What changed in this filing

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Item 1A. Risk Factors

2025-03-11 compared with 2024-03-07 · 20 added, 26 removed, 438 unchanged (10% of the section changed)

16 unchanged sentences

◦ We are subject to litigation and adverse outcomes in such litigation could have a material effect on our financial condition

◦ Changes affecting the availability of the London Inter-bank Offered Rate (“LIBOR”) may have consequences for us that cannot yet be reasonably predicted

◦ The present value of future net cash flows from our proved reserves are not the same as the current market value of our estimated oil, natural gas and NGL reserves

10 unchanged sentences

◦ Inflation may increase costs which can adversely impact cash flows and reserves value

◦ As we outsource functions, we are more dependent on the entities performing those functions.

Disruptions or delays at our third-party service providers could adversely impact our operations

25 unchanged sentences

• changes in regional, domestic and foreign supply of, and demand for, oil, natural gas and NGLs, as well as perceptions of supply of, and demand for, oil, natural gas and NGLs generally;

◦ the timing of planned United States' liquefied natural gas projects, data storage, electrification and other factors will impact demand for natural gas;

• the price and quantity of foreign imports;

46 unchanged sentences

• high costs, shortages or delivery delays of equipment, labor or other services, or water used in hydraulic fracturing;

• Offset activity by other operators could delay our operations or adversely affect results;

• compliance with environmental and other governmental requirements;

19 unchanged sentences

All of the foregoing may adversely affect our business, financial condition, results of operations, and cash flows.

Rising international tariffs could further contribute to economic uncertainty and market volatility.

In particular, the U.S.

government’s recent imposition of tariffs on all imported steel may increase the cost of materials and equipment essential to our drilling operations.

These higher costs could negatively impact our capital expenditures and the overall economics of our projects.

As a result, such tariffs could materially and adversely affect our business, financial condition, results of operations, and cash flows.

Future drilling activities face substantial uncertainties.

10 unchanged sentences

If we are unable to establish production in paying quantities on or renew such leases, those leases will expire, and we will lose our right to participate in the development of the subject leases, which may adversely affect our results of operations.

As of December 31, 2023, we hold 364,201 total net acres (including developed and undeveloped net acres), of which 26,070 net aces is undeveloped.

Of our undeveloped acreage, less than 5% are subject to expiration at the end of their primary terms.

As of December 31, 2024, we held 371,748 total net acres (including developed and undeveloped net acres), of which 37,269 net acres is undeveloped.

Of our net undeveloped acreage, 43% are subject to expiration at the end of their primary terms.

For additional information on our developed and undeveloped acreage please see the section “Item 1.

7 unchanged sentences

In particular, cash flow from operations were $73.9 million and $115.6 million for the years ended December 31, 2024 and 2023, respectively.

We are not actively trying to raise debt or equity capital at this time, with current projected activity for the year financed by cash flow from operations or cash held on the balance sheet.

While we may seek to raise debt or equity capital to fund high return projects or acquisitions, we expect our current projected activity for the year to be financed by cash flow from operations or cash held on the balance sheet.

However, a change in economic conditions or the need to access additional capital may be necessary in the future, and if the debt and capital markets are not accessible, we may be unable to implement our development plans or otherwise carry out our business strategy as expected.

15 unchanged sentences

Cumulative full cost ceiling impairment from the Emergence Date through December 31, 2024 totaled $947.1 million.

If oil, natural gas and NGL prices decline further in the near term, and without other mitigating circumstances, we may experience additional losses of future net revenues, including losses attributable to quantities that cannot be economically produced at lower prices, which would likely cause us to record additional write-downs of capitalized costs of oil and natural gas properties and non-cash charges against future earnings.

If oil, natural gas and NGL prices decline in the near term, and without other mitigating circumstances, we may experience additional losses of future net revenues, including losses attributable to quantities that cannot be economically produced at lower prices, which could cause us to record additional write-downs of capitalized costs of oil and natural gas properties and non-cash charges against future earnings.

The amount of such future write-downs and non-cash charges could be substantial.

8 unchanged sentences

The ability to attract and retain key personnel is critical to the success of our business and the loss of senior management or technical personnel or our inability to hire additional qualified personnel could adversely affect our operations.

The success of our business depends on key personnel, including members of senior management and technical personnel.

The ability to attract and retain these key personnel may be difficult in light of the uncertainties currently facing the business and changes we may make to the organizational structure to adjust to changing circumstances.

The success of our business depends on the continuity of information and processes, key personnel, including members of senior management and technical personnel.

The ability to attract and retain these key personnel may be difficult in light of the uncertainties currently facing the industry and changes we may make to the organizational structure to adjust to changing circumstances.

The market for qualified personnel has historically been, and we expect that it will continue to be, intensely competitive.

6 unchanged sentences

“Legal Proceedings” for additional information.

Changes affecting the availability of the London Inter-bank Offered Rate (“LIBOR”) may have consequences for us that cannot yet be reasonably predicted.

The LIBOR benchmark has been the subject of national, international and other regulatory guidance and proposals to reform.

In July 2017, the United Kingdom Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.

In March 2021, ICE Benchmark Administration, the administrator for LIBOR, ceased publishing United States Dollar LIBOR (“USD LIBOR”) for one week and two-month tenors after December 31, 2021, and confirmed its intention to cease all remaining USD LIBOR tenors after June 30, 2023.

Concurrently, the United Kingdom Financial Conduct Authority announced the cessation or loss of representativeness of the USD LIBOR tenors from those dates.

The Alternative Reference Rates Committee, a group of market participants convened by the United States Federal Reserve Board and the Federal Reserve Bank of New York, has recommended the Secured Overnight Financing Rate (“SOFR”), a rate calculated based on repurchase agreements backed by United States Treasury securities, as its recommended alternative benchmark rate to replace USD LIBOR.

At this time, it is not known whether or when SOFR or other alternative reference rates will attain market traction as replacements for LIBOR.

These reforms may cause LIBOR to perform differently than it has in the past, and LIBOR will cease to exist after June 30, 2023.

After the cessation of LIBOR, alternative benchmark rates will replace LIBOR and could affect our debt securities, debt payments and receipts.

At this time, it is not possible to predict the effect of any changes to LIBOR, any phase out of LIBOR or any establishment of alternative benchmark rates.

Any new benchmark rate will likely not replicate LIBOR exactly, which could impact our contracts that terminate after June 30, 2023.

There is uncertainty about how applicable law and the courts will address the replacement of LIBOR with alternative rates on variable rate retail loan contracts and other contracts that do not include alternative rate fallback provisions.

In addition, any changes to benchmark rates may have an uncertain impact on our cost of funds and our access to the capital markets, which could impact our results of operations and cash flows.

Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities.The full effects of the transition away from LIBOR remain uncertain.

The present value of future net cash flows from our proved reserves calculated in accordance with SEC guidelines are not the same as the current market value of our estimated oil, natural gas and NGL reserves.

76 unchanged sentences

Additionally, inflation can impact the economics of future projects which could result in reduced investment activity and our ability to offset natural declines.

As we outsource functions, we become more dependent on the entities performing those functions.

As we outsource functions, we are more dependent on the entities performing those functions.

Disruptions or delays at our third-party service providers could adversely impact our operations.

158 unchanged sentences

The Tax Benefits Preservation Plan was approved at the 2021 annual meeting of stockholders on May 25, 2021.

On June 14, 2023, our Board of Directors approved an amendment to the Tax Benefits Preservation Plan to extend the expiration time of the Tax Benefits Preservation Plan from July 1, 2023 to July 1, 2026.

The Company will submit this amendment to the Company’s stockholders for approval at our 2024 Annual Meeting.

On June 20, 2023, the Company entered into an amendment to the Tax Benefits Preservation Plan, approved by shareholders, to extend the expiration time of the Tax Benefits Preservation Plan from July 1, 2023 to July 1, 2026.

The Tax Benefits Preservation Plan is designed to reduce the likelihood of an “ownership change” as defined under Section 382 of the IRC in order to protect our NOLs by deterring any person or group from acquiring beneficial ownership of 4.9% or more of the Company’s securities.

However, there is no assurance that the Tax Benefits Preservation Plan will prevent all transfers that could result in such an “ownership change.”

The value of our NOLs and certain other tax benefits is also dependent upon the tax rates expected to be in effect at the time the taxable income is expected to be generated.

A decrease in enacted corporate tax rates in our major jurisdictions, especially the U.S.

federal corporate rate, would decrease the value of our deferred tax assets, which could be material.

Risks Relating to Our Common Stock

1 unchanged sentence

The Tax Benefits Preservation Plan was approved at the 2021 annual meeting of stockholders on May 25, 2021.

The Company will submit this amendment to the Company’s stockholders for approval at our 2024 Annual Meeting.

Each share of our common stock issued thereafter will also include one right.

13 unchanged sentences

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

What changed 10-K

Item 1A. Risk Factors