Cover
Cover | 9 Months Ended |
Sep. 30, 2023 | |
Cover [Abstract] | |
Document Type | S-1/A |
Amendment Flag | true |
Entity Registrant Name | Next Bridge Hydrocarbons, Inc. |
Entity Central Index Key | 0001936756 |
Entity Tax Identification Number | 87-2538731 |
Entity Incorporation, State or Country Code | NV |
Entity Address, Address Line One | 6300 Ridglea Place, |
Entity Address, Address Line Two | Suite 950 |
Entity Address, Address Line Three | Fort Worth, |
Entity Address, City or Town | TX |
Entity Address, Postal Zip Code | 76116 |
City Area Code | (817) |
Local Phone Number | 438-1937 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 569,298 | $ 1,989,419 |
Accounts receivable | 74,310 | |
Accounts receivable, related party | 177,519 | 163,366 |
Grants and other receivables | 150,000 | |
Prepaid expenses | 62,300 | 2,667 |
Total current assets | 959,117 | 2,229,762 |
Oil and natural gas properties, net | 79,695,928 | 45,663,470 |
Other assets | 80,179 | 25,000 |
TOTAL ASSETS | 80,735,224 | 47,918,232 |
Current liabilities: | ||
Accounts payable | 3,891,649 | 2,828,326 |
Accounts payable - Meta | 2,573,724 | |
Note payable - Meta | 20,000,000 | 12,500,000 |
Notes payable, related party | 2,000,000 | |
Accrued interest payable | 1,571,336 | 208,889 |
Total current liabilities | 30,036,709 | 15,537,215 |
Asset retirement obligations | 246,866 | 21,937 |
Total liabilities | 30,283,575 | 15,559,152 |
Stockholders equity: | ||
Preferred stock, par value $0.0001; 50,000,000 shares authorized; 0 issued and outstanding | ||
Common stock, par value $0.0001; 500,000,000 shares authorized; 165,472,241 issued and outstanding | 16,547 | |
Additional paid-in capital | 51,345,640 | 100,546,596 |
Accumulated deficit | (910,538) | (68,187,516) |
Total stockholders equity | 50,451,649 | 32,359,080 |
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $ 80,735,224 | $ 47,918,232 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | |||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 | |
Preferred Stock, Shares Outstanding | 0 | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 165,472,241 | 165,472,241 | |
Common Stock, Shares, Outstanding | 248,830,516 | 165,472,241 | 165,472,241 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Dec. 14, 2022 | Dec. 31, 2021 | |
Revenue | $ 15,904 | ||
Operating expenses | |||
Lease operating expenses | 75,330 | ||
Production and ad valorem tax | 1,001 | ||
General and administrative | 8,050,443 | ||
Depreciation, depletion and amortization | 4,642 | ||
Total operating expenses | 8,131,416 | ||
Operating loss | (8,115,512) | ||
Other income (expense) | |||
Interest expense | (212,201) | ||
Gain (loss) on sale of assets | 1,000 | ||
Gain on extinguishment of debt | 77,477 | ||
Interest income | 10,428 | ||
Total other income (expense)—net | (123,296) | ||
Loss before income taxes | (8,238,808) | ||
Provision for income tax | |||
Net loss | $ 910,538 | $ (8,238,808) | |
Loss per common share: | |||
Basic and Diluted | $ (8,238,808) | ||
Weighted average number of common shares outstanding: | |||
Basic and Diluted | 1 | ||
Oil [Member] | |||
Revenue | $ 4,675 | ||
Natural Gas [Member] | |||
Revenue | $ 11,229 | ||
Successor [Member] | |||
Revenue | 2,561 | ||
Operating expenses | |||
Lease operating expenses | 5,826 | ||
Production and ad valorem tax | 229 | ||
General and administrative | 907,045 | ||
Depreciation, depletion and amortization | |||
Total operating expenses | 913,100 | ||
Operating loss | (910,539) | ||
Other income (expense) | |||
Interest expense | |||
Gain (loss) on sale of assets | |||
Gain on extinguishment of debt | |||
Interest income | 1 | ||
Total other income (expense)—net | 1 | ||
Loss before income taxes | (910,538) | ||
Provision for income tax | |||
Net loss | $ (910,538) | ||
Loss per common share: | |||
Basic and Diluted | $ (0.01) | ||
Weighted average number of common shares outstanding: | |||
Basic and Diluted | 165,472,241 | ||
Successor [Member] | Oil [Member] | |||
Revenue | $ 1,276 | ||
Successor [Member] | Natural Gas [Member] | |||
Revenue | $ 1,285 | ||
Predecessor [Member] | |||
Revenue | $ 38,273 | ||
Operating expenses | |||
Lease operating expenses | 68,488 | ||
Production and ad valorem tax | 2,755 | ||
General and administrative | 7,905,860 | ||
Depreciation, depletion and amortization | |||
Total operating expenses | 7,977,103 | ||
Operating loss | (7,938,830) | ||
Other income (expense) | |||
Interest expense | |||
Gain (loss) on sale of assets | |||
Gain on extinguishment of debt | |||
Interest income | 495 | ||
Total other income (expense)—net | 495 | ||
Loss before income taxes | (7,938,335) | ||
Provision for income tax | |||
Net loss | $ (7,938,335) | ||
Loss per common share: | |||
Basic and Diluted | $ (0.05) | ||
Weighted average number of common shares outstanding: | |||
Basic and Diluted | 165,472,241 | ||
Predecessor [Member] | Oil [Member] | |||
Revenue | $ 16,796 | ||
Predecessor [Member] | Natural Gas [Member] | |||
Revenue | $ 21,477 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Common Stock [Member] Predecessor [Member] | Common Stock [Member] Successor [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] Predecessor [Member] | Additional Paid-in Capital [Member] Successor [Member] | Retained Earnings [Member] | Retained Earnings [Member] Predecessor [Member] | Retained Earnings [Member] Successor [Member] | Total | Predecessor [Member] | Successor [Member] |
Beginning balance, value at Dec. 31, 2020 | $ 89,331,629 | $ (59,948,708) | $ 29,382,921 | |||||||||
Beginning Balance, Shares at Dec. 31, 2020 | 1 | |||||||||||
Contributions from parent | 11,214,967 | $ 11,214,967 | ||||||||||
Net loss | (8,238,808) | (8,238,808) | ||||||||||
Ending balance, value at Dec. 31, 2021 | 100,546,596 | (68,187,516) | $ 32,359,080 | |||||||||
Ending Balance, Shares at Dec. 31, 2021 | 1 | 1 | ||||||||||
Contributions from parent | 317,792 | $ 317,792 | ||||||||||
Net loss | (836,035) | (836,035) | ||||||||||
Ending balance, value at Mar. 31, 2022 | 100,864,388 | (69,023,551) | 31,840,837 | |||||||||
Ending Balance, Shares at Mar. 31, 2022 | 1 | |||||||||||
Beginning balance, value at Dec. 31, 2021 | 100,546,596 | (68,187,516) | $ 32,359,080 | |||||||||
Beginning Balance, Shares at Dec. 31, 2021 | 1 | 1 | ||||||||||
Contributions from parent | $ 316,599 | |||||||||||
Net loss | (4,764,293) | |||||||||||
Issuance of common stock | ||||||||||||
Ending balance, value at Sep. 30, 2022 | $ 16,552 | 100,846,643 | (72,951,809) | 27,911,386 | ||||||||
Ending Balance, Shares at Sep. 30, 2022 | 165,523,363 | |||||||||||
Beginning balance, value at Dec. 31, 2021 | 100,546,596 | (68,187,516) | $ 32,359,080 | |||||||||
Beginning Balance, Shares at Dec. 31, 2021 | 1 | 1 | ||||||||||
Contributions from parent | $ 316,600 | $ 316,600 | ||||||||||
Net loss | (7,938,335) | (7,938,335) | ||||||||||
Issuance of common stock | 16,547 | (16,547) | ||||||||||
Issuance of common stock, Shares | 165,472,240 | |||||||||||
Ending balance, value at Dec. 14, 2022 | 16,547 | $ 16,547 | 100,846,649 | $ 51,345,640 | (76,125,851) | $ 24,737,345 | $ 51,362,187 | |||||
Ending Balance, Shares at Dec. 14, 2022 | 165,472,241 | 165,472,241 | ||||||||||
Beginning balance, value at Mar. 31, 2022 | 100,864,388 | (69,023,551) | $ 31,840,837 | |||||||||
Beginning Balance, Shares at Mar. 31, 2022 | 1 | |||||||||||
Net loss | (1,764,071) | (1,764,071) | ||||||||||
Ending balance, value at Jun. 30, 2022 | 100,863,195 | (70,787,622) | 30,075,573 | |||||||||
Ending Balance, Shares at Jun. 30, 2022 | 1 | |||||||||||
Net loss | (2,164,187) | (2,164,187) | ||||||||||
Issuance of common stock | $ 16,552 | (16,552) | ||||||||||
Issuance of common stock, Shares | 165,523,362 | |||||||||||
Ending balance, value at Sep. 30, 2022 | $ 16,552 | 100,846,643 | (72,951,809) | 27,911,386 | ||||||||
Ending Balance, Shares at Sep. 30, 2022 | 165,523,363 | |||||||||||
Beginning balance, value at Dec. 14, 2022 | $ 16,547 | 16,547 | $ 100,846,649 | 51,345,640 | $ (76,125,851) | $ 24,737,345 | $ 51,362,187 | |||||
Beginning Balance, Shares at Dec. 14, 2022 | 165,472,241 | 165,472,241 | ||||||||||
Contributions from parent | ||||||||||||
Net loss | (910,538) | 910,538 | (910,538) | |||||||||
Ending balance, value at Dec. 31, 2022 | $ 16,547 | 16,547 | 51,345,640 | 51,345,640 | (910,538) | (910,538) | 50,451,649 | $ 50,451,649 | ||||
Ending Balance, Shares at Dec. 31, 2022 | 165,472,241 | 165,472,241 | ||||||||||
Net loss | (2,387,451) | (2,387,451) | ||||||||||
Ending balance, value at Mar. 31, 2023 | $ 16,547 | 51,490,795 | (3,297,989) | 48,209,353 | ||||||||
Ending Balance, Shares at Mar. 31, 2023 | 165,472,241 | |||||||||||
Beginning balance, value at Dec. 31, 2022 | $ 16,547 | $ 16,547 | 51,345,640 | $ 51,345,640 | (910,538) | $ (910,538) | 50,451,649 | $ 50,451,649 | ||||
Beginning Balance, Shares at Dec. 31, 2022 | 165,472,241 | 165,472,241 | ||||||||||
Contributions from parent | ||||||||||||
Net loss | (7,318,418) | |||||||||||
Issuance of common stock | 28,341,814 | |||||||||||
Ending balance, value at Sep. 30, 2023 | $ 24,883 | 80,971,349 | (8,228,956) | 72,767,276 | ||||||||
Ending Balance, Shares at Sep. 30, 2023 | 248,830,516 | |||||||||||
Beginning balance, value at Mar. 31, 2023 | $ 16,547 | 51,490,795 | (3,297,989) | 48,209,353 | ||||||||
Beginning Balance, Shares at Mar. 31, 2023 | 165,472,241 | |||||||||||
Net loss | (2,455,753) | (2,455,753) | ||||||||||
Issuance of common stock | $ 8,336 | 28,333,478 | 28,341,814 | |||||||||
Issuance of common stock, Shares | 83,358,275 | |||||||||||
Ending balance, value at Jun. 30, 2023 | $ 24,883 | 80,208,045 | (5,753,742) | 74,479,186 | ||||||||
Ending Balance, Shares at Jun. 30, 2023 | 248,830,516 | |||||||||||
Net loss | (2,475,214) | (2,475,214) | ||||||||||
Ending balance, value at Sep. 30, 2023 | $ 24,883 | $ 80,971,349 | $ (8,228,956) | $ 72,767,276 | ||||||||
Ending Balance, Shares at Sep. 30, 2023 | 248,830,516 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 14, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities | ||||||||
Net loss | $ 910,538 | $ (2,387,451) | $ (836,035) | $ (7,318,418) | $ (4,764,293) | $ (8,238,808) | ||
Adjustments to reconcile net loss to net cash from operations: | ||||||||
Accretion expense | 5,865 | 17,961 | $ 1,092 | |||||
Bad debt expense | ||||||||
Depreciation, depletion and amortization | 4,642 | |||||||
Paid in kind interest | 948,099 | 208,889 | ||||||
Change in: | ||||||||
Accounts receivable | (4,271) | 23,340 | (94,310) | |||||
Accounts receivable, related party | (1,872) | 86,754 | ||||||
Prepayments - development costs | 43,520 | 101,005 | ||||||
Other assets | (25,000) | |||||||
Prepaid expenses | (8,608) | (3,954) | ||||||
Accounts payable and accrued expenses | (2,590,371) | (2,268,335) | 906,287 | |||||
Other payables | ||||||||
Accrued interest payable | ||||||||
Net cash provided by (used in) operating activities | (8,592,956) | (6,067,015) | (7,050,541) | |||||
Cash Flows From Investing Activities | ||||||||
Investment in oil and gas properties | (9,503,892) | (1,630,137) | (14,805,511) | |||||
Net cash used in investing activities | (9,503,892) | (1,630,137) | (14,805,511) | |||||
Cash Flows From Financing Activities | ||||||||
Proceeds from notes payable | 12,500,000 | |||||||
Contributions from parent | 317,792 | 316,599 | 11,214,967 | |||||
Net cash provided by financing activities | 22,412,547 | 7,816,599 | 23,714,967 | |||||
Net increase (decrease) in cash | 4,315,699 | 119,447 | 1,858,915 | |||||
Cash - beginning of period | 569,298 | 1,989,419 | 569,298 | 1,989,419 | $ 1,989,419 | 1,989,419 | 130,504 | |
Cash - end of period | 569,298 | 4,884,997 | 2,108,866 | 569,298 | 1,989,419 | |||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | 199,345 | 3,312 | ||||||
Cash paid for state franchise tax | ||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Account payable reduced by expense offset | ||||||||
Capitalized interest included in interest payable | 1,819,016 | 141,048 | ||||||
Successor [Member] | ||||||||
Cash Flows From Operating Activities | ||||||||
Net loss | (910,538) | |||||||
Adjustments to reconcile net loss to net cash from operations: | ||||||||
Accretion expense | 1,092 | |||||||
Bad debt expense | ||||||||
Depreciation, depletion and amortization | ||||||||
Paid in kind interest | ||||||||
Change in: | ||||||||
Accounts receivable | ||||||||
Accounts receivable, related party | ||||||||
Prepayments - development costs | ||||||||
Other assets | 39,185 | |||||||
Prepaid expenses | (58,225) | |||||||
Accounts payable and accrued expenses | 1,154,917 | |||||||
Other payables | ||||||||
Accrued interest payable | (1,091) | |||||||
Net cash provided by (used in) operating activities | 225,340 | |||||||
Cash Flows From Investing Activities | ||||||||
Investment in oil and gas properties | (1,976,029) | |||||||
Net cash used in investing activities | (1,976,029) | |||||||
Cash Flows From Financing Activities | ||||||||
Proceeds from notes payable | 2,000,000 | |||||||
Contributions from parent | ||||||||
Net cash provided by financing activities | 2,000,000 | |||||||
Net increase (decrease) in cash | 249,311 | |||||||
Cash - beginning of period | 319,987 | $ 569,298 | $ 569,298 | |||||
Cash - end of period | 569,298 | 319,987 | 569,298 | |||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | ||||||||
Cash paid for state franchise tax | ||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Account payable reduced by expense offset | ||||||||
Capitalized interest included in interest payable | 74,210 | |||||||
Predecessor [Member] | ||||||||
Cash Flows From Operating Activities | ||||||||
Net loss | (7,938,335) | |||||||
Adjustments to reconcile net loss to net cash from operations: | ||||||||
Accretion expense | ||||||||
Bad debt expense | (26,612) | |||||||
Depreciation, depletion and amortization | ||||||||
Paid in kind interest | ||||||||
Change in: | ||||||||
Accounts receivable | 74,310 | |||||||
Accounts receivable, related party | (14,153) | |||||||
Prepayments - development costs | (150,000) | |||||||
Other assets | (94,364) | |||||||
Prepaid expenses | (1,408) | |||||||
Accounts payable and accrued expenses | (64,982) | |||||||
Other payables | 2,589,363 | |||||||
Accrued interest payable | ||||||||
Net cash provided by (used in) operating activities | (5,626,181) | |||||||
Cash Flows From Investing Activities | ||||||||
Investment in oil and gas properties | (3,859,851) | |||||||
Net cash used in investing activities | (3,859,851) | |||||||
Cash Flows From Financing Activities | ||||||||
Proceeds from notes payable | 7,500,000 | |||||||
Contributions from parent | 316,600 | |||||||
Net cash provided by financing activities | 7,816,600 | |||||||
Net increase (decrease) in cash | (1,669,432) | |||||||
Cash - beginning of period | $ 319,987 | $ 1,989,419 | $ 1,989,419 | 1,989,419 | $ 1,989,419 | |||
Cash - end of period | 319,987 | $ 1,989,419 | ||||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | ||||||||
Cash paid for state franchise tax | ||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Account payable reduced by expense offset | 15,638 | |||||||
Capitalized interest included in interest payable | $ 1,289,328 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 4,884,997 | $ 569,298 |
Accounts receivable, related party | 0 | 177,519 |
Production receivable | 4,270 | |
Prepayments - development costs | 106,480 | 150,000 |
Prepaid expenses | 70,908 | 62,300 |
Total current assets | 5,066,655 | 959,117 |
Oil and natural gas properties, net | 119,538,170 | 79,695,928 |
Other assets | 105,179 | 80,179 |
TOTAL ASSETS | 124,710,004 | 80,735,224 |
Current liabilities: | ||
Accounts payable | 1,285,641 | 3,891,649 |
Prepayments, working interest owners | 5,611,892 | |
Accounts and Note Payable - Meta | 22,573,724 | |
Note Payable - Related Party | 41,589,362 | 2,000,000 |
Accrued interest payable | 3,191,007 | 1,571,336 |
Total current liabilities | 51,677,902 | 30,036,709 |
Asset retirement obligations | 264,826 | 246,866 |
Total liabilities | 51,942,728 | 30,283,575 |
Stockholders equity: | ||
Preferred stock, par value $0.0001, 50,000,000 shares authorized; -0- issued and outstanding September 30, 2023 and December 31, 2022 | ||
Common stock, par value $0.0001; 500,000,000 shares authorized; 248,830,516 issued and outstanding at September 30, 2023; 165,472,241 issued and outstanding at December 31, 2022 | 24,883 | 16,547 |
Additional paid-in capital | 80,971,349 | 51,345,640 |
Accumulated deficit | (8,228,956) | (910,538) |
Total stockholders equity | 72,767,276 | 50,451,649 |
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $ 124,710,004 | $ 80,735,224 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Common Stock, Shares, Outstanding | 248,830,516 | 165,472,241 | 165,472,241 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||||||||||
Oil and natural gas sales | $ 7,731 | $ 12,810 | $ 23,496 | $ 30,214 | $ 15,904 | |||||
Operating expenses: | ||||||||||
Lease operating expenses | 10,302 | 14,880 | 36,812 | 55,701 | 75,330 | |||||
Production taxes | 557 | 779 | 1,692 | 2,032 | 1,001 | |||||
General and administrative | 2,472,086 | 1,800,472 | 7,303,411 | 3,789,166 | 8,050,443 | |||||
Total operating expenses | 2,482,945 | 1,816,131 | 7,341,915 | 3,846,899 | 8,131,416 | |||||
Other income (expense) | ||||||||||
Interest expense | (360,877) | (948,099) | 212,201 | |||||||
Interest income | 11 | 1 | 491 | 10,428 | ||||||
Total other income (expense)—net | (360,866) | 1 | (947,608) | (123,296) | ||||||
Loss before income taxes | (2,475,214) | (2,164,187) | (7,318,418) | (4,764,293) | 8,238,808 | |||||
Provision for income taxes | ||||||||||
Net loss | $ 910,538 | $ (2,475,214) | $ (2,455,753) | $ (2,387,451) | $ (2,164,187) | $ (1,764,071) | $ (836,035) | $ (7,318,418) | $ (4,764,293) | $ (8,238,808) |
Loss per common share: | ||||||||||
Basic and Diluted | $ 0.01 | $ 0.01 | $ 0.04 | $ 0.03 | $ (8,238,808) | |||||
Weighted average number of common shares outstanding: | ||||||||||
Basic and Diluted | 248,830,516 | 163,673,730 | 185,319,449 | 163,673,730 | 1 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 89,331,629 | $ (59,948,708) | $ 29,382,921 | |
Beginning Balance, Shares at Dec. 31, 2020 | 1 | |||
Contributions from parent | 11,214,967 | $ 11,214,967 | ||
Net loss | (8,238,808) | (8,238,808) | ||
Ending balance, value at Dec. 31, 2021 | 100,546,596 | (68,187,516) | $ 32,359,080 | |
Ending Balance, Shares at Dec. 31, 2021 | 1 | 1 | ||
Contributions from parent | 317,792 | $ 317,792 | ||
Net loss | (836,035) | (836,035) | ||
Ending balance, value at Mar. 31, 2022 | 100,864,388 | (69,023,551) | 31,840,837 | |
Ending Balance, Shares at Mar. 31, 2022 | 1 | |||
Beginning balance, value at Dec. 31, 2021 | 100,546,596 | (68,187,516) | $ 32,359,080 | |
Beginning Balance, Shares at Dec. 31, 2021 | 1 | 1 | ||
Contributions from parent | $ 316,599 | |||
Net loss | (4,764,293) | |||
Common stock issued | ||||
Issuance of stock options | ||||
Ending balance, value at Sep. 30, 2022 | $ 16,552 | 100,846,643 | (72,951,809) | 27,911,386 |
Ending Balance, Shares at Sep. 30, 2022 | 165,523,363 | |||
Beginning balance, value at Dec. 31, 2021 | 100,546,596 | (68,187,516) | $ 32,359,080 | |
Beginning Balance, Shares at Dec. 31, 2021 | 1 | 1 | ||
Beginning balance, value at Mar. 31, 2022 | 100,864,388 | (69,023,551) | $ 31,840,837 | |
Beginning Balance, Shares at Mar. 31, 2022 | 1 | |||
Net loss | (1,764,071) | (1,764,071) | ||
Prior period adjustment | (1,193) | (1,193) | ||
Ending balance, value at Jun. 30, 2022 | 100,863,195 | (70,787,622) | 30,075,573 | |
Ending Balance, Shares at Jun. 30, 2022 | 1 | |||
Net loss | (2,164,187) | (2,164,187) | ||
Common stock issued | $ 16,552 | (16,552) | ||
Common stock issued, Shares | 165,523,362 | |||
Ending balance, value at Sep. 30, 2022 | $ 16,552 | 100,846,643 | (72,951,809) | 27,911,386 |
Ending Balance, Shares at Sep. 30, 2022 | 165,523,363 | |||
Net loss | 910,538 | |||
Ending balance, value at Dec. 31, 2022 | $ 16,547 | 51,345,640 | (910,538) | 50,451,649 |
Ending Balance, Shares at Dec. 31, 2022 | 165,472,241 | |||
Net loss | (2,387,451) | (2,387,451) | ||
Issuance of stock options | 145,155 | 145,155 | ||
Ending balance, value at Mar. 31, 2023 | $ 16,547 | 51,490,795 | (3,297,989) | 48,209,353 |
Ending Balance, Shares at Mar. 31, 2023 | 165,472,241 | |||
Beginning balance, value at Dec. 31, 2022 | $ 16,547 | 51,345,640 | (910,538) | 50,451,649 |
Beginning Balance, Shares at Dec. 31, 2022 | 165,472,241 | |||
Contributions from parent | ||||
Net loss | (7,318,418) | |||
Common stock issued | 28,341,814 | |||
Issuance of stock options | 1,292,231 | |||
Ending balance, value at Sep. 30, 2023 | $ 24,883 | 80,971,349 | (8,228,956) | 72,767,276 |
Ending Balance, Shares at Sep. 30, 2023 | 248,830,516 | |||
Beginning balance, value at Mar. 31, 2023 | $ 16,547 | 51,490,795 | (3,297,989) | 48,209,353 |
Beginning Balance, Shares at Mar. 31, 2023 | 165,472,241 | |||
Net loss | (2,455,753) | (2,455,753) | ||
Common stock issued | $ 8,336 | 28,333,478 | 28,341,814 | |
Common stock issued, Shares | 83,358,275 | |||
Issuance of stock options | 383,772 | 383,772 | ||
Ending balance, value at Jun. 30, 2023 | $ 24,883 | 80,208,045 | (5,753,742) | 74,479,186 |
Ending Balance, Shares at Jun. 30, 2023 | 248,830,516 | |||
Net loss | (2,475,214) | (2,475,214) | ||
Issuance of stock options | 763,304 | 763,304 | ||
Ending balance, value at Sep. 30, 2023 | $ 24,883 | $ 80,971,349 | $ (8,228,956) | $ 72,767,276 |
Ending Balance, Shares at Sep. 30, 2023 | 248,830,516 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows From Operating Activities | ||
Net loss | $ (7,318,418) | $ (4,764,293) |
Adjustments to reconcile net loss to net cash from operations: | ||
Accretion expense | 17,961 | |
Interest paid in kind | 948,099 | |
Expense related to stock options issued | 1,292,231 | |
Change in: | ||
Accounts receivable | (4,271) | 23,340 |
Accounts receivable, related party | (1,872) | |
Prepayments - development costs | 43,520 | |
Prepaid expenses | (8,608) | (3,954) |
Other assets | (25,000) | |
Accounts payable and accrued expenses | (2,590,371) | (2,268,335) |
Net cash from operating activities | (8,592,956) | (6,067,015) |
Cash Flows From Investing Activities | ||
Investment in oil and natural gas properties | (9,503,892) | (1,630,137) |
Net cash used in investing activities | (9,503,892) | (1,630,137) |
Cash Flows From Financing Activities | ||
Proceeds from notes payable, related party | 18,000,000 | 7,500,000 |
Payments on promissory notes | (1,000,000) | |
Payments on accrued interest | (199,345) | |
Prepayments, working interest owners | 5,611,892 | |
Contributions from parent, net | 316,599 | |
Net cash provided by financing activities | 22,412,547 | 7,816,599 |
Net increase (decrease) in cash | 4,315,699 | 119,447 |
Cash - beginning of period | 569,298 | 1,989,419 |
Cash - end of period | 4,884,997 | 2,108,866 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 199,345 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued for working interest in oil and natural gas properties | 28,341,814 | |
Account receivable-related party discharged in working interest acquisition | 177,519 | |
Capitalized Interest | $ 1,819,016 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
NATURE OF BUSINESS | 1. NATURE OF BUSINESS Next Bridge Hydrocarbons, Inc. (the Company) was incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed its name to Next Bridge Hydrocarbons, Inc. pursuant to its Amended and Restated Articles of Incorporation filed on June 30, 2022. The Company spun off from Meta Materials, Inc. (Meta) on December 14, 2022, resulting in the Company becoming an independent company (the Spin-Off). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Meta. Meta became the parent of the Companys subsidiaries in June 2021 in a merger transaction with Torchlight Energy Resources, Inc. (Torchlight), the previous parent of the subsidiaries and developer of the properties from their inception up to June 2021. The accompanying Financial Statements contain comparative financial disclosures from the Financial Statements of the predecessor Company described above. The accompanying Statement of Stockholders Equity contains a reclassification effective June 30, 2023, between Common Stock and Additional paid-in capital of $75,022 to correct the par value used to account for common stock issued in the Three Months Ended June 30, 2023. The Company is an energy company engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties in the United States. The Companys primary focus has been the development of interests in an oil and natural gas project the Company holds in the Orogrande Basin in West Texas in Hudspeth County, Texas (the Orogrande Project). In addition, the Company has minor interests in the Eastern edge of the Midland Basin in Texas (the Hazel Project), and two minor well interests in the Hunton wells located in Oklahoma (the Oklahoma Properties). The Company currently has five full-time employees, and the Company employs consultants for various roles as needed. The Company operates its business through five wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation (TEI), Hudspeth Oil Corporation, a Texas corporation (Hudspeth), Torchlight Hazel, LLC, a Texas limited liability company (Torchlight Hazel), Wolfbone Investments, LLC, a Texas limited liability company (Wolfbone) and Hudspeth Operating, LLC, a Texas limited liability company and wholly owned subsidiary of Hudspeth (Hudspeth Operating). All intercompany transactions have been eliminated in the consolidated financial statements. | 1. NATURE OF BUSINESS Next Bridge Hydrocarbons, Inc. (the Company) was incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed its name to Next Bridge Hydrocarbons, Inc. pursuant to its Amended and Restated Articles of Incorporation filed on June 30, 2022. The Company spun off from Meta Materials, Inc. (Meta) on December 14, 2022, resulting in the Company becoming an independent company (the Spin-Off). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Meta. Meta became the parent of the Companys subsidiaries in June 2021 in a merger transaction with Torchlight Energy Resources, Inc. (Torchlight), the previous parent of the subsidiaries and developer of the properties from their inception up to June 2021. The Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the United States. The Companys primary focus has been the development of interests in an oil and natural gas project the Company holds in the Orogrande Basin in West Texas in Hudspeth County, Texas (the Orogrande Project). In addition, the Company has minor interests in the Eastern edge of the Midland Basin in Texas (the Hazel Project), and two minor well interests in the Hunton wells located in Oklahoma (the Oklahoma Properties). The Company currently has six full-time employees, and the Company employs consultants for various roles as needed. The Company operates its business through four wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation (TEI), Hudspeth Oil Corporation, a Texas corporation (Hudspeth), Torchlight Hazel, LLC, a Texas limited liability company (Torchlight Hazel), and Hudspeth Operating, LLC, a Texas limited liability company and wholly owned subsidiary of Hudspeth (Hudspeth Operating). All intercompany transactions have been eliminated in the consolidated financial statements. |
GOING CONCERN
GOING CONCERN | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
GOING CONCERN | 2. GOING CONCERN At September 30, 2023, the Company had not yet achieved profitable operations. The Company had a net loss of $ 7,318,418 for the nine months ended September 30, 2023. The Company expects to incur further losses in the development of its business. The Company had a working capital deficit as of September 30, 2023 of $ 46,611,246 . These conditions raise substantial doubt about the Companys ability to continue as a going concern. The Companys ability to continue as a going concern is dependent on its ability to generate future profitable operations or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Managements plan to address the Companys ability to continue as a going concern includes: (1) obtaining debt or equity funding from private placement, institutional, or public sources; (2) obtaining loans from financial institutions, where possible, (3) participating in joint venture transactions with third parties, (4) entering into farmout or other participation arrangements with respect to the Orogrande Project or any other prospects acquired by the Company, or (5) acquiring drilling prospects and selling such prospects for a profit, through stock or cash transactions. Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful. These consolidated financial statements have been prepared assuming that the Company will continue as a going concern and therefore, the financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amount and classifications of liabilities that may result from the outcome of this uncertainty. | 2. GOING CONCERN At December 31, 2022, the Company had not yet achieved profitable operations. The Company had a net loss of $ 910,538 29,077,591 The Companys ability to continue as a going concern is dependent on its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Managements plan to address the Companys ability to continue as a going concern includes: (1) obtaining debt or equity funding from private placement, institutional, or public sources; (2) obtain loans from financial institutions, where possible, or (3) participating in joint venture transactions with third parties. Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful. These consolidated financial statements have been prepared assuming that the Company will continue as a going concern and therefore, the financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amount and classifications of liabilities that may result from the outcome of this uncertainty. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
SIGNIFICANT ACCOUNTING POLICIES | 3. SIGNIFICANT ACCOUNTING POLICIES The Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America. Accounting principles followed and the methods of applying those principles, which materially affect the determination of financial position, results of operations and cash flows are summarized below: Use of estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and certain assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Basis of presentation —The financial statements are presented on a consolidated basis and include the accounts of Next Bridge Hydrocarbons, Inc. and its wholly owned subsidiaries, TEI, Hudspeth, Torchlight Hazel, Wolfbone, and Hudspeth Operating. All significant intercompany balances and transactions have been eliminated. As noted above, the Company was involved in the Spin-Off on December 14, 2022. In the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. Risks and uncertainties —The Companys operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging business, including the potential risk of business failure. Concentration of risks —At times the Companys cash balances are in excess of amounts guaranteed by the Federal Deposit Insurance Corporation. The Companys cash is placed with a highly rated financial institution, and the Company regularly monitors the creditworthiness of the financial institutions with which it does business. Fair value of financial instruments —Financial instruments consist of cash, receivables, convertible note receivable, payables and promissory notes, if any. The estimated fair values of cash, receivables, and payables approximate the carrying amount due to the relatively short maturity of these instruments. The carrying amounts of any promissory notes approximate their fair value giving affect for the term of the note and the effective interest rates. For assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration. ● Level 3 inputs are unobservable inputs based on managements own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Cash and cash equivalents – Cash and cash equivalents include certain investments in highly liquid instruments with original maturities of three months or less. Accounts receivable – Accounts receivable consist of amounts due from a related party for their share of expenses paid on their behalf by the Company. Management reviews receivables periodically and reduces the carrying amount by a valuation allowance that reflects managements best estimate of the amount that may not be collectible. As of September 30, 2023, no valuation allowance was considered necessary. Oil and natural gas properties – The Company uses the full cost method of accounting for exploration and development activities as defined by the SEC. Under this method of accounting, the costs of unsuccessful, as well as successful, exploration and development activities are capitalized as properties and equipment. This includes any internal costs that are directly related to property acquisition, exploration and development activities but does not include any costs related to production, general corporate overhead or similar activities. Oil and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. Gains and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Companys interest in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually charged to accumulated depreciation. Capitalized interest – The Company capitalizes interest on unevaluated properties during the periods in which they are excluded from costs being depleted or amortized. During the nine months ended September 30, 2023, the Company capitalized $ 1,819,016 of interest on unevaluated properties. Capitalized interest for the year ended December 31, 2022, was $ 1,363,538 . Depreciation, depletion, and amortization – The depreciable base for oil and natural gas properties includes the sum of all capitalized costs net of accumulated depreciation, depletion, and amortization (DD&A), estimated future development costs and asset retirement costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and natural gas properties is amortized on a unit-of-production method. Ceiling test – Future production volumes from oil and natural gas properties are a significant factor in determining the full cost ceiling limitation of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a ceiling test that determines a limit on the book value of oil and natural gas properties. If the net capitalized cost of proved oil and natural gas properties, net of related deferred income taxes, plus the cost of unproved oil and natural gas properties, exceeds the present value of estimated future net cash flows discounted at 10 percent, net of related realizable tax affects, plus the cost of unproved oil and natural gas properties, the excess is charged to expense and reflected as additional accumulated DD&A. The Company did not record an impairment expense for either the nine months ended September 30, 2023 or for the year ended December 31, 2022. The ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment costs. The determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future. Asset retirement obligations – The fair value of a liability for an assets retirement obligation (ARO) is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized as part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period, and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction of the ARO liability. Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. Income taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. Authoritative guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has reviewed the Companys tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of limitation are three to four years from their respective filings. Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for the nine months ended September 30, 2023, and for the year ended December 31, 2022. Revenue recognition – The Companys revenue is typically generated from contracts to sell natural gas, crude oil or NGLs produced from interests in oil and natural gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify a delivery point which represents the point at which control of the product is transferred to the customer. The Company elects to treat contracts to sell oil and natural gas production as normal sales, which are then accounted for as contracts with customers. The Company has determined that these contracts represent multiple performance obligations, which are satisfied when control of the commodity transfers to the customer, typically through the delivery of the specified commodity to a designated delivery point. Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring control of those goods to the customer. Amounts allocated in the Companys price contracts are based on the standalone selling price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred. Gain or loss on derivative instruments is outside the scope of ASC 606, Revenue Recognition Producer Gas Imbalances. Basic and diluted earnings (loss) per share – Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed in the same way as basic earnings (loss) per common share except that the denominator is increased to include the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional common shares were dilutive. The Company had no dilutive shares for the nine months ended September 30, 2023, or for the year ended December 31, 2022. Environmental laws and regulations – The Company is subject to extensive federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their future economic benefit. The Company believes that it is in compliance with existing laws and regulations. The Company accrued no liability as of September 30, 2023 and December 31, 2022. Recent accounting pronouncements adopted – No new accounting pronouncements have been adopted or issued that would impact the financial statements of the Company. | 3. SIGNIFICANT ACCOUNTING POLICIES The Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America. Accounting principles followed and the methods of applying those principles, which materially affect the determination of financial position, results of operations and cash flows are summarized below: Use of estimates Basis of presentation In the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. Risks and uncertainties In January 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus (COVID-19) and the significant risks to the international community and economies as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and thereafter, COVID-19 continued to spread throughout the U.S. and worldwide. In addition, actions taken by OPEC members and other exporting nations on the supply and demand in global oil and natural gas markets resulted in significant negative pricing pressure in the first half of 2020, followed by a recovery in pricing and an increase in demand in the second half of 2020 and into 2021. However, multiple variants emerged in 2021 and became highly transmissible, which contributed to additional pricing volatility during 2021 to date. The financial results of companies in the oil and natural gas industry have been impacted materially as a result of changing market conditions. Such circumstances generally increase uncertainty in the Partnerships accounting estimates. Although demand and market prices for oil and natural gas have recently increased, due to the rising energy use and the improvement in U.S. economic activity, we cannot predict events that may lead to future price volatility and the near-term energy outlook remains subject to heightened levels of uncertainty. The Company is continuing to closely monitor the overall impact and the evolution of the COVID-19 pandemic, including the ongoing spread of any variants, along with future OPEC actions on all aspects of the Companys business, including how these events may impact the Companys future operations, financial results, liquidity, employees, and operators. Additional actions may be required in response to the COVID-19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely affect general and local economic conditions. The Company cannot predict the long- term impact of these events on our liquidity, financial position, results of operations or cash flows due to uncertainties including the severity of COVID-19 or any of the ongoing variants, and the effect the virus will have on the demand for oil and natural gas. These situations remain fluid and unpredictable, and the Company is actively managing its response. Concentration of risks Fair value of financial instruments For assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration. ● Level 3 inputs are unobservable inputs based on managements own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Cash and cash equivalents Accounts receivable Oil and natural gas properties Oil and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. Gains and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Companys interest in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually charged to accumulated depreciation. Capitalized interest 74,210 1,289,328 141,048 Depreciation, depletion, and amortization Ceiling test The ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment costs. The determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future. Asset retirement obligations Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. Income taxes Authoritative guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has reviewed the Companys tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of limitation are three to four years from their respective filings. Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for the successor period, for the predecessor period, and for the year ended December 31, 2021. Revenue recognition Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring control of those goods to the customer. Amounts allocated in the Companys price contracts are based on the standalone selling price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred. Gain or loss on derivative instruments is outside the scope of ASC 606, Revenue Recognition Producer Gas Imbalances. Basic and diluted earnings (loss) per share Environmental laws and regulations Recent accounting pronouncements not yet adopted Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
SPIN-OFF
SPIN-OFF | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
SPIN-OFF | 4. SPIN-OFF Effective December 14, 2022 (the Spin-Off Date), the Company and all of its wholly owned subsidiaries were involved in a spin off transaction from the Companys former parent, Meta. Meta spun the Company and the Companys wholly owned oil and natural gas subsidiaries in fulfillment of a preferred shareholder liability and other working capital items. As part of the Spin-Off, a change in control event occurred which is accounted for under ASC 805, Business Combination The following table summarizes the fair value of the assets acquired and liabilities assumed at the Spin-Off Date. Schedule of Fair Value of Assets Acquired and Liabilities Assumed Consideration in common stock $ 51,362,187 Recognized Assets and Liabilities Cash and cash equivalents $ 319,987 Accounts receivable, related party 177,519 Prepaids 154,075 Oil and natural gas properties 77,645,689 Other assets 119,364 Accounts payable (5,310,456 ) Notes payable (20,000,000 ) Accrued interest (1,498,217 ) Asset retirement obligation (245,774 ) Net Assets Recognized $ 51,362,187 |
OIL & NATURAL GAS PROPERTIES
OIL & NATURAL GAS PROPERTIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Extractive Industries [Abstract] | ||
OIL & NATURAL GAS PROPERTIES | 4. OIL & NATURAL GAS PROPERTIES The following table presents the capitalized costs for oil and natural gas properties of the Company: Schedule of Capitalized Cost for Oil and Natural Gas September 30, 2023 December 31, 2022 Evaluated costs subject to amortization $ — $ — Unevaluated costs 119,538,170 79,695,928 Total capitalized costs 119,538,170 79,695,928 Less accumulated depreciation, depletion and amortization — — Total oil and gas properties $ 119,538,170 $ 79,695,928 Unevaluated costs as of September 30, 2023, and December 31, 2022, include cumulative costs of developing projects including the Orogrande and Hazel Projects in West Texas and the costs related to the Oklahoma Properties. In accordance with required accounting adjustments related to the Spin-Off, the carrying value of the oil and natural gas assets were adjusted to fair value as of December 15, 2022. The Company periodically adjusts for the separation of evaluated versus unevaluated costs within its full cost pool to recognize the value impairment related to the expiration of, or changes in market value, of unevaluated leases. The impact of reclassifications as they become necessary is to increase the basis for calculation of future periods depletion, depreciation and amortization which effectively recognizes the impairment on the consolidated statement of operations over future periods. Reclassified costs also become evaluated costs for purposes of ceiling tests, and which may cause recognition of increased impairment expense in future periods. There were no remaining cumulative unevaluated costs which had been reclassified within the Companys full cost pool totals as of September 30, 2023 or December 31, 2022 since the Company had no proved reserve value associated with our properties. Due to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a write-down could occur. Proved reserves are estimated quantities of crude oil, natural gas, and NGLs, which geological and engineering data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions. The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities are not in place or for which transportation or marketing contracts are not in place. Estimated reserves to be developed through secondary or tertiary recovery processes are classified as unevaluated properties. Current Projects The Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the United States. The Company is primarily focused on the acquisition of early-stage projects, the development and delineation of these projects, and then the monetization of those assets once these activities are completed. The Companys primary focus is the development of interests in oil and natural gas projects it holds in the Permian Basin in Hudspeth County in West Texas. The Company also holds minor interests in certain other oil and natural gas projects in Central Oklahoma that it is in the process of divesting. As of September 30, 2023, the Company had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, and two wells in Central Oklahoma. Upon the closing of transactions contemplated by the McCabe Contribution Agreement (defined below), the Company will hold a portion of the Back-In Interest (defined below) in the Orogrande Project and a portion of the Bronco Prospect (defined below). Orogrande Project, West Texas On August 7, 2014, Torchlight entered into a Purchase Agreement with Hudspeth, McCabe Petroleum Corporation (MPC), and Gregory McCabe (Mr. McCabe). Mr. McCabe was the sole owner of both Hudspeth and MPC. Under the terms and conditions of the Purchase Agreement, Torchlight purchased 100% of the capital stock of Hudspeth which held certain oil and natural gas assets, including a 100% working interest in approximately 172,000 predominately contiguous acres in the Orogrande Basin in West Texas. Mr. McCabe has, at his option, a 10% working interest back-in after payout and a reversionary interest if drilling obligations are not met, all under the terms and conditions of a participation and development agreement among Hudspeth, MPC and Mr. McCabe. Up to 100% of such back-in interest is expected to be contributed to the Company pursuant to the McCabe Contribution Agreement. Mr. McCabe also holds a 4.5% overriding royalty interest in the Orogrande acreage, which he obtained prior to, and was not a part of the August 2014 transaction. Effective March 27, 2017, the Orogrande acreage became subject to a University Lands D&D Unit Agreement (DDU Agreement), which allows for all 192 existing leases covering approximately 134,000 gross acres leased from University Lands to be combined into one drilling and development unit for development purposes. On or about October 11, 2022, the DDU Agreement was amended to provide that the term of the DDU Agreement expires on December 31, 2024, and the time to drill on the drilling and development unit continues through December 31, 2024. The DDU Agreement, as amended, also grants the right to extend the DDU Agreement through December 31, 2029 if compliance with the DDU Agreement is met and the extension fee associated with the additional time is paid. The Company expects to exercise its option to extend the term under the DDU Agreement prior to its expiration. Drilling obligations under the DDU Agreement, as amended, include four wells in 2021 and five wells per year in years 2022, 2023 and 2024. The drilling obligations are minimum yearly requirements and may be exceeded if acceleration is desired. While drilling wells under our 2022 drilling obligation, our operations team deployed a new mist drilling solution that increased hole stability, which we believe will result in meaningful cost savings for additional wells drilled in the Orogrande Project. Multiple test wells were drilled in the Orogrande Project in order to stay in compliance with the DDU Agreement. While these previously drilled wells may have potential to produce hydrocarbons to sell commercially in the future, we have no immediate plans to deploy the additional capital necessary to sell production from these wells to third parties. Instead, we plan to use the results from these wells to determine our drilling plans for future wells, including reservoir locations, target depths and designated acreage, in the Orogrande Project. Notwithstanding the foregoing, development of the wells continued through September 30, 2023, to further capture and document the scientific base in support of demonstrating the production potential of the property. As of September 30, 2023, we have commenced drilling activities under the 2023 drilling program, drilling two of the five wells required for the program, and depending on the results of those drilling activities, we may consider deploying the additional capital necessary to sell oil production from the wells to third parties. Acquisition of Working Interest On December 21, 2022, the Company entered into that certain Agreement and Plan of Merger (the Merger Agreement) with Hudspeth, Wolfbone, MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such leases, pooling and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in Orogrande Project will be transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations (as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance of 56,297,638 shares of Company common stock to Mr. McCabe (such series of transactions collectively, the Merger). The Merger became effective on April 25, 2023. As a result of the Merger, the Company acquired Wolfbones 22.6249% remaining rights to working interest in the Orogrande Project in consideration of the issuance by the Company of the 56,297,638 shares of the Companys common stock to Mr. McCabe. The Merger was completed in accordance with the Texas Business Organizations Code, whereby (a) the Company formed NBH MergeCo, LLC with the State of Texas (MergeCo) in order to cause Hudspeth to assign all of its rights under the Merger Agreement to MergeCo and MergeCo assumed Hudspeths obligations under the Merger Agreement, (b) MergeCo, Wolfbone and MPC merged with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone became a direct and wholly-owned subsidiary of the Company. The closing of the transactions contemplated by the Merger Agreement occurred on May 11, 2023. On May 11, 2023, the Company and its wholly owned subsidiary, Hudspeth, entered into a contribution and exchange agreement with each of the prior working interest owners in the Orogrande Project named in the table below (each an Orogrande Owner and collectively, the Orogrande Owners), pursuant to which, the Company issued to the Orogrande Owners the number of shares of the Companys common stock set forth opposite such Orogrande Owners name below in exchange for and in order to acquire such Orogrande Owners rights to working interest in the Orogrande Project. Schedule of Common Stock to be issued to Orogrande Owners Shares of Common Stock Working Interest Contribution Dingus Investments, Inc. 7,050,382 2.8334 % Pandora Energy, LP 6,220,779 2.5000 % Kennedy Minerals, Ltd 6,220,779 2.5000 % The de Compiegne Property Company No. 20, Ltd 6,220,779 2.5000 % Loma Hombre Energy, LLC 622,078 0.2500 % Sero Capital, LLC 725,840 0.2917 % TOTAL 27,060,637 10.8751 % The Orogrande Project ownership as of September 30, 2023, is detailed as follows: Schedule of Orogrande Project Ownership Revenue Working Interest Interest University Lands – Mineral Owner 20.000% ORRI – Magdalena Royalties, LLC, an entity controlled by Gregory McCabe, Chairman of the Board 4.500% ORRI – Unrelated Party 0.500% Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc. 56.250% 75.000% Wolfbone Investments, LLC, a subsidiary of Next Bridge Hydrocarbons, Inc. 18.750% 25.000% Total 100.000% 100.000% Hazel Project in the Midland Basin in West Texas Effective April 4, 2016, TEI acquired from MPC a 66.66% working interest in approximately 12,000 acres in the Midland Basin. A back-in after payout of a 25% working interest was retained by MPC and another unrelated working interest owner. In October 2016, the holders of all of Torchlights then-outstanding shares of Series C Preferred Stock (which were issued in July 2016) elected to convert into a total 33.33% working interest in our Hazel Project, reducing TEIs ownership from 66.66% to a 33.33% working interest. Acquisition of Additional Interests in Hazel Project On January 30, 2017, Torchlight entered into and closed an Agreement and Plan of Reorganization and a Plan of Merger with an entity which was wholly owned by Mr. McCabe, which resulted in the acquisition of approximately 40.66% working interest in the 12,000 gross acres, 9,600 net acres, in the Hazel Project. Also on January 30, 2017, Torchlight entered into and closed a Purchase and Sale Agreement with Wolfbone. Under the agreement, Torchlight acquired certain of Wolfbones Hazel Project assets, including its interest in the Flying B Ranch #1 well and the 40-acre unit surrounding the well. Upon the closing of the transactions, the Torchlight working interest in the Hazel Project increased by 40.66% to a total ownership of 74%. Effective June 1, 2017, Torchlight acquired an additional 6% working interest from unrelated working interest owners increasing its working interest in the Hazel project to 80%, and an overall net revenue interest of 75%. Seven test wells have been drilled on the Hazel Project to capture and document the scientific base in support of demonstrating the production potential of the property. Option Agreement with Masterson Hazel Partners, LP On August 13, 2020, the Companys subsidiaries TEI and Torchlight Hazel (collectively, Torchlight Subs) entered into an option agreement (the Option Agreement) with Masterson Hazel Partners, LP (MHP) and MPC. Under the agreement, MHP was obligated to drill and complete, or cause to be drilled and completed, at its sole cost and expense, a new lateral well (the Well) on the Hazel Project, sufficient to satisfy Torchlight Subss continuous development obligations on the southern half of the prospect no later than September 30, 2020. MHP has satisfied this drilling obligation. MHP paid to Torchlight Subs $1,000 as an option fee at the time of execution of the Option Agreement. MHP is entitled to receive, as its sole recourse for the recoupment of drilling costs, the revenue from production of the Well attributable to Torchlight Subss interest until such time as it has recovered its reasonable costs and expenses for drilling, completing, and operating the well. In exchange for MHP satisfying the above drilling obligations, Torchlight Subs granted to MHP the exclusive right and option to perform operations, at MHPs sole cost and expense, on the Hazel Project sufficient to satisfy Torchlight Subss continuous development obligations on the northern half of the prospect. MHP declined to exercise its option to purchase the entire Hazel Project. Hunton Play, Central Oklahoma As of September 30, 2023, the Company was producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove. The McCabe Contribution Agreement On July 25, 2023, the Company entered into a Contribution Agreement among the Company, Mr. McCabe, and MPC, an entity exclusively owned and operated by Mr. McCabe (the McCabe Contribution Agreement), pursuant to which Mr. McCabe will contribute up to a ten percent (10%) back-in working interest option for the Orogrande Project exercisable following the point in time at which the proceeds of all production from all operations conducted on the Orogrande Project (exclusive of royalty, overriding royalty and taxes chargeable to the working interest) equals the actual cost incurred by NBH and its predecessors in drilling, testing, equipping and the cost of operating the wells located on the Orogrande Prospect, inclusive of overhead charges (the Back-In Interest), an option originally granted to Mr. McCabe pursuant to that certain Participation Agreement, dated September 23, 2014 (the Participation Agreement), by and among Mr. McCabe, Hudspeth, and MPC, and MPC will contribute up to one hundred percent (100%) of the interest currently held by MPC in the drilling project located on over 1,150 acres in Vermillion Parish, Louisiana (the Bronco Prospect). Pursuant to the McCabe Contribution Agreement, and subject to the satisfaction of certain conditions provided therein, including the effectiveness of the Companys Registration Statement on Form S-1 (File No. 333-273442) filed with the SEC on July 26, 2023 (as amended, the Registration Statement), Mr. McCabe will contribute an amount of the Back-In Interest and MPC will contribute an amount of the Bronco Prospect in proportion to the percentage of shares of common stock of NBH that are directly registered in the name of the beneficial owner with the Companys transfer agent on or prior to the record date (as defined in the Registration Statement) and remain directly registered with the Companys transfer agent for the holding period (as defined in the Registration Statement). | 5. OIL & NATURAL GAS PROPERTIES The following table presents the capitalized costs for oil and natural gas properties of the Company: Schedule of Capitalized Cost for Oil and Natural Gas December 31, December 31, Successor Predecessor Evaluated costs subject to amortization $ — $ — Unevaluated costs 79,695,928 61,319,652 Total Capitalized Costs 79,695,928 61,319,652 Less accumulated depreciation, depletion and amortization — (15,656,182 ) Total oil and gas properties $ 79,695,928 $ 45,663,470 Unevaluated costs as of December 31, 2022, and December 31, 2021, include cumulative costs of developing projects including the Orogrande and Hazel Projects in West Texas and the costs related to the Oklahoma Properties. In accordance with required accounting adjustments related to the Spin-Off, the carrying value of the oil and natural gas assets were adjusted to fair value as of December 15, 2022. The Company periodically adjusts for the separation of evaluated versus unevaluated costs within its full cost pool to recognize the value impairment related to the expiration of, or changes in market value, of unevaluated leases. The impact of reclassifications as they become necessary is to increase the basis for calculation of future periods depletion, depreciation and amortization which effectively recognizes the impairment on the consolidated statement of operations over future periods. Reclassified costs also become evaluated costs for purposes of ceiling tests, and which may cause recognition of increased impairment expense in future periods. The remaining cumulative unevaluated costs which have been reclassified within the Companys full cost pool totals $-0- as of December 31, 2022. As of December 31, 2022, evaluated costs are $-0- since the Company have no proved reserve value associated with our properties. Due to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a write-down could occur. Proved reserves are estimated quantities of crude oil, natural gas, and natural gas liquids, which geological and engineering data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions. The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities are not in place or for which transportation and/or marketing contracts are not in place. Estimated reserves to be developed through secondary or tertiary recovery processes are classified as unevaluated properties. Current Projects The Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the United States. The Company is primarily focused on the acquisition of early-stage projects, the development and delineation of these projects, and then the monetization of those assets once these activities are completed. The Companys primary focus is the development of interests in oil and natural gas projects it holds in the Permian Basin in West Texas. The Company also holds minor interests in certain other oil and natural gas projects in Central Oklahoma that it is in the process of divesting. As of December 31, 2022, the Company had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, and two wells in Central Oklahoma. Orogrande Project, West Texas On August 7, 2014, Torchlight entered into a Purchase Agreement with Hudspeth, McCabe Petroleum Corporation (MPC), and Gregory McCabe (Mr. McCabe). Mr. McCabe was the sole owner of both Hudspeth and MPC. Under the terms and conditions of the Purchase Agreement, Torchlight purchased 100% of the capital stock of Hudspeth which held certain oil and natural gas assets, including a 100% working interest in approximately 172,000 predominately contiguous acres in the Orogrande Basin in West Texas. Mr. McCabe has, at his option, a 10% working interest back-in after payout and a reversionary interest if drilling obligations are not met, all under the terms and conditions of a participation and development agreement among Hudspeth, MPC and Mr. McCabe. Mr. McCabe also holds a 4.5% overriding royalty interest in the Orogrande acreage, —which he obtained prior to, and was not a part of the August 2014 transaction. As of December 31, 2022, leases covering approximately 134,000 acres remain in effect. Effective March 27, 2017, the property became subject to a University Lands D&D Unit Agreement (DDU Agreement) which allows for all 192 existing leases covering approximately 134,000 gross acres leased from University Lands to be combined into one drilling and development unit for development purposes. The term of the DDU Agreement expires on December 31, 2023, and the time to drill on the drilling and development unit continues through December 31, 2023. The DDU Agreement also grants the right to extend the DDU Agreement through December 31, 2028 if compliance with the DDU Agreement is met and the extension fee associated with the additional time is paid. Drilling obligations under the DDU Agreement include five wells per year in years 2021, 2022 and 2023. The drilling obligations are minimum yearly requirements and may be exceeded if acceleration is desired. All drilling obligations through December 31, 2022, have been met. Torchlight had drilled 14 test wells in the Orogrande in order to stay in compliance with the DDU Agreement, as well as, to test for potential shallow pay zones and deeper pay zones that may be present on structural plays. Development of the wells continued through December 31, 2022, to further capture and document the scientific base in support of demonstrating the production potential of the property. As of December 31, 2022, a total of 15 test wells have been drilled on the acreage. On March 9, 2020, holders of certain notes payable by Torchlight entered into a Conversion Agreement under which the noteholders elected to convert $6,000,000 of principal and approximately $1,331,000 of accrued interest on the notes held by such holders, in accordance with their terms, into an aggregate 6% working interest (of all such holders) in the Orogrande Project. The Company intends to make offers and enter into agreements with one or more of the other current working interest owners in the Orogrande Project (each an Orogrande Owner and collectively, the Orogrande Owners). The Company anticipates offering the Orogrande Owners shares of common stock in exchange for such Orogrande Owners respective working interest in the Orogrande Project. The Company intends to offer the number of shares of common stock necessary such that each participating Orogrande Owner would own the percentage of common stock then outstanding in proportion to the percentage owned in the working interest of the Orogrande Project. For illustration purposes, if an Orogrande Owner owns 10% of the working interest of the Orogrande Project, and such Orogrande Owner elects to participate and accept the Companys offer of shares of common stock, then such Orogrande Owner will be offered 10% of the aggregate amount of outstanding shares of common stock. The Companys decision to enter into these transactions will depend on ability of the Company and each Orogrande Owner to negotiate and enter into definitive agreements related to such transaction and the Companys board of directors receiving an industry-standard fairness opinion from an investment banking firm. One of the Orogrande Owners is Wolfbone Investments, LLC (Wolfbone), an entity controlled by Mr. McCabe. Mr. McCabe owns, directly and indirectly through entities he owns or controls, 7.75% of the Companys common stock as of December 31, 2022, which would increase by the proportionate exchange of working interest for shares of the Companys common stock if consummated. The Orogrande Project ownership as of December 31, 2022, is detailed as follows: Schedule of Orogrande Project Ownership Revenue Interest Working Interest University Lands - Mineral Owner 20.000 % ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe 4.500 % ORRI - Unrelated Party 0.500 % Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc. 49.875 % 66.500% Wolfbone Investments, LLC, an entity controlled by Gregory McCabe 18.750 % 25.000% Conversion by Note Holders in March, 2020 4.500 % 6.000% Unrelated Party 1.875 % 2.500% Total 100.000 % 100.000% Hazel Project in the Midland Basin in West Texas Effective April 4, 2016, TEI acquired from MPC a 66.66% working interest in approximately 12,000 acres in the Midland Basin. A back-in after payout of a 25% working interest was retained by MPC and another unrelated working interest owner. In October 2016, the holders of all of Torchlights then-outstanding shares of Series C Preferred Stock (which were issued in July 2016) elected to convert into a total 33.33% working interest in our Hazel Project, reducing TEIs ownership from 66.66% to a 33.33% working interest. Acquisition of Additional Interests in Hazel Project On January 30, 2017, Torchlight entered into and closed an Agreement and Plan of Reorganization and a Plan of Merger with an entity which was wholly owned by Mr. McCabe, which resulted in the acquisition of approximately 40.66% working interest in the 12,000 gross acres, 9,600 net acres, in the Hazel Project. Also, on January 30, 2017, Torchlight entered into and closed a Purchase and Sale Agreement with Wolfbone. Under the agreement, Torchlight acquired certain of Wolfbones Hazel Project assets, including its interest in the Flying B Ranch #1 well and the 40-acre unit surrounding the well. Upon the closing of the transactions, the Torchlight working interest in the Hazel Project increased by 40.66% to a total ownership of 74%. Effective June 1, 2017, Torchlight acquired an additional 6% working interest from unrelated working interest owners increasing its working interest in the Hazel project to 80%, and an overall net revenue interest of 75%. Seven test wells have been drilled on the Hazel Project to capture and document the scientific base in support of demonstrating the production potential of the property. Option Agreement with Masterson Hazel Partners, LP On August 13, 2020, the Companys subsidiaries TEI and Torchlight Hazel (collectively, Torchlight Subs) entered into an option agreement (the Option Agreement) with Masterson Hazel Partners, LP (MHP) and MPC. Under the agreement, MHP was obligated to drill and complete, or cause to be drilled and completed, at its sole cost and expense, a new lateral well (the Well) on the Hazel Project, sufficient to satisfy Torchlight Subss continuous development obligations on the southern half of the prospect no later than September 30, 2020. MHP has satisfied this drilling obligation. MHP paid to Torchlight Subs $1,000 as an option fee at the time of execution of the Option Agreement. MHP is entitled to receive, as its sole recourse for the recoupment of drilling costs, the revenue from production of the Well attributable to Torchlight Subss interest until such time as it has recovered its reasonable costs and expenses for drilling, completing, and operating the well. In exchange for MHP satisfying the above drilling obligations, Torchlight Subs granted to MHP the exclusive right and option to perform operations, at MHPs sole cost and expense, on the Hazel Project sufficient to satisfy Torchlight Subss continuous development obligations on the northern half of the prospect. Because MHP exercised this drilling option and satisfied the continuous development obligations on the northern half of the prospect, under the terms of the Option Agreement (as amended in September 2020) MHP had the option to purchase the entire Hazel Project no later than May 31, 2021. Such purchase would be under the terms of a form of Purchase and Sale Agreement included as an exhibit to the Option Agreement, at an aggregate purchase price of$12,690,704 for approximately 9,762 net mineral acres, and not less than 74% net revenue interest (approximately $1,300 per net mineral acre). MHP declined to exercise the Option in 2021. Hunton Play, Central Oklahoma As of December 31, 2022, the Company is producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove. |
RELATED PARTY BALANCES
RELATED PARTY BALANCES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY BALANCES | 5. RELATED PARTY BALANCES As of September 30, 2023 and December 31, 2022, the Company had a balance of $- 0 - and $ 177,519 , respectively, for an account receivable due from MPC, an entity controlled by the largest shareholder and the chairman of the Companys Board of Directors, for amounts advanced related to the Orogrande development cost sharing arrangement agreed to in connection with the acquisition of the Orogrande working interests in 2014. In connection with the closing of the Merger, the account receivable due from MPC was deemed fully satisfied and discharged. The 2021 Note and Loan Agreement On October 1, 2021, the Company entered into a note payable with Meta, its former parent, to borrow up to $15 million which bears interest at 8% per annum, computed on the basis of a 360-day year (the 2021 Note). The 2021 Note was initially to mature on March 31, 2023 (the 2021 Note Maturity Date); provided, however, if the Company raised $30 million or more in capital through debt or equity or a combination thereof by the 2021 Note Maturity Date, the 2021 Note Maturity Date would be extended to September 30, 2023, and the outstanding principal of the 2021 Note would amortize in six equal, monthly installments. If an event of default has occurred and is continuing, interest on the 2021 Note may accrue at the default rate of 12% per annum. The outstanding principal of the 2021 Note, together with all accrued interest thereon, becomes due on the 2021 Note Maturity Date. The 2021 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts the Companys ability to merge or consolidate with another person or entity, or sell or transfer all or substantially all of its assets, unless the Company is the surviving entity or the successor entity assumes all of obligations under the 2021 Note. The 2021 Note is collateralized by certain shares of common stock in Meta held by one of Metas stockholders, Mr. McCabe, and by a lien on a 25% interest in the Orogrande Project owned by Wolfbone, a subsidiary of the Company. On September 2, 2022, the Company entered into a loan agreement with Meta, as lender (the Loan Agreement) that would govern prior loan amounts advanced to the Company from Meta. As of August 11, 2022, and August 29, 2022, the Company borrowed an additional $1.2 million and $1.46 million, respectively, representing the remaining amount available for borrowing under the Loan Agreement and resulting in a total of $5 million principal amount outstanding related to the Loan Agreement, the proceeds of which were used for working capital and general corporate purposes. The term loans under the Loan Agreement bear interest at a per annum rate equal to 8% and were to mature on March 31, 2023 (the Maturity Date); provided, however, if the Company raised $30 million or more in capital through debt or equity, or a combination thereof by the Maturity Date, the Maturity Date would be extended to October 3, 2023 and the term loan would be amortized in six equal monthly installments. The Loan Agreement includes customary representations and covenants that, subject to exceptions and qualifications, restrict our ability to do certain things, such as: engage in mergers, acquisitions, and asset sales; transact with affiliates; undergo a change in control; incur additional indebtedness; incur liens; make loans and investments; declare dividends or redeem or repurchase equity interests; and enter into certain restrictive agreements. In addition, the Loan Agreement contains customary events of default, mandatory prepayment events and affirmative covenants, including, without limitation, covenants regarding the payment of taxes and other obligations, maintenance of insurance, maintenance of our material properties, reporting requirements, compliance with applicable laws and regulations, and formation or acquisition of new subsidiaries. On March 31, 2023, the Company entered into an amendment to the 2021 Note and an amendment to Loan Agreement in order to extend each of the 2021 Note Maturity Date and the Maturity Date respectively from March 31, 2023 to October 3, 2023. Such amendments also removed the provisions allowing for extensions of the 2021 Note Maturity Date and the Maturity Date in the event the Company raised $30 million or more in capital through debt or equity or a combination thereof by March 31, 2023. Under the terms of the Arrangement Agreement that governed the merger transaction between Torchlight and Meta in June 2021, the oil and natural gas assets were to be sold or spun out from Meta and the costs of any sale or spin-off incurred by Meta were to be borne the then-existing shareholders of Torchlight. The amount of the reimbursement payable to Meta in connection with the Spin-Off is $2.59 million which was added to the principal amount of the Loan Agreement for a principal balance outstanding of $7.59 million as of March 31, 2023. Concurrently with the amendment to the Loan Agreement, the Company made a prepayment of $1 million to reduce the principal balance to $6.59 million. On August 7, 2023, Mr. McCabe and Meta entered into a Loan Sale Agreement whereby Mr. McCabe purchased from Meta (i) the 2021 Note and (ii) all outstanding loans made to the Company by Meta pursuant to the Loan Agreement (the Loan Purchase). As a result of the Loan Purchase, Mr. McCabe replaced Meta as the lender and secured party under the 2021 Note and the Loan Agreement. Additionally, as part of the Loan Purchase, Meta assigned to Mr. McCabe its lien on 25% of the Orogrande Prospect. The Companys obligations and responsibilities under the 2021 Note and the Loan Agreement remain unchanged. The combined balance on the 2021 Note and the Loan Agreement as of September 30, 2023 was $21.59 million. As of September 30, 2023, the combined total accrued and unpaid interest under the 2021 Note and the Loan Agreement was $2.63 million. On October 1, 2023, the Company and Mr. McCabe entered into an amendment to the 2021 Note and an amendment to Loan Agreement in order to extend each of the 2021 Note Maturity Date and the Maturity Date respectively from October 3, 2023 to January 3, 2024. On December 22, 2022, the Company issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe (the 2022 Note), which bears interest at 5% per annum, computed on the basis of a 365-day year. On June 16, 2023, the Company entered into an amendment to the 2022 Note in order to extend the maturity date of the 2022 Note (the 2022 Note Maturity Date) from June 21, 2023 to October 3, 2023. Such amendment also removed the provisions allowing for extensions of the 2022 Note Maturity Date in the event the Company raised $30 million or more in capital through debt or equity or a combination thereof by March 31, 2023. The revolving commitment under the 2022 Note expires on the 2022 Note Maturity Date. As of September 30, 2023, the Company had $20 million in principal amount outstanding under the 2022 Note. As of September 30, 2023, the Company had $0.56 million in accrued but unpaid interest on the 2022 Note. On October 1, 2023, the Company and Mr. McCabe entered into an amendment to the 2022 Note in order to extend the 2022 Note Maturity Date from October 3, 2023 to January 3, 2024. | 6. RELATED PARTY BALANCES As of December 31, 2022 and December 31, 2021, the Company had a balance of $ 177,519 163,366 On December 22, 2022, the Company issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe (the 2022 Note). The 2022 Note bears interest at 5% per annum, computed on the basis of a 365-day year, and matures on June 21, 2023 (the 2022 Note Maturity Date); provided, however, if we raise $30 million or more in capital through debt or equity or a combination thereof by the 2022 Note Maturity Date, the 2022 Note Maturity Date will be extended to October 3, 2023. The outstanding principal of the 2022 Note, together with all accrued interest thereon, becomes due on June 21, 2023. The revolving commitment under the 2022 Note expires on 2022 Note Maturity Date. As of December 31, 2022, we had $2 million in principal amount outstanding and $18 million of available borrowings under the 2022 Note. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Legal Matters On April 30, 2020, the Companys wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies (Cordax). The suit, Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies On March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in the amount of $104,500.01 and recover related attorneys fees. The foreclosure action, Datalog LWT Inc. d/b/a Cordax Evaluation Technologies v. Torchlight Energy Resources, Inc On January 14, 2022, a shareholder derivative action was filed in the U.S. District Court for the Eastern District of New York captioned Hines v. Palikaras, et al. Environmental Matters The Company is subject to contingencies as a result of environmental laws and regulations. Present and future environmental laws and regulations applicable to the Companys operations could require substantial capital expenditures or could adversely affect its operations in other ways that cannot be predicted at this time. As of September 30, 2023, and December 31, 2022, no amounts had been recorded because no specific liability has been identified that is reasonably probable of requiring the Company to fund any future material amounts. | 7. COMMITMENTS AND CONTINGENCIES Legal Matters On April 30, 2020, the Companys wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies (Cordax). The suit, Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies On March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in the amount of $104,500.01 and recover related attorneys fees. The foreclosure action, Datalog LWT Inc. d/b/a Cordax Evaluation Technologies v. Torchlight Energy Resources, Inc On January 14, 2022, a shareholder derivative action was filed in the U.S. District Court for the Eastern District of New York captioned Hines v. Palikaras, et al. Environmental Matters The Company is subject to contingencies as a result of environmental laws and regulations. Present and future environmental laws and regulations applicable to the Companys operations could require substantial capital expenditures or could adversely affect its operations in other ways that cannot be predicted at this time. As of December 31, 2022, and December 31, 2021, no amounts had been recorded because no specific liability has been identified that is reasonably probable of requiring the Company to fund any future material amounts. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
STOCKHOLDERS’ EQUITY | 7. STOCKHOLDERS EQUITY The Company has 500,000,000 authorized shares of common stock, par value of $ 0.0001 per share and 50,000,000 authorized shares of preferred stock, par value of $ 0.0001 per share. As of December 31, 2022, the Company had outstanding 165,472,241 shares of common stock and no shares of preferred stock outstanding. As of September 30, 2023, the Company had outstanding 248,830,516 shares of common stock and no shares of preferred stock outstanding. Stock Based Compensation In 2022, the Companys board of directors adopted, and the stockholders approved, the 2022 Equity Incentive Plan (the 2022 Plan). The 2022 Plan permits the Company to grant stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 58,273,612 shares following an automatic increase to the number of shares reserved under the 2022 Plan on January 1, 2023. During the nine months ended September 30, 2023, the Company granted 35,856,521 stock options as authorized under the 2022 Plan. Vesting is subject to continued service with the Company for up to one year with provisions for earlier vesting subject to the attainment of events outlined in the Plan. Upon the resignations by certain of the Companys employees, 6,618,889 of the options granted to those employees during the nine months ended September 30, 2023 were forfeited, canceled and returned to the option pool available under the 2022 Plan. Options granted were valued using the Black-Scholes Option Pricing Model resulting in a total value of $ 2,558,252 . Option expense for the nine months ended September 30, 2023, net of forfeitures, was $ 1,292,231 . A summary of stock options outstanding as of September 30, 2023, all of which expire in 2033, including the relevant exercise price is presented below: Schedule of Stock Options Outstanding Exercise Expiration Price 2033 Total $ 1.2056 29,237,632 29,237,632 29,237,632 29,237,632 | 8. STOCKHOLDERS EQUITY Next Bridge Hydrocarbons, Inc. has preferred and common stock both at a par value of $ 0.0001 165,472,241 0 |
INCOME TAXES
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
INCOME TAXES | 8. INCOME TAXES The Company recorded no income tax provision at September 30, 2023 and December 31, 2022 because of anticipated losses for the 2023 fiscal year and actual losses incurred in 2022. The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the nine months ended September 30, 2023 because the Company expects to incur a tax loss in the current year. Similarly, no income tax expense was recognized for the year ended December 31, 2022. The Company had a gross deferred tax asset related to federal net operating loss carryforwards of $ 66,028,393 and $ 55,153,554 at September 30, 2023 and December 31, 2022, respectively. The federal net operating loss carryforward will begin to expire in 2034. Realization of the deferred tax asset is dependent, in part, on generating sufficient taxable income prior to expiration of the loss carryforwards. The Company has placed a 100% valuation allowance against the net deferred tax asset because future realization of these assets is not assured. The estimated federal net operating loss carryforward balance included in our Annual Report on Form 10-K, as amended on Form 10-K/A filed on May 1, 2023 was furnished with our best estimates at that time based on information received from our predecessor. During the preparation of the tax return for the year ended December 31, 2022, and prior to the estimation for the quarter ended September 30, 2023 provision, we received more information which helped us more accurately determine that the estimated December 31, 2022 net operating loss balance for the Company on a consolidated basis was $ 55,153,554 as opposed to $ 25,935,753 . As of the date of the registration statement, we are still waiting on additional information and, therefore, the estimated net operating loss balances remain subject to change. The deferred tax asset at the Company still has a full valuation allowance for the provision as of the third quarter ended September 30, 2023. | 9. INCOME TAXES The Company recorded no income tax provision at December 31, 2022, and December 31, 2021, because of losses incurred. The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the successor period and for the predecessor period, because the Company expects to incur a tax loss in the current year. Similarly, no income tax expense was recognized for the year ended December 31, 2021. The Company had a net deferred tax asset related to federal net operating loss carryforwards of $ 25,935,753 65,730,932 59,481,861 |
NOTES PAYABLE, RELATED PARTIES
NOTES PAYABLE, RELATED PARTIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Notes Payable Related Parties | ||
NOTES PAYABLE, RELATED PARTIES | 9. NOTES PAYABLE, RELATED PARTIES On October 1, 2021, we issued a secured, revolving promissory note in an original principal amount of up to $ 15 million 8% Additionally, we have an aggregate principal balance of $6.59 million outstanding under the Loan Agreement with Mr. McCabe as successor-in-interest to Meta, which bears interest at a fixed rate of 8% per annum if no event of default exists, and at a fixed rate of 12% per annum if an event of default exists. Pursuant to an amendment to the Loan Agreement dated as of October 1, 2023, the loans under the Loan Agreement mature on January 3, 2024. The combined balance on the 2021 Note and the Loan Agreement as of September 30, 2023 was $21.59 million. As of September 30, 2023, the combined total accrued and unpaid interest under the 2021 Note and the Loan Agreement was $2.63 million. In connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note in the principal amount of up to $20 million in favor of Mr. McCabe. The Company is entitled to request advances under the 2022 Note in a minimum principal amount of $100,000 each. Mr. McCabe is the largest shareholder of the Companys common stock and the chairman of the board of directors of the Company. Pursuant to an amendment to the 2022 Note dated October 1, 2023, the 2022 Note matures on January 3, 2024. As of September 30, 2023, the Company had a balance of $ 20 million and accrued and unpaid interest of $ 0.56 million under the 2022 Note. | 10. NOTES PAYABLE, RELATED PARTIES In 2021, the Company entered into a note payable with Meta its former parent to borrow up to $ 15 million 8% The balance on the 2021 Note as of December 31, 2022 and December 31, 2021 is $ 20 million 12.5 million 208,889 74,210 1,289,328 Under the terms of the Arrangement Agreement that governed the merger transaction between Torchlight and Meta in June 2021 the oil and natural gas assets were to be sold or spun out from Meta and the costs of any sale or spin-off incurred by Meta were to be borne the then-existing shareholders of Torchlight. The amount of the reimbursement payable to Meta in connection with the Spin-Off is $2,573,724 which is to be added to the principal amount of the 2022 Note payable. On September 2, 2022, the Company entered into a loan agreement with Meta, as lender (the Loan Agreement) that would govern prior loan amounts advanced to the Company from Meta. As of August 11, 2022, and August 29, 2022, the Company borrowed an additional $ 1.2 million 1.46 million On December 21, 2022, the Company entered into that certain Agreement and Plan of Merger (the Merger Agreement) with Hudspeth, Wolfbone, MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such leases, pooling and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in Orogrande Project will be transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations (as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance of 56,297,638 shares of Company common stock to Mr. McCabe (such series of transactions collectively, the Merger). The Merger is to be completed in accordance with the Texas Business Organizations Code, whereby (a) the Company will form NBH MergeCo, LLC with the State of Texas (MergeCo) in order to cause Hudspeth to assign all of its rights under the Merger Agreement to MergeCo and MergeCo will assume Hudspeths obligations under the Merger Agreement, (b) Hudspeth (or MergeCo, as its assignee), Wolfbone and MPC shall merge with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone shall become a direct and wholly-owned subsidiary of the Company. The closing of the transactions contemplated by the Merger Agreement are subject to the satisfaction of certain customary closing conditions, including filing and acceptance of the certificate of merger by the Secretary of State of the State of Texas. In connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note in the principal amount of up to $20 million in favor of Mr. McCabe. The Company is entitled to request advances under the 2022 Note in a minimum principal amount of $100,000 each. Mr. McCabe is the largest shareholder of the Companys common stock. As of December 31, 2022 the Company had drawn $ 2 million |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
ASSET RETIREMENT OBLIGATIONS | 10. ASSET RETIREMENT OBLIGATIONS The following is a reconciliation of the asset retirement obligations liability through September 30, 2023: Schedule of Asset Retirement Obligations Liability Asset retirement obligations – January 1, 2022 $ 21,937 Accretion expense 1,092 Estimated liabilities recorded 223,837 Asset retirement obligations – December 31, 2022 $ 246,866 Accretion expense 5,865 Estimated liabilities recorded — Asset retirement obligations – March 31, 2023 $ 252,731 Accretion expense 6,071 Estimated liabilities recorded — Asset retirement obligations – June 30, 2023 $ 258,802 Accretion expense 6,024 Estimated liabilities recorded — Asset retirement obligations – September 30, 2023 $ 264,826 | 11. ASSET RETIREMENT OBLIGATIONS The following is a reconciliation of the asset retirement obligations liability through December 31, 2022: Schedule of Asset Retirement Obligations Liability Predecessor Asset retirement obligations - December 31, 2021 $ 21,937 Accretion expense — Asset retirement obligations - December 14, 2022 $ 21,937 Successor Estimated liabilities recorded $ 245,774 Accretion expense 1,092 Asset retirement obligations - December 31, 2022 $ 246,866 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS Maturity Date Extension On October 1, 2023, the Company and Mr. McCabe as successor-in-interest to Meta entered into an amendment to the 2021 Note and an amendment to the Loan Agreement extending the 2021 Note Maturity Date and the Maturity Date, respectively from October 3, 2023 to January 3, 2024. Additionally, on October 1, 2023, the Company and Mr. McCabe entered into an amendment to the 2022 Note extending the 2022 Note Maturity Date from October 3, 2023 to January 3, 2024. Participation Agreements Effective as of October 6, 2023, we and certain investor participants (each a Participant and collectively the Participants) entered into twenty-five separate Participation Agreements (the Participation Agreements) to conduct drilling of wells in our approximately 17,000 acre Johnson Prospect in Hudspeth County, Texas, which is a portion of our Orogrande Project. Pursuant to the Participation Agreements, the Participants collectively funded $7,000,000, which will be used to (i) acquire the rights to drill on the Johnson Prospect and (ii) finance the drilling of five (5) vertical wells in the Johnson Prospect in connection with our 2023 drilling program requirements under its University Lands Drilling and Development Unit Agreement. Each Participant will have the right to participate in the drilling of additional wells on the Johnson Prospect in the future, including an additional five (5) vertical wells in locations determined by Hudspeth Operating, in its sole discretion, in 2024. The Participation Agreements provide for an initial allocation of the working interests and net revenue interests among each Participant and us and then a re-allocation upon payout or payment to such Participant of drilling and completion costs for each well drilled. Following payout, we will own 25% of working interest as described below and 18.75% net revenue interest in each well. Hudspeth Operating will be the operator of the Johnson Prospect pursuant to a joint operating agreement (the Operating Agreement) entered into in connection with the Participation Agreements. The Participation Agreements and the Operating Agreement require, among other things, that we and Hudspeth Operating drill and complete at least five (5) vertical wells by December 31, 2023, unless the term of the Participation Agreements is extended . As of September 30, 2023, a total of $5,611,892 of the funding had been advanced to us by the Participants. We reserved a twenty-five percent (25%) back-in interest, which shall automatically revert to us following the date that each Participant first recovers 100% of the costs attributable to the drilling and development of the wells in which such Participant has participated. Further, within a specified period following drilling of the initial five (5) wells, pursuant to the Participation Agreement each Participant may elect to transfer and assign all of its interests to us in exchange for the issuance of shares of common stock of the Company at a value of $1.20 per share. One of the Participants is McCabe Petroleum Corporation, an entity controlled by Mr. McCabe, the Chairman of our Board of Directors, our largest shareholder and a lender of the Company. As such, entry into such Participation Agreement and the related transactions pursuant thereto constitute related party transactions, which have been duly approved by the our Board of Directors and Audit Committee. | 12. SUBSEQUENT EVENTS We met our drilling obligations under the DDU Agreement to drill five new wells in the Orogrande Project in advance of the March 31, 2023 deadline under University Lands lease requirement. The data collected from these five wells, in addition to the five wells drilled in 2021, confirmed that there are at least five potential distinct reservoirs under our acreage. Also, our operations team deployed a new mist drilling solution which increased hole stability, which we believe will result in meaningful cost savings for additional wells drilled in the Orogrande Project. While these wells may have potential to produce hydrocarbons to sell commercially in the future, we have no immediate plans to deploy the additional capital necessary to sell production from these wells to third parties. Instead, we plan to use the results from these wells to determine our drilling plans for future wells, including reservoir locations, target depths and designated acreage, in the Orogrande Project. On March 31, 2023, we entered into an amendment to the 2021 Note and an amendment to Loan Agreement in order to extend each of the 2021 Maturity Date and the Maturity Date respectively from March 31, 2023 to October 3, 2023. Such amendments also removed the provisions allowing for extensions of the 2021 Maturity Date and the Maturity Date in the event the Company raised $30 million or more in capital through debt or equity or a combination thereof by March 31, 2023. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Use of estimates | Use of estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and certain assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from these estimates. | Use of estimates |
Basis of presentation | Basis of presentation —The financial statements are presented on a consolidated basis and include the accounts of Next Bridge Hydrocarbons, Inc. and its wholly owned subsidiaries, TEI, Hudspeth, Torchlight Hazel, Wolfbone, and Hudspeth Operating. All significant intercompany balances and transactions have been eliminated. As noted above, the Company was involved in the Spin-Off on December 14, 2022. In the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. | Basis of presentation In the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. |
Risks and uncertainties | Risks and uncertainties —The Companys operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging business, including the potential risk of business failure. | Risks and uncertainties In January 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus (COVID-19) and the significant risks to the international community and economies as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and thereafter, COVID-19 continued to spread throughout the U.S. and worldwide. In addition, actions taken by OPEC members and other exporting nations on the supply and demand in global oil and natural gas markets resulted in significant negative pricing pressure in the first half of 2020, followed by a recovery in pricing and an increase in demand in the second half of 2020 and into 2021. However, multiple variants emerged in 2021 and became highly transmissible, which contributed to additional pricing volatility during 2021 to date. The financial results of companies in the oil and natural gas industry have been impacted materially as a result of changing market conditions. Such circumstances generally increase uncertainty in the Partnerships accounting estimates. Although demand and market prices for oil and natural gas have recently increased, due to the rising energy use and the improvement in U.S. economic activity, we cannot predict events that may lead to future price volatility and the near-term energy outlook remains subject to heightened levels of uncertainty. The Company is continuing to closely monitor the overall impact and the evolution of the COVID-19 pandemic, including the ongoing spread of any variants, along with future OPEC actions on all aspects of the Companys business, including how these events may impact the Companys future operations, financial results, liquidity, employees, and operators. Additional actions may be required in response to the COVID-19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely affect general and local economic conditions. The Company cannot predict the long- term impact of these events on our liquidity, financial position, results of operations or cash flows due to uncertainties including the severity of COVID-19 or any of the ongoing variants, and the effect the virus will have on the demand for oil and natural gas. These situations remain fluid and unpredictable, and the Company is actively managing its response. |
Concentration of risks | Concentration of risks —At times the Companys cash balances are in excess of amounts guaranteed by the Federal Deposit Insurance Corporation. The Companys cash is placed with a highly rated financial institution, and the Company regularly monitors the creditworthiness of the financial institutions with which it does business. | Concentration of risks |
Fair value of financial instruments | Fair value of financial instruments —Financial instruments consist of cash, receivables, convertible note receivable, payables and promissory notes, if any. The estimated fair values of cash, receivables, and payables approximate the carrying amount due to the relatively short maturity of these instruments. The carrying amounts of any promissory notes approximate their fair value giving affect for the term of the note and the effective interest rates. For assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration. ● Level 3 inputs are unobservable inputs based on managements own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | Fair value of financial instruments For assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration. ● Level 3 inputs are unobservable inputs based on managements own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. |
Cash and cash equivalents | Cash and cash equivalents – Cash and cash equivalents include certain investments in highly liquid instruments with original maturities of three months or less. | Cash and cash equivalents |
Accounts receivable | Accounts receivable – Accounts receivable consist of amounts due from a related party for their share of expenses paid on their behalf by the Company. Management reviews receivables periodically and reduces the carrying amount by a valuation allowance that reflects managements best estimate of the amount that may not be collectible. As of September 30, 2023, no valuation allowance was considered necessary. | Accounts receivable |
Oil and natural gas properties | Oil and natural gas properties – The Company uses the full cost method of accounting for exploration and development activities as defined by the SEC. Under this method of accounting, the costs of unsuccessful, as well as successful, exploration and development activities are capitalized as properties and equipment. This includes any internal costs that are directly related to property acquisition, exploration and development activities but does not include any costs related to production, general corporate overhead or similar activities. Oil and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. Gains and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Companys interest in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually charged to accumulated depreciation. | Oil and natural gas properties Oil and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. Gains and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Companys interest in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually charged to accumulated depreciation. |
Capitalized interest | Capitalized interest – The Company capitalizes interest on unevaluated properties during the periods in which they are excluded from costs being depleted or amortized. During the nine months ended September 30, 2023, the Company capitalized $ 1,819,016 of interest on unevaluated properties. Capitalized interest for the year ended December 31, 2022, was $ 1,363,538 . | Capitalized interest 74,210 1,289,328 141,048 |
Depreciation, depletion, and amortization | Depreciation, depletion, and amortization – The depreciable base for oil and natural gas properties includes the sum of all capitalized costs net of accumulated depreciation, depletion, and amortization (DD&A), estimated future development costs and asset retirement costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and natural gas properties is amortized on a unit-of-production method. | Depreciation, depletion, and amortization |
Ceiling test | Ceiling test – Future production volumes from oil and natural gas properties are a significant factor in determining the full cost ceiling limitation of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a ceiling test that determines a limit on the book value of oil and natural gas properties. If the net capitalized cost of proved oil and natural gas properties, net of related deferred income taxes, plus the cost of unproved oil and natural gas properties, exceeds the present value of estimated future net cash flows discounted at 10 percent, net of related realizable tax affects, plus the cost of unproved oil and natural gas properties, the excess is charged to expense and reflected as additional accumulated DD&A. The Company did not record an impairment expense for either the nine months ended September 30, 2023 or for the year ended December 31, 2022. The ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment costs. The determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future. | Ceiling test The ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment costs. The determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future. |
Asset retirement obligations | Asset retirement obligations – The fair value of a liability for an assets retirement obligation (ARO) is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized as part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period, and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction of the ARO liability. Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. | Asset retirement obligations Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. |
Income taxes | Income taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. Authoritative guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has reviewed the Companys tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of limitation are three to four years from their respective filings. Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for the nine months ended September 30, 2023, and for the year ended December 31, 2022. | Income taxes Authoritative guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has reviewed the Companys tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of limitation are three to four years from their respective filings. Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for the successor period, for the predecessor period, and for the year ended December 31, 2021. |
Revenue recognition | Revenue recognition – The Companys revenue is typically generated from contracts to sell natural gas, crude oil or NGLs produced from interests in oil and natural gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify a delivery point which represents the point at which control of the product is transferred to the customer. The Company elects to treat contracts to sell oil and natural gas production as normal sales, which are then accounted for as contracts with customers. The Company has determined that these contracts represent multiple performance obligations, which are satisfied when control of the commodity transfers to the customer, typically through the delivery of the specified commodity to a designated delivery point. Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring control of those goods to the customer. Amounts allocated in the Companys price contracts are based on the standalone selling price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred. Gain or loss on derivative instruments is outside the scope of ASC 606, Revenue Recognition Producer Gas Imbalances. | Revenue recognition Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring control of those goods to the customer. Amounts allocated in the Companys price contracts are based on the standalone selling price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred. Gain or loss on derivative instruments is outside the scope of ASC 606, Revenue Recognition Producer Gas Imbalances. |
Basic and diluted earnings (loss) per share | Basic and diluted earnings (loss) per share – Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share is computed in the same way as basic earnings (loss) per common share except that the denominator is increased to include the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional common shares were dilutive. The Company had no dilutive shares for the nine months ended September 30, 2023, or for the year ended December 31, 2022. | Basic and diluted earnings (loss) per share |
Environmental laws and regulations | Environmental laws and regulations – The Company is subject to extensive federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their future economic benefit. The Company believes that it is in compliance with existing laws and regulations. The Company accrued no liability as of September 30, 2023 and December 31, 2022. | Environmental laws and regulations |
Recent accounting pronouncements adopted | Recent accounting pronouncements adopted – No new accounting pronouncements have been adopted or issued that would impact the financial statements of the Company. | Recent accounting pronouncements not yet adopted Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
SPIN-OFF (Tables)
SPIN-OFF (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets acquired and liabilities assumed at the Spin-Off Date. Schedule of Fair Value of Assets Acquired and Liabilities Assumed Consideration in common stock $ 51,362,187 Recognized Assets and Liabilities Cash and cash equivalents $ 319,987 Accounts receivable, related party 177,519 Prepaids 154,075 Oil and natural gas properties 77,645,689 Other assets 119,364 Accounts payable (5,310,456 ) Notes payable (20,000,000 ) Accrued interest (1,498,217 ) Asset retirement obligation (245,774 ) Net Assets Recognized $ 51,362,187 |
OIL & NATURAL GAS PROPERTIES (T
OIL & NATURAL GAS PROPERTIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Extractive Industries [Abstract] | ||
Schedule of Capitalized Cost for Oil and Natural Gas | The following table presents the capitalized costs for oil and natural gas properties of the Company: Schedule of Capitalized Cost for Oil and Natural Gas September 30, 2023 December 31, 2022 Evaluated costs subject to amortization $ — $ — Unevaluated costs 119,538,170 79,695,928 Total capitalized costs 119,538,170 79,695,928 Less accumulated depreciation, depletion and amortization — — Total oil and gas properties $ 119,538,170 $ 79,695,928 | The following table presents the capitalized costs for oil and natural gas properties of the Company: Schedule of Capitalized Cost for Oil and Natural Gas December 31, December 31, Successor Predecessor Evaluated costs subject to amortization $ — $ — Unevaluated costs 79,695,928 61,319,652 Total Capitalized Costs 79,695,928 61,319,652 Less accumulated depreciation, depletion and amortization — (15,656,182 ) Total oil and gas properties $ 79,695,928 $ 45,663,470 |
Schedule of Orogrande Project Ownership | The Orogrande Project ownership as of September 30, 2023, is detailed as follows: Schedule of Orogrande Project Ownership Revenue Working Interest Interest University Lands – Mineral Owner 20.000% ORRI – Magdalena Royalties, LLC, an entity controlled by Gregory McCabe, Chairman of the Board 4.500% ORRI – Unrelated Party 0.500% Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc. 56.250% 75.000% Wolfbone Investments, LLC, a subsidiary of Next Bridge Hydrocarbons, Inc. 18.750% 25.000% Total 100.000% 100.000% | The Orogrande Project ownership as of December 31, 2022, is detailed as follows: Schedule of Orogrande Project Ownership Revenue Interest Working Interest University Lands - Mineral Owner 20.000 % ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe 4.500 % ORRI - Unrelated Party 0.500 % Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc. 49.875 % 66.500% Wolfbone Investments, LLC, an entity controlled by Gregory McCabe 18.750 % 25.000% Conversion by Note Holders in March, 2020 4.500 % 6.000% Unrelated Party 1.875 % 2.500% Total 100.000 % 100.000% |
Schedule of Common Stock to be issued to Orogrande Owners | Schedule of Common Stock to be issued to Orogrande Owners Shares of Common Stock Working Interest Contribution Dingus Investments, Inc. 7,050,382 2.8334 % Pandora Energy, LP 6,220,779 2.5000 % Kennedy Minerals, Ltd 6,220,779 2.5000 % The de Compiegne Property Company No. 20, Ltd 6,220,779 2.5000 % Loma Hombre Energy, LLC 622,078 0.2500 % Sero Capital, LLC 725,840 0.2917 % TOTAL 27,060,637 10.8751 % |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Schedule of Asset Retirement Obligations Liability | The following is a reconciliation of the asset retirement obligations liability through September 30, 2023: Schedule of Asset Retirement Obligations Liability Asset retirement obligations – January 1, 2022 $ 21,937 Accretion expense 1,092 Estimated liabilities recorded 223,837 Asset retirement obligations – December 31, 2022 $ 246,866 Accretion expense 5,865 Estimated liabilities recorded — Asset retirement obligations – March 31, 2023 $ 252,731 Accretion expense 6,071 Estimated liabilities recorded — Asset retirement obligations – June 30, 2023 $ 258,802 Accretion expense 6,024 Estimated liabilities recorded — Asset retirement obligations – September 30, 2023 $ 264,826 | The following is a reconciliation of the asset retirement obligations liability through December 31, 2022: Schedule of Asset Retirement Obligations Liability Predecessor Asset retirement obligations - December 31, 2021 $ 21,937 Accretion expense — Asset retirement obligations - December 14, 2022 $ 21,937 Successor Estimated liabilities recorded $ 245,774 Accretion expense 1,092 Asset retirement obligations - December 31, 2022 $ 246,866 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Stock Options Outstanding | A summary of stock options outstanding as of September 30, 2023, all of which expire in 2033, including the relevant exercise price is presented below: Schedule of Stock Options Outstanding Exercise Expiration Price 2033 Total $ 1.2056 29,237,632 29,237,632 29,237,632 29,237,632 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Net Income (Loss) Attributable to Parent | $ 910,538 | $ (2,475,214) | $ (2,455,753) | $ (2,387,451) | $ (2,164,187) | $ (1,764,071) | $ (836,035) | $ (7,318,418) | $ (4,764,293) | $ (8,238,808) |
Working Capital Deficit | 29,077,591 | 46,611,246 | 46,611,246 | |||||||
Net Income (Loss) Attributable to Parent | $ (910,538) | $ 2,475,214 | $ 2,455,753 | $ 2,387,451 | $ 2,164,187 | $ 1,764,071 | $ 836,035 | $ 7,318,418 | $ 4,764,293 | $ 8,238,808 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 14, 2022 | Dec. 31, 2021 | |
Accumulated Capitalized Interest Costs | $ 1,363,538 | $ 141,048 | |||
Interest Costs Capitalized | $ 1,819,016 | $ 141,048 | |||
Successor [Member] | |||||
Accumulated Capitalized Interest Costs | 74,210 | ||||
Interest Costs Capitalized | $ 74,210 | ||||
Predecessor [Member] | |||||
Accumulated Capitalized Interest Costs | $ 1,289,328 | ||||
Interest Costs Capitalized | $ 1,289,328 |
SPIN-OFF (Details)
SPIN-OFF (Details) | Dec. 14, 2022 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Net Assets Recognized | $ 51,362,187 |
Cash and cash equivalents | 319,987 |
Accounts receivable, related party | 177,519 |
Prepaids | 154,075 |
Oil and natural gas properties | 77,645,689 |
Other assets | 119,364 |
Accounts payable | (5,310,456) |
Notes payable | (20,000,000) |
Accrued interest | (1,498,217) |
Asset retirement obligation | $ (245,774) |
OIL & NATURAL GAS PROPERTIES (D
OIL & NATURAL GAS PROPERTIES (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Extractive Industries [Abstract] | |||
Evaluated costs subject to amortization | |||
Unevaluated costs | 119,538,170 | 79,695,928 | 61,319,652 |
Total capitalized costs | 119,538,170 | 79,695,928 | 61,319,652 |
Less accumulated depreciation, depletion and amortization | (15,656,182) | ||
Total oil and gas properties | 119,538,170 | 79,695,928 | 45,663,470 |
Less accumulated depreciation, depletion and amortization | $ 15,656,182 |
OIL & NATURAL GAS PROPERTIES _2
OIL & NATURAL GAS PROPERTIES (Details 2) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2023 | Sep. 30, 2023 | May 11, 2023 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares | |
Reserve Quantities [Line Items] | |||||
Revenue Interest | 1 | 1 | |||
Working Interest | 1 | 1 | |||
Common Stock, Shares, Issued | 165,472,241 | 165,472,241 | |||
Orogrande Project [Member] | |||||
Reserve Quantities [Line Items] | |||||
Common Stock, Shares, Issued | 27,060,637 | ||||
Equity Method Investment, Ownership Percentage | 10.8751% | ||||
Orogrande Project [Member] | Dingus Investments, Inc. | |||||
Reserve Quantities [Line Items] | |||||
Common Stock, Shares, Issued | 7,050,382 | ||||
Equity Method Investment, Ownership Percentage | 2.8334% | ||||
Orogrande Project [Member] | Pandora Energy, LP | |||||
Reserve Quantities [Line Items] | |||||
Common Stock, Shares, Issued | 6,220,779 | ||||
Equity Method Investment, Ownership Percentage | 2.50% | ||||
Orogrande Project [Member] | Kennedy Minerals, Ltd | |||||
Reserve Quantities [Line Items] | |||||
Common Stock, Shares, Issued | 6,220,779 | ||||
Equity Method Investment, Ownership Percentage | 2.50% | ||||
Orogrande Project [Member] | The de Compiegne Property Company No. 20, Ltd | |||||
Reserve Quantities [Line Items] | |||||
Common Stock, Shares, Issued | 6,220,779 | ||||
Equity Method Investment, Ownership Percentage | 2.50% | ||||
Orogrande Project [Member] | Loma Hombre Energy, LLC | |||||
Reserve Quantities [Line Items] | |||||
Common Stock, Shares, Issued | 622,078 | ||||
Equity Method Investment, Ownership Percentage | 0.25% | ||||
Orogrande Project [Member] | Sero Capital, LLC | |||||
Reserve Quantities [Line Items] | |||||
Common Stock, Shares, Issued | 725,840 | ||||
Equity Method Investment, Ownership Percentage | 0.2917% | ||||
University Lands - Mineral Owner | |||||
Reserve Quantities [Line Items] | |||||
Revenue Interest | 0.20000 | 0.20000 | |||
ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe | |||||
Reserve Quantities [Line Items] | |||||
Revenue Interest | 0.04500 | 0.04500 | |||
ORRI - Unrelated Party | |||||
Reserve Quantities [Line Items] | |||||
Revenue Interest | 0.00500 | 0.00500 | |||
Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc. | |||||
Reserve Quantities [Line Items] | |||||
Revenue Interest | 0.49875 | 0.56250 | |||
Working Interest | 0.66500 | 0.75000 | |||
Wolfbone Investments, LLC, an entity controlled by Gregory McCabe | |||||
Reserve Quantities [Line Items] | |||||
Revenue Interest | 0.18750 | 0.18750 | |||
Working Interest | 0.25000 | 0.25000 | |||
Conversion by Note Holders in March, 2020 | |||||
Reserve Quantities [Line Items] | |||||
Revenue Interest | 0.04500 | ||||
Working Interest | 0.06000 | ||||
Unrelated Party | |||||
Reserve Quantities [Line Items] | |||||
Revenue Interest | 0.01875 | ||||
Working Interest | 0.02500 |
RELATED PARTY BALANCES (Details
RELATED PARTY BALANCES (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transactions [Abstract] | |||
Account Receivable. Related Party | $ 0 | $ 177,519 | $ 163,366 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common Stock, Shares, Issued | 165,472,241 | 165,472,241 | |||||
Preferred Stock, Shares Issued | 0 | 0 | |||||
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||
Common Stock, Shares, Outstanding | 248,830,516 | 248,830,516 | 165,472,241 | 165,472,241 | |||
Preferred Stock, Shares Outstanding | 0 | 0 | 0 | 0 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 2,558,252 | $ 2,558,252 | |||||
Proceeds from Issuance or Sale of Equity | $ 763,304 | $ 383,772 | $ 145,155 | $ 1,292,231 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 14, 2022 | Dec. 31, 2021 |
Operating Loss Carryforwards | $ 66,028,393 | $ 25,935,753 | $ 65,730,932 | $ 59,481,861 |
Presently Reported [Member] | ||||
Operating Loss Carryforwards | 55,153,554 | |||
Previously Reported [Member] | ||||
Operating Loss Carryforwards | $ 25,935,753 |
NOTES PAYABLE, RELATED PARTIES
NOTES PAYABLE, RELATED PARTIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 14, 2022 | Aug. 29, 2022 | Aug. 11, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||
Notes Payable | $ 20,000,000 | $ 12,500,000 | |||||
Interest Payable, Current | $ 3,191,007 | 1,571,336 | 208,889 | ||||
Notes Payable, Related Party | $ 41,589,362 | 2,000,000 | |||||
Successor [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Interest Payable, Current | 74,210 | ||||||
Predecessor [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Interest Payable, Current | $ 1,289,328 | ||||||
Meta Materials, Inc. | 2021 Note | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Notes Payable | 15,000,000 | ||||||
Debt Instrument, Interest Rate During Period | 8% | 8% | |||||
Line of Credit Facility, Current Borrowing Capacity | 20,000,000 | $ 12,500,000 | |||||
Debt Instrument, Maturity Date, Description | On October 1, 2021, we issued a secured, revolving promissory note in an original principal amount of up to $15 million, which was subsequently increased to $20 million, in favor of Meta (as amended to date, the 2021 Note). | ||||||
Meta Materials, Inc. | Loan Agreement [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Notes Payable | $ 1,460,000 | $ 1,200,000 | |||||
Gregory McCabe | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Interest Payable, Current | $ 560,000 | ||||||
Notes Payable, Related Party | $ 20,000,000 | $ 2,000,000 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | ||||
Dec. 31, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 14, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Asset retirement obligations – January 1, 2022 | $ 258,802 | $ 252,731 | $ 246,866 | $ 246,866 | $ 21,937 | $ 21,937 | $ 21,937 | ||
Accretion expense | 6,024 | 6,071 | 5,865 | 17,961 | 1,092 | ||||
Asset retirement obligations – September 30, 2023 | $ 246,866 | 264,826 | 258,802 | 252,731 | 264,826 | 246,866 | 21,937 | ||
Estimated liabilities recorded | 223,837 | ||||||||
Predecessor [Member] | |||||||||
Asset retirement obligations – January 1, 2022 | 21,937 | $ 21,937 | 21,937 | 21,937 | |||||
Accretion expense | |||||||||
Asset retirement obligations – September 30, 2023 | $ 21,937 | $ 21,937 | |||||||
Successor [Member] | |||||||||
Asset retirement obligations – January 1, 2022 | $ 246,866 | $ 246,866 | |||||||
Accretion expense | 1,092 | ||||||||
Asset retirement obligations – September 30, 2023 | 246,866 | $ 246,866 | |||||||
Estimated liabilities recorded | $ 245,774 |
OIL & NATURAL GAS PROPERTIES _3
OIL & NATURAL GAS PROPERTIES (Details 3) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2023 | Sep. 30, 2023 | |
Revenue Interest | 1 | 1 |
Working Interest | 1 | 1 |
University Lands - Mineral Owner | ||
Revenue Interest | 0.20000 | 0.20000 |
ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe | ||
Revenue Interest | 0.04500 | 0.04500 |
ORRI - Unrelated Party | ||
Revenue Interest | 0.00500 | 0.00500 |
Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc. | ||
Revenue Interest | 0.49875 | 0.56250 |
Working Interest | 0.66500 | 0.75000 |
Wolfbone Investments, LLC, an entity controlled by Gregory McCabe | ||
Revenue Interest | 0.18750 | 0.18750 |
Working Interest | 0.25000 | 0.25000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | Sep. 30, 2023 $ / shares shares |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number | 29,237,632 |
Exercise Price 1.2056 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number | 29,237,632 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ / shares | $ 1.2056 |