Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2025

Accounting Policies [Abstract]

Accounts Receivable

Accounts Receivable

Oil, natural gas, and NGL revenue receivable consists of uncollateralized accrued oil, natural gas, and NGL revenue due under normal trade terms, generally requiring payment within 30 days of production. Joint interest and other receivables consist of uncollateralized joint interest owner obligations due within 30 days of the invoice date and, at times, receivables from the counterparties to the Company’s derivative contracts. In the Company’s capacity as operator, it incurs development, exploration, operating, and plug and abandon (“P&A”) costs that are billed to its partners based on their respective working interests. For receivables from joint interest owners, the Company typically has the ability to withhold revenue distributions to recover any unpaid joint operations billings that are past due.

The Company did not have any producing wells prior to the NRO Acquisition (as defined herein), which closed on October 1, 2024. During the three months ended March 2025, two of the Company’s largest customers accounted for approximately 70% and 17% of its oil, natural gas, and NGL revenues. The Company’s accrued oil, natural gas, and NGL revenues as of March 31, 2025 includes revenue for the assets acquired from Bayswater from March 26, 2025 through March 31, 2025. Inclusive of the Bayswater accrued revenue, two of the largest customers accounted for approximately 30% and 16% of the Company’s accrued oil, natural gas, and NGL revenues as of March 31, 2025. The Company is exposed to credit risk in the event of nonpayment by the purchasers of its production, all of which are concentrated in energy-related industries and may be similarly affected by changes in economic and financial conditions, commodity prices, or other conditions. However, the Company does not believe the loss of any single purchaser would materially impact its operating results, as crude oil, natural gas, and NGL are fungible products with well-established markets and numerous purchasers.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue from the sales of oil, natural gas, and NGLs at the point that control of the produced oil, natural gas, and NGL volumes are transferred to the customer.

The following table presents the Company’s oil, natural gas, and NGL revenue disaggregated by revenue stream:

	Three Months Ended March 31,
	2025		2024
	(In thousands)
Crude oil sales	$	10,788	$	—
Natural gas sales		1,223		—
NGL sales		1,579		—
Total revenues	$	13,590	$	—

Earnings (Loss) Per Common Share

Earnings (Loss) Per Common Share

The two–class method of computing earnings per share is required for entities that have participating securities. The two–class method is an earnings allocation formula that determines earnings per share for participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s Series D Preferred Stock, Series E Preferred Stock, and Series F Preferred Stock (each as defined herein) are participating securities. These participating securities do not have a contractual obligation to share in the Company’s losses. Therefore, in periods of net loss, no portion of such losses are allocated to participating securities.

Basic earnings (loss) per common share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of Common Stock outstanding each period.

Dilutive EPS is calculated by dividing adjusted net income (loss) attributable to common stockholders by the weighted average number of shares of Common Stock outstanding each period, which includes the effect of potentially dilutive securities. Potentially dilutive securities for the diluted EPS calculation consists of (i) Series D Preferred Stock, (ii) Series E Preferred Stock, when the shares were outstanding during the year ended December 31, 2024, (iii) Series F Preferred Stock, when the shares are outstanding during the three months ended March 31, 2025, (iv) warrants to purchase Common Stock, and (v) options which are exercisable for Common Stock. Diluted EPS reflects the dilutive effect of the participating securities using the two–class method or the treasury stock method, whichever is more dilutive.

Basic and diluted earnings (loss) attributable to common stockholders is the same for each of the three months ended March 31, 2025 and 2024 because the Company has only incurred losses and all potentially dilutive securities are anti–dilutive.

The following table presents the potentially dilutive securities which were not included in the computation of diluted earnings (loss) attributable to common stockholders for the three months ended March 31, 2025 because their inclusion would be anti–dilutive:

Potentially Dilutive Security	Quantity		Stated Value Per Share		Total Value or Stated Value		Assumed Conversion Price		Resulting Common Shares
Merger Options (1)		5,666,666	$	—	$	—	$	—		5,666,666
Restricted stock and performance stock units (2)		1,059,432	$	—	$	—	$	—		1,059,432
Common stock warrants (3)		382,914,964	$	—	$	—	$	—		163,975,543
Series D Preferred Stock		5,982	$	1,000	$	5,981,680	$	5.00		1,196,337
Series F Preferred Stock (4)		147,250	$	1,000	$	147,250,000	$	$1,055.90		155,481,366
Total										327,379,344

(1)	The Merger Options became exercisable upon the closing of the Bayswater Acquisition on March 26, 2025. Refer to Note 15 – Common Stock Options and Warrants for a discussion of the Merger Options (defined herein).
(2)	As of March 31, 2025, all restricted stock and performance stock units presented are unvested. Refer to Note 16 – Long–Term Incentive Compensation for a discussion of the restricted stock units and performance stock units.
(3)	Includes the maximum amount of Series F Preferred Stock Warrants as of March 31, 2025, none of which have been issued. Refer to Note 15 – Common Stock Options and Warrants for a discussion of the Series F Preferred Stock Warrants.
(4)	Assumes the maximum number of converted shares using the Alternative Conversion at the NASDAQ minimum floor price, as defined in the Series F Preferred Stock Certificate of Designation (as defined herein), as of March 31, 2025. Refer to Note 13 – Mezzanine Equity for a discussion of the Series F Preferred Stock Warrants.

The following table presents the potentially dilutive securities which were not included in the computation of diluted earnings (loss) attributable to common stockholders for the three months ended March 31, 2024 because their inclusion would be anti–dilutive:

Potentially Dilutive Security	Quantity		Stated Value Per Share		Total Value or Stated Value		Assumed Conversion Price		Resulting Common Shares
Common stock options and restricted stock units (1)		8,547,574	$	—	$	—	$	—		547,574
Common stock warrants		365,323,672	$	—	$	—	$	—		12,775,829
Series D Preferred Stock		19,402	$	1,000	$	19,402,130	$	5.00		3,880,426
Series E Preferred Stock		20,000	$	1,000	$	20,000,000	$	5.00		4,000,000
Total										21,203,829

⁽¹⁾ Not exercisable or vested as of March 31, 2024. Refer to Note 15 – Common Stock Options and Warrants for a discussion of the Merger Options and Note 16 – Long–Term Incentive Compensation for a discussion of the restricted stock units.

Treasury Stock

Treasury Stock

During the three months ended March 31, 2025, the Company paid $0.3 million to repurchase 40,196 shares of vested restricted stock units from employees to cover such employees’ portion of the tax withholdings. The Company has presented the shares repurchased at cost as treasury stock on its condensed consolidated balance sheet as of March 31, 2025.

Supplemental Disclosures of Cash Flow Information

The following table presents non–cash investing and financing activities and supplemental cash flow disclosures relating to the cash paid for interest and income taxes for the periods presented:

	Three Months Ended March 31,
	2025		2024
	(In thousands)
Non–cash investing and financing activities:
Capital expenditures included in accrued liabilities	$	25,939	$	—
Common Stock issued to seller as part of Bayswater Acquisition purchase price (1)	$	16,000	$	—
Common Stock issuance costs included in accrued liabilities (2)	$	3,078	$	—
Series F Preferred Stock issuance costs included in accrued liabilities (3)	$	6,778	$	—
Common Stock issued upon conversion of Series D Preferred Stock	$	8,475	$	1,225
Common Stock issued upon conversion of Series F Preferred Stock	$	1,351	$	—
Common Stock issued upon conversion of Senior Convertible Note (4)	$	18,164	$	—
Series F Preferred Stock undeclared dividends	$	245	$	—
Series F Preferred Stock deemed dividends (5)	$	90,612	$	—
Series F Preferred Stock embedded derivatives	$	19,350	$	—
Series F Preferred Stock warrant liabilities	$	22,115	$	—
Additions to asset retirement obligation	$	46	$	—
Supplemental disclosure:
Cash paid for interest	$	915	$	—
Cash paid for income taxes	$	—	$	—

(1)	The Company issued approximately 3.7 million shares of Common Stock to Bayswater as part of the Bayswater Purchase Price. Refer to Note 2 – Acquisitions for a discussion of the Bayswater Acquisition.
(2)	Relates to the Common Stock issued to partially fund the Bayswater Acquisition. Refer to Note 2 – Acquisitions for a discussion of the Bayswater Acquisition and Note 14 – Stockholders’ Equity for a discussion of the Common Stock issuance.
(3)	Relates to the Series F Preferred Stock issued to partially fund the Bayswater Acquisition. Refer to Note 2 – Acquisitions for a discussion of the Bayswater Acquisition and Note 13 – Mezzanine Equity for a discussion of the Series F Preferred Stock.
(4)	During the three months ended March 31, 2025, YA II PN, LTD., a Cayman Islands exempt limited company (“Yorkville”), converted the remaining $11.3 million of the initial $15.0 million convertible promissory note (the “Senior Convertible Note”) in exchange for 2.1 million shares of Common Stock. Refer to Note 10 – Debt for a discussion of the Senior Convertible Note.
(5)	Reflects the March 31, 2025 adjustment of the Series F Preferred Stock to maximum redemption in accordance with ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Refer to Note 13 – Mezzanine Equity for a discussion of the Series F Preferred Stock.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Recent accounting pronouncements issued by the Financial Accounting Standards Board, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.