2. ACQUISITIONS AND DIVESTITURES

Acquisition of Industrial Gas Acreage

On January 7, 2025, we entered and simultaneously closed the transactions contemplated by, a purchase and sale agreement, with Synergy Offshore LLC (“Synergy”). Synergy is controlled by Mr. Duane H. King, a member of the Board of Directors of the Company, who serves as the Chief Executive Officer and Manager of Synergy, and John A. Weinzierl, the Company’s Chairman, who was then an approximate sixty percent beneficial owner of Synergy. 

We acquired approximately 24,000 net operated acres located across the Kevin Dome structure in Toole County, Montana, including all leases, wells, rights and interests in, under or derived from the acquired acreage subject to Synergy retaining an undivided twenty percent (20%) of Synergy’s right title and interest in the property.

Consideration for the transaction consisted of the following:  (a) $2.0 million in cash, subject to customary adjustments; (b) 1,400,000 shares of the Company’s common stock; (c) a carried working interest whereby the Company agreed to cover and pay for 100% of Synergy’s costs attributable to the Synergy acreage, until the earlier of (i) 78 months from the closing date; or (ii) the date the total costs associated therewith total $20 million; (d) our agreement to pay Synergy 18% of the cash amounts we actually realize from any  law or regulation from our sequestration of carbon oxides or similar substances derived directly from an agreed area of mutual interest including Synergy’s acreage; and (e) our agreement to pay Synergy 18% of any gain we may receive in connection with the sale of the future, first, gas processing plant located on Synergy’s acreage. Total consideration was $4.9 million. The transaction was accounted for as an asset acquisition.

On June 26, 2024, the Company entered into and closed the transactions contemplated by, a purchase and sale agreement with Wavetech Helium ("Wavetech" and the "Purchase Agreement"). Pursuant to the Purchase Agreement, effective June 1, 2024, the Company acquired 82.5% of Wavetech's rights under a farmout agreement for approximately 144,000 net acres located across the Kevin Dome Structure in Toole County, Montana (the "Assigned Rights"). The Assigned Rights vest upon the drilling of two wells on the property. As of December 31, 2025, the Company had completed its drilling commitment on the property. In consideration for the Assigned Rights, the Company paid Wavetech $2.0 million in cash and 2.6 million shares of restricted common stock, which were valued at $2.7 million on June 26, 2024. In addition, prior to the closing of the Purchase Agreement, the Company incurred $0.4 million of transaction costs related to the acquisition of the Assigned Rights. Additionally, the Company agreed to be responsible for 100% of capital costs, including costs related to project exploration, appraisal, development drilling and completion until $20.0 million has been incurred related to Wavetech's 17.5% interest. The Company accounted for the acquisition of the Assigned Rights as an asset acquisition.

Divestitures

During the year ended December 31, 2025, the Company closed on two oil and natural gas property divestments, in Wyoming and in West Texas, for total net proceeds of $0.6 million.  Relief of the associated asset retirement obligations for the properties divested was $5.6 million. The Company recorded the proceeds, net of transaction costs and final settlement adjustments, along with the associated asset retirement obligations to the full cost pool, with no gain or loss recognized in the Consolidated Statement of Operations.

During the year ended December 31, 2024, the Company closed several divestment transactions of its oil and natural gas properties for total net proceeds of $14.0 million before transaction costs of $0.4 million. Relief of the associated asset retirement obligations for the properties divested was $5.4 million. The divestitures included several individual divestitures of wells in Garza, Karnes and Archer County, Texas, Sumner and Pratt County, Kansas, Kay County, Oklahoma and Lea County, New Mexico. The net proceeds from these transactions totaled $7.2 million. These divestitures did not have a significant impact to reserves volumes or the full cost pool depletion rate. As such, the Company recorded the proceeds, net of transaction costs and purchase price adjustments, to the full cost pool, with no gain or loss recognized in the Consolidated Statement of Operations. In addition, on December 31, 2024, the Company closed on the sale of properties in Anderson, Henderson and Liberty County, Texas. This divestiture represented 36% of the reserve volumes and 30% of the reserve value at the date of the divestment, and as such, the Company considered this a significant divestiture and recognized a $5.0 million loss on the sale of the properties in the Consolidated Statement of Operations for the year ended December 31, 2024.