SPND 10-K & 10-Q changes, risk factors and insider trading
Spindletop Oil & Gas Co. · OTC · Crude Petroleum & Natural Gas · CIK 867038 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Warning! Limited Information”
New heading “The Pink Limited Market is for broker-dealers to publicly quote securities with limited to no issuer involvement. Pink Limited companies do not certify their compliance with established reporting standards, have limited availability of disclosure or financial information and may not support their U.S. market. These securities are identified with a yield sign to warn investors to proceed with caution.”
New heading “Due to factors beyond our control, our stock price may be volatile:”
Largest changes
“The Pink Limited Market is for broker-dealers to publicly quote securities with limited to no issuer involvement. Pink Limited companies do not certify their compliance with established reporting standards, have limited availability of disclosure or financial information and may not support their U.S. market. These securities are identified with a yield sign to warn investors to proceed with caution.”see in full comparison
Our common stocksee in full comparisoniswas downgradedtraded onto the Over-the-Counter Pink Limited market and is currently quoted on the OTCMarketsPinkCurrent,Limited market, symbol "SPND".ProjectedRecent Changes to OTC Markets could adversely affect trading of the Company’s stock:
“The Company’s stock is currently traded on OTC Markets Pink Current market. By Notice dated January 14, 2025, OTC Markets advised the Company that OTC Markets will discontinue the Pink Current market at the end of June 2025. OTC Markets advised the Company that the Pink Current market is to be replaced with a new market to be called OTCID. According to OTC Markets, there is to be a required application as well as a number of other items (including fees, and additional disclosures) required in order for entities to be admitted to OTCID by OTC Markets. …”see in full comparison
“Due to factors beyond our control, our stock price may be volatile:”see in full comparison
“Effective July 1, 2025, the Company’s stock was downgraded to the OTC Markets Pink Limited market. Now when someone goes to the OTC Markets website to get a quotation on the Company’s stock, the following is under the Company’s name and trading symbol with the term “Warning!” in bold and red print:”see in full comparison
Full comparison: every changed paragraph (26)
We are exposed to global health, political, economic and market risks that are beyond our control, which could adversely and significantly affect our financial results, financial condition, results of operations, and capital requirements.
Prices for oil and natural gas fluctuate widely due to a number of factors that are beyond our control. Declines in oil and natural gas prices significantly affect our financial condition and results of operations. Our revenues, profitability and cash flow are highly dependent upon the prices we realize from the sale of oil, natural gas and NGLs. Historically, the markets for these commodities are very volatile. Prices for oil, natural gas and NGLs can move quickly and fluctuate widely in response to a variety of factors that are beyond our control. These factors include, among others:
Prices for oil and natural gas fluctuate widely. Among the interrelated
factors that can or could cause these price fluctuations are:
The vast majority of our oil and natural gas
reserves are classified as
proved reserves. Recovery of the Company's future proved undeveloped reserves will require significant capital
expenditures. Our management
estimates that additional capital expenditures will be required to fully develop some of these reserves
in the next twelve-month period.
No assurance can be given that our estimates of capital expenditures will prove accurate that our financing
sources will be sufficient
to fully fund our planned development activities or that development activities will be either successful
or in accordance with our schedule.
Additionally, any significant decrease in oil and natural gas prices or any significant increase
in the cost of development could result
in a significant reduction in the number of wells drilled and/or reworked. No assurance can be given that any wells will produce oil or
natural gas in commercially profitable quantities.
No assurance can be given that any wells will produce oil or natural gas in commercially profitable quantities.
We do not operate some of the properties in
which we have an interest, and
we have limited ability to exercise influence over operations for these properties or their associated
costs. As of December 31, 2024,
2025, approximately 37%23% of our crude oil and natural gas proved reserves were operated by other companies.
Our dependence on other operators
and other working interestworking-interest owners for these projects and our limited ability to influence operations
and associated costs could materially
adversely affect the realization of our targeted return on capital in drilling or acquisition activities
and our targeted production growth
rate. The success and timing of drilling, development and exploitation activities on properties operated
by others depend on a number
of factors that are beyond our control, including the operator’s expertise and financial resources,
approval of other participants
for drilling wells and utilization of technology.
If we lose the services of our key management
personnel, technical experts
or are unable to attract additional qualified personnel, our business, financial condition, results of operations,
development efforts
and ability to grow could suffer. We have assembled a team of engineers, landmen, and geologists who have considerable
experience in drilling
and completion techniques to explore for and to develop crude oil and natural gas. We depend upon the knowledge,
skill, and experience
of these experts to assist us in improving the performance and reducing the risks associated with our participation
in crude oil and natural
gas exploration and development projects. In addition, the success of our business depends, to a significant
extent, upon the abilities
and continued efforts of our management, particularly Chris Mazzini, our Chief Executive Officer, President,
and Chairman of the Board.
We do not have an employment agreement with or key-man life insurance on Mr. Mazzini or any of our other key
employees. Many of our key
personnel are either currently eligible for retirement or will become eligible in the next one to fivefour years.
The Company does not have
a succession plan in place for key management and technical personnel replacements.
The average age of the employee base of the Company has been increasing
for several years, with a number of employees either currently eligible to retire or becoming eligible to retire within the next one to
four years. In addition, several seasoned employees as well as outside contractors have recently indicated that they plan to retire in
the very near future which could result in a knowledge and experience gap that may be extremely difficult to replace. If we are unable
to hire appropriate personnel to fill future needs, the Company could encounter operating challenges and
increased costs, primarily due
to a loss of knowledge, errors due to inexperience or the lengthy time typically required to adequately
train replacement personnel. In
addition, addition,significantly higher costs could result from the increased use of contractors to replace retiring employees,
loss of productivity
or increased safety compliance issues. The inability to hire, train and retain new operational, technical, and managerial
personnel adequately
and to transfer institutional knowledge and expertise could adversely affect our ability to manage and operate our business, including
business.impairing our ability to prepare and file required financial and other reports. If we were unable to hire, train and retain appropriately
qualified personnel, our results of operations could be adversely
affected.
Our common stock iswas
downgraded traded onto the Over-the-Counter Pink Limited market and is
currently quoted on the OTC Markets Pink Current,Limited market, symbol "SPND". Projected
Recent Changes to OTC Markets could adversely affect
trading of the Company’s stock:
Effective July 1, 2025, the Company’s stock was downgraded to the OTC Markets Pink Limited market. Now when someone goes to the OTC Markets website to get a quotation on the Company’s stock, the following is under the Company’s name and trading symbol with the term “Warning!” in bold and red print:
Warning! Limited Information
The Pink Limited Market is for broker-dealers to publicly quote securities with limited to no issuer involvement. Pink Limited companies do not certify their compliance with established reporting standards, have limited availability of disclosure or financial information and may not support their U.S. market. These securities are identified with a yield sign to warn investors to proceed with caution.
The downgrade of the Company’s stock to the OTC Markets Pink Limited market with the above Warning section and the cautionary Yield symbol will likely impact an investor’s ability to trade the Company’s stock.
The Company’s stock is currently traded on OTC Markets Pink Current
market. By Notice dated January 14, 2025, OTC Markets advised the Company that OTC Markets will discontinue the Pink Current market at
the end of June 2025. OTC Markets advised the Company that the Pink Current market is to be replaced with a new market to be called OTCID.
According to OTC Markets, there is to be a required application as well as a number of other items (including fees, and additional disclosures)
required in order for entities to be admitted to OTCID by OTC Markets. OTC Markets has stated that under the new market structure, a new
Pink Limited market will identify entities that have not been admitted to OTCID which will have their market quotations marked with a
Yield sign to warn investors of heightened risk. According to OTC Markets, it appears that the Company’s only option is to either
apply for admission and be accepted to the OTCID or the quotations for the Company’s stock will be downgraded to either the OTC
Markets Pink Limited market or OTC Markets Expert market, which would likely adversely impact an investor’s ability to trade the
Company’s stock. Management is currently reviewing the new OTC Markets OTCID market application, requirements, disclosures, fees
and associated costs, but at this time, management does not have any plans to apply for the new OTCID market created by OTC Markets.
The liquidity of
our common stock will likely be adversely affected, and
purchasers of our common stock could have difficulty selling our common stock ifsince our
common stock ishas downgradedbeen transferred to either the OTC Markets
Pink Limited market or OTC Markets Expert market.
There is presently only a limited public market for our common stock, and there is no assurance that a ready public market for our securities will ever develop.
It is likely that any market for our common stock will be highly volatile and that the trading volume in such market will be limited and controlled by broker-dealers setting what could be an arbitrary price for the Company’s stock.
Due to factors beyond our control, our stock price may be volatile:
Trading in our common stock is very limited and sporadic. Also, the OTC Pink Limited market is generally illiquid.
There is presently only a limited public market for our common stock, and
there is no assurance that a ready public market for our securities will develop. It is likely that any market that develops for our common
stock will be highly volatile and that the trading volume in such market will be limited. The trading price
of our common stock also could
be subject to wide fluctuations in response to quarter-to-quarter variations in our operating results, announcements
of our drilling results,
fluctuations in oil and natural gas prices, and other events or factors. In addition, the United States stock
market has from time-to-time
experienced extreme price and volume fluctuations that have affected the market price for many companies companies,
and which often have been unrelated
to the operating performance of these companies. These broad market fluctuations may adversely affect
the market price of our securities.
Our company employees and contract land professionals
have reviewed title
records or other title review materials relating to substantially all our producing properties. The title investigation
performed by us
prior to acquiring undeveloped properties is thorough, but less rigorous than that conducted prior to drilling, consistent
with industry
standards. We believe we have satisfactory title to all our producing properties in accordance with standards generally
accepted in the
oil and gas industry. Our properties are subject to customary royalty interests, liens incident to operating agreements,
liens for current
taxes and other burdens, which we believe do not materially interfere with the use of or affect the value of such properties.
At December
31, 2024,2025, our leaseholds for some of our net acreage were being kept in force by virtue of production on that acreage in
paying quantities.
The remaining net acreage was held by lease rentals and similar provisions and requires production in paying quantities
prior to expiration
of various time periods to avoid lease termination. Any loss of leasehold interests, whether due to title defects,
failure to maintain production, or the operation of the lease provisions, could have a material adverse effect on the Company’s
business, financial condition and results of operations.
Our business is highly capital-intensive,
requiring continuous development
and acquisition of oil and gas reserves. In addition, capital is required to operate and expand our
oil and natural gas field operations
and purchase equipment. On December 31, 2024,2025, we had negative working capital of $1,923,000.$404,000. We anticipate
that we will be able to meet our cash
requirements for the next 12 months. However, if such plans or assumptions change or prove to be
inaccurate, we could be required to seek
additional financing sooner than currently anticipated.
We are responsible for payment of plugging and abandonment costs on our oil and gas properties pro rata to our working interest.
Recently, the Company has experienced significant increases in costs and regulatory requirements of certain regulatory agencies relating to plugging and surface reclamation requirements. Regulatory agencies are significantly increasing plugging and surface reclamation requirements as well as placing greater pressure on operators to accelerate the plugging, abandonment, and surface site reclamation of shut-in wells compared to prior years.
WeSome regulatory agencies are responsiblesignificantly
increasing forthe paymentamounts of required plugging bonds, letters of credit, and abandonmentother costsdeposits. Based on ourthe above, in 2025, the Company adjusted
oilupwards the amount of estimated plugging, abandonment, and gassurface propertiessite proreclamation rata to our working interest.costs. Based on our experience, we anticipate that
in most cases, the costs of abandoning
plugging such properties will range from $50,000$60,000 to $200,000$250,000 or more per well. This may not include land
reclamation requirements that could cost as much or more than the plugging costs. In addition, abandonment costs and their timing may
change due to
many factors, including actual production results, inflation rates and changes in environmental laws and regulations.
We generate typical oil and gas field wastes,
including hazardous wastes
that are subject to the Federal Resources Conservation and Recovery Act and comparable state statutes. The
United States Environmental
Protection Agency and various state agencies have limited the approved methods of disposal for certain hazardous
and non-hazardous wastes.
Furthermore, certain wastes generated by our oil and gas operations that are currently exempt from regulation
as "hazardous wastes"
may in the future be designated as "hazardous wastes", and therefore be subject to more rigorous
and costly operating and disposal
requirements.
Management's Discussion & Analysis (MD&A)
Largest changes
“Interest income for 2023 was approximately $761,000, an increase of $619,000 from $142,000 in 2022. Interest income is derived from investments in both short-term and long-term certificates of deposit as well as money market accounts at banks. This increase is primarily due to the overall general increase in interest rates during 2023.”see in full comparison
“Depreciation and amortization expense for 2025 was $397,000 compared to $358,000 for 2024, an increase of approximately $39,000 or 10.89%. Amortization of the full cost pool for crude oil and natural gas assets for 2025 was $284,000, as compared to $240,000 for the year 2024, an increase of $44,000 or 18.33%. …”see in full comparison
“Asset Retirement Obligation (“ARO”) accretion expense for 2023 was $509,000 down from $2,014,000 in 2022, a decrease of $1,505,000. The ARO calculation is an estimate based on the Company’s annual reserve report and takes into consideration the changes between years of the Company’s estimated obligation to plug its interests in existing wells. This estimated future plugging cost is discounted using a 10% discount factor based on the estimated life of each property. Changes are incorporated as applicable into the full cost pool and the carrying value of the liability. …”see in full comparison
“Depreciation and amortization expense for 2023 was $229,000 compared to $74,000 for 2022, an increase of approximately $155,000 or 209.6%. Amortization of the full cost pool for crude oil and natural gas assets for 2023 was $134,000, as compared to no amortization for the year 2022, an increase of $134,000. The Company re-evaluated its proved oil and gas reserves as of December 31, 2023, and decreased its estimated total proved reserves by approximately 431,000 BOE to 415,000 BOE at the end of 2023 compared to 846,000 BOE at the end of 2022, a decrease of approximately 51.0%. …”see in full comparison
“Lease operating expenses in 2025 were $1,485,000 as compared to $1,841,000 in 2024, a net decrease of approximately $356,000, or 19.34%. There were both increases and decreases within different segment categories of lease operating expenses. Amounts billed by third-party operators as operating expenses on non-operated properties represented approximately 29% of the 2025 amount and 26% of the total 2024 amount with the remaining representing net increases and decreases on various operated properties due to general service cost fluctuations and levels of operational activity.”see in full comparison
“Lease operating expenses 2023 were $1,469,000 as compared to $2,120,000 in 2022, a net decrease of approximately $651,000, or 30.7%. There were both increases and decreases within different segment categories of lease operating expenses. Amounts billed by third-party operators as operating expenses on non-operated properties represented approximately 33% of the total 2023 amount with the remaining representing net increases and decreases on various operated properties due to general service cost fluctuations and levels of operational activity.”see in full comparison
Full comparison: every changed paragraph (36)
During the year ended December
31, 2025, average quarterly crude oil prices per bbl for the Company were $72.85, $63.22, $63.02, and $58.77. During the year ended December
31, 2024, average quarterly crude oil prices
per bbl for the Company were $72.96, $79.26, $74.56, and $68.22 respectively. During the
year ended December 31, 2023, average quarterly
crude oil prices per bbl for the Company were $73.44, $71.89, $72.66, and $77.73 respectively. During the year ended December 31, 2022,
average quarterly crude oil prices per bbl for the Company were $71.34, $83.94, $94.15, and $80.80.
During the year ended December
31, 2025, average quarterly natural gas prices per mcf for the Company were $3.58, $2.94, $2.87, and $3.28. `During the year ended December
31, 2024, average quarterly natural gas prices
per mcf for the Company were $2.73, $2.07, $2.24, and $2.45 respectively. During the year
ended December 31, 2023, average quarterly natural
gas prices per mcf for the Company were $3.70, $2.53, $2.49, and $2.63. During the year ended December 31, 2022, average quarterly natural
gas prices per mcf for the Company were $5.67, $6.25, $7.81, and $5.92.
As noted in our Results of Operations discussion
below, the Company has
focused on lowering costs through headcount reduction by attrition and spending only on essential general and
administrative expenditures.
To raise additional revenue, the Company is pursuing the acquisition of new operated and non-operated reserves
through acquisitions of
producing properties and drilling ventures. The Company believes that it is well positioned to take advantage
of the declining prices
for existing wells with its cash reserves and ability to borrow to effectaffect any acquisition.
2025 Compared to 2024
Oil and natural gas revenues for the year ended December 31, 2025, were $3,829,000 compared to $3,659,000 for the year ended December 31, 2024, an increase of $170,000 or 4.65%.
Oil revenue for 2025 was approximately $1,908,000 compared to $2,346,000 for 2024, a decrease of approximately $438,000 or 18.67%. Oil sales decreased to approximately 27,400 barrels from approximately 28,300 barrels in 2024, a decrease of approximately 900 barrels or 3.18%. Oil prices decreased to an average of $62.99 per barrel in 2025 from an average of $74.13 per barrel in 2024, a decrease of $11.14 per barrel or 15.03%.
Natural gas revenue for 2025 was approximately $1,921,000 compared to $1,313,000 for 2024, an increase of approximately $608,000 or 46.31%. Natural gas sales were approximately 597,300 mcf in 2025, up from approximately 539,000 mcf in 2024, an increase of approximately 58,300 mcf or 10.82%. Natural gas prices increased to an average of $3.22 per mcf in 2025, an increase of $0.78 or 32.0% from an average of $2.44 per mcf in 2024.
Revenue from lease operations was approximately $175,000 for 2025, compared to approximately $168,000 in 2024, an increase of approximately $7,000 or 4.17%. Revenue from lease operations results from field supervision charges on operated wells as well as administrative overhead billed to working interest owners.
Revenues from gas gathering, compression, and equipment rental for 2025 were approximately $71,000, a decrease of approximately $51,000 or 41.80% from approximately $122,000 in 2024.
Real estate rental revenue for 2025 was approximately $288,000, an increase of approximately $33,000 or 12.94% from approximately $255,000 in 2024.
Interest income for 2025 was approximately $825,000, a decrease of $132,000 or 13.79% from $957,000 in 2024. Interest income is derived from investments in both short-term and long-term certificates of deposit as well as money market accounts at banks.
Miscellaneous Revenue for 2025 was $79,000, as compared to $51,000 in 2024, an increase of $28,000 or 54.90%.
Lease operating expenses in 2025 were $1,485,000 as compared to $1,841,000 in 2024, a net decrease of approximately $356,000, or 19.34%. There were both increases and decreases within different segment categories of lease operating expenses. Amounts billed by third-party operators as operating expenses on non-operated properties represented approximately 29% of the 2025 amount and 26% of the total 2024 amount with the remaining representing net increases and decreases on various operated properties due to general service cost fluctuations and levels of operational activity.
Production taxes, gathering, and marketing expenses for 2025 were approximately $574,000 compared to $633,000 in 2024, a decrease of approximately $59,000, or 9.32%.
Pipeline and rental expenses for 2025 were approximately $46,000 compared to approximately $19,000 for 2024, an increase of approximately $27,000, or 142.11%. Approximately $2,000 of this increase was for an increase of pipeline maintenance in 2024, and approximately $25,000 is due to increased compressor maintenance for the same period.
Real estate expenses in 2025 were approximately $194,000 compared to $135,000 during the same period in 2024, an increase of approximately $59,000 or 43.70%.
Depreciation and amortization expense for 2025 was $397,000 compared to $358,000 for 2024, an increase of approximately $39,000 or 10.89%. Amortization of the full cost pool for crude oil and natural gas assets for 2025 was $284,000, as compared to $240,000 for the year 2024, an increase of $44,000 or 18.33%. The Company re-evaluated its proved oil and gas reserves as of December 31, 2025, and increased its estimated total proved reserves by approximately 118,000 BOE to 524,000 BOE at the end of 2025 compared to 406,000 BOE at the end of 2024, an increase of approximately 29.06% Asset Retirement Obligation (“ARO”) accretion expense for 2025 was $1,544,000 up from $100,000 in 2024, an increase of $1,444,000. The ARO calculation is an estimate based on the Company’s annual reserve report and takes into consideration the changes between years of the Company’s estimated obligation to plug its interests in existing wells. This estimated future plugging cost is discounted using an 8.75% discount factor based on the estimated life of each property. Changes are incorporated as applicable into the full cost pool and the carrying value of the liability. Accretion expense measures and incorporates changes due to the passage of time into the carrying amount of the liability. The large increase in the 2025 provision is made in view of significant increases of plugging costs observed during 2025. In addition, regulatory agencies are increasing pressure on operators to plug and abandon wells faster than in prior years, as well as increasing the amounts of required plugging bonds, letters of credit, and other deposits. Based on the above management has determined that a significant increase in the amount of estimated plugging costs is required for the 2025 ARO estimate. Management will continue to review each year’s provision and estimate whether or not the liability to plug and abandon its wells in the future should be increased.
General and administrative expenses for 2025 were approximately $3,483,000 as compared to approximately $2,944,000 for 2024, an increase of approximately $539,000 or 18.31%. The increase is due primarily to a contribution of $500,000 to a non-qualified deferred compensation plan.
Asset Retirement Obligation (“ARO”)
accretion expense for 2024
was $100,000 down from $509,000 in 2023, a decrease of $409,000. The ARO calculation is an estimate based
on the Company’s annual
reserve report and takes into consideration the changes between years of the Company’s estimated
obligation to plug its interests
in existing wells. This estimated future plugging cost is discounted using a 10% discount factor based
on the estimated life of each property.
Changes are incorporated as applicable into the full cost pool and the carrying value of the
liability. Accretion expense measures and
incorporates changes due to the passage of time into the carrying amount of the liability.
In view of increasing plugging costs and regulatory
agencies putting pressure on operators to plug and abandon wells faster than in prior
years, management will continue to review each year’s
provision and estimate whether or not the liability to plug and abandon its
wells in the future,future should be increased.
2023 Compared to 2022
Oil and natural gas revenues for the year ended December 31, 2023, were
$4,502,000 compared to $7,775,000 for the year ended December 31, 2022, a decrease of $3,273,000 or 42.1%.
Oil revenue for 2023 was approximately $2,711,000 compared to $3,583,000
for 2022, a decrease of approximately $872,000 or 24.4%. Oil sales decreased to approximately 33,500 barrels from approximately 35,700
barrels in 2022, a decrease of approximately 2,200 barrels or 6.3%. Oil prices decreased to an average of $74.79 per barrel in 2023 from
an average of $92.49 per barrel in 2022, a decrease of $17.70 per barrel or 19.14%.
Natural gas revenue for 2023 was approximately $1,791,000 compared to $4,192,000
for 2022, a decrease of approximately $2,401,000 or 57.3%. Natural gas sales were approximately 608,500 mcf in 2023 from approximately
653,000 mcf in 2022, a decrease of approximately 44,500 mcf or 6.8%. Natural gas prices decreased to an average of $2.94 per mcf in 2023
a decrease of $3.48 or 54.2% from an average of $6.42 per mcf in 2022.
In general, revenues from oil and natural gas producing operations experienced
a significant decrease for the year ending December 31, 2023, as compared to the same period in 2022. These decreases resulted in part
from decreased oil and natural gas prices, as well as decreases in oil and natural gas production.
Revenue from lease operations was approximately $156,000 for 2023, compared
to approximately $183,000 in 2022, a decrease of approximately $27,000 or 14.8%. Revenue from lease operations results from field supervision
charges on operated wells as well as administrative overhead billed to working interest owners.
Revenues from gas gathering, compression, and equipment rental for 2023
were approximately $120,000, an increase of approximately $31,000 or 34.8% from approximately $89,000 in 2022. This increase is due primarily
to the addition of two new rental compressors during 2023.
Real estate rental revenue for 2023 was approximately $270,000, an increase
of approximately $25,000 or 10.2% from approximately $245,000 in 2022. This increase was due to a new tenant rent for a full year in 2023
and due to rental rate increases.
Interest income for 2023 was approximately $761,000, an increase of $619,000
from $142,000 in 2022. Interest income is derived from investments in both short-term and long-term certificates of deposit as well as
money market accounts at banks. This increase is primarily due to the overall general increase in interest rates during 2023.
Miscellaneous revenue for 2023 was $57,000, as compared to $62,000 in 2022,
a decrease of $5,000 or 8.1%.
Lease operating expenses 2023 were $1,469,000 as compared to $2,120,000
in 2022, a net decrease of approximately $651,000, or 30.7%. There were both increases and decreases within different segment categories
of lease operating expenses. Amounts billed by third-party operators as operating expenses on non-operated properties represented approximately
33% of the total 2023 amount with the remaining representing net increases and decreases on various operated properties due to general
service cost fluctuations and levels of operational activity.
Production taxes, gathering, and marketing expenses for 2023 were approximately
$701,000 compared to $867,000 in 2022, a decrease of approximately $166,000, or 19.2%. These expenses relate directly to the overall decrease
in crude oil and natural gas production and revenues.
Pipeline and rental expenses for 2023 were approximately $54,000 compared
to approximately $21,000 for 2022, an increase of approximately $33,000, or 157.1%. Approximately $19,000 of this amount was for an increase
of pipeline maintenance over 2022, and approximately $14,000 is due to increased compressor maintenance for the same period.
Real estate expenses in 2023 were approximately $161,000 compared to $174,000
during the same period in 2022, a decrease of approximately $13,000 or 7.5%.
Depreciation and amortization expense for 2023 was $229,000 compared to
$74,000 for 2022, an increase of approximately $155,000 or 209.6%. Amortization of the full cost pool for crude oil and natural gas assets
for 2023 was $134,000, as compared to no amortization for the year 2022, an increase of $134,000. The Company re-evaluated its proved
oil and gas reserves as of December 31, 2023, and decreased its estimated total proved reserves by approximately 431,000 BOE to 415,000
BOE at the end of 2023 compared to 846,000 BOE at the end of 2022, a decrease of approximately 51.0%. The net decrease in the unamortized
full cost pool base, is due primarily to credits to the full cost pool from the sale of properties during 2022 in accordance with full
cost accounting procedures and the related reduction of liabilities in the recalculation of the Asset Retirement Obligation. (See Footnote
17 to the Financial Statements).
Asset Retirement Obligation (“ARO”) accretion expense for 2023
was $509,000 down from $2,014,000 in 2022, a decrease of $1,505,000. The ARO calculation is an estimate based on the Company’s annual
reserve report and takes into consideration the changes between years of the Company’s estimated obligation to plug its interests
in existing wells. This estimated future plugging cost is discounted using a 10% discount factor based on the estimated life of each property.
Changes are incorporated as applicable into the full cost pool and the carrying value of the liability. Accretion expense measures and
incorporates changes due to the passage of time into the carrying amount of the liability. In view of increasing plugging costs and regulatory
agencies putting pressure on operators to plug and abandon wells faster than in prior years, management evaluated this year’s provision
and estimated that the liability to plug and abandon its wells in the future, should be increased.
General and administrative expenses for 2023 were approximately $2,970,000
as compared to approximately $3,126,000 for 2022, a decrease of approximately $156,000 or 5.0%. A portion of the decrease between years
is the result of a bad debt expense relating to a third-party working interest owner written off in 2022, leaving an overall increase
of approximately $14,000 between years.
What changed in the latest 10-Q
Risk Factors
Full comparison: every changed paragraph (1)
Effective July 1, 2025, the Company’s stock was downgraded to the OTC Markets Pink Limited market. Now when someone goes to the OTC Markets website to get a quotation on the Company’s stock, the following is under the Company’s name and trading symbol with the term “Warning!” in bold and red print :
Management's Discussion & Analysis (MD&A)
Removed heading “Results of Operations”
Largest changes
“Depreciation, depletion, and amortization expenses for the first six months of 2026 were $148,000 as compared to $188,000 for the same period in 2025, a decrease of $40,000 or 21.3%. $92,000 of the amount for the first six months of 2026 was for amortization of the full cost pool of capitalized costs compared to $130,000 for the same period of 2025, a decrease of $38,000. The Company re-evaluated its proved oil and natural gas reserve quantities as of December 31, 2025. …”see in full comparison
“Depreciation, depletion, and amortization expenses for the second quarter of 2026 were $52,000 as compared to $142,000 for the same period in 2025, a decrease of $90,000 or 63.4%. $24,000 of the amount for the second quarter of 2026 was for amortization of the full cost pool of capitalized costs compared to $112,000 for the same period of 2025, a decrease of $88,000. The Company re-evaluated its proved oil and natural gas reserve quantities as of December 31, 2025. …”see in full comparison
“Depreciation, depletion, and amortization expenses for the first three months of 2026 were $96,000 as compared to $46,000 for the same period in 2025, an increase of $50,000, or 108.7%. Amortization of the amount for the full cost pool for the first three months of 2026 was $68,000 compared to $17,000 for the same period of 2025. The Company re-evaluated its proved oil and natural gas reserve quantities as of December 31,2025. …”see in full comparison
Oil sales for the firstsee in full comparisonthreesix months of 2026 were approximately$576,000$1,925,000 compared to approximately$533,000$987,000 for the firstthreesix months of 2025, an increase of approximately$43,000$859,000 or8.1%.87.1%. Oil sales volumes for the firstthreesix months of 2026 were approximately8,34623,180bbls,bbls compared to approximately6,73413,500 bbls during the same period in 2025, an increase of approximately1,6129,680bbls,bbls or23.9%,71.7%.AverageThe increase is primarily due to additional oilpricesproductionreceivedfromwerewells$64.79broughtperonline inbbl2026 and an increase intheoilfirst three months of 2026 compared to $72.85 per bbl in the first three months of 2025, a decrease of approximately $8.06 per bbl or 11.1%.prices.
“Oil sales for the second quarter of 2026 were approximately $1,349,000 compared to approximately $454,000 for the same period of 2025, an increase of approximately $895,000 or 197.1%. Oil volumes sold for the second quarter of 2026 were approximately 14,830 bbls compared to approximately 8,760 bbls during the same period of 2025, an increase of approximately 6,070 bbl or 69.3%. The increase is primarily due to additional oil production from wells brought online in 2026 and an increase in oil prices.”see in full comparison
Full comparison: every changed paragraph (47)
Results of Operations
ThreeSix months ended MarchJune 31,30, 2026, compared to the threesix months ended
March 31,June 30, 2025 Oil and gas revenues for the first threesix months of 2026 were $1,181,000,
$2,987,000, as compared to $1,052,000$1,928,000 for the same period in 2025, an increase
of approximately $129,000$1,059,000 or 12.3%.54.9%. The increase is due to additional production from wells brought online in 2026 and an increase in
oil and natural gas prices.
Oil sales for the first threesix months of 2026 were approximately $576,000$1,925,000
compared to approximately $533,000$987,000 for the first threesix months of 2025, an increase of approximately $43,000$859,000 or 8.1%.87.1%. Oil sales volumes
for the first threesix months of 2026 were approximately 8,34623,180 bbls,bbls compared to approximately 6,73413,500 bbls during the same period in 2025,
an increase of approximately 1,6129,680 bbls,bbls or 23.9%,71.7%. AverageThe increase is primarily due to additional oil pricesproduction receivedfrom werewells $64.79brought peronline
in bbl2026 and an increase in theoil first three months
of 2026 compared to $72.85 per bbl in the first three months of 2025, a decrease of approximately $8.06 per bbl or 11.1%.prices.
Natural gas revenues for the first three months of 2026 were $605,000 compared
to $519,000 for the same period in 2025, an increase of approximately $86,000 or 16.6%. Natural gas sales volumes for the first three
months of 2026 were approximately 144,000 mcf compared to approximately 145,000 mcf during the first three months of 2025, a decrease
of approximately 1,000 mcf or 0.7%.
Average gross natural gasoil prices received were $4.47$79.64 per mcfbbl in the first
three monthshalf of 2026 as
compared to $3.58$66.64 per mcfbbl in the samefirst timehalf period inof 2025, an increase of approximately $0.89$13.00 per mcfbbl or 24.7%.19.5%.
Revenues from lease operations were $41,000 in the first three months of
2026 compared to $43,000 in the first three months of 2025, a decrease of approximately $2,000 or 4.7%. Revenues from lease operations
are derived from field supervision charged to operated leases along with operator overhead charged to operated leases.
Revenues from gas gathering, compression and equipment rental for the first
three months of 2026 were $24,000 compared to $18,000 for the same period in 2025, an increase of approximately $6,000 or 33.3%. These
revenues are derived from gas volumes produced and transported through the Company owned gas gathering systems.
Real estate revenue was approximately $64,000 during the first three months
of 2026 compared to $71,000 for the first three months of 2025, a decrease of approximately $7,000, or 9.9%.
Interest income was $168,000 during the first three months of 2026 as compared
to $208,000 during the same period in 2025, a decrease of approximately $40,000 or 19.2%. Interest income is due to the Company investing
its funds in both long-term and short-term certificates of deposit accounts paying higher rates of interest than those received in money
market accounts.
Other revenues for the first three months of 2026 were $11,000 as compared
to $11,000 for the same period in 2025.
Lease operating expenses in the first three months of 2026 were approximately
$204,000 as compared to $290,000 in the first three months of 2025, a net decrease of approximately $86,000, or 29.7%.
Production taxes, gathering and marketing expenses in the first three months
of 2026 were approximately $158,000 as compared to $141,000 for the first three months of 2025, an increase of approximately $17,000 or
12.1%.
Pipeline and rental expenses for the first three months of 2026 were
$3,000 compared to $13,000 for the same time period in 2025, a decrease of $10,000 or 76.9%.
Real estate expenses in the first three months of 2026 were approximately
$27,000 compared to $25,000 during the same period in 2025, an increase of approximately $2,000 or 8%.
Depreciation, depletion, and amortization expenses for the first three months
of 2026 were $96,000 as compared to $46,000 for the same period in 2025, an increase of $50,000, or 108.7%. Amortization of the amount
for the full cost pool for the first three months of 2026 was $68,000 compared to $17,000 for the same period of 2025. The Company re-evaluated
its proved oil and natural gas reserve quantities as of December 31,2025. This re-evaluated reserve base was reduced for oil and gas reserves
that were produced or sold during the first three months of 2026 and adjusted for newly acquired reserves or for changes in estimated
production curves and future price assumptions. A year-to-date depletion rate of 6.162% for the three months ended 2026 was applied to
the Company’s full cost pool of un-depleted capitalized oil and natural gas properties compared to a year-to-date rate of 2.266%
for the same period in 2025.
There was no additional adjustment to Asset Retirement Obligation (“ARO”)
expense for the first three months of 2026 as compared to no adjustment for the same period in 2025. The ARO expense is calculated to
be the discounted present value of the estimated future cost to plug and abandon the Company’s wells.
GeneralNatural andgas administrative expensesrevenue for the first threesix months of 2026 were
approximatelywas $712,000 as$1,062,000 compared
to approximately $721,000$941,000 for the same period in 2025, an increase of approximately $121,000 or 12.9%. Natural gas sales volumes for the first six months
of 2026 were approximately 291,300 mcf compared to approximately 293,800 mcf during the first six months of 2025, a decrease of approximately
2,500 $9,000mcf or 1.3%.0.9%.
Average natural gas prices received were $3.65 per mcf in the first six months of 2026 as compared to $3.20 per mcf for the same time period in 2025, an increase of approximately $0.45 per mcf or 14.1%.
Revenues from lease operations were $82,000 in the first six months of 2026 compared to $91,000 in the first six months of 2025, a decrease of approximately 9,000 or 9.9%. Revenues from lease operations are derived from field supervision along with operator overhead charged to operated leases.
Revenues from gas gathering, compression and equipment rental for the first six months of 2026 were $43,000 compared to $44,000 for the same period in 2025, a decrease of approximately $1,000 or 2.3%. These revenues are derived from gas produced and transported through our gas gathering systems.
Real estate revenue was approximately $131,000 during the first six months of 2026 compared to $142,000 for the first six months of 2025, a decrease of approximately $11,000, or 7.7%.
Interest income was $329,000 during the first six months of 2026 as compared to $420,000 during the same period in 2025, a decrease of approximately $91,000 or 21.7%. Interest income is derived from investments in both short-term and long-term certificates of deposit as well as money market accounts at banks.
Other revenues for the first six months of 2026 were $22,000 as compared to $30,000 for the same time period in 2025, a decrease of approximately $8,000 or 26.7%.
Lease operating expenses in the first six months of 2026 were $557,000 as compared to $587,000 in the first six months of 2025, a decrease of $30,000 or 5.1%.
Production taxes, gathering and marketing expenses in the first six months of 2026 were approximately $345,000 as compared to $281,000 for the first six months of 2025, an increase of approximately $64,000 or 22.8%.
Pipeline and rental expenses for the first six months of 2026 were $7,000 compared to $26,000 for the same time period in 2025, a decrease of approximately $19,000 or 73.1%. This decrease is due to compressor repairs in 2025.
Real estate expenses in the first six months of 2026 were approximately $48,000 compared to $49,000 during the same period in 2025, a decrease of approximately $1,000 or 2.0%.
Depreciation, depletion, and amortization expenses for the first six months of 2026 were $148,000 as compared to $188,000 for the same period in 2025, a decrease of $40,000 or 21.3%. $92,000 of the amount for the first six months of 2026 was for amortization of the full cost pool of capitalized costs compared to $130,000 for the same period of 2025, a decrease of $38,000. The Company re-evaluated its proved oil and natural gas reserve quantities as of December 31, 2025. This re-evaluated reserve base was reduced for oil and gas reserves that were produced or sold during the first six months of 2026 and adjusted for newly acquired reserves or for changes in estimated production curves and future price assumptions. A year-to-date depletion rate of 13.688% was calculated and applied to the Company’s full cost pool of capitalized oil and natural gas properties compared to a rate of 15.383% for the first two quarters of 2025.
There was no additional adjustment to Asset Retirement Obligation (“ARO”) expense for the first six months of 2026, or the same time period in 2025. The ARO expense is calculated to be the discounted present value of the estimated future cost to plug and abandon the Company’s wells. For 2026, this expense will be calculated annually at year-end.
General and administrative expenses for the first six months of 2026 were approximately $1,310,000 as compared to approximately $1,413,000 for the same period in 2025, a decrease of approximately $103,000 or 7.3%.
Three months ended June 30, 2026, compared to three months ended June 30, 2025 Oil and natural gas revenues for the three months ending June 30, 2026, were $1,806,000 compared to $876,000 for the same time period in 2025, an increase of $930,000 or 106.2%. The increase is due to additional production from wells brought online in 2026 and an increase in oil and natural gas prices.
Oil sales for the second quarter of 2026 were approximately $1,349,000 compared to approximately $454,000 for the same period of 2025, an increase of approximately $895,000 or 197.1%. Oil volumes sold for the second quarter of 2026 were approximately 14,830 bbls compared to approximately 8,760 bbls during the same period of 2025, an increase of approximately 6,070 bbl or 69.3%. The increase is primarily due to additional oil production from wells brought online in 2026 and an increase in oil prices.
Average oil prices received were approximately $85.64 per bbl in the second quarter of 2026 compared to $63.22 per bbl during the same period of 2025, an increase of approximately $22.42 per bbl, or 35.5%.
Natural gas revenues for the second quarter of 2026 were $457,000 compared to $422,000 for the same period in 2025, an increase of approximately $35,000 or 8.3%. Natural gas volumes sold for the second quarter of 2026 were approximately 147,300 mcf compared to approximately 176,000 mcf during the same period of 2025, a decrease of approximately 28,700 mcf or 16.3%.
Average natural gas prices received were approximately $3.10 per mcf in the second quarter of 2026 as compared to approximately $2.94 per mcf during the same period in 2025, an increase of approximately $0.16 or 5.5%.
Revenues from lease operations for the second quarter of 2026 were approximately $41,000 compared to approximately $48,000 for the second quarter of 2025, a decrease of approximately $7,000 or 14.6%. Revenues from lease operations are derived from field supervision charged to operated leases along with operator overhead charged to operated leases.
Revenues from gas gathering, compression and equipment rental for the second quarter of 2026 were approximately $19,000 compared to approximately $26,000 for the same period in 2025, a decrease of approximately $7,000 or 26.9%. These revenues are derived from gas volumes produced and transported through our gas gathering systems.
Real estate revenue was approximately $67,000 during the second quarter of 2026 compared to $71,000 for the same period in 2025, a decrease of approximately $4,000 or 5.6%.
Interest income for the second quarter of 2026 was approximately $161,000 as compared with approximately $212,000 for the same period in 2025, a decrease of approximately $51,000 or 24.1%. Interest income is derived from investments in both short-term and long-term certificates of deposit as well as money market accounts at banks.
Other revenues for the second quarter of 2026 were $11,000 as compared to $19,000 for the same time period in 2025, a decrease of approximately $8,000 or 42.1%.
Lease operating expenses in the second quarter of 2026 were $353,000 as compared to $297,000 in the second quarter of 2025, an increase of approximately $56,000 or 18.9%.
Production taxes, gathering, transportation and marketing expenses for the second quarter of 2026 were approximately $187,000 as compared to $140,000 during the second quarter of 2025, an increase of approximately $47,000 or 33.6%.
Pipeline and rental expenses for the second quarter of 2026 were $4,000 compared to $13,000 for the same time period in 2025, a decrease of approximately $9,000 or 69.2%. This decrease is due to compressor repairs in 2025.
Real estate expenses during the second quarter of 2026 were approximately $21,000 compared to approximately $24,000 for the same period in 2025, a decrease of approximately $3,000 or 12.5%.
Depreciation, depletion, and amortization expenses for the second quarter of 2026 were $52,000 as compared to $142,000 for the same period in 2025, a decrease of $90,000 or 63.4%. $24,000 of the amount for the second quarter of 2026 was for amortization of the full cost pool of capitalized costs compared to $112,000 for the same period of 2025, a decrease of $88,000. The Company re-evaluated its proved oil and natural gas reserve quantities as of December 31, 2025. This re-evaluated reserve base was reduced for oil and gas reserves that were produced or sold during the first six months of 2026 and adjusted for newly acquired reserves or for changes in estimated production curves and future price assumptions. A year-to-date depletion rate of 13.688% was calculated and applied to the Company’s full cost pool of capitalized oil and natural gas properties compared to a rate of 15.383% for the first two quarters of 2025.
There were no additional adjustments to the Asset Retirement Obligation (“ARO”) expense for the second quarter of 2026, or the same time period in 2025. The ARO expense is calculated to be the discounted present value of the estimated future cost to plug and abandon the Company’s producing wells. For 2026, this expense will be calculated annually at year-end.
General and administrative expenses for the second quarter of 2026 were $598,000 compared to $692,000 for the same period in 2025, a decrease of approximately $94,000 or 13.6%.
SPND insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding SPND (13F)
None of the 59 investors we track reported a position in their latest 13F.