XML 24 R8.htm IDEA: XBRL DOCUMENT

Acquisition of New Horizon Resources

3 Months Ended

Mar. 31, 2020

2. ACQUISITION OF NEW HORIZON RESOURCES

On March 1, 2020, The Company acquired all of the issued and outstanding equity interests of New Horizon Resources LLC (“New Horizon”). Its assets include acreage and operated producing properties in North Dakota (the “Properties”). The consideration paid at closing consisted of 59,498 shares of the Company’s common stock, $150,000 in cash and the assumption of certain liabilities (the “Acquisition”). The Acquisition gives the Company operated properties in its core area of operations. The Properties consist of nine gross wells (five net wells), and approximately 1,300 net acres located primarily in McKenzie and Divide Counties, North Dakota, which are 100% held by production, average a 63% working interest and produced approximately 30 net barrels of oil equivalent per day (88% oil) for the six-month period ended December 31, 2019.

	Amount
	(in thousands)
Fair value of net assets:
Proved oil and natural gas properties	$	564
Other current assets		14
Other long-term assets		58
Total assets acquired		636
Asset retirement obligations		(163	)
Current payables		(50	)
Credit facility		(61	)
Net assets acquired	$	362
Fair value of consideration paid for net assets:
Cash consideration	$	150
Issuance of common stock (59,498 shares at $4.04 per share)		240
Cash acquired		(28	)
Total fair value of consideration transferred	$	362

For the three months ended March 31, 2020, the Company recorded revenues of approximately $6 thousand and lease operating expenses of approximately $4 thousand related to the New Horizon properties. Assuming that the acquisition of the New Horizon properties had occurred on January 1, 2019, the Company would have recorded revenues of $32 thousand and expenses of $25 thousand for the three months ended March 31, 2020, and revenues of $60 thousand and expenses of $21 thousand for the three months ended March 31, 2019. These results are not indicative of the results that would have occurred had the Company completed the acquisition on the date indicated, or that would be attained in the future. Subsequent to the closing of the acquisition the Company repaid the outstanding balance on the credit facility and the credit facility was closed.