CoJax Oil & Gas Corp
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
CJAXStored price and day change unavailable
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001753926-24-000954
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001753926-24-001389
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 54 current paragraphs.
37 unchanged; 14 reworded; 3 added; 5 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 32 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Overview and Recent Transactions
Current report
On May 31, 2024, the Company issued 1,320,755 shares of common stock, $0.01 par value per share, valued at $2.00 per share (the “Shares”), to Liberty Operating, LLC, a Mississippi limited liability company (“Liberty”), in consideration for the sale and assignment of various mineral and oil and gas interests in and to certain properties located in Mississippi to Barrister Energy, LLC, a wholly-owned subsidiary of the Company organized under the laws of Mississippi. At the request and the instructions of Liberty, the Company issued the Shares to all members of Liberty on the pro rata basis of their ownership interest in Liberty. This acquisition was effective as of May 1, 2024.
Current report
Total operating loss was $74,361 and $377,770 for the three and six months ended June 30, 2024, and $125,370 and $425,589 for the three and six months ended June 30, 2023. The decreased loss was primarily driven by the $129,384 and $82,719 increase in revenues during the three and six months ended June 30, 2024. The increase in revenue was partially offset by the increase in lease operating expenses and depletion and accretion expense over the same periods.
Removed paragraphs (5)
Previous report
Overview
Previous report
Business Description and Plan of Operation
Previous report
Risks and Uncertainties
Previous report
The oil and natural gas industry is a global market impacted by many factors, including government regulations, particularly in the areas of trade sanctions, taxation, energy, climate change and the environment, geopolitical instability, and military conflicts (including the Russian-Ukrainian conflict in the Middle East), fluctuations in worldwide commodity demand, and the extent to which members of OPEC and other oil exporting nations manage oil supply through export quotas. In general, natural gas prices are determined by North American supply and demand and are affected by the import and export of liquefied natural gas. Oil and natural gas prices have been, and are expected to continue to be, volatile. This volatility could negatively impact future prices for oil, natural gas, petroleum products, and industrial products.
Previous report
Total operating loss was $303,408 for the three months ended March 31, 2024, and $300,219 for the three months ended March 31, 2023. The increased loss was primarily driven by the $46,666 decrease in revenues.
Reworded paragraphs (14)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, and potential growth opportunities. Our forward-looking statements do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” “estimates,” “projects,” “targets” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, and potential growth opportunities. Our forward-looking statements do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” “estimates,” “projects,” “targets” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.
Previous wording
CoJax is currently engaged in oil and natural gas acquisition, exploration, development, and production in Mississippi and Alabama. We focus on developing our existing properties while continuing to pursue acquisitions of oil and gas properties with upside potential in the Gulf States Drill Region.
Current wording
CoJax is a growth-oriented independent exploration and production company based in Shreveport, Louisiana, and is engaged in oil and natural gas development, production, acquisition, and exploration activities currently focused on the Gulf States Drill Region. The Company is currently engaged in oil and natural gas acquisition, exploration, development, and production in Mississippi and Alabama. We focus on developing our existing properties while continuing to pursue acquisitions of oil and gas properties with upside potential in the Gulf States Drill Region.
Previous wording
Results of Operations – For the Three Months Ended March 31, 2024, and 2023
Current wording
Results of Operations – For the Three and Six Months Ended June 30, 2024, and 2023
Previous wording
Revenues were $182,052 for the three months ended March 31, 2024, compared to $228,718 for the three months ended March 31, 2023. The Company is an early-stage company, having just begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights, and therefore has just begun producing significant revenue in 2023. The decrease in revenue of 20.4% was primarily driven by a decrease in production.
Current wording
Revenues were $318,007 and $500,060 for the three and six months ended June 30, 2024, compared to $188,623 and $417,341 for the three and six months ended June 30, 2023. The Company is an early-stage company, having just begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights, and therefore has just begun producing significant revenue in 2023. The increase in revenues from each period in 2023 to the same periods in 2024 was due to an increase in production and the acquisition of oil and gas properties.
Previous wording
Lease operating expenses were $47,341 for the three months ended March 31, 2024, compared to $59,139 for the three months ended March 31, 2023, representing a decrease of 19.9% or $11,798. The decrease in expense was primarily attributable to the decrease in production, which is in line with the decrease in revenue.
Current wording
Lease operating expenses were $163,483 for the six months ended June 30, 2024, compared to $117,877 for the six months ended June 30, 2023, representing an increase of $45,606 or 38.7%. Lease operating expenses were $116,142 and $58,738 for the three months ended June 30, 2024 and June 30, 2023, respectively. The increase in expense was primarily attributable to the increase in production, which is line with the change in revenue.
Previous wording
Other expense, net was $78 for the three months ended March 31, 2024, as compared to $556 for the three months ended March 31, 2023, due to an increase in interest income.
Current wording
Other expense, net was $154 for the six months ended June 30, 2024, as compared to $1,102 for the six months ended June 30, 2023; and was $77 for the three months ended June 30, 2024, as compared to $546 for the three months ended June 30, 2023. These changes were primarily driven by an increase in interest income.
Previous wording
As a result of the above factors, for the three months ended March 31, 2024, the Company had a net loss of $303,486 as compared to a net loss of $300,775 for the three months ended March 31, 2023.
Current wording
As a result of the above factors, for the six months ended June 30, 2024, the Company had a net loss of $377,924, as compared to a net loss of $426,691 for the six months ended June 30, 2023. For the three months ended June 30, 2024, the Company had a net loss of $74,438, as compared to a net loss of $125,916 for the three months ended June 30, 2023.
Previous wording
The following table presents our sales volumes and received pricing information for the three-month periods ended March 31, 2024, and 2023:
Current wording
The following table presents our sales volumes and received pricing information for the three and six-month periods ended June 30, 2024, and 2023:
Previous wording
The Company had cash on hand of $69,223 at March 31, 2024, compared to $75,908 at December 31, 2023. For the three months ended March 31, 2024, the Company had net cash used in operating activities of $4,201, compared to $21,353 for the same period of 2023. The decrease in cash used in operating activities was driven by the $200,567 decrease in the adjustment for the noncash issuance of common stock for services and salaries, offset by the $234,922 increase in adjustments for changes in the balances of accounts receivable, prepaid expenses, accounts payable, and accrued liabilities.
Current wording
The Company had cash on hand of $116,905 at June 30, 2024, compared to $75,908 at December 31, 2023. For the six months ended June 30, 2024, the Company had net cash provided by operating activities of $45,974, compared to $84,062 for the same period of 2023. The decrease in cash provided by operating activities was driven by the $301,188 decrease in the adjustment for the noncash issuance of common stock for services and salaries, offset by the $207,264 increase in adjustments for changes in the balances of accounts receivable, prepaid expenses, accounts payable, and accrued liabilities.
Previous wording
Net cash used in investing activities was $0 for the three months ended March 31, 2024, and March 31, 2023.
Current wording
Net cash used in investing activities was $0 for the six months ended June 30, 2024, and June 30, 2023.
Previous wording
Net cash used in financing activities was $2,484 for the three months ended March 31, 2024, compared to net cash provided by financing activities of $7,537 for the same period in 2023. The decrease is due to proceeds from stock subscriptions payable of $10,000 during the period ended March 31, 2023, compared to $0 during the same period in 2024.
Current wording
Net cash used in financing activities was $4,977 for the six months ended June 30, 2024, compared to net cash used in financing activities of $4,930 for the same period in 2023. The increase is attributable to payments of the PPP loan.
Previous wording
CoJax is presently committed to using the services of the existing gatherers in its present areas of production. This gives such gatherers certain short-term relative monopolistic powers to set gathering and transportation costs. Obtaining the services of an alternative gathering company would require substantial additional costs since an alternative gatherer would be required to lay a new pipeline and/or obtain new rights-of-way.
Current wording
The Company is presently committed to using the services of the existing gatherers in its present areas of production. This gives such gatherers certain short-term relative monopolistic powers to set gathering and transportation costs. Obtaining the services of an alternative gathering company would require substantial additional costs since an alternative gatherer would be required to lay a new pipeline and/or obtain new rights-of-way.
Previous wording
We operate in a highly competitive environment for developing and acquiring properties, marketing oil and natural gas, and securing equipment and trained personnel. As a relatively small oil and natural gas company, many large producers possess and employ financial, technical, and personnel resources substantially greater than ours. Those companies may be able to develop and acquire more prospects and productive properties than our financial or personnel resources permit. It is also significant that more favorable prices can usually be negotiated for larger quantities of oil and/or gas products, such that CoJax views itself as having a price disadvantage compared to larger producers.
Current wording
We operate in a highly competitive environment for developing and acquiring properties, marketing oil and natural gas, and securing equipment and trained personnel. As a relatively small oil and natural gas company, many large producers possess and employ financial, technical, and personnel resources substantially greater than ours. Those companies may be able to develop and acquire more prospects and productive properties than our financial or personnel resources permit. It is also significant that more favorable prices can usually be negotiated for larger quantities of oil and/or gas products, such that the Company views itself as having a price disadvantage compared to larger producers.
Previous wording
Compliance with these regulations may constitute a significant cost and effort for CoJax. To date, no specific accounting for environmental compliance has been maintained or projected by CoJax. CoJax does not presently know of any environmental demands, claims, adverse actions, litigation, or administrative proceedings in which it or the acquired properties are involved or subject to or arising out of its predecessor operations.
Current wording
Compliance with these regulations may constitute a significant cost and effort for the Company. To date, no specific accounting for environmental compliance has been maintained or projected by the Company. The Company does not presently know of any environmental demands, claims, adverse actions, litigation, or administrative proceedings in which it or the acquired properties are involved or subject to or arising out of its predecessor operations.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
CoJax is a growth-oriented independent exploration and production company based in Arlington, Virginia, and is engaged in oil and natural gas development, production, acquisition, and exploration activities currently focused on the Gulf States Drill Region.