NOTE 17 — RELATED PARTIES

Related Party Transactions with Affiliates of the CEO

The Company has entered into transactions with related parties either controlled by the Company’s CEO or in which he has an ownership interest.

In May 2023, the Company acquired a corporate aircraft from a company affiliated with and controlled by the Company’s CEO. The purchase price of the aircraft was $19.1 million, which was paid using $9.0 million of cash on hand and through the assumption of the TVPX Loan (see Note 5 – Debt). The terms of this transaction were reviewed and approved by the Audit Committee of the Company’s board of directors.

Prior to the Company’s purchase of the aircraft, the Company used this aircraft for business purposes, and the CEO also used the aircraft for personal purposes. Both the Company’s use of the aircraft for business purposes and the CEO’s unlimited use for personal purposes were paid for by the Company pursuant to the CEO’s prior employment agreement. Airplane services transactions were approximately $0.2 million and $1.7 million during 2023 and 2022, respectively.

An entity owned by the Company’s CEO has ownership interests in certain wells in which the Company does not have an ownership interest. These wells are covered under the Company’s insurance policy. The entity reimburses the Company for its proportionate share of insurance premiums related to these wells and, when insurance proceeds are collected related to damage, those costs are disbursed as applicable. In addition, the entity reimburses the Company for certain administrative costs incurred during the year. Reimbursements from such company totaled $0.3 million, $0.4 million and $0.2 million during 2024, 2023 and 2022, respectively, and are included on the Company’s Consolidated Statements of Operations as a reduction to general and administrative expenses.

A company that provides marine transportation and logistics services to the Company employs the spouse of the Company’s CEO. The rates charged for these marine and transportation services were generally either equal to or below rates charged by non-related, third-party companies and/or otherwise determined to be of the best value to the Company. Payments to such company totaled $20.3 million, $16.5 million and $20.0 million during 2024, 2023 and 2022, respectively. The spouse received commissions partially based on services rendered to the Company which were approximately $0.1 million in each of 2024, 2023 and 2022.

An entity controlled by the Company’s CEO purchased $21.0 million in aggregate principal amount of the 11.75% Notes on the same terms as the other purchasers. Subsequent to December 31, 2024, these notes were purchased for cash pursuant to the Tender Offer, and the entity purchased $22.0 million in aggregate principal amount of the 10.75% Senior Second Lien Notes due 2029 (the “10.75% Notes”). See Note 19 – Subsequent Events for additional information.

An entity indirectly owned and controlled by the Company’s CEO is the sole lender under the Credit Agreement (see Note 5 – Debt). In relation to the execution of amendments to the Credit Agreement, the Company paid arrangement and extension fees of approximately $1.1 million during 2022 and paid legal fees on behalf of the entity of approximately $0.1 million during 2022. No arrangement fees or legal fees were paid during 2024 or 2023. In addition, the entity earned commitment fees of $1.5 million in each of 2024, 2023 and 2022, equal to 3.0% of the unused borrowing base lending commitment.

Related Party Transactions for Payments of Services

The Company retains the services of various law firms, including the Hittner Group, where one of the Company’s executive officers, George Hittner, was the founder and owner. During 2024, prior to Mr. Hittner’s appointment as Executive Vice President, General Counsel and Corporate Secretary of the Company effective September 1, 2024, the Company incurred approximately $1.6 million in fees owed to the Hittner Group related to services performed on behalf of the Company for material litigation and other matters. Since Mr. Hittner’s appointment as an executive officer, no additional fees owing to the Hittner Group have been incurred.