Oil and Gas Properties Acquired

3 Months Ended

Mar. 31, 2022

Extractive Industries [Abstract]

Oil and Gas Properties Acquired

Note 2 – Oil and Gas Properties Acquired

Oil and gas properties and equipment is comprised of the following at March 31, 2022 and December 31, 2021:

	March 31, 2022			December 31,2021
Oil and gas production equipment	$	913,425		$	913,425
Proven developed and undeveloped oil and gas properties		9,134			—
Subtotal		922,559			913,425
Less: Accumulated depreciation, depletion and amortization		(123,336	)		(92,502	)
Oil and gas properties and equipment, net	$	799,223		$	820,923

On April 1, 2021, the Company completed the previously announced acquisition of certain oil and gas properties and interests from Core Energy, LLC, effective as of January 1, 2021 (the “Oil and Gas Properties Acquisition”). On December 14, 2020, the Company entered into an asset purchase and sale agreement (the “Agreement”) with Core Energy, as well as all of the members of Core, Mandalay LLC and Coal Creek Energy, LLC, to purchase certain oil and gas properties in the Central Kansas Uplift geological formation, covering over 11,000 contiguous acres, including, among other things, the production and mineral rights to and a leasehold interest in the Oil and Gas Properties and all contracts, agreements and instruments. The Agreement provided for an aggregate purchase price consisting of $900,000 in cash at closing.

The following represents the purchase price allocation for the Oil and Gas Properties Acquisition for $900,000 in cash. The Oil and Gas Property Acquisition qualify as an asset acquisition. As such, AMGAS recognized the assets acquired and liabilities assumed at their fair values as of April 1, 2021, the date of closing. The fair value of the Oil and Gas Properties acquired approximate the value of the consideration paid, and the asset retirement obligation to be assumed, which management has concluded approximates the fair value that would be paid by a typical market participant. As a result, neither goodwill nor a bargain purchase gain will be recognized related to the acquisition.

The Company determined the amount of the asset retirement obligation assumed to be $13,425 as of the date of acquisition. The obligation relates to legal requirements associated with the retirement of long-lived assets that result from the acquisitions, construction, development, or normal use of the asset. The obligation relates primarily to the requirement to plug and abandon oil and natural gas wells and support wells at the conclusion of their useful lives.

The following table summarizes the allocation of the assets acquired and the liabilities assumed related to the Oil and Gas Properties:

	Amount
Oil and gas properties, subject to depreciation, depletion and amortization	$	913,425
Asset retirement obligation assumed		(13,425	)
Total purchase price of the Oil and Gas Properties	$	900,000