenses | 633 | 401 | 2,088 | 966 |
Natural gas transportation and marketing expenses | 43 | 18 | 117 | 77 |
Depreciation, depletion, amortization and impairment | 2,460 | 1,195 | 6,712 | 3,193 |
Accretion of discount on asset retirement obligation | 64 | 44 | 199 | 74 |
General and administrative expense | 1,993 | 2,106 | 5,852 | 6,205 |
Total operating expenses | 6,094 | 3,863 | 17,475 | 10,748 |
Loss from Operations | -824 | -1,400 | -1,964 | -5,831 |
Other Income (Expense): | ' | ' | ' | ' |
Change in fair value of derivative liability | ' | 90 | ' | 182 |
Unrealized loss on investment in Cross Border Resources, Inc. warrants | ' | -612 | ' | -1,304 |
Equity in earnings of Cross Border Resources, Inc. | ' | 99 | ' | -332 |
Gain on consolidation of Cross Border Resources, Inc. | ' | 736 | ' | 736 |
Interest income | ' | 29 | ' | 29 |
Interest expense | -902 | -873 | -2,717 | -2,310 |
Unrealized loss on debentures | ' | -455 | ' | -503 |
Impairment on note receivable | ' | -856 | ' | -856 |
Unrealized (loss) gain on commodity derivatives | -41 | 177 | -272 | 177 |
Realized (loss) gain on commodity derivatives | -23 | 17 | -74 | 17 |
Total Other Expense | -966 | -1,648 | -3,063 | -4,164 |
Loss Before Income Taxes | -1,790 | -3,048 | -5,027 | -9,995 |
Net loss | -1,790 | -3,048 | -5,027 | -9,995 |
Net income (loss) attributable to non-controlling interest | 194 | 344 | 437 | 344 |
Net loss attributable to Red Mountain Resources, Inc | ($1,984) | ($3,392) | ($5,464) | ($10,339) |
Basic and diluted net loss per common share | ($0.15) | ($0.33) | ($0.41) | ($1.10) |
Basic and diluted weighted average common shares outstanding | 13,422,000 | 10,347,000 | 13,237,000 | 9,380,000 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 |
Cash Flow From Operating Activities: | ' | ' |
Net loss | ($5,027) | ($9,995) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation, depletion, amortization and impairment | 6,712 | 3,193 |
Equity in earnings of Cross Border Resources, Inc. | ' | 332 |
Issuance of stock for services | ' | 229 |
Gain on consolidation of Cross Border | ' | -736 |
Amortization of debt issuance costs | 1,215 | 1,338 |
Accretion of discount on asset retirement obligation | 199 | 74 |
Change in fair value of warrant liability | ' | 1,304 |
Impairment on note receivable | ' | 856 |
Change in fair value of derivative liability | -18 | -182 |
Settlement of environmental liabilities | -11 | ' |
Dividend accrued for mandatorily redeemable preferred stock | 298 | ' |
Change in fair value of commodity derivatives | 146 | -177 |
Loss on debentures | ' | 503 |
Change in working capital: | ' | ' |
Accounts receivable - oil and natural gas sales | 1,592 | -208 |
Accounts receivable - other | 373 | -974 |
Accounts receivable - related party | ' | -245 |
Prepaid expenses and other assets | 550 | -530 |
Accounts payable | -2,653 | -1,603 |
Accounts payable - related party | ' | 21 |
Restricted cash | -13 | 25 |
Accrued expenses | 1,153 | 1,739 |
Net cash provided by (used in) operating activities | 4,516 | -5,036 |
Cash Flow From Investing Activities: | ' | ' |
Additions to oil and natural gas properties | -16,259 | -408 |
Acquisition of oil and natural gas properties | ' | 255 |
Net cash acquired in business combintation | ' | 279 |
Additions to other property and equipment | -153 | -250 |
Settlement of asset retirement obligations | ' | -54 |
Net cash used in investing activities | -16,412 | -178 |
Cash Flow From Financing Activities: | ' | ' |
Proceeds from issuance of common shares, net of issuance costs | 3,605 | 5,640 |
Proceeds from issuance of preferred stock, net of issuance costs | 7,068 | ' |
Exercise of warrants | ' | 150 |
Draws on line of credit | 9,000 | 11,150 |
Payments on line of credit | -5,000 | -3,187 |
Proceeds from notes payable | ' | 2,400 |
Payments on notes payable | -2,000 | -8,327 |
Net cash provided by financing activities | 12,673 | 7,826 |
Net change in cash and equivalents | 777 | 2,612 |
Cash at beginning of period | 456 | 168 |
Cash at end of period | 1,233 | 2,780 |
Supplemental Disclosure of Cash Flow Information | ' | ' |
Cash paid during the period for interest | 489 | 167 |
Non-Cash Transactions | ' | ' |
Change in asset retirement obligation estimate | 8 | 296 |
Issuance of shares for investment in Cross Border Resources, Inc. | ' | 15,739 |
Convertible notes payable derivative liability | ' | 300 |
Issuance of shares for debentures | 541 | 4,782 |
Issuance of shares for equipment | ' | 14 |
Issuance of shares for debt issuance costs | ' | 161 |
Issuance of stock accrued in stock issuance liability | ' | 68 |
Issuance of shares for services | ' | 229 |
Issuance of shares for acquisition of oil and gas properties | ' | 2,232 |
Issuance of shares to settle Cross Border Resources, Inc. bankruptcy claims | ' | 634 |
Issuance of shares for investment in Cross Border Resources, Inc. subordinated debt | ' | 1,744 |
Issuance of warrants with preferred stock | 2,395 | 212 |
Issuance of options | ' | 529 |
Issuance of warrants | ' | $334 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Share Subscription Receivable [Member] | Noncontrolling Interest [Member] | Total |
Balance, beginning at Dec. 31, 2011 | $869 | $30,548,000 | ($10,079,000) | ($150,000) | ' | $20,320,000 |
Balance, beginning, shares at Dec. 31, 2011 | 8,693 | ' | ' | ' | ' | ' |
Issuance of shares, net of offering costs | 116 | 7,290,000 | ' | -100,000 | ' | 7,190,000 |
Issuance of shares, net of offering costs, shares | 1,160 | ' | ' | ' | ' | ' |
Issuance of shares for investment in Cross Border Resources, Inc. | 157 | 15,236,000 | ' | ' | ' | 15,236,000 |
Issuance of shares for investment in Cross Border Resources, Inc., shares | 1,573 | ' | ' | ' | ' | ' |
Adjustment for consolidation of Cross Border Resources, Inc. | ' | ' | -1,902,000 | ' | 6,359,000 | 4,457,000 |
Acquisition of additional minority interest in Cross Border Resources, Inc. | 12 | 1,438,000 | ' | ' | -1,438,000 | ' |
Acquisition of additional minority interest in Cross Border Resources, Inc., shares | 117 | ' | ' | ' | ' | ' |
Issuance of shares for investment in Cross Border Resources, Inc. subordinated debt | 19 | 1,744,000 | ' | ' | ' | 1,744,000 |
Issuance of shares for investment in Cross Border Resources, Inc. subordinated debt, shares | 194 | ' | ' | ' | ' | ' |
Issuance of shares to settle Cross Border Resources, Inc. bankruptcy claims | 7 | 634,000 | ' | ' | ' | 634,000 |
Issuance of shares to settle Cross Border Resources, Inc. bankruptcy claims, shares | 75 | ' | ' | ' | ' | ' |
Issuance of warrants for investment in warrants of Cross Border Resources, Inc. | ' | 37,000 | ' | ' | ' | 37,000 |
Issuance of shares for acquisition of oil and gas properties | 24 | 2,232,000 | ' | ' | ' | 2,232,000 |
Issuance of shares for acquisition of oil and gas properties, shares | 238 | ' | ' | ' | ' | ' |
Issuance of shares for equipment | ' | 14,000 | ' | ' | ' | 14,000 |
Issuance of shares for equipment, shares | 1 | ' | ' | ' | ' | ' |
Issuance of shares for stock issuance liability | 1 | 68,000 | ' | ' | ' | 68,000 |
Issuance of shares for stock issuance liability, shares | 8 | ' | ' | ' | ' | ' |
Issuance of shares for debentures | 57 | 4,782,000 | ' | ' | ' | 4,782,000 |
Issuance of shares for debentures, shares | 570 | ' | ' | ' | ' | ' |
Issuance of shares for debt issuance costs | 1 | 161,000 | ' | ' | ' | 161,000 |
Issuance of shares for debt issuance costs, shares | 12 | ' | ' | ' | ' | ' |
Issuance of warrants for debt issuance costs | ' | 133,000 | ' | ' | ' | 133,000 |
Issuance of shares for services | 3 | 229,000 | ' | ' | ' | 229,000 |
Issuance of shares for services, shares | 26 | ' | ' | ' | ' | ' |
Issuance of shares to brokers | 3 | 212,000 | ' | ' | ' | 212,000 |
Issuance of shares to brokers, shares | 25 | ' | ' | ' | ' | ' |
Issuance of warrants to brokers | ' | 249,000 | ' | ' | ' | 249,000 |
Issuance of options | ' | 529,000 | ' | ' | ' | 529,000 |
Cash received for subscriptions receivable | ' | ' | ' | 250,000 | ' | 250,000 |
Net income (loss) | ' | ' | -12,202,000 | ' | 682,000 | -11,520,000 |
Balance, ending at May. 31, 2013 | 1,269 | 65,536,000 | -24,183,000 | ' | 5,603,000 | 46,957,000 |
Balance, ending, shares at May. 31, 2013 | 12,692 | ' | ' | ' | ' | 12,692 |
Net income (loss) | ' | ' | -631,000 | ' | -39,000 | -670,000 |
Balance, ending at Jun. 30, 2013 | 1,269 | 65,536,000 | -24,814,000 | ' | 5,564,000 | 46,287,000 |
Balance, beginning, shares at Jun. 30, 2013 | 12,692 | ' | ' | ' | ' | ' |
Issuance of shares, net of offering costs | 64 | 3,605,000 | ' | ' | ' | 3,605,000 |
Issuance of shares, net of offering costs, shares | 643 | ' | ' | ' | ' | ' |
Issuance of warrants with preferred stock | ' | 2,395,000 | ' | ' | ' | 2,395,000 |
Issuance of shares for debentures | 0.9 | 541,000 | ' | ' | ' | 541,000 |
Issuance of shares for debentures, shares | 87 | ' | ' | ' | ' | ' |
Net income (loss) | ' | ' | -5,464,000 | ' | 437,000 | -5,027,000 |
Balance, ending at Mar. 31, 2014 | $1,342 | $72,077,000 | ($30,278,000) | ' | $6,001,000 | $47,801,000 |
Balance, ending, shares at Mar. 31, 2014 | 13,422 | ' | ' | ' | ' | 13,422 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Aug. 31, 2013 | Mar. 31, 2014 | 31-May-13 |
Statement of Stockholders' Equity [Abstract] | ' | ' | ' |
Offering costs | $900 | $895 | $1,351 |
Organization
Organization | 9 Months Ended |
Mar. 31, 2014 | |
Organization | ' |
Organization | ' |
1. Organization | |
Red Mountain Resources, Inc. is a growth-oriented energy company engaged in the acquisition, development and exploration of oil and natural gas properties in established basins with demonstrable prolific producing zones. Currently, the Company has established acreage positions and production primarily in the Permian Basin of West Texas and Southeast New Mexico and the onshore Gulf Coast of Texas. The Company’s focus is to grow production and reserves by acquiring and developing an inventory of long-life, low risk drilling opportunities in and around producing oil and natural gas properties. Unless the context otherwise requires, the terms “Red Mountain” and “Company” refer to Red Mountain Resources, Inc. and its consolidated subsidiaries. |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2014 | |
Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | ' |
2. Significant Accounting Policies | |
Basis of Presentation | |
The condensed consolidated financial statements include the accounts of Red Mountain Resources, Inc. and its subsidiaries. The condensed consolidated financial statements and related footnotes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). | |
The Company has prepared the accompanying unaudited interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and in the opinion of management, such financial statements reflect all adjustments necessary to present fairly the consolidated financial position of the Company at March 31, 2014 and its results of operations and cash flows for the periods presented. The Company has omitted certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP pursuant to those rules and regulations, although the Company believes that the disclosures it has made are adequate to make the information presented not misleading. These unaudited interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes included in its most recent Annual Report on Form 10-K. | |
In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures. The results of operations for the interim periods are not necessarily indicative of the results the Company expects for the full fiscal year. The Company has not made any changes in its significant accounting policies from those disclosed in its most recent Annual Report on Form 10-K. | |
On July 17, 2013, the Company’s board of directors approved a change in the Company’s fiscal year end from May 31 to June 30, effective as of June 30, 2013. The change in the Company’s fiscal year end resulted in a one-month transition period that began on June 1, 2013 and ended on June 30, 2013. | |
As a result of this change, in the Condensed Consolidated Statements of Operations, the Company compares the three-month period ended March 31, 2014 with the previously reported three-month period ended February 28, 2013 and the nine-month period ended March 31, 2014 with the previously reported nine-month period ended February 28, 2013. Financial information for the three and nine months ended March 31, 2013 has not been included in this Quarterly Report on Form 10-Q for the following reasons: (i) the three and nine months ended February 28, 2013 provide a meaningful comparison for the three and nine months ended March 31, 2013; (ii) there are no significant factors, seasonal or other, that would impact the comparability of information if the results for the three and nine months ended March 31, 2013 were presented in lieu of results for the three and nine months ended February 28, 2013; and (iii) it was not practicable or cost justified to prepare this information. | |
Business Combinations | |
The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The | |
acquisition method requires that assets acquired and liabilities assumed including contingencies be recorded at their fair values as of the acquisition date. As of December 31, 2013, the Company has finalized the determination of the fair values of the assets acquired and liabilities assumed for Cross Border Resources, Inc. (“Cross Border”). | |
Investments in Non-Performing Debentures | |
The Company’s investments in non-performing debentures were initially recorded at cost which the Company believes was fair value. Management estimated cash flows expected to be collected considering the contractual terms of the loans, the nature and estimated fair value of collateral, and other factors it deemed appropriate. The estimated fair value of the loans at acquisition was significantly less than the contractual amounts due under the terms of the loan agreements. | |
Since, at the acquisition date, the Company expected to collect less than the contractual amounts due under the terms of the loans based, at least in part, on the assessment of the credit quality of the borrower, the loans are accounted for in accordance with ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). The difference between the contractually required payments on the loans as of the acquisition date and the total cash flows expected to be collected, or non-accretable difference, is not recognized and totaled $2.5 million and $1.1 million, plus accrued interest in arrears, as of March 31, 2014 and February 28, 2013, respectively. | |
Debentures are classified as non-accrual when management is unable to reasonably estimate the timing or amount of cash flows expected to be collected from the debentures or has serious doubts about further collectability of principal or interest. As of March 31, 2014 and May 31, 2013, all of the Company’s debentures were on non-accrual status since the borrower remains under the supervision of the bankruptcy court. | |
The Company periodically re-evaluates cash flows expected to be collected for each debenture based upon all available information as of the measurement date. Subsequent increases in cash flows expected to be collected are recognized prospectively through an adjustment to the debenture’s yield over its remaining life, which may result in a reclassification from non-accretable difference to accretable yield. Subsequent decreases in cash flows expected to be collected are evaluated to determine whether a provision for loan loss should be established. If decreases in expected cash flows result in a decrease in the estimated fair value of the debenture below its amortized cost, the debenture is deemed to be impaired, and the Company will record a provision for impairment to write the debenture down to its estimated fair value. The Company did not record any impairment on the debentures during the nine months ended March 31, 2014 and February 28, 2013. | |
The Company’s investments in non-performing debentures are classified as held to maturity because the Company has the intent and ability to hold them until maturity. | |
Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, an amendment to FASB Accounting Standards Codification Topic 740, Income Taxes (“ASU 2013-11”). ASU 2013-11 clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations where a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Retrospective application is permitted. The Company is currently evaluating the impact of ASU 2013-11 on its consolidated financial statements and financial statement disclosures. |
Oil_and_Natural_Gas_Properties
Oil and Natural Gas Properties and Other Property and Equipment | 9 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Oil And Natural Gas Properties And Other Property And Equipment | ' | |||||||
Oil and Natural Gas Properties and Other Property and Equipment | ' | |||||||
3. Oil and Natural Gas Properties and Other Property and Equipment | ||||||||
Oil and Natural Gas Properties | ||||||||
The following table sets forth the capitalized costs under the successful efforts method for oil and natural gas properties: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Oil and natural gas properties: | ||||||||
Proved | $ | 80,684 | $ | 63,891 | ||||
Unproved | 19,793 | 19,539 | ||||||
Total oil and natural gas properties | 100,477 | 83,430 | ||||||
Less accumulated depletion and impairment | (16,367 | ) | (9,140 | ) | ||||
Net oil and natural gas properties capitalized costs | $ | 84,110 | $ | 74,290 | ||||
At March 31, 2014 and May 31, 2013, the capitalized costs of the Company’s oil and natural gas properties included (i) $46.7 million and $39.2 million, respectively, relating to acquisition costs of proved properties which are being amortized by the unit-of-production method using total proved reserves and (ii) $28.8 million and $26.8 million, respectively, relating to additional development costs which are being amortized by the unit-of-production method using proved developed reserves. | ||||||||
During the three and nine months ended March 31, 2014 and February 28, 2013, the Company did not incur any significant exploratory drilling costs. The Company had no transfers of exploratory well costs to proved properties during the three and nine months ended March 31, 2014 and February 28, 2013. | ||||||||
The Company recorded no impairment during the three and nine months ended March 31, 2014. The Company recorded $0.4 million of impairment related to its unproved oil and natural gas properties for the three and nine months ended February 28, 2013 related to expiring acreage. | ||||||||
Capitalized costs related to proved oil and natural gas properties, including wells and related equipment and facilities, are evaluated for impairment based on the Company’s analysis of undiscounted future net cash flows. If | ||||||||
undiscounted future net cash flows are insufficient to recover the net capitalized costs related to proved properties, then the Company recognizes an impairment charge in income equal to the difference between the carrying value and the estimated fair value of the properties. Estimated fair values are determined using discounted cash flow models. The discounted cash flow models include management’s estimates of future oil and natural gas production, operating and development costs and discount rates. The Company did not record any impairment charges on its proved properties for the three and nine months ended March 31, 2014 and February 28, 2013. | ||||||||
Other Property and Equipment | ||||||||
The historical cost of other property and equipment, presented on a gross basis with accumulated depreciation and amortization is summarized as follows: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Other property and equipment | $ | 1,199 | $ | 1,026 | ||||
Less accumulated depreciation and amortization | (317 | ) | (184 | ) | ||||
Net property and equipment | $ | 882 | $ | 842 |
Asset_Retirement_Obligations
Asset Retirement Obligations | 9 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Asset Retirement Obligations | ' | |||||||
Asset Retirement Obligations | ' | |||||||
4. Asset Retirement Obligations | ||||||||
The following table summarizes the changes in the Company’s asset retirement obligations (“AROs”) for the nine months ended March 31, 2014 and the fiscal year ended May 31, 2013: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Asset retirement obligations at beginning of period | $ | 5,019 | $ | 836 | ||||
Liabilities incurred | 49 | 22 | ||||||
Liabilities settled | — | (53 | ) | |||||
Acquisitions | — | 3,728 | ||||||
Accretion expense | 199 | 150 | ||||||
Revisions in estimated liabilities | 8 | 296 | ||||||
Asset retirement obligations at end of period | 5,275 | 4,979 | ||||||
Less: current portion | 228 | 228 | ||||||
Long-term portion | $ | 5,047 | $ | 4,751 | ||||
During the nine months ended March 31, 2014 and the fiscal year ended May 31, 2013, the Company recorded an upward revision to previous estimates for its ARO primarily due to changes in the estimated future cash outlays. |
Derivatives
Derivatives | 9 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Derivatives | ' | |||||||||
Derivatives | ' | |||||||||
5. Derivatives | ||||||||||
At March 31, 2014, the Company had the following commodity derivatives positions outstanding: | ||||||||||
Commodity and Time Period | Contract | Volume Transacted | Contract Price | |||||||
Type | ||||||||||
Crude Oil | ||||||||||
April 1, 2014―August 31, 2014 | Collar - Minimum | Option | 1,437 Bbls/month | $80.00/Bbl | ||||||
April 1, 2014―August 31, 2014 | Collar - Maximum | Option | 1,437 Bbls/month | $100.50/Bbl | ||||||
April 1, 2014―November 30, 2014 | Swap | 2,000 Bbls/month | $93.50/Bbl | |||||||
April 1, 2014―November 30, 2014 | Put | 4,061 – 5,076 Bbls/month | $95.00/Bbl | |||||||
The following table summarizes the fair value of the Company’s open commodity derivatives as of March 31, 2014 and May 31, 2013: | ||||||||||
Balance Sheet Location | Fair Value | |||||||||
(in thousands) | March 31, | May 31, | ||||||||
2014 | 2013 | |||||||||
Derivatives not designated as hedging instruments | ||||||||||
Commodity derivatives | Commodities derivative asset | $ | 96 | $ | 265 | |||||
Commodity derivatives | Commodities derivative liability | $ | 92 | $ | 34 | |||||
The following tables summarize the change in the fair value of the Company’s commodity derivatives: | ||||||||||
Income Statement Location | Three Months Ended, | |||||||||
(in thousands) | March 31, | February 28, | ||||||||
2014 | 2013 | |||||||||
Derivatives not designated as hedging instruments | ||||||||||
Commodity derivatives | Realized (loss) gain on commodity derivatives | $ | (23 | ) | $ | 17 | ||||
Commodity derivatives | Unrealized (loss) gain on commodity derivatives | (41 | ) | 177 | ||||||
$ | (64 | ) | $ | 194 | ||||||
Income Statement Location | Nine Months Ended, | |||||||||
(in thousands) | March 31, | February 28, | ||||||||
2014 | 2013 | |||||||||
Derivatives not designated as hedging instruments | ||||||||||
Commodity derivatives | Realized (loss) gain on commodity derivatives | $ | (74 | ) | $ | 17 | ||||
Commodity derivatives | Unrealized (loss) gain on commodity derivatives | (272 | ) | 177 | ||||||
$ | (346 | ) | $ | 194 | ||||||
Unrealized gains and losses, at fair value, are included on the Company’s Condensed Consolidated Balance Sheets as current or non-current assets or liabilities based on the anticipated timing of cash settlements under the related contracts. Changes in the fair value of the Company’s commodity derivatives contracts are recorded in earnings as they occur and included in other income (expense) on the Company’s Condensed Consolidated Statements of Operations. Realized gains and losses are also included in other income (expense) on the Company’s Condensed Consolidated Statements of Operations. | ||||||||||
The Company estimates the fair values of swap contracts based on the present value of the difference in exchange-quoted forward price curves and contractual settlement prices multiplied by notional quantities. The Company internally valued the option contracts using industry-standard option pricing models and observable market inputs. The Company uses its internal valuations to determine the fair values of the contracts that are reflected on its Condensed Consolidated Balance Sheets. | ||||||||||
The Company is exposed to credit losses in the event of nonperformance by the counterparties on its commodity derivatives positions and has considered the exposure in its internal valuations. However, the Company does not anticipate nonperformance by the counterparties over the term of the commodity derivatives positions. | ||||||||||
In connection with the closing of the Senior First Lien Secured Credit Agreement (as amended, the “Credit Agreement”), the Company was required to enter into hedging agreements effectively hedging at least 50% of the oil volumes of the Company and its subsidiaries. At the same time, the Company entered into a Novation Agreement with BP Energy Company, LP (“BP Energy”) that transferred Cross Border’s then-existing swap agreements to the Company. Pursuant to an Inter-Borrower Agreement between the Company and Cross Border, the Company allocates these swap agreements back to Cross Border and may allocate future hedging agreements related to Cross Border’s production to Cross Border. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
6. Fair Value Measurements | ||||||||||||||
Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further prioritized into the following fair value input hierarchy: | ||||||||||||||
● | Level 1 - quoted prices for identical assets or liabilities in active markets. | |||||||||||||
● | Level 2 - quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means. | |||||||||||||
● | Level 3 - unobservable inputs for the asset or liability. | |||||||||||||
The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. | ||||||||||||||
The following table summarizes the valuation of the Company’s financial assets and liabilities at March 31, 2014 and May 31, 2013: | ||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||
(in thousands) | Quoted Prices in | Significant or | Significant | Fair Value at | ||||||||||
Active Markets for | Other | Unobservable | 31-Mar-14 | |||||||||||
Identical Assets or | Observable | Inputs (Level 3) | ||||||||||||
Liabilities (Level 1) | Inputs (Level 2) | |||||||||||||
Assets: | ||||||||||||||
Commodity derivatives | $ | — | $ | 96 | $ | — | $ | 96 | ||||||
2009A and 2009B Debentures of O&G Leasing, LLC (nonrecurring) | — | — | 4,820 | 4,820 | ||||||||||
Total | $ | — | $ | 96 | $ | 4,820 | $ | 4,916 | ||||||
Liabilities: | ||||||||||||||
Asset retirement obligations (non-recurring) | $ | — | $ | — | $ | (5,275 | ) | $ | (5,275 | ) | ||||
Commodity derivative | — | (92 | ) | — | (92 | ) | ||||||||
Environmental remediation liability | — | — | (2,077 | ) | (2,077 | ) | ||||||||
Total | $ | — | $ | (92 | ) | $ | (7,352 | ) | $ | (7,444 | ) | |||
Fair Value Measurements at Reporting Date Using | ||||||||||||||
(in thousands) | Quoted Prices in | Significant or | Significant | Fair Value at | ||||||||||
Active Markets for | Other | Unobservable | 31-May-13 | |||||||||||
Identical Assets or | Observable | Inputs (Level 3) | ||||||||||||
Liabilities (Level 1) | Inputs (Level 2) | |||||||||||||
Assets: | ||||||||||||||
Commodity derivatives | $ | — | $ | 265 | $ | — | $ | 265 | ||||||
Oil and gas properties impairment (nonrecurring) | — | — | (411 | ) | (411 | ) | ||||||||
2009A and 2009B Debentures of O&G Leasing, LLC (nonrecurring) | — | — | 4,279 | 4,279 | ||||||||||
Total | $ | — | $ | 265 | $ | 3,868 | $ | 4,133 | ||||||
Liabilities: | ||||||||||||||
Asset retirement obligations (non-recurring) | $ | — | $ | — | $ | (4,979 | ) | $ | (4,979 | ) | ||||
Commodity derivative | — | (34 | ) | — | (34 | ) | ||||||||
Environmental remediation liability | — | — | (2,088 | ) | (2,088 | ) | ||||||||
Total | $ | — | $ | (34 | ) | $ | (7,067 | ) | $ | (7,101 | ) | |||
The following is a summary of changes to fair value measurements using Level 3 inputs during the period ending March 31, 2014: | ||||||||||||||
(in thousands) | Environmental | 2009A and 2009B | ||||||||||||
Liability | Debentures | |||||||||||||
Balance, May 31, 2013 | $ | (2,088 | ) | $ | 4,279 | |||||||||
Acquisitions | — | 541 | ||||||||||||
Settlement of liabilities | 11 | — | ||||||||||||
Balance, March 31, 2014 | $ | (2,077 | ) | $ | 4,820 |
Debt
Debt | 9 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt | ' | |||||||
Debt | ' | |||||||
7. Debt | ||||||||
As of the dates indicated, the Company’s debt consisted of the following: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Credit Agreement | $ | 23,800 | $ | 19,800 | ||||
Subordinated Note | — | 500 | ||||||
Convertible notes payable, net of discount of $0 and $442, respectively | — | 3,308 | ||||||
Mandatorily redeemable preferred, net of discount of $3,105 and $0, respectively | 8,812 | — | ||||||
Total debt | 32,612 | 23,608 | ||||||
Less: short-term portion | — | 3,808 | ||||||
Long-term debt | $ | 32,612 | $ | 19,800 | ||||
Credit Facility | ||||||||
On February 5, 2013, the Company entered into the Credit Agreement with Cross Border, Black Rock Capital, Inc. and RMR Operating, LLC (the Company, Cross Border, Black Rock Capital, Inc. and RMR Operating, LLC, jointly and severally, the “Borrowers”) and Independent Bank, as Lender. The Credit Agreement provides for an up to $100.0 million revolving credit facility (as amended, the “Credit Facility”) with an initial commitment of $20.0 million and a maturity date of February 5, 2016. The borrowing base under the Credit Facility is determined at the discretion of the Lender based on, among other things, the Lender’s estimated value of the proved reserves attributable to the Borrowers’ oil and natural gas properties that have been mortgaged to the Lender, and is subject to regular redeterminations on September 30 and March 31 of each year, and interim redeterminations described in the Credit Agreement and potentially monthly commitment reductions, in each case which may reduce the amount of the borrowing base. As of March 31, 2014, the borrowing base and commitment were $30.0 million. As of March 31, 2014, the Company had $23.8 million outstanding under the Credit Facility and had availability of $6.2 million. | ||||||||
Amounts outstanding under the Credit Facility bear interest at a rate per annum equal to the greater of (x) the U.S. prime rate as published in The Wall Street Journal’s “Money Rates” table in effect from time to time and (y) 4.0%. Interest is payable monthly in arrears on the last day of each calendar month. As of March 31, 2014, the interest rate was 4%. Borrowings under the Credit Facility are secured by first priority liens on substantially all the property of each of the Borrowers and are unconditionally guaranteed by Doral West Corp. and Pure Energy Operating, Inc., each a subsidiary of Cross Border. | ||||||||
The Credit Agreement also contains financial covenants, measured as of the last day of each fiscal quarter of the Company. As of March 31, 2014, the Company was in compliance with these covenants. | ||||||||
Pursuant to the Credit Agreement, at least one of the Borrowers is required to have acceptable hedge agreements in place at all times effectively hedging at least 50% of the oil volumes of the Borrowers. Pursuant to the terms of the Credit Agreement, the Company has hedge agreements with various counterparties hedging a portion of the future oil production of the Borrowers. | ||||||||
Notes Payable | ||||||||
On February 6, 2013, the Company issued an Unsecured Subordinated Promissory Note (as amended, the “Subordinated Note”) in the aggregate principal amount of $500,000 payable to Hyman Belzberg, William Belzberg and Caddo Management, Inc. (the “Note Lender”). On July 30, 2013, the Company entered into Amendment No. 1 (the “Amendment”) to the Subordinated Note to extend the maturity date of the Subordinated Note from July 31, 2013 to August 31, 2013. The Subordinated Note accrued interest at a rate of 12% per annum, payable monthly. Upon an event of default, interest would accrue on all outstanding principal at a rate of the lesser of (i) 18% per annum or (ii) the maximum rate permitted by applicable law. | ||||||||
On August 28, 2013, the Company repaid the Subordinated Note with a portion of the proceeds from its common stock offering. | ||||||||
Convertible Promissory Notes | ||||||||
On November 25, 2011, the Company issued a $1.0 million convertible promissory note to Hohenplan Privatstiftung (the “2011 Hohenplan Note”), a $1.5 million convertible promissory note to Personalversorge der Autogrill Schweiz AG (the “Personalversorge Note”) and a $250,000 convertible promissory note to SST Advisors, Inc. (the “SST Note” and collectively with the 2011 Hohenplan Note and the Personalversorge Note, the “Convertible Notes”). On July 30, 2012, the Company issued a $1.0 million convertible promissory note (the “2012 Hohenplan Note”) to Hohenplan Privatstiftung. | ||||||||
In August 2013, the Company issued 100,002 Units in cancellation of the 2011 Hohenplan Note, the 2012 Hohenplan Note and the SST Note. In November 2013, the Company paid in full the Personalversorge Note with cash. Prior to cancellation of these notes, the Company expensed the unamortized beneficial conversion feature, debt issuance costs and discounts totaling $0.3 million to interest expense. | ||||||||
Mandatorily Redeemable Preferred Stock | ||||||||
The Company’s 10.0% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”) is mandatorily redeemable and is not convertible into shares of the Company’s common stock. The Company classifies the Series A Preferred Stock as a long-term liability, and the Company records dividends paid or accrued as interest expense in the Company’s Condensed Consolidated Statement of Operations. | ||||||||
In August 2013, the Company closed offerings of 476,687 Units (the “Units”), including 100,002 Units sold in cancellation of $2.3 million in debt under convertible notes payable to Hohenplan Privatstiftung and SST Advisors, Inc., raising net proceeds of $7.1 million. Each Unit consisted of one share of Series A Preferred Stock and one warrant to purchase up to 2.5 shares of common stock at a price of $22.50 per Unit. The warrants are exercisable until the earlier of (i) August 2016 or (ii) the first trading day that is at least 30 days after the date that the Company has provided notice to the holders of the warrants by filing a Current Report on Form 8-K stating that the common stock has (A) achieved a 20 trading day volume weighted average price of $15.00 per share or more and (B) traded, in the aggregate, 300,000 shares or more over the same 20 consecutive trading days for which the 20 trading day volume weighted average price was calculated; provided, that clause (ii) shall only be applicable so long as a warrant is exercisable for shares of common stock. The warrants have an exercise price of $10.00 per share. The warrants issued with the Series A Preferred Stock were valued at $2.4 million. The value of the warrants is treated as a discount to the Series A Preferred Stock and will be accreted over the life of the mandatorily redeemable preferred stock. Management determined the fair value using a probability weighted Black-Scholes option model with a volatility based on the historical closing price of common stock of industry peers and the closing price of the Company’s common stock on the OTCBB on the date of issuance. The volatility and remaining term was approximately 55% and three years, respectively. | ||||||||
The Series A Preferred Stock is mandatorily redeemable on July 15, 2018 at $25.00 per share, plus accrued and unpaid dividends to the redemption date, for a total redeemable value of $11.9 million. The difference between the $11.9 million redeemable value and the $10.8 million of gross proceeds and canceled debt is treated as a discount and will be accreted over the life of the Series A Preferred Stock. | ||||||||
For the three and nine months ended March 31, 2014, we recognized total interest expense of $0.6 million and $1.5 million, respectively, related to the Series A Preferred Stock, which includes accretion of discount and issuance cost of $0.3 million and $0.7 million for the three and nine months ended March 31, 2014, respectively. | ||||||||
Schedule of Future Debt Payments | ||||||||
The following is a schedule by fiscal year of future principal payments required under the Company’s outstanding debt as of March 31, 2014: | ||||||||
(in thousands) | ||||||||
Fiscal Years Ending June 30, | ||||||||
2015 | — | |||||||
2016 | 23,800 | |||||||
2017 | — | |||||||
2018 | — | |||||||
2019 | 11,917 | |||||||
Total | 35,717 | |||||||
Discount | (3,105 | ) | ||||||
Total, net value | $ | 32,612 |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Earnings Per Share | ' | |||||||||||||
8. Earnings Per Share | ||||||||||||||
The Company reports basic earnings per common share, which excludes the effect of potentially dilutive securities, and diluted earnings per common share, which includes the effect of all potentially dilutive securities unless their impact is anti-dilutive. The following are reconciliations of the numerators and denominators of basic and diluted earnings per share: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
(dollars in thousands, except per share amounts) | March 31, | February | March 31, | February | ||||||||||
2014 | 28, 2013 | 2014 | 28, 2013 | |||||||||||
Net loss (numerator): | ||||||||||||||
Net loss – basic | $ | (1,984 | ) | $ | (3,392 | ) | $ | (5,464 | ) | $ | (10,339 | ) | ||
Weighted average shares (denominator): | ||||||||||||||
Weighted average shares – basic | 13,422 | 10,347 | 13,237 | 9,380 | ||||||||||
Dilution effect of share-based compensation, treasury method(1) | — | — | — | — | ||||||||||
Weighted average shares – diluted | 13,422 | 10,347 | 13,237 | 9,380 | ||||||||||
Loss per share: | ||||||||||||||
Basic | $ | (0.15 | ) | $ | (0.33 | ) | $ | (0.41 | ) | $ | (1.10 | ) | ||
Diluted | $ | (0.15 | ) | $ | (0.33 | ) | $ | (0.41 | ) | $ | (1.10 | ) | ||
-1 | Warrants to purchase approximately 1,553,560, shares of the Company’s common stock were excluded from this calculation because they were anti-dilutive during the three and nine months ended March 31, 2014. Warrants to purchase approximately 86,100 shares of the Company’s common stock were excluded from this calculation because they were anti-dilutive during the three and nine months ended February 28, 2013. |
Equity
Equity | 9 Months Ended |
Mar. 31, 2014 | |
Equity [Abstract] | ' |
Equity | ' |
9. Equity | |
In August 2013, the Company closed a public offering of 642,857 shares of common stock, raising net cash proceeds of $3.6 million after issuance costs of $0.9 million. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments And Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
10. Commitments and Contingencies | |||||
Litigation | |||||
Cross Border, Cross Border’s former Chief Executive Officer, and Cross Border’s former Chief Operating Officer are party to a lawsuit with a former employee. On May 4, 2011, Clifton M. (Marty) Bloodworth initially filed a lawsuit in the State District Court of Midland County, Texas, against Doral West Corp. d/b/a Doral Energy Corp. (the predecessor entity of Cross Border) (“Doral Energy”) and Everett Willard Gray II, Cross Border’s former Chief Executive Officer. Mr. Bloodworth later amended his lawsuit to name Horace Patrick Seale, Cross Border’s former Chief Operating Officer, as an additional defendant. Mr. Bloodworth generally alleges that Mr. Gray and Mr. Seale, as agents of Cross Border, made false representations which induced Mr. Bloodworth to enter into an employment contract that was subsequently breached by Cross Border. The claims that Mr. Bloodworth has alleged are: breach of his employment agreement with Doral Energy, fraud in the inducement and common law fraud, civil conspiracy, breach of fiduciary duty, and violation of the Texas Deceptive Trade Practices Act. Mr. Bloodworth is seeking damages of approximately $280,000. Mr. Gray, Mr. Seale and Cross Border deny that Mr. Bloodworth’s claims have any merit. | |||||
Cross Border was previously party to an engagement letter, dated February 7, 2012 (the “Engagement Letter”), with KeyBanc Capital Markets Inc. (“KeyBanc”) pursuant to which KeyBanc was to act as exclusive financial advisor to Cross Border’s Board of Directors in connection with a possible “Transaction” (as defined in the Engagement Letter). The Engagement Letter was formally terminated by Cross Border on August 21, 2012. The Engagement Letter provided that KeyBanc would be entitled to a fee upon consummation of a Transaction within a certain period of time following termination of the Engagement Letter. On May 16, 2013, KeyBanc delivered an invoice to Cross Border in the amount of $751,334, representing amounts purportedly owed by Cross Border to KeyBanc as a result of the consummation of a purported Transaction that KeyBanc asserts had been consummated within the required time period and its out-of-pocket expenses in connection therewith. Cross Border disputes that any Transaction was consummated and that KeyBanc is entitled to any out-of-pocket expenses. The matter was originally filed by Cross Border in the 44th-B Judicial District Court for the State of Texas, Dallas County but was subsequently removed to the United States District Court for the Northern District of Texas, Dallas Division, where KeyBanc filed a counterclaim against Cross Border. Cross Border and KeyBanc have each filed motions for summary judgment, requesting the Court to rule in their respective favors. Cross Border intends to vigorously defend the action. | |||||
In addition to the foregoing, in the ordinary course of business, the Company is periodically a party to various litigation matters that it does not believe will have a material adverse effect on its results of operations or financial condition. | |||||
Environmental issues | |||||
The Company is subject to federal and state laws and regulations relating to the protection of the environment. Environmental risk is inherent in all oil and natural gas operations, and the Company could be subject to environmental cleanup and enforcement actions. The Company manages this environmental risk through appropriate environmental policies and practices to minimize the impact to the Company. | |||||
As of March 31, 2014 and May 31, 2013, the Company had approximately $2.1 million in environmental remediation liabilities related to Cross Border’s operated Tom Tom and Tomahawk fields located in Chaves and Roosevelt counties in New Mexico. In February 2013, the Bureau of Land Management (“BLM”) accepted Cross Border’s remediation plan for the Tom Tom and Tomahawk fields. Cross Border is working in conjunction with the BLM to initiate remediation on a site-by-site basis. This is management’s best estimate of the costs of remediation and restoration with respect to these environmental matters, although the ultimate cost could differ materially. Inherent uncertainties exist in these estimates due to unknown conditions, changing governmental regulation, and legal standards regarding liability, and emerging remediation technologies for handling site remediation and restoration. Cross Border has incurred $11,000 in costs and expects to incur the remaining expenditures expenditures over an eighteen month period beginning in April 2014. | |||||
Leases | |||||
As of March 31, 2014, the Company rented various office spaces in Dallas, Texas; Midland, Texas; and Lafayette, Louisiana under non-cancelable lease agreements. In the aggregate, these leases cover approximately 16,884 square feet at a cost of approximately $24,000 per month and have remaining lease terms ranging from 1 month to 30 months. The following is a schedule by year of future minimum rental payments required under these lease arrangements as of March 31, 2014: | |||||
(in thousands) | |||||
Fiscal Years Ending June 30, | |||||
2014 | $ | 63 | |||
2015 | 206 | ||||
2016 | 181 | ||||
2017 | 45 | ||||
2018 | — | ||||
Total | $ | 495 | |||
Rent expense under the Company’s lease arrangements amounted to approximately $67,000 and $76,000 for the three months ended March 31, 2014 and February 28, 2013 respectively. Rent expense under the Company’s lease arrangements amounted to approximately $200,000 and $225,000 for the nine months ended March 31, 2014 and February 28, 2013 respectively. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
11. Related Party Transactions | |
The Company entered into a drilling consulting agreement with R.K. Ford and Associates, and a contract for drilling services with Western Drilling on the Company’s Madera 24-2H, Madera 25-2H, and Madera 19-4H wells. At the time, each of these entities were owned or partially owned by Randell K. Ford, a then-current director of the Company. Mr. Ford passed away in December 2013. During the three months ended March 31, 2014 and February 28, 2013, these entities provided the Company with an aggregate of approximately $1.3 million and $48,000, respectively, of services, of which $0.3 million and $0, respectively, remained unpaid at the end of the respective periods. During the nine months ended March 31, 2014 and February 28, 2013, these entities provided the Company with an aggregate of approximately $3.2 million and $63,000, respectively, of services, of which $0.3 million and $33,000, respectively, remained unpaid at the end of the respective periods. | |
In addition, the Company was a party to a lease agreement with R.K. Ford and Associates, pursuant to which the Company leases office space in Midland, Texas. During the three months ended March 31, 2014 and February 28, 2013, the Company paid approximately $0 and $6,000, respectively, to R.K. Ford and Associates pursuant to the lease agreement. During the nine months ended March 31, 2014 and February 28, 2013, the Company paid approximately $2,000 and $19,000, respectively, to R.K. Ford and Associates pursuant to the lease agreement. The lease agreement expired in July 2013. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
12. Subsequent Events | |
The Company agreed to exchange 222,224 shares of its 10.0% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”) for 1,388,898 shares of common stock effective as of April 1, 2014. After the exchange, the Company had 254,463 shares of Series A Preferred Stock outstanding with an aggregate redemption amount of $6.4 million. | |
On April 22, 2014 the Company withdrew $3.0 million under the Credit Facility. As of May 9, 2014, the Company had 26.8 million outstanding under the Credit Facility and had availability of 3.2 million. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2014 | |
Summary Of Significant Accounting Policies Policies | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The condensed consolidated financial statements include the accounts of Red Mountain Resources, Inc. and its subsidiaries. The condensed consolidated financial statements and related footnotes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). | |
The Company has prepared the accompanying unaudited interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and in the opinion of management, such financial statements reflect all adjustments necessary to present fairly the consolidated financial position of the Company at March 31, 2014 and its results of operations and cash flows for the periods presented. The Company has omitted certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP pursuant to those rules and regulations, although the Company believes that the disclosures it has made are adequate to make the information presented not misleading. These unaudited interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes included in its most recent Annual Report on Form 10-K. | |
In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures. The results of operations for the interim periods are not necessarily indicative of the results the Company expects for the full fiscal year. The Company has not made any changes in its significant accounting policies from those disclosed in its most recent Annual Report on Form 10-K. | |
On July 17, 2013, the Company’s board of directors approved a change in the Company’s fiscal year end from May 31 to June 30, effective as of June 30, 2013. The change in the Company’s fiscal year end resulted in a one-month transition period that began on June 1, 2013 and ended on June 30, 2013. | |
As a result of this change, in the Condensed Consolidated Statements of Operations, the Company compares the three-month period ended March 31, 2014 with the previously reported three-month period ended February 28, 2013 and the nine-month period ended March 31, 2014 with the previously reported nine-month period ended February 28, 2013. Financial information for the three and nine months ended March 31, 2013 has not been included in this Quarterly Report on Form 10-Q for the following reasons: (i) the three and nine months ended February 28, 2013 provide a meaningful comparison for the three and nine months ended March 31, 2013; (ii) there are no significant factors, seasonal or other, that would impact the comparability of information if the results for the three and nine months ended March 31, 2013 were presented in lieu of results for the three and nine months ended February 28, 2013; and (iii) it was not practicable or cost justified to prepare this information. | |
Business Combinations | ' |
Business Combinations | |
The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). The | |
acquisition method requires that assets acquired and liabilities assumed including contingencies be recorded at their fair values as of the acquisition date. As of December 31, 2013, the Company has finalized the determination of the fair values of the assets acquired and liabilities assumed for Cross Border Resources, Inc. (“Cross Border”). | |
Investments In Non-performing Debentures | ' |
Investments in Non-Performing Debentures | |
The Company’s investments in non-performing debentures were initially recorded at cost which the Company believes was fair value. Management estimated cash flows expected to be collected considering the contractual terms of the loans, the nature and estimated fair value of collateral, and other factors it deemed appropriate. The estimated fair value of the loans at acquisition was significantly less than the contractual amounts due under the terms of the loan agreements. | |
Since, at the acquisition date, the Company expected to collect less than the contractual amounts due under the terms of the loans based, at least in part, on the assessment of the credit quality of the borrower, the loans are accounted for in accordance with ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”). The difference between the contractually required payments on the loans as of the acquisition date and the total cash flows expected to be collected, or non-accretable difference, is not recognized and totaled $2.5 million and $1.1 million, plus accrued interest in arrears, as of March 31, 2014 and February 28, 2013, respectively. | |
Debentures are classified as non-accrual when management is unable to reasonably estimate the timing or amount of cash flows expected to be collected from the debentures or has serious doubts about further collectability of principal or interest. As of March 31, 2014 and May 31, 2013, all of the Company’s debentures were on non-accrual status since the borrower remains under the supervision of the bankruptcy court. | |
The Company periodically re-evaluates cash flows expected to be collected for each debenture based upon all available information as of the measurement date. Subsequent increases in cash flows expected to be collected are recognized prospectively through an adjustment to the debenture’s yield over its remaining life, which may result in a reclassification from non-accretable difference to accretable yield. Subsequent decreases in cash flows expected to be collected are evaluated to determine whether a provision for loan loss should be established. If decreases in expected cash flows result in a decrease in the estimated fair value of the debenture below its amortized cost, the debenture is deemed to be impaired, and the Company will record a provision for impairment to write the debenture down to its estimated fair value. The Company did not record any impairment on the debentures during the nine months ended March 31, 2014 and February 28, 2013. | |
The Company’s investments in non-performing debentures are classified as held to maturity because the Company has the intent and ability to hold them until maturity. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, an amendment to FASB Accounting Standards Codification Topic 740, Income Taxes (“ASU 2013-11”). ASU 2013-11 clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations where a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Retrospective application is permitted. The Company is currently evaluating the impact of ASU 2013-11 on its consolidated financial statements and financial statement disclosures. |
Oil_and_Natural_Gas_Properties1
Oil and Natural Gas Properties and Other Property and Equipment (Tables) | 9 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Oil And Natural Gas Properties And Other Property And Equipment Tables | ' | |||||||
Schedule of Capitalized Costs Relating to Oil and Gas Producing Activities | ' | |||||||
The following table sets forth the capitalized costs under the successful efforts method for oil and natural gas properties: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Oil and natural gas properties: | ||||||||
Proved | $ | 80,684 | $ | 63,891 | ||||
Unproved | 19,793 | 19,539 | ||||||
Total oil and natural gas properties | 100,477 | 83,430 | ||||||
Less accumulated depletion and impairment | (16,367 | ) | (9,140 | ) | ||||
Net oil and natural gas properties capitalized costs | $ | 84,110 | $ | 74,290 | ||||
Schedule of Property, Plant and Equipment | ' | |||||||
The historical cost of other property and equipment, presented on a gross basis with accumulated depreciation and amortization is summarized as follows: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Other property and equipment | $ | 1,199 | $ | 1,026 | ||||
Less accumulated depreciation and amortization | (317 | ) | (184 | ) | ||||
Net property and equipment | $ | 882 | $ | 842 |
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 9 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Asset Retirement Obligations Tables | ' | |||||||
Schedule Of Changes in Asset Retirement Obligation | ' | |||||||
The following table summarizes the changes in the Company’s asset retirement obligations (“AROs”) for the nine months ended March 31, 2014 and the fiscal year ended May 31, 2013: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Asset retirement obligations at beginning of period | $ | 5,019 | $ | 836 | ||||
Liabilities incurred | 49 | 22 | ||||||
Liabilities settled | — | (53 | ) | |||||
Acquisitions | — | 3,728 | ||||||
Accretion expense | 199 | 150 | ||||||
Revisions in estimated liabilities | 8 | 296 | ||||||
Asset retirement obligations at end of period | 5,275 | 4,979 | ||||||
Less: current portion | 228 | 228 | ||||||
Long-term portion | $ | 5,047 | $ | 4,751 |
Derivatives_Tables
Derivatives (Tables) | 9 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Derivatives Tables | ' | |||||||||
Schedule of commodity derivative positions | ' | |||||||||
At March 31, 2014, the Company had the following commodity derivatives positions outstanding: | ||||||||||
Commodity and Time Period | Contract | Volume Transacted | Contract Price | |||||||
Type | ||||||||||
Crude Oil | ||||||||||
April 1, 2014―August 31, 2014 | Collar - Minimum | Option | 1,437 Bbls/month | $80.00/Bbl | ||||||
April 1, 2014―August 31, 2014 | Collar - Maximum | Option | 1,437 Bbls/month | $100.50/Bbl | ||||||
April 1, 2014―November 30, 2014 | Swap | 2,000 Bbls/month | $93.50/Bbl | |||||||
April 1, 2014―November 30, 2014 | Put | 4,061 – 5,076 Bbls/month | $95.00/Bbl | |||||||
Schedule of fair value of open commodity derivatives | ' | |||||||||
The following table summarizes the fair value of the Company’s open commodity derivatives as of March 31, 2014 and May 31, 2013: | ||||||||||
Balance Sheet Location | Fair Value | |||||||||
(in thousands) | March 31, | May 31, | ||||||||
2014 | 2013 | |||||||||
Derivatives not designated as hedging instruments | ||||||||||
Commodity derivatives | Commodities derivative asset | $ | 96 | $ | 265 | |||||
Commodity derivatives | Commodities derivative liability | $ | 92 | $ | 34 | |||||
Schedule of change in fair value of commodity derivatives | ' | |||||||||
The following tables summarize the change in the fair value of the Company’s commodity derivatives: | ||||||||||
Income Statement Location | Three Months Ended, | |||||||||
(in thousands) | March 31, | February 28, | ||||||||
2014 | 2013 | |||||||||
Derivatives not designated as hedging instruments | ||||||||||
Commodity derivatives | Realized (loss) gain on commodity derivatives | $ | (23 | ) | $ | 17 | ||||
Commodity derivatives | Unrealized (loss) gain on commodity derivatives | (41 | ) | 177 | ||||||
$ | (64 | ) | $ | 194 | ||||||
Income Statement Location | Nine Months Ended, | |||||||||
(in thousands) | March 31, | February 28, | ||||||||
2014 | 2013 | |||||||||
Derivatives not designated as hedging instruments | ||||||||||
Commodity derivatives | Realized (loss) gain on commodity derivatives | $ | (74 | ) | $ | 17 | ||||
Commodity derivatives | Unrealized (loss) gain on commodity derivatives | (272 | ) | 177 | ||||||
$ | (346 | ) | $ | 194 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value Measurements Tables | ' | |||||||||||||
Summary of the valuation of the Company's financial assets and liabilities | ' | |||||||||||||
The following table summarizes the valuation of the Company’s financial assets and liabilities at March 31, 2014 and May 31, 2013: | ||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||
(in thousands) | Quoted Prices in | Significant or | Significant | Fair Value at | ||||||||||
Active Markets for | Other | Unobservable | 31-Mar-14 | |||||||||||
Identical Assets or | Observable | Inputs (Level 3) | ||||||||||||
Liabilities (Level 1) | Inputs (Level 2) | |||||||||||||
Assets: | ||||||||||||||
Commodity derivatives | $ | — | $ | 96 | $ | — | $ | 96 | ||||||
2009A and 2009B Debentures of O&G Leasing, LLC (nonrecurring) | — | — | 4,820 | 4,820 | ||||||||||
Total | $ | — | $ | 96 | $ | 4,820 | $ | 4,916 | ||||||
Liabilities: | ||||||||||||||
Asset retirement obligations (non-recurring) | $ | — | $ | — | $ | (5,275 | ) | $ | (5,275 | ) | ||||
Commodity derivative | — | (92 | ) | — | (92 | ) | ||||||||
Environmental remediation liability | — | — | (2,077 | ) | (2,077 | ) | ||||||||
Total | $ | — | $ | (92 | ) | $ | (7,352 | ) | $ | (7,444 | ) | |||
Fair Value Measurements at Reporting Date Using | ||||||||||||||
(in thousands) | Quoted Prices in | Significant or | Significant | Fair Value at | ||||||||||
Active Markets for | Other | Unobservable | 31-May-13 | |||||||||||
Identical Assets or | Observable | Inputs (Level 3) | ||||||||||||
Liabilities (Level 1) | Inputs (Level 2) | |||||||||||||
Assets: | ||||||||||||||
Commodity derivatives | $ | — | $ | 265 | $ | — | $ | 265 | ||||||
Oil and gas properties impairment (nonrecurring) | — | — | (411 | ) | (411 | ) | ||||||||
2009A and 2009B Debentures of O&G Leasing, LLC (nonrecurring) | — | — | 4,279 | 4,279 | ||||||||||
Total | $ | — | $ | 265 | $ | 3,868 | $ | 4,133 | ||||||
Liabilities: | ||||||||||||||
Asset retirement obligations (non-recurring) | $ | — | $ | — | $ | (4,979 | ) | $ | (4,979 | ) | ||||
Commodity derivative | — | (34 | ) | — | (34 | ) | ||||||||
Environmental remediation liability | — | — | (2,088 | ) | (2,088 | ) | ||||||||
Total | $ | — | $ | (34 | ) | $ | (7,067 | ) | $ | (7,101 | ) | |||
Summary of changes to fair value measurements using Level 3 inputs | ' | |||||||||||||
The following is a summary of changes to fair value measurements using Level 3 inputs during the period ending March 31, 2014: | ||||||||||||||
(in thousands) | Environmental | 2009A and 2009B | ||||||||||||
Liability | Debentures | |||||||||||||
Balance, May 31, 2013 | $ | (2,088 | ) | $ | 4,279 | |||||||||
Acquisitions | — | 541 | ||||||||||||
Settlement of liabilities | 11 | — | ||||||||||||
Balance, March 31, 2014 | $ | (2,077 | ) | $ | 4,820 |
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Tables | ' | |||||||
Schedule of debt | ' | |||||||
As of the dates indicated, the Company’s debt consisted of the following: | ||||||||
(in thousands) | March 31, | May 31, | ||||||
2014 | 2013 | |||||||
Credit Agreement | $ | 23,800 | $ | 19,800 | ||||
Subordinated Note | — | 500 | ||||||
Convertible notes payable, net of discount of $0 and $442, respectively | — | 3,308 | ||||||
Mandatorily redeemable preferred, net of discount of $3,105 and $0, respectively | 8,812 | — | ||||||
Total debt | 32,612 | 23,608 | ||||||
Less: short-term portion | — | 3,808 | ||||||
Long-term debt | $ | 32,612 | $ | 19,800 | ||||
Schedule by fiscal year of future principal payments of debt | ' | |||||||
The following is a schedule by fiscal year of future principal payments required under the Company’s outstanding debt as of March 31, 2014: | ||||||||
(in thousands) | ||||||||
Fiscal Years Ending June 30, | ||||||||
2015 | — | |||||||
2016 | 23,800 | |||||||
2017 | — | |||||||
2018 | — | |||||||
2019 | 11,917 | |||||||
Total | 35,717 | |||||||
Discount | (3,105 | ) | ||||||
Total, net value | $ | 32,612 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Earnings Per Share Tables | ' | |||||||||||||
Schedule of reconciliations of the numerators and denominators of basic and diluted earnings per share | ' | |||||||||||||
The following are reconciliations of the numerators and denominators of basic and diluted earnings per share: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
(dollars in thousands, except per share amounts) | March 31, | February | March 31, | February | ||||||||||
2014 | 28, 2013 | 2014 | 28, 2013 | |||||||||||
Net loss (numerator): | ||||||||||||||
Net loss – basic | $ | (1,984 | ) | $ | (3,392 | ) | $ | (5,464 | ) | $ | (10,339 | ) | ||
Weighted average shares (denominator): | ||||||||||||||
Weighted average shares – basic | 13,422 | 10,347 | 13,237 | 9,380 | ||||||||||
Dilution effect of share-based compensation, treasury method(1) | — | — | — | — | ||||||||||
Weighted average shares – diluted | 13,422 | 10,347 | 13,237 | 9,380 | ||||||||||
Loss per share: | ||||||||||||||
Basic | $ | (0.15 | ) | $ | (0.33 | ) | $ | (0.41 | ) | $ | (1.10 | ) | ||
Diluted | $ | (0.15 | ) | $ | (0.33 | ) | $ | (0.41 | ) | $ | (1.10 | ) | ||
-1 | Warrants to purchase approximately 1,553,560, shares of the Company’s common stock were excluded from this calculation because they were anti-dilutive during the three and nine months ended March 31, 2014. Warrants to purchase approximately 86,100 shares of the Company’s common stock were excluded from this calculation because they were anti-dilutive during the three and nine months ended February 28, 2013. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments And Contingencies Tables | ' | ||||
Schedule of future minimum rental payments | ' | ||||
The following is a schedule by year of future minimum rental payments required under these lease arrangements as of March 31, 2014: | |||||
(in thousands) | |||||
Fiscal Years Ending June 30, | |||||
2014 | $ | 63 | |||
2015 | 206 | ||||
2016 | 181 | ||||
2017 | 45 | ||||
2018 | — | ||||
Total | $ | 495 |
Significant_Accounting_Policie1
Significant Accounting Policies (Details Narrative) (USD $) | Mar. 31, 2014 | Feb. 28, 2013 |
In Thousands, unless otherwise specified | ||
Significant Accounting Policies Details Narrative | ' | ' |
Non-accretable difference of debentures | $2,500 | $1,100 |
Oil_and_Natural_Gas_Properties2
Oil and Natural Gas Properties and Other Property and Equipment (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2013 | Feb. 28, 2013 | Mar. 31, 2014 | 31-May-13 |
Oil And Natural Gas Properties And Other Property And Equipment Details Narrative | ' | ' | ' | ' |
Acquisition costs of proved properties | ' | ' | $46,700 | $39,200 |
Exploratory well costs and additional development costs | ' | ' | 28,800 | 26,800 |
Impairment of Oil and Gas Properties | $400 | $400 | ' | ' |
Oil_and_Natural_Gas_Properties3
Oil and Natural Gas Properties and Other Property and Equipment (Details) (USD $) | Mar. 31, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Oil and natural gas properties: | ' | ' |
Proved | $80,684 | $63,891 |
Unproved | 19,793 | 19,539 |
Total oil and natural gas properties | 100,477 | 83,430 |
Less accumulated depletion and impairment | -16,367 | -9,140 |
Net oil and natural gas properties capitalized costs | $84,110 | $74,290 |
Oil_and_Natural_Gas_Properties4
Oil and Natural Gas Properties and Other Property and Equipment (Details 1) (USD $) | Mar. 31, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Oil And Natural Gas Properties And Other Property And Equipment Details 1 | ' | ' |
Other property and equipment | $1,199 | $1,026 |
Less accumulated depreciation and amortization | -317 | -184 |
Net property and equipment | $882 | $842 |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 | 31-May-13 |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ' | ' | ' |
Asset retirement obligations at beginning of period | $5,019 | $836 | $836 |
Liabilities incurred | 49 | ' | 22 |
Liabilities settled | ' | -54 | -53 |
Acquisitions | ' | ' | 3,728 |
Accretion expense | 199 | 74 | 150 |
Revisions in estimated liabilities | 8 | ' | 296 |
Asset retirement obligations at end of period | 5,275 | ' | 4,979 |
Less: current portion | 228 | ' | 228 |
Long-term portion | $5,047 | ' | $4,751 |
Derivatives_Details
Derivatives (Details) | 9 Months Ended |
Mar. 31, 2014 | |
Crude Oil Contract 1 [Member] | ' |
Derivative Time Period | 'April 1, 2014 - August 31, 2014 |
Type | 'Option |
Volume transacted | '1,437 Bbls/month |
Contract Price | 80 |
Volume transacted - lower | 1,437 |
Crude Oil Contract 2 [Member] | ' |
Derivative Time Period | 'April 1, 2014 - August 31, 2014 |
Type | 'Option |
Volume transacted | '1,437 Bbls/month |
Contract Price | 100.5 |
Volume transacted - lower | 1,437 |
Crude Oil Contract 3 [Member] | ' |
Derivative Time Period | 'April 1, 2014 - November 30, 2014 |
Type | 'Swap |
Volume transacted | '2,000 Bbls/month |
Contract Price | 93.5 |
Volume transacted - lower | 2,000 |
Crude Oil Contract 4 [Member] | ' |
Derivative Time Period | 'April 1, 2014 - November 30, 2014 |
Type | 'Put |
Volume transacted | '4,061-5,076 Bbls/month |
Contract Price | 95 |
Volume transacted - lower | 4,061 |
Volume transacted - higher | 5,076 |
Derivatives_Details_1
Derivatives (Details 1) (USD $) | Mar. 31, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Derivatives Details 1 | ' | ' |
Commodity derivative asset - fair value | $96 | $265 |
Commodity derivative liability - fair value | $92 | $34 |
Derivatives_Details_2
Derivatives (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Feb. 28, 2013 |
Derivatives Details 2 | ' | ' | ' | ' |
Realized (loss) gain on commodity derivatives | ($23) | $17 | ($74) | $17 |
Unrealized (loss) gain on commodity derivatives | -41 | 177 | -272 | 177 |
Change in fair value of derivative liability | ($64) | $194 | ($146) | $177 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 | 31-May-13 | 31-May-12 |
In Thousands, unless otherwise specified | ||||
Assets | ' | ' | ' | ' |
Commodities derivatives | $96 | ' | $190 | ' |
Liabilities | ' | ' | ' | ' |
Asset retirement obligations (non-recurring) | -5,275 | -5,019 | -4,979 | -836 |
Commodity derivative | -92 | ' | -34 | ' |
Environmental remediation liability | -677 | ' | -688 | ' |
Fair Value [Member] | ' | ' | ' | ' |
Assets | ' | ' | ' | ' |
Commodities derivatives | 96 | ' | 265 | ' |
Oil and gas properties impairment (nonrecurring) | ' | ' | -411 | ' |
2009A and 2209B Debentures of O&G Leasing, LLC (nonrecurring) | 4,820 | ' | 4,279 | ' |
Total | 4,916 | ' | 4,133 | ' |
Liabilities | ' | ' | ' | ' |
Asset retirement obligations (non-recurring) | -5,275 | ' | -4,979 | ' |
Commodity derivative | -92 | ' | -34 | ' |
Environmental remediation liability | -2,077 | ' | -2,088 | ' |
Total | -7,444 | ' | -7,101 | ' |
Fair Value, Inputs, Level 2 [Member] | ' | ' | ' | ' |
Assets | ' | ' | ' | ' |
Commodities derivatives | 96 | ' | 265 | ' |
Total | 96 | ' | 265 | ' |
Liabilities | ' | ' | ' | ' |
Commodity derivative | -92 | ' | -34 | ' |
Total | -92 | ' | -34 | ' |
Fair Value, Inputs, Level 3 [Member] | ' | ' | ' | ' |
Assets | ' | ' | ' | ' |
Oil and gas properties impairment (nonrecurring) | ' | ' | -411 | ' |
2009A and 2209B Debentures of O&G Leasing, LLC (nonrecurring) | 4,820 | ' | 4,279 | ' |
Total | 4,820 | ' | 3,868 | ' |
Liabilities | ' | ' | ' | ' |
Asset retirement obligations (non-recurring) | -5,275 | ' | -4,979 | ' |
Environmental remediation liability | -2,077 | ' | -2,088 | ' |
Total | ($7,352) | ' | ($7,067) | ' |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
2009A Debentures & 2009B Debentures [Member] | ' |
Assets | ' |
Balance, beginning | $4,279 |
Acquisitions | 541 |
Balance, ending | 4,820 |
Environmental Liability [Member] | ' |
Liabilities | ' |
Balance, beginning | -2,088 |
Settlement of liabilities | 11 |
Balance, ending | ($2,077) |
Debt_Details_Narrative
Debt (Details Narrative) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Feb. 05, 2013 |
Lines of Credit (Credit facility and secured line) | ' | ' |
Maximum borrowing capacity under line of credit | $100,000 | ' |
Current borrowing base of line of credit | 30,000 | 20,000 |
Line of credit outstanding amount borrowed | 23,800 | ' |
Line of credit, remaining capacity | $6,200 | ' |
Interest rate description of line of credit | 'Amounts outstanding under the Credit Facility will bear interest at a rate per annum equal to the greater of (x) the U.S. prime rate as published in The Wall Street Journal's "Money Rates" table in effect from time to time and (y) 4.0%. | ' |
Spread on bank's reference rate | 4.00% | ' |
Interest rate of line of credit at period end | 4.00% | ' |
Percentage of oil volume required to be effectively hedged | 50.00% | ' |
Debt_Details_Narrative_1
Debt (Details Narrative 1) (USD $) | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Nov. 25, 2011 | Aug. 31, 2013 | Jul. 30, 2013 | 6-May-13 | Nov. 25, 2011 | Nov. 25, 2011 | Nov. 25, 2011 | Jul. 30, 2012 |
Units | Units | Subordinated Debt [Member] | Subordinated Debt [Member] | Note - Hohenplan 2011 [Member] | Note - Personalversorge [Member] | Note - SST [Member] | Notes - Hohenplan 2012 [Member] | ||
Notes Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt face amount | ' | ' | ' | ' | $500 | $1,000 | $1,500 | $250 | $1,000 |
Interest rate | ' | ' | ' | 18.00% | 12.00% | ' | ' | ' | ' |
Maturity date | ' | ' | ' | 31-Aug-13 | 31-Jul-13 | ' | ' | ' | ' |
Beneficial conversion feature expensed as interest | ' | $300 | ' | ' | ' | ' | ' | ' | ' |
Units issued in period in cancellation of debt | 100,002 | ' | 100,002 | ' | ' | ' | ' | ' | ' |
Debt_Details_Narrative_2
Debt (Details Narrative 2) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Feb. 28, 2013 |
Units | Units | |||||
Units sold in period | 476,687 | ' | ' | ' | ' | ' |
Units sold in cancellation of convertible debt | 100,002 | 100,002 | ' | ' | ' | ' |
Amount of debt canceled | $2,300 | ' | ' | ' | ' | ' |
Proceeds from units sold, net | 7,100 | ' | ' | ' | ' | ' |
Number of shares, per unit | 1 | ' | ' | ' | ' | ' |
Number of warrants, per unit | 1 | ' | ' | ' | ' | ' |
Number of shares, per warrant | 2.5 | 2.5 | ' | ' | ' | ' |
Exercise price, warrants | 10 | 10 | ' | ' | ' | ' |
Exercise price, units | 22.5 | 22.5 | ' | ' | ' | ' |
Trading day volume | '20 days | ' | ' | ' | ' | ' |
Weighted average stock price per share | $15 | ' | ' | ' | ' | ' |
Aggregate number of shares traded | 300,000 | ' | ' | ' | ' | ' |
Warrant value | 2,400 | 2,400 | ' | ' | ' | ' |
Volatility used for fair vaue | 55.00% | ' | ' | ' | ' | ' |
Term used for fair vaue | '3 years | ' | ' | ' | ' | ' |
Accretion of discount and amortization of issuance costs | ' | ' | 64 | 44 | 199 | 74 |
Series A Preferred Stock [Member] | ' | ' | ' | ' | ' | ' |
Series A preferred stock, redemption price per share | ' | ' | $25 | ' | $25 | ' |
Series A preferred stock, redemption value | ' | ' | 11,900 | ' | 11,900 | ' |
Preferred stock gross proceeds and canceled debt amount | ' | ' | 10,800 | ' | 10,800 | ' |
Interest expense, preferred stock | ' | ' | 600 | ' | 1,500 | ' |
Accretion of discount and amortization of issuance costs | ' | ' | $300 | ' | $700 | ' |
Debt_Details
Debt (Details) (USD $) | Mar. 31, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Debt Details | ' | ' |
Credit Facility | $23,800 | $19,800 |
Subordinated Note | ' | 500 |
Convertible notes payable, net of discount of $0 and $442, respectively | ' | 3,308 |
Mandatorily redeemable preferred, net of discount of $3,105 and $0, respectively | 8,812 | ' |
Total debt | 32,612 | 23,608 |
Less: current portion | ' | 3,808 |
Long-term portion | $32,612 | $19,800 |
Debt_Details_1
Debt (Details 1) (USD $) | Mar. 31, 2014 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Debt Maturing in Fiscal Year Ending June 30, | ' | ' |
2016 | $23,800 | ' |
2019 | 11,917 | ' |
Total | 35,717 | ' |
Discount | -3,105 | ' |
Total debt | $32,612 | $23,608 |
Earnings_Per_Share_Details_Nar
Earnings Per Share (Details Narrative) (Warrants [Member]) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Feb. 28, 2013 | |
Warrants [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,553,560 | 86,100 | 1,553,560 | 86,100 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Feb. 28, 2013 |
Net loss (numerator): | ' | ' | ' | ' |
Net loss - basic | ($1,984) | ($3,392) | ($5,464) | ($10,339) |
Weighted average shares (denominator): | ' | ' | ' | ' |
Weighted average shares - basic | 13,422,000 | 10,347,000 | 13,237,000 | 9,380,000 |
Weighted average shares - diluted | 13,422,000 | 10,347,000 | 13,237,000 | 9,380,000 |
Loss per share: | ' | ' | ' | ' |
Basic | ($0.15) | ($0.33) | ($0.41) | ($1.10) |
Diluted | ($0.15) | ($0.33) | ($0.41) | ($1.10) |
Equity_Details_Narrative
Equity (Details Narrative) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 17 Months Ended |
In Thousands, except Share data, unless otherwise specified | Aug. 31, 2013 | Mar. 31, 2014 | 31-May-13 | 31-May-13 |
Equity Details Narrative | ' | ' | ' | ' |
Shares issued in period (in shares) | 642,857 | ' | ' | ' |
Net proceeds of share issuance | $3,600 | $3,605 | ' | $7,190 |
Common stock issuance costs | $900 | $895 | $1,351 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Feb. 28, 2013 |
sqft | ||||
Commitments And Contingencies Details Narrative | ' | ' | ' | ' |
Lawsuit, damages sought | ' | ' | $280 | ' |
KeyBank Invoice value sought as damages | ' | ' | 751 | ' |
Environmental remediation liabilities related to Cross Border | 2,100 | ' | 2,100 | ' |
Settlement of environmental liabilities | ' | ' | 11 | ' |
Number of square feet covered in rentals | ' | ' | 16,884 | ' |
Monthly rental payment | ' | ' | 24 | ' |
Rent expense | $67 | $76 | $200 | $225 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Future minimum rental payments in fiscal years ending June 30, | ' |
2014 | $63 |
2015 | 206 |
2016 | 181 |
2017 | 45 |
Total | $495 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (R.K. Ford and Associates, Inc. [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 | Mar. 31, 2014 | Feb. 28, 2013 |
R.K. Ford and Associates, Inc. [Member] | ' | ' | ' | ' |
Engineering, drilling and completion services | $1,300 | $48 | $3,200 | $63 |
Engineering, drilling and completion services - unpaid | 300 | 0 | 300 | 33 |
Lease payments | $0 | $6 | $2 | $19 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 9 Months Ended | 0 Months Ended | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Feb. 28, 2013 | Apr. 22, 2014 | 9-May-14 | Mar. 31, 2014 | Mar. 31, 2014 |
Subsequent event [Member] | Subsequent event [Member] | Subsequent event [Member] | Subsequent event [Member] | |||
Common Stock [Member] | Series A Preferred Stock [Member] | |||||
Conversion of stock transaction | ' | ' | ' | ' | 1,388,898 | -222,224 |
Preferred Stock Outstanding | ' | ' | ' | ' | ' | 254,463 |
Redeemable value of preferred stock | ' | ' | ' | ' | ' | $6,400 |
Draws on line of credit | 9,000 | 11,150 | 3,000 | ' | ' | ' |
Line of credit outstanding amount borrowed | 23,800 | ' | ' | 26,800 | ' | ' |
Line of credit, remaining capacity | $6,200 | ' | ' | $3,200 | ' | ' |