After losing nearly $12 million the second quarter and a shakeup in leadership, Tulsa-based Mid-Con Energy Partners admits in a filing with the Securities and Exchange Commission that serious doubts exist as to whether the company can survive beyond 2021.
The sharks in the business world are forcing company leaders to seriously wonder if the Oklahoma company can survive the COVID-19 pandemic and what it has done to the energy industry.
Mid-Con explained it is all dependent whether the company can renegotiate its revolving credit agreement which matures May 1, 2021.
“There can be no assurance, however, that such discussions will result in a refinancing of the credit facility on acceptable terms, if at all, or provide any specific amount of additional liquidity,” stated the company in the 10-Q filing with the SEC.
“These factors raise substantial doubt over the Partnership’s ability to continue as a going concern for at least one year from the date that these financial statements are issued, and therefore, whether we will realize our assets and extinguish our liabilities in the normal course of business and at the amounts stated in the unaudited condensed consolidated financial statements.”
Mid-Con reported a net loss of $11.9 million for the second quarter compared to $5.1 million in net income. It’s average daily net production was down 21% for the quarter and sales of oil and natural gas was down 58% from $17.2 million a year ago to $5.7 million at the end of the latest second quarter. It also suffered a $4.5 million on derivatives compared to a $20.4 million gain a year earlier.
The company has gone through a reorganization of its ownership structure where some top executives were given the door and the company cut the size of its revolving credit facility from $95 million to $64 million.
On July 6, 2020, the Partnership announced the resignation of Chad B. Roller, President and Chief Operating Officer, and Charles L. McLawhorn, III, Vice President, General Counsel and Corporate Secretary to pursue opportunities with Contango Oil & Gas Company.
On August 6, 2020, the Partnership announced the resignation of Philip R. Houchin as Chief Financial Officer. Effective July 31, 2020, Sherry L. Morgan was appointed as Chief Executive Officer, Greg Westfall was appointed as Chief Operating Officer and Jodie L. DiGiacomo was appointed as Chief Accounting Officer.
Click here to view SEC filing.