Breitling Energy (BECC) 10-Q 13 Nov 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 13, 2014
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	30-Sep-14	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q3	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	499,083,626

Consolidated_and_Combined_Bala

Consolidated and Combined Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets	'	'
Cash	$1,930,555	$606,715
Other	'	898
Total current assets	1,930,555	607,613
Other assets	'	'
Equity investment	62,862	3,561
Other property and equipment, net of depreciation	158,495	153,621
Total other assets	221,357	157,182
Total assets	2,151,912	764,795
Current liabilities	'	'
Accounts payable and accrued liabilities	2,427,440	3,119,727
Joint interest revenues payable	'	151,153
Deferred revenue from third party contracts	'	4,609,041
Current asset retirement obligations	24,770	16,495
Total current liabilities	2,452,210	7,896,416
Commitments and contingencies	'	'
Long-term liabilities	'	'
Asset retirement obligations	38,386	20,842
Stockholders' deficit	'	'
Common stock, $.001 par value; 500,000,000 shares authorized; 499,083,626 and 498,883,626 shares issued and outstanding, respectively	499,084	498,884
Additional paid in capital	19,800	'
Accumulated deficit	-857,568	-7,651,347
Total stockholders' deficit	-338,684	-7,152,463
Total liabilities and stockholders' deficit	$2,151,912	$764,795

Consolidated_and_Combined_Bala1

Consolidated and Combined Balance Sheets (Parentheticals) (USD $)	Sep. 30, 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	499,083,626	498,883,626
Common Stock, shares outstanding	499,083,626	498,883,626

Consolidated_and_Combined_Stat

Consolidated and Combined Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues	'	'	'	'
Third party drilling	$6,593,060	$4,244,145	$24,456,653	$9,645,784
Gain on sale of oil and natural gas royalties	9,579,685	6,178,362	24,323,814	14,041,732
Oil, natural gas, and related product sales	309,060	190,441	644,419	432,820
Total revenues	16,481,805	10,612,948	49,424,886	24,120,336
Expenses	'	'	'	'
Third party drilling and completion	8,467,587	1,689,365	18,491,676	3,839,465
General and administrative	2,925,728	5,504,605	6,214,643	12,510,468
Marketing	4,856,874	930,468	11,713,107	2,114,700
Professional fees	204,165	1,859,409	5,079,510	4,225,928
Lease operating	293,543	200,677	382,036	456,084
Depreciation and amortization	9,313	3,705	38,993	11,113
Total expenses	16,757,210	10,188,229	41,919,965	23,157,758
Operating (loss) income	'	'	'	'
Operating (loss) income	-275,405	424,719	7,504,921	962,578
Other expense	'	'	'	'
Interest expense	'	1,009	'	2,294
(Loss) Income before income taxes	-275,405	423,710	7,504,921	960,284
Income tax expense	'	'	'	'
Income tax provision	483,824	7,697	711,142	17,493
Net (loss) income	($759,229)	$416,013	$6,793,779	$942,791
Net (loss) income per basic and diluted common share	$0	$0	$0.01	$0
Weighted average basic and diluted common shares outstanding	499,083,626	498,883,626	499,083,626	498,883,626

Consolidated_and_Combined_Stat1

Consolidated and Combined Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities	'	'
Net income	$6,793,779	$942,791
Adjustments to reconcile net loss to net cash provided by operating activities:	'	'
Depreciation and amortization	38,993	11,113
Accretion of asset retirement obligation	10,577	2,294
Additions to ARO charged to turnkey drilling costs	15,242	-11,000
Net (gain) loss from equity investment	-59,301	11,000
Increase (decrease) in cash attributable to changes in operating assets and liabilities:	'	'
Other current assets	898	-8,150
Accounts payable and accrued liabilities	-692,287	-559,823
Joint interest revenues payable	-151,153	39,414
Deferred revenues	-4,609,041	1,541,955
Net cash provided by operating activities	1,337,130	1,969,594
Cash flows from investing activities	'	'
Acquisition of other property and equipment	-33,290	-121,725
Investment in equity investment	'	-10,500
Net cash used in investing activities	-33,290	-132,225
Cash flows from financing activities	'	'
Proceeds from the exercise of warrants	20,000	'
Net increase in cash	1,323,840	1,837,369
Cash, beginning of period	606,715	4,668,839
Cash, end of period	$1,930,555	$6,506,208

Basis_of_Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2014
Basis of Presentation [Abstract]	'
Basis of Presentation	'
	1. Basis of Presentation
	In the opinion of management, the accompanying unaudited consolidated and combined financial statements include all necessary adjustments (consisting of normal recurring adjustments) and present fairly the consolidated financial position of Breitling Energy Corporation and its subsidiaries (the “Company” or “Breitling”) as of September 30, 2014, the results of their operations for the three and nine months ended September 30, 2014 and 2013 and the results of their cash flows for the nine months ended September 30, 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 and nine months ended September 30, 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 Form 8-K and Schedule 14C. Certain reclassifications have been made to the consolidated financial statements for prior periods in order to conform to the current period presentation.
	Principles of Consolidation and Combination
	The consolidated and combined financial statements reflect the historical combined results of the Predecessors (defined below) 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.
	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.

Organization_and_Nature_of_Ope

Organization and Nature of Operations	9 Months Ended
	Sep. 30, 2014
Organization and Nature of Operations [Abstract]	'
Organization and Nature of Operations	'
	2. Organization and Nature of Operations
	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 Company entered into an Asset 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 the Company’s common stock, par value $.001 per share (“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 (the “Closing”), all of the Company’s outstanding convertible notes were converted into shares of 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. 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 did not affect the number of shares of Common Stock held by the Company’s existing public stockholders.
	The Predecessors were considered the accounting acquirer for accounting purposes because they obtained effective control of the Company.  The Predecessors did not have a change in control since the Predecessors’ operations comprised 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 of the 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 Predecessors’ 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 for the periods prior to December 9, 2013 are those of the Predecessors.  Historical financial statements for periods after December 9, 2013 include the combined business of the Company and the Predecessors

Asset_Retirement_Obligation

Asset Retirement Obligation	9 Months Ended
	Sep. 30, 2014
Asset Retirement Obligation [Abstract]	'
Asset Retirement Obligation	'
	3. Asset Retirement Obligation
	The following table presents a summary of the Company’s Asset Retirement Obligation:
	Balance as of December 31, 2013	$	37,337
	Additions		15,242
	Accretion		10,577
	Balance as of September 30, 2014	$	63,156

Commitment_and_Contingencies

Commitment and Contingencies	9 Months Ended
	Sep. 30, 2014
Commitment and Contingencies [Abstract]	'
Commitment and Contingencies	'
	4. 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 any assurance. As of September 30, 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.

Income_Tax_Expense

Income Tax Expense	9 Months Ended
	Sep. 30, 2014
Income Tax Expense [Abstract]	'
Income Tax Expense	'
	5. Income Tax Expense
	For the three months ended September 30, 2014, we recorded an income tax expense of $483,824 compared to $7,697 during the same period last year. For the nine months ended September 30, 2014, we recorded an income tax expense of $711,142 compared to an expense of $17,493 during the 2013 period.
	For the nine months ended September 30, 2014, the increase in income tax expense is primarily due to increased income, offset by the utilization of our net operating loss carryovers (“NOLs”).  We continue to recognize a full valuation allowance against the deferred tax asset related to our NOLs until there is greater assurance of our ability to utilize these in the future.
	Our effective tax rates were different than our federal statutory tax rate due to utilization of our deferred tax asset and Texas state margin taxes. Estimates of future taxable income can be significantly affected by changes in oil and natural gas prices, the timing, and amount, of future operating expenses and capital costs.

Basis_of_Presentation_Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2014
Basis of Presentation [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 (defined below) 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.
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.

Asset_Retirement_Obligation_Ta

Asset Retirement Obligation (Tables)	9 Months Ended
	Sep. 30, 2014
Asset Retirement Obligation [Abstract]	'
Asset Retirement Obligation	'
	Balance as of December 31, 2013	$	37,337
	Additions		15,242
	Accretion		10,577
	Balance as of September 30, 2014	$	63,156

Organization_and_Nature_of_Ope1

Organization and Nature of Operations (Details) (USD $)	1 Months Ended
	Dec. 09, 2013	Sep. 30, 2014	Dec. 31, 2013
Organization and Nature of Operations (Textual)	'	'	'
Common Stock, shares issued	461,863,084	499,083,626	498,883,626
Common stock shares issued, percentage of stock outstanding	92.50%	'	'
Common stock par value	$0.00	$0.00	$0.00

Asset_Retirement_Obligation_De

Asset Retirement Obligation (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]	'	'
Asset retirement obligations, beginning of period	$37,337	'
Additions to asset retirement obligation	15,242	'
Accretion of asset retirement obligation	10,577	2,294
Asset retirement obligations, end of period	$63,156	'

Commitment_and_Contingencies_D

Commitment and Contingencies (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Commitment and Contingencies (Textual)	'	'
Amount accrued to settle working interest rescissions	$166,000	$166,000

Income_Tax_Expense_Details

Income Tax Expense (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Tax Expense [Abstract]	'	'	'	'
Income Tax Expense	$483,824	$7,697	$711,142	$17,493