Document And Entity Information
v3.10.0.1
Document And Entity Information - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Mar. 25, 2019
Jun. 29, 2018
Document And Entity Information [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2018    
Document Fiscal Year Focus 2018    
Document Fiscal Period Focus FY    
Entity Registrant Name TENGASCO INC    
Entity Central Index Key 0001001614    
Entity Filer Category Smaller Reporting Company    
Entity Well-known Seasoned Issuer No    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Public Float     $ 3.9
Current Fiscal Year End Date --12-31    
Entity Common Stock, Shares Outstanding   10,644,252  

Consolidated Balance Sheets
v3.10.0.1
Consolidated Balance Sheets - USD ($)
Dec. 31, 2018
Dec. 31, 2017
Current    
Cash and cash equivalents $ 3,115,000 $ 185,000
Accounts receivable, less allowance for doubtful accounts of $0 and $14 533,000 517,000
Accounts receivable - related party, less allowance for doubtful accounts of $0 and $159
Inventory 464,000 541,000
Prepaid expenses 235,000 130,000
Discontinued operations included in current assets   121,000
Total current assets 4,347,000 1,494,000
Loan fees, net 9,000 13,000
Oil and gas properties, net (full cost accounting method) 4,804,000 4,720,000
Other property and equipment, net 190,000 135,000
Accounts receivable - noncurrent 130,000 242,000
Other noncurrent assets 4,000 4,000
Discontinued operations included in non-current assets   1,497,000
Total assets 9,484,000 8,105,000
Current liabilities    
Accounts payable - trade 132,000 181,000
Accounts payable - other   159,000
Accrued liabilities 282,000 187,000
Current maturities of long-term debt 51,000 41,000
Asset retirement obligation - current 83,000  
Discontinued operations included in current liabilities   43,000
Total current liabilities 548,000 611,000
Asset retirement obligation - non current 2,096,000 2,270,000
Long term debt, less current maturities 73,000 49,000
Total liabilities 2,717,000 2,930,000
Commitments and contingencies (Note 9)
Preferred stock, 25,000,000 shares authorized:    
Series A Preferred stock, $0.0001 par value, 10,000 shares designated; 0 shares issued and outstanding
Common stock, $.001 par value, authorized 100,000,000 shares, 10,639,290 and 10,619,924 shares issued and outstanding 11,000 11,000
Additional paid-in capital 58,276,000 58,253,000
Accumulated deficit (51,520,000) (53,089,000)
Total stockholders' equity 6,767,000 5,175,000
Total liabilities and stockholders' equity $ 9,484,000 $ 8,105,000

Consolidated Balance Sheets (Parenthetical)
v3.10.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Allowance for doubtful accounts $ 0 $ 14
Accounts receivable-related party, allowance for doubtful accounts $ 0 $ 159
Preferred stock, shares authorized 25,000,000 25,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 10,639,290 10,619,924
Common stock, shares outstanding 10,639,290 10,619,924
Series A Preferred Stock [Member]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000 10,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0

Consolidated Statements Of Operations
v3.10.0.1
Consolidated Statements Of Operations - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Revenues    
Revenues $ 5,871,000 $ 4,683,000
Cost and expenses    
Production costs and taxes 3,591,000 3,444,000
Depreciation, depletion, and amortization 795,000 862,000
General and administrative 1,245,000 1,171,000
Total cost and expenses 5,631,000 5,477,000
Net income (loss) from operations 240,000 (794,000)
Other income (expense)    
Net interest expense (5,000) (53,000)
Gain on sale of assets 33,000 2,000
Other income 157,000  
Total other income (expense) 185,000 (51,000)
Income (loss) from operations before income tax 425,000 (845,000)
Deferred income tax benefit 17,000 242,000
Net income (loss) from continuing operations 442,000 (603,000)
Net income from discontinued operations 1,127,000 29,000
Net income (loss) $ 1,569,000 $ (574,000)
Net income (loss) per share - basic and fully diluted    
Continuing operations $ 0.04 $ (0.06)
Discontinued operations $ 0.11  
Shares used in computing earnings per share    
Basic and fully diluted 10,628,170 10,081,218
Oil And Gas Proeprties [Member]    
Revenues    
Revenues $ 5,871,000 $ 4,683,000

Consolidated Statements Of Stockholders' Equity
v3.10.0.1
Consolidated Statements Of Stockholders' Equity - USD ($)
Common Stock [Member]
Paid-In Capital [Member]
Accumulated Deficit [Member]
Total
Balance, value at Dec. 31, 2016 $ 6,000 $ 55,787,000 $ (52,515,000) $ 3,278,000
Balance, shares at Dec. 31, 2016 6,097,723      
Net income (loss)     (574,000) (574,000)
Compensation expense related to options issued   14,000   14,000
Compensation expense related to stock issued, shares 23,503      
Shares issued for rights offering $ 5,000 2,452,000   $ 2,457,000
Shares issued for rights offering, shares 4,498,698      
Balance, shares at Dec. 31, 2017 10,619,924     10,619,924
Balance, value at Dec. 31, 2017 $ 11,000 58,253,000 (53,089,000) $ 5,175,000
Net income (loss)     1,569,000 1,569,000
Compensation expense related to stock issued   23,000   $ 23,000
Compensation expense related to stock issued, shares 19,366      
Balance, shares at Dec. 31, 2018 10,639,290     10,639,290
Balance, value at Dec. 31, 2018 $ 11,000 $ 58,276,000 $ (51,520,000) $ 6,767,000

Consolidated Statements Of Cash Flows
v3.10.0.1
Consolidated Statements Of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Operating activities    
Net income (loss) from continuing operations $ 442,000 $ (603,000)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities    
Depreciation, depletion, and amortization 795,000 862,000
Amortization of loan fees-interest expenses 4,000 20,000
Accretion of discount on asset retirement obligation 141,000 141,000
(Gain) loss on asset sales (33,000) (2,000)
Compensation and services paid in stock / stock options 23,000 14,000
Changes in assets and liabilities:    
Accounts receivable 96,000 (318,000)
Inventory, prepaid expense, and other assets (28,000) 203,000
Accounts payable (58,000) (78,000)
Accrued liabilities (64,000) (73,000)
Settlement on asset retirement obligations (25,000) (53,000)
Net cash provided by operating activities - continuing operations 1,293,000 113,000
Net cash provided by operating activities - discontinued operations 44,000 41,000
Net cash provided by operating activities 1,337,000 154,000
Investing activities    
Additions to oil and gas properties (1,011,000) (169,000)
Proceeds from sale of oil and gas properties 7,000 7,000
Additions to other property and equipment (27,000) (17,000)
Proceeds from sale of other property and equipment 8,000  
Net cash used in investing activities - continuing operations (1,023,000) (179,000)
Net cash provided by investing activities - discontinued operations 2,658,000  
Net cash provided by (used in) investing activities 1,635,000 (179,000)
Financing activities    
Proceeds from stock issuance in rights offering   2,699,000
Cost of stock issuance in rights offering   (102,000)
Proceeds from borrowings 100,000 400,000
Repayment of borrowings (142,000) (2,854,000)
Loan fees   (9,000)
Net cash provided by (used in) financing activities - continuing operations (42,000) 134,000
Net cash provided by (used in) financing activities (42,000) 134,000
Net change in cash and cash equivalents 2,930,000 109,000
Cash and cash equivalents, beginning of period 185,000 76,000
Cash and cash equivalents, end of period 3,115,000 185,000
Supplemental cash flow information:    
Cash interest payments   33,000
Supplemental non-cash investing and financing activities:    
Financed company vehicles 136,000 81,000
Cost of stock issuance in rights offering   (140,000)
Asset retirement obligations incurred 7,000 1,000
Revisions to asset retirement obligations (198,000) $ 138,000
Capital expenditures included in accounts payable and accrued liabilities $ 9,000  

Description Of Business And Significant Accounting Policies
v3.10.0.1
Description Of Business And Significant Accounting Policies
12 Months Ended
Dec. 31, 2018
Description Of Business And Significant Accounting Policies [Abstract]  
Description Of Business And Significant Accounting Policies

1. Description of Business and Significant Accounting Policies



Tengasco, Inc. (the “Company”) is a Delaware corporation.  The Company is in the business of exploration for and production of oil and natural gas.  The Company’s primary area of exploration and production is in Kansas. 



The Company’s wholly-owned subsidiary, Tengasco Pipeline Corporation (“TPC”) owned and operated a pipeline which it constructed to transport natural gas from the Company’s Swan Creek Field to customers in Kingsport, Tennessee.  The Company sold all its pipeline assets on August 16, 2013.



The Company’s wholly-owned subsidiary, Manufactured Methane Corporation (“MMC”) operated treatment and delivery facilities in Church Hill, Tennessee for the extraction of methane gas from a landfill for eventual sale as natural gas and for the generation of electricity.  The Company sold all its methane facility assets on January 26, 2018.  (See Note 5. Discontinued Operations)



Principles of Consolidation



The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).  The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries after elimination of all significant intercompany transactions and balances.



Use of Estimates



The accompanying consolidated financial statements are prepared in conformity with U.S. GAAP which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Significant estimates include reserve quantities and estimated future cash flows associated with proved reserves, which significantly impact depletion expense and potential impairments of oil and natural gas properties, income taxes and the valuation of deferred tax assets, stock-based compensation and commitments and contingencies.  We analyze our estimates based on historical experience and various other assumptions that we believe to be reasonable. While we believe that our estimates and assumptions used in preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.



Revenue Recognition



Effective January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers.  The Company identifies the contracts with each of its customers and the separate performance obligations associated with each of these contracts.  Revenues are recognized when the performance obligations are satisfied and when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.



Crude oil is sold on a month-to-month contract at a price based on an index price from the purchaser, net of differentials.  Crude oil that is produced is stored in storage tanks.  The Company will contact the purchaser and request them to pick up the crude oil from the storage tanks.  When the purchaser picks up the crude from the storage tanks, control of the crude transfers to the purchaser, the Company’s contractual obligation is satisfied, and revenues are recognized.  The sales of oil represent the Company’s share of revenues net of royalties and excluding revenue interests owned by others.  When selling oil on behalf of royalty owners or working interest owners, the Company is acting as an agent and thus reports revenues on a net basis.  Fees and other deductions incurred prior to transfer of control are recorded as production costs.  Revenues are reported net of fees and other deductions incurred after transfer of control.



Electricity from the Company’s methane facility was sold on a long term contract.  There were no specific volumes of electricity that were required to be delivered under this contract.  Electricity passed through sales meters located at the Carter Valley landfill site, at which time control of the electricity transferred to the purchaser, the Company’s contractual obligation was satisfied, and revenues were recognizedThe Company sold its methane facility and generation assets on January 26, 2018 and therefore will not recognize revenues associated with any sales volumes after that date.  Revenues associated with the methane facility are included in Discontinued Operations. (See Note 5. Discontinued Operations)



The Company operates certain salt water disposal wells, some of which accept water from third parties.  The contracts with the third parties primarily require a flat monthly fee for the third parties to dispose water into the wells.  In some cases, the contract is based on a per barrel charge to dispose water into the wells.  There is no requirement under the contracts for these third parties to use these wells for their water disposal.  If the third parties do dispose water into the Company operated wells in a given month, the Company has met its contractual obligations and revenues are recognized for that month.



The following table presents the disaggregated revenue by commodity for the years ended December 31, 2018 and 2017 (in thousands):





 

 



Year Ended

Year Ended



December 31, 2018

December 31, 2017

Revenue (in thousands):

 

 

     Crude oil

$5,840  $4,653 

     Salt water disposal fees

31  30 



 

 

     Total

$5,871  $4,683 





There were no natural gas imbalances at December 31, 2018 or December 31, 2017.



Cash and Cash Equivalents



Cash and cash equivalents include temporary cash investments with a maturity of ninety days or less at date of purchase.



 

Inventory



Inventory consists of crude oil in tanks and is carried at lower of cost or market value.  The cost component of the oil inventory is calculated using the average quarterly per barrel cost for the quarter ended December 31, 2018 and December 31, 2017.  During 2018,  the Company included production costs and taxes in its calculation of estimated cost.   During 2017,  the Company included production costs and taxes, allocated general and administrative costs, depletion, and allocated interest in its calculation of estimated cost.  The Company made this change as it believes that excluding allocated general and administrative costs, depletion, and interests provides a better estimate of its cost of oil inventory.  The market component is calculated using the average December 2018 and December 2017 oil sales price for the Company’s Kansas properties.  In addition, the Company also carried equipment and materials to be used in its Kansas operation and is carried at the lower of cost or market value.  The cost component of the equipment and materials inventory represents the original cost paid for the equipment and materials.  The market component is based on estimated sales value for similar equipment and materials at the end of each year.  At December 31, 2018 and December 31, 2017, inventory consisted of the following (in thousands):







 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Oil – carried at cost

 

$

359 

 

$

436 

Equipment and materials – carried at market

 

 

105 

 

 

105 

Total inventory

 

$

464 

 

$

541 



 

Oil and Gas Properties



The Company follows the full cost method of accounting for oil and gas property acquisition, exploration, and development activities.  Under this method, all costs incurred in connection with acquisition, exploration, and development of oil and gas reserves are capitalized.  Capitalized costs include lease acquisitions, seismic related costs, certain internal exploration costs, drilling, completion, and estimated asset retirement costs. The capitalized costs of oil and gas properties, plus estimated future development costs relating to proved reserves and estimated asset retirement costs which are not already included net of estimated salvage value, are amortized on the unit-of-production method based on total proved reserves. The Company has determined its reserves based upon reserve reports provided by LaRoche Petroleum Consultants Ltd. since 2009. The costs of unproved properties are excluded from amortization until the properties are evaluated, subject to an annual assessment of whether impairment has occurred.  The Company had $23,000 and $0 in unevaluated properties as of December 31, 2018 and 2017, respectively.  Proceeds from the sale of oil and gas properties are accounted for as reductions to capitalized costs unless such sales cause a significant change in the relationship between costs and the estimated value of proved reserves, in which case a gain or loss is recognized.



At the end of each reporting period, the Company performs a “ceiling test” on the value of the net capitalized cost of oil and gas properties. This test compares the net capitalized cost (capitalized cost of oil and gas properties, net of accumulated depreciation, depletion and amortization and related deferred income taxes) to the present value of estimated future net revenues from oil and gas properties using an average price (arithmetic average of the beginning of month prices for the prior 12 months) and current cost discounted at 10%  plus cost of properties not being amortized and the lower of cost or estimated  fair value of unproven properties included in the cost being amortized (ceiling). If the net capitalized cost is greater than the ceiling, a write-down or impairment is required.  A write-down of the carrying value of the asset is a non-cash charge that reduces earnings in the current period.  Once incurred, a write-down may not be reversed in a later period.  The Company performed its ceiling tests during 2017 and 2018, resulting in no impairments of its oil and gas properties.



Asset Retirement Obligation



An asset retirement obligation associated with the retirement of a tangible long-lived asset is recognized as a liability in the period incurred, with an associated increase in the carrying amount of the related long-lived asset, our oil and natural gas properties. The cost of the tangible asset, including the asset retirement cost, is depleted over the useful life of the asset. The asset retirement obligation is recorded at its estimated fair value, measured by reference to the expected future cash outflows required to satisfy the retirement obligation discounted at our credit-adjusted risk-free interest rate. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. Accretion expense is recorded as “Production costs and taxes” in the Consolidated Statements of Operations.  If the estimated future cost of the asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the long-lived asset. Revisions to estimated asset retirement obligations can result from changes in retirement cost estimates, revisions to estimated inflation rates, and changes in the estimated timing of abandonment.



Manufactured Methane Facilities



The Manufactured Methane facilities were placed into service in April 2009 and were being depreciated using the straight-line method over the useful life based on the estimated landfill closure date of December 2041.  The Company sold all its methane facility assets, except the applicable U.S. patent, on January 26, 2018.  (See Note 5. Discontinued Operations)



Other Property and Equipment



Other property and equipment is carried at cost.  The Company provides for depreciation of other property and equipment using the straight-line method over the estimated useful lives of the assets which range from two to seven years.  Net gains or losses on other property and equipment disposed of are included in operating income in the period in which the transaction occurs.



Stock-Based Compensation



The Company records stock-based compensation to employees based on the estimated fair value of the award at grant date.  We recognize expense on a straight line basis over the requisite service period. For stock-based compensation that vests immediately, the Company recognizes the entire expense in the quarter in which the stock-based compensation is granted.  The Company recorded compensation expense of $23,000 in 2018 and $14,000 in 2017.



Accounts Receivable



Accounts receivable consist of uncollateralized joint interest owner obligations due within 30 days of the invoice date, uncollateralized accrued revenues due under normal trade terms, generally requiring payment within 30 days of production, and other miscellaneous receivables. No interest is charged on past-due balances. Payments made on accounts receivable are applied to the earliest unpaid items. We review accounts receivable periodically and reduce the carrying amount by a valuation allowance that reflects our best estimate of the amount that may not be collectible. An allowance was recorded at December 31, 2018 and 2017.  At December 31, 2018 and 2017, accounts receivable consisted of the following (in thousands):

 





 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Revenue

 

$

396 

 

$

479 

Tax

 

 

129 

 

 

 —

Joint interest

 

 

 

 

23 

Other

 

 

 —

 

 

29 

Allowance for doubtful accounts

 

 

 —

 

 

(14)

Total accounts receivable

 

$

533 

 

$

517 



At year-end 2018, the Company removed the $159,000 from Accounts receivable-related party and also from the associated allowance for doubtful accounts.  This removal occurred as the Company determined that the outstanding balance of the associated payable recorded in Accounts payable – other was not recoverable against the Company by operation of applicable statutes of limitation or prescription.



At December 31, 2018 and December 31, 2017, the Company recorded a tax related non-current receivable in the amount of $130,000 and $242,000, respectively.  At September 30, 2018, based upon its expected recovery, the Company reclassified $121,000 of this tax related non-current receivable as a current receivable.  At December 31, 2018, the increased the tax related current and non-current receivable by approximately $8,000 and $9,000, respectively. (See Note 13. Income Taxes) 



Income Taxes



Income taxes are reported in accordance with U.S. GAAP, which requires the establishment of deferred tax accounts for all temporary differences between the financial reporting and tax bases of assets and liabilities, using currently enacted federal and state income tax rates.  In addition, deferred tax accounts must be adjusted to reflect new rates if enacted into law.

 

Realization of deferred tax assets is contingent on the generation of future taxable income.  As a result, management considers whether it is more likely than not that all or a portion of such assets will be realized during periods when they are available, and if not, management provides a valuation allowance for amounts not likely to be recognized.



Management periodically evaluates tax reporting methods to determine if any uncertain tax positions exist that would require the establishment of a loss contingency.  A loss contingency would be recognized if it were probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonably estimated.



The amount recognized is subject to estimates and management’s judgment with respect to the likely outcome of each uncertain tax position.  The amount that is ultimately incurred for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized.



Concentration of Credit Risk



Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.  Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances.



The Company’s primary business activities include oil sales to a limited number of customers in the state of Kansas.  The related trade receivables subject the Company to a concentration of credit risk.  The Company sells a majority of its crude oil primarily to two customers in Kansas.  Although management believes that customers could be replaced in the ordinary course of business, if the present customers were to discontinue business with the Company, it may have a significant adverse effect on the Company’s results of operations.



Revenue from the top two purchasers accounted for 85.6% and 13.8% of total revenues for year ended December 31, 2018.  Revenue from the top two purchasers accounted for 84.6% and 14.8% of total revenues for year ended December 31, 2017.  As of December 31, 2018 and 2017, two of the Company’s oil purchasers accounted for 93.2% and 89.7%, respectively of accounts receivable, of which one oil purchaser accounted for 84.4% and 74.4%, respectively.

The amounts above exclude revenues and accounts receivable associated with Discontinued Operations.  (see Note 5. Discontinued Operations)



Earnings per Common Share



The Company reports basic earnings per common share, which excludes the effect of potentially dilutive securities, and diluted earnings per common share which include the effect of all potentially dilutive securities unless their impact is anti-dilutive. The following are reconciliations of the numerators and denominators of the Company’s basic and diluted earnings per share, (in thousands except for share and per share amounts):







 

 

 

 

 

 



 

 

 

 

 

 



 

For the years ended December 31,



 

2018

 

2017

Income (numerator):

 

  

 

 

  

 

Net income (loss) from continuing operations

 

$

442 

 

$

(603)

Net income from discontinued operations

 

 

1,127 

 

 

29 

Weighted average shares (denominator):

 

 

 

 

 

 

Weighted average shares - basic

 

 

10,628,170 

 

 

10,081,218 

Dilution effect of share-based compensation, treasury method

 

 

 —

 

 

 —

Weighted average shares - dilutive

 

 

10,628,170 

 

 

10,081,218 

Income (loss) per share – Basic and Dilutive:

 

 

 

 

 

 

Continuing operations

 

$

0.04 

 

$

(0.06)

Discontinued operations

 

$

0.11 

 

$

 —



Options issued to the Company’s directors in which the exercise price was higher than the average market price each quarter was also excluded from diluted shares as they would have been anti-dilutive (See Note 12. Stock and Stock Options).  In addition, the shares that would be issued to employees and Company directors have also been excluded from this calculation.  (See Note 9. Commitments and Contingencies)



Fair Value of Financial Instruments



The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, accounts payables, accrued liabilities and long term debt approximates fair value as of December 31, 2018 and 2017.



Derivative Financial Instruments



The Company uses derivative instruments to manage our exposure to commodity price risk on sales of oil production.  The Company does not enter into derivative instruments for speculative trading purposes.  The Company presents the fair value of derivative contracts on a net basis where the right to offset is provided for in our counterparty agreements.  As of December 31, 2018 and 2017, the Company did not have any open derivatives.



Reclassifications



Certain prior year amounts have been reclassified to conform to current year presentation with no effect on net income.

 


Description Of Business And Significant Accounting Policies (Policy)
v3.10.0.1
Description Of Business And Significant Accounting Policies (Policy)
12 Months Ended
Dec. 31, 2018
Description Of Business And Significant Accounting Policies [Abstract]  
Principles Of Consolidation

Principles of Consolidation



The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).  The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries after elimination of all significant intercompany transactions and balances.

Use Of Estimates

Use of Estimates



The accompanying consolidated financial statements are prepared in conformity with U.S. GAAP which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Significant estimates include reserve quantities and estimated future cash flows associated with proved reserves, which significantly impact depletion expense and potential impairments of oil and natural gas properties, income taxes and the valuation of deferred tax assets, stock-based compensation and commitments and contingencies.  We analyze our estimates based on historical experience and various other assumptions that we believe to be reasonable. While we believe that our estimates and assumptions used in preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition



Effective January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers.  The Company identifies the contracts with each of its customers and the separate performance obligations associated with each of these contracts.  Revenues are recognized when the performance obligations are satisfied and when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.



Crude oil is sold on a month-to-month contract at a price based on an index price from the purchaser, net of differentials.  Crude oil that is produced is stored in storage tanks.  The Company will contact the purchaser and request them to pick up the crude oil from the storage tanks.  When the purchaser picks up the crude from the storage tanks, control of the crude transfers to the purchaser, the Company’s contractual obligation is satisfied, and revenues are recognized.  The sales of oil represent the Company’s share of revenues net of royalties and excluding revenue interests owned by others.  When selling oil on behalf of royalty owners or working interest owners, the Company is acting as an agent and thus reports revenues on a net basis.  Fees and other deductions incurred prior to transfer of control are recorded as production costs.  Revenues are reported net of fees and other deductions incurred after transfer of control.



Electricity from the Company’s methane facility was sold on a long term contract.  There were no specific volumes of electricity that were required to be delivered under this contract.  Electricity passed through sales meters located at the Carter Valley landfill site, at which time control of the electricity transferred to the purchaser, the Company’s contractual obligation was satisfied, and revenues were recognizedThe Company sold its methane facility and generation assets on January 26, 2018 and therefore will not recognize revenues associated with any sales volumes after that date.  Revenues associated with the methane facility are included in Discontinued Operations. (See Note 5. Discontinued Operations)



The Company operates certain salt water disposal wells, some of which accept water from third parties.  The contracts with the third parties primarily require a flat monthly fee for the third parties to dispose water into the wells.  In some cases, the contract is based on a per barrel charge to dispose water into the wells.  There is no requirement under the contracts for these third parties to use these wells for their water disposal.  If the third parties do dispose water into the Company operated wells in a given month, the Company has met its contractual obligations and revenues are recognized for that month.



The following table presents the disaggregated revenue by commodity for the years ended December 31, 2018 and 2017 (in thousands):





 

 



Year Ended

Year Ended



December 31, 2018

December 31, 2017

Revenue (in thousands):

 

 

     Crude oil

$5,840  $4,653 

     Salt water disposal fees

31  30 



 

 

     Total

$5,871  $4,683 





There were no natural gas imbalances at December 31, 2018 or December 31, 2017.

Cash And Cash Equivalents

Cash and Cash Equivalents



Cash and cash equivalents include temporary cash investments with a maturity of ninety days or less at date of purchase.

Inventory

Inventory



Inventory consists of crude oil in tanks and is carried at lower of cost or market value.  The cost component of the oil inventory is calculated using the average quarterly per barrel cost for the quarter ended December 31, 2018 and December 31, 2017.  During 2018,  the Company included production costs and taxes in its calculation of estimated cost.   During 2017,  the Company included production costs and taxes, allocated general and administrative costs, depletion, and allocated interest in its calculation of estimated cost.  The Company made this change as it believes that excluding allocated general and administrative costs, depletion, and interests provides a better estimate of its cost of oil inventory.  The market component is calculated using the average December 2018 and December 2017 oil sales price for the Company’s Kansas properties.  In addition, the Company also carried equipment and materials to be used in its Kansas operation and is carried at the lower of cost or market value.  The cost component of the equipment and materials inventory represents the original cost paid for the equipment and materials.  The market component is based on estimated sales value for similar equipment and materials at the end of each year.  At December 31, 2018 and December 31, 2017, inventory consisted of the following (in thousands):







 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Oil – carried at cost

 

$

359 

 

$

436 

Equipment and materials – carried at market

 

 

105 

 

 

105 

Total inventory

 

$

464 

 

$

541 



 

Oil And Gas Properties

Oil and Gas Properties



The Company follows the full cost method of accounting for oil and gas property acquisition, exploration, and development activities.  Under this method, all costs incurred in connection with acquisition, exploration, and development of oil and gas reserves are capitalized.  Capitalized costs include lease acquisitions, seismic related costs, certain internal exploration costs, drilling, completion, and estimated asset retirement costs. The capitalized costs of oil and gas properties, plus estimated future development costs relating to proved reserves and estimated asset retirement costs which are not already included net of estimated salvage value, are amortized on the unit-of-production method based on total proved reserves. The Company has determined its reserves based upon reserve reports provided by LaRoche Petroleum Consultants Ltd. since 2009. The costs of unproved properties are excluded from amortization until the properties are evaluated, subject to an annual assessment of whether impairment has occurred.  The Company had $23,000 and $0 in unevaluated properties as of December 31, 2018 and 2017, respectively.  Proceeds from the sale of oil and gas properties are accounted for as reductions to capitalized costs unless such sales cause a significant change in the relationship between costs and the estimated value of proved reserves, in which case a gain or loss is recognized.



At the end of each reporting period, the Company performs a “ceiling test” on the value of the net capitalized cost of oil and gas properties. This test compares the net capitalized cost (capitalized cost of oil and gas properties, net of accumulated depreciation, depletion and amortization and related deferred income taxes) to the present value of estimated future net revenues from oil and gas properties using an average price (arithmetic average of the beginning of month prices for the prior 12 months) and current cost discounted at 10%  plus cost of properties not being amortized and the lower of cost or estimated  fair value of unproven properties included in the cost being amortized (ceiling). If the net capitalized cost is greater than the ceiling, a write-down or impairment is required.  A write-down of the carrying value of the asset is a non-cash charge that reduces earnings in the current period.  Once incurred, a write-down may not be reversed in a later period.  The Company performed its ceiling tests during 2017 and 2018, resulting in no impairments of its oil and gas properties.

Asset Retirement Obligation

Asset Retirement Obligation



An asset retirement obligation associated with the retirement of a tangible long-lived asset is recognized as a liability in the period incurred, with an associated increase in the carrying amount of the related long-lived asset, our oil and natural gas properties. The cost of the tangible asset, including the asset retirement cost, is depleted over the useful life of the asset. The asset retirement obligation is recorded at its estimated fair value, measured by reference to the expected future cash outflows required to satisfy the retirement obligation discounted at our credit-adjusted risk-free interest rate. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. Accretion expense is recorded as “Production costs and taxes” in the Consolidated Statements of Operations.  If the estimated future cost of the asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the long-lived asset. Revisions to estimated asset retirement obligations can result from changes in retirement cost estimates, revisions to estimated inflation rates, and changes in the estimated timing of abandonment.

Manufactured Methane Facilities

Manufactured Methane Facilities



The Manufactured Methane facilities were placed into service in April 2009 and were being depreciated using the straight-line method over the useful life based on the estimated landfill closure date of December 2041.  The Company sold all its methane facility assets, except the applicable U.S. patent, on January 26, 2018.  (See Note 5. Discontinued Operations)

Other Property And Equipment

Other Property and Equipment



Other property and equipment is carried at cost.  The Company provides for depreciation of other property and equipment using the straight-line method over the estimated useful lives of the assets which range from two to seven years.  Net gains or losses on other property and equipment disposed of are included in operating income in the period in which the transaction occurs.

Stock-Based Compensation

Stock-Based Compensation



The Company records stock-based compensation to employees based on the estimated fair value of the award at grant date.  We recognize expense on a straight line basis over the requisite service period. For stock-based compensation that vests immediately, the Company recognizes the entire expense in the quarter in which the stock-based compensation is granted.  The Company recorded compensation expense of $23,000 in 2018 and $14,000 in 2017.

Accounts Receivable

Accounts Receivable



Accounts receivable consist of uncollateralized joint interest owner obligations due within 30 days of the invoice date, uncollateralized accrued revenues due under normal trade terms, generally requiring payment within 30 days of production, and other miscellaneous receivables. No interest is charged on past-due balances. Payments made on accounts receivable are applied to the earliest unpaid items. We review accounts receivable periodically and reduce the carrying amount by a valuation allowance that reflects our best estimate of the amount that may not be collectible. An allowance was recorded at December 31, 2018 and 2017.  At December 31, 2018 and 2017, accounts receivable consisted of the following (in thousands):

 





 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Revenue

 

$

396 

 

$

479 

Tax

 

 

129 

 

 

 —

Joint interest

 

 

 

 

23 

Other

 

 

 —

 

 

29 

Allowance for doubtful accounts

 

 

 —

 

 

(14)

Total accounts receivable

 

$

533 

 

$

517 



At year-end 2018, the Company removed the $159,000 from Accounts receivable-related party and also from the associated allowance for doubtful accounts.  This removal occurred as the Company determined that the outstanding balance of the associated payable recorded in Accounts payable – other was not recoverable against the Company by operation of applicable statutes of limitation or prescription.



At December 31, 2018 and December 31, 2017, the Company recorded a tax related non-current receivable in the amount of $130,000 and $242,000, respectively.  At September 30, 2018, based upon its expected recovery, the Company reclassified $121,000 of this tax related non-current receivable as a current receivable.  At December 31, 2018, the increased the tax related current and non-current receivable by approximately $8,000 and $9,000, respectively. (See Note 13. Income Taxes) 



Income Taxes

Income Taxes



Income taxes are reported in accordance with U.S. GAAP, which requires the establishment of deferred tax accounts for all temporary differences between the financial reporting and tax bases of assets and liabilities, using currently enacted federal and state income tax rates.  In addition, deferred tax accounts must be adjusted to reflect new rates if enacted into law.

 

Realization of deferred tax assets is contingent on the generation of future taxable income.  As a result, management considers whether it is more likely than not that all or a portion of such assets will be realized during periods when they are available, and if not, management provides a valuation allowance for amounts not likely to be recognized.



Management periodically evaluates tax reporting methods to determine if any uncertain tax positions exist that would require the establishment of a loss contingency.  A loss contingency would be recognized if it were probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonably estimated.



The amount recognized is subject to estimates and management’s judgment with respect to the likely outcome of each uncertain tax position.  The amount that is ultimately incurred for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized.

Concentration Of Credit Risk

Concentration of Credit Risk



Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.  Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances.



The Company’s primary business activities include oil sales to a limited number of customers in the state of Kansas.  The related trade receivables subject the Company to a concentration of credit risk.  The Company sells a majority of its crude oil primarily to two customers in Kansas.  Although management believes that customers could be replaced in the ordinary course of business, if the present customers were to discontinue business with the Company, it may have a significant adverse effect on the Company’s results of operations.



Revenue from the top two purchasers accounted for 85.6% and 13.8% of total revenues for year ended December 31, 2018.  Revenue from the top two purchasers accounted for 84.6% and 14.8% of total revenues for year ended December 31, 2017.  As of December 31, 2018 and 2017, two of the Company’s oil purchasers accounted for 93.2% and 89.7%, respectively of accounts receivable, of which one oil purchaser accounted for 84.4% and 74.4%, respectively.

The amounts above exclude revenues and accounts receivable associated with Discontinued Operations.  (see Note 5. Discontinued Operations)

Earnings Per Common Share

Earnings per Common Share



The Company reports basic earnings per common share, which excludes the effect of potentially dilutive securities, and diluted earnings per common share which include the effect of all potentially dilutive securities unless their impact is anti-dilutive. The following are reconciliations of the numerators and denominators of the Company’s basic and diluted earnings per share, (in thousands except for share and per share amounts):







 

 

 

 

 

 



 

 

 

 

 

 



 

For the years ended December 31,



 

2018

 

2017

Income (numerator):

 

  

 

 

  

 

Net income (loss) from continuing operations

 

$

442 

 

$

(603)

Net income from discontinued operations

 

 

1,127 

 

 

29 

Weighted average shares (denominator):

 

 

 

 

 

 

Weighted average shares - basic

 

 

10,628,170 

 

 

10,081,218 

Dilution effect of share-based compensation, treasury method

 

 

 —

 

 

 —

Weighted average shares - dilutive

 

 

10,628,170 

 

 

10,081,218 

Income (loss) per share – Basic and Dilutive:

 

 

 

 

 

 

Continuing operations

 

$

0.04 

 

$

(0.06)

Discontinued operations

 

$

0.11 

 

$

 —



Options issued to the Company’s directors in which the exercise price was higher than the average market price each quarter was also excluded from diluted shares as they would have been anti-dilutive (See Note 12. Stock and Stock Options).  In addition, the shares that would be issued to employees and Company directors have also been excluded from this calculation.  (See Note 9. Commitments and Contingencies)

Fair Value Of Financial Instruments

Fair Value of Financial Instruments



The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, accounts payables, accrued liabilities and long term debt approximates fair value as of December 31, 2018 and 2017.

Derivative Financial Instruments

Derivative Financial Instruments



The Company uses derivative instruments to manage our exposure to commodity price risk on sales of oil production.  The Company does not enter into derivative instruments for speculative trading purposes.  The Company presents the fair value of derivative contracts on a net basis where the right to offset is provided for in our counterparty agreements.  As of December 31, 2018 and 2017, the Company did not have any open derivatives.

Reclassifications

Reclassifications



Certain prior year amounts have been reclassified to conform to current year presentation with no effect on net income.


Description Of Business And Significant Accounting Policies (Tables)
v3.10.0.1
Description Of Business And Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2018
Description Of Business And Significant Accounting Policies [Abstract]  
Disaggregation Of Revenue



 

 



Year Ended

Year Ended



December 31, 2018

December 31, 2017

Revenue (in thousands):

 

 

     Crude oil

$5,840  $4,653 

     Salt water disposal fees

31  30 



 

 

     Total

$5,871  $4,683 



Inventory



 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Oil – carried at cost

 

$

359 

 

$

436 

Equipment and materials – carried at market

 

 

105 

 

 

105 

Total inventory

 

$

464 

 

$

541 



Accounts Receivable



 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Revenue

 

$

396 

 

$

479 

Tax

 

 

129 

 

 

 —

Joint interest

 

 

 

 

23 

Other

 

 

 —

 

 

29 

Allowance for doubtful accounts

 

 

 —

 

 

(14)

Total accounts receivable

 

$

533 

 

$

517 



Reconciliations Of The Numerators And Denominators On Basic And Diluted Earnings Per Share



 

 

 

 

 

 



 

 

 

 

 

 



 

For the years ended December 31,



 

2018

 

2017

Income (numerator):

 

  

 

 

  

 

Net income (loss) from continuing operations

 

$

442 

 

$

(603)

Net income from discontinued operations

 

 

1,127 

 

 

29 

Weighted average shares (denominator):

 

 

 

 

 

 

Weighted average shares - basic

 

 

10,628,170 

 

 

10,081,218 

Dilution effect of share-based compensation, treasury method

 

 

 —

 

 

 —

Weighted average shares - dilutive

 

 

10,628,170 

 

 

10,081,218 

Income (loss) per share – Basic and Dilutive:

 

 

 

 

 

 

Continuing operations

 

$

0.04 

 

$

(0.06)

Discontinued operations

 

$

0.11 

 

$

 —




Description Of Business And Significant Accounting Policies (Narrative) (Details)
v3.10.0.1
Description Of Business And Significant Accounting Policies (Narrative) (Details)
12 Months Ended
Dec. 31, 2018
USD ($)
customer
Dec. 31, 2017
USD ($)
Sep. 30, 2018
USD ($)
Description Of Business And Significant Accounting Policies [Line Items]      
Material natural gas imbalances $ 0 $ 0  
Unevaluated properties $ 23,000 0  
Current cost discount 10.00%    
Stock based compensation $ 23,000 14,000  
Federal net operating loss carryforwards 35,600,000    
Deferred tax asset $ 130,000 242,000  
Customers | customer 2    
Write-off for accounts receivable-related party, allowance for doubtful accounts $ 159,000    
Impairment 0 0  
Accounts receivable - noncurrent 130,000 242,000  
Accounts receivable 533,000 $ 517,000  
Increased accounts receivable, current 8,000    
Increased accounts receivable, noncurrent $ 9,000    
Customer A [Member] | Revenue [Member]      
Description Of Business And Significant Accounting Policies [Line Items]      
Customer's percentage of revenue 85.60% 84.60%  
Customer B [Member] | Revenue [Member]      
Description Of Business And Significant Accounting Policies [Line Items]      
Customer's percentage of revenue 13.80%    
Customer C [Member] | Revenue [Member]      
Description Of Business And Significant Accounting Policies [Line Items]      
Customer's percentage of revenue   14.80%  
Two Customers [Member] | Accounts Receivable [Member]      
Description Of Business And Significant Accounting Policies [Line Items]      
Customer's percentage of revenue 93.20% 89.70%  
Customer D [Member] | Accounts Receivable [Member]      
Description Of Business And Significant Accounting Policies [Line Items]      
Customer's percentage of revenue 84.40% 74.40%  
Restatement Adjustment [Member]      
Description Of Business And Significant Accounting Policies [Line Items]      
Accounts receivable     $ 121,000

Description Of Business And Significant Accounting Policies (Disaggregation Of Revenue) (Details)
v3.10.0.1
Description Of Business And Significant Accounting Policies (Disaggregation Of Revenue) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Disaggregation of Revenue [Line Items]    
Revenue $ 5,871 $ 4,683
Crude Oil [Member]    
Disaggregation of Revenue [Line Items]    
Revenue 5,840 4,653
Salt Water Disposal Fees [Member]    
Disaggregation of Revenue [Line Items]    
Revenue $ 31 $ 30

Description Of Business And Significant Accounting Policies (Inventory) (Details)
v3.10.0.1
Description Of Business And Significant Accounting Policies (Inventory) (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Description Of Business And Significant Accounting Policies [Abstract]    
Oil - carried at cost $ 359 $ 436
Equipment and materials - carried at market 105 105
Total inventory $ 464 $ 541

Description Of Business And Significant Accounting Policies (Accounts Receivable) (Details)
v3.10.0.1
Description Of Business And Significant Accounting Policies (Accounts Receivable) (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Allowance for doubtful accounts $ 0 $ (14)
Total accounts receivable 533 517
Revenue [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Accounts receivable 396 479
Tax [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Accounts receivable 129  
Joint Interest [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Accounts receivable $ 8 23
Other [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Accounts receivable   $ 29

Description Of Business And Significant Accounting Policies (Reconciliations Of The Numerators And Denominators On Basic And Diluted Earnings Per Share) (Details)
v3.10.0.1
Description Of Business And Significant Accounting Policies (Reconciliations Of The Numerators And Denominators On Basic And Diluted Earnings Per Share) (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Earnings Per Common Share [Abstract]                    
Net income (loss) from continuing operations $ (88) $ 298 $ 99 $ 133 $ 158 $ (361) $ (230) $ (170) $ 442 $ (603)
Net income from discontinued operations                 $ 1,127 $ 29
Weighted average shares - basic                 10,628,170 10,081,218
Weighted average shares - dilutive                 10,628,170 10,081,218
Continuing operations                 $ 0.04 $ (0.06)
Discontinued operations                 $ 0.11  

Recent Accounting Pronouncements
v3.10.0.1
Recent Accounting Pronouncements
12 Months Ended
Dec. 31, 2018
Recent Accounting Pronouncements [Abstract]  
Recent Accounting Pronouncements

2. Recent Accounting Pronouncements



In February 2016, the FASB issued Update 2016-02 Leases (Topic 842).  This guidance was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early application of the amendments in this Update is permitted for all entities.  The Company has identified each of its leases and determined the impact of this new guidance on each of the identified leases.  Upon adoption on January 1, 2019, the Company anticipates that it will record right-of-use assets and liabilities associated with operating leases of approximately $100,000.

 


Recent Accounting Pronouncements (Narrative) (Details)
v3.10.0.1
Recent Accounting Pronouncements (Narrative) (Details)
Jan. 01, 2019
USD ($)
Subsequent Event [Member] | Accounting Standards Update 2016-02 [Member]  
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
Operating lease, Right-of-use asset $ 100,000

Related Party Transactions
v3.10.0.1
Related Party Transactions
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

3. Related Party Transactions



On September 17, 2007, Hoactzin Partners, L.P. (“Hoactzin”) subscribed to a drilling program offered by the Company consisting of wells to be drilled on the Company’s Kansas Properties (the “Program”).  Peter E. Salas, the Chairman of the Board of Directors of the Company, is the controlling person of Hoactzin and of Dolphin Offshore Partners, L.P., the Company’s largest shareholder.  Hoactzin was also conveyed a net profits interest in the MMC facility at the Carter Valley municipal solid waste landfill owned and operated by Republic Services, Inc. in Church Hill, Tennessee where the Company installed a propriety combination of advanced gas treatment technology to extract the methane component of the purchased gas stream (the “Methane Project”).  The net profits interest owned by Hoactzin during 2017 was 7.5% of the net profits as defined by agreement and takes into account specific costs and expenses as well as gross gas revenues for the project.  As a result of the startup costs, monthly operating expenses, and gas production levels experienced, no net profits as defined were realized during the period from the project startup in April, 2009 through January 26, 2018, the date the Company sold the Methane Project to a third party, for payment to Hoactzin under the net profits interest.  In addition, during Company during the 4th quarter of 2018, the Company acquired all of Hoactzin’s interest in the drilling program wells for $134,690.



On December 18, 2007, the Company entered into a Management Agreement with Hoactzin to manage on behalf of Hoactzin all of its working interest in certain oil and gas properties owned by Hoactzin and located in the onshore Texas Gulf Coast, and offshore Texas and offshore Louisiana. As part of the consideration for the Company’s agreement to enter into the Management Agreement, Hoactzin granted to the Company an option to participate in up to a 15% working interest on a dollar for dollar cost basis in any new drilling or workover activities undertaken on Hoactzin’s managed properties during the term of the Management Agreement.  The Management Agreement expired on December 18, 2012. 



The Company entered into a transition agreement with Hoactzin whereby the Company no longer performs operations, but administratively assists Hoactzin in becoming operator of record of these wells and transferring all bonds from the Company to Hoactzin.  This assistance is primarily related to signing the necessary documents to effectuate this transition.  Hoactzin and its controlling member are indemnifying the Company for any costs or liabilities incurred by the Company resulting from such assistance, or the fact that the Company is the operator of record on certain of these wells.  As of the date of this Report, the Company continues to administratively assist Hoactzin with this transition process. 



As operator during the term of the Management Agreement that expired in 2012, the Company routinely contracted in its name for goods and services with vendors in connection with its operation of the Hoactzin properties.  In practice, Hoactzin directly paid these invoices for goods and services that were contracted in the Company’s name.  As a result of the operations performed by Hoactzin in late 2009 and 2010, Hoactzin had significant past due balances to several vendors, a portion of which were included on the Company’s balance sheet.  Payables related to these past due and ongoing operations remained outstanding at December 31, 2017 in the amount of $159,000.  The Company has recorded the Hoactzin-related payables and the corresponding receivable from Hoactzin as of December 31, 2017 in its Consolidated Balance Sheets under “Accounts payable – other” and “Accounts receivable – related party”.  However, Hoactzin had not made payments to reduce the $159,000 of past due balances from 2009 and 2010 since the second quarter of 2012.  Based on these circumstances, the Company has elected to establish an allowance in the amount of $159,000 for the balances outstanding at December 31, 2017.  This allowance was recorded in the Company’s Consolidated Balance Sheets under “Accounts receivable – related party”.  The resulting balances recorded in the Company’s Consolidated Balance Sheets under “Accounts receivable – related party, less allowance for doubtful accounts of $159 are $0 at December 31, 2017.  At year-end 2018, the Company has determined that the outstanding balances under these vendor contracts for services or materials provided in 2009 and 2010 are not recoverable against the Company by operation of applicable statutes of limitation or prescription, and consequently, these amounts have been removed from the Company’s balance sheet at December 31, 2018.  This removal also resulted in the Company recording other income in 2018 in the amount of $159,000. 




Related Party Transactions (Narrative) (Details)
v3.10.0.1
Related Party Transactions (Narrative) (Details) - USD ($)
3 Months Ended 12 Months Ended 106 Months Ended
Dec. 18, 2007
Dec. 31, 2018
Dec. 31, 2018
Dec. 31, 2017
Jan. 29, 2018
Related Party Transaction [Line Items]          
Working interest percent 15.00%        
Related party allowance for doubtful accounts receivable   $ 0 $ 0 $ 14,000  
Accounts receivable-related party, allowance for doubtful accounts   0 0 159,000  
Accounts receivable - related parties balance    
Other income     159,000    
Payments to acquire interest in the drilling program wells   134,690      
Methane Project [Member]          
Related Party Transaction [Line Items]          
Percent of net profits, interest       7.50%  
Hoactzin Partners, L.P. [Member]          
Related Party Transaction [Line Items]          
Related parties accounts payable       $ 159,000  
Past due related parties accounts payable       159,000  
Accounts receivable-related party, allowance for doubtful accounts       159,000  
Hoactzin Partners, L.P. [Member] | Methane Project [Member]          
Related Party Transaction [Line Items]          
Net profits         $ 0
Related Party [Member] | Hoactzin Partners, L.P. [Member]          
Related Party Transaction [Line Items]          
Accounts receivable - related parties balance   $ 0 $ 0 $ 159  

Oil And Gas Properties
v3.10.0.1
Oil And Gas Properties
12 Months Ended
Dec. 31, 2018
Oil And Gas Properties [Abstract]  
Oil And Gas Properties

4. Oil and Gas Properties



The following table sets forth information concerning the Company’s oil and gas properties: (in thousands):







 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Oil and gas properties

 

$

6,503 

 

$

5,704 

Unevaluated properties

 

 

23 

 

 

 —

Accumulated depreciation, depletion and amortization

 

 

(1,722)

 

 

(984)

Oil and gas properties, net

 

$

4,804 

 

$

4,720 



During the years ended December 31, 2018 and 2017, the Company recorded depletion expense of $722,000 and $796,000,  respectively.

 


Oil And Gas Properties (Tables)
v3.10.0.1
Oil And Gas Properties (Tables)
12 Months Ended
Dec. 31, 2018
Oil And Gas Properties [Abstract]  
Schedule Of Oil And Gas Properties



 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,



 

2018

 

2017

Oil and gas properties

 

$

6,503 

 

$

5,704 

Unevaluated properties

 

 

23 

 

 

 —

Accumulated depreciation, depletion and amortization

 

 

(1,722)

 

 

(984)

Oil and gas properties, net

 

$

4,804 

 

$

4,720 




Oil And Gas Properties (Narrative) (Details)
v3.10.0.1
Oil And Gas Properties (Narrative) (Details) - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Oil And Gas Properties [Abstract]    
Depletion expense $ 722,000 $ 796,000

Oil And Gas Properties (Schedule Of Oil And Gas Properties) (Details)
v3.10.0.1
Oil And Gas Properties (Schedule Of Oil And Gas Properties) (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Oil And Gas Properties [Abstract]    
Oil and gas properties $ 6,503 $ 5,704
Unevaluated properties 23  
Accumulated depreciation, depletion and amortization (1,722) (984)
Oil and gas properties, net $ 4,804 $ 4,720

Discontinued Operations
v3.10.0.1
Discontinued Operations
12 Months Ended
Dec. 31, 2018
Discontinued Operations [Abstract]  
Discontinued Operations

5. Discontinued Operations

 

The following table sets forth information concerning Discontinued Operations: (in thousands):







 

 

 

 

 

 



 

 

 

 

 

 



December 31,



 

2018

 

2017



 

 

 

 

 

 

Accounts receivable

 

$

 —

 

$

91 

Other current assets

 

 

 —

 

 

30 

Discontinued operations included in current assets

 

$

 —

 

$

121 



 

 

 

 

 

 

Property, plant, and equipment

 

$

 —

 

$

1,681 

Accumulated depreciation, depletion, and amortization

 

 

 —

 

 

(184)

Discontinued operations included in non-current assets

 

$

 —

 

$

1,497 



 

 

 

 

 

 

Accounts payable - trade

 

$

 —

 

$

27 

Accrued and other current liabilities

 

 

 —

 

 

16 

Discontinued operations included in current liabilities

 

$

 —

 

$

43 



 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 

 



For the years ended December 31,



 

2018

 

2017



 

 

 

 

 

 

Revenues

 

$

 

$

580 

Production costs and taxes

 

 

(40)

 

 

(489)

Depreciation, depletion, and amortization

 

 

(4)

 

 

(62)

Interest income

 

 

 —

 

 

 —

Gain on sale of assets

 

 

1,165 

 

 

 —

Deferred income tax benefit

 

 

 —

 

 

 —

Net income (loss) from discontinued operations

 

$

1,127 

 

$

29 



The Discontinued Operations are related to the Manufactured Methane facilities.  The Company sold all its methane facility assets, except the applicable U.S. patent, on January 26, 2018 for $2.65 million

 

 


Discontinued Operations (Tables)
v3.10.0.1
Discontinued Operations (Tables)
12 Months Ended
Dec. 31, 2018
Discontinued Operations [Abstract]  
Schedule Of The Amounts In Net Loss From Discontinued Operations



 

 

 

 

 

 



 

 

 

 

 

 



December 31,



 

2018

 

2017



 

 

 

 

 

 

Accounts receivable

 

$

 —

 

$

91 

Other current assets

 

 

 —

 

 

30 

Discontinued operations included in current assets

 

$

 —

 

$

121 



 

 

 

 

 

 

Property, plant, and equipment

 

$

 —

 

$

1,681 

Accumulated depreciation, depletion, and amortization

 

 

 —

 

 

(184)

Discontinued operations included in non-current assets

 

$

 —

 

$

1,497