Spindletop's Net Income Soars 244% Amidst Increased Oil & Gas Revenue

TL;DR

**SPND's net income exploded, but watch out for that new Louisiana lawsuit and dwindling cash; it's a risky bet with potential upside.**

AI Summary

SPINDLETOP OIL & GAS CO. (SPND) reported a significant increase in net income for the nine months ended September 30, 2025, reaching $289,000, up from $84,000 in the same period of 2024, representing a 244% increase. This was primarily driven by a 4.9% increase in total revenues to $3,193,000 from $3,025,000, with oil and gas revenues rising to $2,729,000 from $2,600,000. Despite an increase in total expenses to $3,792,000 from $3,809,000, a substantial decrease in lease operating expenses from $1,283,000 to $946,000 contributed to improved operational performance. The company also saw a notable increase in depreciation and amortization expenses to $328,000 from $146,000. Cash and cash equivalents decreased by $1,520,000, from $6,472,000 at December 31, 2024, to $4,952,000 at September 30, 2025, largely due to $2,225,000 in cash used for investing activities, including $1,028,000 for capitalized acquisition, exploration, and development. The company repurchased 141,573 shares of common stock for $351,101, or $2.48 per share, in June 2025. A new pollution lawsuit was filed against a subsidiary in LaFourche Parish, Louisiana, on December 11, 2024, which management plans to defend vigorously.

Why It Matters

For investors, SPND's substantial net income growth and increased oil and gas revenues signal improved operational efficiency and potential for future profitability, despite a decrease in cash reserves. The share repurchase program, acquiring 141,573 shares for $351,101, indicates management's confidence and a potential return of capital to shareholders, which could support the stock price. However, the new pollution lawsuit in Louisiana introduces a significant legal and financial risk that could impact future earnings and competitive standing in the highly regulated oil and gas sector. The company's evaluation of alternatives like joint ventures or property sales highlights potential strategic shifts to address capital requirements, which could reshape its market position.

Risk Assessment

Risk Level: high — The company's cash and cash equivalents decreased by $1,520,000, from $6,472,000 to $4,952,000, and it used $2,225,000 in investing activities, raising concerns about liquidity. Furthermore, the filing explicitly states, "The Company is evaluating whether current cash balances and cash flow from operations alone would be sufficient to provide working capital to fully fund the Company's operations," indicating a significant financial vulnerability. The new pollution lawsuit in LaFourche Parish, Louisiana, also presents an unquantified but potentially substantial legal and financial liability.

Analyst Insight

Investors should closely monitor SPND's cash flow and liquidity, as the company is actively evaluating funding alternatives like joint ventures or property sales. Given the new pollution lawsuit, investors should also assess the potential impact of litigation on future earnings and consider the inherent volatility of commodity prices on SPND's core business. A wait-and-see approach is advisable until more clarity emerges on these significant risks.

Financial Highlights

debt To Equity

0.71

revenue

$3,193,000

operating Margin

N/A

total Assets

$28,189,000

total Debt

$11,690,000

net Income

$289,000

eps

N/A

gross Margin

N/A

cash Position

$4,952,000

revenue Growth

+4.9%

Revenue Breakdown

Key Numbers

• $289,000 — Net Income (Increased 244% for the nine months ended September 30, 2025, compared to $84,000 in 2024.)
• $3,193,000 — Total Revenues (Increased 4.9% for the nine months ended September 30, 2025, from $3,025,000 in 2024.)
• $2,729,000 — Oil and Gas Revenues (Increased from $2,600,000 in 2024 to $2,729,000 in 2025 for the nine-month period.)
• $946,000 — Lease Operating Expenses (Decreased significantly from $1,283,000 in 2024 for the nine-month period, improving operational efficiency.)
• $1,520,000 — Decrease in Cash and Equivalents (Represents a substantial reduction in liquidity from December 31, 2024, to September 30, 2025.)
• $2,225,000 — Cash Used for Investing Activities (Primarily for capitalized acquisition, exploration, and development, indicating significant capital deployment.)
• 141,573 — Shares Repurchased (Common stock repurchased for $351,101 at $2.48 per share in June 2025.)
• $4,952,000 — Cash and Cash Equivalents (Balance at September 30, 2025, down from $6,472,000 at December 31, 2024.)
• $328,000 — Depreciation and Amortization Expenses (Increased from $146,000 in 2024 for the nine-month period, reflecting higher asset utilization or new assets.)
• $1,028,000 — Capitalized Acquisition, Exploration and Development (Investment in oil and gas properties for the nine months ended September 30, 2025.)

Key Players & Entities

• SPINDLETOP OIL & GAS CO. (company) — registrant
• Prairie Pipeline Co. (company) — wholly owned subsidiary
• Spindletop Drilling Company (company) — wholly owned subsidiary
• $289,000 (dollar_amount) — Net income for nine months ended September 30, 2025
• $84,000 (dollar_amount) — Net income for nine months ended September 30, 2024
• $3,193,000 (dollar_amount) — Total revenues for nine months ended September 30, 2025
• $3,025,000 (dollar_amount) — Total revenues for nine months ended September 30, 2024
• $1,520,000 (dollar_amount) — Decrease in cash, cash equivalents, and restricted cash
• 141,573 (dollar_amount) — Shares of common stock repurchased
• $351,101 (dollar_amount) — Cost of common stock repurchased
• LaFourche Parish, Louisiana (person) — Location of new pollution lawsuit

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: Prices for oil and natural gas fluctuate widely due to factors such as global economic conditions and the impact of public health issues like pandemics. This volatility can significantly affect the company's revenues and profitability.
• Environmental Lawsuits [medium — legal]: A subsidiary is facing a new pollution lawsuit filed in LaFourche Parish, Louisiana, on December 11, 2024, alleging pollution claims. Management plans to defend vigorously, but the outcome and potential financial impact are uncertain.
• Lease Operating Expenses [medium — operational]: While lease operating expenses decreased significantly from $1,283,000 to $946,000 for the nine months ended September 30, 2025, ongoing management of these costs is crucial for maintaining operational efficiency and profitability.
• Cash Position Decline [medium — financial]: Cash and cash equivalents decreased by $1,520,000 to $4,952,000 as of September 30, 2025, largely due to $2,225,000 in investing activities. This reduction in liquidity requires careful management.
• Global Economic Factors [medium — market]: Significant global economic and other global factors occurring during 2025 are noted as impacting the company. These broad economic trends can influence demand, supply, and pricing for oil and gas.

Industry Context

The oil and gas industry is characterized by significant price volatility for commodities like oil and natural gas, influenced by global economic conditions and geopolitical events. Companies in this sector face ongoing challenges related to exploration, production costs, and environmental regulations. The industry is also subject to fluctuations in supply and demand, impacting revenue streams and investment decisions.

Regulatory Implications

The company is subject to environmental regulations, as evidenced by the new pollution lawsuit filed against a subsidiary. Compliance with these regulations is critical, and litigation can lead to significant financial penalties and reputational damage. Changes in environmental policies or enforcement can also impact operational costs and strategies.

What Investors Should Do

1. Monitor the outcome of the new pollution lawsuit in LaFourche Parish, Louisiana, as it could lead to material financial liabilities.
2. Analyze the drivers behind the substantial increase in depreciation and amortization expenses ($328,000 from $146,000) to understand its impact on future earnings.
3. Evaluate the company's strategy for managing its reduced cash position ($4,952,000) following significant investing activities.
4. Assess the sustainability of the improved operational performance, particularly the reduction in lease operating expenses ($946,000 from $1,283,000).

Key Dates

• 2025-06-10: Share Repurchase — The company repurchased 141,573 shares of common stock for $351,101 ($2.48 per share), reducing outstanding shares and potentially increasing EPS.
• 2024-12-11: New Lawsuit Filed — A subsidiary was served with a new pollution lawsuit in LaFourche Parish, Louisiana, introducing a new legal risk for the company.
• 2025-09-30: Quarterly Reporting Date — Represents the end of the nine-month period for which financial results are reported, showing increased net income and revenue but a decrease in cash.
• 2024-12-31: Previous Year End — Benchmark for year-over-year comparisons, with cash and equivalents at $6,472,000.

Glossary

Full Cost Method

An accounting method used in the oil and gas industry where all costs of acquiring, exploring, and developing properties are capitalized into a single cost center. (This method is used for the company's 'Oil and gas properties' asset on the balance sheet, impacting how these assets are valued and depreciated.)

Treasury Stock

Shares of a company's own stock that it has repurchased from the open market. These shares are no longer outstanding. (The company repurchased 141,573 shares in June 2025, increasing its treasury stock balance and reducing the number of outstanding shares.)

Asset Retirement Obligation

A legal obligation associated with the retirement of a tangible long-lived asset, such as plugging and abandoning oil wells. (The company has a noncurrent liability of $4,314,000 for asset retirement obligations, reflecting future costs associated with its oil and gas operations.)

Capitalized Acquisition, Exploration and Development

Costs incurred to acquire new oil and gas properties, explore for new reserves, and develop existing ones, which are recorded as assets rather than expensed immediately. (The company spent $1,028,000 on these activities, indicating investment in future production and reserves.)

Lease Operating Expenses

Costs associated with the day-to-day operation of oil and gas leases, including labor, materials, and supplies necessary to maintain production. (A significant decrease in these expenses from $1,283,000 to $946,000 contributed to improved profitability.)

Year-Over-Year Comparison

Compared to the prior year period, SPINDLETOP OIL & GAS CO. has demonstrated strong revenue growth of 4.9%, reaching $3,193,000, and a substantial 244% increase in net income to $289,000. This improved profitability was aided by a significant reduction in lease operating expenses. However, the company's cash position has declined by $1,520,000, primarily due to increased investing activities, and a new environmental lawsuit has been filed, introducing a new risk factor.

Key Financial Figures

• $0.01 — Section 12(g) of the Act: Common Stock, $0.01 par value Indicate by check mark if t
• $2,729,000 — for the first nine months of 2025 were $2,729,000, as compared to $2,600,000 for the same
• $2,600,000 — of 2025 were $2,729,000, as compared to $2,600,000 for the same period in 2024, an increas
• $129,000 — d in 2024, an increase of approximately $129,000 or 5.0%. Both oil sales and oil prices
• $1,349,000 — nine months of 2025 were approximately $1,349,000 compared to approximately $1,699,000 fo
• $1,699,000 — ly $1,349,000 compared to approximately $1,699,000 for

Filing Documents

• spnd_2025sept30-10q.htm (10-Q) — 401KB
• exhibit_31-1.htm (EX-31.1) — 9KB
• exhibit_31-2.htm (EX-31.2) — 9KB
• exhibit_32-1.htm (EX-32.1) — 7KB
• 0001017386-25-000137.txt ( ) — 1518KB
• spnd-20250930.xsd (EX-101.SCH) — 10KB
• spnd-20250930_cal.xml (EX-101.CAL) — 32KB
• spnd-20250930_def.xml (EX-101.DEF) — 11KB
• spnd-20250930_lab.xml (EX-101.LAB) — 118KB
• spnd-20250930_pre.xml (EX-101.PRE) — 77KB
• spnd_2025sept30-10q_htm.xml (XML) — 93KB

– Financial Information

Part I – Financial Information: Page

– Financial Statements

Item 1. – Financial Statements Consolidated Balance Sheets 4 - 5 September 30, 2025 (Unaudited) and December 31, 2024 Consolidated Statements of Operations (Unaudited) 6 Nine Months Ended September 30, 2025 and 2024 Three Months Ended September 30, 2025 and 2024 Consolidated Statements of Changes in Shareholder's Equity (Unaudited) 7 Nine Months Ended September 30, 2025 and Nine Months Ended September 30, 2024 Consolidated Statements of Cash Flow (Unaudited) 8 Nine Months Ended September 30, 2025 and 2024

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9

– Management's Discussion and Analysis of Financial

Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations 10

– Controls and Procedures

Item 4. – Controls and Procedures 16

– Other Information

Part II – Other Information:

– Other Information

Item 5. – Other Information 18

– Exhibits

Item 6. – Exhibits 19 3

- Financial Information

Part I - Financial Information

- Financial Statements

Item 1. - Financial Statements SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 4,952,000 $ 6,472,000 Restricted cash 270,000 270,000 Accounts receivable 1,832,000 1,854,000 Income tax receivable 26,000 26,000 Total Current Assets 7,080,000 8,622,000 Property and Equipment - at cost Oil and gas properties (full cost method) 27,518,000 26,490,000 Rental equipment 465,000 465,000 Gas gathering system 115,000 115,000 Other property and equipment 479,000 479,000 28,577,000 27,549,000 Accumulated depreciation and amortization ( 26,863,000 ) ( 26,586,000 ) Total Property and Equipment 1,714,000 963,000 Real Estate Property - at cost Land 688,000 688,000 Commercial office building 1,925,000 1,925,000 Accumulated depreciation ( 1,355,000 ) ( 1,304,000 ) Total Real Estate Property 1,258,000 1,309,000 Other Assets Deferred Income Tax Asset 362,000 102,000 Other long-term investments 17,772,000 16,575,000 Other 3,000 3,000 Total Other Assets 18,137,000 16,680,000 Total Assets $ 28,189,000 $ 27,574,000 The accompanying notes are an integral part of these statements. 4 SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities $ 7,376,000 $ 6,699,000 Total Current Liabilities 7,376,000 6,699,000 Noncurrent Liabilities Asset retirement obligation 4,314,000 4,314,000 Total Noncurrent Liabilities 4,314,000 4,314,000 Total Liabilities 11,690,000 11,013,000 Shareholders' Equity Common stock, $ .01 par value, 100,000,000 shares authorized; 7,677,471 shares issued and 6,598,370 outstanding at September 30, 2025, and 6,739,943 outstanding at December 31, 2024. 77,00

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION AND ORGANIZATION The accompanying financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by generally accepted accounting principles or those normally made in the Company's annual Form 10-K filing. Accordingly, the reader of this Form 10-Q may wish to refer to the Company's Form 10-K for the year ended December 31, 2024, for further information. The consolidated financial statements presented herein include the accounts of Spindletop Oil & Gas Co., a Texas corporation ("the Company") and its wholly owned subsidiaries, Prairie Pipeline Co., a Texas corporation and Spindletop Drilling Company, a Texas corporation. All significant inter-company transactions and accounts have been eliminated. In the opinion of management, the accompanying unaudited interim financial condition, the results of operations and changes in cash flows of the Company and its consolidated subsidiaries for the interim periods presented. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with generally accepted accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations. 2. COMMON STOCK Effective June 10, 2025, the Company repurchased 141,573 shares of its common stock from a non-controlling, unaffiliated shareholder for a negotiated purchase price of $ 351,101 or $ 2.48 per share. The repurchased shares are held as Treasury Stock. The Company has not approved

- Management's Discussion and Analysis of Financial Condition

Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations WARNING CONCERNING FORWARD LOOKING STATEMENTS The following discussion should be read in conjunction with the financial This Report on Form 10-Q may contain forward-looking statements within the meaning of the federal securities laws, principally, but not only, under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." We caution investors that any forward-looking statements in this report, or which management may make orally or in writing from time to time, are based on management's beliefs and on assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "result" and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We caution you that while forward-looking statements reflect our good faith beliefs when we make them, they are not guarantees of future performance and are impacted by actual events when they occur after we make such statements. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at t

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