What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-26 · 75 added, 110 removed, 200 unchanged (48% of the section changed)

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When used, the words

“believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,”

and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,”

etc.), or similar expressions, identify certain of these forward-looking statements.

These statements are only predictions and

involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels

of activity, or performance to be materially different from any future results, levels of activity, or performance expressed or

implied by these forward-looking statements.

“believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,”

“expect,” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,”

“should,” etc.), or similar expressions, identify certain of these forward-looking statements.

These statements are

only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s

actual results, levels of activity, or performance to be materially different from any future results, levels of activity, or

performance expressed or implied by these forward-looking statements.

we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,

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be read in conjunction with the audited consolidated financial statements and related notes elsewhere in this Annual Report on

We were incorporated on November 13, 2017,

under the laws of the Commonwealth of Virginia, to acquire, fund, and operate oil exploration and production from assets in the

Gulf States Drill Region.

We are an early-stage corporation seeking to become an independent energy company focused on the acquisition

and subsequent exploitation and development of crude oil and natural gas in the Gulf States Drill Region.

were incorporated on November 13, 2017, under the laws of the Commonwealth of Virginia, to acquire, fund, and operate oil exploration

and production from assets in the Gulf States Drill Region.

We are an early-stage corporation seeking to become an independent

energy company focused on the acquisition and subsequent exploitation and development of crude oil and natural gas in the Gulf

States Drill Region.

our inception, we have incurred operating losses.

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These factors raise substantial doubt about our ability to continue as a going concern.

We expect to incur

expenses and operating losses for the foreseeable future as we seek to implement our business plan.

Due to its limited revenues,

the Acquisitions do not remedy substantial doubts about our ability as a going concern.

The Company has been unable to raise additional

capital as of the date of this Annual Report, other than personal loans by Jeffrey J.

Guzy, our Chief Financial Officer, and $53,000

raised in the initial public offering in 2020.

incur expenses and operating losses for the foreseeable future as we seek to implement our business plan.

Due to its limited

revenues, the Acquisitions do not remedy substantial doubts about our ability as a going concern.

The Company has been unable

to raise additional capital as of the date of this Annual Report, other than personal loans by Jeffrey J.

Guzy, our Chief Financial

Officer, and $53,000 raised in the initial public offering in 2020.

engineering is a process of estimating underground accumulations of oil that cannot be measured in an exact way.

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and Uncertainties

Since March 2020, and throughout the last

three years, global markets and commodity prices have been extremely volatile due to the impacts from the COVID-19 pandemic, with

further impacts on volatility caused by the war in Ukraine that began in February 2022.

Commodity prices remained steady during

the fourth quarter of 2022 as demand has continued to outpace relative supply.

While recessionary concerns have placed some downward

pressure on commodity prices, causing oil and gas prices to decline in the first quarter of 2023 from their earlier highs in 2022,

worldwide commodity demand continues to exceed pre COVID-19 pandemic levels.

Although supply has increased and we have seen continued

recovery in commodity prices since the beginning of the pandemic, there is still an element of volatility and uncertainty that

we expect to continue at least for the near-term and possibly longer, in part by the impact of the Russian-Ukrainian military conflict

on global commodity and financial markets, and the associated effect of trade sanctions on imports of oil and natural gas from

This volatility could negatively impact future prices for oil, natural gas, petroleum products and industrial products.

and natural gas prices have and may continue to be volatile.

Recessionary concerns have placed some downward pressure on commodity

prices, causing oil and gas prices to decline in the first quarter of 2023 from their earlier highs in 2022.

Although supply has

increased throughout the last three years, there is still an element of volatility and uncertainty that we expect to continue

at least for the near-term and possibly longer, in part by the impact of the Russian-Ukrainian military conflict on global commodity

and financial markets, and the associated effect of trade sanctions on imports of oil and natural gas from Russia.

This volatility

could negatively impact future prices for oil, natural gas, petroleum products and industrial products.

of Operations

Year Ended December

31, 2023 Compared to Year Ended December 31, 2022

For the Year Ended December 31,

Lease operating expenses

General & administrative expenses

Depletion and accretion on discounted liabilities

Impairment expense

Loss from operations

Other income (expense)

Revenues were $927,983 for the year ended

December 31, 2023, and $106,554 for the year ended December 31, 2022.

The Company is an early-stage company, having just begun

to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights, and therefore has

just begun producing significant revenue in 2023.

Ended December 31, 2024 Compared to Year Ended December 31, 2023

the Year Ended December 31,

Lease operating

General & administrative

Depletion and accretion

on discounted liabilities

from operations

were $971,686 for the year ended December 31, 2024, and $927,983 for the year ended December 31, 2023.

The Company is an early-stage

company and began producing significant revenue in 2023.

The increase in revenue of $43,703 is attributable to the acquisition

of additional mineral and oil and gas interests during 2024.

and Administrative Expenses

General and administrative expenses consisted

primarily of accounting and audit fees, legal and professional services fees, and payroll-related expenses.

General and administrative

expenses were $1,038,473 for the year ended December 31, 2023, compared to $2,111,761 in the same period in 2022, representing

a decrease of 50.8% or $1,073,288.

The decrease was primarily driven by a decrease in share-based compensation expense.

and administrative expenses consisted primarily of accounting and audit fees, legal and professional services fees, and payroll-related

General and administrative expenses were $919,994 for the year ended December 31, 2024, compared to $1,038,473 in the

same period in 2023, representing a decrease of 11.4% or $118,479.

The decrease was primarily driven by a decrease in management

Operating Expenses

Lease operating expenses were $248,642

for the year ended December 31, 2023, compared to $321,103 in the same period in 2022.

The decrease in lease operating expenses

of 22.6% or $72,461 was primarily driven by $234,396 in workover expenses incurred during the year ended December 31, 2022, with

no comparable activity in the same period in 2023.

The decrease was partially offset by an increase in expense attributable to

production, which is in line with the increase in revenue in 2023.

operating expenses were $355,644 for the year ended December 31, 2024, compared to $248,642 in the same period in 2023.

in lease operating expenses of 43.0% or $107,002 was primarily driven by the 2024 acquisition of additional mineral and oil and

gas interests and the operation of those interests.

from Operations

Total operating loss was $1,627,962 for

the year ended December 31, 2023, and $6,278,331 for the year ended December 31, 2022.

The change in loss was primarily driven

by the decreases in general and administrative expenses and impairment expense.

Income (Expense)

Other income (expense) was ($1,940) for

the year ended December 31, 2023, compared to other income (expense) of $40,716 in the same period in 2022.

The change in other

income (expense) was primarily driven by a $41,665 gain on forgiveness of debt during the year ended December 31, 2022, with no

comparable activity in the same period in 2023.

As a result of the above factors, there

was a net loss of $1,629,902 for the year ended December 31, 2023, compared to a net loss of $6,237,615 in the same period of 2022.

operating loss was $1,608,945 for the year ended December 31, 2024, and $1,627,962 for the year ended December 31, 2023.

in loss was primarily driven by the decrease in general and administrative expenses, offset by the increase in lease operating

expense, net was ($901) for the year ended December 31, 2024, compared to ($1,940) for the same period in 2023.

The change in

other expense, net, was attributable to an increase in interest income.

a result of the above factors, there was a net loss of $1,609,846 for the year ended December 31, 2024, compared to a net loss

of $1,629,902 in the same period of 2023.

and Capital Resources

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2024, and December 31, 2023:

December 31, 2023

December 31, 2022

Current assets

Current liabilities

Working capital deficit

capital deficit

in the net cash provided by and (used in) operating, investing, and financing activities for the years ended December 31, 2024,

and December 31, 2023, are set forth in the following table:

December 31, 2023

December 31, 2022

Net cash provided by/(used in) operating activities

Net cash provided by/(used in) investing activities

Net cash provided by/(used in) financing activities

Cash at beginning of period

Net increase (decrease) in cash

cash provided by/(used in) operating activities

Net cash provided

by investing activities

cash used in financing activities

at beginning of period

increase (decrease) in cash

cash from operating activities is derived from net loss from operations adjusted for non-cash items, changes in accounts receivables

balances, prepaid expenses, accounts payables, and accrued expenses.

For the period ended December 31, 2023, net cash provided

by operating activities was $48,046 compared to net cash used in operating activities of $78,323 for the period ended December

cash used in investing activities was $0 for the periods ended December 31, 2023, and December 31, 2022.

For the period ended December 31, 2024, net cash used in

operating activities was $19,187 compared to net cash provided by operating activities of $48,046 for the period ended December

The net decrease was primarily attributable to a net $317,004 decrease in the non-cash adjustment for common stock issued

for services and salaries.

This change was offset by the net increase in accounts receivable during the period ended December

cash used in investing activities was $0 for both the periods ended December 31, 2024, and December 31, 2023.

net cash used in financing activities was $9,983 for the period ended December 31, 2024.

Net cash provided by financing activities

Net cash used in financing activities

was $9,888 for the periods ended December 31, 2023.

The net decrease was primarily due to the decrease in SBA PPP loans and

the proceeds from the related party loan in 2022.

The net decrease was due to the decrease in payments made of the SBA PPP loan.

accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates

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judgment by our management.

May 9, 2022, the Board of directors of the Company, after discussion with management, determined that the Company’s

previously issued financial statements included in the 2020 Form 10-K need to be restated, to among other things, amend the

statements used in the Original Form 10-K regarding the method of accounting it uses.

On May 31, 2022, the Company filed an amendment

to the Original Form 10-K in which it modified and restated certain statements, including that the Company uses the successful

efforts method of accounting for oil and gas activities.

Under this method, the costs of productive exploratory wells, all development

wells, related asset retirement obligation assets and productive leases are capitalized and amortized, principally by field, on

a units-of-production basis over the life of the remaining proved reserves.

Exploration costs, including personnel costs, geological

and geophysical expenses and delay rentals for oil and gas leases are charged to expense as incurred.

Exploratory drilling costs

are initially capitalized but charged to expense if and when the well is determined not to have found reserves in commercial quantities.

All of our properties are located within the continental United States.

In January 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Codification

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and repairs necessary to maintain properties in operating condition, as well as annual lease rentals, as they are incurred.

dismantlement and abandonment costs are capitalized at their estimated net present value and amortized over the remaining lives

of the related assets.

Interest is capitalized only during the periods in which these assets are brought to their intended use.

dismantlement and abandonment costs are capitalized at their estimated net present value and amortized over the remaining

lives of the related assets.

Interest is capitalized only during the periods in which these assets are brought to their intended

We only capitalize the interest on borrowed funds related to our share of costs associated with qualifying capital expenditures.

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on an SEC average price of $75.81 per Bbl of WTI oil posted and $0 per MCF natural gas.

Prices are adjusted by local field

and lease level differentials and are held constant for the life of reserves in accordance with SEC guidelines.

Prices are adjusted by local field and

lease level differentials and are held constant for the life of reserves in accordance with SEC guidelines.

Deferred income taxes are provided for the difference between the tax basis of assets and liabilities and the

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our tax returns.

Accounting Pronouncements

Issued Accounting Pronouncements

Note 4 in the notes to our consolidated financial statements for further discussion regarding recently issued accounting standards.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis