How does an oil company turn into a video gaming firm?

In 2016, Black Ridge Oil & Gas was struggling during the last oil bust and teetering on the verge of bankruptcy.

Three years later - and made official on Monday - Black Ridge has made the highly unusual conversion from oil and gas into esports video gaming, becoming the parent company of the renamed Allied Esports Entertainment, and trading on the Nasdaq stock exchange under the "AESE" ticker.

Minnesota-based Black Ridge was failing during the oil bust as it focused on shale oil in North Dakota's Bakken shale. As part of a restructuring agreement, Black Ridge was taken over by the Houston debt equity firm Chambers Energy Capital.

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Getting out of the Bakken, Black Ridge formed a blank-check acquisition firm, called a special purpose acquisition company. The idea is to have a publicly-traded blank-check firm that can acquire and immediately take public a private firm.

Photo: Spud Hilton, The Chronicle

The blank-check firm went public in 2017 and things got quiet for awhile.

But, behind the scenes, Black Ridge decided to pivot away from oil and gas altogether.

Instead, they first made the extremely unique decision to switch all the way over to the burgeoning industry of esports and competitive video gaming, which has exploded in the advent of online gaming with players competing with each other around the world.

"The opportunities in the global esports market are massive and we believe Allied Esports is extremely well-positioned as an early mover with a track record of successful execution," said Black Ridge Chief Executive Ken DeCubellis, who's a veteran of Exxon Mobil.

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