What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-19 compared with 2021-08-23 · 77 added, 58 removed, 258 unchanged (34% of the section changed)

3 unchanged sentences

(Thousands of dollars)

September 30,

Current Assets

24 unchanged sentences

Commitments and Contingencies

Common stock, $ .10 par value;

2,810,000 shares, Outstanding:

Common stock, $.

10 par value;

2,810,000 shares;

1,994,177 shares

Retained earnings

7 unchanged sentences

C ONSOLIDATED

Three and six months ended June 30, 2021 and 2020

Three and nine months ended September 30, 2021 and 2020

(Thousands of dollars, except per share amounts)

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Natural gas sales

Natural gas liquids sales

Realized gain (loss) on derivative instruments, net

Realized (loss) gain on derivative instruments, net

Field service income

Administrative overhead fees

Unrealized gain (loss) on derivative instruments, net

Unrealized (loss) on derivative instruments, net

Total Revenues

6 unchanged sentences

Gain on Sale and Exchange of Assets

(Loss) from Operations

Other (Expense)

(Loss) Income from Operations

Other Income (Expense)

Interest Income

Interest Expense

(Loss) Before Income Taxes

Income Taxes (Benefit)

Net (Loss) Attributable to Non-Controlling

Net (Loss) Attributable to PrimeEnergy

Basic (Loss) Per Common Share

Diluted (Loss) Per Common Share

(Loss) Income Before Income Taxes

Income Taxes Expense (Benefit)

Net (Loss) Income

Net Income (Loss) Attributable to Non-Controlling Interests

Net (Loss) Income Attributable to PrimeEnergy

Basic (Loss) Income Per Common Share

Diluted (Loss) Income Per Common Share

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements

1 unchanged sentence

C ONSOLIDATED

Six months Ended June 30, 2021 and 2020

Nine months Ended September 30, 2021 and 2020

(Thousands of dollars)

1 unchanged sentence

Balance at December 31, 2020

Balance at June 30, 2021

Net Income (Loss)

Purchase of non- controlling interest

Balance at September 30, 2021

Balance at December 31, 2019

Purchase 4,801 shares of common stock

Balance at June 30, 2020

Net Income (Loss)

Balance at September 30, 2020

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements

1 unchanged sentence

C ONSOLIDATED

Six Months Ended June 30, 2021 and 2020

Nine months ended September 30, 2021 and 2020

(Thousands of dollars)

2 unchanged sentences

Depreciation, depletion, amortization and accretion on discounted liabilities

Gain on sale and exchange of assets

Unrealized (gain) loss on derivative instruments, net

Deferred income taxes

Changes in assets and liabilities:

Gain on sale of properties

Unrealized loss (gain) on derivative instruments, net

Provision for deferred income taxes

Changes in operating assets and liabilities:

Accounts receivable

Due to related parties

Prepaids and other assets

Accounts payable

2 unchanged sentences

Cash Flows from Investing Activities:

Capital expenditures, including exploration expense

Capital expenditures

Proceeds from sale of properties and equipment

2 unchanged sentences

Purchase of stock for treasury

Purchase of non-controlling

Proceeds from long-term bank debt and other long-term obligations

Repayment of long-term bank debt and other long-term obligations

Net Cash (Used in) Provided by Financing Activities

Net Cash (Used in) Financing Activities

Net Increase in Cash and Cash Equivalents

7 unchanged sentences

C ONSOLIDATED

June 30, 2021

September 30, 2021

(1) Basis of Presentation:

2 unchanged sentences

for the year ended December 31, 2020.

In the opinion of management, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020, the condensed consolidated results of operations, cash flows and equity for the six months ended June 30, 2021 and 2020.

As of June 30, 2021, PrimeEnergy’s significant accounting policies are consistent with those discussed in Note 1—Description of Operations and Significant Accounting Policies of its consolidated financial statements contained in PrimeEnergy’s Annual Report on Form 10-K

In the opinion of management, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, the condensed consolidated results of operations, cash flows and equity for the nine months ended September 30, 2021 and 2020.

As of September 30, 2021, PrimeEnergy’s significant accounting policies are consistent with those discussed in Note 1—Description of Operations and Significant Accounting Policies of its consolidated financial statements contained in PrimeEnergy’s Annual Report on Form 10-K

for the fiscal year ended December 31, 2020.

4 unchanged sentences

Historically the Company has repurchased the interests of the partners and trust unit holders in the oil and gas limited partnerships (the “Partnerships”) and the asset and business income trusts (the “Trusts”) managed by the Company as general partner and as managing trustee, respectively.

The Company had no

such repurchases during the six months ending June 30, 2021 and 2020.

The Company repurchased $ 6,000 of such

non-controlling

interests during the nine months ended September 30, 2021.

(3) Additional Balance Sheet Information:

13 unchanged sentences

(4) Property and Equipment:

Property and equipment at June 30, 2021 and December 31, 2020 consisted of the following:

Property and equipment at September 30, 2021 and December 31, 2020 consisted of the following:

(Thousands of dollars)

17 unchanged sentences

The Company’s borrowings under this credit facility approximates fair value because the interest rates are variable and reflective of market rates.

On June 30, 2021, the Company had a total of $ 32 million of borrowings outstanding under its revolving credit facility at a weighted-average interest rate of 5.22 % and $ 8 million was available for future borrowings.

The combined weighted average interest rate paid on outstanding bank borrowings subject to base rate and LIBO interest was 5.31 % for the six months ended June 30, 2021 as compared to 4.22 % for six months ended June 30, 2020.

30, 2021, the Company had a total of $ 31.5 million of borrowings outstanding under its revolving credit facility at a weighted-average interest rate of 5.35 % and $

8.5 million was available for future borrowings.

The combined weighted average interest rate paid on outstanding bank borrowings subject to base rate and LIBO interest was 5.31 % for the

months ended September

30, 2021 as compared to 3.94 % for nine

months ended September

Paycheck Protection Program Loans

8 unchanged sentences

In the event the PPP Loan or any portion thereof is forgiven, the amount forgiven is applied to the outstanding principal.

To the extent, if any, that any or all of the PPP loans are not forgiven, beginning one month following expiration of the Deferral Period, and continuing monthly until 24 months from the date of each applicable Note (the “Maturity Date”), the Company is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Note, in such equal amounts required to fully amortize the principal amount outstanding on such Note as of the last day of the applicable Deferral Period by the applicable Maturity Date.

To the extent, if any, that any or all of the PPP loans are not forgiven, beginning one month following expi

ration of the Deferral Period, and continuing monthly until 24 months from the date of each applicable Note (the “Maturity Date”), the Company is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Note, in such equal amounts required to fully amortize the principal amount outstanding on such Note as of the last day of the applicable Deferral Period by the applicable Maturity Date.

The Company accounts for these loans on the balance sheet as financial liabilities reported within the following lines:

Current portion of long-term debt in the amount of $ 1.07 million and included as part of the long-term bank debt in the amount of $ 682 thousand.

Current portion of long-term debt in the amount of $ 1.

37 million and included as part of the long-term bank debt in the amount of $ 323 thousand.

(6) Other Long-Term Obligations and Commitments:

2 unchanged sentences

Leases assets and liabilities are initially recorded at commencement date based on the present value of lease payments over the lease term.

As most of the Company’s lease contracts do not provide an implicit discount rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

A new finance lease for office equipment is included in property and equipment, other current liabilities and other long-term liabilities this quarter.

most of the Company’s lease contracts do not provide an implicit discount rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The weighted average discount rate used was 5.5 %.

4 unchanged sentences

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Operating lease costs for the six months ended June 30, 2021 were $ 287 thousand.

Cash payments included in the operating lease cost for six months ended June 31, 2021 were $ 300 thousand.

The weighted-average remaining operating lease terms is 14.5 months.

The amortization and interest expense for the financing lease amounted to $ 2,302 and the cash payment for the lease was $ 2,552 and the lease term expired in April 2021 .

Operating lease costs for the nine months ended September 30, 2021 were

Cash payments included in the operating lease cost for nine months ended September 30, 2021 were

The weighted-average remaining operating lease terms is

The Company amended certain leases for office space in Texas providing for payments of $ 299,000 in 2021, $ 158,000 in 2022 and $ 17,000 in 2023.

Rent expense for office space for the six months ended June 30, 2021 and 2020 was $ 328,000 and $ 331,000 , respectively.

The payment schedule for the Company’s operating lease obligations as of June 30, 2021 is as follows:

Rent expense for office space for the nine months ended September 30, 2021 and 2020 was $ 441,000 and $ 496,000 , respectively.

The payment schedule for the Company’s operating lease obligations as of September 30, 2021 is as follows:

(Thousands of dollars)

3 unchanged sentences

Asset Retirement Obligation:

A reconciliation of the liability for plugging and abandonment costs for the six months ended June 30, 2021 is as follows:

A reconciliation of the liability for plugging and abandonment costs for the nine

months ended September 30, 2021

is as follows:

(Thousands of dollars)

3 unchanged sentences

Accretion expense

Asset retirement obligation at June 30, 2021

Asset retirement obligation at September

(7) Contingent Liabilities:

9 unchanged sentences

stock options were granted by the Company to four key executive officers for the purchase of shares of common stock.

At June 30, 2021 and 2020, remaining options held by two key executive officers on 767,500 shares were outstanding and exercisable at prices ranging from $ 1.00 to $ 1.25 .

At September 30, 2021 and 2020, remaining options held by two key executive officers on 767,500 shares were outstanding and exercisable at prices ranging from $ 1.00 to $ 1.25 .

According to their terms, the options have no expiration date.

1 unchanged sentence

The Company, as managing general partner or managing trustee, makes an annual offer to repurchase the interests of the partners and trust unit holders in certain of the Partnerships or Trusts.

The Company had no such repurchases during the six months ended June 30, 2021 and 2020.

The Company repurchased $ 6,000 of such

non-controlling

interests during the nine months ending September 30, 2021.

Payables owed to related parties primarily represent receipts collected by the Company as agent for the joint venture partners, which may include members of the Company’s Board of Directors, for oil and gas sales net of expenses.

4 unchanged sentences

The fair values of the Company’s interest rate swaps, natural gas and crude oil price collars and swaps are designated as Level 3.

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2021 and December 31, 2020:

June 30, 2021

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020:

September 30, 2021

Quoted Prices in

4 unchanged sentences

Inputs (Level 3)

September 30,

(Thousands of dollars)

19 unchanged sentences

Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided.

The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the quarter ended June 30, 2021.

The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the quarter ended September 30, 2021.

(Thousands of dollars)

3 unchanged sentences

Purchases, sales, issuances and settlements

Net Liabilities — June 30, 2021

Net Liabilities — September 30, 2021

Derivative instruments are reported in revenues as realized gain/loss and on a separately reported line item captioned unrealized gain/loss on derivative instruments.

4 unchanged sentences

Both realized and unrealized gains and losses associated with commodity derivative instruments are recognized in earnings.

The following table sets forth the effect of derivative instruments on the consolidated balance sheets at June 30, 2021 and December 31, 2020:

The following table sets forth the effect of derivative instruments on the consolidated balance sheets at September 30, 2021 and December 31, 2020:

(Thousands of dollars)

15 unchanged sentences

Total derivative instruments

The following table sets forth the effect of derivative instruments on the consolidated statements of operations for the six months ended June 30, 2021 and 2020:

Location of gain/loss recognized in income

The following table sets forth the effect of derivative instruments on the consolidated statements of operations for the nine months ended September 30, 2021 and 2020:

Amount of gain/loss

1 unchanged sentence

(Thousands of dollars)

Location of gain/loss recognized in income

Derivatives not designated as cash-flow hedge instruments:

Natural gas commodity contracts

Unrealized gain (loss) on derivative instruments, net

Crude oil commodity contracts

Unrealized (loss) gain on derivative instruments, net

Natural gas commodity contracts

6 unchanged sentences

The following reconciles amounts reported in the financial statements:

Six Months Ended June 30,

Nine Months Ended September 30,

Effect of dilutive securities:

Three Months Ended June 30,

Three Months Ended September 30,

Effect of dilutive securities:

The effect of the 767,500 outstanding stock option is anti-dilutive for the six and three months ended June 30, 2021 and 2020, due to net loss for the period.

The effect of the 767,500 outstanding stock options is antidilutive for the nine and three months ended September 30, 2021 due to net loss for these periods.

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

What changed 10-Q

Item 1. Financial Statements