Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | May 26, 2021 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Petrolia Energy Corp | ||
Entity Central Index Key | 0001368637 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 6,202,203 | ||
Entity Common Stock, Shares Outstanding | 176,991,222 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 34,513 | $ 13,779 |
Accounts receivable | 5,000 | |
Other current assets | 135,195 | 255,180 |
Total current assets | 174,708 | 268,959 |
Oil and gas, on the basis of full cost accounting | ||
Evaluated properties | 12,913,972 | 12,794,285 |
Furniture, equipment & software | 201,110 | 201,110 |
Less accumulated depreciation, depletion and impairment | (1,663,994) | (586,488) |
Net property and equipment | 11,451,088 | 12,408,907 |
Other assets | ||
Other Asset | 944,055 | |
Total assets | 12,569,851 | 12,677,866 |
Current liabilities | ||
Accounts payable | 598,028 | 264,654 |
Accounts payable - related parties | 25,587 | 42,494 |
Accrued liabilities | 677,891 | 608,357 |
Accrued liabilities - related parties | 1,053,564 | 649,633 |
Notes payable | 653,540 | 335,877 |
Notes payable - related parties | 983,291 | 610,748 |
Total current liabilities | 3,991,901 | 2,511,763 |
Asset retirement obligations | 1,723,364 | 1,509,622 |
Notes payable | 1,443,538 | 725,999 |
Derivative liability | 24,509 | 37,013 |
Total liabilities | 7,183,312 | 4,784,397 |
Stockholders' equity | ||
Preferred stock, $0.001 par value; 1,000,000 shares authorized; 199,100 and 199,100 shares issued and outstanding | 199 | 199 |
Common stock, $0.001 par value; 400,000,000 shares authorized; 164,548,726 and 162,673,726 shares issued and outstanding | 164,549 | 162,674 |
Additional paid in capital | 57,985,359 | 57,253,595 |
Shares to be issued | 55,375 | |
Accumulated other comprehensive income | (218,565) | 8,273 |
Accumulated deficit | (52,600,378) | (49,531,272) |
Total stockholders' equity | 5,386,539 | 7,893,469 |
Total liabilities and stockholders' equity | $ 12,569,851 | $ 12,677,866 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 199,100 | 199,100 |
Preferred stock, shares outstanding | 199,100 | 199,100 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 164,548,726 | 162,673,726 |
Common stock, shares outstanding | 164,548,726 | 162,673,726 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenue | $ 2,916,734 | $ 1,173,060 |
Operating expenses | ||
Lease operating expense | 3,382,133 | 1,537,405 |
Production tax | 4,966 | 4,014 |
General and administrative expenses | 1,412,249 | 4,827,429 |
Depreciation, depletion and amortization | 1,037,019 | 486,671 |
Asset retirement obligation accretion | 149,624 | 27,971 |
Impairment of oil and gas properties | 2,322,255 | |
Impairment of intangible assets | 49,886 | |
Total operating expenses | 5,985,991 | 9,255,631 |
Loss from operations | (3,069,256) | (8,082,571) |
Other income (expenses) | ||
Loss on disposal of equipment | (13,783) | |
Interest expense | (279,141) | (156,861) |
Foreign exchange gain | 62,004 | 14,671 |
Loss on related party debt settlement of accrued salaries | (203,349) | |
Change in fair value of derivative liabilities | 12,504 | (7,001) |
Gain on settlement of accrued compensation | 92,750 | |
Gain on sale of assets | 280,000 | |
Loss on debt extinguishment | (260,162) | |
Loss on acquisition and disposition of Bow Energy Ltd. | (29,319,554) | |
Other income | 10,242 | |
Total other income (expense) | 178,359 | (29,946,039) |
Net loss before taxes | (2,890,898) | (38,028,610) |
Income tax provision (benefit) | ||
Net loss | (2,890,898) | (38,028,610) |
Series A preferred dividends | (178,208) | (179,279) |
Net loss attributable to common stockholders | $ (3,069,106) | $ (38,207,889) |
Loss per share | ||
(Basic and fully diluted) | $ (0.02) | $ (0.21) |
Weighted average number of common shares outstanding, basic and diluted | 162,673,726 | 184,564,874 |
Other comprehensive income (loss) | ||
Foreign currency translation adjustments | $ (226,838) | $ 8,273 |
Comprehensive loss | (3,295,944) | (38,020,337) |
Oil and Gas Sales [Member] | ||
Total revenue | $ 2,916,734 | $ 1,173,060 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (2,890,898) | $ (38,028,610) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depletion, depreciation and amortization | 1,037,019 | 486,671 |
Asset retirement obligation accretion | 149,624 | 27,971 |
Bad debt expense | 25,000 | |
Amortization of debt discount | 13,148 | |
Loss on related party debt settlement of accrued salaries | 203,349 | |
Change in fair value of derivative liabilities | (12,504) | 7,001 |
Loss on extinguishment of debt | 260,162 | |
Equity settled finance fees | 112,773 | |
Warrant expense related to business combination | 72,037 | 103,632 |
Stock-based compensation expense | 473,353 | 3,451,739 |
Gain on settlement of accrued salaries | (92,750) | |
Gain on extinguishment of debt | (32,600) | |
Gain on sale of assets | (280,000) | |
Loss on acquisition and disposition of Bow Energy Ltd. | 29,319,554 | |
Loss on disposal of equipment | 13,783 | |
Impairment of oil and gas properties | 2,322,255 | |
Impairment of intangible assets | 49,886 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (5,000) | (211,332) |
Prepaids | 1,379 | |
Other current assets | (6,187) | |
Deposits | 240,000 | |
Accounts payable | 333,375 | 248,013 |
Accounts payable - related parties | (16,907) | (14,794) |
Accrued liabilities | (108,676) | 354,410 |
Accrued liabilities - related parties | 513,681 | (104,560) |
Net cash used in operating activities | (845,719) | (1,139,087) |
Cash Flows from Investing Activities | ||
Purchase of working interest in Canadian Properties | (944,055) | (932,441) |
Sale of NOACK property | 120,000 | 135,000 |
Proceeds from 2nd NOACK sale | 375,000 | |
Net cash acquired in acquisition of Bow Energy Ltd. | 3,784 | |
Net cash disposed of in sale of Bow Energy Ltd. | (4,003) | |
Cash used in investing activities | (449,055) | (797,660) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 30,000 | 397,500 |
Proceeds from exercise of warrants | 179,675 | |
Proceeds from issuance of preferred stock | 20,000 | |
Proceeds from notes payable | 1,225,000 | 1,000,000 |
Repayments of notes payable | (7,096) | (41,325) |
Proceeds from related party notes payable | 797,793 | 494,477 |
Repayments of related party notes payable | (558,726) | (194,104) |
Shares to be issued | 55,375 | |
Cash provided by financing activities | 1,542,346 | 1,856,223 |
Foreign exchange | (226,838) | 11,710 |
Net change in cash | 20,734 | (68,814) |
Cash at beginning of period | 13,779 | 82,593 |
Cash at end of period | 34,513 | 13,779 |
SUPPLEMENTAL DISCLOSURES | ||
Interest paid | 82,657 | 28,057 |
Income taxes paid | ||
NON-CASH INVESTING AND FINANCIAL DISCLOSURES | ||
Settlement of related party accrued liabilities for common shares | 17,000 | |
Settlement of notes payable related party for common shares | 113,000 | |
Assumption of note payable by related party | 125,000 | |
Common shares issued for acquisition of Bow Energy Ltd. (Note 4) | 34,607,088 | |
Shares cancelled as proceeds in sale of Bow Energy Ltd. (Note 5) | 4,956,519 | |
Debt discount from warrant issuance | 38,249 | |
Settlement of accrued salaries for related parties with common shares | 61,621 | |
Settlement of account payable - related parties for common shares, related party | 102,590 | |
Accrued Series A preferred dividends | 178,208 | 179,279 |
Proceeds from notes payable paid directly by the related party creditor to seller for acquisition of working interests | 313,775 | |
Warrants exercised with proceeds satisfied through settlement of debt | 60,000 | |
Note receivable recognized on sale of oil and gas property | $ 240,000 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Shares To Be Issued [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 197 | $ 111,698 | $ 22,730,974 | $ (11,323,383) | $ 11,519,486 | ||
Balance, shares at Dec. 31, 2017 | 19,100 | 111,698,222 | |||||
Preferred shares issued | $ 2 | 19,998 | 20,000 | ||||
Preferred shares issued, shares | 2,000 | ||||||
Common shares issued | $ 3,750 | 393,750 | 397,500 | ||||
Common shares issued, shares | 3,750,000 | ||||||
Exercise of warrants | $ 3,910 | 338,355 | 342,265 | ||||
Exercise of warrants, shares | 3,910,000 | ||||||
Shares issued to settle liabilities | $ 1,216 | 479,267 | 480,483 | ||||
Shares issued to settle liabilities, shares | 1,216,209 | ||||||
Stock-based compensation | $ 6,750 | 3,459,626 | 3,466,376 | ||||
Stock-based compensation, shares | 6,750,000 | ||||||
Warrants issued as financing fees | 112,773 | 112,773 | |||||
Acquisition of Bow Energy Ltd. | $ 106,157 | 34,500,931 | 34,607,088 | ||||
Acquisition of Bow Energy Ltd., shares | 106,156,712 | ||||||
Warrants issued related to acquisition of Bow Energy Ltd. | 103,633 | 103,633 | |||||
Sale of Bow Energy Ltd. | $ (70,807) | (4,885,712) | (4,956,519) | ||||
Sale of Bow Energy Ltd., shares | (70,807,417) | ||||||
Series A preferred dividends | (179,279) | (179,279) | |||||
Other comprehensive income (loss) | 8,273 | 8,273 | |||||
Net loss | (38,028,610) | (38,028,610) | |||||
Balance at Dec. 31, 2018 | $ 199 | $ 162,674 | 57,253,595 | 8,273 | (49,531,272) | 7,893,469 | |
Balance, shares at Dec. 31, 2018 | 199,100 | 162,673,726 | |||||
Common shares issued | $ 1,875 | 148,125 | 150,000 | ||||
Common shares issued, shares | 1,875,000 | ||||||
Stock-based compensation | 473,353 | 473,353 | |||||
Warrants issued as financing fees | 72,037 | 72,037 | |||||
Series A preferred dividends | (178,208) | (178,208) | |||||
Shares to be issued | $ 55,375 | 55,375 | |||||
Warrants issued for loans | 38,249 | 38,249 | |||||
Other comprehensive income (loss) | (226,838) | (226,838) | |||||
Net loss | (2,890,898) | (2,890,898) | |||||
Balance at Dec. 31, 2019 | $ 199 | $ 164,549 | $ 57,985,359 | $ 55,375 | $ (218,565) | $ (52,600,378) | $ 5,386,539 |
Balance, shares at Dec. 31, 2019 | 199,100 | 164,548,726 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Petrolia Energy Corporation (the “Company”) is in the business of oil and gas exploration, development and production. 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 United States Securities and Exchange Commission (“SEC”). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Askarii Resources and Petrolia Canada Corporation. All significant intercompany balances and transactions have been eliminated upon consolidation. The Company accounts for its investment in companies in which it has significant influence by the equity method. The Company’s proportionate share of earnings is included in earnings and added to or deducted from the cost of the investment. Foreign currency translation The functional and reporting currency of the Company is the United States dollar. The functional currencies of the Company’s wholly-owned subsidiaries, Askarii Resources and Petrolia Canada Corporation, are the United States dollar and the Canadian dollar, respectively. Transactions involving foreign currencies are converted into the Company’s functional currency using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the Company’s functional currency are translated using exchange rates at that date. Exchange gains and losses are included in net earnings. On consolidation, Petrolia Canada Corporation’s income statement amounts are translated at average exchange rates for the year, while the assets and liabilities are translated at year-end exchange rates. Translation adjustments are accumulated as a separate component of stockholders’ equity in other comprehensive income. 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 depreciation of furniture, equipment and software, asset retirement obligations (“AROs”) (Note 10), income taxes (Note 14) and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom (Note 16). 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. At December 31, 2019, the Company did not hold any cash equivalents. Receivables and allowance for doubtful accounts Oil revenues receivable do not bear any interest. These receivables are primarily comprised of joint interest billings. Management regularly reviews collectability and establishes or adjusts 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. 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 un-weighted 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. 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. 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. Management performs ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. Maintenance and repairs are expensed as incurred. Management periodically reviews 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. The Company recognizes 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. Derivative financial instruments The Company’s derivative financial instruments consist of warrants with an exercise price denominated in a currency other than the Company’s functional currency. These derivative financial instruments are measured at their fair value at the end of each reporting period. Changes in fair value are recorded in net income. Asset retirement obligations The Company records a liability for Asset Retirement Obligations (“AROs”) 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 presented as a direct deduction from the carrying value of the related debt and amortized over the term of the related debt. Revenue recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Revenue from contracts with customers The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products. Performance obligations and significant judgments The Company sells oil and natural gas products in the United States through a single reportable segment. The Company enters into contracts that generally include one type of distinct product in variable quantities and priced based on a specific index related to the type of product. The oil and natural gas is typically sold in an unprocessed state to processors and other third parties for processing and sale to customers. The Company recognizes revenue at a point in time when control of the oil or natural gas passes to the customer or processor, as applicable, discussed below. For oil sales, control is typically transferred to the customer upon receipt at the wellhead or a contractually agreed upon delivery point. Under our natural gas contracts with processors, control transfers upon delivery at the wellhead or the inlet of the processing entity’s system. For our other natural gas contracts, control transfers upon delivery to the inlet or to a contractually agreed upon delivery point. In the cases where the Company sells to a processor, management has determined that the Company is the principal in the arrangement and the processors are customers. The Company recognizes the revenue in these contracts based on the net proceeds received from the processor. Transfer of control drives the presentation of transportation and gathering costs within the accompanying consolidated statements of operations. Transportation and gathering costs incurred prior to control transfer are recorded within the transportation and gathering expense line item on the accompanying consolidated statements of operations, while transportation and gathering costs incurred subsequent to control transfer are recorded as a reduction to the related revenue. A portion of our product sales are short-term in nature. For those contracts, the Company uses the practical expedient in Accounting Standards Codification (“ASC”) 606-10-50-14 exempting us from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For our product sales that have a contract term greater than one year, the Company has utilized the practical expedient in ASC 606-10-50-14(a) which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to an unsatisfied performance obligation. Under these sales contracts, each unit of product represents a separate performance obligation; therefore, future volumes are unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. The Company has no unsatisfied performance obligations at the end of each reporting period. Management does not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. There is a low level of uncertainty due to the precision of measurement and use of index-based pricing with predictable differentials. Additionally, any variable consideration identified is not constrained. Stock-based compensation The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718. Stock-based compensation Income taxes Income taxes are accounted for pursuant to ASC 740, Income Taxes 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, 2019 and 2018. The Company is required to file federal income tax returns in the United States and Canada, and in various state and local jurisdictions. The Company’s tax returns filed since the 2018 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. Earnings (loss) per share Basic earnings (loss) per share has been calculated based on the weighted-average number of common shares outstanding. The treasury stock method is used to compute the dilutive effect of the Company’s share-based compensation awards. Under this method, the incremental number of shares used in computing diluted earnings per share (“EPS”) is the difference between the number of shares assumed issued and purchased using assumed proceeds. 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 as all outstanding instruments 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 2019 and 2018. The Company does not require collateral. While the Company believes its recorded receivables 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 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The hierarchy is broken down into three levels based on the observability of inputs as follows: ● Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment; ● Level 2 — Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly; and ● Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows: December 31, 2019 Level 1 Level 2 Level 3 Total Derivative liabilities — — 24,509 24,509 ARO liabilities 1,723,364 1,723,364 December 31, 2018 Derivative liabilities — — 37,013 37,013 ARO liabilities 1,509,622 1,509,622 The carrying value of cash, accounts receivable, other current assets, accounts payable, accounts payable – related parties, accrued liabilities and accrued liabilities – related parties, as reflected in the consolidated balance sheets, approximate fair value, due to the short-term maturity of these instruments. The carrying value of notes payable approximates their fair value due to immaterial changes in market interest rates and the Company’s credit risk since issuance of the instruments or due to their short-term nature. Derivative liabilities are remeasured at fair value every reporting period. The fair values are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, derivative liabilities are considered level 2 financial instruments. Related parties The Audit Committee approves all material related party transactions. The Audit Committee is provided with the details of each new, existing or proposed related party transaction, including the terms of the transaction, the business purpose of the transaction, and the benefits to the Company and the relevant related party. In determining whether to approve a related party transaction, the following factors are considered: (1) if the terms are fair to the Company, (2) if there are business reasons to enter into the transaction, (3) if the transaction would impair independence of an outside Director, or (4) if the transaction would present an improper conflict of interest for any Director or executive officer. Any member of the Audit Committee who has an interest in the transaction will abstain from voting on the approval of the related party transaction. Business combinations In January 2017, the FASB issued ASU 2017-01 Business Combinations Clarifying the Definition of a Business 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. 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 other than those discussed below. Leases In February 2016, the FASB issued ASU 2016-02, “Leases” Under ASU 2016-02, each lease agreement will be evaluated to identify the lease components and non-lease components at lease inception. The total consideration in the lease agreement will be allocated to the lease and non-lease components based on their relative standalone selling prices. In July 2018, the FASB issued ASU 2018-11, “Leases – Targeted Improvements” The Company adopted ASU 2016-02 on January 1, 2019 using the modified retrospective method, whereby a cumulative effect adjustment will be made as of that day with no retrospective effect. The Company applied the package of practical expedients such that for any expired or existing leases it will not reassess lease classification, initial direct costs or whether any expired or existing contracts are or contain leases. Note that the Company had no outstanding leases as of December 19, 2019. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3. GOING CONCERN The Company has suffered recurring losses from operations and currently has a working capital deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company plans to generate profits by reworking its existing oil or gas wells and drilling additional wells, as needed, funding permitting. The Company will need to raise funds through either the sale of its securities, issuance of corporate bonds, joint venture agreements and/or bank financing to accomplish its goals. The Company does not have any commitments or arrangements from any person to provide the Company with any additional capital. If additional financing is not available when needed, we may need to cease operations. The Company may not be successful in raising the capital needed to drill and/or rework existing oil wells. Any additional wells that the Company may drill may be non-productive. Management believes that actions presently being taken to secure additional funding for the reworking of its existing infrastructure will provide the opportunity for the Company to continue as a going concern. Since the Company has an oil producing asset, its goal is to increase the production rate by optimizing its current infrastructure. 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. |
Acquisition of Bow Energy Ltd.,
Acquisition of Bow Energy Ltd., A Related Party | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisition of Bow Energy Ltd., A Related Party | NOTE 4. ACQUISITION OF BOW ENERGY LTD., A RELATED PARTY On February 27, 2018, the Acquisition closed, and we acquired all of the issued and outstanding shares of capital stock of Bow (each a “Bow Share”). The Arrangement was approved at a special meeting of shareholders of Bow held on February 21, 2018. None of the related party shareholders were included in this meeting. The vote was strictly between the non-affiliated shareholders and final approval of the Arrangement was granted by the Court of Queen’s Bench of Alberta on February 23, 2018. BSIH’s Chief Executive Officer, Ilyas Chaudhary, is the father of Petrolia’s CEO, Zel C. Khan. Mr. Chaudhary had a controlling interest in BSIH prior to the acquisition of Bow. Therefore, the Bow acquisition is a related party transaction. Under the terms of the Arrangement, Bow shareholders are deemed to have received 1.15 Petrolia common stock shares for each Bow Share. A total of 106,156,712 shares of the Company’s common stock were issued to the Bow shareholders as a result of the Arrangement, plus additional shares in connection with the rounding described below. The Arrangement provided that no fractional shares would be issued in connection with the Arrangement, and instead, each Bow shareholder otherwise entitled to a fractional interest would receive the nearest whole number of Company shares. For example, where such fractional interest is greater than or equal to 0.5, the number of shares to be issued would be rounded up to the nearest whole number and where such fractional interest is less than 0.5, the number of shares to be issued would be rounded down to the nearest whole number. In calculating such fractional interests, all shares issuable in the name of or beneficially held by each Bow shareholder or their nominee as a result of the Arrangement shall be aggregated. The Arrangement provides that any certificate formerly representing Bow common stock not duly surrendered on or before the last business day prior to the third anniversary of the closing date will cease to represent a claim by, or interest of, any former shareholder of any kind of nature against Bow or the Company and on such date all consideration or other property to which such former holder was entitled shall be deemed to have been surrendered to the Company. The Company also assumed all of the outstanding warrants to purchase shares of common stock of Bow and certain options to purchase shares of common stock of Bow in connection with the Arrangement (i.e., each warrant/option to purchase one (1) share of Bow represents the right to purchase one (1) share of the Company following the closing). At the closing of the Acquisition, the Company issued the Bow shareholders the shares described above and assumed warrants to purchase 320,000 shares of common stock valued at $103,632. A subsidiary of Bow Energy Ltd., Bow Energy Pte. Ltd., owns 75% of the issued and outstanding shares of Renco Elang Energy Pte. Ltd. (“REE”) which owns a 75% working interest in a Production Sharing Contract referred to as “South Block A” (the “Assets” or “SBA”) located onshore, North Sumatra, Indonesia. REE is the operator of the Assets. Effectively, the Company has a 44.48% working interest in the Assets. On May 24, 2017, Bow’s wholly-owned subsidiary, Bow Energy International Holdings Inc. (“BEIH”), acquired all of Bukit Energy Inc.’s shareholding interests in five Singapore holding companies (the “Holding Companies”) that own the interests in four Production Sharing Contracts (“PSCs”) and one non-conventional joint study agreement (“JSA”), all interests are located onshore in Sumatra, Indonesia. The Holding Companies being acquired were Bukit Energy Central Sumatra (Mahato) Pte. Ltd. (“Mahato”), Bukit Energy Palmerah Baru Pte. Ltd. (“Palmerah Baru”), Bukit Energy Resources Palmerah Deep Pte. Ltd. (“Palmerah Deep”), Bukit Energy Bohorok Pte. Ltd. (“Bohorok”), and Bukit Energy Resources North Sumatra Pte. Ltd. (“Bohorok Deep”), collectively referred to as the “Bukit assets”. The Holding Companies own the following interests in the conventional and non-conventional PSCs and non-conventional JSA: ● Bohorok PSC (conventional) – operated 50% participating interest, 465,266 net acres ● Palmerah Baru PSC (conventional) – operated 54% participating interest, 98,977 net acres ● Palmerah Deep PSC (non-conventional)- operated 69.36% participating interest, 170,398 net acres ● Mahato PSC (conventional)- 20% participating interest, 167,115 net acres, non-operated ● Bohorok Deep (non-conventional)- 20.25% participating interest in a JSA, non-operated with option to become operator The fair value of the 106,156,712 common shares issued as consideration for the acquisition of Bow ($34,607,088) was determined based on the acquisition date fair value of the shares. The purchase price allocation can be summarized as follows: Cash $ 3,784 Other current assets 4,763 Deposits 337,997 Furniture, equipment & software 12,059 Unproved properties and properties not subject to amortization and excess purchase price 36,835,553 Accounts payable (1,157,876 ) Note payable $ (1,429,192 ) Acquisition costs included a grant of 100,000 shares ($37,000) of common stock as a bonus for the Bow Energy acquisition at a fair value of $0.37 per share. In addition, the Company incurred $103,632 in transaction costs associated with the issuance of warrants to purchase 320,000 shares of common stock in connection with the transaction. The amount of Bow’s loss included in Petrolia’s consolidated income statement for the year ended December 31, 2018 and the loss of the combined entity had the acquisition date been January 1, 2017, are as follows: Revenue Earnings (Loss) February 28, 2018 to December 31, 2018 $ — $ (211,676 ) Supplemental pro forma from January 1, 2018 to December 31, 2018 — (38,079,663 ) Supplemental pro forma from January 1, 2017 to December 31, 2017 $ 3,103,394 $ (3,961,356 ) |
Disposition of Bow Energy Ltd.,
Disposition of Bow Energy Ltd., A Related Party | 12 Months Ended |
Dec. 31, 2019 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Disposition of Bow Energy Ltd., A Related Party | NOTE 5. DISPOSITION OF BOW ENERGY LTD., A RELATED PARTY Effective August 31, 2018, the Company entered into and closed the transactions contemplated by a Share Exchange Agreement with Blue Sky Resources Ltd. (“Blue Sky” and the “Exchange Agreement”). The President, Chief Executive Officer and 100% owner of Blue Sky is Ilyas Chaudhary, the father of Zel C. Khan, the Company’s Chief Executive Officer. As described above in Note 4, Mr. Chaudhary indirectly owns and controls BSIH, which controlled Bow prior to the acquisition of Bow as described in Note 4. Pursuant to the Exchange Agreement, the Company exchanged 100% of the ownership of Bow, in consideration for: (a) 70,807,417 shares of the Company’s common stock owned and controlled by Mr. Chaudhary and BSIH (the “Blue Sky Shares”); (b) $100,000 in cash (less certain advances paid by Blue Sky or Bow to the Company since April 1, 2018); (c) the assumption of certain payables owed by Bow, including $730,000 owed under the terms of a Loan Agreement, as amended, originally entered into by Bow, but not the subsequent $800,000 borrowed by Bow pursuant to the amendment to the Loan Agreement dated May 9, 2018 (which obligation is documented by a Debt Repayment Agreement); (d) 20% of BEIH, which is wholly-owned by Bow (which entity’s subsidiaries own certain PCSs and certain other participating assets), pursuant to an Assignment Agreement; (e) certain carry rights described in greater detail in the Exchange Agreement, providing for Blue Sky to carry the Company for up to the next $10 million of aggregate costs in BEIH and the PSC assets, with any profits from BEIH being distributed 80% to Bow and 20% to the Company, pursuant to a Petrolia Carry Agreement; and (f) a 3% royalty, after recovery of (i) the funds expended by Bukit Energy Bohorok Pte Ltd, which is wholly-owned by BEIH in the Bohorok, Indonesia PSC since July 1, 2018, plus (ii) $3,546,450 (i.e., ½ of Bow’s share of the prior sunk cost of Bohorok, which royalty is evidenced by an Assignment of Petrolia Royalty. The Exchange Agreement closed on August 31, 2018 and has an effective date of July 1, 2018. The Exchange Agreement contains customary and standard representations and warranties of the parties, indemnification obligations (which survived for six months following the closing) and closing conditions. The Company canceled the Blue Sky Shares following the closing and returned such shares to the status of authorized but unissued shares of common stock. The total consideration received for the sale of Bow is summarized as follows: Cash $ 100,000 Shares returned to treasury (70,807,417 shares at $0.07 per share) 4,956,519 Fair value of retained non-controlling interest (20% of $4,683,893 net liabilities of BEIH) — (1) Total consideration received $ 5,056,519 (1) The fair value of the 70,807,417 common shares returned as part of the consideration paid for Bow was determined on the closing price of the stock on August 31, 2018, which was $0.07 per share, for a fair value of $4,956,519. The retained non-controlling 20% interest in BEIH was initially recognized at fair value with a minimum value of $0 and is accounted for using the equity method. During the year ended December 31, 2018, the Company’s share of loss on its investment in BEIH was $11,247 which was not recorded against the carrying value as the investment is in a net liability position. The carrying value of the investment at December 31, 2018 is $0. The total loss on acquisition and disposition of Bow is summarized as follows: Total consideration paid for the acquisition of Bow $ 34,607,088 Total consideration received for the disposition of Bow (5,056,519 ) Change in net assets of Bow during the ownership period (231,015 ) Loss on acquisition and disposition of Bow $ 29,319,554 |
Evaluated Properties
Evaluated Properties | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Evaluated Properties | NOTE 6. EVALUATED PROPERTIES The acquired properties and current properties can be summarized as follows: Cost Canadian properties US properties Total As at December 31, 2017 — 14,312,580 14,312,580 Additions 1,246,216 — 1,246,216 Dispositions — (3,962,042 ) (3,962,042 ) Asset retirement cost additions 1,313,982 — 1,313,982 Foreign currency translations (116,451) (116,451 ) As at December 31, 2018 $ 2,443,747 $ 10,350,538 $ 12,794,285 Additions — — — Dispositions — — — Asset retirement cost additions — — — Foreign currency translation 119,687 — 119,687 As at December 31, 2019 2,563,434 10,350,538 12,913,972 Accumulated depletion As of December 31, 2017 — 1,068,795 1,068,795 Dispositions — (3,340,779 ) (3,340,779 ) Impairment of oil and gas properties — 2,322,255 2,322,255 Depletion 435,722 11,280 447,002 Foreign currency translations (22,065 ) — (22,065 ) As at December 31, 2018 413,657 61,551 475,208 Dispositions — Impairment of oil and gas properties — Depletion 1,004,832 — 1,004,832 Foreign currency translation 40,487 — 40,487 As at December 31, 2019 $ 1,458,976 61,551 1,520,527 Net book value as at December 31, 2019 $ 1,104,458 $ 10,288,987 $ 11,393,445 Net book value as at December 31, 2018 $ 2,030,090 10,288,987 12,319,077 U.S. Properties – Minerva-Rockdale Field (“NOACK”) Field On November 1, 2018 the Company sold 83% leasehold net revenue interest and 100% working interest in the NOACK Field Assets, i.e., the Company’s leasehold in the Noack Farms, Minera Lease and all related leases and assets located in Milam County, Texas (the “NOACK Assets”) to Crossroads Petroleum LLC (“CP”) for $375,000. The terms of this agreement included $260,000 to be paid as a deposit with the balance of $115,000 to be paid by December 31, 2018. On April 15, 2019, the Company foreclosed on the property since CP did not satisfy all of the contractual payment requirements. On April 15, 2019, the remaining unpaid receivable balance was $120,000 which was written off as a loss on sale of property. Note that previous payments of $255,000 were forfeited to the Company and no reimbursement to CP was made. On August 6, 2019, the Company entered into a Purchase and Sale Agreement (“PSA”) for the sale of the same NOACK property with Flowtex Energy LLC. (“FT”). The purchaser agreed to pay $400,000 for the NOACK Assets including a $20,000 deposit that was received on August 15, 2019 and the remaining balance of $380,000 to be received by September 30, 2019. By December 31, 2019, FT had made cumulative payments of $375,000, resulting in a $25,000 account receivable to the Company at December 31, 2019 which is included in other current assets. The $400,000 was recorded as a gain on sale of properties. U.S. Properties – Slick Unit Dutcher Sands (“SUDS”) Field On July 24, 2018, the Company announced the signing of the Slick Unit Exploration and Development Agreement (the “Development Agreement”) with Boone Operating Inc. (“Boone”), a private Exploration & Production company, to explore and develop the Misener and Simpson Formations at the SUDS Field. The Development Agreement expired and was not renewed. The Company’s primary focus remains to develop the Dutcher Sands formation. The SUDS Field is a 2604-acre lease located in Creek County, 36 miles Southwest of Tulsa, Oklahoma. The field was first discovered in 1918 by SOHIO Oil Company utilizing over 100 wells with the primary objective to produce from the Dutcher Sands at an average well depth of 3,100 ft. U.S. properties – Twin Lakes San Andres Unit (“TLSAU”) Field TLSAU is located 45 miles from Roswell, Chaves County, New Mexico and consists of 3,864 acres with 58 wells. The last independent reserve report prepared by MKM Engineering on December 31, 2019, reflects approximately 752,000 barrels of proven oil reserves remaining for the 100% working interest. Canadian properties – Luseland, Hearts Hill and Cuthbert fields Effective on June 29, 2018, the Company acquired a 25% working interest in approximately 41,526 acres located in the Luseland, Hearts Hill, and Cuthbert fields, located in Southwest Saskatchewan and Eastern Alberta, Canada (collectively, the “Canadian Properties” and the “Working Interest”). The Canadian Properties currently encompass 64 sections, with 240 oil and 12 natural gas wells currently producing on the properties. Additionally, there are several idle wells with potential for reactivation and 34 sections of undeveloped land (approximately 21,760 acres). The Canadian Properties and the Working Interest were acquired from Blue Sky (a related party, as described in Note 5). Blue Sky had previously acquired an 80% working interest in the Canadian Properties from Georox Resources Inc., who had acquired the Canadian Properties from Cona Resources Ltd. and Cona Resources Partnership prior to the acquisition by the Company. The effective date of the acquisition was June 1, 2018. The acquisition of the Canadian Properties was evidenced and documented by a Memorandum of Understanding between the Company and Blue Sky dated June 29, 2018 and a Conveyance between the parties dated as of the same date, pursuant to which the Company agreed to acquire the Working Interest in consideration for $1,428,581 in Canadian dollars (“CAD”) (approximately $1,096,216 in U.S. dollars) of which CAD $1,022,400 (approximately $782,441 in U.S. dollars) was paid in cash (the “Cash Payment”) and CAD $406,181 (approximately $313,775 in U.S. dollars) was evidenced by a promissory note (the “Acquisition Note”). The Cash Payment was made with funds borrowed by the Company pursuant to the terms of that certain $1,530,000 May 9, 2018, Amended and Restated Loan Agreement entered into with Bow and a third party (the “Loan Agreement” and the “Lender”). The amount owed under the Loan Agreement accrues interest at the rate of 12% per annum (19% upon the occurrence of an event of default) and is due and payable on May 11, 2021. The Working Interest will be held in the name of the Company’s wholly-owned Alberta, Canada, subsidiary, Petrolia Canada Corporation. The Acquisition Note (Note 8), which was dated June 8, 2018, bears interest at the rate of 9% per annum, beginning on August 1, 2018 and is due and payable on November 30, 2018, provided that the Company has the right to extend the maturity date for a period six months with 10 days’ notice to Blue Sky, in the event the Company pays 25% of the principal amount of the Acquisition Note at the time of extension. On September 17, 2018, the Company entered into a Memorandum of Understanding (“MOU”) with Blue Sky. Pursuant to the MOU, the Company obtained the rights to acquire an additional 3% working interest in the Canadian Properties, increasing our Working Interest to 28%. Total consideration paid from the Company to Blue Sky for the additional 3% Working Interest was $150,000. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 7. NOTES PAYABLE Interest rate Date of maturity December 31, 2019 December 31, 2018 Backhoe loan (i) 2.9 % May 8, 2017 $ — $ 32,601 Truck loan (ii) 5.49 % January 20, 2022 16,141 23,237 Credit note I (iii) 12 % May 11, 2021 800,000 800,000 Credit note II (iv) 12 % October 17, 2019 346,038 196,038 Credit note III (v) 15 % April 25, 2021 750,000 — Discount on credit note III — — (25,101 ) — Mark Allen (not related party at balance sheet date) 12 % June 30, 2021 200,000 — M. Hortwitz 10 % October 14, 2016 10,000 10,000 2,097,078 1,061,876 Current portion: Truck loan 7,502 15,999 Credit note I 90,000 710,000 Credit note II 346,038 — Mark Allen 200,000 — M. Hortwitz 10,000 — Current portion of notes payable $ 653,540 $ 725,999 (i) On May 8, 2014, the Company, purchased a backhoe. The Company assumed an installment note in the amount of $57,613 for a term of three years and interest at 2.9% per annum. The backhoe was returned to the seller, consequently the outstanding debt balance of $32,601 was forgiven in 2019. (ii) On January 6, 2017, the Company purchased a truck and entered into an installment note in the amount of $35,677 for a term of five years and interest at 5.49% per annum. Payments of principal and interest in the amount of $683 are due monthly. (iii) On May 9, 2018, Bow entered into an Amended and Restated Loan Agreement with a third party. The Loan Agreement increased by $800,000 the amount of a previous loan agreement entered into between Bow and the Lender, to $1,530,000. The amount owed under the Loan Agreement accrues interest at the rate of 12% per annum (19% upon the occurrence of an event of default) and is due and payable on May 11, 2021, provided that the amount owed can be prepaid prior to maturity, beginning 60 days after the date of the Loan Agreement, provided that the Company gives the Lender 10 days’ notice of our intent to repay and pays the Lender the interest which would have been due through the maturity date at the time of repayment. The Loan Agreement contains standard and customary events of default, including cross defaults under other indebtedness obligations of us and Bow, and the occurrence of any event which would have a material adverse effect on us or Bow. The Company is required to make principal payments of $10,000 per month from January through September 2019 with the remaining balance of $710,000 due at maturity on May 11, 2021. The additional $800,000 borrowed in connection with the entry into the Loan Agreement was used by the Company to acquire the Working Interest in the Canadian Properties described in Note 6. In order to induce the Lender to enter into the Loan Agreement, the Company agreed to issue the Lender 500,000 shares of restricted common stock (the “Loan Shares”), which were issued on May 18, 2018, and warrants to purchase 2,320,000 shares of common stock (the “Loan Warrants”), of which warrants to purchase (a) 320,000 shares of common stock have an exercise price of $0.10 per share in Canadian dollars and expire in May 15, 2021, (b) 500,000 shares of common stock have an exercise price of $0.12 per share in U.S. dollars, and expire on May 15, 2021; and (c) 1,500,000 shares of common stock have an exercise price of $0.10 per share in U.S. dollars and expire on May 15, 2020. The fair value of the 500,000 common shares issued were assessed at the market price of the stock on the date of issuance and valued at $47,500. The fair value of the Canadian dollar denominated warrants issued were assessed at $30,012 using the Black Scholes Option Pricing Model. The fair value of the U.S. dollar denominated warrants issued were assessed at $182,650 using the Black Scholes Option Pricing Model. The Company determined the debt modification to be an extinguishment of debt and recorded a total loss on extinguishment of debt of $260,162. Upon the disposition of Bow pursuant to the Exchange Agreement described under Note 5, a total of $730,000 of the obligations owed under the Loan Agreement were transferred to Blue Sky. (iv) On September 17, 2018, the Company entered into a loan agreement (LOC) with a third party for $200,000 (which was later increased to $500,000) to acquire an additional 3% working interest in the Canadian Properties (See Note 6). The loan bears interest at 3.5% per annum and has a maturity date of October 17, 2019. Payments of principal and interest in the amount of $6,000 are due monthly. The loan is secured against the Company’s 3% Working Interest in the Canadian Properties and has no financial covenants. During 2019, the LOC balance increased by $150,000 resulting in a $346,038 ending balance. (v) On April 25, 2019, the Company entered into a promissory note (an Acquisition Note”) with a third party in the amount of $750,000 to acquire working interests in the Utikuma oil field in Alberta Canada. The Note bears interest at 15% per annum and is due in full at maturity at April 25, 2021. No payments are required on the note until maturity while interest is accrued. In addition, warrants to purchase 500,000 shares of common stock with an exercise price of $0.012 per share expiring on May 1, 2021 were issued associated with the note and were recorded as a debt discount on the balance sheet. The notes hold a security guarantee of a 50% Working Interest in the Utikima oil field and a 100% Working Interest in the Twin Lakes Properties. During 2019, the Company entered into a loan agreement in the amount of $200,000 with a third party. The note bears interest at an interest rate of 12% per annum and matures on June 30, 2021. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 2,500,000 shares of common stock at $0.08 per share. In addition, upon conversion, the note holder will also receive 10,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. On January 15, 2019, the Company entered into a loan agreement in the amount of $125,000 with a third party. The note bore interest at an interest rate of $4% per annum and was to mature on January 15, 2020. On September 30, 2019, Jovian Petroleum Corporation reimbursed the $125,000 to the third party. Consequently, the $125,000 debt balances was transferred into the Jovian LOC and is now included in the $362,583 at December 31, 2019 (see Note 8: Related Party Notes Payable) The following is a schedule of future minimum repayments of notes payable as of December 31: 2020 653,540 2021 1,442,966 2022 572 Thereafter — $ 2,097,078 |
Related Party Notes Payable
Related Party Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Notes Payable | NOTE 8. RELATED PARTY NOTES PAYABLE The chart below summarizes the related party Notes Payable as of December 31, 2019 and 2018. Interest rate Date of maturity December 31, 2019 December 31, 2018 Leo Womack (i) — On demand — 3,000 Lee Lytton (i) — On demand 3,500 3,500 Quinten Beasley 10 % October 14, 2016 10,000 10,000 Joel Oppenheim (i) — On demand 217,208 215,333 Joel Oppenheim 12 % On demand 15,000 — Bow Energy Ltd. (i) — On demand — 33,144 Blue Sky Resources (i) — On demand — 131,699 Jovian Petroleum Corporation (ii) 3.5 % December 31, 2021 362,583 35,210 Ivar Siem (iii) 12 % On demand 100,000 20,000 Ivar Siem (iii) 12 % On demand 75,000 — Joel Oppenheim (iii) 12 % December 31, 2019 200,000 10,000 Blue Sky Resources (iv) 9 % May 31, 2019 — 148,862 $ 983,291 $ 610,748 Note: Mark Allen’s notes were not included in related party notes payable at December 31, 2019 because he was not appointed as an officer of the Company until September 1, 2020. In September 2020 his notes will be reported in related party notes payable. (i) Balances are non-interest bearing and due on demand. (ii) On February 9, 2018, the Company entered into a Revolving Line of Credit Agreement (“LOC”) for $200,000 (subsequently increased to $500,000 on April 12, 2018) with Jovian Petroleum Corporation. The CEO of Jovian is Quinten Beasley, our former director (resigned October 31, 2018), and 25% of Jovian is owned by Zel C. Khan, our CEO and director. The initial agreement is for a period of 6 months and can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to year-end this LOC has been extended until December 31, 2021. (iii) On August 17, 2018, the Company sold an aggregate of $90,000 in convertible promissory notes (the “Director Convertible Notes”), to the Company’s directors, Ivar Siem ($20,000) through an entity that he is affiliated with; Leo Womack ($60,000); and Joel Oppenheim ($10,000). The Director Convertible Notes accrue interest at the rate of 12% per annum until paid in full and were due and payable on October 17, 2018. The amount owed may be prepaid at any time without penalty. The outstanding principal and interest owed under the Director Convertible Notes are convertible into common stock of the Company, from time to time, at the option of the holders of the notes, at a conversion price of $0.10 per share. As additional consideration for entering into the notes, the Company agreed to grant warrants to purchase one share of the Company’s common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the “Bridge Note Warrants”). The warrants had a contractual life of one year. As such, the Company granted (a) 20,000 Bridge Note Warrants to an entity affiliated with Ivar Siem; (b) 60,000 Bridge Note Warrants to Leo Womack; and (c) 10,000 Bridge Note Warrants to Joel Oppenheim. The Director Convertible Notes contain standard and customary events of default. The Company fair valued the warrants issued using the Black-Scholes Option Pricing Model for a total fair value of $6,249. On October 22, 2018, $60,000 in Director Convertible Notes were settled by offsetting against $60,000 proceeds required for the exercise of warrants. On August 15, 2019, the Company entered into a loan agreement in the amount of $200,000 with Joel Oppenheim. The note bears interest at an interest rate of 12% per annum and payments of $50,000 are due monthly beginning September 2, 2019 with the remaining balance due in full at maturity on December 31, 2019. In association with the loan, the Company issued 200,000 warrants at an exercises price of $0.10 per share that expire on August 15, 2021. The warrants fully vest on maturity date. The notes are secured by a 50% Working Interest in the SUDS field and Noack field sale proceeds. On August 15, 2019, the Company entered into a loan agreement in the amount of $75,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a four (4) month maturity. On December 4, 2019, the Company entered into a loan agreement in the amount of $100,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a six (6) month maturity. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. (iv) On June 8, 2018, the Company entered into the Acquisition Note with Blue Sky in the amount of CAD$406,181. The Note bears interest at 9% per annum and is due in full at maturity on November 30, 2018. The Company may, at its sole discretion, extend the maturity date for a period of six months with notice to the lender and payment of 25% of the principal amount. At December 31, 2018, the maturity date had been extended to May 31, 2019. On April 1, 2019, the Company utilized its LOC with Jovian to pay off in its entirety the June 8, 2018 Acquisition Note with Blue Sky. During 2019, $120,000 of related party notes and payables were converted to shares. Specifically, Leo Womack for $ 20,000, Joel Oppenheim for $40,000, Jovian for $40,000 and American Resources for $20,000. See Note 11 for further explanation. The following is a schedule of future minimum repayments of related party notes payable as of December 31, 2019: 2020 $ 983,291 Thereafter — $ 983,291 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Derivative Financial Instruments | NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS On May 18, 2018, as an inducement to enter into an Amended and Restated Loan Agreement, the Company issued, among other instruments, warrants to acquire 320,000 shares of common stock with an exercise price of $0.10 per share in Canadian dollars (see Note 7). The warrants are valued using the Black Scholes Option Pricing Model and the derivative is fair valued at the end of each reporting period. The Company valued the derivative liability at initial recognition as $30,012. A summary of the activity of the derivative liabilities is shown below: Balance, January 1, 2019 $ 37,013 Fair value adjustments (12,504 ) As at December 31, 2019 $ 24,509 Derivative liability classified warrants in the years ended December 31, 2019 were valued using the Black Scholes Option Pricing Model with the range of assumptions outlined below. Expected life was determined based on historical exercise data of the Company. December 31, 2019 Risk-free interest rate 1.58% - 2.27 % Expected life 1.4 - 2.1 years Expected dividend rate 0 % Expected volatility 208% - 240 % |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | NOTE 10. ASSET RETIREMENT OBLIGATIONS The Company has a number of oil and gas wells in production and will have AROs 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. AROs associated with the retirement of tangible long-lived assets are recognized as liabilities with an increase to the carrying amounts of the related long-lived assets in the period incurred. The fair value of AROs is recognized as of the acquisition date of the working interest. The cost of the tangible asset, including the asset retirement cost, is depleted over the life of the asset. AROs are recorded at estimated fair value, measured by reference to the expected future cash outflows required to satisfy the retirement obligations discounted at the Company’s credit-adjusted risk-free interest rate. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value. If estimated future costs of AROs change, an adjustment is recorded to both the ARO and the long-lived asset. Revisions to estimated AROs can result from changes in retirement cost estimates, revisions to estimated discount rates and changes in the estimated timing of abandonment. December 31, 2019 Level 1 Level 2 Level 3 Total Derivative liabilities — — 24,509 24,509 ARO liabilities — — 1,723,364 1,723,364 December 31, 2018 Derivative liabilities — — 37,013 37,013 ARO liabilities — — 1,509,622 1,509,622 The Company’s ARO is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging costs, remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs. For the Canadian properties, abandonment and reclamation liabilities are prescribed by the province in which the Company operates in. For the purpose of determining the fair value of AROs incurred during the years presented, the Company used the following assumptions: December 31, 2019 Inflation rate 1.92 - 2.15 % Estimated asset life 12 - 22 years The following table shows the change in the Company’s ARO liability for the years ended December 31, 2019 and 2018: Canadian properties United States properties Total Asset retirement obligations, December 31, 2017 $ — $ 473,868 $ 473,868 Additions 1,313,982 — 1,313,982 Accretion expense 4,353 23,618 23,618 Disposition — (246,263 ) (246,263 ) Foreign currency translation (59,936 ) — (59,936 ) Asset retirement obligations, December 31, 2018 1,258,399 251,223 1,509,622 Additions — — — Accretion expense 123,474 26,150 149,624 Disposition — — — Foreign currency translation 64,118 — 64,118 Asset retirement obligations, December 31, 2019 $ 1,445,991 $ 277,373 $ 1,723,364 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Equity | NOTE 11. EQUITY Preferred stock The holders of Series A Preferred Stock are entitled to receive cumulative dividends at a rate of 9% per annum. The Preferred Stock will automatically convert into common stock when the Company’s common stock market price equals or exceeds $0.28 per share for 30 consecutive days. At conversion, the value of each dollar of preferred stock (based on a $10 per share price) will convert into 7.1429 common shares (which results in a $0.14 per common share conversion rate). In accordance with the terms of the Preferred Stock, cumulative dividends of $178,209 and $179,279 were declared for the year ended December 31, 2019 and December 31, 2018, respectively. Common stock During the year ended December 31, 2018, the Company closed private placements ranging from $0.08 to $0.12 per unit for a total of 3,750,000 units and gross proceeds of $397,500 (the “2018 Units”). Each 2018 Unit was comprised of one common share and one warrant entitling the holder to exercise such warrant for one common share for a period of two years from the date of issuance. The warrants have exercise prices ranging from $0.10 to $0.20 per share. On January 24, 2018, 350,000 shares of common stock, valued at $59,500 or $0.17 per share, were issued in accordance with Mr. James Burns’ common stock related salary compensation. On January 24, 2018, Mr. James Burns was issued 616,209 shares of restricted common stock, valued at $264,970 or $0.43 per share, in consideration for 2017 deferred salary of $61,621. A debt settlement loss of $203,349 was recorded. On February 1, 2018, 100,000 shares of common stock, valued at $37,000 or $0.37 per share, were granted to a law firm as a bonus for the Bow Energy acquisition. On February 1, 2018, a geologist consultant was issued 150,000 shares of common stock, valued at $45,900 or $0.31 per share, in exchange for professional consulting services. On February 1, 2018, former director Quinten Beasley, exercised warrants to purchase 1,110,000 shares of common stock by settling $102,590 of accounts payable, due to a company controlled by the former director, at an average share price of $0.092 per share. No gain or loss was recorded on settlement. On February 23, 2018, director Saleem Nizami was issued 100,000 shares of common stock, valued at $13,000 or $0.13 per share, in exchange for his professional consulting services at the SUDS, Oklahoma lease. On February 27, 2018, the Company closed the Acquisition and acquired all of the issued and outstanding shares of capital stock of Bow in consideration for 106,156,712 shares of common stock with a fair value of $34,607,088. See Note 4. On February 28, 2018, a warrant holder exercised warrants to purchase 360,000 shares of common stock for cash proceeds of $36,875 at an average exercise price of $0.102 per share. On February 28, 2018, director Joel Oppenheim exercised warrants to purchase 630,000 shares of common stock for cash proceed of $61,800 at an average exercise price of $0.098 per share. On March 31, 2018, 350,000 shares of common stock, valued at $35,000 or $0.10 per share, were issued in accordance with Mr. James Burns’ common stock related salary compensation. On April 18, 2018, a Separation and Release Agreement between the former President of the Company, James Burns and the Company, became effective, whereby Mr. Burns ceased to be an employee of the Company. Pursuant to the terms of the agreement, the Company paid Mr. Burns $33,000 and granted Mr. Burns warrants to purchase 3,000,000 shares of common stock at an exercise price of $0.10 per share. The Company also issued 2,000,000 shares of restricted common stock to Mr. Burns pursuant to the agreement of the Company on May 14, 2018. The fair value of the warrants ($221,401) was calculated using a Black Scholes model and the restricted shares ($180,000) were valued at the closing price of Petrolia’s shares on the grant date and were recorded to stock compensation expense. On April 20, 2018, the Company entered into an agreement to offer the position of Chairman of the Board of Directors to James Burns. Mr. Burns accepted and became Chairman of the Board effective May 1, 2018. Pursuant to the terms of the offer, Mr. Burns will be paid an annual salary of $65,000 and up to $25,000 in benefits. The Company issued 500,000 shares of restricted common stock to Mr. Burns on May 14, 2018. An additional 500,000 shares of restricted common stock will be issued upon a successful listing of the Company on the NASDAQ or NYSE exchanges. Mr. Burns was granted warrants to purchase 2,000,000 shares of common stock exercisable at $0.10 per share, expiring in 36 months, which were fully-vested upon their grant. The fair value of the warrants ($147,600) were calculated using a Black Scholes model and the restricted shares ($45,000) were valued at the closing price of Petrolia’s shares on the date of the agreement and were recorded to stock compensation expense. On April 26, 2018, the Company issued 200,000 shares of restricted common stock as a bonus to a vendor, valued at $20,000 or $0.10 per share, based on the closing price of the Company’s common stock. On April 26, 2018, director Joel Oppenheim exercised warrants to purchase 500,000 shares of common stock for cash proceed of $50,000 at an average exercise price of $0.10 per share. On May 9, 2018, in conjunction with a debt financing, the Company issued 500,000 shares of common stock, valued at $47,747 or $0.09 per share, as a financing fee. On May 22, 2018, the Company issued 500,000 shares of common stock to then officer Tariq Chaudhary, who had served as the Chief Financial Officer, as part of his compensation package. The shares had a fair value of $50,000, or $0.10 per share, based on the closing price of the Company’s common stock on the grant date. On June 25, 2018, the Company issued 600,000 shares of restricted common stock to consultants for services rendered. The shares had a fair value of $45,000, or $0.08 per share. On August 31, 2018, the Company entered into an Exchange Agreement with Blue Sky, whose President is Ilyas Chaudhary, the father of Zel C. Khan, the Company’s Chief Executive Officer. Mr. Chaudhary and his affiliates would return 70,807,417 shares of common stock to treasury for the purchase of Bow Energy Ltd. The fair value of the cancelled shares was determined based on the closing price of the Company’s common stock on August 31, 2018, which was $0.07 per share for a fair value of $4,956,519. The 70,807,417 shares returned to treasury were subsequently cancelled. During the year ended December 31, 2019, the Company closed private placements at $0.08 per unit for a total of 1,875,000 units and gross proceeds of $150,000 (the “2019 Units”). Each 2019 Unit was comprised of one common share and one warrant entitling the holder to exercise such warrant for one common share for a period of two years from the date of issuance. The warrants have an exercise price at $0.10 per share. On September 27, 2018, a warrant holder exercised warrants to purchase 310,000 shares of common stock for cash proceeds of $31,000 at an average exercise price of $0.10 per share. On October 17, 2018, 2,000,000 shares of common stock with a fair value of $256,000 or $0.13 per share, were granted to a company controlled by a former director Quinten Beasley, Critical Communication LLC, pursuant to a separation agreement and his resignation as a member of the Board of Directors. On October 22, 2018, director Leo B. Womack exercised warrants to purchase 1,000,000 shares of common stock. The exercise price of $60,000 or $0.06 per share was satisfied by forgiving debt outstanding to the holder of $60,000, with no gain or loss recognized. During the year ended December 31, 2019, the Company closed private placements for $0.08 per unit for a total of 1,875,000 units and gross proceeds of $150,000 (the “2019 Units”). Each 2019 Unit was comprised of one common share and two warrants entitling the holder to exercise such warrant for one common share for a period of two years from the date of issuance. The warrants have exercise price of $0.10 per share. See additional description of the detail transactions concerning those warrants in Note 12: Related Party Transactions, below. On July 23, 2019, director Joel Martin Oppenheim purchased additional 2019 private placements for $0.08 per unit for a total of 156,250 units with gross proceeds of $12,500. Each 2019 Unit was comprised of one common share and two warrants entitling the holder to exercise such warrant for one common share for a period of two years from the date of issuance. The warrants have exercise price of $0.10 per share. Consideration for the purchase was provided through a cash payment of $2,500 as well as the forgiving of an outstanding bridge loan of $10,000. These shares were not issued until January 2020. On August 8, 2019, director Joel Martin Oppenheim exercised warrants to purchase 150,000 shares of common stock for cash proceeds of $15,000 at an exercise price of $0.10 per share. These shares were not issued until January 2020. On August 14, 2019, director Joel Martin Oppenheim exercised warrants to purchase 10,000 shares of common stock for the exercise price of $1,000 or $0.10 per share. These shares were not issued until January 2020. During 2019, a warrant holder exercised warrants to purchase 275,000 shares of common stock for cash proceeds of $27,375 at an average exercise price of $0.10 per share. These shares were not issued until January 2020. Warrants Continuity of the Company’s common stock purchase warrants issued and outstanding is as follows: Warrants Weighted average exercise price Outstanding at year ended December 31, 2017 35,087,197 0.24 Granted 24,829,666 0.11 Exercised (3,910,000 ) 0.09 Expired (4,940,000 ) 0.10 Outstanding at year ended December 31, 2018 51,066,864 $ 0.20 Granted 12,250,000 0.15 Exercised (125,000 ) 0.09 Expired (6,148,028 ) 0.25 Outstanding at quarter ended December 31, 2019 57,043,836 0.14 As at December 31, 2019, the weighted-average remaining contractual life of warrants outstanding was 1.04 years (2018 – 1.7 years). As at December 31, 2019, the intrinsic value of warrants outstanding is $8,256 (2018 - $711,978). The table below summarizes warrant issuances during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 2018 Warrants granted: Board of directors and advisory board service 7,000,000 7,750,000 Private placements 3,750,000 5,312,500 Pursuant to termination agreements — 5,250,000 Pursuant to financing arrangements 1,500,000 3,810,000 Pursuant to consulting agreements — 2,000,000 Pursuant to acquisition of Bow Energy Ltd., a related party — 368,000 Deferred salary – CEO, CFO — 339,166 Total 12,250,000 24,829,666 Warrants granted in the years ended December 31, 2019 and 2018 were valued using the Black Scholes Option Pricing Model with the range of assumptions outlined below. Expected life was determined based on historical exercise data of the Company. December 31, 2019 December 31, 2018 Risk-free interest rate 1.94% to 2.39 % 2.39 % Expected life 1.0 - 3.0 years 1.0 - 3.0 years Expected dividend rate 0 % 0 % Expected volatility 240% - 283 % 274% - 283 % Stock options Upon closing of the Acquisition, the Company granted stock options to purchase 3,500,000 shares of common stock to former Bow employees and directors, exercisable at $0.12 per share, expiring February 27, 2021. The stock options were valued at $1,131,639 using the Black Scholes Option Pricing Model with expected volatility of 283%, a discount rate of 2.42%, a dividend yield of 0% and an expected life of three years. During the subsequent sale back to Bow, the options were revoked. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12. RELATED PARTY TRANSACTIONS On January 15, 2018, Paul Deputy, the former CFO, terminated his employment with the Company. The Company agreed to pay severance of $192,521 amortized over a 30-month period beginning April 15, 2018 at a 5% annual percentage rate, $5,000 per month for January, February and March of 2018 and grant Mr. Deputy warrants to purchase 250,000 shares of common stock exercisable at $0.20 per share expiring in 36 months. The fair value of warrants granted was $109,021. The outstanding balance of severance payable is included in accrued liabilities – related parties. On January 12, 2018, the Company entered into an employment agreement with Tariq Chaudhary, the Company’s former CFO, for a period of one year. The former CFO was to be paid a salary of $7,500 a month during the first 90 days of the probationary period. Upon successful completion of the probationary period, the salary was to be $120,000 per year. Also, the former CFO was to be given a signing bonus of 500,000 shares of common stock and was granted warrants to purchase 500,000 shares of common stock exercisable at $0.12 per share equally vesting over 36 months upon successful completion of the probationary period. On October 31, 2018, Tariq Chaudhary, who had served as the CFO of the Company since January 16, 2018, tendered his resignation as CFO, effective immediately. On February 1, 2018, former director Quinten Beasley, exercised warrants to purchase 1,110,000 shares of common stock by settling $102,590 of accounts payable, due to a company controlled by the former director, at an average share price of $0.092 per share. No gain or loss was recorded on settlement. On February 1, 2018, director Joel Oppenheim subscribed for a private placement resulting in the issuance of 208,333 shares of common stock and warrants for gross proceeds of $25,000 at a price of $0.12 per unit. On February 9, 2018, the Company entered into a Revolving Line of Credit Agreement (“LOC”) for $200,000 (subsequently increased to $500,000 on April 12, 2018) with Jovian Petroleum Corporation. The CEO of Jovian is Quinten Beasley, our former director (resigned October 31, 2018), and 25% of Jovian is owned by Zel C. Khan, our CEO and director. The initial agreement is for a period of 6 months and can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to year-end, this LOC has been extended until December 31, 2019. On February 23, 2018, director Saleem Nizami was issued 100,000 shares of common stock, valued at $13,000 or $0.13 per share, in exchange for his professional consulting services at the SUDS, Oklahoma lease. On February 27, 2018, the transactions contemplated by the November 30, 2017, Arrangement (the “Arrangement”) entered into to acquire Bow Energy Ltd (“Bow” and the “Acquisition”), a Canadian company with corporate offices in Alberta, Calgary, closed and the Company acquired Bow Energy Ltd., a related party and all of the issued and outstanding shares of capital stock of Bow (each a “Bow Share”). Under the terms of the Arrangement, Bow shareholders are deemed to have received 1.15 common stock shares for each Bow Share. A total of 106,156,712 shares of the Company’s common stock were issued to the Bow shareholders as a result of the Arrangement, plus additional shares in connection with rounding. Prior to the acquisition of Bow, BSIH was the largest shareholder of Bow. On February 28, 2018, director Joel Oppenheim exercised warrants to purchase 630,000 shares of common stock for cash proceed of $61,800 at an average exercise price of $0.098 per share. On March 23, 2018, director, Joel Oppenheim subscribed for a private placement resulting in the issuance of 104,167 shares of common stock and warrants for gross proceeds of $12,500 at a price of $0.12 per unit. On March 31, 2018, 350,000 shares of common stock, valued at $35,000 or $0.10 per share, were issued in accordance with Mr. James Burns’ common stock related salary compensation. On April 12, 2018, the Board of Directors approved (a) the entry by the Company into a $500,000 Convertible Promissory Note with Blue Sky International Holdings Inc., a related party. The note, effective April 1, 2018, is due on April 1, 2019, accrues interest at the rate of 11% per annum until paid in full, and is convertible into shares of common stock of the Company at the rate of $0.12 per share. This note was never utilized and subsequently cancelled on April 27, 2018; and (b) the entry into an Amended Revolving Line of Credit Agreement with Jovian Petroleum Corporation, a related party, which establishes a revolving line of credit in the amount of $500,000 for a period of six months (through August 9, 2018) with amounts borrowed thereunder due at the expiration of the line of credit and accruing interest at the rate of 3.5% per annum unless there is a default thereunder at which time amounts outstanding accrue interest at the rate of 7.5% per annum until paid in full, with such interest payable every 90 days. Both the BSIH Promissory Note and the Jovian Line of Credit are related party transactions. Blue Sky International Holdings Inc. is owned by Mr. Ilyas Chaudhary, father of Zel C. Khan, former Director and Officer of Jovian and current CEO and President of the Company. On April 18, 2018, a Separation and Release Agreement between the former President of the Company, James Burns and the Company became effective whereby Mr. Burns ceased to be an employee of the Company. Pursuant to the terms of the agreement, the Company will pay Mr. Burns $33,000, grant him warrants to purchase 3,000,000 shares of common stock at an exercise price of $0.10 per share and also issue 2,000,000 shares of restricted common stock of the Company, which it satisfied on May 14, 2018. The warrants were granted at fair value using a Black Scholes model for $266,971 and the restricted shares were valued at the closing price of the Company’s stock, for $180,000. On April 20, 2018, the Company entered into an agreement to offer the position of Chairman of the Board to James Burns. Mr. Burns accepted and became Chairman of the Board effective May 1, 2018. Pursuant to the terms of the offer, Mr. Burns will be paid an annual salary of $65,000 and up to $25,000 in health benefits for Mr. Burns and his family. The Company will issue 500,000 shares of restricted common stock, which it satisfied on May 14, 2018. An additional 500,000 shares of restricted common stock will be issued upon a successful listing of the Company on the NASDAQ or NYSE exchanges. Mr. Burns was granted fully vested warrants to purchase 2,000,000 shares of common stock exercisable at $0.10 per share expiring in 36 months. The warrants were granted at fair value using a Black Scholes model for $147,600 and the restricted shares were valued at the closing price of the Company’s common stock on the date of the agreement for $45,000. On April 26, 2018, Joel Oppenheim, Director, exercised warrants to purchase 500,000 shares of common stock for cash proceeds of $50,000 at an average exercise price of $0.10 per share. On May 22, 2018, the Company issued 500,000 shares of common stock to officer Tariq Chaudhary, who then served as the Chief Financial Officer, as part of his compensation package. The shares had a fair value of $50,000, or $0.10 per share, based on the closing price of the Company’s stock on the issuance date. As described in Note 6, effective on June 29, 2018, the Company acquired a 25% working interest in approximately 41,526 acres located in the Luseland, Hearts Hill, and Cuthbert fields, located in Southwest Saskatchewan and Eastern Alberta, Canada, from Blue Sky. The President of Blue Sky is Ilyas Chaudhary, the father of Zel C. Khan, the Company’s Chief Executive Officer. On August 17, 2018, the Company sold an aggregate of $90,000 in Convertible Promissory Notes (the “Director Convertible Notes”), to the Company’s directors, Ivar Siem ($20,000) through an entity that he is affiliated with; Leo Womack ($60,000); and Joel Oppenheim ($10,000). The Director Convertible Notes accrue interest at the rate of 12% per annum until paid in full and are due and payable on October 17, 2018. The amount owed may be prepaid at any time without penalty. The outstanding principal and interest owed under the Director Convertible Notes are convertible into common stock of the Company, from time to time, at the option of the holders of the notes, at a conversion price of $0.10 per share. As additional consideration for entering into the notes, the Company agreed to grant warrants to purchase one share of the Company’s common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the “Bridge Note Warrants”). The warrants have a contractual life of one year. As such, the Company granted (a) 20,000 Bridge Note Warrants to an entity affiliated with Ivar Siem; (b) 60,000 Bridge Note Warrants to Leo Womack; and (c) 10,000 Bridge Note Warrants to Joel Oppenheim. The Director Convertible Notes contain standard and customary events of default. The Company fair valued the warrants issued using a Black Scholes model for a total fair value of $6,249. As described above in Note 5, effective on August 31, 2018, the Company entered into and closed the transactions contemplated by a Share Exchange Agreement with Blue Sky, pursuant to which, among other things, the Company sold Blue Sky 100% of our ownership of Bow and 70,807,417 shares of the Company’s common stock owned and controlled by Blue Sky and BSIH were returned to the Company and cancelled. On September 14, 2018, warrants to purchase 150,000 shares of common stock with a fair value of $11,242 were granted to director Joel Oppenheim pursuant to a loan agreement. Each warrant is exercisable into shares of common stock at an exercise price of $0.10 per share and has a contractual life of two years. The warrants were valued using the Black-Scholes Option Pricing Model. On September 17, 2018, the Company entered into a Memorandum of Understanding (“MOU”) with Blue Sky. Pursuant to the MOU, the Company acquired an additional 3% working interest in the Canadian Properties, increasing our Working Interest to 28%. Total consideration paid from the Company to Blue Sky for the additional 3% Working Interest was $150,000. On October 17, 2018, 2,000,000 shares of common stock with a fair value of $256,000 were granted to a company controlled by a former director Quinten Beasley, Critical Communication LLC, pursuant to a separation agreement and his resignation as a member of the Board of Directors. Furthermore, 2,000,000 warrants with a fair value of $244,429 were granted. Each warrant is exercisable into shares of common stock at an exercise price of $0.10 per share and have a contractual life of two years. The warrants were valued using the Black-Scholes Option Pricing Model. On October 22, 2018, director Leo B. Womack exercised warrants to purchase 1,000,000 shares of common stock. The exercise price of $60,000 or $0.06 per share was satisfied by settling debt outstanding debt due to the holder of $60,000, with no gain or loss recognized. On October 31, 2018, director Joel Oppenheim subscribed in a private placement for 312,500 shares of common stock and warrants to purchase 625,000 shares of common stock for gross proceeds of $25,000 at a price of $0.08 per unit. Each warrant has an exercise of $0.10 per share and expires on November 1, 2020. On November 1, 2018, director Richard Dole subscribed in a private placement for 312,500 shares of common stock and warrants to purchase 625,000 shares of common stock for gross proceeds of $25,000 at a price of $0.08 per unit. On November 2, 2018, Jovian, a related party, subscribed in a private placement for 625,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock for gross proceeds of $50,000 at a price of $0.08 per unit. On December 14, 2018, director Joel Oppenheim subscribed in a private placement for 156,250 shares of common stock and warrants to purchase 312,500 shares of common stock for gross proceeds of $12,500 at a price of $0.08 per unit. On December 14, 2018, American Resources Offshore Inc., a related party, subscribed in a private placement for 156,250 shares of common stock and warrants to purchase 312,500 shares of common stock for gross proceeds of $12,500 at a price of $0.08 per unit. During the year ended December 31, 2018, warrants to purchase 1,000,000 shares of common stock, with an aggregate fair value of $104,009 were granted to director Joel Oppenheim, pursuant to a loan agreement. Each warrant is exercisable into shares of common stock of the Company at an exercise price of $0.10 - $0.14 per share and have a contractual life of three years. The warrants were valued using the Black-Scholes Option Pricing Model. On August 21, 2019, Jovian, a related party, purchased 4 units of the debt private placement with gross proceeds of $50,000. At maturity, the holder has the option to either collect the principal or convert the balance into shares/warrants. The conversion would be for 625,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock at a price of $0.08 per unit. The warrants fair value was determined to be $62,066 via the Black Sholes Option Pricing Model. Consideration for the purchase was provided though a cash payment and the conversion of the related party’s prior notes payable and accrued payables. On August 21, 2019, Joel Oppenheim, a related party, purchased 4 units of the debt private placement with gross proceeds of $50,000. At maturity, the holder has the option to either collect the principal or convert the balance into shares/warrants. The conversion would be for 625,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock at a price of $0.08 per unit. The warrants fair value was determined to be $62,066 via the Black Sholes Option Pricing Model. Consideration for the purchase was provided though a cash payment and the conversion of the related party’s prior notes payable and accrued payables. On August 21, 2019, American Resources Offshore, Inc., a related party, purchased 2 units of the debt private placement with gross proceeds of $25,000. At maturity, the holder has the option to either collect the principal or convert the balance into shares/warrants. The conversion would be for 312,500 shares of common stock and warrants to purchase 625,000 shares of common stock at a price of $0.08 per unit. The warrants fair value was determined to be $31,033 via the Black Sholes Option Pricing Model. Consideration for the purchase was provided though a cash payment and the conversion of the related party’s prior notes payable and accrued payables. On August 21, 2019, Leo Womack, a related party, purchased 2 units of the debt private placement with gross proceeds of $25,000. At maturity, the holder has the option to either collect the principal or convert the balance into shares/warrants. The conversion would be for 312,500 shares of common stock and warrants to purchase 625,000 shares of common stock at a price of $0.08 per unit. The warrants fair value was determined to be $31,033 via the Black Sholes Option Pricing Model. Consideration for the purchase was provided though a cash payment and the conversion of the related party’s prior notes payable and accrued payables. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13. COMMITMENTS AND CONTINGENCIES Environmental Matters – Office Lease |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 14. INCOME TAXES There was no provision for income taxes for 2019 and 2018 due to 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 2016 forward are open to examination by tax authorities in the United States. Years from 2018 forward are open to examination by Canadian tax authorities. The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate of 21% (2019 – 21%) on operations due primarily to permanent differences attributable to organizational expenses. Fiscal Year Ended Fiscal Year Ended Income tax (benefit) expense computed at statutory rates $ (629,000 ) $ (7,986,000 ) Non-deductible items 69,000 3,807,000 Change in statutory, foreign tax, foreign exchange rates and other 172,000 943,000 Change in valuation allowance 388,000 3,236,000 Total $ — $ — The significant components of the net deferred tax asset were as follows: December 31, 2019 2018 Deferred tax assets $ Net operating loss carryforwards $ 2,174,000 $ 5,410,000 Asset retirement obligation 331,000 236,000 Oil and gas properties (430,000 ) (716,000 ) Property and equipment — ) (7,000 ) Other — — Total deferred tax assets (liabilities) 2,075,000 4,923,000 Less: Valuation allowance (2,075,000 ) (4,923,000 ) Net deferred tax assets (liabilities) $ — $ — A valuation allowance has been established to offset deferred tax assets. The Company’s accumulated net operating losses in the United States were approximately $2.2 million at December 31, 2019 and begin to expire if not utilized beginning in the year 2033. The Company’s accumulated non-capital tax losses in Canada were approximately $27.5 million at December 31, 2019 and will expire in 2039. The Tax Cuts and Jobs Act was signed into law on December 22, 2017 and reduced the corporate income tax rate from 34% to 21%. The Company’s deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 15. SEGMENT REPORTING The Company has a single reportable operating segment, Oil and Gas Exploration and Production, which includes exploration, development, and production of current and potential oil and gas properties. Results of operations from producing activities were as follows for the years ended December 31, 2019 and 2018: Canada United States Total Year ended December 31, 2019 Revenue $ 2,827,877 $ 88,857 $ 2,916,734 Production costs (3,021,805 ) (365,294 ) (3,387,099 ) Depreciation, depletion, amortization and accretion (1,004,832 ) (32,187 ) (1,037,019 ) Results of operations from producing activities $ (1,198,760 ) $ (308,624 ) $ (1,507,384 ) Total long-lived assets $ 1,104,458 $ 10,346,630 $ 11,451,088 Year ended December 31, 2018 Revenue $ 1,118,283 $ 54,777 $ 1,173,060 Production costs (1,239,317 ) (302,102 ) (1,541,419 ) Depreciation, depletion, amortization and accretion (440,075 ) (50,898 ) (490,973 ) Results of operations from producing activities $ (561,109 ) $ (298,223 ) $ (859,332 ) Total long-lived assets $ 2,030,090 $ 10,625,808 $ 12,408,907 The Company’s revenues are derived from the following major customers: December 31, 2019 December 31, 2018 Customer A $ 2,827,877 $ 1,118,283 Customer B 88,857 54,777 Other customers — — Total revenues $ 2,916,734 $ 1,173,060 |
Supplemental Information Relati
Supplemental Information Relating to Oil and Gas Producing Activities (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
Supplemental Information Relating to Oil and Gas Producing Activities (Unaudited) | NOTE 16. 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 ARO established in the current year, as well as increases or decreases to the ARO 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. In 2018, the Company purchased a total of a 28% working interest in the Canadian Properties in a series of acquisitions for an aggregate purchase price of $1,246,216. In connection with the acquisition, the Company recognized an asset retirement obligation of $1,313,982. In 2019, the Company did not make any acquisitions or purchase any working interests. Fiscal Year Ended Fiscal Year Ended Property acquisitions $ — $ 1,189,480 Unevaluated — — Evaluated — — Exploration — — Development — — Total costs incurred $ — $ 1,189,480 Capitalized costs Capitalized costs include the cost of properties, equipment and facilities for oil and natural-gas producing activities, excluding any asset retirement obligations. 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. December 31, 2019 December 31, 2018 Capitalized costs: — — Unevaluated properties $ — $ — Evaluated properties 12,913,972 12,794,285 12,913,972 12,794,285 Less: Accumulated DD&A (1,520,527 ) (475,208 ) Net capitalized costs $ 11,393,445 $ 12,319,077 Oil and Gas Reserve Information MKM Engineering (“MKM”), an independent engineering firm, prepared the estimates of the proved reserves, future production, and income attributable to the Chaves County, New Mexico and Creek County, Oklahoma and Canadian property leasehold interests as of December 31, 2019 and the estimates of the proved reserves, future production, and income attributable to the Milam County, Texas, Chaves County, New Mexico and Creek County, Oklahoma leasehold interests as of December 31, 2017. 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 and Canada. 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) December 31, 2017 1,638,200 Revisions of prior estimates 181,678 Purchases of reserves in place 320,865 Disposition of mineral in place (194,650 ) Production (51,913 ) December 31, 2018 1,894,180 Revisions of prior estimates (11,217 ) Purchases of reserves in place — Disposition of mineral in place — Production (82,506 ) December 31, 2019 1,800,457 December 31, 2019 December 31, 2018 Estimated quantities of proved developed reserves – Oil (Bbls) 1,688,437 1,773,800 Estimated quantities of proved undeveloped reserves – Oil (Bbls) 112,020 120,380 Proved developed and proved undeveloped reserves increased from December 31, 2017 to December 31, 2018, primarily due to the acquisition of the Canadian Properties and revision of prior estimates, partially offset by disposition of reserves and production in the current year. The following table sets forth estimates of the proved developed and proved undeveloped oil and gas reserves (net of royalty interests) for the Company and changes therein, for the period indicates. Proved developed producing and non-producing reserve Oil (bbls) December 31, 2018 1,773,800 Acquired reserves — Disposition of reserves — Revision of prior estimates (2,857 ) Production (82,506 ) December 31, 2019 1,688,437 Proved undeveloped reserves Oil (bbls) December 31, 2018 120,380 Acquired reserves — Revisions to prior estimates (8,360 ) December 31, 2019 112,020 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, 2019 December 31, 2018 Future cash inflows $ 95,308,120 $ 89,797,082 Future production costs (30,349,800 ) (37,021,141 ) Future development costs (2,051,730 ) (2,394,080 ) Future income taxes — — Future net cash flows 62,906,590 50,381,861 Discount of future net cash flows at 10% per annum (37,081,860 ) (26,743,136 ) Standardized measure of discounted future net cash flows $ 25,824,730 $ 23,638,725 Changes in standardized measure of discounted future cash flows December 31, 2019 December 31, 2018 Beginning of year $ 23,638,725 $ 16,605,980 Sales and transfers of oil & gas produced, net of production costs (1,514,335 ) 368,421 Net changes in prices and production costs 5,780,704 4,178,977 Changes in estimated future development costs (676,141 ) (5,742,027 ) Acquisitions/dispositions of minerals in place, net of production costs — 1,544,720 Revision of previous estimates (878,772 ) 2,462,456 Change in discount 1,386,793 286,849 Change in production rate or other (1,912,244 ) 3,933,348 End of year $ 25,824,730 $ 23,638,725 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 17. SUBSEQUENT EVENTS On February 28, 2020, Ivar Siem loaned $50,000 to the Company. The note bears interest at an interest rate of 12% per annum and is due on demand. A Company director Joel Martin Oppenheim exercised warrants to purchase 150,000 shares of common stock for cash proceeds of $15,000 at an exercise price of $0.10 per share. These shares were not issued until January 2020. A Company director Joel Martin Oppenheim exercised warrants to purchase 10,000 shares of common stock. Consideration for the exercise price of $1,000 or $0.10 per share was satisfied by forgiving a bridge loan debt outstanding to the holder of $10,000, with no gain or loss recognized. Since the consideration provided was due to a conversion of debt, the debt balance was transferred to the additional paid in capital account. These shares were not issued until January 2020. On May 29, 2020, Petrolia Energy Corporation acquired a 50% working interest in approximately 28,000 acres located in the Utikuma Lake area in Alberta, Canada. The property is an oil-weighted asset currently producing approximately 500 bopd of low decline light oil. The working interest was acquired from Blue Sky Resources Ltd. in an affiliated party transaction as Zel C. Khan, the Company’s Chief Executive Officer, is related to the ownership of Blue Sky. Blue Sky acquired a 100% working interest in the Canadian Property from Vermilion Energy Inc. via Vermilion’s subsidiary Vermilion Resources. The effective date of the acquisition was May 1, 2020. Effective July 13, 2020 Richard Dole, Joel Oppenheim and Saleem Nizami resigned as Directors on the Board. This reduced the size of the Board from seven to four members, which is helping to streamline the Company. On September 1, 2020, the Board of Directors approved a contractual Employment Agreement between the Company and Mark Allen to appoint him as the new President of the Company. Mr. Allen’s contract term is 6 months, with a cash payment of $90,000 in equal monthly installments of $15,000, including an option to extend. In addition, Mr. Allen is due to receive incentive compensation of 2,000,000 shares of common stock (1,000,000 were issued at signing and the remining shares are yet to be issued). He also is to receive 1,000,000 warrants at $0.08 per share that expire in 36 months and vest over a two-year period. Mr. Allen has been in the oil and gas industry for over 25 years, most recently as Vice President, Oil and Gas Consulting for Wipro Limited, a leading global consulting and information technology services firm. Prior to Wipro Limited, Mr. Allen was Vice President, Exploration and Production Services for SAIC, a Fortune 500 company. On September 16, 2020, Zel C.Khan resigned as a member of the Board to solely focus on his role as the Chief Executive Officer of Petrolia Energy Corporation. On October 13, 2020, Ivar Siem loaned $25,000 to the Company. The note bears interest at an interest rate of 12% per annum and is due on demand. On December 15, 2020, Mark Allen, was issued 1,650,000 common shares for exercising warrants at $0.05 per share with cash proceeds of $82,500. On January 20, 2020, Mark Allen was issued 275,000 common shares for exercising warrants at $0.05 per share with cash proceeds of $13,750. The Company signed an Executive Salary Payable Agreement with Zel Khan as the Chief Executive Officer. All of Mr. Khan’s previous salary obligation will be satisfied by the issuance of 1,992,272 shares of the Company, within 15 days of the signed agreement. The Company entered into a promissory note with American Resources for $125,000. The Note bears interest at 10% per annum and is due in full at maturity on June 1, 2020. In addition, 500,000 shares of common stock were granted in association with the note. Jovian, a related party, purchased 1 unit of the debt private placement with gross proceeds of $12,500. At maturity, the holder has the option to either collect the principal or convert the balance into shares/warrants. The conversion would be for 156,250 shares of common stock and warrants to purchase 312,500 shares of common stock at a price of $0.08 per unit. Jovian converted the debt into shares during 2020. Paul Deputy was reinstated Interim Chief Financial Officer, signed a Settlement and Mutual Release Agreement. In exchange for releasing the Company for any current, outstanding payroll and/or service-related liability at January 29, 2021, the Company agreed to pay Mr. Deputy $50,000, to be paid in $2,500 monthly increments, starting April 1, 2021. In addition, was issued 250,000 shares of Petrolia common stock. Mark Allen converted $30,000 of unpaid contract wages from early 2020 into 333,333 common shares of common stock at a rate of $0.09 per share. Mark Allen converted a defaulted secured loan of $270,000 that was due on December 15, 2019. The debt was converted at a rate of $0.05 per share and resulted in the issuance of 5,400,000 shares of common stock and 5,400,000 warrants to purchase common stock. The warrants have a strike price of $0.08 per share and expire in 36 months. Between July 1, 2019 and May 10, 2021, 1,000,641 shares of common stock were issued for subscriptions to third parties. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Askarii Resources and Petrolia Canada Corporation. All significant intercompany balances and transactions have been eliminated upon consolidation. The Company accounts for its investment in companies in which it has significant influence by the equity method. The Company’s proportionate share of earnings is included in earnings and added to or deducted from the cost of the investment. |
Foreign Currency Translation | Foreign currency translation The functional and reporting currency of the Company is the United States dollar. The functional currencies of the Company’s wholly-owned subsidiaries, Askarii Resources and Petrolia Canada Corporation, are the United States dollar and the Canadian dollar, respectively. Transactions involving foreign currencies are converted into the Company’s functional currency using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the Company’s functional currency are translated using exchange rates at that date. Exchange gains and losses are included in net earnings. On consolidation, Petrolia Canada Corporation’s income statement amounts are translated at average exchange rates for the year, while the assets and liabilities are translated at year-end exchange rates. Translation adjustments are accumulated as a separate component of stockholders’ equity in other comprehensive income. |
Management Estimates | 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 depreciation of furniture, equipment and software, asset retirement obligations (“AROs”) (Note 10), income taxes (Note 14) and the estimate of proved oil and gas reserves and related present value estimates of future net cash flows therefrom (Note 16). |
Cash and Cash Equivalents | 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. At December 31, 2019, the Company did not hold any cash equivalents. |
Receivables and Allowance for Doubtful Accounts | Receivables and allowance for doubtful accounts Oil revenues receivable do not bear any interest. These receivables are primarily comprised of joint interest billings. Management regularly reviews collectability and establishes or adjusts 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. |
Oil and Gas Properties | 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 un-weighted 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. 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. |
Furniture, Equipment and Software | 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. Management performs ongoing evaluations of the estimated useful lives of the property and equipment for depreciation purposes. Maintenance and repairs are expensed as incurred. Management periodically reviews 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. The Company recognizes 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. |
Derivative Financial Instruments | Derivative financial instruments The Company’s derivative financial instruments consist of warrants with an exercise price denominated in a currency other than the Company’s functional currency. These derivative financial instruments are measured at their fair value at the end of each reporting period. Changes in fair value are recorded in net income. |
Asset Retirement Obligations | Asset retirement obligations The Company records a liability for Asset Retirement Obligations (“AROs”) 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 | Debt issuance costs Costs incurred in connection with the issuance of long-term debt are presented as a direct deduction from the carrying value of the related debt and amortized over the term of the related debt. |
Revenue Recognition | Revenue recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Revenue from contracts with customers The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products. Performance obligations and significant judgments The Company sells oil and natural gas products in the United States through a single reportable segment. The Company enters into contracts that generally include one type of distinct product in variable quantities and priced based on a specific index related to the type of product. The oil and natural gas is typically sold in an unprocessed state to processors and other third parties for processing and sale to customers. The Company recognizes revenue at a point in time when control of the oil or natural gas passes to the customer or processor, as applicable, discussed below. For oil sales, control is typically transferred to the customer upon receipt at the wellhead or a contractually agreed upon delivery point. Under our natural gas contracts with processors, control transfers upon delivery at the wellhead or the inlet of the processing entity’s system. For our other natural gas contracts, control transfers upon delivery to the inlet or to a contractually agreed upon delivery point. In the cases where the Company sells to a processor, management has determined that the Company is the principal in the arrangement and the processors are customers. The Company recognizes the revenue in these contracts based on the net proceeds received from the processor. Transfer of control drives the presentation of transportation and gathering costs within the accompanying consolidated statements of operations. Transportation and gathering costs incurred prior to control transfer are recorded within the transportation and gathering expense line item on the accompanying consolidated statements of operations, while transportation and gathering costs incurred subsequent to control transfer are recorded as a reduction to the related revenue. A portion of our product sales are short-term in nature. For those contracts, the Company uses the practical expedient in Accounting Standards Codification (“ASC”) 606-10-50-14 exempting us from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For our product sales that have a contract term greater than one year, the Company has utilized the practical expedient in ASC 606-10-50-14(a) which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to an unsatisfied performance obligation. Under these sales contracts, each unit of product represents a separate performance obligation; therefore, future volumes are unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. The Company has no unsatisfied performance obligations at the end of each reporting period. Management does not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. There is a low level of uncertainty due to the precision of measurement and use of index-based pricing with predictable differentials. Additionally, any variable consideration identified is not constrained. |
Stock-Based Compensation | Stock-based compensation The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718. Stock-based compensation |
Income Taxes | Income taxes Income taxes are accounted for pursuant to ASC 740, Income Taxes 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, 2019 and 2018. The Company is required to file federal income tax returns in the United States and Canada, and in various state and local jurisdictions. The Company’s tax returns filed since the 2018 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. |
Earnings (Loss) Per Share | Earnings (loss) per share Basic earnings (loss) per share has been calculated based on the weighted-average number of common shares outstanding. The treasury stock method is used to compute the dilutive effect of the Company’s share-based compensation awards. Under this method, the incremental number of shares used in computing diluted earnings per share (“EPS”) is the difference between the number of shares assumed issued and purchased using assumed proceeds. 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 as all outstanding instruments are anti-dilutive. |
Concentration of Credit Risk | 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 2019 and 2018. The Company does not require collateral. While the Company believes its recorded receivables 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 | Fair value measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The hierarchy is broken down into three levels based on the observability of inputs as follows: ● Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment; ● Level 2 — Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly; and ● Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows: December 31, 2019 Level 1 Level 2 Level 3 Total Derivative liabilities — — 24,509 24,509 ARO liabilities — — 1,723,364 1,723,364 December 31, 2018 Derivative liabilities — — 37,013 37,013 ARO liabilities — — 1,509,622 1,509,622 The carrying value of cash, accounts receivable, other current assets, accounts payable, accounts payable – related parties, accrued liabilities and accrued liabilities – related parties, as reflected in the consolidated balance sheets, approximate fair value, due to the short-term maturity of these instruments. The carrying value of notes payable approximates their fair value due to immaterial changes in market interest rates and the Company’s credit risk since issuance of the instruments or due to their short-term nature. Derivative liabilities are remeasured at fair value every reporting period. The fair values are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, derivative liabilities are considered level 2 financial instruments. |
Related Parties | Related parties The Audit Committee approves all material related party transactions. The Audit Committee is provided with the details of each new, existing or proposed related party transaction, including the terms of the transaction, the business purpose of the transaction, and the benefits to the Company and the relevant related party. In determining whether to approve a related party transaction, the following factors are considered: (1) if the terms are fair to the Company, (2) if there are business reasons to enter into the transaction, (3) if the transaction would impair independence of an outside Director, or (4) if the transaction would present an improper conflict of interest for any Director or executive officer. Any member of the Audit Committee who has an interest in the transaction will abstain from voting on the approval of the related party transaction. |
Business Combinations | Business combinations In January 2017, the FASB issued ASU 2017-01 Business Combinations Clarifying the Definition of a Business |
Reclassifications | 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. |
Recent Accounting Pronouncements | 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 other than those discussed below. Leases In February 2016, the FASB issued ASU 2016-02, “Leases” Under ASU 2016-02, each lease agreement will be evaluated to identify the lease components and non-lease components at lease inception. The total consideration in the lease agreement will be allocated to the lease and non-lease components based on their relative standalone selling prices. In July 2018, the FASB issued ASU 2018-11, “Leases – Targeted Improvements” The Company adopted ASU 2016-02 on January 1, 2019 using the modified retrospective method, whereby a cumulative effect adjustment will be made as of that day with no retrospective effect. The Company applied the package of practical expedients such that for any expired or existing leases it will not reassess lease classification, initial direct costs or whether any expired or existing contracts are or contain leases. Note that the Company had no outstanding leases as of December 19, 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Derivative Liabilities Measured at Fair Value On Recurring Basis | Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows: December 31, 2019 Level 1 Level 2 Level 3 Total Derivative liabilities — — 24,509 24,509 ARO liabilities 1,723,364 1,723,364 December 31, 2018 Derivative liabilities — — 37,013 37,013 ARO liabilities 1,509,622 1,509,622 |
Acquisition of Bow Energy Ltd_2
Acquisition of Bow Energy Ltd., A Related Party (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The purchase price allocation can be summarized as follows: Cash $ 3,784 Other current assets 4,763 Deposits 337,997 Furniture, equipment & software 12,059 Unproved properties and properties not subject to amortization and excess purchase price 36,835,553 Accounts payable (1,157,876 ) Note payable $ (1,429,192 ) |
Schedule of Pro Forma Information | The amount of Bow’s loss included in Petrolia’s consolidated income statement for the year ended December 31, 2018 and the loss of the combined entity had the acquisition date been January 1, 2017, are as follows: Revenue Earnings (Loss) February 28, 2018 to December 31, 2018 $ — $ (211,676 ) Supplemental pro forma from January 1, 2018 to December 31, 2018 — (38,079,663 ) Supplemental pro forma from January 1, 2017 to December 31, 2017 $ 3,103,394 $ (3,961,356 ) |
Disposition of Bow Energy Ltd_2
Disposition of Bow Energy Ltd., A Related Party (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disposition Of Bow Energy Ltd. Related Party | |
Schedule of Consideraion Received for Sale of Business | The total consideration received for the sale of Bow is summarized as follows: Cash $ 100,000 Shares returned to treasury (70,807,417 shares at $0.07 per share) 4,956,519 Fair value of retained non-controlling interest (20% of $4,683,893 net liabilities of BEIH) — (1) Total consideration received $ 5,056,519 (1) |
Schedule of Loss on Acquisition and Disposition of Business | The total loss on acquisition and disposition of Bow is summarized as follows: Total consideration paid for the acquisition of Bow $ 34,607,088 Total consideration received for the disposition of Bow (5,056,519 ) Change in net assets of Bow during the ownership period (231,015 ) Loss on acquisition and disposition of Bow $ 29,319,554 |
Evaluated Properties (Tables)
Evaluated Properties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Acquired and Current Properties | The acquired properties and current properties can be summarized as follows: Cost Canadian properties US properties Total As at December 31, 2017 — 14,312,580 14,312,580 Additions 1,246,216 — 1,246,216 Dispositions — (3,962,042 ) (3,962,042 ) Asset retirement cost additions 1,313,982 — 1,313,982 Foreign currency translations (116,451) (116,451 ) As at December 31, 2018 $ 2,443,747 $ 10,350,538 $ 12,794,285 Additions — — — Dispositions — — — Asset retirement cost additions — — — Foreign currency translation 119,687 — 119,687 As at December 31, 2019 2,563,434 10,350,538 12,913,972 Accumulated depletion As of December 31, 2017 — 1,068,795 1,068,795 Dispositions — (3,340,779 ) (3,340,779 ) Impairment of oil and gas properties — 2,322,255 2,322,255 Depletion 435,722 11,280 447,002 Foreign currency translations (22,065 ) — (22,065 ) As at December 31, 2018 413,657 61,551 475,208 Dispositions — Impairment of oil and gas properties — Depletion 1,004,832 — 1,004,832 Foreign currency translation 40,487 — 40,487 As at December 31, 2019 $ 1,458,976 61,551 1,520,527 Net book value as at December 31, 2019 $ 1,104,458 $ 10,288,987 $ 11,393,445 Net book value as at December 31, 2018 $ 2,030,090 10,288,987 12,319,077 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Interest rate Date of maturity December 31, 2019 December 31, 2018 Backhoe loan (i) 2.9 % May 8, 2017 $ — $ 32,601 Truck loan (ii) 5.49 % January 20, 2022 16,141 23,237 Credit note I (iii) 12 % May 11, 2021 800,000 800,000 Credit note II (iv) 12 % October 17, 2019 346,038 196,038 Credit note III (v) 15 % April 25, 2021 750,000 — Discount on credit note III — — (25,101 ) — Mark Allen (not related party at balance sheet date) 12 % June 30, 2021 200,000 — M. Hortwitz 10 % October 14, 2016 10,000 10,000 2,097,078 1,061,876 Current portion: Truck loan 7,502 15,999 Credit note I 90,000 710,000 Credit note II 346,038 — Mark Allen 200,000 — M. Hortwitz 10,000 — Current portion of notes payable $ 653,540 $ 725,999 (i) On May 8, 2014, the Company, purchased a backhoe. The Company assumed an installment note in the amount of $57,613 for a term of three years and interest at 2.9% per annum. The backhoe was returned to the seller, consequently the outstanding debt balance of $32,601 was forgiven in 2019. (ii) On January 6, 2017, the Company purchased a truck and entered into an installment note in the amount of $35,677 for a term of five years and interest at 5.49% per annum. Payments of principal and interest in the amount of $683 are due monthly. (iii) On May 9, 2018, Bow entered into an Amended and Restated Loan Agreement with a third party. The Loan Agreement increased by $800,000 the amount of a previous loan agreement entered into between Bow and the Lender, to $1,530,000. The amount owed under the Loan Agreement accrues interest at the rate of 12% per annum (19% upon the occurrence of an event of default) and is due and payable on May 11, 2021, provided that the amount owed can be prepaid prior to maturity, beginning 60 days after the date of the Loan Agreement, provided that the Company gives the Lender 10 days’ notice of our intent to repay and pays the Lender the interest which would have been due through the maturity date at the time of repayment. The Loan Agreement contains standard and customary events of default, including cross defaults under other indebtedness obligations of us and Bow, and the occurrence of any event which would have a material adverse effect on us or Bow. The Company is required to make principal payments of $10,000 per month from January through September 2019 with the remaining balance of $710,000 due at maturity on May 11, 2021. The additional $800,000 borrowed in connection with the entry into the Loan Agreement was used by the Company to acquire the Working Interest in the Canadian Properties described in Note 6. In order to induce the Lender to enter into the Loan Agreement, the Company agreed to issue the Lender 500,000 shares of restricted common stock (the “Loan Shares”), which were issued on May 18, 2018, and warrants to purchase 2,320,000 shares of common stock (the “Loan Warrants”), of which warrants to purchase (a) 320,000 shares of common stock have an exercise price of $0.10 per share in Canadian dollars and expire in May 15, 2021, (b) 500,000 shares of common stock have an exercise price of $0.12 per share in U.S. dollars, and expire on May 15, 2021; and (c) 1,500,000 shares of common stock have an exercise price of $0.10 per share in U.S. dollars and expire on May 15, 2020. The fair value of the 500,000 common shares issued were assessed at the market price of the stock on the date of issuance and valued at $47,500. The fair value of the Canadian dollar denominated warrants issued were assessed at $30,012 using the Black Scholes Option Pricing Model. The fair value of the U.S. dollar denominated warrants issued were assessed at $182,650 using the Black Scholes Option Pricing Model. The Company determined the debt modification to be an extinguishment of debt and recorded a total loss on extinguishment of debt of $260,162. Upon the disposition of Bow pursuant to the Exchange Agreement described under Note 5, a total of $730,000 of the obligations owed under the Loan Agreement were transferred to Blue Sky. (iv) On September 17, 2018, the Company entered into a loan agreement (LOC) with a third party for $200,000 (which was later increased to $500,000) to acquire an additional 3% working interest in the Canadian Properties (See Note 6). The loan bears interest at 3.5% per annum and has a maturity date of October 17, 2019. Payments of principal and interest in the amount of $6,000 are due monthly. The loan is secured against the Company’s 3% Working Interest in the Canadian Properties and has no financial covenants. During 2019, the LOC balance increased by $150,000 resulting in a $346,038 ending balance. (v) On April 25, 2019, the Company entered into a promissory note (an Acquisition Note”) with a third party in the amount of $750,000 to acquire working interests in the Utikuma oil field in Alberta Canada. The Note bears interest at 15% per annum and is due in full at maturity at April 25, 2021. No payments are required on the note until maturity while interest is accrued. In addition, warrants to purchase 500,000 shares of common stock with an exercise price of $0.012 per share expiring on May 1, 2021 were issued associated with the note and were recorded as a debt discount on the balance sheet. The notes hold a security guarantee of a 50% Working Interest in the Utikima oil field and a 100% Working Interest in the Twin Lakes Properties. During 2019, the Company entered into a loan agreement in the amount of $200,000 with a third party. The note bears interest at an interest rate of 12% per annum and matures on June 30, 2021. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 2,500,000 shares of common stock at $0.08 per share. In addition, upon conversion, the note holder will also receive 10,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. On January 15, 2019, the Company entered into a loan agreement in the amount of $125,000 with a third party. The note bore interest at an interest rate of $4% per annum and was to mature on January 15, 2020. On September 30, 2019, Jovian Petroleum Corporation reimbursed the $125,000 to the third party. Consequently, the $125,000 debt balances was transferred into the Jovian LOC and is now included in the $362,583 at December 31, 2019 (see Note 8: Related Party Notes Payable) |
Schedule of Future Minimum Repayments of Notes Payable | The following is a schedule of future minimum repayments of notes payable as of December 31, 2019: 2020 653,540 2021 1,442,966 2022 572 Thereafter — $ 2,097,078 |
Related Party Notes Payable (Ta
Related Party Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Notes Payable | The chart below summarizes the related party Notes Payable as of December 31, 2019 and 2018. Interest rate Date of maturity December 31, 2019 December 31, 2018 Leo Womack (i) — On demand — 3,000 Lee Lytton (i) — On demand 3,500 3,500 Quinten Beasley 10 % October 14, 2016 10,000 10,000 Joel Oppenheim (i) — On demand 217,208 215,333 Joel Oppenheim 12 % On demand 15,000 — Bow Energy Ltd. (i) — On demand — 33,144 Blue Sky Resources (i) — On demand — 131,699 Jovian Petroleum Corporation (ii) 3.5 % December 31, 2021 362,583 35,210 Ivar Siem (iii) 12 % On demand 100,000 20,000 Ivar Siem (iii) 12 % On demand 75,000 — Joel Oppenheim (iii) 12 % December 31, 2019 200,000 10,000 Blue Sky Resources (iv) 9 % May 31, 2019 — 148,862 $ 983,291 $ 610,748 Note: Mark Allen’s notes were not included in related party notes payable at December 31, 2019 because he was not appointed as an officer of the Company until September 1, 2020. In September 2020 his notes will be reported in related party notes payable. (i) Balances are non-interest bearing and due on demand. (ii) On February 9, 2018, the Company entered into a Revolving Line of Credit Agreement (“LOC”) for $200,000 (subsequently increased to $500,000 on April 12, 2018) with Jovian Petroleum Corporation. The CEO of Jovian is Quinten Beasley, our former director (resigned October 31, 2018), and 25% of Jovian is owned by Zel C. Khan, our CEO and director. The initial agreement is for a period of 6 months and can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to year-end this LOC has been extended until December 31, 2021. (iii) On August 17, 2018, the Company sold an aggregate of $90,000 in convertible promissory notes (the “Director Convertible Notes”), to the Company’s directors, Ivar Siem ($20,000) through an entity that he is affiliated with; Leo Womack ($60,000); and Joel Oppenheim ($10,000). The Director Convertible Notes accrue interest at the rate of 12% per annum until paid in full and were due and payable on October 17, 2018. The amount owed may be prepaid at any time without penalty. The outstanding principal and interest owed under the Director Convertible Notes are convertible into common stock of the Company, from time to time, at the option of the holders of the notes, at a conversion price of $0.10 per share. As additional consideration for entering into the notes, the Company agreed to grant warrants to purchase one share of the Company’s common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the “Bridge Note Warrants”). The warrants had a contractual life of one year. As such, the Company granted (a) 20,000 Bridge Note Warrants to an entity affiliated with Ivar Siem; (b) 60,000 Bridge Note Warrants to Leo Womack; and (c) 10,000 Bridge Note Warrants to Joel Oppenheim. The Director Convertible Notes contain standard and customary events of default. The Company fair valued the warrants issued using the Black-Scholes Option Pricing Model for a total fair value of $6,249. On October 22, 2018, $60,000 in Director Convertible Notes were settled by offsetting against $60,000 proceeds required for the exercise of warrants. On August 15, 2019, the Company entered into a loan agreement in the amount of $200,000 with Joel Oppenheim. The note bears interest at an interest rate of 12% per annum and payments of $50,000 are due monthly beginning September 2, 2019 with the remaining balance due in full at maturity on December 31, 2019. In association with the loan, the Company issued 200,000 warrants at an exercises price of $0.10 per share that expire on August 15, 2021. The warrants fully vest on maturity date. The notes are secured by a 50% Working Interest in the SUDS field and Noack field sale proceeds. On August 15, 2019, the Company entered into a loan agreement in the amount of $75,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a four (4) month maturity. On December 4, 2019, the Company entered into a loan agreement in the amount of $100,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a six (6) month maturity. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. (iv) On June 8, 2018, the Company entered into the Acquisition Note with Blue Sky in the amount of CAD$406,181. The Note bears interest at 9% per annum and is due in full at maturity on November 30, 2018. The Company may, at its sole discretion, extend the maturity date for a period of six months with notice to the lender and payment of 25% of the principal amount. At December 31, 2018, the maturity date had been extended to May 31, 2019. On April 1, 2019, the Company utilized its LOC with Jovian to pay off in its entirety the June 8, 2018 Acquisition Note with Blue Sky. |
Schedule of Future Minimum Repayments of Related Party Notes Payable | The following is a schedule of future minimum repayments of related party notes payable as of December 31, 2019: 2020 $ 983,291 Thereafter — $ 983,291 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Derivative Liabilities | A summary of the activity of the derivative liabilities is shown below: Balance, January 1, 2019 $ 37,013 Fair value adjustments (12,504 ) As at December 31, 2019 $ 24,509 |
Schedule of Derivative Liability of Fair Value Assumption | Expected life was determined based on historical exercise data of the Company. December 31, 2019 Risk-free interest rate 1.58% - 2.27 % Expected life 1.4 - 2.1 years Expected dividend rate 0 % Expected volatility 208% - 240 % |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Measurement of Fair Value Liability | Revisions to estimated AROs can result from changes in retirement cost estimates, revisions to estimated discount rates and changes in the estimated timing of abandonment. December 31, 2019 Level 1 Level 2 Level 3 Total Derivative liabilities — — 24,509 24,509 ARO liabilities — — 1,723,364 1,723,364 December 31, 2018 Derivative liabilities — — 37,013 37,013 ARO liabilities — — 1,509,622 1,509,622 |
Schedule of Fair value of Asset Retirement Obligations | For the purpose of determining the fair value of AROs incurred during the years presented, the Company used the following assumptions: December 31, 2019 Inflation rate 1.92 - 2.15 % Estimated asset life 12 - 22 years |
Schedule of Asset Retirement Obligations | The following table shows the change in the Company’s ARO liability for the years ended December 31, 2019 and 2018: Canadian properties United States properties Total Asset retirement obligations, December 31, 2017 $ — $ 473,868 $ 473,868 Additions 1,313,982 — 1,313,982 Accretion expense 4,353 23,618 23,618 Disposition — (246,263 ) (246,263 ) Foreign currency translation (59,936 ) — (59,936 ) Asset retirement obligations, December 31, 2018 1,258,399 251,223 1,509,622 Additions — — — Accretion expense 123,474 26,150 149,624 Disposition — — — Foreign currency translation 64,118 — 64,118 Asset retirement obligations, December 31, 2019 $ 1,445,991 $ 277,373 $ 1,723,364 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Common Stock Purchase Warrants Issued and Outstanding | Continuity of the Company’s common stock purchase warrants issued and outstanding is as follows: Warrants Weighted average exercise price Outstanding at year ended December 31, 2017 35,087,197 0.24 Granted 24,829,666 0.11 Exercised (3,910,000 ) 0.09 Expired (4,940,000 ) 0.10 Outstanding at year ended December 31, 2018 51,066,864 $ 0.20 Granted 12,250,000 0.15 Exercised (125,000 ) 0.09 Expired (6,148,028 ) 0.25 Outstanding at quarter ended December 31, 2019 57,043,836 0.14 |
Schedule of Warrants Issuances During Period | The table below summarizes warrant issuances during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 2018 Warrants granted: Board of directors and advisory board service 7,000,000 7,750,000 Private placements 3,750,000 5,312,500 Pursuant to termination agreements — 5,250,000 Pursuant to financing arrangements 1,500,000 3,810,000 Pursuant to consulting agreements — 2,000,000 Pursuant to acquisition of Bow Energy Ltd., a related party — 368,000 Deferred salary – CEO, CFO — 339,166 Total 12,250,000 24,829,666 |
Schedule of Fair Value of Assumptions | Expected life was determined based on historical exercise data of the Company. December 31, 2019 December 31, 2018 Risk-free interest rate 1.94% to 2.39 % 2.39 % Expected life 1.0 - 3.0 years 1.0 - 3.0 years Expected dividend rate 0 % 0 % Expected volatility 240% - 283 % 274% - 283 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expenses | The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate of 21% (2019 – 21%) on operations due primarily to permanent differences attributable to organizational expenses. Fiscal Year Ended Fiscal Year Ended Income tax (benefit) expense computed at statutory rates $ (629,000 ) $ (7,986,000 ) Non-deductible items 69,000 3,807,000 Change in statutory, foreign tax, foreign exchange rates and other 172,000 943,000 Change in valuation allowance 388,000 3,236,000 Total $ — $ — |
Schedule of Deferred Tax Assets | The significant components of the net deferred tax asset were as follows: December 31, 2019 2018 Deferred tax assets $ Net operating loss carryforwards $ 2,174,000 $ 5,410,000 Asset retirement obligation 331,000 236,000 Oil and gas properties (430,000 ) (716,000 ) Property and equipment — ) (7,000 ) Other — — Total deferred tax assets (liabilities) 2,075,000 4,923,000 Less: Valuation allowance (2,075,000 ) (4,923,000 ) Net deferred tax assets (liabilities) $ — $ — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Long-lived Assets | Results of operations from producing activities were as follows for the years ended December 31, 2019 and 2018: Canada United States Total Year ended December 31, 2019 Revenue $ 2,827,877 $ 88,857 $ 2,916,734 Production costs (3,021,805 ) (365,294 ) (3,387,099 ) Depreciation, depletion, amortization and accretion (1,004,832 ) (32,187 ) (1,037,019 ) Results of operations from producing activities $ (1,198,760 ) $ (308,624 ) $ (1,507,384 ) Total long-lived assets $ 1,104,458 $ 10,346,630 $ 11,451,088 Year ended December 31, 2018 Revenue $ 1,118,283 $ 54,777 $ 1,173,060 Production costs (1,239,317 ) (302,102 ) (1,541,419 ) Depreciation, depletion, amortization and accretion (440,075 ) (50,898 ) (490,973 ) Results of operations from producing activities $ (561,109 ) $ (298,223 ) $ (859,332 ) Total long-lived assets $ 2,030,090 $ 10,625,808 $ 12,408,907 |
Schedule of Revenues | The Company’s revenues are derived from the following major customers: December 31, 2019 December 31, 2018 Customer A $ 2,827,877 $ 1,118,283 Customer B 88,857 54,777 Other customers — — Total revenues $ 2,916,734 $ 1,173,060 |
Supplemental Information Rela_2
Supplemental Information Relating to Oil and Gas Producing Activities (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
Schedule of Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development | In 2019, the Company did not make any acquisitions or purchase any working interests. Fiscal Year Ended Fiscal Year Ended Property acquisitions $ — $ 1,189,480 Unevaluated — — Evaluated — — Exploration — — Development — — Total costs incurred $ — $ 1,189,480 |
Schedule of Capitalized Costs in Oil and Gas Property Acquisition, Exploration and Development | 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. December 31, 2019 December 31, 2018 Capitalized costs: — — Unevaluated properties $ — $ — Evaluated properties 12,913,972 12,794,285 12,913,972 12,794,285 Less: Accumulated DD&A (1,520,527 ) (475,208 ) Net capitalized costs $ 11,393,445 $ 12,319,077 |
Schedule of Proved Oil and Gas Reserves | 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) December 31, 2017 1,638,200 Revisions of prior estimates 181,678 Purchases of reserves in place 320,865 Disposition of mineral in place (194,650 ) Production (51,913 ) December 31, 2018 1,894,180 Revisions of prior estimates (11,217 ) Purchases of reserves in place — Disposition of mineral in place — Production (82,506 ) December 31, 2019 1,800,457 |
Schedule of Proved Developed and Undeveloped Reserves | December 31, 2019 December 31, 2018 Estimated quantities of proved developed reserves – Oil (Bbls) 1,688,437 1,773,800 Estimated quantities of proved undeveloped reserves – Oil (Bbls) 112,020 120,380 The following table sets forth estimates of the proved developed and proved undeveloped oil and gas reserves (net of royalty interests) for the Company and changes therein, for the period indicates. Proved developed producing and non-producing reserve Oil (bbls) December 31, 2018 1,773,800 Acquired reserves — Disposition of reserves — Revision of prior estimates (2,857 ) Production (82,506 ) December 31, 2019 1,688,437 Proved undeveloped reserves Oil (bbls) December 31, 2018 120,380 Acquired reserves — Revisions to prior estimates (8,360 ) December 31, 2019 112,020 |
Schedule of Standardized Measure of Discounted Future Net Cash Flows | 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, 2019 December 31, 2018 Future cash inflows $ 95,308,120 $ 89,797,082 Future production costs (30,349,800 ) (37,021,141 ) Future development costs (2,051,730 ) (2,394,080 ) Future income taxes — — Future net cash flows 62,906,590 50,381,861 Discount of future net cash flows at 10% per annum (37,081,860 ) (26,743,136 ) Standardized measure of discounted future net cash flows $ 25,824,730 $ 23,638,725 |
Schedule of Changes in Standardized Measure of Discounted Future Cash Flows | Changes in standardized measure of discounted future cash flows December 31, 2019 December 31, 2018 Beginning of year $ 23,638,725 $ 16,605,980 Sales and transfers of oil & gas produced, net of production costs (1,514,335 ) 368,421 Net changes in prices and production costs 5,780,704 4,178,977 Changes in estimated future development costs (676,141 ) (5,742,027 ) Acquisitions/dispositions of minerals in place, net of production costs — 1,544,720 Revision of previous estimates (878,772 ) 2,462,456 Change in discount 1,386,793 286,849 Change in production rate or other (1,912,244 ) 3,933,348 End of year $ 25,824,730 $ 23,638,725 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | |
Dec. 31, 2019USD ($)Number | Dec. 31, 2018USD ($)Number | |
Cash equivalents | ||
Unrecognized tax benefits | ||
Interest or penalties recognized | ||
Number of purchasers accounted for sales revenue | Number | 2 | 2 |
Furniture, Equipment and Software [Member] | Minimum [Member] | ||
Estimated useful life | 3 years | |
Furniture, Equipment and Software [Member] | Maximum [Member] | ||
Estimated useful life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Derivative Liabilities Measured at Fair Value On Recurring Basis (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative liabilities | $ 24,509 | $ 37,013 |
ARO liabilities | 1,723,364 | 1,509,622 |
Level 1 [Member] | ||
Derivative liabilities | ||
ARO liabilities | ||
Level 2 [Member] | ||
Derivative liabilities | ||
ARO liabilities | ||
Level 3 [Member] | ||
Derivative liabilities | 24,509 | 37,013 |
ARO liabilities | $ 1,723,364 | $ 1,509,622 |
Acquisition of Bow Energy Ltd_3
Acquisition of Bow Energy Ltd., A Related Party (Details Narrative) | Feb. 27, 2018USD ($)shares | Feb. 02, 2018USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Aug. 31, 2019$ / shares | Sep. 17, 2018 | Jun. 29, 2018a | May 09, 2018$ / shares | May 24, 2017a |
Percentage of working interest acquired | 3.00% | ||||||||
Area of land | a | 41,526 | ||||||||
Stock issued during period, value, acquisitions | $ | $ 34,607,088 | ||||||||
Shares issued, price per share | $ / shares | $ 0.09 | ||||||||
Bow Energy Ltd [Member] | |||||||||
Stock issued during period shares acquisitions | shares | 106,156,172 | 37,000 | 106,156,172 | ||||||
Description on business acquisition | Under the terms of the Arrangement, Bow shareholders are deemed to have received 1.15 Petrolia common stock shares for each Bow Share. A total of 106,156,712 shares of the Company's common stock were issued to the Bow shareholders as a result of the Arrangement, plus additional shares in connection with the rounding described below. The Arrangement provided that no fractional shares would be issued in connection with the Arrangement, and instead, each Bow shareholder otherwise entitled to a fractional interest would receive the nearest whole number of Company shares. For example, where such fractional interest is greater than or equal to 0.5, the number of shares to be issued would be rounded up to the nearest whole number and where such fractional interest is less than 0.5, the number of shares to be issued would be rounded down to the nearest whole number. In calculating such fractional interests, all shares issuable in the name of or beneficially held by each Bow shareholder or their nominee as a result of the Arrangement shall be aggregated. | ||||||||
Number of warrant issued | shares | 320,000 | 320,000 | |||||||
Value of shares issued in acquisition | $ | $ 103,632 | ||||||||
Stock issued during period, value, acquisitions | $ | $ 34,607,088 | $ 100,000 | $ 34,607,088 | ||||||
Number of shares issued to acquire business | shares | 100,000 | ||||||||
Value of shares issued to acquire business | $ | $ 37,000 | ||||||||
Shares issued, price per share | $ / shares | $ 0.37 | $ 0.37 | $ 0.07 | ||||||
Business combination, consideration transferred, liabilities incurred | $ | $ 103,632 | ||||||||
Bow Energy Ltd [Member] | Renco Elang Energy Pte. Ltd. [Member] | |||||||||
Percentage of ownership interest | 75.00% | ||||||||
Bow Energy Ltd [Member] | South Block A PSC [Member] | |||||||||
Percentage of ownership interest | 75.00% | ||||||||
Percentage of working interest acquired | 44.48% | ||||||||
Bow Energy Ltd [Member] | Bohorok PSC [Member] | |||||||||
Percentage of working interest acquired | 50.00% | ||||||||
Area of land | a | 465,266 | ||||||||
Bow Energy Ltd [Member] | Palmerah Baru [Member] | |||||||||
Percentage of working interest acquired | 54.00% | ||||||||
Area of land | a | 98,977 | ||||||||
Bow Energy Ltd [Member] | Palmerah Deep Pte. Ltd [Member] | |||||||||
Percentage of working interest acquired | 69.36% | ||||||||
Area of land | a | 170,398 | ||||||||
Bow Energy Ltd [Member] | Mahato PSC [Member] | |||||||||
Percentage of working interest acquired | 20.00% | ||||||||
Area of land | a | 167,115 | ||||||||
Bow Energy Ltd [Member] | Bohorok Deep JSA [Member] | |||||||||
Percentage of working interest acquired | 20.25% |
Acquisition of Bow Energy Ltd_4
Acquisition of Bow Energy Ltd., A Related Party - Schedule of Purchase Price Allocation (Details) - Bow Energy Ltd [Member] | May 24, 2017USD ($) |
Cash | $ 3,784 |
Other current assets | 4,763 |
Deposits | 337,997 |
Furniture, equipment & software | 12,059 |
Unproved properties and properties not subject to amortization and excess purchase price | 36,835,553 |
Accounts payable | (1,157,876) |
Note payable | $ (1,429,192) |
Acquisition of Bow Energy Ltd_5
Acquisition of Bow Energy Ltd., A Related Party - Schedule of Pro Forma Information (Details) - USD ($) | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | |||
Revenues | $ 3,103,394 | ||
Earnings (Loss) | $ (211,676) | $ (38,079,663) | $ (3,961,356) |
Disposition of Bow Energy Ltd_3
Disposition of Bow Energy Ltd., A Related Party (Details Narrative) - USD ($) | Aug. 31, 2019 | Sep. 17, 2018 | Aug. 31, 2018 | May 09, 2018 | Feb. 27, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 02, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Cash consideration | $ 150,000 | $ 944,055 | $ 932,441 | |||||
Shares issued, price per share | $ 0.09 | |||||||
Bow Energy Ltd [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Shares issued, price per share | $ 0.07 | |||||||
Non-controlling interest percentage | 20.00% | |||||||
Blue Sky Resources Ltd [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Equity method investment fair value | $ 0 | |||||||
Share Exchange Agreement [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Profit sharing percentage | 20.00% | |||||||
Loan Agreement [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Shares issued, price per share | $ 0.08 | |||||||
Bow Energy Ltd [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of common stock owned | $ 103,632 | |||||||
Number of shares returned to treasury stock | 70,807,417 | 70,807,417 | ||||||
Shares issued, price per share | $ 0.07 | $ 0.37 | $ 0.37 | |||||
Number of shares returned to treasury stock, value | $ 4,956,519 | |||||||
Bow Energy Ltd [Member] | Share Exchange Agreement [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Profit sharing percentage | 80.00% | |||||||
Bow Energy Ltd [Member] | Share Exchange Agreement [Member] | President, Chief Executive Officer [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Percentage of ownership interest | 100.00% | |||||||
Blue Sky Resources Ltd [Member] | Share Exchange Agreement [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Percentage of ownership interest | 20.00% | |||||||
Royalty percentage | 3.00% | |||||||
Loss on its investment | 11,247 | |||||||
Carrying value of investment | $ 0 | |||||||
Blue Sky Resources Ltd [Member] | Share Exchange Agreement [Member] | Mr. Chaudhary [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of common stock owned | $ 70,807,417 | |||||||
Cash consideration | 100,000 | |||||||
Royalty recovery amount under agreement | 3,546,450 | |||||||
Blue Sky Resources Ltd [Member] | Loan Agreement [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Assumption of payables | 730,000 | $ 800,000 | ||||||
Amount of aggregate costs to carry | $ 10,000,000 |
Disposition of Bow Energy Ltd_4
Disposition of Bow Energy Ltd., A Related Party - Schedule of Consideraion Received for Sale of Business (Details) - USD ($) | Aug. 31, 2018 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total consideration received | $ (5,056,519) | ||
Bow Energy Ltd [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash | $ 100,000 | ||
Shares returned to treasury (70,807,417 shares at $0.07 per share) | 4,956,519 | ||
Fair value of retained non-controlling interest (20% of $4,683,893 net liabilities of BEIH) | [1] | ||
Total consideration received | $ 5,056,519 | ||
[1] | Initially recognized at $0 as the entity is in a net liability position. |
Disposition of Bow Energy Ltd_5
Disposition of Bow Energy Ltd., A Related Party - Schedule of Consideraion Received for Sale of Business (Details) (Parenthetical) - USD ($) | Aug. 31, 2019 | Aug. 31, 2018 | Dec. 31, 2019 | May 09, 2018 | Feb. 02, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Shares issued, price per share | $ 0.09 | ||||
Bow Energy International Holdings Inc [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Non-controlling interest percentage | 20.00% | ||||
Liabilities net | $ 4,683,893 | ||||
Bow Energy Ltd [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of shares returned | 70,807,417 | 70,807,417 | |||
Shares issued, price per share | $ 0.07 | $ 0.37 | $ 0.37 | ||
Liabilities net | $ 0 |
Disposition of Bow Energy Ltd_6
Disposition of Bow Energy Ltd., A Related Party - Schedule of Loss on Acquisition and Disposition of Business (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | ||
Total consideration paid for the acquisition of Bow | $ 34,607,088 | |
Total consideration received for the disposition of Bow | (5,056,519) | |
Change in net assets of Bow during the ownership period | (231,015) | |
Loss on acquisition and disposition of Bow | $ 29,319,554 |
Evaluated Properties (Details N
Evaluated Properties (Details Narrative) | Aug. 06, 2019USD ($) | Apr. 25, 2019USD ($) | Apr. 15, 2019USD ($) | Jan. 15, 2019USD ($) | Nov. 02, 2018USD ($) | Sep. 17, 2018USD ($) | Jun. 29, 2018aNumber | Jun. 08, 2018CAD ($) | Jun. 01, 2018USD ($) | Jun. 01, 2018CAD ($) | May 09, 2018USD ($) | Sep. 29, 2017 | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Aug. 15, 2019USD ($) |
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of working interest acquired | 3.00% | |||||||||||||||
Proceeds from 2nd NOACK sale | $ 375,000 | |||||||||||||||
Purchase price | 34,607,088 | |||||||||||||||
Cash payment | $ 3,784 | |||||||||||||||
Debt instrument description | The Company entered into a Memorandum of Understanding ("MOU") with Blue Sky. Pursuant to the MOU, the Company acquired an additional 3% working interest in the Canadian Properties, increasing our Working Interest to 28%. Total consideration paid from the Company to Blue Sky for the additional 3% Working Interest was $150,000. | |||||||||||||||
Increased working interest | 28.00% | |||||||||||||||
Acquisition Note [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Debt instrument face amount | $ 750,000 | |||||||||||||||
Debt interest rate | 15.00% | 9.00% | ||||||||||||||
Debt instrument maturity date | Apr. 25, 2021 | Nov. 30, 2018 | ||||||||||||||
Debt instrument description | Extend the maturity date for a period six months with 10 days' notice to Blue Sky, in the event the Company pays 25% of the principal amount of the Acquisition Note at the time of extension. | |||||||||||||||
Undeveloped Land [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Number of acres | a | 21,760 | |||||||||||||||
Blue Sky [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of working interest acquired | 3.00% | |||||||||||||||
Purchase price | $ 1,096,216 | |||||||||||||||
Cash payment | 782,441 | |||||||||||||||
Debt instrument face amount | 313,775 | |||||||||||||||
Cash payment for working interest acquired | $ 150,000 | |||||||||||||||
Blue Sky [Member] | Acquisition Note [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Debt interest rate | 9.00% | |||||||||||||||
Debt instrument maturity date | Nov. 30, 2018 | |||||||||||||||
Debt instrument description | The Company may, at its sole discretion, extend the maturity date for a period of six months with notice to the lender and payment of 25% of the principal amount. | |||||||||||||||
Blue Sky [Member] | Canadian Dollars [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of working interest acquired | 80.00% | |||||||||||||||
Purchase price | $ 1,428,581 | |||||||||||||||
Cash payment | $ 1,022,400 | |||||||||||||||
Debt instrument face amount | $ 406,181 | |||||||||||||||
Blue Sky [Member] | Canadian Dollars [Member] | Acquisition Note [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Debt instrument face amount | $ 406,181 | |||||||||||||||
Amended and Restated Loan Agreement [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash payment for working interest acquired | $ 1,530,000 | |||||||||||||||
Loan Agreement [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Debt instrument face amount | $ 125,000 | $ 200,000 | $ 200,000 | |||||||||||||
Debt interest rate | 4.00% | 3.50% | 12.00% | 12.00% | ||||||||||||
Debt default percentage | 19.00% | |||||||||||||||
Debt instrument maturity date | Jan. 15, 2020 | Oct. 17, 2019 | May 11, 2021 | May 11, 2021 | Jun. 30, 2021 | |||||||||||
NOACK [Member] | Purchase and Sale Agreement [Member] | FlowTex Energy L.L.C. [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Proceeds from 2nd NOACK sale | $ 375,000 | |||||||||||||||
Deposit | $ 380,000 | $ 20,000 | ||||||||||||||
Receivable for the sale | 25,000 | |||||||||||||||
Debt payment principal | $ 400,000 | |||||||||||||||
Gain on sale of properties | $ 400,000 | |||||||||||||||
NOACK [Member] | Crossroads Petroleum L.L.C. [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Leasehold net revenue interest, percentage | 83.00% | |||||||||||||||
Percentage of working interest acquired | 100.00% | |||||||||||||||
Proceeds from 2nd NOACK sale | $ 375,000 | |||||||||||||||
Deposit | $ 260,000 | $ 115,000 | ||||||||||||||
Receivable for the sale | $ 120,000 | |||||||||||||||
Payments for previous acquisitions forfeited | $ 255,000 | |||||||||||||||
SUDS [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Acquired field, description | The SUDS Field is a 2604-acre lease located in Creek County, 36 miles Southwest of Tulsa, Oklahoma. The field was first discovered in 1918 by SOHIO Oil Company utilizing over 100 wells with the primary objective to produce from the Dutcher Sands at an average well depth of 3,100 ft. | |||||||||||||||
TLSAU [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of working interest acquired | 100.00% | |||||||||||||||
Acquired field, description | TLSAU is located 45 miles from Roswell, Chaves County, New Mexico and consists of 3,864 acres with 58 wells. The last independent reserve report prepared by MKM Engineering on December 31, 2019, reflects approximately 752,000 barrels of proven oil reserves remaining for the 100% working interest | |||||||||||||||
Luseland, Hearts Hill and Cuthbert Fields [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of working interest acquired | 25.00% | |||||||||||||||
Acquired field, description | The Canadian Properties currently encompass 64 sections, with 240 oil and 12 natural gas wells currently producing on the properties. Additionally, there are several idle wells with potential for reactivation and 34 sections of undeveloped land (approximately 21,760 acres). | |||||||||||||||
Number of acres | a | 41,526 | |||||||||||||||
Number of producing oil wells | Number | 240 | |||||||||||||||
Number of producing natural gas wells | Number | 12 |
Evaluated Properties - Schedule
Evaluated Properties - Schedule of Acquired and Current Properties (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Cost, Beginning balance | $ 12,794,285 | $ 14,312,580 |
Cost, Additions | 1,246,216 | |
Cost, Dispositions | (3,962,042) | |
Cost, Asset retirement cost additions | 1,313,982 | |
Cost, Foreign currency translation | 119,687 | (116,451) |
Cost, Ending balance | 12,913,972 | 12,794,285 |
Accumulated depletion, Beginning balance | 475,208 | 1,068,795 |
Accumulated depletion, Dispositions | (3,340,779) | |
Accumulated depletion, Impairment of oil and gas properties | 2,322,255 | |
Accumulated depletion, Depletion | 1,004,832 | 447,002 |
Accumulated depletion, Foreign currency translation | 40,487 | (22,065) |
Accumulated depletion, Ending balance | 1,520,527 | 475,208 |
Net book value as at ending balance | 11,393,445 | 12,319,077 |
Canadian Properties [Member] | ||
Business Acquisition [Line Items] | ||
Cost, Beginning balance | 2,443,747 | |
Cost, Additions | 1,246,216 | |
Cost, Dispositions | ||
Cost, Asset retirement cost additions | 1,313,982 | |
Cost, Foreign currency translation | 119,687 | (116,451) |
Cost, Ending balance | 2,563,434 | 2,443,747 |
Accumulated depletion, Beginning balance | 413,657 | |
Accumulated depletion, Dispositions | ||
Accumulated depletion, Impairment of oil and gas properties | ||
Accumulated depletion, Depletion | 1,004,832 | 435,722 |
Accumulated depletion, Foreign currency translation | 40,487 | (22,065) |
Accumulated depletion, Ending balance | 1,458,976 | 413,657 |
Net book value as at ending balance | 1,104,458 | 2,030,090 |
US Properties [Member] | ||
Business Acquisition [Line Items] | ||
Cost, Beginning balance | 10,350,538 | 14,312,580 |
Cost, Additions | ||
Cost, Dispositions | (3,962,042) | |
Cost, Asset retirement cost additions | ||
Cost, Foreign currency translation | ||
Cost, Ending balance | 10,350,538 | 10,350,538 |
Accumulated depletion, Beginning balance | 61,551 | 1,068,795 |
Accumulated depletion, Dispositions | (3,340,779) | |
Accumulated depletion, Impairment of oil and gas properties | 2,322,255 | |
Accumulated depletion, Depletion | 11,280 | |
Accumulated depletion, Foreign currency translation | ||
Accumulated depletion, Ending balance | 61,551 | 61,551 |
Net book value as at ending balance | $ 10,288,987 | $ 10,288,987 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2019 | Dec. 31, 2018 | Jan. 06, 2017 | May 08, 2014 | ||||
Note payable | $ 2,097,078 | $ 1,061,876 | |||||
Current portion of notes payable | $ 653,540 | 335,877 | |||||
Mark Allen [Member] | |||||||
Interest rate | 12.00% | ||||||
Date of maturity | Jun. 30, 2021 | ||||||
Note payable | $ 200,000 | ||||||
Current portion of notes payable | $ 200,000 | ||||||
M. Hortwitz [Member] | |||||||
Interest rate | 10.00% | 10.00% | |||||
Date of maturity | Oct. 14, 2016 | Oct. 14, 2016 | |||||
Note payable | $ 10,000 | $ 10,000 | |||||
Current portion of notes payable | $ 10,000 | ||||||
Backhoe Loan [Member] | |||||||
Interest rate | 2.90% | [1] | 2.90% | [1] | 2.90% | ||
Date of maturity | [1] | May 8, 2017 | May 8, 2017 | ||||
Note payable | [1] | $ 32,601 | |||||
Truck Loan [Member] | |||||||
Interest rate | 5.49% | [2] | 5.49% | [2] | 5.49% | ||
Date of maturity | [2] | Jan. 20, 2022 | Jan. 20, 2022 | ||||
Note payable | [2] | $ 16,141 | $ 23,237 | ||||
Current portion of notes payable | $ 7,502 | $ 15,999 | $ 683 | ||||
Credit Note I [Member] | |||||||
Interest rate | [3] | 12.00% | 12.00% | ||||
Date of maturity | [3] | May 11, 2021 | May 11, 2021 | ||||
Note payable | [3] | $ 800,000 | $ 800,000 | ||||
Current portion of notes payable | $ 90,000 | $ 710,000 | |||||
Credit Note II [Member] | |||||||
Interest rate | [4] | 12.00% | 12.00% | ||||
Date of maturity | [4] | Oct. 17, 2019 | Oct. 17, 2019 | ||||
Note payable | [4] | $ 346,038 | $ 196,038 | ||||
Current portion of notes payable | $ 346,038 | ||||||
Credit Note III [Member] | |||||||
Interest rate | [5] | 15.00% | |||||
Date of maturity | [5] | Apr. 25, 2021 | |||||
Note payable | [5] | $ 750,000 | |||||
Discount on credit note III [Member] | |||||||
Discount on credit note III | $ (25,101) | ||||||
[1] | On May 8, 2014, the Company, purchased a backhoe. The Company assumed an installment note in the amount of $57,613 for a term of three years and interest at 2.9% per annum. The backhoe was returned to the seller, consequently the outstanding debt balance of $32,601 was forgiven in 2019. | ||||||
[2] | On January 6, 2017, the Company purchased a truck and entered into an installment note in the amount of $35,677 for a term of five years and interest at 5.49% per annum. Payments of principal and interest in the amount of $683 are due monthly. | ||||||
[3] | On May 9, 2018, Bow entered into an Amended and Restated Loan Agreement with a third party. The Loan Agreement increased by $800,000 the amount of a previous loan agreement entered into between Bow and the Lender, to $1,530,000. The amount owed under the Loan Agreement accrues interest at the rate of 12% per annum (19% upon the occurrence of an event of default) and is due and payable on May 11, 2021, provided that the amount owed can be prepaid prior to maturity, beginning 60 days after the date of the Loan Agreement, provided that the Company gives the Lender 10 days' notice of our intent to repay and pays the Lender the interest which would have been due through the maturity date at the time of repayment. The Loan Agreement contains standard and customary events of default, including cross defaults under other indebtedness obligations of us and Bow, and the occurrence of any event which would have a material adverse effect on us or Bow. The Company is required to make principal payments of $10,000 per month from January through September 2019 with the remaining balance of $710,000 due at maturity on May 11, 2021.The additional $800,000 borrowed in connection with the entry into the Loan Agreement was used by the Company to acquire the Working Interest in the Canadian Properties described in Note 6.In order to induce the Lender to enter into the Loan Agreement, the Company agreed to issue the Lender 500,000 shares of restricted common stock (the "Loan Shares"), which were issued on May 18, 2018, and warrants to purchase 2,320,000 shares of common stock (the "Loan Warrants"), of which warrants to purchase (a) 320,000 shares of common stock have an exercise price of $0.10 per share in Canadian dollars and expire in May 15, 2021, (b) 500,000 shares of common stock have an exercise price of $0.12 per share in U.S. dollars, and expire on May 15, 2021; and (c) 1,500,000 shares of common stock have an exercise price of $0.10 per share in U.S. dollars and expire on May 15, 2020.The fair value of the 500,000 common shares issued were assessed at the market price of the stock on the date of issuance and valued at $47,500. The fair value of the Canadian dollar denominated warrants issued were assessed at $30,012 using the Black Scholes Option Pricing Model. The fair value of the U.S. dollar denominated warrants issued were assessed at $182,650 using the Black Scholes Option Pricing Model. The Company determined the debt modification to be an extinguishment of debt and recorded a total loss on extinguishment of debt of $260,162.Upon the disposition of Bow pursuant to the Exchange Agreement described under Note 5, a total of $730,000 of the obligations owed under the Loan Agreement were transferred to Blue Sky. | ||||||
[4] | On September 17, 2018, the Company entered into a loan agreement (LOC) with a third party for $200,000 (which was later increased to $500,000) to acquire an additional 3% working interest in the Canadian Properties (See Note 6). The loan bears interest at 3.5% per annum and has a maturity date of October 17, 2019. Payments of principal and interest in the amount of $6,000 are due monthly. The loan is secured against the Company's 3% Working Interest in the Canadian Properties and has no financial covenants.During 2019, the LOC balance increased by $150,000 resulting in a $346,038 ending balance. | ||||||
[5] | On April 25, 2019, the Company entered into a promissory note (an Acquisition Note") with a third party in the amount of $750,000 to acquire working interests in the Utikuma oil field in Alberta Canada. The Note bears interest at 15% per annum and is due in full at maturity at April 25, 2021. No payments are required on the note until maturity while interest is accrued. In addition, warrants to purchase 500,000 shares of common stock with an exercise price of $0.012 per share expiring on May 1, 2021 were issued associated with the note and were recorded as a debt discount on the balance sheet. The notes hold a security guarantee of a 50% Working Interest in the Utikima oil field and a 100% Working Interest in the Twin Lakes Properties.During 2019, the Company entered into a loan agreement in the amount of $200,000 with a third party. The note bears interest at an interest rate of 12% per annum and matures on June 30, 2021. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 2,500,000 shares of common stock at $0.08 per share. In addition, upon conversion, the note holder will also receive 10,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period.On January 15, 2019, the Company entered into a loan agreement in the amount of $125,000 with a third party. The note bore interest at an interest rate of $4% per annum and was to mature on January 15, 2020. On September 30, 2019, Jovian Petroleum Corporation reimbursed the $125,000 to the third party. Consequently, the $125,000 debt balances was transferred into the Jovian LOC and is now included in the $362,583 at December 31, 2019 (see Note 8: Related Party Notes Payable) |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Sep. 30, 2019 | Apr. 25, 2019 | Jan. 15, 2019 | Sep. 17, 2018 | Jun. 08, 2018 | Jun. 01, 2018 | May 18, 2018 | May 09, 2018 | Jan. 06, 2017 | May 08, 2014 | Dec. 31, 2019 | Dec. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2019 | Feb. 02, 2018 | |||
Notes payable current | $ 653,540 | $ 335,877 | ||||||||||||||||
Repayment of notes | 7,096 | $ 41,325 | ||||||||||||||||
Warrant to purchase common stock | 2,708,336 | |||||||||||||||||
Warrant exercise price per share | $ 0.20 | |||||||||||||||||
Number of common stock issued, value | $ 20,000 | |||||||||||||||||
Fair value of warrants issued | 72,037 | 103,632 | ||||||||||||||||
Loss on extinguishment of debt | (260,162) | |||||||||||||||||
Debt obligation | $ 2,097,078 | $ 1,061,876 | ||||||||||||||||
Share issued price per share | $ 0.09 | |||||||||||||||||
Warrants and rights outstanding, term | 3 years | |||||||||||||||||
Warrants [Member] | ||||||||||||||||||
Warrant exercise price per share | $ 0.10 | |||||||||||||||||
Bow Energy Ltd [Member] | ||||||||||||||||||
Share issued price per share | $ 0.37 | $ 0.07 | $ 0.37 | |||||||||||||||
Amended and Restated Loan Agreement [Member] | ||||||||||||||||||
Warrant to purchase common stock | 320,000 | |||||||||||||||||
Warrant exercise price per share | $ 0.10 | |||||||||||||||||
Loan Agreement [Member] | ||||||||||||||||||
Debt face amount | $ 125,000 | $ 200,000 | $ 200,000 | |||||||||||||||
Debt interest rate | 4.00% | 3.50% | 12.00% | 12.00% | ||||||||||||||
Increase in loan amount | $ 500,000 | |||||||||||||||||
Debt default interest rate | 19.00% | |||||||||||||||||
Debt maturity date | Jan. 15, 2020 | Oct. 17, 2019 | May 11, 2021 | Jun. 30, 2021 | ||||||||||||||
Repayment of notes | $ 6,000 | |||||||||||||||||
Number of common stock issued | 2,500,000 | |||||||||||||||||
Warrant to purchase common stock | 10,000,000 | |||||||||||||||||
Warrant exercise price per share | $ 0.10 | |||||||||||||||||
Working interest percentage | 3.00% | |||||||||||||||||
Line of credit facility, increase | $ 346,038 | $ 150,000 | ||||||||||||||||
Payments of principal and interest amount | $ 6,000 | |||||||||||||||||
Share issued price per share | $ 0.08 | |||||||||||||||||
Warrants and rights outstanding, term | 4 years | |||||||||||||||||
Loan Agreement [Member] | Jovian Resources LLC [Member] | ||||||||||||||||||
Notes payable current | $ 362,583 | |||||||||||||||||
Line of credit facility, increase | 125,000 | |||||||||||||||||
Debt amount reimbursed | $ 125,000 | |||||||||||||||||
Backhoe Loan [Member] | ||||||||||||||||||
Debt face amount | $ 57,613 | |||||||||||||||||
Debt term | 3 years | |||||||||||||||||
Debt interest rate | 2.90% | 2.90% | [1] | 2.90% | [1] | |||||||||||||
Debt outstanding forgiven | $ 32,601 | |||||||||||||||||
Debt maturity date | [1] | May 8, 2017 | May 8, 2017 | |||||||||||||||
Debt obligation | [1] | $ 32,601 | ||||||||||||||||
Truck Loan [Member] | ||||||||||||||||||
Debt face amount | $ 35,677 | |||||||||||||||||
Debt term | 5 years | |||||||||||||||||
Debt interest rate | 5.49% | 5.49% | [2] | 5.49% | [2] | |||||||||||||
Notes payable current | $ 683 | $ 7,502 | $ 15,999 | |||||||||||||||
Debt maturity date | [2] | Jan. 20, 2022 | Jan. 20, 2022 | |||||||||||||||
Debt obligation | [2] | $ 16,141 | $ 23,237 | |||||||||||||||
Credit Note I [Member] | ||||||||||||||||||
Debt interest rate | [3] | 12.00% | 12.00% | |||||||||||||||
Notes payable current | $ 90,000 | $ 710,000 | ||||||||||||||||
Debt maturity date | [3] | May 11, 2021 | May 11, 2021 | |||||||||||||||
Debt obligation | [3] | $ 800,000 | $ 800,000 | |||||||||||||||
Credit Note I [Member] | Amended and Restated Loan Agreement [Member] | Bow Energy Ltd [Member] | ||||||||||||||||||
Debt face amount | $ 800,000 | |||||||||||||||||
Debt interest rate | 12.00% | |||||||||||||||||
Notes payable current | $ 710,000 | |||||||||||||||||
Increase in loan amount | $ 1,530,000 | |||||||||||||||||
Debt default interest rate | 19.00% | |||||||||||||||||
Debt maturity date | May 11, 2021 | |||||||||||||||||
Repayment of notes | $ 10,000 | |||||||||||||||||
Credit Note I [Member] | Loan Agreement [Member] | ||||||||||||||||||
Number of common stock issued | 500,000 | |||||||||||||||||
Number of common stock issued, value | $ 47,500 | |||||||||||||||||
Fair value of warrants issued | 182,650 | |||||||||||||||||
Loss on extinguishment of debt | 260,162 | |||||||||||||||||
Debt obligation | 730,000 | |||||||||||||||||
Credit Note I [Member] | Loan Agreement [Member] | Canadian Dollars [Member] | ||||||||||||||||||
Fair value of warrants issued | $ 30,012 | |||||||||||||||||
Credit Note I [Member] | Loan Agreement [Member] | Lender [Member] | Warrants [Member] | ||||||||||||||||||
Warrant to purchase common stock | 2,320,000 | |||||||||||||||||
Credit Note I [Member] | Loan Agreement [Member] | Lender [Member] | Loan Warrant One [Member] | ||||||||||||||||||
Warrant to purchase common stock | 320,000 | |||||||||||||||||
Warrant exercise price per share | $ 0.10 | |||||||||||||||||
Warrant expiry date | May 15, 2021 | |||||||||||||||||
Credit Note I [Member] | Loan Agreement [Member] | Lender [Member] | Loan Warrant Two [Member] | ||||||||||||||||||
Warrant to purchase common stock | 500,000 | |||||||||||||||||
Warrant exercise price per share | $ 0.12 | |||||||||||||||||
Warrant expiry date | May 15, 2021 | |||||||||||||||||
Credit Note I [Member] | Loan Agreement [Member] | Lender [Member] | Loan Warrant Three [Member] | ||||||||||||||||||
Warrant to purchase common stock | 1,500,000 | |||||||||||||||||
Warrant exercise price per share | $ 0.10 | |||||||||||||||||
Warrant expiry date | May 15, 2020 | |||||||||||||||||
Credit Note I [Member] | Loan Agreement [Member] | Lender [Member] | Restricted Common Stock [Member] | ||||||||||||||||||
Number of common stock issued | 500,000 | |||||||||||||||||
Acquisition Note [Member] | ||||||||||||||||||
Debt face amount | $ 750,000 | |||||||||||||||||
Debt interest rate | 15.00% | 9.00% | ||||||||||||||||
Debt maturity date | Apr. 25, 2021 | Nov. 30, 2018 | ||||||||||||||||
Warrant to purchase common stock | 500,000 | |||||||||||||||||
Warrant exercise price per share | $ 0.012 | |||||||||||||||||
Warrant expiry date | May 1, 2021 | |||||||||||||||||
Working interest percentage | 50.00% | |||||||||||||||||
Acquisition Note [Member] | Twin Lakes Properties [Member] | ||||||||||||||||||
Working interest percentage | 100.00% | |||||||||||||||||
[1] | On May 8, 2014, the Company, purchased a backhoe. The Company assumed an installment note in the amount of $57,613 for a term of three years and interest at 2.9% per annum. The backhoe was returned to the seller, consequently the outstanding debt balance of $32,601 was forgiven in 2019. | |||||||||||||||||
[2] | On January 6, 2017, the Company purchased a truck and entered into an installment note in the amount of $35,677 for a term of five years and interest at 5.49% per annum. Payments of principal and interest in the amount of $683 are due monthly. | |||||||||||||||||
[3] | On May 9, 2018, Bow entered into an Amended and Restated Loan Agreement with a third party. The Loan Agreement increased by $800,000 the amount of a previous loan agreement entered into between Bow and the Lender, to $1,530,000. The amount owed under the Loan Agreement accrues interest at the rate of 12% per annum (19% upon the occurrence of an event of default) and is due and payable on May 11, 2021, provided that the amount owed can be prepaid prior to maturity, beginning 60 days after the date of the Loan Agreement, provided that the Company gives the Lender 10 days' notice of our intent to repay and pays the Lender the interest which would have been due through the maturity date at the time of repayment. The Loan Agreement contains standard and customary events of default, including cross defaults under other indebtedness obligations of us and Bow, and the occurrence of any event which would have a material adverse effect on us or Bow. The Company is required to make principal payments of $10,000 per month from January through September 2019 with the remaining balance of $710,000 due at maturity on May 11, 2021.The additional $800,000 borrowed in connection with the entry into the Loan Agreement was used by the Company to acquire the Working Interest in the Canadian Properties described in Note 6.In order to induce the Lender to enter into the Loan Agreement, the Company agreed to issue the Lender 500,000 shares of restricted common stock (the "Loan Shares"), which were issued on May 18, 2018, and warrants to purchase 2,320,000 shares of common stock (the "Loan Warrants"), of which warrants to purchase (a) 320,000 shares of common stock have an exercise price of $0.10 per share in Canadian dollars and expire in May 15, 2021, (b) 500,000 shares of common stock have an exercise price of $0.12 per share in U.S. dollars, and expire on May 15, 2021; and (c) 1,500,000 shares of common stock have an exercise price of $0.10 per share in U.S. dollars and expire on May 15, 2020.The fair value of the 500,000 common shares issued were assessed at the market price of the stock on the date of issuance and valued at $47,500. The fair value of the Canadian dollar denominated warrants issued were assessed at $30,012 using the Black Scholes Option Pricing Model. The fair value of the U.S. dollar denominated warrants issued were assessed at $182,650 using the Black Scholes Option Pricing Model. The Company determined the debt modification to be an extinguishment of debt and recorded a total loss on extinguishment of debt of $260,162.Upon the disposition of Bow pursuant to the Exchange Agreement described under Note 5, a total of $730,000 of the obligations owed under the Loan Agreement were transferred to Blue Sky. |
Notes Payable - Schedule of Fut
Notes Payable - Schedule of Future Minimum Repayments of Notes Payable (Details) - Note Payable [Member] | Dec. 31, 2020USD ($) |
2020 | $ 653,540 |
2021 | 1,442,966 |
2022 | 572 |
Thereafter | |
Future minimum repayments of notes payable | $ 2,097,078 |
Related Party Notes Payable (De
Related Party Notes Payable (Details Narrative) - Related Party Notes and Payables [Member] | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt conversion amount | $ 120,000 |
Leo Womack [Member] | |
Debt conversion amount | 20,000 |
Joel Oppenheim [Member] | |
Debt conversion amount | 40,000 |
Jovian Petroleum Corporation [Member] | |
Debt conversion amount | 40,000 |
American Resource Offshore Inc. [Member] | |
Debt conversion amount | $ 20,000 |
Related Party Notes Payable - S
Related Party Notes Payable - Schedule of Related Party Notes Payable (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | |||
Related party notes Payable | $ 983,291 | $ 610,748 | ||
Leo Womack [Member] | ||||
Interest rate | [1] | |||
Date of maturity, description | [1] | On demand | On demand | |
Related party notes Payable | [1] | $ 3,000 | ||
Lee Lytton [Member] | ||||
Interest rate | [1] | |||
Date of maturity, description | [1] | On demand | On demand | |
Related party notes Payable | [1] | $ 3,500 | $ 3,500 | |
Quinten Beasley [Member] | ||||
Interest rate | 10.00% | 10.00% | ||
Date of maturity | Oct. 14, 2016 | Oct. 14, 2016 | ||
Related party notes Payable | $ 10,000 | $ 10,000 | ||
Joel Oppenheim One [Member] | ||||
Interest rate | [1] | |||
Date of maturity, description | [1] | On demand | On demand | |
Related party notes Payable | $ 217,208 | $ 215,333 | [1] | |
Joel Oppenheim Two [Member] | ||||
Interest rate | 12.00% | 12.00% | ||
Date of maturity, description | On demand | On demand | ||
Related party notes Payable | $ 15,000 | |||
Bow [Member] | ||||
Interest rate | [1] | |||
Date of maturity, description | [1] | On demand | On demand | |
Related party notes Payable | [1] | $ 33,144 | ||
Blue Sky Resources One [Member] | ||||
Interest rate | [1] | |||
Date of maturity, description | [1] | On demand | On demand | |
Related party notes Payable | [1] | $ 131,699 | ||
Jovian Petroleum Corporation [Member] | ||||
Interest rate | [2] | 3.50% | 3.50% | |
Date of maturity | [2] | Dec. 31, 2021 | Dec. 31, 2021 | |
Related party notes Payable | [2] | $ 362,583 | $ 35,210 | |
Ivar Siem [Member] | ||||
Interest rate | [3] | 12.00% | 12.00% | |
Date of maturity, description | [3] | On demand | On demand | |
Related party notes Payable | [3] | $ 100,000 | $ 20,000 | |
Ivar Siem One [Member] | ||||
Interest rate | [3] | 12.00% | 12.00% | |
Date of maturity, description | [3] | On demand | On demand | |
Related party notes Payable | [3] | $ 75,000 | ||
Joel Oppenheim [Member] | ||||
Interest rate | [3] | 12.00% | 12.00% | |
Date of maturity | [3] | Dec. 31, 2019 | Dec. 31, 2019 | |
Related party notes Payable | [3] | $ 200,000 | $ 10,000 | |
Blue Sky Resources Two [Member] | ||||
Interest rate | [4] | 9.00% | 9.00% | |
Date of maturity | [4] | May 31, 2019 | May 31, 2019 | |
Related party notes Payable | [4] | $ 148,862 | ||
[1] | Balances are non-interest bearing and due on demand. | |||
[2] | On February 9, 2018, the Company entered into a Revolving Line of Credit Agreement ("LOC") for $200,000 (subsequently increased to $500,000 on April 12, 2018) with Jovian Petroleum Corporation. The CEO of Jovian is Quinten Beasley, our former director (resigned October 31, 2018), and 25% of Jovian is owned by Zel C. Khan, our CEO and director. The initial agreement is for a period of 6 months and can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to year-end this LOC has been extended until December 31, 2021. | |||
[3] | On August 17, 2018, the Company sold an aggregate of $90,000 in convertible promissory notes (the "Director Convertible Notes"), to the Company's directors, Ivar Siem ($20,000) through an entity that he is affiliated with; Leo Womack ($60,000); and Joel Oppenheim ($10,000). The Director Convertible Notes accrue interest at the rate of 12% per annum until paid in full and were due and payable on October 17, 2018. The amount owed may be prepaid at any time without penalty. The outstanding principal and interest owed under the Director Convertible Notes are convertible into common stock of the Company, from time to time, at the option of the holders of the notes, at a conversion price of $0.10 per share. As additional consideration for entering into the notes, the Company agreed to grant warrants to purchase one share of the Company's common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the "Bridge Note Warrants"). The warrants had a contractual life of one year. As such, the Company granted (a) 20,000 Bridge Note Warrants to an entity affiliated with Ivar Siem; (b) 60,000 Bridge Note Warrants to Leo Womack; and (c) 10,000 Bridge Note Warrants to Joel Oppenheim. The Director Convertible Notes contain standard and customary events of default. The Company fair valued the warrants issued using the Black-Scholes Option Pricing Model for a total fair value of $6,249. On October 22, 2018, $60,000 in Director Convertible Notes were settled by offsetting against $60,000 proceeds required for the exercise of warrants. On August 15, 2019, the Company entered into a loan agreement in the amount of $200,000 with Joel Oppenheim. The note bears interest at an interest rate of 12% per annum and payments of $50,000 are due monthly beginning September 2, 2019 with the remaining balance due in full at maturity on December 31, 2019. In association with the loan, the Company issued 200,000 warrants at an exercises price of $0.10 per share that expire on August 15, 2021. The warrants fully vest on maturity date. The notes are secured by a 50% Working Interest in the SUDS field and Noack field sale proceeds. On August 15, 2019, the Company entered into a loan agreement in the amount of $75,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a four (4) month maturity. On December 4, 2019, the Company entered into a loan agreement in the amount of $100,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a six (6) month maturity. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. | |||
[4] | On June 8, 2018, the Company entered into the Acquisition Note with Blue Sky in the amount of CAD$406,181. The Note bears interest at 9% per annum and is due in full at maturity on November 30, 2018. The Company may, at its sole discretion, extend the maturity date for a period of six months with notice to the lender and payment of 25% of the principal amount. At December 31, 2018, the maturity date had been extended to May 31, 2019. On April 1, 2019, the Company utilized its LOC with Jovian to pay off in its entirety the June 8, 2018 Acquisition Note with Blue Sky. |
Related Party Notes Payable -_2
Related Party Notes Payable - Schedule of Related Party Notes Payable (Details) (Parenthetical) | Dec. 04, 2019USD ($) | Aug. 15, 2019USD ($)$ / sharesshares | Apr. 25, 2019USD ($)$ / shares | Jan. 15, 2019USD ($) | Oct. 22, 2018USD ($)$ / shares | Sep. 17, 2018USD ($) | Sep. 14, 2018USD ($)$ / shares | Aug. 17, 2018USD ($)$ / sharesshares | Jun. 08, 2018CAD ($) | Jun. 01, 2018USD ($) | Apr. 26, 2018USD ($)$ / shares | Apr. 12, 2018USD ($) | Feb. 28, 2018USD ($)$ / shares | Feb. 09, 2018USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 30, 2019USD ($) | Dec. 31, 2018USD ($)$ / shares | Oct. 31, 2018$ / shares | Oct. 17, 2018 | Mar. 23, 2018$ / shares | Feb. 02, 2018$ / shares | |
Warrant exercise price | $ / shares | $ 0.20 | |||||||||||||||||||||
Warrants contractual term | 3 years | |||||||||||||||||||||
Fair value of warrants issued | $ 72,037 | $ 103,632 | ||||||||||||||||||||
Payment for related party | 558,726 | 194,104 | ||||||||||||||||||||
Proceeds from exercise of warrants | $ 179,675 | |||||||||||||||||||||
Debt instrument, description | The Company entered into a Memorandum of Understanding ("MOU") with Blue Sky. Pursuant to the MOU, the Company acquired an additional 3% working interest in the Canadian Properties, increasing our Working Interest to 28%. Total consideration paid from the Company to Blue Sky for the additional 3% Working Interest was $150,000. | |||||||||||||||||||||
Blue Sky [Member] | ||||||||||||||||||||||
Debt instrument face amount | $ 313,775 | |||||||||||||||||||||
Blue Sky [Member] | Canadian Dollars [Member] | ||||||||||||||||||||||
Debt instrument face amount | $ 406,181 | |||||||||||||||||||||
Director Convertible Notes [Member] | ||||||||||||||||||||||
Aggregate sold for convertible debt | $ 90,000 | |||||||||||||||||||||
Debt interest rate | 12.00% | 12.00% | ||||||||||||||||||||
Debt instrument maturity date | Oct. 17, 2018 | |||||||||||||||||||||
Conversion price per share | $ / shares | $ 0.10 | |||||||||||||||||||||
Payment for related party | $ 60,000 | |||||||||||||||||||||
Proceeds from exercise of warrants | $ 60,000 | |||||||||||||||||||||
Bridge Note Warrants [Member] | ||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||
Warrants, description | The Company agreed to grant warrants to purchase one share of the Company's common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the "Bridge Note Warrants"). | |||||||||||||||||||||
Warrants contractual term | 1 year | |||||||||||||||||||||
Fair value of warrants issued | $ 6,249 | |||||||||||||||||||||
Acquisition Note [Member] | ||||||||||||||||||||||
Debt interest rate | 15.00% | 9.00% | ||||||||||||||||||||
Debt instrument maturity date | Apr. 25, 2021 | Nov. 30, 2018 | ||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.012 | |||||||||||||||||||||
Debt instrument face amount | $ 750,000 | |||||||||||||||||||||
Debt instrument, description | Extend the maturity date for a period six months with 10 days' notice to Blue Sky, in the event the Company pays 25% of the principal amount of the Acquisition Note at the time of extension. | |||||||||||||||||||||
Acquisition Note [Member] | Blue Sky [Member] | ||||||||||||||||||||||
Debt interest rate | 9.00% | |||||||||||||||||||||
Debt instrument maturity date | Nov. 30, 2018 | |||||||||||||||||||||
Debt instrument, description | The Company may, at its sole discretion, extend the maturity date for a period of six months with notice to the lender and payment of 25% of the principal amount. | |||||||||||||||||||||
Debt instrument maturity date, description | Extended to May 31, 2019 | |||||||||||||||||||||
Acquisition Note [Member] | Blue Sky [Member] | Canadian Dollars [Member] | ||||||||||||||||||||||
Debt instrument face amount | $ 406,181 | |||||||||||||||||||||
Loan Agreement [Member] | ||||||||||||||||||||||
Line of credit facility increase for period | $ 346,038 | $ 150,000 | ||||||||||||||||||||
Debt interest rate | 4.00% | 3.50% | 12.00% | 12.00% | ||||||||||||||||||
Debt instrument maturity date | Jan. 15, 2020 | Oct. 17, 2019 | May 11, 2021 | Jun. 30, 2021 | ||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||
Warrants contractual term | 4 years | |||||||||||||||||||||
Debt instrument face amount | $ 125,000 | $ 200,000 | $ 200,000 | |||||||||||||||||||
Debt periodic payment | $ 6,000 | |||||||||||||||||||||
Jovian Petroleum Corporation [Member] | ||||||||||||||||||||||
Ownership interest | 25.00% | |||||||||||||||||||||
Debt interest rate | [1] | 3.50% | 3.50% | |||||||||||||||||||
Debt instrument maturity date | [1] | Dec. 31, 2021 | Dec. 31, 2021 | |||||||||||||||||||
Jovian Petroleum Corporation [Member] | Revolving Line of Credit Agreement [Member] | ||||||||||||||||||||||
Revolving Line of Credit | $ 500,000 | $ 200,000 | ||||||||||||||||||||
Line of credit facility increase for period | $ 500,000 | |||||||||||||||||||||
Line of credit facility interest rate during period | 3.50% | |||||||||||||||||||||
Revolving Line of Credit, description | The initial agreement is for a period of 6 months and can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to year-end this LOC has been extended until December 31, 2021. | |||||||||||||||||||||
Debt interest rate | 3.50% | |||||||||||||||||||||
Ivar Siem [Member] | ||||||||||||||||||||||
Aggregate sold for convertible debt | $ 20,000 | |||||||||||||||||||||
Debt interest rate | [2] | 12.00% | 12.00% | |||||||||||||||||||
Debt instrument maturity date, description | [2] | On demand | On demand | |||||||||||||||||||
Ivar Siem [Member] | Bridge Note Warrants [Member] | ||||||||||||||||||||||
Warrant number of shares granted | shares | 20,000 | |||||||||||||||||||||
Ivar Siem [Member] | Loan Agreement [Member] | ||||||||||||||||||||||
Debt interest rate | 12.00% | 12.00% | ||||||||||||||||||||
Debt instrument face amount | $ 100,000 | $ 75,000 | ||||||||||||||||||||
Debt instrument, description | At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. | |||||||||||||||||||||
Debt instrument maturity date, description | (6) month maturity. | (4) month maturity. | ||||||||||||||||||||
Leo Womack [Member] | ||||||||||||||||||||||
Aggregate sold for convertible debt | $ 60,000 | |||||||||||||||||||||
Debt interest rate | [3] | |||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.06 | |||||||||||||||||||||
Payment for related party | $ 60,000 | |||||||||||||||||||||
Debt instrument maturity date, description | [3] | On demand | On demand | |||||||||||||||||||
Leo Womack [Member] | Bridge Note Warrants [Member] | ||||||||||||||||||||||
Warrant number of shares granted | shares | 60,000 | |||||||||||||||||||||
Joel Oppenheim [Member] | ||||||||||||||||||||||
Aggregate sold for convertible debt | $ 10,000 | |||||||||||||||||||||
Debt interest rate | [2] | 12.00% | 12.00% | |||||||||||||||||||
Debt instrument maturity date | [2] | Dec. 31, 2019 | Dec. 31, 2019 | |||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | $ 0.098 | $ 0.10 | $ 0.12 | $ 0.12 | |||||||||||||||||
Warrants contractual term | 3 years | |||||||||||||||||||||
Proceeds from exercise of warrants | $ 50,000 | $ 61,800 | ||||||||||||||||||||
Joel Oppenheim [Member] | Bridge Note Warrants [Member] | ||||||||||||||||||||||
Warrant number of shares granted | shares | 10,000 | |||||||||||||||||||||
Joel Oppenheim [Member] | Loan Agreement [Member] | ||||||||||||||||||||||
Debt interest rate | 12.00% | |||||||||||||||||||||
Debt instrument maturity date | Dec. 31, 2019 | |||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | $ 0.10 | ||||||||||||||||||||
Warrants, description | The warrants fully vest on maturity date. The notes are secured by a 50% Working Interest in the SUDS field and Noack field sale proceeds. | |||||||||||||||||||||
Warrant number of shares granted | shares | 200,000 | |||||||||||||||||||||
Warrants contractual term | 2 years | |||||||||||||||||||||
Fair value of warrants issued | $ 11,242 | |||||||||||||||||||||
Debt instrument face amount | $ 200,000 | |||||||||||||||||||||
Debt periodic payment | $ 50,000 | |||||||||||||||||||||
Warrant expire date | Aug. 15, 2021 | |||||||||||||||||||||
[1] | On February 9, 2018, the Company entered into a Revolving Line of Credit Agreement ("LOC") for $200,000 (subsequently increased to $500,000 on April 12, 2018) with Jovian Petroleum Corporation. The CEO of Jovian is Quinten Beasley, our former director (resigned October 31, 2018), and 25% of Jovian is owned by Zel C. Khan, our CEO and director. The initial agreement is for a period of 6 months and can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to year-end this LOC has been extended until December 31, 2021. | |||||||||||||||||||||
[2] | On August 17, 2018, the Company sold an aggregate of $90,000 in convertible promissory notes (the "Director Convertible Notes"), to the Company's directors, Ivar Siem ($20,000) through an entity that he is affiliated with; Leo Womack ($60,000); and Joel Oppenheim ($10,000). The Director Convertible Notes accrue interest at the rate of 12% per annum until paid in full and were due and payable on October 17, 2018. The amount owed may be prepaid at any time without penalty. The outstanding principal and interest owed under the Director Convertible Notes are convertible into common stock of the Company, from time to time, at the option of the holders of the notes, at a conversion price of $0.10 per share. As additional consideration for entering into the notes, the Company agreed to grant warrants to purchase one share of the Company's common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the "Bridge Note Warrants"). The warrants had a contractual life of one year. As such, the Company granted (a) 20,000 Bridge Note Warrants to an entity affiliated with Ivar Siem; (b) 60,000 Bridge Note Warrants to Leo Womack; and (c) 10,000 Bridge Note Warrants to Joel Oppenheim. The Director Convertible Notes contain standard and customary events of default. The Company fair valued the warrants issued using the Black-Scholes Option Pricing Model for a total fair value of $6,249. On October 22, 2018, $60,000 in Director Convertible Notes were settled by offsetting against $60,000 proceeds required for the exercise of warrants. On August 15, 2019, the Company entered into a loan agreement in the amount of $200,000 with Joel Oppenheim. The note bears interest at an interest rate of 12% per annum and payments of $50,000 are due monthly beginning September 2, 2019 with the remaining balance due in full at maturity on December 31, 2019. In association with the loan, the Company issued 200,000 warrants at an exercises price of $0.10 per share that expire on August 15, 2021. The warrants fully vest on maturity date. The notes are secured by a 50% Working Interest in the SUDS field and Noack field sale proceeds. On August 15, 2019, the Company entered into a loan agreement in the amount of $75,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a four (4) month maturity. On December 4, 2019, the Company entered into a loan agreement in the amount of $100,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a six (6) month maturity. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. | |||||||||||||||||||||
[3] | Balances are non-interest bearing and due on demand. |
Related Party Notes Payable -_3
Related Party Notes Payable - Schedule of Future Minimum Repayments of Related Party Notes Payable (Details) - Notes Payable Related Party [Member] | Dec. 31, 2019USD ($) |
2020 | $ 983,291 |
Thereafter | |
Future minimum repayments of related party notes payable | $ 983,291 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details Narrative) - USD ($) | Dec. 31, 2018 | May 18, 2018 |
Warrants to acquire of common stock | 2,708,336 | |
Warrant exercise price | $ 0.20 | |
Amended and Restated Loan Agreement [Member] | ||
Warrants to acquire of common stock | 320,000 | |
Warrant exercise price | $ 0.10 | |
Derivative liability | $ 30,012 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Derivative Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, All Other Investments [Abstract] | ||
Balance, beginning | $ 37,013 | |
Fair value adjustments | (12,504) | $ 7,001 |
Balance, ending | $ 24,509 | $ 37,013 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Derivative Liability of Fair Value Assumption (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Minimum [Member] | |
Derivative liability, expected life | 1 year 4 months 24 days |
Maximum [Member] | |
Derivative liability, expected life | 2 years 1 month 6 days |
Risk Free Interest Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 1.58 |
Risk Free Interest Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 2.27 |
Expected Dividend Rate [Member] | |
Derivative liability, measurement input | 0 |
Expected Volatility [Member] | Minimum [Member] | |
Derivative liability, measurement input | 208 |
Expected Volatility [Member] | Maximum [Member] | |
Derivative liability, measurement input | 240 |
Asset Retirement Obligations -
Asset Retirement Obligations - Schedule of Measurement of Fair Value Liability (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative liabilities | $ 24,509 | $ 37,013 | |
ARO liabilities | 1,723,364 | 1,509,622 | $ 473,868 |
Level 1 [Member] | |||
Derivative liabilities | |||
ARO liabilities | |||
Level 2 [Member] | |||
Derivative liabilities | |||
ARO liabilities | |||
Level 3 [Member] | |||
Derivative liabilities | 24,509 | 37,013 | |
ARO liabilities | $ 1,723,364 | $ 1,509,622 |
Asset Retirement Obligations _2
Asset Retirement Obligations - Schedule of Fair value of Asset Retirement Obligations (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Minimum [Member] | |
Inflation rate | 1.92% |
Estimated asset life | 12 years |
Maximum [Member] | |
Inflation rate | 2.15% |
Estimated asset life | 22 years |
Asset Retirement Obligations _3
Asset Retirement Obligations - Schedule of Asset Retirement Obligations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Asset retirement obligations at beginning of period | $ 1,509,622 | $ 473,868 |
Additions | 1,313,982 | |
Accretion expense | 149,624 | 27,971 |
Disposition | (246,263) | |
Foreign currency translation | 64,118 | (59,936) |
Asset retirement obligations at end of period | 1,723,364 | 1,509,622 |
Canadian Properties [Member] | ||
Asset retirement obligations at beginning of period | 1,258,399 | |
Additions | 1,313,982 | |
Accretion expense | 123,474 | 4,353 |
Disposition | ||
Foreign currency translation | 64,118 | (59,936) |
Asset retirement obligations at end of period | 1,445,991 | 1,258,399 |
US Properties [Member] | ||
Asset retirement obligations at beginning of period | 251,223 | 473,868 |
Additions | ||
Accretion expense | 26,150 | 23,618 |
Disposition | (246,263) | |
Foreign currency translation | ||
Asset retirement obligations at end of period | $ 277,373 | $ 251,223 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Aug. 31, 2019 | Aug. 08, 2019 | Jul. 23, 2019 | Oct. 22, 2018 | Oct. 17, 2018 | Sep. 27, 2018 | Aug. 31, 2018 | Jun. 25, 2018 | May 22, 2018 | May 14, 2018 | May 09, 2018 | Apr. 26, 2018 | Apr. 20, 2018 | Apr. 18, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Feb. 27, 2018 | Feb. 23, 2018 | Feb. 02, 2018 | Jan. 24, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 14, 2019 |
Class of Stock [Line Items] | |||||||||||||||||||||||
Stock conversion price | $ 0.28 | ||||||||||||||||||||||
Preferred stock conversion, description | The value of each dollar of preferred stock (based on a $10 per share price) will convert into 7.1429 common shares (which results in a $0.14 per common share conversion rate). | ||||||||||||||||||||||
Cumulative dividends | $ 178,209 | $ 179,279 | |||||||||||||||||||||
Shares issued, price per share | $ 0.09 | ||||||||||||||||||||||
Warrant exercise price per share | $ 0.20 | ||||||||||||||||||||||
Number of stock issued related to compensation, value | 473,353 | $ 3,466,376 | |||||||||||||||||||||
Debt settlement loss | (260,162) | ||||||||||||||||||||||
Number of shares issued for acquisition | $ 34,607,088 | ||||||||||||||||||||||
Warrant to purchase common stock | 2,708,336 | ||||||||||||||||||||||
Proceeds from exercise of warrants | $ 179,675 | ||||||||||||||||||||||
Warrants, term | 3 years | ||||||||||||||||||||||
Fair value of warrants issued | $ 72,037 | $ 103,632 | |||||||||||||||||||||
Number of stock issued for financing fees | 500,000 | ||||||||||||||||||||||
Number of stock issued for financing fees, value | $ 47,747 | ||||||||||||||||||||||
Options, dividend yield | 0.00% | 0.00% | |||||||||||||||||||||
Bow Energy Ltd [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.07 | ||||||||||||||||||||||
Bow Energy Ltd [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.07 | $ 0.37 | $ 0.37 | ||||||||||||||||||||
Number of shares issued for acquisition | $ 34,607,088 | $ 100,000 | $ 34,607,088 | ||||||||||||||||||||
Number of shares issued for acquisition, shares | 106,156,172 | 37,000 | 106,156,172 | ||||||||||||||||||||
Warrants to purchase common stock | 320,000 | 320,000 | |||||||||||||||||||||
Number of shares returned to treasury stock | 70,807,417 | 70,807,417 | |||||||||||||||||||||
Number of shares returned to treasury stock, value | $ 4,956,519 | ||||||||||||||||||||||
Stock Options [Member] | Bow Energy Ltd [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Number of shares granted | 3,500,000 | ||||||||||||||||||||||
Options, exercise price | $ 0.12 | ||||||||||||||||||||||
Options, expiring date | Feb. 27, 2021 | ||||||||||||||||||||||
Fair value of options | $ 1,131,639 | ||||||||||||||||||||||
Options, volatility rate | 283.00% | ||||||||||||||||||||||
Options, discount rate | 2.42% | ||||||||||||||||||||||
Options, dividend yield | 0.00% | ||||||||||||||||||||||
Options, expected term | 3 years | ||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Number of stock issued related to compensation | 6,750,000 | ||||||||||||||||||||||
Number of stock issued related to compensation, value | $ 6,750 | ||||||||||||||||||||||
Number of shares issued for acquisition | $ 106,157 | ||||||||||||||||||||||
Number of shares issued for acquisition, shares | 106,156,712 | ||||||||||||||||||||||
Warrants [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | ||||||||||||||||||||||
Warrants to purchase common stock | 275,000 | ||||||||||||||||||||||
Proceeds from exercise of warrants | $ 27,375 | ||||||||||||||||||||||
Warrants outstanding, weighted-average remaining contractual life | 1 year 15 days | 1 year 8 months 12 days | |||||||||||||||||||||
Warrants outstanding, intrinsic value | $ 8,256 | $ 711,978 | |||||||||||||||||||||
Mr. James Burns [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | ||||||||||||||||||||||
Warrant to purchase common stock | 2,000,000 | ||||||||||||||||||||||
Warrants, term | 36 months | ||||||||||||||||||||||
Number of restricted shares issued | 500,000 | ||||||||||||||||||||||
Fair value of warrants issued | $ 147,600 | ||||||||||||||||||||||
Number of restricted shares issued, value | $ 45,000 | ||||||||||||||||||||||
Annual salary | $ 65,000 | ||||||||||||||||||||||
Mr. James Burns [Member] | Separation and Release Agreement [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | ||||||||||||||||||||||
Warrant to purchase common stock | 3,000,000 | ||||||||||||||||||||||
Severance pay | $ 33,000 | ||||||||||||||||||||||
Number of restricted shares issued | 2,000,000 | ||||||||||||||||||||||
Fair value of warrants issued | $ 221,401 | ||||||||||||||||||||||
Number of restricted shares issued, value | $ 180,000 | ||||||||||||||||||||||
Mr. James Burns [Member] | Restricted Common Stock [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.43 | ||||||||||||||||||||||
Number of stock issued related to compensation | 616,209 | ||||||||||||||||||||||
Number of stock issued related to compensation, value | $ 264,970 | ||||||||||||||||||||||
Deferred salary | 61,621 | ||||||||||||||||||||||
Debt settlement loss | $ 203,349 | ||||||||||||||||||||||
Mr. James Burns [Member] | Successful Listing [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Number of restricted shares issued | 500,000 | ||||||||||||||||||||||
Mr. James Burns [Member] | Common Stock [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.10 | $ 0.17 | |||||||||||||||||||||
Number of stock issued related to compensation | 350,000 | 350,000 | |||||||||||||||||||||
Number of stock issued related to compensation, value | $ 35,000 | $ 59,500 | |||||||||||||||||||||
Geologist Consultant [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.31 | ||||||||||||||||||||||
Number of shares issued for services | 150,000 | ||||||||||||||||||||||
Number of shares issued for services, value | $ 45,900 | ||||||||||||||||||||||
Quinten Beasley [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.13 | $ 0.092 | |||||||||||||||||||||
Warrants to purchase common stock | 1,110,000 | ||||||||||||||||||||||
Accounts Payable | $ 102,590 | ||||||||||||||||||||||
Number of shares granted | 2,000,000 | ||||||||||||||||||||||
Number of shares granted, value | $ 256,000 | ||||||||||||||||||||||
Saleem Nizami [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.13 | ||||||||||||||||||||||
Number of shares issued for services | 100,000 | ||||||||||||||||||||||
Number of shares issued for services, value | $ 13,000 | ||||||||||||||||||||||
Warrant Holder [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | $ 0.102 | |||||||||||||||||||||
Warrants to purchase common stock | 310,000 | ||||||||||||||||||||||
Warrant to purchase common stock | 360,000 | ||||||||||||||||||||||
Proceeds from exercise of warrants | $ 31,000 | $ 36,875 | |||||||||||||||||||||
Joel Oppenheim [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | $ 0.098 | |||||||||||||||||||||
Warrant to purchase common stock | 500,000 | 630,000 | |||||||||||||||||||||
Proceeds from exercise of warrants | $ 50,000 | $ 61,800 | |||||||||||||||||||||
Vendor [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.10 | ||||||||||||||||||||||
Number of restricted shares issued | 200,000 | ||||||||||||||||||||||
Number of restricted shares issued, value | $ 20,000 | ||||||||||||||||||||||
Tariq Chaudhary [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.10 | ||||||||||||||||||||||
Number of stock issued related to compensation | 500,000 | ||||||||||||||||||||||
Number of stock issued related to compensation, value | $ 50,000 | ||||||||||||||||||||||
Consultants [Member] | Restricted Common Stock [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.08 | ||||||||||||||||||||||
Number of shares issued for services | 600,000 | ||||||||||||||||||||||
Number of shares issued for services, value | $ 45,000 | ||||||||||||||||||||||
Leo B. Womack [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Warrant exercise price per share | $ 0.06 | ||||||||||||||||||||||
Warrants to purchase common stock | 1,000,000 | ||||||||||||||||||||||
Proceeds from exercise of warrants | $ 60,000 | ||||||||||||||||||||||
Debt instrument, forgiveness amount | $ 60,000 | ||||||||||||||||||||||
Joel Martin Oppenheim [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | $ 0.10 | |||||||||||||||||||||
Warrants to purchase common stock | 150,000 | 10,000 | |||||||||||||||||||||
Proceeds from exercise of warrants | $ 15,000 | ||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Options, volatility rate | 240.00% | 274.00% | |||||||||||||||||||||
Options, expected term | 1 year | 1 year | |||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Options, volatility rate | 283.00% | 283.00% | |||||||||||||||||||||
Options, expected term | 3 years | 3 years | |||||||||||||||||||||
Maximum [Member] | Mr. James Burns [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Health benefits | $ 25,000 | ||||||||||||||||||||||
Private Placements [Member] | 2019 Units [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.08 | ||||||||||||||||||||||
Number of shares issued | 1,875,000 | ||||||||||||||||||||||
Proceeds from private placement | $ 150,000 | ||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | ||||||||||||||||||||||
Private Placements [Member] | Joel Martin Oppenheim [Member] | 2019 Units [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.08 | ||||||||||||||||||||||
Number of shares issued | 156,250 | ||||||||||||||||||||||
Proceeds from private placement | $ 12,500 | ||||||||||||||||||||||
Warrant exercise price per share | $ 0.10 | ||||||||||||||||||||||
Debt instrument, forgiveness amount | $ 10,000 | ||||||||||||||||||||||
Cash payment of debt | $ 2,500 | ||||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Preferred stock, dividend rate | 9.00% | ||||||||||||||||||||||
2018 Units [Member] | Private Placements [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Number of shares issued | 3,750,000 | ||||||||||||||||||||||
Proceeds from private placement | $ 397,500 | ||||||||||||||||||||||
Private placement, description | Each 2018 Unit was comprised of one common share and one warrant entitling the holder to exercise such warrant for one common share for a period of two years from the date of issuance. | ||||||||||||||||||||||
2018 Units [Member] | Private Placements [Member] | Minimum [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | $ 0.08 | ||||||||||||||||||||||
Warrant exercise price per share | 0.10 | ||||||||||||||||||||||
2018 Units [Member] | Private Placements [Member] | Maximum [Member] | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued, price per share | 0.12 | ||||||||||||||||||||||
Warrant exercise price per share | $ 0.20 |
Equity - Schedule of Common Sto
Equity - Schedule of Common Stock Purchase Warrants Issued and Outstanding (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | ||
Warrants Outstanding, Beginning balance | 51,066,864 | 35,087,197 |
Warrants Outstanding, Granted | 12,250,000 | 24,829,666 |
Warrants Outstanding, Exercised | (125,000) | (3,910,000) |
Warrants Outstanding, Expired | (6,148,028) | (4,940,000) |
Warrants Outstanding, Ending balance | 57,043,836 | 51,066,864 |
Weighted Average Exercise Price, Beginning balance | $ 0.20 | $ 0.24 |
Weighted Average Exercise Price, Granted | 0.15 | 0.11 |
Weighted Average Exercise Price, Exercised | 0.09 | 0.09 |
Weighted Average Exercise Price, Expired | 0.25 | 0.10 |
Weighted Average Exercise Price, Ending balance | $ 0.14 | $ 0.20 |
Equity - Schedule of Warrants I
Equity - Schedule of Warrants Issuances During Period (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Warrants granted | 12,250,000 | 24,829,666 |
Warrants [Member] | Deferred Salary - CEO, CFO [Member] | ||
Number of Warrants granted | 339,166 | |
Warrants [Member] | Termination Agreement [Member] | ||
Number of Warrants granted | 5,250,000 | |
Warrants [Member] | Financing Agreement [Member] | ||
Number of Warrants granted | 1,500,000 | 3,810,000 |
Warrants [Member] | Consulting Agreement [Member] | ||
Number of Warrants granted | 2,000,000 | |
Warrants [Member] | Private Placements [Member] | ||
Number of Warrants granted | 3,750,000 | 5,312,500 |
Warrants [Member] | Bow Energy Ltd [Member] | ||
Number of Warrants granted | 368,000 | |
Warrants [Member] | Board of Directors and Advisory Board Service [Member] | ||
Number of Warrants granted | 7,000,000 | 7,750,000 |
Equity - Schedule of Fair Value
Equity - Schedule of Fair Value of Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Risk-free interest rate | 2.39% | |
Expected dividend rate | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free interest rate | 1.94% | |
Expected life | 1 year | 1 year |
Expected volatility | 240.00% | 274.00% |
Maximum [Member] | ||
Risk-free interest rate | 2.39% | |
Expected life | 3 years | 3 years |
Expected volatility | 283.00% | 283.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | Dec. 04, 2019 | Aug. 21, 2019USD ($)$ / sharesshares | Aug. 15, 2019$ / sharesshares | Dec. 14, 2018USD ($)$ / sharesshares | Nov. 02, 2018USD ($)$ / sharesshares | Nov. 01, 2018USD ($)$ / sharesshares | Oct. 31, 2018USD ($)$ / sharesshares | Oct. 22, 2018USD ($)$ / sharesshares | Oct. 17, 2018USD ($)$ / sharesshares | Sep. 17, 2018USD ($) | Sep. 14, 2018USD ($)$ / sharesshares | Aug. 31, 2018shares | Aug. 17, 2018USD ($)$ / sharesshares | May 22, 2018USD ($)$ / sharesshares | May 14, 2018shares | Apr. 26, 2018USD ($)$ / sharesshares | Apr. 20, 2018USD ($)$ / sharesshares | Apr. 18, 2018USD ($)$ / sharesshares | Apr. 12, 2018USD ($) | Apr. 02, 2018$ / shares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 23, 2018USD ($)$ / sharesshares | Feb. 28, 2018USD ($)$ / sharesshares | Feb. 27, 2018shares | Feb. 23, 2018USD ($)$ / sharesshares | Feb. 02, 2018USD ($)$ / sharesshares | Jan. 15, 2018USD ($)$ / sharesshares | Jan. 12, 2018USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jan. 15, 2019 | Jun. 29, 2018a | Jun. 01, 2018 | May 09, 2018$ / shares | Apr. 09, 2018USD ($) | Feb. 09, 2018USD ($) | Dec. 31, 2017shares | |
Warrant to purchase of common stock | shares | 2,708,336 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.20 | |||||||||||||||||||||||||||||||||||||
Warrants, term | 3 years | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.09 | |||||||||||||||||||||||||||||||||||||
Number of shares issued, value | $ 20,000 | |||||||||||||||||||||||||||||||||||||
Aggregate of warrant exercise price | 179,675 | |||||||||||||||||||||||||||||||||||||
Value of shares of common stock issued related to salary compensation | 473,353 | 3,466,376 | ||||||||||||||||||||||||||||||||||||
Debt description | The Company entered into a Memorandum of Understanding ("MOU") with Blue Sky. Pursuant to the MOU, the Company acquired an additional 3% working interest in the Canadian Properties, increasing our Working Interest to 28%. Total consideration paid from the Company to Blue Sky for the additional 3% Working Interest was $150,000. | |||||||||||||||||||||||||||||||||||||
Payments to related party | $ 558,726 | $ 194,104 | ||||||||||||||||||||||||||||||||||||
Non option shares granted | shares | 57,043,836 | 51,066,864 | 35,087,197 | |||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 72,037 | $ 103,632 | ||||||||||||||||||||||||||||||||||||
Number of acres | a | 41,526 | |||||||||||||||||||||||||||||||||||||
Working Interest Ownership | 3.00% | 25.00% | ||||||||||||||||||||||||||||||||||||
Total consideration paid | $ 150,000 | 944,055 | 932,441 | |||||||||||||||||||||||||||||||||||
Director Convertible Notes [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | 12.00% | 12.00% | ||||||||||||||||||||||||||||||||||||
Aggregate of warrant exercise price | $ 60,000 | |||||||||||||||||||||||||||||||||||||
Conversion price per share | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Payments to related party | $ 60,000 | |||||||||||||||||||||||||||||||||||||
Aggregate sold for convertible debt | $ 90,000 | |||||||||||||||||||||||||||||||||||||
Bridge Note Warrants [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Warrants, term | 1 year | |||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 6,249 | |||||||||||||||||||||||||||||||||||||
Warrants contractual term | 1 year | |||||||||||||||||||||||||||||||||||||
Restricted Common Stock [Member] | ||||||||||||||||||||||||||||||||||||||
Non option shares granted | shares | 180,000 | |||||||||||||||||||||||||||||||||||||
Blue Sky International Holdings Inc [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | 11.00% | |||||||||||||||||||||||||||||||||||||
Debt maturity date | April 1, 2019 | |||||||||||||||||||||||||||||||||||||
Conversion price per share | $ / shares | $ 0.12 | |||||||||||||||||||||||||||||||||||||
Board of Directors [Member] | Blue Sky International Holdings Inc [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible debt outstanding | $ 500,000 | |||||||||||||||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||||||||||||||
Number of shares issued, value | ||||||||||||||||||||||||||||||||||||||
Number of shares of common stock issued related to salary compensation | shares | 6,750,000 | |||||||||||||||||||||||||||||||||||||
Value of shares of common stock issued related to salary compensation | $ 6,750 | |||||||||||||||||||||||||||||||||||||
Warrants [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Aggregate of warrant exercise price | $ 27,375 | |||||||||||||||||||||||||||||||||||||
Non option shares granted | shares | 266,971 | |||||||||||||||||||||||||||||||||||||
Loan Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | 3.50% | 12.00% | 4.00% | 12.00% | ||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 10,000,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Warrants, term | 4 years | |||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 2,500,000 | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Paul Deputy [Member] | ||||||||||||||||||||||||||||||||||||||
Payments of severance | $ 192,521 | |||||||||||||||||||||||||||||||||||||
Amortization of severance pay | 30 months | |||||||||||||||||||||||||||||||||||||
Debt interest rate | 5.00% | |||||||||||||||||||||||||||||||||||||
Monthly severance pay | $ 5,000 | |||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 109,021 | |||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 250,000 | 250,000 | 250,000 | |||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.20 | $ 0.20 | $ 0.20 | |||||||||||||||||||||||||||||||||||
Warrants, term | 36 months | 36 months | 36 months | |||||||||||||||||||||||||||||||||||
Tariq Chaudhary [Member] | ||||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Number of shares of common stock issued related to salary compensation | shares | 500,000 | |||||||||||||||||||||||||||||||||||||
Value of shares of common stock issued related to salary compensation | $ 50,000 | |||||||||||||||||||||||||||||||||||||
Tariq Chaudhary [Member] | Employment Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 500,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.12 | |||||||||||||||||||||||||||||||||||||
Debt instrument term | 1 year | |||||||||||||||||||||||||||||||||||||
Salary paid first 90 days of probation period | $ 7,500 | |||||||||||||||||||||||||||||||||||||
Vesting period of award | 36 months | |||||||||||||||||||||||||||||||||||||
Salary | $ 120,000 | |||||||||||||||||||||||||||||||||||||
Signing bonus shares of common stock | shares | 500,000 | |||||||||||||||||||||||||||||||||||||
Quinten Beasley [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 1,110,000 | |||||||||||||||||||||||||||||||||||||
Settlement of accounts payable | $ 102,590 | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.092 | |||||||||||||||||||||||||||||||||||||
Gain loss on settlement | ||||||||||||||||||||||||||||||||||||||
Quinten Beasley [Member] | Separation Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 2,000,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Warrants, term | 2 years | |||||||||||||||||||||||||||||||||||||
Number of shares issued, value | $ 256,000 | |||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 244,429 | |||||||||||||||||||||||||||||||||||||
Joel Oppenheim [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | [1] | 12.00% | 12.00% | |||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 312,500 | 625,000 | 500,000 | 630,000 | 1,000,000 | |||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | $ 0.10 | $ 0.12 | $ 0.098 | $ 0.12 | |||||||||||||||||||||||||||||||||
Warrants, term | 3 years | |||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 104,167 | 208,333 | ||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.08 | $ 0.08 | ||||||||||||||||||||||||||||||||||||
Gross proceeds from warrants | $ 12,500 | $ 25,000 | ||||||||||||||||||||||||||||||||||||
Aggregate of warrant exercise price | $ 50,000 | $ 61,800 | ||||||||||||||||||||||||||||||||||||
Aggregate sold for convertible debt | $ 10,000 | |||||||||||||||||||||||||||||||||||||
Value of warrant to purchase of common stock | $ 12,500 | $ 25,000 | $ 104,009 | |||||||||||||||||||||||||||||||||||
Number of shares subscribed in private placement | shares | 156,250 | 312,500 | ||||||||||||||||||||||||||||||||||||
Joel Oppenheim [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Joel Oppenheim [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.14 | |||||||||||||||||||||||||||||||||||||
Joel Oppenheim [Member] | Bridge Note Warrants [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant number of shares granted | shares | 10,000 | |||||||||||||||||||||||||||||||||||||
Joel Oppenheim [Member] | Debt Private Placements [Member] | ||||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 62,066 | |||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 1,250,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 625,000 | |||||||||||||||||||||||||||||||||||||
Proceeds from issuance of debt | $ 50,000 | |||||||||||||||||||||||||||||||||||||
Joel Oppenheim [Member] | Loan Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | 12.00% | |||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 150,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | $ 0.10 | ||||||||||||||||||||||||||||||||||||
Warrants, term | 2 years | |||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 11,242 | |||||||||||||||||||||||||||||||||||||
Warrant number of shares granted | shares | 200,000 | |||||||||||||||||||||||||||||||||||||
Jovian Petroleum Corporation [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | [2] | 3.50% | 3.50% | |||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 1,250,000 | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Ownership interest | 25.00% | |||||||||||||||||||||||||||||||||||||
Value of warrant to purchase of common stock | $ 50,000 | |||||||||||||||||||||||||||||||||||||
Number of shares subscribed in private placement | shares | 625,000 | |||||||||||||||||||||||||||||||||||||
Jovian Petroleum Corporation [Member] | Revolving Line of Credit Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | 3.50% | |||||||||||||||||||||||||||||||||||||
Revolving Line of Credit | $ 500,000 | $ 200,000 | ||||||||||||||||||||||||||||||||||||
Jovian Petroleum Corporation [Member] | Amended Revolving Line of Credit Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Convertible debt outstanding | $ 500,000 | |||||||||||||||||||||||||||||||||||||
Debt description | The expiration of the line of credit and accruing interest at the rate of 3.5% per annum unless there is a default thereunder at which time amounts outstanding accrue interest at the rate of 7.5% per annum until paid in full, with such interest payable every 90 days. | |||||||||||||||||||||||||||||||||||||
Saleem Nizami [Member] | ||||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 100,000 | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.13 | |||||||||||||||||||||||||||||||||||||
Number of shares issued, value | $ 13,000 | |||||||||||||||||||||||||||||||||||||
Bow Energy Ltd [Member] | ||||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 1.15 | |||||||||||||||||||||||||||||||||||||
Bow Energy Ltd [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 106,156,712 | |||||||||||||||||||||||||||||||||||||
James E. Burns [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 2,000,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Warrants, term | 36 months | |||||||||||||||||||||||||||||||||||||
Salary | $ 65,000 | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Number of shares issued, value | $ 45,000 | |||||||||||||||||||||||||||||||||||||
Number of shares of common stock issued related to salary compensation | shares | 350,000 | |||||||||||||||||||||||||||||||||||||
Value of shares of common stock issued related to salary compensation | $ 35,000 | |||||||||||||||||||||||||||||||||||||
Number of restricted shares for common stock | shares | 500,000 | 500,000 | ||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 147,600 | |||||||||||||||||||||||||||||||||||||
Maximum health benefits amount | $ 25,000 | |||||||||||||||||||||||||||||||||||||
James E. Burns [Member] | Separation and Release Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 3,000,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.10 | |||||||||||||||||||||||||||||||||||||
Payments to related party | $ 33,000 | |||||||||||||||||||||||||||||||||||||
Number of restricted shares for common stock | shares | 2,000,000 | |||||||||||||||||||||||||||||||||||||
Ivar Siem [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | [1] | 12.00% | 12.00% | |||||||||||||||||||||||||||||||||||
Debt maturity date | [1] | On demand | On demand | |||||||||||||||||||||||||||||||||||
Aggregate sold for convertible debt | $ 20,000 | |||||||||||||||||||||||||||||||||||||
Ivar Siem [Member] | Bridge Note Warrants [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant number of shares granted | shares | 20,000 | |||||||||||||||||||||||||||||||||||||
Ivar Siem [Member] | Loan Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | 12.00% | 12.00% | ||||||||||||||||||||||||||||||||||||
Debt maturity date | (6) month maturity. | (4) month maturity. | ||||||||||||||||||||||||||||||||||||
Debt description | At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. | |||||||||||||||||||||||||||||||||||||
Leo Womack [Member] | ||||||||||||||||||||||||||||||||||||||
Debt interest rate | [3] | |||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 1,000,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.06 | |||||||||||||||||||||||||||||||||||||
Debt maturity date | [3] | On demand | On demand | |||||||||||||||||||||||||||||||||||
Payments to related party | $ 60,000 | |||||||||||||||||||||||||||||||||||||
Aggregate sold for convertible debt | $ 60,000 | |||||||||||||||||||||||||||||||||||||
Value of warrant to purchase of common stock | $ 60,000 | |||||||||||||||||||||||||||||||||||||
Leo Womack [Member] | Bridge Note Warrants [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant number of shares granted | shares | 60,000 | |||||||||||||||||||||||||||||||||||||
Leo Womack [Member] | Debt Private Placements [Member] | ||||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 31,033 | |||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 625,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 312,500 | |||||||||||||||||||||||||||||||||||||
Proceeds from issuance of debt | $ 25,000 | |||||||||||||||||||||||||||||||||||||
Blue Sky [Member] | Share Exchange Agreement [Member] | ||||||||||||||||||||||||||||||||||||||
Ownership interest | 100.00% | |||||||||||||||||||||||||||||||||||||
Number of shares cancelled | shares | 70,807,417 | |||||||||||||||||||||||||||||||||||||
Richard Dole [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 625,000 | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Value of warrant to purchase of common stock | $ 25,000 | |||||||||||||||||||||||||||||||||||||
Number of shares subscribed in private placement | shares | 312,500 | |||||||||||||||||||||||||||||||||||||
American Resource Offshore Inc. [Member] | ||||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 312,500 | |||||||||||||||||||||||||||||||||||||
Shares issued, price per share | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Value of warrant to purchase of common stock | $ 12,500 | |||||||||||||||||||||||||||||||||||||
Number of shares subscribed in private placement | shares | 156,250 | |||||||||||||||||||||||||||||||||||||
American Resource Offshore Inc. [Member] | Debt Private Placements [Member] | ||||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 31,033 | |||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 625,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 312,500 | |||||||||||||||||||||||||||||||||||||
Proceeds from issuance of debt | $ 25,000 | |||||||||||||||||||||||||||||||||||||
Jovian Petroleum Resources Two [Member] | Debt Private Placements [Member] | ||||||||||||||||||||||||||||||||||||||
Fair value of warrants issued | $ 62,066 | |||||||||||||||||||||||||||||||||||||
Warrant to purchase of common stock | shares | 1,250,000 | |||||||||||||||||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.08 | |||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 625,000 | |||||||||||||||||||||||||||||||||||||
Proceeds from issuance of debt | $ 50,000 | |||||||||||||||||||||||||||||||||||||
[1] | On August 17, 2018, the Company sold an aggregate of $90,000 in convertible promissory notes (the "Director Convertible Notes"), to the Company's directors, Ivar Siem ($20,000) through an entity that he is affiliated with; Leo Womack ($60,000); and Joel Oppenheim ($10,000). The Director Convertible Notes accrue interest at the rate of 12% per annum until paid in full and were due and payable on October 17, 2018. The amount owed may be prepaid at any time without penalty. The outstanding principal and interest owed under the Director Convertible Notes are convertible into common stock of the Company, from time to time, at the option of the holders of the notes, at a conversion price of $0.10 per share. As additional consideration for entering into the notes, the Company agreed to grant warrants to purchase one share of the Company's common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the "Bridge Note Warrants"). The warrants had a contractual life of one year. As such, the Company granted (a) 20,000 Bridge Note Warrants to an entity affiliated with Ivar Siem; (b) 60,000 Bridge Note Warrants to Leo Womack; and (c) 10,000 Bridge Note Warrants to Joel Oppenheim. The Director Convertible Notes contain standard and customary events of default. The Company fair valued the warrants issued using the Black-Scholes Option Pricing Model for a total fair value of $6,249. On October 22, 2018, $60,000 in Director Convertible Notes were settled by offsetting against $60,000 proceeds required for the exercise of warrants. On August 15, 2019, the Company entered into a loan agreement in the amount of $200,000 with Joel Oppenheim. The note bears interest at an interest rate of 12% per annum and payments of $50,000 are due monthly beginning September 2, 2019 with the remaining balance due in full at maturity on December 31, 2019. In association with the loan, the Company issued 200,000 warrants at an exercises price of $0.10 per share that expire on August 15, 2021. The warrants fully vest on maturity date. The notes are secured by a 50% Working Interest in the SUDS field and Noack field sale proceeds. On August 15, 2019, the Company entered into a loan agreement in the amount of $75,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a four (4) month maturity. On December 4, 2019, the Company entered into a loan agreement in the amount of $100,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a six (6) month maturity. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. | |||||||||||||||||||||||||||||||||||||
[2] | On February 9, 2018, the Company entered into a Revolving Line of Credit Agreement ("LOC") for $200,000 (subsequently increased to $500,000 on April 12, 2018) with Jovian Petroleum Corporation. The CEO of Jovian is Quinten Beasley, our former director (resigned October 31, 2018), and 25% of Jovian is owned by Zel C. Khan, our CEO and director. The initial agreement is for a period of 6 months and can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to year-end this LOC has been extended until December 31, 2021. | |||||||||||||||||||||||||||||||||||||
[3] | Balances are non-interest bearing and due on demand. |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments And Contingencies | |
Lease payments | $ 1,500 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating losses valuation allowance | 100.00% | 100.00% |
Federal statutory income tax rate | 21.00% | |
Income tax description | he Tax Cuts and Jobs Act was signed into law on December 22, 2017 and reduced the corporate income tax rate from 34% to 21%. | |
United States [Member] | ||
Operating losses | $ 2,200,000 | |
Operating losses expiration, description | Begin to expire if not utilized beginning in the year 2033. | |
Canada [Member] | ||
Accumulated non-capital tax losses | $ 27,500,000 | |
Accumulated non-capital tax losses, expiration description | Expire in 2039 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) expense computed at statutory rates | $ (629,000) | $ (7,986,000) |
Non-deductible items | 69,000 | 3,807,000 |
Change in statutory, foreign tax, foreign exchange rates and other | 172,000 | 943,000 |
Change in valuation allowance | 388,000 | 3,236,000 |
Total |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 2,174,000 | $ 5,410,000 |
Asset retirement obligation | 331,000 | 236,000 |
Oil and gas properties | (430,000) | (716,000) |
Property and equipment | (7,000) | |
Other | ||
Total deferred tax assets (liabilities) | 2,075,000 | 4,923,000 |
Less: Valuation allowance | (2,075,000) | (4,923,000) |
Net deferred tax assets (liabilities) |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Long-lived Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 2,916,734 | $ 1,173,060 |
Production costs | (3,387,099) | (1,541,419) |
Depreciation, depletion, amortization and accretion | (1,037,019) | (490,973) |
Results of operations from producing activities | (1,507,384) | (859,332) |
Total long-lived assets | 11,451,088 | 12,408,907 |
Canada [Member] | ||
Revenue | 2,827,877 | 1,118,283 |
Production costs | (3,021,805) | (1,239,317) |
Depreciation, depletion, amortization and accretion | (1,004,832) | (440,075) |
Results of operations from producing activities | (1,198,760) | (561,109) |
Total long-lived assets | 1,104,458 | 2,030,090 |
United States [Member] | ||
Revenue | 88,857 | 54,777 |
Production costs | (365,294) | (302,102) |
Depreciation, depletion, amortization and accretion | (32,187) | (50,898) |
Results of operations from producing activities | (308,624) | (298,223) |
Total long-lived assets | $ 10,346,630 | $ 10,625,808 |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenues | $ 2,916,734 | $ 1,173,060 |
Customer A [Member] | ||
Total revenues | 2,827,877 | 1,118,283 |
Customer B [Member] | ||
Total revenues | 88,857 | 54,777 |
Other Customer [Member] | ||
Total revenues |
Supplemental Information Rela_3
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 17, 2018 | |
Percentage of working interest acquired | 3.00% | ||
Consideration amount | $ 34,607,088 | ||
Asset retirement obligation | $ 1,723,364 | $ 1,509,622 | |
Discount of future net cash flows interest rate | 10.00% | 10.00% | |
Canadian Properties [Member] | |||
Percentage of working interest acquired | 28.00% | ||
Consideration amount | $ 1,246,216 | ||
Asset retirement obligation | $ 1,313,982 |
Supplemental Information Rela_4
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) - Schedule of Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Property acquisitions | $ 1,246,216 | |
Unevaluated | ||
Evaluated | ||
Exploration | ||
Development | ||
Total costs incurred | $ 1,189,480 |
Supplemental Information Rela_5
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) - Schedule of Capitalized Costs in Oil and Gas Property Acquisition, Exploration and Development (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Unevaluated properties | ||
Evaluated properties | 12,913,972 | 12,794,285 |
Gross capitalized costs | 12,913,972 | 12,794,285 |
Less: Accumulated DD&A | (1,520,527) | (475,208) |
Net capitalized costs | $ 11,393,445 | $ 12,319,077 |
Supplemental Information Rela_6
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) - Schedule of Proved Oil and Gas Reserves (Details) - bbl | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Proved oil and gas reserves, beginning | 1,894,180 | 1,638,200 |
Proved oil and gas reserves, Revisions of prior estimates | (11,217) | 181,678 |
Proved oil and gas reserves, Purchases of reserves in place | 320,865 | |
Proved oil and gas reserves, Disposition of mineral in place | (194,650) | |
Proved oil and gas reserves, Production | (82,506) | (51,913) |
Proved oil and gas reserves, ending | 1,800,457 | 1,894,180 |
Supplemental Information Rela_7
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) - Schedule of Proved Developed and Undeveloped Reserves (Details) - bbl | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Proved oil and gas reserves, beginning | 1,894,180 | 1,638,200 |
Acquired reserves | 320,865 | |
Disposition of reserves | (194,650) | |
Revision of prior estimates | (11,217) | 181,678 |
Production | (82,506) | (51,913) |
Proved oil and gas reserves, ending | 1,800,457 | 1,894,180 |
Proved Developed Reserve [Member] | ||
Proved oil and gas reserves, beginning | 1,773,800 | |
Acquired reserves | ||
Disposition of reserves | ||
Revision of prior estimates | (2,857) | |
Production | (82,506) | |
Proved oil and gas reserves, ending | 1,688,437 | 1,773,800 |
Proved Undeveloped Reserve [Member] | ||
Proved oil and gas reserves, beginning | 120,380 | |
Acquired reserves | ||
Revision of prior estimates | (8,360) | |
Proved oil and gas reserves, ending | 112,020 | 120,380 |
Supplemental Information Rela_8
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) - Schedule of Standardized Measure of Discounted Future Net Cash Flows (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |||
Future cash inflows | $ 95,308,120 | $ 89,797,082 | |
Future production costs | (30,349,800) | (37,021,141) | |
Future development costs | (2,051,730) | (2,394,080) | |
Future income taxes | |||
Future net cash flows | 62,906,590 | 50,381,861 | |
Discount of future net cash flows at 10% per annum | (37,081,860) | (26,743,136) | |
Standardized measure of discounted future net cash flows | $ 25,824,730 | $ 23,638,725 | $ 16,605,980 |
Supplemental Information Rela_9
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) - Schedule of Standardized Measure of Discounted Future Net Cash Flows (Details) (Parenthetical) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Discount of future net cash flows interest rate | 10.00% | 10.00% |
Supplemental Information Rel_10
Supplemental Information Relating to Oil And Gas Producing Activities (Unaudited) - Schedule of Changes in Standardized Measure of Discounted Future Cash Flows (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | ||
Beginning of year | $ 23,638,725 | $ 16,605,980 |
Sales and transfers of oil & gas produced, net of production costs | (1,514,335) | 368,421 |
Net changes in prices and production costs | 5,780,704 | 4,178,977 |
Changes in estimated future development costs | (676,141) | (5,742,027) |
Acquisitions/dispositions of minerals in place, net of production costs | 1,544,720 | |
Revision of previous estimates | (878,772) | 2,462,456 |
Change in discount | 1,386,793 | 286,849 |
Change in production rate or other | (1,912,244) | 3,933,348 |
End of year | $ 25,824,730 | $ 23,638,725 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Mar. 30, 2021USD ($)$ / sharesshares | Jan. 29, 2021USD ($)shares | Jan. 11, 2021shares | Dec. 15, 2020USD ($)$ / sharesshares | Sep. 02, 2020USD ($)$ / sharesshares | May 29, 2020a | Jan. 20, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)$ / sharesshares | Oct. 13, 2020USD ($) | Feb. 28, 2020USD ($) | May 09, 2018$ / shares | |
Warrant exercise price per share | $ / shares | $ 0.20 | ||||||||||||
Proceeds from exercise of warrants | $ | $ 179,675 | ||||||||||||
Shares issued, price per share | $ / shares | $ 0.09 | ||||||||||||
Warrants, term | 3 years | ||||||||||||
Common Stock [Member] | |||||||||||||
Number of stock issued related to compensation | 6,750,000 | ||||||||||||
Mark Allen [Member] | |||||||||||||
Debt interest rate | 12.00% | ||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Business combination, control obtained description | On May 29, 2020, Petrolia Energy Corporation acquired a 50% working interest in approximately 28,000 acres located in the Utikuma Lake area in Alberta, Canada. The property is an oil-weighted asset currently producing approximately 500 bopd of low decline light oil. The working interest was acquired from Blue Sky Resources Ltd. in an affiliated party transaction as Zel C. Khan, the Company's Chief Executive Officer, is related to the ownership of Blue Sky. Blue Sky acquired a 100% working interest in the Canadian Property from Vermilion Energy Inc. via Vermilion's subsidiary Vermilion Resources. The effective date of the acquisition was May 1, 2020. | ||||||||||||
Working interest percentage | 50.00% | ||||||||||||
Number of acres | a | 28,000 | ||||||||||||
Subsequent Event [Member] | Mark Allen [Member] | |||||||||||||
Warrants to purchase common stock | 5,400,000 | ||||||||||||
Warrant exercise price per share | $ / shares | $ 0.08 | ||||||||||||
Unpaid contract wages | $ | $ 30,000 | ||||||||||||
Number of common stock issued | 333,333 | ||||||||||||
Shares issued, price per share | $ / shares | $ 0.09 | ||||||||||||
Secured loan | $ | $ 270,000 | ||||||||||||
Debt maturity date | Dec. 15, 2019 | ||||||||||||
Debt instrument, conversion price | $ / shares | $ 0.05 | ||||||||||||
Warrants, term | 36 months | ||||||||||||
Subsequent Event [Member] | Mark Allen [Member] | Common Stock [Member] | |||||||||||||
Number of common stock issued | 5,400,000 | ||||||||||||
Subsequent Event [Member] | Employment Agreement [Member] | Mark Allen [Member] | |||||||||||||
Description on agreement terms | On September 1, 2020, the Board of Directors approved a contractual Employment Agreement between the Company and Mark Allen to appoint him as the new President of the Company. Mr. Allen's contract term is 6 months, with a cash payment of $90,000 in equal monthly installments of $15,000, including an option to extend. In addition, Mr. Allen is due to receive incentive compensation of 2,000,000 shares of common stock (1,000,000 were issued at signing and the remining shares are yet to be issued). He also is to receive 1,000,000 warrants at $0.08 per share that expire in 36 months and vest over a two-year period. Mr. Allen has been in the oil and gas industry for over 25 years, most recently as Vice President, Oil and Gas Consulting for Wipro Limited, a leading global consulting and information technology services firm. Prior to Wipro Limited, Mr. Allen was Vice President, Exploration and Production Services for SAIC, a Fortune 500 company. | ||||||||||||
Number of stock issued related to compensation | 2,000,000 | ||||||||||||
Cash payment | $ | $ 90,000 | ||||||||||||
Warrants to purchase common stock | 1,000,000 | ||||||||||||
Warrant exercise price per share | $ / shares | $ 0.08 | ||||||||||||
Subsequent Event [Member] | Executive Salary Payable Agreement [Member] | |||||||||||||
Description on agreement terms | On January 11, 2021, the Company signed an Executive Salary Payable Agreement with Zel Khan as the Chief Executive Officer. All of Mr. Khan's previous salary obligation will be satisfied by the issuance of 1,992,272 shares of the Company, within 15 days of the signed agreement. | ||||||||||||
Number of stock issued related to compensation | 1,992,272 | ||||||||||||
Subsequent Event [Member] | Settlement and Mutual Release Agreement [Member] | Paul Deputy [Member] | |||||||||||||
Description on agreement terms | On January 29, 2021, Paul Deputy, the reinstated Interim Chief Financial Officer, signed a Settlement and Mutual Release Agreement. In exchange for releasing the Company for any current, outstanding payroll and/or service-related liability at January 29, 2021, the Company agreed to pay Mr. Deputy $50,000, to be paid in $2,500 monthly increments, starting April 1, 2021. | ||||||||||||
Cash payment | $ | $ 50,000 | ||||||||||||
Number of shares to be issued | 250,000 | ||||||||||||
Subsequent Event [Member] | Blue Sky Resources Ltd [Member] | |||||||||||||
Working interest percentage | 100.00% | ||||||||||||
Ivar Siem [Member] | |||||||||||||
Debt interest rate | [1] | 12.00% | 12.00% | ||||||||||
Ivar Siem [Member] | Subsequent Event [Member] | |||||||||||||
Debt face amount | $ | $ 25,000 | $ 50,000 | |||||||||||
Debt interest rate | 12.00% | 12.00% | |||||||||||
Mark Allen [Member] | Subsequent Event [Member] | |||||||||||||
Warrants to purchase common stock | 1,650,000 | 275,000 | |||||||||||
Warrant exercise price per share | $ / shares | $ 0.05 | $ 0.05 | |||||||||||
Proceeds from exercise of warrants | $ | $ 82,500 | $ 13,750 | |||||||||||
[1] | On August 17, 2018, the Company sold an aggregate of $90,000 in convertible promissory notes (the "Director Convertible Notes"), to the Company's directors, Ivar Siem ($20,000) through an entity that he is affiliated with; Leo Womack ($60,000); and Joel Oppenheim ($10,000). The Director Convertible Notes accrue interest at the rate of 12% per annum until paid in full and were due and payable on October 17, 2018. The amount owed may be prepaid at any time without penalty. The outstanding principal and interest owed under the Director Convertible Notes are convertible into common stock of the Company, from time to time, at the option of the holders of the notes, at a conversion price of $0.10 per share. As additional consideration for entering into the notes, the Company agreed to grant warrants to purchase one share of the Company's common stock at an exercise price of $0.10 per share for each dollar loaned pursuant to the Director Convertible Notes (the "Bridge Note Warrants"). The warrants had a contractual life of one year. As such, the Company granted (a) 20,000 Bridge Note Warrants to an entity affiliated with Ivar Siem; (b) 60,000 Bridge Note Warrants to Leo Womack; and (c) 10,000 Bridge Note Warrants to Joel Oppenheim. The Director Convertible Notes contain standard and customary events of default. The Company fair valued the warrants issued using the Black-Scholes Option Pricing Model for a total fair value of $6,249. On October 22, 2018, $60,000 in Director Convertible Notes were settled by offsetting against $60,000 proceeds required for the exercise of warrants. On August 15, 2019, the Company entered into a loan agreement in the amount of $200,000 with Joel Oppenheim. The note bears interest at an interest rate of 12% per annum and payments of $50,000 are due monthly beginning September 2, 2019 with the remaining balance due in full at maturity on December 31, 2019. In association with the loan, the Company issued 200,000 warrants at an exercises price of $0.10 per share that expire on August 15, 2021. The warrants fully vest on maturity date. The notes are secured by a 50% Working Interest in the SUDS field and Noack field sale proceeds. On August 15, 2019, the Company entered into a loan agreement in the amount of $75,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a four (4) month maturity. On December 4, 2019, the Company entered into a loan agreement in the amount of $100,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a six (6) month maturity. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price of $0.10 per share, vesting immediately with a 36 month expiration period. |