EQUUS ENERGY, LLC

12 Months Ended

Dec. 31, 2024

EQUUS ENERGY, LLC

EQUUS ENERGY, LLC

(8) EQUUS ENERGY, LLC

Equus Energy, LLC (“Equus Energy”) was formed in November 2011 as a wholly-owned subsidiary of the Fund to make investments in companies in the energy sector, with particular emphasis on income-producing oil & gas properties. In December 2011, we contributed $250,000 to the capital of Equus Energy. On December 27, 2012, we invested an additional $6.8 million in Equus Energy for the purpose of additional working capital and to fund the purchase of $6.6 million in working interests that, as of December 31, 2024, consisted of 136 producing and non- producing oil and gas wells. On September 30, 2020, the Fund provided an additional $0.6 million in capital to Equus Energy for the purpose of additional working capital. On June 30, 2021, the Fund provided an additional $0.35 million in capital to Equus Energy for the purpose of additional working capital. On December 31, 2022, the Fund provided an additional $0.15 million in capital to Equus Energy for the purpose of additional working capital. The working interests include associated development rights of approximately 21,320 acres situated on 9 separate properties in Texas and Oklahoma. The working interests range from a de minimus amount to 50% of the leasehold that includes these wells.

The wells are operated by a number of operators, including Burk Royalty, which has operating responsibility for all of Equus Energy’s 22 producing well interests located in the Conger Field, a productive oil and gas field on the edge of the Permian Basin that has experienced successful gas and hydrocarbon extraction in multiple formations. Equus Energy, which holds a 50% working interest in each of these Conger Field wells, is seeking to effect a recompletion program of existing Conger Field wells to the Wolfcamp formation, a zone containing oil as well as gas and natural gas liquids. Part of Equus Energy’s acreage rights described above also includes a 50% working interest in possible new drilling to the base of the Canyon formation (appx. 8,500 feet) on 2,400 acres in the Conger Field. Also included in the interests acquired by Equus Energy are working interests of 7.5% and 2.5% in the Burnell and North Pettus Units, respectively, which collectively comprise approximately 13,000 acres located in the area known as the “Eagle Ford Shale” play. See Subsequent Events below where we sold our interest in Equus Energy for a combination of cash and preferred stock valued at $4.0 million.

Below is selected financial information from the audited financial statements of Equus Energy as of December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023 and 2022 (in thousands):

EQUUS ENERGY, LLC and SUBSIDIARY

Condensed Consolidated Balance Sheets

	December 31,			December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	7		$	71
Accounts receivable		207			167
Total current assets		214			238
Oil and gas properties		8,164			8,173
Less: accumulated depletion, depreciation and amortization		(8,112	)		(8,097	)
Net oil and gas properties		52			77
Total assets	$	266		$	315
Liabilities and member's deficit
Current liabilities:
Accounts payable and other	$	127		$	105
Due to affiliate		128			126
Total current liabilities		255			231
Asset retirement obligations		226			233
Total liabilities		481			464
Total member's deficit		(215	)		(149	)
Total liabilities and member's deficit	$	266		$	315

EQUUS ENERGY, LLC and SUBSIDIARY

Condensed Consolidated Statements of Operations

	Year Ended December 31,
	2024			2023			2022
Operating revenue	$	633		$	646		$	1,063
Operating expenses
Direct operating expenses		420			504			420
Depletion, depreciation, amortization and accretion		18			4			4
Salaries		—			324			383
Professional fees		143			654			713
General and administrative		131			117			75
Total operating expenses		712			1,603			1,596
Net operating loss		(79	)		(958	)		(533	)
Non-operating income
Other income		13			1,000			-
Total other income		13			1,000			-
Net (loss) income	$	(66	)	$	42		$	(533	)

EQUUS ENERGY, LLC and SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

	Year ended December 31,
	2024			2023			2022
Cash flows from operating activities:
Net income (loss)	$	(66	)	$	42		$	(533	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depletion, depreciation and amortization		15			2			2
Accretion expense		3			2			2
Changes in operating assets and liabilities:
Accounts receivable		(40	)		41			7
Prepaid expenses and other current assets		—			12			(12	)
Accounts payable and accrued liabilities		22			(5	)		7
Due to Parent		2			(224	)		—
Net cash used in operating activities		(64	)		(130	)		(527	)
Cash flows from investing activities:
Investment in oil & gas properties		—			(4	)		(58	)
Net cash used in investing activities		—			(4	)		(58	)
Cash flows from financing activities:
Capital contribution		—			—			150
Net cash provided by investing activities		—			—			150
Net decrease in cash		(64	)		(134	)		(435	)
Cash and cash equivalents at beginning of period		71			205			640
Cash and cash equivalents at end of period	$	7		$	71		$	205