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Commitments And Contingencies | 12 Months Ended
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Dec. 31, 2017
Commitments And Contingencies [Abstract] |
Commitments And Contingencies | 9. Commitments and Contingencies ﻿ The Company as designated operator of the Hoactzin properties was administratively issued an “Incident of Non-Compliance” by BSEE during the quarter ended September 30, 2012 concerning one of Hoactzin’s operated properties. This action called for payment of a civil penalty of $386,000 for failure to provide, upon request, documentation to the BSEE evidencing that certain safety inspections and tests had been conducted in 2011. On July 14, 2015, the federal district court in the Eastern District of Louisiana affirmed the civil penalty without reduction. The Company did not further appeal. In the third quarter of 2015, the Company paid the civil penalty and statutory interest thereon from funds borrowed under its credit facility. In the fourth quarter of 2015, the Company received a return of the cash collateral previously provided to RLI Insurance Company. The Company has not advanced any funds to pay any obligations of Hoactzin and no borrowing capability of the Company has been used in connection with its obligations under the Management Agreement, except for those funds used to pay the civil penalty and interest thereon. ﻿ During the second quarter of 2015, the Company received from Hoactzin a copy of an internal analysis prepared by Hoactzin setting out certain issues that Hoactzin may consider to form the basis of operational and other claims against the Company primarily under the Management Agreement. This analysis raised issues other than the “Incident of Non-Compliance” discussed above. The Company is discussing this analysis, as well as the civil penalty discussed above, with Hoactzin in an effort to determine whether there is possibility of a reasonable resolution of some or all of these matters on a negotiated basis. ﻿ Cost Reduction Measures ﻿ Commencing in the quarter ended March 31, 2015 and continuing through the quarter ended December 31, 2017, the Company implemented cost reduction measures including compensation reductions for each employee as well as members of the Board of Directors. These compensation reductions will remain in place until such time, if any, that the market price of crude oil, calculated as a thirty day trailing average of WTI postings as published by the U.S. Energy Information Administration meets or exceeds $70 per barrel when compensation shall revert to the levels in place before the reductions became effective. At such time, if any, that the market price of crude oil, calculated as a thirty day trailing average of WTI postings as published by the U.S. Energy Information Administration meets or exceeds $85 per barrel, all previous reductions made will be reimbursed, a portion which may be paid in stock, to each employee and members of the Board of Directors if is still employed by the Company or still a member of the Board of Directors. For the period January 1, 2015 through December 31, 2017, the reductions were approximately $395,000. The Company has not accrued any liabilities associated with these compensation reductions. ﻿ Legal Proceedings ﻿ The Company was named as a defendant in a breach of contract lawsuit titled Offshore Oilfield Services, Inc. v. Prime 8 Offshore, LLC and Tengasco, Inc., No 201657156 in the 270th District Court of Harris County, Texas (the “Litigation”) filed in October 2016. The Litigation was dismissed with prejudice to refiling by court order dated October 20, 2017. The Litigation sought recovery of approximately $188,000 in unpaid material and labor costs (plus plaintiff’s attorney’s fees and interest) for offshore operations contracted by Prime8 to be performed by the plaintiff Offshore Oilfield Services, Inc. (“Offshore Oilfield”) upon several properties owned by Hoactzin Partners, LP (“Hoactzin”) in the Gulf of Mexico under a master services agreement signed between Prime8 and Offshore Oilfield in May 2014 (“MSA”). Offshore Oilfield alleged breach of the MSA by Prime8 and Tengasco for failure to pay for materials provided or services performed in 2014 and 2015. Tengasco did not sign the MSA and had no knowledge of it or any other agreement utilized in operation by Hoactzin, Prime8, or any subcontractor on Hoactzin’s Gulf properties. No allegation was made in the Litigation that Tengasco directed or was involved in the performance of the services rendered or materials provided or failure to pay for same. Hoactzin, as opposed to Tengasco, directed Prime8 in the conduct of all matters described in the Litigation and either paid or failed to pay any and all charges for services and materials provided at all of Hoactzin’s properties in the Gulf owned and physically operated exclusively by Hoactzin. ﻿ Hoactzin has also specifically agreed in writing to protect, defend, indemnify, and hold harmless Tengasco from and against any and all claims, demands, and causes of action made or awarded against Tengasco in the Litigation and to pay in the first instance all related losses, damages, costs and expenses relating to the Litigation including damages and plaintiff’s attorney’s fees awarded, and all litigation expenses incurred, the Company’s currently billed attorneys’ fees and court costs, relating to or arising out of Tengasco’s status as a defendant in the Litigation. Hoactzin has borne all the Company’s attorneys’ fees and all costs or obligations upon which the Litigation was settled by agreement. Accordingly, there is no further exposure to the Company as a result of the dismissal of the Litigation with prejudice to refiling.

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