XML 19 R9.htm IDEA: XBRL DOCUMENT v3.23.2
Property
 6 Months Ended
Jun. 30, 2023
Property, Plant and Equipment [Abstract]  
Property

Note 3 – Property

 

The Company follows the successful efforts method of accounting for its oil and natural gas properties. Under this method, costs to acquire oil and natural gas properties and costs incurred to drill and equip development and exploratory wells are capitalized. Exploration costs are charged to operations as incurred. Upon sale or retirement of oil and natural gas properties, the costs and related accumulated depreciation, depletion and amortization are eliminated from the accounts and the resulting gain or loss is recognized.

 

Costs incurred to maintain wells and related equipment and lease and well operating costs are charged to expense as incurred.

 

Depletion is calculated on a units-of-production basis at the field level based on total proved developed reserves.

 

In May 2023, the Company signed an agreement for the purchase of additional working interests in its New Mexico properties and remitted a deposit of $670,000. The acquisition closed on August 9, 2023 (See Note 16).

 

Proved Properties and Impairments

 

Proved oil and natural gas properties are reviewed for impairment at least annually, or as indicators of impairment arise. There have been no indicators of impairment during the six months ended June 30, 2023.

  

Aggregate capitalized costs of oil and natural gas properties are as follows:

          
   June 30, 2023   December 31, 2022 
Proved properties  $67,020,351   $52,831,131 
Unproved properties   2,965,421    2,865,556 
Work in process   —    8,289,652 
Gross capitalized costs   69,985,772    63,986,339 
           
Depreciation, depletion, amortization and impairment   (21,336,969)   (20,116,696)
Total oil and gas properties, net  $48,648,803   $43,869,643 
           

 

Depletion and amortization expense for the three months ended June 30, 2023 and 2022 was approximately $657,000 and $430,000, respectively. Depletion and amortization expense for the six months ended June 30, 2023 and 2022 was approximately $1,221,000 and $830,000, respectively.

 

Other property and equipment consists of operating lease assets, vehicles, office furniture, and equipment with lives ranging from three to five years.

 

          
   June 30, 2023   December 31, 2022 
Other property and equipment, at cost  $2,312,404   $1,878,325 
Less: accumulated depreciation   (785,846)   (436,796)
Other property and equipment, net  $1,526,558   $1,441,529 
           

 

 

Depreciation expense for the three months ended June 30, 2023 and 2022 was approximately $54,000 and $26,000, respectively. Depreciation expense for the six months ended June 30, 2023 and 2022 was approximately $113,000 and $59,000, respectively.