| Operating Segments |
13. Operating Segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as executive management consisting of the Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer. The CODM uses the Company’s consolidated financial results, including operating income or loss by segment, to make key operating decisions, assess performance, and to allocate resources. Segment performance is evaluated based on operating income or loss as shown in the table below. Interest income and income taxes are managed separately on a group basis. The Company’s two reportable segments are as follows: | a. | The Upstream segment activities include acquisition, development and production of natural gas and oil reserves on properties within the United States and Canada; and |
| b. | The Gas Gathering segment partners with two other companies to operate a natural gas gathering system. |
Segment activity for the six months ended June 30, 2026 and 2025 is as follows: | | | | | | | | | | | | Upstream | | Gas Gathering | | Total | As of and for the six months ended June 30, 2026 | | | | | | | | | | Operating revenue | | | | | | | | | | Natural gas | | $ | 17,170,019 | | $ | — | | $ | 17,170,019 | Natural gas liquids | | | 2,460,190 | | | — | | | 2,460,190 | Oil and condensate | | | 21,232,717 | | | — | | | 21,232,717 | Gathering and compression fees | | | — | | | 2,994,517 | | | 2,994,517 | Intersegment gathering and compression fees | | | — | | | 807,521 | | | 807,521 | | | | 40,862,926 | | | 3,802,038 | | | 44,664,964 | | | | | | | | | | | Reconciliation of operating revenue | | | | | | | | | | Elimination of intersegment revenues | | | | | | | | | (807,521) | Total consolidated operating revenue(1)(3) | | | | | | | | | 43,857,443 | | | | | | | | | | | Operating costs and expenses | | | | | | | | | | Gathering, transportation, and compression | | | 5,100,696 | | | — | | | 5,100,696 | Other lease operating expense | | | 8,424,810 | | | — | | | 8,424,810 | Gathering system operating expenses | | | — | | | 1,102,921 | | | 1,102,921 | Intersegment other lease operating expense | | | 807,521 | | | — | | | 807,521 | Gain on sale of oil and gas properties | | | (4,174,368) | | | — | | | (4,174,368) | Depletion, depreciation, amortization and accretion | | | 5,424,422 | | | 382,024 | | | 5,806,446 | Segment operating income | | $ | 25,279,845 | | $ | 2,317,093 | | $ | 26,789,417 | | | | | | | | | | | Reconciliation of segment operating income | | | | | | | | | | Salary expense | | | | | | | | | (4,967,377) | Stock based compensation | | | | | | | | | (1,095,054) | Transaction costs | | | | | | | | | (273,952) | Other general and administrative | | | | | | | | | (2,075,579) | Elimination of intersegment other lease operating expenses | | | | | | | | | 807,521 | Interest income | | | | | | | | | 70,327 | Interest expense | | | | | | | | | (1,818,848) | Gain on derivative contracts | | | | | | | | | (6,684,358) | Other income | | | | | | | | | (192,230) | Net income before income tax expense | | | | | | | | $ | 10,559,867 | | | | | | | | | | | Capital expenditures (2) | | $ | 13,480,492 | | $ | (111,600) | | $ | 13,368,892 | Segment assets (3) | | $ | 190,167,069 | | $ | 5,579,113 | | $ | 195,746,182 | | | | | | | | | | | Total segment assets reconciled to consolidated amounts are as follows: | | | | | | | | | | Total segment assets | | | | | | | | $ | 195,746,182 | Current assets, net | | | | | | | | | 33,798,287 | Fair value of derivatives, long term | | | | | | | | | 33,114 | Other property and equipment | | | | | | | | | 5,268,203 | Operating lease right-of-use asset | | | | | | | | | 371,181 | Credit facility fees | | | | | | | | | 673,754 | Restricted cash | | | | | | | | | 553,000 | Total assets | | | | | | | | $ | 236,443,721 |
| | | | | | | | | | | | Upstream | | Gas Gathering | | Total | As of and for the six months ended June 30, 2025 | | | | | | | | | | Operating revenue | | | | | | | | | | Natural gas | | $ | 17,523,917 | | $ | — | | $ | 17,523,917 | Natural gas liquids | | | 532,270 | | | — | | | 532,270 | Oil and condensate | | | 5,994,331 | | | — | | | 5,994,331 | Gathering and compression fees | | | — | | | 3,737,355 | | | 3,737,355 | Intersegment gathering and compression fees | | | — | | | 1,064,223 | | | 1,064,223 | | | | 24,050,518 | | | 4,801,578 | | | 28,852,096 | | | | | | | | | | | Reconciliation of operating revenue | | | | | | | | | | Elimination of intersegment revenues | | | | | | | | | (1,064,223) | Total consolidated operating revenue(1)(3) | | | | | | | | | 27,787,873 | | | | | | | | | | | Operating costs and expenses | | | | | | | | | | Gathering, transportation, and compression | | | 3,978,175 | | | — | | | 3,978,175 | Other lease operating expense | | | 1,240,508 | | | — | | | 1,240,508 | Gathering system operating expenses | | | — | | | 1,166,446 | | | 1,166,446 | Intersegment other lease operating expense | | | 1,064,223 | | | — | | | 1,064,223 | Impairment | | | 2,676,669 | | | — | | | 2,676,669 | Depletion, depreciation, amortization and accretion | | | 6,065,544 | | | 611,967 | | | 6,677,511 | Segment operating income | | $ | 9,025,399 | | $ | 3,023,165 | | $ | 10,984,341 | | | | | | | | | | | Reconciliation of segment operating income | | | | | | | | | | Salary expense | | | | | | | | | (1,789,792) | Stock based compensation | | | | | | | | | (771,676) | Other general and administrative | | | | | | | | | (1,490,504) | Elimination of intersegment other lease operating expenses | | | | | | | | | 1,064,223 | Interest income | | | | | | | | | 32,546 | Interest expense | | | | | | | | | (32,117) | Loss on derivative contracts | | | | | | | | | 1,111,693 | Other income | | | | | | | | | (33,338) | Net income before income tax expense | | | | | | | | $ | 9,075,376 | | | | | | | | | | | Capital expenditures (2) | | $ | 11,142,744 | | $ | 228,327 | | $ | 11,371,071 | Segment assets (3) | | $ | 99,073,244 | | $ | 6,358,460 | | $ | 105,431,704 | | | | | | | | | | | Total segment assets reconciled to consolidated amounts are as follows: | | | | | | | | | | Total segment assets | | | | | | | | $ | 105,431,704 | Current assets, net | | | | | | | | | 16,533,328 | Other property and equipment | | | | | | | | | 883,319 | Operating lease right-of-use asset | | | | | | | | | 295,317 | Restricted cash | | | | | | | | | 470,000 | Total assets | | | | | | | | $ | 123,613,668 |
| (1) | Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the six months ended June 30, 2026 and 2025 have been eliminated upon consolidation. For the six months ended June 30, 2026, two purchasers each accounted for 10% or more of our total revenue: HF Sinclair (23%) and Firebird Energy (13%). For the six months ended June 30, 2025, three purchasers each accounted for 10% or more of our total revenue: Expand Energy Marketing (19%) and Ares Energy (18%) from the upstream segment and Williams (17%) from the gas gathering segment. |
| (2) | Capital expenditures for the Upstream segment consist primarily of the acquisition of properties, and the equipping, drilling, and completing of wells while Gas Gathering consists of expenditures relating to the expansion and completion of the gathering and compression facility. |
| (3) | Our upstream segment includes Canadian revenue and assets for the six months ended June 30, 2026 of $0.3 million and $7.0 million, respectively. Our upstream segment includes Canadian revenue and assets for the six months ended June 30, 2025 of $0.6 million and $7.9 million, respectively. |
| | | | | | | | | | | | Upstream | | Gas Gathering | | Total | As of and for the three months ended June 30, 2026 | | | | | | | | | | Operating revenue | | | | | | | | | | Natural gas | | $ | 3,767,497 | | $ | — | | $ | 3,767,497 | Natural gas liquids | | | 1,386,889 | | | — | | | 1,386,889 | Oil and condensate | | | 11,770,530 | | | — | | | 11,770,530 | Gathering and compression fees | | | — | | | 1,336,740 | | | 1,336,740 | Intersegment gathering and compression fees | | | — | | | 369,019 | | | 369,019 | | | | 16,924,916 | | | 1,705,759 | | | 18,630,675 | | | | | | | | | | | Reconciliation of operating revenue | | | | | | | | | | Elimination of intersegment revenues | | | | | | | | | (369,019) | Total consolidated operating revenue(1)(3) | | | | | | | | | 18,261,656 | | | | | | | | | | | Operating costs and expenses | | | | | | | | | | Gathering, transportation, and compression | | | 2,354,275 | | | — | | | 2,354,275 | Other lease operating expense | | | 3,975,918 | | | — | | | 3,975,918 | Gathering system operating expenses | | | — | | | 508,475 | | | 508,475 | Intersegment other lease operating expense | | | 369,019 | | | — | | | 369,019 | Gain on sale of oil and gas properties | | | (4,174,368) | | | — | | | (4,174,368) | Depletion, depreciation, amortization and accretion | | | 2,633,029 | | | 171,078 | | | 2,804,107 | Segment operating income | | $ | 11,767,043 | | $ | 1,026,206 | | $ | 12,424,230 | | | | | | | | | | | Reconciliation of segment operating income | | | | | | | | | | Salary expense | | | | | | | | | (2,667,754) | Stock based compensation | | | | | | | | | (547,527) | Transaction costs | | | | | | | | | (202,532) | Other general and administrative | | | | | | | | | (997,060) | Elimination of intersegment other lease operating expenses | | | | | | | | | 369,019 | Interest income | | | | | | | | | 24,785 | Interest expense | | | | | | | | | (877,267) | Gain on derivative contracts | | | | | | | | | 2,245,470 | Other expense | | | | | | | | | (208,658) | Net income before income tax expense | | | | | | | | $ | 9,562,706 | | | | | | | | | | | Capital expenditures (2) | | $ | 8,648,197 | | $ | (164,581) | | $ | 8,483,616 |
| | | | | | | | | | | | Upstream | | Gas Gathering | | Total | As of and for the three months ended June 30, 2025 | | | | | | | | | | Operating revenue | | | | | | | | | | Natural gas | | $ | 6,910,344 | | $ | — | | $ | 6,910,344 | Natural gas liquids | | | 145,020 | | | — | | | 145,020 | Oil and condensate | | | 2,724,364 | | | — | | | 2,724,364 | Gathering and compression fees | | | — | | | 1,845,005 | | | 1,845,005 | Intersegment gathering and compression fees | | | — | | | 507,365 | | | 507,365 | | | | 9,779,728 | | | 2,352,370 | | | 12,132,098 | | | | | | | | | | | Reconciliation of operating revenue | | | | | | | | | | Elimination of intersegment revenues | | | | | | | | | (507,365) | Total consolidated operating revenue(1)(3) | | | | | | | | | 11,624,733 | | | | | | | | | | | Operating costs and expenses | | | | | | | | | | Gathering, transportation, and compression | | | 1,522,390 | | | — | | | 1,522,390 | Other lease operating expense | | | 940,395 | | | — | | | 940,395 | Gathering system operating expenses | | | — | | | 613,795 | | | 613,795 | Intersegment other lease operating expense | | | 507,365 | | | — | | | 507,365 | Impairment | | | 2,670,000 | | | — | | | 2,670,000 | Depletion, depreciation, amortization and accretion | | | 2,872,103 | | | 329,551 | | | 3,201,654 | Segment operating income | | $ | 1,267,475 | | $ | 1,409,024 | | $ | 2,169,134 | | | | | | | | | | | Reconciliation of segment operating income | | | | | | | | | | Salary expense | | | | | | | | | (1,079,670) | Stock based compensation | | | | | | | | | (385,838) | Other general and administrative | | | | | | | | | (382,208) | Elimination of intersegment other lease operating expenses | | | | | | | | | 507,365 | Interest income | | | | | | | | | 17,247 | Interest expense | | | | | | | | | (19,906) | Gain on derivative contracts | | | | | | | | | 2,573,863 | Other expense | | | | | | | | | (10,839) | Net income before income tax expense | | | | | | | | $ | 3,389,148 | | | | | | | | | | | Capital expenditures (2) | | $ | 3,502,977 | | $ | 124,052 | | $ | 3,627,029 |
| (1) | Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the three months ended June 30, 2026 and 2025 have been eliminated upon consolidation. For the three months ended June 30, 2026, five purchasers each accounted for 10% or more of our total revenue: HF Sinclair (21%), Firebird Energy (18%), Wyoming Refining Company (16%), Western Gas (12%), from the upstream segment and Williams (10%) from the gas gathering segment. For the three months ended June 30, 2025, three purchasers each accounted for 10% or more of our total revenue: Expand Energy Marketing (23%) and Ares Energy (17%) from the upstream segment and Williams (19%) from the gas gathering segment. |
| (2) | Capital expenditures for the Upstream segment consist primarily of the acquisition of properties, and the equipping, drilling, and completing of wells while Gas Gathering consists of expenditures relating to the expansion and completion of the gathering and compression facility. |
| (3) | Our upstream segment includes Canadian revenue for the three months ended June 30, 2026 of $0.2 million. Our upstream segment includes Canadian revenue for the three months ended June 30, 2025 of $0.5 million. |
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