Production and Revenue - Average daily production for Q1 2024 was 880 BOE per day, down from 1,022 BOE per day in 2023, reflecting a 14% decrease [165]. - Total revenues for Q1 2024 were $3,283,099, a 58% decrease from $7,759,190 in Q1 2023 [180]. - Oil production decreased from 92 MBbl in Q1 2023 to 69 MBbl in Q1 2024, a 25% decline [182]. - Natural gas production fell from 87 MMcf in Q1 2023 to 67 MMcf in Q1 2024, a 23% decrease [182]. - The average realized price on a BOE basis including settled commodity derivatives was $62.53 in Q1 2024, down from $65.88 in Q1 2023 [180]. Pricing - Average realized oil price per barrel in Q1 2024 was $70.06, down from $73.45 in Q1 2023, representing a 5% decrease [176]. - The average realized oil price per barrel for the three months ended March 31, 2024, was $70.06, down from $73.45 in the same period of 2023, reflecting a decrease of approximately 3.26% [184]. - The average NYMEX oil price for Q1 2024 was $77.56 per barrel, a 2% increase from $76.08 in Q1 2023 [175]. Expenses - Lease operating expenses increased by 6.8% to $3,123,525 for the three months ended March 31, 2024, compared to $2,923,802 for the same period in 2023, with production expenses per BOE rising 42% from $27.50 to $38.96 [186]. - General and administrative expenses rose significantly to $2,309,824 for the three months ended March 31, 2024, compared to $1,271,416 in the same period of 2023, primarily due to increased costs associated with being a public company [190]. - Interest expense surged to $1,860,582 for the three months ended March 31, 2024, compared to $315,092 for the same period in 2023, driven by the Senior Secured Term Loan and Private Notes Payable [191]. Derivative Instruments - The company recorded a loss of $1,997,247 on derivative instruments in Q1 2024, compared to a gain of $417,034 in Q1 2023 [180]. - For the three months ended March 31, 2024, the company recorded a loss on derivative contracts of $1,997,247, compared to a gain of $417,034 for the same period in 2023, indicating a significant decline in performance [183]. - The Company uses derivative financial instruments to mitigate exposure to commodity price risk, with fair value determined using industry-standard models [213]. - Realized and unrealized gains and losses from derivative financial instruments are reported as a component of revenues in the consolidated statements of operations [213]. Financial Position - The company reported a working capital deficit of $24,263,954 as of March 31, 2024, raising substantial doubt about its ability to continue as a going concern within one year [195]. - Net cash provided by operating activities was $1,526,558 for the three months ended March 31, 2024, a decrease from $3,207,922 in the same period of 2023, primarily due to decreased production volumes [197]. - Net cash used in investing activities for the three months ended March 31, 2024, was $997,716, primarily related to development costs for the company's reserves [199]. - As of March 31, 2024, the company had outstanding debt totaling $45,388,029, with $13,098,952 due within one year, including a $5,000,000 estimated excess cash flow payment [195]. Other Information - The company operates 100% of its net acreage, totaling approximately 13,700 gross acres [164]. - The conveyance of a 10% Override royalty interest to Pogo Royalty resulted in a loss of $816,011 [178]. - 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, pending SEC approval [196]. - The fair value of the Forward Purchase Agreement liability was estimated using a Monte-Carlo Simulation, considering future stock price simulations based on Geometric Brownian Motion [212].
HNR Acquisition p(HNRA) - 2024 Q1 - Quarterly Report