Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 25, 2016 | Jun. 30, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | PEDEVCO CORP | ||
Entity Central Index Key | 1,141,197 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
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 | 46,986,497 | ||
Entity Public Float | $ 16,171 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 1,138 | $ 6,675 |
Accounts receivable | 406 | 0 |
Accounts receivable - oil and gas | 208 | 602 |
Accounts receivable - related party | 19 | 58 |
Deferred financing costs | 2,890 | 2,208 |
Deferred financing costs - related party | 102 | 0 |
Prepaid expenses and other current assets | 150 | 81 |
Total current assets | 4,913 | 9,624 |
Oil and gas properties: | ||
Oil and gas properties, subject to amortization, net | 58,767 | 19,850 |
Oil and gas properties, not subject to amortization, net | 0 | 2,205 |
Total oil and gas properties, net | 58,767 | 22,055 |
Deferred financing costs | 850 | 3,609 |
Deferred financing costs - related party | 34 | 0 |
Note receivable | 0 | 6,363 |
Other assets | 85 | 85 |
Investments - cost method | 4 | 4 |
Total assets | 64,653 | 41,740 |
Current liabilities: | ||
Accounts payable | 3,380 | 8,650 |
Accrued expenses | 2,178 | 1,551 |
Accrued expenses - related party | 187 | 1,353 |
Revenue payable | 475 | 747 |
Advances from joint interest owners | 0 | 657 |
Convertible - notes payable - Bridge Notes, net of premiums of $113,000 and $132,000, respectively | 588 | 687 |
Notes payable. - related party | 0 | 6,170 |
Notes payable - Secured Promissory Notes, net of discounts of $5,764,000 and $4,652,000, respectively | 625 | 526 |
Notes payable - Secured Promissory Notes - related party, net of discounts of $757,000 and $0, respectively | 134 | 0 |
Total current liabilities | 7,567 | 20,341 |
Long-term liabilities: | ||
Notes payable - Secured Promissory Notes, net of discounts of $1,161,000 and $7,674,000, respectively | 23,160 | 22,733 |
Notes payable - Secured Promissory Notes - related party, net of discounts of $243,000 and $0, respectively | 4,857 | 0 |
Notes payable - Subordinated - related party | 8,918 | 0 |
Notes payable - other | 4,925 | 0 |
Asset retirement obligations | 189 | 89 |
Total liabilities | $ 49,616 | $ 43,163 |
Commitments and contingencies | ||
Shareholders' equity (deficit): | ||
Series A convertible preferred stock, $0.001 par value, 100,000,000 shares authorized, 66,625 and -0- shares issued and outstanding at December 31, 2015 and 2014, respectively | $ 0 | $ 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized; 45,236,497 and 33,117,516 shares issued and outstanding at December 31, 2015 and 2014, respectively | 45 | 33 |
Additional paid-in-capital | 97,163 | 59,395 |
Accumulated deficit | (82,112) | (60,796) |
Non-controlling interests | (59) | (55) |
Total shareholders' equity (deficit) | 15,037 | (1,423) |
Total liabilities and shareholders' equity (deficit) | $ 64,653 | $ 41,740 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current liabilities: | ||
Premium on Convertible notes payable - Bridge Notes | $ 113 | $ 132 |
Discount on Notes payable - Secured Promissory Notes | 5,764 | 4,652 |
Discount on notes payable, related party | 757 | 0 |
Long-term liabilities: | ||
Discount on Notes payable - Secured Promissory Notes | 1,161 | 7,674 |
Discount on notes payable | $ 243 | $ 0 |
Stockholders' equity (deficit): | ||
Series A convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Series A convertible preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Series A convertible preferred stock, shares issued | 66,625 | 0 |
Series A convertible preferred stock, shares outstanding | 66,625 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 45,236,497 | 33,117,516 |
Common stock, shares outstanding | 45,236,497 | 33,117,516 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | ||
Oil and gas sales | $ 5,326 | $ 4,812 |
Operating expenses: | ||
Lease operating costs | 1,830 | 1,674 |
Exploration expense | 701 | 1,306 |
Selling, general and administrative expense | 6,962 | 8,712 |
Impairment of oil and gas properties | 1,337 | 5,416 |
Depreciation, depletion, amortization and accretion | 5,145 | 954 |
Loss on settlement of payables | 0 | 39 |
Total operating expenses | 15,975 | 18,101 |
Gain (loss) on sale of oil and gas properties | 526 | (5,366) |
Gain (loss) on sale of equity investment | 566 | (1,028) |
Loss on sale of deposit for business acquisition | 0 | (1,945) |
Loss from equity method investments | (91) | (544) |
Operating Loss | (9,648) | (22,172) |
Other income (expense): | ||
Interest expense | (13,904) | (9,859) |
Interest income | 40 | 281 |
Gain (loss) on debt extinguishment | 2,192 | (823) |
Total other expense | (11,672) | (10,401) |
Net loss | (21,320) | (32,573) |
Less: net loss attributable to non-controlling interests | (4) | (2,699) |
Net loss attributable to PEDEVCO common shareholders | $ (21,316) | $ (29,874) |
Net loss per common share: | ||
Basic and diluted | $ (0.51) | $ (1.06) |
Weighted average number of common shares outstanding: | ||
Basic and diluted | 41,533,800 | 28,244,096 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Series A Convertible Preferred Stock | Common Stock | Additional Paid in Capital | Stock Subscriptions Receivable | Accumulated Deficit | Non-controlling Interests | Total |
Beginning Balance, Amount at Dec. 31, 2013 | $ 26 | $ 51,783 | $ (10,000) | $ (30,922) | $ 10,887 | ||
Beginning Balance, Shares at Dec. 31, 2013 | 26,121,062 | ||||||
Issuance of common stock for cash, Amount | $ 7 | 8,356 | 8,363 | ||||
Issuance of common stock for cash, Shares | 6,762,234 | ||||||
Issuance of common stock for settlement of liabilities, Amount | 570 | 570 | |||||
Issuance of common stock for settlement of liabilities, Shares | 208,676 | ||||||
Stock-based compensation expense, Amount | 4,306 | 4,306 | |||||
Stock-based compensation expense, Shares | 139,500 | ||||||
Issuance of common stock to Bridge Note holders for debt conversion, Amount | $ 1 | 2,240 | $ 2,241 | ||||
Issuance of common stock to Bridge Note holders for debt conversion, Shares | 1,452,595 | ||||||
Recission of common stock issued in private placement, Amount | $ (3) | (9,997) | $ 10,000 | ||||
Recission of common stock issued in private placement, Shares | (3,333,333) | ||||||
Exercise of options for cash, Amount | $ 5 | $ 5 | |||||
Exercise of options for cash, Shares | 20,000 | ||||||
Cashless exercise of options, Amount | |||||||
Cashless exercise of options, Shares | 4,453 | ||||||
Cashless exercise of warrants, Amount | |||||||
Cashless exercise of warrants, Shares | 58,329 | ||||||
Issuance of restricted common stock for services, Amount | $ 2 | $ (2) | |||||
Issuance of restricted common stock for services, Shares | 1,684,000 | ||||||
Warrants issued to placement agent related to senior notes, Amount | 1,520 | $ 1,520 | |||||
Beneficial conversion feature | 211 | 211 | |||||
Amendment of bridge note to convertible note | 74 | 74 | |||||
Debt discount related to warrants issued to bridge note holders | $ 329 | 329 | |||||
Sale of equity investment | $ 2,644 | 2,644 | |||||
Net loss | $ (29,874) | (2,699) | (32,573) | ||||
Ending Balance, Amount at Dec. 31, 2014 | $ 33 | $ 59,395 | $ (60,796) | $ (55) | (1,423) | ||
Ending Balance, Shares at Dec. 31, 2014 | 33,117,516 | ||||||
Issuance of common stock for cash, Amount | $ 7 | 2,773 | 2,780 | ||||
Issuance of common stock for cash, Shares | 6,366,197 | ||||||
Stock-based compensation expense, Amount | 3,602 | 3,602 | |||||
Stock-based compensation expense, Shares | 390,000 | ||||||
Issuance of common stock to Bridge Note holders for debt conversion, Amount | $ 102 | $ 102 | |||||
Issuance of common stock to Bridge Note holders for debt conversion, Shares | 165,431 | ||||||
Cashless exercise of options, Amount | |||||||
Cashless exercise of options, Shares | 19,445 | ||||||
Issuance of restricted common stock for services, Amount | $ 2 | $ (2) | |||||
Issuance of restricted common stock for services, Shares | 1,816,408 | ||||||
Forfeiture of restricted stock, Amount | |||||||
Forfeiture of restricted stock, shares | (13,500) | ||||||
Issuance of common and preferred stock for oil and gas properties, Amount | $ 3 | $ 31,133 | $ 31,136 | ||||
Issuance of common and preferred stock for oil and gas properties, Shares | 66,625 | 3,375,000 | |||||
Issuance of warrants for debt deferrals | 160 | 160 | |||||
Net loss | $ (21,316) | $ (4) | (21,320) | ||||
Ending Balance, Amount at Dec. 31, 2015 | $ 45 | $ 97,163 | $ (82,112) | $ (59) | $ 15,037 | ||
Ending Balance, Shares at Dec. 31, 2015 | 66,625 | 45,236,497 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (21,316) | $ (29,874) |
Net loss attributable to non-controlling interests | (4) | (2,699) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 3,602 | 4,306 |
Impairment of oil and gas properties | 1,337 | 5,416 |
Depreciation, depletion, amortization and accretion | 5,144 | 954 |
Loss on settlement of payables | 0 | 39 |
(Gain) loss on sale of oil and gas properties | (525) | 5,366 |
(Gain) loss on sale of equity investment | (566) | 1,028 |
Loss on sale of 50% of the deposit for business acquisition | 0 | 1,945 |
Loss from equity method investments | 91 | 544 |
Interest expense deferred and capitalized in restructuring | 2,528 | 0 |
Amortization of debt discount | 4,418 | 3,375 |
Amortization of deferred financing costs | 2,101 | 1,411 |
(Gain) loss on debt extinguishment | (2,192) | 823 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (156) | 0 |
Accounts receivable - oil and gas | 2,051 | 169 |
Accounts receivable - oil and gas - related party | 21 | 26 |
Accounts receivable - related party | 39 | 21 |
Inventory | 0 | 396 |
Prepaid expenses and other current assets | (69) | (8) |
Accounts payable | (4,050) | 586 |
Accounts payable - related party | 0 | (463) |
Accrued expenses | 630 | 695 |
Accrued expenses - related parties | 227 | 401 |
Revenue payable | (272) | 19 |
Advances for joint operations | (657) | 657 |
Net cash used in operating activities | (7,619) | (4,867) |
Cash Flows From Investing Activities: | ||
Cash paid for oil and gas properties | 0 | (28,571) |
Cash paid for drilling costs | (235) | (1,320) |
Proceeds from sale of equity investment | 500 | 1,615 |
Proceeds from sale of oil and gas properties | 0 | 8,798 |
Proceeds from sale of deposit | 0 | 3,055 |
Proceeds from notes receivable | 0 | 467 |
Proceeds from disposition of White Hawk | 0 | 2,718 |
Cash paid for asset retirement bond | 0 | (86) |
Issuance of notes receivable - related parties | 0 | (2,374) |
Cash paid for unproved leasehold costs | 0 | (379) |
Net cash provided by (used in) investing activities | 265 | (16,077) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of common stock, net of offering costs | 2,780 | 8,363 |
Proceeds from exercise of warrants and options | 0 | 5 |
Proceeds from notes payable | 0 | 21,226 |
Cash paid for deferred financing costs | 0 | (5,658) |
Repayment of notes payable | (863) | 0 |
Repayment of notes payable - related party | (100) | 0 |
Repayment of Secured Promissory Notes | 0 | (2,530) |
Repayment of paid-in-kind obligations | 0 | (400) |
Net cash provided by financing activities | 1,817 | 21,006 |
Net (decrease) increase in cash | (5,537) | 62 |
Cash at beginning of period | 6,675 | 6,613 |
Cash at end of period | 1,138 | 6,675 |
Cash paid for: | ||
Interest | 5,077 | 4,196 |
Income taxes | 0 | 0 |
Noncash investing and financing activities: | ||
Accrued development costs | 3,851 | 6,406 |
Issuance of restricted common stock for services upon vesting maturity | 0 | 2 |
Issuance of common stock in settlement of liabilities | 0 | 570 |
Issuance of common stock to Bridge Note holders due to conversion | 102 | 2,241 |
Rescission of common stock issued in private placement | 0 | 10,000 |
Deferred financing costs related to warrants issued in conjunction with notes payable | 0 | 1,520 |
Reclass of notes payable - Bridge Notes to convertible notes | 0 | 2,375 |
Consolidation of non-controlling interest in PEDCO MSL | 0 | 2,644 |
Reclass of deposit for business acquisitions to notes receivable | 0 | 5,000 |
Beneficial conversion feature of convertible - notes payable - Bridge Notes | 0 | 285 |
Reclass of notes payable - related parties to - Bridge Notes | 0 | 525 |
Debt discount related to the warrants issued to Bridge Notes | 0 | 329 |
Changes in estimates of asset retirement obligations | 24 | 23 |
Accounts receivable from purchase of oil and gas property | 1,678 | 0 |
Accounts payable from purchase of oil and gas property | 751 | 0 |
Note receivable sold for purchase of oil and gas properties | 5,000 | 0 |
Notes payable - Subordinated assumed as part of purchase of oil and gas properties | 8,353 | 0 |
Issuance of Redeemable Series A Convertible Preferred Stock for purchase of oil and gas properties | 28,402 | 0 |
Issuance of common stock for purchase of oil and gas properties | 2,734 | 0 |
Sale of oil and gas properties for promisory note | 4,101 | 0 |
Issuance of warrants for deferred financing costs | $ 160 | $ 0 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 12 Months Ended |
Dec. 31, 2014 | |
Statement of Cash Flows [Abstract] | |
Loss on conveyance Percentage of the deposit for business acquisition | 50.00% |
1. BASIS OF PRESENTATION
1. BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 BASIS OF PRESENTATION The accompanying consolidated financial statements of PEDEVCO CORP. (PEDEVCO or the Company), have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the rules of the Securities and Exchange Commission (SEC). |
2. DESCRIPTION OF BUSINESS
2. DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 2 DESCRIPTION OF BUSINESS PEDEVCOs primary business plan is engaging in the acquisition, exploration, development and production of oil and natural gas shale plays in the United States, with a secondary focus on conventional oil and natural gas plays. The Companys principal operating properties are located in the Wattenberg, Wattenberg Extension, and Niobrara formation in the Denver-Julesburg Basin (the D-J Basin) in Weld County, Colorado, all of which properties are owned by the Company through its wholly-owned subsidiary, Red Hawk Petroleum, LLC (Red Hawk). The Company plans to focus on the development of shale oil and gas assets held by the Company in the U.S., including its oil and gas working interests in the Wattenberg and Wattenberg Extension in the D-J Basin (the D-J Basin Asset), which the Company acquired in March 2014 from Continental Resources, Inc. (Continental and the Continental Acquisition). Additionally, with the acquisition of additional oil and gas working interests in February 2015 from Golden Globe Energy (US), LLC (GGE) (the GGE Acquisition), the Company has significantly increased the working interests owned by the Company in the D-J Basin Asset. See Note 5. The Company previously owned a 20% interest in Condor Energy Technology, LLC (Condor). Condors operations consisted primarily of working interests in oil and gas leases in the Niobrara shale formation located in the D-J Basin in Weld County, Colorado. The remaining interest in Condor is owned by an affiliate of MIE Holdings Corporation (MIE Holdings, Hong Kong Stock Exchange code: 1555.HK). MIE Holdings is one of the largest independent upstream onshore oil companies in China. In addition, the Company made a direct investment into the drilling and completion of the first three wells that Condor drilled and completed. In February 2015, the Company divested its interest in Condor and the wells in which it had a direct working interest. See Note 9. As of December 31, 2013, the Company owned a 100% interest in White Hawk Petroleum, LLC (White Hawk Petroleum) and accounted for White Hawk Petroleum as a consolidated subsidiary of the Company. White Hawk Petroleums operations consisted primarily of working interests in oil and gas leases in the Eagle Ford shale formation in McMullen County, Texas. On February 19, 2014, White Hawk Petroleum sold its remaining interests in the Eagle Ford Shale play for net proceeds of $2,718,000. See Note 5. The Company plans to seek additional oil and gas asset acquisition opportunities in the U.S. through utilizing its strategic relationships and technologies that may provide the Company a competitive advantage in accessing and exploring such assets. Some or all of these assets may be acquired by existing subsidiaries or equity investees, or other entities that may be formed at a future date. |
3. SUMMARY OF SIGNIFICANT ACCOU
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation. Equity Method Accounting for Joint Ventures The Company evaluated its relationship with Condor to determine if it qualified as a variable interest entity (VIE), as defined in ASC 810-10, and whether the Company was the primary beneficiary, in which case consolidation would be required. The Company determined that Condor qualified as a VIE, but since the Company was not the primary beneficiary of Condor, the Company concluded that consolidation was not required during 2014 for Condor. In February 2015, the Company divested its interest in Condor. See Note 9. Non-Controlling Interests. Use of Estimates in Financial Statement Preparation. Cash and Cash Equivalents. Concentrations of Credit Risk. Sales to two customers comprised 64% and 21% of the Companys total oil and gas revenues for the year ended December 31, 2015. Sales to one customer comprised 40% of the Companys total oil and gas revenues for the year ended December 31, 2014. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Companys production, there are a substantial number of alternative buyers for its production at comparable prices. Accounts Receivable. Equipment. Oil and Gas Properties, Successful Efforts Method. Exploratory wells in areas not requiring major capital expenditures are evaluated for economic viability within one year of completion of drilling. The related well costs are expensed as dry holes if it is determined that such economic viability is not attained. Otherwise, the related well costs are reclassified to oil and gas properties and subject to impairment review. For exploratory wells that are found to have economically viable reserves in areas where major capital expenditure will be required before production can commence, the related well costs remain capitalized only if additional drilling is under way or firmly planned. Otherwise the related well costs are expensed as dry holes. Exploration and evaluation expenditures incurred subsequent to the acquisition of an exploration asset in a business combination are accounted for in accordance with the policy outlined above. Depreciation, depletion and amortization of capitalized oil and gas properties is calculated on a field by field basis using the unit of production method. Lease acquisition costs are amortized over the total estimated proved developed and undeveloped reserves and all other capitalized costs are amortized over proved developed reserves. Impairment of Long-Lived Assets. Asset Retirement Obligations. The following table describes changes in our asset retirement obligations during the years ended December 31, 2015 and 2014 (in thousands): 2015 2014 Asset retirement obligations at January 1, $ 89 $ 76 Accretion expense 40 17 Obligations incurred for acquisition 87 105 Obligations settled - assets sold (3) (132) Changes in estimates (24) 23 Asset retirement obligations at December 31, $ 189 $ 89 Deferred Financing Costs. Revenue Recognition. Income Taxes. Stock-Based Compensation. Loss per Common Share. Fair Value of Financial Instruments. Fair Value Measurement As defined in ASC 820, fair value, clarified as an exit price, represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, ASC 820 defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Recently Issued Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and have not yet determined the method by which the Company will adopt the standard in 2017. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 amends previous guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company expects that the affected amounts on its balance sheets will be reclassified within the balance sheets upon adoption of this ASU to conform to this standard. The Company expects to adopt this ASU during the first quarter of 2016 and does not expect that the adoption of this ASU will have a material impact on its financial statements. Subsequent Events. |
4. GOING CONCERN
4. GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 4 GOING CONCERN The realization of the Companys assets and satisfaction of its liabilities is contingent on the completion of a financing. The Company anticipates that it will need approximately $25 million to execute its current business plan and is currently in the later stages of consummating the necessary financing. In the event that the Company is unable to complete the financing currently under consideration, and is otherwise unable to replace such financing on a timely basis, it would materially affect the Companys ability to continue as a going concern. If such financing is not completed, among other things, the Company expects that it would incur an impairment of its oil and gas properties of approximately $26 - $32 million and the Companys ability to meet its obligations from existing cash flows would be significantly affected. If the Company would be required to seek financing from other sources, such financings may not be available or, if available, may not be on terms acceptable to the Company. Accordingly, the financial statements do not include any adjustments related to the recoverability of assets or classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to raise capital to meet its obligations and develop its oil and gas properties to attain profitable operations. |
5. OIL AND GAS PROPERTIES
5. OIL AND GAS PROPERTIES | 12 Months Ended |
Dec. 31, 2015 | |
Extractive Industries [Abstract] | |
OIL AND GAS PROPERTIES | NOTE 5 OIL AND GAS PROPERTIES The following tables summarize the Companys oil and gas activities by classification for the years ended December 31, 2015 and 2014 (in thousands): January 1, 2015 Additions Disposals Transfers December 31, 2015 Oil and gas properties subject to amortization $ 24,057 $ 47,561 $ (7,252 ) $ 289 $ 64,655 Oil and gas properties not subject to amortization 8,159 - (7,870 ) (289 ) - Asset retirement costs 76 63 (2 ) - 137 Accumulated depreciation, depletion and impairment (10,237 ) (6,441 ) 10,653 - (6,025 ) Total oil and gas properties, net $ 22,055 $ 41,183 $ (4,471 ) $ - $ 58,767 January 1, 2014 Additions Disposals Transfers December 31, 2014 Oil and gas properties subject to amortization $ 6,314 $ 33,716 $ (15,973 ) $ - $ 24,057 Oil and gas properties not subject to amortization 7,167 3,073 (2,081 ) - 8,159 Asset retirement costs 28 128 (80 ) - 76 Accumulated depreciation, depletion and impairment (4,706 ) (6,353 ) 822 - (10,237 ) Total oil and gas properties, net $ 8,803 $ 30,564 $ (17,312 ) $ - $ 22,055 The depletion recorded for production on properties subject to amortization for the years ended December 31, 2015 and 2014 amounted to $5,104,000 and $937,000, respectively. The Company recorded impairment of leases for the years ended December 31, 2015 and 2014 of $1,337,000 and $5,416,000, respectively, for lease acreage that expired during the year due to non-renewals or non-utilization of leases. The Company did not record any impairment of properties subject to amortization for the years ended December 31, 2015 and 2014. During the year ended December 31, 2015, additions to oil and gas properties subject to amortization consisted of completion costs of $235,000 primarily related to the operated wells in the D-J Basin, and the acquisition of approximately 12,977 net acres of oil and gas properties and interests in 53 gross wells located in the Denver-Julesburg Basin, Colorado from GGE in February 2015 valued at $43,562,000 (see below for more details). In addition, $3,851,000 of non-operating well costs were incurred on eight wells drilled by third party operators during the year ended December 31, 2015. Upon completion of the three Loomis wells, the Company assessed its unproved properties, and determined that $289,000 of costs had been proved through these drilling operations. As a result, the Company reclassified these costs to proved property as of December 31, 2015. On November 19, 2015, the Company entered into a Letter Agreement with Dome Energy, Inc. (Dome Energy) pursuant to which Dome Energy agreed to fully fund the Companys proportionate share of all the working interest owner expenses with respect to these eight wells. The Company assigned its interests in these wells to Dome Energy effective November 18, 2015. Dome Energy agreed to assume the current amounts owed for the drilling and completion costs of $3,851,000 and to pay an additional $250,000 to the Company in the event the anticipated merger with Dome Energy was not consummated. In connection with the assignment of these well interests to Dome Energy, Dome Energy has issued a contingent promissory note to the Company, dated November 19, 2015 (the Dome Promissory Note During the year ended December 31, 2014, additions to oil and gas properties subject to amortization consisted primarily of acquisition costs related to the Continental Acquisition (defined below) of $28,628,000, drilling and completion costs for operated properties of $2,110,000, $1,906,000 and $1,890,000 for the Loomis 2-1H, Loomis 2-3H and Loomis 2-6H wells, respectively, and drilling and completions costs for 4 wells on non-operated properties of $2,360,000. Acquisition of Properties from Continental Resources, Inc. On January 21, 2014, Red Hawk Petroleum, LLC (Red Hawk) entered into a Purchase and Sale Agreement (Purchase Agreement) with Continental Resources, Inc. (Continental), pursuant to which the Company agreed to acquire Continentals interests (the Continental Acquisition) in oil and gas properties and interests in wells located in the Niobrara formation of the DJ Basin, Colorado, for $30 million in cash (subject to customary post-closing adjustments). The Company paid $1.5 million of the purchase price as a deposit upon entering into the Purchase Agreement (the Deposit). The final purchase price after adjustments was $28,571,000, resulting in $26,991,000 due to Continental after applying the Deposit (the Final Purchase Price). On March 7, 2014, the Company completed the Continental Acquisition and used a portion of funds from the initial closing of a $50 million financing facility with RJ Credit LLC (RJC) and other lenders of which $34.5 million was borrowed initially to pay the Final Purchase Price to acquire Continentals properties. As described below, the Note Purchase Agreement further required that the Company convey 50% of the lease acreage and working interests acquired from Continental to GGE as additional consideration for the financing. The following table summarizes the allocation of the purchase price to the net assets acquired (in thousands): Fair value at March 7, 2014 Accounts receivable oil and gas $ 483 Inventory 396 Oil and gas properties, subject to amortization 25,934 Oil and gas properties, not subject to amortization 2,694 Total assets 29,507 Current liabilities (831 ) Asset retirement obligations (105 ) Total liabilities (936 ) Final purchase price $ 28,571 Mississippian Asset On March 7, 2014, the Company completed a series of transactions whereby we sold 50% of the Mississippian Asset to GGE (defined below), with GGE becoming a 50% owner of PEDCO MSL, and with us then owning an average 49% working interest in the Mississippian Asset covering an aggregate of approximately 7,006 gross (3,443 net) acres. Pursuant to the provisions of the term assignment agreement, the Company was required to drill and complete three horizontal wells by December 29, 2014 in order to continue to hold the acreage. However, due to falling oil prices and mixed results from horizontal well operations reported by other operators in the Mississippian play, we had not yet spudded any wells on the Mississippian Asset as of December 29, 2014, and in mid-December we approached Berexco LLC to request terms for an extension of the term assignment, with negotiations between the parties following. On March 26, 2015, the Company determined to discontinue negotiations with Berexco LLC regarding the extension of the term assignment. The term assignment expired effective December 29, 2014 and the Company impaired the Mississippian Asset in full in the fourth quarter of 2014. Acquisition of Properties from Golden Globe Energy (US) LLC (GGE). On February 23, 2015 (the Closing), the Companys wholly-owned subsidiary, Red Hawk, completed the acquisition of approximately 12,977 net acres of oil and gas properties and interests in 53 gross wells located in the Denver-Julesburg Basin, Colorado (the GGE Acquired Assets) from GGE. As consideration for the acquisition of the GGE Acquired Assets, the Company (i) issued to GGE 3,375,000 restricted shares of the Companys common stock and 66,625 restricted shares of the Companys newly-designated Amended and Restated Series A Convertible Preferred Stock (the Series A Preferred) (see Note 12), (ii) assumed approximately $8.35 million of subordinated notes payable from GGE pursuant to an Assumption and Consent Agreement and an Amendment to Note and Security Agreement (see other Notes for more details), and (iii) provided GGE with a one-year option to acquire the Companys interest in its Kazakhstan opportunity for $100,000 payable upon exercise of the option pursuant to a Call Option Agreement. The effective date of the transaction was January 1, 2015, with the exception of all revenues and refunds attributable to GGEs approximate 49.7% interest in each of the Loomis 2-1H, Loomis 2-3H and Loomis 2-6H wells, which revenues and refunds the Company owns from the date of first production, which totaled approximately $700,000. The following tables summarize the purchase price and allocation of the purchase price to the net assets acquired (in thousands): Purchase price on February 23, 2015 Fair value of common stock issued $ 2,734 Fair value of Series A Preferred stock issued 28,402 Assumption of subordinated notes payable 8,353 Kazakhstan option issued 5,000 Total purchase price $ 44,489 Fair value of net assets at February 23, 2015 Accounts receivable oil and gas $ 1,578 Oil and gas properties, subject to amortization 43,562 Prepaid expenses and other assets 100 Total assets 45,240 Accounts payable (664) Asset retirement obligations (87) Total liabilities (751) Net assets acquired $ 44,489 The following table presents the Companys supplemental consolidated pro forma total revenues, lease operating costs, net income (loss) and net loss per common share as if the GGE Acquisition completed in February 2015 had occurred on January 1, 2015 and the acquisition of D-J Basin Assets completed in March 2014 from Continental and simultaneous dispositions had occurred on January 1, 2014 (in thousands, except per share amounts). For the Year Ended December 31, 2015 PEDEVCO Net Acquisitions/Dispositions Pro Forma Combined Revenue $ 5,326 $ 780 $ 6,106 Lease operating costs $ (1,830 ) $ (275 ) $ (2,105 ) Net income (loss) $ (20,484 ) $ 505 $ (19,979 ) Net income (loss) per common share $ (0.49 ) $ 0.01 $ (0.48 ) For the Year Ended December 31, 2014 PEDEVCO Net Acquisitions/Dispositions Pro Forma Combined Revenue $ 4.812 $ 1,102 $ 5,914 Lease operating costs $ (1,674 ) $ (376 ) $ (2,050 ) Net income (loss) $ (29,874 ) $ 433 $ (29,441 ) Net income (loss) per common share $ (1.06 ) $ 0.02 $ (1.04 ) Disposition of Oil and Gas Properties 2014 Dispositions In connection with the GGE financing, the Company sold 50% of its interests in the assets acquired in the Continental Acquisition and 50% of its pending interest in Asia Sixth Energy Resources Limited (Asia Sixth). The Company allocated the proceeds from the financing between the debt obligation and the sale of the properties on a relative fair value basis. See Note 7. On February 19, 2014, White Hawk closed a Purchase and Sales Agreement (the Sale Agreement) with Millennial PDP Fund IV, LP (Millennial), pursuant to which White Hawk sold its remaining interests in the Eagle Ford Shale formation to Millennial for net cash proceeds of $2,718,000, and recognized a gain of $159,000 for the year ended December 31, 2014, including the receipt of $251,000 in May 2014. In March 2014, the Company acquired oil and gas properties from Continental. The Company entered into a note purchase agreement with certain lenders including RJ Credit LLC (RJ Credit) to finance the acquisition. As a part of this agreement, the Company conveyed 50% of its note receivable with Asia Sixth (described in more detail in other Notes), 50% of its interest in the oil and gas properties acquired, and a 50% interest in Pacific Energy Development MSL, LLC. The following table presents the loss on sale to RJ Credit associated with each of these items (in thousands): Allocated Proceeds Historical Cost Loss on Sale Note receivable $ 3,055 $ 5,000 $ (1,945 ) Oil and gas properties $ 8,707 $ 14,226 $ (5,519 ) Mississippian Asset $ 1,615 $ 2,643 $ (1,028 ) In addition, on September 29, 2014, the Company sold its remaining right, title and interest in its non-core North Sugar Valley asset in Matagorda County, Texas, to Sun Resources Texas Inc. for net cash proceeds of $50,000 and the Company recognized a corresponding loss on sale of oil and gas properties of $6,000 during the year ended December 31, 2014. The following table summarizes the net loss on sale of oil and gas properties for the year ended December 31, 2014 (in thousands): Allocated Proceeds Historical Cost Gain (Loss) on Sale Wattenberg Asset $ 8,707 $ 14,226 $ (5,519 ) North Sugar Valley Asset 50 56 (6 ) White Hawk Asset 2,718 2,559 159 Total $ 11,475 $ 16,841 $ (5,366 ) 2015 Dispositions In February 2015, the Company sold to MIE Jurassic Energy Corporation (MIEJ), an affiliate of MIE Holdings, all of the direct interests in approximately 945 net acres and interests in three wells owned by the Company with a recorded net book value of $620,000 resulting in a gain on sale of oil and gas properties of $275,000. See Note 9. In November 2015, the Company assigned its interests in eight non-operated wells drilled by third party operators. Dome Energy agreed to assume the current amounts owed for the drilling and completion costs of $3,851,000. |
6. SALE OF 50% OF PACIFIC ENERG
6. SALE OF 50% OF PACIFIC ENERGY DEVELOPMENT MSL, LLC. | 12 Months Ended |
Dec. 31, 2015 | |
Sale Of 50 Of Pacific Energy Development Msl Llc. | |
SALE OF 50% OF PACIFIC ENERGY DEVELOPMENT MSL, LLC. | NOTE 6 SALE OF 50% OF PACIFIC ENERGY DEVELOPMENT MSL, LLC. As of December 31, 2013, the Company owned an average 98% working interest in leases covering the Mississippian Lime in Comanche, Harper, Barber and Kiowa Counties, Kansas. These assets are held by Pacific Energy Development MSL, LLC, a Nevada limited liability company (100% owned by us prior to March 7, 2014). On March 7, 2014, in connection with our acquisition of the Wattenberg Asset, we entered into a $50 million 3-year term debt facility with various investors including RJC. As part of the transaction, GGE (an affiliate of RJC) acquired 50% of our ownership interest in Pacific Energy Development MSL, LLC, which holds our Mississippian Asset, thereby making GGE a 50% working interest partner with us in the development of our Mississippian Asset. The Company allocated the proceeds from the financing between the debt obligation, the sale of the properties and the sale of 50% of MSL on a relative fair value basis. To the extent the sales price attributable to the assets was less than the net book value, the Company recorded a loss on sale of assets. The following table summarizes the loss on this sale (in thousands): Allocated Proceeds Historical Cost Loss on Sale Mississippian Asset $ 1,615 $ 2,643 $ (1,028 ) |
7. DEPOSIT FOR BUSINESS ACQUISI
7. DEPOSIT FOR BUSINESS ACQUISITION | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
DEPOSIT FOR BUSINESS ACQUISITION | NOTE 7 DEPOSIT FOR BUSINESS ACQUISITION On September 11, 2013, the Company entered into a Shares Subscription Agreement (SSA) to acquire an approximate 51% ownership in Asia Sixth Energy Resources Limited (Asia Sixth), which held an approximate 60% ownership interest in Aral Petroleum Capital Limited Partnership (Aral), a Kazakhstan entity. In August 2014 the SSA and related documents were restructured (the Aral Restructuring), in connection with which the Company received a promissory note in the principal amount of $5.0 million from Asia Sixth (the A6 Promissory Note), which would be converted into a 5.0% interest in Caspian Energy, Inc. (Caspian Energy), an Ontario, Canada company listed on the NEX board of the TSX Venture Exchange, upon the consummation of the Aral Restructuring. We entered into an agreement with GGE to convey 50% of our interests in Asia Sixth Energy Resources Limited (Asia Sixth) in connection with the RJ Credit financing. The Company allocated $3,055,000 of the proceeds from the debt financing to the 50% interest in Asia Sixth conveyed to GGE and recorded a loss on sale of $1,945,000. The Aral Restructuring was consummated effective May 20, 2015, upon which date the A6 Promissory Note was converted into 23,182,880 shares of common stock of Caspian Energy. In addition, on the date of conversion of the A6 Promissory Note, Mr. Frank Ingriselli, our Chairman and Chief Executive Officer, was appointed as a non-executive director of Caspian Energy. In connection with our GGE Acquisition, on February 23, 2015, we provided GGE a one-year option to acquire our interest in Caspian Energy, Inc. for $100,000 payable upon exercise of the option recorded in prepaid expenses and other current assets. As a result, the carrying value of the 23,182,880 shares of common stock of Caspian Energy Inc. which were issued upon conversion of the A6 Promissory Note at December 31, 2015 was $-0-. The option provided to GGE was not exercised and has expired, resulting in the Company retaining ownership of the 23,182,880 shares of Caspian Energy, Inc. These shares will be accounted for as marketable securities in the period ending March 31, 2016. |
8. NOTE RECEIVABLE
8. NOTE RECEIVABLE | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
NOTE RECEIVABLE | NOTE 8 NOTE RECEIVABLE Condor Energy Technology, LLC The Company loaned Condor funds for operations pursuant to a promissory note entered into on February 14, 2013, which permitted multiple loans to be made up to $8,000,000 as separate advances. As of December 31, 2014, the balance of the note receivable prior to applying the excess loss from Condor was $6,979,000 plus accrued interest of $121,000 due from Condor. In accordance with ASC 323-10-35, the losses from Condor that exceeded the equity investment of the Company were used to reduce the note receivable balance. If the losses were to exceed the note receivable balance, no additional losses would be recorded for the equity investment. The net receivable balance as of December 31, 2014, after applying the excess loss was $1,363,000. After applying the losses to the equity investment and the note receivable, the Company has unrecorded excess losses of zero as of December 31, 2014. The following table reflects the activity related to the note receivable-related party (in thousands): December 31, December 31, 2015 2014 Note receivable-related party prior to applying excess losses $ 6,979 $ 6,979 Equity change in net loss at 20% applied to note receivable-related party as of December 31, 2013 (5,193) (5,193) Equity change in net loss at 20% for year ended December 31, 2014 (271 ) (271 ) Equity change in net loss at 20% for period from January 1 through February 23, 2015 (91 ) - Previously unrecognized losses for year ended December 31, 2013 (273 ) (273) Interest accrued 160 121 Extinguishment of note receivable with Condor (1,311 ) - Net note receivable $ - $ 1,363 As part of the Settlement Agreement with MIEJ on February 19, 2015, the note receivable were settled in full (see Note 9). White Hawk Petroleum, LLC The Company loaned White Hawk funds for operating expenses and drilling and completion costs for several Eagle Ford wells, pursuant to a promissory note entered into on June 4, 2012, which note permits multiple loans to be made thereunder as separate advances, with no stated maximum limit of loan principal. The note receivable bore interest at a rate per annum equal to the one (1) month LIBOR rate for U.S. dollar deposits plus four (4.0) percentage points. Principal and interest of each loan was due thirty-six (36) months from the date each advance is made under the note, with the first repayment being due on June 4, 2015. As of December 31, 2013, the balance of the note receivable was $1,252,000. As of December 31, 2013, White Hawk became a wholly-owned subsidiary of the Company and this amount was eliminated in consolidation. As a result of the sale of this property in February 2014, the balance of the note receivable was paid in full. |
9. EQUITY METHOD INVESTMENTS
9. EQUITY METHOD INVESTMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | NOTE 9 EQUITY METHOD INVESTMENTS Condor Energy Technology, LLC In October 2011, the Company formed a new subsidiary, Condor Energy Technology LLC (Condor), a limited liability company organized under the laws of the State of Nevada. The Company owned 20% of Condor and a subsidiary of MIE Holdings Corporation (MIE Holdings) owned 80%. The Company accounted for its 20% ownership in Condor using the equity method. The Company evaluated its relationship with Condor to determine if Condor was a variable interest entity (VIE) as defined in ASC 810-10, and whether the Company was the primary beneficiary of Condor, in which case consolidation with the Company would be required. The Company determined that Condor qualified as a VIE, however, the Company concluded that MIE Holdings was the primary beneficiary as a result of being in control of the Board and its ability to control the funding commitments to Condor. Settlement Agreement with MIEJ On February 19, 2015, the Company entered into a Settlement Agreement with MIEJ (the MIEJ Settlement Agreement), the 80% partner in Condor and the lender under the Amended and Restated Secured Subordinated Promissory Note, dated March 25, 2013, in the principal amount of $6,170,065 (the MIEJ Note). The Settlement Agreement and related agreements for the disposition of the Companys interest in Condor contained the following terms: ● The Company and MIEJ entered into a new Amended and Restated Secured Subordinated Promissory Note, dated February 19, 2015 (the New MIEJ Note), with a principal amount of $4.925 million, extinguishing the original MIEJ Note which had a principal amount of $6,070,000 after cash payments of $100,000; ● The Company sold to MIEJ (i) its 20% interest in Condor, and (ii) all of the direct interests in approximately 945 net acres and working interests in three wells separately owned by the Company; ● The Companys employees were removed as officers of Condor, and the Company agreed to assist with Condors accounting and audits and perform joint interest billing accounting for a monthly fee of $55,000 for January 2015, $0 for February 2015, $10,000 for March 2015 and $30,000 per month thereafter, pro-rated for partial months, for up to six months; ● MIEJ paid $500,000 to the Companys Senior Loan Investors (defined below) as a principal reduction on the Companys Senior Loan; ● Condor forgave approximately $1.8 million in previous working interest expenses related to the drilling and completion of certain wells operated by Condor that the Company owed to Condor; ● The Company paid MIEJ $100,000 as a principal reduction under the original MIEJ Note; and ● The parties fully released each other from every claim, demand or cause of action arising on or before February 19, 2015. The net effect of these transactions with MIEJ was to reduce approximately $9.4 million in aggregate liabilities due from the Company to MIEJ and Condor to $4.925 million, which is now the new principal amount of the New MIEJ Note. The following table reflects the activity related to the Companys settlement with MIEJ (in thousands): Items Received by PEDEVCO Extinguishment of accrued liabilities $ 3,280 Extinguishment of original debt with MIE net of cash payments of $100,000 6,070 Proceeds from cash payments made by MIE to RJ Credit and the Agent 500 Total $ 9,850 Items Received by MIEJ Issuance of new MIEJ note $ 4,925 Extinguishment of note receivable with Condor 1,272 Historical cost of oil and gas property sold to Condor 620 Total 6,817 Net gain on settlement $ 3,033 The following table presents the allocation of the gain on settlement with MIEJ described above (in thousands): Allocated Value Historical Cost Gain on Settlement Oil and gas properties $ 895 $ 620 $ 275 Investment in Condor 1,838 1,272 566 Note payable MIEJ 7,117 4,925 2,192 Total $ 9,850 $ 6,817 $ 3,033 The Company recognized a gain on sale of equity investments during the year ended December 31, 2015 in the amount of $566,000. During the year ended December 31, 2014, the Company advanced $2.1 million to Condor. The Company recorded the previously unrecognized loss of $273,000 and its equity share of net loss from Condor of $271,000 for a total recognized loss of $544,000 during the year ended December 31, 2014. The Companys investment in Condor had a balance of $-0- at December 31, 2014 and would not increase until the Companys share of income from Condor exceeded the $5,737,000 valuation allowance applied against the balance of the Companys note receivable to Condor. As of December 31, 2014, the Company had a note receivable of $6,979,000, plus accrued interest of $121,000 due from Condor. As of December 31, 2014, the Company had unrecognized losses of $-0- in excess of its cost basis in Condor. The Company had an agreement to provide management services to Condor for which Condor owed $-0- and $56,000 at December 31, 2015 and 2014, respectively. Total fees billed to Condor were $273,000 for the year ended December 31, 2015, and $397,000 for the year ended December 31, 2104. The Company was subject to recording its 20% proportionate share of Condors income or losses. The Company was obligated to maintain, under the membership agreement of Condor, its proportionate share of capital contributions. Below is summarized financial information for Condor. Summarized balance sheets (in thousands): December 31, 2014 Current assets $ 2,700 Oil and gas properties, net 3,825 Other long term assets 108 Total assets $ 6,633 Current liabilities $ 1,547 Notes payable to affiliates 33,740 Other long-term liabilities 32 Total liabilities 35,319 Members deficit (28,686 ) Total liabilities and members deficit $ 6,633 Summarized statements of operations (in thousands): For the Period from January 1-February 23, 2015 For the Year Ended December 31, 2014 Revenue $ 108 $ 3,096 Operating expenses (368 ) (3,065 ) Operating income (loss) (260 ) 31 Interest expense (195 ) (1,386 ) Net loss $ (455 ) $ (1,355 ) Condor owed the Company $21,000 at December 31, 2014 from production sales related to the Companys working interests in the D-J Basin Asset. The Company owed Condor $30,000 from production related expenses and $1,853,000 related to capital expenditures incurred by Condor for the drilling of wells during the year ended December 31, 2014. During the period from January 1, 2015 through February 23, 2015 (the date the Companys interests in Condor were divested), the Company recorded $91,000 as its 20% share of Condors net losses for that period. The Companys 20% equity share of Condors losses for the year ended December 31, 2014 were $271,000. The $271,000 of our equity share of losses was recorded against the Companys note receivable and accrued interest. In 2014, the Company recorded the excess losses attributable to 2013 against the investment. |
10. NOTES PAYABLE
10. NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 10 NOTES PAYABLE Note Purchase Agreement and Sale of Secured Promissory Notes On March 7, 2014, the Company entered into a $50 million financing facility (the Notes Purchase Agreement) between the Company, BRe BCLIC Primary, BRe BCLIC Sub, BRe WNIC 2013 LTC Primary, BRe WNIC 2013 LTC Sub, and RJC, as investors (collectively, the Investors or the Senior Loan Investors), and BAM Administrative Services LLC, as agent for the Investors (the Agent). The Company issued the Investors Secured Promissory Notes in the aggregate amount of $34.5 million (the Initial Notes, and the Senior Notes) and provided for an additional $15.5 million available under the financing agreement to fund the Companys future drilling costs. On March 19, 2015, BRe WNIC 2013 LTC Primary transferred a portion of its Initial Note to HEARTLAND Bank, and effective April 1, 2015, BRe BCLIC Primary transferred its Initial Note to Senior Health Insurance Company of Pennsylvania (SHIP), with each of HEARTLAND Bank and SHIP becoming an Investor for purposes of the discussion below. The Initial Notes as originally issued bear interest at the rate of 15% per annum, payable monthly in arrears, on the first business day of each month beginning April 1, 2014 (in connection with the Initial Notes), provided that upon the occurrence of an event of default, the Initial Notes bear interest at the lesser of 30% per annum and the maximum legal rate of interest allowable by law. The Initial Notes are due and payable on March 7, 2017 (the Maturity Date), and may be repaid in full without premium or penalty at any time. Additionally, the Company is required on the third business day of each month, commencing on April 1, 2014, to prepay the Initial Notes in an amount equal to the lesser of (a) the outstanding principal amount of the Initial Notes or (b) twenty-five percent (25%) of the aggregate of all net revenues actually received by us and our subsidiaries for the immediately preceding calendar month (or such pro rata portion of the first month the payment is required). The Initial Notes also provide that RJC is to be repaid (i) accrued interest, only after all of the other Investors are repaid any accrued interest due and (ii) principal, only after all of the other Investors are repaid the full amount of principal due under their Initial Notes, and (iii) that any funding in connection with Subsequent Notes will be made solely by RJC. See below for information related to recent agreements to defer certain principal and interest payments and capitalization of such deferred amounts as additional principal under the Initial Notes. The amount outstanding under the Initial Notes is secured by a first priority security interest in all of the Companys subsidiaries, assets, property, real property, intellectual property, securities and proceeds therefrom, granted in favor of the Agent for the benefit of the Investors. Additionally, the Company granted a mortgage and security interest in all of its real property located in the state of Colorado and the state of Texas. Additionally, the Companys obligations under the Initial Notes, Note Purchase Agreement and related agreements were guaranteed by its wholly-owned and majority-owned direct and indirect subsidiaries. As additional consideration for RJC providing the loan evidenced by its Initial Notes and agreeing to provide the funding from the Subsequent Notes, on March 7, 2014, the Company entered into the following transactions in favor of RJC and its affiliate GGE. ● Red Hawk Purchase - A Purchase and Sale Agreement between PEDCO, the Companys wholly-owned subsidiary, Red Hawk, and GGE (the Red Hawk Purchase); which the Company conveyed 50% of the mineral interests and leases acquired in the Continental Acquisition to GGE. The agreement also provided that for three years from March 7, 2014, GGE does not have the right to propose or conduct any operations on the property acquired pursuant to the Red Hawk Purchase, unless (a) approved by Red Hawk, or (b) unless Red Hawk fails to execute the portion of the then current capital expenditure plan related to such applicable assets, provided that GGE may not (i) propose to drill more wells on such lands during the calendar year covered by such capital expenditure plan than are prescribed in the portion of such applicable capital expenditure plan and (ii) propose or conduct any operations on such lands during the following calendar year in excess of the operations budgeted for in the portion of such applicable capital expenditure plan. ● Asia Sixth Purchase - The Asia Sixth Purchase Agreement between PEDCO and GGE (the Asia Sixth Purchase); the principal terms of which required the conveyance of 50% of the Companys 51% interest in Asia Sixth once acquired by PEDCO and if any part of the $10 million deposit previously paid by the Company in connection with the SSA is returned to the Company, 50% of any such returned funds will be paid to GGE. On August 1, 2014, the Company terminated the SSA, with each of the Company and RJC, as GGEs designee, receiving a $5.0 million promissory note from Asia Sixth, thereby satisfying the Companys obligation to return 50% of the returned deposit to GGE. See Note 6. ● Membership Purchase and Plan of Merger - A Membership Interest Purchase Agreement between PEDCO and GGE (the Membership Purchase), pursuant to which (i) PEDCO transferred 50% ownership of PEDCO MSL Merger Sub, LLC, a Nevada limited liability company (MSL Merger Sub), which was wholly-owned by PEDCO to GGE, (ii) PEDCOs wholly-owned subsidiary, Pacific Energy Development MSL, LLC (PEDCO MSL) merged with and into MSL Merger Sub, with MSL Merger Sub being the surviving entity in the merger, and (iii) MSL Merger Sub changed its name to Pacific Energy Development MSL, LLC. The effective result of the Membership Purchase and Plan of Merger was that GGE now owns 50% of PEDCO MSL, which owns all of the interests in the Mississippian Asset. As a result of the transactions effected by the Red Hawk Purchase, Asia Sixth Purchase, Membership Purchase and Plan of Merger, GGE acquired ownership of 50% of all of the Companys oil and gas assets and properties acquired in connection with the Continental Acquisition, rights to 50% of the Companys right to acquire Asia Sixth which owned the oil and gas assets and properties in Kazakhstan pursuant to the Shares Subscription Agreement (which has since been terminated), and ownership of 50% of the Mississippian Asset. In return, the Company received the financing agreement to acquire the Continental Assets from Continental and provision for future drilling funds and obtained a strategic partner that would fund its own portion of the drilling costs for the development of the Companys properties. In connection with the March 2014 financing, the Company allocated a portion of the proceeds from the financing to the promissory notes and a portion to the sales of (i) 50% of the Wattenberg Asset acquired from Continental, (ii) 50% of the Companys investment in Asia Sixth and (iii) 50% of the Mississippian Asset on a relative fair value basis. To the extent the proceeds of the financing exceed the portion allocated to the debt the Company recorded a debt discount. To the extent the sales price attributable to the assets was less than the net book value, the Company recorded a loss on sale of assets. The components of this transaction are as follows (in thousands): March 7, 2014 Gross proceeds from issuance of Initial Notes $ 34,500 Deferred financing costs paid underwriting fees (5,382 ) Original debt issue discount (1,725 ) Net Proceeds $ 27,393 Allocation of proceeds to sale of assets (recorded as additional debt issue discount): Allocation of proceeds to debt and sale of properties: Allocated to Wattenberg Asset acquired from Continental sold $ 8,707 Allocated to Mississippian Assets sold 1,615 Allocated to Asia Sixth interest sold 3,055 Net proceeds allocated to sales of properties 13,377 Net proceeds allocated to Initial Notes 21,123 Total proceeds $ 34,500 Accordingly, total debt discount including the original issue discount and the amount allocated to the sale of assets was $15,102,000. In addition, additional deferred financing costs for the grant of warrants to purchase 1,000,000 shares of common stock to a placement agent with a fair value of $1,520,000 was recorded. On April 24, 2015, certain of the Investors in our Initial Notes agreed to defer certain mandatory principal repayments and interest payments that would otherwise be payable in the months of May and June 2015, with such deferred amounts to be used by us solely to renew, extend, re-lease or otherwise acquire leases which will then become additional collateral under the Initial Notes. The aggregate principal and interest that was deferred was approximately $354,000, which amount has been added to the principal due under the Initial Notes as of July 31, 2015 and is due upon maturity ($320,000 of which was expensed as additional interest expense). The Company was also charged an additional deferral fee of $354,000, the amount of the principal and interest deferred under this agreement, which was added to the principal and due upon maturity. As consideration for the deferral, on September 10, 2015, the Company issued warrants exercisable for an aggregate of 349,111 shares of our common stock to the Investors participating in the deferral. Each warrant has a 3-year term and is exercisable on a cashless basis at an exercise price of $1.50 per share. The fair value of these warrants of approximately $40,000 was recorded as additional deferred financing costs. On August 28, 2015, the Company entered into agreements with the holders of the Senior Notes to (i) defer until the maturity date of the Senior Notes the mandatory principal payments that would otherwise be due and payable by the Company on payment dates occurring during the six month period of August 1, 2015 through January 31, 2016, (ii) HEARTLAND Bank agreed to change the frequency of payment of accrued interest and mandatory principal repayments from monthly to semi-annually, with the next interest payment due February 1, 2016 and the next mandatory principal repayment due August 3, 2016, and with the Company agreeing to place an amount equal to 1/6th of the semi-annual principal and interest payments due into a sinking fund starting in February 2016 which the Company shall pay to HEARTLAND Bank every six months when due and owing, (iii) RJC agreed to defer all interest payments otherwise due and payable by the Company to RJC during the period commencing on August 1, 2015 through January 31, 2016 (the Waiver Period), which deferred interest is added to principal each month during the Waiver Period, (iv) certain other holders agreed to (a) defer until the maturity date of their Senior Notes 12/17ths of the interest payments that would otherwise be due and payable by the Company to them on payment dates occurring during the six month period of August 1, 2015 through January 31, 2016, and (b) have the Company pay in cash 5/17ths of such interest payments per month, with all deferred interest being added to principal each month until the maturity date of the Senior Notes, and (v) SHIP, BRe BCLIC Sub, BRe WINIC 2013 LTC Primary, BRe WNIC 2013 LTC Sub and RJC increased the interest rate under their Senior Notes from 15% to 17% per annum on all outstanding principal under their Senior Notes during the Waiver Period. These deferrals agreed upon with our Investors (the August-January Deferrals) reduced the Companys monthly cash interest payments and mandatory principal repayments from approximately $600,000 per month prior to these agreements, to approximately $100,000 per month during the Waiver Period. As additional consideration for these agreements and related note amendments and deferrals, on September 10, 2015, the Company issued warrants exercisable on a cash-only basis for an aggregate of 1,201,004 shares to the lenders, proportionately based on their individual principal, which grants were subject to NYSE MKT additional listing approval, which has been received. The warrants have a three year term and are exercisable on a cash-only basis at a price of $0.75 per share. The fair value of these 1,201,004 warrants of approximately $120,000 was recorded as additional deferred financing costs. In addition, in the event the aggregate total of principal and interest deferred in connection with the August-January deferrals had exceeded $900,000 over the Waiver Period, within thirty days of February 1, 2016, and subject to NYSE MKT additional listing approval, the Company will proportionately grant additional warrants such that the total aggregate number of shares of Company common stock exercisable under all warrants granted will equal the total principal and interest deferred by such Investors divided by $0.75, provided that such obligation has been extended as discussed below. As of December 31, 2015, the amount of deferred interest and deferred principal was $2,527,000 and $519,000, respectively. The number of warrants to be issued as of December 31, 2015 was approximately 3.1 million. As the fair value of the warrants is minimal, due to the exercise price being out-of-the money, as of December 31, 2015, no liability was accrued. There were no borrowings made under the Senior Notes during the year ended December 31, 2015. During the year ended December 31, 2014, the Company borrowed net proceeds of $1,593,000 for drilling activities under a Subsequent Note. The amount borrowed was reduced by deferred financing costs of $276,000 related to underwriting fees and a 5% original issue discount of $98,000. As of December 31, 2015 and 2014, amortization of the deferred financing costs and the original issue discount was $148,000 and $53,000, respectively. As of December 31, 2015, there was approximately $13.5 million gross ($11.0 million net, after origination-related fees and expenses) available to draw down under Subsequent Notes from RJC. During the years ended December 31, 2015 and 2014, there were $863,000 and $905,000, respectively, of payments made to reduce the outstanding Initial Notes. All deferred financing costs and debt discount amounts are amortized using the effective interest rate method. The amount of the debt discount and deferred financing costs (net of amortization) reflected on the accompanying balance sheet as of December 31, 2015 and 2014 were $11,801,000 and $18,143,000, respectively. Amortization of debt discount, amortization of deferred financing costs and interest expense, related to the Initial Notes and the first advance, were $4,418,000, $2,101,000 and $4,869,000 for the year ended December 31, 2015, respectively. Amortization of debt discount, amortization of deferred financing costs and interest expense, related to the Initial Notes and the first advance, were $3,790,000, $1,361,000 and $5,708,000 for the year ended December 31, 2014, respectively. As a result of the issuance of common and preferred shares in the acquisition of the assets from GGE in February 2015, GGE became a related party of the Company. See Note 14 for a detail of all related party amounts as of December 31, 2015. Bridge Note Financing Terms of the Bridge Notes On January 8, 2014, payment in full was made of all accrued interest through January 8, 2014 equal to an aggregate of $295,000. On that same date, the payment in full of the $400,000 payment-in-kind ("PIK") on the original principal amount of the Bridge Notes was made. Also on that same date, principal repayment of $1,625,000 was made to the Bridge Investors. Second Amendment to Bridge Notes and Subordination and Intercreditor Agreements On March 7, 2014, the Company entered into a Second Amendment to the Secured Promissory Notes (each, a Second Amended Note, and collectively, the Second Amended Notes) with all but one of the holders (the Amended Bridge Investors). Subsequently, on August 20, 2014, the one remaining holder also entered into the Second Amended Notes, and became an Amended Bridge Investor (as discussed below). The Second Amended Notes amended the Bridge Notes to allow the holders the right to convert up to 100% of the outstanding and unpaid principal amount (but in increments of not less than 25% of the principal amount of each Bridge Note outstanding as of the entry into the Second Amended Notes and only up to four (4) total conversions of not less than 25% each); the Additional PIK; and all accrued and unpaid interest under each Bridge Note (collectively, the Conversion Amount) into common stock of the Company, subject to no more than 19.99% of the Companys outstanding common stock on the date the Second Amended Notes were entered into. Upon a conversion, the applicable holder shall receive that number of shares of common stock as is determined by dividing the Conversion Amount by a conversion price (the Conversion Price) as follows (A) prior to June 1, 2014, the Conversion Price was $2.15 per share; and (B) following June 1, 2014, the denominator used in the calculation described above is the greater of (i) 80% of the average of the closing price per share of the Companys publicly-traded common stock for the five (5) trading days immediately preceding the date of the conversion notice provided by the holder; and (ii) $0.50 per share. Additionally, each Amended Bridge Investor entered into a Subordination and Intercreditor Agreement in favor of the Agent, subordinating and deferring the repayment of the Bridge Notes until full repayment of certain senior notes. The Subordination and Intercreditor Agreements also prohibit the Company from repaying the Bridge Notes until certain senior notes have been paid in full, except that we are allowed to repay the Bridge Notes from net proceeds received from the sale of common or preferred stock (i) in calendar year 2014 if such net proceeds received in such calendar year exceeds $35,000,000, (ii) in calendar year 2015 if such net proceeds received in such calendar year exceeds $50,000,000, and (iii) in calendar year 2016 if such net proceeds actually received in such calendar year exceeds $50,000,000. Prior to the Bridge Note Investors entry into the Amended Notes, Mr. Ingriselli and Mr. Moore transferred their Bridge Notes to non-affiliates of the Company and as such, as of the date of the Second Amended Notes, such officers no longer held any Bridge Notes or rights thereunder. The Company concluded that the Note Purchase Amendment described above constituted a debt extinguishment rather than a debt modification because a significant conversion feature was added to the terms of the note. As a result, the Company recorded a loss on debt extinguishment of $823,000 for the year ended December 31, 2014. Accordingly, a debt premium of $563,000 was recorded for the increase in fair value over the carrying value of the notes payable. The unamortized debt premium as of December 31, 2015 and 2014 was $113,000 and $132,000, respectively. In connection with the Note Purchase Amendment, the convertible debenture was also analyzed for a beneficial conversion feature after the debt modification at which time it was concluded that a beneficial conversion feature existed. The Company extinguished the unamortized portion of the debt discounts associated with the warrants and PIK of $111,000 and $148,000, respectively. The Company recorded $212,000 as a debt discount related to the beneficial conversion feature. The debt discount will be amortized over the term of the Second Amended Notes. In May and June 2014, six holders of Bridge Notes converted an aggregate of $1,371,000 due under the Bridge Notes into an aggregate of 908,724 shares of common stock of the Company. During the three months ended September 30, 2014, four holders of Bridge Notes converted an aggregate of $727,000 due under the Bridge Notes into an aggregate of 494,463 shares of common stock of the Company. In October 2014, one holder of Bridge Notes converted an aggregate of $40,000 due under the Bridge Notes into an aggregate of 49,000 shares of common stock of the Company. In January 2015, a holder of Bridge Notes converted an aggregate of $83,000 (principal and accrued interest amounts) due under the Bridge Notes into an aggregate of 165,431 shares of common stock of the Company. As of December 31, 2015, Bridge Notes with an aggregate principal amount of $475,000 remain outstanding plus accrued interest of $491,000 and additional PIK of $48,000. The aggregate principal and accrued and unpaid interest and PIK amounts are available for conversion into common stock pursuant to the terms of the Bridge Notes. The interest expense related to these notes for the years ended December 31, 2015 and 2014 was $58,000 and $614,000, respectively. The Subordinated Note Payable Assumed In February 2015, the Company assumed approximately $8.35 million of a subordinated note payable from GGE in the acquisition of the Acquired Assets, which amount is outstanding as of December 31, 2015. The lender under the subordinated note payable is RJC, which is one of the lenders under the Secured Promissory Notes and is an affiliate of GGE. The note is due and payable on December 31, 2017, and bears interest at a rate of 12% per annum (24% upon an event of default). The accrued interest is payable on a monthly basis in cash, subject to waiver as discussed below. The assumed note payable is subordinate and subject to the terms and conditions of the Secured Promissory Notes, as well as any future secured indebtedness from a lender with an aggregate principal amount of at least $20,000,000. Should the Company repay the Secured Promissory Notes or replace them with a secured indebtedness from a lender with an aggregate principal amount of at least $20,000,000, RJC agreed to further amend the subordinated note payable to adjust the frequency of interest payments or to eliminate the payments and replace them with a single payment of the accrued interest to be paid at maturity. The subordinated note payable contains customary representations, warranties, covenants and requirements for the Company to indemnify RJC and its affiliates, related parties and assigns. The note payable also includes various covenants (positive and negative) binding the Company, including requiring that the Company provide RJC with quarterly (unaudited) and annual (audited) financial statements, restricting our creation of liens and encumbrances, or sell or otherwise disposing, the collateral under the note. On April 24, 2015, RJC agreed to defer all mandatory principal repayments and interest payments that would otherwise be payable to RJC in May and June 2015 under the subordinated note, with such deferred amounts to be used solely to renew, extend, re-lease or otherwise acquire leases which will then become additional collateral under the subordinated note. The aggregate principal and interest that was deferred was approximately $170,000, which amount has been capitalized and added to the principal due under the subordinated note effective July 31, 2015 and due upon maturity. As consideration for the deferral, we granted warrants exercisable for an aggregate of 113,237 shares of our common stock to RJC (which are included in the aggregate total of 349,111 shares issuable upon exercise of warrants issued to the Investors as described above under Note Purchase Agreement and Sale of Secured Promissory Notes in this Note 9 above). The warrant has a 3 year term and will be exercisable on a cashless basis at an exercise price of $1.50 per share, with a grant date fair value of $13,000. On August 28, 2015, the Company entered into agreements with RJC pursuant to which (i) RJC agreed to defer until the maturity date of the subordinated note the mandatory principal payments that would otherwise be due and payable by the Company on payment dates occurring during the six month period of August 1, 2015 through January 31, 2016, and (ii) RJC agreed to defer all interest payments otherwise due and payable by the Company to RJC under the subordinated note during the Waiver Period, which deferred interest is added to principal each month during the Waiver Period. As of December 31, 2015, the total amount of deferred interest and principal related to this note was $565,000. As additional consideration for these agreements and related note amendments and deferrals, on September 10, 2015, the Company issued to RJC warrants exercisable on a cash-only basis for an aggregate of 265,241 shares (which are included in the aggregate total of 1,201,004 shares issuable upon exercise of warrants issued to the Investors as described above under Note Purchase Agreement and Sale of Secured Promissory Notes in this Note 9 above). The warrants have a three year term and are exercisable on a cash-only basis at a price of $0.75 per share. In addition, in the event the aggregate total of principal and interest deferred by all Investors in connection with the August-January Deferrals exceeds $900,000 over the Waiver Period as described above under Note Purchase Agreement and Sale of Secured Promissory Notes, within thirty days of February 1, 2016, and subject to NYSE MKT additional listing approval, the Company will proportionately grant additional warrants such that the total aggregate number of shares of Company common stock exercisable under all warrants granted to the Investors will equal the total principal and interest deferred by such Investors divided by $0.75, provided such obligation has been extended as discussed below. As of December 31, 2015, the total amount (for all Investors) of deferred interest and deferred principal was $2,527,000 and $519,000, respectively. As of December 31, 2015, the total amount of deferred interest for the Subordinated Note was $565,000. The interest expense related to this note for the year December 31, 2015 was $1,058,000. Related Party Financings MIE Jurassic Energy Corporation On February 14, 2013, PEDCO entered into a Secured Subordinated Promissory Note, as amended on March 25, 2013 and July 9, 2013 (the MIEJ Note) with MIEJ. The MIEJ Note had a total principal and interest amount outstanding of $6.17 million and $1,203,000, respectively, as of December 31, 2014. In February 2015, the Company and PEDCO entered into the MIEJ Settlement Agreement with MIEJ. As part of the MIEJ Settlement Agreement, the Company made cash payments of $100,000 on the MIEJ Note and entered into the New MIEJ Note, which extinguished the original MIEJ Note, and reduced the principal amount owed from $6.07 million to $4.925 million. As of December 31, 2015, the amount outstanding under the New MIEJ Note was $4,925,000. The Company recognized a gain on debt extinguishment during the year ended December 31, 2015 in the amount of $2,192,000. The New MIEJ Note has an interest rate of 10%, with no interest due until maturity, is secured by all of the Companys assets, and is subordinated to the Senior Notes. MIEJ also agreed to subordinate its note up to an additional $60 million of new senior lending, with any portion of new senior lending in excess of this amount requiring to be paid first to MIEJ until the New MIEJ Note is paid in full. Further, for every $20 million in new senior lending the Company raises, MIEJ is required to be paid all interest and fees accrued through such date on the New MIEJ Note. The New MIEJ Note is due and payable on March 8, 2017, subject to automatic extensions upon the occurrence of a Long Term Financing or PEDEVCO Senior Lending Restructuring (each as defined below). On a one-time basis, the Secured Promissory Notes may be refinanced by a new loan (Long-Term Financing) by one or more third party replacement lenders (Replacement Lenders), and in such event the Company shall undertake commercially reasonable best efforts to cause the Replacement Lenders to simultaneously refinance both the Secured Promissory Notes and the New MIEJ Note as part of such Long-Term Financing. If the Replacement Lenders are unable or unwilling to include the New MIEJ Note in such financing, then the Long-Term Financing may proceed without including the New MIEJ Note, and the New MIEJ Note shall remain in place and shall be automatically subordinated, without further consent of MIEJ, to such Long-Term Financing. Furthermore, upon the occurrence of a Long-Term Financing, the maturity of the New MIEJ Note is automatically extended to the same maturity date of the Long-Term Financing, but to no later than March 8, 2020. Additionally, in connection with the Long-Term Financing: ● The Long-Term Financing must not exceed $95 million; ● The Company must make commercially reasonable best efforts to include adequate reserves or other payment provisions whereby MIEJ is paid all interest and fees accrued on the New MIEJ Note commencing as of March 8, 2017 and annually thereafter, and to allow for quarterly interest payments starting March 31, 2017 of not less than 5% per annum on the outstanding balance of the New MIEJ Note, plus a one-time payment of accrued interest (not to exceed $500,000) as of March 31, 2017; and ● Commencing on March 8, 2017, MIEJ shall have the right to convert the balance of the New MIEJ Note into the Companys common stock at a price equal to 80% of the average closing price per share of our stock over the then previous 60 days, subject to a minimum conversion price of $0.30 per share. MIEJ shall not be permitted to convert if the conversion would result in MIEJ holding more than 19.9% of the Companys outstanding common stock without approval from the Companys shareholders, which the Company has agreed to seek at its 2016 annual shareholder meeting or, if not approved then, at its 2017 annual shareholder meeting. In the event the Secured Promissory Notes are not refinanced, restructured or extended by the existing Investors, the maturity of both the New MIEJ Note and the Secured Promissory Notes may be extended to no later than March 8, 2019, without requiring the consent of MIEJ. However, (i) any such maturity extension of the New MIEJ Note will give MIEJ the right to convert the note into our common stock as described above, commencing on March 8, 2017, and (ii) such extension agreement must provide that MIEJ is paid all interest and fees accrued on the New MIEJ Note as of March 8, 2018. The New MIEJ Note may be prepaid any time without penalty, and if we repay the New MIEJ Note on or before December 31, 2015, 20% of the principal of the New MIEJ Note amount will be forgiven by MIEJ, and if we repay the New MIEJ Note on or before December 31, 2016, 15% of the principal of the New MIEJ Note amount will be forgiven by MIEJ. The interest expense related to this note and the extinguished note for the year ended December 31, 2015 was $574,000. For financial reporting purposes, MIEJ was considered a related party for all periods presented prior to the MIEJ Settlement Agreement signed in February 2015. After that date, MIEJ is no longer considered a related party. |
11. COMMITMENTS AND CONTINGENCI
11. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 COMMITMENTS AND CONTINGENCIES Office Leases In July 2012, the Company entered into a non-cancelable lease agreement with a term of two years ending in July 2014, which has been extended for an additional two years with the term now ending in July 2016, for its corporate office space located in Danville, California. The obligation under this lease as of December 31, 2015 is $30,000. In September 2014, the Company entered into a non-cancelable lease agreement with a term of five years ending on or about February 28, 2020 (the Houston Lease), which location will serve as the Companys expanded operations office space in Houston, Texas. The obligation under this lease as of December 31, 2015 is $255,000. The Companys future commitments related to these leases is $91,000, $61,000, $61,000, $61,000 and $10,000 in 2016, 2017, 2018, 2019 and 2020, respectively. Leasehold Drilling Commitments The Companys oil and gas leasehold acreage is subject to expiration of leases if the Company does not drill and hold such acreage by production. In the D-J Basin Asset, 4,680 net acres are due to expire in 2016, 584 net acres expire in 2017, 392 net acres expire in 2018, 127 net acres expire in 2019 and 1,290 net acres expire thereafter (net to our direct ownership interest only). The Company plans to hold significantly all of this acreage through an active program of drilling and completing producing wells. Where the Company is not able to drill and complete a well before lease expiration, the Company may seek to extend leases where able. As of December 31, 2015, the Company had fully impaired its unproved leasehold costs based on managements revised re-leasing program. Other Commitments On December 18, 2015, a complaint was filed against Red Hawk Petroleum, LLC (Red Hawk), our wholly-owned subsidiary, in the District Court, County of Weld, State of Colorado (Case Number: 2015CV31079) (the Court), pursuant to which Liberty Oilfield Services, LLC (Liberty) made various claims against Red Hawk in connection with certain completion services provided by Liberty to Red Hawk in November and December 2014, and accrued in accounts payable as of December 31, 2014. The complaint alleges causes of action for foreclosure of lien, breach of contract, quantum meruit and account stated, and seeks payment of amounts allegedly owed, pre- and post-judgment interest, attorneys fees and court costs in connection with Red Hawk alleged failure to pay Liberty approximately $2.9 million in fees due for completion services provided by Liberty. We and Liberty are in the process of attempting to negotiate a settlement of this matter, provided there can be no assurance that a settlement will be reached or if reached will be on favorable terms to us. As of December 31, 2015, the Company has accrued $2,620,000 in accounts payable, which is the full amount due to Liberty. Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, other than the Liberty matter described above, we are not currently a party to any material legal proceeding. In addition, other than the Liberty matter, we are not aware of any material legal or governmental proceedings against us, or contemplated to be brought against us. As part of its regular operations, the Company may become party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning its commercial operations, products, employees and other matters. Although the Company can give no assurance about the outcome of these or any other pending legal and administrative proceedings and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on the Companys financial condition or results of operations. |
12 . SHAREHOLDERS' EQUITY (DEFI
12 . SHAREHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
SHAREHOLDERS' EQUITY (DEFICIT) | NOTE 12 SHAREHOLDERS EQUITY (DEFICIT) PREFERRED STOCK At December 31, 2015, the Company was authorized to issue 100,000,000 shares of its preferred stock with a par value of $0.001 per share, of which 25,000,000 shares have been designated Series A preferred stock. On February 23, 2015, the Company issued 66,625 Series A Preferred shares to GGE as part of the consideration paid for the GGE Assets. The fair value of the Series A Preferred stock was $28,402,000 based on a calculation using a binomial lattice option pricing model. See Note 15. The 66,625 shares of Series A Preferred stock issued to GGE are contingently redeemable in 4 tranches as follows: (i) 15,000 shares in Tranche One; (ii) 15,000 shares in Tranche Two; (iii) 11,625 shares in Tranche Three; and (iv) 25,000 shares in Tranche Four. In addition, upon the original issuance of the 66,625 shares of Series A Preferred stock issued to GGE, the Series A preferred stock had the following features: ● a liquidation preference senior to all of the Companys common stock equal to $400 per share; ● a dividend, payable annually, of 10% of the liquidation preference; ● voting rights on all matters, with each share having 1 vote; and ● a conversion feature at GGEs option which would allow the Series A Preferred stock to be converted into shares of the Companys common stock on a 1,000:1 basis, subject to stockholder approval of the issuance of the shares of common stock issuable upon such conversion. However, following the October 7, 2015 approval of the Company shareholders of the issuance of shares of common stock upon the conversion of the Series A Preferred stock, the Series A Preferred features have been modified as follows: ● the Series A Preferred stock ceased accruing dividends and all accrued and unpaid dividends have been automatically forfeited and forgiven; and ● the liquidation preference of the Series A Preferred stock has been reduced to $0.001 per share from $400 per share. GGE is also subject to a lock-up provision that prohibits it from selling the shares of common stock through the public markets for less than $1 per share (on an as-converted to common stock basis) until February 23, 2016, and in no event may GGE convert shares of Series A Preferred stock if upon such conversion it would beneficially own more than 9.99% of our outstanding common stock or voting stock. The Series A Preferred stock ceased being redeemable following November 23, 2015. As of December 31, 2015 and 2014, there were 66,625 and -0- shares, respectively, of the Companys Series A Preferred stock outstanding. COMMON STOCK At December 31, 2015, the Company was authorized to issue 200,000,000 shares of its common stock with a par value of $0.001 per share. During the year ended December 31, 2014, the Company issued shares of common stock or restricted common stock as follows: ● On January 6, 2014, the Company issued 4,453 shares of common stock to a consultant in connection with the exercise of 5,000 options on a cashless basis. ● On February 6, 2014, the Company issued 29,647 shares of common stock to an unaffiliated third party in connection with the exercise of 33,334 warrants on a cashless basis. ● On February 11, 2014, the Company issued 20,000 shares of common stock for cash proceeds of $5,000 to STXRA in connection with the exercise of 4,453 options. ● On February 11, 2014, the Company issued 28,682 shares of common stock to a consultant in connection with the exercise of 33,334 warrants on a cashless basis. ● On March 5, 2014, the Company granted 40,000 shares of its restricted common stock with a fair value of $100,000 to an employee pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan. 25% of the shares vest on the twelve month anniversary of February 5, 2014 (the Vesting Commencement Date), 15% vest eighteen months after the Vesting Commencement Date, 15% vest two years after the Vesting Commencement Date, 15% vest two and one-half years after the Vesting Commencement Date, 15% vest three years after the Vesting Commencement Date, and the balance of 15% three and one-half years following the Vesting Commencement Date, all contingent upon the recipients continued service with the Company. ● On March 7, 2014, the Company closed an underwritten offering of an aggregate of 3,438,500 shares of common stock at $2.15 per share. The Company received gross proceeds of $7,393,000 before deducting $725,000 of underwriting discounts and offering expenses as a result of the offering. ● On March 7, 2014, PEDCO MSL and STXRA entered into a letter agreement providing for $406,000 of cash consideration owed to STXRA for consulting services provided by STXRA to PEDCO MSL to be satisfied through the issuance to STXRA of 190,000 shares of restricted common stock of the Company valued at $445,000 on the grant date. These shares were issued on March 24, 2014 and resulted in a loss on settlement of payables of $39,000. ● On May 21, 2014, the Company issued 18,676 shares of common stock in settlement of accrued compensation of $126,000 due to the members of the Board of Directors of Blast Energy Services, Inc. (Blast). This amount was converted at $6.72 per share under debt conversion agreements entered into at the time of the Companys merger with Blast. ● In May and June 2014, six holders of Bridge Notes converted an aggregate of $1,371,000 (principal, accrued interest and payment-in-kind amounts) due under the Bridge Notes into an aggregate of 908,724 shares of common stock of the Company. ● On July 1, 2014, the Company granted an aggregate of 1,370,000 shares of its restricted common stock with an aggregate fair value of $2,658,000, based on the market price on the date of grant, to certain employees of the Company pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan and in connection with the Companys 2013 annual equity incentive compensation review process, which had been delayed and deferred by the Board of Directors from December 2013 due to certain pending public offerings and transactions at that time. With respect to 1,285,000 of the shares, 20% of the shares vest six months from the date of grant, 20% vest nine months from the date of grant, 20% vest one year from the date of grant, 10% vest eighteen months from the date of grant, 10% vest two years from the date of grant, 10% vest thirty months from the date of grant and the final 10% vest three years from the date of grant, all contingent upon the recipients continued service with the Company. With respect to 85,000 of the shares, 25% of the shares vest six months from the date of grant, 15% vest one year from the date of grant, 15% vest eighteen months from the date of grant, 15% vest two years from the date of grant, 15% vest two and one-half years from the date of grant and the final 15% vest three years from the date of grant, all contingent upon the recipients continued service with the Company. All shares of restricted common stock granted under the 2012 Amended and Restated Equity Incentive Plan are held in escrow and will be released to the employees upon the date the shares vest. The vesting of certain of the securities is subject to the terms of certain Vesting Agreements described below. ● On July 15, 2014, the Company issued 22,500 shares to a financial advisor valued at $2.17 per share, based on the fair value of the stock on the date granted, for a consulting services agreement signed by the Company in the amount of $49,000. ● On September 2, 2014, the Company issued 77,000 shares of common stock in full satisfaction of certain reimbursable fees and expenses due to a third party, with such amount converted at $1.89 per share, the market price on the date of the agreement. ● In July and September, 2014, four holders of Bridge Notes converted an aggregate of $727,000 due under the Bridge Notes into an aggregate of 494,463 shares of common stock of the Company. ● On October 8, 2014, the Company granted 200,000 shares of its restricted common stock with a fair value of $282,000, based on the market price on the date of grant, to an employee pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan. 20% of the shares vest on the six month anniversary of the grant date, 20% vest on the twelve month anniversary of the grant date, 15% vest on the eighteen month anniversary of the grant date, 15% vest on the twenty-four month anniversary of the grant date, 15% vest on the thirty month anniversary of the grant date and 15% vest on the thirty-six month anniversary of the grant date, all contingent upon the recipients continued service with the Company. The vesting of the securities is subject to the terms of certain Vesting Agreements described below. ● On October 8, 2014, the Company granted 100,000 shares of its restricted common stock with a fair value of $141,000, based on the market price on the date of grant, to an employee pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan. 25% of the shares vest on the six month anniversary of October 6, 2014 (the Vesting Commencement Date), 15% vest on the twelve month anniversary of the Vesting Commencement Date, 15% vest on the eighteen month anniversary of the Vesting Commencement Date, 15% vest on the twenty-four month anniversary of the Vesting Commencement Date, 15% vest on the thirty month anniversary of the Vesting Commencement Date and 15% vest on the thirty-six month anniversary of the Vesting Commencement Date, all contingent upon the recipients continued service with the Company. ● On October 22, 2014, a holder of Bridge Notes converted an aggregate of $40,000 due under the Bridge Notes into an aggregate of 49,408 shares of common stock of the Company. ● On November 4, 2014, the Company granted 14,000 fully-vested shares of its restricted common stock with a fair value of $11,000, based on the market price on the date of grant, to a consultant pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan. ● On November 28, 2014, the Company entered into various Common Stock and Warrant Subscription Agreements (the Subscription Agreements) with 73 accredited investors (the Investors), pursuant to which the Company sold to the Investors an aggregate of 3,323,734 units, each composed of (i) one share of the Companys common stock and (ii) one five-year warrant exercisable for one share of the Companys common stock, which were evidenced by Warrants For The Purchase of Common Stock, at a purchase price of $0.65 per Unit. The net proceeds to the Company from this transaction was approximately $1,838,000, after deducting various fees, expenses and legal fees of the placement agent and an advisor. The relative fair value of the warrants issued was $681,000; and the relative fair value of the stock issued was $1,479,000; total value of units issued was $2,160,000 at $0.65 per unit. ● On January 7, 2015, the Company granted 965,000 shares of its restricted common stock with a fair value of $357,000, based on the market price on the date of grant, to certain of its employees, including 370,000 shares to Chairman and Chief Executive Officer, Frank C. Ingriselli, 325,000 shares to President and Chief Financial Officer, Michael L. Peterson, and 270,000 shares to Executive Vice President and General Counsel, Clark R. Moore, all pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan and in connection with the Companys 2014 annual equity incentive compensation review process. 40% of the shares vest on the nine month anniversary of the grant date, 20% vest on the twelve month anniversary of the grant date, 20% vest on the eighteen month anniversary of the grant date and 20% vest on the twenty-four month anniversary of the grant date, all contingent upon the recipients continued service with the Company. The vesting of the securities granted to Messrs. Ingriselli, Peterson and Moore is subject to the terms of certain Vesting Agreements described below, under Vesting Agreements. ● On January 27, 2015, a holder of Convertible Bridge Notes converted an aggregate of $83,000 (principal and accrued interest amounts) due under the Convertible Bridge Notes into an aggregate of 165,431 shares of common stock of the Company. ● On February 6, 2015, the Company granted 193,550 shares of its restricted common stock with a fair value of $120,000, based on the market price on the date of grant, to certain members of its board of directors, pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan, of which $29,000 was expensed as of March 31, 2015. 100% of the shares vest on September 10, 2015, contingent upon the recipient being a Director of, or employee of or consultant to, the Company on such vesting date. ● On February 23, 2015, the Company issued 3,375,000 restricted common shares to GGE valued at $0.81 per share, based on the market price on the date of grant, as part of the consideration paid for the Acquired Assets. ● On March 6, 2015, the Company granted 15,000 fully-vested shares of its restricted common stock with a fair value of $10,000, based on the market price on the date of grant, to a consultant pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan. ● On April 16, 2015, the Company issued 19,445 shares of common stock to a former employee in connection with the exercise of 19,445 options on a cashless basis. ● On May 13, 2015, the Company announced the pricing of an underwritten public offering of an aggregate of 5,600,000 shares of common stock at price of $0.50 per share to the public (the May 2015 Offering). The underwriter in the offering was granted an option to purchase up to 840,000 shares of common stock to cover overallotments. On May 18, 2015, the Company closed this underwritten offering of an aggregate of 5,600,000 shares of common stock, and on May 19, 2015 the underwriter exercised a portion of its overallotment option and purchased 766,197 shares of common stock. With the exercise of a portion of the overallotment option, the Company sold 6,366,197 total shares of common stock in the May 2015 Offering for net proceeds of approximately $2.78 million. The Company received gross proceeds of $3,183,000 before deducting underwriting discounts and offering expenses as a result of the offering. ● On September 10, 2015, the Company issued 390,000 shares to a financial and professional relations advisor valued at $0.35 per share, based on the fair value of the stock on the date granted, in connection with the Companys entry into a consulting services agreement in the amount of $137,000. ● On October 7, 2015, the Company issued 214,286 shares of restricted common stock under the Companys 2012 Amended and Restated Equity Incentive Plan to each of Mr. David C. Crikelair, Ms. Elizabeth P. Smith, and Mr. David Z. Steinberg, the Companys independent directors, as annual equity compensation grants made in accordance with the Companys Board of Directors Compensation Plan. 100% of the shares issued to Mr. Crikelair and Ms. Smith will become vested and non-forfeitable on September 10, 2016, and 100% of the shares issued to Mr. Steinberg will become vested and non-forfeitable on July 15, 2016, for so long as the holder remains a director, employee of, or consultant to the Company, with a stock price on the grant date of $0.28 per share, and a total grant date fair value of $180,000. Stock-based compensation expense recorded related to restricted stock during the year ended December 31, 2015 was $2,467,000. The remaining amount of unamortized stock-based compensation expense related to restricted stock at December 31, 2015 was $796,000. Vesting Agreements In connection with our entry into the reorganization agreement with Dome Energy, each of Mr. Ingriselli, Mr. Peterson, and Mr. Moore, our executive officers, entered into Vesting Agreements on May 21, 2015 (the 2015 Vesting Agreements 2015 Delayed Vesting Vesting Agreements Delay Period Acceleration Subject Shares |
13. STOCK OPTIONS AND WARRANTS
13. STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 13 STOCK OPTIONS AND WARRANTS Blast 2003 Stock Option Plan and 2009 Stock Incentive Plan Under Blasts 2003 Stock Option Plan and 2009 Stock Incentive Plan, options to acquire 3,424 shares of common stock were granted and remained outstanding and exercisable as of December 31, 2015 and 2014. No new options were issued under these plans in 2014 or 2015. 2012 Incentive Plan On July 27, 2012, the shareholders of the Company approved the 2012 Equity Incentive Plan (the 2012 Incentive Plan), which was previously approved by the Board of Directors on June 27, 2012, and authorizes the issuance of various forms of stock-based awards, including incentive or non-qualified options, restricted stock awards, performance shares and other securities as described in greater detail in the 2012 Incentive Plan, to the Companys employees, officers, directors and consultants. The 2012 Incentive Plan was amended on June 27, 2014 and October 7, 2015 to increase by 5,000,000 and 3,000,000, respectively, the number of shares of common stock reserved for issuance under the Plan. A total of 10,000,000 shares of common stock are eligible to be issued under the 2012 Incentive Plan, of which 4,757,660 shares have been issued as restricted stock, 1,817,000 shares are subject to issuance upon exercise of issued and outstanding options, and 3,425,340 remain available for future issuance as of December 31, 2015. PEDCO 2012 Equity Incentive Plan As a result of the July 27, 2012 merger by and between the Company, Blast Acquisition Corp., a wholly-owned Nevada subsidiary of the Company (MergerCo), and Pacific Energy Development Corp., a privately-held Nevada corporation (PEDCO) pursuant to which MergerCo was merged with and into PEDCO, with PEDCO continuing as the surviving entity and becoming a wholly-owned subsidiary of the Company, in a transaction structured to qualify as a tax-free reorganization (the Merger), the Company assumed the PEDCO 2012 Equity Incentive Plan (the PEDCO Incentive Plan), which was adopted by PEDCO on February 9, 2012. The PEDCO Incentive Plan authorized PEDCO to issue an aggregate of 1,000,000 shares of common stock in the form of restricted shares, incentive stock options, non-qualified stock options, share appreciation rights, performance shares, and performance units under the PEDCO Incentive Plan. As of December 31, 2015, options to purchase an aggregate of 310,136 shares of the Companys common stock and 571,115 shares of the Companys restricted common stock have been granted under this plan (all of which were granted by PEDCO prior to the closing of the merger with the Company, with such grants being assumed by the Company and remaining subject to the PEDCO Incentive Plan following the consummation of the merger). The Company does not plan to grant any additional awards under the PEDCO Incentive Plan. Options On March 5, 2014, the Company granted options to purchase 80,000 shares of common stock to an employee at an exercise price of $2.50 per share. 25% of the shares vest on the twelve month anniversary of February 5, 2014 ( March Vesting Commencement Date), 15% vest eighteen months of the March Vesting Commencement Date, 15% vest two years of the March Vesting Commencement Date, 15% vest two and one-half years of the March Vesting Commencement Date, 15% vest three years of the March Vesting Commencement Date, and the balance of 15% three and one-half years following the March Vesting Commencement Date, all contingent upon the recipients continued service with the Company. The fair value of the options on the date of grant, using the Black-Scholes model, is $126,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.54%, (2) expected term of 4.4 years, (3) expected volatility of 83%, and (4) zero expected dividends. On July 1, 2014, the Company granted options to purchase an aggregate of 267,500 shares of common stock to certain of its consultants and employees at an exercise price of $1.94 per share, pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan and in connection with the Companys 2013 annual equity incentive compensation review process. The options have terms of five years and fully vest in June 2017. 25% vest six months from the date of grant, 15% vest one year from the date of grant, 15% vest eighteen months from the date of grant, 15% vest two years from the date of grant, 15% vest thirty months from the date of grant and the final 15% vest three years from the date of grant, all contingent upon the recipients continued service with the Company. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $293,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.66%, (2) expected term of 3.5 years, (3) expected volatility of 77%, and (4) zero expected dividends. On October 8, 2014, the Company granted options to purchase 100,000 shares of common stock to an employee at an exercise price of $1.41 per share. 25% vest on the six month anniversary of October 6, 2014 (the Vesting Commencement Date), 15% vest on the twelve month anniversary of the October Vesting Commencement Date, 15% vest on the eighteen month anniversary of the October Vesting Commencement Date, 15% vest on the twenty-four month anniversary of the October Vesting Commencement Date, 15% vest on the thirty month anniversary of the October Vesting Commencement Date and 15% vest on the thirty-six month anniversary of the October Vesting Commencement Date, all contingent upon the recipients continued service with the Company. The fair value of the options on the date of grant, using the Black-Scholes model, is $88,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.57%, (2) expected term of 4.25 years, (3) expected volatility of 83%, and (4) zero expected dividends. On January 7, 2015, the Company granted options to purchase an aggregate of 1,265,000 shares of common stock to certain of its consultants and employees at an exercise and market price of $0.37 per share, including an option to purchase 370,000 shares to Chairman and Chief Executive Officer, Frank C. Ingriselli, an option to purchase 325,000 shares to President and Chief Financial Officer, Michael L. Peterson, and an option to purchase 270,000 shares to Executive Vice President and General Counsel, Clark R. Moore, all pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan and in connection with the Companys 2014 annual equity incentive compensation review process. The options have terms of five years and fully vest in January 2017. 50% vest six months from the date of grant, 20% vest one year from the date of grant, 20% vest eighteen months from the date of grant and 10% vest 2 years from the date of grant, all contingent upon the recipients continued service with the Company, subject in all cases to the terms of the Vesting Agreements. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $213,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.47%, (2) expected term of 3.8 years, (3) expected volatility of 60%, and (4) zero expected dividends. During the year ended December 31, 2015, the Company recognized option stock-based compensation expense related to options of $406,000. The remaining amount of unamortized stock options expense at December 31, 2015 was $111,000. The Black-Scholes option-pricing model was used to determine fair value. Variables used in the Black-Scholes option-pricing model for the options issued in 2015 included: (1) a discount rate of 1.47%, (2) expected term of 3.8 years, (3) expected volatility of 60%, and (4) zero expected dividends. The intrinsic value of outstanding and exercisable options at December 31, 2015 was $6,000 and $6,000, respectively. Option activity during the year ended December 31, 2015 was: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (years) Outstanding at January 1, 2015 1,827,224 $ 1.08 6.5 Granted 1,265,000 0.37 Exercised (19,445 ) 0.30 Forfeited and cancelled (13,889 ) 0.30 Outstanding at December 31, 2015 3,058,890 $ 0.80 4.8 Exercisable at December 31, 2015 2,177,540 $ 0.76 5.1 Option activity during the year ended December 31, 2014 was: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (years) Outstanding at January 1, 2014 1,404,724 $ 0.80 8.1 Granted 447,500 1.92 Exercised (25,000 ) 0.24 Outstanding at December 31, 2014 1,827,224 $ 1.08 6.5 Exercisable at December 31, 2014 1,317,024 $ 0.67 7.3 Summary of options outstanding and exercisable as of December 31, 2015 was as follows: Exercise Price Weighted Average Remaining Life (years) Options Outstanding Options Exercisable $ 0.24 0.2 121,667 121,667 0.30 0.1 26,001 26,001 0.37 1.6 1,265,000 647,500 0.51 2.3 1,090,800 1,090,800 1.41 0.1 100,000 40,000 1.94 0.3 267,500 131,000 2.50 0.1 80,000 32,000 3.75 0.1 104,500 85,150 30.24 - 2,976 2,976 67.20 - 446 446 $ 0.24 to $67.20 4.8 3,058,890 2,177,540 Summary of options outstanding and exercisable as of December 31, 2014 was as follows: Exercise Price Weighted Average Remaining Life (years) Options Outstanding Options Exercisable $ 0.24 0.5 121,667 121,667 0.30 0.2 59,335 59,335 0.51 4.4 1,090,800 1,090,800 1.41 0.3 100,000 - 1.94 0.7 267,500 - 2.50 0.2 80,000 - 3.75 0.2 104,500 41,800 30.24 - 2,976 2,976 67.20 - 446 446 $ 0.24 to $67.20 6.5 1,827,224 1,317,024 See Note 18 for option issuances subsequent to December 31, 2015. Warrants Issuance of Warrants On March 7, 2014, upon the closing of the Note Purchase Agreement discussed in Note 10, the Company granted Casimir Capital LP warrants to purchase up to 1,000,000 shares of our common stock at an exercise price of $2.50 per share (the closing sales price of our common stock on the date immediately prior to the closing date of the Note Purchase Agreement), which warrants have cashless exercise rights and a term of five years (the Casimir Warrants). The fair value of these warrants using the Black-Scholes model, is $1,520,000 and were recorded as a debt discount and will be amortized over the term of the financing facility. Variables used in the Black-Scholes option-pricing model for the warrants issued include: (1) a discount rate of 1.65%, (2) expected term of 5 years, (3) expected volatility of 83%, and (4) zero expected dividends. On November 28, 2014, the Company entered into various Common Stock and Warrant Subscription Agreements (the Subscription Agreements) with 73 accredited investors (the Investors), pursuant to which the Company sold to the Investors an aggregate of 3,323,734 units, each composed of (i) one share of the Companys common stock and (ii) one five-year warrant exercisable for one share of the Companys common stock, which were evidenced by Warrants For The Purchase of Common Stock, at a purchase price of $0.65 per Unit. The Company also issued 377,024 five-year warrants to the placement agent and advisors related to this offering. On April 24, 2015, the Company granted warrants exercisable for an aggregate of 349,111 shares of common stock to certain of the Senior Notes lenders related to the deferral of approximately $524,000 of principal and interest under the Senior Notes and subordinated note held by RJC. Each warrant has a 3-year term and is exercisable on a cashless basis at an exercise price of $1.50 per share. The fair value of these warrants of $40,000 was recorded as additional deferred financing costs. On July 1, 2015, the Company granted a warrant exercisable for an aggregate of 100,000 shares of common stock valued at $18,000, recorded as stock-based compenation, to an investor relations firm as sole consideration for its future services. The warrant has a 3-year term and is exercisable on a cashless basis at an exercise price of $0.44 per share with respect to 50% of the shares issuable thereunder following the date of grant and with respect to the balance of 50% of the shares issuable thereunder on or after October 1, 2015. On August 28, 2015, the Company granted warrants exercisable for an aggregate of 1,201,004 shares of common stock to certain of the Senior Notes lenders related to the current and future deferral of principal and interest under the Senior Notes and subordinated note held by RJC. Each warrant has a 3-year term and will be exercisable on a cashless basis at an exercise price of $0.75 per share. The fair value of these 1,201,004 warrants of $120,000 was recorded as additional deferred financing costs. The Company is obligated to issue additional warrants exercisable for shares of common stock of the Company within 30 days of April 1, 2016, subject to NYSE MKT additional listing approval, to certain of the Senior Notes lenders related to the current and future deferral of principal and interest under the Senior Notes and subordinated note held by RJC. Each warrant will have a 3-year term and will be exercisable on a cashless basis at an exercise price of $0.75 per share. The Company estimates that up to an aggregate of approximately $4.5 million in total interest and principal payments may be deferred pursuant to these agreements through March 2016, in which event warrants exercisable solely on a cash basis for approximately an additional 4.8 million shares of Company common stock at an exercise price of $0.75 per share will be granted pro rata to the Investors (other than to HEARTLAND Bank) in May 2016. Through March 1, 2016, $4,051,000 of interest has been deferred. Rescission of Warrants The Company had previously issued into escrow to Yao Hang Finance (Hong Kong) Limited 6,666,667 shares of common stock and 3-year warrants exercisable on a cash basis for (i) an aggregate of 666,667 shares of common stock at $3.75 per share, (ii) an aggregate of 666,667 shares of common stock at $4.50 per share, and (iii) an aggregate of 666,667 shares of common stock at $5.25 per share in consideration for $20 million. Yao Hang Finance (Hong Kong) Limited paid $10 million in cash on August 12, 2013, and entered into a common stock and Warrant Subscription Agreement (the Subscription Agreement), First Amendment to Common Stock and Warrant Subscription Agreement (the Amendment), and full-recourse promissory note (the Note), which Amendment and Note required that it pay the balance of $10 million in cash no later than December 1, 2013, with 3,333,333 of the shares of common stock issued to Yao Hang Finance (Hong Kong) Limited in the Private Placement (the Escrowed Shares), as well as warrants exercisable for (i) an aggregate of 333,333 shares of common stock at $3.75 per share, (ii) an aggregate of 333,333 shares of common stock at $4.50 per share, and (iii) an aggregate of 333,333 shares of common stock at $5.25 per share (collectively (i), (ii) and (iii), the Escrowed Warrants), being held in escrow by the Company pending Yao Hang Finance (Hong Kong) Limited s payment in full of the $10 million due under the Note. The investor failed to pay the $10 million balance due under the Note by December 1, 2013. On December 1, 2013, the Company granted a verbal extension to the investor pending further discussions regarding the investment. Following discussions with the investor, the investor elected to forego making further investment. Accordingly, on March 7, 2014, the Company notified the investor that, effective immediately, the Escrowed Shares and Escrowed Warrants were rescinded as permitted pursuant to the terms of the Note, and the Note was cancelled and forgiven, with no further action required by the investor (the Cancellation). The stock subscription receivable related to 3,333,333 shares of common stock and warrants to purchase 999,999 shares of common stock in the amount of $10 million was extinguished as of March 7, 2014. No gain or loss was recognized. Reissuance of Warrants On June 30, 2014, the Company re-issued two warrants to MIE Jurassic Energy Corporation (MIEJ), the Companys joint venture partner in Condor, in order to extend their exercise terms through June 30, 2015 (the Warrants). The Warrants were originally issued on May 23, 2012 to MIEJ and expired unexercised pursuant to their terms on May 23, 2014. These two re-issued Warrants have the same terms and conditions as the originally issued warrants, including being exercisable on a cash-only basis for 166,667 shares of common stock of the Company at $3.75 per share and for 166,667 shares of common stock of the Company at $4.50 per share. The Warrants were re-issued in consideration of the Companys continued relationship with, and financial support from, MIEJ, and simply extended the exercise term of the previously issued warrants. The fair value of these warrants using the Black-Scholes model is $84,000 and was recorded as stock-based compensation expense. Variables used in the Black-Scholes option-pricing model for the warrants issued include: (1) a discount rate of 0.11%, (2) expected term of 1 year, (3) expected volatility of 83%, and (4) zero expected dividends. These warrants expired as of December 31, 2015. During the years ended December 31, 2015 and 2014, the Company recognized warrant stock-based compensation expense of $702,000 and $228,000, respectively. The intrinsic value of outstanding and exercisable warrants at December 31, 2015 was $-0- and $-0-, respectively. Warrant activity during the year ended December 31, 2015 was: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at January 1, 2015 6,594,129 $ 2.13 3.9 Granted 1,650,115 0.89 Forfeited and cancelled (440,962 ) 3.67 Outstanding at December 31, 2015 7,803,282 $ 1.78 3.0 Exercisable at December 31, 2015 7,803,282 $ 1.78 3.0 Warrant activity during the year ended December 31, 2014 was: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at January 1, 2014 3,053,370 $ 4.12 2.5 Granted 5,034,092 1.50 Exercised (58,329 ) 0.27 Forfeited and cancelled (1,435,004 ) 4.24 Outstanding at December 31, 2014 6,594,129 $ 2.13 3.9 Exercisable at December 31, 2014 6,594,129 $ 2.13 3.9 Summary of warrants outstanding and exercisable as of December 31, 2015 was as follows: Exercise Price Weighted Average Remaining Life (years) Warrants Outstanding Warrants Exercisable $ 0.44 - 100,000 100,000 0.75 0.4 1,201,004 1,201,004 1.00 1.9 3,700,758 3,700,758 1.50 0.1 349,111 349,111 2.34 - 166,684 166,684 2.50 0.4 1,000,000 1,000,000 3.75 0.1 400,001 400,001 4.50 - 400,001 400,001 5.25 0.1 485,723 485,723 $ 0.44 to $5.25 3.0 7,803,282 7,803,282 Summary of warrants outstanding and exercisable as of December 31, 2014 was as follows: Exercise Price Weighted Average Remaining Life (years) Warrants Outstanding Warrants Exercisable $ 1.00 2.8 3,700,758 3,700,758 2.25 - 107,628 107,628 2.34 0.2 166,684 166,684 2.50 0.6 1,000,000 1,000,000 3.75 0.1 566,668 566,668 4.50 0.1 566,668 566,668 5.25 0.1 485,723 485,723 $ 1.00 to $5.25 3.9 6,594,129 6,594,129 |
14. RELATED PARTY TRANSACTIONS
14. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 RELATED PARTY TRANSACTIONS Accounts Payable Condor. Related to the February 22, 2013, Agreement for Purchase of Term Assignment (the Purchase Agreement) between PEDCO MSL and Berexco for the acquisition of the Mississippian Asset and approximately 10.5 square miles of related 3-D seismic data, for an aggregate purchase price of $4,207,000, the $865,000 initial deposit due from PEDCO MSL to Berexco were funds which were initially held in escrow by Berexco on Condors behalf in connection with a previously contemplated transaction between Condor and Berexco. In February 2013, MIEJ elected not to participate in the Mississippian Asset acquisition transaction through Condor, the seller and PEDCO MSL agreed to restructure the Mississippian Asset acquisition transaction to provide for PEDCO MSL to be the sole buyer and apply the performance deposit previously paid toward the purchase price due from us in the restructured transaction, and PEDCO MSL was obligated to refund to Condor the amount of $432,000 representing the 50% of the deposit paid by MIEJ to Condor, which amount was repaid on March 7, 2014. In addition, as part of the MIEJ Settlement Agreement, PEDCO agreed to provide assistance in the orderly transfer of the operational management, finance and accounting matters involving Condor to MIEJ, and upon the request of MIEJ, PEDCO agreed for a period of up to six (6) months (terminable upon fifteen (15) days prior written notice from MIEJ to PEDCO), PEDCO shall continue to assist with Condors accounting and audits and perform joint interest billing accounting on behalf of Condor for a monthly fee of $55,000 for January 2015, $0 for February 2015, $10,000 for March 2015 and $30,000 per month thereafter, pro-rated for partial months. During the years ended December 31, 2015 and 2014, the Company charged $56,000 and $167,000, respectively, in expenses related to a management services agreement with Condor through February 2015 and charged $160,000 and $-0-, respectively, in expenses related to a management services agreement with MIEJ after February 2015. This management fee represents an amount agreed upon between MIEJ and the Company as being reflective of the approximate amount of time and resources the Company personnel dedicates to Condor-related matters on a monthly basis. As of December 31, 2015 and 2014, the Company had accrued $-0- and $56,000, respectively, in amounts due from Condor under the agreement. Note Amendments and Warrant Issuances to RJC See Note 10 for a discussion of certain amendments to the Senior Note and subordinated note held by RJC. See Note 13 for a discussion of certain warrants issued to RJC by the Company in connection with the amendment of the Senior Note and subordinated note held by RJC. GGE Acquisition As a result of the 66,625 restricted shares of the Companys Series A Convertible Preferred Stock issued to GGE which can be converted into shares of the Companys common stock on a 1,000:1 basis as described below in greater detail) and the appointment by GGE / election of Mr. David Z. Steinberg to the Companys Board of Directors, GGE became a related party to the Company as of that date. The following table reflects the related party amounts for GGE included in the December 31, 2015 balance sheet (in thousands): As of December 31, 2015 Accounts receivable $ 19 Current deferred financing costs 102 Long-term deferred financing costs 34 Accrued expenses (187) Current notes payable-Secured Promissory Notes, net of discount (134) Long-term notes payable-Secured Promissory Notes, net of discount (4,857) Net assets $ (5,023) |
15. FAIR VALUE
15. FAIR VALUE | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
FAIR VALUE | NOTE 15 FAIR VALUE As defined in our accounting policy on the fair value of financial instruments, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table sets forth by level within the fair value hierarchy our financial instruments that were accounted for at fair value as of December 31, 2015 (in thousands): Fair Value Measurements At December 31, 2015 Quoted Prices in Active Markets Significant Other Observable Significant Unobservable Inputs Total Carrying (Level 1) (Level 2) (Level 3) Value Series A Convertible Preferred Stock $ - $ - $ 28,402 $ 28,402 The Company believes there is no active market or significant other market data for the Series A Preferred stock as it is held by a limited number of closely held entities, therefore the Company has determined it should use Level 3 inputs. The Series A Convertible Preferred Stock was valued using a binomial lattice option pricing model for which the significant assumptions were expected term and expected volatility. The binomial lattice model used a probabilistic approach in which the Company assigned percentages to each scenario based on the chance of repayment. The percentages used were as follows: the non-repayment scenario was assigned a 25% probability. |
16. INCOME TAXES
16. INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16 INCOME TAXES Due to the Companys net losses, there were no provisions for income taxes for the years ended December 31, 2015 and 2014. The difference between the income tax expense of zero shown in the statement of operations and pre-tax book net loss times the federal statutory rate of 34% is principally due to the change in the valuation allowance. Deferred income tax assets for years ended December 31, 2015 and 2014 are as follows (in thousands): Deferred Tax Assets (Liabilities) Year ended December 31, 2015 Year ended December 31, 2014 Difference in depreciation, depletion, and capitalization methods oil and natural gas properties $ 1,863 $ 1,385 Net operating losses 4,131 4,131 Impairment oil and natural gas properties (1,122 ) (1,122 ) Other 753 623 Total deferred tax asset 5,625 5,017 Less valuation allowance (5,625 ) (5,017 ) Total deferred tax assets $ - $ - In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at December 31, 2015 and 2014. The net change in the total valuation allowance from December 31, 2014 to December 31, 2015, was an increase of $608,000. The Companys policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of December 31, 2015 and 2014, the Company did not have any significant uncertain tax positions or unrecognized tax benefits. The Company did not have associated accrued interest or penalties, nor was any interest expense or penalties recognized for the years ended December 31, 2015 and 2014. As of December 31, 2015, the Company has federal net operating loss carryforwards of approximately $62,582,000 and $49,922,000 (subject to limitations) for federal and state tax purposes, respectively, which if not utilized, will expire beginning in 2032 and 2023, respectively, for both federal and state purposes. Utilization of NOL and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code (the Code), as amended, as well as similar state provisions. In general, an ownership change as defined by the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain shareholders or public groups. Due to the impact of temporary and permanent differences between the book and tax calculations of net loss, the Company experiences an effective tax rate above the federal statutory rate of 34%. The Company currently has tax returns open for examination by the Internal Revenue Service for all years since 2008. |
17. SUBSEQUENT EVENTS
17. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 SUBSEQUENT EVENTS Issuance of Options to Purchase Common Stock On January 7, 2016, the Company granted options to purchase an aggregate of 1,660,000 shares of common stock to certain of its consultants and employees at an exercise price of $0.22 per share, including an option to purchase 280,000 shares to Chairman and Chief Executive Officer Frank C. Ingriselli, an option to purchase 300,000 shares to President and Chief Financial Officer Michael L. Peterson, and an option to purchase 280,000 shares to Executive Vice President and General Counsel Clark R. Moore, all pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan and in connection with the Companys 2014 annual equity incentive compensation review process. The options have terms of five years and fully vest in January 2018. 50% vest six months from the date of grant, 30% vest one year from the date of grant and 20% vest eighteen months from the date of grant, all contingent upon the recipients continued service with the Company. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $183,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.61%, (2) expected term of 3.5 years, (3) expected volatility of 69 %, and (4) zero expected dividends. Issuance of Common and Preferred Stock On January 7, 2016, the Company granted 1,750,000 shares of its restricted common stock with a fair value of $385,000, based on the market price on the date of grant, to certain of its employees, including 600,000 shares to Chairman and Chief Executive Officer Frank C. Ingriselli, 600,000 shares to President and Chief Financial Officer Michael L. Peterson, and 550,000 shares to Executive Vice President and General Counsel Clark R. Moore, all pursuant to the Companys 2012 Amended and Restated Equity Incentive Plan and in connection with the Companys 2015 annual equity incentive compensation review process. 50% of the shares vest on the six month anniversary of the grant date, 30% vest on the twelve month anniversary of the grant date and 20% vest on the eighteen month anniversary of the grant date, all contingent upon the recipients continued service with the Company. Senior Note Deferrals On January 29, 2016, the Company entered into a Letter Agreement (the Letter Agreement Deferral Extension SHIP RJC Junior Note On March 7, 2016, the Company entered into a Letter Agreement, dated March 1, 2016 (the March Letter Agreement), with SHIP, BRe BCLIC Sub, BRe WINIC 2013 LTC Primary, BRe WNIC 2013 LTC Sub, and RJC (collectively, the Original Lenders The Company estimates that up to an aggregate of approximately $4.7 million in total interest and principal payments may be deferred pursuant to these agreements through March 2016, in which event warrants exercisable solely on a cash basis for approximately an additional 4.4 million shares of Company common stock at an exercise price of $0.75 per share will be granted pro rata to the Investors (other than to HEARTLAND Bank) in May 2016. RJC Subordinated Note Deferrals On January 29, 2016 and March 7, 2016, the Company entered into agreements with RJC to defer until maturity the payment of interest and principal due under the subordinated note through March 31, 2016, return the interest rate to 12% per annum effective January 31, 2016, and delay the issuance of any Subsequent Warrants issuable pursuant thereto to within 30 days of April 1, 2016, subject to NYSE MKT additional listing approval. |
3. SUMMARY OF SIGNIFICANT ACC25
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation. |
Equity Method Accounting for Joint Ventures | Equity Method Accounting for Joint Ventures The Company evaluated its relationship with Condor to determine if it qualified as a variable interest entity (VIE), as defined in ASC 810-10, and whether the Company was the primary beneficiary, in which case consolidation would be required. The Company determined that Condor qualified as a VIE, but since the Company was not the primary beneficiary of Condor, the Company concluded that consolidation was not required during 2014 for Condor. In February 2015, the Company divested its interest in Condor. See Note 9. |
Non-Controlling Interests | Non-Controlling Interests. |
Use of Estimates in Financial Statement Preparation | Use of Estimates in Financial Statement Preparation. |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Concentrations of Credit Risk | Concentrations of Credit Risk. Sales to two customers comprised 64% and 21% of the Companys total oil and gas revenues for the year ended December 31, 2015. Sales to one customer comprised 40% of the Companys total oil and gas revenues for the year ended December 31, 2014. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Companys production, there are a substantial number of alternative buyers for its production at comparable prices. |
Accounts Receivable | Accounts Receivable. |
Equipment | Equipment. |
Oil and Gas Properties, Successful Efforts Method | Oil and Gas Properties, Successful Efforts Method. Exploratory wells in areas not requiring major capital expenditures are evaluated for economic viability within one year of completion of drilling. The related well costs are expensed as dry holes if it is determined that such economic viability is not attained. Otherwise, the related well costs are reclassified to oil and gas properties and subject to impairment review. For exploratory wells that are found to have economically viable reserves in areas where major capital expenditure will be required before production can commence, the related well costs remain capitalized only if additional drilling is under way or firmly planned. Otherwise the related well costs are expensed as dry holes. Exploration and evaluation expenditures incurred subsequent to the acquisition of an exploration asset in a business combination are accounted for in accordance with the policy outlined above. Depreciation, depletion and amortization of capitalized oil and gas properties is calculated on a field by field basis using the unit of production method. Lease acquisition costs are amortized over the total estimated proved developed and undeveloped reserves and all other capitalized costs are amortized over proved developed reserves. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. |
Asset Retirement Obligations | Asset Retirement Obligations. The following table describes changes in our asset retirement obligations during the years ended December 31, 2015 and 2014 (in thousands): 2015 2014 Asset retirement obligations at January 1, $ 89 $ 76 Accretion expense 40 17 Obligations incurred for acquisition 87 105 Obligations settled - assets sold (3) (132) Changes in estimates (24) 23 Asset retirement obligations at December 31, $ 189 $ 89 |
Deferred Financing Costs | Deferred Financing Costs. |
Revenue Recognition | Revenue Recognition. |
Income Taxes | Income Taxes. |
Stock-Based Compensation | Stock-Based Compensation. |
Loss per Common Share | Loss per Common Share. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Fair Value Measurement As defined in ASC 820, fair value, clarified as an exit price, represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, ASC 820 defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and have not yet determined the method by which the Company will adopt the standard in 2017. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 amends previous guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company expects that the affected amounts on its balance sheets will be reclassified within the balance sheets upon adoption of this ASU to conform to this standard. The Company expects to adopt this ASU during the first quarter of 2016 and does not expect that the adoption of this ASU will have a material impact on its financial statements. |
Subsequent Events | Subsequent Events. |
3. SUMMARY OF SIGNIFICANT ACC26
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Tables | |
Asset retirement obligation | The following table describes changes in our asset retirement obligations during the years ended December 31, 2015 and 2014 (in thousands): 2015 2014 Asset retirement obligation at January 1, $ 89 $ 76 Accretion expense 40 17 Obligations incurred for acquisition 87 105 Obligations settled - assets sold (3) (132) Changes in estimates (24) 23 Asset retirement obligation at December 31, $ 189 $ 89 |
5. OIL AND GAS PROPERTIES (Tabl
5. OIL AND GAS PROPERTIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Oil and gas interests | The following tables summarize the Companys oil and gas activities by classification for the years ended December 31, 2015 and 2014 (in thousands): January 1, 2015 Additions Disposals Transfers December 31, 2015 Oil and gas properties subject to amortization $ 24,057 $ 47,561 $ (7,252 ) $ 289 $ 64,655 Oil and gas properties not subject to amortization 8,159 - (7,870 ) (289 ) - Asset retirement costs 76 63 (2 ) - 137 Accumulated depreciation, depletion and impairment (10,237 ) (6,441 ) 10,653 - (6,025 ) Total oil and gas properties, net $ 22,055 $ 41,183 $ (4,471 ) $ - $ 58,767 January 1, 2014 Additions Disposals Transfers December 31, 2014 Oil and gas properties subject to amortization $ 6,314 $ 33,716 $ (15,973 ) $ - $ 24,057 Oil and gas properties not subject to amortization 7,167 3,073 (2,081 ) - 8,159 Asset retirement costs 28 128 (80 ) - 76 Accumulated depreciation, depletion and impairment (4,706 ) (6,353 ) 822 - (10,237 ) Total oil and gas properties, net $ 8,803 $ 30,564 $ (17,312 ) $ - $ 22,055 |
Summary of Purchase Price | The following table summarizes the allocation of the purchase price to the net assets acquired (in thousands): Fair value at March 7, 2014 Accounts receivable oil and gas $ 483 Inventory 396 Oil and gas properties, subject to amortization 25,934 Oil and gas properties, not subject to amortization 2,694 Total assets 29,507 Current liabilities (831 ) Asset retirement obligations (105 ) Total liabilities (936 ) Final purchase price $ 28,571 |
Summary of pro forma sale | The following table presents the Companys supplemental consolidated pro forma total revenues, lease operating costs, net income (loss) and net loss per common share as if the GGE Acquisition completed in February 2015 had occurred on January 1, 2015 and the acquisition of D-J Basin Assets completed in March 2014 from Continental and simultaneous dispositions had occurred on January 1, 2014 (in thousands, except per share amounts). For the Year Ended December 31, 2015 PEDEVCO Net Acquisitions/Dispositions Pro Forma Combined Revenue $ 5,326 $ 780 $ 6,106 Lease operating costs $ (1,830 ) $ (275 ) $ (2,105 ) Net income (loss) $ (20,484 ) $ 505 $ (19,979 ) Net income (loss) per common share $ (0.49 ) $ 0.01 $ (0.48 ) For the Year Ended December 31, 2014 PEDEVCO Net Acquisitions/Dispositions Pro Forma Combined Revenue $ 4.812 $ 1,102 $ 5,914 Lease operating costs $ (1,674 ) $ (376 ) $ (2,050 ) Net income (loss) $ (29,874 ) $ 433 $ (29,441 ) Net income (loss) per common share $ (1.06 ) $ 0.02 $ (1.04 ) |
Summary of sale price | The following table summarizes the net loss on sale of oil and gas properties for the year ended December 31, 2014 (in thousands): Allocated Proceeds Historical Cost Gain (Loss) on Sale Wattenberg Asset $ 8,707 $ 14,226 $ (5,519 ) North Sugar Valley Asset 50 56 (6 ) White Hawk Asset 2,718 2,559 159 Total $ 11,475 $ 16,841 $ (5,366 ) |
Golden Globe Energy [Member] | |
Summary of Purchase Price | The following tables summarize the purchase price and allocation of the purchase price to the net assets acquired (in thousands): Purchase price on February 23, 2015 Fair value of common stock issued $ 2,734 Fair value of Series A Preferred stock issued 28,402 Assumption of subordinated notes payable 8,353 Kazakhstan option issued 5,000 Total purchase price $ 44,489 Fair value of net assets at February 23, 2015 Accounts receivable oil and gas $ 1,578 Oil and gas properties, subject to amortization 43,562 Prepaid expenses and other assets 100 Total assets 45,240 Accounts payable (664) Asset retirement obligations (87) Total liabilities (751) Net assets acquired $ 44,489 |
Summary of sale price | The following table presents the loss on sale to RJ Credit associated with each of these items (in thousands): Allocated Proceeds Historical Cost Loss on Sale Note receivable $ 3,055 $ 5,000 $ (1,945 ) Oil and gas properties $ 8,707 $ 14,226 $ (5,519 ) Mississippian Asset $ 1,615 $ 2,643 $ (1,028 ) |
6. SALE OF 50% OF PACIFIC ENE28
6. SALE OF 50% OF PACIFIC ENERGY DEVELOPMENT MSL, LLC. (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Schedule of Sale of MSL | The following table summarizes the loss on this sale (in thousands): Allocated Proceeds Historical Cost Loss on Sale Mississippian Asset $ 1,615 $ 2,643 $ (1,028 ) |
8. NOTES RECEIVABLE (Tables)
8. NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Summary of note receivable activity | The following table reflects the activity related to the note receivable-related party (in thousands): December 31, December 31, 2015 2014 Note receivable-related party prior to applying excess losses $ 6,979 $ 6,979 Equity change in net loss at 20% applied to note receivable-related party as of December 31, 2013 (5,193) (5,193) Equity change in net loss at 20% for year ended December 31, 2014 (271 ) (271 ) Equity change in net loss at 20% for period from January 1 through February 23, 2015 (91 ) - Previously unrecognized losses for year ended December 31, 2013 (273 ) (273) Interest accrued 160 121 Extinguishment of note receivable with Condor (1,311 ) - Net note receivable $ - $ 1,363 |
9. EQUITY METHOD INVESTMENTS (T
9. EQUITY METHOD INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments Tables | |
Activity related to settlement | The following table reflects the activity related to the Companys settlement with MIEJ (in thousands): Items Received by PEDEVCO Extinguishment of accrued liabilities $ 3,280 Extinguishment of original debt with MIE net of cash payments of $100,000 6,070 Proceeds from cash payments made by MIE to RJ Credit and the Agent 500 Total $ 9,850 Items Received by MIEJ Issuance of new MIEJ note $ 4,925 Extinguishment of note receivable with Condor 1,272 Historical cost of oil and gas property sold to Condor 620 Total 6,817 Net gain on settlement $ 3,033 |
Shedule of allocation of gain on settlement | The following table presents the allocation of the gain on settlement with MIEJ described above (in thousands): Allocated Value Historical Cost Gain on Settlement Oil and gas properties $ 895 $ 620 $ 275 Investment in Condor 1,838 1,272 566 Note payable MIEJ 7,117 4,925 2,192 Total $ 9,850 $ 6,817 $ 3,033 |
Condors financial information | Summarized balance sheets (in thousands): December 31, 2014 Current assets $ 2,700 Oil and gas properties, net 3,825 Other long term assets 108 Total assets $ 6,633 Current liabilities $ 1,547 Notes payable to affiliates 33,740 Other long-term liabilities 32 Total liabilities 35,319 Members deficit (28,686 ) Total liabilities and members deficit $ 6,633 |
Condor Energy Technology, LLC | Summarized statements of operations (in thousands): For the Period from January 1-February 23, 2015 For the Year Ended December 31, 2014 Revenue $ 108 $ 3,096 Operating expenses (368 ) (3,065 ) Operating income (loss) (260 ) 31 Interest expense (195 ) (1,386 ) Net loss $ (455 ) $ (1,355 ) |
10. NOTES PAYABLE (Tables)
10. NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Allocation of proceeds | The components of this transaction are as follows (in thousands): March 7, 2014 Gross proceeds from issuance of Initial Notes $ 34,500 Deferred financing costs paid underwriting fees (5,382 ) Original debt issue discount (1,725 ) Net Proceeds $ 27,393 Allocation of proceeds to sale of assets (recorded as additional debt issue discount): Allocation of proceeds to debt and sale of properties: Allocated to Wattenberg Asset acquired from Continental sold $ 8,707 Allocated to Mississippian Assets sold 1,615 Allocated to Asia Sixth interest sold 3,055 Net proceeds allocated to sales of properties 13,377 Net proceeds allocated to Initial Notes 21,123 Total proceeds $ 34,500 |
13. STOCK OPTIONS AND WARRANTS
13. STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Warrant [Member] | |
Schedule of Stock Option and Warrant Activity | Warrant activity during the year ended December 31, 2015 was: Number of Weighted Weighted Average Remaining Contract Term Outstanding at January 1, 2015 6,594,129 $ 2.13 3.9 Granted 1,650,115 0.89 Forfeited and cancelled (440,962 ) 3.67 Outstanding at December 31, 2015 7,803,282 $ 1.78 3.0 Exercisable at December 31, 2015 7,803,282 $ 1.78 3.0 Warrant activity during the year ended December 31, 2014 was: Number of Weighted Weighted Average Remaining Contract Term Outstanding at January 1, 2014 3,053,370 $ 4.12 2.5 Granted 5,034,092 1.50 Exercised (58,329 ) 0.27 Forfeited and cancelled (1,435,004 ) 4.24 Outstanding at December 31, 2014 6,594,129 $ 2.13 3.9 Exercisable at December 31, 2014 6,594,129 $ 2.13 3.9 |
Schedule of Stock Option and Warrant Exercisable | Summary of warrants outstanding and exercisable as of December 31, 2015 was as follows: Exercise Price Weighted Average Warrants Outstanding Warrants Exercisable $ 0.44 - 100,000 100,000 0.75 0.4 1,201,004 1,201,004 1.00 1.9 3,700,758 3,700,758 1.50 0.1 349,111 349,111 2.34 - 166,684 166,684 2.50 0.4 1,000,000 1,000,000 3.75 0.1 400,001 400,001 4.50 - 400,001 400,001 5.25 0.1 485,723 485,723 $ 0.44 to $5.25 3.0 7,803,282 7,803,282 Summary of warrants outstanding and exercisable as of December 31, 2014 was as follows: Exercise Price Weighted Average Warrants Outstanding Warrants Exercisable $ 1.00 2.8 3,700,758 3,700,758 2.25 - 107,628 107,628 2.34 0.2 166,684 166,684 2.50 0.6 1,000,000 1,000,000 3.75 0.1 566,668 566,668 4.50 0.1 566,668 566,668 5.25 0.1 485,723 485,723 $ 1.00 to $5.25 3.9 6,594,129 6,594,129 |
Stock Option [Member] | |
Schedule of Stock Option and Warrant Activity | Option activity during the year ended December 31, 2015 was: Number of Weighted Weighted Outstanding at January 1, 2015 1,827,224 $ 1.08 6.5 Granted 1,265,000 0.37 Exercised (19,445 ) 0.30 Forfeited and cancelled (13,889 ) 0.30 Outstanding at December 31, 2015 3,058,890 $ 0.80 4.8 Exercisable at December 31, 2015 2,177,540 $ 0.76 5.1 Option activity during the year ended December 31, 2014 was: Number of Weighted Weighted Outstanding at January 1, 2014 1,404,724 $ 0.80 8.1 Granted 447,500 1.92 Exercised (25,000 ) 0.24 Outstanding at December 31, 2014 1,827,224 $ 1.08 6.5 Exercisable at December 31, 2014 1,317,024 $ 0.67 7.3 |
Schedule of Stock Option and Warrant Exercisable | Summary of options outstanding and exercisable as of December 31, 2015 was as follows: Exercise Price Weighted Average Remaining Life (years) Options Outstanding Options Exercisable $ 0.24 0.2 121,667 121,667 0.30 0.1 26,001 26,001 0.37 1.6 1,265,000 647,500 0.51 2.3 1,090,800 1,090,800 1.41 0.1 100,000 40,000 1.94 0.3 267,500 131,000 2.50 0.1 80,000 32,000 3.75 0.1 104,500 85,150 30.24 - 2,976 2,976 67.20 - 446 446 $ 0.24 to $67.20 4.8 3,058,890 2,177,540 Summary of options outstanding and exercisable as of December 31, 2014 was as follows: Exercise Price Weighted Average Remaining Life (years) Options Outstanding Options Exercisable $ 0.24 0.5 121,667 121,667 0.30 0.2 59,335 59,335 0.51 4.4 1,090,800 1,090,800 1.41 0.3 100,000 - 1.94 0.7 267,500 - 2.50 0.2 80,000 - 3.75 0.2 104,500 41,800 30.24 - 2,976 2,976 67.20 - 446 446 $ 0.24 to $67.20 6.5 1,827,224 1,317,024 |
14. RELATED PARTY TRANSACTIONS
14. RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions Tables | |
Schedule Of Related Party Transactions Table | The following table reflects the related party amounts for GGE included in the December 31, 2015 balance sheet (in thousands): As of December 31, 2015 Accounts receivable $ 19 Current deferred financing costs 102 Long-term deferred financing costs 34 Accrued expenses (187) Current notes payable-Secured Promissory Notes, net of discount (134) Long-term notes payable-Secured Promissory Notes, net of discount (4,857) Net assets $ (5,023) |
15. FAIR VALUE (Tables)
15. FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Tables | |
Fair Value Option Qualitative Measurements Table | The following table sets forth by level within the fair value hierarchy our financial instruments that were accounted for at fair value as of December 31, 2015 (in thousands): Fair Value Measurements At December 31, 2015 Quoted Prices in Active Markets Significant Other Observable Significant Unobservable Inputs Total Carrying (Level 1) (Level 2) (Level 3) Value Series A Convertible Preferred Stock $ - $ - $ 28,402 $ 28,402 |
16. INCOME TAXES (Tables)
16. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Deferred income taxes assets | Deferred income tax assets for years ended December 31, 2015 and 2014 are as follows (in thousands): Deferred Tax Assets (Liabilities) Year ended December 31, 2015 Year ended December 31, 2014 Difference in depreciation, depletion, and capitalization methods oil and natural gas properties $ 1,863 $ 1,385 Net operating losses 4,131 4,131 Impairment oil and natural gas properties (1,122 ) (1,122 ) Other 753 623 Total deferred tax asset 5,625 5,017 Less valuation allowance (5,625 ) (5,017 ) Total deferred tax assets $ - $ - |
3. SUMMARY OF SIGNIFICANT ACC36
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary Of Significant Accounting Policies Tables | ||
Asset retirement obligation at January 1, | $ 89 | $ 76 |
Accretion expense | 40 | 17 |
Obligations incurred for acquisition | 87 | 105 |
Obligations settled - assets sold | (3) | (132) |
Changes in estimates | (24) | 23 |
Asset retirement obligation at December 31, | $ 189 | $ 89 |
3. SUMMARY OF SIGNIFICANT ACC37
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash uninsured amount | $ 842 | |
Potentially issuable shares of common stock related to options | 2,177,540 | 1,317,024 |
Potentially issuable shares of common stock related to warrants | 7,803,282 | 6,594,129 |
Potentially issuable shares of common stock related to the conversion of Bridge Notes | 2,027,302 | 1,474,867 |
Impairment of leases | $ 1,337 | $ 5,416 |
Customers one [Member] | ||
Oil and gas revenues, (in percentage) | 64.00% | 40.00% |
Customers two [Member] | ||
Oil and gas revenues, (in percentage) | 21.00% |
5. OIL AND GAS PROPERTIES (Deta
5. OIL AND GAS PROPERTIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Oil and gas properties subject to amortization | $ 64,655 | $ 24,057 | $ 6,314 |
Oil and gas properties not subject to amortization | 0 | 8,159 | 7,167 |
Asset retirement costs | 137 | 76 | 28 |
Accumulated depreciation, depletion and impairment | (6,025) | (10,237) | (4,706) |
Total oil and gas properties, net | 58,767 | 22,055 | $ 8,803 |
Additions [Member] | |||
Oil and gas properties subject to amortization | 47,561 | 33,716 | |
Oil and gas properties not subject to amortization | 0 | 3,073 | |
Asset retirement costs | 63 | 128 | |
Accumulated depreciation, depletion and impairment | (6,441) | (6,353) | |
Total oil and gas properties, net | 41,183 | 30,564 | |
Disposals [Member] | |||
Oil and gas properties subject to amortization | (7,252) | (15,973) | |
Oil and gas properties not subject to amortization | (7,870) | (2,081) | |
Asset retirement costs | (2) | (80) | |
Accumulated depreciation, depletion and impairment | 10,653 | 822 | |
Total oil and gas properties, net | (4,471) | (17,312) | |
Transfers [Member] | |||
Oil and gas properties subject to amortization | 289 | 0 | |
Oil and gas properties not subject to amortization | (289) | 0 | |
Asset retirement costs | 0 | 0 | |
Accumulated depreciation, depletion and impairment | 0 | 0 | |
Total oil and gas properties, net | $ 0 | $ 0 |
5. OIL AND GAS PROPERTIES (De39
5. OIL AND GAS PROPERTIES (Details 1) - USD ($) $ in Thousands | Mar. 07, 2015 | Feb. 23, 2015 |
Fair value at March 7, 2015 | ||
Accounts receivable - oil and gas | $ 483 | $ 1,578 |
Inventory | 396 | |
Oil and gas properties, subject to amortization | 25,934 | 43,562 |
Oil and gas properties, not subject to amortization | 2,694 | |
Total assets | 29,507 | 45,240 |
Current liabilities | (831) | |
Asset retirement obligations | (105) | (87) |
Total liabilities | (936) | (751) |
Final Purchase price | $ 28,571 | $ 44,489 |
5. OIL AND GAS PROPERTIES (De40
5. OIL AND GAS PROPERTIES (Details 2) - USD ($) $ in Thousands | Mar. 07, 2015 | Feb. 23, 2015 |
Purchase price on February 23, 2015 | ||
Fair value of common stock issued | $ 2,734 | |
Fair value of Series A Preferred stock issued | 28,402 | |
Assumption of subordinated notes payable | 8,353 | |
Kazakhstan option issued | 5,000 | |
Total purchase price | 44,489 | |
Fair value of net assets at February 23, 2015 | ||
Accounts receivable - oil and gas | $ 483 | 1,578 |
Oil and gas properties, subject to amortization | 25,934 | 43,562 |
Prepaid expenses and other assets | 100 | |
Total assets | 29,507 | 45,240 |
Accounts payable | (664) | |
Asset retirement obligations | (105) | (87) |
Total liabilities | (936) | (751) |
Net assets acquired | $ 28,571 | $ 44,489 |
5. OIL AND GAS PROPERTIES (De41
5. OIL AND GAS PROPERTIES (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) | $ (21,320) | $ (32,573) |
Net income (loss) per common share | $ (0.51) | $ (1.06) |
PEDEVCO [Member] | ||
Revenue | $ 5,326 | $ 4,812 |
Lease operating costs | (1,830) | (1,674) |
Net income (loss) | $ (20,484) | $ (29,874) |
Net income (loss) per common share | $ (0.49) | $ (1.06) |
Net Acquisitions/Dispositions [Member] | ||
Revenue | $ 780 | $ 1,102 |
Lease operating costs | (275) | (376) |
Net income (loss) | $ 505 | $ 433 |
Net income (loss) per common share | $ 0.01 | $ 0.02 |
Combined [Member] | ||
Revenue | $ 6,106 | $ 5,914 |
Lease operating costs | (2,105) | (2,050) |
Net income (loss) | $ (19,979) | $ (29,441) |
Net income (loss) per common share | $ (0.48) | $ (1.04) |
5. OIL AND GAS PROPERTIES (De42
5. OIL AND GAS PROPERTIES (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Allocated Proceeds | $ 11,475 | |
Historical Cost | 16,841 | |
Gain (Loss) on Sale | $ 526 | (5,366) |
Note receivable [Member] | ||
Allocated Proceeds | 3,055 | |
Historical Cost | 5,000 | |
Gain (Loss) on Sale | (1,945) | |
Oil and Gas Properties [Member] | ||
Allocated Proceeds | 8,707 | |
Historical Cost | 14,226 | |
Gain (Loss) on Sale | (5,519) | |
Mississippian Asset [Member] | ||
Allocated Proceeds | 1,615 | |
Historical Cost | 2,643 | |
Gain (Loss) on Sale | $ (1,028) | |
Wattenberg Asset [Member] | ||
Allocated Proceeds | 8,707 | |
Historical Cost | 14,226 | |
Gain (Loss) on Sale | (5,519) | |
North Sugar Valley Asset [Member] | ||
Allocated Proceeds | 50 | |
Historical Cost | 56 | |
Gain (Loss) on Sale | (6) | |
White Hawk Assets [Member] | ||
Allocated Proceeds | 2,718 | |
Historical Cost | 2,559 | |
Gain (Loss) on Sale | $ 159 |
5. OIL AND GAS PROPERTIES (De43
5. OIL AND GAS PROPERTIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Depletion | $ 5,104 | $ 937 |
Impairment expense for expired leasehold costs | 1,337 | 5,416 |
Property impairment | 0 | 0 |
Completion costs | 235 | |
Acquisition costs | $ 28,628 | |
Escrow deposit | 250 | |
White Hawk [Member] | ||
Equity method ownership intrest | 50.00% | |
Loomis 2-1H [Member] | ||
Drilling costs | 2,110 | |
Loomis 2-3H [Member] | ||
Drilling costs | 1,906 | |
Loomis 2-6H [Member] | ||
Drilling costs | $ 1,890 |
6. SALE OF 50% OF PACIFIC ENE44
6. SALE OF 50% OF PACIFIC ENERGY DEVELOPMENT MSL, LLC. (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Mississippian Asset | $ 566 | $ (1,028) |
Allocated Proceeds [Member] | ||
Mississippian Asset | 1,615 | |
Historical Cost [Member] | ||
Mississippian Asset | 2,643 | |
Loss on Sale [Member] | ||
Mississippian Asset | $ (1,028) |
6. SALE OF 50% OF PACIFIC ENE45
6. SALE OF 50% OF PACIFIC ENERGY DEVELOPMENT MSL, LLC. (Details Narrative) | Dec. 31, 2013 |
Sale Of 50 Of Pacific Energy Development Msl Llc. Details Narrative | |
Working interest ownership in lease | 98.00% |
8. NOTES RECEIVABLE (Details)
8. NOTES RECEIVABLE (Details) - Condor [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Note receivable-related party prior to applying excess losses | $ 6,979 | $ 6,979 |
Equity change in net loss at 20% applied to note receivable-related party as of December 31, 2013 | (5,193) | (5,193) |
Equity change in net loss at 20% for year ended December 31, 2014 | (271) | (271) |
Equity change in net loss at 20% for period from January 1 through February 23, 2015 | (91) | 0 |
Previously unrecognized losses for year ended December 31, 2013 | (273) | (273) |
Interest accrued | 160 | 121 |
Extinguishment of note receivable with Condor | (1,311) | 0 |
Net note receivable | $ 0 | $ 1,363 |
8. NOTES RECEIVABLE (Details Na
8. NOTES RECEIVABLE (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Note receivable | $ 1,252 | ||
Condor [Member] | |||
Note receivable-related party prior to applying excess losses | $ 6,979 | $ 6,979 | |
Note receivable | 1,363 | ||
Accrued interest | $ 160 | $ 121 |
9. EQUITY METHOD INVESTMENTS (D
9. EQUITY METHOD INVESTMENTS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Items Issued / Sold | $ 6,817 |
Items Received | 9,850 |
Net gain on settlement | 3,033 |
New MIEJ note [Member] | |
Items Issued / Sold | 4,925 |
Note receivable with Condor [Member] | |
Items Issued / Sold | 1,272 |
Oil and gas property operated by Condor [Member] | |
Items Issued / Sold | 620 |
Accrued Liabilities [Member] | |
Items Received | 3,280 |
Original debt with MIE net of cash payments [Member] | |
Items Received | 6,070 |
Proceeds from cash payments made by MIE to RJ Credit and BAM [Member] | |
Items Received | $ 500 |
9. EQUITY METHOD INVESTMENTS 49
9. EQUITY METHOD INVESTMENTS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Allocated Proceeds | $ 11,475 | |
Historical Cost | 16,841 | |
Gain on Settlement | $ 526 | $ (5,366) |
Oil and gas properties [Member] | ||
Allocated Proceeds | 895 | |
Historical Cost | 620 | |
Gain on Settlement | 275 | |
Investment in Condor [Member] | ||
Allocated Proceeds | 1,838 | |
Historical Cost | 1,272 | |
Gain on Settlement | 566 | |
Note payable - MIEJ [Member] | ||
Allocated Proceeds | 7,117 | |
Historical Cost | 4,925 | |
Gain on Settlement | 2,192 | |
Total [Member] | ||
Allocated Proceeds | 9,850 | |
Historical Cost | 6,817 | |
Gain on Settlement | $ 3,033 |
9. EQUITY METHOD INVESTMENTS 50
9. EQUITY METHOD INVESTMENTS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets | $ 4,913 | $ 9,624 | |
Oil and gas properties, net | 58,767 | 22,055 | $ 8,803 |
Other long - term assets | 85 | 85 | |
Total assets | 64,653 | 41,740 | |
Current liabilities | 7,567 | 20,341 | |
Total liabilities | 49,616 | 43,163 | |
Members' deficit | 15,037 | (1,423) | $ 10,887 |
Total liabilities and members' deficit | $ 64,653 | 41,740 | |
Condor [Member] | |||
Current assets | 2,700 | ||
Oil and gas properties, net | 3,825 | ||
Other long - term assets | 108 | ||
Total assets | 6,633 | ||
Current liabilities | 1,547 | ||
Notes payable to affiliates | 33,740 | ||
Other long-term liabilities | 32 | ||
Total liabilities | 35,319 | ||
Members' deficit | (28,686) | ||
Total liabilities and members' deficit | $ 6,633 |
9. EQUITY METHOD INVESTMENTS 51
9. EQUITY METHOD INVESTMENTS (Details 3) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Feb. 23, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating income (loss) | $ (9,648) | $ (22,172) | |
Interest expense | (13,904) | (9,859) | |
Net loss | $ (21,320) | (32,573) | |
Condor Energy | |||
Revenues | $ 108 | 3,096 | |
Operating expenses | (368) | (3,065) | |
Operating income (loss) | (260) | 31 | |
Interest expense | (195) | (1,386) | |
Net loss | $ (455) | $ (1,355) |
9. EQUITY METHOD INVESTMENTS 52
9. EQUITY METHOD INVESTMENTS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Note receivable | $ 1,252 | ||
Gain on sale of equity investments | $ 566 | $ (1,028) | |
Condor [Member] | |||
Advances | 21 | ||
Unrecognized loss | 273 | ||
Equity share of net loss | 271 | ||
Total recognized loss | 544 | ||
Investment | 0 | ||
Note receivable | 6,979 | ||
Valuation allowance | $ 5,737 | ||
Unrecognized losses in excess of basis | 0 | ||
Accrued interest | $ 121 | ||
Management services fee | 0 | 56 | |
Total fees billed to Condor | 273 | 397 | |
Receivable related to working interest in Niobrara Asset | 30 | ||
Loan to Condor for production related expense | $ 1,853 | ||
Gain on sale of equity investments | $ 566 |
10. NOTES PAYABLE (Details)
10. NOTES PAYABLE (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Debt Disclosure [Abstract] | |
Gross proceeds from issuance of Initial Notes | $ 34,500 |
Deferred financing costs - paid underwriting fees | (5,382) |
Original debt issue discount | (1,725) |
Net Proceeds | 27,393 |
Allocation of proceeds to sale of assets (recorded as additional debt issue discount) | |
Allocated to Wattenberg Asset acquired from Continental sold | 8,707 |
Allocated to Mississippian Assets sold | 1,615 |
Allocated to Asia Sixth interest sold | 3,055 |
Net proceeds allocated to sales of properties | 13,377 |
Net proceeds allocated to Initial Notes | 21,123 |
Total proceeds | $ 34,500 |
10. NOTES PAYABLE (Details Narr
10. NOTES PAYABLE (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred interest | $ 2,527 | |
Deferred principal | $ 519 | |
Number of warrant shares issued | 3,100,000 | |
Net proceeds from drilling activities | $ 1,593 | |
Amortization of the deferred financing costs | 148 | $ 53 |
Fees and expenses | 13,500 | |
Amortization of debt discount | 4,418 | 3,790 |
Amortization of deferred financing costs | 2,101 | 1,361 |
Interest expense | 4,869 | 5,708 |
Unamortized debt discount | 113 | 132 |
Unamortized debt discount and deferred financing costs | 11,801 | 18,143 |
Debt premium | 4,418 | 3,375 |
Payment of outstandng outstanding Initial Notes | 863 | 905 |
Bridge Note Financing | ||
Accrued Interest | 491 | |
Interest expense | 58 | 614 |
Unamortized debt premium | 113 | 132 |
Debt premium | 563 | |
Loss on debt extinguishment | 823 | |
Additional PIK | 48 | |
MIE Jurassic Energy Corporation | ||
Principal and interest balance | 61,700 | |
Interest expense | 574 | $ 1,203 |
Loss on debt extinguishment | 2,192 | |
Available borrowings | 4,925 | |
Subordinated Note Payable Assumed [Member] | ||
Deferred interest | 2,527 | |
Deferred principal | 519 | |
Interest expense | $ 1,055 |
11. COMMITMENTS AND CONTINGEN55
11. COMMITMENTS AND CONTINGENCIES (Details Narrative) $ in Thousands | Dec. 31, 2015USD ($) |
Accrued Expenses | $ 2,620 |
Lease One [Member] | |
Obligation under lease | 30 |
Lease Two [Member] | |
Obligation under lease | $ 255 |
12. SHAREHOLDERS' EQUITY (DEFI
12. SHAREHOLDERS' EQUITY (DEFICIT) (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Shareholders Equity Deficit Details Narrative | ||
Series A convertible preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Series A convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Series A preferred stock outstanding | 66,625 | 0 |
Common stock issued | 200,000,000 | 200,000,000 |
Common stock issued per share | $ 0.001 | $ 0.001 |
Stock compensation expense | $ 2,467 | |
Unamortized stock compensation expense | $ 796 |
13. STOCK OPTIONS AND WARRANT57
13. STOCK OPTIONS AND WARRANTS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Warrant [Member] | ||
Number of Shares | ||
Number of Options Outstanding, Beginning | 6,594,129 | 3,053,370 |
Number of Options Granted | 1,650,115 | 5,034,092 |
Number of Options Exercised | (58,329) | |
Number of Options Forfeited and cancelled | (440,962) | (1,435,004) |
Number of Options Outstanding, Ending | 7,803,282 | 6,594,129 |
Exercisable | 7,803,282 | 6,594,129 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $ 2.13 | $ 4.12 |
Weighted Average Exercise Price Granted | 0.89 | 1.50 |
Weighted Average Exercise Price Exercised | 0.27 | |
Weighted Average Exercise Price Forfeited and cancelled | 3.67 | 4.24 |
Weighted Average Exercise Price Outstanding, Ending | 1.78 | 2.13 |
Weighted Average Exercise Price Exercisable | $ 1.78 | $ 2.13 |
Weighted Average Remaining Contract Term (years) | ||
Weighted Average Remaining Contract Term (years), Beginning | 3 years 10 months 24 days | 2 years 6 months |
Weighted Average Remaining Contract Term (years), Ending | 3 years | 3 years 10 months 24 days |
Weighted Average Remaining Contract Term (years), Exercisable | 3 years | 3 years 10 months 24 days |
Stock Options [Member] | ||
Number of Shares | ||
Number of Options Outstanding, Beginning | 1,827,224 | 1,404,724 |
Number of Options Granted | 1,265,000 | 447,500 |
Number of Options Exercised | (19,445) | (25,000) |
Number of Options Forfeited and cancelled | (13,889) | |
Number of Options Outstanding, Ending | 3,058,890 | 1,827,224 |
Exercisable | 2,177,540 | 1,317,024 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $ 1.08 | $ 0.80 |
Weighted Average Exercise Price Granted | 0.37 | 1.92 |
Weighted Average Exercise Price Exercised | 0.30 | 0.24 |
Weighted Average Exercise Price Forfeited and cancelled | 0.30 | |
Weighted Average Exercise Price Outstanding, Ending | 0.80 | 1.08 |
Weighted Average Exercise Price Exercisable | $ 0.76 | $ 0.67 |
Weighted Average Remaining Contract Term (years) | ||
Weighted Average Remaining Contract Term (years), Beginning | 6 years 6 months | 8 years 1 month 6 days |
Weighted Average Remaining Contract Term (years), Ending | 4 years 9 months 18 days | 6 years 6 months |
Weighted Average Remaining Contract Term (years), Exercisable | 5 years 1 month 6 days | 7 years 3 months 18 days |
13. STOCK OPTIONS AND WARRANT58
13. STOCK OPTIONS AND WARRANTS (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Option 1 [Member] | ||
Exercise Price | $ 0.24 | $ 0.24 |
Weighted Average Remaining Life (years) | 2 months 12 days | 6 months |
Options Outstanding | 121,667 | 121,667 |
Options Exercisable | 121,667 | 121,667 |
Stock Option 2 [Member] | ||
Exercise Price | $ 0.30 | $ 0.30 |
Weighted Average Remaining Life (years) | 1 month 6 days | 2 months 12 days |
Options Outstanding | 26,001 | 59,335 |
Options Exercisable | 26,001 | 59,335 |
Stock Option 3 [Member] | ||
Exercise Price | $ 0.37 | $ 0.51 |
Weighted Average Remaining Life (years) | 1 year 7 months 6 days | 4 years 4 months 24 days |
Options Outstanding | 1,265,000 | 1,090,800 |
Options Exercisable | 647,500 | 1,090,800 |
Stock Option 4 [Member] | ||
Exercise Price | $ 0.51 | $ 1.41 |
Weighted Average Remaining Life (years) | 2 years 3 months 18 days | 3 months 18 days |
Options Outstanding | 1,090,800 | 100,000 |
Options Exercisable | 1,090,800 | 0 |
Stock Option 5 [Member] | ||
Exercise Price | $ 1.41 | $ 1.94 |
Weighted Average Remaining Life (years) | 1 month 6 days | 8 months 12 days |
Options Outstanding | 100,000 | 267,500 |
Options Exercisable | 40,000 | 0 |
Stock Option 6 [Member] | ||
Exercise Price | $ 1.94 | $ 2.50 |
Weighted Average Remaining Life (years) | 3 months 18 days | 2 months 12 days |
Options Outstanding | 267,500 | 80,000 |
Options Exercisable | 131,000 | 0 |
Stock Option 7 [Member] | ||
Exercise Price | $ 2.50 | $ 3.75 |
Weighted Average Remaining Life (years) | 1 month 6 days | 2 months 12 days |
Options Outstanding | 80,000 | 104,500 |
Options Exercisable | 32,000 | 41,800 |
Stock Option 8 [Member] | ||
Exercise Price | $ 3.75 | $ 30.24 |
Weighted Average Remaining Life (years) | 1 month 6 days | |
Options Outstanding | 104,500 | 2,976 |
Options Exercisable | 85,150 | 2,976 |
Stock Option 9 [Member] | ||
Exercise Price | $ 30.24 | $ 67.20 |
Options Outstanding | 2,976 | 446 |
Options Exercisable | 2,976 | 446 |
Stock Option 10 [Member] | ||
Exercise Price | $ 67.20 | |
Options Outstanding | 446 | |
Options Exercisable | 446 | |
Stock Options [Member] | ||
Weighted Average Remaining Life (years) | 4 years 9 months 18 days | 6 years 6 months |
Options Outstanding | 3,058,890 | 1,827,224 |
Options Exercisable | 2,177,540 | 1,317,024 |
Stock Options [Member] | Minimum [Member] | ||
Exercise Price | $ 0.24 | $ 0.24 |
Stock Options [Member] | Maximum [Member] | ||
Exercise Price | $ 67.20 | $ 67.20 |
13. STOCK OPTIONS AND WARRANT59
13. STOCK OPTIONS AND WARRANTS (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Warrant 1 [Member] | ||
Warrants Exercise Price | $ 0.44 | $ 1 |
Weighted Average Remaining Life (years) | 2 years 9 months 18 days | |
Warrants Outstanding | 100,000 | 3,700,758 |
Warrants Exercisable | 100,000 | 3,700,758 |
Warrants 2 [Member] | ||
Warrants Exercise Price | $ 0.75 | $ 2.25 |
Weighted Average Remaining Life (years) | 4 months 24 days | |
Warrants Outstanding | 1,201,004 | 107,628 |
Warrants Exercisable | 1,201,004 | 107,628 |
Warrant 3[Member] | ||
Warrants Exercise Price | $ 1 | $ 2.34 |
Weighted Average Remaining Life (years) | 1 year 10 months 24 days | 2 months 12 days |
Warrants Outstanding | 3,700,758 | 166,684 |
Warrants Exercisable | 3,700,758 | 166,684 |
Warrant 4[Member] | ||
Warrants Exercise Price | $ 1.50 | $ 2.50 |
Weighted Average Remaining Life (years) | 1 month 6 days | 7 months 6 days |
Warrants Outstanding | 349,111 | 1,000,000 |
Warrants Exercisable | 349,111 | 1,000,000 |
Warrant 5[Member] | ||
Warrants Exercise Price | $ 2.34 | $ 3.75 |
Weighted Average Remaining Life (years) | 1 month 6 days | |
Warrants Outstanding | 166,684 | 566,668 |
Warrants Exercisable | 166,684 | 566,668 |
Warrant 6[Member] | ||
Warrants Exercise Price | $ 2.50 | $ 4.50 |
Weighted Average Remaining Life (years) | 4 months 24 days | 1 month 6 days |
Warrants Outstanding | 1,000,000 | 566,668 |
Warrants Exercisable | 1,000,000 | 566,668 |
Warrant 7[Member] | ||
Warrants Exercise Price | $ 3.75 | $ 5.25 |
Weighted Average Remaining Life (years) | 1 month 6 days | 1 month 6 days |
Warrants Outstanding | 400,001 | 485,723 |
Warrants Exercisable | 400,001 | 485,723 |
Warrant 8 [Member] | ||
Warrants Exercise Price | $ 4.50 | |
Warrants Outstanding | 400,001 | |
Warrants Exercisable | 400,001 | |
Warrant 9[Member] | ||
Warrants Exercise Price | $ 5.25 | |
Weighted Average Remaining Life (years) | 1 month 6 days | |
Warrants Outstanding | 485,723 | |
Warrants Exercisable | 485,723 | |
Warrant [Member] | ||
Weighted Average Remaining Life (years) | 3 years | 3 years 10 months 24 days |
Warrants Outstanding | 7,803,282 | 6,594,129 |
Warrants Exercisable | 7,803,282 | 6,594,129 |
Minimum [Member] | Warrant [Member] | ||
Warrants Exercise Price | $ 1 | $ 1 |
Maximum [Member] | Warrant [Member] | ||
Warrants Exercise Price | $ 5.25 | $ 5.25 |
13. STOCK OPTIONS AND WARRANT60
13. STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Recognized stock option based compensation expense | $ 406 | |
Unamortized stock options expense | 111 | |
Intrinsic value of options outstanding | 6 | |
Intrinsic value of options exercisable | $ 6 | |
Blast 2003 Stock Option Plan and 2009 Stock Incentive Plan | ||
Number of Options Granted | 3,424 | 3,424 |
Number of Options Outstanding | 3,424 | 3,424 |
Number of Options Exercisable | 3,424 | 3,424 |
2012 Incentive Plan | ||
Common stock authorized to issue | 10,000,000 | |
Restricted stock issued | 4,757,660 | |
Shares issued upon exercise | 1,817,000 | |
Shares remain available for future issuancce | 3,425,340 | |
PEDCO 2012 Equity Incentive Plan | ||
Restricted stock granted | 571,115 | |
Common stock granted | 310,136 | |
Warrant [Member] | ||
Recognized stock option based compensation expense | $ 702 | $ 228 |
Intrinsic value of options outstanding | 0 | |
Intrinsic value of options exercisable | $ 0 |
14. RELATED PARTY TRANSACTION61
14. RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 07, 2015 | Feb. 23, 2015 |
Accounts receivable | $ 483 | $ 1,578 | |
GGE [Member] | |||
Accounts receivable | $ 19 | ||
Current deferred financing costs | 102 | ||
Long-term deferred financing costs | 34 | ||
Accrued expenses | (187) | ||
Current notes payable-Secured Promissory Notes, net of discount | (134) | ||
Long-term notes payable-Secured Promissory Notes, net of discount | (4,857) | ||
Net assets | $ (5,023) |
14. RELATED PARTY TRANSACTION62
14. RELATED PARTY TRANSACTIONS (Details Narrative) - Condor [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Advances | $ 21 | |
Accrued interest | $ 491 | |
Accounts payable | 4,925 | |
Production related expenses | 30 | |
Capital expenditures incurred for drilling of three wells | 1,853 | |
Expenses related to a management services | 56 | 167 |
Accrued management fees | $ 0 | $ 56 |
15. FAIR VALUE (Details)
15. FAIR VALUE (Details) - Series A Convertible Preferred Stock $ in Thousands | Dec. 31, 2015USD ($) |
Fair value Liability | $ 28,402 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Fair value Liability | 0 |
Significant Other Observable Inputs (Level 2) | |
Fair value Liability | 0 |
Significant Unobservable Inputs (Level 3) | |
Fair value Liability | $ 28,402 |
16. INCOME TAXES (Details)
16. INCOME TAXES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Tax Assets (Liabilities) | ||
Difference in depreciation, depletion, and capitalization methods - oil and natural gas properties | $ 1,863 | $ 1,385 |
Net operating losses | 4,131 | 4,131 |
Impairment - oil and natural gas properties | (1,122) | (1,122) |
Other | 753 | 623 |
Total deferred tax asset | 5,625 | 5,017 |
Less valuation allowance | (5,625) | (5,017) |
Total deferred tax assets | $ 0 | $ 0 |
16. INCOME TAXES (Details Narra
16. INCOME TAXES (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income Taxes Details Narrative | |
Net change in valuation allowance | $ 608 |
Federal net operating loss carryforwards | 62,582 |
State operating loss carryforward | $ 49,922 |