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Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt

Note 8 - Debt

 

The following table represents the Company’s outstanding debt.

 

   December 31, 
   2021   2020 
         
Senior Revolver Loan Agreement  $7,069,500   $8,124,000 
           
Term Loan – PIE   797,010    315,273 
           
Equipment and vehicle notes, 0% to 6.99% interest rates, due in 2025  to 2027 with monthly payments ranging from $400 to $1,400 per month   305,739    57,935 
           
Unsecured Note, Pardus Acquisition   —    378,000 
           
Note Payable to Insurance Provider, bears 3.63% interest, matures November 2022, monthly payments of principal and interest of $50,083   442,515    — 
           
SBA Payroll Protection Program Note Payable   —    160,700 
Total Debt   8,614,764    9,035,908 
Unamortized debt issue costs   —    14,587 
Total debt, net of debt issue costs   8,614,764    9,021,321 
Less Current Maturities   1,700,663    1,301,618 
Total Long-Term Debt  $6,914,101   $7,719,703 

 

 

On July 7, 2021 the Company entered into the Fourth Amendment to its Senior Revolver Loan Agreement (“the Amended Agreement”) with CrossFirst Bank (“CrossFirst”). The maximum amount that can be advanced under the Agreement is $20,000,000 and the existing commitment amount is $7,680,000 which is reduced by $300,000 per calendar quarter beginning September 30, 2021 and includes interest at Wall Street Journal Prime plus 150 basis points (4.75% as of December 31, 2021). The Amended Agreement matures on March 27, 2024. Collateral for the loan is a lien on all of the assets of Empire Louisiana and Empire North Dakota, wholly owned subsidiaries of the Company, and a first priority mortgage lien, pledge of and security interest in not less than 80% of Empire Louisiana’s and Empire North Dakota’s producing oil, gas and other leasehold and mineral interests. The Amended Agreement requires the Company maintain commodity derivatives at certain thresholds based on projected production and, beginning March 31, 2021, to maintain certain covenants including an EBITDAX to interest expense of at least 3:1 and funded debt to EBITDAX of 6:1 on a trailing twelve-month basis and reducing quarterly to 4:1 as of March 31, 2022 and thereafter. As of December 31, 2021, the Company has an outstanding loan balance of $7,069,500 under the Amended Agreement. The current maturities of the Amended Agreement is $1,200,000. The Company was in compliance with the loan covenants at December 31, 2021.

 

In August 2020, concurrent with the Joint Development Agreement with Petroleum and Independent Exploration, LLC (“PIE”), a related party, the Company entered into a term loan agreement dated August 1, 2020, whereby PIE will loan up to $2,000,000, at an interest rate of 6% per annum, maturing August 7, 2024 unless terminated earlier by PIE. The loan proceeds will be used for recompletion or workover of certain designated wells. In addition, the Company assigned 85% working and revenue interest to PIE in the designated wells which will be applied to repayment of the loan. As of December 31, 2021, $797,010 has been advanced from the PIE loan.

 

 

 

On April 1, 2020, in conjunction with the purchase of assets from Pardus Oil & Gas, LLC, the Company entered into an unsecured promissory note agreement with the seller in the amount of $378,000. The note was payable in one installment on April 1, 2021 and bore interest at the one-year LIBOR rate. The note was paid on April 1, 2021.

 

On May 5, 2020, the Company received an SBA Payroll Protection Plan (“PPP”) loan for $160,700. The loan was scheduled to mature on May 5, 2022 and had an interest rate of 1%. In June 2021 the Company was informed that the SBA had forgiven the entire loan balance. Forgiveness is included in Other Income on the Consolidated Statements of Operations.

 

On April 30, 2021 the Company received a Second Draw SBA “PPP” loan for $106,850. The loan was scheduled to mature on April 30, 2026 and bore interest at 1%. In October 2021 the Company was informed that the SBA had forgiven the entire loan balance. Forgiveness is included in Other Income on the Consolidated Statements of Operations.