Yuma Energy (YUMAQ) 10-Q 16 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 16, 2019
Document And Entity Information
Entity Registrant Name	Yuma Energy, Inc.
Entity Central Index Key	0001672326
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,551,989
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash	$ 967,915	$ 1,634,492
Accounts receivable, net of allowance for doubtful accounts:
Trade	3,137,013	3,183,806
Other	104,365	195,774
Commodity derivative instruments	0	751,158
Prepayments	987,106	1,152,126
Other current assets	256,261	256,261
Total current assets	5,452,660	7,173,617
OIL AND GAS PROPERTIES (full cost method):
Oil and gas properties - subject to amortization	504,260,484	504,139,740
Oil and gas properties - not subject to amortization	0	0
Subtotal	504,260,484	504,139,740
Less: accumulated depreciation, depletion, amortization and impairment	(450,996,357)	(436,642,215)
Net oil and gas properties	53,264,127	67,497,525
OTHER PROPERTY AND EQUIPMENT:
Assets held for sale	0	1,691,588
Other property and equipment	1,793,252	1,793,397
Total	1,793,252	3,484,985
Less: accumulated depreciation and amortization	(1,443,543)	(1,355,639)
Net other property and equipment	349,709	2,129,346
OTHER ASSETS AND DEFERRED CHARGES:
Commodity derivative instruments	0	13,028
Deposits	497,592	467,592
Operating right-of-use leases	3,896,955	0
Other noncurrent assets	79,997	79,997
Total other assets and deferred charges	4,474,544	560,617
TOTAL ASSETS	63,541,040	77,361,105
CURRENT LIABILITIES:
Current maturities of debt	33,890,030	34,742,953
Accounts payable	8,758,660	8,008,017
Asset retirement obligations	128,539	128,539
Current operating lease liabilities	838,418	0
Other accrued liabilities	2,827,183	1,275,473
Total current liabilities	46,442,830	44,154,982
LONG-TERM DEBT	0	0
OTHER NONCURRENT LIABILITIES:
Asset retirement obligations	11,394,989	11,143,320
Long-term lease liability	3,297,355	0
Deferred rent	0	250,891
Employee stock awards	0	40,153
Total other noncurrent liabilities	14,692,344	11,434,364
COMMITMENTS AND CONTINGENCIES (Notes 2 and 15)
EQUITY:
Series D convertible preferred stock ($0.001 par value, 7,000,000 authorized, 2,112,710 issued and outstanding as of June 30, 2019 with a liquidation preference of $23.4 million, and 2,041,240 issued and outstanding as of December 31, 2018)	2,113	2,041
Common stock ($0.001 par value, 100,000,000 authorized, 1,551,989 outstanding as of June 30, 2019 and 1,558,772 outstanding as of December 31, 2018)	1,552	1,559
Additional paid-in capital	58,322,612	58,470,831
Treasury stock at cost (26,516 shares as of June 30, 2019 and 25,368 shares as of December 31, 2018)	(441,044)	(439,099)
Accumulated deficit	(55,479,367)	(36,263,573)
Total stockholders' equity	2,405,866	21,771,759
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 63,541,040	$ 77,361,105

CONSOLIDATED BALANCE SHEETS (_2

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	7,000,000	7,000,000
Preferred stock, issued	2,112,710	2,041,240
Preferred stock, outstanding	2,112,710	2,041,240
Preferred stock, liquidation preference	$ 23,400,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	100,000,000	100,000,000
Common stock, outstanding	1,551,989	1,558,772
Treasury stock	26,516	25,368

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
REVENUES:
Sales of natural gas and crude oil	$ 1,669,416	$ 5,822,577	$ 5,648,093	$ 11,468,113
EXPENSES:
Lease operating and production costs	2,003,196	2,795,825	4,294,513	5,421,593
General and administrative expense	1,482,271	1,651,858	2,900,301	3,697,390
Depreciation, depletion and amortization	684,988	2,245,170	2,624,700	4,462,491
Asset retirement obligation accretion expense	114,549	140,161	251,669	283,101
Impairment of oil and gas properties	371,086	0	11,817,345	0
Impairment of long lived assets	0	176,968	0	176,968
Bad debt expense	0	261,659	0	327,467
Total expenses	4,656,090	7,271,641	21,888,528	14,369,010
LOSS FROM OPERATIONS	(2,986,674)	(1,449,064)	(16,240,435)	(2,900,897)
OTHER INCOME (EXPENSE):
Net losses from commodity derivatives	0	(2,095,570)	(1,840,683)	(3,346,830)
Interest expense	(578,537)	(567,635)	(1,134,805)	(1,033,927)
Other, net	119	81,884	129	78,348
Total other expense	(578,418)	(2,581,321)	(2,975,359)	(4,302,409)
LOSS BEFORE INCOME TAXES	(3,565,092)	(4,030,385)	(19,215,794)	(7,203,306)
Income tax expense - deferred	0	0	0	0
NET LOSS	(3,565,092)	(4,030,385)	(19,215,794)	(7,203,306)
PREFERRED STOCK:
Dividends paid in kind	401,304	374,416	791,467	738,433
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (3,966,396)	$ (4,404,801)	$ (20,007,261)	$ (7,941,739)
LOSS PER COMMON SHARE:
Basic	$ (2.55)	$ (2.86)	$ (12.87)	$ (5.19)
Diluted	$ (2.55)	$ (2.86)	$ (12.87)	$ (5.19)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic	1,552,549	1,538,822	1,554,120	1,529,898
Diluted	1,552,549	1,538,822	1,554,120	1,529,898

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($)	Preferred Stock	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2017	1,904,391	1,520,167
Beginning balance, amount at Dec. 31, 2017	$ 1,904	$ 1,520	$ 55,085,827	$ (25,278)	$ (19,193,301)	$ 35,870,672
Net loss					(7,203,306)	(7,203,306)
Payment of Series D dividends in kind, shares	66,681
Payment of Series D dividends in kind, amount	$ 67		738,366		(738,433)	0
Stock awards vested, shares		64,138
Stock awards vested, amount		$ 64	(64)			0
Restricted stock awards forfeited, shares		(942)
Restricted stock awards forfeited, amount		$ (1)	1			0
Restricted stock awards repurchased, shares		(24,448)
Restricted stock awards repurchased, amount		$ (24)	24			0
Stock-based compensation			1,502,064			1,502,064
Treasury stock (surrendered to settle employee tax liabilities)				(413,612)		(413,612)
Ending balance, shares at Jun. 30, 2018	1,971,072	1,558,914
Ending balance, amount at Jun. 30, 2018	$ 1,971	$ 1,559	57,326,218	(438,890)	(27,135,040)	29,755,818
Beginning balance, shares at Mar. 31, 2018	1,937,262	1,558,061
Beginning balance, amount at Mar. 31, 2018	$ 1,937	$ 1,558	56,750,150	(434,557)	(22,730,239)	33,588,849
Net loss					(4,030,385)	(4,030,385)
Payment of Series D dividends in kind, shares	33,810
Payment of Series D dividends in kind, amount	$ 34		374,382		(374,416)
Stock awards vested, shares		2,076
Stock awards vested, amount		$ 2	(2)
Restricted stock awards forfeited, shares		(501)
Restricted stock awards repurchased, shares		(722)
Restricted stock awards repurchased, amount		$ (1)	1
Stock-based compensation			201,687			201,687
Treasury stock (surrendered to settle employee tax liabilities)				(4,333)		(4,333)
Ending balance, shares at Jun. 30, 2018	1,971,072	1,558,914
Ending balance, amount at Jun. 30, 2018	$ 1,971	$ 1,559	57,326,218	(438,890)	(27,135,040)	29,755,818
Beginning balance, shares at Dec. 31, 2018	2,041,240	1,558,772
Beginning balance, amount at Dec. 31, 2018	$ 2,041	$ 1,559	58,470,831	(439,099)	(36,263,573)	21,771,759
Net loss					(19,215,794)	(19,215,794)
Payment of Series D dividends in kind, shares	71,470
Payment of Series D dividends in kind, amount	$ 72		(72)			0
Restricted stock awards forfeited, shares		(5,636)
Restricted stock awards forfeited, amount		$ (6)	6			0
Restricted stock awards repurchased, shares		(1,147)
Restricted stock awards repurchased, amount		$ (1)				(1)
Stock-based compensation			(148,153)			(148,153)
Treasury stock (surrendered to settle employee tax liabilities)				(1,945)		(1,945)
Ending balance, shares at Jun. 30, 2019	2,112,710	1,551,989
Ending balance, amount at Jun. 30, 2019	$ 2,113	$ 1,552	58,322,612	(441,044)	(55,479,367)	2,405,866
Beginning balance, shares at Mar. 31, 2019	2,076,472	1,553,594
Beginning balance, amount at Mar. 31, 2019	$ 2,076	$ 1,554	58,349,733	(441,044)	(51,914,275)	5,998,044
Net loss					(3,565,092)	(3,565,092)
Payment of Series D dividends in kind, shares	36,238
Payment of Series D dividends in kind, amount	$ 37		(37)
Restricted stock awards forfeited, shares		(1,605)
Restricted stock awards forfeited, amount		$ (2)	2
Stock-based compensation			(27,086)			(27,086)
Ending balance, shares at Jun. 30, 2019	2,112,710	1,551,989
Ending balance, amount at Jun. 30, 2019	$ 2,113	$ 1,552	$ 58,322,612	$ (441,044)	$ (55,479,367)	$ 2,405,866

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Reconciliation of net loss to net cash provided by operating activities:
Net loss	$ (19,215,794)	$ (7,203,306)
Depreciation, depletion and amortization of property and equipment	2,624,700	4,462,491
Impairment of long lived assets	0	176,968
Amortization of debt issuance costs	0	260,803
Deferred rent liability, net	0	25,668
Stock-based compensation expense	(148,153)	360,524
Settlement of asset retirement obligations	0	(575,817)
Asset retirement obligation accretion expense	251,669	283,101
Impairment of oil and gas properties	11,817,345	0
Bad debt expense	0	327,467
Net loss from commodity derivatives	1,840,683	3,346,830
(Gain) loss on write-off of liabilities net of assets	0	(103,045)
Amortization of operating right of use lease	333,402	0
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	138,202	1,339,227
(Increase) decrease in prepaids, deposits and other assets	135,020	297,321
(Decrease) increase in accounts payable and other current and non-current liabilities	2,158,963	65,487
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	(63,963)	3,063,719
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for oil and gas properties	(308,464)	(6,928,684)
Proceeds from sale of oil and gas properties	1,691,588	1,000,000
Proceeds from sale of other fixed assets	0	0
Derivative settlements	(46,357)	(1,189,211)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	1,336,767	(7,117,895)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings on senior credit facility	0	14,300,000
Repayment of borrowings on senior credit facility	(1,194,482)	(7,000,000)
Repayments of borrowings - insurance financing	(742,953)	(556,898)
Net proceeds (expenses) from common stock offering	0	(64,050)
Cash paid for repurchase of restricted stock	(1)	0
Treasury stock repurchases	(1,945)	(413,612)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(1,939,381)	6,265,440
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(666,577)	2,211,264
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,634,492	137,363
CASH AND CASH EQUIVALENTS AT END OF PERIOD	967,915	2,348,627
Supplemental disclosure of cash flow information:
Interest payments (net of interest capitalized)	1,134,806	773,150
Interest capitalized	0	133,772
Supplemental disclosure of significant non-cash activity:
Change in capital expenditures financed by accounts payable	$ 187,864	$ 3,252,112

1. ORGANIZATION AND BASIS OF PR

1. ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	Organization Yuma Energy, Inc., a Delaware corporation (“Yuma” and collectively with its subsidiaries, the “Company”), is an independent Houston-based exploration and production company focused on acquiring, developing and exploring for conventional and unconventional oil and natural gas resources. Historically, the Company’s operations have focused on onshore properties located in central and southern Louisiana and southeastern Texas where it has a long history of drilling, developing and producing both oil and natural gas assets. The Company also has acreage in the Permian Basin of West Texas (Yoakum County, Texas), with the potential for additional oil and natural gas reserves. Finally, the Company has non-operated positions in the East Texas Woodbine and had operated positions in Kern County, California, which were sold in April 2019. Reverse Stock Split Yuma filed a Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Yuma with the Secretary of State of the State of Delaware, pursuant to which, effective on July 3, 2019, Yuma effected a one-for-fifteen reverse split of its issued and outstanding shares of common stock (the “Reverse Stock Split”). The number of authorized shares of common stock did not change from 100,000,000. The Company’s authorized shares of Preferred Stock did not change from 20,000,000. All share and per share information in these financial statements retroactively reflect this reverse stock split. Basis of Presentation The accompanying unaudited consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared in accordance with Article 8-03 of Regulation S-X for interim financial statements required to be filed with the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for the fair presentation of the Company’s Consolidated Balance Sheet as of June 30, 2019; the Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018; the Consolidated Statement of Changes in Stockholders’ Equity for the three and six months ended June 30, 2019 and 2018; and the Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018. The Company’s Consolidated Balance Sheet at December 31, 2018 is derived from the audited consolidated financial statements of the Company at that date. The preparation of financial statements in conformity with the generally accepted accounting principles of the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. For further information, see Note 1 in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Interim period results are not necessarily indicative of results of operations or cash flows for the full year and accordingly, certain information normally included in financial statements and the accompanying notes prepared in accordance with GAAP has been condensed or omitted. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company has evaluated events or transactions through the date of issuance of these unaudited consolidated financial statements. When required for comparability, reclassifications are made to the prior period financial statements to conform to the current year presentation. The consolidated financial statements have been prepared on a going concern basis; however, see Note 2 – Liquidity and Going Concern for additional information. Recently Issued Accounting Pronouncements The accounting standard-setting organizations frequently issue new or revised accounting rules. The Company regularly reviews new pronouncements to determine their impact, if any, on the financial statements. Accounting Pronouncement Recently Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification (“ASU 2016-02”). In January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 (“ASU 2018-01”). In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). Together, these related amendments to GAAP represent ASC Topic 842, Leases (“ASC Topic 842”). ASC Topic 842 requires an entity to recognize an asset and lease liability for all qualifying leases. Classification of leases as either a finance or operating lease determines the recognition, measurement and presentation of expenses. This accounting standards update also requires certain quantitative and qualitative disclosures about leasing arrangements. The new standard was effective for the Company in the first quarter of 2019 and the Company adopted the new standard using a modified retrospective approach, with the date of initial application on January 1, 2019. Consequently, upon transition, the Company recognized an asset and a lease liability with no retained earnings impact. The Company is applying the following practical expedients as provided in ASC Topic 842 which provide elections to: ● not apply the recognition requirements to short-term leases (a lease that at commencement date has a lease term of 12 months or less and does not contain a purchase option); ● not reassess whether a contract contains a lease, lease classification and initial direct costs; and ● not reassess certain land easements in existence prior to January 1, 2019. Through the Company’s implementation process, it evaluated each of its lease arrangements and enhanced its systems to track and calculate additional information required upon adoption of this standards update. The Company’s adoption did not have a material impact on its consolidated balance sheet as of January 1, 2019, with the primary impact relating to the recognition of assets and operating lease liabilities for operating leases which represented less than a 5% change to total assets and total liabilities at the time of adoption. Adoption of the new standard did not materially impact the Company’s consolidated statements of operations or stockholders’ equity. Leases acquired to explore for or use minerals, oil or natural gas resources, including the right to explore for those natural resources and rights to use the land in which those natural resources are contained, are not within the scope of the standards update (see Note 15 – Commitments and Contingencies).

2. LIQUIDITY AND GOING CONCERN

2. LIQUIDITY AND GOING CONCERN	6 Months Ended
	Jun. 30, 2019
Liquidity And Going Concern
LIQUIDITY AND GOING CONCERN	The factors and uncertainties described below, as well as other factors which include, but are not limited to, declines in the Company’s production, the Company’s failure to establish commercial production on its Permian properties, no available capital to maintain and develop its properties, and its substantial working capital deficit of approximately $41 million, raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements. The consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of the going concern uncertainty. On October 26, 2016, the Company and three of its subsidiaries, as the co-borrowers, entered into a credit agreement providing for a $75.0 million three-year senior secured revolving credit facility (the “Credit Agreement”) with Société Générale (“SocGen”), as administrative agent, SG Americas Securities, LLC, as lead arranger and bookrunner, and the lenders signatory thereto (collectively with SocGen, the “Lender”). The credit facility was $32.8 million as of June 30, 2019, and the Company was, and is, fully drawn, leaving no availability on the line of credit. All of the obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the Company’s assets. The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness, create liens on assets, make investments, enter into sale and leaseback transactions, pay dividends and distributions or repurchase its capital stock, engage in mergers or consolidations, sell certain assets, sell or discount any notes receivable or accounts receivable, and engage in certain transactions with affiliates. The Credit Agreement contains customary financial and affirmative covenants and defines events of default for credit facilities of this type, including failure to pay principal or interest, breach of covenants, breach of representations and warranties, insolvency, judgment default, and a change of control. Upon the occurrence and continuance of an event of default, the Lender has the right to accelerate repayment of the loans and exercise its remedies with respect to the collateral. The Company is not in compliance under the credit facility with its (i) total debt to EBITDAX covenant for the trailing four quarter period, (ii) current ratio covenant, (iii) EBITDAX to interest expense covenant for the trailing four quarter period, (iv) the liquidity covenant requiring the Company to maintain unrestricted cash and borrowing base availability of at least $4.0 million, and (v) obligation to make interest only payments. The Company currently is not making any payments of interest under the credit facility and anticipates future non-compliance under the credit facility for the foreseeable future until the Company effects a restructuring of its debt obligations. Due to this non-compliance, as well as the credit facility maturity in 2019, the Company classified its entire bank debt as a current liability in its financial statements as of June 30, 2019. On October 9, 2018, the Company received a notice and reservation of rights from the administrative agent under the Credit Agreement advising that an event of default had occurred and continues to exist by reason of the Company’s noncompliance with the liquidity covenant requiring the Company to maintain cash and cash equivalents and borrowing base availability of at least $4.0 million. As a result of the default, the Lender may accelerate the outstanding balance under the Credit Agreement, increase the applicable interest rate by 2.0% per annum or commence foreclosure on the collateral securing the loans. As of the date of this filing, the Lender has not accelerated the outstanding amount due and payable on the loans, increased the applicable interest rate or commenced foreclosure proceedings, but may exercise one or more of these remedies in the future. As required under the Credit Agreement, the Company previously entered into hedging arrangements with SocGen and BP Energy Company (“BP”) pursuant to International Swaps and Derivatives Association Master Agreements (“ISDA Agreements”). On March 14, 2019, the Company received a notice of an event of default under its ISDA Agreement with SocGen (the “SocGen ISDA”). Due to the default under the ISDA Agreement, SocGen unwound all of the Company’s hedges with them. The notice provides for a payment of $335,252 to settle the Company’s outstanding obligations thereunder related to SocGen’s hedges, which is included in current maturities of debt at June 30, 2019. On March 19, 2019, the Company received a notice of an event of default under its ISDA Agreement with BP (the “BP ISDA”). Due to the default under the ISDA Agreement, BP also unwound all of the Company’s hedges with them. The notice provides for a payment of $749,240 to settle the Company’s outstanding obligations thereunder related to BP’s hedges, which is included in current maturities of debt at June 30, 2019. During the first quarter of 2019, the Company agreed to sell its Kern County, California properties, and closed on the sale in April 2019 for net proceeds of approximately $1.7 million. As additional consideration for the sale of the assets, if WTI Index for oil equals or exceeds $65 in the six months following closing and maintains that average for twelve consecutive months then the buyer agreed to pay the Company an additional $250,000. Net proceeds of approximately $1.2 million were used for the repayment of borrowings under the credit facility, and approximately $500,000 was retained by the Company for working capital purposes. The Company has initiated several strategic alternatives to mitigate its limited liquidity (defined as cash on hand and undrawn borrowing base), its financial covenant compliance issues, and to provide it with additional working capital to develop its existing assets. On October 22, 2018, the Company retained Seaport Global Securities LLC, an investment banking firm, to advise the Company on its strategic and tactical alternatives, including possible acquisitions and divestitures. On March 1, 2019, the Company hired a Chief Restructuring Officer, and subsequently on March 28, 2019, appointed that person as Interim Chief Executive Officer. The Company continues to reduce its operating and general and administrative costs and has curtailed its planned 2019 capital expenditures. The Company plans to take further steps to mitigate its limited liquidity, which may include, but are not limited to, restructuring its existing debt; selling additional assets; further reducing general and administrative expenses; seeking merger and acquisition related opportunities; and potentially raising proceeds from capital markets transactions, including the sale of debt or equity securities. There can be no assurance that the exploration of strategic alternatives will result in a transaction or otherwise improve the Company’s limited liquidity and that the Company will continue as a going concern.

3. REVENUE RECOGNITION

3. REVENUE RECOGNITION	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
REVENUE RECOGNITION	Sales of crude oil, condensates, natural gas and natural gas liquids (“NGLs”) are recognized at the point where control of the product is transferred to the customer and collectability is reasonably assured. The Company records revenue in the month production is delivered to the purchaser. However, settlement statements for certain natural gas and NGL sales may not be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. The Company records the differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Any identified differences between its revenue estimates and actual revenue received historically have not been significant. For the three and six months ended June 30, 2019 and 2018, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. Gain or loss on derivative instruments is not considered revenue from contracts with customers. The Company may use financial or physical contracts accounted for as derivatives as economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends to physically settle but do not meet all of the criteria to be treated as normal sales. The following table presents the Company’s revenues disaggregated by product source. Sales taxes are excluded from revenues. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Sales of natural gas and crude oil: Crude oil and condensate $ 1,081,674 $ 3,203,260 $ 3,280,696 $ 6,269,517 Natural gas 395,494 1,775,919 1,575,903 3,567,170 Natural gas liquids 192,248 843,398 791,494 1,631,426 Total revenues $ 1,669,416 $ 5,822,577 $ 5,648,093 $ 11,468,113 Transaction Price Allocated to Remaining Performance Obligations A significant number of the Company’s product sales are short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For the Company’s product sales that have a contract term greater than one year, it has utilized the practical expedient which states that the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Contract Balances Receivables from contracts with customers are recorded when the right to consideration becomes unconditional, generally when control of the product has been transferred to the customer. Receivables from contracts with customers were $1,460,825 and $2,282,200 as of June 30, 2019 and December 31, 2018, respectively, and are reported in trade accounts receivable, net on the Consolidated Balance Sheets. The Company currently has no other assets or liabilities related to its revenue contracts, including no upfront or rights to deficiency payments.

4. ASSET IMPAIRMENTS

4. ASSET IMPAIRMENTS	6 Months Ended
	Jun. 30, 2019
Asset Impairment Charges [Abstract]
ASSET IMPAIRMENTS	The Company’s oil and natural gas properties are accounted for using the full cost method of accounting, under which all productive and nonproductive costs directly associated with property acquisition, exploration and development activities are capitalized. These capitalized costs (net of accumulated DD&A and deferred income taxes) of proved oil and natural gas properties are subject to a full cost ceiling limitation. The full cost ceiling limitation limits these costs to an amount equal to the present value, discounted at 10%, of estimated future cash flows from estimated proved reserves less estimated future operating and development costs, abandonment costs (net of salvage value) and estimated related future deferred income taxes. In accordance with SEC rules, prices used are the 12-month average prices, calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12 month period prior to the end of the reporting period, unless prices are defined by contractual arrangements. Prices are adjusted for “basis” or location differentials. Prices are held constant over the life of the reserves. The Company’s second quarter of 2019 full cost ceiling calculation was prepared by the Company using (i) $61.45 per barrel for oil, and (ii) $3.02 per MMBTU for natural gas as of June 30, 2019. If unamortized costs capitalized within the cost pool exceed the ceiling, the excess is charged to expense and separately disclosed during the period in which the excess occurs. Amounts thus required to be written off are not reinstated for any subsequent increase in the cost center ceiling. Based on a thorough analysis of the Company’s assets, the major contribution for an impairment for the second quarter of fiscal year 2019 is the decrease in the 12 month rolling SEC prices used at June 30, 2019. As a result of this review, the Company recorded a full cost ceiling impairment charge of $0.4 million during the three-month period ended June 30, 2019. The Company recorded a full cost ceiling impairment charge of $11.8 million for the six-month period ended June 30, 2019. During the three and six month periods ended June 30, 2018, the Company did not record any full cost ceiling impairments.

5. ASSET RETIREMENT OBLIGATIONS

5. ASSET RETIREMENT OBLIGATIONS	6 Months Ended
	Jun. 30, 2019
Asset Retirement Obligation Disclosure [Abstract]
ASSET RETIREMENT OBLIGATIONS	The Company has asset retirement obligations (“AROs”) associated with the future plugging and abandonment of oil and natural gas properties and related facilities. The accretion of the ARO is included in the Consolidated Statements of Operations. Revisions to the liability typically occur due to changes in the estimated abandonment costs, well economic lives and the discount rate. The following table summarizes the Company’s ARO transactions recorded during the six months ended June 30, 2019 in accordance with the provisions of FASB ASC Topic 410, “Asset Retirement and Environmental Obligations”: Six Months Ended June 30, 2019 Asset retirement obligations at December 31, 2018 $ 11,271,859 Liabilities incurred - Liabilities settled - Accretion expense 251,669 Revisions in estimated cash flows - Asset retirement obligations at June 30, 2019 $ 11,523,528 Based on expected timing of settlements, $128,539 of the ARO is classified as current at June 30, 2019.

6. FAIR VALUE MEASUREMENTS

6. FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	Certain financial instruments are reported at fair value on the Consolidated Balance Sheets. Under fair value measurement accounting guidance, fair value is defined as the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants, i.e., an exit price. To estimate an exit price, a three-level hierarchy is used. The fair value hierarchy prioritizes the inputs, which refer broadly to assumptions market participants would use in pricing an asset or a liability, into three levels. The Company uses a market valuation approach based on available inputs and the following methods and assumptions to measure the fair values of its assets and liabilities, which may or may not be observable in the market. Fair Value of Financial Instruments (other than Commodity Derivative Instruments, see below) – Derivatives As previously disclosed, there were no outstanding commodity derivatives as of June 30, 2019. Fair value measurements at December 31, 2018 Significant Quoted prices other Significant in active observable unobservable markets inputs inputs (Level 1) (Level 2) (Level 3) Total Assets: Commodity derivatives – oil $ - $ 922,562 $ - $ 922,562 Commodity derivatives – gas - (158,376 ) - $ (158,376 ) Total assets $ - $ 764,186 $ - $ 764,186 Derivative instruments listed above are related to swaps (see Note 7 – Commodity Derivative Instruments). Debt Asset Retirement Obligations Assets Held for Sale

7. COMMODITY DERIVATIVE INSTRUM

7. COMMODITY DERIVATIVE INSTRUMENTS	6 Months Ended
	Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
COMMODITY DERIVATIVE INSTRUMENTS	As required under the Credit Agreement, the Company previously entered into hedging arrangements with SocGen and BP pursuant to ISDA Agreements. On March 14, 2019, the Company received a notice of an event of default under the SocGen ISDA. Due to the default under the SocGen ISDA, SocGen unwound all of the Company’s hedges with them. The notice provides for a payment of $335,252 to settle the Company’s outstanding obligations thereunder related to SocGen’s hedges which is included in current maturities of debt at June 30, 2019. On March 19, 2019, the Company received a notice of an event of default under its BP ISDA. Due to the default under the BP ISDA, BP also unwound all of the Company’s hedges with them. The notice provides for a payment of $749,240 to settle the Company’s outstanding obligations thereunder related to BP’s hedges which is included in current maturities of debt at June 30, 2019. Counterparty Credit Risk Derivatives for each commodity are netted on the Consolidated Balance Sheets. The following table presents the fair value and balance sheet location of each classification of commodity derivative contracts on a gross basis without regard to same-counterparty netting: Fair value as of June 30, 2019 December 31, 2018 Asset commodity derivatives: Current assets $ - $ 1,031,614 Noncurrent assets - 98,530 Total asset commodity derivatives - 1,130,144 Liability commodity derivatives: - Current liabilities - (280,456 ) Noncurrent liabilities - (85,502 ) Total liability commodity derivatives - (365,958 ) Total commodity derivative instruments $ - $ 764,186 Net losses from commodity derivatives on the Consolidated Statements of Operations are comprised of the following: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2018 2018 Derivative settlements $ - $ (659,847 ) $ (1,076,497 ) $ (1,189,211 ) Mark to market on commodity derivatives - (1,435,723 ) (764,186 ) (2,157,619 ) Net gains (losses) from commodity derivatives $ - $ (2,095,570 ) $ (1,840,683 ) $ (3,346,830 )

8. PREFERRED STOCK

8. PREFERRED STOCK	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
PREFERRED STOCK	Each share of the Company’s Series D Convertible Preferred Stock, $0.001 par value per share (the “Series D Preferred Stock”), is convertible into a number of shares of common stock determined by dividing the original issue price, which was $11.0741176, by the conversion price, which is currently $98.7571635 as adjusted for the Reverse Stock Split. The conversion price is subject to adjustment for stock splits, stock dividends, reclassification, and certain issuances of common stock for less than the conversion price. As of June 30, 2019, the Series D Preferred Stock had a liquidation preference of approximately $23.4 million. The Series D Preferred Stock provides for cumulative dividends of 7.0% per annum, payable in-kind. In payment of the dividend, the Company issued 36,238 and 71,470 shares of Series D Preferred Stock during the three and six months ended June 30, 2019, respectively. The Company does not have any dividends in arrears at June 30, 2019.

9. STOCK-BASED COMPENSATION

9. STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	2014 Long-Term Incentive Plan On October 26, 2016, Yuma assumed the Yuma Energy, Inc., a California corporation (“Yuma California”), 2014 Long-Term Incentive Plan (the “2014 Plan”), which was approved by the shareholders of Yuma California. Under the 2014 Plan, Yuma could grant stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights (“SARs”), performance units, performance bonuses, stock awards and other incentive awards to employees of Yuma and its subsidiaries and affiliates. At June 30, 2019, 10,905 shares of the 166,334 shares of common stock originally authorized under the 2014 Plan remained available for future issuance. 2018 Long-Term Incentive Plan The Company’s Board adopted the Yuma Energy, Inc. 2018 Long-Term Incentive Plan (the “2018 Plan”), and its stockholders approved the 2018 Plan at the Annual Meeting on June 7, 2018. The 2018 Plan will replace the 2014 Plan; however, the terms and conditions of the 2014 Plan and related award agreements will continue to apply to all awards granted under the 2014 Plan. The 2018 Plan expires on June 7, 2028, and no awards may be granted under the 2018 Plan after that date. However, the terms and conditions of the 2018 Plan will continue to apply after that date to all 2018 Plan awards granted prior to that date until they are no longer outstanding. Under the 2018 Plan, the Company may grant stock options, RSAs, RSUs, SARs, performance units, performance bonuses, stock awards and other incentive awards to employees or those of the Company’s subsidiaries or affiliates, subject to the terms and conditions set forth in the 2018 Plan. The Company may also grant nonqualified stock options, RSAs, RSUs, SARs, performance units, stock awards and other incentive awards to any persons rendering consulting or advisory services and non-employee directors, subject to the conditions set forth in the 2018 Plan. Generally, all classes of the Company’s employees are eligible to participate in the 2018 Plan. The 2018 Plan provides that a maximum of 266,667 shares of the Company’s common stock may be issued in conjunction with awards granted under the 2018 Plan. Shares of common stock cancelled, settled in cash, forfeited, withheld, or tendered by a participant to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards. At June 30, 2019, all of the 266,667 shares of common stock authorized under the 2018 Plan remain available for future issuance. The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”. RSAs, SARs and stock options granted to officers and employees generally vest in one-third increments over a three-year period, or with three-year cliff vesting, and are contingent on the recipient’s continued employment. RSAs granted to directors generally vest in quarterly increments over a one-year period. Equity Based Awards – At June 30, 2019, there were a total of 319 unvested RSAs, with a weighted average grant-date fair value of $38.40 per share. Liability Based Awards – Share Buy-back – Total share-based compensation expenses recognized for the three months ended June 30, 2019 and 2018 were ($27,086), due primarily to liability-based SARs declining in value and significant forfeitures of equity-based RSAs and stock options, and $64,230, respectively. Total share-based compensation expenses recognized for the six months ended June 30, 2019 and 2018 were ($148,153) and $360,524, respectively. No share-based compensation was capitalized during 2019 or 2018.

10. DEBT AND INTEREST EXPENSE

10. DEBT AND INTEREST EXPENSE	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
DEBT AND INTEREST EXPENSE	Long-term debt consisted of the following: June 30, December 31, 2019 2018 Senior credit facility $ 32,805,518 $ 34,000,000 Commodity debt payable 1,084,512 - Installment loan due 6/23/19 originating from the financing of insurance premiums at 6.14% interest rate - 742,953 Total debt 33,890,030 34,742,953 Less: current maturities (33,890,030 ) (34,742,953 ) Total long-term debt $ - $ - Senior Credit Facility The Company is currently in default under its Credit Agreement due to non-compliance with the financial covenants and failure to pay interest. As of June 30, 2019, the credit facility had a borrowing base of $32.8 million and the Company was fully drawn under the credit facility leaving no availability. On October 26, 2016, the Company and three of its subsidiaries, as the co-borrowers, entered into the Credit Agreement with the Lender. The Company’s obligations under the Credit Agreement are guaranteed by its subsidiaries and are secured by liens on substantially all of the Company’s assets, including a mortgage lien on oil and natural gas properties covering at least 95% of the PV-10 value of the proved oil and gas properties included in the determination of the borrowing base. The borrowing base is generally subject to redetermination on April 1st and October 1st of each year, as well as special redeterminations described in the Credit Agreement (no redetermination occurred on April 1, 2019 due to the default under the Credit Agreement). The amounts borrowed under the Credit Agreement bear annual interest rates at either (a) the London Interbank Offered Rate (“LIBOR”) plus 3.00% to 4.00% or (b) the prime lending rate of SocGen plus 2.00% to 3.00%, depending on the amount borrowed under the credit facility and whether the loan is drawn in U.S. dollars or Euro dollars. The interest rate for the credit facility at December 31, 2018 was 6.53% for LIBOR-based debt and 8.50% for prime-based debt. Principal amounts outstanding under the credit facility are due and payable in full at maturity on October 26, 2019. All of the obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the Company’s assets. Additional payments due under the Credit Agreement include paying a commitment fee to the Lender in respect of the unutilized commitments thereunder. The commitment rate is 0.50% per year of the unutilized portion of the borrowing base in effect from time to time. The Company is also required to pay customary letter of credit fees. The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness, create liens on assets, make investments, enter into sale and leaseback transactions, pay dividends and distributions or repurchase the Company’s capital stock, engage in mergers or consolidations, sell certain assets, sell or discount any notes receivable or accounts receivable, and engage in certain transactions with affiliates. In addition, the Credit Agreement requires the Company to maintain the following financial covenants: a current ratio of not less than 1.0 to 1.0 on the last day of each quarter, a ratio of total debt to earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (“EBITDAX”) ratio of not greater than 3.5 to 1.0 for the four fiscal quarters ending on the last day of the fiscal quarter immediately preceding such date of determination, and a ratio of EBITDAX to interest expense of not less than 2.75 to 1.0 for the four fiscal quarters ending on the last day of the fiscal quarter immediately preceding such date of determination, and cash and cash equivalent investments together with borrowing availability under the Credit Agreement of at least $4.0 million. The Credit Agreement contains customary affirmative covenants and defines events of default for credit facilities of this type, including failure to pay principal or interest, breach of covenants, breach of representations and warranties, insolvency, judgment default, and a change of control. Upon the occurrence and continuance of an event of default, the Lender has the right to accelerate repayment of the loans and exercise its remedies with respect to the collateral. At June 30, 2019, the Company was not in compliance under the credit facility, as more fully described in Note 2 – Liquidity and Going Concern. The Company incurred commitment fees in connection with the Credit Agreement of $-0- and $4,735 during the three months ended June 30, 2019 and 2018, respectively, and $-0- and $19,170 during the six months ended June 30, 2019 and 2018, respectively.

11. STOCKHOLDERS' EQUITY

11. STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2019
EQUITY:
STOCKHOLDERS' EQUITY	Yuma is authorized to issue up to 100,000,000 shares of common stock, $0.001 par value per share, and 20,000,000 shares of preferred stock, $0.001 par value per share. The holders of common stock are entitled to one vote for each share of common stock, except as otherwise required by law. The Company has designated 7,000,000 shares of preferred stock as Series D Preferred Stock. See Note 8 - Preferred Stock, which describes the issuance of dividends in-kind, and Note 9 – Stock-Based Compensation, which describes outstanding stock options, RSAs and SARs granted under the 2014 Plan and the provisions of the 2018 Plan adopted on June 7, 2018.

12. LOSS PER COMMON SHARE

12. LOSS PER COMMON SHARE	6 Months Ended
	Jun. 30, 2019
LOSS PER COMMON SHARE:
LOSS PER COMMON SHARE	Loss per common share – Basic is calculated by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Loss per common share – Diluted assumes the conversion of all potentially dilutive securities, and is calculated by dividing net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding plus potentially dilutive securities. Loss per common share – Diluted considers the impact of potentially dilutive securities except in periods where their inclusion would have an anti-dilutive effect. A reconciliation of loss per common share is as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) attributable to common stockholders $ (3,966,396 ) $ (4,404,801 ) $ (20,007,261 ) $ (7,941,739 ) Weighted average common shares outstanding Basic 1,552,549 1,538,822 1,554,120 1,529,898 Add potentially dilutive securities: Unvested restricted stock awards - - - - Stock appreciation rights - - - - Stock options - - - - Series D preferred stock - - - - Diluted weighted average common shares outstanding 1,552,549 1,538,822 1,554,120 1,529,898 Net income (loss) per common share: Basic $ (2.55 ) $ (2.86 ) $ (12.87 ) $ (5.19 ) Diluted $ (2.55 ) $ (2.86 ) $ (12.87 ) $ (5.19 ) For the three and six months ended June 30, 2019, the Company excluded 319 shares of unvested restricted stock awards, 10,133 stock appreciation rights, 10,402 stock options, and 2,112,710 shares of Series D Preferred Stock in calculating diluted earnings per share, as the effect was anti-dilutive. For the three and six months ended June 30, 2018, the Company excluded 9,904 shares of unvested restricted stock awards, 113,852 stock appreciation rights, 59,911 stock options, and 1,971,072 shares of Series D Preferred Stock in calculating diluted earnings per share, as the effect was anti-dilutive.

13. INCOME TAXES

13. INCOME TAXES	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	The Company’s effective tax rate was 0.00% for the three and six months ended June 30, 2019 and 2018. Differences between the U.S. federal statutory rate of 21% in 2019 and 2018 and the Company’s effective tax rates are due to the tax effects of valuation allowances recorded against the deferred tax assets. As of June 30, 2019, the Company had federal net operating loss carryforwards of approximately $187.8 million, of which $173.2 million expire between 2022 and 2038. Of this amount, approximately $59.5 million is subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which could result in some amounts expiring prior to being utilized. The remaining $14.6 million of federal net operating loss may be carried forward indefinitely. The Company has $87.6 million of state net operating losses which expire between 2019 and 2038. The Company provides for deferred income taxes on the difference between the tax basis of an asset or liability and its carrying amount in the financial statements in accordance FASB ASC Topic 740, “Income Taxes”. This difference will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. In recording deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred income tax asset will be realized. The ultimate realization of deferred income tax assets, if any, is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible. Based on the available evidence, the Company has recorded a full valuation allowance against its net deferred tax assets.

14. DIVESTITURES AND OIL AND GA

14. DIVESTITURES AND OIL AND GAS ASSET SALES	6 Months Ended
	Jun. 30, 2019
Preferred stock [Abstract]
DIVESTITURES AND OIL AND GAS ASSET SALES	In April of 2019, the Company closed on the sale of its Kern County, California properties for approximately $1.7 million in net proceeds. As additional consideration for the sale of the assets, if the WTI index for oil equals or exceeds $65 in the six months following closing and maintains that average for twelve consecutive months, then the buyer shall pay to the Company an additional $250,000. Under the full cost method of accounting, no gain or loss was recognized on the sale. The net proceeds were used for the repayment of borrowings under the credit facility and working capital.

15. COMMITMENTS AND CONTINGENCI

15. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Joint Development Agreement On March 27, 2017, the Company entered into a Joint Development Agreement (“JDA”) with two privately held companies, both unaffiliated entities, covering an area of approximately 52 square miles (33,280 acres) in the Permian Basin of Yoakum County, Texas. In connection with the JDA, the Company now holds a 62.5% working interest in approximately 4,626 acres (3,192 net acres) as of June 30, 2019. As the operator of the property covered by the JDA, the Company is committed as of June 30, 2019 to spend an additional $241,104 by March 2020. Throughput Commitment Agreement On August 1, 2014, Crimson Energy Partners IV, LLC, as operator of the Company’s Chalktown properties, in which the Company has a working interest, entered into a throughput commitment (the “Commitment”) with ETC Texas Pipeline, Ltd. effective April 1, 2015 for a five-year throughput commitment. In connection with the Commitment, the operator and the Company failed to reach the volume commitments in year two, and the Company anticipates that a shortfall will exist through the expiration of the five-year term, which expires in March 2020. Accordingly, the Company is accruing the expected volume commitment shortfall amounts of approximately $29,000 per month to lease operating expense (“LOE”) based on production, which represents the maximum amounts that could be owed based upon the Commitment. As of June 30, 2019, $86,082 has been recorded in accrued expense for the volume commitment shortfall. Lease Agreements The Company determines if an arrangement is a lease at inception of the arrangement. To the extent that the Company determines an arrangement represents a lease, that lease is classified as an operating lease or a finance lease. The Company currently does not have any finance leases. In accordance with ASC Topic 842, operating leases are capitalized on the Company’s Consolidated Balance Sheet through an asset and a corresponding lease liability. Recorded assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Short-term leases that have an initial term of one year or less are not capitalized. The Company’s operating leases are reflected as right-of-use lease assets, accrued liabilities-current and operating lease liabilities on its Consolidated Balance Sheet. Operating lease assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. In addition to the present value of lease payments, the operating lease asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives and initial direct costs incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Nature of Leases The Company leases certain office space, field and other equipment under cancelable and non-cancelable leases to support its operations. A more detailed description of significant lease types is included below. Office Agreements The Company rents office space from third parties, structured with non-cancelable terms. The Company has concluded its office agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. Upon completion of the primary term, both parties have substantive rights to terminate the lease. As a result, enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term. Field Equipment and Compressors The Company rents compressors and other equipment from third parties in order to facilitate the downstream movement of its production from its drilling operations to market, typically structured with a non-cancelable primary term of one to two years, and continuing thereafter on a month-to-month basis subject to termination by either party. These compressors and other equipment are critical to the Company’s ability to sell its production. The Company has therefore concluded that its compressor and other equipment rental agreements represent operating leases with a lease term that extends through the expected life of the field reserves (as opposed to the primary non-cancelable contract term). The Company enters into daywork contracts for drilling/completion/workover rigs with third parties to support its activities. The Company has concluded that these arrangements represent short-term operating leases. The accounting guidance requires the Company to make an assessment at contract commencement if it is reasonably certain that it will exercise the option to extend the term. The Company has determined that it cannot conclude with reasonable certainty if it will choose to extend the contract beyond its original term. Significant Judgments Discount Rate The Company’s leases typically do not provide an implicit rate. Accordingly, it is required to use its incremental borrowing rate in determining the present value of lease payments based on the information available at commencement date. The Company’s incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Practical Expedients and Accounting Policy Elections Certain of the Company’s lease agreements include lease and non-lease components. For all existing asset classes with multiple component types, the Company has utilized the practical expedient that exempts it from separating lease components from non-lease components. Accordingly, the Company accounts for the lease and non-lease components in an arrangement as a single lease component. In addition, for all of its existing asset classes, the Company has made an accounting policy election not to apply the lease recognition requirements to its short-term leases (that is, a lease that, at commencement, has a lease term of twelve months or less and does not include an option to purchase the underlying asset that the Company is reasonably certain to exercise). Accordingly, the Company recognizes lease payments related to its short-term leases in its statement of operations on a straight-line basis over the lease term, which has not changed from the prior recognition. To the extent that there are variable lease payments, the Company recognizes those payments in its Statement of Operations in the period in which the obligation for those payments is incurred. The total lease expense for the three and six months ended June 30, 2019, which is included in general and administrative expense and lease operating expense, was $232,922 and $454,895, respectively. Supplemental cash flow information related to the Company’s operating leases is included in the table below: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 454,895 Supplemental balance sheet information related to operating leases is included in the table below: June 30, 2019 Right-of-use lease assets $ 4,135,773 Accrued liabilities - current (838,418 ) Operating lease liabilities - long-term $ 3,297,355 The weighted average remaining lease term for the Company’s operating leases is 6.8 years as of June 30, 2019, with a weighted average discount rate of 10.5%. Lease liabilities with enforceable contract terms that are greater than one-year mature as follows: Operating Right-of-use Leases Remainder of 2019 $ 443,946 2020 865,350 2021 839,613 2022 847,208 2023 751,701 Thereafter 2,344,570 Total lease payments 6,092,388 Less imputed interest (1,956,615 ) Total lease liability $ 4,135,773 Certain Legal Proceedings From time to time, the Company is party to various legal proceedings arising in the ordinary course of business. The Company expenses or accrues legal costs as incurred. A summary of the Company’s legal proceedings is as follows: Yuma Energy, Inc. v. Cardno PPI Technology Services, LLC Arbitration On May 20, 2015, counsel for Cardno PPI Technology Services, LLC (“Cardno”) sent a notice of the filing of liens totaling $304,209 on the Company’s Crosby 14 No. 1 Well and Crosby 14 SWD No. 1 Well in Vernon Parish, Louisiana. The Company disputed the validity of the liens and of the underlying invoices, and notified Cardno that applicable credits had not been applied. The Company invoked mediation on August 11, 2015 on the issues of the validity of the liens, the amount due pursuant to terms of the parties’ Master Service Agreement (“MSA”), and PPI Cardno’s breaches of the MSA. Mediation was held on April 12, 2016; no settlement was reached. On May 12, 2016, Cardno filed a lawsuit in Louisiana state court to enforce the liens; the Court entered an Order Staying Proceeding on June 13, 2016, ordering that the lawsuit “be stayed pending mediation/arbitration between the parties.” On June 17, 2016, the Company served a Notice of Arbitration on Cardno, stating claims for breach of the MSA billing and warranty provisions. On July 15, 2016, Cardno served a Counterclaim for $304,209 plus attorneys’ fees. The parties selected an arbitrator, and the arbitration hearing was held on March 29, April 12 and April 13, 2018. The parties submitted closing statements on April 30, 2018, and the arbitrator issued a Final Arbitration Award (the “Award”) on April 4, 2019. The Award granted the Company a $62,923 credit for Cardno’s improper billing of insurance charges, and a $127,100 credit for Cardno’s billing in excess of the contractual prices. After the credits were applied, Cardno was awarded $114,186 on its claim. The arbitrator also awarded Cardno $23,676 in prejudgment interest. On June 29, 2019, Cardno filed its First Amended Petition to Enforce Liens and on Open Account in the Louisiana proceeding. The amended pleading seeks, among other things, a judgment on the arbitration award. The Parish of St. Bernard v. Atlantic Richfield Co., et al On October 13, 2016, two subsidiaries of the Company, Yuma Exploration and Production Company, Inc. (“Exploration”) and Yuma Petroleum Company (“YPC”), were named as defendants, among several other defendants, in an action by the Parish of St. Bernard in the Thirty-Fourth Judicial District of Louisiana. The petition alleges violations of the State and Local Coastal Resources Management Act of 1978, as amended, in the St. Bernard Parish. The Company has notified its insurance carrier of the lawsuit. Management intends to defend the plaintiffs’ claims vigorously. The case was removed to federal district court for the Eastern District of Louisiana. A motion to remand was filed and the Court officially remanded the case on July 6, 2017. Exceptions for Exploration, YPC and the other defendants were filed; however, the hearing for such exceptions was continued from the original date of October 6, 2017 to November 22, 2017. The November 22, 2017 hearing was continued without date because the parties agreed the case will be de-cumulated into subcases, but the details of this are yet to be determined. The case was removed again on other grounds on May 23, 2018. On May 25, 2018, a Motion was filed on behalf of certain defendants with the United States Judicial Panel for Multi District Litigation (“JPMDL”) for consolidated proceedings for all 41 pending cases filed in Louisiana with claims that are substantially the same as those in this case. A 42nd case has been added as a “tag-along”. In the interim, plaintiffs timely filed their Motion to Remand in the case. Hearing on the Motion before the JPMDL was held on July 26, 2018 in Santa Fe, New Mexico, and the JPMDL denied centralization by Order dated July 31, 2018. The Order indicates Plaintiffs may be willing to consolidate all cases pending in the Western District with those in the Eastern District, although Defendants may not be amenable to same. That did not occur and this case remained stayed. In the interim, an Order was issued in another of the coastal cases pending in the Eastern District of Louisiana lifting the stay and setting a schedule for briefing for plaintiffs’ motion to remand ( Parish of Plaquemines v. Riverwood Production Company, et al., No. 2:18-cv-05217, Eastern District of Louisiana Riverwood Riverwood Riverwood Cameron Parish vs. BEPCO LP, et al & Cameron Parish vs. Alpine Exploration Companies, Inc., et al The Parish of Cameron, Louisiana, filed a series of lawsuits against approximately 190 oil and gas companies alleging that the defendants, including Davis Petroleum Acquisition Corp. (“Davis”), have failed to clear, revegetate, detoxify, and restore the mineral and production sites and other areas affected by their operations and activities within certain coastal zone areas to their original condition as required by Louisiana law, and that such defendants are liable to Cameron Parish for damages under certain Louisiana coastal zone laws for such failures; however, the amount of such damages has not been specified. Two of these lawsuits, originally filed February 4, 2016 in the 38th Judicial District Court for the Parish of Cameron, State of Louisiana, name Davis as defendant, along with more than 30 other oil and gas companies. Both cases have been removed to federal district court for the Western District of Louisiana. The Company denies these claims and intends to vigorously defend them. Davis has become a party to the Joint Defense and Cost Sharing Agreements for these cases. Motions to remand were filed and the Magistrate Judge recommended that the cases be remanded. The Company was advised that the new District Judge assigned to these cases is Judge Terry A. Doughty, and on May 9, 2018, Judge Doughty agreed with the Magistrate Judge’s recommendation and the cases were remanded to the 38th Judicial District Court, Cameron Parish, Louisiana. The cases were removed again on other grounds on May 23, 2018. On May 25, 2018, a Motion was filed on behalf of certain defendants with the United States Judicial Panel for Multi District Litigation (“JPMDL”) for consolidated proceedings for all 41 pending cases filed in Louisiana with claims that are substantially the same as those in these cases. A 42nd case has been added as a “tag-along”. In the interim, plaintiffs timely filed their Motion to Remand in the cases. Hearing on the Motion before the JPMDL was held on July 26, 2018 in Santa Fe, New Mexico, and the JPMDL denied centralization by Order dated July 31, 2018. The Order indicates Plaintiffs may be willing to consolidate all cases pending in the Western District with those in the Eastern District, although Defendants may not be amenable to same. That did not occur. On October 1, 2018, all of the coastal cases pending in the Western District of Louisiana, including these cases, were re-assigned to the newly appointed District Judge, Judge Robert R. Summerhays. On August 29, 2018, Magistrate Judge Kay signed an Order providing for staged briefing on the plaintiffs’ motion(s) to remand in all the coastal cases pending in the Western District, with the lowest numbered case (Parish of Cameron v. Auster, No. 18-677, Western District of Louisiana) to proceed first. In response to Defendants’ request for oral argument in the Auster case, Judge Kay issued an electronic Order on October 18, 2018, denying that request and further stating, “The issues have been thoroughly briefed and we do not find at this time that oral argument would be helpful.” As noted above, Magistrate Judge Kay previously recommended remand of these cases, which recommendation was adopted by the District Judge then assigned to the cases. Magistrate Judge Kay issued her Report and Recommendations recommending remand based on the timeliness of the second removal. Objections and replies were filed to the same and the District Judge now assigned to the cases granted and held oral argument on the objections to Magistrate Judge Kay’s Report and Recommendations on January 16, 2019. The District Judge has not yet ruled. In the interim, this Court was apprised by Plaintiffs of Judge Feldman’s Opinion remanding the Riverwood Louisiana, et al Escheat Tax Audits During 2015, the States of Louisiana, Texas, Minnesota, North Dakota and Wyoming have notified the Company that they will examine the Company’s books and records to determine compliance with each of the examining state’s escheat laws. The review is being conducted by Discovery Audit Services, LLC and is related to the years 2000 through 2015. The Company has engaged Ryan, LLC to represent it in this matter. The exposure related to the audits is not currently determinable and therefore, no liability has been recorded on the Company’s consolidated financial statements. Louisiana Severance Tax Audit The State of Louisiana, Department of Revenue, notified Exploration that it was auditing Exploration’s calculation of its severance tax relating to Exploration’s production from November 2012 through March 2016. The audit relates to the Department of Revenue’s recent interpretation of long-standing oil purchase contracts to include a disallowable “transportation deduction,” and thus to assert that the severance tax paid on crude oil sold during the contract term was not properly calculated. The Department of Revenue sent a proposed assessment in which they sought to impose $476,954 in additional state severance tax plus associated penalties and interest. Exploration engaged legal counsel to protest the proposed assessment and request a hearing. Exploration then entered a Joint Defense Group of operators challenging similar audit results. Since the Joint Defense Group is challenging the same legal theory, the Board of Tax Appeals proposed to hear a motion brought by one of the taxpayers (Avanti) that would address the rule for all through a test case. Exploration’s case has been stayed pending adjudication of the test case. The hearing for the Avanti test case was held on November 7, 2017, and on December 6, 2017, the Board of Tax Appeals rendered judgment in favor of the taxpayer in the first of these cases. The Department of Revenue filed an appeal to this decision on January 5, 2018. The Board of Tax Appeals case record has been lodged at the Louisiana Third Circuit Court of Appeal in the Avanti test case. Oral argument was held at the Third Circuit on February 26, 2019. On April 17, 2019, the Louisiana Third Circuit Court of Appeal rendered a unanimous decision in the Avanti case affirming the Board of Tax Appeals decision for the taxpayer. The Louisiana Department of Revenue did not appeal the Avanti case, which is now a final decision. The Department of Revenue has dropped its opposition to the normal standard methodology crude oil producers were using in reporting their Louisiana severance taxes. This assessment for Exploration, to the extent it involves only the crude oil pricing issue (i.e., the transportation deduction issue), is expected to be vacated, and the appeal by Exploration can be dismissed. Louisiana Department of Wildlife and Fisheries The Company received notice from the Louisiana Department of Wildlife and Fisheries (“LDWF”) in July 2017 stating that Exploration has open Coastal Use Permits (“CUPs”) located within the Louisiana Public Oyster Seed Grounds dating back from as early as November 1993 and through a period ending in November 2012. The majority of the claims relate to permits that were filed from 2000 to 2005. Pursuant to the conditions of each CUP, LDWF is alleging that damages were caused to the oyster seed grounds and that compensation of an aggregate amount of approximately $500,000 is owed by the Company. The Company is currently evaluating the merits of the claim, is reviewing the LDWF analysis, and has now requested that the LDWF revise downward the amount of area their claims of damages pertain to. At this point in the regulatory process, no evaluation of the likelihood of an unfavorable outcome or associated economic loss can be made; therefore no liability has been recorded on the Company’s consolidated financial statements. Miami Corporation – South Pecan Lake Field Area P&A The Company, along with several other exploration and production companies in the chain of title, received letters in June 2017 from representatives of Miami Corporation demanding the performance of well plugging and abandonment, facility removal and restoration obligations for wells in the South Pecan Lake Field Area, Cameron Parish, Louisiana. Apache is one of the other companies in the chain of title, and after taking a field tour of the area, has sent to the Company, along with BP and other companies in the chain of title, a proposed work plan to comply with the Miami Corporation demand. The Company is currently evaluating the merits of the claim and awaiting further information. At this point in the process, no evaluation of the likelihood of an unfavorable outcome or associated economic loss can be made; therefore no liability has been recorded on the Company’s consolidated financial statements. John Hoffman v. Yuma Exploration & Production Company, Inc., et al This lawsuit, filed on June 15, 2018 in Livingston Parish, Louisiana, against the Company, Precision Drilling and Dynamic Offshore relates to a slip and fall injury to Mr. Hoffman that occurred on August 28, 2017. Mr. Hoffman was apparently an employee of a subcontractor of a contractor performing services for the Company. Precision has made demand for defense and indemnity against the Company based on a contract entered into between the parties. The defense and indemnity demand is being contested, primarily on the grounds that the defense and indemnity obligation is barred by the Louisiana Anti-Indemnity Act. The Company believes that its contractor is responsible for injuries to employees of the contractor or subcontractor and that their insurance coverage, or insurance coverage maintained by the Company, should cover damages awarded to Mr. Hoffman. The Company has notified its insurance carrier of the lawsuit. Counsel believes that the claim will be successfully defended, but even if the defense and indemnity claim is legally enforceable, there is sufficient insurance in place to cover the exposure. Accordingly, the defense and indemnity claim does not represent any direct material exposure to the Company. Hall-Degravelles, L.L.C. v. Cockrell Oil Corporation, et al Avalon Plantation, Inc., et al v. Devon Energy Production Company, L.P., et al Avalon Plantation, Inc., et al v. American Midstream, et al The Company, as a successor in interest from another company years ago, along with 41 other companies in the chain of title, was named as a defendant in these lawsuits brought in St. Mary Parish, Louisiana. The substance of each of the petitions is virtually identical. In each case, the plaintiff(s) are seeking to recover damages to their property resulting from “oil and gas exploration and production activities.” The cited grounds for these actions include La. R.S. 30:29 (providing for restoration of property affected by oilfield contamination) and C.C. art. 2688 (notification by the lessee to the lessor when leased property is damaged). The plaintiffs have attempted to have these three cases consolidated. A hearing on motion to consolidate was held on January 15, 2019. At that time, Judge Sigur stated from the bench that he did not have sufficient information to order consolidation. A judgment to that effect has been signed by the judge. These cases are in the very early stages. At this point, not all of the named defendants have filed responsive pleadings. All of the defendants who have responded at this point have, inter alia, filed exceptions of vagueness due to the lack of specificity in the petitions which makes it impossible to determine what action(s) any individual defendant may have performed which would result in liability to the plaintiffs. None of these exceptions are currently set for hearing. The plaintiffs recently filed amended petitions which do not change the substance of their claims. The plaintiffs requested that service of these amended petitions be withheld. The Company sold the leases that appear to be involved in this litigation to Hilcorp Energy I, L.P. (“Hilcorp”), with an effective date of September 1, 2016. The conveyance includes an indemnity provision which appears to transfer liability for this type of damage to Hilcorp, and at some point it necessary to invoke this indemnity. The Company has notified its insurance carrier of the claim but believes that the suit is without merit. No evaluation of the likelihood of an unfavorable outcome or associated economic loss can be made at this early stage, therefore no liability has been recorded on the Company’s consolidated financial statements. Vintage Assets, Inc. v. Tennessee Gas Pipeline, L.L.C., et al On September 10, 2018, the Company received a Demand for Defense and Indemnity from High Point Gas Gathering, L.P. (HPGG) pursuant to the 2010 Purchase and Sale Agreement between Texas Southeastern Gas Gathering Company, et al and HPGG, et al. The demand related to a judgment and permanent injunction entered against HPGG and three other defendants on May 4, 2018 in the above referenced matter in the U.S. District Court in the Eastern District of Louisiana. The Company received a letter dated October 30, 2018 from HPGG informing it that the May 4, 2018 judgment had been vacated. No evaluation of the likelihood of an unfavorable outcome or associated economic loss can be made at this early stage, therefore, no liability has been recorded on Company’s consolidated financial statements. Texas General Land Office (“GLO”) On February 21, 2019, the GLO notified the Company that it would be conducting an audit of oil and gas production and royalty revenue for the period of September 2012 to August 2017 related to three of the Company’s leases located in Chambers County, Texas and four of the Company’s leases located in Jefferson County, Texas. The exposure related to the audit is not currently determinable and therefore, no liability has been recorded on the Company’s consolidated financial statements. Sam Banks v. Yuma Energy, Inc. By letter dated March 27, 2019, the Company’s Board of Directors notified Sam L. Banks that it was terminating him as Chief Executive Officer of the Company pursuant to the terms of his amended and restated employment agreement dated April 20, 2017 (the “Employment Agreement”). On April 22, 2019, Mr. Banks submitted his resignation from the board of directors of the Company. On March 28, 2019, Mr. Banks, through his legal counsel, filed a petition (the “Petition”) in the 189th Judicial District Court of Harris County, Texas, naming the Company as defendant. The Petition alleges a breach of the Employment Agreement and seeks severance benefits in the amount of approximately $2.15 million. The Company denies his allegations. The Company’s retained counsel has engaged in early settlement discussions with Plaintiff’s counsel, but at this time, a settlement has not been reached. Counsel for the Company has filed an answer in response to Mr. Banks’ lawsuit, and discovery is proceeding. The Company intends to vigorously defend the lawsuit. No evaluation of the likelihood of an unfavorable outcome or associated economic loss can be made at this early stage; therefore, no liability has been recorded on the Company’s consolidated financial statements. Allison Renee Romero and M.A. Domatti Management Trust v. Yuma Energy, Inc. and Davis Petroleum Corp . This lawsuit, filed on May 21, 2019 in Cameron Parish, Louisiana against Yuma and Davis Petroleum Corp. (“DPC”), alleges that Yuma and DPC contaminated and otherwise damaged two 80-acre parcels owned by the plaintiffs as the result of Yuma’s and DPC’s activities related to an oil and gas intrastate field flowline located on the parcels. The suit alleges that Yuma’s and DPC’s operation of the flowline, and its ruptures, caused extensive soil and groundwater contamination of the two parcels. The suit asks for the costs of restoration, damages for diminution of the properties’ value and punitive damages, among other things. This matter has been referred to the Company’s insurance company. The Company believes, and has so informed the insurance company’s counsel handling the case, that it has already remediated the contamination complained of, in accordance with the State of Louisiana regulations. Because the matter is in a very preliminary stage, the Company cannot evaluate the likelihood of an unfavorable outcome or whether any liability would be covered by its insurance policy; as a result, no liability has been recorded on the Company’s consolidated financial statements.

16. SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	The Company is not aware of any subsequent events which would require recognition or disclosure in its consolidated financial statements, except as disclosed in the Company’s filings with the SEC.

3. REVENUE RECOGNITION (Tables)

3. REVENUE RECOGNITION (Tables)	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Disaggregation of revenue	Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Sales of natural gas and crude oil: Crude oil and condensate $ 1,081,674 $ 3,203,260 $ 3,280,696 $ 6,269,517 Natural gas 395,494 1,775,919 1,575,903 3,567,170 Natural gas liquids 192,248 843,398 791,494 1,631,426 Total revenues $ 1,669,416 $ 5,822,577 $ 5,648,093 $ 11,468,113

5. ASSET RETIREMENT OBLIGATIO_2

5. ASSET RETIREMENT OBLIGATIONS (Tables)	6 Months Ended
	Jun. 30, 2019
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations	Six Months Ended June 30, 2019 Asset retirement obligations at December 31, 2018 $ 11,271,859 Liabilities incurred - Liabilities settled - Accretion expense 251,669 Revisions in estimated cash flows - Asset retirement obligations at June 30, 2019 $ 11,523,528

6. FAIR VALUE MEASUREMENTS (Tab

6. FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
Fair value measurements by hierarchy	Fair value measurements at December 31, 2018 Significant Quoted prices other Significant in active observable unobservable markets inputs inputs (Level 1) (Level 2) (Level 3) Total Assets: Commodity derivatives – oil $ - $ 922,562 $ - $ 922,562 Commodity derivatives – gas - (158,376 ) - $ (158,376 ) Total assets $ - $ 764,186 $ - $ 764,186

7. COMMODITY DERIVATIVE INSTR_2

7. COMMODITY DERIVATIVE INSTRUMENTS (Tables)	6 Months Ended
	Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of derivative assets and liablities	Fair value as of June 30, 2019 December 31, 2018 Asset commodity derivatives: Current assets $ - $ 1,031,614 Noncurrent assets - 98,530 Total asset commodity derivatives - 1,130,144 Liability commodity derivatives: - Current liabilities - (280,456 ) Noncurrent liabilities - (85,502 ) Total liability commodity derivatives - (365,958 ) Total commodity derivative instruments $ - $ 764,186
Gains (losses) from commodity derivatives	Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2018 2018 Derivative settlements $ - $ (659,847 ) $ (1,076,497 ) $ (1,189,211 ) Mark to market on commodity derivatives - (1,435,723 ) (764,186 ) (2,157,619 ) Net gains (losses) from commodity derivatives $ - $ (2,095,570 ) $ (1,840,683 ) $ (3,346,830 )

10. DEBT AND INTEREST EXPENSE (

10. DEBT AND INTEREST EXPENSE (Tables)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Debt	June 30, December 31, 2019 2018 Senior credit facility $ 32,805,518 $ 34,000,000 Commodity debt payable 1,084,512 - Installment loan due 6/23/19 originating from the financing of insurance premiums at 6.14% interest rate - 742,953 Total debt 33,890,030 34,742,953 Less: current maturities (33,890,030 ) (34,742,953 ) Total long-term debt $ - $ -

12. LOSS PER COMMON SHARE (Tabl

12. LOSS PER COMMON SHARE (Tables)	6 Months Ended
	Jun. 30, 2019
LOSS PER COMMON SHARE:
Reconciliation of loss per common share	Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) attributable to common stockholders $ (3,966,396 ) $ (4,404,801 ) $ (20,007,261 ) $ (7,941,739 ) Weighted average common shares outstanding Basic 1,552,549 1,538,822 1,554,120 1,529,898 Add potentially dilutive securities: Unvested restricted stock awards - - - - Stock appreciation rights - - - - Stock options - - - - Series D preferred stock - - - - Diluted weighted average common shares outstanding 1,552,549 1,538,822 1,554,120 1,529,898 Net income (loss) per common share: Basic $ (2.55 ) $ (2.86 ) $ (12.87 ) $ (5.19 ) Diluted $ (2.55 ) $ (2.86 ) $ (12.87 ) $ (5.19 )

15. COMMITMENTS AND CONTINGEN_2

15. COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Supplemental information related to operating leases	Supplemental cash flow information related to the Company’s operating leases is included in the table below: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 454,895 Supplemental balance sheet information related to operating leases is included in the table below: June 30, 2019 Right-of-use lease assets $ 4,135,773 Accrued liabilities - current (838,418 ) Operating lease liabilities - long-term $ 3,297,355
Lease liability maturity	Operating Right-of-use Leases Remainder of 2019 $ 443,946 2020 865,350 2021 839,613 2022 847,208 2023 751,701 Thereafter 2,344,570 Total lease payments 6,092,388 Less imputed interest (1,956,615 ) Total lease liability $ 4,135,773

3. REVENUE RECOGNITION (Details

3. REVENUE RECOGNITION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Sales of natural gas and crude oil	$ 1,669,416	$ 5,822,577	$ 5,648,093	$ 11,468,113
Crude oil and condensate
Sales of natural gas and crude oil	1,081,674	3,203,260	3,280,696	6,269,517
Natural gas
Sales of natural gas and crude oil	395,494	1,775,919	1,575,903	3,567,170
NGLs
Sales of natural gas and crude oil	$ 192,248	$ 843,398	$ 791,494	$ 1,631,426

3. REVENUE RECOGNITION (Detai_2

3. REVENUE RECOGNITION (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Receivables from contracts with customers	$ 1,460,825	$ 2,282,200

5. ASSET RETIREMENT OBLIGATIO_3

5. ASSET RETIREMENT OBLIGATIONS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations, beginning			$ 11,271,859
Liabilities incurred			0
Liabilities settled			0
Accretion expense	$ 114,549	$ 140,161	251,669	$ 283,101
Revisions in estimated cash flows			0
Asset retirement obligations, ending	$ 11,523,528		$ 11,523,528

5. ASSET RETIREMENT OBLIGATIO_4

5. ASSET RETIREMENT OBLIGATIONS (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations	$ 128,539	$ 128,539

6. FAIR VALUE MEASUREMENTS (Det

6. FAIR VALUE MEASUREMENTS (Details)	Dec. 31, 2018USD ($)
Total assets	$ 764,186
Commodity derivatives - oil
Derivatives	922,562
Commodity derivatives - gas
Derivatives	(158,376)
Quoted prices in active markets (Level 1)
Total assets	0
Quoted prices in active markets (Level 1) | Commodity derivatives - oil
Derivatives	0
Quoted prices in active markets (Level 1) | Commodity derivatives - gas
Derivatives	0
Significant other observable inputs (Level 2)
Total assets	764,186
Significant other observable inputs (Level 2) | Commodity derivatives - oil
Derivatives	922,562
Significant other observable inputs (Level 2) | Commodity derivatives - gas
Derivatives	(158,376)
Significant unobservable inputs (Level 3)
Total assets	0
Significant unobservable inputs (Level 3) | Commodity derivatives - oil
Derivatives	0
Significant unobservable inputs (Level 3) | Commodity derivatives - gas
Derivatives	$ 0

7. COMMODITY DERIVATIVE INSTR_3

7. COMMODITY DERIVATIVE INSTRUMENTS (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Asset commodity derivatives:
Current assets	$ 0	$ 1,031,614
Noncurrent assets	0	98,530
Total	0	1,130,144
Liability commodity derivatives:
Current liabilities	0	(280,456)
Noncurrent liabilities	0	(85,502)
Total	0	(365,958)
Total commodity derivative instruments	$ 0	$ 764,186

7. COMMODITY DERIVATIVE INSTR_4

7. COMMODITY DERIVATIVE INSTRUMENTS (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative settlements	$ 0	$ (659,847)	$ (1,076,497)	$ (1,189,211)
Mark to market on commodity derivatives	0	(1,435,723)	(764,186)	(2,157,619)
Net losses from commodity derivatives	$ 0	$ (2,095,570)	$ (1,840,683)	$ (3,346,830)

10. DEBT AND INTEREST EXPENSE_2

10. DEBT AND INTEREST EXPENSE (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Total debt	$ 33,890,030	$ 34,742,953
Less: current maturities	(33,890,030)	(34,742,953)
Total long-term debt	0	0
Senior Credit Facility
Total debt	32,805,518	34,000,000
Commodity Debt Payable
Total debt	1,084,512	0
Installment loan due 6/23/19 originating from the financing of insurance premiums at 6.14% interest rate
Total debt	$ 0	$ 742,953

12. LOSS PER COMMON SHARE (Deta

12. LOSS PER COMMON SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
LOSS PER COMMON SHARE:
Net income (loss) attributable to common stockholders	$ (3,966,396)	$ (4,404,801)	$ (20,007,261)	$ (7,941,739)
Weighted average common shares outstanding
Basic	1,552,549	1,538,822	1,554,120	1,529,898
Add potentially dilutive securities
Unvested restricted stock awards	0	0	0	0
Stock appreciation rights	0	0	0	0
Stock options	0	0	0	0
Series D preferred stock	0	0	0	0
Diluted weighted average common shares outstanding	1,552,549	1,538,822	1,554,120	1,529,898
Net income (loss) per common share:
Basic	$ (2.55)	$ (2.86)	$ (12.87)	$ (5.19)
Diluted	$ (2.55)	$ (2.86)	$ (12.87)	$ (5.19)

12. LOSS PER COMMON SHARE (De_2

12. LOSS PER COMMON SHARE (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Unvested Restricted Stock Awards
Anti-dilutive securities excluded from the calculation of loss per share	319	9,904	319	9,904
Stock Appreciation Rights
Anti-dilutive securities excluded from the calculation of loss per share	10,133	113,852	10,133	113,852
Stock Options
Anti-dilutive securities excluded from the calculation of loss per share	10,402	59,911	10,402	59,911
Series D Preferred Stock
Anti-dilutive securities excluded from the calculation of loss per share	2,112,710	1,971,072	2,112,710	1,971,072

13. INCOME TAXES (Details Narra

13. INCOME TAXES (Details Narrative)	Jun. 30, 2019USD ($)
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 187,800,000

15. COMMITMENTS AND CONTINGEN_3

15. COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 454,895
Right-of-use lease assets	4,135,773
Accrued liabilities - current	(838,418)	$ 0
Operating lease liabilities - long-term	$ 3,297,355	$ 0

15. COMMITMENTS AND CONTINGEN_4

15. COMMITMENTS AND CONTINGENCIES (Details 1)	Jun. 30, 2019USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2019	$ 443,946
2020	865,350
2021	839,613
2022	847,208
2023	751,701
Thereafter	2,344,570
Total payments	6,092,388
Less: imputed interest	(1,956,615)
Total operating lease liability	$ 4,135,773

15. COMMITMENTS AND CONTINGEN_5

15. COMMITMENTS AND CONTINGENCIES (Details Narrative)	3 Months Ended	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)
Commitments and Contingencies Disclosure [Abstract]
Total lease expense	$ 232,922	$ 454,895
Weighted average remaining lease term for operating leases	6 years 9 months 18 days	6 years 9 months 18 days
Weighted average discount rate for operating leases	10.50%	10.50%