Blacksands Petroleum (BSPE) 10-Q 13 Mar 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Jan. 31, 2015	Mar. 11, 2015
Document And Entity Information
Entity Registrant Name	BLACKSANDS PETROLEUM, INC.
Entity Central Index Key	1308137
Document Type	10-Q
Document Period End Date	31-Jan-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-21
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		18,872,832
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Jan. 31, 2015	Oct. 31, 2014
Current Assets:
Cash and cash equivalents	$521,585	$678,940
Accounts receivable	47,934	210,577
Prepaid expenses	452,484	522,073
Total Current Assets	1,022,003	1,411,590
Oil and gas property costs (successful efforts method of accounting)
Proved	452,705	735,756
Other assets	50,000	50,000
TOTAL ASSETS	1,524,708	2,197,346
Current Liabilities:
Note payable	60,000	60,000
Notes payable related party	3,220,000
Accounts payable	172,533	129,400
Accrued expenses	2,293,411	2,372,075
Total Current Liabilities	5,745,944	2,561,475
Notes Payable, net of discount of $1,281,429 and $1,312,873	2,818,571	2,787,127
Notes payable to related party		3,220,000
Asset Retirement obligation	92,842	91,707
Total Liabilities	8,657,357	8,660,309
Stockholder's Deficiency:
Preferred stock - $0.001 par value; 10,000,000 shares authorized:
Series A - $.001 par value, 310,000 shares authorized, nil shares issued and outstanding
Series B - $.001 par value; 2,217,281 shares authorized, 500,000 shares issued and outstanding	500	500
Series C - $.001 par value; 1,750,000 shares authorized, 1,000,000 shares issued and outstanding	1,000	1,000
Common stock - $0.001 par value; 100,000,000 shares authorized; 19,372,774 and 19,278,017 shares issued and outstanding at January 31, 2015 and October 31, 2014, respectively	19,373	19,278
Additional paid-in capital	28,570,437	28,440,320
Accumulated deficit	-35,723,959	-34,924,061
Total Stockholder's Deficiency	-7,132,649	-6,462,963
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY	$1,524,708	$2,197,346

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Jan. 31, 2015	Oct. 31, 2014
Stockholders' Equity:
Preferred stock, par value	$0.00	$0.00
Preferred stock, authorized shares	10,000,000	10,000,000
Preferred stock Series A, par value	$0.00	$0.00
Preferred stock Series A, authorized shares	310,000	310,000
Preferred stock Series A, issued shares	0	0
Preferred stock Series A, outstanding shares	0	0
Preferred stock Series B, par value	$0.00	$0.00
Preferred stock Series B, authorized shares	2,217,281	2,217,281
Preferred stock Series B, issued shares	500,000	500,000
Preferred stock Series B, outstanding shares	500,000	500,000
Preferred stock Series C, par value	$0.00	$0.00
Preferred stock Series C, authorized shares	1,750,000	1,750,000
Preferred stock Series C, issued shares	1,000,000	1,000,000
Preferred stock Series C, outstanding shares	1,000,000	1,000,000
Common stock par value	$0.00	$0.00
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	19,372,774	19,278,017
Common stock shares outstanding	19,372,774	19,278,017

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Jan. 31, 2015	Jan. 31, 2014
Revenue:
Oil and gas revenue	$133,555	$328,297
Expenses:
Selling, general and administrative	205,325	341,635
Depreciation and depletion	48,780	197,801
Accretion	1,135	8,444
Lease operating expenses	175,476	178,780
Gain on sale of oil and gas properties		-621,670
Impairment of oil and gas property interest	269,906	2,219,813
Total expenses	700,622	2,324,803
Loss from Operations	-567,067	-1,996,506
Other income and expense:
Interest expense	-232,831	-508,457
Total Other Income (Expense)	-232,831	-508,457
Loss before provision for income taxes	-799,898	-2,504,963
Provision for income taxes
Net Loss	-799,898	-2,504,963
Preferred stock Dividends	11,250
Net loss attributable to common shareholders	-811,148	-2,504,963
Loss Per Share attributable to common shareholders Basic and diluted	($0.04)	($0.14)
Weighted Average Shares Outstanding Basic and diluted	$19,324,366	$17,719,530

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Jan. 31, 2015	Jan. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	($799,898)	($2,504,963)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment of oil and gas property costs	269,906	2,219,813
Equity compensation expense		15,024
Amortization of debt discount	31,444	325,177
Depreciation, depletion and accretion	49,915	206,245
Gain on sale of oil and gas properties		-621,670
Changes in operating assets and liabilities:
Accounts receivable	162,643	151,626
Prepaid expense and other current assets	69,589	-27,539
Accounts payable	94,148	316,234
Net cash flows from operating activities	-122,253	79,947
CASH FLOWS FROM INVESTING ACTIVITIES
Oil and gas property costs	-35,102	-712,472
Net cash flows from investing activities	-35,102	-712,472
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	-157,355	-632,525
CASH AND CASH EQUIVALENTS - Beginning of period	678,940	1,335,237
CASH AND CASH EQUIVALENTS - End of period	521,585	702,712
Supplemental Disclosures
Cash paid for interest	84,995	85,004
Cash paid for income taxes
Supplemental non-cash activities
Payment of accrued interest to related party through issuance of common stock	130,212
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, 2015
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 Colorado, 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, 2014 filed with the SEC on February 11, 2015. 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 2014 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, 2015 and 2014, the Company impaired its oil and gas properties by $269,906 and $2,219,813, respectively, which is reflected in the consolidated statements of operations.
	Going Concern
	As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $35,723,959 through January 31, 2015. In addition, the Company had a working capital deficit of $4,723,941 and cash and cash equivalents of $521,585 at January 31, 2015.
	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. 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.
	Reclassifications
	Certain amounts included in the information for the quarter ended January 31, 2014 have been reclassified to conform to the presentation in the quarterly information included in the Form 10-Q for the quarter ended January 31, 2015.

Asset_Retirement_Obligation

Asset Retirement Obligation	3 Months Ended
	Jan. 31, 2015
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, 2015:
	Beginning balance at November 1	$	91,707
	Liabilities settled		--
	Liabilities incurred through acquisition of assets		--
	Liabilities settled through sale of assets		--
	Accretion expense		1,135
	Ending balance at January 31	$	92,842
	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.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Jan. 31, 2015
Notes to Financial Statements
Note 3. Commitments and 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, 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.
	On January 26, 2015, David DeMarco, a former Chief Executive Officer and director of the Company, filed a complaint against the Company in the District Court of Harris County, Texas, alleging that pursuant to a contract for work performed and/or services rendered, Mr. DeMarco is due $151,000 in deferred compensation that accrued during his tenure as Chief Executive Officer of the Company. Mr. DeMarco is seeking between $200,000 and $1 million in damages. Service of process was effected on February 17, 2015. The Company has reported $151,000 in accrued expenses.

Stockholders_Equity

Stockholders' Equity	3 Months Ended
	Jan. 31, 2015
Notes to Financial Statements
Note 4. Stockholders' Equity	Issuance of Common Stock
	In December 2014, 20,183 and 74,574 shares were issued to a related party for interest totaling $32,818 and $97,394 accruing for the month of July 2014 and for the quarter ended October 31, 2014, respectively. The Company has reported a gain on the issuance of these shares totaling $87,748, which because the shares were issued to a related party, is reflected as an increase in additional paid in capital.
	Stock Options
	A summary of the Company’s stock option activity and related information is as follows:
		Number of		Weighted Average Exercise Price
		Shares
	Outstanding at November 1, 2014		66,667	$	3
	Granted		-		-
	Exercised		-		-
	Cancelled		-		-
	Outstanding at January 31, 2015		66,667	$	3
	Exercisable at January 31, 2015		66,667	$	3
	During the three months ended January 31, 2015 and 2014, the Company recorded stock-based compensation of nil and $15,024, respectively, as general and administrative expenses. At January 31, 2015, the weighted average remaining life of the stock options is 5.37 years. There were no unamortized amounts of stock-based compensation at January 31, 2015.

The_Company_and_Summary_of_Sig1

The Company and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Jan. 31, 2015
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, 2015 and 2014, the Company impaired its oil and gas properties by $269,906 and $2,219,813, respectively, which is reflected in the consolidated statements of operations.
Going Concern	As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $35,723,959 through January 31, 2015. In addition, the Company had a working capital deficit of $4,723,941 and cash and cash equivalents of $521,585 at January 31, 2015.
	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. 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.
Reclassifications	Certain amounts included in the information for the quarter ended January 31, 2014 have been reclassified to conform to the presentation in the quarterly information included in the Form 10-Q for the quarter ended January 31, 2015.

Asset_Retirement_Obligation_Ta

Asset Retirement Obligation (Tables)	3 Months Ended
	Jan. 31, 2015
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, 2015:
	Beginning balance at November 1	$	91,707
	Liabilities settled		--
	Liabilities incurred through acquisition of assets		--
	Liabilities settled through sale of assets		--
	Accretion expense		1,135
	Ending balance at January 31	$	92,842

Stockholders_Equity_Tables

Stockholders Equity (Tables)	3 Months Ended
	Jan. 31, 2015
Stockholders Equity Tables
Stock Options Activity	A summary of the Company’s stock option activity and related information is as follows:
		Number of		Weighted Average Exercise Price
		Shares
	Outstanding at November 1, 2014		66,667	$	3
	Granted		-		-
	Exercised		-		-
	Cancelled		-		-
	Outstanding at January 31, 2015		66,667	$	3
	Exercisable at January 31, 2015		66,667	$	3

The_Company_and_Summary_of_Sig2

The Company and Summary of Significant Accounting Policies (Details Narrative) (USD $)	3 Months Ended
	Jan. 31, 2015	Jan. 31, 2014	Oct. 31, 2014
Company And Summary Of Significant Accounting Policies Details Narrative
State of incorporation	State of Nevada
Date of incorporation	12-Oct-04
Impairment of oil and gas property interest	$269,906	$2,219,813
Accumulated deficit	35,723,959		34,924,061
Working capital deficit	4,723,941
Cash and cash equivalents	$521,585		$678,940

Asset_Retirement_Obligation_De

Asset Retirement Obligation (Details) (USD $)	3 Months Ended
	Jan. 31, 2015
Asset Retirement Obligation Details
Beginning balance	$91,707
Liabilities settled
Liabilities incurred through acquisition of assets
Liabilities transferred through sale of assets
Accretion expense	1,135
Ending balance	$92,842

Stockholders_Equity_Details

Stockholders Equity (Details) (USD $)	3 Months Ended
	Jan. 31, 2015
Number of Shares
Beginning Balance	66,667
Granted
Exercised
Cancelled
Ending Balance	66,667
Exercisable at January 31, 2015	66,667
Weighted Average Exercise Price
Beginning Balance	$3
Granted
Exercised
Cancelled
Ending Balance	$3
Exercisable at January 31, 2015	$3

Stockholders_Equity_Details_Na

Stockholders Equity (Details Narrative) (USD $)	3 Months Ended
	Jan. 31, 2015	Jan. 31, 2014
Stockholders Equity Details Narrative
Stock-based compensation expenses	$0	$15,024
Weighted average remaining life of the stock options	5 years 4 months 13 days