Volatility. Uncertainty. Turmoil. Words Mid-Con Energy Partners used this week in suggesting it might fail financially and have to close its doors if the pandemic’s effects continue much longer.
The Tulsa company announced it will delay its financial earnings report for the quarter quarter of 2020, blaming disruption caused by the COVID-19 pandemic. It also suggested that if the effects of the pandemic continue, the firm might be forced to end operations and be unable to pay its debts. It also suggested the possibility of prorationing by Oklahoma regulators leave it no choice but to go out of business.
In a filing with the Securities and Exchange Commission, the company explained, “The full effect on our business and operations is currently unknown. In the event that the effects of COVID-19 continue in the future or the economy continues to remain depressed or to further deteriorate, we may be forced to curtail our operations and may be unable to pay our debt obligations as they come due.”
The company said modifications to its business practices as well as travel restrictions and cancellation of physical participation in meetings slowed the preparation and review of its Quarterly Report. the preparation and review of our Quarterly Report.
“These limitations have had a negative impact on, and will continue to negatively impact, our results of operation, liquidity and financial condition,” continued the filing.
In other words, uncertainty is in the future for the company.
Mid-Con said it will delay the filing of the report for up to 45 days and hopes to have it available no later than June 20, 2020.
But the threat of proration of oil production by Oklahoma Corporation Commissioners has left Mid-Con leaders worried.
“Furthermore, some states, including Oklahoma, have publicly announced that they are considering proration of oil production in response to market conditions, which could limit the amount of oil and natural gas we can produce from our wells or limit the number of wells or the locations at which we can drill. These conditions have restricted our ability to store and move production to downstream markets, and may affect our future decisions to delay or reduce development activity or temporarily shut down production, which has and would further adversely affect our results of operation, liquidity and financial condition.”
The COVID-19 pandemic and increased oil supply due to actions by OPEC and other nations has had a negative effect on oil and gas prices, which has adversely impacted our business, results of operations and financial condition said the company.
Mid-Con said the pandemic created substantial volatility, uncertainty and turmoil in the industry.
” If the economic climate in the United States or abroad remains depressed or continues to deteriorate, demand for petroleum products could further diminish, which could further impact the prices at which we sell our oil and gas, impact the value of our working interests and other oil and gas assets, affect the ability of our vendors, suppliers and customers to continue operations, affect our operations and ultimately adversely impact our results of operations, liquidity and financial condition.”
Mid-Con Energy Partners, LP is a publicly held Delaware limited partnership formed in July 2011 to acquire, exploit and develop producing oil and natural gas properties with a focus on Enhanced Oil Recovery.
Its properties are in Southern Oklahoma, Northeastern Oklahoma, the Gulf Coast and the Permian.
Mid-Con stock hit a 52-week high in trading of $17 a share but this week prices fell to $1.93.
Click here to view entire SEC filing.