Phoenix Energy One, LLC: Item 5.02 filing

Events in this filing

Item 5.02 as filed

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Through the Company’s Wellbore Participation and Assignment Plan (the “ Plan ”), the Company has provided certain of its employees, including each of its executive officers, either individually or through closely held entities, the opportunity to acquire from the Company non-operating working interests in 38 Company-operated wells in North Dakota and Montana (the “ Plan Wells ”). Each person who participates in the Plan commits to pay a percentage (the “ Commitment ”) of the costs of development (“ Development Costs ”) of the Plan Wells and, upon election to participate in the Plan, initially pays 3.0% of his or her Commitment, based upon the forecasted Development Costs. The Commitment divided by the forecasted Development Costs is referred to as the “ Elected Working Interest .” Each Plan participant bears his or her share of all Development Costs and ongoing operating costs based upon his or her Elected Working Interest. The Plan provides each Plan participant a net revenue interest equal to 80% of their Elected Working Interest. No distributions are expected to be made until all Development Costs have been incurred. When that occurs and distributions begin to be made from the operations of the Plan Well, a Plan participant’s share of distributions will be based upon 80% of the participant’s Net Working Interest. The Company believes these arrangements align the participants’ interests with those of the Company and its equity holders, since the participants bear the same drilling, cost and production risks as the Company on the Plan Wells.