Item 2. Properties
ITEM 2. PROPERTIES.
The information regarding the Company’s oil and gas properties as required by Item 102 of Regulation S-K is included in “ Item 1. Business ”, above and incorporated in this Item 2 by reference. Additional information regarding our oil and gas properties can be found in “Part II” - “ Item 8 Financial Statements and Supplementary Data” - “Supplemental Oil and Gas Disclosures (Unaudited) ”.
Office Leases
Effective September 1, 2019, the Company moved its corporate headquarters from 1250 Wood Branch Park Dr., Suite 400, Houston, Texas 77079 to 575 N. Dairy Ashford, Suite 210, Houston, Texas 77079 in connection with the expiration of its former office space lease. The Company entered into a sublease on approximately 5,200 square feet of office space that expires on August 31, 2023, and has a base monthly rent of approximately $10,000 with the first month rent due beginning on January 1, 2020. The Company paid a security deposit of $9,600. In December 2022, the Company entered into a new lease agreement for its existing office space that will commence on September 1, 2023, and expire on February 28, 2027. The base monthly rent will be approximately $9,200 for the first 18 months and increase to approximately $9,500 thereafter. The Company paid both a security deposit and prepaid rent for $14,700, respectively.
On November 1, 2019, the Company began subleasing approximately 300 square feet of office space at its current headquarters to SK Energy, which is owned and controlled by Dr. Kukes, our Chief Executive Officer and a member of the Board of Directors. The lease renews on a monthly basis, may be terminated by either party at any time upon prior written notice delivered to the other party, and has a monthly base rent of $1,200. Effective September 1, 2022, the Company extended the sublease agreement with SK Energy whereby SK Energy paid a $24,000 non-refundable two-year rent payment to the Company.
For the years ended December 31, 2022 and 2021, the Company incurred lease expense of $99,000 and $95,000, respectively, for the combined leases.
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