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ACQUISITIONS
 6 Months Ended
Jun. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS

2. ACQUISITIONS

 

New Horizon Resources

 

On March 1, 2020, the Company acquired all the issued and outstanding equity interests of New Horizon. Its assets include acreage and operated producing properties in North Dakota (the “New Horizon Properties”). The Company accounted for the acquisition of the New Horizon Properties as a business combination. The consideration paid at closing consisted of 59,498 shares of the Company’s restricted common stock, $150,000 in cash and the assumption of certain liabilities (the “New Horizon Acquisition”). The New Horizon Acquisition gives the Company operated properties in its core area of operations. The New Horizon 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 and average a 63% working interest.

 

   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 six months ended June 30, 2021, the Company recorded revenues of approximately $93 thousand, and lease operating and workover expenses of approximately $30 thousand related to the New Horizon Properties. Assuming that the acquisition of the New Horizon properties had occurred on January 1, 2020, the Company would have recorded revenues of $65 thousand and expenses of $91 thousand for the six months ended June 30, 2020. These results are not necessarily indicative of the results that would have occurred had the Company completed the acquisition on the date indicated, or that will be attained in the future. Subsequent to the closing of the New Horizon Acquisition, the Company repaid the outstanding liabilities assumed at closing.

 

FieldPoint Petroleum

 

On September 25, 2020, the Company acquired certain oil and gas properties primarily located in Lea County, New Mexico and Converse County, Wyoming. The properties were acquired from FieldPoint Petroleum Corporation (“FieldPoint”) pursuant to FieldPoint’s Chapter 7 bankruptcy process (the “FieldPoint Properties”). The Company accounted for the acquisition of the FieldPoint Properties as an asset acquisition. The total amount paid for the FieldPoint Properties was $597 thousand, which includes the purchase price of $500 thousand and transaction costs of $97 thousand, of which $29 thousand were paid via the issuance of 7,075 shares of the Company’s common stock. The Company also recorded purchase price adjustments of $31 thousand for net revenues received, less operating expenses related to periods prior to the closing of the transaction. In addition, the Company recorded asset retirement obligations of $203 thousand for the assets acquired. Substantially all of the value of the acquired FieldPoint Properties consist of mature proved developed producing reserves. Following is a summary of the amounts recorded for the assets acquired:

 

   Amount 
    (in thousands) 
Amounts incurred:     
Cash consideration  $500 
Transaction costs   97 
Purchase price adjustments   (31)
Total consideration paid   566 
      
Asset retirement obligations assumed   203 
      
Total evaluated property  $769 

 

 

Acquisition of Liberty County Properties

 

On November 9, 2020, the Company entered into a Purchase and Sale Agreement (the “PSA”) to acquire certain assets from Newbridge Resources LLC (“Newbridge”). The transaction closed on December 1, 2020 with an effective date of November 1, 2020. The assets include operated producing properties in Liberty County, Texas (the “Liberty County Properties”). The Liberty County Properties include 41 wells which have a 100% working interest and an average 86% net revenue interest and approximately 680 net acres located primarily in Liberty County, Texas which are 100% held by production. The Company issued 67,254 shares of its common stock, which at the closing price of $4.24 on the date of the closing of the PSA, were valued at $285 thousand, in consideration for the acquisition. The Company accounted for the acquisition of the Liberty County Properties as an asset acquisition. The total amount paid was $326 thousand including transaction costs of $41 thousand. In addition, the Company recorded asset retirement obligations of $192 thousand for the assets acquired. Substantially all of the value of the Liberty County Properties acquired consisted of mature proved developed producing reserves and proved developed non-producing reserves. Following is a summary of the amounts recorded for the assets acquired:

 

   Amount 
    (in thousands) 
Amounts incurred:     
Value of 67,254 shares issued  $285 
Transaction costs   41 
Total consideration paid   326 
      
Asset retirement obligations assumed   192 
      
Total evaluated property  $518