| Significant Accounting Policies | (a) Use of
Estimates: The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates. The Company’s financial statements are
based on a number of significant estimates, including oil and natural gas reserve quantities which are the basis for the calculation
of depreciation, depletion and impairment of oil and natural gas properties, and timing and costs associated with its asset retirement
obligations, as well as those related to the fair value of stock options, stock warrants and stock issued for services. While we
believe that our estimates and assumptions used in preparation of the financial statements are appropriate, actual results could
differ from those estimates. (b) Cash and Cash Equivalents: Cash and cash equivalents include all highly
liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost,
which approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist
primarily of cash deposits. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation
(“ FDIC (c) Receivables: Receivables that management has the intent and
ability to hold for the foreseeable future are reported in the balance sheet at outstanding principal adjusted for any charge-offs
and the allowance for doubtful accounts. Losses from uncollectible receivables are accrued when both of the following conditions
are met: (a) information available before the financial statements are issued or are available to be issued indicates that it is
probable that an asset has been impaired at the date of the financial statements, and (b) the amount of the loss can be reasonably
estimated. These conditions may be considered in relation to individual receivables or in relation to groups of similar types of
receivables. If the conditions are met, an accrual shall be made even though the particular receivables that are uncollectible
may not be identifiable. The Company reviews individually each receivable for collectability and performs on-going credit evaluations
of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined
by the review of their current credit information, and determines the allowance for doubtful accounts based on historical write-off
experience, customer specific facts and general economic conditions that may affect a client’s ability to pay. Bad debt expense
is included in general and administrative expenses, if any. Credit losses for receivables (uncollectible
receivables), which may be for all or part of a particular receivable, shall be deducted from the allowance. The related receivable
balance shall be charged off in the period in which the receivables are deemed uncollectible. Recoveries of receivables previously
charged off shall be recorded when received. The Company charges off its account receivables against the allowance after all means
of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts at October
31, 2017 and April 30, 2017 was $0. (d) Interest in Real Estate Rights: I nterest
in real estate rights contributed by Fortis related to real properties that Fortis plans to sell within one year. Since these properties
are contributed by Fortis, a related party, the rights are stated on balance sheet at the cost basis of Fortis. (e) Oil and Gas Operations: Oil and Gas Properties Oil and gas properties may include costs that
are excluded from costs being depleted. Oil and gas costs excluded represent investments in unproved properties and major development
projects in which the Company owns a direct interest. These unproved property costs include non-producing leasehold, geological
and geophysical costs associated with leasehold or drilling interests and in process exploration drilling costs. All costs excluded
are reviewed at least annually to determine if impairment has occurred. Long-lived assets are reviewed for impairment
whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate.
For the six months ended October 31, 2017, the Company evaluated these properties and recorded an impairment in the amount
of $241,881. Proved Oil and Gas Reserves Depletion, Depreciation and Amortization: In arriving at rates under the unit-of-production
method, the quantities of recoverable oil and natural gas reserves are established based on estimates made by the Company’s
geologists and engineers which require significant judgment, as does the projection of future production volumes and levels of
future costs, including future development costs. In addition, considerable judgment is necessary in determining when unproved
properties become impaired and in determining the existence of proved reserves once a well has been drilled. All of these judgments
may have significant impact on the calculation of depletion expenses. There have been no material changes in the methodology used
by the Company in calculating depletion, depreciation and amortization of oil and gas properties under the full cost method during
the six months ended October 31, 2017 and 2016. (f) Investments: Investments held in stock of entities other
than subsidiaries, namely corporate joint ventures and other non-controlled entities, usually are accounted for by one of three
methods: (i) the fair value method, (ii) the equity method, or (iii) the cost method. The equity method tends to be most appropriate
if an investment enables the investor to influence the operating or financial policies of the investee. The cost basis is utilized
for investments that are less than 20% owned, and the Company does not exercise significant influence over the operating and financial
policies of the investee. Under the cost method, investments are held at historical cost. (g) Fair Value of Financial Instruments: The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“ Paragraph 820-10-35-37
Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when
their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one
significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization
is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amount of the Company’s financial
assets and liabilities, such as cash, prepaid expenses, and accounts payable and accrued liabilities approximate their fair value
because of the short maturity of those instruments. Transactions involving related parties cannot
be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings
may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions
were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be
substantiated. (h) Stock-Based Compensation: Generally, all forms of stock-based compensation,
including stock option grants, warrants, and restricted stock grants are measured at their fair value utilizing an option pricing
model on the award’s grant date, based on the estimated number of awards that are ultimately expected to vest. Under fair value recognition provisions, the
Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for
those shares expected to vest over the requisite service period of the award. The fair value of option award is estimated
on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires
the development of assumptions that are input into the model. These assumptions are the expected stock volatility, the risk–free
interest rate, the option’s expected life, the dividend yield on the underlying stock and the expected forfeiture rate. Expected
volatility is calculated based on the historical volatility of the Company’s Common Stock over the expected option life and
other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates
for the appropriate term. The dividend yield is assumed to be zero, as the Company has never paid or declared any cash dividends
on its Common Stock and does not intend to pay dividends on the Common Stock in the foreseeable future. The expected forfeiture
rate is estimated based on historical experience. Determining the appropriate fair value model
and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described
above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best
estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change
and the Company uses different assumptions, the equity–based compensation expense could be materially different in the future.
In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected
to vest. If the actual forfeiture rate is materially different from our estimate, the equity–based compensation expense could
be significantly different from what the Company has recorded in the current period. The Company determines the fair value of the
stock–based payments to non-employees as either the fair value of the consideration received or the fair value of the equity
instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it
is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment
for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s
performance is complete. The expenses resulting from stock-based compensation
are recorded as general and administrative expenses in the consolidated statement of operations, depending on the nature of the
services provided. (i) Income Taxes: Income Tax Provision Deferred income tax assets and liabilities are
determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using
the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced
by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company may recognize the tax benefit from
an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized
upon ultimate settlement. The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well
as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded
on its consolidated balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation
of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the
Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion,
adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates,
additional allowances or reversals of reserves may be necessary. Uncertain Tax Positions The Company evaluates uncertain tax positions
to recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by the taxing authorities based on the technical merits of the position. Those tax positions failing to qualify
for initial recognition are recognized in the first interim period in which they meet the more likely than not standard, or are
resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition
of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets
the more likely than not threshold of being sustained. At October 31, 2017 and April 30, 2017, the
Company had approximately $3.7 million and $3.4 million, respectively, of liabilities for uncertain tax positions. Interpretation
of taxation rules relating to net operating loss utilization in real estate transactions give rise to uncertain positions. In connection
with the uncertain tax position, there were no interest or penalties recorded as the position is expected but the tax returns are
not yet due. The Company is subject to ongoing tax exposures,
examinations and assessments in various jurisdictions. Accordingly, the Company may incur additional tax expense based upon the
outcomes of such matters. In addition, when applicable, the Company will adjust tax expense to reflect the Company’s ongoing
assessments of such matters, which require judgment and can materially increase or decrease its effective rate as well as impact
operating results. The number of years with open tax audits varies
depending on the tax jurisdiction. The Company’s major taxing jurisdictions include the United States (including applicable
states). (j) Per Share Amounts: Basic net income (loss) per common share is
computed by dividing net loss attributable to stockholders by the weighted-average number of shares of common stock outstanding
during the period. Diluted net income (loss) per common share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock equivalents. For the six months ended October
31, 2017 and 2016, potentially dilutive securities were not included in the calculation of diluted net loss per share because to
do so would be anti-dilutive. The Company had the following common stock equivalents
at October 31, 2017 and 2016:
October 31, 2017 October 31, 2016
Stock Options 2,529,682 2,507,182
Stock Purchase Warrants 973,669 133,333
Total 3,503,351 2,640,515 (k) Recent Accounting Pronouncements: In May 2014, the FASB issued a comprehensive
new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard’s
core principle (issued as ASU 2014-09 by the FASB), is that a company will recognize revenue when it transfers promised goods or
services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for
those goods or services. These may include identifying performance obligations in the contract, estimating the amount of variable
consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.
The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption
or a modified retrospective approach. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU 2014-09
by one year, and would allow entities the option to early adopt the new revenue standard as of the original effective date. This
ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2017. The Company is
currently evaluating its adoption method and the impact of the standard on its consolidated financial statements and has not yet
determined the method by which the Company will adopt the standard in 2018. In April 2016, the FASB issued ASU No. 2016-10,
“ Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting
Revenue Gross versus Net) “Revenue from Contracts with Customers.” In April 2016, the FASB issued ASU No. 2016-09,
“ Compensation – Stock Compensation In August 2016, the FASB issued ASU 2016-15,
“Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” ASU
2016-15 The Company does not expect the adoption of
any other recently issued accounting pronouncements to have a significant impact on its financial position, results of operations,
or cash flows. (l) Subsequent Events: The Company has evaluated all transactions through
the date the consolidated financial statements were issued for subsequent event disclosure consideration. |
