10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________________________________________________________________________________________________________________

FORM 10-K/A

(Amendment No. 1)

________________________________________________________________________________________________________________________

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File No. 001-36550

________________________________________________________________________________________________________________________

PAR PACIFIC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________________________________________

Delaware	84-1060803
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

825 Town & Country Lane, Suite 1500
Houston,	Texas	77024
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (281) 899-4800

Securities registered under Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Common stock, $0.01 par value	PARR	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ý    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ý

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $763,283,917 based on the closing sales price of the common stock on the New York Stock Exchange as of June 28, 2019. As of February 18, 2020, 53,375,501 shares of the registrant’s Common Stock, $0.01 par value, were issued and outstanding.

Documents Incorporated By Reference

Certain information required to be disclosed in Part III of this report is incorporated by reference from the registrant’s definitive proxy statement or an amendment to this report, which will be filed with the SEC not later than 120 days after the end of the fiscal year covered by this report.

TABLE OF CONTENTS

	PAGE
EXPLANATORY NOTE	1
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

i

EXPLANATORY NOTE

Par Pacific Holdings, Inc. (the “Company,” “we,” “our,” and “us”) is filing this Amendment No. 1 to Annual Report on Form 10-K/A (this “Amended Form 10-K”) to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 2, 2020 (the “Original Form 10-K”), to include the audited financial statements for our investment in an unconsolidated company, Laramie Energy, LLC ("Laramie Energy"), as of and for the years ended December 31, 2019, 2018 and 2017 (as Exhibit 99.2).

Laramie Energy has met the conditions of a significant subsidiary under Rule 1-02(w) of Regulation S-X, so we are required, pursuant to Rule 3-09 of Regulation S-X, to provide audited financial statements as an exhibit to the Original Form 10-K. In accordance with Rule 3-09(b)(1), the separate audited financial statements of Laramie Energy are being filed as an amendment to the Original Form 10-K within 90 days after the end of the Company’s December 31 fiscal year.

This Amended Form 10-K also updates, amends, and supplements Item 15 of the Original Form 10-K to include the filing of new Exhibits 31.3, 31.4, 32.3, and 32.4, certifications of our Chief Executive Officer and Chief Financial Officer, pursuant to Rule 13a-14(a) and (b) of the Securities Exchange Act of 1934, as amended.

No other changes have been made to the Original Form 10-K. This Amended Form 10-K does not amend or otherwise update any other information in the Original Form 10-K. Accordingly, this Amended Form 10-K should be read in conjunction with the Original Form 10-K and with our subsequent filings with the SEC. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Original Form 10-K.

1

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)    The following documents are filed as part of this report:

(1) Consolidated Financial Statements (Included under Item 8). The Index to the Consolidated Financial Statements is included on page F-1 of this Annual Report on Form 10-K and is incorporated herein by reference.

(2) Financial Statement Schedules

Schedule I - Condensed Financial Information of Registrant

(b)    Index to Exhibits

2

2.1	Third Amended Joint Chapter 11 Plan of Reorganization of Delta Petroleum Corporation and Its Debtor Affiliates dated August 16, 2012. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 7, 2012.**
2.2	Contribution Agreement, dated as of June 4, 2012, among Piceance Energy, LLC, Laramie Energy, LLC and the Company. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 8, 2012.**
2.3	Membership Interest Purchase Agreement dated as of June 17, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC, and Hawaii Pacific Energy, LLC. Incorporated by reference to Exhibit 2.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed on August 14, 2013.**
2.4	Agreement and Plan of Merger dated as of June 2, 2014, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholders’ Representative. Incorporated by reference to Exhibit 2.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed on August 11, 2014.**
2.5	Amendment of Agreement and Plan of Merger dated as of September 9, 2014, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholders’ Representative. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 10, 2014.**
2.6	Second Amendment of Agreement and Plan of Merger dated as of December 31, 2014, by and among Par Petroleum Corporation, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholder’s Representative. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 7, 2015.**
2.7	Third Amendment to Agreement and Plan of Merger dated as of March 31, 2015, by and among the Company, Bogey, Inc., Koko’oha Investments, Inc., and Bill D. Mills, in his capacity as the Shareholders’ Representative. Incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K filed on April 2, 2015.**
2.8	Unit Purchase Agreement, dated as of June 13, 2016, between Par Wyoming, LLC and Black Elk Refining, LLC. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 15, 2016.**
2.9	First Amendment to Unit Purchase Agreement dated as of July 14, 2016, between Par Wyoming, LLC and Black Elk Refining, LLC. Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on July 15, 2016.**
2.10	Purchase and Sale Agreement dated as of November 26, 2018, among Par Petroleum, LLC, TrailStone NA Oil & Refining Holdings, LLC, and solely for certain purposes specified therein, the Company. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed on November 30, 2018.**#
2.11	Amendment No. 1 to Purchase and Sale Agreement dated as of January 11, 2019, among Par Petroleum, LLC, TrailStone NA Oil & Refining Holdings, LLC, and Par Pacific Holdings, Inc. Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
3.1	Restated Certificate of Incorporation of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 20, 2015.
3.2	Second Amended and Restated Bylaws of the Company dated October 20, 2015. Incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on October 20, 2015.
4.1	Form of the Company’s Common Stock Certificate. Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed on March 31, 2014.
4.2	Registration Rights Agreement effective as of August 31, 2012, by and among the Company, Zell Credit Opportunities Master Fund, L.P., Waterstone Capital Management, L.P., Pandora Select Partners, LP, Iam Mini-Fund 14 Limited, Whitebox Multi-Strategy Partners, LP, Whitebox Credit Arbitrage Partners, LP, HFR RVA Combined Master Trust, Whitebox Concentrated Convertible Arbitrage Partners, LP, and Whitebox Asymmetric Partners, LP. Incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
4.3	First Amendment to Registration Rights Agreement dated as of December 19, 2018, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.3 to the Company’s registration statement on Form S-3 filed on December 21, 2018.
4.4	Warrant Issuance Agreement dated as of August 31, 2012, by and among the Company and WB Delta, Ltd., Waterstone Offshore ER Fund, Ltd., Prime Capital Master SPC, Waterstone Market Neutral MAC51, Ltd., Waterstone Market Neutral Master Fund, Ltd., Waterstone MF Fund, Ltd., Nomura Waterstone Market Neutral Fund, ZCOF Par Petroleum Holdings, L.L.C., and Highbridge International, LLC. Incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on September 7, 2012.

4.5	Form of Common Stock Purchase Warrant dated as of June 4, 2012. Incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
4.6	Par Pacific Holdings, Inc. Amended and Restated 2012 Long Term Incentive Plan. Incorporated by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed on April 21, 2016.****
4.7	Par Pacific Holdings, Inc. Second Amended and Restated 2012 Long Term Incentive Plan. Incorporated by reference to Exhibit 4.1 to the Company’s registration statement on Form S-8 filed on May 18, 2018.****
4.8	Par Pacific Holdings, Inc. 2018 Employee Stock Purchase Plan. Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed on May 18, 2018.****
4.9	Registration Rights Agreement dated as of September 25, 2013, by and among the Company and the Purchasers party thereto. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
4.10	Stockholders Agreement dated April 10, 2015. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 13, 2015.
4.11	Registration Rights Agreement, dated June 21, 2016, between Par Pacific Holdings, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the Initial Purchasers. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 22, 2016.
4.12	Registration Rights Agreement dated as of July 14, 2016, by and among Par Pacific Holdings, Inc. and the purchasers party thereto. Incorporated by Reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 15, 2016.
4.13	First Amendment to Registration Rights Agreement dated as of September 27, 2016, by and among the Company and the purchasers party thereof. Incorporated by reference to Exhibit 4.14 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2016.
4.14	Second Amendment to Registration Rights Agreement dated as of September 30, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.15 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2016.
4.15	Third Amendment to Registration Rights Agreement dated as of October 7, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.16 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2016.
4.16	Fourth Amendment to Registration Rights Agreement dated as of October 14, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.17 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2016.
4.17	Fifth Amendment to Registration Rights Agreement dated as of October 21, 2016, by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.18 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2016.
4.18	Sixth Amendment to Registration Rights Agreement dated as of October 28, 2016 by and among the Company and the holders party thereto. Incorporated by reference to Exhibit 4.19 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2016.
4.19	Indenture, dated June 21, 2016, between Par Pacific Holdings, Inc. and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 22, 2016.
4.20	Indenture, dated December 21, 2017, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein), and Wilmington Trust, National Association, as Trustee and Collateral Trustee. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 22, 2017.
4.21	First Supplemental Indenture, dated November 20, 2018, among Par Petroleum, LLC, Par Petroleum Finance Corp., the Guarantors (as defined therein), and Wilmington Trust, National Association, as Trustee. Incorporated by reference to Exhibit 4.21 to the Company’s registration statement on Form S-3 filed on December 21, 2018.
4.22	Second Supplemental Indenture, dated January 11, 2019, among Par Tacoma, LLC (f/k/a TrailStone NA Asset Finance I, LLC), U.S. Oil & Refining Co., McChord Pipeline Co., Par Petroleum, LLC, Par Petroleum Finance Corp., Par Pacific Holdings, Inc., the other guarantors party thereto, and Wilmington Trust, National Association. Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
4.23	Registration Rights Agreement dated as of December 19, 2018, by and between the Company and IES Downstream, LLC. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 20, 2018.

4.24	Registration Rights Agreement dated as of January 11, 2019, by and between the Company and TrailStone NA Oil  & Refining Holdings, LLC. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
4.25	Description of Registrant’s Securities.+
10.1	Loan and Security Agreement dated as of December 21, 2017, among Par Petroleum, LLC, Par Hawaii, Inc, Mid Pac Petroleum, LLC, HIE Retail, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company, LLC, and the other members party thereto, the financial institutions party thereto, and Bank of America, N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 22, 2017.
10.2	Fourth Amended and Restated Limited Liability Company Agreement of Laramie Energy, LLC, dated as of October 18, 2018, by and among Par Piceance Energy Equity LLC and the other members party thereto. Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2018.
10.3	Credit Agreement dated as of June 4, 2012 among Piceance Energy, LLC, the financial institutions party thereto, JPMorgan Chase Bank, N.A., as administrative agent and Wells Fargo Bank, National Association, as syndication agent. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
10.4	First Amendment to Credit Agreement dated August 31, 2012, by and among Piceance Energy, LLC, the financial institutions party thereto and JPMorgan Chase Bank, N.A. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
10.5	Delta Petroleum General Recovery Trust Agreement dated August 27, 2012, by and among the Company, DPCA LLC, Delta Exploration Company, Inc., Delta Pipeline, LLC, DLC, Inc., CEC, Inc., Castle Texas Production Limited Partnership, Amber Resources Company of Colorado, Castle Exploration Company, Inc., and John T. Young. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
10.6	Pledge Agreement dated August 31, 2012, by Par Piceance Energy Equity LLC in favor of Jefferies Finance LLC. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
10.7	Intercreditor Agreement dated August 31, 2012, by and among JP Morgan Chase Bank, N.A., as administrative agent for the First Priority Secured Parties (as defined therein), Jefferies Finance LLC, as administrative agent for the Second Priority Secured Parties (as defined therein), the Company and Par Piceance Energy Equity LLC. Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
10.8	Pledge and Security Agreement, dated August 31, 2012, by the Company and certain of its subsidiaries in favor of Jefferies Finance LLC. Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on September 7, 2012.
10.9	Form of Indemnification Agreement between the Company and its Directors and Executive Officers. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2012.****
10.10	Letter Agreement dated as of September 17, 2013 but effective as of January 1, 2013, by and between Equity Group Investments and the Company. Incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2013.
10.11	Environmental Agreement dated as of September 25, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC, and Hawaii Pacific Energy, LLC. Incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2013.
10.12	Employment Offer Letter with William Monteleone dated September 25, 2013. Incorporated by reference to Exhibit 10.43 to the Company’s Amendment No. 3 to Annual Report on Form 10-K/A filed on July 2, 2014.****
10.13	Employment Offer Letter with Joseph Israel dated December 12, 2014. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 17, 2014.****
10.14	Employment Offer Letter with James Matthew Vaughn dated July 3, 2014. Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2016.****
10.15	Employment Offer Letter with Jim Yates dated March 10, 2015. Incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2016.****
10.16	Initial Award with Jim Yates dated May 8, 2015. Incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2016.****

10.17	Form of Award of Restricted Stock (Discretionary Long Term Incentive Plan).+
10.18	Form of Award of Restricted Stock Units (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 2, 2015.****
10.19	Form of Nonstatutory Stock Option Agreement (Discretionary Long Term Incentive Plan). Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 2, 2015.****
10.20	Par Petroleum (and subsidiaries) Incentive Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 12, 2015.****
10.21	Amended and Restated Supply and Offtake Agreement dated as of December 21, 2017, between Par Hawaii Refining, LLC and J. Aron & Company, LLC. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 22, 2017.
10.22	Amendment to Amended and Restated Supply and Offtake Agreement dated as of December 5, 2018, between Par Hawaii Refining, LLC and J. Aron & Company, LLC.  Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 11, 2018.
10.23	Amendment to Amended and Restated Supply and Offtake Agreement dated as of February 19, 2019 by and among Par Hawaii Refining, LLC, Par Petroleum, LLC, and J. Aron & Company LLC. Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
10.24	Amendment to Amended and Restated Supply and Offtake Agreement dated as of June 20, 2019, among Par Hawaii Refining, LLC f/k/a Hawaii Independent Energy, LLC, Par Petroleum, LLC, and J. Aron & Company LLC. Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2019.
10.25	Storage Facilities Agreement dated as of June 1, 2015, between Hawaii Independent Energy, LLC and J. Aron & Company. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 2, 2015.
10.26	Marketing and Sales Agreement dated as of June 1, 2015, between Hawaii Independent Energy, LLC and J. Aron & Company. Incorporated as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed June 2, 2015.
10.27	Amended and Restated Pledge and Security Agreement dated as of December 21, 2017, between Par Hawaii Refining, LLC and J. Aron & Company, LLC. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 22, 2017.
10.28	Amendment to Amended and Restated Pledge and Security Agreement dated January 11, 2019, among Par Hawaii Refining, LLC and J. Aron & Company LLC. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.29	Environmental Indemnity Agreement dated as of June 1, 2015, by Hawaii Independent Energy, LLC in favor of J. Aron & Company. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed June 2, 2015.
10.30	Employment Offer Letter with William C. Pate dated October 12, 2015. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 14, 2015.****
10.31	Amendment to Employment Offer Letter with Joseph Israel dated October 12, 2015. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed October 14, 2015.****
10.32	Unit Purchase Agreement dated February 22, 2016, by and among Laramie Energy, LLC, Par Piceance Energy Equity LLC, and the other parties thereto. Incorporated by reference to Exhibit 10.74 to the Company’s Annual Report on Form 10-K filed on March 3, 2016.**
10.33	Equity Commitment Letter dated December 17, 2015, by and between Par Pacific Holdings, Inc. and Piceance Energy, LLC. Incorporated by reference to Exhibit 10.75 to the Company’s Annual Report on Form 10-K filed on March 3, 2016.**
10.34	Par Pacific Holdings, Inc. Non-Qualified Deferred Compensation Plan. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 6, 2017.****
10.35	Par Pacific Holdings, Inc. Severance Plan for Senior Officers. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 6, 2017. ****
10.36	First Amendment to Loan and Security Agreement dated as of April 3, 2018 by and among Par Petroleum, LLC, Par Hawaii, Inc., Mid Pac Petroleum, LLC, HIE Retail, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company, and Bank of America N.A. Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2018.

10.37	Asset Purchase Agreement dated as of January 9, 2018 by and among CHS Inc., Par Hawaii, Inc., and Par Pacific Holdings, Inc.  Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2018. #
10.38	First Amendment to Asset Purchase Agreement dated as of March 23, 2018 by and among CHS Inc., Par Hawaii, Inc., and Par Pacific Holdings, Inc.  Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2018. #
10.39	Term Loan and Guaranty Agreement, dated as of January 11, 2019, among Par Petroleum, LLC, Par Petroleum Finance Corp., the guarantors party thereto, Par Pacific Holdings, Inc. solely for the limited purposes set forth therein, the lenders party thereto, and Goldman Sachs Bank USA, as administrative agent. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.40	Collateral Trust and Intercreditor Agreement, dated as of December 21, 2017, among Par Petroleum, LLC, Par Petroleum Finance Corp., the guarantors from time to time party thereto, Wilmington Trust, National Association, as indenture trustee and as collateral trustee, J. Aron  & Company LLC, and Goldman Sachs Bank USA. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.41	Fourth Amendment to Loan and Security Agreement, dated as of January 11, 2019, among Par Petroleum, LLC, Par Hawaii, Inc., Mid Pac Petroleum, LLC, HIE Retail, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company LLC, the guarantors party thereto, the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent and collateral agent for the lenders. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.42	Conformed Copy of First Lien ISDA Master Agreement dated as of January 11, 2019, between Merrill Lynch Commodities, Inc. and U.S. Oil & Refining Co. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.43	Ninth Amendment to First Lien ISDA 2002 Master Agreement entered into as of November 1, 2019 by and between U.S. Oil & Refining Co. and Merrill Lynch Commodities, Inc. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 4, 2019.
10.44	Amendment to Amended and Restated Pledge and Security Agreement dated January 11, 2019, among Par Hawaii Refining, LLC and J. Aron & Company LLC. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.45	Loan Agreement, dated January 9, 2019, between Par Pacific Holdings, Inc. and Bank of Hawaii. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.46	Note made by Par Pacific Holdings, Inc. to Bank of Hawaii, dated as of January 9, 2019. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on January 14, 2019.
10.47	Note made by Par Pacific Hawaii Property Company, LLC to Bank of Hawaii, dated as of March 29, 2019. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 3, 2019.
10.48	Increase Agreement dated July 24, 2018 among Par Petroleum, LLC, Par Hawaii, Inc., Mid Pac Petroleum, LLC, HIE Retail, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company, LLC, and certain lenders. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 27, 2018.
10.49	Topping Unit Purchase Agreement by and among IES Downstream, LLC, Eagle Island, LLC, Par Hawaii Refining, LLC, and Par Pacific Holdings, Inc., dated as of August 29, 2018.  Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2018. #
10.50	Unit Purchase Agreement by and among Laramie Energy, LLC, EnCap Energy Capital Fund VI, L.P., and EnCap Energy VI-B Acquisitions, L.P., dated as of October 18, 2018. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2018. #
10.51	Second Amendment to Loan and Security Agreement dated as of October 16, 2018 by and among Par Petroleum, LLC, Par Hawaii, Inc., Mid Pac Petroleum, LLC, HIE Retail, LLC, Hermes Consolidated, LLC, Wyoming Pipeline Company, LLC, and the other members party thereto, the financial institutions party thereto, and Bank of America, N.A., as administrative agent. Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on November 7, 2018.
10.52	Term Loan Agreement dated as of March 29, 2019, between Par Pacific Hawaii Property Company, LLC and Bank of Hawaii. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 3, 2019.
10.53	Guaranty Agreement dated as of March 29, 2019 executed by Par Pacific Holdings, Inc. in favor of Bank of Hawaii. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 3, 2019.

10.54	Form of Exchange Agreement. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 16, 2019.
14.1	Par Pacific Holdings, Inc. Code of Business Conduct and Ethics for Employees, Executive Officers and Directors, effective December 3, 2015. Incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed March 3, 2016.
21.1	Subsidiaries of the Registrant.+
23.1	Consent of Deloitte & Touche LLP +
23.2	Consent of Netherland, Sewell & Associates, Inc.+
23.3	Consent of Deloitte & Touche LLP related to the financial statements of Laramie Energy, LLC.*
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+
31.3	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.4	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.+
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.+
32.3	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.*
32.4	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*
99.1	Report of Netherland, Sewell & Associates, Inc. regarding the registrants Proved Reserves as of December 31, 2019.+
99.2	Laramie Energy, LLC Financial Statements and Independent Auditors’ Report, as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018, and 2017.*
101.INS	XBRL Instance Document.*** +
101.SCH	XBRL Taxonomy Extension Schema Documents.*** +
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*** +
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*** +
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*** +
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*** +
*	Filed herewith.
**	Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.
***	These interactive data files are furnished and deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.
****	Management contract or compensatory plan or arrangement.
#	Confidential treatment has been granted for portions of this exhibit. Omissions are designated with brackets containing asterisks. As part of our confidential treatment request, a complete version of this exhibit has been filed separately with the SEC.
+	Previously filed or furnished, as applicable

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange of Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 27, 2020.

PAR PACIFIC HOLDINGS, INC.
By:	/s/ William Pate
	William Pate
	President and Chief Executive Officer
By:	/s/ William Monteleone
	William Monteleone
	Chief Financial Officer

EX-23.3

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statement Nos. 333-192519, 333-195662, 333-212107, 333-213471, 333-214593, 333-228933, 333-229278 and 333-229528 on Form S-3 and Registration Statement Nos. 333-185612, 333-208575, 333-216518 and 333-225054 on Form S-8 of Par Pacific Holdings, Inc. of our report dated March 25, 2020 related to the financial statements of Laramie Energy, LLC as of December 31, 2019 and 2018, and for the three years ended December 31, 2019, appearing in this Annual Report on Form 10-K/A of Par Pacific Holdings, Inc. for the year ended December 31, 2019.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

March 27, 2020

EX-31.3

Exhibit 31.3

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a)/15d-14(a) PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, William Pate, certify that:

1. I have reviewed this annual report on Form 10-K/A (Amendment No. 1) of Par Pacific Holdings, Inc.;

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; and

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.

Date: March 27, 2020

/s/ William Pate

William Pate

President and Chief Executive Officer

EX-31.4

Exhibit 31.4

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a)/15d-14(a) PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, William Monteleone, certify that:

1. I have reviewed this annual report on Form 10-K/A (Amendment No. 1) of Par Pacific Holdings, Inc.;

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; and

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.

Date: March 27, 2020

/s/ William Monteleone

William Monteleone

Chief Financial Officer

EX-32.3

Exhibit 32.3

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

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 Annual Report of Par Pacific Holdings, Inc. (the “Company”) on Form 10-K/A (Amendment No. 1) for the year ended December 31, 2019 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, William Pate, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William Pate

William Pate

President and Chief Executive Officer

March 27, 2020

EX-32.4

Exhibit 32.4

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

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 Annual Report of Par Pacific Holdings, Inc. (the “Company”) on Form 10-K/A (Amendment No. 1) for the year ended December 31, 2019 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, William Monteleone, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William Monteleone

William Monteleone

Chief Financial Officer

March 27, 2020

EX-99.2

LARAMIE ENERGY, LLC

Financial Statements

and

Independent Auditors’ Report

December 31, 2019,

2018 and 2017

LARAMIE ENERGY, LLC

Table of Contents

Page

Independent Auditors’ Report for the Years Ended December 31, 2019, 2018 and 2017 1

Financial Statements

Balance Sheets 3

Statements of Operations 4

Statements of Members’ Equity 5

Statements of Cash Flows 6

Notes to Financial Statements 8

	Deloitte & Touche LLP Suite 4500 1111 Bagby Street Houston, TX 77002-2591
	USA
	Tel: + 1 713-982-2000
	Fax: + 1 713-982-2001
	www.deloitte.com
INDEPENDENT AUDITORS’ REPORT

To the Members of

Laramie Energy, LLC

Denver, Colorado

We have audited the accompanying financial statements of Laramie Energy, LLC (the "Company"),

which comprise the balance sheets as of December 31, 2019 and 2018, and the related statements of

operations, members’ equity, and cash flows for the three years ended December 31, 2019, and the

related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with accounting principles generally accepted in the United States of America; this includes

the design, implementation, and maintenance of internal control relevant to the preparation and fair

presentation of financial statements that are free from material misstatement, whether due to fraud or

error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We

conducted our audits in accordance with auditing standards generally accepted in the United States of

America. Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the

Company's preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An

audit also includes evaluating the appropriateness of accounting policies used and the reasonableness

of significant accounting estimates made by management, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of Laramie Energy, LLC as of December 31, 2019 and 2018, and the results of its

operations and its cash flows for the three years ended December 31, 2019 in accordance with

accounting principles generally accepted in the United States of America.

Emphasis of Matter Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue

as a going concern. As discussed in Note 11 to the financial statements, at December 31, 2019, the

Company has debt maturing in December 2020 and is projecting a potential violation of its financial

covenant ratios which would result in the outstanding debt to be immediately due, does not have

sufficient cash on hand or available liquidity that can be utilized to repay the maturing debt and fund

future operations, and has stated that substantial doubt exists about its ability to continue as a going

concern. Management's evaluation of the events and conditions and management’s plans regarding

these matters are also described in Note 11. The financial statements do not include any adjustments

that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this

matter.

/s/ DELOITTE & TOUCHE LLP

March 25, 2020

2

LARAMIE ENERGY, LLC

Balance Sheets

	December 31,
	2019			2018
Assets
Current assets
Cash and cash equivalents	$	200		$	802,496
Accounts receivable	18,112,970			23,200,099
Prepaid expenses and other current assets	1,864,322			2,049,002
Debt issue costs, net of amortization of $2,991,651	577,730			—
Derivative instruments	3,389,145			2,517,353
Total current assets	23,944,367			28,568,950
Property and equipment
Oil and gas properties, successful efforts method
Proved properties	458,876,106			1,029,918,623
Unproved properties	32,004,265			35,607,425
Real estate and ranch property	40,876,015			45,138,625
Office furniture, equipment, and other	3,104,002			3,018,161
	534,860,388			1,113,682,834
Less: accumulated depletion, depreciation, and amortization	(141,862,867		)	(326,249,867		)
Total property and equipment, net	392,997,521			787,432,967
Debt issue costs, net of amortization of $2,410,222	—			1,082,071
Total assets	$	416,941,888		$	817,083,988
Liabilities and Members’ Equity
Current liabilities
Accounts payable	$	7,869,086		$	10,476,878
Cash overdraft	1,851,603			—
Oil and gas sales payable	2,577,362			5,385,917
Accrued liabilities	15,987,068			22,204,683
Notes payable	201,200,000			—
Derivative instruments	201,928			3,613,133
Total current liabilities	229,687,047			41,680,611
Non-current liabilities
Accrued liabilities	9,091,969			11,152,447
Notes payable	—			210,800,000
Class A Preferred Unit	44,859,027			40,310,600
Asset retirement obligation	31,336,154			30,820,667
Total non-current liabilities	85,287,150			293,083,714
Total liabilities	314,974,197			334,764,325
Commitments and contingencies (Note 8)
Members’ equity
Members’ equity	562,641,969			562,520,442
Accumulated deficit	(460,674,278		)	(80,200,779		)
Total members’ equity	101,967,691			482,319,663
Total liabilities and members’ equity	$	416,941,888		$	817,083,988

See notes to financial statements.

- 3 -

LARAMIE ENERGY, LLC

Statements of Operations

	For the Years Ended December 31,
	2019			2018			2017
Operating revenues
Natural gas sales	$	152,913,414		$	166,128,720		$	119,707,061
Condensate sales	12,910,561			14,429,736			7,509,594
Natural gas liquids sales	27,812,402			45,432,882			28,774,419
Other revenues	269,931			368,538			1,146,167
Total operating revenues	193,906,308			226,359,876			157,137,241
Operating expenses
Lease operating expenses	30,924,221			28,132,102			25,773,674
Gathering, transportation and processing	59,175,934			61,947,974			42,907,266
Production and property taxes	5,527,026			9,307,620			5,723,491
Depletion, depreciation, amortization and accretion	84,173,797			68,116,822			51,586,780
Impairment of proved properties	355,220,000			—			—
Abandoned property and expired leases	3,536,325			4,018,895			1,936,784
General and administrative	16,316,151			20,629,982			23,190,296
Total operating expenses	554,873,454			192,153,395			151,118,291
(Loss) income from operations	(360,967,146		)	34,206,481			6,018,950
Other income (expense)
(Loss) gain on derivative instruments	(1,193,449		)	(13,426,153		)	35,530,531
Interest expense and other financing costs	(12,894,093		)	(10,570,524		)	(6,458,928		)
(Loss) gain on disposal of assets	(1,477,621		)	808,757			50,855
Surface land operating expense	(96,614		)	(108,031		)	(327,276		)
Preferred dividend	(4,114,989		)	(4,688,995		)	(4,166,112		)
Miscellaneous income	270,413			125,091			189,193
Total other (expense) income	(19,506,353		)	(27,859,855		)	24,818,263
Net (loss) income	$	(380,473,499	)	$	6,346,626		$	30,837,213

See notes to financial statements.

- 4 -

LARAMIE ENERGY, LLC

Statements of Members’ Equity

For the Years Ended December 31, 2019, 2018 and 2017

	Class A Units					Class B Units				Accumulated Deficit			Total Members’ Equity
	Units		Amount			Units		Amount
Balances, January 1, 2017	866,134		$	530,789,814		14,595		$	9,117,981	$	(117,384,618	)	$	422,523,177
Class B Units issuance and compensation, net of forfeitures	—		—			(360	)	6,195,234		—			6,195,234
Net income	—		—			—		—		30,837,213			30,837,213
Balances, December 31, 2017	866,134		530,789,814			14,235		15,313,215		(86,547,405		)	459,555,624
Net contributions of Class A Unit holders	70,227		28,048,043			—		—		—			28,048,043
Redemptions of Class A Units	(139,319	)	(14,878,715		)	—		—		—			(14,878,715		)
Class B Units issuance and compensation, net of forfeitures	—		—			—		3,248,085		—			3,248,085
Net income	—		—			—		—		6,346,626			6,346,626
Balances, December 31, 2018	797,042		543,959,142			14,235		18,561,300		(80,200,779		)	482,319,663
Class B Units issuance and compensation, net of forfeitures	—		—			(100	)	121,527		—			121,527
Net loss	—		—			—		—		(380,473,499		)	(380,473,499		)
Balances, December 31, 2019	797,042		$	543,959,142		14,135		$	18,682,827	$	(460,674,278	)	$	101,967,691

See notes to financial statements.

- 5 -

LARAMIE ENERGY, LLC

Statements of Cash Flows

	For the Years Ended December 31,
	2019			2018			2017
Cash flows from operating activities
Net (loss) income	$	(380,473,499	)	$	6,346,626		$	30,837,213
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation, depletion, amortization and accretion	84,173,797			68,116,822			51,586,780
Impairment of proved properties	355,220,000			—			—
Abandoned property and expired leases	3,536,325			4,018,895			1,936,784
Settlement of asset retirement obligation	(4,082,728		)	(1,909,520		)	(667,554		)
Non-cash interest costs	1,014,867			844,372			810,748
Share-based compensation	121,527			3,248,085			6,195,234
Preferred dividend	4,114,989			4,688,995			4,166,112
Unrealized (gain) loss on derivative instruments	(4,282,997		)	4,062,212			(46,241,453		)
Loss (gain) on disposal of assets	1,477,621			(808,757		)	(50,855		)
Changes in operating assets and liabilities
Accounts receivable	5,087,129			(9,129,615		)	(3,219,811		)
Prepaid expenses and other assets	184,680			(630,765		)	(147,434		)
Accounts payable	180,223			783,484			(2,497,286		)
Oil and gas sales payable	(2,808,555		)	1,426,691			696,511
Accrued liabilities	(4,507,493		)	10,329,720			122,771
Net cash provided by operating activities	58,955,886			91,387,245			43,527,760
Cash flows from investing activities
Proceeds from sale of fixed assets	653,946			1,577,844			919,738
Proceeds from sale of oil and gas properties	19,240,000			—			—
Additions to property and equipment	(71,826,643		)	(136,761,805		)	(98,141,833		)
Net cash used in investing activities	(51,932,697		)	(135,183,961		)	(97,222,095		)
Cash flows from financing activities
Proceeds from notes payable	108,700,000			127,250,000			205,350,000
Payments on notes payable	(118,300,000		)	(87,950,000		)	(151,350,000		)
Debt issue costs	(77,088		)	(55,227		)	(211,087		)
Cash overdraft	1,851,603			—			—
Members’ contributions	—			20,000,000			—
Redemptions of Class A Units	—			(14,878,715		)	—
Costs of raising capital	—			(51,957		)	—
Net cash (used in) provided by financing activities	(7,825,485		)	44,314,101			53,788,913
(Decrease) increase in cash and cash equivalents	(802,296		)	517,385			94,578
Cash and cash equivalents, beginning of period	802,496			285,111			190,533
Cash and cash equivalents, end of period	$	200		$	802,496		$	285,111

(Continued on the following page)

See notes to financial statements.

- 6 -

LARAMIE ENERGY, LLC

Statements of Cash Flows

(Continued from the previous page)

Supplemental disclosure of activity:

Cash paid for interest in 2019, 2018 and 2017 was $10,789,646, $9,120,335 and $5,106,566, respectively.

Supplemental disclosure of non-cash activity:

During the years ended December 31, 2019, 2018 and 2017, the Company recorded an asset retirement cost and related obligation of $1,407,929, $2,606,259 and $2,039,180, respectively.

During the year ended December 31, 2018, the Company recorded a non-cash property

contribution of $10,689,900 and assumed liabilities of $2,589,900 from an equity investor pursuant to an acquisition of a business.

During the years ended December 31, 2019, 2018 and 2017, asset retirement obligation liabilities of $297,607, $284,609 and $211,849, respectively, were settled and offset abandoned property expenses.

During the year ended December 31, 2017, asset retirement costs and related obligation liabilities of $29,515 were written off.

Capital expenditures of $1,535,500 and $3,610,118 were unpaid and included in accrued liabilities and accounts payable, respectively, at December 31, 2019. Capital expenditures of $5,306,100 and $6,398,133 were unpaid and included in accrued liabilities and accounts payable, respectively, at December 31, 2018. Capital expenditures of $11,801,484 and $11,613,368 were unpaid and included in accrued liabilities and accounts payable, respectively, at December 31, 2017.

See notes to financial statements.

- 7 -

LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies

Laramie Energy, LLC (the “Company”) a Delaware limited liability company, was formed on May 10, 2012 by Laramie Energy II, LLC (“Laramie II”) for the primary purpose of acquiring, owning, operating, and disposing of oil and gas properties in the continental United States of America. On August 31, 2012, Laramie II and Par Pacific Holdings, Inc. (“Par”), formerly named Par Petroleum Corporation, in connection with the Contribution Agreement (“Contribution Agreement”) between Laramie II, Par, and the Company dated August 31, 2012, contributed certain oil and gas related assets and liabilities to the Company in exchange for a member interest in the Company and cash paid to Par. Since then, the Company has raised additional capital from the original and new members (see Note 10). At December 31, 2019 and 2018, the Company’s properties were located in the Piceance Basin in Colorado. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. The cash and cash equivalents balance did not exceed the federally insured limit as of December 31, 2019. At December 31, 2018, cash and cash equivalents balance exceeded the federally insured limit by $552,496.

Accounts Receivable

The Company’s accounts receivable consist mainly of amounts due from natural gas, condensate, and NGL purchasers, and joint interest owners on properties the Company operates. For receivables from joint interest owners, the Company typically has the ability to withhold future revenue disbursements to recover any non-payment of joint interest billings. Generally, the Company’s natural gas, condensate, and NGL revenue receivables are collected within two months. For each of the years ended December 31, 2019, 2018 and 2017, the Company did not record any bad debt expense. At December 31, 2019 and 2018, the Company did not have an allowance for doubtful accounts.

The Company’s producing properties are all located in Colorado in one general area, and the oil and gas production is sold to various purchasers based on market index prices. As of December 31, 2019 and 2018, three purchasers accounted for 76% and 86% of accrued oil and gas revenue, respectively. For the years ended December 31, 2019 and 2018, four purchasers accounted for 72% and 74% of total revenues, respectively. For the year ended December 31, 2017, three purchasers accounted for 71% of total revenues. The Company continually monitors the credit standing of the primary purchasers.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

- 8 -

LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Use of Estimates (continued)

Depreciation, depletion, and amortization of oil and gas properties and the impairment of proved oil and gas properties are determined using estimates of oil and gas reserves. There are numerous uncertainties in estimating the quantity of reserves and in projecting the future rates of production and timing of development expenditures, including future costs to dismantle, dispose, and restore the Company’s properties. Oil and gas reserve engineering must be recognized as a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact way. In addition, significant estimates include the estimated cost and timing related to the asset retirement obligation, purchase price on a business combination (see Note 3), impairment of proved and unproved oil and gas properties and the estimated fair value of derivative instruments.

Revenue Recognition

The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers . Revenues are predominantly derived from the sale of produced natural gas, condensate, and natural gas liquids.  In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014‑09, Revenue from Contracts with Customers.  The FASB subsequently issued various ASU’s which provided additional implementation guidance, and these ASUs collectively make up FASB ASC Topic 606.  The objective of ASC Topic 606 is to clarify the principles for recognizing revenue and to develop a common revenue standard for United States (“U.S.”) GAAP and International Financial Reporting Standards. ASC Topic 606 is effective for fiscal years beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019.  The standard permits retrospective application using either of the following methodologies: (i) restatement of each prior reporting period presented or (ii) recognition of a cumulative-effect adjustment as of the date of initial application.  The Company adopted ASC Topic 606 effective January 1, 2019 using the modified retrospective approach.  The adoption did not have an impact on the Company’s net loss or cash flows, and the Company did not record a cumulative-effect adjustment to retained earnings as a result.  The adoption did result in changes to the classification of certain costs attributable to non-operated properties, which led to an insignificant overall decrease in total revenues with a corresponding decrease in gathering, transportation, and processing under the new standard. The standard also required additional pro forma footnote disclosures to present 2018 and 2017 results as if accounted for under the previous standard. As the adoption did not have a material impact on the Company’s operations, the pro forma disclosures are considered immaterial and are not presented.

Oil and gas revenues are recognized when production volumes are sold to a purchaser at a fixed or determinable price, delivery has occurred and title has transferred, persuasive evidence of a sales arrangement exists and collectability of the revenue is reasonably assured. The Company recognizes natural gas, condensate and natural gas liquids revenues based on the amount of product sold and delivered to purchasers. The Company records a receivable (payable) to the extent it receives less (more) than its proportionate share of product delivered to purchasers. The Company’s aggregate imbalance positions as of December 31, 2019 and 2018 were $1.2 million and $0.1 million, respectively.

- 9 -

LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

Revenues are reported on a gross basis for the amounts received before taking into account production taxes, gathering and transportation expenses, and lease operating costs, which are reported as separate expenses.

Income Taxes

The Company has elected to be treated as a partnership for income tax purposes. Partnerships are not subject to U.S. federal income taxes. Rather, the partnership’s taxable income flows through to the owners, who are responsible for paying the applicable income taxes on the income allocated to them. Accordingly, no provision for income taxes has been recorded on the accompanying financial statements. For tax years beginning on or after January 1, 2018, the Company is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”).  Under the Centralized Partnership Audit Regime, any Internal Revenue Service (“IRS”) audit of the Company would be conducted at the Company level, and if the IRS determines an adjustment, the default rule is that the Company would pay an “imputed underpayment” including interest and penalties, if applicable.  The Company may instead elect to make a “push-out” election, in which case the partners for the year that is under audit would be required to take into account the adjustments on their own personal or business income tax returns.  If the Company does not elect to make a “push-out” election, the Company LLC agreement requires current members to indemnify the Company for their specific share of the imputed underpayment.

If the Company receives an imputed underpayment, a determination will be made based on the relevant facts and circumstances that exist at that time to allocate such imputed underpayment to each partner based on their specific share of such imputed underpayment.  Any payments that the Company ultimately makes on behalf of its current partners will be reflected as a distribution, rather than tax expense, at the time that such distribution is declared.

The Company follows the guidance of ASC Topic 740, Income Taxes. Interest and penalties associated with tax positions are recorded in the period assessed as general and administrative expenses. The Company’s tax returns subject to examination by tax authorities include 2016 through the current period for state and federal reporting purposes, respectively.

Property and Equipment

The Company accounts for its oil and gas exploration and development activities under the successful efforts method of accounting. Under this method, costs of productive exploratory wells, all development wells and facilities, and undeveloped leases are capitalized when incurred. Development facilities include gathering and water pipeline systems, water storage and treatment facilities, and compression facilities used in the production of oil and gas from producing wells. Oil and gas lease acquisition costs are also capitalized when incurred. Mineral interests, surface ownership, and other real estate are capitalized as real estate and ranch property when incurred.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Property and Equipment (continued)

Exploration costs, including personnel costs, geological and geophysical expenses, and delay rentals for oil and gas leases, are charged to expense as incurred. Exploratory drilling costs are initially capitalized, but charged to expense, if and when the well is determined not to have found reserves in commercial quantities.

The Company reviews its property and equipment for impairment at least annually and whenever events and circumstances indicate that the carrying value of the assets may not be recoverable. The impairment test compares undiscounted future net cash flows to the assets’ net book value. If the net capitalized costs exceed future net cash flows, then the cost of the property is written down to fair value. Fair value for oil and gas properties is generally determined based on discounted future net cash flows. In 2019, 2018 and 2017, the Company recognized impairment expense of $355,220,000, $0 and $0 on its proved oil and gas properties, respectively. Unproved oil and gas properties are assessed periodically, but at least annually, for impairment on a field basis based on remaining lease terms, drilling results, reservoir performance, commodity price outlooks, or future plans to develop acreage and allocate capital. The Company did not recognize impairment expense for unproved oil and gas properties for the periods ended December 31, 2019, 2018 and 2017. Fair value for real estate and ranch property is generally determined based on market value. The Company did not recognize impairment expense relative to its real estate and ranch property in 2019, 2018 and 2017.

The sale of a partial interest in a proved oil and gas property is accounted for as normal retirement, and no gain or loss is recognized as long as the treatment does not significantly affect the units-of-production depletion rate. The sale of a partial interest in an unproved property is accounted for as a recovery of cost when substantial uncertainty exists as to the ultimate recovery of the cost applicable to the interest retained. A gain on the sale is recognized to the extent that the sales price exceeds the carrying amount of the unproved property. A gain or loss is recognized for all other sales of producing and non-producing properties. In 2019, the Company sold a partial interest of its proved and unproved oil and gas properties (Note 3) and did not recognize gain or loss as the units-of-production depletion rate was not significantly affected. There were no sales of proved oil and gas properties or unproved properties in 2018 and 2017.

Maintenance and repairs are charged to expense; renewals and betterments are capitalized to the appropriate property and equipment accounts. Upon retirement or disposition of assets, the costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses, if any, reflected in results of operations.

The provision for depletion, depreciation, and amortization of oil and gas properties, including certain development facilities, and certain real estate and ranch property is calculated on a field basis based on proved reserves using the units-of-production method. Costs of certain development facilities and equipment serving a number of properties are depreciated using the straight-line method over the estimated useful lives of the assets ranging from 7 to 15 years, or units-of-operations for certain significant equipment.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Property and Equipment (continued)

The provisions for depreciation of the office furniture, equipment and other are calculated using the straight-line method over the estimated useful lives ranging from 5 to 15 years. Included in real estate and ranch property are buildings that are depreciated using the straight-line method over the estimated useful lives ranging from 20 to 39 years.

Derivative Instruments

The Company uses derivative instruments to manage its exposure to natural gas and natural gas liquids price volatility. All derivatives are initially, and subsequently, measured at estimated fair value and recorded as assets or liabilities on the balance sheets. The Company has elected not to designate its derivatives as cash flow hedges. For derivative contracts that do not qualify as cash flow hedges, changes in the estimated fair values and gains and losses on settlements of contracts are recorded in gains and losses on derivative instruments under the other income and expense caption in the statements of operations. The Company applies net presentation of derivative assets and liabilities for financial reporting purposes when such assets and liabilities are with the same counterparty and subject to a master netting arrangement.

Asset Retirement Obligation

Asset retirement obligations (“ARO”) relate to future costs associated with the plugging and abandonment of oil and gas wells, removal of equipment and facilities from leased acreage, and returning such land to its original condition.The Company records the estimated fair value of an ARO in the period in which it is incurred. When the liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company reports a gain or loss upon settlement to the extent the actual costs differ from the recorded liability.

The majority of the Company’s ARO relates to the plugging and abandoning of oil and gas wells, the reclamation of the Company’s well locations and decommissioning and reclaiming water and compression facilities and pipelines. Revisions to estimated ARO result in adjustments to the related capitalized asset and corresponding liability.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Asset Retirement Obligation (continued)

The following is a reconciliation of the ARO:

	For the Years Ended December 31,
	2019			2018
Balance, beginning of period	$	30,820,667		$	26,986,294
Additions	1,407,929			1,233,296
Acquired oil and gas properties (Note 3)	—			1,372,963
Divested oil and gas properties (Note 3)	(2,136,848		)	—
Settlements and disposals	(297,607		)	(284,609		)
Accretion expense	1,542,013			1,512,723
Balance, end of period	$	31,336,154		$	30,820,667

Equity-Based Compensation

Compensation expense associated with equity-based awards is recognized at the fair value of the awards over the vesting period on a straight-line basis.

Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. The standard eliminates the need for an organization to analyze whether the following apply in a given period; (1) exception to the incremental approach for intraperiod tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments, and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for; (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, for public business entities. The Company is currently evaluating the impact of adopting this standard.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements (continued)

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update improve the effectiveness of fair value measurement disclosures and modify the disclosure requirements on fair value measurements, including the consideration of costs and benefits. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this standard.

In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) – Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. The objective of ASU 2017-13 is to provide transition relief for adoption of ASC Topic 606 and ASC Topic 842 for a public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include its financial statements or financial information in another entity’s filing with the SEC. ASU 2017-13 allows these entities to adopt ASC Topic 606 in annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019, and ASC Topic 842 in fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company has adopted ASC Topic 606 effective January 1, 2019. The Company is currently evaluating the impact of adopting ASC Topic 842.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 changes the impairment model for financial assets and certain other instruments by requiring entities to adopt a forward-looking expected loss model that will result in earlier recognition of credit losses. ASU 2016-13 requires adoption through the use of a modified retrospective approach at the effective date by recognizing a cumulative-effect adjustment to the opening balance of retained earnings. ASU 2016-13 is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impact of adopting this standard.

In February 2016, the FASB issued ASU 2016-02, Leases. The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The FASB subsequently issued various ASUs which provided additional implementation guidance.

As allowed for by ASU 2019-10, ASU 2016-02 and its amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021 for public business entities that otherwise would not meet the definition of a public business entity except for a requirement to include its financial statements in another entity’s filing with the SEC. The Company is currently evaluating the impact of adopting this standard.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements (continued)

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The objective of this update is to clarify the principles for recognizing revenue and to develop a common revenue standard. As allowed for by ASU 2017-13, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019, for public business entities that otherwise would not meet the definition of a public business entity except for a requirement to include its financial statements in another entity’s filing with the SEC. The Company has adopted ASU 2014-09 effective January 1, 2019 using the modified retrospective approach.

Note 2 - Fair Value Measurements

GAAP defines estimated fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, and are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Substantially all Level 2 assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 – Pricing inputs include significant inputs that are generally less observable than objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 2 - Fair Value Measurements (continued)

The assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s policy is to recognize transfers in and/or out of the fair value hierarchy as of the end of the reporting period in which the event or change in circumstances caused the transfer. The Company has consistently applied the valuation techniques discussed below in all periods presented.

The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2019 and 2018, by level within the fair value hierarchy:

	Level 1		Level 2		Level 3		Total
December 31, 2019
Assets
Derivative instruments, current	$	—	$	3,389,145	$	—	$	3,389,145
Liabilities
Derivative instruments, current	$	—	$	201,928	$	—	$	201,928
December 31, 2018
Assets
Derivative instruments, current	$	—	$	2,517,353	$	—	$	2,517,353
Liabilities
Derivative instruments, current	$	—	$	3,613,133	$	—	$	3,613,133

As of December 31, 2019, the Company’s commodity derivative financial instruments were comprised of two natural gas and natural gas differential swaps. As of December 31, 2018, the Company’s commodity derivative financial instruments were comprised of 21 natural gas and natural gas differential swaps. The fair values of the swap agreements are determined under the income valuation technique using a discounted cash flows model. The valuation models require a variety of inputs, including contractual terms, published forward prices, volatilities for options, and discount rates, as appropriate. The Company’s estimates of fair value of derivatives include consideration of the counterparty’s creditworthiness, the Company’s creditworthiness, and the time value of money.

The consideration of these factors results in an estimated exit price for each derivative asset or liability under a marketplace participant’s view. All of the significant inputs are observable, either directly or indirectly; therefore, the Company’s derivative instruments are included within the Level 2 fair value hierarchy. The counterparties in all of the Company’s commodity derivative financial instruments are the lenders in the Company’s bank credit facility.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 2 - Fair Value Measurements (continued)

Non-Recurring Fair Value Measurements

The Company tests its proved property for impairment whenever events or changes in circumstances indicate that the fair value of these assets may be reduced below their carrying value. Based on declines in forecasted commodity prices, the Company performed a proved property impairment test as of December 31, 2019. The fair value was determined using the income approach and was based on the expected present value of the future net cash flows from the producing property and related assets. Significant unobservable inputs included estimates of future oil and gas production from the Company’s reserve reports, future commodity prices based on sales contract terms or forward price curves (adjusted for basis differentials), production costs, development expenditures, an appropriate risk–adjusted discount rate based on the Company’s weighted-average cost of capital, and other relevant data (all of which were designated as Level 3 inputs within the fair value hierarchy). The impairment test indicated that a proved property impairment had occurred, and the Company therefore recorded a non-cash impairment charge to reduce the carrying value of the impaired property to its fair value at December 31, 2019.

The treatment of the net assets acquired qualified as a business combination and, as such, the Company estimated the fair value of each property as of the acquisition date (the date on which the Company obtained control of the properties) (see Note 3).

Financial Instruments

Other financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, accounts payable, oil and gas sales payable, accrued liabilities, notes payable and Class A Preferred units. With the exception of the notes payable and Class A Preferred units, the financial statement carrying amounts of these items approximate their fair values due to their short-term nature. The Company’s note payable has a recorded value that approximates its fair value since its variable interest rate is tied to current market rates and the applicable margins represent market rates. The fair value of the Company’s Class A Preferred units approximates its carrying value based on the terms and conditions the Company can receive for similar financial instruments as of year-end.

Note 3 – Acquisitions and Divestitures

In the normal course of its business, the Company anticipates acquiring and divesting interests in proved oil and gas properties, in unproved acreage, and in real estate and ranch property in its area of operations. In 2019, the Company divested a portion of its real estate and ranch property resulting in a loss of $1.6 million reflected in gains and losses on disposal of assets under the other income and expense caption in the statements of operations.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 3 – Acquisitions and Divestitures (continued)

TEP Divestiture

On March 14, 2019, the Company entered into a Purchase and Sale Agreement (“PSA”) with TEP Rocky Mountain, LLC (“TEP”). Under the PSA, TEP purchased $19.2 million of developed properties, leasehold acreage, real estate assets and assumed $2.1 million of ARO of the Company in exchange for $17.1 million in cash. The transaction is accounted for as a normal retirement, as the units-of-production depletion rate was not significantly affected, and a gain or loss was not recognized.

The following table summarizes the sale price and the net carrying value of assets sold and liabilities discharged:

	March 14, 2019
Sale price	$	17,103,152
Oil and gas properties
Proved	279,379,007
Unproved	2,185,341
Real estate and other	2,106,921
Asset retirement obligations, net	(2,136,848		)
Accumulated depletion, depreciation and amortization	(264,431,269		)
	$	17,103,152

The Company’s financial statements for the year ended December 31, 2019 include the results of operations from the properties sold to TEP through March 14, 2019, during which period the properties sold had revenues of $3,326,189, operating expenses of $2,042,615, and income from operations of $1,283,574.

Black Hills Acquisition

On February 28, 2018, the Company entered into a Contribution and Purchase Agreement (“CP Agreement”) with Black Hills Exploration and Production Inc. and Black Hills Plateau Production LLC (collectively “Black Hills”). Under the CP Agreement, Black Hills contributed $20 million in cash in exchange for 49,984 Class A Units issued by the Company and the Company acquired $8.1 million of developed properties, leasehold acreage and real estate assets and ARO and water sourcing liabilities in exchange for 20,243 additional Class A units issued by the Company. The Class A units issued are the consideration for the assets acquired in a business combination, the amount of which is determined based upon the fair value of the Class A units at the date of the acquisition. In addition, Black Hills provided the Company with a $3.5 million cash payment for liabilities related to the properties conveyed. The contribution of a business by Black Hills into the Company is accounted for as a business combination, and as such, the Company recorded the estimated fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date (the date on which the Company obtained control of the properties).

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 3 – Acquisitions and Divestitures (continued)

Black Hills Acquisition (continued)

Fair value measurements utilize assumptions of market participants. To determine the fair value of the oil and gas assets related to the acquisition, the Company used an income approach based on a discounted cash flow model and made market assumptions as to future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development and operating costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates.

The Company determined the appropriate discount rates used for the discounted cash flow analyses by using a weighted-average cost of capital from a market participant perspective plus property specific risk premiums for the assets acquired.

The Company estimated property specific risk premiums taking into consideration that the related reserves are primarily natural gas, among other items. Given the unobservable nature of the significant inputs, they are deemed to be Level 3 in the fair value hierarchy. The fair value measurements of the ARO and water sourcing commitment were determined using discounted cash flow analyses. The fair value measurements of the unproved oil and gas properties and real estate were determined by comparison to recorded sales price per acre of comparable assets.

The following table summarizes the purchase price and final allocation of the fair value of assets acquired and liabilities assumed:

	February 28, 2018
Purchase price	$	8,100,000
Oil and gas properties
Proved	1,601,463
Unproved	4,930,500
Real estate	5,530,900
Asset retirement obligations	(1,372,963)
Water sourcing commitment	(2,589,900		)
	$	8,100,000

The Company’s financial statements for the year ended December 31, 2018 include the results of operations from the properties acquired from Black Hills since March 1, 2018, during which period the properties acquired had revenues of $15,417,423, operating expenses of $13,819,856, and income from operations of $1,597,566.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 4 – Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	December 31,
	2019		2018
Prepaid insurance	$	718,529	$	630,722
Prepaid rent	74,004		106,175
Prepaid royalties	828,100		903,000
Prepaid other and other current assets	243,689		409,105
	$	1,864,322	$	2,049,002

Note 5 - Accrued Liabilities

Accrued liabilities, current, consist of the following:

	December 31,
	2019		2018
Accrued capital expenditures	$	1,535,500	$	5,306,100
Accrued production and property taxes	8,849,148		7,808,168
Accrued bonuses	1,125,724		3,279,874
Accrued pipeline throughput commitment deficiency	2,108,139		2,892,161
Accrued water commitment payment	565,000		515,000
Accrued general and administrative expenses	155,524		570,109
Accrued lease operating expenses	1,019,457		961,999
Accrued other	628,576		871,272
	$	15,987,068	$	22,204,683

Note 6 - Credit Facility

On June 4, 2012, the Company entered into a credit facility (the “Facility”), as amended, with J.P. Morgan Securities, LLC and Wells Fargo Securities LLC, each as an arranger, JPMorgan Chase Bank, N.A. as the administrative agent (the “Administrative Agent”), and the lenders party thereto. The Facility is a $400 million secured revolving credit facility secured by a lien on the Company’s oil and gas properties and related assets.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 6 - Credit Facility (continued)

Availability under the Facility is limited to the lesser of (i) $400 million or (ii) the borrowing base in effect from time to time. The borrowing base is determined by the Administrative Agent and the lenders, in their sole discretion, based on customary lending practices, review of the oil and gas properties included in the borrowing base, financial review of the Company, and such other factors as may be deemed relevant. The borrowing base is redetermined (i) on or about March 15 of each year based on the previous December 31 reserve report prepared by an independent engineering firm acceptable to the Administrative Agent, and (ii) on or about September 15 of each year based on the previous June 30 reserve report prepared by the Company’s internal engineers. The borrowing base at December 31, 2019 was $220,000,000. At December 31, 2019 and 2018, the outstanding balances on the Facility were $201,200,000 and $210,800,000, respectively. The Facility matures on December 15, 2020, and accordingly the outstanding balance has been recorded within total current liabilities on the Company’s balance sheet at December 31, 2019.

During the years ended December 31, 2019 and 2018, the Company incurred $77,088 and $55,227, respectively, of debt issuance costs in relation to the borrowing base redeterminations. The remaining unamortized debt issuance costs incurred in relation to the original Facility and the debt issuance costs incurred in relation to the amended Facility are being amortized straight-line over the life of the amended Facility.

Amounts borrowed bear interest at rates ranging from LIBOR plus 2.00% to LIBOR plus 3.00% per annum for Eurodollar loans and the prime rate plus 1.00% to prime rate plus 2.00% per annum for Base Rate loans, depending upon the ratio of outstanding credit to the borrowing base. At December 31, 2019, interest rates were between 4.72% and 4.81% for Eurodollar loans and 7.50% for Base Rate loans. At December 31, 2018, interest rates were between 5.10% and 5.28% for Eurodollar loans and 6.75% for Base Rate loans. Interest is due monthly on draw date of each Eurodollar and Base Rate loan. The agreement contains customary operational and financial covenants, including a current ratio covenant, and a total debt to consolidated EBITDAX (as defined) covenant. At December 31, 2019 and 2018, the Company was in compliance with all such covenants. Under the terms of the Facility, the Company is generally prohibited from making future cash distributions to its owners.

Note 7 - Derivative Instruments

The Company periodically enters into various commodity hedging instruments to mitigate a portion of the effect of natural gas and natural gas liquids price fluctuations. The Company classifies the fair value amounts of derivative assets and liabilities as net current or non-current derivative assets or net current or non-current derivative liabilities, whichever the case may be, by commodity and counterparty. The Company enters into derivatives under master netting arrangements, which, in an event of default, allows the Company to offset payables to and receivables from the defaulting counterparty. As of December 31, 2019 and 2018, there were no available amounts to be offset.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 7 - Derivative Instruments (continued)

The Company’s commodity derivative contracts as of December 31, 2019 are summarized below:

Natural Gas Swap	Basis	Average Quantity (MMBtu/Day)	Average Swap Price ($/MMBtu)
January 1, 2020 - December 31, 2020	NYMEX	20,000	$2.75
Natural Gas Basis Swap	Basis	Average Quantity (MMBtu/Day)	Basis Differential ($/MMBtu)
January 1, 2020 - December 31, 2020	CIG	20,000	$(0.53)

The aggregate fair value of the Company’s derivative instruments reported in the balance sheets, including the classification between current and non-current assets and liabilities, consists of the following:

		December 31, 2019
		Gross Recognized Assets/ Liabilities		Net Recognized Fair Value Assets/ Liabilities
Derivative instruments	Current assets	$	3,389,145	$	3,389,145
Total derivative assets		$	3,389,145	$	3,389,145
Derivative instruments	Current liabilities	$	201,928	$	201,928
Total derivative liabilities		$	201,928	$	201,928

		December 31, 2018
		Gross Recognized Assets/ Liabilities		Net Recognized Fair Value Assets/ Liabilities
Derivative instruments	Current assets	$	2,517,353	$	2,517,353
Total derivative assets		$	2,517,353	$	2,517,353
Derivative instruments	Current liabilities	$	3,613,133	$	3,613,133
Total derivative liabilities		$	3,613,133	$	3,613,133

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 7 - Derivative Instruments (continued)

None of the Company’s derivative instruments contain credit-risk-related contingent features.  Counterparties to the Company’s financial derivative contracts are high credit-quality financial institutions that are lenders under the Company’s credit facility.  The Company uses only credit facility participants to hedge with, since these institutions are secured equally with the holders of the Company’s bank debt, which eliminates the potential need to post collateral when the Company is in a derivative liability position.  As a result, the Company is not required to post letters of credit or company guarantees for its derivative counterparties in order to secure contract performance obligations.

The table below summarizes the realized and unrealized gains and losses related to the Company’s derivative instruments for the years ended December 31, 2019, 2018 and 2017:

		For the Years Ended December 31,
Commodity Derivative Instrument	Location of Gain (Loss) Recognized	2019			2018			2017
Realized losses on derivative instruments, net	Other income (expense)	$	(5,476,446	)	$	(9,363,941	)	$	(10,710,922	)
Unrealized gains (losses) on derivative instruments, net	Other income (expense)	4,282,997			(4,062,212		)	46,241,453
Total realized and unrealized (losses) gains recorded, net	Other income (expense)	$	(1,193,449	)	$	(13,426,153	)	$	35,530,531

Due to the volatility of oil and natural gas prices, the estimated fair values of the Company’s commodity derivative instruments are subject to large fluctuations from period to period.

Note 8 – Commitments and Contingencies

The table below shows the Company’s minimum future payments under non-cancellable operating leases as of December 31, 2019 and which are described below:

	Payments due by period
	2020		2021	2022	2023	2024	Total
Office leases	$	1,121,561	330,263	—	—	—	$	1,451,824
Equipment leases	1,231,327		1,231,327	1,231,327	938,517	645,707	5,278,205
Auto leases	173,388		148,140	76,005	23,699	—	421,232
Total	$	2,526,276	1,709,730	1,307,332	962,216	645,707	$	7,151,261

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 8 – Commitments and Contingencies (continued)

Non-cancelable Office Leases

The Company leases administrative office space in Denver, Colorado under an operating lease expiring May 31, 2021 and office space in Grand Junction, Colorado expiring December 31, 2020. Rental expense is recognized on a straight-line basis over the terms of the leases and was $1,078,819, $1,154,806 and $1,181,612 for the years ended December 31, 2019, 2018 and 2017, respectively.

Drilling Rig Contracts

At December 31, 2019, the Company did not have any drilling rigs under contract. At December 31, 2018, the Company had one drilling rig under contract. At December 31, 2017, the Company had two drilling rigs under contract, both expired on March 13, 2018.

Equipment Lease Financing

At December 31, 2019, the Company had two lease financing obligations pertaining to natural gas compressors with a major bank’s leasing subsidiary. The leases expire in June 2023 and December 2024, at which time the Company may purchase the equipment at its fair market value. Rental expense was $1,448,871, $1,322,939 and $648,499 for the years ended December 31, 2019, 2018 and 2017, respectively. The aggregate undiscounted minimum future lease payments are presented above.

Employment Agreements

The Company has an employment agreement with one of its executive officers.

Retirement Savings Plan

The Company outsources payroll and human resources functions to an administrative agent. In conjunction with this arrangement, the Company has a 401(k) plan (the “Plan”) available to eligible employees. The Plan provides for up to 5% matching contributions by the Company. In 2019, 2018 and 2017, the Company’s matching contributions to the Plan were $494,372, $511,208 and $468,484, respectively.

Letter of Credit

The Company has guaranteed a $250,000 letter of credit, expiring in May 2020, issued by JPMorgan Chase Bank, N.A. for TransColorado Gas Transmission Company LLC.

- 24 -

LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 8 – Commitments and Contingencies (continued)

Transportation, Gathering and Processing Agreements

Effective August 1, 2015, as part of the Management Agreement termination, the Company assumed from Laramie II a ship-or-pay agreement with an interstate pipeline company that extends through December 31, 2023. The transportation agreement obliges the Company to ship 15,000 MMBtu per day or pay the pipeline company a deficiency payment equal to an established tariff of $0.18 per MMBtu for the volume shortfall. For the past several years, because the Company did not utilize this firm capacity, the Company assigned the firm capacity to another shipper to partially offset this liability by supplementing the volumes that the Company did not ship. For the years ended December 31, 2019, 2018 and 2017, the Company incurred $651,067, $743,613 and $771,893, respectively, in deficiency payments for the volume shortfall which is included in general and administrative expenses in the statements of operations.

Gathering and Processing Agreements

At inception in August 2012, the Company assumed the long-term gas gathering and processing contracts of its predecessors. Subsequently, as other asset acquisitions have been made by the Company, other pre-existing long-term gas gathering and processing contracts tied to the acquired assets have been assumed by the Company. Accordingly, most of the Company’s acreage in Mesa, Garfield, and Rio Blanco Counties, Colorado is dedicated to one or more of these gas gathering and processing contracts such that all of the Company’s gas production flows through third-party midstream companies for gathering and processing. Only one of these contracts required a minimum annual volume commitment through November 2019, and that contract was assumed by TEP in the divestiture (see Note 3). During the years ended December 31, 2019, 2018 and 2017, the Company incurred gas gathering expense related to this contract’s volume shortfall of $98,619, $1,162,381, and $1,177,689, respectively, which is included in gathering, transportation and processing expense in the statements of operations. At December 31, 2019, the Company had no gas volume deficiency expenses under this contract included in accrued liabilities. At December 31, 2018, the Company had the respective 2018 gas volume deficiency expenses under this contract included in accrued liabilities.

Effective January 1, 2017, the Company amended one of its gathering and processing contracts.  Under the terms of the amendment, the Company received reduced gathering and processing fees in return for a commitment to drill and complete a total 150 wells by December 31, 2018, 50 of which were required to be drilled and completed by December 31, 2017.  If the commitment to drill and complete 50 wells was not met by December 31, 2017, the reduction in gathering and processing fees would be subject to a clawback payment.  The Company met the commitments to drill and complete 50 wells in 2017 and the total of 150 wells by December 31, 2018, thus eliminating the clawback provision.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 8 – Commitments and Contingencies (continued)

Other Minimum Volume Obligations Relating to Gathering and Processing Agreements

Upon closing of the asset acquisition from Oxy on March 1, 2016, the Company acquired Oxy’s oil and gas leases, gas wells, and its gathering and processing agreements to which the acquired gas wells and lease acreage were dedicated. As a key provision of the contractual assignment of Oxy’s former gathering and processing contracts to the Company, Oxy retained all of the deficiency payment liabilities of the underlying gathering and processing contracts’ minimum volume obligations between Oxy and the gathering and processing companies. Per the terms of the asset acquisition, and to partially offset Oxy’s retained deficiency payment liabilities, the Company entered into four separate minimum volume commitment agreements directly between Oxy and the Company. Under each of these minimum volume commitment agreements, the Company must pay Oxy a monthly deficiency payment for the difference between the committed volumes and the actual volumes shipped under Oxy’s former gathering and processing contracts that were assigned to the Company. Each of these four minimum volume commitment agreements relate to one of the four separate gathering and processing contracts that Oxy assigned to the Company.

As of December 31, 2019, the Company has two of the four minimum volume agreements remaining with Oxy and each have a separate monthly gas volume schedule. The two remaining agreements extend through December 2021 and July 2028, and have related deficiency payment obligations per MMBtu equal to $0.4348 and $0.1954, respectively. Under the two remaining agreements between the Company and Oxy, the minimum gas volume schedules are based on the Company’s forecast of future gas production from the existing proved developed wells that are dedicated to the two assumed gathering and processing contracts and from future wells that the Company plans to drill within the acquired acreage. For the years ended December 31, 2019, 2018 and 2017, the Company incurred $382,916, $1,732,146 and $228,713, respectively, in deficiency payments for the volume shortfall which is included in gathering, transportation and processing expenses in the statements of operations.

Litigation

The Company is subject to litigation, claims and governmental regulatory proceedings arising in the course of ordinary business. No litigation or governmental regulatory proceedings are currently underway or pending.

Environmental Matters

As an owner or lessee and operator of oil and gas properties, the Company is subject to various federal, state, and local laws and regulations relating to discharge of materials into, and protection of, the environment. The Company has policies to ensure continuing compliance with environmental laws and regulations and maintains insurance coverage for certain environmental matters. There can be no assurance that current or future federal, state, or local laws and regulations will not require the Company to spend material amounts to comply with such laws and regulations.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 9 – Preferred A Units

Under the Unit Purchase Agreement (“UPA 2016”) dated February 22, 2016, the Company issued 30,000 Class A Preferred units at $1,000 per unit. The Class A Preferred units have liquidation preference rights over the Class A units. The liquidation preference rights were waived for the Class A unit redemption completed under the Unit Purchase Agreement (“UPA 2018”) (Note 10). Dividends due on the Class A Preferred units are 10% per annum and due on a quarterly basis, if paid in cash. The Company may elect to accrue dividends and increase the liquidation preference of the Class A Preferred units at 12% per annum on a quarterly compounding basis. Under the Forth Amended and Restated LLC Agreement (“4^th LLC Agreement”), dated October 18, 2018, beginning with the quarter ended March 31, 2019, the Class A Preferred units liquidation preference rate increases from 12% per annum to 14% per annum if certain customary operational and financial covenants are exceeded. During 2019, 2018 and 2017, the Company incurred non-cash preferred dividend expense of $4,114,989, $4,688,995 and $4,166,112, respectively. During 2019, the Company incurred cash preferred dividend expense of $1,079,068 included in interest expense and other financing costs.

The Company has classified the Class A Preferred units as debt due to the mandatorily redeemable feature. The Class A Preferred units are redeemable six years from the date of the UPA 2016, which is February 22, 2022. Under ASC Topic 470, Debt, the proceeds of debt instruments should be allocated based upon their relative fair values. In connection with the issuance of the 30,000 Class A Preferred units in exchange for $30,000,000, the purchaser, Wells Fargo Central Pacific Holdings, Inc. (“Wells Fargo”), received 12,992 Class A units. The Company used a market-based approach to a “Backsolve” method to identify the relative fair values of the Class A Preferred units and Class A units, $27,689,935 and $2,310,065, respectively, upon issuance.

Note 10 – Members’ Equity

Class A Units

On October 18, 2018, the Company entered into a UPA 2018 with two of its Class A Members, EnCap Energy Capital Fund VI, L.P. and EnCap Energy VI-B Acquisitions, L.P. (collectively “Encap”). Under the terms of UPA 2018, the Company purchased all of Encap’s Class A units, totaling 138,795, for $14.8 million. During December of 2018, the Company entered into five additional unit purchase agreements. The Company purchased all Class A units of five individual investors, totaling 524 Class A units, for $55,906.

On February 28, 2018, the Company entered into the CP Agreement with Black Hills (see Note 3). Black Hills contributed $20 million in cash and $8.1 million of developed properties, leasehold acreage and real estate in exchange for 70,227 Class A units.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 10 – Members’ Equity (continued)

Class A Units (continued)

All Class A unit holders vote as a single class based upon their respective sharing percentages. Revenues and costs are allocated in accordance with specific provisions in the 4^th LLC Agreement. After payout to the Class A Preferred units, the Class A units are senior to Class B units in terms of liquidation and voting and have first-call on all assets until the Class A units reach payout as defined in the 4^th LLC Agreement.

	Class A Units
	Units		Amount
Balances, December 31, 2017	866,134		$	530,789,814
UPA 2018 – February 28, 2018	70,227		28,100,000
Funding fees and other costs of raising capital	—		(51,957		)
Redemptions of Class A Units	(139,319	)	(14,878,715		)
Balances, December 31, 2018	797,042		543,959,142
Balances, December 31, 2019	797,042		$	543,959,142

Class B Units

Laramie Energy Employee Holdings, LLC (“Employee Holdings”) (FKA Piceance Energy Employee Holdings, LLC) was formed on August 28, 2015 by the Management Investors of Laramie Energy Employee Holding, LLC (“Management Investors”) and holds all 15,000 Class B units authorized under the Company’s Second Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”). Employee Holdings is authorized to grant the Class B units to selected Company employees (including the Management Investors) upon written consent from the Company in its capacity as Manager of Employee Holdings. No Class B Units were granted in 2019. As of December 31, 2019, Employee Holdings had granted 14,135 Class B units, net of forfeitures, to the Company’s employees.

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LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 10 – Members’ Equity (continued)

Class B Units (continued)

Class B units generally vest over three years. As of December 31, 2019, 2018 and 2017, vested Class B units were 14,085, 13,468 and 8,723, respectively. If an employee is terminated by the Company for cause, all Class B units, whether vested or unvested at the time of termination, shall be deemed automatically forfeited. Employees who cease to be employed by the Company for any reason, other than termination for cause, will forfeit all unvested units. Vested units may be repurchased by the Company at fair value at the Company’s option. Distributions to Class B unit holders will only occur after the Class A unit holders reach “pay-out” as defined in the LLC Agreement. Generally, Class A unit holders are entitled to receive the return of their investment in the Company’s Class A units plus a specified internal rate of return on such investment prior to the Class B unit holders receiving any cash distributions. No Class B units were repurchased in 2019, 2018 or 2017.

The Company’s Class B units are non-voting “profits interests” for which no cash consideration was received upon issuance and which are used to compensate management based on the value of the Company. The Company accounts for the Class B units as an equity award and has recorded compensation expense to date based on the grant dates’ fair values and the vesting periods. The estimated fair value of the Class B units at grant date July 1, 2017, July 1, 2016 and August 31, 2015 was approximately $0.1 million, $0.8 million and $19.3 million, respectively. In 2019, employees forfeited 50 Class B units which reduced compensation cost by $40,100. In 2017, employees forfeited 550 Class B units which reduced compensation cost by $0.5 million. Total compensation cost recognized during 2019, 2018 and 2017 was approximately $0.1 million, $3.2 million and $6.2 million, respectively, and is included in general and administrative expense in the accompanying statements of operations. Approximately $16,500 in compensation expense will be recognized over the remaining 6 months. Estimated fair values were determined considering the following factors:

• Estimating the fair value of the Company at the dates on which units were awarded and the balance sheet date based on investments in Class A units.

• Allocating the Company's fair value to the unit holders through application of the Option Pricing Method as detailed in the AICPA Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

As part of the Option Pricing Method, a series of Black-Scholes option pricing models were applied in order to model the value to the Class B units as a contingent claim on the upside value of the Company’s equity value. The assumptions listed below were made in applying this option pricing model:

• The underlying equity value was solved such that the value allocable to the Class A units aligned to the investment values of $400.00, $358.00 and $595.50 per share of the Company at July 1, 2017, July 1, 2016 and August 31, 2015, respectively. This approach is referred to as the “Backsolve” method in the AICPA guide.

• The exercise prices of the options were based upon the participation thresholds at which the participation ratios of liquidation proceeds change between Class A and B. These amounts were derived based on the rights and preferences outlined in Company’s LLC Agreement.

- 29 -

LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 10 – Members’ Equity (continued)

Class B Units (continued)

• The maturity dates of the options were assumed to be three years from the grant date, aligning to the expected investment holding period.

• Volatility was based on the volatilities of comparable companies and was estimated at 41% as of the grant dates.

The risk-free rate was based on U.S. Treasury Strips, which corresponded with the assumed term (three years) of the options at grant date at 1.24%, 0.71% and 1.04% as of the grant dates July 1, 2017, July 1, 2016 and August 31, 2015, respectively.

Note 11 – Going Concern

The accompanying financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial statements.

The Company incurred operating losses including a significant impairment charge during 2019 due to suppressed natural gas and natural gas liquids prices. In response to low commodity prices, the Company ceased additional development activity during 2019 in order to conserve its cash flows which in turn has resulted in declining production volumes. The Company’s outstanding balance on the credit facility as of December 31, 2019 of $201.2 million is due to mature on December 15, 2020. Additionally, prices for oil, natural gas and natural gas liquids have significantly declined since December 31, 2019. As a result, the Company is projecting a potential violation of its financial covenant ratios under the credit facility as of July 2020, which will result in the outstanding balance to be immediately due. The Company does not have sufficient cash on hand or available liquidity that can be utilized to repay the maturing debt and fund future operations. These events and conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

Management is currently evaluating different plans to obtain the required funding of future operations.

These plans may include, but are not limited to, negotiating an extension of the maturity of the Facility, obtaining new financing from other banks, seeking additional funding from the Company’s members, selling non-core assets, and cost-cutting measures. However, there can be no assurances that the Company will be able to secure such additional financing or that renegotiations on terms acceptable to the Company can be secured to meet its needs. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets amounts, or the amount and classification of liabilities that might result from the outcome of this uncertainty.

- 30 -

LARAMIE ENERGY, LLC

Notes to Financial Statements

Note 12 – Subsequent Events

The Company’s management has evaluated all subsequent events through the independent auditors’ report date, March 25, 2020, which is the date the financial statements were available for issuance, for possible adjustments and disclosures. No subsequent events requiring financial statement adjustments or disclosures have been identified, except for the recent outbreak of the novel coronavirus in many countries which continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of the virus have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel. Such actions are creating disruption in global supply chains, and adversely impacting a number of industries, such as transportation, hospitality and entertainment. The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the novel coronavirus. Nevertheless, the novel coronavirus presents material uncertainty and risk with respect to the Company’s performance and financial results. We have noted this impact in our assessment of the decline in price below.

Prices for oil, natural gas and natural gas liquids have significantly declined since December 31, 2019. These lower prices could affect our business in numerous ways in 2020, including a negative impact on the Company’s revenues, earnings and cash flows, a decrease in proved reserves and possible impairments of the Company’s proved and unproved oil and natural gas properties and possible default on debt covenants.

- 31 -

XML

Cover Page - USD ($)

12 Months Ended

Dec. 31, 2019

Feb. 18, 2020

Jun. 28, 2019

Cover page.

Document Type

10-K/A

Document Annual Report

true

Document Period End Date

Dec. 31, 2019

Document Transition Report

false

Entity File Number

001-36550

Entity Registrant Name

PAR PACIFIC HOLDINGS, INC.

Entity Incorporation, State or Country Code

DE

Entity Tax Identification Number

84-1060803

Entity Address, Address Line One

825 Town & Country Lane, Suite 1500

Entity Address, City or Town

Houston,

Entity Address, State or Province

TX

Entity Address, Postal Zip Code

77024

City Area Code

281

Local Phone Number

899-4800

Title of 12(b) Security

Common stock, $0.01 par value

Trading Symbol

PARR

Security Exchange Name

NYSE

Entity Well-known Seasoned Issuer

Yes

Entity Voluntary Filers

No

Entity Current Reporting Status

Yes

Entity Interactive Data Current

Yes

Entity Filer Category

Large Accelerated Filer

Entity Small Business

false

Entity Emerging Growth Company

false

Entity Shell Company

false

Entity Public Float

$ 763,283,917

Entity Common Stock, Shares Outstanding

53,375,501

Documents Incorporated by Reference

Certain information required to be disclosed in Part III of this report is incorporated by reference from the registrant’s definitive proxy statement or an amendment to this report, which will be filed with the SEC not later than 120 days after the end of the fiscal year covered by this report.

Entity Central Index Key

0000821483

Current Fiscal Year End Date

--12-31

Document Fiscal Year Focus

2019

Document Fiscal Period Focus

FY

Amendment Flag

true

Amendment Description

10-K/A that amends Par’s 10-K to include Laramie Energy’s financial statements for fiscal year 2019.