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Item 1A. Risk Factors

2026-06-29 compared with 2025-06-27 · 203 added, 262 removed, 56 unchanged (89% of the section changed)

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We could also face additional

risks and uncertainties not currently known to us or that we currently deem to be immaterial.

If any of these risks actually occurs,

it could materially harm our business, financial condition or results of operations and the trading price of our shares could decline.

Investors should carefully consider each of the following risk factors and all of the other information set forth in this Annual Report

on Form 10-K.

risks and uncertainties that are not currently known to us or that we deem immaterial.

If any of these risks actually occur, it could

materially harm our business, financial condition, or results of operations, and the trading price of our shares could decline.

should carefully consider each of the following risk factors and all of the other information set forth in this Annual Report on Form

RELATED TO OUR BUSINESS AND INDUSTRY

of oil and gas prices significantly affects our results and profitability.

for oil and natural gas fluctuate widely.

We cannot predict future oil and natural gas prices with any certainty.

Historically, the markets

for oil and gas have been volatile, and they are likely to continue to be volatile.

Factors that can cause price fluctuations include

the level of global demand for petroleum products;

foreign supply and pricing of oil and gas;

the actions of OPEC, its members and other

state-controlled oil companies relating to oil price and production controls;

nature and extent of governmental regulation and taxation,

including environmental regulations;

level of domestic and international exploration, drilling and production activity;

the cost of exploring

for, producing and delivering oil and gas;

speculative trading in crude oil and natural gas derivative contracts;

availability, proximity

and capacity of oil and gas pipelines and other transportation facilities;

weather conditions;

the price and availability of alternative

technological advances affecting energy consumption;

national and international pandemics;

and, overall political and economic

conditions in oil producing countries.

and decreases in prices also affect the amount of cash flow available for capital expenditures and our ability to borrow money or raise

additional capital.

The amount we can borrow from banks may be subject to redetermination based on changes in prices.

In addition, we

may have ceiling test writedowns when prices decline.

Lower prices may also reduce the amount of crude oil and natural gas that can be

for oil and natural gas fluctuate widely and are influenced by numerous factors beyond our control, including global supply and demand,

actions of OPEC and other producing nations, government regulation and taxation (including environmental regulation), levels of exploration

and production activity, transportation and storage capacity constraints, availability of alternative fuels, technological developments

affecting energy consumption, speculative trading in commodity derivatives, weather conditions, geopolitical developments, pandemics,

and overall global economic conditions.

price fluctuations impact our cash flows, capital expenditure flexibility, and access to capital.

Reductions in prices may decrease the

borrowing base under our credit facility, trigger ceiling test write-downs, and reduce the amount of oil and natural gas that can be

produced economically.

Thus, we may experience material increases or decreases in reserve quantities solely as a result of price changes

and not as a result of drilling or well performance.

in oil and gas prices impact both estimated future net revenue and the estimated quantity of proved reserves.

Any reduction in reserves,

including reductions due to price fluctuations, can reduce the borrowing base under our credit facility and adversely affect the amount

of cash flow available for capital expenditures and our ability to obtain additional capital for our exploration and development activities.

and natural gas prices do not necessarily fluctuate in direct relationship to each other.

Lower prices or lack of storage may have an

adverse affect on our financial condition due to reduction of our revenues, operating income and cash flows;

curtailment or shut-in of

our production due to lack of transportation or storage capacity;

cause certain properties in our portfolio to become economically unviable;

and, limit our financial condition, liquidity, and/or ability to finance planned capital expenditures and operations.

results of operations may be negatively impacted by current global events, including the imposition of tariffs.

business, financial condition and future results are subject to political and economic risks and uncertainties, including volatility

in the political, legal and regulatory environments as a result of the change in U.S.

presidential administration and instability resulting

from civil unrest, political demonstrations, mass strikes or armed conflict or other crises in crude oil or natural gas producing areas

such as the ongoing war between Russia and Ukraine and the Israel-Iran conflict.

Escalating trade tensions, particularly between the U.S.

and Canada, Mexico, China and other countries, may lead

to the imposition of tariffs and trade restrictions.

Our operators could face unanticipated costs and competition for materials and components

to continue their current drilling plans.

In addition, the current U.S.

presidential administration

has signaled it will encourage increased domestic production of crude oil, which could lead to falling crude oil and natural gas prices.

As a result, reserve estimates may change significantly due to price movements rather than operational performance.

in commodity prices also affect estimated future net revenues and proved reserve quantities, which in turn can reduce our borrowing capacity

and limit access to additional capital for exploration and development activities.

and natural gas prices do not necessarily move in tandem, and periods of low prices or limited storage or transportation capacity may

adversely affect our financial condition by reducing revenues, operating income, and cash flows, causing production curtailments or shut-ins,

rendering certain properties uneconomic, and limiting our liquidity and ability to fund capital expenditures.

results of operations may be negatively impacted by current global political and economic events, including evolving trade policies,

tariffs, and broader geopolitical instability.

business is subject to risks and uncertainties arising from volatility in political, legal, and regulatory environments, including changes

presidential administrations, shifting energy and trade policies, and increased geopolitical tensions.

Ongoing armed conflicts,

including the war between Russia and Ukraine and instability in the Middle East, as well as other regional conflicts or civil unrest

in crude oil and natural gas producing areas, may contribute to commodity price volatility and supply disruptions.

trade tensions and a more fragmented global trade environment, including between the United States and key trading partners such as China,

Mexico, and Canada, have resulted in, and may continue to result in, tariffs, sanctions, export controls, or other trade restrictions.

These measures, as well as efforts to reshore or diversify critical supply chains, may increase costs and limit the availability of equipment,

materials, and services required for our operators’ drilling and development activities.

the same time, energy security policies and regulatory initiatives in the United States and abroad may seek to increase domestic oil

and natural gas production, which could alter supply-demand dynamics and exert downward pressure on commodity prices.

These factors,

individually or collectively, could adversely affect our results of operations, financial condition, and cash flows.

in environmental laws, could increase our operators’ costs and adversely impact our business, financial condition, and cash flows.

recent years the U.S.

Congress has considered legislation to reduce emissions of GHGs, including methane, a primary component of natural

gas, and carbon dioxide, a byproduct of the burning of natural gas.

Addressing GHG emissions with legislation on emissions fees could

increase operating costs within the oil and gas industry.

resulting from crude oil and natural gas production, consisting primarily of salt-water, are disposed by injection in belowground disposal

In recent years, state and federal regulatory agencies have focused on a possible connection between fluid injection and increased

seismic activity.

The Texas Railroad Commission has suspended or limited new well permits for salt water disposal wells, particularly

in the Permian Basin.

Increased regulation on the treatment and disposal of fluids could increase operating costs and curtail economical

oil and gas prices and other factors may cause us to record ceiling test writedowns.

oil and gas prices increase the risk of ceiling limitation write-downs.

We use the full cost method to account for oil and gas operations.

Accordingly, we capitalize the cost to acquire, explore for and develop crude oil and natural gas properties including the cost of abandoned

properties, dry holes, geophysical costs and annual lease rentals.

Sales or other dispositions of oil and natural gas properties are

accounted for as adjustments to capitalized costs, with no gain or loss recorded.

Depletion of evaluated oil and natural gas properties

is computed in the units of production method, whereby capitalized costs are amortized over total proved reserves.

Under the full cost

accounting rules, the net capitalized cost of crude oil and natural gas properties may not exceed a “ceiling limit” which

is based upon the present value of estimated future net cash flows from proved reserves, discounted at 10% plus the lower of cost or

fair market value of unproved properties.

If net capitalized costs of oil and natural gas properties exceed the ceiling limit, we must

charge the amount of the excess against earnings.

This is called a “ceiling test writedown.” We use the unweighted arithmetic

average first day of the month price for oil and natural gas for the 12-month period preceding the calculation date in estimating discounted

future net reserves.

Under the accounting rules, we are required to perform a ceiling test each quarter.

A ceiling test writedown does

not impact cash flow from operating activities, but does reduce stockholders’ equity and earnings.

The risk that we will be required

to write down the carrying value of oil and natural gas properties increases when oil and natural gas prices are low.

There were no ceiling

test impairments on our oil and gas properties during fiscal 2025 and 2024.

recent years, U.S.

federal and state governments have considered or implemented legislation and regulatory initiatives aimed at GHG emissions,

including methane and carbon dioxide.

Such measures, including potential emissions fees, reporting requirements, or performance standards,

could increase operating costs and compliance burdens within the oil and natural gas industry.

addition, produced water and other fluids associated with oil and natural gas production are commonly disposed of through underground

injection wells.

Regulators have increasingly focused on the potential link between fluid injection and induced seismicity.

state regulatory agencies, including the Texas Railroad Commission, have imposed restrictions or additional permitting requirements on

saltwater disposal wells in certain areas, including portions of the Permian Basin.

Further regulation of fluid disposal or seismicity

concerns could increase operating costs, limit disposal capacity, and adversely impact the economic viability of drilling and production

oil and gas prices and other factors may cause us to record ceiling test write-downs.

account for our oil and natural gas operations using the full cost method, under which acquisition, exploration, and development costs—including

costs of abandoned properties, dry holes, geophysical costs, and lease rentals—are capitalized.

Sales or dispositions of oil and

natural gas properties are recorded as adjustments to capitalized costs, with no gain or loss recognized.

Depletion is calculated using

the units-of-production method based on total proved reserves.

full cost accounting rules, the net capitalized cost of oil and natural gas properties is subject to a “ceiling limitation”

based on the present value of estimated future net cash flows from proved reserves, discounted at 10%, plus the lower of cost or fair

market value of unproved properties.

The ceiling calculation uses the unweighted arithmetic average first-day-of-the-month prices for

oil and natural gas over the preceding 12-month period and is performed quarterly.

If capitalized costs exceed the ceiling, the excess

must be charged to earnings as a noncash “ceiling test write-down.” While such write-downs do not affect cash flows from

operations, they reduce net income and stockholders’ equity.

risk of ceiling test write-downs increases during periods of low commodity prices.

There were no ceiling test impairments recorded during

fiscal 2026 or 2025.

must replace reserves we produce.

future success depends upon our ability to find, develop or acquire additional, economically recoverable oil and gas reserves.

reserves will generally decline as reserves are depleted, except to the extent that we can find, develop or acquire replacement reserves.

One offset to the obvious benefits afforded by higher product prices especially for small to mid-cap companies in this industry, is that

quality domestic oil and gas reserves are hard to find.

future success depends on our ability to find, develop, or acquire additional economically recoverable oil and gas reserves.

Proved reserves

will generally decline as reserves are depleted, except to the extent that they are replaced through successful exploration, development,

or acquisition activities.

The availability of high-quality domestic oil and natural gas opportunities is limited, and competition for

such assets is intense;

as a result, there can be no assurance that we will be able to identify, complete, or integrate acquisitions

on acceptable terms, if at all.

If we are unable to replace reserves on an economic basis, our production, revenues, and long-term business

prospects could be adversely affected.

Approximately

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may not ultimately be developed.

of undeveloped reserves requires significant capital expenditures and successful drilling.

Our reserve data assumes that we can and will

make these expenditures and conduct these operations successfully.

These assumptions, however, may not prove correct.

Delays in the development

of our reserves, increases in costs to develop such reserves, or decreases in commodity prices will reduce the future net revenues or

our estimated proved undeveloped reserves and may result in some projects becoming uneconomical.

In addition, if we or the outside operators

of our properties choose not to spend the capital to develop these reserves, or if we are not able to successfully develop these reserves,

we will be required to write-off these reserves.

Any such write-offs of our reserves could reduce our ability to borrow money and could

reduce the value of our common stock.

concerning our reserves and future net revenues estimates is inherently uncertain.

of oil and gas reserves, by necessity, are projections based on engineering data, and there are uncertainties inherent in the interpretation

of such data as well as the projection of future rates of production and the timing of development expenditures.

Reserve engineering

is a subjective process of estimating underground accumulations of oil and gas that are difficult to measure.

Estimates of economically

recoverable oil and gas reserves and of future net cash flows depend upon a number of variable factors and assumptions, such as future

production, oil and gas prices, operating costs, development costs and remedial costs, all of which may vary considerably from actual

As a result, estimates of the economically recoverable quantities of oil and gas and of future net cash flows expected therefrom

may vary substantially.

As required by the SEC, the estimated discounted future net cash flows from proved reserves are based on a twelve

month un-weighted first-day-of-the-month average oil and gas prices for the twelve months prior to the date of the report.

Actual future

prices and costs may be materially higher or lower.

increase in the differential between NYMEX and the reference or regional index price used to price our oil and gas would reduce our cash

of undeveloped reserves requires significant capital expenditures and successful drilling operations.

Our reserve estimates assume

that these expenditures will be made and that development activities will be successful;

however, these assumptions may not prove

Delays in the development, increased development costs, lower commodity prices, capital constraints, or unsuccessful

drilling results could reduce future net revenues, decrease estimated proved undeveloped reserves, or render certain projects

If third-party operators or we do not invest the capital required to develop these reserves, or if development efforts

are unsuccessful, we may be required to write off such reserves.

Any resulting write-offs could reduce our borrowing capacity and

adversely affect the value of our common stock.

concerning our reserves and future net revenue estimates is inherently uncertain.

estimates are based on engineering and geological data and require significant judgment in interpreting such data and projecting future

production rates, development timing, and associated expenditures.

Reserve engineering is an inherently subjective process that involves

estimates of subsurface oil and gas accumulations that cannot be measured precisely.

of economically recoverable reserves and future net cash flows depend on a number of assumptions, including future production levels,

commodity prices, operating costs, development costs, and remedial expenditures, all of which may differ materially from actual results.

As a result, reserve estimates and related cash flow projections may vary significantly over time.

required by the SEC, estimated future net cash flows from proved reserves are calculated using a 12-month unweighted arithmetic average

of first-day-of-the-month oil and gas prices for the period preceding the reporting date.

Actual future prices and costs may differ materially

from those used in such estimates, which could result in significant revisions to reported reserves and associated valuations.

A negative differential between NYMEX and the reference or regional index price used to price our oil and gas would reduce our cash

flow from operations.

oil and gas is priced in the local markets where it is produced based on local or regional supply and demand factors.

The prices we receive

for our oil and gas are typically lower than the relevant benchmark prices, such as The New York Mercantile Exchange (“NYMEX”).

The difference between the benchmark price and the price we receive is called a differential.

Numerous factors may influence local pricing,

such as refinery capacity, pipeline capacity and specifications, upsets in the midstream or downstream sectors of the industry, trade

restrictions and governmental regulations such as policies of the Trump Administration.

Additionally, insufficient pipeline capacity,

lack of demand in any given operating area or other factors may cause the differential to increase in a particular area compared with

other producing areas.

During fiscal 2025, differentials averaged $2.79 per Bbl of oil and ($0.30) per Mcf of gas.

Increases in the differential

between the benchmark prices for oil and gas and the wellhead price we receive could significantly reduce our revenues and our cash flow

from operations.

oil and gas is priced in local markets based on regional supply and demand conditions.

As a result, the prices we receive may differ from benchmark prices such as those of the New York Mercantile Exchange (“NYMEX”), with the difference referred to

as a differential.

Differentials may be affected by a variety of factors, including refinery and pipeline capacity, pipeline specifications,

midstream and downstream disruptions, trade restrictions, governmental regulations, and regional demand conditions.

In addition, insufficient

pipeline capacity, lack of demand, or other regional factors may cause differentials to widen in certain producing areas.

During fiscal

2026, our average differentials were $2.97 per Bbl of oil and ($1.48) per Mcf of gas.

Changes in these differentials could materially

affect our revenues and cash flow from operations, with favorable differentials increasing realized prices and unfavorable differentials

decreasing them.

and operating activities are high-risk activities that subject us to a variety of factors that we cannot control.

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In addition, we incur the risk that no commercially productive reservoirs will be encountered, and there is no assurance

that we will recover all or any portion of our investment in wells drilled or re-entered.

that we will recover all or any portion of our investment in wells that are drilled or re-entered.

may not be able to fund the capital expenditures that will be required for us to increase reserves and production.

must make capital expenditures to develop our existing reserves and to acquire new reserves.

Historically, we have used our cash flow

from operations and borrowings under our credit facility to fund our capital expenditures, however, lower oil and gas prices may prevent

these options.

Volatility in oil and gas prices, the timing of our drilling programs and drilling results will affect our cash flow from

Lower prices and/or lower production will also decrease revenues and cash flow, thus reducing the amount of financial resources

available to meet our capital requirements, including reducing the amount available to pursue our drilling opportunities.

borrowing base under our credit facility will be determined from time to time by the lender.

Reductions in estimates of oil and gas reserves

could result in a reduction in the borrowing base, which would reduce the amount of financial resources available under the credit facility

to meet our capital requirements.

Such a reduction could be the result of lower commodity prices and/or production, inability to drill

or unfavorable drilling results, changes in oil and gas reserve engineering, the lender’s inability to agree to an adequate borrowing

base or adverse changes in the lender’s practices regarding estimation of reserves.

If cash flow from operations or our borrowing

base decrease for any reason, our ability to undertake exploration and development activities could be adversely affected.

our ability to replace production may be limited.

identified drilling locations are scheduled out over several years, making them susceptible to uncertainties that could materially alter

the occurrence or timing of their drilling.

management and outside operators have specifically identified and scheduled drilling locations as an estimation of our future multi-year

drilling activities on our existing acreage.

These drilling locations represent a significant part of our growth strategy.

to drill and develop these locations depends on a number of uncertainties, including crude oil and natural gas prices, the availability

of capital, costs, drilling results, regulatory approvals and other factors.

If future drilling results in these projects do not establish

sufficient reserves to achieve an economic return, we may curtail drilling in these projects.

Because of these uncertainties, we do not

know if the numerous potential drilling locations we have identified will ever be drilled or if we will be able to produce crude oil

or natural gas from these or any other potential drilling locations.

business depends on oil and natural gas transportation facilities which are owned by others.

marketability of our production depends in part on the availability, proximity and capacity of natural gas gathering systems, pipelines

and processing facilities.

Federal and state regulation of oil and gas production and transportation, tax and energy policies, changes

in supply and demand and general economic conditions could all affect our ability to produce and market our oil and gas.

must make capital expenditures to develop our existing reserves and acquire new reserves.

Historically, we have funded capital expenditures

through cash flow from operations and borrowings under our credit facility;

however, lower oil and natural gas prices or production levels

may limit these funding sources.

Volatility in commodity prices, the timing of drilling programs, and drilling results directly affect

cash flow from operations.

Lower prices or production levels would reduce revenues and cash flows, thereby limiting the financial resources

available to fund capital expenditures and pursue drilling opportunities.

under our credit facility is determined periodically by our lenders and is based in part on estimates of our oil and natural gas

Reductions in reserve estimates (whether due to lower commodity prices, production declines, drilling results, changes in

reserve engineering assumptions, or lender determination practices) could reduce the borrowing base and, in turn, the amount

available under the facility.

Any such reduction could limit our liquidity and ability to fund exploration and development

cash flow from operations or borrowing availability declines for any reason, our ability to undertake capital programs and replace production

could be adversely affected.

business depends on oil and natural gas transportation facilities that are owned by others.

marketability of our production depends in part on the availability, proximity, and capacity of natural gas gathering systems,

pipelines, and processing facilities.

Federal and state regulation of oil and gas production and transportation, tax policies, and energy

policies, changes in supply and demand, and general economic conditions could all affect our ability to produce and market our oil

own non-operating interests in properties developed and operated by third parties and, as a result, we are unable to control the operation

and profitability of such properties.

participate in the drilling and completion of wells with third-party operators that exercise exclusive control over such operations.

As a participant, we rely on third-party operators to successfully operate these properties pursuant to joint operating agreements and

other similar contractual arrangements.

As a participant in these operations, we may not be able to maximize the value associated with

these properties in the manner we believe appropriate, or at all.

For example, we cannot control the success of drilling and development

activities on properties operated by third-parties, which depend on a number of factors under the control of a third-party operator,

including such operator’s determinations with respect to, among other things, the nature and timing of drilling and operational

activities, the timing and amount of capital expenditures and the selection of suitable technology.

In addition, the third-party operator’s

operational expertise and financial resources and its ability to gain the approval of other participants in drilling wells will impact

the timing and potential success of drilling and development activities in a manner that we are unable to control.

A third-party operator’s

failure to adequately perform operations, breach of the applicable agreements or failure to act in ways that are favorable to us could

reduce our production and revenues, negatively impact our liquidity and cause us to spend capital in excess of our current plans, and

have a material adverse effect on our financial condition and results of operations.

participate in the drilling and completion of wells operated by third parties that exercise exclusive control over such operations pursuant

to joint operating agreements and other contractual arrangements.

Accordingly, we rely on third-party operators to conduct operations

and may not be able to maximize the value of these properties in the manner we believe appropriate, or at all.

have limited or no control over key operational decisions, including the timing and nature of drilling and development activities, capital

expenditures, and technology selection.

The success and timing of operations are also dependent on the operator’s technical expertise,

financial resources, and ability to obtain approvals from other participants.

third-party operator’s failure to perform adequately, breach of applicable agreements, or actions adverse to our interests could

reduce production and revenues, adversely affect liquidity, increase capital requirements beyond current plans, and have a material adverse

effect on our business, financial condition, and results of operations.

reserves in the oil and gas industry is highly competitive.

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We may compete with major oil and gas companies, other independent oil and gas companies,

and individual producers and operators, some of which have financial and personnel resources substantially in excess of those available

As a result, we may be placed at a competitive disadvantage.

Our ability to acquire and develop additional properties in the future

will depend upon our ability to select and acquire suitable producing properties and prospects for future development activities.

and individual producers and operators, some of which have substantially greater financial and personnel resources than we do.

we may be at a competitive disadvantage in acquiring reserves and development opportunities.

Our ability to acquire and develop additional

properties will depend on our ability to identify, evaluate, and acquire suitable producing properties and development prospects.

may not be insured against all of the operating hazards to which our business is exposed.

operations are subject to all the risks inherent in the exploration for, and development and production of oil and gas including blowouts,

fires and other casualties.

We maintain insurance coverage customary for operations of a similar nature, but losses could arise from

uninsured risks or in amounts in excess of existing insurance coverage.

operations are subject to risks inherent in the exploration, development, and production of oil and gas, including blowouts, fires, and

other casualties.

Although we maintain insurance coverage customary for similar operations, losses may result from uninsured risks or

from claims that exceed our insurance coverage limits.

in effective tax rates or laws could adversely impact our results of operations.

future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

changes in the valuation

of our deferred tax assets and liabilities;

tax effects of stock-based compensation;

or changes in tax laws, regulations or interpretations

example, in previous years, legislation has been proposed to eliminate or defer certain key U.S.

federal income tax deductions historically

available to crude oil and natural gas exploration and production companies.

Such proposed changes have included:

a repeal of the percentage

depletion allowance for crude oil and natural gas properties;

the elimination of deductions for intangible drilling and exploration and

development costs;

the elimination of the deduction for certain production activities;

and an extension of the amortization period for

certain geological and geophysical expenditures.

The passage of any legislation as a result of these proposals or other similar changes

federal income tax laws that alter, eliminate or defer these or other tax deductions utilized within the industry could adversely

affect our business, financial condition, results of operations and cash flows.

reliance on information technology, including those hosted by third parties, exposes us to cyber security risks that could affect our

business, financial condition or reputation.

oil and natural gas industry has become increasingly dependent on digital technologies to conduct certain exploration, development, production,

and processing activities, including digital technologies to interpret seismic data, manage drilling rigs, production equipment and gathering

systems, conduct reservoir modeling and reserves estimation, and process and record financial and operating data.

At the same time, cyber

incidents, including deliberate attacks or unintentional events, have increased.

government has issued public warnings that

indicate energy assets might be specific targets of cyber security threats.

Our and our operators’ technologies, systems, networks,

and those of vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches that

could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or

other disruption of business activities.

In addition, certain cyber incidents, such as surveillance, may remain undetected for an extended

Our systems for protecting against cyber security risks may not be sufficient.

As cyber incidents continue to evolve, we may

be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any

vulnerability to cyber incidents.

future effective tax rates could be subject to volatility or adversely affected by a number of factors, including changes in the valuation

of our deferred tax assets and liabilities, the tax effects of stock-based compensation, or changes in tax laws, regulations, or interpretations

particular, U.S.

federal tax policy remains subject to significant legislative activity and uncertainty, including comprehensive tax

legislation proposals such as the “One Big Beautiful Bill” and other similar measures that may modify corporate tax rates,

limit deductions, or otherwise change the taxation of energy companies.

In addition, prior and future legislative proposals have considered

changes to tax provisions historically utilized by crude oil and natural gas exploration and production companies, including percentage

depletion allowances, intangible drilling and development cost deductions, deductions related to production activities, and amortization

periods for geological and geophysical expenditures.

enactment of any such legislation or regulatory changes that alter, eliminate, or defer tax deductions or otherwise increase the tax

burden on the industry could adversely affect our business, financial condition, results of operations, and cash flows.

reliance on information technology, including information technologies hosted by third parties, exposes us to cybersecurity risks that

could affect our business, financial condition, or reputation.

reliance on information technology, including systems hosted or managed by third parties, exposes us to cybersecurity risks that could

adversely affect our business, financial condition, or results of operations.

The oil and natural gas industry is increasingly dependent

on digital technologies to conduct exploration, development, production, and processing activities, including seismic data interpretation,

drilling operations, production equipment and gathering systems management, reservoir modeling and reserves estimation, and the processing

and recording of financial and operational data.

At the same time, cyber incidents, including deliberate attacks and unintentional events,

have increased in frequency and sophistication.

government has issued public warnings indicating that energy assets may be targeted

by cybersecurity threats.

systems, as well as those of our operators, vendors, suppliers, and other business partners, may be subject to cyberattacks, information

security breaches, or other cybersecurity incidents that could result in unauthorized access to, misuse, loss, or destruction of proprietary

and other information, or disruption of business activities.

In addition, certain cyber incidents, such as surveillance or other advanced

persistent threats, may remain undetected for extended periods.

Our existing protective measures may not be sufficient to prevent or

detect such incidents, and we may need to expend additional resources to enhance our cybersecurity measures, investigate incidents, or

remediate vulnerabilities as threats continue to evolve.

loss of our Chief Executive Officer or President could adversely impact our ability to execute our business strategy.

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McComic, who have extensive experience and expertise in evaluating and

analyzing producing oil and gas properties and drilling prospects, maximizing production from oil and gas properties and developing and

executing acquisitions and financing.

As of March 31, 2025, we do not have key-man insurance on the lives of Mr.

analyzing producing oil and gas properties and drilling prospects, maximizing production from oil and gas properties, and developing

and executing acquisitions and financing.

As of March 31, 2026, we do not have key-man insurance for the lives of Mr.

Taylor and Ms.

The unexpected loss of the services of one or more of these individuals could, therefore, significantly and adversely affect our operations.

The unexpected loss of the services of one or more of these individuals could significantly and adversely affect

our operations.

may be affected by one substantial shareholder.

Taylor beneficially owns approximately 46% of the outstanding shares of our common stock.

Taylor is also our Chairman of the Board

and Chief Executive Officer.

As a result, Mr.

Taylor has significant influence in matters voted on by our shareholders, including the

election of our Board members.

Taylor participates in all facets of our business and has a significant impact on both our business

strategy and daily operations.

The retirement, incapacity or death of Mr.

Taylor, or any change in the power to vote shares beneficially

Taylor, could result in negative market or industry perception and could have an adverse effect on our business.

Taylor beneficially owns approximately 46% of our common stock and serves as our Chairman of the Board and Chief Executive Officer,

giving him significant influence in matters voted on by our shareholders, including the election of our Board members.

Taylor participates

in all facets of our business and has a significant impact on both our business strategy and daily operations.

The retirement, incapacity,

or death of Mr.

Taylor, or any change in the power to vote shares beneficially owned by Mr.

Taylor, could result in negative market perception

and adversely affect our business.

RELATED TO OUR COMMON STOCK

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These stockholders,

if acting together, would be able to influence significantly all matters requiring approval by our stockholders, including the election

if acting together, would be able to significantly influence all matters requiring approval by our stockholders, including the election

of our board of directors and the approval of mergers or other business combination transactions.

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common stock is traded on the New York Stock Exchange’s NYSE American.

The market price of our common stock has and could continue

to experience volatility due to reasons unrelated to our operating performance.

Our common stock has a relatively low trading volume, and

the market price of our common stock has experienced, and could continue to experience, volatility due to factors unrelated to our operating

These reasons include:

supply and demand for oil and

political conditions in oil and natural gas producing regions;

supply and demand for oil and natural gas;

political conditions in oil and natural gas producing

demand for our common stock and limited trading volume;

perception of our industry;

investor perception of our industry;

fluctuations in commodity prices;

2 unchanged sentences

general trends in the oil and natural gas industry;

market conditions and analysts’ estimates;

and, other events in the oil and

gas industry.

conditions and analysts’ estimates;

and other events in the oil and gas industry.

of these factors are beyond our control, and we cannot predict their potential effects on the price of our common stock.

4 unchanged sentences

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