What changed in this filing

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Item 1A. Risk Factors

2025-03-05 compared with 2024-03-07 · 77 added, 102 removed, 290 unchanged (38% of the section changed)

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• being able to run tools and other equipment consistently through horizontal wellbores.

Risks that we face while completing our wells include, but are not limited to, the following:

• the ability to fracture or stimulate the planned number of stages in a horizontal or lateral wellbore;

Risks that we face while completing our horizontal wells include, but are not limited to, the following:

• the ability to fracture or stimulate the planned number of stages in a horizontal wellbore;

• the ability to run tools and other equipment the entire length of a wellbore during completion operations;

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We are unable to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable.

This risk may be enhanced in our situation, due to the fact that a significant percentage of our proved reserves is currently proved undeveloped reserves.

The use of seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities.

This risk may be enhanced in our situation, due to the

fact that a significant percentage of our proved reserves is currently proved undeveloped reserves.

The use of seismic data and other technologies and the study of producing fields in the same area may not enable us to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities.

We cannot assure you that the analogies we draw from available data obtained by analyzing other wells, more fully explored prospects or producing fields will be applicable to all of our drilling prospects.

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To reduce our exposure to commodity price uncertainty and increase cash flow predictability, we have entered into crude oil and natural gas price hedging arrangements with respect to a significant portion of our expected production in order to economically hedge a portion of our forecasted oil and natural gas production.

Additionally, our credit facility

requires us to hedge a significant portion of our production.

Additionally, our credit facility requires us to hedge a significant portion of our production.

These derivative contracts typically limit the benefit we would otherwise receive from increases in the prices for oil and natural gas.

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We may be adversely affected by natural disasters, pandemics and other catastrophic events, and by man-made problems such as terrorism, that could disrupt our business operations.

Natural disasters, adverse weather conditions (particularly abnormally cold weather and thunderstorms), floods, pandemics, acts of terrorism and other catastrophic or geo-political events may cause damage or disruption to our operations and the global economy, or could result in market disruptions, any of which could have an adverse effect on our business, operating results, and financial condition.

The coronavirus outbreak impacted various businesses throughout the world, including an impact on the global demand for oil and natural gas, travel restrictions and the extended shutdown of certain businesses in impacted geographic regions.

Natural disasters, adverse weather conditions (particularly abnormally cold weather in the winter, and hurricanes and thunderstorms in the summer), floods, pandemics, acts of terrorism and other catastrophic or geo-political events may cause damage or disruption to our operations and the global economy, or could result in market disruptions, any of which could have an adverse effect on our business, operating results, and financial condition.

The recent coronavirus outbreak impacted various businesses throughout the world, including an impact on the global demand for oil and natural gas, travel restrictions and the extended shutdown of certain businesses in impacted geographic regions.

If other pandemics occur, they could have a material adverse impact on our business operations, operating results and financial condition.

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Oil and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand.

Historically, the markets for oil and natural gas have been volatile and we expect these markets will likely continue to be volatile.

Historically, the markets for oil and natural gas have been volatile and we expect these markets will continue to be volatile.

The prices we receive for our production, and the levels of our production, depend on numerous factors beyond our control.

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Our oil and natural gas exploration and production activities are subject to numerous risks beyond our control, including the risk that drilling will not result in commercially viable oil or natural gas production.

For example, in January 2021, President Biden signed an Executive Order directing the Department of Interior (the “DOI”) to temporarily pause new oil and gas leases on federal lands and waters pending completion of a comprehensive review of the federal government’s existing oil and gas leasing and permitting program.

In June 2021, a federal district court enjoined the DOI from implementing the pause and leasing resumed, although litigation over the leasing pause remains ongoing.

In February 2022, another judge ruled that the Biden Administration’s efforts to raise the cost of climate change in its environmental assessments, would increase energy costs and damage state revenues from energy production.

This ruling has cause federal agencies to delay issuing new oil and gas leases and permits on federal lands and waters.

While we do not have any federal lands acreage at this time, these actions could have a material adverse effect on our industry, the public perception of oil and gas companies such as ours and the willingness of the public and financial institutions to provide capital for our industry.

Our decisions to purchase, explore, develop or otherwise exploit prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations.

Our decisions to purchase, explore, develop, or otherwise exploit prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data, and engineering studies, the results of which may be inconclusive or subject to varying interpretations.

Please read “—Reserve estimates depend on many assumptions that may turn out to be inaccurate.” (below) for a discussion of the uncertainty involved in these processes.

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and limitations in the market for oil and natural gas.

Decreases in oil and natural gas prices may require us to take write-downs of the financial carrying values of our oil and natural gas properties which could negatively impact the trading value of our common stock.

Decreases in oil and natural gas prices may require us to incur write-downs of the financial carrying values of our oil and natural gas properties which could negatively impact the price of our common stock.

Accounting rules require that we review periodically the financial carrying value of our oil and natural gas properties for possible impairment.

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Discounted future net revenues are estimated using oil and natural gas spot prices based on the average price during the preceding 12-month period determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, except for changes which are fixed and determinable by existing contracts.

The net book value is

compared to the ceiling on a quarterly basis.

The net book value is compared to the ceiling on a quarterly basis.

The excess, if any, of the net book value above the ceiling is required to be written off as an impairment expense.

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Future price decreases could result in reductions in the financial carrying value of such assets and an equivalent charge on our financial statements.

It is difficult to predict with reasonable certainty the amount of any future impairments given the many factors impacting the ceiling test calculation including, but not limited to, future pricing, operating costs, upward or downward reserve revisions, reserve adds, and tax attributes.

Decreases in oil and natural gas prices may affect our bank borrowing base, potentially requiring earlier than anticipated debt repayment, which could negatively impact our financial position, results of operations and the trading value of our common stock.

It is difficult to estimate with any degree of reasonable certainty the amount of any future impairments given the many factors impacting the ceiling test calculation including, but not limited to, future pricing, operating costs, upward or downward reserve revisions, reserve adds, and tax attributes.

Decreases in oil and natural gas prices could result in reductions in the borrowing base under our Credit Facility, thus requiring earlier than anticipated repayment of debt or trigger a possible default under our Credit Facility in the event we are unable to make payments or repayments under the Credit Facility on a timely basis.

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Therefore, estimates of oil and natural gas reserves are inherently imprecise.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves most likely will vary from our estimates.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses, and quantities of recoverable oil and natural gas reserves will likely vary from our estimates.

Any significant variance could materially affect the estimated quantities and present value of our reported reserves.

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In accordance with SEC requirements, we generally base the estimated discounted future net cash flows from our proved reserves on prices and costs calculated on the date of the estimate.

Discounted future net revenues are estimated using oil and natural gas spot prices based on the average price

during the preceding 12-month period determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, except for changes which are fixed and determinable by existing contracts.

Actual future prices and costs may differ materially from those used in the present value estimate.

If future values decline or costs increase it could negatively impact our ability to finance operations, and individual properties could cease being commercially viable, affecting our decision to continue operations on certain producing properties or to attempt to develop properties.

All of these factors would have a negative impact on earnings and net income, and most likely the trading price of our common stock.

All of these factors would have a negative impact on earnings and net income, and most likely the price of our common stock.

These factors could also result in the acceleration of debt repayment and a reduction in our borrowing base under our Credit Facility.

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Losses and liabilities arising from uninsured and under insured events could materially and adversely affect our business, financial condition, and results of operations.

Our oil and natural gas

exploration and production activities are subject to all of the operating risks associated with drilling for and producing oil and natural gas, including the possibility of:

Our oil and natural gas exploration and production activities are subject to all of the operating risks associated with drilling for and producing oil and natural gas, including the possibility of:

• environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas, or other pollution into the environment, including groundwater;

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• natural disasters.

Any of these risks could adversely affect our ability to conduct operations or result in substantial losses to our Company.

Any of these risks could adversely affect our ability to conduct operations or result in substantial losses.

We may elect to not obtain certain insurance coverage if we believe that the cost of available insurance is excessive relative to the risks presented.

In addition, pollution and environmental risks generally are not fully insurable.

If a significant accident or other event occurs and is not fully covered by insurance, then it could materially and adversely affect us.

If a significant accident or other event occurs and is not fully covered by insurance, it could materially and adversely affect us.

Unless we replace our oil and natural gas reserves, our reserves and production will decline as reserves are produced.

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Our future oil and natural gas reserves and production, and, therefore, our cash flow and income, are highly dependent on our success in efficiently developing and producing our current reserves and economically finding or acquiring additional recoverable reserves.

If we are unable to develop, find or acquire additional reserves to replace our current and future production, our cash flow and income will decline as production declines, until our existing properties would be incapable of sustaining commercial production.

If we are unable to develop, find, or acquire additional reserves to replace our current and future production, our cash flow and income will decline as production declines, until our existing properties would be incapable of producing profitably.

Competition is intense in the oil and natural gas industry.

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Consequently, our competitors may be able to address these competitive factors more effectively than we can.

If we are not successful in our competition for oil and natural gas properties or in our marketing of production, then our financial condition and operation results may be adversely affected.

If we are not successful in our competition for oil and

natural gas properties or in our marketing of production, then our financial condition and operation results would be adversely affected.

If our access to markets is restricted, it could negatively impact our production, our income, and our ability to retain our leases.

Market conditions or the unavailability of satisfactory oil and natural gas transportation arrangements may hinder our access to oil and natural gas markets or delay our production.

The availability of a ready market for our oil and natural gas production depends on a number of factors, including the demand for and supply of oil and natural gas and the proximity of reserves to pipelines and terminal facilities.

Our ability to market our production depends in substantial part on the availability and capacity of gathering systems, pipelines, and processing facilities owned and operated by third parties.

Our failure to obtain such services on acceptable terms could materially harm our business.

For example, for the year ended December 31, 2024, we experienced a negative price of $1.44 per Mcf of natural gas with negative net sales of approximately $9.3 million, adversely affecting our cash flows and net income.

Currently, some of our production is sold to marketers and other purchasers that have access to pipeline facilities.

Much of our production is in areas with limited or no access to pipelines, thereby necessitating delivery by trucking.

Further, much of our natural gas production is sold to companies who are the only gathering and processing facilities near most of our properties Such restrictions on our ability to sell our oil or natural gas could have several adverse effects, including higher transportation costs, fewer potential purchasers (thereby potentially resulting in increased exposure to facility breakdowns and a lower selling prices) or, in the event we were unable to market and sustain production from a particular lease for an extended time, possibly causing us to lose a lease due to lack of production.

Further, much of our natural gas production is sold to companies who are the only gathering and processing facilities near most of our properties.

Such restrictions on our ability to sell our oil or natural gas could have several adverse effects, including higher transportation costs, fewer potential purchasers (thereby potentially resulting in increased exposure to facility breakdowns and a lower selling prices) or, in the event we were unable to market and sustain production from a particular lease for an extended time, possibly causing us to lose a lease due to lack of production.

Many of our properties are in areas that may have been partially depleted or drained by offset wells and certain of our wells may be adversely affected by actions we or other operators may take when drilling, completing, or operating wells that we or they own.

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If we are unable to obtain water to use in our operations from local sources, we may be unable to economically produce oil, natural gas and NGLs, which could have an adverse effect on our business, financial condition, and results of operations.

Wastewaters from our operations typically are disposed of via underground injection.

Waste water from our operations typically are disposed of via underground injection.

Some studies have linked earth tremors in certain areas to underground injection, which has led to greater public scrutiny of disposal wells.

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We are subject to complex laws that can affect the cost, manner, or feasibility of doing business.

Exploration, development, production, and sale of oil and natural gas are subject to extensive federal, state, local, and international regulation.

Exploration, development, production, and sale of oil and natural gas are subject to extensive federal, state and local regulation.

It is not possible to predict how or when regulations affecting our operations might change.

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or the imposition of injunctive relief.

Changes in environmental laws and regulations and the interpretation thereof occur frequently, and any changes that result in more stringent or costly waste handling, storage, transport, disposal, or cleanup requirements could require us to make significant expenditures to maintain compliance and may otherwise have a material adverse effect on our results of operations, competitive position, and financial condition as well as the industry in general.

Changes in environmental laws and regulations and the interpretation thereof occur from time to time, and any changes that result in more stringent or costly waste handling, storage, transport, disposal, or cleanup requirements could require us to make significant expenditures to maintain compliance and may otherwise have a material adverse effect on our results of operations, competitive position, and financial condition as well as the industry in

Under these environmental laws and regulations, we could be held strictly liable for the removal or remediation of previously released materials or property contamination regardless of whether we were responsible for the release or if our operations were standard in the industry at the time they were performed.

The amount of additional future costs is not fully determinable due to such factors as the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions or compliance efforts that may be required, the determination of the Company’s liability in proportion to other responsible parties, and the extent to which such costs are recoverable from third parties.

The amount of any additional future costs is not fully determinable due to such factors as the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions or compliance efforts that may be required, the determination of the Company’s liability in proportion to other responsible parties, and the extent to which such costs are recoverable from third parties.

Our operations are subject to a series of risks arising out of the perceived threat of climate change that could result in increased operating costs, limit the areas in which we may conduct oil and natural gas exploration and production activities, and reduce demand for the oil and natural gas we produce.

In the United States, no comprehensive climate change legislation has been implemented at the federal level, though recently passed laws such as the IRA advance numerous climate-related objectives.

However, President Biden has

highlighted addressing climate change as a priority of his administration, which includes certain potential initiatives for climate change legislation to be proposed and passed into law.

The IRA contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, and supporting infrastructure and carbon capture and sequestration, among other provisions.

Moreover, federal regulators, state and local governments, and private parties have taken (or announced that they plan to take) actions that have or may have a significant influence on our operations.

For example, in response to findings that emissions of carbon dioxide, methane, and other GHGs endanger public health and the environment, the EPA has adopted regulations under existing provisions of the CAA that, among other things, establish PSD construction and Title V operating permit reviews for certain large stationary sources that are already potential major sources of certain principal, or criteria, pollutant emissions.

Facilities required to obtain PSD permits for their GHG emissions also will be required to meet “best available control technology” standards that will be established by the states or, in some cases, by the EPA for those emissions.

These EPA rules could adversely affect our operations and restrict or delay our ability to obtain air permits for new or modified sources.

In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified onshore and offshore oil and gas production sources in the United States on an annual basis, which include certain of our operations.

The federal regulation of methane from oil and gas facilities has been subject to substantial uncertainty in recent years.

In June 2016, the EPA finalized NSPS, known as Subpart OOOOa, that establish emission standards for methane and VOCs from new and modified oil and natural gas production and natural gas processing and transmission facilities.

In September 2020, the EPA finalized amendments to the 2016 standards that removed the transmission and storage segment from the oil and natural gas source category and rescinded the methane-specific requirements for production and processing facilities.

However, President Biden signed an executive order on his first day in office calling for the suspension, revision, or rescission of the September 2020 rule and the reinstatement or issuance of methane emission standards for new, modified and existing oil and gas facilities.

Subsequently, the U.S.

Congress approved, and President Biden has signed into law, a resolution under the Congressional Review Act to repeal the September 2020 revisions to the methane standards, effectively reinstating the prior standards.

In response to President Biden’s executive order calling on the EPA to revisit federal regulations regarding methane, 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, in December 2023.

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 rule are generally the same for both new and existing sources.

The requirements 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 and zero-emission requirements for certain devices.

The rule also establishes a “super emitter” response program that would allow third parties to make reports to EPA of large methane emission events, triggering certain investigation and repair requirements.

Fines and penalties for violations of these rules can be substantial.

It is likely, however, that the final rule and its requirements will be subject to legal challenges.

Moreover, compliance with the new rules may affect the amount we owe under the IRA 2022’s methane fee described above because compliance with EPA’s methane rules would exempt an otherwise covered facility from the requirement to pay the methane fee.

The requirements of the EPA’s final methane rules have the potential to increase our operating costs and thus may adversely affect our financial results and cash flows.

Moreover, failure to comply with these CAA requirements can result in the imposition of substantial fines and penalties as well as costly injunctive relief.

However, given the long-term trend toward increasing regulation, future federal GHG regulations of the oil and gas industry remain a significant possibility.

Internationally, the United Nations-sponsored “Paris Agreement” requires member states to individually determine and submit non-binding emissions reduction targets every five years after 2020.

President Biden has recommitted the United States to the Paris Agreement and, in April 2021, announced a goal of reducing the United States’ emissions by 50-52% below 2005 levels by 2030.

In November 2021, the international community gathered again at COP26, during which multiple announcements were made, including a call for parties to eliminate certain oil and natural gas subsidies and pursue further action on non-CO2 GHGs.

These goals were reaffirmed at COP27 in November 2022.

Relatedly, the United States and European Union jointly announced the launch of the “Global Methane Pledge,” which aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector.

At COP28 in December 2023, 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 COP28 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.

The impacts of these orders, pledges, agreements and any legislation or regulation promulgated to fulfill the United States’ commitments under the Paris Agreement, COP26, COP28 or other international conventions cannot be predicted at this time.

Concern over the threat of climate change has also resulted in increasing political risks in the United States, including climate-change related pledges made by President Biden and other public office representatives.

On January 27, 2021, President Biden signed an executive order calling for substantial action on climate change, including, among other things, the increased use of zero-emissions vehicles by the federal government, the elimination of subsidies provided to the oil and natural gas industry, and increased emphasis on climate-related risks across agencies and economic sectors.

Additionally, in November 2021, the Biden Administration released “The Long-Term Strategy of the United States:

Pathways to Net-Zero Greenhouse Gas Emissions by 2050,” which establishes a roadmap to

net zero emissions in the United States by 2050 through, among other things, improving energy efficiency;

decarbonizing energy sources via electricity, hydrogen, and sustainable biofuels;

and reducing non-CO2 GHG emissions, such as methane and nitrous oxide.

In addition, on March 6, 2024, the SEC adopted a rule requiring registrants to include certain climate-related disclosures, including Scope 1 and 2 GHG emissions, climate-related targets and goals, and certain climate-related financial statement metrics, in registration statements and annual reports.

International climate commitments made by political, industrial, and financial stakeholders may also impact commercial, regulatory, and consumer trends related to climate change.

In response to findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment, the EPA has adopted regulations pursuant to the CAA that, among other things, require PSD preconstruction and Title V operating permits for GHG emissions from certain large stationary sources, mandate monitoring and annual reporting of GHG emissions, and impose new standards for reducing methane emissions from oil and gas operations by limiting venting and flaring and implementing leak detection and repair programs.

The IRA also imposes the first-ever fee on GHG emissions through a WEC, which the EPA has finalized regulations to implement.

In May 2024, the EPA published a final rule expanding GHG emissions reporting obligations for certain oil and natural gas sector sources.

While the first Trump administration took a number of actions to revise federal regulation of methane from the oil and natural gas sector, these actions were subsequently reversed by both the Biden administration and Congress.

Moreover, in December 2023, the EPA published a final rule that established more stringent performance standards for new sources and first-time standards for existing sources under applicable agency regulations at 40 C.F.R.

Part 60 for methane and VOC emissions for the crude oil and natural gas sources.

The requirements imposed by this rule include enhanced leak detection and repair obligations, zero-emission requirements for certain processes and practices, “green well” completion standards, limitations on routine flaring, and a “Super Emitter Response Program” which triggers additional requirements following certain large emissions events.

Compliance with these rules and legislation will likely require enhanced record-keeping practices, the purchase of new equipment, such as optical gas imaging instruments to detect leaks, increased frequency of maintenance and repair activities to address emissions leakage and additional personnel time to support these activities or the engagement of third-party contractors to assist with and verify compliance.

While legal challenges to many of the above discussed regulations are ongoing and, either the current Trump administration or Congress may also pursue rulemakings or legislation, respectively, that could repeal, revise, or otherwise limit the enforcement of these regulations and certain of the IRA’s provisions, like the WEC, we cannot predict whether and when such action will be taken and the outcome and timeline for such actions may continue to be uncertain and subject to further legal challenges.

Internationally, the United Nations-sponsored “Paris Agreement” encourages member states to individually determine and submit non-binding emissions reduction targets.

The United States’ most recent goal was to reduce its economy-net GHG emissions by 61 to 66 percent from 2005 levels by 2035.

Recent Conferences of the Parties have resulted in reaffirmations of the objectives of the Paris Agreement, calls for parties to eliminate certain fossil fuel subsidies and pursue reductions in non-carbon dioxide GHG emissions, agreements to transition away from fossil fuels in energy systems and increase renewable energy capacity, financial commitments to fund energy transition efforts in developing countries, and similar initiatives, though none legally binding.

However, in January 2025, President Trump initiated the United States’ withdrawal from the Paris Agreement and ordered the revocation of any related financial commitments.

The impacts of the United States’ withdrawal and other existing or future climate-related orders, pledges, agreements or any legislation or regulation promulgated in connection with the Paris Agreement, the Global Methane Pledge, or other international conventions cannot be predicted at this time.

Further, state and local governments, financial institutions, and industry groups may elect to continue participating in international climate-related initiatives.

financial statement metrics, in registration statements and annual reports, though the implementation of this rules is currently paused pending the outcome of legal challenges against the rule.

Currently, the ultimate impact of these laws on our business is uncertain.

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banks have made net zero commitments and have announced that they will be assessing financed emissions across their portfolios and taking steps quantify and reduce those emissions.

In addition, at COP26, 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 emissions by 2050.

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 natural gas sector, or requiring that borrowers take additional steps to reduce their GHG emissions.

There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the oil and natural gas industry.

For example, the Federal Reserve has joined the Network for Greening the Financial System (“NGFS”), a consortium of financial regulators focused on addressing climate-related risks in the financial sector and, in November 2021, the Federal Reserve issued a statement in support of the efforts of the NGFS to identify key issues and potential solutions for the climate-related challenges most relevant to central banks and supervisory authorities.

A material reduction in the capital available to the oil and natural gas industry could make it more difficult to secure funding for exploration, development, production, transportation, and processing activities, which could result in decreased demand for our products or otherwise adversely impact our financial performance.

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Such physical risks may also impact the infrastructure on which we rely to produce or transport our products.

One of more of these developments could have a material adverse effect on our business, financial condition and

One of more of these developments could have a material adverse effect on our business, financial condition, and operations.

In addition, while our consideration of changing weather 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 our disaster preparedness and response and business continuity planning, which may not have considered or be prepared for every eventuality.

Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes or fees may adversely

affect our operating results and cash flows.

Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes or fees may adversely affect our operating results and cash flows.

From time to time, federal and state level legislation has been proposed that would, if enacted into law, make significant changes to tax laws, including to certain key federal and state income tax provisions currently applicable to oil and natural gas exploration and development companies.

Such legislative changes have included, but have not been limited to, (i) the elimination of the percentage depletion allowance for oil and natural gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, (iii) an extension of the amortization period for certain geological and geophysical expenditures, (iv) the elimination of certain other tax deductions and relief previously available to oil and natural gas companies, and (v) an increase in the federal income tax rate applicable to corporations such as us.

It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.

It is unclear

whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.

Additionally, states in which we operate or own assets may impose new or increased taxes or fees on oil and natural gas extraction.

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The legislation and regulations related to unclaimed property matters are complex and subject to varying interpretations by state governmental authorities.

New climate disclosure rules proposed by the SEC may increase our costs of compliance and adversely impact our

On March 6, 2024, the SEC adopted new rules relating to the disclosure of a range of climate-related risks.

We are currently assessing the final rule, but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the rule.

As a result of this rule, we could incur increased costs relating to the assessment and disclosure of climate-related risks, including increased legal, accounting and financial compliance costs, as well as making some activities more difficult, time-consuming and costly, and placing strain on our personnel, systems, and resources.

We may also face increased litigation risks related to disclosures made pursuant to the rule.

In addition, enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon-intensive sectors.

Risks Relating to Our Capital Structure

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As of December 31, 2024, $385 million was outstanding on our Credit Facility.

further utilize this facility, the level of our indebtedness could affect our operations in several ways, including the following:

If we further utilize this facility, the level of our indebtedness could affect our operations in several ways, including the following:

• a significant portion of our cash flow would need to be used to service the indebtedness;

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Our plans for growth may include accessing the capital markets.

Recent reluctance to invest in the exploration and production sector based on market volatility, historically perceived underperformance, and ESG trends, among other things, has raised concerns regarding capital availability for the sector.

Recent reluctance to invest in the exploration and production sector based on market volatility, historically perceived underperformance, and ESG trends, among other

things, has raised concerns regarding capital availability for the sector.

If those markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, we may be unable to implement all of our development plans, make acquisitions, or otherwise carry out our business strategy, which would have a material adverse effect on our financial condition and results of operations, and impair our ability to service our indebtedness.

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We rely on computer and telecommunications systems, and failures in our systems or cyber security attacks or breaches could result in information theft, data corruption, disruption in operations, and/or financial loss.

The oil and natural gas industry has become increasingly dependent upon digital technologies to conduct day-to-day operations including certain exploration, development, and production activities.

The oil and natural gas industry is highly dependent upon digital technologies to conduct day-to-day operations including certain exploration, development, and production activities.

We depend on digital technology to process and record financial and operating data, estimate quantities of oil and natural gas reserves, analyze seismic and drilling information, process and store personally identifiable information on our employees and royalty owners, and communicate with our employees and other third parties.

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Although we utilize various procedures and controls to monitor and protect against these threats and mitigate our exposure to such threats, there can be no assurance that these procedures and controls will be sufficient in preventing security threats from materializing and causing us to suffer losses in the future.

destruction of proprietary or other information, or otherwise significantly disrupt our business operations.

As cyber threats 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 information security vulnerabilities.

In addition, weaknesses in the cyber security of our vendors, suppliers, and other business partners could facilitate an attack on our technologies, systems, and networks.

Even so, any cyber incidents or interruptions to our computing and communications infrastructure or our information systems could lead to data corruption, communication interruption, unauthorized release, gathering, monitoring, misuse, or destruction of proprietary or other information, or otherwise significantly disrupt our business operations.

In particular, our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our information, facilities, and infrastructure may result in increased capital and operating costs.

A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation, or 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.

While we maintain insurance that covers certain cybersecurity incidents, we may not be insured for, or our insurance may be insufficient to protect us against, particular types of cybersecurity risks, and, in the future, such insurance may not continue to be available to us on reasonable terms, if at all.

To date we have not experienced any material losses relating to cyber-attacks;

however, there can be no assurance that we will not suffer such losses in the future.

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.

Risks Relating to Our Common Stock

We have recently registered shares of our common stock for possible resale by certain of our stockholders, resulting in significant "market overhang" of our common stock.

We have registered shares of our common stock for possible resale by certain of our stockholders, resulting in significant "market overhang" of our common stock.

In connection with the Stronghold Acquisition completed in 2022, Warburg Pincus & Company US, LLC and its affiliates hold approximately 28.9 million shares of our common stock.

This represents approximately 23% of our presently outstanding shares of common stock and if the selling stockholders choose to sell all or a large number of their shares, from time to time, it likely would have a depressive effect on the market price of our common stock.

This represents approximately 14% of our presently

outstanding shares of common stock and if the selling stockholders choose to sell all or a large number of their shares, from time to time, it likely would have a depressive effect on the market price of our common stock.

Further, the market's perception of future sales of common stock may adversely affect the price of our common stock.

The market price of our common stock may be volatile, which could cause the value of your investment to decline.

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If the Board of Directors causes shares of preferred stock to be issued, the rights of the holders of our common stock could be adversely affected.

The board of director’s ability to determine the terms of preferred stock and to cause its issuance, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock.

The Board of Directors’ ability to determine the terms of preferred stock and to cause its issuance, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock.

Preferred shares issued by the Board of Directors could include voting rights, or even super voting rights, which could shift the ability to control the Company to the holders of the preferred stock.

Preferred shares could also have conversion rights into shares of common stock at a discount to the market price of the common stock which could

negatively affect the market for our common stock.

Preferred shares could also have conversion rights into shares of common stock at a discount to the market price of the common stock which could negatively affect the market for our common stock.

In addition, preferred shares would typically have preference in the event of liquidation of the Company, which means that the holders of preferred shares would be entitled to receive the net assets of the Company distributed in liquidation before the common stockholders receive any distribution of the liquidated assets.

1 unchanged sentence

Provisions under Nevada law could delay or prevent a change in control of our company, which could adversely affect the price of our common stock.

In addition to the ability of the board of directors to issue preferred stock, the existence of some provisions under Nevada law could delay or prevent a change in control of the Company, which could adversely affect the price of our common stock.

In addition to the ability of the Board of Directors to issue preferred stock, the existence of some provisions under Nevada law could delay or prevent a change in control of the Company, which could adversely affect the price of our

common stock.

Nevada law imposes some restrictions on mergers and other business combinations between us and any holder of 10% or more of our outstanding common stock.

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

What changed 10-K

Item 1A. Risk Factors