Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Nov. 30, 2014 | Jan. 08, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Daybreak Oil & Gas, Inc. | |
Entity Central Index Key | 1164256 | |
Document Type | 10-Q | |
Document Period End Date | 30-Nov-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -26 | |
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 | 51,457,373 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2015 |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $521,026 | $500,431 |
Accounts receivable: | ||
Oil and natural gas sales | 248,272 | 330,343 |
Joint interest participants | 92,583 | 338,950 |
Other receivables, net | 218,107 | 30,039 |
Production revenue receivable - current | 120,000 | 120,000 |
Prepaid expenses and other current assets | 189,493 | 29,397 |
Note receivable - current | 2,162,222 | 793,727 |
Total current assets | 3,551,703 | 2,142,887 |
OIL AND NATURAL GAS PROPERTIES, net, successful efforts method | ||
Proved properties | 3,753,650 | 2,914,965 |
Unproved properties | 1,282,356 | 1,261,156 |
PREPAID DRILLING COSTS | 199,142 | 14,915 |
PRODUCTION REVENUE RECEIVABLE - NON-CURRENT | 65,000 | 155,000 |
DEFERRED FINANCING COSTS, NET | 1,165,033 | 1,326,600 |
NOTE RECEIVABLE - NON-CURRENT | 3,306,068 | 2,756,273 |
OTHER ASSETS | 106,178 | 106,114 |
Total assets | 13,429,130 | 10,677,910 |
CURRENT LIABILITIES: | ||
Accounts payable and other accrued liabilities | 1,458,905 | 2,158,546 |
Accounts payable - related parties | 852,266 | 952,652 |
Accrued interest | 197,648 | 1,587 |
Notes payable - related party | 250,100 | 250,100 |
12% Notes payable, net | 341,572 | 327,871 |
12% Notes payable - related party, net | 247,478 | 237,395 |
Current portion - debt, net | 3,089,209 | 2,024,417 |
Line of credit | 876,948 | 882,369 |
Total current liabilities | 7,314,126 | 6,834,937 |
LONG TERM LIABILITIES: | ||
Long-term debt - net of current portion | 10,874,559 | 6,629,638 |
Asset retirement obligation | 26,175 | 22,079 |
Total liabilities | 18,214,860 | 13,486,654 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' DEFICIT: | ||
Common stock | 51,448 | 55,509 |
Additional paid-in capital | 22,912,221 | 24,607,582 |
Accumulated deficit | -27,750,137 | -27,472,573 |
Total stockholders' deficit | -4,785,730 | -2,808,744 |
Total liabilities and stockholders' deficit | 13,429,130 | 10,677,910 |
Preferred Stock | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock | 0 | 0 |
Series A Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock | $738 | $738 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Common stock, par value in dollars | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 51,448,373 | 55,509,411 |
Common stock, shares outstanding | 51,448,373 | 55,509,411 |
Preferred Stock | ||
Preferred stock, par value in dollars | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value in dollars | $0.00 | $0.00 |
Preferred stock, shares authorized | 2,400,000 | 2,400,000 |
Preferred stock, shares issued | 737,565 | 737,565 |
Preferred stock, shares outstanding | 737,565 | 737,565 |
Preferred stock, cumulative dividend rate | 6.00% | 6.00% |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | |
REVENUE: | ||||
Oil and natural gas sales | $663,650 | $425,035 | $2,518,375 | $1,131,847 |
OPERATING EXPENSES: | ||||
Production expenses | 86,140 | 44,697 | 251,625 | 160,652 |
Exploration and drilling | 7,362 | 10,991 | 20,172 | 245,685 |
Depreciation, depletion, amortization and impairment | 134,873 | 56,922 | 426,366 | 261,641 |
Write down on asset disposal | 0 | 39,254 | 0 | 39,254 |
General and administrative | 230,040 | 347,722 | 849,964 | 943,594 |
Total operating expenses | 458,415 | 499,586 | 1,548,127 | 1,650,826 |
OPERATING INCOME (LOSS) | 205,235 | -74,551 | 970,248 | -518,979 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 378,932 | 135,621 | 833,778 | 135,731 |
Interest expense | -718,586 | -472,166 | -2,081,590 | -946,296 |
Total other income (expense) | -339,654 | -336,545 | -1,247,812 | -810,565 |
NET LOSS | -134,419 | -411,096 | -277,564 | -1,329,544 |
Cumulative convertible preferred stock dividend requirement | -33,098 | -38,113 | -100,020 | -118,165 |
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | ($167,516) | ($449,209) | ($377,584) | ($1,447,709) |
NET LOSS PER COMMON SHARE | ||||
Basic and diluted | $0 | ($0.01) | ($0.01) | ($0.03) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||
Basic and diluted | 51,448,373 | 55,072,884 | 55,035,219 | 50,967,879 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($277,564) | ($1,329,544) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Stock compensation | 2,515 | 10,546 |
Depreciation, depletion, accretion and impairment expense | 426,366 | 300,895 |
Amortization of debt discount | 127,960 | 117,822 |
Amortization of deferred financing costs | 316,126 | 133,020 |
Non-cash interest income | -64 | -158 |
Changes in assets and liabilities: | ||
Accounts receivable, oil and gas sales | 82,071 | -61,579 |
Accounts receivable - joint interest participants | 246,367 | -259,421 |
Accounts receivable - other | -98,558 | 31,638 |
Prepaid expenses and other current assets | -160,096 | -33 |
Accounts payable and other accrued liabilities | -505,498 | -187,796 |
Accounts payable - related parties | -100,386 | 183,470 |
Accrued interest | 195,406 | -20,300 |
Net cash provided by (used in) operating activities | 254,645 | -1,081,440 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to oil and natural gas properties | -1,285,857 | -1,411,468 |
Prepaid drilling costs | -184,227 | -175,906 |
Deferred interest | 655 | -135,553 |
Note receivable | -1,918,290 | -2,208,368 |
Net cash used in investing activities | -3,387,719 | -3,931,295 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from long-term debt | 5,700,000 | 5,592,384 |
Proceeds from warrant exercise | 7,000 | 0 |
Principal payments on long-term debt | -2,202,910 | -298,479 |
Payment of deferred financing fees | -345,000 | -139,476 |
Payments on line of credit | -5,421 | -27,000 |
Net cash provided by financing activities | 3,153,669 | 5,127,429 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 20,595 | 114,694 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 500,431 | 79,996 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 521,026 | 194,690 |
Cash paid for Interest | 1,465,881 | 690,788 |
Cash paid for Income taxes | 0 | 0 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Unpaid additions to oil and natural gas properties | 3,702 | 228,262 |
Conversion of warrants | 1,874 | 0 |
Share-to-warrant exchange | 428 | 0 |
Increase in note receivable for deferred interest | 0 | 317,816 |
Increase in long-term note receivable with corresponding increase in long-term debt | 0 | 362,816 |
Transfer agent balancing adjustment | 140 | 0 |
Increase in note payable for stock acquisition and subsequent retirement | 1,708,447 | 0 |
ARO asset and liability increase | 2,428 | 27,079 |
Common stock and warrants issued for oil and natural gas properties | 0 | 1,073,091 |
Common stock and warrants issued for deferred financing costs | 1,874 | 852,236 |
Unpaid deferred financing fees | 0 | 114,093 |
Repurchase of stock through payment of payroll taxes | 490 | 758 |
Conversion of preferred stock to common stock | $0 | $423 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended |
Nov. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | NOTE 1 — ORGANIZATION AND BASIS OF PRESENTATION: |
Organization | |
Originally incorporated as Daybreak Uranium, Inc., (“Daybreak Uranium”) under the laws of the State of Washington on March 11, 1955, Daybreak Uranium was organized to explore for, acquire, and develop mineral properties in the Western United States. During 2005, management of the Company decided to enter the oil and natural gas exploration and production industry. On October 25, 2005, the Company shareholders approved a name change from Daybreak Mines, Inc. to Daybreak Oil and Gas, Inc. (referred to herein as “Daybreak” or the “Company”) to better reflect the business of the Company. | |
All of the Company’s oil and natural gas production is sold under contracts which are market-sensitive. Accordingly, the Company’s financial condition, results of operations, and capital resources are highly dependent upon prevailing market prices of, and demand for, oil and natural gas. These commodity prices are subject to wide fluctuations and market uncertainties due to a variety of factors that are beyond the control of the Company. These factors include the level of global demand for petroleum products, foreign supply of oil and gas, the establishment of and compliance with production quotas by oil-exporting countries, the relative strength of the U.S. dollar, weather conditions, the price and availability of alternative fuels, and overall economic conditions, both foreign and domestic. | |
Basis of Presentation | |
The accompanying unaudited interim financial statements and notes for 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 for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”). Accordingly, they do not include all of the information and footnote disclosures normally required by accounting principles generally accepted in the United States of America for complete financial statements. | |
In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements have been included and such adjustments are of a normal recurring nature. Operating results for the nine months ended November 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending February 28, 2015. | |
These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2014. | |
Use of Estimates | |
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions. These estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The accounting policies most affected by management’s estimates and assumptions are as follows: | |
• The reliance on estimates of proved reserves to compute the provision for depreciation, depletion and amortization and to determine the amount of any impairment of proved properties; | |
• The valuation of unproved acreage and proved oil and gas properties to determine the amount of any impairment of oil and gas properties; | |
• Judgment regarding the productive status of in-progress exploratory wells to determine the amount of any provision for abandonment; and | |
• Estimates regarding abandonment obligations. |
Going_Concern
Going Concern | 9 Months Ended |
Nov. 30, 2014 | |
Going Concern | |
Going Concern | NOTE 2 — GOING CONCERN: |
Financial Condition | |
The Company’s financial statements for the nine months ended November 30, 2014 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred net losses since entering the oil and natural gas exploration industry and as of November 30, 2014 has an accumulated deficit of $27,750,137 and a working capital deficit of $3,762,423 which raises substantial doubt about the Company’s ability to continue as a going concern. | |
Management Plans to Continue as a Going Concern | |
The Company continues to implement plans to enhance its ability to continue as a going concern. Daybreak currently has an average 36.6% working interest and 28.4% net revenue interest in 20 producing wells in its East Slopes Project located in Kern County, California (the “East Slopes Project”). The revenue from these wells has created a steady and reliable source of revenue. | |
Additionally, the Company has become involved in a shallow oil play in an existing natural gas field in Lawrence County, Kentucky, through its acquisition of an average 25% working interest in approximately 7,300 acres in two large contiguous blocks in the Twin Bottoms Field in Lawrence County, Kentucky. The Company had 10 horizontal oil wells on production in Kentucky during portions of the nine months ended the quarter ended November 30, 2014 and has brought three additional horizontal oil wells onto production in December 2014. Daybreak’s average working interest in these 13 oil wells is 22.4% and the average net revenue interest is 19.6% in these same wells. | |
The Company anticipates revenues will continue to increase as it participates in the drilling of more wells in California and Kentucky. Daybreak plans to continue its development drilling programs in both California and Kentucky at a rate that is compatible with its cash flow and funding opportunities. | |
The Company’s sources of funds in the past have included the debt or equity markets and the sale of assets, while the Company has experienced revenue growth, which has resulted in positive cash flow from its oil and natural gas properties, it has not yet established a consistent positive cash flow on a company-wide basis. It will be necessary for the Company to obtain additional funding from the private or public debt or equity markets in the future. However, the Company cannot offer any assurance that it will be successful in executing the aforementioned plans to continue as a going concern. | |
Daybreak’s financial statements as of November 30, 2014 do not include any adjustments that might result from the inability to implement or execute Daybreak’s plans to improve our ability to continue as a going concern. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Nov. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | NOTE 3 — RECENT ACCOUNTING PRONOUNCEMENTS: |
There are no new accounting pronouncements issued or effective that had or are expected to have, a material impact on the Company’s financial statements. |
Concentration_of_Credit_Risk
Concentration of Credit Risk | 9 Months Ended | ||||||||||||
Nov. 30, 2014 | |||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||
Concentration of Credit Risk | NOTE 4 — CONCENTRATION OF CREDIT RISK: | ||||||||||||
Substantially all of the Company’s trade accounts receivable result from crude oil and natural gas sales in California and Kentucky or joint interest billings to its working interest partners in California. This concentration of customers and joint interest owners may impact the Company’s overall credit risk as these entities could be affected by similar changes in economic conditions as well as other related factors. Trade accounts receivable are generally not collateralized. There were no allowances for doubtful accounts for the Company’s trade accounts receivable at November 30, 2014 and February 28, 2014, as all joint interest owners have a history of paying their obligations. | |||||||||||||
At the Company’s East Slopes project in California, there is only one buyer available for the purchase of all oil production. At the Company’s Twin Bottoms Field project located in Lawrence County, Kentucky, there is only one buyer available for the purchase of the oil production and only one buyer available for the purchase of the natural gas production. At November 30, 2014 and February 28, 2014 these three individual customers represented 100.0% of crude oil and natural gas revenues accounts receivable. If these buyers are unable to resell their products or if they lose a significant sales contract then the Company may incur difficulties in selling its oil and natural gas production. | |||||||||||||
The Company’s oil and natural gas accounts receivable from California and Kentucky sales at November 30, 2014 and February 28, 2014 are set forth in the table below. | |||||||||||||
At November 30, 2014 | At February 28, 2014 | ||||||||||||
Project | Customer | Revenue | Percentage | Revenue | Percentage | ||||||||
Receivable | Receivable | ||||||||||||
California – East Slopes Project (Oil) | Plains Marketing | $ | 152,568 | 61.40% | $ | 244,384 | 74.00% | ||||||
Kentucky – Twin Bottoms Field (Oil) | Appalachian Oil | 83,793 | 33.80% | 85,120 | 25.80% | ||||||||
Kentucky – Twin Bottoms Field (Natural Gas) | Jefferson Gas | 11,911 | 4.80% | 839 | 0.20% | ||||||||
$ | 248,272 | 100.00% | $ | 330,343 | 100.00% | ||||||||
Other receivables balances primarily include amounts due from third parties that were involved in arranging financing transactions for the Company that have not yet been consummated and amounts advanced to certain minority working interest partners in Kentucky. Allowances for doubtful accounts in other receivables relate to amounts due from third parties for financing transactions. Other receivables balances at November 30, 2014 and February 28, 2014 are set forth in the table below: | |||||||||||||
30-Nov-14 | 28-Feb-14 | ||||||||||||
Other receivables | $ | 457,107 | $ | 269,039 | |||||||||
Allowance for doubtful accounts | -239,000 | -239,000 | |||||||||||
$ | 218,107 | $ | 30,039 |
Prepaid_Drilling_Costs
Prepaid Drilling Costs | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Prepaid Expense and Other Assets [Abstract] | ||||||
Prepaid Drilling Costs | NOTE 5 — PREPAID DRILLING COSTS: | |||||
During the nine months ended November 30, 2014 the Company was engaged in a multi-well drilling program at the Twin Bottoms Field in Lawrence County, Kentucky. The Company had made prepayments for drilling costs at November 30, 2014 and February 28, 2014 as set forth in the table below. | ||||||
30-Nov-14 | 28-Feb-14 | |||||
California | $ | 16,452 | $ | 16,452 | ||
Kentucky | 182,690 | -1,537 | ||||
$ | 199,142 | $ | 14,915 |
Oil_and_Gas_Properties
Oil and Gas Properties | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
OIL AND NATURAL GAS PROPERTIES, net, successful efforts method | ||||||
Oil and Gas Properties | NOTE 6 — OIL AND GAS PROPERTIES: | |||||
Oil and gas property balances at November 30, 2014 and February 28, 2014 are set forth in the table below. | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Proved leasehold costs | $ | 6,031 | $ | 2,236 | ||
Unproved leasehold costs | 1,282,356 | 1,261,156 | ||||
Costs of wells and development | 976,740 | 492,970 | ||||
Capitalized exploratory well costs | 4,794,116 | 4,018,899 | ||||
Total cost of oil and gas properties | 7,059,243 | 5,775,261 | ||||
Accumulated depletion, depreciation, amortization and impairment | -2,023,237 | -1,599,140 | ||||
Net oil and gas properties | $ | 5,036,006 | $ | 4,176,121 | ||
Production_Revenue_Receivable
Production Revenue Receivable | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Production Revenue Receivable | ||||||
Production Revenue Receivable | NOTE 7 — PRODUCTION REVENUE RECEIVABLE: | |||||
Production revenue receivable balances of $185,000 in aggregate represent amounts due the Company from a portion of the sale price of a 25% working interest in East Slopes Project in Kern County, California that was acquired through the default of certain original working interest partners in the project. Production revenue receivable balances at November 30, 2014 and February 28, 2014 are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Production revenue receivable – current | $ | 120,000 | $ | 120,000 | ||
Production revenue receivable – non-current | 65,000 | 155,000 | ||||
$ | 185,000 | $ | 275,000 |
Deferred_Financing_Costs
Deferred Financing Costs | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Deferred Finance Costs [Abstract] | ||||||
Deferred Financing Costs | NOTE 8 — DEFERRED FINANCING COSTS: | |||||
Deferred financing costs at November 30, 2014 and February 28, 2014 relate to the original and the amended credit facility with Maximilian Resources LLC, a Delaware limited liability company and successor by assignment to Maximilian Investors LLC (either party, as appropriate, is referred to in these notes to the financial statements as “Maximilian”), are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Deferred financing costs – loan fees | $ | 151,139 | $ | 151,139 | ||
Deferred financing costs – loan commissions | 630,662 | 476,103 | ||||
Deferred financing costs – fair value of warrants | 530,488 | 530,488 | ||||
Deferred financing costs – fair value of common stock | 419,832 | 419,832 | ||||
1,732,121 | 1,577,562 | |||||
Accumulated amortization | -567,088 | -250,962 | ||||
$ | 1,165,033 | $ | 1,326,600 | |||
Deferred financing costs of loan commissions increased $154,559 for the nine months ended November 30, 2014. The Company recognized amortization expense of $316,126 for the nine months ended November 30, 2014. |
Note_Receivable
Note Receivable | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Receivables [Abstract] | ||||||
Note Receivable | NOTE 9 — NOTE RECEIVABLE: | |||||
At November 30, 2014, the Company had advanced $8,312,500 in aggregate to App Energy, LLC, a Kentucky limited liability company (“App”) through its credit facility. Note receivable balances at November 30, 2014 and February 28, 2014 are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Note receivable – current | $ | 2,162,222 | $ | 793,727 | ||
Note receivable – non-current | 3,306,068 | 2,756,273 | ||||
$ | 5,468,290 | $ | 3,550,000 | |||
Accounts_Payable
Accounts Payable | 9 Months Ended |
Nov. 30, 2014 | |
Payables and Accruals [Abstract] | |
Accounts Payable | NOTE 10 — ACCOUNTS PAYABLE: |
On March 1, 2009, the Company became the operator for its East Slopes Project. Additionally, the Company at that time assumed certain original partners’ default liability of approximately $1.5 million representing a 25% working interest in the drilling and completion costs associated with the East Slopes Project four earning well program. The Company subsequently sold the same 25% working interest on June 11, 2009. Of the $1.5 million default, $255,349 remains unpaid and is included in the November 30, 2014 accounts payable balance. |
Accounts_Payable_Related_Parti
Accounts Payable - Related Parties | 9 Months Ended |
Nov. 30, 2014 | |
Related Party Transactions [Abstract] | |
Accounts Payable - Related Parties | NOTE 11 — ACCOUNTS PAYABLE- RELATED PARTIES: |
The November 30, 2014 and February 28, 2014 accounts payable – related parties balances were comprised primarily of salaries of the Company’s Executive Officers and certain employees; directors’ fees; expense reimbursements; and interest to the Company’s President and Chief Executive Officer on the 12% Subordinated Notes further described in Note 12 – Short-Term and Long-Term Borrowings below. Payment of these items has been deferred until the Company’s cash flow situation improves. |
ShortTerm_and_LongTerm_Borrowi
Short-Term and Long-Term Borrowings | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Debt Disclosure [Abstract] | ||||||
Short-Term and Long-Term Borrowings | NOTE 12 — SHORT-TERM AND LONG-TERM BORROWINGS: | |||||
Current Debt | ||||||
Note Payable – Related Party | ||||||
As of November 30, 2014 and February 28, 2014, the Company’s President and Chief Executive Officer had loaned the Company $250,100 in aggregate that has been used for a variety of corporate purposes including an escrow requirement on a loan commitment; extension fees on third party loans; and a reduction of principal on the Company’s credit line with UBS Bank. These loans are non-interest bearing loans and repayment will be made upon a mutually agreeable date in the future. | ||||||
Line of Credit | ||||||
The Company has an existing $890,000 line of credit for working capital purposes with UBS Bank USA (“UBS”), established pursuant to a Credit Line Agreement dated October 24, 2011 that is secured by the personal guarantee of our President and Chief Executive Officer. At November 30, 2014, the Line of Credit had an outstanding balance of $876,948. Interest is payable monthly at a stated reference rate of 0.249% + 337.5 basis points and totaled $23,581 for the nine months ended November 30, 2014. The reference rate is based on the 30 day LIBOR (“London Interbank Offered Rate”) and is subject to change from UBS. | ||||||
12% Subordinated Notes | ||||||
The Company’s 12% Subordinated Notes (“the Notes”) issued pursuant to a March 2010 private placement (of which $250,000 was from a related party) accrue interest at 12% per annum, payable semi-annually on January 29th and July 29th. The note principal is payable in full at the expiration of the term of the Notes, which is January 29, 2015. Should the Board of Directors, on the maturity date, decide that the payment of the principal and any unpaid interest would impair the financial condition or operations of the Company, the Company may then elect a mandatory conversion of the unpaid principal and interest into the Company’s common stock at a conversion rate equal to 75% of the average closing price of the Company’s common stock over the 20 consecutive trading days preceding December 31, 2014. | ||||||
In conjunction with the Notes private placement, a total of 1,190,000 common stock purchase warrants were issued at a rate of two warrants for every dollar raised through the private placement. The warrants have an exercise price of $0.14 and expire on January 29, 2015. The fair value of the warrants, as determined by the Black-Scholes option pricing model, was $116,557 using the following weighted average assumptions: a risk free interest rate of 2.33%; volatility of 147.6%; and dividend yield of 0.0%. The fair value of the warrants was recognized as a discount to debt and is being amortized over the term of the Notes using the effective interest method. Amortization expense was $23,784 for the nine months ended November 30, 2014. | ||||||
For the nine months ended November 30, 2014, one 12% Subordinated noteholder exercised the warrants associated with the 12% Note. A total of 50,000 warrants were exercised and resulted in 50,000 shares of Common Stock being issued to the noteholder. | ||||||
Current Notes balances at November 30, 2014 and February 28, 2014 are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
12% Subordinated Notes | $ | 345,000 | $ | 345,000 | ||
12% Subordinated Notes discount | -3,428 | -17,129 | ||||
$ | 341,572 | $ | 327,871 | |||
Current Notes, related party balances at November 30, 2014 and February 28, 2014 are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
12% Subordinated Notes, related party | $ | 250,000 | $ | 250,000 | ||
12% Subordinated Notes discount, related party | -2,522 | -12,605 | ||||
$ | 247,478 | $ | 237,395 | |||
Non-current Debt | ||||||
Maximilian Loan | ||||||
On October 31, 2012, the Company entered into a loan agreement with Maximilian, which provided for a revolving credit facility of up to $20 million, maturing on October 31, 2016, with a minimum commitment of $2.5 million. The loan had annual interest of 18% and a monthly commitment fee of 0.5%. The Company also granted Maximilian a 10% working interest in its share of the oil and gas leases in Kern County, California. The relative fair value of this 10% working interest amounting to $515,638 was recognized as a debt discount and is being amortized over the original term of the loan. Amortization expense was $104,177 for the nine months ended November 30, 2014. | ||||||
The Company also issued 2,435,517 warrants to third parties who assisted in the closing of the loan. The warrants have an exercise price of $0.044; contain a cashless exercise provision; have piggyback registration rights; and are exercisable for a period of five years expiring on October 31, 2017. The fair value of the warrants, as determined by the Black-Scholes option pricing model, was $98,084 and included the following assumptions: a risk free interest rate of 0.72%; stock price of $0.04, volatility of 153.44%; and a dividend yield of 0.0%. The fair value of the warrants was recognized as a financing cost and is being amortized as a part of deferred financing cost over the term of the loan. On March 10, 2014, one of the third parties exercised 2,118,900 warrants resulting in the issuance of 1,873,554 shares of the Company’s common stock. | ||||||
Maximilian Loan - Amended and Restated Loan Agreement | ||||||
In connection with the Company’s acquisition of a working interest from App in the Twin Bottoms Field in Lawrence County, Kentucky, the Company amended its loan agreement with Maximilian on August 28, 2013. The amended loan agreement provided for an increase in the revolving credit facility from $20 million to $90 million and a reduction in the annual interest rate from 18% to 12%. The monthly commitment fee of 0.5% per month on the outstanding principal balance remained unchanged. Advances under the amended loan agreement will mature on August 28, 2017. The obligations under the amended loan agreement continue to be secured by a perfected first priority security interest in substantially all of the personal property of the Company, and a mortgage on the Company’s leases in Kern County, California. The amended loan agreement also provided for the revolving credit facility to be divided into two borrowing sublimits. The first borrowing sublimit is $50 million and is for borrowing by the Company, primarily for its ongoing oil and gas exploration and development activities. The second borrowing sublimit, of $40 million, is for loans to be extended by the Company, as lender, to App, as borrower pursuant to a Loan and Security Agreement entered into between the Company and App on August 28, 2013 (See Note 9 – Note Receivable). | ||||||
The amended loan agreement contains customary covenants for loans of such type, including among other things, covenants that restrict the Company’s ability to make capital expenditures, incur indebtedness, incur liens and dispose of property. The amended loan agreement also contains various events of default, including failure to pay principal and interest when due, breach of covenants, materially incorrect representations and bankruptcy or insolvency. If an event of default occurs, all of the Company’s obligations under the amended loan agreement could be accelerated by Maximilian, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable. | ||||||
As consideration for Maximilian facilitating the Company’s transactions with App and entering into the amended loan agreement, the Company (a) issued to Maximilian approximately 6.1 million common shares, representing 9.99% of the Company’s outstanding common stock on a fully-diluted basis at the time of grant, and (b) issued approximately 6.1 million warrants to purchase shares of the Company’s common stock representing the right to purchase up to an additional 9.99% of the Company’s outstanding common stock on a fully-diluted basis, calculated as of the date of grant. The warrants have an exercise price of $0.10; contain a cash exercise provision and are exercisable for a period of three years expiring on August 28, 2016; and contain an exercise blocker provision that prevents any exercise of the warrants if such exercise and related issuance of common stock would increase the Maximilian holdings of the Company’s common stock to more than 9.99% of the Company’s currently issued and outstanding shares at the time of the exercise. The Company also granted to Maximilian a 50% net profits interest in the Company’s 25% working interest, after the Company recovers its investment, in the Company’s working interest in its Kentucky acreage, pursuant to an Assignment of Net Profits Interest entered into as of August 28, 2013 by and between the Company and Maximilian. | ||||||
On May 28, 2014 at Maximilian’s request, the Company finalized a share-for-warrant exchange agreement in which Maximilian returned to the Company 427,729 common shares and was in turn issued the same number of warrants containing the same provisions as the originally issued warrants. This share-for-warrant exchange occurred so that Maximilian would hold no more than 9.99% of the Company’s common shares, issued and outstanding. The Company determined that the share-for-warrant exchange did not result in any incremental fair value. | ||||||
On August 21, 2014, the Company entered into a First Amendment to Amended and Restated Loan and Security Agreement and Share Repurchase Agreement (the “Amendment”) with Maximilian under its Amended and Restated Loan and Security Agreement dated as of August 28, 2013. The Amendment secured for the Company an additional advance of $2,200,000 under its credit facility with Maximilian since the advances made by Maximilian had already exceeded its minimum funding commitment. Additionally, Maximilian agreed to temporarily reduce the required monthly payment made by the Company until it has paid $1,000,000 less than principal payments required by the previous agreement. As of November 30, 2014, the Company had recognized $700,000 of the reduced monthly principal payments program. Furthermore, Maximilian agreed to reduce the regular interest rate applicable to the loan from 12% per annum to 9% per annum and the default interest rate by 3%. | ||||||
The additional advance, the reduction in the required monthly payment and the reduction in the interest rate were facilitated through the Company’s acquisition of 5,694,823 shares of its common stock held by Maximilian. The repurchased shares were cancelled and restored to the status of authorized, but unissued stock. The Company paid for the share repurchase transaction through an advance of $1,708,447 under the existing loan agreement with Maximilian. | ||||||
During the nine months ended November 30, 2014, the Company received multiple advances from Maximilian of approximately $7.4 million in aggregate that were used to participate in the multi-well drilling program at the Twin Bottoms Field in Kentucky; to advance funds to App through a long-term note receivable; and, to fund the acquisition referenced in the prior paragraph of the Company’s common stock from Maximilian. The Company made principal payments of approximately $2.2 million to Maximilian during the nine months ended November 30, 2014. The Company has recognized $154,559 during the nine months ended November 30, 2014 in deferred financing costs associated with these advances which are being amortized over the amended term of the revolving credit facility. | ||||||
Current debt balances at November 30, 2014 and February 28, 2014 are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Maximilian note | $ | 3,224,918 | $ | 2,163,405 | ||
Maximilian note - discount | -135,709 | -138,988 | ||||
$ | 3,089,209 | $ | 2,024,417 | |||
Non-current debt balances at November 30, 2014 and February 28, 2014 are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Maximilian note | $ | 10,977,727 | $ | 6,833,703 | ||
Maximilian note - discount | -103,168 | -204,065 | ||||
$ | 10,874,559 | $ | 6,629,638 | |||
Stockholders_Deficit
Stockholders' Deficit | 9 Months Ended | ||||||
Nov. 30, 2014 | |||||||
Equity [Abstract] | |||||||
Stockholders' Deficit | NOTE 13 — STOCKHOLDERS’ DEFICIT: | ||||||
Series A Convertible Preferred Stock | |||||||
The Company has designated 2,400,000 shares of the 10,000,000 preferred shares as Series A Convertible Preferred Stock (“Series A Preferred”), with a $0.001 par value. At November 30, 2014, there were 737,565 shares issued and outstanding, that had not been converted into our common stock. As of November 30, 2014, there are 41 accredited investors who have converted 662,200 Series A Preferred shares into 1,986,600 shares of Daybreak common stock. The conversions of Series A Preferred that have occurred since the Series A Preferred was first issued in July 2006 is set forth in the table below. | |||||||
Fiscal Period | Shares of Series | Shares of | Number of | ||||
A Preferred | Common Stock | Accredited | |||||
Converted to | Issued from | Investors | |||||
Common Stock | Conversion | ||||||
Year Ended February 29, 2008 | 102,300 | 306,900 | 10 | ||||
Year Ended February 28, 2009 | 237,000 | 711,000 | 12 | ||||
Year Ended February 28, 2010 | 51,900 | 155,700 | 4 | ||||
Year Ended February 28, 2011 | 102,000 | 306,000 | 4 | ||||
Year Ended February 29, 2012 | - | - | - | ||||
Year Ended February 28, 2013 | 18,000 | 54,000 | 2 | ||||
Year Ended February 28, 2014 | 151,000 | 453,000 | 9 | ||||
Nine Months Ended November 30, 2014 | - | - | - | ||||
Totals | 662,200 | 1,986,600 | 41 | ||||
Holders of Series A Preferred shall be paid dividends, in the amount of 6% of the original purchase price per annum. Dividends are cumulative from the date of the final closing of the private placement, whether or not in any dividend period or periods we have assets legally available for the payment of such dividends. Dividends earned since issuance for each fiscal year and the nine months ended November 30, 2014 are set forth in the table below: | |||||||
Fiscal Period | Shareholders at Period End | Earned Dividends | |||||
Year Ended February 28, 2007 | 100 | $ | 155,311 | ||||
Year Ended February 29, 2008 | 90 | 242,126 | |||||
Year Ended February 28, 2009 | 78 | 209,973 | |||||
Year Ended February 28, 2010 | 74 | 189,973 | |||||
Year Ended February 28, 2011 | 70 | 173,707 | |||||
Year Ended February 29, 2012 | 70 | 163,624 | |||||
Year Ended February 28, 2013 | 68 | 161,906 | |||||
Year Ended February 28, 2014 | 59 | 151,323 | |||||
Nine Months Ended November 30, 2014 | 59 | 100,020 | |||||
Total Accumulated Dividends | $ | 1,547,963 | |||||
Common Stock | |||||||
The Company is authorized to issue up to 200,000,000 shares of $0.001 par value common stock of which 51,448,373 shares were issued and outstanding as of November 30, 2014. In comparison, at February 28, 2014, a total of 55,509,411 shares were issued and outstanding. The decrease of 4,061,038 shares was attributable as shown below: | |||||||
Common Stock | Par Value | ||||||
Balance | |||||||
Common stock, Issued and Outstanding, February 28, 2014 | 55,509,411 | ||||||
Exercise of warrants issued with 12% Subordinated Notes | 50,000 | $ | 50 | ||||
Exercise of warrants issued in connection with financing | 1,873,554 | $ | 1,874 | ||||
Common stock-for-warrant exchange (Maximilian) | -427,729 | $ | -428 | ||||
Transfer agent balancing adjustment | 140,000 | $ | 140 | ||||
Repurchase of common stock through financing | -5,694,823 | $ | -5,695 | ||||
Common stock returned to 2009 Stock Plan for payroll taxes | -2,040 | $ | 2 | ||||
Common stock, Issued and Outstanding, November 30, 2014 | 51,448,373 | ||||||
Warrants
Warrants | 9 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Warrants and Rights Note Disclosure [Abstract] | |||||||||
Warrants | NOTE 14 — WARRANTS: | ||||||||
Warrants outstanding and exercisable as of November 30, 2014 are set forth in the table below: | |||||||||
Warrants | Exercise | Remaining | Exercisable | ||||||
Price | Life | Warrants | |||||||
(Years) | Remaining | ||||||||
12% Subordinated notes | 1,190,000 | $0.14 | 0.16 | 1,040,000 | |||||
Warrants issued in 2010 for services | 150,000 | $0.14 | 0.38 | 150,000 | |||||
Warrants issued in 2012 for debt financing | 2,435,517 | $0.04 | 3 | 316,617 | |||||
Warrants issued for Kentucky oil project | 3,498,601 | $0.10 | 1.75 | 3,498,601 | |||||
Warrants issued for Kentucky debt financing | 2,623,951 | $0.10 | 1.75 | 2,623,951 | |||||
Warrants issued for Kentucky debt financing | 309,503 | $0.21 | 3.75 | 309,503 | |||||
Warrants issued in share-for-warrant exchange | 427,729 | $0.10 | 1.75 | 427,729 | |||||
10,635,301 | 8,366,401 | ||||||||
There were no warrants that expired during the nine months ended November 30, 2014. During the nine months ended November 30, 2014, there were 50,000 warrants exercised for a total of $7,000 that had been issued in conjunction with the 12% subordinated Notes and 2,118,900 warrants exercised that were issued in conjunction with financing the Company received in 2012 for a total of 2,168,900 warrants that were exercised in aggregate. There were 427,729 warrants issued during the nine months ended November 30, 2014 in connection with the Maximilian share-for-warrants exchange. The remaining outstanding warrants as of November 30, 2014, have a weighted average exercise price of $0.11, a weighted average remaining life of 1.7 years, and an intrinsic value of $292,406. | |||||||||
Restricted_Stock_and_Restricte
Restricted Stock and Restricted Stock Unit Plan | 9 Months Ended | ||||||||||
Nov. 30, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||
Restricted Stock and Restricted Stock Unit Plan | NOTE 15 — RESTRICTED STOCK AND RESTRICTED STOCK UNIT PLAN: | ||||||||||
At November 30, 2014, a total of 3,000,000 shares were awarded and are fully vested, with 2,986,220 shares of restricted stock that remain outstanding and are fully vested under the 2009 Restricted Stock and Restricted Stock Unit Plan (the “2009 Plan”). A total of 1,013,780 common stock shares remained available at November 30, 2014 for issuance pursuant to the 2009 Plan. A summary of the 2009 Plan issuances is set forth in the table below: | |||||||||||
Grant | Shares | Vesting | Shares | Shares | Shares | ||||||
Date | Awarded | Period | Vested(1) | Returned(2) | Outstanding | ||||||
(Unvested) | |||||||||||
4/7/09 | 1,900,000 | 3 Years | 1,900,000 | - | - | ||||||
7/16/09 | 25,000 | 3 Years | 25,000 | - | - | ||||||
7/16/09 | 625,000 | 4 Years | 619,130 | 5,870 | - | ||||||
7/22/10 | 25,000 | 3 Years | 25,000 | - | - | ||||||
7/22/10 | 425,000 | 4 Years | 417,090 | 7,910 | - | ||||||
3,000,000 | 2,986,220(1) | 13,780(2) | - | ||||||||
(1) Does not include shares that were withheld to satisfy such tax liability upon vesting of a restricted award by a Plan Participant, and subsequently returned to the 2009 Plan. | |||||||||||
(2) Reflects the number of common shares that were withheld pursuant to the settlement of the number of shares with a fair market value equal to such tax withholding liability, to satisfy such tax liability upon vesting of a restricted award by a Plan Participant. | |||||||||||
For the nine months ended November 30, 2014, the Company recognized compensation expense related to the above restricted stock grants in the amount of $2,515. For the nine months ended November 30, 2014, there were 2,040 shares of the Company’s common stock relating to the 2009 Plan that were returned to the 2009 Plan to satisfy an employee’s payroll tax liability upon the vesting of the shares. |
Income_Taxes
Income Taxes | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Income Taxes | NOTE 16 — INCOME TAXES: | |||||
Reconciliation between actual tax expense (benefit) and income taxes computed by applying the U.S. federal income tax rate and state income tax rates to income from continuing operations before income taxes is set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Computed at U.S. and state statutory rates (40%) | $ | -111,024 | $ | -559,340 | ||
Permanent differences | 108,489 | 94,980 | ||||
Changes in valuation allowance | 2,535 | 464,360 | ||||
$ | - | $ | - | |||
Tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred liabilities are set forth in the table below: | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Deferred tax assets: | ||||||
Net operating loss carryforwards | $ | 8,752,681 | $ | 8,344,222 | ||
Oil and gas properties | -1,151,823 | -832,267 | ||||
Stock based compensation | 88,471 | 87,716 | ||||
Other | -98565 | -11,442 | ||||
Less valuation allowance | -7,590,764 | -7,588,229 | ||||
$ | - | $ | - | |||
At November 30, 2014, Daybreak had estimated net operating loss (“NOL”) carryforwards for federal and state income tax purposes of approximately $21,881,703 which will begin to expire, if unused, beginning in 2024. The valuation allowance increased approximately $2,535 for the nine months ended November 30, 2014 and increased by $464,360 for the year ended February 28, 2014. Section 382 of the Internal Revenue Code places annual limitations on the Company’s NOL carryforward. | ||||||
The above estimates are based on management’s decisions concerning elections which could change the relationship between net income and taxable income. Management decisions are made annually and could cause estimates to vary significantly. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Nov. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 17 — COMMITMENTS AND CONTINGENCIES: |
Various lawsuits, claims and other contingencies arise in the ordinary course of the Company’s business activities. While the ultimate outcome of any future contingency is not determinable at this time, management believes that any liability or loss resulting therefrom will not materially affect the financial position, results of operations or cash flows of the Company. | |
The Company, as an owner or lessee and operator of oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area. The Company maintains insurance coverage that is customary in the industry, although the Company is not fully insured against all environmental risks. | |
The Company is not aware of any environmental claims existing as of November 30, 2014. There can be no assurance, however, that current regulatory requirements will not change or that past non-compliance with environmental issues will not be discovered on the Company’s oil and gas properties. |
Accounting_Policies_Policies
Accounting Policies (Policies) | 9 Months Ended |
Nov. 30, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited interim financial statements and notes for 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 for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”). Accordingly, they do not include all of the information and footnote disclosures normally required by accounting principles generally accepted in the United States of America for complete financial statements. | |
In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements have been included and such adjustments are of a normal recurring nature. Operating results for the nine months ended November 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending February 28, 2015. | |
These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2014. | |
Use of Estimates | Use of Estimates |
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions. These estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The accounting policies most affected by management’s estimates and assumptions are as follows: | |
• The reliance on estimates of proved reserves to compute the provision for depreciation, depletion and amortization and to determine the amount of any impairment of proved properties; | |
• The valuation of unproved acreage and proved oil and gas properties to determine the amount of any impairment of oil and gas properties; | |
• Judgment regarding the productive status of in-progress exploratory wells to determine the amount of any provision for abandonment; and | |
• Estimates regarding abandonment obligations. |
Concentration_of_Credit_Risk_T
Concentration of Credit Risk (Tables) | 9 Months Ended | ||||||||||||
Nov. 30, 2014 | |||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||
Schedule of Concentration of Risk | At November 30, 2014 | At February 28, 2014 | |||||||||||
Project | Customer | Revenue | Percentage | Revenue | Percentage | ||||||||
Receivable | Receivable | ||||||||||||
California – East Slopes Project (Oil) | Plains Marketing | $ | 152,568 | 61.40% | $ | 244,384 | 74.00% | ||||||
Kentucky – Twin Bottoms Field (Oil) | Appalachian Oil | 83,793 | 33.80% | 85,120 | 25.80% | ||||||||
Kentucky – Twin Bottoms Field (Natural Gas) | Jefferson Gas | 11,911 | 4.80% | 839 | 0.20% | ||||||||
$ | 248,272 | 100.00% | $ | 330,343 | 100.00% | ||||||||
Schedule of Accounts Receivable and Allowances | 30-Nov-14 | 28-Feb-14 | |||||||||||
Other receivables | $ | 457,107 | $ | 269,039 | |||||||||
Allowance for doubtful accounts | -239,000 | -239,000 | |||||||||||
$ | 218,107 | $ | 30,039 |
Prepaid_Drilling_Costs_Tables
Prepaid Drilling Costs (Tables) | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Prepaid Expense and Other Assets [Abstract] | ||||||
Schedule of Prepaid Drilling Costs | 30-Nov-14 | 28-Feb-14 | ||||
California | $ | 16,452 | $ | 16,452 | ||
Kentucky | 182,690 | -1,537 | ||||
$ | 199,142 | $ | 14,915 |
Oil_and_Gas_Properties_Tables
Oil and Gas Properties (Tables) | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
OIL AND NATURAL GAS PROPERTIES, net, successful efforts method | ||||||
Capitalized Costs Relating to Oil and Gas Activities | 30-Nov-14 | 28-Feb-14 | ||||
Proved leasehold costs | $ | 6,031 | $ | 2,236 | ||
Unproved leasehold costs | 1,282,356 | 1,261,156 | ||||
Costs of wells and development | 976,740 | 492,970 | ||||
Capitalized exploratory well costs | 4,794,116 | 4,018,899 | ||||
Total cost of oil and gas properties | 7,059,243 | 5,775,261 | ||||
Accumulated depletion, depreciation, amortization and impairment | -2,023,237 | -1,599,140 | ||||
Net oil and gas properties | $ | 5,036,006 | $ | 4,176,121 |
Production_Revenue_Receivable_
Production Revenue Receivable (Tables) | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Production Revenue Receivable | ||||||
Schedule of Production Revenue Receivable | 30-Nov-14 | 28-Feb-14 | ||||
Production revenue receivable – current | $ | 120,000 | $ | 120,000 | ||
Production revenue receivable – non-current | 65,000 | 155,000 | ||||
$ | 185,000 | $ | 275,000 |
Deferred_Financing_Costs_Table
Deferred Financing Costs (Tables) | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Deferred Finance Costs [Abstract] | ||||||
Schedule of Other Assets | 30-Nov-14 | 28-Feb-14 | ||||
Deferred financing costs – loan fees | $ | 151,139 | $ | 151,139 | ||
Deferred financing costs – loan commissions | 630,662 | 476,103 | ||||
Deferred financing costs – fair value of warrants | 530,488 | 530,488 | ||||
Deferred financing costs – fair value of common stock | 419,832 | 419,832 | ||||
1,732,121 | 1,577,562 | |||||
Accumulated amortization | -567,088 | -250,962 | ||||
$ | 1,165,033 | $ | 1,326,600 |
Note_Receivable_Tables
Note Receivable (Tables) | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Receivables [Abstract] | ||||||
Schedule of Financing Receivables | 30-Nov-14 | 28-Feb-14 | ||||
Note receivable – current | $ | 2,162,222 | $ | 793,727 | ||
Note receivable – non-current | 3,306,068 | 2,756,273 | ||||
$ | 5,468,290 | $ | 3,550,000 |
ShortTerm_and_LongTerm_Borrowi1
Short-Term and Long-Term Borrowings (Tables) | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Debt Disclosure [Abstract] | ||||||
Schedule of Notes Payable | Current Notes | |||||
30-Nov-14 | 28-Feb-14 | |||||
12% Subordinated Notes | $ | 345,000 | $ | 345,000 | ||
12% Subordinated Notes discount | -3,428 | -17,129 | ||||
$ | 341,572 | $ | 327,871 | |||
Current Notes, related party | ||||||
30-Nov-14 | 28-Feb-14 | |||||
12% Subordinated Notes, related party | $ | 250,000 | $ | 250,000 | ||
12% Subordinated Notes discount, related party | -2,522 | -12,605 | ||||
$ | 247,478 | $ | 237,395 | |||
Schedule of Short-Term and Long-Term Borrowings | Current | |||||
30-Nov-14 | 28-Feb-14 | |||||
Maximilian note | $ | 3,224,918 | $ | 2,163,405 | ||
Maximilian note - discount | -135,709 | -138,988 | ||||
$ | 3,089,209 | $ | 2,024,417 | |||
Non-current | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Maximilian note | $ | 10,977,727 | $ | 6,833,703 | ||
Maximilian note - discount | -103,168 | -204,065 | ||||
$ | 10,874,559 | $ | 6,629,638 |
Stockholders_Deficit_Tables
Stockholders' Deficit (Tables) | 9 Months Ended | ||||||
Nov. 30, 2014 | |||||||
Equity [Abstract] | |||||||
Schedule of Stockholder's Equity | Fiscal Period | Shares of Series | Shares of | Number of | |||
A Preferred | Common Stock | Accredited | |||||
Converted to | Issued from | Investors | |||||
Common Stock | Conversion | ||||||
Year Ended February 29, 2008 | 102,300 | 306,900 | 10 | ||||
Year Ended February 28, 2009 | 237,000 | 711,000 | 12 | ||||
Year Ended February 28, 2010 | 51,900 | 155,700 | 4 | ||||
Year Ended February 28, 2011 | 102,000 | 306,000 | 4 | ||||
Year Ended February 29, 2012 | - | - | - | ||||
Year Ended February 28, 2013 | 18,000 | 54,000 | 2 | ||||
Year Ended February 28, 2014 | 151,000 | 453,000 | 9 | ||||
Nine Months Ended November 30, 2014 | - | - | - | ||||
Totals | 662,200 | 1,986,600 | 41 | ||||
Schedule of Dividends Payable | Fiscal Period | Shareholders at Period End | Earned Dividends | ||||
Year Ended February 28, 2007 | 100 | $ | 155,311 | ||||
Year Ended February 29, 2008 | 90 | 242,126 | |||||
Year Ended February 28, 2009 | 78 | 209,973 | |||||
Year Ended February 28, 2010 | 74 | 189,973 | |||||
Year Ended February 28, 2011 | 70 | 173,707 | |||||
Year Ended February 29, 2012 | 70 | 163,624 | |||||
Year Ended February 28, 2013 | 68 | 161,906 | |||||
Year Ended February 28, 2014 | 59 | 151,323 | |||||
Nine Months Ended November 30, 2014 | 59 | 100,020 | |||||
Total Accumulated Dividends | $ | 1,547,963 | |||||
Schedule of Common Stock Outstanding | Common Stock | Par Value | |||||
Balance | |||||||
Common stock, Issued and Outstanding, February 28, 2014 | 55,509,411 | ||||||
Exercise of warrants issued with 12% Subordinated Notes | 50,000 | $ | 50 | ||||
Exercise of warrants issued in connection with financing | 1,873,554 | $ | 1,874 | ||||
Common stock-for-warrant exchange (Maximilian) | -427,729 | $ | -428 | ||||
Transfer agent balancing adjustment | 140,000 | $ | 140 | ||||
Repurchase of common stock through financing | -5,694,823 | $ | -5,695 | ||||
Common stock returned to 2009 Stock Plan for payroll taxes | -2,040 | $ | 2 | ||||
Common stock, Issued and Outstanding, November 30, 2014 | 51,448,373 |
Warrants_Tables
Warrants (Tables) | 9 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Warrants and Rights Note Disclosure [Abstract] | |||||||||
Schedule of Stockholders' Equity Note Warrants and Rights | Warrants | Exercise | Remaining | Exercisable | |||||
Price | Life | Warrants | |||||||
(Years) | Remaining | ||||||||
12% Subordinated notes | 1,190,000 | $0.14 | 0.16 | 1,040,000 | |||||
Warrants issued in 2010 for services | 150,000 | $0.14 | 0.38 | 150,000 | |||||
Warrants issued in 2012 for debt financing | 2,435,517 | $0.04 | 3 | 316,617 | |||||
Warrants issued for Kentucky oil project | 3,498,601 | $0.10 | 1.75 | 3,498,601 | |||||
Warrants issued for Kentucky debt financing | 2,623,951 | $0.10 | 1.75 | 2,623,951 | |||||
Warrants issued for Kentucky debt financing | 309,503 | $0.21 | 3.75 | 309,503 | |||||
Warrants issued in share-for-warrant exchange | 427,729 | $0.10 | 1.75 | 427,729 | |||||
10,635,301 | 8,366,401 |
Restricted_Stock_and_Restricte1
Restricted Stock and Restricted Stock Unit Plan (Tables) | 9 Months Ended | ||||||||||
Nov. 30, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||
Schedule of Restricted Stock and Restricted Stock Unit Activity | Grant | Shares | Vesting | Shares | Shares | Shares | |||||
Date | Awarded | Period | Vested(1) | Returned(2) | Outstanding | ||||||
(Unvested) | |||||||||||
4/7/09 | 1,900,000 | 3 Years | 1,900,000 | - | - | ||||||
7/16/09 | 25,000 | 3 Years | 25,000 | - | - | ||||||
7/16/09 | 625,000 | 4 Years | 619,130 | 5,870 | - | ||||||
7/22/10 | 25,000 | 3 Years | 25,000 | - | - | ||||||
7/22/10 | 425,000 | 4 Years | 417,090 | 7,910 | - | ||||||
3,000,000 | 2,986,220(1) | 13,780(2) | - | ||||||||
(1) Does not include shares that were withheld to satisfy such tax liability upon vesting of a restricted award by a Plan Participant, and subsequently returned to the 2009 Plan. | |||||||||||
(2) Reflects the number of common shares that were withheld pursuant to the settlement of the number of shares with a fair market value equal to such tax withholding liability, to satisfy such tax liability upon vesting of a restricted award by a Plan Participant. |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | |||||
Nov. 30, 2014 | ||||||
Income Tax Disclosure [Abstract] | ||||||
Schedule of Components of Income Tax Expense Benefit | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Computed at U.S. and state statutory rates (40%) | $ | -111,024 | $ | -559,340 | ||
Permanent differences | 108,489 | 94,980 | ||||
Changes in valuation allowance | 2,535 | 464,360 | ||||
$ | - | $ | - | |||
Schedule of Deferred Tax Assets and Liabilities | ||||||
30-Nov-14 | 28-Feb-14 | |||||
Deferred tax assets: | ||||||
Net operating loss carryforwards | $ | 8,752,681 | $ | 8,344,222 | ||
Oil and gas properties | -1,151,823 | -832,267 | ||||
Stock based compensation | 88,471 | 87,716 | ||||
Other | -98565 | -11,442 | ||||
Less valuation allowance | -7,590,764 | -7,588,229 | ||||
$ | - | $ | - |
Going_Concern_Details_Narrativ
Going Concern (Details Narrative) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Oil and Gas Delivery Commitments and Contracts [Line Items] | ||
Accumulated deficit | ($27,750,137) | ($27,472,573) |
Working capital deficit | $3,762,423 | |
East Slopes Project | ||
Oil and Gas Delivery Commitments and Contracts [Line Items] | ||
Number of producing wells, net revenue interest | 20 | |
Average working interest | 36.60% | |
Average net revenue interest | 28.40% | |
Twin Bottoms Field | ||
Oil and Gas Delivery Commitments and Contracts [Line Items] | ||
Number of producing wells, net revenue interest | 13 | |
Average working interest | 22.40% | |
Average net revenue interest | 19.60% | |
Kentucky acreage | 7,300 |
Concentration_of_Credit_Risk_O
Concentration of Credit Risk - Oil and Natural Gas Revenues Accounts Receivable (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Concentration Risk [Line Items] | ||
Revenue receivable | $248,272 | $330,343 |
Percent of revenue | 100.00% | 100.00% |
Plains Marketing (California - East Slopes Project (Oil)) | ||
Concentration Risk [Line Items] | ||
Revenue receivable | 152,568 | 244,384 |
Percent of revenue | 61.40% | 74.00% |
Appalachian Oil (Kentucky - Twin Bottoms Field (Oil)) | ||
Concentration Risk [Line Items] | ||
Revenue receivable | 83,793 | 85,120 |
Percent of revenue | 33.80% | 25.80% |
Jefferson Gas (Kentucky - Twin Bottoms Field (Gas)) | ||
Concentration Risk [Line Items] | ||
Revenue receivable | $11,911 | $839 |
Percent of revenue | 4.80% | 0.20% |
Concentration_of_Credit_Risk_A
Concentration of Credit Risk - Accounts Receivable and Allowances (Details) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Risks and Uncertainties [Abstract] | ||
Other receivables | $457,107 | $269,039 |
Allowance for doubtful accounts | -239,000 | -239,000 |
Other receivables, net | $218,107 | $30,039 |
Prepaid_Drilling_Costs_Details
Prepaid Drilling Costs (Details) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Capitalized Costs Relating to Oil and Gas Producing Activities, by Geographic Area [Line Items] | ||
Prepaid drilling costs | $199,142 | $14,915 |
Kern County, California | ||
Capitalized Costs Relating to Oil and Gas Producing Activities, by Geographic Area [Line Items] | ||
Prepaid drilling costs | 16,452 | 16,452 |
Lawrence County, Kentucky | ||
Capitalized Costs Relating to Oil and Gas Producing Activities, by Geographic Area [Line Items] | ||
Prepaid drilling costs | $182,690 | ($1,537) |
Oil_and_Gas_Properties_Details
Oil and Gas Properties (Details) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
OIL AND NATURAL GAS PROPERTIES, net, successful efforts method | ||
Proved leasehold costs | $6,031 | $2,236 |
Unproved leasehold costs | 1,282,356 | 1,261,156 |
Costs of wells and development | 976,740 | 492,970 |
Capitalized exploratory well costs | 4,794,116 | 4,018,899 |
Total cost of oil and gas properties | 7,059,243 | 5,775,261 |
Accumulated depletion, depreciation, amortization and impairment | -2,023,237 | -1,599,140 |
Net oil and gas properties | $5,036,006 | $4,176,121 |
Production_Revenue_Receivable_1
Production Revenue Receivable (Details) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Production Revenue Receivable | ||
Production revenue receivable, current | $120,000 | $120,000 |
Production revenue receivable, non-current | 65,000 | 155,000 |
Production revenue receivables | $185,000 | $275,000 |
Deferred_Financing_Costs_Detai
Deferred Financing Costs (Details) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
DeferredFinanceCostsLineItems [Line Items] | ||
Deferred financing costs, gross | $1,732,121 | $1,577,562 |
Accumulated amortization | -567,088 | -250,962 |
Deferred finance costs, net | 1,165,033 | 1,326,600 |
Deferred Financing Expenses | Fair Value of Common Stock | ||
DeferredFinanceCostsLineItems [Line Items] | ||
Deferred financing costs, gross | 419,832 | 419,832 |
Deferred Financing Expenses | Fair Value of Warrants | ||
DeferredFinanceCostsLineItems [Line Items] | ||
Deferred financing costs, gross | 530,488 | 530,488 |
Deferred Financing Expenses | Loan Commissions | ||
DeferredFinanceCostsLineItems [Line Items] | ||
Deferred financing costs, gross | 630,662 | 476,103 |
Deferred Financing Expenses | Loan Fees | ||
DeferredFinanceCostsLineItems [Line Items] | ||
Deferred financing costs, gross | $151,139 | $151,139 |
Deferred_Financing_Costs_Detai1
Deferred Financing Costs (Details Narrative) (USD $) | 9 Months Ended |
Nov. 30, 2014 | |
Deferred Finance Costs [Abstract] | |
Increase in deferred financing costs of loan commissions | $154,559 |
Amortization expense of deferred financing costs | $316,126 |
Note_Receivable_Details
Note Receivable (Details) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Receivables [Abstract] | ||
Note receivable, current | $2,162,222 | $793,727 |
Note receivable, non-current | 3,306,068 | 2,756,273 |
Note receivable | $5,468,290 | $3,550,000 |
Note_Receivable_Details_Narrat
Note Receivable (Details Narrative) (App Note Receivable, USD $) | 9 Months Ended |
Nov. 30, 2014 | |
App Note Receivable | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Credit facility, advances on note receivable | $8,312,500 |
Accounts_Payable_Details_Narra
Accounts Payable (Details Narrative) (USD $) | 4 Months Ended | |
Jun. 30, 2009 | Nov. 30, 2014 | |
Payables and Accruals [Abstract] | ||
Acquisition and disposition of East Slopes Project | On March 1, 2009, the Company became the operator for the East Slopes Project. The Company assumed certain original defaulting partners' approximate $1.5 million liability representing a 25% working interest in the drilling and completion costs associated with the East Slopes Project four earning well program. The Company subsequently sold the 25% working interest on June 11, 2009. | |
Accounts payable balance | $255,349 |
ShortTerm_and_LongTerm_Borrowi2
Short-Term and Long-Term Borrowings - Subordinated Notes (Details) (12% Subordinated Notes, USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Debt Instrument [Line Items] | ||
Notes payable | $345,000 | $345,000 |
Notes payable discount | -3,428 | -17,129 |
Note payable balance | 341,572 | 327,871 |
Related Party | ||
Debt Instrument [Line Items] | ||
Notes payable | 250,000 | 250,000 |
Notes payable discount | -2,522 | -12,605 |
Note payable balance | $247,478 | $237,395 |
ShortTerm_and_LongTerm_Borrowi3
Short-Term and Long-Term Borrowings - Credit Facility - Maximilian Loan (Details) (Line of Credit, USD $) | Nov. 30, 2014 | Feb. 28, 2014 |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Current debt, note | $3,224,918 | $2,163,405 |
Current debt, note discount | -135,709 | -138,988 |
Current debt, note balance | 3,089,209 | 2,024,417 |
Non-current debt, note | 10,977,727 | 6,833,703 |
Non-current debt, note discount | -103,168 | -204,065 |
Non-current debt, note balance | $10,874,559 | $6,629,638 |
ShortTerm_and_LongTerm_Borrowi4
Short-Term and Long-Term Borrowings (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | 1 Months Ended | 6 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2010 | Oct. 31, 2012 | Aug. 31, 2013 | Feb. 28, 2014 | |
Debt Instrument [Line Items] | ||||||
Related party long-term note payable | $250,100 | $250,100 | ||||
Warrant exercise price | $0.11 | |||||
Amortization of debt discount | 127,960 | 117,822 | ||||
Credit facility, payments | 5,421 | 27,000 | ||||
Unamortized deferred financing costs | 1,165,033 | 1,326,600 | ||||
Common stock issued, shares | 51,448,373 | 55,509,411 | ||||
Common stock issued, value | 51,448 | 55,509 | ||||
Common Stock for warrant exchange | -427,729 | |||||
Unproved oil properties, stock and warrant value allocation | 1,282,356 | 1,261,156 | ||||
Stock repurchased and retired, shares | -5,694,823 | |||||
Stock repurchased and retired, value | -5,695 | |||||
Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing | 890,000 | |||||
Line of credit, amount outstanding | 876,948 | |||||
Line of credit, interest expense | 23,581 | |||||
Line of credit, interest rate | Payable monthly at a stated reference rate of 0.249% + 337.5 basis points. The reference rate is based on the 30 day LIBOR ("London Interbank Offered Rate") and is subject to change from UBS. | |||||
12% Subordinated Notes | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 12.00% | |||||
Expiration period | 29-Jan-15 | |||||
Payment terms | Payable semi-annually on January 29th and July 29th. Should the Board of Directors, on the maturity date, decide that the payment of the principal and any unpaid interest would impair the financial condition or operations of the Company, the Company may then elect a mandatory conversion of the unpaid principal and interest into the Company's Common Stock at a conversion rate equal to 75% of the average closing price of the Company's Common Stock over the 20 consecutive trading days preceding December 31, 2014. | |||||
Warrants issued | 1,190,000 | |||||
Warrants exercised | 50,000 | |||||
Warrant exercise price | $0.14 | |||||
Warrant expiration date | 29-Jan-15 | |||||
Fair value of stocks and warrants | 116,557 | |||||
Weighted average risk free interest rate | 2.33% | |||||
Weighted average volatility rate | 147.60% | |||||
Amortization of debt discount | 23,784 | |||||
Common stock issued, shares | 50,000 | |||||
Maximilian Loan | ||||||
Debt Instrument [Line Items] | ||||||
Warrants issued | 2,435,517 | |||||
Warrants exercised | 2,118,900 | |||||
Warrant exercise price | $0.04 | |||||
Warrant expiration date | 31-Oct-17 | |||||
Fair value of stocks and warrants | 98,084 | |||||
Weighted average risk free interest rate | 0.72% | |||||
Weighted average volatility rate | 153.44% | |||||
Stock price, fair value assumption | $0.04 | |||||
Amortization of debt discount | 515,638 | |||||
Amortization expense | 104,177 | |||||
Credit facility, description | The Company entered into a loan agreement with Maximilian Investors LLC which provided for a revolving credit facility of up to $20 million, maturing on October 31, 2016, with a minimum commitment of $2.5 million. The loan had annual interest of 18% and a monthly commitment fee of 0.5%. The Company also granted Maximilian a 10% working interest in its share of the oil and gas leases in Kern County, California. | |||||
Maximum borrowing | 20,000,000 | |||||
Expiration date | 31-Oct-16 | |||||
Minimum commitment terms | Minimum commitment of $2,500,000 | |||||
Commitment fee percentage | 0.50% | |||||
Line of credit facility, interest rate | 18.00% | |||||
Common stock issued, shares | 1,873,554 | |||||
Maximilian - Amended and Restated Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility, description | The Company's revolving credit facility was increased from $20 million to $90 million. The first borrowing sublimit is $50 million and is for borrowing by the Company, primarily for its ongoing oil and gas exploration and development activities. The second borrowing sublimit, of $40 million, is for loans to be extended by the Company, as lender, to App, as borrower pursuant to a Loan and Security Agreement entered into between the Company and App. | |||||
Maximum borrowing | 90,000,000 | |||||
Expiration date | 28-Aug-17 | |||||
Commitment fee percentage | 0.50% | |||||
Line of credit facility, interest rate | 12.00% | |||||
Maximilian- First Amendment to Amended and Restated Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Amortization expense | 154,559 | |||||
Credit facility, advances | 2,200,000 | |||||
Credit facility, reduction to required monthly payments | Maximilian agreed to temporarily decrease the required monthly payment made by the Company until it has paid $1,000,000 less than payments required by the previous agreement. As of November 30, 2014, the Company recognized $700,000 of the reduced monthly principal payments program. Maximilian agreed to reduce the regular interest rate applicable to the loan from 12% per annum to 9% per annum and the default interest rate by 3%. | |||||
Stock repurchased and retired, shares | 5,694,823 | |||||
Stock repurchased and retired, value | 1,708,447 | |||||
Proceeds from long term debt | 7,400,000 | |||||
Repayments of long term debt | $2,200,000 | |||||
Maximilian/App Loan Agreement - Stock and Warrants | ||||||
Debt Instrument [Line Items] | ||||||
Warrants issued | 6,100,000 | |||||
Warrant exercise price | $0.10 | |||||
Warrant exercisable date | 28-Aug-13 | |||||
Warrant expiration date | 28-Aug-16 | |||||
Common stock issued, shares | 6,100,000 | |||||
Common Stock for warrant exchange | -427,729 |
Stockholders_Deficit_Conversio
Stockholders' Deficit - Conversions of Series A Preferred Stock (Details) | 9 Months Ended | 12 Months Ended | ||||||
Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 29, 2012 | Feb. 28, 2011 | Feb. 28, 2010 | Feb. 28, 2009 | Feb. 29, 2008 | |
Integer | Integer | Integer | Integer | Integer | Integer | Integer | Integer | |
Equity [Abstract] | ||||||||
Series A preferred shares converted to common stock | 0 | 151,000 | 18,000 | 0 | 102,000 | 51,900 | 237,000 | 102,300 |
Shares of common stock issued from conversion | 0 | 453,000 | 54,000 | 0 | 306,000 | 155,700 | 711,000 | 306,900 |
Accredited investors | 0 | 9 | 2 | 0 | 4 | 4 | 12 | 10 |
Stockholders_Deficit_Preferred
Stockholders' Deficit - Preferred Stock Dividends Earned (Details) (USD $) | 9 Months Ended | 12 Months Ended | |||||||
Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 29, 2012 | Feb. 28, 2011 | Feb. 28, 2010 | Feb. 28, 2009 | Feb. 29, 2008 | Feb. 28, 2007 | |
Integer | Integer | Integer | Integer | Integer | Integer | Integer | Integer | Integer | |
Equity [Abstract] | |||||||||
Preferred shareholders at period end | 59 | 59 | 68 | 70 | 70 | 74 | 78 | 90 | 100 |
Earned dividends | $100,020 | $151,323 | $161,906 | $163,624 | $173,707 | $189,973 | $209,973 | $242,126 | $155,311 |
Total accumulated dividends | $1,547,963 |
Stockholders_Deficit_Common_St
Stockholders' Deficit - Common Stock (Details) (USD $) | 9 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Common Stock Outstanding [Roll Forward] | ||
Common Stock, Issued and Outstanding, February 28, 2014 | 55,509,411 | |
Exercise of warrants issued with 12% Subordinated Notes | 50,000 | |
Exercise of warrants issued with 12% Subordinated Notes, par value | $50 | |
Exercise of warrants issued in connection with financing | 1,873,554 | |
Exercise of warrants issued in connection with financing, par value | 1,874 | 852,236 |
Common stock-for-warrant exchange, Maximilian | -427,729 | |
Common stock-for-warrant exchange, Maximilian, par value | -428 | |
Transfer agent balancing adjustment, shares | 140,000 | |
Transfer agent balancing adjustment, par value | 140 | 0 |
Repurchase of common stock through financing | -5,694,823 | |
Repurchase of common stock through financing, par value | -5,695 | |
Common stock returned to 2009 Stock Plan for payroll taxes | -2,040 | |
Common stock returned to 2009 Stock Plan for payroll taxes, par value | $2 | |
Common Stock, Issued and Outstanding, November 30, 2014 | 51,448,373 |
Stockholders_Deficit_Details_N
Stockholders' Deficit (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | ||||||
Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 29, 2012 | Feb. 28, 2011 | Feb. 28, 2010 | Feb. 28, 2009 | Feb. 29, 2008 | |
Integer | Integer | Integer | Integer | Integer | Integer | Integer | Integer | |
Class of Stock [Line Items] | ||||||||
Series A preferred shares converted to common stock | 0 | 151,000 | 18,000 | 0 | 102,000 | 51,900 | 237,000 | 102,300 |
Shares of common stock issued from conversion | 0 | 453,000 | 54,000 | 0 | 306,000 | 155,700 | 711,000 | 306,900 |
Accredited investors | 0 | 9 | 2 | 0 | 4 | 4 | 12 | 10 |
Common stock, par value in dollars | $0.00 | $0.00 | ||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||||||
Common stock, shares issued | 51,448,373 | 55,509,411 | ||||||
Common stock, shares outstanding | 51,448,373 | 55,509,411 | ||||||
Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, par value in dollars | $0.00 | $0.00 | ||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||
Preferred stock, shares issued | 0 | 0 | ||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||
Series A Convertible Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, par value in dollars | $0.00 | $0.00 | ||||||
Preferred stock, shares authorized | 2,400,000 | 2,400,000 | ||||||
Preferred stock, shares issued | 737,565 | 737,565 | ||||||
Preferred stock, shares outstanding | 737,565 | 737,565 | ||||||
Series A preferred shares converted to common stock | 662,200 | |||||||
Shares of common stock issued from conversion | 1,986,600 | |||||||
Accredited investors | 41 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, par value in dollars | $0.00 | |||||||
Common stock, shares authorized | 200,000,000 | |||||||
Common stock, shares issued | 51,448,373 | 55,509,411 | ||||||
Common stock, shares outstanding | 51,448,373 | 55,509,411 | ||||||
Decrease in issued and outstanding shares | 4,061,038 |
Warrants_Details
Warrants (Details) (USD $) | 9 Months Ended |
Nov. 30, 2014 | |
Class of Warrant or Right [Line Items] | |
Warrants | 10,635,301 |
Exercise price | $0.11 |
Remaining life (years) | 1 year 8 months |
Exercisable warrants remaining | 8,366,401 |
12% Subordinated Notes | |
Class of Warrant or Right [Line Items] | |
Warrants | 1,190,000 |
Exercise price | $0.14 |
Remaining life (years) | 2 months |
Exercisable warrants remaining | 1,040,000 |
Warrants Issued In 2010 For Services | |
Class of Warrant or Right [Line Items] | |
Warrants | 150,000 |
Exercise price | $0.14 |
Remaining life (years) | 5 months |
Exercisable warrants remaining | 150,000 |
Warrants Issued In 2012 For Debt Financing | |
Class of Warrant or Right [Line Items] | |
Warrants | 2,435,517 |
Exercise price | $0.04 |
Remaining life (years) | 3 years |
Exercisable warrants remaining | 316,617 |
Warrants Issued for Kentucky Oil Project | |
Class of Warrant or Right [Line Items] | |
Warrants | 3,498,601 |
Exercise price | $0.10 |
Remaining life (years) | 1 year 9 months |
Exercisable warrants remaining | 3,498,601 |
Warrants Issued for Kentucky Debt Financing #1 | |
Class of Warrant or Right [Line Items] | |
Warrants | 2,623,951 |
Exercise price | $0.10 |
Remaining life (years) | 1 year 9 months |
Exercisable warrants remaining | 2,623,951 |
Warrants Issued for Kentucky Debt Financing #2 | |
Class of Warrant or Right [Line Items] | |
Warrants | 309,503 |
Exercise price | $0.21 |
Remaining life (years) | 3 years 9 months |
Exercisable warrants remaining | 309,503 |
Warrants Issued in Share-for-Warrant Exchange | |
Class of Warrant or Right [Line Items] | |
Warrants | 427,729 |
Exercise price | $0.10 |
Remaining life (years) | 1 year 9 months |
Exercisable warrants remaining | 427,729 |
Warrants_Details_Narrative
Warrants (Details Narrative) (USD $) | 9 Months Ended |
Nov. 30, 2014 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants exercised | 2,168,900 |
Proceeds from warrants exercised | $7,000 |
Common Stock for warrant exchange, Maximilian | -427,729 |
Outstanding warrants, weighted average exercise price | $0.11 |
Weighted average remaining life | 1 year 8 months |
Intrinsic value | $292,406 |
Restricted_Stock_and_Restricte2
Restricted Stock and Restricted Stock Unit Plan (Details) | 9 Months Ended | |
Nov. 30, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted shares, awarded | 3,000,000 | |
Restricted shares, vested | 2,986,220 | [1] |
Restricted shares, returned | 13,780 | [2] |
Restricted shares, outstanding, unvested | 0 | |
Grant Date - 04/07/2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted shares, awarded | 1,900,000 | |
Restricted shares, vesting period | 3 years | |
Restricted shares, vested | 1,900,000 | |
Restricted shares, returned | 0 | |
Restricted shares, outstanding, unvested | 0 | |
Grant Date (A) - 07/16/2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted shares, awarded | 25,000 | |
Restricted shares, vesting period | 3 years | |
Restricted shares, vested | 25,000 | |
Restricted shares, returned | 0 | |
Restricted shares, outstanding, unvested | 0 | |
Grant Date (B) - 07/16/2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted shares, awarded | 625,000 | |
Restricted shares, vesting period | 4 years | |
Restricted shares, vested | 619,130 | |
Restricted shares, returned | 5,870 | |
Restricted shares, outstanding, unvested | 0 | |
Grant Date (A) - 07/22/2010 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted shares, awarded | 25,000 | |
Restricted shares, vesting period | 3 years | |
Restricted shares, vested | 25,000 | |
Restricted shares, returned | 0 | |
Restricted shares, outstanding, unvested | 0 | |
Grant Date (B) - 07/22/2010 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted shares, awarded | 425,000 | |
Restricted shares, vesting period | 4 years | |
Restricted shares, vested | 417,090 | |
Restricted shares, returned | 7,910 | |
Restricted shares, outstanding, unvested | 0 | |
[1] | Does not include shares that were withheld to satisfy such tax liability upon vesting of a restricted award by a Plan Participant, and subsequently returned to the 2009 Plan. | |
[2] | Reflects the number of common shares that were withheld pursuant to the settlement of the number of shares with a fair market value equal to such tax withholding liability, to satisfy such tax liability upon vesting of a restricted award by a Plan Participant. |
Restricted_Stock_and_Restricte3
Restricted Stock and Restricted Stock Unit Plan (Details Narrative) (USD $) | 9 Months Ended | |
Nov. 30, 2014 | ||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Restricted shares, awarded | 3,000,000 | |
Restricted shares, vested | 2,986,220 | [1] |
Restricted shares available for grant | 1,013,780 | |
Recognized compensation expense | $2,515 | |
Restricted shares, returned to satisfy payroll tax liability | 2,040 | |
[1] | Does not include shares that were withheld to satisfy such tax liability upon vesting of a restricted award by a Plan Participant, and subsequently returned to the 2009 Plan. |
Income_Taxes_Income_Tax_Expens
Income Taxes - Income Tax Expense Benefit Reconciliation (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation | ||
Computed at U.S. and state statutory rates (40%) | ($111,024) | ($559,340) |
Permanent differences | 108,489 | 94,980 |
Changes in valuation allowance | 2,535 | 464,360 |
Income tax expense (benefit) | $0 | $0 |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Deferred tax assets: | ||
Net operating loss carryforwards | $8,752,681 | $8,344,222 |
Oil and gas properties | -1,151,823 | -832,267 |
Stock based compensation | 88,471 | 87,716 |
Other | -98,565 | -11,442 |
Less valuation allowance | -7,590,764 | -7,588,229 |
Deferred tax assets, net | $0 | $0 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards, federal and state, approximate | $21,881,703 | |
Changes in valuation allowance | $2,535 | $464,360 |