NOTE 20 - COMMITMENTS AND CONTINGENCIES Firm Oil Takeaway and Pricing Agreement On August 2, 2018, the Company executed a five -year agreement with SCM Crude, LLC, an affiliate of SCM, to secure firm takeaway pipeline capacity and pricing on a long-haul pipeline to the Gulf Coast region commencing July 1, 2019. On March 11, 2019, the agreement was replaced with a 5 -year agreement between the Company and ARM, a related company to SCM. The new agreement accelerated the start date to March 2019 and guarantees firm takeaway capacity on a long-haul pipeline to Corpus Christi, Texas, once completed, at a specified price. Under the terms of the new contract, the Company received more favorable pricing differentials on the crude oil sales contract and the minimum quantities of crude oil required were modified as follows: Date Quantity (Barrels per Day) March 2019 - June 2019 5,000 July 2019 - December 2019 4,000 January 2020 - June 2020 5,000 July 2020 - June 2021 6,000 July 2021 - December 2024 (1) 7,500 (1) Extending to the later of December 2024 or 5 years from the EPIC Crude Oil pipeline in-service date (no later than June 2025). During the three month period ended September 30, 2019, the Company did not meet its required minimum quantity commitment under the contract due to a temporary production outage. The purchaser declined to enforce any make whole provisions and production has been restored. Further, ARM has agreed to purchase crude from the Company based upon Magellan East Houston pricing with a fixed "differential basis," providing price relief versus current market conditions. Environmental and Governmental Regulation As of September 30, 2019 , there were no known environmental or regulatory matters which are reasonably expected to result in a material liability to the Company. Many aspects of the oil and natural gas industry are extensively regulated by federal, state, and local governments and regulatory agencies in all areas in which the Company has operations. Regulations govern such things as drilling permits, environmental protection and air emissions/pollution control, spacing of wells, the unitization and pooling of properties, reports concerning operations, land use, taxation, and various other matters. Oil and natural gas industry legislation and administrative regulations are periodically changed for a variety of political, economic, and other reasons. As of September 30, 2019 , the Company had not been fined or cited for any violations of governmental regulations that would have a material adverse effect on the financial condition of the Company. Legal Proceedings The Company may from time to time be involved in various legal actions arising in the ordinary course of business. In the opinion of management, the Company's liability, if any, in these pending actions would not have a material adverse effect on the financial position of the Company. The Company's general and administrative expenses would include amounts incurred to resolve claims made against the Company. The Company believes there is no litigation pending that could have, individually or in the aggregate, a material adverse effect on its results of operations or financial condition.