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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cross Border Resources Inc (CE) | USOTC:XBOR | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
x |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
98-0555508
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
2515 McKinney Avenue, Suite 900
Dallas, TX
|
75201
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
|
(Registrant’s Telephone Number, Including Area Code) | (210) 226-6700 | |
Securities registered pursuant to Section 12(b) of the Act: | None | |
Securities registered pursuant to Section 12(g) of the Act: | Common Stock, par value $.001 | |
(Title of class) |
Large accelerated filer
|
o |
Accelerated filer
|
o |
Non-accelerated filer
|
o (Do not check if a smaller reporting company) |
Smaller reporting company
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x |
Page No. | ||
PART I | ||
10 | ||
20 | ||
34 | ||
34 | ||
40 | ||
40 | ||
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41 | ||
41 | ||
42 | ||
50 | ||
50 | ||
50 | ||
50 | ||
52 | ||
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53 | ||
58 | ||
62 | ||
64 | ||
65 | ||
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66
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·
|
our ability to raise additional capital to fund future capital expenditures;
|
·
|
our ability to generate sufficient cash flow from operations, borrowings or other sources to enable us to fully develop and produce our oil and natural gas properties;
|
·
|
declines or volatility in the prices we receive for our oil and natural gas;
|
·
|
general economic conditions, whether internationally, nationally or in the regional and local market areas in which we do business;
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·
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risks associated with drilling, including completion risks, cost overruns and the drilling of non-economic wells or dry holes;
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·
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uncertainties associated with estimates of proved oil and natural gas reserves;
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·
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the presence or recoverability of estimated oil and natural gas reserves and the actual future production rates and associated costs;
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·
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risks and liabilities associated with acquired companies and properties;
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·
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risks related to integration of acquired companies and properties;
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·
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potential defects in title to our properties;
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·
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cost and availability of drilling rigs, equipment, supplies, personnel and oilfield services;
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·
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geological concentration of our reserves;
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·
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environmental or other governmental regulations, including legislation of hydraulic fracture stimulation;
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·
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our ability to secure firm transportation for oil and natural gas we produce and to sell the oil and natural gas at market prices;
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·
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exploration and development risks;
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·
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management’s ability to execute our plans to meet our goals;
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·
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our ability to retain key members of our management team;
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·
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weather conditions;
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·
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actions or inactions of third-party operators of our properties;
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·
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costs and liabilities associated with environmental, health and safety laws;
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·
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our ability to find and retain highly skilled personnel;
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·
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operating hazards attendant to the oil and natural gas business;
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·
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competition in the oil and natural gas industry; and
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·
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the other factors discussed under Item 1A. “Risk Factors” in this report.
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·
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gain access to and prepare well locations for drilling, including surveying well locations for the purpose of determining specific development drilling sites, clearing ground, draining, road building, and relocating public roads, natural gas lines, and power lines, to the extent necessary in developing the proved reserves;
|
·
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drill and equip development wells, development-type stratigraphic test wells, and service wells, including the costs of platforms and of well equipment such as casing, tubing, pumping equipment, and the wellhead assembly;
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·
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acquire, construct, and install production facilities such as lease flow lines, separators, treaters, heaters, manifolds, measuring devices, and production storage tanks, natural gas cycling and processing plants, and central utility and waste disposal systems; and
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·
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provide improved recovery systems.
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·
|
costs of labor to operate the wells and related equipment and facilities;
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·
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repairs and maintenance;
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·
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materials, supplies, and fuel consumed and supplies utilized in operating the wells and related equipment and facilities;
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·
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property taxes and insurance applicable to proved properties and wells and related equipment and facilities; and
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·
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severance taxes.
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·
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the location of wells;
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·
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the method of drilling and casing wells;
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·
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the surface use and restoration of properties upon which wells are drilled; and
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·
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the plugging and abandonment of wells.
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·
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our proved reserves;
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·
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the level of oil and natural gas we are able to produce from existing wells;
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·
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the prices at which our oil and natural gas are sold;
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·
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our ability to acquire, locate and produce new reserves; and
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·
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the ability of our banks to lend.
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·
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a substantial portion of operating cash flow being dedicated to the payment of principal and interest;
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·
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us being more vulnerable to competitive pressures and economic downturns; and
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·
|
restrictions on our operations, including our ability to pay dividends.
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·
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worldwide and regional economic conditions impacting the global supply and demand for oil and natural gas;
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·
|
the price and quantity of imports of foreign oil and natural gas;
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·
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the actions of the Organization of Petroleum Exporting Countries, or OPEC, and other state-controlled oil companies relating to oil and natural gas price and production control;
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·
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political conditions in or affecting other oil-producing and natural gas-producing countries, including the current conflicts in the Middle East and conditions in South America and Russia;
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·
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the level of global oil and natural gas inventories;
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·
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localized supply and demand fundamentals;
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·
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the availability of refining capacity;
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·
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price and availability of transportation and pipeline systems with adequate capacity;
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·
|
weather conditions and natural disasters;
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·
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governmental regulations;
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·
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speculation as to the future price of oil and the speculative trading of oil and natural gas futures contracts;
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·
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price and availability of competitors’ supplies of oil and natural gas;
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·
|
energy conservation and environmental measures;
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·
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technological advances affecting energy consumption;
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·
|
the price and availability of alternative fuels and energy sources; and
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·
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domestic and international drilling activity.
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·
|
the timing and amount of capital expenditures;
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·
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the operators’ expertise and financial resources;
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·
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the approval of other participants in drilling wells; and
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·
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the selection of suitable technology.
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·
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shortages of or delays in obtaining equipment and qualified personnel;
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·
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facility or equipment malfunctions;
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·
|
unexpected operational events;
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·
|
pressure or irregularities in geological formations;
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·
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adverse weather conditions, such as flooding;
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·
|
reductions in oil and natural gas prices;
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·
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delays imposed by or resulting from compliance with regulatory requirements;
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·
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proximity to and capacity of transportation facilities;
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·
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title problems;
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·
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limitations in the market for oil and natural gas; and
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·
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costs and availability of drilling rigs, equipment, supplies, personnel and oilfield services.
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·
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evacuation of personnel and curtailment of operations;
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·
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damage to drilling rigs or other facilities, resulting in suspension of operations;
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·
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inability to deliver materials to worksites; and
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·
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damage to pipelines and other transportation facilities.
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·
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accidents resulting in serious bodily injury and the loss of life or property;
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·
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liabilities from accidents or damage by our equipment;
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·
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well blowouts;
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·
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cratering (catastrophic failure);
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·
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explosions;
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·
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uncontrollable flows of oil, natural gas or well fluids;
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·
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abnormally pressurized formations;
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·
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fires;
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·
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reservoir damage;
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·
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oil spills;
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·
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pollution and other damage to the environment; and
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·
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releases of toxic gas.
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·
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general domestic and worldwide economic conditions;
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·
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industry conditions, including fluctuations in the price of oil and natural gas;
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·
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governmental regulation of the oil and natural gas industry, including environmental regulation and regulation of fracture stimulation activities;
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·
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liabilities inherent in oil and natural gas operations;
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·
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geological, technical, drilling and processing problems;
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·
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unanticipated operating events which can reduce production or cause production to be shut in or delayed;
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·
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failure to obtain industry partner and other third party consents and approvals, when required;
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·
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stock market volatility and market valuations;
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·
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competition for, among other things, capital, acquisition of reserves, undeveloped land and skilled personnel;
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·
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political conditions in oil and natural gas producing regions;
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·
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revenue and operating results failing to meet expectations in any particular period;
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·
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investor perception of the oil and natural gas industry;
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·
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limited trading volume of our common stock;
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·
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announcements relating to our business or the business of our competitors;
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·
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the sale of assets;
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·
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our liquidity; and
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·
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our ability to raise additional funds.
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Reserves
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||||||||||||
Estimated Proved Reserves Data: (1)
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Oil
(MBbls)
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Natural Gas
(MMcf)
|
Total
(MBoe)
|
|||||||||
Proved developed reserves
|
804 | 1,336 | 1,027 | |||||||||
Proved undeveloped reserves
|
467 | 359 | 527 | |||||||||
Total proved reserves
|
1,271 | 1,695 | 1,554 |
(1)
|
Prices used are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January 2012 through December 2012. For oil volumes, the average NYMEX posted price of $94.68 per Bbl is adjusted for quality, transportation fees and a regional price differential. For natural gas volumes, the average Henry Hub spot price of $2.76 per Mcf is adjusted for energy content, transportation fees and a regional price differential. The adjusted oil and natural gas prices of $87.84 per barrel and $5.13 per Mcf, respectively, are held constant throughout the lives of the properties.
|
(in thousands)
|
As of
December 31, 2012
|
|||
PV-10 (1)
|
$ | 27,471 | ||
Standardized measure
|
$ | 18,640 |
|
(1)
|
PV-10 is a non-GAAP financial measure as defined by the SEC. The closest GAAP measure to PV-10 is the standardized measure of discounted net cash flows. The standardized measure differs from PV-10 because standardized measure includes the effect of future income taxes. We believe that the presentation of PV-10 is relevant and useful to our investors as supplemental disclosure to the standardized measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our proved reserves before taking into account future corporate income taxes and our current tax structure. The following table provides a reconciliation of our PV-10 to our standardized measure:
|
(in thousands)
|
||||
PV-10
|
$ | 27,471 | ||
Future income taxes
|
(12,218 | ) | ||
Discount of future income taxes at 10% per annum
|
3,369 | |||
Standardized measure
|
$ | 18,640 |
Year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
(dollars in thousands, except per unit prices)
|
||||||||
Revenue
|
||||||||
Oil and natural gas sales
|
$ | 14,781,497 | $ | 6,584,134 | ||||
|
||||||||
Net production sold
|
||||||||
Oil (Bbl)
|
149,600 | 56,740 | ||||||
Natural gas (Mcf)
|
285,885 | 252,690 | ||||||
Total (Boe)
|
197,247 | 98,855 | ||||||
|
||||||||
Average sales prices
|
||||||||
Oil ($/Bbl)
|
$ | 87.95 | $ | 86.70 | ||||
Natural gas ($/Mcf)
|
4.47 | 6.03 | ||||||
Total average price ($/Boe)
|
$ | 73.19 | $ | 65.17 | ||||
|
||||||||
Costs and expenses (per Boe)
|
||||||||
Production taxes
|
$ | 5.94 | $ | 5.41 | ||||
Lease operating expenses
|
11.57 | 12.69 | ||||||
Natural gas transportation and marketing expenses
|
0.73 | 0.11 |
Developed Acres
|
Undeveloped Acres
|
|||||||||||||
Gross (1)
|
Net (2)
|
Gross (1)
|
Net (2)
|
|||||||||||
9,277 | 3,834 | 856,616 | 290,009 |
Oil Wells
|
Natural Gas Wells
|
|||||||||||||
Gross
(1)
|
Net
(2)
|
Gross
(1)
|
Net
(2)
|
|||||||||||
127 | 56.2 | 34 | 2.9 |
Development Wells
|
Exploratory Wells
|
|||||||||||||||
Year Ended December 31,
|
Productive
|
Dry
|
Productive
|
Dry
|
||||||||||||
2012
|
1.91 | 0 | 0.13 | 0 | ||||||||||||
2011
|
0.36 | 0 | 1.17 | 0 | ||||||||||||
2010
|
0.36 | 0.05 | 0.22 | 0 |
High
|
Low
|
|||||||
Fiscal Year 2012:
|
||||||||
Fourth Quarter
|
$ | 1.25 | $ | 0.86 | ||||
Third Quarter
|
$ | 1.62 | $ | 1.10 | ||||
Second Quarter
|
$ | 1.99 | $ | 1.50 | ||||
First Quarter
|
$ | 2.70 | $ | 1.55 | ||||
Fiscal Year 2011:
|
||||||||
Fourth Quarter
|
$ | 1.68 | $ | 1.30 | ||||
Third Quarter
|
$ | 2.24 | $ | 1.15 | ||||
Second Quarter
|
$ | 2.75 | $ | 1.55 | ||||
First Quarter
|
$ | 4.70 | $ | 2.00 |
Year Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
(dollars in thousands, except per unit prices)
|
||||||||
Revenue
|
||||||||
Oil and natural gas sales
|
$ | 14,781,497 | $ | 6,584,134 | ||||
|
||||||||
Net Production sold
|
||||||||
Oil (Bbl)
|
149,600 | 56,740 | ||||||
Natural gas (Mcf)
|
285,885 | 252,690 | ||||||
Total (Boe)
|
197,247 | 98,855 | ||||||
Total (Boe/d) (1)
|
539 | 271 | ||||||
|
||||||||
Average sales prices
|
||||||||
Oil ($/Bbl)
|
$ | 87.95 | $ | 86.70 | ||||
Natural gas ($/Mcf)
|
4.47 | 6.03 | ||||||
Total average price ($/Boe)
|
$ | 73.19 | $ | 65.17 | ||||
|
||||||||
Costs and expenses (per Boe)
|
||||||||
Operating costs
|
$ | 11.57 | $ | 14.52 | ||||
Environmental cleanup
|
10.65 | — | ||||||
Natural gas marketing and transportation expenses
|
0.73 | 0.10 | ||||||
Impairment expense
|
13.35 | 0.50 | ||||||
Production taxes
|
5.94 | 5.62 | ||||||
Depreciation, depletion, and amortization
|
28.75 | 21.30 | ||||||
Gain on sale of oil and gas properties
|
— | (6.06 | ) | |||||
Accretion of discount on asset retirement obligation
|
0.48 | 0.85 | ||||||
General and administrative expense
|
14.45 | 37.07 |
Well Name
|
2012 Oil Produced (Bbls)
|
2012 Gas Produced (Mcf)
|
2012 BOE Produced
|
Bradley 29 Fed Com 3-H
|
811
|
1,269
|
1,022
|
Bradley 30 Fed Com 1-H
|
3,877
|
9,551
|
5,468
|
Bradley 30 Fed Com 2-H
|
1,295
|
2,466
|
1,706
|
Bradley 30 Fed Com 3-H
|
483
|
631
|
588
|
Buck Baker 15 #2
|
2,397
|
3,369
|
2,959
|
Coleman 10 #2
|
863
|
507
|
948
|
Fecta 33 Fed Com 1-H
|
11,719
|
6,883
|
12,867
|
Grave Digger State 3-H
|
1,323
|
875
|
1,469
|
Hefley 24 #1
|
1,269
|
4,321
|
1,974
|
High Lonesome 26 2-H
|
572
|
2,728
|
1,026
|
Leo 3 Fed Com 1-H
|
10,997
|
4,715
|
11,753
|
Leo 3 Fed Com 2-H
|
2,110
|
2,606
|
2,544
|
Little Eddy Unit #5 A
|
519
|
85
|
533
|
Lusk SE Fed Com 33 2-H
|
22,497
|
22,774
|
26,292
|
Lusk SE Fed Com 33 3-H
|
31,307
|
22,225
|
35,012
|
Lusk SE Fed Com 34 2-H
|
713
|
2,065
|
1,057
|
Ocelot Fed Com 34 1-H
|
4,838
|
4,378
|
5,567
|
Roo 22 State #7
|
693
|
105
|
711
|
Zircon 2 State 1-H
|
8,040
|
14,261
|
10,416
|
Zircon 2 LI State 1-H
|
6,037
|
6,073
|
7,050
|
Totals
|
112,360
|
111,887
|
130,962
|
Payments Due By Period
|
||||||||||||||||||||
(in thousands)
|
Less than one year
|
One to three years
|
Three to five years
|
More than five years
|
Total
|
|||||||||||||||
Line of credit
|
$ | — | $ | 8,750,000 | $ | — | $ | — | $ | 8,750,000 | ||||||||||
Creditors payable
|
758,167 | 594,616 | — | — | 1,352,783 | |||||||||||||||
Unsecured subordinated debt
|
764,278 | — | — | — | 764,278 | |||||||||||||||
Environmental cleanup
|
— | 2,100,000 | — | — | 2,100,000 | |||||||||||||||
Asset retirement obligations
|
452,013 | 1,372,652 | 129,149 | 1,363,544 | 3,317,358 | |||||||||||||||
Operating lease obligations
|
42,801 | — | — | — | 42,801 | |||||||||||||||
Total
|
$ | 2,017,259 | $ | 12,817,268 | $ | 129,149 | $ | 1,363,544 | $ | 16,327,220 |
·
|
We have a limited number of internal and external staff and therefore are not able to implement proper segregation of duties and review procedures.
|
Name
|
Age
|
Position
|
||
Alan W. Barksdale
|
36
|
Non-Executive Chairman of the Board of Directors
|
||
Earl Sebring
|
63
|
Interim President
|
||
Kenneth S. Lamb
|
37
|
Chief Accounting Officer, Secretary, and Treasurer
|
||
Richard F. LaRoche Jr.
|
67
|
Director
|
||
Paul N. Vassilakos
|
36
|
Director
|
||
John W. Hawkins
|
66
|
Director
|
||
Randell K. Ford
|
62
|
Director
|
Name and Principal Position
|
Year Ended
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($)
|
All Other Compensation
($)
|
Total
($)
|
||||||||||||||||
Earl M. Sebring |
December 31, 2012
|
125,000 | — | — | — | 125,000 | ||||||||||||||||
Interim President |
December 31, 2011
|
— | — | — | 91,633 | (1) | 91,633 | (1) | ||||||||||||||
|
||||||||||||||||||||||
Everett Willard Gray, II | December 31, 2012 | 83,333 | 51,475 | 152,000 | (2) | 245,649 | (2) | 532,457 | ||||||||||||||
Former Chairman of the | December 31, 2011 | 200,000 | 72,500 | 278,348 | 118,384 | 669,232 | ||||||||||||||||
Board of Directors and | December 31, 2010 | 75,000 | 0 | 0 | 5,244 | 80,244 | ||||||||||||||||
Chief Executive Officer | July 31, 2010 | 180,000 | 0 | 0 | 12,586 | 192,586 | ||||||||||||||||
Lawrence J. Risley |
December 31, 2012
|
83,333 | 87,250 | — | 424,912 | (3) | 595,495 | |||||||||||||||
Former President and, |
December 31, 2011
|
200,000 | 106,250 | 145,326 | 41,135 | 492,711 | ||||||||||||||||
Chief Operations Officer |
December 31, 2010
|
186,320 | 12,500 | 0 | 8,594 | 207,414 | ||||||||||||||||
Kenneth S. Lamb
Chief Accounting Officer, Secretary, and Treasurer
|
December 31, 2012
|
— | — | — | 57,695 | (4) | 57,695 | (4) | ||||||||||||||
Nancy S. Stephenson |
December 31, 2012
|
92,500 | 3,750 | — | 62,250 | 158,500 | ||||||||||||||||
Former Chief Accounting Officer, Secretary, and Treasurer |
December 31, 2011
|
42,917 | 5,000 | 0 | 15,650 | 63,567 |
(1)
|
Represents amounts paid to Mr. Sebring in 2011 in consideration of Mr. Sebring providing geological consulting services to the Company through his wholly-owned company Sebring Exploration of Texas, Inc.
|
(2)
|
Represents $239,149 paid to Mr. Gray under the change of control clause in his employment agreement and an auto allowance of $6,500. In November 2012, Mr. Gray agreed to forgo the remaining $239,149 owed to him under the change of control clause of his employment agreement in exchange for 150,000 shares of the Company’s stock. On the date of issuance, the stock had a value of $152,000 which is report under stock awards.
|
(3)
|
Represents $424,912 paid to Mr. Risley pursuant to the change of control clause in his employment agreement.
|
(4)
|
Mr. Lamb is an employee of Red Mountain Resources, the Company’s largest shareholder, and receives no direct remuneration from the Company. The Company reimburses Red Mountain Resources approximately $10,000 per month for the use of Mr. Lamb’s services. Such amounts are reported as all other compensation in the table above.
|
(5)
|
Represents $56,250 paid to Ms. Stephenson under the terms of the letter agreement pertaining to her employment with the Company and $6,000 for accrued vacation owed to her upon her resignation. In December 2012, Ms. Stephenson agreed to forgo $18,750 of her change of control payment.
|
·
|
Each non-employee director receives an annual cash fee of $8,000;
|
·
|
Each non-employee director receives a cash fee of $500 for each telephonic meeting of the Board and committee that such director participates in;
|
·
|
Each non-employee director receives a cash fee of $1,500 for each in person meeting of the Board and committee that such director participates in; and
|
·
|
Each non-employee director receives a cash fee of $500 for each in person meeting held with management that such director participates in.
|
Name
|
Fees Earned or Paid in Cash ($)
|
|||
Alan W. Barksdale
|
13,000 | |||
Paul N. Vassilakos
|
14,000 | |||
John W. Hawkins
|
23,000 | |||
Richard F. LaRoche Jr
|
21,500 | |||
Randell K. Ford
|
11,500 | |||
Brad E. Heidelberg (1)
|
9,500 |
(1)
|
Mr. Heidelberg received compensation pro rated for service from January 1, 2012 through the date of his resignation on May 8, 2012, in addition to cash fees for meetings in which Mr. Heidelberg participated.
|
Name and Address of Beneficial Owner (1)
|
Amount of Beneficial Ownership (2)
|
Percentage of Outstanding Common Stock (2)
|
||
Alan W. Barksdale
|
16,542,945
|
(3)
|
83.4%
|
|
Richard F. Laroche, Jr.
|
838,331
|
(4)
|
5.1%
|
|
John W. Hawkins
|
10,000
|
*
|
||
Paul N. Vassilakos
|
—
|
—
|
||
Randell K. Ford
|
—
|
—
|
||
Earl M. Sebring
|
218,000
|
1.3%
|
||
Kenneth S. Lamb
|
—
|
—
|
||
All executive officers and directors as a group (7 persons)
|
17,609,276
|
6.4%
|
||
Red Mountain Resources, Inc.
|
16,542,945
|
(3)
|
83..4%
|
|
2515 McKinney Ave, Suite 900
|
||||
Dallas, TX 75201
|
*
|
Less than one percent.
|
(1)
|
Unless noted otherwise, the address for the above individuals is 2515 McKinney Ave., Suite 900, Dallas, Texas 75201. Unless noted otherwise, each of the above persons has sole voting and investment power with respect to all shares of common stock beneficially owned by them.
|
(2)
|
Based on 16,301,946 shares of common stock issued and outstanding on December 31, 2012.
|
(3)
|
Represents 14,040,114 shares of Common Stock held by Red Mountain. This also includes: (i) warrants to purchase 366,667 shares of Common Stock held by Red Mountain and (ii) warrants to purchase 2,136,164 shares of Common Stock held by Black Rock Capital, Inc., a wholly owned subsidiary of Red Mountain, all of which are immediately exercisable.
|
(4)
|
Mr. LaRoche is deemed the beneficial owner of 838,331 Shares, or 5.1% of the Issuer’s outstanding common stock, which ownership includes: (i) 94,984 Shares held by LaRoche Family, L.P., of which Mr. LaRoche is a general partner; (ii) 485,013 Shares held by LaRoche Enterprises, L.P., of which Mr. LaRoche is a general partner; (iii) 100,000 Shares held by Bushy Forest L.P.; of which Mr. LaRoche is a general partner; (iv) warrants to purchase 133,334 Shares held by LaRoche Enterprises, L.P, of which Mr. LaRoche is general partner; and (v) stock options to purchase 25,000 Shares held by Mr. LaRoche. As general partner of LaRoche Family, L.P., LaRoche Enterprises, L.P. and Bushy Forest, L.P., Mr. LaRoche has sole power to vote and to dispose of the Shares; accordingly, he is deemed to have beneficial ownership over such shares. However, Mr. LaRoche disclaims beneficial ownership of Shares held by the limited partnerships except to the extent of his pecuniary interest therein.
|
(1)
|
The total number of securities available for issuance under the plan cannot exceed 15% of the total number of shares of common stock outstanding. Therefore, as of April 1, 2013, the number of securities remaining available is 15% of 16,301,946 (2,445,292) less outstanding options (87,500).
|
Year ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Audit Fees(a)
|
$ | 161,357 | $ | 103,100 | ||||
Audit-Related Fees
|
— | 8,475 | ||||||
Tax Fees(b)
|
9,775 | 11,487 | ||||||
All Other Fees
|
— | — | ||||||
Total
|
$ | 171,132 | $ | 123,062 |
(a)
|
Audit services billed consisted of the audits of our annual consolidated financial statements, audits of internal control over financial reporting and reviews of our quarterly condensed consolidated financial statements.
|
(b)
|
Tax fees include tax compliance and tax planning.
|
|
ROBERT
F.
DARILEK,
C.P.A.
STEVEN
H.
BUTLER,
C.P.A.
_____________________________
2702 N. Loop 1604 East, Ste. 202
San Antonio, Texas 78232
Phone (210) 979-0055
Fax (210) 979-0058
|
/s/DARILEK BUTLER
&
ASSOCIATES, PLLC
|
|
|
December 31,
|
December 31,
|
||||||
|
2012
|
2011
|
||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and Cash Equivalents
|
$
|
241,561
|
$
|
472,967
|
||||
Accounts Receivable – Oil and Natural Gas Sales
|
3,194,725
|
1,184,544
|
||||||
Prepaid Expenses & Other Current Assets
|
465,223
|
1,808,944
|
||||||
Derivative Asset - Current Portion
|
235,825
|
—
|
||||||
Current Tax Asset
|
21,737
|
21,737
|
||||||
Total Current Assets
|
4,159,071
|
3,488,192
|
||||||
Oil and Gas Properties
|
48,248,378
|
34,986,566
|
||||||
Less: Accumulated Depletion, Amortization, and Impairment
|
(16,018,892
|
)
|
(9,667,031
|
)
|
||||
Net Oil and Gas Properties
|
32,229,486
|
25,319,535
|
||||||
Other Assets
|
||||||||
Other Property and Equipment, net of Accumulated Depreciation of $77,190 and $126,473 in 2012 and 2011, respectively
|
53,280
|
95,988
|
||||||
Deferred Bond Costs, net of Accumulated Amortization of $503,854 and $344,300 in 2012 and 2011, respectively
|
—
|
159,554
|
||||||
Deferred Bond Discount, net of Accumulated Amortization of $186,560 and $127,483 in 2012 and 2011, respectively
|
—
|
59,077
|
||||||
Deferred financing costs, net of accumulated amortization of $113,581 and $26,355 in 2012 and 2011, respectively
|
101,045
|
64,746
|
||||||
Derivative Asset, net of Current Portion
|
54,963
|
—
|
||||||
Other Assets
|
54,324
|
54,324
|
||||||
Total Other Assets
|
263,612
|
433,689
|
||||||
TOTAL ASSETS
|
$
|
36,652,169
|
$
|
29,241,416
|
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts Payable - Trade
|
$
|
4,226,547
|
$
|
1,177,383
|
||||
Accounts Payable – Related Party
|
215,495
|
—
|
||||||
Interest Payable – Related Party
|
130,929
|
—
|
||||||
Notes Payable |
—
|
764,278 | ||||||
Accrued Expenses & Other Payables
|
61,065
|
627,810
|
||||||
Deferred Revenues
|
—
|
32,479
|
||||||
Notes Payable – Related Party - Current
|
764,278
|
—
|
||||||
Interest Payable |
—
|
112,659 | ||||||
Bonds Payable - Current Portion
|
—
|
570,000
|
||||||
Creditors Payable - Current Portion
|
758,167
|
186,761
|
||||||
Environmental Liability – Current Portion
|
860,000
|
—
|
||||||
Asset Retirement Obligation – Current Portion
|
452,013
|
—
|
||||||
Deferred Tax Liability
|
21,737
|
—
|
||||||
Derivative Liability - Current Portion
|
—
|
56,908
|
||||||
Total Current Liabilities
|
7,490,231
|
3,528,278
|
||||||
Non-Current Liabilities
|
||||||||
Asset Retirement Obligations
|
2,865,345
|
1,186,260
|
||||||
Deferred Income Tax Liability
|
—
|
21,737
|
||||||
Environmental Liability
|
1,240,000
|
—
|
||||||
Line of Credit
|
8,750,000
|
2,381,000
|
||||||
Derivative Liability, net of Current Portion
|
—
|
28,086
|
||||||
Bonds Payable, net of Current Portion
|
—
|
2,825,000
|
||||||
Creditors Payable, net of Current Portion
|
594,616
|
1,352,783
|
||||||
Total Non-Current Liabilities
|
13,449,961
|
7,794,866
|
||||||
Total Liabilities
|
20,940,192
|
11,323,144
|
||||||
Commitments & Contingencies (Note 10)
|
||||||||
Stockholders’ Equity
|
||||||||
Common Stock ($0.001 par value; 99,000,000 shares authorized and 16,301,946 issued and outstanding as of December 31, 2012 and 16,151,946 as of December 31, 2011)
|
16,302
|
16,152
|
||||||
Additional Paid in Capital
|
32,770,540
|
32,617,690
|
||||||
Accumulated Deficit
|
(17,074,865
|
)
|
(14,715,570
|
)
|
||||
Total Stockholders’ Equity
|
15,711,977
|
17,918,272
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
36,652,169
|
$
|
29,241,416
|
|
December 31, 2012
|
December 31, 2011
|
||||||
Revenues
|
||||||||
Oil and gas sales
|
$
|
14,781,497
|
$
|
6,584,134
|
||||
Other
|
—
|
129,915
|
||||||
Total revenues
|
14,781,497
|
6,714,049
|
||||||
Expenses:
|
||||||||
Operating costs
|
2,281,443
|
1,434,678
|
||||||
Environmental cleanup
|
2,100,000
|
—
|
||||||
Natural gas marketing and transportation expenses
|
143,672
|
10,301
|
||||||
Impairment expense
|
2,633,742
|
49,234
|
||||||
Production taxes
|
1,171,474
|
555,698
|
||||||
Depreciation, depletion, and amortization
|
5,671,202
|
2,105,851
|
||||||
Gain on sale of oil and gas properties
|
—
|
(599,100)
|
||||||
Accretion expense
|
94,556
|
84,428
|
||||||
General and administrative
|
2,851,003
|
3,664,355
|
||||||
Total expense
|
16,947,092
|
7,305,445
|
||||||
Loss from operations
|
(2,165,595)
|
(591,396
|
)
|
|||||
Other income (expense):
|
||||||||
Bond issuance amortization
|
(218,631)
|
(50,385
|
)
|
|||||
Gain (loss) on derivatives
|
575,086
|
(11,771)
|
||||||
Interest expense
|
(547,066
|
)
|
(460,275
|
)
|
||||
Miscellaneous other income
|
(3,089)
|
252,497
|
||||||
Total other income (expense)
|
(193,700
|
)
|
(269,934)
|
|||||
Loss before income taxes
|
(2,359,295
|
)
|
(861,330
|
)
|
||||
Current tax benefit
|
(—
|
)
|
142,330
|
|||||
Deferred tax expense
|
—
|
(142,330
|
)
|
|||||
Income tax expense
|
—
|
|||||||
Net loss
|
$
|
(2,359,295
|
)
|
$
|
(861,330
|
)
|
||
Net loss per share:
|
||||||||
Basic and diluted
|
$
|
(0.15
|
)
|
$
|
(.06
|
)
|
||
Weighted average shares outstanding:
|
||||||||
Basic and diluted
|
16,173,316
|
14,945,782
|
|
December 31, 2012
|
December 31, 2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(2,359,295)
|
$
|
(861,330
|
)
|
|||
Adjustments to reconcile net income (loss) to cash used by operating activities:
|
||||||||
Depreciation, depletion, amortization, and impairment
|
8,304,944
|
2,105,851
|
||||||
Accretion of asset retirement obligations
|
94,556
|
84,428
|
||||||
(Gain) loss on disposition of assets
|
—
|
(583,766
|
)
|
|||||
Share-based compensation
|
—
|
681,294
|
||||||
Amortization of debt discount and deferred financing costs
|
218,631
|
69,041
|
||||||
Change in derivative instruments
|
(375,782)
|
84,994
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(2,010,181
|
)
|
(577,110
|
)
|
||||
Prepaid expenses and other current assets
|
1,343,721
|
(1,750,195
|
)
|
|||||
Accounts payable
|
112,713
|
(2,385,142
|
)
|
|||||
Accounts payable – related party
|
—
|
—
|
||||||
Accrued expenses
|
(413,746
|
)
|
372,143
|
|||||
Deferred income tax
|
—
|
—
|
||||||
Deferred revenue
|
(32,479
|
)
|
(129,915
|
)
|
||||
Interest payable
|
18,270
|
—
|
||||||
Environmental liability
|
2,100,000
|
—
|
||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
7,001,352
|
(2,889,707
|
)
|
|||||
CASH FLOWS USED IN INVESTING ACTIVITIES
|
||||||||
Capital expenditures - oil and gas properties
|
(12,233,698
|
)
|
(2,815,446
|
)
|
||||
Cash impact of merger, net
|
—
|
(62,797)
|
||||||
Proceeds from disposal of oil and gas properties
|
2,250,000
|
799,100
|
||||||
Capital expenditures - other assets
|
—
|
(6,626
|
)
|
|||||
NET CASH USED IN INVESTING ACTIVITIES
|
(9,983,698
|
)
|
(2,085,769
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from issuance of common stock, net of expenses
|
—
|
5,090,728
|
||||||
Borrowings on line of credit
|
7,119,000
|
798,574
|
||||||
Payments on line of credit
|
(750,000
|
)
|
—
|
|||||
Payments to purchase stock options
|
(96,500)
|
|||||||
Proceeds from renewing notes
|
—
|
139,359
|
||||||
Repayments of notes payable
|
—
|
(382,081
|
)
|
|||||
Repayments of bonds
|
(3,395,000
|
)
|
(810,000
|
)
|
||||
Repayments to creditors
|
(186,761
|
)
|
(266,760
|
)
|
||||
Deferred financing costs
|
(36,299)
|
—
|
||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
2,750,940
|
4,473,320
|
||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(231,406
|
)
|
(502,156
|
)
|
||||
Cash and cash equivalents, beginning of period
|
472,967
|
975,123
|
||||||
Cash and cash equivalents, end of period
|
$
|
241,561
|
$
|
472,967
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
|
$
|
269,501
|
$
|
183,440
|
||||
Income taxes paid
|
$
|
—
|
$
|
—
|
||||
NON-CASH TRANSACTIONS
|
||||||||
Oil and natural gas properties included in accounts payable
|
$
|
3,151,947
|
$
|
1,165,024
|
||||
Issuance of common stock to settle liability
|
(153,000)
|
—
|
||||||
Revisions of ARO
|
1,797,626
|
(158,452)
|
||||||
Settlement of ARO
|
(55,915)
|
—
|
||||||
Disposal of ARO
|
(88,650)
|
—
|
||||||
Additions of ARO
|
383,481
|
121,197
|
Common Stock
|
Additional Paid-in | Accumulated | ||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||
Balance at December 31, 2010 (Predecessor)
|
— | — | — | $ | 5,019,213 | $ | 5,019,213 | |||||||||||||
Merger with Doral Corp – January 2011
|
12,476,946 | 12,477 | 27,115,712 | (18,873,453 | ) | 8,254,736 | ||||||||||||||
Shares issued for services
|
75,000 | 75 | 168,675 | — | 168,750 | |||||||||||||||
Share-based compensation
|
— | — | 512,544 | — | 512,544 | |||||||||||||||
Stock issued for cash, net of issuance costs of $479,144
|
3,600,000 | 3,600 | 4,917,259 | — | 4,920,859 | |||||||||||||||
Purchase of stock options from employees
|
— | — | (96,500 | ) | — | (96,500 | ) | |||||||||||||
Net loss attributable to common shareholders
|
— | — | — | (1,196,440 | ) | (1,196,440 | ) | |||||||||||||
Balance at December 31, 2011
|
16,151,946 | 16,152 | 32,617,690 | (14,715,570 | ) | 17,918,272 | ||||||||||||||
Issuance of shares to settle change of control liability with former CEO
|
150,000 | 150 | 152,850 | — | 153,000 | |||||||||||||||
Net loss attributable to common shareholders
|
— | — | — | (2,359,295 | ) | (2,359,295 | ) | |||||||||||||
Balance at December 31, 2012
|
16,301,946 | 16,302 | 32,770,540 | (17,074,865 | ) | 15,711,977 |
Cash and cash equivalents
|
$
|
(62,798
|
)
|
|
Accounts receivable
|
94,810
|
|||
Prepaid expenses and other current assets
|
5,769
|
|||
Proved oil and gas properties
|
10,336,219
|
|||
Property and equipment
|
12,643
|
|||
Other assets
|
228,268
|
|||
Total assets
|
10,614,911
|
|||
Accounts payable
|
(378,079
|
)
|
||
Accounts payable- related party
|
(69,917
|
)
|
||
Accrued liabilities
|
(182,110
|
)
|
||
Long-term debt
|
(1,018,322
|
)
|
||
Notes payable to related party
|
(250,000
|
)
|
||
Asset retirement obligation
|
(630,499
|
)
|
||
Purchase price
|
$
|
8,085,984
|
Year Ended
December 31,
2011
|
||||
Revenues
|
$
|
7,313,149
|
||
Operating (loss)
|
(602,626
|
)
|
||
Net income (loss)
|
(874,245
|
)
|
||
Loss per share
|
$
|
(0.06
|
)
|
December 31,
|
December 31,
|
|||||||
|
2012
|
2011
|
||||||
Asset retirement obligations at beginning of year
|
$
|
1,186,260
|
$
|
508,588
|
||||
Disposal of assets
|
(88,650)
|
—
|
||||||
Settlement of liabilities
|
(55,915)
|
—
|
||||||
Asset retirement obligations acquired in acquisition
|
—
|
630,499
|
||||||
Revision of previous estimates
|
1,797,626
|
(158,452
|
)
|
|||||
Accretion expense
|
94,556
|
84,428
|
||||||
Additions
|
383,481
|
121,197
|
||||||
Asset retirement obligations at end of period
|
$
|
3,317,358
|
$
|
1,186,260
|
||||
Less: current portion
|
452,013
|
—
|
||||||
Long-term portion
|
$
|
2,865,345
|
$
|
1,186,260
|
December 31,
|
December 31,
|
|||||||
|
2012
|
2011
|
||||||
Oil and natural gas properties
|
$ | 48,248,378 | $ | 34,986,566 | ||||
Less accumulated depletion and impairment
|
(16,018,892 | ) | (9,667,031 | ) | ||||
Net oil and natural gas properties capitalized costs
|
$ | 32,229,486 | $ | 25,319,535 |
December 31,
|
December 31,
|
|||||||
|
2012
|
2011
|
||||||
Other property and equipment
|
$ | 130,470 | $ | 222,461 | ||||
Less accumulated depreciation
|
(77,190 | ) | (126,473 | ) | ||||
Net property and equipment
|
$ | 53,280 | $ | 95,988 |
Weighted-
|
||||||||||||
average
|
||||||||||||
Weighted-
|
Remaining
|
|||||||||||
average
|
Contractual
|
|||||||||||
Number of
|
Exercise
|
Term
|
||||||||||
Shares
|
Price
|
(years)
|
||||||||||
Outstanding at December 31, 2010 (Predecessor)
|
— | $ | — | — | ||||||||
Granted
|
1,602,500 | 5.21 | — | |||||||||
Cancelled
|
(965,000 | ) | 5.23 | — | ||||||||
Exercised
|
— | — | — | |||||||||
Forfeited
|
(325,000 | ) | 5.33 | — | ||||||||
Expired
|
(225,000 | ) | 4.80 | — | ||||||||
Outstanding and exercisable at December 31, 2011
|
87,500 | 4.80 | 4.08 | |||||||||
Granted
|
— | — | — | |||||||||
Cancelled
|
— | — | — | |||||||||
Exercised
|
— | — | — | |||||||||
Forfeited
|
— | — | — | |||||||||
Expired
|
— | — | — | |||||||||
Outstanding and exercisable at December 31, 2012
|
87,500 | $ | 4.80 | 3.08 |
Closing market price of stock on grant date
|
$ | 3.11 | ||
Risk-free interest rate
|
2.43 | % | ||
Dividend yield
|
0.00 | % | ||
Volatility factor
|
50 | % | ||
Expected life
|
2.5 years
|
December 31,
|
December 31,
|
|||||||
|
2012
|
2011
|
||||||
Bonds Payable
|
$
|
—
|
$
|
3,495,000
|
||||
Less: Bonds held by the Company
|
—
|
(100,000
|
)
|
|||||
Total
|
$
|
—
|
$
|
3,395,000
|
Price | Volumes |
Fair Value of Outstanding
Derivative Contracts
(1)
as of
|
||||||||||||||||||||
Transaction | Per | Per | December 31, |
December 31,
|
||||||||||||||||||
Date
|
Type
(2)
|
Beginning
|
Ending
|
Unit
|
Month
|
2012
|
2011 | |||||||||||||||
March 2011
|
Swap
|
04/01/2011
|
02/28/20
13
|
$ | 104.55 | 1,000 | $ | 41,019 | $ | 83,594 | ||||||||||||
November 2011
|
Swap
|
12/01/2011
|
11/30/2014
|
$ | 93.50 | 2,000 | 44,942 | (168,588 | ) | |||||||||||||
February 2012
|
Swap
|
03/01/2012
|
02/28/2014
|
$ | 106.50 | 1,000 | 204,827 | - | ||||||||||||||
$ | 290,788 | $ | (84,994 | ) |
(1) The fair value of the Company's outstanding transactions is presented on the balance sheet by counterparty. Currently all of our derivatives are with the same counterparty. The balance is shown as current or long-term based on our estimate of the amounts that will be due in the relevant time periods at currently predicted price levels. Amounts in parentheses indicate liabilities.
|
(2) These crude oil hedges were entered into on a per barrel delivered price basis, using the NYMEX - West Texas Intermediate Index, with settlement for each calendar month occurring following the expiration date, as determined by the contracts.
|
Level 1 –
|
Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that Cross Border Resources, Inc. has the ability to access at the measurement date.
|
Level 2 –
|
Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
|
Level 3 –
|
Unobservable inputs reflect Cross Border Resources, Inc’s judgments about the assumptions market participants would use in pricing the asset of liability since limited market data exists. The Company develops these inputs based on the best information available, using internal and external data.
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
(in thousands)
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
|
Significant or
Other Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value
at December 31,
2012
|
||||||||||||
Assets (liabilities):
|
|
|
|
|
||||||||||||
Asset retirement obligations
|
$
|
c
|
$
|
—
|
$
|
(2,181,107)
|
$
|
(2,181,107
|
)
|
|||||||
Environmental liability
|
(2,100,000)
|
(2,100,000)
|
||||||||||||||
Commodities derivatives
|
— |
|
290,788
|
—
|
290,788
|
|||||||||||
Oil and natural gas properties
|
—
|
—
|
16,602,246
|
16,602,246
|
||||||||||||
Total
|
$
|
—
|
$
|
290,788
|
$
|
12,321,139
|
$
|
12,611,927
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
(in thousands)
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
|
Significant
or
Other Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value
at December 31,
2011
|
||||||||||||
Assets (liabilities):
|
|
|
|
|
||||||||||||
Asset retirement obligations
|
$
|
—
|
$
|
—
|
$
|
(121,197)
|
$
|
(121,197)
|
||||||||
Commodities derivatives
|
(84,994)
|
(84,994)
|
||||||||||||||
Oil and natural gas properties
|
—
|
—
|
3,980,470
|
3,980,470
|
||||||||||||
Total
|
$
|
—
|
$
|
(84,994)
|
$
|
3,859,273
|
$
|
3,774,279
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Income taxes at U.S. statutory rate
|
$ | (802 | ) | $ | (142 | ) | ||
State taxes, net of federal impact
|
(63 | ) |
—
|
|||||
Change in valuation allowance
|
864 | 142 | ||||||
Permanent differences
|
1 |
—
|
||||||
Other differences
|
—
|
—
|
||||||
Total
|
$ |
—
|
$ |
—
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Derivatives
|
$ | 105 | $ |
—
|
||||
Valuation allowance
|
(7,200 | ) | (2,665 | ) | ||||
Difference in depreciation and capitalization methods- natural gas and oil properties
|
(379 | ) |
—
|
|||||
Accrued expenses
|
769 |
—
|
||||||
Net operating losses
|
6,705 | 2,665 | ||||||
Total
|
$ |
—
|
$ |
—
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Property acquisition costs:
|
||||||||
Unproved properties
|
$ | 2,786 | $ | — | ||||
Proved properties
|
1,045 | 7,574 | ||||||
Exploration costs
|
— | 239 | ||||||
Development costs (1)
|
15,929 | 1,719 | ||||||
Total costs incurred
|
$ | 19,760 | $ | 9,532 |
(1)
|
For the years ended December 31, 2012 and 2011, development costs included $632,766 and $230,217, respectively, in non-cash, asset retirement obligations.
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Revenues
|
$ | 14,781,497 | $ | 6,584,134 | ||||
Production costs
|
2,281,443 | 1,434,678 | ||||||
Impairment
|
2,663,742 | 49,234 | ||||||
Depletion
|
5,671,202 | 2,105,851 | ||||||
Income tax expense
|
— | — | ||||||
Accretion Expense | 94,556 | 84,428 | ||||||
Gain of sale of properties | — | (599,100 | ) | |||||
Environmental cleanup | 2,100,000 | — | ||||||
Natural gas marketing | 143,672 | 10,301 | ||||||
Production taxes | 1,171,474 | 555,698 | ||||||
Results of operations
|
$ | 685,408 | $ | 3,072,959 |
Oil (MBbls)
|
Natural Gas (MMcf)
|
Total (MBoe)
|
||||||||||
December 31, 2010
|
344 | 2,109 | 696 | |||||||||
Acquisitions
|
885 | 0 | 885 | |||||||||
Extensions and discoveries
|
482 | 578 | 578 | |||||||||
Revisions in previous estimates
|
48 | (81 | ) | 35 | ||||||||
Production
|
(51 | ) | (221 | ) | (88 | ) | ||||||
December 31, 2011
|
1,708 | 2,385 | 2,106 | |||||||||
Acquisitions
|
(144 | ) | (143 | ) | (168 | ) | ||||||
Extensions and discoveries
|
16 | 265 | 210 | |||||||||
Revisions in previous estimates
|
(308 | ) | (518 | ) | (394 | ) | ||||||
Production
|
(151 | ) | (294 | ) | (200 | ) | ||||||
December 31, 2012
|
1,271 | 1,695 | 1,554 | |||||||||
Proved Developed Reserves
|
||||||||||||
December 31, 2011
|
528 | 1,592 | 793 | |||||||||
December 31, 2012
|
804 | 1,336 | 1,027 | |||||||||
Proved Undeveloped Reserves
|
||||||||||||
December 31, 2011
|
1,180 | 793 | 1,312 | |||||||||
December 31, 2012
|
467 | 359 | 527 |
Year Ended December 31,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Future cash inflows
|
$ | 120,208,031 | $ | 163,140,000 | ||||
Future production costs
|
(47,186,808 | ) | (30,511,000 | ) | ||||
Future development costs
|
(22,620,478 | ) | (25,968,000 | ) | ||||
Future income tax expense
|
(12,218,429 | ) | — | |||||
Future net cash flows
|
38,182,316 | 106,661,000 | ||||||
10% annual discount for estimated timing of cash flows
|
(19,542,639 | ) | (61,800,000 | ) | ||||
Standardized measure of discounted future net cash flows
|
$ | 18,639,677 | $ | 44,861,000 |
Year Ended December 31,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Balance, beginning of period
|
$ | 44,862,000 | $ | 9,382,000 | ||||
Net change in sales and transfer prices and in production (lifting) costs related to future production
|
(18,916,722 | ) | — | |||||
Changes in estimated future development costs
|
11,934,249 | — | ||||||
Sales and transfers of oil and natural gas produced during the period
|
(11,227,504 | ) | (4,378,000 | ) | ||||
Net change due to extensions and discoveries
|
(3,726,923 | ) | 13,115,000 | |||||
Net change due to purchase of minerals in place
|
— | 6,509,000 | ||||||
Net change due to revisions in quantity estimates
|
6,992,767 | 20,767,000 | ||||||
Previously estimated development costs incurred during the period
|
(16,602,246 | ) | — | |||||
Accretion of discount
|
4,486,195 | (983,000 | ) | |||||
Other
|
465,035 | — | ||||||
Net change in income taxes
|
9,880,721 | — | ||||||
Balance, end of period
|
$ | 21,615,885 | $ | 44,862,000 |
CROSS BORDER RESOURCES, INC. | |||
Dated: April 1, 2013
|
By:
|
/s/ Earl M. Sebring | |
Earl M. Sebring | |||
Interim President |
Signature
|
Title
|
Date
|
||
/s/ Alan W. Barksdale
|
Non-Executive Chairman of the Board of Directors
|
April 1, 2013
|
||
Alan W. Barksdale
|
||||
/s/ Earl M. Sebring
|
Interim President
|
April 1, 2013
|
||
Earl M. Sebring
|
(Principal Executive Officer)
|
|||
/s/ Kenneth S. Lamb
|
Chief Accounting Officer, Secretary, and Treasurer
|
April 1, 2013
|
||
Kenneth S. Lamb
|
(Principal Financial and Accounting Officer)
|
|||
/s/ Paul N. Vassilakos
|
Director
|
April 1, 2013
|
||
Paul N. Vassilakos
|
||||
/s/ Richard F. LaRoche, Jr.
|
Director
|
April 1, 2013
|
||
Richard F. LaRoche, Jr.
|
||||
/s/ John W. Hawkins
|
Director
|
April 1, 2013
|
||
John W. Hawkins
|
||||
/s/ Randell K. Ford
|
Director
|
April 1, 2013
|
||
Randell K. Ford
|
Exhibit No.
|
Name of Exhibit
|
|
2.1
|
Agreement and Plan of Merger entered into on December 2, 2010 among Doral Energy Corp., Doral Acquisition Corp., Pure Gas Partners II, L.P. and Pure Energy Group, Inc. (6)
|
|
2.2
|
Agreement and Plan of Merger entered into on December 24, 2010 between Doral Acquisition Corp. (as subsidiary merging entity) and Doral Energy Corp. (as parent surviving entity) with the surviving entity changing its name to Cross Border Resources, Inc. (8)
|
|
3.1
|
Articles of Incorporation. (1)
|
|
3.2
|
Certificate of Change Pursuant to NRS 78.209 increasing the authorized capital of common stock to 2,500,000,000 shares, par value $0.001 per share (25-for-1 Stock Split). (2)
|
|
3.3
|
Articles of Merger between Language Enterprises Corp. (as surviving entity) and Doral Energy Corp. (as merging entity). (3)
|
|
3.4
|
Certificate of Change Pursuant to NRS 78.209 decreasing the authorized capital of common stock to 400,000,000 shares, par value $0.001 per share (1-for-6.25 Reverse Split). (4)
|
|
3.5
|
Certificate of Change Pursuant to NRS 78.209 increasing the authorized capital of common stock to 2,000,000,000 shares, par value $0.001 per share (5-for-1 Stock Split). (5)
|
|
3.6
|
Certificate of Change Pursuant to NRS 78.209 decreasing the authorized capital of common stock to 36,363,637 shares, par value $0.001 per share (1-for-55 Stock Split). (7)
|
|
3.7
|
Certificate of Merger between Doral Acquisition Corp. (as merging entity) and Doral Energy Corp. (as surviving entity). (8)
|
|
3.8
|
Articles of Merger between Doral Acquisition Corp. (as merging entity) and Doral Energy Corp. (as surviving entity). (8)
|
|
3.9
|
Amended and Restated Bylaws as amended by Amendments No. 1 and No. 2. (*)
|
|
4.1
|
Trust Indenture of Pure Energy Group, Inc. and Pure Gas Partners II, L.P. assumed by the Company. (8)
|
|
4.2
|
Form of Common Stock Warrant. (14)
|
|
10.1
|
Amended and Restated Credit Agreement between Cross Border Resources, Inc. and Texas Capital Bank, N.A. dated January 31, 2011. 9
|
|
10.2
†
|
Employment Agreement with Everett Willard “Will” Gray II. (10)
|
|
10.3
†
|
Nonqualified Stock Option Award Agreement with Everett Willard “Will” Gray II. (10)
|
|
10.4
†
|
Employment Agreement with Lawrence J. Risley. (10)
|
|
10.5
†
|
Nonqualified Stock Option Award Agreement with Lawrence J. Risley. (10)
|
|
10.6
†
|
Consulting Agreement with BDR, Inc. (10)
|
|
10.7
†
|
Nonqualified Stock Option Award Agreement with BDR, Inc. (10)
|
|
10.8
|
Loan Agreement by and between Green Shoe Investments Ltd. and the Company. (11)
|
|
10.9
|
Promissory Note to Green Shoe Investments Ltd. (11)
|
|
10.10
|
Loan Agreement by and between Little Bay Consulting SA and the Company. (11)
|
|
10.11
|
Promissory Note to Little Bay Consulting SA. (11)
|
|
10.12
†
|
Separation Agreement and Release with BDR, Inc. (13)
|
|
10.13
|
Consent Waiver and First Amendment to Amended and Restated Credit Agreement with Texas Capital Bank, N.A. (15)
|
|
10.14
†
|
First Amendment to Employment Agreement with Everett Willard “Will” Gray II. (15)
|
|
10.15
†
|
First Amendment to Employment Agreement with Lawrence J. Risley. (15)
|
|
10.16
†
|
Letter Agreement with Nancy S. Stephenson. (15)
|
10.17
|
Letter Agreement with American Standard Energy Corp. (12)
|
|
10.18
|
Agreement with Red Mountain Resources, Inc. (16)
|
|
10.19
†
|
Second Amendment to Employment Agreement with Everett Willard “Will” Gray II (16)
|
|
10.20
†
|
Second Amendment to Employment Agreement with Lawrence J. Risley (16)
|
|
10.21
†
|
Amendment to Letter Agreement with Nancy S. Stephenson (16)
|
|
10.22
†
|
Separation Agreement and Mutual Release with
Everett Willard “Will” Gray II (16)
|
|
10.23
†
|
Separation Agreement and Mutual Release with Lawrence J. Risley (16)
|
|
10.24
†
|
Mutual Release with Nancy S. Stephenson (16)
|
|
10.25
†
|
Mutual Release with Brad E. Heidelberg (16)
|
|
10.26
|
Form of Indemnification Agreement with Directors and Officers (17)
|
|
10.27
|
Senior First Lien Secured Credit Agreement with Red Mountain Resources, Inc., Black Rock Capital, Inc. and RMR Operating, LLC (as co-borrowers) and Independent Bank (as lender), dated February 5, 2013 (18)
|
|
10.28
|
Inter-Borrower Agreement with Red Mountain Resources, Inc., Black Rock Capital, Inc. and RMR Operating, LLC, dated February 5, 2013 (18)
|
|
10.29
|
Letter Agreement with Frank James, dated February 28, 2013 (19)
|
|
10.30
|
Letter Agreement with Ralph Perry (19)
|
|
14.1
|
Code of Business Conduct and Ethics. (*)
|
|
21.1
|
List of Subsidiaries. (14)
|
31.1
|
Certification of Principal Executive Officer purusant to Section 302 of the Sarbanes-Oxley Act of 2002. (*)
|
|
31.2
|
Certification of Principal Accounting Officer purusant to Section 302 of the Sarbanes-Oxley Act of 2002. (*)
|
|
32.1
|
Certification of Principal Executive Officer and Principal Accounting Officer purusant to 18 U.S.C. Section 1300, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (*)
|
|
(25)
|
Filed as an exhibit to our Current Report on Form 8-K filed on March 6, 2012.
|
|
101.INS**
|
XBRL Instance Document
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Filed as an exhibit to our Registration Statement on Form SB-2 filed on September 11, 2006.
|
(2)
|
Filed as an exhibit to our Current Report on Form 8-K filed on January 9, 2008.
|
(3)
|
Filed as an exhibit to our Current Report on Form 8-K filed on April 28, 2008.
|
(4)
|
Filed as an exhibit to our Current Report on Form 8-K filed on January 29, 2009.
|
(5)
|
Filed as an exhibit to our Current Report on Form 8-K filed on September 14, 2009.
|
(6)
|
Filed as an exhibit to our Current Report on Form 8-K filed on December 6, 2010.
|
(7)
|
Filed as an exhibit to our Current Report on Form 8-K filed on December 29, 2010.
|
(8)
|
Filed as an exhibit to our Current Report on Form 8-K filed on January 7, 2011.
|
(9)
|
Filed as an exhibit to our Current Report on Form 8-K filed on February 8, 2011.
|
(10)
|
Filed as an exhibit to our Current Report on Form 8-K filed on March 25, 2011.
|
(11)
|
Filed as an exhibit to our Current Report on Form 8-K filed on April 28, 2011.
|
(12)
|
Filed as an exhibit to our Current Report on Form 8-K filed on November 23, 2011.
|
(13)
|
Filed as an exhibit to our Current Report on Form 8-K filed on June 3, 2011.
|
(14)
|
Filed as an exhibit to our Registration Statement on Form S-1/A on August 2, 2011.
|
(15)
|
Filed as an exhibit to our Current Report on Form 8-K filed on March 6, 2012.
|
(16)
|
Filed as an exhibit to our Current Report on Form 8-K filed on April 24, 2012
|
(17)
|
Filed as an exhibit to our
Post-Effective Amendment on Form S-1/A filed on June 1, 2012
|
(18)
|
Filed as an exhibit to our Current Report on Form 8-K filed on February 11, 2013
|
(19)
|
Filed as an exhibit to our Current Report on Form 8-K filed on March 6, 2013
|
*
|
Filed herewith.
|
**
|
As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Section 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under those sections.
|
†
|
Indicates a compensation contract or arrangement with management.
|
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