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Derivatives

12 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

DerivativesIt is the Company’s policy to enter into derivative contracts only with counterparties that are creditworthy financial or commodity hedging institutions deemed by management as competent and competitive market makers. As of June 30, 2021, the Company did not have any remaining open derivative contracts.

The Company has in the past and may utilize in the future fixed-price swaps or costless put/call collars to hedge a portion of its anticipated future production. Fixed-price swaps are designed so that the Company receives or makes payments based on a differential between fixed and variable prices for the volumes under contract. A costless collar consists of a sold call, which establishes a maximum price the Company will receive for the volumes under contract, and a purchased put that establishes a minimum price. The Company has elected not to designate its open derivative contracts for hedge accounting. Accordingly, the Company records the net change in the mark-to-market valuation of the derivative contracts and all payments and receipts on settled derivative contracts in “Net (gain) loss on derivative contracts” on the consolidated statements of operations.

						Years Ended June 30,
						2021						2020
Realized (gain) loss						$	2,525,988					$	(528,139)
Unrealized (gain) loss						(1,911,343)						1,911,343
Net (gain) loss on derivative contracts						$	614,645					$	1,383,204

The Company’s derivative contract is recorded at fair market value and is included in the consolidated balance sheets as an asset or a liability. The Company did not have any open positions as of June 30, 2021.

The following sets forth a summary of the Company’s oil derivative positions during the year ended June 30, 2021.

Period

Type of Contract

Volumes in Barrels

Price / Price Range

Weighted Average Floor Price per Bbl.

Weighted Average Ceiling Price per Bbl.

July 2020 to December 2020

Fixed-Price Swap

257,600

$32

$32

$—

The Company nets its derivative instrument fair value amounts executed with the same counterparty. The Company enters into an ISDA with each counterparty prior to a derivative contract with such counterparty. The ISDA is a standard contract that governs all derivative contracts entered into between the Company and the respective counterparty. The ISDA allows for offsetting of amounts payable or receivable between the Company and the counterparty, at the election of both parties, for transactions that occur on the same date and in the same currency.

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- References

No definition available.

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- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-URI http://asc.fasb.org/topic&trid=2229140

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 5
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008

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