CAPITALIZED DRILLING COSTS AND OIL AND GAS PROPERTIES

6 Months Ended

Sep. 30, 2022

Capitalized Drilling Costs And Oil And Gas Properties

CAPITALIZED DRILLING COSTS AND OIL AND GAS PROPERTIES

NOTE 6: CAPITALIZED DRILLING COSTS AND OIL AND GAS PROPERTIES

Capitalized Drilling Costs

In January 2021, the Company commenced a drilling program on their Deshotel 24H well included in their proved reserves. The Company acquired $1,797,695 along with accumulated depletion of $1,459,252 related to the Deshotel 24H well that are recorded as capitalized drilling costs. Depletion expense for the six months ended September 30, 2022 and 2021 for the capitalized drilling costs was $80,244 and $417,810, respectively. As of September 30, 2022, the capitalized drilling costs were $322,806.

Oil and Gas Properties

The Company acquired $2,905,947 in proved reserves, $4,908,087 in undeveloped reserves, and $2,293,449 in accumulated depletion on these reserves in the acquisition of White River on July 25, 2022. Since the acquisition was a reverse merger transaction, the historical balances are those of White River. On August 1, 2022, the Company sold net reserves of $63,969 for the assumption of plugging liabilities of $95,125, for a net gain of $31,156.

The following table summarizes the Company’s oil and gas activities by classification for the periods ended September 30, 2022 and 2021.

Activity Category	March 31, 2022			Adjustments (1)			September 30, 2022
Proved Developed Producing Oil and Gas Properties
Cost	$	4,915,968		$	(2,231,401	)	$	2,684,567
Accumulated depreciation, depletion and amortization		(3,225,527	)		1,059,850			(2,165,677	)
Changes in estimates		-			-			-
Total	$	1,690,441		$	(1,171,551	)	$	518,890
Undeveloped and Non-Producing Oil and Gas Properties
Cost	$	4,936,352		$	(28,266	)	$	4,908,086
Changes in estimates		-			-			-
Total	$	4,936,352		$	(28,266	)	$	4,908,086
Grand Total	$	6,626,793		$	(1,199,817	)	$	5,426,976

Activity Category	March 31, 2021			Adjustments (1)			September 30, 2021
Proved Developed Producing Oil and Gas Properties
Cost	$	7,223,379		$	-		$	7,223,379
Accumulated depreciation, depletion and amortization		(739,037	)		(722,344	)		(1,461,381	)
Changes in estimates		-			-			-
Total	$	6,484,342		$	(722,344	)	$	5,761,998
Undeveloped and Non-Producing Oil and Gas Properties
Cost	$	5,868,137		$	-		$	5,868,137
Changes in estimates		-			-			-
Total	$	5,868,137		$	-		$	5,868,137
Grand Total	$	12,352,479		$	(722,344	)	$	11,630,135

(1) Relates to dispositions of reserves, and depletion expenses.