8-K/A: CoJax Oil and Gas Finalizes Acquisition of Mississippi Oil and Gas Properties, Amends 8-K Filing

CoJax Oil and Gas Corporation completes the acquisition of oil and gas properties in Mississippi through its subsidiary Barrister Energy LLC, issuing 2,211,982 shares valued at $2.00 each to Liberty Operating, LLC.

Summary

• CoJax Oil and Gas Corporation, through its subsidiary Barrister Energy LLC, finalized the acquisition of certain mineral and oil and gas properties in Mississippi from Liberty Operating, LLC on August 29, 2024.
• The acquisition's effective date for accounting purposes is July 1, 2024.
• The total consideration for the acquired assets was 2,211,982 shares of CoJax's common stock, valued at $2.00 per share, issued to Liberty Operating, LLC.
• This amendment to the original 8-K filing provides additional disclosures related to the acquisition, including financial statements.
• The acquired assets generated revenues of $299,934 and direct operating expenses of $107,960 for the year ended December 31, 2023, resulting in an excess of revenues over direct operating expenses of $191,974.
• For the six months ended June 30, 2024, revenues were $145,109 and direct operating expenses were $47,496, resulting in an excess of revenues over direct operating expenses of $97,613.
• Proved oil reserves as of December 31, 2023, are estimated at 1,169 MBbls, and natural gas reserves are estimated at 2,489 MMcf.
• The standardized measure of discounted future net cash flows from proved oil reserves is estimated at $22,975,000 as of December 31, 2023.

Sentiment

Score: 6

Explanation: The document is factual and reports on the completion of an acquisition. The sentiment is neutral, with a slight positive leaning due to the acquisition of revenue-generating assets.

Positives

• The acquisition provides CoJax Oil and Gas with additional oil and gas assets in Mississippi.
• The acquired assets generated positive revenue and cash flow in 2023 and the first half of 2024.
• The company has acquired proved oil and natural gas reserves.
• An independent petroleum engineer has consented to the use of their reserve report and fair market assessment in the company's filings.

Negatives

• The financial statements provided are not a complete presentation of the acquired properties, as certain costs like depreciation, depletion, and corporate taxes were not allocated.
• The financial statements are not indicative of future results due to potential changes in business and operating plans.
• The standardized measure of discounted future net cash flows does not represent the fair market value of the proved oil and natural gas reserves.

Risks

• Estimating quantities of reserves and projecting future rates of production and timing of development expenditures involves numerous uncertainties.
• The standardized measure of discounted future net cash flows is based on assumptions about future oil prices and operating costs, which may not materialize.
• The company assumes responsibility and liability for the environmental condition of the Conveyed Interests, including all existing and prospective claims, causes of action, fines, losses, costs and expenses, including but not limited to, costs to clean up or remediate, in accordance with applicable law.
• The company assumes and pays, performs, fulfills and discharges all claims, costs, expenses, liabilities and obligations accruing or relating to the owning, developing, exploring, operating or maintaining of the Conveyed Interests or the producing, transporting and marketing of Hydrocarbons from the Conveyed Interests, relating to periods before, on and after the Effective Time.

Future Outlook

The financial statements presented are not indicative of the results of operations of the properties described above going forward due to changes in the business, including operating plans, including new commodity derivative contracts.

Industry Context

The acquisition reflects a strategic move by CoJax Oil and Gas to expand its asset base in the oil and gas sector. The transaction aligns with industry trends of consolidation and strategic acquisitions to enhance production and reserves.

Comparison to Industry Standards

• It is difficult to compare the results to industry standards without knowing the specific characteristics of the acquired assets, such as production rates, operating costs, and reserve life.
• However, the standardized measure of discounted future net cash flows of $22,975,000 can be compared to similar acquisitions in the region to assess the relative value of the transaction.
• Companies like Amplify Energy Corp. and Energy Transfer LP are active in acquiring and operating oil and gas assets, and their financial metrics could provide a benchmark for comparison.

Stakeholder Impact

• Shareholders may see potential benefits from the acquisition of new assets and the potential for increased revenue and cash flow.
• Employees of Barrister Energy LLC may be impacted by changes in operations and management as a result of the acquisition.
• Customers and suppliers of the acquired properties may experience changes in business relationships as a result of the acquisition.
• Creditors of Liberty Operating, LLC may be impacted by the sale of assets to Barrister Energy LLC.

Key Dates