LIQUIDITY AND GOING CONCERN CONSIDERATIONS	12 Months Ended
Dec. 31, 2021
LIQUIDITY AND GOING CONCERN CONSIDERATIONS
LIQUIDITY AND GOING CONCERN CONSIDERATIONS	*NOTE 3 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS* The Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company generated a net loss of $169.7 million for the year ended December 31, 2021 (the “2021 Loss”) as compared to a net loss of $52.0 million for the nine-month period ended December 31, 2020. The 2021 Loss was comprised of certain non-cash items with a net impact of $163.8 million including: (i) a loss on changes in fair value of the derivative liability relating to the Series C Preferred Stock of $152.8 million; (ii) equity in loss of unconsolidated entity of $9.4 million (iii) and share based compensation of $1.6 million. As of December 31, 2021, the Company had stockholders’ deficit of $71.8 million and total long-term debt of $21.5 million. As of December 31, 2021, the Company has a working capital deficiency of approximately $90.7 million. The largest components of current liabilities creating this working capital deficiency was a derivative liability associated with our Series C Preferred Stock of $93.1 million. Management believes it will be able to continue to leverage the expertise and relationships of its operational and technical teams to enhance existing assets and identify new development, drilling and acquisition opportunities in order to improve the Company’s financial position. The Company may have the ability, if it can raise additional capital, to acquire new assets in a separate division from existing subsidiaries. Nonetheless, recent oil and gas price volatility as a result of geopolitical conditions and the global COVID-19 pandemic have already had and may continue to have a negative impact on the Company’s financial position and results of operations. Negative impacts could include but are not limited to: The Company’s ability to sell [its] oil and gas production, reduction in the selling price of the Company’s oil and gas, failure of a counterparty to make required hedge payments, possible disruption of production as a result of worker illness or mandated production shutdowns, the Company’s ability to maintain compliance with loan covenants and/or refinance existing indebtedness, and access to new capital and financing. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for the twelve months following the issuance of its financial statements for the year ended December 31, 2021. The Company’s ability to continue as a going concern is dependent upon its ability to utilize the resources in place to generate future profitable operations, to develop additional acquisition opportunities, and to obtain the necessary financing to meet its debt obligations and repay its liabilities arising from business operations when they come due. Management believes the Company will be able to continue to develop new opportunities and will be able to obtain additional funds through debt and / or equity financings to facilitate its development strategy; however, there is no assurance of additional funding being available. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence. During April 2021 the Company borrowed $2,500,000 from an Institutional Investor, and in July 2021 the Company sold 1,575 shares of Series C Preferred Stock to Antilles for s $15 million for working capital and new acquisitions. Management believes it will be able to continue to service its debt obligations, and obtain the financial resources to accomplish these objectives through both debt and equity raises as evidenced by historical results as well as those achieved after the current balance sheet date. Although the Company has been successful in obtaining the financial resources in the past, these conditions continue to raise substantial doubt regarding the Company’s ability to continue as a going concern. Therefore, the Company believes it appropriate to continue to include a going concern qualification in its financial statements.

LIQUIDITY AND GOING CONCERN CONSIDERATIONS

12 Months Ended

Dec. 31, 2021

LIQUIDITY AND GOING CONCERN CONSIDERATIONS

LIQUIDITY AND GOING CONCERN CONSIDERATIONS

NOTE 3 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS

The Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company generated a net loss of $169.7 million for the year ended December 31, 2021 (the “2021 Loss”) as compared to a net loss of $52.0 million for the nine-month period ended December 31, 2020. The 2021 Loss was comprised of certain non-cash items with a net impact of $163.8 million including: (i) a loss on changes in fair value of the derivative liability relating to the Series C Preferred Stock of $152.8 million; (ii) equity in loss of unconsolidated entity of $9.4 million (iii) and share based compensation of $1.6 million.

As of December 31, 2021, the Company had stockholders’ deficit of $71.8 million and total long-term debt of $21.5 million.

As of December 31, 2021, the Company has a working capital deficiency of approximately $90.7 million. The largest components of current liabilities creating this working capital deficiency was a derivative liability associated with our Series C Preferred Stock of $93.1 million.

Management believes it will be able to continue to leverage the expertise and relationships of its operational and technical teams to enhance existing assets and identify new development, drilling and acquisition opportunities in order to improve the Company’s financial position. The Company may have the ability, if it can raise additional capital, to acquire new assets in a separate division from existing subsidiaries.

Nonetheless, recent oil and gas price volatility as a result of geopolitical conditions and the global COVID-19 pandemic have already had and may continue to have a negative impact on the Company’s financial position and results of operations. Negative impacts could include but are not limited to: The Company’s ability to sell [its] oil and gas production, reduction in the selling price of the Company’s oil and gas, failure of a counterparty to make required hedge payments, possible disruption of production as a result of worker illness or mandated production shutdowns, the Company’s ability to maintain compliance with loan covenants and/or refinance existing indebtedness, and access to new capital and financing.

These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for the twelve months following the issuance of its financial statements for the year ended December 31, 2021. The Company’s ability to continue as a going concern is dependent upon its ability to utilize the resources in place to generate future profitable operations, to develop additional acquisition opportunities, and to obtain the necessary financing to meet its debt obligations and repay its liabilities arising from business operations when they come due. Management believes the Company will be able to continue to develop new opportunities and will be able to obtain additional funds through debt and / or equity financings to facilitate its development strategy; however, there is no assurance of additional funding being available. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

During April 2021 the Company borrowed $2,500,000 from an Institutional Investor, and in July 2021 the Company sold 1,575 shares of Series C Preferred Stock to Antilles for s $15 million for working capital and new acquisitions.

Management believes it will be able to continue to service its debt obligations, and obtain the financial resources to accomplish these objectives through both debt and equity raises as evidenced by historical results as well as those achieved after the current balance sheet date.

Although the Company has been successful in obtaining the financial resources in the past, these conditions continue to raise substantial doubt regarding the Company’s ability to continue as a going concern. Therefore, the Company believes it appropriate to continue to include a going concern qualification in its financial statements.