Delaware
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87-0267438
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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Large accelerated filer
☐
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Accelerated filer
☐
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Non-accelerated filer
☐
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Smaller reporting company
☒
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(Do not check if a smaller reporting company)
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Emerging growth company
☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
☐
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PAGE
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PART I.
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FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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||
3
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5
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||
6
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7
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17
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19
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20
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PART II.
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20
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20
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20
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20
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20
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20
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20
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21
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22
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* CERTIFICATIONS
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March 31,
2018
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December 31,
2017
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|||||||
Assets
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||||||||
Current
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||||||||
Cash and cash equivalents
|
$
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2,916
|
$
|
185
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||||
Accounts receivable, less allowance for doubtful accounts of $14
|
550
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517
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||||||
Accounts receivable – related party, less allowance for doubtful accounts of $159
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—
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—
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||||||
Inventory
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656
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541
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||||||
Other current assets
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219
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134
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||||||
Discontinued operations included in current assets
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—
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121
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||||||
Total current assets
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4,341
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1,498
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||||||
Loan fees, net
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12
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13
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||||||
Oil and gas properties, net (
full cost accounting method
)
|
4,570
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4,720
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||||||
Other property and equipment, net
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243
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135
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||||||
Deferred tax asset
|
242
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242
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||||||
Discontinued operations included in non-current assets
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—
|
1,497
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||||||
Total assets
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$
|
9,408
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$
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8,105
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March 31,
2018
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December 31,
2017
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|||||||
Liabilities and Stockholders’ Equity
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||||||||
Current liabilities
|
||||||||
Accounts payable – trade
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$
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133
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$
|
181
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||||
Accounts payable – other
|
159
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159
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||||||
Accrued and other current liabilities
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211
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187
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||||||
Current maturities of long-term debt
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56
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41
|
||||||
Discontinued operations included in current liabilities
|
32
|
43
|
||||||
Total current liabilities
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591
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611
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||||||
Asset retirement obligation
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2,292
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2,270
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||||||
Long term debt, less current maturities
|
103
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49
|
||||||
Total liabilities
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2,986
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2,930
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||||||
Commitments and contingencies (Note 13)
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||||||||
Stockholders’ equity
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||||||||
Preferred stock, 25,000,000 shares authorized:
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||||||||
Series A Preferred stock, $.0001 par value, 10,000 shares designated; 0 shares issued and outstanding
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—
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—
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||||||
Common stock, $.001 par value, authorized 100,000,000 shares; 10,624,493 and 10,619,924 shares issued and outstanding
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11
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11
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||||||
Additional paid–in capital
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58,257
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58,253
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||||||
Accumulated deficit
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(51,846
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)
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(53,089
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)
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||||
Total stockholders’ equity
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6,422
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5,175
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||||||
Total liabilities and stockholders’ equity
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$
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9,408
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$
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8,105
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For the Three Months Ended
March 31,
|
||||||||
2018
|
2017
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|||||||
Revenues
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||||||||
Oil and gas properties
|
$
|
1,367
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$
|
1,209
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||||
Total revenues
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1,367
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1,209
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||||||
Cost and expenses
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||||||||
Production costs and taxes
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730
|
808
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||||||
Depreciation, depletion, and amortization
|
183
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221
|
||||||
General and administrative
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336
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334
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||||||
Impairment
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—
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—
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||||||
Total cost and expenses
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1,249
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1,363
|
||||||
Net income (loss) from operations
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118
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(154
|
)
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|||||
Other expense
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||||||||
Net interest expense
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(1
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)
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(16
|
)
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||||
Gain on sale of assets
|
16
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—
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||||||
Total other expenses
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15
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(16
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)
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|||||
Income (loss) from continuing operations before income tax
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133
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(170
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)
|
|||||
Deferred income tax benefit
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—
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—
|
||||||
Net income (loss) from continuing operations
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133
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(170
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)
|
|||||
Net income (loss) from discontinued operations
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1,110
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(43
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)
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|||||
Net income (loss)
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$
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1,243
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$
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(213
|
)
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|||
Net income (loss) per share - Basic and Fully Diluted
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||||||||
Continuing operations
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$
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0.01
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$
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(0.02
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)
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|||
Discontinued operations
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$
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0.10
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$
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(0.01
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)
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|||
Shares used in computing earnings per share
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||||||||
Basic and fully diluted
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10,624,442
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8,452,132
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For the Three Months Ended
March 31,
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||||||||
2018
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2017
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|||||||
Operating activities
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||||||||
Net income (loss) from continuing operations
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$
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133
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$
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(170
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)
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|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
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||||||||
Depreciation, depletion, and amortization
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183
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221
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||||||
Amortization of loan fees-interest expense
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1
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4
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||||||
Accretion on asset retirement obligation
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36
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36
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||||||
(Gain) loss on asset sales
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(16
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)
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—
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|||||
Stock based compensation
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4
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4
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||||||
Changes in assets and liabilities:
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||||||||
Accounts receivable
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(33
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)
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44
|
|||||
Inventory and other assets
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(200
|
)
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56
|
|||||
Accounts payable
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(48
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)
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(63
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)
|
||||
Accrued and other current liabilities
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18
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(50
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)
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|||||
Settlement on asset retirement obligation
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(7
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)
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(10
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)
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Net cash provided by operating activities - continuing operations
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71
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72
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||||||
Net cash provided by (used in) operating activities - discontinued operations
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67
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(160
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)
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|||||
Net cash provided by (used in) operating activities
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138
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(88
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)
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|||||
Investing activities
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||||||||
Additions to oil and gas properties
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(32
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)
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(7
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)
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||||
Proceeds from sale of oil and gas properties
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3
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—
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||||||
Additions to other property and equipment
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(19
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)
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—
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|||||
Proceeds from sale of other property and equipment
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7
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—
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||||||
Net cash used in investing activities - continuing operations
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(41
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)
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(7
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)
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||||
Net cash provided by investing activities - discontinued operations
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2,650
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—
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||||||
Net cash provided by (used in) investing activities
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2,609
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(7
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)
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|||||
Financing activities
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||||||||
Repayments of borrowings
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(116
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)
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(2,815
|
)
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||||
Proceeds from borrowings
|
100
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400
|
||||||
Proceeds from stock issuance in rights offering
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—
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2,699
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||||||
Costs of stock issuance in rights offering
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—
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(37
|
)
|
|||||
Net cash provided by (used in) financing activities - continuing operations
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(16
|
)
|
247
|
|||||
Net cash provided by (used in) financing activities - discontinued operations
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—
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—
|
||||||
Net cash provided by financing activities
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(16
|
)
|
247
|
|||||
Net change in cash and cash equivalents
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2,731
|
152
|
||||||
Cash and cash equivalents, beginning of period
|
185
|
76
|
||||||
Cash and cash equivalents, end of period
|
$
|
2,916
|
$
|
228
|
||||
Supplemental cash flow information:
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||||||||
Cash interest payments
|
$
|
—
|
$
|
12
|
||||
Supplemental non-cash investing and financing activities:
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||||||||
Financed company vehicles
|
$
|
109
|
$
|
—
|
||||
Costs of stock issuance in rights offering
|
$
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—
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$
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(140
|
)
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|||
Capital expenditures included in accounts payable and accrued liabilities
|
$
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6
|
$
|
—
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(1) |
Description of Business and Significant Accounting Policies
|
Three Months Ended
|
||||||||
March 31, 2018
|
March 31, 2017
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|||||||
Revenues (in thousands):
|
||||||||
Crude oil
|
$
|
1,357
|
$
|
1,203
|
||||
Salt water disposal fees
|
10
|
6
|
||||||
Total
|
$
|
1,367
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$
|
1,209
|
March 31,
2018
|
December 31,
2017
|
|||||||
Oil – carried at cost
|
$
|
551
|
$
|
436
|
||||
Equipment and materials – carried at market
|
105
|
105
|
||||||
Total inventory
|
$
|
656
|
$
|
541
|
March 31,
2018
|
December 31,
2017
|
|||||||
Revenue
|
$
|
519
|
$
|
479
|
||||
Joint interest
|
23
|
23
|
||||||
Other
|
22
|
29
|
||||||
Allowance for doubtful accounts
|
(14
|
)
|
(14
|
)
|
||||
Total accounts receivable
|
$
|
550
|
$
|
517
|
(2) |
Liquidity
|
(3) |
Income Taxes
|
(4) |
Capital Stock
|
(5) |
Earnings per Common Share
|
For the Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Income (numerator):
|
||||||||
Net income (loss) from continuing operations
|
$
|
133
|
$
|
(170
|
)
|
|||
Net income (loss) from discontinued operations
|
$
|
1,110
|
$
|
(43
|
)
|
|||
Weighted average shares (denominator):
|
||||||||
Weighted average shares – basic
|
10,624,442
|
8,452,132
|
||||||
Dilution effect of share-based compensation, treasury method
|
—
|
—
|
||||||
Weighted average shares – dilutive
|
10,624,442
|
8,452,132
|
||||||
Income (loss) per share – Basic and Dilutive:
|
||||||||
Continuing operations
|
$
|
0.01
|
$
|
(0.02
|
)
|
|||
Discontinued operations
|
$
|
0.10
|
$
|
(0.01
|
)
|
(6) |
Recent Accounting Pronouncements
|
(7) |
Related Party Transactions
|
(8) |
Oil and Gas Properties
|
March 31,
2018
|
December 31,
2017
|
|||||||
Oil and gas properties
|
$
|
5,733
|
$
|
5,704
|
||||
Unevaluated properties
|
—
|
—
|
||||||
Accumulated depreciation, depletion, and amortization
|
(1,163
|
)
|
(984
|
)
|
||||
Oil and gas properties
|
$
|
4,570
|
$
|
4,720
|
(9) |
Asset Retirement Obligation
|
Balance December 31, 2017
|
$
|
2,270
|
||
Accretion expense
|
36
|
|||
Liabilities incurred
|
—
|
|||
Liabilities settled
|
(14
|
)
|
||
Balance March 31, 2018
|
$
|
2,292
|
(10) |
Long-Term Debt
|
(11) |
Discontinued Operations
|
March 31,
2018
|
December 31,
2017
|
|||||||
Accounts receivable
|
$
|
—
|
$
|
91
|
||||
Other current assets
|
—
|
30
|
||||||
Discontinued operations included in current assets
|
$
|
—
|
$
|
121
|
||||
Property, plant, and equipment
|
$
|
—
|
$
|
1,681
|
||||
Accumulated depreciation, depletion, and amortization
|
—
|
(184
|
)
|
|||||
Discontinued operations included in non-current assets
|
$
|
—
|
$
|
1,497
|
||||
Accounts payable - trade
|
$
|
32
|
$
|
27
|
||||
Accrued and other current liabilities
|
—
|
16
|
||||||
Discontinued operations included in current liabilities
|
$
|
32
|
$
|
43
|
For the Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Revenues
|
$
|
6
|
$
|
135
|
||||
Production costs and taxes
|
(50
|
)
|
(163
|
)
|
||||
Depreciation, depletion, and amortization
|
(4
|
)
|
(15
|
)
|
||||
Interest income
|
1
|
—
|
||||||
Gain on sale of assets
|
1,157
|
—
|
||||||
Deferred income tax benefit
|
—
|
—
|
||||||
Net income (loss) from discontinued operations
|
$
|
1,110
|
$
|
(43
|
)
|
(12) |
Fair Value Measurements
|
(13) |
Commitments and Contingencies
|
Dated: May 15, 2018
|
||
TENGASCO, INC.
|
||
By:
|
/s/Michael J. Rugen
|
|
Michael J. Rugen
|
||
Chief Executive Officer and Chief Financial Officer
|
Dated: May 15, 2018
|
||
By:
|
/s/ Michael J. Rugen
|
|
Michael J. Rugen
|
||
Chief Executive Officer and Chief Financial Officer
|
Dated: May 15, 2018
|
||
By:
|
/s/ Michael J. Rugen
|
|
Michael J. Rugen
|
||
Chief Executive Officer and Chief Financial Officer
|