CoJax Oil & Gas Corp 10-K/A

ITEM 1. BUSINESS Overview We are an early-stage development oil and gas company seeking to become an independent energy company. Our assets and principal properties are located in the Gulf States Drill Region, where we target acquisition and subsequent exploitation and development of crude oil, including acquisitions of hydrocarbon revenues and underlying oil and gas exploration and production rights. We believe that we can establish a profitable niche in crude oil production due to the quality of the light sweet crude oil produced from the Gulf States Drill Region, which is cheaper to refine than crude oil from other regions of the U.S. and Canada. The Company was incorporated in the Commonwealth of Virginia on November 13, 2017, and started its operations on November 17, 2020, upon an acquisition (the “Barrister Acquisition”) of all outstanding capital of Barrister, including all of Barrister’s crude oil and natural gas exploration and production leases and rights owned or controlled by Barrister. In consideration for the Barrister Acquisition, the Company issued 3,650,000 shares of the Company’s common stock, $0.01 par value per share (the “Common Stock”) to the members of Barrister and assumed Barrister’s debt obligations to Central Operating, LLC (“COP”) in principal amount of $2,700,000, which was discharged on November 16, 2021 pursuant to a debt exchange agreement between the Company and COP in exchange for the issuance of 1,350,000 shares of the Company’s Common Stock to COP. Currently we are producing very limited crude oil production from limited oil drilling operations as a result of the Barrister Acquisition. It is insufficient to fund new acquisitions or drilling without additional funding or equity transactions. On November 8, 2022, the Company, through Barrister, its wholly-owned subsidiary, acquired from Taxodium Energy, LLC, a Mississippi limited liability company (“Taxodium”), 100% ownership, right, title and interest in certain properties located in Mississippi and Alabama, including all oil and gas leases, interests, royalties, overriding royalties, subleases, fee estates, net profit interest, and carried interests (collectively, “NONOP Assets”) pursuant to the Assignment, Bill of Sale and Conveyance, dated October 31, 2022, executed by Taxodium. This transaction became effective on October 1, 2022, for accounting purposes, based on when the Company obtained control of the acquired assets. On December 2, 2022, the Company, through Barrister, acquired from Taxodium a 100% ownership, right, title and interests in additional properties located in Mississippi, including certain wells, facilities, the oil gas and mineral leases, together with all surface and subsurface and all operating rights, working interest, and net revenue interest arising out of such leases and rights (collectively, “Buckley Assets”) pursuant to the Assignment, Bill of Sale and Conveyance, dated December 2, 2022, executed by Taxodium and Barrister. While the Company acquired these new properties, including drilling wells, currently, these wells have very limited productions, not sufficient for the Company to become profitable. On May 31, 2024, the Company, through Barrister, its wholly-owned subsidiary, completed the acquisition of certain various mineral and oil and gas properties, lands and leases located in Mississippi and related assets from Liberty Operating Company, LLC (“Liberty”) pursuant to the Assignment and Bill of Sale, entered into and executed by Barrister and Liberty on May 31, 2024. The Acquisition has an effective date of May 1, 2024, for accounting purposes. On August 29, 2024, the Company, through Barrister, its wholly-owned subsidiary, completed the acquisition of certain various mineral and oil and gas properties, lands and leases located in Mississippi and related assets from Liberty pursuant to the Assignment and Bill of Sale, entered into and executed by Barrister and Liberty on August 29, 2024. The Acquisition has an effective date of July 1, 2024, for accounting purposes. 8 Our Growth Strategy The Company is seeking to acquire existing underexploited conventional oil and natural gas producing properties and rights in the Gulf States Drill Region. These properties typically contain upside potential through operational efficiencies and recompletions to behind pipe zones and infill drilling. Our long-term goal is to create shareholder value by identifying and assembling a portfolio of low-risk assets with attractive economic profiles. Our ability to implement our business plan is subject, in part, on our ability to timely raise adequate and affordable funding from investors or lenders for establishing acquisitions. Our first acquisition was Barrister, followed by the acquisition of NONOP Assets and Buckley Assets in the fourth quarter of 2022. In 2024, we acquired the non-operated interests of Liberty Operating Company, LLC in two separate fields located within Mississippi. Our efforts now involve raising sufficient working capital to perform planned well work on existing properties in order to increase gross production and cash flow. The Company will continue to seek acquisitions that can be obtained in exchange for the Company’s stock or under an earn-out arrangement. Preference is given to existing producing properties or companies wishing to divest all their assets. The acquisition of a company that holds oil and leases rights has the perceived advantages of acquiring several oil leases and rights and existing drilling operations with in-place management in a single transaction. Our teaming approach is also designed to facilitate rapid growth by bringing necessary expertise into operations from available contractors. Our ability to realize profitability from oil and gas production may also depend upon the success of drill wells, engaging necessary operations expertise, and market price for crude oil and natural gas remaining at attractive levels. If we have adequate funding and/or sufficient cash flow, then we may seek to drill for oil in other assignee or leasehold interests or, alternatively, in oil and gas assignee or leasehold interests or properties owned by our potential affiliates or teaming partners. The Company currently allows the purchasers to market its crude oil and natural gas production, whether current or future, on a month-to-month basis. If the production of oil increases from the properties in which the Company obtains its oil rights, the Company will have to expand the marketing efforts by engaging a person or firm to seek out new customers for the oil production in case the current customer base is unable or unwilling to purchase increased oil production. The cost means and extent of any enhanced future marketing effort will depend on the amount of increased oil production, the then-current market for oil, and the potential customer base for the oil production. If the existing customer base will not purchase increased oil production, then the engagement of a dedicated marketing person who engages in direct marketing, by telephone and internet, of potential customers for oil production may be required for the sale of any future increase of oil production. 9 Competitive Strengths Use of Contractors Our strategy is to develop our assets in a manner that generates sustainable cash flow and improves margins and operating efficiencies while improving our environmental, social and governance and safety performance. The Company relies on the extensive experience of William R. Downs, our Chief Executive Officer, who has more than 42 years of experience in the oil and gas industry. In addition, the Company utilizes experienced contractors, including former members of Barrister, who have significant oil and gas production experience in the Gulf States Drill Region. This approach is particularly valuable during the initial phases of implementing our business plan. We believe this contractor model is the most efficient and cost-effective way to operate as a small independent oil and gas producer, enabling us to leverage expert drilling and production personnel without incurring the high overhead of full-time employees. Currently, we engage COP and Taxodium as our contractors to manage drilling storage and production operations for our oil rights. These contractors bring extensive experience with operational and administrative expertise and provide the skilled personnel necessary to handle daily crude oil production. With adequate funding, we plan to expand this teaming model to attract and retain experienced oil industry engineers and production specialists. Their role will be to identify acquisitions and drill sites and operate wells efficiently to achieve industry-leading production rates. Seasonality Our drill sites in the Gulf States Drill Region allow for year-round drilling. However, adverse weather conditions can affect drilling, completion, and field operations, as well as third-party midstream and downstream pipeline operations, thereby influencing overall production volumes. which can impact overall production volumes. Variations in seasonal weather patterns can either lessen or intensify these impacts, and extreme weather events may temporarily constrain our operations. Title to Oil and Natural Gas Properties In the oil and gas industry, it is customary to conduct only a preliminary review of title to undeveloped oil and natural gas leases at acquisition. More extensive title examinations are typically performed when we prepare to develop the leases or acquire producing properties. In future acquisitions, we will conduct title examinations on material portions of such properties in a manner generally consistent with industry practice. The properties we have acquired may be subject to certain imperfections in title, encumbrances, easements, servitudes or other restrictions, none of which, in management’s opinion, will materially restrict our operations. Competition The Company competes with many companies of all sizes in the Gulf States Drill Region and adjacent areas. Many of these competitors have extensive operational histories, seasoned management, established market share, and profitable operations. They also possess significant oil and gas fields or leases to exploit and the funding to explore new fields or acquire mature ones . There is also an established oil and gas production industry in northern Alaska and in North Dakota and western Canada. Many of our competitors not only explore for and produce oil and natural gas, but also have midstream and further downstream operations and market a variety of hydrocarbon products on a regional, national or worldwide basis. In addition, oil and natural gas compete with other forms of energy available to customers, primarily based on price. Oil and natural gas compete with alternative energy sources—such as wind, solar, coal, and fuel oils—primarily on price. Changes in energy availability, pricing, market conditions, and regulatory factors may affect demand. The Company has a limited operating history of its business operation and lacks the financial, technical, and manpower resources, proven crude oil reserves, and distribution channels of its competitors. The Company’s current production levels are modest enough that they do not attract significant attention from competitors, which allows it to operate as a small producer of oil and gas without competitive pressures. If oil production increase significantly, we may face stiffer competition from other small independent oil producers. Any increase in competitive pressure would likely necessitate a dedicated, full-time marketing effort. Company Oil Rights Description of Oil Properties and Oil Production Operations . The Company’s current oil and gas assets primarily consist of non-operating interests. Nevertheless, production from these assets has significantly enhanced our operational capability. As shown in the tables below, production has significantly improved following the asset acquisitions in the fourth quarter of 2022. However, the Company will not be able to increase production until sufficient financial resources are secured through debt and equity financing. Additionally, if production levels cannot be restored to previous benchmarks, the Company may need to write down some of these assets. The Smackover Trend . The Smackover trend is a belt of Late Jurassic carbonate, evaporite, and clastic rocks that rims the Gulf Coast of the United States. It spans from Texas to Arkansas and extends through Louisiana, Mississippi, Southwest Alabama, and the Florida panhandle. Stratigraphic and geochemical data indicate that the oil and gas were generated from algae-rich lime mudstones. The trend was named after the Smackover oil field, which was discovered in Union County, Arkansas, in 1937. 10 Current Barrister Energy Properties . As of the date of this Annual Report, we have interests in 55 wells. In the fourth quarter of 2022, we acquired interest in 29 of those wells. In the second and third quarters of 2024, we acquired interest in 15 and 9 of those wells, respectively. The table below summarizes production, average production prices, and average production costs by final product sold for the last three years. All production during the three years presented occurred in the United States. For the Year Ended December 31, 2024 2023 2022 Net Production: Oil (Bbl) 14,220 12,664 4,132 Natural Gas (Mcf) 225 4,940 4,106 Total (BOE) 14,257 13,488 4,816 Average Production Prices: Oil (Bbl) $ 71.38 $ 79.61 $ 88.85 Natural Gas (Mcf) $ 4.54 $ 2.88 7.60 Average Production Costs Production Costs (per BOE) (1) $ 25.05 $ 18.43 $ 66.67 Average production prices have been calculated by using sales quantities from Barrister’s production as the divisor. Average production costs have been computed by using net production quantities for the divisor. The volumes of crude oil and natural gas liquids (“NGL”) production used for this computation are shown in the oil and gas production table. The volumes of natural gas used in the calculation are the production volumes of natural gas available for sale and are also shown. Gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels . (1) The production cost (per BOE) for the year ended December 31, 2022 was updated to reflect certain lease operating expenses not previously included in the calculation. 11 Oil and Gas Properties, Wells, Operations, and Acreage Gross and Net Productive Wells Year-End 2024 Year-End 2023 Year-End 2022 Oil Gas Oil Gas Oil Gas Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross and Net Productive Wells Consolidated Subsidiaries United States 55 28 — — 30 6 — — 32 7 — — Total Consolidated Subsidiaries 55 28 — — 30 6 — — 32 7 — — Total gross and net productive wells 55 28 — — 30 6 — — 32 7 — — Gross and Net Developed Acreage Year-End 2024 Year-End 2023 Year-End 2022 Gross Net Gross Net Gross Net (acres) Gross and Net Developed Acreage Consolidated Subsidiaries United States 8,004 3,437 5,208 782 6,208 901 Total Consolidated Subsidiaries 8,004 3,473 5,208 782 6,208 901 Total gross and net developed acreage 8,004 3,437 5,208 782 6,208 901 Separate acreage data for oil and gas are not maintained because, in many instances, both are produced from the same acreage. Gross and Net Undeveloped Acreage Year-End 2024 Year-End 2023 Year-End 2022 Gross Net Gross Net Gross Net (acres) Gross and Net Undeveloped Acreage Consolidated Subsidiaries United States 3,244 612 2,600 26 2,600 26 Total Consolidated Subsidiaries 3,244 612 2,600 26 2,600 26 Total gross and net undeveloped acreage 3,244 612 2,600 26 2,600 26 Separate acreage data for oil and gas are not maintained because, in many instances, both are produced from the same acreage. Our investment in developed and undeveloped acreage comprises numerous leases. The List of Leases is included as Exhibit 99.1 to this Annual Report. The terms and conditions under which the Company maintains exploration and production rights to the acreage are property-specific, contractually defined, and vary significantly by property. Work programs are designed to ensure that the exploration potential of any property is thoroughly evaluated before expiration. In some instances, we may elect to relinquish acreage in advance of the contractual expiration date if the evaluation process is complete and there is not a business justification for an extension. In cases where additional time may be required to evaluate acreage fully, the Company has generally been successful in obtaining extensions. The scheduled expiration of leases and concessions for undeveloped acreage over the next three years is not expected to have a material adverse effect on the Company. 12 Government Regulation Oil and natural gas operations such as ours are subject to various types of legislation, regulation, and other legal requirements enacted by governmental authorities. This legislation and regulation affecting the oil and natural gas industry are under constant review for amendment or expansion. Some of these requirements carry substantial penalties for failure to comply. The regulatory burden on the oil and natural gas industry increases our cost of doing business and, consequently, can affect our profitability. Because these laws, rules and regulations are frequently amended or reinterpreted and new laws, rules and regulations are promulgated, we are unable to predict the future cost or impact of complying with the laws, rules and regulations to which we are, or will be required to comply. Regulation of Drilling and Production The production of oil and natural gas is subject to regulation under a wide range of local, state, and federal statutes, rules, orders, and regulations. Federal, state, and local statutes and regulations require permits for drilling operations, drilling bonds, and reports concerning operations. The trend in oil and natural gas regulation has been to increase regulatory restrictions and limitations on such activities. Any changes in, or more stringent enforcement of, these laws and regulations may result in delays or restrictions in permitting or development of projects or more stringent or costly construction, drilling, water management or completion activities or waste handling, storage, transport, remediation, or disposal emission or discharge requirements which could have a material adverse effect on the Company. In January 2021, the Biden administration issued: (1) an order signed by the acting Secretary of the Interior providing for a 60-day pause (ii) an executive order signed by President Biden instruction the Department of the Interior to pause new oil and natural gas leases on public lands pending completion of a comprehensive review and consideration of federal oil and natural gas permitting and leasing practices (together, the “Biden Administration Federal Lease Orders”). The U.S. District Court for the District of Louisiana enjoined the pause within 13 states, including Texas, in August 2022. The Department of the Interior has recently resumed lease sales in several states. On January 20, 2021, the Biden Administration issued (i) an order providing for a 60-day moratorium on new oil and gas leasing and drilling permits on federal land, limiting the authority of local offices of the BLM to issue new leases and grant federal drilling permits and certain extensions, sundries, rights-of-way and other necessary approvals for the development of federal oil and natural gas leases; and (ii) and executive order signed by President Biden instructing the Department of the Interior to pause new oil and natural gas leases on public lands, pending a full review of the federal leasing and permitting program. While we do not have a significant federal land acreage position at 240 net acres, these actions could have a material adverse effect on the Company and our industry. Currently, all our properties and operations are in Alabama and Mississippi, which have regulations governing conservation matters, such as the unitization or pooling of oil and natural gas properties, the establishment of maximum allowable rates of production from oil and natural gas wells, the regulation of well spacing, and plugging and abandonment of wells. The effect of these regulations is to limit the amount of oil and natural gas that we can produce from our wells and to limit the number of wells or the locations at which we can drill, although we can apply for exceptions to such regulations or to have reductions in well spacing. Moreover, Alabama and Mississippi impose a production or severance tax with respect to the production and sale of oil, natural gas, and natural gas liquids within their jurisdictions. Failure to comply with these rules and regulations can result in substantial penalties. Our competitors in the oil and natural gas industry are subject to the same regulatory requirements and restrictions that affect our operations. 13 Regulation of Transportation of Oil Sales of crude oil, condensate, and natural gas liquids are not currently regulated and are made at negotiated prices; however, Congress could reenact price controls in the future. Our sales of crude oil are affected by the availability, terms, and cost of transportation. The transportation of oil in common carrier pipelines is also subject to rate regulation. The Federal Energy Regulatory Commission, or the FERC, regulates interstate oil pipeline transportation rates under the Interstate Commerce Act. Intrastate oil pipeline transportation rates are subject to regulation by state regulatory commissions. The basis for intrastate oil pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to state. Insofar as effective interstate and intrastate rates are equally applicable to all comparable shippers, we believe that the regulation of oil transportation rates will not affect our operations in any way that is of material difference from those of our competitors. Further, interstate and intrastate common carrier oil pipelines must provide service on a non-discriminatory basis. Under this open access standard, common carriers must offer service to all shippers requesting service on the same terms and under the same rates. When oil pipelines operate at full capacity, access is governed by pro-rationing provisions set forth in the pipelines’ published tariffs. Accordingly, we believe that access to oil pipeline transportation services generally will be available to us to the same extent as to our competitors. Regulation of Transportation and Sale of Natural Gas Historically, the transportation and sale for resale of natural gas in interstate commerce have been regulated pursuant to the Natural Gas Act of 1938, the Natural Gas Policy Act of 1978, and regulations issued under those Acts by the FERC. In the past, the federal government has regulated the prices at which natural gas could be sold. While sales by producers of natural gas can currently be made at uncontrolled market prices, Congress could reenact price controls in the future. Since 1985, the FERC has endeavored to make natural gas transportation more accessible to natural gas buyers and sellers on an open and non-discriminatory basis. The FERC has stated that open access policies are necessary to improve the competitive structure of the interstate natural gas pipeline industry and to create a regulatory framework that will put natural gas sellers into more direct contractual relations with natural gas buyers by, among other things, unbundling the sale of natural gas from the sale of transportation and storage services. Although the FERC’s orders do not directly regulate natural gas producers, they are intended to foster increased competition within all phases of the natural gas industry. We cannot accurately predict whether the FERC’s actions will achieve the goal of increasing competition in markets in which our natural gas is sold. Therefore, we cannot provide any assurance that the less stringent regulatory approach established by the FERC will continue. However, we do not believe that any action taken will affect us in a way that materially differs from the way it affects other natural gas producers. Intrastate natural gas transportation is subject to regulation by state regulatory agencies. The basis for intrastate regulation of natural gas transportation and the degree of regulatory oversight and scrutiny given to intrastate natural gas pipeline rates and services varies from state to state. Insofar as such regulation within a particular state will generally affect all intrastate natural gas shippers within the state on a comparable basis, we believe that the regulation of similarly situated intrastate natural gas transportation in any states in which we operate and ship natural gas on an intrastate basis will not affect our operations in any way that is of material difference from those of our competitors. Environmental, Health and Safety Regulations The exploration, development, production, gathering and processing of oil and natural gas are subject to various federal, state and local environmental laws and regulations. These laws and regulations can increase the costs of planning, designing, drilling, completing and operating oil and natural gas wells, midstream facilities and produced water injection and disposal wells. Our activities are subject to a variety of environmental laws and regulations, including, but not limited to: the Oil Pollution Act of 1990 (the “OPA 90”), the Clean Water Act (the “CWA”), the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), the Resource Conservation and Recovery Act (“RCRA”), the Clean Air Act (the “CAA”) and the Occupational Safety and Health Act (“OSHA”), as well as comparable state statutes and regulations. We also may be subject to regulations governing the handling, transportation, storage and disposal of wastes generated by our activities and naturally occurring radioactive materials (“NORM”) that may result from our oil and natural gas operations. Administrative, civil and criminal fines and penalties may be imposed for noncompliance with these environmental laws and regulations, and violations and liability with respect to these laws and regulations could also result in remedial clean-ups, natural resource damages, permit modifications or revocations, operational interruptions or shutdowns and other liabilities. Additionally, these laws and regulations require the acquisition of permits or other governmental authorizations before undertaking some activities, may limit or prohibit other activities because of protected wetlands, areas or species and require investigation and cleanup of pollution. These laws, rules and regulations may also restrict the production rate of oil and natural gas or limit the injection of produced water into disposal wells below the rates that would otherwise be possible. We expect to remain in compliance in all material respects with currently applicable environmental laws and regulations and do not expect that these laws and regulations will have a material adverse impact on the Company. 14 The OPA 90 and its regulations impose requirements on “responsible parties” related to the prevention of crude oil spills and liability for damages resulting from oil spills into or upon navigable waters, adjoining shorelines or on the exclusive economic zone of the United States. A “responsible party” under the OPA 90 may include the owner or operator of an onshore facility. The OPA 90 subjects responsible parties to strict, joint and several financial liability for removal and remediation costs and other damages, including natural resource damages, caused by an oil spill that is covered by the statue. Failure to comply with the OPA 90 may subject a responsible party to civil or criminal enforcement action. The CWA and comparable state laws impose restrictions and strict controls regarding the discharge of produced waters, fill materials and other materials into navigable waters. These controls have become more stringent over the years, and it is possible that additional restrictions will be imposed in the future. Permits are required to discharge pollutants into certain state and federal waters and to conduct construction activities in those waters and wetlands. The CWA and comparable state statutes provide for civil, criminal and administrative penalties for any unauthorized discharges of oil and other pollutants and impose liability for the costs of removal or remediation of contamination resulting from such discharges. In September 2015, a rule issued by the EPA and U.S. Army Corp of Engineers (the “Corps”) to revise the definition of “waters of the United States” (“WOTUS”) for all CWA programs, thereby defining the scope of the EPA’s and the Corp’s jurisdiction, became effective. The EPA rescinded this rule in 2019 and promulgated the Navigable Waters Protection Rule (the “NWPR”) in 2020. The NWPR was viewed as narrowing the scope of WOTUS as compared to the 2015 rule. In August 2021, the U.S. District Court for the District of Arizona vacated and remanded the NWPR. On January 18, 2023, the EPA and the Corps jointly issued a final rule revising the definition of WOTUS that largely returned to the pre-2015 regulatory regime. On September 8, 2023, the U.S. Supreme Court issued a decision limiting the scope of federal jurisdiction over wetlands only to those that have a continuous surface connection to water bodies. On August 29, 2023, the EPA and the Corps jointly issued a final rule, effective immediately, aligning the regulatory definition of WOTUS with the Supreme Court’s ruling. CERCLA, also known as the “Superfund” law, imposes liability, without regard to fault or the legality of the original conduct, on various classes of persons that are considered to have contributed to the release of a “hazardous substance” in the environment. These persons include the owner or operator of the site where the release occurred and companies that disposed of, or arranged for the disposal of, the hazardous substances found at the site. Persons who are responsible for releases of hazardous substances under CERCLA may be subject to joint and several liability for the costs of cleaning up the hazardous substances and for damages to natural resources. In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment. Although CERCLA generally exempts petroleum from the definition of hazardous substances, our operations may in the future, involve the use or handling of materials that are classified as hazardous substances under CERCLA. Each state also has environmental cleanup laws analogous to CERCLA. RCRA and comparable state and local statues govern the management, including treatment, storage and disposal, of both hazardous and nonhazardous solid wastes. Hazardous wastes are subject to more stringent and costly disposal requirements than nonhazardous wastes. The CAA, as amended, restricts the emission of air pollutants from many sources, including oil and natural gas production. In addition, certain states have comparable legislation, which may be more restrictive than the CAA. These laws and any implementing regulations impose stringent air permit requirements and require us to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce air emissions, or to use specific equipment or technologies to control emissions. Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with air permits or other requirements of the CAA and associated state laws and regulations. On August 16, 2022, the Inflation Reduction Act created the Methane Emissions Reduction Program to incentivize methane emission reductions and impose a fee on greenhouse gas emissions from certain facilities that exceed specified emissions levels. 15 Internationally, in 2015, the United States participated in the United Nations Conference on Climate Change, which led to the creation of the Paris Agreement. The Paris Agreement, which was signed by the United States in April 2016, requires countries to review and “represent a progression” in their intended nationally determined contributions (“NDC”), which set greenhouse gas emission reduction goals, every five years beginning in 2020. The United States exited the Paris Agreement in November 2020, but rejoined the agreement effective February 19, 2021. In April 2021, the United States made its NDC submittal, setting an emissions reduction goal of a 50 to 52% reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030. Further, in November 2021, the United States and other countries entered into the Glasgow Climate Pact, which includes a range of measures designed to address climate change, including but not limited to the phase-out of fossil fuel subsidies, reducing methane emissions 30% by 2030 and cooperating toward the advancement of the development of alternative sources of energy. Any changes that result in more stringent and costly waste handling, storage, transport, disposal, cleanup or operating requirements could materially adversely affect our operations and financial condition, as well as those of the oil and natural gas industry in general. For instance, in January 2021, President Biden issued Executive Order which directed a government-wide effort to address climate change by reducing greenhouse gas emissions and achieving net-zero global carbon emissions by 2050 or before. That effort is designed to infuse climate policy in all aspects of federal decision-making, including specific directives that touch on foreign policy, national security, financial regulation, federal procurement, infrastructure, and environmental justice among other things. Based on this Executive Order and other findings, the EPA has begun adopting and implementing a comprehensive suite of regulations to restrict emissions of greenhouse gases under existing provisions of the CAA. On December 2, 2023, the EPA issued a prepublication version of a final rule to regulate emissions from oil and natural gas sources that includes NSPS to limit greenhouse gas and volatile organic compound emissions for new, modified or reconstructed sources, as well as emissions guidelines for states to follow when establishing plans to limit methane emissions from existing sources. Additionally, on November 17, 2023, the EPA issued a final rule that enables states to implement more stringent methane emissions standards than the federal guidelines require. As another example, in January 2023, the EPA announced a proposed consent decree that, if finalized as proposed, would establish a December 10, 2024 deadline for the EPA to review and propose revisions to the National Emission Standards for Hazardous Air Pollutants (“NESHAP”) for oil and natural gas production facilities and natural gas transmission and storage facilities, which may require us to make additional changes to our operations. Legislative and regulatory initiatives related to climate change and greenhouse gas emissions could, and likely would, require us to incur increased operating costs adversely affecting our profits and could adversely affect demand for the oil and natural gas we produce, depressing the prices we receive for oil and natural gas. In the course of our routine oil and natural gas operations, surface spills and leaks, including casing leaks, of oil, produced water or other materials may occur, and we may incur costs for waste handling and environmental compliance. It is also possible that our oil and natural gas operations may require us to manage NORM. NORM is present in varying concentrations in sub-surface formations, including hydrocarbon reservoirs, and may become concentrated in scale, film and sludge in equipment that comes in contact with crude oil and natural gas production and processing streams. Some states, including Texas and Louisiana, have enacted regulations governing the handling, treatment, storage and disposal of NORM. We are subject to the requirements of OSHA and comparable state statutes. The OSHA Hazard Communication Standard, the “community right-to-know” regulations under Title III of the federal Superfund Amendments and Reauthorization Act and similar state statutes require us to organize information about hazardous materials used, released or produced in our operations. Certain of this information must be provided to employees, state and local governmental authorities and local citizens. We are also subject to the requirements and reporting set forth in OSHA workplace standards. We have not in the past been, and do not anticipate in the near future to be, required to expend amounts that are material in relation to our total capital expenditures as a result of environmental laws and regulations, but since these laws and regulations are periodically amended, we are unable to predict the ultimate cost of compliance. We have no assurance that more stringent laws and regulations protecting the environment will not be adopted or that we will not otherwise incur material expenses in connection with environmental laws and regulations in the future. We may be unable to pass on such increased compliance costs to our customers. 16 Principal Executive Offices Our principal executive office is located at 4830 Line Avenue, Suite 152, Shreveport, Louisiana, 71106, and our telephone number is (703) 479-8538. We rent our principal executive offices under a month-to-month lease for a monthly rental of $26. The Company website is www.cojaxoilandgas.com. Employees We currently have two full-time employees: William Downs, our Chief Executive Officer, and Jeffrey J. Guzy, our Chief Financial Officer. The officers devote the number of hours necessary to perform their duties, and each officer, in his sole discretion, determines the extent of the time commitment. 17