Note 3 - Acquisitions

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Acquisitions [Text Block]

NOTE

3.

Acquisitions

During the period from

August 22, 2020

to

September 30, 2020

and the period from

January 1, 2020

to

August 21, 2020,

the Company spent a total of

$704,000

and

$3.3

million, respectively, to acquire primarily undeveloped acreage,

three

vertical producing properties and

two

salt water disposal wells in and around the Company's existing properties for future exploration activities in the Midland Basin.

Grenadier Acquisition.

In

June 2019,

HighPeak Energy Assets II, LLC (“HighPeak Assets II”) signed a purchase and sale agreement with Grenadier to acquire substantially all the oil and gas assets of Grenadier, effective

June 1, 2019,

subject to certain customary closing adjustments for a total purchase price of

$615.0

million. Since HighPeak Assets II was contributed to the Predecessors in the HPK LP business combination discussed in Note

10,

this purchase and sale agreement became part of the Predecessors effective

October 1, 2019.

The Grenadier Acquisition was originally scheduled to close

no

later than

October 2019

but was extended twice to

May 2020.

In consideration for the initial extension, HPK LP: (i) released the then existing

$30.75

million deposit from escrow and (ii) paid directly to Grenadier an additional

$30.75

million and (iii) agreed to treat the collective sum as a nonrefundable deposit to Grenadier. In consideration for the

second

extension, HPK LP agreed to pay Grenadier an additional

$15.0

million that was also nonrefundable but, unlike the

$61.5

million deposit, was

not

to be credited toward the purchase price. The Grenadier Acquisition was terminated in

April 2020

and was

not

consummated. As such, a charge to expense of

$76.5

million was recognized in the

first

quarter of

2020.