Properties And Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Properties And Equipment

11. PROPERTIES AND EQUIPMENT

Assets and liabilities held for sale

In the quarter ended December 31, 2022, the Company entered into two agreements to sell working interest in the Arkoma Basin and the Eagle Ford Play. The Company recorded an impairment of $6.1 million to reduce the net book value of the working interest in the Arkoma Basin to fair value less cost to sell. As of December 31, 2022, the Arkoma Basin and Eagle Ford Play working interests had a net carrying value of approximately $5.5 million and were considered held for sale, resulting in the reclassification of $6.4 million of properties, plants and equipment (PP&E) to “Held for sale assets” and $0.9 million of asset retirement obligations, to “Held for sale liabilities” on the balance sheet. The Company received $0.8 million in deposits related to the held for sale assets recorded in “Accrued liabilities and other” on the balance sheet, which is included in the Investing Activities section of the Condensed Statements of Cash Flows for the three months ended December 31, 2022. The sales of the Arkoma Basin and Eagle Ford Play closed in January of 2023.

Impairment

During the year ended December 31, 2023, the Company recorded no impairment provisions on producing properties and $38,533 on wells that were assigned back to the operator and the Company wrote off.

During the three months ended December 31, 2022, the Company recorded no impairment provisions on producing properties, other than those held for sale discussed above.

During the year ended September 30, 2022, the Company recorded no impairment provisions on producing properties and $14,565 on wells that were assigned back to the operator and the Company wrote off.

A further reduction in natural gas, oil and NGL prices or a decline in reserve volumes may lead to additional impairment in future periods that may be material to the Company.

Acquisitions

Quarter Ended	Net royalty acres (1)(2)	Cash	Number of shares (3)	Total Purchase Price (1)(4)	% Proved / % Unproved	Area of Interest
December 31, 2023
	325	$4.3 million	-	$4.3 million	72% / 28%	Haynesville / SCOOP
September 30, 2023
	974	$13.4 million	-	$13.4 million	81% / 19%	Haynesville / SCOOP
June 30, 2023
	151	$1.8 million	-	$1.8 million	29% / 71%	Haynesville / SCOOP
March 31, 2023
	912	$10.8 million	-	$10.8 million	44% / 56%	Haynesville / SCOOP
December 31, 2022
	1,256	$14.6 million	-	$14.6 million	32% / 68%	Haynesville / SCOOP
September 30, 2022
	924	$13.6 million	-	$13.6 million	73% / 27%	Haynesville / SCOOP
June 30, 2022
	938	$9.1 million	-	$9.1 million	58% / 42%	Haynesville / SCOOP
March 31, 2022
	825	$9.3 million	-	$9.3 million	63% / 37%	Haynesville / SCOOP
December 31, 2021
	1,884	$11.3 million	1,519,481	$14.8 million	52% / 48%	Haynesville / SCOOP

(1) Excludes subsequent closing adjustments and insignificant acquisitions.

(2) An estimated net royalty equivalent was used for the unleased minerals included in the net royalty acres.

(3) The Company’s policy is to classify all costs associated with equity issuances as financial costs in the Statements of Cash Flows.

(4) Table excludes transaction costs of $0.3 million, $0.1 million, and $0.7 million, respectively, that were capitalized during the year ended December 31, 2023, the three months ended December 31, 2022, and the year ended September 30, 2022.

All purchases made in calendar years 2022 and 2023 were of mineral and royalty acreage and were accounted for as asset acquisitions.

Divestitures

Quarter Ended	Net mineral acres(1)/ Wellbores(2)	Sale Price (3)	Gain/(Loss) (3)	Location
December 31, 2023
	No significant divestitures
September 30, 2023
	729 acres	$0.3 million	$0.2 million	OK
June 30, 2023
	No significant divestitures
March 31, 2023
	755 acres	$0.3 million	$0.3 million	OK / TX
	267 wellbores	$10.7 million	$4.1 million(4)	OK / TX
December 31, 2022
	4,743 acres	$1.0 million	$0.8 million	OK / TX
September 30, 2022
	87 acres	$0.1 million	$0.1 million	TX
	224 wellbores	$5.3 million	$3.6 million	OK / AR / ND
June 30, 2022
	2,381 acres	$0.5 million	$0.5 million	AR / OK / TX
	27 wellbores	$0.5 million	$0.2 million	OK
March 31, 2022
	7,201 acres	$2.1 million	$2.1 million	NM / TX
December 31, 2021
	692 wellbores	$4.6 million	($2.2) million	AR / OK / TX

(1) Number of net mineral acres sold.

(2) Number of gross wellbores associated with working interests sold.

(3) Excludes subsequent closing adjustments and immaterial divestitures.

(4) Excludes $6.1 million loss recognized as an impairment in the quarter ended December 31, 2022 related to assets and liabilities held for sale as of December 31, 2022.

Asset Retirement Obligations

The following table shows the activity for the year ended December 31, 2023, the three month period ended December 31, 2022, and the year ended September 30, 2022, relating to the Company’s asset retirement obligations:

	Year Ended December 31,				Three Months Ended December 31,				Year Ended September 30,
	2023				2022				2022
Asset retirement obligations as of beginning of the period	$	1,916,932		(1)	$	1,901,904			$	2,836,172
Wells acquired or drilled		-				-				-
Wells sold or plugged		(898,231	)			(5,938	)			(1,027,030	)
Accretion of discount		43,438				20,966				92,762
Asset retirement obligations as of end of the period	$	1,062,139			$	1,916,932		(1)	$	1,901,904

(1) The December 31, 2022 balance includes $0.8 million related to the held for sale liabilities at December 31, 2022.

As a non-operator, the Company does not control the plugging of wells in which it has a working interest and is not involved in the negotiation of the terms of the plugging contracts. This estimate relies on information gathered from outside sources as well as relevant information received directly from operators.