PROP filing — read by section

Item 1A. Risk Factors

Item
1A. Risk Factors 

 Investing
in our securities involves risks. Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed
above under “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the specific risks
set forth herein and the risks set forth in other filings we make with the SEC from time to time, together with other information in
this Annual Report. If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results
of operations. As a result, the market price of our securities could decline, and you could lose all or part of your investment. Additionally,
the risks and uncertainties described in this Annual Report are not the only risks and uncertainties that we face. Additional risks and
uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business. 

 Risks
Related to E&P Assets 

 The
Genesis Assets currently have no producing properties and there is no assurance that we will be able to successfully drill producing
wells. If the Genesis Assets are not commercially productive of crude oil or natural gas, any funds spent on exploration and production
may be lost. 

 All
of the Genesis Assets are in the pre-production stage and there is no assurance that we will be able to obtain the requisite permits
to begin drilling or successfully drill producing wells. The Genesis Assets are not currently connected to the electrical grid or transportation,
nor have we engaged service providers or contractors, necessary for the productive development of the assets and there is no assurance
that we will be able to obtain the electrification, transportation or services necessary at economic costs, if at all. We are dependent
on establishing sufficient reserves at the Genesis Assets for additional cash flow and a return of our investment. If the Genesis Assets
are not economic, all of the funds that we have invested, or will invest, will be lost. In addition, the failure of the Genesis Assets
to produce commercially may make it more difficult for us to raise additional funds in the form of additional sale of our equity securities
or working interests in other property in which we may acquire an interest. 

 The
Central Weld Assets currently have both producing and undeveloped properties and there is no assurance that we will be able to further
develop and exploit the producing properties or successfully drill producing wells after closing the NRO Acquisition. If we are unable
to further develop and exploit the producing properties or drill producing wells, any funds spent on the NRO Acquisition or in the exploration,
development and production of the Central Weld Assets may be lost. 

 Certain
of the Central Weld Assets are producing, permitted properties and certain of the Central Weld Assets are undeveloped. Even if we are
able to successfully close the NRO Acquisition, there is no assurance that we will be able to further develop and exploit the producing
properties or successfully drill producing wells of the undeveloped properties, and we will be dependent on further developing, exploiting
and establishing sufficient reserves at the Central Weld Assets for additional cash flow and a return of our investment. If we are unable
to further develop or exploit the Central Weld Assets or if the Central Weld Assets are not economic, all of the funds that we have invested,
or will invest, will be lost. In addition, the failure of the Central Weld Assets to further produce commercially may make it more difficult
for us to raise additional funds in the form of additional sale of our equity securities or working interests in other property in which
we may acquire an interest. 

 24 

 The development of our estimated PUDs and estimated
possible undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate. Therefore,
our estimated PUDs and estimated possible undeveloped reserves may not ultimately be developed or produced. 

 All of the reserves attributable
to the Genesis Assets are undeveloped and all reserves associated therewith, other than in respect of the Genesis Bolt-on Assets that
were acquired in February 2024, are classified as possible reserves. Development of proved undeveloped reserves and possible undeveloped
reserves may take longer and require higher levels of capital expenditures than we currently anticipate. Delays in the development of
our reserves and those that we may ultimately acquire in the NRO Acquisition, increases in costs to drill and develop such reserves, or
decreases in commodity prices will reduce the value of our estimated PUDs, possible undeveloped reserves and future net revenues estimated
for such reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could require
us to reclassify our PUDs as unproved reserves.

 The
Company has no history of drilling producing oil and gas wells and there can be no assurance that we will successfully establish oil
and gas operations or profitably produce oil, natural gas or NGLs. 

 The
Company has not successfully drilled a producing oil and gas well nor successfully produced hydrocarbons, and we have no ongoing drilling
operations or revenues from drilling operations. Oil and gas exploration and production has a high degree of risk. The future development
of a significant portion of our properties will require obtaining permits and financing. As a result, we are subject to all of the risks
associated with establishing new drilling operations and business enterprises, including, among others: 

 ● 
 the
 need to obtain necessary environmental and other governmental approvals and permits, the timing and conditions of those approvals
 and permits, and litigation concerning those approvals and permits; 

 ● 
 the
 availability and cost of funds to finance the drilling and development of our properties; 

 ● 
 the
 timing and cost, which can be considerable, of the supporting infrastructure to our oil and gas drilling operations; 

 ● 
 the
 ability to obtain midstream offtake capacity for our future oil and gas production; 

 ● 
 drainage
 resulting from the development of offsetting properties from other operators in the area; 

 ● 
 commodity
 prices and our ability to find suitable customers for our future production; 

 ● 
 inflation
 and potential increases in costs of labor, power, supplies, services and other support; and 

 ● 
 the
 availability of skilled labor and equipment to support our drilling operations. 

 There
is no assurance that our drilling activities will result in the successful production of oil, natural gas or NGLs. Moreover, there is
no assurance that even if we are able to successfully produce oil, natural gas or NGLs that such production would be economical for commercial
production. Oil and gas production is dependent upon a number of factors and significantly influenced by the technical skill of our operations
personnel involved. The commercial viability of our possible future production is also dependent upon a number of factors which are beyond
our control, including the quality of our oil, natural gas and NGLs, commodity prices, government policies and regulation, and environmental
protection requirements. There is no certainty that the expenditures that have been made and may be made in the future by the Company
related to the acquisition and development of our properties will result in commercially viable production and the Company’s past
and future expenditures may be partially or entirely lost. 

 Since
we have no operating history related to the exploration and production of oil and gas assets, investors have no basis to evaluate our
ability to operate profitably as an E&P business. 

 We
have not generated any revenue in the exploration and production of oil and gas assets to date which, following the Crypto Sale, is our
sole business segment. We face many of the risks commonly encountered by other new businesses, including the lack of an established operating
history, need for additional capital and personnel, and competition. There is no assurance that our business will be successful or that
we can ever operate profitably. We may not be able to effectively manage the demands required of a new business, such that we may be
unable to implement our business plan or achieve profitability. 

 25 

 Oil,
natural gas and NGLs prices are highly volatile. An extended decline in commodity prices may adversely affect our business, financial
condition or results of operations and our ability to meet our capital expenditure obligations and financial commitments. 

 Following
the acquisition and development of our existing and future E&P assets, our revenues, profitability and cash flows will depend upon the prices for oil,
natural gas and NGLs. The prices we may receive for oil, natural gas and NGLs production are volatile and a decrease in prices can materially
and adversely affect our financial results and impede our growth, including our ability to maintain or increase our borrowing capacity,
to repay current or future indebtedness and to obtain additional capital on attractive terms. Changes in oil, natural gas and NGLs prices
have a significant impact on the amount of oil, natural gas and NGLs that we can produce economically, the value of our reserves and
on our cash flows. Historically, world-wide oil, natural gas and NGLs prices and markets have been subject to significant change and
may continue to change in the future. During the year ended December 31, 2023, the average West Texas Intermediate (“WTI”)
spot price was $77.58, as compared to an average price of $94.90 for the year ended December 31, 2022 and $68.16 for the year ended December
31, 2021. The average Henry Hub natural gas spot price during the year ended December 31, 2023, was $2.54 as compared to an average of
$6.42 for the year ended December 31, 2022 and $3.60 for the year ended December 31, 2021. 

 Prices
for oil, natural gas and NGLs may fluctuate widely in response to relatively minor changes in supply and demand, market uncertainty and
a variety of additional factors that are beyond our control, such as: 

 ● 
 the
 domestic and foreign supply of and demand for oil, natural gas and NGLs; 
 
 ● 
 the
 price and quantity of foreign imports of oil, natural gas and NGLs; 
 
 ● 
 the
 ability of and actions taken by the Organization of the Petroleum Exporting Countries (“OPEC”) and Russia (together with
 OPEC and other allied producing countries, “OPEC+”) and other oil-producing nations in connection with their arrangements
 to maintain oil prices and production controls; 
 
 ● 
 political
 and economic conditions and events in foreign oil and natural gas producing countries, including embargoes, continued hostilities
 in the Middle East and other sustained military campaigns, the armed conflict in Ukraine and associated economic sanctions on Russia,
 conditions in South America, Central America, China and Russia, and acts of terrorism or sabotage; 
 
 ● 
 the
 proximity of our production to and capacity of oil, natural gas and NGLs pipelines and other transportation and storage facilities; 
 
 ● 
 the
 level of consumer product demand; 
 
 ● 
 the
 value of the dollar relative to the currencies of other countries; 
 
 ● 
 the
 impact of energy consumption, supply, and conservation policies and activities by governmental authorities, international agreements,
 and non-governmental organizations to limit, restrict, suspend or prohibit the performance or financing of oil, natural gas and NGLs
 exploration, production, development or marketing activities; 
 
 ● 
 U.S.
 and non-U.S. governmental regulations, including environmental initiatives and taxation; 
 
 ● 
 overall
 domestic and global economic conditions; 
 
 ● 
 the
 impact on worldwide economic activity of an epidemic, outbreak or other public health events; 
 
 26 

 ● 
 the
 price and availability of alternative fuels; 
 
 ● 
 technological
 advances affecting energy consumption, energy conservation and energy supply; 
 
 ● 
 stockholder
 activism or activities by non-governmental organizations to restrict the exploration, development and production of oil, natural
 gas and NGLs to minimize emissions of carbon dioxide, a greenhouse gas; and 
 
 ● 
 weather
 conditions. 
 
 Our
plan to develop and operate our existing and future E&P assets will require substantial additional capital, which we may be unable to raise on acceptable
terms or at all in the future. 

 While
we currently expect to develop and operate our existing and future E&P assets utilizing cash flow from operations, we may be unable to do so. Obtaining
permits and approvals, seismic data, as well as exploration, development and production activities entail considerable costs, and, to
the extent we are unable to fund such costs utilizing cash flow from operations, we may need to raise substantial additional capital,
through future private or public equity offerings, strategic alliances or other alternative arrangements. 

 Our
future capital requirements will depend on many factors, including: 

 ● 
 the
 scope, rate of progress and cost of our exploration, appraisal, development and production activities; 
 
 ● 
 oil
 and natural gas prices; 
 
 ● 
 our
 ability to obtain the requisite permits and approvals to begin drilling, and potential litigation related to obtaining such permits
 and approvals; 
 
 ● 
 our
 ability to locate and acquire hydrocarbon reserves; 
 
 ● 
 our
 ability to produce oil or natural gas from those reserves; 
 
 ● 
 the
 terms and timing of any drilling and other production-related arrangements that we may enter into; 
 
 ● 
 the
 cost and timing of governmental approvals and/or concessions; and 
 
 ● 
 the
 effects of competition by larger companies operating in the oil and gas industry. 
 
 If
we raise additional capital through equity financing, the ownership percentage of our existing stockholders would be diluted, and new
investors may demand rights, preferences or privileges senior to those of existing stockholders. While we do not intend to finance our
operations by relying on debt financing, if we were to raise additional capital through debt financing, the financing may involve covenants
that restrict our business activities. If we are not successful in raising additional capital, we may be unable to continue our future
exploration, development and production activities. 

 We
intend to enter into hedging arrangements as we grow our production and therefore we will be exposed to fluctuations in the price of
oil, natural gas and NGLs and will be affected by continuing and prolonged declines in such prices. Any future hedging activities we
may engage in may result in financial losses or could reduce our income. 

 Oil,
natural gas, and NGL prices are volatile. We intend, in the future, to hedge a significant portion of oil and natural gas production
to reduce our exposure to adverse fluctuations in these prices. We are currently not hedged and therefore are exposed to price volatility
once we have oil, natural gas and NGL production and may be subject to significant reduction in prices, which would have a material negative
impact on our results of operations. In the future, we intend to enter into derivative arrangements for a portion of our oil, natural
gas, and NGL production, including swaps, collars and other instruments. Derivative arrangements would expose us to the risk of financial
loss in some circumstances, including when: (i) production is less than the volume covered by the derivative instruments; (ii) the counterparty
to the derivative instrument defaults on its contract obligations; or (iii) there is an increase in the differential between the underlying
price in the derivative instrument and actual prices received. These types of derivative arrangements may limit the benefit we would
receive from increases in the prices for oil and natural gas and may expose us to cash margin requirements. If oil, natural gas and NGL
prices upon settlement of derivative swap contracts exceed the price at which commodities have been hedged, we will be obligated to make
cash payments to counterparties, which could, in certain circumstances, be significant. 

 27 

 Drilling
for and producing oil and gas wells is a high-risk activity with many uncertainties that could adversely affect our business, financial
condition or results of operations. 

 Drilling
oil and gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially productive
oil, natural gas and NGLs reserves (including “dry holes”). We must incur significant expenditures to drill and complete
wells, the costs of which are often uncertain. It is possible that we will make substantial expenditures on drilling and not discover
reserves in commercially viable quantities. Specifically, we often are uncertain as to the future cost or timing of drilling, completing
and operating wells, and our drilling operations and those of our third-party operators may be curtailed, delayed or canceled. The cost
of our drilling, completing and operating wells may increase and our results of operations and cash flows from such operations may be
impacted, as a result of a variety of factors, including: 

 ● 
 unexpected
 drilling conditions; 

 ● 
 title
 problems; 

 ● 
 pressure
 or irregularities in formations; 

 ● 
 worker
 protection and workplace safety, including equipment failures or accidents; 

 ● 
 adverse
 weather conditions, such as winter storms and flooding, and changes in weather patterns including due to climate change; 

 ● 
 compliance
 with, or changes in, environmental laws and regulations relating to climate change, air emissions, hydraulic fracturing and disposal
 of produced water, drilling fluids and other wastes, laws and regulations imposing conditions and restrictions on drilling and completion
 operations, including as related to induced seismicity, and other laws and regulations, such as tax laws and regulations; 

 ● 
 the
 availability and timely issuance of required governmental permits, approvals and licenses, or litigation concerning such permits,
 approvals and licenses; 

 ● 
 the
 availability of, costs associated with and terms of contractual arrangements for properties, including mineral licenses and leases,
 pipelines, rail cars, crude oil hauling trucks and qualified drivers and related services, facilities and equipment to gather, process,
 compress, store, transport and market crude oil, natural gas and related commodities; 

 ● 
 compliance
 with environmental and other regulatory requirements; and 

 ● 
 environmental
 hazards, such as natural gas leaks, oil and produced water spills, pipeline or tank ruptures, encountering naturally occurring radioactive
 materials, and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the
 air, surface and subsurface environment. 

 A
failure to recover our investment in any E&P assets, increases in the costs of our drilling operations or those of third-party operators,
and/or curtailments, delays or cancellations of our drilling operations or those of our third-party operators in each case due to any
of the above factors or other factors, may materially and adversely affect our business, financial condition and results of operations. 

 28 

 We
intend to pursue the development of our properties in the DJ Basin through horizontal drilling and completion. Horizontal development
operations can be more operationally challenging and costly relative to vertical drilling operations. 

 Horizontal
drilling is generally more complex and more expensive on a per well basis than vertical drilling. As a result, there is greater risk
associated with a horizontal well program. Risks associated with our horizontal drilling program include, but are not limited to, the
following, any of which could materially and adversely impact the success of our horizontal drilling program and, thus, our cash flows
and results of operations: 

 ● 
 successfully
 drilling and maintaining the wellbore to planned total depth; 

 ● 
 landing
 our wellbore in the desired hydrocarbon reservoir; 

 ● 
 effectively
 controlling the level of pressure flowing from particular wells; 

 ● 
 staying
 in the desired hydrocarbon reservoir while drilling horizontally through the formation; 

 ● 
 running
 our casing through the entire length of the wellbore; 

 ● 
 running
 tools and equipment consistently through the horizontal wellbore; 

 ● 
 successful
 design and execution of the fracture stimulation process; 

 ● 
 preventing
 downhole communications with other wells, or, in the alternative, disruption from non-simultaneous operations; 

 ● 
 successfully
 cleaning out the wellbore after completion of the final fracture stimulation stage; and 

 ● 
 designing
 and maintaining efficient forms of artificial lift throughout the life of the well. 

 Ultimately,
the success of these drilling and completion techniques can only be evaluated over time as more wells are drilled and production profiles
are established over a sufficiently long time period. If our drilling results are less than anticipated or we are unable to execute our
drilling program because of capital constraints, lease expirations, access to gathering systems, limited takeaway capacity, or depressed
natural gas and oil prices, the return on our investment in these areas may not be as attractive as anticipated. Further, as a result
of any of these developments, we could incur material impairments of our oil and gas properties and the value of our undeveloped acreage
could decline in the future. 

 Multi-well
pad drilling and project development may result in volatility in our operating results. 

 We
intend to utilize, and NRO has historically utilized, multi-well pad drilling and project development where practical. Project development
may involve more than one multi-well pad being drilled and completed at one time in a relatively confined area. Wells drilled on a pad
or in a project may not be brought into production until all wells on the pad or project are drilled and completed. Problems affecting
one pad or a single well could adversely affect production from all of the wells on the pad or in the entire project. As a result, multi-well
pad drilling and project development can cause delays in the scheduled commencement of production, or interruptions in ongoing production.
These delays or interruptions may cause declines or volatility in our operating results due to timing as well as declines in oil and
natural gas prices. Further, any delay, reduction or curtailment of our development and producing operations, due to operational delays
caused by multi-well pad drilling or project development, or otherwise, could result in the loss of acreage through lease expirations. 

 Additionally,
infrastructure expansion, including more complex facilities and takeaway capacity, could become challenging in project development areas.
Managing capital expenditures for infrastructure expansion could cause economic constraints when considering design capacity. 

 29 

 Drilling
locations that we decide to drill may not yield oil or natural gas in commercially viable quantities. 

 Our
potential drilling locations are in various stages of evaluation, ranging from a location that is ready to drill to a location that will
require substantial additional evaluation. There is no way to predict in advance of drilling and testing whether any particular location
will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable. Prior to
drilling, the use of 2-D and 3-D seismic technologies, various other technologies, and the study of producing fields in the same area
will still not enable us to know conclusively whether oil or natural gas will be present or, if present, whether oil or natural gas will
be present in sufficient quantities to be economically viable. In addition, the use of 2-D or 3-D seismic data and other technologies
requires greater pre-drilling expenditures than traditional drilling strategies, and we could incur greater drilling and testing expenses
as a result of such expenditures which may result in reduction in our returns or increase our losses. Even if sufficient amounts of oil
or natural gas exist, we may damage the potentially productive hydrocarbon bearing formation or experience mechanical difficulties while
drilling or completing the well, resulting in a reduction in production from the well or abandonment of the well. If we drill any dry
holes in our current or future drilling locations, our profitability and the value of our properties will likely be reduced. We cannot
assure you that the analogies we draw from available data from other wells, more fully explored locations, or producing fields will be
applicable to our drilling locations. Further initial production rates reported by us or other operators may not be indicative of future
or long-term production rates. In sum, the cost of drilling, completing, and operating any well is often uncertain, and new wells may
not be productive. 

 Certain
of the undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established
on units containing the acreage. 

 The
terms of our oil and gas leases often stipulate that the lease will terminate if not held by production, rentals, or otherwise some
form of an extension payment to extend the term of the lease. If production in paying quantities is not established on units
containing leases during the next year, then approximately 6,598 net acres of our Initial Genesis Assets will expire in 2024,
approximately 2,567 net acres of our Initial Genesis Assets will expire in 2025 and approximately 14,320 net acres of our Genesis
Assets will expire in 2026 and thereafter. While some expiring leases may contain predetermined extension payments, other expiring
leases will require us to negotiate new leases at the time of lease expiration. Further, existing leases which are currently held by
production may unexpectedly encounter operational, political, regulatory, or litigation challenges which could result in their
termination. It is possible that market conditions at the time of negotiation could require us to agree to new leases on less
favorable terms to us than the terms of the expired leases or cause us to lose the leases entirely. If our leases expire, we will
lose our right to develop the related properties. 

 Our
future results of operations are highly dependent on our ability to find, develop or acquire additional reserves. 

 Producing
oil and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics
and other factors. Unless we conduct successful ongoing exploration and development activities or continually acquire properties containing
proved reserves, our proved reserves will decline as those reserves are produced. Our future reserves and production, and therefore our
future cash flow and results of operations, are highly dependent on our success in efficiently developing our current reserves and economically
finding or acquiring additional recoverable 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 our current and future production, the value of our reserves
will decrease, and our business, financial condition, and results of operations would be materially and adversely affected. 

 Our
estimated oil, natural gas and NGLs reserves are based on many assumptions that may prove to be inaccurate. Any material inaccuracies
in the reserve estimates or the underlying assumptions will materially affect the quantities and present value of our reserves. 

 Numerous
uncertainties are inherent in estimating quantities of oil, natural gas and NGLs reserves. The process of estimating oil, natural
gas and NGLs reserves is complex, requiring significant decisions and assumptions in the evaluation of available geological,
engineering and economic data for each reservoir, including assumptions regarding future oil, natural gas and NGLs prices,
subsurface characterization, production levels and operating and development costs. Our estimates of possible reserves for the
Initial Genesis Assets as of December 31, 2023 were prepared by CG&A. CG&A conducted a detailed review of the Initial
Genesis Assets for the period covered by its reserve report using information provided by us. 

 30 

 Over
time, we may make material changes to reserve estimates taking into account the results of actual drilling, testing and production. As
a result of the uncertainties, estimated quantities of oil, natural gas and NGLs reserves and projections of future production rates
and the timing of development expenditures may prove to be inaccurate.
Any significant variance in our assumptions and actual results could greatly affect our estimates of reserves, the economically recoverable
quantities of oil, natural gas and NGLs attributable to any particular group of properties, the classifications of reserves based on
risk of non-recovery and estimates of future net cash flows. As of December 31, 2023 all of our reported reserves and associated future cash
flows are deemed possible. Estimates of possible reserves, and the future cash flows related to such estimates, are also inherently imprecise
and are more uncertain than estimates of proved and probable reserves, respectively, and the respective future cash flows related to
such estimates, but have not been adjusted for risk due to that uncertainty. Because of such uncertainty, estimates of possible reserves,
and the future cash flows related to such estimates, may not be comparable to estimates of proved and probable reserves, respectively,
and the respective future cash flows related to such estimates, and should not be summed arithmetically with estimates of either proved
or probable reserves, respectively, and the respective future cash flows related to such estimates. 

 When
producing an estimate of the amount of oil, natural gas and NGLs that is recoverable from a particular reservoir, an estimated quantity
of possible reserves is an estimate that might be achieved, but only under more favorable circumstances than are likely. Estimates of
possible reserves are also continually subject to revisions based on production history, results of additional exploration and development,
price changes and other factors. When deterministic methods are used, the total quantities ultimately recovered from a project have a
low probability of exceeding proved plus probable plus possible reserves. Possible reserves may be assigned to areas of a reservoir adjacent
to probable reserve where data control and interpretations of available data are progressively less certain. Frequently, this will be
in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from
the reservoir. Possible reserves also include incremental quantities associated with a greater percentage of recovery of the hydrocarbons
in place than the recovery quantities assumed for probable reserves. Possible reserves may be assigned where geoscience and engineering
data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults
with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore,
and we believe that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned
to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir. 

 31 

 To
market our oil and natural gas production, we are dependent upon obtaining access to midstream infrastructure, including truck transportation,
pipelines, transmission and/or storage and processing facilities. If we are unable to obtain such access on commercially reasonable terms
or at all, we would be unable to market and sell our production and our business and financial position would be materially and adversely
affected. 

 The
marketing of oil and natural gas production depends in large part on the availability, proximity and capacity of pipelines and storage
facilities, gathering systems and other transportation, processing, fractionation, refining and export facilities, as well as the existence
of adequate markets. Transportation space on the gathering systems and pipelines we utilize is occasionally limited or unavailable due
to repairs or improvements to facilities or due to space being utilized by other companies that have priority transportation agreements.
Additionally, new fields may require the construction of gathering systems and other transportation facilities. These facilities may
require us to spend significant capital that would otherwise be spent on drilling. We rely, and expect to rely in the future, on facilities
developed and owned by third parties in order to store, process, transmit and sell our production. Our plans to develop and sell our
reserves could be materially and adversely affected by the inability or unwillingness of third parties to provide sufficient facilities
and services to us on commercially reasonable terms or otherwise. If these facilities are unavailable to us on commercially reasonable
terms or otherwise, we could be forced to shut in some production or delay or discontinue drilling plans and commercial production following
a discovery of hydrocarbons. The availability of markets is beyond our control. If market factors dramatically change, the impact on
our revenues could be substantial and could materially and adversely affect our ability to produce and market oil and natural gas. 

 Our
access to transportation options can also be affected by U.S. federal and state regulation of oil and natural gas production and transportation,
general economic conditions and changes in supply and demand. The interstate transportation and sale for resale of natural gas are subject
to federal regulation, including regulation of the terms, conditions and rates for interstate transportation, storage and various other
matters, primarily by FERC. Federal and state regulations govern the price and terms for access to natural gas pipeline transportation.
FERC’s regulations for interstate natural gas transmission in some circumstances may also affect the intrastate transportation
of natural gas. FERC regulates the rates, terms and conditions applicable to the interstate transportation of natural gas by pipelines
under the NGA as well as under Section 311 of the NGPA. Since 1985, FERC has implemented regulations intended to increase competition
within the natural gas industry by making natural gas transportation more accessible to natural gas buyers and sellers on an open-access,
nondiscriminatory basis. 

 Our
sales of oil and NGLs are also affected by the availability, terms and costs of transportation. The rates, terms, and conditions applicable
to the interstate transportation of oil and NGLs by pipelines are regulated by FERC under the Interstate Commerce Act. FERC has implemented
a simplified and generally applicable ratemaking methodology for interstate oil and NGL pipelines to fulfill the requirements of Title
XVIII of the Energy Policy Act of 1992 comprised of an indexing system to establish ceilings on interstate oil and NGL pipeline rates.
Intrastate oil pipeline transportation rates are subject to regulation by state regulatory commissions. The basis for intrastate oil
pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to
state. Insofar as effective interstate and intrastate rates are equally applicable to all comparable shippers, we believe that the regulation
of oil transportation rates will not affect our operations in any materially different way than such regulation will affect the operations
of our competitors. 

 Further,
interstate and intrastate common carrier oil pipelines must provide service on a non-discriminatory basis. Under this open access standard,
common carriers must offer service to all shippers requesting service on the same terms and under the same rates. When oil pipelines
operate at full capacity, access is governed by prorationing provisions set forth in the pipelines’ published tariffs. Accordingly,
we believe that access to oil pipeline transportation services generally will be available to us to the same extent as to our competitors. 

 As
an alternative to pipeline transportation, any transportation of our crude oil and NGLs by rail will also be subject to regulation by
the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) and the Federal Railroad Administration (“FRA”)
of the Department of Transportation under the Hazardous Materials Regulations at 49 CFR Parts 171-180, including Emergency Orders by
the FRA and new regulations being proposed by the PHMSA, arising due to the consequences of train accidents and the increase in the rail
transportation of flammable liquids. 

 We
will face strong competition from other oil and gas companies. 

 We
will encounter competition from other oil and gas companies in all areas of our operations, including the acquisition of exploratory
prospects and proven properties. Our competitors include major integrated oil and gas companies and numerous independent oil and gas
companies, individuals and drilling and income programs. Many of our competitors are large, well-established companies that have been
engaged in the oil and gas business much longer than we have and possess substantially larger operating staffs and greater capital resources
than we do. These companies may be able to pay more for exploratory projects and productive oil and gas properties and may be able to
define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In
addition, these companies may be able to expend greater resources on the existing and changing technologies that we believe are and will
be increasingly important to attaining success in the industry. Such competitors may also be in a better position to secure oilfield
services and equipment on a timely basis or on favorable terms. These companies may also have a greater ability to continue drilling
activities during periods of low oil and gas prices, such as the current commodity price environment, and to absorb the burden of current
and future governmental regulations and taxation. We may not be able to conduct our operations, evaluate and select suitable properties
and consummate transactions successfully in this highly competitive environment. 

 32 

 Government
regulation and liability for oil and natural gas operations may adversely affect our business and results of operations. 

 Our
exploration, production and development activities are subject to extensive federal, state, and local government regulations, which may
change from time to time. Matters subject to regulation include discharge permits for drilling operations, drilling bonds and other financial
assurance, reports concerning operations, the spacing of wells, unitization and pooling of properties, and taxation. From time to time,
regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and natural gas
from wells below actual production capacity in order to conserve supplies of oil and natural gas. These laws and regulations may affect
the costs, manner, and feasibility of our operations by, among other things, requiring us to make significant expenditures in order to
comply and restricting the areas available for oil and gas production. Failure to comply with these laws and regulations may result in
substantial liabilities to third-parties or governmental entities. We are also subject to changing and extensive tax laws, the effects
of which cannot be predicted. The implementation of new, or the modification of existing, laws or regulations, could have a material
adverse effect on us, such as by imposing, penalties, fines and/or fees, taxes and tariffs on carbon that could have the effect of raising
prices to the end user and thereby reducing the demand for our products. 

 All
of our E&P assets are located in the DJ Basin, making us vulnerable to risks associated with operating primarily in a single geographic
area. 

 All
of our current E&P assets are located in the DJ Basin in Colorado. Because our assets are not as diversified geographically as many
of our competitors, the success of our operations and our profitability may be disproportionately exposed to the effect of any regional
events, including natural disasters, government regulations and midstream interruptions. For example, bottlenecks in processing and transportation
have occurred in some recent periods in the Wattenberg Field in the DJ Basin and these adverse effects may be disproportionately severe
to us compared to our more geographically diverse competitors. Similarly, the concentration of our assets within a small number of formations
exposes us to risks, such as changes in field-wide rules that could adversely affect development activities or production relating to
those formations. Such an event could have a material adverse effect on our results of operations and financial condition. In addition,
the demand for, and cost of, drilling rigs, equipment, supplies, chemicals, personnel and oilfield services often increase as a result
of numerous factors including increases in exploration and production activity, supply chain problems, and labor shortages. Any shortages
or increased costs could delay or adversely affect our development and exploration operations or cause us to incur significant expenditures
that are not provided for in our capital forecast, which could have a material adverse effect on our business, financial condition or
results of operations. All of the producing properties and reserves included in the Central Weld Assets are located in the DJ Basin.
As a result, the transaction increases the risks we face with respect to the geographic concentration of our properties. 

 In
addition, seasonal weather conditions and natural disasters could severely disrupt normal operations and harm our business. During periods
of heavy snow, ice, wind or rain, we may be unable to move our equipment between locations, thereby reducing our ability to provide services
and generate revenues, or we could suffer weather-related damage to our facilities and equipment, resulting in delays in operations.
Our exploration activities may also be affected during such periods of adverse weather conditions. Additionally, extended drought conditions
in our operating regions could impact our ability or our customers’ ability to source sufficient water or increase the cost for
such water. As a result, a natural disaster or inclement weather conditions could severely disrupt the normal operation of our business
and adversely impact our financial condition and results of operations. 

 Moreover,
climate change may result in various physical risks, such as the increased frequency or intensity of extreme weather events or changes
in meteorological and hydrological patterns, that could adversely impact our operations. Such physical risks may result in damage to
our facilities or otherwise adversely impact our operations, such as if facilities are subject to water use curtailments in response
to drought, or demand for our products, such as to the extent warmer winters reduce the demand for energy for heating purposes, which
may ultimately reduce demand for the products we provide. Such physical risks may also impact our suppliers, which may adversely affect
our ability to provide our products. Extreme weather conditions can interfere with our operations and increase our costs, and damage
resulting from extreme weather may not be fully insured. 

 33 

 Our
operations will be subject to federal, state and local laws and regulations related to environmental and natural resources protection
and occupational health and safety, which may expose us to significant costs and liabilities and result in increased costs and additional
operating restrictions or delays. 

 Our
oil, natural gas and NGLs exploration, production and development operations will be subject to stringent federal, state, local and other
applicable laws and regulations governing worker health and safety, the release or disposal of materials into the environment or otherwise
relating to environmental protection. Numerous governmental entities, including the EPA, the U.S. Occupational Safety and Health Administration,
and analogous state agencies, including the CDPHE and the CECMC, have the power to enforce compliance with these laws and regulations.
These laws and regulations may, among other things, require the acquisition of permits to conduct drilling; govern the amounts and types
of substances that may be released into the environment; limit or prohibit construction or drilling activities in environmentally-sensitive
areas such as wetlands, wilderness areas or areas inhabited by endangered or threatened species; require investigatory and remedial actions
to mitigate pollution conditions; impose obligations to reclaim and abandon well sites and pits; impose seasonal limitations on our ability
to conduct operations due to wildlife migration patterns or other similar concerns; and impose specific criteria addressing worker protection.
Compliance with such laws and regulations may impact our operations and production, require us to install new or modified emission controls
on equipment or processes, incur longer permitting timelines, restrict the areas in which some or all operational activities may be conducted,
and incur significantly increased capital or operating expenditures, which costs may be significant. The regulatory burden on the oil
and gas industry increases the cost of doing business in the industry and consequently affects profitability. 

 Additionally,
certain environmental laws impose strict, joint and several liability for costs required to remediate and restore sites where hydrocarbons,
materials or wastes have been stored or released. Failure to comply with these laws and regulations may also result in the assessment
of sanctions, including administrative, civil and criminal penalties, the imposition of investigatory, remedial and corrective action
obligations or the incurrence of capital expenditures, the occurrence of restrictions, delays or cancellations in the permitting, development
or expansion of projects and the issuance of orders enjoining some or all of our operations in affected areas. Moreover, accidental spills
or other releases may occur in the course of our operations, and we cannot assure you that we will not incur significant costs and liabilities
as a result of such spills or releases, including any third-party claims for damage to property, natural resources or persons. We may
not be able to fully recover such costs from insurance. One or more of these developments that impact us, our service providers or our
customers could have a material adverse effect on our business, results of operations and financial condition and reduce demand for our
products. 

 Certain
interest groups generally opposed to the development of oil and gas, and hydraulic fracturing in particular, have from time to time advanced
various options for ballot initiatives aimed at significantly limiting or preventing the development of oil and gas. For example, following
the failure of several ballot initiatives to restrict oil and gas development, Colorado passed a law in April 2019 (Senate Bill 19-181)
that, among other things, changes the mission of the CECMC from fostering oil and gas development to instead focus on environmental protection,
directs the CECMC and various state agencies to consider new rules imposing stricter environmental controls on the oil and gas industry,
and provides local governments with the authority to promulgate their own regulations on oil and gas development. Pursuant to this statutory
change, the CECMC has issued new rules relating to the agency’s new mission—formerly “fostering” oil and gas
development, now “regulating” it—including, among other things, increasing oil and gas setbacks to a minimum of 2,000
feet from schools and childcare facilities, prohibiting routine venting and flaring, and increasing wildlife protections. Additional
rules will also address cumulative impacts through a new state regulatory program and will completely revise state permitting procedures.
In May 2023, Colorado passed a law (House Bill 1294) that requires the CECMC to promulgate rules addressing cumulative impacts of oil
and gas operations by April 28, 2024. CECMC is currently assessing draft rules pursuant to this law, which, if finalized as proposed,
would require regulators to consider cumulative impacts of oil and gas operations in permitting decisions and increase scrutiny on the
project’s proximity to other industrial sites, residential areas and school areas, DI communities, and “cumulatively impacted
communities.” The draft rules would also set GHG emissions intensity targets for oil and gas operators and require regulators to
consider such targets in their cumulative impacts analysis, as well as the potential to restrict operations during the summer in Ozone
Nonattainment Areas. While the ultimate impact of the new Colorado laws and related rules is currently unknown, these laws or passage
or enactment of other similar legislation could have a material adverse effect on our operations in Colorado. 

 34 

 The
general trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment.
There can be no assurance as to the amount or timing of future expenditures for environmental compliance or remediation, and actual future
expenditures may be materially different from the amounts we currently anticipate. Revised or additional regulations that result in increased
compliance costs or additional operating restrictions, particularly if those costs are not fully recoverable from our customers, could
have a material adverse effect on our business, financial position, results of operations and prospects. 

 Our
oil and gas exploration, production, and development activities may be subject to a series of risks related to climate change and energy
transition initiatives. 

 The
threat of climate change continues to attract considerable attention in the United States and around the world. Numerous proposals have
been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit
emissions of GHGs. These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG disclosure obligations and
regulations that directly limit GHG emissions from certain sources. President Biden has identified addressing climate change as a priority
under his administration and has issued, and may continue to issue, executive orders related to that goal. For example, in January 2024,
the Biden administration announced a temporary pause on the U.S. Department of Energy’s (“DOE”) review of pending applications
for authorization to export LNG to countries that have not entered into free trade agreements (“FTAs”) with the United States
(so-called non-FTA countries) until the DOE updates its underlying analyses for such authorizations using more current data to account
for considerations like potential energy cost increases for consumers and manufacturers or the latest assessment of the impact of GHG
emissions. While this pause may not directly impact our exploration, production and development activities, it may affect the demand
for our products, which could have a material adverse effect on our business and financial position. 

 Also
at the federal level, the EPA has adopted rules that, among other things, establish construction and operating permit reviews for GHG
emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum
and natural gas system sources, and impose new standards reducing methane emissions from oil and gas operations through limitations on
venting and flaring and the implementation of enhanced emission leak detection and repair requirements. In December 2023 the EPA finalized
more stringent methane rules for new, modified, and reconstructed facilities, known as OOOOb, as well as standards for existing sources
for the first time ever, known as OOOOc. Under the final rules, states have two years to prepare and submit their plans to impose methane
emission controls on existing sources. The presumptive standards established under the final rules are generally the same for both new
and existing sources and include enhanced leak detection survey requirements using optical gas imaging and other advanced monitoring
to encourage the deployment of innovative technologies to detect and reduce methane emissions, reduction of emissions by 95% through
capture and control systems, zero-emission requirements for certain devices, and the establishment of a “super emitter” response
program that would allow third parties to make reports to the EPA of large methane emission events, triggering certain investigation
and repair requirements. Fines and penalties for violations of these rules can be substantial. 

 In addition, the
U.S. Congress may continue to consider and pass legislation related to the reduction of GHG emissions, including methane and carbon
dioxide. For example, the IRA, which appropriates significant federal funding for renewable energy initiatives and, for the first
time ever, imposes a fee on GHG emissions from certain facilities, was signed into law in August 2022. The methane emissions charge
would start in calendar year 2024 at $900 per ton of methane, increase to $1,200 in 2025, and be set at $1,500 for 2026 and each
year after. Calculation of the fee is based on certain thresholds established in the IRA. In January 2024, the EPA issued a proposed
rule to implement the waste emissions charge with a proposed effective date in 2025 for reporting year 2024 emissions. The methane
charge and the incentives for renewable energy infrastructure development could impose additional costs on our operations and
further accelerate the transition of the economy away from the use of oil and natural gas towards lower- or zero-carbon emissions
alternatives. Furthermore, on March 6, 2024, the SEC finalized a rule requiring the reporting of climate-related risks and financial
impacts, as well as GHG emissions for larger companies. Compliance dates under the final rule are phased in by registrant category.
Smaller reporting companies will be required to incorporate climate-related disclosures into their filings beginning in fiscal year
2027. Accelerated filers will be required to incorporate the disclosures in fiscal year 2026, as well as disclosure of Scope 1 and 2
GHG emissions, if material, in fiscal year 2028, and limited assurance attestation reports related to the same by fiscal year 2031.
Large accelerated filers will be required to incorporate the disclosures in fiscal year 2025, with Scope 1 and 2 GHG emissions
disclosures, if material, in fiscal year 2026, and attestation reports by fiscal year 2029. While we are still assessing our
obligations under the rule, complying with such obligations may result in increased costs.

 35 

 States
have also implemented or are considering implementing laws and regulations that would require climate-related disclosures, which could
result in additional costs to comply with disclosure requirements as well as increase costs of and restrictions on access to capital.
Separately, enhanced climate related disclosure requirements could lead to reputational or other harm with customers, regulators, investors
or other stakeholders and could also increase our litigation risks relating to alleged climate-related damages resulting from our operations,
statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future
disclosures we may make regarding reported emissions, particularly given the inherent uncertainties and estimations with respect to calculating
and reporting GHG emissions. From time to time, the SEC has also focused additional scrutiny on existing climate-change related disclosures
in public filings, increasing the potential for enforcement if the SEC were to allege an issuer’s existing climate disclosures
were misleading or deficient. These ongoing regulatory actions and the emissions fee and funding provisions of the IRA could increase
operating costs within the oil and gas industry and accelerate the transition away from fossil fuels, which could in turn adversely affect
our business and results of operations. 

 At
the international level, the United Nations-sponsored Paris Agreement, though non-binding, calls for signatory nations to limit their
GHG emissions through individually-determined reduction goals every five years after 2020. In February 2021, President Biden recommitted
the United States to long-term international goals to reduce emissions, including those under the Paris Agreement. President Biden announced
in April 2021 a new, more rigorous nationally determined emissions reduction level of 50 to 52 percent from 2005 levels in economy-wide
net GHG emissions by 2030. Moreover, the international community convenes annually at the Conference of the Parties to negotiate further
pledges and initiatives, such as the Global Methane Pledge (a collective goal to reduce global methane emissions by 30 percent from 2020
levels by 2030). The impacts of these orders, pledges, agreements and any legislation or regulation promulgated to fulfill the United
States’ commitments under the Paris Agreement or other international agreements cannot be predicted at this time. In December 2023,
at the 28th Conference of the Parties, the parties signed onto an agreement to transition away from fossil fuels in energy systems and
increase renewable energy capacity, though no timeline for doing so was set. While non-binding, the agreements coming out of these conferences
could result in increased pressure among financial institutions and various stakeholders to reduce or otherwise impose more stringent
limitations on funding for, and increase potential opposition to, the exploration and production of fossil fuels. 

 Litigation
risks are also increasing, as a number of states, municipalities, environmental organizations and other plaintiffs have sought to bring
suits against oil and natural gas exploration and production companies in state or federal court, alleging, among other things, that
such energy companies created public nuisances by producing fuels that contributed to global warming effects, such as rising sea levels,
and therefore, are responsible for roadway and infrastructure damages as a result, or alleging that the companies have been aware of
the adverse effects of climate change for some time but defrauded their investors by failing to adequately disclose those impacts. Involvement
in such a case, regardless of the substance of the allegations, could have adverse reputational and financial impacts and an unfavorable
ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition or operations. 

 There
are also increasing financial risks for oil and gas producers as certain shareholders, bondholders and lenders may elect in the future
to shift some or all of their investments into non-fossil fuel energy related sectors. Certain institutional lenders who provide financing
to fossil-fuel energy companies have shifted their investment practices to those that favor “clean” power sources, such as
wind and solar, making those sources more attractive, and some of them may elect not to provide funding for fossil fuel energy companies
in the short or long term. Many of the largest U.S. banks have made “net zero” carbon emission commitments and have announced
that they will be assessing financed emissions across their portfolios and taking steps to quantify and reduce those emissions. Additionally,
there is also the possibility that financial institutions will be pressured or required to adopt policies that limit funding for fossil
fuel energy companies. For example, in 2021 the Glasgow Financial Alliance for Net Zero (“GFANZ”) announced that commitments
from over 450 firms across 45 countries had resulted in over $130 trillion in capital committed to net zero goals. The various sub-alliances
of GFANZ generally require participants to set short-term, sector-specific targets to transition their financing, investing, and/or underwriting
activities to net zero by 2050. Additionally, there is the possibility that financial institutions will be required to adopt policies
that limit funding for fossil fuel energy companies. In late 2020, the Federal Reserve joined the Network for Greening the Financial
System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector. More recently, in November
2021, the Federal Reserve issued a statement in support of the efforts of the Network for Greening the Financial System to identify key
issues and potential solutions for the climate-related challenges most relevant to central banks and supervisory authorities. In September
2022, the Federal Reserve announced that six of the largest U.S. largest banks will participate in a pilot climate scenario analysis
exercise, which took place throughout 2023, to enhance the ability of firms and supervisors to measure and manage climate-related financial
risk. While we cannot predict what policies may result from these developments, such efforts could make it more difficult to secure funding
for exploration and production business activities on favorable terms, or at all. Although there has been recent political support to
counteract these initiatives, these and other developments in the financial sector could lead to some lenders restricting access to capital
for or divesting from certain industries or companies, including the oil and gas sector, or requiring that borrowers take additional
steps to reduce their GHG emissions. Any material reduction in the capital available to us or our fossil fuel-related customers could
make it more difficult to secure funding for exploration, development, production, transportation, and processing activities, which could
reduce the demand for our products and services. 

 36 

 Our
oil and gas exploration, production, and development activities may be subject to physical risks related to potential climate change
impacts. 

 Increasing
concentrations of GHGs in the Earth’s atmosphere may produce climate changes that could have significant physical effects, such
as increased frequency and severity of storms, droughts, wildfires, and floods and other climatic events, as well as chronic shifts in
temperature and precipitation patterns. These climatic developments have the potential to cause physical damage to our assets or those
of our vendors and suppliers and could disrupt our supply chains, and thus could have an adverse effect on our business, financial position,
operations and prospects. 

 Additionally,
changing meteorological conditions, particularly temperature, may result in changes to the amount, timing, or location of demand for
energy or its production. While our operational consideration of changing climatic conditions and inclusion of safety factors in design
is intended to reduce the uncertainties that climate change and other events may potentially introduce, our ability to mitigate the adverse
impacts of these events depends in part on the effectiveness of our facilities and disaster preparedness and response and business continuity
planning, which may not have considered or be prepared for every eventuality. 

 Our
business and ability to secure financing may be adversely impacted by increasing stakeholder and market attention to ESG matters. 

 Businesses
across all industries are facing increasing scrutiny from stakeholders related to their ESG practices. Businesses that are perceived
to be operating in contrast to investor or stakeholder expectations and standards, which are continuing to evolve, or businesses that
are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement
to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such business entity could
be materially and adversely affected. Increasing attention to climate change, societal expectations on companies to address climate change,
investor and societal expectations regarding voluntary ESG-related disclosures, increasing mandatory ESG disclosures, and consumer demand
for alternative forms of energy may result in increased operating and compliance costs, reduced demand for our products, reduced profits,
increased legislative and judicial scrutiny, investigations and litigation, reputational damage, and negative impacts on our access to
capital markets. To the extent that societal pressures or political or other factors are involved, it is possible that we could be subject
to additional governmental investigations, private litigation or activist campaigns as stockholders may attempt to effect changes to
our business or governance practices. 

 While
we may elect to seek out various voluntary ESG targets in the future, such targets are aspirational. We may not be able to meet such
targets in the manner or on such a timeline as initially contemplated, including as a result of unforeseen costs or technical difficulties
associated with achieving such results. Similarly, while we may decide to participate in various voluntary ESG frameworks and certification
programs, such participation may not have the intended results on our ESG profile. In addition, voluntary disclosures regarding ESG matters,
as well as any ESG disclosures currently required or required in the future, could result in private litigation or government investigation
or enforcement action regarding the sufficiency or validity of such disclosures. Moreover, failure or a perception of failure to implement
ESG strategies or achieve ESG goals or commitments, including any GHG emission reduction or carbon intensity goals or commitments, could
result in private litigation and damage our reputation, cause investors or consumers to lose confidence in us, and negatively impact
our operations and goodwill. Notwithstanding our election to pursue aspirational ESG-related targets in the future, we may receive pressure
from investors, lenders or other groups to adopt more aggressive climate or other ESG-related goals, but we cannot guarantee that we
will be able to implement such goals because of potential costs, technical or operational obstacles or other market or technological
developments beyond our control. 

 37 

 Restrictions
and regulations regarding hydraulic fracturing could result in increased costs, delays and cancellations in our planned oil, natural
gas and NGLs exploration, production and development activities. 

 Our
operations will include hydraulic fracturing activities. Hydraulic fracturing is typically regulated by state oil and gas commissions,
but the practice continues to attract considerable public, scientific and governmental attention in certain parts of the country, resulting
in increased scrutiny and regulation, including by federal agencies. Many states have adopted rules that impose new or more stringent
permitting, public disclosure or well construction requirements on hydraulic fracturing activities. For example, Colorado requires the
disclosure of chemicals used in hydraulic fracturing and recently extended setback requirements for drilling activities. Local governments
may also impose, or attempt to impose, restrictions on the time, place, and manner in which hydraulic fracturing activities may occur.
Some state and local authorities have considered or imposed new laws and rules related to hydraulic fracturing, including temporary or
permanent bans, additional permit requirements, operational restrictions, and chemical disclosure obligations on hydraulic fracturing
in certain jurisdictions or in environmentally sensitive areas. The EPA has also asserted federal regulatory authority over certain aspects
of hydraulic fracturing. For example, in December 2023, the EPA issued final rules that update new source performance standard requirements
and that will impose more stringent controls on methane and volatile organic compounds emissions from oil and gas development and production
operations, including hydraulic fracturing and other well completion activity. Additionally, certain federal and state agencies have
evaluated or are evaluating potential impacts of hydraulic fracturing on drinking water sources or seismic events. These ongoing studies
could spur initiatives to further regulate hydraulic fracturing or otherwise make it more difficult and costly to perform hydraulic fracturing
activities. Any new or more stringent federal, state, local or other applicable legal requirements such as presidential executive orders
or state or local ballot initiatives relating to hydraulic fracturing that impose restrictions, delays or cancellations in areas where
we plan to operate could cause us to incur potentially significant added costs to comply with such requirements or experience delays,
curtailment, or preclusion from the pursuit of exploration, development or production activities. 

 Our
planned oil, natural gas and NGLs exploration and production activities could be adversely impacted by restrictions on our ability to
obtain water or dispose of produced water. 

 Our
operations will require water for our planned oil and natural gas exploration during drilling and completion activities. Our access to
water may be limited due to reasons such as prolonged drought, private third party competition for water in localized areas or our inability
to acquire or maintain water sourcing permits or other rights as well as governmental regulations or restrictions adopted in the future.
For example, the Governor of Colorado recently signed into law HB 1242 which places restrictions on the use of fresh water for oil and
gas operations and requires oil and gas operators to report their water use. Any difficulty or restriction on locating or contractually
acquiring sufficient amounts of water in an economical manner could adversely impact our planned operations. 

 Additionally,
we must dispose of the fluids produced during oil and natural gas production, including produced water. We may choose to dispose of produced
water into deep wells by means of injection, either directly ourselves or through third party contractors. While we may seek to reuse
or recycle produced water instead of disposing of such water, our costs for disposing of produced water could increase significantly
as a result of increased regulation or if reusing and recycling water becomes impractical. Disposal wells are regulated pursuant to the
UIC program established under the SDWA and analogous state laws. The UIC program requires permits from the EPA or an analogous state
agency for construction and operation of such disposal wells, establishes minimum standards for disposal well operations, and restricts
the types and quantities of fluids that may be disposed. 

 In
recent years, wells used for the disposal by injection of flowback water or certain other oilfield fluids below ground into non-producing
formations have been associated with an increased number of seismic events, with research suggesting that the link between seismic events
and wastewater disposal may vary by region and local geology. The U.S. geological survey has recently identified Colorado as one of six
states with the most significant hazards from induced seismicity. Concerns by the public and governmental authorities have prompted several
state agencies to require operators to take certain prescriptive actions or limit disposal volumes following unusual seismic activity.
The CECMC requires operators to monitor and evaluate for seismicity risks in certain situations. Other states have from time to time
suspended disposal well permits or otherwise restricted activity in certain areas in response to seismic activity. For example, in both
New Mexico and Texas, state regulatory agencies have implemented seismicity response programs that have resulted in state regulators
suspending or curtailing disposal well injection operations and imposing additional seismic monitoring and reporting requirements on
disposal well operators. Restrictions on produced water disposal well injection activities or suspensions of such activities, whether
due to the occurrence of seismic events or other regulatory actions could increase our costs to dispose of produced water and adversely
impact our results of operations. 

 38 

 Laws
and regulations pertaining to the protection of threatened and endangered species and their habitats could delay, restrict or prohibit
our planned oil, natural gas and NGLs exploration and production operations and adversely affect the development and production of our
reserves. 

 The
ESA and comparable state laws protect endangered and threatened species and their habitats. Under the ESA, the U.S. Fish and Wildlife
Service may designate critical habitat areas that it believes are necessary for survival of species listed as threatened or endangered.
Similar protections are offered to migratory birds under the Migratory Bird Treaty Act of 1918. Such designations could require us to
develop mitigation plans to avoid potential adverse effects to protected species and their habitats, and our oil and gas operations may
be delayed, restricted or prohibited in certain locations or during certain seasons, such as breeding and nesting seasons, when those
operations could have an adverse effect on the species. Moreover, the future listing of previously unprotected species as threatened
or endangered in areas where we are operating in the future could cause us to incur increased costs arising from species protection measures
or could result in delays, restrictions or prohibitions on our planned development and production activities. 

 Certain
U.S. federal income tax deductions currently available with respect to natural gas and oil exploration and development may be eliminated
as a result of future legislation. 

 From
time to time, legislation has been proposed that would, if enacted into law, make significant changes to U.S. tax laws, including certain
key U.S. federal income tax provisions currently available to oil and gas companies. Such legislative changes have included, but have
not been limited to, (i) the repeal of the percentage depletion allowance for natural gas and oil properties, (ii) the elimination of
current deductions for intangible drilling and development costs and (iii) an extension of the amortization period for certain geological
and geophysical expenditures. Although these provisions were largely unchanged with the enactment of the IRA, Congress could consider,
and could include, some or all of these proposals as part of future tax reform legislation. Moreover, other more general features of
any additional tax reform legislation, including changes to cost recovery rules, may be developed that also would change the taxation
of oil and gas companies. It is unclear whether these or similar changes will be enacted in future legislation and, if enacted, how soon
any such changes could take effect. The passage of any legislation as a result of these proposals or any similar changes in U.S. federal
income tax laws could eliminate or postpone certain tax deductions that currently are available with respect to oil and gas development
or increase costs, and any such changes could have an adverse effect on our financial position, results of operations and cash flows. 

 Risks
Related to the NRO Acquisition 

 We
may not consummate the NRO Acquisition on the terms currently contemplated, or at all. 

 We
expect the NRO Acquisition to close in the first half of 2024, but such acquisition is subject to a number of closing conditions. Satisfaction
of some of these conditions is beyond our control. If these conditions are not satisfied or waived, the NRO Acquisition will not be completed.
Certain of the conditions that remain to be satisfied include, but are not limited to: 

 ● 
 the
 accuracy of the representations and warranties of each party (subject to specified materiality standards); 

 ● 
 the
 compliance by each party in all material respects with their respective covenants; and 

 ● 
 that
 no event of Force Majeure or Material Adverse Effect (in each case as defined in the NRO Agreement) shall have occurred, in each
 case the result of which is that we are unable to secure satisfactory financing with respect to the NRO Acquisition. 

 39 

 As
a result, the NRO Acquisition may not close as scheduled, or at all. Failure to complete the NRO Acquisition, including as a result of
failure to raise sufficient funds, or any delays in completing the NRO Acquisition could have significant adverse impacts on our business,
including the following: 

 ● 
 we
 may experience negative reactions from the financial markets, including a negative impact on our stock price; 

 ● 
 we
 may experience negative reactions from our current or future customers, distributors, suppliers, vendors, landlords, employees, joint
 venture partners and other business partners; 

 ● 
 we
 will still be required to pay certain significant costs relating to the NRO Acquisition, such as legal, accounting, advisor and printing
 fees; 

 ● 
 we
 may be unable to recover the Deposit (as defined below) depending on the circumstances of the failure to complete the NRO Acquisition; 

 ● 
 we
 may have foregone certain business opportunities, including other acquisitions and other aspects of our development plan, that, absent
 the NRO Agreement, may have been pursued; 

 ● 
 matters
 relating to the NRO Acquisition required and continue to require substantial commitments of time and resources by the Company’s
 management, which may have resulted in the distraction of the Company’s management from other aspects of our development plan,
 the beginning of the Company’s operations and the pursuit of other business opportunities that could have been beneficial to
 the Company; and 

 ● 
 litigation
 that may arise as a result of any termination or delay in completion of the NRO Acquisition for failure to perform the Company’s
 obligations under the NRO Agreement. 

 If
the NRO Acquisition is not completed, the risks described above may materialize and they may have a material adverse effect on our results
of operations, cash flows, financial position and stock price. 

 We
do not currently have sufficient funds or committed financing necessary to consummate the NRO Acquisition and the NRO Agreement does
not include a financing condition. 

 Pursuant
to the NRO Agreement, we deposited $9.0 million of the Purchase Price (the “Deposit”) into an escrow account on January 11,
2024. Upon closing of the NRO Acquisition, the Deposit will be released to NRO with a corresponding credit to the Purchase Price. In
the event the closing has not occurred in accordance with the terms of the NRO Agreement prior to June 17, 2024, and (i) such delay has
not occurred as a result of the failure of NRO to materially perform, when required, any of NRO’s covenants or obligations pursuant
to the NRO Agreement, (ii) all conditions precedent to the obligations of NRO, as set forth in the NRO Agreement, have been satisfied
or have been waived by NRO, and (iii) in our reasonable discretion, there has been no event of Force Majeure or Material Adverse Effect
(each as defined below), such that we are, or will be, unable to secure satisfactory financing with respect to the NRO Acquisition, then
the Deposit is subject to release to NRO, for so long as such foregoing conditions continue on such dates, in $3,000,000 installments
on each of June 17, 2024, July 15, 2024 and August 12, 2024. In the event closing has not occurred prior to August 15, 2024 as a result
of the failure by us to materially perform any of our covenants or obligations under the NRO Agreement, NRO shall receive the entirety
of the Deposit, which shall be the sole and exclusive remedy available to NRO for any such failure to consummate the closing. 

 The
NRO Agreement contains customary representations, warranties, covenants and agreements. As a condition to closing, we represented that
we will have, by the date of the closing, sufficient cash in immediately available funds with which to pay the cash component of the
Purchase Price and otherwise will be able to consummate the NRO Acquisition and perform our obligations under the NRO Agreement. We may
terminate the NRO Agreement at any time prior to the closing upon the occurrence of an event of Force Majeure or Material Adverse Effect,
in each case the result of which that we determine, in our reasonable discretion, that we are, or will be, unable to secure satisfactory
financing with respect to the NRO Acquisition. 

 For
an impediment to our ability to secure satisfactory financing with respect to the NRO Acquisition to constitute an event of “Force
Majeure,” the impediment must be an unforeseeable circumstance which is beyond the control of us or NRO, or any unavoidable event,
even if foreseeable, as a result of which we or NRO are unable to perform our obligations, in whole or in part, under the NRO Agreement.
Such circumstances include, but are not limited to: (i) acts of God; (ii) flood, fire, earthquake or explosion; (iii) current or future
war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riots, or other civil unrest; (iv) actions, embargoes,
or blockades in effect on or after the date of the NRO Agreement; (v) declared national or regional emergency; or (vi) epidemic, pandemic
or other similar outbreak or infection. For such an impediment to constitute a “Material Adverse Effect,” such impediment
must be a change, development, or effect (individually or in the aggregate), whether foreseeable or unforeseeable, which, when taken
as a whole is, or is reasonably likely to be, materially adverse (a) to the business, assets, value, results of operations or conditions
(financial or otherwise) of us or NRO, the Central Weld Assets, or the assets or properties of us or NRO, or (b) to the ability of us
or NRO to perform on a timely basis any material obligation under the NRO Agreement or any agreement, instrument or document entered
into or delivered in connection therewith. Changes, developments or effects relating to: (x) the economy in general (including any effects
on the economy arising as a result of acts of terrorism), (y) changes in commodity prices for hydrocarbons or other changes affecting
the U.S. oil and gas industry generally, or (z) the announcement of the NRO Acquisition, shall not be deemed to constitute a Material
Adverse Effect and shall not be considered in determining whether a Material Adverse Effect has occurred. Neither any delay in completing
the proposed offering of our common stock, nor our inability, in and of itself, to satisfy our obligations to secure financing for the
NRO Acquisition, will constitute an event constituting a Material Adverse Effect. 

 40 

 We
expect to fund the transaction through a combination of public and/or private issuances of common stock, cash on hand, and proceeds
from exercises of currently outstanding warrants. To the extent we are not able to fund the NRO Acquisition on a timely basis, whether due to a failure
to successfully complete a public or private equity offering or otherwise, we may be required to seek alternative financing arrangements,
and such financing may not be available on favorable terms, or at all, and the NRO Acquisition may be delayed or may not occur. If we
are unable to secure financing and an event of Force Majeure or Material Adverse Effect has not occurred, we will be in breach of the
NRO Agreement, will not receive the benefits of the Central Weld Assets and the Deposit will be released to NRO. 

 We
may be unsuccessful in integrating the Central Weld Assets or in realizing all or any part of the anticipated benefits of the NRO Acquisition. 

 We
believe that the NRO Acquisition will complement our growth strategy by providing operational and financial scale and increasing free
cash flow. However, achieving these goals requires, among other things, realization of the targeted synergies expected from the acquisition,
and there can be no assurance that we will be able to successfully integrate the Central Weld Assets or otherwise realize the expected
benefits of the NRO Acquisition. This growth and the anticipated benefits of the NRO Acquisition may not be realized fully or at all,
or may take longer to realize than expected. Difficulties in integrating the Central Weld Assets may result in the Company performing
differently than expected, or in operational challenges or failures to realize anticipated efficiencies. Potential difficulties in realizing
the anticipated benefits of the NRO Acquisition includes, but is not limited to, the following: 

 ● 
 disruptions
 of relationships with customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners
 as a result of uncertainty associated with the NRO Acquisition; 

 ● 
 difficulties
 integrating our existing business with the Central Weld Assets in a manner that permits us to achieve the full revenue and cost savings
 anticipated from the NRO Acquisition; 

 ● 
 the
 potential for unexpected costs, delays or challenges that may arise in integrating the Central Weld Assets into our existing business; 

 ● 
 limitations
 on our ability to realize any expected cost savings and operating synergies from the NRO Acquisition; 

 ● 
 difficulties
 integrating vendors and business partners; 

 ● 
 discovery
 of previously unknown liabilities following the NRO Acquisition for which we cannot receive reimbursement under any applicable indemnification
 provisions; 

 ● 
 performance
 shortfalls at the Company as a result of the diversion of management’s attention to integration efforts; and 

 ● 
 disruption
 of, or the loss of momentum in, the Company’s ongoing business. 

 We
have incurred, and expect to continue to incur, a number of costs associated with completing the NRO Acquisition. The elimination of
duplicative costs, as well as the realization of other efficiencies related to the integration of the Central Weld Assets, may not initially
offset integration-related costs or achieve a net benefit in the near term, or at all. 

 We
cannot assure you that our diligence review of the NRO Acquisition has identified all material risks associated with the transaction.
Additionally, following the consummation of the NRO Acquisition, if certain risks arise, the Company may be required to take write-downs
or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition,
results of operations and stock price, which could cause you to lose some or all of your investment. 

 Before
entering into the NRO Agreement, we performed a due diligence review of NRO and its business and operations, including an inspection
of the Central Weld Assets, which we believe to be generally consistent with industry practices; however, we cannot assure you that our
due diligence review identified all material issues and our assessments of the Central Weld Assets and our estimates are inherently uncertain.
As a result, we may be forced to later write-down or write-off assets, restructure our operations or incur impairment or other charges
that could result in losses. Even if our due diligence successfully identified certain risks, unexpected risks may arise and previously
known risks may materialize in a manner not consistent with our preliminary risk analysis. These risks that may not have arisen in the
scope of our due diligence review of NRO, include, but are not limited to, title, production, environmental or other problems. Even though
these charges may be non-cash items and may not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about the Company following the completion of the NRO Acquisition or its securities.
In addition, charges of this nature may impair our ability to obtain future financing on favorable terms or at all. Moreover, the Company
may have limited recourse against NRO for certain risks or liabilities incurred after the consummation of the NRO Acquisition. Accordingly,
any of our stockholders who choose to remain stockholders of the Company following the NRO Acquisition could suffer a reduction in the
value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value. 

 We
may not achieve the perceived benefits of the Crypto Sale and the NRO Acquisition and the market price of our common stock following
these transactions may decline. 

 The
market price of our common stock may decline as a result of the Crypto Sale or the NRO Acquisition for a number of reasons, including
if investors react negatively to the prospects of the Company’s business; the effect of the Crypto Sale or the NRO Acquisition
on the Company’s business and prospects is not consistent with the expectations of our management or of financial or industry analysts;
or the Company does not achieve the perceived benefits of the Crypto Sale or the NRO Acquisition as rapidly or to the extent anticipated
by our management or financial or industry analysts. 

 We
expect to incur significant transaction costs in connection with the NRO Acquisition, which may be in excess of those currently anticipated. 

 We
have incurred and are expecting to continue to incur a number of non-recurring costs associated with negotiating and completing
the NRO Acquisition, integrating the Central Weld Assets and achieving desired synergies. These costs have been, and will continue to
be, substantial and, in many cases, will be borne by us whether or not the NRO Acquisition is consummated. A substantial majority of non-recurring expenses
will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors. We will also
incur costs related to formulating and implementing integration plans, including facilities and systems consolidation costs. We will
continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the NRO Acquisition
and the integration of the Central Weld Assets. While we have assumed that a certain level of expenses would be incurred, there are many
factors beyond our control that could affect the total amount or the timing of the expenses. The elimination of duplicative costs, as
well as the realization of other efficiencies related to the integration of the Central Weld Assets, may not offset integration-related
costs and achieve a net benefit in the near term, or at all. The costs described above and any unanticipated costs and expenses, many
of which will be borne by us even if the NRO Acquisition is not consummated, could have an adverse effect on our financial condition
and operating results. 

 The
NRO Acquisition may be completed on different terms from those contained in the NRO Agreement. 

 Prior
to the completion of the NRO Acquisition, we and NRO may, by mutual agreement, amend or alter the terms of the NRO Agreement, including
with respect to, among other things, the consideration payable by us to NRO or any covenants and agreements with respect to NRO’s
operations during the pendency thereof. Any such amendments or alterations may have negative consequences to us. 

 The
market price for our common stock following the NRO Acquisition, if consummated, may be affected by factors different from those that
historically have affected or currently affect our common stock. 

 If
the NRO Acquisition is consummated, our financial position may differ from our financial position before the completion of the NRO Acquisition,
and our results of operations may be affected by some factors that are different from those currently affecting our results of operations
or those currently affecting the results of operations of NRO. Accordingly, the market price and performance our common stock is likely
to be different from the performance of our common stock in the absence of the NRO Acquisition. For a discussion of the business of NRO
and important factors to consider in connection with the business, see “ Business—NRO Acquisition .” 

 41 

 Securities
class action and derivative lawsuits may be brought against us in connection with the NRO Acquisition, which could result in substantial
costs. 

 Securities
class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or
other business combination agreements. Even if such a lawsuit is without merit, defending against these claims can result in substantial
costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact
on our liquidity and financial condition. 

 Risks
Related to the Company 

 We
have historically incurred significant losses, and may be unable to generate profitability. Our ability to successfully operate and expand
our business is dependent on the consummation of the NRO Acquisition or our ability to raise additional capital to support our drilling
program on our existing assets. 

 Historically,
we have relied upon cash from financing activities to fund substantially all of the cash requirements of our activities and have incurred
significant losses and experienced negative cash flow. For the year ended December 31, 2023, we incurred a net loss of $79.1 million,
and for the year ended December 31, 2022, we incurred a net loss of $0.5 million. We had stockholders’ equity of $40.2 million
and members’ deficit of $0.4 million as of December 31, 2023 and December 31, 2022, respectively. Furthermore, we sold all of our
revenue-generating assets in the Crypto Sale. We do not currently have sufficient capital to consummate the NRO Acquisition or to begin
development activities on any of our existing assets. As a result, until we are able to raise additional capital to consummate the NRO
Acquisition or enable us to drill wells on our existing properties, we will be unable to generate any revenue. We cannot predict if we
will be able to raise the necessary capital and, even if we are able to raise sufficient funds to complete the NRO Acquisition or commence
drilling operations and production on our assets, whether such production will be profitable. We may continue to incur losses for an
indeterminate period of time and may be unable to sustain profitability. An extended period of losses and negative cash flow may prevent
us from successfully operating and expanding our business. We may be unable to sustain or increase our profitability on a quarterly or
annual basis. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity
and Capital Resources .” 

 We
will require significant additional capital to fund our growing operations; we may not be able to obtain sufficient capital and may be
forced to limit the scope of our operations. 

 We
may not have sufficient capital to fund our future operations without significant additional capital investments, including the planned
drilling of oil and gas wells. If adequate additional financing is not available on reasonable terms or at all, we may not be able to
carry out our corporate strategy and we would be forced to modify our business plans (e.g., limit our growth, and/or decrease or eliminate
capital expenditures), any of which may adversely affect our financial condition, results of operations and cash flow. Such reduction
could materially adversely affect our business and our ability to compete. There can be no assurance that financing will be available
in a timely manner or in amounts or on terms acceptable to the Company, or at all. 

 The
Company’s ability to obtain external financing in the future may be subject to a variety of uncertainties, including its future
financial condition, results of operations, cash flows and the liquidity of international capital and lending markets. We may need to
undertake equity, equity-linked or debt financings to secure additional funds. If we raise additional funds through future issuances
of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities
we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure
in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters,
including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities.
A large amount of bank borrowings and other debt may result in a significant increase in interest expense while at the same time exposing
the Company to increased interest rate risks. See “ Management’s Discussion and Analysis of Financial Condition and Results
of Operations — Liquidity and Capital Resources .” 

 We
may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or
financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business
challenges could be significantly impaired, and our business may be adversely affected. Our capital needs will depend on numerous factors,
including, without limitation, our profitability, and the amount of our capital expenditures, including acquisitions. Moreover, the costs
involved may exceed those originally contemplated. Failure to obtain intended economic benefits could adversely affect our business,
financial condition and operating performances. 

 42 

 We
need to manage growth in operations to maximize our potential growth and achieve our expected revenues. Our failure to manage growth
can cause a disruption of our operations that may result in the failure to generate revenues at levels we expect. 

 In
order to maximize potential growth, we may have to expand our operations. Such expansion will place a significant strain on our management
and our operations. Our failure to manage our growth could disrupt our operations and ultimately prevent us from generating the revenues
we expect. 

 We
depend on the services of a small number of key personnel, and may not be able to operate and grow our business effectively if we lose
their services or are unable to attract qualified personnel in the future. 

 Our
success depends in part upon the continued service of a small number of key personnel. They are critical to the overall management of
the Company, and our strategic direction. We rely heavily on them because they have substantial experience with the Company and our business
strategies. Our ability to retain them is therefore very important to our future success. We have employment agreements with our key
personnel, but these employment agreements do not ensure that they will not voluntarily terminate their employment with us. The loss
of any key personnel would require the remaining key personnel to divert immediate attention to seeking a replacement. Competition for
senior management personnel is intense, and our inability to find a suitable replacement for any departing key personnel in a timely
basis could adversely affect our ability to operate and grow our business. 

 Past
performance by members of the Company’s management team may not be indicative of an ability to complete the NRO Acquisition or
of future performance of the Company. 

 Past
performance and operational experience of our management team and their affiliates is not a guarantee of the Company’s ability
to complete the NRO Acquisition nor, if consummated, a guarantee that the intended benefits of the NRO Acquisition will be achieved or
that we will be able to successfully develop and operate the Genesis Assets. You should not rely on the historical record of our management
team or their affiliates’ performance as indicative of the future performance of the Company or of an investment in our common
stock. 

 We
will rely on key contracts and business relationships, and if our current or future business partners or contracting counterparties fail
to perform or terminate any of their contractual arrangements with us for any reason or cease operations, or should we fail to adequately
identify key business relationships, our business could be disrupted and our reputation may be harmed. 

 If
any of our current or future business partners or contracting counterparties fails to perform or terminates their agreement(s) with us
for any reason, or if our current or future business partners or contracting counterparties with which we have short-term agreements
refuse to extend or renew the agreement or enter into a similar agreement, our ability to carry on operations may be impaired. In addition,
we will depend on the continued operation of long-term business partners and contracting counterparties and on maintaining good relations
with them. If one of our future long-term partners or counterparties is unable (including as a result of bankruptcy or a liquidation
proceeding) or unwilling to continue operating in the line of business that is the subject of our contract, we may not be able to obtain
similar relationships and agreements on terms acceptable to us or at all. If a current or future partner or counterparty fails to perform
or terminates any of the agreements with us or discontinues operations, and we are unable to obtain similar relationships or agreements,
such events could have an adverse effect on our operating results and financial condition. 

 43 

 Terrorist
attacks, cyberattacks and threats could have a material adverse effect on our business, financial condition and results of operations. 

 Terrorist
attacks or cyberattacks may significantly affect the energy industry, including our operations and those of our suppliers and customers,
as well as general economic conditions, consumer confidence and spending and market liquidity. Cyber incidents, including deliberate
attacks, have increased in frequency globally. Strategic targets, such as energy related assets, may be at greater risk of future attacks
than other targets in the United States. We depend on digital technology in many areas of our business and operations, including recording
financial and operating data, oversight and analysis of our operations and communications with the employees supporting our operations
and our customers or service providers. We also collect and store sensitive data in the ordinary course of our business, including personally
identifiable information as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders.
The secure processing, maintenance and transmission of information is critical to our operations, and we monitor our key information
technology systems in an effort to detect and prevent cyberattacks, security breaches or unauthorized access. Despite our security measures,
our information technology systems may undergo cyberattacks or security breaches including as a result of employee error, malfeasance
or other threat vectors, which could lead to the corruption, loss, or disclosure of proprietary and sensitive data, misdirected wire
transfers, and an inability to: perform services for our customers; complete or settle transactions; maintain our books and records;
prevent environmental damage; and maintain communications or operations. Significant liability to the Company or third parties may result.
We are not able to anticipate, detect or prevent all cyberattacks, particularly because the methodologies used by attackers change frequently
or may not be recognized until an attack is already underway or significantly thereafter, and because attackers are increasingly using
technologies specifically designed to circumvent cybersecurity measures and avoid detection. Cybersecurity attacks are also becoming
more sophisticated and include, but are not limited to, ransomware, credential stuffing, spear phishing, social engineering, use of deepfakes
(i.e., highly realistic synthetic media generated by artificial intelligence), and other attempts to gain unauthorized access to data
for purposes of extortion or other malfeasance. 

 Our
information and operational technologies, systems and networks, and those of our vendors, suppliers, customers and other business partners,
may become the target of cyberattacks or information security breaches that result in the unauthorized release, gathering, monitoring,
misuse, loss or destruction of proprietary and other information, or adversely disrupt our business operations. Advances in computer
capabilities, discoveries in the field of artificial intelligence, cryptography, or other developments may result in a compromise or
breach of the technology we use to safeguard confidential, personal, or otherwise protected information. As cyberattacks continue to
evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to
investigate and remediate any vulnerabilities to cyberattacks. In particular, our implementation of various procedures and controls to
monitor and mitigate security threats and to increase security for our personnel, information, facilities and infrastructure may result
in increased capital and operating costs. A cyberattack or security breach could result in liability resulting from data privacy or cybersecurity
claims, liability under data privacy laws, regulatory penalties, damage to our reputation, long-lasting loss of confidence in us, or
additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which
could have a material and adverse effect on our business, financial condition or results of operations. To date, we have not experienced
any material losses relating to cyberattacks; however, there can be no assurance that we will not suffer such losses in the future. No
security measure is infallible. Consequently, it is possible that any of these occurrences, or a combination of them, could have a material
adverse effect on our business, financial condition and results of operations. 

 The
terms of indebtedness we may incur in the future, including our anticipated revolving credit facility, may restrict our future business
and operations. 

 While
we currently do not have any long-term debt obligations and our goal is to operate with limited leverage, we intend to enter into a
revolving credit facility primarily to support our hedging activities in connection with the consummation of the NRO Acquisition,
and may incur other indebtedness in the future. The revolving credit facility may contain covenants limiting our ability to pay
dividends, incur indebtedness, grant liens, make acquisitions, make investments or dispositions, engage in transactions with
affiliates and enter into hedging and derivative arrangements, as well as covenants requiring us to maintain certain financial
ratios and tests. In addition, the borrowing base under a credit facility may be subject to periodic review by our lenders.
Difficulties in the credit markets may cause the banks to be more restrictive when redetermining the borrowing base. We can make no
assurances that we will be able to enter into a credit facility. 

 Our
ability to pay interest and principal on our indebtedness and to satisfy our other obligations will depend on our future operating performance,
our financial condition and the availability of refinancing indebtedness, which will be affected by prevailing economic conditions and
financial, business and other factors, many of which are beyond our control. We may not be able to generate sufficient cash flows to
pay the interest on our debt and future working capital, and borrowings or equity financing may not be available to pay or refinance
such debt. If we are unable to generate sufficient cash flows to satisfy our debt obligations or contractual commitments, or to refinance
our debt on commercially reasonable terms, our business and financial condition could materially and adversely be affected. 

 44 

 Acquisitions,
joint ventures or similar strategic relationships may disrupt or otherwise have a material adverse effect on our business and financial
results. 

 As
part of our strategy, we may explore strategic acquisitions and combinations, or enter into joint ventures or similar strategic relationships.
These transactions are subject to the following risks: 

 ● 
 Acquisitions,
 joint ventures or similar relationships may cause a disruption in our ongoing business, distract our management and make it difficult
 to maintain our standards, controls and procedures; 

 ● 
 We
 may not be able to integrate successfully the services, products, and personnel of any such transaction into our operations; 

 ● 
 We
 may not derive the revenue improvements, cost savings and other intended benefits of any such transaction; and 

 ● 
 There
 may be risks, exposures and liabilities of acquired entities or other third parties with whom we undertake a transaction, which may
 arise from such third parties’ activities prior to undertaking a transaction with us. 

 Acquisitions
may result in significant impairment charges and may operate at losses. We can provide no assurance that future acquisitions, joint ventures
or strategic relationships will be accretive to our business overall or will result in profitable operations. 

 We
may not realize the full benefit of the Crypto Sale for a variety of reasons, including the inability of the Crypto Purchaser to pay
the Deferred Purchase Price due to a decrease in the price of Bitcoin or the actions of third parties. 

 On
January 23, 2024, pursuant to the Crypto Divestiture Agreement, we sold all of our Mining Equipment and related assets for total consideration
of $2 million, including $1 million in cash and $1 million in deferred cash payments, to be paid out of (i) 20% of the net monthly revenues
received by the Crypto Purchaser associated with or otherwise attributable to the Mining Equipment until the aggregate amount of such
payments equals $250,000 and (ii) thereafter, 50% of the net monthly revenues received by the Crypto Purchaser associated with or otherwise
attributable to the Mining Equipment until the aggregate amount of such payments equals $1 million, plus accrued interest. In addition
to the Mining Equipment, we assigned all our rights and obligations under the Atlas MSA to the Crypto Purchaser. 

 Since
payment of the Deferred Purchase Price is dependent on the revenue generated by the Mining Equipment, we cannot predict the timing of
when we will receive the Deferred Purchase Price, if at all. Our receipt of the Deferred Purchase Price is subject to numerous risks
outside of our control, including: 

 ● 
 The
 market price and liquidity of Bitcoin; 

 ● 
 The
 cost of energy; 

 ● 
 The
 global Bitcoin network processing hashrate; 

 ● 
 Laws
 and regulations that may adversely affect the use of Bitcoin as a crypto-currency; and 

 ● 
 The
 actions of third parties, including Atlas. 

 While
we no longer have direct exposure to the fluctuation and volatility of Bitcoin prices, we will remain indirectly exposed to such volatility
until the Deferred Purchase Price has been paid in full. If the market price of Bitcoin decreases to the point where the Crypto Purchaser
does not find it economically feasible to operate the Mining Equipment or if Atlas suspends operations of the Mining Equipment under
the terms of the Atlas MSA, the payment, if any, of the Deferred Purchase Price may be delayed. Although the Crypto Divestiture Agreement
requires the Crypto Purchaser to operate the Mining Equipment in the ordinary course of business until the Deferred Purchase Price is
paid in full, delays in payment or failure to pay the Deferred Purchase Price due to the economic feasibility of mining Bitcoin or malfeasance
of a third party may result in costly litigation. In addition, while we have a security interest in the Mining Equipment as collateral
security for the prompt and complete payment and performance in full of the Crypto Purchaser’s obligations under the Crypto Divestiture
Agreement, there can be no assurances that the remedies available to us in respect of such security interest will be sufficient. These
risks and uncertainties may have a material adverse effect on our cash flows, business, results of operations and financial condition. 

 45 

 Our
Charter provides for indemnification of officers and directors at our expense and limits their liability, which may result in a major
cost to us and harm the interests of our stockholders because corporate resources may be expended for the benefit of officers and/or
directors. 

 Our
Charter and applicable Delaware law provide for the indemnification of our directors and officers against attorney’s fees and other
expenses incurred by them in any action to which they become a party arising from their association with or activities on our behalf.
This indemnification policy could result in substantial expenditures by us that we will be unable to recoup. 

 We
have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities
arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection
with the securities being registered, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent)
submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter, if it were to
occur, is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially
reduce the market and price for our shares if such a market ever develops. 

 There
may be conflicts of interest between certain of our officers and directors and our non-management stockholders. 

 Conflicts
of interest create the risk that management may have an incentive to act adversely to the interests of other stockholders. A
conflict of interest may arise between our officers and directors’ personal pecuniary interests and their fiduciary duty to
our stockholders. Furthermore, our officers and directors’ own pecuniary interests may not align with their fiduciary duties
to our stockholders. Edward Kovalik (Chief Executive Officer and Chairman of the Board), Gary C. Hanna (President and Director) and
Paul Kessler (Director) have certain overriding royalty interests in the Initial Genesis Assets. To avoid any potential conflict of
interest with certain members of the Board and management owning certain overriding royalty interests under the Initial Genesis
Assets, all of the Company’s drilling programs will be approved by an independent committee of the Board on a quarterly
basis. 

 Future
litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements. 

 From
time to time, we may be involved in lawsuits, regulatory inquiries, governmental and other legal proceedings, such as title, royalty
or contractual disputes, our oil and gas development activities, environmental liabilities, regulatory compliance matters, personal injury,
property damage and employment litigation, in the ordinary course of our business. Many of these matters raise difficult and complicated
factual and legal issues and are subject to uncertainties and complexities. The timing of the final resolutions to these types of matters
is often uncertain. Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements,
either of which could require substantial payments, adversely affecting our results of operations and liquidity. Irrespective of the
outcome, legal proceedings or governmental investigations may adversely affect our business due to legal costs, diversion of resources
and the attention of our management and employees, and other factors. 

 46 

 Due
to the recent listing of our common stock on Nasdaq, we will incur materially increased costs and become subject to additional regulations
and requirements. 

 Due
to the recent listing of our common stock on Nasdaq, we will incur material legal, accounting and other expenses, including payment of
annual exchange fees, to satisfy the continued listing standards for Nasdaq. In connection with the listing of our common stock on Nasdaq,
we now must meet certain financial and liquidity criteria to maintain our listing, as well as standards of Board independence, committee
composition and governance and Board diversity, only some of which criteria and standards include time periods to comply after listing.
If we fail to meet any of Nasdaq’s listing standards, our common stock may be delisted. In addition, our Board may determine that
the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common
stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect
on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly
impair our ability to raise capital and the value of your investment. 

 Failure
to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could result in
a restatement of our financial statements, cause investors to lose confidence in our financial statements and our Company and have a
material adverse effect on our business and stock price. 

 We
produce our financial statements in accordance with GAAP. Effective internal controls are necessary for us to provide reliable financial
reports to help mitigate the risk of fraud and to operate successfully as a publicly traded company. As a public company, we are required
to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of
2002, or Section 404. Further, Section 404 requires annual management assessments of the effectiveness of our internal controls over
financial reporting. Testing and maintaining internal controls can divert our management’s attention from other matters that are
important to our business. We may not be able to conclude on an ongoing basis that we have effective internal controls over financial
reporting in accordance with Section 404. If we are unable to conclude that we have effective internal controls over financial reporting,
investors could lose confidence in our reported financial information and our company, which could result in a decline in the market
price of our common stock, and cause us to fail to meet our reporting obligations in the future, which in turn could impact our ability
to raise additional financing if needed in the future. 

 The
requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, and the requirements
of the Sarbanes-Oxley Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with
these requirements in a timely or cost-effective manner. 

 As
a public company, we are required to comply with laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley
Act of 2002, related regulations of the SEC and the requirements of Nasdaq. Complying with these statutes, regulations and requirements
occupy a significant amount of time of our board of directors and management and significantly increase our costs and expenses. We are
required to: 

 ● 
 institute
 a more comprehensive compliance function; 

 ● 
 comply
 with rules promulgated by Nasdaq; 

 ● 
 continue
 to prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws; 

 ● 
 establish
 internal policies, such as those relating to insider trading; and 

 ● 
 involve
 and retain outside counsel and accountants in the above activities. 

 Furthermore,
we must comply with Section 404 of the Sarbanes Oxley Act of 2002 for our annual reports on Form 10-K, including the requirement to have
our independent registered public accounting firm attest to the effectiveness of our internal controls, unless we continue to be exempt from such
requirement. Our independent registered public accounting firm may
issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, operated
or reviewed. Compliance with these requirements may strain our resources, increase our costs and distract management; and we may be unable
to comply with these requirements in a timely or cost-effective manner. 

 47 

 We
are a “smaller reporting company” and the reduced disclosure requirements applicable to smaller reporting companies may make
our common stock less attractive to investors. 

 We
are a “smaller reporting company” as defined under the Securities Act and Exchange Act and expect to remain a “smaller
reporting company” for the foreseeable future. We are therefore entitled to rely on certain reduced disclosure requirements, such
as the ability to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and
reduced disclosure obligations regarding executive compensation. Additionally, as a “non-accelerated filer”, we currently
are not required to obtain an attestation report on internal control over financial reporting issued by our independent registered public
accounting firm. 

 We
have utilized these exemptions and expect to continue to utilize these exemptions while we remain a smaller reporting company and non-accelerated
filer. These exemptions and reduced disclosures in our SEC filings due to our status as a smaller reporting company mean our auditors
do not review our internal control over financial reporting and may make it harder for investors to analyze our results of operations
and financial prospects. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and
our common stock prices may be more volatile. 

 Our Charter and Bylaws
designate the state and federal courts located within the State of Delaware as the sole and exclusive forum for certain types of actions
and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial
forum for disputes with us or our directors, officers, employees or agents. 

 Our Charter and Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the
Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the Superior
Court of the State of Delaware, or, if the Superior Court of the State of Delaware does not have jurisdiction, the United States District
Court for the District of Delaware) will be the sole and exclusive forum for (i) any derivative action or proceeding brough t
on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee
or agent or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action against the Company arising
pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware,
or (iv) any action against the Company or any director, officer, other employee or agent of the Company asserting a claim governed by
the internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce or determine the validity of the
Charter or the Bylaws, in each such case subject to such court’s having personal jurisdiction over the indispensable parties named
as defendants therein. Our Charter and Bylaws further provide that, unless we consent in writing to the selection of an alternative forum,
the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint
asserting a cause of action under the Securities Act. Our Charter and Bylaws provisions do not apply to complaints asserting a cause
of action under the Exchange Act. A stockholder may not waive compliance with the federal securities laws and the rules and regulations
thereunder. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have
notice of the provisions of our Charter and Bylaws described in the preceding sentences. This choice of forum provision may limit a stockholder’s
ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents,
which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our Charter
and Bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur
additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial
condition or results of operations. 

 We
may not be able to use a portion of our net operating loss carryforwards and other tax attributes to reduce our future U.S. federal and
state income tax obligations, which could adversely affect our cash flows. 

 We
currently have U.S. federal and state net operating loss (“NOL”) carryforwards. Our ability to use these tax attributes to
reduce our future U.S. federal and state income tax obligations depends on many factors, including our future taxable income, which cannot
be assured. In addition, our ability to use NOL carryforwards and other tax attributes are subject to significant limitations under Section
382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”). Under those sections of the Code, if a
corporation undergoes an “ownership change” (as defined in the Code), the corporation’s ability to use its pre-change
NOL carryforwards and other tax attributes may be substantially limited. 

 Determining
the limitations under Section 382 of the Code is technical and complex. A corporation generally will experience an ownership change if
one or more stockholders (or groups of stockholders) who are each deemed to own at least 5% of the corporation’s stock increase
their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We may in
the future undergo an ownership change under Section 382 of the Code. If an ownership change occurs, our ability to use our NOL carryforwards
and other tax attributes to reduce our future U.S. federal and state income tax obligations may be materially limited, which could adversely
affect our cash flows. 

 Risks
Related to Ownership of our Common Stock 

 The
conversion or exercise, as applicable, of the outstanding Series D Preferred Stock, Series E Preferred Stock, Series D PIPE Warrants,
Series E PIPE Warrants, Non-Compensatory Options and Exok Warrants could substantially dilute your investment and adversely affect the
market price of our common stock. 

 As
of March 13, 2024, the Series D Preferred Stock are convertible into an aggregate of 4,115,426 shares of common stock and the
Series D PIPE Warrants are exercisable for an aggregate of 4,613,028 shares of common stock. The Series E Preferred Stock are convertible
into an aggregate of 4,000,000 shares of common stock and the Series E PIPE Warrants are exercisable for an aggregate of 8,000,000 shares
of common stock. The Exok Warrants are exercisable for an aggregate of 670,499 shares of common stock. In addition, there are outstanding
Non-Compensatory Options to purchase an aggregate of 8,000,000 shares of common stock for $7.14 per share which are only exercisable
if specific production hurdles are achieved, pursuant to amended and restated non-compensatory Option Agreements entered into at the
Merger Effective Time. 

 48 

 In
addition, sales of a substantial number of shares of common stock issued upon the conversion or exercise, as applicable, of the outstanding
Series E Preferred Stock, Series E PIPE Warrants, Exok Warrants, Series D Preferred Stock, Series D PIPE Warrants, Non-Compensatory Options,
or even the perception that such sales could occur, could adversely affect the market price of our common stock. The conversion or exercise
of such securities could result in dilution in the interests of our other stockholders and adversely affect the market price of our common
stock. For example, as a result of the Warrant Exercise, the Company issued an additional 2,000,000 shares of common stock to the O’Neill
Trust, resulting in immediate dilution to existing stockholders of approximately 20%. 

 Our
Board has broad discretion to issue additional securities, and in order to raise sufficient funds to expand our operations, we may have
to issue securities at prices which may result in substantial dilution to our stockholders. 

 We
are entitled under our Charter to issue up to 500,000,000 shares of common stock and 50,000,000 shares of preferred stock, although these
amounts may change in the future subject to stockholder approval. Shares of our preferred stock provide our Board broad authority to
determine voting, dividend, conversion and other rights. Any additional stock issuances could be made at a price that reflects a discount
or premium to the then-current market price of our common stock. In addition, in order to raise capital, we may need to issue securities
that are convertible into or exchangeable for a significant amount of our common stock. Our Board may generally issue those shares of
common stock and preferred stock, or convertible securities to purchase those shares, without further approval by our stockholders. Any
preferred stock we may issue could have such rights, preferences, privileges and restrictions as may be designated from time-to-time
by our Board, including preferential dividend rights, voting rights, conversion rights, redemption rights and liquidation provisions.
We may also issue additional securities to our directors, officers, employees and consultants as compensatory grants in connection with
their services, both in the form of stand-alone grants or under our stock incentive plans. The issuance of additional securities may
cause substantial dilution to our stockholders. 

 If
securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations
regarding our common stock or if our operating results do not meet their expectations, our stock price could decline. 

 The
trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about
us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could
lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or
more of the analysts who cover our company downgrades our common stock or if our operating results do not meet their expectations, our
stock price could decline. 

 Insiders
have substantial control over the Company, and they could delay or prevent a change in our corporate control even if our other stockholders
want it to occur. 

 As
of March 13, 2024, our executive officers and directors, collectively beneficially own approximately 40.51% of our outstanding
shares of common stock and the O’Neill Trust beneficially owns 25% of our outstanding shares of common stock. These stockholders
are able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval
of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with our Company even if
our other stockholders want it to occur. This may also limit your ability to influence the Company in other ways. In addition, certain
investors own significant numbers of convertible securities, that if exercised or converted, could result in ownership of a significant
portion of the outstanding shares of common stock of the Company. For example, assuming full exercise or conversion, as applicable, of
their respective convertible securities and no exercise or conversion by other security holders, certain holders could acquire a controlling
position in the Company’s common stock. The exercise or conversion, as applicable, of the Series D Preferred Stock, Series D PIPE
Warrants, Series E Preferred Stock and Series E PIPE Warrants are subject to a beneficial ownership limitation of 4.99% of the outstanding
shares of common stock, which may be increased by the holder upon written notice to the Company, to any specified percentage not in excess
of 9.99%. The 9.99% beneficial ownership limitation may only be modified, amended or waived with the written consent of both the Company
and the security holder. In November 2023, the O’Neill Trust entered into an agreement with the Company pursuant to which it amended
the terms of each of its Series D PIPE Warrants and Series E PIPE Warrants to increase the beneficial ownership limitation from 9.99%
to 25% and gave notice to the Company that it was increasing its beneficial ownership limitation to 25% with respect to each of its remaining
warrants. The beneficial ownership limitation on the Series D Preferred Stock and Series E Preferred Stock remains at 4.99%, subject
to increase to 9.99% by O’Neill Trust upon written notice to the Company. If such beneficial ownership limitation were to be amended
or waived for the O’Neill Trust or other holders, certain holders would be able to convert their preferred shares or warrants for
a significant portion of the outstanding shares of common stock of the Company, and such holders would be able to exercise significant
control over all matters requiring stockholder approval. See Exhibit 4.5 filed with this Annual Report for more information. 

 49 

 The
trading price of our common stock has been, and is likely to continue to be, volatile and could be subject to wide fluctuations in response
to various factors, some of which are beyond our control. 

 The
market price of our common stock has historically varied greatly, and is likely to continue to be volatile because of numerous factors,
including: 

 ● 
 further
 disagreements or price wars amongst OPEC+ members, including the effect thereof on global oil supply, oil storage capacity and oil
 prices; 

 ● 
 a
 domestic or global economic slowdown that could affect our financial results and operations and the economic strength of our customers; 

 ● 
 our
 ability to meet our working capital needs; 

 ● 
 quarterly
 variations in operating results; 

 ● 
 our
 ability to successfully finance and consummate the NRO Acquisition on the anticipated timeline, or at all; 

 ● 
 changes
 in financial estimates by us or securities analysts who may cover our stock or by our failure to meet the estimates made by securities
 analysts; 

 ● 
 changes
 in market valuations of other similar companies; 

 ● 
 announcements
 by us or our competitors of new products or of significant technical innovations, contracts, acquisitions, divestitures, strategic
 relationships or joint ventures; 

 ● 
 changes
 in laws or regulations applicable to our business; 

 ● 
 additions
 or departures of key personnel; 

 ● 
 changes
 in our capital structure, such as future issuances of debt or equity securities; 

 ● 
 short
 sales, hedging and other derivative transactions involving our capital stock; 

 ● 
 our
 limited public float and the relatively thin trading market for our common stock; 

 ● 
 transactions
 in our common stock, by directors, officers, affiliates and other major investors; and 

 ● 
 the
 other factors described under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements”
 included in this Annual Report. 

 Furthermore,
from time to time, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect
the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating
performance of those companies. 

 These
broad market and industry fluctuations, as well as general economic, political and market conditions, such as recessions, interest rate
changes, international currency fluctuations or political unrest, may negatively impact the market price of our common stock. In the
past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
Any future securities litigation against us could result in substantial costs and divert our management’s attention and resources,
and harm our business, financial condition, and results of operations. 

 Future
sales of our common stock, or the perception that such future sales may occur, may cause our stock price to decline. 

 Sales
of substantial amounts of our common stock in the public market, or the perception that these sales may occur, could cause the market
price of our common stock to decline. In addition, the sale of such shares, or the perception that such sales may occur, could impair
our ability to raise capital through the sale of additional common stock or preferred stock. 

 50 

 We
have not paid cash dividends in the past and do not expect to pay cash dividends in the foreseeable future. Any return on your investment
may be limited to increases in the market price of our common stock. 

 We
have not paid any cash dividends on our common stock to date. We may retain future earnings, if any, for future operations, expansion
and debt repayment and have no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends
in the future will be made at the discretion of the Board and will depend on, among other things, our results of operations, financial
condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant. In addition, our ability to
pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Prairie Operating Co. 10-K/A

Item 1A. Risk Factors
