What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2025-11-12 · 95 added, 93 removed, 195 unchanged (49% of the section changed)

7 unchanged sentences

This Quarterly Report

on Form 10-Q (the “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the

Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended.

The statements contained in this report

that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on

currently available information.

Forward-looking statements include information concerning our possible or assumed future results

of operations, business strategies, need for financing, competitive position, and potential growth opportunities.

Our forward-looking

statements do not consider the effects of future legislation or regulations.

Forward-looking statements include all statements

that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,”

“intends,” “may,” “should,” “anticipates,” “expects,” “could,”

“plans,” “estimates,” “projects,” “targets” or comparable terminology or by discussions

of strategy or trends.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we

cannot give any assurances that these expectations will prove to be correct.

Such statements by their nature involve risks and

uncertainties that could significantly affect expected results, and actual future results could differ materially from those described

in such forward-looking statements.

on Form 10-Q (the “Quarterly Report”), including in Item 2, “Management’s Discussion and Analysis of Financial

Condition and Results of Operations” and elsewhere may contain forward-looking statements within the meaning of Section 27A

of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended.

Statements which are not historical

reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects

and opportunities and are based upon information currently available to us and our management and their interpretation of what

is believed to be significant factors affecting our business, including many assumptions regarding future events Forward-looking

statements include information concerning our possible or assumed future results of operations, business strategies, need for financing,

competitive position, and potential growth opportunities.

Our forward-looking statements do not consider the effects of future

legislation or regulations.

Forward-looking statements include all statements that are not historical facts and can be identified

by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,”

“anticipates,” “expects,” “could,” “plans,” “estimates,” “projects,”

“targets” or comparable terminology or by discussions of strategy or trends.

Although we believe that the expectations

reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to

Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and

actual future results could differ materially from those described in such forward-looking statements.

Among the factors

that could cause actual future results to differ materially are the risks and uncertainties discussed in this report and in our

annual report on Form 10-K for the year ended December 31, 2024.

While it is not possible to identify all factors, we continue

to face many risks and uncertainties including, but not limited to:

that could cause actual future results to differ materially are the risks and uncertainties discussed in this Quarterly Report

and in our annual report on Form 10-K for the year ended December 31, 2025.

While it is not possible to identify all factors,

we continue to face many risks and uncertainties including, but not limited to:

declines or volatility in the prices we receive for our oil and natural gas;

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the Company’s debt.

Executive Summary - Second Quarter 2025

Executive Summary - First Quarter 2026

Developments and Highlights

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market impacted by many factors, including government regulations, particularly in the areas of trade sanctions, taxation, energy,

climate change and the environment, geopolitical instability, and military conflicts (including the Russian-Ukrainian conflict

in the Middle East), fluctuations in worldwide commodity demand, and the extent to which members of OPEC and other oil exporting

nations manage oil supply through export quotas.

In general, natural gas prices are determined by North American supply and demand

and are affected by the import and export of liquefied natural gas.

Oil and natural gas prices have been, and are expected to continue

to be, volatile.

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

climate change and the environment, geopolitical instability, and military conflicts (including the ongoing Russian-Ukrainian conflict

and conflict in the Middle East), fluctuations in worldwide commodity demand, and the extent to which members of OPEC and other

oil exporting nations manage oil supply through export quotas.

In general, natural gas prices are determined by North American

supply and demand and are affected by the import and export of liquefied natural gas.

Oil and natural gas prices have been, and

are expected to continue to be, volatile.

This volatility could negatively impact future prices for oil, natural gas, petroleum

products, and industrial products.

Results of Operations – For

the Three and Nine Months Ended September 30, 2025, and 2024

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

the Three Months Ended March 31, 2026, and 2025

For the Three Months Ended March 31,

Lease operating expenses

General & administrative expenses

Depletion and accretion on discounted liabilities

Depletion and accretion expense

Loss from operations

Interest expense, net

Revenues were $212,868 and $784,714 for

the three and nine months ended September 30, 2025, compared to $250,619 and $750,678 for the three and nine months ended September

The decrease in revenue of 15.1% for the three months ended September 30, 2025, compared to the same period in 2024,

was primarily driven by a decrease in the average sale price for crude oil.

The increase in revenue of 4.5% for the nine months

ended September 30, 2025, compared to the same period in 2024, was primarily driven by production in the Liberty and Pine Grove

Assets during the first quarter of 2025, which were acquired in May 2024 and August 2024, respectively.

Other expense, net

Revenues were $112,076 for the three months

ended March 31, 2026, compared to $338,222 for the three months ended March 31, 2025.

The decrease in revenue of 66.9% or $226,146

was primarily driven by the decrease in production for the Buckley assets resulting in approximately $137,202 reduction in revenue

period over period, as well as the decrease attributable to the transfer of the NONOP assets in the second half of 2025 that reduced

revenue by approximately $38,612.

Wells within the Pine Grove field were under repair during Q1 2026 resulting in a reduction in

revenue compared to 2025 of $18,339.

Lease Operating Expenses

Lease operating expenses were $115,345

and $367,340 for the three and nine months ended September 30, 2025, compared to $110,318 and $273,801 for the three and nine months

ended September 30, 2024, representing an increase of 30.3% or $33,397 and 34.2% or $93,539, respectively.

The increase in expense

for both periods presented was primarily attributable to the Liberty and Pine Grove Assets.

for the three months ended March 31, 2026, compared to $ 97,240 for the three months ended March 31, 2025, representing an increase

of 18.6% or $18,105.

The increase in expense was primarily attributable to the increased operating expenses related to repair and

maintenance of wells in the Pine Grove and Buckley fields during 2026 of $22,222 and $21,835 respectively, offset by reduced operating

expenses resulting from the transfer of NONOP assets of approximately $24,829.

General 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 $193,971

for the three months ended March 31, 2026, compared to $274,330 in the same period in 2025, representing a decrease of 29.3% or

The decrease was primarily driven by a $31,157 decrease in accounting fees, a $6,892 reduction in management fees, and

a $38,606 decrease in reserve evaluations expenses.

Loss from Operations

Total operating loss was $157,417 and $149,185 for the three

months ended September 30, 2025 and 2024, respectively.

The increased loss was driven by a decrease in revenues during the third

Total operating loss was $505,557 and $526,811 for the nine

months ended September 30, 2025 and 2024, respectively.

The decreased loss was primarily driven by revenues earned in the first

quarter of 2025, lending to a net increase in revenue for the nine-month period, and an increase in lease operating expenses.

increases were partially offset by a decrease of $115,660 in general and administrative expenses driven by a reduction in payroll

Total operating loss was $265,510 for the three months ended

March 31, 2026, and $144,323 for the three months ended March 31, 2025.

The increased loss was primarily driven by the $226,146

decrease in revenues offset by the $104,959 net decrease in operating expenses.

Other Expense, Net

Other expense, net was $288 and $1,015

for the three and nine months ended September 30, 2025, as compared to $573 and $871 for the three and nine months ended September

30, 2024, due to an increase in interest expense.

Other expense, net was $450 for the three

months ended March 31, 2026, as compared to $483 for the three months ended March 31, 2025, due to an increase in interest expense

on the PPP Loan.

As a result of the above factors, for the

three and nine months ended September 30, 2025, the Company had a net loss of $157,705 and $506,572 as compared to a net loss of

$149,758 and $527,682 for the three and nine months ended September 30, 2024.

three months ended March 31, 2026, the Company had a net loss of $265,959 as compared to a net loss of $144,806 for the three months

ended March 31, 2025.

Sales volumes and commodity prices

The following table presents our sales

volumes and received pricing information for the three and nine month periods ended September 30, 2025, and 2024:

volumes and received pricing information for the three-month periods ended March 31, 2026, and 2025:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Oil volume (Bbls)

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The Company had cash on hand of $91,056

at September 30, 2025 compared to $46,738 at December 31, 2024.

For the nine months ended September 30, 2025, the Company had net

cash provided by operating activities of $31,938 compared to $59,219 provided by operating activities for the same period of 2024.

The decrease in cash provided by operating activities was driven by the lack of common stock issuances for services and salaries

during the period, and by a net loss increase.

Net cash used in investing activities was

$0 for the nine months ended September 30, 2025, and September 30, 2024.

Net cash used in financing activities was

$7,557 for the nine months ended September 30, 2025, compared to net cash used in financing activities of $7,477 for the same period

at March 31, 2026, compared to $ 77,219 at December 31, 2025.

For the three months ended March 31, 2026, the Company had net cash

provided by operating activities of $16,375, compared to $32,796 provided by operating activities for the same period of 2025.

The decrease in cash provided by operating activities was driven by the $150,374 increase in accounts payable and accrued liabilities

and $12,813 decrease in accounts receivable, offset by the $121,153 increase of net loss and $44,569 decrease in depletion expense.

The Company did not have any investing

cash flows for the three months ended March 31, 2026 and March 31, 2025.

Net cash used in financing activities was $ 2,538 for the three

months ended March 31, 2026, compared to net cash used in financing activities of $ 2,513 for the same period in 2025.

Capital Resources for Future Acquisition and Development

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Oil and Gas Prices

The price we receive for our oil and natural

gas will heavily influence our revenue, profitability, access to capital, and future rate of growth.

Oil and natural gas are commodities

and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand.

prices we receive for our production depend on numerous factors beyond our control.

These factors include, without limitation,

the following:

worldwide and regional economic conditions impacting the global supply and demand for oil and natural gas;

and quantity of imports of foreign oil and natural gas;

The price we receive for our oil and natural gas will heavily

influence our revenue, profitability, access to capital, and future rate of growth.

Oil and natural gas are commodities and, therefore,

their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand.

The prices we receive

for our production depend on numerous factors beyond our control.

These factors include, without limitation, the following:

and regional economic conditions impacting the global supply and demand for oil and natural gas;

the price and quantity of imports

of foreign oil and natural gas;

the level of global oil and natural gas inventories;

localized supply and

demand fundamentals;

localized supply and demand fundamentals;

the availability of refining capacity;

price and availability of transportation and pipeline systems with

adequate capacity;

weather conditions, natural disasters, and public health threats;

price and availability of transportation and pipeline systems with adequate capacity;

conditions, natural disasters, and public health threats;

governmental regulations;

speculation as to

the future price of oil and the speculative trading of oil and natural gas futures contracts;

price and availability of competitors’

supplies of oil and natural gas;

speculation as to the future price of oil and

the speculative trading of oil and natural gas futures contracts;

price and availability of competitors’ supplies of oil

and natural gas;

energy conservation and environmental measures;

technological advances affecting energy consumption;

the price and availability of alternative fuels and energy sources;

and availability of alternative fuels and energy sources;

and domestic and international drilling activity.

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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-Q

Item 2. Management’s Discussion and Analysis