Production and Revenue - Average daily production for the year ended December 31, 2023, was 1,022 BOE per day, a decrease of 21% from 1,296 BOE per day in 2022[359] - Total revenues for the year ended December 31, 2023, were $2,975,661, a decrease of 34% from $35,403,940 in 2022[376] - Production of oil for the year ended December 31, 2023, was 349 MBbl, down from 397 MBbl in 2022, representing a decrease of 12%[378] - The average sales price for crude oil was $65.11 per barrel for the Successor period, compared to $73.58 for the Predecessor period[376] - The average NYMEX oil pricing for the year ended December 31, 2023, was $77.64 per barrel, which is 18% lower than the average price of $94.79 per barrel in 2022[370] - The average realized oil price per barrel after reflecting settled derivatives was $69.06 for the year ended December 31, 2023, compared to $78.09 in 2022[370] - The average NYMEX natural gas pricing for the year ended December 31, 2023, was $2.54 per Mcf, which is 60% lower than the average price of $6.42 per Mcf in 2022[371] - Other revenue increased to $571,189 for the year ended December 31, 2023, up from $255,952 in 2022, attributed to a new contract for water services[382] Expenses and Costs - Lease operating expenses rose to $10,146,119 in 2023, compared to $8,418,739 in 2022, with production expenses per BOE increasing by 53% from $17.79 to $27.20[383] - Production taxes, transportation, and processing costs decreased to $2,343,862 in 2023 from $3,484,477 in 2022, maintaining 9% of oil and natural gas sales[385] - Depletion, depreciation, and amortization (DD&A) increased to $1,849,876 in 2023 from $1,613,402 in 2022, with DD&A per BOE rising from $3.41 to $4.53[386] - General and administrative expenses surged to $7,253,384 in 2023 from $2,953,202 in 2022, primarily due to increased legal and professional service costs[388] - Interest expense for the Successor period was $1,043,312, while the Predecessor period saw $1,834,208, reflecting increased borrowing costs[391] Financial Position and Cash Flow - The company reported a liquidity position with $27,680,703 in outstanding debt and a working capital deficit of $13,300,601 as of December 31, 2023[398] - Positive cash flow from operations was $8,675,037 for the year ended December 31, 2023, on a pro forma basis[399] - Net cash provided by investing activities in the Successor period was primarily due to Trust Account withdrawals of $49,362,479, offset by cash paid to sellers of $30,827,804[402] Derivative Contracts and Liabilities - The company recorded a gain on derivative contracts of $392,675 for the year ended December 31, 2023, compared to a loss of $4,793,790 in 2022[380] - The company uses derivative financial instruments to mitigate commodity price risk associated with oil prices, with changes in fair value recognized in the consolidated statements of operations[420] - Realized and unrealized gains and losses from derivative financial instruments are reported as a component of revenues in the consolidated statements of operations[420] - Cash flows from derivative contract settlements are reflected in operating activities in the consolidated statements of cash flows[420] Asset Retirement Obligations and Legal Liabilities - The company has significant asset retirement obligations primarily related to plugging and abandoning wells, with future restoration and removal costs being difficult to estimate due to changing technologies and regulations[415] - The present value calculation of asset retirement obligations involves numerous assumptions, including credit-adjusted discount rates and timing of settlement, which can impact the property and equipment balance[416] - The company records liabilities for ongoing litigation and environmental remediation, with actual costs potentially varying from estimates due to changes in laws and regulations[417] Accounting and Reporting - The effects of new accounting pronouncements are discussed in the consolidated financial statements[421] - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[422]
HNR Acquisition p(HNRA) - 2023 Q4 - Annual Report