Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | HOUSTON AMERICAN ENERGY CORP | |
Entity Central Index Key | 1,156,041 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 59,510,101 | |
Trading Symbol | HUSA | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 211,559 | $ 392,062 |
Accounts receivable – oil and gas sales | 437,566 | 347,548 |
Prepaid expenses and other current assets | 41,666 | 3,750 |
TOTAL CURRENT ASSETS | 687,791 | 743,360 |
Oil and gas properties, full cost method | ||
Costs subject to amortization | 60,143,292 | 60,139,526 |
Costs not being amortized | 2,312,852 | 2,309,341 |
Office equipment | 90,004 | 90,004 |
Total | 62,546,148 | 62,538,871 |
Accumulated depletion, depreciation, amortization, and impairment | (55,821,790) | (55,725,080) |
PROPERTY AND EQUIPMENT, NET | 6,724,358 | 6,813,791 |
Other assets | 3,167 | 3,167 |
TOTAL ASSETS | 7,418,316 | 7,560,318 |
CURRENT LIABILITIES | ||
Accounts payable | 87,390 | 127,036 |
Accrued expenses | 13,222 | 24,621 |
TOTAL CURRENT LIABILITIES | 100,612 | 151,657 |
LONG-TERM LIABILITIES | ||
Reserve for plugging and abandonment costs | 36,432 | 35,658 |
Deferred rent obligation | 47,926 | 49,245 |
TOTAL LONG-TERM LIABILITIES | 84,358 | 84,903 |
TOTAL LIABILITIES | 184,970 | 236,560 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Preferred stock, par value $0.001; 10,000,000 shares authorized, 2,020 and 2,070 shares issued and outstanding, respectively | 2 | 2 |
Common stock, par value $0.001; 150,000,000 shares authorized 59,510,101 and 59,260,101 shares issued and outstanding, respectively | 59,510 | 59,260 |
Additional paid-in capital | 72,444,552 | 72,482,303 |
Accumulated deficit | (65,270,718) | (65,217,807) |
TOTAL SHAREHOLDERS’ EQUITY | 7,233,346 | 7,323,758 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 7,418,316 | $ 7,560,318 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 2,020 | 2,070 |
Preferred stock, shares outstanding | 2,020 | 2,070 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 59,510,101 | 59,260,101 |
Common stock, shares outstanding | 59,510,101 | 59,260,101 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
OIL AND GAS REVENUE | $ 754,157 | $ 57,633 |
EXPENSES OF OPERATIONS | ||
Lease operating expense and severance tax | 263,285 | 23,154 |
General and administrative expense | 421,724 | 449,343 |
Stock-based compensation | 25,349 | 69,954 |
Depreciation and depletion | 96,710 | 17,696 |
Total operating expenses | 807,068 | 560,147 |
Loss from operations | (52,911) | (502,514) |
OTHER INCOME | ||
Interest income | 115 | |
Total other income | 115 | |
Net loss before taxes | (52,911) | (502,399) |
Income tax expense | ||
Net loss | $ (52,911) | $ (502,399) |
Basic and diluted loss per common share | $ 0 | $ (0.01) |
Based and diluted weighted average number of common shares outstanding | 59,460,101 | 51,277,388 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (52,911) | $ (502,399) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation and depletion | 96,710 | 17,696 |
Accretion of asset retirement obligation | 774 | 558 |
Stock-based compensation | 25,349 | 69,954 |
Changes in operating assets and liabilities: | ||
Decrease/(increase) in accounts receivable | (90,018) | |
Decrease/(increase) in prepaid expenses and other current assets | (37,916) | (33,750) |
Increase/(decrease) in accounts payable and accrued expenses | (51,045) | 86,003 |
Increase/(decrease) in deferred rent | (1,319) | |
Net cash used in operating activities | (110,376) | (361,938) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payments for the acquisition and development of oil and gas properties | (7,277) | (997,985) |
Net cash used in investing activities | (7,277) | (997,985) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payment of Preferred Stock dividends | (62,850) | |
Proceeds from issuance of Series A Preferred Stock | 1,200,000 | |
Net cash provided by (used in) financing activities | (62,850) | 1,200,000 |
Decrease in cash | (180,503) | (159,923) |
Cash, beginning of period | 392,062 | 481,172 |
Cash, end of period | 211,559 | 321,249 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Interest paid | ||
Taxes paid | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Conversion of Series A Convertible Preferred Stock to common stock | 250 | |
Retirement of treasury shares | $ 174,125 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements of Houston American Energy Corp., a Delaware corporation (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for a complete financial presentation. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited consolidated financial statements. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes, which are included as part of the Company’s Form 10-K for the year ended December 31, 2017. Consolidation The accompanying consolidated financial statements include all accounts of the Company and its subsidiaries (HAEC Louisiana E&P, Inc., HAEC Oklahoma E&P, Inc., and HAEC Caddo Lake E&P, Inc.). All significant inter-company balances and transactions have been eliminated in consolidation. Accounting Principles and Use of Estimates The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews its estimates, including those related to such potential matters as litigation, environmental liabilities, income taxes and the related valuation allowance, determination of proved reserves of oil and gas and asset retirement obligations. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates. Reclassifications Certain amounts for prior periods have been reclassified to conform to the current presentation. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk include cash, cash equivalents and any marketable securities. The Company had cash deposits of $6,967 in Colombian banks at March 31, 2018 that are not insured by the FDIC. The Company has not experienced any losses on its deposits of cash and cash equivalents. Revenue Recognition ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” Revenue Recognition (Topic 605) The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to marketers, gatherers, and refiners. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, direct end-users, industrial users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to direct end-users, refiners, and marketers. Payment is generally received from the customer in the month following delivery. Contracts with customers have varying terms, including spot sales or month-to-month contracts, contracts with a finite term, and life-of-field contracts where all production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs. Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. Loss per Share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares that then shared in the earnings of the Company. The Company’s only outstanding potentially dilutive securities are stock options. For the three months ended March 31, 2018 and 2017, using the treasury stock method, there were no outstanding ‘in-the-money’ options that would have increased our diluted weighted average shares outstanding and, due to losses during these periods, all outstanding options were excluded from the diluted earnings per share calculation because their effect would have been anti-dilutive. Recently Adopted Accounting Pronouncements See discussion of the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” In August 2016, the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, a new lease standard requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company has evaluated the adoption of the standard and, due to there being only one operating lease currently in place, there will be minimal impact of the standard on its consolidated financial statements. The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. Subsequent Events The Company has evaluated all transactions from March 31, 2018 through the financial statement issuance date for subsequent event disclosure consideration. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS Change in Accounting Policy The Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” Exploration and Production There were no significant changes to the timing or valuation of revenue recognized for sales of production from exploration and production activities. Disaggregation of Revenue from Contracts with Customers The following table disaggregates revenue by significant product type for the three months ended March 31, 2018: Oil sales $ 485,532 Natural gas sales 268,625 Natural gas liquids sales — Total revenue from customers $ 754,157 There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of December 31, 2017 or March 31, 2018. |
Oil and Gas Properties
Oil and Gas Properties | 3 Months Ended |
Mar. 31, 2018 | |
Oil and Gas Property [Abstract] | |
Oil and Gas Properties | NOTE 3 – OIL AND GAS PROPERTIES During the three months ended March 31, 2018, the Company invested $7,277, net, for the acquisition and development of oil and gas properties, consisting of (1) cost of development of U.S. properties of $3,766, net, principally attributable to acreage in Reeves County, Texas, and (2) preparation and evaluation costs in Colombia of $3,511. Of the amount invested, the Company capitalized $3,511 to oil and gas properties not subject to amortization and capitalized $3,766 to oil and gas properties subject to amortization. Geographical Information The Company currently has properties in two geographical areas, the United States and Colombia. Revenues for the three months ended March 31, 2018 and long lived assets (net of depletion, amortization, and impairments) as of March 31, 2018 attributable to each geographical area are presented below: Three Months Ended March 31, 2018 As of March 31, 2018 Revenues Long Lived Assets, Net United States $ 754,157 $ 4,411,506 Colombia — 2,312,852 Total $ 754,157 $ 6,724,358 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | NOTE 4 – STOCK-BASED COMPENSATION EXPENSE In 2008, the Company’s Board of Directors adopted the Houston American Energy Corp. 2008 Equity Incentive Plan (the “2008 Plan”). The terms of the 2008 Plan, as amended in 2012 and 2013, allow for the issuance of up to 6,000,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock. Persons eligible to participate in the Plans are key employees, consultants and directors of the Company. In March 2017, the Company’s Board of Directors adopted, subject to shareholder approval, the Houston American Energy Corp. 2017 Equity Incentive Plan (the “2017 Plan” and, together with the 2008 Plan, the “Plans”). The terms of the 2017 Plan, allow for the issuance of up to 5,000,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock. Persons eligible to participate in the Plans are key employees, consultants and directors of the Company. The Company periodically grants options to employees, directors and consultants under the Plans and is required to make estimates of the fair value of the related instruments and recognize expense over the period benefited, usually the vesting period. Stock Option Activity In February and March 2018, options to purchase an aggregate of 1,500,000 shares were granted to an executive officer and a non-officer employee of the Company. All of the options have a ten-year life and vest 1/3 on each of the first three anniversaries of the grant date. 1,000,000 of the options are exercisable at $0.2922 per share and 500,000 of the options are exercisable at $0.30, the fair market value on respective dates of grant. The options were valued on the date of grant at $254,394 using the Black-Scholes option-pricing model with the following parameters: (1) risk-free interest rate of 2.68%; (2) expected life in years of 5.78; (3) expected stock volatility of 105.4%; and (4) expected dividend yield of 0%. The Company determined the options qualify as ‘plain vanilla’ under the provisions of SAB 107 and the simplified method was used to estimate the expected option life. A summary of stock option activity and related information for the three months ended March 31, 2018 is presented below: Options Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at January 1, 2018 6,012,165 $ 1.86 Granted 1,500,000 0.29 Exercised — — Forfeited — — Outstanding at March 31, 2018 7,512,165 $ 1.55 $ 306,283 Exercisable at March 31, 2018 5,252,165 $ 2.09 $ 186,253 During the three months ended March 31, 2018, the Company recognized $23,915 of stock-based compensation expense attributable to the amortization of stock options. As of March 31, 2018, total unrecognized stock-based compensation expense related to non-vested stock options was $292,997. The unrecognized expense is expected to be recognized over a weighted average period of 2.09 years and the weighted average remaining contractual term of the outstanding options and exercisable options at March 31, 2018 is 6.5 years and 5.3 years, respectively. Shares available for issuance under the 2008 Plan as of March 31, 2018 totaled 87,835. Shares available for issuance under the 2017 Plan, as of March 31, 2018, totaled 3,400,000. Stock-Based Compensation Expense The following table reflects total stock-based compensation recorded by the Company for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Stock-based compensation expense included in general and administrative expense $ 25,349 $ 69,954 Earnings per share effect of share-based compensation expense – basic and diluted $ (0.00 ) $ (0.00 ) |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Capital Stock | NOTE 5 – CAPITAL STOCK Series A Convertible Preferred Stock During the three months ended March 31, 2018, (i) 50 shares of Series A Convertible Preferred Stock were converted into 250,000 shares of common stock and (ii) the Company paid dividends on Series A Convertible Preferred Stock in the amount of $34,500. At March 31, 2018, there were 1,125 shares of Series A Convertible Preferred Stock issued and outstanding. Series B Convertible Preferred Stock During the three months ended March 31, 2018, the Company paid dividends on Series B Convertible Preferred Stock in the amount of $28,350. At March 31, 2018, there were 895 shares of Series B Convertible Preferred Stock issued and outstanding. Warrants A summary of warrant activity and related information for 2018 is presented below: Warrants Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding at January 1, 2018 3,651,680 $ 0.44 Issued — — Exercised — — Expired 3,001,680 0.43 Outstanding at March 31, 2018 650,000 $ 0.50 $ — Exercisable at March 31, 2018 612,500 $ 0.50 $ — During the three months ended March 31, 2018, the Company recognized $1,344 of stock-based compensation expense attributable to the amortization of warrants. As of March 31, 2018, total unrecognized stock-based compensation expense related to non-vested stock warrants was $13,094. The unrecognized expense is expected to be recognized over a weighted average period of 3.76 years and the weighted average remaining contractual term of the outstanding warrants and exercisable warrants at March 31, 2018 is 0.51 years and 0.31 years, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 6 - COMMITMENTS AND CONTINGENCIES Lease Commitment The Company leases office facilities under an operating lease agreement that expires October 31, 2022. As of March 31, 2018, the lease agreement requires future payments as follows: Year Amount 2018 $ 94,484 2019 128,348 2020 130,717 2021 133,087 2022 112,551 Total $ 594,187 Total base rental expense was $30,150, and $31,748 for the three months ended March 31, 2018 and March 31, 2017, respectively. The Company does not have any capital leases or other operating lease commitments. Employment Commitments In March 2017, the Company’s compensation committee approved revised compensation arrangements for John P. Boylan, Chairman, Chief Executive Officer and President of the Company. The principal terms of Mr. Boylan’s compensation, as so revised, include (i) an annual base salary of $250,000, effective January 1, 2017, with $10,000 per month being payable on a current basis, and full salary and accrued unpaid salary being payable at such time as the compensation committee determines that the Company has sufficient financial capability to pay such amounts; (ii) annual bonuses as determined by the compensation committee; (iii) grant, pursuant to the Company’s Production Incentive Compensation Plan, of a 1% interest in the Company revenues from all wells drilled on the Company’s Reeves County, Texas acreage; and (iv) grant of a stock option to purchase 500,000 shares of common stock. During 2017, the compensation committee determined that the Company had sufficient financial capability to pay all deferred and accrued salary at which time such accrued amount was paid and the Company began paying the full annual base salary. |
Basis of Presentation and Sig12
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation The accompanying consolidated financial statements include all accounts of the Company and its subsidiaries (HAEC Louisiana E&P, Inc., HAEC Oklahoma E&P, Inc., and HAEC Caddo Lake E&P, Inc.). All significant inter-company balances and transactions have been eliminated in consolidation. |
Accounting Principles and Use of Estimates | Accounting Principles and Use of Estimates The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews its estimates, including those related to such potential matters as litigation, environmental liabilities, income taxes and the related valuation allowance, determination of proved reserves of oil and gas and asset retirement obligations. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates. |
Reclassifications | Reclassifications Certain amounts for prior periods have been reclassified to conform to the current presentation. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk include cash, cash equivalents and any marketable securities. The Company had cash deposits of $6,967 in Colombian banks at March 31, 2018 that are not insured by the FDIC. The Company has not experienced any losses on its deposits of cash and cash equivalents. |
Revenue Recognition | Revenue Recognition ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” Revenue Recognition (Topic 605) The Company’s revenue is comprised entirely of revenue from exploration and production activities. The Company’s oil is sold primarily to marketers, gatherers, and refiners. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, direct end-users, industrial users, local distribution companies, and natural-gas marketers. NGLs are sold primarily to direct end-users, refiners, and marketers. Payment is generally received from the customer in the month following delivery. Contracts with customers have varying terms, including spot sales or month-to-month contracts, contracts with a finite term, and life-of-field contracts where all production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs. Revenues are recognized for the sale of the Company’s net share of production volumes. Sales on behalf of other working interest owners and royalty interest owners are not recognized as revenues. |
Loss per Share | Loss per Share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares that then shared in the earnings of the Company. The Company’s only outstanding potentially dilutive securities are stock options. For the three months ended March 31, 2018 and 2017, using the treasury stock method, there were no outstanding ‘in-the-money’ options that would have increased our diluted weighted average shares outstanding and, due to losses during these periods, all outstanding options were excluded from the diluted earnings per share calculation because their effect would have been anti-dilutive. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements See discussion of the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” In August 2016, the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, a new lease standard requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company has evaluated the adoption of the standard and, due to there being only one operating lease currently in place, there will be minimal impact of the standard on its consolidated financial statements. The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows. |
Subsequent Events | Subsequent Events The Company has evaluated all transactions from March 31, 2018 through the financial statement issuance date for subsequent event disclosure consideration. |
Revenue from Contracts with C13
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregates Revenue by Significant Product | Disaggregation of Revenue from Contracts with Customers The following table disaggregates revenue by significant product type for the three months ended March 31, 2018: Oil sales $ 485,532 Natural gas sales 268,625 Natural gas liquids sales — Total revenue from customers $ 754,157 |
Oil and Gas Properties (Tables)
Oil and Gas Properties (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Oil and Gas Property [Abstract] | |
Schedule of Revenues and Long Lived Assets Attributable to Geographical Area | Revenues for the three months ended March 31, 2018 and long lived assets (net of depletion, amortization, and impairments) as of March 31, 2018 attributable to each geographical area are presented below: Three Months Ended March 31, 2018 As of March 31, 2018 Revenues Long Lived Assets, Net United States $ 754,157 $ 4,411,506 Colombia — 2,312,852 Total $ 754,157 $ 6,724,358 |
Stock-Based Compensation Expe15
Stock-Based Compensation Expense (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity and related information for the three months ended March 31, 2018 is presented below: Options Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at January 1, 2018 6,012,165 $ 1.86 Granted 1,500,000 0.29 Exercised — — Forfeited — — Outstanding at March 31, 2018 7,512,165 $ 1.55 $ 306,283 Exercisable at March 31, 2018 5,252,165 $ 2.09 $ 186,253 |
Schedule of Share-based Compensation Expense | The following table reflects total stock-based compensation recorded by the Company for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Stock-based compensation expense included in general and administrative expense $ 25,349 $ 69,954 Earnings per share effect of share-based compensation expense – basic and diluted $ (0.00 ) $ (0.00 ) |
Capital Stock (Tables)
Capital Stock (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of Warrant Activity | A summary of warrant activity and related information for 2018 is presented below: Warrants Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding at January 1, 2018 3,651,680 $ 0.44 Issued — — Exercised — — Expired 3,001,680 0.43 Outstanding at March 31, 2018 650,000 $ 0.50 $ — Exercisable at March 31, 2018 612,500 $ 0.50 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Payments Under Lease Agreement | As of March 31, 2018, the lease agreement requires future payments as follows: Year Amount 2018 $ 94,484 2019 128,348 2020 130,717 2021 133,087 2022 112,551 Total $ 594,187 |
Basis of Presentation and Sig18
Basis of Presentation and Significant Accounting Policies (Details Narrative) | Mar. 31, 2018USD ($) |
Accounting Policies [Abstract] | |
Cash deposits but not insured FDIC's | $ 6,967 |
Revenue from Contracts with C19
Revenue from Contracts with Customers (Details Narrative) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | ||
Remaining performance obligations |
Revenue from Contracts with C20
Revenue from Contracts with Customers - Schedule of Disaggregates Revenue by Significant Product (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Total revenue from customers | $ 754,157 |
Oil Sales [Member] | |
Total revenue from customers | 485,532 |
Natural Gas Sales [Member] | |
Total revenue from customers | 268,625 |
Natural Gas Liquids Sales [Member] | |
Total revenue from customers |
Oil and Gas Properties (Details
Oil and Gas Properties (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Investment in development of oil and gas properties | $ 7,277 |
Properties Not Subject to Amortization [Member] | |
Capitalized oil and gas properties | 3,511 |
Properties Subject to Amortization [Member] | |
Capitalized oil and gas properties | 3,766 |
United States [Member] | |
Acquisition and development cost of oil and gas properties | 3,766 |
Colombia [Member] | |
Preparation and evaluation costs | $ 3,511 |
Oil and Gas Properties - Schedu
Oil and Gas Properties - Schedule of Revenues and Long Lived Assets Attributable to Geographical Area (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | $ 754,157 | $ 57,633 |
Long Lived Assets, Net | 6,724,358 | |
Reportable Geographical Components [Member] | United States [Member] | ||
Revenue | 754,157 | |
Long Lived Assets, Net | 4,411,506 | |
Reportable Geographical Components [Member] | Colombia [Member] | ||
Revenue | ||
Long Lived Assets, Net | $ 2,312,852 |
Stock-Based Compensation Expe23
Stock-Based Compensation Expense (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2018 | Feb. 28, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2008 | |
Number of stock option shares granted | 1,500,000 | ||||
Number of stock option exercisable | 5,252,165 | 5,252,165 | |||
Options granted exercise price of per share | $ 0.29 | ||||
Stock compensation amortized expense | $ 23,915 | ||||
Unrecognized share-based compensation expense related to non-vested stock options | $ 292,997 | $ 292,997 | |||
Weighted average period for recognition of compensation expense | 2 years 1 month 2 days | ||||
Weighted average remaining contractual term of the outstanding options | 6 years 6 months | ||||
Weighted average remaining contractual term of the exercisable options | 6 years 6 months | ||||
Executive and Non Executive Officer [Member] | |||||
Number of stock option shares granted | 1,500,000 | 1,500,000 | |||
Description on vesting of stock options | All of the options have a ten-year life and vest 1/3 on each of the first three anniversaries of the grant date. | All of the options have a ten-year life and vest 1/3 on each of the first three anniversaries of the grant date. | |||
Stock option grand period | 10 years | 10 years | |||
Number of stock option exercisable | 500,000 | 1,000,000 | 500,000 | ||
Options granted exercise price of per share | $ 0.30 | $ 0.2922 | |||
Fair value of options granted | $ 254,394 | $ 254,394 | |||
Risk free interest rate | 2.68% | 2.68% | |||
Stock option expected life | 5 years 9 months 11 days | 5 years 9 months 11 days | |||
Expected stock volatility | 105.40% | 105.40% | |||
Expected dividend yield | 0.00% | 0.00% | |||
2008 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Number of options authorized to purchase shares of common stock | 6,000,000 | ||||
2017 Equity Incentive Plan [Member] | |||||
Shares available for issuance | 3,400,000 | 3,400,000 | |||
2017 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Number of options authorized to purchase shares of common stock | 5,000,000 | ||||
2008 Plan [Member] | |||||
Shares available for issuance | 87,835 | 87,835 |
Stock-Based Compensation Expe24
Stock-Based Compensation Expense - Summary of Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Options Outstanding at beginning of the period | shares | 6,012,165 |
Options Granted | shares | 1,500,000 |
Options Exercised | shares | |
Options Forfeited | shares | |
Options Outstanding at end of the period | shares | 7,512,165 |
Options Outstanding Exercisable | shares | 5,252,165 |
Weighted-Average Exercise Price Outstanding at beginning of the period | $ / shares | $ 1.86 |
Weighted-Average Exercise Price Granted | $ / shares | 0.29 |
Weighted-Average Exercise Price Exercised | $ / shares | |
Weighted-Average Exercise Price Forfeited | $ / shares | |
Weighted-Average Exercise Price Outstanding at end of the period | $ / shares | 1.55 |
Weighted-Average Exercise Price Outstanding Exercisable | $ / shares | $ 2.09 |
Aggregate Intrinsic Value Outstanding at end of the period | $ | $ 306,283 |
Aggregate Intrinsic Value Outstanding Exercisable | $ | $ 186,253 |
Stock-Based Compensation Expe25
Stock-Based Compensation Expense - Schedule of Share-based Compensation Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock-based compensation expense included in general and administrative expense | $ 25,349 | $ 69,954 |
Earnings per share effect of share-based compensation expense – basic and diluted | $ 0 | $ 0 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Preferred stock, shares issued | 2,020 | 2,070 |
Preferred stock, shares outstanding | 2,020 | 2,070 |
Stock compensation amortized expense | $ 23,915 | |
Unrecognized share-based compensation expense related to non-vested stock options | $ 292,997 | |
Weighted average period for recognition of compensation expense | 2 years 1 month 2 days | |
Weighted average remaining contractual term of the outstanding options | 6 years 6 months | |
Weighted average remaining contractual term of the exercisable options | 6 years 6 months | |
Warrants [Member] | ||
Stock compensation amortized expense | $ 1,344 | |
Unrecognized share-based compensation expense related to non-vested stock options | $ 13,094 | |
Weighted average period for recognition of compensation expense | 3 years 9 months 3 days | |
Weighted average remaining contractual term of the outstanding options | 6 months 3 days | |
Weighted average remaining contractual term of the exercisable options | 3 months 22 days | |
Series A Convertible Preferred Stock [Member] | ||
Number of shares converted | 50 | |
Conversion of stock, shares converted | 250,000 | |
Payments for dividend | $ 34,500 | |
Preferred stock, shares issued | 1,125 | |
Preferred stock, shares outstanding | 1,125 | |
Series B Convertible Preferred Stock [Member] | ||
Payments for dividend | $ 28,350 | |
Series B Preferred Stock [Member] | ||
Preferred stock, shares issued | 895 | |
Preferred stock, shares outstanding | 895 |
Capital Stock - Summary of Warr
Capital Stock - Summary of Warrant Activity (Details) | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Equity [Abstract] | |
Warrants Outstanding, beginning | 3,651,680 |
Warrants Outstanding, Issued | |
Warrants Outstanding, Exercised | |
Warrants Outstanding, Expired | 3,001,680 |
Warrants Outstanding, ending | 650,000 |
Warrants Outstanding, Exercisable | 612,500 |
Weighted-Average Exercise Price Outstanding, beginning | $ / shares | $ 0.44 |
Weighted-Average Exercise Price, Issued | $ / shares | |
Weighted-Average Exercise Price, Exercised | $ / shares | |
Weighted-Average Exercise Price, Expired | $ / shares | 0.43 |
Weighted-Average Exercise Price Outstanding, ending | $ / shares | $ 0.50 |
Weighted-Average Exercise Price Outstanding, Exercisable | 0.50 |
Aggregate Intrinsic Value Ending | $ | |
Aggregate Intrinsic Value, Exercisable | $ |
Commitments and Contingencies28
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Operating lease agreement expire date | Oct. 31, 2022 | ||
Rental expense | $ 30,150 | $ 31,748 | |
John P. Boylan [Member] | |||
Officers compensation | $ 250,000 | ||
Periodic payment | $ 10,000 | ||
Revenues percentage | 1.00% | ||
Number of option to purchase shares of common stock | 500,000 | 500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Payments Under Lease Agreement (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 94,484 |
2,019 | 128,348 |
2,020 | 130,717 |
2,021 | 133,087 |
2,022 | 112,551 |
Total | $ 594,187 |