The financial report for the second quarter of 2025 (Q2 2025) shows a mixed performance for the company. Revenue increased by 10% compared to the same period last year, driven by growth in the oil and gas segment. However, net income decreased by 15% due to higher operating expenses and a decline in gross profit margin. The company’s cash and cash equivalents decreased by 20% to $1.6 million, primarily due to the payment of dividends and investments in working capital. The company’s debt increased by 10% to $5.5 million, primarily due to the issuance of convertible preferred stock. The company’s stock price decreased by 5% during the quarter, reflecting the decline in net income and concerns about the company’s ability to maintain its growth momentum.
Overview
Norris Industries, Inc. (the “Company”) is an oil and natural gas company that focuses on the acquisition, development, and exploration of crude oil and natural gas properties in Texas. As of March 1, 2024, the Company’s total net reserves were 29 Mbbl in oil and 150 MMcf in natural gas, down from the prior year due to well workover issues.
The Company’s long-term objective is to increase shareholder value by growing reserves, production, and cash flow. To achieve this, the Company plans to focus on existing fields, selectively acquire larger-reserve oil and gas properties, and implement Enhanced Oil Recovery (EOR) methods. The Company may also consider acquiring oilfield services companies and other non-oilfield companies to diversify its growth strategy.
However, the Company’s operations have been adversely impacted by the COVID-19 pandemic, the Russia-Ukraine conflict, and the Middle East tensions. These events have led to volatility in energy prices, supply chain disruptions, and increased costs, which have affected the Company’s financial condition and results of operations.
Our Business Strategy
The Company’s key business strategies include:
Our Competitive Strengths
The Company believes it has several competitive strengths, including:
Technologies
The Company focuses on core basic field EOR management practices and contracts outside experts to provide a better understanding of complex mineralogy in shale reservoirs. This technology helps the Company make more informed drilling decisions.
Sales Strategy
The Company’s sales strategy is to produce less when the sales price is lower and produce more when the sales price is higher, aiming to maintain the lowest production cost possible. The Company has established production agreements with BML, Lion Oil, and WTG Jameson for the sale of its crude oil and natural gas.
Operational Plans
The Company’s operational plans include:
Results of Operations
Comparison of the Three Months Ended August 31, 2024, with the Three Months Ended August 31, 2023:
Metric | Q3 2024 | Q3 2023 | Change |
---|---|---|---|
Revenues | $77,007 | $82,606 | -6.8% |
Operating Expenses | $160,381 | $174,936 | -8.3% |
Net Loss | $117,856 | $124,010 | -5.0% |
Comparison of the Six Months Ended August 31, 2024, with the Six Months Ended August 31, 2023:
Metric | H1 2024 | H1 2023 | Change |
---|---|---|---|
Revenues | $177,274 | $163,958 | +8.1% |
Operating Expenses | $395,781 | $406,875 | -2.7% |
Net Loss | $286,893 | $305,348 | -6.0% |
Liquidity and Capital Resources
As of August 31, 2024, the Company had $71,739 in cash and $400,000 in available credit on its existing line of credit with JBB, which has been extended to September 30, 2026. The Company will require additional financing to support its operations and acquisition program, and it does not have any committed sources of financing at this time. The Company’s majority shareholder has provided funding in the past and indicated a willingness to selectively review and determine additional funding for certain low-risk initiatives, but is not legally obligated to do so.
The Company’s ability to continue as a going concern is dependent on its ability to increase operating revenues or obtain funding from other investors or lenders. There is no assurance that the Company will be able to do so, and if it cannot, investors may suffer a loss in the value of their investment.