text
stringlengths 0
1.95M
|
|---|
disclosure requirements, and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair |
value measures. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in |
an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most |
advantageous market for that asset or liability. There are three levels of |
inputs to fair value measurements – Level 1, meaning the use of quoted prices for identical instruments in active markets; Level |
2, meaning the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in |
markets that are not active or are directly or indirectly observable; and Level 3, meaning the use of unobservable inputs. We use Level |
1 inputs for fair value measurements whenever there is an active market, with actual quotes, market prices, and observable inputs on the |
measurement date. We use Level 2 inputs for fair value measurements whenever there are quoted prices for similar securities in an active |
market or quoted prices for identical securities in an inactive market. We use observable market data whenever available. 39 RESULTS |
OF OPERATIONS For the three months ended June 30, For the six months ended June 30, 2023 2022 2023 2022 (US $ in thousands) (US $ in thousands) Operating costs and expens General and administrative expenses 1,271 1,550 2,774 2,985 Other 1,016 946 1,599 1,657 Impairment of unproved oil and gas properties 48 - 93 - Subtotal Operating costs and expenses 2,335 2,496 4,466 4,642 Other expense (income), net (1 ) 101 7 121 Net loss 2,334 2,597 4,473 4,763 Revenue. We currently have no revenue generating operations. Operating |
costs and expenses. Operating costs and expenses for the three and six months ended June 30, 2023 were $2,335,000 and $4,466,000, |
respectively, compared to $2,496,000 and $4,642,000, respectively, for the three and six months ended June 30, 2022. General |
and administrative expenses. General and administrative expenses (“G&A expenses”) for the three and six months ended |
June 30, 2023 were $1,271,000 and $2,774,000, respectively, compared to $1,550,000 and $2,985,000, respectively, for the three and six |
months ended June 30, 2022. This expense grouping includes salaries, benefits, stock option expenses and professional fees. G&A expenses |
decreased $279,000, or 18%, during the most recent quarter versus the prior year primarily due to lower salaries expenses, legal fees |
and expenses associated with stock option grants. G&A expenses decreased $211,000, or 7%, during the first six months of 2023 as |
compared to the six months of 2022, primarily due to lower salaries expenses and expenses associated with stock option grants. Other |
expense. Other expenses during the three and six months ended June 30, 2023 were $1,016,000 and $1,599,000, respectively, compared |
to $946,000 and $1,657,000, respectively, for the three and six months ended June 30, 2022. Other general and administrative expenses |
are comprised of non-compensation and non-professional expenses incurred. Other expenses increased $70,000, or about 7%, for the three |
months ended June 30, 2023 as a result of higher annual meeting expenses in 2023 with a partial offset of lower travel expenses. Other |
expenses for the six months ended June 30, 2023 were lower by $58,000, or about 3.5%, and this variance is fairly minimal. Impairment |
of unproved oil and gas properties. Impairment of unproved oil and gas properties expenses during the three and six months ended |
June 30, 2023 were $48,000 and $93,000 compared to nil and nil for the three and six months ended June 30, 2022. The expenses recorded |
in 2023 are post impairment charges to the impairment recorded during 2022 related to the MJ-2 well. Other |
expense (income), net. Other expenses (income) during the three and six months ended June 30, 2023 were ($1,000) and $7,000, respectively, |
compared to $101,000 and $121,000, respectively, for the three and six months ended June 30, 2022. The expenses in this category are |
comprised of foreign currency exchange costs, primarily the New Israeli Shekel (NIS) to the US dollar, and the financial expenses/income. |
Overall, for the six months ended June 30, 2022, total expenses in this category are $114,000 lower due to the relative strengthening |
of the USD to the NIS during 2023. Net |
Loss. Net loss for the three and six months ended June 30, 2023 were $2,334,000 and $4,473,000 compared to $2,597,000 and $4,763,000 |
for the three and six months ended June 30, 2022. Liquidity |
and Capital Resources Liquidity |
is a measure of a company’s ability to meet potential cash requirements. As discussed above, we have historically met our capital |
requirements through the issuance of common stock as well as proceeds from the exercise of warrants and options to purchase common shares. Our ability to continue as |
a going concern is dependent upon obtaining the necessary financing to complete further exploration and development activities and generate |
profitable operations from our oil and natural gas interests in the future. Our current operations are dependent upon the adequacy of |
our current assets to meet our current expenditure requirements and the accuracy of management’s estimates of those requirements. Should |
those estimates be materially incorrect, our ability to continue as a going concern will be impaired. Our financial statements for |
the six months ended June 30, 2023 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement |
of liabilities and commitments in the normal course of business. We have incurred a history of operating losses and negative cash |
flows from operations. Therefore, there is substantial doubt about our ability to continue as a going concern for one year from the |
date the financials were issued. 40 At |
June 30, 2023, we had approximately $518,000 in cash and cash equivalents compared to $1,735,000 at December 31, 2022, which does not |
include any restricted funds. Our working capital (current assets minus current liabilities) was ($362,000) at June 30, 2023 and $661,000 |
at December 31, 2022. As |
of June 30, 2023, we provided bank guarantees to various governmental bodies (approximately $930,000) and others (approximately $88,000) |
in respect of our drilling operation in the aggregate amount of approximately $1,018,000. The (cash) funds backing these guarantees are |
held in restricted interest-bearing accounts in Israel and are reported on the Company’s balance sheets as fixed short-term bank |
deposits restricted. During |
the six months ended June 30, 2023, cash used in operating activities totaled $2,392,000. Cash provided by financing activities during |
the six months ended June 30, 2023 was $2,565,000 and is primarily attributable to proceeds received from the Dividend Reinvestment and |
Stock Purchase Plan (the “DSPP” or the “Plan”). Net cash used in investing activities such as unproved oil and |
gas properties, equipment and spare parts was $1,729,000 for the six months ended June 30, 2023. During |
the six months ended June 30, 2022, cash used in operating activities totaled $3,424,000. Cash provided by financing activities during |
the six months ended June 30, 2022 was $12,994,000 and is primarily attributable to proceeds received from the Dividend Reinvestment |
and Stock Purchase Plan (the “DSPP” or the “Plan”). Net cash used in investing activities such as unproved oil |
and gas properties, equipment and spare parts was $8,448,000 for the six months ended June 30, 2022. Accounting standards require management to evaluate our ability to |
continue as a going concern for a period of one year subsequent to the date of the filing of this Form 10-Q. We expect to incur additional |
significant expenditures to further our exploration and development programs. While we raised approximately $921,000 during the period |
July 1, 2023 through August 8, 2023, we will need to raise additional funds in order to continue our exploration and development activities |
in our license area. Additionally, we estimate that, when we are not actively drilling a well, our expenditures are approximately $600,000 per |
month excluding exploratory operational activities. However, when we are actively drilling a well, we estimate an additional minimum expenditure |
of approximately $2,500,000 per month. The above estimates are subject to change. Subject to the qualifications specified below, management |
believes that our existing cash balance, excluding anticipated proceeds under the DSPP, will be sufficient to finance our plan of operations |
through August 2023. The outbreak of the coronavirus has to date significantly disrupted |
business operations, including our operations, and resulted in significantly increased unemployment in the general economy. The extent |
to which the coronavirus impacts our operations, specifically our capital raising efforts, as well as our ability to continue our exploratory |
efforts, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration |
of the outbreak, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus |
or treat its impact, among others. No |
assurance can be provided that we will be able to raise the needed operating capital. Even |
if we raise the needed funds, there are factors that can nevertheless adversely impact our ability to fund our operating needs, including |
(without limitation), unexpected or unforeseen cost overruns in planned non-drilling exploratory work in existing license areas, the |
costs associated with extended delays in undertaking the required exploratory work, and plugging and abandonment activities which is |
typical of what we have experienced in the past. The financial information |
contained in these consolidated financial statements has been prepared on a basis that assumes that we will continue as a going concern |
for one year from the date the financials were issued, which contemplates the realization of assets and the satisfaction of liabilities |
and commitments in the normal course of business. This financial information and these condensed consolidated financial statements do |
not include any adjustments that may result from the outcome of this uncertainty. Off-Balance |
Sheet Arrangements We |
do not currently use any off-balance sheet arrangements to enhance our liquidity or capital resource position, or for any other purpose. Recently |
Issued Accounting Pronouncements The |
Company does not believe that the adoption of any recently issued accounting pronouncements in 2023 had a significant impact on our financial |
position, results of operations, or cash flow. 41 ITEM |
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market |
risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes |
may be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. In the |
normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest |
rates. Foreign |
Currency Exchange Rate Risks. A portion of our expenses, primarily labor expenses and certain supplier contracts, are denominated |
in New Israeli Shekels (“NIS”). As a result, we have significant exposure to the risk of fluctuating exchange rates with |
the U.S. Dollar (“USD”), our primary reporting currency. During the period January 1, 2023 through June 30, 2023, the USD |
has fluctuated by approximately 5.1% against the NIS (the USD strengthened relative to the NIS). Also, during the period January 1, 2022 |
through December 31, 2022, the USD fluctuated by approximately 13.2% against the NIS (the USD strengthened relative to the NIS). Continued |
strengthening of the US dollar against the NIS will result in lower operating costs from NIS denominated expenses. To date, we have not |
hedged any of our currency exchange rate risks, but we may do so in the future. Interest Rate Risk. Our exposure to market risk relates to our cash |
and investments. We maintain an investment portfolio of short-term bank deposits and money market funds. The securities in our investment |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.