UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: September 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File No. 000-51638

GULFSLOPE ENERGY, INC.

(Exact name of the issuer as specified in its charter)

Delaware	16-1689008
(State or Other Jurisdiction of	(I.R.S. Employer I.D. No.)
incorporation or organization)

~~1331~~1000 Main ~~Lamar~~ St., Suite ~~1665~~2300

Houston, Texas ~~77010~~ 77002

(Address of Principal Executive Offices)

(281) 918-4100

(Registrant’s Telephone Number)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001	GSPE	OTCPK

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting stock held by non-affiliates was $1110,~~916~~763,~~797~~549 based on 768,824,959 shares held by non-affiliates. These computations are based upon the closing sales price of $0.~~0155~~0140 for the common stock of the Company on the OTCPK of the Financial Industry Regulatory Authority, Inc. (“FINRA”) on March 31, ~~2021~~2022.

Indicate the number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:

Class		Outstanding as of December 2227, ~~2021~~2022
Common Stock, $0.001 par value per share		1,268,240,346

Documents incorporated by reference: None

TABLE OF CONTENTS

PART 1
	Cautionary Statement Regarding Forward-Looking Statements	3
ITEM 1.	Business	3
ITEM 1A.	Risk Factors	89
ITEM 1B.	Unresolved Staff Comments	19
ITEM 2.	Properties	19
ITEM 3.	Legal Proceedings	19
ITEM 4.	Mine Safety Disclosures	1920
PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2021
ITEM 6.	Selected Financial Data	2021
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	2524
ITEM 8.	Financial Statements and Supplementary Data	2625
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	4239
ITEM 9A.	Controls and Procedures	4339
ITEM 9B.	Other Information	4339
PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	4440
ITEM 11.	Executive Compensation	4541
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	4642
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	4743
ITEM 14.	Principal Accounting Fees and Services	4743
PART IV
ITEM 15.	Exhibits and Financial Statements Schedules	4844
ITEM 16.	Form 10-K Summary	4945
	Signatures	5046

PART I

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

In this Annual Report, references to “GulfSlope Energy,” “GulfSlope,” the “Company,” “we,” “us,” and “our” refer to GulfSlope Energy, Inc., the Registrant.

This Annual Report on Form 10-K (this “Annual Report” or this “Report”) contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical facts, included in this Annual Report are forward looking statements, including, without limitation, statements regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management. These forward-looking statements may be, but are not always, identified by their use of terms and phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “plan,” “will,” “shall,” “should,” “could” and “potential,” and similar terms and phrases, including when used in the negative. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere in this Annual Report including in Part I, Item 1A, “Risk Factors.” Other than as required under the securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.

ITEM 1. BUSINESS

General

GulfSlope Energy, Inc. is an independent crude oil and natural gas exploration and production company whose interests are concentrated in the United States Gulf of Mexico federal waters. We are a technically driven company, and we use our licensed 2.2 million acres of advanced three-dimensional (3-D) seismic data to identify, evaluate, and acquire assets with attractive economic profiles. GulfSlope Energy commenced commercial operations in March 2013. GulfSlope Energy was originally organized as a Utah corporation in 2004 and became a Delaware corporation in 2012.

We have focused our operations in the Gulf of Mexico because we believe this area provides us with favorable geologic and economic conditions, including multiple reservoir formations, comprehensive geologic databases, extensive infrastructure, relatively favorable royalty regime, and an attractive acquisition market and because our management and technical teams have significant experience and technical expertise in this geologic province. Additionally, we licensed 2.2 million acres of advanced 3-D seismic data, a significant portion of which has been enhanced by new, state-of-the-art reprocessing and noise attenuation techniques including reverse time migration depth imaging. We have used our broad regional seismic database and our reprocessing efforts to generate and high-grade oil and natural gas prospects. The use of our extensive seismic database, coupled with our ability, knowledge, and expertise to effectively reprocess this seismic data, allows us to further optimize our ~~drilling~~ operations and to effectively evaluate acquisition and joint venture opportunities. We consistently assess ~~our~~opportunities ~~prospect~~for ~~inventory~~drilling and producing property acquisitions in order to deploy capital as efficiently as possible. We have given preference to areas with water depths of 450 feet or less where production infrastructure already exists, which will allow for any discoveries to be developed rapidly and cost effectively with the goal to reduce economic risk while increasing returns.

Competitive Advantages

Experienced management. Our management team has a track record of finding, developing and producing oil and natural gas in various hydrocarbon producing basins including the U. S. Gulf of Mexico. Our team has significant experience in acquiring and operating oil and natural gas producing assets worldwide with particular emphasis on conventional reservoirs. We deployed a technical team with over 150 years of combined industry experience finding and developing oil and natural gas in the development and execution of our technical strategy. We believe the application of advanced geophysical techniques on a specific geographic area with unique geologic features such as conventional reservoirs whose trapping configurations have been obscured by overlying salt layers provides us with a competitive advantage.

Advanced seismic image processing. Commercial improvements in 3-D seismic data imaging and the development of advanced processing algorithms, including pre-stack depth, beam, and reverse time migration have allowed the industry to better distinguish hydrocarbon traps and identify previously unknown prospects. Specifically, advanced processing techniques improve the definition of the seismic data from a scale of time to a scale of depth, thus locating the images in three dimensions. The Company has invested significant technical person hours in the reprocessing and interpretation of seismic data. We believe the proprietary reprocessing and interpretation and the contiguous nature of our licensed 3-D seismic data gives us an advantage over other exploration and production companies operating in our core area.

Industry leading position in our core area. We have licensed 2.2 million acres of 3-D seismic data which covers over 440 Outer Continental Shelf (“OCS”) Federal lease blocks on the highly prolific Louisiana outer shelf, offshore Gulf of Mexico. We believe the proprietary and state-of-the-art reprocessing of our licensed 3-D seismic data, along with our proprietary and leading-edge geologic depositional and petroleum trapping models, gives us an advantage in identifying and high grading drilling and acquisition opportunities in our core area.

3 3

Technical Strategy

We believe that a major obstacle to identifying potential hydrocarbon accumulations globally has been the inability of seismic technology to accurately image deeper geologic formations because of overlying massive, extensive, and complex salt bodies. Large and thick laterally extensive subsurface salt layers highly distort the seismic ray paths traveling through them, which often has led to misinterpretation of the underlying geology and the potential major accumulations of oil and gas. We believe the opportunity exists for a technology-driven company to extensively apply advanced seismic acquisition and processing technologies, with the goal of achieving attractive commercial discovery rates for exploratory wells, and their subsequent appraisal and development, potentially having a very positive impact on returns on invested capital. These tools and techniques have been proven to be effective in ~~deep water~~ deepwater exploration and production worldwide, and we are using them to identify and drill targets below the salt bodies in an area of the shallower waters of the Gulf of Mexico where industry activity has largely been absent for over 20 years. GulfSlope management led the early industry teams in their successful efforts to discover and develop five new fields below the extensive salt bodies in our core area during the 1990’s, which have produced over 125 million barrels of oil equivalent.

Our technical approach to exploration and development ishas toutilized ~~deploy a team of~~ highly experienced geo-scientists who have ~~current and~~ extensive understanding of the geology and geophysics of the petroleum system within our core area, thereby decreasing the traditional timing and execution risks of advancing up a learning curve. For data licensing, re-processing and interpretation, ~~our~~the ~~technical~~Company ~~staff~~ has ~~prioritized~~historically prioritized specific geographic areas within our 2.2 million acres of seismic coverage, with the goal to optimize capital outlays.

Modern 3-D seismic datasets with acquisition parameters that are optimal for improved imaging at multiple depths are readily available in many of these sub-basins across our core area and can be licensed on commercially reasonable terms. The application of state-of-the-art seismic imaging technology is necessary to optimize delineation of prospective structures and to detect the presence of hydrocarbon-charged reservoirs below many complex salt bodies. An example of such a seismic technology is reverse time migration, which we believe to be the most accurate, fastest, and yet affordable, seismic imaging technology for critical depth imaging available today.

Lease and ~~Acquisition~~Partner Strategy

Our prospect identification and analytical strategy is based on a thorough understanding of the geologic trends within our core area. Exploration efforts have been focused in areas where lease acquisition opportunities are readily available. We entered into two master 3-D license agreements, together covering approximately 2.2 million acres and we have completed advanced processing on select areas within this licensed seismic area exceeding one million acres. We can expand this coverage and perform further advanced processing, both with currently licensed seismic data and seismic data to be acquired. We have sought to acquire and reprocess the highest resolution data available in the potential prospect’s direct vicinity. This includes advanced imaging information to further our understanding of a particular reservoir’s characteristics, including both trapping mechanics and fluid migration patterns. Reprocessing is accomplished through a series of model building steps that incorporate the geometry of the geology to optimize the final image. Our integration of existing geologic understanding and enhanced seismic processing and interpretation provides us with unique insights and perspectives on existing producing areas and especially underexplored formations below and adjacent to salt bodies that are highly prospective for hydrocarbon production.

We currently hold ~~two~~one ~~leases~~lease and wehave ~~are~~identified ~~evaluating~~multiple prospects that require the acquisition of additional leases in our core area. Our ~~leases~~lease ~~have~~has a five-year primary term and ~~are~~was ~~expiring~~granted ona ~~June~~three-year ~~30,~~additional ~~2022~~term and expires on October 31, 2025~~, respectively~~. BOEM’s regulatory framework provides multiple options for leaseholders to apply to receive extensions of lease terms under specified conditions. ~~GulfSlope is exploring all options contained in BOEM’s regulatory framework to extend the terms of the leases.~~ Additional prospective acreage can be obtained through lease sales, farm-in, or purchase. As is consistent with a prudent and successful exploration approach, we believe that additional seismic licensing, acquisition, processing, and/or interpretation may become highly advantageous, in order to more precisely define the most optimal drillable location(s), particularly for development of discoveries.

WeOur plan ~~continue~~has been to ~~evaluate~~partner ~~potential~~with ~~producing~~other ~~property~~entities ~~acquisitions~~which incould ~~the~~include ~~offshore~~oil ~~Gulf~~and gas companies and/or financial investors. Our goal is to diversify risk and minimize capital exposure to drilling costs. We expect a portion of ~~Mexico~~our drilling costs to be paid by our partners through these transactions, ~~taking~~in ~~advantage~~return offor our ~~highly~~previous ~~specialized~~investment ~~subsurface~~in prospect generation and ~~engineering~~delivery ~~capabilities~~of an identified prospect on acreage we control. Such arrangements are a commonly accepted industry method of proportionately recouping pre-drill cost outlays for seismic, ~~knowledge~~lease costs, and ~~expertise~~associated tointerpretation ~~identify attractive opportunities~~expenses. ~~Any~~We ~~merger~~cannot orassure ~~acquisition~~you, ishowever, ~~likely~~that towe will be able ~~financed~~to ~~through~~enter ~~the~~into ~~issuance~~any ofsuch ~~debt~~arrangements ~~and/or~~on ~~equity~~satisfactory ~~securities~~terms.

~~Drilling~~ Merger and ~~Other~~Acquisition ~~Exploratory and Development Strategies~~Strategy

~~Our~~We believe ~~plan~~there ~~has~~is ~~been~~an opportunity to ~~partner~~consolidate ~~with other entities which could include~~ oil and gas ~~companies~~assets ~~and/or~~located ~~financial~~in ~~investors.~~the ~~Our~~offshore ~~goal~~Gulf isof toMexico. ~~diversify~~Multiple ~~risk~~oil and ~~minimize~~gas companies ~~capital~~have ~~exposure~~explicitly tostated ~~exploration~~their ~~drilling~~intentions ~~costs.~~to Weexit ~~expect~~the aGulf ~~portion~~ of ~~our~~Mexico ~~exploration costs to be paid by our partners through these transactions, in return for our previous investment in prospect generation~~ and ~~delivery of an identified prospect on acreage~~ we ~~control.~~believe ~~Such~~that ~~arrangements~~GulfSlope ~~are~~is awell ~~commonly~~positioned to ~~accepted~~take ~~industry~~advantage ~~method~~ of ~~proportionately~~these ~~recouping~~opportunities ~~pre-drill~~due ~~cost~~to ~~outlays~~our ~~for~~highly ~~seismic,~~specialized ~~lease~~subsurface ~~costs,~~ and ~~associated~~engineering ~~interpretation expenses. We cannot assure you~~capabilities, ~~however,~~relevant ~~that we will be able to enter into any such arrangements on satisfactory terms. In any drilling~~operational experience, weand ~~expect~~regional ~~that~~knowledge ~~our retained working interest will be adjusted based upon factors such as geologic risk~~ and ~~well cost~~expertise. ~~Early~~We ~~monetization~~have ofdeveloped a ~~discovered~~significant ~~asset~~pipeline ~~or a portion~~ of apotential ~~discovered~~acquisition ~~asset~~opportunities with ~~is an option for~~ the ~~Company~~following ascharacteristics: a(i) ~~means~~strong tocash ~~fund~~flow, ~~development~~(ii) inventory of ~~additional~~low-risk ~~exploration~~capital projects, asand an(iii) ~~alternative~~manageable toplugging and ~~potential~~abandonment ~~equity or debt offerings~~liabilities. ~~However,~~In ifaddition ato ~~reasonable~~asset ~~value were not received from the market at the discovery stage~~acquisitions, ~~then~~ we ~~may~~are ~~elect~~also toevaluating ~~retain (subject to lease terms)~~ the ~~discovery~~combination ~~asset~~of ~~undeveloped,~~GulfSlope ~~until~~with aother GOM ~~reasonable~~oil ~~offer~~and isgas ~~received~~companies. inAny ~~line~~merger ~~with our perceived market value,~~ or weacquisition ~~may~~is ~~elect~~likely to ~~seek~~be ~~development~~financed ~~partners~~through onthe aissuance ~~promoted~~of ~~basis~~debt inand ~~order~~equity ~~to substantially reduce capital development requirements~~securities.

4 4

Oil and Natural Gas Industry

The oil and natural gas industry is a complex, multi-disciplinary sector that varies greatly across geographies. As a heavily regulated industry, operating conditions are subject to political regimes and changing legislation. Governments can either induce or deter investment in exploration and production, depending on legal requirements, fiscal and royalty structures and regulation. Beyond political considerations, exploration and production for hydrocarbons is an extremely risky business with multiple failure modes. Exploration and production wells require substantial investment and are long-term projects, sometimes exceeding twenty years. Regardless of the effort spent on an exploration or production prospect, success is difficult to attain. Even though modern equipment, including seismic equipment and advanced software has helped geologists find producing structures and map reservoirs, they do not guarantee any outcome. Drilling is the only method to ultimately determine whether a prospect will be productive, and even then, many complications can arise during drilling (e.g., those relating to drilling depths, pressure, porosity, weather conditions, permeability of the formation and rock hardness, among others).

Typically, there is a significant chance that exploratory wells will result in non-producing dry holes, leaving investors with the cost of seismic data and a dry well, which can total millions of dollars. Even if oil or gas is produced from a particular well, there is always the possibility that treatment, at additional cost, may be required to make production commercially viable. Further, production profiles decline over time. In summary, oil and gas exploration and production is an industry with high risks and high entry barriers.

Oil and natural gas prices can have a significant impact on the commercial feasibility of a project. Certain projects may become feasible with higher prices or, conversely, may falter with lower prices. Volatility in the price of oil, natural gas and other commodities has increased and is likely to continue in the future. This volatility complicates the assessment of the commercial viability of many oil and gas projects. Most governments have enforced strict regulations to uphold high standards of environmental awareness; thus, holding companies to a high degree of responsibility vis-a-vis protecting the environment. At this time, the Company does not have any production or proved oil or natural gas reserves.

Competition

We operate in a highly competitive environment for generating, evaluating and drilling prospects and for acquiring properties. Many of our competitors are major or large independent oil and natural gas companies that possess and employ financial resources well in excess of the Company’s resources. We believe that we may have to compete with other companies when acquiring leases or oil and gas properties. These additional resources can be particularly important in reviewing prospects and purchasing properties. Competitors may be able to evaluate and purchase a greater number of properties and prospects than our financial or personnel resources permit. Competitors may also be able to pay more for properties and prospects than we are able or willing to pay. Further, our competitors may be able to expend greater resources on the existing and changing technologies that we believe will impact attaining success in the industry. If we are unable to compete successfully in these areas in the future, our future growth may be diminished or restricted. Furthermore, these companies may also be better able to withstand the financial pressures of unsuccessful drill attempts, delays, sustained periods of volatility in financial or commodity markets and generally adverse global and industry-wide economic conditions and may be better able to absorb the burdens resulting from changes in relevant laws and regulations, which would adversely affect our operations.

Governmental Regulation

Our oil and natural gas operations are subject to various federal, state, and local governmental regulations. Matters subject to regulation include discharge permits for drilling operations, drilling and abandonment bonds, reports concerning operations, the spacing of wells, pooling of properties, occupational health and safety, and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and natural gas wells below actual production capacity in order to conserve supplies of oil and natural gas. The production, handling, storage, transportation, and disposal of oil and gas, by-products thereof, and other substances and materials produced or used in connection with oil and gas operations are also subject to regulation under federal, state, and local laws and regulations relating primarily to the protection of human health and the environment. State and local laws and regulations may affect the prices at which royalty owners are paid for their leases by requiring more stringent disclosure and certification requirements, adjusting interest rates for late payments, raising legal and administrative costs and imposing more costly default contractual terms. The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. Although the regulatory burden on the oil and natural gas industry increases our cost of doing business and, consequently, affects our profitability, these burdens generally do not affect us any differently or to any greater or lesser extent than they affect others in our industry with similar business models.

Our operations on federal oil and natural gas leases in the United States Gulf of Mexico are subject to regulation by the Bureau of Safety and Environmental Enforcement (“BSEE”), the Bureau of Ocean Energy Management (“BOEM”) and the Office of Natural Resources Revenue (“ONRR”), which are all agencies of the U.S. Department of the Interior (“DOI”). These leases contain relatively standardized terms and require compliance with detailed BSEE and BOEM regulations and orders issued pursuant to various federal laws, including the federal Outer Continental Shelf Lands Acts (“OCSLA”). These laws and regulations are subject to change, and many new requirements, including those related to safety, permitting and performance, have been imposed by BSEE and BOEM subsequent to the 2010 Deepwater Horizon incident. For offshore operations, lessees must obtain BOEM approval for exploration, development and production plans prior to the commencement of such operations. In addition to permits required from other agencies such as the U.S. Environmental Protection Agency (the “EPA”), lessees must obtain a permit from BSEE prior to the commencement of drilling and comply with regulations governing, among other things, engineering and construction specifications for production facilities, safety procedures, plugging and abandonment (“P&A”) of wells on the OCS, calculation of royalty payments and the valuation of production for this purpose, and removal of facilities.

5 5

The trend in the United States over the past decade has been for these governmental agencies to continue to evaluate and as necessary develop and implement new, more restrictive requirements,. ~~although~~President inBiden ~~recent~~has ~~years~~made ~~under~~tackling ~~the~~climate ~~Trump~~change, ~~Administration~~including ~~there~~the ~~have~~restriction or ~~been~~elimination ~~actions seeking to mitigate certain~~ of ~~those~~future ~~more~~greenhouse ~~rigorous~~gases ~~standards.~~(“GHGs”), ~~For~~a ~~example,~~priority in ~~2016,~~his ~~BSEE~~administration. ~~under~~The ~~the~~Biden ~~Obama~~ Administration ~~published~~has already aadopted ~~final~~several ~~rule~~executive onorders ~~well~~and ~~control~~is ~~that,~~expected ~~among other things, imposed rigorous standards relating~~ to ~~the~~pursue ~~design,~~additional ~~operation~~orders and ~~maintenance~~pursue ~~of blow-out preventers~~legislation, ~~real-time~~regulations ~~monitoring~~or ofother regulatory ~~deepwater,~~initiatives ~~high~~in ~~temperature,~~support ~~high~~of ~~pressure~~this ~~drilling~~regulatory ~~activities, and enhanced reporting requirements~~agenda. ~~Pursuant~~Notably, to President ~~Trump’s~~Biden ~~Executive~~issued ~~Orders~~an ~~dated~~executive ~~March~~order ~~28,~~in ~~2017,~~January ~~and~~2021 suspending ~~April~~new ~~28,~~leasing ~~2017,~~activities ~~BSEE~~for ~~initiated~~oil aand ~~review~~gas ofexploration ~~the~~and ~~well~~production ~~control~~on ~~regulations~~federal tolands ~~determine~~and ~~whether~~offshore ~~the~~waters ~~rules~~pending ~~are~~review and ~~consistent~~reconsideration ~~with the stated policy~~ of ~~encouraging~~federal ~~energy~~oil ~~exploration~~ and ~~production,~~gas ~~while~~permitting ~~ensuring that any such activity is safe~~ and ~~environmentally~~leasing ~~responsible~~practices. ~~One~~The ~~consequence~~suspension of ~~this~~these ~~review~~federal isleasing ~~that~~activities prompted onlegal ~~May~~action ~~15,~~by ~~2019,~~several ~~BSEE~~states ~~published~~against ~~final revisions to~~ the ~~existing~~Biden ~~2016 rule on well control that became effective on July 15~~Administration, ~~2019,~~resulting ~~and~~in ~~among~~issuance ~~other~~of ~~things,~~a ~~eliminated~~nationwide ~~the~~preliminary ~~requirement~~injunction by ~~for~~ a ~~BSEE-approved~~federal ~~verification~~district ~~organization~~court ~~for~~in ~~third~~June ~~parties~~2021, ~~providing~~effectively ~~certifications~~halting implementation of ~~certain~~the ~~critical~~leasing ~~well control functions~~suspension. InSubsequent ~~another~~federal ~~example~~litigation, however, ~~BSEE~~has ~~published~~impeded athe ~~final~~most ~~rule~~recent infederal ~~September~~oil ~~2018~~and ~~amending~~gas ~~its~~lease ~~production~~sale ~~safety~~in ~~systems regulations, which includes~~ the ~~imposition~~Gulf of ~~operational~~Mexico ~~and~~requiring ~~design standards and~~ the ~~removal~~DOI ~~of the requirement of offshore operators~~ to ~~certify~~conduct ~~through~~a annew ~~independent~~environmental analysis ~~third~~that ~~party~~takes ~~that~~into ~~their~~consideration ~~critical~~such ~~safety~~climate ~~and~~effects ~~pollution~~before ~~prevention~~holding ~~equipment~~another (esale.~~g.,~~ ~~subsea~~In ~~safety~~November ~~equipment~~2021, ~~including~~the ~~blowout~~DOI ~~preventers)~~released isits report ~~operational~~on federal oil and ~~functioning~~gas asleasing ~~designed~~and inpermitting ~~the~~practices. ~~most~~The ~~extreme~~report ~~conditions.~~includes ~~There~~recommendations ~~exists~~in ~~the~~respect ~~possibility~~to ~~that~~offshore ~~certain~~sector, including ofadjusting ~~these~~royalty ~~recent~~rates ~~mitigatory~~to ~~actions~~ensure ~~under~~that the ~~Trump~~full ~~Administration~~value ~~could~~of bethe ~~withdrawn~~tracts orbeing ~~revised~~leased inare ~~the~~captured, ~~future~~strengthening asfinancial assurance acoverage ~~result~~amounts ofthat ~~litigation~~are orrequired by aoperators, ~~different~~establishing ~~presidential~~a ~~administration~~“fitness to ~~impose~~operate” orcriteria ~~re-implement~~that ~~more~~companies would ~~stringent~~need ~~standards.~~to Wemeet ~~expect~~in ~~that~~respect ~~the~~of ~~Biden~~safety, ~~Administration~~environmental ~~may~~and ~~reconsider~~financial ~~rules~~responsibilities ~~and~~in ~~regulatory~~order ~~initiatives~~to ~~implemented~~operate ~~under~~on the ~~Trump Administration~~OCS. ~~Compliance~~Several of ~~with~~the ~~any~~report ~~added~~recommendations ~~and~~require ~~more~~action ~~stringent~~by ~~regulatory~~the ~~requirements~~Congress and ~~with~~cannot ~~existing~~be ~~environmental~~implemented ~~and~~unilaterally ~~spill regulations, together with uncertainties or inconsistencies in decisions and rulings~~ by ~~governmental~~the ~~agencies~~Biden ~~and~~Administration. Uncertainty ~~delays~~on infuture ~~the~~Biden ~~processing~~Administration ~~and~~actions ~~approval~~with ofregard ~~drilling~~to ~~permits~~offshore ~~and exploration, development,~~ oil ~~spill response~~ and ~~decommissioning~~gas ~~plans~~activities ~~and~~on ~~possible~~the ~~additional~~OCS ~~regulatory~~together ~~initiatives~~with ~~could~~the issuance ~~result~~of inany ~~difficult~~future ~~and~~executive ~~more~~orders ~~costly actions and adversely affect~~ or ~~delay~~adoption ~~new drilling~~ and ~~ongoing~~implementation ~~development~~of ~~efforts. Moreover~~laws, ~~these~~rules ~~governmental~~or ~~agencies~~initiatives ~~under~~that ~~the~~further ~~Biden~~restrict, ~~Administration~~delay or ~~are~~result ~~expected~~in tocancellation ~~continue to evaluate aspects~~ of ~~safety~~existing oil and ~~operational~~gas ~~performance~~activities inon the ~~United~~OCS ~~States~~could ~~Gulf~~have ofa ~~Mexico~~material ~~that~~adverse ~~could~~effect ~~result~~on inour ~~new,~~business ~~more restrictive requirements~~and operations.

Compliance with these regulatory actions, or any new laws, regulations or other legal initiatives could result in significant costs, including increased capital expenditures and operating costs, and could adversely impact our business. In addition, under certain circumstances, BSEE may require our operations on federal leases to be suspended or terminated. Any such suspension or termination could adversely affect our financial condition and operations.

Hurricanes in the Gulf of Mexico can have a significant impact on oil and gas operations on the OCS. The effects from past hurricanes have included structural damage to fixed production facilities, semi-submersibles and jack-up drilling rigs. The BOEM and the BSEE continue to be concerned about the loss of these facilities and rigs as well as the potential for catastrophic damage to key infrastructure and the resultant pollution from future storms. In an effort to reduce the potential for future damage, the BOEM and the BSEE have periodically issued guidance aimed at improving platform survivability by taking into account environmental and oceanic conditions in the design of platforms and related structures.

Environmental Regulation

The operation of our future oil and natural gas properties will be subject to numerous federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Applicable U.S. federal environmental laws include, but are not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), the Clean Water Act (“CWA”) and the Clean Air Act (“CAA”). These laws and regulations govern environmental cleanup standards, require permits for air, water, underground injection, waste disposal and set environmental compliance criteria. In addition, state and local laws and regulations set forth specific standards for drilling wells, the maintenance of bonding requirements in order to drill or operate wells, the spacing and location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, the plugging and abandoning of wells, and the prevention and cleanup of pollutants and other matters. Typically, operators maintain insurance against costs of clean-up operations, but are not fully insured against all such risks. Additionally, U.S. Congress and federal and state agencies frequently revise the environmental laws and regulations, and any changes that result in delay or more stringent and costly permitting, waste handling, disposal and clean-up requirements for the oil and gas industry could have a significant impact on our operating costs. There can be no assurance that future developments, such as increasingly stringent environmental laws or enforcement thereof, will not cause us to incur material environmental liabilities or costs.

Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal fines and penalties and the imposition of injunctive relief. Accidental releases or spills may occur in the course of the operations of our properties, and we cannot assure you that we will not incur significant costs and liabilities as a result of such releases or spills, including any third-party claims for damage to property, natural resources or persons.

Among the environmental laws and regulations that could have a material impact on the oil and natural gas exploration and production industry, and our business are the following:

6Waste Discharges. The CWA and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by an appropriately issued permit. Spill prevention, control and countermeasure requirements of federal laws mandate preparation of detailed plans that address spill response, including appropriate containment berms and similar structures to help prevent the contamination of navigable waters by a petroleum hydrocarbon tank spill, rupture or leak. In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for noncompliance with discharge permits or other requirements of the CWA and analogous state laws and regulations.

Waste Discharges. The CWA and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. The CWA and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by an appropriately issued permit. Spill prevention, control and countermeasure requirements of federal laws mandate preparation of detailed plans that address spill response, including appropriate containment berms and similar structures to help prevent the contamination of navigable waters by a petroleum hydrocarbon tank spill, rupture or leak. In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for noncompliance with discharge permits or other requirements of the CWA and analogous state laws and regulations. 6

Air Emissions —The CAA and comparable state statutes restrict the emission of air pollutants and affect both onshore and offshore oil and natural gas operations. New facilities may be required to obtain separate construction and operating permits before construction work can begin or operations may start, and existing facilities may be required to incur capital costs in order to remain in compliance. Also, the EPA has developed, and continues to develop, more stringent regulations governing emissions of toxic air pollutants, and is considering the regulation of additional air pollutants and air pollutant parameters. For example, in 2015, the EPA lowered the National Ambient Air Quality Standard (“NAAQS”) for ozone from 75 to 70 parts per billion. State implementation of the revised NAAQS could result in stricter permitting requirements, ~~delay~~delays or prohibit our ability to obtain such permits, and result in increased expenditures for pollution control equipment, the costs of which could be significant.

Climate Change — ~~Climate~~The threat of climate change continues to attract considerable public, ~~political~~governmental and scientific attention in the United States and in foreign countries. As a result, numerous ~~regulatory~~proposals ~~initiatives~~ have been made, ~~and are likely to continue to be made,~~ at the international, national, regional and state levels of government to monitor and limit existing emissions of ~~greenhouse gases (“~~GHG”) as well as to restrict or eliminate such future emissions. These ~~regulatory~~ efforts have included consideration of cap-and-trade programs, carbon taxes, GHG reporting and tracking programs, and regulations that directly limit GHG emissions from certain sources. ~~Additionally,~~In the ~~threat~~United ofStates, ~~climate~~no comprehensive climate change legislation has ~~resulted~~been inimplemented ~~increasing~~at ~~political~~the federal level. Under the Biden Administration, ~~litigation~~however, ~~and~~the ~~financial~~EPA ~~risks~~has ~~associated~~adopted ~~with~~regulations under the ~~production~~existing ofCAA ~~fossil~~that, ~~fuels~~among other things, impose preconstruction and ~~emission~~operating ofpermit ~~GHGs.~~requirements ~~The~~on ~~adoption~~certain large stationary sources, require the monitoring and ~~implementation~~annual reporting of ~~any~~GHG ~~federal~~emissions orfrom ~~state~~certain ~~legislation~~petroleum and natural gas system sources, ~~regulations~~and implement orNew ~~executive~~Source ~~orders~~Performance orStandards directing the ~~occurrence~~reduction of ~~any~~methane ~~litigation~~from certain new, modified or ~~financial~~reconstructed ~~developments~~facilities in ~~that~~the ~~impose~~oil ~~more~~and ~~stringent~~natural ~~requirements~~gas sector. Compliance with these rules or ~~bans~~other onsimilar ~~GHG-emitting~~rules ~~production~~implemented ~~activities~~in orthe ~~locations~~future ~~where~~could ~~such~~result ~~production~~in increased ~~activities~~compliance ~~may~~costs ~~occur~~on our operations. In November 2021, ~~impose~~the ~~liabilities~~EPA ~~for~~also ~~past~~issued ~~conduct~~a ~~relating~~proposed torule ~~GHG-emitting~~that ~~production~~would ~~activities,~~more orstringently regulate ~~limit~~methane oremissions ~~eliminate~~from crude oil and natural gas sources. ofThe ~~financing~~EPA ~~for~~plans ~~on-going~~to ~~production~~issue ~~operations~~a ~~could~~supplemental ~~require~~proposal usenhancing tothis proposed ~~incur~~rulemaking ~~increased~~in ~~costs~~2022 with the goal of ~~compliance~~issuing ora ~~costs~~final rule by the end of ~~consuming~~2022. Additionally, state implementation of revised air emission standards could result in stricter permitting requirements, delaying, limiting or prohibiting our ability to obtain such permits and ~~thereby~~result ~~reduce~~in ~~demand~~increased expenditures for ~~oil~~pollution ~~and~~control ~~natural~~equipment, ~~gas~~the costs of which could be significant.

~~Oil~~At the ~~Pollution~~international ~~Act.~~level, ~~The~~there ~~Oil~~exists ~~Pollution~~numerous ~~Act~~conventions ~~of 1990 (“OPA”)~~ and ~~regulations~~non-binding ~~thereunder~~commitments ~~impose a variety~~ of ~~requirements~~participating onnations ~~“responsible~~with ~~parties”~~goals ~~related to the prevention~~ of limiting ~~oil~~their ~~spills~~GHG emissions and ~~liability~~fossil ~~for~~fuel ~~damages~~subsidies. ~~resulting~~These ~~from~~include ~~such~~the ~~spills in~~ United ~~States~~Nations-sponsored ~~waters. A~~ “~~responsible~~Paris ~~party~~Agreement,” to ~~includes~~which ~~the~~President ~~owner~~Biden orrecommitted ~~operator~~the ofUnites ~~an onshore facility~~States, ~~pipeline~~thereby orrequiring ~~vessel, or~~ the ~~lessee~~United orStates ~~permittee~~to ofdetermine ~~the~~its ~~area~~emissions inreduction goals ~~which~~every anfive ~~offshore~~years ~~facility~~after ~~is located~~2020. ~~OPA~~The ~~assigns~~international ~~liability~~community toalso ~~each~~gathered ~~responsible~~in ~~party~~Glasgow ~~for~~in ~~oil~~November ~~cleanup~~2021 ~~costs~~at ~~and~~the a26th ~~variety~~ Conference of ~~public~~the ~~and~~Parties ~~private damages. While liability limits apply in some circumstances~~(“COP26”), aat ~~party~~which ~~cannot take advantage of liability limits if~~ the ~~spill~~United ~~was~~States ~~caused~~and byEuropean ~~gross~~Union ~~negligence~~jointly orannounced ~~willful~~the ~~misconduct~~launch ~~or resulted from violation~~ of a ~~federal~~Global ~~safety~~Methane Pledge, ~~construction~~an orinitiative ~~operating~~which ~~regulation.~~over If100 ~~the~~counties ~~party~~joined, ~~fails~~committing to ~~report~~ a ~~spill~~collective orgoal toof ~~cooperate~~reducing ~~fully~~global inmethane ~~the~~emissions ~~cleanup,~~by at ~~liability~~least ~~limits~~30 ~~likewise~~percent dofrom ~~not~~2020 ~~apply.~~levels ~~Few~~by ~~defenses~~2030, ~~exist~~including to“all ~~the~~feasible ~~liability~~reductions” ~~imposed~~in bythe ~~OPA~~energy sector. ~~OPA~~The ~~imposes~~impacts of ~~ongoing~~these ~~requirements~~orders, ~~on a responsible party~~pledges, ~~including~~agreements ~~the~~and ~~preparation~~any oflegislation ~~oil~~or ~~spill~~regulation ~~response~~promulgated ~~plans~~to ~~and~~fulfill ~~proof~~the ofUnited ~~financial~~States’ ~~responsibility~~commitments under tothe ~~cover~~Paris ~~environmental~~Agreement, ~~cleanup~~COP26, ~~and~~or ~~restoration~~other ~~costs~~international ~~that~~conventions ~~could~~cannot be ~~incurred~~predicted inat ~~connection~~this ~~with an oil spill~~time.

~~National~~Governmental, scientific ~~Environmental~~and ~~Policy~~public ~~Act.~~concern ~~Oil~~over ~~and~~the ~~natural~~threat ~~gas~~of ~~exploration~~climate ~~and~~change ~~production~~arising ~~activities~~from onGHG ~~federal~~emissions ~~lands~~has ~~are~~resulted ~~subject~~in toincreasing ~~the~~federal political ~~National~~risk ~~Environmental~~regarding ~~Policy~~climate ~~Act (“NEPA”)~~change. ~~NEPA~~Litigation ~~requires~~risks ~~federal~~are ~~agencies~~also increasing, ~~including~~as ~~the~~a ~~U.S.~~number ~~Department~~ of ~~Interior~~cities, tolocal ~~evaluate~~governments ~~major~~and ~~agency~~other plaintiffs ~~actions~~have ~~having~~sought ~~the potential~~ to ~~significantly~~bring ~~impact~~suit ~~the~~against ~~environment.~~oil ~~The~~and ~~process~~natural ~~involves~~gas ~~the~~companies ~~preparation~~in ofstate ~~either an environmental assessment~~ or ~~environmental~~federal ~~impact~~court, ~~statement~~alleging, ~~depending~~among onother ~~whether~~things, that ~~the~~such ~~specific~~companies ~~circumstances~~created ~~surrounding~~public ~~the~~nuisances ~~proposed~~by ~~federal~~producing ~~action~~fuels ~~will~~that ~~have~~contributed ato ~~significant~~global ~~impact~~warming oneffects, ~~the~~such ~~human~~as ~~environment.~~rising ~~The~~sea levels ~~NEPA~~and ~~process~~therefore ~~involves~~are ~~public~~responsible ~~input~~for ~~through~~roadway ~~comments,~~and ~~which~~infrastructure ~~can~~damages ~~alter~~as ~~the nature of~~ a ~~proposed~~result, ~~project~~or ~~either~~alleging bythat ~~limiting~~ the ~~scope~~companies have been aware of the ~~project~~adverse oreffects ~~requiring~~of ~~resource-specific~~climate ~~mitigation.~~change ~~NEPA~~for ~~decisions~~some ~~can~~time bebut ~~appealed~~defrauded ~~through~~their ~~the~~investors ~~court~~or ~~system,~~customers by ~~process~~failing ~~participants.~~to ~~This~~adequately disclose ~~process~~those ~~may~~impacts. ~~result~~We inare ~~delaying~~not ~~the~~currently ~~permitting~~a ~~and~~defendant ~~development~~in ofany ~~projects, increase the costs~~ of ~~permitting~~these ~~and~~lawsuits ~~developing~~but ~~some facilities and~~ could ~~result~~be innamed ~~certain instances~~ in ~~the~~actions ~~cancellation~~making ~~of existing leases~~similar allegations.

~~Worker~~Additionally, our ~~Safety.~~access ~~The~~to ~~Occupational~~capital ~~Safety~~may ~~and~~be ~~Health~~impacted ~~Act~~by ~~(“OSH~~climate ~~Act”)~~change policies. Stockholders and ~~comparable~~bondholders ~~state~~currently ~~statutes~~invested ~~regulate~~in fossil fuel energy companies such as ours but concerned about the ~~protection~~potential effects of climate change may elect in the ~~health~~future ~~and~~to ~~safety~~shift some or all of ~~workers~~their investments into non-fossil fuel energy related sectors. ~~The~~Institutional ~~OSH~~lenders ~~Act’s~~who ~~hazard~~provide ~~communication~~financing ~~standard~~to ~~requires~~fossil-fuel energy ~~maintenance~~companies ofalso ~~information~~have ~~about~~become ~~hazardous~~more ~~materials~~attentive ~~used~~to orsustainable ~~produced~~lending inpractices ~~operations~~that favor “clean” power sources, such as wind and ~~provision~~solar, making those sources more attractive, and some of ~~such~~them ~~information~~may elect not to ~~employees~~provide funding for fossil fuel energy companies. ~~Other~~Many ~~OSH~~of ~~Act~~the ~~standards~~largest ~~regulate~~U.S. ~~specific~~banks ~~worker~~have ~~safety~~made ~~aspects~~“net ofzero” ~~our~~carbon ~~operations.~~emission ~~Failure~~commitments and have announced that they will be assessing financed emissions across their portfolios and are taking steps to ~~comply~~quantify ~~with~~and ~~OSH~~reduce ~~Act~~those ~~requirements~~emissions. These ~~can~~and other developments in the financial sector could lead to some lenders and investors restricting access to capital for or divesting from certain industries or companies, including the ~~imposition~~oil ofand ~~penalties~~natural gas sector, or requiring that borrowers take additional steps to reduce their GHG emissions. Additionally, there is the possibility that financial institutions will be pressured or required to adopt policies that limit funding for fossil fuel energy companies.

~~Safe~~The OCSLA ~~Drinking~~authorized ~~Water~~the ~~Act~~DOI to regulate activities authorized by the BOEM in the Central and Western Gulf of Mexico. The ~~Safe~~EPA ~~Drinking~~has air ~~Water~~quality ~~Act~~jurisdiction ~~and~~over ~~comparable~~all ~~state~~other ~~statutes~~parts ~~may~~of ~~restrict~~the OCS. Under the ~~disposal~~OCSLA, ~~treatment~~DOI oris ~~release~~limited to regulating offshore emissions of criteria ~~water~~and ~~produced~~their orprecursor ~~used~~– ~~during~~pollutants ~~oil~~to ~~and~~the ~~gas~~extent ~~development.~~they ~~Subsurface~~significantly ~~emplacement~~affect the air quality of ~~fluids~~any ~~(including~~state. ~~disposal~~BSEE ~~wells~~conducts field orinspections ~~enhanced~~of ~~oil~~emission ~~recovery)~~sources isinstalled ~~governed~~on byoffshore ~~federal~~platforms orthat ~~state~~have ~~regulatory~~the ~~authorities~~potential ~~that~~to inemit ~~some~~regulated ~~cases,~~air ~~includes~~pollutants. The ~~the~~agency ~~state~~also ~~oil~~reviews BOEM mandated monitoring and ~~gas~~reporting ~~regulatory~~of ~~authority~~air oremission ~~the~~sources ~~state’s~~for ~~environmental~~compliance ~~authority~~with approved plan emission limits. ~~These~~BSEE may initiate measures to control and bring into compliance those operations determined to be in violation of applicable regulations ~~may~~or ~~increase~~plan ~~the~~conditions ~~costs~~by issuing Incidents of ~~compliance~~Noncompliance (“INC”) or recommending further enforcement action against potential violators.

Offshore Drilling. In 2011, the U.S. Department of Interior issued new rules designed to improve drilling and workplace safety in the U.S. Gulf of Mexico, and various congressional committees began pursuing legislation to regulate drilling activities and increase liability. The BOEM, BSEE and Office of National Resources Revenue are expected to continue to issue new safety and environmental guidelines or regulations for drilling in the U.S. Gulf of Mexico, and other regulatory agencies could potentially issue new safety and environmental guidelines or regulations in other geographic regions, and may take other steps that could increase the costs of exploration and production, reduce the area of operations and result in permitting delays. We are monitoring legislation and regulatory developments; however, it is difficult to predict the ultimate impact of any new guidelines, regulations or legislation. A prolonged suspension of drilling activity or permitting delays in the U.S. Gulf of Mexico and new regulations and increased liability for companies operating in this sector, whether or not caused by a new incident in the region, could adversely affect the business and planned operations of oil and gas companies. 7

7Oil Pollution Act. The Oil Pollution Act of 1990 (“OPA”) and regulations thereunder impose a variety of requirements on “responsible parties” related to the prevention of oil spills and liability for damages resulting from such spills in United States waters. A “responsible party” includes the owner or operator of an onshore facility, pipeline or vessel, or the lessee or permittee of the area in which an offshore facility is located. OPA assigns liability to each responsible party for oil cleanup costs and a variety of public and private damages. While liability limits apply in some circumstances, a party cannot take advantage of liability limits if the spill was caused by gross negligence or willful misconduct or resulted from violation of a federal safety, construction or operating regulation. If the party fails to report a spill or to cooperate fully in the cleanup, liability limits likewise do not apply. Few defenses exist to the liability imposed by OPA. OPA imposes ongoing requirements on a responsible party, including the preparation of oil spill response plans and proof of financial responsibility to cover environmental cleanup and restoration costs that could be incurred in connection with an oil spill.

~~Hazardous~~National Environmental ~~Substances~~Policy ~~and Wastes~~Act. ~~CERCLA,~~Oil ~~also~~and ~~known~~natural asgas ~~the~~exploration ~~“Superfund~~and ~~law,”~~production ~~imposes~~activities ~~liability,~~on ~~without~~federal ~~regard~~lands toare ~~fault~~subject orto the ~~legality~~National Environmental ofPolicy ~~the~~Act ~~original~~(“NEPA”). ~~conduct,~~NEPA onrequires ~~certain~~federal ~~classes~~agencies, ofincluding ~~persons~~the ~~that~~U.S. ~~are~~Department ~~considered~~of Interior, to beevaluate major ~~responsible~~agency ~~for~~actions having the ~~release~~potential ofto asignificantly ~~“hazardous~~impact ~~substance” into~~ the environment. ~~These~~The ~~persons~~process ~~include~~involves the ~~owner~~preparation ~~or operator~~ of ~~the~~either an ~~disposal~~environmental ~~site~~assessment or ~~sites~~environmental ~~where~~impact ~~the~~statement ~~release~~depending ~~occurred~~on ~~and~~whether ~~companies~~the ~~that~~specific ~~transported~~circumstances orsurrounding ~~disposed~~the proposed orfederal ~~arranged~~action ~~for~~will ~~the~~have ~~transport~~a orsignificant ~~disposal~~impact ofon the ~~hazardous~~human ~~substances~~environment. ~~found~~The atNEPA ~~the~~process ~~site.~~involves ~~Persons~~public ~~who~~input ~~are~~through comments, orwhich ~~were~~can ~~responsible~~alter ~~for~~the ~~releases~~nature of ~~hazardous~~a ~~substances~~proposed ~~under~~project ~~CERCLA~~either ~~may~~by belimiting ~~subject to joint and several liability for~~ the ~~costs~~scope of ~~cleaning up~~ the ~~hazardous~~project ~~substances~~or ~~that~~requiring ~~have~~resource-specific mitigation. ~~been~~NEPA ~~released~~decisions ~~into~~can ~~the~~be ~~environment~~appealed ~~and~~through ~~for~~the ~~damages~~court tosystem, ~~natural~~by ~~resources,~~process ~~and~~participants. itThis isprocess ~~not~~may ~~uncommon~~result ~~for~~in ~~neighboring~~delaying the ~~landowners~~permitting and ~~other~~development ~~third~~of ~~parties~~projects, toincrease ~~file~~the ~~corresponding~~costs ~~common~~of ~~law~~permitting ~~claims~~and ~~for~~developing ~~personal~~some ~~injury~~facilities and ~~property~~could ~~damage~~result ~~allegedly~~in certain ~~caused~~instances byin the ~~hazardous~~cancellation ~~substances~~of ~~released~~existing ~~into the environment~~leases.

~~Protected and Endangered Species~~Worker Safety. The ~~Endangered~~Occupational ~~Species~~Safety ~~Act (“ESA”) restricts activities that may affect federally identified endangered~~ and ~~threatened~~Health ~~species or their habitats. Additionally, the Migratory Bird Treaty~~ Act (“~~MBTA~~OSH Act”) ~~implements various treaties~~ and ~~conventions~~comparable ~~between~~state ~~the~~statutes ~~United~~regulate ~~States and certain other nations for~~ the protection of ~~migratory birds. Under~~ the ~~MBTA,~~health ~~the~~and ~~taking,~~safety ~~killing or possessing~~ of ~~migratory birds is unlawful without a permit~~workers. The ~~Marine~~OSH ~~Mammal Protection~~ Act’s ~~(“MMPA”)~~hazard ~~similarly~~communication ~~prohibits~~standard ~~the~~requires ~~taking~~maintenance of ~~marine~~information ~~mammals~~about hazardous ~~without~~materials ~~authorization.~~used ~~Additionally, the U.S. Fish and Wildlife Service (“FWS”) may make determinations on the listing of species as threatened~~ or ~~endangered~~produced ~~under the ESA and litigation with respect to the listing or non-listing of certain species may result~~ in ~~more fulsome protections for non-protected or lesser-protected species. We conduct~~ operations ~~on oil~~ and ~~natural~~provision ~~gas~~of ~~leases~~such ininformation ~~areas where certain species that are protected by the ESA, MBTA and MMPA are known~~ to ~~exist and where other species that could potentially be protected under these statutes are known to exist~~employees. ~~The~~Other ~~FWS~~OSH orAct ~~the~~standards ~~National~~regulate specific ~~Marine~~worker ~~Fisheries~~safety ~~Service~~aspects ~~may designate critical habitat that it believes is necessary for survival~~ of aour ~~threatened or endangered species~~operations. AFailure ~~critical habitat designation could result in further material restrictions~~ to ~~federal~~comply ~~land~~with ~~use~~OSH ~~and~~Act ~~may~~requirements ~~materially~~can ~~delay~~lead ~~or prohibit access~~ to ~~protected~~the ~~areas~~imposition ~~for~~of ~~oil and natural gas development~~penalties. ~~These statutes may result in operating restrictions or a temporary, seasonal or permanent ban in affected areas.~~

~~Employees~~Safe Drinking Water Act. The Safe Drinking Water Act and comparable state statutes may restrict the disposal, treatment or release of water produced or used during oil and gas development. Subsurface emplacement of fluids (including disposal wells or enhanced oil recovery) is governed by federal or state regulatory authorities that in some cases, includes the state oil and gas regulatory authority or the state’s environmental authority. These regulations may increase the costs of compliance.

WeOffshore Drilling. ~~currently~~In ~~have~~2011, ~~seven~~the ~~employees~~U.S. WeDepartment ~~utilize~~of ~~consultants~~Interior issued new rules designed to improve drilling and ~~contractors~~workplace safety in the U.S. Gulf of Mexico, asand ~~needed~~various congressional committees began pursuing legislation to regulate drilling activities and increase liability. The BOEM, BSEE and Office of National Resources Revenue are expected to ~~perform~~continue ~~strategic~~to issue new safety and environmental guidelines or regulations for drilling in the U.S. Gulf of Mexico, ~~technical~~and other regulatory agencies could potentially issue new safety and environmental guidelines or regulations in other geographic regions, ~~operational~~and may take other steps that could increase the costs of exploration and ~~administrative~~production, ~~functions~~reduce the area of operations and result in permitting delays. We are monitoring legislation and regulatory developments; however, it is difficult to predict the ultimate impact of any new guidelines, regulations or legislation. A prolonged suspension of drilling activity or permitting delays in the U.S. Gulf of Mexico and asnew ~~advisors~~regulations and increased liability for companies operating in this sector, whether or not caused by a new incident in the region, could adversely affect the business and planned operations of oil and gas companies.

~~Additional~~Hazardous Substances ~~Information~~and Wastes. CERCLA, also known as the “Superfund law,” imposes liability, without regard to fault or the legality of the original conduct, on certain classes of persons that are considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the owner or operator of the disposal site or sites where the release occurred and companies that transported or disposed or arranged for the transport or disposal of the hazardous substances found at the site. Persons who are or were responsible for releases of hazardous substances under CERCLA may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment and for damages to natural resources, and it is not uncommon for neighboring landowners and other third parties to file corresponding common law claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.

WeProtected and ~~file~~Endangered ~~Annual~~Species. ~~Reports~~The onEndangered ~~Form~~Species ~~10-K,~~Act ~~Quarterly~~(“ESA”) ~~Reports~~restricts onactivities ~~Form~~that ~~10-Q,~~may ~~Current~~affect ~~Reports~~federally onidentified endangered ~~Form~~and ~~8-K~~threatened species or their habitats. Additionally, ~~other~~the ~~reports~~Migratory Bird Treaty Act (“MBTA”) implements various treaties and ~~amendments~~conventions tobetween ~~those~~the ~~reports~~United ~~with~~States and certain other nations for the protection of migratory birds. Under the MBTA, the taking, killing or possessing of migratory birds is unlawful without a permit. The Marine Mammal Protection Act (“MMPA”) similarly prohibits the taking of marine mammals without authorization. Additionally, the U.S. ~~Securities~~Fish and ~~Exchange~~Wildlife Service ~~Commission~~ (“~~SEC~~FWS”). ~~Our~~may ~~reports~~make ~~filed~~determinations ~~with~~on the ~~SEC~~listing ~~are~~of ~~available~~species ~~free~~as ofthreatened ~~charge~~or endangered under the ESA and litigation with respect to the ~~general~~listing ~~public~~or ~~through~~non-listing ~~our~~of ~~website~~certain atspecies ~~www.gulfslope.com.~~may ~~These~~result ~~reports~~in ~~are~~more ~~accessible~~fulsome protections for non-protected or lesser-protected species. We conduct operations on ~~our~~oil ~~website~~and asnatural ~~soon~~gas asleases ~~reasonably~~in ~~practicable~~areas ~~after~~where ~~being~~certain ~~filed~~species ~~with,~~that orare ~~furnished~~protected ~~to,~~by the ~~SEC.~~ESA, ~~This~~MBTA and ~~Form~~MMPA ~~10-K~~are known to exist and ~~our~~where other ~~filings~~species ~~can~~that ~~also~~could potentially be ~~obtained~~protected ~~through~~under these statutes are known to exist. The FWS or the ~~SEC’s~~National ~~web~~Marine ~~site~~Fisheries atService ~~www~~may designate critical habitat that it believes is necessary for survival of a threatened or endangered species.~~sec~~ A critical habitat designation could result in further material restrictions to federal land use and may materially delay or prohibit access to protected areas for oil and natural gas development.~~gov.~~ ~~Information~~These onstatutes ~~our~~may ~~website~~result in isoperating ~~not~~restrictions or a ~~part~~temporary, ofseasonal ~~this~~or ~~Form~~permanent ~~10-K~~ban in affected areas.

~~ITEM 1A. RISK FACTORS~~ 8

Certain factors may have a material adverse effect on our business, financial condition, and results of operations. You should consider carefully the risks and uncertainties described below, in addition to other information contained in this Annual Report on Form 10-K, including our financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations and future prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment.Employees

~~Risks~~We currently ~~Related~~have six employees. We utilize consultants and contractors, as needed, to ~~Our~~perform ~~Business~~strategic, technical, operational and ~~Financial~~administrative ~~Condition~~functions, and as advisors.

Our business plan requires substantial additional capital, which we may be unable to raise on acceptable terms, if at all, in the future, which may in turn limit our ability to execute our business strategy.Additional Information

We file ~~expect~~Annual ~~our~~Reports ~~capital~~on ~~outlays~~Form ~~and~~10-K, ~~operating~~Quarterly ~~expenditures~~Reports toon ~~increase~~Form ~~substantially~~10-Q, ~~over~~Current atReports ~~least~~on ~~the~~Form ~~next~~8-K, ~~several~~other ~~years~~reports asand weamendments ~~expand~~to those ~~our~~reports ~~operations~~with the U.S. ~~Lease~~Securities and ~~property~~Exchange ~~acquisition~~Commission ~~costs,~~(“SEC”). asOur ~~well~~reports asfiled ~~drilling~~with ~~operations,~~the SEC are ~~very~~available free ~~expensive,~~of ~~and~~charge weto ~~will~~the ~~need~~general topublic ~~raise~~through ~~substantial~~our ~~additional~~website ~~capital,~~at ~~through~~www.gulfslope.com. ~~equity~~These ~~offerings,~~reports ~~strategic~~are ~~transactions~~accessible oron ~~debt~~our ~~financings~~website as insoon ~~2022~~as toreasonably ~~commence~~practicable ~~the~~after ~~drilling~~being offiled with, or furnished to, the ~~Tau~~SEC. #2This ~~well~~Form 10-K and ~~avoid~~our other filings can also be obtained through the ~~expiration~~SEC’s ofweb site at www.sec.gov. Information on our website is not a ~~lease~~part of this Form 10-K.

~~Our~~ITEM 1A. ~~future~~RISK ~~capital requirements will depend on many factors, including:~~FACTORS

●Certain factors may have a material adverse effect on our business, financial condition, and results of operations. You should consider carefully, the ~~number~~risks and uncertainties described below, ~~location~~in addition to other information contained in this Annual Report on Form 10-K, ~~terms~~including our financial statements and ~~pricing~~related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our ~~anticipated~~business. ~~lease~~If ~~acquisitions;~~any ●of the following risks actually occur, our ~~financing~~business, financial condition, results of operations and future prospects could be materially and adversely affected. In that event, the ~~lease~~trading ~~acquisitions~~price of our common stock could decline, and ~~associated~~you ~~bonding;~~could lose part or all, of your investment.

8 Risks Related to Our Business and Financial Condition

●Our business ~~our~~plan ~~ability~~requires tosubstantial ~~enter~~additional ~~into~~capital, ~~partnerships~~which ~~and~~we ~~farm-outs~~may ~~with~~be ~~other~~unable ~~oil~~to ~~and~~raise ~~gas exploration and production companies and/or financial investors~~ on ~~satisfactory~~acceptable terms~~; ● location of any drilling activities~~, ~~whether~~if ~~onshore~~at ~~or offshore~~all, asin ~~well as~~ the ~~depth of any wells to be drilled; ● cost of additional seismic data to license as well as the reprocessing cost; ● the scope~~ future, ~~rate~~which ofmay ~~progress~~in ~~and~~turn ~~cost~~limit ~~of any exploration and production activities; ● oil and natural gas prices; ●~~ our ability to ~~locate~~execute ~~and acquire oil and gas reserves; ●~~ our ~~ability~~business to produce those oil and natural gas reserves; ● access to oil and gas services and existing pipeline infrastructure; ● the terms and timing of any drilling and other production-related arrangements that we may enter into; ● the cost and timing of governmental approvals and/or concessions; ● the cost, number, and access to qualified industry professionals we employ; and ● the effects of competition by larger companies operating in the oil and gas industrystrategy.

We expect ~~have~~our ~~planned~~capital ~~operating~~outlays and ~~capital~~operating expenditures ~~through~~to ~~December~~increase ~~2022~~substantially ofover ~~approximately~~at ~~$10~~least ~~million,~~the ~~which~~next ~~includes~~several ~~drilling~~years ~~capital~~as ~~expenditures~~we ~~and~~expand our ~~general~~operations. Lease and ~~administrative~~property ~~expenses.~~acquisition Wecosts, as well as drilling operations, are very expensive, and we will need to raise ~~funds~~substantial toadditional ~~cover~~capital, ~~these~~through ~~planned~~equity ~~operating~~offerings, strategic transactions or debt financings in 2023, for capital expenditures and also for the acquisition of producing properties.

~~To the extent we are able to raise capital through equity financings, this may be dilutive to our stockholders. Alternative forms of~~ Our future financings may include preferred stock with preferences or rights superior to our common stock. Debt financings may involve a pledge of assets and will rank senior to our common stock. We have historically financed our operations through best efforts private equity and debt financings. We do not have any credit or equity facilities available with financial institutions, stockholders or third party investors, and will continue to rely on best efforts financings. There is no assurance that we can raise the capital ~~necessary~~requirements ~~to fund our business plan. Failure to raise the required capital to fund operations, on favorable terms or at all,~~ will ~~have~~depend ~~a material adverse effect~~ on ~~our~~many ~~operations~~factors, ~~resulting in impairments of our oil and gas properties and could cause us to curtail or cease operations.~~including:

~~Our~~● ~~fiscal~~the ~~2021~~number, ~~financial~~location, ~~statements~~terms, ~~express~~and ~~substantial~~pricing ~~doubt~~of ~~about~~our anticipated lease acquisitions; ● our financing of the lease acquisitions and associated bonding; ● our ability to ~~continue~~enter asinto apartnerships, ~~going~~and ~~concern~~farm-outs with other oil and gas exploration and production companies and/or financial investors on satisfactory terms; ● location of any drilling activities, ~~raising~~whether ~~questions~~onshore or offshore, as well as the depth of any wells to be drilled; ● cost of additional seismic data to license as well as the reprocessing cost; ● the scope, rate of progress and cost of any exploration and production activities; ● oil and natural gas prices; ● our ~~continued~~ability ~~existence~~to locate and acquire oil and gas reserves; ● our ability to produce those oil and natural gas reserves; ● access to oil and gas services and existing pipeline infrastructure; ● the terms and timing of any drilling and other production-related arrangements that we may enter into; ● the cost and timing of governmental approvals and/or concessions; ● the cost, number, and access to qualified industry professionals we employ; and ● the effects of competition by larger companies operating in the oil and gas industry.

We have ~~incurred~~planned ~~losses~~operating ~~since our inception resulting in an accumulated deficit of approximately $60.2 million~~ and ~~negative working~~ capital ~~totaling~~expenditures ~~approximately~~through ~~$12.1~~December ~~million~~2023 atof ~~September 30, 2021. Further losses are anticipated as we continue to develop our business. To continue as a going concern, we estimate that we will need~~ approximately $10 million, towhich ~~meet~~includes ~~our obligations and planned operating expenditures through December 2022. These expenditures include anticipated drilling~~ capital expenditures, and ~~lease rentals to the BOEM,~~ general and administrative expenses~~, and costs associated with IT and seismic acquisition and processing~~. ~~In addition, we plan to extend the agreements associated with our loans from related parties, the accrued interest payable on these loans, as well as the Company’s accrued liabilities.~~ We ~~plan to finance our operations through equity and/or debt financings, and strategic transactions to include farm-outs, asset sales or mergers. There are no assurances that financing~~ will ~~be available with acceptable terms, if at all. If we are not successful in obtaining financing, our operations would~~ need to beraise ~~curtailed~~funds ~~or ceased or the Company would need~~ to ~~sell~~cover ~~assets~~these orplanned ~~consider~~operating ~~alternative plans up to and including restructuring~~expenditures.

To the extent we are able to raise capital through equity financings, this may be dilutive to our stockholders. Alternative forms of future financings may include preferred stock with preferences or rights superior to our common stock. Debt financings may involve a pledge of assets and will rank senior to our common stock. We have nohistorically ~~proved~~financed ~~reserves~~our operations through best efforts private equity and ~~areas~~debt financings. We do not have any credit or equity facilities available with financial institutions, stockholders, or third-d party investors, and will continue to rely on best efforts financings. There is no assurance that we can ~~decide~~raise the capital necessary to ~~drill~~fund ~~may~~our ~~not~~business ~~yield~~plan. ~~oil~~Failure ~~and~~to ~~natural~~raise ~~gas~~the inrequired ~~commercial~~capital ~~quantities~~to orfund ~~quality~~operations, on favorable terms or at all, will have a material adverse effect on our operations, resulting in impairments of our oil and gas properties and could cause us to curtail or cease operations.

We have no proved reserves. We have identified prospects based on available seismic and geological information that indicates the potential presence of oil and natural gas. However, the areas we decide to drill may not yield oil and natural gas in commercial quantities or quality, or at all. Most of our current prospects are in various stages of evaluation that will require substantial additional seismic data reprocessing and interpretation. Even when properly used and interpreted, 3-D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the interpreter to know whether hydrocarbons are, in fact, present in those structures. We do not know if our prospects will contain oil and natural gas in sufficient quantities or quality to recover drilling and completion costs or to be economically viable. Even if oil and natural gas is found on our prospects in commercial quantities, construction costs of pipelines and other transportation costs may prevent such prospects from being economically viable. If one or more of our prospects do not prove to be successful, our business, financial condition and results of operations will be materially adversely affected. 9

~~The~~Our fiscal ~~seismic~~2022 ~~data~~financial westatements ~~use~~express ~~are~~substantial ~~subject~~doubt toabout ~~non-exclusive~~our ~~license~~ability ~~arrangements~~to ~~and~~continue ~~may~~as bea ~~licensed~~going ~~to our competitors~~concern, ~~which~~raising ~~could~~questions as ~~adversely~~to ~~affect the execution of~~ our ~~acquisition~~continued ~~strategy and business plan~~existence.

~~Our~~We have ~~3-D~~incurred ~~seismic~~losses ~~license~~since ~~agreements~~our ~~are~~inception ~~non-exclusive,~~resulting ~~industry-standard~~in ~~agreements~~an accumulated deficit of approximately $68.9 ~~Accordingly,~~million ~~the~~and ~~licensor~~negative ofworking capital ~~such~~totaling ~~seismic~~approximately ~~data~~$13.8 ~~has~~million ~~the~~at ~~right~~September to30, ~~license~~2022. Further ~~the~~losses ~~same~~are ~~data~~anticipated ~~that~~as we ~~acquired~~continue to develop our ~~competitors~~business. To continue as a going concern, ~~which~~we ~~could~~estimate ~~adversely~~that ~~affect~~we ~~our~~will ~~acquisition~~need ~~strategy~~approximately ~~and~~$10 ~~the~~million ~~execution~~to ofmeet our ~~business~~obligations and ~~plan~~planned operating expenditures through December 2023. WeThese ~~are~~expenditures ~~not~~include ~~authorized~~prospect todevelopment ~~assign~~and ~~any~~pursuit of ~~our~~acquisition costs, ~~rights~~lease ~~under~~rentals ~~our~~to ~~license~~the ~~agreements~~BOEM, ~~including~~general aand ~~transaction~~administrative expenses, and costs associated with aIT ~~potential~~and ~~joint~~seismic ~~venture~~acquisition ~~partner~~and processing. orIn ~~acquirer~~addition, ~~without~~we ~~complying~~plan ~~with~~to extend the ~~terms~~agreements ofassociated ~~the~~with ~~license~~our ~~agreements~~loans ~~and~~from arelated ~~payment~~parties, to the ~~licensor~~accrued ~~(by~~interest payable uson orthese ~~the~~loans, ~~acquirer~~as inwell as the ~~event~~Company’s ofaccrued aliabilities. ~~change~~We ofplan ~~control~~to ~~transaction~~finance our operations through equity and/or debt ~~our~~financings, ~~partner~~and instrategic atransactions ~~joint~~to ~~venture~~include ~~transaction)~~farm-outs, asset sales or mergers. ~~However,~~There ~~our~~are ~~interpretation~~no ofassurances ~~this~~that ~~seismic~~financing will ~~data~~be ~~and~~available ~~importantly~~with acceptable terms, ~~reprocessing~~if ~~and~~at ~~the~~all. ~~modeling~~If ofwe ~~certain~~are ~~seismic~~not ~~data~~successful ~~utilized~~in obtaining financing, our operations would need to ~~identify~~be ~~and~~curtailed ~~technically~~or ~~support~~ceased ~~oil~~or ~~and~~the ~~gas~~Company ~~prospects,~~would isneed ~~unique~~to ~~and~~sell ~~proprietary~~assets or consider alternative plans up to ~~the~~and ~~Company~~including restructuring.

9 We have no proved reserves and areas that we decide to drill may not yield oil and natural gas in commercial quantities or quality, or at all.

We have no proved reserves. We have identified prospects based on available seismic and geological information that indicates the potential presence of oil and natural gas. However, the areas we decide to drill may not yield oil and natural gas in commercial quantities or quality, or at all. Most of our current prospects are in various stages of evaluation that will require substantial additional seismic data reprocessing and interpretation. Even when properly used and interpreted, 3-D seismic ~~interpretation~~data ~~does~~and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not ~~guarantee~~enable ~~that~~the interpreter to know whether hydrocarbons are, in fact, present in those structures. We do not know if our prospects will contain oil and natural gas in sufficient quantities or quality to recover drilling and completion costs or to be economically viable. Even if ~~present,~~oil ~~produce~~and natural gas is found on our prospects in ~~economic~~commercial quantities, construction costs of pipelines and other transportation costs may prevent such prospects from being economically viable. If one or more of our prospects do not prove to be successful, our business, financial condition and results of operations will be materially adversely affected.

~~We rely on 3-D~~ The seismic ~~studies~~data ~~to assist us with assessing prospective drilling opportunities on our properties, as well as on properties that~~ we ~~may~~use ~~acquire. Such seismic studies~~ are ~~merely~~subject anto ~~interpretive~~non-exclusive ~~tool~~license arrangements and domay ~~not~~be ~~necessarily~~licensed ~~guarantee~~to ~~that~~our ~~hydrocarbons are present or~~competitors, ifwhich ~~present,~~could ~~produce~~adversely affect inthe ~~economic~~execution ~~quantities, and seismic indications~~ of ~~hydrocarbon saturation are generally not reliable indicators of productive reservoir rock. These limitations of 3-D seismic data may impact~~ our ~~drilling~~acquisition ~~and~~strategy ~~operational results,~~ and ~~consequently~~business ~~our financial condition~~plan.

Our 3-D ~~leases~~seismic ~~may~~license beagreements ~~terminated~~are ifnon-exclusive, industry-standard agreements. Accordingly, the licensor of such seismic data has the right to license the same data that we acquired to our competitors, which could adversely affect our acquisition strategy and the execution of our business plan. We are ~~unable~~not authorized to ~~make~~assign ~~future~~any ~~lease~~of ~~payments~~our rights under our license agreements, including a transaction with a potential joint venture partner or ifacquirer, wewithout docomplying ~~not~~with ~~drill~~the terms of the license agreements and a payment to the licensor (by us or the acquirer in the event of a ~~timely~~change ~~manner~~of control transaction or our partner in a joint venture transaction). However, our interpretation of this seismic data and importantly, reprocessing and the modeling of certain seismic data utilized to identify and technically support oil and gas prospects, is unique and proprietary to the Company.

The failure to timely affect all lease related payments could cause the leases to be terminated by the BOEM. Net lease rental obligations on our existing prospects are expected to be approximately $0.2 million in fiscal year 2022. Our two leases have a five3-~~year primary term and expire on June 30, 2022 and October 31, 2025, respectively. Each lease may be extended, by drilling a well capable of~~D ~~producing~~seismic ~~hydrocarbons~~interpretation ~~and~~does ~~submitting~~not aguarantee ~~Plan~~that ~~of Production approved by the regulatory authorities. In addition, the terms of our leases may be extended for an additional three years, provided a well is spud targeting~~ hydrocarbons below 25,000 feet true vertical depth (“TVD”) within the primary term of the lease. In addition, the terms of our leases may also be extended by the granting of a Subsalt Lease Term Extension, should we elect to apply and qualify for said extension on any lease(s). If we are ~~not successful~~present inor ~~raising~~if ~~additional capital~~present, weproduce ~~may be unable to successfully exploit our properties, and we may lose the rights to develop these properties upon the expiration of our leases. If not successful~~ in ~~securing~~economic ~~extensions, those leases will be subject to the competitive bid process in the semi-annual BOEM OCS Lease Sales~~quantities.

We rely ~~may~~on ~~not~~3-D beseismic ~~able~~studies to ~~develop~~assist ~~oil~~us ~~and~~with ~~natural~~assessing ~~gas~~prospective ~~reserves~~drilling opportunities on our properties, as well as on properties that we may acquire. Such seismic studies are merely an ~~economically~~interpretive ~~viable~~tool ~~basis~~and do not necessarily guarantee that hydrocarbons are present or, if present, produce in economic quantities, and seismic indications of hydrocarbon saturation are generally not reliable indicators of productive reservoir rock. These limitations of 3-D seismic data may impact our drilling and operational results, and consequently our financial condition.

ToOur lease ~~the~~may ~~extent that we succeed in discovering oil and/or natural gas reserves, we cannot assure that these reserves will~~ be ~~capable~~terminated ofif ~~production levels~~ we ~~project~~are orunable ~~in sufficient quantities~~ to bemake ~~commercially~~future ~~viable.~~lease Onpayments ~~a long-term basis, our viability depends on our ability to find, develop and commercially produce oil and gas reserves, assuming we acquire leases~~ or ~~drilling rights. Our future reserves,~~ if ~~any,~~we ~~will~~do ~~depend~~ not ~~only~~drill onin ~~our~~a ~~ability~~timely to develop then-existing properties, but also on our ability to identify and acquire additional suitable producing properties or prospects, to find markets for the oil and natural gas we develop and to effectively distribute our production into marketsmanner.

~~Future~~The failure ~~oil~~to ~~and~~timely ~~gas~~affect ~~exploration~~all ~~may~~lease ~~involve~~related ~~unprofitable~~payments ~~efforts,~~could ~~not~~cause ~~only~~the ~~from~~lease ~~dry~~to ~~wells,~~be ~~but~~terminated ~~from~~by ~~wells~~the ~~that~~BOEM. ~~are~~Net ~~productive~~lease ~~but~~rental doobligations on ~~not~~our ~~produce~~existing ~~sufficient~~prospect ~~net~~are ~~revenues~~expected to ~~return~~be aapproximately ~~profit~~$0.02 ~~after~~million ~~drilling,~~in ~~operating~~fiscal ~~and~~year ~~other costs~~2023. ~~Completion~~Our oflease ahas ~~well does not assure~~ a ~~profit~~five-year onprimary term ~~the~~and ~~investment~~was orgranted ~~recovery~~a ofthree-year ~~drilling,~~additional ~~completion~~term and ~~operating~~expires ~~costs.~~on InOctober ~~addition~~31, ~~drilling~~2025. ~~hazards~~Our orlease ~~environmental~~may ~~damage~~be ~~could~~extended, ~~greatly~~by ~~increase~~drilling ~~the~~a ~~cost~~well capable of ~~operations~~producing hydrocarbons and ~~various~~submitting ~~field~~a ~~operating~~Plan ~~conditions~~of ~~may~~Production ~~adversely~~approved ~~affect~~by the ~~production~~regulatory ~~from~~authorities. ~~successful~~In ~~wells.~~addition, ~~These~~the terms ~~conditions~~of ~~include~~our ~~delays~~lease inmay ~~obtaining~~also ~~governmental~~be ~~approvals~~extended orby ~~consents,~~the ~~shut-downs~~granting of ~~wells~~a ~~resulting~~Subsalt ~~from~~Lease ~~extreme~~Term ~~weather conditions~~Extension, ~~problems~~should inwe ~~storage~~elect ~~and~~to ~~distribution~~apply and ~~adverse~~qualify for ~~geological~~said ~~and~~extension ~~mechanical~~on ~~conditions~~any lease(s). ~~While~~If we ~~will~~are ~~endeavor~~not tosuccessful ~~effectively~~in ~~manage~~raising ~~these~~additional ~~conditions~~capital, we ~~cannot~~may be ~~assured~~unable ofto ~~doing~~successfully soexploit our ~~optimally~~properties, and we ~~will~~may ~~not~~lose bethe ~~able~~rights to ~~eliminate~~develop ~~them~~these ~~completely~~properties inupon ~~any~~the ~~case~~expiration of our lease. ~~Therefore~~If not successful in securing extensions, ~~these~~our ~~conditions~~lease ~~could~~will ~~adversely~~be ~~impact~~subject ~~our~~to ~~operations~~the competitive bid process in the semi-annual BOEM OCS Lease Sales.

We may ~~are~~not ~~substantially~~be ~~dependent~~able onto ~~certain~~develop ~~members~~oil ofand ~~our~~natural ~~management~~gas ~~and~~reserves ~~technical~~on ~~team~~an economically viable basis.

~~Investors in our common stock must rely upon~~ To the ~~ability,~~extent ~~expertise,~~that ~~judgment~~we ~~and~~succeed ~~discretion of our management and the success of our technical team~~ in ~~identifying and acquiring leases and producing properties, as well as~~ discovering ~~and developing any~~ oil and/or natural gas reserves., ~~Our~~we ~~performance~~cannot ~~and~~assure ~~success~~that ~~are~~these ~~dependent,~~reserves inwill ~~part,~~be ~~upon key members~~ capable of ~~our~~production ~~management~~levels ~~and~~we ~~technical~~project ~~team, and their loss~~ or ~~departure~~in ~~could~~sufficient bequantities ~~detrimental~~ to ~~our~~be ~~future~~commercially ~~success~~viable. InOn ~~making~~ a ~~decision~~long-term tobasis, ~~invest in~~ our ~~common~~viability ~~stock,~~depends on ~~you~~our ~~must~~ability ~~be willing~~ to ~~rely~~find, todevelop aand ~~significant~~commercially ~~extent~~produce onoil ~~our management’s discretion~~ and ~~judgment.~~gas ~~The~~reserves, ~~loss~~assuming ofwe ~~any~~acquire ofleases ~~our~~or ~~management~~drilling ~~and~~rights. Our ~~technical~~future ~~team~~reserves, ~~members~~if ~~could~~any, ~~have~~will adepend ~~material~~not ~~adverse~~only ~~effect~~ on our ~~business~~ability ~~prospects,~~to ~~results~~develop ofthen-existing ~~operations and financial condition~~properties, asbut ~~well~~also as on ~~the~~our ~~market~~ability to ~~price~~identify ofand ~~our~~acquire ~~common~~additional ~~stock.~~suitable Weproducing ~~may~~properties ~~not~~or beprospects, ~~able~~ to find ~~replacement~~markets ~~personnel~~for ~~with~~the ~~comparable~~oil ~~skills.~~and Ifnatural gas we develop ~~are~~and ~~unable~~ to ~~attract~~effectively ~~and~~distribute ~~retain key personnel,~~ our ~~business~~production ~~may~~into ~~be adversely affected~~markets. ~~We do not currently maintain key-man insurance on any member of the management team.~~

WeFuture oil and gas exploration may involve unprofitable efforts, not only from dry wells, but from wells that are anproductive ~~oil~~but do not produce sufficient net revenues to return a profit after drilling, operating and ~~natural~~other ~~gas~~costs. ~~exploration~~Completion of a well does not assure a profit on the investment or recovery of drilling, completion, and ~~production~~operating ~~company~~costs. ~~with~~In ~~limited~~addition, drilling hazards or environmental damage could greatly increase the cost of operations and various field operating ~~history~~conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, the shutdown of wells resulting from extreme weather conditions, problems in storage and ~~there~~distribution ~~can~~and adverse geological and mechanical conditions. While we will endeavor to effectively manage these conditions, we cannot be noassured ~~assurance~~of ~~that~~doing so optimally, and we will not be able ~~successful~~to ineliminate ~~executing~~them ~~our~~completely ~~business~~in ~~plan~~any case. WeTherefore, ~~may~~these ~~never~~conditions ~~attain~~could ~~profitability~~adversely impact our operations.

We commenced our business activity in March 2013, when we entered into 3-D license agreements covering approximately 2.2 million acres and have entered into additional 3-D license agreements with seismic companies to acquire additional data and reprocess seismic data. While we intend to engage in the acquisition, drilling, development, and production of oil and natural gas in the future, we currently have no reserves or production. As we are a relatively new business, we are subject to all the risks and uncertainties, which are characteristic of a new business enterprise, including the substantial problems, expenses and other difficulties typically encountered in the course of its business, in addition to normal business risks, as well as those risks that are specific to the oil and gas industry. Investors should evaluate us in light of the delays, expenses, problems and uncertainties frequently encountered by companies developing markets for new products, services and technologies. We may never overcome these obstacles. 10

We are ~~may~~substantially bedependent ~~unable~~on tocertain ~~access~~members ~~the~~of ~~capital markets to obtain additional capital that we will require to implement~~ our ~~business~~management ~~plan,~~and ~~which~~technical ~~would restrict our ability to grow~~team.

~~Our~~Investors in ~~current~~our ~~capital~~common onstock ~~hand~~must isrely ~~insufficient~~upon tothe ~~enable~~ability, usexpertise, tojudgment ~~fully~~and ~~execute~~discretion of our ~~business~~management ~~strategy~~and inthe ~~2022.~~success ~~Because~~of weour ~~are~~technical team ain ~~company~~identifying ~~with~~and ~~limited~~acquiring ~~resources,~~leases weand ~~may~~producing ~~not~~properties, beas ~~able~~well toas ~~compete~~discovering inand ~~the~~developing ~~capital~~any ~~markets~~oil ~~with~~and ~~much~~gas ~~larger, established companies that have ready access to capital~~reserves. Our ~~ability~~performance toand ~~obtain~~success ~~needed~~are ~~financing~~dependent, ~~may~~in bepart, ~~impaired~~upon bykey ~~conditions~~members ~~and~~of ~~instability~~our inmanagement ~~the~~and ~~capital~~technical ~~markets~~team, ~~(both generally~~ and intheir ~~the oil~~loss ~~and~~or ~~gas~~departure could ~~industry~~be indetrimental ~~particular),~~to our ~~status~~future assuccess. aIn ~~early-stage~~making ~~enterprise without~~ a ~~demonstrated~~decision ~~operating~~to ~~history,~~invest ~~the~~in ~~location~~our ofcommon ~~our~~stock, ~~leases~~you ~~and~~must ~~prices~~be ofwilling ~~oil~~to ~~and~~rely ~~natural~~to a ~~gas~~significant extent on ~~the~~our ~~commodities~~management’s ~~markets~~discretion ~~(which~~and ~~will~~judgment. ~~impact~~The ~~the~~loss ~~amount~~ of ~~financing~~any ~~available~~of toour ~~us),~~management and~~/or~~ ~~the~~technical ~~loss~~team ofmembers could ~~key~~have ~~consultants~~a ~~and~~material ~~management.~~adverse ~~Further,~~effect ifon ~~oil~~our ~~and/or~~business ~~natural~~prospects, ~~gas~~results ~~prices~~of ~~decrease,~~operations ~~then~~and ~~potential~~financial ~~revenues~~condition, ifas ~~any,~~well ~~will~~as ~~decrease,~~on ~~which~~the market ~~may~~price ~~increase~~of our ~~requirements~~common ~~for capital~~stock. ~~Some~~We ofmay ~~the~~not ~~future~~be ~~contractual~~able ~~arrangements~~to ~~governing~~find ~~our~~replacement ~~operations~~personnel ~~may~~with ~~require~~comparable usskills. toIf ~~maintain~~we ~~minimum~~are ~~capital~~unable ~~(both~~to attract ~~from a legal~~ and ~~practical~~retain ~~perspective)~~key personnel, ~~and~~our webusiness may ~~lose~~be ~~our~~adversely ~~contractual~~affected. ~~rights~~We ~~if we~~ do not ~~have~~currently ~~the~~maintain ~~required~~key-man ~~minimum~~insurance ~~capital.~~on Ifany member ~~the amount~~ of ~~capital~~the wemanagement ~~can raise is not sufficient, we may be required to curtail or cease our operations~~team.

10 We are an oil and natural gas exploration and production company with limited operating history, and there can be no assurance that we will be successful in executing our business plan. We may never attain profitability.

We commenced our business activity in March 2013, when we entered into 3-D license agreements covering approximately 2.2 million acres and have aentered ~~limited~~into ~~operating~~additional ~~history~~3-D license agreements with ~~significant~~seismic ~~losses~~companies to acquire additional data and ~~expect~~reprocess seismic ~~losses~~data. While we intend to ~~continue~~engage ~~for~~in the ~~foreseeable~~acquisition, drilling, development, and production of oil and natural gas in the future, we currently have no reserves or production. As we are a relatively new business, we are subject to all the risks and uncertainties, which are characteristic of a new business enterprise, including the substantial problems, expenses and other difficulties typically encountered in the course of its business, in addition to normal business risks, as well as those risks that are specific to the oil and gas industry. Investors should evaluate us in light of the delays, expenses, problems and uncertainties frequently encountered by companies developing markets for new products, services and technologies. We may never overcome these obstacles.

We may ~~have~~be ~~incurred~~unable ~~annual~~to ~~operating~~access ~~losses~~the ~~since~~capital ~~our~~markets ~~inception.~~to Asobtain aadditional ~~result,~~capital atthat ~~September 30, 2021,~~ we ~~had~~will anrequire ~~accumulated~~to ~~deficit~~implement ofour ~~approximately~~business ~~$60.2 million. We had no revenues in 2021 and do not anticipate generating revenues in fiscal 2022~~plan, which orwould inrestrict ~~subsequent~~our ~~periods~~ability ~~unless~~to ~~we are successful in discovering or acquiring economically recoverable oil or gas reserves~~grow. ~~We expect continued losses in fiscal year 2022, and thereafter until we are successful in discovering or acquiring economically recoverable oil or gas reserves.~~

~~The~~Our current ~~majority~~capital ofon ~~our~~hand ~~existing~~is ~~debt~~insufficient ~~outstanding~~to isenable ~~payable~~us onto ~~demand~~fully execute our business strategy in 2023. IfBecause we are ~~unable~~a company with limited resources, we may not be able to ~~repay~~compete in the capital markets with much larger, established companies that have ready access to capital. Our ability to obtain needed financing may be impaired by conditions and instability in the capital markets (both generally and in the oil and gas industry in particular), our ~~existing~~status as a early-stage enterprise without a demonstrated operating history, the location of our lease and prices of oil and natural gas on the commodities markets (which will impact the amount of financing available to us), and/or the loss of key consultants and management. Further, if oil and/or natural gas prices decrease, then potential revenues, if any, will decrease, which may increase our requirements for capital. Some of the future contractual ~~debt~~arrangements asgoverning itour ~~becomes~~operations ~~due~~may require us to maintain minimum capital (both from a legal and practical perspective), and we may lose our contractual rights if we do not have the required minimum capital. If the amount of capital we can raise is not sufficient, we may be ~~unable~~required to ~~continue~~curtail asor acease ~~going~~our ~~concern~~operations.

AsWe have ~~of September 30, 2021, we owed John Seitz, our chief executive officer,~~ a ~~total~~limited ofoperating ~~$8.7~~history ~~million~~with insignificant ~~notes,~~losses ~~payable on demand~~ and ~~bearing~~expect ~~interest~~losses at the rate of 5% per annum. Unpaid interest associated with these notes was $2.96 million as of September 30, 2021. In addition, approximately 16% of our outstanding common stock is controlled by Mr. Seitz. If demand for immediate payment of some or all notes were to ~~occur, it will threaten our ability to~~ continue asfor athe ~~going~~foreseeable ~~concern~~future.

~~Our~~We have ~~lack~~incurred annual operating losses since our inception. As a result, at September 30, 2022, we had an accumulated deficit of approximately ~~diversification~~$68.9 ~~increases~~million. We had no revenues in 2022 and do not anticipate generating revenues in fiscal 2023, or in subsequent periods unless we are successful in discovering or acquiring economically recoverable oil or gas reserves. We expect continued losses in the ~~risk~~foreseeable offuture anuntil ~~investment~~we are successful in ~~our~~discovering ~~common~~or ~~stock~~acquiring economically recoverable oil or gas reserves.

~~Our~~The majority ~~business will focus on the oil and gas industry in commercially advantageous offshore areas~~ of ~~the~~our ~~United~~existing ~~States.~~debt ~~Larger~~outstanding ~~companies~~is ~~have~~payable ~~the~~on ~~ability to manage their risk by diversification~~demand. ~~However,~~If we ~~lack~~are ~~diversification,~~unable into ~~terms~~repay ~~of both the nature and geographic scope of~~ our ~~business.~~existing Asor afuture ~~result,~~debt ~~factors~~as ~~affecting~~it ~~our industry~~becomes due, ~~or the regions in which~~ we ~~operate,~~may ~~will~~be ~~likely~~unable ~~impact~~to uscontinue ~~more~~as ~~acutely~~a ~~than~~going ~~if our business were diversified~~concern.

~~Strategic~~As of ~~relationships~~September ~~upon~~30, ~~which~~2022, we ~~rely~~owed ~~are~~John ~~subject~~Seitz, our chief executive officer, a total of $8.7 million in notes, payable on demand and bearing interest at the rate of 5% per annum. Unpaid interest associated with these notes was $3.4 million as of September 30, 2022. In addition, approximately 16% of our outstanding common stock is controlled by Mr. Seitz. If demand for immediate payment of some or all notes were to ~~change~~occur, ~~which~~it ~~may~~will ~~diminish~~threaten our ability to ~~conduct~~continue ~~our~~as ~~operations~~a going concern.

Our lack ~~ability~~of todiversification ~~successfully~~increases ~~bid~~the onrisk ~~and~~of ~~acquire~~an ~~properties,~~investment ~~to discover resources, to participate~~ in drilling opportunities and to identify and enter into commercial arrangements with customers and partners, depends on developing and maintaining close working relationships with industry participants and on our ~~ability~~common ~~to select and evaluate suitable properties~~stock. ~~Further, we must consummate transactions in a highly competitive environment. These realities are subject to change and may impair our ability to grow.~~

~~To develop our~~ Our business, we will ~~endeavor~~focus toon ~~use~~ the relationships of our management and to enter into strategic relationships, which may take the form of joint ventures with other private parties or with local government bodies or contractual arrangements with other oil and gas ~~companies,~~industry ~~including~~in ~~those~~commercially ~~that~~advantageous ~~supply~~offshore ~~equipment~~areas ~~and~~of ~~other~~the ~~resources~~United ~~that we will use in our business~~States. WeLarger ~~may~~companies have ~~not~~the beability ~~able~~ to ~~establish~~manage ~~these~~their ~~strategic~~risk ~~relationships,~~by ordiversification. ~~if established~~However, we ~~may~~lack ~~not~~diversification, bein ~~able~~terms toof ~~maintain~~both ~~them.~~the Innature ~~addition,~~and ~~the~~geographic scope ~~dynamics~~ of our ~~relationships~~business. ~~with~~As ~~strategic~~a ~~partners~~result, ~~may~~factors ~~require~~affecting ~~that~~our weindustry, ~~incur expenses~~ or ~~undertake~~the ~~activities~~regions ~~we would not otherwise incur or undertake~~ in ~~order~~which towe ~~fulfill~~operate, ~~our~~will ~~obligations~~likely toimpact ~~these~~us more ~~partners~~acutely orthan ~~maintain~~if our ~~relationships. If our strategic relationships are not established or maintained, our~~ business ~~prospects~~were ~~may be limited, which could diminish our ability to conduct our operations~~diversified.

~~We may not be able to effectively manage our growth, which may harm our profitability.~~ 11

~~Our~~Strategic relationships ~~strategy~~upon ~~envisions~~which ~~building~~we ~~and~~rely ~~expanding~~are ~~our~~subject ~~business. If we fail~~ to ~~effectively manage our growth~~change, ~~our~~which ~~financial results will be adversely affected. Growth~~ may ~~place~~diminish ~~a strain on~~ our ~~management~~ability ~~systems and resources. We must continue~~ to ~~refine~~conduct ~~and expand~~ our ~~business development capabilities, our systems, processes, and our access to financing sources~~operations. ~~As we grow, we must continue to hire, train, supervise and manage new employees. We cannot assure you that we will be able to:~~

●Our ability ~~expand~~to ~~our~~successfully ~~systems~~bid ~~effectively~~on orand ~~efficiently~~acquire orproperties, to discover resources, to participate in adrilling ~~timely~~opportunities ~~manner;~~and ●to identify ~~optimally~~and ~~allocate~~enter ~~our~~into ~~human~~commercial ~~resources;~~arrangements orwith ●customers ~~identify~~and partners, depends on developing and ~~hire~~maintaining ~~qualified~~close ~~employees~~working relationships orwith ~~retain~~industry ~~valued~~participants ~~employees~~and on our ability to select and evaluate suitable properties. Further, we must consummate transactions in a highly competitive environment. These realities are subject to change and may impair our ability to grow.

IfTo develop our business, we ~~are~~will ~~unable~~endeavor to ~~manage~~use the relationships of our ~~growth~~management and ~~our~~to ~~operations~~enter into strategic relationships, which may take the form of joint ventures with other private parties or with local government bodies or contractual arrangements with other oil and gas companies, including those that supply equipment and other resources that we will use in our ~~financial~~business. ~~results~~We ~~could~~may not be ~~adversely~~able ~~affected~~to establish these strategic relationships, or if established, we may not be able to maintain them. In addition, the dynamics of our relationships with strategic partners may require that we incur expenses or undertake activities we would not otherwise incur or undertake in order to fulfill our obligations to these partners or maintain our relationships. If our strategic relationships are not established or maintained, our business prospects may be limited, which could ~~prevent~~diminish usour ~~from~~ability ~~ever~~to ~~attaining~~conduct our ~~profitability~~operations.

We may not ~~realize~~be ~~all~~able ofto ~~the~~effectively ~~anticipated~~manage ~~benefits from~~ our ~~future acquisitions~~growth, ~~and~~which we may beharm ~~unable~~our ~~to successfully integrate future acquisitions~~profitability.

Our ~~growth~~ strategy ~~will,~~envisions inbuilding ~~part,~~and ~~rely~~expanding onour ~~acquisitions~~business. WeIf ~~have~~we fail to ~~plan~~effectively ~~and~~ manage ~~acquisitions~~our ~~effectively to achieve revenue~~ growth, ~~and~~our ~~maintain~~financial ~~profitability~~results inwill be ~~our~~adversely ~~evolving market~~affected. WeGrowth may ~~not~~place ~~realize~~a ~~all~~strain ofon ~~the~~our ~~anticipated~~management ~~benefits~~systems ~~from~~and ~~our~~resources. ~~future~~We ~~acquisitions,~~must ~~such~~continue asto ~~increased~~refine ~~earnings,~~and ~~cost~~expand our ~~savings~~business ~~and~~development ~~revenue enhancements~~capabilities, ~~for~~our ~~various~~systems, ~~reasons~~processes, ~~including~~and ~~difficulties~~our ~~integrating~~access ~~operations~~to ~~and~~financing ~~personnel, higher~~sources. ~~than~~As ~~expected~~we ~~acquisition~~grow, ~~and~~we ~~operating~~must ~~costs~~continue to orhire, ~~other difficulties~~train, ~~inexperience~~supervise ~~with~~and ~~operating~~manage in new ~~geographic~~employees. ~~regions,~~We ~~unknown~~cannot ~~liabilities,~~assure ~~inaccurate~~you ~~reserve~~that ~~estimates~~we ~~and~~will ~~fluctuations~~be inable ~~market prices.~~to:

11 ● expand our systems effectively or efficiently or in a timely manner; ● optimally allocate our human resources; or ● identify and hire qualified employees or retain valued employees.

InIf we ~~addition,~~are ~~integrating~~unable ~~acquired~~to ~~businesses~~manage ~~and~~our ~~properties~~growth ~~involves a number of special risks~~ and ~~unforeseen~~our ~~difficulties can arise in integrating~~ operations, ~~and~~our ~~systems~~financial ~~and~~results incould ~~retaining~~be ~~and~~adversely ~~assimilating~~affected, ~~employees.~~which ~~These~~could ~~difficulties~~prevent us ~~include,~~from ~~among~~ever ~~other~~attaining ~~things:~~profitability.

●We may ~~operating~~not arealize ~~larger~~all ~~organization;~~of ●the ~~coordinating~~anticipated ~~geographically~~benefits ~~disparate~~from ~~organizations,~~our ~~systems~~future ~~and facilities; ● integrating corporate~~acquisitions, ~~technological~~ and ~~administrative~~we ~~functions;~~may ●be ~~diverting~~unable ~~management’s~~to ~~attention~~successfully ~~from~~integrate regular business concerns; ● diverting financial resources away from existing operations; ● increasing our indebtedness; and ● incurring potential environmental or regulatory liabilities and title problemsfuture acquisitions.

~~Any~~Our growth ofstrategy ~~these~~will, orin ~~other~~part, ~~similar~~rely ~~risks could lead to potential adverse short-term or long-term effects~~ on ~~our operating results~~acquisitions. ~~The~~We ~~process~~have ofto ~~integrating~~plan ~~our~~and ~~operations~~manage ~~could~~acquisitions ~~cause~~effectively anto ~~interruption~~achieve ~~of,~~revenue orgrowth and ~~loss~~maintain ofprofitability ~~momentum~~ in, ~~the activities of~~ our ~~business~~evolving market. ~~Members~~We ~~of our management~~ may benot ~~required~~realize toall ~~devote~~of ~~considerable~~the ~~amounts~~anticipated ofbenefits ~~time~~from toour ~~this~~future ~~integration process~~acquisitions, such ~~which~~as ~~decreases~~increased ~~the~~earnings, ~~time~~cost ~~they~~savings ~~have~~and torevenue ~~manage~~enhancements, ~~our~~for ~~business.~~various Ifreasons, ~~our~~including ~~management~~difficulties isintegrating ~~not~~operations and ~~able~~personnel, higher tothan ~~effectively~~expected ~~manage~~acquisition ~~the~~and ~~integration~~operating ~~process,~~costs or ifother ~~any~~difficulties, ~~business~~inexperience ~~activities~~with ~~are~~operating ~~interrupted~~in new asgeographic aregions, ~~result~~unknown ofliabilities, ~~the~~inaccurate ~~integration~~reserve ~~process,~~estimates ~~our~~and ~~business~~fluctuations ~~could~~in ~~suffer~~market prices.

~~Our~~In addition, ~~future~~integrating ~~acquisitions~~acquired ~~could~~businesses ~~expose~~and usproperties toinvolves ~~potentially~~a ~~significant~~number ~~liabilities,~~of ~~including~~special ~~P&A~~risks ~~liabilities~~and unforeseen difficulties can arise in integrating operations and systems and in retaining and assimilating employees. These difficulties include, among other things:

We● ~~expect~~operating ~~that~~a ~~future~~larger ~~acquisitions~~organization; ~~will~~● ~~contribute~~coordinating togeographically ~~our~~disparate ~~growth.~~organizations, Insystems ~~connection~~and ~~with~~facilities; ~~potential~~● ~~future~~integrating ~~acquisitions~~corporate, wetechnological ~~may~~and ~~only~~administrative befunctions; ~~able~~● todiverting ~~perform~~management’s ~~limited~~attention ~~due~~from ~~diligence~~regular business concerns; ● diverting financial resources away from existing operations; ● increasing our indebtedness; and ● incurring potential environmental or regulatory liabilities and title problems.

~~Successful acquisitions~~ Any of ~~oil~~these ~~and~~or ~~natural~~other ~~gas~~similar ~~properties~~risks ~~require~~could anlead ~~assessment~~to ofpotential aadverse ~~number~~short-term ofor ~~factors,~~long-term ~~including~~effects ~~estimates~~on ofour ~~recoverable~~operating ~~reserves,~~results. ~~the~~The process ~~timing~~ of ~~recovering~~integrating ~~reserves,~~our ~~exploration~~operations ~~potential,~~could ~~future~~cause ~~oil~~an ~~and~~interruption ~~natural gas prices~~of, ~~operating~~or ~~costs~~loss ~~and~~of ~~potential~~momentum ~~environmental~~in, ~~regulatory~~the ~~and~~activities ~~other~~of ~~liabilities,~~our ~~including P&A liabilities~~business. Members ~~Such~~of ~~assessments~~our ~~are~~management ~~inexact and~~ may ~~not~~be ~~disclose~~required ~~all~~to ~~material~~devote ~~issues~~considerable oramounts ~~liabilities.~~of Intime ~~connection~~to ~~with~~this ~~our~~integration ~~assessments~~process, wewhich ~~perform~~decreases the atime ~~review~~they ofhave ~~the~~to ~~acquired~~manage ~~properties~~our business. ~~However,~~If ~~such~~our amanagement ~~review~~is ~~may~~ not ~~reveal~~able ~~all~~to ~~existing~~effectively ormanage ~~potential~~the ~~problems.~~integration ~~In addition~~process, ~~our~~or ~~review~~if any ~~may~~business ~~not~~activities ~~permit~~are usinterrupted toas ~~become~~a ~~sufficiently~~result ~~familiar~~of ~~with~~ the ~~properties~~integration toprocess, ~~fully~~our ~~assess~~business ~~their~~could ~~deficiencies and capabilities~~suffer.

~~There~~Our future ~~may~~acquisitions becould ~~threatened,~~expose ~~contemplated,~~us ~~asserted or other claims against the acquired assets related~~ to ~~environmental,~~potentially ~~title,~~significant regulatory, tax, contract, litigation or other matters of which we are unaware, which could materially and adversely affect our production, revenues and results of operations. We may be successful in obtaining contractual indemnification for preclosing liabilities, including ~~environmental~~P&A liabilities~~, but we expect that we will generally acquire interests in properties on an “as is” basis with limited remedies for breaches of representations and warranties~~. In addition, even if we are able to obtain such indemnification from the sellers, these indemnification obligations usually expire over time and could potentially expose us to liabilities that are not indemnified, which could materially adversely affect our production, revenues and results of operations.

We expect ~~may~~that befuture ~~dependent~~acquisitions ~~upon~~will ~~third~~contribute ~~party~~to ~~operators~~our ofgrowth. ~~any~~In ~~oil~~connection ~~and~~with ~~natural~~potential ~~gas~~future ~~properties~~acquisitions, we may ~~acquire~~only be able to perform limited due diligence.

~~Third~~Successful acquisitions ~~parties~~of ~~may~~oil ~~act~~and asnatural gas properties require an assessment of a number of factors, including estimates of recoverable reserves, the ~~operators~~timing of ~~our~~recovering reserves, exploration potential, future oil and natural gas ~~wells~~prices, ~~and~~operating ~~control~~costs ~~the~~and ~~drilling~~potential environmental, regulatory and ~~operating~~other ~~activities~~liabilities, toincluding beP&A ~~conducted~~liabilities. onSuch ~~our~~assessments ~~properties,~~are ifinexact and ~~when~~may ~~such~~not ~~assets~~disclose all ~~are~~material ~~acquired~~issues or liabilities. ~~Therefore~~In connection with our assessments, we ~~may~~perform ~~have~~a ~~limited~~review ~~control~~of ~~over~~the ~~certain~~acquired ~~decisions~~properties. ~~related~~However, such toa ~~activities~~review onmay ~~our~~not ~~properties~~reveal ~~relating~~all toexisting ~~the~~or ~~timing,~~potential ~~costs,~~problems. ~~procedure~~In addition, ~~and~~our ~~location~~review ofmay ~~drilling~~not orpermit ~~production~~us ~~activities,~~to ~~which~~become ~~could~~sufficiently familiar ~~affect~~with the ~~Company’s~~properties ~~results~~to fully assess their deficiencies and capabilities.

~~We may not be able to obtain drilling rigs and other equipment and geophysical service crews necessary to exploit any oil and natural gas resources we may acquire.~~ 12

We There may ~~not~~ be ~~able~~threatened, tocontemplated, ~~procure~~asserted or other claims against the ~~necessary~~acquired ~~drilling~~assets ~~rigs~~related to environmental, ~~and~~title, ~~related~~regulatory, tax, ~~services~~contract litigation or other matters of which we are unaware, which could materially and ~~equipment~~adversely oraffect ~~the~~our ~~cost~~production, revenues and results of ~~such~~operations. ~~items~~We may be ~~prohibitive.~~successful ~~Our~~in ~~ability~~obtaining tocontractual ~~comply~~indemnification for preclosing liabilities, including environmental liabilities, but we expect that we will generally acquire interests in properties on an “as is” basis with ~~future~~limited ~~license~~remedies ~~obligations~~for orbreaches ~~otherwise~~of ~~generate~~representations ~~revenues~~and warranties. In addition, even if we are able to obtain such indemnification from the ~~production~~sellers, ofthese ~~operating~~indemnification ~~oil~~obligations ~~and~~usually ~~natural~~expire ~~gas~~over ~~wells~~time and could bepotentially ~~hampered~~expose asus ato ~~result~~liabilities ofthat are ~~this~~not indemnified, ~~and~~which could materially adversely affect our ~~business~~production, ~~could~~revenues ~~suffer~~and results of operations.

~~Risks~~We may ~~Related~~be todependent ~~Our~~upon ~~Industry~~third inparty ~~Which~~operators Weof ~~Intend~~any tooil ~~Compete~~and natural gas properties we may acquire.

AnThird parties ~~extended~~may ~~decline~~act inas ~~oil~~the ~~prices~~operators of our oil and ~~significant~~natural ~~fluctuations~~gas inwells ~~energy~~and ~~prices~~control ~~may~~the ~~continue~~drilling ~~indefinitely,~~and ~~affecting~~operating ~~the~~activities ~~commercial~~to ~~viability~~be ofconducted on our ~~projects~~properties, if and ~~negatively~~when ~~affecting~~such assets are acquired. Therefore, we may have limited control over certain decisions related to activities on our ~~business~~properties ~~prospects~~relating to the timing, costs, procedure, and ~~viability~~location of drilling or production activities, which could affect the Company’s results.

~~The commercial viability of our projects is highly dependent on the price of oil and natural gas. Prices also affect our ability to borrow money or raise additional capital.~~ We ~~will need to obtain additional financing to fund our activities. Our ability to do so~~ may not be ~~adversely~~able ~~affected by an extended decline in oil prices. If we are unable~~ to obtain ~~such~~drilling ~~financing~~rigs ~~when~~and ~~needed,~~other onequipment commercially reasonable terms, we may be required to cease our operations, which could have a materially adverse impact on the market price of our stock. An extended decline in oil prices may have a material adverse effect on our planned operations, financial condition and ~~level~~geophysical ofservice ~~expenditures~~crews ~~that~~necessary ~~we may ultimately have~~ to ~~make~~exploit ~~for the development of~~ any oil and natural gas ~~reserves~~resources we may acquire.

12 We may not be able to procure the necessary drilling rigs, and related services and equipment or the cost of such items may be prohibitive. Our ability to comply with future license obligations or otherwise generate revenues from the production of operating oil and natural gas wells could be hampered, as a result of this, and our business could suffer.

~~The~~Risks Related ~~oil and gas markets are very volatile, and we cannot predict future oil and natural gas prices. Historically, oil and natural gas prices have been volatile and are subject~~ to ~~fluctuations~~Our inIndustry ~~response to changes~~ in ~~supply~~Which ~~and~~We ~~demand,~~Intend market uncertainty and a variety of additional factors that are beyond our control. In addition, the prices we receive for any future production and the levels of any future production and reserves will depend on numerous factors beyond our control. These factors include, but are not limited to, ~~the following:~~Compete

●An extended ~~changes~~decline in ~~global supply and demand for~~ oil ~~and~~prices ~~natural gas by both refineries~~ and ~~end~~significant ~~users;~~fluctuations ●in ~~the~~energy ~~ability~~prices ofmay ~~the~~continue members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; ● the price and volume of imports of foreign oil and natural gas; ● political and economic conditionsindefinitely, ~~including embargoes, in oil-producing countries or~~ affecting ~~other oil-producing activity; ●~~ the ~~level~~commercial viability of ~~global~~our ~~oil~~projects and ~~gas~~negatively exploration and production activity; ● the level of global oil and gas inventories; ● weather conditions; ● government policies to discourage use of fuels that emit GHGs and encourage use of alternative energy; ● technological advances affecting ~~energy~~our ~~consumption;~~business ●prospects ~~domestic~~ and foreign governmental regulations and taxes; ● proximity and capacity of oil and gas pipelines and other transportation facilities; ● the price and availability of competitors’ supplies of oil and gas in captive market areas; ● the introduction, price and availability of alternative forms of fuel to replace or compete with oil and natural gas; ● import and export regulations for LNG (“liquified natural gas”) and/or refined products derived from oil and gas production from the US; ● speculation in the price of commodities in the commodity futures market; ● technological advances affecting energy consumption; ● the availability of drilling rigs and completion equipment; and ● the overall economic environmentviability.

~~Further,~~The commercial viability of our projects is highly dependent on the price of oil and natural gas. ~~prices~~Prices doalso ~~not~~affect ~~necessarily~~our ~~fluctuate~~ability into borrow ~~direct~~money ~~relationship~~or raise additional capital. We will need to ~~each~~obtain ~~other~~additional financing to fund our activities. ~~The~~Our ~~price~~ability ofto do so may be adversely affected by an extended decline in oil ~~has~~prices. ~~been~~If ~~extremely~~we ~~volatile~~are unable to obtain such financing when needed, ~~and~~on commercially reasonable terms, we ~~expect~~may ~~this~~be ~~volatility~~required to ~~continue~~cease ~~for~~our operations, which could have a materially adverse impact on the ~~foreseeable~~market ~~future~~price of our stock. ~~The~~An ~~volatility~~extended decline in oil prices may have a material adverse effect on our planned operations, financial condition, and level of ~~the~~expenditures ~~energy~~that ~~markets~~we ~~make~~may itultimately ~~difficult~~have to ~~predict~~make ~~future~~for the development of any oil and natural gas ~~price~~reserves ~~movements~~we ~~with~~may ~~any certainty~~acquire.

~~Exploration~~The oil ~~for~~and gas markets are very volatile, and we cannot predict future oil and natural gas isprices. ~~risky~~Historically, oil and ~~may~~natural gas ~~not~~prices behave ~~commercially~~been ~~successful~~volatile and are subject to fluctuations in response to changes in supply and demand, ~~impairing~~market uncertainty and a variety of additional factors that are beyond our ~~ability~~control. toIn ~~generate~~addition, ~~revenues~~the prices we receive for any future production and the levels of any future production and reserves will depend on numerous factors beyond our control. These factors include, but are not limited to, the following:

~~Oil~~● ~~and~~changes ~~natural gas exploration involves a high degree of risk. These risks are more acute~~ in ~~the~~global ~~early~~supply ~~stages~~and ofdemand ~~exploration.~~for ~~We may not discover~~ oil orand natural gas inby ~~commercially~~both ~~viable~~refineries ~~quantities.~~and Itend isusers; ~~difficult~~● ~~to project~~ the ~~costs~~ability of ~~implementing~~the anmembers ~~exploratory~~of ~~drilling program due to~~ the ~~inherent~~Organization ~~uncertainties~~ of ~~drilling~~Petroleum inExporting ~~unknown~~Countries ~~formations,~~to ~~the~~agree ~~costs~~to ~~associated~~and ~~with~~maintain ~~encountering~~oil ~~various~~price ~~drilling~~and ~~conditions,~~production ~~such~~controls; as● ~~over~~the ~~pressured~~price ~~zones~~and ~~(which~~volume ~~may~~of ~~lead~~imports toof ~~blowouts,~~foreign ~~fires,~~oil and ~~explosions)~~natural ~~and~~gas; ~~tools~~● ~~lost~~political inand ~~the~~economic ~~hole~~conditions, ~~and~~including ~~changes~~embargoes, in ~~drilling~~oil-producing ~~plans,~~countries ~~locations~~or asaffecting aother ~~result~~oil-producing ofactivity; ~~prior~~● ~~exploratory~~the ~~wells~~level orof ~~additional~~global ~~seismic~~oil ~~data~~ and ~~interpretations~~gas ~~thereof,~~exploration and ~~final~~production ~~commercial~~activity; ~~terms~~● ~~negotiated~~the ~~with~~level ~~partners.~~of ~~Developing~~global ~~exploratory~~ oil and gas ~~properties~~inventories; ~~requires~~● ~~significant~~weather ~~capital~~conditions; ~~expenditures~~● ~~and~~government ~~involves~~policies ato ~~high~~discourage ~~degree~~use of ~~financial~~fuels ~~risk.~~that ~~The~~emit ~~budgeted~~GHGs ~~costs of drilling, completing,~~ and ~~operating~~encourage ~~exploratory~~use ~~wells~~of ~~are~~alternative ~~often~~energy; ~~exceeded~~● ~~and~~technological ~~can~~advances ~~increase~~affecting ~~significantly~~energy ~~when~~consumption; ~~drilling~~● ~~costs~~domestic ~~rise.~~and ~~Drilling~~foreign ~~may~~governmental beregulations ~~unsuccessful~~and ~~for~~taxes; ~~many~~● ~~reasons,~~proximity ~~including~~and ~~title~~capacity ~~problems,~~of ~~adverse~~oil ~~weather~~and ~~conditions~~gas ~~(which~~pipelines ~~may~~and beother ~~more~~transportation ~~frequent~~facilities; as● ~~climate~~the ~~changes),~~price ~~cost~~and ~~overruns,~~availability ~~equipment~~of ~~shortages,~~competitors’ ~~mechanical~~supplies ~~difficulties,~~of oil and ~~environmental~~gas ~~hazards~~in ~~(including~~captive ~~spills~~market ~~and~~areas; ~~toxic~~● ~~gas~~the ~~releases).~~introduction, ~~There~~price isand noavailability ~~assurance~~of ~~that~~alternative weforms ~~will~~of ~~successfully~~fuel ~~complete~~to ~~any~~replace ~~wells~~ or ifcompete ~~successful,~~with ~~that~~oil ~~the~~and ~~wells~~natural ~~would~~gas; be● ~~economically~~import ~~successful.~~and ~~Moreover,~~export ~~the~~regulations ~~successful~~for ~~drilling~~LNG or(“liquified ~~completion~~natural ofgas”) ~~any oil~~ and/or ~~gas~~refined ~~well~~products ~~does~~derived ~~not~~from ~~ensure~~oil aand ~~profit~~gas onproduction ~~investment.~~from ~~Exploratory~~the ~~wells~~US; ~~bear~~● aspeculation ~~much~~in ~~greater~~the ~~risk~~price of ~~loss~~commodities ~~than~~in ~~development~~the ~~wells.~~commodity Wefutures ~~cannot~~market; ~~assure~~● ~~you~~technological ~~that~~advances ~~our~~affecting ~~exploration~~energy ~~activities~~consumption; ~~will~~● ~~result~~the inavailability ~~profitable~~of ~~operations,~~drilling ~~the~~rigs ~~result~~and ofcompletion ~~which~~equipment; ~~will~~and ~~materially~~● ~~adversely~~the ~~affect~~overall ~~our~~economic ~~business~~environment.

~~Competition within our industry may adversely affect our operations.~~ 13

~~Competition within our industry is intense~~Further, ~~particularly with respect to the acquisition of producing properties and undeveloped acreage. We compete with major~~ oil and natural gas ~~companies~~prices ~~and~~do ~~other~~not ~~independent~~necessarily ~~producers~~fluctuate ~~of varying sizes, all of which are engaged~~ in ~~the~~direct ~~acquisition~~relationship of properties and the exploration and development of such properties. Many of our competitors have financial resources and exploration and development budgets that are substantially greater than our budget, which may adversely affect our ability to ~~compete.~~each If other. ~~companies~~The ~~relocate~~price ~~to the Gulf~~ of ~~Mexico~~oil ~~region,~~has ~~levels~~been ~~of competition may increase~~extremely volatile, and ~~our~~we ~~business~~expect ~~could~~this bevolatility ~~adversely~~to ~~affected.~~continue Infor the ~~exploration~~foreseeable ~~and~~future. ~~production~~The ~~business,~~volatility ~~some~~ of the ~~larger~~energy ~~integrated~~markets ~~companies~~makes ~~may~~it difficult ~~be better able than we are~~ to ~~respond~~predict tofuture ~~industry changes including price fluctuations,~~ oil and natural gas ~~demand,~~price ~~political~~movements ~~change~~with ~~and~~any ~~government regulations~~certainty.

WeExploration for ~~actively compete with other companies when acquiring new leases or~~ oil and ~~gas~~natural properties. For example, new leases acquired from BOEM are acquired through a “sealed bid” process and are generally awarded to the highest bidder. These additional resources can be particularly important in reviewing prospects and purchasing properties. The competitors may also have a greater ability to continue drilling activities during periods of low oil and gas ~~prices,~~is ~~such~~risky ~~as the current decline in oil prices,~~ and ~~to absorb the burden of current and future governmental regulations and taxation. Competitors~~ may not be ~~able~~commercially ~~to evaluate~~successful, ~~bid~~impairing ~~for and purchase a greater number of properties and prospects than~~ our ~~financial~~ability ~~or personnel resources permit. Competitors may also be able~~ to ~~pay~~generate more for productive oil and gas properties and exploratory prospects than we are able or willing to pay. Further, our competitors may be able to expend greater resources on the existing and changing technologies that we believe impacts attaining success in the industry. If we are unable to compete successfully in these areas in the future, our future revenues ~~and growth may be diminished or restricted~~.

13 Oil and natural gas exploration involves a high degree of risk. These risks are more acute in the early stages of exploration. We may not discover oil or natural gas in commercially viable quantities. It is difficult to project the costs of implementing an exploratory drilling program due to the inherent uncertainties of drilling in unknown formations, the costs associated with encountering various drilling conditions, such as over pressured zones (which may lead to blowouts, fires, and explosions) and tools lost in the hole, and changes in drilling plans, locations as a result of prior exploratory wells or additional seismic data and interpretations thereof, and final commercial terms negotiated with partners. Developing exploratory oil and gas properties requires significant capital expenditures and involves a high degree of financial risk. The budgeted costs of drilling, completing, and operating exploratory wells are often exceeded and can increase significantly when drilling costs rise. Drilling may be unsuccessful for many reasons, including title problems, adverse weather conditions (which may be more frequent as climate changes), cost overruns, equipment shortages, mechanical difficulties, and environmental hazards (including spills and toxic gas releases). There is no assurance that we will successfully complete any wells or if successful, that the wells would be economically successful. Moreover, the successful drilling or completion of any oil or gas well does not ensure a profit on investment. Exploratory wells bear a much greater risk of loss than development wells. We cannot assure you that our exploration activities will result in profitable operations, the result of which will materially adversely affect our business.

~~Additional~~Competition within ~~drilling~~our ~~laws,~~industry regulations, executive orders and other regulatory initiatives that restrict, delay or prohibit oil and natural gas exploration, development and production activities or locations where such activities may ~~occur~~adversely ~~could~~affect ~~have a material adverse effect on~~ our ~~business, financial condition or results of~~ operations.

~~The~~Competition ~~BSEE~~within ~~and~~our ~~the~~industry ~~BOEM~~is ~~have over the past decade~~intense, ~~primarily~~particularly ~~under the Obama Administration, imposed more stringent permitting procedures and regulatory safety and performance requirements~~ with respect to ~~new wells drilled in federal deepwater. While, in recent years under~~ the ~~Trump~~acquisition ~~Administration, there have been actions by BSEE or BOEM seeking to mitigate or delay certain~~ of ~~those~~producing ~~more~~properties ~~rigorous standards, we expect that the Biden Administration may reconsider rules~~ and ~~regulatory~~undeveloped ~~initiatives implemented under the Trump Administration~~acreage. We ~~Compliance~~compete with ~~any~~major ~~added~~oil and ~~more~~gas ~~stringent~~companies ~~regulatory requirements~~ and ~~with~~other ~~existing~~independent ~~environmental~~producers ~~and~~of ~~spill regulations~~varying sizes, ~~together~~all ~~with~~of ~~uncertainties~~which orare ~~inconsistencies~~engaged in ~~decisions~~the acquisition ~~and~~of ~~rulings~~properties ~~by governmental agencies~~ and ~~delays in~~ the ~~processing~~ exploration and ~~approval~~development of ~~drilling~~such ~~permits~~properties. ~~and~~Many ~~exploration,~~of ~~development,~~our ~~oil~~competitors ~~spill~~have ~~response~~financial resources and ~~decommissioning~~exploration ~~plans~~ and ~~possible additional~~development ~~regulatory~~budgets ~~initiatives~~that ~~could~~are ~~result~~substantially ingreater ~~difficult~~than ~~and~~our ~~more~~budget, ~~costly~~which ~~actions~~may ~~and~~ adversely affect orour ~~delay new drilling~~ability ~~and~~to ~~ongoing development efforts~~compete. ~~Moreover,~~If ~~these~~other ~~governmental~~companies ~~agencies~~relocate ~~under the Biden Administration are expected~~ to ~~continue to evaluate aspects of safety and operational performance in~~ the ~~United States~~ Gulf of Mexico ~~that could result in new~~region, ~~more~~levels ~~restrictive requirements.~~of ~~For~~competition ~~example,~~may ~~under the Trump Administration~~increase, ~~BSEE reviewed~~ and delayed or revised certain offshore regulations implemented during the Obama Administration with respect to the imposition of rigorous standards relating to well control. In light of the statements made by President Biden, there exists a significant risk that these Obama-era regulations, or additional, more stringent regulations impacting our business, ~~properties and results of operations~~ could be ~~reimplemented~~adversely oraffected. ~~adopted~~In ~~during~~ the ~~Biden~~exploration Administration. These regulatory actions, or any new rules, regulations, or legal initiatives or controls that impose increased costs or more stringent operational standards could delay or disrupt our operations, result in increased supplemental bonding and ~~costs~~production ~~and limit activities in certain areas~~business, orsome ~~cause us to incur penalties, fines, or shut-in production at one or more~~ of ~~our facilities or result in~~ the ~~suspension~~larger orintegrated ~~cancellation~~companies ofmay ~~leases.~~be ~~Also,~~better ~~if material spill incidents were to occur in the future, the United~~able ~~States~~than ~~could~~we ~~elect~~are to ~~issue~~respond ~~directives~~ to ~~temporarily~~industry ~~cease~~changes ~~drilling~~including ~~activities~~price ~~and~~fluctuations, ~~in any event, issue further safety and environmental laws and regulations regarding offshore~~ oil and ~~natural~~ gas ~~exploration and development~~demand, ~~any~~political ofchange ~~which~~and ~~could~~government ~~have a material adverse effect on our business. We cannot predict with any certainty the full impact of any new laws or~~ regulations ~~on our drilling operations or on the cost or availability of insurance to cover some or all of the risks associated with such operations~~.

~~The~~We actively ~~BOEM~~compete ~~requires~~with ~~that~~other ~~lessees~~companies ~~demonstrate~~when ~~financial~~acquiring ~~strength~~new ~~and~~leases ~~reliability~~or ~~according~~oil ~~to its regulations~~ and ~~provide~~gas ~~acceptable~~properties. ~~financial~~For ~~assurances to assure satisfaction of lease obligations~~example, ~~including~~new ~~decommissioning~~leases ~~activities~~acquired ~~on the OCS. In 2016, the~~ from BOEM ~~under~~are ~~the~~acquired ~~Obama~~through ~~Administration~~a ~~issued~~“sealed ~~Notice~~bid” toprocess ~~Lessees~~ and ~~Operators~~are ~~(“NTL”)~~generally ~~#2016-N01~~awarded ~~(“NTL #2016-N01”)~~ to ~~clarify~~ the ~~procedures~~highest ~~and~~bidder. ~~guidelines~~These ~~that~~additional resources ~~BOEM~~can ~~Regional~~be ~~Directors~~particularly ~~use~~important toin ~~determine~~reviewing ifprospects and ~~when~~purchasing ~~additional~~properties. ~~financial~~The ~~assurances~~competitors may bealso ~~required~~have ~~for~~a ~~OCS~~greater ability ~~leases,~~to ~~rights~~continue ofdrilling ~~way~~activities ~~(“ROWs”)~~during ~~and~~periods ~~rights~~ of ~~use~~low oil and ~~easement~~gas ~~(“RUEs”). While NTL #2016-N01 became effective in September 2016~~prices, itsuch ~~was not fully implemented~~ as the ~~BOEM~~current ~~under~~decline ~~the Trump Administration first extended indefinitely~~ in ~~2017~~oil ~~implementation~~prices, ~~of the NTL~~ and to ~~subsequently~~absorb ~~rescinded~~ the ~~NTL~~burden ~~in the latter half~~ of ~~2020,~~current ~~instead~~and ~~electing~~future togovernmental ~~publish~~regulations inand ~~October 2020 a proposed rule that would amend the BOEM’s financial assurance requirements~~taxation. ~~The~~Competitors ~~Biden~~may ~~Administration~~be isable ~~expected~~ to ~~review~~evaluate, bid for and ~~reconsider~~purchase ~~actions~~a ~~made~~greater ~~under~~number ~~the~~of ~~Trump~~properties ~~Administration~~and ~~with~~prospects ~~respect~~than toour ~~provision of~~ financial ~~assurance,~~or ~~including~~personnel ~~the~~resources ~~rescission~~permit. ofCompetitors ~~NTL~~may ~~#2016-N01~~also be ~~and~~able ~~publication~~to ofpay ~~the~~more ~~October~~for ~~2020~~productive ~~proposed~~oil ~~rulemaking.~~and ~~Any~~gas ~~issuance~~properties byand ~~the~~exploratory ~~Biden~~prospects ~~Administration~~than ofwe ~~more~~are ~~stringent~~able ~~NTL guidance~~ or ~~rules~~willing ~~relating~~ to ~~the~~pay. ~~provision~~Further, our ofcompetitors ~~additional financial assurance~~ may ~~have~~be aable ~~material~~to ~~adverse~~expend ~~effect~~greater resources on usthe existing and ~~similarly~~changing technologies ~~situated~~that ~~offshore~~we ~~oil~~believe ~~and~~impacts attaining ~~gas~~success ~~operators~~in on the ~~OCS~~industry. ~~Moreover,~~If ~~the~~we ~~BOEM~~are ~~has~~unable ~~the~~to ~~authority~~compete tosuccessfully ~~issue~~in ~~liability~~these ~~orders~~areas in the future, ~~including~~our iffuture itrevenues and ~~determines~~growth ~~there~~may isbe adiminished ~~substantial~~or ~~risk of nonperformance of the interest holder’s decommissioning liabilities~~restricted.

~~Our~~The Biden ~~operations~~Administration may ~~incur~~pursue ~~substantial~~significant ~~liabilities~~regulatory toand ~~comply~~political ~~with~~actions ~~environmental~~that ~~laws~~could ~~and~~adversely ~~regulations~~af asect ~~well~~our asresults ~~legal~~of ~~requirements~~operations, and ~~applicable~~our ability to ~~marine~~implement ~~mammals~~our ~~and~~business ~~endangered and threatened species~~strategy.

~~Our~~President Biden ~~oil~~has made addressing the threat of climate change from GHG emissions a priority under his Administration. Regulatory agencies under the Biden Administration have issued proposed rulemakings and ~~natural~~may ~~gas~~issue ~~operations~~new ~~are~~or ~~subject~~amended torulemakings ~~stringent~~in ~~federal~~support of President Biden’s regulatory and political agenda, ~~state~~which include reducing dependence on, ~~local~~and use of, fossil fuels and ~~foreign~~curtailment of ~~laws~~hydraulic fracturing on federal lands. Our operations in the Gulf of Mexico require permits from federal and ~~regulations~~state ~~relating~~governmental agencies for drilling and completion activities and to conduct other regulated activities and the ~~release~~Biden Administration may continue pursuing actions that delay or ~~disposal~~refuse approval of ~~materials~~new ~~into~~leases for hydrocarbon exploration and development on federal lands and waters or delay or fail to grant approvals required for development of existing leases on such lands and waters. To the ~~environment~~extent that our operations in federal waters are restricted, delayed for varying lengths of time or ~~otherwise~~cancelled, ~~relating~~such developments could have a material adverse effect on our results of operations, our ability to ~~environmental~~replace ~~protection~~reserves and the ability to implement our business strategy.

~~These~~Additional deepwater drilling laws, regulations and other restrictions, delays and other offshore-related developments in the Gulf of Mexico, may have a material adverse effect on our business, financial condition, or results of operations. In January 2021, President Biden suspended new oil and natural gas leases on federal lands and waters, including the OCS pending review and reconsideration of federal oil and gas leasing and permitting practices. While this suspension was challenged and enjoined in June 2021 by a federal district court, the Biden Administration is appealing the court decision. Additionally, regulatory agencies under the Biden Administration may issue new or amended rulemakings regarding deepwater leasing, permitting, or drilling that could result in more stringent or costly restrictions, delays or cancellations to our operations as well as those of similarly situated offshore energy companies on the OCS. The BSEE and the BOEM have over the past decade, primarily under the Obama Administration, imposed more stringent permitting procedures and regulatory safety and performance requirements with respect to new wells drilled in federal deepwater. While actions by BSEE or BOEM under the former Trump Administration sought to mitigate or delay certain of those more rigorous standards, the Biden Administration could reconsider rules and regulatory initiatives implemented under the Trump Administration and replace them with new, more stringent requirements and also provide more rigorous enforcement of existing regulatory requirements. Compliance with any added or more stringent Biden Administration regulatory requirements or enforcement initiatives and existing environmental and spill regulations: , together with uncertainties or inconsistencies in decisions and rulings by governmental agencies and delays in the processing and approval of drilling permits and exploration, development, oil spill response and decommissioning plans and possible additional regulatory initiatives could result in difficult and more costly actions and adversely affect or delay new drilling and ongoing development efforts. Moreover, governmental agencies under the Biden Administration.

● require the acquisition of a permit or other approval before drilling or other regulated activity commences; ● restrict the types, quantities and concentration of substances that can be released into the environment in connection with drilling and production activities; ● limit or prohibit exploration or drilling activities on certain lands lying within protected areas or that may affect certain marine species and endangered and threatened species; and ● impose substantial liabilities for pollution resulting from our operations. 14

~~Failure~~The BOEM requires that lessees demonstrate financial strength and reliability according to ~~comply~~its regulations and provide acceptable financial assurances to ensure satisfaction of lease obligations, including decommissioning activities on the OCS. As of the filing date of this Form 10-K, we are in compliance with ~~these~~our ~~laws~~financial assurance obligations to the BOEM, and have no outstanding BOEM orders, requests or financial assurance obligations. The BOEM under the Obama and Trump Administrations had sought to implement varying levels of stringent and costly standards under the existing federal financial assurance requirements, either through issuance and implementation of NTL #2016-N01 as was the case under the Obama Administration or proposing rulemaking to revise the decommissioning and related financial assurance regulations ~~may~~as ~~result~~was the case under the Trump Administration. However, BOEM under the Biden Administration is expected to propose new financial assurance requirements that, if adopted as proposed, could increase our operating costs. Additionally, the BOEM could in: the future make new demands for additional financial assurances covering our obligations under our properties, which could exceed the Company’s capabilities to provide. If we fail to comply with such future orders, the BOEM could commence enforcement proceedings or take other remedial action, including assessing civil penalties, suspending operations or production, or initiating procedures to cancel leases, which, if upheld, would have a material adverse effect on our business, properties, results of operations and financial condition.

●Our operations ~~the~~may ~~assessment~~incur ofsubstantial ~~administrative,~~liabilities ~~civil~~to ~~and~~comply ~~criminal~~with ~~penalties;~~environmental ●laws ~~loss~~and ofregulations ~~our~~as ~~leases;~~well ●as ~~incurrence~~legal ofrequirements ~~investigatory,~~applicable to ~~remedial~~marine ormammals ~~corrective~~and ~~obligations;~~endangered and ●threatened ~~the imposition of injunctive relief, which could prohibit, limit or restrict our operations in a particular area~~species.

14 Our oil and natural gas operations are subject to stringent federal, state, local and foreign laws and regulations relating to the release or disposal of materials into the environment or otherwise relating to environmental protection.

~~Changes in environmental~~ These laws and regulations occur frequently, and any changes that result in more stringent or costly waste handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on our industry in general and on our own results of operations, competitive position or financial condition. Under these environmental laws and regulations, we could incur strict joint and several liability for the removal or remediation of previously released materials or contamination, regardless of whether we were responsible for the release or contamination and regardless of whether our operations met previous standards in the industry at the time they were conducted. Our permits require that we report any incidents that cause or could cause environmental damages.:

~~New~~● ~~laws~~require ~~and~~the ~~regulations,~~acquisition ~~amendment~~ of ~~existing~~a ~~laws~~permit ~~and~~or ~~regulations,~~other ~~reinterpretation~~approval ofbefore ~~legal~~drilling ~~requirements~~ or ~~increased~~other ~~governmental~~regulated ~~enforcement~~activity ~~could~~commences; ~~significantly~~● ~~increase~~restrict ~~our~~the ~~capital~~types, ~~expenditures~~quantities and ~~operating~~concentration ~~costs~~of orsubstances ~~could~~that ~~result~~can inbe ~~delays,~~released ~~limitations~~into orthe ~~cancelations~~environment toin ~~our~~connection ~~exploration~~with drilling and production activities,; ~~which~~● ~~could~~limit ~~have~~or anprohibit ~~adverse~~exploration ~~effect~~or drilling activities on ~~our~~certain ~~financial~~lands ~~condition,~~lying ~~results~~within ofprotected ~~operations,~~areas or ~~cash~~that ~~flows~~may affect certain marine species and endangered and threatened species; and ● impose substantial liabilities for pollution resulting from our operations.

~~Our operations are subject~~ Failure to ~~numerous~~comply ~~risks~~with ofthese ~~oil~~laws and ~~natural~~regulations ~~gas~~may ~~drilling~~result ~~and production activities.~~in:

~~Oil~~● ~~and gas drilling and production activities are subject to numerous risks, including~~ the ~~risk~~assessment ~~that no commercially productive oil or natural gas reserves are found. The cost~~ of ~~drilling~~administrative, civil and ~~completing~~criminal ~~wells~~penalties; is● ~~often~~loss ~~uncertain. To the extent we drill additional wells in the Gulf~~ of ~~Mexico,~~ our ~~drilling~~lease; ~~activities~~● ~~increase~~incurrence ~~capital~~of ~~cost. In addition~~investigatory, ~~the~~remedial ~~geological~~or ~~complexity~~corrective ofobligations; ~~the areas in which we have oil~~ and ~~natural~~● ~~gas operations make it more difficult for us to sustain~~ the ~~historical~~imposition ~~rates~~ of ~~drilling~~injunctive ~~success.~~relief, ~~Oil~~which ~~and~~could ~~natural gas drilling and production activities may be shortened~~prohibit, ~~delayed~~limit or ~~cancelled~~restrict asour aoperations ~~result~~in of a ~~variety~~particular ~~of factors, many of which are beyond our control~~area. ~~These factors include:~~

●Changes in ~~unexpected~~environmental ~~drilling~~laws ~~conditions;~~and ●regulations ~~pressure~~occur orfrequently, ~~irregularities~~and any changes that result in ~~formations;~~more ●stringent ~~equipment~~or ~~failures~~costly waste handling, storage, transport, disposal or ~~accidents;~~cleanup ●requirements ~~hurricanes~~could require us to make significant expenditures to attain and ~~other~~maintain compliance and may otherwise have a material adverse ~~weather~~effect ~~conditions;~~on ●our ~~shortages~~industry in ~~experienced~~general ~~labor;~~and on our own results of operations, competitive position or financial condition. Under these environmental laws and ●regulations, ~~shortages~~we could incur strict joint and several liability for the removal or ~~delays~~remediation inof previously released materials or contamination, regardless of whether we were responsible for the ~~delivery~~release or contamination and regardless of ~~equipment~~whether our operations met previous standards in the industry at the time they were conducted. Our permits require that we report any incidents that cause or could cause environmental damages.

~~The~~New laws ~~prevailing prices of oil~~ and ~~natural~~regulations, ~~gas~~amendment ~~also~~of ~~affect~~existing ~~the~~laws ~~cost of~~ and ~~the demand for drilling rigs~~regulations, ~~production~~reinterpretation ~~equipment~~of ~~and~~legal ~~related~~requirements ~~services.~~or Weincreased ~~cannot~~governmental enforcement ~~assure~~could ~~you~~significantly ~~that~~increase ~~the~~our ~~wells~~capital weexpenditures ~~drill~~and ~~will~~operating becosts ~~productive~~ or ~~that~~could weresult ~~will~~in ~~recover~~delays, ~~all~~limitations or cancelations ~~any~~to ~~portion of~~ our ~~investment.~~exploration ~~Drilling for oil~~ and ~~natural~~production ~~gas may be unprofitable. Drilling~~ activities, ~~can~~which ~~result~~could inhave ~~dry~~an ~~holes~~adverse ~~and~~effect ~~wells~~on ~~that~~our ~~are~~financial ~~productive~~condition, ~~but~~results of dooperations, ~~not~~or ~~produce sufficient~~ cash flows ~~to recoup drilling costs~~.

~~Any~~Our operations ~~insurance~~are ~~that~~subject weto ~~may~~numerous ~~acquire~~risks ~~will~~of ~~likely~~oil beand ~~inadequate~~natural togas ~~cover~~drilling ~~liabilities~~and weproduction ~~may incur~~activities.

~~Our involvement in the exploration for,~~ Oil and ~~development~~gas ~~of,~~drilling ~~oil~~ and ~~natural~~production ~~gas~~activities ~~properties~~are ~~may result in our becoming~~ subject to ~~liability~~numerous ~~for pollution~~risks, ~~blow-outs,~~including ~~property~~the ~~damage,~~risk ~~personal~~that ~~injury~~no orcommercially ~~other~~productive ~~hazards.~~oil or ~~Although~~natural wegas ~~intend~~reserves toare ~~obtain~~found. ~~insurance~~The incost ~~accordance~~of ~~with~~drilling ~~industry~~and ~~standards~~completing towells ~~address~~is ~~such~~often ~~risks,~~uncertain. ~~such~~To ~~insurance~~the ~~has~~extent ~~limitations~~we ~~and~~drill soadditional wells ~~will~~in bethe ~~unlikely~~Gulf toof ~~cover~~Mexico, ~~the~~our ~~full~~drilling ~~extent~~activities ofincrease ~~such~~capital ~~liabilities~~cost. In addition, ~~such~~the ~~risks~~geological ~~may~~complexity ~~not,~~of inthe ~~all circumstances be insurable or,~~ areas in ~~certain~~which ~~circumstances,~~ we ~~may~~have ~~choose~~oil ~~not~~and tonatural ~~obtain~~gas ~~insurance~~operations tomake ~~protect~~it ~~against~~more ~~specific~~difficult ~~risks~~for ~~due~~us to sustain the ~~high~~historical ~~premiums~~rates ~~associated~~of ~~with~~drilling ~~such insurance or for other reasons~~success. Oil ~~The~~and ~~payment~~natural ofgas ~~such~~drilling ~~uninsured~~and ~~liabilities~~production ~~would~~activities ~~reduce~~may ~~the~~be ~~funds~~shortened, ~~available~~delayed toor ~~us.~~cancelled Ifas ~~we suffer~~ a ~~significant~~result ~~event~~of ~~that~~a isvariety ~~not fully insured or if the insurer~~ of ~~such event is not solvent or denies coverage~~factors, many weof ~~could~~which beare ~~required~~beyond ~~to divert funds from capital investment or other uses towards covering~~ our ~~liability~~control. ~~for~~These ~~such~~factors ~~events.~~include:

~~Events~~● ~~outside~~unexpected ofdrilling ~~our~~conditions; ~~control,~~● ~~including~~pressure ~~an epidemic~~ or ~~outbreak~~irregularities ofin anformations; ~~infectious~~● ~~disease,~~equipment ~~such~~failures asor ~~the COVID-19, may materially adversely affect our business.~~accidents;

We face risks related to epidemics, outbreaks or other public health events that are outside of our control, and could significantly disrupt our operations and adversely affect our financial condition. The global or national outbreak of an illness or other communicable disease, or any other public health crisis, such as COVID-19, may cause disruptions to our business and operational plans, which may include (i) shortages of employees, (ii) unavailability of contractors or subcontractors, (iii) interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed by government and health authorities, including quarantines, to address an outbreak and (v) restrictions that we and our contractors, subcontractors and our customers impose, including facility shutdowns, to ensure the safety of employees. For example, in response to COVID-19, we have reduced third party expenses and reduced capital expenditures. In addition, the effects of COVID-19 and concerns regarding its global spread could negatively impact the domestic and international demand for crude oil and natural gas, which could contribute to price volatility, impact the price we receive for oil and natural gas and materially and adversely affect the demand for and marketability of our production. The potential impact from COVID-19, both now and in the future, is difficult to predict, and the extent to which it may negatively affect our operating results or the duration of any potential business disruption is uncertain. Any potential impact will depend on future developments and new information that may emerge regarding the COVID-19 infection rate or the efficacy and distribution of COVID-19 vaccines, and the actions taken by authorities to contain it or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could adversely affect our operating results. 15

15 ● hurricanes and other adverse weather conditions; ● shortages in experienced labor; and ● shortages or delays in the delivery of equipment.

~~Lower~~The prevailing prices of oil and natural gas ~~prices~~also affect the cost of and ~~other~~the ~~factors~~demand infor drilling rigs, production equipment and related services. We cannot assure you that the ~~future~~wells we drill will be productive or that we will recover all or any portion of our investment. Drilling for oil and natural gas may be unprofitable. Drilling activities can result in ~~ceiling~~dry ~~test~~holes ~~write-downs~~ and ~~other~~wells ~~impairments~~that ofare ~~our~~productive but ~~asset~~do ~~carrying~~not ~~values~~produce sufficient cash flows to recoup drilling costs.

WeAny insurance ~~use~~that ~~the full cost method of accounting for our oil and gas operations. Accordingly,~~ we ~~capitalize~~may ~~the costs to~~ acquire, ~~explore~~will ~~for~~likely ~~and~~be ~~develop~~inadequate oil and gas properties. Under the full cost method of accounting, we compare, at the end of each financial reporting period for each cost center, the present value of estimated future net cash flows from proved reserves, to ~~the~~cover ~~net~~liabilities capitalized costs of proved oil and gas properties, net of related deferred taxes. We refer to this comparison as a ceiling test. If the net capitalized costs of proved oil and gas properties exceed the estimated discounted future net cash flows from proved reserves, we are required to write down the value of our oil and gas properties to the value of the estimated discounted future net cash flows. A write-down of oil and gas properties does not impact cash flows from operating activities, but does reduce net income. The risk that we are required to write-down the carrying value of oil and gas properties increases when oil and natural gas prices are low or volatile. In addition, write-downs may occur if we experience substantial downward adjustments to our estimated undeveloped property values, or if estimated future development costs increase. Volatility in commodity prices, poor conditions in the global economic markets and other factors could cause us to record additional write-downs of our oil and natural gas properties and other assets in the future, and incur ~~additional charges against future earnings~~. ~~Any required write-downs or impairments could materially adversely affect our business, results of operations and financial condition.~~

~~New~~Our involvement ~~technologies~~in the exploration for, and development of, oil and natural gas properties may ~~cause~~result in our ~~current~~becoming ~~exploration~~subject ~~and~~to ~~drilling~~liability for ~~methods~~pollution, blow-outs, property damage, personal injury or other hazards. Although we intend to ~~become~~obtain ~~obsolete~~insurance in accordance with industry standards to address such risks, such insurance has limitations and weso will be unlikely to cover the full extent of such liabilities. In addition, such risks may not, in all circumstances be ~~able~~insurable or, in certain circumstances, we may choose not to ~~keep~~obtain ~~pace~~insurance to protect against specific risks due to the high premiums associated with ~~technological~~such ~~developments~~insurance inor for other reasons. The payment of such uninsured liabilities would reduce the funds available to us. If we suffer a significant event that is not fully insured or if the insurer of such event is not solvent or denies coverage, we could be required to divert funds from capital investment or other uses towards covering our ~~industry~~liability for such events.

~~The~~Events outside ~~oil~~of ~~and~~our ~~natural gas industry is subject to rapid and significant advancements in technology~~control, including ~~the~~an ~~introduction~~epidemic ~~of new products and services using new technologies. As competitors use~~ or ~~develop~~outbreak ~~new~~of ~~technologies,~~an weinfectious ~~may be placed at a competitive disadvantage~~disease, ~~and~~such ~~competitive~~as pressures may force us to implement new technologies at a substantial cost. In addition, competitors may have greater financial, technical, and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before we can. We rely heavily on the use of seismic technology to identify opportunities and to reduce our geological risk. Seismic technology or other technologies that we may implement in the future may become obsolete. We cannot be certain that we will be able to implement technologies on a timely basis or at a cost that is acceptable to us. If we are unable to maintain technological advancements consistent with industry standardsCOVID-19, ~~our business, results of operations and financial condition~~ may be materially adversely affect ~~affected~~our business.

~~Our~~We face ~~operations~~risks related to epidemics, outbreaks or other public health events that are ~~subject~~outside of our control, and could significantly disrupt our operations and adversely affect our financial condition. The global or national outbreak of an illness or other communicable disease, or any other public health crisis, such as COVID-19, may cause disruptions to ~~various~~our ~~risks~~business and operational plans, which may include (i) shortages of employees, (ii) unavailability of contractors or subcontractors, (iii) interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed by government and health authorities, including quarantines, to address an outbreak and (v) restrictions that ~~could~~we ~~result~~and inour ~~increased~~contractors, ~~operating~~subcontractors ~~costs~~and our customers impose, including ~~limit~~facility shutdowns, to ensure the ~~areas~~safety of employees. For example, in ~~which~~response ~~oil~~to COVID-19, we have reduced third party expenses and ~~natural~~reduced ~~gas~~capital ~~production~~expenditures. ~~may~~In ~~occur~~addition, the effects of COVID-19 and ~~reduced~~concerns regarding its global spread could negatively impact the domestic and international demand for crude oil and natural gas, which could contribute to price volatility, impact the ~~crude~~price we receive for oil and natural gas and materially and adversely affect the demand for and marketability of our production. The potential impact from COVID-19, both now and in the future, is difficult to predict, and the extent to which it may negatively affect our operating results or the duration of any potential business disruption is uncertain. Any potential impact will depend on future developments and new information that wemay ~~produce~~emerge regarding the COVID-19 infection rate or the efficacy and distribution of COVID-19 vaccines, and the actions taken by authorities to contain it or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could adversely affect our operating results.

~~Climate~~Lower oil ~~change continues to attract considerable public, governmental~~ and ~~scientific~~natural ~~attention.~~gas Asprices ~~a result, numerous proposals have been made~~ and ~~could~~other ~~continue~~factors toin ~~be made at~~ the ~~international,~~future ~~national,~~may ~~regional~~result ~~and~~in ~~state~~ceiling ~~levels~~test ~~of government to monitor and limit emissions of GHG. These efforts have included consideration of cap~~write-~~and-trade~~downs ~~programs, carbon taxes, GHG reporting~~ and tracking programs and regulations that directly limit GHG emissions from certain sources. At the federal level, the U.S. Congress has from time to time considered climate change legislation, but no comprehensive climate change legislation has been adopted. The EPA, however, has adopted regulations under the existing CAA to restrict emissions of GHG. For example, the EPA imposes preconstruction and operating permit requirements on certain large stationary sources that are already potential sources of certain other ~~significant~~impairments ~~pollutant emissions. The EPA also adopted rules requiring the monitoring and reporting~~ of ~~GHG~~our asset ~~emissions~~carrying ~~on an annual basis from specified large GHG emission sources in the United States, including onshore and offshore oil and natural gas production facilities~~values. Federal agencies have also begun directly regulating emissions of methane, a GHG, from oil and natural gas operations as described above. Compliance with these rules or other could result in increased compliance costs on our operations.

~~Additionally,~~We use ~~state~~the ~~implementation~~full ofcost ~~revised~~method ~~air~~of ~~emission~~accounting ~~standards~~for ~~could~~our ~~result~~oil inand ~~stricter~~gas ~~permitting~~operations. ~~requirements~~Accordingly, ~~delay,~~we ~~limit~~capitalize orthe ~~prohibit~~costs ~~our~~to ~~ability~~acquire, toexplore for ~~obtain~~and ~~such~~develop ~~permits~~oil and ~~result~~gas inproperties. ~~increased~~Under ~~expenditures~~the full cost method of accounting, we compare, at the end of each financial reporting period for ~~pollution~~each ~~control~~cost ~~equipment~~center, the present value of estimated future net cash flows from proved reserves, to the net capitalized costs of ~~which~~proved ~~could~~oil beand ~~significant~~gas properties, net of related deferred taxes. AtWe refer to this comparison as a ceiling test. If the ~~international~~net capitalized ~~level~~costs of proved oil and gas properties exceed the estimated discounted future net cash flows from proved reserves, we are required to write down the ~~United~~value ~~Nations-sponsored~~of ~~Paris~~our ~~Agreement~~oil ~~requires~~and ~~member~~gas ~~states~~properties to ~~submit~~the ~~non~~value of the estimated discounted future net cash flows. A write-~~binding,~~down ~~individually~~of ~~determined~~oil ~~emissions~~and ~~reduction~~gas ~~goals~~properties ~~every~~does ~~five~~not ~~years~~impact ~~after~~cash ~~2020.~~flows Onfrom ~~January~~operating ~~20,~~activities ~~2021~~but ~~President~~does ~~Biden~~reduce ~~issued~~net ~~written~~income. The ~~notification~~risk that we are required to write-down the ~~United~~carrying ~~Nations~~value of oil and gas properties increases when oil and natural gas prices are low or volatile. In addition, write-downs may occur if we experience substantial downward adjustments to our estimated undeveloped property values, or if estimated future development costs increase. Volatility in commodity prices, poor conditions in the ~~United~~global economic ~~States’~~markets ~~intention~~and other factors could cause us to ~~rejoin~~record additional write-downs of our oil and natural gas properties and other assets in the ~~Paris~~future ~~Agreement,~~and ~~which~~incur ~~became~~additional ~~effective~~charges onagainst ~~February~~future 19earnings. Any required write-downs or impairments could materially adversely affect our business, ~~2021~~results of operations and financial condition.

~~Governmental,~~New technologies ~~scientific~~may ~~and~~cause ~~public~~our ~~concern~~current ~~over~~exploration the threat of climate change arising from GHG emissions has resulted in increasing federal political risks in the United States. On January 27, 2021, President Biden issued an executive order that commits to substantial action on climate change, calling for, among other things, the elimination of subsidies provided to the fossil fuel industry, increased production of offshore wind energy and ~~increased~~drilling ~~emphasis~~methods ~~on climate-related risks across governmental agencies and economic sectors. The Biden Administration has also taken actions~~ to ~~limit~~become oil and gas development activities on the OCS. Other actions that could be pursued by the Biden Administration include more restrictive requirements for the establishment of pipeline infrastructure or the permitting of liquefied natural gas export facilitiesobsolete, ~~as well as more stringent emissions standards for oil~~ and ~~gas~~we ~~facilities.~~may Litigation risks are also increasing, as a number of cities, local governments and other plaintiffs have sought to bring suit against oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to global warming effects, such as rising sea levels and therefore are responsible for roadway and infrastructure damages as a result, or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts. While our business is not abe ~~party~~able to ~~any~~keep ~~such~~pace ~~litigation,~~with technological wedevelopments ~~could be named~~ in ~~actions making similar allegations. An unfavorable ruling in any such case could significantly impact~~ our ~~operations and could have an adverse impact on our financial condition~~industry.

16The oil and natural gas industry is subject to rapid and significant advancements in technology, including the introduction of new products and services using new technologies. As competitors use or develop new technologies, we may be placed at a competitive disadvantage, and competitive pressures may force us to implement new technologies at a substantial cost. In addition, competitors may have greater financial, technical, and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before we can. We rely heavily on the use of seismic technology to identify opportunities and to reduce our geological risk. Seismic technology or other technologies that we may implement in the future may become obsolete. We cannot be certain that we will be able to implement technologies on a timely basis or at a cost that is acceptable to us. If we are unable to maintain technological advancements consistent with industry standards, our business, results of operations and financial condition may be materially adversely affected.

There are also increasing financial risks for fossil fuel producers as stockholders and bondholders currently invested in fossil fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors. Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices, and some of them may elect not to provide funding for fossil fuel energy companies. Additionally, the lending practices of institutional lenders have been the subject of intensive lobbying efforts in recent years, oftentimes public in nature, by environmental activists, proponents of the international Paris Agreement and foreign citizenry concerned about climate change not to provide funding for fossil fuel producers. Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities. 16

~~The~~Our operations ~~adoption~~are ofsubject ~~legislation or regulatory programs~~ to ~~reduce~~various orrisks ~~eliminate~~that ~~future emissions of GHG~~ could ~~require~~result usin ~~to incur~~ increased operating costs, ~~such~~limit asthe ~~costs~~areas toin ~~purchase~~which oil and ~~operate~~natural gas ~~emissions~~production ~~control~~may ~~systems~~occur, ~~to acquire emissions allowances or comply with new regulatory or reporting requirements. Any such legislation or regulatory programs could also increase the cost of consuming,~~ and ~~thereby~~reduced ~~reduce~~ demand for, the crude oil and natural gas that we produce. Consequently, legislation and regulatory programs to reduce or eliminate future emissions of GHG could have an adverse effect on our business, financial condition and results of operations. Also, political, financial and litigation risks may result in our restricting or canceling production activities, incurring liability for infrastructure damages as a result of climatic changes or impairing the ability to continue to operate in an economic manner.

~~Finally~~Climate change continues to attract considerable public, ~~some~~governmental ~~scientists~~and scientific attention. As a result, numerous proposals have ~~concluded~~been made ~~that~~and ~~increasing~~could ~~concentrations~~continue to be made at the international, national, regional and state levels of government to monitor and limit emissions of GHG. inThese efforts have included consideration of cap-and-trade programs, carbon taxes, GHG reporting and tracking programs and regulations that directly limit GHG emissions from certain sources. At the ~~Earth’s~~federal ~~atmosphere~~level, ~~may~~the ~~produce~~U.S. Congress has from time to time considered climate ~~changes~~change ~~that~~legislation, ~~have~~but ~~significant~~no ~~physical~~comprehensive ~~effects~~climate change legislation has been adopted. The EPA, however, ~~such~~has asadopted ~~increased~~regulations ~~frequency~~under ~~and~~the ~~severity~~existing CAA to restrict emissions of ~~storms,~~GHG. ~~droughts~~For example, ~~floods~~the EPA imposes preconstruction and ~~other~~operating ~~climatic~~permit ~~events.~~requirements ~~Our~~on ~~offshore~~certain ~~operations~~large stationary sources that are ~~particularly~~already atpotential ~~risk~~sources ~~from~~of ~~severe~~certain ~~climatic~~other ~~events~~significant pollutant emissions. IfThe ~~any~~EPA ~~such~~also ~~effects~~adopted rules requiring the monitoring and reporting of ~~climate~~GHG ~~changes~~emissions ~~were~~on toan ~~occur~~annual basis from specified large GHG emission sources in the United States, ~~they~~including ~~could~~onshore and offshore oil and natural gas production facilities. Federal agencies have analso ~~adverse~~begun ~~effect~~directly onregulating ~~our~~emissions ~~financial~~of ~~condition~~methane, a GHG, from oil and ~~results~~natural ofgas operations as described above. Compliance with these rules or other could result in increased compliance costs on our operations.

We There are ~~subject~~also increasing financial risks for fossil fuel producers as stockholders and bondholders currently invested in fossil fuel energy companies concerned about the potential effects of climate change may elect in the future to ~~cyber~~shift ~~security~~some ~~risks~~or all of their investments into non-fossil fuel energy related sectors. AInstitutional ~~cyber~~lenders ~~incident~~who ~~could~~provide ~~occur~~financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices, and ~~result~~some of them may elect not to provide funding for fossil fuel energy companies. Additionally, the lending practices of institutional lenders have been the subject of intensive lobbying efforts in ~~information~~recent ~~theft~~years, ~~data~~oftentimes ~~corruption~~public in nature, ~~operational~~by ~~disruption~~environmental activists, proponents of the international Paris Agreement and foreign citizenry concerned about climate change not to provide funding for fossil fuel producers. Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or ~~financial~~cancellation ~~loss~~of drilling programs or development or production activities.

The adoption ~~oil~~of ~~and~~legislation ~~natural~~or ~~gas~~regulatory ~~industry~~programs ~~has become increasingly dependent on digital technologies~~ to ~~conduct~~reduce ~~certain~~or ~~exploration,~~eliminate ~~development,~~future ~~production,~~emissions ~~processing~~of ~~and~~GHG ~~distribution~~could ~~activities.~~require ~~For~~us ~~example, we depend on digital technologies~~ to ~~interpret~~incur ~~seismic~~increased operating ~~data~~costs, ~~conduct~~such ~~reservoir~~as ~~modeling~~costs ~~and~~to ~~record~~purchase ~~financial~~ and ~~other~~operate ~~data.~~emissions ~~Our~~control ~~industry faces various security threats~~systems, ~~including~~to ~~cyber-security~~acquire ~~threats.~~emissions ~~Cyber-security~~allowances ~~attacks~~or incomply ~~particular~~with new ~~are~~regulatory ~~increasing~~or ~~and~~reporting ~~include,~~requirements. ~~but~~Any ~~are~~such ~~not~~legislation ~~limited~~or ~~to,~~regulatory ~~malicious~~programs ~~software,~~could ~~attempts~~also toincrease ~~gain~~the ~~unauthorized~~cost ~~access~~of ~~to data~~consuming, and ~~other~~thereby ~~electronic~~reduce ~~security~~demand ~~breaches~~for, ~~that~~the ~~could~~oil ~~lead~~and tonatural ~~disruptions~~gas inwe ~~critical~~produce. ~~systems~~Consequently, ~~unauthorized~~legislation ~~release~~and ofregulatory ~~confidential~~programs to reduce or ~~otherwise~~eliminate ~~protected~~future ~~information~~emissions ~~and corruption~~ of ~~data.~~GHG ~~Although~~could ~~to date we~~ have ~~not~~an ~~experienced~~adverse ~~any~~effect ~~material~~on ~~losses~~our ~~related to cyber-security attacks~~business, wefinancial ~~may~~condition ~~suffer~~and ~~such~~results ~~losses~~of ~~in the future~~operations. Also, ~~Moreover~~political, ~~the~~financial ~~various procedures~~ and ~~controls~~litigation werisks ~~use~~may toresult ~~monitor~~in ~~and protect against these threats and to mitigate~~ our ~~exposure~~restricting toor ~~such~~canceling ~~threats~~production ~~may~~activities, ~~not~~incurring beliability for ~~sufficient~~infrastructure indamages ~~preventing~~as ~~security~~a ~~threats~~result ~~from materializing. If any~~ of ~~these~~climatic ~~events~~changes ~~were~~or toimpairing ~~materialize,~~the ~~they~~ability ~~could lead~~ to ~~losses~~continue ~~of intellectual property and other sensitive information essential~~ to ~~our~~operate ~~business~~in ~~and~~an ~~could~~economic ~~have a material adverse effect on our business prospects, reputation and financial position~~manner.

~~Negative~~Finally, some ~~publicity~~scientists have concluded that increasing concentrations of GHG in the Earth’s atmosphere may ~~adversely~~produce ~~impact~~climate uschanges that have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic events. Our offshore operations are particularly at risk from severe climatic events. If any such effects of climate changes were to occur, they could have an adverse effect on our financial condition and results of operations.

~~Media~~We are ~~coverage~~subject ~~and~~to ~~public~~cyber ~~statements~~security ~~that~~risks. ~~insinuate~~A ~~improper~~cyber ~~actions~~incident bycould ~~us,~~occur ~~regardless~~and ~~of their factual accuracy or truthfulness, may~~ result in ~~negative~~information ~~publicity~~theft, ~~litigation~~data orcorruption, ~~governmental~~operational disruption ~~investigations by regulators. Addressing negative publicity and any resulting litigation~~ or investigations may distract management, increase costs and divert resources. Negative publicity may have an adverse impact on our reputation and the morale of our employees, which could materially adversely affect our business, financial ~~position, results of operations, cash flows, growth prospects and stock price~~loss.

~~Risks~~The oil ~~Related~~and natural gas industry has become increasingly dependent on digital technologies to ~~Investment~~conduct certain exploration, development, production, processing, and distribution activities. For example, we depend on digital technologies to interpret seismic data, conduct reservoir modeling, and record financial and other data. Our industry faces various security threats, including cyber-security threats. Cyber-security attacks, in particular are increasing and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information and corruption of data. Although to date we have not experienced any material losses related to cyber-security attacks, we may suffer such losses in the future. Moreover, the various procedures and controls we use to monitor and protect against these threats and to mitigate our ~~Securities~~exposure to such threats may not be sufficient in preventing security threats from materializing. If any of these events were to materialize, they could lead to losses of intellectual property and other sensitive information essential to our business and could have a material adverse effect on our business prospects, reputation, and financial position.

~~There~~Negative publicity ~~is a limited trading market for our shares. You~~ may ~~not~~adversely beimpact ~~able to sell your shares if you need money~~us.

~~Our~~Media coverage ~~common~~and ~~stock~~public isstatements ~~traded~~that oninsinuate ~~the~~improper ~~OTC~~actions ~~Markets~~by ~~(Pink Marketplace Tier)~~us, anregardless ~~inter-dealer automated quotation system for equity securities. During the three calendar months preceding filing~~ of ~~this~~their ~~report,~~factual ~~the~~accuracy ~~average~~or ~~daily trading volume of our common stock was approximately 1.0 million shares. As of December 20~~truthfulness, ~~2021,~~may result ~~we had approximately 190 record holders of our common stock (not including an indeterminate number of stockholders whose shares are held by brokers~~ in ~~“street~~negative ~~name”). There has been limited trading activity in our stock~~publicity, ~~and when it has traded~~litigation, ~~the~~or ~~price~~governmental ~~has~~investigations ~~fluctuated~~by ~~widely~~regulators. WeAddressing ~~consider~~negative ~~our~~publicity ~~common stock to be “thinly traded”~~ and any resulting ~~last~~litigation ~~reported~~or ~~sale~~investigations ~~prices~~ may ~~not~~distract bemanagement, aincrease ~~true~~costs, ~~market-based~~and ~~valuation~~divert ~~of the common stock~~resources. ~~Stockholders~~Negative publicity may ~~experience~~have an ~~difficulty~~adverse ~~selling~~impact ~~their~~on ~~shares~~our ifreputation ~~they~~and ~~choose~~the tomorale ~~do so because~~ of ~~the~~our ~~illiquid~~employees, ~~market~~which ~~and~~could ~~limited~~materially ~~public~~adversely ~~float~~affect ~~for~~ our ~~common~~business, ~~stock.~~financial position, ~~This~~results ~~situation is attributable to a number~~ of ~~factors~~operations, ~~including~~cash flows, ~~but~~growth ~~not~~prospects ~~limited~~and ~~to:~~stock price.

● we are a small company that is relatively unknown to stock analysts, stockbrokers, institutional investors and others in the investment community that generate or influence sales volume; and ● stock analysts, stockbrokers and institutional investors may be risk-averse and reluctant to follow a company such as ours that faces substantial doubt about its ability to continue as a going concern or to purchase or recommend the purchase of our shares until such time as we become more viable. 17

AsRisks Related ~~a result, an investor may find it difficult~~ to ~~dispose~~Investment ~~of, or to obtain accurate quotations of the price of our common stock. Accordingly, investors must assume they may have to bear the economic risk of an investment~~ in our common stock for an indefinite period of time and may lose their entire investment. There can be no assurance that a more active market for our common stock will develop, or if one should develop, there is no assurance that it will be sustained. This severely limits the liquidity of our common stock and would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.Securities

17 There is a limited trading market for our shares. You may not be able to sell your shares if you need money.

Our common stock is traded on the OTC Markets (Pink Marketplace Tier), an inter-dealer automated quotation system for equity securities. During the three calendar months preceding filing of this report, the average daily trading volume of our common stock was approximately 0.2 million shares. As of December 27, 2022, we had approximately 190 record holders of our common stock (not including an indeterminate number of stockholders whose shares are held by brokers in “street name”). There has been limited trading activity in our stock, and when it has traded, the price has fluctuated widely. We consider our common stock to be “thinly traded” and any last reported sale prices may ~~issue~~not ~~preferred~~be a true market-based valuation of the common stock. Stockholders may experience difficulty selling their shares if they choose to do so, because of the illiquid market and limited public float for our common stock. This situation is attributable to a number of factors including, but not limited to:

~~Our~~● ~~Certificate~~we ofare ~~Incorporation~~a ~~authorizes~~small ~~the~~company ~~issuance~~that ~~of up to 50 million shares of “blank check” preferred stock with designations, rights and preferences determined from time to time by the Board of Directors. Accordingly, our Board of Directors~~ is ~~empowered,~~relatively ~~without~~unknown ~~stockholder approval,~~ to ~~issue preferred~~ stock ~~with dividend~~analysts, ~~liquidation~~stockbrokers, ~~conversion,~~institutional ~~voting~~investors, orand ~~other~~others ~~rights,~~in ~~which~~the ~~could~~investment ~~adversely~~community ~~affect~~that ~~the~~generate ~~voting power~~ or ~~other~~influence ~~rights~~sales ofvolume; ~~the~~and ~~holders~~● ~~of the common~~ stock. ~~In the event of issuance~~analysts, ~~the~~stockbrokers ~~preferred~~and ~~stock~~institutional ~~could~~investors may be ~~utilized,~~risk-averse ~~under~~and ~~certain~~reluctant ~~circumstances,~~to asfollow a ~~method~~company ofsuch ~~discouraging,~~as ~~delaying~~ours orthat ~~preventing~~faces asubstantial ~~change~~doubt inabout ~~control~~its ofability ~~the~~to ~~Company.~~continue ~~Although~~as wea ~~have~~going noconcern ~~present~~or ~~intention~~ to ~~issue~~purchase ~~any~~or ~~shares~~recommend ofthe ~~its~~purchase ~~authorized~~of ~~preferred~~our ~~stock,~~shares ~~there~~until ~~can~~such betime noas ~~assurance that~~ we ~~will~~become ~~not~~more ~~do so in the future~~viable.

~~Future~~As a ~~sales~~result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of our common stock. Accordingly, ~~could~~investors ~~lower~~must assume they may have to bear the economic risk of an investment in our common stock for an indefinite period of time and may lose their entire investment. There can be no assurance that a more active market for our common stock will develop, or if one should develop, there is no assurance that it will be sustained. This severely limits the liquidity of our common stock and would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.

We will likely sell additional shares of common stock to fund working capital obligations in future periods. We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock, or the perception that such sales could occur, may ~~adversely~~issue ~~affect~~preferred ~~prevailing market prices for our common~~ stock. ~~Moreover, sales of our common stock by existing shareholders could also depress the price of our common stock.~~

Our Certificate ~~common~~of ~~stock~~Incorporation isauthorizes ~~subject~~the issuance of up to ~~the~~50 million shares of “~~penny~~blank ~~stock~~check” ~~rules~~preferred ofstock ~~the~~with designations, ~~SEC~~rights and ~~FINRA~~preferences determined from time to time by the Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights, which ~~makes~~could ~~transactions~~adversely inaffect ~~our~~the voting power or other rights of the holders of the common stock. ~~cumbersome~~In ~~and~~the ~~may~~event ~~reduce~~of issuance, the ~~value~~preferred stock could be utilized, under certain circumstances, as a method of andiscouraging, ~~investment~~delaying, or preventing a change in control of the Company. Although we have no present intention to issue any shares of its authorized preferred stock, there can be no assurance that we will not do so in the future.

~~The~~Future sales ~~SEC has adopted Rule 15g-9 which establishes the definition~~ of aour ~~“penny~~common stock,” ~~for~~could ~~the~~lower ~~purposes~~our ~~relevant~~stock ~~to us, as any equity security that has a market~~ price ~~of less than $5~~.~~00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:~~

●We will ~~that~~likely asell ~~broker~~additional orshares ~~dealer~~of ~~approve~~common astock ~~person’s~~to ~~account~~fund ~~for~~working ~~transactions~~capital obligations in ~~penny~~future ~~stocks;~~periods. ~~and~~We ●cannot predict the size ~~broker~~of future issuances of our common stock or ~~dealer~~the ~~receives~~effect, ~~from~~if any, that future issuances and sales of shares of our common stock will have on the ~~investor~~market aprice ~~written~~of ~~agreement~~our tocommon stock. Sales of substantial amounts of our common stock, or the ~~transaction~~perception that such sales could occur, ~~setting~~may ~~forth~~adversely ~~the~~affect ~~identity~~prevailing ~~and~~market ~~quantity~~prices for our common stock. Moreover, sales of ~~the~~our ~~penny~~common stock toby existing beshareholders ~~purchased~~could also depress the price of our common stock.

InOur common ~~order~~stock is subject to ~~approve~~the a“penny ~~person’s~~stock” ~~account~~rules ~~for~~of the SEC and FINRA, which makes transactions in ~~penny~~our ~~stocks,~~common stock cumbersome and may reduce the ~~broker~~value orof ~~dealer~~an ~~must:~~investment in the stock.

●The SEC ~~obtain~~has ~~financial~~adopted ~~information~~Rule ~~and~~15g-9 ~~investment~~which ~~experience~~establishes ~~and~~the ~~objectives~~definition of a “penny stock,” for the ~~person;~~purposes ~~and~~relevant ●to ~~make~~us, aas any ~~reasonable~~equity ~~determination~~security that ~~the~~has ~~transactions~~a inmarket ~~penny~~price ~~stocks~~of ~~are~~less ~~suitable~~than ~~for~~$5.00 ~~that~~per ~~person~~share ~~and~~or ~~the~~with ~~person~~an ~~has~~exercise ~~sufficient~~price ~~knowledge~~of ~~and~~less ~~experience~~than in$5.00 ~~financial~~per ~~matters~~share, subject to becertain ~~capable~~exceptions. ofFor ~~evaluating~~any ~~the~~transaction ~~risks~~involving ofa ~~transactions~~penny instock, ~~penny~~unless ~~stocks.~~exempt, the rules require:

~~The~~● that a broker or dealer ~~must~~approve ~~also~~a ~~deliver,~~person’s ~~prior~~account tofor ~~any~~transactions ~~transaction~~ in a penny ~~stock,~~stocks; aand ~~disclosure~~● ~~schedule~~the ~~prescribed~~broker byor dealer receives from the ~~SEC~~investor ~~relating~~a written agreement to the ~~penny~~transaction, ~~stock~~setting ~~market,~~forth ~~which,~~the inidentity ~~highlight~~and ~~form~~quantity ~~sets~~of ~~forth:~~the penny stock to be purchased.

●In order ~~the~~to ~~basis~~approve ona ~~which~~person’s ~~the~~account ~~broker~~for ortransactions ~~dealer~~in ~~made~~penny ~~the~~stocks, ~~suitability determination; and ● that~~ the broker or dealer ~~received a signed, written agreement from the investor prior to the transaction.~~must:

~~Generally,~~● ~~brokers~~obtain ~~may~~financial beinformation ~~less~~and ~~willing~~investment toexperience ~~execute~~and ~~transactions~~objectives inof ~~securities~~the ~~subject~~person; toand ~~the~~● ~~“penny~~make ~~stock”~~a ~~rules.~~reasonable ~~This~~determination ~~may~~that ~~make~~the ittransactions ~~more~~in ~~difficult~~penny stocks are suitable for ~~investors~~that toperson ~~dispose~~and ofthe ~~common~~person ~~stock~~has ~~and~~sufficient ~~cause~~knowledge aand ~~decline~~experience in ~~the~~financial ~~market~~matters ~~value~~to be capable of ~~stock~~evaluating the risks of transactions in penny stocks.

~~Disclosure~~The broker ~~also~~or ~~has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-~~dealer ~~and~~must ~~the~~also ~~registered representative~~deliver, ~~current~~prior ~~quotations for the securities and the rights and remedies available~~ to anany ~~investor~~transaction in ~~cases~~a ~~of fraud in~~ penny stock ~~transactions. Finally~~, ~~monthly~~a ~~statements~~disclosure ~~have~~schedule toprescribed beby ~~sent~~the ~~disclosing~~SEC ~~recent~~relating to ~~price information for~~ the penny stock ~~held~~market, which, in ~~the~~highlight ~~account~~form ~~and~~sets ~~information on the limited market in penny stocks.~~forth:

In● ~~addition to~~ the ~~“penny~~basis ~~stock”~~on ~~rules~~which ~~promulgated by~~ the ~~SEC,~~broker ~~FINRA~~or ~~has adopted rules that require a broker-~~dealer tomade ~~have~~the ~~reasonable~~suitability ~~grounds~~determination; ~~for~~and ~~believing~~● that anthe ~~investment~~broker isor ~~suitable~~dealer ~~for~~received a ~~customer when recommending the investment to that customer. Prior to recommending speculative low-priced securities to their non-institutional customers~~signed, ~~broker-dealers~~written ~~must~~agreement ~~make~~from ~~reasonable efforts to obtain information about~~ the ~~customer’s~~investor ~~financial~~prior status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to ~~recommend that their customers buy our common stock, which may limit investors’ ability to buy and sell our stock and have an adverse effect on~~ the ~~market for our shares~~transaction.

~~The~~Generally, brokers ~~price~~may ofbe ~~our~~less ~~common~~willing to execute transactions in securities subject to the “penny stock” ~~will~~rules. ~~remain~~This ~~volatile,~~may ~~which~~make it ~~could~~more ~~lead~~difficult for investors to ~~losses~~dispose byof ~~investors~~common stock and ~~costly~~cause ~~securities~~a ~~litigation~~decline in the market value of stock.

~~The trading price of our common stock is likely to be highly volatile and could fluctuate in response to factors such as:~~ 18

●Disclosure also ~~actual~~has orto ~~anticipated~~be ~~variations~~made about the risks of investing in ~~our~~penny ~~operating~~stocks ~~results~~in ~~including~~both ~~but~~public ~~not~~offerings ~~limited~~and in secondary trading and about the commissions payable to ~~leasing,~~both ~~drilling~~the broker-dealer and the registered representative, current quotations for the securities and ~~discovery~~the rights and remedies available to an investor in cases of ~~oil~~fraud ~~and~~in ~~gas;~~penny ●stock ~~the~~transactions. Finally, monthly statements have to be sent disclosing recent price ofinformation ~~oil~~for the penny stock held in the account and ~~gas;~~information on the limited market in penny stocks.

18 In addition to the “penny stock” rules promulgated by the SEC, FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that an investment is suitable for a customer when recommending the investment to that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit investors’ ability to buy and sell our stock and have an adverse effect on the market for our shares.

●The price ~~announcements~~ of ~~developments by us,~~ our strategic partners or our competitors; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● adoption of new accounting standards affecting our Company’s industry; ● additions or departures of key personnel; ● sales of our common stock orwill ~~other~~remain ~~securities~~volatile, inwhich ~~the~~could ~~open~~lead ~~market; ● our ability~~ to ~~acquire~~losses ~~seismic~~by ~~data~~investors and ~~other~~costly ~~intellectual~~securities property on commercially reasonable terms and to defend such intellectual property from third party claims; ● the effects of government regulation, permitting and other legal requirements, including new legislation or regulation; ● litigation~~; and ● other events or factors, many of which are beyond our control~~.

The trading ~~stock market is subject to significant~~ price ~~and volume fluctuations. In the past, following periods~~ of ~~volatility~~our incommon ~~the~~stock ~~market~~is ~~price~~likely ofto ~~companies’~~be ~~securities,~~highly ~~securities~~volatile ~~class~~and ~~action litigation has often been initiated against those companies. Litigation initiated against us, whether or not successful,~~ could ~~result~~fluctuate in ~~substantial~~response ~~costs~~to ~~and~~factors ~~diversion~~such ~~of our management’s attention and resources, which could harm our business and financial condition.~~as:

We● doactual or anticipated variations in our operating results including but not ~~anticipate~~limited ~~paying~~to ~~any~~leasing, ~~dividends~~drilling, onand ~~our~~discovery ~~common~~of ~~stock.~~oil and gas;

~~Cash~~● ~~dividends have never been declared or paid on our common stock, and we do not anticipate such a declaration or payment for~~ the ~~foreseeable~~price ~~future. We cannot assure stockholders~~ of aoil ~~positive~~and ~~return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment in the Company.~~gas;

~~Our~~● ~~certificate~~announcements of ~~incorporation~~developments ~~could~~by ~~make a merger~~us, ~~tender~~our ~~offer,~~strategic partners or ~~proxy~~our ~~contest difficult.~~competitors;

At● ~~the~~announcements ~~annual~~by ~~shareholder~~us ~~meeting~~or ~~in May 2014, shareholders approved an amendment and restatement of~~ our ~~certificate~~competitors of ~~incorporation~~significant toacquisitions, ~~(i)~~strategic ~~eliminate the ability of stockholders to act by written consent and (ii) to classify the board of directors into three classes with staggered terms. These amendments may discourage~~partnerships, ~~delay~~joint ventures or ~~prevent~~capital ~~a change in control.~~commitments;

~~Any~~● ofadoption ~~the risk factors discussed herein could have a significant material adverse effect on our business, results~~ of ~~operations,~~new ~~financial~~accounting ~~condition,~~standards oraffecting liquidity. Readers of this Report should not consider any descriptions of these risk factors to be a complete set of all potential risks that could affect GulfSlope. These factors should be carefully considered together with the other information contained in this Report and the other reports and materials filed by us with the SEC. Further, any of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence of certain of them may in turn cause the emergence or exacerbate the effect of others. Such a combination could materially increase the severity of the impact of these risks on our ~~business,~~Company’s ~~results of operations, financial condition, or liquidity.~~industry;

~~ITEM~~● ~~1B.~~additions ~~UNRESOLVED~~or ~~STAFF~~departures ~~COMMENTS~~of key personnel;

~~None.~~● sales of our common stock or other securities in the open market;

~~ITEM~~● 2.our ~~PROPERTIES~~ability to acquire seismic data and other intellectual property on commercially reasonable terms and to defend such intellectual property from third party claims;

~~For~~● athe ~~discussion~~effects of ~~our~~government ~~oil~~regulation, permitting and ~~gas~~other ~~properties~~legal requirements, ~~see~~including ~~Item~~new 1.legislation ~~Business.~~or regulation;

We● ~~lease~~litigation; ~~approximately 5,000 square feet of office space at our corporate headquarters at 1331 Lamar St., Suite 1665, Houston, Texas 77010. We own office equipment, office furniture,~~ and ~~computer equipment.~~

~~ITEM~~● 3.other ~~LEGAL~~events ~~PROCEEDINGS~~or factors, many of which are beyond our control.

~~From~~The stock ~~time~~market is subject to ~~time,~~significant price and volume fluctuations. In the ~~Company~~past, ~~may~~following ~~become~~periods ~~involved~~of volatility in ~~litigation~~the ~~relating~~market price toof ~~claims~~companies’ ~~arising~~securities, ~~out~~securities ofclass ~~its~~action ~~operations~~litigation inhas ~~the~~often ~~normal~~been ~~course~~initiated ofagainst ~~business~~those companies. NoLitigation initiated ~~legal~~against ~~proceedings~~us, ~~government~~whether ~~actions,~~or ~~administrative~~not ~~actions~~successful, ~~investigations~~could orresult ~~claims~~in ~~are~~substantial ~~currently~~costs ~~pending~~and ~~against~~diversion usof orour ~~involve~~management’s ~~the~~attention and ~~Company~~resources, which could harm our business and financial condition.

~~ITEM~~We do 4.not ~~MINE~~anticipate ~~SAFETY~~paying ~~DISCLOSURES~~any dividends on our common stock.

~~Not~~Cash dividends ~~applicable~~have never been declared or paid on our common stock, and we do not anticipate such a declaration or payment for the foreseeable future. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment in the Company.

19 Any of the risk factors discussed herein could have a significant material adverse effect on our business, results of operations, financial condition, or liquidity. Readers of this Report should not consider any descriptions of these risk factors to be a complete set of all potential risks that could affect GulfSlope. These factors should be carefully considered together with the other information contained in this Report and the other reports and materials filed by us with the SEC. Further, any of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence of certain of them may in turn cause the emergence or exacerbate the effect of others. Such a combination could materially increase the severity of the impact of these risks on our business, results of operations, financial condition, or liquidity.

~~PART~~ ITEM 1B. IIUNRESOLVED STAFF COMMENTS

~~ITEM 5~~None. ~~MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~

~~Market~~ ITEM 2. ~~Information~~PROPERTIES

~~Our~~For a ~~common~~discussion ~~stock, $0.001 par value per share, is quoted on the OTC Markets (Pink Marketplace Tier) under the symbol “GSPE.” Shares~~ of our ~~common~~oil ~~stock~~and ~~have~~gas ~~historically~~properties, ~~been~~see ~~thinly~~Item ~~traded~~1. ~~As a result, our stock price as quoted by the OTC Markets may not reflect an actual or perceived value~~Business.

~~Holders~~ ITEM 3. LEGAL PROCEEDINGS

~~The~~From time ~~number~~to oftime, ~~record~~the ~~holders~~Company may become involved in litigation relating to claims arising out of ~~the~~its ~~Company’s~~operations ~~common~~in ~~stock,~~the asnormal course of ~~December~~business. 20No legal proceedings, ~~2021~~government actions, isadministrative ~~approximately~~actions, ~~190~~investigations or claims are currently pending against us or involve the Company.

~~Dividends~~ 19

~~The Company has not declared any dividends with respect to its common stock and does not intend to declare any dividends in the foreseeable future~~ ITEM 4. ~~The~~MINE ~~future~~SAFETY ~~dividend policy of the Company cannot be ascertained with any certainty. There are no material restrictions limiting the Company’s ability to pay cash dividends on its common stock.~~DISCLOSURES

~~Securities Authorized for Issuance Under Equity Compensation Plans~~Not applicable.

The following table sets forth information with respect to the equity compensation plans available to directors, officers, certain employees and certain consultants of the Company at September 30, 2021. 20

	(a)		(b)		(c)
Plan category	Number of securities to be issued upon exercise of outstanding stock options(1)		Weighted-average exercise price of outstanding stock options		Number ofsecurities remaining available for future issuance under equity compensationplans(2)
Equity compensation plans approved by security holders		146,000,000	$	0.0444		19,970,000
Equity compensation plans not approved by security holders		—		—		—
Total		146,000,000				19,970,000

PART II

(1)	This column reflects the maximum number of shares of our common stock subject to stock option awards granted as Inducement Shares or under the 2014 and 2018 Omnibus Incentive Plans vested and unvested.
(2)	This column reflects the total number of shares of our common stock remaining available for issuance under the 2014 and 2018 Omnibus Incentive Plans.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~Recent Sales of Unregistered Securities~~Market Information

~~None~~Our common stock, $0.001 par value per share, is quoted on the OTC Markets (Pink Marketplace Tier) under the symbol “GSPE.” Shares of our common stock have historically been thinly traded. As a result, our stock price as quoted by the OTC Markets may not reflect an actual or perceived value.

~~ITEM 6. SELECTED FINANCIAL DATA~~Holders

~~Not~~The number ~~required~~of ~~for~~record ~~smaller~~holders ~~reporting~~of ~~companies~~the Company’s common stock, as of December 27, 2022, is approximately 190.

20 Dividends

~~ITEM~~The Company 7has not declared any dividends with respect to its common stock and does not intend to declare any dividends in the foreseeable future. ~~MANAGEMENT’S~~The ~~DISCUSSION~~future ~~AND~~dividend ~~ANALYSIS~~policy OFof ~~FINANCIAL~~the ~~CONDITION~~Company ~~AND~~cannot ~~RESULTS~~be OFascertained ~~OPERATIONS~~with any certainty. There are no material restrictions limiting the Company’s ability to pay cash dividends on its common stock.

~~The~~Securities Authorized ~~following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources~~ for ~~the~~Issuance ~~periods~~Under ~~described.~~Equity ~~This~~Compensation discussion contains forward-looking statements. Please see “Forward-Looking Statements” above for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. The following discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared on the accrual basis of accounting, whereby revenues are recognized when earned, and expenses are recognized when incurred. You should read this management’s discussion and analysis of our financial condition and results of operations in conjunction with our historical financial statements included elsewhere in this Annual Report. Our future results could differ materially from our historical results due to a variety of factors, many of which are out of our control.Plans

~~Overview~~The following table sets forth information with respect to the equity compensation plans available to directors, officers, certain employees and certain consultants of the Company at September 30, 2022.

GulfSlope Energy, Inc. is an independent crude oil and natural gas exploration and production company whose interests are concentrated in the United States Gulf of Mexico federal waters. We are a technically driven company and we use our licensed 2.2 million acres of advanced three-dimensional (“3-D”) seismic data to identify, evaluate, and acquire assets with attractive economic profiles. GulfSlope Energy commenced commercial operations in March 2013. GulfSlope Energy was originally organized as a Utah corporation in 2004 and became a Delaware corporation in 2012.

	(a)		(b)		(c)
Plan category	Number of securities to be issued upon exercise of outstanding stock options⁽¹⁾		Weighted average exercise price of outstanding stock options		Number of securities remaining available for future issuance under equity compensation plans⁽²⁾
Equity compensation plans approved by security holders		146,000,000	$	0.0444		19,970,000
Equity compensation plans not approved by security holders		—		—		—
Total		146,000,000				19,970,000

We have focused our operations in the United States Gulf of Mexico because we believe this area provides us with favorable geologic and economic conditions, including multiple reservoir formations, comprehensive geologic databases, extensive infrastructure, relatively favorable royalty regime, and an attractive acquisition market and because our management and technical teams have significant experience and technical expertise in this geologic province. Additionally, we licensed 2.2 million acres of advanced 3-D seismic data, a significant portion of which has been enhanced by new, state-of-the-art reprocessing and noise attenuation techniques including reverse time migration depth imaging. We have used our broad regional seismic database and our reprocessing efforts to generate and high-grade oil and natural gas prospects. The use of our extensive seismic database, coupled with our ability, knowledge, and expertise to effectively reprocess this seismic data, allows us to further optimize our drilling operations and to effectively evaluate acquisition and joint venture opportunities. We consistently assess our prospect inventory in order to deploy capital as efficiently as possible. We have given preference to areas with water depths of 450 feet or less where production infrastructure already exists, which will allow for any discoveries to be developed rapidly and cost effectively with the goal to reduce economic risk while increasing returns.

⁽¹⁾	This column reflects the maximum number of shares of our common stock subject to stock option awards granted as Inducement Shares or under the 2014 and 2018 Omnibus Incentive Plans vested and unvested.
⁽²⁾	This column reflects the total number of shares of our common stock remaining available for issuance under the 2014 and 2018 Omnibus Incentive Plans.

~~Technical~~Recent Sales ~~Strategy~~of Unregistered Securities

We believe that a major obstacle to identifying potential hydrocarbon accumulations globally has been the inability of seismic technology to accurately image deeper geologic formations because of overlying massive, extensive, and complex salt bodiesNone. Large and thick laterally extensive subsurface salt layers highly distort the seismic ray paths traveling through them, which often has led to misinterpretation of the underlying geology and the potential major accumulations of oil and gas. We believe the opportunity exists for a technology-driven company to extensively apply advanced seismic acquisition and processing technologies, with the goal of achieving attractive commercial discovery rates for exploratory wells, and their subsequent appraisal and development, potentially having a very positive impact on returns on invested capital. These tools and techniques have been proven to be effective in deep water exploration and production worldwide, and we are using them to identify and drill targets below the salt bodies in an area of the shallower waters of the Gulf of Mexico where industry activity has largely been absent for over 20 years. In fact, GulfSlope management led the early industry teams in their successful efforts to discover and develop five new fields below the extensive salt bodies in our core area during the 1990’s, which have produced over 125 million barrels of oil equivalent.

Our technical approach to exploration and development is to deploy a team of highly experienced geo-scientists who have current and extensive understanding of the geology and geophysics of the petroleum system within our core area, thereby decreasing the traditional timing and execution risks of advancing up a learning curve ITEM 6. ~~For~~SELECTED ~~data~~FINANCIAL ~~licensing, re-processing and interpretation, our technical staff has prioritized specific geographic areas within our 2.2 million acres of seismic coverage, with the goal to optimize capital outlays.~~DATA

~~Modern~~Not required ~~3-D seismic datasets with acquisition parameters that are optimal~~ for ~~improved~~smaller ~~imaging~~reporting ~~at multiple depths are readily available in many of these sub-basins across our core area, and they can be licensed on commercially reasonable terms~~companies. The application of state-of-the-art seismic imaging technology is necessary to optimize delineation of prospective structures and to detect the presence of hydrocarbon-charged reservoirs below many complex salt bodies. An example of such a seismic technology is reverse time migration, which we believe to be the most accurate, fastest, and yet affordable, seismic imaging technology for critical depth imaging available today.

~~Lease~~ITEM 7. ~~and~~MANAGEMENT’S ~~Acquisition~~DISCUSSION ~~Strategy~~AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Our~~The following ~~prospect~~discussion ~~identification~~highlights ~~and~~the ~~analytical~~principal ~~strategy~~factors isthat ~~based~~have onaffected ~~a thorough understanding of the geologic trends within~~ our ~~core~~financial ~~area.~~condition ~~Exploration~~and ~~efforts~~results ~~have~~of ~~been~~operations ~~focused~~as well inas ~~areas~~our ~~where~~liquidity ~~lease~~and ~~acquisition~~capital ~~opportunities~~resources ~~are~~for ~~readily~~the ~~available~~periods described. WeThis ~~entered~~discussion ~~into~~contains ~~two master 3~~forward-Dlooking ~~license agreements, together covering approximately 2~~statements.2 ~~million~~Please see ~~acres~~“Forward-Looking ~~and~~Statements” weabove ~~have~~for ~~completed~~a ~~advanced~~discussion ~~processing~~of onthe ~~select~~uncertainties, ~~areas~~risks ~~within~~and ~~this~~assumptions ~~licensed~~associated ~~seismic~~with these ~~area~~forward-looking ~~exceeding one million acres~~statements. WeThe ~~can~~following ~~expand~~discussion ~~this coverage~~ and ~~perform~~analysis ~~further~~of ~~advanced~~our ~~processing,~~financial ~~both~~condition ~~with~~and ~~currently~~results ~~licensed~~of ~~seismic~~operations ~~data~~is based ~~and~~on ~~seismic~~our ~~data~~consolidated tofinancial bestatements, ~~acquired.~~which We have ~~sought~~been toprepared ~~acquire~~on ~~and reprocess~~ the ~~highest~~accrual ~~resolution~~basis ~~data~~of ~~available~~accounting, inwhereby ~~the potential~~revenues are ~~prospect’s~~recognized ~~direct~~when ~~vicinity.~~earned, ~~This~~and ~~includes~~expenses ~~advanced~~are ~~imaging~~recognized ~~information~~when toincurred. ~~further~~You ~~our~~should ~~understanding~~read ofthis ~~a particular reservoir~~management’s ~~characteristics,~~discussion ~~including both trapping mechanics~~ and analysis ~~fluid~~of ~~migration~~our ~~patterns.~~financial ~~Reprocessing~~condition isand ~~accomplished~~results ~~through a series~~ of ~~model~~operations ~~building~~in ~~steps~~conjunction ~~that~~with ~~incorporate~~our ~~the~~historical ~~geometry~~financial ofstatements ~~the~~included elsewhere ~~geology~~in tothis ~~optimize~~Annual ~~the final image~~Report. Our ~~integration~~future ofresults ~~existing~~could ~~geologic~~differ ~~understanding~~materially ~~and~~from ~~enhanced~~our ~~seismic~~historical ~~processing~~results ~~and~~due ~~interpretation~~to ~~provides~~a usvariety ~~with~~of ~~unique~~factors, many ~~insights~~of ~~and~~which ~~perspectives on existing producing areas and especially underexplored formations below and adjacent to salt bodies that~~ are ~~highly~~out ~~prospective~~of ~~for~~our ~~hydrocarbon production~~control.

21 21

We currently hold two leases and we are evaluating the acquisition of additional leases in our core area. Our two leases have a five-year primary term and expire on June 30, 2022 and October 31, 2025. BOEM’s regulatory framework provides multiple options for leaseholders to apply to receive extensions of lease terms under specified conditions. GulfSlope is exploring all options contained in BOEM’s regulatory framework to extend the terms of the leases. Additional prospective acreage can be obtained through lease sales, farm-in, or purchase. As is consistent with a prudent and successful exploration approach, we believe that additional seismic licensing, acquisition, processing, and/or interpretation may become highly advantageous, in order to more precisely define the most optimal drillable location(s), particularly for development of discoveries. Overview

WeGulfSlope Energy, ~~continue~~Inc. tois ~~evaluate~~an ~~potential~~independent ~~producing~~crude ~~property~~oil ~~acquisitions~~and innatural gas exploration and production company whose interests are concentrated in the ~~offshore~~United States Gulf of Mexico federal waters. We are a technically driven company, ~~taking~~and ~~advantage~~we ofuse our ~~highly~~licensed ~~specialized~~2.2 ~~subsurface~~million ~~and~~acres of ~~engineering~~advanced ~~capabilities~~three-dimensional (“3-D”) seismic data to identify, ~~knowledge~~evaluate, and ~~expertise~~acquire toassets ~~identify~~with attractive ~~opportunities~~economic profiles. ~~Any~~GulfSlope ~~merger~~Energy orcommenced ~~acquisition~~commercial isoperations ~~likely~~in toMarch be2013. ~~financed~~GulfSlope ~~through~~Energy ~~the~~was ~~issuance~~originally oforganized ~~debt~~as a Utah corporation in 2004 and~~/or~~ ~~equity~~became ~~securities~~a Delaware corporation in 2012.

~~Drilling~~We have focused our operations in the United States Gulf of Mexico because we believe this area provides us with favorable geologic and ~~other~~economic ~~Exploratory~~conditions, including multiple reservoir formations, comprehensive geologic databases, extensive infrastructure, relatively favorable royalty regime, and ~~Development~~an ~~Strategies~~attractive acquisition market and because our management and technical teams have significant experience and technical expertise in this geologic province. Additionally, we licensed 2.2 million acres of advanced 3-D seismic data, a significant portion of which has been enhanced by new, state-of-the-art reprocessing and noise attenuation techniques including reverse time migration depth imaging. We have used our broad regional seismic database and our reprocessing efforts to generate and high-grade oil and natural gas prospects. The use of our extensive seismic database, coupled with our ability, knowledge, and expertise to effectively reprocess this seismic data, allows us to further optimize our drilling operations and to effectively evaluate acquisition and joint venture opportunities. We consistently assess opportunities for drilling and producing property acquisitions in order to deploy capital as efficiently as possible. We have given preference to areas with water depths of 450 feet or less where production infrastructure already exists, which will allow for any discoveries to be developed rapidly and cost effectively with the goal to reduce economic risk while increasing returns. We also continue to evaluate attractive opportunities in deeper water.

Our plan has been to partner with other entities which could include oil and gas companies and/or financial investors. Our goal is to diversify risk and minimize capital exposure to exploration drilling costs. We expect a portion of our exploration costs to be paid by our partners through these transactions, in return for our previous investment in prospect generation and delivery of an identified prospect on acreage we control. Such arrangements are a commonly accepted industry method of proportionately recouping pre-drill cost outlays for seismic, land, and associated interpretation expenses. We cannot assure you, however, that we will be able to enter into any such arrangements on satisfactory terms. In any drilling, we expect that our retained working interest will be adjusted based upon factors such as geologic risk and well cost. Early monetization of a discovered asset or a portion of a discovered asset is an option for the Company as a means to fund development or additional exploration projects as an alternative to potential equity or debt offerings. However, if a reasonable value were not received from the market at the discovery stage, then we may elect to retain (subject to lease terms) the discovery asset undeveloped, until a reasonable offer is received in line with our perceived market value, or we may elect to seek development partners on a promoted basis in order to substantially reduce capital development requirements.Recent Developments

~~Recent~~During the ~~Developments~~past fiscal year, the Company has conducted engineering, geotechnical and economic evaluations on a total of 10 producing property acquisitions, all located in the Gulf of Mexico. The Company submitted bids on four of those opportunities, one of which was deemed non-competitive by the seller. The Company is currently engaged in seeking debt and equity financing for the remaining opportunities.

~~The~~Factors Affecting ~~Company~~Comparability ~~has been conducting pre-drill operations for the Tau prospect which is anticipated to be re-drilled to a total depth~~ of ~~approximately~~Future ~~21,000 feet. The Exploration Plan has been filed with and approved by BOEM and the Application for Permit to Drill (“APD”) has been filed with BSEE and is pending approval.~~ Results

~~The Tau Prospect is located approximately six miles northeast of the Mahogany Field, discovered~~ Success in ~~1993.~~Acquiring ~~The~~Oil Mahogany Field is recognized as the first commercial discovery below allochthonous salt in the Gulf of Mexico. The Tau Prospect is defined by mapping of 3D seismic reprocessed by RTM methods. Drilling operations on the Tau subsalt prospect commenced in September 2018. The wellbore was designed to test multiple Miocene horizons trapped against a well-defined salt flank, including equivalent reservoir sands discovered and ~~developed~~Gas atLeases ~~the~~or ~~nearby Mahogany Field~~Prospects. ~~The~~As ~~surface location for Tau was located in 305 feet of water. In January 2019, the Tau well experienced an underground control of well event and as~~ a result, ~~an insurance claim was filed with the insurance Underwriters for a net amount~~ of ~~approximately~~our ~~$10.8~~3-D ~~million~~seismic ~~for~~imaging ~~100%~~and ~~working interest. The insurance claim was subsequently approved. On May 13~~reprocessing, ~~2019,~~we ~~GulfSlope~~currently ~~announced~~hold ~~the~~one lease ~~Tau~~block ~~No. 1~~in ~~well was drilled to a measured depth of 15,254 feet, as compared to~~ the ~~originally permitted 29,857 foot measured depth~~U. ~~Producible hydrocarbon zones were not established to that depth, but hydrocarbon shows were encountered~~S. ~~Complex~~Gulf ~~geomechanical conditions required two by-pass wellbores, one sidetrack wellbore, and eight casing strings to reach the depth~~ of 15Mexico,~~254~~ ~~feet.~~which ~~Equipment~~we ~~limitations~~believe ~~prevented~~may ~~further~~potentially ~~drilling~~contain ateconomically ~~that~~recoverable ~~time~~reserves. In addition, the drilling rig had contractual obligations related to another operator. Due to these factors, the Company elected to plug the well in a manner that would allow for re-entry at a later time.

~~Outlook~~We have No Proved Reserves. We have identified prospects based on available seismic and geological information that indicate the potential presence of oil or gas. Some of our current prospects may require additional seismic data reprocessing and interpretation. Even when properly used and interpreted, seismic data and visualization techniques are only tools used to assist geoscientists in identifying structures and hydrocarbon indicators and do not enable the interpreter to have certainty as to whether hydrocarbons are, in fact, present in those structures. We do not know if any prospect will contain oil or gas in sufficient quantities or quality to recover drilling and completion costs or to be economically viable.

InSuccess in the ~~first~~Discovery ~~quarter of 2020, the COVID-19 outbreak spread quickly across the globe. Federal, state~~ and ~~local~~Development ~~governments mobilized to implement containment mechanisms and minimize impacts to their populations and economies. Various containment measures, such as stay-at-home orders, closures~~ of ~~restaurants and banning of group gatherings resulted in a severe drop in general economic activity, as well as a corresponding decrease in global energy demand~~Reserves. ~~Additionally,~~Because ~~the risks associated with COVID-19 impacted our workforce and the way~~ we meet our business objectives. Due to concerns over health and safety, we asked our employees to work remotely. In 2021 we began to plan a process to phase employees to return to the office. Working remotely has not significantly impacted our ability to maintain operations or caused us to incur significant additional expenses; however, we are unable to predict the duration or ultimate impact of these measures. In addition, actions by the Organization of Petroleum Exporting Countries and other high oil exporting countries like Russia (“OPEC+”) have ~~negatively~~no ~~impacted~~operating ~~crude~~history ~~oil~~in prices throughout 2020 and early 2021. These rapid and unprecedented events pushed crude oil storage near capacity and driven prices down significantly. On January 27, 2021, President Biden issued an executive order that commits to substantial action on climate change, calling for, among other things, the ~~elimination of subsidies provided to the fossil fuel industry, increased~~ production of ~~offshore wind energy and increased emphasis on climate-related risks across governmental agencies and economic sectors. The Biden Administration has also taken actions to limit~~ oil and gas development activities on the OCS. Other actions that could be pursued by the Biden Administration include more restrictive requirements for the establishment of pipeline infrastructure or the permitting of liquefied natural gas export facilities, asour ~~well~~future results ~~as more stringent emissions standards for oil and gas facilities. These events have been the primary cause~~ of ~~the~~operations ~~significant supply-~~and~~-demand~~ ~~imbalance~~financial ~~for~~condition ~~oil,~~will ~~first~~be ~~significantly~~directly ~~lowering oil pricing and later significantly increasing oil pricing. The uncertainty in the trajectory of oil and gas prices and in future government actions, has greatly~~ affected ~~energy~~ ~~companies~~by ~~plans~~our ~~and~~ability ~~budgets and may continue~~ to ~~exist~~discover ~~in future periods. The Company has evaluated the effect of these factors on its business~~ and ~~the~~develop ~~Company~~reserves ~~has~~through our ~~determined that these factors will most likely cause a delay in the Company’s 2022~~ drilling ~~program~~activities. ~~The Company continues to monitor the economic environment and evaluate its continuing impact on the business.~~

22 Oil and Gas Revenue. We have not yet commenced oil and gas production. If and when we do commence production, we expect to generate revenue from such production. No oil and gas revenue is reflected in our historical financial statements.

~~Factors~~General and ~~Affecting~~Administrative ~~Comparability~~Expenses. ofWe ~~Future~~expect ~~Results~~that our general and administrative expenses will increase in future periods when we commence drilling operations.

~~Success~~Demand and inPrice. ~~Acquiring~~The ~~Oil~~demand for oil and ~~Gas~~gas ~~Leases~~is orsusceptible ~~Prospects~~to volatility related to, among other factors, the level of global economic activity and may also fluctuate depending on the performance of specific industries. AsWe expect that a ~~result~~decrease ofin ~~our~~economic ~~3-D~~activity, in ~~seismic~~the ~~imaging~~United States and ~~reprocessing~~elsewhere, wewould ~~currently~~adversely ~~hold~~affect ~~two~~demand ~~lease~~for ~~blocks~~any inoil ~~the~~and Ugas we may produce.S. ~~Gulf~~Since ofwe ~~Mexico~~have not generated revenues, ~~which~~these wekey ~~believe~~factors ~~may~~will ~~potentially~~only ~~contain~~affect ~~economically~~us ~~recoverable~~if ~~reserves~~and when we produce and sell hydrocarbons.

~~We have No Proved Reserves. We have identified prospects based on available seismic and geological information that indicate the potential presence~~ Results of ~~oil~~Operations ~~or gas, and we own the drilling and production rights~~ for these prospects. Some of our current prospects may require additional seismic data reprocessing and interpretation. Even when properly used and interpreted, seismic data and visualization techniques are only tools used to assist geoscientists in identifying structures and hydrocarbon indicators and do not enable the ~~interpreter~~Year toEnded ~~have~~September ~~certainty as to whether hydrocarbons are~~30, ~~in fact~~2022, ~~present~~compared ~~in those structures. We do not know if any prospect will contain oil or gas in sufficient quantities or quality~~ to ~~recover~~September ~~drilling~~30, ~~and completion costs or to be economically viable.~~2021

~~Success~~We had inno sales during the ~~Discovery~~year ended September 30, 2022, and ~~Development~~2021. Impairment of ~~Reserves~~oil and gas properties and capitalized exploration costs for the year ended September 30, 2022, was approximately $6.9 ~~Because~~million wecompared ~~have~~to noapproximately ~~operating~~$0.4 ~~history~~million infor the ~~production~~year ended September 30, 2021. The impairment of ~~oil~~approximately $6.9 million for the year ended September 30, 2022, resulted from the expiration of a lease and ~~gas~~the write off of Tau well costs, ~~our~~and ~~future~~the ~~results~~impairment of ~~operations~~approximately $0.4 million for the year ended September 30, 2021 resulted from the relinquishment of a lease and ~~financial~~the ~~condition~~write-off ~~will~~of berelated ~~directly~~capitalized ~~affected~~costs. byGeneral ~~our~~and ~~ability~~administrative expenses towere ~~discover~~approximately $1.5 million for both of these years ended September 30, 2022 and ~~develop~~2021, ~~reserves~~as ~~through~~we have remained disciplined with our ~~drilling~~expenditures ~~activities~~while we pursue our development and acquisition strategy. Interest expense was approximately $512,000 for the year ended September 30, 2022, as compared to approximately $554,000 for the year ended September 30, 2021. Loss on extinguishment of debt was approximately $85,000 for the year ended September 30, 2022, compared to a gain on extinguishment of debt of approximately $406,000 for the year ended September 30, 2021. Gain on derivative financial instrument was approximately $242,000 for the year ended September 30, 2022, compared to a loss on derivative financial instrument of approximately $177,000 for the year ended September 30, 2021.

Oil and Gas Revenue. We have not yet commenced oil and gas production. If and when we do commence production, we expect to generate revenue from such production. No oil and gas revenue is reflected in our historical financial statements. 22

~~General~~We had ~~and~~a ~~Administrative~~net ~~Expenses~~loss of approximately $8.7 Wemillion ~~expect~~for ~~that~~the ~~our~~year ~~general~~ended ~~and~~September ~~administrative~~30, ~~expenses~~2022, ~~will~~compared ~~increase~~to ina ~~future~~net ~~periods~~loss ~~when~~of weapproximately ~~commence~~$2.2 million ~~drilling~~for ~~operations~~the year ended September 30, 2021.

~~Demand~~The basic ~~and~~loss ~~Price.~~per ~~The~~share ~~demand~~ for ~~oil~~the ~~and~~year ~~gas~~ended isSeptember ~~susceptible~~30, ~~to volatility related to~~2022, ~~among~~was ~~other factors~~$0.01, ~~the~~compared ~~level~~to ofa ~~global~~net ~~economic~~loss ~~activity~~per ~~and~~share ~~may also fluctuate depending on the performance~~ of ~~specific industries~~$0.00 Wefor ~~expect that a decrease in economic activity, in~~ the ~~United~~year ended ~~States~~September ~~and elsewhere~~30, ~~would adversely affect demand for any oil and gas we may produce~~2021. ~~Since we have not generated revenues, these key factors will only affect us if and when we produce and sell hydrocarbons.~~

~~Results of Operations for~~ For the ~~Year~~year ~~Ended~~ended September 30, ~~2021~~2022, cash used in operating activities totaled approximately $1.4 million compared to ~~September~~approximately $1.6 ~~30,~~million ~~2020~~used in operating activities in fiscal 2021.

~~We had no sales during~~ For the year ended September 30, ~~2021~~2022, ~~and~~cash ~~2020.~~provided ~~Impairment~~by ofinvesting ~~oil~~activities ~~and gas properties and capitalized exploration costs for the year ended September 30, 2021~~ was approximately $0.4014 million compared to ~~approximately~~ $~~2.4 million for the year ended September 30, 2020. The impairment of approximately $~~0.~~4 million for the year ended September 30, 2021 resulted from the relinquishment of a lease and the write off of related capital costs and the impairment of approximately $~~2.4 million provided ~~for~~by ~~the~~investing ~~year~~activities ~~ended~~in ~~September~~fiscal ~~30, 2020 resulted from the expiration of leases and the write-off of related capitalized costs. General and administrative expenses were approximately $1.5 million for the year ended September 30,~~ 2021 ~~compared to approximately $1~~.1 million for the year ended September 30, 2020. Interest expense was approximately $554,000 for the year ended September 30, 2021, as compared to approximately $39,000 for the year ended September 30, 2020 net of approximately $1.1 million of interest capitalized to unevaluated oil and natural gas properties during 2020. Gain on extinguishment of debt was approximately $406,000 for the year ended September 30, 2021 compared to a loss of $1.5 million for the year ended September 30. 2020. Loss on derivative financial instrument was approximately $177,000 for the year ended September 30, 2021 compared to a gain of approximately $2.6 million for the year ended September 30, 2020.

~~We had a net loss of approximately $2.2 million for~~ For the year ended September 30, ~~2021~~2022, ~~compared~~and to2021 acash ~~net~~used ~~loss~~in offinancing ~~approximately~~activities ~~$2.4~~was ~~million~~approximately ~~for~~nil ~~the~~and ~~year~~$0.3 ~~ended September 30~~million, ~~2020~~respectively.

~~The~~As of ~~basic~~September ~~loss~~30, ~~per~~2022, ~~share~~the ~~for~~Company’s ~~the~~cash ~~year~~balance ~~ended~~was approximately $0.14 million compared to approximately $1.5 million cash balance as of September 30, 2021. ~~was~~The Company’s fiscal 2022 cash decrease of approximately $01.~~00,~~4 ~~compared~~million was primarily due to aits net ~~loss~~cash ~~per~~used ~~share~~in operating activities of approximately $1.4 million, cash received in investing activities of approximately $0.00014 ~~for~~million ~~the~~and ~~year~~no ~~ended~~cash ~~September~~used ~~30,~~in ~~2020~~financing activities.

~~For~~Liquidity and ~~the~~Capital ~~year ended September 30, 2021, cash used in operating activities totaled $1.6 million compared to $0.4 million used in operating activities in fiscal 2020.~~Resources

~~For~~The Company ~~the~~has ~~year~~incurred ~~ended~~accumulated ~~September~~losses ~~30,~~for ~~2021,~~the ~~cash~~period ~~provided~~from byinception ~~investing~~to ~~activities~~September ~~was~~30, ~~$0.2~~2022, ~~million~~of ~~compared~~approximately to $568.19 million ~~provided~~and has bynegative ~~investing~~working ~~activities~~capital inof ~~fiscal~~approximately ~~2020~~$13.8 million. For the year ended September 30, ~~2021~~2022, ~~insurance~~the ~~proceeds~~Company ~~received~~has ~~were~~generated losses of approximately $08.27 million and ~~spending~~negative ~~for~~cash ~~exploration~~flows ~~activities~~from ~~was~~operations of approximately $0.1.4 million. ~~Insurance~~As ~~proceeds~~of ~~received~~September ~~were~~30, 2022, ~~approximately~~we had $70.514 million of cash on hand. The Company estimates that it will need to raise a minimum of $10 million to meet its obligations and ~~spending~~planned expenditures through December 2023. The $10 million is comprised primarily of capital expenditures for ~~exploration~~prospect ~~wells~~development inand ~~process~~the ~~was~~pursuit ~~approximately~~of acquisition targets as well as general and administrative expenses. It does not include any amounts due under outstanding debt obligations, which amount to $212.65 million of current principal and interest as of September 30, 2022. The Company plans to finance its operations through equity and/or debt financings, and strategic transactions to include farm-outs, asset sales or mergers. Our policy has been to periodically raise funds through the sale of equity securities on a limited basis, to avoid undue dilution while at the early stages of execution of our business plan. Short term needs have been historically funded through loans from executive management. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in ~~fiscal~~obtaining ~~2020~~financing, operations would need to be curtailed or ceased. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

23 For the year ended September 30, 2022, the Company used approximately $1.4 million of net cash in operating activities, compared with approximately $1.6 million of net cash used in operating activities for the year ended September 30, 2021. For the year ended September 30, 2022, cash provided by investing activities was approximately $0.014 million compared to approximately $0.21 million of cash provided by investing activities for the year ended September 30, 2021. For the year ended September 30, 2022, no cash was used in financing activities, compared with approximately $0.3 million used in financing activities for year ended September 30, 2021.

~~For~~We ~~the~~will ~~year~~need ~~ended~~to ~~September~~raise ~~30,~~additional ~~2021~~funds to cover expenditures planned for 2023, ~~cash~~as ~~used~~well inas ~~financing~~any ~~activities~~additional, ~~was~~unexpected ~~approximately~~expenditures that $0we may encounter.3 ~~million~~Future ~~compared~~equity financings may be dilutive to ~~approximately~~our $2stockholders.~~7 million~~ ~~cash~~Alternative ~~used~~forms inof ~~financing~~future ~~activities~~financings ~~for~~may include ~~the~~preferences ~~year~~or ~~ended~~rights ~~September~~superior ~~30,~~to ~~2020~~our common stock. ~~For~~Debt ~~fiscal~~financings ~~2021,~~may ~~approximately~~involve ~~$0.3~~a ~~million~~pledge of assets and will rank senior ~~promissory~~to ~~notes~~our ~~were~~common ~~paid~~stock. ~~For~~We ~~fiscal~~have ~~2020,~~historically ~~approximately~~financed $0our operations through private equity and debt financings.5 ~~million~~We ofdo ~~proceeds~~not ~~from~~have ~~promissory~~any credit ~~notes~~or ~~were~~equity ~~received~~facilities available with financial institutions, stockholders, or third-party investors, and $3will continue to rely on best efforts financings.2 The failure to raise sufficient capital could cause us to cease operations, or the Company would ~~million~~need ofto ~~promissory~~sell ~~notes~~assets ~~were~~or ~~paid~~consider alternative plans up to and including restructuring.

AsWe do ofnot ~~September~~have ~~30,~~any ~~2021,~~material ~~the~~contractual ~~Company’s cash balance was approximately $1~~obligations.5 ~~million~~Other ~~compared~~immaterial toobligations ~~approximately~~may ~~$3.2~~be ~~million~~reflected ~~cash balance as of September 30, 2020. The Company’s fiscal 2021 cash decrease of approximately $1.7 million was primarily due to its net cash used~~ in ~~operating~~our ~~activities~~accompanying ofconsolidated financial ~~approximately $1~~statements.~~6 million, cash received in investing activities of approximately $0.2 million and cash used in financing activities of approximately $0.3 million.~~

~~Liquidity~~Off-Balance Sheet ~~and Capital Resources~~Arrangements

The Company has incurred accumulated losses for the period from inception to September 30, 2021, of approximately $60.2 million, and has negative working capital of approximately $12.1 million. For the year ended September 30, 2021, the Company has generated losses of approximately $2.2 million and negative cash flows from operations of approximately $1.6 million. As of September 30, 2021, we We had ~~$1.5~~no ~~million~~off-balance ofsheet ~~cash~~arrangements on hand. The Company estimates that it will need to raise a minimum of $10 million to meet its obligations and planned expenditures through December 2022. The $10 million is comprised primarily of drilling capital expenditures as ~~well as general and administrative expenses. It does not include any amounts due under outstanding debt obligations, which amounted to $12.0 million~~ of ~~current principal and interest as of~~ September 30, ~~2021.~~2022 ~~The Company plans to finance its operations through equity~~ and~~/or~~ ~~debt financings~~2021, ~~and strategic transactions to include farm-outs, asset sales or mergers~~respectively. Our policy has been to periodically raise funds through the sale of equity securities on a limited basis, to avoid undue dilution while at the early stages of execution of our business plan. Short term needs have been historically funded through loans from executive management. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~For~~Critical Accounting the year ended September 30, 2021, the Company used approximately $1.6 million of net cash in operating activities, compared with approximately $0.4 million of net cash used in operating activities for the year ended September 30, 2020. For the year ended September 30, 2021, cash provided by investing activities was approximately $0.2 million compared to approximately $5.1 million of cash provided by investing activities for the year ended September 30, 2020. For the year ended September 30, 2021, we used approximately $0.3 million of net cash in financing activities, compared with approximately $2.7 million used in financing activities for year ended September 30, 2020.Estimates

WeThe preparation ~~will~~of ~~need~~financial tostatements ~~raise~~in ~~additional~~conformity ~~funds~~with togenerally ~~cover~~accepted ~~expenditures~~accounting ~~planned~~principles ~~for~~in ~~2022,~~the asUnited ~~well~~States ~~as any additional, unexpected expenditures that we may encounter. Future equity financings may be dilutive to our stockholders. Alternative forms~~ of ~~future~~America (“GAAP”) ~~financings~~requires ~~may~~management ~~include preferences or rights superior~~ to ~~our~~make ~~common~~estimates ~~stock.~~and ~~Debt~~assumptions ~~financings~~that ~~may~~affect ~~involve~~the areported ~~pledge~~amounts of assets and liabilities ~~will~~and ~~rank~~disclosure ~~senior~~of tocontingent ~~our~~assets ~~common~~and ~~stock.~~liabilities Weat ~~have~~the ~~historically~~date ~~financed~~of ~~our~~the ~~operations~~financial ~~through~~statements ~~private equity~~ and ~~debt~~the ~~financings.~~reported Weamounts doof revenues ~~not~~and ~~have~~expenses ~~any~~during ~~credit~~the orreporting ~~equity~~period. ~~facilities~~Actual ~~available~~results ~~with~~could ~~financial~~differ ~~institutions,~~from ~~stockholders~~those ~~or third-party investors, and will continue to rely on best efforts financings~~estimates. The ~~failure~~critical toaccounting estimates ~~raise~~include ~~sufficient~~impairment ~~capital~~considerations ~~could~~of ~~cause~~long-lived usassets toincluding ~~cease~~oil ~~operations,~~and ornatural ~~the~~gas ~~Company~~properties ~~would~~and ~~need~~assumptions toused ~~sell~~in valuing ~~assets~~our orderivative ~~consider~~financial ~~alternative plans up to and including restructuring~~instruments.

We are party to various contractual obligations such as our office lease obligation that is disclosed in the financial statements. We do not have any other material contractual obligations. Other immaterial obligations may be reflected in our accompanying consolidated financial statements. 23

~~Off-Balance~~Recently Adopted ~~Sheet~~Accounting ~~Arrangements~~Pronouncements

WeIn May ~~had~~2021, noFinancial ~~off~~Accounting Standards Board (“FASB”) issued ASU 2021-~~balance~~04, ~~sheet~~Earnings ~~arrangements~~Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. An issuer measures the effect of ~~September~~a 30modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange. ASU 2021-04 introduces a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company has elected to early adopt this standard and in accordance with this standard was accounted for prospectively as of the beginning of the year. The early adoption of this standard impacted the accounting for the modification of investor warrants discussed in Note 7 and resulted in the recording of a loss on debt extinguishment of approximately $85,000. Historically the cost associated with the warrant modification was capitalized to deferred loan cost and amortized over the debt extension period.

~~Critical~~ Recent Accounting ~~Estimates~~Pronouncements Not Yet Adopted

~~The~~In August ~~preparation~~2020, ofthe ~~financial~~FASB ~~statements~~issued inASU ~~conformity~~No. ~~with~~2020-06, ~~generally~~Accounting ~~accepted~~for ~~accounting~~Convertible ~~principles~~Instruments ~~(“GAAP”)~~and ~~requires~~Contracts ~~management~~in toan ~~make~~Entity’s ~~estimates~~Own ~~and~~Equity (ASU ~~assumptions~~2020-06), ~~that~~which ~~affect~~simplifies the ~~reported~~accounting ~~amounts~~for certain financial instruments with characteristics of ~~assets~~liabilities and ~~liabilities~~equity, including convertible instruments and ~~disclosure~~contracts ofin ~~contingent~~an ~~assets~~entity’s ~~and~~own ~~liabilities~~equity. atAdditionally, ~~the~~ASU ~~date~~2020-06 requires the application of the ~~financial~~if-converted ~~statements~~method ~~and~~to calculate the ~~reported~~impact ~~amounts~~ of ~~revenues~~convertible ~~and~~instruments ~~expenses~~on ~~during~~diluted earnings per share (EPS), which is consistent with the ~~reporting~~Company’s ~~period~~accounting treatment under the current standard. ~~Actual~~ASU ~~results~~2020-06 ~~could~~is ~~differ~~effective ~~from~~for ~~those~~fiscal ~~estimates. The~~years ~~critical~~beginning after ~~accounting~~December ~~estimates~~15, ~~include~~2021, ~~impairment~~with ~~considerations~~early ofadoption ~~long~~permitted for fiscal years beginning after December 15, 2020. ASU No. 2020-~~lived~~06 ~~assets~~can be ~~including~~adopted ~~oil~~on either ~~and~~a ~~natural~~fully ~~gas~~retrospective ~~properties~~or ~~and~~modified ~~assumptions~~retrospective ~~used~~basis. inThe ~~valuing~~adoption ~~our~~of ~~derivative~~ASU 2020-06 is not expected to have a material impact on the Company’s financial ~~instruments~~statements or disclosures.

~~Recent~~The Company ~~Accounting~~has ~~Pronouncements~~evaluated ~~Not~~all ~~Yet~~other ~~Adopted~~recent accounting pronouncements and believes either they are not applicable or that none of them will have a significant effect on the Company’s financial statements.

~~In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No~~ITEM 7A. ~~2020-06,~~QUANTITATIVE ~~Accounting~~AND ~~for~~QUALITATIVE ~~Convertible~~DISCLOSURES ~~Instruments~~ABOUT ~~and~~MARKET Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (EPS), which is consistent with the Company’s accounting treatment under the current standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. ASU No. 2020-06 can be adopted on either a fully retrospective or modified retrospective basis. The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s financial statements or disclosures.RISK

24 Not required for smaller reporting companies.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. An issuer measures the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange. ASU 2021-04 introduces a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 is not expected to have a material impact on the Company’s financial statements or disclosures. 24

~~The~~ITEM 8. ~~Company~~FINANCIAL ~~has~~STATEMENTS ~~evaluated~~AND ~~all~~SUPPLEMENTARY ~~other recent accounting pronouncements and believes either they are not applicable or that none of them will have a significant effect on the Company’s financial statements.~~DATA

~~ITEM~~GulfSlope Energy, 7AInc. ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

~~Not~~TABLE OF ~~required for smaller reporting companies.~~CONTENTS

	Page

Report of Independent Registered Public Accounting Firm	26

Balance Sheets as of September 30, 2022, and 2021	28

Statements of Operations for the Years Ended September 30, 2022, and 2021	29

Statement of Stockholders’ Equity (Deficit) for the Years Ended September 30, 2022, and 2021	30

Statements of Cash Flows for the Years Ended September 30, 2022, and 2021	31

Notes to the Financial Statements	32

~~ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~25

~~GulfSlope~~REPORT ~~Energy,~~OF ~~Inc.~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~TABLE~~To OFthe ~~CONTENTS~~Board of Directors and Stockholders of GulfSlope Energy

	Page
Report of Independent Registered Public Accounting Firm	27
Balance Sheets as of September 30, 2021 and 2020	28
Statements of Operations for the Years Ended September 30, 2021 and 2020	29
Statement of Stockholders’ Equity (Deficit) for the Years Ended September 30, 2021 and 2020	30
Statements of Cash Flows for the Years Ended September 30, 2021 and 2020	31
Notes to the Financial Statements	32

Opinion on the Financial Statements

26 We have audited the accompanying balance sheets of GulfSlope Energy, Inc. (the “Company”) as of September 30, 2022 and 2021, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended September 30, 2022 and 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

~~Report~~Going ofConcern ~~Independent Registered Public Accounting Firm~~Uncertainty

~~Shareholders~~The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements, the Company has a net capital deficiency, and ~~Board~~further losses are anticipated in developing the Company’s business, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of ~~Directors~~this uncertainty.

~~GulfSlope~~Basis ~~Energy,~~for ~~Inc.~~Opinion

~~Houston,~~These ~~Texas~~financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~Opinion~~We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the ~~Financial~~effectiveness ~~Statements~~of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

WeOur ~~have~~audits ~~audited~~included ~~the~~performing ~~accompanying~~procedures ~~balance~~to ~~sheets~~assess the risks of ~~GulfSlope~~material ~~Energy,~~misstatement ~~Inc.~~of (the ~~“Company”)~~financial asstatements, ofwhether ~~September~~due ~~30,~~to ~~2021~~error ~~and~~or ~~2020~~fraud, ~~the~~and ~~related~~performing ~~statements~~procedures ofthat ~~operations,~~respond to ~~stockholders’~~those ~~equity,~~risks. ~~and~~Such ~~cash~~procedures ~~flows~~included ~~for~~examining, ~~the~~on ~~years~~a ~~then~~test ~~ended~~basis, ~~and~~evidence regarding the ~~related~~amounts ~~notes~~and ~~(collectively~~disclosures ~~referred~~in ~~to as~~ the “financial statements”). Our Inaudits ~~our~~also ~~opinion,~~included ~~the~~evaluating ~~financial statements present fairly, in all material respects,~~ the ~~financial~~accounting ~~position~~principles ofused ~~the~~and ~~Company~~significant atestimates ~~September~~made 30by management, ~~2021~~as ~~and~~well ~~2020,~~as ~~and~~ evaluating the ~~results~~overall presentation of ~~its operations and its cash flows for~~ the ~~years~~financial ~~then~~statements. ~~ended,~~We inbelieve ~~conformity~~that ~~with~~our ~~accounting~~audits ~~principles~~provide ~~generally~~a ~~accepted~~reasonable inbasis ~~the~~for ~~United~~our ~~States of America~~opinion.

~~Going~~Critical ~~Concern~~Audit ~~Uncertainty~~Matters

The ~~accompanying~~critical audit matters communicated below are matters arising from the current period audit of the financial statements ~~have~~that ~~been~~were ~~prepared~~communicated ~~assuming~~or ~~that~~required to be communicated to the ~~Company~~audit ~~will~~committee ~~continue~~and asthat: a(1) ~~going~~relate ~~concern.~~to Asaccounts ~~described~~or indisclosures ~~Note~~that 2are material to the financial statements, ~~the~~and ~~Company~~(2) ~~has~~involved ~~accumulated~~especially ~~losses~~challenging, ~~and~~subjective, ~~further~~or ~~losses~~complex ~~are~~judgments. ~~anticipated~~The incommunication ~~developing~~of ~~the~~critical ~~Company’s~~audit ~~business,~~matters ~~which~~does ~~raise~~not ~~substantial~~alter ~~doubt~~in ~~about~~any ~~its~~way ~~ability~~our toopinion on ~~continue~~the asfinancial astatements, ~~going~~taken ~~concern.~~as ~~Management’s~~a ~~plans~~whole, inand ~~regard~~we toare ~~these~~not, ~~matters~~by ~~are~~communicating ~~also~~the ~~described~~critical inaudit ~~Note~~matters 2.below, ~~The~~providing ~~financial~~separate ~~statements~~opinions on dothe ~~not~~critical ~~include~~audit ~~any~~matters ~~adjustments~~or ~~that~~on ~~might~~the ~~result~~accounts ~~from~~or ~~the~~disclosures ~~outcome~~to ofwhich ~~this~~they ~~uncertainty~~relate.

~~Basis for Opinion~~26

~~These~~Critical ~~financial~~Audit ~~statements~~Matter ~~are~~Description the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We ~~conducted~~identified ~~our~~the ~~audits~~Company's inimpairment ~~accordance~~assessment of ~~with~~unproved ~~the~~properties ~~standards~~and ofproperties ~~the~~under ~~PCAOB.~~development ~~Those~~as ~~standards~~a ~~require~~critical ~~that~~audit wematter ~~plan~~which is referred to in Notes 1 and ~~perform~~3. ~~the~~Unproved ~~audits~~properties and toproperties ~~obtain~~under ~~reasonable~~development ~~assurance~~are ~~about~~reviewed ~~whether~~for ~~the~~impairment ~~financial~~at ~~statements~~least quarterly and are ~~free~~determined ofthrough ~~material~~an ~~misstatement~~evaluation by management and third-party consultants considering, ~~whether~~among ~~due~~other factors, seismic data, requirements to ~~error~~relinquish oracreage, ~~fraud.~~drilling ~~The~~results, ~~Company~~remaining time isin ~~not~~the ~~required~~commitment toperiod, ~~have~~remaining capital plan, ~~nor~~and ~~were~~political, weeconomic, ~~engaged~~and market conditions. We also determined that the estimates of fair value of derivatives referred to ~~perform,~~in anNotes 1 and 8 is also a critical audit ofmatter due to its ~~internal~~computational ~~control~~complexity ~~over~~and ~~financial~~contains several ~~reporting~~assumptions influenced by management’s judgement. AsThe ~~part~~Company currently has two derivative instruments one of ~~our~~which ~~audits~~relates to wea ~~are~~warrant ~~required~~originally granted with a debt instrument which contains a variable conversion feature with no floor and the other relates to ~~obtain~~a clause within an ~~understanding~~agreement ofthat ~~internal~~contains ~~control~~a ~~over~~make ~~financial~~whole ~~reporting~~provision ~~but~~in ~~not~~the ~~for~~event that common stock held by the ~~purpose~~contracting ofparty ~~expressing~~is ansold at ~~opinion~~a onloss then such loss would be reimbursed up to a guaranteed amount. Both instruments meet the ~~effectiveness~~definition of ~~the~~a ~~Company’s~~derivative ~~internal~~therefore they ~~control~~are ~~over~~accounted ~~financial~~for at fair value each reporting period with any changes in fair value being recorded as a charge to the statement of operations. ~~Accordingly,~~Performing weaudit ~~express~~procedures noand ~~such~~evaluating ~~opinion~~audit evidence obtained related to these considerations required a high degree of auditor judgment and effort.

~~Our~~How ~~audits included performing procedures to assess~~ the ~~risks~~Critical ofAudit ~~material~~Matters ~~misstatement~~were of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures Addressed in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.Audit

~~/s/~~Our ~~Pannell~~audit ~~Kerr~~procedures ~~Forster~~performed ofto ~~Texas~~address these critical audit matters included the following, ~~P.C.~~among others:

We· ~~served~~Impairment ~~as the Company’s auditor since November 2019.~~Assessment:

~~Houston,~~- ~~Texas~~We gained an understanding of the design of the controls over management’s process to develop their estimates included in the impairment assessment of oil and natural gas properties. We also gained an understanding of the design of the controls used by management to develop their estimates.

~~December~~- ~~29,~~We ~~2021~~confirmed our understanding of the timing of lease expirations and performed a detailed evaluation of all unevaluated capitalized costs by type and category and through inquiry and testing of current activity we assessed the level of development plans and timing and if such activities were supported and progressing.

27 - The lease that expired in June 2022 was written off when it became apparent that a lease extension was not available and an interim impairment was recorded totaling approximately $3.1 million.

~~GulfSlope~~- ~~Energy,~~We ~~Inc~~gained an understanding of management’s plans and the status of financing to pursue development.

~~BALANCE~~- In total an impairment of approximately ~~SHEETS~~$6.9 million was recorded by the Company during different intervals during the year ended September 30, 2022 which we concluded that the timing and amounts were appropriate.

	September 30,
	2021			2020
Assets
Current Assets
Cash	$	1,517,522		$	3,190,418
Accounts Receivable, Net		—			366,173
Prepaid Expenses and Other Current Assets		54,398			84,129
Total Current Assets		1,571,920			3,640,720
Property and Equipment, net		1,845			6,347
Oil and Natural Gas Properties, Full Cost Method of Accounting, Unproved Properties		12,124,720			12,372,853
Operating Lease Right of Use Asset		—			54,768
Total Non-Current Assets		12,126,565			12,433,968
Total Assets	$	13,698,485		$	16,074,688
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable	$	52,812		$	228,892
Related Party Payable		404,469			417,984
Related Party Accrued Interest Payable		2,961,689			2,521,890
Accrued Interest Payable		115,860			94,118
Accrued Liabilities and Other Payables		—			268,863
Loans from Related Parties		8,725,500			8,725,500
Notes Payable		—			120,827
Convertible Notes Payable, net of discount		176,663			461,613
Derivative Financial Instruments		1,201,656			1,070,551
Current Portion of Operating Lease Liability		—			62,074
Total Current Liabilities		13,638,650			13,972,312
Total Liabilities		13,638,650			13,972,312
Commitments and Contingencies (Note 12)
Stockholders’ Equity (Deficit)
Preferred Stock; par value ($0.001); Authorized 50,000,000 shares, none issued or outstanding		—			—
Common Stock; par value ($0.001); Authorized 1,500,000,000 as of September 30, 2021 and 2020; issued and outstanding 1,268,240,346 and 1,250,740,346, as of September 30, 2021 and 2020, respectively		1,268,240			1,250,740
Additional Paid-in Capital		58,999,585			58,728,308
Additional Paid-in Capital – Shares to Be Issued		—			105,000
Accumulated Deficit		(60,207,991	)		(57,981,672	)
Total Stockholders’ Equity (Deficit)		59,834			2,102,376
Total Liabilities and Stockholders’ Equity (Deficit)	$	13,698,485		$	16,074,688

Derivatives:

~~The~~- ~~accompanying~~We ~~notes~~gained ~~are~~an understanding of the design of the controls over management’s process to develop their estimate of fair value of its derivatives. We also gained an ~~integral~~understanding ~~part~~of the design of the controls used by management to ~~these~~develop ~~financial~~their ~~statements~~estimates.

28 - Management uses the services of a third party consultant to compute the estimates of fair value. We performed an investigation into the experience, background and credentials of the third party specialist and found that the consultant possessed the appropriate competencies and experience to provide fair value services.

~~GulfSlope~~- ~~Energy~~The Company uses the Monte Carlo simulation model which takes into consideration stock price volatility, ~~Inc~~the current common stock price as of the balance sheet date, discount rates as well as other relevant assumptions that would be appropriate to estimate fair value as determined by a third party market participant.

~~STATEMENTS~~- We confirmed our understanding and OFtested ~~OPERATIONS~~each underlying assumption to ensure they are correct.

	For the Years ended September 30,
	2021			2020
Revenues	$	—		$	—
Operating Expenses:
Impairment of Oil and Natural Gas Properties		396,273			2,424,885
General and Administrative Expenses		1,505,270			1,098,233
Net Loss from Operations		(1,901,543	)		(3,523,118	)
Other Income (Expense):
Interest Expense, net		(553,997	)		(38,762	)
Interest Income		1,085			22,649
Gain/(Loss) on Debt Extinguishment		405,502			(1,513,334	)
Gain/(Loss on Derivative Financial Instrument		(177,366)			2,636,473
Net Loss Before Income Taxes		(2,226,319	)		(2,416,092	)
Income Taxes		—			—
Net Loss	$	(2,226,319	)	$	(2,416,092	)
Loss Per Share – Basic and Diluted	$	(0.00	)	$	(0.00	)
Weighted Average Shares Outstanding – Basic and Diluted		1,267,808,839			1,183,190,324

- We independently reperformed the computations of the fair value estimates taking into consideration the appropriateness of the fair value model and underlying assumptions used and concluded the estimates where appropriate.

~~The~~/s/ Pannell ~~accompanying~~Kerr ~~notes~~Forster ~~are~~of anTexas, ~~integral part to these financial statements~~P.C.

29 We served as the Company’s auditor since November 2019.

~~GulfSlope~~ Firm Id ~~Energy,~~: ~~Inc.~~342

~~STATEMENTS OF STOCKHOLDERS’ EQUITY~~Houston, Texas

~~For the Years Ended September 30~~December 29, ~~2021 and 2020~~2022

	Common Shares		Common Amount		Additional Paid-In Capital Shares to Be Issued			Additional Paid-In Capital			Accumulated Deficit			Net Stockholders’ Equity (Deficit)
Balance at September 30, 2019		1,092,266,844	$	1,092,266	$	—		$	54,160,836		$	(55,582,010	)	$	(328,908	)
Cumulative adjustment upon ASC 842 adoption		—		—		—			—			16,430			16,430
Balance at October 1, 2019		1,092,266,844		1,092,266		—			54,160,836			(55,565,580	)		(312,478)
Stock based compensation		—		—		—			968,257			—			968,257
Common stock issued for conversion of note payable and accrued interest		120,050,281		120,051		—			2,096,807			—			2,216,858
Warrants issued for debt extension		—		—		—			19,300			—			19,300
Common stock issued to extinguish liability		38,423,221		38,423		—			1,498,506			—			1,536,929
Common stock registration costs		—		—		—			(15,398	)		—			(15,398	)
Common stock to be issued to extinguish accrued interest		—		—		105,000			—			—			105,000
Net loss		—		—		—			—			(2,416,092	)		(2,416,092	)
Balance at September 30, 2020		1,250,740,346		1,250,740		105,000			58,728,308			(57,981,672	)		2,102,376
Stock based compensation		—		—		—			96,875			—			96,875
Common stock issued to extinguish accrued interest		17,500,000		17,500		(105,000	)		87,500			—			—
Warrants issued for debt extension		—		—		—			86,902			—			86,902
Net loss		—		—		—			—			(2,226,319	)		(2,226,319	)
Balance at September 30, 2021		1,268,240,346	$	1,268,240	$	—		$	58,999,585		$	(60,207,991	)	$	59,834

~~The~~GulfSlope Energy, ~~accompanying notes are an integral part to these financial statements~~Inc.

30 BALANCE SHEETS

GulfSlope Energy, Inc.


	September 30,
	2022			2021
Assets
Current Assets
Cash	$	135,381		$	1,517,522
Accounts Receivable, Net		12,925			—
Prepaid Expenses and Other Current Assets		33,004			54,398
Total Current Assets		181,310			1,571,920
Property and Equipment, net		848			1,845
Oil and Natural Gas Properties, Full Cost Method of Accounting, Unproved Properties		5,288,915			12,124,720
Total Non-Current Assets		5,289,763			12,126,565
Total Assets	$	5,471,073		$	13,698,485

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts Payable	$	135,391		$	52,814
Related Party Payable		404,469			404,469
Related Party Accrued Interest Payable		3,401,489			2,961,689
Accrued Interest Payable		138,020			115,860
Accrued Liabilities and Other Payables		—			—
Loans from Related Parties		8,725,500			8,725,500
Notes Payable		—			—
Convertible Notes Payable, net of discount		227,000			176,663
Derivative Financial Instruments		959,222			1,201,656
Current Portion of Operating Lease Liability		—			—
Total Current Liabilities		13,991,091			13,638,651
Total Liabilities		13,991,091			13,638,651
Commitments and Contingencies (Note 11)
Stockholders’ Equity (Deficit)
Preferred Stock; par value ($0.001); Authorized 50,000,000 shares, none issued or outstanding		—			—
Common Stock; par value ($0.001); Authorized 3,000,000,000 as of September 30, 2022 and 1,500,000,000 as of September 30, 2021; issued and outstanding 1,268,240,346, as of September 30, 2022 and 2021, respectively		1,268,240			1,268,240
Additional Paid-in Capital		59,116,487			58,999,585
Accumulated Deficit		(68,904,745	)		(60,207,991	)
Total Stockholders’ Equity (Deficit)		(8,520,018	)		59,834
Total Liabilities and Stockholders’ Equity (Deficit)	$	5,471,073		$	13,698,485

~~STATEMENTS~~The OFaccompanying ~~CASH~~notes ~~FLOWS~~are an integral part to these financial statements.

	For the Years Ended
	September 30,
	2021			2020
OPERATING ACTIVITIES
Net Loss	$	(2,226,319	)	$	(2,416,092	)
Adjustments to Reconcile Net Loss to Cash Used in Operating Activities:
Impairment of Oil and Natural Gas Properties		396,273			2,424,885
Depreciation		6,667			6,667
Debt Discount Amortization		91,369			2,054,820
Capitalization of Interest Expense		—			(2,823,899	)
Loss Recorded to Interest Expense Related to Warrant Derivative Associated with the Issuance of Convertible Notes		—			32,539
Loss (Gain) on Debt Extinguishment		(405,502	)		1,513,334
Stock Based Compensation		96,875			470,457
(Gain) Loss on Derivative Financial Instruments		177,366			(2,636,473	)
Changes in Operating Assets and Liabilities:
Decrease in Accounts Receivable		37,233			3,476,998
Decrease in Prepaid Expenses and Other Current Assets		29,732			298,458
Decrease in Accounts Payable		(206,858	)		(3,510,419	)
(Decrease) Increase in Related Party Payable		(13,515	)		52,080
Increase in Accrued Interest Payable		462,203			719,172
Decrease in Deferred Credit		(7,307	)		(28,448	)
Net Cash Used in Operating Activities		(1,561,782	)		(365,921	)
INVESTING ACTIVITIES
Proceeds from Disposal of Property and Equipment		133,108			101,000
Insurance Proceeds Received Related to Oil and Natural Gas Properties		223,650			7,541,820
Investments in Oil and Natural Gas Properties		(145,180	)		(2,573,050	)
Purchases of Property and Equipment		(2,165	)		—
Net Cash Provided by Investing Activities		209,413			5,069,770
FINANCING ACTIVITIES
Payments on Convertible Notes Payable		—			(2,920,650	)
Payments on Notes Payable		(320,527	)		(267,000	)
Proceeds from Issuance of Convertible Notes Payable and Warrants		—			535,300
Net Cash Used in Financing Activities		(320,527	)		(2,652,350	)
Net Increase (Decrease) in Cash		(1,672,897	)		2,051,499
Beginning Cash Balance		3,190,418			1,138,919
Ending Cash Balance	$	1,517,522		$	3,190,418
Supplemental Schedule of Cash Flow Activities:
Cash Paid for Interest, Net of Capitalized Amounts	$	424		$	5,272
Non-Cash Investing and Financing Activities:
Prepaid Asset Financed Through Notes Payable	$	—		$	220,629
Common Stock Issued to Extinguish Accrued Interest		17,500			2,216,858
Derivative Liability Recorded at Issuance of Convertible Notes Recorded as Deferred Loan Costs		—			433,425
Settlement of Accrued Expenses by Issuance of Common Stock		—			1,613,775
Debt Issuance Costs Retained by Lender Related to Convertible Debentures		—			65,000
Accounts Receivable Exchanged for Working Interest in Oil and Natural Gas Properties		—			3,629,789
Reduction of Oil and Natural Gas Properties due to Vendor Credits Received		—			2,311,247
Accounts Receivable Recovery through Vendor Credits Received		—			4,591,484
Warrants Issued to extend maturity of debt instrument		86,902			19,300
Reduction in Derivative Liability due to Loan Payment in Full		46,621
Accrued PPP Loan Interest Forgiven		662
Purchase of Capital Expenditures
Included in Accounts Payable		2,960			35,917
Through Stock Based Compensation to Employees		—			497,800

~~The~~GulfSlope Energy, ~~accompanying notes are an integral part to these financial statements~~Inc.

31 STATEMENTS OF OPERATIONS

GulfSlope Energy, Inc.


	For the Years ended September 30,
	2022			2021
Revenues	$	—		$	—
Operating Expenses:
Impairment of Oil and Natural Gas Properties		6,893,226			396,273
General and Administrative Expenses		1,463,538			1,505,270
Net Loss from Operations		(8,356,764	)		(1,901,543	)
Other Income (Expense):
Gain on Disposal of Property and Equipment		15,000			—
Interest Expense		(512,297	)		(553,997	)
Interest Income		—			1,085
Gain/(Loss) on Debt Extinguishment		(85,127	)		405,502
Gain/(Loss) on Derivative Financial Instrument		242,434			(177,366	)
Net Loss Before Income Taxes		(8,696,754	)		(2,226,319	)
Income Taxes		—			—
Net Loss	$	(8,696,754	)	$	(2,226,319	)
Loss Per Share – Basic and Diluted	$	(0.01	)	$	(0.00	)
Weighted Average Shares Outstanding – Basic and Diluted		1,268,240,346			1,267,808,839

~~Notes~~The accompanying notes are an integral part to ~~the~~these ~~Financial~~financial ~~Statements~~statements.

~~NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~29

~~(a)~~GulfSlope Energy, ~~Organization~~Inc.

~~GulfSlope Energy, Inc. (the “Company”~~STATEMENTS orOF ~~“GulfSlope”)~~STOCKHOLDERS’ isEQUITY an independent oil and natural gas exploration company whose interests are concentrated in the United States Gulf of Mexico federal waters offshore Louisiana. The Company has leased two federal Outer Continental Shelf blocks (~~referred to as “prospect,” “portfolio” or “leases”~~Deficit) ~~and licensed three-dimensional (3-D) seismic data in its area of concentration.~~

~~(b)~~For the ~~Basis~~Years ofEnded ~~Presentation~~September 30, 2022 and 2021

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the instructions to Form 10-K and Regulation S-X published by the US Securities and Exchange Commission (the “SEC”). The accompanying financial statements include the accounts of the Company.

	Common Shares		Common Amount		Additional Paid-In Capital Shares to Be Issued			Additional Paid-In Capital		Accumulated Deficit			Net Stockholders’ Equity (Deficit)
Balance at September 30, 2020		1,250,740,346	$	1,250,740	$	105,000		$	58,728,308	$	(57,981,672	)	$	2,102,376
Stock based compensation		—		—		—			96,875		—			96,875
Common stock issued to extinguish accrued interest		17,500,000		17,500		(105,000	)		87,500		—			—
Warrants issued for debt extension		—		—		—			86,902		—			86,902
Net loss		—		—		—			—		(2,226,319	)		(2,226,319	)
Balance at September 30, 2021		1,268,240,346	$	1,268,240	$	—		$	58,999,585	$	(60,207,991	)	$	59,834
Stock based compensation		—		—		—			31,775		—			31,775
Extension of Warrants in Conjunction with Extension of Debt Maturity		—		—		—			85,127		—			85,127
Net loss		—		—		—			—		(8,696,754	)		(8,696,754	)
Balance at September 30, 2022		1,268,240,346	$	1,268,240	$	—		$	59,116,487	$	(68,904,745	)	$	(8,520,018	)

~~(c)~~The accompanying ~~Cash~~notes are an integral part to these financial statements.

The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. There were no cash equivalents at September 30~~, 2021 and 2020, respectively.~~

~~(d)~~GulfSlope Energy, ~~Accounts Receivable~~Inc.

~~The Company records an accounts receivable~~STATEMENTS ~~for~~OF ~~operations~~CASH expense reimbursements due from joint interest partners. The Company estimates allowances for doubtful accounts based on the aged receivable balances and historical losses. If the Company determines any account to be uncollectible based on significant delinquency or other factors, we assess the receivable and the underlying asset for recovery. As of September 30, 2021 and 2020, no allowance was recorded. Accounts receivable were nil and approximately $0.4 million on September 30, 2021 and 2020, respectively. FLOWS

(e) Full Cost Method


	For the Years Ended
	September 30,
	2022			2021
OPERATING ACTIVITIES
Net Loss	$	(8,696,754	)	$	(2,226,319	)
Adjustments to Reconcile Net Loss to Cash Used in Operating Activities:
Impairment of Oil and Natural Gas Properties		6,893,226			396,273
Depreciation		996			6,667
Debt Discount Amortization		50,337			91,369
Loss on Warrant Extension to Extend Debt Maturity		85,127			—
Loss (Gain) on Debt Extinguishment		—			(405,502	)
Stock Based Compensation		31,775			96,875
(Gain) on Disposal of Property and Equipment		(15,000	)		—
(Gain) Loss on Derivative Financial Instruments		(242,434	)		177,366
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Accounts Receivable		(12,925	)		37,233
Increase (Decrease) in Prepaid Expenses and Other Current Assets		(3,392	)		29,732
Increase (Decrease) in Accounts Payable		50,619			(206,856	)
Decrease in Related Party Payable		—			(13,516	)
Increase in Accrued Interest Payable		461,960			462,203
Decrease in Deferred Credit		—			(7,307	)
Net Cash Used in Operating Activities		(1,396,465	)		(1,561,782	)

INVESTING ACTIVITIES
Proceeds from Disposal of Property and Equipment		15,000			133,108
Refund of Security Deposit		24,785			—
Insurance Proceeds Received Related to Oil and Natural Gas Properties		—			223,650
Investments in Oil and Natural Gas Properties		(25,461	)		(145,180	)
Purchases of Property and Equipment		—			(2,165	)
Net Cash Provided by Investing Activities		14,324			209,413

FINANCING ACTIVITIES
Payments on Notes Payable		—			(320,527	)
Net Cash Used in Financing Activities		—			(320,527	)

Net Decrease in Cash		(1,382,141	)		(1,672,896	)
Beginning Cash Balance		1,517,522			3,190,418
Ending Cash Balance	$	135,381		$	1,517,522

Supplemental Schedule of Cash Flow Activities:
Cash Paid for Interest, Net of Capitalized Amounts	$	—		$	424
Non-Cash Investing and Financing Activities:
Common Stock Issued to Extinguish Accrued Interest		—			17,500
Warrants Issued to extend maturity of debt instrument		—			86,902
Reduction in Derivative Liability due to Loan Payment in Full		—			46,621
Accrued PPP Loan Interest Forgiven		—			662
Purchase of Capital Expenditures
Included in Accounts Payable		31,960			2,960

The ~~Company uses the full cost method of~~ ~~accounting~~accompanying ~~for~~notes ~~its oil and gas exploration and development activities. Under the full cost method of accounting, all costs associated with successful and unsuccessful exploration and development activities~~ are ~~capitalized~~an onintegral apart country-by-country basis into a single cost center (“full cost pool”). Such costs include property acquisition costs, geological and geophysical (“G&G”) costs, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells. Overhead costs, which includes employee compensation and benefits including stock-based compensation, incurred that are directly related to acquisition, exploration and development activities are capitalized. Interest expense is capitalized related to unevaluated properties and wells in process during the period in which the Company is incurring costs and expending resources to get the properties ready for their intended purpose. For significant investments in unproved properties and major development projects that are not being currently depreciated, depleted, or amortized and on which exploration or development activities are in progress, interest costs are capitalized. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these ~~costs.~~financial ~~A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool~~statements.

Proved properties are amortized on a country-by-country basis using the units of production method (“UOP”), whereby capitalized costs are amortized over total proved reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (“DD&A”), estimated future development costs (future costs to access and develop proved reserves), and asset retirement costs, less related salvage value. 31

~~The costs of unproved properties and related~~GulfSlope capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation by management and third party consultants consideringEnergy, ~~among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions~~Inc. In countries where proved reserves exist, exploratory drilling costs associated with dry holes are transferred to proved properties immediately upon determination that a well is dry and amortized accordingly. In countries where a reserve base has not yet been established, impairments are charged to earnings.

32 Notes to the Financial Statements

~~Companies that use the full cost method~~NOTE of1 ~~accounting~~– ~~for~~ORGANIZATION ~~oil~~AND ~~and~~SUMMARY ~~natural~~OF ~~gas~~SIGNIFICANT ~~exploration~~ACCOUNTING and development activities are required to perform a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is performed quarterly, on a country-by-country basis, utilizing the average of prices in effect on the first day of the month for the preceding twelve month period. The cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling.POLICIES

The Company capitalizes exploratory well costs into oil and gas properties until a determination is made that the well has either found proved reserves or is impaired. If proved reserves are found, the capitalized exploratory well costs are reclassified to proved properties. The well costs are charged to expense if the exploratory well is determined to be impaired. The Company is currently evaluating one well for proved reserves and remain pending the outcome of exploration activities involving the drilling of the Tau No. 2 well (~~twin well~~a). Accordingly, this costs is included as suspended well costs at September 30, 2021 and it is expected that a final analysis will be completed in the next nine months at which time the costs will be transferred to the full cost pool upon final evaluation.Organization

~~As of September 30~~GulfSlope Energy, ~~2021,~~Inc. (the “Company’s ” or “GulfSlope”) is an independent oil and natural gas ~~properties~~exploration ~~consisted~~company whose interests are concentrated in the United States Gulf of ~~unproved~~Mexico ~~properties~~federal waters offshore Louisiana. The Company has leased one federal Outer Continental Shelf block (referred to as “prospect,” ~~wells~~“portfolio” inor ~~process~~“leases”) and nolicensed ~~proved~~three-dimensional ~~reserves~~(3-D) seismic data in its area of concentration.

(fb) Basis ~~Asset~~of ~~Retirement Obligations~~Presentation

The ~~Company’s asset retirement obligations~~ ~~will~~accompanying ~~represent~~financial ~~the~~statements ~~present~~have ~~value~~been ofprepared ~~the estimated future costs associated with plugging and abandoning oil and natural gas wells, removing production equipment and facilities and restoring the seabed~~ in accordance with ~~the~~accounting ~~terms~~principles ofgenerally ~~oil~~accepted ~~and~~in ~~gas leases and applicable state and federal laws. Determining asset retirement obligations requires estimates of~~ the ~~costs of plugging and abandoning oil~~United ~~and~~States ~~natural~~(“GAAP”) ~~gas wells, removing production equipment~~ and ~~facilities and restoring~~ the ~~sea~~instructions ~~bed~~to asForm ~~well~~10-K ~~as estimates of the economic lives of the oil~~ and ~~gas~~Regulation ~~wells and future inflation rates. The resulting estimate of future cash outflows will be discounted using a credit~~S-~~adjusted~~X ~~risk-free~~published ~~interest~~by ~~rate that corresponds with~~ the ~~timing~~US ~~of the cash outflows. Cost estimates will consider historical~~Securities ~~experience, third party estimates, the requirements of oil~~ and ~~natural~~Exchange ~~gas~~Commission ~~leases and applicable local, state and federal laws, but do not consider estimated salvage values. Asset retirement obligations will be recognized when~~ (the ~~wells drilled reach total depth or when the production equipment and facilities are installed or acquired with an associated increase in proved oil and gas property costs~~“SEC”). ~~Asset~~The ~~retirement~~accompanying ~~obligations~~financial will be accreted each period through depreciation, depletion and amortization to their expected settlement values with any difference between the actual cost of settling the asset retirement obligations and recorded amount being recognized as an adjustment to proved oil and gas property costs. Cash paid to settle asset retirement obligations will be included in net cash provided by operating activities from continuing operations in the statements ofinclude ~~cash flows. On a quarterly basis, when indicators suggest there have been material changes in~~ the ~~estimates~~accounts ~~underlying the obligation, the Company reassesses its asset retirement obligations to determine whether any revisions to the obligations are necessary. At least annually, the Company will assess all~~ of ~~its asset retirement obligations to determine whether any revisions to~~ the ~~obligations are necessary.~~ Future revisions could occur due to changes in estimated costs or well economic lives, or if federal or state regulators enact new requirements regarding plugging and abandoning oil and natural gas wells. The Company ~~drilled two well bores in 2018 and 2019 and these wellbores were both plugged with no further future cost required and as such, the asset retirement obligation was completely extinguished~~.

(gc) ~~Property and Equipment~~ Cash

~~Property and equipment are carried at cost~~The ~~and~~Company ~~include~~considers ~~expenditures~~all ~~for~~short-term ~~new~~highly ~~equipment~~liquid ~~and~~investments ~~those~~with ~~expenditures~~an ~~that~~original ~~substantially~~maturity ~~increase~~at the ~~productive~~date ~~lives~~ of ~~existing equipment~~purchase ~~and~~of ~~leasehold~~three ~~improvements.~~months ~~Maintenance~~or less ~~and~~to ~~repair~~be ~~costs~~cash ~~are expensed as incurred~~equivalents. ~~Property~~There ~~and~~were ~~equipment~~no ~~are~~cash ~~depreciated on~~equivalents aat ~~straight-line~~September ~~basis~~30, ~~over~~2022 ~~the assets’ estimated useful lives. Fully depreciated property~~ and ~~equipment~~2021, ~~still in use are not eliminated from the accounts~~respectively.

~~The Company assesses the carrying value~~(d) ofAccounts its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows, expected to be generated from such assets, to their net book value. If net book value exceeds estimated cash flows, the asset is written down to its fair value, determined by the estimated discounted cash flows from such asset. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the accounts. The difference between the net book value of the asset and proceeds on disposition is recorded as a gain or loss in our statements of operations in the period in which they occur. Receivable

~~(h)~~The Company ~~Income~~records ~~Taxes~~an accounts receivable for operations expense reimbursements due from joint interest partners. The Company estimates allowances for doubtful accounts based on the aged receivable balances and historical losses. If the Company determines any account to be uncollectible based on significant delinquency or other factors, we assess the receivable and the underlying asset for recovery. As of September 30, 2022, and 2021, no allowance was recorded. Accounts receivable were approximately $13,000 and nil on September 30, 2022, and 2021, respectively.

~~Deferred tax assets and liabilities are~~(e) ~~recognized~~Full ~~for~~Cost the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance is provided if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s policy is to recognize potential interest and penalties as a component of income tax expense when incurred.Method

The Company uses the full cost method of accounting for its oil and gas exploration and development activities. Under the full cost method of accounting, all costs associated with successful and unsuccessful exploration and development activities are capitalized on a country-by-country basis into a single cost center (i“full cost pool”). ~~Stock~~Such costs include property acquisition costs, geological and geophysical (“G&G”) costs, carrying charges on non-~~Based~~producing ~~Compensation~~properties, costs of drilling both productive and non-productive wells. Overhead costs, which includes employee compensation and benefits including stock-based compensation, incurred that are directly related to acquisition, exploration and development activities are capitalized. Interest expense is capitalized related to unevaluated properties and wells in process during the period in which the Company is incurring costs and expending resources to get the properties ready for their intended purpose. For significant investments in unproved properties and major development projects that are not being currently depreciated, depleted, or amortized and on which exploration or development activities are in progress, interest costs are capitalized. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool.

~~The Company records expenses associated~~Proved ~~with~~properties ~~the~~are ~~fair~~amortized ~~value~~on ofa ~~stock~~country-~~based~~by-country ~~compensation.~~basis ~~For~~using ~~fully~~the ~~vested~~units ~~and~~of ~~restricted~~production ~~stock~~method ~~grants~~(“UOP”), ~~the Company calculates the stock-based~~ ~~compensation~~whereby ~~expense~~capitalized ~~based~~costs ~~upon~~are ~~estimated~~amortized ~~fair~~over ~~value~~total onproved ~~the date of grant~~reserves. ~~For~~The ~~stock~~amortization ~~warrants~~base ~~and~~in ~~options,~~ the ~~Company~~UOP ~~uses~~calculation includes the ~~Black-Scholes~~sum ~~option~~of ~~valuation~~proved ~~model~~property, tonet ~~calculate~~of ~~stock-based~~accumulated ~~compensation~~depreciation, atdepletion, ~~the~~and ~~date~~amortization of(“DD&A”), ~~grant. Option pricing models require~~estimated ~~the~~future ~~input~~development ofcosts ~~highly~~(future ~~subjective~~costs ~~assumptions,~~to ~~including~~access ~~the~~and ~~expected~~develop ~~price~~proved ~~volatility.~~reserves), ~~Changes~~and inasset ~~these~~retirement ~~assumptions~~costs, ~~can~~less ~~materially affect~~related ~~the fair~~ salvage value ~~estimate~~.

33 The costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation by management and third-party consultants considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. In countries where proved reserves exist, exploratory drilling costs associated with dry holes are transferred to proved properties immediately upon determination that a well is dry and amortized accordingly. In countries where a reserve base has not yet been established, impairments are charged to earnings.

Companies that use the full cost method of accounting for oil and natural gas exploration and development activities are required to perform a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is performed quarterly, on a country-by-country basis, utilizing the average of prices in effect on the first day of the month for the preceding twelve-month period. The cost center ceiling is defined as the sum of (ja) ~~Stock~~estimated ~~Issuance~~future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling.

The Company records stock-based compensation awards issued to non-employees and other external entities for goods and services at either the fair market value of the goods received or services rendered or the instruments issued in exchange for such services, whichever is more readily determinable.32

~~(k)~~The Company ~~Earnings~~capitalizes ~~per~~exploratory ~~Share~~well costs into oil and gas properties until a determination is made that the well has either found proved reserves or is impaired. If proved reserves are found, the capitalized exploratory well costs are reclassified to proved properties. The well costs are charged to expense if the exploratory well is determined to be impaired.

~~Basic earnings per share (“EPS”)~~As ~~is computed by dividing net income (loss) by the weighted average number~~ of ~~common~~September ~~shares~~30, ~~outstanding~~2022, ~~for~~ the ~~period.~~Company’s ~~Diluted~~oil ~~EPS is~~and ~~computed~~gas byproperties ~~dividing~~consisted ~~net income (loss) by the weighted average number~~ of ~~common~~unproved ~~shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options~~properties, ~~warrants,~~capitalized ~~convertible~~costs ~~notes~~ and ~~restricted stock.~~ ~~The~~no ~~number~~proved ~~of potential common shares outstanding relating to stock options, warrants, and restricted stock is computed using the treasury stock or if-converted method~~reserves.

~~As the Company has incurred losses for~~(f) ~~the~~Asset ~~years~~Retirement ended September 30, 2021 and 2020, the potentially dilutive shares are anti-dilutive and thus not added into the EPS calculations. As of September 30, 2021 and 2020, there were 297,823,015 and 259,392,057 potentially dilutive shares, respectively. Obligations

~~(l)~~The Company’s ~~Derivative~~asset ~~Financial~~retirement ~~Instruments~~obligations will represent the present value of the estimated future costs associated with plugging and abandoning oil and natural gas wells, removing production equipment and facilities and restoring the seabed in accordance with the terms of oil and gas leases and applicable state and federal laws. Determining asset retirement obligations requires estimates of the costs of plugging and abandoning oil and natural gas wells, removing production equipment and facilities and restoring the sea bed as well as estimates of the economic lives of the oil and gas wells and future inflation rates. The resulting estimate of future cash outflows will be discounted using a credit-adjusted risk-free interest rate that corresponds with the timing of the cash outflows. Cost estimates will consider historical experience, third party estimates, the requirements of oil and natural gas leases and applicable local, state and federal laws, but do not consider estimated salvage values. Asset retirement obligations will be recognized when the wells drilled reach total depth or when the production equipment and facilities are installed or acquired with an associated increase in proved oil and gas property costs. Asset retirement obligations will be accreted each period through depreciation, depletion and amortization to their expected settlement values with any difference between the actual cost of settling the asset retirement obligations and recorded amount being recognized as an adjustment to proved oil and gas property costs. Cash paid to settle asset retirement obligations will be included in net cash provided by operating activities from continuing operations in the statements of cash flows. On a quarterly basis, when indicators suggest there have been material changes in the estimates underlying the obligation, the Company reassesses its asset retirement obligations to determine whether any revisions to the obligations are necessary. At least annually, the Company will assess all of its asset retirement obligations to determine whether any revisions to the obligations are necessary. Future revisions could occur due to changes in estimated costs or well economic lives, or if federal or state regulators enact new requirements regarding plugging and abandoning oil and natural gas wells.

~~The accounting treatment of derivative~~(g) ~~financial~~Property ~~instruments requires that the Company record certain embedded conversion options~~ and warrants as liabilities at their fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date with any change in fair value recorded as income or expense. As a result of entering into certain note agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors, as long as the certain variable convertible instruments exist.Equipment

~~(m)~~Property and ~~Use~~equipment are carried at cost and include expenditures for new equipment and those expenditures that substantially increase the productive lives of ~~Estimates~~existing equipment and leasehold improvements. Maintenance and repair costs are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives. Fully depreciated property and equipment still in use are not eliminated from the accounts.

The Company ~~preparation~~assesses the carrying value of ~~financial~~its ~~statements in~~property ~~conformity~~and ~~with~~equipment ~~GAAP~~for ~~requires~~impairment ~~management~~whenever toevents ~~make~~or ~~estimates~~changes ~~and~~in ~~assumptions~~circumstances indicate that ~~affect~~ the ~~reported~~carrying ~~amounts~~amount of ~~assets~~an ~~and~~asset ~~liabilities~~may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash ~~and~~flows, ~~disclosure~~expected ofto ~~contingent~~be generated from such assets ~~and~~to ~~liabilities~~their atnet book value. If net book value exceeds estimated cash flows, the asset ~~date~~is ofwritten down to its fair value, determined by the ~~financial~~estimated ~~statements~~discounted cash flows from such asset. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the ~~reported~~accounts. ~~amounts~~The ofdifference ~~revenues~~between ~~and~~the ~~expenses~~net ~~during~~book value of the ~~reporting~~asset ~~period.~~and ~~Actual~~proceeds ~~results~~on ~~could~~disposition ~~differ~~is ~~from~~recorded ~~those~~as ~~estimates~~a gain or loss in our statements of operations in the period in which they occur.

(nh) ~~Recent Accounting Pronouncements Not~~ ~~Yet~~Income ~~Adopted~~Taxes

~~In August 2020, the FASB issued ASU No.~~Deferred ~~2020-06,~~tax ~~Accounting~~assets ~~for Convertible Instruments~~ and ~~Contracts~~liabilities inare anrecognized ~~Entity’s~~for ~~Own~~the ~~Equity~~temporary ~~(ASU~~differences ~~2020-06),~~between ~~which simplifies~~ the ~~accounting~~ ~~for certain~~ financial ~~instruments~~reporting ~~with~~basis ~~characteristics of liabilities~~ and ~~equity,~~tax ~~including~~basis ~~convertible instruments~~of ~~and~~the ~~contracts in an entity~~Company’s ~~own~~assets ~~equity.~~and ~~Additionally,~~liabilities ~~ASU~~at ~~2020-06~~enacted ~~requires~~tax ~~the~~rates ~~application~~expected ~~of the if-converted method~~ to ~~calculate~~ ~~the~~be ~~impact~~in ofeffect ~~convertible~~when ~~instruments~~such onamounts ~~diluted~~are ~~earnings~~realized or ~~per~~settled. ~~share~~A ~~(EPS),~~valuation ~~which~~allowance is ~~consistent~~provided ~~with~~if, ~~the~~based ~~Company’s accounting~~on ~~treatment under~~ the ~~current~~weight ~~standard.~~of ~~ASU~~available ~~2020-06~~evidence, it is ~~effective~~more ~~for~~likely ~~fiscal~~than ~~years~~not ~~beginning~~that ~~after December 15, 2021, with~~some ~~early~~portion ~~adoption~~or ~~permitted~~all ~~for~~of ~~fiscal~~the ~~years~~deferred ~~beginning~~tax ~~after~~assets ~~December~~will ~~15,~~not ~~2020. ASU No. 2020-06 can~~ be ~~adopted on either a fully retrospective or modified retrospective basis~~realized. The ~~adoption~~Company’s ofpolicy ~~ASU~~is ~~2020-06~~to isrecognize ~~not~~potential ~~expected~~interest and topenalties ~~have~~as a ~~material~~component ~~impact~~of onincome ~~the~~tax ~~Company’s~~expense ~~financial statements~~when ~~or disclosures~~incurred.

~~In May 2021, the FASB issued ASU 2021-04, Earnings Per Share~~ (~~Topic 260~~i)~~, Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic~~ ~~718), and Derivatives and Hedging~~Stock-~~Contracts~~Based in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. An issuer measures the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange. ASU 2021-04 introduces a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 is not expected to have a material impact on the Company’s financial statements or disclosures.Compensation

The Company ~~has~~records ~~evaluated~~expenses ~~all~~associated ~~other~~with ~~recent~~the fair value of stock-based compensation. For fully vested and restricted stock grants, ~~accounting~~the ~~pronouncements~~Company calculates the stock-based compensation expense based upon estimated fair value on the date of grant. For stock warrants and ~~believes~~options, ~~either~~the ~~they~~Company ~~are~~uses ~~not~~the ~~applicable~~Black-Scholes oroption ~~that~~valuation ~~none~~model to calculate stock-based compensation at the date of ~~them~~grant. Option ~~will~~pricing ~~have~~models arequire ~~significant~~the ~~effect~~input onof highly subjective assumptions, including the expected price volatility. Changes in ~~Company’s~~these ~~financial~~assumptions ~~statements~~can materially affect the fair value estimate.

34 33

~~NOTE~~(j) Stock ~~2 – LIQUIDITY/GOING CONCERN~~Issuance

The Company ~~has~~records ~~incurred~~stock-based ~~accumulated~~compensation ~~losses as~~awards ofissued ~~September~~to ~~30,~~non-employees ~~2021,~~and ofother ~~$60.2~~external ~~million.~~entities ~~Further~~for ~~losses~~goods ~~are anticipated in developing our business,~~ and ~~there~~services ~~exists substantial~~at ~~doubt~~either ~~about~~ the ~~Company’s~~fair ~~ability~~market tovalue ~~continue as a going concern. As~~ of ~~September 30, 2021,~~ the ~~Company~~goods ~~had~~received $1.5 million of cash on hand. The Company estimates that it will need to raise a minimum of $10 million to meet its obligations and planned expenditures through December 2022. The Company plans to finance operations and planned expenditures through equity and/or ~~debt financings,~~services ~~and~~rendered ~~strategic transactions to include farm-outs, asset sales~~ or ~~mergers. The Company also plans to extend~~ the ~~agreements associated~~instruments ~~with~~issued ~~all~~in ~~loans,~~exchange ~~the~~for ~~accrued~~such ~~interest payable on these loans~~services, ~~as well as the Company’s accrued liabilities. There~~ ~~are~~whichever ~~no assurances that financing will be available with acceptable terms, if at all. If the Company~~ is ~~not~~more ~~successful~~readily ~~in obtaining financing, operations would need to be curtailed or ceased or the Company would need to sell assets or consider alternative plans up to and including restructuring~~determinable. ~~The financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~

~~NOTE~~(k) Earnings 3per ~~– OIL AND NATURAL GAS PROPERTIES~~Share

~~The~~Basic earnings ~~Company~~per ~~currently~~share ~~has~~(“EPS”) ~~under~~is ~~lease~~computed ~~two federal~~by ~~Outer~~dividing ~~Continental~~net ~~Shelf~~income ~~blocks~~(loss) ~~and~~by ~~has~~the ~~licensed~~weighted 2average number of common shares outstanding for the period.2 ~~million~~Diluted ~~acres~~EPS ofis ~~three-dimensional~~computed by dividing net income (~~3-D~~loss) ~~seismic~~by ~~data~~the inweighted ~~its~~average ~~area of~~number ~~concentration~~of common shares and potential common shares outstanding (if dilutive) during each period. ~~Our~~Potential ~~leases~~common ~~expire~~shares ~~June~~include 30stock options, ~~2022~~warrants, convertible notes and ~~October~~restricted 31stock. The number of potential common shares outstanding relating to stock options, ~~2025~~warrants, ~~respectively~~and restricted stock is computed using the treasury stock or if-converted method.

~~The Company, as the operator of two wells~~As ~~drilled in~~ the ~~Gulf~~Company ~~of Mexico,~~ has incurred ~~tangible~~losses ~~and intangible drilling costs~~ for the ~~wells~~years inended ~~process~~September ~~and~~30, ~~has~~2022 ~~billed~~and ~~its working~~2021, ~~interest partners for their respective share of~~ the ~~drilling~~potentially ~~costs~~dilutive toshares ~~date.~~are ~~The intangible drilling~~ anti-dilutive and ~~all~~thus ~~other~~not ~~costs related~~added tointo the ~~first~~EPS ~~well have been impaired~~calculations. ~~The~~As ~~second well, Tau No. 1, was drilled to a measured depth~~ of ~~15,254~~September ~~feet~~30, as ~~compared~~2022 toand ~~the originally permitted 29~~2021,~~857~~ ~~foot~~there ~~measured depth. Producible hydrocarbon zones~~ were ~~not established to that depth~~289, ~~but hydrocarbon shows were encountered. Complex geomechanical conditions required two by-pass wellbores~~635,920 ~~one sidetrack wellbore,~~ and ~~eight casing strings to reach that depth. Equipment limitations prevented further drilling. In addition~~297,823,015 ~~the drilling rig had~~potentially ~~contractual~~dilutive ~~obligations~~shares, ~~related to another operator~~respectively. The Company elected to plug this well in a manner that would allow for re-entry at a later time. The Company is evaluating various options related to future operations in this wellbore and testing of the deeper Tau prospect. The Company plans to re-drill this prospect within the next twelve months. The effects of the COVID-19 pandemic on offshore operations is influencing the potential timing of a re-drill.

In January 2019, the Tau No. 1 well experienced an underground control of well event and as a result, the Company filed an insurance claim pursuant to its insurance policy with its insurance underwriters (~~the “Underwriters”~~l)~~. The total amount of the claim was approximately $10.8~~ ~~million~~Derivative ~~for~~Financial 100% working interest after the insurance deductible amount. During 2019, the Company received approximately $2.5 million of this amount and credited wells in process for approximately $0.9 million for the Company’s portion, and recorded an accrued payable for approximately $1.6 million, pending evaluation of distributions to the working interest owners. During the twelve months ended September 30, 2020, the accrued payable was settled by the issuance to the working interest partner of approximately 38.4 million shares of the Company’s common stock.Instruments

~~In May 2019, the Tau No. 1 well experienced~~The aaccounting ~~second~~treatment ~~underground control~~ of ~~well~~derivative ~~event~~financial ~~and~~instruments asrequires athat ~~result,~~ the Company ~~filed~~record certain anembedded ~~insurance~~conversion ~~claim.~~options ~~The~~and ~~claim~~warrants ~~was~~as ~~related~~liabilities toat atheir ~~subsurface well~~fair ~~occurrence~~value ~~that~~as ~~happened~~of ~~during~~ the ~~drilling~~inception date of the ~~Company‘s~~agreement and ~~Tau No. 1 well on May 5, 2019~~ at afair ~~measured~~value ~~depth~~as of ~~15,254 feet.~~each ~~The~~subsequent ~~Company~~balance ~~subsequently~~sheet ~~controlled~~date ~~the~~with ~~occurrence~~any ~~and~~change ~~ceased drilling operations and plugs were placed~~ in ~~the~~fair ~~well~~value torecorded ~~meet regulatory~~as ~~requirements~~income ~~prior~~or ~~to rig release~~expense. ~~Pursuant~~As toa ~~the~~result of ~~Policy~~entering ~~terms~~into ~~and~~certain ~~conditions~~note agreements, ~~the Underwriters were obligated to reimburse GulfSlope~~ for ~~qualified~~which ~~actual~~such ~~costs~~instruments ~~and~~contained ~~expenses~~a ~~incurred~~variable toconversion ~~(i)~~feature ~~regain~~with ~~control~~no ~~of the well~~floor, ~~and (ii) restore or re-drill~~ the ~~well~~Company tohas ~~15,254~~adopted ~~feet.~~a ~~Total~~sequencing ~~costs~~policy ~~and~~in ~~expenses~~accordance towith ~~regain~~ASC ~~control~~815-40-35-12 ofwhereby ~~the~~all ~~well~~future ~~were~~instruments ~~determined~~may to be ~~approximately $4.8 million (net~~classified ofas ~~deductible)~~a ~~for~~derivative ~~100%~~liability ~~working~~with ~~interest~~the ~~and~~exception ~~all~~ of ~~this~~instruments ~~amount~~related ~~had~~to ~~been~~share-based ~~received~~compensation asissued ofto ~~September~~employees 30or directors, as ~~2020.~~long ~~GulfSlope’s~~as ~~share of~~the ~~this~~certain ~~amount~~variable ~~was~~convertible ~~approximately~~instruments $1exist.~~2 million.~~

~~In November 2019, an agreement was reached~~(m) ~~with~~Use ~~a working interest partner whereby the working interest partner re-conveyed to the Company their 5% interest in Tau No. 1 and Canoe wells in exchange for the release~~ of claims and the Company foregoing collection of accounts receivable owed by the working interest partner. As a result of this agreement approximately $3.6 million of accounts receivable was reclassified to oil and gas properties – unproved during the year ended September 30, 2020.Estimates

~~On July 27, 2020, the Company entered into~~The apreparation ~~settlement with the Underwriters~~ of afinancial ~~well~~statements ~~control~~in ~~events~~conformity ~~insurance policy covering certain claims associated~~ with ~~the~~GAAP ~~drilling of~~requires ~~the~~management ~~Company’s~~to ~~Tau~~make ~~Prospect~~estimates ~~during~~and ~~May~~assumptions ~~2019.~~that ~~In accordance with~~ affect the ~~settlement,~~reported inamounts ~~lieu~~ of ~~the~~assets ~~insurer~~and ~~paying~~liabilities ~~for the redrill of the well~~ and ~~for~~disclosure ~~a complete release~~ of ~~any~~contingent ~~further~~assets ~~liability under the insurance policy, the Company will receive approximately $6.6 million in cash net to its 25% working interest. At September 30, 2020, approximately $6.4 million has been received~~ and ~~all of~~liabilities ~~this~~at ~~amount has been received through~~ the ~~filing~~ date of ~~this report. The Company intends to apply~~ the ~~proceeds~~financial statements ~~from~~and the ~~insurance settlement~~reported ~~to pay~~ amounts ~~due~~of onrevenues ~~the Convertible Debentures~~ and ~~other~~expenses ~~payables,~~during asthe ~~well~~reporting asperiod. ~~fund~~Actual ~~other~~results ~~general~~could ~~corporate~~differ ~~purposes including~~from ~~expenditures associated with the Company’s drilling program~~those estimates.

As of September 30, 2021, the Company’s oil and natural gas properties consisted of unproved properties, wells in process and no proved reserves. During the years ended September 30, 2021 and 2020, the Company capitalized approximately $0.15 million and $2.3 million, net of impairment of nil and approximately $0.6 million, respectively. Approximately $0.01 million and $0.3 million of general and administrative expenses, respectively, was capitalized to oil and natural gas properties for the years ended September 30, 2021 and 2020. Conversely, during the year ended September 30, 2020, the Company received certain vendor credits totaling approximately $2.1 million (~~net to the Company’s interest~~n) ~~and insurance claim proceeds of approximately $7.5 million which the Company applied against oil and~~ ~~natural~~Recently ~~gas~~Adopted ~~properties~~Accounting ~~in the condensed balance sheet.~~Pronouncements

35 In May 2021, Financial Accounting Standards Board (“FASB”) issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. An issuer measures the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange. ASU 2021-04 introduces a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company has elected to early adopt this standard and in accordance with this standard was accounted for prospectively as of the beginning of the year. The early adoption of this standard impacted the accounting for the modification of investor warrants discussed in Note 7 and resulted in the recording of a loss on debt extinguishment of approximately $85,000. Historically the cost associated with the warrant modification was capitalized to deferred loan cost and amortized over the debt extension period.

~~During the twelve months ended September~~(n) ~~30,~~Recent ~~2021~~Accounting ~~and~~Pronouncements ~~2020,~~Not ~~the~~Yet ~~Company incurred impairment charges of approximately $0.4 million and approximately $2.4 million, respectively, resulting from the relinquishment or expiration of oil and natural gas leases.~~Adopted

~~NOTE~~In August 42020, –the ~~PROPERTY~~FASB ~~AND~~issued ~~EQUIPMENT~~ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (EPS), which is consistent with the Company’s accounting treatment under the current standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. ASU No. 2020-06 can be adopted on either a fully retrospective or modified retrospective basis. The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s financial statements or disclosures.

~~Property~~The Company has evaluated all other recent accounting pronouncements and ~~equipment~~believes ~~consist~~either ofthey ~~the~~are ~~following~~not applicable or that none of them atwill ~~September~~have ~~30,~~a ~~2021~~significant ~~and~~effect ~~2020:~~on the Company’s financial statements.

	2021			2020
Office equipment and computers	$	135,254		$	133,089
Furniture and fixtures		16,280			16,280
Leasehold improvements		7,680			7,680
Total		159,214			157,049
Less: accumulated depreciation		(157,369	)		(150,702	)
Net property and equipment	$	1,845		$	6,347

~~Depreciation is computed on a straight-line~~NOTE ~~basis~~2 ~~over~~– ~~the~~LIQUIDITY/GOING ~~estimated useful lives of the assets, which were as follows:~~CONCERN

	Life
Office equipment and computers	3 years
Furniture and fixtures	5 years
Leasehold improvements	Shorter of 5 years or related lease term

The Company has incurred accumulated losses as of September 30, 2022, of $68.9 million. Further losses are anticipated in developing our business, and there exists substantial doubt about the Company’s ability to continue as a going concern. As of September 30, 2022, the Company had $0.14 million of cash on hand. The Company estimates that it will need to raise a minimum of $10 million to meet its obligations and planned expenditures through December 2023. The Company plans to finance operations and planned expenditures through equity and/or debt financings, and strategic transactions to include farm-outs, asset sales or mergers. The Company also plans to extend the agreements associated with all loans, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased or the Company would need to sell assets or consider alternative plans up to and including restructuring. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Depreciation expense was $6,667 and $6,667~~NOTE ~~for~~3 ~~the~~– ~~years~~OIL ~~ended~~AND ~~September~~NATURAL ~~30,~~GAS ~~2021 and 2020, respectively.~~PROPERTIES

~~NOTE~~The Company 5currently –has ~~INCOME~~under ~~TAXES~~ lease one federal Outer Continental Shelf block and has licensed 2.2 million acres of three-dimensional (3-D) seismic data in its area of concentration. Our lease expires on October 31, 2025.

~~The~~As of ~~provision~~September ~~for~~30, ~~income~~2022, ~~taxes~~the ~~consists~~ Company’s oil and natural gas properties consisted of ~~the~~unproved ~~following~~properties, ~~for~~capitalized exploration costs and no proved reserves. During the years ended September 30, 2022, and 2021, the Company capitalized approximately $0.03 million and ~~2020:~~$0.15 million to oil and gas properties. Nil and approximately $0.01 million of general and administrative expenses, respectively, were capitalized to oil and natural gas properties for the years ended September 30, 2022, and 2021.

	2021		2020
FEDERAL
Current	$	—	$	—
Deferred		—		—
STATE
Current		—		—
Deferred		—		—
TOTAL PROVISION	$	—	$	—

During the twelve months ended September 30, 2022, the Company incurred impairment charges of approximately $6.9 million, resulting from the relinquishment or expiration of oil and natural gas leases and the impairment of the Tau well costs. For the twelve months ended September 30, 2021, impairment charges were approximately $0.4 million resulting from the relinquishment or expiration of oil and natural gas leases.

~~The difference between the actual income~~NOTE ~~tax~~4 ~~provision~~– ~~versus~~PROPERTY ~~tax~~AND ~~computed at the statutory rate is as follows for the years ended September 30, 2021 and 2020, respectively:~~EQUIPMENT

	2021			2020
Expected provision (based on statutory rate of 21%)	$	(467,527	)	$	(507,379	)
Effect of:
Increase (decrease) in valuation allowance		(661,812	)		2,399,698
Non-Allowable (income) expenses		—			(233,063	)
Prior year true-ups to return and other, net		1,129,339			(1,659,256	)
Total actual provision	$	—		$	—

Property and equipment consist of the following at September 30, 2022 and 2021:

The Company does not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense (benefit). For the years ended September 30, 2021 and 2020, the Company did not recognize any interest or penalties, nor did we have any interest or penalties accrued as of September 30, 2021 and 2020 relating to unrecognized benefits. Deferred income tax assets and liabilities at September 30, 2021 and 2020, respectively, consist of the following:

	2022			2021
Office equipment and computers	$	68,565		$	135,254
Furniture and fixtures		—			16,280
Leasehold improvements		—			7,680
Total		68,565			159,214
Less: accumulated depreciation		(67,716	)		(157,369	)

Net property and equipment	$	849		$	1,845

~~Schedule~~Depreciation is ofcomputed ~~deferred~~on ~~income~~a ~~tax~~straight-line basis over the estimated useful lives of the assets, ~~and~~which ~~liabilities~~were as follows:

DEFERRED TAX ASSETS (LIABILITIES)		2021			2020
	Life
Net operating losses		$	13,028,326		$	13,767,315
Office equipment and computers	3 years
Exploration costs			(1,299,327	)		(1,156,312	)
Furniture and fixtures	5 years
Oil and natural gas leases			1,337,094			1,337,094
Leasehold improvements	Shorter of 5 years or related lease term
IDC			(1,559,306	)		(1,689,664	)
Stock based compensation			686,545			666,202
Accrued interest and expenses not paid			632,087			579,349
Derivative financial instrument			252,348			224,816
Differences in book/tax depreciation			(387	)		10,392
Net deferred tax asset			13,077,380			13,739,192
Valuation allowance			(13,077,380	)		(13,739,192	)
NET DEFERRED TAXES		$	—		$	—

36 Depreciation expense was $996 and $6,667 for the years ended September 30, 2022, and 2021, respectively.

~~The Company’s valuation allowance~~NOTE ~~decreased~~5 ~~$661,812~~– ~~during~~INCOME ~~the year ended September 30, 2021 and increased $2,399,698 during the year ended September 30, 2020.~~TAXES

~~At September 30, 2021, the Company had~~The ~~approximately~~provision ~~$62.0 million~~for ofincome ~~net~~taxes ~~operating~~consists ~~losses (“NOL”), approximately $0.1 million~~ of ~~which will expire from 2024 to 2031, approximately $33.2 million of which will expire from 2032 to 2038, and approximately $28.7 million of which can be carried forward indefinitely. $33.4 million of~~ the ~~Company’s~~following ~~NOLs~~for ~~are allowable as a deduction against 100 percent of future taxable income since they were generated prior to~~ the ~~effective~~years ~~date~~ended ofSeptember ~~limitations~~30, ~~imposed~~2022 ~~by the Tax Cut~~ and Jobs Act (TCJA) of 2017 and Coronavirus Aid, Relief, and Economic Security Act (CARES) of 2020. $28.6 million of the Company’s NOLs are allowable as a deduction against 80 percent of future taxable income.2021:

The tax years ended September 30, 2018 through 2021 are open for examination for federal income tax purposes and by other major taxing jurisdictions to which we are subject.

	2022		2021
FEDERAL
Current	$	—	$	—
Deferred		—		—
STATE
Current		—		—
Deferred		—		—
TOTAL PROVISION	$	—	$	—

~~NOTE~~The difference 6between –the ~~RELATED~~actual ~~PARTY~~income ~~TRANSACTIONS~~tax provision versus tax computed at the statutory rate is as follows for the years ended September 30, 2022, and 2021, respectively:

During April 2013 through September 2017, the Company entered into convertible promissory notes whereby it borrowed a total of $8,675,500 from John Seitz, the chief executive officer (“CEO”). The notes are due on demand, bear interest at the rate of 5% per annum, and $5,300,000 of the notes are convertible into shares of common stock at a conversion price equal to $0.12 per share of common stock (the then offering price of shares of common stock to unaffiliated investors). As of September 30, 2021 and 2020, the total amount owed to John Seitz is $8,675,500. This amount is included in loans from related parties within the condensed balance sheets. There was approximately $2.96 million and $2.52 million, respectively, of unpaid interest associated with these loans included in accrued interest payable within the balance sheet as of September 30, 2021 and 2020.

	2022			2021
Expected provision (based on statutory rate of 21%)	$	(1,826,318	)	$	(467,527	)
Effect of:
Increase (decrease) in valuation allowance		1,913,189			(661,812	)
Non-Allowable (income) expenses		—			—
Prior year true-ups to return and other, net		(86,871	)		1,129,339
Total actual provision	$	—		$	—

~~On November 15, 2016, a family member of the CEO entered into a $50,000 convertible promissory note with associated warrants under the same terms received by other investors (see Note 7).~~35

~~Domenica~~The Company ~~Seitz~~does ~~CPA,~~not ~~who~~have isany ~~related~~material touncertain ~~the CEO,~~tax ~~has~~positions. ~~provided~~The ~~accounting~~Company’s ~~services~~policy is to ~~the~~recognize ~~Company,~~interest asand apenalties accrued ~~consultant~~related ~~and~~to ~~beginning~~unrecognized ~~October~~tax ~~2020~~benefits as ana ~~employee~~component of income tax expense (benefit). ~~During~~For the years ended September 30, 2022, ~~2021~~ and ~~2020~~2021, the ~~services~~Company ~~provided~~did ~~were~~not ~~valued~~recognize atany ~~approximately~~interest ~~$75,000~~or ~~and $60~~penalties,~~000,~~ ~~respectively.~~nor ~~The~~did ~~amount owed~~we tohave ~~this~~any ~~related~~interest ~~party~~or ~~totals~~penalties ~~approximately~~accrued ~~$346,000~~ as of September 30, ~~2021~~2022 and ~~2020,~~2021 ~~respectively.~~relating ~~The~~to ~~Company~~unrecognized ~~has~~benefits. ~~accrued these~~Deferred ~~amounts,~~income ~~and~~tax ~~they~~assets ~~have~~and ~~been~~liabilities ~~reflected~~at ~~in related party payable in the~~ September 30, 2022 and 2021, ~~and~~respectively, ~~2020~~consist ~~financial~~of ~~statements.~~the following:

~~NOTE~~Schedule 7of –deferred ~~CONVERTIBLE~~income ~~NOTES~~tax ~~PAYABLE~~assets and liabilities

The Company’s convertible promissory notes consisted of the following as of September 30, 2021 and 2020.

DEFERRED TAX ASSETS (LIABILITIES)	2022			2021

Net operating losses	$	14,224,953		$	13,028,326
Exploration costs		(858,133	)		(1,299,327	)
Oil and natural gas leases		—			1,337,094
IDC		—			(1,559,306	)
Stock based compensation		693,218			686,545
Accrued interest and expenses not paid		729,098			632,087
Derivative financial instrument		201,432			252,348
Differences in book/tax depreciation		—			(387	)
Net deferred tax asset		14,990,568			13,077,380
Valuation allowance		(14,990,568	)		(13,077,380	)
NET DEFERRED TAXES	$	—		$	—

	September 30, 2021							September 30, 2020
	Notes		Discount			Notes, Net of Discount		Notes		Discount			Notes Net of Discount
Bridge Financing Notes	$	227,000	$	(50,337	)	$	176,663	$	227,000	$	(11,209	)	$	215,791
Delek Note		—		—			—		—		—			—
June 2019 Convertible Debenture		—		—			—		300,000		(54,178	)		245,822
Total	$	227,000	$	(50,337	)	$	176,663	$	527,000	$	(65,387	)	$	461,613

The Company’s valuation allowance increased $1,913,189 during the year ended September 30, 2022 and decreased $661,812 during the year ended September 30, 2021.

~~Bridge~~At September ~~Financing~~30, 2022, the Company had approximately $67.7 million of net operating losses (“NOL”), approximately ~~Notes~~$0.1 million of which will expire from 2024 to 2031, approximately $33.2 million of which will expire from 2032 to 2038, and approximately $34.4 million of which can be carried forward indefinitely. $33.4 million of the Company’s NOLs are allowable as a deduction against 100 percent of future taxable income since they were generated prior to the effective date of limitations imposed by the Tax Cut and Jobs Act (TCJA) of 2017 and Coronavirus Aid, Relief, and Economic Security Act (CARES) of 2020. $34.4 million of the Company’s NOLs are allowable as a deduction against 80 percent of future taxable income.

Between June and November 2016, the Company issued eleven convertible promissory notes (“Bridge Financing Notes”) with associated warrants in a private placement to accredited investors for total gross proceeds of $837,000, including $222,000 from related parties. These notes had a maturity of one year (which has been extended each year at maturity and is currently April 30, 2022), an annual interest rate of 8% and can be converted at the option of the holder at a conversion price of $0.025 per share. In addition, the convertible notes will automatically convert if a qualified equity financing of at least $3.0 million occurs before maturity and such mandatory conversion price will equal the effective price per share paid in the qualified equity financing. The ~~remaining note balances as of September~~ ~~30,~~tax ~~2021 and 2020 were $277,000, including $50,000 from related parties, with remaining unamortized debt discounts of approximately $50,000 and $11,000, respectively. Debt discount amortization for the~~ years ended September 30, ~~2021~~2019 ~~and~~through ~~2020~~2022 ~~was~~are ~~approximately $48,000~~open ~~and~~for ~~$8,100,~~examination ~~respectively.~~for ~~Accrued~~federal ~~interest~~income astax ofpurposes ~~September 30, 2021~~ and ~~2020~~by ~~related~~other tomajor ~~these notes was approximately $116,000~~taxing ~~and~~jurisdictions ~~$94,000 respectively. As noted above, the maturity date related~~ to these notes was extended to April 30, 2022. In consideration for the extension of the notes, the Company extended the term of the related warrants until April 30, 2022 and recognized approximately $87,000 of additional debt discount which ~~represented~~we ~~the~~are ~~incremental fair value of the modified warrants over the pre-modification warrants~~subject.

37 NOTE 6 – RELATED PARTY TRANSACTIONS

~~Delek~~During April ~~Note~~2013 through September 2017, the Company entered into convertible promissory notes whereby it borrowed a total of $8,675,500 from John Seitz, the chief executive officer (“CEO”). The notes are due on demand, bear interest at the rate of 5% per annum, and $5,300,000 of the notes are convertible into shares of common stock at a conversion price equal to $0.12 per share of common stock (the then offering price of shares of common stock to unaffiliated investors). As of September 30, 2022, and 2021, the total amount owed to John Seitz is $8,675,500. This amount is included in loans from related parties within the condensed balance sheets. There was approximately $3.4 million and $2.96 million, respectively, of unpaid interest associated with these loans included in accrued interest payable within the balance sheet as of September 30, 2022, and 2021.

On ~~March 1, 2019, the Company entered into~~ aNovember ~~term loan agreement with Delek GOM Investments LLC (“Delek”)~~15, ~~where Delek agreed to provide the Company with multiple draw term loans in an aggregate stated principal amount of up to $11.0 million~~2016, ~~of which $10.0 million was initially advanced and subsequently converted to equity through the exercise of~~ a ~~warrant.~~family ~~The~~member ~~maturity date~~ of the ~~facility~~CEO ~~was~~entered ~~September~~into 4,a ~~2019~~$50,000 ~~and until~~convertible ~~such~~promissory ~~time~~note ~~any~~with ~~loans~~associated ~~would~~warrants ~~bear interest at a rate per annum equal to 5.0% or 7.0% upon the occurrence of default. Amounts outstanding~~ under the ~~Term~~same ~~Loan~~terms ~~Agreement~~received ~~are secured~~ by aother ~~security~~investors ~~interest~~(see inNote ~~substantially all of the properties and assets of the Company~~7). ~~On April 19, 2019, the Company borrowed the remaining $1.0 million under this agreement.~~

~~The~~Domenica Seitz ~~term~~CPA, ~~loan~~who ~~facility~~is ~~matured~~related ~~September 4,~~to ~~2019~~the CEO, ~~and~~has inprovided ~~October~~accounting ~~2019,~~services to the Company, ~~signed~~as a ~~Post-Drilling~~consultant ~~Agreement~~and ~~with~~beginning ~~Delek~~October ~~modifying~~2020 as ~~this~~an ~~arrangement~~employee. ~~The~~During ~~Post-Drilling Agreement~~the ~~states~~years ~~that~~ended asSeptember ~~payoff~~30, ~~for~~2022 ~~the~~and ~~Company’s outstanding obligations of $1~~2021,~~000,000~~ ~~plus~~the ~~accrued~~services ~~interest~~provided ~~(and~~were ~~additional fees~~valued ofat approximately $~~200~~67,000), and ~~the Company shall issue a convertible note payable to Delek in the amount of~~ $175,~~220~~000,~~548~~ respectively. The ~~new note~~amount isowed ~~convertible~~to atthis ~~the~~related ~~option~~party oftotals ~~Delek~~approximately at$346,000 aas ~~conversion price~~ of ~~$0.05~~September ~~per share~~30, 2022 and in2021, respectively. ~~the~~The ~~event~~Company ofhas ~~default~~accrued ~~the~~these ~~conversion rate~~amounts, ~~adjusts~~and tothey ~~60%~~have ofbeen ~~the~~reflected ~~lowest~~in ~~volume~~related ~~weighted~~party ~~average~~payable ~~price~~ in the ~~previous~~September ~~20 trading days. Interest on the note accrues at~~30, ~~12% per annum (15% upon default) and the maturity of the note is October 22~~2022, ~~2020. The Company has a right to prepay all principal~~ and ~~accrued~~2021 ~~interest~~financial ~~prior to maturity~~statements.

~~The Company accounted for the October 2019~~NOTE ~~transaction~~7 as– anCONVERTIBLE ~~extinguishment~~NOTES of the prior note given the addition of the substantive conversion feature discussed above. In addition, The Company concluded that the embedded conversion feature within the note requires derivative accounting treatment under ASC 815, Derivatives and Hedging due to the potential variable conversion feature which lacks an explicit limit on the number of shares that may be required upon conversion. Accordingly, the Company valued the embedded conversion feature and host instrument at their fair values of $479,498 and $1,220,548, respectively, and recognized a loss on extinguishment of $676,785. The fair value of the host note was determined by discounting the future cash flows of the note at a market participant-based rate of interest. Further, since the embedded conversion feature is a derivative liability, it is subsequently remeasured to fair value each reporting period.PAYABLE

~~On September 30, 2020, the~~ The Company’s ~~and Delek settled this~~ convertible ~~note~~promissory ~~and~~notes ~~related~~consisted ~~accrued interest~~ of ~~$129,211 for a cash payment of $1,220,548 and~~ the ~~issuance 17,500,000~~following ~~shares of common stock. The shares were not issued until October 2020 and are reflected on the balance sheet~~ as ~~additional paid in capital – shares to be issued. The fair value~~ of ~~the embedded conversion option was zero as of~~ September 30, ~~2020. The~~2022 ~~Company~~and ~~recognized a $35,045 gain on extinguishment of debt as a result of the settlement~~2021.

The fair value of the embedded conversion feature was determined utilizing a Geometric Brownian Motion Stock Path Based Monte Carlo Simulation that utilized the following key assumptions:

	September 30, 2022						September 30, 2021
	Notes		Discount		Notes, Net of Discount		Notes		Discount			Notes Net of Discount
Bridge Financing Notes	$	227,000	$	—	$	227,000	$	227,000	$	(50,337	)	$	176,663
Total	$	227,000	$	—	$	227,000	$	227,000	$	(50,337	)	$	176,663

		September 30, 2020
Stock Price	$	0.006
Fixed Exercise Price	$	0.050
Volatility		127	%
Term (Years)		0.05
Risk Free Rate		0.08	%

~~June 2019 Convertible~~Bridge ~~Debenture~~Financing Notes

On Between June ~~21,~~and ~~2019~~November 2016, the Company ~~entered~~issued ~~into~~eleven convertible promissory notes (“Bridge Financing Notes”) awith ~~securities~~associated ~~purchase~~warrants ~~agreement~~in toa ~~borrow~~private upplacement to accredited investors for total gross proceeds of $3837,000, including $222,000 from ~~through~~related ~~the~~parties. ~~issuance~~These notes had a maturity of ~~convertible~~one ~~debentures~~year (~~“Convertible~~which ~~Debentures”) and~~has ~~associated~~been ~~warrants.~~extended Oneach ~~June~~year 21at maturity, ~~2019~~with current maturity of April 30, ~~approximately~~2024), an annual interest rate of 8% and can be converted at the option of the holder at a conversion price of $20.025 per share. In addition,~~100,000~~ ~~(“Tranche~~the ~~1”)~~convertible notes will automatically convert if a qualified equity financing of ~~Convertible~~at ~~Debentures~~least ~~were~~$3.0 ~~purchased~~million ~~with~~occurs ~~other~~before ~~tranches~~maturity ~~closing~~and onsuch ~~August~~mandatory 7conversion price will equal the effective price per share paid in the qualified equity financing. The remaining note balance as of September 30, ~~2019~~2022 ~~for~~and 2021 was $~~400~~277,000, ~~(“Tranche~~including ~~2”)~~$50,000 ~~and~~from ~~November~~related 6parties, with ~~2019~~remaining ~~(“Tranche~~unamortized ~~3”) for~~debt discounts of nil and approximately $~~500~~50,000, respectively. ~~All~~For ~~tranches~~the ~~accrue~~year ~~interest~~ended atSeptember 8%30, 2022, the two-year loan and ~~mature~~warrant ~~one~~extension ~~year~~resulted ~~after~~in ~~each~~loss ~~respective~~on ~~closing~~extinguishment ~~date~~of debt of approximately $85,000. ~~and~~For ~~are~~the ~~convertible~~years atended ~~the~~September ~~option~~30, of2022 ~~the~~and ~~holder~~2021, ~~any~~debt ~~time~~discount ~~after~~amortization ~~issuance~~was ~~into~~approximately ~~common~~$50,000 ~~stock~~and at$48,000, respectively. aAccrued ~~conversion~~interest ~~rate~~as of ~~the~~September ~~lesser~~30, ~~of:~~2022, ~~(1)~~and 2021 related to these notes was approximately $~~0.05~~138,000 ~~per~~and ~~share; or~~$116,000, ~~(2)~~respectively. ~~80%~~As ofnoted above, the ~~lowest~~maturity ~~volume~~date ~~weighted~~related ~~adjusted~~to ~~price~~these notes ~~(as~~was ~~reported~~extended byto ~~Bloomberg~~April 30, ~~LP)~~2024. In consideration for the ~~ten~~extension ~~consecutive~~of ~~trading~~the ~~days~~notes, ~~immediately~~the Company extended the term of the related ~~preceding~~warrants ~~conversion~~until April 30, 2024 and inrecognized ~~the~~approximately ~~event~~$85,000 of ~~default~~loss on extinguishment of debt when the ~~conversion~~incremental ~~rate~~fair value ~~adjusts~~pre modification was compared to ~~60%~~post modification and the incremental value of the ~~lowest~~modified ~~volume~~warrants ~~weighted~~was ~~average~~over ~~price~~10% of the inold note and as such the ~~previous~~warrants 20were ~~trading~~expensed ~~days~~immediately.

~~In addition, the holder received warrants~~June to2019 purchase an aggregate of 50 million shares of common stock at an exercise price of $0.04 per share. Such warrants expire on the fifth anniversary of issuance. In total the offering costs incurred related to this Convertible Debenture ~~were approximately $398,000.~~

~~The Company evaluated the conversion feature~~In ~~and~~November concluded that it should be bifurcated and accounted for as a derivative liability due to the variable conversion feature which does not contain an explicit limit on the number of shares that are required to be issued upon conversion. In addition2020, the Company ~~concluded~~ ~~the~~made ~~warrants~~a ~~required~~$300,000 ~~treatment~~payment asin ~~derivative~~full ~~liabilities as the Company could not assert it has sufficient authorized but unissued shares~~ to ~~settle~~satisfy the ~~warrants~~remaining ~~upon~~balance ~~exercise~~of ~~when taking into account other stock-based commitments including~~ the ~~Convertible Debentures.~~convertible ~~Accordingly,~~debenture ~~the embedded conversion feature~~ and ~~warrants were recorded at fair value at issuance and are subsequently~~a ~~remeasured~~gain toon ~~fair~~extinguishment ~~value~~of ~~each~~debt ~~reporting~~was ~~period. The Company~~ recognized ain ~~gain~~the amount of ~~approximately~~ $235,~~400,000~~678. Debt discount amortization for the year ended September 30, ~~2020,~~2021 ~~related~~was toapproximately ~~the change in fair value of the embedded conversion feature and warrants~~$44, ~~respectively~~000.

38 NOTE 8 – Fair Value Measurement

InFair value ~~June~~is ~~2020,~~defined ~~the~~as ~~Company extended~~ the ~~maturity~~ ~~dates~~price ofthat ~~Tranche~~would 1be ~~and~~received ~~Tranche~~upon 2the tosale ~~August 21, 2020 in exchange for a cash payment~~ of ~~$50,000.~~an ~~The~~asset ~~extension~~or ~~was~~paid ~~treated as~~to transfer a ~~modification~~liability ~~for accounting purposes which resulted~~ in ~~the $50,000 being recognized as~~ an ~~additional~~orderly ~~debt discount allocated~~transaction ~~on a pro-rata basis~~ between ~~Tranche~~market 1participants ~~and~~at ~~Tranche~~the 2measurement ~~and~~date. ~~will~~Fair bevalue ~~amortized~~measurements ~~using~~are ~~the~~classified ~~effective~~and ~~interest~~disclosed ~~method~~in ~~over~~one ~~the remaining life~~ of the ~~respective tranches.~~following categories:

On July 27, 2020, the Company and the holder agreed to the following cash payments in full satisfaction of the obligations thereunder: (1) $50,000 on the date of the Agreement; (2) $700,000 on or before August 21, 2020; (3) $750,000 on or before September 30, 2020; and (4) any remaining principal amount outstanding on or before November 30, 2020. As of the date of the agreement, the principal balance outstanding on the Convertible Debenture was $1,900,000, which amount may be reduced in the event that holder elects to convert to equity all or any portion of principal prior to repayment. In connection with the agreement, the holder agreed not to convert more than $300,000 of principal of the Debenture between the date of the agreement and November 30, 2020. Upon the timely payment by the Company of the amounts set forth above, all other amounts due on the Debentures, including any interest or fees accrued or that will accrue or become due or payable on the Debentures, will be extinguished. The Company accounted for this arrangement as a modification of the existing debt.

Level 1:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. GulfSlope considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:	Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that GulfSlope values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivative financial instruments as well as long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date.
Level 3:	Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity).

~~The~~As required ~~Company~~by ~~further~~ASC ~~agreed~~820-10, tofinancial ~~reduce~~assets ~~the exercise~~and ~~price~~liabilities onare ~~the~~classified ~~warrants~~based ~~held~~on by the ~~holder~~lowest ~~representing~~level ~~the~~of ~~right~~input tothat ~~purchase~~is ansignificant to ~~aggregate~~the offair ~~50,000,000~~value ~~shares~~measurement. ofThe ~~common stock~~Company’s assessment of the ~~Company~~significance ~~from~~of ~~$0.04~~a ~~per~~particular ~~share~~input to ~~$0.02~~the ~~per~~fair ~~share~~value measurement inrequires ~~exchange~~judgement ~~for~~and may affect the ~~elimination~~valuation of ~~anti-dilution~~the ~~provisions~~fair ~~contained in~~value ~~the~~of ~~warrants.~~assets ~~The~~and ~~value~~liabilities ofand ~~this~~their ~~modification~~placement iswithin the ~~approximately~~fair ~~$16,000~~value hierarchy levels.

~~During the year ended September 30, 2020,~~Fair ~~the~~Value ~~lender converted approximately $1,200,000 of principal of Tranche 1 and approximately $139,000 of accrued interest into common stock. The common stock issued was recorded at its fair value~~ on ~~the dates of conversion which totaled approximately $2.2 million and~~ a ~~loss~~Recurring ~~on extinguishment of debt and related derivative liability was recognized for approximately $1.0 million. The remaining balance of the convertible debenture at September 30, 2020 was $300,000.~~Basis

The following table sets forth by level within the fair value ofhierarchy the ~~embedded~~Company’s ~~conversion feature~~derivative ~~was~~financial ~~determined~~instruments that ~~utilizing~~were aaccounted ~~Geometric~~for ~~Brownian~~at ~~Motion~~fair ~~Stock~~value ~~Path~~on ~~Based~~a ~~Monte~~recurring ~~Carlo~~basis ~~Simulation~~as ~~that~~of ~~utilized~~September ~~the~~30, ~~following key~~2022, ~~assumptions~~and 2021:

	Conversions for the twelve months ended September 30, 2020			September 30, 2020
	Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs		Total Carrying
Stock Price		$0.006 – $0.034			$0.006
Description	(Level 1)			(Level 2)			(Level 3)		Value as of
Fixed Exercise Price		0.050			$0.05
Derivative Financial Instrument at 9-30-21	$	—		$	(1,201,656	)	$	—	$	(1,201,656	)
Volatility		77 - 284	%		122	%
Derivative Financial Instrument at 9-30-22	$	—		$	(959,222	)	$	—	$	(959,222	)
Term (Years)		0.01 - 0.62			0.17
Risk Free Rate		0.08 – 1.62	%		.10	%

InThe change ~~addition~~in toderivative ~~the~~financial ~~fixed~~instruments ~~exercise~~for ~~price noted above,~~ the ~~model~~twelve ~~incorporates~~months ~~the~~ended ~~variable~~September ~~conversion~~30, ~~price~~2022 ~~which~~and 2021 is ~~simulated~~ as ~~80% of the lowest trading price within the ten consecutive days preceding presumed conversion.~~follows:

NOTE 8 – NOTES PAYABLE

September 30, 2020 balance	$	(1,070,551	)
Derivative instruments converted/extinguished		46,261
Change in fair value		(177,366	)
September 30, 2021 balance		(1,201,656	)
Derivative instruments converted/extinguished		—
Change in fair value		242,434
September 30, 2022 balance	$	(959,222	)

~~Schedule of notes payable~~37

	September 30, 2021		September 30, 2020
PPP Loan Payable	$	—	$	100,300
Insurance Note Payable		—		20,527
Total	$	—	$	120,827

Non-recurring fair value assessments include impaired oil and natural gas property assessments and stock-based compensation. During the years ended September 30, 2022 and 2021, the Company recorded an impairment charge of approximately $6.9 million and $0.4 million, respectively and approximately $32,000 and $97,000 of stock-based compensation expense, respectively.

~~PPP~~NOTE 9 ~~Loan~~ – COMMON STOCK/PAID IN CAPITAL

~~On April 16, 2020, the Company entered~~Year ~~into~~Ended a promissory note evidencing an unsecured $100,300 loan under the Paycheck Protection Program (the “PPP Loan”). The Paycheck Protection Program was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration. The PPP Loan is being made through Zions Bancorporation, N.A. dba Amegy Bank. The PPP Loan is scheduled to mature on April 16, 2025 and has a 1.00% interest rate. No payments are due on the PPP Loan until October 16, 2021, although interest will continue to accrue during the deferment period. Beginning October 16, 2021, the Company will pay 43 equal monthly installments of principal and interest in the amount necessary to fully amortize the PPP Loan through the maturity date. Under the terms of the CARES Act, all or a portion of the PPP Loan may be forgiven. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs, mortgage interest, rent or utility costs. No assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part. At September 30, ~~2020~~ accrued interest of approximately $420 was included in accrued interest payable. In December 2020 the Small Business Administration (SBA) approved forgiveness of the Company’s PPP Loan plus accrued interest.2021

39 In October 2020, the Company issued approximately 17.5 million common shares with a fair value of approximately $0.1 million related to the extinguishment of the Delek Note. Such shares were reflected on the September 30, 2020 balance sheet as additional paid in capital – shares to be issued.

~~Note Payable~~ Warrants

~~From~~The ~~August~~warrants ~~2015~~related ~~through~~to ~~February~~Bridge ~~2016 the~~Financing ~~Company~~Notes ~~entered~~totaling ~~into promissory notes whereby it borrowed a total of $267~~12,~~000 from Dr. Ronald Bain~~465,001 ~~its~~were ~~former~~extended ~~president~~during ~~and chief~~the ~~operating~~year ~~officer,~~ended ~~and~~September ~~his affiliate ConRon Consulting~~30, ~~Inc.~~2021 ~~These~~to ~~notes~~mature ~~are~~on April ~~not convertible~~30, ~~due~~2022 ~~on demand~~ and ~~bear interest~~ at ~~the~~maturity ~~rate~~during ~~of 5% per annum. In August 2020~~ the ~~principal~~year ~~was~~ended ~~paid~~September in30, ~~full~~2022 ~~and~~were ~~interest~~extended ofagain ~~approximately~~to ~~$67,000~~mature ~~was~~on ~~forgiven~~April ~~by the noteholder~~2024.

~~Insurance~~The ~~Note~~following ~~Payable~~table summarizes the Company’s warrant activity during the twelve months ended September 30, 2022 and 2021:

In November 2019, the Company purchased an insurance policy for approximately $241,000 and financed $220,629 of the premium by executing a note payable at an interest rate of 5.6%. The balance of the note payable as of September 30, 2020, is approximately $21,000 and is included in the Notes Payable balance in the condensed balance sheet.

Warrants	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In years)
Outstanding at September 30, 2020		78,005,281	$	0.04		2.75
Granted		—		—		—
Exercised		—		—		—
Expired		2,027,780	$	0.15
Outstanding at September 30, 2021		75,977,500	$	0.04		1.96
Granted		—		—		—
Exercised		—		—		—
Expired		11,312,500		0.09
Outstanding at September 30, 2022		64,665,000	$	0.03		1.64
Exercisable at September 30, 2022		64,665,000	$	0.03		1.64

~~NOTE~~A 9summary –of ~~Fair~~all ~~Value~~outstanding ~~Measurement~~warrants at September 30, 2022:

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories:

Date Issued	Exercise Price		Number Outstanding		Remaining Contractual Life (Years)
Various 2016	$	0.03		11,541,667		1.56
Various 2018	$	0.10		923,333		1.56
October 2017	$	0.10		1,100,000		0.04
December 2017	$	0.10		1,100,000		0.21
June 2019	$	0.04		50,000,000		1.73
		TOTAL		64,665,000

Level 1:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. GulfSlope considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:	Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that GulfSlope values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivative financial instruments as well as long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date.
Level 3:	Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity).

NOTE 10 – STOCK-BASED COMPENSATION

AsStock-based compensation ~~required~~cost byis ~~ASC~~measured ~~820-10,~~at ~~financial~~the ~~assets and~~grant ~~liabilities~~date, ~~are classified~~ based on the ~~lowest~~estimated ~~level~~fair value of ~~input~~the ~~that~~award using the Black Scholes option pricing model, and is ~~significant~~recognized toover the ~~fair~~vesting ~~value measurement~~period. The Company’s recognized approximately $32,000 and $97,000 in stock-based ~~assessment~~compensation ofexpense for the ~~significance~~years ended September 30, 2022, and 2021, respectively. None of athese ~~particular~~costs ~~input~~were capitalized to ~~the~~unproved properties ~~fair~~for ~~value~~the ~~measurement~~years ~~requires~~ended ~~judgment~~September 30, 2022 and ~~may~~2021, ~~affect~~respectively. During the ~~valuation~~years ended September 30, 2022, and 2021, nil and 41.5 million options were granted at an exercise price of ~~the~~$0.004 ~~fair~~with ~~value~~a vesting schedule of ~~assets~~50% ~~and~~six ~~liabilities~~months and ~~their~~50% ~~placement~~one year ~~within~~after ~~the~~grant. The fair value ~~hierarchy~~of ~~levels~~the options computed using Black Scholes was approximately $129,000.

~~Fair~~The following ~~Value~~table onsummarizes athe ~~Recurring~~Company’s ~~Basis~~stock option activity during the year ended September 30, 2022:

The following table sets forth by level within the fair value hierarchy the Company’s derivative financial instruments that were accounted for at fair value on a recurring basis as of September 30, 2021 and 2020:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In years)
Outstanding at September 30, 2021		146,000,000	$	0.0444		3.8
Vested and expected to vest		146,000,000	$	0.0444		3.8
Exercisable at September 30, 2022		146,000,000	$	0.0444		2.8

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs		Total Carrying
Description	(Level 1)		(Level 2)			(Level 3)		Value as of
Derivative Financial Instrument at 9-30-20	$	—	$	(1,070,551	)	$	—	$	(1,070,551	)
Derivative Financial Instrument at 9-30-21	$	—	$	(1,201,656	)	$	—	$	(1,201,656	)

As of September 30, 2022, there was no unrecognized stock-based compensation expense.

~~The~~NOTE ~~change~~11 in– ~~derivative~~COMMITMENTS ~~financial~~AND ~~instruments for the twelve months ended September 30, 2021 and 2020 is as follows:~~CONTINGENCIES

September 30, 2019 balance	$	(3,534,456	)
Issuance of derivative financial instruments		(880,462	)
Derivative instruments converted/extinguished		707,894
Change in fair value		2,636,473
September 30, 2020 balance		(1,070,551	)
Derivative instruments converted/extinguished		46,261
Change in fair value		(177,366	)
September 30, 2021 balance	$	(1,201,656	)

From time to time, the Company may become involved in litigation relating to claims arising out of its operations in the normal course of business. No legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve the Company.

~~Non-recurring~~In July ~~fair~~2018, ~~value~~the ~~assessments~~Company ~~include impaired~~entered ~~oil~~into ~~and~~a ~~natural~~39 ~~gas~~month ~~property~~lease ~~assessments~~for ~~and~~approximately ~~stock-based~~5,000 ~~compensation.~~square ~~During~~feet ~~the~~of ~~year ended~~office ~~September~~space ~~30,~~in ~~2021, the~~4 ~~Company~~Houston ~~recorded~~Center anin downtown ~~impairment~~Houston. ~~charge~~Annual ofbase rent was approximately $~~0.4~~94,000 ~~million~~for ~~and~~the first 18 months, increasing to approximately $97,000 ofand $99,000 ~~stock-based~~respectively ~~compensation~~during ~~expense. During~~the remaining term of the ~~year~~lease. The lease term ended on September 30, ~~2020~~2021, and the Company ~~recorded~~entered into ana ~~impairment~~twelve-month ~~charge~~lease ofthat ~~approximately~~could ~~$2.4~~be ~~million~~terminated ~~and~~with ~~stock-based compensation~~at ~~expense~~least of30 ~~approximately~~days $1prior written notice.0 ~~million,~~The ~~approximately~~lease ~~$0.5~~was ~~million~~terminated ofin ~~which~~August 2022 ~~was~~and ~~capitalized~~the tocompany ~~oil~~made alternative arrangements and ~~gas~~entered ~~properties~~ into a new month to month lease.

40 The Company reached an agreement in August 2018 for the settlement of approximately $1 million in debt owed to a third party. The vendor was paid $150,000 in cash, future cash payments of $7,500 and 10 million shares of GulfSlope common stock. The agreement contains a provision that upon the sale of the common stock if the original debt is not fully satisfied, full payment will be made, under a mutually agreed payment plan. If the stock is sold for a gain any surplus in excess of $1.3 million shall be a credit against future purchases from the vendor. The agreement was determined to meet the definition of a derivative in accordance with ASC 815. On September 30, 2022 and 2021, there is a fair value liability of approximately $784,000 and $721,000, respectively, which is included within Derivative Financial Instruments on the condensed balance sheet.

~~NOTE 10 – COMMON STOCK/PAID IN CAPITAL~~ 38

~~Year~~NOTE 12 ~~Ended~~– ~~September~~SUBSEQUENT ~~30, 2021~~EVENTS

AsOn October ~~discussed~~10, in2022, ~~Note~~GulfSlope 7Energy, inInc. ~~October~~entered ~~2020,~~into a Securities Purchase Agreement with one or more buyers. Under the terms of the Securities Purchase Agreement, the Company ~~issued~~will ~~approximately 17.5 million common~~issue ~~shares~~and ~~with~~sell ato ~~fair~~Buyers ~~value~~up to an aggregate of ~~approximately~~$650,000 of convertible promissory notes which shall be convertible into shares of the Company’s common stock, par value $0.1001 ~~million related to~~per share (the ~~extinguishment~~“Common Stock”), of ~~the~~which ~~Delek~~$55,000 ~~Note.~~shall ~~Such~~be ~~shares~~purchased ~~were~~upon ~~reflected~~the onsigning of the ~~September~~SPA 30(the “First Closing”), ~~2020~~with ~~balance~~additional ~~sheet~~tranches asof ~~additional~~financing ~~paid~~subject to further agreement by and inbetween ~~capital~~the –Buyer ~~shares~~and tothe beCompany. ~~issued~~The SPA contains customary representations, warranties and agreements by the Company and customary conditions to closing.

~~Year~~ITEM 9. ~~Ended~~CHANGES ~~September~~IN ~~30,~~AND ~~2020~~DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~As discussed in Note 7, the Company issued approximately 120 million common shares with a fair value of approximately $2~~None.2 million upon partial conversions of the notes and related accrued interest during the year ended September 30, 2020. The common shares were valued based upon the closing common share prices on the respective conversion dates.

~~In addition, during the year ended September~~ITEM ~~30, 2020, the Company issued 38,423,221 common shares with a fair value of $1,536,929 to extinguish an accrued expense that totaled $1,613,775~~9A. ~~The~~CONTROLS ~~common~~AND ~~shares were valued based upon the closing common share price on the date of settlement resulting in a gain on the extinguishment of the obligation of approximately $77,000.~~ PROCEDURES

~~As discussed in Note 7, in 2019 the Company~~Evaluation ~~issued warrants to purchase an aggregate~~ of 50Disclosure ~~million~~Controls ~~shares~~and ~~of common stock at an exercise price of $0.02 per share. Such warrants expire in approximately 2.7 years.~~Procedures

~~NOTE~~We maintain 11disclosure –controls ~~STOCK~~and procedures, as such term is defined in Rules 13a-~~BASED~~15(e) ~~COMPENSATION~~and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are properly recorded, processed, summarized and reported within the time periods required by the Commission’s rules and forms.

~~Stock-based compensation cost is measured~~We atcarried ~~the~~out ~~grant~~an ~~date~~evaluation, ~~based~~under on the ~~estimated~~supervision ~~fair~~and ~~value~~with of the ~~award~~participation ~~using~~of ~~the~~our ~~Black~~management, ~~Scholes~~including ~~option~~our ~~pricing~~Chief ~~model,~~Executive Officer and isour ~~recognized over~~Chief ~~the~~Financial ~~vesting period. The Company recognized approximately $97~~Officer,~~000~~ ~~and~~of ~~$968,000~~the ineffectiveness ~~stock-based~~of ~~compensation expense for~~ the ~~years~~ ~~ended~~design ~~September 30, 2021~~ and ~~2020,~~operation ~~respectively. None~~ of these ~~costs~~disclosure ~~were~~controls ~~capitalized~~and toprocedures, as ~~unproved~~such ~~properties~~term ~~for~~is ~~the~~defined ~~year ended~~in ~~September~~Exchange ~~30,~~Act ~~2021~~Rule 13a-15(e) and ~~approximately $498~~15d-15(e),~~000~~ ~~were~~as ~~capitalized~~of ~~to unproved properties for year ended~~ September 30, ~~2020, with the remainder recorded as general and administrative expenses~~2022. ~~During~~Based ~~the~~on ~~year~~this ~~ended~~evaluation, ~~September~~our ~~30,~~Chief ~~2021,~~Executive ~~41.5~~Officer ~~million~~and ~~options~~Chief ~~were~~Financial ~~granted~~Officer atconcluded anthat ~~exercise~~our ~~price~~disclosure ofcontrols ~~$0.004~~and ~~with~~procedures awere ~~vesting~~effective ~~schedule~~as of ~~50% six months and 50% one~~ ~~year~~September ~~after~~30, ~~grant.~~2022, ~~The~~the ~~fair~~end ~~value~~ of the ~~options~~period ~~computed~~covered ~~using~~by ~~Black~~this ~~Scholes~~Annual ~~was~~Report ~~approximately~~on ~~$129,000~~Form 10-K.

~~During the year ended September 30, 2020,~~Management’s ~~upon~~Annual ~~the~~Report ~~passing~~on ofInternal aControl ~~member~~Over ofFinancial the management team, the Company modified the vesting terms of a stock option grant previously made to this individual which vested the instrument immediately. The option was for three million shares and was originally granted in June 2018. The Company recorded approximately $8,000 in additional compensation expense related to this modification. Reporting

~~The~~Our management ~~following~~is ~~table~~responsible ~~summarizes~~for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the ~~Company’s~~Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance ~~stock~~regarding ~~option~~the ~~activity~~reliability ~~during~~of financial reporting and the ~~year~~preparation ~~ended~~of ~~September~~financial 30statements for external purposes in accordance with accounting principles generally accepted in the United States. All control systems contain inherent limitations, ~~2021:~~no matter how well designed. As a result, our management acknowledges that its internal controls over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In years)
Outstanding at September 30, 2020		104,500,000	$	0.0604		4.5
Granted		41,500,000		0.0040		5.0
Exercised		—		—
Cancelled		—		—
Outstanding at September 30, 2021		146,000,000	$	0.0444		3.8
Vested and expected to vest		146,000,000	$	0.0444		3.8
Exercisable at September 30, 2021		125,500,000	$	0.0510		3.7

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our internal control over financial reporting as of September 30, 2022. In making this assessment, management used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013 Framework). Based on this evaluation, our management concluded that, as of September 30, 2022, our internal control over financial reporting was effective.

AsThis Annual Report does not include an attestation report of ~~September~~our ~~30,~~registered ~~2021,~~public ~~there~~accounting ~~was~~firm ~~approximately~~regarding our internal control over ~~$32,000~~financial ofreporting ~~unrecognized~~due ~~stock-based~~to ~~compensation~~an ~~expense~~exemption established by the SEC for smaller reporting companies.

Changes ~~NOTE~~in 12Internal –Control ~~COMMITMENTS~~Over ~~AND~~Financial ~~CONTINGENCIES~~Reporting

~~From~~There were ~~time~~no tochanges ~~time,~~in ~~the~~our ~~Company~~internal ~~may~~controls ~~become involved~~over financial reporting identified in ~~litigation~~management’s ~~relating~~evaluation pursuant to ~~claims~~Rules ~~arising~~13a-15(d) ~~out~~or 15d-15(d) of ~~its~~the ~~operations~~Exchange inAct during the ~~normal~~fourth ~~course~~quarter of ~~business.~~2022 Nothat ~~legal~~materially ~~proceedings~~affected, ~~government~~ ~~actions, administrative actions, investigations~~ or ~~claims~~ are ~~currently~~reasonably likely ~~pending~~to ~~against~~materially usaffect, orour ~~involve~~internal ~~the~~control ~~Company~~over financial reporting.

~~In July 2018, the Company entered into~~ITEM ~~a 39 month lease for approximately 5,000 square feet of office space in 4 Houston Center in downtown Houston~~9B. ~~Annual~~OTHER base rent is approximately $94,000 for the first 18 months, increasing to approximately $97,000 and $99,000 respectively during the remaining term of the lease. The lease term ended on September 30, 2021 and the Company entered into a twelve month lease that can be terminated with at least 30 days prior written notice. See Note 13 – LeasesINFORMATION

41 Not Applicable.

The Company reached an agreement with a vendor in August 2018 for the settlement of approximately $1 million in debt. The vendor was paid $150,000 in cash, future cash payments of $7,500 and 10 million shares of GulfSlope common stock. The agreement contains a provision that upon the sale of the common stock if the original debt is not fully satisfied, full payment will be made, under a mutually agreed payment plan. If the stock is sold for a gain any surplus in excess of $1.3 million shall be a credit against future purchases from the vendor. The agreement was determined to meet the definition of a derivative in accordance with ASC 815. At September 30, 2021 and 2020, there is a fair value liability of approximately $721,000 and $786,000, respectively, which is included within Derivative Financial Instruments on the condensed balance sheet.39

~~NOTE 13 – LEASES~~PART III

~~Effective October 1, 2019, we adopted ASU~~ITEM No10. ~~2016-02~~DIRECTORS, ~~Leases~~EXECUTIVE ~~(Topic 842)~~OFFICERS, ~~and~~AND ~~all~~CORPORATE related amendments (“ASC 842”) using the modified retrospective approach. In July 2018, the FASB approved an optional transition method that removed the requirement to restate prior period financial statements upon adoption of the standard with a cumulative-effect adjustment to retained earnings in the period of adoption and we elected to apply this transition method. As a result, the comparative period information has not been restated and continues to be reported under the accounting standards in effect for the period presented. The adoption of ASC 842 had no impact to our previously reported results of operations or cash flows. GOVERNANCE

~~The following table depicts the cumulative~~Identification ~~effect~~ of ~~the~~Directors ~~changes~~and ~~made~~Executive ~~to our financial statements for the adoption of ASC 842 effective on October 1, 2019:~~Officers

	Balance at September 30, 2019			Impact of Adoption of ASC 842			Adjusted Balance at October 1, 2019
Assets:
Operating lease right of use assets	$	—		$	104,363		$	104,363
Current Liabilities:
Other (Deferred Credit Office Lease)	$	42,746		$	(42,746	)		—
Current portion of operating lease liabilities	$	—		$	74,114		$	74,114
Noncurrent Liabilities:
Operating lease liabilities	$	—		$	56,565		$	56,565
Equity:
Accumulated Deficit	$	(55,582,010	)	$	16,430		$	(55,565,580	)

Our executive officers and directors and their respective ages, positions and biographical information are set forth below.

The adoption of ASC 842 resulted in the recognition of operating lease liabilities totaling $130,679, based upon the present value of the remaining minimum rental payments using discount rates as of the adoption date. In addition, we recorded corresponding right-of-use assets totaling $104,363 based upon the operating lease liabilities adjusted for deferred rent and lease incentives. In addition, we recorded a $16,430 cumulative effect of initially adopting ASC 842 as an adjustment to the opening balance of accumulated deficit.

Name	Age	Title
John N. Seitz	70	Chairman, Chief Executive Officer
John H. Malanga	55	Chief Financial Officer
Charles G. Hughes	65	Vice President, Land
Richard S. Langdon	72	Director
Paul L. Morris	80	Director

AtJohn N. ~~September~~Seitz. ~~30,~~Mr. ~~2020~~Seitz has served as the ~~right-~~Company’s chief executive officer and chairman of~~-use~~ the board and director ~~assets~~since ~~total~~May ~~$54~~31,~~768~~ 2013 and served as a consultant to the ~~operating~~Company ~~lease~~from ~~liabilities~~March ~~total~~2013 ~~$62~~through May 2013. Prior to joining the Company,~~074,~~ ~~and~~Mr. Seitz held positions of increasing responsibility at ~~September~~Anadarko 30Petroleum Corporation (NYSE: APC), ~~2021~~serving most recently as a director and as president and chief executive officer until 2003. Mr. Seitz serves on the ~~right~~board of ~~use~~directors ~~assets~~of ~~and~~Sheridan ~~operating~~Production Partners ~~lease~~(private ~~liabilities~~oil ~~were~~& ~~zero~~gas producer, ~~respectively~~U.S. ~~The~~onshore). ~~original~~Mr. ~~lease~~Seitz ~~term~~is ~~ended~~a onCertified ~~September~~Professional 30Geological Scientist from the American Institute of Professional Geologists and a licensed professional geoscientist with the State of Texas. Mr. Seitz has also served as a trustee for the American Geological Institute Foundation. In 2000, ~~2021~~the Houston Geological Society honored Mr. Seitz as a “Legend in Wildcatting,” and he is a member of the ~~new~~All ~~twelve~~American ~~month~~Wildcatters. ~~lease~~Mr. ~~can~~Seitz holds a Bachelor of Science degree bein ~~terminated~~Geology ~~with~~from atthe ~~least~~University ~~thirty~~of ~~days~~Pittsburgh, ~~prior~~a ~~written~~Master ~~notice~~of Science degree in Geology from Rensselaer Polytechnic Institute and has completed the Advanced Management Program at the Wharton School.

~~NOTE~~John H. 14Malanga. –Mr. ~~SUBSEQUENT~~Malanga ~~EVENTS~~has served as chief financial officer since July 2014 and is responsible for leading the financial function of the organization, overseeing strategic planning and analysis, accounting and reporting, treasury, tax, audit and risk management. From 2005 to 2014, Mr. Malanga worked as a senior investment banker with the energy firms of Weisser, Johnson & Co. and Sanders Morris Harris Inc. Mr. Malanga began his investment banking career with Jefferies & Co. Over his career, he has participated in capital markets, mergers and acquisitions, and financial advisory transactions with particular emphasis on providing strategic and financial advice to emerging growth companies. Mr. Malanga holds a Bachelor of Science in Economics from Texas A&M University and a Master in Business Administration with a concentration in finance from Rice University.

~~None~~ Charles G. Hughes. Mr. Hughes has served as vice president land since April 2014. Mr. Hughes’ executive responsibilities include all land and industry partner related matters. He formerly served as general manager – land and business development for Marubeni Oil & Gas (USA), Inc. from 2007 to 2014. From 1980 to 2007, Mr. Hughes served in roles of increasing responsibility both onshore and offshore in the Gulf of Mexico at Anadarko Petroleum Corporation. Mr. Hughes is a member and former Chairman of the OCS Advisory Board, a member of the Association of Professional Landmen, the Houston Association of Professional Landmen and the Professional Landmen’s Association of New Orleans. Mr. Hughes received his Bachelor of Business Administration in Petroleum Land Management from the University of Texas.

~~ITEM~~Richard S. 9Langdon. ~~CHANGES~~Mr. INLangdon ~~AND~~has ~~DISAGREEMENTS~~served ~~WITH~~as ~~ACCOUNTANTS~~an ONindependent ~~ACCOUNTING~~director ~~AND~~of ~~FINANCIAL~~the ~~DISCLOSURE~~Company since March 2014. Mr. Langdon is currently the chief executive officer, president and chief financial officer of Altamont Energy, Inc., a privately held exploration and production company formed in April 2018. Mr. Langdon also serves as an independent member of the board of managers of Evolve Transition Infrastructure LP and is a member of its Audit and Conflicts Committees. Mr. Langdon served as the president, chief executive officer and outside director of Badlands Energy, Inc. and its predecessor entity, Gasco Energy, Inc. from May 2013, and Debtor-in Possession from August 2017 to October 2018. Prior to assuming the President and CEO role, Mr. Langdon had served as a Gasco Energy Inc. independent board member from March 2003 to May 2013. Mr. Langdon was the president and chief executive officer of KMD Operating Company, LLC, and its predecessor entity, Matris Exploration Company LP, both privately held exploration and production companies, from July 2004 through December 2015. Mr. Langdon also served as president and chief executive officer of Sigma Energy Ventures, LLC, a privately held production company, from November 2007 until November 2013. From 1997 until 2002, Mr. Langdon served as executive vice president and chief financial officer of EEX Corporation, a publicly traded exploration and production company that merged with Newfield Exploration Company in 2002. Prior to that, he held various positions with the Pennzoil Companies from 1991 to 1996, including executive vice president - International Marketing - Pennzoil Products Company; senior vice president - Business Development - Pennzoil Company and senior vice president - Commercial & Control - Pennzoil Exploration & Production Company. Mr. Langdon graduated from the University of Texas at Austin with a Bachelor of Science degree in Mechanical Engineering in 1972 and a Master of Business Administration in 1974.

~~None~~Paul L. Morris. Mr. Morris has served as a director of the Company since March 2014. Mr. Morris founded Elk River Resources, LLC in August 2013 to explore and develop oil and gas potential in the oil-producing regions of the southwest United States. Mr. Morris served as chairman and chief executive officer of Elk River Resources since inception to November 2020. Prior to Elk River Resources, Mr. Morris served as president and chief executive officer from 1988 to September 2013 of Wagner & Brown, Ltd., an independent oil and gas company headquartered in Midland, Texas. With Wagner & Brown, Mr. Morris oversaw all company operations, including exploration and production activities, in eight states as well as in France, England and Australia. Mr. Morris also oversaw affiliates involved in natural gas gathering and marketing, crude oil purchasing and reselling, pipeline development, construction and operation, and compressed natural gas (CNG) design, fabrication and operations. Mr. Morris served as president of Banner Energy from 1981 until 1988. Mr. Morris graduated from the University of Cincinnati with a Bachelor of Science degree in Mechanical Engineering in 1964. Mr. Morris has also completed the Executive Management Program in the College of Business Administration of Penn State University.

42 40

~~ITEM~~Board Committees ~~9A.~~and ~~CONTROLS AND PROCEDURES~~Meetings

~~Evaluation~~The Board currently consists of ~~Disclosure~~three ~~Controls~~directors. Vacancies on the Board may be filled by a vote of a majority of the remaining directors, although less than a quorum is present. A director elected by the Board to fill a vacancy shall serve for the remainder of the term of that director until the director’s successor is elected and qualified. This includes vacancies created by ~~Procedures~~an increase in the number of directors. The Board has three standing committees: the Audit and Compliance Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee.

~~We maintain disclosure controls and procedures,~~The asCompany ~~such~~has ~~term~~no isformal ~~defined~~policy inwith ~~Rules~~regard ~~13a-15(e)~~to ~~and~~Board ~~15d-15(e)~~members’ ofattendance ~~the~~at ~~Securities~~annual ~~Exchange~~meetings ~~Act~~ of ~~1934,~~security asholders. ~~amended (the “Exchange~~During ~~Act”), that are designed to ensure that information required to be disclosed in~~ the ~~reports~~fiscal ~~filed~~year orended ~~submitted~~September ~~under the Exchange Act~~30, ~~is recorded~~2022, ~~processed, summarized and reported within~~ the ~~time~~Board ~~periods~~held ~~specified~~four byquarterly ~~the~~meetings, ~~Commission’s~~two ~~rules and~~special ~~forms.~~meetings ~~Disclosure controls~~ and ~~procedures~~a ~~include~~shareholder ~~controls~~meeting. All ~~and~~board ~~procedures~~members ~~designed~~were ~~to ensure that information required to be disclosed~~ in ~~our~~attendance ~~reports~~for ~~filed~~each ~~or submitted under the Exchange Act are properly recorded, processed, summarized and reported within the time periods required by the Commission’s rules and forms~~meeting.

~~We carried out an evaluation, under the~~Compliance ~~supervision and~~ with ~~the~~Section participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of these disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-1516(ea) ~~and 15d-15(e), as~~ of ~~September 30, 2021. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2021,~~ the ~~end~~Exchange ~~of the period covered by this Annual Report on Form 10-K.~~Act

~~Management’s~~Section 16(a) ~~Annual~~of ~~Report~~the Exchange Act requires our directors and executive officers, and persons who beneficially own more than 10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Directors, executive officers and more than 10% stockholders are required by SEC regulations to provide us with copies of all Section 16(a) forms they file. To our knowledge, based solely on ~~Internal~~a ~~Control~~review ~~Over~~of the copies of the reports furnished to us, all Section 16(a) filing ~~Financial~~requirements ~~Reporting~~applicable to our directors, officers and more than 10% beneficial owners were complied with during the year ended September 30, 2022.

~~Our management is responsible for establishing~~Code and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. All control systems contain inherent limitations, no matter how well designed. As a result, our management acknowledges that its internal controls over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.Ethics

~~Our~~We have ~~management,~~adopted ~~with~~a written code of ethics and whistleblower policy (the ~~participation~~ “Code of Ethics”) that applies to our ~~Chief~~principal ~~Executive~~executive ~~Officer~~officer, principal financial officer, principal accounting officer or controller, and ~~our~~persons ~~Chief~~performing similar ~~Financial~~functions. ~~Officer~~We ~~evaluated~~believe that the ~~effectiveness~~Code of ~~our~~Ethics ~~internal~~is ~~control~~reasonably ~~over~~designed ~~financial~~to deter wrongdoing and promote honest and ethical ~~reporting~~conduct; asprovide offull, ~~September~~fair, 30accurate, ~~2021.~~timely Inand ~~making~~understandable ~~this~~disclosure ~~assessment,~~in ~~management~~public ~~used~~reports; ~~the~~comply ~~criteria~~with ~~established~~applicable bylaws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the ~~Committee~~code. A copy of ~~Sponsoring Organizations~~our Code of ~~the~~Ethics was ~~Treadway~~previously ~~Commission~~filed ~~(“COSO”)~~as inan ~~Internal~~exhibit ~~Control~~to –our ~~Integrated~~Annual ~~Framework~~Report ~~(2013~~on ~~Framework)~~Form 10-K for the fiscal year ended 2012 and can be found at www.sec.gov. ~~Based~~Our onCode ~~this~~of ~~evaluation,~~Ethics can also be found on our ~~management~~website ~~concluded~~at ~~that,~~www.gulfslope.com. asA copy of ~~September~~the 30Code of Ethics will be provided to any person, ~~2021~~without charge, ~~our~~upon ~~internal~~request ~~control~~to ~~over~~the ~~financial~~Secretary ~~reporting was effective~~at 1000 Main St., Suite 2300, Houston, Texas 77002.

~~This Annual Report does not include an~~Involvement ~~attestation~~in ~~report~~Certain ofLegal ~~our registered public accounting firm regarding our internal control over financial reporting due to an exemption established by the SEC for smaller reporting companies.~~Proceedings

~~Changes~~There are currently no material pending legal proceedings to which the Company is a party or of which any of its property is the subject, in ~~Internal~~which ~~Control~~any ~~Over~~of ~~Financial~~the ~~Reporting~~above referenced directors or officers is a party adverse to the Company or has a material interest adverse to the Company. Furthermore, during the past ten years, none of the Company’s officers or directors described above were involved in any legal proceedings that are material to an evaluation of the ability or integrity of such directors and officers.

~~There were no changes in our internal controls~~ITEM ~~over~~11. ~~financial~~EXECUTIVE reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the fourth quarter of 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.COMPENSATION

~~ITEM~~Compensation to ~~9B.~~Officers ~~OTHER~~of ~~INFORMATION~~the Company

~~Not~~The following ~~Applicable.~~ tables contain compensation data for our named executive officers for the fiscal years ended September 30, 2022, and 2021:

Summary Compensation Table
Name and Principal Position	Year		Salary		Bonus		Stock Awards		Stock Option Awards		All Other Compensation		Total
John N. Seitz⁽¹⁾		2022	$	—	$	—	$	—	$	—	$	—	$	—
CEO		2021		—		—		—		—		—		—

John H. Malanga		2022		126,160		—		—		—		—		126,160
CFO		2021		150,000		—		—		34,100		—		184,100

~~PART~~(1) ~~III~~Mr. Seitz is not currently receiving or accruing any compensation as of the date of this Annual Report.

~~ITEM~~Employment and ~~10.~~Consulting ~~DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE~~Arrangements

~~Identification of Directors and Executive~~Not ~~Officers~~applicable.

~~Our executive officers and directors and their respective ages, positions and biographical information are set forth below.~~41

Name	Age	Title
John N. Seitz	69	Chairman, Chief Executive Officer
John H. Malanga	54	Chief Financial Officer
Charles G. Hughes	64	Vice President, Land
Richard S. Langdon	71	Director
Paul L. Morris	79	Director

Compensation Policies and Practices as they Relate to the Company’s Risk Management

~~John N. Seitz.~~Not Mrapplicable. Seitz has served as the Company’s chief executive officer and chairman of the board and director since May 31, 2013, and served as a consultant to the Company from March 2013 through May 2013. Prior to joining the Company, Mr. Seitz held positions of increasing responsibility at Anadarko Petroleum Corporation (NYSE: APC), serving most recently as a director and as president and chief executive officer until 2003. Mr. Seitz serves on the board of directors of ION Geophysical Corporation (NYSE: IO), a leading technology focused seismic solutions company. Mr. Seitz is a Certified Professional Geological Scientist from the American Institute of Professional Geologists and a licensed professional geoscientist with the State of Texas. Mr. Seitz has also served as a trustee for the American Geological Institute Foundation. In 2000, the Houston Geological Society honored Mr. Seitz as a “Legend in Wildcatting,” and he is a member of the All American Wildcatters. Mr. Seitz holds a Bachelor of Science degree in Geology from the University of Pittsburgh, a Master of Science degree in Geology from Rensselaer Polytechnic Institute, and has completed the Advanced Management Program at the Wharton School.

~~John H. Malanga.~~Director Mr. Malanga has served as chief financial officer since July 2014 and is responsible for leading the financial function of the organization, overseeing strategic planning and analysis, accounting and reporting, treasury, tax, audit and risk management. From 2005 to 2014, Mr. Malanga worked as a senior investment banker with the energy firms of Weisser, Johnson & Co. and Sanders Morris Harris Inc. Mr. Malanga began his investment banking career with Jefferies & Co. Over his career, he has participated in capital markets, mergers and acquisitions, and financial advisory transactions with particular emphasis on providing strategic and financial advice to emerging growth companies. Mr. Malanga holds a Bachelor of Science in Economics from Texas A&M University and a Master in Business Administration with a concentration in finance from Rice University.Compensation

~~Charles G. Hughes.~~In ~~Mr.~~January ~~Hughes~~of ~~has~~2017, ~~served~~the asCompany’s ~~vice~~nonemployee ~~president~~directors ~~land~~were ~~since~~each ~~April~~awarded ~~2014.~~2,500,000 ~~Mr.~~stock ~~Hughes’~~options ~~executive~~for ~~responsibilities~~the ~~include~~Company’s stock ~~all~~at ~~land~~an ~~and industry~~exercise ~~partner~~price ~~related~~of ~~matters~~$0.0278 Heper ~~formerly~~share, ~~served~~50% asvested ~~general~~in ~~manager~~January –2017 ~~land~~ and ~~business~~50% ~~development~~vested ~~for~~in

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