Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | 21-May-15 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Rockdale Resources Corp | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 18,953,152 | ||
Entity Public Float | $3,439,251 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1368637 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets | ||
Cash | $24,688 | $122,162 |
Accounts receivable | 26,176 | 58,472 |
Other current assets | 40,801 | 53,680 |
Total current assets | 91,665 | 234,314 |
Oil and gas, on the basis of full cost accounting | ||
Evaluated properties | 3,715,779 | 2,954,854 |
Furniture, equipment & software | 94,283 | 82,051 |
Less accumulated depreciation | -283,984 | -126,642 |
Net property and equipment | 3,526,078 | 2,910,263 |
Total Assets | 3,617,743 | 3,144,577 |
Current liabilities | ||
Accounts payable | 99,425 | 50,939 |
Accrued liabilities | 8,875 | 9,916 |
Current maturities of installment notes payable | 18,877 | 7,625 |
Deferred rent | 2,816 | 4,061 |
Total current liabilities | 129,993 | 72,541 |
Deferred rent | 0 | 2,926 |
Asset retirement obligations | 100,175 | 12,804 |
Convertible debt - related party, net of discount of 324,553 and $410,667 | 225,447 | 139,323 |
Installment note payable | 26,362 | 34,011 |
Total Liabilities | 481,977 | 261,605 |
Stockholders' Equity | ||
Preferred stock, $.10 par value; 1,000,000 shares authorized; No shares issued & outstanding | 0 | 0 |
Common stock, $.001 par value; 50,000,000 shares authorized; 19,353,152 and 14,178,041 shares issued and outstanding | 19,353 | 14,178 |
Additional paid in capital | 7,351,640 | 5,429,488 |
Accumulated deficit | -4,235,227 | -2,560,694 |
Total Stockholders' Equity | 3,135,766 | 2,882,972 |
Total Liabilities and Stockholders' Equity | $3,617,743 | $3,144,577 |
BALANCE_SHEETS_Parentheticals
BALANCE SHEETS (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Convertible debt, discount (in Dollars) | $324,553 | $410,667 |
Preferred stock, par value (in Dollars per share) | $0.10 | $0.10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,353,152 | 14,178,041 |
Common stock, shares outstanding | 19,353,152 | 14,178,041 |
STATEMENT_OF_OPERATIONS
STATEMENT OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Oil and gas sales | $683,536 | $324,510 |
Operating expenses | ||
Lease operating expense | 290,557 | 164,710 |
Production tax | 29,748 | 14,956 |
General and administrative expenses | 1,756,668 | 904,115 |
Depreciation, depletion and amortization | 165,943 | 93,740 |
Asset retirement obligation accretion | 1,872 | 8,592 |
Total operating expenses | 2,244,788 | 1,186,113 |
Loss from operations | -1,561,252 | -861,603 |
Other income (expense) | ||
Interest (expense) | -113,281 | -32,903 |
Net loss from continuing operations before taxes | -1,674,533 | -894,506 |
Income tax provision (benefit) | 0 | 0 |
Net loss | ($1,674,533) | ($894,506) |
Loss per share | ||
(Basic and fully diluted) (in Dollars per share) | ($0.09) | ($0.06) |
Weighted average number of common shares outstanding, basic and diluted (in Shares) | 18,070,038 | 14,737,653 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | ||
Net loss | ($1,674,533) | ($894,506) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 165,943 | 93,740 |
Accretion of debt discount | 86,124 | 32,551 |
Loss on disposal of assets | 10,945 | 6,999 |
Asset retirement obligation accretion | 1,872 | 8,592 |
Stock-based compensation expense – employees | 700,303 | 36,322 |
Stock-based compensation expense – consultants and directors | 447,000 | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable | 32,300 | -53,667 |
Other assets | 12,879 | -5,455 |
Accounts payable | 48,485 | 7,048 |
Accrued liabilities | -1,041 | -12,363 |
Deferred rent | -4,172 | -2,898 |
Net cash flows used in operating activities | -173,895 | -783,637 |
Cash Flows from Investing Activities | ||
Purchase property and equipment | -15,803 | -20,700 |
Proceeds from sale of property and equipment | 0 | 24,500 |
Capital expenditures on oil and gas properties | -675,426 | -376,995 |
Cash flows used in investing activities | -691,229 | -373,195 |
Cash Flows from Financing Activities | ||
Borrowings on convertible debt - related parties | 0 | 550,000 |
Proceeds from issuance of common stock | 780,024 | 0 |
Purchase of treasury stock | 0 | -900 |
Net payments on notes payable | -12,374 | -1,149 |
Cash flows provided by financing activities | 767,650 | 547,951 |
Net change in cash and cash equivalents | -97,474 | -608,881 |
Cash and cash equivalents | ||
Beginning of period | 122,162 | 731,043 |
End of period | 24,688 | 122,162 |
SUPPLEMENTAL DISCLOSURES | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
NON-CASH INVESTING AND FINANCIAL DISCLOSURES | ||
Truck transferred to former CEO | 41,636 | 0 |
Initial recognition of discount on related party debt | 0 | 443,228 |
Initial recognition of asset retirement obligations | 19,418 | 45,763 |
Change in estimated cash flows from asset retirement obligation | 66,081 | -74,777 |
Fair value of stock issued for oil properties | 0 | 433,000 |
Note payable for equipment | $57,613 | $42,785 |
STATEMENTS_OF_STOCKHOLDERS_EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Employee [Member] | Employee [Member] | Employee [Member] | Director [Member] | Director [Member] | Director [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Common Stock [Member] | Additional Paid-in Capital [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | ||||||||
Balance at Dec. 31, 2012 | $17,160 | ($5,000) | $4,519,856 | ($1,666,188) | $2,865,828 | ||||||
Balance (in Shares) at Dec. 31, 2012 | 17,159,748 | -20,000 | |||||||||
Stock-based compensation | 95 | 36,227 | 36,322 | ||||||||
Stock-based compensation (in Shares) | 95,000 | ||||||||||
Purchase of Treasury stock and cancellation of stock | -45 | 5,000 | -4,955 | ||||||||
Purchase of Treasury stock and cancellation of stock (in Shares) | -45,000 | 20,000 | |||||||||
Repurchase of stock | -3,632 | 2,732 | -900 | ||||||||
Repurchase of stock (in Shares) | -3,631,707 | ||||||||||
Shares issued for oil properties | 600 | 432,400 | 433,000 | ||||||||
Shares issued for oil properties (in Shares) | 600,000 | ||||||||||
Debt discount | 443,228 | 443,228 | |||||||||
Net loss | -894,506 | -894,506 | |||||||||
Balance at Dec. 31, 2013 | 14,178 | 5,429,488 | -2,560,694 | 2,882,972 | |||||||
Balance (in Shares) at Dec. 31, 2013 | 14,178,041 | ||||||||||
Stock-based compensation | 2,425 | 697,878 | 700,303 | 200 | 34,800 | 35,000 | 950 | 411,050 | 412,000 | ||
Stock-based compensation (in Shares) | 2,425,000 | 200,000 | 950,000 | ||||||||
Repurchase of stock | -1,000 | 1,000 | |||||||||
Repurchase of stock (in Shares) | -1,000,000 | ||||||||||
Shares issued for cash | 2,600 | 777,424 | 780,024 | ||||||||
Shares issued for cash (in Shares) | 2,600,111 | ||||||||||
Net loss | -1,674,533 | -1,674,533 | |||||||||
Balance at Dec. 31, 2014 | $19,353 | $7,351,640 | ($4,235,227) | $3,135,766 | |||||||
Balance (in Shares) at Dec. 31, 2014 | 19,353,152 |
NOTE_1_ORGANIZATION
NOTE 1. ORGANIZATION | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1. ORGANIZATION |
Rockdale Resources Corporation (“we”, “us”, the “Company”) was formed for the purpose of oil and gas exploration, development, and production. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”). | |
NOTE_2_SUMMARY_OF_SIGNIFICANT_
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation | |
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows. | |
Management Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing these financial statements include asset retirement obligations (Note 8), income taxes (Note 9) and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom (Note 10). | |
Reclassifications – Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported. | |
Cash and Cash Equivalents—The Company considers all highly liquid instruments purchased with an original maturity date of three months or less to be cash equivalents. | |
Oil and Gas Properties—The Company follows the full cost accounting method to account for oil and natural gas properties, whereby costs incurred in the acquisition, exploration and development of oil and gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on nonproducing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is recognized to operations. | |
The capitalized costs of oil and gas properties, excluding unevaluated and unproved properties, are amortized as depreciation, depletion and amortization expense using the units-of-production method based on estimated proved recoverable oil and gas reserves. | |
The costs associated with unevaluated and unproved properties, initially excluded from the amortization base, relate to unproved leasehold acreage, wells and production facilities in progress and wells pending determination of the existence of proved reserves, together with capitalized interest costs for these projects. Unproved leasehold costs are transferred to the amortization base with the costs of drilling the related well once a determination of the existence of proved reserves has been made or upon impairment of a lease. Costs associated with wells in progress and completed wells that have yet to be evaluated are transferred to the amortization base once a determination is made whether or not proved reserves can be assigned to the property. Costs of dry wells are transferred to the amortization base immediately upon determination that the well is unsuccessful. | |
All items classified as unproved property are assessed on a quarterly basis for possible impairment or reduction in value. Properties are assessed on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but not limited to, the following: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; assignment of proved reserves; and economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization. | |
Under full cost accounting rules for each cost center, capitalized costs of evaluated oil and gas properties, including asset retirement costs, less accumulated amortization and related deferred income taxes, may not exceed an amount (the "cost ceiling") equal to the sum of (a) the present value of future net cash flows from estimated production of proved oil and gas reserves, based on current prices and operating conditions, discounted at ten percent (10%), plus (b) the cost of properties not being amortized, plus (c) the lower of cost or estimated fair value of any unproved properties included in the costs being amortized, less (d) any income tax effects related to differences between the book and tax basis of the properties involved. If capitalized costs exceed this limit, the excess is charged to operations. For purposes of the ceiling test calculation, current prices are defined as the unweighted arithmetic average of the first day of the month price for each month within the 12 month period prior to the end of the reporting period. Prices are adjusted for basis or location differentials. Unless sales contracts specify otherwise, prices are held constant for the productive life of each well. Similarly, current costs are assumed to remain constant over the entire calculation period. There was no impairment during the years ended December 31, 2014 and 2013. | |
Given the volatility of oil and gas prices, it is reasonably possible that the estimate of discounted future net cash flows from proved oil and gas reserves could change in the near term. If oil and gas prices decline in the future, even if only for a short period of time, it is possible that impairments of oil and gas properties could occur. In addition, it is reasonably possible that impairments could occur if costs are incurred in excess of any increases in the present value of future net cash flows from proved oil and gas reserves, or if properties are sold for proceeds less than the discounted present value of the related proved oil and gas reserves. | |
Revenue Recognition— Revenues from the sale of crude oil, natural gas, and natural gas liquids are recognized when the product is delivered at a fixed or determinable price, title has transferred, collectability is reasonably assured and evidenced by a contract. The Company follows the sales method of accounting for its oil and natural gas revenue, so it recognizes revenue on all crude oil, natural gas, and natural gas liquids sold to purchasers, regardless of whether the sales are proportionate to its ownership in the property. A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than the expected remaining proved reserves. The Company had no imbalance positions at December 31, 2014 or 2013. Charges for gathering and transportation are included in production expenses. | |
Receivables and allowance for doubtful accounts—Oil revenues receivable do not bear any interest. We regularly review collectability and establish or adjust an allowance for uncollectible amounts as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that a reserve for uncollectible amounts was not required in the periods presented. | |
Asset Retirement Obligations—The Company records a liability for asset retirement obligations ("ARO") associated with its oil and gas wells when those assets are placed in service. The corresponding cost is capitalized as an asset and included in the carrying amount of oil and gas properties and is depleted over the useful life of the properties. Subsequently, the ARO liability is accreted to its then-present value. | |
Inherent in the fair value calculation of an 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. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. | |
Debt Issuance Costs—Costs incurred in connection with the issuance of long-term debt are capitalized and amortized over the term of the related debt. | |
Stock-Based Compensation— The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments, and is recognized as expense over the service period. The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and warrants and the closing price of the Company’s common stock for common share issuances. The Company may grant stock to employees and contractors in exchange for services rendered. | |
Income Taxes— Income Taxes—Income taxes are accounted for pursuant to ASC 740, Income Taxes, which requires recognition of deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The Company provides for deferred taxes on temporary differences between the financial statements and tax basis of assets using the enacted tax rates that are expected to apply to taxable income when the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. | |
Uncertain tax positions are recognized in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision. There are currently no unrecognized tax benefits that if recognized would affect the tax rate. There was no interest or penalties recognized for the twelve months ended December 31, 2014. | |
The Company is required to file federal income tax returns in the United States and in various state and local jurisdictions. The Company's tax returns filed since the 2010 tax year are subject to examination by taxing authorities in the jurisdictions in which it operates in accordance with the normal statutes of limitations in the applicable jurisdiction. | |
Furniture, equipment, and software—Furniture, equipment, and software are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related asset, generally three to five years. Fully depreciated assets are retained in property and accumulated depreciation accounts until they are removed from service. We perform ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. Maintenance and repairs are expensed as incurred. We periodically review our long-lived assets, other than oil and gas property, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. We recorded no impairment on our non-oil and gas long-lived assets during the years ended December 31, 2014 and 2013, respectively. | |
Earnings (Loss) Per Share—Basic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. The weighted-average number of common shares outstanding used in the computations of earnings (loss) per share was 18,070,038 for 2014 and 14,737,653 for 2013. Diluted EPS amounts would include the effect of outstanding stock options, warrants, and other convertible securities if including such potential shares of common stock is dilutive. Basic and diluted earnings per share are the same in all periods presented because losses are anti-dilutive. | |
Concentration of Credit Risk—The Company is subject to credit risk resulting from the concentration of its oil receivables with significant purchasers. Two purchasers accounted for all of the Company's oil sales revenues for 2014 and 2013. The Company does not require collateral. While the Company believes its recorded receivable will be collected, in the event of default the Company would follow normal collection procedures. The Company does not believe the loss of a purchaser would materially impact its operating results as oil is a fungible product with a well-established market and numerous purchasers. | |
At times, the Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management monitors the credit ratings and concentration of risk with these financial institutions on a continuing basis to safeguard cash deposits. | |
Fair Value Measurements—The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. | |
Recent Accounting Pronouncements | |
The Company has evaluated all the recent accounting pronouncements through the filing date and believes that none of them will have a material effect on the Company. | |
NOTE_3_GOING_CONCERN
NOTE 3. GOING CONCERN | 12 Months Ended |
Dec. 31, 2014 | |
Going Concern Disclosure [Abstract] | |
Going Concern Disclosure [Text Block] | NOTE 3. GOING CONCERN |
The Company has suffered recurring losses from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. We plan to generate profits by drilling productive oil or gas wells. However, we will need to raise the funds required to drill new wells through the sale of our securities, through loans from third parties or from third parties willing to pay our share of drilling and completing the wells. We do not have any commitments or arrangements from any person to provide us with any additional capital. If additional financing is not available when needed, we may need to cease operations. We may not be successful in raising the capital needed to drill oil or gas wells. Any wells which we may drill may not be productive of oil or gas. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty. | |
NOTE_4_NOTES_PAYABLE
NOTE 4. NOTES PAYABLE | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Debt Disclosure [Abstract] | |||||
Debt Disclosure [Text Block] | NOTE 4. NOTES PAYABLE | ||||
Convertible Debt – Related Party | |||||
On June 17, 2013, the Company entered into a Convertible Secured Note and Warrant Purchase Agreement (the “Purchase Agreement”) with Rick Wilber. Pursuant to the Purchase Agreement, the Company agreed to sell, and Mr. Wilber agreed to buy, for aggregate consideration of $350,000, a convertible secured promissory note in the principal amount of $350,000 (the “Note”) convertible at $0.30 per share, and a warrant to purchase 1,000,000 shares of the Company’s common stock (the “Warrant”) at an exercise price of $0.80 per share. The Company analyzed the Note and the Warrant for derivative accounting consideration and determined that derivative accounting is not applicable for these debts. The Warrant vests immediately and has a term of 10 years. The relative fair value of the Warrant was measured using the Black-Scholes option pricing model and determined to be $148,925, which was recorded as a debt discount. Variables used in the Black-Scholes option pricing model for the Warrant included: (1) discount rate of 2.19%, (2), expected life of ten years, (3) expected volatility of 196% and (4) zero expected dividends. The Note was then evaluated for a beneficial conversion feature and it was determined that a beneficial conversion feature existed. The intrinsic value of the beneficial conversion feature was determined to be $102,259 and was recorded as a debt discount. The debt discounts are being amortized over the life of the Note using the effective interest method. The effective interest rate was 53.7%. | |||||
On September 30, 2013, the Company entered into a Convertible Secured Note and Warrant Purchase Agreement (the “September Purchase Agreement”) with Rick Wilber. Pursuant to the September Purchase Agreement, the Company agreed to sell, and Mr. Wilber agreed to buy, for aggregate consideration of $100,000, a convertible secured promissory note in the principal amount of $100,000 (the “September Note”) convertible at $0.30 per share, and a warrant to purchase 285,000 shares of the Company’s common stock (the “September Warrant”) at an exercise price of $0.80 per share. The Company analyzed the September Note and the September Warrant for derivative accounting consideration and determined that derivative accounting is not applicable for these debts. The September Warrant vests immediately and has a term of 10 years. The relative fair value of the September Warrant was measured using the Black-Scholes option pricing model and determined to be $46,022 which was recorded as a debt discount. Variables used in the Black-Scholes option pricing model for the September Warrant included: (1) discount rate of 2.64%, (2), expected life of ten years, (3) expected volatility of 196.3% and (4) zero expected dividends. The September Note was then evaluated for a beneficial conversion feature and it was determined that a beneficial conversion feature existed. The intrinsic value of the beneficial conversion feature was determined to be $46,022 and was recorded as a debt discount. The debt discounts are being amortized over the life of the September Note using the effective interest method. The effective interest rate was 119.7%. | |||||
On December 31, 2013, the Company entered into a Convertible Secured Note and Warrant Purchase Agreement (the “December Purchase Agreement”) with Rick Wilber. The September Note was consolidated into the December Purchase Agreement. Pursuant to the December Purchase Agreement, in addition to the proceeds of the September Note, the Company agreed to sell, and Mr. Wilber agreed to buy, for aggregate consideration of $100,000, a convertible secured promissory note in the principal amount of $100,000 (the “December Note”) convertible at $0.30 per share, and a warrant to purchase 285,000 shares of the Company’s common stock (the “December Warrant”) at an exercise price of $0.80 per share. The Company analyzed the December Note and the December Warrant for derivative accounting consideration and determined that derivative accounting is not applicable for these debts. The December Warrant vests immediately and has a term of 10 years. The relative fair value of the December Warrant was measured using the Black-Scholes option pricing model and determined to be $49,873 which was recorded as a debt discount. Variables used in the Black-Scholes option pricing model for the December Warrant included: (1) discount rate of 2.64%, (2), expected life of ten years, (3) expected volatility of 195.8% and (4) zero expected dividends. The December Note was then evaluated for a beneficial conversion feature and it was determined that a beneficial conversion feature existed. The intrinsic value of the beneficial conversion feature was determined to be $50,127 and was recorded as a debt discount. The debt discounts are being amortized over the life of the December Note using the effective interest method. The effective interest rate was 132.2%. | |||||
During the years ended December 31, 2014 and 2013, the Company amortized $86,124 and 32,551 of the total discounts on the three transactions above to interest expense. The unamortized discount at December 31, 2014 was $324,553, and the ending note payable balance was $550,000; resulting in net convertible debt of $225,447. | |||||
Installment Notes | |||||
On October 31, 2013, the Company entered into an installment note with Ford Motor Credit in the amount of $42,785 for a term of five years at 6.24% APR. | |||||
On May 8, 2014, the Company entered into an installment note with CNH Industrial Capital in the amount of $57,613 for a term of three years at 2.9% APR. | |||||
Five Year Maturity | |||||
As of December 31, 2014, future maturities on our notes payable, which include the $550,000 convertible notes payable and the $45,239 remaining balance of the installment note described above, were as follows: | |||||
Fiscal year ending: | |||||
2015 | $ | 19,015 | |||
2016 | $ | 569,573 | |||
2017 | $ | 6,651 | |||
Total | $ | 595,239 | |||
Of the total future maturities, $550,000 relates to the convertible debt with Mr. Wilber, which all comes due in 2016. | |||||
NOTE_5_EQUITY
NOTE 5. EQUITY | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | NOTE 5. EQUITY | ||||||||||||||||
Preferred Stock – 1,000,000 shares authorized, none issued or outstanding. | |||||||||||||||||
Common Stock – | |||||||||||||||||
In March 2013, Michael Smith transferred 1,600,000 shares of the Company’s common stock to the Company for consideration of $100. These shares were returned to treasury and cancelled. In addition, in March 2013, John Barton, a former officer and director of the Company, and a number of other shareholders transferred an aggregate of 2,031,707 shares of the Company’s common stock to the Company for aggregate consideration of $900. All such shares were returned to treasury and cancelled. | |||||||||||||||||
In March 2013, an additional 45,000 outstanding shares of common stock were cancelled, including 20,000 of treasury stock. | |||||||||||||||||
In April 2013, the Company was assigned a 100% working interest (75% net revenue interest) in a 623-acre lease in Milam County, Texas. (The Company had previously been assigned an aggregate of 202.5 acres out of this 623-acre lease via an assignment in March 2012 of 200 acres and an assignment in October 2012 of 2.5 acres. See “The Subsequent Kingman Assignment” in Item 5 of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013, filed with the Securities and Exchange Commission on August 14, 2013.) The Company issued 500,000 shares of its common stock valued at $395,000 as consideration for the release of a security interest encumbering this 623-acre lease. | |||||||||||||||||
In June 2013 the Company issued 20,000 shares of its common stock valued at $5,400 as employee compensation. | |||||||||||||||||
On August 5, 2013, Matthew Ferguson was appointed to the Board of Directors of the Company. On the same date, the Company granted 500,000 shares of restricted stock to Matthew Ferguson, as consideration for Mr. Ferguson’s future services. Of this amount, 200,000 shares shall vest in equal quarterly increments over the course of twelve months beginning on November 5, 2013. The remaining 300,000 shares shall vest upon the Company’s attainment of certain production milestones, in increments of 100,000 shares per occurrence. Vesting of all shares is subject to Mr. Ferguson’s continued service as a director. These shares were issued pursuant to a Stand-Alone Restricted Stock Award Agreement between the Company and Mr. Ferguson, and were valued at $0.27 per share, or an aggregate of $135,000.00, on the date of grant. As of December 31, 2014 and 2013, the Company has incurred $32,104 and $21,896 of stock based compensation expense related to these shares. | |||||||||||||||||
On August 5, 2013, the Company granted 300,000 shares of restricted stock to Marc Spezialy as consideration for Mr. Spezialy’s continued service as an executive officer of the Company. These shares shall vest upon the Company’s attainment of certain production milestones, in increments of 100,000 shares per occurrence. Vesting of all shares is subject to Mr. Spezialy’s continued service as an executive officer. These shares were issued pursuant to a Stand-Alone Restricted Stock Award Agreement between the Company and Mr. Spezialy, and were valued at $0.27 per share, or an aggregate of $81,000, on the date of grant. | |||||||||||||||||
On August 5, 2013, the Company granted 100,000 shares of restricted stock to a Company employee as consideration for such employee’s continued service. These shares shall vest in equal quarterly increments over the course of twelve months beginning on November 5, 2013. Vesting of all shares is subject to the employee’s continued service. These shares were issued pursuant to a Stand-Alone Restricted Stock Award Agreement between the Company and the employee, and were valued at $0.27 per share, or an aggregate of $27,000, on the date of grant. As of December 31, 2014 and 2013, the Company has incurred $17,974 and $9,026 of stock based compensation expense related to these shares. | |||||||||||||||||
On October 2, 2013, the Company executed a Paid Up Oil and Gas Lease (the “New Lease”) between Noack Farms, LLC (“Noack”), as Lessor, and the Company, as Lessee. Under the New Lease, Noack leased to the Company 623.29 acres in Milam County, Texas, for the purpose of exploring for, developing, producing, and marketing oil and gas, along with all hydrocarbon and hydrocarbon substances produced in association therewith. The New Lease provides for royalties of 1/6th of the production from the leased premises to be paid to Noack. | |||||||||||||||||
The land described in the New Lease was subject to a pre-existing Paid Up Oil and Gas Lease dated June 20, 2011, from Noack, as Lessor, to Ardent 1, LLC, as Lessee (the “Prior Lease”). The New Lease provided that it was subordinate to the Prior Lease, and that it would not become effective until the termination or release of the Prior Lease. | |||||||||||||||||
As consideration for the New Lease, concurrently with Noack’s execution of the New Lease in June 2013, the Company paid Noack $3,116 As further consideration for the New Lease, on October 24, 2013, the Company issued Noack 100,000 shares of the Company’s common stock valued at $0.38 per share based on closing stock prices on the date of grant. | |||||||||||||||||
During the year ended December 31, 2014, the Company sold 2,600,111 shares to private investors as part of the private placement detailed in the 8-K filed on February 14, 2014. The shares were all purchased at a price of $0.30 per share and include warrants to purchase additional shares (one-for-one) at $0.75 per share any time before August 5, 2019. The purchasers included David Baker, who after his investment on February 16, 2014 subsequently joined our Board of Directors on May 8, 2014 and became the Company's Chief Executive Officer on June 2, 2014. The purchasers also included Leo Womack, who after his investment on August 15, 2014 simultaneously joined our Board of Directors. Mr. Womack purchased 166,667 shares and Mr. Baker purchased 416,675 shares. Mr. Lee Lytton also purchased 33,400 shares. On May 28, 2014 the Company entered into a financing services agreement ("Service Agreement") with ViewTrade Securities Corporation ("ViewTrade"). The Company will pay a commission in an amount equal to 10% of the gross proceeds received from any purchaser of Units directly introduced to the Company by ViewTrade, together with a five-year warrant to purchase up to 10% of the Securities sold by ViewTrade at an exercise price of 110% of the Offering Price. The Service Agreement resulted in $2,500 of commission expense and 8,334 warrants issued at a strike price of $0.33 in the second quarter of 2014. As of June 30, 2014 the Service Agreement has been terminated. The Company evaluated the warrants for derivative accounting consideration under ASC Topic 815-40, Derivatives and Hedging - Contracts in Entity's own stock. We concluded that the warrants meet the criteria for classification in stockholders' equity. Therefore, derivative accounting is not applicable for the warrants. | |||||||||||||||||
On January 27, 2014, 800,000 shares were granted to David Baker in the first quarter of 2014 as consideration for his services as a consultant. The consulting agreement can be found in the 8-K filed on January 27, 2014. The shares granted to David Baker resulted in $380,000 of general and administrative expense in the first quarter of 2014. On June 2, 2014 we issued 50,000 shares to an analyst for one year of service to research surrounding production near future oil and gas properties the Company is evaluating. The shares granted resulted in $19,000 of general and administrative expense in the second quarter of 2014. | |||||||||||||||||
On June 2, 2014, David Baker and Marc Spezialy entered into employment agreements with the Company. In addition to a base salary and in consideration for both Mr. Baker's and Mr. Spezialy's future services as officers and directors, each received restricted shares of the Company's common stock according to the terms of their respective employment agreements which can be found in the 8-K filed on June 4, 2014. Mr. Baker received a one-time grant of 800,000 restricted shares of the Company's common stock effective June 1, 2014 for his service as Chief Executive Officer. The shares shall be forfeited should the employment agreement be terminated for any reason prior to the conclusion of the initial 18 month term at a rate equal to 44,445 of the shares for each whole month that the employment period is terminated prior to the conclusion of the initial 18 month term. The Company is accounting for the expense of these shares over the term of Mr. Baker's employment. As of December 31, 2014, $118,225 has been expensed related to this 800,000 share grant. Mr. Baker also received a separate grant of an additional 100,000 restricted shares of the Company's common stock for his services as a Director effective June 1, 2014. These shares are not subject to potential forfeiture. Mr. Spezialy received a one-time grant of 1,000,000 restricted shares of the Company's common stock, effective June 1, 2014 for his service as Chief Operating Officer. These shares were fully vested and non-forfeitable at the time of the grant. Mr. Spezialy also received a separate grant of an additional 100,000 restricted shares of the Company's common stock for his services as a Director, effective June 1, 2014. Matthew Ferguson received a grant of 100,000 restricted shares of the Company's common stock as compensation for his services as a Director and a separate grant of an additional 100,000 restricted shares of the Company's stock for his services as a board advisor. All of these grants effective June 1, 2014 were valued at $.38 cents the closing price of the Companies’ stock at that date. | |||||||||||||||||
In August 2014, the Company granted 100,000 shares of common stock to Leo Womack for his services as a director during. These shares were valued, using the closing stock price on the date of grant, at $23,000. | |||||||||||||||||
In September 2014, Marc Spezialy resigned as an officer and director of the company and transferred 1,000,000 shares of the Company's common stock, to the Company for no consideration. These shares were returned to treasury and cancelled. | |||||||||||||||||
In October 2014 an individual received 100,000 shares of restricted common stock in connection with consulting services he has rendered and will render in the future. These shares are not subject to vesting and the grant date fair value of $0.13 and was determined by the closing stock price on the date of grant. | |||||||||||||||||
As of December 15, 2014 Mr. Lee H. Lytton was elected a Director of the Company and was granted 100,000 shares of common stock valued at $0.12 as of the closing stock price on the day granted. | |||||||||||||||||
Following the above issuances of common stock, the Company has 19,353,152 shares issued and outstanding as of December 31, 2014. The company has granted 488,895 restricted shares to David Baker which were not vested on December 31, 2014. After his resignation on February 28, 2015, 400,000 of these shares were voided and returned to the treasury. | |||||||||||||||||
Summary information regarding common stock warrants issued and outstanding as of December 31, 2014, is as follows: | |||||||||||||||||
Warrants | Weighted Average Exercise Price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | ||||||||||||||
Outstanding at year ended December 31, 2013 | 1,570,000 | 0.8 | - | 8.6 | |||||||||||||
Granted | 2,608,445 | $ | 0.75 | - | 4.5 | ||||||||||||
Exercised | - | - | - | ||||||||||||||
Expired | (8,334 | ) | - | - | |||||||||||||
Outstanding at year ended December 31, 2014 | 4,170,111 | $ | 0.77 | $ | - | 6.1 | |||||||||||
NOTE_6_COMMITMENTS_AND_CONTING
NOTE 6. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 6. COMMITMENTS AND CONTINGENCIES |
Environmental Matters – The Company, as a lessee 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 is not aware of any environmental claims existing as of December 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. | |
Office Lease – As of December 31, 2014, the Company has no leases. | |
NOTE_7_OIL_AND_GAS_ACQUISITION
NOTE 7. OIL AND GAS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2014 | |
Oil and Gas Property [Abstract] | |
Oil and Gas Properties [Text Block] | NOTE 7. OIL AND GAS ACQUISITIONS |
In April 2012, the Company entered into a farmout agreement with a related party pertaining to a 200-acre lease in Milam County, Texas at a price of $475,000. In October 2012, the Company entered into an additional farmout agreement with the related party for an additional 2.5 acres at a price of $10. As of December 31, 2012, the Company had completed the drilling of six wells on the leased properties. The total amount incurred for the drilling of the six wells was $2,125,685 as of December 31, 2012. | |
In April 2013, the Company entered into a lease pertaining to a 440 acre tract in Milam County, Texas, which is adjacent to the Company’s original 200 acre lease. The Company issued 500,000 shares of its common stock as consideration for a 100% working interest (75% net revenue interest) in such lease. | |
On October 2, 2013, the Company executed a Paid Up Oil and Gas Lease (the “New Lease”) between Noack Farms, LLC (“Noack”), as Lessor, and the Company, as Lessee. Under the New Lease, Noack leased to the Company 623.29 acres in Milam County, Texas, for the purpose of exploring for, developing, producing, and marketing oil and gas, along with all hydrocarbon and hydrocarbon substances produced in association therewith. The New Lease provides for royalties of 1/6th of the production from the leased premises to be paid to Noack. | |
The land described in the New Lease was subject to a pre-existing Paid Up Oil and Gas Lease dated June 20, 2011, from Noack, as Lessor, to Ardent 1, LLC, as Lessee (the “Prior Lease”). The New Lease provided that it was subordinate to the Prior Lease, and that it would not become effective until the termination or release of the Prior Lease. | |
By virtue of a series of assignments, the Prior Lease previously had been assigned to the Company as Lessee effective as of March 20, 2012. (The assignment to the Company is filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2013, filed with the Securities and Exchange Commission on August 14, 2013, and the Prior Lease is filed as Exhibit 10.8 to such Quarterly Report.) All of the Company’s current wells are drilled on the 623.29 acres that constitute the leased premises under the New Lease and the Prior Lease. | |
On October 24, 2013, the Company filed a release of the Prior Lease. | |
As consideration for the New Lease, concurrently with Noack’s execution of the New Lease in June 2013, the Company paid Noack $3,116.45. As further consideration for the New Lease, on October 24, 2013, the Company issued Noack 100,000 shares of the Company’s common stock. Under the New Lease, the Company must pay $1,000.00 per acre for well sites (with payments for fractions of an acre to be prorated based on the fraction of the acre used) as compensation for surface damages. The Company is also obligated to pay for certain other damages actually caused to the leased premises. | |
In conjunction with Noack’s execution of the New Lease, on May 31, 2013, the Company entered into a Defense and Indemnity Agreement with Noack Farms, LLC (the “Defense Agreement”). Under the Defense Agreement, the Company agreed to defend and indemnify Noack and certain parties related to Noack against certain claims asserted by any third party relating to the negotiation, execution, recording, or existence of the New Lease. | |
As of December 31, 2014, the Company had completed the drilling of sixteen wells on the leased properties. Four of these wells have been pledged as collateral for the convertible notes payable more fully discussed in Note 4. | |
NOTE_8_ASSET_RETIREMENT_OBLIGA
NOTE 8. ASSET RETIREMENT OBLIGATIONS | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Asset Retirement Obligation Disclosure [Abstract] | |||||
Asset Retirement Obligation Disclosure [Text Block] | NOTE 8. ASSET RETIREMENT OBLIGATIONS | ||||
During the calendar years presented, the Company brought a number of oil and gas wells into productive status and will have asset retirement obligations once the wells are permanently removed from service. The primary obligations involve the removal and disposal of surface equipment, plugging and abandoning the wells, and site restoration. For the purpose of determining the fair value of ARO incurred during the calendar years presented, the Company used the following assumptions: | |||||
31-Dec-14 | |||||
Inflation rate (avg.) | 1.3 | % | |||
Estimated asset life | 18 years | ||||
The following table shows the change in the Company's ARO for 2014 and 2013: | |||||
Asset retirement obligations at December 31, 2012 | $ | 52,644 | |||
Obligations assumed in acquisition | - | ||||
Additional retirement obligations incurred | 26,345 | ||||
Change in estimate | (74,777 | ) | |||
Accretion expense | 8,592 | ||||
Settlements | - | ||||
Asset retirement obligations at December 31, 2013 | $ | 12,804 | |||
Obligations assumed in acquisition | - | ||||
Additional retirement obligations incurred | 19,418 | ||||
Change in estimate | 66,081 | ||||
Accretion expense | 1,872 | ||||
Settlements | - | ||||
Asset retirement obligations at December 31, 2014 | $ | 100,175 | |||
NOTE_9_INCOME_TAXES
NOTE 9. INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Tax Disclosure [Text Block] | NOTE 9. INCOME TAXES | ||||||||
There was no provision for income taxes for 2014 and 2013 due to a net operating losses and doubt as to the entity’s ability to continue as a going concern resulting in a 100% valuation allowance. Years from 2011 forward are open to IRS examination. | |||||||||
The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate (35%) on operations due primarily to permanent differences attributable to organizational expenses for the purchase of Art Design, Inc. (the shell company) in the amount of $148,014. | |||||||||
Fiscal Year | Fiscal Year | ||||||||
Ended | Ended | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Income tax expense computed at statutory rates | $ | (603,209 | ) | $ | (304,646 | ) | |||
Non-deductible items | 468,253 | 24,823 | |||||||
Change in valuation allowance | 134,956 | 279,823 | |||||||
Total | $ | - | $ | - | |||||
The components of the net deferred tax asset were as follows: | |||||||||
31-Dec-13 | |||||||||
Gross Values | Tax Effect | ||||||||
Deferred tax assets | |||||||||
Book Impairment | $ | - | $ | - | |||||
Net operating loss carryforwards | 3,417,844 | 1,196,245 | |||||||
Asset retirement obligation | - | - | |||||||
Other | 6,000 | 2,100 | |||||||
Total deferred tax assets | 3,423,844 | 1,198,345 | |||||||
Deferred tax liabilities | |||||||||
O&G Properties | (1,280,525 | ) | (448,184 | ) | |||||
Other | - | - | |||||||
Total deferred tax liabilities | (1,280,525 | ) | (448,184 | ) | |||||
Less: Valuation allowance | (2,143,319 | ) | (750,161 | ) | |||||
Net deferred tax assets (liabilities) | $ | - | $ | - | |||||
31-Dec-14 | |||||||||
Gross Values | Tax Effect | ||||||||
Deferred tax assets | |||||||||
Book Impairment | $ | - | $ | - | |||||
Net operating loss carryforwards | 4,235,227 | 1,482,329 | |||||||
Asset retirement obligation | - | - | |||||||
Other | - | - | |||||||
Total deferred tax assets | 4,235,227 | 1,482,329 | |||||||
Deferred tax liabilities | |||||||||
O&G Properties | (1,631,976 | ) | (571,192 | ) | |||||
Other | - | - | |||||||
Total deferred tax liabilities | (1,631,976 | ) | (571,192 | ) | |||||
Less: Valuation allowance | (2,603,251 | ) | (911,137 | ) | |||||
Net deferred tax assets (liabilities) | $ | - | $ | - | |||||
A valuation allowance has been established to offset deferred tax assets. The Company's accumulated net operating losses were approximately $4.2 million at December 31, 2014 and begin to expire if not utilized beginning in the year 2032. | |||||||||
The Company has determined that as a result of the acquisition of substantially all of the outstanding stock of Art Design, Inc., a change of control pursuant to Section 382 of the Internal Revenue Code of 1986 occurred. As a result, the Company’s ability to use any net operating losses attributable to Art Design, Inc. for federal income tax purposes has been forfeited | |||||||||
NOTE_10_SUPPLEMENTAL_INFORMATI
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |||||||||
Oil and Gas Exploration and Production Industries Disclosures [Text Block] | NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) | ||||||||
Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development. Amounts reported as costs incurred include both capitalized costs and costs charged to expense during the year for oil and gas property acquisition, exploration and development activities. Costs incurred also include new asset retirement obligations established in the current year, as well as increases or decreases to the asset retirement obligations resulting from changes to cost estimates during the year. Exploration costs presented below include the costs of drilling and equipping successful exploration wells, as well as dry hole costs, leasehold impairments, geological and geophysical expenses, and the costs of retaining undeveloped leaseholds. Development costs include the costs of drilling and equipping development wells, and construction of related production facilities. | |||||||||
Fiscal Year Ended | Fiscal Year Ended | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Property acquisitions | |||||||||
Unevaluated | $ | - | $ | - | |||||
Evaluated | - | - | |||||||
Exploration | - | - | |||||||
Development | 675,426 | 756,219 | |||||||
Total Costs Incurred | $ | 675,426 | $ | 756,219 | |||||
Capitalized costs. Capitalized costs include the cost of properties, equipment and facilities for oil and natural-gas producing activities. Capitalized costs for proved properties include costs for oil and natural-gas leaseholds where proved reserves have been identified, development wells, and related equipment and facilities, including development wells in progress. Capitalized costs for unproved properties include costs for acquiring oil and gas leaseholds and geological and geophysical expenses where no proved reserves have been identified. | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Capitalized costs | |||||||||
Unevaluated properties | $ | - | $ | - | |||||
Evaluated properties | 3,715,779 | 2,954,854 | |||||||
3,715,779 | 2,954,854 | ||||||||
Less: Accumulated DD&A | (251,185 | ) | (102,091 | ) | |||||
Net capitalized costs | $ | 3,464,594 | $ | 2,852,763 | |||||
Oil and Gas Reserve Information. Mire and Associates, Inc., an independent engineering firm, prepared the estimates of the proved reserves, future production, and income attributable to the leasehold interests as of December 31, 2014 and 2013. The estimated proved net recoverable reserves presented below include only those quantities that were expected to be commercially recoverable at prices and costs in effect at the balance sheet dates under the then existing regulatory practices and with conventional equipment and operating methods. Proved Developed Reserves represent only those reserves estimated to be recovered through existing wells. Proved Undeveloped Reserves include those reserves that may be recovered from new wells on undrilled acreage or from existing wells on which a relatively major expenditure for recompletion or secondary recovery operations is required. All of the Company's Proved Reserves are located onshore in the continental United States of America. | |||||||||
Discounted future cash flow estimates like those shown below are not intended to represent estimates of the fair value of oil and gas properties. Estimates of fair value should also consider unproved reserves, anticipated future oil and gas prices, interest rates, changes in development and production costs and risks associated with future production. Because of these and other considerations, any estimate of fair value is subjective and imprecise. | |||||||||
The following table sets forth estimates of the proved oil and gas reserves (net of royalty interests) for the Company and changes therein, for the periods indicated. | |||||||||
Oil | |||||||||
(Bbls) | |||||||||
31-Dec-12 | 219,614 | ||||||||
Revisions of prior estimates | (8,537 | ) | |||||||
Purchases of reserves in place | 18,991 | ||||||||
Production | (3,468 | ) | |||||||
31-Dec-13 | 226,600 | ||||||||
Revisions of prior estimates | (59,218 | ) | |||||||
Purchases of reserves in place | 142,080 | ||||||||
Production | (7,562 | ) | |||||||
31-Dec-14 | 301,900 | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Estimated Quantities of Proved Developed Reserves – Oil (Bbls) | 79,100 | 29,900 | |||||||
Estimated Quantities of Proved Undeveloped Reserves – Oil (Bbls) | 222,800 | 196,700 | |||||||
Standardized Measure of Discounted Future Net Cash Flows. The Standardized Measure related to proved oil and gas reserves is summarized below. Future cash inflows were computed by applying a twelve month average of the first day of the month prices to estimated future production, less estimated future expenditures (based on year end costs) to be incurred in developing and producing the proved reserves, less estimated future income tax expense. Future income tax expenses are calculated by applying appropriate year-end tax rates to future pretax net cash flows, less the tax basis of properties involved. Future net cash flows are discounted at a rate of 10% annually to derive the standardized measure of discounted future net cash flows. This calculation procedure does not necessarily result in an estimate of the fair market value or the present value of the Company. | |||||||||
Standardized Measure of Oil and Gas | |||||||||
The following table sets forth the changes in standardized measure of discounted future net cash flows relating to proved oil and gas reserves for the periods indicated. | |||||||||
December 31, | |||||||||
2013 | |||||||||
Future cash inflows | $ | 21,168,740 | |||||||
Future production costs | (7,050,170 | ) | |||||||
Future development costs | (2,060,100 | ) | |||||||
Future income taxes | - | ||||||||
Future net cash flows | 12,058,470 | ||||||||
Discount of future net cash flows at 10% per annum | (4,091,920 | ) | |||||||
Standardized measure of discounted future net cash flows | $ | 7,966,550 | |||||||
December 31, | |||||||||
2014 | |||||||||
Future cash inflows | $ | 27,417,550 | |||||||
Future production costs | (14,381,500 | ) | |||||||
Future development costs | (2,507,000 | ) | |||||||
Future income taxes | - | ||||||||
Future net cash flows | 10,529,050 | ||||||||
Discount of future net cash flows at 10% per annum | (4,225,170 | ) | |||||||
Standardized measure of discounted future net cash flows | $ | 6,303,880 | |||||||
Changes in standardized measure of discounted future cash flows | |||||||||
12/31/14 | 12/31/13 | ||||||||
Beginning of year | 7,966,550 | 4,440,757 | |||||||
Sales and transfers of oil & gas produced, net of production costs | (392,979 | ) | (144,845 | ) | |||||
Net changes in prices and production costs | (1,454,390 | ) | 808,717 | ||||||
Development costs incurred | 675,426 | 829,168 | |||||||
Changes in estimated future development costs | (1,896,600 | ) | 316,612 | ||||||
Acquisitions of minerals in place, net of production costs | 2,966,532 | 1,183,256 | |||||||
Revision of previous estimates | (867,355 | ) | (180,497 | ) | |||||
Change in discount | 796,655 | 444,076 | |||||||
Change in production rate or other | (1,489,959 | ) | 269,306 | ||||||
End of year | 6,303,880 | 7,966,550 | |||||||
NOTE_11_SUBSEQUENT_EVENTS
NOTE 11. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 11. SUBSEQUENT EVENTS |
On February 28, 2015 David Baker resigned as the President and CEO of the Company and Mr. Zel C. Khan was appointed to be the interim CEO pending the execution of a formal long-term employment agreement with Mr. Khan which would coincide with the closing of a major transaction with Mr. Khan’s Jovian Petroleum Company. | |
On May 12, 2015 Mr. Leo Womack the Chairman of the Board filed a Form 4 disclosing that an affiliated Family Trust had purchased 1,630,000 shares of common stock from Mr. David Baker in a private transaction at a cash price of $0.08 cents per share. Combined with prior ownership Mr. Womack now controls approximately 10% of the total outstanding common stock of the Company. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation |
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows. | |
Use of Estimates, Policy [Policy Text Block] | Management Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing these financial statements include asset retirement obligations (Note 8), income taxes (Note 9) and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom (Note 10). |
Reclassification, Policy [Policy Text Block] | Reclassifications – Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents—The Company considers all highly liquid instruments purchased with an original maturity date of three months or less to be cash equivalents. |
Oil and Gas Properties Policy [Policy Text Block] | Oil and Gas Properties—The Company follows the full cost accounting method to account for oil and natural gas properties, whereby costs incurred in the acquisition, exploration and development of oil and gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on nonproducing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is recognized to operations. |
The capitalized costs of oil and gas properties, excluding unevaluated and unproved properties, are amortized as depreciation, depletion and amortization expense using the units-of-production method based on estimated proved recoverable oil and gas reserves. | |
The costs associated with unevaluated and unproved properties, initially excluded from the amortization base, relate to unproved leasehold acreage, wells and production facilities in progress and wells pending determination of the existence of proved reserves, together with capitalized interest costs for these projects. Unproved leasehold costs are transferred to the amortization base with the costs of drilling the related well once a determination of the existence of proved reserves has been made or upon impairment of a lease. Costs associated with wells in progress and completed wells that have yet to be evaluated are transferred to the amortization base once a determination is made whether or not proved reserves can be assigned to the property. Costs of dry wells are transferred to the amortization base immediately upon determination that the well is unsuccessful. | |
All items classified as unproved property are assessed on a quarterly basis for possible impairment or reduction in value. Properties are assessed on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but not limited to, the following: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; assignment of proved reserves; and economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization. | |
Under full cost accounting rules for each cost center, capitalized costs of evaluated oil and gas properties, including asset retirement costs, less accumulated amortization and related deferred income taxes, may not exceed an amount (the "cost ceiling") equal to the sum of (a) the present value of future net cash flows from estimated production of proved oil and gas reserves, based on current prices and operating conditions, discounted at ten percent (10%), plus (b) the cost of properties not being amortized, plus (c) the lower of cost or estimated fair value of any unproved properties included in the costs being amortized, less (d) any income tax effects related to differences between the book and tax basis of the properties involved. If capitalized costs exceed this limit, the excess is charged to operations. For purposes of the ceiling test calculation, current prices are defined as the unweighted arithmetic average of the first day of the month price for each month within the 12 month period prior to the end of the reporting period. Prices are adjusted for basis or location differentials. Unless sales contracts specify otherwise, prices are held constant for the productive life of each well. Similarly, current costs are assumed to remain constant over the entire calculation period. There was no impairment during the years ended December 31, 2014 and 2013. | |
Given the volatility of oil and gas prices, it is reasonably possible that the estimate of discounted future net cash flows from proved oil and gas reserves could change in the near term. If oil and gas prices decline in the future, even if only for a short period of time, it is possible that impairments of oil and gas properties could occur. In addition, it is reasonably possible that impairments could occur if costs are incurred in excess of any increases in the present value of future net cash flows from proved oil and gas reserves, or if properties are sold for proceeds less than the discounted present value of the related proved oil and gas reserves. | |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition— Revenues from the sale of crude oil, natural gas, and natural gas liquids are recognized when the product is delivered at a fixed or determinable price, title has transferred, collectability is reasonably assured and evidenced by a contract. The Company follows the sales method of accounting for its oil and natural gas revenue, so it recognizes revenue on all crude oil, natural gas, and natural gas liquids sold to purchasers, regardless of whether the sales are proportionate to its ownership in the property. A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than the expected remaining proved reserves. The Company had no imbalance positions at December 31, 2014 or 2013. Charges for gathering and transportation are included in production expenses. |
Receivables, Policy [Policy Text Block] | Receivables and allowance for doubtful accounts—Oil revenues receivable do not bear any interest. We regularly review collectability and establish or adjust an allowance for uncollectible amounts as necessary using the specific identification method. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that a reserve for uncollectible amounts was not required in the periods presented. |
Asset Retirement Obligations, Policy [Policy Text Block] | Asset Retirement Obligations—The Company records a liability for asset retirement obligations ("ARO") associated with its oil and gas wells when those assets are placed in service. The corresponding cost is capitalized as an asset and included in the carrying amount of oil and gas properties and is depleted over the useful life of the properties. Subsequently, the ARO liability is accreted to its then-present value. |
Inherent in the fair value calculation of an 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. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. | |
Debt, Policy [Policy Text Block] | Debt Issuance Costs—Costs incurred in connection with the issuance of long-term debt are capitalized and amortized over the term of the related debt. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation— The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments, and is recognized as expense over the service period. The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and warrants and the closing price of the Company’s common stock for common share issuances. The Company may grant stock to employees and contractors in exchange for services rendered. |
Income Tax, Policy [Policy Text Block] | Income Taxes— Income Taxes—Income taxes are accounted for pursuant to ASC 740, Income Taxes, which requires recognition of deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The Company provides for deferred taxes on temporary differences between the financial statements and tax basis of assets using the enacted tax rates that are expected to apply to taxable income when the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. |
Uncertain tax positions are recognized in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision. There are currently no unrecognized tax benefits that if recognized would affect the tax rate. There was no interest or penalties recognized for the twelve months ended December 31, 2014. | |
The Company is required to file federal income tax returns in the United States and in various state and local jurisdictions. The Company's tax returns filed since the 2010 tax year are subject to examination by taxing authorities in the jurisdictions in which it operates in accordance with the normal statutes of limitations in the applicable jurisdiction. | |
Property, Plant and Equipment, Policy [Policy Text Block] | Furniture, equipment, and software—Furniture, equipment, and software are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related asset, generally three to five years. Fully depreciated assets are retained in property and accumulated depreciation accounts until they are removed from service. We perform ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. Maintenance and repairs are expensed as incurred. We periodically review our long-lived assets, other than oil and gas property, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. We recorded no impairment on our non-oil and gas long-lived assets during the years ended December 31, 2014 and 2013, respectively. |
Earnings Per Share, Policy [Policy Text Block] | Earnings (Loss) Per Share—Basic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. The weighted-average number of common shares outstanding used in the computations of earnings (loss) per share was 18,070,038 for 2014 and 14,737,653 for 2013. Diluted EPS amounts would include the effect of outstanding stock options, warrants, and other convertible securities if including such potential shares of common stock is dilutive. Basic and diluted earnings per share are the same in all periods presented because losses are anti-dilutive. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk—The Company is subject to credit risk resulting from the concentration of its oil receivables with significant purchasers. Two purchasers accounted for all of the Company's oil sales revenues for 2014 and 2013. The Company does not require collateral. While the Company believes its recorded receivable will be collected, in the event of default the Company would follow normal collection procedures. The Company does not believe the loss of a purchaser would materially impact its operating results as oil is a fungible product with a well-established market and numerous purchasers. |
At times, the Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management monitors the credit ratings and concentration of risk with these financial institutions on a continuing basis to safeguard cash deposits. | |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements—The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements |
The Company has evaluated all the recent accounting pronouncements through the filing date and believes that none of them will have a material effect on the Company. |
NOTE_4_NOTES_PAYABLE_Tables
NOTE 4. NOTES PAYABLE (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Debt Disclosure [Abstract] | |||||
Schedule of Maturities of Long-term Debt [Table Text Block] | As of December 31, 2014, future maturities on our notes payable, which include the $550,000 convertible notes payable and the $45,239 remaining balance of the installment note described above, were as follows: | ||||
Fiscal year ending: | |||||
2015 | $ | 19,015 | |||
2016 | $ | 569,573 | |||
2017 | $ | 6,651 | |||
Total | $ | 595,239 |
NOTE_5_EQUITY_Tables
NOTE 5. EQUITY (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Summary information regarding common stock warrants issued and outstanding as of December 31, 2014, is as follows: | ||||||||||||||||
Warrants | Weighted Average Exercise Price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | ||||||||||||||
Outstanding at year ended December 31, 2013 | 1,570,000 | 0.8 | - | 8.6 | |||||||||||||
Granted | 2,608,445 | $ | 0.75 | - | 4.5 | ||||||||||||
Exercised | - | - | - | ||||||||||||||
Expired | (8,334 | ) | - | - | |||||||||||||
Outstanding at year ended December 31, 2014 | 4,170,111 | $ | 0.77 | $ | - | 6.1 |
NOTE_8_ASSET_RETIREMENT_OBLIGA1
NOTE 8. ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Asset Retirement Obligation Disclosure [Abstract] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | For the purpose of determining the fair value of ARO incurred during the calendar years presented, the Company used the following assumptions: | ||||
31-Dec-14 | |||||
Inflation rate (avg.) | 1.3 | % | |||
Estimated asset life | 18 years | ||||
Schedule of Asset Retirement Obligations [Table Text Block] | The following table shows the change in the Company's ARO for 2014 and 2013: | ||||
Asset retirement obligations at December 31, 2012 | $ | 52,644 | |||
Obligations assumed in acquisition | - | ||||
Additional retirement obligations incurred | 26,345 | ||||
Change in estimate | (74,777 | ) | |||
Accretion expense | 8,592 | ||||
Settlements | - | ||||
Asset retirement obligations at December 31, 2013 | $ | 12,804 | |||
Obligations assumed in acquisition | - | ||||
Additional retirement obligations incurred | 19,418 | ||||
Change in estimate | 66,081 | ||||
Accretion expense | 1,872 | ||||
Settlements | - | ||||
Asset retirement obligations at December 31, 2014 | $ | 100,175 |
NOTE_9_INCOME_TAXES_Tables
NOTE 9. INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate (35%) on operations due primarily to permanent differences attributable to organizational expenses for the purchase of Art Design, Inc. (the shell company) in the amount of $148,014. | ||||||||
Fiscal Year | Fiscal Year | ||||||||
Ended | Ended | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Income tax expense computed at statutory rates | $ | (603,209 | ) | $ | (304,646 | ) | |||
Non-deductible items | 468,253 | 24,823 | |||||||
Change in valuation allowance | 134,956 | 279,823 | |||||||
Total | $ | - | $ | - | |||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of the net deferred tax asset were as follows: | ||||||||
31-Dec-13 | |||||||||
Gross Values | Tax Effect | ||||||||
Deferred tax assets | |||||||||
Book Impairment | $ | - | $ | - | |||||
Net operating loss carryforwards | 3,417,844 | 1,196,245 | |||||||
Asset retirement obligation | - | - | |||||||
Other | 6,000 | 2,100 | |||||||
Total deferred tax assets | 3,423,844 | 1,198,345 | |||||||
Deferred tax liabilities | |||||||||
O&G Properties | (1,280,525 | ) | (448,184 | ) | |||||
Other | - | - | |||||||
Total deferred tax liabilities | (1,280,525 | ) | (448,184 | ) | |||||
Less: Valuation allowance | (2,143,319 | ) | (750,161 | ) | |||||
Net deferred tax assets (liabilities) | $ | - | $ | - | |||||
31-Dec-14 | |||||||||
Gross Values | Tax Effect | ||||||||
Deferred tax assets | |||||||||
Book Impairment | $ | - | $ | - | |||||
Net operating loss carryforwards | 4,235,227 | 1,482,329 | |||||||
Asset retirement obligation | - | - | |||||||
Other | - | - | |||||||
Total deferred tax assets | 4,235,227 | 1,482,329 | |||||||
Deferred tax liabilities | |||||||||
O&G Properties | (1,631,976 | ) | (571,192 | ) | |||||
Other | - | - | |||||||
Total deferred tax liabilities | (1,631,976 | ) | (571,192 | ) | |||||
Less: Valuation allowance | (2,603,251 | ) | (911,137 | ) | |||||
Net deferred tax assets (liabilities) | $ | - | $ | - |
NOTE_10_SUPPLEMENTAL_INFORMATI1
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Tables) [Line Items] | |||||||||
Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure [Table Text Block] | Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development. Amounts reported as costs incurred include both capitalized costs and costs charged to expense during the year for oil and gas property acquisition, exploration and development activities. Costs incurred also include new asset retirement obligations established in the current year, as well as increases or decreases to the asset retirement obligations resulting from changes to cost estimates during the year. Exploration costs presented below include the costs of drilling and equipping successful exploration wells, as well as dry hole costs, leasehold impairments, geological and geophysical expenses, and the costs of retaining undeveloped leaseholds. Development costs include the costs of drilling and equipping development wells, and construction of related production facilities. | ||||||||
Fiscal Year Ended | Fiscal Year Ended | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Property acquisitions | |||||||||
Unevaluated | $ | - | $ | - | |||||
Evaluated | - | - | |||||||
Exploration | - | - | |||||||
Development | 675,426 | 756,219 | |||||||
Total Costs Incurred | $ | 675,426 | $ | 756,219 | |||||
Capitalized Costs Relating to Oil and Gas Producing Activities Disclosure [Table Text Block] | Capitalized costs. Capitalized costs include the cost of properties, equipment and facilities for oil and natural-gas producing activities. Capitalized costs for proved properties include costs for oil and natural-gas leaseholds where proved reserves have been identified, development wells, and related equipment and facilities, including development wells in progress. Capitalized costs for unproved properties include costs for acquiring oil and gas leaseholds and geological and geophysical expenses where no proved reserves have been identified. | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Capitalized costs | |||||||||
Unevaluated properties | $ | - | $ | - | |||||
Evaluated properties | 3,715,779 | 2,954,854 | |||||||
3,715,779 | 2,954,854 | ||||||||
Less: Accumulated DD&A | (251,185 | ) | (102,091 | ) | |||||
Net capitalized costs | $ | 3,464,594 | $ | 2,852,763 | |||||
Schedule of Proved Developed and Undeveloped Oil and Gas Reserve Quantities [Table Text Block] | 31-Dec-14 | 31-Dec-13 | |||||||
Estimated Quantities of Proved Developed Reserves – Oil (Bbls) | 79,100 | 29,900 | |||||||
Estimated Quantities of Proved Undeveloped Reserves – Oil (Bbls) | 222,800 | 196,700 | |||||||
Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure [Table Text Block] | The following table sets forth the changes in standardized measure of discounted future net cash flows relating to proved oil and gas reserves for the periods indicated. | ||||||||
December 31, | |||||||||
2013 | |||||||||
Future cash inflows | $ | 21,168,740 | |||||||
Future production costs | (7,050,170 | ) | |||||||
Future development costs | (2,060,100 | ) | |||||||
Future income taxes | - | ||||||||
Future net cash flows | 12,058,470 | ||||||||
Discount of future net cash flows at 10% per annum | (4,091,920 | ) | |||||||
Standardized measure of discounted future net cash flows | $ | 7,966,550 | |||||||
December 31, | |||||||||
2014 | |||||||||
Future cash inflows | $ | 27,417,550 | |||||||
Future production costs | (14,381,500 | ) | |||||||
Future development costs | (2,507,000 | ) | |||||||
Future income taxes | - | ||||||||
Future net cash flows | 10,529,050 | ||||||||
Discount of future net cash flows at 10% per annum | (4,225,170 | ) | |||||||
Standardized measure of discounted future net cash flows | $ | 6,303,880 | |||||||
Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows [Table Text Block] | Changes in standardized measure of discounted future cash flows | ||||||||
Changes in standardized measure of discounted future cash flows | |||||||||
12/31/14 | 12/31/13 | ||||||||
Beginning of year | 7,966,550 | 4,440,757 | |||||||
Sales and transfers of oil & gas produced, net of production costs | (392,979 | ) | (144,845 | ) | |||||
Net changes in prices and production costs | (1,454,390 | ) | 808,717 | ||||||
Development costs incurred | 675,426 | 829,168 | |||||||
Changes in estimated future development costs | (1,896,600 | ) | 316,612 | ||||||
Acquisitions of minerals in place, net of production costs | 2,966,532 | 1,183,256 | |||||||
Revision of previous estimates | (867,355 | ) | (180,497 | ) | |||||
Change in discount | 796,655 | 444,076 | |||||||
Change in production rate or other | (1,489,959 | ) | 269,306 | ||||||
End of year | 6,303,880 | 7,966,550 | |||||||
Rollforward of Proved Reserves [Member] | |||||||||
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Tables) [Line Items] | |||||||||
Schedule of Proved Developed and Undeveloped Oil and Gas Reserve Quantities [Table Text Block] | The following table sets forth estimates of the proved oil and gas reserves (net of royalty interests) for the Company and changes therein, for the periods indicated. | ||||||||
Oil | |||||||||
(Bbls) | |||||||||
31-Dec-12 | 219,614 | ||||||||
Revisions of prior estimates | (8,537 | ) | |||||||
Purchases of reserves in place | 18,991 | ||||||||
Production | (3,468 | ) | |||||||
31-Dec-13 | 226,600 | ||||||||
Revisions of prior estimates | (59,218 | ) | |||||||
Purchases of reserves in place | 142,080 | ||||||||
Production | (7,562 | ) | |||||||
31-Dec-14 | 301,900 |
NOTE_2_SUMMARY_OF_SIGNIFICANT_1
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 18,070,038 | 14,737,653 |
Minimum [Member] | ||
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Maximum [Member] | ||
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years |
NOTE_4_NOTES_PAYABLE_Details
NOTE 4. NOTES PAYABLE (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 17, 2013 | 8-May-14 | Oct. 31, 2013 | |
NOTE 4. NOTES PAYABLE (Details) [Line Items] | |||||||
Class of Warrant or Right, Granted (in Shares) | 2,608,445 | ||||||
Fair Value Inputs, Discount Rate | 10.00% | 10.00% | |||||
Debt Instrument, Unamortized Discount | $324,553 | $410,667 | $410,667 | ||||
Amortization of Debt Discount (Premium) | 86,124 | 32,551 | |||||
Convertible Debt, Noncurrent | 225,447 | 139,323 | 139,323 | ||||
Notes Payable | 45,239 | ||||||
Convertible Debt [Member] | |||||||
NOTE 4. NOTES PAYABLE (Details) [Line Items] | |||||||
Proceeds from Convertible Debt | 100,000 | 100,000 | 350,000 | ||||
Debt Instrument, Face Amount | 100,000 | 100,000 | 100,000 | 350,000 | |||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.30 | $0.30 | $0.30 | $0.30 | |||
Class of Warrant or Right, Granted (in Shares) | 285,000 | 285,000 | 1,000,000 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $0.80 | $0.80 | $0.80 | $0.80 | |||
Class of Warrant, Term of Warrants | 10 years | 10 years | 10 years | ||||
Warrants, Fair Value of Warrants, Granted | 49,873 | 46,022 | 148,925 | ||||
Fair Value Inputs, Discount Rate | 2.64% | 2.64% | 2.19% | ||||
Fair Value Assumptions, Expected Term | 10 years | 10 years | 10 years | ||||
Fair Value Assumptions, Expected Volatility Rate | 195.80% | 196.30% | 196.00% | ||||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | ||||
Debt Instrument, Unamortized Discount | 324,553 | 50,127 | 50,127 | 46,022 | 102,259 | ||
Fair Value Assumptions, Risk Free Interest Rate | 132.20% | 119.70% | 53.70% | ||||
Amortization of Debt Discount (Premium) | 86,124 | 32,551 | |||||
Long-term Debt, Gross | 550,000 | ||||||
Convertible Debt, Noncurrent | 225,447 | ||||||
Loans Payable [Member] | |||||||
NOTE 4. NOTES PAYABLE (Details) [Line Items] | |||||||
Debt Instrument, Face Amount | $57,613 | $42,785 | |||||
Debt Instrument, Term | 3 years | 5 years | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.90% | 6.24% |
NOTE_4_NOTES_PAYABLE_Details_S
NOTE 4. NOTES PAYABLE (Details) - Schedule of Maturities of Long-term Debt (USD $) | Dec. 31, 2014 |
Schedule of Maturities of Long-term Debt [Abstract] | |
2015 | $19,015 |
2016 | 569,573 |
2017 | 6,651 |
Total | $595,239 |
NOTE_5_EQUITY_Details
NOTE 5. EQUITY (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||
Oct. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 05, 2013 | Jun. 01, 2014 | Jan. 27, 2014 | Mar. 31, 2014 | Aug. 05, 2014 | Jun. 30, 2014 | Dec. 15, 2014 | 28-May-14 | Feb. 28, 2015 | Oct. 02, 2013 | Apr. 30, 2013 | Mar. 31, 2013 | Jun. 02, 2014 | Oct. 31, 2012 | Mar. 31, 2012 | |
acre | acre | acre | ||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | ||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 1,000,000 | |||||||||||||||||||
Stock Repurchased and Retired During Period, Value (in Dollars) | ($900) | |||||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 20,000 | |||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | 5,400 | 412,000 | 36,322 | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 488,895 | |||||||||||||||||||
Share-based Compensation (in Dollars) | 700,303 | 36,322 | ||||||||||||||||||
Class of Warrant or Right, Granted | 2,608,445 | |||||||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 100,000 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | $0.13 | |||||||||||||||||||
Common Stock, Shares, Outstanding | 19,353,152 | 14,178,041 | ||||||||||||||||||
Common Stock, Shares, Issued | 19,353,152 | 14,178,041 | ||||||||||||||||||
Board of Directors Chairman [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 200,000 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | vest in equal quarterly increments over the course of twelve months beginning on November 5, 2013 | |||||||||||||||||||
Board of Directors Chairman [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 300,000 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | vest upon the Company’s attainment of certain production milestones, in increments of 100,000 shares per occurrence | |||||||||||||||||||
Board of Directors Chairman [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 500,000 | |||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | 135,000 | |||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | 0.27 | |||||||||||||||||||
Share-based Compensation (in Dollars) | 32,104 | 21,896 | ||||||||||||||||||
Chief Executive Officer [Member] | Restricted Stock [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation (in Dollars) | 118,225 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 800,000 | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | The shares shall be forfeited should the employment agreement be terminated for any reason prior to the conclusion of the initial 18 month term at a rate equal to 44,445 of the shares for each whole month that the employment period is terminated prior to the conclusion of the initial 18 month term. | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 18 months | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures | 44,445 | |||||||||||||||||||
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 100,000 | |||||||||||||||||||
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 100,000 | |||||||||||||||||||
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 100,000 | |||||||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 300,000 | |||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | 81,000 | |||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | 0.27 | |||||||||||||||||||
Share-based Compensation (in Dollars) | 380,000 | |||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 800,000 | |||||||||||||||||||
Employee [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 100,000 | |||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | 700,303 | 27,000 | ||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | vest in equal quarterly increments over the course of twelve months beginning on November 5, 2013 | |||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | 0.27 | |||||||||||||||||||
Share-based Compensation (in Dollars) | 17,974 | 9,026 | ||||||||||||||||||
Director [Member] | Mr. Womack [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 166,667 | |||||||||||||||||||
Director [Member] | Mr. Baker [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 416,675 | |||||||||||||||||||
Director [Member] | Mr. Lytton [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 33,400 | |||||||||||||||||||
Director [Member] | Restricted Stock [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 100,000 | |||||||||||||||||||
Director [Member] | Financing Services Agreement [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Fees and Commissions (in Dollars) | 2,500 | |||||||||||||||||||
Director [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (in Dollars) | 35,000 | |||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $0.12 | |||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 100,000 | |||||||||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Gross | 100,000 | |||||||||||||||||||
Stock Issued During Period, Value, Share-based Compensation, Gross (in Dollars) | 23,000 | |||||||||||||||||||
Chief Operating Officer [Member] | Restricted Stock [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,000,000 | |||||||||||||||||||
Director #2 [Member] | Restricted Stock [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 100,000 | |||||||||||||||||||
Director #3 [Member] | Restricted Stock [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 100,000 | |||||||||||||||||||
Board Advisor [Member] | Restricted Stock [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 100,000 | |||||||||||||||||||
Financing Services Agreement [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $0.33 | |||||||||||||||||||
Commission Rate | 10.00% | |||||||||||||||||||
Class of Warrant, Term of Warrants | 5 years | |||||||||||||||||||
Percentage of Securities Sold | 10.00% | |||||||||||||||||||
Class of Warrant or Rights, Exercise Price, Percentage | 110.00% | |||||||||||||||||||
Class of Warrant or Right, Granted | 8,334 | |||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 400,000 | |||||||||||||||||||
Lease Assignment in Milam County, Texas [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Oil and Gas Property, Working Interest | 100.00% | |||||||||||||||||||
Oil and Gas Property, Net Revenue Interest | 75.00% | |||||||||||||||||||
Area of Land (in Acres) | 623.29 | 623 | 2.5 | 200 | ||||||||||||||||
Stock Issued During Period, Shares, Other | 500,000 | |||||||||||||||||||
Stock Issued During Period, Value, Other (in Dollars) | 395,000 | |||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $0.38 | |||||||||||||||||||
Other Commitments, Description | royalties of 1/6th of the production from the leased premises to be paid to Noack | |||||||||||||||||||
Operating Leases, Rent Expense (in Dollars) | 3,116 | |||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions | 100,000 | 100,000 | 500,000 | |||||||||||||||||
Stock Repurchased One [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 1,600,000 | |||||||||||||||||||
Stock Repurchased and Retired During Period, Value (in Dollars) | 100 | |||||||||||||||||||
Stock Repurchased Two [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 2,031,707 | |||||||||||||||||||
Stock Repurchased and Retired During Period, Value (in Dollars) | 900 | |||||||||||||||||||
Stock Repurchased Three [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 45,000 | |||||||||||||||||||
Stock Repurchased Four [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Repurchased and Retired During Period, Shares | 20,000 | |||||||||||||||||||
Private Placement [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 2,600,111 | |||||||||||||||||||
Unit Description | The shares were all purchased at a price of $0.30 per share and include warrants to purchase additional shares (one-for-one) at $0.75 per share any time before August 5, 2019. | |||||||||||||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $0.30 | |||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $0.75 | |||||||||||||||||||
Research and Development Expense [Member] | ||||||||||||||||||||
NOTE 5. EQUITY (Details) [Line Items] | ||||||||||||||||||||
Share-based Compensation (in Dollars) | $19,000 | |||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 |
NOTE_5_EQUITY_Details_Schedule
NOTE 5. EQUITY (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Abstract] | ||
Warrants Outstanding | 4,170,111 | 1,570,000 |
Warrants Outstanding, Weighted Average Exercise Price | $0.77 | $0.80 |
Warrants Outstanding, Aggregate Intrinsic Value | $0 | $0 |
Warrants Outstanding, Weighted Average Remianing Contractual Term | 6 years 36 days | 8 years 219 days |
Granted | 2,608,445 | |
Granted | $0.75 | |
Granted | 4 years 6 months | |
Exercised | 0 | |
Exercised | $0 | |
Expired | -8,334 | |
Expired | $0 |
NOTE_7_OIL_AND_GAS_ACQUISITION1
NOTE 7. OIL AND GAS ACQUISITIONS (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||||
Oct. 02, 2013 | Jun. 30, 2013 | Apr. 30, 2013 | Oct. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2012 | Oct. 02, 2013 | |
acre | acre | acre | acre | |||||
NOTE 7. OIL AND GAS ACQUISITIONS (Details) [Line Items] | ||||||||
Debt Instrument, Collateral | Four of these wells have been pledged as collateral for the convertible notes payable more fully discussed in Note 4. | |||||||
Lease Assignment in Milam County, Texas [Member] | ||||||||
NOTE 7. OIL AND GAS ACQUISITIONS (Details) [Line Items] | ||||||||
Gas and Oil Area, Developed, Gross (in Acres) | 623.29 | 440 | 2.5 | 200 | 623.29 | |||
Payments to Acquire Oil and Gas Property | $3,116.45 | $10 | $475,000 | |||||
Development Wells Drilled, Net Productive | 16 | 6 | ||||||
Exploration and Production Costs | 2,125,685 | |||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 100,000 | 100,000 | 500,000 | |||||
Oil and Gas Property, Working Interest | 100.00% | |||||||
Oil and Gas Property, Net Revenue Interest | 75.00% | |||||||
Other Commitments, Description | royalties of 1/6th of the production from the leased premises to be paid to Noack | |||||||
Other Commitment | $1,000 |
NOTE_8_ASSET_RETIREMENT_OBLIGA2
NOTE 8. ASSET RETIREMENT OBLIGATIONS (Details) - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Inflation rate (avg.) | 10.00% | 10.00% |
Asset Retirement Obligation Costs [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Inflation rate (avg.) | 1.30% | |
Estimated asset life | 18 years |
NOTE_8_ASSET_RETIREMENT_OBLIGA3
NOTE 8. ASSET RETIREMENT OBLIGATIONS (Details) - Schedule of Asset Retirement Obligations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
NOTE 8. ASSET RETIREMENT OBLIGATIONS (Details) - Schedule of Asset Retirement Obligations [Line Items] | ||
Additional retirement obligations incurred | $19,418 | $45,763 |
Accretion expense | 1,872 | 8,592 |
Asset Retirement Obligation Costs [Member] | ||
NOTE 8. ASSET RETIREMENT OBLIGATIONS (Details) - Schedule of Asset Retirement Obligations [Line Items] | ||
Asset retirement obligations | 12,804 | 52,644 |
Obligations assumed in acquisition | 0 | 0 |
Additional retirement obligations incurred | 19,418 | 26,345 |
Change in estimate | 66,081 | -74,777 |
Accretion expense | 1,872 | 8,592 |
Settlements | 0 | 0 |
Asset retirement obligations | $100,175 | $12,804 |
NOTE_9_INCOME_TAXES_Details
NOTE 9. INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Income Tax Expense (Benefit) | $0 | $0 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |
Tax Adjustments, Settlements, and Unusual Provisions | 148,014 | |
Operating Loss Carryforwards | $4,200,000 | |
Operating Loss Carryforwards, Expiration Date 1 | 2032 |
NOTE_9_INCOME_TAXES_Details_Sc
NOTE 9. INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Income tax expense computed at statutory rates | ($603,209) | ($304,646) |
Non-deductible items | 468,253 | 24,823 |
Change in valuation allowance | 134,956 | 279,823 |
Total | $0 | $0 |
NOTE_9_INCOME_TAXES_Details_Sc1
NOTE 9. INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Gross Values [Member] | ||
Deferred tax assets | ||
Book Impairment | $0 | $0 |
Net operating loss carryforwards | 4,235,227 | 3,417,844 |
Asset retirement obligation | 0 | 0 |
Other | 0 | 6,000 |
Total deferred tax assets | 4,235,227 | 3,423,844 |
Deferred tax liabilities | ||
O&G Properties | -1,631,976 | -1,280,525 |
Other | 0 | 0 |
Total deferred tax liabilities | -1,631,976 | -1,280,525 |
Less: Valuation allowance | -2,603,251 | -2,143,319 |
Net deferred tax assets (liabilities) | 0 | 0 |
Tax Effect [Member] | ||
Deferred tax assets | ||
Book Impairment | 0 | 0 |
Net operating loss carryforwards | 1,482,329 | 1,196,245 |
Asset retirement obligation | 0 | 0 |
Other | 0 | 2,100 |
Total deferred tax assets | 1,482,329 | 1,198,345 |
Deferred tax liabilities | ||
O&G Properties | -571,192 | -448,184 |
Other | 0 | 0 |
Total deferred tax liabilities | -571,192 | -448,184 |
Less: Valuation allowance | -911,137 | -750,161 |
Net deferred tax assets (liabilities) | $0 | $0 |
NOTE_10_SUPPLEMENTAL_INFORMATI2
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Fair Value Inputs, Discount Rate | 10.00% | 10.00% |
NOTE_10_SUPPLEMENTAL_INFORMATI3
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) - Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property acquisitions | ||
Unevaluated | $0 | $0 |
Evaluated | 0 | 0 |
Exploration | 0 | 0 |
Development | 675,426 | 756,219 |
Total Costs Incurred | $675,426 | $756,219 |
NOTE_10_SUPPLEMENTAL_INFORMATI4
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) - Capitalized Costs Relating to Oil and Gas Producing Activities Disclosure (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Capitalized costs | ||
Unevaluated properties | $0 | $0 |
Evaluated properties | 3,715,779 | 2,954,854 |
3,715,779 | 2,954,854 | |
Less: Accumulated DD&A | -251,185 | -102,091 |
Net capitalized costs | $3,464,594 | $2,852,763 |
NOTE_10_SUPPLEMENTAL_INFORMATI5
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) - Schedule of Proved Developed and Undeveloped Oil and Gas Reserve Quantities | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
bbl | bbl | |
Oil | ||
Balance | 226,600 | 219,614 |
Revisions of prior estimates | -59,218 | -8,537 |
Purchases of reserves in place | 142,080 | 18,991 |
Production | -7,562 | -3,468 |
Balance | 301,900 | 226,600 |
NOTE_10_SUPPLEMENTAL_INFORMATI6
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) - Schedule of Proved Developed and Undeveloped Oil and Gas Reserve Quantities | Dec. 31, 2014 | Dec. 31, 2013 |
bbl | bbl | |
Schedule of Proved Developed and Undeveloped Oil and Gas Reserve Quantities [Abstract] | ||
Estimated Quantities of Proved Developed Reserves b Oil (Bbls) | 79,100 | 29,900 |
Estimated Quantities of Proved Undeveloped Reserves b Oil (Bbls) | 222,800 | 196,700 |
NOTE_10_SUPPLEMENTAL_INFORMATI7
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) - Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure [Abstract] | |||
Future cash inflows | $27,417,550 | $21,168,740 | |
Future production costs | -14,381,500 | -7,050,170 | |
Future development costs | -2,507,000 | -2,060,100 | |
Future income taxes | 0 | 0 | |
Future net cash flows | 10,529,050 | 12,058,470 | |
Discount of future net cash flows at 10% per annum | -4,225,170 | -4,091,920 | |
Standardized measure of discounted future net cash flows | $6,303,880 | $7,966,550 | $4,440,757 |
NOTE_10_SUPPLEMENTAL_INFORMATI8
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) - Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure (Parentheticals) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Standardized Measure of Discounted Future Cash Flows Relating to Proved Reserves Disclosure [Abstract] | ||
Discount of future net cash flows | 10.00% | 10.00% |
NOTE_10_SUPPLEMENTAL_INFORMATI9
NOTE 10. SUPPLEMENTAL INFORMATION RELATING TO OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (Details) - Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows [Abstract] | ||
Beginning of year | $7,966,550 | $4,440,757 |
Sales and transfers of oil & gas produced, net of production costs | -392,979 | -144,845 |
Net changes in prices and production costs | -1,454,390 | 808,717 |
Development costs incurred | 675,426 | 829,168 |
Changes in estimated future development costs | -1,896,600 | 316,612 |
Acquisitions of minerals in place, net of production costs | 2,966,532 | 1,183,256 |
Revision of previous estimates | -867,355 | -180,497 |
Change in discount | 796,655 | 444,076 |
Change in production rate or other | -1,489,959 | 269,306 |
End of year | $6,303,880 | $7,966,550 |
NOTE_11_SUBSEQUENT_EVENTS_Deta
NOTE 11. SUBSEQUENT EVENTS (Details) (Immediate Family Member of Management or Principal Owner [Member], Subsequent Event [Member], USD $) | 0 Months Ended | |
12-May-15 | 12-May-15 | |
Immediate Family Member of Management or Principal Owner [Member] | Subsequent Event [Member] | ||
NOTE 11. SUBSEQUENT EVENTS (Details) [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 1,630,000 | |
Sale of Stock, Price Per Share | $0.08 | $0.08 |
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% |