Headquarters Relocation
Effective January 1, 2021, we moved our corporate headquarters to The Woodlands, Texas. In conjunction with the new office lease, we incurred operating lease obligations. During the first quarter of 2021, we downsized our Midland office and closed the Tulsa office.
Officers and Directors of the Company
On March 24, 2021, Company’s board of directors appointed Travis Thomas as Chief Financial Officer. Mr. Thomas succeeded Randy Broaddrick, who has served the Company as Chief Financial Officer since its reverse merger with Stanford Energy in 2012
Borrowing Base Amendment
In December 2020, the borrowing base supporting our Credit Facility was amended to $350 million, subject to its semi-annual redetermination. We paid down $7.5 million in the first quarter of 2021 and had $305.5 million outstanding on the Credit Facility as of March 31, 2021. As our borrowing base is subject to a semi-annual redetermination, our available borrowings and liquidity could be impacted by a redetermination later in 2021.
Results of Operations – For the Three Months Ended March 31, 2021 and 2020
Oil and natural gas sales. For the three months ended March 31, 2021, oil and natural gas sales revenue decreased $67,796 to $39,502,532, compared to $39,570,328 for the same period during 2020, primarily as a result of lower production and higher commodity prices. Oil sales decreased $3,252,618 and natural gas sales increased $3,184,822. For the three months ended March 31, 2021, oil sales volume decreased 245,482 barrels to 610,121 barrels, compared to 855,603 barrels for the same period in 2020. The average realized per barrel of oil price increased 28% from $45.16 for the three months ended March 31,2020, to $58.00 for the three months ended March 31, 2021. For the three months ended March 31, 2021, gas sales volume decreased 127,743 thousand cubic feet (MCF) to 637,808 MCF, compared to 765,551 MCF for the same period in 2020. The average realized natural gas price per MCF increased 430% from $1.22 for the three months ended March 31, 2020, to $6.46 for the three months ended March 31, 2021.
Oil and gas production costs. Our lease operating expenses (LOE) decreased from 8,421,388, or $8.57 per barrel of oil equivalent (BOE) for the three months ended March 31, 2020, to $8,226,575 or $11.48 per BOE for the three months ended March 31, 2021. The decrease in total LOE is a result of efforts to improve efficiencies in our operations. LOE for the three months ended March 31, 2021 included freeze-related repair expenses and the reduction in production during the downtime, which increased the LOE per BOE. Our total gathering, transportation and processing costs decreased from $1,149,618, or $1.17 per BOE for the three months ended March 31, 2020 to $935,019, or $1.30 per BOE for the three months ended March 31, 2021, due to reduced gas volumes associated with the weather-related downtime.
Production taxes. Production taxes as a percentage of oil and natural gas sales were 5% during the three months ended March 31, 2020 and remained steady at 5% for the three months ended March 31, 2021. These rates are expected to stay relatively steady unless we make acquisitions in other states with differing production tax rates or the states of Texas or New Mexico change their production tax rates.
Depreciation, depletion, amortization and accretion. Our depreciation, depletion, amortization and accretion expense decreased by $5,613,056 to $8,301,902 for the three months ended March 31, 2021, compared to $13,914,958 during the same period in 2020. The decrease was the result of a combination of a lower depletion rate per BOE and lower production volumes between periods. The lower depletion rate is primarily the result of the ceiling test write down during 2020. Accretion of ARO also decreased because of the liabilities sold through the Vin Fisher Operating, Inc transaction.