Note 10 - Events of Default	6 Months Ended
Jun. 30, 2021
Notes to Financial Statements
Substantial Doubt about Going Concern [Text Block]	10. Events of Default In connection with the completion of our financial statements for the year ended December 31, 2020, the Company tested its financial ratios for the fiscal quarter ended December 31, 2020 and determined that it was not in compliance the first lien debt to consolidated EBITDAX ratio covenant under the First Lien Credit Facility. Our failure to comply with such covenant contributed to our independent accountant’s including an explanatory paragraph with regard to the Company’s ability to continue as a “going concern” in issuing their opinion on our financial statements for the year ended December 31, 2020. The "going concern" opinion resulted in an additional event of default under the First Lien Credit Facility and the Second Lien Credit Facility. A discussion of the events of default follows. First Lien Credit Facility Events of default have occurred, or are reasonably likely to occur, under the First Lien Credit Facility as a result of (i) the Company’s failure to timely deliver audited financial statements without a “going concern” or like qualification for the fiscal year ended December 31, 2020, (ii) its inability to comply with the first lien debt to consolidated EBITDAX ratio for the fiscal quarter ended December 31, 2020, (iii) our failure to cause certain deposit accounts to be subject to control agreements in favor of the administrative agent for the First Lien Credit Facility, and (iv) certain cross-defaults that have occurred, or may occur, as a result of the events of default under the First Lien Credit Agreement and corresponding cross-defaults under the Second Lien Credit Facility and cross-defaults or similar termination events under our hedging contracts. Second Lien Credit Facility Events of default have occurred, or are reasonably likely to occur, under the Second Lien Credit Facility as a result of (i) the Company’s failure to timely deliver audited financial statements without a “going concern” or like qualification for the fiscal year ended December 31, 2020, (ii) its failure to cause certain deposit accounts to be subject to control agreements in favor of the administrative agent for the Second Lien Credit Facility and (iii) the failure of the Company to meet certain hedging requirements, and (iv) certain cross-defaults that have occurred, or may occur, as a result of the occurrence of events of default under the First Lien Credit Facility and corresponding cross-defaults or similar termination events under our hedging contracts. On April 16, 2021, we received a Notice of Default and Reservation of Rights (the “Notice of Default”) from Angelo Gordon stating that we have defaulted under the Second Lien Credit Facility, and that, as a result, the lenders have accelerated our obligations due thereunder and have reserved their rights to pursue additional remedies in the future. The Notice of Default describes certain events of default that occurred under the Second Lien Credit Facility as a result of (i) our failure to file timely our Form 10-K for the fiscal year ended December 31, 2020, (ii) our failure to timely deliver audited financial statements without a “going concern” or like qualification for the fiscal year ended December 31, 2020, and (iii) other defaults under our revolving credit facility. The Notice of Default declares that our obligations under the Second Lien Credit Facility are immediately due and payable, in each case without presentment, demand, protest or other requirements of any kind, and have begun to bear interest at the rate applicable to such amount under the Second Lien Credit Facility, plus an additional 3%. Additionally, the administrative agent and the lenders have reserved their right to exercise further rights, powers and remedies under the Second Lien Credit Facility, at any time or from time to time, with respect to any of the events of default described above. Angelo Gordon agreed to forbear from exercising remedies available to it until May 6, 2021. We are in discussions with Angelo Gordon regarding further forbearance, but no assurance can be provided that we will be able to enter into any additional forbearance agreements. Hedging Contracts Effective April 12, 2021, Morgan Stanley Capital Group, Inc. (“Morgan Stanley”), a hedge counterparty to several of our hedging contracts sent us notice of events of default and early termination with respect to the hedging contracts to which they are a counterparty. The notice indicates Morgan Stanley’s election to exercise termination rights under the hedge contract, which Morgan Stanley asserts have arisen as a result of the occurrence of events of default under the First Lien Credit Facility, of which Morgan Stanley is a lender, holding approximately 3.7% of the outstanding obligations under the First Lien Credit Facility. The termination value of the hedging agreements with Morgan Stanley as of the effective date of the notice was approximately $9.1 million. We subsequently voluntarily terminated most of our other hedging arrangements. As a result of the settlement of the terminated hedges, we have outstanding obligations of $9.9 million, including the $9.1 million to Morgan Stanley. These obligations will be added to the outstanding balance of the First Lien Credit Facility and accrue interest at the default rate, currently 8.75%, until repaid. Other hedging agreements may also be terminated as a result of the events of default. The termination of additional hedging agreements may result in losses and limit our ability to reduce exposure to adverse fluctuations in oil and gas prices. Amounts that we may owe as a result of terminated hedging agreements will accrue interest for so long as such amounts remain unpaid. Forbearance Discussions The existing events of default under the credit facilities were subject to forbearance agreements with our lenders that expired on May 6, 2021. We are in discussions with our lenders regarding further forbearance, but no assurance can be provided that we will be able to enter into any additional forbearance agreements. We are also in discussions with our lenders regarding a waiver of existing and prospective defaults. No assurances can be provided that any waivers will be obtained.

Note 10 - Events of Default

6 Months Ended

Jun. 30, 2021

Substantial Doubt about Going Concern [Text Block]

10. Events of Default

In connection with the completion of our financial statements for the year ended December 31, 2020, the Company tested its financial ratios for the fiscal quarter ended December 31, 2020 and determined that it was not in compliance the first lien debt to consolidated EBITDAX ratio covenant under the First Lien Credit Facility. Our failure to comply with such covenant contributed to our independent accountant’s including an explanatory paragraph with regard to the Company’s ability to continue as a “going concern” in issuing their opinion on our financial statements for the year ended December 31, 2020. The "going concern" opinion resulted in an additional event of default under the First Lien Credit Facility and the Second Lien Credit Facility. A discussion of the events of default follows.

First Lien Credit Facility

Events of default have occurred, or are reasonably likely to occur, under the First Lien Credit Facility as a result of (i) the Company’s failure to timely deliver audited financial statements without a “going concern” or like qualification for the fiscal year ended December 31, 2020, (ii) its inability to comply with the first lien debt to consolidated EBITDAX ratio for the fiscal quarter ended December 31, 2020, (iii) our failure to cause certain deposit accounts to be subject to control agreements in favor of the administrative agent for the First Lien Credit Facility, and (iv) certain cross-defaults that have occurred, or may occur, as a result of the events of default under the First Lien Credit Agreement and corresponding cross-defaults under the Second Lien Credit Facility and cross-defaults or similar termination events under our hedging contracts.

Second Lien Credit Facility

Events of default have occurred, or are reasonably likely to occur, under the Second Lien Credit Facility as a result of (i) the Company’s failure to timely deliver audited financial statements without a “going concern” or like qualification for the fiscal year ended December 31, 2020, (ii) its failure to cause certain deposit accounts to be subject to control agreements in favor of the administrative agent for the Second Lien Credit Facility and (iii) the failure of the Company to meet certain hedging requirements, and (iv) certain cross-defaults that have occurred, or may occur, as a result of the occurrence of events of default under the First Lien Credit Facility and corresponding cross-defaults or similar termination events under our hedging contracts.

On April 16, 2021, we received a Notice of Default and Reservation of Rights (the “Notice of Default”) from Angelo Gordon stating that we have defaulted under the Second Lien Credit Facility, and that, as a result, the lenders have accelerated our obligations due thereunder and have reserved their rights to pursue additional remedies in the future.

The Notice of Default describes certain events of default that occurred under the Second Lien Credit Facility as a result of (i) our failure to file timely our Form 10-K for the fiscal year ended December 31, 2020, (ii) our failure to timely deliver audited financial statements without a “going concern” or like qualification for the fiscal year ended December 31, 2020, and (iii) other defaults under our revolving credit facility.

The Notice of Default declares that our obligations under the Second Lien Credit Facility are immediately due and payable, in each case without presentment, demand, protest or other requirements of any kind, and have begun to bear interest at the rate applicable to such amount under the Second Lien Credit Facility, plus an additional 3%. Additionally, the administrative agent and the lenders have reserved their right to exercise further rights, powers and remedies under the Second Lien Credit Facility, at any time or from time to time, with respect to any of the events of default described above. Angelo Gordon agreed to forbear from exercising remedies available to it until May 6, 2021. We are in discussions with Angelo Gordon regarding further forbearance, but no assurance can be provided that we will be able to enter into any additional forbearance agreements.

Hedging Contracts

Effective April 12, 2021, Morgan Stanley Capital Group, Inc. (“Morgan Stanley”), a hedge counterparty to several of our hedging contracts sent us notice of events of default and early termination with respect to the hedging contracts to which they are a counterparty. The notice indicates Morgan Stanley’s election to exercise termination rights under the hedge contract, which Morgan Stanley asserts have arisen as a result of the occurrence of events of default under the First Lien Credit Facility, of which Morgan Stanley is a lender, holding approximately 3.7% of the outstanding obligations under the First Lien Credit Facility. The termination value of the hedging agreements with Morgan Stanley as of the effective date of the notice was approximately $9.1 million. We subsequently voluntarily terminated most of our other hedging arrangements. As a result of the settlement of the terminated hedges, we have outstanding obligations of $9.9 million, including the $9.1 million to Morgan Stanley. These obligations will be added to the outstanding balance of the First Lien Credit Facility and accrue interest at the default rate, currently 8.75%, until repaid. Other hedging agreements may also be terminated as a result of the events of default. The termination of additional hedging agreements may result in losses and limit our ability to reduce exposure to adverse fluctuations in oil and gas prices. Amounts that we may owe as a result of terminated hedging agreements will accrue interest for so long as such amounts remain unpaid.

Forbearance Discussions

The existing events of default under the credit facilities were subject to forbearance agreements with our lenders that expired on May 6, 2021. We are in discussions with our lenders regarding further forbearance, but no assurance can be provided that we will be able to enter into any additional forbearance agreements. We are also in discussions with our lenders regarding a waiver of existing and prospective defaults. No assurances can be provided that any waivers will be obtained.