What changed in this filing

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Item 1A. Risk Factors

2022-03-24 compared with 2021-03-25 · 21 added, 47 removed, 318 unchanged (18% of the section changed)

17 unchanged sentences

A future increase in our reserves will depend not only on our ability to explore and develop any properties we may have from time to time, but also on our ability to select and acquire suitable producing properties or prospects.

We cannot assure you that we will be able to locate and continue to locate satisfactory properties for acquisition

or participation.

Moreover, if we do identify such acquisitions or participations, we may determine that current markets, terms of acquisition and participation or pricing conditions make such acquisitions or participations uneconomic.

We cannot assure you that we will be able to locate and continue to locate satisfactory properties for acquisition or participation.

Moreover, if we do identify such acquisitions or participations, we may determine that current markets,

terms of acquisition and participation or pricing conditions make such acquisitions or participations uneconomic.

We cannot assure you that we will discover or acquire further commercial quantities of oil and natural gas.

33 unchanged sentences

Our asset in Pennsylvania has not yet reached the mature stage, but at some point we may need to acquire and develop other producing assets to maintain our current level or to grow.

To this end, we have begun to acquire leases and to expand our holdings in Pennsylvania.

To this end, we have begun to acquire leases and to expand our holdings in Pennsylvania and Oklahoma.

Our future depends on being able to successfully fund and develop these assets.

4 unchanged sentences

An economic downturn and uncertainty may have a negative impact on our business.

In 2008, the financial markets collapsed causing the capital markets for the natural gas and oil sector substantial setbacks.

As recently as 2015 and 2016, natural gas and oil prices decreased to a point as to make almost all investment in natural gas and oil projects uneconomic.

As of March 16, 2020, the one month forward contract for WTI (NYMEX) was $28.70 per Bbl and the one month forward contract for natural gas (NYMEX) was $1.82 per MMBtu.

We cannot predict the length and impact of the recent significant downturn in demand and commodity prices as a result of the global COVID-19 crisis and the discord among oil producing nations referred to as OPEC+.

During 2021 and 2020, there was tremendous volatility in prices and available financing for oil and gas projects.

There can be no assurance that we will be able to access capital markets to provide funding for future operations that would require additional capital beyond our current existing available capital on terms acceptable to us.

10 unchanged sentences

Failure to obtain such financing on a timely basis could cause us to forfeit our interest in certain properties, miss certain acquisition opportunities, or reduce or terminate our operations.

If our revenues from our reserves

decrease as a result of lower oil and natural gas prices or otherwise, it will affect our ability to expend the necessary capital to replace our reserves or to maintain our production.

If our revenues from our reserves decrease as a result of lower oil and natural gas prices or otherwise, it will affect our ability to expend the necessary capital to replace our reserves or to maintain our production.

If our cash flow from operations is not sufficient to satisfy our capital expenditure requirements, there can be no assurance that additional debt, equity financing or the proceeds from the sale of a portion or all of our interest in one or more projects will be available to meet these requirements or available on terms acceptable to us.

21 unchanged sentences

Our potential lenders will likely require security over substantially all of our assets.

If we become unable to pay our debt service charges or otherwise commit an event of default, such as bankruptcy, these lenders may foreclose on or

sell our properties.

If we become unable to pay our debt service charges or otherwise commit an event of default, such as bankruptcy, these lenders may foreclose on or sell our properties.

The proceeds of any such sale would be applied to satisfy amounts owed to our lenders and other creditors, and only the remainder, if any, would be available to us.

26 unchanged sentences

Approximately 93% and 97% of our production during fiscal 2021 and 2020, respectively was derived from our properties in the Marcellus region of Pennsylvania.

As a result of this geographic concentration, we may be disproportionately exposed to the effect of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, weather events or interruption of the processing or transportation of crude oil or natural gas.

As a result of this geographic concentration, we may be disproportionately exposed to the effect of regional supply and demand factors, delays or interruptions of production from

wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, weather events or interruption of the processing or transportation of crude oil or natural gas.

Additionally, we may be exposed to additional risks, such as changes in field-wide rules and regulations that could cause us to permanently or temporarily shut-in many or all of our wells within the Marcellus.

13 unchanged sentences

We depend on third-party operators and our key personnel, and competition for experienced, technical personnel may negatively affect our operations.

On the oil and natural gas properties that we do not operate, we will be dependent on such operators for the timing of activities related to such properties and will largely be unable to direct or control the activities of the operators.

Approximately 99% of our oil and natural gas properties are operated by third-party operators.

As such, we will be dependent on such operators for the timing of activities related to such properties and will largely be unable to direct or control the activities of the operators.

The objectives and strategy of those operators may not always be consistent with ours, and we have a limited ability to exercise influence over, and control the risks associated with, operations of these properties.

4 unchanged sentences

The contributions of these individuals to our immediate operations are likely to be of central importance.

In addition, the competition for qualified personnel in the oil and natural gas industry is intense, and there can be no assurance that we will be able to continue to attract and retain all personnel necessary for the development and operation

of our business.

Certain of our directors and officers are also directors of other companies and as such may, in certain circumstances, have a conflict of interest requiring them to abstain from certain decisions.

30 unchanged sentences

There is substantial risk that commodity prices may decline in the future, although it is not possible to predict the time or extent of such decline.

Volatile oil and natural gas prices make it difficult to estimate the value of producing properties for acquisition and often cause disruption in the market for oil and natural gas producing properties, as buyers and sellers have difficulty agreeing on such value.

agreeing on such value.

Price volatility also makes it difficult to budget for and project the return on acquisitions and development and exploitation projects.

44 unchanged sentences

However, since such laws and regulations are frequently changed, we are unable to predict the future effect of these laws and regulations.

Management continues to actively monitor the impact of the COVID-19 pandemic on the Company's financial condition, liquidity, operations, suppliers, industry and ability to obtain financing in future reporting periods.

Given the evolution of the COVID-19 pandemic and the global responses to curb its spread, the Company is currently not able to estimate the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity for the future.

To date, the COVID-19 pandemic has had little direct effect on the Company or its financial condition.

Risks Related to Internal Controls

45 unchanged sentences

Although the Anchor Shippers have dedicated their acreage and reserves to the Auburn GGS, the Auburn GGS may not be chosen by other producers in these areas to gather and compress the natural gas extracted.

We compete with other companies, including co-owners of the Auburn gas gathering system who operate other systems, for any such production from non-anchor shippers on the basis of many factors, including but not limited to geographic proximity to the production, costs of connection, available capacity, rates and access to markets.

We compete with

other companies, including co-owners of the Auburn gas gathering system who operate other systems, for any such production from non-anchor shippers on the basis of many factors, including but not limited to geographic proximity to the production, costs of connection, available capacity, rates and access to markets.

Competition in natural gas gathering is based in large part on existing assets, reputation, efficiency, system reliability, gathering system capacity and pricing arrangements.

24 unchanged sentences

Our ability to maintain and expand our natural gas gathering businesses depends on the level of drilling and production by Anchor Shippers and third parties in our gathering area.

Production from existing wells with access to our gathering systems will naturally decline over time.

Production from existing wells with access to our

gathering systems will naturally decline over time.

The amount of natural gas reserves underlying these existing wells may also be less than anticipated, and the rate at which production from these reserves declines may be greater than anticipated.

20 unchanged sentences

Accidents or other operating risks could further result in loss of service available to our customers.

The COVID-19 pandemic and recent developments in the global crude oil markets have had, and may continue to have, material adverse consequences for the global economy, which have impacted our planned operational activities, and may have a material adverse impact on our financial condition, results of operations and cash flows.

The responses of governmental authorities and companies across the world to reduce the spread of the COVID-19 pandemic have significantly reduced global economic activity.

Various containment measures, which have included business closures, work stoppages, shuttering of public spaces and events and/or severe restrictions of global and regional travel, among others, while aiding in the prevention of further spread of the virus, have resulted in the slowing of economic growth, reduced demand for crude oil and natural gas and the disruption of global manufacturing supply chains.

The longevity and severity of the impact of COVID-19 on the oil and gas industry, including the reduced demand for crude oil and natural gas commodities and its resulting impact on commodity prices, may continue until a vaccine or alternative treatment is made widely available across the globe.

We are unable to predict when, and if, an effective vaccine for COVID-19 will become available.

Additionally, in March 2020, OPEC and non-OPEC producers failed to agree to production cuts, causing a significant drop in crude oil prices.

Also, Saudi Arabia recently reduced its export prices to certain markets, while increasing its prices in others.

Subsequently, in April 2020, members of OPEC and certain non-OPEC producers agreed to production cuts through first quarter 2022.

While these production cuts are expected to reduce excess global crude oil inventories in 2021, they are unlikely to be sufficient to offset the sharp demand decreases caused by COVID-19 in the near-term.

Collectively, these factors have contributed to significant negative global economic impacts, including a significant drop in demand for hydrocarbon products, potentially causing the US and other global economies to fall into a recession that could extend throughout 2020 and beyond.

A recession could likely extend the time for the current crude oil markets to absorb excess supplies, resulting in suppressed crude oil prices for a number of future quarters.

Our profitability could be significantly affected by this decreased demand and lower commodity price environment.

The decline in commodity prices and our future estimated production levels could lead to additional material impairments of our long-lived assets, intangible assets, equity method investments and right-of-use assets.

It is likely additional impairments could be triggered if the COVID-19 pandemic leads to a continued and sustained reduction in global economic activity and demand for energy.

The COVID-19 pandemic could potentially further impact our global workforce and operations.

The infection of key personnel, and/or the infection of a significant portion of our workforce, could result in business continuity and productivity disruptions.

Further, containment measures have been implemented to mitigate the spread of COVID-19, there is the risk that reduced demand could continue should there be wide-spread and sustained adoption of certain behavioral changes, such as reduced travel and work from home policies, among others.

Such behavioral changes, and perceived benefits to the environment, have recently been cited by groups opposing the oil and gas industry as cause for future long-term global adoption.

We could be negatively impacted should there be wide-spread and sustained changes in consumer behavioral patterns that result in reduced demand for and consumption of energy commodities.

The impacts of COVID-19 and the significant drop in commodity prices have had an unprecedented impact on the global economy.

Impacts of the COVID-19 pandemic and/or any worsening of the global business and economic environment, may heighten or exacerbate many of the other risks disclosed.

We are unable to predict all potential impacts to our business, the severity of such impacts or the duration.

These risks could have a material adverse impact on our financial position, results of operations and cash flows.

UNRESOLVED STAFF COMMENTS.

The information required by Item 2 is contained in ‘ ‘Item 1.

LEGAL PROCEEDINGS.

At December 31, 2020, we did not have any legal proceedings to which we were a party.

However, please see Note 15, Subsequent Events, for current litigation.

MINE SAFETY DISCLOSURES.

Not applicable.

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

What changed 10-K

Item 1A. Risk Factors