Financial Condition

In FY22 operating activities used $129,000 cash, and the Company sold certain oil, gas, and mineral interests in Utah for $450,000 cash. In FY21 operating activities used $85,000 cash, and the Company used $19,000 cash to acquire 130,000 shares of its common stock. Consequently, cash balances increased $321,000 in FY22 and decreased $104,000 in FY21. On October 26, 2022, the Company acquired 493,975 shares of its common stock for $44,556.55, and on November 9, 2022, the Company retired the 493,975 shares. At September 30, 2022 and 2021, accrued expenses, related party, of $1,073,000 consists of $1,024,000 in salary payable to the Company's president, pursuant to his employment agreement, that the president has elected to defer, as well as $49,000 in related accrued payroll tax. The Company's president may require the Company to pay the unpaid salary and payroll tax liability at any time.

The Company is likely to experience negative cash flow from operations unless the Company invests in interests in producing oil and gas wells or in another venture that produces sufficient cash flow from operations. With the exception of capital expenditures related to production acquisitions or drilling or recompletion activities or an investment in another venture that produces cash flow from operations, none of which are currently planned, the cash flows that could result from such acquisitions, activities, or investments, and the possibility of a material change in the current level of interest rates or of oil and gas prices, the Company knows of no trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the Company's liquidity increasing or decreasing in any material way. Except for cash generated by the operation of the Company's producing oil and gas properties, asset sales, and interest income, the Company has no internal or external sources of liquidity other than its working capital. At December 23, 2022, the Company had no material commitments for capital expenditures.





                             Results of Operations

In FY22 the Company realized a net gain of $450,000 from the sale of certain oil, gas, and mineral interests in Utah. Interest income increased from nil in FY21 to $14,000 in FY22 because of higher realized interest rates on cash balances. In FY22, other income consisted of $4,000 of out-of-period oil and gas sales received in 2022. In FY21, other income consisted of $56,000 of out-of-period oil and gas sales that, unbeknownst to the Company, an operator had held in suspense and that was received in 2021, and $1,000 of other out-of-period oil and gas sales received in 2021.

At the current levels of net oil and gas production, cash balances, interest rates, and oil and gas prices, the Company's revenue is unlikely to exceed its expenses. Unless the Company invests a substantial portion of its cash balances in interests in producing oil and gas wells or in one or more other ventures that produce revenue and net income, the Company is likely to experience net losses. With the exception of unanticipated ARO, unanticipated environmental expense, and possible changes in interest rates and oil and gas prices, the Company is not aware of any other trends, events, or uncertainties that have had or that are reasonably expected to have a material impact on net sales or revenues or income from continuing operations.





                                 Climate Change

The company does not believe that climate change or regulations adopted to mitigate the consequences of climate change will have a material impact on the Company's financial condition or results of operations.

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