Property and Equipment

9 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]


	March 31, 2021		June 30, 2020
Oil and natural gas properties:
Property costs subject to amortization	$	107,666,009	$	107,390,379
Less: Accumulated depreciation, depletion, amortization and impairment	(69,359,708)		(40,878,098)
Oil and natural gas properties, net	$	38,306,301	$	66,512,281
Other property and equipment:
Furniture, fixtures, and office equipment, at cost	$	154,731	$	154,731
Less: Accumulated depreciation	(142,522)		(137,092)
Other property and equipment, net	$	12,209	$	17,639

During the nine months ended March 31, 2021 and 2020, the Company incurred capital expenditures of $0.3 million and $1.3 million, respectively.

On May 7, 2021, the Company closed on substantially all of the previously announced acquisition of an approximate 17% working interest and a 14% revenue interest in non-operated oil and gas assets in the Barnett Shale from Tokyo Gas Americas for $18.2 million, net of preliminary purchase price adjustments. Refer to Note 17 - Subsequent Events for more details.

On November 1, 2019, the Company acquired its 23.5% non-operating working interest and a 19.7% revenue interest in the Hamilton Dome unitized field located in Hot Springs County, Wyoming, from the Merit Energy Company. As a result of this cash purchase combined with its subsequent purchase adjustments, the Company recorded a purchase cost of $9.3 million and also recognized $0.9 million in non-cash asset retirement obligations.

The Company uses the full cost method of accounting for its investments in oil and natural gas properties. All costs of acquisition, exploration, and development of oil and natural gas reserves are capitalized as the cost of oil and natural gas and properties when incurred. To the extent capitalized costs of evaluated oil and natural gas properties, net of accumulated depletion, exceed the discounted future net revenues of proved oil and natural gas reserves, net of deferred taxes, such excess capitalized costs result in an impairment charge.

At March 31, 2021, the ceiling test value of the Company’s reserves was calculated based on the first-day-of-the-month average for the 12-months ended March 31, 2021 of the West Texas Intermediate (WTI) crude oil spot price of $39.95 per barrel, adjusted by market differentials by field. The net price per barrel of NGLs was $8.39, which does not have any single comparable reference index price. The NGL price was based on historical prices received. Using these prices, the Company’s net book value of oil and natural gas properties at March 31, 2021 did not exceed the current ceiling.

At December 31, 2020, the Company recorded a $15.2 million ceiling test impairment charge. The ceiling test impairment was driven by a decrease in the first-day-of-the-month average for crude oil used in the ceiling test calculation, from $43.63 per

barrel at September 30, 2020 to $39.54 per barrel at December 31, 2020. The first-day-of-the-month average oil price as of December 31, 2020 continued to be heavily influenced by the extremely low oil prices realized in March through May of 2020 combined with the roll off of high oil prices during the quarter ended December 31, 2019.

At September 30, 2020, the Company recorded a $9.6 million ceiling test impairment charge. The ceiling test impairment was driven by a decrease in the first-day-of-the-month average price for crude oil used in the ceiling test calculation, from $47.37 per barrel at June 30, 2020 to $43.63 per barrel at September 30, 2020 together with adverse changes in differentials received in the Delhi field. The first-day-of-the-month average oil price as of September 30, 2020 was heavily influenced by the extremely low oil prices realized in March through May of 2020 combined with the roll off of high oil prices during the quarter ended September 30, 2019.