Earthstone Energy (ESTE) 10-Q 12 Nov 13 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Sep. 30, 2013	Nov. 12, 2013
Document And Entity Information	'	'
Entity Registrant Name	'EARTHSTONE ENERGY INC	'
Entity Central Index Key	'0000010254	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-13	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--03-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	1,732,250
Document Fiscal Period Focus	'Q2	'
Document Fiscal Year Focus	'2014	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Sep. 30, 2013	Mar. 31, 2013
ASSETS	'	'
Cash and cash equivalents	$2,744,000	$2,180,000
Accounts receivable:	'	'
Oil and gas sales	3,433,000	3,055,000
Joint interest and other receivables net of allowance of ($38,000) at September 30, 2013 and March 31, 2013	278,000	328,000
Other current assets	716,000	814,000
Total current assets	7,171,000	6,377,000
Oil and gas property, full cost method:	'	'
Proved properties	63,274,000	53,265,000
Unproved properties	1,860,000	2,156,000
Accumulated depletion and impairment	-29,439,000	-27,729,000
Net oil and gas properties	35,695,000	27,692,000
Support equipment and other non-current assets net of accumulated depreciation of ($471,000) and ($416,000), respectively	746,000	611,000
Total non-current assets	36,441,000	28,303,000
Total assets	43,612,000	34,680,000
LIABILITIES AND SHAREHOLDERS' EQUITY	'	'
Accounts payable	1,616,000	1,631,000
Accrued liabilities	6,249,000	3,971,000
Total current liabilities	7,865,000	5,602,000
Long-term liabilities:	'	'
Long term debt	8,000,000	4,000,000
Deferred tax liability	3,474,000	2,971,000
Asset retirement obligation, less current portion	1,963,000	1,809,000
Total long-term liabilities	13,437,000	8,780,000
Total liabilities	21,302,000	14,382,000
Shareholders' Equity:	'	'
Preferred shares, $0.001 par value, 600,000 authorized and none issued or outstanding	'	'
Common shares, $0.001 par value, 6,400,000 shares authorized and 1,814,000 and 1,802,000 shares issued, respectively	18,000	18,000
Additional paid-in capital	23,373,000	23,278,000
Treasury stock, at cost, 82,000 shares	-457,000	-457,000
Accumulated deficit	-624,000	-2,541,000
Total shareholders equity	22,310,000	20,298,000
Total liabilities and shareholders' equity	$43,612,000	$34,680,000

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $)	Sep. 30, 2013	Mar. 31, 2013
Assets:	'	'
Allowance of joint interest and other receivable, net	($38,000)	($38,000)
Accumulated depreciation on support equipment and other non-current assets, net	($471,000)	($416,000)
Shareholders' Equity:	'	'
Preferred stock, par value	$0.00	$0.00
Preferred stock, Authorized	600,000	600,000
Preferred stock, Issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$0.00	$0.00
Common stock, Authorized	6,400,000	6,400,000
Common stock, Issued	1,814,000	1,802,000
Treasury stock, shares	82,000	82,000

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues:	'	'	'	'
Oil and gas sales	$4,627,000	$2,700,000	$8,209,000	$4,920,000
Well service and water disposal revenue	45,000	109,000	58,000	236,000
Total revenues	4,672,000	2,809,000	8,267,000	5,156,000
Expenses:	'	'	'	'
Oil and gas production	868,000	823,000	1,703,000	1,657,000
Production tax	431,000	262,000	740,000	458,000
Well service and water disposal	19,000	19,000	56,000	42,000
Depletion and depreciation	980,000	461,000	1,766,000	755,000
Accretion of asset retirement obligation	49,000	44,000	98,000	87,000
General and administrative	659,000	627,000	1,352,000	1,308,000
Total expenses	3,006,000	2,236,000	5,715,000	4,307,000
Income from operations	1,666,000	573,000	2,552,000	849,000
Other income (expense):	'	'	'	'
Interest and other income	7,000	6,000	15,000	8,000
Interest and other expenses	-44,000	-1,000	-77,000	-1,000
Total other income (expense)	-37,000	5,000	-62,000	7,000
Income before income tax	1,629,000	578,000	2,490,000	856,000
Current income tax expense	43,000	14,000	70,000	26,000
Deferred income tax expense	362,000	78,000	503,000	74,000
Total income tax expense	405,000	92,000	573,000	100,000
Net income	$1,224,000	$486,000	$1,917,000	$756,000
Per share amounts:	'	'	'	'
Basic	$0.71	$0.28	$1.11	$0.44
Diluted	$0.71	$0.28	$1.11	$0.44
Weighted average common shares outstanding:	'	'	'	'
Basic	1,732,250	1,720,712	1,732,250	1,720,712
Diluted	1,732,250	1,720,712	1,732,250	1,720,712

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:	'	'
Net income	$1,917,000	$756,000
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Depletion and depreciation	1,766,000	755,000
Deferred income tax expense	503,000	74,000
Accretion of asset retirement obligation	98,000	87,000
Share-based compensation	95,000	96,000
Amortization of deferred financing costs	5,000	'
Change in:	'	'
Accounts receivable, net	-328,000	-167,000
Other current assets	98,000	-350,000
Accounts payable, accrued and other liabilities	63,000	-733,000
Net cash provided by operating activities	4,217,000	518,000
Cash flows from investing activities:	'	'
Oil and gas properties	-7,457,000	-4,683,000
Purchases of support equipment and other non-current assets	-164,000	-37,000
Other	-27,000	'
Net cash used in investing activities	-7,648,000	-4,720,000
Cash flows from financing activities:	'	'
Borrowings on long term debt	4,000,000	'
Deferred financing fees	-5,000	'
Net cash provided by financing activities	3,995,000	'
Cash and cash equivalents:	'	'
Net increase (decrease) in cash and cash equivalents	564,000	-4,202,000
Cash and cash equivalents, beginning of year	2,180,000	6,778,000
Cash and cash equivalents, end of period	2,744,000	2,576,000
Supplemental disclosure of cash flow information:	'	'
Cash paid for interest	60,000	1,000
Cash paid for income tax	1,000	341,000
Non-cash:	'	'
Increase in oil and gas property due to asset retirement obligation	63,000	35,000
Accrued capital expenditures	2,193,000	1,572,000
Prepaid capital expenditures	'	$106,000

1_Basis_of_Presentation

1. Basis of Presentation	6 Months Ended
	Sep. 30, 2013
Accounting Policies [Abstract]	'
1. Basis of Presentation	'
	The accompanying interim financial statements of Earthstone Energy, Inc. (formerly Basic Earth Science Systems, Inc.) are unaudited.  However, in the opinion of management, the interim data includes any applicable adjustments necessary for a fair presentation of the financial and operational results for the interim period according to generally accepted accounting principles in the United States of America (“U.S. GAAP”).
	At the directive of the Securities and Exchange Commission to use “plain English” in public filings, the Company will use such terms as “we,” “our,” “us” or “the Company” in place of Earthstone Energy, Inc. and its wholly-owned subsidiary.  When such terms are used in this manner throughout the notes to the unaudited condensed consolidated financial statements, they are in reference only to the corporation, Earthstone Energy, Inc. and its subsidiaries, and are not used in reference to the Board of Directors, corporate officers, management, or any individual employee or group of employees.
	The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.  We believe the disclosures made are adequate to make the information not misleading and suggest that these financial statements be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the previous fiscal year-end.
	Further, the results of operations for the three and six months covered by this report, are not necessarily indicative of the operating results that may be expected for the full fiscal year.
	Fair Value Measurements.  The Company’s financial instruments consist of cash and cash equivalents, trade receivables, trade payables and accrued liabilities, all of which are considered to be representative of their fair market value, due to the short-term and highly liquid nature of these instruments. The carrying value of the Company's Credit Facility approximates its fair value, interst rates are variable based on prevailing market rates.
	Use of Estimates.  The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  These estimates and assumptions concern matters that are inherently uncertain.  Estimates and assumptions are revised periodically and the effects of revisions are reflected in the financial statements in the period it is determined to be necessary.  Actual results could differ from those estimates.
	Recent Accounting Pronouncements.  In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.  This ASU requires the Company to disclose both net and gross information about assets and liabilities that have been offset. The disclosures under this new guidance are required to be provided retrospectively for all comparative periods presented.  The Company was required to implement this guidance effective for the first quarter of fiscal 2014.  The adoption of ASU 2011-11 did not have a material impact on its consolidated financial statements.
	In July 2013, the FASB issued, ASU No. 2013-11 "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" (“ASU 2013-11”).  ASU 2013-11 addresses the diversity in practice that exists for the balance sheet presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU No. 2013-11 is effective for the Company’s fiscal quarter ending June 30, 2014. ASU 2013-11 impacts balance sheet presentation only. The Company is currently evaluating the impact of the new rule but believes the balance sheet impact will not be material.

2_Other_Assets

2. Other Assets	6 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
2. Other Assets	'
	9/30/13		3/31/13
		(Unaudited)
	Lease and well equipment inventory	$	371,000	$	371,000
	Drilling and completion cost prepayments		155,000		210,000
	Other current assets		107,000		33,000
	Prepaid insurance premiums		43,000		88,000
	Prepaid income tax		40,000		112,000
	Total other current assets	$	716,000	$	814,000

3_Accrued_Liabilities

3. Accrued Liabilities	6 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
3. Accrued Liabilities	'
		9/30/13		3/31/13
		(Unaudited)
	Accrued operations payable	$	5,137,000	$	2,933,000
	Accrued compensation		405,000		429,000
	Accrued income tax payable and other		307,000		213,000
	Short-term asset retirement obligation		303,000		296,000
	Revenue and production taxes payable		97,000		100,000
	Total accrued liabilities	$	6,249,000	$	3,971,000

4_Oil_and_Gas_Properties

4. Oil and Gas Properties	6 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
4. Oil and Gas Properties	'
		9/30/13			3/31/13
		(Unaudited)
	Proved properties	$	63,274,000		$	53,265,000
	Unproved properties		1,860,000			2,156,000
	Less accumulated depletion and impairment		(29,439,000	)		(27,729,000	)
	Total Oil and Gas Properties	$	35,695,000		$	27,692,000
	As of September 30, 2013, the Company has recorded $63,274,000 as proved property costs.  As of March 31, 2013, the Company had recorded $53,265,000 as proved property costs.  Additions of $9,713,000 have been recorded during the six months ended September 30, 2013, included in these additions are $9,577,000 related to intangible drilling and completion costs and tangible drilling and completion costs. Of the total additions recorded during the six months ended September 30, 2013, 91% relate to our work in North Dakota.
	As of September 30, 2013, the Company has recorded $1,860,000 as unproved property costs.  As of March 31, 2013, the Company had recorded $2,156,000 as unproved property costs.  For the six months ended September 30, 2013, the Company recorded additional unproved property costs of $524,000 related to wells in progress and $134,000 related to additional investments in unproved properties. During the six months ended September 30, 2013,  $566,000 in costs related to wells and $295,000 related to acreage were transferred from unevaluated to depletable properties, in addition, there were $93,000 of lease expirations.

5_Long_Term_Debt

5. Long Term Debt	6 Months Ended
	Sep. 30, 2013
Debt Disclosure [Abstract]	'
5. Long Term Debt	'
	During the three months ended September 30, 2013, the Company drew $3,000,000 on it's existing Credit Facility resulting in an outstanding balance of $8,000,000 as of September 30, 2013. Effective September 10, 2013, a re-determination of our allowable borrowing base was completed by the lender and our borrowing base was increased from $6,000,000 to $12,000,000. As of September 30, 2013, we were in compliance with all covenants as required by the Credit Facility.

6_Income_Tax

6. Income Tax	6 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
6. Income Tax	'
	The provision for income tax is comprised of:
		Three Months Ended						Six Months Ended
		September 30,						September 30,
		2013			2012			2013			2012
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	Current:
	Federal	$	35,000		$	12,000		$	55,000		$	23,000
	State		8,000			2,000			15,000			3,000
	Total current income tax		43,000			14,000			70,000			26,000
	Deferred:
	Federal		342,000			73,000			475,000			69,000
	State		20,000			5,000			28,000			5,000
	Total deferred income tax		362,000			78,000			503,000			74,000
	Income tax expense	$	405,000		$	92,000		$	573,000		$	100,000
	A reconciliation between the income tax provision at the statutory rate on income tax and the income tax provision for the three months and six months ended is as follows:
		Three Months Ended						Six Months Ended
		September 30,						September 30,
		2013			2012			2013			2012
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	Federal tax at statutory rate	$	555,000		$	197,000		$	847,000		$	291,000
	State taxes, net of federal benefit		23,000			7,000			32,000			7,000
	Excess percentage depletion		(175,000	)		(114,000	)		(310,000	)		(207,000	)
	Other adjustments, net		2,000			2,000			4,000			9,000
	Income tax expense	$	405,000		$	92,000		$	573,000		$	100,000
	Effective rate expressed as a percentage		24.9	%		15.9	%		23	%		11.7	%
	of income before income tax
	The overall effective tax rate expressed as a percentage of book income before income tax for the three and six months ended September 30, 2013, as compared to the corresponding periods in the prior year, was higher due to a higher pre-tax income compared to the comparable prior periods, coupled with a change in excess percentage depletion.  For the current three and six months ended September 30, 2013, pre-tax income was $1,629,000 and $2,490,000, respectively, compared to $578,000 and $856,000, repectively, for the comparative prior periods.
	Net deferred tax assets and liabilities were comprised of:
		September 30,			March 31,
		2013			2013
		(Unaudited)
	Deferred tax assets:
	Statutory depletion carry-forward	$	1,689,000		$	1,467,000
	Other accruals		80,000			131,000
	Allowance for doubtful accounts		14,000			14,000
	Gross deferred tax assets		1,783,000			1,612,000
	Deferred tax liabilities:
	Depletion, depreciation and intangible drilling costs		(5,257,000	)		(4,583,000	)
	Gross deferred tax liabilities		(5,257,000	)		(4,583,000	)
	Deferred tax liabilities, net	$	(3,474,000	)	$	(2,971,000	)
	Projections of future income taxes and their timing require significant estimates with respect to future operating results.  Accordingly, deferred taxes may change significantly as more information and data is gathered with respect to such events as changes in commodity prices, their effect on the estimate of oil and gas reserves and the depletion of these long-lived reserves.
	The Company is subject to U.S. federal income tax and income tax from multiple state jurisdictions.
	The Company’s federal income tax returns for the prior three tax years of filings and state income tax returns for the prior four years of tax filings are still subject to examination by tax authorities.

1_Summary_of_Significant_Accou

1. Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Sep. 30, 2013
Accounting Policies [Abstract]	'
Basis of Presentation	'
	The accompanying interim financial statements of Earthstone Energy, Inc. (formerly Basic Earth Science Systems, Inc.) are unaudited.  However, in the opinion of management, the interim data includes any applicable adjustments necessary for a fair presentation of the financial and operational results for the interim period according to generally accepted accounting principles in the United States of America (“U.S. GAAP”).
	At the directive of the Securities and Exchange Commission to use “plain English” in public filings, the Company will use such terms as “we,” “our,” “us” or “the Company” in place of Earthstone Energy, Inc. and its wholly-owned subsidiary.  When such terms are used in this manner throughout the notes to the unaudited condensed consolidated financial statements, they are in reference only to the corporation, Earthstone Energy, Inc. and its subsidiaries, and are not used in reference to the Board of Directors, corporate officers, management, or any individual employee or group of employees.
	The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.  We believe the disclosures made are adequate to make the information not misleading and suggest that these financial statements be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the previous fiscal year-end.
	Further, the results of operations for the three and six months covered by this report, are not necessarily indicative of the operating results that may be expected for the full fiscal year.
Fair Value Measurements	'
	Fair Value Measurements.  The Company’s financial instruments consist of cash and cash equivalents, trade receivables, trade payables and accrued liabilities, all of which are considered to be representative of their fair market value, due to the short-term and highly liquid nature of these instruments. The carrying value of the Company’s Credit Facility approximates its fair value, interest rates are variable based on prevailing market rates.
Use of Estimates	'
	Use of Estimates.  The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  These estimates and assumptions concern matters that are inherently uncertain.  Estimates and assumptions are revised periodically and the effects of revisions are reflected in the financial statements in the period it is determined to be necessary.  Actual results could differ from those estimates.
Recent Accounting Pronouncements	'
	Recent Accounting Pronouncements.  In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.  This ASU requires the Company to disclose both net and gross information about assets and liabilities that have been offset. The disclosures under this new guidance are required to be provided retrospectively for all comparative periods presented.  The Company was required to implement this guidance effective for the first quarter of fiscal 2014.  The adoption of ASU 2011-11 did not have a material impact on its consolidated financial statements.
	In July 2013, the FASB issued, ASU No. 2013-11 "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" (“ASU 2013-11”). ASU 2013-11 addresses the diversity in practice that exists for the balance sheet presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU No. 2013-11 is effective for the Company’s fiscal quarter ending June 30, 2014. ASU 2013-11 impacts balance sheet presentation only. The Company is currently evaluating the impact of the new rule but believes the balance sheet impact will not be material.

2_Other_Assets_Tables

2. Other Assets (Tables)	6 Months Ended
	Sep. 30, 2013
Other Assets Tables	'
Other Assets	'
	9/30/13		3/31/13
		(Unaudited)
	Lease and well equipment inventory	$	371,000	$	371,000
	Drilling and completion cost prepayments		155,000		210,000
	Other current assets		107,000		33,000
	Prepaid insurance premiums		43,000		88,000
	Prepaid income tax		40,000		112,000
	Total other current assets	$	716,000	$	814,000

3_Accrued_Liabilities_Tables

3. Accrued Liabilities (Tables)	6 Months Ended
	Sep. 30, 2013
Accrued Liabilities Tables	'
Accrued Liabilities	'
		9/30/13		3/31/13
		(Unaudited)
	Accrued operations payable	$	5,137,000	$	2,933,000
	Accrued compensation		405,000		429,000
	Accrued income tax payable and other		307,000		213,000
	Short-term asset retirement obligation		303,000		296,000
	Revenue and production taxes payable		97,000		100,000
	Total accrued liabilities	$	6,249,000	$	3,971,000

4_Oil_And_Gas_Properties_Table

4. Oil And Gas Properties (Tables)	6 Months Ended
	Sep. 30, 2013
Oil And Gas Properties Tables	'
Oil and Gas Properties	'
		9/30/13			3/31/13
		(Unaudited)
	Proved properties	$	63,274,000		$	53,265,000
	Unproved properties		1,860,000			2,156,000
	Less accumulated depletion and impairment		(29,439,000	)		(27,729,000	)
	Total Oil and Gas Properties	$	35,695,000		$	27,692,000

6_Income_Tax_Tables

6. Income Tax (Tables)	6 Months Ended
	Sep. 30, 2013
Income Tax Tables	'
Provision for income tax	'
		Three Months Ended						Six Months Ended
		September 30,						September 30,
		2013			2012			2013			2012
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	Current:
	Federal	$	35,000		$	12,000		$	55,000		$	23,000
	State		8,000			2,000			15,000			3,000
	Total current income tax		43,000			14,000			70,000			26,000
	Deferred:
	Federal		342,000			73,000			475,000			69,000
	State		20,000			5,000			28,000			5,000
	Total deferred income tax		362,000			78,000			503,000			74,000
	Income tax expense	$	405,000		$	92,000		$	573,000		$	100,000
Reconciliation between the income tax provision at the statutory rate on income tax and the income tax provision	'
		Three Months Ended						Six Months Ended
		September 30,						September 30,
		2013			2012			2013			2012
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	Federal tax at statutory rate	$	555,000		$	197,000		$	847,000		$	291,000
	State taxes, net of federal benefit		23,000			7,000			32,000			7,000
	Excess percentage depletion		(175,000	)		(114,000	)		(310,000	)		(207,000	)
	Other adjustments, net		2,000			2,000			4,000			9,000
	Income tax expense	$	405,000		$	92,000		$	573,000		$	100,000
	Effective rate expressed as a percentage		24.9	%		15.9	%		23	%		11.7	%
	of income before income tax
Net deferred tax assets and liabilities	'
		September 30,			March 31,
		2013			2013
		(Unaudited)
	Deferred tax assets:
	Statutory depletion carry-forward	$	1,689,000		$	1,467,000
	Other accruals		80,000			131,000
	Allowance for doubtful accounts		14,000			14,000
	Gross deferred tax assets		1,783,000			1,612,000
	Deferred tax liabilities:
	Depletion, depreciation and intangible drilling costs		(5,257,000	)		(4,583,000	)
	Gross deferred tax liabilities		(5,257,000	)		(4,583,000	)
	Deferred tax liabilities, net	$	(3,474,000	)	$	(2,971,000	)

2_Other_Assets_Details

2. Other Assets (Details) (USD $)	Sep. 30, 2013	Mar. 31, 2013
Other Assets Details	'	'
Lease and well equipment inventory	$371,000	$371,000
Drilling and completion cost prepayments	155,000	210,000
Other current assets	107,000	33,000
Prepaid insurance premiums	43,000	88,000
Prepaid income tax	40,000	112,000
Total other current assets	$716,000	$814,000

3_Accrued_Liabilities_Details

3. Accrued Liabilities (Details) (USD $)	Sep. 30, 2013	Mar. 31, 2013
Accrued Liabilities Details	'	'
Accrued operations payable	$5,137,000	$2,933,000
Accrued compensation	405,000	429,000
Accrued income tax payable and other	307,000	213,000
Short term asset retirement obligation	303,000	296,000
Revenue and production taxes payable	97,000	100,000
Total accrued liabilities	$6,249,000	$3,971,000

4_Oil_and_Gas_Properties_Detai

4. Oil and Gas Properties (Details) (USD $)	Sep. 30, 2013	Mar. 31, 2013
Oil And Gas Properties Details	'	'
Proved properties	$63,274,000	$53,265,000
Unproved properties	1,860,000	2,156,000
Less accumulated depletion and impairment	-29,439,000	-27,729,000
Total Oil and Gas Properties	$35,695,000	$27,692,000

6_Income_Tax_Details

6. Income Tax (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Current:	'	'	'	'
Federal	$35,000	$12,000	$55,000	$23,000
State	8,000	2,000	15,000	3,000
Total current income tax	43,000	14,000	70,000	26,000
Deferred:	'	'	'	'
Federal	342,000	73,000	475,000	69,000
State	20,000	5,000	28,000	5,000
Total deferred income tax	362,000	78,000	503,000	74,000
Income tax expense	$405,000	$92,000	$573,000	$100,000

6_Income_Tax_Details_1

6. Income Tax (Details 1) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Details 1	'	'	'	'
Federal tax at statutory rate	$555,000	$197,000	$847,000	$291,000
State taxes, net of federal benefit	23,000	7,000	32,000	7,000
Excess percentage depletion	-175,000	-114,000	-310,000	-207,000
Other adjustments, net	2,000	2,000	4,000	9,000
Income tax expense	$405,000	$92,000	$573,000	$100,000
Effective rate expressed as a percentage of income before income tax	24.90%	15.59%	23.00%	11.70%

6_Income_Tax_Details_2

6. Income Tax (Details 2) (USD $)	Sep. 30, 2013	Mar. 31, 2013
Deferred tax assets:	'	'
Statutory depletion carry-forward	$1,689,000	$1,467,000
Other accruals	80,000	131,000
Allowance for doubtful accounts	14,000	14,000
Gross deferred tax assets	1,783,000	1,612,000
Deferred tax liabilities:	'	'
Depletion, depreciation and intangible drilling costs	-5,257,000	-4,583,000
Gross deferred tax liabilities	-5,257,000	-4,583,000
Deferred tax liabilities, net	($3,474,000)	($2,971,000)

6_Income_Tax_Details_Narrative

6. Income Tax (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Details Narrative	'	'	'	'
Pre tax income	$1,629,000	$578,000	$2,490,000	$856,000