Annual report pursuant to Section 13 and 15(d)

SUBSEQUENT EVENTS

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SUBSEQUENT EVENTS
12 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 13 – SUBSEQUENT EVENTS

 

In November 2019, the Company purchased an insurance policy for approximately $241,000 and financed approximately $221,000 of the premium by executing a note payable. 

 

In October 2019, the Company signed a Post-Drilling Agreement with Delek GOM Investments, LLC. The Agreement provides, among other things, that the Company (i) issue to Delek 38,423,221 shares of common stock of the Company (the “Insurance Proceeds Shares”) as compensation with respect to certain insurance proceeds received in connection with drilling of the Tau well prospect, (ii) that as payoff for the Company’s outstanding obligations of $1,220,548 (“Term Loan Payoff”) to Delek under the Term Loan Agreement entered into between the Company and Delek on March 1, 2019, the Company issue a convertible debenture (the “Convertible Debenture”) to Delek in a principal amount equal to the Term Loan Payoff, as a consequence of which the Term Loan Agreement has been terminated, (iii) that the Security Agreement entered into between the Company and Delek on March 1, 2019, be amended to release all liens and security interests Delek may hold in properties of the Company other than those attributable to the Tau well, and (iv) that the Registration Rights Agreement entered into between the Company and Delek on March 25, 2019, be amended to extend Delek’s rights thereunder to the shares underlying the Convertible Debenture, discussed below. The Convertible Debenture is convertible at the option of Delek at any time in whole or in part for up to 24,410,960 shares of Common Stock at a conversion price of $0.05 per share.  Interest on the Convertible Debenture is accruable at 12% per annum and the maturity of the Convertible Debenture is October 22, 2020 (which interest rate will increase to 15% per annum upon any Event of Default as defined in the Convertible Debenture).  The Company has a right to prepay the Convertible Debenture prior to maturity for an amount equal to the outstanding principal balance plus accrued and unpaid interest.  Absent any restrictions under the federal securities laws, Delek’s ability to sell shares of common stock of the Company issued upon conversion of the Convertible Debenture will be limited, in any one-month period, to 10% (ten percent) of the total volume of such converted shares.

 

Underwriters (the "Underwriters") associated with the Company's Energy Package insurance policy (the "Policy") have acknowledged confirmation of coverage, subject to the Policy terms and conditions, related to a subsurface well occurrence that happened during the drilling of the Company's Tau well earlier this year. This occurrence transpired on May 5, 2019 during drilling operations at a measured depth of 15,254 feet. The Company subsequently controlled the occurrence and ceased drilling operations. Plugs were placed in the well to meet regulatory requirements prior to rig release. Pursuant to the Policy terms and conditions, the Underwriters will reimburse GulfSlope for qualified actual costs and expenses incurred to (i) regain control of the well, and (ii) restore or re-drill the well to 15,254 feet. GulfSlope is working with the Underwriters to finalize details associated with the claim.

 

In November 2019, an agreement was reached with Texas South whereby Texas South re-conveyed to GulfSlope all of Texas South’s interest in Tau and Canoe in exchange for the release of claims and foregoing collections for Texas South’s failure to pay JIBs for the Tau and Canoe wells.

 

Convertible debentures in the amount of $300,000 plus accrued interest of $86,636 have been converted into 17,919,455 shares of common stock at a weighted average price of $0.0214.