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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>As
filed with the U.S. Securities and Exchange Commission on July 26, 2023.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Registration
No. 333-</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></p>

<!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 4pt solid; border-bottom: Black 1pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 14pt"><b>UNITED
STATES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 14pt"><b>SECURITIES
AND EXCHANGE COMMISSION</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 12pt"><b>Washington,
D.C. 20549</b></span></p>

<p style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 18pt"><b>FORM
<span id="xdx_901_edei--DocumentType_c20220101__20221231_zRyXk7nzacv6"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:DocumentType">S-1</ix:nonNumeric></span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 18pt"><b>REGISTRATION
STATEMENT</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 12pt"><b><i>UNDER</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 12pt"><b><i>THE
SECURITIES ACT OF 1933</i></b></span></p>

<p style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 24pt"><b><span id="xdx_90C_edei--EntityRegistrantName_c20220101__20221231_zDZRRCTp7YQ2"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityRegistrantName">Next Bridge Hydrocarbons, Inc.</ix:nonNumeric></span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Exact
name of registrant as specified in its Charter)</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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Standard Industrial</b></span></p>
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Code Number)</b></span></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_90F_edei--EntityAddressAddressLine1_c20220101__20221231_znRDy0wvIbyj"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityAddressAddressLine1">6300 Ridglea Place</ix:nonNumeric></span>, <span id="xdx_903_edei--EntityAddressAddressLine2_c20220101__20221231_zOMSbWfCZMqg"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityAddressAddressLine2">Suite 950</ix:nonNumeric></span></b></span></p>
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    Identification No.)</b></span></td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Address,
including zip code, and telephone number, including area code, of registrant&#146;s principal executive office)</b></span></p>

<p style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Clifton
DuBose</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Chief
Executive Officer</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>6300 Ridglea Place, Suite 950</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fort
Worth, TX 76116<br />
(817) 438-1937</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Name,
address, including zip code, and telephone number, including area code, of agent for service)</b></span></p>

<p style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>With
copies to:</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 100%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Jack
E. Jacobsen</b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Jason
A. Schumacher</b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>O&#146;Melveny
&amp; Myers LLP</b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2501
N. Harwood Street, 17 Floor</b></span></p>
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TX 75201</b></span></p>
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  <tr style="font: 10pt Times New Roman, Times, Serif">
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  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Approximate
date of commencement of proposed sale to the public</b>: As soon as practicable after the effective date of this registration statement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box.&#160;</span><span style="font-family: Wingdings; font-size: 10pt">x</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. </span><span style="font-family: Wingdings; font-size: 10pt">o</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. </span><span style="font-family: Wingdings; font-size: 10pt">o</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. </span><span style="font-family: Wingdings; font-size: 10pt">o</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a&#160;non-accelerated&#160;filer, a smaller
reporting company, or an emerging growth company. See the definitions of &#147;large accelerated filer,&#148; &#147;accelerated filer,&#148;
&#147;smaller reporting company,&#148; and &#147;emerging growth company&#148; in Rule&#160;12b-2&#160;of the Exchange Act.&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided to Section&#160;7(a)(2)(B) of the Securities Act.&#160;<span style="font-family: Wingdings; font-size: 10pt"><span id="xdx_900_edei--EntityExTransitionPeriod_c20220101__20221231_zwmAC4Fwkad2"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" format="ixt:booleanfalse" name="dei:EntityExTransitionPeriod">o</ix:nonNumeric></span></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date
as the Commission acting pursuant to said section 8(a), may determine.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p>


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    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
information in this prospectus is not complete and may be changed. We may not issue these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SUBJECT
TO COMPLETION DATED JULY 26, 2023</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Prospectus</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 24pt"><b>Next
Bridge Hydrocarbons, Inc.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Up
to &#160;&#160;&#160;&#160;&#160;&#160;&#160;Shares of Common Stock Issuable Upon the Exercise of Subscription Rights to Receive Shares of<br />
Common Stock of Future Subsidiary</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Subscription
Rights to Receive Shares of Common Stock of Future Subsidiary</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
prospectus is being furnished to you as a holder of common stock of Next Bridge Hydrocarbons, Inc. (&#147;NBH&#148;,
&#147;Next Bridge&#148;, &#147;we&#148;, &#147;us&#148;, &#147;our&#148; or the &#147;Company&#148;) in connection
with the planned distribution by NBH to each eligible holder of its common stock as of the close of business
on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;, 2023, which shall be sixty (60) days following the date of this prospectus (the
&#147;record date&#148;) at no charge, non-transferable subscription rights (the &#147;subscription rights&#148;) to receive
shares of common stock, par value $0.001 per share, of a new subsidiary of NBH to be formed in the future (&#147;Newco&#148;).
As further described in this prospectus, Newco, once formed, will be the owner of up to a ten percent (10%) back-in working
interest option for the Orogrande Prospect exercisable following the point in time at which the proceeds of all production from all
operations conducted on the Orogrande Prospect (exclusive of royalty, overriding royalty and taxes chargeable to the working
interest) equals the actual cost incurred by NBH and its predecessors in drilling, testing, equipping and the cost of operating the
wells located on the Orogrande Prospect inclusive of overhead charge (the &#147;Back-In Interest&#148;), an option originally
granted to Mr. Gregory McCabe pursuant to that certain Participation Agreement, dated September 23, 2014, by and among Mr.
McCabe, Hudspeth Oil Corporation and McCabe Petroleum Corporation (&#147;MPC&#148;), an entity exclusively owned and controlled
by Mr. McCabe, and up to one hundred percent (100%) of the interest currently held by MPC in the drilling project located on over
1,150 acres in Vermillion Parish, Louisiana (the &#147;Bronco Prospect&#148;). The Bronco Prospect is subject to the
Reserved Bronco Overriding Royalty Interest and the Reserved Bronco Back-In Interest as defined and further described in this
prospectus. NBH will distribute to each eligible holder of its common stock as of the record date one subscription right for
each full common share owned by that stockholder as of the record date (the &#147;rights offering&#148;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
be eligible for the subscription rights, a stockholder must have shares of NBH common stock registered with the Company&#146;s transfer
agent as of the record date and maintain such registration for a period of 180 days thereafter (the &#147;holding period&#148;).
Each subscription right will entitle its holder to receive from NBH one share of Newco common stock.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
subscription rights will expire if they are not exercised by 5:00 p.m., New York City time, on&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
2028 (the &#147;expiration date&#148;). NBH may extend the expiration date but in no event will NBH extend the expiration
date beyond&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;, 2029. The rights offering is subject to the satisfaction
or waiver of certain conditions. In addition, NBH has the right to withdraw and cancel the rights offering if, at any time prior to the
record date, the board of directors of the Company determines, in its sole discretion, that the rights offering is not in the best
interest of NBH or its stockholders, or that market conditions are such that it is not advisable to consummate the rights offering. See
&#147;The Rights Offering&#8212;Conditions, Withdrawal and Cancellation.&#148;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
McCabe, the chairman of the board of directors of NBH, beneficially owns approximately 27.8% of the outstanding common stock of NBH.
Mr. McCabe and MPC have executed that certain Contribution Agreement dated as of July 25, 2023 among Mr. McCabe, MPC and NBH (the &#147;Contribution
Agreement&#148;). Pursuant to the terms of the Contribution Agreement, Mr. McCabe will contribute an amount of the Back-In Interest
and MPC will contribute an amount of the Bronco Prospect (such contributed portion, the &#147;Bronco Assets&#148;) in proportion
to the percentage of shares of common stock of NBH that are directly registered in the name of the beneficial owner with the Company&#146;s
transfer agent on the record date, whether previously registered directly or currently held through a bank, broker or other nominee
who instruct such bank, broker or other nominee, and transferred to the beneficial owner on the books and records maintained by NBH&#146;s
transfer agent on or prior to the record date, provided that such shares remain directly registered for the holding period. Following
the expiration of the holding period, each such registered beneficial owner will be the registered holder of the distributed
subscription rights in book-entry form in a new account with NBH&#146;s transfer agent.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>You
should carefully consider whether to exercise your subscription rights before the expiration date. All exercises of subscription
rights are irrevocable. You should carefully read &#147;Risk Factors&#148; beginning on page 7 and all other information included
in this prospectus before you decide to exercise your subscription rights as there will be risks in acquiring and owning Newco common
stock. NBH&#146;s board of directors is not making any recommendation regarding your ultimate exercise of the subscription rights.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
date of this prospectus is &#160;&#160;&#160;&#160;&#160;, 2023</b></span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Table
of Contents</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 96%"><a href="#a001_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ABOUT THIS PROSPECTUS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 4%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a002_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right">ii</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a003_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DEFINITIONS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right">iv</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a004_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PROSPECTUS SUMMARY</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a005_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">RISK FACTORS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a006_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">24</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a007_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">USE OF PROCEEDS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">29</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DETERMINATION
    OF OFFERING PRICE</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a008_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">BUSINESS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right">30</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a009_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right">39</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a010_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MANAGEMENT</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right">53</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a011_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXECUTIVE COMPENSATION</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">58</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a012_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">61</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a013_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">62</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a014_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DESCRIPTION OF OUR CAPITAL STOCK</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">64</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a015_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PLAN OF DISTRIBUTION</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">67</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a016_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE RIGHTS OFFERING</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">68</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a017_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SELLING STOCKHOLDERS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">72</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a018_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">LEGAL MATTERS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">72</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a019_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXPERTS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">72</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a020_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">WHERE YOU CAN FIND MORE INFORMATION</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">72</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><a href="#a021_v1"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INDEX TO FINANCIAL STATEMENTS</span></a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">73</span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span>&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a001_v1"></span>ABOUT
THIS PROSPECTUS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
should rely only on the information that we have provided or incorporated by reference in this prospectus, any related free writing prospectus
that we may authorize to be provided to you and the other information to which we refer you. We have not authorized anyone to provide
you with different or additional information. No dealer, salesperson or other person is authorized to give any information or to represent
anything not contained or incorporated by reference in this prospectus or any related free writing prospectus that we may authorize to
be provided to you. If anyone provides you with different or additional information, you should not rely on it. You should assume that
the information in this prospectus or any related free writing prospectus is accurate only as of the date on the cover of the document
and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus or any related free writing prospectus, or any sale of a security. Our business,
financial condition, results of operations and prospects may have changed since those dates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
urge you to carefully read this prospectus, together with the information incorporated herein by reference as described under the heading
&#147;Where You Can Find More Information.&#148;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a002_v1"></span>CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
prospectus contains certain forward-looking statements and information relating to our business that are based on the beliefs of our
management as well as assumptions made by and information currently available to our management. All statements other than statements
of current or historical facts are forward-looking statements. Forward-looking statements include statements containing words such as
&#147;may,&#148; &#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148;
&#147;plan,&#148; &#147;forecasts,&#148; &#147;projections,&#148; and similar expressions. Forward-looking statements include,
without limitation, the statements regarding our strategy, future plans for development and production and other strategic options, future
expenses and costs and future liquidity and capital resources. Forward looking statements involve a number of risks, assumptions and
uncertainties which may cause actual results to differ materially from those contained in this prospectus. In light of these risks, uncertainties
and assumptions, the future events and trends discussed in this prospectus may not occur and actual results could differ materially and
adversely from those anticipated or implied in the forward-looking statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
forward-looking statements are made based upon detailed assumptions and reflect management&#146;s current expectations and beliefs.
While we believe that these assumptions underlying the forward-looking statements are reasonable, we caution that it is very difficult
to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect actual results. The risks
and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements
include but are not limited to:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">general
    competitive conditions, including actions our competitors may take to grow their businesses;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  </table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
    to payment terms, the discount or margin on products or other terms with our suppliers;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  </table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">risks
    associated with data privacy, information security and intellectual property;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  </table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    stoppages or increases in labor costs;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">amount
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
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  </table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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    results from litigation, governmental investigations or tax-related proceedings or audits;</span></td></tr>
  </table>
<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
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  </table>
<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">impact
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  </table>
<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exploration
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  </table>
<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  </table>
<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  </table>
<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  </table>
<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
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    in Part 1, Item 1A of our annual report on Form 10-K for the year ended December 31, 2022, as amended on Form 10-K/A filed on May
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Should
one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes
may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary
statements in this paragraph. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise after the date of this prospectus except to the extent required by law.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a003_v1"></span>DEFINITIONS</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following are abbreviations and definitions of terms commonly used in the oil and gas industry and in this prospectus. Natural gas equivalents
and crude oil equivalents are determined using the ratio of six Mcf to one barrel. All references to &#147;us&#148;, &#147;our&#148;,
&#147;we&#148;, &#147;NBH&#148;, the &#147;Company&#148;, or &#147;Next Bridge&#148; mean Next Bridge Hydrocarbons, Inc.
and where applicable, its consolidated subsidiaries.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Bbl</b>&#148;
means a barrel of U.S. 42 gallons of oil.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Bcf</b>&#148;
means one billion cubic feet of natural gas.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>BOE</b>&#148;
means one barrel of oil equivalent.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Completion</b>&#148;
means the installation of permanent equipment for the production of oil or gas.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Condensate</b>&#148;
means natural gas in liquid form produced in connection with natural gas wells.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Exploratory
well</b>&#148; means a well drilled to find a new field or to find a new productive reservoir in a field previously found to be productive
of oil or natural gas in another reservoir or to extend a known reservoir.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Gross</b>&#148;
when used with respect to acres or wells, production or reserves refers to the total acres or wells in which we or another specified
person has a working interest.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>MBbls</b>&#148;
means one thousand barrels of oil.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Mcf</b>&#148;
means one thousand cubic feet of natural gas.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Net</b>&#148;
when used with respect to acres or wells, refers to gross acres of wells multiplied, in each case, by the percentage working interest
owned by us.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>NGL</b>&#148;
refers to natural gas liquids, which is composed exclusively of carbon and hydrogen.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Oil</b>&#148;
means crude oil or condensate.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Operator</b>&#148;
means the individual or company responsible for the exploration, development, and production of an oil or gas well or lease.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Proved
developed non-producing</b>&#148; means reserves (i) expected to be recovered from zones capable of producing but which are shut-in
because no market outlet exists at the present time or whose date of connection to a pipeline is uncertain or (ii) currently behind the
pipe in existing wells, which are considered proved by virtue of successful testing or production of offsetting wells.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Proved
developed producing</b>&#148; means reserves expected to be recovered from currently producing zones under continuation of present operating
methods. This category includes recently completed shut-in gas wells scheduled for connection to a pipeline in the near future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Proved
developed reserves</b>&#148; means reserves that can be expected to be recovered through existing wells with existing equipment or operating
methods.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Proved
reserves</b>&#148; means the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating
conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided
by contractual arrangements.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Proved
undeveloped reserves</b>&#148; means reserves that are expected to be recovered from new wells on undrilled acreage, or from existing
wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those drilling
locations offsetting productive wells that are reasonably certain of production when drilled or where it can be demonstrated with certainty
that there is continuity of production from the existing productive formation.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Recompletion</b>&#148;
means the completion for production of an existing well bore in another formation from which the well has been previously completed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Royalty</b>&#148;
means an interest in an oil and gas lease that gives the owner of the interest the right to receive a portion of the production from
the leased acreage (or of the proceeds of the sale thereof), but generally does not require the owner to pay any portion of the costs
of drilling or operating the wells on the leased acreage. Royalties may be either landowner&#146;s royalties, which are reserved by
the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of
the leasehold in connection with a transfer to a subsequent owner.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>SEC</b>&#148;
means the United States Securities and Exchange Commission.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#147;<b>Working
interest</b>&#148; means an interest in an oil and gas lease that gives the owner of the interest the right to drill for and produce
oil and gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations. The share
of production to which a working interest owner is entitled will always be smaller than the share of costs that the working interest
owner is required to bear, with the balance of the production accruing to the owners of royalties. For example, the owner of a 100% working
interest in a lease burdened only by a landowner&#146;s royalty of 12.5% would be required to pay 100% of the costs of a well but would
be entitled to retain 87.5% of the production.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a004_v1"></span>PROSPECTUS
SUMMARY</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>This
summary highlights certain information contained elsewhere in this prospectus and may not contain all of the information that is important
to you. To understand fully and for a more complete description of the terms and conditions of the offering, you should read this prospectus
in its entirety, including the information presented under the section titled &#147;Risk Factors&#148;, and the documents to which
you are referred. See &#147;Where You Can Find More Information.&#148; Except where the context otherwise requires, or where otherwise
indicated, references to the &#147;Company,&#148; &#147;Next Bridge,&#148; &#147;NBH,&#148; &#147;we,&#148; &#147;us,&#148;
or &#147;our&#148; refer to Next Bridge Hydrocarbons, Inc. and where applicable, its consolidated subsidiaries, including Torchlight
Hazel, LLC, a Texas limited liability company, Hudspeth Oil Corporation, a Texas corporation, Hudspeth Operating, LLC, a Texas limited
liability company, Torchlight Energy, Inc., a Nevada corporation, and Wolfbone Investments, LLC, a Texas limited liability company.</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
Company</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
were incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed our name to Next Bridge Hydrocarbons, Inc. pursuant
to our Amended and Restated Articles of Incorporation filed on June 30, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the
United States. Our primary focus has been the development of interests in an oil and gas project we hold in the Orogrande Basin in West
Texas in Hudspeth County, Texas (the &#147;Orogrande Project&#148;). In addition, we have minor interests in the Eastern edge of the
Midland Basin in Texas (the &#147;Hazel Project&#148;), and two minor well interests in Oklahoma.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
recently spun-off from Meta Materials, Inc. (&#147;Meta&#148;) pursuant to which we became an independent company. Prior to the spin-off,
we were a wholly-owned subsidiary of Meta.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
operate our business through wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation, Hudspeth Oil Corporation, a Texas
corporation (&#147;Hudspeth&#148;), Torchlight Hazel, LLC, a Texas limited liability company, Hudspeth Operating, LLC, a Texas limited
liability company, and Wolfbone Investments, LLC, a Texas limited liability company (&#147;Wolfbone&#148;). In addition, we may consider
strategic options, including partnering with, or the possible sale of any or all of our assets to, third parties. We currently have five
full-time employees, and we employ consultants for various roles as needed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, we had interests in three oil and gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project
in Sterling, Tom Green, and Irion Counties, Texas, and the Hunton wells in partnership with Kodiak in Central Oklahoma. (the &#147;Oklahoma
Properties&#148;). See the description under &#147;Current Projects&#148; below under Note 4, &#147;Oil &amp; Natural Gas Properties,&#148;
of the financial statements included with this prospectus for information and disclosure regarding these projects, which description
is incorporated herein by reference.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Formation
of Newco; the Back-In Interest and the Bronco Prospect</i></b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newco
will be formed in the future as a new subsidiary of NBH (&#147;Newco&#148;). Newco will receive up to a ten percent (10%) back-in working
interest option for the Orogrande Project exercisable following the point in time at which the proceeds of all production from all operations
conducted on the Orogrande Project (exclusive of royalty, overriding royalty and taxes chargeable to the working interest) equals the
actual cost incurred by NBH and its predecessors in drilling, testing, equipping and the cost of operating the wells located on the Orogrande
Prospect, inclusive of overhead charges (the &#147;Back-In Interest&#148;), an option originally granted to Mr. McCabe pursuant
to that certain Participation Agreement, dated September 23, 2014 (the &#147;Participation Agreement&#148;), by and among Mr. McCabe,
Hudspeth, and McCabe Petroleum Corporation (&#147;MPC&#148;), an entity exclusively owned and operated by Mr. McCabe, and up to
one hundred percent (100%) of the interest currently held by MPC in the drilling project located on over 1,150 acres in Vermillion Parish,
Louisiana (the &#147;Bronco Prospect&#148;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the terms of that certain Contribution Agreement dated as of July 25, 2023 among Mr. McCabe, MPC and NBH (the &#147;Contribution
Agreement&#148;), Mr. McCabe will contribute an amount of the Back-In Interest and MPC will contribute an amount of the Bronco Prospect
(such contributed portion, the &#147;Bronco Assets&#148;) in proportion to the percentage of shares of common stock of NBH that are
directly registered in the name of the beneficial owner with the Company&#146;s transfer agent, whether previously directly registered
or currently held through a bank, broker or other nominee who instruct such bank, broker or other nominee, and transferred to the beneficial
owner on the books and records maintained by NBH&#146;s transfer agent on or prior to the record date, such that each such beneficial
owner will be the registered holder of NBH&#146;s common stock, provided that such direct registration is maintained for the holding
period (defined below).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We believe that the Bronco Prospect exposes the Company to a large
upside drilling deal and is our first step towards diversifying our activities beyond the Orogrande Basin.</p>


</div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Bronco Prospect is a high impact onshore south Louisiana drilling prospect located in Vermillion Parish, Louisiana. The primary
pay targets of the Bronco Prospect are the Alliance Sands at an approximate depth of the 14,500 feet. The size of the exploration target
is over 900 acres and has potential for three locations. The estimated P50 reserve potential is 100 Bcf and 4 million barrels
of condensate; while expansive capital would be required to reach the following levels, Mr. McCabe has received information from a third
party geologist that the present value discounted at an annual rate of 10% reserve potential is 242 Bcf of natural gas and 12 million
Bbl of oil. The Bronco Prospect was generated using subsurface geology and 3-D seismic data to identify and delineate the 3-way
downthrown fault closure. The Bronco Prospect is directly upthrown to existing production from Alliance sands and may be juxtaposed and
have a similar gas water contact as the existing production. Potential secondary targets on the Bronco Prospect are the Mulvey sands
which are productive in the area. The oil and gas leases that constitute the Bronco Prospect are described in the Contribution Agreement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Contribution Agreement, MPC will contribute its interest in the Bronco Prospect subject to a reserved twelve and half
percent (12.5%) back-in after payout working interest and a reserved overriding royalty interest. The reserved twelve and half
percent (12.5%) back-in after payout working interest will automatically go into effect at the point in time at which the proceeds
of all production from all operations conducted on the Bronco Prospect (exclusive of royalty, overriding royalty and taxes
chargeable to the working interest) equals the actual cost incurred by NBH and any third parties who contribute capital for the
drilling, testing, equipping and the cost of operating the wells located on the Bronco Prospect inclusive of overhead charges (the
&#147;Reserved Bronco Back-In Interest&#148;). The reserved overriding royalty interest will be an overriding royalty interest in
each of the oil and gas leases that constitute the Bronco Prospect equal to an amount that is the positive difference, if any, between
twenty-five percent (25%) and the amount of royalty that is to be paid to the lessor on the sale of the hydrocarbons associated with
such oil and gas lease (the &#147;Reserved Bronco Overriding Royalty Interest&#148;). The Reserved Bronco Back-In Interest and the
Reserved Bronco Overriding Royalty Interest are further described in the Contribution Agreement. The Reserved Bronco Back-In
Interest and the Reserved Bronco Overriding Royalty Interest will be reserved by MPC and will be co-owned by MPC, Mr. McCabe and
consulting geologists who have helped to develop and evaluate the Bronco Prospect (the &#147;Bronco Exploration Team&#148;). The
&#147;Bronco Assets&#148; as used in this prospectus shall mean all the assets that compromise the Bronco Prospect subject to the
Bronco Back-In Interest and the Bronco Overriding Royalty Interest, as further described in the Contribution Agreement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Market
Opportunity</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for oil and natural gas that we may produce depends on factors beyond our control, including the extent of domestic production
and imports of oil and natural gas, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for
oil and natural gas, the marketing of competitive fuels, and the effects of state and federal regulation. The oil and natural gas industry
also competes with other industries in supplying the energy and fuel requirements of industrial, commercial, and individual consumers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
oil production, if any, is expected to be sold at prices tied to the spot oil markets. Our natural gas production, if any,
is expected to be sold under short-term contracts and priced based on first of the month index prices or on daily spot market prices.
We will rely on our operating partners to market and sell our production, if any.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Regulatory
Framework</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
oil and natural gas development operations are subject to stringent and complex federal, state, tribal, regional and local environmental,
health and safety laws and regulations governing, among other factors, worker safety and health, the discharge and disposal of substances
into the environment, and the protection of the environment and natural resources. Numerous governmental entities, including the Environmental
Protection Agency (&#147;EPA&#148;) and analogous state and local agencies, (and, under certain laws, private individuals) have the
power to enforce compliance with these laws and regulations and any permits issued under them. These laws and regulations may, among
other things: (i) require permits to conduct exploration, drilling, water withdrawal, wastewater disposal and other production related
activities; (ii) govern the types, quantities and concentrations of substances, including emissions of CO2, methane and certain other
greenhouse gases (&#147;GHG&#148;), that may be disposed or released into the environment or injected into formations in connection
with drilling or production activities, and the manner of any such disposal, release, or injection; (iii) limit or prohibit construction
or drilling activities or require formal mitigation measures in sensitive areas such as wetlands, wilderness areas or areas inhabited
by endangered or threatened species; (iv) require investigatory and remedial actions to mitigate pollution conditions arising from the
Company&#146;s operations or attributable to former operations; (v) impose safety and health restrictions designed to protect employees
and others from exposure to hazardous or dangerous substances; and (vi) impose obligations to reclaim and abandon well sites and pits.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
existing environmental and occupational safety and health laws and regulations to which our business operations are subject
include the Clean Air Act, as amended (the &#147;CAA&#148;), the Comprehensive Environmental Response, Compensation, and
Liability Act (&#147;CERCLA&#148;), the federal Resource Conservation and Recovery Act (&#147;RCRA&#148;), Federal Water Pollution
Control Act of 1972 as amended by the Oil Pollution Act of 1990, EPA rules to reduce methane emissions from new, modified or
reconstructed sources in the oil and natural gas sector, including implementation of a leak detection and repair (&#147;LDAR&#148;)
program under the CAA&#146;s New Source Performance Standards in 40 C.F.R. Part 60, Subpart OOOOa (&#147;Quad Oa&#148;), the federal
Occupational Safety and Health Act (&#147;OSHA&#148;) and other state equivalent laws and regulations. For further discussion of the
risks to our results of operations arising out of our environmental regulatory compliance, see &#147;Risks Relating to Our
Business&#148;, including the following risk factors &#147;&#8212;<i>Our operations are heavily dependent on current environmental
regulation, changes in which we cannot predict</i>,&#148; &#147;&#8212;<i>Government regulatory initiatives relating to hydraulic
fracturing could result in increased costs and additional operating restrictions or delays</i>,&#148; and &#147;&#8212;<i>Climate
change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil
and natural gas that we produce.</i>&#148;</span></p>

</div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Emerging
Growth Company </i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an &#147;emerging growth company,&#148; as defined in Section 2(a) of the Securities Act of 1933, as amended (the &#147;Securities
Act&#148;), as modified by the Jumpstart Our Business Startups Act of 2012 (&#147;JOBS Act&#148;). As an emerging growth company,
we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public reporting
companies that are not emerging growth companies. These provisions include:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Being
    permitted to have only two years of audited financial statements and only two years of related selected financial data and management&#146;s
    discussion and analysis of financial condition and results of operations disclosure;</span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
    exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting
    pursuant to the Sarbanes-Oxley Act of 2002, as amended (&#147;SOX&#148;);</span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reduced
    disclosure about executive compensation arrangements in our periodic reports, registration statements and proxy statements; and</span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exemptions
    from the requirements to seek non-binding advisory votes on executive compensation or golden parachute arrangements.</span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
would cease to be an emerging growth company on the earliest of (i) the first fiscal year after our annual gross revenues are $1.235
billion or more, (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity
securities pursuant to an effective registration statement (iii) the date on which we have, during the immediately preceding three-year
period, issued more than $1.0 billion in non-convertible debt securities or (iv) the end of any fiscal year in which the market value
of our common stock held by non-affiliates is $700 million or more as of the end of the second quarter of that fiscal year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
JOBS Act additionally permits emerging growth companies to take advantage of an extended transition period to comply with new or revised
accounting standards applicable to public reporting companies. We have elected to avail ourselves of the extended transition period.
During the extended transition period, it may be difficult to compare our financial results with the financial results of a public reporting
company that complies with accounting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Smaller
Reporting Company</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a &#147;smaller reporting company&#148; as defined by Rule 12b-2 of the Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;).
As a &#147;smaller reporting company,&#148; the disclosure we will be required to provide in our SEC filings are less than it would
be if we were not considered a &#147;smaller reporting company.&#148; Specifically, &#147;smaller reporting companies&#148; are able
to provide simplified executive compensation disclosures in their filings may be exempt from the provisions of Section 404(b) of SOX requiring that independent registered public accounting firms provide an attestation report on the effectiveness
of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including,
among other things, being permitted to provide two years of audited financial statements in annual reports rather than three years. Decreased
disclosures in our SEC filings due to our status as a &#147;smaller reporting company&#148; may make it harder for investors to analyze
our results of operations and financial prospects. We will remain a smaller reporting company until the last day of the fiscal year in
which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual
revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds
$700 million as of the prior June 30.</span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Corporate
Information</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
executive office is located at 6300 Ridglea Place, Suite 950, Fort Worth, Texas 76116, and our telephone number is (817) 438-1937. We
have filed or will file annual, quarterly and current reports, proxy statements and other documents with the SEC under the Exchange Act.
The public can obtain any documents that we file with the SEC at www.sec.gov. We also make such information and documents available free
of charge on our website (nextbridgehydrocarbons.com) as soon as reasonably practicable after we file such material with, or furnish
it to, the SEC. Information contained on or accessible through our website shall not be deemed a part of this prospectus and shall not
be incorporated by reference herein.</span></p>

</div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
Rights Offering</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a brief summary of some of the terms of this offering and is qualified in its entirety by reference to the more detailed
information appearing elsewhere in this prospectus.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 40%; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
    offered:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; width: 60%; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NBH
    is distributing, at no charge, to eligible holders of shares of NBH common stock as of the close of business on , 2023, which
    date the Company may extend in its sole discretion (the "record date"), non-transferable subscription rights to acquire shares
    of Newco common stock. NBH will distribute to each eligible holder of its common stock that is registered with the Company&#146;s
    transfer agent as of the record date and maintains such registration for a period of 180 days thereafter, which period may be
    shortened by the Company in its sole discretion (the &#147;holding period&#148;) one subscription right for each full common
    share owned by that stockholder and directly registered with the Company&#146;s transfer agent as of the record date. Each subscription
    right will entitle the holder to acquire from NBH one share of Newco common stock.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Eligible
    holder:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                            order to be an eligible holder of shares of NBH common stock to receive non-transferable
                                            subscription rights, you cannot be (i) a bank, broker or other nominee that is determined
                                            by the Company in its sole discretion to be holding shares for other entities or individuals
                                            or (ii) a beneficial owner of NBH common stock that is being held by a bank, broker or other
                                            nominee.</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    your shares of NBH common stock are currently held in a retirement account, such as a 401(k), ROTH IRA or similar account,
    you should check with the custodian of such account as to whether the shares can be registered with the Company&#146;s transfer
    agent in the individual holder&#146;s name.</span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Use
    of proceeds:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Neither
    NBH nor Newco will receive any proceeds from the exercise of the subscription rights. </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Market
    for Newco common stock:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
    is currently anticipated that the Newco common stock will not be listed for trading on any stock exchange or market nor will the
    shares of Newco common stock be eligible for electronic transfer through the Depository Trust Company (&#147;DTC&#148;)
    or any other established clearing corporation. Accordingly, there would not be any public trading market for the Newco common
    stock, nor is there any expectation at this time for a public market to develop.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rights
    offering conditions:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NBH&#146;s
                                            obligation to close the rights offering and to distribute the subscription rights is conditioned
                                            upon the satisfaction or waiver of the following conditions:</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
    Company&#146;s board of directors (the &#147;Board&#148;) shall have authorized and approved the offering and not withdrawn such
    authorization and approval, and shall have declared the dividend of the subscription rights to eligible NBH stockholders&#894;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
    Contribution Agreement between NBH, Mr. McCabe and MPC with respect to the Back-In Interest and Bronco
    Assets shall have been executed by each party thereto and all actions required to be performed prior to the closing of the
    rights offering shall have been completed;</span></p></td></tr>
  </table>

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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt; width: 40%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; width: 60%; padding-right: 0pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
                                            SEC shall have declared effective our Registration Statement on Form S-1, of which this prospectus
                                            forms a part, under the Securities Act and no stop order suspending the effectiveness of
                                            the Registration Statement shall be in effect, and no proceedings for such purpose shall
                                            be pending before or threatened by the SEC&#894; and</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;no
    order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition
    preventing consummation of the separation shall be in effect, and no other event outside the control of NBH shall have occurred or
    failed to occur that prevents the consummation of the separation.</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    fulfilment of the foregoing conditions will not create any obligation on the part of NBH to close the rights offering. In addition,
    NBH reserves the right to withdraw and cancel the rights offering if, at any time prior to the record date, the Board determines,
    in its sole discretion, that the offering is not in the best interest of NBH or its stockholders, or that market conditions are such
    that it is not advisable to consummate the rights offering. See &#147;The Rights Offering&#8212;Conditions, Withdrawal and Cancellation.&#148;</span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    NBH cancels the rights offering, due to the lack of satisfaction of one or more conditions to the rights offering or otherwise, the
    subscription rights will not be distributed. NBH may also extend the rights offering, including the record date. If NBH elects
    to extend the record date, it will issue a press release announcing the extension no later than 9:00 a.m., New York City time, on
    the next business day after the most recently announced record date.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Material
    U.S. federal income tax considerations:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
                                            the treatment of the receipt, sale, exercise, expiration and cancellation of the subscription
                                            rights for U.S. federal income tax purposes is not entirely clear:</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;A
    stockholder that receives a subscription right from NBH should expect to have taxable dividend income equal to the fair market value
    (if any) of the subscription right on the date of its distribution by NBH, and</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;A
    stockholder that allows a subscription right to expire without exercising it should expect to have short-term capital loss upon the
    expiration of such right in an amount equal to such stockholder&#146;s tax basis (if any) in such right.</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
    a short-term capital loss generally cannot be used to offset taxable dividend income, you may owe tax as a result of the receipt
    of a subscription right from NBH even if you take no action to exercise the subscription right.</span></p></td></tr>
  </table>

</div>

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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt; width: 40%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; width: 60%; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
    a detailed discussion of the material U.S. federal income tax considerations relating to the receipt, sale, exercise, expiration
    and cancellation of the subscription rights, see &#147;Material U.S. Federal Income Tax Considerations.&#148; Stockholders should
    consult their own tax advisors regarding the U.S. federal, state and local and non-U.S. income, estate and other tax considerations
    relating to the receipt, sale, exercise, expiration and cancellation of the subscription rights in light of their particular circumstances.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Procedures
    to receive subscription rights:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
                                            receive your subscription rights, you must take the following steps:</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;If
    you are an eligible holder and registered holder of NBH common stock, and you maintain such registration with the Company&#146;s
    transfer agent as of the record date and for the holding period, you will be eligible to receive a rights certificate representing
    the number of shares of Newco common stock you may acquire pursuant to your subscription right.</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-indent: -0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;&#160;&#160;&#160;&#160;&#160;&#160;&#160;If
    you are a beneficial owner of shares of NBH common stock that are registered in the name of a broker, dealer, bank or other nominee,
    you will be eligible to receive subscription rights at such time as you have instructed such broker, dealer, bank or other nominee
    to transfer your shares of common stock to you on the books and records maintained by the transfer agent on or prior to the record
    date such that you become the registered holder of NBH&#146;s common stock. Following such registration and provided that
    you maintain such registration for the holding period, you will receive a rights certificate representing a right to the number
    of shares of Newco common stock you may acquire pursuant to your subscription right.</span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Procedure
    for exercising rights:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
    such time as the Company contributes the Back-In Interest and the Bronco Assets to Newco, the Company intends to spin-off
    Newco such that Newco will be an independent company. Each of NBH and Newco will be an independent company. Each holder of subscription
    rights will be entitled to one share of common stock of Newco for each subscription right held by it without the payment of any consideration.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reasons
    for directly registering NBH shares:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Board has determined that pursuing a rights offering is in the best interests of NBH and its stockholders in that it would provide
    incentive to all stockholders of the Company who hold their shares in &#147;street name&#148; to directly register such shares
    in the name of the stockholders with NBH&#146;s transfer agent.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subscription
    agent:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">American
    Stock Transfer &amp; Trust Company, LLC.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
    agent:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.F.
    King, Inc.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk
    factors:</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 0pt; padding-right: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
    the &#147;Risk Factors&#148; section contained in this prospectus and in the documents we incorporate by reference in this prospectus
    to read about factors you should consider before investing in the rights offering.</span></td></tr>
  </table>

</div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a005_v1"></span>RISK
FACTORS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>You
should carefully consider all of the information in this prospectus and each of the risks described below, which we believe are the principal
risks that we face. Some of the risks relate to our business, others to the offering and the ownership of our common stock. The risks
and uncertainties described below are not the only ones faced by us. Additional risks and uncertainties not presently known or that are
currently deemed immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition,
operating results and cash flows and the value of our common stock could be materially adversely affected.</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to this Offering</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>There
is no public market for the subscription rights being offered in this offering.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no established public trading market for the subscription rights being offered in this offering, and we do not expect a market to
develop. Without an active trading market, the liquidity of the subscription rights will be limited.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Newco
may receive a limited amount of the Back-In Interest and the Bronco Prospect and the Company may sell, assign, mortgage, waive or cancel
the Back-In Interest or sell, assign or mortgage the Bronco Assets.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
amount of the Back-In Interest and the Bronco Prospect that Newco will receive is dependent on multiple factors. First, the number of
eligible holders of shares of NBH common stock is undetermined, and the Company cannot forecast how many eligible holders of shares of
NBH common stock will elect to register their shares of NBH common stock with the Company&#146;s transfer agent. Second, the Company
will control the Back-In Interest and may elect to sell, mortgage, waive, cancel or assign some or all of the Back-In Interest at any
time in the future and prior to any transfer to Newco. Similarly, the Company will control the Bronco Assets and may elect to
sell, assign or mortgage some or all of the Bronco Assets at any time in the future and prior to any transfer to Newco. In the
event that the Company needs to sell all or a portion of the Back-In Interest or the Bronco Assets to benefit the Company related
to a sale of the Company&#146;s other assets, then the Company may elect to effect such a sale. Additionally, the Company may elect
to waive or cancel all or a portion of the Back-In Interest related to the development of the Orogrande Prospect. The Company may elect
to waive, cancel or assign a portion of the Back-In Interest in order to entice the drilling of prospects on the Orogrande Project from
third parties who commit to drilling wells on the Orogrande Prospect in exchange for the Company receiving the benefits of such transaction,
which may include the Company receiving cash consideration or a right to a back-in interest on any prospect that is developed. The Company
may also elect to place a lien on the Back-In Interest or the Bronco Assets in order to secure financing for the Company. In the
event of a default on such financing, then the financial institution with such lien may elect to foreclose on the Back-In Interest or
the Bronco Assets. In the event the Company consummates any of the foregoing transactions, the subscription rights will have little
or no value.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Back-In Interest and the Bronco Assets may never have value.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
value of the Back-In Interest is tied to the economic success of the Orogrande Prospect. Specifically, the Back-In Interest option
triggers upon the point in time at which the proceeds of all production from all operations conducted on the Orogrande Project
(exclusive of royalty, overriding royalty and taxes chargeable to the working interest) (the &#147;Project Proceeds&#148;) equals
the actual cost incurred by NBH and its predecessors in drilling, testing, equipping and the cost of operating the wells located on
the Orogrande Prospect, inclusive of overhead charges (the &#147;Project Expenses&#148;). It is highly speculative that the Project
Proceeds will reach and exceed the Project Expenses. The current estimated amount of Project Expenses as of June 30, 2023 is
$49,245,738. See generally &#147;Risks Related to Our Business and Growth Strategy&#148;.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Bronco Prospect presently is an undrilled collection of oil and gas leases. The Bronco Prospect will require substantial capital
investment by the Company and potentially other third parties who may invest in the Bronco Prospect now or in the future, and the Company
may never elect to spend capital on the Bronco Prospect. Assuming capital is obtained to test and explore the Bronco Prospect, it is
possible that there are not sufficient finds of hydrocarbons to justify continued drilling activities in order to make the Bronco Prospect
economically feasible. In order to secure capital to develop the Bronco Prospect, the Company may have to substantially reduce its interest
in the Bronco Prospect. Further, to the extent that the Company expends capital to develop the Bronco Prospect, the Company would anticipate
receiving back all funds it incurred prior to the equity holders of Newco receiving returns from the Bronco Prospect. It is highly
speculative that the future owners of Newco will receive proceeds from the Bronco Prospect. See generally &#147;Risks Related to Our
Business and Growth Strategy.&#148;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Bronco Assets are subject to a back-in working interest and an overriding royalty interest.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Bronco Prospect is subject to the 12.5% Reserved Bronco Back-In Interest. The Reserved Bronco Back-In Interest will be reached at the
point in time at which the proceeds of all production from all operations conducted on the Bronco Prospect (exclusive of royalty, overriding
royalty and taxes chargeable to the working interest) equals the actual cost incurred by NBH and any third parties who contribute capital
for the drilling, testing, equipping and the cost of operating the wells located on the Bronco Prospect inclusive of overhead charges.
Upon the Bronco Prospect hitting project payout, Newco&#146;s interest in the Bronco Prospect would decrease and correspondingly its
rights to operating profits from any producing oil and gas wells as well as any potential divesture of the Bronco Prospect. Further,
the Bronco Prospect is subject to the Reserved Bronco Overriding Royalty Interest. This means that the revenues that Newco will receive
from the proceeds of the sales of hydrocarbons from future wells located on Bronco Prospect will be limited seventy-five percent, as
the mineral lessors and Bronco Exploration Team will share a twenty-five percent (25%) royalty on all sales of hydrocarbons as set forth
in the oil and gas leases related to the Bronco Prospect and the Contribution Agreement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
tax consequences of the receipt, sale, exercise, expiration and cancellation of the subscription rights are not certain.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights for U.S. federal income tax purposes
is not entirely clear. The Internal Revenue Service (the &#147;IRS&#148;) may disagree with the tax treatment discussed herein. You
should discuss with your tax advisor the treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights
for U.S. federal income tax purposes. For a detailed discussion, see &#147;Material U.S. Federal Income Tax Considerations.&#148;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
you receive subscription rights and NBH subsequently cancels the rights offering, you may be subject to adverse U.S. federal income tax
consequences.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
should discuss with your tax advisor the tax consequences of receiving subscription rights if NBH subsequently cancels the rights offering.
NBH (and any other applicable withholding agent) is likely to take the position, for information reporting and withholding purposes,
that you may have taxable dividend income upon the receipt of the subscription rights even if NBH subsequently cancels the rights offering.
If withholding tax is withheld from you in this event, you should consult your tax advisor as to whether to seek a refund of such amount
from the IRS. For a detailed discussion, see &#147;Material U.S. Federal Income Tax Considerations.&#148;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>You
may be required to pay certain transfer fees or expenses in connection with transfers to become the registered holder of your shares
of NBH common stock on the books and records of NBH's transfer agent.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
all transfers by any beneficial owner to transfer the shares of NBH common stock then held in "street name" through a broker, bank or
other nominee, such bank, broker or nominee may impose a transfer or other transaction fee to be borne by the beneficial owner in accordance
with such bank's, broker's or nominee's ordinary practices and policies. Further, NBH's transfer agent may also impose certain ownership
transfer fees on the brokers instructed to transfer shares of NBH common stock to beneficial owners in the books of the transfer agent
based on fees published by and pursuant to certain contractual arrangements of the transfer agent to which such brokers are subject.&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Business and Growth Strategy</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have a limited operating history relative to larger companies in our industry and may not be successful in developing profitable business
operations.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have a limited operating history relative to larger companies in our industry. Our business operations must be considered in light of
the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industry. As of the
date of this prospectus, we have generated limited revenues and have limited assets. We have an insufficient history at this time on
which to base an assumption that our business operations will prove to be successful in the long-term. Our future operating results will
depend on many factors, including:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 90%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to raise adequate working capital;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    success of our development and exploration;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    demand for oil and natural gas;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    level of our competition;</span></td></tr>
</table>

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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 90%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to attract and maintain key management and employees; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to efficiently explore, develop, produce or acquire sufficient quantities of marketable oil or natural gas in a highly competitive
    and speculative environment while maintaining quality and controlling costs.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
achieve profitable operations in the future, we must, alone or with others, successfully manage the factors stated above, as well as
continue to develop ways to enhance our production efforts. Despite our best efforts, we may not be successful in our exploration or
development efforts or obtain required regulatory approvals. There is a possibility that some, or all, of the wells in which we obtain
interests may never produce oil or natural gas.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have limited operating history as an independent company, and our historical financial information is not necessarily representative
of the results we would have achieved as an independent company and may not be a reliable indicator of our future results.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
derived the historical financial information included in this prospectus from Meta on a consolidated basis prior to the distribution
of our common stock which was completed on December 14, 2022 (the &#147;Spin-Off&#148;), and this information does not necessarily
reflect the results of operations and financial position we would have achieved as an independent company during the periods presented
or those that we will achieve in the future. This is primarily because of the following factors:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 90%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
    to the Spin-Off, we operated as part of Meta&#146;s broader corporate organization, and Meta performed various corporate functions
    for us. Our historical financial information reflects allocations of corporate expenses from Meta for these and similar functions.
    These allocations may not reflect the costs we will incur for similar services in the future as an independent company.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    entered into certain transactions with Meta that did not exist prior to the Spin-Off, which may cause us to incur new costs.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
historical financial information does not reflect changes that we expect to experience in the future as a result of our separation from
Meta, including changes in our cost structure, personnel needs, tax structure, financing and business operations. As part of Meta, we
enjoyed certain benefits from Meta&#146;s operating diversity, size, purchasing power, borrowing leverage and available capital for
investments, which are no longer available to us. As an independent entity, we may be unable to purchase goods, services and technologies,
such as insurance and health care benefits and computer software licenses or access capital markets on terms as favorable to us as those
we obtained as part of Meta prior to the Spin-Off.</span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are now responsible for the additional costs associated with being an independent company, including costs related to corporate governance,
investor and public relations and public reporting. In addition, certain costs incurred by Meta, including executive oversight, accounting,
treasury, tax, legal, human resources, occupancy, procurement, information technology and other shared services, have historically been
allocated to us by Meta; but these allocations may not reflect the future level of these costs to us as we begin to provide these services
ourselves. Therefore, our historical financial statements may not be indicative of our future performance as an independent company.
We cannot assure you that our operating results will continue at a similar level when we are an independent company. For additional information
about our past financial performance and the basis of presentation of our financial statements, see &#147;Management&#146;s Discussion
and Analysis of Financial Condition and Results of Operations&#148; and our consolidated financial statements and the notes thereto
included elsewhere in this prospectus.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have limited capital and will need to raise additional capital in the immediate future.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
continue to require additional capital to maintain operations and to expand our exploration and development programs. We may be unable
to obtain additional capital when required or on favorable terms. Future acquisitions, exploration, development, production and marketing
activities, as well as our administrative requirements (such as salaries, insurance expenses and general overhead expenses, as well as
legal compliance costs and accounting expenses) will require a substantial amount of additional capital and cash flow.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may pursue sources of additional capital through various financing transactions or arrangements, including joint venturing of projects,
debt financing, equity financing, or other means. We may not be successful in identifying suitable financing transactions in the time
period required or at all, and we may not obtain the capital we require by other means. If we do not succeed in raising additional capital,
our resources may not be sufficient to fund our planned operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets (both generally and in
the oil and natural gas industry in particular), our limited operating history, the location of our oil and natural gas properties
and prices of oil and natural gas on the commodities markets (which will impact the amount of asset-based financing available to us,
if any) and the departure of key employees. Further, if oil or natural gas prices on the commodities markets decline, our future
revenues, if any, will likely decrease and such decreased revenues may increase our requirements for capital. If the amount of
capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our
capital needs (even to the extent that we reduce our operations), third parties may be reluctant to provide the services we
need in order to operate and we may be required to cease our operations, divest our assets at unattractive prices or obtain
financing on unattractive terms.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
additional capital raised through the sale of equity may dilute the ownership percentage of our stockholders. Raising any such capital
could also result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool
of outstanding equity. The terms of securities we issue in future capital transactions may be more favorable to our new investors, and
may include preferences, superior voting rights and the issuance of other derivative securities, and issuances of incentive awards under
equity employee incentive plans, which may have a further dilutive effect.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities
law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection
with certain securities we may issue, which may adversely impact our financial condition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may not achieve or maintain profitable operations, and therefore, may not be able to continue as a going concern.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has a history of net losses from operations and negative cash flow from operating activities. We will need to raise additional
working capital to continue our normal and planned operations. We will also need to generate and sustain significant revenue levels in
future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.
During the year ended December 31, 2022, we incurred a net loss of $8,848,873 ($7,938,335 for the predecessor period and $910,538 for
the successor period) and used cash in the amount of $5,400,841 for operating activities for the year ended December 31, 2022 ($5,626,181
used in the predecessor period and $225,340 provided by the successor period). At December 31, 2022, we had an accumulated deficit of
$910,538 representing the successor period and had a working capital deficit of $29,077,591 compared with a working capital deficit of
$13,307,453 as of December 31, 2021. These factors raise doubt regarding our ability to continue as a going concern. Because we have
incurred significant net losses, our auditors have issued a &#147;going concern&#148; audit qualification. A &#147;going concern&#148;
qualification indicates that the financial statements have been prepared assuming we will continue as a going concern and do not include
any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification
of liabilities that may result if we do not continue as a going concern. Therefore, you should not rely on our consolidated balance sheet
as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution
to stockholders, in the event of liquidation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>There
can be no assurance that our financing strategy or strategic alternatives will result in a transaction satisfactory to holders of our
common stock.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may consider various strategic alternatives, including partnering with third parties, a potential sale of some or all of our assets,
a merger transaction, and potential financing alternatives. Even if a partnering transaction, sale, merger or financing transaction were
to be consummated, it may not return any value to holders of our common stock. Regardless of whether we execute a partnership, sale,
merger or financing transaction, the adverse pressures negatively impacting our business that we have been or are currently experiencing
may continue or intensify, including the risk that we may not be able to continue as a going concern.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
are mainly concentrated in one geographic area, which increases our exposure to many of the risks enumerated herein.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
in a concentrated area increases the potential impact that many of the risks stated herein may have upon our ability to perform. For
example, we have greater exposure to regulatory actions impacting Texas, natural disasters in the geographic area, competition for
equipment, services and materials available in the area and access to infrastructure and markets. In addition, the effect of
fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas such as
the Permian Basin, which may cause these conditions to occur with greater frequency or magnify the effect of these conditions. Due
to the concentrated nature of our portfolio of properties, a number of our properties could experience any of the same conditions at
the same time, resulting in a relatively greater impact on our results of operations than they might have on other companies that
have a more diversified portfolio of properties. Such delays or interruptions could have a material adverse effect on our financial
condition and results of operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Because
of the speculative nature of oil and natural gas exploration, there is risk that we will not find commercially exploitable oil and natural
gas and that our business will fail.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
search for commercial quantities of oil and natural gas as a business is extremely risky. We cannot provide investors with any assurance
that any properties in which we obtain a mineral interest will contain commercially exploitable quantities of oil and/or natural gas.
The exploration expenditures to be made by us may not result in the discovery of commercial quantities of oil and/or natural gas. Problems
such as unusual or unexpected formations or pressures, premature declines of reservoirs, invasion of water into producing formations
and other conditions involved in oil and natural gas exploration often result in unsuccessful exploration efforts. If we are unable to
find commercially exploitable quantities of oil and natural gas, and/or we are unable to commercially extract such quantities, we may
be forced to abandon or curtail our business plan, and as a result, any investment in us may become worthless.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Litigation
may adversely affect our business, financial condition, and results of operations.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
of our subsidiaries are subject and from time to time in the normal course of our business operations, may become subject to litigation
that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes
to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources.
There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless
of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient
amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage
for any claims could adversely affect our business and the results of our operations. For additional discussion of pending litigation
matters, see &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations&#8212;Legal Proceedings.&#148;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Strategic
relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to successfully acquire oil and natural gas interests, to build our reserves, to participate in drilling opportunities and to
identify and enter into commercial arrangements with customers will depend on developing and maintaining close working relationships
with industry participants and our ability to select and evaluate suitable properties and to consummate transactions in a highly competitive
environment. These realities are subject to change and our inability to maintain close working relationships with industry participants
or continue to acquire suitable property may impair our ability to execute our business plan.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
continue to develop our business, we will endeavor to use the business relationships of our management to enter into strategic relationships,
which may take the form of joint ventures with other private parties and contractual arrangements with other oil and natural gas companies,
including those that supply equipment and other resources that we will use in our business. We may not be able to establish these strategic
relationships, or if established, we may not be able to maintain them. In addition, the dynamics of our relationships with strategic
partners may require us to incur expenses or undertake activities we would not otherwise be inclined to in order to fulfill our obligations
to these partners or maintain our relationships. If our strategic relationships are not established or maintained, our business prospects
may be limited, which could diminish our ability to conduct our operations.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
acreage must be drilled before lease expiration in order to hold the acreage by production. In the highly competitive market for acreage,
failure to drill sufficient wells in order to hold acreage will result in a substantial lease renewal cost, or if renewal is not feasible,
loss of our lease and prospective drilling opportunities.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
leases on oil and natural gas properties typically have a primary term of four to five years, after which they expire unless, prior
to expiration, drilling obligations are fulfilled or production is established within the spacing units covering the
undeveloped acres. As of March 31, 2023, we had leases representing approximately 134,000 net acres in the Orogrande Basin in West
Texas as part of the Orogrande Project. These oil and gas leases will expire on December 31, 2023 if we fail to drill five
additional wells under our contractual obligations with University Lands. If we fail to drill the required five wells and are
otherwise unable to negotiate an extension to drill the required wells, these leases are subject to expiration. We will
require additional capital to drill these wells, and we may not be able to obtain additional capital when required in order to drill
these wells, or on favorable terms. As of March 31, 2023, we had leases representing 645 net acres in the Eastern edge of the
Midland Basin in West Texas, which are currently held by production by active wells. In the event that we fail to meet our drilling
obligations in the Orogrande Basin, whether because we are unable to obtain additional capital when required or otherwise, or if
production ceases in the Midland Basin, our leases will expire. Similarly, the oil and gas leases constituting the Bronco Prospect
will need to be drilled and commence producing in paying quantities in order for the oil and gas leases not to terminate. If we have
to renew such leases on new terms, we could incur significant cost increases, and we may not be able to renew such leases on
commercially reasonable terms or at all. In addition, on certain portions of our acreage, third-party leases may become immediately
effective if our leases expire. As such, our actual drilling activities may materially differ from our current expectations,
which could adversely affect our business.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
price of oil and natural gas has historically been volatile. If it were to decrease substantially, our projections, budgets, and revenues
would be adversely affected, potentially forcing us to make changes in our operations.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
future financial condition, results of operations and the carrying value of any oil and natural gas interests we acquire will depend
primarily upon the prices paid for oil and natural gas production. Oil and natural gas prices historically have been volatile and likely
will continue to be volatile in the future, especially given current world geopolitical conditions. Cash flows from operations are highly
dependent on the prices that we receive for oil and natural gas. This price volatility could affect the amount of our cash flows available
for capital expenditures and our ability to borrow money or raise additional capital. The prices for oil and natural gas are subject
to a variety of additional factors that are beyond our control. These factors include:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 90%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    level of consumer demand for oil and natural gas;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    domestic and foreign supply of oil and natural gas;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    ability of the members of the Organization of Petroleum Exporting Countries (&#147;OPEC&#148;) to agree to and maintain oil price
    and production controls;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    price of foreign oil and natural gas;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">domestic
    governmental regulations and taxes;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    price and availability of alternative fuel sources;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">weather
    conditions;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">market
    uncertainty due to political conditions in oil and natural gas producing regions, including the Middle East; and</span></td></tr>

<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 90%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">worldwide
    economic conditions.</span></td></tr>
  </table>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
factors as well as the volatility of the energy markets generally make it extremely difficult to predict future oil and natural gas price
movements with any certainty. Declines in oil and natural gas prices affect our revenues and could reduce the amount of oil and natural
gas that we can produce economically. Accordingly, such declines could have a material adverse effect on our financial condition, results
of operations, oil and natural gas reserves and the carrying values of our oil and natural gas properties. If the oil and natural gas
industry experiences significant price declines, we may be unable to make planned expenditures, among other things. If this were to happen,
we may be forced to abandon or curtail our business operations, which would cause the value of an investment in us to decline or become
worthless.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
early March 2020, the market experienced a precipitous decline in oil prices in response to concerns about oil demand due to the economic
impact of COVID-19 and anticipated increases in supply from Russia and OPEC, particularly Saudi Arabia. Generally, demand for oil declined
substantially following the initial onset of the COVID-19 pandemic, but has recovered over the past year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
oil or natural gas prices reverse and go on a downward trend or drilling efforts are unsuccessful, we could be required to record
additional write-downs of our oil and natural gas properties. Write-downs may occur when oil and natural gas prices are low, or if
we have downward adjustments to our estimated proved reserves, increases in our estimates of operating or development costs,
deterioration in drilling results or mechanical problems with wells where the cost to redrill or repair is not supported by the
expected economics.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion and net of deferred income
taxes may not exceed an amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural
gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated
fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, an impairment
would be recognized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Because
of the inherent dangers involved in oil and natural gas operations, there is a risk that we may incur liability or damages as we conduct
our business operations, which could force us to expend a substantial amount of money in connection with litigation and/or a settlement.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
oil and natural gas business involves a variety of operating hazards and risks such as well blowouts, pipe failures, casing collapse,
explosions, uncontrollable flows of oil, natural gas or well fluids, fires, spills, pollution, releases of toxic gas and other environmental
hazards and risks. These hazards and risks could result in substantial losses to us from, among other things, injury or loss of life,
severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities,
regulatory investigation and penalties and suspension of operations. In addition, we may be liable for environmental damages caused by
previous owners of property purchased and leased by us. In recent years, there has also been increased scrutiny on the environmental
risk associated with hydraulic fracturing, such as underground migration and surface spillage or mishandling of fracturing fluids including
chemical additives. Hydraulic fracturing technology has evolved and continues to evolve and become more aggressive. We believe that recent
designs have seen improvement in, among other things, proppant per foot, barrels of water per stage, fracturing stages, and clusters
per fracturing stage. In addition, we will need to quickly adapt to the evolving technology, which could take time and divert our attention
to other business matters. Even with improved hydraulic fracturing technology, substantial liabilities to third parties or governmental
entities may be incurred, the payment of which could reduce or eliminate the funds available for exploration, development or acquisitions
or result in the loss of our properties and/or force us to expend substantial monies in connection with cleanup, litigation or settlements.
While we have insurance to cover some of such losses and liabilities, it may not be adequate to cover any losses or liabilities. We cannot
predict the availability of insurance or the availability of insurance at premium levels that justify our purchase. The occurrence of
a significant event not fully insured or indemnified against could materially and adversely affect our financial condition and operations.
We may elect to self-insure if management believes that the cost of insurance, although available, is excessive relative to the risks
presented. In addition, pollution and environmental risks generally are not fully insurable. The occurrence of an event not fully covered
by insurance could have a material adverse effect on our financial condition and results of operations.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
market for oil and natural gas is intensely competitive, and competition pressures could force us to abandon or curtail our business
plan.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for oil and natural gas exploration services is highly competitive, and we only expect competition to intensify in the
future. Numerous well-established companies are focusing significant resources on exploration and are currently competing with us
for oil and natural gas opportunities. Other oil and natural gas companies may seek to acquire oil and natural gas leases and
properties that we have targeted. Additionally, other companies engaged in our line of business may compete with us from time to
time in obtaining capital from investors. Competitors include larger companies which, in particular, may have access to greater
resources, may be more successful in the recruitment and retention of qualified employees and may conduct their own refining and
petroleum marketing operations, which may give them a competitive advantage. Actual or potential competitors may be strengthened
through the acquisition of additional assets and interests. Additionally, there are numerous companies focusing their resources on
creating fuels and/or materials which serve the same purpose as oil and natural gas but are manufactured from renewable
resources.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result, we may not be able to compete successfully and competitive pressures may adversely affect our business, results of operations,
and financial condition. If we are not able to successfully compete in the marketplace, we could be forced to curtail or even abandon
our current business plan, which could cause any investment in us to become worthless.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Inflation
may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to enter into future
traditional debt financing.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inflation
can adversely affect us by increasing costs of critical materials, equipment, labor, and other services. In addition, inflation is often
accompanied by higher interest rates. Continued inflationary pressures could impact our profitability. Inflation may also affect our
ability to enter into future traditional debt financing, as high inflation may result in an increase in cost.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may not be able to successfully manage growth, which could lead to our inability to implement our business plan.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
growth of the Company may place a significant strain on our managerial, operational and financial resources, especially considering that
we currently only have a small number of executive officers, employees and advisors. Further, as we enter into additional contracts,
we will be required to manage multiple relationships with various consultants, businesses and other third parties. These requirements
will be exacerbated in the event of our further growth or in the event that the number of our drilling and/or extraction operations increases.
Our systems, procedures and/or controls may not be adequate to support our operations or that our management will be able to achieve
the rapid execution necessary to successfully implement our business plan. If we are unable to manage our growth effectively, our business,
results of operations and financial condition will be adversely affected, which could lead to us being forced to abandon or curtail our
business plan and operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Developing
oil and natural gas wells and producing oil and natural gas are costly and high-risk activities with many uncertainties that could adversely
affect future production from our oil and natural gas properties. Any delays, reductions or cancellations in development and producing
activities could materially, adversely impact the value of your shares of common stock.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recovery
of undeveloped reserves and the development of developed non-producing reserves requires substantial capital expenditures and successful
drilling operations of our oil and natural gas properties. All of the recent development costs related to our Hazel Project were paid
by Masterson Hazel Partners LP (&#147;MHP&#148;). Under the Option Agreement (as defined below), we granted MHP the option to acquire
the Hazel Project in exchange for it conducting, and paying for, development activity sufficient to maintain the Hazel mineral leases
in good standing. The Option Agreement provided that if MHP declined to exercise the option to acquire the property, we would be obligated
to reimburse them for their cost of the development activity to the extent that the wells produced revenues beyond the date of the option&#146;s
lapse until the total amount of development expenses are reimbursed. MHP declined to exercise the option effective September 30, 2021.
The 2021 reserve data included in the reserve report of our independent petroleum engineer assumes a certain amount of capital expenditures
will be made to develop such reserves, and the present value of such reserves was adjusted based on our obligation to assign revenue
from the Hazel Project to MHP.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
development of such reserves may in the future take a long period of time and may require higher levels of capital expenditures than
anticipated, which, for the Orogrande Project, are borne in part by the non-operating working interest owners of such properties. Delays
in the development of the reserves, increases in drilling and development costs (including expenses related to secondary and tertiary
recovery techniques) of such reserves or decreases or continued volatility in commodity prices will reduce the future net revenues of
the estimated possible reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves
could force us to reclassify certain of the proved reserves as unproved reserves.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the process of developing oil and natural gas wells and producing oil and natural gas from our properties is subject to numerous
risks beyond our control. The ability to carry out operations or to finance planned development expenses could be materially and adversely
affected by any factor that may curtail, delay, reduce or cancel development and production, including:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays
    imposed by or resulting from compliance with environmental and other governmental or regulatory requirements, including permitting
    requirements, limitations on or resulting from wastewater discharge and disposal of exploration and production wastes, including,
    subsurface injections, as well as additional regulation with respect to GHG emissions;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">pressure
    or irregularities in geological formations;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">restricted
    access to land for drilling or to existing pipeline infrastructure;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">lack
    of available gathering, transportation and processing facilities, including availability on commercially reasonable terms, or delays
    in construction of gathering facilities;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">lack
    of available capacity on interconnecting transmission pipelines;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">equipment
    failures or accidents;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">failure
    of secondary recovery operations to perform as expected;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">unexpected
    operational events and drilling conditions;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">declines
    in oil or natural gas prices;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">limitations
    in the market for oil or natural gas;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">pipe
    or cement failures;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">casing
    collapses;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">shortages,
    unavailability or high cost of drilling rigs, tubular materials, equipment, supplies, personnel and services;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">lost
    or damaged drilling and service tools;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">loss
    of drilling fluid circulation;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">uncontrollable
    flows of oil and natural gas, water or drilling fluids;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">blowouts,
    explosions fires and natural disasters;</span></td></tr>
</table>

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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">environmental
    hazards, such as oil and natural gas leaks, pipeline and tank ruptures, encountering naturally occurring radioactive materials, and
    unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface
    environment;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">adverse
    weather conditions, such as drought, floods, blizzards, tornados and ice storms; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">title
    problems or legal disputes regarding leasehold rights.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
operations are heavily dependent on current environmental regulation, changes in which we cannot predict.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oil
and natural gas activities that we will engage in, including production, processing, handling and disposal of hazardous materials, such
as hydrocarbons and naturally occurring radioactive materials (if any), are subject to stringent regulation. We could incur significant
costs, including cleanup costs resulting from a release of hazardous material, third-party claims for property damage and personal injuries
fines and sanctions, as a result of any violations or liabilities under environmental or other laws. Changes in or more stringent enforcement
of environmental laws could force us to expend additional operating costs and capital expenditures to stay in compliance.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Various
federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of
the environment, directly impact oil and natural gas exploration, development and production operations, and consequently may impact
our operations and costs. These regulations include, among others, (i) regulations by the EPA and various state agencies regarding approved
methods of disposal for certain hazardous and non-hazardous wastes; (ii) CERCLA and analogous state laws which regulate the removal or
remediation of previously disposed wastes (including wastes disposed of or released by prior owners or operators), property contamination
(including groundwater contamination), and remedial plugging operations to prevent future contamination; (iii) the CAA and comparable
state and local requirements which regulate air emissions; (iv) the Oil Pollution Act of 1990 which contains numerous requirements relating
to the prevention of and response to oil spills into waters of the United States; (v) the RCRA which is the principal federal statute
governing the treatment, storage and disposal of hazardous wastes; (vi) the Federal Water Pollution Control Act and comparable state
and local requirements which regulate discharges to federal and state waters; and (vii) state regulations and statutes governing the
handling, treatment, storage and disposal of naturally occurring radioactive material.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that we will be in substantial compliance with applicable environmental laws and regulations. We cover all costs associated with
the related insurance coverage for such environmental regulatory compliance. To date, other than the cost of insurance, we have not expended
any amounts to comply with such regulations, and we do not currently anticipate that future compliance will have a materially adverse
effect on our consolidated financial position, results of operations or cash flows. However, if we are deemed to not be in compliance
with applicable environmental laws, we could be forced to expend significant funds to be in compliance, which would have a materially
adverse effect on our financial condition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Government
regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Several
states, including Texas, and local jurisdictions, have adopted, or are considering adopting, regulations that could restrict or prohibit
hydraulic fracturing in certain circumstances, impose more stringent operating standards and/or require the disclosure of the composition
of hydraulic fracturing fluids. The Texas Legislature adopted legislation, effective September 1, 2011, requiring oil and natural gas
operators to publicly disclose the chemicals used in the hydraulic fracturing process. The Texas Railroad Commission adopted rules and
regulations implementing this legislation that apply to all wells for which the Texas Railroad Commission issues an initial drilling
permit after February 1, 2012. The law requires that the well operator disclose the list of chemical ingredients subject to the requirements
of OSHA for disclosure on an internet website and also file the list of chemicals with the Texas Railroad Commission with the well completion
report. The total volume of water used to hydraulically fracture a well must also be disclosed to the public and filed with the Texas
Railroad Commission. Also, in May 2013, the Texas Railroad Commission adopted rules governing well casing, cementing and other standards
for ensuring that hydraulic fracturing operations do not contaminate nearby water resources. The rules took effect in January 2014. Additionally,
on October 28, 2014, the Texas Railroad Commission adopted disposal well rule amendments designed, among other things, to require applicants
for new disposal wells that will receive non-hazardous produced water and hydraulic fracturing flowback fluid to conduct seismic activity
searches utilizing the U.S. Geological Survey. The searches are intended to determine the potential for earthquakes within a circular
area of 100 square miles around a proposed new disposal well. The disposal well rule amendments, which became effective on November 17,
2014, also clarify the Texas Railroad Commission&#146;s authority to modify, suspend or terminate a disposal well permit if scientific
data indicates a disposal well is likely to contribute to seismic activity. The Texas Railroad Commission has used this authority to
deny permits and temporarily suspend operations for waste disposal wells and, in September 2021, the Texas Railroad Commission curtailed
the amount of water companies were permitted to inject into some wells in the Permian Basin, and has since indefinitely suspended some
permits there and expanded the restrictions to other areas. These restrictions on use of produced water and a moratorium on new produced
water disposal wells could result in increased operating costs, requiring us or our service providers to truck produced water, recycle
it or pump it through the pipeline network or other means, all of which could be costly. We or our service providers may also need to
limit disposal well volumes, disposal rates and pressures or locations, or require us or our service providers to shut down or curtail
the injection of produced water into disposal wells. These factors may make drilling and completion activity in the affected parts of
the Permian Basin less economical and adversely impact our business, results of operations and financial condition.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Climate
change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil and
natural gas that we produce</i></b>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
EPA previously published its findings that emissions of GHGs present a danger to public health and the environment because such gases
are, according to the EPA, contributing to warming of the Earth&#146;s atmosphere and other climatic changes. Based on these findings,
the EPA has adopted various rules to address GHG emissions under existing provisions of the CAA. For example, the EPA has adopted rules
requiring the reporting of GHG emissions from various oil and natural gas operations on an annual basis, which includes certain of our
operations. In addition, in June 2016, the EPA finalized rules to reduce methane emissions from new, modified or reconstructed sources
in the oil and natural gas sector, including implementation of an LDAR program to minimize methane emissions, under the CAA&#146;s New
Source Performance Standards Quad Oa. However, the EPA has taken several steps to delay implementation of the Quad Oa standards. The
agency proposed a rulemaking in June 2017 to stay the requirements for a period of two years and in October 2018, the EPA proposed revisions
to Quad Oa, such as changes to the frequency for monitoring fugitive emissions at well sites and changes to requirements that a professional
engineer certify when meeting certain Quad Oa requirements is technically infeasible. In September 2020, the EPA finalized amendments
to Quad Oa that rescind requirements for the transmission and storage segment of the oil and natural gas industry and rescind methane-specific
limits that apply to the industry&#146;s production and processing segments, among other things. On June 30, 2021, Congress issued a
joint resolution pursuant to the Congressional Review Act disapproving the September 2020 rule, and on November 15, 2021, EPA issued
a proposed rule to revise the Quad Oa regulations that, if finalized, would require methane emissions reductions and implementation of
a fugitive emissions monitoring and repair program. EPA has also announced its intention to issue a supplemental proposal in 2022 that
may expand on or modify the 2021 proposal in response to public input. It is possible that these rules will continue to require oil and
natural gas operators to expend material sums.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, in November 2016, BLM issued final rules to reduce methane emissions from venting, flaring, and leaks during oil and natural
gas operations on public lands that are substantially similar to the EPA Quad Oa requirements. However, on December 8, 2017, the BLM
published a final rule to temporarily suspend or delay certain requirements contained in the November 2016 final rule until January 17,
2019, including those requirements relating to venting, flaring and leakage from oil and natural gas production activities. Further,
in September 2018, the BLM published a final rule to revise or rescind certain provisions of the 2016 rule. On July 21, 2020, a Wyoming
federal court vacated almost all of the 2016 rule, including all provisions relating to the loss of gas through venting, flaring, and
leaks, and on July 15, 2020, a California federal court vacated the 2018 rule. While, as a result of these developments, future implementation
of the EPA and BLM methane rules is uncertain, given the long-term trend towards increasing regulation, future federal GHG regulations
of the oil and natural gas industry remain a possibility. We may be required to expend significant costs to obtain the necessary equipment
(pollution control equipment and optical gas imaging equipment for LDAR inspections) and personnel trained to assist with inspection
and reporting requirements to ensure we are in compliance with these rules.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may incur increasing attention to environmental, social and governance (&#147;ESG&#148;) matters that may impact our business.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Businesses
across all industries are facing increasing scrutiny from stakeholders related to their ESG practices. If we do not adapt to or comply
with investor or stakeholder expectations and standards, which are evolving, or if we are perceived to have not responded appropriately
to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage
and the business, financial condition and/or the value of our common stock could be materially and adversely affected. Increasing attention
to climate change, increasing societal expectations on businesses to address climate change, and potential consumer use of substitutes
to energy commodities may result in increased costs, reduced demand for our hydrocarbon products, reduced profits, increased investigations
and litigation, and negative impacts on our ability to access capital markets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, organizations that provided information to investors on corporate governance and related matters have developed rating processes
for evaluating business entities on their approach to ESG matters. Currently, there are no universal standards for such scores or ratings,
but the importance of sustainability evaluations is becoming more broadly accepted by investors and shareholders. Such ratings are used
by some investors to inform their investment and voting decisions. Additionally, certain investors use these scores to benchmark businesses
against their peers. If we are perceived as lagging, our investors may engage with such third party organizations to require improved
ESG disclosure or performance.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
estimates of the volume of reserves could have flaws, or such reserves could turn out not to be commercially extractable. As a result,
our future revenues and projections could be incorrect.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Estimates
of reserves and of future net revenues prepared by different petroleum engineers may vary substantially depending, in part, on the assumptions
made and may be subject to adjustment either up or down in the future. Our actual amounts of production, revenue, taxes, development
expenditures, operating expenses, and quantities of recoverable oil and natural gas reserves may vary substantially from the estimates.
Oil and natural gas reserve estimates are necessarily inexact and involve matters of subjective engineering judgment. In addition, any
estimates of our future net revenues and the present value thereof are based on assumptions derived in part from historical price and
cost information, which may not reflect current and future values, and/or other assumptions made by us that only represent our best estimates.
If these estimates of quantities, prices and costs prove inaccurate, we may be unsuccessful in expanding our oil and natural gas reserves
base with our acquisitions. Additionally, if declines in and instability of oil and natural gas prices occur, then write downs in the
capitalized costs associated with any oil and natural gas assets we obtain may be required. Because of the nature of the estimates of
our reserves and estimates in general, reductions to our estimated proved oil and natural gas reserves and estimated future net revenues
may not be required in the future, and/or that our estimated reserves may not be present and/or commercially extractable. If our reserve
estimates are incorrect, we may be forced to write down the capitalized costs of our oil and natural gas properties.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Decommissioning
costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may become responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which we use for production
of oil and natural gas reserves. Abandonment and reclamation of these facilities and the costs associated therewith is often referred
to as &#147;decommissioning.&#148; We accrue a liability for decommissioning costs associated with our wells but have not established
any cash reserve account for these potential costs in respect of any of our properties. If decommissioning is required before
economic depletion of our properties or if our estimates of the costs of decommissioning exceed the value of the reserves remaining at
any particular time to cover such decommissioning costs, we may have to draw on funds from other sources to satisfy such costs. The use
of other funds to satisfy such decommissioning costs could impair our ability to focus capital investment in other areas of our business.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may have difficulty distributing production, which could harm our financial condition.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to sell the oil and natural gas that we are able to produce, if any, the operators of the wells we obtain interests in may have
to make arrangements for storage and distribution to the market. We will rely on local infrastructure and the availability of transportation
for storage and shipment of our products, but infrastructure development and storage and transportation facilities may be insufficient
for our needs at commercially acceptable terms in the localities in which we operate. This situation could be particularly problematic
to the extent that our operations are conducted in remote areas that are difficult to access, such as areas that are distant from shipping
and/or pipeline facilities. These factors may affect our and potential partners&#146; ability to explore and develop properties and
to store and transport oil and natural gas production, increasing our expenses.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
weather conditions or natural disasters, actions by companies doing business in one or more of the areas in which we will operate, or
labor disputes may impair the distribution of oil and/or natural gas and in turn diminish our financial condition or ability to maintain
our operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
marketability of any future production will be dependent upon transportation and other facilities, certain of which we do not control.
When these facilities are unavailable, our operations can be interrupted and any revenues reduced.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
marketability of any future production depends in part upon the availability, proximity and capacity of transportation facilities owned
by third parties. The oil produced will be transported from the wellhead to our tank batteries by our gathering system. Our purchasers
would then transport the oil by truck to a pipeline for transportation. Our natural gas production will generally be transported by our
gathering lines from the wellhead to an interconnection point with the purchaser. We do not control these trucks and other third-party
transportation facilities and our access to them may be limited or denied. Insufficient production from our wells to support the construction
of pipeline facilities by our purchasers or a significant disruption in the availability of our or third-party transportation facilities
or other production facilities could adversely impact our ability to deliver to market or produce our production and thereby cause a
significant interruption in our operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may be required to flare a portion of our natural gas production for a number of reasons, including the fact that (i) our wells are not
yet tied into a third-party gathering system, (ii) the pressures on third-party gathering systems may be too high to allow additional
production from our wells to be transported or (iii) our production may be prorated due to high demand on third-party gathering systems.
We may flare additional natural gas from time to time.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Also,
the transfer of our oil and natural gas through third-party pipelines may be curtailed or delayed if it does not meet the quality
specifications of the pipeline owners. Our access to transportation options, including trucks owned by third parties, can also be
affected by U.S. federal and state regulation of oil and natural gas production and transportation, general economic conditions and
changes in supply and demand. If, in the future, we are unable, for any sustained period, to implement acceptable delivery or
transportation arrangements or encounter production-related difficulties we may  be required to shut in or curtail production. Any
such shut in or curtailment, or an inability to obtain favorable terms for delivery of our production, would adversely affect our
financial condition and results of operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
business will suffer if we cannot obtain or maintain necessary licenses.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
operations will require licenses, permits and in some cases renewals of licenses and permits from various governmental authorities. Our
ability to obtain, sustain or renew such licenses and permits on acceptable terms is subject to change in regulations and policies and
to the discretion of the applicable governments, among other factors. Our inability to obtain, or our loss of or denial of extension
of, any of these licenses or permits could hamper our ability to produce revenues from our operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Challenges
to our properties may impact our financial condition.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title
to oil and natural gas interests is often not capable of conclusive determination without incurring substantial expense. While we have
made and intend to make appropriate inquiries into the title of properties and other development rights we have acquired and intend to
acquire, title defects may exist. In addition, we may be unable to obtain adequate insurance for title defects, on a commercially reasonable
basis or at all. If title defects do exist, it is possible that we may lose all or a portion of our right, title and interests in and
to the properties to which the title defects relate. If our property rights are reduced, our ability to conduct our exploration, development
and production activities may be impaired. To mitigate title problems, common industry practice is to obtain a title opinion from a qualified
oil and natural gas attorney prior to the drilling operations of a well.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
rely on technology to conduct our business, and our technology could become ineffective or obsolete.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on technology, including geographic and seismic analysis techniques and economic models, to develop any reserve estimates and to
guide our exploration, development and production activities. We and our operator partners will be required to continually enhance and
update our technology to maintain its efficacy and to avoid obsolescence. The costs of doing so may be substantial and may be higher
than the costs that we anticipate for technology maintenance and development. If we are unable to maintain the efficacy of our technology,
our ability to manage our business and to compete may be impaired. Further, even if we are able to maintain technical effectiveness,
our technology may not be the most efficient means of reaching our objectives, in which case we may incur higher operating costs than
we would were our technology more efficient.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
loss of key personnel would directly affect our efficiency and profitability.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
future success is dependent, in a large part, on retaining the services of our planned management team. Our executive officers possess
a unique and comprehensive knowledge of our industry and related matters that are vital to our success within the industry. The knowledge,
leadership and technical expertise of these individuals would be difficult to replace. The loss of one or more of our officers could
have a material adverse effect on our operating and financial performance, including our ability to develop and execute our long-term
business strategy. We do not maintain key-man life insurance with respect to any employees. We have entered into employment agreements
with certain of our executive officers as described in more detail under the heading &#147;Executive Compensation&#148; elsewhere in
this prospectus.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have limited management and staff and are dependent upon partnering arrangements and third-party service providers.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have five full-time employees, including our Chief Executive Officer and Chief Financial Officer. The loss of these individuals would
have an adverse effect on our business, as we have very limited personnel. We leverage the services of other independent consultants
and contractors to perform various professional services, including engineering, oil and natural gas well planning and supervision, and
land, legal, environmental and tax services. We also pursue alliances with partners in the areas of geological and geophysical services
and prospect generation, evaluation and prospect leasing. Our dependence on third-party consultants and service providers create a number
of risks, including but not limited to:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 90%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    possibility that such third parties may not be available to us as and when needed; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    risk that we may not be able to properly control the timing and quality of work conducted with respect to our projects.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we experience significant delays in obtaining the services of such third parties or they perform poorly, our results of operations and
stock price could be materially adversely affected.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Certain
of our directors and officers have significant duties with, and spend significant time serving, entities that may compete with us in
seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business
opportunities.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
of our directors and officers, who are responsible for managing the direction of our operations and acquisition activities, hold positions
of responsibility with other entities that are in the business of identifying and acquiring oil and natural gas properties. The existing
positions held by these directors and officers may give rise to fiduciary or other duties that are in conflict with the duties they owe
to us. These directors and officers may become aware of business opportunities that may be appropriate for presentation to us as well
as to the other entities with which they are or may become affiliated. Due to these existing and potential future affiliations, they
may present potential business opportunities to other entities prior to presenting them to us, which could cause additional conflicts
of interest. They may also decide that certain opportunities are more appropriate for other entities with which they are affiliated,
and as a result, they may elect not to present those opportunities to us. These conflicts may not be resolved in our favor.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
business and operations may be adversely affected by the COVID-19 pandemic and may be adversely affected by other similar outbreaks.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the COVID-19 pandemic or other adverse public health developments, including voluntary and mandatory quarantines, travel
restrictions, and other restrictions, we have experienced delays, disruptions and temporary suspensions of our operations. In addition,
our financial condition and results of operations may be adversely affected by the COVID-19 pandemic in the future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
timeline and potential magnitude of the COVID-19 outbreak continue to be unknown. The continuation or amplification of the COVID-19 pandemic
could continue to more broadly affect the United States and global economy, including our business and operations, and the demand for
oil and natural gas. Other contagious diseases in the human population could have similar adverse effects. The potential impact from
COVID-19 is difficult to predict, therefore, the extent to which it will negatively affect our operating results, or the duration of
any potential business disruption is uncertain. The magnitude and duration of any impact will depend on future developments and new information
that may emerge regarding the duration of COVID-19 pandemic, the severity of any variants thereof, rate of vaccinations and other actions
taken by authorities to contain its impact or otherwise treat the disease, all of which are beyond our control.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Terrorist
attacks or cyber-incidents could result in information theft, data corruption, operational disruption and/or financial loss.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Like
most companies, we have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud
applications and services, to operate our businesses, to process and record financial and operating data, communicate with our business
partners, analyze mine and mining information, estimate quantities of coal reserves, as well as other activities related to our businesses.
Strategic targets, such as energy-related assets, may be at greater risk of future terrorist or cyber-attacks than other targets in the
United States. Deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third
parties, or cloud-based applications could lead to corruption or loss of our proprietary data and potentially sensitive data, delays
in production or delivery, difficulty in completing and settling transactions, challenges in maintaining our books and records, environmental
damage, communication interruptions, other operational disruptions and third-party liability. Our insurance may not protect us against
such occurrences. Consequently, it is possible that any of these occurrences, or a combination of them, could have a material adverse
effect on our business, financial condition, results of operations and cash flows. Further, as cyber incidents continue to evolve, we
may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate
any vulnerability to cyber incidents. We plan to adopt plans and policies to address precautions with respect to data security and appropriate
responses in case of a reported breach.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
2021 Note with Meta contains restrictive covenants that limit our operations.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2021, we borrowed $15 million, which was subsequently increased to $20 million pursuant to the terms of the 2021 Note (defined
below). The 2021 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our ability to
merge or consolidate with another person or entity, or sell or transfer all or substantially all of our assets, unless we are the surviving
entity or the successor entity assumes all of obligations under the 2021 Note. This restriction may restrict our current and future
operations, particularly our ability to respond to certain changes in our business or industry or take future actions. See the section
titled &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations&#8212;Liquidity and Capital
Resources&#148; for additional information.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2021 Note is secured by a security interest in shares of common stock of Meta held by the Pledgor (defined below) and a 25% working interest
in the Orogrande Project held by Wolfbone. Any default that is not waived could permit Meta, as lender, to exercise rights and remedies
with respect to all of the collateral that is securing the 2021 Note, and/or other rights and remedies under applicable law. Following
the Merger (defined below), Wolfbone became a subsidiary of the Company and the Security Agreement remains in place.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to meet these restrictive covenants or to avoid defaults can be impacted by events beyond our control. The 2021 Note provides
that our breach or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence of an event of default,
Meta as our lender could elect to declare all amounts outstanding under the 2021 Note to be immediately due and payable. If the outstanding
debt under the 2021 Note was to be accelerated, we may not have sufficient cash on hand to repay it, which would have an immediate adverse
effect on our business and operating results. This could potentially cause us to cease operations and result in a complete loss of your
investment in our common stock.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
2022 Note with Mr. McCabe contains restrictive covenants that limit our operations</i></b>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 31, 2023 we had $16.9 million outstanding under the 2022 Note (defined below), which has a maximum principal amount available
for borrowing of $20 million. If we are not in compliance with the covenants of the 2022 Note, or if we are in default under the 2022
Note, it is possible that Mr. McCabe will not offer to extend any additional loans under the 2022 Note, which may affect our business
as a going concern. The 2022 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our
ability to merge or consolidate with another person, or sell or transfer all or substantially all of our assets, unless we are the surviving
entity or the successor entity assumes all obligations under the 2022 Note. This restriction may restrict our current and future operations,
particularly our ability to respond to certain changes in our business or industry or take future actions. See &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of operations&#8212;Liquidity and Capital Resources&#148; for additional
information.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to meet these restrictive covenants or to avoid defaults can be impacted by events beyond our control. The 2022 Note provides
that our breach or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence of an event of default,
Mr. McCabe as our lender could elect to declare all amounts outstanding under the 2022 Note to be immediately due and payable. If the
outstanding debt under the 2022 Note was to be accelerated, we may not have sufficient cash on hand to repay it, which would have an
immediate material adverse effect on our business and operating results. This could potentially cause us to cease operations and result
in a complete loss of your investment in our common stock.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
Loan Agreement with Meta contains restrictive covenants that limit our operations.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2022, we borrowed an aggregate principal amount of $5.0 million pursuant to the terms of the Loan Agreement (defined below), which is
the maximum principal balance available under the Loan Agreement. The Loan Agreement contains various restrictive covenants and other
restrictions, which include, among other things, restrictions on:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 90%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to transfer all or part of our business or property, except for inventory in the ordinary course of business, surplus or
    obsolete equipment, permitted liens, and transfers of cash permitted by the agreement;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to liquidate or dissolve or merge or consolidate with another entity, or acquire another entity;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to incur additional debt beyond certain limits or encumber our assets; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to pay dividends or make investments, other than permitted investments.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
restrictions may restrict our current and future operations, particularly our ability to respond to certain changes in our business or
industry or take future actions. See &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations&#8212;Liquidity
and Capital Resources&#148; for additional information.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
ability to meet these restrictive covenants can be impacted by events beyond our control. The Loan Agreement provides that our breach
or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence and during the continuance of an event of
default, Meta as the lender could elect to (i) declare all outstanding principal and accrued and unpaid interest under the Loan Agreement
immediately due and payable, (ii) terminate any remaining commitment to make loans under the Loan Agreement, and/or (iii)
exercise certain other rights and remedies anticipated under the Loan Agreement. The events of default under the Loan Agreement include,
among other things (subject to grace periods in certain instances), payment defaults, breaches of covenants or representations and warranties,
a change in control or certain material adverse effects as defined in the Loan Agreement, material judgments and attachments, cross defaults
with certain of our other material indebtedness, and bankruptcy and insolvency events with respect to us and our subsidiaries. If the
outstanding debt under the Loan Agreement was to be accelerated, we may not have sufficient cash on hand to repay it, which would have
an immediate adverse effect on our business and operating results. This could potentially cause us to cease operations and result in
a complete loss of your investment in our common stock.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may have been able to receive better terms from unaffiliated third parties than the terms we received in our agreements with Meta.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
negotiated agreements with Meta including the 2021 Note, Loan Agreement, and Distribution Agreement (defined below), while
we were still a subsidiary of Meta. Accordingly, these agreements may not reflect terms that would have resulted from arms-length negotiations
between unaffiliated parties. The terms of the agreements relate to, among other things, loans for working capital, allocations of assets,
liabilities, rights, indemnifications and other obligations between Meta and us. We may have received better terms from third parties
because third parties may have competed with each other to win our business. See &#147;Certain Relationships and Related Party Transactions&#148;
for more information.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Relating to Our Status as a Public Reporting Company</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
are an emerging growth company and a smaller reporting company, subject to less stringent reporting and regulatory requirements of other
publicly reporting companies and this status may have an adverse effect on our ability to attract interest in our common stock.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an &#147;emerging growth company&#148; as defined in the JOBS Act. As long as we remain an emerging growth company,
we may take advantage of certain exemptions from various reporting and regulatory requirements that are applicable to other public reporting
companies that are not emerging growth companies. We cannot predict if investors will find our common stock less attractive if we choose
to rely on these exemptions.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
we are a &#147;smaller reporting company&#148; as defined under the Exchange Act. Smaller reporting companies may take advantage of
certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will
remain a smaller reporting company provided: (1) the market value of our common stock held by non-affiliates is less than $250 million,
calculated annually, as of the last business day of our second fiscal quarter, or (2) our annual revenues are less than $100 million
during such completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million, calculated
annually, as of the last business day of our second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public reporting companies difficult or impossible.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Relating to Newco Common Stock</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>No
trading market for Subscription Rights or Newco common stock is expected to develop.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
will not be any public market for the subscription rights. In addition, at the time of the subscription rights becoming
exercisable for shares of Newco, presently it is anticipated that there will be no public market for the shares of Newco common
stock and such shares will not become DTC eligible for electronic trading to third parties. Further, there is no expectation that a
trading market will develop or be sustained for the Newco common stock. Accordingly, you may have to hold the shares of Newco common
stock indefinitely.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a006_v1"></span>MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a discussion of the material U.S. federal income tax considerations relating to the receipt, sale, exercise, expiration
and cancellation of the subscription rights to U.S. holders (as defined below) and non-U.S. holders (as defined below). This summary
is based upon the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), the regulations promulgated by the U.S. Treasury
Department (&#147;Treasury Regulations&#148;), rulings and other administrative pronouncements issued by the Internal Revenue Service
(&#147;IRS&#148;), and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or
to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain,
a position contrary to any of the tax consequences described below. We have not sought and do not intend to seek an advance ruling from
the IRS regarding any matter discussed herein. The summary is also based upon the assumption the Company and its subsidiaries and affiliated
entities will operate in accordance with their applicable organizational documents or partnership agreements. This summary is for general
information purposes only, does not address all possible tax considerations that may be material to an investor and does not constitute
legal or tax advice. Moreover, this summary does not purport to discuss all aspects of U.S. federal income taxation that may be important
to a particular investor in light of its investment or tax circumstances, or to investors subject to special tax rules, such as:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">financial
                                            institutions;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">insurance
                                            companies;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">broker-dealers;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulated
                                            investment companies and real estate investment trusts;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">partnerships
                                            and trusts;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
                                            who hold our stock on behalf of another person as a nominee;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
                                            who receive our stock through the exercise of employee stock options or otherwise as compensation;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
                                            holding our stock as part of a &#147;straddle,&#148; &#147;hedge,&#148; &#147;conversion
                                            transaction,&#148; &#147;synthetic security&#148; or other integrated investment;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">tax-exempt
                                            organizations;</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">and,
except to the extent discussed below:</span></p>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">foreign
                                            investors.</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
summary assumes that investors hold their NBH common stock as a capital asset, which generally means as property held for investment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this discussion under the heading &#147;Tax Consequences to U.S. Holders,&#148; a U.S. holder is a stockholder that is
for U.S. federal income tax purposes:</span></p>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            citizen or resident of the United States,</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            corporation (including an entity treated as a corporation for U.S. federal income tax purposes)
                                            created or organized in or under the laws of the United States, any of its states, or the
                                            District of Columbia,</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
                                            estate, whose income is subject to U.S. federal income taxation regardless of its source,
                                            or</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            trust if (1) a U.S. court is able to exercise primary supervision over the administration
                                            of such trust and one or more U.S. persons have the authority to control all substantial
                                            decisions of the trust or (2) it has a valid election to be treated as a U.S. person.</span></td></tr></table>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
&#147;non-U.S. holder&#148; is a stockholder that is not a U.S. holder and is not an entity treated as a partnership for U.S. federal
income tax purposes.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a partnership, entity or arrangement treated as a partnership for U.S. federal income tax purposes holds NBH common stock, the U.S. federal
income tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership.
An investor that is a partnership and the partners in such partnership should consult their tax advisors about the U.S. federal income
tax consequences of the receipt, sale, exercise, expiration and cancellation of the subscription rights.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights for U.S. federal income tax purposes
is not entirely clear. The uncertainty is attributable to a variety of factors, including the limited authorities that address such treatment,
the ability of NBH to withdraw or cancel the rights offering if certain conditions are met or are not met, and the possibility that there
will not be a market for the subscription rights. The discussion below assumes that, for U.S. federal income tax purposes, the distribution
of the subscription rights is treated as a distribution of rights to acquire Newco stock occurring on the distribution date and such
rights are property. The discussion below also assumes that if no market develops for the subscription rights, the subscription rights
will nevertheless have an ascertainable fair market value for U.S. federal income tax purposes on the date of distribution, but that
such value may be nominal or may be zero. The tax consequences to a stockholder may differ from the tax consequences discussed below
if the IRS or a court ultimately determines otherwise. To the extent that tax reporting is applicable to NBH, NBH intends to report the
tax consequences in accordance with the tax treatment discussed below.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
ruling on the treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights for U.S. federal income
tax purposes has been or will be sought from the IRS with respect to any of the U.S. federal income tax considerations discussed below,
and no assurance can be given that the IRS will not take a position contrary to the discussion below.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">STOCKHOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS
RELATING TO THE RECEIPT, SALE, EXERCISE, EXPIRATION AND CANCELLATION OF THE SUBSCRIPTION RIGHTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Consequences to U.S. Holders</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Receipt
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. holder that receives a subscription right in respect of a share of NBH common stock should generally have taxable dividend income
equal to the fair market value (if any) of such right on the date of its distribution from NBH to the extent it is made from NBH&#146;s
current or accumulated earnings and profits (as determined under U.S. federal income tax principles). If such fair market value exceeds
NBH&#146;s current and accumulated earnings and profits, such excess generally should be treated first as a tax-free return of capital
to the extent of the U.S. holder&#146;s adjusted tax basis in such share of NBH common stock, and any remaining excess should be treated
as gain from the sale or exchange of such NBH common stock. Although no assurance can be given, it is anticipated that we will not have
current and accumulated earnings and profits through the end of 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. holder is a corporate U.S. holder, dividends paid by NBH to such U.S. holder generally will be eligible for the dividends-received
deduction allowed to domestic corporations in respect of dividends received from other domestic corporations so long as such U.S. holder
satisfies the holding period requirement for the dividends-received deduction.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. holder is a non-corporate U.S. holder, under tax laws currently in effect, dividends generally will be taxed at the preferential
applicable long-term capital gains rate so long as such U.S. holder satisfies the holding period requirement (i.e., more than sixty (60)
days of ownership, without protection from the risk of loss, during the 121-day period that begins sixty (60) days before the ex-dividend
date) and certain other requirements are met. Dividends received by a non-corporate U.S. holder may be subject to a 3.8% Medicare tax
on net investment income.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Sale
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the sale of the subscription rights received in respect of a share of NBH common stock, a U.S. holder generally should recognize capital
gain or loss equal to the difference between the amount realized on such sale and the U.S. holder&#146;s adjusted tax basis in the subscription
rights sold. A U.S. holder&#146;s adjusted tax basis in a subscription right should generally equal its fair market value (if any) on
the date of its&#160;distribution and a U.S. holder&#146;s holding period in a subscription right begins on the date of receipt of such
subscription right. Any such capital gain or loss generally will be long-term capital gain or loss if a U.S. holder&#146;s holding period
for the subscription right so disposed of exceeds one (1) year. Long-term capital gains recognized by non-corporate U.S. holders generally
will be eligible for taxation at reduced rates. The deductibility of capital losses is subject to limitations. Any gain recognized by
a non-corporate U.S. holder may be subject to a 3.8% Medicare tax on net investment income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Exercise
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. holder should generally not recognize any gain or loss upon the exercise of a subscription right. A U.S. holder&#146;s initial
tax basis in each share of Newco common stock acquired upon the exercise of a subscription right should generally equal the sum of (1)&#160;the
U.S. holder&#146;s adjusted tax basis in such right and (2)&#160;the subscription price, if any, paid for such share. The holding period
for Newco common stock received upon exercise of a subscription right will begin on the day of the exercise of such subscription right.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Expiration
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a subscription right expires without being exercised by a U.S. holder, the U.S. holder should generally recognize a capital loss in an
amount equal to such U.S. holder&#146;s adjusted tax basis (if any) in such right. Capital losses are generally available to offset
only capital gain (except, to the extent of up to $3,000 of capital loss per year, in the case of a non-corporate U.S. holder) and therefore
generally cannot be used to offset any dividend income arising from the receipt of a subscription right or other income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cancellation
of the Rights Offering</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no authority that specifically addresses the tax treatment of a U.S. holder that receives, sells or exercises a subscription right
if NBH subsequently cancels the rights offering. NBH and applicable withholding agents are likely to take the position, for information
reporting and backup withholding purposes, that the treatment described above under &#147;Receipt of Subscription Rights&#148; and
below under &#147;Information Reporting and Backup Withholding&#148; continue to apply to such a U.S. holder.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. holder recognizes taxable dividend income upon the receipt of a subscription right, even though NBH subsequently cancels the rights
offering, the U.S. holder should generally have a short-term capital loss upon the cancellation of the subscription right in an amount
equal to such U.S. holder&#146;s adjusted tax basis (if any) in such right.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Consequences to Non-U.S. Holders</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Receipt
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-U.S. holder that receives a subscription right in respect of a share of NBH common stock should generally have taxable dividend income
equal to the fair market value (if any) of such right on the date of its distribution from NBH to the extent it is made from NBH&#146;s
current or accumulated earnings and profits (as determined under U.S. federal income tax principles). If such fair market value exceeds
NBH&#146;s current and accumulated earnings and profits, such excess generally should be treated first as a tax-free return of capital
to the extent of the non-U.S. holder&#146;s tax basis in such share of NBH common stock, and any remaining excess should be treated
as gain from the sale or exchange of such NBH common stock. Although no assurance can be given, it is anticipated that we will not have
current and accumulated earnings and profits through the end of 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
distribution of subscription rights treated as a dividend on NBH common stock generally will be subject to withholding of U.S. federal
income tax at a 30% rate or such lower rate as may be provided by an applicable income tax treaty. To receive the benefit of a reduced
treaty rate, a non-U.S. holder must furnish to the Company or its paying agent a valid IRS Form W-8 (or applicable successor form) certifying
such holder&#146;s qualification for the reduced rate. This certification must be provided to the Company or its paying agent prior
to the payment of dividends and must be updated periodically. If a non-U.S. holder who qualifies for a reduced treaty rate but does not
timely provide the Company or the payment agent with the required certification, such non-U.S. holder may be entitled to a credit against
their U.S. federal income tax liability or a refund of the tax withheld, which the non-U.S. holder may claim by filing the appropriate
claim for refund with the IRS.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
that are treated as &#147;effectively connected&#148; with a trade or business conducted by a non-U.S. holder within the United States
(and, if an applicable income tax treaty so provides, are also attributable to a U.S. permanent establishment of such non-U.S. holder)
are not subject to withholding tax, provided the non-U.S. holder satisfies certain certification and disclosure requirements. Instead,
such dividends, net of specified deductions and credits, are taxed at the same graduated U.S. federal income tax rates applicable to
U.S. persons. To the extent a dividend is effectively connected with a U.S. trade or business, non-corporate non-U.S. holders may be
eligible for taxation at reduced U.S. federal income tax rates applicable to qualified dividend income. Any such effectively connected
dividends received by a non-U.S. holder that is a corporation may, under certain circumstances, be subject to an additional branch profits
tax at a 30% rate or such lower rate as specified by an applicable income tax treaty.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Sale
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the discussions of backup withholding and FATCA withholding below, a non-U.S. holder generally should not be subject to U.S. federal
income tax on any gain recognized on the sale of the subscription rights unless:</span></p>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newco
                                            is or has been a &#147;United States real property holding corporation&#148; for U.S. federal
                                            income tax purposes at any time during the shorter of (1)&#160;the five-year period ending
                                            on the date of such sale and (2)&#160;such non-U.S. holder&#146;s holding period with respect
                                            to the subscription rights, and certain other conditions are met;</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">such
                                            gain is effectively connected with the conduct of a trade or business in the United States
                                            by such non-U.S. holder, in which event such non-U.S. holder generally will be subject to
                                            U.S. federal income tax on such gain in substantially the same manner as a U.S. holder (except
                                            as provided by an applicable tax treaty) and, if it is a corporation, may also be subject
                                            to a branch profits tax at the rate of 30% (or a lower rate if provided by an applicable
                                            tax treaty); or</span></td></tr></table>

<p style="text-align: left; margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">such
                                            non-U.S. holder is an individual who is present in the United States for 183 days or more
                                            in the taxable year of such sale and certain other conditions are met (except as provided
                                            by an applicable treaty).</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Generally,
a corporation is a &#147;United States real property holding corporation&#148; if the fair market value of its United States real property
interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used
or held for use in a trade or business (all as determined for U.S. federal income tax purposes). NBH expects that Newco will become
a United States real property holding corporation. A non-U.S. holder&#146;s adjusted tax basis in a subscription right should generally
equal its fair market value (if any) on the date of its distribution and a non-U.S. holder&#146;s holding period in a subscription right
begins on the date of receipt of such subscription right.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Exercise
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-U.S. holder generally should not recognize any gain or loss upon the exercise of a subscription right. A non-U.S. holder&#146;s
initial tax basis in each share of Newco common stock acquired upon exercise of a subscription right generally should equal the sum of
(1)&#160;the non-U.S. holder&#146;s adjusted tax basis in such right and (2)&#160;the subscription price paid for such share. The holding
period for Newco common stock received upon exercise of a subscription right will begin on the day of the exercise of such subscription
right.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Expiration
of Subscription Rights</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a subscription right expires without being exercised by a non-U.S. holder, the non-U.S. holder should generally recognize a capital loss
in an amount equal to such non-U.S. holder&#146;s adjusted tax basis (if any) in such right. A non-U.S. holder generally cannot deduct
capital losses, except to the extent effectively connected with a trade or business in the United States.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cancellation
of the Rights Offering</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no authority that specifically addresses the tax treatment of a non-U.S. holder that receives, sells or exercises a subscription right
if NBH subsequently cancels the rights offering. NBH and applicable withholding agents are likely to take the position, for information
reporting, backup withholding and withholding tax purposes, that the treatment described above under &#147;Receipt of Subscription Rights&#148;
and below under &#147;Information Reporting and Backup Withholding&#148; continue to apply to such a non-U.S. holder. Such a non-U.S.
holder should consult its tax advisor as to whether to seek a refund of any such backup withholding or withholding tax from the IRS.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a non-U.S. holder has taxable dividend income upon the receipt of a subscription right even though NBH subsequently cancels the rights
offering, the non-U.S. holder should generally have a capital loss upon the cancellation of the subscription right in an amount equal
to such non-U.S. holder&#146;s adjusted tax basis (if any) in such right. A non-U.S. holder generally cannot deduct capital losses,
except to the extent effectively connected with a trade or business in the United States.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Considerations to U.S. Holders in Respect of Ownership and Disposition of Newco Common Stock</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Dividends</i>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
dividends paid by Newco out of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally
will be taxable to a U.S. holder as ordinary dividend income. Corporate U.S. holders should generally be eligible for the dividends received
deduction and non-corporate U.S. holders should generally qualify for reduced rates applicable to qualified dividend income, assuming,
in each case, that a minimum holding period and certain other generally applicable requirements are satisfied. Dividends in excess of
current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. holder&#146;s
basis in Newco common stock and thereafter as capital gain. U.S. holders should consult their own tax advisors with respect to the appropriate
U.S. federal income tax treatment of any dividend received from the Company. Dividends received by a non-corporate U.S. holder may be
subject to a 3.8% Medicare tax on net investment income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Sales
or Other Dispositions of Newco Common Stock</i>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. holder will recognize capital gain or loss on the sale or other disposition of Newco common stock in an amount equal to the difference
between the U.S. holder&#146;s adjusted tax basis in such Newco common stock and the amount realized from the disposition. Any gain
or loss on a sale or other disposition of Newco common stock generally will be long-term capital gain or loss if the holder has held
such Newco common stock for more than one year. Deductions for capital losses are subject to limitations. Any gain recognized by a non-corporate
U.S. holder may be subject to a 3.8% Medicare tax on net investment income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tax
Considerations to Non-U.S. Holders in Respect of Ownership and Disposition of Newco Common Stock</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Dividends</i>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
dividends paid on Newco common stock that are characterized as dividends paid to a non-U.S. holder generally will be subject to withholding
of U.S. federal income tax at a 30% rate or such lower rate as may be provided by an applicable income tax treaty. To receive the benefit
of a reduced treaty rate, a non-U.S. holder must furnish to Newco or its paying agent a valid IRS Form W-8 (or applicable successor form)
certifying such holder&#146;s qualification for the reduced rate. This certification must be provided to Newco or its paying agent prior
to the payment of dividends and must be updated periodically. If a non-U.S. holder who qualifies for a reduced treaty rate but does not
timely provide Newco or the payment agent with the required certification, such non-U.S. holder may be entitled to a credit against their
U.S. federal income tax liability or a refund of the tax withheld, which the non-U.S. holder may claim by filing the appropriate claim
for refund with the IRS.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
that are treated as &#147;effectively connected&#148; with a trade or business conducted by a non-U.S. holder within the United States
(and, if an applicable income tax treaty so provides, are also attributable to a U.S. permanent establishment of such non-U.S. holder)
are not subject to withholding tax, provided the non-U.S. holder satisfies certain certification and disclosure requirements. Instead,
such dividends, net of specified deductions and credits, are taxed at the same graduated U.S. federal income tax rates applicable to
U.S. persons. To the extent a dividend is effectively connected with a U.S. trade or business, non-corporate non-U.S. holders may be
eligible for taxation at reduced U.S. federal income tax rates applicable to qualified dividend income. Any such effectively connected
dividends received by a non-U.S. holder that is a corporation may, under certain circumstances, be subject to an additional branch profits
tax at a 30% rate or such lower rate as specified by an applicable income tax treaty.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Sales
or Other Dispositions of Newco Common Stock</i>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the discussions under &#147;Information Reporting and Backup Withholding&#148; and &#147;FATCA,&#148; below, a non-U.S. holder
will generally not be subject to any U.S. federal income tax or withholding tax on any gain realized upon such holder&#146;s sale or
other disposition of Newco common stock. Gain on the sale of Newco common stock may be subject to U.S. net income tax (and in respect
of corporate non-U.S. holders, branch profits tax) if the gain is effectively connected with a trade or business of the non-U.S. holder
in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base
of the non-U.S. holder within the United States). Additionally, a non-U.S. holder that is an individual who is present in the United
States for 183 days or more in the taxable year of the disposition and meets certain other requirements will be subject to a flat 30%
tax on the amount of gain derived from the sale that, together with certain other U.S. source capital gains realized during such year
exceed certain U.S. source capital losses realized during such year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>FATCA</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Foreign Account Tax Compliance Act, or FATCA, foreign financial institutions (which include most foreign hedge funds, private
equity funds, mutual funds, securitization vehicles and any other investment vehicles) and certain other foreign entities must comply
with registration and information reporting rules with respect to their U.S. account holders and investors or be subject to a withholding
tax on U.S.-source payments made to them (whether received as a beneficial owner or as an intermediary for another party). A foreign
financial institution or other foreign entity that does not comply with the FATCA registration and reporting requirements will generally
be subject to a 30% withholding tax on &#147;withholdable payments.&#148; For this purpose, withholdable payments generally include
U.S.-source payments (including U.S.-source dividends), and (subject to the proposed Treasury Regulations discussed below) the gross
proceeds from a sale of equity or debt instruments of issuers who are considered U.S. issuers under the FATCA rules. The FATCA withholding
tax applies even if the payment would otherwise not be subject to U.S. nonresident withholding tax (e.g., because it is capital gain).
While withholding under FATCA would also have applied to payments of gross proceeds from the sale or other disposition of stock on or
after January 1, 2019, proposed Treasury Regulations which, if finalized in their present form, would eliminate FATCA withholding on
payments of gross proceeds of a disposition of the subscription rights entirely. Taxpayers may generally rely on these proposed Treasury
Regulations until final Treasury Regulations are issued. Foreign financial institutions located in jurisdictions that have an intergovernmental
agreement with the United States governing FATCA may be subject to different rules. We will not pay additional amounts in respect of
amounts withheld. Investors should consult their tax advisors regarding possible implications of FATCA.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 23pt">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Information
Reporting and Backup Withholding</i></b>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; color: Black">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
general, information reporting requirements may apply to dividends, sales proceeds or other amounts paid to U.S. holders and non-U.S.
holders, unless an exemption applies. Backup withholding tax may apply to amounts subject to reporting if the holder fails to provide
an accurate taxpayer identification number or fails to report all interest and dividends required to be shown on its U.S. federal income
tax returns. A U.S. holder or non-U.S. holder can claim a credit against its U.S. federal income tax liability for the amount of any
backup withholding tax and a refund of any overpayment of taxes, provided that all required information is timely provided to the IRS.
U.S. holders and non-U.S. holders should consult their tax advisors as to their qualification for exemption from backup withholding and
the procedure for establishing an exemption.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a007_v1"></span>USE
OF PROCEEDS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Neither
NBH nor Newco will receive any proceeds from the exercise of the subscription rights by any stockholder.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a008_v1"></span>BUSINESS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>General</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the
United States. Our primary focus has been the development of interests in an oil and natural gas project we hold in the Orogrande Basin
in West Texas. In addition, we may consider various strategic options, including partnering with, or the possible sale of any or all
of our assets to, third parties. We operate our business through our wholly owned subsidiaries, Torchlight Energy, Inc., Hudspeth Oil
Corporation, Torchlight Hazel, LLC, Hudspeth Operating, LLC and Wolfbone Investments, LLC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Presently,
our primary interests include the oil and natural gas leases for properties of the Orogrande Basin in Hudspeth County, Texas (the &#147;Orogrande
Project&#148;). In addition, we have minor interests in the Eastern edge of the Midland Basin in West Texas (the &#147;Hazel Project&#148;)
and two minor well interests in Oklahoma (the &#147;Oklahoma Properties&#148;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rich
Masterson, our consulting geologist, originated our Orogrande Project, as discussed below, based on his tenure as a geologist since 1974.
He is credited with originating the Wolfbone shale play in the Southern Delaware Basin of West Texas and has prepared prospects totaling
over 150,000 acres that have been leased, drilled and are currently being developed by Devon Energy Corp., Occidental Petroleum Corporation
and Noble Energy, among others.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has drilled 14 test wells in the Orogrande Project in the basin in order to stay in compliance with the continuous drilling clause
under the University Lands Development Unit Agreement (the &#147;DDU Agreement&#148;), as well as, to test for potential
shallow pay zones and deeper pay zones that may be present on structural plays. Development of the wells continued through March 31,
2023 to further capture and document the scientific base in support of demonstrating the production potential of the Orogrande Project
properties.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
satisfied the 2021 and 2022 drilling obligations in the Orogrande Project and, in satisfying our 2021 and 2022 drilling obligations,
we identified new potential pay zones not yet discovered in the Orogrande Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the Orogrande Project, we also have an interest in our Hazel Project in Tom Green County and Sterling County, Texas. In August
2020, our subsidiaries entered into the Option Agreement with MHP (the &#147;Option Agreement&#148;), under which, in exchange for
satisfying certain drilling obligations, MHP had the option to purchase the entire Hazel Project. The option to purchase the entire acreage
block was extended to September 30, 2021 and at such time MHP determined not to exercise the purchase option; however, MHP is entitled
to receive, as its sole recourse for the recoupment of drilling costs, the revenue from production of the well attributable to our interest
until such time as it has recovered its reasonable costs and expenses for drilling, completing and operating the well. Operations continue
under the Option Agreement until such time as the revenue from the project equates to the dollars spent by, and shall be reimbursed to,
MHP. At such time, any acreage held by production and all wells will revert back to our subsidiary, Torchlight Hazel, LLC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
principal executive offices are located at 6300 Ridglea Place, Suite 950, Fort Worth, Texas 76116. The telephone number of our principal
executive offices is (817) 438-1937.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Key
Business Attributes</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Experienced
People.</i> We have five full-time employees and we expect to engage consultants for various roles as needed including high quality exploration
and technical partners. We plan to build on the expertise and experiences of our management team and seek guidance from outside advisors
as well as our Board.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Project
Focus. </i>We are focusing primarily on exploitation projects. We may pursue high risk exploration prospects which may appear less favored
than low risk exploration. We will, however, consider these high risk- high reward exploration prospects in connection with exploitation
opportunities in a project that would reduce the overall project economic risk. We will consider such high risk-high reward prospects
on their individual merits.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Lower
Cost Structure.</i> We will attempt to maintain the lowest possible cost structure, enabling the greatest margins and providing opportunities
for investment that would not be feasible for higher cost competitors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Limit
Capital Risks.</i> Limited capital exposure is planned initially to add value to a project and determine its economic viability. Management
has experience in successfully managing risks of projects, finance, and value.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Business
Processes</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe there are three principal business processes that we must follow to enable our operations to be profitable. Each major business
process offers the opportunity for a distinct partner or alliance as we grow. These processes are:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment
Evaluation and Review;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operations
and Field Activities; and</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Administrative
and Finance Management.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Investment
Evaluation and Review. </i>This process is the key ingredient to our success. Recognition of quality investment opportunities is the
fuel that drives our engine. Broadly, this process includes the following activities: prospect acquisition, regional and local geological
and geophysical evaluations, data processing, economic analysis, lease acquisition and negotiations, permitting, and field supervision.
We expect these evaluation processes to be managed by our management team. Expert or specific technical support will be outsourced as
needed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operations
and Field Activities.</i> This process begins following management approval of an investment. Well site supervision, construction, drilling,
logging, product marketing, and transportation are examples of some of these activities. We prefer to be the operator where possible.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Administrative
and Finance Management.</i> This process coordinates our initial structuring and capitalization, general operations and accounting, reporting,
audit, banking and cash management, regulatory agencies reporting and interaction, timely and accurate payment of royalties, taxes, leases
rentals, vendor accounts and performance management that includes budgeting and maintenance of financial controls, and interface with
legal counsel and tax and other financial and business advisors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Current
Projects</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 31, 2022, we had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel
Project in Sterling, Tom Green, and Irion Counties, Texas and the Oklahoma Properties. See the description under &#147;Current Projects&#148;
below under Note 4, &#147;Oil &amp; Natural Gas Properties,&#148; of the financial statements included with this prospectus for information
and disclosure regarding these projects, which description is incorporated herein by reference.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
Properties</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
principal executive office is located at 6300 Ridglea Place, Suite 950, Fort Worth, Texas 76116. We currently sublease this office space
and believe that the condition and size of our offices are adequate for our current needs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Orogrande Project consists of unevaluated and undeveloped properties in progress of development for future production.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">516</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">645</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">516</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold">Oklahoma&#8212;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">640</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,285</td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">708</td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">134,000</td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
to support our oil and natural gas properties during the years ended December 31, 2022 and 2021 were $5.8 million ($3.8 million for the
predecessor period plus $2.0 million for the successor period) and $14.8 million, respectively.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="white-space: nowrap; font-weight: bold; text-align: center">Fiscal Year Ended</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="white-space: nowrap; font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Property acquisition costs</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="width: 54%; text-align: justify">Development costs</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; text-align: right">5,835,880</td><td style="white-space: nowrap; width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; text-align: right">14,805,511</td><td style="white-space: nowrap; width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1pt">Exploratory costs</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 2.5pt">Totals</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,835,880</td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">14,805,511</td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
development costs presented above exclude interest capitalized into the full cost pool. For the year ended December 31, 2022, we capitalized
$1,363,538 ($1,289,328 for the predecessor period plus $74,210 for the successor period) of interest on unevaluated properties. Capitalized
interest for the year ended December 31, 2021 was $141,048.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
development costs for 2021 include work in the Orogrande and Hazel Projects in West Texas and for 2022 the development costs include
work solely in the Orogrande Project. We made progress during 2022 to develop proved producing reserves in the Orogrande Project in the
Permian Basin in West Texas, which has not yet resulted in hydrocarbon production. We incurred costs of $5.8 million in relation to certain
drilling activity carried out to remain in compliance with all aspects of our lease obligations and to satisfy the continuous drilling
clause under the agreement with University Lands, whereby we are obligated to satisfy certain minimum yearly requirements that may be
exceeded if desired. No development costs were incurred in 2021 or 2022 for the Oklahoma Properties. During the fiscal years ended December
31, 2021 and 2022, development and exploratory net wells were drilled as set forth in the table below.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Drilling
Activity Summary</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents
drilling re-entry to explore more of the formation.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2022, we completed pre-drilling and development activity for our 2022 drilling program, including surveying, permitting, road and pad
site work and initial drilling at an aggregate cost of $3,583,235 and satisfied our 2022 drilling obligations as of March 31, 2023. We
will soon commence drilling activities for the 2023 drilling program and have until December 31, 2023 to fully satisfy our obligations
for the 2023 fiscal year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">3.00</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
the principal goal of gathering scientific data from a strategy of drilling test wells, all wells were drilled with the intent of being
completed and productive for hydrocarbons. Two horizontal wells were successfully completed for hydrocarbons through the 2020 drilling
program, however as of December 31, 2022 both wells remain shut-in waiting for hook-up to a gas pipeline. The various wells drilled on
the Orogrande Project through 2022 confirmed that there are at least five potential distinct reservoirs under our acreage. While these
wells may have potential to produce hydrocarbons to sell commercially in the future, due to capital constraints we have no immediate
plans to deploy the capital necessary to sell production from these wells to third parties. Instead, we plan to use the results from
these wells to determine our drilling plans for future wells, including well locations, target depths and designated acreage, in the
Orogrande Project. The remaining wells can be used for future development for various applications such re-entering the wellbores for
horizontal unconventional development, fresh water supply, or salt water disposal and/or plugged and abandoned.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Production,
Price, and Production Cost History</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Oklahoma
Properties</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, we produced and sold 85 Bbls net to our interest at an average sale price of $55.00 per Bbl.
We produced and sold 3,586 Mcf of gas net to our interest at an average sales price of $3.17 per Mcf. Our average production cost including
lease operating expenses and direct production taxes was $18.54 per BOE. Our depreciation, depletion, and amortization expense was $-0-
per BOE.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, we produced and sold 183 Bbls net to our interest (168 for the predecessor period plus 15 for the successor
period) at an average sale price of $98.75 per Bbl. We produced and sold 3,031 Mcf of natural gas net to our interest (2,789 for the
predecessor period plus 242 for the successor period) at an average sales price of $7.51 per Mcf. Our average production cost including
lease operating expenses and direct production taxes was $42.68 per BOE. Our depreciation, depletion, and amortization expense was $-0-
per BOE.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Hazel
Project</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, 23,422 Bbls net to our interest were sold at an average sale price of approximately $60.00 per
Bbl, although we received none of this revenue because all of it, after deducting expenses to produce the oil, was either received by
MHP directly during the time that the Option Agreement was in effect or credited towards the recoupment of drilling costs incurred by
MHP. We produced and sold -0- Mcf of natural gas net to our interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">$</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">$</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Net Proved
    Nonproducing</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Total
    Net Proved</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Standardized
    Measure of Future Net Cash Flows Related to Proved Oil and Gas Properties</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Probable
    Undeveloped</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  </table>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, 22,511 Bbls net to our interest (21,647 for the predecessor period plus 864 for the successor
period) were sold at an average sale price of approximately $55.98 per Bbl, although we received none of this revenue because all of
it, after deducting expenses to produce the oil, was either received by MHP directly during the time that the Option Agreement was in
effect or credited towards the recoupment of drilling costs incurred by MHP. We produced and sold -0- Mcf of natural gas net to our interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="10" style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">December 31, 2022</span></td><td style="font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="6" style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">December 31, 2022</span></td><td style="font-weight: bold"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="10" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Reserves</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="6" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Future
    Net Revenue (M$)</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Present Value</span></td><td style="font-weight: bold"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: left"><span style="font-size: 10pt">Category</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Oil
    (Bbls)</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Gas
    (Mcf)</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Total
    (BOE)</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Total</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-size: 10pt">Discounted
    at 10%</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 35%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Net Proved Producing</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">$</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-size: 10pt">$</span></td><td style="width: 8%; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Net Proved
    Nonproducing</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Total
    Net Proved</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Standardized
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Probable
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
net producing reserves from 2021 and 2022 were -0- BOE related to the Producing Hazel Wells due to the obligation to pass revenue through
to MHP under the terms of the Option Agreement effective during both periods. Since we have no reserve value as of December 31, 2021
and December 31, 2022, Standardized Measure is not presented.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to the inherent uncertainties and the limited nature of reservoir data, both proved and probable reserves are subject to change as additional
information becomes available. The estimates of reserves, future cash flows, and present value are based on various assumptions, including
those prescribed by the SEC, and are inherently imprecise.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the three months ended March 31, 2023, we had production revenue of $10,924 compared to $-0- of production revenue for the prior year
period. The change in revenue was primarily due to revenue from production sold from the Oklahoma wells. Our cost of revenue, consisting
of lease operating expenses and production taxes, was $16,602 for the three months ended March 31, 2023 compared to $10,621 for the prior
year period. Refer to the table of production and revenue included below for changes in revenue:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 8pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Oil</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Gas</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Production</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Production</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Oil</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Gas</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Total</span></td><td style="color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Property</span></td><td style="color: Black; font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Quarter</span></td><td style="color: Black; font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">(Bbls)</span></td><td style="padding-bottom: 1pt; color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">(Mcf)</span></td><td style="padding-bottom: 1pt; color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Revenue</span></td><td style="padding-bottom: 1pt; color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Revenue</span></td><td style="padding-bottom: 1pt; color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; font-weight: bold; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; color: Black; font-weight: bold; text-align: center"><span style="font-size: 10pt">Revenue</span></td><td style="padding-bottom: 1pt; color: Black; font-weight: bold"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 24%; color: Black; text-align: justify"><span style="font-size: 10pt">Oklahoma</span></td><td style="width: 3%; color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 8%; color: Black; text-align: center"><span style="font-size: 10pt">Q1 - 2022</span></td><td style="width: 3%; color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 8%; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%; color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 8%; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%; color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="width: 8%; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%; color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="width: 8%; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="width: 3%; color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="width: 8%; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: justify; padding-bottom: 1pt"><span style="font-size: 10pt">Hazel (TX)</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center; padding-bottom: 1pt"><span style="font-size: 10pt">Q1 - 2022</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; font-weight: bold; text-align: justify; padding-bottom: 2.5pt"><span style="font-size: 10pt">Total Q1-2022</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: justify"><span style="font-size: 10pt">Oklahoma</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center"><span style="font-size: 10pt">Q2 - 2022</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">97</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">1,267</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">9,688</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">7,716</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">17,404</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: justify; padding-bottom: 1pt"><span style="font-size: 10pt">Hazel (TX)</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center; padding-bottom: 1pt"><span style="font-size: 10pt">Q2 - 2022</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; font-weight: bold; text-align: justify; padding-bottom: 2.5pt"><span style="font-size: 10pt">Total Q2-2022</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">97</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">1,267</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">9,688</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">7,716</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">17,404</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: justify"><span style="font-size: 10pt">Oklahoma</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center"><span style="font-size: 10pt">Q3 - 2022</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">43</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">887</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">4,635</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">8,329</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">12,964</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: justify; padding-bottom: 1pt"><span style="font-size: 10pt">Hazel (TX)</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center; padding-bottom: 1pt"><span style="font-size: 10pt">Q3 - 2022</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; font-weight: bold; text-align: justify; padding-bottom: 2.5pt"><span style="font-size: 10pt">Total Q3-2022</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">43</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">887</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">4,635</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">8,329</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; color: Black; text-align: right"><span style="font-size: 10pt">12,964</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: justify"><span style="font-size: 10pt">Oklahoma</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center"><span style="font-size: 10pt">Q4 - 2022</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: justify"><span style="font-size: 10pt">&#160;&#160;&#160;Predecessor</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">28</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">635</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">2,473</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">5,432</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">7,905</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: justify"><span style="font-size: 10pt">&#160;&#160;&#160;Successor</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">15</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">242</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">1,276</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">1,285</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">2,561</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: justify; padding-bottom: 1pt"><span style="font-size: 10pt">Hazel (TX)</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center; padding-bottom: 1pt"><span style="font-size: 10pt">Q4 - 2022</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; font-weight: bold; text-align: justify; padding-bottom: 1pt"><span style="font-size: 10pt">Total Q4-2022</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">43</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">877</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">3,749</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">6,717</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">10,466</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; font-weight: bold; text-align: justify; padding-bottom: 1pt"><span style="font-size: 10pt">Total 2022</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">183</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">3,031</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">18,072</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">22,762</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">40,834</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; font-weight: bold; text-align: justify"><span style="font-size: 10pt">Average Commodity Price</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">98.75</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">7.51</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: justify"><span style="font-size: 10pt">Oklahoma</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center"><span style="font-size: 10pt">Q1 - 2023</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">107</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">748</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">8,141</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">2,783</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: left"><span style="font-size: 10pt">$</span></td><td style="color: Black; text-align: right"><span style="font-size: 10pt">10,924</span></td><td style="white-space: nowrap; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: justify; padding-bottom: 1pt"><span style="font-size: 10pt">Hazel (TX)</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="color: Black; text-align: center; padding-bottom: 1pt"><span style="font-size: 10pt">Q1 - 2023</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">0</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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    <td style="border-bottom: Black 1pt solid; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; color: Black; text-align: right"><span style="font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; color: Black; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="color: Black; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  </table>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Industry
and Business Environment</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are experiencing a time of fluctuating, but higher oil prices caused by higher demand, lower U.S. supply, turmoil on the world stage
and OPEC&#146;s policies on production. Unfortunately, this is the cyclical nature of the oil and natural gas industry. We experience
highs and lows that seem to come in cycles. Fortunately, there exists plenty of demand for US onshore oil and natural gas. We believe
advances in technology drive the US market and we feel this will drive the development costs down on our exploration and drilling programs
while maintaining favorable economics.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Competition</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
oil and natural gas industry is intensely competitive, and we will compete with numerous other companies engaged in the exploration and
production of oil and natural gas. Some of these companies have substantially greater resources than we have. Not only do they explore
for and produce oil and natural gas, but also many carry on midstream and refining operations and market petroleum and other products
on a regional, national, or worldwide basis. The operations of other companies may be able to pay more for exploratory prospects and
productive oil and natural gas properties. They may also have more resources to define, evaluate, bid for, and purchase a greater number
of properties and prospects than our financial or human resources permit. Our larger or integrated competitors may have the resources
to be better able to absorb the burden of current and future federal, state, and local laws and regulations more easily than we can,
which would adversely affect our competitive position. Our ability to locate reserves and acquire interests in properties in the future
will be dependent upon our ability and resources to evaluate and select suitable properties and consummate transactions in this highly
competitive environment. In addition, we may be at a disadvantage in producing oil and natural gas properties and bidding for exploratory
prospects because we have fewer financial and human resources than other companies in our industry. Should a larger and better financed
company decide to directly compete with us, and be successful in its efforts, our business could be adversely affected.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Marketing
and Customers</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for oil and natural gas that we will produce depends on factors beyond our control, including the extent of domestic production
and imports of oil and natural gas, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for
oil and natural gas, the marketing of competitive fuels, and the effects of state and federal regulation. The oil and natural gas industry
also competes with other industries in supplying the energy and fuel requirements of industrial, commercial, and individual consumers.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
oil production is expected to be sold at prices tied to the spot oil markets. Our natural gas production is expected to be sold under
short-term contracts and priced based on first of the month index prices or on daily spot market prices. We will rely on our operating
partners to market and sell our production.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Governmental
Regulation and Environmental Matters</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
operations are subject to various rules, regulations, and limitations impacting the oil and natural gas exploration and production industry
as a whole.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Regulation
of Oil and Natural Gas Production</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
oil and natural gas exploration, production, and related operations, when developed, will be subject to extensive rules and regulations
promulgated by federal, state, tribal, and local authorities and agencies. Certain states may also have statutes or regulations addressing
conservation matters, including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum
rates of production from wells, and the regulation of spacing, plugging, and abandonment of such wells. We cover all costs associated
with the related insurance coverage for such environmental regulatory compliance. Failure to comply with any such rules and regulations
can result in substantial penalties. The regulatory burden on the oil and natural gas industry will most likely increase our cost of
doing business and may affect our profitability. Although we believe we are currently in substantial compliance with all applicable laws
and regulations, because such rules and regulations are frequently amended or reinterpreted, we are unable to predict the future cost
or impact of complying with such laws. Significant expenditures may be required to comply with governmental laws and regulations and
may have a material adverse effect on our financial condition and results of operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Environmental
Matters</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
operations and properties are and will be subject to extensive and changing federal, state, and local laws and regulations relating to
environmental protection, including the generation, storage, handling, emission, transportation, and discharge of materials into the
environment, and relating to safety and health. In the future, environmental legislation and regulation may trend toward stricter standards.
These laws and regulations may, for example:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">require
the acquisition of a permit or other authorization before construction or drilling commences and for certain other activities;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">limit
or prohibit construction, drilling, and other activities on certain lands lying within wilderness and other protected areas;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">impose
substantial liabilities for pollution resulting from operations; or</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">restrict
certain areas from fracking and other stimulation techniques.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
permits required for our operations may be subject to revocation, modification, and renewal by issuing authorities. Governmental authorities
have the power to enforce their regulations, and violations are subject to fines or injunctions, or both. In the opinion of management,
we are and will be in substantial compliance with current applicable environmental laws and regulations and have no material commitments
for capital expenditures to comply with existing environmental requirements. Nevertheless, changes in existing environmental laws and
regulations or in interpretations thereof could have a significant impact on our company, as well as the oil and natural gas industry
in general.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CERCLA
and comparable state statutes impose strict, joint, and several liability on owners and operators of sites and on persons who disposed
of or arranged for the disposal of &#147;hazardous substances&#148; found at such sites. It is not uncommon for the neighboring landowners
and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into
the environment. RCRA and comparable state statutes govern the disposal of &#147;solid waste&#148; and &#147;hazardous waste&#148;
and authorize the imposition of substantial fines and penalties for noncompliance. Although CERCLA currently excludes petroleum from
its definition of &#147;hazardous substance,&#148; state laws affecting our operations may impose clean-up liability relating to petroleum
and petroleum related products. In addition, although RCRA classifies certain oil field wastes as &#147;non-hazardous,&#148; such exploration
and production wastes could be reclassified as hazardous wastes thereby making such wastes subject to more stringent handling and disposal
requirements.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Endangered Species Act (&#147;ESA&#148;) seeks to ensure that activities do not jeopardize endangered or threatened animal, fish, and
plant species, nor destroy or modify the critical habitat of such species. Under the ESA, exploration and production operations, as well
as actions by federal agencies, may not significantly impair or jeopardize protected species or habitat. The ESA provides for criminal
and civil penalties for violations. Other statutes that provide protection to animal and plant species and that may apply to our operations
include, but are not necessarily limited to, the Fish and Wildlife Coordination Act, the Fishery Conservation and Management Act, the
Migratory Bird Treaty Act and the National Historic Preservation Act. Although we believe that our operations are and will be in substantial
compliance with such statutes, any change in these statutes or any reclassification of a species as endangered could subject us to significant
expenses to modify our operations or could force us to discontinue certain operations altogether.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hydraulic
fracturing is regulated by state and federal environmental and oil and gas regulatory authorities, including specifically the requirement
to disclose certain information related to hydraulic fracturing operations. Operators must follow applicable legal requirements for groundwater
protection and are subject to supervision by state and federal regulators (including the BLM on federal acreage). Furthermore, well construction
practices require the installation of multiple layers of protective steel casing surrounded by cement that are specifically designed
and installed to protect freshwater aquifers by preventing the migration of fracturing fluids into aquifers. Regulatory proposals in
some states and local communities have been initiated to require or make more stringent the permitting and compliance requirements for
hydraulic fracturing operations. Federal and state agencies have continued to assess the impacts of hydraulic fracturing, which could
spur further action toward federal and/or state legislation and regulation of hydraulic fracturing activities. In addition, in light
of concerns about seismic activity being triggered by the injection of produced waters into underground wells and hydraulic fracturing,
certain regulators are also considering additional requirements related to seismic safety for hydraulic fracturing activities. Further
restrictions on hydraulic fracturing could make it prohibitive to conduct our operations, and also reduce the amount of oil and natural
gas that we or our operators are ultimately able to produce from our properties.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Climate
Change</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Significant
studies and research have been devoted to climate change and global warming, and climate change has developed into a major political
issue in the United States and globally. Certain research suggests that greenhouse gas emissions contribute to climate change and pose
a threat to the environment. Recent scientific research and political debate has focused in part on carbon dioxide and methane incidental
to oil and natural gas exploration and production. Many states and the federal government have enacted legislation directed at controlling
greenhouse gas emissions, and future legislation and regulation could impose additional restrictions or requirements in connection with
our drilling and production activities and favor use of alternative energy sources, which could affect operating costs and demand for
oil products. As such, our business could be materially adversely affected by domestic and international legislation targeted at controlling
climate change.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal
Proceedings</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 30, 2020, the Company&#146;s wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
(&#147;Cordax&#148;). The suit, Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies, was
filed in the 189th Judicial District Court of Harris County, Texas. The suit seeks the recovery of approximately $1.4 million in costs
incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located in the Orogrande
Field. Wolfbone is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral lien in the amount of $104,500 against
the Orogrande Field and has sued the operator and counterclaimed against Hudspeth for breach of contract, seeking the same amount as
the lien. Meta, on our behalf as our parent at the time, determined to add the manufacturer of one of the tool components that it contends
was one of the causes of the tool failure. It was later disclosed that Cordax is the subsidiary of a Canadian parent company, who has
also been added to the case. Cordax&#146;s current Chairman of the Board filed a special appearance after being served with a citation,
alleging that he was a Canadian citizen with no meaningful ties to Texas. After discovery was conducted on this issue, a nonsuit without
prejudice for this defendant was filed, dismissing him from the case. The remaining parties attended mediation on June 15, 2022, that
was unsuccessful in resolving the case. Discovery is ongoing. The Company has presented several of its witnesses for deposition and is
preparing to depose Cordax&#146;s key fact witnesses. The case is set for trial in October 2023.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in
the amount of $104,500.01 and recover related attorney&#146;s fees. The foreclosure action, Datalog LWT Inc. d/b/a Cordax Evaluation
Technologies v. Torchlight Energy Resources, Inc., was filed in the 205th Judicial District Court of Hudspeth County, Texas. We are contesting
the lien in good faith and filed a Plea in Abatement on May 10, 2021, seeking a stay in the Hudspeth County lien foreclosure case pending
final disposition of the related case currently pending in Harris County, Texas. We are required to indemnify Meta in connection with
this matter pursuant to the terms of the Distribution Agreement between us and Meta in connection to the Spin-Off (the &#147;Distribution
Agreement&#148;).</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a009_v1"></span>MANAGEMENT&#146;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited
and unaudited financial statements and related notes that are included elsewhere in this report. Some of the information contained in
this discussion and analysis constitutes forward-looking statements that involve risks and uncertainties. Actual results could differ
materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include,
but are not limited to, those discussed below and elsewhere in this report, particularly under the section titled &#147;Cautionary Statement
Concerning Forward-Looking Statements.&#148;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Overview</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
consolidated financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements
and accounting records of Meta. Our consolidated financial statements reflect our financial position, results of operations and cash
flows as we were historically managed, in conformity with GAAP. Our financial statements include certain assets and liabilities that
have historically been held at the Meta corporate level but are specifically identifiable or otherwise attributable to us.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
intercompany transactions between us and Meta have been included in our financial statements. The intercompany transactions are reflected
in our consolidated statements of cash flow as a financing activity and in our consolidated balance sheets as &#147;Notes payable &#8211;
Meta&#148;.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
historical costs and expenses reflected in our financial statements include an allocation for certain corporate shared service functions
historically provided by Meta including executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement,
information technology and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable,
with the remainder allocated on a pro rata basis based on sales, headcount, tangible assets or other measures considered to be a reasonable
reflection of the historical utilization levels of these services.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management believes the assumptions underlying our financial statements, including the assumptions regarding the allocation of general
corporate expenses from Meta are reasonable. Nevertheless, our financial statements may not include all of the actual expenses that would
have been incurred had we operated as a stand-alone company during the periods presented and may not reflect what our actual results
of operations, financial position and cash flows would have been if we had operated as a stand-alone company during the periods presented.
Actual costs that would have been incurred if we had operated as a stand-alone company would depend on multiple factors, including organizational
structure and strategic decisions made in various areas, including information technology and infrastructure. We now perform these functions
using our own resources and purchased services.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
period December 15, 2022 through December 31, 2022 is referred to herein as the &#147;successor period&#148; and the period from January
1, 2022 through December 14, 2022 is referred to herein as the &#147;predecessor period&#148;. The predecessor period is reflective
of the Company while a subsidiary of our former parent Meta. The successor period is reflective of the Company after the Spin-Off as
an independent public reporting company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 21, 2022, we entered into that certain Agreement and Plan of Merger (the &#147;Merger Agreement&#148;) with Hudspeth, Wolfbone,
MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such leases, pooling
and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in the Orogrande Project were
transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations
(as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance
of 56,297,638 shares of our common stock to Mr. McCabe (such series of transactions collectively, the &#147;Merger&#148;). On April
25, 2023, the Merger was completed in accordance with the Texas Business Organizations Code, whereby (a) the Company formed
NBH MergeCo, LLC with the State of Texas (&#147;MergeCo&#148;) in order to cause Hudspeth to assign all of its rights under the
Merger Agreement to MergeCo and MergeCo assumed Hudspeth&#146;s obligations under the Merger Agreement, (b) MergeCo, Wolfbone
and MPC merged with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone became a direct and wholly-owned subsidiary
of the Company. The closing of the transactions contemplated by the Merger Agreement occurred on May 11, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note. The Company is entitled to request advances
under the 2022 Note in a minimum principal amount of $100,000 each. Mr. McCabe is the largest shareholder of our common stock. As such,
the Merger and 2022 Note constitute related party transactions which have been duly approved by our Board and Audit Committee.</span></p>



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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
met our drilling obligations under the DDU Agreement to drill five new wells in the Orogrande Project in advance of the March 31, 2023
deadline under University Lands lease requirement. The data collected from these five wells, in addition to the five wells drilled in
2021, confirmed that there are at least five potential distinct reservoirs under our acreage. Also, our operations team deployed a new
mist drilling solution which increased hole stability, which we believe will result in meaningful cost savings for additional wells drilled
in the Orogrande Project. While these wells may have potential to produce hydrocarbons to sell commercially in the future, we have no
immediate plans to deploy the additional capital necessary to sell production from these wells to third parties. Instead, we plan to
use the results from these wells to determine our drilling plans for future wells, including reservoir locations, target depths and designated
acreage, in the Orogrande Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 31, 2023, we entered into an amendment to the 2021 Note and an amendment to Loan Agreement in order to extend the maturity date
of each of the 2021 Note and the Loan Agreement respectively from March 31, 2023 to October 3, 2023. Such amendments also
removed the provisions allowing for extensions of the maturity date of each of the 2021 Note and the Loan Agreement in the event
the Company raised $30 million or more in capital through debt or equity or a combination thereof by March 31, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 11, 2023, the Company and its wholly owned subsidiary Hudspeth, entered into a contribution and exchange agreement with each of the
prior working interest owners in the Orogrande Project named in the table below (each an &#147;Orogrande Owner&#148; and collectively,
the &#147;Orogrande Owners&#148;), pursuant to which the Company issued to the Orogrande Owners the number of shares of the Company&#146;s
common stock set forth opposite such Orogrande Owner&#146;s name below in exchange for and in order to acquire such Orogrande Owner&#146;s
rights to working interest in the Orogrande Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Shares of Common Stock</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="3" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Working
    Interest Contribution</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="width: 30%; text-align: justify">Dingus Investments, Inc.</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; text-align: right">7,050,382</td><td style="white-space: nowrap; width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; text-align: right">2.8334</td><td style="white-space: nowrap; width: 1%; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
    <td style="text-align: justify">Pandora Energy, LP</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,220,779</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2.5000</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify">Kennedy Minerals, Ltd</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,220,779</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2.5000</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
    <td style="text-align: justify">The de Compiegne Property Company No. 20, Ltd</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,220,779</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2.5000</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify">Loma Hombre Energy, LLC</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">622,078</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">0.2500</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: white">
    <td style="text-align: justify; padding-bottom: 1pt">Sero Capital, LLC</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">725,840</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">0.2917</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; padding-left: 10pt">TOTAL</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">27,060,637</td><td style="white-space: nowrap; padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">10.8751</td><td style="white-space: nowrap; padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Income
Taxes</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Judgment
is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. In the ordinary
course of business, tax issues may arise where the ultimate outcome is uncertain. Additionally, our tax returns are subject to audit
by various tax authorities. Consequently, changes in our estimates for contingent tax liabilities may materially impact our results of
operations or financial position.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Results
of Operations</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Historical
Results for the Years Ended December 31, 2022 (for the Predecessor Period January 1, 2022 through December 14, 2022, and for the Successor
Period December 15, 2022 through December 31, 2022) and 2021</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the predecessor period, we had a net loss of $7,938,335 and for the successor period, we had a net loss of $910,538 compared to a net
loss of $8,238,808 for the year ended December 31, 2021. The increase in net loss is primarily due to increased general and administrative
expenses and interest expenses for the year ended December 31, 2022, offset by a loss on sale of oil and natural gas property for the
year ended December 31, 2021. At December 31, 2022, we had current assets of $959,118 and total assets of $80,735,224. As of December
31, 2022, we had current liabilities of $30,036,709. Stockholders&#146; equity was $50,541,649 at December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenue
and Gross Profit</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="14" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Year Ended December 31,</td><td style="padding-bottom: 1pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Production
Revenues and Cost of Revenue</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2022, we had production revenue of $40,834 ($38,273 for the predecessor period plus $2,561 for the successor
period) compared to $15,904 of production revenue for the year ended December 31, 2021. The change in revenue was primarily due to the
increase in oil and natural gas production from 683 BOE for the 2021 period to 688 BOE for the 2022 period, from the Oklahoma Properties,
an increase in the average price of oil from $55.01 in 2021 to $98.75 in 2022 and an increase in the average price of natural gas from
$3.13 in 2021 to $7.51 in 2022. Our cost of revenue, consisting of lease operating expenses and production taxes, was $77,298 for the
year ended December 31, 2022 compared with $76,331 for the year ended December 31, 2021. For each of the years ended December 31, 2021
and 2022, production and revenue are detailed as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    Q1-2021</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">28</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">711</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,166</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,305</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,471</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oklahoma</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q2
        &#8211; 2021</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">28</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,212</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,692</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,814</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,506</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hazel
    (TX)</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q2
        &#8211; 2021</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    Q2-2021</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">28</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,212</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,692</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,814</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,506</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-style: normal; font-weight: normal; text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oklahoma</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q3
        &#8211; 2021</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">29</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">441</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,818</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,146</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,964</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-style: normal; font-weight: normal; text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hazel
    (TX)</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q3
        &#8211; 2021</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
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    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,146</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,964</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-style: normal; font-weight: normal; text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oklahoma</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q4
        &#8211; 2021</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,222</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6,963</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6,963</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-style: normal; font-weight: normal; text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hazel
    (TX)</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q4
        &#8211; 2021</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    Q4-2021</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6,963</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6,963</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    2021</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">85</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,586</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4,676</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">11,228</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15,904</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Average
    Commodity Price</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">55.01</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.13</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  </table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oil</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gas</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Production</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Production</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oil</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gas</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td style="font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Quarter</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Bbls)</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Mcf)</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="font-weight: bold; padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue</span></td><td style="padding-bottom: 1pt; font-weight: bold"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 28%; text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oklahoma</span></td><td style="width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 8%; text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q1
        &#8211; 2022</span></td><td style="width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 8%; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 8%; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="width: 8%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="width: 8%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="width: 8%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; width: 1%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hazel
    (TX)</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q1
        &#8211; 2022</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    Q1-2022</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oklahoma</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q2
        &#8211; 2022</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">97</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,267</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9,688</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,716</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">17,404</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hazel
    (TX)</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q2
        &#8211; 2022</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    Q2-2022</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">97</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,267</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9,688</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,716</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">17,404</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-style: normal; font-weight: normal; text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oklahoma</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q3
        &#8211; 2022</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">887</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4,635</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8,329</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,964</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-style: normal; font-weight: normal; text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hazel
    (TX)</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q3
        &#8211; 2022</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
    Q3-2022</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">887</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4,635</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8,329</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12,964</span></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-style: normal; font-weight: normal; text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oklahoma</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q4
        &#8211; 2022</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-style: normal; font-weight: normal; text-align: justify; text-indent: 0pt; padding-left: 8.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Predecessor</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">28</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">635</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,473</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,432</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,905</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-style: normal; font-weight: normal; text-align: justify; text-indent: 0pt; padding-left: 8.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Successor</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">242</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,276</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,285</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,561</span></td><td style="white-space: nowrap; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-style: normal; font-weight: normal; text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hazel
    (TX)</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: justify; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Q4
        &#8211; 2022</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Expenses
for the Years Ended December 31, 2022 and 2021</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
recorded depreciation, depletion and amortization expense of $-0- for the year ended December 31, 2022 compared to $4,642 for the year
ended December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operating
Expenses</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">2022</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Successor</td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt; font-weight: bold">&#160;</td><td style="border-bottom: Black 1pt solid; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 8%; text-align: right">907,045</td><td style="white-space: nowrap; width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
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    <td style="text-align: justify; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt">Total operating expenses</td><td style="padding-bottom: 2.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General
and Administrative Expenses</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
general and administrative expense for the year ended December 31, 2022 was $8,812,905 ($7,905,860 for the predecessor period plus $907,045
for the successor period) compared with $8,050,443 for the year ended December 31, 2021. Our general and administrative expenses consisted
of consulting and compensation expense, substantially all of which were non-cash or deferred, accounting and administrative costs, professional
consulting fees, and other general corporate expenses. The change in general and administrative expenses in 2022, compared to 2021, is
primarily due to employee compensation and an increase in consulting fees, filing fees, legal fees, director and officer liability insurance,
and investor relations expenses incurred in connection with the spin-off of the Company from Meta.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left">&#160;</p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Results
for the Three Months Ended March 31, 2022 and 2023</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenue
and Gross Profit&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 60%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Production
Revenues and Cost of Revenue</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the three months ended March 31, 2023, we had production revenue of $10,924 compared to $-0- of production revenue for the prior year
period. The change in revenue was primarily due to revenue from production sold from the Oklahoma wells. Our cost of revenue, consisting
of lease operating expenses and production taxes, was $16,602 for the three months ended March 31, 2023 compared to $10,621 for the prior
year period. Refer to the table of production and revenue included below for changes in revenue:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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  <tr style="vertical-align: bottom">
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    <td style="white-space: nowrap; padding-left: 8.65pt; text-align: center; text-indent: -8.65pt">&#160;</td><td style="white-space: nowrap">&#160;</td>
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    <td style="width: 1%; color: #231F20; text-align: left">&#160;</td><td style="width: 8%; color: #231F20; text-align: right">0</td><td style="white-space: nowrap; width: 1%; color: #231F20; text-align: left">&#160;</td><td style="width: 3%; color: #231F20">&#160;</td>
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    <td style="width: 1%; color: #231F20; text-align: left">$</td><td style="width: 8%; color: #231F20; text-align: right">&#8212;</td><td style="white-space: nowrap; width: 1%; color: #231F20; text-align: left">&#160;</td><td style="width: 3%; color: #231F20">&#160;</td>
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    <td style="color: #231F20; text-align: center; padding-bottom: 1pt">Q1 &#8211; 2022</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">0</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">0</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
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    <td style="padding-left: 8.65pt; color: #231F20; font-weight: bold; text-align: justify; padding-bottom: 2.5pt; text-indent: -8.65pt">Total Q1-2022</td><td style="padding-bottom: 2.5pt">&#160;</td>
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    <td style="padding-left: 8.65pt; text-align: center; text-indent: -8.65pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="padding-left: 8.65pt; color: #231F20; text-align: justify; text-indent: -8.65pt">Oklahoma</td><td style="color: #231F20">&#160;</td>
    <td style="color: #231F20; text-align: center">Q2 &#8211; 2022</td><td style="color: #231F20">&#160;</td>
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    <td style="padding-left: 8.65pt; color: #231F20; text-align: justify; padding-bottom: 1pt; text-indent: -8.65pt">Hazel (TX)</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; text-align: right">15</td><td style="white-space: nowrap; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td><td style="color: #231F20; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; color: #231F20; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; color: #231F20; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; color: #231F20; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 8.65pt; color: #231F20; font-weight: bold; text-align: justify; padding-bottom: 1pt; text-indent: -8.65pt">Total Q4-2022</td><td style="padding-bottom: 1pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 8.65pt; text-align: center; text-indent: -8.65pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Expenses
for the Three Months Ended March 31, 2023 and 2022</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
recorded depreciation, depletion and amortization expense of $-0- for the three months ended March 31, 2023, which was the same as the
prior year period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operating
Expenses</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 60%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">2023</td><td style="white-space: nowrap; padding-bottom: 1pt; font-weight: bold">&#160;</td><td style="white-space: nowrap; color: #231F20; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td style="color: #231F20; text-align: justify">Operating Expenses</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General
and Administrative Expenses</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
general and administrative expense for the three-month period ended March 31, 2023, was $2,381,774 compared with $825,737 for the prior
year period. Our general and administrative expenses consisted of employee compensation expense, accounting and administrative costs,
legal and other professional consulting fees, and other general corporate expenses. The change in general and administrative expenses
in 2023, compared to 2022, is primarily due to increased employee compensation and an increase in consulting fees, filing fees, legal
fees, director and officer liability insurance, and expense recorded relative to the issuance of employee stock options.</span></p>




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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash
Flows, Liquidity and Capital Resources.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cash
Flows</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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  <tr style="vertical-align: bottom">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">2,589,363</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(1,976,029</td><td style="white-space: nowrap; text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(3,859,851</td><td style="white-space: nowrap; text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(5,835,880</td><td style="white-space: nowrap; text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(14,805,511</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: justify; text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December 31, 2022, we had cash and cash equivalents of $569,298 compared to $1,989,419 as of December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cash
Flows From Operating Activities</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
used in operating activities for the year ended December 31, 2022, was $5,400,841 compared to $7,050,541 for the year ended December
31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
used in operating activities for the year ended December 31, 2022 can be attributed principally to net loss from operations of $8,848,873
adjusted for $3,679,298 in an increase in other liabilities, and accounts payable and accrued expenses.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cash
Flows from Investing Activities</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
used in investing activities for the year ended December 31, 2022 was $5,835,880 compared to $14,805,511 for year ended December 31,
2021. Cash used in investing activities consisted primarily of investments in oil and natural gas properties in 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cash
Flows from Financing Activities</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
provided by financing activities for the year ended December 31, 2022 was $9,816,600 compared to $23,714,967 for the year ended December
31, 2021. Cash flows provided by financing activities consists primarily of intercompany loans from Meta and the 2022 Note during the
year ended December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
expect to continue to have cash flows provided by financing activities as we seek new rounds of financing and continue to develop our
oil and natural gas investments. We do not expect to pay cash dividends on our common stock in the foreseeable future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reference
the Consolidated Statements of Cash Flows included in the financial statements for additional detail of the components that comprise
the net use of cash in operations. We expect to continue to use cash flows in operating activities until such time as we achieve sufficient
commercial oil and natural gas production to cover our operating costs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Capital
Expenditures</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left; text-indent: 27pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
capital expenditures are summarized in the following table:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 27pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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    <td style="text-align: left">&#160;</td><td style="text-align: right">2,295,928</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(949,093</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">150,000</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(1,289,328</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(141,048</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Asset retirement obligations</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(245,774</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(21,937</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  </table>



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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<i>Cash
Flow for the Three Months Ended March 31, 2023 and 2022</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0; margin-right: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
March 31, 2023, we had cash and cash equivalents of $5,301,647 compared to $829,145 as of March 31, 2022. At March 31, 2023, we had working
capital deficit of $40,244,765 and total assets of $94,237,199. Stockholders&#146; equity was $48,209,353. The negative working capital
is principally due to notes payable which will be payable within one year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes sources and uses of cash and cash equivalents:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 8.65pt; text-align: center; text-indent: -8.65pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; padding-left: 8.65pt; text-align: center; text-indent: -8.65pt">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Cash Flows From Operating Activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">(2,387,451</td><td style="white-space: nowrap; width: 1%; text-align: left">)</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">(836,035</td><td style="white-space: nowrap; width: 1%; text-align: left">)</td></tr>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Adjustments to reconcile net loss to net cash from operations:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">5,865</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 25.95pt">Change in:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">21,468</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">150,000</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">11,117</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,310</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,499,658</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(393,781</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td></tr>
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    <td style="text-align: right; text-indent: -8.65pt; padding-left: 8.65pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(8,437,883</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(1,084,285</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td></tr>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(8,437,883</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(1,084,285</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">$</td><td style="text-align: right">129,112</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">$</td><td style="text-align: right">492,860</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cash
Flow Used in Operating Activities</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
flow used in operating activities for the three months ended March 31, 2023 was $575,656 compared to $393,781 for the three months ended
March 31, 2022. Cash flows used in operating activities for the three months ended March 31, 2023 can be primarily attributed to the
net loss from operations offset by an increase in accounts payable. Cash flows used in operating activities for the three months ended
March 31, 2022 can be primarily attributed to the net loss from operations offset by a net increase in related party payables and a decrease
in accounts payable. We expect to continue to use cash flow in operating activities until such time as we achieve sufficient commercial
oil and gas production to cover all of our cash costs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cash
Flow Used in Investing Activities</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
flow used in investing activities for the three months ended March 31, 2023 was $8,437,883 compared to $1,084,285 for the three months
ended March 31, 2022. Cash flow used in investing activities principally consists of investment in oil and natural gas properties in
Texas.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cash
Flows from Financing Activities</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
flows from financing activities for the three months ended March 31, 2023 was $13,745,888 compared to $317,792 for the three months ended
March 31, 2022. Cash flows from financing activities consists of proceeds from additional borrowings under the 2022 Note, which had a
principal balance of $16,875,000 outstanding as of March 31, 2023. For the three months ended March 31, 2023, we incurred aggregate interest
on the 2022 Note, the 2021 Note and under the Loan Agreement of $92,860.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Capital
Expenditures</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
capital expenditures are summarized in the following table:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td colspan="6" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Three Months Ended March 31,</td><td style="white-space: nowrap; padding-bottom: 1pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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    <td>Acquisitions:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Change in accrued capital expenditures and other</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(3,580,231</td><td style="white-space: nowrap; text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,178,282</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Prepaid drilling costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(150,000</td><td style="white-space: nowrap; text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Capitalized interest</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(492,860</td><td style="white-space: nowrap; text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Asset retirement obligations</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 34.6pt">Total cash capital expenditures</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,707,652</td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,262,567</td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Liquidity
and Capital Resources</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
risk is the risk that we will not meet our financial obligations as they become due after use of currently available cash. We have a
planning and budgeting process to monitor operating cash requirements, including amounts projected for capital expenditures, which are
adjusted as input variables change. These variables include, but are not limited to, our ability to generate revenue from operations,
general and administrative requirements and the availability of equity or debt capital. As these variables change, we may be required
to issue equity or obtain debt financing.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>The
2021 Note</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 1, 2021, we issued a secured, revolving promissory note in an original principal amount of up to $15 million, which was subsequently
increased to $20 million, in favor of Meta (as amended to date, the &#147;2021 Note&#148;). The 2021 Note is fully drawn with
a principal balance outstanding of $20 million, bears interest at 8% per annum, computed on the basis of a 360-day year, and matures
on October 3, 2023. If an event of default has occurred and is continuing, interest on the 2021 Note may accrue at the default rate
of 12% per annum.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2021 Note is secured by a security interest in (a) pursuant to a Stock Pledge Agreement dated as of September 30, 2021 between Gregory
McCabe (the &#147;Pledgor&#148;) and Meta (the &#147;Stock Pledge Agreement&#148;), 1,515,000 shares of Meta&#146;s common stock
that are owned directly and beneficially by the Pledgor, and (b) pursuant to a Deed of Trust, Mortgage, Security Agreement, Fixture Filing,
Financing Statement and Assignment of Production dated as of September 30, 2021 made by Wolfbone (an affiliate of the Pledgor) for the
benefit of Meta (the &#147;Security Agreement&#148;), a 25% working interest beneficially owned by the Pledgor in the Orogrande Project
as defined in the Security Agreement. Following the Merger, we expect Wolfbone to become an indirect subsidiary of the Company and the
Security Agreement to remain in place.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2021 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our ability to merge or consolidate
with another person or entity, or sell or transfer all or substantially all of our assets, unless we are the surviving entity or the
successor entity assumes all of obligations under the 2021 Note.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the occurrence and during the continuance of an event of default under the 2021 Note, Meta as the lender may declare all outstanding
principal and accrued and unpaid interest under the 2021 Note immediately due and payable, may terminate any remaining commitment to
make advances under the 2021 Note, and may exercise the other rights and remedies provided for under the 2021 Note and related security
documents. The events of default under the 2021 Note include among other things, subject to grace periods in certain instances, payment
defaults, breaches of covenants, an event of default under the Stock Pledge Agreement or the Security Agreement, bankruptcy and insolvency
events with respect us or our subsidiaries, cross defaults with certain of our other material indebtedness, and material judgments against
us.</span></p>




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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
we have an aggregate principal balance of $6,589,361.77 outstanding under a Loan Agreement with Meta (the &#147;Loan Agreement&#148;),
which bears interest at a fixed rate of 8% per annum if no event of default exists, and at a fixed rate of 12% per annum if an event
of default exists. The loans under the Loan Agreement mature on October 3, 2023. The total amount of accrued and unpaid interest under
the Loan Agreement was $273,002 as of March 31, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have the right to prepay the loans under the Loan Agreement in whole or in part at any time without penalty. Amounts repaid or prepaid
may not be reborrowed. We will be required to prepay the loans upon an asset disposition (other than permitted asset sales), certain
equity issuances (other than permitted equity), debt issuances (other than permitted debt), and certain extraordinary receipts. We are
required to prepay the loans from our annual excess cash flow, if any.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Loan Agreement includes customary representations and covenants that, subject to certain exceptions and qualifications, restrict our
ability to do certain things, such as: incur additional indebtedness; incur liens; engage in mergers, acquisitions, and asset sales;
make loans and investments; declare dividends or redeem or repurchase equity interests; transact with affiliates on a non-arm&#146;s
length basis; and enter into certain restrictive agreements. In addition, the Loan Agreement contains customary affirmative covenants,
including covenants regarding the payment of taxes and other obligations, maintenance of insurance, maintenance of our existence and
material properties, customary visitation rights, reporting requirements, compliance with applicable laws and regulations, and formation
or acquisition of new subsidiaries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the occurrence and during the continuance of an event of default, Meta as the lender has the right to declare all outstanding principal
and accrued and unpaid interest under the Loan Agreement immediately due and payable and exercise certain other rights and remedies.
The events of default under the Loan Agreement include among other things, subject to grace periods in certain instances, payment defaults,
breaches of covenants or representations and warranties, a change in control or a material adverse change defined in the Loan Agreement,
material judgments and attachments, cross defaults with certain other material indebtedness, and bankruptcy and insolvency events with
respect to the Company and our subsidiaries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>



<p style="margin: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>The 2022
Note</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 22, 2022, we issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe (the &#147;2022
Note&#148;). The 2022 Note bears interest at 5% per annum, computed on the basis of a 365-day year, and matures on October 3,
2023 (the &#147;2022 Note Maturity Date&#148;). The revolving commitment under the 2022 Note expires on 2022 Note Maturity Date.
As of March 31, 2023, we had $16.9 million principal amount outstanding and $3.1 million of available borrowings
under the 2022 Note. The total amount of accrued and unpaid interest under the 2022 Note was $22,885.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2022 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our ability to merge or consolidate
with another person or entity, or sell or transfer all or substantially all of our assets, unless we are the surviving entity or the
successor entity assumes all of obligations under the 2022 Note.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the occurrence and during the continuance of an event of default under the 2022 Note, Mr. McCabe as the lender may declare all outstanding
principal and accrued and unpaid interest under the 2022 Note immediately due and payable, may terminate any remaining commitment to
make advances under the 2022 Note, and may exercise the other rights and remedies provided for under the 2022 Note. The events of default
under the 2022 Note include among other things, subject to grace periods in certain instances, payment defaults, breaches of covenants,
bankruptcy and insolvency events with respect us or our subsidiaries, cross defaults with certain of our other material indebtedness,
and material judgments against us.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 31, 2023, we had aggregate interest accrued on the 2022 Note, the 2021 Note and under the Loan Agreement of $1,985,332.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Contractual
Obligations</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
most significant contractual obligations relate to the Loan Agreement, the 2021 Note, 2022 Note and drilling and development commitments
and other lease operating expenses under certain leases for the Orogrande Project. See the discussion under the caption &#147;Liquidity and Capital Resources.&#148;</span></p>



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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">In addition to our debt commitments, the Orogrande
Project leases representing approximately 134,000 gross acres in the Orogrande Basin in West Texas are subject to expiration in 2023 in
the event we fail to drill five wells during the 2023 calendar year in compliance with our drilling obligations under the DDU Agreement.
We do not yet know what our capital expenditure needs will be to satisfy our drilling commitments for the calendar year 2023. For a discussion
of the risks relating to our drilling obligations, see &#8220;Risk Factors&#8212;Risks Relating to Our Business&#8221;, including the
risk factor &#8220;&#8212;<i>Our acreage must be drilled before lease expiration in order to hold the acreage by production. In the highly
competitive market for acreage, failure to drill sufficient wells in order to hold acreage will result in a substantial lease renewal
cost, or if renewal is not feasible, loss of our lease and prospective drilling opportunities</i>&#8221;. See also Notes 5 and 12 of the
notes to our financial statements as of and for the year ended December 31, 2022.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
believes that currently available resources may not provide sufficient funds to enable us to meet our financing and drilling obligations
for the 2023 fiscal year. We anticipate that we will continue to incur operating losses and generate negative cash flows from operations
for the foreseeable future. As a result, we will need additional capital resources to fund our operations both in the short term and
in the long term, prior to achieving break even or positive operating cash flow. While we do not have any committed sources of capital,
we expect to continue to opportunistically seek access to additional funds through public or private equity offerings or debt financings,
through partnering or other strategic arrangements, including credit application arrangements with our third party servicers, or a combination
of the foregoing. Despite our efforts, we may face obstacles in continuing to attract new financing due to industry conditions and our
history and current record of net losses. We can provide no assurance that we will be able to obtain the financing required to meet our
stated objectives or even to continue as a going concern.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Critical
Accounting Estimates.<sup></sup></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Oil
and natural gas properties</i>&#8212;The Company uses the full cost method of accounting for exploration and development activities as
defined by the SEC. Under this method of accounting, the costs of unsuccessful, as well as successful, exploration and development activities
are capitalized as properties and equipment. This includes any internal costs that are directly related to property acquisition, exploration
and development activities but does not include any costs related to production, general corporate overhead or similar activities. Gain
or loss on the sale or other disposition of oil and natural gas properties is not recognized, unless the gain or loss would significantly
alter the relationship between capitalized costs and proved reserves.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oil
and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs
excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated
with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated
properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the
reservoir. Unevaluated properties are reviewed for impairment at least annually and are determined through an evaluation considering,
among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining
capital plan, and political, economic, and market conditions.&#160;</span></p>







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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gains
and losses on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would significantly
alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Company&#146;s interest in the
oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as
doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually
charged to accumulated depreciation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Depreciation,
depletion, and amortization</i>&#8212;The depreciable base for oil and natural gas properties includes the sum of all capitalized costs
net of accumulated depreciation, depletion, and amortization (&#147;DD&amp;A&#148;), estimated future development costs and asset retirement
costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and natural
gas properties is amortized on a unit-of-production method.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Ceiling
test</i>&#8212;Future production volumes from oil and gas properties are a significant factor in determining the full cost ceiling limitation
of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a &#147;ceiling test&#148;
that determines a limit on the book value of oil and gas properties. If the net capitalized cost of proved oil and gas properties, net
of related deferred income taxes, plus the cost of unproved oil and gas properties, exceeds the present value of estimated future net
cash flows discounted at 10%, net of related tax affects, plus the cost of unproved oil and gas properties, the excess is charged to
expense and reflected as additional accumulated DD&amp;A. The ceiling test calculation uses a commodity price assumption which is based
on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12-month period and
excludes future cash outflows related to estimated abandonment costs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
determination of oil and gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available
data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and
future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably
from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based
on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and gas reserves
could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances,
and other factors which are difficult to predict could also affect estimates of proved reserves in the future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Asset
retirement obligations</i>&#8212;The fair value of a liability for an asset&#146;s retirement obligation (&#147;ARO&#148;) is recognized
in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized as
part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period,
and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction
of the ARO liability.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inherent
in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors,
credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments.
To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is
made to the oil and gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss
upon settlement.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Recent
Accounting Pronouncements</i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audited financial statements and the accompanying notes thereto found elsewhere in this prospectus contain a description of recent
accounting pronouncements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited
financial statements and related notes that are included elsewhere in this prospectus and the audited consolidated financial statements
and related notes. Some of the information contained in this discussion and analysis constitutes forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from those discussed in these forward-looking statements. Factors
that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this report,
particularly under the section titled &#147;Cautionary Statement Concerning Forward-Looking Statements.&#148;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">References
to &#147;Predecessor&#148; relate to the results of operations of the Company as a subsidiary of our former parent Meta prior to the
separation of the Company in December 2022 as reported in the consolidated financial statements for the three months ended March 31,
2022, and references to &#147;Successor&#148; relate to the results of operations of the Company as an independent public reporting
company as reported in our consolidated financial statements for the three month period ended March 31, 2023, in each case, in accordance
with GAAP.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a010_v1"></span>MANAGEMENT</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Executive
Officers and Non-Employee Directors</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table and biographical descriptions provide information regarding our directors and executive officers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="font: 10pt Times New Roman, Times, Serif; white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><b><span style="text-decoration: underline">Age</span></b></span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; white-space: nowrap"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><b><span style="text-decoration: underline">Position</span></b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><b><i>Executive
    Officers</i></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 30%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Clifton
    DuBose, Jr</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">41</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 56%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Chief
    Executive Officer, President</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Lucas
    T. Hawkins</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">37</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Chief
    Financial Officer</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Delvina
    Oelkers</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">36</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Chief
    Operating Officer</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><b><i>Non-Employee
    Directors</i></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Gregory
    McCabe</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">62</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Chairman</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Robert
    Lance Cook</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">66</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Director</span></td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Mia
    Pitts</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">39</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Director</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Kristin
    Whitley</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">39</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Director</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Executive
Officers</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Clifton
DuBose, Jr. </b>has successfully acquired, managed, and/or sold thousands of royalty acres and non-operated working interests in the
Permian Basin. Since May 2018, Mr. DuBose has served as co-founder and member of Valor Mineral Management LLC (&#147;Valor&#148;).
Valor is a mineral and working interest management firm which uses a proprietary software platform it has developed, known as &#147;mineral.tech.&#148;
Since August 2016, Mr. DuBose has also served as President of Imperial Royalty Management I, LLC, which is the general partner of a company
that owns certain mineral interests, and since August 2016 as the managing member of Korban Resources LLC, a company which invests in
oil and gas interests. Mr. DuBose is also an attorney, licensed to practice law in the State of Texas. He earned his law degree from
Georgetown Law, in Washington D.C. in 2009 and a BS in Agribusiness from Abilene Christian University in 2004.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Lucas
T. Hawkins</b> is the Co-Founder and has served as Chief Financial Officer of Mammoth Exploration LLC, a private equity backed upstream
oil and gas company, since June 2016. Since July 2013, Mr. Hawkins has served as VP&#8212;Business Development of Hawkins Exploration,
Inc. (&#147;HEI&#148;). HEI is an independently owned oil and gas exploration company focused on the Permian Basin. Mr. Hawkins led,
managed and executed numerous acquisitions and subsequent development of oil and gas properties across the Permian Basin. From 2010 to
2011, Mr. Hawkins served as an Associate with The Sterling Group, a middle market private equity group focusing on industrial, manufacturing
and distribution businesses. From 2011 to 2013 Mr. Hawkins served as an Associate with Natural Gas Partners, an energy private equity
firm. Mr. Hawkins has a background in energy investment banking and private equity and earned his BBA in Finance and Business Honors
from the University of Texas at Austin.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Delvina
Oelkers</b> served as Asset Manager from March 2016 to March 2019 at Eclipse Resources and as Completions Manager from March 2019 to
November 2020 at Montage Resources, in each position where she managed engineering teams, achieving cost and efficiency improvements
while implementing innovative technology for substantial reserve recovery. She led her operations team through several successful M&amp;A
transactions. Ms. Oelkers designed completions for the Eclipse and Montage Resources Super Lateral Program, including the design and
execution of the first world-record-setting &#147;Purple Hayes 1H&#148; Well. As an Asset Manager at Eclipse Resources, Ms. Oelkers
was responsible for leading the multidisciplinary team to prove-up the asset. By utilizing innovative technologies in design, the first
exploratory well produced 35% higher than type curve.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Non-Employee
Directors</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Gregory
McCabe </b>owns and manages McCabe Petroleum Corporation. Mr. McCabe has active ownership in several other oil and gas entities including
Manix Royalty, Texas Rock Oil, TRO-X, and McCabe Minerals and Royalties. Working with geologist, Rich Masterson, Mr. McCabe was extremely
active in the early development of the Wolfbone play in the Delaware Basin portion of the Permian Basin. The experience and knowledge
learned in the Wolfbone play helped formulate Mr. McCabe and Mr. Masterson&#146;s theories and concepts regarding the Orogrande Basin.
In addition to his work in the Orogrande and Delaware Basins of Texas and New Mexico, Mr. McCabe has explored for oil and gas throughout
the U.S., including Louisiana, Utah, Arizona, Montana, and Nebraska. Mr. McCabe received his Bachelor of Science degree in Geology in
1984 from Sul Ross State University.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Robert
Lance Cook</b> spent 36 years at Shell Oil with final positions of Vice President of Wells Technology and Chief Scientist. Mr. Cook has
extensive experience in Deepwater, Arctic, and Unconventional Research &amp; Development and Operations. Mr. Cook is the founder and
CEO of Enventure Global Technology, a joint venture between Shell and Halliburton. Mr. Cook has served as the COO of Sirius Well Manufacturing,
a joint venture between Shell and CNPC and is a technologist with an extensive patent portfolio. Since retiring from Shell in 2016, Mr.
Cook has served as Vice President of Production Operations for WellsX Inc. from 2017 to 2020 and in 2020, he founded and continues to
serves as president and chief technology officer of Sage Geosystems Inc.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mia
Pitts</b> is currently serving as Chief Privacy Officer, US &amp; Canada at Marsh McLennan Companies (&#147;Marsh&#148;) after serving
as Senior Counsel, Privacy and Digital at Marsh from February 2018 until March 2023. Ms. Pitts previously was a litigator and regulatory
compliance lawyer at Freshfields Bruckhaus Deringer (March 2010- March 2016), one of the world&#146;s largest and oldest law firms.
Ms. Pitts has represented corporate and individual clients in internal, regulatory, civil, and criminal investigations before the U.S.
Securities and Exchange Commission, Department of Justice, and state attorney generals as well as in shareholder securities litigation,
class action litigations, and other private civil allegations and suits. She has also represented independent corporate oversight authorities
appointed by the federal government, including the DOJ-appointed monitor of a global financial institution and the federal court-appointed
receiver of a multi-national firm in an SEC securities fraud matter. Ms. Pitts graduated from Georgetown University Law Center and Barnard
College of Columbia University.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Kristin
Whitley, CPA</b>, began her career in June 2006 as a public accounting with Whitley Penn where she worked for 10 years. While at Whitley
Penn she served a variety of clients within the energy and mining industries. In August 2016, Mrs. Whitley joined Vista Minerals, a leading
in-basin regional provider of sand to industrial, oil and gas companies, in the role of Chief Accounting Officer and less than a year
later was named Chief Financial Officer. While at Vista Minerals, Mrs. Whitley has managed the finance and accounting, human resources,
and information technology functions, participating in numerous capital raises, strategic initiatives, contract negotiations, and risk
management exercises. Mrs. Whitley is a Certified Public Accountant in the State of Texas. She graduated from The University of Texas
at Austin with her BBA and from Texas Christian University&#146;s Neeley School of Business with her MBA. In 2019, Mrs. Whitley was
named one of Oil and Gas Investor&#146;s Forty Under 40 in Energy.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Conflicts
of Interest</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevada
law permits corporations to adopt provisions renouncing any interest or expectancy in certain opportunities that are presented to the
corporation or its directors, officers or stockholders. Our Amended and Restated Articles of Incorporation, to the maximum extent permitted
from time to time by Nevada law, renounce any interest or expectancy that we have in, or right to be offered an opportunity to participate
in, specified business opportunities that are from time to time presented to our directors, officers or stockholders or their respective
affiliates. Our Amended and Restated Articles of Incorporation provide that, to the fullest extent permitted by law neither any director
or officer nor his or her affiliates will have any duty to refrain from (i) engaging in a corporate opportunity in the same or similar
lines of business in which we or our affiliates now engage or propose to engage or (ii) otherwise competing with us or our affiliates.
In addition, to the fullest extent permitted by law, in the event that any director or officer acquires knowledge of a potential transaction
or other business opportunity which may be a corporate opportunity for such director or officer or such person&#146;s affiliates or
for us or our affiliates, such person will have no duty to communicate or offer such transaction or business opportunity to us or any
of our affiliates and they may take any such opportunity for themselves or offer it to another person or entity. We do not believe, however,
that any fiduciary duties or contractual obligations of our directors or officers arising in the future would materially undermine our
ability to operate our business. Our Amended and Restated Articles of Incorporation do not renounce our interest in any business opportunity
that is expressly offered to a director or officer solely in his or her capacity as a director or officer of the Company. To the fullest
extent permitted by law, no business opportunity will be deemed to be a potential corporate opportunity for us unless we would be permitted
to undertake the opportunity under our Amended and Restated Articles of Incorporation, we have sufficient financial resources to undertake
the opportunity and the opportunity would be in line with our business.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Director
Independence</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
majority of the members of our Board meet the criteria for independence as defined by the corporate governance guidelines to be adopted
by our Board.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Corporate
Governance Guidelines</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board has not adopted a formal corporate governance policy.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Code
of Ethics and Code of Conduct</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board of Directors has adopted a Code of Ethics and Code of Conduct that governs our directors, officers, and employees. A
copy of our Code of Conduct can be found on our website at nextbridgehydrocarbons.com/investors. We will post to our website any
amendments and waivers to the Code of Ethics and Code of Conduct that are required to be disclosed by the rules of the SEC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Committees
of Our Board</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have established an audit committee, a compensation committee, a nominating and governance committee and an ESG committee, each of which
operates under a written charter that is available on our website.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, our Board may, from time to time, designate one or more additional committees, which shall have the duties and powers granted
to it by our board of directors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Audit
Committee</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
members of the Audit Committee consist of Kristin Whitley, as the chairperson, Mia Pitts and Robert L. Cook, each of whom meet the independence
requirements set forth in Rule 10A-3 under the Exchange Act and our Audit Committee Charter. Each member of the Audit Committee is financially
literate, and Ms. Whitley has accounting and related financial management expertise and satisfies the criteria to be an &#147;audit
committee financial expert&#148; under the rules and regulations of the SEC, as those qualifications are interpreted by our Board in
its business judgment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
functions of the Audit Committee include:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">oversee
the quality and integrity of our financial statements, accounting practices and financial information we provide to the SEC or the public;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">review
our annual and interim financial statements, the report of our independent registered public accounting firm on our annual financial
statements, Management&#146;s Report on Internal Control over Financial Reporting and the disclosures under Management&#146;s Discussion
and Analysis of Financial Condition and Results of Operations;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">select
and appoint an independent registered public accounting firm;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">pre-approve
all services to be provided to us by our independent registered public accounting firm;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">review
related party transactions;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">review
with our independent registered public accounting firm and our management the accounting firm&#146;s significant findings and recommendations
upon the completion of the annual financial audit and quarterly reviews;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">review
and evaluate the qualification, performance, fees and independence of our registered public accounting firm;</span></td>
</tr></table>
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">meet
with our independent registered public accounting firm and our management regarding our internal controls, critical accounting policies
and practices and other matters;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">discuss
with our independent registered public accounting firm and our management earnings releases prior to their issuance;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">oversee
our internal audit function; and</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">oversee
our compliance program, response to regulatory actions involving financial, accounting and internal control matters, internal controls
and risk management policies.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Compensation
Committee</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
members of the Compensation Committee consist of Mia Pitts, as the chairperson, Kristin Whitley and Robert L. Cook, each of whom are
independent, &#147;non-employee directors&#148; (within the meaning of Rule 16b-3 under the Exchange Act).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
functions of our Compensation Committee include:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">setting
and reviewing our general policy regarding executive compensation;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">determining
the compensation of our Chief Executive Officer and other executive officers;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">approving
employment agreements for our Chief Executive Officer and other executive officers;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
the benefits provided to our Chief Executive Officer and other executive officers;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">overseeing
our overall compensation structure, practices and benefits plans;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">administering
our executive bonus and equity-based incentive plans; and</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">assessing
the independence of compensation consultants, legal counsel and other advisors to the Compensation Committee and hiring, approving the
fees and overseeing the work of, and terminating the services of such advisors.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Corporate
Governance and Nominating Committee</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
members of the Corporate Governance and Nominating Committee consist of Robert L. Cook, as the chairperson, Kristin Whitley and Mia Pitts,
each of whom are independent, &#147;non-employee directors&#148; (within the meaning of Rule 16b-3 under the Exchange Act).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
functions of our Corporate Governance and Nominating Committee include:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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our corporate governance practices;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
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</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">identifying,
reviewing and recommending to our Board individuals for election to the Board;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">adopting
and reviewing policies regarding the consideration of board candidates proposed by stockholders and other criteria for Board membership;
and</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.6in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">overseeing
our Board&#146;s annual self-evaluation.</span></td>
</tr></table>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>ESG
Committee</i></b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
members of the ESG Committee consist of Kristin Whitley and Robert L. Cook.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
functions of our ESG Committee include:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">provide
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  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">advise
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  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">provide
    oversight with respect to our annual sustainability report, which we plan to make available through our website.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Board
Leadership Structure and Role in Risk Oversight</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Governance
Structure</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board has the flexibility in its discretion to combine or separate the positions of Chairman of the Board and Chief Executive Officer.
The Board currently separates the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between
the two roles. &#160;Our Chief Executive Officer, who is also a member of our Board, is responsible for setting the strategic direction
of the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the
Chief Executive Officer, sets the agenda for the Board meetings, presides over meetings of the Board and tries to reach a consensus on
Board decisions. Although these roles are currently separate, the Board believes it should be able to freely select the Chairman of the
Board based on criteria that it deems to be in the best interest of the Company and its stockholders, and therefore one person may, in
the future, serve as both the Chief Executive Officer and Chairman of the Board.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Board&#146;s Role in Risk Oversight</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board oversees that the assets of the Company are properly safeguarded, that the appropriate financial and other controls are maintained,
and that our business is conducted wisely and in compliance with applicable laws and regulations and proper governance. Included in these
responsibilities is the Board&#146;s oversight of the various risks facing our company. In this regard, our Board seeks to understand
and oversee critical business risks. The Board does not view risk in isolation. Risks are considered in virtually every business decision
and as part of our business strategy. The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful
and appropriate risk-taking is essential for the Company to be competitive on a global basis and to achieve its objectives.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Director
Compensation</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
did not pay any compensation or grant any equity or other incentive awards to any of directors who are not employed by us or any of our
subsidiaries (&#147;non-employee directors&#148;) during the fiscal year ended December 31, 2022, nor did any of our non-employee directors
receive any such compensation or awards from Meta or any of our other affiliates for their services during such fiscal year. None of
our non-employee directors held any outstanding equity awards granted by us as of December 31, 2022. The compensation for Mr. DuBose
and Mr. DeWoody, who were each employed during the fiscal 2022, is reported in the Summary Compensation Table below, and they did not
receive any compensation for their service on the Board. Mr. DeWoody resigned from his position as an officer and director of the Company
effective as of June 30, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2023, the Board approved the grant of options to purchase 412,500 shares of our common stock to each of Ms. Whitley, Ms. Pitts
and Mr. Cook. On July 18, 2023, the Board approved an additional grant of options to purchase an additional 209,577
shares of our common stock to each of Ms. Whitley, Ms. Pitts and Mr. Cook. The exercise price and vesting and other terms of these options
are substantially the same as the options granted to our NEOs in March 2023 described below under &#147;Performance-Based Options&#148;
with respect to NEOs (defined below) shared with NBH.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a011_v1"></span>EXECUTIVE
COMPENSATION</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Incentive
Compensation Awards</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
executive officers have not historically been paid bonuses or received equity awards, and our Board and Compensation Committee has not
yet established a formal compensation policy for the determination of such awards. If our revenue grows and bonuses become affordable
and justifiable, we expect to use the following parameters in justifying and quantifying bonuses for our executive officers: (1) the
growth in our revenue, (2) the growth in our earnings before interest, taxes, depreciation and amortization, as adjusted (&#147;EBITDA&#148;),
and (3) the value of our common stock. The Board and Compensation Committee has not adopted specific performance goals and target bonus
amounts for any of our fiscal years, but may do so in the future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Benefits</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
this stage of our business, we provide no benefits or prerequisites for our employees other than health insurance and vacation benefits
that we believe are generally comparable to those offered by other small private and public companies or as may be required by applicable
state employment laws. We do not have a 401(k) retirement plan or any other retirement plan for our employee NEOs (defined below). We
may adopt these plans and confer other fringe benefits for our executive officers in the future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Summary
Compensation Table&#8212;Fiscal Year 2022 and 2021</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to &#147;smaller reporting
companies,&#148; as such term is defined under the Securities Act, which require compensation disclosure for our principal executive
officer and the two most highly compensated executive officers (other than the principal executive officer) who were employed by us as
of December 31, 2022. In certain circumstances, the compensation of former executive officers may also need to be disclosed. The table
below sets forth the annual compensation for services rendered during 2021 and 2022 by these executive officers (also referred to as
our &#147;named executive officers&#148; or &#147;NEOs&#148;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 7pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td colspan="2" style="white-space: nowrap; text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center">Deferred</td><td style="color: Black; font-weight: bold">&#160;</td><td style="color: Black; font-weight: bold">&#160;</td>
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    <td style="white-space: nowrap; text-align: center">&#160;</td><td>&#160;</td>
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    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center">Awards</td><td style="color: Black; font-weight: bold">&#160;</td><td style="color: Black; font-weight: bold">&#160;</td>
    <td colspan="2" style="white-space: nowrap; color: Black; font-weight: bold; text-align: center">Awards</td><td style="color: Black; font-weight: bold">&#160;</td><td style="color: Black; font-weight: bold">&#160;</td>
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    <td style="color: Black; font-style: italic; text-align: left; padding-left: 9pt">Former President of NBH</td><td style="color: Black">&#160;</td>
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  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
amount includes insurance reimbursements paid to Mr. DuBose, Mr. DeWoody and Ms. Oelkers.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. DuBose, Mr. DeWoody and Ms. Oelkers each commenced employment with
one of our subsidiaries, Hudspeth Operating, LLC, on September 7, 2021 each as a general manager.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
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</tr></table>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Outstanding
Equity Awards as of December 31, 2022</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, the NEOs did not hold any outstanding equity awards with respect to the equity securities of NBH.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Employment
Agreements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of our currently employed NEOs has an employment agreement that became effective on December 14, 2022 (the closing date of the Spin-Off).
These agreements do not have a specified term and provide for the executive to receive an annual base salary as follows: Mr. DuBose &#8211;
$400,000; Ms. Oelkers - $385,000. Each currently employed NEO is also eligible for an annual discretionary bonus as determined by the
Board, with a target bonus of not less than 50% of the executive&#146;s base salary, and to participate in our benefit plans made available
to employees generally. If the executive&#146;s employment with NBH is terminated by NBH without &#147;cause&#148; or by the executive
for &#147;good reason&#148; (as defined in the agreement), the executive will receive severance of 12 months base salary, payable in
installments over a 12-month period, a pro-rated amount of the executive&#146;s target bonus for the year of termination, payment of
the executive&#146;s COBRA premiums for 12 months, and 12 months&#146; accelerated vesting of the executive&#146;s then-outstanding
and unvested equity awards granted by NBH; however the cash severance and pro-rated target bonus will be payable only if such termination
occurs more than 12 months after the effective date of the employment agreements. However, if such a termination of the executive&#146;s
employment occurs in connection with or within 12 months following a change in control of NBH, the executive&#146;s cash severance will
equal 18 months of base salary (paid in a lump sum together with the pro-rated target bonus), the executive will be entitled to payment
of COBRA premiums for 18 months, and the executive&#146;s then-outstanding equity awards granted by NBH will be fully vested. In each
case, the executive&#146;s right to receive these severance benefits is subject to the executive&#146;s providing a release of claims
to NBH and continued compliance with confidentiality, non-competition, non-solicitation and other covenants in favor of NBH set forth
in the employment agreement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
liabilities in respect of the employment agreements will be retained by NBH. Newco will neither have nor assume any responsibility for
any incentive plan, employment agreement or other compensation plan of NBH and does not intend to establish a defined benefit plan.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Performance-Based
Options</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2023, the Compensation Committee granted each of our NEOs a performance-based stock option under our 2022 Equity Incentive Plan
(the &#147;2022 Plan&#148;) with respect to the following number of shares: for each of Mr. DuBose and Ms. Oelkers, 4,964,167
shares (which represented three percent of NBH&#146;s then-outstanding shares). The exercise price of each of these options is $1.2056
per share (which was based on an implied fair market value of $199,500,000 for NBH&#146;s working interest in the Orogrande Project).
In setting the exercise price of the options at this level, NBH intended to create an additional incentive for the executives to increase
the value of NBH&#146;s working interest above that threshold value of $199,500,000. As of May 11, 2023, NBH increased its working interest
in the Orogrande Project to 100% and as of July 18, 2023, each currently employed NEO was granted an additional option grant of
2,500,762 shares to restore their total grant to the percentage of our outstanding shares for that executive noted above. Each of these
options has a maximum term of 10 years, and the vesting of the option is generally contingent on the optionee&#146;s continued employment
or service through the first anniversary of the effective date of the optionee&#146;s employment agreement (or, if there is no such
agreement, the first anniversary of the grant date) or such longer period as provided in the option agreement. In connection with the
resignation of Joseph DeWoody effective June 30, 2023, the unvested options granted to him by the Compensation Committee in March 2023
are deemed forfeited and canceled.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Equity
Incentive Plan</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
maintain the 2022 Plan to attract, motivate, retain and reward selected employees and other service-providers of the Company and its
subsidiaries. Meta, as the sole stockholder of the Company at the time the 2022 Plan was adopted, approved the 2022 Plan. The 2022 Plan
is administered by the Compensation Committee, which has authority to interpret the plan provisions and make all required determinations
under the 2022 Plan. This authority includes, subject to the provisions of the 2022 Plan, selecting participants and determining
the types of awards they are to receive, determining the number of shares that are to be subject to awards and the terms and conditions
of awards, including the price (if any) to be paid for the shares or the award, accelerating or extending the vesting or exercisability
or extending the term of any or all outstanding awards, making certain adjustments to an outstanding award and authorizing the conversion,
succession or substitution of an award, determining the manner in which the purchase price of an award or the Company&#146;s common
shares may be paid, making required proportionate adjustments to outstanding awards upon the occurrence of certain corporate events such
as reorganizations, mergers and stock splits, and making provisions to ensure that any tax withholding obligations incurred in respect
of awards are satisfied. Awards granted under the plan may be stock options, stock appreciation rights, restricted stock or stock units,
or other awards denominated in or with reference to the Company&#146;s common stock, and are generally only transferable to a beneficiary
of a participant upon death or, in certain cases, to family members for tax or estate planning purposes.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the terms of the 2022 Plan, a change in control of the Company does not automatically trigger vesting of the awards then outstanding
under the plan. If there is a change in control, each participant&#146;s outstanding awards granted under the plan will generally be
assumed by the successor company, unless the Compensation Committee provides that the award will not be assumed and will become fully
vested and, in the case of options, exercisable. Any options that become vested in connection with a change in control will generally
terminate to the extent they are not exercised prior to the change in control. As described above under &#147;Employment Agreements,&#148;
certain equity awards granted to the NEOs are subject to accelerated vesting under their employment agreements in the event of a termination
of employment under certain circumstances.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Equity
Compensation Plan Information</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2022 Plan is our only equity compensation plan. The following table provides aggregate information as of the end of the 2022 fiscal year
with respect to the 2022 Plan:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 8.65pt; white-space: nowrap; text-align: center; text-indent: -8.65pt">&#160;</td><td>&#160;</td><td>&#160;</td><td>&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center">Number of Securities</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 8.65pt; white-space: nowrap; text-align: center; text-indent: -8.65pt">&#160;</td><td>&#160;</td><td>&#160;</td><td>&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td style="padding-left: 8.65pt; white-space: nowrap; text-align: center; text-indent: -8.65pt">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center">Issued Upon Exercise of</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="padding-left: 8.65pt; width: 61%; text-align: left; padding-bottom: 1pt; text-indent: -8.65pt">Equity compensation plans approved by security holders</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; width: 8%; text-align: right">-</td><td style="white-space: nowrap; width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
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    <td style="padding-left: 8.65pt; font-weight: bold; padding-bottom: 1pt; text-indent: -8.65pt">Total</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">50,000,000</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  </table>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a012_v1"></span>SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the rights offering, 100% of Newco common stock, once formed, will be owned by NBH.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the beneficial ownership of NBH&#146;s common stock as of July 21, 2023 by:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
person who we know beneficially owns more than 5% of NBH common stock&#894;</span></td>
</tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
of our directors&#894;</span></td>
</tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
of our named executive officers&#894; and</span></td>
</tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">all
directors and executive officers as a group.</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
persons named in the table have sole voting and investment power with respect to all shares of common stock of NBH shown as beneficially
owned by them, subject to community property laws, where applicable. Percentage ownership is based on 248,830,516 shares of our common
stock outstanding as of July 21, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as otherwise noted in the footnotes below, each person or entity identified below has sole voting and investment power with respect to
such securities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: left">Name</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 74%; color: Black; font-style: italic; text-align: left; padding-bottom: 1pt"><b>5% or More Stockholders</b><br />
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="color: Black; text-align: left">&#160;</td><td style="color: Black; text-align: right">69,124,128</td><td style="white-space: nowrap; color: Black; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">27.8</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: left">Robert L. Cook</td><td style="color: Black">&#160;</td>
    <td style="color: Black; text-align: left">&#160;</td><td style="color: Black; text-align: right">101,000</td><td style="white-space: nowrap; color: Black; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: left">Clifton DuBose Jr.</td><td style="color: Black">&#160;</td>
    <td style="color: Black; text-align: left">&#160;</td><td style="color: Black; text-align: right">&#8212;</td><td style="white-space: nowrap; color: Black; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: left">Lucas T. Hawkins</td><td style="color: Black">&#160;</td>
    <td style="color: Black; text-align: left">&#160;</td><td style="color: Black; text-align: right">&#8212;</td><td style="white-space: nowrap; color: Black; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: left">Delvina Oelkers</td><td style="color: Black">&#160;</td>
    <td style="color: Black; text-align: left">&#160;</td><td style="color: Black; text-align: right">&#8212;</td><td style="white-space: nowrap; color: Black; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="color: Black; text-align: left">Mia Pitts</td><td style="color: Black">&#160;</td>
    <td style="color: Black; text-align: left">&#160;</td><td style="color: Black; text-align: right">&#8212;</td><td style="white-space: nowrap; color: Black; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="color: Black; text-align: left">Kristin Whitley</td><td style="color: Black">&#160;</td>
    <td style="color: Black; text-align: left">&#160;</td><td style="color: Black; text-align: right">&#8212;</td><td style="white-space: nowrap; color: Black; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">All current directors and executive officers as a group (7 persons)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">69,225,128</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">27.8</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents
    less than 1%.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assumes
    that the subscription rights are exercised in full by all stockholders of NBH.</span></td></tr>
  </table>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a013_v1"></span>CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Transactions
between NBH and Stockholder Gregory McCabe</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
McCabe is a significant shareholder and Chairman of the Board, and holds 27.8% of the outstanding shares of common stock of the Company
as of July 21, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Contribution
Agreement</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the rights offering, we, MPC and Mr. McCabe have entered into the Contribution Agreement pursuant to which (i) Mr. McCabe
will contribute to NBH the Back-In Interest and (ii) MPC will contribute to NBH the Bronco Prospect in proportion to the percentage
of shares of common stock of NBH that are directly registered in the name of the beneficial owner on the books and records of the Company&#146;s
transfer agent, whether previously registered directly or currently held through a bank, broker or other nominee who instruct such bank,
broker or other nominee and transferred to the beneficial owner on the books and records maintained by NBH&#146;s transfer agent on
or prior to the record date such that each such beneficial owner will be the registered holder of NBH&#146;s common stock and therefore
the registered holder of the distributed subscription rights in book-entry form in a new account with NBH&#146;s transfer agent.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Acquisition
of Working Interests</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the terms of that certain Purchase Agreement, dated August 7, 2014, among Hudspeth, MPC and Mr. McCabe and pursuant to
the Participation Agreement, Mr. McCabe has, at his option, the Back-In Interest after payout and a reversionary interest if drilling
obligations are not met, all under the terms and conditions of a participation and development agreement among Hudspeth, MPC and Mr.
McCabe. Mr. McCabe also holds a 4.5% overriding royalty interest in the Orogrande acreage.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Settlement &amp; Purchase Agreement with Founders Oil &amp; Gas Operating, LLC, whereby Hudspeth and Wolfbone, subsidiaries of
the Company, obtained a collective 50% working interest in the oil and gas leases of the Orogrande Project, with each entity receiving
25% working interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
that certain Farmout Agreement, by and among Hudspeth, Pandora Energy LP, Founders Oil &amp; Gas, LLC, MPC and Mr. McCabe dated as of
September 23, 2015, as amended, future well capital spending obligations remained the same 50% contribution from Hudspeth and 50% from
Wolfbone until such time as the $40.5 million to be spent on the project. With such $40.5 million threshold being met, Wolfbone will
bear 25% of the costs of the wells being drilled in the Orogrande acreage going forward provided that Wolfbone elects to participate
in drilling such wells.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
Mr. McCabe owns a controlling interest in Magdalena, an entity that holds a 4.5% overriding royalty interest in the Orogrande acreage.
Magdalena&#146;s overriding royalty interest in the Orogrande acreage, which was obtained prior to, and was not a part of any of the
transactions with the Company or its subsidiaries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Torchlight
Energy Inc., a subsidiary of the Company, previously acquired from MPC a 66.66% working interest in approximately 12,000 acres in the
Midland Basin. As part of that transaction, MPC, Torchlight Energy Inc. and Imperial Exploration, LLC entered into a Participation Agreement
effective as of May 1, 2016. MPC and another unrelated working interest owner retained a back-in after payout working interest of 25%
in that same acreage, and the interest will be triggered back to MPC upon the proceeds from production equal the costs of developing
the project area.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 21, 2022, the Company entered into a Merger Agreement, pursuant to which in a series of transactions the Orogrande Properties
(as defined in the Merger Agreement) owned by Wolfbone were assigned to Hudspeth (or its designated assignee) in consideration of (1)
treating the Orogrande Obligations (as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with
respect to MPC and (2) an issuance of 56,297,638 shares of our common stock to Mr. McCabe (such series of transactions collectively,
the &#147;Merger&#148;). The Merger was completed in April 2023 in accordance with the Texas Business Organizations Code, whereby Wolfbone
became a direct and wholly-owned subsidiary of the Company and the Company acquired Wolfbone&#146;s 22.6249% working interest in the
oil and natural gas properties covering approximately 134,000 acres located in the Orogrande Basin in West Texas in Hudspeth County,
Texas.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Reimbursement
Obligations</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Option Agreement, MHP is entitled to reimbursement for its cost of the development activity to the extent that the
wells produced revenues beyond the date of the option&#146;s lapse until the total amount of development expenses are reimbursed. As
of March 31, 2023, there was an outstanding cost reimbursement balance in the amount of $3,671,688. Additionally, MPC holds a reversionary
interest burdening our proportionate interest in the Hazel Project of 20% pursuant to the terms of the Option Agreement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>The
Company&#146;s 2022 Note</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 22, 2022, the Company issued the 2022 Note in favor of Mr. McCabe. The 2022 Note bears interest at 5% per annum, computed on
the basis of a 365-day year, maturing October 3, 2023. As of March 31, 2023, the Company had $16.9 million in principal amount
outstanding and $3.1 million of available borrowings under the 2022 Note.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Policy
and Procedures Governing Related Party Transactions</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board has adopted a written policy regarding the approval of related party transactions. At regularly scheduled Audit Committee meetings,
management will recommend any related party transactions that are contemplated, and such transactions will require the Audit Committee&#146;s
approval. Generally, a &#147;related party&#148; is each of our executive officers, directors, nominees for director, any stockholder
owning greater than five percent of our outstanding shares, including any immediate family member of each of the foregoing, and any entity
owned or controlled by any of the foregoing. Transactions that are available to all of our employees generally or totaling less than
$5,000 when aggregated with all similar transactions are excluded from the policy.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
respect to the standards applied by the Audit Committee when deciding whether to approve a related party transaction, the Audit Committee
shall approve or ratify the transaction if it is on terms believed to be comparable to those that could be obtained in arm&#146;s length
dealings with an unrelated third party. We believe that the transactions and agreements discussed below (including renewals of any existing
agreements) between us and related third parties are at least as favorable to us as could have been obtained from unrelated parties at
the time they were entered into.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a014_v1"></span>DESCRIPTION
OF OUR CAPITAL STOCK</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>General</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following summarizes information concerning our capital stock, including material provisions of our Amended and Restated Articles of
Incorporation, our Amended and Restated By-laws and certain provisions of Nevada law. You are encouraged to read our Amended and Restated
Articles of Incorporation and our Amended and Restated By-laws, which have been filed as exhibits to the Registration Statement on Form
S-1, of which this prospectus is a part, for greater detail with respect to these provisions.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company was incorporated on August 31, 2021, and as of July 21, 2023, the Company had 248,830,516 shares of common stock
outstanding.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Authorized
Capital Stock</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
authorized capital stock consists of 500,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of preferred
stock, par value $0.0001 per share.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common
Stock</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Voting
Rights</i></b>. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a
vote of the stockholders. Holders of shares of our common stock do not have cumulative voting rights.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Other
Rights</i></b><i>.&#160;</i>Subject to the preferential liquidation rights of any preferred stock that may be outstanding, upon our liquidation,
dissolution or winding-up, the holders of our common stock will be entitled to share ratably in our assets legally available for distribution
to our stockholders.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Fully
Paid</i></b><i>.&#160;</i>The issued and outstanding shares of our common stock are fully paid and non-assessable<i>.&#160;</i>Any additional
shares of common stock that we may issue in the future will also be fully paid and non-assessable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders of our common stock will not have preemptive rights or preferential rights to subscribe for shares of our capital stock.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Preferred
Stock</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Amended and Restated Articles of Incorporation authorize our Board to designate and issue from time to time one or more series of preferred
stock without stockholder approval. If we offer a new series of preferred stock, a more specific description may be filed with the SEC,
and the designations and rights of such preferred stock will be described in an accompanying prospectus, including the following terms:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    series, the number of shares offered, and the liquidation value of the preferred stock;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    price at which the preferred stock will be issued;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    dividend rate, the dates on which the dividends will be payable, and other terms relating to the payment of dividends on the preferred
    stock;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    liquidation preference of the preferred stock;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
    the preferred stock is redeemable, or subject to a sinking fund, and the terms of any such redemption or sinking fund;</span></td></tr>
  </table>
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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->


<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
    the preferred stock is convertible, or exchangeable for any other securities, and the terms of any such conversion or exchange; and</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
    additional rights, preferences, qualifications, limitations, and restrictions of the preferred stock.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
description of the terms of the preferred stock that will be set forth in an applicable prospectus will not be complete and will be subject
to and qualified in its entirety by reference to the certificate of designation relating to the applicable series of preferred stock.
The registration statement, of which this prospectus forms a part, will include the certificate of designation as an exhibit or incorporate
it by reference.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Undesignated
preferred stock may enable our Board to render more difficult or to discourage an attempt to obtain control of us by means of a tender
offer, proxy contest, merger, or otherwise and to thereby protect the continuity of our management. The issuance of shares of preferred
stock may adversely affect the rights of the holders of our common stock. For example, any preferred stock issued may:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">rank
    senior to our common stock as to dividend rights, liquidation preference, or both;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">have
    full or limited voting rights; and</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">be
    convertible into shares of common stock or another series of preferred stock.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
issuance of additional preferred stock could adversely affect the voting power, conversion or other rights of holders of common stock.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Certain
Provisions of Nevada Law</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Combination
with Interested Stockholders Statute</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sections
78.411 to 78.444 of the Nevada Revised Statutes (N.R.S.), which apply to any Nevada corporation with more than 200 stockholders, prohibits
an &#147;interested stockholder&#148; from entering into a &#147;combination&#148; with the corporation for two years, unless certain
conditions are met. A &#147;combination&#148; includes:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
    merger of the corporation or any subsidiary of the corporation with an &#147;interested stockholder,&#148; or any other entity,
    whether or not itself an &#147;interested stockholder,&#148; which is, or after and as a result of the merger would be, an affiliate
    or associate of an &#147;interested stockholder,&#148;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
    sales, lease, exchange, mortgage, pledge, transfer, or other disposition in one transaction, or a series of transactions, to or with
    an &#147;interested stockholder&#148; or any affiliate or associate of an &#147;interested stockholder,&#148; of assets of the
    corporation or any subsidiary of the corporation:</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 72px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">having
    an aggregate market value equal to more than 5% of the aggregate market value of the corporation&#146;s assets, determined on a
    consolidated basis;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 72px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">having
    an aggregate market value equal to more than 5% of the aggregate market value of all of the outstanding shares of the corporation;
    or</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 72px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">representing
    more than 10% of the earning power or net income, determined on a consolidated basis, of the corporation.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    issuance or transfer by the corporation or any subsidiary, of any shares of the corporation or any subsidiary to an &#147;interested
    stockholder&#148; or any affiliate or associate of an &#147;interested stockholder,&#148; having an aggregate market value equal
    to 5% or more of the aggregate market value of all of the outstanding voting shares of the corporation, except under the exercise
    of warrants or rights to purchase shares offered, or a dividend or distribution paid or made, pro rata to all stockholders of the
    resident domestic corporation;</span></td></tr>
  </table>
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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->


<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    adoption of any plan, or proposal for the liquidation or dissolution of the corporation, under any agreement, arrangement or understanding,
    with the &#147;interested stockholder.&#148; or any affiliate or associated of the &#147;interested stockholder;&#148;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
    any of the following actions occurs:</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 72px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    reclassification of the corporation&#146;s securities, including, without limitation, any splitting of shares, share dividend, or
    other distribution of shares with respect to other shares, or any issuance of new shares in exchange for a proportionately greater
    number of old shares;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 72px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recapitalization
    of the corporation;</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 72px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">merger
    of consolidation of the corporation with any subsidiary; or</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 72px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
    other transaction, whether or not with or into or otherwise involving the interested stockholder, under any agreement, arrangement
    or understanding, whether or not in writing, with the interested stockholder or any affiliate or associate of the interested stockholder,
    which has the immediate and proximate effect of increasing the proportionate share of the outstanding shares of any class or series
    of voting shares or securities convertible into voting shares of the corporation or any subsidiary of the corporation which is beneficially
    owned by the interested stockholder or any affiliate or associate of the interested stockholder; or</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 48px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
    receipt by an &#147;interested stockholder&#148; or any affiliate or associate of an &#147;interested stockholder&#148; except
    proportionately as a stockholder of the corporation, of the benefit of any loan, advance, guarantee, pledge or other financial assistance
    or any tax credit or other tax advantage provided by or through the corporation.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
&#147;interested stockholder&#148; is a person who is:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 40px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 20px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 27.4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">directly
    or indirectly, the beneficial owner of 10% or more of the voting power of the outstanding voting shares of the corporation; or</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 40px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 20px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-right: 4.85pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    affiliate or associate of the corporation, which at any time within two years immediately before the date in question was the beneficial
    owner, directly or indirectly, of 10% or more of the voting power of the then outstanding shares of the corporation.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
corporation to which the Combinations with Interested Stockholders Statute applies may not engage in a &#147;combination&#148; within
two years after the interested stockholder first became an interested stockholder, unless the combination meets all of the requirements
of the corporation&#146;s articles of incorporation and (i) the combination or the transaction by which the person first became an interested
stockholder is approved by the board of directors before the person first became an interested stockholder, or (ii)(a) the combination
is approved by the board of directors and (b) at or after that time, the combination is approved at an annual or special meeting of the
stockholders, and not by written consent, by the affirmative vote of the stockholders representing at least sixty percent (60%) of the
outstanding voting power of the corporation not beneficially owned by the interested stockholder or the affiliates or associates of the
interested stockholder. If this approval is not obtained, the combination may be consummated after the two year period expires if either
(i)(a) the combination or transaction by which the person first became an interested stockholder is approved by the board of directors
before such person first became an interested stockholder, (b) the combination is approved by a majority of the outstanding voting power
of the corporation not beneficially owned by the interested stockholder or any affiliate or associate of the interested stockholder,
or (c) the combination otherwise meets the requirements of the Combination with Interested Stockholders Statute. Alternatively, a combination
with an interested stockholder engaged in more than 2 years after the date the person first became an interested stockholder may be permissible
if the aggregate amount of cash and the market value of consideration other than cash to be received by holders of shares of common stock
and holders of any other class or series of shares meets the minimum requirements set forth in the statue, and prior to the completion
of the combination, except in limited circumstances, the interested stockholder has not become the beneficial owner of additional voting
shares of the corporation.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Acquisition
of Controlling Interest Statute</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, Nevada&#146;s &#147;Acquisition of Controlling Interest Statute,&#148; prohibits an acquiror, under certain circumstances,
from voting shares of a target corporation&#146;s stock after crossing certain threshold ownership percentages, unless the acquiror
obtains the approval of the target corporation&#146;s stockholders. Sections 78.378 to 78.3793 of the N.R.S. only apply to Nevada corporations
with at least 200 stockholders, including at least 100 record stockholders who are Nevada residents, that do business directly or through
an affiliated corporation in Nevada and whose articles of incorporation or bylaws in effect 10 days following the acquisition of a controlling
interest by an acquiror do not prohibit its application. Our Bylaws presently provide that Nevada&#146;s Acquisition of Controlling
Interest Statute does not apply to us.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Limitations
of Liability and Indemnification Matters</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Articles of Incorporation contain provisions that limit the liability of our current and former directors for monetary damages to the
fullest extent permitted by Nevada law. Nevada law provides that directors of a corporation will not be personally liable for monetary
damages for any breach of fiduciary duties as directors, unless the presumption that the directors have acted in good faith, on an informed
basis, and with a view to the interests of the corporation has been rebutted, in which case directors may be liable for damages resulting
from intentional misconduct, fraud or a knowing violation of law. To the extent that indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have
been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable. If a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of our company in the successful defense of any action, suit or proceeding) is asserted
by any of our directors, officers or controlling persons in connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of that issue.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Subscription
Agent and Registrar</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
subscription agent and registrar for the subscription rights is American Stock Transfer &amp; Trust Company, LLC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>No
Listing</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
common stock is not listed on any securities exchange and will not be eligible for electronic trading through DTC or any other established
clearing corporation. There is no established public trading market for the&#160;shares of common stock being offered in this offering,
and we do not expect a market to develop. We do not intend to register any shares of common stock under the Securities Act for sale by
the holders of our common stock.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a015_v1"></span>PLAN
OF DISTRIBUTION</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the conclusion of the holding period, </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NBH will distribute
the subscription rights to eligible stockholders as of the record date. There is no managing or soliciting dealer for the offering and
NBH will not pay any kind of fee for the solicitation of the exercise of the subscription rights.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font: 10pt Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not expect that most holders of subscription rights, including NBH&#146;s directors and officers will be able to freely
transfer their subscription rights subject to applicable volume and manner of sale restrictions under Rule 144.</span></p>



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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a016_v1"></span>THE
RIGHTS OFFERING</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
Subscription Rights</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NBH
is distributing to the eligible holders of its common stock as of the record date, subscription rights to purchase shares of Newco common
stock for no additional consideration. Each eligible holder of record of NBH common stock will receive one subscription right for each
share of common stock owned by that holder and directly registered with the Company&#146;s transfer agent as of 5:00 p.m., New York City
time, on&#160;&#160;&#160;&#160;&#160;&#160;, 2023, which date the Company may extend in its sole discretion, the record date.
In order to be eligible to receive a subscription right, an NBH stockholder must have its shares of NBH common stock registered in the
name of the beneficial owner with the Company&#146;s transfer agent as of the record date and maintain such registration for a period
of 180 days, which period the Company may shorten in its sole discretion, thereafter. Each subscription right will entitle the
holder to acquire one share of Newco common stock at such time as NBH elects to spin-off Newco as an independent company. For example,
if you owned 1,000 shares of NBH common stock and such shares were directly registered with the Company&#146;s transfer agent on the
record date, you would have received 1,000 subscription rights and would have the right to acquire 1,000 shares of Newco common stock
at the time of the spin-off.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to be an eligible holder of shares of NBH common stock to receive non-transferable subscription rights to acquire shares
of Newco common stock, you cannot be (i) a bank, broker or other nominee that is determined by the Company in its sole discretion to
be holding shares for other entities or individuals or (ii) a beneficial owner of NBH common stock that is being held by a bank, broker
or other nominee. If your shares are currently held in a retirement account, such as a 401(k), ROTH IRA or similar account, you should
check with the custodian of such account as to whether the shares can be registered with the Company&#146;s transfer agent in the
individual holder&#146;s name.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Subscription
Right</i>. With your subscription right, you may acquire one share of common Newco stock per subscription right, subject to delivery
of the required documents before the rights expires. You may exercise all or a portion of your subscription right, or you may choose
not to exercise any of your subscription rights.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reasons
for Directly Registering NBH Shares</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board has determined that pursuing a rights offering is in the best interests of NBH and its stockholders in that it would provide incentive
to all stockholders of the Company who hold their shares in &#147;street name&#148; to directly register such shares in the name of
the stockholders with NBH&#146;s transfer agent.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Principal
Stockholder</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date hereof, Mr. McCabe beneficially owns approximately 27.8% of the common stock of NBH. Once formed, NBH will own 100% of the
common stock of Newco until the expiration of the rights offering.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assuming
the subscription rights are exercised in full, NBH will dispose of all of its shares of Newco common stock as a result of the spin-off
of Newco and will cease to be a stockholder of Newco. To the extent that the subscription rights are not exercised in full, NBH will
retain ownership of a portion of Newco common stock. To the extent that NBH retains ownership of shares of Newco common stock
after the completion of the spin-off of Newco, NBH may dispose of its remaining shares pursuant to a registered sale or an exemption
from registration, in each case, in accordance with the Securities Act and the rules and regulations promulgated thereunder.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Conditions,
Withdrawal and Cancellation</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NBH&#146;s
obligation to close the rights offering and to issue the subscription rights is conditioned on the satisfaction or waiver of the following
conditions:</span></p>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
Board shall have authorized and approved the offering and not withdrawn such authorization and approval, and shall have declared the
dividend of the subscription rights to eligible NBH stockholders&#894;</span></td>
</tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    Contribution Agreement between NBH, MPC and Mr. McCabe with respect to the Back-In Interest and the Bronco Prospect
    shall have been executed by each party thereto and all actions required to be performed prior to the closing of the rights offering
    shall have been completed;</span></td>
</tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
SEC shall have declared effective our Registration Statement on Form S-1, of which this prospectus forms a part, under the Securities
Act and no stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the SEC&#894; and</span></td>
</tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.3in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition preventing
consummation of the separation shall be in effect, and no other event outside the control of NBH shall have occurred or failed to occur
that prevents the consummation of the separation.</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fulfilment of the foregoing conditions will not create any obligation on the part of NBH to close the rights offering. In addition,
NBH reserves the right to withdraw and cancel the rights offering if, at any time prior to the record date, the Board of NBH determines,
in its sole discretion, that the offering is not in the best interest of NBH or its stockholders, or that market conditions are such
that it is not advisable to consummate the rights offering.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Effect
of the Rights Offering on Outstanding Common Stock of NBH</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
issuance of subscription rights for Newco shares in the rights offering will not affect the number of shares of NBH common stock you
own or your percentage ownership of NBH. If you do not exercise your subscription rights to acquire shares of Newco common stock
before the expiration date, following NBH&#146;s spin-off of Newco you will not retain an ownership interest in the Back-In Interest or
the Bronco Assets as the common stock of NBH that you hold will not reflect the assets or liabilities of Newco.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Formation
of Newco and Spin-Off</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
is currently anticipated that NBH will form Newco and contribute the Back-In Interest and the Bronco Assets to Newco in the future.
Following the contribution, NBH will spin-off Newco to the holders who exercise their subscription rights upon the earlier of (i) the
sale of NBH or a sale of all or substantially all of the Company&#146;s Orogrande Project or the Bronco Assets or (ii) five years
following the effective date of the contribution to Newco of the Back-In Interest and the Bronco Assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Method
of Exercising Subscription Rights</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exercise of subscription rights is irrevocable and may not be cancelled or modified. You may exercise your subscription rights as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Subscription
by Registered Holders</i>. If you are a registered holder of NBH common stock and you maintain such registration with the
Company&#146;s transfer agent throughout the holding period, the number of shares of Newco common stock you may acquire
pursuant to your subscription right will be indicated on the rights certificate that you receive, which you will receive at the
conclusion of the holding period. You may exercise your subscription rights by properly completing and duly executing the
rights certificate and forwarding it to the subscription agent at the address given below under &#147;&#8212;Subscription
Agent,&#148; to be received before 5:00 p.m., New York City time, on&#160;&#160;&#160;&#160;&#160;&#160;, 2028.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Subscription
by Beneficial Owners</i>. If you are a beneficial owner of shares of NBH common stock that are registered in the name of a broker, dealer,
custodian bank or other nominee, you will be eligible to receive subscription rights at such time as you have instructed such bank, broker
or other nominee to transfer your shares of common stock to you on the books and records maintained by the Company&#146;s transfer agent
on or prior to the record date such that you become the registered holder of NBH&#146;s common stock and you maintain such registration
with the Company&#146;s transfer agent throughout the holding period. At the conclusion of the holding period, you will
receive a rights certificate representing a right to the number of shares of Newco common stock you may acquire pursuant to your subscription
right.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Expiration
Date and Extension</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
subscription period, during which you may exercise your subscription rights, expires at 5:00 p.m., New York City time, on&#160;&#160;&#160;&#160;&#160;&#160;,
2028 (the &#147;expiration date&#148;). If you do not exercise your subscription rights before the expiration date, your
subscription rights will expire and will no longer be exercisable. NBH will not be required to distribute Newco shares to you if the
subscription agent receives your rights certificate after the expiration date. NBH has the option to extend the expiration date
of the subscription rights, although it does not presently intend to do so. NBH may extend the expiration date by giving oral or written
notice to the subscription agent before the expiration date, but in no event will we extend the expiration date beyond, , 2029.
If NBH elects to extend the expiration date, it will issue a press release announcing the extension no later than 9:00 a.m., New York
City time, on the next business day after the most recently announced expiration date.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Subscription
Agent</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
subscription agent for our common stock is American Stock Transfer &amp; Trust Company, LLC. The address to which rights certificates
and payments should be mailed or delivered by hand delivery or overnight courier is provided below. If sent by mail, we recommend that
you send documents by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days
to ensure delivery to the subscription agent. Do not send or deliver these materials to NBH or Newco.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>By
first class mail: </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equiniti
Trust Company, LLC</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operations
Center</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Attn:
Reorganization Department</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6201
15<sup>th</sup> Avenue</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Brooklyn,
New York 11219 </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Phone:
Toll-free (877) 248-6417</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(718)
921-8317</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fax
718 765-8758</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>By
hand or overnight courier:</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equiniti
Trust Company, LLC</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operations
Center</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Attn:
Reorganization Department</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6201
15<sup>th</sup> Avenue</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Brooklyn,
New York 11219</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Information
Agent</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
may direct any questions or requests for assistance concerning the method of exercising your subscription rights, additional copies of
this prospectus or other subscription materials referred to herein, to the information agent, at the following telephone number and address:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.F.
King &amp; Co., Inc.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Banks
&amp; Brokers May Call: </span></p>




<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
Others Call Toll-Free: </span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fees
and Expenses</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NBH
is not charging any fee or sales commission to issue the subscription rights to you or to issue Newco shares to you if you exercise
your rights. We will pay all reasonable fees charged by the subscription agent.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notice
to Nominees</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
you are a broker, dealer, custodian bank or other nominee holder that holds shares of NBH common stock for the account of others on the
record date, you should notify the beneficial owners of the shares for whom you are the nominee of the rights offering as soon as possible
to learn their intentions with respect to registering their shares to become the record holder on the books maintained by NBH&#146;s
transfer agent. You should obtain instructions from the beneficial owners of NBH common stock. If a registered holder of NBH common stock
so instructs, you should complete the transfer documents provided by NBH&#146;s transfer agent and deliver the subscription certificate
to the beneficial owner who has elected to become the record holder.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Validity
of Subscriptions</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NBH
will use reasonable efforts to resolve all questions regarding the validity and form of the exercise of your subscription rights, including
time of receipt and eligibility to participate in the rights offering. Such determination will be final and binding. Once made, subscriptions
and directions are irrevocable, and NBH will not accept any alternative, conditional or contingent subscriptions or directions. NBH reserves
the absolute right to reject any subscriptions or directions not properly submitted or the acceptance of which would be unlawful. You
must resolve any irregularities in connection with your subscriptions before the subscription period expires, unless NBH waives them
in its sole discretion.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Neither
NBH nor the subscription agent is under any duty to notify you or your representative of defects in your subscriptions. A subscription
will be considered accepted, subject to NBH right to withdraw and cancel the rights offering, only when the subscription agent receives
a properly completed and duly executed rights certificate and any other required documents. NBH interpretations of the terms and conditions
of the rights offering will be final and binding. You will have no rights as a holder of the shares of Newco common stock that you acquire
upon exercise of the subscription rights you receive in the rights offering until your account or the account of your nominee
is credited with the shares of Newco common stock acquired upon exercise of the subscription rights you receive in the rights
offering.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>No
Revocation or Change</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
you submit the rights certificate or have instructed your nominee of your subscription request, you are not allowed to revoke or change
the exercise. All exercises of subscription rights are irrevocable, even if you learn information about us that you consider to be unfavorable.
You should not exercise your subscription rights unless you are certain that you wish to acquire shares of Newco common stock.</span></p>


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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a017_v1"></span>SELLING
SECURITYHOLDERS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
formed and prior to NBH&#146;s spin-off of Newco, NBH will hold 100% of Newco common stock. Assuming the subscription rights
are exercised in full, NBH will dispose of all of its Newco common stock pursuant to the spin-off of Newco, and NBH will cease
to be a stockholder of Newco. To the extent that the subscription rights are not exercised in full, NBH will retain ownership of a portion
of Newco common stock. To the extent that NBH retains ownership of shares of Newco common stock after the completion of the spin-off
of Newco, NBH may dispose of its remaining shares, through a registered sale of securities or an exemption from registration, in
each case, pursuant to the Securities Act.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a018_v1"></span>LEGAL
MATTERS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
legal matters in connection with the issuance of the subscription rights described in this prospectus have been or will be passed upon
for us by O&#146;Melveny&#160;&amp;&#160;Myers, LLP, Dallas, Texas, and by Woodburn and Wedge, Reno, Nevada, with respect to matters
of Nevada law.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a019_v1"></span>EXPERTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements of Next Bridge Hydrocarbons, Inc. as of December 31, 2022 and 2021, and for each of the fiscal years
then ended, appearing in this prospectus, have been audited by BF Borgers, CPA, an independent registered public accounting firm, as
set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of
such firm as experts in accounting and auditing.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a020_v1"></span>WHERE
YOU CAN FIND MORE INFORMATION</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">We
have filed with the SEC a Registration Statement on Form S-1 under the Securities Act to register the subscription rights to be issued
in this offering. The term registration statement means the original registration statement and any and all amendments thereto, including
the exhibits and schedules to the original registration statement and any amendments. This prospectus, which constitutes a part of the
registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules
filed therewith. For further information with respect to us, reference is made to the registration statement and the exhibits and schedules
filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as
an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference
to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement,
along with the exhibits and schedules filed therewith, may be inspected without charge at the SEC&#146;s website. The SEC maintains
an internet website at</span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">www.sec.gov <span style="color: Black">that
contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
information contained on or accessible through our website shall not be deemed to be a part of this prospectus or the Registration Statement
on Form S-1, of which this prospectus is a part.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
may request a copy of any of our filings with the SEC at no cost by writing us at the following address:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investor
Relations</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">c/o
Next Bridge Hydrocarbons, Inc.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6300
Ridglea Place, Suite 950, Fort Worth, Texas 76116</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not authorized anyone to give any information or make any representation about the offering or of the Company that is different
from, or in addition to, that contained in this prospectus. Therefore, if anyone does give you information of this sort, you should not
rely on it. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this
prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities,
then the offer presented in this prospectus does not extend to you. The information contained in this prospectus speaks only as of the
date of this prospectus unless the information specifically indicates that another date applies.</span></p>

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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a021_v1"></span>INDEX
TO FINANCIAL STATEMENTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 92%; padding-left: 17.3pt; text-indent: -8.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 5%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PAGE</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.15in; text-indent: -8.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Consolidated
    Financial Statements (audited)</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; padding-left: 0.15in; text-indent: -8.65pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: #CCEEFF">
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    of Independent Registered Public Accounting Firm</a></span></td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b001_v1"></span>REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the shareholders and the board of directors of Next Bridge Hydrocarbons, Inc.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Opinion
on the Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have audited the accompanying consolidated balance sheets of Next Bridge Hydrocarbons, Inc. as of December 31, 2022 and 2021, the related
statements of operations, stockholders&#146; equity (deficit), and cash flows for the years then ended, and the related notes (collectively
referred to as the &#147;financial statements&#148;). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in the United States.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Substantial
Doubt about the Company&#146;s Ability to Continue as a Going Concern</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In
addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company&#146;s
ability to continue as a going concern. Management&#146;s plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis
for Opinion</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
financial statements are the responsibility of the Company&#146;s management. Our responsibility is to express an opinion on the Company&#146;s
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (&#147;PCAOB&#148;) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company&#146;s internal control over financial reporting. Accordingly, we express no such opinion.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/S/
BF Borgers CPA PC</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>BF
Borgers CPA PC </b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PCAOB
ID: 5041</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have served as the Company&#146;s auditor since 2022</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lakewood,
CO</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
29</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">, 2023</span></p>


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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; width: 100%; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b002_v1"></span>CONSOLIDATED
    BALANCE SHEETS</b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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  <tr id="xdx_407_eus-gaap--OilAndGasPropertyFullCostMethodNet_i01I_maAzfma_z2VtQ6tFndkg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_409_eus-gaap--OtherAssetsNoncurrent_i01I_maAzfma_zeSeYmFx3edk" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_404_eus-gaap--Assets_i01TI_mtAzfma_z6nMD1aDTHY1" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-indent: -8.65pt; padding-left: 8.65pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_40F_eus-gaap--LiabilitiesAndStockholdersEquityAbstract_iB_zRaRfYuFVFz7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: center">LIABILITIES AND STOCKHOLDERS&#8217; EQUITY</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_405_eus-gaap--LiabilitiesCurrentAbstract_i01B_zhmg4tWeaF4d" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_403_eus-gaap--AccountsPayableCurrent_i02I_maLCzCYc_zt3bAo4qwFid" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Accounts payable</td><td>&#160;</td>
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  <tr id="xdx_400_eus-gaap--AccountsPayableOtherCurrent_i02I_maLCzCYc_zGbB3kM8zdE3" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Accounts payable - Meta</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0069">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_407_eus-gaap--NotesPayable_i02I_maLCzCYc_zEPozjsKeVGb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Note payable - Meta</td><td>&#160;</td>
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  <tr id="xdx_40F_ecustom--NotesPayableRelatedPartiesClassifiedCurrent1_i02I_maLCzCYc_z49v0x3dxcb5" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Notes payable, related party</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0075">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_40B_eus-gaap--InterestPayableCurrent_i02I_maLCzCYc_zOBdbmqGOITl" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Accrued interest payable</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,571,336</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">208,889</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_400_eus-gaap--LiabilitiesCurrent_i02TI_mtLCzCYc_maLzHkQ_zA6uBNz1yCV9" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 25.95pt">Total current liabilities</td><td>&#160;</td>
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  <tr id="xdx_40E_eus-gaap--AssetRetirementObligationsNoncurrent_i01I_maLzHkQ_z99Dw6IvXtS3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt">Asset retirement obligations</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:AssetRetirementObligationsNoncurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">246,866</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:AssetRetirementObligationsNoncurrent" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">21,937</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_404_eus-gaap--Liabilities_i01TI_mtLzHkQ_maLASEzPxW_z55cjrX4pre2" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 25.95pt">Total liabilities</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:Liabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">30,283,575</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:Liabilities" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">15,559,152</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eus-gaap--CommitmentsAndContingencies_i01I_maLASEzPxW_z5P3nkAKfJX9" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Commitments and contingencies</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_403_eus-gaap--StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAbstract_i01B_zczFO5fKQnP1" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Stockholder&#146;s equity:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_403_eus-gaap--PreferredStockValue_i02I_maSEzbky_zbCMa7NUyiC9" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Preferred stock, par value $<span id="xdx_900_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20221231_zv92yNxYT6Ik" title="Preferred Stock, Par Value"><span id="xdx_904_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20211231_z4hWkuxsO7S6" title="Preferred Stock, Par Value"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0001</ix:nonFraction></ix:nonFraction></span></span>; <span id="xdx_90D_eus-gaap--PreferredStockSharesAuthorized_iI_c20221231_zUpMkBwv6bM6"><span id="xdx_90B_eus-gaap--PreferredStockSharesAuthorized_iI_c20211231_zJ9QDO56mOz2"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">50,000,000</ix:nonFraction></ix:nonFraction></span></span> shares authorized; <span id="xdx_90B_eus-gaap--PreferredStockSharesIssued_iI_c20221231_zMX3MqNIs7C5"><span id="xdx_90A_eus-gaap--PreferredStockSharesOutstanding_iI_c20221231_zvkhQR8RHWm5"><span id="xdx_901_eus-gaap--PreferredStockSharesIssued_iI_c20211231_zUiCpttbQSM7"><span id="xdx_90D_eus-gaap--PreferredStockSharesOutstanding_iI_c20211231_zo3MZX2MnBab"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">0</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span> issued and outstanding</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0095">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0096">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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  <tr id="xdx_405_eus-gaap--AdditionalPaidInCapital_i02I_maSEzbky_zB5MWCXdAHmh" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Additional paid-in capital</td><td>&#160;</td>
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    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Accumulated deficit</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 25.95pt">TOTAL LIABILITIES AND STOCKHOLDERS&#8217; EQUITY</td><td style="padding-bottom: 2.5pt">&#160;</td>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; width: 100%; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><br />
    <b>NEXT BRIDGE HYDROCARBONS, INC.</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b003_v1"></span>CONSOLIDATED
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <td style="padding-left: 17.3pt; padding-bottom: 1pt; text-align: center; text-indent: -8.65pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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                                                                                <p style="margin-top: 0; margin-bottom: 0">December 15, 2022 to</p>
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                                                                                <p style="margin-top: 0; margin-bottom: 0">January 1, 2022 to</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0"><b>December 14, 2022</b></p></td><td style="padding-bottom: 1pt; font-weight: bold"><b>&#160;</b></td><td style="padding-bottom: 1pt"><b>&#160;</b></td>
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><p style="margin-top: 0; margin-bottom: 0"><b>Year Ended</b></p>
                                                                               <p style="margin-top: 0; margin-bottom: 0"><b>December 31, 2021</b></p></td><td style="padding-bottom: 1pt">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--Revenues_hsrt--ReserveQuantitiesByTypeOfReserveAxis__srt--OilReservesMember_zM4Birbc1cF7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 47%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Oil sales</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2022-12-152022-12-31_custom_SuccessorMember_srt_OilReservesMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,276</ix:nonFraction></td><td style="padding-right: 5pt; width: 1%; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt; width: 1%">&#160;</td>
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    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt">Natural gas sales</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2022-12-152022-12-31_custom_SuccessorMember_srt_NaturalGasReservesMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,285</ix:nonFraction></td><td style="padding-right: 5pt; padding-bottom: 1pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2022-01-012022-12-14_custom_PredecessorMember_srt_NaturalGasReservesMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">21,477</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="font-weight: bold; text-indent: -8.65pt; padding-left: 8.65pt">Revenue</td><td style="font-weight: bold">&#160;</td>
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right"><ix:nonFraction name="us-gaap:Revenues" contextRef="From2022-01-012022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">38,273</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40A_eus-gaap--OperatingExpensesAbstract_iB_zS9jj93etTh4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Operating expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Lease operating expenses</td><td>&#160;</td>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Production and ad valorem tax</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="us-gaap:ProductionTaxExpense" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,001</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">General and administrative</td><td>&#160;</td>
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  <tr id="xdx_40B_eus-gaap--DepreciationAndAmortization_i01_maOEzB2t_z3JXEMBSElBa" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_40D_eus-gaap--OperatingExpenses_iT_mtOEzB2t_msOILz915_zLUfNZujp3If" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 25.95pt">Total operating expenses</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: center; text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--OperatingIncomeLoss_iT_mtOILz915_maILFCOzPt6_zIJLU8W7MS4" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Operating loss</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="us-gaap:OperatingIncomeLoss" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">910,539</ix:nonFraction></td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">)</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eus-gaap--NonoperatingIncomeExpenseAbstract_iB_zVpn4xe9YTre" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Other income (expense)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_401_eus-gaap--InterestExpense_i01_msNIEz5gP_zPmiYe8ex7h3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Interest expense</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0175">&#8212;</span></td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0176">&#8212;</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_406_eus-gaap--GainLossOnSaleOfOtherAssets_i01_maNIEz5gP_zWxUQv7noB59" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Gain (loss) on sale of assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0179">&#8212;</span></td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0180">&#8212;</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_40D_eus-gaap--GainsLossesOnExtinguishmentOfDebt_i01_maNIEz5gP_zjUHlnXwUD5" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Gain on extinguishment of debt</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0183">&#8212;</span></td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0184">&#8212;</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_401_eus-gaap--InterestAndDividendIncomeOperating_i01_maNIEz5gP_zFIOmAbJBN5h" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Interest income</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:InterestAndDividendIncomeOperating" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1</ix:nonFraction></td><td style="padding-right: 5pt; padding-bottom: 1pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:InterestAndDividendIncomeOperating" contextRef="From2022-01-012022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">495</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:InterestAndDividendIncomeOperating" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">10,428</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_400_eus-gaap--NonoperatingIncomeExpense_i01T_mtNIEz5gP_maILFCOzPt6_zjxXoB2Ytf5g" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 25.95pt">Total other income (expense)&#8212;net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="us-gaap:NonoperatingIncomeExpense" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1</ix:nonFraction></td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="us-gaap:NonoperatingIncomeExpense" contextRef="From2022-01-012022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">495</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="us-gaap:NonoperatingIncomeExpense" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">123,296</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40C_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_iNT_di_maNILzFSR_mtILFCOzPt6_zYRyNW97YlIc" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Loss before income taxes</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">910,538</ix:nonFraction></td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">)</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" contextRef="From2022-01-012022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">7,938,335</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">8,238,808</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_40B_eus-gaap--IncomeTaxExpenseBenefit_msNILzFSR_zSjJlSpZBNl5" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 25.95pt">Provision for income tax</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0199">&#8212;</span></td><td style="padding-right: 5pt; padding-bottom: 1pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0200">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0201">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--NetIncomeLoss_iT_mtNILzFSR_zPNu2dpspp2k" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt">Net loss</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">910,538</ix:nonFraction></td><td style="padding-right: 5pt; padding-bottom: 2.5pt; font-weight: bold; text-align: left; padding-left: 0pt">)</td><td style="border-left: Black 1pt solid; padding-left: 0pt; font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: center; text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_402_ecustom--EarningsPerShareBasicAndDiluted1Abstract_iB_zQFJ1SXKwIlb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-indent: -8.65pt; padding-left: 8.65pt">Loss per common share:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="padding-right: 5pt; text-align: left; padding-left: 0pt">&#160;</td><td style="border-left: Black 1pt solid; padding-left: 0pt">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_402_ecustom--EarningsPerShareBasicAndDiluted1_i01_z2ZztZdhd3A5" style="vertical-align: bottom; background-color: White">
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    <td style="font-weight: bold; text-indent: -8.65pt; padding-left: 8.65pt">Weighted average number of common shares outstanding:</td><td>&#160;</td>
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  </table>


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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; width: 100%; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
    BRIDGE HYDROCARBONS, INC.</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b004_v1"></span>CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS&#146; EQUITY</b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Year
ended December 31, 2022</b></span></p>



<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" id="xdx_30A_114_z0rAh40jsQmg" summary="xdx: Statement - CONSOLIDATED STATEMENTS OF SHAREHOLDERS&apos; EQUITY" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="white-space: nowrap; text-align: center"><b>Accumulated</b></td><td><b>&#160;</b></td><td><b>&#160;</b></td>
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  <tr id="xdx_438_c20210101__20211231_eus-gaap--ProceedsFromContributionsFromParent_zkn49kJNRXm3" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Contributions from parent</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0230">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0232">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_430_c20210101__20211231_eus-gaap--NetIncomeLoss_zHviT5pxMzIi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Net loss</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0235">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0236">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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  <tr id="xdx_43E_c20210101__20211231_eus-gaap--StockholdersEquity_iE_zwCFfvh2phL8" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-indent: -8.65pt; padding-left: 8.65pt">Balance December 31, 2021</td><td>&#160;</td>
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  <tr id="xdx_434_c20220101__20221214__srt--StatementScenarioAxis__custom--PredecessorMember_eus-gaap--ProceedsFromContributionsFromParent_zLLOwj84TJxg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Contributions from parent</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0247">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Net loss</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0252">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0253">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_437_c20220101__20221214__srt--StatementScenarioAxis__custom--PredecessorMember_eus-gaap--StockIssuedDuringPeriodValueNewIssues_zFHiuEpmejO9" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Issuance of common stock</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 1pt solid; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt">&#160;</td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="border-bottom: Black 1pt solid; white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="border-bottom: Black 1pt solid; white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="border-bottom: Black 1pt solid; white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="border-bottom: Black 1pt solid; white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="border-bottom: Black 1pt solid; white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#8212;</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0278">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0279">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2022-12-31_custom_SuccessorMember_us-gaap_AdditionalPaidInCapitalMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">51,345,640</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(<ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2022-12-31_custom_SuccessorMember_us-gaap_RetainedEarningsMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">910,538</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">50,451,649</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-indent: -8.65pt; padding-left: 8.65pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; width: 100%; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
    BRIDGE HYDROCARBONS, INC.</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b005_v1"></span>CONSOLIDATED
    STATEMENTS OF CASH FLOWS</b></span></td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<table cellpadding="0" cellspacing="0" id="xdx_301_112_ziXLQe0NPaD4" summary="xdx: Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="padding-left: 17.3pt; padding-bottom: 1pt; text-align: center; text-indent: -8.65pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" id="xdx_499_20221215__20221231__srt--StatementScenarioAxis__custom--SuccessorMember_zAtcxKdBRgOb" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Successor</td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt; font-weight: bold">&#160;</td><td style="border-bottom: Black 1pt solid; border-left: Black 1pt solid; font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td colspan="2" id="xdx_49F_20210101__20211231_zd5kxsxCd5Od" style="text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td></tr>
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    <td style="padding-left: 17.3pt; padding-bottom: 1pt; text-align: center; text-indent: -8.65pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><p style="margin-top: 0; margin-bottom: 0">For the period from</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">December 15, 2022 to</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">December 31, 2022</p></td><td style="border-bottom: Black 1pt solid; padding-bottom: 1pt; font-weight: bold">&#160;</td><td style="border-bottom: Black 1pt solid; border-left: Black 1pt solid; font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><p style="margin-top: 0; margin-bottom: 0">For the period from</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">January 1, 2022 to</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">December 14, 2022</p></td><td style="padding-bottom: 1pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><p style="margin-top: 0; margin-bottom: 0"><b>Year Ended</b></p>
                                                                               <p style="margin-top: 0; margin-bottom: 0"><b>December 31, 2021</b></p></td><td style="padding-bottom: 1pt">&#160;</td></tr>
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    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Cash Flows From Operating Activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1pt solid">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="width: 47%; text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Net loss</td><td style="width: 3%">&#160;</td>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt">Adjustments to reconcile net loss to net cash from operations:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1pt solid">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eus-gaap--AccretionExpense_i02_zxDki5K2tEt6" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 25.95pt">Accretion expense</td><td>&#160;</td>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 25.95pt">Paid in kind interest</td><td>&#160;</td>
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  <tr id="xdx_40D_eus-gaap--IncreaseDecreaseInOperatingCapitalAbstract_i02B_zLjRZ4mfLGC8" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt">Accounts receivable</td><td>&#160;</td>
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  <tr id="xdx_402_eus-gaap--IncreaseDecreaseInAccountsReceivableRelatedParties_i03_zo2fF1RUGpfb" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt">Prepayments - development costs</td><td>&#160;</td>
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  <tr id="xdx_400_eus-gaap--IncreaseDecreaseInOtherOperatingAssets_i03_zIWaP15cQwSf" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_40E_eus-gaap--IncreaseDecreaseInPrepaidExpense_i03_zbkHy3h4VQm4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt">Prepaid expenses</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0340">&#8212;</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_400_eus-gaap--IncreaseDecreaseInAccountsPayableAndAccruedLiabilities_i03_zEZSpUOIxnpg" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_401_eus-gaap--IncreaseDecreaseInOtherAccountsPayable_i03_zr90yEGjOab7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt">Other payables</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="us-gaap:IncreaseDecreaseInOtherAccountsPayable" contextRef="From2022-01-012022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">2,589,363</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0348">&#8212;</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_ecustom--IncreaseDecreaseInAccruedInterestPayable_i03_z0qID2hiMXY4" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 34.6pt">Accrued interest payable</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="nbh:IncreaseDecreaseInAccruedInterestPayable" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">1,091</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="border-left: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0351">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0352">&#8212;</span></td><td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--NetCashProvidedByUsedInOperatingActivities_i01_maCCERCzDOf_zi7LnKPLfykd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Net cash provided by (used in) operating activities</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="us-gaap:NetCashProvidedByUsedInOperatingActivities" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">7,050,541</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1pt solid">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--NetCashProvidedByUsedInInvestingActivitiesAbstract_iB_zcOHPs4aL7r7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Cash Flows From Investing Activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1pt solid">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40C_eus-gaap--PaymentsToAcquireOilAndGasPropertyAndEquipment_i01N_di_msNCPBUzDRs_zhahw8ApvQg1" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 17.3pt">Investment in oil and gas properties</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:PaymentsToAcquireOilAndGasPropertyAndEquipment" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,976,029</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="border-left: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:PaymentsToAcquireOilAndGasPropertyAndEquipment" contextRef="From2022-01-012022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">3,859,851</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:PaymentsToAcquireOilAndGasPropertyAndEquipment" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">14,805,511</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
  <tr id="xdx_405_eus-gaap--NetCashProvidedByUsedInInvestingActivities_i01T_mtNCPBUzDRs_maCCERCzDOf_zciFoGtdd4P3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt">Net cash used in investing activities</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:NetCashProvidedByUsedInInvestingActivities" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">1,976,029</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="border-left: Black 1pt solid; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:NetCashProvidedByUsedInInvestingActivities" contextRef="From2022-01-012022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">3,859,851</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:NetCashProvidedByUsedInInvestingActivities" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">14,805,511</ix:nonFraction></td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -8.65pt; padding-left: 17.3pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1pt solid">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_401_eus-gaap--NetCashProvidedByUsedInFinancingActivitiesAbstract_iB_zFZ73lXUWDF8" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Cash Flows From Financing Activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="border-left: Black 1pt solid">&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<!-- Field: Page; Sequence: 86 -->
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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; width: 100%; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
    BRIDGE HYDROCARBONS, INC.</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b006_v1"></span>NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; padding: 0pt; text-align: center; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>As
    of December&#160;31, 2022</b></span></td></tr>
  </table>
<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:NatureOfOperations"><p id="xdx_809_eus-gaap--NatureOfOperations_zOdJm7YIr9d2" style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_825_zdLbIWMFLaXb">NATURE
OF BUSINESS</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Next
Bridge Hydrocarbons, Inc. (the &#147;Company&#148;) was incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed
its name to Next Bridge Hydrocarbons, Inc. pursuant to its Amended and Restated Articles of Incorporation filed on June 30, 2022. The
Company spun off from Meta Materials, Inc. (&#147;Meta&#148;) on December 14, 2022, resulting in the Company becoming an independent
company (the &#147;Spin-Off&#148;). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Meta. Meta became the parent
of the Company&#146;s subsidiaries in June 2021 in a merger transaction with Torchlight Energy Resources, Inc. (&#147;Torchlight&#148;),
the previous parent of the subsidiaries and developer of the properties from their inception up to June 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company&#146;s primary focus has been the development of interests in an oil and natural gas project the Company
holds in the Orogrande Basin in West Texas in Hudspeth County, Texas (the &#147;Orogrande Project&#148;). In addition, the Company
has minor interests in the Eastern edge of the Midland Basin in Texas (the &#147;Hazel Project&#148;), and two minor well interests
in the Hunton wells located in Oklahoma (the &#147;Oklahoma Properties&#148;). The Company currently has six full-time employees, and
the Company employs consultants for various roles as needed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company operates its business through four wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation (&#147;TEI&#148;),
Hudspeth Oil Corporation, a Texas corporation (&#147;Hudspeth&#148;), Torchlight Hazel, LLC, a Texas limited liability company (&#147;Torchlight
Hazel&#148;), and Hudspeth Operating, LLC, a Texas limited liability company and wholly owned subsidiary of Hudspeth (&#147;Hudspeth
Operating&#148;). All intercompany transactions have been eliminated in the consolidated financial statements.</span></p>

</ix:nonNumeric><p id="xdx_816_zASXtkhuywyk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:SubstantialDoubtAboutGoingConcernTextBlock"><p id="xdx_80E_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_zlzMPAK8NTn9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_82A_zqjuYxrPU24h">GOING
CONCERN</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December 31, 2022, the Company had not yet achieved profitable operations. The Company had a net loss of $<span id="xdx_90C_eus-gaap--NetIncomeLoss_c20221215__20221231_zM6aEW4DNLyf"><ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2022-12-152022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">910,538</ix:nonFraction></span> for the period from
December 15, 2022 through December 31, 2022. The Company expects to incur further losses in the development of its business. The Company
had a working capital deficit as of December 31, 2022 of $<span id="xdx_907_ecustom--WorkingCapitalDeficit_iI_c20221231_z7Cmi3HLLn59"><ix:nonFraction name="nbh:WorkingCapitalDeficit" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">29,077,591</ix:nonFraction></span>. These conditions raise substantial doubt about the Company&#146;s
ability to continue as a going concern.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#146;s ability to continue as a going concern is dependent on its ability to generate future profitable operations and/or to
obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due. Management&#146;s plan to address the Company&#146;s ability to continue as a going concern includes: (1) obtaining debt or equity
funding from private placement, institutional, or public sources; (2) obtain loans from financial institutions, where possible, or (3)
participating in joint venture transactions with third parties. Although management believes that it will be able to obtain the necessary
funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods
will prove successful.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements have been prepared assuming that the Company will continue as a going concern and therefore, the financial
statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or
the amount and classifications of liabilities that may result from the outcome of this uncertainty.</span></p>

</ix:nonNumeric><p id="xdx_817_zGSzemIQgPr9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:SignificantAccountingPoliciesTextBlock"><p id="xdx_801_eus-gaap--SignificantAccountingPoliciesTextBlock_zWy5WoyPPU2c" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>3.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_82F_zVW3BeRRTW35">SIGNIFICANT
ACCOUNTING POLICIES</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the
United States of America. Accounting principles followed and the methods of applying those principles, which materially affect the determination
of financial position, results of operations and cash flows are summarized below:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:UseOfEstimates"><p id="xdx_84D_eus-gaap--UseOfEstimates_zxjZRJTmLEGb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_869_zR8Lqqwd0aeg">Use
of estimates</span></i></b>&#8212;The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America (&#147;GAAP&#148;) requires management to make estimates and certain assumptions that affect the amounts reported
in these consolidated financial statements and accompanying notes. Actual results could differ from these estimates.</span></p>

</ix:nonNumeric><p id="xdx_85F_z0vv3u146jCd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>



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<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:BasisOfAccountingPolicyPolicyTextBlock"><p id="xdx_845_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_zlASTtHu9tkg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_863_zf2vhDVeibL">Basis
of presentation</span></i></b>&#8212;The financial statements are presented on a consolidated basis and include the accounts of Next Bridge
Hydrocarbons, Inc. and its wholly owned subsidiaries, TEI, Hudspeth, Torchlight Hazel, and Hudspeth Operating. All significant intercompany
balances and transactions have been eliminated. As noted above, the Company was involved in the Spin-Off on December 14, 2022. The period
December 15, 2022 through December 31, 2022 is referred to herein as the &#147;successor period&#148; and the period from January 1,
2022 through December 14, 2022 is referred to herein as the &#147;predecessor period&#148;.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring
adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing
the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated
financial statements and disclosures of contingencies. Actual results may differ from those estimates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="nbh:RiskAndUncertaintiesPolicyTextBlock"><p id="xdx_849_ecustom--RiskAndUncertaintiesPolicyTextBlock_zh6jfgI9Nyic" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_861_zwFpaofkJnz4">Risks
and uncertainties</span></i></b>&#8212;The Company&#146;s operations are subject to significant risks and uncertainties, including financial,
operational, technological, and other risks associated with operating an emerging business, including the potential risk of business
failure.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2020, the World Health Organization (&#147;WHO&#148;) announced a global health emergency because of a new strain of coronavirus
(&#147;COVID-19&#148;) and the significant risks to the international community and economies as the virus spreads globally beyond
its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and
thereafter, COVID-19 continued to spread throughout the U.S. and worldwide. In addition, actions taken by OPEC members and other exporting
nations on the supply and demand in global oil and natural gas markets resulted in significant negative pricing pressure in the first
half of 2020, followed by a recovery in pricing and an increase in demand in the second half of 2020 and into 2021. However, multiple
variants emerged in 2021 and became highly transmissible, which contributed to additional pricing volatility during 2021 to date. The
financial results of companies in the oil and natural gas industry have been impacted materially as a result of changing market conditions.
Such circumstances generally increase uncertainty in the Partnership&#146;s accounting estimates. Although demand and market prices
for oil and natural gas have recently increased, due to the rising energy use and the improvement in U.S. economic activity, we cannot
predict events that may lead to future price volatility and the near-term energy outlook remains subject to heightened levels of uncertainty.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is continuing to closely monitor the overall impact and the evolution of the COVID-19 pandemic, including the ongoing spread
of any variants, along with future OPEC actions on all aspects of the Company&#146;s business, including how these events may impact
the Company&#146;s future operations, financial results, liquidity, employees, and operators. Additional actions may be required in
response to the COVID-19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely
affect general and local economic conditions. The Company cannot predict the long- term impact of these events on our liquidity, financial
position, results of operations or cash flows due to uncertainties including the severity of COVID-19 or any of the ongoing variants,
and the effect the virus will have on the demand for oil and natural gas. These situations remain fluid and unpredictable, and the Company
is actively managing its response.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:ConcentrationRiskCreditRisk"><p id="xdx_84D_eus-gaap--ConcentrationRiskCreditRisk_znssDXijkrOh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86A_zMhDaizGsxHe">Concentration
of risks</span></i></b>&#8212;At times the Company&#146;s cash balances are in excess of amounts guaranteed by the Federal Deposit Insurance
Corporation. The Company&#146;s cash is placed with a highly rated financial institution, and the Company regularly monitors the credit
worthiness of the financial institutions with which it does business.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:FairValueOfFinancialInstrumentsPolicy"><p id="xdx_84C_eus-gaap--FairValueOfFinancialInstrumentsPolicy_zPsMVhv9Oqb4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86B_zwUV41ftcIik">Fair
value of financial instruments</span></i></b>&#8212;Financial instruments consist of cash, receivables, convertible note receivable, payables
and promissory notes, if any. The estimated fair values of cash, receivables, and payables approximate the carrying amount due to the
relatively short maturity of these instruments. The carrying amounts of any promissory notes approximate their fair value giving affect
for the term of the note and the effective interest rates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as
follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability,
either directly or indirectly through market corroboration.</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
3 inputs are unobservable inputs based on management&#146;s own assumptions used to measure assets and liabilities at fair value.</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
financial asset or liability&#146;s classification within the hierarchy is determined based on the lowest level input that is significant
to the fair value measurement.</span></p>

</ix:nonNumeric><p id="xdx_858_zSo39M23lk9l" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>



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<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock"><p id="xdx_84E_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_ziWhumaf8ai1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_868_zCw54ZbXMS51">Cash
and cash equivalents</span></i></b> &#8211; Cash and cash equivalents include certain investments in highly liquid instruments with original
maturities of three months or less.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:TradeAndOtherAccountsReceivablePolicy"><p id="xdx_84A_eus-gaap--TradeAndOtherAccountsReceivablePolicy_zQue28oSFiia" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_863_ziLglcVv2Fzk">Accounts
receivable</span></i></b> &#8211; Accounts receivable consist of amounts due from a related party for their share of expenses paid on their
behalf by the Company. Management reviews receivables periodically and reduces the carrying amount by a valuation allowance that reflects
management&#146;s best estimate of the amount that may not be collectible. As of December 31, 2022 and December 31, 2021, no valuation
allowance was considered necessary.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:OilAndGasPropertiesPolicyPolicyTextBlock"><p id="xdx_84A_eus-gaap--OilAndGasPropertiesPolicyPolicyTextBlock_zgqZwnZvnvZe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_862_z7oqkwdRgSwf">Oil
and natural gas properties</span></i></b> &#8211; The Company uses the full cost method of accounting for exploration and development activities
as defined by the Securities and Exchange Commission (&#147;SEC&#148;). Under this method of accounting, the costs of unsuccessful,
as well as successful, exploration and development activities are capitalized as properties and equipment. This includes any internal
costs that are directly related to property acquisition, exploration and development activities but does not include any costs related
to production, general corporate overhead or similar activities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oil
and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs
excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated
with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated
properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the
reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering,
among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining
capital plan, and political, economic, and market conditions.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gains
and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would
significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Company&#146;s interest
in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as
long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value,
are usually charged to accumulated depreciation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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interest</span></i></b> &#8211; The Company capitalizes interest on unevaluated properties during the periods in which they are excluded from
costs being depleted or amortized. During the successor period and for the predecessor period, the Company capitalized $<span id="xdx_900_eus-gaap--AccumulatedCapitalizedInterestCosts_iI_c20221231__srt--StatementScenarioAxis__custom--SuccessorMember_z4uKvwG7uaE8"><ix:nonFraction name="us-gaap:AccumulatedCapitalizedInterestCosts" contextRef="AsOf2022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">74,210</ix:nonFraction></span>, and $<span id="xdx_906_eus-gaap--AccumulatedCapitalizedInterestCosts_iI_c20221214__srt--StatementScenarioAxis__custom--PredecessorMember_z4mkBjTkkZpa"><ix:nonFraction name="us-gaap:AccumulatedCapitalizedInterestCosts" contextRef="AsOf2022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,289,328</ix:nonFraction></span>
respectively, of interest on unevaluated properties. Capitalized interest for the year ended December 31, 2021, was $<span id="xdx_902_eus-gaap--AccumulatedCapitalizedInterestCosts_iI_c20211231_zL4NYus4wrd"><ix:nonFraction name="us-gaap:AccumulatedCapitalizedInterestCosts" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">141,048</ix:nonFraction></span>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:DepreciationDepletionAndAmortizationPolicyTextBlock"><p id="xdx_841_eus-gaap--DepreciationDepletionAndAmortizationPolicyTextBlock_zaa8qN2t4AB7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86D_z2NvRRdTAUvc">Depreciation,
depletion, and amortization</span></i></b> &#8211; The depreciable base for oil and natural gas properties includes the sum of all capitalized
costs net of accumulated depreciation, depletion, and amortization (&#147;DD&amp;A&#148;), estimated future development costs and asset
retirement costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and
natural gas properties is amortized on a unit-of-production method.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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test</span></i></b> &#8211; Future production volumes from oil and natural gas properties are a significant factor in determining the full cost
ceiling limitation of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a
&#147;ceiling test&#148; that determines a limit on the book value of oil and natural gas properties. If the net capitalized cost of
proved oil and natural gas properties, net of related deferred income taxes, plus the cost of unproved oil and natural gas properties,
exceeds the present value of estimated future net cash flows discounted at 10 percent, net of related realizable tax affects, plus the
cost of unproved oil and natural gas properties, the excess is charged to expense and reflected as additional accumulated DD&amp;A. The
Company recorded an impairment expense of $-0- for the successor period, for the predecessor period and for the year ended December 31,
2021, respectively, to recognize the adjustment required by the ceiling test.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first
day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment
costs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality
of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable
reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary
considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable
than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved
oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements,
technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future.</span></p>

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retirement obligations</span></i></b> &#8211; The fair value of a liability for an asset&#146;s retirement obligation (&#147;ARO&#148;) is
recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized
as part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period,
and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction
of the ARO liability.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inherent
in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors,
credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments.
To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is
made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain
or loss upon settlement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><p id="xdx_84C_eus-gaap--IncomeTaxPolicyTextBlock_z3Z312965tn1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_866_zonXPAuBxmB8">Income
taxes</span></i></b> &#8211; Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits
will not be realized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Authoritative
guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after
determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has
reviewed the Company&#146;s tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated
financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of
limitation are three to four years from their respective filings.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Estimated
interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense
in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for
the successor period, for the predecessor period, and for the year ended December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:RevenueRecognitionPolicyTextBlock"><p id="xdx_84F_eus-gaap--RevenueRecognitionPolicyTextBlock_zHXdBtqdtm8g" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86B_z1cIXMvbNvP7">Revenue
recognition</span></i></b> &#8211; The Company&#146;s revenue is typically generated from contracts to sell natural gas, crude oil or NGLs
produced from interests in oil and natural gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are
evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions
for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify
a delivery point which represents the point at which control of the product is transferred to the customer. The Company elects to treat
contracts to sell oil and natural gas production as normal sales, which are then accounted for as contracts with customers. The Company
has determined that these contracts represent multiple performance obligations which are satisfied when control of the commodity transfers
to the customer, typically through the delivery of the specified commodity to a designated delivery point.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third
parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring
control of those goods to the customer. Amounts allocated in the Company&#146;s price contracts are based on the standalone selling
price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gain
or loss on derivative instruments is outside the scope of ASC 606, <i>Revenue Recognition</i>, and is not considered revenue from contracts
with customers subject to ASC 606. The Company may in the future use financial or physical contracts accounted for as derivatives as
economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends
to physically settle but do not meet all of the criteria to be treated as normal sales.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Producer
Gas Imbalances.</i> The Company applies the sales method of accounting for natural gas revenue. Under this method, revenues are recognized
based on the actual volume of natural gas sold to purchasers.</span></p>

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<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock"><p id="xdx_849_eus-gaap--EarningsPerSharePolicyTextBlock_zi6k197iHdxb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_867_zNlHKSuiwDZ9">Basic
and diluted earnings (loss) per share</span></i></b> &#8211; Basic earnings (loss) per common share is computed by dividing net income (loss)
available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss)
per common share is computed in the same way as basic earnings (loss) per common share except that the denominator is increased to include
the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional
common shares were dilutive. The Company had zero dilutive shares for the successor period, for the predecessor period, and for the year
ended December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:RegulatoryEnvironmentalCostsPolicy"><p id="xdx_844_eus-gaap--RegulatoryEnvironmentalCostsPolicy_zfc5soVE47Je" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_867_zROk7xf5CEsj">Environmental
laws and regulations</span></i></b> &#8211; The Company is subject to extensive federal, state, and local environmental laws and regulations.
Environmental expenditures are expensed or capitalized depending on their future economic benefit. The Company believes that it is in
compliance with existing laws and regulations. The Company accrued no liability as of December 31, 2022 and December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p id="xdx_848_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zYPC8Wtbz3fd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_865_zQ0eqS4zivJk">Recent
accounting pronouncements not yet adopted</span></i></b> &#8211; In June 2016, the FASB issued ASU 2016-13, <i>Financial Instruments &#8211;
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</i>, which adds a new Topic 326 to the Codification
and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as
loans, receivables, and held-to-maturity debt securities. Under current GAAP, companies generally recognize credit losses when it is
probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize
an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized
cost that the company expects to collect over the instrument&#146;s contractual life. ASU 2016-13 also amends the credit loss measurement
guidance for available-for sale debt securities and beneficial interests in securitized financial assets. The guidance is applicable
for fiscal years beginning after December 15, 2019 and interim periods within those years, however, the FASB extended the effective date
for smaller reporting companies to fiscal years beginning after December 15, 2022. The Company does not believe the adoption of this
standard will have material impact on the consolidated financial statements.</span></p>

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<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:BusinessCombinationDisclosureTextBlock"><p id="xdx_803_eus-gaap--BusinessCombinationDisclosureTextBlock_zIARItZlcc9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>4.</b></span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_82C_zaoAoWBWkDtf">SPIN-OFF</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
December 14, 2022 (the &#147;Spin-Off Date&#148;), the Company and all of its wholly owned subsidiaries were involved in a spin off
transaction from the Company&#146;s former parent, Meta. Meta spun the Company and the Company&#146;s wholly owned oil and natural
gas subsidiaries in fulfillment of a preferred shareholder liability and other working capital items. As part of the Spin-Off, a change
in control event occurred which is accounted for under ASC 805, <i>Business Combination</i>. Meta no longer owns 100% of the Company
and the Company is now owned by various shareholders. The new shareholders of the Company received common stock as consideration and
the fair value was determined using the income approach.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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following table summarizes the fair value of the assets acquired and liabilities assumed at the Spin-Off Date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B1_zt4Xgjf27hg1" style="display: none">Schedule
of Fair Value of Assets Acquired and Liabilities Assumed</span></span></p>

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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_40E_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables_iI_maBCRIAz6Hy_zLwyujPoYv41" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Accounts receivable, related party</td><td>&#160;</td>
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  <tr id="xdx_403_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepaidExpenseAndOtherAssets_iI_maBCRIAz6Hy_z2QVjbZ7wGTj" style="vertical-align: bottom; background-color: White">
    <td style="text-indent: 0pt; padding-left: 0pt">Prepaids</td><td>&#160;</td>
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  <tr id="xdx_401_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOilAndNaturalGasProperties_iI_maBCRIAz6Hy_zYB2q2v66Awl" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Oil and natural gas properties</td><td>&#160;</td>
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  <tr id="xdx_40C_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOtherNoncurrentAssets_iI_maBCRIAz6Hy_zHIkEOYoAuo5" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_40D_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iNI_di_msBCRIAz6Hy_z9k2TZHV7MFd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Accounts payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable" contextRef="AsOf2022-12-14" format="ixt:numdotdecimal" decimals="0" unitRef="USD">5,310,456</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">)</td></tr>
  <tr id="xdx_406_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesNotesPayable_iNI_di_msBCRIAz6Hy_zToVfFjb06lc" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Notes payable</td><td>&#160;</td>
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  <tr id="xdx_40A_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccruedInterest_iNI_di_msBCRIAz6Hy_zZw84lhuR9Gi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Accrued interest</td><td>&#160;</td>
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  <tr id="xdx_40B_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAssetRetirementObligation_iNI_di_msBCRIAz6Hy_zeMLCCZqwbs9" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt">Asset retirement obligation</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="nbh:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAssetRetirementObligation" contextRef="AsOf2022-12-14" format="ixt:numdotdecimal" decimals="0" unitRef="USD">245,774</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td></tr>
  <tr id="xdx_40C_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet_iI_mtBCRIAz6Hy_zDoLjVe3RBfk" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt">Net Assets Recognized</td><td style="padding-bottom: 2.5pt">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A9_zB0Mk0r1YXz6" style="margin-top: 0; margin-bottom: 0"></p>

</ix:nonNumeric><p id="xdx_81A_zavD2TXM1Gu" style="margin-top: 0; margin-bottom: 0"></p>


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<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:OilAndGasPropertiesTextBlock"><p id="xdx_801_eus-gaap--OilAndGasPropertiesTextBlock_z4DaYI7ghVAd" style="margin-top: 0; margin-bottom: 0"></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>5.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_823_zobXAgHhBnt8">OIL
&amp; NATURAL GAS PROPERTIES</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:CostIncurredInOilAndGasPropertyAcquisitionExplorationAndDevelopmentActivitiesDisclosureTextBlock"><p id="xdx_89E_eus-gaap--CostIncurredInOilAndGasPropertyAcquisitionExplorationAndDevelopmentActivitiesDisclosureTextBlock_zZNK91ZGtEca" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table presents the capitalized costs for oil and natural gas properties of the Company:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B9_zjknUmnv8UCg">Schedule
of Capitalized Cost for Oil and Natural Gas</span></span></span></p>

<table cellpadding="0" cellspacing="0" id="xdx_307_134_z7ZSBD5Plasl" summary="xdx: Disclosure - OIL &amp; NATURAL GAS PROPERTIES (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td colspan="2" id="xdx_493_20221231_zDkifAhaOC6h" style="border-bottom: Black 1pt solid; white-space: nowrap; text-align: center">December 31,<br /> 2022</td><td style="padding-bottom: 1pt">&#160;</td><td style="padding-bottom: 1pt">&#160;&#160;&#160;</td>
    <td colspan="2" id="xdx_49B_20211231_zzp0HusmrwCc" style="border-bottom: Black 1pt solid; white-space: nowrap; text-align: center">December 31,<br /> 2021</td><td style="padding-bottom: 1pt">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2" style="white-space: nowrap; text-align: center">Successor</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="white-space: nowrap; text-align: center">Predecessor</td><td>&#160;</td></tr>
  <tr id="xdx_40F_ecustom--CapitalizedCostsEvaluatedCostsSubjectToAmortization_iI_maCCOAGzNVl_zLArKL4PxA0f" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Evaluated costs subject to amortization</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0497">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0498">&#8212;</span></td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_408_ecustom--CapitalizedCostsUnevaluatedCosts_iI_maCCOAGzNVl_zdbzhQCGn3Q7" style="vertical-align: bottom; background-color: White">
    <td style="width: 74%; text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt">Unevaluated costs</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; width: 8%; text-align: right"><ix:nonFraction name="nbh:CapitalizedCostsUnevaluatedCosts" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">79,695,928</ix:nonFraction></td><td style="white-space: nowrap; width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td><td style="width: 3%; padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; width: 8%; text-align: right"><ix:nonFraction name="nbh:CapitalizedCostsUnevaluatedCosts" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">61,319,652</ix:nonFraction></td><td style="white-space: nowrap; width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--CapitalizedCostsOilAndGasProducingActivitiesGross_iTI_mtCCOAGzNVl_maOAGPFzOfy_zCc38eGGc6E2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0.3in">Total Capitalized Costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="us-gaap:CapitalizedCostsOilAndGasProducingActivitiesGross" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">79,695,928</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="us-gaap:CapitalizedCostsOilAndGasProducingActivitiesGross" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">61,319,652</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_404_eus-gaap--CapitalizedCostsAccumulatedDepreciationDepletionAmortizationAndValuationAllowanceForRelatingToOilAndGasProducingActivities_iI_msOAGPFzOfy_ziam1oaHYAvj" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt">Less accumulated depreciation, depletion and amortization</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0506">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">(<ix:nonFraction name="us-gaap:CapitalizedCostsAccumulatedDepreciationDepletionAmortizationAndValuationAllowanceForRelatingToOilAndGasProducingActivities" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">15,656,182</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">)</td></tr>
  <tr id="xdx_40B_eus-gaap--OilAndGasPropertyFullCostMethodNet_iTI_mtOAGPFzOfy_zDssXse5BNda" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0.3in">Total oil and gas properties</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="us-gaap:OilAndGasPropertyFullCostMethodNet" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">79,695,928</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="us-gaap:OilAndGasPropertyFullCostMethodNet" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">45,663,470</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>


</ix:nonNumeric><p id="xdx_8A0_zJllypxue66a" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unevaluated
costs as of December 31, 2022, and December 31, 2021, include cumulative costs of developing projects including the Orogrande and Hazel
Projects in West Texas and the costs related to the Oklahoma Properties. In accordance with required accounting adjustments related to
the Spin-Off, the carrying value of the oil and natural gas assets were adjusted to fair value as of December 15, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company periodically adjusts for the separation of evaluated versus unevaluated costs within its full cost pool to recognize the value
impairment related to the expiration of, or changes in market value, of unevaluated leases. The impact of reclassifications as they become
necessary is to increase the basis for calculation of future period&#146;s depletion, depreciation and amortization which effectively
recognizes the impairment on the consolidated statement of operations over future periods. Reclassified costs also become evaluated costs
for purposes of ceiling tests, and which may cause recognition of increased impairment expense in future periods. The remaining cumulative
unevaluated costs which have been reclassified within the Company&#146;s full cost pool totals $-0- as of December 31, 2022. As of December
31, 2022, evaluated costs are $-0- since the Company have no proved reserve value associated with our properties.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a write-down could
occur. Proved reserves are estimated quantities of crude oil, natural gas, and natural gas liquids, which geological and engineering
data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions.
The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts
which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities
are not in place or for which transportation and/or marketing contracts are not in place. Estimated reserves to be developed through
secondary or tertiary recovery processes are classified as unevaluated properties.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Current
Projects</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company is primarily focused on the acquisition of early-stage projects, the development and delineation of
these projects, and then the monetization of those assets once these activities are completed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#146;s primary focus is the development of interests in oil and natural gas projects it holds in the Permian Basin in West Texas.
The Company also holds minor interests in certain other oil and natural gas projects in Central Oklahoma that it is in the process of
divesting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, the Company had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas,
the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, and two wells in Central Oklahoma.</span></p>



<ix:exclude><!-- Field: Page; Sequence: 92 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></p></div>
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    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Orogrande
Project, West Texas</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 7, 2014, Torchlight entered into a Purchase Agreement with Hudspeth, McCabe Petroleum Corporation (&#147;MPC&#148;), and Gregory
McCabe (&#147;Mr. McCabe&#148;). Mr. McCabe was the sole owner of both Hudspeth and MPC. Under the terms and conditions of the Purchase
Agreement, Torchlight purchased 100% of the capital stock of Hudspeth which held certain oil and natural gas assets, including a 100%
working interest in approximately 172,000 predominately contiguous acres in the Orogrande Basin in West Texas. Mr. McCabe has, at his
option, a 10% working interest back-in after payout and a reversionary interest if drilling obligations are not met, all under the terms
and conditions of a participation and development agreement among Hudspeth, MPC and Mr. McCabe. Mr. McCabe also holds a 4.5% overriding
royalty interest in the Orogrande acreage, &#8212;which he obtained prior to, and was not a part of the August 2014 transaction. As of
December 31, 2022, leases covering approximately 134,000 acres remain in effect.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
March 27, 2017, the property became subject to a University Lands D&amp;D Unit Agreement (&#147;DDU Agreement&#148;) which allows for
all 192 existing leases covering approximately 134,000 gross acres leased from University Lands to be combined into one drilling and
development unit for development purposes. The term of the DDU Agreement expires on December 31, 2023, and the time to drill on the drilling
and development unit continues through December 31, 2023. The DDU Agreement also grants the right to extend the DDU Agreement through
December 31, 2028 if compliance with the DDU Agreement is met and the extension fee associated with the additional time is paid.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Drilling
obligations under the DDU Agreement include five wells per year in years 2021, 2022 and 2023. The drilling obligations are minimum yearly
requirements and may be exceeded if acceleration is desired.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
drilling obligations through December 31, 2022, have been met.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Torchlight
had drilled 14 test wells in the Orogrande in order to stay in compliance with the DDU Agreement, as well as, to test for potential shallow
pay zones and deeper pay zones that may be present on structural plays. Development of the wells continued through December 31, 2022,
to further capture and document the scientific base in support of demonstrating the production potential of the property. As of December
31, 2022, a total of 15 test wells have been drilled on the acreage.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 9, 2020, holders of certain notes payable by Torchlight entered into a Conversion Agreement under which the noteholders elected
to convert $6,000,000 of principal and approximately $1,331,000 of accrued interest on the notes held by such holders, in accordance
with their terms, into an aggregate 6% working interest (of all such holders) in the Orogrande Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company intends to make offers and enter into agreements with one or more of the other current working interest owners in the Orogrande
Project (each an &#147;Orogrande Owner&#148; and collectively, the &#147;Orogrande Owners&#148;). The Company anticipates offering
the Orogrande Owners shares of common stock in exchange for such Orogrande Owner&#146;s respective working interest in the Orogrande
Project. The Company intends to offer the number of shares of common stock necessary such that each participating Orogrande Owner would
own the percentage of common stock then outstanding in proportion to the percentage owned in the working interest of the Orogrande Project.
For illustration purposes, if an Orogrande Owner owns 10% of the working interest of the Orogrande Project, and such Orogrande Owner
elects to participate and accept the Company&#146;s offer of shares of common stock, then such Orogrande Owner will be offered 10% of
the aggregate amount of outstanding shares of common stock. The Company&#146;s decision to enter into these transactions will depend
on ability of the Company and each Orogrande Owner to negotiate and enter into definitive agreements related to such transaction and
the Company&#146;s board of directors receiving an industry-standard fairness opinion from an investment banking firm. One of the Orogrande
Owners is Wolfbone Investments, LLC (&#147;Wolfbone&#148;), an entity controlled by Mr. McCabe. Mr. McCabe owns, directly and indirectly
through entities he owns or controls, 7.75% of the Company&#146;s common stock as of December 31, 2022, which would increase by the
proportionate exchange of working interest for shares of the Company&#146;s common stock if consummated.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:ScheduleOfOtherOwnershipInterestsTextBlock"><p id="xdx_893_eus-gaap--ScheduleOfOtherOwnershipInterestsTextBlock_zFIMau8vPhK6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Orogrande Project ownership as of December 31, 2022, is detailed as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BF_zfU5o2E1C3z7">Schedule
of Orogrande Project Ownership</span></span></p>

<table cellpadding="0" cellspacing="0" id="xdx_305_134_zP4y6jZ2Ddbf" summary="xdx: Disclosure - OIL &amp; NATURAL GAS PROPERTIES (Details 2)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td id="xdx_486_ecustom--WorkingInterestPercentage_dp_zPbrqN9pc5Oe" style="border-bottom: Black 1pt solid; white-space: nowrap; text-align: center">Working Interest</td></tr>
  <tr id="xdx_411_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--UniversityLandsMineralOwnerMember_zo0Bcv3cZ8q6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 74%; text-align: left; text-indent: 0pt; padding-left: 0pt">University Lands - Mineral Owner</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; text-align: right"><ix:nonFraction name="nbh:RevenueInterestPercentage" contextRef="From2023-01-012023-03-31_custom_UniversityLandsMineralOwnerMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">20.000</ix:nonFraction></td><td style="white-space: nowrap; width: 1%; text-align: left">%</td><td style="width: 3%">&#160;</td>
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  <tr id="xdx_416_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--ORRIMagdalenaRoyaltiesLLCAnEntityControlledByGregoryMcCabeMember_zgJLephiTkS9" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt">&#160;</td></tr>
  <tr id="xdx_419_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--ORRIUnrelatedPartyMember_zZx0ZAZwZo9e" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">ORRI - Unrelated Party</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="nbh:RevenueInterestPercentage" contextRef="From2023-01-012023-03-31_custom_ORRIUnrelatedPartyMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0.500</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">%</td><td>&#160;</td>
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  <tr id="xdx_41D_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--HudspethOilCorporationASubsidiaryOfNextBridgeHydrocarbonsIncMember_znSJ1THaLXn8" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc.</td><td>&#160;</td>
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    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31_custom_HudspethOilCorporationASubsidiaryOfNextBridgeHydrocarbonsIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">66.500</ix:nonFraction>%</td></tr>
  <tr id="xdx_415_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--WolfboneInvestmentsLLCAnEntityControlledByGregoryMcCabeMember_zayDKtXRQ4yj" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="nbh:RevenueInterestPercentage" contextRef="From2023-01-012023-03-31_custom_WolfboneInvestmentsLLCAnEntityControlledByGregoryMcCabeMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">18.750</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">%</td><td>&#160;</td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31_custom_WolfboneInvestmentsLLCAnEntityControlledByGregoryMcCabeMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">25.000</ix:nonFraction>%</td></tr>
  <tr id="xdx_417_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--ConversionByNoteHoldersInMarch2020Member_z96fkJHYwSef" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Conversion by Note Holders in March, 2020</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="nbh:RevenueInterestPercentage" contextRef="From2023-01-012023-03-31_custom_ConversionByNoteHoldersInMarch2020Member" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">4.500</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">%</td><td>&#160;</td>
    <td style="text-align: right; text-indent: 0pt; padding-left: 0pt"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31_custom_ConversionByNoteHoldersInMarch2020Member" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">6.000</ix:nonFraction>%</td></tr>
  <tr id="xdx_41C_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--UnrelatedPartyMember_zYcCmMsIv4F" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0pt">Unrelated Party</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="nbh:RevenueInterestPercentage" contextRef="From2023-01-012023-03-31_custom_UnrelatedPartyMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">1.875</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: right; text-indent: 0pt; padding-left: 0pt"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31_custom_UnrelatedPartyMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">2.500</ix:nonFraction>%</td></tr>
  <tr id="xdx_413_20230101__20230331_z6jafKP4OLNe" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt"><span style="display: none">Total</span></td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="nbh:RevenueInterestPercentage" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">100.000</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">%</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: right; text-indent: 0pt; padding-left: 0pt"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">100.000</ix:nonFraction>%</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A2_zAl5dT8PjzLl" style="margin-top: 0; margin-bottom: 0"></p>


<ix:exclude><!-- Field: Page; Sequence: 93 -->
    <div style="border-bottom: Black 2pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Hazel
Project in the Midland Basin in West Texas</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
April 4, 2016, TEI acquired from MPC a 66.66% working interest in approximately 12,000 acres in the Midland Basin. A back-in after payout
of a 25% working interest was retained by MPC and another unrelated working interest owner.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
October 2016, the holders of all of Torchlight&#146;s then-outstanding shares of Series C Preferred Stock (which were issued in July
2016) elected to convert into a total 33.33% working interest in our Hazel Project, reducing TEI&#146;s ownership from 66.66% to a 33.33%
working interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Acquisition
of Additional Interests in Hazel Project</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 30, 2017, Torchlight entered into and closed an Agreement and Plan of Reorganization and a Plan of Merger with an entity which
was wholly owned by Mr. McCabe, which resulted in the acquisition of approximately 40.66% working interest in the 12,000 gross acres,
9,600 net acres, in the Hazel Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Also,
on January 30, 2017, Torchlight entered into and closed a Purchase and Sale Agreement with Wolfbone. Under the agreement, Torchlight
acquired certain of Wolfbone&#146;s Hazel Project assets, including its interest in the Flying B Ranch #1 well and the 40-acre unit
surrounding the well.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the transactions, the Torchlight working interest in the Hazel Project increased by 40.66% to a total ownership of 74%.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
June 1, 2017, Torchlight acquired an additional 6% working interest from unrelated working interest owners increasing its working interest
in the Hazel project to 80%, and an overall net revenue interest of 75%.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Seven
test wells have been drilled on the Hazel Project to capture and document the scientific base in support of demonstrating the production
potential of the property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Option
Agreement with Masterson Hazel Partners, LP</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 13, 2020, the Company&#146;s subsidiaries TEI and Torchlight Hazel (collectively, &#147;Torchlight Subs&#148;) entered into
an option agreement (the &#147;Option Agreement&#148;) with Masterson Hazel Partners, LP (&#147;MHP&#148;) and MPC. Under the agreement,
MHP was obligated to drill and complete, or cause to be drilled and completed, at its sole cost and expense, a new lateral well (the
&#147;Well&#148;) on the Hazel Project, sufficient to satisfy Torchlight Subs&#146;s continuous development obligations on the southern
half of the prospect no later than September 30, 2020. MHP has satisfied this drilling obligation. MHP paid to Torchlight Subs $1,000
as an option fee at the time of execution of the Option Agreement. MHP is entitled to receive, as its sole recourse for the recoupment
of drilling costs, the revenue from production of the Well attributable to Torchlight Subs&#146;s interest until such time as it has
recovered its reasonable costs and expenses for drilling, completing, and operating the well.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
exchange for MHP satisfying the above drilling obligations, Torchlight Subs granted to MHP the exclusive right and option to perform
operations, at MHP&#146;s sole cost and expense, on the Hazel Project sufficient to satisfy Torchlight Subs&#146;s continuous development
obligations on the northern half of the prospect. Because MHP exercised this drilling option and satisfied the continuous development
obligations on the northern half of the prospect, under the terms of the Option Agreement (as amended in September 2020) MHP had the
option to purchase the entire Hazel Project no later than May 31, 2021. Such purchase would be under the terms of a form of Purchase
and Sale Agreement included as an exhibit to the Option Agreement, at an aggregate purchase price of$12,690,704 for approximately 9,762
net mineral acres, and not less than 74% net revenue interest (approximately $1,300 per net mineral acre). MHP declined to exercise the
Option in 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Hunton
Play, Central Oklahoma</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, the Company is producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove.</span></p>

</ix:nonNumeric><p id="xdx_81E_ze33L55Jk6L2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>



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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
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<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:RelatedPartyTransactionsDisclosureTextBlock"><p id="xdx_806_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zCWxGUGl4le4" style="margin-top: 0; margin-bottom: 0"></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>6.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_82A_zP77umgD2gj1">RELATED
PARTY BALANCES</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022 and December 31, 2021, the Company had a balance of $<span id="xdx_90D_ecustom--AccountsReceivableRelatedPartiesCurrent1_iI_c20221231_zCzys9DVy2dk"><ix:nonFraction name="nbh:AccountsReceivableRelatedPartiesCurrent1" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">177,519</ix:nonFraction></span> and $<span id="xdx_90D_ecustom--AccountsReceivableRelatedPartiesCurrent1_iI_c20211231_zYDFNTBHjDMh"><ix:nonFraction name="nbh:AccountsReceivableRelatedPartiesCurrent1" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">163,366</ix:nonFraction></span>, respectively, for an account receivable
due from MPC, a shareholder of the Company, for amounts advanced related to the Orogrande development cost sharing arrangement agreed
to in connection with the acquisition of the Orogrande working interests in 2014.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 22, 2022, the Company issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe
(the &#147;2022 Note&#148;). The 2022 Note bears interest at 5% per annum, computed on the basis of a 365-day year, and matures on
June 21, 2023 (the &#147;2022 Note Maturity Date&#148;); provided, however, if we raise $30 million or more in capital through debt
or equity or a combination thereof by the 2022 Note Maturity Date, the 2022 Note Maturity Date will be extended to October 3, 2023. The
outstanding principal of the 2022 Note, together with all accrued interest thereon, becomes due on June 21, 2023. The revolving commitment
under the 2022 Note expires on 2022 Note Maturity Date. As of December 31, 2022, we had $2 million in principal amount outstanding and
$18 million of available borrowings under the 2022 Note.</span></p>

</ix:nonNumeric><p id="xdx_81F_zzkjOPVQm3ae" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock"><p id="xdx_80B_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zjz2StTRPoNd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>7.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_822_zBX8bXTHiPy7">COMMITMENTS
AND CONTINGENCIES</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal
Matters</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 30, 2020, the Company&#146;s wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
(&#147;Cordax&#148;). The suit, <i>Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies</i>,
was filed in the 189<sup>th</sup> Judicial District Court of Harris County, Texas. The suit seeks the recovery of approximately $1.4
million in costs incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located
in the Orogrande Field. Working interest owner Wolfbone is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral
lien in the amount of $104,500 against the Orogrande Field and has sued the operator and counterclaimed against Hudspeth for breach of
contract, seeking the same amount as the lien. Meta, as the Company&#146;s parent at the time, determined to add the manufacturer of
one of the tool components that it contends was one of the causes of the tool failure. It was later disclosed that Cordax is the subsidiary
of a Canadian parent company, who has also been added to the case. Cordax&#146;s current Chairman of the Board filed a special appearance
after being served with a citation, alleging that he was a Canadian citizen with no meaningful ties to Texas. After discovery was conducted
on this issue, a nonsuit without prejudice for this defendant was filed, dismissing him from the case. The remaining parties attended
mediation on June 15, 2022, that was unsuccessful in resolving the case. Discovery is ongoing. The Company has presented several of its
witnesses for deposition and is preparing to depose Cordax&#146;s key fact witnesses. The case is set for trial in October 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in
the amount of $104,500.01 and recover related attorney&#146;s fees. The foreclosure action, <i>Datalog LWT Inc. d/b/a Cordax Evaluation
Technologies v. Torchlight Energy Resources, Inc</i>., was filed in the 205<sup>th</sup> Judicial District Court of Hudspeth County,
Texas. The Company is contesting the lien in good faith and filed a Plea in Abatement on May 10, 2021, seeking a stay in the Hudspeth
County lien foreclosure case pending final disposition of the related case currently pending in Harris County, Texas. The Company is
required to indemnify Meta in connection with this matter pursuant to the terms of the Distribution Agreement with Meta.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 14, 2022, a shareholder derivative action was filed in the U.S. District Court for the Eastern District of New York captioned
<i>Hines v. Palikaras, et al.</i>, No. 1:22-cv-00248. The complaint names as defendants certain of Meta&#146;s current officers and
directors, certain former Torchlight officers and directors, and Meta (as nominal defendant). The complaint, purportedly brought on behalf
of Meta, asserts claims under Section 14(a) of the Exchange Act, contribution claims under Sections 10(b) and 21D of the Exchange Act,
and various state law claims such as breach of fiduciary duties and unjust enrichment. The complaint seeks, among other things, unspecified
compensatory damages in favor of Meta, certain corporate governance related actions, and an award of costs and expenses to the derivative
plaintiff, including attorneys&#146; fees. On March 9, 2022, the Court entered a stipulated order staying this action until there is
a ruling on a motion to dismiss in the Securities Class Action.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Environmental
Matters</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to contingencies as a result of environmental laws and regulations. Present and future environmental laws and regulations
applicable to the Company&#146;s operations could require substantial capital expenditures or could adversely affect its operations
in other ways that cannot be predicted at this time. As of December 31, 2022, and December 31, 2021, no amounts had been recorded because
no specific liability has been identified that is reasonably probable of requiring the Company to fund any future material amounts.</span></p>

</ix:nonNumeric><p id="xdx_81A_zSTfP1uBGkmg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>



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<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p id="xdx_806_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_zAvFtyde2LX7" style="margin-top: 0; margin-bottom: 0"></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>8.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_823_zPVTuITgasih">STOCKHOLDERS&#146;
EQUITY</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Next
Bridge Hydrocarbons, Inc. has preferred and common stock both at a par value of $<span id="xdx_90D_eus-gaap--CommonStockParOrStatedValuePerShare_iI_c20221231_zxMA917yZCS1"><span id="xdx_901_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20221231_z5dgnTUhGnp4"><ix:nonFraction name="us-gaap:CommonStockParOrStatedValuePerShare" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0001</ix:nonFraction></ix:nonFraction></span></span>. As of December 31, 2022, the Company has issued
<span id="xdx_903_eus-gaap--CommonStockSharesIssued_iI_c20221231_zzIJqRf59bT9"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">165,472,241</ix:nonFraction></span> shares of common stock and -<span id="xdx_90C_eus-gaap--PreferredStockSharesIssued_iI_c20221231_z412C7us4Su7"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">0</ix:nonFraction></span>- shares of preferred stock.</span></p>

</ix:nonNumeric><p id="xdx_816_zu6pysqS6IHb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock"><p id="xdx_807_eus-gaap--IncomeTaxDisclosureTextBlock_z3Xf1GlQ80uh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>9.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_823_zO65ZT0y57k1">INCOME
TAXES</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recorded no income tax provision at December 31, 2022, and December 31, 2021, because of losses incurred.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions
in which it operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter
in which they occur. The Company recorded no income tax expense for the successor period and for the predecessor period, because the
Company expects to incur a tax loss in the current year. Similarly, no income tax expense was recognized for the year ended December
31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">The Company had a net deferred tax asset related
to federal net operating loss carryforwards of $<span id="xdx_90B_eus-gaap--OperatingLossCarryforwards_iI_c20221231_znz6cuzCDS1c"><ix:nonFraction name="us-gaap:OperatingLossCarryforwards" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">25,935,753</ix:nonFraction></span>, $<span id="xdx_904_eus-gaap--OperatingLossCarryforwards_iI_c20221214_zsiZeOIWYTAc"><ix:nonFraction name="us-gaap:OperatingLossCarryforwards" contextRef="AsOf2022-12-14" format="ixt:numdotdecimal" decimals="0" unitRef="USD">65,730,932</ix:nonFraction></span> and $<span id="xdx_906_eus-gaap--OperatingLossCarryforwards_iI_c20211231_zcJlR5voGWVb"><ix:nonFraction name="us-gaap:OperatingLossCarryforwards" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">59,481,861</ix:nonFraction></span> at December 31, 2022, December 14, 2022 and
December 31, 2021, respectively. The federal net operating loss carryforward will begin to expire in 2034. Realization of the
deferred tax asset is dependent, in part, on generating sufficient taxable income prior to expiration of the loss carryforwards. The
Company has placed a 100% valuation allowance against the net deferred tax asset because future realization of these assets is not
assured.&#160;</p>

</ix:nonNumeric><p id="xdx_81D_zMoCTnEXwMhb" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="nbh:NotesPayableRelatedPartiesTextBlock"><p id="xdx_807_ecustom--NotesPayableRelatedPartiesTextBlock_zHSK1whZMvYj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>10.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_826_zWbZiV2F1uv6">NOTES
PAYABLE, RELATED PARTIES</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2021, the Company entered into a note payable with Meta its former parent to borrow up to $<span id="xdx_90F_eus-gaap--NotesPayable_iI_pp0p0_dm_c20211231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zDlJuSn9FNH2"><ix:nonFraction name="us-gaap:NotesPayable" contextRef="AsOf2021-12-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">15</ix:nonFraction> million</span>. On October 1, 2021, the Company
issued the 2021 Note, which bears interest at <span id="xdx_90C_eus-gaap--DebtInstrumentInterestRateDuringPeriod_c20230101__20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zsQhj9nYgPVb"><ix:nonFraction name="us-gaap:DebtInstrumentInterestRateDuringPeriod" contextRef="From2023-01-012023-03-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">8</ix:nonFraction>%</span> per annum, computed on the basis of a 360-day year, and matures March 31, 2023 (the
&#147;2021 Note Maturity Date&#148;); provided, however, if the Company raises $30 million or more in capital through debt or equity
or a combination thereof by the 2021 Note Maturity Date, the 2021 Note Maturity Date will be extended to September 30, 2023, and the
outstanding principal of the 2021 Note will amortize in six equal, monthly installments. If an event of default has occurred and is continuing,
interest on the 2021 Note may accrue at the default rate of 12% per annum. The outstanding principal of the 2021 Note, together with
all accrued interest thereon, becomes due on the 2021 Note Maturity Date. The 2021 Note includes a restrictive covenant that, subject
to certain exceptions and qualifications, restricts the Company&#146;s ability to merge or consolidate with another person or entity,
or sell or transfer all or substantially all of its assets, unless the Company is the surviving entity or the successor entity assumes
all of obligations under the 2021 Note. The 2021 Note is collateralized by certain shares of common stock in Meta held by one of its
stockholders, Mr. McCabe, and by a lien on a 25% interest in the Orogrande Project owned by Wolfbone, an affiliate of Mr. McCabe.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
balance on the 2021 Note as of December 31, 2022 and December 31, 2021 is $<span id="xdx_907_eus-gaap--LineOfCreditFacilityCurrentBorrowingCapacity_iI_pp0p0_dm_c20221231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zAd1OJxuzNL2"><ix:nonFraction name="us-gaap:LineOfCreditFacilityCurrentBorrowingCapacity" contextRef="AsOf2022-12-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">20</ix:nonFraction> million</span> and $<span id="xdx_90A_eus-gaap--LineOfCreditFacilityCurrentBorrowingCapacity_iI_pp0p0_dm_c20211231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_znsVBKxJ2751"><ix:nonFraction name="us-gaap:LineOfCreditFacilityCurrentBorrowingCapacity" contextRef="AsOf2021-12-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">12.5</ix:nonFraction> million</span>, respectively. The Company incurred
interest of $<span id="xdx_908_eus-gaap--InterestPayableCurrent_iI_c20211231_zCJkf1VzmXAi"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">208,889</ix:nonFraction></span> for the year ended December 31, 2021 and an additional $<span id="xdx_902_eus-gaap--InterestPayableCurrent_iI_c20221231__srt--StatementScenarioAxis__custom--SuccessorMember_zEY7kUYNDyj1"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">74,210</ix:nonFraction></span> for the successor period and $<span id="xdx_906_eus-gaap--InterestPayableCurrent_iI_c20221214__srt--StatementScenarioAxis__custom--PredecessorMember_zEpkwkJH3uO1"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,289,328</ix:nonFraction></span> for the predecessor
period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the terms of the Arrangement Agreement that governed the merger transaction between Torchlight and Meta in June 2021 the oil and natural
gas assets were to be sold or spun out from Meta and the costs of any sale or spin-off incurred by Meta were to be borne the then-existing
shareholders of Torchlight. The amount of the reimbursement payable to Meta in connection with the Spin-Off is $2,573,724 which is to be added to the principal amount of the 2022 Note payable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 2, 2022, the Company entered into a loan agreement with Meta, as lender (the &#147;Loan Agreement&#148;) that would govern
prior loan amounts advanced to the Company from Meta. As of August 11, 2022, and August 29, 2022, the Company borrowed an additional
$<span id="xdx_90B_eus-gaap--NotesPayable_iI_pp0p0_dm_c20220811__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--LoanAgreementMember_zNYP2QmeAQri"><ix:nonFraction name="us-gaap:NotesPayable" contextRef="AsOf2022-08-11_custom_MetaMaterialsIncMember_custom_LoanAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">1.2</ix:nonFraction> million</span> and $<span id="xdx_905_eus-gaap--NotesPayable_iI_pp0p0_dm_c20220829__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--LoanAgreementMember_zSsfQGIH1i3j"><ix:nonFraction name="us-gaap:NotesPayable" contextRef="AsOf2022-08-29_custom_MetaMaterialsIncMember_custom_LoanAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">1.46</ix:nonFraction> million</span>, respectively, representing the remaining amount available for borrowing under the Loan Agreement and
resulting in a total of $5 million principal amount outstanding related to the Loan Agreement, the proceeds of which were used for working
capital and general corporate purposes. The term loans under the Loan Agreement bear interest at a per annum rate equal to 8% and mature
on March 31, 2023 (the &#147;Maturity Date&#148;); provided, however, if the Company raises $30 million or more in capital through debt
or equity, or a combination thereof by the Maturity Date, the Maturity Date will be extended to October 3, 2023 and the term loan would
be amortized in six equal monthly installments. The Loan Agreement includes customary representations and covenants that, subject to
exceptions and qualifications, restrict our ability to do certain things, such as: engage in mergers, acquisitions, and asset sales;
transact with affiliates; undergo a change in control; incur additional indebtedness; incur liens; make loans and investments; declare
dividends or redeem or repurchase equity interests; and enter into certain restrictive agreements. In addition, the Loan Agreement contains
customary events of default, mandatory prepayment events and affirmative covenants, including, without limitation, covenants regarding
the payment of taxes and other obligations, maintenance of insurance, maintenance of our material properties, reporting requirements,
compliance with applicable laws and regulations, and formation or acquisition of new subsidiaries.</span></p>







<ix:exclude><!-- Field: Page; Sequence: 96 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 21, 2022, the Company entered into that certain Agreement and Plan of Merger (the &#147;Merger Agreement&#148;) with Hudspeth,
Wolfbone, MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such
leases, pooling and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in Orogrande Project
will be transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations
(as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance
of 56,297,638 shares of Company common stock to Mr. McCabe (such series of transactions collectively, the &#147;Merger&#148;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Merger is to be completed in accordance with the Texas Business Organizations Code, whereby (a) the Company will form NBH MergeCo, LLC
with the State of Texas (&#147;MergeCo&#148;) in order to cause Hudspeth to assign all of its rights under the Merger Agreement to
MergeCo and MergeCo will assume Hudspeth&#146;s obligations under the Merger Agreement, (b) Hudspeth (or MergeCo, as its assignee),
Wolfbone and MPC shall merge with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone shall become a direct and wholly-owned
subsidiary of the Company. The closing of the transactions contemplated by the Merger Agreement are subject to the satisfaction of certain
customary closing conditions, including filing and acceptance of the certificate of merger by the Secretary of State of the State of
Texas.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note in the principal amount of up to $20 million
in favor of Mr. McCabe. The Company is entitled to request advances under the 2022 Note in a minimum principal amount of $100,000 each.
Mr. McCabe is the largest shareholder of the Company&#146;s common stock.&#160;As of December 31, 2022 the Company had drawn $<span id="xdx_908_ecustom--NotesPayableRelatedPartiesClassifiedCurrent1_iI_dm_c20221231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GregoryMcCabeMember_zlJ4sRZHujW1" title="Notes Payable, Related Party"><ix:nonFraction name="nbh:NotesPayableRelatedPartiesClassifiedCurrent1" contextRef="AsOf2022-12-31_custom_GregoryMcCabeMember" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">2</ix:nonFraction> million</span>
on the 2022 Note.</span></p>

</ix:nonNumeric><p id="xdx_819_zvoYarFLsPw6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:AssetRetirementObligationDisclosureTextBlock"><p id="xdx_80B_eus-gaap--AssetRetirementObligationDisclosureTextBlock_zTWTOGLcwHa6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>11.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_825_zdqH0oa2YRp">ASSET
RETIREMENT OBLIGATIONS</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:ScheduleOfAssetRetirementObligationsTableTextBlock"><p id="xdx_89B_eus-gaap--ScheduleOfAssetRetirementObligationsTableTextBlock_z7bBhUaWFXt" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a reconciliation of the asset retirement obligations liability through December 31, 2022:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BF_zOEhDFNO4uya">Schedule
of Asset Retirement Obligations Liability</span></span></span></p>


<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Predecessor</td><td>&#160;</td>
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  <tr id="xdx_402_eus-gaap--AssetRetirementObligationsNoncurrent_iS_zUWqREZPQceb" style="vertical-align: bottom; background-color: White">
    <td style="width: 87%; text-indent: 0pt; padding-left: 0pt">Asset retirement obligations - December 31, 2021</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right"><ix:nonFraction name="us-gaap:AssetRetirementObligationsNoncurrent" contextRef="AsOf2021-12-31_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">21,937</ix:nonFraction></td><td style="white-space: nowrap; width: 1%; text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--AccretionExpense_zZ5HzUoN7Xn3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0.45in">Accretion expense</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0566">&#8212;</span></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40F_eus-gaap--AssetRetirementObligationsNoncurrent_iE_zam3LH745Tn1" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt">Asset retirement obligations - December 14, 2022</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="us-gaap:AssetRetirementObligationsNoncurrent" contextRef="AsOf2022-12-14_custom_PredecessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">21,937</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: 0pt; padding-left: 0pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
</table>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-indent: 0pt; padding-left: 0pt; width: 87%">Successor</td><td style="width: 3%">&#160;</td>
    <td style="text-align: left; width: 1%">&#160;</td><td id="xdx_498_20221215__20221231__srt--StatementScenarioAxis__custom--SuccessorMember_z4XBqhbWDZtc" style="text-align: right; width: 8%">&#160;</td><td style="white-space: nowrap; text-align: left; width: 1%">&#160;</td></tr>
  <tr id="xdx_40E_eus-gaap--AssetRetirementObligationRevisionOfEstimate_z5bEB6RoQqA1" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0pt; padding-left: 0pt">Estimated liabilities recorded</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction name="us-gaap:AssetRetirementObligationRevisionOfEstimate" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">245,774</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr id="xdx_40C_eus-gaap--AccretionExpense_zZMe2lH5qEa5" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 0.45in">Accretion expense</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="us-gaap:AccretionExpense" contextRef="From2022-12-152022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,092</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40B_eus-gaap--AssetRetirementObligationsNoncurrent_iE_zEI9CnMuLkFd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt; text-indent: 0pt; padding-left: 0pt">Asset retirement obligations - December 31, 2022</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="us-gaap:AssetRetirementObligationsNoncurrent" contextRef="AsOf2022-12-31_custom_SuccessorMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">246,866</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A8_zp3GrpQTDaG" style="margin-top: 0; margin-bottom: 0"></p>

</ix:nonNumeric><p id="xdx_811_zSgl676Xgu82" style="margin-top: 0; margin-bottom: 0"></p>


<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="us-gaap:SubsequentEventsTextBlock"><p id="xdx_809_eus-gaap--SubsequentEventsTextBlock_zCfHmEfpPli9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>12.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_824_zWKuFwgLNNf">SUBSEQUENT
EVENTS</span></b></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
met our drilling obligations under the DDU Agreement to drill five new wells in the Orogrande Project in advance of the March 31, 2023
deadline under University Lands lease requirement. The data collected from these five wells, in addition to the five wells drilled in
2021, confirmed that there are at least five potential distinct reservoirs under our acreage. Also, our operations team deployed a new
mist drilling solution which increased hole stability, which we believe will result in meaningful cost savings for additional wells drilled
in the Orogrande Project. While these wells may have potential to produce hydrocarbons to sell commercially in the future, we have no
immediate plans to deploy the additional capital necessary to sell production from these wells to third parties. Instead, we plan to
use the results from these wells to determine our drilling plans for future wells, including reservoir locations, target depths and designated
acreage, in the Orogrande Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On March 31, 2023, we entered into an amendment to the 2021 Note and an amendment to Loan Agreement
in order to extend each of the 2021 Maturity Date and the Maturity Date respectively from March 31, 2023 to October 3, 2023. Such amendments
also removed the provisions allowing for extensions of the 2021 Maturity Date and the Maturity Date in the event the Company raised $30
million or more in capital through debt or equity or a combination thereof by March 31, 2023.</span></p>

</ix:nonNumeric><p id="xdx_816_zgiMUZwOe7db" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: left"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>



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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"></p>

<p id="xdx_04A_c20230101__20230331_zo9ucpKulqlb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-size: 10pt">&#160;</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="c003_v1"></span>CONSOLIDATED
BALANCE SHEETS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" id="xdx_30E_111_ziARelycuShg" summary="xdx: Statement - CONSOLIDATED BALANCE SHEETS" style="font: 11pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="3" id="xdx_498_20230331_zrLNx9TtGDP8" style="text-align: center"><span style="font-size: 10pt">March 31,</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="3" id="xdx_498_20221231_zhP78X2sjoag" style="text-align: center"><span style="font-size: 10pt">December 31,</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><span style="font-size: 10pt">2023</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center"><span style="font-size: 10pt">2022</span></td></tr>
  <tr id="xdx_40D_eus-gaap--AssetsAbstract_iB_zjtrfiN5PfL6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: center; padding-left: 8.65pt"><span style="font-size: 10pt">ASSETS</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_408_eus-gaap--AssetsCurrentAbstract_i01B_z7ss3uC3W8N2" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_406_eus-gaap--CashAndCashEquivalentsAtCarryingValue_i02I_maACzBZO_z3XCzGLA9Ui6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_407_ecustom--AccountsReceivableRelatedPartiesCurrent1_i02I_maACzBZO_zZbsfcWGA1rb" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_400_ecustom--PrepaymentsDevelopmentCosts_i02I_maACzBZO_z0xai5qhHe2c" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Prepayments - development
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0590">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr id="xdx_40D_eus-gaap--PrepaidExpenseCurrent_i02I_maACzBZO_zSQPgpPmznvj" style="vertical-align: bottom; background-color: White">
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    expenses</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:PrepaidExpenseCurrent" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">51,183</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:PrepaidExpenseCurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">62,300</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40A_eus-gaap--AssetsCurrent_i02TI_mtACzBZO_maAzfma_zYQ2mVIPYZW7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt"><span style="font-size: 10pt">Total current assets</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:AssetsCurrent" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">5,530,350</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:AssetsCurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">959,117</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_407_eus-gaap--OilAndGasPropertyFullCostMethodNet_i01I_maAzfma_z88Ko44AOSMb" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Oil and natural gas properties,
    net</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:OilAndGasPropertyFullCostMethodNet" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">88,626,670</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:OilAndGasPropertyFullCostMethodNet" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">79,695,928</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_409_eus-gaap--OtherAssetsNoncurrent_i01I_maAzfma_zstLnvLeV2Mk" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1pt; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Other
    assets</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:OtherAssetsNoncurrent" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">80,179</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:OtherAssetsNoncurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">80,179</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_404_eus-gaap--Assets_i01TI_mtAzfma_zDIDGAPaboib" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: -8.65pt; padding-left: 34.6pt"><span style="font-size: 10pt">TOTAL
    ASSETS</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:Assets" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">94,237,199</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:Assets" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">80,735,224</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: center; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40F_eus-gaap--LiabilitiesAndStockholdersEquityAbstract_iB_zZAAhdMTCdQ" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: center; padding-left: 8.65pt"><span style="font-size: 10pt">LIABILITIES AND STOCKHOLDERS&#8217;
    EQUITY</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_405_eus-gaap--LiabilitiesCurrentAbstract_i01B_ztVGOaJeouo6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Current liabilities:</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_403_eus-gaap--AccountsPayableCurrent_i02I_maLCzCYc_zpbm9w0zO24g" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Accounts payable</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:AccountsPayableCurrent" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">5,375,670</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">$</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:AccountsPayableCurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">3,891,649</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_402_ecustom--AccountsAndNotesPayable_i02I_maLCzCYc_zYUbmsw4Rlec" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Accounts and Note Payable -
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="nbh:AccountsAndNotesPayable" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">21,589,362</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="nbh:AccountsAndNotesPayable" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">22,573,724</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40F_ecustom--NotesPayableRelatedPartiesClassifiedCurrent1_i02I_maLCzCYc_zQtKQnalF05j" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Note Payable - Related Party</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="nbh:NotesPayableRelatedPartiesClassifiedCurrent1" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">16,875,000</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="nbh:NotesPayableRelatedPartiesClassifiedCurrent1" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">2,000,000</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40F_ecustom--AccountsPayableRelatedPartiesCurrent1_i02I_maLCzCYc_zYLfZyyxwjq7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Related party payables</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0623">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0624">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40B_eus-gaap--InterestPayableCurrent_i02I_maLCzCYc_zuAEeU0SzTq5" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1pt; text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Accrued
    interest payable</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,935,084</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,571,336</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_400_eus-gaap--LiabilitiesCurrent_i02TI_mtLCzCYc_maLzHkQ_zrrWJ5YPIkYg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt"><span style="font-size: 10pt">Total current liabilities</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:LiabilitiesCurrent" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">45,775,115</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:LiabilitiesCurrent" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">30,036,709</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40E_eus-gaap--AssetRetirementObligationsNoncurrent_i01I_maLzHkQ_zc00goQiEXd4" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
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  <tr id="xdx_405_eus-gaap--AdditionalPaidInCapital_i02I_maSEzbky_zqMGBwJwLd09" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Additional paid-in capital</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Outstanding stock options</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr id="xdx_400_eus-gaap--RetainedEarningsAccumulatedDeficit_i02I_maSEzbky_z9lH7h7u6dYe" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="padding-bottom: 1pt; text-align: left; text-indent: -8.65pt; padding-left: 34.6pt"><span style="font-size: 10pt">Total
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    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">48,209,353</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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  <tr id="xdx_40C_eus-gaap--LiabilitiesAndStockholdersEquity_i01TI_mtLASEzPxW_z3CbnCIJwzP6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: -8.65pt; padding-left: 34.6pt"><span style="font-size: 10pt">TOTAL
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:LiabilitiesAndStockholdersEquity" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">94,237,199</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:LiabilitiesAndStockholdersEquity" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">80,735,224</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  </table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these statements.</span></p>


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    <div style="border-bottom: Black 2pt solid; margin-top: 12pt; margin-bottom: 6pt"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></p></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="c004_v1"></span>CONSOLIDATED
STATEMENTS OF OPERATIONS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" id="xdx_307_113_zZ5GUCaAy4C8" summary="xdx: Statement - CONSOLIDATED STATEMENTS OF OPERATIONS" style="font: 11pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="3" id="xdx_49D_20230101__20230331_zU89Thd4qML9" style="text-align: center"><span style="font-size: 10pt">Three Months</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="3" style="text-align: center"><span style="font-size: 10pt">Ended</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td colspan="3" style="text-align: center"><span style="font-size: 10pt">Ended</span></td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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    <td style="width: 66%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Oil and natural
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40A_eus-gaap--OperatingExpensesAbstract_iB_z4lV55PNUfhi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_404_eus-gaap--OperatingLeaseExpense_i01_maOEzB2t_ziHBJekMpCB1" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_405_eus-gaap--ProductionTaxExpense_i01_maOEzB2t_z14hZYtX7Zug" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Production taxes</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr id="xdx_403_eus-gaap--GeneralAndAdministrativeExpense_i01_maOEzB2t_zJk27dv2eeCf" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_40B_eus-gaap--DepreciationAndAmortization_i01_maOEzB2t_zbbXZGfk6ph5" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0700">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0701">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_401_eus-gaap--OperatingExpenses_iT_mtOEzB2t_msILFCOz4tK_zvFh6CxRnl6a" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt"><span style="font-size: 10pt">Total operating expenses</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:OperatingExpenses" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">2,398,376</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_408_eus-gaap--NonoperatingIncomeExpenseAbstract_iB_zGN6kxZDUFOk" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt"><b>Other income (expense)</b></span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_401_eus-gaap--InterestExpense_i01_msNIEz5gP_zpACM0UYcjW4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Interest expense</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0709">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0710">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_408_ecustom--FranchiseTax_i01_msNIEz5gP_ztly7ofxrXoc" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Franchise tax</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0712">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0713">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_401_eus-gaap--InterestAndDividendIncomeOperating_i01_maNIEz5gP_z97wZbQHG8Ni" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1pt; text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Interest
    income</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:InterestAndDividendIncomeOperating" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:InterestAndDividendIncomeOperating" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">323</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_408_eus-gaap--NonoperatingIncomeExpense_i01T_mtNIEz5gP_maILFCOz4tK_zHREx6mVLA23" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 34.6pt"><span style="font-size: 10pt">Total expense, net</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:NonoperatingIncomeExpense" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:NonoperatingIncomeExpense" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">323</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_407_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_iNT_di_maNILzFSR_mtILFCOz4tK_zLyssi3j3E46" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt"><b>Loss before income taxes</b></span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,387,451</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">836,035</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_40B_eus-gaap--IncomeTaxExpenseBenefit_msNILzFSR_zkEesIuiOGFa" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1pt; text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Provision
    for income taxes</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0724">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0725">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_405_eus-gaap--NetIncomeLoss_iNT_di_mtNILzFSR_zujF9uv2o9nh" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Net
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    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt"><b>$</b></span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><b><ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,387,451</ix:nonFraction></b></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt"><b>&#160;</b></span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt"><b>&#160;</b></span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt"><b>$</b></span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><b><ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">836,035</ix:nonFraction></b></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_402_ecustom--EarningsPerShareBasicAndDiluted1Abstract_iB_zaeekCCJQ4eg" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Loss per common share:</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_402_ecustom--EarningsPerShareBasicAndDiluted1_i01_zekqcUJHB2fj" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these statements.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="c005_v1"></span>CONSOLIDATED
STATEMENTS OF STOCKHOLDERS&#146; EQUITY</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" id="xdx_301_114_zbAb21KzP3N" summary="xdx: Statement - CONSOLIDATED STATEMENTS OF SHAREHOLDERS&apos; EQUITY" style="font: 11pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center"><span style="font-size: 10pt">&#160;</span></td><td style="font-size: 10pt; padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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    <td style="text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#8212;&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0750">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0753">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:ProceedsFromContributionsFromParent" contextRef="From2022-01-012022-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">317,792</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_435_c20220101__20220331_eus-gaap--NetIncomeLoss_zdel80Tw3W64" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1pt; text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Net loss</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#8212;&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0756">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0757">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0758">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2022-01-012022-03-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">836,035</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_436_c20220101__20220331_eus-gaap--StockholdersEquity_iE_zVSlcGkCrdtb" style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid"><span style="font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr id="xdx_432_c20230101__20230331_eus-gaap--ProceedsFromIssuanceOrSaleOfEquity_zM8QAgrxLDH5" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Issuance of stock options</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0777">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0778">&#8212;</span>&#160;&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
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  <tr id="xdx_437_c20230101__20230331_eus-gaap--NetIncomeLoss_zbUhWlCykbbd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1pt; text-align: left; text-indent: -8.65pt; padding-left: 17.3pt"><span style="font-size: 10pt">Net loss</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">&#8212;&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0783">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0784">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl0785">&#8212;</span>&#160;&#160;</span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 1pt solid; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 1pt solid; text-align: right"><span style="font-size: 10pt">(<ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2023-01-012023-03-31_us-gaap_RetainedEarningsMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,387,451</ix:nonFraction></span></td><td style="padding-bottom: 1pt; text-align: left"><span style="font-size: 10pt">)</span></td><td style="padding-bottom: 1pt"><span style="font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td><span style="font-size: 10pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 10pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  <tr id="xdx_439_c20230101__20230331_eus-gaap--StockholdersEquity_iE_zWSraIGqcpA4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt; font-weight: bold; text-indent: -8.65pt; padding-left: 8.65pt"><span style="font-size: 10pt">Balance,
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    <td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2023-03-31_custom_StockOptionOutstandingMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">145,155</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt">(<ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2023-03-31_us-gaap_RetainedEarningsMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">3,297,989</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">)</span></td><td style="padding-bottom: 2.5pt"><span style="font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:StockholdersEquity" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">48,209,353</ix:nonFraction></span></td><td style="padding-bottom: 2.5pt; text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  </table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these statements.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="c006_v1"></span>CONSOLIDATED
STATEMENTS OF CASH FLOWS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 300pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 11pt"></span></p>

<table cellpadding="0" cellspacing="0" id="xdx_304_112_zuItbzx9Ldf5" summary="xdx: Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: center"></td><td style="font-weight: bold; padding-bottom: 1pt"></td>
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    <td style="font-weight: bold; text-align: center"></td>
    <td style="font-weight: bold; text-align: center"></td>
    <td style="font-weight: bold; text-align: center"></td>
    <td id="xdx_49D_20220101__20220331_zwDbN23pggT3" style="font-weight: bold; text-align: center"></td>
    <td style="font-weight: bold; text-align: center"></td></tr>
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 11pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these statements.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="c007_v1"></span>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>March&#160;31,
2023</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(Unaudited)</b></span></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:NatureOfOperations"><p id="xdx_801_eus-gaap--NatureOfOperations_zFM0xAi0c0ej" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></span></p>
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_820_z2afnat4eyg8">NATURE
OF BUSINESS</span></b></span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Next
Bridge Hydrocarbons, Inc. (the &#147;Company&#148;) was incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed
its name to Next Bridge Hydrocarbons, Inc. pursuant to its Amended and Restated Articles of Incorporation filed on June 30, 2022. The
Company spun off from Meta Materials, Inc. (&#147;Meta&#148;) on December 14, 2022, resulting in the Company becoming an independent
company (the &#147;Spin-Off&#148;). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Meta. Meta became the parent
of the Company&#146;s subsidiaries in June 2021 in a merger transaction with Torchlight Energy Resources, Inc. (&#147;Torchlight&#148;),
the previous parent of the subsidiaries and developer of the properties from their inception up to June 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company&#146;s primary focus has been the development of interests in an oil and natural gas project the Company
holds in the Orogrande Basin in West Texas in Hudspeth County, Texas (the &#147;Orogrande Project&#148;). In addition, the Company
has minor interests in the Eastern edge of the Midland Basin in Texas (the &#147;Hazel Project&#148;), and two minor well interests
in the Hunton wells located in Oklahoma (the &#147;Oklahoma Properties&#148;). The Company currently has six full-time employees, and
the Company employs consultants for various roles as needed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company operates its business through four wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation (&#147;TEI&#148;),
Hudspeth Oil Corporation, a Texas corporation (&#147;Hudspeth&#148;), Torchlight Hazel, LLC, a Texas limited liability company (&#147;Torchlight
Hazel&#148;), and Hudspeth Operating, LLC, a Texas limited liability company and wholly owned subsidiary of Hudspeth (&#147;Hudspeth
Operating&#148;). All intercompany transactions have been eliminated in the consolidated financial statements.</span></p>

</ix:nonNumeric><p id="xdx_81F_zqtRofGvoQnk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:SubstantialDoubtAboutGoingConcernTextBlock"><p id="xdx_802_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_zUdpWj7iNVXd" style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_82B_zpDwiDWXdD6f">GOING
CONCERN</span></b></span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
March 31, 2023, the Company had not yet achieved profitable operations. The Company had a net loss of $<span id="xdx_904_eus-gaap--NetIncomeLoss_iN_di_c20230101__20230331_z7rw0tIQWfXj"><ix:nonFraction name="us-gaap:NetIncomeLoss" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="USD">2,387,451</ix:nonFraction></span> for the three months
ended March 31, 2023. The Company expects to incur further losses in the development of its business. The Company had a working capital
deficit as of March 31, 2023 of $<span id="xdx_90F_ecustom--WorkingCapitalDeficit_iI_c20230331_zDOBxENonmpb"><ix:nonFraction name="nbh:WorkingCapitalDeficit" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">40,244,765</ix:nonFraction></span>. These conditions raise substantial doubt about the Company&#146;s ability to continue as
a going concern.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#146;s ability to continue as a going concern is dependent on its ability to generate future profitable operations and/or to
obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due. Management&#146;s plan to address the Company&#146;s ability to continue as a going concern includes: (1) obtaining debt or equity
funding from private placement, institutional, or public sources; (2) obtaining loans from financial institutions, where possible, or (3)
participating in joint venture transactions with third parties. Although management believes that it will be able to obtain the necessary
funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods
will prove successful.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements have been prepared assuming that the Company will continue as a going concern and therefore, the financial
statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or
the amount and classifications of liabilities that may result from the outcome of this uncertainty.</span></p>

</ix:nonNumeric><p id="xdx_812_zevZ5GN1AAd6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:SignificantAccountingPoliciesTextBlock"><p id="xdx_80A_eus-gaap--SignificantAccountingPoliciesTextBlock_zHLSoakXhLc4" style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>3.</b></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_824_ztOXX11ur02k">SIGNIFICANT
ACCOUNTING POLICIES</span></b></span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the
United States of America. Accounting principles followed and the methods of applying those principles, which materially affect the determination
of financial position, results of operations and cash flows are summarized below:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:UseOfEstimates"><p id="xdx_848_eus-gaap--UseOfEstimates_zbnfSLcQZNxk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_861_zUsr410yHw37">Use
of estimates</span></i></b>&#8212;The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America (&#147;GAAP&#148;) requires management to make estimates and certain assumptions that affect the amounts reported
in these consolidated financial statements and accompanying notes. Actual results could differ from these estimates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:BasisOfAccountingPolicyPolicyTextBlock"><p id="xdx_844_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_zy4hTldeWxM" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_866_z1QPET0j7mIb">Basis
of presentation</span></i></b>&#8212;The financial statements are presented on a consolidated basis and include the accounts of Next Bridge
Hydrocarbons, Inc. and its wholly owned subsidiaries, TEI, Hudspeth, Torchlight Hazel, and Hudspeth Operating. All significant intercompany
balances and transactions have been eliminated. As noted above, the Company was involved in the Spin-Off on December 14, 2022.</span></p>

<ix:exclude><!-- Field: Page; Sequence: 102 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring
adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing
the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated
financial statements and disclosures of contingencies. Actual results may differ from those estimates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="nbh:RiskAndUncertaintiesPolicyTextBlock"><p id="xdx_84F_ecustom--RiskAndUncertaintiesPolicyTextBlock_zpzTbGzrInFg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86C_zn43bP27yPnl">Risks
and uncertainties</span></i></b>&#8212;The Company&#146;s operations are subject to significant risks and uncertainties, including financial,
operational, technological, and other risks associated with operating an emerging business, including the potential risk of business
failure.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2020, the World Health Organization (&#147;WHO&#148;) announced a global health emergency because of a new strain of coronavirus
(&#147;COVID-19&#148;) and the significant risks to the international community and economies as the virus spreads globally beyond
its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and
thereafter, COVID-19 continued to spread throughout the U.S. and worldwide. In addition, actions taken by OPEC members and other exporting
nations on the supply and demand in global oil and natural gas markets resulted in significant negative pricing pressure in the first
half of 2020, followed by a recovery in pricing and an increase in demand in the second half of 2020 and into 2021. However, multiple
variants emerged in 2021 and became highly transmissible, which contributed to additional pricing volatility during 2021 to date. The
financial results of companies in the oil and natural gas industry have been impacted materially as a result of changing market conditions.
Such circumstances generally increase uncertainty in the Partnership&#146;s accounting estimates. Although demand and market prices
for oil and natural gas have recently increased, due to the rising energy use and the improvement in U.S. economic activity, we cannot
predict events that may lead to future price volatility and the near-term energy outlook remains subject to heightened levels of uncertainty.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is continuing to closely monitor the overall impact and the evolution of the COVID-19 pandemic, including the ongoing spread
of any variants, along with future OPEC actions on all aspects of the Company&#146;s business, including how these events may impact
the Company&#146;s future operations, financial results, liquidity, employees, and operators. Additional actions may be required in
response to the COVID-19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely
affect general and local economic conditions. The Company cannot predict the long- term impact of these events on our liquidity, financial
position, results of operations or cash flows due to uncertainties including the severity of COVID-19 or any of the ongoing variants,
and the effect the virus will have on the demand for oil and natural gas. These situations remain fluid and unpredictable, and the Company
is actively managing its response.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:ConcentrationRiskCreditRisk"><p id="xdx_846_eus-gaap--ConcentrationRiskCreditRisk_zXw6NE02j10l" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86F_zT6vGlJcz8o1">Concentration
of risks</span></i></b>&#8212;At times the Company&#146;s cash balances are in excess of amounts guaranteed by the Federal Deposit Insurance
Corporation. The Company&#146;s cash is placed with a highly rated financial institution, and the Company regularly monitors the credit
worthiness of the financial institutions with which it does business.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:FairValueOfFinancialInstrumentsPolicy"><p id="xdx_847_eus-gaap--FairValueOfFinancialInstrumentsPolicy_z7pVeWvjWA39" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_861_z5qk5ymAgJU9">Fair
value of financial instruments</span></i></b>&#8212;Financial instruments consist of cash, receivables, convertible note receivable, payables
and promissory notes, if any. The estimated fair values of cash, receivables, and payables approximate the carrying amount due to the
relatively short maturity of these instruments. The carrying amounts of any promissory notes approximate their fair value giving affect
for the term of the note and the effective interest rates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as
follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability,
either directly or indirectly through market corroboration.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="text-align: left; width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
3 inputs are unobservable inputs based on management&#146;s own assumptions used to measure assets and liabilities at fair value.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
financial asset or liability&#146;s classification within the hierarchy is determined based on the lowest level input that is significant
to the fair value measurement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock"><p id="xdx_84E_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_z71IhrhwMFM2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_869_zmqByLzBdASh">Cash
and cash equivalents</span></i></b> &#8211; Cash and cash equivalents include certain investments in highly liquid instruments with original
maturities of three months or less.</span></p>

</ix:nonNumeric><p id="xdx_853_z1RGBGVzFuQ2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>

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<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:TradeAndOtherAccountsReceivablePolicy"><p id="xdx_840_eus-gaap--TradeAndOtherAccountsReceivablePolicy_zdiqj2Xnfsx1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86A_zuW8DIlEtscg">Accounts
receivable</span></i></b> &#8211; Accounts receivable consist of amounts due from a related party for their share of expenses paid on their
behalf by the Company. Management reviews receivables periodically and reduces the carrying amount by a valuation allowance that reflects
management&#146;s best estimate of the amount that may not be collectible. As of March 31, 2023 and December 31, 2022, no valuation
allowance was considered necessary.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:OilAndGasPropertiesPolicyPolicyTextBlock"><p id="xdx_847_eus-gaap--OilAndGasPropertiesPolicyPolicyTextBlock_zJyivS2qJaK4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_864_zOEcA96P8Dlb">Oil
and natural gas properties</span></i></b> &#8211; The Company uses the full cost method of accounting for exploration and development activities
as defined by the Securities and Exchange Commission (&#147;SEC&#148;). Under this method of accounting, the costs of unsuccessful,
as well as successful, exploration and development activities are capitalized as properties and equipment. This includes any internal
costs that are directly related to property acquisition, exploration and development activities but does not include any costs related
to production, general corporate overhead or similar activities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oil
and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs
excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated
with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated
properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the
reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering,
among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining
capital plan, and political, economic, and market conditions.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gains
and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would
significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Company&#146;s interest
in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as
long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value,
are usually charged to accumulated depreciation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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interest</span></i></b> &#8211; The Company capitalizes interest on unevaluated properties during the periods in which they are excluded from
costs being depleted or amortized. During the three months ended March 31, 2023 the Company capitalized $<span id="xdx_90D_eus-gaap--InterestCostsCapitalized_c20230101__20230331_zYGt9g44pnwk"><ix:nonFraction name="us-gaap:InterestCostsCapitalized" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">492,860</ix:nonFraction></span> of interest on unevaluated
properties. Capitalized interest for the year ended December 31, 2022, was $<span id="xdx_900_eus-gaap--AccumulatedCapitalizedInterestCosts_iI_c20221231_zd1xZfdvurDb"><ix:nonFraction name="us-gaap:AccumulatedCapitalizedInterestCosts" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,363,538</ix:nonFraction></span>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:DepreciationDepletionAndAmortizationPolicyTextBlock"><p id="xdx_843_eus-gaap--DepreciationDepletionAndAmortizationPolicyTextBlock_zcK6UJwv23tk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86B_zlx4dkpHjuKe">Depreciation,
depletion, and amortization</span></i></b> &#8211; The depreciable base for oil and natural gas properties includes the sum of all capitalized
costs net of accumulated depreciation, depletion, and amortization (&#147;DD&amp;A&#148;), estimated future development costs and asset
retirement costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and
natural gas properties is amortized on a unit-of-production method.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="nbh:CeilingTestPolicyTextBlock"><p id="xdx_84A_ecustom--CeilingTestPolicyTextBlock_zVgmVn8fMiVd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_862_zhtOjNcdq4W2">Ceiling
test</span></i></b> &#8211; Future production volumes from oil and natural gas properties are a significant factor in determining the full cost
ceiling limitation of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a
&#147;ceiling test&#148; that determines a limit on the book value of oil and natural gas properties. If the net capitalized cost of
proved oil and natural gas properties, net of related deferred income taxes, plus the cost of unproved oil and natural gas properties,
exceeds the present value of estimated future net cash flows discounted at 10 percent, net of related realizable tax affects, plus the
cost of unproved oil and natural gas properties, the excess is charged to expense and reflected as additional accumulated DD&amp;A. The
Company recorded an impairment expense of $-0- for the three months ended March 31, 2023 and for the year ended December 31, 2022,
respectively, to recognize the adjustment required by the ceiling test.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first
day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment
costs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality
of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable
reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary
considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable
than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved
oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements,
technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:AssetRetirementObligationsPolicy"><p id="xdx_847_eus-gaap--AssetRetirementObligationsPolicy_zEX0YitRQvB2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_865_zcQBEnrz6j8a">Asset
retirement obligations</span></i></b> &#8211; The fair value of a liability for an asset&#146;s retirement obligation (&#147;ARO&#148;) is
recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized
as part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period,
and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction
of the ARO liability.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inherent
in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors,
credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments.
To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is
made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain
or loss upon settlement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><p id="xdx_846_eus-gaap--IncomeTaxPolicyTextBlock_z42BmFUlaVZ9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_869_zuVgBPcdwuR8">Income
taxes</span></i></b> &#8211; Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits
will not be realized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Authoritative
guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after
determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has
reviewed the Company&#146;s tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated
financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of
limitation are three to four years from their respective filings.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Estimated
interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense
in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for
the three months ended March 31, 2023, and for the year ended December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:RevenueRecognitionPolicyTextBlock"><p id="xdx_846_eus-gaap--RevenueRecognitionPolicyTextBlock_zZ3ihktn5Gnd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_86E_zU2izYzvU4vf">Revenue
recognition</span></i></b> &#8211; The Company&#146;s revenue is typically generated from contracts to sell natural gas, crude oil or NGLs
produced from interests in oil and natural gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are
evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions
for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify
a delivery point which represents the point at which control of the product is transferred to the customer. The Company elects to treat
contracts to sell oil and natural gas production as normal sales, which are then accounted for as contracts with customers. The Company
has determined that these contracts represent multiple performance obligations which are satisfied when control of the commodity transfers
to the customer, typically through the delivery of the specified commodity to a designated delivery point.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third
parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring
control of those goods to the customer. Amounts allocated in the Company&#146;s price contracts are based on the standalone selling
price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gain
or loss on derivative instruments is outside the scope of ASC 606, <i>Revenue Recognition</i>, and is not considered revenue from contracts
with customers subject to ASC 606. The Company may in the future use financial or physical contracts accounted for as derivatives as
economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends
to physically settle but do not meet all of the criteria to be treated as normal sales.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Producer
Gas Imbalances.</i> The Company applies the sales method of accounting for natural gas revenue. Under this method, revenues are recognized
based on the actual volume of natural gas sold to purchasers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:EarningsPerSharePolicyTextBlock"><p id="xdx_84D_eus-gaap--EarningsPerSharePolicyTextBlock_zRNbwOf7hrW5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_862_zxEjmASqncgf">Basic
and diluted earnings (loss) per share</span></i></b> &#8211; Basic earnings (loss) per common share is computed by dividing net income (loss)
available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss)
per common share is computed in the same way as basic earnings (loss) per common share except that the denominator is increased to include
the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional
common shares were dilutive. The Company had zero dilutive shares for the three months ended March 31, 2023, and for the year ended December
31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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laws and regulations</span></i></b> &#8211; The Company is subject to extensive federal, state, and local environmental laws and regulations.
Environmental expenditures are expensed or capitalized depending on their future economic benefit. The Company believes that it is in
compliance with existing laws and regulations. The Company accrued no liability as of March 31, 2023 and December 31, 2022.</span></p>

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<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p id="xdx_842_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_zaxy1CMWfmGk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_864_zAZepnT3jfg3">Recent
accounting pronouncements adopted</span></i></b> &#8211; In June 2016, the FASB issued ASU 2016-13, <i>Financial Instruments &#8211;
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</i>, which adds a new Topic 326 to the Codification
and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as
loans, receivables, and held-to-maturity debt securities. Under current GAAP, companies generally recognize credit losses when it is
probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize
an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized
cost that the company expects to collect over the instrument&#146;s contractual life. ASU 2016-13 also amends the credit loss measurement
guidance for available-for sale debt securities and beneficial interests in securitized financial assets. The guidance is applicable
for fiscal years beginning after December 15, 2019 and interim periods within those years, however, the FASB extended the effective date
for smaller reporting companies to fiscal years beginning after December 15, 2022. The Company adopted this
standard January 1, 2023. It did not have a material impact on the consolidated financial statements.</span></p>

</ix:nonNumeric></ix:nonNumeric><p id="xdx_81F_zXZHHtL2pwXf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:OilAndGasPropertiesTextBlock"><p id="xdx_809_eus-gaap--OilAndGasPropertiesTextBlock_zsob1rxQGRS6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:CostIncurredInOilAndGasPropertyAcquisitionExplorationAndDevelopmentActivitiesDisclosureTextBlock"><p id="xdx_890_eus-gaap--CostIncurredInOilAndGasPropertyAcquisitionExplorationAndDevelopmentActivitiesDisclosureTextBlock_zPcZPHm3aN12" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table presents the capitalized costs for oil and natural gas properties of the Company:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BE_zjiaQBQHFKSc">Schedule
of Capitalized Cost for Oil and Natural Gas</span></span></p>

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  <tr style="vertical-align: bottom">
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt">Evaluated Costs Subject to amortization</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0928">&#8212;</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left; text-indent: -8.65pt; padding-left: 13.9pt">Total Capitalized Costs</td><td>&#160;</td>
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    <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt">Total Oil and Natural Gas Properties</td><td style="padding-bottom: 2.5pt">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A3_zdqdn5AXGPz7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span>&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unevaluated
costs as of March 31, 2023, and December 31, 2022, include cumulative costs of developing projects including the Orogrande and Hazel
Projects in West Texas and the costs related to the Oklahoma Properties. In accordance with required accounting adjustments related to
the Spin-Off, the carrying value of the oil and natural gas assets were adjusted to fair value as of December 15, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company periodically adjusts for the separation of evaluated versus unevaluated costs within its full cost pool to recognize the value
impairment related to the expiration of, or changes in market value, of unevaluated leases. The impact of reclassifications as they become
necessary is to increase the basis for calculation of future period&#146;s depletion, depreciation and amortization which effectively
recognizes the impairment on the consolidated statement of operations over future periods. Reclassified costs also become evaluated costs
for purposes of ceiling tests, and which may cause recognition of increased impairment expense in future periods. The remaining cumulative
unevaluated costs which have been reclassified within the Company&#146;s full cost pool totals $-0- as of March 31, 2023. As of December
31, 2022, evaluated costs are $-0- since the Company had no proved reserve value associated with our properties.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a write-down could
occur. Proved reserves are estimated quantities of crude oil, natural gas, and NGLs, which geological and engineering
data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions.
The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts
which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities
are not in place or for which transportation and/or marketing contracts are not in place. Estimated reserves to be developed through
secondary or tertiary recovery processes are classified as unevaluated properties.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Current
Projects</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company is primarily focused on the acquisition of early-stage projects, the development and delineation of
these projects, and then the monetization of those assets once these activities are completed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#146;s primary focus is the development of interests in oil and natural gas projects it holds in the Permian Basin in West Texas.
The Company also holds minor interests in certain other oil and natural gas projects in Central Oklahoma that it is in the process of
divesting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 31, 2023, the Company had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas,
the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, and two wells in Central Oklahoma.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Orogrande
Project, West Texas</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 7, 2014, Torchlight entered into a Purchase Agreement with Hudspeth, McCabe Petroleum Corporation (&#147;MPC&#148;), and Gregory
McCabe (&#147;Mr. McCabe&#148;). Mr. McCabe was the sole owner of both Hudspeth and MPC. Under the terms and conditions of the Purchase
Agreement, Torchlight purchased 100% of the capital stock of Hudspeth which held certain oil and natural gas assets, including a 100%
working interest in approximately 172,000 predominately contiguous acres in the Orogrande Basin in West Texas. Mr. McCabe has, at his
option, a 10% working interest back-in after payout and a reversionary interest if drilling obligations are not met, all under the terms
and conditions of a participation and development agreement among Hudspeth, MPC and Mr. McCabe. Mr. McCabe also holds a 4.5% overriding
royalty interest in the Orogrande acreage, &#8212;which he obtained prior to, and was not a part of the August 2014 transaction. As of
March 31, 2023, leases covering approximately 134,000 acres remain in effect.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
March 27, 2017, the property became subject to a University Lands D&amp;D Unit Agreement (&#147;DDU Agreement&#148;) which allows for
all 192 existing leases covering approximately 134,000 gross acres leased from University Lands to be combined into one drilling and
development unit for development purposes. The term of the DDU Agreement expires on December 31, 2023, and the time to drill on the drilling
and development unit continues through December 31, 2023. The DDU Agreement also grants the right to extend the DDU Agreement through
December 31, 2028 if compliance with the DDU Agreement is met and the extension fee associated with the additional time is paid.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Drilling
obligations under the DDU Agreement include five wells per year in years 2021, 2022 and 2023. The drilling obligations are minimum yearly
requirements and may be exceeded if acceleration is desired.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">In the years prior, our operations team deployed
a new mist drilling solution that increased hole stability, which we believe will result in meaningful cost savings for additional
wells drilled in the Orogrande Project. Multiple test wells were drilled in the Orogrande Project in order to stay in compliance
with the DDU Agreement. While these previously drilled wells may have potential to produce hydrocarbons to sell commercially in the
future, we have no immediate plans to deploy the additional capital necessary to sell production from these wells to third parties.
Instead, we plan to use the results from these wells to determine our drilling plans for future wells, including reservoir
locations, target depths and designated acreage, in the Orogrande Project. Notwithstanding the foregoing, development of the wells
continued through March 31, 2023, to further capture and document the scientific base in support of demonstrating the production
potential of the property. As of March 31, 2023, a total of 15 test wells have been drilled on the acreage.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 9, 2020, holders of certain notes payable by Torchlight entered into a Conversion Agreement under which the noteholders elected
to convert $6,000,000 of principal and approximately $1,331,000 of accrued interest on the notes held by such holders, in accordance
with their terms, into an aggregate 6% working interest (of all such holders) in the Orogrande Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company intends to make offers and enter into agreements with one or more of the other current working interest owners in the Orogrande
Project (each an &#147;Orogrande Owner&#148; and collectively, the &#147;Orogrande Owners&#148;). The Company anticipates offering
the Orogrande Owners shares of common stock in exchange for such Orogrande Owner&#146;s respective working interest in the Orogrande
Project. The Company intends to offer the number of shares of common stock necessary such that each participating Orogrande Owner would
own the percentage of common stock then outstanding in proportion to the percentage owned in the working interest of the Orogrande Project.
For illustration purposes, if an Orogrande Owner owns 10% of the working interest of the Orogrande Project, and such Orogrande Owner
elects to participate and accept the Company&#146;s offer of shares of common stock, then such Orogrande Owner will be offered 10% of
the aggregate amount of outstanding shares of common stock. The Company&#146;s decision to enter into these transactions will depend
on ability of the Company and each Orogrande Owner to negotiate and enter into definitive agreements related to such transaction and
the Company&#146;s board of directors receiving an industry-standard fairness opinion from an investment banking firm. One of the Orogrande
Owners is Wolfbone Investments, LLC (&#147;Wolfbone&#148;), an entity controlled by Mr. McCabe. Mr. McCabe owns, directly and indirectly
through entities he owns or controls, 7.75% of the Company&#146;s common stock as of December 31, 2022, which would increase by the
proportionate exchange of working interest for shares of the Company&#146;s common stock if consummated.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:ScheduleOfOtherOwnershipInterestsTextBlock"><p id="xdx_891_eus-gaap--ScheduleOfOtherOwnershipInterestsTextBlock_zuGwuBmyGNai" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Orogrande Project ownership as of March 31, 2023, is detailed as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Schedule
of Orogrande Project Ownership&#160;</span></p>

<table cellpadding="0" cellspacing="0" id="xdx_30B_134_zDolM84NxWr8" summary="xdx: Disclosure - OIL &amp; NATURAL GAS PROPERTIES (Details 2)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31_custom_WolfboneInvestmentsLLCAnEntityControlledByGregoryMcCabeMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">25.000</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr id="xdx_417_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--ConversionByNoteHoldersInMarch2020Member_zz0BeKSpM8ac" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31_custom_ConversionByNoteHoldersInMarch2020Member" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">6.000</ix:nonFraction></td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr id="xdx_41C_20230101__20230331__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--UnrelatedPartyMember_z2dVppvhjKn7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right"><ix:nonFraction name="nbh:WorkingInterestPercentage" contextRef="From2023-01-012023-03-31_custom_UnrelatedPartyMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">2.500</ix:nonFraction></td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">%</td></tr>
  <tr id="xdx_413_20230101__20230331_zXrSmv4dCiWf" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt"><span style="display: none">Total</span></td><td style="padding-bottom: 2.5pt">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A4_zPgGaAvxvMI9" style="margin-top: 0; margin-bottom: 0"></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Hazel
Project in the Midland Basin in West Texas</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
April 4, 2016, TEI acquired from MPC a 66.66% working interest in approximately 12,000 acres in the Midland Basin. A back-in after payout
of a 25% working interest was retained by MPC and another unrelated working interest owner.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
October 2016, the holders of all of Torchlight&#146;s then-outstanding shares of Series C Preferred Stock (which were issued in July
2016) elected to convert into a total 33.33% working interest in our Hazel Project, reducing TEI&#146;s ownership from 66.66% to a 33.33%
working interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Acquisition
of Additional Interests in Hazel Project</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 30, 2017, Torchlight entered into and closed an Agreement and Plan of Reorganization and a Plan of Merger with an entity which
was wholly owned by Mr. McCabe, which resulted in the acquisition of approximately 40.66% working interest in the 12,000 gross acres,
9,600 net acres, in the Hazel Project.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Also,
on January 30, 2017, Torchlight entered into and closed a Purchase and Sale Agreement with Wolfbone. Under the agreement, Torchlight
acquired certain of Wolfbone&#146;s Hazel Project assets, including its interest in the Flying B Ranch #1 well and the 40-acre unit
surrounding the well.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the transactions, the Torchlight working interest in the Hazel Project increased by 40.66% to a total ownership of 74%.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
June 1, 2017, Torchlight acquired an additional 6% working interest from unrelated working interest owners increasing its working interest
in the Hazel project to 80%, and an overall net revenue interest of 75%.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Seven
test wells have been drilled on the Hazel Project to capture and document the scientific base in support of demonstrating the production
potential of the property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Option
Agreement with Masterson Hazel Partners, LP</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 13, 2020, the Company&#146;s subsidiaries TEI and Torchlight Hazel (collectively, &#147;Torchlight Subs&#148;) entered into
an option agreement (the &#147;Option Agreement&#148;) with Masterson Hazel Partners, LP (&#147;MHP&#148;) and MPC. Under the agreement,
MHP was obligated to drill and complete, or cause to be drilled and completed, at its sole cost and expense, a new lateral well (the
&#147;Well&#148;) on the Hazel Project, sufficient to satisfy Torchlight Subs&#146;s continuous development obligations on the southern
half of the prospect no later than September 30, 2020. MHP has satisfied this drilling obligation. MHP paid to Torchlight Subs $1,000
as an option fee at the time of execution of the Option Agreement. MHP is entitled to receive, as its sole recourse for the recoupment
of drilling costs, the revenue from production of the Well attributable to Torchlight Subs&#146;s interest until such time as it has
recovered its reasonable costs and expenses for drilling, completing, and operating the well.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
exchange for MHP satisfying the above drilling obligations, Torchlight Subs granted to MHP the exclusive right and option to perform
operations, at MHP&#146;s sole cost and expense, on the Hazel Project sufficient to satisfy Torchlight Subs&#146;s continuous development
obligations on the northern half of the prospect. Because MHP exercised this drilling option and satisfied the continuous development
obligations on the northern half of the prospect, under the terms of the Option Agreement (as amended in September 2020) MHP had the
option to purchase the entire Hazel Project no later than May 31, 2021. Such purchase would be under the terms of a form of Purchase
and Sale Agreement included as an exhibit to the Option Agreement, at an aggregate purchase price of$12,690,704 for approximately 9,762
net mineral acres, and not less than 74% net revenue interest (approximately $1,300 per net mineral acre). MHP declined to exercise the
Option in 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Hunton
Play, Central Oklahoma</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 31, 2023, the Company was producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove.</span></p>

</ix:nonNumeric><p id="xdx_817_zskRevTpugz4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:RelatedPartyTransactionsDisclosureTextBlock"><p id="xdx_80A_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_z1nM0f9Frol1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>5.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_82A_zXOsLmJmeQS7">RELATED
    PARTY BALANCES</span></b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 31, 2023 and December 31, 2022, the Company had a balance of $<span id="xdx_90A_ecustom--AccountsReceivableRelatedPartiesCurrent1_iI_c20230331_zH7o0OBVBMyb"><span id="xdx_90D_ecustom--AccountsReceivableRelatedPartiesCurrent1_iI_c20221231_zkAJkOVMEXOi"><ix:nonFraction name="nbh:AccountsReceivableRelatedPartiesCurrent1" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD"><ix:nonFraction name="nbh:AccountsReceivableRelatedPartiesCurrent1" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">177,519</ix:nonFraction></ix:nonFraction></span></span> for an account receivable due from MPC, a shareholder
of the Company, for amounts advanced related to the Orogrande development cost sharing arrangement agreed to in connection with the acquisition
of the Orogrande working interests in 2014.</span></p>

<ix:exclude><!-- Field: Page; Sequence: 108 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 22, 2022, the Company issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe
(the &#147;2022 Note&#148;). The 2022 Note bears interest at 5% per annum, computed on the basis of a 365-day year, and matures on June
21, 2023 (the &#147;2022 Note Maturity Date&#148;); provided, however, if the Company raises $30 million or more in capital through debt
or equity or a combination thereof by the 2022 Note Maturity Date, the 2022 Note Maturity Date will be extended to October 3, 2023. The
outstanding principal of the 2022 Note, together with all accrued interest thereon, becomes due on June 21, 2023. The revolving commitment
under the 2022 Note expires on 2022 Note Maturity Date. As of March 31, 2023, the Company had $16,875,000 in principal amount outstanding
and $3,125,000 of available borrowings under the 2022 Note.</span></p>

</ix:nonNumeric><p id="xdx_812_zYPAV1Y6CSP3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock"><p id="xdx_80B_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zWIN5L3Onafd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>6.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_828_zYclHnQX4tX2">COMMITMENTS
    AND CONTINGENCIES</span></b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal
Matters</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 30, 2020, the Company&#146;s wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
(&#147;Cordax&#148;). The suit, <i>Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies</i>,
was filed in the 189<sup>th</sup> Judicial District Court of Harris County, Texas. The suit seeks the recovery of approximately $1.4
million in costs incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located
in the Orogrande Field. Working interest owner Wolfbone is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral
lien in the amount of $104,500 against the Orogrande Field and has sued the operator and counterclaimed against Hudspeth for breach of
contract, seeking the same amount as the lien. Meta, as the Company&#146;s parent at the time, determined to add the manufacturer of
one of the tool components that it contends was one of the causes of the tool failure. It was later disclosed that Cordax is the subsidiary
of a Canadian parent company, who has also been added to the case. Cordax&#146;s current Chairman of the Board filed a special appearance
after being served with a citation, alleging that he was a Canadian citizen with no meaningful ties to Texas. After discovery was conducted
on this issue, a nonsuit without prejudice for this defendant was filed, dismissing him from the case. The remaining parties attended
mediation on June 15, 2022, that was unsuccessful in resolving the case. Discovery is substantially complete. The case is currently set
for trial beginning October 16, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in
the amount of $104,500.01 and recover related attorney&#146;s fees. The foreclosure action, <i>Datalog LWT Inc. d/b/a Cordax Evaluation
Technologies v. Torchlight Energy Resources, Inc</i>., was filed in the 205<sup>th</sup> Judicial District Court of Hudspeth County,
Texas. The Company is contesting the lien in good faith and filed a Plea in Abatement on May 10, 2021, seeking a stay in the Hudspeth
County lien foreclosure case pending final disposition of the related case currently pending in Harris County, Texas. The Company is
required to indemnify Meta in connection with this matter pursuant to the terms of the Distribution Agreement with Meta.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 14, 2022, a shareholder derivative action was filed in the U.S. District Court for the Eastern District of New York captioned
<i>Hines v. Palikaras, et al.</i>, No. 1:22-cv-00248. The complaint names as defendants certain of Meta&#146;s current officers and
directors, certain former Torchlight officers and directors, and Meta (as nominal defendant). The complaint, purportedly brought on behalf
of Meta, asserts claims under Section 14(a) of the Exchange Act, contribution claims under Sections 10(b) and 21D of the Exchange Act,
and various state law claims such as breach of fiduciary duties and unjust enrichment. The complaint seeks, among other things, unspecified
compensatory damages in favor of Meta, certain corporate governance related actions, and an award of costs and expenses to the derivative
plaintiff, including attorneys&#146; fees. On March 9, 2022, the Court entered a stipulated order staying this action until there is
a ruling on a motion to dismiss in the Securities Class Action.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Environmental
Matters</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to contingencies as a result of environmental laws and regulations. Present and future environmental laws and regulations
applicable to the Company&#146;s operations could require substantial capital expenditures or could adversely affect its operations in
other ways that cannot be predicted at this time. As of March 31, 2023, and December 31, 2022, no amounts had been recorded because no
specific liability has been identified that is reasonably probable of requiring the Company to fund any future material amounts.</span></p>

</ix:nonNumeric><p id="xdx_81C_z8SMKwvDiUa4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p id="xdx_808_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_zCjL09npj3ki" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>7.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_82D_zCR4K131FU6a">STOCKHOLDERS&#146;
    EQUITY</span></b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has <span id="xdx_904_eus-gaap--CommonStockSharesAuthorized_iI_c20230331_zlUWBq2ynAPe"><ix:nonFraction name="us-gaap:CommonStockSharesAuthorized" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">500,000,000</ix:nonFraction></span> authorized shares of common stock, par value of $<span id="xdx_90E_eus-gaap--CommonStockParOrStatedValuePerShare_iI_c20230331_zseZDGTql3j4"><ix:nonFraction name="us-gaap:CommonStockParOrStatedValuePerShare" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0001</ix:nonFraction></span> per share and <span id="xdx_905_eus-gaap--PreferredStockSharesAuthorized_iI_c20230331_z6rB8lDmOzt"><ix:nonFraction name="us-gaap:PreferredStockSharesAuthorized" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">50,000,000</ix:nonFraction></span> authorized shares of
preferred stock, par value of $<span id="xdx_903_eus-gaap--PreferredStockParOrStatedValuePerShare_iI_c20230331_zx5qjpj9vKgl"><ix:nonFraction name="us-gaap:PreferredStockParOrStatedValuePerShare" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">0.0001</ix:nonFraction></span> per share. As of March 31, 2023 and December 31, 2022, the Company has issued <span id="xdx_901_eus-gaap--CommonStockSharesIssued_iI_c20230331_zbyMzaxub7y7"><span id="xdx_905_eus-gaap--CommonStockSharesOutstanding_iI_c20230331_z4GQgtmzmgB"><span id="xdx_909_eus-gaap--CommonStockSharesIssued_iI_c20221231_zEUdDkuUtBt4"><span id="xdx_901_eus-gaap--CommonStockSharesOutstanding_iI_c20221231_zP6W58afNsye"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesOutstanding" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:CommonStockSharesOutstanding" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">165,472,241</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span>
shares of common stock and -<span id="xdx_90E_eus-gaap--PreferredStockSharesIssued_iI_c20230331_z7T1JDU5BFLg"><span id="xdx_90D_eus-gaap--PreferredStockSharesOutstanding_iI_c20230331_zqcfBxnTwrS6"><span id="xdx_907_eus-gaap--PreferredStockSharesIssued_iI_c20221231_zcQtnwmN1qak"><span id="xdx_904_eus-gaap--PreferredStockSharesOutstanding_iI_c20221231_zyJPJdtuUgj5"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesIssued" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="us-gaap:PreferredStockSharesOutstanding" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">0</ix:nonFraction></ix:nonFraction></ix:nonFraction></ix:nonFraction></span></span></span></span>- shares of preferred stock.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b>Stock Based Compensation</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">In 2022, the Company&#8217;s board of directors
adopted, and the stockholders approved, the 2022 Equity Incentive Plan (the &#8220;2022 Plan&#8221;). The 2022 Plan permits the Company
to grant stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing,
for up to a maximum of 58,273,612 shares following an automatic increase to the number of shares reserved under the 2022 Plan on
January 1, 2023. During the three months ended March 31, 2023, the Company granted 24,403,612 stock options as authorized under the
2022 Plan on the Company&#8217;s form Performance Stock Option Agreement adopted by each of the Company&#8217;s board of directors and
compensation committee on March 6, 2023. Vesting is subject to continued service with the Company for up to one year with provisions
for earlier vesting subject to the attainment of events outlined in the Plan.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">Options granted were valued using the Black-Scholes
Option Pricing Model resulting in a total value of $<span id="xdx_904_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iI_c20230331_zf9SdVNPKhrg"><ix:nonFraction name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,741,862</ix:nonFraction></span>. Option expense for the three months ended March 31, 2023, was $<span id="xdx_909_eus-gaap--ProceedsFromIssuanceOrSaleOfEquity_c20230101__20230331_zjq1mZDFR7k"><ix:nonFraction name="us-gaap:ProceedsFromIssuanceOrSaleOfEquity" contextRef="From2023-01-012023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">145,155</ix:nonFraction></span>.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&#160;</p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock"><p id="xdx_890_eus-gaap--ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock_z5gNoDAgF9d8" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">A
summary of stock options outstanding as of March 31, 2023, by exercise price and year of expiration is presented below:</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; display: none; text-align: justify"><span id="xdx_8B9_ziG4n92zlLj1">Schedule of Stock Options Outstanding</span></p>

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  <tr style="vertical-align: bottom">
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    <td colspan="3" style="border-bottom: Black 1pt solid; text-align: center">Total</td></tr>
  <tr style="vertical-align: bottom">
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    <td colspan="3">&#160;</td></tr>
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    <td style="padding-bottom: 1pt; width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardPerShareWeightedAveragePriceOfSharesPurchased_iI_c20230331__us-gaap--MeasurementInputTypeAxis__custom--ExercisePriceDollarOnePointTwoZeroFiveSixMember_zkKy0parEIPa" style="padding-bottom: 1pt; width: 18%; text-align: right"><ix:nonFraction name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardPerShareWeightedAveragePriceOfSharesPurchased" contextRef="AsOf2023-03-31_custom_ExercisePriceDollarOnePointTwoZeroFiveSixMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">1.2056</ix:nonFraction></td><td style="padding-bottom: 1pt; width: 1%; text-align: left">&#160;</td><td style="padding-bottom: 1pt; width: 2%">&#160;</td>
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    <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt; text-align: right">&#160;</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A5_zERf8Bu8mRN9" style="margin-top: 0; margin-bottom: 0"></p>

<p style="margin-top: 0; margin-bottom: 0"></p>

</ix:nonNumeric><p id="xdx_81D_zmN4hVitO0x4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

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<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock"><p id="xdx_80D_eus-gaap--IncomeTaxDisclosureTextBlock_zojixonItus5" style="margin-top: 0; margin-bottom: 0"></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>8.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_824_zgExpzwXWcO1">INCOME
    TAXES</span></b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">The Company recorded no income tax provision at March
31, 2023 and December 31, 2022 because of anticipated losses for the 2023 fiscal year and actual losses incurred in 2022.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">The Company estimates its annual effective income
tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. Statutory tax rate changes
and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income
tax expense for the three months ended March 31, 2023 because the Company expects to incur a tax loss in the current year. Similarly,
no income tax expense was recognized for the year ended December 31, 2022.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">The Company had a Gross deferred tax asset related
to federal net operating loss carryforwards of $<span id="xdx_901_eus-gaap--OperatingLossCarryforwards_iI_c20230331_zGtr0hUrOoje"><ix:nonFraction name="us-gaap:OperatingLossCarryforwards" contextRef="AsOf2023-03-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">81,330,836</ix:nonFraction></span>  at March 31, 2023 and $<span id="xdx_90F_eus-gaap--OperatingLossCarryforwards_iI_c20221231_zyFZpOJUhYy1"><ix:nonFraction name="us-gaap:OperatingLossCarryforwards" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">25,935,753</ix:nonFraction></span> and $<span id="xdx_90B_eus-gaap--OperatingLossCarryforwards_iI_c20221214_z9Hkj8lXgHv9"><ix:nonFraction name="us-gaap:OperatingLossCarryforwards" contextRef="AsOf2022-12-14" format="ixt:numdotdecimal" decimals="0" unitRef="USD">65,730,932</ix:nonFraction></span> at December 31, 2022 and at December 14, 2022 (the successor period), respectively. The
federal net operating loss carryforward will begin to expire in 2034. Realization of the deferred tax asset is dependent, in part, on
generating sufficient taxable income prior to expiration of the loss carryforwards. The Company has placed a 100% valuation allowance
against the net deferred tax asset because future realization of these assets is not assured.&#160;</p>

</ix:nonNumeric><p id="xdx_815_zoTd1A4iYPBh" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="nbh:NotesPayableRelatedPartiesTextBlock"><p id="xdx_80D_ecustom--NotesPayableRelatedPartiesTextBlock_zCIN5snFX6He" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>9.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_827_z5b7yHSHuA42">NOTES
    PAYABLE, RELATED PARTIES</span></b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">In 2021, the Company entered into a note payable with
Meta, its former parent to borrow up to $<span id="xdx_90F_eus-gaap--NotesPayable_iI_pp0p0_dm_c20211231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zvDq2y1CKkH"><ix:nonFraction name="us-gaap:NotesPayable" contextRef="AsOf2021-12-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">15</ix:nonFraction> million</span>. <span id="xdx_90B_eus-gaap--DebtInstrumentMaturityDateDescription_c20230101__20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zXbMQT0r7UVc"><ix:nonNumeric contextRef="From2023-01-012023-03-31_custom_MetaMaterialsIncMember_custom_Note2021Member" name="us-gaap:DebtInstrumentMaturityDateDescription">On October 1, 2021, the Company issued the 2021 Note (defined below), which bears
interest at <span id="xdx_90C_eus-gaap--DebtInstrumentInterestRateDuringPeriod_c20230101__20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zKSCfuQ4b7i8"><ix:nonFraction name="us-gaap:DebtInstrumentInterestRateDuringPeriod" contextRef="From2023-01-012023-03-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">8</ix:nonFraction>%</span> per annum, computed on the basis of a 360-day year, which was initially to mature on March 31, 2023 (the &#8220;2021 Note
Maturity Date&#8221;); provided, however, if the Company raises $30 million or more in capital through debt or equity or a combination
thereof by the 2021 Note Maturity Date, the 2021 Note Maturity Date will be extended to September 30, 2023, and the outstanding principal
of the 2021 Note will amortize in six equal, monthly installments.</ix:nonNumeric></span> If an event of default has occurred and is continuing, interest on
the 2021 Note may accrue at the default rate of 12% per annum. The outstanding principal of the 2021 Note, together with all accrued interest
thereon, becomes due on the 2021 Note Maturity Date. The 2021 Note includes a restrictive covenant that, subject to certain exceptions
and qualifications, restricts the Company&#8217;s ability to merge or consolidate with another person or entity, or sell or transfer all
or substantially all of its assets, unless the Company is the surviving entity or the successor entity assumes all of obligations under
the 2021 Note. The 2021 Note is collateralized by certain shares of common stock in Meta held by one of its stockholders, Mr. McCabe,
and by a lien on a 25% interest in the Orogrande Project owned by Wolfbone, an affiliate of Mr. McCabe.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">The balance on the 2021 Note as of March 31, 2023
was $<span id="xdx_907_eus-gaap--LineOfCreditFacilityCurrentBorrowingCapacity_iI_pp0p0_dm_c20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zXmjMKHEvWq5"><ix:nonFraction name="us-gaap:LineOfCreditFacilityCurrentBorrowingCapacity" contextRef="AsOf2023-03-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">15</ix:nonFraction> million</span>. As of March 31, 2023, the total accrued and unpaid interest under the 2021 Note was $<span id="xdx_901_eus-gaap--InterestPayableCurrent_iI_c20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--Note2021Member_zzCMSwGbEWDf"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2023-03-31_custom_MetaMaterialsIncMember_custom_Note2021Member" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,689,444</ix:nonFraction></span>.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 2, 2022, the Company entered into a loan agreement with Meta, as lender (the &#147;Loan Agreement&#148;) that would govern
prior loan amounts advanced to the Company from Meta. As of August 11, 2022, and August 29, 2022, the Company borrowed an additional
$<span id="xdx_90B_eus-gaap--NotesPayable_iI_pp0p0_dm_c20220811__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--LoanAgreementMember_zzQ9DRca06H7"><ix:nonFraction name="us-gaap:NotesPayable" contextRef="AsOf2022-08-11_custom_MetaMaterialsIncMember_custom_LoanAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">1.2</ix:nonFraction> million</span> and $<span id="xdx_905_eus-gaap--NotesPayable_iI_pp0p0_dm_c20220829__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--LoanAgreementMember_zsyBAYcXM4s5"><ix:nonFraction name="us-gaap:NotesPayable" contextRef="AsOf2022-08-29_custom_MetaMaterialsIncMember_custom_LoanAgreementMember" format="ixt:numdotdecimal" decimals="0" scale="6" unitRef="USD">1.46</ix:nonFraction> million</span>, respectively, representing the remaining amount available for borrowing under the Loan Agreement and
resulting in a total of $5 million principal amount outstanding related to the Loan Agreement, the proceeds of which were used for working
capital and general corporate purposes. <span id="xdx_907_eus-gaap--DebtInstrumentMaturityDateDescription_c20220902__20220902__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--LoanAgreementMember_zNh59DcIFGql"><ix:nonNumeric contextRef="From2022-09-022022-09-02_custom_MetaMaterialsIncMember_custom_LoanAgreementMember" name="us-gaap:DebtInstrumentMaturityDateDescription">The term loans under the Loan Agreement bear interest at a per annum rate equal to 8% and were
to mature on March 31, 2023 (the &#147;Maturity Date&#148;); provided, however, if the Company raises $30 million or more in capital
through debt or equity, or a combination thereof by the Maturity Date, the Maturity Date will be extended to October 3, 2023 and the
term loan would be amortized in six equal monthly installments.</ix:nonNumeric></span> The Loan Agreement includes customary representations and covenants that,
subject to exceptions and qualifications, restrict our ability to do certain things, such as: engage in mergers, acquisitions, and asset
sales; transact with affiliates; undergo a change in control; incur additional indebtedness; incur liens; make loans and investments;
declare dividends or redeem or repurchase equity interests; and enter into certain restrictive agreements. In addition, the Loan Agreement
contains customary events of default, mandatory prepayment events and affirmative covenants, including, without limitation, covenants
regarding the payment of taxes and other obligations, maintenance of insurance, maintenance of our material properties, reporting requirements,
compliance with applicable laws and regulations, and formation or acquisition of new subsidiaries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 31, 2023, the Company entered into an amendment to the 2021 Note and an amendment to Loan Agreement in order to extend each of
the 2021 Maturity Date and the Maturity Date respectively from March 31, 2023 to October 3, 2023. Such amendments also removed the provisions
allowing for extensions of the 2021 Maturity Date and the Maturity Date in the event the Company raised $30 million or more in capital
through debt or equity or a combination thereof by March 31, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">Under the terms of the Arrangement Agreement
that governed the merger transaction between Torchlight and Meta in June 2021 the oil and natural gas assets were to be sold or spun
out from Meta and the costs of any sale or spin-off incurred by Meta were to be borne the then-existing shareholders of Torchlight.
The amount of the reimbursement payable to Meta in connection with the Spin-Off is $2,589,000 which was added to the principal
amount of the Loan Agreement for a principal balance outstanding of $7,589,000 as of March 31, 2023. Concurrently with the amendment
to the Loan Agreement, the Company made a prepayment of $1 million to reduce the principal balance to $<span id="xdx_90C_eus-gaap--NotesPayable_iI_c20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--LoanAgreementMember_zjZZp3k2lHb1"><ix:nonFraction name="us-gaap:NotesPayable" contextRef="AsOf2023-03-31_custom_MetaMaterialsIncMember_custom_LoanAgreementMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">6,589,362</ix:nonFraction></span>. As of March 31,
2023, the loans under the Loan Agreement had  accrued and unpaid interest of $<span id="xdx_90B_eus-gaap--InterestPayableCurrent_iI_c20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MetaMaterialsIncMember__us-gaap--ShortTermDebtTypeAxis__custom--LoanAgreementMember_zJqioMVC91m3"><ix:nonFraction name="us-gaap:InterestPayableCurrent" contextRef="AsOf2023-03-31_custom_MetaMaterialsIncMember_custom_LoanAgreementMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">273,002</ix:nonFraction></span>.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:exclude><!-- Field: Page; Sequence: 110 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 21, 2022, the Company entered into that certain Agreement and Plan of Merger (the &#147;Merger Agreement&#148;) with Hudspeth,
Wolfbone, MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such
leases, pooling and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in Orogrande Project
will be transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations
(as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance
of 56,297,638 shares of Company common stock to Mr. McCabe (such series of transactions collectively, the &#147;Merger&#148;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Merger is to be completed in accordance with the Texas Business Organizations Code, whereby (a) the Company will form NBH MergeCo, LLC
with the State of Texas (&#147;MergeCo&#148;) in order to cause Hudspeth to assign all of its rights under the Merger Agreement to
MergeCo and MergeCo will assume Hudspeth&#146;s obligations under the Merger Agreement, (b) Hudspeth (or MergeCo, as its assignee),
Wolfbone and MPC shall merge with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone shall become a direct and wholly-owned
subsidiary of the Company. The closing of the transactions contemplated by the Merger Agreement are subject to the satisfaction of certain
customary closing conditions, including filing and acceptance of the certificate of merger by the Secretary of State of the State of
Texas.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note in the principal amount of up to $20 million
in favor of Mr. McCabe. The Company is entitled to request advances under the 2022 Note in a minimum principal amount of $100,000 each.
Mr. McCabe is the largest shareholder of the Company&#146;s common stock.&#160;As of March 31, 2023 the Company had drawn $<span id="xdx_901_ecustom--NotesPayableRelatedPartiesClassifiedCurrent1_iI_c20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GregoryMcCabeMember_zRld6D4iuLqi" title="Notes Payable, Related Party"><ix:nonFraction name="nbh:NotesPayableRelatedPartiesClassifiedCurrent1" contextRef="AsOf2023-03-31_custom_GregoryMcCabeMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">16,875,000</ix:nonFraction></span>
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</ix:nonNumeric><p id="xdx_811_z5N4bvxvtCz2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:AssetRetirementObligationDisclosureTextBlock"><p id="xdx_80A_eus-gaap--AssetRetirementObligationDisclosureTextBlock_zTRlUTXO3kL1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>10.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_822_z7NJha8YLLU5">ASSET
    RETIREMENT OBLIGATIONS</span></b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:ScheduleOfAssetRetirementObligationsTableTextBlock"><p id="xdx_89C_eus-gaap--ScheduleOfAssetRetirementObligationsTableTextBlock_zbR1J7bxNrHj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a reconciliation of the asset retirement obligations liability through March 31, 2023:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B0_zUdt2PMwAaoh">Schedule
of Asset Retirement Obligations Liability</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<table cellpadding="0" cellspacing="0" id="xdx_30B_134_z9vRaKQfI6aj" summary="xdx: Disclosure - ASSET RETIREMENT OBLIGATIONS (Details)" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
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  <tr id="xdx_407_eus-gaap--AssetRetirementObligationsNoncurrent_iE_zSiv8hqVJWyk" style="vertical-align: bottom; background-color: White">
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</table>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
<tr style="vertical-align: bottom">
    <td style="text-align: left; padding-left: 13.5pt"></td><td></td>
    <td style="text-align: left"></td><td id="xdx_492_20230101__20230331_zX3Vzl7iAuNk" style="text-align: right"></td><td style="text-align: left"></td></tr>
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  <tr id="xdx_40C_eus-gaap--AssetRetirementObligationRevisionOfEstimate_zu0UYCOlw8Cf" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt; padding-left: 13.5pt">Estimated liabilities recorded</td><td style="padding-bottom: 1pt">&#160;</td>
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  <tr id="xdx_407_eus-gaap--AssetRetirementObligationsNoncurrent_iE_zFaQlg226zEb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt">Asset retirement obligations - March 31, 2023</td><td style="padding-bottom: 2.5pt">&#160;</td>
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  </table>

</ix:nonNumeric><p id="xdx_8A4_zPLWM7mHlpd2" style="margin-top: 0; margin-bottom: 0"></p>

</ix:nonNumeric><p id="xdx_81C_zfLAjjBNH8g" style="margin-top: 0; margin-bottom: 0"></p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:SubsequentEventsTextBlock"><p id="xdx_808_eus-gaap--SubsequentEventsTextBlock_zXUqFtjLejJb" style="margin-top: 0; margin-bottom: 0">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>11.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_823_zaj1QfUYtF38">SUBSEQUENT
    EVENTS</span></b></span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>The Wolfbone Merger Closing</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i>&#160;</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">The Merger became effective on April 25, 2023
and the closing of the Merger occurred on May 11, 2023. As a result of the Merger, the Company acquired Wolfbone&#8217;s <span id="xdx_909_eus-gaap--BusinessAcquisitionPercentageOfVotingInterestsAcquired_iI_c20230425__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--WolfboneInvestmentsLLCMember_zmr402VDRggc"><ix:nonFraction name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" contextRef="AsOf2023-04-25_us-gaap_SubsequentEventMember_custom_WolfboneInvestmentsLLCMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">22.6249</ix:nonFraction>%</span>
remaining rights to working interest in the Orogrande Project in consideration of the issuance by the Company of 56,297,638 shares
of the Company&#8217;s common stock to McCabe.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><i>Working Interest Contributions</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><i>&#160;</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">On May 11, 2023, the Company and its wholly
owned subsidiary Hudspeth, entered into a contribution and exchange agreement with each of the Orogrande Owners named in the table
below, pursuant to which and upon the completion of the Merger, the Company offered to the Orogrande Owners the number of shares of
the Company&#8217;s common stock set forth opposite such Orogrande Owner&#8217;s name below in exchange for and in order to acquire
such Orogrande Owner&#8217;s rights to working interest in the Orogrande Project.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&#160;</p>

<ix:nonNumeric contextRef="From2023-01-012023-03-31" escape="true" name="us-gaap:ScheduleOfSubsequentEventsTextBlock"><p id="xdx_894_eus-gaap--ScheduleOfSubsequentEventsTextBlock_zCyWay8qhGe8" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">The Company will issue the number
of shares of common stock to each of the Orogrande Owners as follows:</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="display: none"><span id="xdx_8B1_zZ76Szonqxuj">Schedule of Common Stock to be issued to
Orogrande Owners</span></span></p>

<table cellspacing="0" cellpadding="0" id="xdx_30B_134_zGwQwzEdQhCk" summary="xdx: Disclosure - SUBSEQUENT EVENTS (Details)" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: justify">&#160;</td>
    <td colspan="2" id="xdx_485_eus-gaap--CommonStockSharesIssued_iI_zViLnwZlQzWh" style="border-bottom: black 1pt solid; white-space: nowrap; text-align: justify"><span style="font-size: 10pt"><b>Shares of Common Stock</b></span></td>
    <td style="padding-bottom: 1pt; text-align: justify">&#160;</td>
    <td id="xdx_48F_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_z7SOeuXzW5cj" style="border-bottom: black 1pt solid; white-space: nowrap; text-align: justify"><span style="font-size: 10pt"><b>Working
    Interest Contribution</b></span></td></tr>
  <tr id="xdx_413_20230511__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--OrograndeProjectMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--DingusInvestmentsIncMember_z4hCgRowkan1" style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify; width: 57%"><span style="font-size: 10pt">Dingus Investments, Inc.</span></td>
    <td style="text-align: justify; width: 20%"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_DingusInvestmentsIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,050,382</ix:nonFraction></span></td>
    <td style="text-align: justify; width: 1%">&#160;</td>
    <td style="text-align: justify; width: 2%">&#160;</td>
    <td style="text-align: justify; width: 20%"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_DingusInvestmentsIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">2.8334</ix:nonFraction>%</span></td></tr>
  <tr id="xdx_41D_20230511__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--OrograndeProjectMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--PandoraEnergyLPMember_zAfqHROPsDij" style="vertical-align: bottom">
    <td style="padding-bottom: 1pt; text-align: justify"><span style="font-size: 10pt">Pandora Energy, LP</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_PandoraEnergyLPMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">6,220,779</ix:nonFraction></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="padding-bottom: 1pt; text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_PandoraEnergyLPMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">2.5000</ix:nonFraction>%</span></td></tr>
  <tr id="xdx_412_20230511__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--OrograndeProjectMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--KennedyMineralsLtdMember_zth7k56ygTt2" style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-bottom: 1pt; text-align: justify"><span style="font-size: 10pt">Kennedy Minerals, Ltd</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_KennedyMineralsLtdMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">6,220,779</ix:nonFraction></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="padding-bottom: 1pt; text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_KennedyMineralsLtdMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">2.5000</ix:nonFraction>%</span></td></tr>
  <tr id="xdx_416_20230511__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--OrograndeProjectMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--ThedeCompiegnePropertyCompanyNo20LtdMember_z2uNSpPlZ4Kg" style="vertical-align: bottom">
    <td style="padding-bottom: 1pt; text-align: justify"><span style="font-size: 10pt">The de Compiegne Property Company No. 20, Ltd</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_ThedeCompiegnePropertyCompanyNo20LtdMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">6,220,779</ix:nonFraction></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="padding-bottom: 1pt; text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_ThedeCompiegnePropertyCompanyNo20LtdMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">2.5000</ix:nonFraction>%</span></td></tr>
  <tr id="xdx_419_20230511__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--OrograndeProjectMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--LomaHombreEnergyLLCMember_z690Dw2SkGZ3" style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-bottom: 1pt; text-align: justify"><span style="font-size: 10pt">Loma Hombre Energy, LLC</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_LomaHombreEnergyLLCMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">622,078</ix:nonFraction></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="padding-bottom: 1pt; text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_LomaHombreEnergyLLCMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0.2500</ix:nonFraction>%</span></td></tr>
  <tr id="xdx_413_20230511__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--OrograndeProjectMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SeroCapitalLLCMember_zSw5RsNgV5V3" style="vertical-align: bottom">
    <td style="padding-bottom: 1pt; text-align: justify"><span style="font-size: 10pt">Sero Capital, LLC</span></td>
    <td style="border-bottom: black 1pt solid; text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_SeroCapitalLLCMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">725,840</ix:nonFraction></span></td>
    <td style="border-bottom: black 1pt solid; text-align: justify">&#160;</td>
    <td style="padding-bottom: 1pt; text-align: justify">&#160;</td>
    <td style="border-bottom: black 1pt solid; text-align: justify"><span style="font-size: 10pt"><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember_custom_SeroCapitalLLCMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0.2917</ix:nonFraction>%</span></td></tr>
  <tr id="xdx_411_20230511__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--OrograndeProjectMember_zYExa6QYShxk" style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-left: 10pt; padding-bottom: 2.5pt; text-align: justify"><span style="font-size: 10pt"><b>TOTAL</b></span></td>
    <td style="border-bottom: black 2.25pt double; text-align: justify"><span style="font-size: 10pt"><b><ix:nonFraction name="us-gaap:CommonStockSharesIssued" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">27,060,637</ix:nonFraction></b></span></td>
    <td style="border-bottom: black 2.25pt double; text-align: justify">&#160;</td>
    <td style="padding-bottom: 2.5pt; text-align: justify">&#160;</td>
    <td style="border-bottom: black 2.25pt double; text-align: justify"><span style="font-size: 10pt"><b><ix:nonFraction name="us-gaap:EquityMethodInvestmentOwnershipPercentage" contextRef="AsOf2023-05-11_us-gaap_SubsequentEventMember_custom_OrograndeProjectMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">10.8751</ix:nonFraction>%</b></span></td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A4_zatrt2ialZTd" style="margin-top: 0; margin-bottom: 0"></p>

</ix:nonNumeric><p id="xdx_810_zgkPz8QN1FIa" style="margin-top: 0; margin-bottom: 0"></p>

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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
II</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INFORMATION
NOT REQUIRED IN PROSPECTUS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item&#160;13.
Other Expenses of Issuance and Distribution.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth an itemization of all estimated expenses in connection with the issuance and distribution of the securities
to be registered:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 70%; margin-right: auto">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: left">Item</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Amount</td><td style="padding-bottom: 1pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 57%; text-align: left; text-indent: -12pt; padding-left: 12pt">Registration Statement filing fee</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">5,311.47</td><td style="white-space: nowrap; width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -12pt; padding-left: 12pt">Accountants fees and expenses*</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -12pt; padding-left: 12pt">Legal fees and expenses*</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -12pt; padding-left: 12pt">Printing*</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -12pt; padding-left: 12pt">Transfer and distribution agent fees and expenses*</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -12pt; padding-left: 12pt">Miscellaneous*</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#8212;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1pt">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1pt; white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -12pt; padding-left: 12pt">Total</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">5,311.47</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -12pt; padding-left: 12pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="white-space: nowrap; text-align: left">&#160;</td></tr>
  </table>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
be furnished by amendment.</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item&#160;14.
Indemnification of Directors and Officers.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#146;s Amended and Restated Articles of Incorporation and Bylaws provide that, to the fullest extent permitted by the laws of
the State of Nevada, any officer or director of the Company, who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that
he/she is or was or has agreed to serve at the request of the Company as a director, officer, employee or agent of the Company, or while
serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Company as a director,
officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity. For the avoidance of doubt, the foregoing indemnification obligation includes, without limitation, claims for
monetary damages against indemnitee to the fullest extent permitted under Section&#160;78.7502 and 78:751 of the Nevada Revised Statutes
as in existence on the date hereof.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
indemnification provided shall be from and against expenses (including attorneys&#146; fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by indemnitee or on indemnitee&#146;s behalf in connection with such action, suit or proceeding and
any appeal therefrom, but shall only be provided if indemnitee acted in good faith and in a manner indemnitee reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to any criminal action, suit or proceeding, had no reasonable
cause to believe indemnitee&#146;s conduct was unlawful.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the case of any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor
by reason of the fact that he/she is or was a director, officer, employee or agent of the Company, or while serving as a director or
officer of the Company, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, no indemnification shall be made
in respect of any claim, issue or matter as to which indemnitee shall have been adjudged to be liable to the Company unless, and only
to the extent that, the Nevada courts or the court in which such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the Nevada courts or such other court shall deem proper.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the indemnitee did not act in good faith and in a manner which
indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that indemnitee&#146;s conduct was unlawful.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent that indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling
our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable. If a claim for indemnification against such liabilities
(other than the payment by us of expenses incurred or paid by a director, officer or controlling person of our company in the successful
defense of any action, suit or proceeding) is asserted by any of our directors, officers or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of that issue.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
15. Recent Sales of Unregistered Securities.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 11, 2023, the Company issued 56,297,638 shares of restricted common stock to Mr. McCabe under the Merger Agreement and the
number of shares of common stock set forth opposite each Orogrande Owner&#146;s name to each of the Orogrande Owners pursuant
to contribution and exchange agreements with each of the Orogrande Owners as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Shares of Common Stock</td><td style="padding-bottom: 1pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1pt solid; white-space: nowrap; font-weight: bold; text-align: center">Working Interest Contribution</td><td style="padding-bottom: 1pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 74%; text-align: left">Dingus Investments, Inc.</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; text-align: right">7,050,382</td><td style="white-space: nowrap; width: 1%; text-align: left">&#160;</td><td style="width: 3%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 8%; text-align: right">2.8334</td><td style="white-space: nowrap; width: 1%; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Pandora Energy, LP</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,220,779</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2.5000</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Kennedy Minerals, Ltd</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,220,779</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2.5000</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">The de Compiegne Property Company No. 20, Ltd</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,220,779</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2.5000</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Loma Hombre Energy, LLC</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">622,078</td><td style="white-space: nowrap; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">0.2500</td><td style="white-space: nowrap; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1pt">Sero Capital, LLC</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">725,840</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">&#160;</td><td style="padding-bottom: 1pt">&#160;</td>
    <td style="border-bottom: Black 1pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1pt solid; text-align: right">0.2917</td><td style="white-space: nowrap; padding-bottom: 1pt; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 17.3pt; font-weight: bold; padding-bottom: 2.5pt">TOTAL</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">27,060,637</td><td style="white-space: nowrap; padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">10.8751</td><td style="white-space: nowrap; padding-bottom: 2.5pt; font-weight: bold; text-align: left">%</td></tr>
  </table>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company issued the shares of the Company&#146;s common stock to Mr. McCabe under the Merger Agreement and to each of the
Orogrande Owners pursuant to contribution and exchange agreements, in each case, without registration under the Securities Act of 1933,
as amended (the &#147;Securities Act&#148;) by reason of an exemption from registration afforded by the provisions of Section 4(a)(5)
and/or Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering
and based on Mr. McCabe&#146;s representations and warranties included in the Merger Agreement and each Orogrande Owner&#146;s
representations and warranties included in the contribution and exchange agreements, respectively, that (a) such person is an &#147;accredited
investor&#148; as defined under the Securities Act, and (b) the shares of common stock were acquired for investment for such person&#146;s
account, and not with a view to resale or distribute any part thereof, unless otherwise allowed for under the Securities Act or any applicable
exemption from registration. As a result of the Company being a reporting company with the SEC, the Company believes that each of Mr.
McCabe and the Orogrande Owners had access to the type of information normally provided in a prospectus for a registered securities
offering. No underwriting discounts or commissions were paid in connection with the issuances.</span></p>

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    <div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16. Exhibits and Financial Statement Schedules.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; color: Black; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exhibits.</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; white-space: nowrap; vertical-align: bottom; text-align: center; width: 10%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><b>Exhibit<br />
    <span style="text-decoration: underline">Number</span></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; white-space: nowrap; vertical-align: bottom; text-align: center; width: 90%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><b><span style="text-decoration: underline">Exhibit
    Description</span></b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex21.htm">2.1</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex21.htm">Distribution Agreement between Meta Materials Inc. and Next Bridge Hydrocarbons, Inc., dated December 2, 2022 (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983522000856/nbh_ex10-1.htm">2.2</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983522000856/nbh_ex10-1.htm">Agreement
    and Plan of Merger among Next Bridge Hydrocarbons, Inc., Hudspeth Operating, LLC, Wolfbone Investments, LLC, McCabe Petroleum Corporation,
    and Gregory McCabe, dated December 21, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed December
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex31.htm">3.1</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex31.htm">First
    Amended and Restated Articles of Incorporation of Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 3.1 to our
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex32.htm">3.2</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex32.htm">Amended
    and Restated By-laws of Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 3.2 to our Registration Statement on
    Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center">
    <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.1</span></p></td>
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Opinion
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex101.htm">10.1</a></span></td>
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    Agreement between Meta Materials Inc. and Next Bridge Hydrocarbons, Inc., dated June 28, 2022 (incorporated by reference to Exhibit
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex102.htm">10.2</a></span></td>
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    Matters Agreement between Meta Materials Inc. and Next Bridge Hydrocarbons, Inc., date December 2, 2022 (incorporated by reference
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    </tr>
</table>








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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center; width: 10%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex103.htm">10.3+</a></span></td>
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    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex104.htm">10.4+</a></span></td>
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    on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif">
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex105.htm">Executive
    Employment Agreement of Chief Financial Officer, dated October 21, 2022 (incorporated by reference to Exhibit 10.5 to our Registration
    Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex106.htm">10.6+</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex106.htm">Executive
    Employment Agreement of Chief Operating Officer, dated October 21, 2022 (incorporated by reference to Exhibit 10.6 to our Registration
    Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex107.htm">10.7+</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex107.htm">2022
    Equity Incentive Plan of Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 10.7 to our Registration Statement
    on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex108.htm">Purchase
    &amp; Settlement Agreement, dated August 6, 2018, between Torchlight Energy Resources, Inc., Hudspeth Oil Corporation, Founders Oil
    &amp; Gas, LLC, Founders Oil &amp; Gas Operating, LLC, Wolfbone Investments, LLC and McCabe Petroleum Corporation (incorporated by
    reference to Exhibit 10.8 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex109.htm">10.9</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex109.htm">Purchase
    Agreement dated April 4, 2016, by and among McCabe Petroleum Corporation, Torchlight Energy Resources, Inc. and Torchlight Energy,
    Inc. (incorporated by reference to Exhibit 10.9 to our Registration Statement on Form S-1, as amended, effective as of November 18,
    2022 (File No. 333-266143)).</a></span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex105.htm">10.10</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex105.htm">Option
    Agreement, by and among Torchlight Energy, Inc., Torchlight Hazel, LLC, Masterson Hazel Partners, LP and McCabe Petroleum Corporation,
    dated August 13, 2020 (incorporated by reference to Exhibit 10.10 to our Registration Statement on Form S-1, as amended, effective
    as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex106.htm">10.11</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex106.htm">First
    Amendment to Option Agreement, by and among Torchlight Energy, Inc., Torchlight Hazel, LLC, Masterson Hazel Partners, LP and McCabe
    Petroleum Corporation, dated September 18, 2020 (incorporated by reference to Exhibit 10.11 to our Registration Statement on Form
    S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex107.htm">10.12</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex107.htm">Second
    Amendment to Option Agreement, by and among Torchlight Energy, Inc., Torchlight Hazel, LLC, Masterson Hazel Partners, LP and McCabe
    Petroleum Corporation, dated April 15, 2021 (incorporated by reference to Exhibit 10.12 to our Registration Statement on Form S-1,
    as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex108.htm">10.13</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex108.htm">Secured
    Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Meta Materials, Inc., as holder, dated October 1, 2021 (incorporated
    by reference to Exhibit 10.13 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No.
    333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex1015.htm">10.14</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex1015.htm">First
    Amendment to Secured Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Meta Materials, Inc., as holder, dated
    September 2, 2022 (incorporated by reference to Exhibit 10.14 to our Registration Statement on Form S-1, as amended, effective as
    of November 18, 2022).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex1016.htm">10.15</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522238430/d302576dex1016.htm">Loan
    Agreement between Meta Materials, Inc. and Next Bridge Hydrocarbons, Inc., dated September 2, 2022 (incorporated by reference to
    Exhibit 10.15 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex1016.htm">10.16</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex1016.htm">Participation
    Agreement by and between McCabe Petroleum Corporation, Gregory McCabe and Hudspeth Oil Corporation, dated September 23, 2014 (incorporated
    by reference to Exhibit 10.16 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No.
    333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522257967/d302576dex1017.htm">10.17</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522257967/d302576dex1017.htm">Amendment
    to Participation Agreement, by and between McCabe Petroleum Corporation, Gregory McCabe and Hudspeth Oil Corporation, dated January
    5, 2015 (incorporated by reference to Exhibit 10.17 to our Registration Statement on Form S-1, as amended, effective as of November
    18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522257967/d302576dex1018.htm">10.18</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522257967/d302576dex1018.htm">Second
    Amendment to Participation Agreement, by and between McCabe Petroleum Corporation, Gregory McCabe and Hudspeth Oil Corporation, dated
    December 31, 2015 (incorporated by reference to Exhibit 10.18 to our Registration Statement on Form S-1, as amended, effective as
    of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
</table>

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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center; width: 10%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522257967/d302576dex1019.htm">10.19</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left; width: 90%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522257967/d302576dex1019.htm">Form
    of Conversion Agreement, dated March 9, 2020, by and between Torchlight Energy Resources, Inc., Hudspeth Oil Corporation and each
    of the previous holders of 16% Series C Unsecured Convertible Promissory Notes (incorporated by reference to Exhibit 10.19 to our
    Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex1020.htm">10.20</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522266786/d302576dex1020.htm">Amendment
    to Tax Matters Agreement, between Next Bridge Hydrocarbons, Inc. and Meta Materials, Inc. (incorporated by reference to Exhibit 10.20
    to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983522000856/nbh_ex10-2.htm">10.21</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983522000856/nbh_ex10-2.htm">5%
    Unsecured Promissory Note by Next Bridge Hydrocarbons, Inc. in favor of Greg McCabe, dated December 21, 2022 (incorporated by reference
    to Exhibit 10.21 to our Current Report on Form 8-K, filed December 27, 2022).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000264/ex10-1.htm">10.22</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000264/ex10-1.htm">Form of Contribution Agreement between the Orogrande Owner and Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed May 16, 2023).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000244/nbh-ex10_1.htm">10.23+</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000244/nbh-ex10_1.htm">Form
    Performance Stock Option Agreement (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q, filed May 15,
    2023).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000192/nbh-ex10_1.htm">10.24</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000192/nbh-ex10_1.htm">Second Amendment to Secured Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Meta Materials, Inc., as holder, dated March 31, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed April 5, 2023).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000192/nbh-ex10_2.htm">10.25</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000192/nbh-ex10_2.htm">Second Amendment to Loan Agreement between Meta Materials, Inc. and Next Bridge Hydrocarbons, Inc., dated March 31, 2023 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed April 5, 2023).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000333/nbh_ex10-1.htm">10.26</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000333/nbh_ex10-1.htm">First
    Amendment to Unsecured Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Gregory McCabe, dated June 16, 2023
    (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed June 26, 2023).</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><a href="nbh-ex10_27.htm">10.27</a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><a href="nbh-ex10_27.htm">Contribution Agreement, by and among Next Bridge Hydrocarbons, Inc., Gregory McCabe, and McCabe Petroleum Company, dated July 25, 2023.*</a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex211.htm">21.1</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119312522194228/d302576dex211.htm">List
    of subsidiaries of Next Bridge Hydrocarbons, Inc. </a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="nbh-ex23_1.htm">23.1</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="nbh-ex23_1.htm">Consent of BF Borgers, CPA (independent registered public accountant).*</a></span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.2</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent
    of Woodburn and Wedge (included in Exhibit 5.1).*</span></td>
    </tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><a href="nbh-ex23_3.htm">23.3</a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: left"><a href="nbh-ex23_3.htm">Consent of Independent Petroleum Engineers.*</a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">24.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Power
    of Attorney (Included on the Signature Pages to the Registration Statement).*</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000181/nbh_ex99-1.htm">99.1</a></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><a href="https://www.sec.gov/Archives/edgar/data/1936756/000119983523000181/nbh_ex99-1.htm">Report of Independent Petroleum Engineers (incorporated by reference to Exhibit 99.1 to our Annual Report on Form 10-K for the year ended December 31, 2022, as amended on Form 10-K/A filed on May 1, 2023).</a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="nbh-ex107.htm">107</a></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="nbh-ex107.htm">Filing Fee Table.*</a></span></td></tr>
</table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#8224;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Certain
    exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant hereby
    agrees to furnish a copy of any omitted exhibits and schedules to the SEC upon its request.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">+</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Indicates
    a management contract or compensatory plan</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Filed
    herewith.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0%"></td><td style="width: 5%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">**</span></td><td style="text-align: justify; width: 95%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">To
be filed by an amendment to this registration statement on Form S-1 statement.</span></td>
</tr></table>

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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; color: Black; margin-top: 0; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0"></td><td style="width: 0.3in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
Statement Schedules</span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
financial statement schedules are provided because the information called for is not required or is shown either in our consolidated
financial statements or notes thereto.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
17. Undertakings.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)(1)
The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment
to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate offering price set forth in the &#147;Calculation of Registration
Fee&#148; table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material change to such information in the registration statement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)
The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)
The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SIGNATURES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the requirements of the Securities Act, Next Bridge Hydrocarbons, Inc. has duly caused this amendment to registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Fort Worth, Texas, on July 26, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Black">&#160;</p>


<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #231F20"><b>NEXT
    BRIDGE HYRDOCARBONS, INC.</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 60%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 3%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #231F20">By:
    </span></td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 37%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #231F20">/s/
    Clifton DuBose, Jr.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #231F20">Name:
    Clifton DuBose, Jr.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #231F20">Title:
    Chief Executive Officer and President</span></td></tr>
  </table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SIGNATURES
AND POWER OF ATTORNEY</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
person whose signature appears below constitutes and appoints Clifton DuBose, Jr., and Lucas T. Hawkins, and each of them singly, his
or her true and lawful&#160;attorneys-in-fact&#160;and agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any and all (i) amendments (including post-effective amendments)
and additions to this registration statement and (ii) any and all additional registration statements pursuant to Rule 462(b) of the Securities
Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said&#160;attorney-in-fact&#160;and agents full power and authority to do and perform each and every act in person,
hereby ratifying and confirming all that said&#160;attorneys-in-fact&#160;and agents or either of them or their or his or her substitute
or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.&#160;</span></p>

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    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><b>Signature</b></span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">/s/
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">July
    26, 2023</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gregory
    McCabe</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">/s/
    Clifton DuBose, Jr.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
    <span style="color: Black">Executive Officer, President &#160;&#160;</span></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">July
    26, 2023</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Clifton
    DuBose, Jr.</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">and
    Director</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">/s/
    Lucas T. Hawkins</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lucas
    T. Hawkins</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Chief
    Financial Officer</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">July
    26, 2023</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">/s/
    Robert L. Cook</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Robert
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Director</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">July <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">26,
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">/s/
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mia
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Director</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">July
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">/s/
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Kristin
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  </table>




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{"company-data": {"conformed-name": "Next Bridge Hydrocarbons, Inc.", "cik": "0001936756", "assigned-sic": "1311", "irs-number": "872538731", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-273442", "film-number": "231112310"}, "business-address": {"street1": "6300 RIDGLEA PLACE", "street2": "SUITE 950", "city": "FORT WORTH", "state": "TX", "zip": "76116", "phone": "817-438-1937"}, "mail-address": {"street1": "6300 RIDGLEA PLACE", "street2": "SUITE 950", "city": "FORT WORTH", "state": "TX", "zip": "76116"}, "former-company": {"former-conformed-name": "OilCo Holdings, Inc.", "date-changed": "20220706"}}
As
filed with the U.S. Securities and Exchange Commission on July 26, 2023.
Registration
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Next Bridge Hydrocarbons, Inc.
(Exact
name of registrant as specified in its Charter)
Nevada
1311
87-2538731
(State
    or other jurisdiction of
incorporation or organization)
(Primary
Standard Industrial
Classification
Code Number)
6300 Ridglea Place
,
Suite 950
Fort Worth
,
TX
76116
(817)
438-1937
(I.R.S.
    Employer
Identification No.)
(Address,
including zip code, and telephone number, including area code, of registrant's principal executive office)
Clifton
DuBose
Chief
Executive Officer
6300 Ridglea Place, Suite 950
Fort
Worth, TX 76116
(817) 438-1937
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
With
copies to:
Jack
E. Jacobsen
Jason
A. Schumacher
O'Melveny
& Myers LLP
2501
N. Harwood Street, 17 Floor
Dallas,
TX 75201
214-647-9270
Approximate
date of commencement of proposed sale to the public
: As soon as practicable after the effective date of this registration statement.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box.
x
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
o
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated filer
o
Accelerated
    filer
o
Non-accelerated filer
x
Smaller reporting company
x
Emerging Growth company
x
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.
o
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date
as the Commission acting pursuant to said section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not issue these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT
TO COMPLETION DATED JULY 26, 2023
Prospectus
Next
Bridge Hydrocarbons, Inc.
Up
to        Shares of Common Stock Issuable Upon the Exercise of Subscription Rights to Receive Shares of
Common Stock of Future Subsidiary
Subscription
Rights to Receive Shares of Common Stock of Future Subsidiary
This
prospectus is being furnished to you as a holder of common stock of Next Bridge Hydrocarbons, Inc. ("NBH",
"Next Bridge", "we", "us", "our" or the "Company") in connection
with the planned distribution by NBH to each eligible holder of its common stock as of the close of business
on        , 2023, which shall be sixty (60) days following the date of this prospectus (the
"record date") at no charge, non-transferable subscription rights (the "subscription rights") to receive
shares of common stock, par value $0.001 per share, of a new subsidiary of NBH to be formed in the future ("Newco").
As further described in this prospectus, Newco, once formed, will be the owner of up to a ten percent (10%) back-in working
interest option for the Orogrande Prospect exercisable following the point in time at which the proceeds of all production from all
operations conducted on the Orogrande Prospect (exclusive of royalty, overriding royalty and taxes chargeable to the working
interest) equals the actual cost incurred by NBH and its predecessors in drilling, testing, equipping and the cost of operating the
wells located on the Orogrande Prospect inclusive of overhead charge (the "Back-In Interest"), an option originally
granted to Mr. Gregory McCabe pursuant to that certain Participation Agreement, dated September 23, 2014, by and among Mr.
McCabe, Hudspeth Oil Corporation and McCabe Petroleum Corporation ("MPC"), an entity exclusively owned and controlled
by Mr. McCabe, and up to one hundred percent (100%) of the interest currently held by MPC in the drilling project located on over
1,150 acres in Vermillion Parish, Louisiana (the "Bronco Prospect"). The Bronco Prospect is subject to the
Reserved Bronco Overriding Royalty Interest and the Reserved Bronco Back-In Interest as defined and further described in this
prospectus. NBH will distribute to each eligible holder of its common stock as of the record date one subscription right for
each full common share owned by that stockholder as of the record date (the "rights offering").
To
be eligible for the subscription rights, a stockholder must have shares of NBH common stock registered with the Company's transfer
agent as of the record date and maintain such registration for a period of 180 days thereafter (the "holding period").
Each subscription right will entitle its holder to receive from NBH one share of Newco common stock.
The
subscription rights will expire if they are not exercised by 5:00 p.m., New York City time, on       ,
2028 (the "expiration date"). NBH may extend the expiration date but in no event will NBH extend the expiration
date beyond          , 2029. The rights offering is subject to the satisfaction
or waiver of certain conditions. In addition, NBH has the right to withdraw and cancel the rights offering if, at any time prior to the
record date, the board of directors of the Company determines, in its sole discretion, that the rights offering is not in the best
interest of NBH or its stockholders, or that market conditions are such that it is not advisable to consummate the rights offering. See
"The Rights Offering—Conditions, Withdrawal and Cancellation."
Mr.
McCabe, the chairman of the board of directors of NBH, beneficially owns approximately 27.8% of the outstanding common stock of NBH.
Mr. McCabe and MPC have executed that certain Contribution Agreement dated as of July 25, 2023 among Mr. McCabe, MPC and NBH (the "Contribution
Agreement"). Pursuant to the terms of the Contribution Agreement, Mr. McCabe will contribute an amount of the Back-In Interest
and MPC will contribute an amount of the Bronco Prospect (such contributed portion, the "Bronco Assets") in proportion
to the percentage of shares of common stock of NBH that are directly registered in the name of the beneficial owner with the Company's
transfer agent on the record date, whether previously registered directly or currently held through a bank, broker or other nominee
who instruct such bank, broker or other nominee, and transferred to the beneficial owner on the books and records maintained by NBH's
transfer agent on or prior to the record date, provided that such shares remain directly registered for the holding period. Following
the expiration of the holding period, each such registered beneficial owner will be the registered holder of the distributed
subscription rights in book-entry form in a new account with NBH's transfer agent.
You
should carefully consider whether to exercise your subscription rights before the expiration date. All exercises of subscription
rights are irrevocable. You should carefully read "Risk Factors" beginning on page 7 and all other information included
in this prospectus before you decide to exercise your subscription rights as there will be risks in acquiring and owning Newco common
stock. NBH's board of directors is not making any recommendation regarding your ultimate exercise of the subscription rights.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
date of this prospectus is      , 2023
Table
of Contents
ABOUT THIS PROSPECTUS
i
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
ii
DEFINITIONS
iv
PROSPECTUS SUMMARY
1
RISK FACTORS
7
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
24
USE OF PROCEEDS
29
DETERMINATION
    OF OFFERING PRICE
BUSINESS
30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
39
MANAGEMENT
53
EXECUTIVE COMPENSATION
58
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
61
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
62
DESCRIPTION OF OUR CAPITAL STOCK
64
PLAN OF DISTRIBUTION
67
THE RIGHTS OFFERING
68
SELLING STOCKHOLDERS
72
LEGAL MATTERS
72
EXPERTS
72
WHERE YOU CAN FIND MORE INFORMATION
72
INDEX TO FINANCIAL STATEMENTS
73
ABOUT
THIS PROSPECTUS
You
should rely only on the information that we have provided or incorporated by reference in this prospectus, any related free writing prospectus
that we may authorize to be provided to you and the other information to which we refer you. We have not authorized anyone to provide
you with different or additional information. No dealer, salesperson or other person is authorized to give any information or to represent
anything not contained or incorporated by reference in this prospectus or any related free writing prospectus that we may authorize to
be provided to you. If anyone provides you with different or additional information, you should not rely on it. You should assume that
the information in this prospectus or any related free writing prospectus is accurate only as of the date on the cover of the document
and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus or any related free writing prospectus, or any sale of a security. Our business,
financial condition, results of operations and prospects may have changed since those dates.
We
urge you to carefully read this prospectus, together with the information incorporated herein by reference as described under the heading
"Where You Can Find More Information."
i
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This
prospectus contains certain forward-looking statements and information relating to our business that are based on the beliefs of our
management as well as assumptions made by and information currently available to our management. All statements other than statements
of current or historical facts are forward-looking statements. Forward-looking statements include statements containing words such as
"may," "anticipate," "believe," "estimate," "expect," "intend,"
"plan," "forecasts," "projections," and similar expressions. Forward-looking statements include,
without limitation, the statements regarding our strategy, future plans for development and production and other strategic options, future
expenses and costs and future liquidity and capital resources. Forward looking statements involve a number of risks, assumptions and
uncertainties which may cause actual results to differ materially from those contained in this prospectus. In light of these risks, uncertainties
and assumptions, the future events and trends discussed in this prospectus may not occur and actual results could differ materially and
adversely from those anticipated or implied in the forward-looking statements.
These
forward-looking statements are made based upon detailed assumptions and reflect management's current expectations and beliefs.
While we believe that these assumptions underlying the forward-looking statements are reasonable, we caution that it is very difficult
to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect actual results. The risks
and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements
include but are not limited to:
●
general
    competitive conditions, including actions our competitors may take to grow their businesses;
●
changes
    to payment terms, the discount or margin on products or other terms with our suppliers;
●
risks
    associated with data privacy, information security and intellectual property;
●
work
    stoppages or increases in labor costs;
●
our
    ability to attract and retain employees;
●
development
    costs of our current or future properties;
●
timing
    and success of our drilling activities;
●
amount
    and timing of future production of oil and natural gas;
●
our
    ability to successfully implement our strategic initiatives, including amount, nature and timing of capital expenditures;
●
the
    usual hazards associated with the oil and natural gas industry, including fires, well blowouts, pipe failure, spills, explosions
    and other unforeseen hazards;
●
the
    numerous uncertainties inherent in estimating quantities of oil and natural gas reserves and actual future production rates and associated
    costs;
●
operating
    costs including lease operating expenses, administrative costs and other expenses;
●
the
    volatility of prices and supply of, and demand for, oil and natural gas;
●
changes
    in regulatory requirements and legislation governing our business, including sustainability;
●
the
    amount of our indebtedness and ability to comply with covenants applicable to any future debt financing;
●
our
    ability to access the credit and capital markets to satisfy future capital and liquidity requirements on acceptable terms;
ii
●
if
    we are not able to successfully execute on our future operating plans, we may not be able to continue as a going concern;
●
adverse
    results from litigation, governmental investigations or tax-related proceedings or audits;
●
changes
    in accounting standards;
●
impact
    and cost of energy conservation and other sustainability efforts;
●
exploration
    and development risks, which could lead to environmental damage, injury and loss of life or the destruction of property;
●
proximity
    and capacity of oil, natural gas and other pipelines, transportation and support infrastructure to production facilities;
●
availability
    of consumables and raw materials and drilling and processing equipment;
●
adverse
    weather conditions, natural disasters or other events;
●
the
    ability to successfully estimate the impact of litigation matters;
●
our
    ability to initiate and maintain discussions with third parties regarding strategic options; and
●
the
    other risks and uncertainties detailed in the section titled "Risk Factors" herein and described in "Risk Factors"
    in Part 1, Item 1A of our annual report on Form 10-K for the year ended December 31, 2022, as amended on Form 10-K/A filed on May
    1, 2023.
Should
one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes
may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary
statements in this paragraph. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise after the date of this prospectus except to the extent required by law.
iii
DEFINITIONS
The
following are abbreviations and definitions of terms commonly used in the oil and gas industry and in this prospectus. Natural gas equivalents
and crude oil equivalents are determined using the ratio of six Mcf to one barrel. All references to "us", "our",
"we", "NBH", the "Company", or "Next Bridge" mean Next Bridge Hydrocarbons, Inc.
and where applicable, its consolidated subsidiaries.
"
Bbl
"
means a barrel of U.S. 42 gallons of oil.
"
Bcf
"
means one billion cubic feet of natural gas.
"
BOE
"
means one barrel of oil equivalent.
"
Completion
"
means the installation of permanent equipment for the production of oil or gas.
"
Condensate
"
means natural gas in liquid form produced in connection with natural gas wells.
"
Exploratory
well
" means a well drilled to find a new field or to find a new productive reservoir in a field previously found to be productive
of oil or natural gas in another reservoir or to extend a known reservoir.
"
Gross
"
when used with respect to acres or wells, production or reserves refers to the total acres or wells in which we or another specified
person has a working interest.
"
MBbls
"
means one thousand barrels of oil.
"
Mcf
"
means one thousand cubic feet of natural gas.
"
Net
"
when used with respect to acres or wells, refers to gross acres of wells multiplied, in each case, by the percentage working interest
owned by us.
"
NGL
"
refers to natural gas liquids, which is composed exclusively of carbon and hydrogen.
"
Oil
"
means crude oil or condensate.
"
Operator
"
means the individual or company responsible for the exploration, development, and production of an oil or gas well or lease.
"
Proved
developed non-producing
" means reserves (i) expected to be recovered from zones capable of producing but which are shut-in
because no market outlet exists at the present time or whose date of connection to a pipeline is uncertain or (ii) currently behind the
pipe in existing wells, which are considered proved by virtue of successful testing or production of offsetting wells.
"
Proved
developed producing
" means reserves expected to be recovered from currently producing zones under continuation of present operating
methods. This category includes recently completed shut-in gas wells scheduled for connection to a pipeline in the near future.
"
Proved
developed reserves
" means reserves that can be expected to be recovered through existing wells with existing equipment or operating
methods.
"
Proved
reserves
" means the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating
conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided
by contractual arrangements.
"
Proved
undeveloped reserves
" means reserves that are expected to be recovered from new wells on undrilled acreage, or from existing
wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those drilling
locations offsetting productive wells that are reasonably certain of production when drilled or where it can be demonstrated with certainty
that there is continuity of production from the existing productive formation.
iv
"
Recompletion
"
means the completion for production of an existing well bore in another formation from which the well has been previously completed.
"
Royalty
"
means an interest in an oil and gas lease that gives the owner of the interest the right to receive a portion of the production from
the leased acreage (or of the proceeds of the sale thereof), but generally does not require the owner to pay any portion of the costs
of drilling or operating the wells on the leased acreage. Royalties may be either landowner's royalties, which are reserved by
the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of
the leasehold in connection with a transfer to a subsequent owner.
"
SEC
"
means the United States Securities and Exchange Commission.
"
Working
interest
" means an interest in an oil and gas lease that gives the owner of the interest the right to drill for and produce
oil and gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations. The share
of production to which a working interest owner is entitled will always be smaller than the share of costs that the working interest
owner is required to bear, with the balance of the production accruing to the owners of royalties. For example, the owner of a 100% working
interest in a lease burdened only by a landowner's royalty of 12.5% would be required to pay 100% of the costs of a well but would
be entitled to retain 87.5% of the production.
v
PROSPECTUS
SUMMARY
This
summary highlights certain information contained elsewhere in this prospectus and may not contain all of the information that is important
to you. To understand fully and for a more complete description of the terms and conditions of the offering, you should read this prospectus
in its entirety, including the information presented under the section titled "Risk Factors", and the documents to which
you are referred. See "Where You Can Find More Information." Except where the context otherwise requires, or where otherwise
indicated, references to the "Company," "Next Bridge," "NBH," "we," "us,"
or "our" refer to Next Bridge Hydrocarbons, Inc. and where applicable, its consolidated subsidiaries, including Torchlight
Hazel, LLC, a Texas limited liability company, Hudspeth Oil Corporation, a Texas corporation, Hudspeth Operating, LLC, a Texas limited
liability company, Torchlight Energy, Inc., a Nevada corporation, and Wolfbone Investments, LLC, a Texas limited liability company.
The
Company
We
were incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed our name to Next Bridge Hydrocarbons, Inc. pursuant
to our Amended and Restated Articles of Incorporation filed on June 30, 2022.
We
are an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the
United States. Our primary focus has been the development of interests in an oil and gas project we hold in the Orogrande Basin in West
Texas in Hudspeth County, Texas (the "Orogrande Project"). In addition, we have minor interests in the Eastern edge of the
Midland Basin in Texas (the "Hazel Project"), and two minor well interests in Oklahoma.
We
recently spun-off from Meta Materials, Inc. ("Meta") pursuant to which we became an independent company. Prior to the spin-off,
we were a wholly-owned subsidiary of Meta.
We
operate our business through wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation, Hudspeth Oil Corporation, a Texas
corporation ("Hudspeth"), Torchlight Hazel, LLC, a Texas limited liability company, Hudspeth Operating, LLC, a Texas limited
liability company, and Wolfbone Investments, LLC, a Texas limited liability company ("Wolfbone"). In addition, we may consider
strategic options, including partnering with, or the possible sale of any or all of our assets to, third parties. We currently have five
full-time employees, and we employ consultants for various roles as needed.
As
of December 31, 2022, we had interests in three oil and gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project
in Sterling, Tom Green, and Irion Counties, Texas, and the Hunton wells in partnership with Kodiak in Central Oklahoma. (the "Oklahoma
Properties"). See the description under "Current Projects" below under Note 4, "Oil & Natural Gas Properties,"
of the financial statements included with this prospectus for information and disclosure regarding these projects, which description
is incorporated herein by reference.
Formation
of Newco; the Back-In Interest and the Bronco Prospect
Newco
will be formed in the future as a new subsidiary of NBH ("Newco"). Newco will receive up to a ten percent (10%) back-in working
interest option for the Orogrande Project exercisable following the point in time at which the proceeds of all production from all operations
conducted on the Orogrande Project (exclusive of royalty, overriding royalty and taxes chargeable to the working interest) equals the
actual cost incurred by NBH and its predecessors in drilling, testing, equipping and the cost of operating the wells located on the Orogrande
Prospect, inclusive of overhead charges (the "Back-In Interest"), an option originally granted to Mr. McCabe pursuant
to that certain Participation Agreement, dated September 23, 2014 (the "Participation Agreement"), by and among Mr. McCabe,
Hudspeth, and McCabe Petroleum Corporation ("MPC"), an entity exclusively owned and operated by Mr. McCabe, and up to
one hundred percent (100%) of the interest currently held by MPC in the drilling project located on over 1,150 acres in Vermillion Parish,
Louisiana (the "Bronco Prospect").
Pursuant
to the terms of that certain Contribution Agreement dated as of July 25, 2023 among Mr. McCabe, MPC and NBH (the "Contribution
Agreement"), Mr. McCabe will contribute an amount of the Back-In Interest and MPC will contribute an amount of the Bronco Prospect
(such contributed portion, the "Bronco Assets") in proportion to the percentage of shares of common stock of NBH that are
directly registered in the name of the beneficial owner with the Company's transfer agent, whether previously directly registered
or currently held through a bank, broker or other nominee who instruct such bank, broker or other nominee, and transferred to the beneficial
owner on the books and records maintained by NBH's transfer agent on or prior to the record date, such that each such beneficial
owner will be the registered holder of NBH's common stock, provided that such direct registration is maintained for the holding
period (defined below).
We believe that the Bronco Prospect exposes the Company to a large
upside drilling deal and is our first step towards diversifying our activities beyond the Orogrande Basin.
1
The
Bronco Prospect is a high impact onshore south Louisiana drilling prospect located in Vermillion Parish, Louisiana. The primary
pay targets of the Bronco Prospect are the Alliance Sands at an approximate depth of the 14,500 feet. The size of the exploration target
is over 900 acres and has potential for three locations. The estimated P50 reserve potential is 100 Bcf and 4 million barrels
of condensate; while expansive capital would be required to reach the following levels, Mr. McCabe has received information from a third
party geologist that the present value discounted at an annual rate of 10% reserve potential is 242 Bcf of natural gas and 12 million
Bbl of oil. The Bronco Prospect was generated using subsurface geology and 3-D seismic data to identify and delineate the 3-way
downthrown fault closure. The Bronco Prospect is directly upthrown to existing production from Alliance sands and may be juxtaposed and
have a similar gas water contact as the existing production. Potential secondary targets on the Bronco Prospect are the Mulvey sands
which are productive in the area. The oil and gas leases that constitute the Bronco Prospect are described in the Contribution Agreement.
Pursuant
to the Contribution Agreement, MPC will contribute its interest in the Bronco Prospect subject to a reserved twelve and half
percent (12.5%) back-in after payout working interest and a reserved overriding royalty interest. The reserved twelve and half
percent (12.5%) back-in after payout working interest will automatically go into effect at the point in time at which the proceeds
of all production from all operations conducted on the Bronco Prospect (exclusive of royalty, overriding royalty and taxes
chargeable to the working interest) equals the actual cost incurred by NBH and any third parties who contribute capital for the
drilling, testing, equipping and the cost of operating the wells located on the Bronco Prospect inclusive of overhead charges (the
"Reserved Bronco Back-In Interest"). The reserved overriding royalty interest will be an overriding royalty interest in
each of the oil and gas leases that constitute the Bronco Prospect equal to an amount that is the positive difference, if any, between
twenty-five percent (25%) and the amount of royalty that is to be paid to the lessor on the sale of the hydrocarbons associated with
such oil and gas lease (the "Reserved Bronco Overriding Royalty Interest"). The Reserved Bronco Back-In Interest and the
Reserved Bronco Overriding Royalty Interest are further described in the Contribution Agreement. The Reserved Bronco Back-In
Interest and the Reserved Bronco Overriding Royalty Interest will be reserved by MPC and will be co-owned by MPC, Mr. McCabe and
consulting geologists who have helped to develop and evaluate the Bronco Prospect (the "Bronco Exploration Team"). The
"Bronco Assets" as used in this prospectus shall mean all the assets that compromise the Bronco Prospect subject to the
Bronco Back-In Interest and the Bronco Overriding Royalty Interest, as further described in the Contribution Agreement.
Market
Opportunity
The
market for oil and natural gas that we may produce depends on factors beyond our control, including the extent of domestic production
and imports of oil and natural gas, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for
oil and natural gas, the marketing of competitive fuels, and the effects of state and federal regulation. The oil and natural gas industry
also competes with other industries in supplying the energy and fuel requirements of industrial, commercial, and individual consumers.
Our
oil production, if any, is expected to be sold at prices tied to the spot oil markets. Our natural gas production, if any,
is expected to be sold under short-term contracts and priced based on first of the month index prices or on daily spot market prices.
We will rely on our operating partners to market and sell our production, if any.
Regulatory
Framework
Our
oil and natural gas development operations are subject to stringent and complex federal, state, tribal, regional and local environmental,
health and safety laws and regulations governing, among other factors, worker safety and health, the discharge and disposal of substances
into the environment, and the protection of the environment and natural resources. Numerous governmental entities, including the Environmental
Protection Agency ("EPA") and analogous state and local agencies, (and, under certain laws, private individuals) have the
power to enforce compliance with these laws and regulations and any permits issued under them. These laws and regulations may, among
other things: (i) require permits to conduct exploration, drilling, water withdrawal, wastewater disposal and other production related
activities; (ii) govern the types, quantities and concentrations of substances, including emissions of CO2, methane and certain other
greenhouse gases ("GHG"), that may be disposed or released into the environment or injected into formations in connection
with drilling or production activities, and the manner of any such disposal, release, or injection; (iii) limit or prohibit construction
or drilling activities or require formal mitigation measures in sensitive areas such as wetlands, wilderness areas or areas inhabited
by endangered or threatened species; (iv) require investigatory and remedial actions to mitigate pollution conditions arising from the
Company's operations or attributable to former operations; (v) impose safety and health restrictions designed to protect employees
and others from exposure to hazardous or dangerous substances; and (vi) impose obligations to reclaim and abandon well sites and pits.
Certain
existing environmental and occupational safety and health laws and regulations to which our business operations are subject
include the Clean Air Act, as amended (the "CAA"), the Comprehensive Environmental Response, Compensation, and
Liability Act ("CERCLA"), the federal Resource Conservation and Recovery Act ("RCRA"), Federal Water Pollution
Control Act of 1972 as amended by the Oil Pollution Act of 1990, EPA rules to reduce methane emissions from new, modified or
reconstructed sources in the oil and natural gas sector, including implementation of a leak detection and repair ("LDAR")
program under the CAA's New Source Performance Standards in 40 C.F.R. Part 60, Subpart OOOOa ("Quad Oa"), the federal
Occupational Safety and Health Act ("OSHA") and other state equivalent laws and regulations. For further discussion of the
risks to our results of operations arising out of our environmental regulatory compliance, see "Risks Relating to Our
Business", including the following risk factors "—
Our operations are heavily dependent on current environmental
regulation, changes in which we cannot predict
," "—
Government regulatory initiatives relating to hydraulic
fracturing could result in increased costs and additional operating restrictions or delays
," and "—
Climate
change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil
and natural gas that we produce.
"
2
Emerging
Growth Company
We
are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities
Act"), as modified by the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"). As an emerging growth company,
we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public reporting
companies that are not emerging growth companies. These provisions include:
●
Being
    permitted to have only two years of audited financial statements and only two years of related selected financial data and management's
    discussion and analysis of financial condition and results of operations disclosure;
●
An
    exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting
    pursuant to the Sarbanes-Oxley Act of 2002, as amended ("SOX");
●
Reduced
    disclosure about executive compensation arrangements in our periodic reports, registration statements and proxy statements; and
●
Exemptions
    from the requirements to seek non-binding advisory votes on executive compensation or golden parachute arrangements.
We
would cease to be an emerging growth company on the earliest of (i) the first fiscal year after our annual gross revenues are $1.235
billion or more, (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity
securities pursuant to an effective registration statement (iii) the date on which we have, during the immediately preceding three-year
period, issued more than $1.0 billion in non-convertible debt securities or (iv) the end of any fiscal year in which the market value
of our common stock held by non-affiliates is $700 million or more as of the end of the second quarter of that fiscal year.
The
JOBS Act additionally permits emerging growth companies to take advantage of an extended transition period to comply with new or revised
accounting standards applicable to public reporting companies. We have elected to avail ourselves of the extended transition period.
During the extended transition period, it may be difficult to compare our financial results with the financial results of a public reporting
company that complies with accounting.
Smaller
Reporting Company
We
are a "smaller reporting company" as defined by Rule 12b-2 of the Securities Exchange Act of 1934 (the "Exchange Act").
As a "smaller reporting company," the disclosure we will be required to provide in our SEC filings are less than it would
be if we were not considered a "smaller reporting company." Specifically, "smaller reporting companies" are able
to provide simplified executive compensation disclosures in their filings may be exempt from the provisions of Section 404(b) of SOX requiring that independent registered public accounting firms provide an attestation report on the effectiveness
of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including,
among other things, being permitted to provide two years of audited financial statements in annual reports rather than three years. Decreased
disclosures in our SEC filings due to our status as a "smaller reporting company" may make it harder for investors to analyze
our results of operations and financial prospects. We will remain a smaller reporting company until the last day of the fiscal year in
which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual
revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds
$700 million as of the prior June 30.
Corporate
Information
Our
executive office is located at 6300 Ridglea Place, Suite 950, Fort Worth, Texas 76116, and our telephone number is (817) 438-1937. We
have filed or will file annual, quarterly and current reports, proxy statements and other documents with the SEC under the Exchange Act.
The public can obtain any documents that we file with the SEC at www.sec.gov. We also make such information and documents available free
of charge on our website (nextbridgehydrocarbons.com) as soon as reasonably practicable after we file such material with, or furnish
it to, the SEC. Information contained on or accessible through our website shall not be deemed a part of this prospectus and shall not
be incorporated by reference herein.
3
The
Rights Offering
The
following is a brief summary of some of the terms of this offering and is qualified in its entirety by reference to the more detailed
information appearing elsewhere in this prospectus.
Securities
    offered:
NBH
    is distributing, at no charge, to eligible holders of shares of NBH common stock as of the close of business on , 2023, which
    date the Company may extend in its sole discretion (the "record date"), non-transferable subscription rights to acquire shares
    of Newco common stock. NBH will distribute to each eligible holder of its common stock that is registered with the Company's
    transfer agent as of the record date and maintains such registration for a period of 180 days thereafter, which period may be
    shortened by the Company in its sole discretion (the "holding period") one subscription right for each full common
    share owned by that stockholder and directly registered with the Company's transfer agent as of the record date. Each subscription
    right will entitle the holder to acquire from NBH one share of Newco common stock.
Eligible
    holder:
In
                                            order to be an eligible holder of shares of NBH common stock to receive non-transferable
                                            subscription rights, you cannot be (i) a bank, broker or other nominee that is determined
                                            by the Company in its sole discretion to be holding shares for other entities or individuals
                                            or (ii) a beneficial owner of NBH common stock that is being held by a bank, broker or other
                                            nominee.
If
    your shares of NBH common stock are currently held in a retirement account, such as a 401(k), ROTH IRA or similar account,
    you should check with the custodian of such account as to whether the shares can be registered with the Company's transfer
    agent in the individual holder's name.
Use
    of proceeds:
Neither
    NBH nor Newco will receive any proceeds from the exercise of the subscription rights.
Market
    for Newco common stock:
It
    is currently anticipated that the Newco common stock will not be listed for trading on any stock exchange or market nor will the
    shares of Newco common stock be eligible for electronic transfer through the Depository Trust Company ("DTC")
    or any other established clearing corporation. Accordingly, there would not be any public trading market for the Newco common
    stock, nor is there any expectation at this time for a public market to develop.
Rights
    offering conditions:
NBH's
                                            obligation to close the rights offering and to distribute the subscription rights is conditioned
                                            upon the satisfaction or waiver of the following conditions:
●       the
    Company's board of directors (the "Board") shall have authorized and approved the offering and not withdrawn such
    authorization and approval, and shall have declared the dividend of the subscription rights to eligible NBH stockholders;
●       the
    Contribution Agreement between NBH, Mr. McCabe and MPC with respect to the Back-In Interest and Bronco
    Assets shall have been executed by each party thereto and all actions required to be performed prior to the closing of the
    rights offering shall have been completed;
4
●       the
                                            SEC shall have declared effective our Registration Statement on Form S-1, of which this prospectus
                                            forms a part, under the Securities Act and no stop order suspending the effectiveness of
                                            the Registration Statement shall be in effect, and no proceedings for such purpose shall
                                            be pending before or threatened by the SEC; and
●       no
    order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition
    preventing consummation of the separation shall be in effect, and no other event outside the control of NBH shall have occurred or
    failed to occur that prevents the consummation of the separation.
The
    fulfilment of the foregoing conditions will not create any obligation on the part of NBH to close the rights offering. In addition,
    NBH reserves the right to withdraw and cancel the rights offering if, at any time prior to the record date, the Board determines,
    in its sole discretion, that the offering is not in the best interest of NBH or its stockholders, or that market conditions are such
    that it is not advisable to consummate the rights offering. See "The Rights Offering—Conditions, Withdrawal and Cancellation."
If
    NBH cancels the rights offering, due to the lack of satisfaction of one or more conditions to the rights offering or otherwise, the
    subscription rights will not be distributed. NBH may also extend the rights offering, including the record date. If NBH elects
    to extend the record date, it will issue a press release announcing the extension no later than 9:00 a.m., New York City time, on
    the next business day after the most recently announced record date.
Material
    U.S. federal income tax considerations:
Although
                                            the treatment of the receipt, sale, exercise, expiration and cancellation of the subscription
                                            rights for U.S. federal income tax purposes is not entirely clear:
●       A
    stockholder that receives a subscription right from NBH should expect to have taxable dividend income equal to the fair market value
    (if any) of the subscription right on the date of its distribution by NBH, and
●       A
    stockholder that allows a subscription right to expire without exercising it should expect to have short-term capital loss upon the
    expiration of such right in an amount equal to such stockholder's tax basis (if any) in such right.
Because
    a short-term capital loss generally cannot be used to offset taxable dividend income, you may owe tax as a result of the receipt
    of a subscription right from NBH even if you take no action to exercise the subscription right.
5
For
    a detailed discussion of the material U.S. federal income tax considerations relating to the receipt, sale, exercise, expiration
    and cancellation of the subscription rights, see "Material U.S. Federal Income Tax Considerations." Stockholders should
    consult their own tax advisors regarding the U.S. federal, state and local and non-U.S. income, estate and other tax considerations
    relating to the receipt, sale, exercise, expiration and cancellation of the subscription rights in light of their particular circumstances.
Procedures
    to receive subscription rights:
To
                                            receive your subscription rights, you must take the following steps:
●       If
    you are an eligible holder and registered holder of NBH common stock, and you maintain such registration with the Company's
    transfer agent as of the record date and for the holding period, you will be eligible to receive a rights certificate representing
    the number of shares of Newco common stock you may acquire pursuant to your subscription right.
●       If
    you are a beneficial owner of shares of NBH common stock that are registered in the name of a broker, dealer, bank or other nominee,
    you will be eligible to receive subscription rights at such time as you have instructed such broker, dealer, bank or other nominee
    to transfer your shares of common stock to you on the books and records maintained by the transfer agent on or prior to the record
    date such that you become the registered holder of NBH's common stock. Following such registration and provided that
    you maintain such registration for the holding period, you will receive a rights certificate representing a right to the number
    of shares of Newco common stock you may acquire pursuant to your subscription right.
Procedure
    for exercising rights:
At
    such time as the Company contributes the Back-In Interest and the Bronco Assets to Newco, the Company intends to spin-off
    Newco such that Newco will be an independent company. Each of NBH and Newco will be an independent company. Each holder of subscription
    rights will be entitled to one share of common stock of Newco for each subscription right held by it without the payment of any consideration.
Reasons
    for directly registering NBH shares:
The
    Board has determined that pursuing a rights offering is in the best interests of NBH and its stockholders in that it would provide
    incentive to all stockholders of the Company who hold their shares in "street name" to directly register such shares
    in the name of the stockholders with NBH's transfer agent.
Subscription
    agent:
American
    Stock Transfer & Trust Company, LLC.
Information
    agent:
D.F.
    King, Inc.
Risk
    factors:
See
    the "Risk Factors" section contained in this prospectus and in the documents we incorporate by reference in this prospectus
    to read about factors you should consider before investing in the rights offering.
6
RISK
FACTORS
You
should carefully consider all of the information in this prospectus and each of the risks described below, which we believe are the principal
risks that we face. Some of the risks relate to our business, others to the offering and the ownership of our common stock. The risks
and uncertainties described below are not the only ones faced by us. Additional risks and uncertainties not presently known or that are
currently deemed immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition,
operating results and cash flows and the value of our common stock could be materially adversely affected.
Risks
Related to this Offering
There
is no public market for the subscription rights being offered in this offering.
There
is no established public trading market for the subscription rights being offered in this offering, and we do not expect a market to
develop. Without an active trading market, the liquidity of the subscription rights will be limited.
Newco
may receive a limited amount of the Back-In Interest and the Bronco Prospect and the Company may sell, assign, mortgage, waive or cancel
the Back-In Interest or sell, assign or mortgage the Bronco Assets.
The
amount of the Back-In Interest and the Bronco Prospect that Newco will receive is dependent on multiple factors. First, the number of
eligible holders of shares of NBH common stock is undetermined, and the Company cannot forecast how many eligible holders of shares of
NBH common stock will elect to register their shares of NBH common stock with the Company's transfer agent. Second, the Company
will control the Back-In Interest and may elect to sell, mortgage, waive, cancel or assign some or all of the Back-In Interest at any
time in the future and prior to any transfer to Newco. Similarly, the Company will control the Bronco Assets and may elect to
sell, assign or mortgage some or all of the Bronco Assets at any time in the future and prior to any transfer to Newco. In the
event that the Company needs to sell all or a portion of the Back-In Interest or the Bronco Assets to benefit the Company related
to a sale of the Company's other assets, then the Company may elect to effect such a sale. Additionally, the Company may elect
to waive or cancel all or a portion of the Back-In Interest related to the development of the Orogrande Prospect. The Company may elect
to waive, cancel or assign a portion of the Back-In Interest in order to entice the drilling of prospects on the Orogrande Project from
third parties who commit to drilling wells on the Orogrande Prospect in exchange for the Company receiving the benefits of such transaction,
which may include the Company receiving cash consideration or a right to a back-in interest on any prospect that is developed. The Company
may also elect to place a lien on the Back-In Interest or the Bronco Assets in order to secure financing for the Company. In the
event of a default on such financing, then the financial institution with such lien may elect to foreclose on the Back-In Interest or
the Bronco Assets. In the event the Company consummates any of the foregoing transactions, the subscription rights will have little
or no value.
The
Back-In Interest and the Bronco Assets may never have value.
The
value of the Back-In Interest is tied to the economic success of the Orogrande Prospect. Specifically, the Back-In Interest option
triggers upon the point in time at which the proceeds of all production from all operations conducted on the Orogrande Project
(exclusive of royalty, overriding royalty and taxes chargeable to the working interest) (the "Project Proceeds") equals
the actual cost incurred by NBH and its predecessors in drilling, testing, equipping and the cost of operating the wells located on
the Orogrande Prospect, inclusive of overhead charges (the "Project Expenses"). It is highly speculative that the Project
Proceeds will reach and exceed the Project Expenses. The current estimated amount of Project Expenses as of June 30, 2023 is
$49,245,738. See generally "Risks Related to Our Business and Growth Strategy".
7
The
Bronco Prospect presently is an undrilled collection of oil and gas leases. The Bronco Prospect will require substantial capital
investment by the Company and potentially other third parties who may invest in the Bronco Prospect now or in the future, and the Company
may never elect to spend capital on the Bronco Prospect. Assuming capital is obtained to test and explore the Bronco Prospect, it is
possible that there are not sufficient finds of hydrocarbons to justify continued drilling activities in order to make the Bronco Prospect
economically feasible. In order to secure capital to develop the Bronco Prospect, the Company may have to substantially reduce its interest
in the Bronco Prospect. Further, to the extent that the Company expends capital to develop the Bronco Prospect, the Company would anticipate
receiving back all funds it incurred prior to the equity holders of Newco receiving returns from the Bronco Prospect. It is highly
speculative that the future owners of Newco will receive proceeds from the Bronco Prospect. See generally "Risks Related to Our
Business and Growth Strategy."
The
Bronco Assets are subject to a back-in working interest and an overriding royalty interest.
The
Bronco Prospect is subject to the 12.5% Reserved Bronco Back-In Interest. The Reserved Bronco Back-In Interest will be reached at the
point in time at which the proceeds of all production from all operations conducted on the Bronco Prospect (exclusive of royalty, overriding
royalty and taxes chargeable to the working interest) equals the actual cost incurred by NBH and any third parties who contribute capital
for the drilling, testing, equipping and the cost of operating the wells located on the Bronco Prospect inclusive of overhead charges.
Upon the Bronco Prospect hitting project payout, Newco's interest in the Bronco Prospect would decrease and correspondingly its
rights to operating profits from any producing oil and gas wells as well as any potential divesture of the Bronco Prospect. Further,
the Bronco Prospect is subject to the Reserved Bronco Overriding Royalty Interest. This means that the revenues that Newco will receive
from the proceeds of the sales of hydrocarbons from future wells located on Bronco Prospect will be limited seventy-five percent, as
the mineral lessors and Bronco Exploration Team will share a twenty-five percent (25%) royalty on all sales of hydrocarbons as set forth
in the oil and gas leases related to the Bronco Prospect and the Contribution Agreement.
The
tax consequences of the receipt, sale, exercise, expiration and cancellation of the subscription rights are not certain.
The
treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights for U.S. federal income tax purposes
is not entirely clear. The Internal Revenue Service (the "IRS") may disagree with the tax treatment discussed herein. You
should discuss with your tax advisor the treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights
for U.S. federal income tax purposes. For a detailed discussion, see "Material U.S. Federal Income Tax Considerations."
If
you receive subscription rights and NBH subsequently cancels the rights offering, you may be subject to adverse U.S. federal income tax
consequences.
You
should discuss with your tax advisor the tax consequences of receiving subscription rights if NBH subsequently cancels the rights offering.
NBH (and any other applicable withholding agent) is likely to take the position, for information reporting and withholding purposes,
that you may have taxable dividend income upon the receipt of the subscription rights even if NBH subsequently cancels the rights offering.
If withholding tax is withheld from you in this event, you should consult your tax advisor as to whether to seek a refund of such amount
from the IRS. For a detailed discussion, see "Material U.S. Federal Income Tax Considerations."
You
may be required to pay certain transfer fees or expenses in connection with transfers to become the registered holder of your shares
of NBH common stock on the books and records of NBH's transfer agent.
For
all transfers by any beneficial owner to transfer the shares of NBH common stock then held in "street name" through a broker, bank or
other nominee, such bank, broker or nominee may impose a transfer or other transaction fee to be borne by the beneficial owner in accordance
with such bank's, broker's or nominee's ordinary practices and policies. Further, NBH's transfer agent may also impose certain ownership
transfer fees on the brokers instructed to transfer shares of NBH common stock to beneficial owners in the books of the transfer agent
based on fees published by and pursuant to certain contractual arrangements of the transfer agent to which such brokers are subject.
Risks
Related to Our Business and Growth Strategy
We
have a limited operating history relative to larger companies in our industry and may not be successful in developing profitable business
operations.
We
have a limited operating history relative to larger companies in our industry. Our business operations must be considered in light of
the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industry. As of the
date of this prospectus, we have generated limited revenues and have limited assets. We have an insufficient history at this time on
which to base an assumption that our business operations will prove to be successful in the long-term. Our future operating results will
depend on many factors, including:
●
our
    ability to raise adequate working capital;
●
the
    success of our development and exploration;
●
the
    demand for oil and natural gas;
●
the
    level of our competition;
8
●
our
    ability to attract and maintain key management and employees; and
●
our
    ability to efficiently explore, develop, produce or acquire sufficient quantities of marketable oil or natural gas in a highly competitive
    and speculative environment while maintaining quality and controlling costs.
To
achieve profitable operations in the future, we must, alone or with others, successfully manage the factors stated above, as well as
continue to develop ways to enhance our production efforts. Despite our best efforts, we may not be successful in our exploration or
development efforts or obtain required regulatory approvals. There is a possibility that some, or all, of the wells in which we obtain
interests may never produce oil or natural gas.
We
have limited operating history as an independent company, and our historical financial information is not necessarily representative
of the results we would have achieved as an independent company and may not be a reliable indicator of our future results.
We
derived the historical financial information included in this prospectus from Meta on a consolidated basis prior to the distribution
of our common stock which was completed on December 14, 2022 (the "Spin-Off"), and this information does not necessarily
reflect the results of operations and financial position we would have achieved as an independent company during the periods presented
or those that we will achieve in the future. This is primarily because of the following factors:
●
Prior
    to the Spin-Off, we operated as part of Meta's broader corporate organization, and Meta performed various corporate functions
    for us. Our historical financial information reflects allocations of corporate expenses from Meta for these and similar functions.
    These allocations may not reflect the costs we will incur for similar services in the future as an independent company.
●
We
    entered into certain transactions with Meta that did not exist prior to the Spin-Off, which may cause us to incur new costs.
●
Our
historical financial information does not reflect changes that we expect to experience in the future as a result of our separation from
Meta, including changes in our cost structure, personnel needs, tax structure, financing and business operations. As part of Meta, we
enjoyed certain benefits from Meta's operating diversity, size, purchasing power, borrowing leverage and available capital for
investments, which are no longer available to us. As an independent entity, we may be unable to purchase goods, services and technologies,
such as insurance and health care benefits and computer software licenses or access capital markets on terms as favorable to us as those
we obtained as part of Meta prior to the Spin-Off.
We
are now responsible for the additional costs associated with being an independent company, including costs related to corporate governance,
investor and public relations and public reporting. In addition, certain costs incurred by Meta, including executive oversight, accounting,
treasury, tax, legal, human resources, occupancy, procurement, information technology and other shared services, have historically been
allocated to us by Meta; but these allocations may not reflect the future level of these costs to us as we begin to provide these services
ourselves. Therefore, our historical financial statements may not be indicative of our future performance as an independent company.
We cannot assure you that our operating results will continue at a similar level when we are an independent company. For additional information
about our past financial performance and the basis of presentation of our financial statements, see "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the notes thereto
included elsewhere in this prospectus.
We
have limited capital and will need to raise additional capital in the immediate future.
We
continue to require additional capital to maintain operations and to expand our exploration and development programs. We may be unable
to obtain additional capital when required or on favorable terms. Future acquisitions, exploration, development, production and marketing
activities, as well as our administrative requirements (such as salaries, insurance expenses and general overhead expenses, as well as
legal compliance costs and accounting expenses) will require a substantial amount of additional capital and cash flow.
9
We
may pursue sources of additional capital through various financing transactions or arrangements, including joint venturing of projects,
debt financing, equity financing, or other means. We may not be successful in identifying suitable financing transactions in the time
period required or at all, and we may not obtain the capital we require by other means. If we do not succeed in raising additional capital,
our resources may not be sufficient to fund our planned operations.
Our
ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets (both generally and in
the oil and natural gas industry in particular), our limited operating history, the location of our oil and natural gas properties
and prices of oil and natural gas on the commodities markets (which will impact the amount of asset-based financing available to us,
if any) and the departure of key employees. Further, if oil or natural gas prices on the commodities markets decline, our future
revenues, if any, will likely decrease and such decreased revenues may increase our requirements for capital. If the amount of
capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our
capital needs (even to the extent that we reduce our operations), third parties may be reluctant to provide the services we
need in order to operate and we may be required to cease our operations, divest our assets at unattractive prices or obtain
financing on unattractive terms.
Any
additional capital raised through the sale of equity may dilute the ownership percentage of our stockholders. Raising any such capital
could also result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool
of outstanding equity. The terms of securities we issue in future capital transactions may be more favorable to our new investors, and
may include preferences, superior voting rights and the issuance of other derivative securities, and issuances of incentive awards under
equity employee incentive plans, which may have a further dilutive effect.
We
may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities
law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection
with certain securities we may issue, which may adversely impact our financial condition.
We
may not achieve or maintain profitable operations, and therefore, may not be able to continue as a going concern.
The
Company has a history of net losses from operations and negative cash flow from operating activities. We will need to raise additional
working capital to continue our normal and planned operations. We will also need to generate and sustain significant revenue levels in
future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.
During the year ended December 31, 2022, we incurred a net loss of $8,848,873 ($7,938,335 for the predecessor period and $910,538 for
the successor period) and used cash in the amount of $5,400,841 for operating activities for the year ended December 31, 2022 ($5,626,181
used in the predecessor period and $225,340 provided by the successor period). At December 31, 2022, we had an accumulated deficit of
$910,538 representing the successor period and had a working capital deficit of $29,077,591 compared with a working capital deficit of
$13,307,453 as of December 31, 2021. These factors raise doubt regarding our ability to continue as a going concern. Because we have
incurred significant net losses, our auditors have issued a "going concern" audit qualification. A "going concern"
qualification indicates that the financial statements have been prepared assuming we will continue as a going concern and do not include
any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification
of liabilities that may result if we do not continue as a going concern. Therefore, you should not rely on our consolidated balance sheet
as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution
to stockholders, in the event of liquidation.
There
can be no assurance that our financing strategy or strategic alternatives will result in a transaction satisfactory to holders of our
common stock.
We
may consider various strategic alternatives, including partnering with third parties, a potential sale of some or all of our assets,
a merger transaction, and potential financing alternatives. Even if a partnering transaction, sale, merger or financing transaction were
to be consummated, it may not return any value to holders of our common stock. Regardless of whether we execute a partnership, sale,
merger or financing transaction, the adverse pressures negatively impacting our business that we have been or are currently experiencing
may continue or intensify, including the risk that we may not be able to continue as a going concern.
10
We
are mainly concentrated in one geographic area, which increases our exposure to many of the risks enumerated herein.
Operating
in a concentrated area increases the potential impact that many of the risks stated herein may have upon our ability to perform. For
example, we have greater exposure to regulatory actions impacting Texas, natural disasters in the geographic area, competition for
equipment, services and materials available in the area and access to infrastructure and markets. In addition, the effect of
fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas such as
the Permian Basin, which may cause these conditions to occur with greater frequency or magnify the effect of these conditions. Due
to the concentrated nature of our portfolio of properties, a number of our properties could experience any of the same conditions at
the same time, resulting in a relatively greater impact on our results of operations than they might have on other companies that
have a more diversified portfolio of properties. Such delays or interruptions could have a material adverse effect on our financial
condition and results of operations.
Because
of the speculative nature of oil and natural gas exploration, there is risk that we will not find commercially exploitable oil and natural
gas and that our business will fail.
The
search for commercial quantities of oil and natural gas as a business is extremely risky. We cannot provide investors with any assurance
that any properties in which we obtain a mineral interest will contain commercially exploitable quantities of oil and/or natural gas.
The exploration expenditures to be made by us may not result in the discovery of commercial quantities of oil and/or natural gas. Problems
such as unusual or unexpected formations or pressures, premature declines of reservoirs, invasion of water into producing formations
and other conditions involved in oil and natural gas exploration often result in unsuccessful exploration efforts. If we are unable to
find commercially exploitable quantities of oil and natural gas, and/or we are unable to commercially extract such quantities, we may
be forced to abandon or curtail our business plan, and as a result, any investment in us may become worthless.
Litigation
may adversely affect our business, financial condition, and results of operations.
Certain
of our subsidiaries are subject and from time to time in the normal course of our business operations, may become subject to litigation
that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes
to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources.
There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless
of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient
amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage
for any claims could adversely affect our business and the results of our operations. For additional discussion of pending litigation
matters, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Legal Proceedings."
Strategic
relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations.
Our
ability to successfully acquire oil and natural gas interests, to build our reserves, to participate in drilling opportunities and to
identify and enter into commercial arrangements with customers will depend on developing and maintaining close working relationships
with industry participants and our ability to select and evaluate suitable properties and to consummate transactions in a highly competitive
environment. These realities are subject to change and our inability to maintain close working relationships with industry participants
or continue to acquire suitable property may impair our ability to execute our business plan.
To
continue to develop our business, we will endeavor to use the business relationships of our management to enter into strategic relationships,
which may take the form of joint ventures with other private parties and contractual arrangements with other oil and natural gas companies,
including those that supply equipment and other resources that we will use in our business. We may not be able to establish these strategic
relationships, or if established, we may not be able to maintain them. In addition, the dynamics of our relationships with strategic
partners may require us to incur expenses or undertake activities we would not otherwise be inclined to in order to fulfill our obligations
to these partners or maintain our relationships. If our strategic relationships are not established or maintained, our business prospects
may be limited, which could diminish our ability to conduct our operations.
11
Our
acreage must be drilled before lease expiration in order to hold the acreage by production. In the highly competitive market for acreage,
failure to drill sufficient wells in order to hold acreage will result in a substantial lease renewal cost, or if renewal is not feasible,
loss of our lease and prospective drilling opportunities.
Our
leases on oil and natural gas properties typically have a primary term of four to five years, after which they expire unless, prior
to expiration, drilling obligations are fulfilled or production is established within the spacing units covering the
undeveloped acres. As of March 31, 2023, we had leases representing approximately 134,000 net acres in the Orogrande Basin in West
Texas as part of the Orogrande Project. These oil and gas leases will expire on December 31, 2023 if we fail to drill five
additional wells under our contractual obligations with University Lands. If we fail to drill the required five wells and are
otherwise unable to negotiate an extension to drill the required wells, these leases are subject to expiration. We will
require additional capital to drill these wells, and we may not be able to obtain additional capital when required in order to drill
these wells, or on favorable terms. As of March 31, 2023, we had leases representing 645 net acres in the Eastern edge of the
Midland Basin in West Texas, which are currently held by production by active wells. In the event that we fail to meet our drilling
obligations in the Orogrande Basin, whether because we are unable to obtain additional capital when required or otherwise, or if
production ceases in the Midland Basin, our leases will expire. Similarly, the oil and gas leases constituting the Bronco Prospect
will need to be drilled and commence producing in paying quantities in order for the oil and gas leases not to terminate. If we have
to renew such leases on new terms, we could incur significant cost increases, and we may not be able to renew such leases on
commercially reasonable terms or at all. In addition, on certain portions of our acreage, third-party leases may become immediately
effective if our leases expire. As such, our actual drilling activities may materially differ from our current expectations,
which could adversely affect our business.
The
price of oil and natural gas has historically been volatile. If it were to decrease substantially, our projections, budgets, and revenues
would be adversely affected, potentially forcing us to make changes in our operations.
Our
future financial condition, results of operations and the carrying value of any oil and natural gas interests we acquire will depend
primarily upon the prices paid for oil and natural gas production. Oil and natural gas prices historically have been volatile and likely
will continue to be volatile in the future, especially given current world geopolitical conditions. Cash flows from operations are highly
dependent on the prices that we receive for oil and natural gas. This price volatility could affect the amount of our cash flows available
for capital expenditures and our ability to borrow money or raise additional capital. The prices for oil and natural gas are subject
to a variety of additional factors that are beyond our control. These factors include:
●
the
    level of consumer demand for oil and natural gas;
●
the
    domestic and foreign supply of oil and natural gas;
●
the
    ability of the members of the Organization of Petroleum Exporting Countries ("OPEC") to agree to and maintain oil price
    and production controls;
●
the
    price of foreign oil and natural gas;
●
domestic
    governmental regulations and taxes;
●
the
    price and availability of alternative fuel sources;
●
weather
    conditions;
●
market
    uncertainty due to political conditions in oil and natural gas producing regions, including the Middle East; and
●
worldwide
    economic conditions.
12
These
factors as well as the volatility of the energy markets generally make it extremely difficult to predict future oil and natural gas price
movements with any certainty. Declines in oil and natural gas prices affect our revenues and could reduce the amount of oil and natural
gas that we can produce economically. Accordingly, such declines could have a material adverse effect on our financial condition, results
of operations, oil and natural gas reserves and the carrying values of our oil and natural gas properties. If the oil and natural gas
industry experiences significant price declines, we may be unable to make planned expenditures, among other things. If this were to happen,
we may be forced to abandon or curtail our business operations, which would cause the value of an investment in us to decline or become
worthless.
In
early March 2020, the market experienced a precipitous decline in oil prices in response to concerns about oil demand due to the economic
impact of COVID-19 and anticipated increases in supply from Russia and OPEC, particularly Saudi Arabia. Generally, demand for oil declined
substantially following the initial onset of the COVID-19 pandemic, but has recovered over the past year.
If
oil or natural gas prices reverse and go on a downward trend or drilling efforts are unsuccessful, we could be required to record
additional write-downs of our oil and natural gas properties. Write-downs may occur when oil and natural gas prices are low, or if
we have downward adjustments to our estimated proved reserves, increases in our estimates of operating or development costs,
deterioration in drilling results or mechanical problems with wells where the cost to redrill or repair is not supported by the
expected economics.
Under
the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion and net of deferred income
taxes may not exceed an amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural
gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated
fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, an impairment
would be recognized.
Because
of the inherent dangers involved in oil and natural gas operations, there is a risk that we may incur liability or damages as we conduct
our business operations, which could force us to expend a substantial amount of money in connection with litigation and/or a settlement.
The
oil and natural gas business involves a variety of operating hazards and risks such as well blowouts, pipe failures, casing collapse,
explosions, uncontrollable flows of oil, natural gas or well fluids, fires, spills, pollution, releases of toxic gas and other environmental
hazards and risks. These hazards and risks could result in substantial losses to us from, among other things, injury or loss of life,
severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities,
regulatory investigation and penalties and suspension of operations. In addition, we may be liable for environmental damages caused by
previous owners of property purchased and leased by us. In recent years, there has also been increased scrutiny on the environmental
risk associated with hydraulic fracturing, such as underground migration and surface spillage or mishandling of fracturing fluids including
chemical additives. Hydraulic fracturing technology has evolved and continues to evolve and become more aggressive. We believe that recent
designs have seen improvement in, among other things, proppant per foot, barrels of water per stage, fracturing stages, and clusters
per fracturing stage. In addition, we will need to quickly adapt to the evolving technology, which could take time and divert our attention
to other business matters. Even with improved hydraulic fracturing technology, substantial liabilities to third parties or governmental
entities may be incurred, the payment of which could reduce or eliminate the funds available for exploration, development or acquisitions
or result in the loss of our properties and/or force us to expend substantial monies in connection with cleanup, litigation or settlements.
While we have insurance to cover some of such losses and liabilities, it may not be adequate to cover any losses or liabilities. We cannot
predict the availability of insurance or the availability of insurance at premium levels that justify our purchase. The occurrence of
a significant event not fully insured or indemnified against could materially and adversely affect our financial condition and operations.
We may elect to self-insure if management believes that the cost of insurance, although available, is excessive relative to the risks
presented. In addition, pollution and environmental risks generally are not fully insurable. The occurrence of an event not fully covered
by insurance could have a material adverse effect on our financial condition and results of operations.
13
The
market for oil and natural gas is intensely competitive, and competition pressures could force us to abandon or curtail our business
plan.
The
market for oil and natural gas exploration services is highly competitive, and we only expect competition to intensify in the
future. Numerous well-established companies are focusing significant resources on exploration and are currently competing with us
for oil and natural gas opportunities. Other oil and natural gas companies may seek to acquire oil and natural gas leases and
properties that we have targeted. Additionally, other companies engaged in our line of business may compete with us from time to
time in obtaining capital from investors. Competitors include larger companies which, in particular, may have access to greater
resources, may be more successful in the recruitment and retention of qualified employees and may conduct their own refining and
petroleum marketing operations, which may give them a competitive advantage. Actual or potential competitors may be strengthened
through the acquisition of additional assets and interests. Additionally, there are numerous companies focusing their resources on
creating fuels and/or materials which serve the same purpose as oil and natural gas but are manufactured from renewable
resources.
As
a result, we may not be able to compete successfully and competitive pressures may adversely affect our business, results of operations,
and financial condition. If we are not able to successfully compete in the marketplace, we could be forced to curtail or even abandon
our current business plan, which could cause any investment in us to become worthless.
Inflation
may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to enter into future
traditional debt financing.
Inflation
can adversely affect us by increasing costs of critical materials, equipment, labor, and other services. In addition, inflation is often
accompanied by higher interest rates. Continued inflationary pressures could impact our profitability. Inflation may also affect our
ability to enter into future traditional debt financing, as high inflation may result in an increase in cost.
We
may not be able to successfully manage growth, which could lead to our inability to implement our business plan.
Any
growth of the Company may place a significant strain on our managerial, operational and financial resources, especially considering that
we currently only have a small number of executive officers, employees and advisors. Further, as we enter into additional contracts,
we will be required to manage multiple relationships with various consultants, businesses and other third parties. These requirements
will be exacerbated in the event of our further growth or in the event that the number of our drilling and/or extraction operations increases.
Our systems, procedures and/or controls may not be adequate to support our operations or that our management will be able to achieve
the rapid execution necessary to successfully implement our business plan. If we are unable to manage our growth effectively, our business,
results of operations and financial condition will be adversely affected, which could lead to us being forced to abandon or curtail our
business plan and operations.
Developing
oil and natural gas wells and producing oil and natural gas are costly and high-risk activities with many uncertainties that could adversely
affect future production from our oil and natural gas properties. Any delays, reductions or cancellations in development and producing
activities could materially, adversely impact the value of your shares of common stock.
Recovery
of undeveloped reserves and the development of developed non-producing reserves requires substantial capital expenditures and successful
drilling operations of our oil and natural gas properties. All of the recent development costs related to our Hazel Project were paid
by Masterson Hazel Partners LP ("MHP"). Under the Option Agreement (as defined below), we granted MHP the option to acquire
the Hazel Project in exchange for it conducting, and paying for, development activity sufficient to maintain the Hazel mineral leases
in good standing. The Option Agreement provided that if MHP declined to exercise the option to acquire the property, we would be obligated
to reimburse them for their cost of the development activity to the extent that the wells produced revenues beyond the date of the option's
lapse until the total amount of development expenses are reimbursed. MHP declined to exercise the option effective September 30, 2021.
The 2021 reserve data included in the reserve report of our independent petroleum engineer assumes a certain amount of capital expenditures
will be made to develop such reserves, and the present value of such reserves was adjusted based on our obligation to assign revenue
from the Hazel Project to MHP.
14
The
development of such reserves may in the future take a long period of time and may require higher levels of capital expenditures than
anticipated, which, for the Orogrande Project, are borne in part by the non-operating working interest owners of such properties. Delays
in the development of the reserves, increases in drilling and development costs (including expenses related to secondary and tertiary
recovery techniques) of such reserves or decreases or continued volatility in commodity prices will reduce the future net revenues of
the estimated possible reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves
could force us to reclassify certain of the proved reserves as unproved reserves.
In
addition, the process of developing oil and natural gas wells and producing oil and natural gas from our properties is subject to numerous
risks beyond our control. The ability to carry out operations or to finance planned development expenses could be materially and adversely
affected by any factor that may curtail, delay, reduce or cancel development and production, including:
●
delays
    imposed by or resulting from compliance with environmental and other governmental or regulatory requirements, including permitting
    requirements, limitations on or resulting from wastewater discharge and disposal of exploration and production wastes, including,
    subsurface injections, as well as additional regulation with respect to GHG emissions;
●
pressure
    or irregularities in geological formations;
●
restricted
    access to land for drilling or to existing pipeline infrastructure;
●
lack
    of available gathering, transportation and processing facilities, including availability on commercially reasonable terms, or delays
    in construction of gathering facilities;
●
lack
    of available capacity on interconnecting transmission pipelines;
●
equipment
    failures or accidents;
●
failure
    of secondary recovery operations to perform as expected;
●
unexpected
    operational events and drilling conditions;
●
declines
    in oil or natural gas prices;
●
limitations
    in the market for oil or natural gas;
●
pipe
    or cement failures;
●
casing
    collapses;
●
shortages,
    unavailability or high cost of drilling rigs, tubular materials, equipment, supplies, personnel and services;
●
lost
    or damaged drilling and service tools;
●
loss
    of drilling fluid circulation;
●
uncontrollable
    flows of oil and natural gas, water or drilling fluids;
●
blowouts,
    explosions fires and natural disasters;
15
●
environmental
    hazards, such as oil and natural gas leaks, pipeline and tank ruptures, encountering naturally occurring radioactive materials, and
    unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface
    environment;
●
adverse
    weather conditions, such as drought, floods, blizzards, tornados and ice storms; and
●
title
    problems or legal disputes regarding leasehold rights.
Our
operations are heavily dependent on current environmental regulation, changes in which we cannot predict.
Oil
and natural gas activities that we will engage in, including production, processing, handling and disposal of hazardous materials, such
as hydrocarbons and naturally occurring radioactive materials (if any), are subject to stringent regulation. We could incur significant
costs, including cleanup costs resulting from a release of hazardous material, third-party claims for property damage and personal injuries
fines and sanctions, as a result of any violations or liabilities under environmental or other laws. Changes in or more stringent enforcement
of environmental laws could force us to expend additional operating costs and capital expenditures to stay in compliance.
Various
federal, state and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of
the environment, directly impact oil and natural gas exploration, development and production operations, and consequently may impact
our operations and costs. These regulations include, among others, (i) regulations by the EPA and various state agencies regarding approved
methods of disposal for certain hazardous and non-hazardous wastes; (ii) CERCLA and analogous state laws which regulate the removal or
remediation of previously disposed wastes (including wastes disposed of or released by prior owners or operators), property contamination
(including groundwater contamination), and remedial plugging operations to prevent future contamination; (iii) the CAA and comparable
state and local requirements which regulate air emissions; (iv) the Oil Pollution Act of 1990 which contains numerous requirements relating
to the prevention of and response to oil spills into waters of the United States; (v) the RCRA which is the principal federal statute
governing the treatment, storage and disposal of hazardous wastes; (vi) the Federal Water Pollution Control Act and comparable state
and local requirements which regulate discharges to federal and state waters; and (vii) state regulations and statutes governing the
handling, treatment, storage and disposal of naturally occurring radioactive material.
We
believe that we will be in substantial compliance with applicable environmental laws and regulations. We cover all costs associated with
the related insurance coverage for such environmental regulatory compliance. To date, other than the cost of insurance, we have not expended
any amounts to comply with such regulations, and we do not currently anticipate that future compliance will have a materially adverse
effect on our consolidated financial position, results of operations or cash flows. However, if we are deemed to not be in compliance
with applicable environmental laws, we could be forced to expend significant funds to be in compliance, which would have a materially
adverse effect on our financial condition.
Government
regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.
Several
states, including Texas, and local jurisdictions, have adopted, or are considering adopting, regulations that could restrict or prohibit
hydraulic fracturing in certain circumstances, impose more stringent operating standards and/or require the disclosure of the composition
of hydraulic fracturing fluids. The Texas Legislature adopted legislation, effective September 1, 2011, requiring oil and natural gas
operators to publicly disclose the chemicals used in the hydraulic fracturing process. The Texas Railroad Commission adopted rules and
regulations implementing this legislation that apply to all wells for which the Texas Railroad Commission issues an initial drilling
permit after February 1, 2012. The law requires that the well operator disclose the list of chemical ingredients subject to the requirements
of OSHA for disclosure on an internet website and also file the list of chemicals with the Texas Railroad Commission with the well completion
report. The total volume of water used to hydraulically fracture a well must also be disclosed to the public and filed with the Texas
Railroad Commission. Also, in May 2013, the Texas Railroad Commission adopted rules governing well casing, cementing and other standards
for ensuring that hydraulic fracturing operations do not contaminate nearby water resources. The rules took effect in January 2014. Additionally,
on October 28, 2014, the Texas Railroad Commission adopted disposal well rule amendments designed, among other things, to require applicants
for new disposal wells that will receive non-hazardous produced water and hydraulic fracturing flowback fluid to conduct seismic activity
searches utilizing the U.S. Geological Survey. The searches are intended to determine the potential for earthquakes within a circular
area of 100 square miles around a proposed new disposal well. The disposal well rule amendments, which became effective on November 17,
2014, also clarify the Texas Railroad Commission's authority to modify, suspend or terminate a disposal well permit if scientific
data indicates a disposal well is likely to contribute to seismic activity. The Texas Railroad Commission has used this authority to
deny permits and temporarily suspend operations for waste disposal wells and, in September 2021, the Texas Railroad Commission curtailed
the amount of water companies were permitted to inject into some wells in the Permian Basin, and has since indefinitely suspended some
permits there and expanded the restrictions to other areas. These restrictions on use of produced water and a moratorium on new produced
water disposal wells could result in increased operating costs, requiring us or our service providers to truck produced water, recycle
it or pump it through the pipeline network or other means, all of which could be costly. We or our service providers may also need to
limit disposal well volumes, disposal rates and pressures or locations, or require us or our service providers to shut down or curtail
the injection of produced water into disposal wells. These factors may make drilling and completion activity in the affected parts of
the Permian Basin less economical and adversely impact our business, results of operations and financial condition.
16
Climate
change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil and
natural gas that we produce
.
The
EPA previously published its findings that emissions of GHGs present a danger to public health and the environment because such gases
are, according to the EPA, contributing to warming of the Earth's atmosphere and other climatic changes. Based on these findings,
the EPA has adopted various rules to address GHG emissions under existing provisions of the CAA. For example, the EPA has adopted rules
requiring the reporting of GHG emissions from various oil and natural gas operations on an annual basis, which includes certain of our
operations. In addition, in June 2016, the EPA finalized rules to reduce methane emissions from new, modified or reconstructed sources
in the oil and natural gas sector, including implementation of an LDAR program to minimize methane emissions, under the CAA's New
Source Performance Standards Quad Oa. However, the EPA has taken several steps to delay implementation of the Quad Oa standards. The
agency proposed a rulemaking in June 2017 to stay the requirements for a period of two years and in October 2018, the EPA proposed revisions
to Quad Oa, such as changes to the frequency for monitoring fugitive emissions at well sites and changes to requirements that a professional
engineer certify when meeting certain Quad Oa requirements is technically infeasible. In September 2020, the EPA finalized amendments
to Quad Oa that rescind requirements for the transmission and storage segment of the oil and natural gas industry and rescind methane-specific
limits that apply to the industry's production and processing segments, among other things. On June 30, 2021, Congress issued a
joint resolution pursuant to the Congressional Review Act disapproving the September 2020 rule, and on November 15, 2021, EPA issued
a proposed rule to revise the Quad Oa regulations that, if finalized, would require methane emissions reductions and implementation of
a fugitive emissions monitoring and repair program. EPA has also announced its intention to issue a supplemental proposal in 2022 that
may expand on or modify the 2021 proposal in response to public input. It is possible that these rules will continue to require oil and
natural gas operators to expend material sums.
In
addition, in November 2016, BLM issued final rules to reduce methane emissions from venting, flaring, and leaks during oil and natural
gas operations on public lands that are substantially similar to the EPA Quad Oa requirements. However, on December 8, 2017, the BLM
published a final rule to temporarily suspend or delay certain requirements contained in the November 2016 final rule until January 17,
2019, including those requirements relating to venting, flaring and leakage from oil and natural gas production activities. Further,
in September 2018, the BLM published a final rule to revise or rescind certain provisions of the 2016 rule. On July 21, 2020, a Wyoming
federal court vacated almost all of the 2016 rule, including all provisions relating to the loss of gas through venting, flaring, and
leaks, and on July 15, 2020, a California federal court vacated the 2018 rule. While, as a result of these developments, future implementation
of the EPA and BLM methane rules is uncertain, given the long-term trend towards increasing regulation, future federal GHG regulations
of the oil and natural gas industry remain a possibility. We may be required to expend significant costs to obtain the necessary equipment
(pollution control equipment and optical gas imaging equipment for LDAR inspections) and personnel trained to assist with inspection
and reporting requirements to ensure we are in compliance with these rules.
17
We
may incur increasing attention to environmental, social and governance ("ESG") matters that may impact our business.
Businesses
across all industries are facing increasing scrutiny from stakeholders related to their ESG practices. If we do not adapt to or comply
with investor or stakeholder expectations and standards, which are evolving, or if we are perceived to have not responded appropriately
to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage
and the business, financial condition and/or the value of our common stock could be materially and adversely affected. Increasing attention
to climate change, increasing societal expectations on businesses to address climate change, and potential consumer use of substitutes
to energy commodities may result in increased costs, reduced demand for our hydrocarbon products, reduced profits, increased investigations
and litigation, and negative impacts on our ability to access capital markets.
In
addition, organizations that provided information to investors on corporate governance and related matters have developed rating processes
for evaluating business entities on their approach to ESG matters. Currently, there are no universal standards for such scores or ratings,
but the importance of sustainability evaluations is becoming more broadly accepted by investors and shareholders. Such ratings are used
by some investors to inform their investment and voting decisions. Additionally, certain investors use these scores to benchmark businesses
against their peers. If we are perceived as lagging, our investors may engage with such third party organizations to require improved
ESG disclosure or performance.
Our
estimates of the volume of reserves could have flaws, or such reserves could turn out not to be commercially extractable. As a result,
our future revenues and projections could be incorrect.
Estimates
of reserves and of future net revenues prepared by different petroleum engineers may vary substantially depending, in part, on the assumptions
made and may be subject to adjustment either up or down in the future. Our actual amounts of production, revenue, taxes, development
expenditures, operating expenses, and quantities of recoverable oil and natural gas reserves may vary substantially from the estimates.
Oil and natural gas reserve estimates are necessarily inexact and involve matters of subjective engineering judgment. In addition, any
estimates of our future net revenues and the present value thereof are based on assumptions derived in part from historical price and
cost information, which may not reflect current and future values, and/or other assumptions made by us that only represent our best estimates.
If these estimates of quantities, prices and costs prove inaccurate, we may be unsuccessful in expanding our oil and natural gas reserves
base with our acquisitions. Additionally, if declines in and instability of oil and natural gas prices occur, then write downs in the
capitalized costs associated with any oil and natural gas assets we obtain may be required. Because of the nature of the estimates of
our reserves and estimates in general, reductions to our estimated proved oil and natural gas reserves and estimated future net revenues
may not be required in the future, and/or that our estimated reserves may not be present and/or commercially extractable. If our reserve
estimates are incorrect, we may be forced to write down the capitalized costs of our oil and natural gas properties.
Decommissioning
costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.
We
may become responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which we use for production
of oil and natural gas reserves. Abandonment and reclamation of these facilities and the costs associated therewith is often referred
to as "decommissioning." We accrue a liability for decommissioning costs associated with our wells but have not established
any cash reserve account for these potential costs in respect of any of our properties. If decommissioning is required before
economic depletion of our properties or if our estimates of the costs of decommissioning exceed the value of the reserves remaining at
any particular time to cover such decommissioning costs, we may have to draw on funds from other sources to satisfy such costs. The use
of other funds to satisfy such decommissioning costs could impair our ability to focus capital investment in other areas of our business.
We
may have difficulty distributing production, which could harm our financial condition.
In
order to sell the oil and natural gas that we are able to produce, if any, the operators of the wells we obtain interests in may have
to make arrangements for storage and distribution to the market. We will rely on local infrastructure and the availability of transportation
for storage and shipment of our products, but infrastructure development and storage and transportation facilities may be insufficient
for our needs at commercially acceptable terms in the localities in which we operate. This situation could be particularly problematic
to the extent that our operations are conducted in remote areas that are difficult to access, such as areas that are distant from shipping
and/or pipeline facilities. These factors may affect our and potential partners' ability to explore and develop properties and
to store and transport oil and natural gas production, increasing our expenses.
18
Furthermore,
weather conditions or natural disasters, actions by companies doing business in one or more of the areas in which we will operate, or
labor disputes may impair the distribution of oil and/or natural gas and in turn diminish our financial condition or ability to maintain
our operations.
The
marketability of any future production will be dependent upon transportation and other facilities, certain of which we do not control.
When these facilities are unavailable, our operations can be interrupted and any revenues reduced.
The
marketability of any future production depends in part upon the availability, proximity and capacity of transportation facilities owned
by third parties. The oil produced will be transported from the wellhead to our tank batteries by our gathering system. Our purchasers
would then transport the oil by truck to a pipeline for transportation. Our natural gas production will generally be transported by our
gathering lines from the wellhead to an interconnection point with the purchaser. We do not control these trucks and other third-party
transportation facilities and our access to them may be limited or denied. Insufficient production from our wells to support the construction
of pipeline facilities by our purchasers or a significant disruption in the availability of our or third-party transportation facilities
or other production facilities could adversely impact our ability to deliver to market or produce our production and thereby cause a
significant interruption in our operations.
We
may be required to flare a portion of our natural gas production for a number of reasons, including the fact that (i) our wells are not
yet tied into a third-party gathering system, (ii) the pressures on third-party gathering systems may be too high to allow additional
production from our wells to be transported or (iii) our production may be prorated due to high demand on third-party gathering systems.
We may flare additional natural gas from time to time.
Also,
the transfer of our oil and natural gas through third-party pipelines may be curtailed or delayed if it does not meet the quality
specifications of the pipeline owners. Our access to transportation options, including trucks owned by third parties, can also be
affected by U.S. federal and state regulation of oil and natural gas production and transportation, general economic conditions and
changes in supply and demand. If, in the future, we are unable, for any sustained period, to implement acceptable delivery or
transportation arrangements or encounter production-related difficulties we may  be required to shut in or curtail production. Any
such shut in or curtailment, or an inability to obtain favorable terms for delivery of our production, would adversely affect our
financial condition and results of operations.
Our
business will suffer if we cannot obtain or maintain necessary licenses.
Our
operations will require licenses, permits and in some cases renewals of licenses and permits from various governmental authorities. Our
ability to obtain, sustain or renew such licenses and permits on acceptable terms is subject to change in regulations and policies and
to the discretion of the applicable governments, among other factors. Our inability to obtain, or our loss of or denial of extension
of, any of these licenses or permits could hamper our ability to produce revenues from our operations.
Challenges
to our properties may impact our financial condition.
Title
to oil and natural gas interests is often not capable of conclusive determination without incurring substantial expense. While we have
made and intend to make appropriate inquiries into the title of properties and other development rights we have acquired and intend to
acquire, title defects may exist. In addition, we may be unable to obtain adequate insurance for title defects, on a commercially reasonable
basis or at all. If title defects do exist, it is possible that we may lose all or a portion of our right, title and interests in and
to the properties to which the title defects relate. If our property rights are reduced, our ability to conduct our exploration, development
and production activities may be impaired. To mitigate title problems, common industry practice is to obtain a title opinion from a qualified
oil and natural gas attorney prior to the drilling operations of a well.
19
We
rely on technology to conduct our business, and our technology could become ineffective or obsolete.
We
rely on technology, including geographic and seismic analysis techniques and economic models, to develop any reserve estimates and to
guide our exploration, development and production activities. We and our operator partners will be required to continually enhance and
update our technology to maintain its efficacy and to avoid obsolescence. The costs of doing so may be substantial and may be higher
than the costs that we anticipate for technology maintenance and development. If we are unable to maintain the efficacy of our technology,
our ability to manage our business and to compete may be impaired. Further, even if we are able to maintain technical effectiveness,
our technology may not be the most efficient means of reaching our objectives, in which case we may incur higher operating costs than
we would were our technology more efficient.
The
loss of key personnel would directly affect our efficiency and profitability.
Our
future success is dependent, in a large part, on retaining the services of our planned management team. Our executive officers possess
a unique and comprehensive knowledge of our industry and related matters that are vital to our success within the industry. The knowledge,
leadership and technical expertise of these individuals would be difficult to replace. The loss of one or more of our officers could
have a material adverse effect on our operating and financial performance, including our ability to develop and execute our long-term
business strategy. We do not maintain key-man life insurance with respect to any employees. We have entered into employment agreements
with certain of our executive officers as described in more detail under the heading "Executive Compensation" elsewhere in
this prospectus.
We
have limited management and staff and are dependent upon partnering arrangements and third-party service providers.
We
have five full-time employees, including our Chief Executive Officer and Chief Financial Officer. The loss of these individuals would
have an adverse effect on our business, as we have very limited personnel. We leverage the services of other independent consultants
and contractors to perform various professional services, including engineering, oil and natural gas well planning and supervision, and
land, legal, environmental and tax services. We also pursue alliances with partners in the areas of geological and geophysical services
and prospect generation, evaluation and prospect leasing. Our dependence on third-party consultants and service providers create a number
of risks, including but not limited to:
●
the
    possibility that such third parties may not be available to us as and when needed; and
●
the
    risk that we may not be able to properly control the timing and quality of work conducted with respect to our projects.
If
we experience significant delays in obtaining the services of such third parties or they perform poorly, our results of operations and
stock price could be materially adversely affected.
Certain
of our directors and officers have significant duties with, and spend significant time serving, entities that may compete with us in
seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business
opportunities.
Certain
of our directors and officers, who are responsible for managing the direction of our operations and acquisition activities, hold positions
of responsibility with other entities that are in the business of identifying and acquiring oil and natural gas properties. The existing
positions held by these directors and officers may give rise to fiduciary or other duties that are in conflict with the duties they owe
to us. These directors and officers may become aware of business opportunities that may be appropriate for presentation to us as well
as to the other entities with which they are or may become affiliated. Due to these existing and potential future affiliations, they
may present potential business opportunities to other entities prior to presenting them to us, which could cause additional conflicts
of interest. They may also decide that certain opportunities are more appropriate for other entities with which they are affiliated,
and as a result, they may elect not to present those opportunities to us. These conflicts may not be resolved in our favor.
20
Our
business and operations may be adversely affected by the COVID-19 pandemic and may be adversely affected by other similar outbreaks.
As
a result of the COVID-19 pandemic or other adverse public health developments, including voluntary and mandatory quarantines, travel
restrictions, and other restrictions, we have experienced delays, disruptions and temporary suspensions of our operations. In addition,
our financial condition and results of operations may be adversely affected by the COVID-19 pandemic in the future.
The
timeline and potential magnitude of the COVID-19 outbreak continue to be unknown. The continuation or amplification of the COVID-19 pandemic
could continue to more broadly affect the United States and global economy, including our business and operations, and the demand for
oil and natural gas. Other contagious diseases in the human population could have similar adverse effects. The potential impact from
COVID-19 is difficult to predict, therefore, the extent to which it will negatively affect our operating results, or the duration of
any potential business disruption is uncertain. The magnitude and duration of any impact will depend on future developments and new information
that may emerge regarding the duration of COVID-19 pandemic, the severity of any variants thereof, rate of vaccinations and other actions
taken by authorities to contain its impact or otherwise treat the disease, all of which are beyond our control.
Terrorist
attacks or cyber-incidents could result in information theft, data corruption, operational disruption and/or financial loss.
Like
most companies, we have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud
applications and services, to operate our businesses, to process and record financial and operating data, communicate with our business
partners, analyze mine and mining information, estimate quantities of coal reserves, as well as other activities related to our businesses.
Strategic targets, such as energy-related assets, may be at greater risk of future terrorist or cyber-attacks than other targets in the
United States. Deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third
parties, or cloud-based applications could lead to corruption or loss of our proprietary data and potentially sensitive data, delays
in production or delivery, difficulty in completing and settling transactions, challenges in maintaining our books and records, environmental
damage, communication interruptions, other operational disruptions and third-party liability. Our insurance may not protect us against
such occurrences. Consequently, it is possible that any of these occurrences, or a combination of them, could have a material adverse
effect on our business, financial condition, results of operations and cash flows. Further, as cyber incidents continue to evolve, we
may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate
any vulnerability to cyber incidents. We plan to adopt plans and policies to address precautions with respect to data security and appropriate
responses in case of a reported breach.
The
2021 Note with Meta contains restrictive covenants that limit our operations.
In
2021, we borrowed $15 million, which was subsequently increased to $20 million pursuant to the terms of the 2021 Note (defined
below). The 2021 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our ability to
merge or consolidate with another person or entity, or sell or transfer all or substantially all of our assets, unless we are the surviving
entity or the successor entity assumes all of obligations under the 2021 Note. This restriction may restrict our current and future
operations, particularly our ability to respond to certain changes in our business or industry or take future actions. See the section
titled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital
Resources" for additional information.
The
2021 Note is secured by a security interest in shares of common stock of Meta held by the Pledgor (defined below) and a 25% working interest
in the Orogrande Project held by Wolfbone. Any default that is not waived could permit Meta, as lender, to exercise rights and remedies
with respect to all of the collateral that is securing the 2021 Note, and/or other rights and remedies under applicable law. Following
the Merger (defined below), Wolfbone became a subsidiary of the Company and the Security Agreement remains in place.
Our
ability to meet these restrictive covenants or to avoid defaults can be impacted by events beyond our control. The 2021 Note provides
that our breach or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence of an event of default,
Meta as our lender could elect to declare all amounts outstanding under the 2021 Note to be immediately due and payable. If the outstanding
debt under the 2021 Note was to be accelerated, we may not have sufficient cash on hand to repay it, which would have an immediate adverse
effect on our business and operating results. This could potentially cause us to cease operations and result in a complete loss of your
investment in our common stock.
21
The
2022 Note with Mr. McCabe contains restrictive covenants that limit our operations
.
As
of March 31, 2023 we had $16.9 million outstanding under the 2022 Note (defined below), which has a maximum principal amount available
for borrowing of $20 million. If we are not in compliance with the covenants of the 2022 Note, or if we are in default under the 2022
Note, it is possible that Mr. McCabe will not offer to extend any additional loans under the 2022 Note, which may affect our business
as a going concern. The 2022 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our
ability to merge or consolidate with another person, or sell or transfer all or substantially all of our assets, unless we are the surviving
entity or the successor entity assumes all obligations under the 2022 Note. This restriction may restrict our current and future operations,
particularly our ability to respond to certain changes in our business or industry or take future actions. See "Management's
Discussion and Analysis of Financial Condition and Results of operations—Liquidity and Capital Resources" for additional
information.
Our
ability to meet these restrictive covenants or to avoid defaults can be impacted by events beyond our control. The 2022 Note provides
that our breach or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence of an event of default,
Mr. McCabe as our lender could elect to declare all amounts outstanding under the 2022 Note to be immediately due and payable. If the
outstanding debt under the 2022 Note was to be accelerated, we may not have sufficient cash on hand to repay it, which would have an
immediate material adverse effect on our business and operating results. This could potentially cause us to cease operations and result
in a complete loss of your investment in our common stock.
Our
Loan Agreement with Meta contains restrictive covenants that limit our operations.
In
2022, we borrowed an aggregate principal amount of $5.0 million pursuant to the terms of the Loan Agreement (defined below), which is
the maximum principal balance available under the Loan Agreement. The Loan Agreement contains various restrictive covenants and other
restrictions, which include, among other things, restrictions on:
●
our
    ability to transfer all or part of our business or property, except for inventory in the ordinary course of business, surplus or
    obsolete equipment, permitted liens, and transfers of cash permitted by the agreement;
●
our
    ability to liquidate or dissolve or merge or consolidate with another entity, or acquire another entity;
●
our
    ability to incur additional debt beyond certain limits or encumber our assets; and
●
our
    ability to pay dividends or make investments, other than permitted investments.
These
restrictions may restrict our current and future operations, particularly our ability to respond to certain changes in our business or
industry or take future actions. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity
and Capital Resources" for additional information.
Our
ability to meet these restrictive covenants can be impacted by events beyond our control. The Loan Agreement provides that our breach
or failure to satisfy certain covenants constitutes an event of default. Upon the occurrence and during the continuance of an event of
default, Meta as the lender could elect to (i) declare all outstanding principal and accrued and unpaid interest under the Loan Agreement
immediately due and payable, (ii) terminate any remaining commitment to make loans under the Loan Agreement, and/or (iii)
exercise certain other rights and remedies anticipated under the Loan Agreement. The events of default under the Loan Agreement include,
among other things (subject to grace periods in certain instances), payment defaults, breaches of covenants or representations and warranties,
a change in control or certain material adverse effects as defined in the Loan Agreement, material judgments and attachments, cross defaults
with certain of our other material indebtedness, and bankruptcy and insolvency events with respect to us and our subsidiaries. If the
outstanding debt under the Loan Agreement was to be accelerated, we may not have sufficient cash on hand to repay it, which would have
an immediate adverse effect on our business and operating results. This could potentially cause us to cease operations and result in
a complete loss of your investment in our common stock.
22
We
may have been able to receive better terms from unaffiliated third parties than the terms we received in our agreements with Meta.
We
negotiated agreements with Meta including the 2021 Note, Loan Agreement, and Distribution Agreement (defined below), while
we were still a subsidiary of Meta. Accordingly, these agreements may not reflect terms that would have resulted from arms-length negotiations
between unaffiliated parties. The terms of the agreements relate to, among other things, loans for working capital, allocations of assets,
liabilities, rights, indemnifications and other obligations between Meta and us. We may have received better terms from third parties
because third parties may have competed with each other to win our business. See "Certain Relationships and Related Party Transactions"
for more information.
Risks
Relating to Our Status as a Public Reporting Company
We
are an emerging growth company and a smaller reporting company, subject to less stringent reporting and regulatory requirements of other
publicly reporting companies and this status may have an adverse effect on our ability to attract interest in our common stock.
We
are an "emerging growth company" as defined in the JOBS Act. As long as we remain an emerging growth company,
we may take advantage of certain exemptions from various reporting and regulatory requirements that are applicable to other public reporting
companies that are not emerging growth companies. We cannot predict if investors will find our common stock less attractive if we choose
to rely on these exemptions.
Additionally,
we are a "smaller reporting company" as defined under the Exchange Act. Smaller reporting companies may take advantage of
certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will
remain a smaller reporting company provided: (1) the market value of our common stock held by non-affiliates is less than $250 million,
calculated annually, as of the last business day of our second fiscal quarter, or (2) our annual revenues are less than $100 million
during such completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million, calculated
annually, as of the last business day of our second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public reporting companies difficult or impossible.
Risks
Relating to Newco Common Stock
No
trading market for Subscription Rights or Newco common stock is expected to develop.
There
will not be any public market for the subscription rights. In addition, at the time of the subscription rights becoming
exercisable for shares of Newco, presently it is anticipated that there will be no public market for the shares of Newco common
stock and such shares will not become DTC eligible for electronic trading to third parties. Further, there is no expectation that a
trading market will develop or be sustained for the Newco common stock. Accordingly, you may have to hold the shares of Newco common
stock indefinitely.
23
MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The
following is a discussion of the material U.S. federal income tax considerations relating to the receipt, sale, exercise, expiration
and cancellation of the subscription rights to U.S. holders (as defined below) and non-U.S. holders (as defined below). This summary
is based upon the Internal Revenue Code of 1986, as amended (the "Code"), the regulations promulgated by the U.S. Treasury
Department ("Treasury Regulations"), rulings and other administrative pronouncements issued by the Internal Revenue Service
("IRS"), and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or
to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain,
a position contrary to any of the tax consequences described below. We have not sought and do not intend to seek an advance ruling from
the IRS regarding any matter discussed herein. The summary is also based upon the assumption the Company and its subsidiaries and affiliated
entities will operate in accordance with their applicable organizational documents or partnership agreements. This summary is for general
information purposes only, does not address all possible tax considerations that may be material to an investor and does not constitute
legal or tax advice. Moreover, this summary does not purport to discuss all aspects of U.S. federal income taxation that may be important
to a particular investor in light of its investment or tax circumstances, or to investors subject to special tax rules, such as:
●
financial
                                            institutions;
●
insurance
                                            companies;
●
broker-dealers;
●
regulated
                                            investment companies and real estate investment trusts;
●
partnerships
                                            and trusts;
●
persons
                                            who hold our stock on behalf of another person as a nominee;
●
persons
                                            who receive our stock through the exercise of employee stock options or otherwise as compensation;
●
persons
                                            holding our stock as part of a "straddle," "hedge," "conversion
                                            transaction," "synthetic security" or other integrated investment;
●
tax-exempt
                                            organizations;
and,
except to the extent discussed below:
●
foreign
                                            investors.
This
summary assumes that investors hold their NBH common stock as a capital asset, which generally means as property held for investment.
For
purposes of this discussion under the heading "Tax Consequences to U.S. Holders," a U.S. holder is a stockholder that is
for U.S. federal income tax purposes:
●
a
                                            citizen or resident of the United States,
●
a
                                            corporation (including an entity treated as a corporation for U.S. federal income tax purposes)
                                            created or organized in or under the laws of the United States, any of its states, or the
                                            District of Columbia,
●
an
                                            estate, whose income is subject to U.S. federal income taxation regardless of its source,
                                            or
●
a
                                            trust if (1) a U.S. court is able to exercise primary supervision over the administration
                                            of such trust and one or more U.S. persons have the authority to control all substantial
                                            decisions of the trust or (2) it has a valid election to be treated as a U.S. person.
24
A
"non-U.S. holder" is a stockholder that is not a U.S. holder and is not an entity treated as a partnership for U.S. federal
income tax purposes.
If
a partnership, entity or arrangement treated as a partnership for U.S. federal income tax purposes holds NBH common stock, the U.S. federal
income tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership.
An investor that is a partnership and the partners in such partnership should consult their tax advisors about the U.S. federal income
tax consequences of the receipt, sale, exercise, expiration and cancellation of the subscription rights.
The
treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights for U.S. federal income tax purposes
is not entirely clear. The uncertainty is attributable to a variety of factors, including the limited authorities that address such treatment,
the ability of NBH to withdraw or cancel the rights offering if certain conditions are met or are not met, and the possibility that there
will not be a market for the subscription rights. The discussion below assumes that, for U.S. federal income tax purposes, the distribution
of the subscription rights is treated as a distribution of rights to acquire Newco stock occurring on the distribution date and such
rights are property. The discussion below also assumes that if no market develops for the subscription rights, the subscription rights
will nevertheless have an ascertainable fair market value for U.S. federal income tax purposes on the date of distribution, but that
such value may be nominal or may be zero. The tax consequences to a stockholder may differ from the tax consequences discussed below
if the IRS or a court ultimately determines otherwise. To the extent that tax reporting is applicable to NBH, NBH intends to report the
tax consequences in accordance with the tax treatment discussed below.
No
ruling on the treatment of the receipt, sale, exercise, expiration and cancellation of the subscription rights for U.S. federal income
tax purposes has been or will be sought from the IRS with respect to any of the U.S. federal income tax considerations discussed below,
and no assurance can be given that the IRS will not take a position contrary to the discussion below.
STOCKHOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS
RELATING TO THE RECEIPT, SALE, EXERCISE, EXPIRATION AND CANCELLATION OF THE SUBSCRIPTION RIGHTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.
Tax
Consequences to U.S. Holders
Receipt
of Subscription Rights
A
U.S. holder that receives a subscription right in respect of a share of NBH common stock should generally have taxable dividend income
equal to the fair market value (if any) of such right on the date of its distribution from NBH to the extent it is made from NBH's
current or accumulated earnings and profits (as determined under U.S. federal income tax principles). If such fair market value exceeds
NBH's current and accumulated earnings and profits, such excess generally should be treated first as a tax-free return of capital
to the extent of the U.S. holder's adjusted tax basis in such share of NBH common stock, and any remaining excess should be treated
as gain from the sale or exchange of such NBH common stock. Although no assurance can be given, it is anticipated that we will not have
current and accumulated earnings and profits through the end of 2023.
If
a U.S. holder is a corporate U.S. holder, dividends paid by NBH to such U.S. holder generally will be eligible for the dividends-received
deduction allowed to domestic corporations in respect of dividends received from other domestic corporations so long as such U.S. holder
satisfies the holding period requirement for the dividends-received deduction.
If
a U.S. holder is a non-corporate U.S. holder, under tax laws currently in effect, dividends generally will be taxed at the preferential
applicable long-term capital gains rate so long as such U.S. holder satisfies the holding period requirement (i.e., more than sixty (60)
days of ownership, without protection from the risk of loss, during the 121-day period that begins sixty (60) days before the ex-dividend
date) and certain other requirements are met. Dividends received by a non-corporate U.S. holder may be subject to a 3.8% Medicare tax
on net investment income.
25
Sale
of Subscription Rights
Upon
the sale of the subscription rights received in respect of a share of NBH common stock, a U.S. holder generally should recognize capital
gain or loss equal to the difference between the amount realized on such sale and the U.S. holder's adjusted tax basis in the subscription
rights sold. A U.S. holder's adjusted tax basis in a subscription right should generally equal its fair market value (if any) on
the date of its distribution and a U.S. holder's holding period in a subscription right begins on the date of receipt of such
subscription right. Any such capital gain or loss generally will be long-term capital gain or loss if a U.S. holder's holding period
for the subscription right so disposed of exceeds one (1) year. Long-term capital gains recognized by non-corporate U.S. holders generally
will be eligible for taxation at reduced rates. The deductibility of capital losses is subject to limitations. Any gain recognized by
a non-corporate U.S. holder may be subject to a 3.8% Medicare tax on net investment income.
Exercise
of Subscription Rights
A
U.S. holder should generally not recognize any gain or loss upon the exercise of a subscription right. A U.S. holder's initial
tax basis in each share of Newco common stock acquired upon the exercise of a subscription right should generally equal the sum of (1) the
U.S. holder's adjusted tax basis in such right and (2) the subscription price, if any, paid for such share. The holding period
for Newco common stock received upon exercise of a subscription right will begin on the day of the exercise of such subscription right.
Expiration
of Subscription Rights
If
a subscription right expires without being exercised by a U.S. holder, the U.S. holder should generally recognize a capital loss in an
amount equal to such U.S. holder's adjusted tax basis (if any) in such right. Capital losses are generally available to offset
only capital gain (except, to the extent of up to $3,000 of capital loss per year, in the case of a non-corporate U.S. holder) and therefore
generally cannot be used to offset any dividend income arising from the receipt of a subscription right or other income.
Cancellation
of the Rights Offering
There
is no authority that specifically addresses the tax treatment of a U.S. holder that receives, sells or exercises a subscription right
if NBH subsequently cancels the rights offering. NBH and applicable withholding agents are likely to take the position, for information
reporting and backup withholding purposes, that the treatment described above under "Receipt of Subscription Rights" and
below under "Information Reporting and Backup Withholding" continue to apply to such a U.S. holder.
If
a U.S. holder recognizes taxable dividend income upon the receipt of a subscription right, even though NBH subsequently cancels the rights
offering, the U.S. holder should generally have a short-term capital loss upon the cancellation of the subscription right in an amount
equal to such U.S. holder's adjusted tax basis (if any) in such right.
Tax
Consequences to Non-U.S. Holders
Receipt
of Subscription Rights
A
non-U.S. holder that receives a subscription right in respect of a share of NBH common stock should generally have taxable dividend income
equal to the fair market value (if any) of such right on the date of its distribution from NBH to the extent it is made from NBH's
current or accumulated earnings and profits (as determined under U.S. federal income tax principles). If such fair market value exceeds
NBH's current and accumulated earnings and profits, such excess generally should be treated first as a tax-free return of capital
to the extent of the non-U.S. holder's tax basis in such share of NBH common stock, and any remaining excess should be treated
as gain from the sale or exchange of such NBH common stock. Although no assurance can be given, it is anticipated that we will not have
current and accumulated earnings and profits through the end of 2023.
A
distribution of subscription rights treated as a dividend on NBH common stock generally will be subject to withholding of U.S. federal
income tax at a 30% rate or such lower rate as may be provided by an applicable income tax treaty. To receive the benefit of a reduced
treaty rate, a non-U.S. holder must furnish to the Company or its paying agent a valid IRS Form W-8 (or applicable successor form) certifying
such holder's qualification for the reduced rate. This certification must be provided to the Company or its paying agent prior
to the payment of dividends and must be updated periodically. If a non-U.S. holder who qualifies for a reduced treaty rate but does not
timely provide the Company or the payment agent with the required certification, such non-U.S. holder may be entitled to a credit against
their U.S. federal income tax liability or a refund of the tax withheld, which the non-U.S. holder may claim by filing the appropriate
claim for refund with the IRS.
26
Dividends
that are treated as "effectively connected" with a trade or business conducted by a non-U.S. holder within the United States
(and, if an applicable income tax treaty so provides, are also attributable to a U.S. permanent establishment of such non-U.S. holder)
are not subject to withholding tax, provided the non-U.S. holder satisfies certain certification and disclosure requirements. Instead,
such dividends, net of specified deductions and credits, are taxed at the same graduated U.S. federal income tax rates applicable to
U.S. persons. To the extent a dividend is effectively connected with a U.S. trade or business, non-corporate non-U.S. holders may be
eligible for taxation at reduced U.S. federal income tax rates applicable to qualified dividend income. Any such effectively connected
dividends received by a non-U.S. holder that is a corporation may, under certain circumstances, be subject to an additional branch profits
tax at a 30% rate or such lower rate as specified by an applicable income tax treaty.
Sale
of Subscription Rights
Subject
to the discussions of backup withholding and FATCA withholding below, a non-U.S. holder generally should not be subject to U.S. federal
income tax on any gain recognized on the sale of the subscription rights unless:
●
Newco
                                            is or has been a "United States real property holding corporation" for U.S. federal
                                            income tax purposes at any time during the shorter of (1) the five-year period ending
                                            on the date of such sale and (2) such non-U.S. holder's holding period with respect
                                            to the subscription rights, and certain other conditions are met;
●
such
                                            gain is effectively connected with the conduct of a trade or business in the United States
                                            by such non-U.S. holder, in which event such non-U.S. holder generally will be subject to
                                            U.S. federal income tax on such gain in substantially the same manner as a U.S. holder (except
                                            as provided by an applicable tax treaty) and, if it is a corporation, may also be subject
                                            to a branch profits tax at the rate of 30% (or a lower rate if provided by an applicable
                                            tax treaty); or
●
such
                                            non-U.S. holder is an individual who is present in the United States for 183 days or more
                                            in the taxable year of such sale and certain other conditions are met (except as provided
                                            by an applicable treaty).
Generally,
a corporation is a "United States real property holding corporation" if the fair market value of its United States real property
interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used
or held for use in a trade or business (all as determined for U.S. federal income tax purposes). NBH expects that Newco will become
a United States real property holding corporation. A non-U.S. holder's adjusted tax basis in a subscription right should generally
equal its fair market value (if any) on the date of its distribution and a non-U.S. holder's holding period in a subscription right
begins on the date of receipt of such subscription right.
Exercise
of Subscription Rights
A
non-U.S. holder generally should not recognize any gain or loss upon the exercise of a subscription right. A non-U.S. holder's
initial tax basis in each share of Newco common stock acquired upon exercise of a subscription right generally should equal the sum of
(1) the non-U.S. holder's adjusted tax basis in such right and (2) the subscription price paid for such share. The holding
period for Newco common stock received upon exercise of a subscription right will begin on the day of the exercise of such subscription
right.
Expiration
of Subscription Rights
If
a subscription right expires without being exercised by a non-U.S. holder, the non-U.S. holder should generally recognize a capital loss
in an amount equal to such non-U.S. holder's adjusted tax basis (if any) in such right. A non-U.S. holder generally cannot deduct
capital losses, except to the extent effectively connected with a trade or business in the United States.
Cancellation
of the Rights Offering
There
is no authority that specifically addresses the tax treatment of a non-U.S. holder that receives, sells or exercises a subscription right
if NBH subsequently cancels the rights offering. NBH and applicable withholding agents are likely to take the position, for information
reporting, backup withholding and withholding tax purposes, that the treatment described above under "Receipt of Subscription Rights"
and below under "Information Reporting and Backup Withholding" continue to apply to such a non-U.S. holder. Such a non-U.S.
holder should consult its tax advisor as to whether to seek a refund of any such backup withholding or withholding tax from the IRS.
27
If
a non-U.S. holder has taxable dividend income upon the receipt of a subscription right even though NBH subsequently cancels the rights
offering, the non-U.S. holder should generally have a capital loss upon the cancellation of the subscription right in an amount equal
to such non-U.S. holder's adjusted tax basis (if any) in such right. A non-U.S. holder generally cannot deduct capital losses,
except to the extent effectively connected with a trade or business in the United States.
Tax
Considerations to U.S. Holders in Respect of Ownership and Disposition of Newco Common Stock
Dividends
.
Any
dividends paid by Newco out of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally
will be taxable to a U.S. holder as ordinary dividend income. Corporate U.S. holders should generally be eligible for the dividends received
deduction and non-corporate U.S. holders should generally qualify for reduced rates applicable to qualified dividend income, assuming,
in each case, that a minimum holding period and certain other generally applicable requirements are satisfied. Dividends in excess of
current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. holder's
basis in Newco common stock and thereafter as capital gain. U.S. holders should consult their own tax advisors with respect to the appropriate
U.S. federal income tax treatment of any dividend received from the Company. Dividends received by a non-corporate U.S. holder may be
subject to a 3.8% Medicare tax on net investment income.
Sales
or Other Dispositions of Newco Common Stock
.
A
U.S. holder will recognize capital gain or loss on the sale or other disposition of Newco common stock in an amount equal to the difference
between the U.S. holder's adjusted tax basis in such Newco common stock and the amount realized from the disposition. Any gain
or loss on a sale or other disposition of Newco common stock generally will be long-term capital gain or loss if the holder has held
such Newco common stock for more than one year. Deductions for capital losses are subject to limitations. Any gain recognized by a non-corporate
U.S. holder may be subject to a 3.8% Medicare tax on net investment income.
Tax
Considerations to Non-U.S. Holders in Respect of Ownership and Disposition of Newco Common Stock
Dividends
.
Any
dividends paid on Newco common stock that are characterized as dividends paid to a non-U.S. holder generally will be subject to withholding
of U.S. federal income tax at a 30% rate or such lower rate as may be provided by an applicable income tax treaty. To receive the benefit
of a reduced treaty rate, a non-U.S. holder must furnish to Newco or its paying agent a valid IRS Form W-8 (or applicable successor form)
certifying such holder's qualification for the reduced rate. This certification must be provided to Newco or its paying agent prior
to the payment of dividends and must be updated periodically. If a non-U.S. holder who qualifies for a reduced treaty rate but does not
timely provide Newco or the payment agent with the required certification, such non-U.S. holder may be entitled to a credit against their
U.S. federal income tax liability or a refund of the tax withheld, which the non-U.S. holder may claim by filing the appropriate claim
for refund with the IRS.
Dividends
that are treated as "effectively connected" with a trade or business conducted by a non-U.S. holder within the United States
(and, if an applicable income tax treaty so provides, are also attributable to a U.S. permanent establishment of such non-U.S. holder)
are not subject to withholding tax, provided the non-U.S. holder satisfies certain certification and disclosure requirements. Instead,
such dividends, net of specified deductions and credits, are taxed at the same graduated U.S. federal income tax rates applicable to
U.S. persons. To the extent a dividend is effectively connected with a U.S. trade or business, non-corporate non-U.S. holders may be
eligible for taxation at reduced U.S. federal income tax rates applicable to qualified dividend income. Any such effectively connected
dividends received by a non-U.S. holder that is a corporation may, under certain circumstances, be subject to an additional branch profits
tax at a 30% rate or such lower rate as specified by an applicable income tax treaty.
28
Sales
or Other Dispositions of Newco Common Stock
.
Subject
to the discussions under "Information Reporting and Backup Withholding" and "FATCA," below, a non-U.S. holder
will generally not be subject to any U.S. federal income tax or withholding tax on any gain realized upon such holder's sale or
other disposition of Newco common stock. Gain on the sale of Newco common stock may be subject to U.S. net income tax (and in respect
of corporate non-U.S. holders, branch profits tax) if the gain is effectively connected with a trade or business of the non-U.S. holder
in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base
of the non-U.S. holder within the United States). Additionally, a non-U.S. holder that is an individual who is present in the United
States for 183 days or more in the taxable year of the disposition and meets certain other requirements will be subject to a flat 30%
tax on the amount of gain derived from the sale that, together with certain other U.S. source capital gains realized during such year
exceed certain U.S. source capital losses realized during such year.
FATCA
Pursuant
to the Foreign Account Tax Compliance Act, or FATCA, foreign financial institutions (which include most foreign hedge funds, private
equity funds, mutual funds, securitization vehicles and any other investment vehicles) and certain other foreign entities must comply
with registration and information reporting rules with respect to their U.S. account holders and investors or be subject to a withholding
tax on U.S.-source payments made to them (whether received as a beneficial owner or as an intermediary for another party). A foreign
financial institution or other foreign entity that does not comply with the FATCA registration and reporting requirements will generally
be subject to a 30% withholding tax on "withholdable payments." For this purpose, withholdable payments generally include
U.S.-source payments (including U.S.-source dividends), and (subject to the proposed Treasury Regulations discussed below) the gross
proceeds from a sale of equity or debt instruments of issuers who are considered U.S. issuers under the FATCA rules. The FATCA withholding
tax applies even if the payment would otherwise not be subject to U.S. nonresident withholding tax (e.g., because it is capital gain).
While withholding under FATCA would also have applied to payments of gross proceeds from the sale or other disposition of stock on or
after January 1, 2019, proposed Treasury Regulations which, if finalized in their present form, would eliminate FATCA withholding on
payments of gross proceeds of a disposition of the subscription rights entirely. Taxpayers may generally rely on these proposed Treasury
Regulations until final Treasury Regulations are issued. Foreign financial institutions located in jurisdictions that have an intergovernmental
agreement with the United States governing FATCA may be subject to different rules. We will not pay additional amounts in respect of
amounts withheld. Investors should consult their tax advisors regarding possible implications of FATCA.
Information
Reporting and Backup Withholding
.
In
general, information reporting requirements may apply to dividends, sales proceeds or other amounts paid to U.S. holders and non-U.S.
holders, unless an exemption applies. Backup withholding tax may apply to amounts subject to reporting if the holder fails to provide
an accurate taxpayer identification number or fails to report all interest and dividends required to be shown on its U.S. federal income
tax returns. A U.S. holder or non-U.S. holder can claim a credit against its U.S. federal income tax liability for the amount of any
backup withholding tax and a refund of any overpayment of taxes, provided that all required information is timely provided to the IRS.
U.S. holders and non-U.S. holders should consult their tax advisors as to their qualification for exemption from backup withholding and
the procedure for establishing an exemption.
USE
OF PROCEEDS
Neither
NBH nor Newco will receive any proceeds from the exercise of the subscription rights by any stockholder.
29
BUSINESS
General
We
are an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the
United States. Our primary focus has been the development of interests in an oil and natural gas project we hold in the Orogrande Basin
in West Texas. In addition, we may consider various strategic options, including partnering with, or the possible sale of any or all
of our assets to, third parties. We operate our business through our wholly owned subsidiaries, Torchlight Energy, Inc., Hudspeth Oil
Corporation, Torchlight Hazel, LLC, Hudspeth Operating, LLC and Wolfbone Investments, LLC.
Presently,
our primary interests include the oil and natural gas leases for properties of the Orogrande Basin in Hudspeth County, Texas (the "Orogrande
Project"). In addition, we have minor interests in the Eastern edge of the Midland Basin in West Texas (the "Hazel Project")
and two minor well interests in Oklahoma (the "Oklahoma Properties").
Rich
Masterson, our consulting geologist, originated our Orogrande Project, as discussed below, based on his tenure as a geologist since 1974.
He is credited with originating the Wolfbone shale play in the Southern Delaware Basin of West Texas and has prepared prospects totaling
over 150,000 acres that have been leased, drilled and are currently being developed by Devon Energy Corp., Occidental Petroleum Corporation
and Noble Energy, among others.
The
Company has drilled 14 test wells in the Orogrande Project in the basin in order to stay in compliance with the continuous drilling clause
under the University Lands Development Unit Agreement (the "DDU Agreement"), as well as, to test for potential
shallow pay zones and deeper pay zones that may be present on structural plays. Development of the wells continued through March 31,
2023 to further capture and document the scientific base in support of demonstrating the production potential of the Orogrande Project
properties.
We
satisfied the 2021 and 2022 drilling obligations in the Orogrande Project and, in satisfying our 2021 and 2022 drilling obligations,
we identified new potential pay zones not yet discovered in the Orogrande Project.
In
addition to the Orogrande Project, we also have an interest in our Hazel Project in Tom Green County and Sterling County, Texas. In August
2020, our subsidiaries entered into the Option Agreement with MHP (the "Option Agreement"), under which, in exchange for
satisfying certain drilling obligations, MHP had the option to purchase the entire Hazel Project. The option to purchase the entire acreage
block was extended to September 30, 2021 and at such time MHP determined not to exercise the purchase option; however, MHP is entitled
to receive, as its sole recourse for the recoupment of drilling costs, the revenue from production of the well attributable to our interest
until such time as it has recovered its reasonable costs and expenses for drilling, completing and operating the well. Operations continue
under the Option Agreement until such time as the revenue from the project equates to the dollars spent by, and shall be reimbursed to,
MHP. At such time, any acreage held by production and all wells will revert back to our subsidiary, Torchlight Hazel, LLC.
Our
principal executive offices are located at 6300 Ridglea Place, Suite 950, Fort Worth, Texas 76116. The telephone number of our principal
executive offices is (817) 438-1937.
Key
Business Attributes
Experienced
People.
We have five full-time employees and we expect to engage consultants for various roles as needed including high quality exploration
and technical partners. We plan to build on the expertise and experiences of our management team and seek guidance from outside advisors
as well as our Board.
Project
Focus.
We are focusing primarily on exploitation projects. We may pursue high risk exploration prospects which may appear less favored
than low risk exploration. We will, however, consider these high risk- high reward exploration prospects in connection with exploitation
opportunities in a project that would reduce the overall project economic risk. We will consider such high risk-high reward prospects
on their individual merits.
30
Lower
Cost Structure.
We will attempt to maintain the lowest possible cost structure, enabling the greatest margins and providing opportunities
for investment that would not be feasible for higher cost competitors.
Limit
Capital Risks.
Limited capital exposure is planned initially to add value to a project and determine its economic viability. Management
has experience in successfully managing risks of projects, finance, and value.
Business
Processes
We
believe there are three principal business processes that we must follow to enable our operations to be profitable. Each major business
process offers the opportunity for a distinct partner or alliance as we grow. These processes are:
●
Investment
Evaluation and Review;
●
Operations
and Field Activities; and
●
Administrative
and Finance Management.
Investment
Evaluation and Review.
This process is the key ingredient to our success. Recognition of quality investment opportunities is the
fuel that drives our engine. Broadly, this process includes the following activities: prospect acquisition, regional and local geological
and geophysical evaluations, data processing, economic analysis, lease acquisition and negotiations, permitting, and field supervision.
We expect these evaluation processes to be managed by our management team. Expert or specific technical support will be outsourced as
needed.
Operations
and Field Activities.
This process begins following management approval of an investment. Well site supervision, construction, drilling,
logging, product marketing, and transportation are examples of some of these activities. We prefer to be the operator where possible.
Administrative
and Finance Management.
This process coordinates our initial structuring and capitalization, general operations and accounting, reporting,
audit, banking and cash management, regulatory agencies reporting and interaction, timely and accurate payment of royalties, taxes, leases
rentals, vendor accounts and performance management that includes budgeting and maintenance of financial controls, and interface with
legal counsel and tax and other financial and business advisors.
Current
Projects
As
of March 31, 2022, we had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel
Project in Sterling, Tom Green, and Irion Counties, Texas and the Oklahoma Properties. See the description under "Current Projects"
below under Note 4, "Oil & Natural Gas Properties," of the financial statements included with this prospectus for information
and disclosure regarding these projects, which description is incorporated herein by reference.
Our
Properties
Our
principal executive office is located at 6300 Ridglea Place, Suite 950, Fort Worth, Texas 76116. We currently sublease this office space
and believe that the condition and size of our offices are adequate for our current needs.
The
Orogrande Project consists of unevaluated and undeveloped properties in progress of development for future production.
Total Acres
Developed Acres
Undeveloped Acres
Gross
Net
Gross
Net
Gross
Net
Texas—
Orogrande Project
134,000
134,000
—
—
134,000
134,000
Hazel Project
645
516
645
516
—
—
Oklahoma—
Viking
640
192
640
192
—
—
Total
135,285
134,708
1,285
708
134,000
134,000
31
Investments
to support our oil and natural gas properties during the years ended December 31, 2022 and 2021 were $5.8 million ($3.8 million for the
predecessor period plus $2.0 million for the successor period) and $14.8 million, respectively.
Fiscal Year Ended
December 31,
2022
2021
Property acquisition costs
$
—
$
—
Development costs
5,835,880
14,805,511
Exploratory costs
—
—
Totals
$
5,835,880
$
14,805,511
Property
development costs presented above exclude interest capitalized into the full cost pool. For the year ended December 31, 2022, we capitalized
$1,363,538 ($1,289,328 for the predecessor period plus $74,210 for the successor period) of interest on unevaluated properties. Capitalized
interest for the year ended December 31, 2021 was $141,048.
The
development costs for 2021 include work in the Orogrande and Hazel Projects in West Texas and for 2022 the development costs include
work solely in the Orogrande Project. We made progress during 2022 to develop proved producing reserves in the Orogrande Project in the
Permian Basin in West Texas, which has not yet resulted in hydrocarbon production. We incurred costs of $5.8 million in relation to certain
drilling activity carried out to remain in compliance with all aspects of our lease obligations and to satisfy the continuous drilling
clause under the agreement with University Lands, whereby we are obligated to satisfy certain minimum yearly requirements that may be
exceeded if desired. No development costs were incurred in 2021 or 2022 for the Oklahoma Properties. During the fiscal years ended December
31, 2021 and 2022, development and exploratory net wells were drilled as set forth in the table below.
Drilling
Activity Summary
December 31,
2022
2021
Hazel Project (Texas)
Dry
0
1.60
Productive
0
0.00
Orogrande Project (Texas)
Dry
0
0.67
(1)
Productive
0
2.66
(1)
Represents
drilling re-entry to explore more of the formation.
During
2022, we completed pre-drilling and development activity for our 2022 drilling program, including surveying, permitting, road and pad
site work and initial drilling at an aggregate cost of $3,583,235 and satisfied our 2022 drilling obligations as of March 31, 2023. We
will soon commence drilling activities for the 2023 drilling program and have until December 31, 2023 to fully satisfy our obligations
for the 2023 fiscal year.
December 31, 2022
December 31, 2021
Gross
Net
Gross
Net
Productive Wells
Oil
5.00
2.67
5.00
2.67
Gas
4.00
2.66
4.00
2.66
Test Wells
Salt Water Disposal
3.00
2.13
3.00
2.13
Fresh Water Supply
3.00
2.00
3.00
2.00
Plug & Abandon
5.00
3.87
5.00
3.87
32
With
the principal goal of gathering scientific data from a strategy of drilling test wells, all wells were drilled with the intent of being
completed and productive for hydrocarbons. Two horizontal wells were successfully completed for hydrocarbons through the 2020 drilling
program, however as of December 31, 2022 both wells remain shut-in waiting for hook-up to a gas pipeline. The various wells drilled on
the Orogrande Project through 2022 confirmed that there are at least five potential distinct reservoirs under our acreage. While these
wells may have potential to produce hydrocarbons to sell commercially in the future, due to capital constraints we have no immediate
plans to deploy the capital necessary to sell production from these wells to third parties. Instead, we plan to use the results from
these wells to determine our drilling plans for future wells, including well locations, target depths and designated acreage, in the
Orogrande Project. The remaining wells can be used for future development for various applications such re-entering the wellbores for
horizontal unconventional development, fresh water supply, or salt water disposal and/or plugged and abandoned.
Production,
Price, and Production Cost History
Oklahoma
Properties
During
the year ended December 31, 2021, we produced and sold 85 Bbls net to our interest at an average sale price of $55.00 per Bbl.
We produced and sold 3,586 Mcf of gas net to our interest at an average sales price of $3.17 per Mcf. Our average production cost including
lease operating expenses and direct production taxes was $18.54 per BOE. Our depreciation, depletion, and amortization expense was $-0-
per BOE.
During
the year ended December 31, 2022, we produced and sold 183 Bbls net to our interest (168 for the predecessor period plus 15 for the successor
period) at an average sale price of $98.75 per Bbl. We produced and sold 3,031 Mcf of natural gas net to our interest (2,789 for the
predecessor period plus 242 for the successor period) at an average sales price of $7.51 per Mcf. Our average production cost including
lease operating expenses and direct production taxes was $42.68 per BOE. Our depreciation, depletion, and amortization expense was $-0-
per BOE.
Hazel
Project
During
the year ended December 31, 2021, 23,422 Bbls net to our interest were sold at an average sale price of approximately $60.00 per
Bbl, although we received none of this revenue because all of it, after deducting expenses to produce the oil, was either received by
MHP directly during the time that the Option Agreement was in effect or credited towards the recoupment of drilling costs incurred by
MHP. We produced and sold -0- Mcf of natural gas net to our interest.
December 31, 2021
December 31, 2021
Reserves
Future
    Net Revenue (M$)
Present Value
Category
Oil
    (Bbls)
Gas
    (Mcf)
Total
    (BOE)
Total
Discounted
    at 10%
Net Proved Producing
0
0
0
$
—
$
—
Net Proved
    Nonproducing
0
0
0
$
—
$
—
Total
    Net Proved
0
0
0
$
—
$
—
Standardized
    Measure of Future Net Cash Flows Related to Proved Oil and Gas Properties
$
—
Probable
    Undeveloped
$
—
$
—
33
During
the year ended December 31, 2022, 22,511 Bbls net to our interest (21,647 for the predecessor period plus 864 for the successor
period) were sold at an average sale price of approximately $55.98 per Bbl, although we received none of this revenue because all of
it, after deducting expenses to produce the oil, was either received by MHP directly during the time that the Option Agreement was in
effect or credited towards the recoupment of drilling costs incurred by MHP. We produced and sold -0- Mcf of natural gas net to our interest.
December 31, 2022
December 31, 2022
Reserves
Future
    Net Revenue (M$)
Present Value
Category
Oil
    (Bbls)
Gas
    (Mcf)
Total
    (BOE)
Total
Discounted
    at 10%
Net Proved Producing
0
0
0
$
0
$
0
Net Proved
    Nonproducing
0
0
0
$
—
$
—
Total
    Net Proved
0
0
0
$
—
$
—
Standardized
    Measure of Future Net Cash Flows Related to Proved Oil and Gas Properties
$
—
Probable
    Undeveloped
0
0
0
$
—
$
—
The
net producing reserves from 2021 and 2022 were -0- BOE related to the Producing Hazel Wells due to the obligation to pass revenue through
to MHP under the terms of the Option Agreement effective during both periods. Since we have no reserve value as of December 31, 2021
and December 31, 2022, Standardized Measure is not presented.
Due
to the inherent uncertainties and the limited nature of reservoir data, both proved and probable reserves are subject to change as additional
information becomes available. The estimates of reserves, future cash flows, and present value are based on various assumptions, including
those prescribed by the SEC, and are inherently imprecise.
For
the three months ended March 31, 2023, we had production revenue of $10,924 compared to $-0- of production revenue for the prior year
period. The change in revenue was primarily due to revenue from production sold from the Oklahoma wells. Our cost of revenue, consisting
of lease operating expenses and production taxes, was $16,602 for the three months ended March 31, 2023 compared to $10,621 for the prior
year period. Refer to the table of production and revenue included below for changes in revenue:
Oil
Gas
Production
Production
Oil
Gas
Total
Property
Quarter
(Bbls)
(Mcf)
Revenue
Revenue
Revenue
Oklahoma
Q1 - 2022
0
0
$
—
$
—
$
—
Hazel (TX)
Q1 - 2022
0
0
—
—
—
Total Q1-2022
0
0
$
—
$
—
$
—
Oklahoma
Q2 - 2022
97
1,267
$
9,688
$
7,716
$
17,404
Hazel (TX)
Q2 - 2022
0
0
—
—
—
Total Q2-2022
97
1,267
$
9,688
$
7,716
$
17,404
Oklahoma
Q3 - 2022
43
887
$
4,635
$
8,329
$
12,964
Hazel (TX)
Q3 - 2022
0
0
—
—
—
Total Q3-2022
43
887
$
4,635
$
8,329
$
12,964
Oklahoma
Q4 - 2022
Predecessor
28
635
$
2,473
$
5,432
$
7,905
Successor
15
242
1,276
1,285
2,561
Hazel (TX)
Q4 - 2022
0
0
—
—
—
Total Q4-2022
43
877
$
3,749
$
6,717
$
10,466
Total 2022
183
3,031
$
18,072
$
22,762
$
40,834
Average Commodity Price
$
98.75
$
7.51
Oklahoma
Q1 - 2023
107
748
$
8,141
$
2,783
$
10,924
Hazel (TX)
Q1 - 2023
0
0
—
—
—
Total Q1-2023
107
748
$
8,141
$
2,783
$
10,924
Average Commodity
    Price
$
76.08
$
3.72
34
Industry
and Business Environment
We
are experiencing a time of fluctuating, but higher oil prices caused by higher demand, lower U.S. supply, turmoil on the world stage
and OPEC's policies on production. Unfortunately, this is the cyclical nature of the oil and natural gas industry. We experience
highs and lows that seem to come in cycles. Fortunately, there exists plenty of demand for US onshore oil and natural gas. We believe
advances in technology drive the US market and we feel this will drive the development costs down on our exploration and drilling programs
while maintaining favorable economics.
Competition
The
oil and natural gas industry is intensely competitive, and we will compete with numerous other companies engaged in the exploration and
production of oil and natural gas. Some of these companies have substantially greater resources than we have. Not only do they explore
for and produce oil and natural gas, but also many carry on midstream and refining operations and market petroleum and other products
on a regional, national, or worldwide basis. The operations of other companies may be able to pay more for exploratory prospects and
productive oil and natural gas properties. They may also have more resources to define, evaluate, bid for, and purchase a greater number
of properties and prospects than our financial or human resources permit. Our larger or integrated competitors may have the resources
to be better able to absorb the burden of current and future federal, state, and local laws and regulations more easily than we can,
which would adversely affect our competitive position. Our ability to locate reserves and acquire interests in properties in the future
will be dependent upon our ability and resources to evaluate and select suitable properties and consummate transactions in this highly
competitive environment. In addition, we may be at a disadvantage in producing oil and natural gas properties and bidding for exploratory
prospects because we have fewer financial and human resources than other companies in our industry. Should a larger and better financed
company decide to directly compete with us, and be successful in its efforts, our business could be adversely affected.
Marketing
and Customers
The
market for oil and natural gas that we will produce depends on factors beyond our control, including the extent of domestic production
and imports of oil and natural gas, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for
oil and natural gas, the marketing of competitive fuels, and the effects of state and federal regulation. The oil and natural gas industry
also competes with other industries in supplying the energy and fuel requirements of industrial, commercial, and individual consumers.
35
Our
oil production is expected to be sold at prices tied to the spot oil markets. Our natural gas production is expected to be sold under
short-term contracts and priced based on first of the month index prices or on daily spot market prices. We will rely on our operating
partners to market and sell our production.
Governmental
Regulation and Environmental Matters
Our
operations are subject to various rules, regulations, and limitations impacting the oil and natural gas exploration and production industry
as a whole.
Regulation
of Oil and Natural Gas Production
Our
oil and natural gas exploration, production, and related operations, when developed, will be subject to extensive rules and regulations
promulgated by federal, state, tribal, and local authorities and agencies. Certain states may also have statutes or regulations addressing
conservation matters, including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum
rates of production from wells, and the regulation of spacing, plugging, and abandonment of such wells. We cover all costs associated
with the related insurance coverage for such environmental regulatory compliance. Failure to comply with any such rules and regulations
can result in substantial penalties. The regulatory burden on the oil and natural gas industry will most likely increase our cost of
doing business and may affect our profitability. Although we believe we are currently in substantial compliance with all applicable laws
and regulations, because such rules and regulations are frequently amended or reinterpreted, we are unable to predict the future cost
or impact of complying with such laws. Significant expenditures may be required to comply with governmental laws and regulations and
may have a material adverse effect on our financial condition and results of operations.
Environmental
Matters
Our
operations and properties are and will be subject to extensive and changing federal, state, and local laws and regulations relating to
environmental protection, including the generation, storage, handling, emission, transportation, and discharge of materials into the
environment, and relating to safety and health. In the future, environmental legislation and regulation may trend toward stricter standards.
These laws and regulations may, for example:
●
require
the acquisition of a permit or other authorization before construction or drilling commences and for certain other activities;
●
limit
or prohibit construction, drilling, and other activities on certain lands lying within wilderness and other protected areas;
●
impose
substantial liabilities for pollution resulting from operations; or
●
restrict
certain areas from fracking and other stimulation techniques.
The
permits required for our operations may be subject to revocation, modification, and renewal by issuing authorities. Governmental authorities
have the power to enforce their regulations, and violations are subject to fines or injunctions, or both. In the opinion of management,
we are and will be in substantial compliance with current applicable environmental laws and regulations and have no material commitments
for capital expenditures to comply with existing environmental requirements. Nevertheless, changes in existing environmental laws and
regulations or in interpretations thereof could have a significant impact on our company, as well as the oil and natural gas industry
in general.
CERCLA
and comparable state statutes impose strict, joint, and several liability on owners and operators of sites and on persons who disposed
of or arranged for the disposal of "hazardous substances" found at such sites. It is not uncommon for the neighboring landowners
and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into
the environment. RCRA and comparable state statutes govern the disposal of "solid waste" and "hazardous waste"
and authorize the imposition of substantial fines and penalties for noncompliance. Although CERCLA currently excludes petroleum from
its definition of "hazardous substance," state laws affecting our operations may impose clean-up liability relating to petroleum
and petroleum related products. In addition, although RCRA classifies certain oil field wastes as "non-hazardous," such exploration
and production wastes could be reclassified as hazardous wastes thereby making such wastes subject to more stringent handling and disposal
requirements.
36
The
Endangered Species Act ("ESA") seeks to ensure that activities do not jeopardize endangered or threatened animal, fish, and
plant species, nor destroy or modify the critical habitat of such species. Under the ESA, exploration and production operations, as well
as actions by federal agencies, may not significantly impair or jeopardize protected species or habitat. The ESA provides for criminal
and civil penalties for violations. Other statutes that provide protection to animal and plant species and that may apply to our operations
include, but are not necessarily limited to, the Fish and Wildlife Coordination Act, the Fishery Conservation and Management Act, the
Migratory Bird Treaty Act and the National Historic Preservation Act. Although we believe that our operations are and will be in substantial
compliance with such statutes, any change in these statutes or any reclassification of a species as endangered could subject us to significant
expenses to modify our operations or could force us to discontinue certain operations altogether.
Hydraulic
fracturing is regulated by state and federal environmental and oil and gas regulatory authorities, including specifically the requirement
to disclose certain information related to hydraulic fracturing operations. Operators must follow applicable legal requirements for groundwater
protection and are subject to supervision by state and federal regulators (including the BLM on federal acreage). Furthermore, well construction
practices require the installation of multiple layers of protective steel casing surrounded by cement that are specifically designed
and installed to protect freshwater aquifers by preventing the migration of fracturing fluids into aquifers. Regulatory proposals in
some states and local communities have been initiated to require or make more stringent the permitting and compliance requirements for
hydraulic fracturing operations. Federal and state agencies have continued to assess the impacts of hydraulic fracturing, which could
spur further action toward federal and/or state legislation and regulation of hydraulic fracturing activities. In addition, in light
of concerns about seismic activity being triggered by the injection of produced waters into underground wells and hydraulic fracturing,
certain regulators are also considering additional requirements related to seismic safety for hydraulic fracturing activities. Further
restrictions on hydraulic fracturing could make it prohibitive to conduct our operations, and also reduce the amount of oil and natural
gas that we or our operators are ultimately able to produce from our properties.
Climate
Change
Significant
studies and research have been devoted to climate change and global warming, and climate change has developed into a major political
issue in the United States and globally. Certain research suggests that greenhouse gas emissions contribute to climate change and pose
a threat to the environment. Recent scientific research and political debate has focused in part on carbon dioxide and methane incidental
to oil and natural gas exploration and production. Many states and the federal government have enacted legislation directed at controlling
greenhouse gas emissions, and future legislation and regulation could impose additional restrictions or requirements in connection with
our drilling and production activities and favor use of alternative energy sources, which could affect operating costs and demand for
oil products. As such, our business could be materially adversely affected by domestic and international legislation targeted at controlling
climate change.
Legal
Proceedings
On
April 30, 2020, the Company's wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
("Cordax"). The suit, Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies, was
filed in the 189th Judicial District Court of Harris County, Texas. The suit seeks the recovery of approximately $1.4 million in costs
incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located in the Orogrande
Field. Wolfbone is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral lien in the amount of $104,500 against
the Orogrande Field and has sued the operator and counterclaimed against Hudspeth for breach of contract, seeking the same amount as
the lien. Meta, on our behalf as our parent at the time, determined to add the manufacturer of one of the tool components that it contends
was one of the causes of the tool failure. It was later disclosed that Cordax is the subsidiary of a Canadian parent company, who has
also been added to the case. Cordax's current Chairman of the Board filed a special appearance after being served with a citation,
alleging that he was a Canadian citizen with no meaningful ties to Texas. After discovery was conducted on this issue, a nonsuit without
prejudice for this defendant was filed, dismissing him from the case. The remaining parties attended mediation on June 15, 2022, that
was unsuccessful in resolving the case. Discovery is ongoing. The Company has presented several of its witnesses for deposition and is
preparing to depose Cordax's key fact witnesses. The case is set for trial in October 2023.
37
On
March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in
the amount of $104,500.01 and recover related attorney's fees. The foreclosure action, Datalog LWT Inc. d/b/a Cordax Evaluation
Technologies v. Torchlight Energy Resources, Inc., was filed in the 205th Judicial District Court of Hudspeth County, Texas. We are contesting
the lien in good faith and filed a Plea in Abatement on May 10, 2021, seeking a stay in the Hudspeth County lien foreclosure case pending
final disposition of the related case currently pending in Harris County, Texas. We are required to indemnify Meta in connection with
this matter pursuant to the terms of the Distribution Agreement between us and Meta in connection to the Spin-Off (the "Distribution
Agreement").
38
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited
and unaudited financial statements and related notes that are included elsewhere in this report. Some of the information contained in
this discussion and analysis constitutes forward-looking statements that involve risks and uncertainties. Actual results could differ
materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include,
but are not limited to, those discussed below and elsewhere in this report, particularly under the section titled "Cautionary Statement
Concerning Forward-Looking Statements."
Overview
Our
consolidated financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements
and accounting records of Meta. Our consolidated financial statements reflect our financial position, results of operations and cash
flows as we were historically managed, in conformity with GAAP. Our financial statements include certain assets and liabilities that
have historically been held at the Meta corporate level but are specifically identifiable or otherwise attributable to us.
All
intercompany transactions between us and Meta have been included in our financial statements. The intercompany transactions are reflected
in our consolidated statements of cash flow as a financing activity and in our consolidated balance sheets as "Notes payable –
Meta".
The
historical costs and expenses reflected in our financial statements include an allocation for certain corporate shared service functions
historically provided by Meta including executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement,
information technology and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable,
with the remainder allocated on a pro rata basis based on sales, headcount, tangible assets or other measures considered to be a reasonable
reflection of the historical utilization levels of these services.
Our
management believes the assumptions underlying our financial statements, including the assumptions regarding the allocation of general
corporate expenses from Meta are reasonable. Nevertheless, our financial statements may not include all of the actual expenses that would
have been incurred had we operated as a stand-alone company during the periods presented and may not reflect what our actual results
of operations, financial position and cash flows would have been if we had operated as a stand-alone company during the periods presented.
Actual costs that would have been incurred if we had operated as a stand-alone company would depend on multiple factors, including organizational
structure and strategic decisions made in various areas, including information technology and infrastructure. We now perform these functions
using our own resources and purchased services.
The
period December 15, 2022 through December 31, 2022 is referred to herein as the "successor period" and the period from January
1, 2022 through December 14, 2022 is referred to herein as the "predecessor period". The predecessor period is reflective
of the Company while a subsidiary of our former parent Meta. The successor period is reflective of the Company after the Spin-Off as
an independent public reporting company.
On
December 21, 2022, we entered into that certain Agreement and Plan of Merger (the "Merger Agreement") with Hudspeth, Wolfbone,
MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such leases, pooling
and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in the Orogrande Project were
transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations
(as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance
of 56,297,638 shares of our common stock to Mr. McCabe (such series of transactions collectively, the "Merger"). On April
25, 2023, the Merger was completed in accordance with the Texas Business Organizations Code, whereby (a) the Company formed
NBH MergeCo, LLC with the State of Texas ("MergeCo") in order to cause Hudspeth to assign all of its rights under the
Merger Agreement to MergeCo and MergeCo assumed Hudspeth's obligations under the Merger Agreement, (b) MergeCo, Wolfbone
and MPC merged with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone became a direct and wholly-owned subsidiary
of the Company. The closing of the transactions contemplated by the Merger Agreement occurred on May 11, 2023.
In
connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note. The Company is entitled to request advances
under the 2022 Note in a minimum principal amount of $100,000 each. Mr. McCabe is the largest shareholder of our common stock. As such,
the Merger and 2022 Note constitute related party transactions which have been duly approved by our Board and Audit Committee.
39
We
met our drilling obligations under the DDU Agreement to drill five new wells in the Orogrande Project in advance of the March 31, 2023
deadline under University Lands lease requirement. The data collected from these five wells, in addition to the five wells drilled in
2021, confirmed that there are at least five potential distinct reservoirs under our acreage. Also, our operations team deployed a new
mist drilling solution which increased hole stability, which we believe will result in meaningful cost savings for additional wells drilled
in the Orogrande Project. While these wells may have potential to produce hydrocarbons to sell commercially in the future, we have no
immediate plans to deploy the additional capital necessary to sell production from these wells to third parties. Instead, we plan to
use the results from these wells to determine our drilling plans for future wells, including reservoir locations, target depths and designated
acreage, in the Orogrande Project.
On
March 31, 2023, we entered into an amendment to the 2021 Note and an amendment to Loan Agreement in order to extend the maturity date
of each of the 2021 Note and the Loan Agreement respectively from March 31, 2023 to October 3, 2023. Such amendments also
removed the provisions allowing for extensions of the maturity date of each of the 2021 Note and the Loan Agreement in the event
the Company raised $30 million or more in capital through debt or equity or a combination thereof by March 31, 2023.
On
May 11, 2023, the Company and its wholly owned subsidiary Hudspeth, entered into a contribution and exchange agreement with each of the
prior working interest owners in the Orogrande Project named in the table below (each an "Orogrande Owner" and collectively,
the "Orogrande Owners"), pursuant to which the Company issued to the Orogrande Owners the number of shares of the Company's
common stock set forth opposite such Orogrande Owner's name below in exchange for and in order to acquire such Orogrande Owner's
rights to working interest in the Orogrande Project.
Shares of Common Stock
Working
    Interest Contribution
Dingus Investments, Inc.
7,050,382
2.8334
%
Pandora Energy, LP
6,220,779
2.5000
%
Kennedy Minerals, Ltd
6,220,779
2.5000
%
The de Compiegne Property Company No. 20, Ltd
6,220,779
2.5000
%
Loma Hombre Energy, LLC
622,078
0.2500
%
Sero Capital, LLC
725,840
0.2917
%
TOTAL
27,060,637
10.8751
%
Income
Taxes
Judgment
is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. In the ordinary
course of business, tax issues may arise where the ultimate outcome is uncertain. Additionally, our tax returns are subject to audit
by various tax authorities. Consequently, changes in our estimates for contingent tax liabilities may materially impact our results of
operations or financial position.
Results
of Operations
Historical
Results for the Years Ended December 31, 2022 (for the Predecessor Period January 1, 2022 through December 14, 2022, and for the Successor
Period December 15, 2022 through December 31, 2022) and 2021
For
the predecessor period, we had a net loss of $7,938,335 and for the successor period, we had a net loss of $910,538 compared to a net
loss of $8,238,808 for the year ended December 31, 2021. The increase in net loss is primarily due to increased general and administrative
expenses and interest expenses for the year ended December 31, 2022, offset by a loss on sale of oil and natural gas property for the
year ended December 31, 2021. At December 31, 2022, we had current assets of $959,118 and total assets of $80,735,224. As of December
31, 2022, we had current liabilities of $30,036,709. Stockholders' equity was $50,541,649 at December 31, 2022.
Revenue
and Gross Profit
Year Ended December 31,
2022
2021
Successor
Predecessor
Combined
Product sales BOE
59
633
692
15,904
Total Revenue
$
2,561
$
38,273
$
40,834
$
15,904
Cost of revenue
(6,055
)
(71,243
)
(77,298
)
(76,331
)
Gross Profit (Loss)
$
(3,494
)
$
(32,970
)
$
(36,464
)
$
(60,427
)
Gross Profit (Loss) percentage
(136.43
)%
(86.14
)%
(89.30
)%
(379.95
)%
40
Production
Revenues and Cost of Revenue
For
the year ended December 31, 2022, we had production revenue of $40,834 ($38,273 for the predecessor period plus $2,561 for the successor
period) compared to $15,904 of production revenue for the year ended December 31, 2021. The change in revenue was primarily due to the
increase in oil and natural gas production from 683 BOE for the 2021 period to 688 BOE for the 2022 period, from the Oklahoma Properties,
an increase in the average price of oil from $55.01 in 2021 to $98.75 in 2022 and an increase in the average price of natural gas from
$3.13 in 2021 to $7.51 in 2022. Our cost of revenue, consisting of lease operating expenses and production taxes, was $77,298 for the
year ended December 31, 2022 compared with $76,331 for the year ended December 31, 2021. For each of the years ended December 31, 2021
and 2022, production and revenue are detailed as follows:
Oil
Gas
Production
Production
Oil
Gas
Total
Property
Quarter
(Bbls)
(Mcf)
Revenue
Revenue
Revenue
Oklahoma
Q1
    – 2021
28
711
$
1,166
$
1,305
$
2,471
Hazel
    (TX)
Q1
        – 2021
0
0
—
—
—
Total
    Q1-2021
28
711
$
1,166
$
1,305
$
2,471
Oklahoma
Q2
        – 2021
28
1,212
$
1,692
$
1,814
$
3,506
Hazel
    (TX)
Q2
        – 2021
0
0
—
—
—
Total
    Q2-2021
28
1,212
$
1,692
$
1,814
$
3,506
Oklahoma
Q3
        – 2021
29
441
$
1,818
$
1,146
$
2,964
Hazel
    (TX)
Q3
        – 2021
0
0
—
—
—
Total
    Q3-2021
29
441
$
1,818
$
1,146
$
2,964
Oklahoma
Q4
        – 2021
0
1,222
$
—
$
6,963
$
6,963
Hazel
    (TX)
Q4
        – 2021
0
0
—
—
—
Total
    Q4-2021
0
1,222
$
—
$
6,963
$
6,963
Total
    2021
85
3,586
$
4,676
$
11,228
$
15,904
Average
    Commodity Price
$
55.01
$
3.13
Oil
Gas
Production
Production
Oil
Gas
Total
Property
Quarter
(Bbls)
(Mcf)
Revenue
Revenue
Revenue
Oklahoma
Q1
        – 2022
0
0
$
—
$
—
$
—
Hazel
    (TX)
Q1
        – 2022
0
0
—
—
—
Total
    Q1-2022
0
0
$
—
$
—
$
—
Oklahoma
Q2
        – 2022
97
1,267
$
9,688
$
7,716
$
17,404
Hazel
    (TX)
Q2
        – 2022
0
0
—
—
—
Total
    Q2-2022
97
1,267
$
9,688
$
7,716
$
17,404
Oklahoma
Q3
        – 2022
43
887
$
4,635
$
8,329
$
12,964
Hazel
    (TX)
Q3
        – 2022
0
0
—
—
—
Total
    Q3-2022
43
887
$
4,635
$
8,329
$
12,964
Oklahoma
Q4
        – 2022
Predecessor
28
635
$
2,473
$
5,432
$
7,905
Successor
15
242
1,276
1,285
2,561
Hazel
    (TX)
Q4
        – 2022
0
0
—
—
—
Total
    Q4-2022
43
877
$
3,749
$
6,717
$
10,455
Total
    2022
183
3,031
$
18,072
$
22,762
$
40,834
Average
    Commodity Price
$
98.75
$
7.51
41
Expenses
for the Years Ended December 31, 2022 and 2021
We
recorded depreciation, depletion and amortization expense of $-0- for the year ended December 31, 2022 compared to $4,642 for the year
ended December 31, 2021.
Operating
Expenses
Year Ended December 31,
2022
2021
Successor
Predecessor
Combined
Operating Expenses
General & Administrative
$
907,045
$
7,905,860
$
8,812,905
$
8,050,443
Total operating expenses
$
907,045
$
7,905,860
$
8,812,905
$
8,050,443
General
and Administrative Expenses
Our
general and administrative expense for the year ended December 31, 2022 was $8,812,905 ($7,905,860 for the predecessor period plus $907,045
for the successor period) compared with $8,050,443 for the year ended December 31, 2021. Our general and administrative expenses consisted
of consulting and compensation expense, substantially all of which were non-cash or deferred, accounting and administrative costs, professional
consulting fees, and other general corporate expenses. The change in general and administrative expenses in 2022, compared to 2021, is
primarily due to employee compensation and an increase in consulting fees, filing fees, legal fees, director and officer liability insurance,
and investor relations expenses incurred in connection with the spin-off of the Company from Meta.
Results
for the Three Months Ended March 31, 2022 and 2023
Revenue
and Gross Profit
Three Months Ended March 31,
2023
2022
Product Sales BOE
232
0
Total Revenue
$
10,924
$
0
Cost of revenue
$
(16,602
)
$
(10,621
)
Gross Profit (Loss)
$
(5,678
)
$
(10,621
)
Gross profit  percentage
(51.98
)%
0.00
%
42
Production
Revenues and Cost of Revenue
For
the three months ended March 31, 2023, we had production revenue of $10,924 compared to $-0- of production revenue for the prior year
period. The change in revenue was primarily due to revenue from production sold from the Oklahoma wells. Our cost of revenue, consisting
of lease operating expenses and production taxes, was $16,602 for the three months ended March 31, 2023 compared to $10,621 for the prior
year period. Refer to the table of production and revenue included below for changes in revenue:
Oil
Gas
Production
Production
Oil
Gas
Total
Property
Quarter
(Bbls)
(Mcf)
Revenue
Revenue
Revenue
Oklahoma
Q1 – 2022
0
0
$
—
$
—
$
—
Hazel (TX)
Q1 – 2022
0
0
—
—
—
Total Q1-2022
0
0
$
—
$
—
$
—
Oklahoma
Q2 – 2022
97
1,267
$
9,688
$
7,716
$
17,404
Hazel (TX)
Q2 – 2022
0
0
—
—
—
Total Q2-2022
97
1,267
$
9,688
$
7,716
$
17,404
Oklahoma
Q3 – 2022
43
887
$
4,635
$
8,329
$
12,964
Hazel
    (TX)
Q3 – 2022
0
0
—
—
—
Total Q3-2022
43
887
$
4,635
$
8,329
$
12,964
Oklahoma
Q4 – 2022
Predecessor
28
635
$
2,473
$
5,432
$
7,905
Successor
15
242
1,276
1,285
2,561
Hazel (TX)
Q4 – 2022
0
0
—
—
—
Total Q4-2022
43
877
$
3,749
$
6,717
$
10,466
Total 2022
183
3,031
$
18,072
$
22,762
$
40,834
Average Commodity Price
$
98.75
$
7.51
Oklahoma
Q1 – 2023
107
748
$
8,141
$
2,783
$
10,924
Hazel (TX)
Q1 – 2023
0
0
—
—
—
Total Q1-2023
107
748
$
8,141
$
2,783
$
10,924
Average Commodity Price
$
76.08
$
3.72
Expenses
for the Three Months Ended March 31, 2023 and 2022
We
recorded depreciation, depletion and amortization expense of $-0- for the three months ended March 31, 2023, which was the same as the
prior year period.
Operating
Expenses
Three Months Ended March 31,
2023
2022
Operating Expenses
General & Administrative
$
2,381,774
$
825,737
Total operating expenses
$
2,381,774
$
825,737
General
and Administrative Expenses
Our
general and administrative expense for the three-month period ended March 31, 2023, was $2,381,774 compared with $825,737 for the prior
year period. Our general and administrative expenses consisted of employee compensation expense, accounting and administrative costs,
legal and other professional consulting fees, and other general corporate expenses. The change in general and administrative expenses
in 2023, compared to 2022, is primarily due to increased employee compensation and an increase in consulting fees, filing fees, legal
fees, director and officer liability insurance, and expense recorded relative to the issuance of employee stock options.
43
Cash
Flows, Liquidity and Capital Resources.
Cash
Flows
The
following table summarizes sources and uses of cash and cash equivalents:
Year Ended December 31,
2022
2021
Successor
Predecessor
Combined
Cash Flows From Operating Activities
Net loss
$
(910,538
)
$
(7,938,335
)
$
(8,848,873
)
$
(8,238,808
)
Adjustments to reconcile net loss to net cash from operations:
Accretion expense
1,092
—
1,092
—
Bad debt expense
—
(26,612
)
(26,612
)
—
Depreciation, depletion and amortization
—
—
—
4,642
Paid in kind interest
—
—
—
208,889
Change in:
Accounts receivable
—
74,310
74,310
(94,310
)
Accounts receivable, related party
—
(14,153
)
(14,153
)
86,754
Prepayments – development costs
—
(150,000
)
(150,000
)
101,005
Other assets
39,185
(94,364
)
(55,179
)
(25,000
)
Prepaid expenses
(58,225
)
(1,408
)
(59,633
)
—
Accounts payable and accrued expenses
1,154,917
(64,982
)
1,089,935
906,287
Other payables
—
2,589,363
2,589,363
—
Accrued interest payable
(1,091
)
—
(1,091
)
—
Net cash provided by (used in) operating activities
225,340
(5,626,181
)
(5,400,841
)
(7,050,541
)
Cash Flows From Investing Activities
Investment in oil and natural gas properties
(1,976,029
)
(3,859,851
)
(5,835,880
)
(14,805,511
Proceeds from sale of oil and natural gas properties
—
—
—
—
Net cash used in investing activities
(1,976,029
)
(3,859,851
)
(5,835,880
)
(14,805,511
)
Cash Flows From Financing Activities
Contributions from parent
—
316,600
316,600
11,214,967
Proceeds from notes payable, related party
2,000,000
7,500,000
9,500,000
12,500,000
Net cash provided by financing activities
2,000,000
7,816,600
9,816,600
23,714,967
Net increase (decrease) in cash
249,311
(1,669,432
)
(1,420,121
)
1,858,915
Cash—beginning of period
319,987
1,989,419
1,989,419
130,504
Cash—end of period
$
569,298
$
319,987
$
569,298
$
1,989,419
Supplemental disclosure of cash flow information:
Cash paid for interest
$
—
$
—
$
—
$
3,312
Cash paid for state franchise tax
$
—
$
—
$
—
$
—
Supplemental disclosure of non-cash investing and financing activities:
Account payable reduced by expense offset
$
—
$
15,638
$
15,638
$
—
Capitalized Interest included in interest payable
$
74,210
$
1,289,328
$
1,363,538
$
141,048
44
At
December 31, 2022, we had cash and cash equivalents of $569,298 compared to $1,989,419 as of December 31, 2021.
Cash
Flows From Operating Activities
Cash
used in operating activities for the year ended December 31, 2022, was $5,400,841 compared to $7,050,541 for the year ended December
31, 2021.
Cash
used in operating activities for the year ended December 31, 2022 can be attributed principally to net loss from operations of $8,848,873
adjusted for $3,679,298 in an increase in other liabilities, and accounts payable and accrued expenses.
Cash
Flows from Investing Activities
Cash
used in investing activities for the year ended December 31, 2022 was $5,835,880 compared to $14,805,511 for year ended December 31,
2021. Cash used in investing activities consisted primarily of investments in oil and natural gas properties in 2022.
Cash
Flows from Financing Activities
Cash
provided by financing activities for the year ended December 31, 2022 was $9,816,600 compared to $23,714,967 for the year ended December
31, 2021. Cash flows provided by financing activities consists primarily of intercompany loans from Meta and the 2022 Note during the
year ended December 31, 2022.
We
expect to continue to have cash flows provided by financing activities as we seek new rounds of financing and continue to develop our
oil and natural gas investments. We do not expect to pay cash dividends on our common stock in the foreseeable future.
Reference
the Consolidated Statements of Cash Flows included in the financial statements for additional detail of the components that comprise
the net use of cash in operations. We expect to continue to use cash flows in operating activities until such time as we achieve sufficient
commercial oil and natural gas production to cover our operating costs.
Capital
Expenditures
Our
capital expenditures are summarized in the following table:
Year Ended December 31,
2022
2021
Successor
Predecessor
Acquisitions:
Proved property
$
—
$
—
$
—
Unproved property
—
—
—
Exploration and development:
Developmental leasehold costs
—
—
—
Exploratory drilling and completion costs
—
—
—
Development drilling and completion costs
1,975,944
3,859,936
14,805,511
Other development costs
—
—
—
Capitalized interest
74,210
1,289,328
141,048
Asset retirement obligations
245,774
—
21,937
Total exploration and development
2,295,928
5,149,264
14,968,496
Other property
—
—
—
Total capital expenditures
$
2,295,928
$
5,149,264
$
14,968,496
Change in accrued capital expenditures and other
(949,093
)
650,562
909,287
Prepaid drilling costs
—
150,000
101,005
Capitalized Interest
(74,210
)
(1,289,328
)
(141,048
)
Asset retirement obligations
(245,774
)
—
(21,937
)
Total cash capital expenditures
$
1,026,851
$
4,660,498
$
15,812,803
45
Cash
Flow for the Three Months Ended March 31, 2023 and 2022
At
March 31, 2023, we had cash and cash equivalents of $5,301,647 compared to $829,145 as of March 31, 2022. At March 31, 2023, we had working
capital deficit of $40,244,765 and total assets of $94,237,199. Stockholders' equity was $48,209,353. The negative working capital
is principally due to notes payable which will be payable within one year.
The
following table summarizes sources and uses of cash and cash equivalents:
Three Months Ended March 31
2023
2022
Cash Flows From Operating Activities
Net loss
$
(2,387,451
)
$
(836,035
)
Adjustments to reconcile net loss to net cash from operations:
Accretion expense
5,865
—
Expense related to stock options issued
145,155
—
Change in:
Accounts receivable
—
21,468
Prepayments – development costs
150,000
—
Prepaid expenses
11,117
2,310
Accounts payable and accrued expenses
1,499,658
(2,081,524
)
Related party payables
—
2,500,000
Net cash provided by (used in) operating activities
(575,656
)
(393,781
)
Cash Flows From Investing Activities
Investment in oil and natural gas properties
(8,437,883
)
(1,084,285
)
Net cash used in investing activities
(8,437,883
)
(1,084,285
)
Cash Flows From Financing Activities
Contributions from parent
—
317,792
Proceeds from notes payable, related party
14,875,000
—
Payments on promissory notes
(1,129,112
)
—
Net cash provided by financing activities
13,745,888
317,792
Net increase (decrease) in cash
4,732,349
(1,160,274
)
Cash—beginning of period
569,298
1,989,419
Cash—end of period
$
5,301,647
$
829,145
Supplemental disclosure of cash flow information:
Cash paid for interest
$
129,112
$
—
Cash paid for state franchise tax
$
—
$
—
Supplemental disclosure of non-cash investing and financing activities:
Capitalized Interest
$
492,860
$
—
46
Cash
Flow Used in Operating Activities
Cash
flow used in operating activities for the three months ended March 31, 2023 was $575,656 compared to $393,781 for the three months ended
March 31, 2022. Cash flows used in operating activities for the three months ended March 31, 2023 can be primarily attributed to the
net loss from operations offset by an increase in accounts payable. Cash flows used in operating activities for the three months ended
March 31, 2022 can be primarily attributed to the net loss from operations offset by a net increase in related party payables and a decrease
in accounts payable. We expect to continue to use cash flow in operating activities until such time as we achieve sufficient commercial
oil and gas production to cover all of our cash costs.
Cash
Flow Used in Investing Activities
Cash
flow used in investing activities for the three months ended March 31, 2023 was $8,437,883 compared to $1,084,285 for the three months
ended March 31, 2022. Cash flow used in investing activities principally consists of investment in oil and natural gas properties in
Texas.
Cash
Flows from Financing Activities
Cash
flows from financing activities for the three months ended March 31, 2023 was $13,745,888 compared to $317,792 for the three months ended
March 31, 2022. Cash flows from financing activities consists of proceeds from additional borrowings under the 2022 Note, which had a
principal balance of $16,875,000 outstanding as of March 31, 2023. For the three months ended March 31, 2023, we incurred aggregate interest
on the 2022 Note, the 2021 Note and under the Loan Agreement of $92,860.
Capital
Expenditures
Our
capital expenditures are summarized in the following table:
Three Months Ended March 31,
2023
2022
Acquisitions:
Proved property
$
—
$
—
Unproved property
—
—
Exploration and development:
Developmental leasehold costs
—
—
Exploratory drilling and completion costs
—
—
Development drilling and completion costs
8,437,883
1,084,285
Other development costs
—
—
Capitalized interest
492,860
—
Asset retirement obligations
—
—
Total exploration and development
8,930,743
1,084,285
Other property
—
—
Total capital expenditures
$
8,930,743
$
1,084,285
Change in accrued capital expenditures and other
(3,580,231
)
1,178,282
Prepaid drilling costs
(150,000
)
—
Capitalized interest
(492,860
)
—
Asset retirement obligations
—
—
Total cash capital expenditures
$
4,707,652
$
2,262,567
47
Liquidity
and Capital Resources
Liquidity
risk is the risk that we will not meet our financial obligations as they become due after use of currently available cash. We have a
planning and budgeting process to monitor operating cash requirements, including amounts projected for capital expenditures, which are
adjusted as input variables change. These variables include, but are not limited to, our ability to generate revenue from operations,
general and administrative requirements and the availability of equity or debt capital. As these variables change, we may be required
to issue equity or obtain debt financing.
The
2021 Note
On
October 1, 2021, we issued a secured, revolving promissory note in an original principal amount of up to $15 million, which was subsequently
increased to $20 million, in favor of Meta (as amended to date, the "2021 Note"). The 2021 Note is fully drawn with
a principal balance outstanding of $20 million, bears interest at 8% per annum, computed on the basis of a 360-day year, and matures
on October 3, 2023. If an event of default has occurred and is continuing, interest on the 2021 Note may accrue at the default rate
of 12% per annum.
The
2021 Note is secured by a security interest in (a) pursuant to a Stock Pledge Agreement dated as of September 30, 2021 between Gregory
McCabe (the "Pledgor") and Meta (the "Stock Pledge Agreement"), 1,515,000 shares of Meta's common stock
that are owned directly and beneficially by the Pledgor, and (b) pursuant to a Deed of Trust, Mortgage, Security Agreement, Fixture Filing,
Financing Statement and Assignment of Production dated as of September 30, 2021 made by Wolfbone (an affiliate of the Pledgor) for the
benefit of Meta (the "Security Agreement"), a 25% working interest beneficially owned by the Pledgor in the Orogrande Project
as defined in the Security Agreement. Following the Merger, we expect Wolfbone to become an indirect subsidiary of the Company and the
Security Agreement to remain in place.
The
2021 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our ability to merge or consolidate
with another person or entity, or sell or transfer all or substantially all of our assets, unless we are the surviving entity or the
successor entity assumes all of obligations under the 2021 Note.
Upon
the occurrence and during the continuance of an event of default under the 2021 Note, Meta as the lender may declare all outstanding
principal and accrued and unpaid interest under the 2021 Note immediately due and payable, may terminate any remaining commitment to
make advances under the 2021 Note, and may exercise the other rights and remedies provided for under the 2021 Note and related security
documents. The events of default under the 2021 Note include among other things, subject to grace periods in certain instances, payment
defaults, breaches of covenants, an event of default under the Stock Pledge Agreement or the Security Agreement, bankruptcy and insolvency
events with respect us or our subsidiaries, cross defaults with certain of our other material indebtedness, and material judgments against
us.
48
Additionally,
we have an aggregate principal balance of $6,589,361.77 outstanding under a Loan Agreement with Meta (the "Loan Agreement"),
which bears interest at a fixed rate of 8% per annum if no event of default exists, and at a fixed rate of 12% per annum if an event
of default exists. The loans under the Loan Agreement mature on October 3, 2023. The total amount of accrued and unpaid interest under
the Loan Agreement was $273,002 as of March 31, 2023.
We
have the right to prepay the loans under the Loan Agreement in whole or in part at any time without penalty. Amounts repaid or prepaid
may not be reborrowed. We will be required to prepay the loans upon an asset disposition (other than permitted asset sales), certain
equity issuances (other than permitted equity), debt issuances (other than permitted debt), and certain extraordinary receipts. We are
required to prepay the loans from our annual excess cash flow, if any.
The
Loan Agreement includes customary representations and covenants that, subject to certain exceptions and qualifications, restrict our
ability to do certain things, such as: incur additional indebtedness; incur liens; engage in mergers, acquisitions, and asset sales;
make loans and investments; declare dividends or redeem or repurchase equity interests; transact with affiliates on a non-arm's
length basis; and enter into certain restrictive agreements. In addition, the Loan Agreement contains customary affirmative covenants,
including covenants regarding the payment of taxes and other obligations, maintenance of insurance, maintenance of our existence and
material properties, customary visitation rights, reporting requirements, compliance with applicable laws and regulations, and formation
or acquisition of new subsidiaries.
Upon
the occurrence and during the continuance of an event of default, Meta as the lender has the right to declare all outstanding principal
and accrued and unpaid interest under the Loan Agreement immediately due and payable and exercise certain other rights and remedies.
The events of default under the Loan Agreement include among other things, subject to grace periods in certain instances, payment defaults,
breaches of covenants or representations and warranties, a change in control or a material adverse change defined in the Loan Agreement,
material judgments and attachments, cross defaults with certain other material indebtedness, and bankruptcy and insolvency events with
respect to the Company and our subsidiaries.
The 2022
Note
On
December 22, 2022, we issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe (the "2022
Note"). The 2022 Note bears interest at 5% per annum, computed on the basis of a 365-day year, and matures on October 3,
2023 (the "2022 Note Maturity Date"). The revolving commitment under the 2022 Note expires on 2022 Note Maturity Date.
As of March 31, 2023, we had $16.9 million principal amount outstanding and $3.1 million of available borrowings
under the 2022 Note. The total amount of accrued and unpaid interest under the 2022 Note was $22,885.
The
2022 Note includes a restrictive covenant that, subject to certain exceptions and qualifications, restricts our ability to merge or consolidate
with another person or entity, or sell or transfer all or substantially all of our assets, unless we are the surviving entity or the
successor entity assumes all of obligations under the 2022 Note.
Upon
the occurrence and during the continuance of an event of default under the 2022 Note, Mr. McCabe as the lender may declare all outstanding
principal and accrued and unpaid interest under the 2022 Note immediately due and payable, may terminate any remaining commitment to
make advances under the 2022 Note, and may exercise the other rights and remedies provided for under the 2022 Note. The events of default
under the 2022 Note include among other things, subject to grace periods in certain instances, payment defaults, breaches of covenants,
bankruptcy and insolvency events with respect us or our subsidiaries, cross defaults with certain of our other material indebtedness,
and material judgments against us.
As
of March 31, 2023, we had aggregate interest accrued on the 2022 Note, the 2021 Note and under the Loan Agreement of $1,985,332.
Contractual
Obligations
Our
most significant contractual obligations relate to the Loan Agreement, the 2021 Note, 2022 Note and drilling and development commitments
and other lease operating expenses under certain leases for the Orogrande Project. See the discussion under the caption "Liquidity and Capital Resources."
49
In addition to our debt commitments, the Orogrande
Project leases representing approximately 134,000 gross acres in the Orogrande Basin in West Texas are subject to expiration in 2023 in
the event we fail to drill five wells during the 2023 calendar year in compliance with our drilling obligations under the DDU Agreement.
We do not yet know what our capital expenditure needs will be to satisfy our drilling commitments for the calendar year 2023. For a discussion
of the risks relating to our drilling obligations, see "Risk Factors—Risks Relating to Our Business", including the
risk factor "—
Our acreage must be drilled before lease expiration in order to hold the acreage by production. In the highly
competitive market for acreage, failure to drill sufficient wells in order to hold acreage will result in a substantial lease renewal
cost, or if renewal is not feasible, loss of our lease and prospective drilling opportunities
". See also Notes 5 and 12 of the
notes to our financial statements as of and for the year ended December 31, 2022.
Management
believes that currently available resources may not provide sufficient funds to enable us to meet our financing and drilling obligations
for the 2023 fiscal year. We anticipate that we will continue to incur operating losses and generate negative cash flows from operations
for the foreseeable future. As a result, we will need additional capital resources to fund our operations both in the short term and
in the long term, prior to achieving break even or positive operating cash flow. While we do not have any committed sources of capital,
we expect to continue to opportunistically seek access to additional funds through public or private equity offerings or debt financings,
through partnering or other strategic arrangements, including credit application arrangements with our third party servicers, or a combination
of the foregoing. Despite our efforts, we may face obstacles in continuing to attract new financing due to industry conditions and our
history and current record of net losses. We can provide no assurance that we will be able to obtain the financing required to meet our
stated objectives or even to continue as a going concern.
Critical
Accounting Estimates.
Oil
and natural gas properties
—The Company uses the full cost method of accounting for exploration and development activities as
defined by the SEC. Under this method of accounting, the costs of unsuccessful, as well as successful, exploration and development activities
are capitalized as properties and equipment. This includes any internal costs that are directly related to property acquisition, exploration
and development activities but does not include any costs related to production, general corporate overhead or similar activities. Gain
or loss on the sale or other disposition of oil and natural gas properties is not recognized, unless the gain or loss would significantly
alter the relationship between capitalized costs and proved reserves.
Oil
and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs
excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated
with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated
properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the
reservoir. Unevaluated properties are reviewed for impairment at least annually and are determined through an evaluation considering,
among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining
capital plan, and political, economic, and market conditions.
50
Gains
and losses on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would significantly
alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Company's interest in the
oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as
doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually
charged to accumulated depreciation.
Depreciation,
depletion, and amortization
—The depreciable base for oil and natural gas properties includes the sum of all capitalized costs
net of accumulated depreciation, depletion, and amortization ("DD&A"), estimated future development costs and asset retirement
costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and natural
gas properties is amortized on a unit-of-production method.
Ceiling
test
—Future production volumes from oil and gas properties are a significant factor in determining the full cost ceiling limitation
of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a "ceiling test"
that determines a limit on the book value of oil and gas properties. If the net capitalized cost of proved oil and gas properties, net
of related deferred income taxes, plus the cost of unproved oil and gas properties, exceeds the present value of estimated future net
cash flows discounted at 10%, net of related tax affects, plus the cost of unproved oil and gas properties, the excess is charged to
expense and reflected as additional accumulated DD&A. The ceiling test calculation uses a commodity price assumption which is based
on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12-month period and
excludes future cash outflows related to estimated abandonment costs.
The
determination of oil and gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available
data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and
future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably
from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based
on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and gas reserves
could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances,
and other factors which are difficult to predict could also affect estimates of proved reserves in the future.
Asset
retirement obligations
—The fair value of a liability for an asset's retirement obligation ("ARO") is recognized
in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized as
part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period,
and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction
of the ARO liability.
Inherent
in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors,
credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments.
To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is
made to the oil and gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss
upon settlement.
Recent
Accounting Pronouncements
Our
audited financial statements and the accompanying notes thereto found elsewhere in this prospectus contain a description of recent
accounting pronouncements.
51
The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited
financial statements and related notes that are included elsewhere in this prospectus and the audited consolidated financial statements
and related notes. Some of the information contained in this discussion and analysis constitutes forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from those discussed in these forward-looking statements. Factors
that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this report,
particularly under the section titled "Cautionary Statement Concerning Forward-Looking Statements."
References
to "Predecessor" relate to the results of operations of the Company as a subsidiary of our former parent Meta prior to the
separation of the Company in December 2022 as reported in the consolidated financial statements for the three months ended March 31,
2022, and references to "Successor" relate to the results of operations of the Company as an independent public reporting
company as reported in our consolidated financial statements for the three month period ended March 31, 2023, in each case, in accordance
with GAAP.
52
MANAGEMENT
Executive
Officers and Non-Employee Directors
The
following table and biographical descriptions provide information regarding our directors and executive officers.
Name
Age
Position
Executive
    Officers
Clifton
    DuBose, Jr
41
Chief
    Executive Officer, President
Lucas
    T. Hawkins
37
Chief
    Financial Officer
Delvina
    Oelkers
36
Chief
    Operating Officer
Non-Employee
    Directors
Gregory
    McCabe
62
Chairman
Robert
    Lance Cook
66
Director
Mia
    Pitts
39
Director
Kristin
    Whitley
39
Director
Executive
Officers
Clifton
DuBose, Jr.
has successfully acquired, managed, and/or sold thousands of royalty acres and non-operated working interests in the
Permian Basin. Since May 2018, Mr. DuBose has served as co-founder and member of Valor Mineral Management LLC ("Valor").
Valor is a mineral and working interest management firm which uses a proprietary software platform it has developed, known as "mineral.tech."
Since August 2016, Mr. DuBose has also served as President of Imperial Royalty Management I, LLC, which is the general partner of a company
that owns certain mineral interests, and since August 2016 as the managing member of Korban Resources LLC, a company which invests in
oil and gas interests. Mr. DuBose is also an attorney, licensed to practice law in the State of Texas. He earned his law degree from
Georgetown Law, in Washington D.C. in 2009 and a BS in Agribusiness from Abilene Christian University in 2004.
Lucas
T. Hawkins
is the Co-Founder and has served as Chief Financial Officer of Mammoth Exploration LLC, a private equity backed upstream
oil and gas company, since June 2016. Since July 2013, Mr. Hawkins has served as VP—Business Development of Hawkins Exploration,
Inc. ("HEI"). HEI is an independently owned oil and gas exploration company focused on the Permian Basin. Mr. Hawkins led,
managed and executed numerous acquisitions and subsequent development of oil and gas properties across the Permian Basin. From 2010 to
2011, Mr. Hawkins served as an Associate with The Sterling Group, a middle market private equity group focusing on industrial, manufacturing
and distribution businesses. From 2011 to 2013 Mr. Hawkins served as an Associate with Natural Gas Partners, an energy private equity
firm. Mr. Hawkins has a background in energy investment banking and private equity and earned his BBA in Finance and Business Honors
from the University of Texas at Austin.
Delvina
Oelkers
served as Asset Manager from March 2016 to March 2019 at Eclipse Resources and as Completions Manager from March 2019 to
November 2020 at Montage Resources, in each position where she managed engineering teams, achieving cost and efficiency improvements
while implementing innovative technology for substantial reserve recovery. She led her operations team through several successful M&A
transactions. Ms. Oelkers designed completions for the Eclipse and Montage Resources Super Lateral Program, including the design and
execution of the first world-record-setting "Purple Hayes 1H" Well. As an Asset Manager at Eclipse Resources, Ms. Oelkers
was responsible for leading the multidisciplinary team to prove-up the asset. By utilizing innovative technologies in design, the first
exploratory well produced 35% higher than type curve.
Non-Employee
Directors
Gregory
McCabe
owns and manages McCabe Petroleum Corporation. Mr. McCabe has active ownership in several other oil and gas entities including
Manix Royalty, Texas Rock Oil, TRO-X, and McCabe Minerals and Royalties. Working with geologist, Rich Masterson, Mr. McCabe was extremely
active in the early development of the Wolfbone play in the Delaware Basin portion of the Permian Basin. The experience and knowledge
learned in the Wolfbone play helped formulate Mr. McCabe and Mr. Masterson's theories and concepts regarding the Orogrande Basin.
In addition to his work in the Orogrande and Delaware Basins of Texas and New Mexico, Mr. McCabe has explored for oil and gas throughout
the U.S., including Louisiana, Utah, Arizona, Montana, and Nebraska. Mr. McCabe received his Bachelor of Science degree in Geology in
1984 from Sul Ross State University.
53
Robert
Lance Cook
spent 36 years at Shell Oil with final positions of Vice President of Wells Technology and Chief Scientist. Mr. Cook has
extensive experience in Deepwater, Arctic, and Unconventional Research & Development and Operations. Mr. Cook is the founder and
CEO of Enventure Global Technology, a joint venture between Shell and Halliburton. Mr. Cook has served as the COO of Sirius Well Manufacturing,
a joint venture between Shell and CNPC and is a technologist with an extensive patent portfolio. Since retiring from Shell in 2016, Mr.
Cook has served as Vice President of Production Operations for WellsX Inc. from 2017 to 2020 and in 2020, he founded and continues to
serves as president and chief technology officer of Sage Geosystems Inc.
Mia
Pitts
is currently serving as Chief Privacy Officer, US & Canada at Marsh McLennan Companies ("Marsh") after serving
as Senior Counsel, Privacy and Digital at Marsh from February 2018 until March 2023. Ms. Pitts previously was a litigator and regulatory
compliance lawyer at Freshfields Bruckhaus Deringer (March 2010- March 2016), one of the world's largest and oldest law firms.
Ms. Pitts has represented corporate and individual clients in internal, regulatory, civil, and criminal investigations before the U.S.
Securities and Exchange Commission, Department of Justice, and state attorney generals as well as in shareholder securities litigation,
class action litigations, and other private civil allegations and suits. She has also represented independent corporate oversight authorities
appointed by the federal government, including the DOJ-appointed monitor of a global financial institution and the federal court-appointed
receiver of a multi-national firm in an SEC securities fraud matter. Ms. Pitts graduated from Georgetown University Law Center and Barnard
College of Columbia University.
Kristin
Whitley, CPA
, began her career in June 2006 as a public accounting with Whitley Penn where she worked for 10 years. While at Whitley
Penn she served a variety of clients within the energy and mining industries. In August 2016, Mrs. Whitley joined Vista Minerals, a leading
in-basin regional provider of sand to industrial, oil and gas companies, in the role of Chief Accounting Officer and less than a year
later was named Chief Financial Officer. While at Vista Minerals, Mrs. Whitley has managed the finance and accounting, human resources,
and information technology functions, participating in numerous capital raises, strategic initiatives, contract negotiations, and risk
management exercises. Mrs. Whitley is a Certified Public Accountant in the State of Texas. She graduated from The University of Texas
at Austin with her BBA and from Texas Christian University's Neeley School of Business with her MBA. In 2019, Mrs. Whitley was
named one of Oil and Gas Investor's Forty Under 40 in Energy.
Conflicts
of Interest
Nevada
law permits corporations to adopt provisions renouncing any interest or expectancy in certain opportunities that are presented to the
corporation or its directors, officers or stockholders. Our Amended and Restated Articles of Incorporation, to the maximum extent permitted
from time to time by Nevada law, renounce any interest or expectancy that we have in, or right to be offered an opportunity to participate
in, specified business opportunities that are from time to time presented to our directors, officers or stockholders or their respective
affiliates. Our Amended and Restated Articles of Incorporation provide that, to the fullest extent permitted by law neither any director
or officer nor his or her affiliates will have any duty to refrain from (i) engaging in a corporate opportunity in the same or similar
lines of business in which we or our affiliates now engage or propose to engage or (ii) otherwise competing with us or our affiliates.
In addition, to the fullest extent permitted by law, in the event that any director or officer acquires knowledge of a potential transaction
or other business opportunity which may be a corporate opportunity for such director or officer or such person's affiliates or
for us or our affiliates, such person will have no duty to communicate or offer such transaction or business opportunity to us or any
of our affiliates and they may take any such opportunity for themselves or offer it to another person or entity. We do not believe, however,
that any fiduciary duties or contractual obligations of our directors or officers arising in the future would materially undermine our
ability to operate our business. Our Amended and Restated Articles of Incorporation do not renounce our interest in any business opportunity
that is expressly offered to a director or officer solely in his or her capacity as a director or officer of the Company. To the fullest
extent permitted by law, no business opportunity will be deemed to be a potential corporate opportunity for us unless we would be permitted
to undertake the opportunity under our Amended and Restated Articles of Incorporation, we have sufficient financial resources to undertake
the opportunity and the opportunity would be in line with our business.
54
Director
Independence
A
majority of the members of our Board meet the criteria for independence as defined by the corporate governance guidelines to be adopted
by our Board.
Corporate
Governance Guidelines
The
Board has not adopted a formal corporate governance policy.
Code
of Ethics and Code of Conduct
Our
Board of Directors has adopted a Code of Ethics and Code of Conduct that governs our directors, officers, and employees. A
copy of our Code of Conduct can be found on our website at nextbridgehydrocarbons.com/investors. We will post to our website any
amendments and waivers to the Code of Ethics and Code of Conduct that are required to be disclosed by the rules of the SEC.
Committees
of Our Board
We
have established an audit committee, a compensation committee, a nominating and governance committee and an ESG committee, each of which
operates under a written charter that is available on our website.
In
addition, our Board may, from time to time, designate one or more additional committees, which shall have the duties and powers granted
to it by our board of directors.
Audit
Committee
The
members of the Audit Committee consist of Kristin Whitley, as the chairperson, Mia Pitts and Robert L. Cook, each of whom meet the independence
requirements set forth in Rule 10A-3 under the Exchange Act and our Audit Committee Charter. Each member of the Audit Committee is financially
literate, and Ms. Whitley has accounting and related financial management expertise and satisfies the criteria to be an "audit
committee financial expert" under the rules and regulations of the SEC, as those qualifications are interpreted by our Board in
its business judgment.
The
functions of the Audit Committee include:
●
oversee
the quality and integrity of our financial statements, accounting practices and financial information we provide to the SEC or the public;
●
review
our annual and interim financial statements, the report of our independent registered public accounting firm on our annual financial
statements, Management's Report on Internal Control over Financial Reporting and the disclosures under Management's Discussion
and Analysis of Financial Condition and Results of Operations;
●
select
and appoint an independent registered public accounting firm;
●
pre-approve
all services to be provided to us by our independent registered public accounting firm;
●
review
related party transactions;
●
review
with our independent registered public accounting firm and our management the accounting firm's significant findings and recommendations
upon the completion of the annual financial audit and quarterly reviews;
●
review
and evaluate the qualification, performance, fees and independence of our registered public accounting firm;
55
●
meet
with our independent registered public accounting firm and our management regarding our internal controls, critical accounting policies
and practices and other matters;
●
discuss
with our independent registered public accounting firm and our management earnings releases prior to their issuance;
●
oversee
our internal audit function; and
●
oversee
our compliance program, response to regulatory actions involving financial, accounting and internal control matters, internal controls
and risk management policies.
Compensation
Committee
The
members of the Compensation Committee consist of Mia Pitts, as the chairperson, Kristin Whitley and Robert L. Cook, each of whom are
independent, "non-employee directors" (within the meaning of Rule 16b-3 under the Exchange Act).
The
functions of our Compensation Committee include:
●
setting
and reviewing our general policy regarding executive compensation;
●
determining
the compensation of our Chief Executive Officer and other executive officers;
●
approving
employment agreements for our Chief Executive Officer and other executive officers;
●
reviewing
the benefits provided to our Chief Executive Officer and other executive officers;
●
overseeing
our overall compensation structure, practices and benefits plans;
●
administering
our executive bonus and equity-based incentive plans; and
●
assessing
the independence of compensation consultants, legal counsel and other advisors to the Compensation Committee and hiring, approving the
fees and overseeing the work of, and terminating the services of such advisors.
Corporate
Governance and Nominating Committee
The
members of the Corporate Governance and Nominating Committee consist of Robert L. Cook, as the chairperson, Kristin Whitley and Mia Pitts,
each of whom are independent, "non-employee directors" (within the meaning of Rule 16b-3 under the Exchange Act).
The
functions of our Corporate Governance and Nominating Committee include:
●
overseeing
our corporate governance practices;
●
reviewing
and recommending to our Board amendments to our committee charters and other corporate governance guidelines;
●
reviewing
and making recommendations to our Board regarding the structure of our various board committees;
●
identifying,
reviewing and recommending to our Board individuals for election to the Board;
●
adopting
and reviewing policies regarding the consideration of board candidates proposed by stockholders and other criteria for Board membership;
and
●
overseeing
our Board's annual self-evaluation.
56
ESG
Committee
The
members of the ESG Committee consist of Kristin Whitley and Robert L. Cook.
The
functions of our ESG Committee include:
●
provide
    oversight with respect to ESG matters;
●
advise
    and assist the Board with its responsibilities for the oversight of ESG matters; and
●
provide
    oversight with respect to our annual sustainability report, which we plan to make available through our website.
Board
Leadership Structure and Role in Risk Oversight
Governance
Structure
Our
Board has the flexibility in its discretion to combine or separate the positions of Chairman of the Board and Chief Executive Officer.
The Board currently separates the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between
the two roles.  Our Chief Executive Officer, who is also a member of our Board, is responsible for setting the strategic direction
of the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the
Chief Executive Officer, sets the agenda for the Board meetings, presides over meetings of the Board and tries to reach a consensus on
Board decisions. Although these roles are currently separate, the Board believes it should be able to freely select the Chairman of the
Board based on criteria that it deems to be in the best interest of the Company and its stockholders, and therefore one person may, in
the future, serve as both the Chief Executive Officer and Chairman of the Board.
The
Board's Role in Risk Oversight
The
Board oversees that the assets of the Company are properly safeguarded, that the appropriate financial and other controls are maintained,
and that our business is conducted wisely and in compliance with applicable laws and regulations and proper governance. Included in these
responsibilities is the Board's oversight of the various risks facing our company. In this regard, our Board seeks to understand
and oversee critical business risks. The Board does not view risk in isolation. Risks are considered in virtually every business decision
and as part of our business strategy. The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful
and appropriate risk-taking is essential for the Company to be competitive on a global basis and to achieve its objectives.
Director
Compensation
We
did not pay any compensation or grant any equity or other incentive awards to any of directors who are not employed by us or any of our
subsidiaries ("non-employee directors") during the fiscal year ended December 31, 2022, nor did any of our non-employee directors
receive any such compensation or awards from Meta or any of our other affiliates for their services during such fiscal year. None of
our non-employee directors held any outstanding equity awards granted by us as of December 31, 2022. The compensation for Mr. DuBose
and Mr. DeWoody, who were each employed during the fiscal 2022, is reported in the Summary Compensation Table below, and they did not
receive any compensation for their service on the Board. Mr. DeWoody resigned from his position as an officer and director of the Company
effective as of June 30, 2023.
In
March 2023, the Board approved the grant of options to purchase 412,500 shares of our common stock to each of Ms. Whitley, Ms. Pitts
and Mr. Cook. On July 18, 2023, the Board approved an additional grant of options to purchase an additional 209,577
shares of our common stock to each of Ms. Whitley, Ms. Pitts and Mr. Cook. The exercise price and vesting and other terms of these options
are substantially the same as the options granted to our NEOs in March 2023 described below under "Performance-Based Options"
with respect to NEOs (defined below) shared with NBH.
57
EXECUTIVE
COMPENSATION
Incentive
Compensation Awards
Our
executive officers have not historically been paid bonuses or received equity awards, and our Board and Compensation Committee has not
yet established a formal compensation policy for the determination of such awards. If our revenue grows and bonuses become affordable
and justifiable, we expect to use the following parameters in justifying and quantifying bonuses for our executive officers: (1) the
growth in our revenue, (2) the growth in our earnings before interest, taxes, depreciation and amortization, as adjusted ("EBITDA"),
and (3) the value of our common stock. The Board and Compensation Committee has not adopted specific performance goals and target bonus
amounts for any of our fiscal years, but may do so in the future.
Benefits
At
this stage of our business, we provide no benefits or prerequisites for our employees other than health insurance and vacation benefits
that we believe are generally comparable to those offered by other small private and public companies or as may be required by applicable
state employment laws. We do not have a 401(k) retirement plan or any other retirement plan for our employee NEOs (defined below). We
may adopt these plans and confer other fringe benefits for our executive officers in the future.
Summary
Compensation Table—Fiscal Year 2022 and 2021
As
an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to "smaller reporting
companies," as such term is defined under the Securities Act, which require compensation disclosure for our principal executive
officer and the two most highly compensated executive officers (other than the principal executive officer) who were employed by us as
of December 31, 2022. In certain circumstances, the compensation of former executive officers may also need to be disclosed. The table
below sets forth the annual compensation for services rendered during 2021 and 2022 by these executive officers (also referred to as
our "named executive officers" or "NEOs").
Non-Equity
Non-Qualified
Stock
Option
Incentive Plan
Deferred
All Other
Salary
Bonus
Awards
Awards
Compensation
Compensation
Compensation
(1)
Total
Name and Principal Position
Year
($)
($)
($)
($)
($)
Earnings ($)
($)
($)
Clifton DuBose, Jr.
(2)
2022
400,000
36,000
436,000
Chief Executive Officer
2021
126,667
—
—
—
—
—
11,300
137,967
Joseph DeWoody
(2)(3)
2022
208,125
36,000
244,125
Former President of NBH
2021
63,333
—
—
—
—
—
11,300
74,633
Delvina Oelkers
(2)
2022
384,996
36,000
420,996
Chief Operating Officer
2021
121,915
—
—
—
—
—
11,300
133,215
(1)
The
amount includes insurance reimbursements paid to Mr. DuBose, Mr. DeWoody and Ms. Oelkers.
(2)
Mr. DuBose, Mr. DeWoody and Ms. Oelkers each commenced employment with
one of our subsidiaries, Hudspeth Operating, LLC, on September 7, 2021 each as a general manager.
(3)
Mr.
    DeWoody resigned as an officer and director of NBH and terminated his employment with NBH effective as of June 30, 2023.
58
Outstanding
Equity Awards as of December 31, 2022
As
of December 31, 2022, the NEOs did not hold any outstanding equity awards with respect to the equity securities of NBH.
Employment
Agreements
Each
of our currently employed NEOs has an employment agreement that became effective on December 14, 2022 (the closing date of the Spin-Off).
These agreements do not have a specified term and provide for the executive to receive an annual base salary as follows: Mr. DuBose –
$400,000; Ms. Oelkers - $385,000. Each currently employed NEO is also eligible for an annual discretionary bonus as determined by the
Board, with a target bonus of not less than 50% of the executive's base salary, and to participate in our benefit plans made available
to employees generally. If the executive's employment with NBH is terminated by NBH without "cause" or by the executive
for "good reason" (as defined in the agreement), the executive will receive severance of 12 months base salary, payable in
installments over a 12-month period, a pro-rated amount of the executive's target bonus for the year of termination, payment of
the executive's COBRA premiums for 12 months, and 12 months' accelerated vesting of the executive's then-outstanding
and unvested equity awards granted by NBH; however the cash severance and pro-rated target bonus will be payable only if such termination
occurs more than 12 months after the effective date of the employment agreements. However, if such a termination of the executive's
employment occurs in connection with or within 12 months following a change in control of NBH, the executive's cash severance will
equal 18 months of base salary (paid in a lump sum together with the pro-rated target bonus), the executive will be entitled to payment
of COBRA premiums for 18 months, and the executive's then-outstanding equity awards granted by NBH will be fully vested. In each
case, the executive's right to receive these severance benefits is subject to the executive's providing a release of claims
to NBH and continued compliance with confidentiality, non-competition, non-solicitation and other covenants in favor of NBH set forth
in the employment agreement.
All
liabilities in respect of the employment agreements will be retained by NBH. Newco will neither have nor assume any responsibility for
any incentive plan, employment agreement or other compensation plan of NBH and does not intend to establish a defined benefit plan.
Performance-Based
Options
In
March 2023, the Compensation Committee granted each of our NEOs a performance-based stock option under our 2022 Equity Incentive Plan
(the "2022 Plan") with respect to the following number of shares: for each of Mr. DuBose and Ms. Oelkers, 4,964,167
shares (which represented three percent of NBH's then-outstanding shares). The exercise price of each of these options is $1.2056
per share (which was based on an implied fair market value of $199,500,000 for NBH's working interest in the Orogrande Project).
In setting the exercise price of the options at this level, NBH intended to create an additional incentive for the executives to increase
the value of NBH's working interest above that threshold value of $199,500,000. As of May 11, 2023, NBH increased its working interest
in the Orogrande Project to 100% and as of July 18, 2023, each currently employed NEO was granted an additional option grant of
2,500,762 shares to restore their total grant to the percentage of our outstanding shares for that executive noted above. Each of these
options has a maximum term of 10 years, and the vesting of the option is generally contingent on the optionee's continued employment
or service through the first anniversary of the effective date of the optionee's employment agreement (or, if there is no such
agreement, the first anniversary of the grant date) or such longer period as provided in the option agreement. In connection with the
resignation of Joseph DeWoody effective June 30, 2023, the unvested options granted to him by the Compensation Committee in March 2023
are deemed forfeited and canceled.
59
Equity
Incentive Plan
We
maintain the 2022 Plan to attract, motivate, retain and reward selected employees and other service-providers of the Company and its
subsidiaries. Meta, as the sole stockholder of the Company at the time the 2022 Plan was adopted, approved the 2022 Plan. The 2022 Plan
is administered by the Compensation Committee, which has authority to interpret the plan provisions and make all required determinations
under the 2022 Plan. This authority includes, subject to the provisions of the 2022 Plan, selecting participants and determining
the types of awards they are to receive, determining the number of shares that are to be subject to awards and the terms and conditions
of awards, including the price (if any) to be paid for the shares or the award, accelerating or extending the vesting or exercisability
or extending the term of any or all outstanding awards, making certain adjustments to an outstanding award and authorizing the conversion,
succession or substitution of an award, determining the manner in which the purchase price of an award or the Company's common
shares may be paid, making required proportionate adjustments to outstanding awards upon the occurrence of certain corporate events such
as reorganizations, mergers and stock splits, and making provisions to ensure that any tax withholding obligations incurred in respect
of awards are satisfied. Awards granted under the plan may be stock options, stock appreciation rights, restricted stock or stock units,
or other awards denominated in or with reference to the Company's common stock, and are generally only transferable to a beneficiary
of a participant upon death or, in certain cases, to family members for tax or estate planning purposes.
Under
the terms of the 2022 Plan, a change in control of the Company does not automatically trigger vesting of the awards then outstanding
under the plan. If there is a change in control, each participant's outstanding awards granted under the plan will generally be
assumed by the successor company, unless the Compensation Committee provides that the award will not be assumed and will become fully
vested and, in the case of options, exercisable. Any options that become vested in connection with a change in control will generally
terminate to the extent they are not exercised prior to the change in control. As described above under "Employment Agreements,"
certain equity awards granted to the NEOs are subject to accelerated vesting under their employment agreements in the event of a termination
of employment under certain circumstances.
Equity
Compensation Plan Information
The
2022 Plan is our only equity compensation plan. The following table provides aggregate information as of the end of the 2022 fiscal year
with respect to the 2022 Plan:
Number of Securities
Remaining Available for
Future Issuance Under Equity
Number of Securities to be
Weighted-Average
Compensation Plans
Issued Upon Exercise of
Exercise Price of
(Excluding Securities
Outstanding Options
Outstanding Options
Reflected in Column(a))
Equity compensation plans approved by security holders
-
-
50,000,000
Total
-
-
50,000,000
60
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Prior
to the rights offering, 100% of Newco common stock, once formed, will be owned by NBH.
The
following table sets forth the beneficial ownership of NBH's common stock as of July 21, 2023 by:
●
each
person who we know beneficially owns more than 5% of NBH common stock;
●
each
of our directors;
●
each
of our named executive officers; and
●
all
directors and executive officers as a group.
The
persons named in the table have sole voting and investment power with respect to all shares of common stock of NBH shown as beneficially
owned by them, subject to community property laws, where applicable. Percentage ownership is based on 248,830,516 shares of our common
stock outstanding as of July 21, 2023.
Except
as otherwise noted in the footnotes below, each person or entity identified below has sole voting and investment power with respect to
such securities.
Name
Shares
of
Common
Stock
Percentage
of Voting
Common
Stock
Beneficially
Owned
Before this
Offering
5% or More Stockholders
Gregory McCabe
500 W. Texas Ave. #890
Midland, TX 79701
69,124,128
27.8
%
Directors and Executive Officers
Gregory McCabe
69,124,128
27.8
%
Robert L. Cook
101,000
*
Clifton DuBose Jr.
—
Lucas T. Hawkins
—
Delvina Oelkers
—
Mia Pitts
—
Kristin Whitley
—
All current directors and executive officers as a group (7 persons)
69,225,128
27.8
%
*
Represents
    less than 1%.
(1)
Assumes
    that the subscription rights are exercised in full by all stockholders of NBH.
61
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Transactions
between NBH and Stockholder Gregory McCabe
Mr.
McCabe is a significant shareholder and Chairman of the Board, and holds 27.8% of the outstanding shares of common stock of the Company
as of July 21, 2023.
Contribution
Agreement
In
connection with the rights offering, we, MPC and Mr. McCabe have entered into the Contribution Agreement pursuant to which (i) Mr. McCabe
will contribute to NBH the Back-In Interest and (ii) MPC will contribute to NBH the Bronco Prospect in proportion to the percentage
of shares of common stock of NBH that are directly registered in the name of the beneficial owner on the books and records of the Company's
transfer agent, whether previously registered directly or currently held through a bank, broker or other nominee who instruct such bank,
broker or other nominee and transferred to the beneficial owner on the books and records maintained by NBH's transfer agent on
or prior to the record date such that each such beneficial owner will be the registered holder of NBH's common stock and therefore
the registered holder of the distributed subscription rights in book-entry form in a new account with NBH's transfer agent.
Acquisition
of Working Interests
In
connection with the terms of that certain Purchase Agreement, dated August 7, 2014, among Hudspeth, MPC and Mr. McCabe and pursuant to
the Participation Agreement, Mr. McCabe has, at his option, the Back-In Interest after payout and a reversionary interest if drilling
obligations are not met, all under the terms and conditions of a participation and development agreement among Hudspeth, MPC and Mr.
McCabe. Mr. McCabe also holds a 4.5% overriding royalty interest in the Orogrande acreage.
Pursuant
to the Settlement & Purchase Agreement with Founders Oil & Gas Operating, LLC, whereby Hudspeth and Wolfbone, subsidiaries of
the Company, obtained a collective 50% working interest in the oil and gas leases of the Orogrande Project, with each entity receiving
25% working interest.
Under
that certain Farmout Agreement, by and among Hudspeth, Pandora Energy LP, Founders Oil & Gas, LLC, MPC and Mr. McCabe dated as of
September 23, 2015, as amended, future well capital spending obligations remained the same 50% contribution from Hudspeth and 50% from
Wolfbone until such time as the $40.5 million to be spent on the project. With such $40.5 million threshold being met, Wolfbone will
bear 25% of the costs of the wells being drilled in the Orogrande acreage going forward provided that Wolfbone elects to participate
in drilling such wells.
Additionally,
Mr. McCabe owns a controlling interest in Magdalena, an entity that holds a 4.5% overriding royalty interest in the Orogrande acreage.
Magdalena's overriding royalty interest in the Orogrande acreage, which was obtained prior to, and was not a part of any of the
transactions with the Company or its subsidiaries.
Torchlight
Energy Inc., a subsidiary of the Company, previously acquired from MPC a 66.66% working interest in approximately 12,000 acres in the
Midland Basin. As part of that transaction, MPC, Torchlight Energy Inc. and Imperial Exploration, LLC entered into a Participation Agreement
effective as of May 1, 2016. MPC and another unrelated working interest owner retained a back-in after payout working interest of 25%
in that same acreage, and the interest will be triggered back to MPC upon the proceeds from production equal the costs of developing
the project area.
On
December 21, 2022, the Company entered into a Merger Agreement, pursuant to which in a series of transactions the Orogrande Properties
(as defined in the Merger Agreement) owned by Wolfbone were assigned to Hudspeth (or its designated assignee) in consideration of (1)
treating the Orogrande Obligations (as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with
respect to MPC and (2) an issuance of 56,297,638 shares of our common stock to Mr. McCabe (such series of transactions collectively,
the "Merger"). The Merger was completed in April 2023 in accordance with the Texas Business Organizations Code, whereby Wolfbone
became a direct and wholly-owned subsidiary of the Company and the Company acquired Wolfbone's 22.6249% working interest in the
oil and natural gas properties covering approximately 134,000 acres located in the Orogrande Basin in West Texas in Hudspeth County,
Texas.
62
Reimbursement
Obligations
Pursuant
to the Option Agreement, MHP is entitled to reimbursement for its cost of the development activity to the extent that the
wells produced revenues beyond the date of the option's lapse until the total amount of development expenses are reimbursed. As
of March 31, 2023, there was an outstanding cost reimbursement balance in the amount of $3,671,688. Additionally, MPC holds a reversionary
interest burdening our proportionate interest in the Hazel Project of 20% pursuant to the terms of the Option Agreement.
The
Company's 2022 Note
On
December 22, 2022, the Company issued the 2022 Note in favor of Mr. McCabe. The 2022 Note bears interest at 5% per annum, computed on
the basis of a 365-day year, maturing October 3, 2023. As of March 31, 2023, the Company had $16.9 million in principal amount
outstanding and $3.1 million of available borrowings under the 2022 Note.
Policy
and Procedures Governing Related Party Transactions
The
Board has adopted a written policy regarding the approval of related party transactions. At regularly scheduled Audit Committee meetings,
management will recommend any related party transactions that are contemplated, and such transactions will require the Audit Committee's
approval. Generally, a "related party" is each of our executive officers, directors, nominees for director, any stockholder
owning greater than five percent of our outstanding shares, including any immediate family member of each of the foregoing, and any entity
owned or controlled by any of the foregoing. Transactions that are available to all of our employees generally or totaling less than
$5,000 when aggregated with all similar transactions are excluded from the policy.
With
respect to the standards applied by the Audit Committee when deciding whether to approve a related party transaction, the Audit Committee
shall approve or ratify the transaction if it is on terms believed to be comparable to those that could be obtained in arm's length
dealings with an unrelated third party. We believe that the transactions and agreements discussed below (including renewals of any existing
agreements) between us and related third parties are at least as favorable to us as could have been obtained from unrelated parties at
the time they were entered into.
63
DESCRIPTION
OF OUR CAPITAL STOCK
General
The
following summarizes information concerning our capital stock, including material provisions of our Amended and Restated Articles of
Incorporation, our Amended and Restated By-laws and certain provisions of Nevada law. You are encouraged to read our Amended and Restated
Articles of Incorporation and our Amended and Restated By-laws, which have been filed as exhibits to the Registration Statement on Form
S-1, of which this prospectus is a part, for greater detail with respect to these provisions.
The
Company was incorporated on August 31, 2021, and as of July 21, 2023, the Company had 248,830,516 shares of common stock
outstanding.
Authorized
Capital Stock
Our
authorized capital stock consists of 500,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of preferred
stock, par value $0.0001 per share.
Common
Stock
Voting
Rights
. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a
vote of the stockholders. Holders of shares of our common stock do not have cumulative voting rights.
Other
Rights
.
Subject to the preferential liquidation rights of any preferred stock that may be outstanding, upon our liquidation,
dissolution or winding-up, the holders of our common stock will be entitled to share ratably in our assets legally available for distribution
to our stockholders.
Fully
Paid
.
The issued and outstanding shares of our common stock are fully paid and non-assessable
.
Any additional
shares of common stock that we may issue in the future will also be fully paid and non-assessable.
The
holders of our common stock will not have preemptive rights or preferential rights to subscribe for shares of our capital stock.
Preferred
Stock
Our
Amended and Restated Articles of Incorporation authorize our Board to designate and issue from time to time one or more series of preferred
stock without stockholder approval. If we offer a new series of preferred stock, a more specific description may be filed with the SEC,
and the designations and rights of such preferred stock will be described in an accompanying prospectus, including the following terms:
●
the
    series, the number of shares offered, and the liquidation value of the preferred stock;
●
the
    price at which the preferred stock will be issued;
●
the
    dividend rate, the dates on which the dividends will be payable, and other terms relating to the payment of dividends on the preferred
    stock;
●
the
    liquidation preference of the preferred stock;
●
the
    voting rights of the preferred stock;
●
whether
    the preferred stock is redeemable, or subject to a sinking fund, and the terms of any such redemption or sinking fund;
64
●
whether
    the preferred stock is convertible, or exchangeable for any other securities, and the terms of any such conversion or exchange; and
●
any
    additional rights, preferences, qualifications, limitations, and restrictions of the preferred stock.
The
description of the terms of the preferred stock that will be set forth in an applicable prospectus will not be complete and will be subject
to and qualified in its entirety by reference to the certificate of designation relating to the applicable series of preferred stock.
The registration statement, of which this prospectus forms a part, will include the certificate of designation as an exhibit or incorporate
it by reference.
Undesignated
preferred stock may enable our Board to render more difficult or to discourage an attempt to obtain control of us by means of a tender
offer, proxy contest, merger, or otherwise and to thereby protect the continuity of our management. The issuance of shares of preferred
stock may adversely affect the rights of the holders of our common stock. For example, any preferred stock issued may:
●
rank
    senior to our common stock as to dividend rights, liquidation preference, or both;
●
have
    full or limited voting rights; and
●
be
    convertible into shares of common stock or another series of preferred stock.
The
issuance of additional preferred stock could adversely affect the voting power, conversion or other rights of holders of common stock.
Certain
Provisions of Nevada Law
Combination
with Interested Stockholders Statute
Sections
78.411 to 78.444 of the Nevada Revised Statutes (N.R.S.), which apply to any Nevada corporation with more than 200 stockholders, prohibits
an "interested stockholder" from entering into a "combination" with the corporation for two years, unless certain
conditions are met. A "combination" includes:
●
any
    merger of the corporation or any subsidiary of the corporation with an "interested stockholder," or any other entity,
    whether or not itself an "interested stockholder," which is, or after and as a result of the merger would be, an affiliate
    or associate of an "interested stockholder,"
●
any
    sales, lease, exchange, mortgage, pledge, transfer, or other disposition in one transaction, or a series of transactions, to or with
    an "interested stockholder" or any affiliate or associate of an "interested stockholder," of assets of the
    corporation or any subsidiary of the corporation:
●
having
    an aggregate market value equal to more than 5% of the aggregate market value of the corporation's assets, determined on a
    consolidated basis;
●
having
    an aggregate market value equal to more than 5% of the aggregate market value of all of the outstanding shares of the corporation;
    or
●
representing
    more than 10% of the earning power or net income, determined on a consolidated basis, of the corporation.
●
the
    issuance or transfer by the corporation or any subsidiary, of any shares of the corporation or any subsidiary to an "interested
    stockholder" or any affiliate or associate of an "interested stockholder," having an aggregate market value equal
    to 5% or more of the aggregate market value of all of the outstanding voting shares of the corporation, except under the exercise
    of warrants or rights to purchase shares offered, or a dividend or distribution paid or made, pro rata to all stockholders of the
    resident domestic corporation;
65
●
the
    adoption of any plan, or proposal for the liquidation or dissolution of the corporation, under any agreement, arrangement or understanding,
    with the "interested stockholder." or any affiliate or associated of the "interested stockholder;"
●
if
    any of the following actions occurs:
●
a
    reclassification of the corporation's securities, including, without limitation, any splitting of shares, share dividend, or
    other distribution of shares with respect to other shares, or any issuance of new shares in exchange for a proportionately greater
    number of old shares;
●
recapitalization
    of the corporation;
●
merger
    of consolidation of the corporation with any subsidiary; or
●
any
    other transaction, whether or not with or into or otherwise involving the interested stockholder, under any agreement, arrangement
    or understanding, whether or not in writing, with the interested stockholder or any affiliate or associate of the interested stockholder,
    which has the immediate and proximate effect of increasing the proportionate share of the outstanding shares of any class or series
    of voting shares or securities convertible into voting shares of the corporation or any subsidiary of the corporation which is beneficially
    owned by the interested stockholder or any affiliate or associate of the interested stockholder; or
●
any
    receipt by an "interested stockholder" or any affiliate or associate of an "interested stockholder" except
    proportionately as a stockholder of the corporation, of the benefit of any loan, advance, guarantee, pledge or other financial assistance
    or any tax credit or other tax advantage provided by or through the corporation.
An
"interested stockholder" is a person who is:
●
directly
    or indirectly, the beneficial owner of 10% or more of the voting power of the outstanding voting shares of the corporation; or
●
an
    affiliate or associate of the corporation, which at any time within two years immediately before the date in question was the beneficial
    owner, directly or indirectly, of 10% or more of the voting power of the then outstanding shares of the corporation.
A
corporation to which the Combinations with Interested Stockholders Statute applies may not engage in a "combination" within
two years after the interested stockholder first became an interested stockholder, unless the combination meets all of the requirements
of the corporation's articles of incorporation and (i) the combination or the transaction by which the person first became an interested
stockholder is approved by the board of directors before the person first became an interested stockholder, or (ii)(a) the combination
is approved by the board of directors and (b) at or after that time, the combination is approved at an annual or special meeting of the
stockholders, and not by written consent, by the affirmative vote of the stockholders representing at least sixty percent (60%) of the
outstanding voting power of the corporation not beneficially owned by the interested stockholder or the affiliates or associates of the
interested stockholder. If this approval is not obtained, the combination may be consummated after the two year period expires if either
(i)(a) the combination or transaction by which the person first became an interested stockholder is approved by the board of directors
before such person first became an interested stockholder, (b) the combination is approved by a majority of the outstanding voting power
of the corporation not beneficially owned by the interested stockholder or any affiliate or associate of the interested stockholder,
or (c) the combination otherwise meets the requirements of the Combination with Interested Stockholders Statute. Alternatively, a combination
with an interested stockholder engaged in more than 2 years after the date the person first became an interested stockholder may be permissible
if the aggregate amount of cash and the market value of consideration other than cash to be received by holders of shares of common stock
and holders of any other class or series of shares meets the minimum requirements set forth in the statue, and prior to the completion
of the combination, except in limited circumstances, the interested stockholder has not become the beneficial owner of additional voting
shares of the corporation.
66
Acquisition
of Controlling Interest Statute
In
addition, Nevada's "Acquisition of Controlling Interest Statute," prohibits an acquiror, under certain circumstances,
from voting shares of a target corporation's stock after crossing certain threshold ownership percentages, unless the acquiror
obtains the approval of the target corporation's stockholders. Sections 78.378 to 78.3793 of the N.R.S. only apply to Nevada corporations
with at least 200 stockholders, including at least 100 record stockholders who are Nevada residents, that do business directly or through
an affiliated corporation in Nevada and whose articles of incorporation or bylaws in effect 10 days following the acquisition of a controlling
interest by an acquiror do not prohibit its application. Our Bylaws presently provide that Nevada's Acquisition of Controlling
Interest Statute does not apply to us.
Limitations
of Liability and Indemnification Matters
Our
Articles of Incorporation contain provisions that limit the liability of our current and former directors for monetary damages to the
fullest extent permitted by Nevada law. Nevada law provides that directors of a corporation will not be personally liable for monetary
damages for any breach of fiduciary duties as directors, unless the presumption that the directors have acted in good faith, on an informed
basis, and with a view to the interests of the corporation has been rebutted, in which case directors may be liable for damages resulting
from intentional misconduct, fraud or a knowing violation of law. To the extent that indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have
been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable. If a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of our company in the successful defense of any action, suit or proceeding) is asserted
by any of our directors, officers or controlling persons in connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of that issue.
Subscription
Agent and Registrar
The
subscription agent and registrar for the subscription rights is American Stock Transfer & Trust Company, LLC.
No
Listing
Our
common stock is not listed on any securities exchange and will not be eligible for electronic trading through DTC or any other established
clearing corporation. There is no established public trading market for the shares of common stock being offered in this offering,
and we do not expect a market to develop. We do not intend to register any shares of common stock under the Securities Act for sale by
the holders of our common stock.
PLAN
OF DISTRIBUTION
Upon
the conclusion of the holding period,
NBH will distribute
the subscription rights to eligible stockholders as of the record date. There is no managing or soliciting dealer for the offering and
NBH will not pay any kind of fee for the solicitation of the exercise of the subscription rights.
We
do not expect that most holders of subscription rights, including NBH's directors and officers will be able to freely
transfer their subscription rights subject to applicable volume and manner of sale restrictions under Rule 144.
67
THE
RIGHTS OFFERING
The
Subscription Rights
NBH
is distributing to the eligible holders of its common stock as of the record date, subscription rights to purchase shares of Newco common
stock for no additional consideration. Each eligible holder of record of NBH common stock will receive one subscription right for each
share of common stock owned by that holder and directly registered with the Company's transfer agent as of 5:00 p.m., New York City
time, on      , 2023, which date the Company may extend in its sole discretion, the record date.
In order to be eligible to receive a subscription right, an NBH stockholder must have its shares of NBH common stock registered in the
name of the beneficial owner with the Company's transfer agent as of the record date and maintain such registration for a period
of 180 days, which period the Company may shorten in its sole discretion, thereafter. Each subscription right will entitle the
holder to acquire one share of Newco common stock at such time as NBH elects to spin-off Newco as an independent company. For example,
if you owned 1,000 shares of NBH common stock and such shares were directly registered with the Company's transfer agent on the
record date, you would have received 1,000 subscription rights and would have the right to acquire 1,000 shares of Newco common stock
at the time of the spin-off.
In
order to be an eligible holder of shares of NBH common stock to receive non-transferable subscription rights to acquire shares
of Newco common stock, you cannot be (i) a bank, broker or other nominee that is determined by the Company in its sole discretion to
be holding shares for other entities or individuals or (ii) a beneficial owner of NBH common stock that is being held by a bank, broker
or other nominee. If your shares are currently held in a retirement account, such as a 401(k), ROTH IRA or similar account, you should
check with the custodian of such account as to whether the shares can be registered with the Company's transfer agent in the
individual holder's name.
Subscription
Right
. With your subscription right, you may acquire one share of common Newco stock per subscription right, subject to delivery
of the required documents before the rights expires. You may exercise all or a portion of your subscription right, or you may choose
not to exercise any of your subscription rights.
Reasons
for Directly Registering NBH Shares
The
Board has determined that pursuing a rights offering is in the best interests of NBH and its stockholders in that it would provide incentive
to all stockholders of the Company who hold their shares in "street name" to directly register such shares in the name of
the stockholders with NBH's transfer agent.
Principal
Stockholder
As
of the date hereof, Mr. McCabe beneficially owns approximately 27.8% of the common stock of NBH. Once formed, NBH will own 100% of the
common stock of Newco until the expiration of the rights offering.
Assuming
the subscription rights are exercised in full, NBH will dispose of all of its shares of Newco common stock as a result of the spin-off
of Newco and will cease to be a stockholder of Newco. To the extent that the subscription rights are not exercised in full, NBH will
retain ownership of a portion of Newco common stock. To the extent that NBH retains ownership of shares of Newco common stock
after the completion of the spin-off of Newco, NBH may dispose of its remaining shares pursuant to a registered sale or an exemption
from registration, in each case, in accordance with the Securities Act and the rules and regulations promulgated thereunder.
68
Conditions,
Withdrawal and Cancellation
NBH's
obligation to close the rights offering and to issue the subscription rights is conditioned on the satisfaction or waiver of the following
conditions:
●
the
Board shall have authorized and approved the offering and not withdrawn such authorization and approval, and shall have declared the
dividend of the subscription rights to eligible NBH stockholders;
●
the
    Contribution Agreement between NBH, MPC and Mr. McCabe with respect to the Back-In Interest and the Bronco Prospect
    shall have been executed by each party thereto and all actions required to be performed prior to the closing of the rights offering
    shall have been completed;
●
the
SEC shall have declared effective our Registration Statement on Form S-1, of which this prospectus forms a part, under the Securities
Act and no stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the SEC; and
●
no
order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition preventing
consummation of the separation shall be in effect, and no other event outside the control of NBH shall have occurred or failed to occur
that prevents the consummation of the separation.
The
fulfilment of the foregoing conditions will not create any obligation on the part of NBH to close the rights offering. In addition,
NBH reserves the right to withdraw and cancel the rights offering if, at any time prior to the record date, the Board of NBH determines,
in its sole discretion, that the offering is not in the best interest of NBH or its stockholders, or that market conditions are such
that it is not advisable to consummate the rights offering.
Effect
of the Rights Offering on Outstanding Common Stock of NBH
The
issuance of subscription rights for Newco shares in the rights offering will not affect the number of shares of NBH common stock you
own or your percentage ownership of NBH. If you do not exercise your subscription rights to acquire shares of Newco common stock
before the expiration date, following NBH's spin-off of Newco you will not retain an ownership interest in the Back-In Interest or
the Bronco Assets as the common stock of NBH that you hold will not reflect the assets or liabilities of Newco.
Formation
of Newco and Spin-Off
It
is currently anticipated that NBH will form Newco and contribute the Back-In Interest and the Bronco Assets to Newco in the future.
Following the contribution, NBH will spin-off Newco to the holders who exercise their subscription rights upon the earlier of (i) the
sale of NBH or a sale of all or substantially all of the Company's Orogrande Project or the Bronco Assets or (ii) five years
following the effective date of the contribution to Newco of the Back-In Interest and the Bronco Assets.
Method
of Exercising Subscription Rights
The
exercise of subscription rights is irrevocable and may not be cancelled or modified. You may exercise your subscription rights as follows:
Subscription
by Registered Holders
. If you are a registered holder of NBH common stock and you maintain such registration with the
Company's transfer agent throughout the holding period, the number of shares of Newco common stock you may acquire
pursuant to your subscription right will be indicated on the rights certificate that you receive, which you will receive at the
conclusion of the holding period. You may exercise your subscription rights by properly completing and duly executing the
rights certificate and forwarding it to the subscription agent at the address given below under "—Subscription
Agent," to be received before 5:00 p.m., New York City time, on      , 2028.
Subscription
by Beneficial Owners
. If you are a beneficial owner of shares of NBH common stock that are registered in the name of a broker, dealer,
custodian bank or other nominee, you will be eligible to receive subscription rights at such time as you have instructed such bank, broker
or other nominee to transfer your shares of common stock to you on the books and records maintained by the Company's transfer agent
on or prior to the record date such that you become the registered holder of NBH's common stock and you maintain such registration
with the Company's transfer agent throughout the holding period. At the conclusion of the holding period, you will
receive a rights certificate representing a right to the number of shares of Newco common stock you may acquire pursuant to your subscription
right.
Expiration
Date and Extension
The
subscription period, during which you may exercise your subscription rights, expires at 5:00 p.m., New York City time, on      ,
2028 (the "expiration date"). If you do not exercise your subscription rights before the expiration date, your
subscription rights will expire and will no longer be exercisable. NBH will not be required to distribute Newco shares to you if the
subscription agent receives your rights certificate after the expiration date. NBH has the option to extend the expiration date
of the subscription rights, although it does not presently intend to do so. NBH may extend the expiration date by giving oral or written
notice to the subscription agent before the expiration date, but in no event will we extend the expiration date beyond, , 2029.
If NBH elects to extend the expiration date, it will issue a press release announcing the extension no later than 9:00 a.m., New York
City time, on the next business day after the most recently announced expiration date.
69
Subscription
Agent
The
subscription agent for our common stock is American Stock Transfer & Trust Company, LLC. The address to which rights certificates
and payments should be mailed or delivered by hand delivery or overnight courier is provided below. If sent by mail, we recommend that
you send documents by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days
to ensure delivery to the subscription agent. Do not send or deliver these materials to NBH or Newco.
By
first class mail:
Equiniti
Trust Company, LLC
Operations
Center
Attn:
Reorganization Department
6201
15
th
Avenue
Brooklyn,
New York 11219
Phone:
Toll-free (877) 248-6417
(718)
921-8317
Fax
718 765-8758
By
hand or overnight courier:
Equiniti
Trust Company, LLC
Operations
Center
Attn:
Reorganization Department
6201
15
th
Avenue
Brooklyn,
New York 11219
Information
Agent
You
may direct any questions or requests for assistance concerning the method of exercising your subscription rights, additional copies of
this prospectus or other subscription materials referred to herein, to the information agent, at the following telephone number and address:
D.F.
King & Co., Inc.
Banks
& Brokers May Call:
All
Others Call Toll-Free:
Fees
and Expenses
NBH
is not charging any fee or sales commission to issue the subscription rights to you or to issue Newco shares to you if you exercise
your rights. We will pay all reasonable fees charged by the subscription agent.
Notice
to Nominees
If
you are a broker, dealer, custodian bank or other nominee holder that holds shares of NBH common stock for the account of others on the
record date, you should notify the beneficial owners of the shares for whom you are the nominee of the rights offering as soon as possible
to learn their intentions with respect to registering their shares to become the record holder on the books maintained by NBH's
transfer agent. You should obtain instructions from the beneficial owners of NBH common stock. If a registered holder of NBH common stock
so instructs, you should complete the transfer documents provided by NBH's transfer agent and deliver the subscription certificate
to the beneficial owner who has elected to become the record holder.
Validity
of Subscriptions
NBH
will use reasonable efforts to resolve all questions regarding the validity and form of the exercise of your subscription rights, including
time of receipt and eligibility to participate in the rights offering. Such determination will be final and binding. Once made, subscriptions
and directions are irrevocable, and NBH will not accept any alternative, conditional or contingent subscriptions or directions. NBH reserves
the absolute right to reject any subscriptions or directions not properly submitted or the acceptance of which would be unlawful. You
must resolve any irregularities in connection with your subscriptions before the subscription period expires, unless NBH waives them
in its sole discretion.
70
Neither
NBH nor the subscription agent is under any duty to notify you or your representative of defects in your subscriptions. A subscription
will be considered accepted, subject to NBH right to withdraw and cancel the rights offering, only when the subscription agent receives
a properly completed and duly executed rights certificate and any other required documents. NBH interpretations of the terms and conditions
of the rights offering will be final and binding. You will have no rights as a holder of the shares of Newco common stock that you acquire
upon exercise of the subscription rights you receive in the rights offering until your account or the account of your nominee
is credited with the shares of Newco common stock acquired upon exercise of the subscription rights you receive in the rights
offering.
No
Revocation or Change
Once
you submit the rights certificate or have instructed your nominee of your subscription request, you are not allowed to revoke or change
the exercise. All exercises of subscription rights are irrevocable, even if you learn information about us that you consider to be unfavorable.
You should not exercise your subscription rights unless you are certain that you wish to acquire shares of Newco common stock.
71
SELLING
SECURITYHOLDERS
Once
formed and prior to NBH's spin-off of Newco, NBH will hold 100% of Newco common stock. Assuming the subscription rights
are exercised in full, NBH will dispose of all of its Newco common stock pursuant to the spin-off of Newco, and NBH will cease
to be a stockholder of Newco. To the extent that the subscription rights are not exercised in full, NBH will retain ownership of a portion
of Newco common stock. To the extent that NBH retains ownership of shares of Newco common stock after the completion of the spin-off
of Newco, NBH may dispose of its remaining shares, through a registered sale of securities or an exemption from registration, in
each case, pursuant to the Securities Act.
LEGAL
MATTERS
Certain
legal matters in connection with the issuance of the subscription rights described in this prospectus have been or will be passed upon
for us by O'Melveny & Myers, LLP, Dallas, Texas, and by Woodburn and Wedge, Reno, Nevada, with respect to matters
of Nevada law.
EXPERTS
The
consolidated financial statements of Next Bridge Hydrocarbons, Inc. as of December 31, 2022 and 2021, and for each of the fiscal years
then ended, appearing in this prospectus, have been audited by BF Borgers, CPA, an independent registered public accounting firm, as
set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of
such firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a Registration Statement on Form S-1 under the Securities Act to register the subscription rights to be issued
in this offering. The term registration statement means the original registration statement and any and all amendments thereto, including
the exhibits and schedules to the original registration statement and any amendments. This prospectus, which constitutes a part of the
registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules
filed therewith. For further information with respect to us, reference is made to the registration statement and the exhibits and schedules
filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as
an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference
to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement,
along with the exhibits and schedules filed therewith, may be inspected without charge at the SEC's website. The SEC maintains
an internet website at
www.sec.gov
that
contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.
The
information contained on or accessible through our website shall not be deemed to be a part of this prospectus or the Registration Statement
on Form S-1, of which this prospectus is a part.
You
may request a copy of any of our filings with the SEC at no cost by writing us at the following address:
Investor
Relations
c/o
Next Bridge Hydrocarbons, Inc.
6300
Ridglea Place, Suite 950, Fort Worth, Texas 76116
We
have not authorized anyone to give any information or make any representation about the offering or of the Company that is different
from, or in addition to, that contained in this prospectus. Therefore, if anyone does give you information of this sort, you should not
rely on it. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this
prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities,
then the offer presented in this prospectus does not extend to you. The information contained in this prospectus speaks only as of the
date of this prospectus unless the information specifically indicates that another date applies.
72
INDEX
TO FINANCIAL STATEMENTS
PAGE
Consolidated
    Financial Statements (audited)
Report
    of Independent Registered Public Accounting Firm
F-1
Consolidated Balance Sheets as of December 31, 2022 and 2021
F-2
Consolidated Statements of Operations for the years ended December 31, 2022 and 2021
F-3
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2022 and 2021
F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021
F-5
Notes to Consolidated Financial Statements
F-6
Condensed
    Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022
F-17
Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022
F-18
Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2023 and 2022
F-19
Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022
F-20
Notes to Unaudited Condensed Consolidated Financial Statements
F-21
73
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the shareholders and the board of directors of Next Bridge Hydrocarbons, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of Next Bridge Hydrocarbons, Inc. as of December 31, 2022 and 2021, the related
statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively
referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial
Doubt about the Company's Ability to Continue as a Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In
addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis
for Opinion
These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.
/S/
BF Borgers CPA PC
BF
Borgers CPA PC
PCAOB
ID: 5041
We
have served as the Company's auditor since 2022
Lakewood,
CO
March
29
, 2023
F-
1
NEXT
    BRIDGE HYDROCARBONS, INC.
CONSOLIDATED
    BALANCE SHEETS
December 31,
December 31,
2022
2021
ASSETS
Current assets:
Cash
$
569,298
$
1,989,419
Accounts receivable
—
74,310
Accounts receivable, related party
177,519
163,366
Grants and other receivables
150,000
—
Prepaid expenses
62,300
2,667
Total current assets
959,117
2,229,762
Oil and natural gas properties, net
79,695,928
45,663,470
Other assets
80,179
25,000
TOTAL ASSETS
$
80,735,224
$
47,918,232
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
3,891,649
$
2,828,326
Accounts payable - Meta
2,573,724
—
Note payable - Meta
20,000,000
12,500,000
Notes payable, related party
2,000,000
—
Accrued interest payable
1,571,336
208,889
Total current liabilities
30,036,709
15,537,215
Asset retirement obligations
246,866
21,937
Total liabilities
30,283,575
15,559,152
Commitments and contingencies
Stockholder's equity:
Preferred stock, par value $
0.0001
;
50,000,000
shares authorized;
0
issued and outstanding
—
—
Common stock, par value $
0.0001
;
500,000,000
shares authorized;
165,472,241
issued and outstanding
16,547
—
Additional paid-in capital
51,345,640
100,546,596
Accumulated deficit
(
910,538
)
(
68,187,516
)
Total stockholders' equity
50,451,649
32,359,080
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
80,735,224
$
47,918,232
F-
2
NEXT BRIDGE HYDROCARBONS, INC.
CONSOLIDATED
    STATEMENTS OF OPERATIONS
Successor
Predecessor
For the period from
December 15, 2022 to
December 31, 2022
For the period from
January 1, 2022 to
December 14, 2022
Year Ended
December 31, 2021
Oil sales
$
1,276
$
16,796
$
4,675
Natural gas sales
1,285
21,477
11,229
Revenue
2,561
38,273
15,904
Operating expenses
Lease operating expenses
5,826
68,488
75,330
Production and ad valorem tax
229
2,755
1,001
General and administrative
907,045
7,905,860
8,050,443
Depreciation, depletion and amortization
—
—
4,642
Total operating expenses
913,100
7,977,103
8,131,416
Operating loss
(
910,539
)
(
7,938,830
)
(
8,115,512
)
Other income (expense)
Interest expense
—
—
(
212,201
)
Gain (loss) on sale of assets
—
—
1,000
Gain on extinguishment of debt
—
—
77,477
Interest income
1
495
10,428
Total other income (expense)—net
1
495
(
123,296
)
Loss before income taxes
(
910,538
)
(
7,938,335
)
(
8,238,808
)
Provision for income tax
—
—
—
Net loss
$
(
910,538
)
$
(
7,938,335
)
$
(
8,238,808
)
Loss per common share:
Basic and Diluted
$
(
0.01
)
$
(
0.05
)
$
(
8,238,808
)
Weighted average number of common shares outstanding:
Basic and Diluted
165,472,241
165,472,241
1
F-
3
NEXT
    BRIDGE HYDROCARBONS, INC.
CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS' EQUITY
Year
ended December 31, 2022
Common
Common
Additional
Stock
Stock
paid-in
Accumulated
shares
amount
capital
deficit
Total
Balance, December 31, 2020
1
$
—
$
89,331,629
$
(
59,948,708
)
$
29,382,921
Contributions from parent
—
—
11,214,967
—
11,214,967
Net loss
—
—
—
(
8,238,808
)
(
8,238,808
)
Balance December 31, 2021
1
$
—
$
100,546,596
$
(
68,187,516
)
$
32,359,080
Contributions from parent
—
—
316,600
—
316,600
Net loss
—
—
—
(
7,938,335
)
(
7,938,335
)
Issuance of common stock
165,472,240
16,547
(
16,547
)
—
—
Balance, December 14, 2022
165,472,241
$
16,547
$
100,846,649
$
(
76,125,851
)
$
24,737,345
Balance, December 15, 2022
165,472,241
$
16,547
$
51,345,640
$
—
$
51,362,187
Net loss
—
—
—
(
910,538
)
(
910,538
)
Balance, December 31, 2022
165,472,241
$
16,547
$
51,345,640
$
(
910,538
)
$
50,451,649
F-
4
NEXT
    BRIDGE HYDROCARBONS, INC.
CONSOLIDATED
    STATEMENTS OF CASH FLOWS
Successor
Predecessor
For the period from
December 15, 2022 to
December 31, 2022
For the period from
January 1, 2022 to
December 14, 2022
Year Ended
December 31, 2021
Cash Flows From Operating Activities
Net loss
$
(
910,538
)
$
(
7,938,335
)
$
(
8,238,808
)
Adjustments to reconcile net loss to net cash from operations:
Accretion expense
1,092
—
—
Bad debt expense
—
(
26,612
)
—
Depreciation, depletion and amortization
—
—
4,642
Paid in kind interest
—
—
208,889
Change in:
Accounts receivable
—
74,310
(
94,310
)
Accounts receivable, related party
—
(
14,153
)
86,754
Prepayments - development costs
—
(
150,000
)
101,005
Other assets
39,185
(
94,364
)
(
25,000
)
Prepaid expenses
(
58,225
)
(
1,408
)
—
Accounts payable and accrued expenses
1,154,917
(
64,982
)
906,287
Other payables
—
2,589,363
—
Accrued interest payable
(
1,091
)
—
—
Net cash provided by (used in) operating activities
225,340
(
5,626,181
)
(
7,050,541
)
Cash Flows From Investing Activities
Investment in oil and gas properties
(
1,976,029
)
(
3,859,851
)
(
14,805,511
)
Net cash used in investing activities
(
1,976,029
)
(
3,859,851
)
(
14,805,511
)
Cash Flows From Financing Activities
Proceeds from notes payable
2,000,000
7,500,000
12,500,000
Contributions from parent
—
316,600
11,214,967
Net cash provided by financing activities
2,000,000
7,816,600
23,714,967
Net increase (decrease) in cash
249,311
(
1,669,432
)
1,858,915
Cash - beginning of period
319,987
1,989,419
130,504
Cash - end of period
$
569,298
$
319,987
$
1,989,419
Supplemental disclosure of cash flow information:
Cash paid for interest
$
—
$
—
$
3,312
Cash paid for state franchise tax
$
—
$
—
$
—
Supplemental disclosure of non-cash investing and financing activities:
Account payable reduced by expense offset
$
—
$
15,638
$
—
Capitalized interest included in interest payable
$
74,210
$
1,289,328
$
141,048
F-
5
NEXT
    BRIDGE HYDROCARBONS, INC.
NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
As
    of December 31, 2022
1.
NATURE
OF BUSINESS
Next
Bridge Hydrocarbons, Inc. (the "Company") was incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed
its name to Next Bridge Hydrocarbons, Inc. pursuant to its Amended and Restated Articles of Incorporation filed on June 30, 2022. The
Company spun off from Meta Materials, Inc. ("Meta") on December 14, 2022, resulting in the Company becoming an independent
company (the "Spin-Off"). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Meta. Meta became the parent
of the Company's subsidiaries in June 2021 in a merger transaction with Torchlight Energy Resources, Inc. ("Torchlight"),
the previous parent of the subsidiaries and developer of the properties from their inception up to June 2021.
The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company's primary focus has been the development of interests in an oil and natural gas project the Company
holds in the Orogrande Basin in West Texas in Hudspeth County, Texas (the "Orogrande Project"). In addition, the Company
has minor interests in the Eastern edge of the Midland Basin in Texas (the "Hazel Project"), and two minor well interests
in the Hunton wells located in Oklahoma (the "Oklahoma Properties"). The Company currently has six full-time employees, and
the Company employs consultants for various roles as needed.
The
Company operates its business through four wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation ("TEI"),
Hudspeth Oil Corporation, a Texas corporation ("Hudspeth"), Torchlight Hazel, LLC, a Texas limited liability company ("Torchlight
Hazel"), and Hudspeth Operating, LLC, a Texas limited liability company and wholly owned subsidiary of Hudspeth ("Hudspeth
Operating"). All intercompany transactions have been eliminated in the consolidated financial statements.
2.
GOING
CONCERN
At
December 31, 2022, the Company had not yet achieved profitable operations. The Company had a net loss of $
910,538
for the period from
December 15, 2022 through December 31, 2022. The Company expects to incur further losses in the development of its business. The Company
had a working capital deficit as of December 31, 2022 of $
29,077,591
. These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
The
Company's ability to continue as a going concern is dependent on its ability to generate future profitable operations and/or to
obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due. Management's plan to address the Company's ability to continue as a going concern includes: (1) obtaining debt or equity
funding from private placement, institutional, or public sources; (2) obtain loans from financial institutions, where possible, or (3)
participating in joint venture transactions with third parties. Although management believes that it will be able to obtain the necessary
funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods
will prove successful.
These
consolidated financial statements have been prepared assuming that the Company will continue as a going concern and therefore, the financial
statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or
the amount and classifications of liabilities that may result from the outcome of this uncertainty.
3.
SIGNIFICANT
ACCOUNTING POLICIES
The
Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the
United States of America. Accounting principles followed and the methods of applying those principles, which materially affect the determination
of financial position, results of operations and cash flows are summarized below:
Use
of estimates
—The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America ("GAAP") requires management to make estimates and certain assumptions that affect the amounts reported
in these consolidated financial statements and accompanying notes. Actual results could differ from these estimates.
F-
6
Basis
of presentation
—The financial statements are presented on a consolidated basis and include the accounts of Next Bridge
Hydrocarbons, Inc. and its wholly owned subsidiaries, TEI, Hudspeth, Torchlight Hazel, and Hudspeth Operating. All significant intercompany
balances and transactions have been eliminated. As noted above, the Company was involved in the Spin-Off on December 14, 2022. The period
December 15, 2022 through December 31, 2022 is referred to herein as the "successor period" and the period from January 1,
2022 through December 14, 2022 is referred to herein as the "predecessor period".
In
the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring
adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing
the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated
financial statements and disclosures of contingencies. Actual results may differ from those estimates.
Risks
and uncertainties
—The Company's operations are subject to significant risks and uncertainties, including financial,
operational, technological, and other risks associated with operating an emerging business, including the potential risk of business
failure.
In
January 2020, the World Health Organization ("WHO") announced a global health emergency because of a new strain of coronavirus
("COVID-19") and the significant risks to the international community and economies as the virus spreads globally beyond
its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and
thereafter, COVID-19 continued to spread throughout the U.S. and worldwide. In addition, actions taken by OPEC members and other exporting
nations on the supply and demand in global oil and natural gas markets resulted in significant negative pricing pressure in the first
half of 2020, followed by a recovery in pricing and an increase in demand in the second half of 2020 and into 2021. However, multiple
variants emerged in 2021 and became highly transmissible, which contributed to additional pricing volatility during 2021 to date. The
financial results of companies in the oil and natural gas industry have been impacted materially as a result of changing market conditions.
Such circumstances generally increase uncertainty in the Partnership's accounting estimates. Although demand and market prices
for oil and natural gas have recently increased, due to the rising energy use and the improvement in U.S. economic activity, we cannot
predict events that may lead to future price volatility and the near-term energy outlook remains subject to heightened levels of uncertainty.
The
Company is continuing to closely monitor the overall impact and the evolution of the COVID-19 pandemic, including the ongoing spread
of any variants, along with future OPEC actions on all aspects of the Company's business, including how these events may impact
the Company's future operations, financial results, liquidity, employees, and operators. Additional actions may be required in
response to the COVID-19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely
affect general and local economic conditions. The Company cannot predict the long- term impact of these events on our liquidity, financial
position, results of operations or cash flows due to uncertainties including the severity of COVID-19 or any of the ongoing variants,
and the effect the virus will have on the demand for oil and natural gas. These situations remain fluid and unpredictable, and the Company
is actively managing its response.
Concentration
of risks
—At times the Company's cash balances are in excess of amounts guaranteed by the Federal Deposit Insurance
Corporation. The Company's cash is placed with a highly rated financial institution, and the Company regularly monitors the credit
worthiness of the financial institutions with which it does business.
Fair
value of financial instruments
—Financial instruments consist of cash, receivables, convertible note receivable, payables
and promissory notes, if any. The estimated fair values of cash, receivables, and payables approximate the carrying amount due to the
relatively short maturity of these instruments. The carrying amounts of any promissory notes approximate their fair value giving affect
for the term of the note and the effective interest rates.
For
assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as
follows:
●
Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
●
Level
2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability,
either directly or indirectly through market corroboration.
●
Level
3 inputs are unobservable inputs based on management's own assumptions used to measure assets and liabilities at fair value.
A
financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant
to the fair value measurement.
F-
7
Cash
and cash equivalents
– Cash and cash equivalents include certain investments in highly liquid instruments with original
maturities of three months or less.
Accounts
receivable
– Accounts receivable consist of amounts due from a related party for their share of expenses paid on their
behalf by the Company. Management reviews receivables periodically and reduces the carrying amount by a valuation allowance that reflects
management's best estimate of the amount that may not be collectible. As of December 31, 2022 and December 31, 2021, no valuation
allowance was considered necessary.
Oil
and natural gas properties
– The Company uses the full cost method of accounting for exploration and development activities
as defined by the Securities and Exchange Commission ("SEC"). Under this method of accounting, the costs of unsuccessful,
as well as successful, exploration and development activities are capitalized as properties and equipment. This includes any internal
costs that are directly related to property acquisition, exploration and development activities but does not include any costs related
to production, general corporate overhead or similar activities.
Oil
and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs
excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated
with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated
properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the
reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering,
among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining
capital plan, and political, economic, and market conditions.
Gains
and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would
significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Company's interest
in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as
long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value,
are usually charged to accumulated depreciation.
Capitalized
interest
– The Company capitalizes interest on unevaluated properties during the periods in which they are excluded from
costs being depleted or amortized. During the successor period and for the predecessor period, the Company capitalized $
74,210
, and $
1,289,328
respectively, of interest on unevaluated properties. Capitalized interest for the year ended December 31, 2021, was $
141,048
.
Depreciation,
depletion, and amortization
– The depreciable base for oil and natural gas properties includes the sum of all capitalized
costs net of accumulated depreciation, depletion, and amortization ("DD&A"), estimated future development costs and asset
retirement costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and
natural gas properties is amortized on a unit-of-production method.
Ceiling
test
– Future production volumes from oil and natural gas properties are a significant factor in determining the full cost
ceiling limitation of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a
"ceiling test" that determines a limit on the book value of oil and natural gas properties. If the net capitalized cost of
proved oil and natural gas properties, net of related deferred income taxes, plus the cost of unproved oil and natural gas properties,
exceeds the present value of estimated future net cash flows discounted at 10 percent, net of related realizable tax affects, plus the
cost of unproved oil and natural gas properties, the excess is charged to expense and reflected as additional accumulated DD&A. The
Company recorded an impairment expense of $-0- for the successor period, for the predecessor period and for the year ended December 31,
2021, respectively, to recognize the adjustment required by the ceiling test.
The
ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first
day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment
costs.
The
determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality
of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable
reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary
considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable
than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved
oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements,
technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future.
F-
8
Asset
retirement obligations
– The fair value of a liability for an asset's retirement obligation ("ARO") is
recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized
as part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period,
and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction
of the ARO liability.
Inherent
in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors,
credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments.
To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is
made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain
or loss upon settlement.
Income
taxes
– Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits
will not be realized.
Authoritative
guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after
determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has
reviewed the Company's tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated
financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of
limitation are three to four years from their respective filings.
Estimated
interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense
in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for
the successor period, for the predecessor period, and for the year ended December 31, 2021.
Revenue
recognition
– The Company's revenue is typically generated from contracts to sell natural gas, crude oil or NGLs
produced from interests in oil and natural gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are
evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions
for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify
a delivery point which represents the point at which control of the product is transferred to the customer. The Company elects to treat
contracts to sell oil and natural gas production as normal sales, which are then accounted for as contracts with customers. The Company
has determined that these contracts represent multiple performance obligations which are satisfied when control of the commodity transfers
to the customer, typically through the delivery of the specified commodity to a designated delivery point.
Revenue
is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third
parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring
control of those goods to the customer. Amounts allocated in the Company's price contracts are based on the standalone selling
price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred.
Gain
or loss on derivative instruments is outside the scope of ASC 606,
Revenue Recognition
, and is not considered revenue from contracts
with customers subject to ASC 606. The Company may in the future use financial or physical contracts accounted for as derivatives as
economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends
to physically settle but do not meet all of the criteria to be treated as normal sales.
Producer
Gas Imbalances.
The Company applies the sales method of accounting for natural gas revenue. Under this method, revenues are recognized
based on the actual volume of natural gas sold to purchasers.
F-
9
Basic
and diluted earnings (loss) per share
– Basic earnings (loss) per common share is computed by dividing net income (loss)
available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss)
per common share is computed in the same way as basic earnings (loss) per common share except that the denominator is increased to include
the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional
common shares were dilutive. The Company had zero dilutive shares for the successor period, for the predecessor period, and for the year
ended December 31, 2021.
Environmental
laws and regulations
– The Company is subject to extensive federal, state, and local environmental laws and regulations.
Environmental expenditures are expensed or capitalized depending on their future economic benefit. The Company believes that it is in
compliance with existing laws and regulations. The Company accrued no liability as of December 31, 2022 and December 31, 2021.
Recent
accounting pronouncements not yet adopted
– In June 2016, the FASB issued ASU 2016-13,
Financial Instruments –
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
, which adds a new Topic 326 to the Codification
and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as
loans, receivables, and held-to-maturity debt securities. Under current GAAP, companies generally recognize credit losses when it is
probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize
an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized
cost that the company expects to collect over the instrument's contractual life. ASU 2016-13 also amends the credit loss measurement
guidance for available-for sale debt securities and beneficial interests in securitized financial assets. The guidance is applicable
for fiscal years beginning after December 15, 2019 and interim periods within those years, however, the FASB extended the effective date
for smaller reporting companies to fiscal years beginning after December 15, 2022. The Company does not believe the adoption of this
standard will have material impact on the consolidated financial statements.
4.
SPIN-OFF
Effective
December 14, 2022 (the "Spin-Off Date"), the Company and all of its wholly owned subsidiaries were involved in a spin off
transaction from the Company's former parent, Meta. Meta spun the Company and the Company's wholly owned oil and natural
gas subsidiaries in fulfillment of a preferred shareholder liability and other working capital items. As part of the Spin-Off, a change
in control event occurred which is accounted for under ASC 805,
Business Combination
. Meta no longer owns 100% of the Company
and the Company is now owned by various shareholders. The new shareholders of the Company received common stock as consideration and
the fair value was determined using the income approach.
The
following table summarizes the fair value of the assets acquired and liabilities assumed at the Spin-Off Date.
Consideration in common stock
$
51,362,187
Recognized Assets and Liabilities
Cash and cash equivalents
$
319,987
Accounts receivable, related party
177,519
Prepaids
154,075
Oil and natural gas properties
77,645,689
Other assets
119,364
Accounts payable
(
5,310,456
)
Notes payable
(
20,000,000
)
Accrued interest
(
1,498,217
)
Asset retirement obligation
(
245,774
)
Net Assets Recognized
$
51,362,187
F-
10
5.
OIL
& NATURAL GAS PROPERTIES
The
following table presents the capitalized costs for oil and natural gas properties of the Company:
December 31,
2022
December 31,
2021
Successor
Predecessor
Evaluated costs subject to amortization
$
—
$
—
Unevaluated costs
79,695,928
61,319,652
Total Capitalized Costs
79,695,928
61,319,652
Less accumulated depreciation, depletion and amortization
—
(
15,656,182
)
Total oil and gas properties
$
79,695,928
$
45,663,470
Unevaluated
costs as of December 31, 2022, and December 31, 2021, include cumulative costs of developing projects including the Orogrande and Hazel
Projects in West Texas and the costs related to the Oklahoma Properties. In accordance with required accounting adjustments related to
the Spin-Off, the carrying value of the oil and natural gas assets were adjusted to fair value as of December 15, 2022.
The
Company periodically adjusts for the separation of evaluated versus unevaluated costs within its full cost pool to recognize the value
impairment related to the expiration of, or changes in market value, of unevaluated leases. The impact of reclassifications as they become
necessary is to increase the basis for calculation of future period's depletion, depreciation and amortization which effectively
recognizes the impairment on the consolidated statement of operations over future periods. Reclassified costs also become evaluated costs
for purposes of ceiling tests, and which may cause recognition of increased impairment expense in future periods. The remaining cumulative
unevaluated costs which have been reclassified within the Company's full cost pool totals $-0- as of December 31, 2022. As of December
31, 2022, evaluated costs are $-0- since the Company have no proved reserve value associated with our properties.
Due
to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a write-down could
occur. Proved reserves are estimated quantities of crude oil, natural gas, and natural gas liquids, which geological and engineering
data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions.
The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts
which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities
are not in place or for which transportation and/or marketing contracts are not in place. Estimated reserves to be developed through
secondary or tertiary recovery processes are classified as unevaluated properties.
Current
Projects
The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company is primarily focused on the acquisition of early-stage projects, the development and delineation of
these projects, and then the monetization of those assets once these activities are completed.
The
Company's primary focus is the development of interests in oil and natural gas projects it holds in the Permian Basin in West Texas.
The Company also holds minor interests in certain other oil and natural gas projects in Central Oklahoma that it is in the process of
divesting.
As
of December 31, 2022, the Company had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas,
the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, and two wells in Central Oklahoma.
F-
11
Orogrande
Project, West Texas
On
August 7, 2014, Torchlight entered into a Purchase Agreement with Hudspeth, McCabe Petroleum Corporation ("MPC"), and Gregory
McCabe ("Mr. McCabe"). Mr. McCabe was the sole owner of both Hudspeth and MPC. Under the terms and conditions of the Purchase
Agreement, Torchlight purchased 100% of the capital stock of Hudspeth which held certain oil and natural gas assets, including a 100%
working interest in approximately 172,000 predominately contiguous acres in the Orogrande Basin in West Texas. Mr. McCabe has, at his
option, a 10% working interest back-in after payout and a reversionary interest if drilling obligations are not met, all under the terms
and conditions of a participation and development agreement among Hudspeth, MPC and Mr. McCabe. Mr. McCabe also holds a 4.5% overriding
royalty interest in the Orogrande acreage, —which he obtained prior to, and was not a part of the August 2014 transaction. As of
December 31, 2022, leases covering approximately 134,000 acres remain in effect.
Effective
March 27, 2017, the property became subject to a University Lands D&D Unit Agreement ("DDU Agreement") which allows for
all 192 existing leases covering approximately 134,000 gross acres leased from University Lands to be combined into one drilling and
development unit for development purposes. The term of the DDU Agreement expires on December 31, 2023, and the time to drill on the drilling
and development unit continues through December 31, 2023. The DDU Agreement also grants the right to extend the DDU Agreement through
December 31, 2028 if compliance with the DDU Agreement is met and the extension fee associated with the additional time is paid.
Drilling
obligations under the DDU Agreement include five wells per year in years 2021, 2022 and 2023. The drilling obligations are minimum yearly
requirements and may be exceeded if acceleration is desired.
All
drilling obligations through December 31, 2022, have been met.
Torchlight
had drilled 14 test wells in the Orogrande in order to stay in compliance with the DDU Agreement, as well as, to test for potential shallow
pay zones and deeper pay zones that may be present on structural plays. Development of the wells continued through December 31, 2022,
to further capture and document the scientific base in support of demonstrating the production potential of the property. As of December
31, 2022, a total of 15 test wells have been drilled on the acreage.
On
March 9, 2020, holders of certain notes payable by Torchlight entered into a Conversion Agreement under which the noteholders elected
to convert $6,000,000 of principal and approximately $1,331,000 of accrued interest on the notes held by such holders, in accordance
with their terms, into an aggregate 6% working interest (of all such holders) in the Orogrande Project.
The
Company intends to make offers and enter into agreements with one or more of the other current working interest owners in the Orogrande
Project (each an "Orogrande Owner" and collectively, the "Orogrande Owners"). The Company anticipates offering
the Orogrande Owners shares of common stock in exchange for such Orogrande Owner's respective working interest in the Orogrande
Project. The Company intends to offer the number of shares of common stock necessary such that each participating Orogrande Owner would
own the percentage of common stock then outstanding in proportion to the percentage owned in the working interest of the Orogrande Project.
For illustration purposes, if an Orogrande Owner owns 10% of the working interest of the Orogrande Project, and such Orogrande Owner
elects to participate and accept the Company's offer of shares of common stock, then such Orogrande Owner will be offered 10% of
the aggregate amount of outstanding shares of common stock. The Company's decision to enter into these transactions will depend
on ability of the Company and each Orogrande Owner to negotiate and enter into definitive agreements related to such transaction and
the Company's board of directors receiving an industry-standard fairness opinion from an investment banking firm. One of the Orogrande
Owners is Wolfbone Investments, LLC ("Wolfbone"), an entity controlled by Mr. McCabe. Mr. McCabe owns, directly and indirectly
through entities he owns or controls, 7.75% of the Company's common stock as of December 31, 2022, which would increase by the
proportionate exchange of working interest for shares of the Company's common stock if consummated.
The
Orogrande Project ownership as of December 31, 2022, is detailed as follows:
Revenue Interest
Working Interest
University Lands - Mineral Owner
20.000
%
ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe
4.500
%
ORRI - Unrelated Party
0.500
%
Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc.
49.875
%
66.500
%
Wolfbone Investments, LLC, an entity controlled by Gregory McCabe
18.750
%
25.000
%
Conversion by Note Holders in March, 2020
4.500
%
6.000
%
Unrelated Party
1.875
%
2.500
%
100.000
%
100.000
%
F-
12
Hazel
Project in the Midland Basin in West Texas
Effective
April 4, 2016, TEI acquired from MPC a 66.66% working interest in approximately 12,000 acres in the Midland Basin. A back-in after payout
of a 25% working interest was retained by MPC and another unrelated working interest owner.
In
October 2016, the holders of all of Torchlight's then-outstanding shares of Series C Preferred Stock (which were issued in July
2016) elected to convert into a total 33.33% working interest in our Hazel Project, reducing TEI's ownership from 66.66% to a 33.33%
working interest.
Acquisition
of Additional Interests in Hazel Project
On
January 30, 2017, Torchlight entered into and closed an Agreement and Plan of Reorganization and a Plan of Merger with an entity which
was wholly owned by Mr. McCabe, which resulted in the acquisition of approximately 40.66% working interest in the 12,000 gross acres,
9,600 net acres, in the Hazel Project.
Also,
on January 30, 2017, Torchlight entered into and closed a Purchase and Sale Agreement with Wolfbone. Under the agreement, Torchlight
acquired certain of Wolfbone's Hazel Project assets, including its interest in the Flying B Ranch #1 well and the 40-acre unit
surrounding the well.
Upon
the closing of the transactions, the Torchlight working interest in the Hazel Project increased by 40.66% to a total ownership of 74%.
Effective
June 1, 2017, Torchlight acquired an additional 6% working interest from unrelated working interest owners increasing its working interest
in the Hazel project to 80%, and an overall net revenue interest of 75%.
Seven
test wells have been drilled on the Hazel Project to capture and document the scientific base in support of demonstrating the production
potential of the property.
Option
Agreement with Masterson Hazel Partners, LP
On
August 13, 2020, the Company's subsidiaries TEI and Torchlight Hazel (collectively, "Torchlight Subs") entered into
an option agreement (the "Option Agreement") with Masterson Hazel Partners, LP ("MHP") and MPC. Under the agreement,
MHP was obligated to drill and complete, or cause to be drilled and completed, at its sole cost and expense, a new lateral well (the
"Well") on the Hazel Project, sufficient to satisfy Torchlight Subs's continuous development obligations on the southern
half of the prospect no later than September 30, 2020. MHP has satisfied this drilling obligation. MHP paid to Torchlight Subs $1,000
as an option fee at the time of execution of the Option Agreement. MHP is entitled to receive, as its sole recourse for the recoupment
of drilling costs, the revenue from production of the Well attributable to Torchlight Subs's interest until such time as it has
recovered its reasonable costs and expenses for drilling, completing, and operating the well.
In
exchange for MHP satisfying the above drilling obligations, Torchlight Subs granted to MHP the exclusive right and option to perform
operations, at MHP's sole cost and expense, on the Hazel Project sufficient to satisfy Torchlight Subs's continuous development
obligations on the northern half of the prospect. Because MHP exercised this drilling option and satisfied the continuous development
obligations on the northern half of the prospect, under the terms of the Option Agreement (as amended in September 2020) MHP had the
option to purchase the entire Hazel Project no later than May 31, 2021. Such purchase would be under the terms of a form of Purchase
and Sale Agreement included as an exhibit to the Option Agreement, at an aggregate purchase price of$12,690,704 for approximately 9,762
net mineral acres, and not less than 74% net revenue interest (approximately $1,300 per net mineral acre). MHP declined to exercise the
Option in 2021.
Hunton
Play, Central Oklahoma
As
of December 31, 2022, the Company is producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove.
F-
13
6.
RELATED
PARTY BALANCES
As
of December 31, 2022 and December 31, 2021, the Company had a balance of $
177,519
and $
163,366
, respectively, for an account receivable
due from MPC, a shareholder of the Company, for amounts advanced related to the Orogrande development cost sharing arrangement agreed
to in connection with the acquisition of the Orogrande working interests in 2014.
On
December 22, 2022, the Company issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe
(the "2022 Note"). The 2022 Note bears interest at 5% per annum, computed on the basis of a 365-day year, and matures on
June 21, 2023 (the "2022 Note Maturity Date"); provided, however, if we raise $30 million or more in capital through debt
or equity or a combination thereof by the 2022 Note Maturity Date, the 2022 Note Maturity Date will be extended to October 3, 2023. The
outstanding principal of the 2022 Note, together with all accrued interest thereon, becomes due on June 21, 2023. The revolving commitment
under the 2022 Note expires on 2022 Note Maturity Date. As of December 31, 2022, we had $2 million in principal amount outstanding and
$18 million of available borrowings under the 2022 Note.
7.
COMMITMENTS
AND CONTINGENCIES
Legal
Matters
On
April 30, 2020, the Company's wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
("Cordax"). The suit,
Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
,
was filed in the 189
th
Judicial District Court of Harris County, Texas. The suit seeks the recovery of approximately $1.4
million in costs incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located
in the Orogrande Field. Working interest owner Wolfbone is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral
lien in the amount of $104,500 against the Orogrande Field and has sued the operator and counterclaimed against Hudspeth for breach of
contract, seeking the same amount as the lien. Meta, as the Company's parent at the time, determined to add the manufacturer of
one of the tool components that it contends was one of the causes of the tool failure. It was later disclosed that Cordax is the subsidiary
of a Canadian parent company, who has also been added to the case. Cordax's current Chairman of the Board filed a special appearance
after being served with a citation, alleging that he was a Canadian citizen with no meaningful ties to Texas. After discovery was conducted
on this issue, a nonsuit without prejudice for this defendant was filed, dismissing him from the case. The remaining parties attended
mediation on June 15, 2022, that was unsuccessful in resolving the case. Discovery is ongoing. The Company has presented several of its
witnesses for deposition and is preparing to depose Cordax's key fact witnesses. The case is set for trial in October 2023.
On
March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in
the amount of $104,500.01 and recover related attorney's fees. The foreclosure action,
Datalog LWT Inc. d/b/a Cordax Evaluation
Technologies v. Torchlight Energy Resources, Inc
., was filed in the 205
th
Judicial District Court of Hudspeth County,
Texas. The Company is contesting the lien in good faith and filed a Plea in Abatement on May 10, 2021, seeking a stay in the Hudspeth
County lien foreclosure case pending final disposition of the related case currently pending in Harris County, Texas. The Company is
required to indemnify Meta in connection with this matter pursuant to the terms of the Distribution Agreement with Meta.
On
January 14, 2022, a shareholder derivative action was filed in the U.S. District Court for the Eastern District of New York captioned
Hines v. Palikaras, et al.
, No. 1:22-cv-00248. The complaint names as defendants certain of Meta's current officers and
directors, certain former Torchlight officers and directors, and Meta (as nominal defendant). The complaint, purportedly brought on behalf
of Meta, asserts claims under Section 14(a) of the Exchange Act, contribution claims under Sections 10(b) and 21D of the Exchange Act,
and various state law claims such as breach of fiduciary duties and unjust enrichment. The complaint seeks, among other things, unspecified
compensatory damages in favor of Meta, certain corporate governance related actions, and an award of costs and expenses to the derivative
plaintiff, including attorneys' fees. On March 9, 2022, the Court entered a stipulated order staying this action until there is
a ruling on a motion to dismiss in the Securities Class Action.
Environmental
Matters
The
Company is subject to contingencies as a result of environmental laws and regulations. Present and future environmental laws and regulations
applicable to the Company's operations could require substantial capital expenditures or could adversely affect its operations
in other ways that cannot be predicted at this time. As of December 31, 2022, and December 31, 2021, no amounts had been recorded because
no specific liability has been identified that is reasonably probable of requiring the Company to fund any future material amounts.
F-
14
8.
STOCKHOLDERS'
EQUITY
Next
Bridge Hydrocarbons, Inc. has preferred and common stock both at a par value of $
0.0001
. As of December 31, 2022, the Company has issued
165,472,241
shares of common stock and -
0
- shares of preferred stock.
9.
INCOME
TAXES
The
Company recorded no income tax provision at December 31, 2022, and December 31, 2021, because of losses incurred.
The
Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions
in which it operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter
in which they occur. The Company recorded no income tax expense for the successor period and for the predecessor period, because the
Company expects to incur a tax loss in the current year. Similarly, no income tax expense was recognized for the year ended December
31, 2021.
The Company had a net deferred tax asset related
to federal net operating loss carryforwards of $
25,935,753
, $
65,730,932
and $
59,481,861
at December 31, 2022, December 14, 2022 and
December 31, 2021, respectively. The federal net operating loss carryforward will begin to expire in 2034. Realization of the
deferred tax asset is dependent, in part, on generating sufficient taxable income prior to expiration of the loss carryforwards. The
Company has placed a 100% valuation allowance against the net deferred tax asset because future realization of these assets is not
assured.
10.
NOTES
PAYABLE, RELATED PARTIES
In
2021, the Company entered into a note payable with Meta its former parent to borrow up to $
15
million
. On October 1, 2021, the Company
issued the 2021 Note, which bears interest at
8
%
per annum, computed on the basis of a 360-day year, and matures March 31, 2023 (the
"2021 Note Maturity Date"); provided, however, if the Company raises $30 million or more in capital through debt or equity
or a combination thereof by the 2021 Note Maturity Date, the 2021 Note Maturity Date will be extended to September 30, 2023, and the
outstanding principal of the 2021 Note will amortize in six equal, monthly installments. If an event of default has occurred and is continuing,
interest on the 2021 Note may accrue at the default rate of 12% per annum. The outstanding principal of the 2021 Note, together with
all accrued interest thereon, becomes due on the 2021 Note Maturity Date. The 2021 Note includes a restrictive covenant that, subject
to certain exceptions and qualifications, restricts the Company's ability to merge or consolidate with another person or entity,
or sell or transfer all or substantially all of its assets, unless the Company is the surviving entity or the successor entity assumes
all of obligations under the 2021 Note. The 2021 Note is collateralized by certain shares of common stock in Meta held by one of its
stockholders, Mr. McCabe, and by a lien on a 25% interest in the Orogrande Project owned by Wolfbone, an affiliate of Mr. McCabe.
The
balance on the 2021 Note as of December 31, 2022 and December 31, 2021 is $
20
million
and $
12.5
million
, respectively. The Company incurred
interest of $
208,889
for the year ended December 31, 2021 and an additional $
74,210
for the successor period and $
1,289,328
for the predecessor
period.
Under
the terms of the Arrangement Agreement that governed the merger transaction between Torchlight and Meta in June 2021 the oil and natural
gas assets were to be sold or spun out from Meta and the costs of any sale or spin-off incurred by Meta were to be borne the then-existing
shareholders of Torchlight. The amount of the reimbursement payable to Meta in connection with the Spin-Off is $2,573,724 which is to be added to the principal amount of the 2022 Note payable.
On
September 2, 2022, the Company entered into a loan agreement with Meta, as lender (the "Loan Agreement") that would govern
prior loan amounts advanced to the Company from Meta. As of August 11, 2022, and August 29, 2022, the Company borrowed an additional
$
1.2
million
and $
1.46
million
, respectively, representing the remaining amount available for borrowing under the Loan Agreement and
resulting in a total of $5 million principal amount outstanding related to the Loan Agreement, the proceeds of which were used for working
capital and general corporate purposes. The term loans under the Loan Agreement bear interest at a per annum rate equal to 8% and mature
on March 31, 2023 (the "Maturity Date"); provided, however, if the Company raises $30 million or more in capital through debt
or equity, or a combination thereof by the Maturity Date, the Maturity Date will be extended to October 3, 2023 and the term loan would
be amortized in six equal monthly installments. The Loan Agreement includes customary representations and covenants that, subject to
exceptions and qualifications, restrict our ability to do certain things, such as: engage in mergers, acquisitions, and asset sales;
transact with affiliates; undergo a change in control; incur additional indebtedness; incur liens; make loans and investments; declare
dividends or redeem or repurchase equity interests; and enter into certain restrictive agreements. In addition, the Loan Agreement contains
customary events of default, mandatory prepayment events and affirmative covenants, including, without limitation, covenants regarding
the payment of taxes and other obligations, maintenance of insurance, maintenance of our material properties, reporting requirements,
compliance with applicable laws and regulations, and formation or acquisition of new subsidiaries.
F-
15
On
December 21, 2022, the Company entered into that certain Agreement and Plan of Merger (the "Merger Agreement") with Hudspeth,
Wolfbone, MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such
leases, pooling and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in Orogrande Project
will be transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations
(as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance
of 56,297,638 shares of Company common stock to Mr. McCabe (such series of transactions collectively, the "Merger").
The
Merger is to be completed in accordance with the Texas Business Organizations Code, whereby (a) the Company will form NBH MergeCo, LLC
with the State of Texas ("MergeCo") in order to cause Hudspeth to assign all of its rights under the Merger Agreement to
MergeCo and MergeCo will assume Hudspeth's obligations under the Merger Agreement, (b) Hudspeth (or MergeCo, as its assignee),
Wolfbone and MPC shall merge with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone shall become a direct and wholly-owned
subsidiary of the Company. The closing of the transactions contemplated by the Merger Agreement are subject to the satisfaction of certain
customary closing conditions, including filing and acceptance of the certificate of merger by the Secretary of State of the State of
Texas.
In
connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note in the principal amount of up to $20 million
in favor of Mr. McCabe. The Company is entitled to request advances under the 2022 Note in a minimum principal amount of $100,000 each.
Mr. McCabe is the largest shareholder of the Company's common stock. As of December 31, 2022 the Company had drawn $
2
million
on the 2022 Note.
11.
ASSET
RETIREMENT OBLIGATIONS
The
following is a reconciliation of the asset retirement obligations liability through December 31, 2022:
Predecessor
Asset retirement obligations - December 31, 2021
$
21,937
Accretion expense
—
Asset retirement obligations - December 14, 2022
$
21,937
Successor
Estimated liabilities recorded
$
245,774
Accretion expense
1,092
Asset retirement obligations - December 31, 2022
$
246,866
12.
SUBSEQUENT
EVENTS
We
met our drilling obligations under the DDU Agreement to drill five new wells in the Orogrande Project in advance of the March 31, 2023
deadline under University Lands lease requirement. The data collected from these five wells, in addition to the five wells drilled in
2021, confirmed that there are at least five potential distinct reservoirs under our acreage. Also, our operations team deployed a new
mist drilling solution which increased hole stability, which we believe will result in meaningful cost savings for additional wells drilled
in the Orogrande Project. While these wells may have potential to produce hydrocarbons to sell commercially in the future, we have no
immediate plans to deploy the additional capital necessary to sell production from these wells to third parties. Instead, we plan to
use the results from these wells to determine our drilling plans for future wells, including reservoir locations, target depths and designated
acreage, in the Orogrande Project.
On March 31, 2023, we entered into an amendment to the 2021 Note and an amendment to Loan Agreement
in order to extend each of the 2021 Maturity Date and the Maturity Date respectively from March 31, 2023 to October 3, 2023. Such amendments
also removed the provisions allowing for extensions of the 2021 Maturity Date and the Maturity Date in the event the Company raised $30
million or more in capital through debt or equity or a combination thereof by March 31, 2023.
F-
16
NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
March 31,
December 31,
2023
2022
ASSETS
Current assets:
Cash
$
5,301,647
$
569,298
Accounts receivable, related
    party
177,519
177,519
Prepayments - development
    costs
—
150,000
Prepaid
    expenses
51,183
62,300
Total current assets
5,530,350
959,117
Oil and natural gas properties,
    net
88,626,670
79,695,928
Other
    assets
80,179
80,179
TOTAL
    ASSETS
$
94,237,199
$
80,735,224
LIABILITIES AND STOCKHOLDERS'
    EQUITY
Current liabilities:
Accounts payable
$
5,375,670
$
3,891,649
Accounts and Note Payable -
    Meta
21,589,362
22,573,724
Note Payable - Related Party
16,875,000
2,000,000
Related party payables
—
—
Accrued
    interest payable
1,935,084
1,571,336
Total current liabilities
45,775,115
30,036,709
Asset
    retirement obligations
252,731
246,866
Total
    liabilities
46,027,846
30,283,575
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value
    $
0.0001
,
50,000,000
shares authorized;  -
0
- issued and outstanding at March 31, 2023 and December 31, 2022
—
—
Common stock, par value $
0.0001
;
500,000,000
shares authorized;
165,472,241
issued and outstanding at March 31, 2023 and December 31, 2022
16,547
16,547
Additional paid-in capital
51,345,640
51,345,640
Outstanding stock options
145,155
—
Accumulated
    deficit
(
3,297,989
)
(
910,538
)
Total
    stockholders' equity
48,209,353
50,451,649
TOTAL
    LIABILITIES AND STOCKHOLDERS' EQUITY
$
94,237,199
$
80,735,224
The
accompanying notes are an integral part of these statements.
F-
17
NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months
Three Months
Ended
Ended
March 31, 2023
March 31, 2022
Oil and natural
    gas sales
$
10,924
$
—
Operating expenses
Lease operating expenses
15,816
10,621
Production taxes
786
—
General and administrative
2,381,774
825,737
Depreciation,
    depletion and amortization
—
—
Total operating expenses
2,398,376
836,358
Other income (expense)
Interest expense
—
—
Franchise tax
—
—
Interest
    income
1
323
Total expense, net
1
323
Loss before income taxes
2,387,451
836,035
Provision
    for income taxes
—
—
Net
    loss
$
2,387,451
$
836,035
Loss per common share:
Basic and
    Diluted
$
0.01
$
836,035
Weighted average number of
    common shares outstanding:
Basic and
    Diluted
165,472,241
1
The
accompanying notes are an integral part of these statements.
F-
18
NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Common
stock
shares
Common
stock
amount
Additional
paid-in
capital
Stock
Options
Outstanding
Accumulated
deficit
Total
Balance, January
    1, 2022
1
$
—
$
100,546,596
—
$
(
68,187,516
)
$
32,359,080
Contributions from parent
—
—
317,792
—
—
317,792
Net loss
—
—
—
—
(
836,035
)
(
836,035
)
Balance, March 31, 2022
1
$
—
$
100,864,388
—
$
(
69,023,551
)
$
31,840,837
Balance, January 1, 2023
165,472,241
$
16,547
$
51,345,640
—
$
(
910,538
)
$
50,451,649
Issuance of stock options
—
—
—
145,155
—
145,155
Net loss
—
—
—
—
(
2,387,451
)
(
2,387,451
)
Balance,
    March 31, 2023
165,472,241
$
16,547
$
51,345,640
145,155
$
(
3,297,989
)
$
48,209,353
The
accompanying notes are an integral part of these statements.
F-
19
NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31
2023
2022
Cash Flows From Operating Activities
Net loss
$
(
2,387,451
)
$
(
836,035
)
Adjustments to reconcile net loss to net cash from operations:
Accretion expense
5,865
—
Expense related to stock options issued
145,155
—
Change in:
Accounts receivable
—
21,468
Prepayments – development costs
150,000
—
Prepaid expenses
11,117
2,310
Accounts payable and accrued expenses
1,499,658
(
2,081,524
)
Related party payables
—
2,500,000
Net cash provided by (used in) operating activities
(
575,656
)
(
393,781
)
Cash Flows From Investing Activities
Investment in oil and natural gas properties
(
8,437,883
)
(
1,084,285
)
Net cash used in investing activities
(
8,437,883
)
(
1,084,285
)
Cash Flows From Financing Activities
Contributions from parent
—
317,792
Proceeds from notes payable, related party
14,875,000
—
Payments on promissory notes
(
1,129,112
)
—
Net cash provided by financing activities
13,745,888
317,792
Net increase (decrease) in cash
4,732,349
(
1,160,274
)
Cash - beginning of period
569,298
1,989,419
Cash - end of period
$
5,301,647
$
829,145
Supplemental disclosure of cash flow information:
Cash paid for interest
$
129,112
$
—
Cash paid for state franchise tax
$
—
$
—
Supplemental disclosure of non-cash investing and financing activities:
Capitalized Interest
$
492,860
$
—
The
accompanying notes are an integral part of these statements.
F-
20
NEXT
BRIDGE HYDROCARBONS, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
March 31,
2023
(Unaudited)
1.
NATURE
OF BUSINESS
Next
Bridge Hydrocarbons, Inc. (the "Company") was incorporated in Nevada on August 31, 2021, as OilCo Holdings, Inc. and changed
its name to Next Bridge Hydrocarbons, Inc. pursuant to its Amended and Restated Articles of Incorporation filed on June 30, 2022. The
Company spun off from Meta Materials, Inc. ("Meta") on December 14, 2022, resulting in the Company becoming an independent
company (the "Spin-Off"). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Meta. Meta became the parent
of the Company's subsidiaries in June 2021 in a merger transaction with Torchlight Energy Resources, Inc. ("Torchlight"),
the previous parent of the subsidiaries and developer of the properties from their inception up to June 2021.
The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company's primary focus has been the development of interests in an oil and natural gas project the Company
holds in the Orogrande Basin in West Texas in Hudspeth County, Texas (the "Orogrande Project"). In addition, the Company
has minor interests in the Eastern edge of the Midland Basin in Texas (the "Hazel Project"), and two minor well interests
in the Hunton wells located in Oklahoma (the "Oklahoma Properties"). The Company currently has six full-time employees, and
the Company employs consultants for various roles as needed.
The
Company operates its business through four wholly owned subsidiaries Torchlight Energy, Inc., a Nevada corporation ("TEI"),
Hudspeth Oil Corporation, a Texas corporation ("Hudspeth"), Torchlight Hazel, LLC, a Texas limited liability company ("Torchlight
Hazel"), and Hudspeth Operating, LLC, a Texas limited liability company and wholly owned subsidiary of Hudspeth ("Hudspeth
Operating"). All intercompany transactions have been eliminated in the consolidated financial statements.
2.
GOING
CONCERN
At
March 31, 2023, the Company had not yet achieved profitable operations. The Company had a net loss of $
2,387,451
for the three months
ended March 31, 2023. The Company expects to incur further losses in the development of its business. The Company had a working capital
deficit as of March 31, 2023 of $
40,244,765
. These conditions raise substantial doubt about the Company's ability to continue as
a going concern.
The
Company's ability to continue as a going concern is dependent on its ability to generate future profitable operations and/or to
obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due. Management's plan to address the Company's ability to continue as a going concern includes: (1) obtaining debt or equity
funding from private placement, institutional, or public sources; (2) obtaining loans from financial institutions, where possible, or (3)
participating in joint venture transactions with third parties. Although management believes that it will be able to obtain the necessary
funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods
will prove successful.
These
consolidated financial statements have been prepared assuming that the Company will continue as a going concern and therefore, the financial
statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or
the amount and classifications of liabilities that may result from the outcome of this uncertainty.
3.
SIGNIFICANT
ACCOUNTING POLICIES
The
Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the
United States of America. Accounting principles followed and the methods of applying those principles, which materially affect the determination
of financial position, results of operations and cash flows are summarized below:
Use
of estimates
—The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America ("GAAP") requires management to make estimates and certain assumptions that affect the amounts reported
in these consolidated financial statements and accompanying notes. Actual results could differ from these estimates.
Basis
of presentation
—The financial statements are presented on a consolidated basis and include the accounts of Next Bridge
Hydrocarbons, Inc. and its wholly owned subsidiaries, TEI, Hudspeth, Torchlight Hazel, and Hudspeth Operating. All significant intercompany
balances and transactions have been eliminated. As noted above, the Company was involved in the Spin-Off on December 14, 2022.
F-
21
In
the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring
adjustments, necessary to fairly present the financial position as of, and the results of operations for all periods presented. In preparing
the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the consolidated
financial statements and disclosures of contingencies. Actual results may differ from those estimates.
Risks
and uncertainties
—The Company's operations are subject to significant risks and uncertainties, including financial,
operational, technological, and other risks associated with operating an emerging business, including the potential risk of business
failure.
In
January 2020, the World Health Organization ("WHO") announced a global health emergency because of a new strain of coronavirus
("COVID-19") and the significant risks to the international community and economies as the virus spreads globally beyond
its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and
thereafter, COVID-19 continued to spread throughout the U.S. and worldwide. In addition, actions taken by OPEC members and other exporting
nations on the supply and demand in global oil and natural gas markets resulted in significant negative pricing pressure in the first
half of 2020, followed by a recovery in pricing and an increase in demand in the second half of 2020 and into 2021. However, multiple
variants emerged in 2021 and became highly transmissible, which contributed to additional pricing volatility during 2021 to date. The
financial results of companies in the oil and natural gas industry have been impacted materially as a result of changing market conditions.
Such circumstances generally increase uncertainty in the Partnership's accounting estimates. Although demand and market prices
for oil and natural gas have recently increased, due to the rising energy use and the improvement in U.S. economic activity, we cannot
predict events that may lead to future price volatility and the near-term energy outlook remains subject to heightened levels of uncertainty.
The
Company is continuing to closely monitor the overall impact and the evolution of the COVID-19 pandemic, including the ongoing spread
of any variants, along with future OPEC actions on all aspects of the Company's business, including how these events may impact
the Company's future operations, financial results, liquidity, employees, and operators. Additional actions may be required in
response to the COVID-19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely
affect general and local economic conditions. The Company cannot predict the long- term impact of these events on our liquidity, financial
position, results of operations or cash flows due to uncertainties including the severity of COVID-19 or any of the ongoing variants,
and the effect the virus will have on the demand for oil and natural gas. These situations remain fluid and unpredictable, and the Company
is actively managing its response.
Concentration
of risks
—At times the Company's cash balances are in excess of amounts guaranteed by the Federal Deposit Insurance
Corporation. The Company's cash is placed with a highly rated financial institution, and the Company regularly monitors the credit
worthiness of the financial institutions with which it does business.
Fair
value of financial instruments
—Financial instruments consist of cash, receivables, convertible note receivable, payables
and promissory notes, if any. The estimated fair values of cash, receivables, and payables approximate the carrying amount due to the
relatively short maturity of these instruments. The carrying amounts of any promissory notes approximate their fair value giving affect
for the term of the note and the effective interest rates.
For
assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as
follows:
●
Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
●
Level
2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability,
either directly or indirectly through market corroboration.
●
Level
3 inputs are unobservable inputs based on management's own assumptions used to measure assets and liabilities at fair value.
A
financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant
to the fair value measurement.
Cash
and cash equivalents
– Cash and cash equivalents include certain investments in highly liquid instruments with original
maturities of three months or less.
F-
22
Accounts
receivable
– Accounts receivable consist of amounts due from a related party for their share of expenses paid on their
behalf by the Company. Management reviews receivables periodically and reduces the carrying amount by a valuation allowance that reflects
management's best estimate of the amount that may not be collectible. As of March 31, 2023 and December 31, 2022, no valuation
allowance was considered necessary.
Oil
and natural gas properties
– The Company uses the full cost method of accounting for exploration and development activities
as defined by the Securities and Exchange Commission ("SEC"). Under this method of accounting, the costs of unsuccessful,
as well as successful, exploration and development activities are capitalized as properties and equipment. This includes any internal
costs that are directly related to property acquisition, exploration and development activities but does not include any costs related
to production, general corporate overhead or similar activities.
Oil
and natural gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs
excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated
with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated
properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the
reservoir. Unevaluated properties are reviewed for impairment at least quarterly and are determined through an evaluation considering,
among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining
capital plan, and political, economic, and market conditions.
Gains
and losses, if any, on the sale of oil and natural gas properties are not generally reflected in income unless the gain or loss would
significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Company's interest
in the oil and natural gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as
long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value,
are usually charged to accumulated depreciation.
Capitalized
interest
– The Company capitalizes interest on unevaluated properties during the periods in which they are excluded from
costs being depleted or amortized. During the three months ended March 31, 2023 the Company capitalized $
492,860
of interest on unevaluated
properties. Capitalized interest for the year ended December 31, 2022, was $
1,363,538
.
Depreciation,
depletion, and amortization
– The depreciable base for oil and natural gas properties includes the sum of all capitalized
costs net of accumulated depreciation, depletion, and amortization ("DD&A"), estimated future development costs and asset
retirement costs not included in oil and natural gas properties, less costs excluded from amortization. The depreciable base of oil and
natural gas properties is amortized on a unit-of-production method.
Ceiling
test
– Future production volumes from oil and natural gas properties are a significant factor in determining the full cost
ceiling limitation of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a
"ceiling test" that determines a limit on the book value of oil and natural gas properties. If the net capitalized cost of
proved oil and natural gas properties, net of related deferred income taxes, plus the cost of unproved oil and natural gas properties,
exceeds the present value of estimated future net cash flows discounted at 10 percent, net of related realizable tax affects, plus the
cost of unproved oil and natural gas properties, the excess is charged to expense and reflected as additional accumulated DD&A. The
Company recorded an impairment expense of $-0- for the three months ended March 31, 2023 and for the year ended December 31, 2022,
respectively, to recognize the adjustment required by the ceiling test.
The
ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first
day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment
costs.
The
determination of oil and natural gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality
of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable
reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary
considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable
than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved
oil and natural gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements,
technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future.
Asset
retirement obligations
– The fair value of a liability for an asset's retirement obligation ("ARO") is
recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, with the corresponding charge capitalized
as part of the carrying amount of the related long-lived asset. The liability is accreted to its then-present value each subsequent period,
and the capitalized cost is depleted over the useful life of the related asset. Abandonment costs incurred are recorded as a reduction
of the ARO liability.
F-
23
Inherent
in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors,
credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments.
To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is
made to the oil and natural gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain
or loss upon settlement.
Income
taxes
– Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits
will not be realized.
Authoritative
guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after
determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has
reviewed the Company's tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated
financial statements. Company tax returns remain subject to federal and state tax examinations. Generally, the applicable statutes of
limitation are three to four years from their respective filings.
Estimated
interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense
in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for
the three months ended March 31, 2023, and for the year ended December 31, 2022.
Revenue
recognition
– The Company's revenue is typically generated from contracts to sell natural gas, crude oil or NGLs
produced from interests in oil and natural gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are
evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions
for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify
a delivery point which represents the point at which control of the product is transferred to the customer. The Company elects to treat
contracts to sell oil and natural gas production as normal sales, which are then accounted for as contracts with customers. The Company
has determined that these contracts represent multiple performance obligations which are satisfied when control of the commodity transfers
to the customer, typically through the delivery of the specified commodity to a designated delivery point.
Revenue
is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third
parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring
control of those goods to the customer. Amounts allocated in the Company's price contracts are based on the standalone selling
price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred.
Gain
or loss on derivative instruments is outside the scope of ASC 606,
Revenue Recognition
, and is not considered revenue from contracts
with customers subject to ASC 606. The Company may in the future use financial or physical contracts accounted for as derivatives as
economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends
to physically settle but do not meet all of the criteria to be treated as normal sales.
Producer
Gas Imbalances.
The Company applies the sales method of accounting for natural gas revenue. Under this method, revenues are recognized
based on the actual volume of natural gas sold to purchasers.
Basic
and diluted earnings (loss) per share
– Basic earnings (loss) per common share is computed by dividing net income (loss)
available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss)
per common share is computed in the same way as basic earnings (loss) per common share except that the denominator is increased to include
the number of additional common shares that would be outstanding if all potential common shares had been issued and if the additional
common shares were dilutive. The Company had zero dilutive shares for the three months ended March 31, 2023, and for the year ended December
31, 2022.
Environmental
laws and regulations
– The Company is subject to extensive federal, state, and local environmental laws and regulations.
Environmental expenditures are expensed or capitalized depending on their future economic benefit. The Company believes that it is in
compliance with existing laws and regulations. The Company accrued no liability as of March 31, 2023 and December 31, 2022.
F-
24
Recent
accounting pronouncements adopted
– In June 2016, the FASB issued ASU 2016-13,
Financial Instruments –
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
, which adds a new Topic 326 to the Codification
and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as
loans, receivables, and held-to-maturity debt securities. Under current GAAP, companies generally recognize credit losses when it is
probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize
an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized
cost that the company expects to collect over the instrument's contractual life. ASU 2016-13 also amends the credit loss measurement
guidance for available-for sale debt securities and beneficial interests in securitized financial assets. The guidance is applicable
for fiscal years beginning after December 15, 2019 and interim periods within those years, however, the FASB extended the effective date
for smaller reporting companies to fiscal years beginning after December 15, 2022. The Company adopted this
standard January 1, 2023. It did not have a material impact on the consolidated financial statements.
4.
OIL
    & NATURAL GAS PROPERTIES
The
following table presents the capitalized costs for oil and natural gas properties of the Company:
March 31, 2023
December 31, 2022
Evaluated Costs Subject to amortization
$
—
$
—
Unevaluated Costs
88,626,670
79,695,928
Total Capitalized Costs
88,626,670
79,695,928
Less accumulated depreciation, depletion and amortization
—
—
Total Oil and Natural Gas Properties
88,626,670
79,695,928
Unevaluated
costs as of March 31, 2023, and December 31, 2022, include cumulative costs of developing projects including the Orogrande and Hazel
Projects in West Texas and the costs related to the Oklahoma Properties. In accordance with required accounting adjustments related to
the Spin-Off, the carrying value of the oil and natural gas assets were adjusted to fair value as of December 15, 2022.
The
Company periodically adjusts for the separation of evaluated versus unevaluated costs within its full cost pool to recognize the value
impairment related to the expiration of, or changes in market value, of unevaluated leases. The impact of reclassifications as they become
necessary is to increase the basis for calculation of future period's depletion, depreciation and amortization which effectively
recognizes the impairment on the consolidated statement of operations over future periods. Reclassified costs also become evaluated costs
for purposes of ceiling tests, and which may cause recognition of increased impairment expense in future periods. The remaining cumulative
unevaluated costs which have been reclassified within the Company's full cost pool totals $-0- as of March 31, 2023. As of December
31, 2022, evaluated costs are $-0- since the Company had no proved reserve value associated with our properties.
Due
to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a write-down could
occur. Proved reserves are estimated quantities of crude oil, natural gas, and NGLs, which geological and engineering
data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions.
The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts
which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities
are not in place or for which transportation and/or marketing contracts are not in place. Estimated reserves to be developed through
secondary or tertiary recovery processes are classified as unevaluated properties.
Current
Projects
The
Company is an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties
in the United States. The Company is primarily focused on the acquisition of early-stage projects, the development and delineation of
these projects, and then the monetization of those assets once these activities are completed.
The
Company's primary focus is the development of interests in oil and natural gas projects it holds in the Permian Basin in West Texas.
The Company also holds minor interests in certain other oil and natural gas projects in Central Oklahoma that it is in the process of
divesting.
As
of March 31, 2023, the Company had interests in three oil and natural gas projects: the Orogrande Project in Hudspeth County, Texas,
the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, and two wells in Central Oklahoma.
F-
25
Orogrande
Project, West Texas
On
August 7, 2014, Torchlight entered into a Purchase Agreement with Hudspeth, McCabe Petroleum Corporation ("MPC"), and Gregory
McCabe ("Mr. McCabe"). Mr. McCabe was the sole owner of both Hudspeth and MPC. Under the terms and conditions of the Purchase
Agreement, Torchlight purchased 100% of the capital stock of Hudspeth which held certain oil and natural gas assets, including a 100%
working interest in approximately 172,000 predominately contiguous acres in the Orogrande Basin in West Texas. Mr. McCabe has, at his
option, a 10% working interest back-in after payout and a reversionary interest if drilling obligations are not met, all under the terms
and conditions of a participation and development agreement among Hudspeth, MPC and Mr. McCabe. Mr. McCabe also holds a 4.5% overriding
royalty interest in the Orogrande acreage, —which he obtained prior to, and was not a part of the August 2014 transaction. As of
March 31, 2023, leases covering approximately 134,000 acres remain in effect.
Effective
March 27, 2017, the property became subject to a University Lands D&D Unit Agreement ("DDU Agreement") which allows for
all 192 existing leases covering approximately 134,000 gross acres leased from University Lands to be combined into one drilling and
development unit for development purposes. The term of the DDU Agreement expires on December 31, 2023, and the time to drill on the drilling
and development unit continues through December 31, 2023. The DDU Agreement also grants the right to extend the DDU Agreement through
December 31, 2028 if compliance with the DDU Agreement is met and the extension fee associated with the additional time is paid.
Drilling
obligations under the DDU Agreement include five wells per year in years 2021, 2022 and 2023. The drilling obligations are minimum yearly
requirements and may be exceeded if acceleration is desired.
In the years prior, our operations team deployed
a new mist drilling solution that increased hole stability, which we believe will result in meaningful cost savings for additional
wells drilled in the Orogrande Project. Multiple test wells were drilled in the Orogrande Project in order to stay in compliance
with the DDU Agreement. While these previously drilled wells may have potential to produce hydrocarbons to sell commercially in the
future, we have no immediate plans to deploy the additional capital necessary to sell production from these wells to third parties.
Instead, we plan to use the results from these wells to determine our drilling plans for future wells, including reservoir
locations, target depths and designated acreage, in the Orogrande Project. Notwithstanding the foregoing, development of the wells
continued through March 31, 2023, to further capture and document the scientific base in support of demonstrating the production
potential of the property. As of March 31, 2023, a total of 15 test wells have been drilled on the acreage.
On
March 9, 2020, holders of certain notes payable by Torchlight entered into a Conversion Agreement under which the noteholders elected
to convert $6,000,000 of principal and approximately $1,331,000 of accrued interest on the notes held by such holders, in accordance
with their terms, into an aggregate 6% working interest (of all such holders) in the Orogrande Project.
The
Company intends to make offers and enter into agreements with one or more of the other current working interest owners in the Orogrande
Project (each an "Orogrande Owner" and collectively, the "Orogrande Owners"). The Company anticipates offering
the Orogrande Owners shares of common stock in exchange for such Orogrande Owner's respective working interest in the Orogrande
Project. The Company intends to offer the number of shares of common stock necessary such that each participating Orogrande Owner would
own the percentage of common stock then outstanding in proportion to the percentage owned in the working interest of the Orogrande Project.
For illustration purposes, if an Orogrande Owner owns 10% of the working interest of the Orogrande Project, and such Orogrande Owner
elects to participate and accept the Company's offer of shares of common stock, then such Orogrande Owner will be offered 10% of
the aggregate amount of outstanding shares of common stock. The Company's decision to enter into these transactions will depend
on ability of the Company and each Orogrande Owner to negotiate and enter into definitive agreements related to such transaction and
the Company's board of directors receiving an industry-standard fairness opinion from an investment banking firm. One of the Orogrande
Owners is Wolfbone Investments, LLC ("Wolfbone"), an entity controlled by Mr. McCabe. Mr. McCabe owns, directly and indirectly
through entities he owns or controls, 7.75% of the Company's common stock as of December 31, 2022, which would increase by the
proportionate exchange of working interest for shares of the Company's common stock if consummated.
The
Orogrande Project ownership as of March 31, 2023, is detailed as follows:
Revenue Interest
Working Interest
University Lands - Mineral Owner
20.000
%
ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe
4.500
%
ORRI - Unrelated Party
0.500
%
Hudspeth Oil Corporation, a subsidiary of Next Bridge Hydrocarbons, Inc.
49.875
%
66.500
%
Wolfbone Investments, LLC, an entity controlled by Gregory McCabe
18.750
%
25.000
%
Conversion by Note Holders in March, 2020
4.500
%
6.000
%
Unrelated Party
1.875
%
2.500
%
100.000
%
100.000
%
F-
26
Hazel
Project in the Midland Basin in West Texas
Effective
April 4, 2016, TEI acquired from MPC a 66.66% working interest in approximately 12,000 acres in the Midland Basin. A back-in after payout
of a 25% working interest was retained by MPC and another unrelated working interest owner.
In
October 2016, the holders of all of Torchlight's then-outstanding shares of Series C Preferred Stock (which were issued in July
2016) elected to convert into a total 33.33% working interest in our Hazel Project, reducing TEI's ownership from 66.66% to a 33.33%
working interest.
Acquisition
of Additional Interests in Hazel Project
On
January 30, 2017, Torchlight entered into and closed an Agreement and Plan of Reorganization and a Plan of Merger with an entity which
was wholly owned by Mr. McCabe, which resulted in the acquisition of approximately 40.66% working interest in the 12,000 gross acres,
9,600 net acres, in the Hazel Project.
Also,
on January 30, 2017, Torchlight entered into and closed a Purchase and Sale Agreement with Wolfbone. Under the agreement, Torchlight
acquired certain of Wolfbone's Hazel Project assets, including its interest in the Flying B Ranch #1 well and the 40-acre unit
surrounding the well.
Upon
the closing of the transactions, the Torchlight working interest in the Hazel Project increased by 40.66% to a total ownership of 74%.
Effective
June 1, 2017, Torchlight acquired an additional 6% working interest from unrelated working interest owners increasing its working interest
in the Hazel project to 80%, and an overall net revenue interest of 75%.
Seven
test wells have been drilled on the Hazel Project to capture and document the scientific base in support of demonstrating the production
potential of the property.
Option
Agreement with Masterson Hazel Partners, LP
On
August 13, 2020, the Company's subsidiaries TEI and Torchlight Hazel (collectively, "Torchlight Subs") entered into
an option agreement (the "Option Agreement") with Masterson Hazel Partners, LP ("MHP") and MPC. Under the agreement,
MHP was obligated to drill and complete, or cause to be drilled and completed, at its sole cost and expense, a new lateral well (the
"Well") on the Hazel Project, sufficient to satisfy Torchlight Subs's continuous development obligations on the southern
half of the prospect no later than September 30, 2020. MHP has satisfied this drilling obligation. MHP paid to Torchlight Subs $1,000
as an option fee at the time of execution of the Option Agreement. MHP is entitled to receive, as its sole recourse for the recoupment
of drilling costs, the revenue from production of the Well attributable to Torchlight Subs's interest until such time as it has
recovered its reasonable costs and expenses for drilling, completing, and operating the well.
In
exchange for MHP satisfying the above drilling obligations, Torchlight Subs granted to MHP the exclusive right and option to perform
operations, at MHP's sole cost and expense, on the Hazel Project sufficient to satisfy Torchlight Subs's continuous development
obligations on the northern half of the prospect. Because MHP exercised this drilling option and satisfied the continuous development
obligations on the northern half of the prospect, under the terms of the Option Agreement (as amended in September 2020) MHP had the
option to purchase the entire Hazel Project no later than May 31, 2021. Such purchase would be under the terms of a form of Purchase
and Sale Agreement included as an exhibit to the Option Agreement, at an aggregate purchase price of$12,690,704 for approximately 9,762
net mineral acres, and not less than 74% net revenue interest (approximately $1,300 per net mineral acre). MHP declined to exercise the
Option in 2021.
Hunton
Play, Central Oklahoma
As
of March 31, 2023, the Company was producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove.
5.
RELATED
    PARTY BALANCES
As
of March 31, 2023 and December 31, 2022, the Company had a balance of $
177,519
for an account receivable due from MPC, a shareholder
of the Company, for amounts advanced related to the Orogrande development cost sharing arrangement agreed to in connection with the acquisition
of the Orogrande working interests in 2014.
F-
27
On
December 22, 2022, the Company issued an unsecured promissory note in the principal amount of up to $20 million in favor of Mr. McCabe
(the "2022 Note"). The 2022 Note bears interest at 5% per annum, computed on the basis of a 365-day year, and matures on June
21, 2023 (the "2022 Note Maturity Date"); provided, however, if the Company raises $30 million or more in capital through debt
or equity or a combination thereof by the 2022 Note Maturity Date, the 2022 Note Maturity Date will be extended to October 3, 2023. The
outstanding principal of the 2022 Note, together with all accrued interest thereon, becomes due on June 21, 2023. The revolving commitment
under the 2022 Note expires on 2022 Note Maturity Date. As of March 31, 2023, the Company had $16,875,000 in principal amount outstanding
and $3,125,000 of available borrowings under the 2022 Note.
6.
COMMITMENTS
    AND CONTINGENCIES
Legal
Matters
On
April 30, 2020, the Company's wholly owned subsidiary, Hudspeth, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
("Cordax"). The suit,
Hudspeth and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies
,
was filed in the 189
th
Judicial District Court of Harris County, Texas. The suit seeks the recovery of approximately $1.4
million in costs incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located
in the Orogrande Field. Working interest owner Wolfbone is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral
lien in the amount of $104,500 against the Orogrande Field and has sued the operator and counterclaimed against Hudspeth for breach of
contract, seeking the same amount as the lien. Meta, as the Company's parent at the time, determined to add the manufacturer of
one of the tool components that it contends was one of the causes of the tool failure. It was later disclosed that Cordax is the subsidiary
of a Canadian parent company, who has also been added to the case. Cordax's current Chairman of the Board filed a special appearance
after being served with a citation, alleging that he was a Canadian citizen with no meaningful ties to Texas. After discovery was conducted
on this issue, a nonsuit without prejudice for this defendant was filed, dismissing him from the case. The remaining parties attended
mediation on June 15, 2022, that was unsuccessful in resolving the case. Discovery is substantially complete. The case is currently set
for trial beginning October 16, 2023.
On
March 18, 2021, Cordax filed a lawsuit in Hudspeth County, Texas seeking to foreclose its mineral lien against the Orogrande Field in
the amount of $104,500.01 and recover related attorney's fees. The foreclosure action,
Datalog LWT Inc. d/b/a Cordax Evaluation
Technologies v. Torchlight Energy Resources, Inc
., was filed in the 205
th
Judicial District Court of Hudspeth County,
Texas. The Company is contesting the lien in good faith and filed a Plea in Abatement on May 10, 2021, seeking a stay in the Hudspeth
County lien foreclosure case pending final disposition of the related case currently pending in Harris County, Texas. The Company is
required to indemnify Meta in connection with this matter pursuant to the terms of the Distribution Agreement with Meta.
On
January 14, 2022, a shareholder derivative action was filed in the U.S. District Court for the Eastern District of New York captioned
Hines v. Palikaras, et al.
, No. 1:22-cv-00248. The complaint names as defendants certain of Meta's current officers and
directors, certain former Torchlight officers and directors, and Meta (as nominal defendant). The complaint, purportedly brought on behalf
of Meta, asserts claims under Section 14(a) of the Exchange Act, contribution claims under Sections 10(b) and 21D of the Exchange Act,
and various state law claims such as breach of fiduciary duties and unjust enrichment. The complaint seeks, among other things, unspecified
compensatory damages in favor of Meta, certain corporate governance related actions, and an award of costs and expenses to the derivative
plaintiff, including attorneys' fees. On March 9, 2022, the Court entered a stipulated order staying this action until there is
a ruling on a motion to dismiss in the Securities Class Action.
Environmental
Matters
The
Company is subject to contingencies as a result of environmental laws and regulations. Present and future environmental laws and regulations
applicable to the Company's operations could require substantial capital expenditures or could adversely affect its operations in
other ways that cannot be predicted at this time. As of March 31, 2023, and December 31, 2022, no amounts had been recorded because no
specific liability has been identified that is reasonably probable of requiring the Company to fund any future material amounts.
7.
STOCKHOLDERS'
    EQUITY
The
Company has
500,000,000
authorized shares of common stock, par value of $
0.0001
per share and
50,000,000
authorized shares of
preferred stock, par value of $
0.0001
per share. As of March 31, 2023 and December 31, 2022, the Company has issued
165,472,241
shares of common stock and -
0
- shares of preferred stock.
Stock Based Compensation
In 2022, the Company's board of directors
adopted, and the stockholders approved, the 2022 Equity Incentive Plan (the "2022 Plan"). The 2022 Plan permits the Company
to grant stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing,
for up to a maximum of 58,273,612 shares following an automatic increase to the number of shares reserved under the 2022 Plan on
January 1, 2023. During the three months ended March 31, 2023, the Company granted 24,403,612 stock options as authorized under the
2022 Plan on the Company's form Performance Stock Option Agreement adopted by each of the Company's board of directors and
compensation committee on March 6, 2023. Vesting is subject to continued service with the Company for up to one year with provisions
for earlier vesting subject to the attainment of events outlined in the Plan.
Options granted were valued using the Black-Scholes
Option Pricing Model resulting in a total value of $
1,741,862
. Option expense for the three months ended March 31, 2023, was $
145,155
.
A
summary of stock options outstanding as of March 31, 2023, by exercise price and year of expiration is presented below:
Exercise
Price
2033
Total
$
1.2056
24,403,612
24,403,612
24,403,612
24,403,612
F-
28
8.
INCOME
    TAXES
The Company recorded no income tax provision at March
31, 2023 and December 31, 2022 because of anticipated losses for the 2023 fiscal year and actual losses incurred in 2022.
The Company estimates its annual effective income
tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. Statutory tax rate changes
and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income
tax expense for the three months ended March 31, 2023 because the Company expects to incur a tax loss in the current year. Similarly,
no income tax expense was recognized for the year ended December 31, 2022.
The Company had a Gross deferred tax asset related
to federal net operating loss carryforwards of $
81,330,836
at March 31, 2023 and $
25,935,753
and $
65,730,932
at December 31, 2022 and at December 14, 2022 (the successor period), respectively. The
federal net operating loss carryforward will begin to expire in 2034. Realization of the deferred tax asset is dependent, in part, on
generating sufficient taxable income prior to expiration of the loss carryforwards. The Company has placed a 100% valuation allowance
against the net deferred tax asset because future realization of these assets is not assured.
9.
NOTES
    PAYABLE, RELATED PARTIES
In 2021, the Company entered into a note payable with
Meta, its former parent to borrow up to $
15
million
.
On October 1, 2021, the Company issued the 2021 Note (defined below), which bears
interest at
8
%
per annum, computed on the basis of a 360-day year, which was initially to mature on March 31, 2023 (the "2021 Note
Maturity Date"); provided, however, if the Company raises $30 million or more in capital through debt or equity or a combination
thereof by the 2021 Note Maturity Date, the 2021 Note Maturity Date will be extended to September 30, 2023, and the outstanding principal
of the 2021 Note will amortize in six equal, monthly installments.
If an event of default has occurred and is continuing, interest on
the 2021 Note may accrue at the default rate of 12% per annum. The outstanding principal of the 2021 Note, together with all accrued interest
thereon, becomes due on the 2021 Note Maturity Date. The 2021 Note includes a restrictive covenant that, subject to certain exceptions
and qualifications, restricts the Company's ability to merge or consolidate with another person or entity, or sell or transfer all
or substantially all of its assets, unless the Company is the surviving entity or the successor entity assumes all of obligations under
the 2021 Note. The 2021 Note is collateralized by certain shares of common stock in Meta held by one of its stockholders, Mr. McCabe,
and by a lien on a 25% interest in the Orogrande Project owned by Wolfbone, an affiliate of Mr. McCabe.
The balance on the 2021 Note as of March 31, 2023
was $
15
million
. As of March 31, 2023, the total accrued and unpaid interest under the 2021 Note was $
1,689,444
.
On
September 2, 2022, the Company entered into a loan agreement with Meta, as lender (the "Loan Agreement") that would govern
prior loan amounts advanced to the Company from Meta. As of August 11, 2022, and August 29, 2022, the Company borrowed an additional
$
1.2
million
and $
1.46
million
, respectively, representing the remaining amount available for borrowing under the Loan Agreement and
resulting in a total of $5 million principal amount outstanding related to the Loan Agreement, the proceeds of which were used for working
capital and general corporate purposes.
The term loans under the Loan Agreement bear interest at a per annum rate equal to 8% and were
to mature on March 31, 2023 (the "Maturity Date"); provided, however, if the Company raises $30 million or more in capital
through debt or equity, or a combination thereof by the Maturity Date, the Maturity Date will be extended to October 3, 2023 and the
term loan would be amortized in six equal monthly installments.
The Loan Agreement includes customary representations and covenants that,
subject to exceptions and qualifications, restrict our ability to do certain things, such as: engage in mergers, acquisitions, and asset
sales; transact with affiliates; undergo a change in control; incur additional indebtedness; incur liens; make loans and investments;
declare dividends or redeem or repurchase equity interests; and enter into certain restrictive agreements. In addition, the Loan Agreement
contains customary events of default, mandatory prepayment events and affirmative covenants, including, without limitation, covenants
regarding the payment of taxes and other obligations, maintenance of insurance, maintenance of our material properties, reporting requirements,
compliance with applicable laws and regulations, and formation or acquisition of new subsidiaries.
On
March 31, 2023, the Company entered into an amendment to the 2021 Note and an amendment to Loan Agreement in order to extend each of
the 2021 Maturity Date and the Maturity Date respectively from March 31, 2023 to October 3, 2023. Such amendments also removed the provisions
allowing for extensions of the 2021 Maturity Date and the Maturity Date in the event the Company raised $30 million or more in capital
through debt or equity or a combination thereof by March 31, 2023.
Under the terms of the Arrangement Agreement
that governed the merger transaction between Torchlight and Meta in June 2021 the oil and natural gas assets were to be sold or spun
out from Meta and the costs of any sale or spin-off incurred by Meta were to be borne the then-existing shareholders of Torchlight.
The amount of the reimbursement payable to Meta in connection with the Spin-Off is $2,589,000 which was added to the principal
amount of the Loan Agreement for a principal balance outstanding of $7,589,000 as of March 31, 2023. Concurrently with the amendment
to the Loan Agreement, the Company made a prepayment of $1 million to reduce the principal balance to $
6,589,362
. As of March 31,
2023, the loans under the Loan Agreement had  accrued and unpaid interest of $
273,002
.
F-
29
On
December 21, 2022, the Company entered into that certain Agreement and Plan of Merger (the "Merger Agreement") with Hudspeth,
Wolfbone, MPC and Mr. McCabe, pursuant to which in a series of transactions the oil and natural gas leases, the lands covered by such
leases, pooling and communitization agreements, rights-of-way, the surface estate of the lands and all wells located in Orogrande Project
will be transferred, conveyed and assigned to Hudspeth (or its designated assignee) in consideration of (1) treating the Orogrande Obligations
(as defined in the Merger Agreement) as having been irrevocably satisfied and discharged in full with respect to MPC and (2) an issuance
of 56,297,638 shares of Company common stock to Mr. McCabe (such series of transactions collectively, the "Merger").
The
Merger is to be completed in accordance with the Texas Business Organizations Code, whereby (a) the Company will form NBH MergeCo, LLC
with the State of Texas ("MergeCo") in order to cause Hudspeth to assign all of its rights under the Merger Agreement to
MergeCo and MergeCo will assume Hudspeth's obligations under the Merger Agreement, (b) Hudspeth (or MergeCo, as its assignee),
Wolfbone and MPC shall merge with each of Wolfbone and MPC as surviving entities, and (c) Wolfbone shall become a direct and wholly-owned
subsidiary of the Company. The closing of the transactions contemplated by the Merger Agreement are subject to the satisfaction of certain
customary closing conditions, including filing and acceptance of the certificate of merger by the Secretary of State of the State of
Texas.
In
connection with the Merger, on December 22, 2022, the Company entered into the 2022 Note in the principal amount of up to $20 million
in favor of Mr. McCabe. The Company is entitled to request advances under the 2022 Note in a minimum principal amount of $100,000 each.
Mr. McCabe is the largest shareholder of the Company's common stock. As of March 31, 2023 the Company had drawn $
16,875,000
on the 2022 Note.
10.
ASSET
    RETIREMENT OBLIGATIONS
The
following is a reconciliation of the asset retirement obligations liability through March 31, 2023:
Asset Retirement Obligations  - January 1, 2022
$
21,937
Accretion Expense
1,092
Estimated liabilities recorded
223,837
Asset Retirement Obligations - December 31, 2022
$
246,866
Accretion Expense
5,865
Estimated liabilities recorded
—
Asset retirement obligations - March 31, 2023
$
252,731
11.
SUBSEQUENT
    EVENTS
The Wolfbone Merger Closing
The Merger became effective on April 25, 2023
and the closing of the Merger occurred on May 11, 2023. As a result of the Merger, the Company acquired Wolfbone's
22.6249
%
remaining rights to working interest in the Orogrande Project in consideration of the issuance by the Company of 56,297,638 shares
of the Company's common stock to McCabe.
Working Interest Contributions
On May 11, 2023, the Company and its wholly
owned subsidiary Hudspeth, entered into a contribution and exchange agreement with each of the Orogrande Owners named in the table
below, pursuant to which and upon the completion of the Merger, the Company offered to the Orogrande Owners the number of shares of
the Company's common stock set forth opposite such Orogrande Owner's name below in exchange for and in order to acquire
such Orogrande Owner's rights to working interest in the Orogrande Project.
The Company will issue the number
of shares of common stock to each of the Orogrande Owners as follows:
Shares of Common Stock
Working
    Interest Contribution
Dingus Investments, Inc.
7,050,382
2.8334
%
Pandora Energy, LP
6,220,779
2.5000
%
Kennedy Minerals, Ltd
6,220,779
2.5000
%
The de Compiegne Property Company No. 20, Ltd
6,220,779
2.5000
%
Loma Hombre Energy, LLC
622,078
0.2500
%
Sero Capital, LLC
725,840
0.2917
%
TOTAL
27,060,637
10.8751
%
F-
30
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution.
The
following table sets forth an itemization of all estimated expenses in connection with the issuance and distribution of the securities
to be registered:
Item
Amount
Registration Statement filing fee
$
5,311.47
Accountants fees and expenses*
—
Legal fees and expenses*
—
Printing*
—
Transfer and distribution agent fees and expenses*
—
Miscellaneous*
—
Total
$
5,311.47
*
To
be furnished by amendment.
Item 14.
Indemnification of Directors and Officers.
The
Company's Amended and Restated Articles of Incorporation and Bylaws provide that, to the fullest extent permitted by the laws of
the State of Nevada, any officer or director of the Company, who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that
he/she is or was or has agreed to serve at the request of the Company as a director, officer, employee or agent of the Company, or while
serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Company as a director,
officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity. For the avoidance of doubt, the foregoing indemnification obligation includes, without limitation, claims for
monetary damages against indemnitee to the fullest extent permitted under Section 78.7502 and 78:751 of the Nevada Revised Statutes
as in existence on the date hereof.
The
indemnification provided shall be from and against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by indemnitee or on indemnitee's behalf in connection with such action, suit or proceeding and
any appeal therefrom, but shall only be provided if indemnitee acted in good faith and in a manner indemnitee reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to any criminal action, suit or proceeding, had no reasonable
cause to believe indemnitee's conduct was unlawful.
In
the case of any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor
by reason of the fact that he/she is or was a director, officer, employee or agent of the Company, or while serving as a director or
officer of the Company, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, no indemnification shall be made
in respect of any claim, issue or matter as to which indemnitee shall have been adjudged to be liable to the Company unless, and only
to the extent that, the Nevada courts or the court in which such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the Nevada courts or such other court shall deem proper.
II-
1
The
termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the indemnitee did not act in good faith and in a manner which
indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that indemnitee's conduct was unlawful.
To
the extent that indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling
our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable. If a claim for indemnification against such liabilities
(other than the payment by us of expenses incurred or paid by a director, officer or controlling person of our company in the successful
defense of any action, suit or proceeding) is asserted by any of our directors, officers or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of that issue.
Item
15. Recent Sales of Unregistered Securities.
On
May 11, 2023, the Company issued 56,297,638 shares of restricted common stock to Mr. McCabe under the Merger Agreement and the
number of shares of common stock set forth opposite each Orogrande Owner's name to each of the Orogrande Owners pursuant
to contribution and exchange agreements with each of the Orogrande Owners as follows:
Shares of Common Stock
Working Interest Contribution
Dingus Investments, Inc.
7,050,382
2.8334
%
Pandora Energy, LP
6,220,779
2.5000
%
Kennedy Minerals, Ltd
6,220,779
2.5000
%
The de Compiegne Property Company No. 20, Ltd
6,220,779
2.5000
%
Loma Hombre Energy, LLC
622,078
0.2500
%
Sero Capital, LLC
725,840
0.2917
%
TOTAL
27,060,637
10.8751
%
The
Company issued the shares of the Company's common stock to Mr. McCabe under the Merger Agreement and to each of the
Orogrande Owners pursuant to contribution and exchange agreements, in each case, without registration under the Securities Act of 1933,
as amended (the "Securities Act") by reason of an exemption from registration afforded by the provisions of Section 4(a)(5)
and/or Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering
and based on Mr. McCabe's representations and warranties included in the Merger Agreement and each Orogrande Owner's
representations and warranties included in the contribution and exchange agreements, respectively, that (a) such person is an "accredited
investor" as defined under the Securities Act, and (b) the shares of common stock were acquired for investment for such person's
account, and not with a view to resale or distribute any part thereof, unless otherwise allowed for under the Securities Act or any applicable
exemption from registration. As a result of the Company being a reporting company with the SEC, the Company believes that each of Mr.
McCabe and the Orogrande Owners had access to the type of information normally provided in a prospectus for a registered securities
offering. No underwriting discounts or commissions were paid in connection with the issuances.
II-
2
Item
16. Exhibits and Financial Statement Schedules.
(a)
Exhibits.
Exhibit
Number
Exhibit
    Description
2.1
Distribution Agreement between Meta Materials Inc. and Next Bridge Hydrocarbons, Inc., dated December 2, 2022 (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
2.2
Agreement
    and Plan of Merger among Next Bridge Hydrocarbons, Inc., Hudspeth Operating, LLC, Wolfbone Investments, LLC, McCabe Petroleum Corporation,
    and Gregory McCabe, dated December 21, 2022 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed December
    27, 2022).
3.1
First
    Amended and Restated Articles of Incorporation of Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 3.1 to our
    Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
3.2
Amended
    and Restated By-laws of Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 3.2 to our Registration Statement on
    Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
5.1
Opinion
    of Woodburn and Wedge.**
10.1
Assignment
    Agreement between Meta Materials Inc. and Next Bridge Hydrocarbons, Inc., dated June 28, 2022 (incorporated by reference to Exhibit
    10.1 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.2
Tax
    Matters Agreement between Meta Materials Inc. and Next Bridge Hydrocarbons, Inc., date December 2, 2022 (incorporated by reference
    to Exhibit 10.2 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
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10.3+
Executive
    Employment Agreement of Chief Executive Officer (incorporated by reference to Exhibit 10.3 to our Registration Statement on Form
    S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.4+
Executive
    Employment Agreement of President, dated October 21, 2022 (incorporated by reference to Exhibit 10.4 to our Registration Statement
    on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.5+
Executive
    Employment Agreement of Chief Financial Officer, dated October 21, 2022 (incorporated by reference to Exhibit 10.5 to our Registration
    Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.6+
Executive
    Employment Agreement of Chief Operating Officer, dated October 21, 2022 (incorporated by reference to Exhibit 10.6 to our Registration
    Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.7+
2022
    Equity Incentive Plan of Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 10.7 to our Registration Statement
    on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.8
Purchase
    & Settlement Agreement, dated August 6, 2018, between Torchlight Energy Resources, Inc., Hudspeth Oil Corporation, Founders Oil
    & Gas, LLC, Founders Oil & Gas Operating, LLC, Wolfbone Investments, LLC and McCabe Petroleum Corporation (incorporated by
    reference to Exhibit 10.8 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.9
Purchase
    Agreement dated April 4, 2016, by and among McCabe Petroleum Corporation, Torchlight Energy Resources, Inc. and Torchlight Energy,
    Inc. (incorporated by reference to Exhibit 10.9 to our Registration Statement on Form S-1, as amended, effective as of November 18,
    2022 (File No. 333-266143)).
10.10
Option
    Agreement, by and among Torchlight Energy, Inc., Torchlight Hazel, LLC, Masterson Hazel Partners, LP and McCabe Petroleum Corporation,
    dated August 13, 2020 (incorporated by reference to Exhibit 10.10 to our Registration Statement on Form S-1, as amended, effective
    as of November 18, 2022 (File No. 333-266143)).
10.11
First
    Amendment to Option Agreement, by and among Torchlight Energy, Inc., Torchlight Hazel, LLC, Masterson Hazel Partners, LP and McCabe
    Petroleum Corporation, dated September 18, 2020 (incorporated by reference to Exhibit 10.11 to our Registration Statement on Form
    S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.12
Second
    Amendment to Option Agreement, by and among Torchlight Energy, Inc., Torchlight Hazel, LLC, Masterson Hazel Partners, LP and McCabe
    Petroleum Corporation, dated April 15, 2021 (incorporated by reference to Exhibit 10.12 to our Registration Statement on Form S-1,
    as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.13
Secured
    Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Meta Materials, Inc., as holder, dated October 1, 2021 (incorporated
    by reference to Exhibit 10.13 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No.
    333-266143)).
10.14
First
    Amendment to Secured Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Meta Materials, Inc., as holder, dated
    September 2, 2022 (incorporated by reference to Exhibit 10.14 to our Registration Statement on Form S-1, as amended, effective as
    of November 18, 2022).
10.15
Loan
    Agreement between Meta Materials, Inc. and Next Bridge Hydrocarbons, Inc., dated September 2, 2022 (incorporated by reference to
    Exhibit 10.15 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.16
Participation
    Agreement by and between McCabe Petroleum Corporation, Gregory McCabe and Hudspeth Oil Corporation, dated September 23, 2014 (incorporated
    by reference to Exhibit 10.16 to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No.
    333-266143)).
10.17
Amendment
    to Participation Agreement, by and between McCabe Petroleum Corporation, Gregory McCabe and Hudspeth Oil Corporation, dated January
    5, 2015 (incorporated by reference to Exhibit 10.17 to our Registration Statement on Form S-1, as amended, effective as of November
    18, 2022 (File No. 333-266143)).
10.18
Second
    Amendment to Participation Agreement, by and between McCabe Petroleum Corporation, Gregory McCabe and Hudspeth Oil Corporation, dated
    December 31, 2015 (incorporated by reference to Exhibit 10.18 to our Registration Statement on Form S-1, as amended, effective as
    of November 18, 2022 (File No. 333-266143)).
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10.19
Form
    of Conversion Agreement, dated March 9, 2020, by and between Torchlight Energy Resources, Inc., Hudspeth Oil Corporation and each
    of the previous holders of 16% Series C Unsecured Convertible Promissory Notes (incorporated by reference to Exhibit 10.19 to our
    Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.20
Amendment
    to Tax Matters Agreement, between Next Bridge Hydrocarbons, Inc. and Meta Materials, Inc. (incorporated by reference to Exhibit 10.20
    to our Registration Statement on Form S-1, as amended, effective as of November 18, 2022 (File No. 333-266143)).
10.21
5%
    Unsecured Promissory Note by Next Bridge Hydrocarbons, Inc. in favor of Greg McCabe, dated December 21, 2022 (incorporated by reference
    to Exhibit 10.21 to our Current Report on Form 8-K, filed December 27, 2022).
10.22
Form of Contribution Agreement between the Orogrande Owner and Next Bridge Hydrocarbons, Inc. (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed May 16, 2023).
10.23+
Form
    Performance Stock Option Agreement (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q, filed May 15,
    2023).
10.24
Second Amendment to Secured Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Meta Materials, Inc., as holder, dated March 31, 2023 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed April 5, 2023).
10.25
Second Amendment to Loan Agreement between Meta Materials, Inc. and Next Bridge Hydrocarbons, Inc., dated March 31, 2023 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed April 5, 2023).
10.26
First
    Amendment to Unsecured Promissory Note, between Next Bridge Hydrocarbons, Inc., as debtor, and Gregory McCabe, dated June 16, 2023
    (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed June 26, 2023).
10.27
Contribution Agreement, by and among Next Bridge Hydrocarbons, Inc., Gregory McCabe, and McCabe Petroleum Company, dated July 25, 2023.*
21.1
List
    of subsidiaries of Next Bridge Hydrocarbons, Inc.
23.1
Consent of BF Borgers, CPA (independent registered public accountant).*
23.2
Consent
    of Woodburn and Wedge (included in Exhibit 5.1).*
23.3
Consent of Independent Petroleum Engineers.*
24.1
Power
    of Attorney (Included on the Signature Pages to the Registration Statement).*
99.1
Report of Independent Petroleum Engineers (incorporated by reference to Exhibit 99.1 to our Annual Report on Form 10-K for the year ended December 31, 2022, as amended on Form 10-K/A filed on May 1, 2023).
107
Filing Fee Table.*
†
Certain
    exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant hereby
    agrees to furnish a copy of any omitted exhibits and schedules to the SEC upon its request.
+
Indicates
    a management contract or compensatory plan
*
Filed
    herewith.
**
To
be filed by an amendment to this registration statement on Form S-1 statement.
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5
(b)
Financial
Statement Schedules
No
financial statement schedules are provided because the information called for is not required or is shown either in our consolidated
financial statements or notes thereto.
Item
17. Undertakings.
(a)(1)
The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment
to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2)
The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.
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6
SIGNATURES
Pursuant
to the requirements of the Securities Act, Next Bridge Hydrocarbons, Inc. has duly caused this amendment to registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Fort Worth, Texas, on July 26, 2023.
NEXT
    BRIDGE HYRDOCARBONS, INC.
By:
/s/
    Clifton DuBose, Jr.
Name:
    Clifton DuBose, Jr.
Title:
    Chief Executive Officer and President
SIGNATURES
AND POWER OF ATTORNEY
Each
person whose signature appears below constitutes and appoints Clifton DuBose, Jr., and Lucas T. Hawkins, and each of them singly, his
or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any and all (i) amendments (including post-effective amendments)
and additions to this registration statement and (ii) any and all additional registration statements pursuant to Rule 462(b) of the Securities
Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agents full power and authority to do and perform each and every act in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their or his or her substitute
or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/
Gregory McCabe
Chairman
July
    26, 2023
Gregory
    McCabe
/s/
    Clifton DuBose, Jr.
Chief
Executive Officer, President
July
    26, 2023
Clifton
    DuBose, Jr.
and
    Director
/s/
    Lucas T. Hawkins
Lucas
    T. Hawkins
Chief
    Financial Officer
July
    26, 2023
/s/
    Robert L. Cook
Robert
    L. Cook
Director
July
26,
2023
/s/
    Mia Pitts
Mia
    Pitts
Director
July
    26, 2023
/s/
    Kristin Whitley
Kristin
    Whitley
Director
July
    26, 2023
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