Next Bridge Hydrocarbons Faces $56M Impairment as Key Texas Lease Expires

TL;DR

**Next Bridge Hydrocarbons just lost its main asset, making it a highly speculative bet on minor projects with a massive impairment hit.**

AI Summary

Next Bridge Hydrocarbons, Inc., incorporated on August 31, 2021, as OilCo Holdings, Inc., spun off from Meta Materials, Inc. on December 14, 2022. The company is an energy firm focused on oil and natural gas properties in the U.S. Its primary asset, the Orogrande Project in West Texas, faced a significant setback when University Lands denied its DDU agreement extension on October 8, 2024, leading to an impairment adjustment of $56,186,313. This non-renewal means the Orogrande Project, which comprised approximately 134,000 gross acres, will no longer be a focus. The company now holds minor interests in the Hazel Project in the Midland Basin (33.33% working interest, acquired additional 40.66% on January 30, 2017), two minor well interests in Oklahoma, and mineral lease interests in Louisiana. Next Bridge Hydrocarbons operates with only two employees as of December 31, 2024, relying heavily on consultants and external partners for exploration and technical support. The business strategy emphasizes maximizing value from producing assets and progressing discovered resources into proved reserves, production, and cash flow, with a focus on limiting initial capital risks.

Why It Matters

The non-renewal of the Orogrande Project's DDU agreement, resulting in a $56,186,313 impairment, is a critical blow to Next Bridge Hydrocarbons, Inc.'s core strategy and asset base. For investors, this significantly devalues the company's primary asset and raises questions about future revenue streams and profitability, especially given its limited remaining interests in the Hazel Project, Oklahoma, and Louisiana. Employees, though few (only two as of December 31, 2024), face uncertainty regarding the company's long-term viability. In the broader market, this highlights the inherent regulatory and land-use risks in the energy sector, where even established projects can be abruptly curtailed, impacting competitive dynamics for smaller players.

Risk Assessment

Risk Level: high — The risk level is high due to the significant impairment adjustment of $56,186,313 recorded on October 8, 2024, following University Lands' non-renewal of the Orogrande Drilling and Development Agreement. This event effectively eliminates the company's primary focus, the Orogrande Project (approximately 134,000 gross acres), leaving it with only minor interests in other projects and a lean operational structure of two employees, indicating substantial operational and financial uncertainty.

Analyst Insight

Investors should exercise extreme caution and consider divesting, as the loss of the Orogrande Project represents a fundamental shift in Next Bridge Hydrocarbons' asset base and future prospects. The $56,186,313 impairment signals a significant devaluation, and the company's reliance on minor projects and external consultants suggests a challenging path to profitability.

Key Numbers

• $56.19M — Impairment Adjustment (Due to non-renewal of Orogrande DDU agreement on October 8, 2024.)
• 2 — Number of Employees (As of December 31, 2024, indicating a lean operational structure.)
• 134,000 — Gross Acres (In the Orogrande Project, which is no longer under lease.)
• 33.33% — Working Interest (Initial ownership in the Hazel Project, later increased by 40.66%.)
• December 14, 2022 — Spin-off Date (Next Bridge Hydrocarbons became independent from Meta Materials, Inc.)
• 264,637,563 — Common Stock Outstanding (As of December 10, 2025.)

Key Players & Entities

• Next Bridge Hydrocarbons, Inc. (company) — registrant
• Meta Materials, Inc. (company) — former parent company
• University Lands (regulator) — landowner denying lease extension
• Orogrande Project (company) — primary oil and natural gas project
• Hazel Project (company) — minor oil and natural gas project
• $56,186,313 (dollar_amount) — impairment adjustment
• December 31, 2024 (date) — fiscal year end
• October 8, 2024 (date) — date of Orogrande DDU non-renewal notice
• 264,637,563 (dollar_amount) — common stock outstanding at December 10, 2025
• Gregory McCabe (person) — sole owner of Wolfbone Investments, LLC, Hudspeth, and MPC

FAQ

Risk Factors

• Dependence on Key Personnel and Consultants [high — operational]: The company operates with only two employees as of December 31, 2024, and relies heavily on consultants and external partners for exploration and technical support. This limited internal capacity creates a significant operational risk, as the company's ability to execute its strategy is directly tied to the availability and performance of these third-party resources.
• Loss of Major Project and Asset Concentration [high — operational]: The denial of the DDU agreement extension for the Orogrande Project on October 8, 2024, resulted in an impairment of $56,186,313 and the cessation of operations on approximately 134,000 gross acres. This loss represents a significant setback and highlights the risk associated with concentrating resources on a single major project.
• University Lands Agreement Non-Renewal [high — regulatory]: The University Lands denied the DDU agreement extension for the Orogrande Project on October 8, 2024. This non-renewal directly impacts the company's ability to operate its primary asset and underscores the risk associated with agreements tied to specific land grants or governmental entities.
• Impairment of Assets [high — financial]: The company recorded an impairment adjustment of $56,186,313 due to the non-renewal of the Orogrande DDU agreement. This substantial write-down negatively impacts the company's balance sheet and financial performance, reflecting a significant loss of previously recognized asset value.
• Commodity Price Volatility [medium — market]: As an oil and natural gas company, Next Bridge Hydrocarbons is exposed to the inherent volatility of commodity prices. Fluctuations in the prices of oil and natural gas can significantly impact the company's revenues, profitability, and the economic viability of its projects.

Industry Context

The oil and natural gas industry is characterized by significant capital intensity, price volatility, and complex regulatory environments. Companies like Next Bridge Hydrocarbons focus on exploration, development, and production, often relying on strategic partnerships and technological advancements to manage risks and maximize returns. The current market trends emphasize efficient resource extraction and a disciplined approach to capital allocation amidst fluctuating global energy demand and supply dynamics.

Regulatory Implications

The company's operations are subject to various federal, state, and local regulations governing oil and gas exploration, production, and environmental protection. The non-renewal of the DDU agreement by University Lands highlights the critical nature of maintaining favorable relationships with land grant entities and regulatory bodies, as such decisions can have a profound impact on asset viability.

What Investors Should Do

1. Monitor the company's strategy for diversifying its asset base beyond the Hazel Project.
2. Evaluate the company's ability to attract and retain qualified consultants and partners.
3. Assess the economic viability and potential for growth of the Hazel Project and other remaining assets.
4. Scrutinize the company's capital allocation strategy and risk management practices.

Key Dates

• 2022-12-14: Spin-off from Meta Materials, Inc. — Marks the official independence of Next Bridge Hydrocarbons, Inc. as a standalone energy company.
• 2024-10-08: University Lands denied DDU agreement extension for Orogrande Project — Led to a $56,186,313 impairment and the cessation of operations on the company's primary asset, significantly altering its operational focus.
• 2024-12-31: Company had only two employees — Highlights a lean operational structure heavily reliant on external consultants and partners.
• 2025-12-10: Common Stock Outstanding reported — Provides a key metric for understanding the company's equity structure and potential dilution.

Glossary

DDU agreement

Likely refers to a Deep Drilling Unit or a similar agreement related to oil and gas exploration and production rights, often involving specific operational or land use terms. (The non-renewal of this agreement for the Orogrande Project was a critical event leading to asset impairment and strategic shift.)

Impairment adjustment

A reduction in the carrying value of an asset on the balance sheet when its recoverable amount is less than its book value. This reflects a loss in value. (A significant impairment of $56,186,313 was recorded due to the loss of the Orogrande Project, directly impacting the company's financial statements.)

Working interest

The interest of a mineral owner or lessee in the oil and gas produced, including the right to operate and receive a share of the revenue after royalties and other burdens are paid. (The company holds a working interest in the Hazel Project, which is now a more central asset after the Orogrande setback.)

Proved reserves

Estimates of quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. (A key objective of the company's strategy is to progress discovered resources into proved reserves, production, and cash flow.)

Gross Acres

The total acreage in which a company has an interest, regardless of the working interest percentage. It represents the full surface area covered by the lease or mineral rights. (The Orogrande Project comprised approximately 134,000 gross acres, highlighting the scale of the asset lost.)

Year-Over-Year Comparison

Information comparing key metrics to the previous year, such as revenue growth, margin changes, and new risks, is not available in the provided text. The filing details the company's current state and recent events, including the significant impairment related to the Orogrande Project, but lacks comparative year-over-year financial data or a discussion of changes in risk profiles from a prior period.

Key Financial Figures

• $0.0001 — g) of the Act: Common stock, par value $0.0001 per share Our common stock is not pub
• $56,186,313 — r 31, 2024. An impairment adjustment of $56,186,313 has been recorded in the accompanying c
• $1,000 — ng obligation. MHP paid Torchlight Subs $1,000 as an option fee at the time of executi
• $12,690,704 — ment, at an aggregate purchase price of $12,690,704 for approximately 9,762 net mineral acr
• $1,300 — 74% net revenue interest (approximately $1,300 per net mineral acre). MHP declined to

Filing Documents

• nbh-10k.htm (10-K) — 1368KB
• nbh-ex10_43.htm (EX-10.43) — 52KB
• nbh-ex10_44.htm (EX-10.44) — 44KB
• nbh-ex10_45.htm (EX-10.45) — 26KB
• nbh-ex10_46.htm (EX-10.46) — 52KB
• nbh-ex10_47.htm (EX-10.47) — 44KB
• nbh-ex10_48.htm (EX-10.48) — 36KB
• nbh-ex10_52.htm (EX-10.52) — 53KB
• nbh-ex10_53.htm (EX-10.53) — 33KB
• nbh-ex10_54.htm (EX-10.54) — 38KB
• nbh-ex21_1.htm (EX-21.1) — 9KB
• nbh-ex23_1.htm (EX-23.1) — 3KB
• nbh-ex31_1.htm (EX-31.1) — 15KB
• nbh-ex31_2.htm (EX-31.2) — 15KB
• nbh-ex32_1.htm (EX-32.1) — 6KB
• nbh-ex32_2.htm (EX-32.2) — 5KB
• nb001_v1.jpg (GRAPHIC) — 6KB
• 0001199835-25-000414.txt ( ) — 4040KB
• nbh-20241231.xsd (EX-101.SCH) — 23KB
• nbh-20241231_cal.xml (EX-101.CAL) — 40KB
• nbh-20241231_def.xml (EX-101.DEF) — 26KB
• nbh-20241231_lab.xml (EX-101.LAB) — 168KB
• nbh-20241231_pre.xml (EX-101.PRE) — 124KB
• nbh-10k_htm.xml (XML) — 296KB

Business

Business 4 Item 2.

Properties

Properties 4 Item 1A.

Risk Factors

Risk Factors 14 Item 1B. Unresolved Staff Comments 28 Item 1C. Cybersecurity 28 Item 3.

Legal Proceedings

Legal Proceedings 29 Item 4. Mine Safety Disclosures 29 PART II Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. Reserved 30 Item 7.

Managements Discussion and Analysis of Financial Condition and Results of Operations

Managements Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 42 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 43 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 45 Item 9A.

Controls and Procedures

Controls and Procedures 45 Item 9B. Other Information 45 PART III Item 10. Directors, Executive Officers and Corporate Governance 46 Item 11.

Executive Compensation

Executive Compensation 48 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 51 Item 13. Certain Relationships and Related Transactions, and Director Independence 53 Item 14. Principal Accounting Fees and Services 56 PART IV Item 15. Exhibits and Financial Statement Schedules 57 Item 16. Form 10-K Summary 60

Signatures

Signatures 61 Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS The information contained in this 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking will, expect, anticipate, aim, estimate, intend, ongoing, plan, predict, potential, project, should, seeks, believe, likely to and similar words, phrases or expressions. All statements, other than statements of historical facts, included in this report, are forward-looking statements, including statements mentioned under Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations, regarding: amount and timing of future production of oil and natural gas; amount, nature and timing of capital expenditures; the number of anticipated wells to be drilled after the date hereof; the availability of exploration and development opportunities; our financial or operating results; our cash flow and anticipated liquidity; operating costs including lease operating expenses, administrative costs and other expenses; finding and development costs; our business strategy; and other plans and objectives for future operations. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason. They can be affected by a number of factors, including, among others: the risks described in Risk Factors and elsewhere in this report; the volatility of prices and supply of, and demand for, oil and natural gas; the timing and success of our drilling activities; the numerous uncertainties inherent in estimating quantities of oil and natural gas reserves and actual future production rates and associated costs; our ability to successfully i

Business

Business Strategy Our mission is to safely increase production and cash flow from our oil and natural gas properties which we believe are rich in opportunities through a disciplined allocation of capital and operational management for the benefit of our shareholders. Our business strategy is designed to accomplish this mission by focusing on two key objectives: (1) maximize the value of our producing assets; and (2) progress our discovered resources into proved reserves, production, and cash flow through efficient appraisal, development and exploitation. We believe there are three principal business processes that we must follow to enable our operations to be profitable. Each major business process offers the opportunity for a distinct partner or alliance as we grow. These processes are: Investment Evaluation and Review; Operations and Field Activities; and Administrative and Finance Management. Investment Evaluation and Review. We believe this process is the key ingredient to our success. Recognition of quality investment opportunities is the fuel that drives our engine. Broadly, this process includes the following activities: prospect acquisition, regional and local geological and geophysical evaluations, data processing, economic analysis, lease acquisition and negotiations, permitting, and field supervision. We expect these evaluation processes to be managed by our management team. Expert or specific technical support will be outsourced as needed. Operations and Field Activities. This process begins following management approval of an investment. Well site supervision, construction, drilling, logging, product marketing, and transportation are examples of some activities. We will prefer to be the operator where possible. Administrative and Finance Management. This process coordinates our initial structuring and capitalization, general operations and accounting, reporting, audit, banking and cash management, regulatory agencies reporting and interact

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