Property and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment

Note 4. Property and Equipment

Property and equipment consisted of the following:

	December 31, 2023			December 31, 2022
E&P
Proved properties	$	—		$	—
Unproved properties		28,705,404			—
Total capitalized costs		28,705,404			—
Less: Accumulated depreciation, depletion and amortization		—			—
Net capitalized costs	$	28,705,404		$	—
Cryptocurrency Mining
Cryptocurrency miners	$	4,146,687		$	—
Mobile data centers		146,735			—
Total		4,293,422			—
Less: Accumulated depreciation		(1,111,115	)		—
Net, property and equipment	$	3,182,307		$	—

On August 15, 2023, the Company exercised its option under the Exok Transaction to purchase approximately 20,328 net mineral acres in, on and under approximately 32,695 additional gross acres from Exok (the “Exok Option Assets”). The acquisition cost of this acreage was $25.3 million consisting of (i) $18.0 million in cash (the “Cash Consideration”), (ii) issuance of 670,499 shares of the Company’s common stock and Exok Warrants to purchase 670,499 shares of common stock for an aggregate value of $7.3 million, and (iii) direct transaction costs. The Cash Consideration was funded from the Series E PIPE (see Note 13).

In conjunction with the Merger, the Company recorded the cryptocurrency mining equipment assumed in the Merger. In accordance with GAAP for asset acquisitions, the excess purchase price over the fair value of the acquired assets and liabilities was ascribed to the property and equipment acquired. Due to the significant excess purchase price being allocated over the fair value of the acquired property and equipment, the Company determined that an indicator of impairment was present. The Company therefore recognized an impairment of $16.6 million to bring the carrying amount of the acquired property and equipment down to its estimated fair value of $1.5 million. Additionally and upon the receipt of cryptocurrency mining equipment and transfer from deposits to property and equipment (See Note 5), the Company recognized an additional impairment of $0.2 million related to shipping and customs fees on this equipment incurred subsequent to the Merger.