Financial Data and Key Metrics Changes - The average price of oil dropped from $70 to $61 per barrel, but hedging mitigated this drop, keeping overall revenues flat [17][18] - Revenues remained level as hedging efforts offset a temporary dip in production [16] - Interest expense decreased by $230,000 per quarter compared to 2024, reflecting ongoing balance sheet improvements [17][20] Business Line Data and Key Metrics Changes - Production at the Grayburg Jackson field increased from approximately 800 barrels per day to about 920 barrels per day, with a goal to reach 1,400 to 1,500 barrels per day by year-end [12][30] - The South Justice field's production rose from 88 barrels per day at acquisition to 117 barrels per day after reactivating idle wells [36][37] Market Data and Key Metrics Changes - The company is targeting funding between $40 million and $50 million to support operations and reduce debt [8][27] - The company anticipates being cash flow positive in Q4 2025, with a significant increase in cash flow expected from debt reduction [13][14] Company Strategy and Development Direction - The company is focused on increasing production through horizontal drilling, with plans to kick off a drilling program in late Q1 2026 [35][62] - Management aims to retire senior debt and seller obligations, which will significantly enhance cash flow [13][27] - The company is exploring overriding royalty interest (ORE) as a financing strategy to avoid dilution of shares and reduce financial risk [58][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about transitioning from a struggling company to a more successful entity, with significant potential for growth in 2026 [40][84] - The management team is confident in their ability to navigate the current oil market, despite potential price fluctuations [47][48] Other Important Information - The company has made significant progress in reducing general and administrative costs, with ongoing efforts to further decrease expenses [19][73] - The company has successfully reduced senior debt from $28 million to approximately $21 million [20] Q&A Session Summary Question: What are the expectations for oil prices going into winter? - Management indicated that oil prices may remain in the $60 range, with geopolitical factors influencing market conditions [46][48] Question: Will Chevron be purchasing the oil produced from new wells? - Management confirmed Chevron's interest in purchasing increased production, indicating a positive relationship with the buyer [52] Question: How important are the four rigs on both properties for the next two quarters? - Management emphasized the critical role of the rigs in boosting production, with plans to optimize their use across fields [69][70] Question: Is there a plan to reduce legal consulting expenses? - Management acknowledged ongoing discussions to reduce costs and improve efficiency in legal and consulting services [72][73] Question: What is the expected impact of horizontal drilling on production? - Management explained that horizontal drilling could significantly increase production rates, potentially yielding 400 to 600 barrels per day per well [63][64]