Manufactured Housing Properties (MHPC) 10-Q 8 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	8-May-15
Document And Entity Information
Entity Registrant Name	Caprock Oil, Inc.
Entity Central Index Key	1277998
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
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		51,813,477
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

Consolidated_Balance_Sheets_Un

Consolidated Balance Sheets (Unaudited) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$54,650	$80,025
Accounts receivable (net of allowance for doubtful accounts of $228,574)	145,633	270,132
Prepaid expenses and other	34,909	49,586
Total current assets	235,192	399,743
Oil and gas properties, evaluated (full cost method)	16,137,554	16,046,178
Oil and gas properties, unevaluated (full cost method)	604,589	1,005,603
Other property and equipment	40,978	40,978
Total Property and equipment	16,783,121	17,092,759
Less:  Accumulated depreciation, depletion, amortization and impairment	-11,631,146	-10,536,660
Net property and equipment	5,151,975	6,556,099
Other noncurrent assets	5,237	5,238
Total other assets	5,237	5,238
Total assets	5,392,404	6,961,080
Liabilities and Stockholders' Equity
Current portion of long-term debt	2,072,797	2,052,040
Accounts payable - related party	0	217,724
Accounts payable - others	1,080,995	931,088
Accrued liabilities	1,629,778	1,575,144
Total current liabilities	4,783,570	4,775,996
Long-term debt, net of current portion	0	0
Deferred income taxes	263,900	803,800
Asset retirement obligations	487,150	479,165
Total liabilities	5,534,620	6,058,961
Stockholders' equity:
Preferred stock, $.01 par value per share, 1,000,000 shares authorized, None issued	0	0
Common stock, $.01 par value per share, 200,000,000 shares authorized, 51,813,477 shares and 51,808,276 shares, issued and outstanding	518,134	518,082
Additional paid in capital	15,172,004	15,018,429
Accumulated deficit	-15,832,354	-14,634,392
Total stockholders’ equity (deficit)	-142,216	902,119
Total liabilities and stockholders’ equity (deficit)	$5,392,404	$6,961,080

Consolidated_Balance_Sheets_Un1

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$228,574	$228,574
Stockholders' equity:
Preferred stock, par value	$0.01	$0.01
Preferred stock, authorized shares	1,000,000	1,000,000
Preferred stock, Issued shares	0	0
Common stock, par value	$0.01	$0.01
Common stock, authorized shares	200,000,000	200,000,000
Common stock, issued shares	51,813,477	51,808,276
Common stock, outstanding shares	51,813,477	51,808,276

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues:
Oil and gas sales	$162,200	$504,625
Total revenues	162,200	504,625
Operating expenses:
Lease operating expense	257,663	373,932
Depreciation, depletion & amortization	96,561	74,822
Impairment expense	997,924	0
Accretion expense	10,720	9,810
Workover expense	68,185	382,440
Selling, general and administrative	401,436	393,117
Total operating expenses	1,832,489	1,234,121
Operating loss	-1,670,289	-729,496
Other income (expense):
Interest income	14	226
Interest expense	-67,587	-21,158
Loss before income taxes	-1,737,862	-750,428
Benefit for income taxes	539,900	203,800
Net loss	($1,197,962)	($546,628)
Net loss per share, basic and diluted	($0.02)	($0.01)
Weighted average shares outstanding, basic and diluted	51,811,781	49,825,015

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net loss	($1,197,962)	($546,628)
Depreciation, depletion & amortization	96,561	74,822
Impairment expense	997,924	0
Benefit for income taxes	-539,900	-203,800
Accretion expense	10,720	9,810
Stock based compensation	150,142	151,097
Changes in current assets and liabilities	318,149	499,685
Other changes, net	3,485	0
Net cash flows from operating activties	-160,881	-15,014
Cash flows from investing activities:
Purchase of property and equipment	-146,188	-142,019
Sale of property and equipment	260,937	0
Net cash flows from investing activities	114,749	-142,019
Cash flows from financing activities:
Payments of long term debt	-139,243	-197,466
Net shareholder advances	160,000	0
Net cash flows from financing activities	20,757	-197,466
Net decrease in cash and cash equivalents	-25,375	-354,499
Cash and cash equivalents at beginning of period	80,025	877,525
Cash and cash equivalents at end of period	54,650	523,026
Supplemental cash flow data:
Cash paid for interest	65,444	21,118
Accounts payable incurred for oil and gas properties	46,908	0
Accounts payable paid upon sale of property	$239,063	$0

1_Basis_of_Presentation

1. Basis of Presentation	3 Months Ended
	Mar. 31, 2015
BasisOfPresentationAbstract
1. Basis of Presentation	Interim Financial Information – The accompanying consolidated financial statements have been prepared by Caprock Oil, Inc. (“we”, “our” or  the “Company”) without audit, in accordance with accounting principles generally accepted in the Unites States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission.  In the opinion of management, these consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position of the Company as of March 31, 2015, the results of its operations for the three month periods ended March 31, 2015 and 2014, and cash flows for the three month periods ended March 31, 2015 and 2014.  Certain prior year amounts have been reclassified to conform with the current year presentation.  These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2014.
	Recently Issued Accounting Pronouncements – In early 2015, the Financial Accounting Standards Board issued several new Accounting Standards Updates which the Company believes will have little or no applicability to the Company.

2_Acquisition_of_Cinco_NRG_LLC

2. Acquisition of Cinco NRG, LLC	3 Months Ended
	Mar. 31, 2015
Acquisition Of Cinco Nrg Llc
2. Acquisition of Cinco NRG, LLC	On March 17, 2014, the Company completed the acquisition of Cinco NRG, LLC (“Cinco”), a private oil and gas company, which was under common control by its majority shareholder.  The Company acquired Cinco through the issuance of a total of 46,942,538 shares of its Common Stock.  As a result of this transaction, the members of Cinco owned approximately 95% of the Company’s total shares of Common Stock outstanding at the date of the acquisition.  In conjunction with this transaction, the Company also issued 1,250,000 shares of its Common Stock to an officer of the Company (see Note 7).  Cinco was formed in April 2013 to acquire working interests in specific oil and gas properties in the States of Texas and Alabama.  At the time of the acquisition, Cinco had a small working interest in a producing oil field in Texas and working interests in several exploratory prospects in Alabama.  Cinco is now a wholly-owned subsidiary of the Company.
	As noted above, the Company and Cinco were both under common control by a majority shareholder prior to this transaction.  Under the accounting rules for entities under common control, the Company has accounted for Cinco’s operations on a retrospective basis in the Company’s consolidated financial statements from the inception of Cinco in April 2013.

3_Going_Concern

3. Going Concern	3 Months Ended
	Mar. 31, 2015
Going Concern
3. Going Concern	The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has reported net losses from continuing operations in the last two years and has a substantial working capital deficit as of March 31, 2015.  These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time.  The consolidated financial statements do not contain any adjustments to reflect the possible future effects on the classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

4_Oil_Gas_Properties

4. Oil & Gas Properties	3 Months Ended
	Mar. 31, 2015
Extractive Industries [Abstract]
4. Oil & Gas Properties	As of March 31, 2015, the Company recorded a non-cash impairment allowance to the carrying value of its oil and gas properties in the amount of $997,924.  This adjustment resulted from applying the “ceiling test” limitation under the full cost accounting rules which limit the capitalized costs of evaluated properties to the aggregate of the “estimated present value,” discounted at a 10-percent interest rate, of future net revenues from proved reserves, based on current economic and operating conditions.
	As of March 31, 2015, the Company has several exploratory projects with capitalized costs of $604,589 that were reflected in unevaluated properties (such amount excludes the cost of an exploratory project of $550,089, which was transferred to evaluated properties in the three months ended March 31, 2015).  Capitalized costs of the remaining projects have not been evaluated, therefore, no related depreciation, depletion and amortization expense was recorded as of March 31, 2015.  An evaluation of these projects is largely expected to occur by December 31, 2015.
	In January 2015, the Company sold its non-operated working interest in a producing field in Texas to the company which is the operator of the field (see Note 8).  The cash sales price was $500,000, subject to adjustments for unpaid revenues and expenditures incurred through the effective date (January 1, 2015).  After taking such adjustments into account, the Company received net cash proceeds from the sale in the amount of approximately $261,000.  No gain or loss was recognized on this sale.

5_Long_Term_Debt

5. Long Term Debt	3 Months Ended
	Mar. 31, 2015
Long-term Debt, Unclassified [Abstract]
5. Long Term Debt	As of March 31, 2015 and December 31, 2014, the Company had the following long-term debt obligations:
		March 31,			December 31,
		2015			2014
	$25,000,000 line of credit with a bank, maturing on January 1, 2015, default interest rate at 5.0% above prime, payable monthly, secured by first lien on CYMRI, LLC’s oil and gas properties (principal balance was due as of January 1, 2015)	$	1,286,000		$	1,286,000
	Bridge loans from individuals, due in October 2015, interest at 15% per annum, payable monthly, with second position security interest on oil and gas properties pledged to the bank (see above) and first position security interest on other oil and gas properties		600,000			700,000
	Working capital advances received from major shareholder in February and March 2015, with same security interest and other provisions as bridge loans (above), to be repaid upon closing of new financing or other liquidity event		160,000			-
	Unsecured notes payable assumed in acquisition of Cinco NRG, LLC, final installment due and paid in February 2015		-			25,000
	Other short term notes for equipment and insurance financing, interest rates at 6% to 8%		26,797			41,040
			2,072,797			2,052,040
	Current portion of long term debt		(2,072,797	)		(2,052,040	)
	Long term debt, net of current portion	$	-		$	-
	Borrowings under the bank credit agreement secured by the oil and gas properties of our subsidiaries, CYMRI, LLC (“CYMRI”) and Triumph Energy, Inc. (“Triumph”), were subject to a borrowing base, dependent on oil and gas reserves.  Pursuant to the latest borrowing base determination, the Company was required to make principal payments of $50,000 per month during 2014.  Such principal payments were made in the first eleven months of the year, however, the Company did not make the required monthly principal payment in December 2014.
	As a result of such non payment, the Company is in default of the credit agreement.  Under its terms, the credit agreement expired on January 1, 2015, and the bank assessed an increase in the interest rate of 4% per annum on the outstanding borrowings of $1,286,000, until such amount is repaid.  The Company is continuing to negotiate with the bank on a resolution of the outstanding borrowings under the expired credit agreement, while it seeks new sources of capital.
	In October 2014, the Company implemented a “bridge loan” program whereby it made short term borrowings from a group of individual lenders in the amount of $700,000.  Amounts advanced under the bridge loan program accrue interest at the rate of 15% per annum, payable on a monthly basis, with the principal being due and payable within one year.  In the event of a prepayment, the bridge lenders receive a prepayment penalty equal to the difference between 15% of the principal and the accrued interest earned to that point, with such penalty being paid either in cash or in restricted shares of the Company’s Common Stock at an agreed upon value of $0.30 per share.  The bridge lenders were granted a subordinated security interest in the Company’s assets.  In conjunction with the sale of a small producing property in January 2015 (see Note 4), the Company made a partial payment to the bridge lenders in the total amount of $100,000 and also paid prepayment penalties consisting of cash in the amount of $9,273 and 5,201 shares of the Company’s restricted Common Stock.

6_Net_Loss_Per_Share

6. Net Loss Per Share	3 Months Ended
	Mar. 31, 2015
Net Loss Per Share
6. Net Loss Per Share	Basic income or loss per common share is computed by dividing the net income or loss by the weighted average number of shares of common stock outstanding during the period.  Diluted income or loss per common share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period and potentially dilutive common share equivalents, consisting of stock options and warrants, under the Treasury Stock Method. The effects of potential common stock equivalents are not included in computations when their effect is anti-dilutive.  In the three months ended March 31, 2015 and 2014, there were no dilutive common stock equivalents reflected in the determination of net loss per share as the effect would have been anti-dilutive.

7_StockBased_Compensation

7. Stock-Based Compensation	3 Months Ended
	Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
7. Stock-Based Compensation	The Company has a stock-based compensation plan which was approved by the stockholders in October 2005 and amended in October 2006.  Under the plan, a maximum of 240,000 shares may be awarded to directors, employees and consultants in the form of grants of stock or stock options with underlying registration rights.  The terms and other conditions applicable to each such grant are generally determined by the Board of Directors.
	Pursuant to the terms of the stock-based compensation plan, the Company made a grant of 240,000 freely tradable shares of its Common Stock in March 2014 to a consultant who performed certain services for the Company.  Based on quoted prices for the Company’s stock, the Company calculated the value of such issued shares at $132,000 and recorded an expense of that amount in the three months ended March 31, 2014.  While a new stock-based compensation plan has not been formally approved, the Company has reserved 4,000,000 shares of Common Stock for future issuance under such a plan.
	In conjunction with the acquisition of Cinco, the Company issued 1,250,000 shares of its restricted Common Stock to an officer of the Company in March 2014 (see Note 2).  The restricted shares will vest over a three year period.  Based on quoted prices for the Company’s stock, the Company calculated the value of such issued shares at $687,500 and will amortize that total amount of expense over a three year period.  In the three month periods ended March 31, 2015 and 2014, the Company recorded amortized expense in the amounts of $57,292 and $19,097, respectively, for this grant.
	In May 2014, the Company engaged a new Chief Executive Officer and granted him non-registered options to acquire 2,000,000 shares of its Common Stock at an exercise price of $0.65 per share, which was equal to the quoted price of its Common Stock on the date of the grant.  Of these options, 200,000 shares vested immediately and the remaining 1,800,000 shares will vest ratably over a three year period.  The estimated fair value of the option was calculated using a Black Scholes option pricing model based on the following assumptions: (a) Computed volatility – 187%; (b) Expected risk free interest rate – 1.6%; (c) Expected dividend yield – zero; (d) Expected option term – 4.4 years, calculated pursuant to the terms of ASC 718-10; and (e) Forfeitures – 0%, subject to adjustment for actual experience.  On the basis of these assumptions, the Company calculated the value of such options at $1,238,000 and will amortize that total amount of expense over a three year period.  During the three months ended March 31, 2015, the Company recorded an amortized expense in the amount $92,850 for this grant.  The intrinsic value of such non-registered options is zero and there are no other options currently outstanding.
	For the grants summarized above, the Company recorded aggregate stock compensation expense in the amounts of $150,142 and $151,097, respectively, in the three month periods ended March 31, 2015 and 2014.  As of March 31, 2015, the Company has total future unrecognized compensation expense in the amount of $1,212,988.

8_Related_Party_Transactions

8. Related Party Transactions	3 Months Ended
	Mar. 31, 2015
Related Party Transactions [Abstract]
8. Related Party Transactions	A member of the Company’s Board of Directors is the president of a private oil and gas company which has a substantial number of oil and gas properties in Texas and Louisiana.  Cinco owned a 10% working interest in a producing field in Texas operated by this company (through January 2015) and also participated for a 5% working interest in the drilling of an unsuccessful well operated by this company in Louisiana in July 2014.  In both instances, this company billed Cinco for its share of the capital and operating costs of the properties under a standard industry joint operating agreement.  Cinco’s resulting accounts payable balance with this company in the amount of $217,724 at December 31, 2014, was repaid in conjunction with the sale transaction in January 2015 (see Note 4).
	In the three months ended March 31, 2015, the Company received short-term working capital advances from a major shareholder in the amount of $160,000 (see Note 5).

9_Contingencies

9. Contingencies	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
9. Contingencies	From time to time the Company may become involved in litigation in the ordinary course of business.  At the present time, other than the Company’s disclosures below, the Company’s management is not aware of any such litigation or other legal proceedings that could have a material adverse effect on its results of operations, cash flows or financial condition.
	Triumph Energy, Inc., a current subsidiary, and a former subsidiary which was sold in 2008, were named as joint defendants in several lawsuits involving professional liability and other matters arising in the normal course of business in the State of Louisiana, most of which were settled at no net cost to Triumph.  At present, there is only one such remaining case which is expected to be settled shortly at no net cost to Triumph.  Accordingly, the Company has recorded no loss provision as of March 31, 2015.
	In October 2008, an insurer for the Company’s inactive Construction Staffing subsidiary filed a lawsuit against the subsidiary alleging default on a premium finance obligation in the amount of approximately $200,000, plus interest and attorney’s fees.  The Company believes that its inactive Construction Staffing subsidiary has a meritorious position in this matter and has not engaged legal counsel to defend this case.  A default judgment was rendered in favor of the plaintiff in January 2011 and the Company has recorded an accrual for the subsidiary’s estimated loss exposure of approximately $100,000 as of March 31, 2015.
	The Company, as a 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. The Company maintains insurance coverage, which it believes 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 March 31, 2015, which have not been provided for, covered by insurance or otherwise have a material impact on its financial position or results of operations. There can be no assurance, however, that current regulatory requirements will not change, or past noncompliance with environmental laws will not be discovered on the Company’s properties.

10_Subsequent_Events

10. Subsequent Events	3 Months Ended
	Mar. 31, 2015
Subsequent Events [Abstract]
10. Subsequent Events	In the first quarter of 2015, the Company received a notice from a suspended royalty owner claiming entitlement to prior years’ production revenues, which were previously accrued as a liability by the Company.  In April 2015, the Company reached an agreement in principle with the suspended royalty owner providing for the payment of approximately $90,000 of this liability on a near term basis and the payment of the remainder, plus accrued interest from the agreement date, over a multi-year period.

1_Basis_of_Presentation_Polici

1. Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2015
Basis Of Presentation Policies
Interim Financial Information	Interim Financial Information – The accompanying consolidated financial statements have been prepared by Caprock Oil, Inc. (“we”, “our” or  the “Company”) without audit, in accordance with accounting principles generally accepted in the Unites States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission.  In the opinion of management, these consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position of the Company as of March 31, 2015, the results of its operations for the three month periods ended March 31, 2015 and 2014, and cash flows for the three month periods ended March 31, 2015 and 2014.  Certain prior year amounts have been reclassified to conform with the current year presentation.  These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2014.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements – In early 2015, the Financial Accounting Standards Board issued several new Accounting Standards Updates which the Company believes will have little or no applicability to the Company.

5_Long_Term_Debt_Tables

5. Long Term Debt (Tables)	3 Months Ended
	Mar. 31, 2015
Long-term Debt, Unclassified [Abstract]
Long Term Debt	As of March 31, 2015 and December 31, 2014, the Company had the following long-term debt obligations:
		March 31,			December 31,
		2015			2014
	$25,000,000 line of credit with a bank, maturing on January 1, 2015, default interest rate at 5.0% above prime, payable monthly, secured by first lien on CYMRI, LLC’s oil and gas properties (principal balance was due as of January 1, 2015)	$	1,286,000		$	1,286,000
	Bridge loans from individuals, due in October 2015, interest at 15% per annum, payable monthly, with second position security interest on oil and gas properties pledged to the bank (see above) and first position security interest on other oil and gas properties		600,000			700,000
	Working capital advances received from major shareholder in February and March 2015, with same security interest and other provisions as bridge loans (above), to be repaid upon closing of new financing or other liquidity event		160,000			-
	Unsecured notes payable assumed in acquisition of Cinco NRG, LLC, final installment due and paid in February 2015		-			25,000
	Other short term notes for equipment and insurance financing, interest rates at 6% to 8%		26,797			41,040
			2,072,797			2,052,040
	Current portion of long term debt		(2,072,797	)		(2,052,040	)
	Long term debt, net of current portion	$	-		$	-

5_Long_Term_Debt_Details

5. Long Term Debt (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Long-term Debt, Unclassified [Abstract]
$25,000,000 line of credit with a bank, maturing on January 1, 2015, default interest rate at 5.0% above prime, payable monthly, secured by first lien on CYMRI, LLCbs oil and gas properties (principal balance was due as of January 1, 2015)	$1,286,000	$1,286,000
Bridge loans from individuals, due in October 2015, interest at 15% per annum, payable monthly, with second position security interest on oil and gas properties pledged to the bank (see above) and first position security interest on other oil and gas properties	600,000	700,000
Working capital advances received from major shareholder in February and March 2015, with same security interest and other provisions as bridge loans (above), to be repaid upon closing of new financing or other liquidity event	160,000	0
Unsecured notes payable assumed in acquisition of Cinco NRG, LLC, final installment due and paid in February 2015	0	25,000
Other short term notes for equipment and insurance financing, interest rates at 6% to 8%	26,797	41,040
Total Long Term Debt Obligations	2,072,797	2,052,040
Current portion of long term debt	-2,072,797	-2,052,040
Long term debt, net of current portions	$0	$0

7_StockBased_Compensation_Deta

7. Stock-Based Compensation (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Stock-based Compensation Details Narrative
Future unrecognized compensation expense	$1,212,988
Stock based compensation	$150,142	$151,097