United American Petroleum (UAPC) 10-Q 20 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014
Document And Entity Information	'
Entity Registrant Name	'United American Petroleum Corp.
Entity Central Index Key	'0001321516
Document Type	'10-Q
Document Period End Date	31-Mar-14
Amendment Flag	'false
Current Fiscal Year End Date	'--12-31
Is Entity a Well-known Seasoned Issuer?	'No
Is Entity a Voluntary Filer?	'No
Is Entity's Reporting Status Current?	'No
Entity Filer Category	'Smaller Reporting Company
Entity Common Stock, Shares Outstanding	97,418,383
Document Fiscal Period Focus	'Q1
Document Fiscal Year Focus	'2014

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Cash	$440,252	$557,298
Accounts receivable, net of allowance for uncollectible accounts	23,617	119,052
Related party receivables	79,564	99,536
Total current assets	543,433	775,886
Evaluated, net of accumulated depletion of $256,502 and $236,614 as of March 31, 2014 and December 31, 2013, respectively	667,854	1,139,435
TOTAL ASSETS	1,211,287	1,915,321
Accounts payable and accrued liabilities	750,754	1,150,116
Convertible note payable, net of debt discount of $64,811 and $26,758	178,504	131,027
Embedded derivative liability	187,085	139,508
Deferred gain on sale of assets	7,500	17,500
Other payable	576,477	582,278
Total current liabilities	1,700,320	2,020,429
Asset retirement obligation	112,786	112,727
TOTAL LIABILITIES	1,813,106	2,133,156
Preferred Stock, Series B, $0.001 par value, 1,000 shares authorized, 1,000 shares issued and 1,000 share outstanding and no shares issued and outstanding, respectively	1	1
Common stock, $0.001 par value, 100,000,000 shares authorized, 97,418,381 shares issued and 97,418,381 and 86,875,192 shares outstanding, respectively	97,418	86,876
Additional paid-in capital	8,330,823	8,301,499
Accumulated deficit	-9,030,061	-8,606,211
Total stockholders' deficit	-601,819	-217,835
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$1,211,287	$1,915,321

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Accumulated depletion of evaluted oil and gas properties	$256,502	$236,614
Debt discount	$64,811	$26,758
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	1,000	1,000
Preferred stock, shares outstanding	1,000	1,000
Common stock par value	$0.00	$0.00
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	97,418,381	86,875,192
Common stock, shares outstanding	97,418,381	86,875,192

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
REVENUE	'	'
Oil and Gas sales	$134,260	$130,346
Operator Income	2,925	6,050
TOTAL REVENUE	137,185	136,396
OPERATING EXPENSES	'	'
Lease operating expenses	139,258	75,461
Bad debt expense	12,660	'
Accretion expense	3,186	1,000
Depletion expense	19,887	18,364
General and administrative	254,234	164,505
TOTAL OPERATING EXPENSES	429,225	259,330
NET LOSS BEFORE OTHER EXPENSE	-292,040	-122,934
OTHER INCOME (EXPENSE)	'	'
Interest (expense) income	-114,736	-17,252
Gain on embedded derivatives	85,736	24,520
Penalty on convertible note	-102,810	'
Total other income (expense)	-131,810	7,268
NET LOSS	($423,850)	($115,666)
LOSS PER SHARE - BASIC	$0	$0
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC	96,539,205	50,339,543
LOSS PER SHARE - DILUTED	$0	$0
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED	96,539,205	50,339,543

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement of Cash Flows [Abstract]	'	'
Net income (loss)	($423,850)	($115,666)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	'	'
Bad debt expense	12,660	'
Accretion expense	3,186	1,000
Depletion expense	19,887	18,364
Amortization of debt discount	114,755	8,890
(Gain) loss on embedded derivatives	-85,736	-24,520
Reduction in full cost pool due to operator income from owned wells	38,567	'
Change in assets and liabilities	'	'
Accounts receivable	82,775	-22,445
Related party receivable	19,972	-12,125
Accounts payable and accrued expenses	-293,461	29,793
Other payable	-5,801	151,055
Net cash provided by (used in) operating activities	-517,046	34,346
CASH FLOWS USED IN INVESTING ACTIVITIES:	'	'
Proceeds from sale of oil and gas properties	400,000	'
Net cash provided by investing activities	400,000	'
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'
Proceeds from convertible notes	'	153,500
Net cash provided by financing activities	'	153,500
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	-117,046	187,846
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	557,298	572,784
CASH AND CASH EQUIVALENTS - END OF PERIOD	440,252	760,630
Cash paid during the period for:	'	'
Interest	'	'
Taxes	'	'
NON CASH TRANSACTIONS:	'	'
Change in asset retirement liability (sales/disposals)	3,127	'
Discount from derivative liabilities	152,810	55,000
Reclassification of derivative liabilities from additional paid-in capital	'	197,821
Discount to additional paid-in capital from relative fair value of warrants	19,497	'
Conversion of convertible notes payable	16,570	'
Conversion of accrued interest	$3,800	'

Nature_of_Operations_and_Basis

Nature of Operations and Basis of Presentation	3 Months Ended
	Mar. 31, 2014
Accounting Policies [Abstract]	'
Nature of Operations and Basis of Presentation	'
	1.  Nature of Operations and Basis of Presentation
	Nature of Operations
	United American Petroleum Corp. is incorporated under the laws of the state of Nevada (“United”).  United’s principal business is the acquisition and management of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases.
	Basis of Presentation
	These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim consolidated financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 8 of SEC Regulation S-X. The principles for interim consolidated financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements on Form 10-K for the year ended December 31, 2013. The condensed consolidated financial statements included herein are unaudited; however, in the opinion of management, they contain all normal recurring adjustments necessary for a fair statement of the condensed results for the interim periods. Operating results for the three month period ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. We made certain reclassifications to prior-period amounts to conform to the current presentation.

Going_Concern

Going Concern	3 Months Ended
	Mar. 31, 2014
Going Concern	'
Going Concern	'
	2.  Going Concern
	The Company has incurred a net loss and negative operating cash flows since inception through March 31, 2014. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s management is implementing plans to sustain the Company’s cash flow from operating activities and/or acquire additional capital funding. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Related_Party_Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2014
Related Party Transactions [Abstract]	'
Related Party Transactions	'
	3.  Related Party Transactions
	As of March 31, 2014 the Company had a related party receivable in the amount of $79,564 due from a company with working interest amounts payable. This represents a $19,972 decrease from an amount of $99,536 as of December 31, 2013. Our directors are also officers in this company.

Convertible_Notes_and_Detached

Convertible Notes and Detached Warrants	3 Months Ended
	Mar. 31, 2014
Convertible Notes And Detached Warrants	'
Convertible Notes Payable and Detached Warrants	'
	4.  Convertible Notes and Detached Warrants
	Credit Facility – January 31, 2013
	On January 31, 2013, we entered into a Note Purchase Agreement with an investor pursuant to which the investor agreed to lend the Company up to $400,000 in multiple installments in exchange for a senior secured convertible
	promissory note with a conversion price equal to 60% of the lowest trading price per share during the previous 25 trading days. The first installment of $55,000 was delivered less a fee of $5,000 on the date of the Purchase Agreement. The second installment of $25,000 was delivered in April 2013. The notes mature on January 31, 2014, or upon default, whichever is earlier and bear interest at an annual rate of 12%. As described in Note 5, the embedded conversion feature qualified for liability classification at fair value. As a result, the Company recorded a full discount of $55,000 to the note payable on issuance of the first installment, and a full discount of $25,000 to the note payable on issuance of the second installment. As of March 31, 2014 there was $20,072 in outstanding principal and $18,333 in outstanding original interest discount (OID) on this note.
	On January 7, 2014 the holder of the convertible note exercised a portion of the conversion rights of the note for 2,800,000 shares of common respectively at a stock price of $0.0011 for a total of $6,380 principal converted.
	In January 2014, JMJ submitted a conversion request under one of its Convertible Notes; however, the Company was unable to comply with this request due to insufficient authorized shares of common stock. The lack of authorized shares constituted a default pursuant to the Note. The Company promptly notified JMJ of its inability to honor the conversion request. The Company expects to increase the number of authorized shares by May 29, 2014 (see Note 7, “Subsequent Events”). JMJ has not expressed an intention to assert the remedies set forth in the Note at this time.
	Convertible Note – February 19, 2013
	On February 19, 2013, we entered into a credit facility with an investor unrelated to the investor described above pursuant to which the investor lent $103,500 to us in a single installment (minus fees of $16,500) in exchange for a convertible promissory note with a conversion price equal to the average lowest trading price per share during the previous 10 trading days. The embedded conversion option cannot be exercised until 180 days from the date of the note and as such, was not priced until exercisable. The total number of conversion shares is calculated by dividing the amount of the notes by the conversion price.
	On January 2, 2014 the holder of the convertible note exercised a portion of the conversion rights of the note for 2,235,294 shares of common respectively at a stock price of $0.0017, for a total of $3,800 accrued interest converted.
	As of December 31, 2013 the principal on this note had been fully converted. Upon conversion of the final accrued interest of $3,800 described above, the obligations relating to the note were fully satisfied.
	Convertible Note – April 22, 2013
	On April 22, 2013, we entered into a credit facility with an investor unrelated to the investor described above pursuant to which the investor lent $63,000 (minus fees of $3,000) to us in a single installment in exchange for a convertible promissory note with a conversion price equal to 60% of the average lowest trading price per share during 5 of the previous 10 trading days. The embedded conversion option cannot be exercised until 180 days from the date of the note and as such, will not be priced until exercisable. The total number of conversion shares is calculated by dividing the amount of the notes by the conversion price.
	On January 7, 2014 and January 13, 2014 the holder of the convertible note exercised a portion of the conversion rights of the note for 2,757,895 and 2,750,000 shares of common stock respectively at stock prices of $0.0019 and $0.0018 respectively for a total of $10,190 principal converted.
	On September 23, 2013 the investor lent an additional $50,000 in a single installment (minus fees of $3,000) under the same terms agreement and terms as the previous installment made April 22, 2013.
	As of March 31, 2014, there was $106,593 in outstanding principal and interest on these notes.
	In January 2014, Asher submitted a conversion request under one of its Convertible Notes; however, the Company did not have sufficient shares of authorized common stock to honor the conversion request. Asher issued us a notice of default; however, Asher immediately waived the default provided that we began the process to increase our number of authorized shares. We have begun this process; however, the shares are not yet authorized. Consequently, Asher reissued the notice of default to us. Therefore, we have recognized a liability and a loss of $102,810 as of March 31, 2014, which represents the additional amount due under the Notes in the event of default.

Fair_Value_Measurements_and_De

Fair Value Measurements and Derivative Liabilities	3 Months Ended
	Mar. 31, 2014
Fair Value Disclosures [Abstract]	'
Fair Value Measurements and Derivative Liabilities	'
	5.  Fair Value Measurements and Derivative Liabilities
	The Company measures fair value in accordance with a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
		Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
		Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
		Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
	The following table sets forth the Company's consolidated financial assets and liabilities measured at fair value by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
			Total			Level 1		Level 2		Level 3
	LIABILITIES:
	Conversion option liability			—			—		—		187,085
	During 2013, the Company issued debt instruments that were convertible into common stock at a conversion price equal to 60% of the lowest trading price per share during the previous 25 trading days. The conversion options embedded in these instruments contain no explicit limit to the number of shares to be issued upon settlement and as a result are classified as liabilities under ASC 815. Additionally, because the number of shares to be issued upon settlement is indeterminate, all other share settle-able instruments must also be classified as liabilities. As a result, the Company measured its outstanding warrants on March 31, 2014 at fair value and re-classified these amounts from additional paid-in capital to derivative liabilities.
	The following is a reconciliation of the conversion option liability and embedded warrant liability for which Level 3 inputs were used in determining fair value:
	Beginning balance December 31, 2013		$	139,508
	Additions due to new convertible debt			152,810
	Reclassification of derivative liabilities to additional paid-in capital due to conversion of related notes payable			(19,497	)
	Mark to market of debt derivative			(85,736	)
	Debt derivative as of March 31, 2014		$	187,085
	The Company’s conversion option liabilities are valued using pricing models and the Company generally uses similar models to value similar instruments. Where possible, the Company verifies the values produced by its pricing models to market prices. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility and correlations of such inputs. These consolidated financial liabilities do not trade in liquid markets, and as such, model inputs cannot generally be verified and do involve significant management judgment. Such instruments are typically classified within Level 3 of the fair value hierarchy. The Company uses the Black Scholes Option Pricing Model to value its derivatives based upon the following assumptions: dividend yield of -0-%, volatility of 138%-398%, risk free rate of 0.03-0.44% and an expected term of 0.08 years to 3 years.

Significant_Sale_of_Assets

Significant Sale of Assets	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
Significant Sale of Assets	'
	6.  Significant Sale of Assets
	On February 26, 2014, the Company completed the sale of a 46% working interest (comprising a 34.5% net revenue interest) in an oil, gas and mineral lease covering 430 acres in Duval County, Texas, to RTO Exploration, LLC (“Buyer”) for the purchase price of $400,000. In addition to the purchase price, in 2013 the Buyer paid a $10,000 non-refundable option payment to the Company. The purchase price was the result of negotiations between the Company and the Buyer.
	UAPC’s chief executive officer and chief operating officer have performed certain consulting services for the Buyer.
	To account for the sale, we applied the two step process required by the full cost rules. First we calculated the impact of the sale of the working interest on the Company’s depletion rate, determining that the resulting change was not significant (less than 10%). Therefore, step two of the process (calculate loss or gain on sale) was not applicable, and we recognized the $410,000 proceeds as a direct reduction to the full cost pool. We also reduced the asset retirement obligation by $3,127 which was the amount attributable to the working interest that was sold.

Subsequent_Events

Subsequent Events	3 Months Ended
	Mar. 31, 2014
Subsequent Events [Abstract]	'
Subsequent Events	'
	7.  Subsequent Events
	On January 30, 2014, the Company’s Board of Directors voted to propose for shareholder approval an increase in the number of authorized shares of common stock of the Company to 750,000,000. On the same date, holders of 57.44% of the voting power of the Company voted to approve this action. This increase is expected to become effective on May 29, 2014.
	In April 2014, we settled a judgment that had been rendered against the Company in the amount of $19,856 plus attorneys’ fees of $73,669. We settled this judgment by assigning our interest in the Walker Smith lease and having the other working interest owners assign their interest in the lease as well.

Fair_Value_Measurements_and_De1

Fair Value Measurements and Derivative Liabilities (Tables)	3 Months Ended
	Mar. 31, 2014
Investments, Debt and Equity Securities [Abstract]	'
Schedule of consolidated financial assets and liabilities measured at fair value	'
	The following table sets forth the Company's consolidated financial assets and liabilities measured at fair value by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
		Total			Level 1		Level 2		Level 3
	LIABILITIES:
	Conversion option liability		—			—		—		187,085
Reconciliation of the conversion option liability and detachable warrant liability for Level 3 inputs	'
	The following is a reconciliation of the conversion option liability and embedded warrant liability for which Level 3 inputs were used in determining fair value:
	Beginning balance December 31, 2013	$	139,508
	Additions due to new convertible debt		152,810
	Reclassification of derivative liabilities to additional paid-in capital due to conversion of related notes payable		(19,497	)
	Mark to market of debt derivative		(85,736	)
	Debt derivative as of March 31, 2014	$	187,085

Related_Party_Transactions_Det

Related Party Transactions (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Related Party Receivable Details Narrative	'	'
Related party receivables	$79,564	$99,536
Increase (Decrease) in related party receivable	($19,972)	'

Convertible_Notes_and_Detached1

Convertible Notes and Detached Warrants (Details Narrative) (USD $)	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014	Jan. 13, 2014	Jan. 07, 2014	Mar. 31, 2014	Mar. 31, 2014
			Convertible Note 2/19/2013	Convertible Note 4/22/2013	Convertible Note 4/22/2013	Convertible Note 4/22/2013	Credit Facility 1/31/2013
Date of issuance	'	'	'	'	'	'	31-Jan-13
Maturity date	'	'	'	'	'	'	31-Jan-14
Interest rate	'	'	'	'	'	'	12.00%
Borrowing capacity	'	'	'	'	'	$63,000	$400,000
Debt fee	'	'	16,500	'	'	3,000	5,000
Discount on issuance	64,811	26,758	'	'	'	'	25,000
First installment	'	'	103,500	'	'	'	55,000
First installment, date	'	'	'	'	'	22-Apr-13	'
Second installment	'	'	'	'	'	47,000	'
Second installment, date	'	'	'	'	'	23-Sep-13	'
Conversion price, percentage of trading price	'	'	'	'	'	60.00%	60.00%
Debt conversion price, number of trading days to compute conversion price	'	'	'	'	'	'10 days	'25 days
Embedded conversion option can be exercised, earliest number of days from issuance	'	'	'180 days	'	'	'180 days	'
Debt conversion price, number of days for average price	'	'	'10 days	'	'	'5 days	'
Debt conversion, shares issued	'	'	2,235,294	2,757,895	2,757,895	'	2,800,000
Total principal amount converted	'	'	3,800	'	'	10,190	6,380
Debt conversion price	'	'	$0.00	$0.00	$0.00	'	$0.00
Outstanding principal	178,504	131,027	'	'	'	106,593	20,072
Outstanding Orignal Interest	'	'	'	'	'	'	$18,333

Fair_Value_Details

Fair Value (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Conversion Option Liability	$187,085	$139,508
Level 3	'	'
Conversion Option Liability	$187,085	'

Fair_Value_Details_2

Fair Value (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2014
Fair Value Details 2	'
Conversion option liability and detachable warrant liability, beginning	$139,508
Additions due to new convertible debt	152,810
Reclassification of derivative liabilities to additional paid-in capital due to conversion of related notes payable	-19,497
Mark to market of debt derivative	-85,736
Conversion option liability and detachable warrant liability, ending	$187,085

Fair_Value_Details_3

Fair Value (Details 3)	3 Months Ended
	Mar. 31, 2014
Dividend Yield	0.00%
Minimum [Member]	'
Volatility	138.00%
Risk Free Rate	0.03%
Expected Term	'29 days
Maximum [Member]	'
Volatility	398.00%
Risk Free Rate	0.44%
Expected Term	'3 years

Significant_Sale_of_Assets_Det

Significant Sale of Assets (Details Narrative) (USD $)	2 Months Ended	3 Months Ended
	Feb. 26, 2014	Mar. 31, 2014
	acre
Subsequent Events [Abstract]	'	'
Event date	26-Feb-14	'
Sale of working interest, percent	46.00%	'
Sale of working interest consisting of net revenue interest, percent	34.50%	'
Number of acres in oil, gas and mineral lease	430	'
Sales price of working interest	$400,000	$410,000
Non-refundable option payment paid by buyer	10,000	'
Reduction in Asset Retirement Obligation	$3,127	'

Subsequent_Events_Details_Narr

Subsequent Events (Details Narrative) (Subsequent Event [Member], USD $)	1 Months Ended
	Apr. 30, 2014
Subsequent Event [Member]	'
Amount of settlement as a result of judgement	$19,856
Attorneys' fees	$73,669