PRESIDIO PRODUCTION COMPANY 提交 10-Q 季報｜截至 2026 年 3 月 31 日

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

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

 

For the quarter ended March 31, 2026

 

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

 

For the transition period from
___ to ___

 

Commission file number: 001-43179

 

PRESIDIO PRODUCTION COMPANY

(Exact Name of Registrant as Specified
in Its Charter)

 

 Delaware   39-3528250
 (State or other jurisdiction of 
 incorporation or organization)   (I.R.S. Identification No.)
      
 500 W. 7th Street, Suite 1500, Fort Worth, Texas   76102
 (Address of principal executive offices)   (Zip Code)

 
 (800) 461-1604
 (Issuer’s telephone number)
 

 

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

 

 Title of each class   Trading Symbol(s)   Name of each exchange on which registered
 Class A common stock, par value $0.0001 per share   FTW   New York Stock Exchange 
 Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share   FTW WS   New York Stock Exchange
 

 

Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No ☒

 

As of May 15, 2026, 27,652,068 shares
of Class A common stock, $0.0001 par value per share, and 1,676,830 shares of Class B common stock, $0.0001 par value per share, were
issued and outstanding.

 

 

 

 
 

 

 

 

PRESIDIO PRODUCTION COMPANY

FORM 10-Q FOR THE QUARTER ENDED MARCH
31, 2026

TABLE OF CONTENTS

 

 
  
 Page

 
 Cautionary
 Statement Regarding Forward-Looking Statements
 ii

 
 Glossary of Oil and Natural
 Gas Terms
 iv

 
 Part I - Financial Information
 1

 
 Item 1.
 Financial
 Statements
 1

 
  
 Condensed Consolidated
 Balance Sheets (Unaudited)
 1

 
  
 Condensed Consolidated
 Statements of Operations (Unaudited)
 2

 
  
 Condensed Consolidated
 Statements of Redeemable Preferred Stock and Stockholders’/Members’ Equity (Deficit) (Unaudited)
 3

 
  
 Condensed Consolidated
 Statements of Cash Flows (Unaudited)
 4

 
  
 Notes to Unaudited
 Condensed Consolidated Financial Statements
 5

 
 Item 2.
 Management’s
 Discussion and Analysis of Financial Condition and Results of Operations
 38

 
 Item 3.
 Quantitative and Qualitative
 Disclosures About Market Risk
 48

 
 Item 4.
 Controls and Procedures
 51

 
  
  
  

 
 Part II - Other Information
 52

 
 Item 1.
 Legal Proceedings
 52

 
 Item 1A.
 Risk Factors
 52

 
 Item 2.
 Unregistered Sales
 of Equity Securities and Use of Proceeds
 52

 
 Item 3.
 Defaults Upon Senior
 Securities
 52

 
 Item 4.
 Mine Safety Disclosures
 52

 
 Item 5.
 Other Information
 52

 
 Item 6.
 Exhibits
 53

 
  
  
  

 
 Signatures
 55

 

 

 
i

 

 

 

CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS

 

Some of the information in
this Quarterly Report on Form 10-Q (this “Quarterly Report”) may contain “forward-looking statements.” All statements,
other than statements of historical fact included in this Quarterly Report regarding our strategy, future operations, financial position,
estimated revenues and losses, projected costs, our ability to make share repurchases, prospects, plans and objectives of management
are forward-looking statements. When used in this Quarterly Report, words such as “may,” “assume,” “forecast,”
“could,” “should,” “will,” “plan,” “believe,” “anticipate,” “intend,”
“estimate,” “expect,” “project,” “budget” and similar expressions are used to identify
forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements
are based on management’s current belief, based on currently available information, as to the outcome and timing of future events
at the time such statement was made. When considering forward-looking statements, you should keep in mind the risk factors and other
cautionary statements indicated in our proxy statement/prospectus contained in our Registration Statement on Form S-4 (File No. 333-290090),
originally filed by the Company with the Securities and Exchange Commission (“SEC”) on September 8, 2025, as subsequently
amended on January 28, 2026 and declared effective by the SEC on January 30, 2026 (the “Proxy Statement/Prospectus”), and
in this Quarterly Report. There are a number of important factors that could cause our actual results to differ materially from the results
contemplated by such forward-looking statements, which include, but are not limited to:

 

 
  
 ●
 oil, natural gas and natural gas liquids (“NGL”) prices;

 

 

 
  
 ●
 our ability to successfully
 execute our business strategy;

 

 

 
  
 ●
 the timing
 and amount of our future production of oil, natural gas and NGLs, including the declining rates
 of our oil and gas properties;

 

 

 
  
 ●
 the accuracy of our estimated
 proved reserves;

 

 

 
  
 ●
 our ability to achieve or maintain
 certain financial and operational metrics;

 

 

 
  
 ●
 our drilling prospects, inventories,
 projects and programs;

 

 

 
  
 ●
 the impact
 of actions taken by the OPEC and other allied countries (collectively known as “OPEC+”) as it pertains to the global
 supply and demand of, and prices for, oil, natural gas and NGLs;

 

 

 
  
 ●
 the impact
 of armed conflict, political instability or civil unrest in oil and gas producing regions, including instability in the Middle East
 and the conflict between Russia and Ukraine, and the related potential effects on laws and regulations, or the imposition of economic
 or trade sanctions;

 

 

 
  
 ●
 our ability
 to replace the reserves we produce through drilling and property acquisitions;

 

 

 
  
 ●
 our ability
 to execute our financial strategy, including successfully managing our leverage, liquidity and capital required for our development
 program;

 

 

 
  
 ●
 the progression and outcome
 of our pending legal matters;

 

 

 
  
 ●
 our ability to comply with
 environmental, health and safety laws, regulations and obligations;

 

 

 
  
 ●
 our ability to achieve superior
 price differentials;

 

 

 
  
 ●
 our ability to successfully
 deploy our hedging strategy;

 

 

 
ii

 

 

 

 
  
 ●
 our ability and the ability
 of our competition to comply with existing and new government regulations;

 

 

 
  
 ●
 our ability to obtain permits
 and governmental approvals;

 

 

 
  
 ●
 our marketing of oil, natural
 gas and NGLs;

 

 

 
  
 ●
 our ability to successfully
 identify, acquire and integrate leaseholds or businesses to replace our reserves;

 

 

 
  
 ●
 our costs of developing our
 properties;

 

 

 
  
 ●
 general
 global political and economic conditions, including changes in interest rates and associated Federal Reserve policies and the impact
 of inflation on our business;

 

 

 
  
 ●
 changes
 in tariffs, trade policy, trade barriers, price and exchange controls and other regulatory requirements;

 

 

 
  
 ●
 credit markets;

 

 

 
  
 ●
 uncertainty regarding our future
 operating results, including our ability to pay future dividends;

 

 

 
  
 ●
 our plans, objectives, expectations
 and intentions contained in this Quarterly Report; and

 

 

 
  
 ●
 the other risks described herein and in our other filings with the Securities and Exchange Commission.

 

 

Additional factors include
those described in our Proxy Statement/Prospectus, including under the captions Risk Factors, Management’s Discussion and Analysis
of Financial Condition and Results of Operations of Presidio Investment Holdings LLC, Unaudited Pro Forma Condensed Combined Financial
Information and Information About PIH, in our subsequent quarterly reports on Form 10-Q, including under the captions Risk Factors and
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in our subsequent filings with the SEC.
We caution you that these forward-looking statements are subject to all of the risks and uncertainties incident to the development, production,
gathering and sale of oil, natural gas and NGLs, most of which are difficult to predict and many of which are beyond our control. Reserve
engineering is a process of estimating underground accumulations of hydrocarbons that cannot be measured in an exact way. The accuracy
of any reserve estimates depends on the quality of available data, the interpretation of such data and price and cost assumptions made
by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that
were made previously. If significant, such revisions would change the schedule of any future production and development program. Accordingly,
reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

 

All forward-looking statements,
expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This
cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or
persons acting on our behalf may issue.

 

There may be other risks
and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on
our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance
on any forward-looking statements that we may make.

 

 
iii

 

 

 

GLOSSARY OF OIL AND NATURAL
GAS TERMS

 

The following are abbreviations
and definitions of certain terms which are commonly used in the oil and natural gas industry:

 

 
  
 ●
 “basis”
 means when referring to commodity pricing, the difference between the NYMEX WTI, for oil prices, and NYMEX Henry Hub, for gas prices,
 and the corresponding sales price at various regional sales points. The differential commonly is related to factors such as product
 quality, location, transportation capacity availability and contract pricing;

 

 

 
  
 ●
 “Bbl” means one
 stock tank barrel or 42 U.S. gallons liquid volume;

 

 

 
  
 ●
 “Boe”
 means one barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural
 gas to one Bbl of oil equivalent. This is an energy content correlation and does not reflect a value or price relationship between
 the commodities;

 

 

 
  
 ●
 “Boe/d” means one
 Boe per day;

 

 

 
  
 ●
 “British
 thermal unit” or “Btu” means a measure of the amount of energy required to raise the temperature of one pound of
 water by one-degree Fahrenheit;

 

 

 
  
 ●
 “collar”
 means a financial arrangement that effectively establishes a price range for the underlying commodity. The producer bears the risk
 and benefit of fluctuation between the minimum (floor) price and the maximum (ceiling) price;

 

 

 
  
 ●
 “drilled
 and uncompleted well” or “DUC” means a wellbore in which horizontal drilling has been completed but has yet to
 be stimulated through hydraulic fracturing;

 

 

 
  
 ●
 “drilling
 locations” means total gross locations that may be able to be drilled on our existing acreage. A portion of our drilling locations
 constitute estimated locations based on our acreage and spacing assumptions;

 

 

 
  
 ●
 “EBITDAX”
 means earnings before interest, taxes, depletion, depreciation, amortization, and exploration expense;

 

 

 
  
 ●
 “gas” means natural
 gas;

 

 

 
  
 ●
 “GHG” means greenhouse
 gas;

 

 

 
  
 ●
 “hedging”
 means the use of derivative commodity and interest rate instruments to reduce financial exposure to commodity price and interest
 rate volatility;

 

 

 
  
 ●
 “Henry
 Hub” means the distribution hub on the natural gas pipeline system in Erath, Louisiana, owned by Sabine Pipe Line LLC;

 

 

 
  
 ●
 “horizontal
 drilling” means drilling that ultimately is horizontal or near horizontal to increase the length of the wellbore penetrating
 the target formation;

 

 

 
  
 ●
 “horizontal
 wells” means wells that are drilled horizontal or near horizontal to increase the length of the wellbore penetrating the target
 formation;

 

 

 
  
 ●
 “LNG” means liquified
 natural gas;

 

 

 
  
 ●
 “MBoe” means one
 thousand barrels of oil equivalent;

 

 

 
  
 ●
 “MBoe/d” means
 one thousand barrels of oil equivalent per day;

 

 

 
iv

 

 

 

 
  
 ●
 “Mcf” means one
 thousand standard cubic feet of natural gas;

 

 

 
  
 ●
 “MMBtu” means one
 million British thermal units;

 

 

 
  
 ●
 “MMBtu/d” means
 one MMBtu per day;

 

 

 
  
 ●
 “MMcf” means one
 million standard cubic feet of natural gas;

 

 

 
  
 ●
 “natural
 gas liquids” or “NGLs” means hydrocarbons, in the same family of molecules as natural gas and crude oil, composed
 exclusively of carbon and hydrogen. Ethane, propane, butane, isobutane, and pentane are all NGLs;

 

 

 
  
 ●
 “net
 acres” means the percentage of total acres an owner owns or has leased out of a particular number of acres, or a specified
 tract. An owner who has 50% interest in 100 acres owns 50 net acres;

 

 

 
  
 ●
 “NYMEX” means the
 New York Mercantile Exchange;

 

 

 
  
 ●
 “option”
 means a contract that gives the buyer the right, but not the obligation, to buy or sell a specified quantity of a commodity or other
 instrument at a specific price within a specified period of time;

 

 

 
  
 ●
 “proved
 developed nonproducing reserves” or “PDNP” means reserves that can be expected to be recovered through existing
 wells with existing equipment and operating methods but are not yet producing;

 

 

 
  
 ●
 “proved
 developed producing reserves” or “PDP” means reserves that can be expected to be recovered through existing wells
 with existing equipment and operating methods, according to the Securities and Exchange Commission or Society of Petroleum Engineers
 definitions of proved reserves;

 

 

 
  
 ●
 “proved reserves”
 means the summation of reserves within the PDP, PDNP and PUD reservoir categories;

 

 

 
  
 ●
 “proved
 undeveloped reserves” or “PUDs” means proved reserves that are expected to be recovered from undrilled well locations
 on existing acreage or from existing wells where a relatively major expenditure is required for recompletion within the five-year
 development window, according to the Securities and Exchange Commission or Society of Petroleum Engineers definition of PUD;

 

 

 
  
 ●
 “reservoir”
 means a porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is
 confined by impermeable rock and is separate from other reservoirs;

 

 

 
  
 ●
 “undeveloped acreage”
 means acreage under lease on which wells have not been drilled or completed;

 

 

 
  
 ●
 “Up-C” means umbrella
 partnership - C Corporation

 

 

 
  
 ●
 “well pad” or “pad”
 means an area of land that has been cleared and leveled to enable a drilling rig to operate in the exploration and development of
 a natural gas or oil well;

 

 

 
  
 ●
 “wellbore” or “well”
 means a drilled hole that is equipped for the production of hydrocarbons;

 

 

 
  
 ●
 “working
 interest” means the right granted to the lessee of a property to explore for and to produce and own oil, natural gas or other
 minerals. The working interest owners bear the exploration, development, and operating costs on either a cash, penalty, or carried
 basis; and

 

 

 
  
 ●
 “WTI” means West
 Texas Intermediate.

 

 

 
v

 

 

 

PART I - FINANCIAL
INFORMATION

 

Item 1. Interim Financial Statements.

 

PRESIDIO PRODUCTION COMPANY

Condensed Consolidated Balance Sheets
(Unaudited)

(in thousands, except par values and share data)

 

 
   
 Successor  
 Predecessor 

 
   
 March 31,  
 December 31, 

 
   
 2026  
 2025 

 
 ASSETS 
    
   

 
 Current assets: 
    
   

 
 Cash and cash equivalents 
 $20,690  
 $4,119 

 
 Restricted cash 
  10,822  
  11,222 

 
 Accounts receivable, oil and gas 
  21,791  
  16,666 

 
 Accounts receivable, joint interest owners 
  11,094  
  11,815 

 
 Derivative assets - current 
  52,856  
  —
 

 
 Prepaid expenses and other current assets 
  2,279  
  1,927 

 
 Total current assets 
  119,532  
  45,749 

 
 Oil and natural gas properties, successful efforts 
  698,766  
  529,096 

 
 Less accumulated depletion, depreciation, and amortization 
  (4,406) 
  (204,639)

 
 Total oil and natural gas properties, net 
  694,360  
  324,457 

 
 Other property and equipment, net 
  5,020  
  5,457 

 
 Derivative assets - noncurrent 
  4,340  
  —
 

 
 Right-of-use assets 
  102  
  135 

 
 Deferred tax assets - noncurrent 
  4,053  
  — 

 
 Other noncurrent assets 
  2,089  
  2,119 

 
 Total assets 
 $829,496  
 $377,917 

 
 LIABILITIES, REDEEMABLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY / MEMBERS’ DEFICIT 
     
    

 
 Current liabilities: 
     
    

 
 Accounts payable 
 $24,457  
 $17,706 

 
 Production taxes payable 
  3,801  
  3,188 

 
 Revenue and royalties payable 
  24,364  
  20,223 

 
 Derivative liabilities - current 
  35,090  
  7,465 

 
 Current portion of long-term debt 
  45,791  
  45,363 

 
 Lease liabilities, current 
  106  
  144 

 
 Related party payable 
  —
  
  1,383 

 
 Other current liabilities 
  18,545  
  23,032 

 
 Total current liabilities 
  152,154  
  118,504 

 
 Long-term debt, net 
  259,388  
  225,143 

 
 Asset retirement obligations 
  79,061  
  59,519 

 
 Lease liabilities 
  —
  
  —
 

 
 Derivative liabilities - noncurrent 
  22,459  
  6,734 

 
 Earnout liability 
  14,800  
  —
 

 
 Total liabilities 
  527,862  
  409,900 

 
 Commitments and Contingencies (Note 14) 
   
  
   
 

 
 Series A redeemable preferred stock, $0.0001 par value; 50,000,000 total shares authorized for all preferred stock series, 125,000 shares issued and outstanding as of March 31, 2026 
  110,869  
  —
 

 
 Series B convertible redeemable preferred stock, $0.0001 par value; 50,000,000 total shares authorized for all preferred stock series, 27,173 shares issued and outstanding as of March 31, 2026 
  24,701  
  —
 

 
 Stockholders’ equity / members’ deficit 
     
    

 
 Members’ deficit 
  —
  
  (31,983)

 
 Class A common stock, $0.0001 par value; 1,500,000,000 shares authorized, 27,652,068 shares issued and outstanding as of March 31, 2026 
  3  
  —
 

 
 Class B common stock, $0.0001 par value; 100,000,000 shares authorized, 1,676,830 shares issued and outstanding as of March 31, 2026 
  —
  
  —
 

 
 Additional paid-in capital 
  188,930  
  —
 

 
 Accumulated deficit 
  (39,629) 
  —
 

 
 Total stockholders’ equity attributable to Presidio Production Company / members’ deficit 
  149,304  
  (31,983)

 
 Non-controlling interest 
  16,760  
  —
 

 
 Total stockholders’ equity / members’ deficit 
  166,064  
  (31,983)

 
 Total liabilities, redeemable preferred stock and stockholders’ equity / members’ deficit 
 $829,496  
 $377,917 

  

The accompanying notes
are an integral part of the unaudited condensed consolidated financial statements.

 

 
1

 

 

 

PRESIDIO PRODUCTION COMPANY

Condensed Consolidated Statements
of Operations (Unaudited)

(in thousands, except per share amounts)

 

 
   
 Successor  
 Predecessor 

 
   
 March 4,

 2026 to  
 January 1,

 2026 to  
 Three Months

Ended 

 
   
 March 31,

 2026  
 March 3,

 2026  
 March 31,

 2025 

 
 Revenues: 
    
    
   

 
 Oil sales 
 $8,803  
 $12,017  
 $22,482 

 
 Natural gas sales 
  2,030  
  17,497  
  16,036 

 
 Natural gas liquids sales 
  4,425  
  6,207  
  13,065 

 
 Field services revenue 
  88  
  155  
  359 

 
 Total revenues 
  15,346  
  35,876  
  51,942 

 
 Operating expenses: 
     
     
    

 
 Lease operating expenses 
  5,890  
  12,277  
  18,955 

 
 Production taxes 
  1,024  
  2,098  
  2,989 

 
 Ad valorem taxes 
  358  
  758  
  1,284 

 
 Depletion, oil and gas properties 
  4,406  
  4,276  
  7,281 

 
 Depreciation and amortization, other property and equipment 
  263  
  673  
  790 

 
 Accretion of asset retirement obligation 
  368  
  643  
  1,008 

 
 General and administrative 
  1,699  
  48,649  
  16,506 

 
 Acquisition and transaction costs 
  224  
  6,993  
  422 

 
 Cost of field services revenue 
  4  
  9  
  179 

 
 Gain on sale of assets 
  (30) 
  (816) 
  (4,899)

 
 Total operating expenses 
  14,206  
  75,560  
  44,515 

 
 Income (loss) from operations 
  1,140  
  (39,684) 
  7,427 

 
 Other income (expense): 
     
     
    

 
 Loss on commodity derivatives 
  (33,165) 
  (27,905) 
  (18,524)

 
 Change in fair value of earnout liability 
  96  
  —
  
  —
 

 
 Interest expense 
  (1,715) 
  (3,920) 
  (6,319)

 
 Other income (expense) 
  (275) 
  170  
  (136)

 
 Total other income (expense) 
  (35,059) 
  (31,655) 
  (24,979)

 
 Net loss before income taxes 
  (33,919) 
  (71,339) 
  (17,552)

 
 Income tax benefit 
  6,953  
  —
  
  —
 

 
 Net loss 
  (26,966) 
  (71,339) 
  (17,552)

 
 Net loss attributable to non-controlling interests 
  (1,547) 
  —
  
  —
 

 
 Net loss attributable to Presidio Production Company 
 $(25,419) 
 $(71,339) 
 $(17,552)

 
   
     
     
    

 
 Net loss per Class A common stock: 
     
     
    

 
 Basic 
 $(0.99) 
     
    

 
 Diluted 
 $(0.99) 
     
    

 
   
     
     
    

 
 Weighted average Class A common stock outstanding: 
     
     
    

 
 Basic 
  26,738,407  
     
    

 
 Diluted 
  26,738,407  
     
    

 
   
     
     
    

 
 Net loss per PIH Class A unit, basic and diluted 
     
 $(616.17
) 
 $(151.60
)

 
 Weighted average PIH Class A units outstanding, basic and diluted 
     
  115,778
  
  115,778
 

 

 

The accompanying notes
are an integral part of the unaudited condensed consolidated financial statements.

 

 
2

 

 

 

PRESIDIO
PRODUCTION COMPANY

Condensed Consolidated
Statements of Redeemable Preferred Stock and Stockholders’/Members’ Equity (Deficit) (Unaudited)

(in thousands)

 

 
 Predecessor 
 Members’

 Deficit 

 
 Balance at December 31, 2024 
 $(27,858)

 
 Capital distributions 
  (60,000)

 
 Net loss 
  (17,552)

 
 Balance at March 31, 2025 
 $(105,410)

 
   
    

 
 Balance at December 31, 2025 
 $(31,983)

 
 Net loss 
  (71,339)

 
 Balance at March 3, 2026 
 $(103,322)

 

 

 
   
    
    
    
    
    
    
    
    
    
    
 Total  
    
   

 
   
 Redeemable
 Preferred Stock  
    
    
    
    
    
    
 Stockholders’  
    
   

 
   
 Series A  
 Series B Convertible  
    
    
    
    
    
    
 Equity

 Attributable  
    
   

 
   
 Redeemable  
 Redeemable  
 Class A  
 Class B  
 Additional  
    
 to Presidio  
    
 Total 

 
   
 Preferred
 Stock  
 Preferred
 Stock  
 Common
 Stock  
 Common
 Stock  
 Paid-In  
 Accumulated  
 Production  
 Non-controlling  
 Stockholders’ 

 
 Successor 
 Shares  
 Amount  
 Shares  
 Amount  
 Shares  
 Amount  
 Shares  
 Amount  
 Capital  
 Deficit  
 Company  
 Interest  
 Equity 

 
 Balance at
 March 4, 2026 
  —  
 $—  
  —  
 $—  
  —  
 $—  
  —  
 $—  
 $—  
 $(13,085) 
 $(13,085) 
 $—  
 $(13,085)

 
 Conversion of Class A ordinary
 shares and Class B ordinary shares into Class A common stock 
     
     
     
     
  7,794,445  
  1  
     
     
  15,084  
     
  15,085  
     
  15,085 

 
 Reclassification of Class
 B ordinary shares subject to earnout arrangement 
     
     
     
     
  1,851,161  
  —  
     
     
  (14,896) 
     
  (14,896) 
     
  (14,896)

 
 Deferred tax effects of earnout
 arrangement 
     
     
     
     
     
     
     
     
  3,325  
     
  3,325  
     
  3,325 

 
 Issuance of equity consideration
 in Business Combination 
     
     
     
     
  1,717,391  
  —  
  1,000,658  
  —  
  18,749  
     
  18,749  
  10,925  
  29,674 

 
 Issuance of Class A and Class
 B common stock in settlement of PIH share-based compensation liability 
     
     
     
     
  3,551,594  
  1  
  676,172  
  —  
  38,775  
     
  38,776  
  7,382  
  46,158 

 
 Issuance of equity consideration
 in EQVR Acquisition 
     
     
     
     
  3,422,260  
  —  
     
     
  37,363  
     
  37,363  
     
  37,363 

 
 Issuance of Series A redeemable
 preferred stock and warrants, net of issuance costs and discounts 
  125,000  
  110,494  
     
     
     
     
     
     
  9,149  
     
  9,149  
     
  9,149 

 
 Preferred dividends attributable
 to Series A redeemable preferred stock 
     
  375  
     
     
     
     
     
     
     
  (1,125) 
  (1,125) 
     
  (1,125)

 
 Issuance of Series B convertible
 redeemable preferred stock, net of issuance costs and discounts 
     
     
  27,173  
  24,701  
     
     
     
     
     
     
  —  
     
  — 

 
 Excise tax imposed on common
 stock redemptions 
     
     
     
     
     
     
     
     
  (1,303) 
     
  (1,303) 
     
  (1,303)

 
 Issuance of Class A common
 stock in connection with PIPE financing, net of issuance costs 
     
     
     
     
  9,315,217  
  1  
     
     
  82,250  
     
  82,251  
     
  82,251 

 
 Share-based compensation 
     
     
     
     
     
     
     
     
  434  
     
  434  
     
  434 

 
 Net
 loss 
     
     
     
     
     
     
     
     
     
  (25,419) 
  (25,419) 
  (1,547) 
  (26,966)

 
 Balance
 at March 31, 2026 
  125,000  
 $110,869  
  27,173  
 $24,701  
  27,652,068  
 $3  
  1,676,830  
 $—  
 $188,930  
 $(39,629) 
 $149,304  
 $16,760  
 $166,064 

 

  

The accompanying notes are an integral
part of the unaudited condensed consolidated financial statements.

 

 
3

 

 

 

PRESIDIO
PRODUCTION COMPANY

Condensed Consolidated
Statements of Cash Flows (Unaudited)

(in thousands)

 

 
   
 Successor  
 Predecessor 

 
   
 March 4,

 2026  
 January 1, 2026  
 Three Months Ended 

 
   
 to March 31, 

2026  
 to March 3,

 2026  
 March 31, 

2025 

 
   
    
    
   

 
 Cash flows from operating activities: 
    
    
   

 
 Net loss 
 $(26,966) 
 $(71,339) 
 $(17,552)

 
 Adjustments to reconcile net loss to net cash provided by (used in) operating activities: 
     
     
    

 
 Depletion, oil and gas properties 
  4,406  
  4,276  
  7,281 

 
 Depreciation and amortization, other property and equipment 
  263  
  673  
  790 

 
 Accretion of asset retirement obligation 
  368  
  643  
  1,008 

 
 Settlement of asset retirement obligation liabilities 
  (95) 
  —
  
  (228)

 
 Deferred tax benefit 
  (6,953) 
  —
  
  —
 

 
 Amortization of debt issuance costs 
  47  
  273  
  450 

 
 Amortization of debt premiums 
  (431) 
  —
  
  —
 

 
 Loss on commodity derivatives 
  33,165  
  27,905  
  18,524 

 
 Net settlements of commodity derivatives 
  (6,243) 
  (10,621) 
  (10,205)

 
 Cash paid for modification of derivative contracts, net of realized loss 
  (57,816) 
  —
  
  —
 

 
 Stock compensation expense 
  434  
  46,982  
  —
 

 
 Change in fair value of earnout liability 
  (96) 
  —
  
  —
 

 
 Gain on sale of assets 
  (30) 
  (816) 
  (4,899)

 
 Changes in operating assets and liabilities, net of effects from acquisition: 
     
     
    

 
 Accounts receivable 
  4,776  
  (5,573) 
  (2,404)

 
 Prepaid expenses and other current assets 
  (656) 
  38  
  518 

 
 Other noncurrent assets 
  8  
  22  
  (40)

 
 Accounts payable 
  5,674  
  (567) 
  (2,020)

 
 Related party payable 
  (1,383) 
  —
  
  —
 

 
 Other current liabilities 
  (35,610) 
  13,306  
  (1,533)

 
 Net cash provided by (used in) operating activities 
  (87,138) 
  5,202  
  (10,310)

 
 Cash flows from investing activities: 
     
     
    

 
 Capital expenditures for oil and natural gas properties 
  (165) 
  (553) 
  (650)

 
 Purchases of other property and equipment 
  (15) 
  (431) 
  (581)

 
 Proceeds from sale of assets 
  1,225  
  816  
  4,899 

 
 Acquisition, net of cash acquired 
  (145,527) 
  —
  
  —
 

 
 Net cash provided by (used in) investing activities 
  (144,482) 
  (168) 
  3,668 

 
 Cash flows from financing activities: 
     
     
    

 
 Proceeds from issuance of Class A common stock in connection with PIPE financing, net of issuance costs 
  82,251  
  —
  
  —
 

 
 Proceeds from issuance of Series A redeemable preferred stock and warrants, net of issuance costs and discounts 
  119,643  
  —
  
  —
 

 
 Proceeds from issuance of Series B convertible redeemable preferred stock, net of issuance costs and discounts 
  24,701  
  —
  
  —
 

 
 Proceeds from long-term debt 
  37,000  
  4,000  
  146 

 
 Repayments of long-term debt 
  (12,597) 
  (5,191) 
  (10,361)

 
 Payments of debt issuance costs 
  (2,606) 
  (9) 
  —
 

 
 Payments on finance lease liabilities 
  (85) 
  (198) 
  (230)

 
 Cash settlement of PIH share-based compensation liability 
  (265) 
  —
  
  —
 

 
 Member distributions 
  —
  
  —
  
  (60,000)

 
 Net cash provided by (used in) financing activities 
  248,042  
  (1,398) 
  (70,445)

 
 Net increase (decrease) in cash, cash equivalents, and restricted cash 
  16,422  
  3,636  
  (77,087)

 
 Cash, cash equivalents, and restricted cash at beginning of period 
  15,090  
  15,341  
  102,287 

 
 Cash, cash equivalents, and restricted cash at end of period 
 $31,512  
 $18,977  
 $25,200 

 
   
     
     
    

 
 Supplemental cash flow information: 
     
     
    

 
 Cash paid for interest 
 $1,733  
 $3,721  
 $6,299 

 
 Stock issued for acquisitions 
 $67,850  
 $—
  
 $—
 

 
 Satisfaction of liability-classified share-based payment awards 
 $46,982  
 $—
  
 $—
 

 
   
     
     
    

 
 Cash paid for amounts included in the measurement of lease liabilities: 
     
     
    

 
 Operating cash flows from operating leases 
 $21  
 $42  
 $61 

 

 

The accompanying notes
are an integral part of the unaudited condensed consolidated financial statements.

 

 
4

 

 

 

PRESIDIO
PRODUCTION COMPANY

Notes to Unaudited
Condensed Consolidated Financial Statements

 

NOTE 1. ORGANIZATION AND DESCRIPTION
OF BUSINESS

 

Organization

 

EQV Ventures Acquisition Corp. (“EQV”)
was incorporated as a Cayman Islands exempted company on April 15, 2024. EQV was formed for the purpose of effecting a merger, amalgamation,
share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities
(the “Business Combination”).

 

On March 4, 2026 (the “Closing Date”),
Presidio Production Company (“Presidio”, the “Company”) (formerly known as Presidio PubCo Inc.) consummated the
Business Combination as described in Note 3 — Business Combinations pursuant to the Business Combination Agreement dated August
5, 2025. As part of the transaction, EQV changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware and
was renamed “Presidio MidCo Inc.” (the “Domestication”). Immediately following the Domestication, Prometheus PubCo
Merger Sub Inc., a Delaware corporation (“EQV Merger Sub”) merged with and into EQV (the “Merger”) with EQV surviving
as a wholly-owned subsidiary of the Company (“EQV Surviving Subsidiary”). The Company is organized in an Up-C structure in
which substantially all assets and operations of Presidio Investment Holdings LLC, a Delaware limited liability company (“PIH”)
are held indirectly through Prometheus Holdings LLC, a Delaware limited liability company (“EQV Holdings”, “Opco”).
The Company holds the managing member interest in Opco through EQV Surviving Subsidiary.

 

In connection with the
Business Combination, a portion of EQV shares were exchanged for cash from shareholders who elected to execute their redemption
right. The remaining EQV shares were exchanged for newly issued shares of Presidio Class A common stock (“Class A Common
Stock”). The EQV public and private placement warrants were assumed by the Company and exchanged for warrants exercisable for
Class A Common Stock (“Presidio Public and Private Placement Warrants”). Refer to Note 9 — Redeemable Preferred
Stock and Stockholders’ Equity (Successor) for further discussion on the Presidio Public and Private Placement Warrants.
Additionally, pursuant to the Rollover Agreements dated August 5, 2025, certain unitholders of PIH (“PIH Rollover
Holders”) exchanged their outstanding equity interests in PIH for EQV Holdings common units (“Opco Common Units”)
and an equal number of newly issued shares of Presidio Class B common stock (“Class B Common Stock”). The owners of Opco
other than the Company are considered non-controlling interests in the accompanying condensed consolidated financial statements.
Refer to Note 3 — Business Combinations for further discussion on the Business Combination.

 

Also on the Closing
Date, the Company acquired all of the issued and outstanding equity interests of EQV Resources LLC, a Delaware limited liability
company (“EQVR”) pursuant to the agreement and plan of merger dated August 5, 2025 (“EQVR Acquisition”).
Immediately following closing of the EQVR Acquisition, Presidio contributed EQVR to EQV Surviving Subsidiary and EQV Surviving
Subsidiary contributed EQVR to Opco. Refer to Note 3 — Business Combinations for further discussion on the EQVR
Acquisition.

 

Opening successor cash and equity represent the
carrying value of the accounting acquirer’s cash and equity and are not comparable to the predecessor cash and equity of PIH. Included
in the opening cash balance as of March 4, 2026 was $15.1 million from the proceeds of EQV’s Initial Public Offering, net of redemptions,
that was previously held in a trust account (the “Trust Account”). The cash proceeds from the Trust Account were used for transaction
expenses, deferred underwriting commission, and the operating activities of the Company following the Business Combination.

 

The Company’s Class A common stock and warrants
are listed on the New York Stock Exchange under the ticker symbols “FTW” and “FTW WS,” respectively.

 

 
5

 

 

 

Description of Business

 

Presidio is an independent
oil and natural gas company engaged in oil and gas exploration and production, with operations concentrated across the Western Anadarko
Basin of Texas, Oklahoma, and Kansas. The Company’s strategy is centered on acquiring existing producing assets and applying engineering
expertise and Artificial Intelligence (“AI”) data driven analytics to enhance performance and extend asset life.

 

Inflation Reduction Act of 2022

 

On August 16, 2022, the Inflation
Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S.
federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. domestic corporations and certain
U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on
the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally
1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise
tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value
of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the
Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the
abuse or avoidance of the excise tax.

 

In connection with the Business Combination, a
total of 33,581,540 EQV Class A ordinary shares (“Class A Ordinary Shares”) for an aggregate redemption amount of $357.1 million
were redeemed from the Trust Account. As a result of these redemptions of common stock, the Company recognized an estimated liability
for the excise tax of $1.3 million, included in other current liabilities on the Company’s condensed consolidated balance sheet
as of March 31, 2026 (Successor) pursuant to the 1% excise tax under the IR Act partially offset by issuance of common and preferred stock
subsequent to the redemptions. The liability does not impact the condensed consolidated statements of operations and is recognized as
a reduction of additional paid-in-capital.

 

NOTE 2. BASIS OF PRESENTATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

These unaudited, interim, condensed consolidated financial statements
and notes are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”)
and in accordance with the rules and regulations of the SEC. These unaudited interim financial statements reflect all adjustments which
are, in the opinion of management, necessary to present fairly the results for the interim periods presented. The Company’s accounting
policies conform to US GAAP and have been consistently applied in the presentation of financial statements. The Company’s condensed consolidated
financial statements include all wholly-owned subsidiaries and all variable interest entities for which the Company determined it is the
primary beneficiary. Intercompany balances and transactions have been eliminated in consolidation. Certain information and disclosures
normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted.

 

The condensed consolidated
financial statements include a Predecessor period, which was the period from January 1, 2026 through March 3, 2026, concurrent with completion
of the Business Combination and Successor period from March 4, 2026 through March 31, 2026. As a result of the Business Combination and
EQVR Acquisition, the results of operations, financial position and cash flows of the Predecessor and Successor may not be directly comparable.
A black-line between the Successor and Predecessor periods has been placed in the condensed consolidated financial statements and in
the tables to the notes to the condensed consolidated financial statements to highlight the lack of comparability between these two periods
as the Business Combination resulted in a new basis of accounting for PIH.

 

 
6

 

 

 

Principles of Consolidation

 

Under the Up-C structure, PIH Rollover Holders
own all of the shares of Class B Common Stock which are non-economic voting only shares of the Company. PIH Unit Holders’ economic
interest in the Company is held through their ownership (the “Common Units”) in the Opco. Pursuant to the amended and restated
limited liability company agreement of the Opco (the “A&R LLC Agreement”), the Company’s ownership of Common Units
in the Opco at all times equals the number of shares of the Company’s Class A Common Stock then outstanding, and PIH Rollover Holders’
ownership of Common Units in the Opco at all times equals the number of shares of Class B Common Stock then outstanding. The Opco was
formed for the purpose of executing the Company’s organization with PIH Rollover Holders into an Up-C structure. The Opco, through
its subsidiaries, owns, operates, and manages oil and gas properties and manages the Company’s outstanding debt and derivative instruments.
The Company’s wholly-owned subsidiary, EQV Surviving Subsidiary, is the managing member of the Opco. Subsidiaries of the Opco own
and operate all our oil and gas assets. The Company and the Opco are holding companies with no other operations, material cash flows,
or material assets or liabilities other than the equity interests in their subsidiaries.

 

Holders of Common Units (other than the Company) have the right (an “exchange right”), subject to certain limitations,
to exchange Presidio Interests (each consisting of one Common Unit and one share of Class B Common Stock, par value $0.0001 per share,
of the Company (“Presidio Class B Common Stock” and, together with an EQV Holdings Common Unit, a “Presidio Interest”))
for, at the Company’s option, (i) shares of Presidio Class A Common Stock on a one-for-one basis, subject to adjustment for stock
splits, stock dividends, reorganizations, recapitalizations and the like (collectively, “adjustments”), or (ii) a corresponding
amount of cash. The Company’s decision to make a cash payment or issue shares upon an exercise of an exchange right will be made
by the Company’s independent directors.

 

Holders of EQV Holdings Common Units (other than the Company) will generally be permitted to exercise the exchange right on a quarterly
basis, subject to certain de minimis allowances. In addition, additional exchanges may occur in connection with certain specified events,
and any exchanges involving more than a specified number of Common Units (subject to the Company’s discretion to permit exchanges
of a lower number of units) may occur at any time with advanced notice. The exchange rights are subject to certain limitations and restrictions
intended to reduce the administrative burden of exchanges upon the Company and ensure that Opco will continue to be treated as a partnership
for U.S. federal income tax purposes.

 

The Opco is considered a variable interest entity for which the Company is the primary beneficiary. This conclusion was based on a
qualitative analysis that considered the Opco’s governance structure and the Company’s control over operations of the Opco.
The Company, through its wholly owned subsidiary, EQV Surviving Subsidiary, as the managing member of EQV Holdings, has the decision making
authority along with the ability to control the most significant activities of the Opco and participate significantly in the Opco’s
benefits and losses, where the PIH Rollover Holders directly holding other Common Units have neither substantive kick-out rights nor substantive
participating rights. As such, because the Company has both power and economics in the Opco, the Company determined it is the primary
beneficiary of the Opco and consolidates the Opco in the Company’s condensed consolidated financial statements. The Company reflects
a non-controlling interest in the condensed consolidated financial statements based on the proportion of Common Units owned by PIH Rollover
Holders relative to the total number of Common Units outstanding. The non-controlling interest is presented as a component of equity in
the accompanying condensed consolidated financial statements and represents the ownership interest held by PIH Rollover Holders in the
Opco.

 

 
7

 

 

 

Non-controlling
Interest

 

The non-controlling interest
percentage may be affected by the issuance of shares of Class A Common Stock, repurchases or cancellation of Class A Common Stock, the
exchange of Class B Common Stock and the redemption of Common Units (and concurrent cancellation of Class B Common Stock), among other
things. The percentage is based on the proportionate number of Opco Common Units held by PIH Rollover Holders relative to the total Common
Units outstanding. As of March 31, 2026, the Company owned 27,652,068 Opco Common Units, representing a 94.3% interest in the Opco, and
PIH Rollover Holders owned 1,676,830 Common Units, representing the remaining 5.7% interest.

 

When the Company’s
relative ownership interest in the Opco changes, adjustments to Non-controlling interest and Paid-in capital, tax effected, will occur.
Because these changes in the ownership interest in the Opco do not result in a change of control, the transactions are accounted for
as equity transactions under authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Topic 810, Consolidation (“ASC 810”), which requires that any differences between the carrying
value of the Company’s basis in the Opco and the fair value of the consideration received are recognized directly in equity and
attributed to the controlling interest. Additionally, based on the A&R LLC Agreement, there are no substantive profit sharing arrangements
that would cause distributions to be other than pro rata. Therefore, profits and losses are attributed to the common shareholders and
non-controlling interest pro rata based on ownership interests in the Opco.

 

Use of Estimates

 

The preparation of financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from these estimates. Additionally, the prices received for crude
oil, natural gas, and NGLs production can heavily influence our assumptions, judgments and estimates, and continued volatility of crude
oil and natural gas prices could have a significant impact on our estimates. Estimates significant to our condensed consolidated financial
statements include the following:

 

●proved reserves used in calculating
 depletion;

 

●estimates of accrued revenues and
 unbilled costs;

 

●future cash flows from proved oil
 and natural gas reserves used in the impairment assessment;

 

●derivative financial instruments;

 

●asset retirement obligations;

 

 ●income taxes; and

 

 

●the fair value of share-based compensation
 awards.

 

Cash and Cash Equivalents

 

The Company considers all
highly liquid investments with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents
as of March 31, 2026 and December 31, 2025.

 

 
8

 

 

 

Restricted Cash

 

At the closing date of the
ABS II securitization transaction (see Note 7 — Debt), the Company was required to deposit $15.7 million into a
separate liquidity reserve account. At each note payment date, a portion of the liquidity reserve account balance is used to fund the
priority of payments as required by the securitized note agreements as long as the balance exceeds the expected note interest for the
six payment dates following such payment date for controlling securities, and senior transaction fees. The account is also used to fund
the required principal and interest payments associated with the ABS II debt if available funds are insufficient. Following the
payment in full of the aggregate outstanding amount of the Notes and of all other amounts owed, any amount remaining on deposit in the
liquidity reserve account shall be distributed back to the Company.

 

The following table provides
a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:

 

 
   
 Successor  
 Predecessor 

 
 (in thousands) 
 March 31, 

 2026  
 December 31, 

 2025 

 
 Cash and cash equivalents 
 $20,690  
 $4,119 

 
 Restricted cash 
  10,822  
  11,222 

 
 Total cash, cash equivalents, and
 restricted cash presented in the statement of cash flows 
 $31,512  
 $15,341 

 

 

Concentrations of Credit Risk

 

Financial instruments that
potentially subject the Company to a concentration of credit risk consist principally of cash and accounts receivable. The Company maintains
deposits at financial institutions, which at times may exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance
Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits and believes
the counter party risks are minimal based on the reputation and history of the institutions in which the funds are deposited and held.

 

During the Successor
period from March 4, 2026 through March 31, 2026, oil, natural gas and NGL revenues from four purchasers totaled approximately 22%,
17%, 11%, and 11% of gross oil, natural gas and NGL revenues. During the Predecessor period from January 1, 2026 through March 3,
2026, oil, natural gas and NGL revenues from four purchasers totaled approximately 22%, 15%, 13%, and 11% of gross oil, natural gas
and NGL revenues. Significant customers’ accounts receivable balances totaled approximately 23%, 20%, 14%, 12%, and 10% of oil
and natural gas receivables as of March 31, 2026. During three months ended March 31, 2025, oil, natural gas and NGL revenues