Production and Sales - Average daily production for the nine months ended September 30, 2024, was 814 BOE per day, down from 1,022 BOE per day for the year ended December 31, 2023[184] - For the three months ended September 30, 2024, oil and natural gas sales decreased by 18% compared to the same period in 2023, driven by a 6% increase in realized prices and a 17% decrease in production volumes[202] - Average daily production of oil decreased from 855 Bbl in September 2023 to 746 Bbl in September 2024, while natural gas production fell from 1,007 Mcf to 647 Mcf[203] - The company experienced a 24% decrease in oil and natural gas sales for the nine months ended September 30, 2024, driven by a 2% increase in realized prices and a 25% decrease in production volumes[218] Revenue - Total revenues for the three months ended September 30, 2024, were $7,364,346, compared to $5,278,459 for the same period in 2023, representing a 39.5% increase[200] - For the nine months ended September 30, 2024, total revenues were $15,708,240, a decrease of 23% from $20,322,608 in the same period of 2023[218] - Other revenue related to providing water services decreased to $359,270 for the nine months ended September 30, 2024, from $461,435 in the same period of 2023[222] Pricing - Average realized oil price per barrel for the three months ended September 30, 2024, was $68.57, compared to $64.83 for the same period in 2023, reflecting a 5.3% increase[200] - Average realized oil price per barrel for the nine months ended September 30, 2024, was $73.87, compared to $73.03 for the same period in 2023[221] - Average NYMEX oil pricing for the nine months ended September 30, 2024, was $78.50 per barrel, which is 7% lower than the average price of $84.30 per barrel for the same period in 2023[195] - Average NYMEX natural gas pricing for the nine months ended September 30, 2024, was $2.11 per Mcf, a 14% decrease from $2.47 per Mcf for the same period in 2023[196] - The average sales price of natural gas for the three months ended September 30, 2024, was $1.55 per Mcf, down from $2.83 per Mcf for the same period in 2023[200] - Average realized oil price per barrel after reflecting settled derivatives was $77.12 for the three months ended September 30, 2024, compared to $74.23 for the same period in 2023[205] Expenses - Total expenses for the three months ended September 30, 2024, were $5,379,540, compared to $4,660,967 for the same period in 2023, indicating a 15.4% increase[200] - Lease operating expenses decreased to $2,136,732 for the three months ended September 30, 2024, from $2,449,140 in the same period of 2023, although per unit expenses increased by 4.8%[207] - Lease operating expenses decreased to $6,530,431 for the nine months ended September 30, 2024, from $7,354,304 in the same period of 2023, while production expenses per BOE increased by 18% to $28.54[223] - General and administrative expenses rose significantly to $2,235,263 for the three months ended September 30, 2024, compared to $981,751 for the same period in 2023, primarily due to increased costs associated with being a public company[212] - General and administrative expenses surged to $6,868,749 for the nine months ended September 30, 2024, from $3,111,130 in 2023, largely due to increased legal and professional service costs and stock-based compensation of $1,516,933[228] - Interest expense increased significantly to $5,732,747 for the nine months ended September 30, 2024, from $1,429,200 in 2023, driven by the Senior Secured Term Loan and Private Notes Payable[228] Derivative Instruments - The company uses derivative financial instruments to mitigate exposure to commodity price risk associated with oil prices[255] - Derivative financial instruments are recorded at fair value on the consolidated balance sheets as either an asset or a liability[255] - The company does not apply hedge accounting for existing derivative financial instruments, recognizing changes in fair value in the consolidated statements of operations[255] - Realized and unrealized gains and losses from derivative financial instruments are reported as a single line item in revenues[255] - Cash flows from derivative contract settlements are reflected in operating activities in the consolidated statements of cash flows[255] Debt and Cash Flow - As of September 30, 2024, the company had outstanding debt totaling $24,735,391 under the Senior Secured Term Loan, $15,000,000 under the Seller Promissory Note, and $3,875,750 in private notes payable, with a working capital deficit of $38,801,444[233] - Positive cash flow from operations was $3,346,362 for the nine months ended September 30, 2024, compared to $8,675,037 for the year ended December 31, 2023[234] - Net cash used in investing activities for the nine months ended September 30, 2024, was primarily related to $3,275,667 in development costs for reserves[238] - The company has a three-year Common Stock Purchase Agreement with a maximum funding limit of $150,000,000 to support operations and production growth, having received $2,464,688 in cash proceeds from the sale of 1,885,000 shares under this agreement[234] Fair Value Changes - The change in fair value of forward purchase agreements resulted in a loss of $4,534,766 for the nine months ended September 30, 2024, primarily due to a decline in stock price[229] Company Operations - The company operates 100% of its net acreage, which consists of approximately 13,700 gross acres[183] - The average depth of the vertical wells operated by the company is approximately 3,810 feet[183]
HNR Acquisition p(HNRA) - 2024 Q3 - Quarterly Report