Breitling Energy (BECC) 10-Q 15 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	10-May-14
Document and Entity Information:	'	'
Entity Registrant Name	'Breitling Energy Corp	'
Entity Central Index Key	'0001229089	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	499,083,626

CONSOLIDATED_AND_COMBINED_BALA

CONSOLIDATED AND COMBINED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current assets	'	'
Cash	$2,629,264	$606,715
Other	'	898
Total current assets	2,629,264	607,613
Other assets	'	'
Equity investment	30,884	3,561
Other property and equipment, net of depreciation	165,209	153,621
Total other assets	196,093	157,182
Total assets	2,825,357	764,795
Current liabilities	'	'
Accounts payable and accrued liabilities	2,830,651	3,119,727
Joint interest revenues payable	396,850	151,153
Deferred revenue from third party contracts	'	4,609,041
Current asset retirement obligations	16,495	16,495
Total current liabilities	3,243,997	7,896,416
Commitments and contingencies	'	'
Long-term liabilities	'	'
Asset retirement obligations	21,607	20,842
Shareholders' deficit	'	'
Common stock, $.001 par value; 500,000,000 shares authorized; 498,883,626 and 498,883,626 shares issued and outstanding, respectively	498,884	498,884
Accumulated deficit	-939,130	-7,651,347
Total stockholders' deficit	-440,246	-7,152,463
Total liabilities and shareholders' deficit	$2,825,357	$764,795

CONSOLIDATED_AND_COMBINED_BALA1

CONSOLIDATED AND COMBINED BALANCE SHEETS (Parentheticals) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Common Stock, par value	$0.00	$0.00
Common Stock, shares authorized	500,000,000	500,000,000
Common Stock, shares issued	498,883,626	498,883,626
Common Stock, shares outstanding	498,883,626	498,883,626

CONSOLIDATED_AND_COMBINED_STAT

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenues	'	'
Third party drilling	$10,174,885	$3,183,109
Gain on sale of oil and natural gas royalties	6,558,531	4,633,772
Oil, natural gas, and related product sales	177,774	142,831
Total revenues	16,911,124	7,959,711
Expenses	'	'
Third party drilling and completion	3,343,668	1,267,023
General and administrative	1,193,421	4,128,454
Marketing	2,542,757	697,851
Professional fees	2,945,443	1,394,556
Lease operating	45,352	150,508
Depreciation and amortization	3,704	3,704
Total expenses	10,074,344	7,642,097
Operating income	6,836,780	316,857
Income tax expense	'	'
State tax provision	124,563	5,773
Net Income	$6,712,217	$311,084
Net Income per basic and diluted common share	$0.01	$0
Weighted average basic and diluted common shares outstanding	498,883,626	461,467,354

CONSOLIDATED_AND_COMBINED_STAT1

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities	'	'
Net (loss) income	$6,712,217	$311,084
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	'	'
Depreciation and amortization	3,704	3,704
Accretion of asset retirement obligation	765	2,294
Net (gain) loss from equity investment	-27,323	12,205
Increase (decrease) in cash attributable to changes in operating assets and liabilities:	'	'
Related party receivable	898	-8,150
Accounts payable and other adjustments	-289,076	1,753,642
Joint interest revenues payable	245,697	77,946
Deferred revenues	4,609,041	513,985
Net cash provided by operating activities	2,037,841	2,666,710
Cash flows from investing activities	'	'
Acquisition of other property and equipment	-15,292	-37,662
Investment in equity investment	'	-11,000
Net cash used by investing activities	-15,292	-48,662
Net increase in cash	2,022,549	2,618,084
Cash, beginning of period	606,715	4,668,839
Cash, end of period	$2,629,264	$7,286,887

Organization_and_nature_of_ope

Organization and nature of operations	3 Months Ended
	Mar. 31, 2014
Organization and nature of operations [Abstract]	'
Organization and nature of operations	'
	1. Organization and nature of operations
	In the opinion of management, the accompanying unaudited consolidated financial statements include all necessary adjustments (consisting of normal recurring adjustments) and present fairly the consolidated financial position of Breitling Energy Corporation and Subsidiaries (the "Company" or “Breitling”) as of March 31, 2014 and the results of their operations for the three months ended March 31, 2014 and 2013 and the results of their cash flows for the three months ended March 31, 2014 and 2013, in conformity with generally accepted accounting principles for interim financial information applied on a consistent basis. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year.
	Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 31, 2014, as well as all subsequent reports on Forms 8-K and 14C. Certain reclassifications have been made to the consolidated financial statements for prior periods in order to conform to the current period presentation.
	Recently adopted accounting pronouncements
	From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.
	Breitling Energy Corporation was incorporated in the State of Nevada on December 13, 2000 under the name “Folix Technologies, Inc.” On August 18, 2004, the Company changed its name to Dragon Gold Resources, Inc. On June 22, 2007, the Company changed its name to Edgeline Holdings, Inc. and on March 11, 2008 to Oncolin Therapeutics, Inc. On September 7, 2010, the Company changed its name to Bering Exploration, Inc. and on January 20, 2014, to Breitling Energy Corporation.
	On December 9, 2013 (the “Acquisition Date”), the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Breitling Oil and Gas Corporation, a Texas corporation (“O&G”) and Breitling Royalties Corporation, a Texas corporation (“Royalties,” and collectively with O&G, the “Predecessors”). Pursuant to the Purchase Agreement, the Company issued to the Predecessors 461,863,084 shares of Common Stock, in exchange for substantially all of the oil and gas assets owned by the Predecessors (the “Transaction”). In connection with the closing of the Transaction, all of the Company’s outstanding convertible notes were converted into Common Stock. The shares of Common Stock issued to the Predecessors represent approximately 92.5% of the shares of Common Stock outstanding following the closing of the Transaction (the “Closing”). The Transaction results in the owners of the Predecessors (the “accounting acquirer”) having actual or effective operating control of the Company after the Transaction, with the stockholders of the Company (the “legal acquirer”) continuing only as passive investors. The closing of the Transaction did not affect the number of shares of Common Stock held by the Company’s existing public stockholders.
	The Predecessors were considered the acquirer for accounting purposes because they obtained effective control of the Company.  The Predecessors did not have a change in control since the Predecssors’ operations comprise the ongoing operations of the combined entity, their senior management became the senior management of the combined entity, and their former owners own a majority voting interest in the combined entity and are able to elect a majority of the combined entity’s board of directors. Accordingly, the Transaction does not constitute the acquisition of a business for purposes of Financial Accounting Standards Board’s Accounting Standard Codification 805, “Business Combinations,” or ASC 805. As a result, the assets and liabilities of the Predecssors are carried at historical cost and the Company has not recorded any step-up in basis or any intangible assets or goodwill as a result of the Transaction. The historical financial statements presented herein are that of the Predecessors.

Liquidity

Liquidity	3 Months Ended
	Mar. 31, 2014
Liquidity [Abstract]	'
Liquidity	'
	3. Liquidity
	For the three months ended March 31, 2014, the Company has generated net income of $6,712,217, and cash flow from operations of $2,037,841.  The Company has incurred losses and negative cash flows from operations in recent years and expects to continue to incur operating losses until revenues from all sources reach a level sufficient to support its on-going operations. The Company’s liquidity will largely be determined by its ability to raise capital from debt, equity, or other forms of financing, by the success of its product offerings, by developing additional product offerings, and by reducing expenses associated with operations. The Company’s management believes that its cash resources at March 31, 2014, will be sufficient to meet current obligations and fund its operating activities through December 31, 2014.
	In the absence of a sufficient increase in revenues, the Company will need to do one or more of the following in the next 12 months to meet its planned level of expenditures: (a) raise additional capital; (b) reduce spending on operations; or (c) restructure its operations. A capital raise could take any number of forms including but not limited to: additional debt, additional equity, asset sales, or other forms of financing as dictated by its needs and its view toward its overall capital structure. However, additional financing might not be available on acceptable terms, if at all, and such financing might only be available on terms dilutive or otherwise detrimental to its stockholders or its business. As such, the Company’s Chief Executive Officer, Mr. Chris Faulkner, has personally guaranteed his ability and financial wherewithal to ensure the Company can continue until at least January 1, 2015. This personal guaranty may include reduction of salary, capital or debt contributions and/or other measures, as needed.

Summary_of_significant_account

Summary of significant accounting policies	3 Months Ended
	Mar. 31, 2014
Summary of significant accounting policies [Abstract]	'
Summary of significant accounting policies	'
	4. Summary of significant accounting policies
	Principles of Consolidation and Combination
	The consolidated and combined financial statements reflect the historical combined results of the Predecessors prior to the reverse recapitalization completed on December 9, 2013, and the consolidated results of the Company thereafter. All intercompany and inter-entity transactions have been eliminated in the consolidation and combination.
	Fair Value Measurements
	The Company has adopted and follows ASC 820, Fair Value Measurements and Disclosures, for measurement and disclosures about fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. 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. The three (3) levels of fair value hierarchy defined by ASC 820 are:
	Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
	Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
	Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
	As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, oil and natural gas sales receivable, and accounts payable and accrued liabilities, approximate their fair values because of the short maturity of these instruments.
	Cash
	The Company considers all highly-liquid debt instruments with original maturities of three months or less to be cash equivalents. As of March 31, 2014 and 2013, the Company did not hold any cash equivalents. The Company maintains its cash balances in financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”). The interest bearing cash accounts maintain FDIC coverage of up to $250,000 per institution.
	Other Property and Equipment
	Other property and equipment, which includes furniture, vehicles, software, and office equipment, is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Furniture and office equipment are generally depreciated over a useful life of ten years, vehicles over a useful life of five years, and software over a useful life of three years.
	Impairment of Long-Lived Assets
	The Company assesses the impairment of long-lived assets when circumstances indicate that the carrying value may not be recoverable. The Company determines if impairment has occurred through adverse changes. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. For the three months ended March 31, 2014, and any prior applicable periods, no circumstances indicated an unrecoverable carrying value of the long-lived assets.
	Asset Retirement Obligations
	The Company follows the provisions of ASC 410-20, Asset Retirement Obligations. ASC 410-20 requires the Company to record the fair value of obligations associated with the retirement of tangible long-lived assets in the period in which it is incurred. When the liability is initially recorded, the Company capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depleted as part of the oil and natural gas property. Upon settlement of the liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The Company’s asset retirement obligations relate to the plugging, dismantlement, removal, site reclamation and similar activities of its oil and natural gas properties.
	Asset retirement obligations are estimated at the present value of expected future net cash flows and are discounted using the Company’s credit adjusted risk free rate. The Company uses unobservable inputs in the estimation of asset retirement obligations that include, but are not limited to, costs of labor, costs of materials, profits on costs of labor and materials, the effect of inflation on estimated costs, and the discount rate. Accordingly, asset retirement obligations are considered a Level 3 measurement under ASC 820. Additionally, because of the subjectivity of assumptions and the relatively long lives of the Company’s wells, the costs to ultimately retire the Company’s wells may vary significantly from prior estimates.
	Revenue Recognition
	The Company has entered into drilling contracts with outside working interest owners to develop leasehold acreage that the Company has acquired. In these arrangements, the Company acquired a working interest in a prospect pursuant to an oil and gas lease, and then sold a portion of a well’s working interest on the acquired lease to outside working interest owners with a third party drilling agreement. Title to the lease property was not conveyed to the outside working interest owners. The outside working interest owner purchases a working interest directly in the well bore. The working interest purchased in these drilling agreements is an ownership interest in which the working interest holder is obligated to bear the cost of drilling, testing, completing, equipping and operating the well. The Company typically sells a large portion of the working interests and has a third-party operate the projects.
	In a third party drilling agreement, the Company agrees to sell a percentage of the well’s working interest to outside working interest owners and to pay for all costs of identifying, acquiring mineral rights to, drilling, testing, completing and equipping the well for initial production at a fixed price. If the actual costs of these activities exceed the price the Company charged to the outside working interest owners, the Company is obligated to pay the excess cost. If the actual costs are less, the Company retains the excess over actual costs. The Company bears 100% of the risk should actual cost exceed estimated costs of a project for both the Company’s working interest and the working interest sold. When the well is completed as a commercially productive well, the Company and the outside working interest owners bear the cost of operating the well according to each party’s proportionate working interest percentage.
	When the Company entered into a third party drilling agreement, outside working interest owners entered into a signed contract with the Company pursuant to which they agree to share in the prospect acquisition costs and drilling costs. The prospect acquisition costs include geophysical and geographical costs, costs to lease the mineral rights, and other costs as required so the drilling of the project can proceed. Drilling costs are those costs incurred to build the drilling location, drill and log the well, and if the well is successful, to complete and test the well. Once drilling begins, the well is generally completed within 30 to 60 days. The Company bases the price at which it sells working interests under the third party drilling agreement on its estimates of the costs described above. Since the outside working interest owner’s interest in the prospect is limited to the well, and not the lease, the outside working interest owner does not have a legal right to participate in additional wells drilled within the same lease. However, it is the Company’s policy to offer to outside working interest owners in a successful well the right to participate in subsequent wells at the same percentage level as their working interest investment in the prior successful well with similar third party drilling agreement terms.
	The Company recognizes revenues associated with its third party contracts when development steps outlined in the contract have been achieved on a well under development. Revenues are earned in accordance with the third party contracts when the following development steps are met on the respective oil and natural gas well under development: completion of the drilling/testing of the well and completion of the completion/equipping phase of the well. Any cash collected under the third party contracts that have not met one of the development steps is deferred and presented as deferred revenue from third party contracts on the combined balance sheets. The third party revenue is recorded on a gross basis with the associated drilling costs, as agreed to in the third party contract, being deferred until the associated revenue is recognized. Early recognition of loss is recorded if it is determined that the well cost will exceed the applicable revenue received on the specific well. Total third party drilling revenues recognized for the three months ended March 31, 2014 and 2013 were approximately $10,175,000 and $3,183,000, respectively. As of March 31, 2014, the Company recognized $4,609,000 that was previously deferred as of December 31, 2013.
	The Company utilizes the accrual method of accounting for natural gas and crude oil revenues, whereby revenues are recognized based on the Company’s net revenue interest in the wells. The Company will also enter into physical contract sale agreements through its normal operations. Revenue from the sale of natural gas and crude oil is recognized when title to the commodities passes.
	Gas imbalances are accounted for using the sales method. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. However, the Company has no history of significant gas imbalances.
	Sales-Based Taxes
	The Company incurs severance tax on the sale of its production which is generated in Texas, North Dakota and Oklahoma. These taxes are reported on a gross basis and are included in lease operating expense within the accompanying combined statements of operations. Sales-based taxes for the three months ended March 31, 2014 and 2013 were approximately $9,000 and $8,000, respectively
	Lease Operating Expenses
	Lease operating expenses include severance and production taxes, field personnel salaries, saltwater disposal, ad valorem taxes, repairs and maintenance, and other operating expenses. Lease operating expenses are expensed as incurred. The Company recognized $45,000 and $151,000 for the three months ended March 31, 2014 and 2013, respectively for lease operating expenses.
	General and Administrative Expense
	General and administrative expenses are reported net of recoveries from owners in properties operated by the Company and net of amounts related to lease operating activities capitalized pursuant to the full-cost method of accounting.
	Net Income (Loss) per Common Share
	Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated in the same manner, but also considers the impact to net income (loss) and common shares for the potential dilution from stock options, non-vested share appreciation rights and non-vested restricted shares.
	Use of Estimates
	The preparation of combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	The Company’s estimates of oil and natural gas reserves are, by necessity, projections based on geologic and engineering data, and there are uncertainties inherent in the interpretation of such data as well as the projection of future rates of production and the timing of development expenditures. Reserve engineering is a subjective process of estimating underground accumulations of oil and natural gas that are difficult to measure. The accuracy of any reserve estimate is a function of the quality of available data, engineering and geological interpretation and judgment. Estimates of economically recoverable oil and natural gas reserves and future net cash flows necessarily depend upon a number of variable factors and assumptions, such as historical production from the area compared with production from other producing areas, the assumed effect of regulations by governmental agencies, and assumptions governing future oil and natural gas prices, future operating costs, severance taxes, development costs and workover costs, all of which may in fact vary considerably from actual results. The future drilling costs associated with reserves assigned to proved undeveloped locations may ultimately increase to the extent that these reserves are later determined to be uneconomic. For these reasons, estimates of the economically recoverable quantities of expected oil and natural gas attributable to any particular group of properties, classifications of such reserves based on risk of recovery, and estimates of the future net cash flows may vary substantially. Any significant variance in the assumptions could materially affect the estimated quantity of the reserves, which could affect the carrying value of the Company’s oil and natural gas properties and/or the rate of depletion related to the oil and natural gas properties.

Fair_Value_Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2014
Fair Value Measurements [Abstract]	'
Fair Value Measurements	'
	5. Fair Value Measurements
	As of March 31, 2014 and December 31, 2013, the Company had no assets which were measured at fair value.
	The following table presents information about the Company’s liabilities measured at fair value as of March 31, 2014 and December 31, 2013:
		Level 1	Level 2	Level 3		Balance as of
		(unaudited)	(unaudited)	(unaudited)		March 31,
						2014
	Liabilities (at fair value):
	Asset retirement obligations	$	$	$	38,102	$	38,102
						Balance as of
		Level 1	Level 2	Level 3		December 31,
						2013
	Liabilities (at fair value):
	Asset retirement obligations	$	$	$	37,337	$	37,337

Other_Property_and_Equipment

Other Property and Equipment	3 Months Ended
	Mar. 31, 2014
Other property and equipment [Abstract]	'
Other property and equipment	'
	6. Other property and equipment
	The following table presents a summary of the Company’s other property and equipment:
		March 31,			December 31,
		2014			2013
	Furniture	$	194,275		$	194,275
	Vehicles		25,708			25,708
	Software		21,047			21,047
	Office equipment		86,919			71,627
	Less: Accumulated depreciation		(162,740	)		(159,036	)
	Total other equipment, net of accumulated deprecation	$	165,209		$	153,621

Commitment_and_Contingencies

Commitment and Contingencies	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies [Abstract]	'
Commitments and Contingencies	'
	7. Commitment and Contingencies
	Legal
	From time to time, the Company may become subject to proceedings, lawsuits and other claims in the ordinary course of business including working interest rescissions and operator disputes. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. As of March 31, 2014 and December 31, 2013, the Company accrued $166,000 to settle working interest rescissions.
	Oil and Natural Gas Regulations
	The Company is subject to various possible contingencies that arise primarily from interpretation of federal and state laws and regulations affecting the oil and natural gas industry. Such contingencies include differing interpretations as to the prices at which oil and natural gas sales may be made, the prices at which royalty owners may be paid for production from their leases, environmental issues and other matters. Although management believes that it has complied with the various laws and regulations, administrative rulings and interpretations thereof, adjustments could be required as new interpretations and regulations are issued. In addition, environmental matters are subject to regulation by various federal and state agencies.

Summary_of_significant_account1

Summary of significant accounting policies (Policies)	3 Months Ended
	Mar. 31, 2014
Summary of significant accounting policies [Abstract]	'
Principles of Consolidation and Combination	'
	Principles of Consolidation and Combination
	The consolidated and combined financial statements reflect the historical combined results of the Predecessors prior to the reverse recapitalization completed on December 9, 2013, and the consolidated results of the Company thereafter. All intercompany and inter-entity transactions have been eliminated in the consolidation and combination.
Fair Value Measurements	'
	Fair Value Measurements
	The Company has adopted and follows ASC 820, Fair Value Measurements and Disclosures, for measurement and disclosures about fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. 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. The three (3) levels of fair value hierarchy defined by ASC 820 are:
	Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
	Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
	Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
	As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, oil and natural gas sales receivable, and accounts payable and accrued liabilities, approximate their fair values because of the short maturity of these instruments.
Cash	'
	Cash
	The Company considers all highly-liquid debt instruments with original maturities of three months or less to be cash equivalents. As of March 31, 2014 and 2013, the Company did not hold any cash equivalents. The Company maintains its cash balances in financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”). The interest bearing cash accounts maintain FDIC coverage of up to $250,000 per institution.
Other Property and Equipment	'
	Other Property and Equipment
	Other property and equipment, which includes furniture, vehicles, software, and office equipment, is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Furniture and office equipment are generally depreciated over a useful life of ten years, vehicles over a useful life of five years, and software over a useful life of three years.
Impairment of Long-Lived Assets	'
	Impairment of Long-Lived Assets
	The Company assesses the impairment of long-lived assets when circumstances indicate that the carrying value may not be recoverable. The Company determines if impairment has occurred through adverse changes. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. For the three months ended March 31, 2014, and any prior applicable periods, no circumstances indicated an unrecoverable carrying value of the long-lived assets.
Asset Retirement Obligations	'
	Asset Retirement Obligations
	The Company follows the provisions of ASC 410-20, Asset Retirement Obligations. ASC 410-20 requires the Company to record the fair value of obligations associated with the retirement of tangible long-lived assets in the period in which it is incurred. When the liability is initially recorded, the Company capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depleted as part of the oil and natural gas property. Upon settlement of the liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The Company’s asset retirement obligations relate to the plugging, dismantlement, removal, site reclamation and similar activities of its oil and natural gas properties.
	Asset retirement obligations are estimated at the present value of expected future net cash flows and are discounted using the Company’s credit adjusted risk free rate. The Company uses unobservable inputs in the estimation of asset retirement obligations that include, but are not limited to, costs of labor, costs of materials, profits on costs of labor and materials, the effect of inflation on estimated costs, and the discount rate. Accordingly, asset retirement obligations are considered a Level 3 measurement under ASC 820. Additionally, because of the subjectivity of assumptions and the relatively long lives of the Company’s wells, the costs to ultimately retire the Company’s wells may vary significantly from prior estimates.
Revenue Recognition	'
	Revenue Recognition
	The Company has entered into drilling contracts with outside working interest owners to develop leasehold acreage that the Company has acquired. In these arrangements, the Company acquired a working interest in a prospect pursuant to an oil and gas lease, and then sold a portion of a well’s working interest on the acquired lease to outside working interest owners with a third party drilling agreement. Title to the lease property was not conveyed to the outside working interest owners. The outside working interest owner purchases a working interest directly in the well bore. The working interest purchased in these drilling agreements is an ownership interest in which the working interest holder is obligated to bear the cost of drilling, testing, completing, equipping and operating the well. The Company typically sells a large portion of the working interests and has a third-party operate the projects.
	In a third party drilling agreement, the Company agrees to sell a percentage of the well’s working interest to outside working interest owners and to pay for all costs of identifying, acquiring mineral rights to, drilling, testing, completing and equipping the well for initial production at a fixed price. If the actual costs of these activities exceed the price the Company charged to the outside working interest owners, the Company is obligated to pay the excess cost. If the actual costs are less, the Company retains the excess over actual costs. The Company bears 100% of the risk should actual cost exceed estimated costs of a project for both the Company’s working interest and the working interest sold. When the well is completed as a commercially productive well, the Company and the outside working interest owners bear the cost of operating the well according to each party’s proportionate working interest percentage.
	When the Company entered into a third party drilling agreement, outside working interest owners entered into a signed contract with the Company pursuant to which they agree to share in the prospect acquisition costs and drilling costs. The prospect acquisition costs include geophysical and geographical costs, costs to lease the mineral rights, and other costs as required so the drilling of the project can proceed. Drilling costs are those costs incurred to build the drilling location, drill and log the well, and if the well is successful, to complete and test the well. Once drilling begins, the well is generally completed within 30 to 60 days. The Company bases the price at which it sells working interests under the third party drilling agreement on its estimates of the costs described above. Since the outside working interest owner’s interest in the prospect is limited to the well, and not the lease, the outside working interest owner does not have a legal right to participate in additional wells drilled within the same lease. However, it is the Company’s policy to offer to outside working interest owners in a successful well the right to participate in subsequent wells at the same percentage level as their working interest investment in the prior successful well with similar third party drilling agreement terms.
	The Company recognizes revenues associated with its third party contracts when development steps outlined in the contract have been achieved on a well under development. Revenues are earned in accordance with the third party contracts when the following development steps are met on the respective oil and natural gas well under development: completion of the drilling/testing of the well and completion of the completion/equipping phase of the well. Any cash collected under the third party contracts that have not met one of the development steps is deferred and presented as deferred revenue from third party contracts on the combined balance sheets. The third party revenue is recorded on a gross basis with the associated drilling costs, as agreed to in the third party contract, being deferred until the associated revenue is recognized. Early recognition of loss is recorded if it is determined that the well cost will exceed the applicable revenue received on the specific well. Total third party drilling revenues recognized for the three months ended March 31, 2014 and 2013 were approximately $10,175,000 and $3,183,000, respectively. As of March 31, 2014, the Company recognized $4,609,000 that was previously deferred as of December 31, 2013.
	The Company utilizes the accrual method of accounting for natural gas and crude oil revenues, whereby revenues are recognized based on the Company’s net revenue interest in the wells. The Company will also enter into physical contract sale agreements through its normal operations. Revenue from the sale of natural gas and crude oil is recognized when title to the commodities passes.
	Gas imbalances are accounted for using the sales method. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. However, the Company has no history of significant gas imbalances.
Sales-Based Taxes	'
	Sales-Based Taxes
	The Company incurs severance tax on the sale of its production which is generated in Texas, North Dakota and Oklahoma. These taxes are reported on a gross basis and are included in lease operating expense within the accompanying combined statements of operations. Sales-based taxes for the three months ended March 31, 2014 and 2013 were approximately $9,000 and $8,000, respectively.
Lease Operating Expenses	'
	Lease Operating Expenses
	Lease operating expenses include severance and production taxes, field personnel salaries, saltwater disposal, ad valorem taxes, repairs and maintenance, and other operating expenses. Lease operating expenses are expensed as incurred. The Company recognized $45,000 and $151,000 for the three months ended March 31, 2014 and 2013, respectively for lease operating expenses.
General and Administrative Expense	'
	General and Administrative Expense
	General and administrative expenses are reported net of recoveries from owners in properties operated by the Company and net of amounts related to lease operating activities capitalized pursuant to the full-cost method of accounting.
Net Income (Loss) per Common Share	'
	Net Income (Loss) per Common Share
	Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated in the same manner, but also considers the impact to net income (loss) and common shares for the potential dilution from stock options, non-vested share appreciation rights and non-vested restricted shares.
Use of Estimates	'
	Use of Estimates
	The preparation of combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	The Company’s estimates of oil and natural gas reserves are, by necessity, projections based on geologic and engineering data, and there are uncertainties inherent in the interpretation of such data as well as the projection of future rates of production and the timing of development expenditures. Reserve engineering is a subjective process of estimating underground accumulations of oil and natural gas that are difficult to measure. The accuracy of any reserve estimate is a function of the quality of available data, engineering and geological interpretation and judgment. Estimates of economically recoverable oil and natural gas reserves and future net cash flows necessarily depend upon a number of variable factors and assumptions, such as historical production from the area compared with production from other producing areas, the assumed effect of regulations by governmental agencies, and assumptions governing future oil and natural gas prices, future operating costs, severance taxes, development costs and workover costs, all of which may in fact vary considerably from actual results. The future drilling costs associated with reserves assigned to proved undeveloped locations may ultimately increase to the extent that these reserves are later determined to be uneconomic. For these reasons, estimates of the economically recoverable quantities of expected oil and natural gas attributable to any particular group of properties, classifications of such reserves based on risk of recovery, and estimates of the future net cash flows may vary substantially. Any significant variance in the assumptions could materially affect the estimated quantity of the reserves, which could affect the carrying value of the Company’s oil and natural gas properties and/or the rate of depletion related to the oil and natural gas properties.
Recently adopted accounting pronouncements	'
	Recently adopted accounting pronouncements
	From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

Fair_Value_Measurements_Table

Fair Value Measurements (Table)	3 Months Ended
	Mar. 31, 2014
Fair Value Measurements [Abstract]	'
Summary of liabilities measured at fair value	'
		Level 1	Level 2	Level 3		Balance as of
		(unaudited)	(unaudited)	(unaudited)		March 31,
						2014
	Liabilities (at fair value):
	Asset retirement obligations	$	$	$	38,102	$	38,102
						Balance as of
		Level 1	Level 2	Level 3		December 31,
						2013
	Liabilities (at fair value):
	Asset retirement obligations	$	$	$	37,337	$	37,337

Other_Property_and_Equipment_T

Other Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2014
Other property and equipment [Abstract]	'
Summary of other property and equipment	'
		March 31,			December 31,
		2014			2013
	Furniture	$	194,275		$	194,275
	Vehicles		25,708			25,708
	Software		21,047			21,047
	Office equipment		86,919			71,627
	Less: Accumulated depreciation		(162,740	)		(159,036	)
	Total other equipment, net of accumulated deprecation	$	165,209		$	153,621

Organization_and_nature_of_ope1

Organization and nature of operations (Details)	1 Months Ended
	Dec. 09, 2013	Mar. 31, 2014	Dec. 31, 2013
Organization and nature of operations (Textual)	'	'	'
Common Stock, shares issued	461,863,084	498,883,626	498,883,626
Common stock shares issued, percentage of stock outstanding	92.50%	'	'

Liquidity_Details

Liquidity (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Liquidity (Textuals)	'	'
Net income	$6,712,217	$311,084
Net cash provided by operating activities	$2,037,841	$2,666,710

Summary_of_significant_account2

Summary of significant accounting policies (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Summary Of Significant Accounting Policies (Textuals)	'	'
Cash, FDIC Insured Amount	$250,000	'
Risk, Percentage	100.00%	'
Third party drilling revenues	10,174,885	3,183,109
Increase (Decrease) in Deferred Revenue	4,609,041	513,985
Oil And Gas Properties Description	'Once drilling begins, the well is generally completed within 30 to 60 days.	'
Sales-based taxes	9,000	8,000
Lease operating expenses	$45,000	$151,000

Fair_Value_Measurements_Detail

Fair Value Measurements (Details) (Asset Retirement Obligations [Member], USD $)	Mar. 31, 2014	Dec. 31, 2013
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]	'	'
Liabilities (at fair value)	$38,102	$37,337
Level 1 [Member]	'	'
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]	'	'
Liabilities (at fair value)	'	'
Level 2 [Member]	'	'
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]	'	'
Liabilities (at fair value)	'	'
Level 3 [Member]	'	'
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]	'	'
Liabilities (at fair value)	$38,102	$37,337

Other_Property_and_Equipment_D

Other Property and Equipment (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Other property and equipment	'	'
Less: Accumulated depreciation	($162,740)	($159,036)
Total other equipment, net of accumulated deprecation	165,209	153,621
Furniture [Member]	'	'
Other property and equipment	'	'
Other property and equipment	194,275	194,275
Vehicles [Member]	'	'
Other property and equipment	'	'
Other property and equipment	25,708	25,708
Software [Member]	'	'
Other property and equipment	'	'
Other property and equipment	21,047	21,047
Office equipment [Member]	'	'
Other property and equipment	'	'
Other property and equipment	$86,919	$71,627

Commitment_and_Contingencies_D

Commitment and Contingencies (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Commitments and Contingencies (Textual)	'	'
Amount accrued to settle working interest rescissions	$166,000	$166,000