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Item 1A. Risk Factors

2023-11-20 compared with 2022-06-14 · 161 added, 148 removed, 130 unchanged (70% of the section changed)

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Risks could also harm our business, operating results, financial condition, or prospects, and uncertainties not currently known to us or that we currently do not believe are material, and these risks and uncertainties could result in a complete loss of your investment.

Prior to the Acquisition, we did not have revenue-generating operations that will fund our operating overhead.

While we began to generate revenue following the Acquisition, our business, operating results, financial condition, or prospects could be materially and adversely affected by any of these risks and uncertainties.

An instance of unforeseen circumstances is the COVID-19 pandemic and its significant and ongoing adverse effect on oil consumption and the market price for oil.

As of the date of this Annual Report, the duration and severity of the COVID-19 pandemic are uncertain.

Prior to the Barrister Acquisition, we did not have revenue-generating operations that will fund our operating overhead.

While we began to generate revenue following the Barrister Acquisition, our business, operating results, financial condition, or prospects could be materially and adversely affected by any of these risks and uncertainties.

In assessing the risks and uncertainties described below, you should also refer to the other information contained herein, including our consolidated financial statements, pro forma financial statements, and the related notes thereto.

RISKS RELATED TO OUR BUSINESS

We have a limited history of owning and operating oil and gas exploration and production operations .

Since its incorporation in November 2017, we have never generated revenue.

Although we acquired Barrister’s business pursuant to the Acquisition on November 17, 2020, these drilling operations are minimal and commenced only three years ago.

While Barrister Oil Rights have a long history of production, that history was minimal in terms of production and does not reveal the potential oil production and profitability of Barrister Oil Rights.

Further, the lack of a more extensive operating history may discourage lenders or funding sources from providing working capital to the Company.

There is no assurance that the Barrister Oil Rights will produce oil on a profitable basis, even with deep drilling rigs.

Investors should carefully consider the lack of operating history of the Company and the lack of any significant oil production from the Barrister Oil Rights prior to making an investment decision to invest in the Company.

We are entering a highly competitive and highly capital-intensive industry, and any oil production may be insufficient to fund, sustain, or expand revenue-generating operations .

The oil drilling exploration and production business are capital intensive due to the cost of experienced personnel;

equipment and other assets required to drill, produce and store oil;

regulatory compliance costs;

potential liability exposures and financial effects;

and the risk of unpredictable volatility in oil market prices and predatory pricing by competitors.

Drilling requires an upfront payment of operational costs with no guarantee that actual oil production will cover such expenses.

“Dry” holes for the first and/or second oil wells could deplete any available funding raised by the Company and render the Company insolvent.

The actual amount and timing of our future capital expenditures may differ materially from our estimates as a result of, among other things, market oil prices, actual drilling results, the availability of drilling rigs and other services and equipment, and regulatory, technological, and

competitive developments.

The Company does not have cash flow or cash reserves sufficient to fund more extensive and deep drilling on Barrister Oil Rights.

While we will seek such funding, there can be assurances that we can obtain funding that will be sufficient to fund deep drill wells, which are needed to produce any significant levels of oil production.

Future cash flow from our operations and access to capital are subject to a number of variables, including:

(i) the market prices at which our oil production is sold;

(ii) our proved reserves;

(iii) the level of hydrocarbons we can produce from any future oil wells;

(iv) our ability to acquire, locate and produce new oil reserves;

(v) the levels of our operating expenses;

(vi) reduction and stabilization of the effect of COVID-19 pandemic’s ongoing disruption of and reduction in the U.S.

and global demand for oil.

Due to our contractor model of operations, we will be vulnerable to any inability to engage or retain qualified operational personnel for new or existing drilling operations.

Our operation plan depends on a teaming/contractor approach to operate oil rigs.

We may be unable to locate or retain a sufficient number of qualified independent contractors to operate new or existing oil rigs.

Finding and engaging qualified independent contractors will be essential to commencing, expanding, and sustaining drilling operations.

Since we will, in all likelihood, depend on one or two new oil rigs at the start of operations after raising sufficient working capital, any inability to engage or retain qualified independent contractors would be potentially fatal to our efforts to establish increased revenue-generating operations.

The use of independent contractors also poses the risk of such personnel leaving for more lucrative opportunities with competitors or other oil producers.

Many of our competitors can afford more lucrative compensation packages for qualified personnel.

We lack the resources to effectively compete against larger competitors for operational personnel, especially against competitors with liquid public markets for their capital stock and the ability to offer attractive stock-based incentive compensation.

Loss of key operational personnel could cause suspension of any expanded drilling operations.

The Company does not have key-man insurance or the available cash to easily employ or engage experienced, full-time outside senior management personnel.

The loss of key personnel, including operational personnel of COP used to manage Barrister’s oil production business, or COP’s refusal to continue to manage Barrister oil drilling and production could undermine the Company’s ability to manage operations and implement the Company’s business plan.

Risk related to the Third-Party Transportation of Oil Production.

The marketability of oil production will depend upon the availability, proximity, and capacity of transportation facilities owned by third parties.

Any oil production will be transported from the wellhead to gathering systems.

The oil is then transported by the purchaser by truck or other means to a transportation facility.

We will not be able to control most of these third-party transportation means and facilities, and access to them may be limited or denied.

If in the future, the Company is unable, for any sustained period, to implement acceptable delivery or transportation arrangements or encounter production-related difficulties, it may be required to shut in or curtail production.

Any such shut-in or curtailment, or an inability to obtain favorable terms for delivery of the oil produced, would materially and adversely affect our efforts to attain or sustain revenues from operations and improved future financial condition and results of operations.

With any expanded oil exploration and drilling, we will eventually need to replace existing oil reserves with new oil reserves and develop those oil reserves.

Failing that, oil reserves and production will decline, which would adversely affect future cash flows and results of operations.

Once we increase oil production, then producing oil reservoirs generally will be characterized by declining production rates that vary depending upon oil reservoir characteristics and other factors.

Unless the Company conducts successful ongoing exploration and development activities or continually acquires properties containing proved reserves, proved reserves would decline as those reserves are produced.

Future reserves and production, and therefore future cash flow and results of operations, are highly dependent on the success in efficiently developing current reserves and economically finding or acquiring additional recoverable oil reserves.

We may not be able to develop, find, or acquire sufficient additional reserves to replace our current and future production.

If we are unable to replace current and future oil production, the value of existing reserves will decrease, and business, financial condition, and results of operations would be materially and adversely affected.

Seismic studies do not guarantee that oil or hydrocarbons are present or, if present, will produce in economic quantities.

Oil exploration and production companies, like we are, rely on seismic studies to assist in assessing prospective drilling opportunities on oil and gas properties, as well as on properties that a company may acquire.

Such seismic studies are merely an interpretive tool and do not necessarily guarantee that hydrocarbons are present or, if present, will produce in economic or profitable quantities.

The potential lack of availability of, or cost of, drilling rigs, equipment, supplies, personnel, and crude oil field services could adversely affect our ability to execute on a timely basis exploration and development plans within any budget.

We may encounter an increase in the cost of securing needed drilling rigs, equipment, and supplies.

Larger producers may be more likely to secure access to such equipment by offering more lucrative terms.

If we are unable to acquire access to such resources or can obtain access only at higher prices, its ability to convert oil reserves into cash flow could be delayed, and the cost of producing from those oil reserves could increase significantly, which would adversely affect results of operations and financial condition.

Our current drilling operations are limited, and the availability of essential drilling assets may not become a risk factor until such time as we increase drilling operations.

Any sustained decline in oil market prices could adversely affect the Company’s business, financial condition, results of operations, and its ability to meet capital expenditure obligations and financial commitments.

The prices the Company receives for oil production will heavily influence revenues, and profitability, access to capital, future rate of growth, and carrying value of oil production properties.

Risks Related to the Oil & Natural Gas Industry

Oil and natural gas prices are volatile, and any sustained decline in oil market prices could adversely affect the Company’s business, financial condition, results of operations, and its ability to meet capital expenditure obligations and financial commitments.

Our success is highly dependent on prices for oil and natural gas, which have in recent years been, and we expect will continue to be, extremely volatile.

Oil is a commodity, and its price may fluctuate widely in response to relatively minor changes in the supply of and demand for oil and market uncertainty.

If the Company is unable to obtain needed capital or financing on satisfactory terms, its ability to develop future reserves will be adversely affected.

If drilling operations are curtailed, then the Company may be unable to continue to hold leases and drilling rights that are scheduled to expire, which may further reduce oil reserves.

As a result, a substantial or extended decline in commodity prices may materially and adversely affect future business, financial condition, results of operations, liquidity, and ability to finance planned capital expenditures.

Historically, oil prices have been volatile due to sensitivity to political and economic developments or crises.

The prices we receive for oil production, and the levels of oil production, depend on numerous factors beyond our control, which include worldwide and regional economic conditions affecting the global supply and demand for oil and the effect and duration of the effect of the COVID-19 pandemic in the U.S.

and elsewhere.

The continuing spread of COVID-19 pandemic has the potential to undermine our plans to try to establish a sustainable oil production business.

Other factors include :

· the level of domestic and foreign supplies of oil;

· levels of production, domestic and worldwide inventories;

· the capacity of U.S.

and international refiners to use U.S.

supplies of oil, natural gas and NGLs

· the price and quantity of foreign imports of oil and their effect on U.S.

oil producers;

· relative price and availability of alternative forms of energy;

· political and economic conditions in or affecting other oil-producing regions or countries, including the Middle East, Africa, South America, current invasion of Ukraine by Russia, which significantly affects global oil market price

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· the price and availability and consumer demand for alternative fuels to oil and reduction in the use of products that are made from oil, especially certain plastics, which demand is fueled by environmental concerns

· expectations about future commodity prices, which is unpredictable due to the inability to forecast the duration and scope of effect of COVID-19 pandemic

· climate control legislation that increases the cost and lowers the demand for oil by providing incentives and tax benefits for use of non-oil fuels, and

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governmental regulation and taxes.

We have a limited customer base for its oil production due to its limited oil production and operating history.

The cost of and difficulty in expanding the customer base for increased production from the Barrister Oil Rights is unknown.

We can only determine the cost and difficulty of expanding Barrister’s customer base based on actual oil production and then-current market conditions and demand for oil.

As such, we cannot predict the cost and ease or difficulty of selling increased oil production from Barrister Oil Rights.

This unknown factor in commercially exploiting any increased oil production from the Barrister Oil Rights increases the risk of investing in the shares of the Company because it renders uncertain a key factor in future profitability of the Company.

These factors make it extremely difficult to predict future oil, natural gas and NGLs price movements with any certainty.

During the three years ended December 31, 2022, NYMEX WTI prices ranged from a high of $123.64 per barrel on March 8, 2022 to a low of -$36.98 per barrel on April 20, 2020, and NYMEX Henry Hub prices ranged from a high of $23.86 per MMBtu on February 17, 2021 to a low of $1.33 per MMBtu on September 21, 2020.

Prices were particularly volatile in 2020 and 2021, with five-year highs occurring in 2021 and five-year lows occurring in 2020, as a result of multiple significant factors impacting supply and demand in the global oil and natural gas markets, including those relating to the COVID-19 global pandemic.

We make price assumptions that are used for planning purposes, and a significant portion of our cash outlays, are largely fixed in nature.

Accordingly, if commodity prices are below the expectations on which these commitments were based, our financial results are likely to be adversely and disproportionately affected because these cash outlays are not variable in the short term and cannot be quickly reduced to respond to unanticipated decreases in commodity prices.

Specifically, prices of oil, and NGLs may adversely affect our revenues, cash flows, earnings and returns;

our ability to attract capital to finance our operations and the cost of the capital;

the profit or loss we incur in exploring for and developing our reserves;

and the value of our oil and natural gas properties.

A substantial or extended decline in commodity prices may also reduce the amount of oil and natural gas that we can produce economically and cause a significant portion of our development projects to become uneconomic.

This may result in our having to make significant downward adjustments to our estimated proved reserves.

A reduction in production could also result in a shortfall in expected cash flows and require us to reduce capital spending, which could negatively affect our ability to replace our production and our future rate of growth, or require us to borrow funds to cover any such shortfall, which we may be unable to obtain at such time on satisfactory terms.

Additionally, if we are required to curtail our drilling program, we may be unable to continue to hold leases that are scheduled to expire, which may further reduce our reserves.

As a result, if oil and/or NGL prices experience a sustained period of weakness, our future business, financial condition, results of operations, liquidity, and ability to finance planned capital expenditures may be materially and adversely affected.

Our business is subject to climate-related transition risks, including evolving climate change legislation, fuel conservation measures, technological advances and negative shift in market perception towards the oil and natural gas industry, which could result in increased operating expenses and capital costs, financial risks and potential reduction in demand for oil and natural gas.

Recently, these is an increasing attention from governmental and regulatory bodies, investors, consumers, industry and other stakeholders on combating climate change, together with changes in consumer and industrial/commercial behavior, societal expectations on companies to address climate change, investor and societal expectations regarding voluntary climate-related disclosures, preferences and attitudes with respect to the generation and consumption of energy, the use of hydrocarbons, and the use of products manufactured with, or powered by, hydrocarbons.

This attention results in the enactment of climate change-related regulations, policies and initiatives, including alternative energy requirements, new fuel consumption standards, energy conservation and emissions reductions measures and responsible energy development;

technological advances with respect to the generation, transmission, storage and consumption of energy, increased availability of, and increased demand from consumers and industry for, energy sources other than oil and natural gas (including wind, solar, nuclear, and geothermal sources as well as electric vehicles); and development of, and increased demand from consumers and industry for, lower-emission products and services (including electric vehicles and renewable residential and commercial power supplies) as well as more efficient products and services.

These developments may in the future adversely affect the demand for products manufactured with, or powered by, petroleum products, as well as the demand for, and in turn the prices of, oil and natural gas products.

Such developments may also adversely impact, among other things, our stock price and access to capital markets, and

the availability to us of necessary third-party services and facilities that we rely on, which may increase our operational costs and adversely affect our ability to successfully carry out our business strategy.

Climate change-related developments may also impact the market prices of or our access to raw materials such as energy and water and therefore result in increased costs to our business.

More broadly, the enactment of climate change-related regulations, policies and initiatives across the market at the government, corporate, and/or investor community levels may in the future result in increases in our compliance costs and other operating costs and have other adverse effects (e.g., greater potential for governmental investigations or litigation).

Seismic studies do not guarantee that oil or hydrocarbons are present or, if present, will produce in economic quantities.

Such seismic studies are merely an interpretive tool and do not necessarily guarantee that hydrocarbons are present or, if present, will produce in economic or profitable quantities.

Restrictions on our ability to obtain, recycle and dispose of water may impact our ability to execute our drilling and development plans in a timely or cost-effective manner .

Water is an essential component of both the drilling and hydraulic fracturing processes.

If drought conditions were to occur or demand for water were to outpace supply, our ability to obtain water could be impacted and in turn, our ability to perform hydraulic fracturing operations could be restricted or made more costly.

Along with the risks of other extreme weather events, drought risk, in particular, is likely increased by climate change.

If we are unable to obtain water to use in our operations from local sources, we may be unable to economically produce oil and natural gas, which could have an adverse effect on our financial condition, results of operations and cash flows.

In addition, significant amounts of water are produced in our operations.

Inadequate access to or availability of water recycling or water disposal facilities could adversely affect our production volumes or significantly increase the cost of our operations.

Participants in the oil and gas industry are subject to numerous laws that can affect the cost, manner, or feasibility of doing business.

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The occurrence of any of these factors, or the continuation thereof, could have a material adverse effect on our business, financial position, or future results of operations.

Our operations are subject to operating hazards inherent to our industry that may adversely impact our ability to conduct business, and we may not be fully insured against all such operating risks.

The operating hazards in exploring for and producing oil and natural gas include:

encountering unexpected subsurface conditions that cause damage to equipment or personal injury, including loss of life;

equipment failures that curtail or stop production or cause severe damage to or destruction of property, natural resources or other equipment;

blowouts or other damages to the productive formations of our reserves that require a well to be re-

drilled or other corrective action to be taken;

and storms and other extreme weather conditions that cause damages to our production facilities or wells.

Because of these or other events, we could experience environmental hazards, including release of oil and natural gas from spills, natural gas leaks, accidental leakage of toxic or hazardous materials, such as petroleum liquids, drilling fluids or fracturing fluids, including chemical additives, underground migration, and ruptures.

If we experience any of these problems, we could incur substantial losses in excess of our insurance coverage.

The occurrence of a significant event or claim, not fully insured or indemnified against, could have a material adverse effect on our financial condition and operations.

In accordance with industry practice, we maintain insurance against some of the operating risks to which our business is exposed.

Also, no assurance can be given that we will be able to maintain insurance in the future at rates we consider reasonable to cover our possible losses from operating hazards and we may elect no or minimal insurance coverage.

This regulatory scheme also poses the risk of government civil and criminal actions and private citizen civil lawsuits against the Company

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The Company lack insurance to cover potential violations and resulting liabilities for environmental and occupational health and safety laws and regulations as well as claims for damages to property or persons or imposition of penalties resulting from our operations.

Terrorist attacks aimed at energy operations could adversely affect Barrister’s or any future oil exploration and production business.

Negative public perception of the oil and gas industry could have a material and adverse effect on us.

Opposition toward oil and natural gas drilling and development activity has been growing globally and is particularly pronounced in the United States.

Negative public perception regarding us and/or our industry resulting from, among other things, concerns raised by advocacy groups about climate change may lead to increased reputational and litigation risk and regulatory, legislative and judicial scrutiny, which may, in turn, lead to new state and federal safety and environmental laws, regulations, guidelines and enforcement interpretations.

Companies in the oil and natural gas industry are often the target of activist efforts from both individuals and non-governmental organizations regarding safety, human rights, climate change, environmental matters, sustainability, and business practices.

The foregoing factors may cause operational delays or restrictions, increased operating costs, additional regulatory burdens and increased risk of litigation.

Negative perceptions regarding our industry and reputational risks may also in the future adversely affect our ability to successfully carry out our business strategy by adversely affecting our access to capital.

Certain segments of the investor community have developed negative sentiment towards investing in our industry.

Further, certain investment banks and asset managers based both domestically and internationally have announced that they are adopting climate change guidelines for their banking and investing activities.

Certain other stakeholders have also pressured commercial and investment banks to stop financing oil and gas production and related infrastructure projects.

Institutional lenders who provide financing to companies in the energy sector have also become more attentive to sustainable lending practices, and some may elect not to provide traditional energy producers or companies that support such producers with funding.

Such developments aimed at limiting climate change and reducing air pollution, could result in downward pressure on the stock prices of oil and gas companies, including ours.

This may also potentially result in a reduction of available capital funding for potential development projects, impacting our future financial results.

Terrorist attacks aimed at energy operations could adversely affect our future oil exploration and production business.

The continued threat of terrorism and the effect of military and other government action have led and may lead to further increased volatility in prices for oil and natural gas and could affect these commodity markets or the financial markets.

government has issued warnings that energy assets may be a

future target of terrorist organizations.

government has issued warnings that energy assets may be a future target of terrorist organizations.

These developments have subjected our oil and natural gas operations to increased risks.

Any future terrorist attack on facilities used by Barrister or other future oil exploration and production operations, those of such operations’ customers, the infrastructure used for transportation of oil, and, in some cases, those of other energy companies, could have a material adverse effect on the Company.

Future acquisitions of oil and gas exploration and production rights and leases, if any, may not produce oil as projected, and we may be unable to determine reserve potential, identify liabilities associated with the properties that we acquire, or obtain protection from sellers or lessors against such liabilities.

Acquiring oil and natural gas exploration and production rights and leases requires us to assess reservoir and infrastructure characteristics, including recoverable reserves, development and operating costs, and potential environmental and other liabilities.

This review will not necessarily reveal all existing or potential problems.

During our due diligence, we may not inspect every well or pipeline.

We cannot necessarily observe structural and environmental problems, such as pipe corrosion, when an inspection is made.

We may not be able to obtain contractual indemnities from the seller or lessors for liabilities created prior to our purchase or lease of the property.

We may be required to assume the risk of the physical condition of the properties in addition to the risk that the properties may not perform in accordance with our expectations.

These risks could render unprofitable our drilling operations and significantly affect the overall financial performance and condition of the Company.

Risks Related to the Acquisition of Barrister

We may incur losses as a result of title defects in the properties in which we invest .

It is the normal practice in the oil and gas exploration industry for the person or company acting as the operator of the oil rig or well to obtain a preliminary title review to ensure there are no obvious defects in the title to the well.

Frequently, as a result of such examinations, certain curative work must be done to correct defects in the marketability of the title, and such curative work entails expense.

Our failure to cure any title defects may delay or prevent us from utilizing the associated mineral interest, which may adversely affect our ability in the future to increase production and reserves.

Additionally, undeveloped acreage has a greater risk of title defects than developed acreage.

If there are any title defects or defects in the assignment of leasehold rights in properties in which we hold an interest, we will suffer a financial loss.

If there are title defects to the Barrister Oil Rights, which we acquired as a result of the Acquisition, then the Company may have no recourse if the Barrister Oil Rights have any title defects that prevent oil exploration and production.

This review will not necessarily reveal all existing or potential problems.

During our due diligence, we may not inspect every well or pipeline.

We cannot necessarily observe structural and environmental problems, such as pipe corrosion, when an inspection is made.

We may not be able to obtain contractual indemnities from the seller or lessors for liabilities created prior to

our purchase or lease of the property.

Operational Risks

We have a limited history of owning and operating oil and gas exploration and production operations .

Prior to the Barrister Acquisition in November 2020, we have not generated any revenue.

Although we acquired Barrister’s business pursuant to the Barrister Acquisition, these drilling operations are minimal and commenced less than three years ago.

In addition, the history of obtaining oil rights by Barrister was minimal in terms of production and does not reveal the potential oil production and profitability of the Company Oil Rights.

Subsequently, in the fourth quarter of 2022, we acquired additional oil rights and interests by purchasing NONOP Assets and Buckley Assets, and now we need to obtain sufficient funds to develop reserves related to these properties.

However, the lack of a more extensive operating history may discourage lenders or funding sources from providing working capital to the Company.

There is no assurance that the Company Oil Rights, including rights acquired in the Barrister Acquisition and oil rights with respect to acquisition of NONOP Assets and Buckley Assets will produce oil on a profitable basis, even with deep drilling rigs.

Investors should carefully consider the lack of operating history of the Company and the lack of any significant oil production from the Company Oil Rights prior to making an investment decision to invest in the Company.

If the Company is unable to obtain needed capital or financing on satisfactory terms, its ability to develop future reserves will be adversely affected.

If drilling operations are curtailed, then the Company may be unable to continue to hold leases and drilling rights that are scheduled to expire, which may further reduce oil reserves, which will materially and adversely affect future business, financial condition, results of operations, liquidity, and ability to finance planned capital expenditures.

We have entered a highly competitive and highly capital-intensive industry, and any oil production may be insufficient to fund, sustain, or expand revenue-generating operations .

The oil drilling exploration and production business are capital intensive due to the cost of experienced personnel;

equipment and other assets required to drill, produce and store oil;

regulatory compliance costs;

potential liability exposures and financial effects;

and the risk of unpredictable volatility in oil market prices and predatory pricing by competitors.

Drilling requires an upfront payment of operational costs with no guarantee that actual oil production will cover such expenses.

“Dry” holes for the first and/or second oil wells could deplete any available funding raised by the Company and render the Company insolvent.

The Company does not have cash flow or cash reserves sufficient to fund more extensive and deep drilling on Company Oil Rights.

Future cash flow from our operations and access to capital are subject to a number of variables, including, but not limited to:

(i) the market prices at which our oil production is sold;

(ii) our proved reserves;

(iii) the level of hydrocarbons we can produce from any future oil wells;

(iv) our ability to acquire, locate and produce new oil reserves;

(v) the levels of our operating expenses;

(vi) reduction in the U.S.

and global demand for oil.

Our acquisitions of oil and gas properties and subsequent exploration and development drilling efforts and the operation of our wells may not be profitable or achieve our targeted returns .

Exploration, development, drilling and production activities are subject to many risks.

Acquiring oil and natural gas exploration and production rights and leases requires us to assess reservoir and infrastructure characteristics,

including recoverable reserves, development and operating costs, and potential environmental and other liabilities.

We may invest in property, including undeveloped leasehold acreage, which we believe will result in projects that will add value over time.

However, we cannot guarantee that any leasehold acreage acquired will be profitably developed, that new wells drilled will be productive or that we will recover all or any portion of our investment in such leasehold acreage or wells.

Drilling for oil and natural gas may involve unprofitable efforts, including wells that are productive but do not produce sufficient net reserves to return a profit after deducting operating and other costs.

In addition, we may not be successful in controlling our drilling and production costs to improve our overall return and wells that are profitable may not achieve our targeted rate of return.

Wells may have production decline rates that are greater than anticipated.

Future drilling and completion efforts may impact production from existing wells, and parent-child effects may impact future well productivity as a result of timing, spacing proximity or other factors.

We may be required to assume the risk of the physical condition of the properties in addition to the risk that the properties may not perform in accordance with our expectations.

These risks could render unprofitable our drilling operations and significantly affect the overall financial performance and condition of the Company.

The Company’s senior officers are not experienced in the management of oil and gas exploration and production operations and may be inadequate or ill-equipped to successfully manage a public company with oil drilling and production operations .

While our senior officers are experienced business executives, they were not involved and are not experienced in the daily operational management of oil exploration and production operations.

The oil and gas production industry present unique challenges to the management of a public company in that industry.

Such challenges include understanding the complex federal, state and local regulations and laws governing or affecting oil and gas drilling and production;

understanding the complexities of selling crude oil in the global crude oil market, including hedging strategies;

successfully developing a small oil drilling and production company in any industry with numerous domestic and foreign competitors, most of whom have significantly greater:

financial resources;

market share and power;

distribution channels;

production and storage capacity as well as far greater oil reserves under control or ownership;

access to necessary drilling and production equipment;

ability to navigate and hedge against erratic global market for crude oil;

financial reserves that allows the competitor to survive suspension of operations and inability to sell oil production at all or at a price that generates acceptable profit margins;

influence over customers, distributors of oil, regulators and legislators;

and ability to successfully plan and prepare for changes in oil and gas industry.

Since none of the CoJax senior officers are experienced in the management of oil exploration and production companies, the Company’s management is relying on Jeffrey Delancey and COP.

Failure to conduct our oil and gas operations in a profitable manner may result in impairments of our proved reserves quantities, impairment of our oil and gas properties, and a write-down in the carrying value of our unproved properties, and over time may adversely affect our growth, revenues and cash flows.