XML 38 R20.htm IDEA: XBRL DOCUMENT
v3.24.1

Note 13 - Fair Value Measurements | 12 Months Ended
--- | ---
Dec. 31, 2023
Notes to Financial Statements |
Fair Value Disclosures [Text Block] | 13. FAIR VALUE MEASUREMENTS The Company’s fair value measurements are estimated pursuant to a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, giving highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability, and may affect the valuation of the assets and liabilities and their placement within the hierarchy level. The three levels of inputs that may be used to measure fair value are defined as: Level 1 - Quoted prices for identical assets and liabilities traded in active markets. Level 2 - Observable inputs other than Level 1 that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in active markets, or other observable inputs that can be corroborated by observable market data. Level 3 - Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The following is a description of the valuation methodologies used for complex financial instruments measured at fair value: Recurring Fair Value Measurements Commodity Derivative Instruments The Company measures the fair value of commodity derivative contracts using an income valuation technique based on the contract price of the underlying positions, crude oil and natural gas forward curves, discount rates, and Company or counterparty non-performance risk. The fixed-price swaps and collar derivative contracts are included in Level 2. The fair value of commodity derivative contracts and their presentation in our Consolidated Balance Sheets as of December 31, 2023 are presented below:
As of December 31, 2023
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Net Fair Value |
|  | Quoted Prices in |  |  |  |  |  |  | Significant |  |  |  |  |  |  |  |  |  |  | Presented in the |
|  | Active Markets for |  |  | Significant Other |  |  | Unobservable |  |  |  |  |  |  |  |  |  | Consolidated |
|  | Identical Assets |  |  | Observable Inputs |  |  | Inputs |  |  | Total |  |  | Effect of |  |  | Balance |
|  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Fair Value |  |  | Netting |  |  | Sheet |
|  | (in thousands) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity derivatives |  | $ | - |  |  | $ | 1,844 |  |  | $ | - |  |  | $ | 1,844 |  |  | $ | - |  |  | $ | 1,844 |
Net derivative instruments |  | $ | - |  |  | $ | 1,844 |  |  | $ | - |  |  | $ | 1,844 |  |  | $ | - |  |  | $ | 1,844 |
As of December 31, 2022 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Net Fair Value |
|  | Quoted Prices in |  |  |  |  |  |  | Significant |  |  |  |  |  |  |  |  |  |  | Presented in the |
|  | Active Markets for |  |  | Significant Other |  |  | Unobservable |  |  |  |  |  |  |  |  |  |  | Consolidated |
|  | Identical Assets |  |  | Observable Inputs |  |  | Inputs |  |  | Total |  |  | Effect of |  |  | Balance |
|  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Fair Value |  |  | Netting |  |  | Sheet |
|  | (in thousands) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity derivatives |  | $ | - |  |  | $ | 488 |  |  | $ | - |  |  | $ | 488 |  |  | $ | (488 | ) |  | $ | - |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity derivatives |  | $ | - |  |  | $ | (2,182 | ) |  | $ | - |  |  | $ | (2,182 | ) |  | $ | 488 |  |  | $ | (1,694 | )
Net derivative instruments |  | $ | - |  |  | $ | (1,694 | ) |  | $ | - |  |  | $ | (1,694 | ) |  | $ | - |  |  | $ | (1,694 | )
Marketable Equity Securities Valuation Methodologies We measure the fair value of marketable equity securities based on quoted market prices obtained from independent pricing services. The Company has an investment in the marketable equity securities of Anfield Energy (“Anfield”), which it acquired as consideration for sales of certain mining operations. Anfield is traded in an active market under the trading symbol AEC:TSXV and has been classified as Level 1.
|  | December 31, |
|  | 2023 |  |  | 2022 |
Number of shares owned |  |  | 2,421,180 |  |  |  | 2,421,180 |
Quoted market price |  | $ | 0.06789 |  |  | $ | 0.04429 |
Fair value |  | $ | 164,375 |  |  | $ | 107,234 |
Credit Facility The Company’s credit facility approximates fair value because the interest rate is variable and reflective of market rates. Other Financial Instruments The carrying value of financial instruments included in current assets and current liabilities approximate fair value due to the short-term nature of those instruments. Nonrecurring Fair Value Measurements Asset Retirement Obligations The Company measures the fair value of asset retirement obligations as of the date a well is acquired, the date a well begins drilling, or the date the Company revises its ARO assumptions. The Company’s estimated asset retirement obligation is based on historical experience in plugging and abandoning wells, estimated economic lives, estimated plugging and abandonment costs and federal and state regulatory requirements, all unobservable inputs, and therefore, are designated as Level 3 within the valuation hierarchy. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised upward. The credit adjusted risk-free rate used to discount the Company’s plugging and abandonment liabilities range from 7.30% to 19.00%. See "Note 8. Asset Retirement Obligations." Other Assets and Liabilities The Company evaluates the fair value on a non-recurring basis for properties acquired in asset acquisitions using inputs that are not observable in the market and are therefore designated as Level 3 inputs within the fair value hierarchy. The Company evaluated the fair value of its January 2022 asset acquisition based on discounted future cash flows using estimated production at estimated prices based on NYMEX strip pricing adjusted for differentials, operating costs, production taxes and development costs, all discounted at 10%. This evaluation resulted in an estimate of fair value of $87.7 million. The Company has also valued asset acquisitions using a multiple of expected cash flows based on comparable transactions. For the asset acquisition of East Texas assets that was completed on July 27, 2022, the Company used a cash flow multiple of approximately 1.75 times estimated cash flows of $7.3 million. The Company evaluates the fair value on a non-recurring basis of its Riverton, Wyoming real estate assets when circumstances indicate that the value has been impaired. At December 31, 2023 and 2022, the Company estimated the fair value of its real estate assets based on a market approach with comparison to recent comparable sales, all Level 3 inputs within the fair value hierarchy.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration