0001437749-21-012508 | 10-Q | XBRL Viewer

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 31, 2021	May 14, 2021
Document Information [Line Items]
Entity Registrant Name	HighPeak Energy, Inc.
Entity Central Index Key	0001792849
Trading Symbol	hpk
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		92,675,898
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Current Assets:
Cash and cash equivalents	$ 9,638,000	$ 19,552,000
Accounts receivable	16,915,000	7,722,000
Subscription receivable	0	3,596,000
Prepaid expenses	816,000	2,254,000
Inventory	109,000	121,000
Deposits	50,000	50,000
Total current assets	27,528,000	33,295,000
Oil and natural gas properties, using the successful efforts method of accounting:
Proved properties	433,693,000	367,372,000
Unproved properties	131,709,000	152,741,000
Accumulated depletion, depreciation and amortization	(30,392,000)	(17,477,000)
Total oil and natural gas properties, net	535,010,000	502,636,000
Other property and equipment, net	1,044,000	1,092,000
Other noncurrent assets	745,000	907,000
Total assets	564,327,000	537,930,000
Current liabilities:
Accounts payable - trade	12,760,000	7,581,000
Accrued liabilities	20,525,000	12,374,000
Other current liabilities	1,520,000	2,480,000
Total current liabilities	34,805,000	22,435,000
Noncurrent liabilities:
Deferred income taxes	40,013,000	38,898,000
Asset retirement obligations	2,481,000	2,293,000
Other	52,000	78,000
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2021 and December 31, 2020
Common stock, $0.0001 par value, 600,000,000 shares authorized, 92,675,898 and 91,967,565 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	9,000	9,000
Additional paid-in capital	589,432,000	581,426,000
Accumulated deficit	102,465,000	107,209,000
Total stockholders' equity	486,976,000	474,226,000
Total liabilities and stockholders' equity	$ 564,327,000	$ 537,930,000

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	600,000,000	600,000,000
Common stock, shares issued (in shares)	92,675,898	91,967,565
Common stock, shares outstanding (in shares)	92,675,898	91,967,565

Condensed Consolidated and Combined Statements of Operations (Unaudited) - USD ($) shares in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating Revenues:
Operating revenues	$ 25,717,000	$ 4,623,000
Operating Costs and Expenses:
Oil and natural gas production	2,227,000	2,389,000
Production and ad valorem taxes	1,664,000	308,000
Exploration and abandonments	191,000	3,000
Depletion, depreciation and amortization	12,963,000	3,356,000
Accretion of discount on asset retirement obligations	35,000	34,000
General and administrative	1,759,000	2,861,000
Stock-based compensation	966,000
Total operating costs and expenses	19,805,000	8,951,000
Income (loss) from operations	5,912,000	(4,328,000)
Interest income	1,000
Interest expense	(54,000)
Other expense		(76,503,000)
Income (loss) before income taxes	5,859,000	(80,831,000)
Income tax expense	1,115,000
Net income (loss)	$ 4,744,000	$ (80,831,000)
Earnings per share:
Basic net income (in dollars per share)	$ 0.05
Diluted net income (in dollars per share)	$ 0.05
Basic (in shares)	92,592
Diluted (in shares)	95,482
Crude Oil Sales [Member]
Operating Revenues:
Operating revenues	$ 24,870,000	$ 4,524,000
Natural Gas and NGL Sales [Member]
Operating Revenues:
Operating revenues	$ 847,000	$ 99,000

Condensed Consolidated Statement of Changes in Stockholders' Equity (Successor) (Unaudited) - 3 months ended Mar. 31, 2021 - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2020	91,968,000
Balance at Dec. 31, 2020	$ 9	$ 581,426	$ (107,209)	$ 474,226
Exercise of warrants (in shares)	554,000
Exercise of warrants		5,466		$ 5,466
Shares issued upon options being exercised (in shares)	154,000			154,268
Shares issued upon options being exercised		1,574		$ 1,574
Compensation costs included in net income		966		966
Net income (loss)			4,744	4,744
Balance (in shares) at Mar. 31, 2021	92,676,000
Balance at Mar. 31, 2021	$ 9	$ 589,432	$ (102,465)	$ 486,976

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Condensed Consolidated Statement of Changes in Partners' Capital (Predecessors) (Unaudited) - 3 months ended Mar. 31, 2020 - USD ($) $ in Thousands	Total	Limited Partner [Member]
Balance at Dec. 31, 2019	$ 464,716	$ 464,716
Cash capital contributions	54,000	54,000
Net income (loss)	(80,831)	(80,831)
Balance at Mar. 31, 2020	$ 437,885	$ 437,885

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 4,744,000	$ (80,831,000)
Adjustments to reconcile net income (loss) to net cash provided by operations:
Exploration and abandonment expense	49,000	3,000
Depletion, depreciation and amortization	12,963,000	3,356,000
Accretion expense	35,000	34,000
Stock-based compensation expense	966,000
Amortization of debt issuance costs	29,000
Loss on terminated acquisition		76,500,000
Deferred income taxes	1,115,000
Changes in operating assets and liabilities:
Accounts receivable	(9,193,000)	1,019,000
Inventory and other current assets	(12,000)	(834,000)
Accounts payable and accrued liabilities	677,000	6,781,000
Net cash provided by operating activities	11,373,000	6,028,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and natural gas properties	(44,875,000)	(47,658,000)
Changes in working capital associated with oil and natural gas property additions	13,263,000	8,933,000
Acquisitions of oil and natural gas properties	(309,000)	(3,333,000)
Issuance of notes receivable		(3,982,000)
Other property additions		(50,000)
Extension payment on acquisition		(11,000,000)
Net cash used in investing activities	(31,921,000)	(57,090,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercises of warrants	5,466,000
Proceeds from subscription receivable from exercises of warrants	3,596,000
Proceeds from exercises of stock options	1,574,000
Debt issuance costs	(2,000)
Contributions from partners		54,000,000
Net cash provided by financing activities	10,634,000	54,000,000
Net (decrease) increase in cash and cash equivalents	(9,914,000)	2,938,000
Cash and cash equivalents, beginning of period	19,552,000	22,711,000
Cash and cash equivalents, end of period	9,638,000	25,649,000
Supplemental disclosure of non-cash transactions:
Interest paid	4,000
Income taxes paid
Additions to asset retirement obligations	$ 153,000	$ 97,000

Note 1 - Organization and Nature of Operations	3 Months Ended
Note 1 - Organization and Nature of Operations	Mar. 31, 2021
Notes to Financial Statements
Business Description and Basis of Presentation [Text Block]	NOTE 1. Organization and Nature of Operations HighPeak Energy, Inc. ("HighPeak Energy" the "Company," or the “Successor”) is a Delaware corporation, initially formed in October 2019 as a wholly owned subsidiary of Pure Acquisition Corp (“Pure”), a Delaware corporation, formed in November 2017, which was a special purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving Pure and one or more businesses. See the Company's Annual Report on Form 10 -K for the year ended December 31, 2020 regarding the business combination which resulted in the Company becoming the parent company and Pure becoming a wholly owned subsidiary along with the businesses acquired. HighPeak Energy's common stock and warrants are listed and traded on the Nasdaq Global Market (the "Nasdaq") under the ticker symbols “HPK” and “HPKEW,” respectively. HighPeak Energy's Contingent Value Rights (“CVRs”) are currently traded on the Over-The-Counter market, although the Company has applied for listing on the Nasdaq. The Company is an independent oil and natural gas exploration and production company that explores for, develops and produces oil, NGL and natural gas in the Permian Basin in West Texas, more specifically, the Midland Basin. Our acreage is composed of two core areas with the northern block named Flat Top and the southern block named Signal Peak.

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

NOTE

Basis of Presentation and Summary of Significant Accounting Policies

Presentation.

In the opinion of management, the unaudited interim condensed consolidated and combined financial statements of the Company as of

March 31, 2021

and

December 31, 2020

and for the

three

months ended

March 31, 2021 (

Successor), and for the

three

months ended

March 31, 2020 (

Predecessor) include all adjustments and accruals, consisting only of normal, recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods in conformity with generally accepted accounting principles in the United States ("GAAP"). The operating results for the

three

months ended

March 31, 2021

are

not

indicative of results for a full year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These unaudited interim condensed consolidated and combined financial statements should be read together with the consolidated and combined financial statements and notes thereto included in the Company's Annual Report on Form

-K for the year ended

December 31, 2020.

Principles of consolidation.

The condensed consolidated and combined financial statements include the accounts of the Company and its wholly owned subsidiaries since

August 22, 2020,

and its Predecessors and their wholly owned subsidiaries since their acquisition or formation for all periods prior to

August 21, 2020.

All material intercompany balances and transactions have been eliminated. Certain reclassifications have been made to prior period amounts to conform to the current period's presentation.

Use of estimates in the preparation of financial statements.

Preparation of the Company's unaudited interim condensed consolidated and combined financial statements in

conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Depletion of oil and natural gas properties and evaluations for impairment of proved and unproved oil and natural gas properties, in part, is determined using estimates of proved, probable and possible oil, NGL and natural gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and natural gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves, commodity price outlooks and future undiscounted and discounted net cash flows. Other items subject to such estimates and assumptions include, but are

not

limited to, the carrying value of oil and natural gas properties, asset retirement obligations, equity-based compensation and estimates of income taxes. Actual results could differ from the estimates and assumptions utilized.

Cash and cash equivalents.

The Company's cash and cash equivalents include depository accounts held by banks with original issuance maturities of

days or less. The Company's cash and cash equivalents are generally held in financial institutions in amounts that

may

exceed the insurance limits of the Federal Deposit Insurance Corporation. However, management believes that the Company's counterparty risks are minimal based on the reputation and history of the institutions selected.

Accounts receivable.

The Company's accounts receivables are primarily comprised of oil, NGL and natural gas sales receivables, a current U.S. federal income tax receivable, joint interest receivables and other receivables for which the Company does

not

require collateral security. The Company's share of oil, NGL and natural gas production is sold to various purchasers who must be prequalified under the Company's credit risk policies and procedures. The Company records allowances for doubtful accounts based on the age of accounts receivables and the financial condition of its purchasers. The Company's credit risk related to collecting accounts receivables is mitigated by using credit and other financial criteria to evaluate the credit standing of the entity obligated to make payment on the accounts receivable, and where appropriate, the Company obtains assurances of payment, such as a guarantee by the parent company of the counterparty or other credit support.

As of

March 31, 2021

and

December 31, 2020,

the Company's accounts receivables primarily consist of amounts due from the sale of crude oil, NGL and natural gas of

$13.4

million and

$4.2

million, respectively, and are based on estimates of sales volumes and realized prices the Company anticipates it will receive, a current U.S. federal income tax receivable of

$3.2

million and

$3.2

million, respectively, and joint interest receivables of

$311,000

and

$345,000,

respectively. The Company routinely reviews outstanding balances and establishes allowances for bad debts equal to the estimable portions of accounts receivable for which failure to collect is considered probable. As of

March 31, 2021

and

December 31, 2020,

the Company had

allowance for doubtful accounts.

Subscription receivable.

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”)

505

“

Receivables for Issuance of Equity,

”

the Company recorded a subscription receivable as of

December 31, 2020

related to the exercise of warrants prior to

December 31, 2020

as the cash was collected before the financial statements were issued or available to be issued. Prior to

December 31, 2020,

312,711

warrants were exercised for cash proceeds of

$3.6

million. Due to the timing of the exercises, the shares underlying the warrants were issued in

December 2020

and the proceeds were received subsequent to

December 31, 2020.

The outstanding proceeds were recorded as a subscription receivable in the accompanying balance sheets as of

December 31, 2020.

There is

subscription receivable as of

March 31, 2021

as all cash related to exercises of warrants was received prior to the balance sheet date.

Inventory.

Inventory is comprised primarily of oil and natural gas drilling or repair items such as tubing, casing, proppant used to fracture-stimulate oil and natural gas wells, water, chemicals, operating supplies and ordinary maintenance materials and parts. The materials and supplies inventory is primarily acquired for use in future drilling operations or repair operations and is carried at the lower of cost or net realizable value, on a weighted average cost basis. Valuation allowances for materials and supplies inventories are recorded as reductions to the carrying values of the materials and supplies inventories in the Company's condensed consolidated balance sheet and as charges to other expense in the condensed consolidated statements of operations. The Company's materials and supplies inventory as of

March 31, 2021

and

December 31, 2020

$109,000

and

$120,000,

respectively, and the Company has

not

recognized any valuation allowance to date.

Oil and natural gas properties.

The Company utilizes the successful efforts method of accounting for its oil and natural gas properties. Under this method, all costs associated with productive wells and nonproductive development wells are capitalized while nonproductive exploration costs and geological and geophysical expenditures are expensed.

The Company does

not

carry the costs of drilling an exploratory well as an asset in its consolidated balance sheet following the completion of drilling unless both of the following conditions are met: (i) the well has found a sufficient quantity of reserves to justify its completion as a producing well and (ii) the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project.

Due to the capital-intensive nature and the geographical location of certain projects, it

may

take an extended period of time to evaluate the future potential of an exploration project and the economics associated with making a determination on its commercial viability. In these instances, the project's feasibility is

not

contingent upon price improvements or advances in technology, but rather the Company's ongoing efforts and expenditures related to accurately predict the hydrocarbon recoverability based on well information, gaining access to other companies' production data in the area, transportation or processing facilities and/or getting partner approval to drill additional appraisal wells. These activities are ongoing and are being pursued constantly. Consequently, the Company's assessment of suspended exploratory well costs is continuous until a decision can be made that the project has found sufficient proved reserves to sanction the project or is noncommercial and is charged to exploration and abandonment expense. See Note

for additional information.

The capitalized costs of proved properties are depleted using the unit-of-production method based on proved reserves for leasehold costs and proved reserves for drilling, completion and other oil and natural gas property costs. Costs of unproved leasehold costs are excluded from depletion until proved reserves are established or, if unsuccessful, impairment is determined.

Proceeds from the sales of individual properties and the capitalized costs of individual properties sold or abandoned are credited and charged, respectively, to accumulated depletion, depreciation and amortization, if doing so does

not

materially impact the depletion rate of an amortization base. Generally,

gain or loss is recorded until an entire amortization base is sold. However, gain or loss is recorded from the sale of less than an entire amortization base if the disposition is significant enough to materially impact the depletion rate of the remaining properties in the amortization base.

The Company performs assessments of its long-lived assets to be held and used, including proved oil and natural gas properties accounted for under the successful efforts method of accounting, whenever events or circumstances indicate that the carrying value of those assets

may

not

be recoverable. An impairment loss is indicated if the sum of the expected future cash flows is less than the carrying amount of the assets. In these circumstances, the Company recognizes an impairment charge for the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.

Unproved oil and natural gas properties are periodically assessed for impairment on a project-by-project basis. These impairment assessments are affected by the results of exploration activities, commodity price outlooks, planned future sales or expirations of all or a portion of such projects. If the estimated future net cash flows attributable to such projects are

not

expected to be sufficient to fully recover the costs invested in each project, the Company will recognize an impairment charge at that time.

Other property and equipment, net.

Other property and equipment is recorded at cost. The carrying values of other property and equipment, net of accumulated depreciation of

$285,000

and

$237,000

as of

March 31, 2021

and

December 31, 2020,

respectively, are as follows (in thousands):

	March 31, 2021		December 31, 2020
Land	$	725	$	725
Information technology		250		292
Transportation equipment		39		41
Leasehold improvements		20		24
Field equipment		10		10
Total other property and equipment, net	$	1,044	$	1,092

Other property and equipment is depreciated over its estimated useful life on a straight-line basis. Land is

not

depreciated. Information technology is generally depreciated over

three

years, transportation equipment is generally depreciated over

five

years and field equipment is generally depreciated over

seven

years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the underlying terms of the associated leases.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recoverable. If such assets are considered to be impaired, the impairment to be recorded is measured by the amount by which the carrying amount of the asset exceeds its estimated fair value. The estimated fair value is determined using either a discounted future cash flow model or another appropriate fair value method.

Debt issuance costs.

The Company has paid a total of

$407,000

in debt issuance costs,

$2,000

of which was incurred during the

three

months ended

March 31, 2021,

related to its new revolving credit facility. Amortization based on the straight-line method over the term of the revolving credit facility which approximates the interest rate method was

$29,000

and

zero

during the

three

months ended

March 31, 2021

and

2020,

respectively. As of

March 31, 2021

and

December 31, 2020,

the net debt issuance costs are included in noncurrent assets on the accompanying consolidated balance sheet due to the fact that the revolving credit facility was undrawn at the time. In the future, these net costs will be included with long-term debt, if any, in accordance with GAAP. See Note

for additional information regarding the Company's new revolving credit facility.

Leases.

The Company enters into leases for drilling rigs, storage tanks, equipment and buildings and recognizes lease expense on a straight-line basis over the lease term. Lease right-of-use assets and liabilities are initially recorded on the lease commencement date based on the present value of lease payments over the lease term. As most of the Company's lease contracts do

not

provide an implicit discount rate, the Company uses its incremental borrowing rate, which is determined based on information available at the commencement date of a lease. Leases

may

include renewal, purchase or termination options that can extend or shorten the term of a lease. The exercise of those options is at the Company's sole discretion and is evaluated at inception and throughout the contract to determine if a modification of the lease term is required. Leases with an initial term of

months or less are

not

recorded as lease right-of-use assets and liability. See Note

for additional information.

Accounts payable and accrued liabilities.

Accounts payable and accrued liabilities as of

March 31, 2021

and

December 31, 2020

totaled approximately

$34.8

million and

$22.4

million, respectively, including trade accounts payable, revenues payable and accruals for capital expenditures, operating and general and administrative expenses, operating leases and other miscellaneous items.

Asset retirement obligations.

The Company records a liability for the fair value of an asset retirement obligation in the period in which the associated asset is acquired or placed into service, if a reasonable estimate of fair value can be made. Asset retirement obligations are generally capitalized as part of the carrying value of the long-lived asset to which it relates. Conditional asset retirement obligations meet the definition of liabilities and are recorded when incurred and when fair value can be reasonably estimated. See Note

for additional information.

Revenue recognition

The Company follows FASB ASC

606,

“Revenue from Contracts with Customers,” (“ASC

606”

) whereby the Company recognizes revenues from the sales of oil and natural gas to its purchasers and presents them disaggregated on the Company's condensed consolidated and combined statements of operations.

The Company enters into contracts with purchasers to sell its oil and natural gas production. Revenue on these contracts is recognized in accordance with the

five

-step revenue recognition model prescribed in ASC

606.

Specifically, revenue is recognized when the Company's performance obligations under these contracts are satisfied, which generally occurs with the transfer of control of the oil and natural gas to the purchaser. Control is generally considered transferred when the following criteria are met: (i) transfer of physical custody, (ii) transfer of title, (iii) transfer of risk of loss and (iv) relinquishment of any repurchase rights or other similar rights. Given the nature of the products sold, revenue is recognized at a point in time based on the amount of consideration the Company expects to receive in accordance with the price specified in the contract. Consideration under the oil and natural gas marketing contracts is typically received from the purchaser

one

two

months after production. At

March 31, 2021

and

December 31, 2020,

the Company had receivables related to contracts with purchasers of approximately

$13.4

million and

$4.2

million, respectively.

Oil Contracts.

The Company's oil marketing contracts transfer physical custody and title at or near the wellhead, which is generally when control of the oil has been transferred to the purchaser. The oil produced is sold under contracts using market-based pricing which is then adjusted for the differentials based upon delivery location and oil quality. Since the differentials are incurred after the transfer of control of the oil, the differentials are included in oil sales on the consolidated and combined statements of operations as they represent part of the transaction price of the contract.

Natural Gas Contracts.

The majority of the Company's natural gas is sold at the lease location, which is generally when control of the natural gas has been transferred to the purchaser. The natural gas is sold under (i) percentage of proceeds processing contracts or (ii) a hybrid of percentage of proceeds and fee-based contracts. Under the majority of the Company's contracts, the purchaser gathers the natural gas in the field where it is produced and transports it to natural gas processing plants where NGL products are extracted. The NGL products and remaining residue natural gas are then sold by the purchaser. Under percentage of proceeds and hybrid percentage of proceeds and fee-based contracts, the Company receives a percentage of the value for the extracted liquids and the residue natural gas. Since control of the natural gas transfers upstream of the transportation and processing activities, revenue is recognized as the net amount received from the purchaser.

The Company does

not

disclose the value of unsatisfied performance obligations under its contracts with customers as it applies the practical exemption in accordance with ASC

606.

The exemption, as described in ASC

606

(a), applies to variable consideration that is recognized as control of the product is transferred to the customer. Since each unit of product represents a separate performance obligation, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is

not

required.

Income taxes.

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts for income tax purposes and net operating loss and tax credit carryforwards. The amount of deferred taxes on these temporary differences is determined using the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, as applicable, based on tax rates and laws in the respective tax jurisdiction enacted as of the balance sheet date.

The Company reviews its deferred tax assets for recoverability and establishes a valuation allowance based on projected future taxable income, applicable tax strategies and the expected timing of the reversals of existing temporary differences. A valuation allowance is provided when it is more likely than

not

(likelihood of greater than

percent) that some portion or all the deferred tax assets will

not

be realized. The Company has

not

established a valuation allowance as of

March 31, 2021

and

December 31, 2020.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than

not

that the tax position will be sustained upon examination by the taxing authorities, based upon the technical merits of the position. If all or a portion of the unrecognized tax benefit is sustained upon examination by the taxing authorities, the tax benefit will be recognized as a reduction to the Company's deferred tax liability and will affect the Company's effective tax rate in the period it is recognized. See Note

for addition information.

The Company records any tax-related interest charges as interest expense and any tax-related penalties as other expense in the condensed consolidated and combined statements of operations of which there have been

none

to date.

Prior to

August 21, 2020,

the Predecessors did

not

record a provision for U.S. federal income tax because the Predecessors were treated as partnerships for U.S. federal income tax purposes and, as such, the partners of the Predecessors reported their share of the Company's income or loss on their respective income tax returns. The Predecessors were required to file tax returns on Form

1065

with the Internal Revenue Service (“IRS”). The

2017

2019

tax years remain open to examination.

The Predecessors recognize in their condensed consolidated and combined financial statements the effect of a tax position, if that position is more likely than

not

to be sustained upon examination, including resolution of any appeals or litigation processes, based upon the technical merits of the position. Tax positions taken related to the Predecessors' status as limited partnerships, and state filing requirements have been reviewed, and management is of the opinion that they would more likely than

not

be sustained by examination. Accordingly, the Company has

not

recorded an income tax liability for uncertain tax benefits for periods prior to

August 21, 2020.

Under the new centralized partnership audit rules effective for tax years beginning after

2017,

the IRS assesses and collects underpayments of tax from the partnership instead of from each partner. The partnership

may

be able to pass the adjustments through to its partners by making a push-out election or, if eligible, by electing out of the centralized partnership audit rules. The collection of tax from the partnership is only an administrative convenience for the IRS to collect any underpayment of income taxes including interest and penalties. Income taxes on partnership income, regardless of who pays the tax or when the tax is paid, is attributed to the partners. Any payment made by the Company as a result of an IRS examination will be treated as an expense from the Company in the condensed consolidated and combined financial statements.

The Company is also subject to Texas Margin Tax. The Company realized

Texas Margin Tax in the accompanying condensed consolidated and combined financial statements as we do

not

anticipate owing any Texas Margin Tax for the periods presented.

Stock-based compensation.

Stock-based compensation expense for stock options (“Equity Awards”) is measured at the grant date or modification date, as applicable, using the fair value of the award, and is recorded, net of forfeitures, on a straight-line basis over the requisite service period of the respective award. The fair value of Equity Awards is determined on the grant date or modification date, as applicable, using a Black-Scholes option valuation model with the following inputs; (i) the grant date's closing stock price, (ii) the exercise price of the stock options, (iii) the expected term of the stock option, (iv) the estimated risk-free adjusted interest rate for the duration of the option's expected term, (v) the expected annual dividend yield on the underlying stock and (vi) the expected volatility over the option's expected term.

Stock-based compensation for HighPeak Energy common stock issued to directors with

restrictions thereon, is measured at the grant date using the fair value of the award and is recorded as stock-based compensation in the accompanying financial statements immediately. If restricted stock is awarded to employees or directors in the future, as the case

may

be, stock-based compensation will be recognized on a straight-line basis over the requisite service period of the respective award.

Segments.

Based on the Company's organizational structure, the Company has

one

operating segment, which is oil and natural gas development, exploration and production. In addition, the Company has a single, company-wide management team that allocates capital resources to maximize profitability and measures financial performance as a single enterprise.

Impact of the COVID-

Pandemic.

A novel strain of the coronavirus disease

2019

("COVID-

19"

) surfaced in late

2019

and spread around the world,

including to the United States. In

March 2020,

the World Health Organization declared COVID-

a pandemic, and the President of the United States declared the COVID-

outbreak a national emergency. The COVID-

pandemic significantly affected the global economy, disrupted global supply chains and created significant volatility in the financial markets. In addition, the COVID-

pandemic resulted in travel restrictions, business closures and other restrictions that have disrupted the demand for oil throughout the world and when combined with pressures on the global supply-demand balance for oil and related products, resulted in significant volatility in oil prices beginning late

February 2020.

The length of this demand disruption is unknown, and there is significant uncertainty regarding the long-term impact of the effects of the COVID-

pandemic to global oil demand.

Adoption of new accounting standards.

December 2019,

the FASB issued Accounting Standards Update (“ASU”)

No.

2019

12,

“

Simplifying the Accounting for Income Taxes (Topic

740

)

”. The new guidance simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, hybrid taxes, and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. Amendments are to be applied prospectively, except for certain amendments that are to be applied either retrospectively or with a modified retrospective approach through a cumulative effect adjustment recorded to retained earnings. The Company adopted ASU

2019

January 1, 2021,

which did

not

have a material impact on the Company's condensed consolidated and combined financial statements.

New accounting pronouncements.

The Company has evaluated recently issued, but

not

yet effective, accounting pronouncements and does

not

believe they would have a material effect on the Company's condensed consolidated and combined financial statements.

Note 3 - Acquisitions	3 Months Ended
Note 3 - Acquisitions	Mar. 31, 2021
Notes to Financial Statements
Acquisitions [Text Block]	NOTE 3. Acquisitions During the three months ended March 31, 2021 and 2020, the Company spent a total of $309,000 and $3.3 million, respectively, to acquire primarily undeveloped acreage, and in the case of the 2020 period, three vertical producing properties and two salt-water disposal wells in and around the Company's existing properties for future exploration activities in the Midland Basin. Grenadier Acquisition. In June 2019, HighPeak Energy Assets II, LLC (“HighPeak Assets II”) signed a purchase and sale agreement with Grenadier Energy Partners II, LLC (“Grenadier”) to acquire substantially all the oil and natural gas assets of Grenadier, effective June 1, 2019, subject to certain customary closing adjustments for a total purchase price of $615.0 million. Since HighPeak Assets II was contributed to the Predecessor in the HPK LP business combination, this purchase and sale agreement became part of the Predecessor effective October 1, 2019. A nonrefundable deposit of $61.5 million was paid to Grenadier in 2019 in addition to a $15.0 million nonrefundable extension payment in 2020 to extend the potential closing to May 2020. The Grenadier Acquisition was terminated in April 2020 and was not consummated and therefore a charge to expense of $76.5 million was recognized during the three months ended March 31, 2020.

Note 4 - Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE

Fair Value Measurements

The Company determines fair value based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company's own market assumptions, which are used if observable inputs are

not

reasonably available without undue cost and effort. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety.

The

three

input levels of the fair value hierarchy are as follows:

	●	Level 1 – quoted prices for identical assets or liabilities in active markets.
	●	Level 2 – quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means.
	●	Level 3 – unobservable inputs for the asset or liability, typically reflecting management's estimate of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore, determined using model-based techniques, including discounted cash flow models.

Assets and liabilities measured at fair value on a recurring basis.

The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level of input that is significant to the measurement in its entirety.

The Company did

not

have any assets or liabilities that are measured at fair value on a recurring basis as of

March 31, 2021

December 31, 2020.

Assets and liabilities measured at fair value on a nonrecurring basis.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are

not

measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. Specifically, (i) stock-based compensation is measured at fair value on the date of grant based on Level

inputs based upon market data, (ii) the oil and natural gas properties of HighPeak Assets II that were contributed to the Predecessor discussed further and in more detail in Note

were measured at current estimated fair value using Level

inputs based upon market conditions in the area, and (iii) the estimates and fair value measurements used for the evaluation of proved property for potential impairment using Level

inputs based upon market conditions in the area. The Company assesses the recoverability of the carrying amount of certain assets and liabilities whenever events or changes in circumstances indicate the carrying amount of an asset or liability

may

not

be recoverable. These assets and liabilities can include inventories, proved and unproved oil and natural gas properties and other long-lived assets that are written down to fair value when they are impaired or held for sale. The Company did

not

record any impairments to proved or unproved oil and natural gas properties for the periods presented in the accompanying condensed consolidated and combined financial statements.

The Company has other financial instruments consisting primarily of cash equivalents, accounts receivable, accounts payable, long-term debt and other current assets and liabilities that approximate fair value due to the nature of the instrument and their relatively short maturities.

Impact of the COVID-

pandemic on certain assets and liabilities measured at fair value on a nonrecurring basis.

Proved Properties.

The Company performs assessments of its proved oil and natural gas properties accounted for under the successful efforts method of

accounting whenever events or circumstances indicate that the carrying value of those assets

may

not

The Company performed an impairment assessment of its proved oil and natural gas properties as of

March 31, 2021

and

December 31, 2020

and determined that its proved oil and natural gas properties were

not

impaired. The primary factors that

may

affect estimates of future cash flows for the Company's proved oil and natural gas properties are (i) future reserve adjustments, both positive and negative, to proved reserves and risk-adjusted probable and possible reserves, (ii) results of future drilling activities, (iii) management's price outlooks and (iv) increases or decreases in production and capital costs.

There is significant uncertainty surrounding the long-term impact to global oil demand due to the effects of the COVID-

pandemic. It is reasonably possible that the carrying value of the Company's proved oil and natural gas properties could exceed their estimated fair value resulting in the need to impair their carrying values in the future. If incurred, an impairment of the Company's proved oil and natural gas properties could have a material adverse effect on the Company's financial condition and results of operations.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 5 - Exploratory Well Costs

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Exploratory Well Costs [Text Block]

NOTE

Exploratory Well Costs

The Company capitalizes exploratory well and project costs until a determination is made that the well or project has either found proved reserves, is impaired or is sold. The Company's capitalized exploratory well and project costs are included in proved properties in the condensed consolidated balance sheets. If the exploratory well or project is determined to be impaired, the impaired costs are charged to exploration and abandonments expense.

The changes in capitalized exploratory well costs are as follows (in thousands):

	Three Months Ended March 31,
	2021			2020
	Successor			Predecessor
Beginning capitalized exploratory well costs	$	32,592		$	11,427
Additions to exploratory well costs		42,098			46,865
Reclassification to proved properties		(67,445	)		(17,315	)
Exploratory well costs charged to exploration and abandonment expense		-			-
Ending capitalized exploratory well costs	$	7,245		$	40,977

All capitalized exploratory well costs have been capitalized for less than

one

year based on the date of drilling.

Note 6 - Long-term Debt	3 Months Ended
Note 6 - Long-term Debt	Mar. 31, 2021
Notes to Financial Statements
Long-term Debt [Text Block]	Note 6. Long-Term Debt Revolving Credit Facility . In December 2020, the Company entered into a revolving credit facility with Fifth Third Bank, National Association (“Fifth Third”) as the administrative agent and sole lender (“Revolving Credit Facility”) that matures on June 17, 2024. The Revolving Credit Facility has an initial borrowing base of $40 million. The Company elected to reduce the aggregate elected commitments under the Revolving Credit Facility to $20 million. The borrowing capacity under the Revolving Credit Facility is equal to the lowest of (i) the borrowing base (which currently stands at $40.0 million), (ii) the aggregate elected commitments (which currently stand at $20.0 million) and (iii) $500.0 million. As of March 31, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest, at the option of the Company, based on (a) a rate per annum equal to the higher of (i) the prime rate announced from time to time by Fifth Third, (ii) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System during the last preceding business day plus 0.5 percent or (iii) the Adjusted LIBOR Rate, plus a margin (the “Applicable Margin”), which is currently 3.25 percent and is also determined by the Borrowing Base Utilization Percentage as defined in the Revolving Credit Facility. Letters of credit outstanding under the Revolving Credit Facility are subject to a per annum fee, representing the Applicable Margin plus 0.125 percent. The Company also pays commitment fees on undrawn amounts under the Revolving Credit Facility equal to 0.50 percent. Borrowings under the Revolving Credit Facility are secured by a first lien security interest on substantially all assets of the Company and its restricted subsidiaries, including mortgages on the Company's and its restricted subsidiaries' oil and natural gas properties. The Revolving Credit Facility is scheduled to have the borrowing base redetermined semiannually in April and October. Additionally, the Company and Fifth Third each have the option for a wild card evaluation between redeterminations. In March 2021, the Company's borrowing base and bank commitments under the Revolving Credit Facility were increased to $50 million, subject to finalization of customary documentation. The Revolving Credit Facility requires the maintenance of a ratio of total debt to EBITDAX, subject to certain adjustments, not to exceed 3.00 to 1.00 as of the last day of any fiscal quarter (commencing with the fiscal quarter ending June 30, 2021 since the Company has yet to borrow under the Revolving Credit Facility) and a current ratio, subject to certain adjustments of at least 1.00 to 1.00 as of the last day of any fiscal quarter. The Company has limited equity cure rights for a breach of the above-listed financial covenants. Additionally, the Revolving Credit Facility contains additional restrictive covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, incur additional indebtedness, incur additional liens, make investments and loans, enter into mergers and acquisitions, make or declare dividends and other payments, enter into certain hedging transactions, sell assets and engage in transactions with affiliates. The Revolving Credit Facility contains customary mandatory prepayments, including a monthly mandatory prepayment if the Consolidated Cash Balance (as defined in the Revolving Credit Agreement) is in excess of $20.0 million. In addition, the Revolving Credit Agreement is subject to customary events of default, including a change in control. If an event of default occurs and is continuing, the administrative agent or the majority of the lenders may accelerate any amounts outstanding and terminate lender commitments.

Note 7 - Asset Retirement Obligations

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Asset Retirement Obligation Disclosure [Text Block]

Note

Asset Retirement Obligations

The Company's asset retirement obligations primarily relate to the future plugging and abandonment of wells and related facilities. Market risk premiums associated with asset retirement obligations are estimated to represent a component of the Company's credit-adjusted risk-free rate that is utilized in the calculations of asset retirement obligations.

Asset retirement obligations activity is as follows (in thousands):

	Three Months Ended March 31,
	2021			2020
	Successor			Predecessor
Beginning asset retirement obligations	$	2,293		$	2,212
Liabilities incurred from new wells		163			97
Revision of estimates (a)		(10	)		-
Accretion of discount		35			34
Ending asset retirement obligations	$	2,481		$	2,343

(a) The revisions to the Company's asset retirement obligation estimates are primarily due to changes in estimated costs based on experience with the properties and their expected useful lives.

As of

March 31, 2021

and

December 31, 2020,

all asset retirement obligations are considered noncurrent and classified as such in the accompanying consolidated balance sheet.

Note 8 - Incentive Plans

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE

Incentive Plans

401

(k) Plan.

The HighPeak Energy Employees, Inc

401

(k) Plan (the

“401

(k) Plan”) is a defined contribution plan established under Section

401

of the Internal Revenue Code of

1986,

as amended (the "Code"). As of

October 1, 2020,

all regular full-time and part-time employees of the Company are eligible to participate in the

401

(k) Plan after

three

continuous months of employment with the Company. Participants

may

contribute up to

percent of their annual base salary into the

401

(k) Plan. Matching contributions are made to the

401

(k) Plan in cash by the Company in amounts equal to

100

percent of a participant's contributions to the

401

(k) Plan up to

four

percent of the participant's annual base salary (the “Matching Contribution”). Each participant's account is credited with the participant's contributions, Matching Contributions and allocations of the

401

(k) Plan's earnings. Participants are fully vested in their account balances at their eligibility date. During the

three

months ended

March 31, 2021

and

2020,

the Company contributed

$56,000

and

zero

to the

401

(k) Plan, respectively.

Long-Term Incentive Plan.

The Company's

2020

Long-Term Incentive Plan (“LTIP”) provides for the granting of stock awards, stock options, dividend equivalents and substitute awards to directors, officers and employees of the Company. The number of shares available for grant pursuant to awards under the LTIP are as follows:

	March 31, 2021
Approved and authorized awards		11,907,006
Awards granted under plan		(9,767,995	)
Awards available for future grant		2,139,011

Stock Options.

Stock options were granted to employees on

August 24, 2020.

Stock-based compensation expense related to the Company's stock options for the

three

months ended

March 31, 2021

and

2020

was

$966,000

and

zero

, respectively, and as of

March 31, 2021

and

December 31, 2020

there was

$2.9

million and

$3.8

million, respectively, of unrecognized stock-based compensation expense related to unvested stock-based compensation awards. The unrecognized compensation expense will be recognized on a straight-line basis over the remaining vesting periods of the awards, which is a period of less than

two

years.

The Company estimates the fair values of stock options granted on the grant date using a Black-Scholes option valuation model, which requires the Company to make several assumptions. The expected term of options granted was determined based on the simplified method of the midpoint between the vesting dates and the contractual term of the options. The risk-free interest rate is based on the U.S. treasury yield curve rate for the expected term of the option at the date of grant and the volatility was based on the volatility of a peer group of companies with similar characteristics of the Company on the date of grant since the Company did

not

have any trading history. More detailed stock options activity and details are as follows:

	Stock Options			Exercise Price		Remaining Term in Years		Intrinsic Value (in thousands)
Outstanding at August 22, 2020		-
Awards granted		9,705,495		$	10.00
Outstanding at December 31, 2020		9,705,495		$	10.00		9.7	$	57,942
Exercised		(154,268	)	$	10.00
Outstanding at March 31, 2021		9,551,227		$	10.00		9.4	$	-

Vested at December 31, 2020		7,204,163		$	10.00		9.7	$	43,009
Exercisable at December 31, 2020		7,204,163		$	10.00		9.7	$	43,009

Vested at March 31, 2021		7,049,895		$	10.00		9.4	$	-
Exercisable at March 31, 2021		7,049,895		$	10.00		9.4	$	-

Stock Issued to Directors.

Stock was issued to the outside directors of the Company in

November 2020

in the amount of

12,500

shares for each outside director, totaling

62,500

shares. There were

restrictions of these shares. Therefore stock-based compensation expense was recognized immediately upon the issuance of these shares in the amount of

$302,000

which was based upon the closing price of the stock on the date the stock issuance was approved by the board of directors of the Company.

Note 9 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

Commitments and Contingencies

Leases.

The Company adopted ASC Topic

842,

“Leases” electing the transition method which permits entities to change the date of initial application to the beginning of the year of adoption and to recognize the effects of applying the new standard as a cumulative-effect adjustment to the opening balance of retained earnings. The Company elected this transition approach, however the cumulative impact of adoption in the opening balance of retained earnings as of

January 1, 2020

was

zero

. Therefore, as of

March 31, 2021

and

December 31, 2020

the Company had operating right-of-use assets totaling

$371,000

and

$506,000,

respectively, included in other noncurrent assets and operating lease liabilities totaling

$374,000

and

$508,000,

respectively,

$322,000

and

$430,000,

respectively, of which are included in other current liabilities and

$52,000

and

$78,000,

respectively, are included in other noncurrent liabilities on the accompanying condensed consolidated balance sheets. The Company does

not

currently have any finance right-of-use leases. Maturities of the operating lease obligations are as follows (in thousands):

	March 31, 2021
Remainder of 2021	$	328
2022		53
Total lease payments		381
Less present value discount		(7	)
Present value of lease liabilities	$	374

Legal actions.

From time to time, the Company

may

be a party to various proceedings and claims incidental to its business. While many of these matters involve inherent

uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will

not

have a material adverse effect on the Company's consolidated financial position as a whole or on its liquidity, capital resources or future annual results of operations. The Company records reserves for contingencies when information available indicates that a loss is probable, and the amount of the loss can be reasonably estimated.

Indemnifications.

The Company has agreed to indemnify its directors, officers and certain employees and agents with respect to claims and damages arising from acts or omissions taken in such capacity, as well as with respect to certain litigation.

Environmental.

Environmental expenditures that relate to an existing condition caused by past operations and that have

future economic benefits are expensed. Environmental expenditures that extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. Liabilities for expenditures that will

not

qualify for capitalization are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated. Such liabilities are undiscounted unless the timing of cash payments for the liability is fixed or reliably determinable. Environmental liabilities normally involve estimates that are subject to revision until settlement or remediation occurs.

Salt-Water Disposal Commitments.

The Company has committed to deliver a total of

5.5

MMBbl of produced water for disposal with

two

different

third

-party salt-water disposal companies, including

2.5

MMBbl between

September 30, 2020

and

September 30, 2021

and

3.0

MMBbl between

July 24, 2020

and

July 24, 2022.

As of

March 31, 2021,

the Company has delivered approximately

2.1

MMBbl and

1.7

MMBbl, respectively under the

two

agreements. Both agreements require a payment for any volumes

not

delivered should the Company

not

perform under the agreements, indicating a remaining monetary commitment of approximately

$760,000

as of

March 31, 2021.

Given the current production levels coupled with the wells planned to come on production during the remainder of

2021

and in to

2022,

the Company expects to meet the volume commitments under these agreements.

Note 10 - Related Party Transactions	3 Months Ended
Note 10 - Related Party Transactions	Mar. 31, 2021
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	NOTE 10. Related Party Transactions General and Administrative Expenses. The general partner of HPK LP utilized HighPeak Energy Management, LLC (the “Management Company”) to provide services and assistance to conduct, direct and exercise full control over the activities of HPK LP per its Partnership Agreement. However, the Management Company is funded via payments from the parent companies of HighPeak I and HighPeak II pursuant to their respective Limited Partnership Agreements, as amended. Therefore, HPK LP reimbursed the parent companies of HighPeak I and HighPeak II for actual costs incurred by the Management Company. During the three months ended March 31, 2020, HPK LP paid $1.5 million each to the parent companies of HighPeak I and HighPeak II of which $2.2 million is included in general and administrative expenses in the accompanying results of operations for the three months ended March 31, 2020. Effective upon closing of the HighPeak business combination, the Management Company is no longer being paid by the Company as all costs directly attributable to the Company are paid by the Company going forward.

Note 11 - Major Customers	3 Months Ended
Note 11 - Major Customers	Mar. 31, 2021
Notes to Financial Statements
Concentration Risk Disclosure [Text Block]	NOTE 11. Major Customers Lion Oil Trading and Transportation, LLC (“Lion”) purchased approximately 96% of the Company's crude oil, NGL and natural gas during the three months ended March 31, 2021. Enlink Crude Purchasing, LLC purchased approximately 88% of the Company's crude oil, NGL and natural gas during the three months ended March 31, 2020. Based on the current demand for oil and natural gas and the availability of other purchasers, management believes the loss of these major purchasers would not have a material adverse effect on our financial condition and results of operations because crude oil and natural gas are fungible products with well-established markets and numerous purchasers.

Note 12 - Income Taxes

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

12.

Income Taxes

March 27, 2020,

the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company continues to examine how the CARES Act

may

impact its business, results of operations, financial condition and liquidity.

The Company's income tax expense attributable to income from operations consisted of the following (in thousands):

	Three Months Ended March 31, 2021
Current tax expense	$	-
Deferred tax expense		1,115
Income tax expense	$	1,115

The reconciliation between the income tax expense computed by multiplying pre-tax income by the U.S. federal statutory rate and the reported amounts of income tax expense is as follows (in thousands, except rate):

	Three Months Ended March 31, 2021
Income tax expense at U.S. federal statutory rate	$	1,230
Limited tax benefit due to stock-based compensation		(109	)
Other		(6	)
Income tax expense	$	1,115
Effective income tax rate	19.0		%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows as of

March 31, 2021

and

December 31, 2020 (

in thousands):

	March 31, 2021			December 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$	15,300		$	9,725
Stock-based compensation		3,234			3,124
Other		31			31
Less: Valuation allowance		-			-
Net deferred tax assets		18,565			12,880
Deferred tax liabilities:
Oil and natural gas properties, principally due to differences in basis and depreciation and the deduction of intangible drilling costs for tax purposes		(58,578	)		(51,778	)
Net deferred tax liabilities	$	(40,013	)	$	(38,898	)

The effective income tax rate differs from the U.S. statutory rate of

percent primarily due to permanent differences between GAAP income and taxable income. Periods prior to

August 22, 2020

are

not

shown because the Predecessors were treated as partnerships for U.S. federal income tax purposes and therefore do

not

record a provision for U.S. federal income tax because the partners of the Predecessors report their share of the Predecessors' income or loss on their respective income tax returns. The Predecessors are required to file tax returns on Form

1065

with the IRS. The

2017

through

2020

tax years remain open to examination.

As required by ASC Topic

740,

“Income Taxes,” (“ASC

740”

) the Company uses reasonable judgments and makes estimates and assumptions related to evaluating the probability of uncertain tax positions. The Company bases its estimates and assumptions on the potential liability related to an assessment of whether the income tax position will “more likely than

not”

be sustained in an income tax audit. Based on that analysis, the Company believes the Company has

not

taken any material uncertain tax positions, and therefore has

not

recorded an income tax liability related to uncertain tax positions. However, if actual results materially differ, the Company's effective income tax rate and cash flows could be affected in the period of discovery or resolution. The Company also reviews the estimates and assumptions used in evaluating the probability of realizing the future benefits of the Company's deferred tax assets and records a valuation allowance when the Company believes that a portion or all the deferred tax assets

may

not

be realized. If the Company is unable to realize the expected future benefits of its deferred tax assets, the Company is required to provide a valuation allowance. The Company uses its history and experience, overall profitability, future management plans, tax planning strategies, and current economic information to evaluate the amount of valuation allowance to record. As of

March 31, 2021

and

December 31, 2020,

the Company has

not

recorded a valuation allowance for deferred tax assets arising from its operations because the Company believes they meet the “more likely than

not”

criteria as defined by the recognition and measurement provisions of ASC

740.

However, the Company

may

not

realize the

$18.6

million and

$12.9

million in deferred tax assets it has as of

March 31, 2021

and

December 31, 2020,

respectively, if the estimates and assumptions used in evaluating the probability of realizing the future benefits of the Company's deferred tax assets change, which would affect the Company's effective income tax rate and cash flows in the period of discovery or resolution.

December 27, 2020,

the Consolidated Appropriations Act was signed into law, an omnibus spending bill to fund the federal government that also includes an array of COVID-related tax relief for individuals and businesses. The tax-related measures contained in the Consolidated Appropriations Act revise and expand provisions enacted earlier in the year by the Families First Coronavirus Response Act and the CARES Act. The Consolidated Appropriations Act also extends a number of expiring tax provisions. Additionally, the Act provides for a

100%

deduction for certain business meals incurred in calendar years

2021

and

2022,

which were deductible at

50%

for the year ending

December 31, 2020.

In addition, on

March 11, 2021,

the American Rescue Plan Act was signed into law, which includes additional COVID-related tax relief for individuals and businesses. The Company determined that income tax effects related to the passage of the Consolidated Appropriations Act and the American Rescue Plan Act were

not

material to the financial statements for the

three

months ended

March 31, 2021.

The Company is also subject to Texas Margin Tax. The Company realized

Texas Margin Tax in the accompanying condensed consolidated and combined financial statements as we do

not

anticipate owing any Texas Margin Tax for any periods.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Note 13 - Earnings Per Share

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

13.

Earnings Per Share

The Company uses the treasury stock method of calculating earnings per share because certain of the Company's unvested stock-based awards qualify as participating securities.

The Company's basic earnings per share attributable to common stockholders is computed as (i) net income as reported attributable to common stockholders, (ii) less participating basic earnings (iii) divided by weighted average basic common shares outstanding. The Company's diluted earnings per share attributable to common stockholders is computed as (i) basic earnings attributable to common stockholders, (ii) plus reallocation of participating earnings (iii) divided by weighted average diluted shares outstanding. The components of basic and diluted earnings per share attributable to common stockholders are as follows (in thousands):

	Successor
	Three Months Ended March 31, 2020
Net income attributable to common stockholders	$	4,744
Participating share-based earnings (a)		-
Basic and diluted net income attributable to common stockholders	$	4,744

Basic weighted average shares outstanding		92,592
Dilution attributable to stock-based compensation awards		2,890
Diluted weighted average shares outstanding		95,482

(a)

Participating earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unexercised stock option awards do

not

participate in undistributed net losses as they are

not

contractually obligated to do so.

The calculation for weighted average shares reflects shares outstanding over the reporting period based on the actual number of days the shares were outstanding.

Note 14 - Stockholders' Equity (Successor)	3 Months Ended
Note 14 - Stockholders' Equity (Successor)	Mar. 31, 2021
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	NOTE 14. Stockholders ' Equity (Successor) At March 31, 2021 and December 31, 2020, the Company had 92,675,898 and 91,967,565 shares of common stock outstanding, respectively, 9,500,174 and 10,225,472 warrants outstanding, respectively, with an exercise price of $11.50 per share that expire on August 21, 2025 and 10,209,300 and 10,209,300 CVRs outstanding, respectively that give the holders a right to receive up to 2.125 shares of HighPeak Energy common stock per CVR to satisfy the Preferred Returns (with an equivalent number of shares of Company common stock held by HighPeak I and HighPeak II being collectively forfeited in connection therewith). As such, HighPeak I and HighPeak II have placed a total of 21,694,763 shares of common stock of the Company in escrow.

Note 15 - Partners' Capital (Predecessors)	3 Months Ended
Note 15 - Partners' Capital (Predecessors)	Mar. 31, 2021
Notes to Financial Statements
Partners' Capital Notes Disclosure [Text Block]	NOTE 15. Partners ' Capital (Predecessor) Allocation of partner ' s net profits and losses. Net income or loss and net gain or loss on investments of the Predecessor for the period are allocated among its partners in proportion to the relative capital contributions made to the Predecessor. The Predecessor realized a net loss of $80.8 million for the three months ended March 31, 2020. Partner ' s distributions. The proceeds distributable by the Predecessor (which shall include all proceeds attributable to the disposition of investments, net of expenses) is distributable in accordance with their respective Partnership Agreements.

Note 16 - Subsequent Events

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

16.

Subsequent Events

Commodity Derivative Financial Instruments.

April

2021,

the Company entered into commodity derivative financial instruments with Fifth Third to hedge a portion of its crude oil production. Details of the contracts are as follows:

	2021								2022
	Second Quarter		Third Quarter		Fourth Quarter		Total		First Quarter		Second Quarter		Total
Oil Price Swaps - WTI: (a)
Volume (Bbls)		152,500		230,000		230,000		612,500		225,000		75,000		300,000
Price per Bbl	$	61.40	$	61.40	$	61.40	$	61.40	$	61.40	$	61.40	$	61.40

(a)

These oil derivative contracts are settled based on the NYMEX – WTI calendar month average futures price.

Crude oil marketing contract.

May 2021,

the Company entered into a crude oil marketing contract with Lion as the purchaser and DKL Permian Gathering, LLC (“DKL”) as the gatherer and transporter. The contract includes the Company's current and future crude oil production from its horizontal wells in Flat Top where DKL will construct an oil gathering system and custody transfer meters to all the Company's central tank batteries. The oil gathering system and custody transfer meters are expected to be operational by

October 2021.

The contract contains a minimum volume commitment commencing

October 2021

based on the gross barrels delivered at the Company's central tank battery facilities and is

5,000

Bopd for the

first

year,

7,500

Bopd for the

second

year and

10,000

Bopd for the remaining

eight

years of the contract. However, the Company has the ability under the contract to cumulatively bank excess volumes delivered to offset future minimum volume commitments. The Company believes it will meet the minimum volume commitments based on the Company's current gross production levels and the current Flat Top development plan.

Natural gas purchasing replacement contract.

May 2021,

the Company entered into a replacement gas purchase contract with WTG Gas Processing, L.P. (“WTG”) as the gatherer, processor and purchaser of the Company's current and future gross natural gas production in Flat Top. The replacement contract provides the Company with improved natural gas and NGL pricing and requires WTG to expand its current low-pressure gathering system, which eliminates the need for in-field compression in Flat Top to accommodate the Company's increased natural gas production volumes based on the current plan of development. In exchange for the improved pricing terms and expansion of the gathering system, the Company will provide WTG with certain aid-in-construction payments. The replacement contract does

not

contain minimum volume commitments. Once operational, the expanded natural gas gathering system will reduce flaring and the emission of greenhouse gases.

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Presentation.

In the opinion of management, the unaudited interim condensed consolidated and combined financial statements of the Company as of

March 31, 2021

and

December 31, 2020

and for the

three

months ended

March 31, 2021 (

Successor), and for the

three

months ended

March 31, 2020 (

three

months ended

March 31, 2021

are

not

indicative of results for a full year.

-K for the year ended

December 31, 2020.

Consolidation, Policy [Policy Text Block]

Principles of consolidation.

The condensed consolidated and combined financial statements include the accounts of the Company and its wholly owned subsidiaries since

August 22, 2020,

and its Predecessors and their wholly owned subsidiaries since their acquisition or formation for all periods prior to

August 21, 2020.

All material intercompany balances and transactions have been eliminated. Certain reclassifications have been made to prior period amounts to conform to the current period's presentation.

Use of Estimates, Policy [Policy Text Block]

Use of estimates in the preparation of financial statements.

Preparation of the Company's unaudited interim condensed consolidated and combined financial statements in

not

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and cash equivalents.

The Company's cash and cash equivalents include depository accounts held by banks with original issuance maturities of

days or less. The Company's cash and cash equivalents are generally held in financial institutions in amounts that

may

Accounts Receivable [Policy Text Block]

Accounts receivable.

not

As of

March 31, 2021

and

December 31, 2020,

the Company's accounts receivables primarily consist of amounts due from the sale of crude oil, NGL and natural gas of

$13.4

million and

$4.2

million, respectively, and are based on estimates of sales volumes and realized prices the Company anticipates it will receive, a current U.S. federal income tax receivable of

$3.2

million and

$3.2

million, respectively, and joint interest receivables of

$311,000

and

$345,000,

March 31, 2021

and

December 31, 2020,

the Company had

allowance for doubtful accounts.

Subscription Receivable [Policy Text Block]

Subscription receivable.

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”)

505

“

Receivables for Issuance of Equity,

”

the Company recorded a subscription receivable as of

December 31, 2020

related to the exercise of warrants prior to

December 31, 2020

as the cash was collected before the financial statements were issued or available to be issued. Prior to

December 31, 2020,

312,711

warrants were exercised for cash proceeds of

$3.6

million. Due to the timing of the exercises, the shares underlying the warrants were issued in

December 2020

and the proceeds were received subsequent to

December 31, 2020.

The outstanding proceeds were recorded as a subscription receivable in the accompanying balance sheets as of

December 31, 2020.

There is

subscription receivable as of

March 31, 2021

as all cash related to exercises of warrants was received prior to the balance sheet date.

Inventory, Policy [Policy Text Block]

Inventory.

March 31, 2021

and

December 31, 2020

$109,000

and

$120,000,

respectively, and the Company has

not

recognized any valuation allowance to date.

Industry Specific Policies, Oil and Gas [Policy Text Block]

Oil and natural gas properties.

The Company does

not

Due to the capital-intensive nature and the geographical location of certain projects, it

may

not

for additional information.

not

materially impact the depletion rate of an amortization base. Generally,

may

not

expected to be sufficient to fully recover the costs invested in each project, the Company will recognize an impairment charge at that time.

Property, Plant and Equipment, Policy [Policy Text Block]

Other property and equipment, net.

Other property and equipment is recorded at cost. The carrying values of other property and equipment, net of accumulated depreciation of

$285,000

and

$237,000

as of

March 31, 2021

and

December 31, 2020,

respectively, are as follows (in thousands):

	March 31, 2021		December 31, 2020
Land	$	725	$	725
Information technology		250		292
Transportation equipment		39		41
Leasehold improvements		20		24
Field equipment		10		10
Total other property and equipment, net	$	1,044	$	1,092

Other property and equipment is depreciated over its estimated useful life on a straight-line basis. Land is

not

depreciated. Information technology is generally depreciated over

three

years, transportation equipment is generally depreciated over

five

years and field equipment is generally depreciated over

seven

years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the underlying terms of the associated leases.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

Debt, Policy [Policy Text Block]

Debt issuance costs.

The Company has paid a total of

$407,000

in debt issuance costs,

$2,000

of which was incurred during the

three

months ended

March 31, 2021,

related to its new revolving credit facility. Amortization based on the straight-line method over the term of the revolving credit facility which approximates the interest rate method was

$29,000

and

zero

during the

three

months ended

March 31, 2021

and

2020,

respectively. As of

March 31, 2021

and

December 31, 2020,

for additional information regarding the Company's new revolving credit facility.

Lessee, Leases [Policy Text Block]

Leases.

not

provide an implicit discount rate, the Company uses its incremental borrowing rate, which is determined based on information available at the commencement date of a lease. Leases

may

months or less are

not

recorded as lease right-of-use assets and liability. See Note

for additional information.

Accounts Payable and Accrued Liabilities, Policy [Policy Text Block]

Accounts payable and accrued liabilities.

Accounts payable and accrued liabilities as of

March 31, 2021

and

December 31, 2020

totaled approximately

$34.8

million and

$22.4

Asset Retirement Obligation [Policy Text Block]

Asset retirement obligations.

for additional information.

Revenue from Contract with Customer [Policy Text Block]

Revenue recognition

The Company follows FASB ASC

606,

“Revenue from Contracts with Customers,” (“ASC

606”

The Company enters into contracts with purchasers to sell its oil and natural gas production. Revenue on these contracts is recognized in accordance with the

five

-step revenue recognition model prescribed in ASC

606.

one

two

months after production. At

March 31, 2021

and

December 31, 2020,

the Company had receivables related to contracts with purchasers of approximately

$13.4

million and

$4.2

million, respectively.

Oil Contracts.

Natural Gas Contracts.

The Company does

not

disclose the value of unsatisfied performance obligations under its contracts with customers as it applies the practical exemption in accordance with ASC

606.

The exemption, as described in ASC

606

not

required.

Income Tax, Policy [Policy Text Block]

Income taxes.

not

(likelihood of greater than

percent) that some portion or all the deferred tax assets will

not

be realized. The Company has

not

established a valuation allowance as of

March 31, 2021

and

December 31, 2020.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than

not

for addition information.

none

to date.

Prior to

August 21, 2020,

the Predecessors did

not

1065

with the Internal Revenue Service (“IRS”). The

2017

2019

tax years remain open to examination.

The Predecessors recognize in their condensed consolidated and combined financial statements the effect of a tax position, if that position is more likely than

not

be sustained by examination. Accordingly, the Company has

not

recorded an income tax liability for uncertain tax benefits for periods prior to

August 21, 2020.

Under the new centralized partnership audit rules effective for tax years beginning after

2017,

the IRS assesses and collects underpayments of tax from the partnership instead of from each partner. The partnership

may

The Company is also subject to Texas Margin Tax. The Company realized

Texas Margin Tax in the accompanying condensed consolidated and combined financial statements as we do

not

anticipate owing any Texas Margin Tax for the periods presented.

Share-based Payment Arrangement [Policy Text Block]

Stock-based compensation.

Stock-based compensation for HighPeak Energy common stock issued to directors with

may

be, stock-based compensation will be recognized on a straight-line basis over the requisite service period of the respective award.

Segment Reporting, Policy [Policy Text Block]

Segments.

Based on the Company's organizational structure, the Company has

one

Effect of Covid-19 Pandemic [Policy Text Block]

Impact of the COVID-

Pandemic.

A novel strain of the coronavirus disease

2019

("COVID-

19"

) surfaced in late

2019

and spread around the world,

including to the United States. In

March 2020,

the World Health Organization declared COVID-

a pandemic, and the President of the United States declared the COVID-

outbreak a national emergency. The COVID-

pandemic significantly affected the global economy, disrupted global supply chains and created significant volatility in the financial markets. In addition, the COVID-

February 2020.

The length of this demand disruption is unknown, and there is significant uncertainty regarding the long-term impact of the effects of the COVID-

pandemic to global oil demand.

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of new accounting standards.

December 2019,

the FASB issued Accounting Standards Update (“ASU”)

No.

2019

12,

“

Simplifying the Accounting for Income Taxes (Topic

740

)

2019

January 1, 2021,

which did

not

have a material impact on the Company's condensed consolidated and combined financial statements.

New accounting pronouncements.

The Company has evaluated recently issued, but

not

yet effective, accounting pronouncements and does

not

believe they would have a material effect on the Company's condensed consolidated and combined financial statements.

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Property, Plant and Equipment [Table Text Block]

	March 31, 2021		December 31, 2020
Land	$	725	$	725
Information technology		250		292
Transportation equipment		39		41
Leasehold improvements		20		24
Field equipment		10		10
Total other property and equipment, net	$	1,044	$	1,092

Note 5 - Exploratory Well Costs (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Capitalized Exploratory Well Costs, Roll Forward [Table Text Block]

	Three Months Ended March 31,
	2021			2020
	Successor			Predecessor
Beginning capitalized exploratory well costs	$	32,592		$	11,427
Additions to exploratory well costs		42,098			46,865
Reclassification to proved properties		(67,445	)		(17,315	)
Exploratory well costs charged to exploration and abandonment expense		-			-
Ending capitalized exploratory well costs	$	7,245		$	40,977

Note 7 - Asset Retirement Obligations (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Change in Asset Retirement Obligation [Table Text Block]

	Three Months Ended March 31,
	2021			2020
	Successor			Predecessor
Beginning asset retirement obligations	$	2,293		$	2,212
Liabilities incurred from new wells		163			97
Revision of estimates (a)		(10	)		-
Accretion of discount		35			34
Ending asset retirement obligations	$	2,481		$	2,343

Note 8 - Incentive Plans (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Shares Available Under Long-term Incentive Plan [Table Text Block]

	March 31, 2021
Approved and authorized awards		11,907,006
Awards granted under plan		(9,767,995	)
Awards available for future grant		2,139,011

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Stock Options			Exercise Price		Remaining Term in Years		Intrinsic Value (in thousands)
Outstanding at August 22, 2020		-
Awards granted		9,705,495		$	10.00
Outstanding at December 31, 2020		9,705,495		$	10.00		9.7	$	57,942
Exercised		(154,268	)	$	10.00
Outstanding at March 31, 2021		9,551,227		$	10.00		9.4	$	-

Vested at December 31, 2020		7,204,163		$	10.00		9.7	$	43,009
Exercisable at December 31, 2020		7,204,163		$	10.00		9.7	$	43,009

Vested at March 31, 2021		7,049,895		$	10.00		9.4	$	-
Exercisable at March 31, 2021		7,049,895		$	10.00		9.4	$	-

Note 9 - Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

	March 31, 2021
Remainder of 2021	$	328
2022		53
Total lease payments		381
Less present value discount		(7	)
Present value of lease liabilities	$	374

Note 12 - Income Taxes (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Three Months Ended March 31, 2021
Current tax expense	$	-
Deferred tax expense		1,115
Income tax expense	$	1,115

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Three Months Ended March 31, 2021
Income tax expense at U.S. federal statutory rate	$	1,230
Limited tax benefit due to stock-based compensation		(109	)
Other		(6	)
Income tax expense	$	1,115
Effective income tax rate	19.0		%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	March 31, 2021			December 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$	15,300		$	9,725
Stock-based compensation		3,234			3,124
Other		31			31
Less: Valuation allowance		-			-
Net deferred tax assets		18,565			12,880
Deferred tax liabilities:
Oil and natural gas properties, principally due to differences in basis and depreciation and the deduction of intangible drilling costs for tax purposes		(58,578	)		(51,778	)
Net deferred tax liabilities	$	(40,013	)	$	(38,898	)

Note 13 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Successor
	Three Months Ended March 31, 2020
Net income attributable to common stockholders	$	4,744
Participating share-based earnings (a)		-
Basic and diluted net income attributable to common stockholders	$	4,744

Basic weighted average shares outstanding		92,592
Dilution attributable to stock-based compensation awards		2,890
Diluted weighted average shares outstanding		95,482

Note 16 - Subsequent Events (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Derivative Instruments [Table Text Block]

	2021								2022
	Second Quarter		Third Quarter		Fourth Quarter		Total		First Quarter		Second Quarter		Total
Oil Price Swaps - WTI: (a)
Volume (Bbls)		152,500		230,000		230,000		612,500		225,000		75,000		300,000
Price per Bbl	$	61.40	$	61.40	$	61.40	$	61.40	$	61.40	$	61.40	$	61.40

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

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+ Details

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual)	1 Months Ended	3 Months Ended		4 Months Ended	12 Months Ended	20 Months Ended
	Dec. 31, 2020 USD ($) shares	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Aug. 21, 2020 USD ($)
Accounts Receivable, after Allowance for Credit Loss, Current, Total	$ 7,722,000	$ 16,915,000		$ 16,915,000	$ 7,722,000
Income Taxes Receivable	3,200,000	3,200,000		3,200,000	3,200,000
Oil and Gas Joint Interest Billing Receivables	345,000	311,000		311,000	345,000
Accounts Receivable, Allowance for Credit Loss, Current	$ 0	0		0	0
Class of Warrant or Right, Exercised During Period (in shares) \| shares	312,711
Proceeds from Warrant Exercises	$ 3,600,000	5,466,000
Subscription Receivable, Current	3,596,000	0		0	3,596,000
Inventory, Raw Materials and Supplies, Gross, Total	120,000	109,000		109,000	120,000
Inventory, LIFO Reserve	0	0		0	0
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment, Ending Balance	237,000	285,000		285,000	237,000
Payments of Debt Issuance Costs		2,000
Amortization of Debt Issuance Costs		29,000
Accounts Payable and Accrued Liabilities, Current, Total	22,400,000	34,800,000		34,800,000	$ 22,400,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total		0		0
Income Tax Expense (Benefit), Total		$ 1,115,000				$ 0
Number of Operating Segments		1
Domestic Tax Authority [Member] \| Internal Revenue Service (IRS) [Member]
Open Tax Year					2017 2018 2019 2020
Minimum [Member]
Oil and Natural Gas Marketing Contracts, Term Over Which Consideration is Received from Purchaser (Month)		30 days
Maximum [Member]
Oil and Natural Gas Marketing Contracts, Term Over Which Consideration is Received from Purchaser (Month)					60 days
Revolving Credit Facility [Member]
Payments of Debt Issuance Costs		$ 2,000		407,000
Amortization of Debt Issuance Costs		$ 29,000	$ 0
Technology Equipment [Member]
Property, Plant and Equipment, Useful Life (Year)		3 years
Transportation Equipment [Member]
Property, Plant and Equipment, Useful Life (Year)		5 years
Field Equipment [Member]
Property, Plant and Equipment, Useful Life (Year)		7 years
Crude Oil, Natural Gas and Natural Gas Liquids [Member]
Accounts Receivable, after Allowance for Credit Loss, Current, Total	$ 4,200,000	$ 13,400,000		$ 13,400,000	$ 4,200,000

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies - Other Property and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Other property and equipment, net	$ 1,044	$ 1,092
Land [Member]
Other property and equipment, net	725	725
Technology Equipment [Member]
Other property and equipment, net	250	292
Transportation Equipment [Member]
Other property and equipment, net	39	41
Leasehold Improvements [Member]
Other property and equipment, net	20	24
Field Equipment [Member]
Other property and equipment, net	$ 10	$ 10

Note 3 - Acquisitions (Details Textual)		3 Months Ended
Note 3 - Acquisitions (Details Textual)	Jun. 01, 2019 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Oct. 31, 2019 USD ($)
Payments to Acquire Oil and Gas Property and Equipment, Total		$ 309,000	$ 3,300,000
Number of Vertical Producing Properties Acquired			3
Number of Salt Water Disposal Wells Acquired			2
HighPeak Energy Assets II, LLC [Member] \| Grenadier Acquisition [Member]
Payments to Acquire Businesses, Gross	$ 615,000,000
Business Combination, Escrow Deposit					$ 61,500,000
Business Combination, Escrow Deposit Not Credited Toward Purchase Price				$ 15,000,000
HPK, LP [Member] \| Grenadier Acquisition [Member]
Business Combination Terminated, Charge to Expense		$ 76,500,000

Note 4 - Fair Value Measurements (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Impairment of Oil and Gas Properties	$ 0	$ 0
Fair Value, Recurring [Member]
Assets, Fair Value Disclosure	0	0
Financial and Nonfinancial Liabilities, Fair Value Disclosure	$ 0	$ 0

Note 5 - Exploratory Well Costs (Details Textual)	3 Months Ended
Note 5 - Exploratory Well Costs (Details Textual)	Mar. 31, 2021
Capitalized Exploratory Well Costs, Maximum Term (Year)	1 year

Note 5 - Exploratory Well Costs - Exploratory Well Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Beginning capitalized exploratory well costs	$ 32,592	$ 11,427
Additions to exploratory well costs	42,098	46,865
Reclassification to proved properties	(67,445)	(17,315)
Exploratory well costs charged to exploration and abandonment expense
Ending capitalized exploratory well costs	$ 7,245	$ 40,977

Note 6 - Long-term Debt (Details Textual) - Fifth Third Bank, National Association [Member] $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2020 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 40,000	$ 50,000	$ 40,000
Line of Credit Facility, Commitment Fee Amount	20,000
Debt Instrument, Face Amount	500,000		500,000
Long-term Debt, Gross	$ 0	0	$ 0
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.50%
Debt Instrument, Covenant, Minimum Cash Threshold for Prepayment to be Due		$ 20,000
Revolving Credit Facility [Member] \| Maximum [Member]
Debt Instrument, Covenant, Maximum Total Debt to EBITDAX Ratio		3
Revolving Credit Facility [Member] \| Minimum [Member]
Debt Instrument, Covenant, Minimum Current Ratio		1
Revolving Credit Facility [Member] \| Fed Funds Effective Rate Overnight Index Swap Rate [Member]
Debt Instrument, Basis Spread on Variable Rate			0.50%
Revolving Credit Facility [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate			3.25%
Letter of Credit [Member] \| London Interbank Offered Rate (LIBOR), Applicable Margin [Member]
Debt Instrument, Basis Spread on Variable Rate			0.125%

Note 7 - Asset Retirement Obligations - Asset Retirement Obligations Activity (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2021

Mar. 31, 2020

Beginning asset retirement obligations

$ 2,293

$ 2,212

Liabilities incurred from new wells

163

Revision of estimates (a)

^[1]

(10)

Accretion of discount on asset retirement obligations

Ending asset retirement obligations

$ 2,481

$ 2,343

[1]	The revisions to the Company's asset retirement obligation estimates are primarily due to changes in estimated costs based on experience with the properties and their expected useful lives.

Note 8 - Incentive Plans (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
Note 8 - Incentive Plans (Details Textual) - USD ($)	Nov. 30, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Share-based Payment Arrangement, Expense	$ 302,000	$ 966,000
Each Outside Director [Member]
Stock Issued During Period, Shares, Issued for Services (in shares)	12,500
Outside Directors [Member]
Stock Issued During Period, Shares, Issued for Services (in shares)	62,500
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Expense		966,000	0
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount		$ 2,900,000		$ 3,800,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)		2 years
The 401K Plan [Member]
Defined Contribution Plan, Period of Employment for Eligibility (Month)		90 days
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent		80.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Match		100.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay		4.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount		$ 56,000	$ 0

Note 8 - Incentive Plans - Number of Shares Available for Grant Pursuant to Long-term Incentive Plan (Details) - shares	Mar. 31, 2021	Dec. 31, 2020
Awards granted under plan (in shares)	(9,551,227)	(9,705,495)
The 2020 Long-term Incentive Plan [Member]
Approved and authorized awards (in shares)	11,907,006
Awards granted under plan (in shares)	(9,767,995)
Awards available for future grant (in shares)	2,139,011

Note 8 - Incentive Plans - Stock Options Activity (Details) - USD ($)	3 Months Ended	4 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Outstanding balance (in shares)	9,705,495
Outstanding, weighted average exercise price (in dollars per share)	$ 10
Awards granted (in shares)		9,705,495
Awards granted, weighted average exercise price (in dollars per share)		$ 10
Outstanding, remaining term (Year)	9 years 146 days	9 years 255 days
Outstanding, intrinsic value		$ 57,942
Exercised (in shares)	(154,268)
Exercised, weighted average exercise price (in dollars per share)	$ 10
Outstanding balance (in shares)	9,551,227	9,705,495
Outstanding, weighted average exercise price (in dollars per share)	$ 10	$ 10
Vested (in shares)	7,049,895	7,204,163
Vested, weighted average exercise price (in dollars per share)	$ 10	$ 10
Vested, remaining term (Year)	9 years 146 days	9 years 255 days
Vested, intrinsic value		$ 43,009
Exercisable (in shares)	7,049,895	7,204,163
Exercisable, weighted average exercise price (in dollars per share)	$ 10	$ 10
Exercisable, remaining term (Year)	9 years 146 days	9 years 255 days
Exercisable, intrinsic value		$ 43,009

Note 9 - Commitments and Contingencies (Details Textual) bbl in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) bbl	Dec. 31, 2020 USD ($)	Jan. 01, 2020 USD ($)
Contractual Obligation, Total	$ 760,000
Retained Earnings (Accumulated Deficit), Ending Balance	$ (102,465,000)	$ (107,209,000)
Accounting Standards Update 2016-02 [Member] \| Cumulative Effect, Period of Adoption, Adjustment [Member]
Retained Earnings (Accumulated Deficit), Ending Balance			$ 0
The Salt-Water Disposal Supply Agreement [Member]
Number of Barrels to be Delivered (Barrel of Oil) \| bbl	5.5
The Salt-Water Disposal Supply Agreement Due on September 30, 2021
Number of Barrels to be Delivered (Barrel of Oil) \| bbl	2.5
Number of Barrels, Delivered (Barrel of Oil) \| bbl	2.1
The Salt-Water Disposal Agreement Due on July 24, 2022 [Member]
Number of Barrels to be Delivered (Barrel of Oil) \| bbl	3.0
Number of Barrels, Delivered (Barrel of Oil) \| bbl	1.7
Other Noncurrent Assets [Member]
Operating Lease, Right-of-Use Asset	$ 371,000	506,000
Other Liabilities [Member]
Operating Lease, Liability, Total	374,000	508,000
Other Current Liabilities [Member]
Operating Lease, Liability, Noncurrent	322,000	430,000
Other Noncurrent Liabilities [Member]
Operating Lease, Liability, Noncurrent	$ 52,000	$ 78,000

Note 9 - Commitments and Contingencies - Operating Lease Obligations (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Remainder of 2021	$ 328,000
2022	53,000
Total lease payments	381,000
Less present value discount	(7,000)
Other Liabilities [Member]
Operating Lease, Liability, Total	$ 374,000	$ 508,000

Note 10 - Related Party Transactions (Details Textual) - HPK, LP [Member] - Reimbursement of Costs Incurred by Management Company [Member] $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
HighPeak I [Member]
Related Party Transaction, Amounts of Transaction	$ 1.5
HighPeak I and HighPeak II [Member] \| General and Administrative Expense [Member]
Related Party Transaction, Amounts of Transaction	2.2
HighPeak II [Member]
Related Party Transaction, Amounts of Transaction	$ 1.5

Note 11 - Major Customers (Details Textual)	3 Months Ended
Note 11 - Major Customers (Details Textual)	Mar. 31, 2021	Mar. 31, 2020
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Lion Oil Trading and Transportation, LLC [Member]
Concentration Risk, Percentage	96.00%	88.00%

Note 12 - Income Taxes (Details Textual) - USD ($) $ in Thousands	4 Months Ended	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2020	Mar. 31, 2021
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%
Deferred Tax Assets, Valuation Allowance, Total	$ 0	$ 0	$ 0
Deferred Tax Assets, Net of Valuation Allowance, Total	$ 12,880	$ 12,880	$ 18,565
Domestic Tax Authority [Member] \| Internal Revenue Service (IRS) [Member]
Open Tax Year		2017 2018 2019 2020

Note 12 - Income Taxes - Income Tax Benefit and Effective Tax Rate (Details) - USD ($)	3 Months Ended		20 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Aug. 21, 2020
Current tax expense
Deferred tax expense	1,115,000
Income tax expense	$ 1,115,000		$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Note 12 - Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($)	3 Months Ended		20 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Aug. 21, 2020
Income tax expense at U.S. federal statutory rate	$ 1,230,000
Limited tax benefit due to stock-based compensation	(109,000)
Other	(6,000)
Income tax expense	$ 1,115,000		$ 0
Effective income tax rate	19.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Note 12 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Net operating loss carryforwards	$ 15,300	$ 9,725
Stock-based compensation	3,234	3,124
Other	31	31
Less: Valuation allowance	0	0
Net deferred tax assets	18,565	12,880
Oil and natural gas properties, principally due to differences in basis and depreciation and the deduction of intangible drilling costs for tax purposes	(58,578)	(51,778)
Net deferred tax liabilities	$ (40,013)	$ (38,898)

Note 13 - Earnings Per Share - Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders (Details) - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

Mar. 31, 2021

Mar. 31, 2020

Net income (loss)

$ 4,744

$ (80,831)

Participating share-based earnings (a)

^[1]

Basic and diluted net income attributable to common stockholders

$ 4,744

Basic weighted average shares outstanding (in shares)

92,592

Dilution attributable to stock-based compensation awards (in shares)

2,890

Diluted weighted average shares outstanding (in shares)

95,482

[1]	Participating earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unexercised stock option awards do not participate in undistributed net losses as they are not contractually obligated to do so.

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

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+ Details

Note 14 - Stockholders' Equity (Successor) (Details Textual) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Common Stock, Shares, Outstanding, Ending Balance (in shares)	92,675,898	91,967,565
Class of Warrant or Right, Outstanding (in shares)	9,500,174	10,225,472
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 11.50	$ 11.50
Common Stock, Capital Shares Reserved for Future Issuance (in shares)	21,694,763
Contingent Value Right [Member]
Class of Warrant or Right, Outstanding (in shares)	10,209,300	10,209,300
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right (in shares)	2.125	2.125

Note 15 - Partners' Capital (Predecessors) (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
HPK, LP [Member]
Net Income (Loss) Allocated to Limited Partners	$ 80.8

Note 16 - Subsequent Events (Details Textual) - Subsequent Event [Member]	1 Months Ended
	May 17, 2021 bbl
Crude Oil Marketing Contract, Barrels of Oil Per Day in First Year [Member]
Significant Supply Commitment, Minimum Volume Committed (Barrel of Oil)	5,000
Crude Oil Marketing Contract, Barrels of Oil Per Day in Second Year [Member]
Significant Supply Commitment, Minimum Volume Committed (Barrel of Oil)	7,500
Crude Oil Marketing Contract, Barrels of Oil Per Day in Remaining Eight Years [Member]
Significant Supply Commitment, Minimum Volume Committed (Barrel of Oil)	10,000

Note 16 - Subsequent Events - Commodity Derivative Contracts (Details) - Designated as Hedging Instrument [Member] - Subsequent Event [Member]

Apr. 30, 2021

$ / item

Crude Oil Derivative Swap Q2 2021 [Member]

Volume (Bbls)

152,500

Price per Bbl (in USD per Per Share)

61.4

^[1]

Crude Oil Derivative Swap Q3 2021 [Member]

Volume (Bbls)

230,000

Price per Bbl (in USD per Per Share)

61.4

^[1]

Crude Oil Derivative Swap Q4 2021 [Member]

Volume (Bbls)

230,000

Price per Bbl (in USD per Per Share)

61.4

^[1]

Crude Oil Derivative Swap 2021 [Member]

Volume (Bbls)

612,500

Price per Bbl (in USD per Per Share)

61.4

^[1]

Crude Oil Derivative Swap Q1 2022 [Member]

Volume (Bbls)

225,000

Price per Bbl (in USD per Per Share)

61.4

^[1]

Crude Oil Derivative Swap Q2 2022 [Member]

Volume (Bbls)

75,000

Price per Bbl (in USD per Per Share)

61.4

^[1]

Crude Oil Derivative Swap 2022 [Member]

Volume (Bbls)

300,000

Price per Bbl (in USD per Per Share)

61.4

^[1]

[1]	Participating earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unexercised stock option awards do not participate in undistributed net losses as they are not contractually obligated to do so.