Osage Exploration & Development (OSGE) 10-Q 15 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	9-May-14
Document And Entity Information	'	'
Entity Registrant Name	'OSAGE EXPLORATION & DEVELOPMENT INC	'
Entity Central Index Key	'0001405686	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	57,766,903
Document Fiscal Period Focus	'Q1	'
Document Fiscal Year Focus	'2014	'

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current assets:	'	'
Cash and equivalents	$8,610,448	$2,782,643
Accounts receivable	2,380,796	2,769,414
Prepaid expenses and other current assets	59,427	596,742
Deferred financing costs, net	1,481,141	1,829,124
Total current assets	12,531,812	7,977,923
Property and equipment, at cost:	'	'
Oil & gas properties and equipment (successful efforts method)	31,261,505	27,339,460
Other property & equipment	254,225	85,746
Total property & equipment, gross	31,515,730	27,425,206
Less: accumulated depletion, depreciation and amortization	-3,682,784	-2,683,085
Total property & equipment, net	27,832,946	24,742,121
Restricted cash	908,629	908,645
Total assets	41,273,387	33,628,689
Current liabilities:	'	'
Accounts payable	2,076,291	555,784
Joint interest billing	355,894	'
Accrued expenses	451,793	117,800
Unrealized losses on oil and gas derivatives	387,222	265,961
Capital lease liability, current portion	42,195	'
Notes payable	20,000,000	20,000,000
Total current liabilities	23,313,395	20,939,545
Unrealized losses on oil and gas derivatives, net of current portion	38,403	91,606
Capital lease liability, net of current portion	81,738	'
Liability for asset retirement obligations	4,125	3,886
Total liabilities	23,437,661	21,035,037
Commitments and contingencies	'	'
Stockholders' Equity:	'	'
Preferred stock, $0.0001 par value, 10,000,000 authorized, none issued and outstanding as of March 31, 2014 or December 31, 2013	'	'
Common stock, $0.0001 par value, 190,000,000 shares authorized; 57,711,347 and 49,854,675 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively	5,771	4,985
Additional paid-in capital	23,079,562	16,903,147
Stock purchase notes receivable	-95,000	-95,000
Accumulated deficit	-5,154,607	-4,219,480
Total stockholders' equity	17,835,726	12,593,652
Total liabilities and stockholders' equity	$41,273,387	$33,628,689

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	'	'
Preferred stock, shares outstanding	'	'
Common stock, shares authorized	$0.00	$0.00
Common stock, shares authorized	190,000,000	190,000,000
Common stock, shares issued	57,711,347	49,854,675
Common stock, shares outstanding	57,711,347	49,854,675

Consolidated_Statements_of_Ope

Consolidated Statements of Operations and Other Comprehensive Income (Loss) (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating revenues	'	'
Oil revenues	$2,132,817	$1,087,839
Natural gas revenues	504,598	124,033
Total operating revenues	2,637,415	1,211,872
Operating costs and expenses	'	'
Operating costs	473,142	182,371
General and administrative expenses	843,952	843,710
Depreciation, depletion and accretion	999,899	270,485
Total operating costs and expenses	2,316,993	1,296,566
Operating income (loss)	320,422	-84,694
Other income (expenses):	'	'
Interest income	424	117
Interest expense	-1,210,560	-766,506
Loss on oil and gas derivatives	-115,727	'
Gain on sale of land interests	70,314	'
Loss from continuing operations before income taxes	-935,127	-851,083
Provision for income taxes	'	'
Loss from continuing operations	-935,127	-851,083
Discontinued operations:	'	'
Income from discontinued operations net of income taxes	'	777,658
Net loss	-935,127	-73,425
Other comprehensive income, net of tax:	'	'
Foreign currency translation adjustment attributable to discontinued operations	'	23,563
Comprehensive loss	($935,127)	($49,862)
Basic and diluted income (loss) per share	'	'
Continuing operations	($0.02)	($0.02)
Discontinued operations	'	$0.02
Weighted average number of common shares and common share equivalents used to compute basic and diluted income (loss) per share	51,602,380	49,481,632

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:	'	'
Net loss	($935,127)	($73,425)
Adjustments to reconcile net loss to net cash provided by operating activities:	'	'
Shares issued for services	109,000	378,750
Amortization of deferred financing costs	347,983	314,462
Amortization of debt discount	'	43,265
Gain on sale of land interests	-70,314	'
Write off of expired mineral rights leases	'	11,250
Accretion of asset retirement obligation	200	1
Provision for depletion, depreciation and amortization	999,699	329,237
Unrealised loss on oil and gas derivatives	68,058	'
Changes in operating assets and liabilities:	'	'
Decrease (increase) in accounts receivable	388,618	-428,976
Decrease in prepaid expenses and other current assets	537,315	41,586
Increase in accounts payable	1,520,507	1,912,332
Increase in joint interest billing account	355,894	'
Increase (decrease) in accrued expenses	333,993	-609,665
Net cash provided by operating activities	3,655,826	1,918,817
Cash flows from investing activities:	'	'
Investments in oil & gas properties	-3,955,953	-5,706,254
Investments in non-oil & gas properties	-41,044	'
Net proceeds from sale of land interests	104,261	16,846
Decrease (increase) in restricted cash	16	-63,623
Proceeds from notes receivable	'	3,000
Net cash used in investing activities	-3,892,720	-5,750,031
Cash flows from financing activities:	'	'
Net proceeds from offering of securities	6,066,201	'
Proceeds from secured promissory notes	'	4,000,000
Proceeds from term loan	'	367,521
Principal payments on term loan	'	-30,628
Principal payments on capital leases	-3,502	'
Proceeds from exercise of warrants	2,000	'
Net cash provided by financing activities	6,064,699	4,336,893
Effect of exchange rate on cash and equivalents	'	66,339
Net increase in cash and equivalents	5,827,805	572,018
Cash and equivalents - beginning of period	2,782,643	486,205
Cash and equivalents - end of period	8,610,448	1,058,223
SUPPLEMENTAL CASH FLOW INFORMATION:	'	'
Cash payment for interest	862,577	408,779
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:	'	'
Increase in asset retirement obligation	39	5
Purchase of furniture and fixtures through capital lease	$127,435	'

Organization_and_Basis_of_Pres

Organization and Basis of Presentation	3 Months Ended
	Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
Organization and Basis of Presentation	'
	1. ORGANIZATION AND BASIS OF PRESENTATION
	Osage Exploration and Development, Inc. (“Osage” or the “Company”) is an independent energy company engaged primarily in the acquisition, development, production and sale of oil, natural gas and natural gas liquids. The Company’s production activities are located in the State of Oklahoma. The principal executive offices of the Company are at 2445 Fifth Avenue, Suite 310, San Diego, CA 92101.
	Osage prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) instructions to Form 10-Q and Item 310(b) of Regulation S-K. These financial statements should be read together with the financial statements and notes in the Company’s 2013 Form 10-K filed with the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP were condensed or omitted. The accompanying financial statements reflect all adjustments and disclosures, which, in the Company’s opinion, are necessary for fair presentation. All such adjustments are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the entire year.

Summary_of_Significant_Account

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

'

Summary of Significant Accounting Policies

'

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going Concern

As a result of production delays outside of the Company’s control, the Company was not in compliance with certain covenants including the minimum production covenant under the senior secured note purchase agreement (see Note 5 - Debt). This raises substantial doubt about the Company’s ability to continue as a going concern.

On April 27, 2012, we entered into a $10,000,000 senior secured note purchase agreement with Apollo Investment Corporation. On April 5, 2013 we amended this agreement, increasing the facility to $20,000,000 and on April 7, 2014 we further amended this agreement, increasing the facility to $30,000,000, extending the term of the facility by one year, reducing the interest rate from Libor plus 15% to Libor plus 11% and agreeing to modify the covenants to reflect the transition from participant to operator. The Company and the lender are still in discussions about modifications to the covenants and the existing covenants, some of which the Company is not in compliance with, remain in place until new covenants are agreed upon.

In the quarter ended March 31, 2014, the Company raised approximately $6.4 million of gross proceeds in a private placement. (See Note 10 - Equity).

Management of the Company has undertaken steps as part of a plan to improve operations with the goal of sustaining our operations for the next 12 months and beyond. These steps include (a) becoming operators of our own wells, (b) participating in drilling of wells in Logan County, Oklahoma, (c) controlling overhead and expenses, and (d) raising additional equity and/or debt.

The Company’s operating plans require additional funds which may take the form of debt or equity financings. The Company’s ability to continue as a going concern is dependent upon achieving profitable operations and obtaining additional financing. There is no assurance additional funds will be available on acceptable terms or at all.

These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.

Basis of Consolidation

The consolidated financial statements include the accounts of Osage and its wholly owned subsidiaries, Osage Energy Company, LLC and Osage Exploration and Development Operating, LLC. Accordingly, all references herein to Osage or the Company include the consolidated results. All significant inter-company accounts and transactions were eliminated in consolidation. The results, assets and liabilities of the Company’s former wholly owned subsidiary, Cimarrona, LLC, have been presented as discontinued operations in the consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Management used significant estimates in determining the carrying value of its oil and gas producing assets and the associated depreciation and depletion expense relates to sales volumes. The significant estimates include the use of proved oil and gas reserve estimates and the related present value of estimated future net revenues therefrom.

Reclassifications

Certain amounts included in the prior period financial statements have been reclassified to conform to the current period’s presentation. These reclassifications have no affect on the reported results in 2014 or 2013.

Risk Factors Related to Concentration of Sales and Products

The Company’s future financial condition and results of operations depend upon prices received for its oil and natural gas and the costs of finding, acquiring, developing and producing reserves. Prices for oil and natural gas are subject to fluctuations in response to changes in supply, market uncertainty and a variety of other factors beyond the Company’s control. These factors include worldwide political instability (especially in the Middle East), the foreign supply of oil and natural gas, the price of foreign imports, the level of consumer product demand and the price and availability of alternative fuels.

Cash and Equivalents

Cash and equivalents consist of short-term, highly liquid investments readily convertible into cash with an original maturity of three months or less.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash and accounts receivable arising from its normal business activities. The Company places its cash in what it believes are credit-worthy financial institutions. However, the Company’s cash balances have exceeded the FDIC insured levels at various times during the three months ended March 31, 2014 and 2013. The Company maintains cash accounts only at large, high quality financial institutions and believes the credit risk associated with cash held in banks exceeding the FDIC insured levels is remote. The Company generated substantially all of its revenues from four customers in the three months ended March 31, 2014 and three customers in prior year comparable quarter.

Deferred Financing Costs

The Company incurred deferred financing costs in connection with the Note Purchase Agreement (see Note 5), which represented the fair value of warrants, placement fees and legal fees. Deferred financing costs of $3,859,448 are being amortized over the term of the Note Purchase Agreement on a straight-line basis, which approximates the effective interest method.

Deferred financing costs net of accumulated amortization at March 31, 2014 were $1,481,141. Amortization of deferred financing costs was $347,983 and $314,462 for the three months ended March 31, 2014 and 2013, respectively.

Restricted Cash

In connection with the Apollo Note Purchase Agreement, as amended (see Note 5), the Company has classified $850,000, representing three months interest, as restricted cash as of March 31, 2014 and December 31, 2013. The Company has also pledged $58,645 for certain bonds and sureties. Restricted cash at March 31, 2014 was $908,629, compared to $908,645 at December 31, 2013.

Risk Management Activities

The Company has entered into certain derivative financial instruments to manage the inherent uncertainty of future revenues. The Company does not intend to hold or issue derivative financial instruments for speculative purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment. These derivative financial instruments are marked to market at each reporting period.

Net Income/Loss Per Share

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 “Earnings Per Share,” the Company’s basic net income/loss per share of common stock is calculated by dividing net income/loss by the weighted-average number of shares of common stock outstanding for the period. The diluted net income/loss per share of common stock is computed by dividing the net income/loss using the weighted-average number of common shares including potential dilutive common shares outstanding during the period. Potential common shares are excluded from the computation of diluted net loss per share if anti-dilutive.

The following table shows the computation of basic and diluted net income (loss) per share for the three months ended March 31, 2014 and 2013:

Three Months Ended March 31,

2014

2013

Net loss allocable to continuing operations

$

(935,127

)

$

(851,083

)

Net income allocable to discontinued operations

$

-

$

777,658

Basic and diluted net income (loss) per share

Continuing operations

$

(0.02

)

$

(0.02

)

Discontinued operations

$

-

$

0.02

Basic and diluted weighted average shares outstanding

51,602,380

49,481,632

Potential common shares consisted of 4,531,392 and 3,071,843 warrants to purchase common stock at March 31, 2014 and 2013, respectively. All of these warrants were excluded from the computations for the three months ended March 31, 2014 and 2013, as their effect would have been anti-dilutive.

Fair Value of Financial Instruments

As of March 31, 2014 and December 31, 2013, the fair value of cash and equivalents, accounts receivable, notes payable and accounts payable and accrued expenses approximate carrying values because of the short-term maturity of these instruments.

FASB ACS Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The three levels of valuation hierarchy are defined as follows:

●

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

●

Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC Topic 480, “Distinguishing Liabilities from Equity,” and ASC Topic 815, “Derivatives and Hedging.”

As of March 31, 2014 the Company identified certain derivative financial instruments which required disclosure at fair value on the balance sheet.

The following table presents information for those assets and liabilities requiring disclosure at fair value as of March 31, 2014:

Total

Fair Value Measurements Using:

Carrying

Fair

Level 1

Level 2

Level 3

Amount

Value

Inputs

Inputs

Inputs

March 31, 2014 assets (liabilities):

Commodity derivative liability

(425,625

)

(425,625

)

-

(425,625

)

-

The following methods and assumptions were used to estimate the fair values in the tables above.

Level 2 Fair Value Measurements

Commodity derivatives — The fair values of commodity derivatives are estimated using internal option pricing models based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.

Recent Accounting Pronouncements

The Company does not expect the adoption of any recently issued accounting pronouncements to have a material effect on the consolidated financial statements.

Oil_and_Gas_Properties

Oil and Gas Properties	3 Months Ended
	Mar. 31, 2014
Oil and Gas Property [Abstract]	'
Oil and Gas Properties	'
	3. OIL AND GAS PROPERTIES
	Oil and gas properties consisted of the following:
		31-Mar-14			31-Dec-13
	Properties subject to amortization	$	29,653,820		$	25,551,336
	Properties not subject to amortization		1,603,987			1,784,465
	Capitalized asset retirement costs		3,698			3,659
	Accumulated depreciation and depletion		(3,599,195	)		(2,606,243	)
	Oil & gas properties, net	$	27,662,310		$	24,733,217
	Depreciation and depletion expense for oil and gas properties totaled $992,952 and $267,045 in the three months ended March 31, 2014 and 2013, respectively.
	On April 21, 2011, the Company entered into a participation agreement (“Participation Agreement”) with Slawson Exploration Company (“Slawson”) and U.S. Energy Development Corporation (“USE,” Slawson and USE, together, the “Parties”). Pursuant to the terms of the Participation Agreement, Slawson and USE acquired 45% and 30% respectively, of our 10,000 acre Nemaha Ridge prospect in Logan County, Oklahoma for $4,875,000. In addition, the Parties carried Osage for 7.5% of the cost of the first three horizontal Mississippian wells, which means that for the first three horizontal Mississippian wells, the Company provided up to 17.5% of the total well costs. After the first three wells, the Company is responsible for up to 25% of the total well costs. Revenue from wells drilled pursuant to the Participation Agreement, after royalty payments, is allocated 45% to Slawson, 30% to USE and 25% to Osage. Slawson was the operator of all wells in the Nemaha Ridge prospect in sections where the Parties’ acreage controlled the section. In sections where the Parties’ acreage does not control the section, we may elect to participate in wells operated by others.
	On December 12, 2013, Osage and Slawson entered into an agreement (the “Partition Agreement”) which amended the Participation Agreement related to certain lands located within the Nemaha Ridge in Logan County, Oklahoma, and for the exploration and development of those leases by the Parties.
	Under the Partition Agreement and effective as of September 1, 2013, Slawson agreed to assign all of its rights, title and interest in and to the oil and gas leases and force-pooled acreage which are part of the Nemaha Ridge Project within certain sections to Osage and Osage agreed to assign all of its rights, title and interest in and to the oil and gas leases and force-pooled acreage which are part of the Nemaha Ridge Project within certain sections to Slawson, such that the net acreage controlled by the parties would remain substantially unchanged, but that the acreage controlled by each of the parties in undeveloped sections would be located in sections where the other party did not control acreage. The parties also agreed that the Participation Agreement would terminate as to all lands within the Nemaha Ridge Project except for lands within sections already developed by the parties which shall continue to be controlled by the Participation Agreement.
	As a result of the Partition Agreement, Osage has become the project operator on a majority of its acreage in the Nemaha Ridge Project. As of March 31, 2014, Osage operated approximately 5,457 net acres (11,228 gross) in thirty one sections, and remains joint-venture partners with Slawson in approximately 4,192 net acres (26,167 gross) across forty-five sections.
	In 2011, the Company began to acquire leases in Pawnee County, Oklahoma, targeting the Mississippian formation. In July 2011, we purchased from B&W Exploration, Inc. (“B&W”) the Pawnee County prospect targeting the Mississippian, for $8,500. In addition, B&W is also entitled to an overriding royalty interest on the leases acquired and a 12.5% carry on the first $200,000 of lease bonus paid in the form of an assignment of 12.5% of the leases acquired. Subsequently, B&W shall have an option to purchase a 12.5% share of leasehold acquired on a heads-up basis. As of March 31, 2014, the Company had 4,190 net acres (5,085 gross) leased in Pawnee County. As of March 31, 2014, none of these leases have been assigned to B&W.
	In 2011, we also began to acquire leases in Coal County, Oklahoma, targeting the Oily Woodford Shale formation. The Oily Woodford Shale formation is located mainly in southeastern Oklahoma in the Arkoma Basin. The Oily Woodford shale lies directly under the Mississippian and started as a vertical play, but horizontal drilling techniques and multi-stage fracturing technology have been used in the Woodford in recent years with much success. At March 31, 2014, we had 4,253 net (9,509 gross) acres leased in Coal County.
	At March 31, 2014 we have leased 18,092 net (51,989 gross) acres across three counties in Oklahoma as follows:
		Gross			Osage Net
	Logan (non operated)		26,167			4,192
	Logan		11,228			5,457
	Coal		9,509			4,253
	Pawnee		5,085			4,190
			51,989			18,092

Segment_and_Geographical_Infor

Segment and Geographical Information	3 Months Ended
	Mar. 31, 2014
Segments, Geographical Areas [Abstract]	'
Segment and Geographical Information	'
	4. SEGMENT AND GEOGRAPHICAL INFORMATION
	At March 31, 2014, the Company’s continuing operations comprised one segment in one geographic region.

Debt

Debt	3 Months Ended
	Mar. 31, 2014
Debt Disclosure [Abstract]	'
Debt	'
	5. DEBT
	Apollo - Note Purchase Agreement
	On April 27, 2012, we entered into a $10,000,000 senior secured note purchase agreement (“Note Purchase Agreement” or “Notes”) with Apollo Investment Corporation (“Apollo”). The Notes, which mature on April 27, 2015, are secured by substantially all of the assets of the Company, including a mortgage on all our Oklahoma leases. The Notes bear interest of Libor plus 15.0% with a Libor floor of 2.0%, with interest payable monthly. In addition, Apollo received a warrant to purchase 1,496,843 shares of common stock, exercisable at $0.01 per share, with a Black-Scholes value of $2,483,952 and an expiration date of April 27, 2017. Variables used in the valuation include (1) discount rate of 0.82%, (2) expected life of 5 years, (3) expected volatility of 245.0% and (4) zero expected dividends. The minimum draw amount on the Note Purchase Agreement is $1,000,000. At closing, we did not draw down any funds.
	At closing of the Note Purchase Agreement, we paid $100,000 of a minimum placement fee to CC Natural Resource Partners, LLC (“CCNRP”) and issued a warrant to purchase 250,000 shares of common stock, exercisable at $0.01 per share, with a Black-Scholes value of $413,690 and an expiration date of April 27, 2014. Variables used in the valuation include (1) discount rate of 0.26%, (2) expected life of 2 years, (3) expected volatility of 242.0% and (4) zero expected dividends. In addition, we paid $170,692 in legal fees, of which $100,000 were paid to Apollo. In December 2012, we paid an additional $380,000 in placement fees. We also issued a warrant to purchase 100,000 shares of common stock, exercisable at $0.01 per share, with a Black-Scholes value of $89,952 and a term of five years, to the placement agent for the Note Purchase Agreement and amended the term of the warrant granted on April 27, 2012 from two to five years, with a Black-Scholes value of $1,161. Variables used in the valuation include (1) discount rate of 0.72%, (2) expected life of five years, (3) expected volatility of 242.0% and (4) zero expected dividends. In December 2013 we paid an additional $100,000 in placement fees.
	On April 5, 2013 the Company and Apollo amended the Note Purchase Agreement, increasing the amount of the facility to $20,000,000 and modifying certain covenants for the remainder of the Note Purchase Agreement term. The amendment also provided a waiver of certain covenants as of March 31, 2013, as the Company did not meet certain covenants including the minimum production covenant as of that date. The Company paid an amendment fee of $100,000 which is being amortized over the remaining term of the Note Purchase Agreement.
	On August 12, 2013, the Company and Apollo amended the Note Purchase Agreement. The amendment required that the Company, within 75 days of the effective date as defined in the amendment, complete either (1) a sale of certain assets, or (2) the issuance of capital stock in a transaction that resulted in aggregate net proceeds as defined in the amendment. In the event that the Company did not complete either one of the aforementioned transactions, the Company would have been required under the terms of the amendment to issue to Apollo additional warrants equivalent to three percent of the Company’s common stock, on a fully-diluted basis. On October 7, 2013, the Company completed the sale of its membership interests in Cimarrona LLC as more fully discussed in Note 13. This sale satisfied the requirements of the amendment and the Company is thus not obligated to issue additional Warrants to Apollo.
	During the quarter ended March 31, 2014, we did not draw down any additional funds and, as of March 31, 2014, the amount outstanding under the Note Purchase Agreement was $20,000,000. On April 3, 2014, the Company and Apollo amended the Note Purchase Agreement, increasing the amount of the total facility to $30,000,000, extending the term by one year and reducing the interest rate from Libor plus 15% to Libor plus 11%. The parties also agreed to modify future covenants to reflect the Company’s transition from participant to operator.
	The Company has recorded deferred financing costs in the aggregate amount of $3,859,448 in connection with the Note Purchase Agreement, which represented the fair value of warrants issued to Apollo and CCNRP, placement fees, amendment fees and legal fees, which are amortized on a straight-line basis over the term of the Notes, which approximates the effective interest method, as the Company did not draw funds at issuance.
	On each anniversary of the closing date, the Company is obligated to pay an administrative fee of $50,000. The Company is subject to certain precedents in connection with each draw, an upfront fee equal to 2.0% of the principal amount of each draw, and is required to maintain a deposit account equal to three months of interest payments.
	The Company is subject to various affirmative, negative and financial covenants under the Note Purchase Agreement as amended along with other restrictions and requirements, all as defined in the Note Purchase Agreement. Affirmative covenants include by October 31st of each year beginning in 2012, a reserve report prepared as of the immediately preceding September 30, concerning the Company’s domestic oil and gas properties prepared by approved petroleum engineers, and thereafter as of September 30th of each year.
	The Company and Apollo are negotiating new covenants to the Note Purchase Agreement. Until these negotiations are complete existing covenants, some of which the Company is not in compliance with, remain in place. Accordingly, the Company has classified borrowings under the Note Purchase Agreement as short term in the accompanying consolidated balance sheets.
	Use of proceeds is limited to those purposes specified in the Note Purchase Agreement. The Notes are subject to mandatory prepayment in the event of certain asset sales, insurance or condemnation proceeds, issuance of indebtedness, extraordinary receipts and tax refunds. All terms are as defined in the Note Purchase Agreement.
	Boothbay - Secured Promissory Note
	On April 17, 2012, we issued a secured promissory note (“Secured Promissory Note”) to Boothbay Royalty Co., (“Boothbay”) for gross proceeds of $2,500,000. The Secured Promissory Note had a maturity date of April 17, 2014 and bore interest of 18%, payable monthly. In addition, Boothbay received 400,000 shares of common stock for which the relative fair value of $386,545 was recorded as debt discount, a 1.5% overriding royalty on our leases in section 29, township 17 North, range 3 and a 1.7143% overriding royalty on our leases in section 36, township 19 North, range 4 West in Logan County, Oklahoma. The closing price of the Company’s common stock on April 17, 2012 was $1.14. The Secured Promissory Note was secured by a first mortgage (with power of sale), security agreement and financing statement covering a 5% overriding royalty interest, proportionately reduced, in all of the Company’s leases in Logan County, Oklahoma. The Company repaid the Secured Promissory Note in full in December 2013.
	In connection with the Note Purchase Agreement, the Company recognized $1,210,560 of interest expense, of which $347,983 was non-cash interest expense and $862,577 was cash interest expense. In connection with the Note Purchase Agreement and the Secured Promissory Note, the Company recognized $766,505 of interest expense, of which $357,727 was non-cash interest expense, for the three month ended March 31, 2013. Cash interest expense related to the Note Purchase Agreement and the Secured Promissory Note represented $408,778 for the three months ended March 31, 2013.

Derivative_Financial_Instrumen

Derivative Financial Instruments	3 Months Ended
	Mar. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]	'
Derivative Financial Instruments	'
	6. DERIVATIVE FINANCIAL INSTRUMENTS
	The Company entered into certain derivative financial instruments with respect to a portion of its oil and gas production in the third quarter of 2013. Prior thereto, the Company had not entered into any derivative financial instruments. These instruments are used to manage the inherent uncertainty of future revenues due to commodity price volatility and currently include only costless price collars. The Company does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment.
	As of March 31, 2014, the Company had the following open oil derivative positions. These oil derivatives settle against the average of the daily settlement prices for the WTI first traded contract month on the New York Mercantile Exchange (“NYMEX”) for each successive day of the calculation period.
		Price Collars
		Monthly			Weighted Average		Weighted Average
		Volume			Floor Price		Ceiling Price
	Period	(BBLs/m)			($/BBL)		($/BBL)
	Q2 - Q4, 2014		6,000		$	85	$	95
	Q1 - Q2, 2015		6,000		$	80	$	93.5
	As of March 31, 2014, the Company had the following open natural gas derivative positions. These natural gas derivatives settle against the NYMEX Penultimate for the calculation period.
		Price Collars
		Monthly			Weighted Average		Weighted Average
		Volume			Floor Price		Ceiling Price
	Period	(Btu/m)			($/Btu)		($/Btu)
	Q2 - Q4, 2014		10,000		$	3.75	$	4.4
	Q1 - Q2, 2015		10,000		$	3.75	$	4.4
	Cash settlements and unrealized gains and losses on fair value changes associated with the Company’s commodity derivatives are presented in the “Oil and gas derivatives’ caption in the accompanying consolidated statements of earnings.
	The following table sets forth the cash settlements and unrealized gains and losses on fair value changes for commodity derivatives for the three months ended March 31, 2014.
		Three Months Ended
		31-Mar-14
	Cash settlements to (by) Company	$	(47,669	)
	Unrealized gains (losses) on commodity derivatives		(68,058	)
	Loss on oil and gas derivatives	$	(115,727	)
	On October 15, 2013, the Company entered into an Intercreditor Agreement with Apollo and BP Energy Company to provide collateral for its oil and gas derivative financial instruments. BP Energy Corporation North America simultaneously provided a Guarantee for $25 million as collateral for its obligations to the Company.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Commitments and Contingencies	'
	7. COMMITMENTS AND CONTINGENCIES
	Environment
	Osage, as owner and operator of oil and gas properties, is subject to various Federal, State, and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the owner of real property and the lessee under oil and gas leases for the cost of pollution clean-up resulting from operations, subject the owner/lessee to liability for pollution damages and impose restrictions on the injection of liquids into subsurface strata. Although Company environmental policies and practices are designed to ensure compliance with these laws and regulations, future developments and increasing stringent regulations could require the Company to make additional unforeseen environmental expenditures. The Company maintains insurance coverage it believes is customary in the industry, although it is not fully insured against all environmental risks. The Company is not aware of any environmental claims existing as of March 31, 2014, that would have a material impact on its consolidated financial position or results of operations. There can be no assurance, however, that current regulatory requirements will not change, or past non-compliance with environmental laws will not be discovered on the Company’s property.
	Operating leases
	In February 2011, the Company entered into a 36 month lease for its corporate offices in San Diego. In February 2014 the Company amended this lease to extend the term for an additional three years through February 2017. In February 2012, the Company entered into a 24 month lease for a vehicle to be utilized by its operations in Oklahoma and entered into a 36 month lease for a vehicle at the termination of the original auto lease. In December 2013, the Company entered into a three year lease for office space in Oklahoma City the term for which commenced in February 2014.
	Rental expense totaled $30,939 and $14,364 in the three months ended March 31, 2014 and 2013, respectively.
	Future minimum commitments under operating leases are as follows as of March 31, 2014:
	Year	Amount
	2014 (April - December)	$	137,825
	2015		184,810
	2016		186,098
	2017		29,862
	2018 and beyond		-
		$	538,595
	Capital leases
	The Company entered into a lease for certain office furniture and equipment during the three months ended March 31, 2014. The term of the lease is three years and as the lease essentially transfers the risks of ownership it is being accounted for as a capital lease.
	Leased property under capital leases at March 31, 2014 includes:
		31-Mar-14
	Furniture and equipment	$	127,436
	less: accumulated depreciation		(2,124	)
		$	125,312
	Total depreciation expense under capital leases was $2,124 for the three months ended March 31, 2014 and as of that date the future minimum lease payments under capital leases were as follows:
	Year	Amount
	2014 (April - December)	$	32,217
	2015		42,956
	2016		42,956
	2017		7,158
			125,287
	Less amount representing interest		(1,354	)
	Present value of minimum lease payments	$	123,933
	Current maturities	$	42,195
	Non-current maturities		81,738
		$	123,933
	Legal Proceedings
	The Company is not a party to any litigation that has arisen in the normal course of its business or that of its subsidiaries.
	Division de Impuestos y Actuanas Nacionales (“DIAN”), the Colombian tax authorities, levies a tax based on the equity value of Cimarrona. In 2010, the Company was notified by DIAN that it owed $883,742 in equity taxes relating to the 2001 and 2003 equity tax years. To compute the value the equity tax is assessed upon, Cimarrona subtracted the cost of its non-producing wells in 2001 and 2003. However, DIAN’s position is that as long as the field is productive, Cimarrona should not have subtracted the cost of the non-producing wells. In May 2011, we settled in full the 2001 equity liability with DIAN. In January 2012, we were informed by DIAN that we had lost our appeal on the 2003 tax issue and we increased the amount attributable to the 2003 tax year by $322,288 as of December 31, 2011 to correspond to the amount DIAN indicated we owed for the 2003 tax year. In January 2013, we successfully concluded negotiations with DIAN with respect to the ultimate liability for the 2003 tax year. DIAN waived certain interest and penalties. We paid the agreed final liability to DIAN in January 2013, and financed the payment with an unsecured Colombian term loan facility in the amount of $367,521. We recognized in discontinued operations the $531,644 benefit of the amnesty in the quarter ended June 30, 2013, upon receipt of official confirmation that the liability is fully settled. We repaid the unsecured Colombian term loan facility in October 2013 in conjunction with the sale of Cimarrona.
	SALE OF CIMARRONA LLC
	On October 7, 2013, the Company completed the sale of 100% of the membership interests in Cimarrona LLC to Raven Pipeline Company, LLC (“Raven”), pursuant to a Membership Interest Purchase Agreement dated September 30, 2013 (the “Agreement”) by and between the Company and Raven. The Cimarrona property is subject to an Ecopetrol Association Contract (the “Association Contract”) whereby Ecopetrol S.A. (“Ecopetrol”) receives royalties of 20% of the oil produced. The pipeline is not subject to the Association Contract. In addition to the royalty, according to the Association Contract, Ecopetrol may, for no consideration, become a 50% partner, once an audit of revenues and expenses indicate that the partners in the Association Contract have received a 200% reimbursement of all historical costs to develop and operate the Guaduas field. If such an audit determines that the specified reimbursement of historical costs occurred prior to September 30, 2013, the Company is required to reimburse Raven for any amounts due to Ecopetrol from Cimarrona LLC which relate to the period prior to that date. The Company believes its maximum exposure is 50% of Cimarrona LLC’s oil revenues for the nine months ended September 30, 2013, or $729,308. The Company has not recorded any provision for this matter, as it is not possible to estimate the potential liability, if any.

Major_Customers

Major Customers	3 Months Ended
	Mar. 31, 2014
Major Customers	'
Major Customers	'
	8. MAJOR CUSTOMERS
	During the three months ended March 31, 2014 and 2013, the Company had the following customers who accounted for all of its sales:
		Three Months ended					Three Months ended
		31-Mar-14					31-Mar-13
		Amount		% of Total			Amount		% of Total
	Slawson	$	1,917,664		72.7	%	$	952,071		78.6	%
	Devon		543,469		20.6	%		177,922		14.7	%
	Stephens		171,764		6.5	%		81,879		6.8	%
	Sundance		4,518		0.2	%		-		0	%
	Total	$	2,637,415		100	%	$	1,211,872		100	%

Liability_for_Asset_Retirement

Liability for Asset Retirement Obligations	3 Months Ended
	Mar. 31, 2014
Asset Retirement Obligation [Abstract]	'
Liability for Asset Retirement Obligations	'
	9. LIABILITY FOR ASSET RETIREMENT OBLIGATIONS
	The Company recognizes a liability at discounted fair value for the future retirement of tangible long-lived assets and associated assets retirement cost associated with the petroleum and natural gas properties. The fair value of the liability is capitalized as part of the cost of the related asset and amortized to expense over its useful life. The liability accretes until the date of expected settlement of the retirement obligations. The related accretion expense is recognized in the statement of operations. The provision will be revised for the effect of any changes to timing related to cash flow or undiscounted abandonment costs. Actual expenditures incurred for the purpose of site reclamation are charged to the asset retirement obligations (“AROs”) to the extent that the liability exists on the balance sheet. Differences between the actual costs incurred and the fair value of the liability recorded are recognized in income in the period the actual costs are incurred. There are no legally restricted assets for the settlement of AROs. No income tax is applicable to the ARO as of March 31, 2014 and December 31, 2013, because the Company records a valuation allowance on deductible temporary differences due to the uncertainty of its realization.
	A reconciliation of the Company’s asset retirement obligations for the three months ended March 31, 2014 is as follows:
		Three Months Ended
		31-Mar-14
	Beginning balance	$	3,886
	Incurred during the period		-
	Reversed during the period		-
	Additions for new wells		39
	Accretion expense		200
	Ending balance	$	4,125

Equity

Equity	3 Months Ended
	Mar. 31, 2014
Equity [Abstract]	'
Equity	'
	10. EQUITY
	Common Stock
	In February 2014, the Company initiated a private placement, pursuant to Securities Purchase Agreements between Osage and certain purchasers, with aggregate gross proceeds of approximately $6.4 million. The purchase price of each unit, representing one share of common stock and a warrant to purchase 0.4 shares of common stock at $1.80 per share, was $0.90. The warrants have a term of five years. The placement agent will receive placement fees of 8%, in cash or warrants or a combination thereof at their election. As of March 31, 2014 units representing $6,396,000 had been sold, representing 7,106,672 shares of common stock and warrants to purchase 2,842,662 shares of common stock. The placement agent fees related to these units as of March 31, 2014 were cash fees of $319,880 and warrants to purchase 191,880 shares of common stock at $0.01 per share. In addition, the Company incurred legal fees of $9,999 with respect to the private placement in the three months ended March 31, 2014.
	On January 2, 2014 we issued a total of 550,000 shares to three individuals in connection with amended employment and consulting agreements. Stock based compensation had already been expensed for 150,000 shares as discussed below. The remaining 400,000 shares vest on January 1, 2015, were valued at $436,000 based on closing prices of $1.00 for 200,000 shares and $1.18 for 200,000 shares and are being expensed over one year.
	During the three months ended March 31, 2013 we issued 400,000 shares which vested immediately to two employees with a fair value of $364,000, or $0.91 per share. On August 1, 2012, in connection with a three-year employment agreement, we agreed to issue 150,000 shares of common stock at future dates as specified in the agreement. The 150,000 shares were valued at $177,000, or $1.18 per share, and were being expensed over the three years of the employment agreement. We recognized $14,750 of expense related to these shares in the three months ended March 31, 2013. On January 2, 2014, we amended the employment agreement and the vesting of these shares accelerated, and we recognized the unamortized portion of the stock based compensation expense in the fourth quarter of 2013.
	Total stock-based compensation expense was $109,000 and $378,750 for the three months ended March 31, 2014 and 2013, respectively.
	Warrants
	During the three months ended March 31, 2014, 200,000 warrants were exercised by a consultant who had previously received the warrants in exchange for services.

Discontinued_Operations

Discontinued Operations	3 Months Ended
	Mar. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]	'
Discontinued Operations	'
	11. DISCONTINUED OPERATIONS
	On October 7, 2013, the Company completed the sale of 100% of the membership interests in Cimarrona LLC to Raven, pursuant to the Agreement dated September 30, 2013 by and between the Company and Raven. Cimarrona LLC is the owner of a 9.4% interest in certain oil and gas assets including a pipeline in the Guaduas field, located in the Dindal and Rio Seco Blocks that covers 30,665 acres in the Middle Magdalena Valley in Colombia.
	The sales price consisted of cash of $6,800,000, less settlement of debt of Cimarrona LLC of approximately $250,000. Of the net sales price, $250,000 will be held in escrow for 12 months to secure any post-Closing purchase price adjustments and any indemnity obligations of the Company pursuant to the Agreement. In addition, so long as the per barrel transportation rate charged with respect to the pipeline is not adjusted prior to March 31, 2014, then Raven is obligated to pay the Company an additional $1,000,000 in cash. Pursuant to the Agreement, the Company also recognized a receivable for a working capital adjustment of $422,955 in other current assets as of December 31, 2013 and recognized a gain on disposal of discontinued operations of $4,873,660 in the year ended December 31, 2013. Raven has reimbursed the Company for the working capital adjustment. The Company and Raven are in discussions about the status of the per barrel transportation rate with respect to the pipeline, and the Company does not presently have sufficient information to estimate the outcome of these discussions.
	The following table sets forth the results of operations for the discontinued operations for the three months ended March 31, 2013:
		31-Mar-13
	Revenues
	Oil revenues	$	615,687
	Pipeline revenues		599,192
	Total revenues		1,214,879
	Operating costs and expenses
	Operating expenses		316,538
	Depreciation, depletion and accretion		58,752
	Equity tax		32,964
	General and administrative		21,790
	Total operating costs and expenses		430,044
	Operating income		784,835
	Other income (expenses):
	Interest income		71
	Interest expense		(7,248	)
	Income before income taxes		777,658
	Provision for income taxes		-
	Net income	$	777,658

Subsequent_Events

Subsequent Events	3 Months Ended
	Mar. 31, 2014
Subsequent Events [Abstract]	'
Subsequent Events	'
	12. SUBSEQUENT EVENTS
	As more fully discussed in Note 5, the Company amended the Note Purchase Agreement with Apollo on April 3, 2014 and Apollo and the Company are in discussions with respect to modifications covenants. On April 7, 2014, the Company drew down an additional $5 million, bringing total borrowings under the note purchase agreement to $25 million.
	Subsequent to March 31, 2014, the Company has raised additional proceeds of $150,000 in the private placement.

Summary_of_Significiant_Accoun

Summary of Significiant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

'

Going Concern

'

Going Concern

As a result of production delays outside of the Company’s control, the Company was not in compliance with certain covenants including the minimum production covenant under the senior secured note purchase agreement (see Note 5 - Debt). This raises substantial doubt about the Company’s ability to continue as a going concern.

On April 27, 2012, we entered into a $10,000,000 senior secured note purchase agreement with Apollo Investment Corporation. On April 5, 2013 we amended this agreement, increasing the facility to $20,000,000 and on April 7, 2014 we further amended this agreement, increasing the facility to $30,000,000, extending the term of the facility by one year, reducing the interest rate from Libor plus 15% to Libor plus 11% and agreeing to modify the covenants to reflect the transition from participant to operator. The Company and the lender are still in discussions about modifications to the covenants and the existing covenants, some of which the Company is not in compliance with, remain in place until new covenants are agreed upon.

In the quarter ended March 31, 2014, the Company raised approximately $6.4 million of gross proceeds in a private placement. (See Note 10 - Equity).

Management of the Company has undertaken steps as part of a plan to improve operations with the goal of sustaining our operations for the next 12 months and beyond. These steps include (a) becoming operators of our own wells, (b) participating in drilling of wells in Logan County, Oklahoma, (c) controlling overhead and expenses, and (d) raising additional equity and/or debt.

The Company’s operating plans require additional funds which may take the form of debt or equity financings. The Company’s ability to continue as a going concern is dependent upon achieving profitable operations and obtaining additional financing. There is no assurance additional funds will be available on acceptable terms or at all.

These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.

Basis of Consolidation

'

Basis of Consolidation

The consolidated financial statements include the accounts of Osage and its wholly owned subsidiaries, Osage Energy Company, LLC and Osage Exploration and Development Operating, LLC. Accordingly, all references herein to Osage or the Company include the consolidated results. All significant inter-company accounts and transactions were eliminated in consolidation. The results, assets and liabilities of the Company’s former wholly owned subsidiary, Cimarrona, LLC, have been presented as discontinued operations in the consolidated financial statements.

Use of Estimates

'

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Management used significant estimates in determining the carrying value of its oil and gas producing assets and the associated depreciation and depletion expense relates to sales volumes. The significant estimates include the use of proved oil and gas reserve estimates and the related present value of estimated future net revenues therefrom.

Reclassifications

'

Reclassifications

Certain amounts included in the prior period financial statements have been reclassified to conform to the current period’s presentation. These reclassifications have no affect on the reported results in 2014 or 2013.

Risk Factors Related to Concentration of Sales and Products

'

Risk Factors Related to Concentration of Sales and Products

The Company’s future financial condition and results of operations depend upon prices received for its oil and natural gas and the costs of finding, acquiring, developing and producing reserves. Prices for oil and natural gas are subject to fluctuations in response to changes in supply, market uncertainty and a variety of other factors beyond the Company’s control. These factors include worldwide political instability (especially in the Middle East), the foreign supply of oil and natural gas, the price of foreign imports, the level of consumer product demand and the price and availability of alternative fuels.

Cash and Equivalents

'

Cash and Equivalents

Cash and equivalents consist of short-term, highly liquid investments readily convertible into cash with an original maturity of three months or less.

Concentration of Credit Risk

'

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash and accounts receivable arising from its normal business activities. The Company places its cash in what it believes are credit-worthy financial institutions. However, the Company’s cash balances have exceeded the FDIC insured levels at various times during the three months ended March 31, 2014 and 2013. The Company maintains cash accounts only at large, high quality financial institutions and believes the credit risk associated with cash held in banks exceeding the FDIC insured levels is remote. The Company generated substantially all of its revenues from four customers in the three months ended March 31, 2014 and three customers in prior year comparable quarter.

Deferred Financing Costs

'

Deferred Financing Costs

The Company incurred deferred financing costs in connection with the Note Purchase Agreement (see Note 5), which represented the fair value of warrants, placement fees and legal fees. Deferred financing costs of $3,859,448 are being amortized over the term of the Note Purchase Agreement on a straight-line basis, which approximates the effective interest method.

Deferred financing costs net of accumulated amortization at March 31, 2014 were $1,481,141. Amortization of deferred financing costs was $347,983 and $314,462 for the three months ended March 31, 2014 and 2013, respectively.

Restricted Cash

'

Restricted Cash

In connection with the Apollo Note Purchase Agreement, as amended (see Note 5), the Company has classified $850,000, representing three months interest, as restricted cash as of March 31, 2014 and December 31, 2013. The Company has also pledged $58,645 for certain bonds and sureties. Restricted cash at March 31, 2014 was $908,629, compared to $908,645 at December 31, 2013.

Risk Management Activities

'

Risk Management Activities

The Company has entered into certain derivative financial instruments to manage the inherent uncertainty of future revenues. The Company does not intend to hold or issue derivative financial instruments for speculative purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment. These derivative financial instruments are marked to market at each reporting period.

Net Income/Loss Per Share

'

Net Income/Loss Per Share

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 “Earnings Per Share,” the Company’s basic net income/loss per share of common stock is calculated by dividing net income/loss by the weighted-average number of shares of common stock outstanding for the period. The diluted net income/loss per share of common stock is computed by dividing the net income/loss using the weighted-average number of common shares including potential dilutive common shares outstanding during the period. Potential common shares are excluded from the computation of diluted net loss per share if anti-dilutive.

The following table shows the computation of basic and diluted net income (loss) per share for the three months ended March 31, 2014 and 2013:

Three Months Ended March 31,

2014

2013

Net loss allocable to continuing operations

$

(935,127

)

$

(851,083

)

Net income allocable to discontinued operations

$

-

$

777,658

Basic and diluted net income (loss) per share

Continuing operations

$

(0.02

)

$

(0.02

)

Discontinued operations

$

-

$

0.02

Basic and diluted weighted average shares outstanding

51,602,380

49,481,632

Potential common shares consisted of 4,531,392 and 3,071,843 warrants to purchase common stock at March 31, 2014 and 2013, respectively. All of these warrants were excluded from the computations for the three months ended March 31, 2014 and 2013, as their effect would have been anti-dilutive.

Fair Value of Financial Instruments

'

Fair Value of Financial Instruments

As of March 31, 2014 and December 31, 2013, the fair value of cash and equivalents, accounts receivable, notes payable and accounts payable and accrued expenses approximate carrying values because of the short-term maturity of these instruments.

FASB ACS Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The three levels of valuation hierarchy are defined as follows:

●

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

●

Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC Topic 480, “Distinguishing Liabilities from Equity,” and ASC Topic 815, “Derivatives and Hedging.”

As of March 31, 2014 the Company identified certain derivative financial instruments which required disclosure at fair value on the balance sheet.

The following table presents information for those assets and liabilities requiring disclosure at fair value as of March 31, 2014:

Total

Fair Value Measurements Using:

Carrying

Fair

Level 1

Level 2

Level 3

Amount

Value

Inputs

Inputs

Inputs

March 31, 2014 assets (liabilities):

Commodity derivative liability

(425,625

)

(425,625

)

-

(425,625

)

-

The following methods and assumptions were used to estimate the fair values in the tables above.

Level 2 Fair Value Measurements

Commodity derivatives — The fair values of commodity derivatives are estimated using internal option pricing models based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.

Recent Accounting Pronouncements

'

Recent Accounting Pronouncements

The Company does not expect the adoption of any recently issued accounting pronouncements to have a material effect on the consolidated financial statements.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share	'
	The following table shows the computation of basic and diluted net income (loss) per share for the three months ended March 31, 2014 and 2013:
		Three Months Ended March 31,
		2014			2013
	Net loss allocable to continuing operations	$	(935,127	)	$	(851,083	)
	Net income allocable to discontinued operations	$	-		$	777,658
	Basic and diluted net income (loss) per share
	Continuing operations	$	(0.02	)	$	(0.02	)
	Discontinued operations	$	-		$	0.02
	Basic and diluted weighted average shares outstanding		51,602,380			49,481,632
Schedule of Fair Value Measurements Assets and Liability	'
	The following table presents information for those assets and liabilities requiring disclosure at fair value as of March 31, 2014:
					Total			Fair Value Measurements Using:
		Carrying			Fair			Level 1		Level 2			Level 3
		Amount			Value			Inputs		Inputs			Inputs
	March 31, 2014 assets (liabilities):
	Commodity derivative liability		(425,625	)		(425,625	)		-		(425,625	)		-

Oil_and_Gas_Properties_Tables

Oil and Gas Properties (Tables)	3 Months Ended
	Mar. 31, 2014
Oil and Gas Property [Abstract]	'
Schedule of Oil and Gas Properties	'
	Oil and gas properties consisted of the following:
		31-Mar-14			31-Dec-13
	Properties subject to amortization	$	29,653,820		$	25,551,336
	Properties not subject to amortization		1,603,987			1,784,465
	Capitalized asset retirement costs		3,698			3,659
	Accumulated depreciation and depletion		(3,599,195	)		(2,606,243	)
	Oil & gas properties, net	$	27,662,310		$	24,733,217
Schedule of Area of Land Leased	'
	At March 31, 2014 we have leased 18,092 net (51,989 gross) acres across three counties in Oklahoma as follows:
		Gross			Osage Net
	Logan (non operated)		26,167			4,192
	Logan		11,228			5,457
	Coal		9,509			4,253
	Pawnee		5,085			4,190
			51,989			18,092

Derivative_Financial_Instrumen1

Derivative Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2014
Schedule of Cash Settlements and Unrealized Gains (Losses) on Fair Value Changes for Commodity Derivatives	'
	The following table sets forth the cash settlements and unrealized gains and losses on fair value changes for commodity derivatives for the three months ended March 31, 2014.
		Three Months Ended
		31-Mar-14
	Cash settlements to (by) Company	$	(47,669	)
	Unrealized gains (losses) on commodity derivatives		(68,058	)
	Loss on oil and gas derivatives	$	(115,727	)
Oil [Member]	'
Schedule of Oil and Natural Gas Open Derivative Positions	'
	As of March 31, 2014, the Company had the following open oil derivative positions. These oil derivatives settle against the average of the daily settlement prices for the WTI first traded contract month on the New York Mercantile Exchange (“NYMEX”) for each successive day of the calculation period.
		Price Collars
		Monthly			Weighted Average		Weighted Average
		Volume			Floor Price		Ceiling Price
	Period	(BBLs/m)			($/BBL)		($/BBL)
	Q2 - Q4, 2014		6,000		$	85	$	95
	Q1 - Q2, 2015		6,000		$	80	$	93.5
Natural Gas Member]	'
Schedule of Oil and Natural Gas Open Derivative Positions	'
	As of March 31, 2014, the Company had the following open natural gas derivative positions. These natural gas derivatives settle against the NYMEX Penultimate for the calculation period.
		Price Collars
		Monthly			Weighted Average		Weighted Average
		Volume			Floor Price		Ceiling Price
	Period	(Btu/m)			($/Btu)		($/Btu)
	Q2 - Q4, 2014		10,000		$	3.75	$	4.4
	Q1 - Q2, 2015		10,000		$	3.75	$	4.4

Commitments_and_Contingencies_

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Schedule of Future Minimum Commitments Under Operating Leases	'
	Future minimum commitments under operating leases are as follows as of March 31, 2014:
	Year	Amount
	2014 (April - December)	$	137,825
	2015		184,810
	2016		186,098
	2017		29,862
	2018 and beyond		-
		$	538,595
Schedule of Leased Property Under Capital Leases	'
	Leased property under capital leases at March 31, 2014 includes:
		31-Mar-14
	Furniture and equipment	$	127,436
	less: accumulated depreciation		(2,124	)
		$	125,312
Schedule of Future Minimum Lease Payments Under Capital Leases	'
	Total depreciation expense under capital leases was $2,124 for the three months ended March 31, 2014 and as of that date the future minimum lease payments under capital leases were as follows:
	Year	Amount
	2014 (April - December)	$	32,217
	2015		42,956
	2016		42,956
	2017		7,158
			125,287
	Less amount representing interest		(1,354	)
	Present value of minimum lease payments	$	123,933
	Current maturities	$	42,195
	Non-current maturities		81,738
		$	123,933

Major_Customers_Tables

Major Customers (Tables)	3 Months Ended
	Mar. 31, 2014
Major Customers	'
Schedule of Major Customers Accounting for All of Its Sale	'
	During the three months ended March 31, 2014 and 2013, the Company had the following customers who accounted for all of its sales:
		Three Months ended					Three Months ended
		31-Mar-14					31-Mar-13
		Amount		% of Total			Amount		% of Total
	Slawson	$	1,917,664		72.7	%	$	952,071		78.6	%
	Devon		543,469		20.6	%		177,922		14.7	%
	Stephens		171,764		6.5	%		81,879		6.8	%
	Sundance		4,518		0.2	%		-		0	%
	Total	$	2,637,415		100	%	$	1,211,872		100	%

Liability_for_Asset_Retirement1

Liability for Asset Retirement Obligations (Tables)	3 Months Ended
	Mar. 31, 2014
Asset Retirement Obligation [Abstract]	'
Schedule of Reconciliation of Asset Retirement Obligations	'
	A reconciliation of the Company’s asset retirement obligations for the three months ended March 31, 2014 is as follows:
		Three Months Ended
		31-Mar-14
	Beginning balance	$	3,886
	Incurred during the period		-
	Reversed during the period		-
	Additions for new wells		39
	Accretion expense		200
	Ending balance	$	4,125

Discontinued_Operations_Tables

Discontinued Operations (Tables)	3 Months Ended
	Mar. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]	'
Summary of Discontinued Operations	'
	The following table sets forth the results of operations for the discontinued operations for the three months ended March 31, 2013:
		31-Mar-13
	Revenues
	Oil revenues	$	615,687
	Pipeline revenues		599,192
	Total revenues		1,214,879
	Operating costs and expenses
	Operating expenses		316,538
	Depreciation, depletion and accretion		58,752
	Equity tax		32,964
	General and administrative		21,790
	Total operating costs and expenses		430,044
	Operating income		784,835
	Other income (expenses):
	Interest income		71
	Interest expense		(7,248	)
	Income before income taxes		777,658
	Provision for income taxes		-
	Net income	$	777,658

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Details Narrative) (USD $)	1 Months Ended	3 Months Ended			3 Months Ended
	Feb. 28, 2014	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014	Apr. 03, 2014	Apr. 05, 2013	Apr. 27, 2012	Mar. 31, 2014
					Apollo Investment Corporation [Member]	Apollo Investment Corporation [Member]	Apollo Investment Corporation [Member]	Apollo Investment Corporation [Member]	Apollo Note Purchase Agreement [Member]
Senior secured notes	'	'	'	'	'	$30,000,000	$20,000,000	$10,000,000	$30,000,000
Term of facility	'	'	'	'	'1 year	'	'	'	'
Line of credit facility, interest rate description	'	'	'	'	'reducing the interest rate from Libor plus 15% to Libor plus 11%	'	'	'	'
Proceeds from private placement	6,400,000	6,400,000	'	'	'	'	'	'	'
Deferred financing costs	'	3,859,448	'	'	'	'	'	'	'
Deferred financing costs, net of accumulated amortization	'	1,481,141	'	'	'	'	'	'	'
Amortization of deferred finance costs	'	347,983	314,462	'	'	'	'	'	'
Restricted cash	'	908,629	'	908,645	'	'	'	'	850,000
Pledged for bonds and sureties	'	$58,645	'	'	'	'	'	'	'
Number of warrants consisted in potential common shares to purchase common stock	'	4,531,392	'	3,071,843	'	'	'	'	'

Summary_of_Significant_Account3

Summary of Significant Accounting Policies - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accounting Policies [Abstract]	'	'
Net loss allocable to continuing operations	($935,127)	($851,083)
Net income allocable to discontinued operations	'	$777,658
Basic and diluted net income (loss) per share, Continuing operations	($0.02)	($0.02)
Basic and diluted net income (loss) per share, Discontinued operations	'	$0.02
Basic and diluted weighted average shares outstanding	51,602,380	49,481,632

Summary_of_Significant_Account4

Summary of Significant Accounting Policies - Schedule of Fair Value Measurements Assets and Liability (Details) (USD $)	Mar. 31, 2014
Commodity derivative liability	($425,625)
Carrying Amount [Member]	'
Commodity derivative liability	-425,625
Level 1 Inputs [Member]	'
Commodity derivative liability	'
Level 2 Inputs [Member]	'
Commodity derivative liability	-425,625
Level 3 Inputs [Member]	'
Commodity derivative liability	'

Oil_and_Gas_Properties_Details

Oil and Gas Properties (Details Narrative) (USD $)	0 Months Ended	1 Months Ended	3 Months Ended
	Apr. 21, 2011	Jul. 31, 2011	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Apr. 21, 2011	Apr. 21, 2011	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
	acre		acre		Slawson Exploration Company [Member]	Slawson Exploration Company [Member]	USE [Member]	Pawnee County [Member]	Coal County [Member]	Oklahoma County [Member]	Oklahoma County [Member]
					acre			acre	acre	acre	acre
Depreciation and depletion expense	'	'	$999,899	$270,485	'	'	'	'	'	'	'
Percentage of business acquired by parties	'	'	'	'	'	45.00%	30.00%	'	'	'	'
Acres of land	10,000	'	'	'	'	'	'	'	'	'	'
Proceeds from sale of land	4,875,000	'	'	'	'	'	'	'	'	'	'
Percentage of well cost carried by parties	7.50%	'	'	'	'	'	'	'	'	'	'
Percentage of total well costs provided for first three horizontal Mississippian wells	17.50%	'	'	'	'	'	'	'	'	'	'
Percentage of total well cost responsible after first three horizontal Mississippian wells	25.00%	'	'	'	'	'	'	'	'	'	'
Allocated percentage of revenue	25.00%	'	'	'	'	45.00%	30.00%	'	'	'	'
Net acres of leased land	'	'	18,092	'	4,192	'	'	4,190	4,253	18,092	18,092
Gross acres of leased land	'	'	51,989	'	26,167	'	'	5,085	9,509	51,989	51,989
Purchase of oil prospects	'	8,500	'	'	'	'	'	'	'	'	'
Percentage of leases acquired	'	12.50%	'	'	'	'	'	'	'	'	'
Lease bonus paid	'	$200,000	'	'	'	'	'	'	'	'	'

Oil_and_Gas_Properties_Schedul

Oil and Gas Properties - Schedule of Oil and Gas Properties (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Oil and Gas Property [Abstract]	'	'
Properties subject to amortization	$29,653,820	$25,551,336
Properties not subject to amortization	1,603,987	1,784,465
Capitalized asset retirement costs	3,698	3,659
Accumulated depreciation and depletion	-3,599,195	-2,606,243
Oil & gas properties, net	$27,662,310	$24,733,217

Oil_and_Gas_Properties_Schedul1

Oil and Gas Properties - Schedule of Area of Land Leased (Details)	Mar. 31, 2014
	acre
Gross acres of leased land	51,989
Net acres of leased land	18,092
Logan Non Operated Country [Member]	'
Gross acres of leased land	26,167
Net acres of leased land	4,192
Logan Operated Company [Member]	'
Gross acres of leased land	11,228
Net acres of leased land	5,457
Coal County [Member]	'
Gross acres of leased land	9,509
Net acres of leased land	4,253
Pawnee County [Member]	'
Gross acres of leased land	5,085
Net acres of leased land	4,190

Segment_and_Geographical_Infor1

Segment and Geographical Information (Details Narrative)	3 Months Ended
	Mar. 31, 2014
	Region
	Segment
Segments, Geographical Areas [Abstract]	'
Number of segment	1
Number of geographic region	1

Debt_Details_Narrative

Debt (Details Narrative) (USD $)

3 Months Ended

0 Months Ended

1 Months Ended

0 Months Ended

0 Months Ended

3 Months Ended

0 Months Ended

3 Months Ended

Mar. 31, 2014

Mar. 31, 2013

Apr. 27, 2012

Apr. 17, 2012

Apr. 17, 2012

Apr. 27, 2012

Dec. 31, 2012

Apr. 27, 2012

Apr. 03, 2014

Mar. 31, 2014

Apr. 05, 2013

Apr. 27, 2012

Mar. 31, 2014

Mar. 31, 2014

Apr. 17, 2012

Mar. 31, 2013

Mar. 31, 2014

Logan County Range Four [Member]

Logan County Range Three [Member]

Warrant [Member]

Warrant [Member]

Apollo Investment Corporation [Member]

Apollo Investment Corporation [Member]

Apollo Investment Corporation [Member]

Apollo Investment Corporation [Member]

CC Natural Resource Partners, LLC [Member]

CC Natural Resource Partners, LLC [Member]

ApolloInvestmentCorporationAndCCNaturalResourcePartnersLLCMember

Boothbay Royalty Co [Member]

Boothbay Royalty Co [Member]

Boothbay Royalty Co [Member]

Warrant [Member]

Note Purchase Agreement and Secured Promissory Note [Member]

Note Purchase Agreement [Member]

Senior secured notes

'

'

'

'

'

'

'

$10,000,000

$30,000,000

'

$20,000,000

'

'

'

'

'

'

Notes maturity date

'

'

'

'

'

'

'

27-Apr-15

'

'

'

'

'

'

17-Apr-14

'

'

Percentage of LIBOR plus interest rate

'

'

'

'

'

'

'

15.00%

'

'

'

'

'

'

'

'

'

Percentage of LIBOR floor interest rate

'

'

'

'

'

'

'

2.00%

'

'

'

'

'

'

'

'

'

Warrants issued to purchase of common stock

'

'

'

'

'

'

100,000

1,496,843

'

'

'

250,000

'

'

'

'

'

Warrants exercise price

'

'

'

'

'

'

0.001

0.01

'

'

'

0.01

'

'

'

'

'

Warrants value using Black-Scholes

'

'

'

'

'

1,161

89,952

2,483,952

'

'

'

413,690

'

'

'

'

'

Warrants maturity date

'

'

'

'

'

'

'

27-Apr-17

'

'

'

27-Apr-14

'

'

'

'

'

Discount rate

'

'

'

'

'

0.82%

0.72%

'

'

'

'

'

0.26%

'

'

'

'

Expected life in years

'

'

'

'

'

'5 years

'5 years

'

'

'

'

'

'2 years

'

'

'

'

Expected volatility rate

'

'

'

'

'

245.00%

242.00%

'

'

'

'

'

242.00%

'

'

'

'

Expected dividends rate

'

'

'

'

'

0.00%

0.00%

'

'

'

'

'

0.00%

'

'

'

'

Minimum amount draw through purchase of notes

'

'

'

'

'

'

'

'

'

1,000,000

'

'

'

'

'

'

'

Note purchase agreement minimum placement fee

'

'

'

'

'

'

'

'

'

'

'

100,000

'

'

'

'

'

Legal fees on notes

'

'

170,692

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Additional placement fees

'

'

'

'

'

'

380,000

'

'

'

'

'

100,000

'

'

'

'

Warrants expiration term

'

'

'

'

'

'

'5 years

'

'

'

'

'

'

'

'

'

'

Payment made for amendment fee

100,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Warrants expiration, range start

'

'

'

'

'

'2 years

'

'

'

'

'

'

'

'

'

'

'

Warrants expiratiom, range end

'

'

'

'

'

'5 years

'

'

'

'

'

'

'

'

'

'

'

Deferred financing costs

'

'

'

'

'

'

'

'

'

'

'

'

'

3,859,448

'

'

'

Drawn from portion of debt

0

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Liability to pay administrative fees

'

'

50,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Percentage of standby fee

'

'

3.00%

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Amount of debt undrawn funds

'

'

5,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Percentage of upfront fee

'

'

2.00%

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Secured promissory note

'

'

'

'

'

'

'

'

'

'

'

'

'

'

2,500,000

'

'

Secured promissory note, interest rate

'

'

'

'

'

'

'

'

'

'

'

'

'

'

18.00%

'

'

Shares issued for secured promissory note

'

'

'

'

'

'

'

'

'

'

'

'

'

'

400,000

'

'

Debt discount

'

'

'

'

'

'

'

'

'

'

'

'

'

'

386,545

'

'

Percentage of overriding royalty

'

'

'

1.71%

1.50%

'

'

'

'

'

'

'

'

'

'

'

'

Percentage of overriding royalty interest

'

'

'

'

'

'

'

'

'

'

'

'

'

'

5.00%

'

'

Common stock closing price

'

'

'

'

'

'

'

'

'

'

'

'

'

'

$1.14

'

'

Interest expense

1,210,560

766,506

'

'

'

'

'

'

'

'

'

'

'

'

'

766,505

1,210,560

Non-cash interest expense

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

357,727

347,983

Cash interest expense on secured promissory note

$862,577

$408,779

'

'

'

'

'

'

'

'

'

'

'

'

'

$408,778

$862,577

Derivative_Financial_Instrumen2

Derivative Financial Instruments (Details Narrative) (USD $)	Oct. 15, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]	'
Collateral amount	$25,000,000

Derivative_Financial_Instrumen3

Derivative Financial Instruments - Schedule of Oil Open Derivative Positions (Details) (Oil [Member])	3 Months Ended
	Mar. 31, 2014
	bbl
Q2 - Q4, 2014 [Member]	'
Monthly Volume (BBLs/m)	6,000
Weighted Average Floor Price ($/BBL)	85
Weighted Average Ceiling Price ($/BBL)	95
Q1 - Q2, 2015 [Member]	'
Monthly Volume (BBLs/m)	6,000
Weighted Average Floor Price ($/BBL)	80
Weighted Average Ceiling Price ($/BBL)	93.5

Derivative_Financial_Instrumen4

Derivative Financial Instruments - Schedule of Natural Gas Open Derivative Positions (Details) (Natural Gas Member])	3 Months Ended
	Mar. 31, 2014
	Btu
Q2 - Q4, 2014 [Member]	'
Monthly Volume (Btu/m)	10,000
Weighted Average Floor Price ($/Btu)	3.75
Weighted Average Ceiling Price ($/BBL)	4.4
Q1 - Q2, 2015 [Member]	'
Monthly Volume (Btu/m)	10,000
Weighted Average Floor Price ($/Btu)	3.75
Weighted Average Ceiling Price ($/BBL)	4.4

Derivative_Financial_Instrumen5

Derivative Financial Instruments - Schedule of Cash Settlements and Unrealized Gains (Losses) on Fair Value Changes for Commodity Derivatives (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]	'	'
Cash settlements to (by) Company	($47,669)	'
Unrealized gains (losses) on commodity derivatives	-68,058	'
Loss on oil and gas derivatives	($115,727)	'

Commitments_and_Contingencies_1

Commitments and Contingencies (Details Narrative) (USD $)

0 Months Ended

1 Months Ended

3 Months Ended

12 Months Ended

3 Months Ended

9 Months Ended

1 Months Ended

Oct. 07, 2013

Jan. 31, 2013

Feb. 29, 2012

Jan. 31, 2012

Feb. 28, 2011

Mar. 31, 2014

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2010

Mar. 31, 2014

Sep. 30, 2013

Oct. 07, 2013

Feb. 29, 2012

Cimarrona LLC [Member]

Cimarrona LLC [Member]

Cimarrona LLC [Member]

Termination of Original Auto Lease [Member]

Lease periods in months

'

'

'24 months

'

'36 months

'

'

'

'

'

'

'

'36 months

Capital lease terms

'

'

'

'

'

'3 years

'

'

'

'

'

'

'

Rental expense

'

'

'

'

'

$30,939

'

$14,364

'

'

'

'

'

Depreciation expense

'

'

'

'

'

2,124

'

'

'

'

'

'

'

Value of equity taxes levied

'

'

'

'

'

'

'

'

883,742

'

'

'

'

Increase in amount of tax

'

'

'

322,288

'

'

'

'

'

'

'

'

'

Payment of tax liability

'

367,521

'

'

'

'

'

'

'

'

'

'

'

Recognized in discontinued operations

'

'

'

'

'

'

531,644

'

'

'

'

'

'

Percenatage of sale membership interest

'

'

'

'

'

'

'

'

'

'

9.40%

100.00%

'

Percentage of royalty received for oil produced

20.00%

'

'

'

'

'

'

'

'

20.00%

'

'

'

Percentage of additional royalty received

50.00%

'

'

'

'

'

'

'

'

50.00%

'

'

'

Percentage of received reimbursement of all historical costs

200.00%

'

'

'

'

'

'

'

'

200.00%

'

'

'

Oil revenues

'

'

'

'

'

$2,132,817

'

$1,087,839

'

'

$729,308

'

'

Commitments_and_Contingencies_2

Commitments and Contingencies - Schedule of Future Minimum Commitments Under Operating Leases (Details) (USD $)	Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
2014 (April - December)	$137,825
2015	184,810
2016	186,098
2017	29,862
2018 and beyond	'
Total	$538,595

Commitments_and_Contingencies_3

Commitments and Contingencies - Schedule of Leased Property Under Capital Leases (Details) (USD $)	Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Furniture and equipment	$127,436
less: accumulated depreciation	-2,124
Leased property under capital leases, total	$125,312

Commitments_and_Contingencies_4

Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Capital Leases (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]	'	'
2014 (April - December)	$32,217	'
2015	42,956	'
2016	42,956	'
2017	7,158	'
Future minimum payments due	125,287	'
Less amount representing interest	-1,354	'
Present value of minimum lease payments	123,933	'
Current maturities	42,195	'
Non-current maturities	81,738	'
Capital lease	$123,933	'

Major_Customers_Schedule_of_Ma

Major Customers - Schedule of Major Customers Accounting for All of its Sale (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenue from major customers	$2,637,415	$1,211,872
Percentage of revenue from major customers	100.00%	100.00%
Slawson Exploration Company [Member]	'	'
Revenue from major customers	1,917,664	952,071
Percentage of revenue from major customers	72.70%	78.60%
Devon [Member]	'	'
Revenue from major customers	543,469	177,922
Percentage of revenue from major customers	20.60%	14.70%
Stephens [Member]	'	'
Revenue from major customers	171,764	81,879
Percentage of revenue from major customers	6.50%	6.80%
Sundance [Member]	'	'
Revenue from major customers	$4,518	'
Percentage of revenue from major customers	0.20%	0.00%

Liability_for_Asset_Retirement2

Liability for Asset Retirement Obligations (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2014
Asset Retirement Obligation [Abstract]	'
Legally restricted assets for settlement of AROs	$0
Asset retirement obligation, income tax	$0

Liability_for_Asset_Retirement3

Liability for Asset Retirement Obligations - Schedule of Reconciliation of Asset Retirement Obligations (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Asset Retirement Obligation Disclosure [Abstract]	'	'
Beginning balance	$3,886	'
Incurred during the period	'	'
Reversed during the period	'	'
Additions for new wells	39	'
Accretion expense	200	1
Ending balance	$4,125	'

Equity_Details_Narrative

Equity (Details Narrative) (USD $)	0 Months Ended		1 Months Ended	3 Months Ended
	Jan. 02, 2014	Aug. 01, 2012	Feb. 28, 2014	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Proceeds from issuance of private placement	'	'	$6,400,000	$6,400,000	'	'
Number of common stock warrants purchase	'	'	0.4	'	'	'
Common stock price per share	'	$1.18	$1.80	'	$0.91	'
Warrants price per share	'	'	$0.90	'	'	'
Warrant, expiration term	'	'	'5 years	'	'	'
Percentage of placement fee in cash or warrants	'	'	8.00%	'	'	'
Units sold	'	'	'	6,396,000	'	'
Common stock, shares	'	'	'	57,711,347	'	49,854,675
Legal fees	'	'	'	9,999	'	'
Shares issued under employment agreement	550,000	150,000	'	'	400,000	'
Stock based compensation, shares	150,000	'	'	'	'	'
Shares issued during period remaining shares vested	400,000	'	'	'	'	'
Shares issued during period remaining shares vested, value	436,000	'	'	'	'	'
Stock based compensation, expensed period	'1 year	'3 years	'	'	'	'
Shares issued under employment agreement, value	'	177,000	'	'	364,000	'
Employment agreement, term	'	'	'	'	'3 years	'
Stock based compensation, expenses recognized	'	'	'	'	14,750	'
Warrants, exercised	'	'	'	200,000	'	'
Stock-based compensation expense	'	'	'	109,000	378,750	'
Placement Agent Fees [Member]	'	'	'	'	'	'
Common stock price per share	'	'	'	$0.01	'	'
Warrants issued to purchase of common stock	'	'	'	191,880	'	'
Placement agent fees paid in cash	'	'	'	$319,880	'	'
Share Valuation Condition One [Member]	'	'	'	'	'	'
Shares issued during period remaining shares vested	200,000	'	'	'	'	'
Shares, closing prices, per share	$1	'	'	'	'	'
Share Valuation Condition Two [Member]	'	'	'	'	'	'
Shares issued during period remaining shares vested	200,000	'	'	'	'	'
Shares, closing prices, per share	$1.18	'	'	'	'	'
Common Stock [Member]	'	'	'	'	'	'
Common stock, shares	'	'	'	7,106,672	'	'
Warrants issued to purchase of common stock	'	'	'	2,842,662	'	'

Discontinued_Operations_Detail

Discontinued Operations (Details Narrative) (USD $)	0 Months Ended	3 Months Ended	12 Months Ended		3 Months Ended	9 Months Ended
	Oct. 07, 2013	Mar. 31, 2013	Dec. 31, 2013	Apr. 21, 2011	Mar. 31, 2014	Sep. 30, 2013	Oct. 07, 2013
				acre	Cimarrona LLC [Member]	Cimarrona LLC [Member]	Cimarrona LLC [Member]
						acre
Percenatage of sale membership interest	'	'	'	'	'	9.40%	100.00%
Area of land of oil and gas assets	'	'	'	10,000	'	30,665	'
Cash	'	'	$422,955	'	$6,800,000	'	'
Liability payable to disposal group	'	'	'	'	250,000	'	'
Payment of sales price held in escrow	'	'	'	'	250,000	'	'
Payment of disposal of transportation cost	'	'	1,000,000	'	'	'	'
Recognized benefit of discontinued operation	'	'	4,873,660	'	'	'	'
Percentage of royalty received for oil produced	20.00%	'	'	'	20.00%	'	'
Percentage of additional royalty received	50.00%	'	'	'	50.00%	'	'
Percentage of received reimbursement of all historical costs	200.00%	'	'	'	200.00%	'	'
Maximum percentage of exposure for oil produced	'	'	'	'	0.5	'	'
Revenues	'	$1,214,879	$3,286,872	'	'	$729,308	'

Discontinued_Operations_Summar

Discontinued Operations - Summary of Discontinued Operations (Details) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Discontinued Operations and Disposal Groups [Abstract]	'	'	'
Oil revenues	'	$615,687	'
Pipeline revenues	'	599,192	'
Total revenues	'	1,214,879	3,286,872
Operating expenses	'	316,538	'
Depreciation, depletion and accretion	'	58,752	'
Equity tax	'	32,964	'
General and administrative	'	21,790	'
Total operating costs and expenses	'	430,044	'
Operating income	'	784,835	'
Interest income	'	71	'
Interest expense	'	-7,248	'
Income before income taxes	'	777,658	'
Provision for income taxes	'	'	'
Net income	'	$777,658	'

Subsequent_Events_Details_Narr

Subsequent Events (Details Narrative) (USD $)	1 Months Ended	3 Months Ended
	Feb. 28, 2014	Mar. 31, 2014	Mar. 31, 2014	Apr. 07, 2014
			Subsequent Event [Member]	Subsequent Event [Member]
				Note Purchase Agreement [Member]
Additional proceeds in private placement	$6,400,000	$6,400,000	$1,500,000	'
Additional borrowings	'	'	'	5,000,000
Total borrowings	'	'	'	$25,000,000