v3.26.1
Supplemental Information on Oil and Natural Gas Operations (Unaudited)
 12 Months Ended
Dec. 31, 2025
Supplemental Information on Oil and Natural Gas Operations (unaudited) [Abstract]  
SUPPLEMENTAL INFORMATION ON OIL AND NATURAL GAS OPERATIONS (UNAUDITED)

25. SUPPLEMENTAL INFORMATION ON OIL AND NATURAL GAS OPERATIONS (UNAUDITED)

 

The Company is engaged in the acquisition, development, and production of crude oil and, to a lesser extent, natural gas, with operations conducted exclusively within the United States.

 

The Company completed the acquisition of substantially all of its proved oil and gas reserves in 2025. Accordingly, the Company had no proved reserves at December 31, 2024.

 

Net Proved Oil and Gas Reserve Quantities

 

Proved reserves are those quantities of crude oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are reserves expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are reserves expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

 

The Company’s proved reserves were estimated by an independent petroleum engineer, in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission and ASC Topic 932. The reserve estimates are based on a 12-month unweighted arithmetic average of the first-day-of-the-month West Texas Intermediate (WTI) Cushing benchmark price for each month during 2025, which equaled $66.01 per barrel, held constant over the life of the properties. No economic value has been assigned to associated natural gas.

 

The following table presents changes in the Company’s estimated proved reserves. As of December 31, 2025, none of the Company’s total proved reserves were classified as proved developed non-producing.

 

    Crude Oil
(Bbl)		  
Proved reserves, December 31, 2024     -  
Revisions of previous estimates     -  
Improved recovery     -  
Extensions and discoveries     -  
Purchases of reserves in place     152,595  
Sales of reserves in place     -  
Production     (4,695 )
Proved reserves, December 31, 2025     147,900  

 

Proved reserves by category at December 31, 2025 where:

 

Reserve Subcategory   Oil (Bbl)  
Proved developed producing (PDP)     147,900  
Proved developed non-producing (PDNP)     -  
Proved undeveloped (PUD)     -  
Total proved reserves     147,900  

 

Capitalized Oil and Natural Gas Costs

 

The aggregate capitalized costs relating to the Company’s oil and gas producing activities, with applicable accumulated depreciation, depletion, amortization, and impairment, are as follows at December 31, 2025:

 

Proved properties - NAHD (Feb 2025)     5,226,632.00  
Proved properties - Sherman Oil     1,000,000.00  
Unproved properties     60,000.00  
Total gross capitalized costs     6,286,632.00  
Less: Accumulated full-cost write downs     -2,082,613.00  
Less: Accumulated depreciation, depletion, amortization     -199,430.00  
Net capitalized costs     4,004,589.00  

 

Costs Incurred in Oil and Natural Gas Activities

 

The Company’s costs incurred in oil and gas property acquisition, exploration, and development activities for the year ended December 31, 2025 are summarized below:

 

       
Acquisition costs - proved properties   $ 4,449,297  
Acquisition costs - unproved properties     60,000  
Exploration costs     -  
Development costs     -  
Asset retirement costs capitalized     1,777,335  
Total costs incurred   $ 6,286,632  

 

Results of Operations from Oil and Natural Gas Producing Activities

 

The Company’s results of operations from oil and gas producing activities for the year ended December 31, 2025 are presented below. These results exclude corporate general and administrative expenses, interest expense, and other items not directly associated with oil and gas producing activities.

 

       
Oil and gas revenues   $ 288,467  
Production costs:        
Lease operating expenses     (691,461 )
Production taxes (severance)     (13,299 )
Ad valorem taxes     -  
Total production costs     (704,760 )
Exploration expenses     -  
Depreciation, depletion, and amortization     (199,430 )
Full-cost ceiling test write-down     (2,082,613 )
Results of operations before income taxes     (2,698,336 )
Income tax benefit (at 21% federal statutory rate)     566,650  
Results of operations from oil and gas producing activities   $ (2,131,686 )

 

Standardized Measure of Discounted Future Net Cash Flows

 

The standardized measure of discounted future net cash flows is based on the unweighted arithmetic average, first-day-of-the-month price for the rolling 12-month period. The projections should not be viewed as realistic estimates of future cash flows, nor should the “standardized measure” be interpreted as representing current value to the Company. Material revisions to estimates of proved reserves may occur in the future; development and production of the reserves may not occur in the periods assumed; actual prices realized are expected to vary significantly from those used; and actual costs may vary.

 

The following table sets forth the standardized measure of discounted future net cash flows attributable to the Company’s proved oil and natural gas reserves as of December 31, 2025:

 

       
Future cash inflows   $ 9,762,879  
Future production costs     (3,349,805 )
Future development costs(1)     (1,490,000 )
Future income tax expenses     (1,033,846 )
Future net cash flows     3,889,228  
10% annual discount for estimated timing of cash flows     (1,456,880 )
Standardized measure of discounted future net cash flows   $ 2,432,348  

 

(1) Future development costs included an additional aggregate plugging liability of approximately $300,000 on a present-value basis exists.

 

The changes in the Standardized Measure for the year ended December 31, 2025 are presented below. Because the Company had no proved oil and gas reserves at December 31, 2024, the activity in 2025 reflects (i) the acquisition of substantially all of the Company’s proved reserves in 2025, presented as a purchase of reserves in place; (ii) the sale of oil produced during the period, net of associated production costs; (iii) the accretion of the discount on the acquired Standardized Measure during the remainder of the year; and (iv) the recognition of the related future income tax expense.

 

Principal changes in the standardized measure of discounted future net cash flows attributable to the Company’s proved reserves are as follows:

 

Standardized measure, December 31, 2024   $ -  
Sales of oil and gas produced, net of production costs     416,292  
Net changes in prices and production costs     -  
Extensions, discoveries, additions, and improved recovery     -  
Development costs incurred during the period     -  
Revisions of previous quantity estimates     -  
Accretion of discount     212,830  
Net change in income taxes     (646,574 )
Purchases of reserves in place     2,449,799  
Sales of reserves in place     -  
Changes in production timing and other     -  
Standardized measure, December 31, 2025   $ 2,432,348