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Debt and Long Term Note Payable - Related Party
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt and Long Term Note Payable - Related Party

Note 8 – Debt and Long Term Note Payable - Related Party

 

The following table represents the Company’s outstanding debt.

 

   As of December 31, 
   2022   2021 
         
Senior Revolver Loan Agreement  $5,869,500   $7,069,500 
           
Long Term Note Payable – Related Party   1,076,987    797,010 
           
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   252,924    305,739 
           
Note Payable to Insurance Provider, bears 3.63% interest, matures November 2022, monthly payments of principal and interest of $50,083   —    442,515 
Total Debt   7,199,411    8,614,764 
Less: Current Maturities   (2,059,309)   (1,700,663)
Less: Long Term Note Payable – Related Party   (1,076,987)   (797,010)
Long-Term Debt  $4,063,115   $6,117,091 

 

 

On July 7, 2021 the Company entered into the Fourth Amendment to its Senior Revolver Loan Agreement with CrossFirst Bank (“CrossFirst”) as further amended by Letter Agreements in conjunction with redetermination dates (“the Amended Agreement”). The maximum amount that can be advanced under the Agreement is $20,000,000 and the existing commitment amount following a February 27, 2023 Letter agreement is $6,180,000 which is reduced by $500,000 per calendar quarter beginning March 31, 2023 and includes interest at Wall Street Journal Prime plus 150 basis points (9.0% as of December 31, 2022). The Amended Agreement matures on May 26, 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 4:1 on a trailing twelve-month basis. The current maturities of the Amended Agreement is $2,000,000. The Company was in compliance with the loan covenants at December 31, 2022. 

 

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.

 

Long Term Note Payable - Related Party

 

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, 2022, $1,076,987 has been advanced from the PIE loan.