Item 8.01 Other Events.
The Company has experienced significant disruptions to our business and operations due to circumstances related to COVID-19. In particular, as a result of COVID-19, we are currently experiencing the closure of our offices due to "lock-down" or "stay at home" orders implemented in response to the COVID-19 pandemic and material reductions in personnel, and we have implemented remote working arrangements that have resulted in delays in our accounting and control procedures. In addition, the disruptions to our business caused by COVID-19 have resulted in a significant diversion of resources to attend to the operational needs of the business. As a result, we will require additional time to prepare and finalize our Quarterly Report due to circumstances related to COVID-19.
We presently intend to file the Quarterly Report as soon as possible, but no
later than
In addition, in light of ongoing developments related to COVID-19, we are
supplementing the risk factors previously disclosed under Part I, Item 1A, "Risk
Factors" of our Annual Report on Form 10-K for the fiscal year ended
The current outbreak of COVID-19 has adversely impacted our business, financial condition and results of operations and is likely to have a continuing adverse impact for a significant period of time.
The COVID-19 pandemic has caused a rapid and precipitous drop in demand for oil,
which in turn has caused oil prices to plummet since the first week of
The current pandemic and uncertainty about its length and depth in future
periods has caused the realized oil prices we have received since
The COVID-19 pandemic and its impact is rapidly evolving, and the ultimate impact of this pandemic is highly uncertain and subject to change. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, its severity, the actions by governments, businesses and individuals in response to the situation, how the pandemic and measures taken in response to it impact demand for oil, the availability of personnel, equipment and services critical to our ability to operate our properties, and how quickly and to what extent normal economic and operating conditions can resume, each of which is highly uncertain and cannot be predicted.
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There can be no assurance we will complete a consensual restructuring or that we would realize expected benefits from any such restructuring, if completed. If we are unable to successfully complete a consensual out of court restructuring, we may seek protection under Chapter 11 of the Bankruptcy Code, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.
As previously reported in the Current Report on Form 8-K filed
If we are unable to agree to terms regarding a consensual restructuring prior to the termination of the Forbearance Agreement, we may be compelled to seek protection under Chapter 11 of the Bankruptcy Code, which could have a material adverse effect on our business, financial condition, results of operations and liquidity. So long as a proceeding related to a Chapter 11 bankruptcy is ongoing, our senior management would be required to spend a significant amount of time and effort dealing with the reorganization, which would pull resources away from our business operations. Bankruptcy protection also might make it more difficult to retain management and other key personnel necessary to the success and growth of our business. In addition, the longer a proceeding related to a bankruptcy continues, the more likely it is that our customers and suppliers would lose confidence in our ability to reorganize our businesses successfully and may seek to establish alternative commercial relationships or request financial assurances such as letters of credit and cash deposits. It is not possible to predict the outcome of any bankruptcy proceeding and in the event of a bankruptcy proceeding, there can be no assurance that we would be able to restructure as a going concern or successfully propose or implement a plan of reorganization that provides for the continuation of the business post-bankruptcy.
Forward-Looking Statements
This Current Report on Form 8-K includes certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, including
statements relating to the Company's ability to file its Quarterly Report,
uncertainty about the spread of the COVID-19 virus and the impact it may have on
the Company's operations, the demand for the Company's oil, natural gas and
natural gas liquids, and global economic activity in general. These
forward-looking statements are based on management's current expectations and
assumptions about future events and are based on currently available information
as to the outcome and timing of future events. Such statements are subject to
risks and uncertainties that could cause results to differ materially from the
Company's expectations, including our ability to continue as a going concern,
our ability to prepare our quarterly financials and file our Form 10-Q within
the expected timeframe, the impact of the COVID-19 pandemic and the actions by
governments, businesses and individuals in response to the pandemic, any further
decline in, sustained depression in and volatility of expected and realized
commodity prices for oil, natural gas and natural gas liquids, and the other
risk factors described in the Company's Annual Report on Form 10-K for the year
ended
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