| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. employer Identification No.) |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| |
|
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | |||
Non-Accelerated Filer |
☒ |
Smaller Reporting Company | ||||
| Emerging growth company | ||||||
Page |
||||
3 |
||||
4 |
||||
5 |
||||
6 |
||||
7-13 |
||||
14 |
||||
22 |
||||
22 |
||||
23 |
||||
23 |
||||
23 |
||||
23 |
||||
23 |
||||
23 |
||||
24 |
||||
26 |
||||
Item 1. |
FINANCIAL STATEMENTS |
September 30, 2021 |
December 31, 2020 |
|||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net |
||||||||
Prepaid obligations |
||||||||
Other current assets |
||||||||
Total Current Assets |
||||||||
Property and Equipment, at cost |
||||||||
Oil and gas properties (successful efforts method), net |
||||||||
Field and office equipment, net |
||||||||
Total Property and Equipment, Net |
||||||||
Other assets |
||||||||
Total Assets |
$ | $ | ||||||
LIABILITIES AND EQUITY |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued liabilities |
||||||||
Due to Related Parties |
||||||||
Current portion of long-term debt |
||||||||
Current portion of asset retirement and other long-term obligations |
||||||||
Derivative liability short-term |
||||||||
Total Current Liabilities |
||||||||
Long-Term Bank Debt |
||||||||
Asset Retirement Obligations |
||||||||
Derivative Liability Long-Term |
||||||||
Deferred Income Taxes |
||||||||
Other Long-Term Obligations |
||||||||
Total Liabilities |
||||||||
Commitments and Contingencies |
||||||||
Equity |
||||||||
Common stock, $. |
||||||||
Paid-in capital |
||||||||
Retained earnings |
||||||||
Treasury stock, at cost; |
( |
) | ( |
) | ||||
Total Stockholders’ Equity – PrimeEnergy Resources |
||||||||
Non-controlling interest |
||||||||
Total Equity |
||||||||
Total Liabilities and Equity |
$ | $ | ||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenues |
||||||||||||||||
Oil sales |
$ | $ | $ | $ | ||||||||||||
Natural gas sales |
||||||||||||||||
Natural gas liquids sales |
||||||||||||||||
Realized (loss) gain on derivative instruments, net |
( |
) | ( |
) | ||||||||||||
Field service income |
||||||||||||||||
Administrative overhead fees |
||||||||||||||||
Unrealized (loss) on derivative instruments, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income |
||||||||||||||||
Total Revenues |
||||||||||||||||
Costs and Expenses |
||||||||||||||||
Lease operating expense |
||||||||||||||||
Field service expense |
||||||||||||||||
Depreciation, depletion, amortization and accretion on discounted liabilities |
||||||||||||||||
General and administrative expense |
||||||||||||||||
Total Costs and Expenses |
||||||||||||||||
Gain on Sale and Exchange of Assets |
||||||||||||||||
(Loss) Income from Operations |
( |
) | ( |
) | ( |
) | ||||||||||
Other Income (Expense) |
||||||||||||||||
Interest Income |
— | — | ||||||||||||||
Interest Expense |
( |
) | ( |
) | ( |
( |
) | |||||||||
(Loss) Income Before Income Taxes |
( |
) | ( |
) | ( |
) | ||||||||||
Income Taxes Expense (Benefit) |
( |
) | ( |
) | ( |
) | ||||||||||
Net (Loss) Income |
( |
) | ( |
) | ( |
) | ||||||||||
Less: Net Income (Loss) Attributable to Non-Controlling Interests |
( |
) | ||||||||||||||
Net (Loss) Income Attributable to PrimeEnergy |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Basic (Loss) Income Per Common Share |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Diluted (Loss) Income Per Common Share |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Common Stock |
||||||||||||||||||||||||||||||||
Shares |
Amount |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Total Stockholders’ Equity – PrimeEnergy |
Non- Controlling Interest |
Total Equity |
|||||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||
Net Income (Loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Purchase of non- controlling interest |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||||
Balance at September 30, 2021 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||
Purchase |
( |
) | — | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||||
Net Income (Loss) |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||
Balance at September 30, 2020 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||
2021 |
2020 |
|||||||
| Cash Flows from Operating Activities: |
||||||||
| Net (Loss) |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
| Depreciation, depletion, amortization and accretion on discounted liabilities |
||||||||
| Gain on sale of properties |
( |
) | ( |
) | ||||
| Unrealized loss (gain) on derivative instruments, net |
( |
) | ||||||
| Provision for deferred income taxes |
( |
) | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
( |
) | ||||||
| Due to related parties |
( |
) | — | |||||
| Other assets |
( |
) | ||||||
| Accounts payable |
( |
) | ||||||
| Accrued liabilities |
( |
) | ||||||
| |
|
|
|
|||||
| Net Cash Provided by Operating Activities |
||||||||
| |
|
|
|
|||||
| Cash Flows from Investing Activities: |
||||||||
| Capital expenditures |
( |
) | ( |
) | ||||
| Proceeds from sale of properties and equipment |
||||||||
| |
|
|
|
|||||
| Net Cash (Used in) Investing Activities |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Cash Flows from Financing Activities: |
||||||||
| Purchase of stock for treasury |
— | ( |
) | |||||
| Purchase of non-controlling interests |
( |
) | ||||||
| Proceeds from long-term bank debt and other long-term obligations |
||||||||
| Repayment of long-term bank debt and other long-term obligations |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Net Cash (Used in) Financing Activities |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Net Increase in Cash and Cash Equivalents |
||||||||
| Cash and Cash Equivalents at the Beginning of the Period |
||||||||
| |
|
|
|
|||||
| Cash and Cash Equivalents at the End of the Period |
$ | $ | ||||||
| |
|
|
|
|||||
| Supplemental Disclosures: |
||||||||
| Income taxes paid |
$ | $ | ||||||
| Interest paid |
$ | $ | ||||||
| |
|
|
|
|||||
(Thousands of dollars) |
September, 30, 2021 |
December 31, 2020 |
||||||
| Accounts Receivable: |
||||||||
| Joint interest billing |
$ | $ | ||||||
| Trade receivables |
||||||||
| Oil and gas sales |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| Less: Allowance for doubtful accounts |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| Accounts Payable: |
||||||||
| Trade |
$ | $ | ||||||
| Royalty and other owners |
||||||||
| Partner advances |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| Accrued Liabilities: |
||||||||
| Compensation and related expenses |
$ | $ | ||||||
| Property costs |
||||||||
| Taxes |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
(Thousands of dollars) |
September 30, |
December 31, 2020 |
||||||
Proved oil and gas properties, at cost |
$ | $ | ||||||
Less: Accumulated depletion and depreciation |
( |
) | ( |
) | ||||
Oil and Gas Properties, Net |
$ | $ | ||||||
Field and office equipment |
$ | $ | ||||||
Less: Accumulated depreciation |
( |
) | ( |
) | ||||
Field and Office Equipment, Net |
$ | $ | ||||||
Total Property and Equipment, Net |
$ | $ | ||||||
(Thousands of dollars) |
Operating Leases |
|||
2021 |
$ | |||
2022 |
||||
2023 |
||||
Total undiscounted lease payments |
$ | |||
Less: Amount associated with discounting |
( |
) | ||
Net operating lease liabilities |
$ | |||
(Thousands of dollars) |
September 30, |
|||
Asset retirement obligation at December 31, 2020 |
$ | |||
Liabilities incurred |
||||
Liabilities settled |
( |
) | ||
Accretion expense |
||||
Asset retirement obligation at September 30, 2021 |
$ | |||
September 30, 2021 |
Quoted Prices in Active Markets For Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Balance at September 30, 2021 |
||||||||||||
(Thousands of dollars) |
||||||||||||||||
Liabilities |
||||||||||||||||
Commodity derivative contracts |
$ | — | $ | — | $ | ( |
) | $ | ( |
) | ||||||
Total liabilities |
$ | — | $ | — | $ | ( |
) | $ | ( |
) | ||||||
December 31, 2020 |
Quoted Prices in Active Markets For Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Balance at December 31, 2020 |
||||||||||||
(Thousands of dollars) |
||||||||||||||||
Assets |
||||||||||||||||
Commodity derivative contracts |
$ | — | $ | — | $ | $ | ||||||||||
Total assets |
$ | — | $ | — | $ | $ | ||||||||||
Liabilities |
||||||||||||||||
Commodity derivative contract |
$ | — | $ | — | $ | ( |
) | $ | ( |
) | ||||||
Total liabilities |
$ | — | $ | — | $ | ( |
) | $ | ( |
) | ||||||
(Thousands of dollars) |
||||
Net Liabilities – December 31, 2020 |
$ | ( |
) | |
Total realized and unrealized (gains) losses: |
||||
Included in earnings (a) |
( |
) | ||
Purchases, sales, issuances and settlements |
||||
Net Liabilities — September 30, 2021 |
$ | ( |
) | |
| (a) | Derivative instruments are reported in revenues as realized gain/loss and on a separately reported line item captioned unrealized gain/loss on derivative instruments. |
Fair Value |
||||||||||
(Thousands of dollars) |
Balance Sheet Location |
September 30, |
December 31, 2020 |
|||||||
Asset Derivatives: |
||||||||||
Derivatives not designated as cash-flow hedging instruments: |
||||||||||
Natural gas commodity contracts |
Derivative asset long-term and other assets |
— | $ | |||||||
Total |
$ | — | $ | |||||||
Liability Derivatives: |
||||||||||
Derivatives not designated as cash-flow hedging instruments: |
||||||||||
Crude oil commodity contracts |
Derivative liability short-term | $ | ( |
) | $ | ( |
) | |||
Natural gas commodity contracts |
Derivative liability short-term | ( |
) | ( |
) | |||||
Crude oil commodity contracts |
Derivative liability long-term | ( |
) | — | ||||||
Natural gas commodity contracts |
Derivative liability long-term | ( |
) | ( |
) | |||||
Total |
$ | ( |
) | $ | ( |
) | ||||
Total derivative instruments |
$ | ( |
) | $ | ( |
) | ||||
Amount of gain/loss recognized in income |
||||||||||
(Thousands of dollars) |
Location of gain/loss recognized in income |
2021 |
2020 |
|||||||
Derivatives not designated as cash-flow hedge instruments: |
||||||||||
Natural gas commodity contracts |
Unrealized |
( |
) | ( |
) | |||||
Crude oil commodity contracts |
Unrealized |
( |
) | |||||||
Natural gas commodity contracts |
Realized gain (loss) on derivative instruments, net |
( |
) | |||||||
Crude oil commodity contracts |
Realized (loss) on derivative instruments, net |
( |
) | |||||||
| $ | ( |
$ | ||||||||
Nine Months Ended September 30, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Net Loss (In000’s) |
Weighted Average Number of Shares Outstanding |
Per Share Amount |
Net Income (In 000’s) |
Weighted Average Number of Shares Outstanding |
Per Share Amount |
|||||||||||||||||||
Basic |
$ | ( |
) | $ | ( |
$ | $ | |||||||||||||||||
Effect of dilutive securities: |
||||||||||||||||||||||||
Options (a) |
||||||||||||||||||||||||
Diluted |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||
Three Months Ended September 30, |
||||||||||||||||||||||||
2021 |
2020 |
|||||||||||||||||||||||
Net Loss (In 000’s) |
Weighted Average Number of Shares Outstanding |
Per Share Amount |
Net Income (In 000’s) |
Weighted Average Number of Shares Outstanding |
Per Share Amount |
|||||||||||||||||||
Basic |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||
Effect of dilutive securities: |
||||||||||||||||||||||||
Options (a) |
— | |||||||||||||||||||||||
Diluted |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||
| (a) | The effect of the outstanding stock options is antidilutive for the nine and three months ended September 30, 2021 due to net loss for these periods. |
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Gulf Coast |
Mid- Continent |
West Texas |
Other |
Total |
||||||||||||||||
| Proved Reserves as of December 31, 2020 (MBoe) |
||||||||||||||||||||
| Developed |
517 | 1,575 | 5,116 | 6 | 7,214 | |||||||||||||||
| Undeveloped |
— | 95 | 3,126 | — | 3,221 | |||||||||||||||
| Total |
517 | 1,670 | 8,242 | 6 | 10,435 | |||||||||||||||
| Average Daily Production (Boe per day) |
297 | 788 | 3,178 | 2 | 4,265 | |||||||||||||||
| Gross Productive Wells (Working Interest and ORRI Wells) |
239 | 549 | 556 | 170 | 1,514 | |||||||||||||||
| Gross Productive Wells (Working Interest Only) |
209 | 485 | 518 | 69 | 1,281 | |||||||||||||||
| Net Productive Wells (Working Interest Only) |
124 | 217 | 263 | 2 | 606 | |||||||||||||||
| Gross Operated Productive Wells |
158 | 209 | 325 | — | 692 | |||||||||||||||
| Gross Operated Water Disposal, Injection and Supply wells |
9 | 53 | 6 | — | 68 | |||||||||||||||
Reserve Category |
||||||||||||||||||||||||||||||||||||||||||||||||
Proved Developed |
Proved Undeveloped |
Total |
||||||||||||||||||||||||||||||||||||||||||||||
| As of December 31, |
Oil (MBbls) |
NGLs (MBbls) |
Gas (MMcf) |
Total (MBoe) |
Oil (MBbls) |
NGLs (MBbls) |
Gas (MMcf) |
Total (MBoe) |
Oil (MBbls) |
NGLs (MBbls) |
Gas (MMcf) |
Total (MBoe) |
||||||||||||||||||||||||||||||||||||
| 2018 |
6,404 | 2,707 | 21,065 | 12,622 | 10 | 12 | 124 | 43 | 6,414 | 2,719 | 21,189 | 12,665 | ||||||||||||||||||||||||||||||||||||
| 2019 |
4,381 | 2,914 | 19,995 | 10,268 | 1,833 | 1,017 | 4,547 | 3,608 | 6,214 | 3,931 | 24,542 | 14,235 | ||||||||||||||||||||||||||||||||||||
| 2020 |
2,684 | 2,258 | 13,633 | 7,214 | 1,784 | 787 | 3,897 | 3,221 | 4,468 | 3,045 | 17,530 | 10,435 | ||||||||||||||||||||||||||||||||||||
| (a) | In computing total reserves on a barrel of oil equivalent (Boe) basis, gas is converted to oil based on its relative energy content at the rate of six Mcf of gas to one barrel of oil, and NGLs are converted based upon volume; one barrel of natural gas liquids equals one barrel of oil. |
Proved Developed |
Proved Undeveloped |
Total |
||||||||||||||||||||||||||||||
| As of December 31, |
Future Net Revenue |
Present Value 10 Of Future Net Revenue |
Future Net Revenue |
Present Value 10 Of Future Net Revenue |
Future Net Revenue |
Present Value 10 Of Future Net Revenue |
Present Value 10 Of Future Income Taxes |
Standardized Measure of Discounted Cash flow |
||||||||||||||||||||||||
| 2018 | $ | 239,337 | $ | 161,376 | $ | 767 | $ | 525 | $ | 240,104 | $ | 161,901 | $ | 23,992 | $ | 137,909 | ||||||||||||||||
| 2019 | $ | 116,592 | $ | 82,155 | $ | 42,700 | $ | 17,876 | $ | 159,292 | $ | 100,031 | $ | 18,419 | $ | 81,612 | ||||||||||||||||
| 2020 | $ | 43,886 | $ | 34,717 | $ | 37,346 | $ | 21,823 | $ | 81,232 | $ | 56,539 | $ | 14,920 | $ | 41,619 | ||||||||||||||||
2021 |
2022 |
2023 |
2021 |
2022 |
2023 |
|||||||||||||||||||
| Swap Agreements |
||||||||||||||||||||||||
| Natural Gas (MMBTU) |
268,000 | 928,000 | 131,000 | $ | 2.48 | $ | 2.67 | $ | 2.81 | |||||||||||||||
| Oil (barrels) |
133,500 | 196,200 | 27,200 | $ | 53.60 | $ | 51.99 | $ | 50.31 | |||||||||||||||
Nine months ended September 30, |
||||||||||||||||
2021 |
2020 |
Increase / (Decrease) |
Increase / (Decrease) |
|||||||||||||
| Barrels of Oil Produced |
480,000 | 538,000 | (58,000 | ) | (10.80 | )% | ||||||||||
| Average Price Received |
$ | 63.28 | $ | 38.41 | $ | 24.88 | 64.8 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Oil Revenue (In 000’s) |
$ | 30,376 | $ | 20,663 | $ | 9,713 | 47.0 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Mcf of Gas Sold |
2,395,000 | 2,038,000 | 357,000 | 17.5 | % | |||||||||||
| Average Price Received |
$ | 3.32 | $ | 1.20 | $ | 2.12 | 177.1 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Gas Revenue (In 000’s) |
$ | 7,948 | $ | 2,441 | $ | 5,507 | 225.6 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Barrels of Natural Gas Liquids Sold |
298,000 | 319,000 | (21,000 | ) | (6.60 | )% | ||||||||||
| Average Price Received |
$ | 26.11 | $ | 10.07 | $ | 16.04 | 159.3 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Natural Gas Liquids Revenue (In 000’s) |
$ | 7,781 | $ | 3,212 | $ | 4,569 | 142.2 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Total Oil & Gas Revenue (In 000’s) |
$ | 46,105 | $ | 26,316 | $ | 19,789 | 75.2 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
Three months ended September 30, |
||||||||||||||||
2021 |
2020 |
Increase / (Decrease) |
Increase / (Decrease) |
|||||||||||||
| Barrels of Oil Produced |
152,000 | 160,000 | (8,000 | ) | (5.0 | )% | ||||||||||
| Average Price Received |
$ | 68.70 | $ | 39.62 | $ | 29.08 | 73.4 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Oil Revenue (In 000’s) |
$ | 10.442 | $ | 6,339 | $ | 4,103 | 64.7 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Mcf of Gas Sold |
950,000 | 496,000 | 454,000 | 91.5 | % | |||||||||||
| Average Price Received |
$ | 4.21 | $ | 2.12 | $ | 2.09 | 98.5 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Gas Revenue (In 000’s) |
$ | 3,998 | $ | 1,052 | $ | 2,946 | 280.0 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Barrels of Natural Gas Liquids Sold |
103,000 | 106,000 | (3,000 | ) | (2.80 | )% | ||||||||||
| Average Price Received |
$ | 35.26 | $ | 13.91 | $ | 21.35 | 153.5 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Natural Gas Liquids Revenue (In 000’s) |
$ | 3,632 | $ | 1,474 | $ | 2,158 | 146.4 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
| Total Oil & Gas Revenue (In 000’s) |
$ | 18,072 | $ | 8,865 | $ | 9,207 | 103.9 | % | ||||||||
| |
|
|
|
|
|
|||||||||||
Item 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4. |
CONTROLS AND PROCEDURES |
Item 1. |
LEGAL PROCEEDINGS |
Item 1A. |
RISK FACTORS |
Item 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
| 2021 Month |
Number of shares |
Average price paid per share |
Maximum number of shares that may yet be purchased under the program at month end (1) |
|||||||||
| January |
1— | $ | — | 147,921 | ||||||||
| February |
— | $ | — | 147,921 | ||||||||
| March |
— | $ | — | 147,921 | ||||||||
| April |
— | $ | — | 147,921 | ||||||||
| May |
— | $ | — | 147,921 | ||||||||
| June |
— | $ | — | 147,921 | ||||||||
| July |
— | $ | — | 147,921 | ||||||||
| August |
— | $ | — | 147,921 | ||||||||
| September |
— | $ | — | 147,021 | ||||||||
| |
|
|
|
|||||||||
| Total/Average |
$ | |||||||||||
(1) |
In December 1993, we announced that the Board of Directors authorized a stock repurchase program whereby we may purchase outstanding shares of the common stock from time-to-time, |
Item 3. |
DEFAULTS UPON SENIOR SECURITIES |
Item 4. |
RESERVED |
Item 5. |
OTHER INFORMATION |
Item 6. |
EXHIBITS |
PRIMEENERGY RESOURCES CORPORATION | ||||||
| Dated: November 19, 2021 |
By: |
/s/ Charles E. Drimal, Jr. | ||||
| Charles E. Drimal, Jr. | ||||||
| Chairman, President | ||||||
EXHIBIT 31.1
CERTIFICATIONS
I, Charles E. Drimal, Jr., Chief Executive Officer of PrimeEnergy Resources Corporation, certify that:
| 1. | I have reviewed this Form 10-Q for the quarter ended September 30, 2021 of PrimeEnergy Resources Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
November 19, 2021
| /s/ Charles E. Drimal, Jr. |
| Charles E. Drimal, Jr. |
| Chief Executive Officer |
| PrimeEnergy Resources Corporation |
EXHIBIT 31.2
CERTIFICATIONS
I, Beverly A. Cummings, Chief Financial Officer of PrimeEnergy Resources Corporation, certify that:
| 1. | I have reviewed this Form 10-Q for the quarter ended September 30, 2021 of PrimeEnergy Resources Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
November 19, 2021
| /s/ Beverly A. Cummings |
| Beverly A. Cummings |
| Chief Financial Officer |
| PrimeEnergy Resources Corporation |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of PrimeEnergy Resources Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles E. Drimal Jr., Chief Executive Officer of PrimeEnergy Resources Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| /s/ Charles E. Drimal, Jr. |
| Charles E. Drimal, Jr. |
| Chief Executive Officer |
| November 19, 2021 |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of PrimeEnergy Resources Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Beverly A. Cummings, Chief Financial Officer of PrimeEnergy Resources Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| /s/ Beverly A. Cummings |
| Beverly A. Cummings |
| Chief Financial Officer |
| November 19, 2021 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock, par value | $ 10 | $ 10 |
| Common stock, shares authorized | 2,810,000 | 2,810,000 |
| Common stock, shares outstanding | 1,994,177 | 1,994,177 |
| Treasury stock, shares | 815,823 | 815,823 |
Condensed Consolidated Statement of Equity - USD ($) $ in Thousands |
Total |
Common Stock [Member] |
Additional Paid in capital |
Retained Earnings [Member] |
Treasury Stock [Member] |
Total Stockholders' Equity – PrimeEnergy [Member] |
Non-Controlling Interest [Member] |
Shares Outstanding [Member] |
|---|---|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2019 | $ 103,363 | $ 281 | $ 7,505 | $ 129,120 | $ (36,792) | $ 100,114 | $ 3,249 | |
| Balance, shares at Dec. 31, 2019 | 1,998,978 | |||||||
| Purchase of common stock | (709) | (709) | (709) | |||||
| Purchase of common stock, shares | (4,801) | |||||||
| Net Income (Loss) | (46) | 65 | 65 | (111) | ||||
| Balance at Sep. 30, 2020 | 102,608 | 281 | 7,505 | 129,185 | (37,501) | 99,470 | 3,138 | |
| Balance, shares at Sep. 30, 2020 | 1,994,177 | |||||||
| Balance at Dec. 31, 2020 | 97,998 | 281 | 7,541 | 126,804 | (37,502) | 97,124 | 874 | |
| Balance, shares at Dec. 31, 2020 | 1,994,177 | |||||||
| Net Income (Loss) | (5,017) | (5,021) | (5,021) | 4 | ||||
| Purchase of Non- controlling Interest | (6) | 19 | 19 | (25) | ||||
| Balance at Sep. 30, 2021 | $ 92,975 | $ 281 | $ 7,560 | $ 121,783 | $ (37,502) | $ 92,122 | $ 853 | |
| Balance, shares at Sep. 30, 2021 | 1,994,177 |
Condensed Consolidated Statement of Equity (Parenthetical) |
9 Months Ended |
|---|---|
|
Sep. 30, 2020
shares
| |
| Treasury Stock [Member] | |
| Purchase of common stock, shares | 4,801 |
| Total Stockholders' Equity – PrimeEnergy [Member] | |
| Purchase of common stock, shares | 4,801 |
Basis of Presentation |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Basis of Presentation | (1) Basis of Presentation: The accompanying condensed consolidated financial statements of PrimeEnergy Resources Corporation (“PrimeEnergy” or the “Company”) have not been audited by independent public accountants. Pursuant to applicable Securities and Exchange Commission (“SEC”) rules and regulations, the accompanying interim financial statements do not include all disclosures presented in annual financial statements and the reader should refer to the Company’s Form 10-K for the year ended December 31, 2020. In the opinion of management, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, the condensed consolidated results of operations, cash flows and equity for the nine months ended September 30, 2021 and 2020. As of September 30, 2021, PrimeEnergy’s significant accounting policies are consistent with those discussed in Note 1—Description of Operations and Significant Accounting Policies of its consolidated financial statements contained in PrimeEnergy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Certain amounts presented in prior period financial statements have been reclassified for consistency with current period presentation. The results for interim periods are not necessarily indicative of annual results. For purposes of disclosure in the condensed consolidated financial statements, subsequent events have been evaluated through the date the statements were issued. |
Acquisitions and Dispositions |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Business Combinations [Abstract] | |
| Acquisitions and Dispositions | (2) Acquisitions and Dispositions: Historically the Company has repurchased the interests of the partners and trust unit holders in the oil and gas limited partnerships (the “Partnerships”) and the asset and business income trusts (the “Trusts”) managed by the Company as general partner and as managing trustee, respectively. The Company repurchased $6,000 of such non-controlling |
Additional Balance Sheet Information |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Additional Balance Sheet Information | (3) Additional Balance Sheet Information: Certain balance sheet amounts are comprised of the following:
|
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Property and Equipment |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment | (4) Property and Equipment: Property and equipment at September 30, 2021 and December 31, 2020 consisted of the following:
|
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Long-Term Debt |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Debt Disclosure [Abstract] | |
| Long-Term Debt | (5) Long-Term Debt: Bank Debt: On February 15, 2017, the Company and its lenders entered into a Third Amended and Restated Credit Agreement (the “2017 Credit Agreement”) with a maturity date of February 15, 2021. Under the 2017 Credit Agreement, the Company has a revolving line of credit and letter of credit facility of up to $300 million subject to a borrowing base that is determined semi-annually by the lenders based upon the Company’s financial statements and the estimated value of the Company’s oil and gas properties, in accordance with the Lenders’ customary practices for oil and gas loans. The credit facility is secured by substantially all of the Company’s oil and gas properties. The 2017 Credit Agreement includes terms and covenants that require the Company to maintain a minimum current ratio and total indebtedness to EBITDAX (earnings before depreciation, depletion, amortization, taxes, interest expense and exploration costs) ratio, as defined, and restrictions are placed on the payment of dividends, the amount of treasury stock the Company may purchase, commodity hedge agreements, and loans and investments in its consolidated subsidiaries and limited partnerships. During 2020, the 2017 Credit Agreement was amended to add loans under the Paycheck Protection Program to the Permitted loans, as defined in the agreement. On February 11, 2021, the Company and its lenders entered into a Sixth Amendment to the 2017 Credit Agreement. Under this amendment the Company’s borrowing base is $40 million. Borrowings under the 2017 Credit Agreement will bear interest at a base rate plus an applicable margin ranging from 2.00% to 3.00% or at the Company’s option, at LIBOR plus an applicable margin ranging from 3.00% to 4.00%. The 2017 Credit Agreement will mature on February 11, 2023. The Company’s borrowings under this credit facility approximates fair value because the interest rates are variable and reflective of market rates. On September 30, 2021, the Company had a total of $31.5 million of borrowings outstanding under its revolving credit facility at a weighted-average interest rate of 5.35% and $ 8.5 million was available for future borrowings. The combined weighted average interest rate paid on outstanding bank borrowings subject to base rate and LIBO interest was 5.31% for thenine months ended September 30, 2021 as compared to 3.94% for nine months ended September 30, 2020. Paycheck Protection Program Loans During May 2020, Prime Operating Company and Eastern Oil Well Services Corporation, subsidiaries of the Company received loan proceeds in the amount of $1.28 million and $0.47 million, respectively, under the Paycheck Protection Program (the “PPP”) of the CARES Act, which was enacted March 27, 2020. The PPP Loans are evidenced by a promissory note in favor of the Lender, which bears interest at the rate of 1.00% per annum. No payments of principal or interest are due under the note until the date on which the amount of loan forgiveness (if any) under the CARES Act, which can be up to 10 months after the end of the related notes covered period (which is defined as 24 weeks after the date of the loan) (the “Deferral Period”). The note may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the PPP Loans may be used only for payroll and related costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations that were incurred prior to February 15, 2020 (the “Qualifying Expenses”). Under the terms of the PPP Loans, certain amounts thereunder may be forgiven if they are used for Qualifying Expenses as described in and in compliance with the CARES Act. The Company utilized the PPP Loan proceeds exclusively for Qualifying Expenses during the 24-week coverage period and has submitted its application for forgiveness in accordance with the terms of the CARES Act and related guidance. In the event the PPP Loan or any portion thereof is forgiven, the amount forgiven is applied to the outstanding principal. To the extent, if any, that any or all of the PPP loans are not forgiven, beginning one month following expi ration of the Deferral Period, and continuing monthly until 24 months from the date of each applicable Note (the “Maturity Date”), the Company is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Note, in such equal amounts required to fully amortize the principal amount outstanding on such Note as of the last day of the applicable Deferral Period by the applicable Maturity Date. The Company accounts for these loans on the balance sheet as financial liabilities reported within the following lines: Current portion of long-term debt in the amount of $ million and included as part of the long-term bank debt in the amount of $323 thousand. |
Other Long-Term Obligations and Commitments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Long-Term Obligations and Commitments | (6) Other Long-Term Obligations and Commitments: Operating Leases: The Company leases office facilities under operating leases and recognizes lease expense on a straight-line basis over the lease term. Leases assets and liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term. A new finance lease for office equipment is included in property and equipment, other current liabilities and other long-term liabilities this quarter. As most of the Company’s lease contracts do not provide an implicit discount rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate used was 5.5%. Certain leases may contain variable costs above the minimum required payments and are not included in the right-of-use Operating lease costs for the nine months ended September 30, 2021 were . Cash payments included in the operating lease cost for nine months ended September 30, 2021 were $433,000. The weighted-average remaining operating lease terms is 11.5 months.The Company amended certain leases for office space in Texas providing for payments of $299,000 in 2021, $158,000 in 2022 and $17,000 in 2023. Rent expense for office space for the nine months ended September 30, 2021 and 2020 was $441,000 and $496,000, respectively. The payment schedule for the Company’s operating lease obligations as of September 30, 2021 is as follows:
Asset Retirement Obligation: A reconciliation of the liability for plugging and abandonment costs for the nine months ended September 30, 2021 is as follows:
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Contingent Liabilities |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Contingent Liabilities | (7) Contingent Liabilities: The Company, as managing general partner of the affiliated Partnerships, is responsible for all Partnership activities, including the drilling of development wells and the production and sale of oil and gas from productive wells. The Company also provides the administration, accounting and tax preparation work for the Partnerships, and is liable for all debts and liabilities of the affiliated Partnerships, to the extent that the assets of a given limited Partnership are not sufficient to satisfy its obligations. The Company is subject to environmental laws and regulations. Management believes that future expenses, before recoveries from third parties, if any, will not have a material effect on the Company’s financial condition. This opinion is based on expenses incurred to date for remediation and compliance with laws and regulations, which have not been material to the Company’s results of operations. From time to time, the Company is party to certain legal actions arising in the ordinary course of business. While the outcome of these events cannot be predicted with certainty, management does not expect these matters to have a materially adverse effect on the financial position or results of operations of the Company. |
Stock Options and Other Compensation |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
| Stock Options and Other Compensation | (8) Stock Options and Other Compensation: In May 1989,
non-statutory stock options were granted by the Company to four key executive officers for the purchase of shares of common stock. At September 30, 2021 and 2020, remaining options held by two key executive officers on 767,500 shares were outstanding and exercisable at prices ranging from $1.00 to $1.25. According to their terms, the options have no expiration date. |
Related Party Transactions |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | (9) Related Party Transactions: The Company, as managing general partner or managing trustee, makes an annual offer to repurchase the interests of the partners and trust unit holders in certain of the Partnerships or Trusts. The Company repurchased $6,000 of such non-controlling |
Financial Instruments |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments | (10) Financial Instruments Fair Value Measurements: Authoritative guidance on fair value measurements defines fair value, establishes a framework for measuring fair value and stipulates the related disclosure requirements. The Company follows a three-level hierarchy, prioritizing and defining the types of inputs used to measure fair value. The fair values of the Company’s interest rate swaps, natural gas and crude oil price collars and swaps are designated as Level 3. The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020:
The derivative contracts were measured based on quotes from the Company’s counterparties. Such quotes have been derived using valuation models that consider various inputs including current market and contractual prices for the underlying instruments, quoted forward prices for natural gas and crude oil, volatility factors and interest rates, such as a LIBOR curve for a similar length of time as the derivative contract term as applicable. These estimates are verified using comparable NYMEX futures contracts or are compared to multiple quotes obtained from counterparties for reasonableness. The significant unobservable inputs for Level 3 derivative contracts include basis differentials and volatility factors. An increase (decrease) in these unobservable inputs would result in an increase (decrease) in fair value, respectively. The Company does not have access to the specific assumptions used in its counterparties’ valuation models. Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided. The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the quarter ended September 30, 2021.
Derivative Instruments: The Company is exposed to commodity price and interest rate risk, and management considers periodically the Company’s exposure to cash flow variability resulting from the commodity price changes and interest rate fluctuations. Futures, swaps and options are used to manage the Company’s exposure to commodity price risk inherent in the Company’s oil and gas production operations. The Company does not apply hedge accounting to any of its commodity-based derivatives. Both realized and unrealized gains and losses associated with commodity derivative instruments are recognized in earnings. The following table sets forth the effect of derivative instruments on the consolidated balance sheets at September 30, 2021 and December 31, 2020:
The following table sets forth the effect of derivative instruments on the consolidated statements of operations for the nine months ended September 30, 2021 and 2020:
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Earnings Per Share |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | (11) Earnings Per Share: Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if dilutive potential common stock had been converted to common stock in gain periods. The following reconciles amounts reported in the financial statements:
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Additional Balance Sheet Information (Tables) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Balance Sheet Amounts | Certain balance sheet amounts are comprised of the following:
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Property and Equipment (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and equipment | Property and equipment at September 30, 2021 and December 31, 2020 consisted of the following:
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Other Long-Term Obligations and Commitments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Future Minimum Lease Payments for Non-Cancelable Operating Leases | The payment schedule for the Company’s operating lease obligations as of September 30, 2021 is as follows:
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| Reconciliation of Liability for Plugging and Abandonment Costs | A reconciliation of the liability for plugging and abandonment costs for the nine months ended September 30, 2021 is as follows:
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Financial Instruments (Tables) |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020:
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| Schedule of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3 | The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the quarter ended September 30, 2021.
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| Effect of Derivative Instruments on Consolidated Balance Sheets | The following table sets forth the effect of derivative instruments on the consolidated balance sheets at September 30, 2021 and December 31, 2020:
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| Effect of Derivative Instruments on Consolidated Statements of Operations | The following table sets forth the effect of derivative instruments on the consolidated statements of operations for the nine months ended September 30, 2021 and 2020:
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Computation of Basic and Diluted Earnings (Loss) per Share | The following reconciles amounts reported in the financial statements:
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Acquisitions and Dispositions - Additional Information (Detail) |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| Business Acquisition [Line Items] | |
| Purchase of non-controlling interests | $ 6,000 |
| Non-Controlling Interest [Member] | |
| Business Acquisition [Line Items] | |
| Purchase of non-controlling interests | 25,000 |
| Partnership And Trust [Member] | |
| Business Acquisition [Line Items] | |
| Purchase of non-controlling interests | 6,000 |
| Partnership And Trust [Member] | Non-Controlling Interest [Member] | |
| Business Acquisition [Line Items] | |
| Purchase of non-controlling interests | $ 6,000 |
Additional Balance Sheet Information - Components of Balance Sheet Amounts (Detail) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Accounts Receivable: | ||
| Joint interest billing | $ 2,589 | $ 2,475 |
| Trade receivables | 1,866 | 1,073 |
| Oil and gas sales | 10,084 | 3,469 |
| Other | 400 | 802 |
| Accounts Receivable, Gross | 14,939 | 7,819 |
| Less: Allowance for doubtful accounts | (598) | (598) |
| Total | 14,341 | 7,221 |
| Accounts Payable: | ||
| Trade | 7,011 | 876 |
| Royalty and other owners | 3,724 | 3,569 |
| Partner advances | 223 | 193 |
| Other | 429 | 579 |
| Total | 11,387 | 5,217 |
| Accrued Liabilities: | ||
| Compensation and related expenses | 3,259 | 3,331 |
| Property costs | 2,533 | 2,056 |
| Taxes | 866 | 1,016 |
| Other | 238 | 384 |
| Total | $ 6,896 | $ 6,787 |
Property and Equipment - Components of Property and Equipment (Detail) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Property, Plant and Equipment [Abstract] | ||
| Proved oil and gas properties, at cost | $ 531,475 | $ 520,488 |
| Less: Accumulated depletion and depreciation | (354,978) | (335,390) |
| Oil and gas properties, net | 176,497 | 185,098 |
| Field and office equipment | 27,018 | 26,797 |
| Less: Accumulated depreciation | (21,244) | (20,842) |
| Field and office equipment, net | 5,774 | 5,955 |
| Total Property and Equipment, Net | $ 182,271 | $ 191,053 |
Other Long-Term Obligations and Commitments - Additional Information (Detail) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Lease period description | The Company leases office facilities under operating leases and recognizes lease expense on a straight-line basis over the lease term. Leases assets and liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term. | |
| Rent expense for office space | $ 441,000 | $ 496,000 |
| Lease Payments With in One Year | 299,000 | |
| Lease payments due next year | 158,000 | |
| Lease payments due next two years | $ 17,000 | |
| Weighted-average discount rate | 5.50% | |
| Operating lease weighted-average remaining lease term | 11 months 15 days | |
| Operating lease payments | $ 433,000,000 | |
| Operating lease cost | $ 450,000,000 | |
Other Long-Term Obligations and Commitments - Summary of Operating and Financing Lease Obligation (Detail) |
Sep. 30, 2021
USD ($)
|
|---|---|
| Commitments and Contingencies Disclosure [Abstract] | |
| 2021 | $ 144,000 |
| 2022 | 158,000 |
| 2023 | 17,000 |
| Total undiscounted lease payments | 319,000 |
| Less: Amount associated with discounting | (11,000) |
| Net operating lease liabilities | $ 308,000 |
Other Long-Term Obligations and Commitments - Reconciliation of Liability for Plugging and Abandonment Costs (Detail) $ in Thousands |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| Commitments and Contingencies Disclosure [Abstract] | |
| Asset retirement obligation | $ 13,660 |
| Liabilities incurred | 721 |
| Liabilities settled | (1,047) |
| Accretion expense | 487 |
| Asset retirement obligation | $ 13,821 |
Stock Options and Other Compensation - Additional Information (Detail) |
Sep. 30, 2021
$ / shares
shares
|
Sep. 30, 2020
$ / shares
shares
|
May 31, 1989
Officers
|
|---|---|---|---|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Options outstanding, shares | shares | 767,500 | 767,500 | |
| Number of key executive officers to whom non-statutory stock options granted | Officers | 4 | ||
| Minimum [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Average exercise price | $ / shares | $ 1.00 | $ 1.00 | |
| Maximum [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Average exercise price | $ / shares | $ 1.25 | $ 1.25 | |
| Nonstatutory Stock Options [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Options exercisable, shares | shares | 767,500 | 767,500 |
Related Party Transactions - Additional Information (Detail) |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| Related Party Transaction [Line Items] | |
| Purchase of non-controlling interests | $ 6,000 |
| Partnership And Trust [Member] | |
| Related Party Transaction [Line Items] | |
| Purchase of non-controlling interests | $ 6,000 |
Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Assets | ||
| Derivative assets | $ 97 | |
| Liabilities | ||
| Derivative liabilities | $ (7,834) | (768) |
| Fair Value, Measurements, Recurring [Member] | ||
| Assets | ||
| Derivative assets | 97 | |
| Liabilities | ||
| Derivative liabilities | (7,834) | (768) |
| Commodity Contract [Member] | Fair Value, Measurements, Recurring [Member] | ||
| Assets | ||
| Derivative assets | 97 | |
| Liabilities | ||
| Derivative liabilities | (7,834) | (768) |
| Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | ||
| Assets | ||
| Derivative assets | 97 | |
| Liabilities | ||
| Derivative liabilities | (7,834) | (768) |
| Significant Unobservable Inputs (Level 3) [Member] | Commodity Contract [Member] | Fair Value, Measurements, Recurring [Member] | ||
| Assets | ||
| Derivative assets | 97 | |
| Liabilities | ||
| Derivative liabilities | $ (7,834) | $ (768) |
Financial Instruments - Schedule of Changes in Fair Value of Financial Assets and Liabilities Classified as Level 3 (Detail) - Significant Unobservable Inputs (Level 3) [Member] $ in Thousands |
9 Months Ended | |||
|---|---|---|---|---|
|
Sep. 30, 2021
USD ($)
| ||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
| Net Liabilities at beginning of period | $ (671) | |||
| Total realized and unrealized (gains) losses: | ||||
| Included in earnings | (10,058) | [1] | ||
| Purchases, sales, issuances and settlements | 2,895 | |||
| Net Liabilities end of period | $ (7,834) | |||
| ||||
Earnings Per Share - Computation of Basic and Diluted Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|||
| Earnings Per Share [Abstract] | ||||||
| Net (Loss) Income, Basic | $ (1,163) | $ 6,501 | $ (5,021) | $ 65 | ||
| Net (Loss) Income, Diluted | $ (1,163) | $ 6,501 | $ (5,021) | $ 65 | ||
| Weighted Average Number of Shares Outstanding, Basic | 1,994,177 | 1,994,177 | 1,994,177 | 1,994,175 | ||
| Weighted Average Number of Shares Outstanding, Options | [1] | 756,154 | 758,367 | |||
| Weighted Average Number of Shares Outstanding, Diluted | 1,994,177 | 2,750,331 | 1,994,177 | 2,752,542 | ||
| Per Share Amount, Basic | $ (0.58) | $ 3.26 | $ (2.52) | $ 0.03 | ||
| Per Share Amount, Diluted | $ (0.58) | $ 2.36 | $ (2.52) | $ 0.02 | ||
| ||||||
Earnings Per Share - Additional Information (Detail) - shares |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Share-based Payment Arrangement, Option [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 767,500 | 767,500 | 767,500 | 767,500 |