Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 06, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-08157 | ||
Entity Registrant Name | RESERVE PETROLEUM CO | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 73-0237060 | ||
Entity Address, Address Line One | 6801 BROADWAY EXT. | ||
Entity Address, Address Line Two | SUITE 300 | ||
Entity Address, City or Town | OKLAHOMA CITY | ||
Entity Address, State or Province | OK | ||
Entity Address, Postal Zip Code | 73116-9037 | ||
City Area Code | 405 | ||
Local Phone Number | 848-7551 | ||
Title of 12(g) Security | COMMON STOCK ($0.50 PAR VALUE) | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 17,532,259 | ||
Entity Common Stock, Shares Outstanding | 155,108 | ||
Documents Incorporated by Reference | Portions of the definitive proxy statement (the “Proxy Statement”) relating to the registrant’s Annual Meeting of Stockholders to be held on May 21, 2024, which will be filed within 120 days of the end of the registrant’s year ended December 31, 2023, are incorporated by reference into Part III of this Form 10-K to the extent described therein. | ||
Entity Central Index Key | 0000083350 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 483 |
Auditor Name | HoganTaylor LLP |
Auditor Location | Oklahoma City, Oklahoma |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Current Assets: | |||
Cash and Cash Equivalents | [1] | $ 5,218,474 | $ 7,299,224 |
Available-for-Sale Debt Securities | [1] | 2,220,901 | 4,208,648 |
Equity Securities | [1] | 2,664,066 | 2,302,959 |
Refundable Income Taxes | [1] | 317,755 | 120,230 |
Accounts Receivable | [1] | 2,366,663 | 2,318,183 |
Total Current Assets | [1] | 12,787,859 | 16,249,244 |
Investments: | |||
Equity Method Investments | [1] | 2,818,790 | 2,469,644 |
Other Investments | [1] | 5,332,553 | 5,085,806 |
Total Investments | [1] | 8,151,343 | 7,555,450 |
Property, Plant and Equipment: | |||
Unproved Properties | [1] | 3,403,051 | 1,846,543 |
Proved Properties | [1] | 69,152,923 | 65,328,501 |
Oil and Gas Properties, Gross | [1] | 72,555,974 | 67,175,044 |
Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance | [1] | (57,622,564) | (52,773,978) |
Oil and Gas Properties, Net | [1] | 14,933,410 | 14,401,066 |
Other Property and Equipment, at Cost | [1] | 820,965 | 758,256 |
Less – Accumulated Depreciation | [1] | (306,587) | (236,883) |
Other Property and Equipment, Net | [1] | 514,378 | 521,373 |
Property, Plant and Equipment, Net | [1] | 15,447,788 | 14,922,439 |
Total Assets | [1] | 36,386,990 | 38,727,133 |
Current Liabilities: | |||
Accounts Payable | [1] | 537,796 | 399,735 |
Other Current Liabilities | [1] | 12,839 | 75,675 |
Note Payable, Current Portion | [1] | 142,136 | 136,637 |
Total Current Liabilities | [1] | 692,771 | 612,047 |
Long-Term Liabilities: | |||
Asset Retirement Obligation | [1] | 2,566,368 | 2,809,257 |
Deferred Tax Liability, Net | [1] | 1,219,511 | 1,619,595 |
Note Payable, Less Current Portion | [1] | 1,158,736 | 1,300,872 |
Total Long-Term Liabilities | [1] | 4,944,615 | 5,729,724 |
Total Liabilities | [1] | 5,637,386 | 6,341,771 |
Equity: | |||
Common Stock | [1] | 92,368 | 92,368 |
Additional Paid-in Capital | [1] | 65,000 | 65,000 |
Retained Earnings | [1] | 32,212,066 | 33,828,418 |
Equity Before Treasury Stock | [1] | 32,369,434 | 33,985,786 |
Less – Treasury Stock, at Cost | [1] | (1,820,527) | (1,749,858) |
Total Equity Applicable to The Reserve Petroleum Company | [1] | 30,548,907 | 32,235,928 |
Non-Controlling Interests | [1] | 200,697 | 149,434 |
Total Equity | [1] | 30,749,604 | 32,385,362 |
Total Liabilities and Equity | [1] | $ 36,386,990 | $ 38,727,133 |
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Assets | [1] | $ 36,386,990 | $ 38,727,133 |
Liabilities | [1] | 5,637,386 | 6,341,771 |
Variable Interest Entity, Primary Beneficiary | Grand Woods | |||
Assets | 2,310,518 | 2,195,878 | |
Liabilities | $ 1,300,872 | $ 1,437,509 | |
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Revenues: | ||
Total Operating Revenues | $ 13,376,102 | $ 16,170,884 |
Operating Costs and Expenses: | ||
Depreciation, Depletion, Amortization and Valuation Provisions | 5,895,470 | 2,802,006 |
Gain on Disposition of Oil and Gas Properties | (19,491) | (198,443) |
General, Administrative and Other | 2,606,906 | 2,115,352 |
Total Operating Costs and Expenses | 14,647,568 | 9,741,059 |
Income/(Loss) from Operations | (1,271,466) | 6,429,825 |
(Income)/Loss on Equity Method and Other Investments | 107,865 | (164,497) |
Interest Expense | (67,919) | (34,523) |
Other Income/(Loss), Net | 970,586 | (1,185,161) |
Income/(Loss) Before Income Taxes and Non-Controlling Interests | (260,934) | 5,045,644 |
Income Tax Provision/(Benefit) | (171,401) | 1,072,524 |
Net Income/(Loss) | (89,533) | 3,973,120 |
Less: Net Loss Attributable to Non-Controlling Interests | (33,885) | (27,631) |
Net Income/(Loss) Attributable to Common Stockholders | $ (55,648) | $ 4,000,751 |
Per Share Data: | ||
Net Income Attributable to Common Stockholders, Basic (in dollars per share) | $ (0.36) | $ 25.62 |
Cash Dividends (in dollars per share) | $ 10 | $ 10 |
Weighted Average Shares Outstanding, Basic (in shares) | 155,915 | 156,163 |
Oil and Gas Sales | ||
Operating Revenues: | ||
Total Operating Revenues | $ 12,490,047 | $ 14,869,219 |
Lease Bonuses and Other | ||
Operating Revenues: | ||
Total Operating Revenues | 190,588 | 295,544 |
Water Well Drilling Services | ||
Operating Revenues: | ||
Total Operating Revenues | 695,467 | 1,006,121 |
Operating Costs and Expenses: | ||
Operating costs and expenses | 1,072,476 | 907,447 |
Production | ||
Operating Costs and Expenses: | ||
Operating costs and expenses | 4,383,384 | 3,639,924 |
Exploration | ||
Operating Costs and Expenses: | ||
Operating costs and expenses | $ 708,823 | $ 474,773 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Non- Controlling Interests | |
Beginning balance at Dec. 31, 2021 | $ 29,798,830 | $ 92,368 | $ 65,000 | $ 31,389,240 | $ (1,747,778) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income/(Loss) | 3,973,120 | 4,000,751 | (27,631) | ||||
Dividends Declared | (1,561,573) | (1,561,573) | |||||
Purchase of Treasury Stock | (2,080) | (2,080) | |||||
Capital Contributions | 177,065 | 177,065 | |||||
Ending balance at Dec. 31, 2022 | 32,385,362 | [1] | 92,368 | 65,000 | 33,828,418 | (1,749,858) | 149,434 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income/(Loss) | (89,533) | (55,648) | (33,885) | ||||
Dividends Declared | (1,560,704) | (1,560,704) | |||||
Purchase of Treasury Stock | (70,669) | (70,669) | |||||
Capital Contributions | 85,148 | 85,148 | |||||
Ending balance at Dec. 31, 2023 | $ 30,749,604 | [1] | $ 92,368 | $ 65,000 | $ 32,212,066 | $ (1,820,527) | $ 200,697 |
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Provided by/(Applied to) Operating Activities: | ||
Net Income/(Loss) | $ (89,533) | $ 3,973,120 |
Adjustments to Reconcile Net Income/(Loss) to Net Cash Provided by Operating Activities: | ||
Depreciation, Depletion, Amortization and Valuation Provisions | 5,895,470 | 2,802,006 |
Depreciation | 75,997 | 64,291 |
Accretion of Asset Retirement Obligation | 72,885 | 60,236 |
(Gain)/Loss on Asset Sales | 19,491 | (267,522) |
Expired Leases | 0 | 158,794 |
Cash Distributions from Equity Method Investees | 48,000 | 41,580 |
(Income)/Loss on Equity Method and Other Investments | (47,200) | 154,856 |
Net (Gain)/Loss on Equity Securities | (115,603) | 1,635,240 |
Deferred Income Taxes | (400,084) | 1,068,275 |
Change in Receivables | (246,005) | (724,522) |
Change in Accounts Payable & Other Current Liabilities | 379,435 | (267,084) |
Other | 0 | (68,019) |
Net Cash Provided by Operating Activities | 5,592,853 | 8,631,251 |
Cash Provided by/(Applied to) Investing Activities: | ||
Maturity of Available-for-Sale Debt Securities | 9,679,589 | 0 |
Purchase of Available-for-Sale Debt Securities | (7,691,842) | (4,208,648) |
Proceeds from Disposal of Property, Plant and Equipment | 1,023,857 | 533,699 |
Purchase of Property, Plant and Equipment | (8,160,146) | (10,047,748) |
Purchase of Investments | (611,693) | (1,561,767) |
Cash Distributions from Other Investments | 15,000 | 108,019 |
Sale of Equity Securities | 158,472 | 9,148,302 |
Purchase of Equity Securities | (403,977) | (3,944,143) |
Cash Acquired in Excess of Payments to Acquire Business | 0 | 88,670 |
Net Cash Applied to Investing Activities | (5,990,740) | (9,883,616) |
Cash Provided by/(Applied to) Financing Activities: | ||
Principal Payments on Note Payable | (136,637) | (66,332) |
Capital Contributions from Non-Controlling Interests | 85,148 | 52,416 |
Dividends Paid to Stockholders | (1,560,704) | (1,561,573) |
Purchase of Treasury Stock | (70,669) | (2,080) |
Net Cash Applied to Financing Activities | (1,682,862) | (1,577,569) |
Net Change in Cash and Cash Equivalents | (2,080,750) | (2,829,933) |
Cash and Cash Equivalents at Beginning of Year | 7,299,224 | 10,129,157 |
Cash and Cash Equivalents at End of Year | 5,218,474 | 7,299,224 |
Supplemental Disclosures of Cash Flow Information: | ||
Interest Paid | 55,773 | 29,873 |
Income Taxes Paid, Net of Income Tax Refunds | 425,510 | 0 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Net (Increase)/Decrease in Accounts Payable for Property, Plant and Equipment Additions | $ 304,210 | $ (218,826) |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | The Reserve Petroleum Company, a Delaware corporation, is an independent oil and gas company engaged in oil and natural gas exploration, development and minerals management with areas of concentration in Arkansas, Kansas, Oklahoma, South Dakota, Texas and Wyoming, a single business segment. The Company is also engaged in investments and joint ventures that are not significant business segments. The Company’s consolidated subsidiaries consist of Grand Woods Development, LLC (“Grand Woods”), an Oklahoma limited liability company and wholly owned Trinity Water Services, LLC, an Oklahoma limited liability company, which has a water well drilling joint venture agreement with TWS South, LLC, a Texas limited liability company (Collectively, “TWS”). Unless otherwise specified or the context otherwise requires, all references in these notes to “the Company,” “its,” “our,” and “we” are to The Reserve Petroleum Company and its consolidated subsidiaries. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of The Reserve Petroleum Company and its subsidiaries in which the Company holds a controlling interest, reflecting ownership of a majority of the voting interest, as of the financial statement date. Additionally, the Company consolidates VIEs under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation. When necessary, reclassifications that are not material to the consolidated financial statements are made to prior period financial information to conform to the current year presentation. During 2023, the Company changed its presentation method on the statement of cash flows from the direct method to the indirect method. The indirect method is predominantly used in practice, provides a useful link to income statements and balance sheets, is more familiar to financial statement users and is the less costly approach to prepare. The Company has recast the Consolidated Statements of Cash Flows and related disclosures for the period ended December 31, 2022, to conform to the indirect presentation method in the current period. Variable Interest Entities The Company decides at the inception of each arrangement whether an entity in which an investment is made or in which we have other variable interests is considered a VIE. Generally, an entity is a VIE if (1) the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, (2) the entity’s investors lack any characteristics of a controlling financial interest or (3) the entity was established with non-substantive voting rights. The Company consolidates VIEs when the Company is deemed to be the primary beneficiary. The primary beneficiary of a VIE is generally the party that both: (1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. If the Company is not deemed to be the primary beneficiary of a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with applicable GAAP. Non-Controlling Interests When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the subsidiary are included in the consolidated financial statements. For those consolidated entities in which the Company’s ownership is less than 100%, the Company records a non-controlling interest as a component of equity on the consolidated balance sheets, which represents the third-party ownership in the net assets of the respective consolidated subsidiary. Additionally, the portion of the net income or loss attributable to the non-controlling interest is reported as net income (loss) attributable to non-controlling interest on the consolidated statements of operations. Changes in ownership interests in an entity that do not result in deconsolidation are generally recognized within equity. See Note 7 for additional details on non-controlling interests. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Investments Marketable Securities: The Company classifies its debt and marketable equity securities in one of two categories: equity or available-for-sale. Equity securities are bought and held principally for the purposes of selling them in the near term. All other securities are classified as available-for-sale debt securities. Equity securities and available-for-sale debt securities are recorded at fair value. Unrealized gains and losses on equity securities are reported in current earnings. Unrealized gains and losses on available-for-sale debt securities, which consist entirely of U.S. Government securities, are reported as a component of other comprehensive income when significant to the consolidated financial statements. There were no significant, cumulative unrealized gains or losses on available-for-sale debt securities as of December 31, 2023 or 2022. Equity Method and Other Investments: The Company accounts for its non-marketable investments in limited liability companies on the equity method if ownership allows the Company to exercise significant influence. Other investments, without readily determinable fair values, that are not accounted for under the equity method are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Management reviews our other investments and the underlying projects and activity periodically and assesses the need for any impairment. Management does not believe any investments need to be impaired at December 31, 2023 or 2022. See Note 6 for additional information on investments. Receivables and Revenue Recognition Oil and gas sales and resulting receivables are recognized when the product is delivered to the purchaser and title has transferred. Sales are to credit-worthy major energy purchasers with payments generally received within 60 days of transportation from the well site. Historically, the Company has had little, if any, uncollectible receivables; therefore, an allowance for credit losses has not been provided. The Company’s revenues are primarily derived from its interests in the sale of oil and natural gas production. Each barrel of oil or thousand cubic feet of natural gas delivered is considered a separate performance obligation. The Company recognizes revenue from its interests in the sales of oil and natural gas in the period that its performance obligations to provide oil and natural gas to customers are satisfied. Performance obligations are satisfied when the Company has no further obligations to perform related to the sale and the customer obtains control of product. The sales of oil and natural gas are made under contracts which the third-party operators of the wells have negotiated with customers, which typically include variable consideration that is based on pricing tied to local indices and volumes delivered in the current month. The Company receives payment from the sale of oil and natural gas production from one to three months after delivery. At the end of each month, as performance obligations are satisfied, the variable consideration can be reasonably estimated and amounts due from customers are accrued in accounts receivable in the consolidated balance sheets. Variances between the Company’s estimated revenue and actual payments are recorded in the month the payment is received; however, differences have been and are insignificant. Accordingly, the variable consideration is not constrained. A portion of oil and gas sales recorded in the consolidated statements of operations are the result of estimated volumes and pricing for oil and gas products not yet received for the year. For the years ending December 31, 2023 and 2022, that estimate represented approximately $977,894 and $1,142,304, respectively, of accrued oil and gas sales included in the consolidated statements of operations. The Company’s contracts with customers originate at or near the time of delivery and transfer of control of oil and natural gas to the purchasers. As such, the Company does not have significant unsatisfied performance obligations. The Company’s oil is typically sold at delivery points under contract terms that are common in our industry. The Company’s natural gas produced is delivered by the well operators to various purchasers at agreed upon delivery points under a limited number of contract types that are also common in our industry. However, under these contracts, the natural gas may be sold to a single purchaser or may be sold to separate purchasers. Regardless of the contract type, the terms of these contracts compensate the well operators for the value of the oil and natural gas at specified prices, and then the well operators will remit payment to the Company for its share in the value of the oil and natural gas sold. The Company’s disaggregated revenue has two primary revenue sources which are oil sales and natural gas sales. The following is an analysis of the components of oil and gas sales: Year Ended December 31, 2023 2022 Oil Sales $ 10,037,559 $ 9,976,153 Natural Gas Sales 2,155,986 4,342,725 Miscellaneous Oil and Gas Product Sales 296,502 550,341 $ 12,490,047 $ 14,869,219 The Company recognizes revenue from lease bonuses when it has received an executed lease agreement with a third party transferring the rights to explore for and produce any oil or gas they may find within the terms of the lease, the payment has been collected and the Company has no obligation to refund the payment. The Company recognizes the lease bonus as a cost recovery with any excess above its cost basis in the mineral properties being treated as income. Service revenue primarily relates to water well drilling and related activities and is recognized based on the Company’s right to invoice as services are performed. Property, Plant and Equipment Oil and gas properties are accounted for on the successful efforts method. The acquisition, exploration and development costs of producing properties are capitalized. The Company has not historically had any capitalized exploratory drilling costs that are pending determination of reserves for more than one year. All costs relating to unsuccessful exploratory wells, geological and geophysical costs, delay rentals and abandoned properties are expensed. Lease costs related to unproved properties are amortized over the life of the lease and are assessed for impairment when indicators of impairment are present. Any impairment of value is charged to expense. The Company assesses its proved oil and gas properties for impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. Such events include, but are not limited to, declines in commodity prices, increases in operating costs, unfavorable reserve revisions, poor well performance, changes in development plans and potential property divestitures. The impairment test compares undiscounted future net cash flows to the assets’ net book value. These undiscounted cash flows are driven by significant assumptions, including the Company’s expected future development activity, reserve estimates, forecasted pricing, future operating costs, capital expenditures and severance taxes. If the net capitalized costs exceed undiscounted future net cash flows, then the cost of the property is written down to fair value utilizing a discounted future net cash flow analysis. Depreciation, depletion and amortization of producing properties is computed on the units-of-production method on a property-by-property basis. The units-of-production method is based primarily on estimates of proved reserve quantities. Due to uncertainties inherent in this estimation process, it is at least reasonably possible that reserve quantities will be revised in the near term. Changes in estimated reserve quantities are applied to depreciation, depletion and amortization computations prospectively. Other property and equipment are depreciated on the straight line, declining balance, or other accelerated method as appropriate. The following estimated useful lives are used for property and equipment: Office furniture and fixtures (years) 5 to 10 Automotive equipment (years) 5 to 8 Income Taxes The Company utilizes an asset/liability approach to calculating deferred income taxes. Deferred income taxes are provided to reflect temporary differences in the basis of net assets and liabilities for income tax and financial reporting purposes. Deferred tax assets are reduced by a valuation allowance if a determination is made that it is more likely than not that some or all the deferred assets will not be realized based on the weight of all available evidence. The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, based upon the technical merits of the position. The Company will record the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with taxing authorities. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. There were no uncertain tax positions as of December 31, 2023 and 2022. The federal income tax returns for 2020, 2021 and 2022 are subject to examination. See Note 5 for discussion of income taxes. Earnings Per Share Accounting guidance for Earnings Per Share (EPS) establishes the methodology of calculating basic earnings per share and diluted earnings per share. The calculations of basic earnings per share and diluted earnings per share differ in that instruments convertible to common stock (such as stock options, warrants and convertible preferred stock) are added to weighted average shares outstanding when computing diluted earnings per share. For 2023 and 2022, the Company had no dilutive shares outstanding; therefore, basic and diluted earnings per share are the same. Concentrations of Credit Risk and Major Customers The Company’s receivables relate primarily to sales of oil and natural gas to purchasers with operations in Arkansas, Kansas, Oklahoma, South Dakota, Texas and Wyoming. The Company had one purchaser in 2023 whose total purchases were 11% of total oil and gas sales and two purchasers in 2022 whose purchases were 35% of total oil and gas sales. The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk with respect to cash and cash equivalents. The Company’s investment in marketable equity securities consists of equity interests in both U.S. and international entities involved in a broad range of industries. These marketable equity securities are subject to overall market risks, which could result in a temporary or permanent decline in the fair value of these securities. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates include oil and natural gas reserve quantities that form the basis for the calculation of amortization and impairment of oil and natural gas properties. Management emphasizes that reserve estimates are inherently imprecise and that estimates of more recent reserve discoveries are more imprecise than those for properties with long production histories. Actual results could differ from the estimates and assumptions used in the preparation of the Company’s consolidated financial statements. Gas Balancing Gas imbalances are accounted for under the sales method whereby revenues are recognized based on production sold. A liability is recorded when the Company’s excess takes of natural gas volumes exceed our estimated remaining recoverable reserves (over-produced). No receivables are recorded for those wells where the Company has taken less than our ownership share of gas production (under-produced). Guarantees At the inception of a guarantee or subsequent modification, the Company records a liability for the fair value of the obligation undertaken in issuing the guarantee. The Company records a liability for its obligations when it becomes probable that the Company will have to perform under the guarantee. The Company has issued guarantees associated with the Company’s consolidated VIE, Grand Woods and its equity method investments. See Note 6 for discussion of equity investments. Asset Retirement Obligation The Company records the fair value of its estimated liability to retire its oil and natural gas producing properties in the period in which it is incurred (typically the date of first sales). The estimated liability is calculated by obtaining current estimated plugging costs from the well operators, inflating it over the life of the property and discounting the estimated obligation to its present value. Current year inflation rate used is 4.08%. When the liability is first recorded, a corresponding increase in the carrying amount of the related long-lived asset is also recorded. Subsequently, the asset is amortized to expense over the life of the property and the liability is increased annually for the change in its present value. Current year discount rate used is 3.25%. The following table summarizes the asset retirement obligation for 2023 and 2022: 2023 2022 Beginning balance at January 1 $ 2,809,257 $ 2,359,826 Liabilities incurred 22,482 443,391 Liabilities settled (wells sold or plugged) (33,015) (79,405) Accretion expense 72,885 60,236 Revision to estimate (305,241) 25,209 Ending balance at December 31 $ 2,566,368 $ 2,809,257 New Accounting Pronouncements On December 14, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued. Among other things, these amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid: • The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes • The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received) • Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign • Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flows. On August 23, 2023, the FASB issued ASU 2023-05, Business Combinations— Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU is effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. This ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting Standards Codification Master Glossary. While joint ventures are defined in the Master Glossary, there has been no specific guidance in the Codification that applies to the formation accounting by a joint venture in its separate financial statements. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flows. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
COMMON STOCK | The following table summarizes the changes in common stock issued and outstanding: Shares Shares of Shares January 1, 2022, $.50 par value stock, 200,000 shares authorized 184,735 28,562 156,173 Purchase of stock — 16 (16) December 31, 2022, $.50 par value stock, 200,000 shares authorized 184,735 28,578 156,157 Purchase of stock — 461 (461) December 31, 2023, $.50 par value stock, 200,000 shares authorized 184,735 29,039 155,696 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | At December 31, 2023, available-for-sale debt securities, consisting entirely of U.S. government securities, were due within one year or less by contractual maturity. For equity securities, in 2023 the Company recorded realized losses of $248,329 and unrealized gains of $363,932. In 2022 the Company recorded realized losses of $350,469 and unrealized losses of $1,284,771. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Components of deferred taxes are as follows: December 31, 2023 2022 Assets: Payables $ 19,850 $ 22,647 Net Leasehold Reserves 162,128 84,641 Long-Lived Asset Impairment 1,336,249 967,774 Deferred Geological and Geophysical Expense 34,790 71,987 Unrealized Equity Securities and Capital Gains 198,875 148,984 Asset Retirement Obligation 404,401 376,911 Total Assets 2,156,293 1,672,944 Liabilities: Receivables 205,358 239,884 Intangible Drilling Costs 2,028,594 1,951,662 Depletion and Depreciation 811,686 864,746 Investments 220,652 198,995 Other 109,514 37,252 Total Liabilities 3,375,804 3,292,539 Net Deferred Tax Liability $ (1,219,511) $ (1,619,595) The following table summarizes the current and deferred portions of income tax provision/(benefit): Year Ended December 31, 2023 2022 Current Tax Provision/(Benefit): Federal $ 224,976 $ 3,812 State 3,707 437 Total Current Provision 228,683 4,249 Deferred Tax Provision/(Benefit) (400,084) 1,068,275 Total Provision/(Benefit) $ (171,401) $ 1,072,524 The total income tax provision/(benefit) expressed as a percentage of income before income tax was 66% for 2023 and 21% for 2022. These amounts differ from the amounts computed by applying the statutory U.S. federal enacted income tax rate of 21% for 2023 and 2022 as summarized in the following reconciliation: Year Ended December 31, 2023 2022 Computed Federal Tax Provision (Benefit): $ (54,796) $ 1,059,585 Increase (Decrease) in Tax from: Allowable Depletion in Excess of Basis (61,358) (76,317) Prior Year Provision Adjustments (36,746) 109,438 Dividend Received Deduction (6,110) (18,286) State Income Tax Provision 3,707 437 Other (16,098) (2,333) Income Tax Provision/(Benefit) $ (171,401) $ 1,072,524 Effective Tax Rate 66 % 21 % Excess federal percentage depletion, which is limited to certain production volumes and by certain income levels, reduces estimated taxable income projected for any year. When a provision for income taxes is recorded, federal excess percentage depletion benefits decrease the effective tax rate. When a benefit for income taxes is recorded, federal excess percentage depletion benefits increase the effective tax rate. The benefit of federal excess percentage depletion is not directly related to the amount of pre-tax income recorded in a period. Accordingly, in periods where a recorded pre-tax income is relatively small or a pre-tax loss, the proportional effect of these items on the effective tax rate may be significant. |
INVESTMENTS AND RELATED COMMITM
INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTEES | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTEES | The Company’s Equity Method Investments include: Broadway Sixty-Eight, LLC (“Broadway 68”), an Oklahoma limited liability company, with a 33% ownership. Broadway 68 owns and operates an office building in Oklahoma City, Oklahoma. The Company leases its corporate office from Broadway 68 on a month-to-month basis under the terms of the modified lease agreement. Rent expense for lease of the corporate office from Broadway 68 was $44,716 and $41,196 for 2023 and 2022, respectively. The Company’s investment in Broadway 68 totaled $123,901 and $115,093 at December 31, 2023 and 2022, respectively. Broadway Seventy-Two, LLC (“Broadway 72”), an Oklahoma limited liability company, with a 40% ownership, was acquired March 29, 2021. Broadway 72 owns and operates a commercial building in Oklahoma City, Oklahoma. The Company’s investment in Broadway 72 totaled $1,075,782 and $1,080,465 at December 31, 2023 and 2022, respectively. QSN Office Park, LLC (“QSN”), an Oklahoma limited liability company, with a 20% ownership, was acquired in 2016. QSN is constructing and selling office buildings in a new office park. The Company has guaranteed 20% of a $860,000 development loan that matures July 15, 2025 and 20% of a $585,000 construction loan that matures March 9, 2027. The Company’s investment in QSN totaled $307,325 and $284,249 at December 31, 2023 and 2022, respectively. The Company does not anticipate the need to perform on the guarantees of the loans. Stott’s Mill (“Stott’s Mill”), with a 50% ownership, was acquired in May 2022. Stott’s Mill consists of two residential lots in a developing subdivision located in Basalt, CO. The Company’s investment in Stott’s Mill totaled $708,179 and $688,575 at December 31, 2023 and 2022, respectively. Victorum BRH2 Investment, LLC (“BRH2”), with a 16.30% ownership, was acquired in August 2021. BRH2 serves as a special purpose investment vehicle to hold an investment in Berry-Rock Capital, LP (“Berry-Rock”). Berry-Rock is a provider of a rent-to-own program for individuals unable to qualify for a mortgage. The Company’s investment in BRH2 totaled $301,442 and $300,754 at December 31, 2023 and 2022, respectively. Victorum BRH3 Investment, LLC (“BRH3”), with a 27.27% ownership, was acquired in November 2022. BRH2 serves as a special purpose investment vehicle to hold an investment in Berry-Rock Capital, LP (“Berry-Rock”). Berry-Rock is a provider of a rent-to-own program for individuals unable to qualify for a mortgage. The Company’s investment in BRH3 totaled $302,161 and $301,261 at December 31, 2023 and 2022, respectively. The Company’s Other Investments primarily include: Bailey Hilltop Pipeline, LLC (“Bailey”), with a 10% ownership, was acquired in 2008. Bailey is a gas gathering system pipeline for the Bailey Hilltop Prospect oil and gas properties in Grady County, Oklahoma. The Company’s investment in Bailey totaled $77,377 at December 31, 2023 and 2022. Cloudburst International, Inc. (“Cloudburst”), with a 12.99% ownership, was acquired in 2020. Cloudburst owns exclusive rights to a water purification process technology that is being developed and currently tested. The Company’s investment in Cloudburst totaled $1,596,007 at December 31, 2023 and 2022. Genlith, Inc. (“Genlith”), with a 5.15% ownership, was acquired in July 2020. Genlith identifies and structures investments in the new energy economy through corporate ventures, advisory and fund management. The Company’s investment in Genlith totaled $311,958 and $460,000 at December 31, 2023 and 2022, respectively. OKC Industrial Properties, LC (“OKC”), with a 10% ownership, was acquired in 1992. OKC originally owned approximately 260 acres of undeveloped land in north Oklahoma City and over time has sold all but approximately 13 acres. The Company’s investment in OKC totaled $67,482 and $82,482 at December 31, 2023 and 2022, respectively. Grand Woods holds approximately 26.56 acres of undeveloped real estate in northeast Oklahoma City. The accumulated costs of the land totaled $2,171,828 at December 31, 2023. See Note 7 for information related to Grand Woods. Victorum Capital Club (“VCC”) invests in and manages special purpose investment vehicles that hold investments in various startup companies. The Company participates with minority ownership in an assortment of investments held with VCC. The Company’s investment in VCC special purpose investment vehicles totaled $357,259 at December 31, 2023, and 2022. VCC Venture Fund I, LP (“VCC Venture”), serves as a limited partnership to be used for investments in start-up entities and is managed by Victorum Capital Club. The Company committed to a $250,000 investment in VCC Venture. The Company’s investment in VCC Venture totaled $93,750 and $31,250 at December 31, 2023 and 2022, respectively. The balance at December 31, 2023 represents 37.5% of the Company’s capital commitment. Cortado Ventures Fund II-A, LP (“Cortado II-A”), with less than 2% ownership, serves as a limited partnership to be used for investments in start-up entities and is managed by Cortado Capital II, LLC. The Company committed to a $1,000,000 investment in Cortado II-A on June 20, 2023. The Company’s investment in Cortado II-A totaled $500,000 at December 31, 2023, which represents 50% of the Company's capital commitment. |
NON-CONTROLLING INTERESTS AND V
NON-CONTROLLING INTERESTS AND VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
NON-CONTROLLING INTERESTS AND VARIABLE INTEREST ENTITIES | TWS and Grand Woods are accounted for as consolidated VIEs. The Company owns an 80.37% interest in Grand Woods in the form of 47.08 Class A units and 546,735 Class C units, with the remaining non-controlling member interests held by other members, including 8.72% owned by executive officers of the Company. Grand Woods holds approximately 26.56 acres of undeveloped real estate in northeast Oklahoma City. Grand Woods was initially acquired as an investment in 2015. On September 15, 2022, Grand Woods entered into an agreement (“the 2022 Agreement”) with its members, whereby they would convert existing investor loans and credit enhancement fees to member units. The change in member units resulted in the Company having the power to direct the activities significant to Grand Woods and becoming the primary beneficiary; therefore, consolidation of Grand Woods became required and effective for the period ending September 30, 2022. As part of the consolidation of Grand Woods, the Company recorded $4,173 in cash, had noncash investing activities of $2,171,828 in the form of the accumulated costs of land in the investment, which is included in other investments, and had noncash financing activities of $1,437,509 in the form of a senior note payable. The Company is the only guarantor of $1,200,000 of the note payable held by Grand Woods, for which the Company was granted a $60,000 credit enhancement fee. See Note 8 for terms and guarantee of debt held by Grand Woods, which is included in the consolidated balance sheets. As part of the 2022 Agreement, the Company converted the credit enhancement fee of $60,000 along with existing notes receivable and accrued interest of $486,735 due from Grand Woods to Class C member units in Grand Woods. Any future additional capital calls will be classified as Class C units. Class C units accrue a dividend of 6% per annum and will hold priority payment over Class A units upon sale of any Grand Woods property. As a result of the Company’s guarantee of $1,200,000 of Grand Woods debt, there is partial recourse to the Company for the consolidated VIE’s liabilities. The following tables present the summarized assets and liabilities of Grand Woods and TWS included in the consolidated balance sheets as of December 31, 2023 and 2022. The assets of Grand Woods and TWS in the table below may only be used to settle obligations of Grand Woods or TWS, respectively. The assets and liabilities in the table below include third party assets and liabilities only and exclude intercompany balances that eliminate in consolidation. December 31, 2023 Grand Woods TWS Total Assets: Cash $ 138,690 $ 154,653 $ 293,343 Accounts Receivable — 640 640 Other Investments (Land) 2,171,828 — 2,171,828 Total Current Assets 2,310,518 155,293 2,465,812 Other Property and Equipment, at cost — 471,219 471,219 Less – Accumulated Depreciation — (168,274) (168,274) Other Property and Equipment, Net — 302,945 302,945 Total Assets $ 2,310,518 $ 458,238 $ 2,768,756 Liabilities: Accounts Payable $ — $ 398 $ 398 Note Payable, Current Portion 142,136 — 142,136 Total Current Liabilities 142,136 398 142,534 Note Payable, Less Current Portion 1,158,736 — 1,158,736 Total Liabilities $ 1,300,872 $ 398 $ 1,301,270 December 31, 2022 Grand Woods TWS Total Assets: Cash $ 24,050 $ 281,654 $ 305,704 Accounts Receivable — 72,716 72,716 Other Investments (Land) 2,171,828 — 2,171,828 Total Current Assets 2,195,878 354,370 2,550,248 Other Property and Equipment, at cost — 419,044 419,044 Less – Accumulated Depreciation — (92,278) (92,278) Other Property and Equipment, Net — 326,766 326,766 Total Assets $ 2,195,878 $ 681,136 $ 2,877,014 Liabilities: Accounts Payable $ — $ 58,742 $ 58,742 Note Payable, Current Portion 136,637 — 136,637 Total Current Liabilities 136,637 58,742 195,379 Note Payable, Less Current Portion 1,300,872 — 1,300,872 Total Liabilities $ 1,437,509 $ 58,742 $ 1,496,251 |
NOTE PAYABLE
NOTE PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLE | Grand Woods has a note payable (“the Note”) that was used for the purchase and development of property. The Note has a 4% interest rate and matures November 23, 2026. The Note has scheduled payments of principal and interest in the amount of $16,043 per month, with a balloon payment of any unpaid principal balance due on November 23, 2026. The balance of the Note at December 31, 2023 is $1,300,872, of which $142,136 is classified as current. Interest paid on the Note totaled $55,773 in 2023 and $29,873 in 2022. The Note is secured by the underlying property and a $1,200,000 guaranty issued by the Company. Covenants of the Note include a pay down requirement that states that sales of parcels will require a pay down on the loan of 90% of the net proceeds received from the purchaser less capital gains obligation. The remaining 10% shall be held in an operating reserve account for operating expenses and the use in payment of taxes. No distributions to partners, except for taxes, are permitted throughout the term of the loan. The intent of the Grand Woods investment manager and members is that proceeds from the sale of all, or part of, the property will be used to reduce or eliminate the Note. The Company does not anticipate the need to perform on the guarantee of the Note prior to a sale of the underlying property. Below is a schedule of future principal payments that we are obligated to make on the outstanding Note at December 31, 2023: Years Ending December 31, Principal Payments 2024 142,136 2025 148,155 2026 1,010,581 $ 1,300,872 |
COSTS INCURRED IN OIL AND GAS P
COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION, EXPLORATION AND DEVELOPMENT ACTIVITIES | 12 Months Ended |
Dec. 31, 2023 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION, EXPLORATION AND DEVELOPMENT ACTIVITIES | All the Company’s oil and gas operations are within the continental United States. In connection with its oil and gas operations, the following costs were incurred: Year Ended December 31, 2023 2022 Acquisition of Properties: Unproved $ 2,778,208 $ 963,822 Proved 1,895,869 4,020,523 Exploration Costs 1,941,369 853,455 Development Costs 1,768,303 4,524,443 Asset Retirement Obligation 22,482 468,600 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | The Company uses a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. Level 3 – Unobservable inputs that reflect the Company’s own assumptions. During 2023 and 2022, there were no transfers into or out of Level 2 or Level 3. Recurring Fair Value Measurements Certain of the Company’s assets are reported at fair value in the accompanying consolidated balance sheets on a recurring basis. The Company determined the fair value of equity securities and available-for-sale debt securities using quoted market prices, and where applicable, securities with similar maturity dates and interest rates. At December 31, 2023 and 2022, the Company’s assets reported at fair value on a recurring basis are summarized as follows: December 31, 2023 Level 1 Inputs Level 2 Inputs Level 3 Inputs Financial Assets: Available-for-Sale Debt Securities – U.S. Treasury Bills Maturing within 1 year $ — $ 2,220,901 $ — Equity Securities: Domestic Equities 2,321,275 — — International Equities 130,005 — — Others 212,786 — — $ 2,664,066 $ 2,220,901 $ — December 31, 2022 Level 1 Inputs Level 2 Inputs Level 3 Inputs Financial Assets: Available-for-Sale Debt Securities – U.S. Treasury Bills Maturing within 1 year — 4,208,648 — Equity Securities: Domestic Equities $ 1,720,410 $ — $ — International Equities 448,405 — — Others 134,144 — — $ 2,302,959 $ 4,208,648 $ — Non-recurring Fair Value Measurements The Company’s asset retirement obligation incurred annually represents a non-recurring fair value liability. The fair value of the non-financial liability incurred was $22,482 in 2023 and $443,391 in 2022 and was calculated using Level 3 inputs. See Note 2 for more information about this liability and the inputs used for calculating fair value. The fair value of oil and gas properties used in estimating impairment losses of $2,393,015 for 2023 and $1,109,455 for 2022 were based on Level 3 inputs. Certain oil and natural gas producing properties have been deemed to be impaired because the assets, evaluated on a property-by-property basis, are not expected to recover their entire carrying value through future cash flows. Impairment losses, when recorded, are included in the consolidated statements of operations in the line-item Depreciation, Depletion, Amortization and Valuation Provision. Impairments are calculated by reducing the carrying value of the individual properties to an estimated fair value equal to the discounted present value of the future cash flow from these properties. Forward pricing is used for calculating future revenue and cash flow. Fair Value of Financial Instruments The Company’s other financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables and dividends payable. As of December 31, 2023 and 2022, the historical cost of cash and cash equivalents, trade receivables, trade payables and dividends payable are considered representative of their respective fair values due to the short-term maturities of these items. |
OTHER INCOME_(LOSS), NET
OTHER INCOME/(LOSS), NET | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME/(LOSS), NET | The following is an analysis of the components of Other Income/(Loss), Net: Year Ended December 31, 2023 2022 Net Realized and Unrealized Gain/(Loss) on Equity Securities $ 115,603 $ (1,635,240) Gain on Other Asset Sales — 49,823 Interest Income 440,244 98,231 Dividend Income 58,193 264,035 Income from Other Investments 363,738 108,034 Miscellaneous Income and Expenses (7,192) (70,044) Other Income/(Loss), Net $ 970,586 $ (1,185,161) |
DEFINED CONTRIBUTION EMPLOYEE B
DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN | The Company sponsors a 401(k) savings plan to which both the Company and eligible employees may contribute. Company matching contributions are 100% of employee contributions up to 6% of annual salary. The Company’s share of expenses relating to these matching contributions was $61,454 for 2023, and $48,271 for 2022. |
CERTAIN RELATIONSHIPS AND RELAT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | The Company is affiliated by common management and ownership with Lochbuie Limited Liability Company (“Lochbuie”) and Mesquite Minerals, Inc. ("Mesquite"). Mesquite was sold in 2022. The Company also owns or has owned interests in certain producing and non-producing oil and gas properties as tenants in common with the affiliates. Lochbuie and Mesquite, prior to its sale in 2022, share facilities and employees including executive officers with the Company. The Company was reimbursed for services, facilities and miscellaneous business expenses incurred in 2023 in the amount of $172,949 for Lochbuie. Included in this amount is the affiliate's share of salaries. In 2023, the share of salaries paid by Lochbuie was $107,981. In 2022, reimbursements were $200,153 and $144,951 for Lochbuie and Mesquite, respectively. The share of salaries paid were $112,887 and $81,533 for Lochbuie and Mesquite, respectively. The Company purchased working interest properties from Mesquite for $699,770, effective July 1, 2022. Sales price for these properties was determined using risk-adjusted estimated cash flows of the properties as of June 30, 2022. The Company also purchased non-producing leaseholds and other miscellaneous assets from Mesquite Minerals, Inc. totaling $289,739. Management believes the amounts paid are reasonable estimates of fair values of the assets acquired. |
UNAUDITED SUPPLEMENTAL FINANCIA
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Extractive Industries [Abstract] | |
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION | THE RESERVE PETROLEUM COMPANY WORKING INTEREST RESERVE QUANTITY INFORMATION (Unaudited) Year Ended December 31, 2023 2022 Oil and Condensate (Bbls) Proved Developed Reserves: Beginning of Year 765,994 357,274 Revisions of Previous Estimates (170,142) 77,680 Extensions and Discoveries 74,183 74,737 Purchase of Reserves — 337,387 Production (104,138) (81,084) End of Year 565,897 765,994 Proved Developed Reserves: Beginning of Year 765,994 357,274 End of Year 565,897 765,994 Gas (MCF) Proved Developed Reserves: Beginning of Year 3,077,205 2,668,082 Revisions of Previous Estimates (608,967) 438,711 Extensions and Discoveries 472,154 170,312 Purchase of Reserves — 216,030 Production (504,915) (415,930) End of Year 2,435,477 3,077,205 Proved Developed Reserves: Beginning of Year 3,077,205 2,668,082 End of Year 2,435,477 3,077,205 See notes on next page. SUPPLEMENTAL SCHEDULE 1 THE RESERVE PETROLEUM COMPANY WORKING INTEREST RESERVE QUANTITY INFORMATION (Unaudited) Notes: 1. Estimates of royalty interests’ reserves, on properties in which the Company does not own a working interest, have not been included because the information required for the estimation of such reserves is not available. The Company’s share of production from its net royalty interests was 29,986 Bbls of oil and 263,849 MCF of gas for 2023 and 26,322 Bbls of oil and 295,242 MCF of gas for 2022. 2. The preceding table sets forth estimates of the Company’s proved oil and gas reserves, together with the changes in those reserves, as prepared by the Company’s engineer for 2023 and 2022. The Company engineer’s qualifications set forth in the Proxy Statement and as incorporated into Item 10 of this Form 10-K, are incorporated herein by reference. All reserves are located within the United States. 3. The Company emphasizes that the reserve volumes shown are estimates, which by their nature are subject to revision in the near term. The estimates have been made by utilizing geological and reservoir data, as well as actual production performance data available to the Company. These estimates are reviewed annually and are revised upward or downward as warranted by additional performance data. The Company’s engineer is not independent but strives to use an objective approach in calculating the Company’s working interest reserve estimates. 4. The Company’s internal controls relating to the calculation of its working interests’ reserve estimates include review and testing of the accounting data flowing into the calculation of the reserve estimates. In addition, the average oil and natural gas product prices calculated in the engineer’s 2023 summary reserve report was tested by comparison to 2023 average sales price information from the accounting records. SUPPLEMENTAL SCHEDULE 2 THE RESERVE PETROLEUM COMPANY STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED WORKING INTEREST OIL AND GAS RESERVES (Unaudited) Year Ended December 31, 2023 2022 Future Cash Inflows $ 46,985,495 $ 87,815,597 Future Production and Development Costs (24,793,198) (38,477,835) Future Asset Retirement Obligation (3,196,694) (3,719,370) Future Income Tax Expense (133,859) (5,529,912) Future Net Cash Flows 18,861,744 40,088,480 10% Annual Discount for Estimated Timing of Cash Flows (5,563,580) (16,182,590) Standardized Measure of Discounted Future Net Cash Flows $ 13,298,164 $ 23,905,890 Estimates of future net cash flows from the Company’s proved working interests in oil and gas reserves are shown in the table above. These estimates, which by their nature are subject to revision in the near term, were based on an average monthly product price received by the Company for 2022 and 2023, with no escalation. The development and production costs are based on year-end cost levels, assuming the continuation of existing economic conditions. Cash flows are further reduced by estimated future asset retirement obligations and estimated future income tax expense calculated by applying the current statutory income tax rates to the pretax net cash flows, less depreciation of the tax basis of the properties and depletion applicable to oil and gas production. SUPPLEMENTAL SCHEDULE 3 THE RESERVE PETROLEUM COMPANY CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS FROM PROVED WORKING INTEREST RESERVE QUANTITIES (Unaudited) Year Ended December 31, 2023 2022 Standardized Measure, Beginning of Year $ 23,905,890 $ 8,839,459 Sales and Transfers, Net of Production Costs (5,232,550) (6,832,951) Net Change in Sales and Transfer Prices, Net of Production Costs (12,900,661) 6,904,759 Extensions, Discoveries and Improved Recoveries, Net of Future Production and Development Costs 5,037,358 5,895,598 Revisions of Quantity Estimates (3,250,921) 3,893,178 Accretion of Discount 1,631,935 1,203,372 Purchases of Reserves in Place — 7,853,989 Net Change in Income Taxes 3,206,768 (2,562,318) Net Change in Asset Retirement Obligation (44,314) 468,599 Changes in Production Rates (Timing) and Other 944,659 (1,757,795) Standardized Measure, End of Year $ 13,298,164 $ 23,905,890 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of The Reserve Petroleum Company and its subsidiaries in which the Company holds a controlling interest, reflecting ownership of a majority of the voting interest, as of the financial statement date. Additionally, the Company consolidates VIEs under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation. When necessary, reclassifications that are not material to the consolidated financial statements are made to prior period financial information to conform to the current year presentation. During 2023, the Company changed its presentation method on the statement of cash flows from the direct method to the indirect method. The indirect method is predominantly used in practice, provides a useful link to income statements and balance sheets, is more familiar to financial statement users and is the less costly approach to prepare. The Company has recast the Consolidated Statements of Cash Flows and related disclosures for the period ended December 31, 2022, to conform to the indirect presentation method in the current period. |
Variable Interest Entities | Variable Interest Entities The Company decides at the inception of each arrangement whether an entity in which an investment is made or in which we have other variable interests is considered a VIE. Generally, an entity is a VIE if (1) the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, (2) the entity’s investors lack any characteristics of a controlling financial interest or (3) the entity was established with non-substantive voting rights. The Company consolidates VIEs when the Company is deemed to be the primary beneficiary. The primary beneficiary of a VIE is generally the party that both: (1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. If the Company is not deemed to be the primary beneficiary of a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with applicable GAAP. |
Non-Controlling Interests | Non-Controlling Interests When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the subsidiary are included in the consolidated financial statements. For those consolidated entities in which the Company’s ownership is less than 100%, the Company records a non-controlling interest as a component of equity on the consolidated balance sheets, which represents the third-party ownership in the net assets of the respective consolidated subsidiary. Additionally, the portion of the net income or loss attributable to the non-controlling interest is reported as net income (loss) attributable to non-controlling interest on the consolidated statements of operations. Changes in ownership interests in an entity that do not result in deconsolidation are generally recognized within equity. See Note 7 for additional details on non-controlling interests. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. |
Investments | Investments Marketable Securities: The Company classifies its debt and marketable equity securities in one of two categories: equity or available-for-sale. Equity securities are bought and held principally for the purposes of selling them in the near term. All other securities are classified as available-for-sale debt securities. Equity securities and available-for-sale debt securities are recorded at fair value. Unrealized gains and losses on equity securities are reported in current earnings. Unrealized gains and losses on available-for-sale debt securities, which consist entirely of U.S. Government securities, are reported as a component of other comprehensive income when significant to the consolidated financial statements. There were no significant, cumulative unrealized gains or losses on available-for-sale debt securities as of December 31, 2023 or 2022. Equity Method and Other Investments: The Company accounts for its non-marketable investments in limited liability companies on the equity method if ownership allows the Company to exercise significant influence. Other investments, without readily determinable fair values, that are not accounted for under the equity method are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Management reviews our other investments and the underlying projects and activity periodically and assesses the need for any impairment. Management does not believe any investments need to be impaired at December 31, 2023 or 2022. See Note 6 for additional information on investments. |
Receivables and Revenue Recognition | Receivables and Revenue Recognition Oil and gas sales and resulting receivables are recognized when the product is delivered to the purchaser and title has transferred. Sales are to credit-worthy major energy purchasers with payments generally received within 60 days of transportation from the well site. Historically, the Company has had little, if any, uncollectible receivables; therefore, an allowance for credit losses has not been provided. The Company’s revenues are primarily derived from its interests in the sale of oil and natural gas production. Each barrel of oil or thousand cubic feet of natural gas delivered is considered a separate performance obligation. The Company recognizes revenue from its interests in the sales of oil and natural gas in the period that its performance obligations to provide oil and natural gas to customers are satisfied. Performance obligations are satisfied when the Company has no further obligations to perform related to the sale and the customer obtains control of product. The sales of oil and natural gas are made under contracts which the third-party operators of the wells have negotiated with customers, which typically include variable consideration that is based on pricing tied to local indices and volumes delivered in the current month. The Company receives payment from the sale of oil and natural gas production from one to three months after delivery. At the end of each month, as performance obligations are satisfied, the variable consideration can be reasonably estimated and amounts due from customers are accrued in accounts receivable in the consolidated balance sheets. Variances between the Company’s estimated revenue and actual payments are recorded in the month the payment is received; however, differences have been and are insignificant. Accordingly, the variable consideration is not constrained. A portion of oil and gas sales recorded in the consolidated statements of operations are the result of estimated volumes and pricing for oil and gas products not yet received for the year. For the years ending December 31, 2023 and 2022, that estimate represented approximately $977,894 and $1,142,304, respectively, of accrued oil and gas sales included in the consolidated statements of operations. The Company’s contracts with customers originate at or near the time of delivery and transfer of control of oil and natural gas to the purchasers. As such, the Company does not have significant unsatisfied performance obligations. The Company’s oil is typically sold at delivery points under contract terms that are common in our industry. The Company’s natural gas produced is delivered by the well operators to various purchasers at agreed upon delivery points under a limited number of contract types that are also common in our industry. However, under these contracts, the natural gas may be sold to a single purchaser or may be sold to separate purchasers. Regardless of the contract type, the terms of these contracts compensate the well operators for the value of the oil and natural gas at specified prices, and then the well operators will remit payment to the Company for its share in the value of the oil and natural gas sold. The Company’s disaggregated revenue has two primary revenue sources which are oil sales and natural gas sales. The following is an analysis of the components of oil and gas sales: Year Ended December 31, 2023 2022 Oil Sales $ 10,037,559 $ 9,976,153 Natural Gas Sales 2,155,986 4,342,725 Miscellaneous Oil and Gas Product Sales 296,502 550,341 $ 12,490,047 $ 14,869,219 The Company recognizes revenue from lease bonuses when it has received an executed lease agreement with a third party transferring the rights to explore for and produce any oil or gas they may find within the terms of the lease, the payment has been collected and the Company has no obligation to refund the payment. The Company recognizes the lease bonus as a cost recovery with any excess above its cost basis in the mineral properties being treated as income. Service revenue primarily relates to water well drilling and related activities and is recognized based on the Company’s right to invoice as services are performed. |
Property, Plant and Equipment | Property, Plant and Equipment Oil and gas properties are accounted for on the successful efforts method. The acquisition, exploration and development costs of producing properties are capitalized. The Company has not historically had any capitalized exploratory drilling costs that are pending determination of reserves for more than one year. All costs relating to unsuccessful exploratory wells, geological and geophysical costs, delay rentals and abandoned properties are expensed. Lease costs related to unproved properties are amortized over the life of the lease and are assessed for impairment when indicators of impairment are present. Any impairment of value is charged to expense. The Company assesses its proved oil and gas properties for impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. Such events include, but are not limited to, declines in commodity prices, increases in operating costs, unfavorable reserve revisions, poor well performance, changes in development plans and potential property divestitures. The impairment test compares undiscounted future net cash flows to the assets’ net book value. These undiscounted cash flows are driven by significant assumptions, including the Company’s expected future development activity, reserve estimates, forecasted pricing, future operating costs, capital expenditures and severance taxes. If the net capitalized costs exceed undiscounted future net cash flows, then the cost of the property is written down to fair value utilizing a discounted future net cash flow analysis. Depreciation, depletion and amortization of producing properties is computed on the units-of-production method on a property-by-property basis. The units-of-production method is based primarily on estimates of proved reserve quantities. Due to uncertainties inherent in this estimation process, it is at least reasonably possible that reserve quantities will be revised in the near term. Changes in estimated reserve quantities are applied to depreciation, depletion and amortization computations prospectively. Other property and equipment are depreciated on the straight line, declining balance, or other accelerated method as appropriate. The following estimated useful lives are used for property and equipment: Office furniture and fixtures (years) 5 to 10 Automotive equipment (years) 5 to 8 |
Income Taxes | Income Taxes The Company utilizes an asset/liability approach to calculating deferred income taxes. Deferred income taxes are provided to reflect temporary differences in the basis of net assets and liabilities for income tax and financial reporting purposes. Deferred tax assets are reduced by a valuation allowance if a determination is made that it is more likely than not that some or all the deferred assets will not be realized based on the weight of all available evidence. The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, based upon the technical merits of the position. The Company will record the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with taxing authorities. |
Earnings Per Share | Earnings Per Share |
Concentrations of Credit Risk and Major Customers | Concentrations of Credit Risk and Major Customers The Company’s investment in marketable equity securities consists of equity interests in both U.S. and international entities involved in a broad range of industries. These marketable equity securities are subject to overall market risks, which could result in a temporary or permanent decline in the fair value of these securities. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates include oil and natural gas reserve quantities that form the basis for the calculation of amortization and impairment of oil and natural gas properties. Management emphasizes that reserve estimates are inherently imprecise and that estimates of more recent reserve discoveries are more imprecise than those for properties with long production histories. Actual results could differ from the estimates and assumptions used in the preparation of the Company’s consolidated financial statements. |
Gas Balancing | Gas Balancing Gas imbalances are accounted for under the sales method whereby revenues are recognized based on production sold. A liability is recorded when the Company’s excess takes of natural gas volumes exceed our estimated remaining recoverable reserves (over-produced). No receivables are recorded for those wells where the Company has taken less than our ownership share of gas production (under-produced). |
Guarantees | Guarantees |
Asset Retirement Obligation | Asset Retirement Obligation The Company records the fair value of its estimated liability to retire its oil and natural gas producing properties in the period in which it is incurred (typically the date of first sales). The estimated liability is calculated by obtaining current estimated plugging costs from the well operators, inflating it over the life of the property and discounting the estimated obligation to its present value. Current year inflation rate used is 4.08%. When the liability is first recorded, a corresponding increase in the carrying amount of the related long-lived asset is also recorded. Subsequently, the asset is amortized to expense over the life of the property and the liability is increased annually for the change in its present value. Current year discount rate used is 3.25%. The following table summarizes the asset retirement obligation for 2023 and 2022: 2023 2022 Beginning balance at January 1 $ 2,809,257 $ 2,359,826 Liabilities incurred 22,482 443,391 Liabilities settled (wells sold or plugged) (33,015) (79,405) Accretion expense 72,885 60,236 Revision to estimate (305,241) 25,209 Ending balance at December 31 $ 2,566,368 $ 2,809,257 |
New Accounting Pronouncements | New Accounting Pronouncements On December 14, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued. Among other things, these amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid: • The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes • The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received) • Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign • Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flows. On August 23, 2023, the FASB issued ASU 2023-05, Business Combinations— Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU is effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. This ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting Standards Codification Master Glossary. While joint ventures are defined in the Master Glossary, there has been no specific guidance in the Codification that applies to the formation accounting by a joint venture in its separate financial statements. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following is an analysis of the components of oil and gas sales: Year Ended December 31, 2023 2022 Oil Sales $ 10,037,559 $ 9,976,153 Natural Gas Sales 2,155,986 4,342,725 Miscellaneous Oil and Gas Product Sales 296,502 550,341 $ 12,490,047 $ 14,869,219 |
Schedule of Useful Lives of Property and Equipment | The following estimated useful lives are used for property and equipment: Office furniture and fixtures (years) 5 to 10 Automotive equipment (years) 5 to 8 |
Schedule of Asset Retirement Obligations | The following table summarizes the asset retirement obligation for 2023 and 2022: 2023 2022 Beginning balance at January 1 $ 2,809,257 $ 2,359,826 Liabilities incurred 22,482 443,391 Liabilities settled (wells sold or plugged) (33,015) (79,405) Accretion expense 72,885 60,236 Revision to estimate (305,241) 25,209 Ending balance at December 31 $ 2,566,368 $ 2,809,257 |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding Roll Forward | The following table summarizes the changes in common stock issued and outstanding: Shares Shares of Shares January 1, 2022, $.50 par value stock, 200,000 shares authorized 184,735 28,562 156,173 Purchase of stock — 16 (16) December 31, 2022, $.50 par value stock, 200,000 shares authorized 184,735 28,578 156,157 Purchase of stock — 461 (461) December 31, 2023, $.50 par value stock, 200,000 shares authorized 184,735 29,039 155,696 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Components of deferred taxes are as follows: December 31, 2023 2022 Assets: Payables $ 19,850 $ 22,647 Net Leasehold Reserves 162,128 84,641 Long-Lived Asset Impairment 1,336,249 967,774 Deferred Geological and Geophysical Expense 34,790 71,987 Unrealized Equity Securities and Capital Gains 198,875 148,984 Asset Retirement Obligation 404,401 376,911 Total Assets 2,156,293 1,672,944 Liabilities: Receivables 205,358 239,884 Intangible Drilling Costs 2,028,594 1,951,662 Depletion and Depreciation 811,686 864,746 Investments 220,652 198,995 Other 109,514 37,252 Total Liabilities 3,375,804 3,292,539 Net Deferred Tax Liability $ (1,219,511) $ (1,619,595) |
Schedule of Components of Income Tax Expense (Benefit) | The following table summarizes the current and deferred portions of income tax provision/(benefit): Year Ended December 31, 2023 2022 Current Tax Provision/(Benefit): Federal $ 224,976 $ 3,812 State 3,707 437 Total Current Provision 228,683 4,249 Deferred Tax Provision/(Benefit) (400,084) 1,068,275 Total Provision/(Benefit) $ (171,401) $ 1,072,524 |
Schedule of Effective Income Tax Rate Reconciliation | These amounts differ from the amounts computed by applying the statutory U.S. federal enacted income tax rate of 21% for 2023 and 2022 as summarized in the following reconciliation: Year Ended December 31, 2023 2022 Computed Federal Tax Provision (Benefit): $ (54,796) $ 1,059,585 Increase (Decrease) in Tax from: Allowable Depletion in Excess of Basis (61,358) (76,317) Prior Year Provision Adjustments (36,746) 109,438 Dividend Received Deduction (6,110) (18,286) State Income Tax Provision 3,707 437 Other (16,098) (2,333) Income Tax Provision/(Benefit) $ (171,401) $ 1,072,524 Effective Tax Rate 66 % 21 % |
NON-CONTROLLING INTERESTS AND_2
NON-CONTROLLING INTERESTS AND VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of Variable Interest Entities | The assets and liabilities in the table below include third party assets and liabilities only and exclude intercompany balances that eliminate in consolidation. December 31, 2023 Grand Woods TWS Total Assets: Cash $ 138,690 $ 154,653 $ 293,343 Accounts Receivable — 640 640 Other Investments (Land) 2,171,828 — 2,171,828 Total Current Assets 2,310,518 155,293 2,465,812 Other Property and Equipment, at cost — 471,219 471,219 Less – Accumulated Depreciation — (168,274) (168,274) Other Property and Equipment, Net — 302,945 302,945 Total Assets $ 2,310,518 $ 458,238 $ 2,768,756 Liabilities: Accounts Payable $ — $ 398 $ 398 Note Payable, Current Portion 142,136 — 142,136 Total Current Liabilities 142,136 398 142,534 Note Payable, Less Current Portion 1,158,736 — 1,158,736 Total Liabilities $ 1,300,872 $ 398 $ 1,301,270 December 31, 2022 Grand Woods TWS Total Assets: Cash $ 24,050 $ 281,654 $ 305,704 Accounts Receivable — 72,716 72,716 Other Investments (Land) 2,171,828 — 2,171,828 Total Current Assets 2,195,878 354,370 2,550,248 Other Property and Equipment, at cost — 419,044 419,044 Less – Accumulated Depreciation — (92,278) (92,278) Other Property and Equipment, Net — 326,766 326,766 Total Assets $ 2,195,878 $ 681,136 $ 2,877,014 Liabilities: Accounts Payable $ — $ 58,742 $ 58,742 Note Payable, Current Portion 136,637 — 136,637 Total Current Liabilities 136,637 58,742 195,379 Note Payable, Less Current Portion 1,300,872 — 1,300,872 Total Liabilities $ 1,437,509 $ 58,742 $ 1,496,251 |
NOTE PAYABLE (Tables)
NOTE PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-Term Debt | Below is a schedule of future principal payments that we are obligated to make on the outstanding Note at December 31, 2023: Years Ending December 31, Principal Payments 2024 142,136 2025 148,155 2026 1,010,581 $ 1,300,872 |
COSTS INCURRED IN OIL AND GAS_2
COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION, EXPLORATION AND DEVELOPMENT ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Oil and Gas, Present Activity | All the Company’s oil and gas operations are within the continental United States. In connection with its oil and gas operations, the following costs were incurred: Year Ended December 31, 2023 2022 Acquisition of Properties: Unproved $ 2,778,208 $ 963,822 Proved 1,895,869 4,020,523 Exploration Costs 1,941,369 853,455 Development Costs 1,768,303 4,524,443 Asset Retirement Obligation 22,482 468,600 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | At December 31, 2023 and 2022, the Company’s assets reported at fair value on a recurring basis are summarized as follows: December 31, 2023 Level 1 Inputs Level 2 Inputs Level 3 Inputs Financial Assets: Available-for-Sale Debt Securities – U.S. Treasury Bills Maturing within 1 year $ — $ 2,220,901 $ — Equity Securities: Domestic Equities 2,321,275 — — International Equities 130,005 — — Others 212,786 — — $ 2,664,066 $ 2,220,901 $ — December 31, 2022 Level 1 Inputs Level 2 Inputs Level 3 Inputs Financial Assets: Available-for-Sale Debt Securities – U.S. Treasury Bills Maturing within 1 year — 4,208,648 — Equity Securities: Domestic Equities $ 1,720,410 $ — $ — International Equities 448,405 — — Others 134,144 — — $ 2,302,959 $ 4,208,648 $ — |
OTHER INCOME_(LOSS), NET (Table
OTHER INCOME/(LOSS), NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Interest and Other Income | The following is an analysis of the components of Other Income/(Loss), Net: Year Ended December 31, 2023 2022 Net Realized and Unrealized Gain/(Loss) on Equity Securities $ 115,603 $ (1,635,240) Gain on Other Asset Sales — 49,823 Interest Income 440,244 98,231 Dividend Income 58,193 264,035 Income from Other Investments 363,738 108,034 Miscellaneous Income and Expenses (7,192) (70,044) Other Income/(Loss), Net $ 970,586 $ (1,185,161) |
UNAUDITED SUPPLEMENTAL FINANC_2
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Extractive Industries [Abstract] | |
Schedule of Proved Developed and Undeveloped Oil and Gas Reserve Quantities | Year Ended December 31, 2023 2022 Oil and Condensate (Bbls) Proved Developed Reserves: Beginning of Year 765,994 357,274 Revisions of Previous Estimates (170,142) 77,680 Extensions and Discoveries 74,183 74,737 Purchase of Reserves — 337,387 Production (104,138) (81,084) End of Year 565,897 765,994 Proved Developed Reserves: Beginning of Year 765,994 357,274 End of Year 565,897 765,994 Gas (MCF) Proved Developed Reserves: Beginning of Year 3,077,205 2,668,082 Revisions of Previous Estimates (608,967) 438,711 Extensions and Discoveries 472,154 170,312 Purchase of Reserves — 216,030 Production (504,915) (415,930) End of Year 2,435,477 3,077,205 Proved Developed Reserves: Beginning of Year 3,077,205 2,668,082 End of Year 2,435,477 3,077,205 |
Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure | Year Ended December 31, 2023 2022 Future Cash Inflows $ 46,985,495 $ 87,815,597 Future Production and Development Costs (24,793,198) (38,477,835) Future Asset Retirement Obligation (3,196,694) (3,719,370) Future Income Tax Expense (133,859) (5,529,912) Future Net Cash Flows 18,861,744 40,088,480 10% Annual Discount for Estimated Timing of Cash Flows (5,563,580) (16,182,590) Standardized Measure of Discounted Future Net Cash Flows $ 13,298,164 $ 23,905,890 |
Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows | Year Ended December 31, 2023 2022 Standardized Measure, Beginning of Year $ 23,905,890 $ 8,839,459 Sales and Transfers, Net of Production Costs (5,232,550) (6,832,951) Net Change in Sales and Transfer Prices, Net of Production Costs (12,900,661) 6,904,759 Extensions, Discoveries and Improved Recoveries, Net of Future Production and Development Costs 5,037,358 5,895,598 Revisions of Quantity Estimates (3,250,921) 3,893,178 Accretion of Discount 1,631,935 1,203,372 Purchases of Reserves in Place — 7,853,989 Net Change in Income Taxes 3,206,768 (2,562,318) Net Change in Asset Retirement Obligation (44,314) 468,599 Changes in Production Rates (Timing) and Other 944,659 (1,757,795) Standardized Measure, End of Year $ 13,298,164 $ 23,905,890 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Cumulative unrealized gains or losses on available-for-sale debt securities | $ 0 | $ 0 |
Uncertain tax positions | $ 0 | $ 0 |
Diluted shares outstanding (in shares) | 0 | 0 |
Inflation rate (as a percent) | 4.08% | |
Change in present value of property (as a percent) | 3.25% | |
Oil and Gas Sales | ||
Product Information [Line Items] | ||
Estimated accrued oil and gas sales | $ 977,894 | $ 1,142,304 |
Customer Concentration Risk | Revenue Benchmark | One Customer | ||
Product Information [Line Items] | ||
Concentration risk (as a percent) | 11% | |
Customer Concentration Risk | Revenue Benchmark | Two Customers | ||
Product Information [Line Items] | ||
Concentration risk (as a percent) | 35% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregated Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Revenue | $ 12,490,047 | $ 14,869,219 |
Oil Sales | ||
Product Information [Line Items] | ||
Revenue | 10,037,559 | 9,976,153 |
Natural Gas Sales | ||
Product Information [Line Items] | ||
Revenue | 2,155,986 | 4,342,725 |
Miscellaneous Oil and Gas Product Sales | ||
Product Information [Line Items] | ||
Revenue | $ 296,502 | $ 550,341 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant, and Equipment, Useful Lives (Details) | Dec. 31, 2023 |
Office furniture and fixtures (years) | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property useful lives (Year) | 5 years |
Office furniture and fixtures (years) | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property useful lives (Year) | 10 years |
Automotive equipment (years) | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property useful lives (Year) | 5 years |
Automotive equipment (years) | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property useful lives (Year) | 8 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Asset Retirement Obligation (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | |||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||
Beginning balance at January 1 | $ 2,809,257 | [1] | $ 2,359,826 | |
Liabilities incurred | 22,482 | 443,391 | ||
Liabilities settled (wells sold or plugged) | (33,015) | (79,405) | ||
Accretion of Asset Retirement Obligation | 72,885 | 60,236 | ||
Revision to estimate | (305,241) | 25,209 | ||
Ending balance at December 31 | [1] | $ 2,566,368 | $ 2,809,257 | |
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
COMMON STOCK - Changes in Commo
COMMON STOCK - Changes in Common Stock Issued and Outstanding (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Common Stock [Roll Forward] | |||
Balance, shares issued (in shares) | 184,735 | 184,735 | 184,735 |
Treasury stock (in shares) | 28,578 | 28,562 | 29,039 |
Common stock outstanding (in shares) | 156,157 | 156,173 | 155,696 |
Purchase of stock , Shares of Treasury Stock (in shares) | 461 | 16 | |
Purchase of stock, shares outstanding (in shares) | (461) | (16) | |
Par value (in dollars per share) | $ 0.50 | $ 0.50 | $ 0.50 |
Common stock authorized (in shares) | 200,000 | 200,000 | 200,000 |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Realized losses | $ (248,329) | $ (350,469) |
Unrealized gains (losses) | $ 363,932 | $ (1,284,771) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) (as a percent) | 66% | 21% |
INCOME TAXES - Deferred Taxes C
INCOME TAXES - Deferred Taxes Components (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Payables | $ 19,850 | $ 22,647 |
Net Leasehold Reserves | 162,128 | 84,641 |
Long-Lived Asset Impairment | 1,336,249 | 967,774 |
Deferred Geological and Geophysical Expense | 34,790 | 71,987 |
Unrealized Equity Securities and Capital Gains | 198,875 | 148,984 |
Asset Retirement Obligation | 404,401 | 376,911 |
Total Assets | 2,156,293 | 1,672,944 |
Liabilities: | ||
Receivables | 205,358 | 239,884 |
Intangible Drilling Costs | 2,028,594 | 1,951,662 |
Depletion and Depreciation | 811,686 | 864,746 |
Investments | 220,652 | 198,995 |
Other | 109,514 | 37,252 |
Total Liabilities | 3,375,804 | 3,292,539 |
Net Deferred Tax Liability | $ (1,219,511) | $ (1,619,595) |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense, Current and Deferred Portions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ 224,976 | $ 3,812 |
State | 3,707 | 437 |
Total Current Provision | 228,683 | 4,249 |
Deferred Tax Provision/(Benefit) | (400,084) | 1,068,275 |
Total Provision/(Benefit) | $ (171,401) | $ 1,072,524 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Computed Income Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Computed Federal Tax Provision (Benefit): | $ (54,796) | $ 1,059,585 |
Increase (Decrease) in Tax from: | ||
Allowable Depletion in Excess of Basis | (61,358) | (76,317) |
Prior Year Provision Adjustments | (36,746) | 109,438 |
Dividend Received Deduction | (6,110) | (18,286) |
State Income Tax Provision | 3,707 | 437 |
Other | (16,098) | (2,333) |
Total Provision/(Benefit) | $ (171,401) | $ 1,072,524 |
Effective Tax Rate | 66% | 21% |
INVESTMENTS AND RELATED COMMI_2
INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTEES (Details) | 12 Months Ended | ||||||||
Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) a | Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) a | Nov. 30, 2022 | Jun. 30, 2022 | May 31, 2022 | Dec. 31, 1992 a | ||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investments | [1] | $ 2,818,790 | $ 2,469,644 | ||||||
Other investments | [1] | 5,332,553 | 5,085,806 | ||||||
VCC | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investments | 357,259 | 357,259 | |||||||
VCC Venture Fund | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investments | 93,750 | 31,250 | |||||||
Committed capital | $ 250,000 | ||||||||
Contributed capital to committed capital ratio | 37.50% | ||||||||
Cortado II-A | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investment, ownership (as a percent) | 2% | ||||||||
Other investments | $ 500,000 | ||||||||
Committed capital | $ 1,000,000 | ||||||||
Contributed capital to committed capital ratio | 50% | ||||||||
QSN Office Park | Development Loan | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Loan guaranteed | $ 860,000 | ||||||||
QSN Office Park | Construction Loan | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Loan guaranteed | 585,000 | ||||||||
Stott's Mill | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investment, ownership (as a percent) | 50% | ||||||||
Other investments | 708,179 | 688,575 | |||||||
VCC Homebase | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investment, ownership (as a percent) | 16.30% | ||||||||
BHR2 | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investments | 301,442 | 300,754 | |||||||
Victorum BRH3 Investment | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investments | 302,161 | 301,261 | |||||||
Corporate Office from Broadway | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Rent expense | $ 44,716 | 41,196 | |||||||
Broadway Sixty-Eight Partnership | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership (as a percent) | 33% | ||||||||
Broadway 72 Partnership | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership (as a percent) | 40% | ||||||||
Equity method investments | $ 1,075,782 | 1,080,465 | |||||||
QSN Office Park | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership (as a percent) | 20% | ||||||||
Equity method investments | $ 307,325 | 284,249 | |||||||
Corporate Office from Broadway | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investments | $ 123,901 | 115,093 | |||||||
Bailey | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investment, ownership (as a percent) | 10% | ||||||||
Other investments | $ 77,377 | ||||||||
Cloudburst Solutions | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investment, ownership (as a percent) | 12.99% | ||||||||
Other investments | $ 1,596,007 | 1,596,007 | |||||||
Genlith | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investment, ownership (as a percent) | 5.15% | ||||||||
Other investments | $ 311,958 | 460,000 | |||||||
OKC Industrial Properties | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Other investment, ownership (as a percent) | 10% | ||||||||
Other investments | $ 67,482 | $ 82,482 | |||||||
Area of land (Acre) | a | 13 | 260 | |||||||
Grand Woods Development, LLC | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Area of land (Acre) | a | 26.56 | ||||||||
Land | $ 2,171,828 | ||||||||
Victorum BRH3 Investment | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership (as a percent) | 27.27% | ||||||||
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
NON-CONTROLLING INTERESTS AND_3
NON-CONTROLLING INTERESTS AND VARIABLE INTEREST ENTITIES - Narrative (Details) | 12 Months Ended | |||
Sep. 15, 2022 USD ($) | Dec. 31, 2023 USD ($) a shares | Dec. 31, 2022 USD ($) | ||
Variable Interest Entity [Line Items] | ||||
Equity Method Investments | [1] | $ 2,818,790 | $ 2,469,644 | |
Grand Woods | Conversion of Senior Note Payable into Class C Units | Reserve Petroleum | ||||
Variable Interest Entity [Line Items] | ||||
Credit enhancement fee converted | $ 60,000 | |||
Debt converted | 486,735 | |||
Grand Woods | Northeast Oklahoma City | ||||
Variable Interest Entity [Line Items] | ||||
Area of real estate (Acre) | a | 26.56 | |||
Grand Woods | ||||
Variable Interest Entity [Line Items] | ||||
Ownership by executives (as a percent) | 8.72% | |||
Grand Woods | ||||
Variable Interest Entity [Line Items] | ||||
Ownership (as a percent) | 80.37% | |||
Cash | 4,173 | |||
Other Investments (Land) | 2,171,828 | |||
Senior notes payable | 1,437,509 | |||
Credit enhancement fee | 60,000 | |||
Grand Woods | Financial Guarantee | ||||
Variable Interest Entity [Line Items] | ||||
Senior notes payable | $ 1,200,000 | |||
Grand Woods | Capital Unit, Class A | ||||
Variable Interest Entity [Line Items] | ||||
Investment owned (in shares) | shares | 47.08 | |||
Grand Woods | Capital Unit, Class C | ||||
Variable Interest Entity [Line Items] | ||||
Investment owned (in shares) | shares | 546,735 | |||
Dividends (as a percent) | 6% | |||
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
NON-CONTROLLING INTERESTS AND_4
NON-CONTROLLING INTERESTS AND VARIABLE INTEREST ENTITIES - Summary of Assets and Liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |||
Accounts Receivable | [1] | $ 2,366,663 | $ 2,318,183 |
Total Current Assets | [1] | 12,787,859 | 16,249,244 |
Other Property and Equipment, at cost | [1] | 820,965 | 758,256 |
Less – Accumulated Depreciation | [1] | 306,587 | 236,883 |
Other Property and Equipment, Net | [1] | 15,447,788 | 14,922,439 |
Total Assets | [1] | 36,386,990 | 38,727,133 |
Accounts Payable | [1] | 537,796 | 399,735 |
Note Payable, Current Portion | [1] | 142,136 | 136,637 |
Total Current Liabilities | [1] | 692,771 | 612,047 |
Note Payable, Less Current Portion | [1] | 1,158,736 | 1,300,872 |
Total Liabilities | [1] | 5,637,386 | 6,341,771 |
Variable Interest Entity, Primary Beneficiary | Total | |||
Variable Interest Entity [Line Items] | |||
Cash | 293,343 | 305,704 | |
Accounts Receivable | 640 | 72,716 | |
Other Investments (Land) | 2,171,828 | 2,171,828 | |
Total Current Assets | 2,465,812 | 2,550,248 | |
Other Property and Equipment, at cost | 471,219 | 419,044 | |
Less – Accumulated Depreciation | 168,274 | 92,278 | |
Other Property and Equipment, Net | 302,945 | 326,766 | |
Total Assets | 2,768,756 | 2,877,014 | |
Accounts Payable | 398 | 58,742 | |
Note Payable, Current Portion | 142,136 | 136,637 | |
Total Current Liabilities | 142,534 | 195,379 | |
Note Payable, Less Current Portion | 1,158,736 | 1,300,872 | |
Total Liabilities | 1,301,270 | 1,496,251 | |
Variable Interest Entity, Primary Beneficiary | Grand Woods | |||
Variable Interest Entity [Line Items] | |||
Cash | 138,690 | 24,050 | |
Accounts Receivable | 0 | 0 | |
Other Investments (Land) | 2,171,828 | 2,171,828 | |
Total Current Assets | 2,310,518 | 2,195,878 | |
Other Property and Equipment, at cost | 0 | 0 | |
Less – Accumulated Depreciation | 0 | 0 | |
Other Property and Equipment, Net | 0 | 0 | |
Total Assets | 2,310,518 | 2,195,878 | |
Accounts Payable | 0 | 0 | |
Note Payable, Current Portion | 142,136 | 136,637 | |
Total Current Liabilities | 142,136 | 136,637 | |
Note Payable, Less Current Portion | 1,158,736 | 1,300,872 | |
Total Liabilities | 1,300,872 | 1,437,509 | |
Variable Interest Entity, Primary Beneficiary | TWS | |||
Variable Interest Entity [Line Items] | |||
Cash | 154,653 | 281,654 | |
Accounts Receivable | 640 | 72,716 | |
Other Investments (Land) | 0 | 0 | |
Total Current Assets | 155,293 | 354,370 | |
Other Property and Equipment, at cost | 471,219 | 419,044 | |
Less – Accumulated Depreciation | 168,274 | 92,278 | |
Other Property and Equipment, Net | 302,945 | 326,766 | |
Total Assets | 458,238 | 681,136 | |
Accounts Payable | 398 | 58,742 | |
Note Payable, Current Portion | 0 | 0 | |
Total Current Liabilities | 398 | 58,742 | |
Note Payable, Less Current Portion | 0 | 0 | |
Total Liabilities | $ 398 | $ 58,742 | |
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
NOTE PAYABLE - Narrative (Detai
NOTE PAYABLE - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 15, 2022 | ||
Debt Instrument [Line Items] | ||||
Note Payable, Current Portion | [1] | $ 142,136 | $ 136,637 | |
Grand Woods | ||||
Debt Instrument [Line Items] | ||||
Senior notes payable | $ 1,437,509 | |||
Grand Woods | Financial Guarantee | ||||
Debt Instrument [Line Items] | ||||
Senior notes payable | $ 1,200,000 | |||
The Note | ||||
Debt Instrument [Line Items] | ||||
Interest rate (as a percent) | 4% | |||
Monthly payment | $ 16,043 | |||
Senior notes payable | 1,300,872 | |||
Note Payable, Current Portion | 142,136 | |||
Interest paid | $ 55,773 | $ 29,873 | ||
Pay down required (as a percent) | 90% | |||
Reserve account (as a percent) | 10% | |||
The Note | Grand Woods | Financial Guarantee | ||||
Debt Instrument [Line Items] | ||||
Senior notes payable | $ 1,200,000 | |||
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
NOTE PAYABLE - Schedule of Futu
NOTE PAYABLE - Schedule of Future Principal Payments (Details) - Notes Payable - The Note | Dec. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |
2024 | $ 142,136 |
2025 | 148,155 |
2026 | 1,010,581 |
Total | $ 1,300,872 |
COSTS INCURRED IN OIL AND GAS_3
COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION, EXPLORATION AND DEVELOPMENT ACTIVITIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Unproved | $ 2,778,208 | $ 963,822 |
Proved | 1,895,869 | 4,020,523 |
Exploration Costs | 1,941,369 | 853,455 |
Development Costs | 1,768,303 | 4,524,443 |
Asset Retirement Obligation | $ 22,482 | $ 468,600 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Available-for-Sale Debt Securities – U.S. | [1] | $ 2,220,901 | $ 4,208,648 |
Equity Securities | [1] | 2,664,066 | 2,302,959 |
Fair Value, Recurring | Level 1 Inputs | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Total assets measured at fair value | 2,664,066 | 2,302,959 | |
Fair Value, Recurring | Level 1 Inputs | Treasury Bills Maturing within 1 year | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Available-for-Sale Debt Securities – U.S. | 0 | 0 | |
Fair Value, Recurring | Level 1 Inputs | Domestic Equities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 2,321,275 | 1,720,410 | |
Fair Value, Recurring | Level 1 Inputs | International Equities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 130,005 | 448,405 | |
Fair Value, Recurring | Level 1 Inputs | Others | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 212,786 | 134,144 | |
Fair Value, Recurring | Level 2 Inputs | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Total assets measured at fair value | 2,220,901 | 4,208,648 | |
Fair Value, Recurring | Level 2 Inputs | Treasury Bills Maturing within 1 year | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Available-for-Sale Debt Securities – U.S. | 2,220,901 | 4,208,648 | |
Fair Value, Recurring | Level 2 Inputs | Domestic Equities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 0 | 0 | |
Fair Value, Recurring | Level 2 Inputs | International Equities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 0 | 0 | |
Fair Value, Recurring | Level 2 Inputs | Others | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 0 | 0 | |
Fair Value, Recurring | Level 3 Inputs | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Total assets measured at fair value | 0 | 0 | |
Fair Value, Recurring | Level 3 Inputs | Treasury Bills Maturing within 1 year | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Available-for-Sale Debt Securities – U.S. | 0 | 0 | |
Fair Value, Recurring | Level 3 Inputs | Domestic Equities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 0 | 0 | |
Fair Value, Recurring | Level 3 Inputs | International Equities | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | 0 | 0 | |
Fair Value, Recurring | Level 3 Inputs | Others | |||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Equity Securities | $ 0 | $ 0 | |
[1] At December 31, 2023 and 2022, includes approximately $2,768,756 and $2,877,014, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,301,270 and $1,496,251, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 7 – Non-Controlling Interests and Variable Interest Entities. |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Liabilities incurred | $ 22,482 | $ 443,391 |
Level 3 Inputs | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Liabilities incurred | 22,482 | 443,391 |
Impairment of oil and natural gas producing properties | $ 2,393,015 | $ 1,109,455 |
OTHER INCOME_(LOSS), NET (Detai
OTHER INCOME/(LOSS), NET (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | ||
Net (Gain)/Loss on Equity Securities | $ 115,603 | $ (1,635,240) |
Gain on Other Asset Sales | 0 | 49,823 |
Interest Income | 440,244 | 98,231 |
Dividend Income | 58,193 | 264,035 |
Income from Other Investments | 363,738 | 108,034 |
Miscellaneous Income and Expenses | (7,192) | (70,044) |
Other Income/(Loss), Net | $ 970,586 | $ (1,185,161) |
DEFINED CONTRIBUTION EMPLOYEE_2
DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Company matching contribution (as a percent) | 100% | |
Matching contribution, maximum percent of employee annual salary (as a percent) | 6% | |
Contribution expenses | $ 61,454 | $ 48,271 |
CERTAIN RELATIONSHIPS AND REL_2
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Lochbuie Limited Liability Company, LLTD | |||
Related Party Transaction [Line Items] | |||
Transaction amount | $ 107,981 | ||
Lochbuie Limited Liability Company, LLTD | Salaries Paid | |||
Related Party Transaction [Line Items] | |||
Transaction amount | $ 172,949 | $ 112,887 | |
Lochbuie Limited Liability Company, LLTD | Salary Reimbursement | |||
Related Party Transaction [Line Items] | |||
Transaction amount | 200,153 | ||
Mesquite | Salaries Paid | |||
Related Party Transaction [Line Items] | |||
Transaction amount | 81,533 | ||
Mesquite | Salary Reimbursement | |||
Related Party Transaction [Line Items] | |||
Transaction amount | $ 144,951 | ||
Mesquite | Working Interest Properties | |||
Related Party Transaction [Line Items] | |||
Transaction amount | $ 699,770 | ||
Mesquite | Non-Producing Leaseholds And Other Miscellaneous Assets | |||
Related Party Transaction [Line Items] | |||
Transaction amount | $ 289,739 |
UNAUDITED SUPPLEMENTAL FINANC_3
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION - Working Interest Reserve Quantity Information (Details) | 12 Months Ended | |
Dec. 31, 2023 bbl MMcf | Dec. 31, 2022 MMcf bbl | |
Oil and Condensate (Bbls) | ||
Proved Developed and Undeveloped Reserves [Roll Forward] | ||
Beginning of Year | bbl | 765,994 | 357,274 |
Revisions of Previous Estimates | bbl | (170,142) | 77,680 |
Extensions and Discoveries | bbl | 74,183 | 74,737 |
Purchase of Reserves | bbl | 0 | 337,387 |
Production | bbl | (104,138) | (81,084) |
End of Year | bbl | 565,897 | 765,994 |
Beginning of Year | bbl | 765,994 | 357,274 |
End of Year | bbl | 565,897 | 765,994 |
Gas (MCF) | ||
Proved Developed and Undeveloped Reserves [Roll Forward] | ||
Beginning of Year | MMcf | 3,077,205 | 2,668,082 |
Revisions of Previous Estimates | MMcf | (608,967) | 438,711 |
Extensions and Discoveries | MMcf | 472,154 | 170,312 |
Purchase of Reserves | MMcf | 0 | 216,030 |
Production | MMcf | (504,915) | (415,930) |
End of Year | MMcf | 2,435,477 | 3,077,205 |
Beginning of Year | MMcf | 3,077,205 | 2,668,082 |
End of Year | MMcf | 2,435,477 | 3,077,205 |
UNAUDITED SUPPLEMENTAL FINANC_4
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2023 MMcf bbl | Dec. 31, 2022 MMcf bbl | |
Oil and Condensate (Bbls) | ||
Reserve Quantities [Line Items] | ||
Share of production from net royalty interests | bbl | 29,986 | 26,322 |
Gas (MCF) | ||
Reserve Quantities [Line Items] | ||
Share of production from net royalty interests | MMcf | 263,849 | 295,242 |
UNAUDITED SUPPLEMENTAL FINANC_5
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION - Standardized Measure of Discounted Future Net Cash Flows (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Extractive Industries [Abstract] | |||
Future Cash Inflows | $ 46,985,495 | $ 87,815,597 | |
Future Production and Development Costs | (24,793,198) | (38,477,835) | |
Future Asset Retirement Obligation | (3,196,694) | (3,719,370) | |
Future Income Tax Expense | (133,859) | (5,529,912) | |
Future Net Cash Flows | 18,861,744 | 40,088,480 | |
10% Annual Discount for Estimated Timing of Cash Flows | (5,563,580) | (16,182,590) | |
Standardized Measure of Discounted Future Net Cash Flows | $ 13,298,164 | $ 23,905,890 | $ 8,839,459 |
UNAUDITED SUPPLEMENTAL FINANC_6
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION - Changes in Standardized Measure of Discounted Future Net Cash Flows From Proved Working Interest Reserve Quantities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Proved Developed and Undeveloped Reserve (Energy) [Roll Forward] | ||
Standardized Measure, Beginning of Year | $ 23,905,890 | $ 8,839,459 |
Sales and Transfers, Net of Production Costs | (5,232,550) | (6,832,951) |
Net Change in Sales and Transfer Prices, Net of Production Costs | (12,900,661) | 6,904,759 |
Extensions, Discoveries and Improved Recoveries, Net of Future Production and Development Costs | 5,037,358 | 5,895,598 |
Revisions of Quantity Estimates | (3,250,921) | 3,893,178 |
Accretion of Discount | 1,631,935 | 1,203,372 |
Purchases of Reserves in Place | 0 | 7,853,989 |
Net Change in Income Taxes | 3,206,768 | (2,562,318) |
Net Change in Asset Retirement Obligation | (44,314) | 468,599 |
Changes in Production Rates (Timing) and Other | 944,659 | (1,757,795) |
Standardized Measure, End of Year | $ 13,298,164 | $ 23,905,890 |