Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jan. 31, 2014 | Mar. 11, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'BLACKSANDS PETROLEUM, INC. | ' |
Entity Central Index Key | '0001308137 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Jan-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--10-31 | ' |
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 | ' | 17,722,484 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
Current Assets: | ' | ' |
Cash and cash equivalents | $702,712 | $1,335,237 |
Accounts receivable | 315,971 | 417,597 |
Prepaid expenses | 27,539 | ' |
Total Current Assets | 1,046,222 | 1,752,834 |
Oil and gas property costs (successful efforts method of accounting) | ' | ' |
Proved | 2,032,019 | 2,077,872 |
Other assets | 50,054 | 50,312 |
TOTAL ASSETS | 3,128,295 | 3,881,018 |
Current Liabilities: | ' | ' |
Note payable | 3,280,000 | 280,000 |
Accounts payable | 2,396,725 | 523,365 |
Accrued expenses | 3,245,671 | 3,121,900 |
Total Current Liabilities | 8,922,396 | 3,925,265 |
Notes Payable, net of discount of $1,004,404 and $1,329,581 | 1,595,596 | 4,270,419 |
Asset Retirement obligation | 64,141 | 649,233 |
Total Liabilities | 10,582,133 | 8,844,917 |
Stockholders' Equity: | ' | ' |
Preferred stock - $0.01 par value; 10,000,000 shares authorized: | ' | ' |
Series A - $.001 par value, 310,000 shares authorized, nil shares issued and outstanding | ' | ' |
Common stock - $0.001 par value; 100,000,000 shares authorized; 17,722,485 and 17,719,360 shares issued and outstanding at January 31, 2014 and October 31, 2013,respectively | 17,723 | 17,720 |
Additional paid-in capital | 23,741,212 | 23,726,191 |
Accumulated deficit | -31,212,773 | -28,707,810 |
Total Stockholders' Equity | -7,453,838 | -4,963,899 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,128,295 | $3,881,018 |
Consolidated_Balance_Sheets_Un1
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
Consolidated Balance Sheets Parenthetical | ' | ' |
Notes Payable, net of discount | $1,004,404 | $1,329,581 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, authorized shares | 10,000,000 | 10,000,000 |
Series A Preferred stock, par value | $0.00 | $0.00 |
Series A Preferred stock, authorized shares | 310,000 | 310,000 |
Series A Preferred stock, issued shares | 0 | 0 |
Series A Preferred stock, outstanding shares | 0 | 0 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 17,722,485 | 17,719,360 |
Common stock shares outstanding | 17,722,485 | 17,719,360 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Revenue: | ' | ' |
Oil and gas revenue | $328,297 | $361,986 |
Expenses: | ' | ' |
Selling, general and administrative | 341,635 | 347,267 |
Depreciation and depletion | 197,801 | 158,549 |
Accretion | 8,444 | 14,674 |
Lease operating expenses | 178,780 | 165,826 |
Impairment of oil and gas property interest | 2,219,813 | ' |
Total expenses | 2,946,473 | 686,316 |
Loss from Operations | -2,618,176 | -324,330 |
Other income and expense: | ' | ' |
Interest expense | -508,457 | -282,081 |
Gain on sale of oil and gas properties | 621,670 | ' |
Other income | ' | 27,763 |
Total Other Income (Expense) | 113,213 | -254,318 |
Loss before provision for income taxes | -2,504,963 | -578,648 |
Provision for income taxes | ' | ' |
Net Loss | -2,504,963 | -578,648 |
Preferred stock Dividends | ' | 50,000 |
Net loss attributable to common shareholders | -2,504,963 | -628,648 |
Loss Per Share attributable to common shareholders Basic and diluted | ($0.14) | ($0.04) |
Weighted Average Shares Outstanding Basic and diluted | $17,719,530 | $16,386,613 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($2,504,963) | ($578,648) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Impairment of oil and gas property costs | 2,219,813 | ' |
Equity compensation expense | 15,024 | 90,980 |
Amortization of debt discount | 325,177 | 105,284 |
Depreciation, depletion and accretion | 206,245 | 173,223 |
Gain on sale of oil and gas properties | -621,670 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 151,626 | 19,360 |
Prepaid expense and other current assets | -27,539 | 6,538 |
Accounts payable | 316,234 | 217,956 |
Net cash flows provided by (used in) operating activities | 79,947 | 34,693 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Oil and gas property costs | -712,472 | -22,726 |
Net cash flows used in investing activities | -712,472 | -22,726 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from notes payable | ' | ' |
Net cash flows from financing activities | ' | ' |
NET INCREASE IN CASH AND CASH EQUIVALENTS | -632,525 | 11,967 |
CASH AND CASH EQUIVALENTS - Beginning of period | 1,335,237 | 1,160,320 |
CASH AND CASH EQUIVALENTS - End of period | 702,712 | 1,172,287 |
Cash paid for interest | 85,004 | ' |
Cash paid for income taxes | ' | ' |
Oil and gas property costs in accounts payable | $1,680,897 | ' |
The_Company_and_Summary_of_Sig
The Company and Summary of Significant Accounting Policies | 3 Months Ended |
Jan. 31, 2013 | |
Notes to Financial Statements | ' |
Note 1. The Company and Summary of Significant Accounting Policies | ' |
Blacksands Petroleum, Inc. (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on October 12, 2004. Since August 2007, the Company has been engaged in the exploration, development, exploitation and production of oil and natural gas. The Company sells its oil and gas products primarily to domestic pipelines and refineries. Its operations are presently focused in the States of Texas and New Mexico. | |
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in annual report on Form 10-K for the year ended October 31, 2013 filed with the SEC on February 14, 2013. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the 2013 annual report on Form 10-K have been omitted. | |
Oil and Gas Properties | |
The Company follows the successful efforts method of accounting for its oil and natural gas properties. Oil and gas properties are periodically assessed to determine whether they have been impaired. Any impairment in value of unproved properties is charged to exploration expense. The costs of unproved properties, which are determined to be productive, are transferred to prove oil and gas properties and amortized on an equivalent unit-of-production basis. Exploratory expenses, including geological and geophysical expenses and delay rentals for unevaluated oil and gas properties, are charged to expense as incurred. Exploratory drilling costs are initially capitalized as unproved property but charged to expense if and when the well is determined not to have found proved oil and gas reserves. In accordance with ASC No. 935, exploratory drilling costs are evaluated within a one-year period after the completion of drilling. For proved properties, we compare expected undiscounted future cash flows at a producing field level to the unamortized capitalized cost of the asset. If the future undiscounted cash flows, based on our estimate of future natural gas and crude oil prices, operating costs, anticipated production from proved reserves and other relevant date, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is calculated by discounting the future cash flows at an appropriate risk-adjusted discount rate. | |
During the three months ended January 31, 2014, the Company impaired its oil and gas properties by $2,219,813, which is reflected in the consolidated statement of operations. | |
Going Concern | |
As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $31,212,773 through January 31, 2014. In addition, the Company had a working capital deficit of $7,876,174 and cash and cash equivalents of $702,712 at January 31, 2014. The Company drilled three new wells in November 2013. In order to complete the wells, the Company must raise additional capital and/or sell down its interest in these wells. However, the Company cannot assure that it will accomplish this task. | |
The current rate of cash usage raises substantial doubt about the Company’s ability to continue as a going concern, absent the raising of additional capital and/or additional significant revenues from new oil production. In an effort to mitigate this near-term concern the Company is seeking to obtain sufficient funds to complete the three new wells drilled in November 2013 and to fund working capital. The Company’s financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue in existence. |
Asset_Retirement_Obligation
Asset Retirement Obligation | 3 Months Ended | ||||
Jan. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
Note 2. Asset Retirement Obligation | ' | ||||
The following table summarizes the change in the asset retirement obligation (“ARO”) for the periods ended January 31, 2014: | |||||
Beginning balance at November 1 | $ | 649,233 | |||
Liabilities settled | -- | ||||
Liabilities incurred through acquisition of assets | -- | ||||
Liabilities settled through sale of assets | (593,536 | ) | |||
Accretion expense | 8,444 | ||||
Ending balance at January 31 | $ | 64,141 | |||
The ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company’s oil and gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. |
Contingencies
Contingencies | 3 Months Ended |
Jan. 31, 2013 | |
Notes to Financial Statements | ' |
Note 3. Contingencies | ' |
The Company, as an owner or lessee and operator of oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area. The Company maintains insurance coverage, 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 January 31, 2014, 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. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||
Jan. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 4. Stockholders' Equity | ' | ||||||||
Stock Options | |||||||||
A summary of the Company’s stock option activity and related information is as follows: | |||||||||
Number of | Weighted | ||||||||
Shares | Average | ||||||||
Exercise Price | |||||||||
Outstanding at November 1, 2013 | 1,046,333 | $ | 3.12 | ||||||
Granted | - | - | |||||||
Exercised | - | - | |||||||
Cancelled | - | - | |||||||
Outstanding at January 31, 2014 | 1,046,333 | $ | 3.12 | ||||||
Exercisable at January 31, 2014 | 1,002,333 | $ | 3.07 | ||||||
During the three months ended January 31, 2014 and 2013, the Company recorded stock-based compensation of $15,024 and $90,980, respectively, as general and administrative expenses. At January 31, 2014, the weighted average remaining life of the stock options is 6.10 years. The unamortized amount of stock-based compensation at January 31, 2014 was $52,034. This cost is expected to be recognized over a weighted average period of 0.67 years. |
Sale_Of_Cabeza_Creek_Field
Sale Of Cabeza Creek Field | 3 Months Ended | ||||||||
Jan. 31, 2013 | |||||||||
Sale Of Cabeza Creek Field | ' | ||||||||
Note 5. Sale of Cabeza Creek Field | ' | ||||||||
In January 2014, the Company sold its interest in all of the wells the Cabeza Creek Field for all depths from the surface to 8,500 feet below the surface in exchange for $50,000 and the assumption of all future liabilities associated with the plugging and abandoning of all wells in the Cabeza Creek Field ($593,536). | |||||||||
The following is a summary of the proforma information for the three months ended January 31, 2014 and 2013 assuming the sale of the Cabeza Creek field had occurred as of the beginning of each fiscal year presented: | |||||||||
2014 | 2013 | ||||||||
Oil and gas revenues | $ | 328,297 | $ | 308,045 | |||||
Expenses | |||||||||
Selling, general and administrative | 341,635 | 347,267 | |||||||
Depreciation and depletion | 197,801 | 123,979 | |||||||
Accretion | 8,444 | 4,515 | |||||||
Lease operating expense | 140,759 | 138,620 | |||||||
Impairment of oil and gas property interest | 2,219,813 | -- | |||||||
Total expenses | 2,908,452 | 614,381 | |||||||
Loss from operations | (2,580,155 | ) | (306,336 | ) | |||||
Other income (expense) | (508,457 | ) | (254,318 | ) | |||||
Net income | $ | (3,088,612 | ) | $ | (560,654 | ) |
The_Company_and_Summary_of_Sig1
The Company and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jan. 31, 2013 | |
Company And Summary Of Significant Accounting Policies Policies | ' |
Oil and Gas Properties | ' |
The Company follows the successful efforts method of accounting for its oil and natural gas properties. Oil and gas properties are periodically assessed to determine whether they have been impaired. Any impairment in value of unproved properties is charged to exploration expense. The costs of unproved properties, which are determined to be productive, are transferred to prove oil and gas properties and amortized on an equivalent unit-of-production basis. Exploratory expenses, including geological and geophysical expenses and delay rentals for unevaluated oil and gas properties, are charged to expense as incurred. Exploratory drilling costs are initially capitalized as unproved property but charged to expense if and when the well is determined not to have found proved oil and gas reserves. In accordance with ASC No. 935, exploratory drilling costs are evaluated within a one-year period after the completion of drilling. For proved properties, we compare expected undiscounted future cash flows at a producing field level to the unamortized capitalized cost of the asset. If the future undiscounted cash flows, based on our estimate of future natural gas and crude oil prices, operating costs, anticipated production from proved reserves and other relevant date, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is calculated by discounting the future cash flows at an appropriate risk-adjusted discount rate. | |
During the three months ended January 31, 2014, the Company impaired its oil and gas properties by $2,219,813, which is reflected in the consolidated statement of operations. | |
Going Concern | ' |
As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $31,212,773 through January 31, 2014. In addition, the Company had a working capital deficit of $7,876,174 and cash and cash equivalents of $702,712 at January 31, 2014. The Company drilled three new wells in November 2013. In order to complete the wells, the Company must raise additional capital and/or sell down its interest in these wells. However, the Company cannot assure that it will accomplish this task. | |
The current rate of cash usage raises substantial doubt about the Company’s ability to continue as a going concern, absent the raising of additional capital and/or additional significant revenues from new oil production. In an effort to mitigate this near-term concern the Company is seeking to obtain sufficient funds to complete the three new wells drilled in November 2013 and to fund working capital. The Company’s financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue in existence. |
Asset_Retirement_Obligation_Ta
Asset Retirement Obligation (Tables) | 3 Months Ended | ||||
Jan. 31, 2013 | |||||
Asset Retirement Obligation Tables | ' | ||||
Change in the asset retirement obligation | ' | ||||
The following table summarizes the change in the asset retirement obligation (“ARO”) for the periods ended January 31, 2014: | |||||
Beginning balance at November 1 | $ | 649,233 | |||
Liabilities settled | -- | ||||
Liabilities incurred through acquisition of assets | -- | ||||
Liabilities settled through sale of assets | (593,536 | ) | |||
Accretion expense | 8,444 | ||||
Ending balance at January 31 | $ | 64,141 |
Stockholders_Equity_Tables
Stockholders Equity (Tables) | 3 Months Ended | ||||||||
Jan. 31, 2013 | |||||||||
Stockholders Equity Tables | ' | ||||||||
Stock Options Activity | ' | ||||||||
A summary of the Company’s stock option activity and related information is as follows: | |||||||||
Number of | Weighted | ||||||||
Shares | Average | ||||||||
Exercise Price | |||||||||
Outstanding at November 1, 2013 | 1,046,333 | $ | 3.12 | ||||||
Granted | - | - | |||||||
Exercised | - | - | |||||||
Cancelled | - | - | |||||||
Outstanding at January 31, 2014 | 1,046,333 | $ | 3.12 | ||||||
Exercisable at January 31, 2014 | 1,002,333 | $ | 3.07 |
Sale_of_Cabeza_Creek_Field_Tab
Sale of Cabeza Creek Field (Tables) | 3 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Sale of Cabeza Creek Field | ' | ||||||||
The following is a summary of the proforma information for the three months ended January 31, 2014 and 2013 assuming the sale of the Cabeza Creek field had occurred as of the beginning of each fiscal year presented: | |||||||||
2014 | 2013 | ||||||||
Oil and gas revenues | $ | 328,297 | $ | 308,045 | |||||
Expenses | |||||||||
Selling, general and administrative | 341,635 | 347,267 | |||||||
Depreciation and depletion | 197,801 | 123,979 | |||||||
Accretion | 8,444 | 4,515 | |||||||
Lease operating expense | 140,759 | 138,620 | |||||||
Impairment of oil and gas property interest | 2,219,813 | -- | |||||||
Total expenses | 2,908,452 | 614,381 | |||||||
Loss from operations | (2,580,155 | ) | (306,336 | ) | |||||
Other income (expense) | (508,457 | ) | (254,318 | ) | |||||
Net income | $ | (3,088,612 | ) | $ | (560,654 | ) |
The_Company_and_Summary_of_Sig2
The Company and Summary of Significant Accounting Policies (Details Narrative) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
Company And Summary Of Significant Accounting Policies Details Narrative | ' | ' |
Accumulated deficit | $31,212,773 | $28,707,810 |
Working capital deficit | 7,876,174 | ' |
Cash and cash equivalents | $702,712 | $1,335,237 |
Asset_Retirement_Obligation_De
Asset Retirement Obligation (Details) (USD $) | 3 Months Ended |
Jan. 31, 2014 | |
Asset Retirement Obligation Details | ' |
Beginning balance | $649,233 |
Liabilities settled | ' |
Liabilities incurred through acquisition of assets | ' |
Liabilities transferred through sale of assets | -593,536 |
Accretion expense | 8,444 |
Ending balance | $64,141 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended |
Jan. 31, 2014 | |
Number of Shares | ' |
Beginning Balance | 1,046,333 |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Ending Balance | 1,046,333 |
Exercisable at October 31, 2013 | 1,002,333 |
Weighted Average Exercise Price | ' |
Beginning Balance | $3.12 |
Granted | ' |
Exercised | ' |
Cancelled | ' |
Ending Balance | $3.12 |
Exercisable at October 31, 2013 | $3.07 |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Stockholders Equity Details Narrative | ' | ' |
Stock-based compensation expenses | $15,024 | $90,980 |
Weighted average remaining life of the stock options | '6 years 1 month 6 days | ' |
Total unrecognized compensation cost related to the stock options granted | $52,034 | ' |
Weighted average expected cost | '8 months 1 day | ' |
Sale_of_Cabeza_Creek_Field_Det
Sale of Cabeza Creek Field (Details) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Sale Of Cabeza Creek Field Details | ' | ' |
Oil and gas revenues | $328,297 | $361,986 |
Selling, general and administrative | 341,635 | 347,267 |
Depreciation and depletion | 197,801 | 123,979 |
Accretion | 8,444 | 4,515 |
Lease operating expense | 140,759 | 138,620 |
Impairment of oil and gas property interest | 2,219,813 | ' |
Total expenses | 2,908,452 | 614,381 |
Loss from operations | -2,580,155 | -306,336 |
Other income (expense) | -508,457 | -254,318 |
Net income | ($3,088,612) | ($560,654) |