Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Jun. 25, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 333-266143 | |
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, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76116 | |
City Area Code | (817) | |
Local Phone Number | 438-1937 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 251,830,516 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash | $ 2,174,661 | $ 1,668,847 |
Accounts receivable | 243,113 | 207,470 |
Production receivable | 1,382 | 1,412 |
Prepayments - development costs | 228,367 | 131,340 |
Prepaid expenses | 134,825 | 76,741 |
Total current assets | 2,782,348 | 2,085,810 |
Oil and natural gas properties, net of impairment | 205,413 | |
Other assets | 105,179 | 105,179 |
TOTAL ASSETS | 3,092,940 | 2,190,990 |
Current liabilities: | ||
Accounts payable | 1,341,084 | 3,777,693 |
Prepayments, working interest owners | 311,281 | |
Note payable - related party | 42,499,082 | 41,221,028 |
Note payable | 2,000,000 | |
Accrued interest payable - related party | 4,552,205 | 3,870,175 |
Total current liabilities | 50,413,038 | 49,180,177 |
Asset retirement obligations | 254,554 | 248,651 |
Total liabilities | 50,667,592 | 49,428,828 |
Stockholders deficit: | ||
Preferred stock, par value $0.0001, 50,000,000 shares authorized; -0- issued and outstanding March 31, 2024 and December 31, 2023 | ||
Common stock, par value $0.0001; 500,000,000 shares authorized; 251,830,516 issued and outstanding at March 31, 2024 248,830,516 issued and outstanding at December 31, 2023; | 25,183 | 24,883 |
Additional paid-in capital | 72,496,356 | 71,956,656 |
Accumulated deficit | (120,096,191) | (119,219,378) |
Total stockholders deficit | (47,574,652) | (47,237,839) |
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT | $ 3,092,940 | $ 2,190,989 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 251,830,516 | 248,830,516 |
Common Stock, Shares, Outstanding | 251,830,516 | 248,830,516 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Oil and natural gas sales | $ 3,567 | $ 10,924 |
Operating expenses: | ||
Lease operating expenses | 36,811 | 15,816 |
Production taxes | 257 | 786 |
General and administrative | 758,640 | 2,472,739 |
Impairment loss | 713,173 | 7,883,657 |
Total operating expenses | 1,508,881 | 10,372,998 |
Other income (expense) | ||
Gain on sale of properties | 618,501 | |
Administration income | 10,000 | |
Interest income | 1 | |
Total other income | 628,501 | 1 |
Loss before income taxes | (876,813) | (10,362,073) |
Provision for income taxes | ||
Net loss | $ (876,813) | $ (10,362,073) |
Loss per common share: | ||
Basic and Diluted | $ 0 | $ (0.06) |
Weighted average number of common shares outstanding: | ||
Basic and Diluted | 249,055,791 | 165,472,241 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (EQUITY) (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2022 | $ 16,547 | $ 51,345,640 | $ (81,662,591) | $ (30,300,404) |
Beginning Balance, Shares at Dec. 31, 2022 | 165,472,241 | |||
Issuance of stock options | 245,160 | 245,160 | ||
Net loss | (10,362,073) | (10,362,073) | ||
- Wildcat acquisition | ||||
Ending balance, value at Mar. 31, 2023 | $ 16,547 | 51,590,800 | (92,024,664) | (40,417,317) |
Ending Balance, Shares at Mar. 31, 2023 | 165,472,241 | |||
Beginning balance, value at Dec. 31, 2023 | $ 24,883 | 71,956,656 | (119,219,378) | (47,237,839) |
Beginning Balance, Shares at Dec. 31, 2023 | 248,830,516 | |||
Net loss | (876,813) | (876,813) | ||
- Wildcat acquisition | $ 250 | 449,750 | 450,000 | |
Issuance of common stock - Wildcat acquisition, Shares | 2,500,000 | |||
- Consulting agreement | $ 50 | 89,950 | 90,000 | |
Issuance of common stock - Consulting agreement, Shares | 500,000 | |||
Ending balance, value at Mar. 31, 2024 | $ 25,183 | $ 72,496,356 | $ (120,096,191) | $ (47,574,652) |
Ending Balance, Shares at Mar. 31, 2024 | 251,830,516 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash Flows Used in Operating Activities | ||
Net loss | $ (876,813) | $ (10,362,073) |
Adjustments to reconcile net loss to net cash from operations: | ||
Gain on sale of property interests | (618,501) | |
Accretion expense | 5,903 | 5,865 |
Expense related to stock based compensation | 90,000 | 245,160 |
Impairment loss | 713,173 | 7,883,657 |
Change in: | ||
Accounts receivable | (35,613) | |
Prepayments - development costs | (97,027) | 150,000 |
Prepaid expenses | (58,084) | 11,117 |
Accounts payable and accrued expenses | (2,436,608) | 443,532 |
Net cash used in operating activities | (3,313,570) | (1,622,742) |
Cash Flows Used in Investing Activities | ||
Investment in oil and natural gas properties | (10,477) | (7,390,797) |
Net cash used in investing activities | (10,477) | (7,390,797) |
Cash Flows From Financing Activities | ||
Proceeds from notes payable, related party | 1,000,000 | 14,875,000 |
Proceeds from promissory note | 2,000,000 | |
Payments on promissory notes | (1,129,112) | |
Proceeds from sale of assets | 1,141,142 | |
Prepayments, working interest owners | (311,281) | |
Net cash from financing activities | 3,829,861 | 13,745,888 |
Net increase in cash | 505,814 | 4,732,349 |
Cash - beginning of period | 1,668,847 | 569,298 |
Cash - end of period | 2,174,661 | 5,301,647 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 129,112 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued in property acquisition | 450,000 | |
Capitalized Interest | $ 702,697 | $ 492,860 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 3 Months Ended |
Mar. 31, 2024 | |
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 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 no full-time employees, and the Company employs consultants for various roles as needed. The Company operates its business through nine 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), Hudspeth Operating, LLC, a Texas limited liability company and wholly owned subsidiary of Hudspeth (Hudspeth Operating), Wildcat Panther, LLC, a Texas limited liability company (Panther), Wildcat Valentine, LLC, a Texas limited liability company (Valentine), Wildcat Cowboy, LLC, a Texas limited liability company (Cowboy), Wildcat Packer, LLC, a Texas limited liability company (Packer). All intercompany transactions have been eliminated in the consolidated financial statements. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | 2. GOING CONCERN At March 31, 2024, the Company had not yet achieved profitable operations. The Company had a net loss of $ 876,813 47,630,690 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, 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 | 3 Months Ended |
Mar. 31, 2024 | |
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 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 consolidated 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. Restatements Risks and uncertainties 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 Additionally, at March 31, 2024 amounts related to the resale of assets acquired in the Wildcat transaction that were received in April, 2024 have been accrued. 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 March 31, 2024 and December 31, 2023, no valuation allowance was considered necessary. 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 702,697 $2,498,184 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. Share-based compensation The Company accounts for stock option awards using the calculated value method. The Company values warrant and option awards using the Black-Scholes option pricing model. The Company accounts for any forfeitures of options when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. The Company also issues equity awards to non-employees. The fair value of these option awards is estimated when the award recipient completes the contracted professional services. The Company recognizes the expense for the estimated total value of the awards during the period from their issuance until performance completion. 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 three months ended March 31, 2024, or for the three months ended March 31, 2023. 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 adopted |
OIL & NATURAL GAS PROPERTIES
OIL & NATURAL GAS PROPERTIES | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 December 31, 2023 Evaluated costs subject to amortization $ - $ - Unevaluated costs 108,829,014 107,910,429 Total capitalized costs 108,829,014 107,910,429 Less accumulated depreciation, depletion and amortization - - Less accumulated impairment (108,623,601 ) (107,910,429 ) Total oil and gas properties $ 205,413 $ - Unevaluated costs as of March 31, 2024, and December 31, 2023, include cumulative costs of developing projects including the Orogrande and Hazel Projects in West Texas, costs related to the Oklahoma Properties, and unevaluated costs related to the Louisiana Wildcat projects. The $205,413 balance of oil and natural gas properties as of March 31, 2024, is entirely attributable to the Wildcat Projects. Accumulated Impairment adjustments relate solely to the Orogrande Project. 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. Impairment adjustments disclosed above were partially recorded as of December 31, 2022, as of December 31, 2023, and as of March 31, 2024. 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 for the Orogrande Project which had been impaired within the Companys full cost pool totals as of March 31, 2024, or at December 31, 2023. The balance of oil and gas properties as of March 31, 2024 consists of accumulated costs associated with the Wildcat Properties. The Company had no proved reserve value associated with our properties as of March 31, 2024. 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 West Texas. The Company also holds minor interests in certain other oil and natural gas projects in Central Oklahoma. As of March 31, 2024, the Company had interests in four oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, two wells in Central Oklahoma, and the Wildcat Properties that hold mineral leases in Louisiana. 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. Such back-in interest is expected to be contributed to the Company pursuant to that certain Contribution Agreement (as defined below). See Note 11—Subsequent Events for additional information regarding the 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. 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 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. 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 include five wells per year in years 2021, 2022, 2023, and 2024. The drilling obligations are minimum yearly requirements and may be exceeded if acceleration is desired. Drilling Requirement 2023 Effective as of October 6, 2023, the Company and certain investor participants (each a Participant and collectively the Participants) entered into twenty-five separate Participation Agreements (the Participation Agreements), The Johnson Project, to conduct drilling of wells in approximately 17,000 acres in Hudspeth County, Texas, which is a portion of the Companys Orogrande Prospect. The aggregate total of Prospect Fees paid by the participants was $1,700,000. As of December 31, 2023, and at March 31, 2024, the drilling requirements had been met and leases covering approximately 134,000 acres remain in effect. 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 March 31, 2024, 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 March 31, 2024, the Company was producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove. Louisiana Projects In March 2024, we enter into and closed a Contribution Agreement with Wildcat Partners SPV, LLC, a Delaware limited liability company (Wildcat), under which Wildcat transferred to us 100% of the issued and outstanding membership interests in each of (a) Wildcat Cowboy, LLC, a Texas limited liability company (Cowboy), (b) Wildcat Packer, LLC, a Texas limited liability company (Packer), (c) Wildcat Panther, LLC, a Texas limited liability company (Panther) and (d) Wildcat Valentine, LLC, a Texas limited liability company (Valentine). As consideration, we issued 2,500,000 shares of our common stock, under the terms and conditions of the Contribution Agreement. MPC previously owned and sold to Wildcat the underlying oil and gas prospects owned by Cowboy, Packer, Panther and Valentine. MPC always retained a 25% back-in after payout and various overriding royalty interests in the prospects owned by Cowboy, Packer, Panther and Valentine, but MPC agreed to waive its 25% back-in after payout but retain its overriding royalty interests in all such prospects in an effort to facilitate the transactions described below, including the sale of the leases owned by Valentine, including a leasehold estates in approximately 3,878.90 gross acres and 3,626.25 net acres of land situated in Lafourche Parish, Louisiana (the Valentine Leases), and the leases owned by Panther, including leasehold estates in approximately 618 gross acres and 618 net acres of land situated in Acadia Parish, Louisiana (the Panther Leases), the leases owned by Packer, including leasehold estates in approximately 4,349 gross acres and 4,349 net acres of land situated in Acadia and Lafourche Parish, Louisiana (the Packer Leases), the leases owned by Cowboy, including leasehold estates in approximately 835 gross acres and 835 net acres of land situated in Acadia Parish, Louisiana (the Cowboy Leases). Concurrent with the closing of the above transactions with Wildcat, we entered into and closed a Participation Agreement with Magnetar an unrelated developer of oil and gas properties (Magnetar) under which we sold a 100% working interest, entitled to not less than a 75% net revenue interest, in and to the Valentine Leases, along with a 100% right, title and interest in all contracts affecting the Valentine Leases, all under the terms and conditions of such Participation Agreement, including the following consideration: (a) Magnetar paid $964,448 from which we are required to pay bonuses of $240,000 to consultants resulting in net proceeds to us of $664,448; (b) Magnetar agrees to pay all delay rentals pertaining to the Valentine Leases which accrue during calendar year 2024 and during the months of January through August of 2025, provided, however, that if the initial test well is commenced at any time prior to the end of August, 2025, Magnetars obligation to bear delay rental expenses thereafter will be deemed terminated, and the obligation for the payment of subsequent delay rentals shall be governed by the subject operating agreement; (c) in the event Magnetar has not commenced actual drilling operations on lands covered by the Valentine Leases on or prior August 31, 2025, then Developer shall have the option to continue paying rentals or extending the leases within the Area of Mutual Interest (the AMI) until December 31, 2026; (d) we will have the option to participate for up to a 1/3 working interest in the initial test well to be undertaken by Magnetar on lands covered by the Valentine Leases, with this right to extend to subsequent wells to be undertaken by Magnetar, subject to the further provisions regarding operations; and (e) at least three working days prior to its spudding the initial test well, Magnetar will pay to us a spud fee of $600,000 of which $360,000 of the cost thereof will be shared with consultants leaving us with $240,000. Also concurrent with the closing of the above transactions with Wildcat, we enter into and closed a Participation Agreement with Magnetar under which we sold to Developer a 100% working interest, entitled to not less than a 75% net revenue interest, in and to the Panther Leases covering approximately 618 gross acres of land situated within the AMI provided therein, along with a 100% right, title and interest in all contracts affecting the Panther Leases, for the following consideration: (a) Magnetar paid $428,918.05 to us and $70,081.95 to MPC for delay rentals paid by it; (b) Magnetar agrees to reimburse McCabe for its payment of delay rentals to sustain certain of the Panther Leases coming due in March and April 2024 in the amount of $70,081.98; (c) Magnetar agrees to pay all delay rentals pertaining to the Panther Leases which accrue during calendar year 2024, shown to be $23,888.90; (d) in the event Magnetar is unable to commence actual drilling operations on lands covered by the Subject Panther Leases on or prior February 1, 2025, then Magnetar shall have the option to extend or take new leases on any of the Panther Leases that would expire during the following 12 calendar months; (e) we will have the option to participate up to a 1/3 working interest in the initial test well to be undertaken by Magnetar on lands covered by the Panther Leases, with this right to extend to subsequent wells to be undertaken by Magnetar, subject to the further provisions regarding operations; (f) prior to its spudding the initial test well, Magnetar will pay to us a spud fee equal to $100,000 of which $20,000 will be shared with a consultant. The company recorded a Gain on the Sale of properties from the Wildcat acquisition of $618,501 as of March 31, 2024. 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 would contribute an amount of the Back-In Interest and MPC would contribute an amount of the Bronco Prospect in proportion to the percentage of shares of common stock of NBH that were 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). The Registration Statement, however, was ultimately withdrawn at the request of the SEC and the Company is presently evaluating other alternatives. |
RELATED PARTY BALANCES
RELATED PARTY BALANCES | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES | 5. RELATED PARTY BALANCES 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 March 31, 2024, was $21.22 million. As of March 31, 2024, the combined total accrued and unpaid interest under the 2021 Note and the Loan Agreement was $3.48 million. On October 1, 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 October 3, 2023 to March 31, 2024. An additional Amendment in March, 2024 extended the maturity date to September 30, 2024. December 2022 Note 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 to October 3, 2023. On December 31, 2023, the Company entered into an amendment to the 2022 Note in order to extend the 2022 Note Maturity Date March 31, 2024. An additional Amendment in March, 2024 extended the maturity date to September 30, 2024. As of March 31, 2024, the Company had $21.28 million in principal amount outstanding under the 2022 Note. As of March 31, 2024, the Company had $1,068,096 in accrued but unpaid interest on the 2022 Note. As of March 31, 2024, the total Related Party balances include the 2021 Note and Loan Agreement and the December 2022 Note, as detailed above, totaling $42.50 million, and additional borrowing and adjustment to the December 2022 note during the three months ended March 31, 2024, as detailed below: On January 23, 2024, Mr. McCabe loaned $1,000,000 to us, which was evidenced under a 0% Senior Unsecured Promissory Note effective as of that date (the McCabe Note), which provided, among other things, that the loan will be due on February 28, 2025, with the Company having the option to extend the loan by one additional year. The loan will bear interest at the rate of 0% per annum and will be payable in one balloon payment of principal and interest on the maturity date. If we elect to extend the loan for one year, the loan will continue to bear interest at the rate of 0% per annum and will be payable in one balloon payment of principal and interest on the extended maturity date. Additionally, on March 28, 2024, $278,053 was added to the principal of the loan in lieu of reimbursing Mr. Mcabe for lease rentals connected to the Louisiana properties acquired on that date. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
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 March 15, 2024, a securities class action captioned Targgart v. Next Bridge Hydrocarbons, Inc., et al. On May 7, 2024, a stockholder derivative petition captioned Bartok v. Greg McCabe, 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 March 31, 2024, and December 31, 2023, 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 | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 7. STOCKHOLDERS EQUITY The Company has 500,000,000 0.0001 50,000,000 165,472,241 On April 25, 2023, the Company issued 83,358,275 shares of common stock for the acquisition of additional working interest in the Orogrande Project. As of December 31, 2023, the Company had 248,830,516 Three Months ended March 31, 2024 Effective February 29, 2024, the Company issued 500,000 In March 2024, we enter into and closed a Contribution Agreement with Wildcat Partners SPV, LLC, a Delaware limited liability company (Wildcat), under which Wildcat transferred to us 100% of the issued and outstanding membership interests in each of (a) Wildcat Cowboy, LLC, a Texas limited liability company (Cowboy), (b) Wildcat Packer, LLC, a Texas limited liability company (Packer), (c) Wildcat Panther, LLC, a Texas limited liability company (Panther) and (d) Wildcat Valentine, LLC, a Texas limited liability company (Valentine). As consideration, we issued 2,500,000 shares of our common stock, under the terms and conditions of the Contribution Agreement. As of March 31, 2024, the Company had 251,830,516 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 first and second quarters, 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 in second quarter, 2023, 6,618,889 of the options granted to those employees were forfeited, canceled and returned to the option pool available under the 2022 Plan. Vesting was 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. Options were fully vested as of December 31, 2023. Options granted were valued using the Black-Scholes Option Pricing Model resulting in a total value for 2023 of $4,781,279. Inputs to the Black-Scholes Model are as follows: Risk-free interest rate 4.00% Expected volatility of common stock 125.39% Dividend yield 0.00% Discount due to lack of marketability 0% Expected life of option/warrant Ten Years Option expense for the three months ended March 31, 2024 and the year ended December 31, 2023, net of forfeitures, was $-0- and $4,781,279, respectively. No options were granted in the three months ended March 31, 2024. A summary of stock options outstanding as of March 31, 2024, 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 Stock based compensation expense of $90,000 for the quarter ended March 31, 2024, reflects compensation expense attributable to the three months then ended for consulting services under a Consulting Agreement effective February 29, 2024, prescribing compensation in the form of 500,000 shares of common stock, |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded no income tax provision at March 31, 2024 and December 31, 2023 because of anticipated losses for the 2024 fiscal year and actual losses incurred in 2023. 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 three months ended March 31, 2024 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, 2023. The Company had a Gross deferred tax asset related to federal net operating loss carryforwards of $ 69,324,228 67,582,243 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2024 | |
Notes Payable | |
NOTES PAYABLE | 9. NOTES PAYABLE 2021 Note On October 1, 2021, we issued a secured, revolving promissory note in an original principal amount of up to $ 15 million 8% On August 7, 2023, following the Loan Purchase, Mr. McCabe replaced Meta as the lender and secured party under the 2021 Note but the Companys obligations under the 2021 Note remain unchanged. On December 31, 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 to March 31, 2024. An additional Amendment effective June 30, 2024 extended the maturity date to September 30, 2024. Loan Agreement Additionally, we have an aggregate principal balance of $6,589,362 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. On December 31, 2023, the Company and Mr. McCabe entered an amendment to the 2022 Note extending the 2022 Note Maturity Date to March 31, 2024. An additional Amendment effective June 30, 2024 extended the maturity date to September 30, 2024. The combined balance on the 2021 Note ($15 million) and the Loan Agreement ($6.2 million) as of March 31, 2024, was $21.22 million. As of March 31, 2024, the total accrued and unpaid interest under the 2021 Note and the Loan Agreement was $3.48 million. December 2022 Note In connection with the Merger, on December 22, 2022, the Company entered into an additional Note in the principal amount of up to $20 million in favor of Mr. McCabe. Mr. McCabe is the largest shareholder of the Companys common stock and the chairman of the board of directors of the Company. As of March 31, 2024, the Company had a balance of $21.28 million and accrued and unpaid interest of $1,068,096 due under the 2022 Note. An Amendment effective June 30, 2024 extended the maturity date to September 30, 2024. As of March 31, 2024, Notes Payable – related party includes balances of the 2021 Note and Loan Agreement and the December 2022 Note, as detailed above, totaling $42.50 million, and additional borrowing and adjustment to the December 2022 note during the three months ended March 31, 2024, as detailed below: On January 23, 2024, Mr. McCabe loaned $1,000,000 to us, which was evidenced under a 0% Senior Unsecured Promissory Note effective as of that date (the McCabe Note), which provided, among other things, that the loan will be due on February 28, 2025, with the Company having the option to extend the loan by one additional year. The loan will bear interest at the rate of 0% per annum and will be payable in one balloon payment of principal and interest on the maturity date. If we elect to extend the loan for one year, the loan will continue to bear interest at the rate of 0% per annum and will be payable in one balloon payment of principal and interest on the extended maturity date. CAPCO Note February 2024 On February 29, 2024, CAPCO Holding, Inc., a Texas corporation (Capco), loaned us $2,000,000 under a 12% Secured Promissory Note (the Capco Note), which provides, among other things, that the loan will be due in one year, with us having the option to extend the loan by one additional year. The loan will bear interest at the rate of 12% per annum and will be payable in one balloon payment of principal and interest on the maturity date. If we elect to extend the loan for one year, we must pay all accrued interest for that first year, and thereafter, the loan will bear interest at a rate that is mutually agreeable to us and Capco, which rate will not exceed 18% per annum, and will be payable in one balloon payment of principal and interest on the extended maturity date. As part of the transaction, Gregory McCabe, our Chairman and Chief Executive Officer, entered into a Stock Pledge and Security Agreement with Capco under which he pledged 250,000 of his shares of common stock of the Company to secure our obligations under the Capco Note. Further, Mr. McCabe entered into a Subordination Agreement (the Subordination Agreement) with Capco and us under which Mr. McCabe agreed to subordinate all of the Companys indebtedness and obligations owed to Mr. McCabe to the Capco Note, under the terms and conditions of the Subordination Agreement. Accrued and unpaid interest as of March 31, 2024 was $20,667. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | 10. ASSET RETIREMENT OBLIGATIONS The following is a reconciliation of the asset retirement obligations liability through March 31, 2024: Schedule of Asset Retirement Obligations Liability Asset retirement obligations – December 31, 2023 $ 248,651 Accretion expense 5,903 Estimated liabilities recorded - Asset retirement obligations –March 31, 2024 $ 254,554 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS On April 2, 2024, we entered into a Consulting Agreement with a third party individual, under which the Consultant has agreed to provide analysis and advisory services to us for consideration of 100,000 shares of common stock. |
EXPLANATION OF THE RESTATEMENT
EXPLANATION OF THE RESTATEMENT | 3 Months Ended |
Mar. 31, 2024 | |
Explanation Of Restatement | |
EXPLANATION OF THE RESTATEMENT | 12. EXPLANATION OF THE RESTATEMENT This Form 10-Q amends and restates the 2023 Original Filing to present restated consolidated financial statements for the three months ended March 31, 2023 and related disclosures arising from an impairment analysis of the Orogrande properties during the 2023 audit and the related reaudit of the Companys fiscal year 2022 consolidated financial statements. Items Amended in this Filing – Refer to detail descriptions of adjustments below after each Statement. As Originally Reported As Restated March 31, 2023 Adjustment March 31, 2023 ASSETS Current assets: Cash $ 5,301,647 $ - $ 5,301,647 Accounts receivable, related party 177,519 - 177,519 Prepaid expenses 51,184 - 51,184 Total current assets 5,530,350 - 5,530,350 Oil and gas properties, net of impairment 88,626,670 (88,626,670 ) - Other assets 80,179 - 80,179 TOTAL ASSETS $ 94,237,199 (88,626,670 ) $ 5,610,529 LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT) Current liabilities: Accounts payable $ 5,375,669 - $ 5,375,669 Note Payable - META 21,589,362 - 21,589,362 Note Payable - Related Party 16,875,000 - 16,875,000 Accrued interest payable 1,935,084 - 1,935,084 Total current liabilities 45,775,115 - 45,775,115 Asset retirement obligations 252,731 - 252,731 Total liabilities 46,027,846 - 46,027,846 Commitments and contingencies Stockholders equity(deficit): Preferred stock, par value $0.001, 500,000,000 shares authorized; -0- issued and outstanding March 31, 2023 - - - Common stock, par value $0.001; 500,000,000 shares authorized; 16,547 - 16,547 Additional paid-in capital 51,490,795 100,005 51,590,800 Accumulated deficit (3,297,989 ) (88,726,675 ) (92,024,664 ) Total stockholders equity(deficit) 48,209,353 (88,626,670 ) (40,417,317 ) TOTAL LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT) $ 94,237,199 $ (88,626,670 ) $ 5,610,529 March 31, 2023, Balance Sheet restatement reflects the Impairment adjustment to the carrying value of the Companys Orogrande Oil and Natural Gas properties as discussed above. An additional restatement to Additional Paid in Capital was made to adjust Stock Compensation Expense for the Three Months ended March 31, 2023. As Originally Reported As Restated Three Months Three Months Ended Ended March 31, 2023 Adjustment March 31, 2023 Oil and gas sales $ 10,924 - $ 10,924 Operating expenses: Lease operating expenses 15,816 - 15,816 Production taxes 786 - 786 General and administrative 2,381,774 90,965 2,472,739 Impairment expense - 7,883,657 7,883,657 Total operating expenses 2,398,376 7,974,622 10,372,998 Other income Interest income 1 - 1 Total other income 1 - 1 Loss before income taxes (2,387,451 ) (7,974,622 ) (10,362,073 ) Provision for income taxes - - - Net loss $ (2,387,451 ) $ (7,974,622 ) $ (10,362,073 ) Loss per common share: Basic and Diluted $ (0.01 ) - $ (0.06 ) Weighted average number of common shares outstanding: Basic and Diluted 165,472,241 - 165,472,241 Adjustment to the Statement of Operations reflects the impairment adjustment related to the Orogrande properties for the Three Months ended March 31, 2023, described above, includes an adjustment of $100,005 to increase Stock Compensation Expense for the Three Months ended March 31, 2023, and a decrease of $9,040 in general and administrative expense arising from the reversal of an adjustment of accounts payable cut off at December 31, 2022. As Originally Reported As Restated Three Months Three Months Ended Ended March 31, 2023 Adjustment March 31, 2023 Cash Flows Used in Operating Activities Net loss $ (2,387,451 ) $ (7,974,622 ) $ (10,362,073 ) Adjustments to reconcile net loss to net cash from operations: Accretion expense 5,865 - 5,865 Stock compensation expense 145,155 100,005 245,160 Impairment expense - 7,883,657 7,883,657 Change in: Prepayments - development costs 150,000 - 150,000 Prepaid expenses 11,117 - 11,117 Accounts payable and accrued expenses 1,499,658 (1,056,126 ) 443,532 Net cash used in operating activities (575,656 ) (1,047,086 ) (1,622,742 ) Cash Flows Used in Investing Activities Investment in oil and gas properties (8,437,883 ) 1,047,086 (7,390,797 ) Net cash used in investing activities (8,437,883 ) 1,047,086 (7,390,797 ) Cash Flows From Financing Activities Proceeds from notes payable, related party 14,875,000 - 14,875,000 Payments on promissory notes (1,129,112 ) - (1,129,112 ) Net cash from financing activities 13,745,888 - 13,745,888 Net increase in cash 4,732,349 - 4,732,349 Cash - beginning of year 569,298 - 569,298 Cash - end of year $ 5,301,647 $ - $ 5,301,647 Supplemental disclosure of cash flow information: Cash paid for interest $ 129,112 $ - $ 129,112 Cash paid for income tax $ - $ - $ - Supplemental disclosure of non-cash investing and financing activities: Capitalized Interest included in interest payable $ 492,860 $ - $ 492,860 Adjustments to the Cash Flow for the Three Months ended March 31, 2023 reflect the impairment adjustment related to the Orogrande properties described above, an increase in accounts payable of $9,040 for general and administrative expense, adjustment of accounts payable cut off for development costs of $1,047,086 at December 31, 2022, and an increase in Stock Compensation Expense for the Three Months ended March 31, 2023. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates |
Basis of presentation | 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 consolidated 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. |
Restatements | Restatements |
Risks and uncertainties | Risks and uncertainties |
Concentration of risks | Concentration of risks |
Fair value of financial instruments | 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 |
Accounts receivable | Accounts receivable Additionally, at March 31, 2024 amounts related to the resale of assets acquired in the Wildcat transaction that were received in April, 2024 have been accrued. 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 March 31, 2024 and December 31, 2023, no valuation allowance was considered necessary. |
Oil and natural gas properties | 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 702,697 $2,498,184 |
Depreciation, depletion, and amortization | Depreciation, depletion, and amortization |
Ceiling test | 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 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. |
Share-based compensation | Share-based compensation The Company accounts for stock option awards using the calculated value method. The Company values warrant and option awards using the Black-Scholes option pricing model. The Company accounts for any forfeitures of options when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. The Company also issues equity awards to non-employees. The fair value of these option awards is estimated when the award recipient completes the contracted professional services. The Company recognizes the expense for the estimated total value of the awards during the period from their issuance until performance completion. |
Income taxes | 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 three months ended March 31, 2024, or for the three months ended March 31, 2023. |
Revenue recognition | 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 |
Environmental laws and regulations | Environmental laws and regulations |
Recent accounting pronouncements adopted | Recent accounting pronouncements adopted |
OIL & NATURAL GAS PROPERTIES (T
OIL & NATURAL GAS PROPERTIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 December 31, 2023 Evaluated costs subject to amortization $ - $ - Unevaluated costs 108,829,014 107,910,429 Total capitalized costs 108,829,014 107,910,429 Less accumulated depreciation, depletion and amortization - - Less accumulated impairment (108,623,601 ) (107,910,429 ) Total oil and gas properties $ 205,413 $ - |
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 % |
Schedule of Orogrande Project ownership | The Orogrande Project ownership as of March 31, 2024, 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 % |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Inputs to the Black-Scholes Model are as follows: | Inputs to the Black-Scholes Model are as follows: Risk-free interest rate 4.00% Expected volatility of common stock 125.39% Dividend yield 0.00% Discount due to lack of marketability 0% Expected life of option/warrant Ten Years |
Schedule of Stock Options Outstanding | A summary of stock options outstanding as of March 31, 2024, 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 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations Liability | The following is a reconciliation of the asset retirement obligations liability through March 31, 2024: Schedule of Asset Retirement Obligations Liability Asset retirement obligations – December 31, 2023 $ 248,651 Accretion expense 5,903 Estimated liabilities recorded - Asset retirement obligations –March 31, 2024 $ 254,554 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net Income (Loss) Attributable to Parent | $ 876,813 | $ 10,362,073 |
Working Capital Deficit | $ 47,630,690 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Accounting Policies [Abstract] | |||
Interest Costs Capitalized | $ 702,697 | $ 492,860 | |
Accumulated Capitalized Interest Costs | $ 2,498,184 |
OIL & NATURAL GAS PROPERTIES (D
OIL & NATURAL GAS PROPERTIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Extractive Industries [Abstract] | |||
Evaluated costs subject to amortization | |||
Unevaluated costs | 108,829,014 | 107,910,429 | |
Total capitalized costs | 108,829,014 | 107,910,429 | |
Less accumulated depreciation, depletion and amortization | |||
Less accumulated impairment | (108,623,601) | (107,910,429) | |
Total oil and gas properties | $ 205,413 |
OIL & NATURAL GAS PROPERTIES _2
OIL & NATURAL GAS PROPERTIES (Details 2) - shares | Mar. 31, 2024 | Dec. 31, 2023 | May 11, 2023 |
Oil and Gas, Result of Operation, Producing Activity [Line Items] | |||
Common Stock, Shares, Issued | 251,830,516 | 248,830,516 | |
Orogrande Project [Member] | |||
Oil and Gas, Result of Operation, Producing Activity [Line Items] | |||
Common Stock, Shares, Issued | 27,060,637 | ||
Equity Method Investment, Ownership Percentage | 10.8751% | ||
Orogrande Project [Member] | Dingus Investments, Inc. | |||
Oil and Gas, Result of Operation, Producing Activity [Line Items] | |||
Common Stock, Shares, Issued | 7,050,382 | ||
Equity Method Investment, Ownership Percentage | 2.8334% | ||
Orogrande Project [Member] | Pandora Energy, LP | |||
Oil and Gas, Result of Operation, Producing Activity [Line Items] | |||
Common Stock, Shares, Issued | 6,220,779 | ||
Equity Method Investment, Ownership Percentage | 2.50% | ||
Orogrande Project [Member] | Kennedy Minerals, Ltd | |||
Oil and Gas, Result of Operation, Producing Activity [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 | |||
Oil and Gas, Result of Operation, Producing Activity [Line Items] | |||
Common Stock, Shares, Issued | 6,220,779 | ||
Equity Method Investment, Ownership Percentage | 2.50% | ||
Orogrande Project [Member] | Loma Hombre Energy, LLC | |||
Oil and Gas, Result of Operation, Producing Activity [Line Items] | |||
Common Stock, Shares, Issued | 622,078 | ||
Equity Method Investment, Ownership Percentage | 0.25% | ||
Orogrande Project [Member] | Sero Capital, LLC | |||
Oil and Gas, Result of Operation, Producing Activity [Line Items] | |||
Common Stock, Shares, Issued | 725,840 | ||
Equity Method Investment, Ownership Percentage | 0.2917% |
OIL & NATURAL GAS PROPERTIES _3
OIL & NATURAL GAS PROPERTIES (Details 3) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue Interest | 100 |
Working Interest | 100 |
University Lands - Mineral Owner | |
Revenue Interest | 20 |
ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe | |
Revenue Interest | 4.500 |
ORRI - Unrelated Party | |
Revenue Interest | 0.500 |
Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc. | |
Revenue Interest | 56.250 |
Working Interest | 75 |
Wolfbone Investments, LLC, an entity controlled by Gregory McCabe | |
Revenue Interest | 18.750 |
Working Interest | 25 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Risk-free interest rate | 4% |
Expected volatility of common stock | 125.39% |
Dividend yield | 0% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 10 years |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) - 2033 [Member] | Mar. 31, 2024 $ / 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 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - $ / shares | Feb. 29, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||||
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | ||
Common Stock, Shares, Outstanding | 251,830,516 | 248,830,516 | 165,472,241 | |
Common Stock [Member] | ||||
Class of Stock [Line Items] | ||||
[custom:StockIssuedDuringPeriodSharesConsultingAgreementNewIssues] | 500,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Income Tax Disclosure [Abstract] | ||
Operating Loss Carryforwards | $ 69,324,228 | $ 67,582,243 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Notes Payable | $ 21,589,362 | ||
Meta Materials, Inc. | 2021 Note | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Notes Payable | $ 15,000,000 | ||
Debt Instrument, Interest Rate During Period | 8% |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Asset retirement obligations – December 31, 2023 | $ 248,651 | |
Accretion expense | 5,903 | $ 5,865 |
Estimated liabilities recorded | ||
Asset retirement obligations –March 31, 2024 | $ 254,554 | $ 252,731 |
EXPLANATION OF THE RESTATEMENT
EXPLANATION OF THE RESTATEMENT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||||
Cash | $ 2,174,661 | $ 1,668,847 | $ 5,301,647 | $ 569,298 |
Accounts receivable, related party | 177,519 | |||
Prepaid expenses | 134,825 | 76,741 | 51,184 | |
Total current assets | 2,782,348 | 2,085,810 | 5,530,350 | |
Oil and gas properties, net of impairment | 205,413 | |||
Other assets | 105,179 | 105,179 | 80,179 | |
TOTAL ASSETS | 3,092,940 | 2,190,990 | 5,610,529 | |
Current liabilities: | ||||
Accounts payable | 1,341,084 | 3,777,693 | 5,375,669 | |
Note Payable - META | 21,589,362 | |||
Note Payable - Related Party | 42,499,082 | 41,221,028 | 16,875,000 | |
Accrued interest payable | 4,552,205 | 3,870,175 | 1,935,084 | |
Total current liabilities | 50,413,038 | 49,180,177 | 45,775,115 | |
Asset retirement obligations | 254,554 | 248,651 | 252,731 | |
Total liabilities | 50,667,592 | 49,428,828 | 46,027,846 | |
Stockholders equity(deficit): | ||||
Preferred stock, par value $0.001, 500,000,000 shares authorized; -0- issued and outstanding March 31, 2023 | ||||
Common stock, par value $0.001; 500,000,000 shares authorized; 165,472,241 issued and outstanding at March 31, 2023; | 25,183 | 24,883 | 16,547 | |
Additional paid-in capital | 72,496,356 | 71,956,656 | 51,590,800 | |
Accumulated deficit | (120,096,191) | (119,219,378) | (92,024,664) | |
Total stockholders equity(deficit) | (47,574,652) | (47,237,839) | (40,417,317) | (30,300,404) |
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT) | $ 3,092,940 | $ 2,190,989 | 5,610,529 | |
Previously Reported [Member] | ||||
Current assets: | ||||
Cash | 5,301,647 | 569,298 | ||
Accounts receivable, related party | 177,519 | |||
Prepaid expenses | 51,184 | |||
Total current assets | 5,530,350 | |||
Oil and gas properties, net of impairment | 88,626,670 | |||
Other assets | 80,179 | |||
TOTAL ASSETS | 94,237,199 | |||
Current liabilities: | ||||
Accounts payable | 5,375,669 | |||
Note Payable - META | 21,589,362 | |||
Note Payable - Related Party | 16,875,000 | |||
Accrued interest payable | 1,935,084 | |||
Total current liabilities | 45,775,115 | |||
Asset retirement obligations | 252,731 | |||
Total liabilities | 46,027,846 | |||
Stockholders equity(deficit): | ||||
Preferred stock, par value $0.001, 500,000,000 shares authorized; -0- issued and outstanding March 31, 2023 | ||||
Common stock, par value $0.001; 500,000,000 shares authorized; 165,472,241 issued and outstanding at March 31, 2023; | 16,547 | |||
Additional paid-in capital | 51,490,795 | |||
Accumulated deficit | (3,297,989) | |||
Total stockholders equity(deficit) | 48,209,353 | |||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT) | 94,237,199 | |||
Revision of Prior Period, Adjustment [Member] | ||||
Current assets: | ||||
Cash | ||||
Accounts receivable, related party | ||||
Prepaid expenses | ||||
Total current assets | ||||
Oil and gas properties, net of impairment | (88,626,670) | |||
Other assets | ||||
TOTAL ASSETS | (88,626,670) | |||
Current liabilities: | ||||
Accounts payable | ||||
Note Payable - META | ||||
Note Payable - Related Party | ||||
Accrued interest payable | ||||
Total current liabilities | ||||
Asset retirement obligations | ||||
Total liabilities | ||||
Stockholders equity(deficit): | ||||
Preferred stock, par value $0.001, 500,000,000 shares authorized; -0- issued and outstanding March 31, 2023 | ||||
Common stock, par value $0.001; 500,000,000 shares authorized; 165,472,241 issued and outstanding at March 31, 2023; | ||||
Additional paid-in capital | 100,005 | |||
Accumulated deficit | (88,726,675) | |||
Total stockholders equity(deficit) | (88,626,670) | |||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY(DEFICIT) | $ (88,626,670) |
EXPLANATION OF THE RESTATEMEN_2
EXPLANATION OF THE RESTATEMENT (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Oil and gas sales | $ 3,567 | $ 10,924 |
Operating expenses: | ||
Lease operating expenses | 36,811 | 15,816 |
Production taxes | 257 | 786 |
General and administrative | 758,640 | 2,472,739 |
Impairment expense | 713,173 | 7,883,657 |
Total operating expenses | 1,508,881 | 10,372,998 |
Other income | ||
Interest income | 1 | |
Total other income | 628,501 | 1 |
Loss before income taxes | (876,813) | (10,362,073) |
Provision for income taxes | ||
Net loss | $ (876,813) | $ (10,362,073) |
Loss per common share: | ||
Basic and Diluted | $ 0 | $ (0.06) |
Weighted average number of common shares outstanding: | ||
Basic and Diluted | 249,055,791 | 165,472,241 |
Previously Reported [Member] | ||
Oil and gas sales | $ 10,924 | |
Operating expenses: | ||
Lease operating expenses | 15,816 | |
Production taxes | 786 | |
General and administrative | 2,381,774 | |
Impairment expense | ||
Total operating expenses | 2,398,376 | |
Other income | ||
Interest income | 1 | |
Total other income | 1 | |
Loss before income taxes | (2,387,451) | |
Provision for income taxes | ||
Net loss | $ (2,387,451) | |
Loss per common share: | ||
Basic and Diluted | $ (0.01) | |
Weighted average number of common shares outstanding: | ||
Basic and Diluted | 165,472,241 | |
Revision of Prior Period, Adjustment [Member] | ||
Oil and gas sales | ||
Operating expenses: | ||
Lease operating expenses | ||
Production taxes | ||
General and administrative | 90,965 | |
Impairment expense | 7,883,657 | |
Total operating expenses | 7,974,622 | |
Other income | ||
Interest income | ||
Total other income | ||
Loss before income taxes | (7,974,622) | |
Provision for income taxes | ||
Net loss | $ (7,974,622) | |
Loss per common share: | ||
Basic and Diluted | ||
Weighted average number of common shares outstanding: | ||
Basic and Diluted |
EXPLANATION OF THE RESTATEMEN_3
EXPLANATION OF THE RESTATEMENT (Details 3) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash Flows Used in Operating Activities | ||
Net loss | $ (876,813) | $ (10,362,073) |
Adjustments to reconcile net loss to net cash from operations: | ||
Accretion expense | 5,903 | 5,865 |
Stock compensation expense | 90,000 | 245,160 |
Impairment expense | 713,173 | 7,883,657 |
Change in: | ||
Prepayments - development costs | (97,027) | 150,000 |
Prepaid expenses | (58,084) | 11,117 |
Accounts payable and accrued expenses | (2,436,608) | 443,532 |
Net cash used in operating activities | (3,313,570) | (1,622,742) |
Cash Flows Used in Investing Activities | ||
Investment in oil and gas properties | (10,477) | (7,390,797) |
Net cash used in investing activities | (10,477) | (7,390,797) |
Cash Flows From Financing Activities | ||
Proceeds from notes payable, related party | 1,000,000 | 14,875,000 |
Payments on promissory notes | (1,129,112) | |
Net cash from financing activities | 3,829,861 | 13,745,888 |
Net increase in cash | 505,814 | 4,732,349 |
Cash - beginning of period | 1,668,847 | 569,298 |
Cash - end of period | 2,174,661 | 5,301,647 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 129,112 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Capitalized Interest included in interest payable | $ 702,697 | 492,860 |
Previously Reported [Member] | ||
Cash Flows Used in Operating Activities | ||
Net loss | (2,387,451) | |
Adjustments to reconcile net loss to net cash from operations: | ||
Accretion expense | 5,865 | |
Stock compensation expense | 145,155 | |
Impairment expense | ||
Change in: | ||
Prepayments - development costs | 150,000 | |
Prepaid expenses | 11,117 | |
Accounts payable and accrued expenses | 1,499,658 | |
Net cash used in operating activities | (575,656) | |
Cash Flows Used in Investing Activities | ||
Investment in oil and gas properties | (8,437,883) | |
Net cash used in investing activities | (8,437,883) | |
Cash Flows From Financing Activities | ||
Proceeds from notes payable, related party | 14,875,000 | |
Payments on promissory notes | (1,129,112) | |
Net cash from financing activities | 13,745,888 | |
Net increase in cash | 4,732,349 | |
Cash - beginning of period | 569,298 | |
Cash - end of period | 5,301,647 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 129,112 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Capitalized Interest included in interest payable | 492,860 | |
Revision of Prior Period, Adjustment [Member] | ||
Cash Flows Used in Operating Activities | ||
Net loss | (7,974,622) | |
Adjustments to reconcile net loss to net cash from operations: | ||
Accretion expense | ||
Stock compensation expense | 100,005 | |
Impairment expense | 7,883,657 | |
Change in: | ||
Prepayments - development costs | ||
Prepaid expenses | ||
Accounts payable and accrued expenses | (1,056,126) | |
Net cash used in operating activities | (1,047,086) | |
Cash Flows Used in Investing Activities | ||
Investment in oil and gas properties | 1,047,086 | |
Net cash used in investing activities | 1,047,086 | |
Cash Flows From Financing Activities | ||
Proceeds from notes payable, related party | ||
Payments on promissory notes | ||
Net cash from financing activities | ||
Net increase in cash | ||
Cash - beginning of period | ||
Cash - end of period | ||
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Capitalized Interest included in interest payable |