☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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41-1781991
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange On Which Registered
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Common Stock, $0.001 par value
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EPM
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NYSE American
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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☒
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Emerging growth company
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☐
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Term
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Definition
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Bbls
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Barrels of oil or natural gas liquids.
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BFPD
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Barrels of fluid per day.
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BOE
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Barrels of oil equivalent. BOE is calculated by converting 6 MCF of natural gas to 1 Bbl of oil which reflects energy equivalence and not price equivalence. Gas prices per MCF and NGL prices per barrel often differ significantly from the equivalent amount of oil.
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BOPD
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Barrels of oil per day.
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BTU
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British Thermal Unit: the standard unit of measure of energy equal to the amount of heat required to raise the temperature of one pound of water 1 degree Fahrenheit. One Bbl of crude is typically 5.8 MMBTU, and one standard MCF is typically one MMBTU.
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CO2
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Carbon dioxide; CO2 is a gas that can be found in naturally occurring reservoirs, is typically associated with ancient volcanoes, is a major byproduct from manufacturing and power production, and is also utilized in enhanced oil recovery through injection into an oil reservoir.
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Developed Reserves
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Reserves of any category that can be expected to be recovered (i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and (ii) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by a means not involving a well.
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EOR
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Enhanced Oil Recovery; projects that involve injection of heat, miscible or immiscible gas, or chemicals into oil reservoirs, typically following full primary and secondary waterflood recovery efforts, in order to gain incremental recovery of oil from the reservoir.
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Field
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An area consisting of a single reservoir or multiple reservoirs all grouped within or related to the same geologic structural features and/or stratigraphic features.*
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Farmout
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Sale or transfer of all or part of the operating rights from the working interest owner (the assignor or farm-out party), to an assignee (the farm-in party) who assumes all or some of the burden of development, in return for an interest in the property. The assignor may retain an overriding royalty or any other type of interest. For Federal tax purposes, a farm-out may be structured as a sale or lease, depending on the specific rights and carved out interests retained by the assignor.
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Gross Acres or Gross Wells
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The total acres or number of wells participated in, regardless of the amount of working interest owned.
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Horizontal Drilling
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Involves drilling horizontally out from a vertical well bore, thereby potentially increasing the area and reach of the well bore that is in contact with the reservoir.
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Hydraulic Fracturing
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Involves pumping a fluid with or without particulates into a formation at high pressure, thereby creating fractures in the rock and leaving the particulates in the fractures to ensure that the fractures remain open which potentially increases the ability of the reservoir to produce oil or gas.
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LOE
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Means lease operating expense(s), a current period expense incurred to operate a well.
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MBO
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One thousand barrels of oil.
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MBOE
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One thousand barrels of oil equivalent.
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MCF
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One thousand cubic feet of natural gas at standard conditions, being approximately sea level pressure and 60 degrees Fahrenheit temperature.
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MMBOE
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One million barrels of oil equivalent.
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MMBTU
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One million British Thermal Units.
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MMCE
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One million cubic feet of natural gas at standard temperature and pressure.
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Mineral Royalty Interest
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A royalty interest that is retained by the owner of the minerals underlying a lease. See "Royalty Interest".
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Net Acres or Net Wells
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The sum of the fractional working interests owned in gross acres or gross wells.
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NGL
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Natural gas liquids; the combination of ethane, propane, butane and natural gasoline that can be removed from natural gas through processing, typically through refrigeration plants that utilize low temperatures, or through plants that utilize compression, temperature reduction and expansion to a lower pressure.
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NYMEX
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New York Mercantile Exchange.
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OOIP
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Original Oil in Place; an estimate of the barrels originally contained in a reservoir before any production therefrom.
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Operator
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An oil and gas joint venture participant that manages the joint venture, pays venture costs and bills the venture's non-operators for their share of venture costs. The operator is also responsible to market all oil and gas production, except for those non-operators who take their production in-kind.
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Overriding Royalty Interest or ORRI
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A royalty interest that is created out of the operating or working interest. Unlike a royalty interest, an overriding royalty interest terminates with the operating interest from which it was created or carved out of. See "Royalty Interest."
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Permeability
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The measure of ease with which a fluid can move through a reservoir. The unit of measure is a darcy(d), or any metric derivation thereof, such as a millidarcy(md), where one darcy equals 1,000 millidarcys. Extremely low permeability of 10 millidarcys, or less, are often associated with source rocks, such as shale. Extraction of hydrocarbons from a source rock is more difficult than a sandstone reservoir where permeability typically ranges one to two darcys or more.
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Porosity
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The relative volume of the pore space (or open area) compared to the total bulk volume of the reservoir, stated in percent. Higher porosity rocks provide more storage space for hydrocarbon accumulations than lower porosity rocks in a given cubic volume of reservoir.
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Producing Reserves
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Any category of reserves that have been developed and production has been initiated.*
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Proved Developed Reserves
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Proved Reserves that can be expected to be recovered (i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and (ii) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by a means not involving a well.
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Proved Developed Nonproducing Reserves
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Proved Reserves that have been developed and no material amount of capital expenditures are required to bring on production, but production has not yet been initiated due to timing, markets, or lack of third party completed connection to a gas sales pipeline.*
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Proved Developed Producing Reserves ("PDP")
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Proved Reserves that have been developed and production has been initiated.*
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Proved Reserves
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Estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic, operating methods, and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.*
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Proved Undeveloped Reserves ("PUD")
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Proved Reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.*
(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.
(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.
(iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir or by other evidence using reliable technology establishing reasonable certainty.
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Present Value
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When used with respect to oil and gas reserves, present value means the estimated future net revenues computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs to be incurred in developing and producing the proved reserves) computed using a discount factor and assuming continuation of existing economic conditions.
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Productive Well
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A well that is producing oil or gas or that is capable of production.
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PV-10
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Means the present value, discounted at 10% per annum, of future net revenues (estimated future gross revenues less estimated future costs of production, development, and asset retirement costs) associated with reserves and is not necessarily the same as market value. PV-10 does not include estimated future income taxes. Unless otherwise noted, PV-10 is calculated using the pricing scheme as required by the Securities and Exchange Commission ("SEC"). PV-10 of proved reserves is calculated the same as the standardized measure of discounted future net cash flows, except that the standardized measure of discounted future net cash flows includes future estimated income taxes discounted at 10% per annum. See the definition of standardized measure of discounted future net cash flows.
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Royalty or Royalty Interest
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1) The mineral owner's share of oil or gas production (typically between 1/8 and 1/4), free of costs, but subject to severance taxes unless the lessor is a government. In certain circumstances, the royalty owner bears a proportionate share of the costs of making the natural gas saleable, such as processing, compression and gathering. 2) When a royalty interest is coterminous with and carved out of an operating or working interest, it is an "Overriding Royalty Interest," which also may generically be referred to as a Royalty.
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Shut-in Well
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A well that is not on production, but has not been plugged and abandoned. Wells may be shut-in in anticipation of future utility as a producing well, plugging and abandonment or other use.
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Standardized Measure
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The standardized measure of discounted future net cash flows. The Standardized Measure is an estimate of future net cash flows associated with proved reserves, discounted at 10% per annum. Future net cash flows are calculated by reducing future net revenues by estimated future income tax expenses and discounting at 10% per annum. The Standardized Measure and the PV-10 of proved reserves is calculated in the same exact fashion, except that the Standardized Measure includes future estimated income taxes discounted at 10% per annum. The Standardized Measure is in accordance with accounting standards generally accepted in the United States of America ("GAAP").
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Undeveloped Reserves
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Reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.*
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Working Interest
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The interest in the oil and gas in place which is burdened with the cost of development and operation of the property. Also called the operating interest.
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Workover
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A remedial operation on a completed well to restore, maintain or improve the well's production.
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•
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Proved oil equivalent reserves at June 30, 2020 were 10.2 MMBOE, a 13% increase from the previous year primarily due to the acquisition of the Hamilton Dome field in November 2019. The Standardized Measure for proved reserves decreased 51% to $62 million, as the acquisition of the Hamilton Dome field was offset by the decrease in the average first day of the month net oil price from $64.54 per barrel of oil and $23.83 per barrel of natural gas liquids at June 30, 2019 to $46.37 per barrel of oil and $9.00 per barrel of natural gas liquids at June 30, 2020. Our proved reserves consist of 80% crude oil and 20% natural gas liquids, 82% are classified as proved developed producing and 18% are proved undeveloped.
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•
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We recognized net income of $5.9 million, or $0.18 per diluted common share, our ninth consecutive year of reporting net income.
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•
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Returned to shareholders $10.7 million in cash dividends and $2.5 million in stock repurchases in fiscal 2020. The Company has paid out to shareholders more than $70 million in cash dividends since inception of the dividend program in December 2013.
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•
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Closed the acquisition of non-operating working interest in the Hamilton Dome field on November 1, 2019 which included total proved reserves of 1.47 MMBOE as of June 30, 2020 as estimated by DeGolyer & MacNaughton ("D&M"), an independent reservoir engineering firm.
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•
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Reported $12.4 million of cash flows from operations for the fiscal year ended June 30, 2020. We funded all operations, including $11.8 million of capital spending inclusive of our $9.3 million acquisition of our interest in the Hamilton Dome Field, from internal resources and remain debt free at June 30, 2020.
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•
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In order to mitigate the impact of the growing global COVID-19 pandemic on our employees, we continue to follow local stay-at-home orders and remotely work from home with minimal disruptions to our business operations.
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•
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We entered into NYMEX WTI oil swaps covering approximately 42,000 barrels per month for the period of April 2020 through December 2020 at a fixed swap price of $32.00 per barrel, recording a loss of $1.4 million at June 30, 2020. Of this amount, $1.9 million were non-cash, unrealized mark-to-market losses as commodity prices improved from those existing at fiscal year-end, offset in part by $0.5 million in realized gains during the fiscal fourth quarter.
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•
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We completed remaining capital expenditures for the six-well water curtain program and related infrastructure preceding the planned Delhi Phase V development, which was delayed by the operator until our fiscal fourth quarter of 2021.
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•
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In July 2020, Denbury Resources announced that it had entered into a restructuring support agreement with certain of its debt holders and filed a pre-packaged voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in Texas. Denbury Resources is seeking to eliminate $2.1 billion of debt. Denbury subsequently announced on September 3, 2020 that its plan to eliminate $2.1 billion of its bond debt has been confirmed by the court which will substantially reduce its debt and strengthen its balance sheet.
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Reserve Category
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Oil
(MBbls)
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NGLs
(MBbls)
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Total Reserves
(MBOE)*
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PROVED
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Developed Producing (79% of Proved)
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5,105
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1,777
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6,882
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Undeveloped (21% of Proved)
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1,648
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216
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|
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1,864
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TOTAL PROVED
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6,753
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|
|
1,993
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|
|
8,746
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Product Mix
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77
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%
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23
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%
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100
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%
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Reserve Category
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Oil
(MBbls)
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NGLs
(MBbls)
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Total Reserves
(MBOE)*
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|||
PROVED
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Developed Producing (100% of Proved)
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1,473
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|
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—
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1,473
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Undeveloped (0% of Proved)
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—
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|
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—
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—
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TOTAL PROVED
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1,473
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|
|
—
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|
|
1,473
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Product Mix
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100
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%
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—
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%
|
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100
|
%
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Reserve Category
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Oil
(MBbls)
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NGLs
(MBbls)
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Total Reserves
(MBOE)*
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|||
PROVED
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|
|
|
|
|
|||
Developed Producing (82% of Proved)
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6,578
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|
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1,777
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|
|
8,355
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Undeveloped (18% of Proved)
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1,648
|
|
|
216
|
|
|
1,864
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TOTAL PROVED
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8,226
|
|
|
1,993
|
|
|
10,219
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Product Mix
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80
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%
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20
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%
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100
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%
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Delhi Field Proved
Total
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Proved reserves, MBOE
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MBOE
|
|
June 30, 2019
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8,981
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|
Purchases
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—
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Production
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(647
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)
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Revisions (a)
|
412
|
|
Sales of minerals in place
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—
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Improved recovery, extensions and discoveries
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—
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|
June 30, 2020
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8,746
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|
|
Hamilton Dome Field Proved
Total
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Proved reserves, MBOE
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MBOE
|
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June 30, 2019
|
—
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Purchases
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3,427
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Production
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(98
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)
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Revisions (a)
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(1,856
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)
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Sales of minerals in place
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—
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Improved recovery, extensions and discoveries
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—
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|
June 30, 2020
|
1,473
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|
|
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Oil
(MBbls)
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|
NGLs
(MBbls)
|
|
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Total Reserves
(MBOE)
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|||
June 30, 2019
|
|
1,342
|
|
|
241
|
|
|
|
|
1,583
|
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Revisions to previous estimates
|
|
306
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|
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(25
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)
|
|
|
|
281
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Conversion to proved developed reserves
|
|
—
|
|
|
—
|
|
|
|
|
—
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|
June 30, 2020
|
|
1,648
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|
|
216
|
|
|
|
|
1,864
|
|
|
Year Ended
June 30, 2020 |
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Year Ended
June 30, 2019 |
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Year Ended
June 30, 2018 |
||||||||||||||||||
Product
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Volume
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Price
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Volume
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Price
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Volume
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Price
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||||||||||||
Crude oil (Bbls)
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638,464
|
|
|
$
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44.76
|
|
|
626,879
|
|
|
$
|
65.05
|
|
|
651,931
|
|
|
$
|
58.52
|
|
|||
Natural gas liquids (Bbls)
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106,159
|
|
|
$
|
9.59
|
|
|
112,013
|
|
|
$
|
21.87
|
|
|
93,366
|
|
|
$
|
28.06
|
|
|||
Natural gas (Mcf)
|
1,087
|
|
|
$
|
1.90
|
|
|
459
|
|
|
$
|
2.64
|
|
|
—
|
|
|
$
|
—
|
|
|||
Average price per BOE*
|
744,804
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|
|
$
|
39.74
|
|
|
738,968
|
|
|
$
|
58.50
|
|
|
745,297
|
|
|
$
|
54.71
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Production costs
|
Amount
|
|
per BOE
|
|
Amount
|
|
per BOE
|
|
Amount
|
|
per BOE
|
||||||||||||
Production costs, excluding ad valorem and production taxes
|
$
|
12,966,923
|
|
|
$
|
17.41
|
|
|
$
|
14,027,461
|
|
|
$
|
18.98
|
|
|
$
|
11,497,759
|
|
|
$
|
15.43
|
|
Total production costs, including ad valorem and production taxes
|
$
|
13,505,502
|
|
|
$
|
18.13
|
|
|
$
|
14,266,784
|
|
|
$
|
19.31
|
|
|
$
|
11,685,817
|
|
|
$
|
15.68
|
|
|
Company Operated
|
|
Non-Operated
|
|
Total
|
||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
Crude oil
|
—
|
|
|
—
|
|
|
315
|
|
|
74.5
|
|
|
315
|
|
|
74.5
|
|
Natural gas
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
—
|
|
|
—
|
|
|
315
|
|
|
74.5
|
|
|
315
|
|
|
74.5
|
|
Field (1)
|
Developed Acreage
|
|
Undeveloped Acreage
|
|
Total
|
||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
Delhi Field, Louisiana (2)
|
9,126
|
|
|
2,180
|
|
|
4,510
|
|
|
1,077
|
|
|
13,636
|
|
|
3,257
|
|
Hamilton Dome Field, Wyoming
|
5,908
|
|
|
1,389
|
|
|
—
|
|
|
—
|
|
|
5,908
|
|
|
1,389
|
|
Total
|
15,034
|
|
|
3,569
|
|
|
4,510
|
|
|
1,077
|
|
|
19,544
|
|
|
4,646
|
|
|
Year Ended June 30,
|
||||
Customer
|
2020
|
|
2019
|
||
Plains Marketing L.P. (Delhi field oil)
|
87
|
%
|
|
94
|
%
|
Merit Energy Company (Hamilton Dome field oil)
|
10
|
%
|
|
—
|
%
|
Third Coast Midstream (Delhi field NGLs)
|
3
|
%
|
|
6
|
%
|
All others
|
—
|
%
|
|
—
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
•
|
changes in global supply and demand for oil and natural gas, which has recently been negatively affected by concerns about the impact of COVID-19;
|
•
|
worldwide and regional economic conditions impacting the global supply and demand for oil and gas;
|
•
|
actions of OPEC or other groups of oil producing nations;
|
•
|
the price and quantity of imports of foreign oil and natural gas;
|
•
|
political conditions in or affecting other oil-producing and natural gas-producing countries;
|
•
|
the level of global oil and natural gas exploration and production;
|
•
|
the level of global oil and natural gas inventories;
|
•
|
localized supply and demand fundamentals of regional, domestic and international transportation availability;
|
•
|
weather conditions and natural disasters;
|
•
|
domestic and foreign governmental regulations;
|
•
|
speculation as to the future price of oil and the speculative trading of oil and natural gas futures contracts;
|
•
|
price and availability of competitors' supplies of oil and natural gas;
|
•
|
technological advances affecting energy consumption; and
|
•
|
the price and availability of alternative fuels.
|
•
|
unexpected drilling conditions;
|
•
|
pressure fluctuations or irregularities in reservoir formations;
|
•
|
equipment failures or accidents;
|
•
|
regulatory climate;
|
•
|
inability to obtain or maintain leases on economic terms, where applicable;
|
•
|
adverse weather conditions;
|
•
|
compliance with governmental requirements; and
|
•
|
shortages or delays in the availability of drilling rigs or crews and the delivery of equipment.
|
•
|
production is less than the volume covered by the derivative instruments;
|
•
|
the counterparty to the derivative instrument defaults on its contract obligations; or
|
•
|
there is a change in the expected differential between the underlying price in the derivative instrument and actual price received.
|
•
|
our ability to identify and acquire new development projects;
|
•
|
our ability to develop new and existing properties;
|
•
|
our ability to continue to retain and attract skilled personnel;
|
•
|
the results of our development program and acquisition efforts;
|
•
|
the success of our technologies;
|
•
|
hydrocarbon prices;
|
•
|
drilling, completion, and equipment prices;
|
•
|
our ability to successfully integrate new properties;
|
•
|
our access to capital; and
|
•
|
the Delhi field operator's ability to: (i) deliver sufficient quantities of CO2 from its reserves in the Jackson Dome, (ii) secure all of the development capital necessary to fund its and our cost interests, and further develop the Delhi field, such as advancement of Phase V development in the undeveloped eastern part of the field, (iii) successfully manage technical, operating, environmental, strategic and logistical development and operating risks, and (iv) maintain its own financial stability.
|
•
|
recoverable reserves;
|
•
|
future oil and natural gas prices and their appropriate differentials;
|
•
|
development and operating costs;
|
•
|
potential for future drilling and production;
|
•
|
validity of the seller's title to properties, which may be less than expected at closing; and
|
•
|
potential environmental issues, litigation and other liabilities.
|
•
|
our lean management team's capacity could be challenged by the demands of evaluating, negotiating, integrating significant acquisitions, and strategic transactions in concert with the Company's ongoing business demands;
|
•
|
the challenge and cost of integrating acquired operations, information management, other technology systems, and business cultures with those of our operations while carrying on our ongoing business;
|
•
|
difficulty associated with coordinating geographically separate organizations;
|
•
|
an inability to secure, on acceptable terms, sufficient financing that may be required in connection with expanded operations and unknown liabilities; and
|
•
|
the challenge of attracting and retaining personnel associated with acquired operations.
|
•
|
actual or anticipated variations in our results of operations;
|
•
|
naked short selling of our common stock and stock price manipulation;
|
•
|
changes or fluctuations in the commodity prices of crude oil and natural gas;
|
•
|
general conditions and trends in the crude oil and natural gas industry;
|
•
|
redemption demands on institutional funds that hold our stock; and
|
•
|
general economic, political and market conditions.
|
•
|
exercising voting, redemption and conversion rights to the detriment of the holders of common stock;
|
•
|
receiving preferences over the holders of common stock regarding our surplus funds in the event of our dissolution, liquidation, or the payment of dividends to preferred stockholders;
|
•
|
delaying, deferring, or preventing a change in control of our company; and
|
•
|
discouraging bids for our common stock.
|
2020:
|
High
|
|
Low
|
||||
Fourth quarter ended June 30, 2020
|
$
|
3.20
|
|
|
$
|
2.23
|
|
Third quarter ended March 31, 2020
|
$
|
5.62
|
|
|
$
|
2.16
|
|
Second quarter ended December 31, 2019
|
$
|
5.86
|
|
|
$
|
5.08
|
|
First quarter ended September 30, 2019
|
$
|
7.05
|
|
|
$
|
5.55
|
|
2019:
|
High
|
|
Low
|
||||
Fourth quarter ended June 30, 2019
|
$
|
7.40
|
|
|
$
|
5.99
|
|
Third quarter ended March 31, 2019
|
$
|
8.11
|
|
|
$
|
6.44
|
|
Second quarter ended December 31, 2018
|
$
|
12.83
|
|
|
$
|
6.17
|
|
First quarter ended September 30, 2018
|
$
|
12.00
|
|
|
$
|
9.60
|
|
|
Years Ended June 30,
|
||
|
2020
|
|
2019
|
Fourth quarter ended June 30,
|
$0.025
|
|
$0.100
|
Third quarter ended March 31,
|
$0.100
|
|
$0.100
|
Second quarter ended December 31,
|
$0.100
|
|
$0.100
|
First quarter ended September 30,
|
$0.100
|
|
$0.100
|
Plan category
|
Number of
securities to
be issued
upon exercise
of outstanding
options,
warrants and
rights
(a)
|
|
|
|
Weighted-average
exercise
price of
outstanding
Options, warrants
and rights
(b)
|
|
Number of securities
remaining
available for future
issuance under
equity compensation
plans (excluding
securities reflected
in column (a))(1)
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
|
||||
Outstanding options
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
Outstanding contingent rights to shares
|
200,000
|
|
|
(1)
|
|
—
|
|
|
|
||
Total
|
200,000
|
|
|
|
|
$
|
—
|
|
|
390,489
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
Total
|
200,000
|
|
|
|
|
$
|
—
|
|
|
390,489
|
|
|
June 30,
|
||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
||||||||||
Income Statement Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
29,599,296
|
|
|
$
|
43,229,621
|
|
|
$
|
40,773,527
|
|
|
$
|
34,253,681
|
|
|
$
|
26,349,502
|
|
Cost of revenues
|
13,505,502
|
|
|
14,266,784
|
|
|
11,685,817
|
|
|
10,604,594
|
|
|
9,133,111
|
|
|||||
Depreciation, depletion and amortization
|
5,761,498
|
|
|
6,253,083
|
|
|
6,102,288
|
|
|
5,779,069
|
|
|
5,214,174
|
|
|||||
General and administrative expenses
|
5,259,659
|
|
|
5,072,931
|
|
|
6,773,781
|
|
|
4,985,408
|
|
|
9,079,597
|
|
|||||
Net loss on derivative contracts
|
1,383,204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|
4,488
|
|
|
1,257,433
|
|
|||||
Income from operations
|
3,689,433
|
|
|
17,636,823
|
|
|
16,211,641
|
|
|
12,880,122
|
|
|
1,665,187
|
|
|||||
Other income (expense)
|
66,643
|
|
|
1,222,604
|
|
|
(25,126
|
)
|
|
4,855
|
|
|
32,565,954
|
|
|||||
Income tax provision (benefit)
|
(2,180,996
|
)
|
|
3,482,361
|
|
|
(3,431,969
|
)
|
|
4,840,664
|
|
|
9,570,779
|
|
|||||
Net income attributable to the Company
|
5,937,072
|
|
|
15,377,066
|
|
|
19,618,484
|
|
|
8,044,313
|
|
|
24,660,362
|
|
|||||
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
250,990
|
|
|
674,302
|
|
|||||
Deemed dividend on preferred shares called for redemption
|
—
|
|
|
—
|
|
|
—
|
|
|
1,002,440
|
|
|
—
|
|
|||||
Net income attributable to common shareholders
|
$
|
5,937,072
|
|
|
$
|
15,377,066
|
|
|
$
|
19,618,484
|
|
|
$
|
6,790,883
|
|
|
$
|
23,986,060
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.18
|
|
|
$
|
0.46
|
|
|
$
|
0.59
|
|
|
$
|
0.21
|
|
|
$
|
0.73
|
|
Diluted
|
$
|
0.18
|
|
|
$
|
0.46
|
|
|
$
|
0.59
|
|
|
$
|
0.21
|
|
|
$
|
0.73
|
|
|
June 30, 2020
|
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2016
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total current assets
|
$
|
25,316,698
|
|
|
$
|
35,178,927
|
|
|
$
|
32,147,556
|
|
|
$
|
26,142,527
|
|
|
$
|
37,086,450
|
|
Total assets
|
92,138,236
|
|
|
95,761,844
|
|
|
93,662,544
|
|
|
88,268,668
|
|
|
97,451,051
|
|
|||||
Total current liabilities
|
4,278,859
|
|
|
2,752,694
|
|
|
4,430,214
|
|
|
2,718,894
|
|
|
8,528,908
|
|
|||||
Total liabilities
|
18,013,754
|
|
|
15,635,986
|
|
|
16,373,065
|
|
|
19,798,813
|
|
|
21,129,901
|
|
|||||
Total stockholders' equity
|
74,124,482
|
|
|
80,125,858
|
|
|
77,289,479
|
|
|
68,469,855
|
|
|
76,321,150
|
|
|||||
Number of common shares outstanding
|
32,956,469
|
|
|
33,183,730
|
|
|
33,080,543
|
|
|
33,087,308
|
|
|
32,907,863
|
|
|||||
Working capital
|
21,037,839
|
|
|
32,426,233
|
|
|
27,717,342
|
|
|
23,423,633
|
|
|
28,557,542
|
|
|||||
Cash dividends to common shareholders
|
10,740,754
|
|
|
13,272,058
|
|
|
11,594,541
|
|
|
8,432,435
|
|
|
6,565,823
|
|
•
|
Proved oil equivalent reserves at June 30, 2020 were 10.2 MMBOE, a 13% increase from the previous year primarily due to the acquisition of the Hamilton Dome field in November 2019. The Standardized Measure for proved reserves decreased 51% to $62 million, as the acquisition of the Hamilton Dome field was offset by the decrease in the average first day of the month net oil price from $64.54 per barrel of oil and $23.83 per barrel of natural gas liquids at June 30, 2019 to $46.37 per barrel of oil and $9.00 per barrel of natural gas liquids at June 30, 2020. Our proved reserves consist of 80% crude oil and 20% natural gas liquids, 82% are classified as proved developed producing and 18% are proved undeveloped.
|
•
|
We recognized net income of $5.9 million, or $0.18 per diluted common share, our ninth consecutive year of reporting net income.
|
•
|
Returned to shareholders $10.7 million in cash dividends and invested $2.5 million in stock repurchases in fiscal 2020. The Company has paid out to shareholders more than $70 million in cash dividends since inception of the dividend program in December 2013.
|
•
|
Closed the acquisition of non-operated working interest in Hamilton Dome field on November 1, 2019 which included total proved reserves of 1.47 MMBOE as of June 30, 2020 as estimated by D&M, an independent reservoir engineering firm.
|
•
|
Reported $12.4 million of cash flows from operations for the fiscal year ended June 30, 2020. We funded all operations, including $11.8 million of capital spending inclusive of our $9.3 million acquisition of our interest in the Hamilton Dome Field, from internal resources and remain debt free at June 30, 2020.
|
•
|
In order to mitigate the impact of the growing global COVID-19 pandemic on our employees, we continue to follow local stay-at-home orders and remotely work from home with minimal disruptions to our business operations.
|
•
|
We entered into NYMEX WTI oil swaps covering approximately 42,000 barrels per month for the period of April 2020 through December 2020 at a fixed swap price of $32.00 per barrel, recording a loss of $1.4 million at June 30, 2020. Of this amount, $1.9 million were non-cash, unrealized mark-to-market losses as commodity prices improved from those existing at fiscal year-end, offset in part by $0.5 million in realized gains during the fiscal fourth quarter.
|
•
|
We completed remaining capital expenditures for the six-well water curtain program and related infrastructure preceding the planned Delhi Phase V development, which was delayed by the operator until the fourth quarter of 2021.
|
•
|
In July 2020, Denbury Resources announced that it had entered into a restructuring support agreement with certain of its debt holders and filed a pre-packaged voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in Texas. Denbury Resources is seeking to eliminate $2.1 billion of debt. Denbury subsequently announced on September 3, 2020 that its plan to eliminate $2.1 billion of its bond debt has been confirmed by the court which will substantially reduce its debt and strengthen its balance sheet.
|
•
|
Proved oil equivalent reserves at June 30, 2020 were 10.2 MMBOE, a 13% increase from the previous year primarily due to the acquisition of the Hamilton Dome field in November 2019. The Standardized Measure for proved reserves decreased 51% to $62 million, reflecting the decrease in the average first day of the month net oil price from $64.54 per barrel of oil and $23.83 per barrel of natural gas liquids at June 30, 2019 to $47.37 per barrel of oil and $9.00 per barrel of natural gas liquids at June 30, 2020. Price decreases are partially offset by the acquisition of the Hamilton Dome field in November 2019. Our proved reserves are 80% crude oil and 20% natural gas liquids, and of these proved reserves, 82% are classified as proved developed and producing and 18% are proved undeveloped.
|
|
June 30,
|
|
|
||||||||
Increases (Decreases) in Cash:
|
2020
|
|
2019
|
|
Difference
|
||||||
|
(In Millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
12.4
|
|
|
$
|
24.1
|
|
|
$
|
(11.7
|
)
|
Net cash used in investing activities
|
(11.1
|
)
|
|
(6.8
|
)
|
|
(4.3
|
)
|
|||
Net cash used in financing activities
|
(13.2
|
)
|
|
(13.4
|
)
|
|
0.2
|
|
|||
Change in cash, cash equivalents and restricted cash
|
$
|
(11.9
|
)
|
|
$
|
3.9
|
|
|
$
|
(15.8
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More than 5 Years
|
||||||||||
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
AFE purchase commitments in connection with joint interest agreements
|
$
|
201,104
|
|
|
$
|
201,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease
|
139,268
|
|
|
54,290
|
|
|
84,978
|
|
|
—
|
|
|
—
|
|
|||||
Other Obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset retirement obligations
|
2,588,894
|
|
|
—
|
|
|
65,163
|
|
|
43,442
|
|
|
2,480,289
|
|
|||||
Total Obligations
|
$
|
2,929,266
|
|
|
$
|
255,394
|
|
|
$
|
150,141
|
|
|
$
|
43,442
|
|
|
$
|
2,480,289
|
|
|
Years Ended June 30,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
Variance
|
|
Variance %
|
|||||||
Oil and gas production
|
|
|
|
|
|
|
|
|||||||
Crude oil revenues
|
$
|
28,578,879
|
|
|
$
|
40,779,052
|
|
|
$
|
(12,200,173
|
)
|
|
(29.9
|
)%
|
NGL revenues
|
1,018,349
|
|
|
2,449,359
|
|
|
(1,431,010
|
)
|
|
(58.4
|
)%
|
|||
Natural gas revenues
|
2,068
|
|
|
1,210
|
|
|
858
|
|
|
70.9
|
%
|
|||
Total revenues
|
$
|
29,599,296
|
|
|
$
|
43,229,621
|
|
|
$
|
(13,630,325
|
)
|
|
(31.5
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Crude oil volumes (Bbl)
|
638,464
|
|
|
626,879
|
|
|
11,585
|
|
|
1.8
|
%
|
|||
NGL volumes (Bbl)
|
106,159
|
|
|
112,013
|
|
|
(5,854
|
)
|
|
(5.2
|
)%
|
|||
Natural gas volumes (Mcf)
|
1,087
|
|
|
459
|
|
|
628
|
|
|
136.8
|
%
|
|||
Equivalent volumes (BOE)
|
744,804
|
|
|
738,968
|
|
|
5,836
|
|
|
0.8
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Crude oil (BOPD, net)
|
1,744
|
|
|
1,717
|
|
|
27
|
|
|
1.6
|
%
|
|||
NGLs (BOEPD, net)
|
290
|
|
|
307
|
|
|
(17
|
)
|
|
(5.5
|
)%
|
|||
Natural gas (BOEPD, net)
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
n.m
|
|
|||
Equivalent volumes (BOEPD, net)
|
2,034
|
|
|
2,025
|
|
|
9
|
|
|
0.4
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Crude oil price per Bbl
|
$
|
44.76
|
|
|
$
|
65.05
|
|
|
$
|
(20.29
|
)
|
|
(31.2
|
)%
|
NGL price per Bbl
|
9.59
|
|
|
21.87
|
|
|
(12.28
|
)
|
|
(56.1
|
)%
|
|||
Natural gas price per Mcf
|
1.90
|
|
|
2.64
|
|
|
(0.74
|
)
|
|
(28.0
|
)%
|
|||
Equivalent price per BOE
|
$
|
39.74
|
|
|
$
|
58.50
|
|
|
$
|
(18.76
|
)
|
|
(32.1
|
)%
|
|
Years Ended June 30,
|
|
|
|
|
||||||||
|
2020
|
|
2019
|
|
Variance
|
|
Variance %
|
||||||
Oil Derivative Contracts
|
|
|
|
|
|
|
|
||||||
Realized (gain) loss on derivatives, net
|
$
|
(528,139
|
)
|
|
$
|
—
|
|
|
$
|
(528,139
|
)
|
|
n.m.
|
Unrealized (gain) loss on derivatives
|
1,911,343
|
|
|
—
|
|
|
1,911,343
|
|
|
n.m.
|
|||
Loss on derivatives
|
$
|
1,383,204
|
|
|
$
|
—
|
|
|
$
|
1,383,204
|
|
|
n.m.
|
|
|
|
|
|
|
|
|
||||||
Crude oil price per Bbl (including impact of realized derivatives)
|
$
|
45.59
|
|
|
|
|
|
|
|
|
Years Ended June 30,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
Variance
|
|
Variance %
|
|||||||
CO2 costs (a)
|
$
|
3,501,507
|
|
|
$
|
6,674,905
|
|
|
$
|
(3,173,398
|
)
|
|
(47.5
|
)%
|
Other production costs
|
10,003,995
|
|
|
7,591,879
|
|
|
2,412,116
|
|
|
31.8
|
%
|
|||
Total production costs
|
$
|
13,505,502
|
|
|
$
|
14,266,784
|
|
|
$
|
(761,282
|
)
|
|
(5.3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
CO2 costs per BOE
|
$
|
4.70
|
|
|
$
|
9.03
|
|
|
$
|
(4.33
|
)
|
|
(48.0
|
)%
|
All other production costs per BOE
|
13.43
|
|
|
10.28
|
|
|
3.15
|
|
|
30.6
|
%
|
|||
Production costs per BOE
|
$
|
18.13
|
|
|
$
|
19.31
|
|
|
$
|
(1.18
|
)
|
|
(6.1
|
)%
|
|
Years Ended June 30,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
Variance
|
|
Variance %
|
|||||||
CO2 costs per mcf
|
$
|
0.77
|
|
|
$
|
0.90
|
|
|
$
|
(0.13
|
)
|
|
(14.4
|
)%
|
CO2 volumes (MMcf per day, gross)
|
51.9
|
|
|
85.2
|
|
|
(33.3
|
)
|
|
(39.1
|
)%
|
|
Years Ended June 30,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
Variance
|
|
Variance %
|
|||||||
DD&A of proved oil and gas properties
|
$
|
5,592,651
|
|
|
$
|
6,122,515
|
|
|
$
|
(529,864
|
)
|
|
(8.7
|
)%
|
Depreciation of other property and equipment
|
8,779
|
|
|
15,498
|
|
|
(6,719
|
)
|
|
(43.4
|
)%
|
|||
Amortization of intangibles
|
13,564
|
|
|
13,564
|
|
|
—
|
|
|
—
|
%
|
|||
Accretion of asset retirement obligations
|
146,504
|
|
|
101,506
|
|
|
44,998
|
|
|
44.3
|
%
|
|||
Total DD&A
|
$
|
5,761,498
|
|
|
$
|
6,253,083
|
|
|
$
|
(491,585
|
)
|
|
(7.9
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Oil and gas DD&A per BOE
|
$
|
7.51
|
|
|
$
|
8.29
|
|
|
$
|
(0.78
|
)
|
|
(9.4
|
)%
|
|
Years Ended June 30,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
Variance
|
|
Variance %
|
|||||||
Enduro transaction breakup fee
|
—
|
|
|
1,100,000
|
|
|
(1,100,000
|
)
|
|
(100.0
|
)%
|
|||
Interest and other income
|
177,418
|
|
|
239,150
|
|
|
(61,732
|
)
|
|
(25.8
|
)%
|
|||
Interest expense
|
(110,775
|
)
|
|
(116,546
|
)
|
|
5,771
|
|
|
(5.0
|
)%
|
|||
Total other income, net
|
$
|
66,643
|
|
|
$
|
1,222,604
|
|
|
$
|
(1,155,961
|
)
|
|
(94.5
|
)%
|
|
Years Ended June 30,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
Variance
|
|
Variance %
|
|||||||
Income before income taxes
|
3,756,076
|
|
|
18,859,427
|
|
|
(15,103,351
|
)
|
|
(80.1
|
)%
|
|||
Income tax provision (benefit)
|
(2,180,996
|
)
|
|
3,482,361
|
|
|
(5,663,357
|
)
|
|
(162.6
|
)%
|
|||
Net income available to common stockholders
|
$
|
5,937,072
|
|
|
$
|
15,377,066
|
|
|
$
|
(9,439,994
|
)
|
|
(61.4
|
)%
|
Income tax provision (benefit) as a percentage of income before income taxes
|
(58
|
)%
|
|
18
|
%
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19,662,528
|
|
|
$
|
31,552,533
|
|
Receivables from oil and gas sales
|
1,919,213
|
|
|
$
|
3,168,116
|
|
|
Receivables for federal and state income tax refunds
|
3,243,271
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
491,686
|
|
|
458,278
|
|
||
Total current assets
|
25,316,698
|
|
|
35,178,927
|
|
||
Property and equipment, net of depreciation, depletion, and amortization
|
|
|
|
||||
Oil and natural gas properties—full-cost method of accounting, of which none were excluded from amortization
|
66,512,281
|
|
|
60,346,466
|
|
||
Other property and equipment, net
|
17,639
|
|
|
26,418
|
|
||
Total property and equipment, net
|
66,529,920
|
|
|
60,372,884
|
|
||
Other assets, net
|
291,618
|
|
|
210,033
|
|
||
Total assets
|
$
|
92,138,236
|
|
|
$
|
95,761,844
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
1,471,679
|
|
|
$
|
2,084,140
|
|
Accrued liabilities and other
|
716,648
|
|
|
537,755
|
|
||
Derivative contract liabilities
|
1,911,343
|
|
|
—
|
|
||
State and federal taxes payable
|
179,189
|
|
|
130,799
|
|
||
Total current liabilities
|
4,278,859
|
|
|
2,752,694
|
|
||
Long term liabilities
|
|
|
|
||||
Deferred income taxes
|
11,061,023
|
|
|
11,322,691
|
|
||
Asset retirement obligations
|
2,588,894
|
|
|
1,560,601
|
|
||
Operating lease liability
|
84,978
|
|
|
—
|
|
||
Total liabilities
|
18,013,754
|
|
|
15,635,986
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock; par value $0.001; 100,000,000 shares authorized: issued and outstanding 32,956,469 and 33,183,730 shares as of June 30, 2020 and 2019, respectively
|
32,956
|
|
|
33,183
|
|
||
Additional paid-in capital
|
41,291,446
|
|
|
42,488,913
|
|
||
Retained earnings
|
32,800,080
|
|
|
37,603,762
|
|
||
Total stockholders' equity
|
74,124,482
|
|
|
80,125,858
|
|
||
Total liabilities and stockholders' equity
|
$
|
92,138,236
|
|
|
$
|
95,761,844
|
|
|
Years Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
||||
Crude oil
|
$
|
28,578,879
|
|
|
$
|
40,779,052
|
|
Natural gas liquids
|
1,018,349
|
|
|
2,449,359
|
|
||
Natural gas
|
2,068
|
|
|
1,210
|
|
||
Total revenues
|
29,599,296
|
|
|
43,229,621
|
|
||
Operating costs
|
|
|
|
||||
Production costs
|
13,505,502
|
|
|
14,266,784
|
|
||
Depreciation, depletion, and amortization
|
5,761,498
|
|
|
6,253,083
|
|
||
Net loss on derivative contracts
|
1,383,204
|
|
|
—
|
|
||
General and administrative expenses*
|
5,259,659
|
|
|
5,072,931
|
|
||
Total operating costs
|
25,909,863
|
|
|
25,592,798
|
|
||
Income from operations
|
3,689,433
|
|
|
17,636,823
|
|
||
Other
|
|
|
|
||||
Enduro transaction breakup fee
|
—
|
|
|
1,100,000
|
|
||
Interest and other income
|
177,418
|
|
|
239,150
|
|
||
Interest (expense)
|
(110,775
|
)
|
|
(116,546
|
)
|
||
Income before income tax provision
|
3,756,076
|
|
|
18,859,427
|
|
||
Income tax provision (benefit)
|
(2,180,996
|
)
|
|
3,482,361
|
|
||
Net income (loss) attributable to common shareholders
|
$
|
5,937,072
|
|
|
$
|
15,377,066
|
|
Earnings per common share
|
|
|
|
||||
Basic
|
$
|
0.18
|
|
|
$
|
0.46
|
|
Diluted
|
$
|
0.18
|
|
|
$
|
0.46
|
|
Weighted average number of common shares outstanding
|
|
|
|
||||
Basic
|
33,031,149
|
|
|
33,160,283
|
|
||
Diluted
|
33,033,091
|
|
|
33,169,718
|
|
*
|
General and administrative expenses for the years ended June 30, 2020 and 2019 included non-cash stock-based compensation expense of $1,285,663 and $888,162, respectively.
|
|
Years Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income attributable to the Company
|
$
|
5,937,072
|
|
|
$
|
15,377,066
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion, and amortization
|
5,761,498
|
|
|
6,253,083
|
|
||
Stock-based compensation
|
1,285,663
|
|
|
888,162
|
|
||
Settlement of asset retirement obligations
|
(76,832
|
)
|
|
—
|
|
||
Deferred income taxes
|
(261,668
|
)
|
|
767,256
|
|
||
Net loss on derivative contracts
|
1,383,204
|
|
|
—
|
|
||
Payments received for derivative settlements
|
793,327
|
|
|
—
|
|
||
Other
|
39,783
|
|
|
15,156
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
(1,994,368
|
)
|
|
773,800
|
|
||
Prepaid expenses and other current assets
|
(33,408
|
)
|
|
66,229
|
|
||
Accounts payable and accrued expenses
|
(486,010
|
)
|
|
(90,891
|
)
|
||
Income taxes payable
|
48,390
|
|
|
8,039
|
|
||
Net cash provided by operating activities
|
12,396,651
|
|
|
24,057,900
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Acquisition of oil and gas properties
|
(9,337,716
|
)
|
|
—
|
|
||
Development of oil and natural gas properties
|
(1,724,829
|
)
|
|
(6,746,142
|
)
|
||
Capital expenditures for other property and equipment
|
—
|
|
|
(11,509
|
)
|
||
Net cash used by investing activities
|
(11,062,545
|
)
|
|
(6,757,651
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Common share repurchases, including shares surrendered for tax withholding
|
(2,483,357
|
)
|
|
(156,791
|
)
|
||
Common stock dividends paid
|
(10,740,754
|
)
|
|
(13,272,058
|
)
|
||
Net cash provided by (used in) financing activities
|
(13,224,111
|
)
|
|
(13,428,849
|
)
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(11,890,005
|
)
|
|
3,871,400
|
|
||
Cash, cash equivalents, and restricted cash, beginning of year
|
31,552,533
|
|
|
27,681,133
|
|
||
Cash, cash equivalents, and restricted cash, end of year *
|
$
|
19,662,528
|
|
|
$
|
31,552,533
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Total
Stockholders'
Equity
|
|||||||||||||||
|
Shares
|
|
Par Value
|
|
||||||||||||||||||
Balance, June 30, 2018
|
33,080,543
|
|
|
$
|
33,080
|
|
|
$
|
41,757,645
|
|
|
$
|
35,498,754
|
|
|
$
|
—
|
|
|
$
|
77,289,479
|
|
Issuance of restricted common stock
|
121,611
|
|
|
122
|
|
|
(122
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Forfeitures of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common share repurchases, including shares surrendered for tax withholding
|
(18,424
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(156,791
|
)
|
|
(156,791
|
)
|
|||||
Retirements of treasury stock
|
—
|
|
|
(19
|
)
|
|
(156,772
|
)
|
|
—
|
|
|
156,791
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
888,162
|
|
|
—
|
|
|
—
|
|
|
888,162
|
|
|||||
Net income attributable to the Company
|
—
|
|
|
—
|
|
|
—
|
|
|
15,377,066
|
|
|
—
|
|
|
15,377,066
|
|
|||||
Common stock cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,272,058
|
)
|
|
—
|
|
|
(13,272,058
|
)
|
|||||
Balance, June 30, 2019
|
33,183,730
|
|
|
33,183
|
|
|
42,488,913
|
|
|
37,603,762
|
|
|
—
|
|
|
80,125,858
|
|
|||||
Issuance of restricted common stock
|
271,778
|
|
|
272
|
|
|
(272
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Forfeitures of restricted stock
|
(49,118
|
)
|
|
(49
|
)
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common share repurchases, including shares surrendered for tax withholding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,483,357
|
)
|
|
(2,483,357
|
)
|
|||||
Retirements of treasury stock
|
(449,921
|
)
|
|
(450
|
)
|
|
(2,482,907
|
)
|
|
—
|
|
|
2,483,357
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,285,663
|
|
|
—
|
|
|
—
|
|
|
1,285,663
|
|
|||||
Net income attributable to the Company
|
—
|
|
|
—
|
|
|
—
|
|
|
5,937,072
|
|
|
—
|
|
|
5,937,072
|
|
|||||
Common stock cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,740,754
|
)
|
|
—
|
|
|
(10,740,754
|
)
|
|||||
Balance, June 30, 2020
|
32,956,469
|
|
|
$
|
32,956
|
|
|
$
|
41,291,446
|
|
|
$
|
32,800,080
|
|
|
$
|
—
|
|
|
$
|
74,124,482
|
|
•
|
Not to apply the recognition requirements in the lease standard to short-term leases (a lease that at commencement date has a lease term of 12 months or less and does not contain a purchase option that the Company is reasonably certain to exercise).
|
•
|
Whether an expired or existing pre-adoption date contracts contained leases.
|
•
|
Lease classification of any expired or existing leases.
|
•
|
Initial direct costs for any expired or existing leases.
|
•
|
Not to separate lease components from non-lease components in a contract and accounting for the combination as a lease (reflected by asset class).
|
Asset (Liability)
|
Balance June 30, 2019
|
|
Adjustment at Adoption July 1, 2019
|
||||
Operating lease right-of-use asset
|
$
|
—
|
|
|
$
|
161,125
|
|
Accrued liabilities and other:
|
|
|
|
||||
Deferred rent
|
$
|
(4,338
|
)
|
|
$
|
4,338
|
|
Operating lease liability
|
$
|
—
|
|
|
$
|
(26,194
|
)
|
Operating lease liabilities - long-term
|
$
|
—
|
|
|
$
|
(139,269
|
)
|
|
June 30,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
|
|
||
Crude oil
|
$
|
28,578,879
|
|
|
$
|
40,779,052
|
|
Natural gas liquids
|
1,018,349
|
|
|
2,449,359
|
|
||
Natural gas
|
2,068
|
|
|
1,210
|
|
||
Total revenues
|
$
|
29,599,296
|
|
|
$
|
43,229,621
|
|
Fiscal Year
|
Operating Lease Liability
|
||
2021
|
59,945
|
|
|
2022
|
61,843
|
|
|
2023
|
26,098
|
|
|
Total lease payments
|
147,886
|
|
|
Less imputed interest
|
(8,617
|
)
|
|
Total lease liability
|
$
|
139,269
|
|
|
As of and For the Year Ended June 30, 2020
|
||
Cash Flow:
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
4,903
|
|
ROU asset added in exchange for lease obligation at adoption
|
161,125
|
|
|
|
|
||
Balance Sheet:
|
|
||
Operating lease ROU asset (included in other assets)
|
117,193
|
|
|
Accrued liabilities - current
|
54,290
|
|
|
Operating lease liability - long-term
|
84,978
|
|
|
|
|
||
Other:
|
|
||
Weighted average remaining lease term in years
|
2.66
|
|
|
Weighted average discount rate
|
5.15
|
%
|
|
June 30,
2020 |
|
June 30,
2019 |
||||
Prepaid insurance
|
$
|
289,999
|
|
|
$
|
206,198
|
|
Prepaid federal and state income taxes
|
86,208
|
|
|
121,679
|
|
||
Prepaid investor relations and other
|
115,479
|
|
|
130,401
|
|
||
Prepaid expenses and other current assets
|
$
|
491,686
|
|
|
$
|
458,278
|
|
|
June 30,
2020 |
|
June 30,
2019 |
||||
Oil and natural gas properties:
|
|
|
|
||||
Property costs subject to amortization
|
$
|
107,390,379
|
|
|
$
|
95,622,153
|
|
Less: Accumulated depreciation, depletion, and amortization
|
(40,878,098
|
)
|
|
(35,275,687
|
)
|
||
Unproved properties not subject to amortization
|
—
|
|
|
—
|
|
||
Oil and natural gas properties, net
|
66,512,281
|
|
|
60,346,466
|
|
||
Other property and equipment:
|
|
|
|
||||
Furniture, fixtures and office equipment, at cost
|
154,731
|
|
|
154,731
|
|
||
Less: Accumulated depreciation
|
(137,092
|
)
|
|
(128,313
|
)
|
||
Other property and equipment, net
|
$
|
17,639
|
|
|
$
|
26,418
|
|
|
June 30,
2020 |
|
June 30,
2019 |
||||
Royalty rights
|
108,512
|
|
|
108,512
|
|
||
Less: Accumulated amortization of royalty rights
|
(61,037
|
)
|
|
(47,474
|
)
|
||
Investment in Well Lift Inc., at cost
|
108,750
|
|
|
108,750
|
|
||
Deferred loan costs
|
168,972
|
|
|
168,972
|
|
||
Less: Accumulated amortization of deferred loan costs
|
(157,084
|
)
|
|
(141,927
|
)
|
||
Right of use asset under operating lease
|
161,125
|
|
|
—
|
|
||
Less: Accumulated amortization of right of use asset
|
(43,932
|
)
|
|
—
|
|
||
Software license
|
20,662
|
|
|
20,662
|
|
||
Less: Accumulated amortization of software license
|
(14,350
|
)
|
|
(7,462
|
)
|
||
Other assets, net
|
$
|
291,618
|
|
|
$
|
210,033
|
|
|
June 30,
2020 |
|
June 30,
2019 |
||||
Accrued incentive and other compensation
|
$
|
176,636
|
|
|
$
|
369,719
|
|
Asset retirement obligations due within one year
|
—
|
|
|
50,244
|
|
||
Accrued franchise taxes
|
100,978
|
|
|
5,738
|
|
||
Accrued ad valorem taxes
|
108,000
|
|
|
100,500
|
|
||
Payable for settled derivatives
|
265,188
|
|
|
—
|
|
||
Operating lease liability, current
|
54,290
|
|
|
—
|
|
||
Accrued - other
|
11,556
|
|
|
11,554
|
|
||
Accrued liabilities and other
|
$
|
716,648
|
|
|
$
|
537,755
|
|
|
Years Ended
|
||||||
|
2020
|
|
2019
|
||||
Asset retirement obligations — beginning of period
|
$
|
1,610,845
|
|
|
$
|
1,422,955
|
|
Liabilities incurred
|
944,278
|
|
(a)
|
31,268
|
|
||
Liabilities settled
|
(86,592
|
)
|
(b)
|
—
|
|
||
Accretion of discount
|
146,504
|
|
|
101,506
|
|
||
Revisions to previous estimates
|
(26,141
|
)
|
|
55,116
|
|
||
Asset retirement obligations — end of period
|
2,588,894
|
|
|
1,610,845
|
|
||
Less: current asset retirement obligations
|
—
|
|
|
(50,244
|
)
|
||
Long-term portion of asset retirement obligations
|
$
|
2,588,894
|
|
|
$
|
1,560,601
|
|
|
Fiscal Year
|
||
|
2020
|
|
2019
|
Fourth quarter ended June 30,
|
$0.025
|
|
$0.100
|
Third quarter ended March 31,
|
$0.100
|
|
$0.100
|
Second quarter ended December 31,
|
$0.100
|
|
$0.100
|
First quarter ended September 30,
|
$0.100
|
|
$0.100
|
|
Common Shares Acquired
|
|
Average Price per Share
|
|
Treasury Stock Purchases
|
|||
Year Ended June 30, 2020:
|
|
|
|
|
|
|||
Shares surrendered for tax withholding upon vesting
|
9,255
|
|
|
$5.90
|
|
$
|
54,565
|
|
Share repurchase program
|
440,666
|
|
|
$5.51
|
|
2,428,792
|
|
|
Total
|
449,921
|
|
|
$5.52
|
|
$
|
2,483,357
|
|
|
|
|
|
|
|
|||
Year Ended June 30, 2019:
|
|
|
|
|
|
|||
Shares surrendered for tax withholding upon vesting
|
17,994
|
|
|
$8.57
|
|
$
|
154,179
|
|
Share repurchase program
|
430
|
|
|
$6.07
|
|
2,612
|
|
|
Total
|
18,424
|
|
|
$8.51
|
|
$
|
156,791
|
|
|
Year Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Weighted average fair value of market-based awards granted
|
$
|
3.79
|
|
|
$
|
8.24
|
|
Risk-free interest rate
|
1.65% to 1.87%
|
|
|
2.69
|
%
|
||
Expected life in years
|
1.35 to 2.56
|
|
|
2.82
|
|
||
Expected volatility
|
38.6% to 43.7%
|
|
|
41.8
|
%
|
||
Dividend yield
|
6% to 7.2%
|
|
|
4.0
|
%
|
Award Type
|
Number of
Restricted Shares |
|
Weighted
Average Grant-Date Fair Value |
|||
Service-based awards
|
155,318
|
|
|
$
|
5.88
|
|
Market-based awards
|
129,710
|
|
|
5.10
|
|
|
Unvested at June 30, 2020
|
285,028
|
|
|
$
|
5.53
|
|
|
Number of
Restricted
Shares
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Unamortized Compensation Expense at June 30, 2020
|
|
Weighted Average Remaining Amortization Period (Years)
|
|||||
Unvested at July 1, 2019
|
176,683
|
|
|
$
|
8.09
|
|
|
$
|
—
|
|
|
|
Service-based shares granted
|
157,386
|
|
|
5.73
|
|
|
|
|
|
|||
Market-based shares granted
|
104,236
|
|
|
4.34
|
|
|
|
|
|
|||
Vested
|
(104,159
|
)
|
|
7.19
|
|
|
|
|
|
|||
Forfeited
|
(49,118
|
)
|
|
9.35
|
|
|
|
|
|
|||
Unvested at June 30, 2020
|
285,028
|
|
|
$
|
5.53
|
|
|
$
|
1,001,477
|
|
|
1.74
|
|
Year Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Vesting-date intrinsic value of Restricted Stock
|
$
|
477,647
|
|
|
$
|
1,141,631
|
|
Grant-date fair value of vested Restricted Stock
|
$
|
748,893
|
|
|
$
|
909,678
|
|
Number of awards that vested
|
104,159
|
|
|
133,776
|
|
|
Number of
Restricted Stock Units |
|
Weighted
Average Grant-Date Fair Value |
|
Unamortized Compensation Expense at June 30, 2020
|
|
Weighted Average Remaining Amortization Period (Years)
|
|||||
Unvested at July 1, 2019
|
10,156
|
|
|
$
|
3.42
|
|
|
|
|
|
||
Market-based awards granted
|
200,000
|
|
|
3.50
|
|
|
|
|
|
|
||
Vested
|
(10,156
|
)
|
|
3.42
|
|
|
|
|
|
|||
Unvested at June 30, 2020
|
200,000
|
|
|
$
|
3.50
|
|
|
$
|
156,591
|
|
|
0.52
|
|
Year Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Vest-date intrinsic value of Contingent Restricted Stock
|
$
|
60,225
|
|
|
$
|
105,227
|
|
Grant-date fair value of vested Contingent Restricted Stock
|
$
|
34,734
|
|
|
$
|
60,266
|
|
Number of awards that vested
|
10,156
|
|
|
10,629
|
|
|
June 30,
|
||||||
|
2020
|
|
2019
|
||||
Income taxes paid
|
$
|
1,241,538
|
|
|
$
|
2,762,919
|
|
Non-cash transactions:
|
|
|
|
||||
Decrease in accrued purchases of property and equipment
|
(212,456
|
)
|
|
(1,603,290
|
)
|
||
Oil and natural gas property costs attributable to the recognition of asset retirement obligations
|
918,137
|
|
|
86,384
|
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Current:
|
|
|
|
||||
Federal
|
$
|
(2,264,850
|
)
|
|
$
|
2,343,512
|
|
State
|
345,522
|
|
|
371,593
|
|
||
Total current income tax provision (benefit)
|
(1,919,328
|
)
|
|
2,715,105
|
|
||
Deferred:
|
|
|
|
||||
Federal
|
(266,482
|
)
|
|
387,541
|
|
||
State
|
4,814
|
|
|
379,715
|
|
||
Total deferred income tax provision (benefit)
|
(261,668
|
)
|
|
767,256
|
|
||
Total income tax provision (benefit)
|
$
|
(2,180,996
|
)
|
|
$
|
3,482,361
|
|
|
June 30, 2020
|
|
% of Income Before Income Taxes
|
|
June 30, 2019
|
|
% of Income Before Income Taxes
|
||||||
Income tax provision (benefit) computed at the statutory federal rate:
|
$
|
788,776
|
|
|
21.0
|
%
|
|
$
|
3,960,480
|
|
|
21.0
|
%
|
Reconciling items:
|
|
|
|
|
|
|
|
||||||
Return to provision adjustments including returns amended for EOR credits
|
(2,823,527
|
)
|
|
(75.2
|
)%
|
|
—
|
|
|
—
|
%
|
||
Depletion in excess of tax basis
|
(412,215
|
)
|
|
(11.0
|
)%
|
|
(982,302
|
)
|
|
(5.1
|
)%
|
||
State income taxes, net of federal tax benefit
|
272,962
|
|
|
7.3
|
%
|
|
593,533
|
|
|
3.1
|
%
|
||
Permanent differences related to stock-based compensation and other
|
22,408
|
|
|
0.6
|
%
|
|
(73,671
|
)
|
|
(0.4
|
)%
|
||
Expiration of Section 382 tax loss carryforwards
|
—
|
|
|
—
|
%
|
|
127,410
|
|
|
0.7
|
%
|
||
Change in valuation allowance for Section 382 tax loss carryforwards
|
—
|
|
|
—
|
%
|
|
(127,410
|
)
|
|
(0.7
|
)%
|
||
Other
|
(29,400
|
)
|
|
(0.8
|
)%
|
|
(15,679
|
)
|
|
(0.1
|
)%
|
||
Income tax provision (benefit)
|
$
|
(2,180,996
|
)
|
|
(58.1
|
)%
|
|
$
|
3,482,361
|
|
|
18.5
|
%
|
|
Asset (Liability)
|
||||||
|
June 30, 2020
|
|
June 30, 2019
|
||||
Deferred tax assets:
|
|
|
|
||||
Non-qualified stock-based compensation
|
$
|
234,559
|
|
|
$
|
159,090
|
|
Net operating loss carry-forwards
|
78,197
|
|
|
496,082
|
|
||
Derivative losses
|
401,382
|
|
|
—
|
|
||
Other
|
53,159
|
|
|
20,713
|
|
||
Gross deferred tax assets
|
767,297
|
|
|
675,885
|
|
||
Valuation allowance
|
(53,218
|
)
|
|
(53,218
|
)
|
||
Total deferred tax assets
|
714,079
|
|
|
622,667
|
|
||
Deferred tax liability:
|
|
|
|
||||
Oil and natural gas properties
|
(11,775,102
|
)
|
|
(11,945,358
|
)
|
||
Total deferred tax liability
|
(11,775,102
|
)
|
|
(11,945,358
|
)
|
||
Net deferred tax liability
|
$
|
(11,061,023
|
)
|
|
$
|
(11,322,691
|
)
|
|
June 30,
|
||||||
|
2020
|
|
2019
|
||||
Numerator
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
5,937,072
|
|
|
$
|
15,377,066
|
|
Denominator
|
|
|
|
||||
Weighted average number of common shares – Basic
|
33,031,149
|
|
|
33,160,283
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Contingent restricted stock grants
|
1,942
|
|
|
9,435
|
|
||
Weighted average number of common shares and dilutive potential common shares used in diluted EPS
|
33,033,091
|
|
|
33,169,718
|
|
||
Net income per common share – Basic
|
$
|
0.18
|
|
|
$
|
0.46
|
|
Net income per common share – Diluted
|
$
|
0.18
|
|
|
$
|
0.46
|
|
Outstanding Potential Dilutive Securities
|
Weighted
Average
Exercise Price
|
|
Outstanding at
June 30, 2020 |
|||
Contingent Restricted Stock grants
|
$
|
—
|
|
|
200,000
|
|
Outstanding Potential Dilutive Securities
|
Weighted
Average
Exercise Price
|
|
Outstanding at
June 30, 2019 |
|||
Contingent Restricted Stock grants
|
$
|
—
|
|
|
10,156
|
|
|
Year Ended June 30,
|
||||
Customer
|
2020
|
|
2019
|
||
Plains Marketing L.P. (Delhi field oil)
|
87
|
%
|
|
94
|
%
|
Merit Energy Company (Hamilton Dome field oil)
|
10
|
%
|
|
—
|
%
|
Third Coast Midstream (Delhi field NGLs)
|
3
|
%
|
|
6
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
|
Years Ended June 30,
|
||||||
|
|
2020
|
|
2019
|
||||
Realized (gain) loss
|
|
$
|
(528,139
|
)
|
|
$
|
—
|
|
Unrealized (gain) loss
|
|
1,911,343
|
|
|
—
|
|
||
Net (gain) loss on derivative contracts
|
|
$
|
1,383,204
|
|
|
$
|
—
|
|
Period
|
|
Type of Contract
|
|
Volumes in Barrels
|
|
Price / Price Range
|
|
Weighted Average Floor Price per Bbl.
|
|
Weighted Average Ceiling Price per Bbl.
|
|
July 2020 to December 2020
|
|
Fixed-Price Swap
|
|
257,600
|
|
|
$32
|
|
$32
|
|
$—
|
|
|
June 30, 2020
|
|||||||||
Asset (Liability)
|
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
|
|
Net Amounts Presented in the Consolidated Balance Sheets
|
|||||
Current derivative assets
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Current derivative contract liabilities
|
|
1,911,343
|
|
|
—
|
|
|
1,911,343
|
|
||
Total
|
|
$
|
1,911,343
|
|
|
—
|
|
|
$
|
1,911,343
|
|
|
For the Years Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Oil and Natural Gas Activities
|
|
|
|
||||
Property acquisition costs:
|
|
|
|
||||
Proved property
|
$
|
9,337,716
|
|
|
$
|
—
|
|
Unproved property
|
—
|
|
|
—
|
|
||
Exploration costs
|
—
|
|
|
—
|
|
||
Development costs
|
2,430,510
|
|
|
5,229,235
|
|
||
Total costs incurred for oil and natural gas activities
|
$
|
11,768,226
|
|
|
$
|
5,229,235
|
|
|
Crude Oil
(Bbls)
|
|
Natural Gas
Liquids
(Bbls)
|
|
Natural Gas
(Mcf)
|
|
BOE
|
||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
||||
June 30, 2018
|
8,090,190
|
|
|
1,277,772
|
|
|
—
|
|
|
9,367,962
|
|
Revisions of previous estimates (a)
|
152,420
|
|
|
199,078
|
|
|
—
|
|
|
351,498
|
|
Improved recovery, extensions and discoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Sales of minerals in place
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Production (sales volumes)
|
(626,879
|
)
|
|
(112,089
|
)
|
|
—
|
|
|
(738,968
|
)
|
June 30, 2019
|
7,615,731
|
|
|
1,364,761
|
|
|
—
|
|
|
8,980,492
|
|
Revisions of previous estimates (b)
|
(2,177,787
|
)
|
|
734,169
|
|
|
—
|
|
|
(1,443,618
|
)
|
Improved recovery, extensions and discoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Purchase of reserves in place (c)
|
3,426,756
|
|
|
—
|
|
|
—
|
|
|
3,426,756
|
|
Sales of minerals in place
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Production (sales volumes)
|
(638,464
|
)
|
|
(106,340
|
)
|
|
—
|
|
|
(744,804
|
)
|
June 30, 2020
|
8,226,236
|
|
|
1,992,590
|
|
|
—
|
|
|
10,218,826
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
||||
June 30, 2018
|
6,291,850
|
|
|
993,741
|
|
|
—
|
|
|
7,285,591
|
|
June 30, 2019
|
6,273,907
|
|
|
1,124,302
|
|
|
—
|
|
|
7,398,209
|
|
June 30, 2020
|
6,577,731
|
|
|
1,777,236
|
|
|
—
|
|
|
8,354,967
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
||||
June 30, 2018
|
1,798,340
|
|
|
284,031
|
|
|
—
|
|
|
2,082,371
|
|
June 30, 2019
|
1,341,824
|
|
|
240,459
|
|
|
—
|
|
|
1,582,283
|
|
June 30, 2020
|
1,648,505
|
|
|
215,354
|
|
|
—
|
|
|
1,863,859
|
|
|
As of June 30,
|
||||||
|
2020
|
|
2019
|
||||
Future cash inflows
|
$
|
399,358,481
|
|
|
$
|
524,037,200
|
|
Future production costs and severance taxes
|
(240,399,715
|
)
|
|
(208,539,679
|
)
|
||
Future development costs
|
(24,623,426
|
)
|
|
(18,395,252
|
)
|
||
Future income tax expenses
|
(21,982,469
|
)
|
|
(55,881,997
|
)
|
||
Future net cash flows
|
112,352,871
|
|
|
241,220,272
|
|
||
10% annual discount for estimated timing of cash flows
|
(49,862,035
|
)
|
|
(114,488,230
|
)
|
||
Standardized measure of discounted future net cash flows
|
$
|
62,490,836
|
|
|
$
|
126,732,042
|
|
|
For the Years Ended June 30,
|
||||||||||
|
2020
|
|
2019
|
||||||||
|
Oil
(Bbl)
|
|
Gas
(MMBtu)
|
|
Oil
(Bbl)
|
|
Gas
(MMBtu)
|
||||
NYMEX prices used in determining future cash flows
|
$
|
47.37
|
|
|
n/a
|
|
$
|
61.62
|
|
|
n/a
|
|
For the Years Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Balance, beginning of the fiscal year
|
$
|
126,732,042
|
|
|
$
|
118,958,414
|
|
Net changes in sales prices and production costs related to future production
|
(83,857,342
|
)
|
|
23,753,518
|
|
||
Changes in estimated future development costs
|
(4,099,792
|
)
|
|
833,494
|
|
||
Sales of oil and gas produced during the period, net of production costs
|
(16,093,794
|
)
|
|
(28,962,837
|
)
|
||
Net change due to extensions, discoveries, and improved recovery
|
—
|
|
|
—
|
|
||
Net change due to revisions in quantity estimates
|
(6,746,316
|
)
|
|
6,129,847
|
|
||
Net change due to purchase of minerals in place
|
10,364,875
|
|
|
—
|
|
||
Development costs incurred during the period
|
1,431,444
|
|
|
2,089,139
|
|
||
Accretion of discount
|
16,266,663
|
|
|
14,604,387
|
|
||
Net change in discounted income taxes
|
17,078,591
|
|
|
(2,795,183
|
)
|
||
Net changes in timing of production and other
|
1,414,465
|
|
|
(7,878,737
|
)
|
||
Balance, end of the fiscal year
|
$
|
62,490,836
|
|
|
$
|
126,732,042
|
|
2020
|
First
|
|
Second
|
|
Third (1)
|
|
Fourth
|
||||||||
Revenues
|
$
|
9,152,215
|
|
|
$
|
9,381,615
|
|
|
$
|
7,712,619
|
|
|
$
|
3,352,847
|
|
Income (loss) from operations
|
$
|
3,274,019
|
|
|
$
|
2,249,764
|
|
|
$
|
951,814
|
|
|
$
|
(2,786,164
|
)
|
Net income (loss) attributable to common shareholders
|
$
|
2,792,820
|
|
|
$
|
1,764,918
|
|
|
$
|
3,710,159
|
|
|
$
|
(2,330,825
|
)
|
Basic earnings (loss) per common share
|
$
|
0.08
|
|
|
$
|
0.05
|
|
|
$
|
0.11
|
|
|
$
|
(0.07
|
)
|
Diluted earnings (loss) per common share
|
$
|
0.08
|
|
|
$
|
0.05
|
|
|
$
|
0.11
|
|
|
$
|
(0.07
|
)
|
2019
|
First (2)
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
Revenues
|
$
|
12,307,079
|
|
|
$
|
11,048,118
|
|
|
$
|
9,501,028
|
|
|
$
|
10,373,396
|
|
Income from operations
|
$
|
5,994,927
|
|
|
$
|
4,733,747
|
|
|
$
|
2,952,955
|
|
|
$
|
3,955,194
|
|
Net income attributable to common shareholders
|
$
|
5,795,801
|
|
|
$
|
3,904,565
|
|
|
$
|
2,398,875
|
|
|
$
|
3,277,825
|
|
Basic earnings per common share
|
$
|
0.18
|
|
|
$
|
0.12
|
|
|
$
|
0.07
|
|
|
$
|
0.10
|
|
Diluted earnings per common share
|
$
|
0.17
|
|
|
$
|
0.12
|
|
|
$
|
0.07
|
|
|
$
|
0.10
|
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
|
|
|
Evolution Petroleum Corporation
|
||
Date: September 10, 2020
|
|
By:
|
|
/s/ JASON E. BROWN
Jason E. Brown
President and Chief Executive Officer
(Principal Executive Officer) |
Date
|
|
Signature
|
|
Title
|
|
|
|
|
|
September 10, 2020
|
|
/s/ ROBERT S. HERLIN
Robert S. Herlin
|
|
Chairman of the Board
|
September 10, 2020
|
|
/s/ JASON E. BROWN
Jason E. Brown |
|
President and Chief Executive Officer
(Principal Executive Officer) |
September 10, 2020
|
|
/s/ DAVID JOE
David Joe |
|
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
|
September 10, 2020
|
|
/s/ RODERICK SCHULTZ
Roderick Schultz |
|
Vice President, Chief Accounting Officer (Principal Accounting Officer)
|
September 10, 2020
|
|
/s/ EDWARD J. DIPAOLO
Edward J. DiPaolo
|
|
Lead Director
|
September 10, 2020
|
|
/s/ WILLIAM DOZIER
William Dozier
|
|
Director
|
September 10, 2020
|
|
/s/ KELLY W. LOYD
Kelly W. Loyd
|
|
Director
|
September 10, 2020
|
|
/s/ MARRAN H. OGILVIE
Marran H. Ogilvie
|
|
Director
|
EXHIBIT
NUMBER
|
|
DESCRIPTION
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
4.10
|
|
|
|
4.11
|
|
|
|
4.12
|
|
|
|
4.13
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
EXHIBIT
NUMBER
|
|
DESCRIPTION
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
|
14.1
|
|
|
|
21.1
|
|
|
|
23.1
|
|
|
|
23.2
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
99.1
|
|
|
|
101.INS
|
|
|
XBRL Instance Document
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Name of Subsidiary
|
|
Jurisdiction of Incorporation or Organization
|
Evolution Royalties, Inc.
|
|
Delaware
|
Evolution Petroleum West, Inc.
|
|
Delaware
|
NGS Sub Corp.
|
|
Delaware
|
NGS Technologies, Inc.
|
|
Delaware
|
Evolution Operating Co., Inc.
|
|
Texas
|
Evolution Petroleum OK, Inc.
|
|
Texas
|
Tertiaire Resources Company
|
|
Texas
|
ARKLA Petroleum, LLC (Subsidiary of NGS Sub. Corp.)
|
|
Louisiana
|
NGS Resources, LLC (Subsidiary of NGS Technologies, Inc.)
|
|
Texas
|
1.
|
I have reviewed this annual report on Form 10-K of Evolution Petroleum Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Dated: September 10, 2020
|
|
/s/ JASON E. BROWN
Jason E. Brown
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Evolution Petroleum Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Dated: September 10, 2020
|
|
/s/ DAVID JOE
David Joe
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
/s/ JASON E. BROWN
Jason E. Brown
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
/s/ DAVID JOE
David Joe
Chief Financial Officer
|