Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 14, 2014 | Jun. 30, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'Cardinal Energy Group, Inc. | ' | ' |
Entity Central Index Key | '0001408351 | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Is Entity a Well-known Seasoned Issuer | 'No | ' | ' |
Is Entity a Voluntary Filer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $29,741,576 |
Entity Common Stock, Shares Outstanding | ' | 37,209,784 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CURRENT ASSETS | ' | ' |
Cash | $18,694 | $3,460 |
Prepaid expenses | 38,722 | ' |
Accounts receivable - related party | 4,633 | 16,978 |
Investments - marketable securities | 23,835 | 124,740 |
Total Current Assets | 85,884 | 145,178 |
PROPERTY AND EQUIPMENT, net | 56,078 | 20,073 |
OIL AND GAS PROPERTIES (full cost method) | ' | ' |
Unproved properties, net of accumulated depletion, depreciation, amortization, and impairment of $579,963 and $579,963, respectively | 1,355,631 | 653,222 |
OTHER ASSETS | ' | ' |
Deposits | 49,202 | 3,452 |
TOTAL ASSETS | 1,546,795 | 821,925 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued expenses | 234,011 | 50,948 |
Related party payables | 4,599 | 122,845 |
Convertible notes, net of debt discount of $-0- and $-0-, respectively | 418,306 | ' |
Derivative liability | 32,528 | 74,240 |
Total Current Liabilities | 689,444 | 248,033 |
LONG-TERM LIABILITIES | ' | ' |
Convertible notes, net of debt discount of $30,836 and $-0-, respectively | 202,164 | ' |
Notes payable | 400,000 | ' |
Asset retirement obligation | 8,639 | 7,760 |
Total Long-Term Liabilities | 610,803 | 7,760 |
TOTAL LIABILITIES | 1,300,247 | 255,793 |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock, 100,000,000 shares authorized at par value of $0.00001; 35,944,750 and 34,545,000 shares issued and outstanding, respectively | 359 | 346 |
Additional paid-in capital | 5,293,772 | 3,518,752 |
Stock subscription receivable | -3,500 | ' |
Accumulated other comprehensive loss | -2,193,765 | -2,092,860 |
Retained deficit | -2,850,318 | -860,106 |
TOTAL STOCKHOLDERS' EQUITY | 246,548 | 566,132 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $1,546,795 | $821,925 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Balance Sheets | ' | ' |
Proved properties, accumulated depletion, depreciation, amortization and impairment | $579,963 | $579,963 |
Convertible notes, debt discount | 0 | 0 |
Long-term Convertible notes, debt discount | $30,836 | $0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 35,944,750 | 34,545,000 |
Common stock, shares outstanding | 35,944,750 | 34,545,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Other Comprehensive Income (Loss) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
REVENUES | ' | ' |
Oil and gas revenues | $16,657 | $21,162 |
Total Revenues | 16,657 | 21,162 |
COSTS & OPERATING EXPENSES | ' | ' |
Operating and production costs | 11,990 | 21,934 |
Depreciation and amortization | 12,955 | 4,100 |
Property and other operating taxes | 1,530 | ' |
Accretion on asset retirement obligation | 879 | 173 |
Bad debt expense | ' | 20,000 |
Impairment | ' | 579,963 |
Loss on settlement of accounts payable | ' | 7,650 |
General and administrative | 1,546,956 | 206,585 |
Total Operating Expenses | 1,574,310 | 840,405 |
OPERATING LOSS | -1,557,653 | -819,243 |
OTHER INCOME (EXPENSES) | ' | ' |
Interest expense, net | -532,111 | -12 |
Gain on change in fair value of derivative liability | 99,552 | ' |
Total Other Income (Expenses) | -432,559 | -12 |
NET LOSS | -1,990,212 | -819,255 |
OTHER COMPREHENSIVE INCOME (LOSS) | ' | ' |
Change in value of investments | -100,905 | 120,120 |
NET COMPREHENSIVE LOSS | ($2,091,117) | ($699,135) |
Loss per share of common stock (basic & diluted) | ($0.06) | ($0.03) |
Weighted average shares outstanding | 35,051,012 | 31,996,630 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Subscriptions Receivable [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2011 | $311 | $3,547,877 | ' | ($40,851) | ($2,212,980) | $1,294,357 |
Balance, shares at Dec. 31, 2011 | 31,050,000 | ' | ' | ' | ' | ' |
Recapitalization pursuant to acquisition of Koko, Ltd. | 35 | -35 | ' | ' | ' | ' |
Recapitalization pursuant to acquisition of Koko, Ltd, shares | 3,450,000 | ' | ' | ' | ' | ' |
Common stock issued for services | ' | 15,150 | ' | ' | ' | 15,150 |
Common stock issued for services, shares | 15,000 | ' | ' | ' | ' | ' |
Common stock issued for cash | ' | 30,000 | ' | ' | ' | 30,000 |
Common stock issued for cash, shares | 30,000 | ' | ' | ' | ' | 30,000 |
Recognition of derivative liability on warrants | ' | -74,240 | ' | ' | ' | -74,240 |
Unrealized holding loss for available-for-sale-securities | ' | ' | ' | ' | 120,120 | 120,120 |
Net loss | ' | ' | ' | -819,255 | ' | -819,255 |
Balance at Dec. 31, 2012 | 346 | 3,518,752 | ' | -860,106 | -2,092,860 | 566,132 |
Balance, shares at Dec. 31, 2012 | 34,545,000 | ' | ' | ' | ' | 34,545,000 |
Common stock issued for services | 6 | 578,369 | ' | ' | ' | 578,375 |
Common stock issued for services, shares | 568,147 | ' | ' | ' | ' | 568,147 |
Common stock issued for cash | 4 | 327,796 | -3,500 | ' | ' | 324,300 |
Common stock issued for cash, shares | 457,407 | ' | ' | ' | ' | 457,407 |
Common stock issued for deferred costs | ' | 34,655 | ' | ' | ' | 34,655 |
Common stock issued for deferred costs, shares | 25,862 | ' | ' | ' | ' | 25,862 |
Common stock issued for interest on convertible notes | 3 | 302,150 | ' | ' | ' | 302,153 |
Common stock issued for interest on convertible notes, shares | 333,334 | ' | ' | ' | ' | 333,334 |
Common stock issued for property | ' | 18,750 | ' | ' | ' | 18,750 |
Common stock issued for property, shares | 15,000 | ' | ' | ' | ' | 15,000 |
Beneficial conversion feature | ' | 48,300 | ' | ' | ' | 48,300 |
Write off of derivative liability | ' | 63,000 | ' | ' | ' | 63,000 |
Accrued compensation forgiven by officers - contributed capital | ' | 402,000 | ' | ' | ' | 402,000 |
Unrealized holding loss for available-for-sale-securities | ' | ' | ' | ' | -100,905 | -100,905 |
Net loss | ' | ' | ' | -1,990,212 | ' | -1,990,212 |
Balance at Dec. 31, 2013 | $359 | $5,293,772 | ($3,500) | ($2,850,318) | ($2,193,765) | $246,548 |
Balance, shares at Dec. 31, 2013 | 35,944,750 | ' | ' | ' | ' | 35,944,750 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($1,990,212) | ($819,255) |
Adjustments to reconcile net loss to net cash used in operations: | ' | ' |
Loss on settlement of accounts payable | ' | 7,650 |
Bad debt expense | ' | 20,000 |
Impairment | ' | 579,963 |
Depreciation | 12,955 | 4,100 |
Accretion | 879 | 173 |
Amortization of debt discount | 143,511 | ' |
Stock based compensation | 597,071 | ' |
Expenses paid by related party | 50,289 | ' |
Common stock issued for interest | 302,153 | ' |
Gain on change in fair value of derivative liability | -99,552 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable - related party | 12,345 | -16,978 |
Prepaid expenses | -22,763 | ' |
Subscription receivable | -3,500 | ' |
Other assets | -25,750 | -2,452 |
Accounts payable and accrued expenses | 585,063 | 46,523 |
Accounts payable - related party | 8,778 | 85,898 |
Net Cash Used in Operating Activities | -428,733 | -94,378 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Cash paid on notes receivable | ' | -20,000 |
Purchase of property and equipment | -48,960 | -14,198 |
Purchase of oil and gas properties | -283,659 | ' |
Sale of oil and gas properties | ' | 75,000 |
Net Cash (Used in) Provided by Investing Activities | -332,619 | 40,802 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from notes payable - related party | 60,600 | 46,500 |
Stock issued for cash | 327,800 | 30,000 |
Proceeds from convertible notes payable | 743,307 | ' |
Repayment of convertible notes payable | -97,208 | ' |
Repayment of notes payable - related party | -257,913 | -19,575 |
Net Cash Provided by (Used in) Financing Activities | 776,586 | 56,925 |
NET INCREASE IN CASH | 15,234 | 3,349 |
CASH AT BEGINNING OF PERIOD | 3,460 | 111 |
CASH AT END OF PERIOD | 18,694 | 3,460 |
CASH PAID FOR: | ' | ' |
Interest | ' | 12 |
Income Taxes | ' | ' |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Unrealized gain (loss) on AFS securities | 100,905 | 120,120 |
Recapitalization of Koto | ' | 35 |
Derivative liability from issuance of warrants | ' | 74,240 |
Revision of ARO estimat | ' | 3,601 |
Shares issued for settlement of accounts payable | ' | 15,150 |
Related party debt issued for cash bond | 20,000 | ' |
Debt discount from beneficial conversion feature | 48,300 | ' |
Common stock issued for prepaid services | 15,959 | ' |
Common stock issued for deferred costs | 34,655 | ' |
Common stock issued for oil and gas properties | 18,750 | ' |
Derivative liability on convertible notes | 120,840 | ' |
Note payable issued for purchase of oil and gas properties | 400,000 | ' |
Extinguished derivative liability | 63,000 | ' |
Accrued compensation forgiven by officers - contributed capital | $402,000 | ' |
Nature_of_Operations_and_Summa
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
Nature of Operations and Summary of Significant Accounting Policies | ' |
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations and Organization | |
Cardinal Energy Group, Inc. (the “Company”) was incorporated in the State of Nevada on June 19, 2007 under the name Koko, Ltd., for the purpose of developing, manufacturing and selling a steak timer. On September 28, 2012, the Company changed the focus of its business when it acquired all of the ownership interests of Cardinal Energy Group, LLC, an Ohio limited liability company which was engaged in the business of acquiring, exploring, developing and operating oil and gas leases. The Company changed its name from Koko, Ltd. to Cardinal Energy Group, Inc. on October 10, 2012 in connection with this acquisition. | |
The Company has been engaged in the exploration, development, exploitation and production of oil and natural gas. The Company sells its oil and gas products to domestic purchasers of oil and gas production. Its operations are presently focused in the states of California, Ohio and Texas. The recoverability of the capitalized exploration and development costs for these properties is dependent upon the existence of economically recoverable reserves, the Company’s ability to obtain the necessary financing to complete exploration and development, and future profitable production or proceeds from disposition of such property. | |
Basis of Presentation and Use of Estimates | |
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of revenues and expenses for the reported year. Actual results may differ from those estimates. | |
Revenues and direct operating expenses of the California properties represent shareholders’ interest in the properties acquired for the periods prior to the closing date and are presented on the accrual basis of accounting and in accordance with generally accepted accounting principles. The consolidated financial statements are not indicative of the results of operations of the acquired properties going forward due to changes in the business and inclusion of the above mentioned expenses. | |
Principles of Consolidation | |
Our consolidated financial statements include the accounts of subsidiaries in which a controlling interest is held. All intercompany transactions have been eliminated. Undivided interests in oil and gas exploration and production joint ventures are consolidated on a proportionate basis. Investments in entities without a controlling interest are accounted for by the equity method or cost basis. The equity method is used to account for investments in non-controlled entities when Cardinal has the ability to exercise significant influence over operating and financial policies. In applying the equity method of accounting, the investments are initially recognized at cost, and subsequently adjusted for the Company’s proportionate share of earnings, losses and distributions. The cost method is used when we do not have the ability to exert significant influence. | |
Cash and Cash Equivalents | |
Cash and cash equivalents are all highly liquid investments with an original maturity of three months or less at the time of purchase and are recorded at cost, which approximates fair value. | |
Allowance for Doubtful Accounts | |
Uncollectible accounts receivable are charged directly against earnings when they are determined to be uncollectible. Use of this method does not result in a material difference from the valuation method required by generally accepted accounting principles. At December 31, 2013 and 2012, no reserve for allowance for doubtful accounts was needed. | |
Ceiling Test | |
In applying the full cost method, the Company performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas property and equipment is limited to the “estimated present value” of the future net revenues from its proved reserves, discounted at a 10-percent interest rate and based on current economic and operating conditions, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to any book and tax basis differences of the properties. Impairments were $-0- and $579,963 for the years ended December 31, 2013 and 2012 respectively. | |
Oil and Gas Properties | |
The Company follows the full cost method of accounting for its oil and natural gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities plus 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 income. | |
Depletion and depreciation of proved oil and gas properties is calculated on the units-of-production method based upon estimates of proved reserves. Such calculations include the estimated future costs to develop proved reserves. Oil and gas reserves are converted to a common unit of measure based on the energy content of 6,000 cubic feet of gas to one barrel of oil. Costs of unevaluated properties are not included in the costs subject to depletion. These costs are assessed periodically for impairment. | |
For the year ended December 31, 2012, management decided to forego additional development on certain leases. As a result, $579,963 of cost associated with these leases was transferred into the evaluated property pool and impaired, as there were no proven reserves. As of December 31, 2013 and 2012 there were no proved reserves. | |
Property and Equipment | |
Support equipment and other property and equipment are valued at cost and depreciated over their estimated useful lives, using the straight-line method over estimated useful lives of 3 to 5 years. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in income or loss from operations. | |
Valuation of Long-Lived Assets | |
The Company follows ASC 360 regarding the valuations and carrying values of its long-lived assets. Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their estimated fair values. | |
Stock-based Compensation | |
The Company follows the provisions of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock-based compensation. | |
Equity instruments issued to non-employees for goods or services are accounted at fair value when the service is complete or a performance commitment date is reached, whichever is earlier. | |
Earnings (Loss) per Share | |
Basic earnings (loss) per share (EPS) is calculated by dividing the Company’s net earnings (loss) applicable to common stockholders by the weighted average number of common shares during the period. Diluted EPS assumes the exercise of stock option and warrants and the conversion of convertible debt, provided the effect is not antidilutive. The effect of computing diluted loss per share is anti-dilutive and, as such, basic and diluted loss per share is the same for the years ended December 31, 2013 and 2012. | |
Asset Retirement Obligation | |
The Company follows FASB ASC 410, Asset Retirement and Environmental Obligations which requires entities to record the fair value of a liability for asset retirement obligations (“ARO”) and record a corresponding increase in the carrying amount of the related long-lived asset. The asset retirement obligation primarily relates to the abandonment of oil and gas properties. The present value of the estimated asset retirement cost is capitalized as part of the carrying amount of oil and gas properties and is depleted over the useful life of the asset. The settlement date fair value is discounted at our credit adjusted risk-free rate in determining the abandonment liability. The abandonment liability is accreted with the passage of time to its expected settlement fair value. Revisions to such estimates are recorded as adjustments to ARO. At the time the abandonment cost is incurred, the Company is required to recognize a gain or loss if the actual costs do not equal the estimated costs included in ARO. The ARO is based upon numerous estimates and assumptions, including future abandonment costs, future recoverable quantities of oil and gas, future inflation rates, and the credit-adjusted risk-free interest rate. The ARO is $8,639 and $7,760 as of December 31, 2013 and 2012, respectively. The Company accreted $879 and $173 to ARO during the years ended December 31, 2013 and 2012, respectively. | |
Available-for-Sale Securities | |
The Company’s available-for-sale securities consist of investments in marketable securities. The Company carries its investment at fair value based upon quoted market prices. Unrealized holding gains (losses) on available-for-sale securities are excluded from earnings and reported as accumulated other comprehensive gain (loss), a separate component of stockholders’ equity (deficit), until realized. The Company recorded unrealized (losses) gains of ($100,905) and $120,120 during the years ended December 31, 2013 and 2012, respectively. Accumulated Other Comprehensive Losses were $2,193,765 and $2,092,860 as of December 31, 2013 and 2012, respectively. | |
Income Taxes | |
The Company accounts for income taxes in accordance with accounting guidance now codified as ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. | |
A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized. | |
The Company applies the provisions of ASC 740, “Accounting for Uncertainty in Income Taxes”. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits during the years ended December 31, 2013 and 2012, nor were any interest or penalties accrued as of December 31, 2013. | |
Concentration | |
The Company sold all of its oil production to one customer in 2013 and 2012. Over 95% of the Company’s natural gas production was sold to a single customer in 2013 and 2012. | |
Revenue and Cost Recognition | |
The Company uses the sales method to account for sales of crude oil and natural gas. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. The volumes sold may differ from the volumes to which the Company is entitled based on the interest in the properties. These differences create imbalances which are recognized as a liability or as an asset only when the imbalance exceeds the estimate of remaining reserves. For the periods ended December 31, 2013 and 2012 there were no such differences. | |
Costs associated with production are expensed in the period incurred. | |
During the years ended December 31, 2013 and 2012, the Company recorded revenues of $16,657 and $21,162, respectively. For the year ended December 31, 2013, $16,273 of the revenues reflect the sale of natural gas from the Company’s Armstrong lease in California and the remainder came from the sale of crude oil and natural gas from the Company’s 1% working interest in non-operated leases in Ohio. These revenues were generated on relatively insignificant volumes produced during these years. The volumes were not at a sustainable level to support proved reserves. | |
Derivative Liabilities | |
The Company assessed the classification of its derivative financial instruments as of December 31, 2013, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. | |
ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. | |
Convertible Instruments | |
The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”. | |
Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of “Conventional Convertible Debt Instrument”. | |
The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. | |
ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability. | |
Recent Accounting Pronouncements | |
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position or its consolidated financial statements. | |
Reclassifications | |
Certain items in prior year financial statements have been reclassified to conform to the 2013 presentation. These reclassifications had no effect on the reported results. |
Going_Concern
Going Concern | 12 Months Ended |
Dec. 31, 2013 | |
Going Concern | ' |
Going Concern | ' |
NOTE 2 - GOING CONCERN | |
The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company currently utilizes production revenues and the proceeds from the private sales of common stock and convertible debt instruments to fund its operating expenses. The Company’s negative cash flows from operations, working capital deficit, and its projected cost of capital improvements of the oil and gas wells raise substantial doubt about its ability to continue as a going concern. The Company has not yet established an adequate ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations. | |
In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through increased sales of oil and gas and by sale of debt securities in both public and private transactions. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. | |||||||||||||||||
The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2013 and 2012. As required by ASC 820, a financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There were no transfers between fair value hierarchy levels for the years ended December 31, 2013 and 2012. | |||||||||||||||||
The carrying amounts reported in the balance sheets for cash, accounts receivable, loans payable, and accounts payable and accrued expenses, approximate their fair market value based on the short-term maturity of these instruments. The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2013 and 2012, on a recurring basis: | |||||||||||||||||
Assets and liabilities measured at fair | |||||||||||||||||
value on a recurring | Total | ||||||||||||||||
basis at December 31, 2013: | Carrying | ||||||||||||||||
Recurring: | Level 1 | Level 2 | Level 3 | Value | |||||||||||||
Assets | |||||||||||||||||
Marketable securities | $ | 23,835 | $ | - | $ | - | $ | 23,835 | |||||||||
Total | $ | 23,835 | $ | - | $ | - | $ | 23,835 | |||||||||
Liabilities | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | 32,528 | $ | 32,528 | |||||||||
Total | $ | - | $ | - | $ | 32,528 | $ | 32,528 | |||||||||
Assets and liabilities measured at fair | |||||||||||||||||
value on a recurring | Total | ||||||||||||||||
basis at December 31, 2012: | Carrying | ||||||||||||||||
Recurring: | Level 1 | Level 2 | Level 3 | Value | |||||||||||||
Assets | |||||||||||||||||
Marketable securities | $ | 124,740 | $ | - | $ | - | $ | 124,740 | |||||||||
Total | $ | 124,740 | $ | - | $ | - | $ | 124,740 | |||||||||
Liabilities | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | 74,240 | $ | 74,240 | |||||||||
Total | $ | - | $ | - | $ | 74,240 | $ | 74,240 | |||||||||
The carrying value of short term financial instruments including cash, accounts payable, accrued expenses and short-term borrowings approximate fair value due to the short period of maturity for these instruments. The long-term debentures payable approximates fair value since the related rates of interest approximate current market rates. | |||||||||||||||||
The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2013: | |||||||||||||||||
Derivative Liability | |||||||||||||||||
Balance, December 31, 2012 | $ | 74,240 | |||||||||||||||
Initial fair value of debt derivatives at note issuances | 120,840 | ||||||||||||||||
Extinguished derivative liability | (63,000 | ) | |||||||||||||||
Mark-to-market at December 31, 2013 -Embedded debt derivatives | (99,552 | ) | |||||||||||||||
Balance, December 31, 2013 | $ | 32,528 | |||||||||||||||
Net gain for the period included in earnings relating to the liabilities held at December 31, 2013 | $ | 99,552 |
Oil_And_Gas_Properties
Oil And Gas Properties | 12 Months Ended |
Dec. 31, 2013 | |
Extractive Industries [Abstract] | ' |
Oil And Gas Properties | ' |
NOTE 4 - OIL AND GAS PROPERTIES | |
The Company holds oil and gas leases in California, Ohio, and Texas. The oil and gas leases are classified as unproved properties due to the limited oil and gas production from the properties. The Company recorded impairment of its oil and gas properties in the amount of $-0- and $579,963 as of December 31, 2013 and 2012 respectively. | |
During the year ended December 31, 2012, the Company sold interests in its oil and gas properties for $75,000. The sales were recorded as a reduction in the basis in the properties and no gain or loss was recognized on the transactions. | |
During the year ended December 31, 2013, the Company issued 15,000 shares of its common stock valued at fair market value of $18,750 for the acquisition a 100% working interest in leases to certain oil and gas property. | |
In July 2013, the Company purchased an 85% working interest and 75% net revenue interest in certain oil and gas leases for a purchase price of $400,000. The Company issued a promissory note in the amount of $400,000 to finance the purchase (see Note 8). On March 11, 2014 the Company purchased the remaining 15% working interest in this property for a cash payment of $30,000. |
Note_Receivable
Note Receivable | 12 Months Ended |
Dec. 31, 2013 | |
Note Receivable | ' |
Note Receivable | ' |
NOTE 5 - NOTE RECEIVABLE | |
During the year ended December 31, 2012 the Company paid $20,000 to a third-party entity in the form of a note receivable. The note is unsecured, bears interest of 4% per annum, and was due in October 2012. The note is currently in default. The Company fully allowed for the note and recorded $20,000 of bad debt expense as of December 31, 2012. |
Convertible_Notes_Payable
Convertible Notes Payable | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Convertible Notes Payable | ' | ||||
NOTE 6 - CONVERTIBLE NOTES PAYABLE | |||||
Note issued on February 26, 2013: | |||||
On February 26, 2013 the Company borrowed $53,000 from an unrelated third party entity in the form of a convertible note. The note bears interest at a rate of 8.0 percent per annum, with principal and interest due on November 29, 2013. The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company’s common stock at 58 percent of the current market price. The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. The Company paid off the note completely during the year ended December 31, 2013. | |||||
Note issued on April 2, 2013: | |||||
On April 2, 2013 the Company borrowed $42,500 from an unrelated third party entity in the form of a convertible note. The note bears interest at a rate of 8.0 percent per annum, with principal and interest due on January 8, 2014. The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company’s common stock at 58 percent of the current market price. The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. The Company paid off the note completely during the year ended December 31, 2013. | |||||
Note issued on September 11, 2013: | |||||
On September 11, 2013 the Company borrowed $83,500 from an unrelated third party entity in the form of a convertible note. The note bears interest at a rate of 8% per annum with principal and interest due on June 4, 2014. The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company’s common stock at 58 percent of the current market price. The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. The note is not convertible at December 31, 2013. | |||||
Note issued on August 5, 2013: | |||||
On August 5, 2013 the Company borrowed $82,288 from an unrelated third party entity in the form of a convertible note. The Company issued 109,719 shares of common stock to the note holder for paid up interest. The note bears no other interest. The note matures 120 days from the date of issue. | |||||
The principal balance of the note is convertible at the option of the note holder, into the Company's common stock at the conversion price which is defined as the average of the trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. | |||||
Pursuant to this conversion feature, the Company identified embedded derivatives related to the convertible promissory note. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the convertible promissory note, the Company determined a fair value of $40,476 of the embedded derivative. The fair value of the embedded derivative was determined using the Black Scholes Model based on the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The initial fair value of the embedded debt derivative of $40,476 was allocated as a debt discount. During the year ended December 31, 2013 the Company had amortized $40,476 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013. The outstanding balance of the note as of December 31, 2013 and 2012 totaled $82,288 and $-0- respectively. | |||||
The fair value of the described embedded derivative of $10,707 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
At December 31, 2013, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $29,769 for the year ended December 31, 2013. | |||||
Note issued on August 6, 2013: | |||||
On August 6, 2013 the Company borrowed $12,498 from an unrelated third party entity in the form of a convertible note. The Company issued 16,664 shares of common stock to the note holder for paid up interest. The note bears no other interest. The note matures 120 days from the date of issue. | |||||
The principal balance of the note is convertible at the option of the note holder, into the Company's common stock at the conversion price which is fined as the average of the trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. | |||||
Pursuant to this conversion feature, the Company identified embedded derivatives related to the convertible promissory note. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the convertible promissory note, the Company determined a fair value of $5,989 of the embedded derivative. The fair value of the embedded derivative was determined using the Black Scholes Model based on the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The initial fair value of the embedded debt derivative of $5,989 was allocated as a debt discount. During the year ended December 31, 2013 the Company had amortized $5,989 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013. The outstanding balance of the note as of December 31, 2013 and 2012 totaled $12,498 and $-0- respectively. | |||||
The fair value of the described embedded derivative of $1,626 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
At December 31, 2013, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $4,363 for the year ended December 31, 2013. | |||||
Note issued on August 6, 2013: | |||||
On August 6, 2013 the Company borrowed $17,479 from an unrelated third party entity in the form of a convertible note. The Company issued 23,305 shares of common stock to the note holder for paid up interest. The note bears no other interest. The note matures 120 days from the date of issue. | |||||
The principal balance of the note is convertible at the option of the note holder, into the Company's common stock at the conversion price which is fined as the average of the trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. | |||||
Pursuant to this conversion feature, the Company identified embedded derivatives related to the convertible promissory note. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the convertible promissory note, the Company determined a fair value of $8,375 of the embedded derivative. The fair value of the embedded derivative was determined using the Black Scholes Model based on the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The initial fair value of the embedded debt derivative of $8,375 was allocated as a debt discount. During the year ended December 31, 2013 the Company had amortized $8,375 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013. The outstanding balance of the note as of December 31, 2013 and 2012 totaled $17,479 and $-0- respectively. | |||||
The fair value of the described embedded derivative of $2,274 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
At December 31, 2013, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $6,101 for the year ended December 31, 2013. | |||||
Note issued on August 6, 2013: | |||||
On August 6, 2013 the Company borrowed $39,250 from an unrelated third party entity in the form of a convertible note. The Company issued 52,333 shares of common stock to the note holder for paid up interest. The note bears no other interest. The note matures 120 days from the date of issue. | |||||
The principal balance of the note is convertible at the option of the note holder, into the Company's common stock at the conversion price which is fined as the average of the trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. | |||||
Pursuant to this conversion feature, the Company identified embedded derivatives related to the convertible promissory note. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the convertible promissory note, the Company determined a fair value of $18,808 of the embedded derivative. The fair value of the embedded derivative was determined using the Black Scholes Model based on the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The initial fair value of the embedded debt derivative of $18,808 was allocated as a debt discount. During the year ended December 31, 2013 the Company had amortized $18,808 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013. The outstanding balance of the note as of December 31, 2013 and 2012 totaled $39,250 and $-0- respectively. | |||||
The fair value of the described embedded derivative of $5,107 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
At December 31, 2013, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $13,701 for the year ended December 31, 2013. | |||||
Note issued on August 6, 2013: | |||||
On August 6, 2013 the Company borrowed $98,485 from an unrelated third party entity in the form of a convertible note. The Company issued 131,313 shares of common stock to the note holder for paid up interest. The note bears no other interest. The note matures 120 days from the date of issue. The unpaid principle balance of the note is convertible into shares of the Company common stock. | |||||
The principal balance of the note is convertible at the option of the note holder, into the Company's common stock at the conversion price which is defined as the average of the trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. | |||||
Pursuant to this conversion feature, the Company identified embedded derivatives related to the convertible promissory note. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the convertible promissory note, the Company determined a fair value of $47,192 of the embedded derivative. The fair value of the embedded derivative was determined using the Black Scholes Model based on the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The initial fair value of the embedded debt derivative of $47,192 was allocated as a debt discount. During the year ended December 31, 2013 the Company had amortized $47,192 of the debt discount to interest expense, leaving $-0- in unamortized debt discount at December 31, 2013. The outstanding balance of the note as of December 31, 2013 and 2012 totaled $98,485 and $-0- respectively. | |||||
The fair value of the described embedded derivative of $12,814 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
At December 31, 2013, the Company adjusted the recorded fair value of the derivative liability to market resulting in non-cash, non-operating gain of $34,378 for the year ended December 31, 2013. | |||||
Other Convertible Notes issued during the year: | |||||
During the year ended December 31, 2013 the Company borrowed $233,000 pursuant to a convertible debenture offering. The convertible notes accrue interest at 8% per annum, with principal and interest due two years from issuance. The notes carry a default interest rate of 12% per annum. The notes are convertible for two years from the issue date into shares of the Company’s common stock at a price of $1.00 per share. The Company analyzed the convertible debts for derivative accounting consideration under ASC 815 “Derivatives and Hedging” and determined that derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $48,300 and was recorded as debt discount. During the year ended December 31, 2013, debt discount of $17,464 was amortized. | |||||
Note issued on October 2, 2013: | |||||
On October 2, 2013 the Company borrowed $42,500 from an unrelated third party entity in the form of a convertible note. The note bears interest at a rate of 8.0 percent per annum, with principal and interest due on July 7, 2014. The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company’s common stock at 58 percent of the current market price. The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. The note is not convertible at December 31, 2013. | |||||
Note issued on November 20, 2013: | |||||
On November 20, 2013 the Company borrowed $42,500 from an unrelated third party entity in the form of a convertible note. The note bears interest at a rate of 8.0 percent per annum, with principal and interest due on August 27, 2014. The principal balance of the note along with accrued interest is convertible after 180 days, at the option of the note holder, into the Company’s common stock at 58 percent of the current market price. The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date. The note is not convertible at December 31, 2013. |
Warrants_and_Warrant_Derivativ
Warrants and Warrant Derivative Liability | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Warrants And Warrant Derivative Liability | ' | ||||||||||||||||||||
Warrants and Warrant Derivative Liability | ' | ||||||||||||||||||||
NOTE 7 - WARRANTS AND WARRANT DERIVATIVE LIABILITY | |||||||||||||||||||||
On December 31, 2012 the Company issued 30,000 units at $1.00 per unit resulting in total cash proceeds of $30,000. Each unit sold consists of one share of the Company’s common stock, one Class A Redeemable Warrant, and one Class B Redeemable Warrant. | |||||||||||||||||||||
The Class A warrants are exercisable into one share of the Company’s common stock at $5.00 per share, expire on December 31, 2015, and are callable by the Company any time after December 31, 2014 upon 30 days written notice by the Company. If the holders do not exercise the warrants within 30 days of receiving notice from the Company, the warrants terminate 30 days from the date of notice. | |||||||||||||||||||||
The Class B warrants are exercisable into one share of the Company’s common stock at $9.375 per share, expire on December 31, 2017, and are callable by the Company any time after December 31, 2015 upon 30 days written notice by the Company. If the holders do not exercise the warrants within 30 days of receiving notice from the Company, the warrants terminate 30 days from the date of notice. | |||||||||||||||||||||
For both the Class A and Class B warrants, the exercise price and/or the number of shares of common stock to be issued upon exercise is subject to adjustment in certain cases. Such adjustments would be triggered in instances where the Company does any of the following: a) pays a stock dividend, splits or reverse-splits its common stock; b) issues common stock, convertible securities, or debentures to obtain shares at a price less than the warrant exercise price; or c) distributes to shareholders evidences of its indebtedness or securities or assets. | |||||||||||||||||||||
On September 10, 2013 the Company and the warrant holders agreed to amend the class A and class B warrant agreements whereby the warrant holders waived any rights to exercise any warrants that had not been exercised as of the amendment date. | |||||||||||||||||||||
The Company has analyzed this price adjustment provision under ASC 815 “Derivative and Hedging” and determined that these instruments should be classified as liabilities and recorded at fair value do to there being no explicit limit to the number of shares to be delivered upon settlement of the warrants. The Company has estimated the fair value of the derivative using the Black-Scholes option-pricing model at September 10, 2013. Assumptions included (1) 0.50-1.02% risk-free interest rate, (2) expected term is the remaining term of the warrant, (3) expected volatility of 182.76-185.77%, (4) zero expected dividends, (5) exercise prices as set within the agreements, (6) common stock price of the underlying share on the valuation date, and (7) number of shares to be issued if the instrument is converted. At the date of the warrant agreements were amended (September 10, 2013) the embedded derivative liability was valued at $63,000 and a gain of $11,240 was recorded for the year ended December 31, 2013. The Company determined that after the amendment to the warrant agreements no derivative liability existed and the Company wrote off derivative liability in the amount of $63,000 to additional paid in capital. | |||||||||||||||||||||
Changes in stock purchase warrants during the periods ended December 31, 2013 and 2012 are as follows: | |||||||||||||||||||||
Weighted | Aggregate | Weighted | |||||||||||||||||||
Average | Average | ||||||||||||||||||||
Number of | Exercise | Intrinsic | Remaining | ||||||||||||||||||
Warrants | Price | Value | Exercisable | Life | |||||||||||||||||
Outstanding, December 31, 2011 | - | $ | - | $ | - | - | $ | - | |||||||||||||
Exercisable, December 31, 2011 | - | - | - | ||||||||||||||||||
Issued | 60,000 | 4 | 60,000 | 5 years | |||||||||||||||||
Exercised | - | - | - | ||||||||||||||||||
Cancelled | - | - | - | ||||||||||||||||||
Outstanding, December 31, 2012 | 60,000 | 4 | - | 60,000 | 5 years | ||||||||||||||||
Exercisable, December 31, 2012 | 60,000 | 4 | - | 60,000 | 5 years | ||||||||||||||||
Issued | - | - | - | - | - | ||||||||||||||||
Exercised | - | - | - | - | - | ||||||||||||||||
Cancelled | (60,000 | ) | (4.00 | ) | - | (60,000 | ) | - | |||||||||||||
Outstanding, December 31, 2013 | - | $ | - | $ | - | - | - | ||||||||||||||
Exercisable, December 31, 2013 | - | $ | - | $ | - | - | N/A |
Notes_Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2013 | |
Notes Payable [Abstract] | ' |
Notes Payable | ' |
NOTE 8 - NOTES PAYABLE | |
In July 2013, the Company purchased an 85% working interest and 75% net revenue interest in certain oil and gas leases covering 618 acres of land located in Shackelford County, Texas (the “Dawson-Conway Leases”) for a purchase price of $400,000. The Company issued a promissory note in the amount of $400,000 to finance the purchase. The promissory note accrues interest at 6% per annum, is due two years from issuance and is secured by the Dawson-Conway Leases. |
Common_Stock
Common Stock | 12 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
Common Stock | ' |
NOTE 9 - COMMON STOCK | |
At December 31, 2013, the Company had 100,000,000 shares of common stock authorized and 35,944,750 shares of common stock issued and outstanding. | |
On September 23, 2012 the Company issued 3,450,000 shares of common stock in connection with the reverse merger with Koko, Ltd. (see Note 1). | |
In October 2012 the Company approved a one for two and a half reverse stock split of the Company’s outstanding common stock. The reverse stock split became effective on November 5, 2012 and as a result of the reverse stock split, the issued and outstanding shares of the Company’s common stock decreased to 34,500,000 shares, without any change in the par value of such shares. These consolidated financial statements and accompanying notes to the financial statements give retroactive effect to the reverse stock split for all periods presented. | |
During the year ended December 31, 2012, the Company issued 30,000 units at $1.00 per unit resulting in total cash proceeds of $30,000. Each unit sold consists of one share of the Company’s common stock, one Class A Redeemable Warrant, and one Class B Redeemable Warrant (see Note 11). | |
During the year ended December 31, 2012, the Company issued 15,000 shares of stock for settlement of accounts payable. The shares were valued at $1.01 per share for a total fair value of $15,150. The company recognized a loss on settlement of accounts payable in the amount of $7,650. | |
During the year ended December 31, 2013 the Company issued 15,000 shares of common stock valued at fair market value of $18,750 for the acquisition of oil and gas property. | |
During the year ended December 31, 2013, the Company issued 25,862 shares of common stock valued at fair market value of $34,655 to a potential investor as due diligence fees. The fair value of these shares was charged to operations during the year ended December 31, 2013. | |
During the year ended December 31, 2013, the Company issued 457,407 shares of common stock for cash proceeds of $327,800. | |
During the year ended December 31, 2013, the Company issued 333,334 shares of common stock for interest on convertible notes payable. The shares were valued at fair market value of $302,153. | |
During the year ended December 31, 2013, $402,000 of wages payable to contractors for accrued services was forgiven and recorded to additional paid in capital as contributed capital. | |
During the year ended December 31, 2013, the Company issued 568,147 shares of common stock for services. The shares were valued at fair market value of $578,375. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
NOTE 10 - RELATED PARTY TRANSACTIONS | |
Various general and administrative expenses of the Company as well as loans for operating purposes have been paid for or made by related parties of the Company. During the year ended December 31, 2013, the Company received cash of $60,600 and repaid $257,913 on these related party advances, and had $50,289 in operating expenses paid by the related party on behalf of the Company. Related party payables totaled $4,599 and $122,845 at December 31, 2013 and 2012, respectively. These amounts payable bear no interest, are uncollateralized and due on demand. | |
On January 23, 2013 the Company entered into an agreement in which a related party transferred a $20,000 bond to the Company. |
Asset_Retirement_Obligation
Asset Retirement Obligation | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Asset Retirement Obligation Disclosure [Abstract] | ' | ||||||||
Asset Retirement Obligation | ' | ||||||||
NOTE 11 - ASSET RETIREMENT OBLIGATION | |||||||||
The following table sets forth the principal sources of change of the asset retirement obligation for the years ended December 31, 2013 and 2012: | |||||||||
2013 | 2012 | ||||||||
Asset retirement obligations, beginning of period | $ | 7,760 | $ | 3,986 | |||||
Revisions in estimated liabilities | - | 3,601 | |||||||
Asset retirement obligations assumed | - | - | |||||||
Accretion expense | 879 | 173 | |||||||
$ | 8,639 | $ | 7,760 | ||||||
Asset retirement obligations, end of period | |||||||||
As of December 31, 2013 the Company does not maintain an escrow agreement or performance bond to assure the administration of the plugging and abandonment obligations assumed. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
NOTE 12 - INCOME TAXES | |||||||||
The Company’s provision for income taxes was $-0- for the years ended December 31, 2013 and 2012, respectively, since the Company has accumulated taxable losses from operations. ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a full valuation allowance equal to the deferred tax asset has been recorded. | |||||||||
The total deferred tax asset is calculated by multiplying a 39 percent marginal tax rate by the cumulative Net Operating Loss (“NOL”). At December 31, 2013, the Company has available $2,256,439 of NOL’s which expire in various years beginning in 2031 and carrying forward through 2033. The tax effects of significant items comprising the Company's net deferred taxes as of December 31, 2013 and 2012 were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Cumulative NOL | $ | 2,256,439 | $ | 844,956 | |||||
Deferred Tax Assets: | |||||||||
Net operating loss carry forwards | 880,011 | 329,533 | |||||||
Valuation allowance | (880,011 | ) | (329,533 | ) | |||||
$ | - | $ | - | ||||||
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39 percent to net loss before provision for income taxes for the following reasons: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Income tax benefit at U. S. federal statutory rates: | $ | (880,011 | ) | $ | (329,533 | ) | |||
Change in valuation allowance | 880,011 | 329,533 | |||||||
$ | - | $ | - | ||||||
The Company files federal and Ohio income tax returns subject to statutes of limitations. The years ended December 31, 2013, 2012, 2011, and 2010 are subject to examination by federal and state tax authorities. | |||||||||
The provisions of ASC 740 require companies to recognize in their financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. | |||||||||
Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC 740 did not have a material effect on the Company’s financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
NOTE 13 - COMMITMENTS AND CONTINGENCIES | |
Litigation | |
Cardinal Energy Group v. Charles A. Koenig Franklin County Common Pleas Case No. 13 CV 11 12847 Franklin County, Ohio | |
On November 25, 2013 the Company filed a complaint in Franklin County, Ohio Common Pleas Court (Case No. 13-CV-11-12847) seeking the return of 100,000 shares of our unregistered common stock issued to Charles A. Koenig as a retainer for legal services. However, Mr. Koenig never performed any legal services for the Company. On December 30, 2013, Mr. Koenig moved to dismiss our complaint which had been amended prior to the hearing. On February 26, 2014, Mr. Koenig’s motion to dismiss the complaint was denied. Mr. Koenig had until March 10, 2014 to respond and he has failed to respond to our amended complaint. In the interim the Company submitted a settlement proposal to Mr. Koenig but the Company has yet to receive a response to its proposal. | |
The Company may be party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. There is no litigation or contingencies that require accrual or disclosure as of December 31, 2013 and 2012. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
NOTE 14 - SUBSEQUENT EVENTS | |
Issuances of common stock | |
Subsequent to December 31, 2013 the Company issued 668,529 shares of common stock for services valued at fair market value of $289,021. | |
Subsequent to December 31, 2013 a Caro Capital, LLC returned 150,000 shares of common stock to the Company in settlement of a dispute with the Company. | |
Subsequent to December 31, 2013 the Company issued 746,500 shares of common stock for cash proceeds of $212,275. | |
Issuance of Senior Secured Convertible Note | |
On March 4, 2014 pursuant to a senior secured notes offering the Company borrowed $825,000. The senior secured convertible notes accrue interest at 12% per annum until they mature on December 31, 2015 or are converted. Proceeds from the offering were used primarily to acquire selected oil and gas properties in Texas. | |
Material Acquisitions/Termination | |
On February 3, 2014 the Company terminated the binding term sheets (“Lease Acquisition Term Sheets”) for the acquisition of a 100% working interest in various oil and gas leases in Pawnee County, Kansas. The Company had previously disclosed the Lease Acquisition Term Sheets in a Form 8-K filed on January 29, 2014. | |
On February 11, 2014 the Company terminated the November 8, 2013 binding letter of intent (the “LOI”) entered into with Mojave Gold Corporation, an unaffiliated third party. Under the terms of the LOI the Company had agreed to provide Mojave with $1,750,000 in funding with an option to increase such amount to $5,000,000. | |
On March 5, 2014, the Company completed the acquisition of a 100% working interest and 80% net revenue interest in the Powers-Sanders oil and gas leases located in Shackelford County, Texas (“Powers-Sanders Leases”). The Company purchased the Powers-Sanders Leases from Sabor X Energy Services for $600,000 paid in cash at closing using a substantial portion of the funds raised in a private offering of Senior Secured Convertible Promissory Notes and Warrants. The entering into the underlying asset purchase and sale agreement had been previously disclosed in a Form 8-K filed on February 18, 2014. | |
On March 6, 2014, the Company completed the acquisition of a 100% working interest and an 80% net revenue interest in the Stroybel-Broyles oil and gas leases located in Eastland County, Texas (the “Stroybel-Broyles”). The Company purchased the Stroybel-Broyles Leases from HD Special Situations, LP, a Delaware limited partnership, an unrelated third party (“HD”) $75,000 paid in cash at closing using a portion of the funds raised in a private offering of Senior Secured Convertible Promissory Notes and Warrants. The entering into the underlying asset purchase and sale agreement was previously disclosed in a Form 8-K filed on February 18, 2014. | |
Consulting/Employment Agreement | |
The Company has entered into an employment agreement with David Rippy, dated January 1, 2014, to serve as Chief Operating Officer, the term of which runs through December 31, 2015. Pursuant to the terms of the Agreement, Mr. Rippy is currently entitled to receive an annual salary of $150,000 for calendar year 2014, and an annual salary of $175,000 for calendar year 2015. Mr. Rippy shall also be entitled to receive all benefits provided by the Company to senior executives, as well as the right to participate in any bonus program, or Executive Stock Award Plan, which the Company may adopt. | |
On January 7, 2014 the Company entered into a Consulting Agreement with John R. Jordan to serve as Chief Financial Officer effective January 1, 2014. The term of this agreement runs through January 1, 2015 and may be extended by mutual consent of both parties. Mr. Jordan is entitled to receive a monthly retainer of $3,000 which may be adjusted quarterly by mutual consent of the parties. In addition, Mr. Jordan received 50,000 restricted shares of the Company’s common stock upon the Effective Date of the agreement, plus 50,000 restricted shares of the Company’s common stock at the end of each calendar quarter. |
Nature_of_Operations_and_Summa1
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
Nature of Operations and Organization | ' |
Nature of Operations and Organization | |
Cardinal Energy Group, Inc. (the “Company”) was incorporated in the State of Nevada on June 19, 2007 under the name Koko, Ltd., for the purpose of developing, manufacturing and selling a steak timer. On September 28, 2012, the Company changed the focus of its business when it acquired all of the ownership interests of Cardinal Energy Group, LLC, an Ohio limited liability company which was engaged in the business of acquiring, exploring, developing and operating oil and gas leases. The Company changed its name from Koko, Ltd. to Cardinal Energy Group, Inc. on October 10, 2012 in connection with this acquisition. | |
The Company has been engaged in the exploration, development, exploitation and production of oil and natural gas. The Company sells its oil and gas products to domestic purchasers of oil and gas production. Its operations are presently focused in the states of California, Ohio and Texas. The recoverability of the capitalized exploration and development costs for these properties is dependent upon the existence of economically recoverable reserves, the Company’s ability to obtain the necessary financing to complete exploration and development, and future profitable production or proceeds from disposition of such property. | |
Basis of Presentation and Use of Estimates | ' |
Basis of Presentation and Use of Estimates | |
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of revenues and expenses for the reported year. Actual results may differ from those estimates. | |
Revenues and direct operating expenses of the California properties represent shareholders’ interest in the properties acquired for the periods prior to the closing date and are presented on the accrual basis of accounting and in accordance with generally accepted accounting principles. The consolidated financial statements are not indicative of the results of operations of the acquired properties going forward due to changes in the business and inclusion of the above mentioned expenses. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
Our consolidated financial statements include the accounts of subsidiaries in which a controlling interest is held. All intercompany transactions have been eliminated. Undivided interests in oil and gas exploration and production joint ventures are consolidated on a proportionate basis. Investments in entities without a controlling interest are accounted for by the equity method or cost basis. The equity method is used to account for investments in non-controlled entities when Cardinal has the ability to exercise significant influence over operating and financial policies. In applying the equity method of accounting, the investments are initially recognized at cost, and subsequently adjusted for the Company’s proportionate share of earnings, losses and distributions. The cost method is used when we do not have the ability to exert significant influence. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
Cash and cash equivalents are all highly liquid investments with an original maturity of three months or less at the time of purchase and are recorded at cost, which approximates fair value. | |
Allowance for Doubtful Accounts | ' |
Allowance for Doubtful Accounts | |
Uncollectible accounts receivable are charged directly against earnings when they are determined to be uncollectible. Use of this method does not result in a material difference from the valuation method required by generally accepted accounting principles. At December 31, 2013 and 2012, no reserve for allowance for doubtful accounts was needed. | |
Ceiling Test | ' |
Ceiling Test | |
In applying the full cost method, the Company performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas property and equipment is limited to the “estimated present value” of the future net revenues from its proved reserves, discounted at a 10-percent interest rate and based on current economic and operating conditions, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to any book and tax basis differences of the properties. Impairments were $-0- and $579,963 for the years ended December 31, 2013 and 2012 respectively. | |
Oil and Gas Properties | ' |
Oil and Gas Properties | |
The Company follows the full cost method of accounting for its oil and natural gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities plus 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 income. | |
Depletion and depreciation of proved oil and gas properties is calculated on the units-of-production method based upon estimates of proved reserves. Such calculations include the estimated future costs to develop proved reserves. Oil and gas reserves are converted to a common unit of measure based on the energy content of 6,000 cubic feet of gas to one barrel of oil. Costs of unevaluated properties are not included in the costs subject to depletion. These costs are assessed periodically for impairment. | |
For the year ended December 31, 2012, management decided to forego additional development on certain leases. As a result, $579,963 of cost associated with these leases was transferred into the evaluated property pool and impaired, as there were no proven reserves. As of December 31, 2013 and 2012 there were no proved reserves. | |
Property and Equipment | ' |
Property and Equipment | |
Support equipment and other property and equipment are valued at cost and depreciated over their estimated useful lives, using the straight-line method over estimated useful lives of 3 to 5 years. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in income or loss from operations. | |
Valuation of Long-Lived Assets | ' |
Valuation of Long-Lived Assets | |
The Company follows ASC 360 regarding the valuations and carrying values of its long-lived assets. Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their estimated fair values. | |
Stock-based Compensation | ' |
Stock-based Compensation | |
The Company follows the provisions of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock-based compensation. | |
Equity instruments issued to non-employees for goods or services are accounted at fair value when the service is complete or a performance commitment date is reached, whichever is earlier. | |
Earnings (Loss) per Share | ' |
Earnings (Loss) per Share | |
Basic earnings (loss) per share (EPS) is calculated by dividing the Company’s net earnings (loss) applicable to common stockholders by the weighted average number of common shares during the period. Diluted EPS assumes the exercise of stock option and warrants and the conversion of convertible debt, provided the effect is not antidilutive. The effect of computing diluted loss per share is anti-dilutive and, as such, basic and diluted loss per share is the same for the years ended December 31, 2013 and 2012. | |
Asset Retirement Obligation | ' |
Asset Retirement Obligation | |
The Company follows FASB ASC 410, Asset Retirement and Environmental Obligations which requires entities to record the fair value of a liability for asset retirement obligations (“ARO”) and record a corresponding increase in the carrying amount of the related long-lived asset. The asset retirement obligation primarily relates to the abandonment of oil and gas properties. The present value of the estimated asset retirement cost is capitalized as part of the carrying amount of oil and gas properties and is depleted over the useful life of the asset. The settlement date fair value is discounted at our credit adjusted risk-free rate in determining the abandonment liability. The abandonment liability is accreted with the passage of time to its expected settlement fair value. Revisions to such estimates are recorded as adjustments to ARO. At the time the abandonment cost is incurred, the Company is required to recognize a gain or loss if the actual costs do not equal the estimated costs included in ARO. The ARO is based upon numerous estimates and assumptions, including future abandonment costs, future recoverable quantities of oil and gas, future inflation rates, and the credit-adjusted risk-free interest rate. The ARO is $8,639 and $7,760 as of December 31, 2013 and 2012, respectively. The Company accreted $879 and $173 to ARO during the years ended December 31, 2013 and 2012, respectively. | |
Available-for-Sale Securities | ' |
Available-for-Sale Securities | |
The Company’s available-for-sale securities consist of investments in marketable securities. The Company carries its investment at fair value based upon quoted market prices. Unrealized holding gains (losses) on available-for-sale securities are excluded from earnings and reported as accumulated other comprehensive gain (loss), a separate component of stockholders’ equity (deficit), until realized. The Company recorded unrealized (losses) gains of ($100,905) and $120,120 during the years ended December 31, 2013 and 2012, respectively. Accumulated Other Comprehensive Losses were $2,193,765 and $2,092,860 as of December 31, 2013 and 2012, respectively. | |
Income Taxes | ' |
Income Taxes | |
The Company accounts for income taxes in accordance with accounting guidance now codified as ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. | |
A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized. | |
The Company applies the provisions of ASC 740, “Accounting for Uncertainty in Income Taxes”. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits during the years ended December 31, 2013 and 2012, nor were any interest or penalties accrued as of December 31, 2013. | |
Concentration | ' |
Concentration | |
The Company sold all of its oil production to one customer in 2013 and 2012. Over 95% of the Company’s natural gas production was sold to a single customer in 2013 and 2012. | |
Revenue and Cost Recognition | ' |
Revenue and Cost Recognition | |
The Company uses the sales method to account for sales of crude oil and natural gas. Under this method, revenues are recognized based on actual volumes of oil and gas sold to purchasers. The volumes sold may differ from the volumes to which the Company is entitled based on the interest in the properties. These differences create imbalances which are recognized as a liability or as an asset only when the imbalance exceeds the estimate of remaining reserves. For the periods ended December 31, 2013 and 2012 there were no such differences. | |
Costs associated with production are expensed in the period incurred. | |
During the years ended December 31, 2013 and 2012, the Company recorded revenues of $16,657 and $21,162, respectively. For the year ended December 31, 2013, $16,273 of the revenues reflect the sale of natural gas from the Company’s Armstrong lease in California and the remainder came from the sale of crude oil and natural gas from the Company’s 1% working interest in non-operated leases in Ohio. These revenues were generated on relatively insignificant volumes produced during these years. The volumes were not at a sustainable level to support proved reserves. | |
Derivative Liabilities | ' |
Derivative Liabilities | |
The Company assessed the classification of its derivative financial instruments as of December 31, 2013, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. | |
ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. | |
Convertible Instruments | ' |
Convertible Instruments | |
The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”. | |
Professional standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of “Conventional Convertible Debt Instrument”. | |
The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. | |
ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability. | |
New Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position or its consolidated financial statements. | |
Reclassifications | ' |
Reclassifications | |
Certain items in prior year financial statements have been reclassified to conform to the 2013 presentation. These reclassifications had no effect on the reported results. |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | ' | ||||||||||||||||
Assets and liabilities measured at fair | |||||||||||||||||
value on a recurring | Total | ||||||||||||||||
basis at December 31, 2013: | Carrying | ||||||||||||||||
Recurring: | Level 1 | Level 2 | Level 3 | Value | |||||||||||||
Assets | |||||||||||||||||
Marketable securities | $ | 23,835 | $ | - | $ | - | $ | 23,835 | |||||||||
Total | $ | 23,835 | $ | - | $ | - | $ | 23,835 | |||||||||
Liabilities | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | 32,528 | $ | 32,528 | |||||||||
Total | $ | - | $ | - | $ | 32,528 | $ | 32,528 | |||||||||
Assets and liabilities measured at fair | |||||||||||||||||
value on a recurring | Total | ||||||||||||||||
basis at December 31, 2012: | Carrying | ||||||||||||||||
Recurring: | Level 1 | Level 2 | Level 3 | Value | |||||||||||||
Assets | |||||||||||||||||
Marketable securities | $ | 124,740 | $ | - | $ | - | $ | 124,740 | |||||||||
Total | $ | 124,740 | $ | - | $ | - | $ | 124,740 | |||||||||
Liabilities | |||||||||||||||||
Derivative liability | $ | - | $ | - | $ | 74,240 | $ | 74,240 | |||||||||
Total | $ | - | $ | - | $ | 74,240 | $ | 74,240 | |||||||||
Schedule of Changes in Fair Value of the Financial Liabilities | ' | ||||||||||||||||
The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2013: | |||||||||||||||||
Derivative Liability | |||||||||||||||||
Balance, December 31, 2012 | $ | 74,240 | |||||||||||||||
Initial fair value of debt derivatives at note issuances | 120,840 | ||||||||||||||||
Extinguished derivative liability | (63,000 | ) | |||||||||||||||
Mark-to-market at December 31, 2013 -Embedded debt derivatives | (99,552 | ) | |||||||||||||||
Balance, December 31, 2013 | $ | 32,528 | |||||||||||||||
Net gain for the period included in earnings relating to the liabilities held at December 31, 2013 | $ | 99,552 |
Convertible_Notes_Payable_Tabl
Convertible Notes Payable (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Fair Value of assumptions derivative | ' | ||||
The fair value of the embedded derivative was determined using the Black Scholes Model based on the following assumptions: | |||||
Note issued on August 5, 2013: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The fair value of the described embedded derivative of $10,707 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
Note issued on August 6, 2013: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The fair value of the described embedded derivative of $1,626 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
Note issued on August 6, 2013: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The fair value of the described embedded derivative of $2,274 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
Note issued on August 6, 2013: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The fair value of the described embedded derivative of $5,107 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % | |||
Note issued on August 6, 2013: | |||||
Dividend yield: | -0- | % | |||
Volatility | 258.01 | % | |||
Risk free rate: | 0.05 | % | |||
The fair value of the described embedded derivative of $12,814 at December 31, 2013 was determined using the Black Scholes Model with the following assumptions: | |||||
Dividend yield: | -0- | % | |||
Volatility | 156.77 | % | |||
Risk free rate: | 0.01 | % |
Warrants_and_Warrant_Derivativ1
Warrants and Warrant Derivative Liability (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Warrants And Warrant Derivative Liability | ' | ||||||||||||||||||||
Schedule of Changes in Stock Purchase Warrants | ' | ||||||||||||||||||||
Changes in stock purchase warrants during the periods ended December 31, 2013 and 2012 are as follows: | |||||||||||||||||||||
Weighted | Aggregate | Weighted | |||||||||||||||||||
Average | Average | ||||||||||||||||||||
Number of | Exercise | Intrinsic | Remaining | ||||||||||||||||||
Warrants | Price | Value | Exercisable | Life | |||||||||||||||||
Outstanding, December 31, 2011 | - | $ | - | $ | - | - | $ | - | |||||||||||||
Exercisable, December 31, 2011 | - | - | - | ||||||||||||||||||
Issued | 60,000 | 4 | 60,000 | 5 years | |||||||||||||||||
Exercised | - | - | - | ||||||||||||||||||
Cancelled | - | - | - | ||||||||||||||||||
Outstanding, December 31, 2012 | 60,000 | 4 | - | 60,000 | 5 years | ||||||||||||||||
Exercisable, December 31, 2012 | 60,000 | 4 | - | 60,000 | 5 years | ||||||||||||||||
Issued | - | - | - | - | - | ||||||||||||||||
Exercised | - | - | - | - | - | ||||||||||||||||
Cancelled | (60,000 | ) | (4.00 | ) | - | (60,000 | ) | - | |||||||||||||
Outstanding, December 31, 2013 | - | $ | - | $ | - | - | - | ||||||||||||||
Exercisable, December 31, 2013 | - | $ | - | $ | - | - | N/A |
Asset_Retirement_Obligation_Ta
Asset Retirement Obligation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Asset Retirement Obligation Disclosure [Abstract] | ' | ||||||||
Schedule of Change of the Asset Retirement Obligation | ' | ||||||||
2013 | 2012 | ||||||||
Asset retirement obligations, beginning of period | $ | 7,760 | $ | 3,986 | |||||
Revisions in estimated liabilities | - | 3,601 | |||||||
Asset retirement obligations assumed | - | - | |||||||
Accretion expense | 879 | 173 | |||||||
$ | 8,639 | $ | 7,760 | ||||||
Asset retirement obligations, end of period | |||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Components of Net Deferred Taxes | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Cumulative NOL | $ | 2,256,439 | $ | 844,956 | |||||
Deferred Tax Assets: | |||||||||
Net operating loss carry forwards | 880,011 | 329,533 | |||||||
Valuation allowance | (880,011 | ) | (329,533 | ) | |||||
$ | - | $ | - | ||||||
Schedule of Components of Provision for Income Taxes | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Income tax benefit at U. S. federal statutory rates: | $ | (880,011 | ) | $ | (329,533 | ) | |||
Change in valuation allowance | 880,011 | 329,533 | |||||||
$ | - | $ | - |
Nature_of_Operations_and_Summa2
Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Mcf | ||||
Impairment | ' | ' | $579,963 | ' |
Disclosure of oil and gas reserves conversion to common units | ' | ' | ' | ' |
Oil and gas reserves are converted to a common unit of measure based on the energy content of 6,000 cubic feet of gas to one barrel of oil. | ||||
Oil and gas reserves conversion to common unit's basis of barrel of oil. | ' | 6,000 | ' | ' |
Impairment of oil and gas properties | ' | ' | 579,963 | ' |
Asset retirement obligation | ' | 8,639 | 7,760 | 3,986 |
Asset retirement obligation, accretion expense | ' | 879 | 173 | ' |
Unrealized gains (losses) on available-for-sale securities | ' | -100,905 | 120,120 | ' |
Accumulated other comprehensive losses | ' | 2,193,765 | 2,092,860 | ' |
Concentration risk oil production | ' | 95.00% | 95.00% | ' |
Purchase of working interest | 85.00% | 1.00% | ' | ' |
Oil and gas revenues | ' | $16,657 | $21,162 | ' |
Minimum [Member] | ' | ' | ' | ' |
Property and equipment useful live | ' | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' | ' |
Property and equipment useful live | ' | '5 years | ' | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Assets, Marketable securities | $23,835 | $124,740 |
Assets, Total | 23,835 | 124,740 |
Liability, Derivative liability | 32,528 | 74,240 |
Liability, Total | 32,528 | 74,240 |
Level 1 [Member] | ' | ' |
Assets, Marketable securities | 23,835 | 124,740 |
Assets, Total | 23,835 | 124,740 |
Liability, Derivative liability | ' | ' |
Liability, Total | ' | ' |
Level 2 [Member] | ' | ' |
Assets, Marketable securities | ' | ' |
Assets, Total | ' | ' |
Liability, Derivative liability | ' | ' |
Liability, Total | ' | ' |
Level 3 [Member] | ' | ' |
Assets, Marketable securities | ' | ' |
Assets, Total | ' | ' |
Liability, Derivative liability | 32,528 | 74,240 |
Liability, Total | $32,528 | $74,240 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Schedule of Changes in Fair Value of the Financial Liabilities (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value Disclosures [Abstract] | ' | ' |
Balance at the beginning | $74,240 | ' |
Initial fair value of debt derivatives at note issuances | 120,840 | ' |
Extinguished derivative liability | 63,000 | ' |
Mark-to-market at December 31, 2013 -Embedded debt derivatives | -99,552 | ' |
Balance at the end | 32,528 | 74,240 |
Net gain for the period included in earnings relating to the liabilities held at December 31, 2013 | $99,552 | ' |
Oil_And_Gas_Properties_Details
Oil And Gas Properties (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Impairment of oil and gas properties | ' | ' | $579,963 |
Number of shares issued for acquisition | ' | 15,000 | ' |
Stock issued during period for oil and gas properties | ' | 18,750 | ' |
Purchase of working interest | 85.00% | 1.00% | ' |
Net revenue interest | 75.00% | ' | ' |
Oil and gas property, purchase price | 400,000 | ' | ' |
Oil and Gas Properties [Member] | ' | ' | ' |
Impairment of oil and gas properties | ' | ' | 579,963 |
Gain (loss) on sale of oil and gas property | ' | ' | 75,000 |
Number of shares issued for acquisition | ' | 15,000 | ' |
Stock issued during period for oil and gas properties | ' | 18,750 | ' |
Purchase of working interest | 85.00% | 100.00% | ' |
Net revenue interest | 75.00% | ' | ' |
Oil and gas property, purchase price | 400,000 | ' | ' |
Issued promissory note for oil and gas leases | 400,000 | ' | ' |
Oil and Gas Properties One [Member] | ' | ' | ' |
Purchase of working interest | ' | 15.00% | ' |
Oil and gas property, purchase price | ' | $30,000 | ' |
Note_Receivable_Details_Narrat
Note Receivable (Details Narrative) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 11, 2013 | Apr. 02, 2013 | Feb. 26, 2013 | |
Note Receivable | ' | ' | ' | ' | ' |
Payments for notes receivables to related party entity | ' | $20,000 | ' | ' | ' |
Debt instrument, interest rate | ' | 4.00% | 8.00% | 8.00% | 8.00% |
Debt interest payment, due date | ' | 31-Oct-12 | ' | ' | ' |
Bad debt expense | ' | $20,000 | ' | ' | ' |
Convertible_Notes_Payable_Deta
Convertible Notes Payable (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||
Nov. 20, 2013 | Oct. 02, 2013 | Sep. 11, 2013 | Apr. 02, 2013 | Feb. 26, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Aug. 05, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 06, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Debt Debentures [Member] | Convertible Debt [Member] | Convertible Debt [Member] | Convertible Debt [Member] | Convertible Debt 1 [Member] | Convertible Debt 1 [Member] | Convertible Debt 1 [Member] | Convertible Debt 2 [Member] | Convertible Debt 2 [Member] | Convertible Debt 2 [Member] | Convertible Debt 3 [Member] | Convertible Debt 3 [Member] | Convertible Debt 3 [Member] | Convertible Debt 4 [Member] | Convertible Debt 4 [Member] | Convertible Debt 4 [Member] | |||||||||
Convertible note | $42,500 | $42,500 | $83,500 | $42,500 | $53,000 | ' | ' | ' | $233,000 | $82,288 | ' | ' | $12,498 | ' | ' | $17,479 | ' | ' | $39,249 | ' | ' | $98,485 | ' | ' |
Convertible notes, bearing interest rate | ' | ' | 8.00% | 8.00% | 8.00% | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible note, maturity date | 27-Aug-14 | 7-Jul-14 | 4-Jun-14 | 8-Jan-14 | 29-Nov-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of convertible notes value converting to common stock after 180 days | 58.00% | 58.00% | 58.00% | 58.00% | 58.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued for paid up interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | 109,719 | ' | ' | 16,664 | ' | ' | 23,305 | ' | ' | 52,333 | ' | ' | 131,313 | ' | ' |
Convertible debt discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,476 | ' | ' | 5,989 | ' | ' | 8,375 | ' | ' | 18,808 | ' | ' | 47,192 | ' |
Amortization of debt discount | ' | ' | ' | ' | ' | ' | 143,511 | ' | 17,464 | ' | 40,476 | ' | ' | 5,989 | ' | ' | 8,375 | ' | ' | 18,808 | ' | ' | 47,192 | ' |
Unamortization of debt discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | 0 | ' | ' | 0 | ' | ' | 0 | ' | ' | 0 | ' |
Convertible debt discount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 82,288 | 0 | ' | 12,498 | 0 | ' | 17,479 | 0 | ' | 39,250 | 0 | ' | 98,485 | 0 |
Fair value of embeded derivative | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,707 | ' | ' | 1,626 | ' | ' | 2,274 | ' | ' | 5,107 | ' | ' | 12,814 | ' |
Non operating gain (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,769 | ' | ' | 4,363 | ' | ' | 6,101 | ' | ' | 13,701 | ' | ' | 34,378 | ' |
Percentage of debt instrument, accrued interest rate | 8.00% | 8.00% | ' | ' | ' | 6.00% | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, default interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible notes converted to common stock, price per share | ' | ' | ' | ' | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, intrinsic value of beneficial conversion feature | ' | ' | ' | ' | ' | ' | ' | ' | $48,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Notes_Payable_Sche
Convertible Notes Payable - Schedule of Fair Value of assumptions derivative (Details) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended |
Aug. 05, 2013 | Dec. 31, 2013 | Aug. 06, 2013 | Dec. 31, 2013 | Aug. 06, 2013 | Dec. 31, 2013 | Aug. 06, 2013 | Dec. 31, 2013 | Aug. 06, 2013 | Dec. 31, 2013 | |
Convertible Debt [Member] | Convertible Debt [Member] | Convertible Debt 1 [Member] | Convertible Debt 1 [Member] | Convertible Debt 2 [Member] | Convertible Debt 2 [Member] | Convertible Debt 3 [Member] | Convertible Debt 3 [Member] | Convertible Debt 4 [Member] | Convertible Debt 4 [Member] | |
Dividend yield: | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Volatility | 258.01% | 156.77% | 258.01% | 156.77% | 258.01% | 156.77% | 258.01% | 156.77% | 258.01% | 156.77% |
Risk free rate: | 5.00% | 1.00% | 5.00% | 1.00% | 5.00% | 1.00% | 5.00% | 1.00% | 5.00% | 1.00% |
Warrants_and_Warrant_Derivativ2
Warrants and Warrant Derivative Liability (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Stock issued during period for consideration of cash, units | ' | 30,000 |
Stock units issued during period for consideration of cash | ' | $30,000 |
Issuance of stock, price per unit | ' | $1 |
Each stock unit's components description | ' | ' |
Each unit sold consists of one share of the Company’s common stock, one Class A Redeemable Warrant, and one Class B Redeemable Warrant | ||
Fair value of embedded derivate liability | 63,000 | ' |
Gain (loss) on embedded derivate liability | 11,240 | ' |
Written off derivative liability | $63,000 | ' |
Class A Redeemable Warrant [Member] | ' | ' |
Class of warrants expiration date | 31-Dec-15 | ' |
Class of warrants exercise price | 5 | ' |
Class B Redeemable Warrant [Member] | ' | ' |
Class of warrants expiration date | 31-Dec-17 | ' |
Class of warrants exercise price | 9.375 | ' |
Warrant [Member] | ' | ' |
Fair value assumptions of warrants, expected dividends rate | 0.00% | ' |
Warrant [Member] | Minimum [Member] | ' | ' |
Fair value assumptions of warrants, risk-free interst rate | 0.50% | ' |
Fair value assumptions of warrants, expected volatility rate | 182.76% | ' |
Warrant [Member] | Maximum [Member] | ' | ' |
Fair value assumptions of warrants, risk-free interst rate | 1.02% | ' |
Fair value assumptions of warrants, expected volatility rate | 185.77% | ' |
Warrants_and_Warrant_Derivativ3
Warrants and Warrant Derivative Liability - Schedule of Changes in Stock Purchase Warrants (Details) (Warrant [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Warrant [Member] | ' | ' |
Number of warrants outstanding, beginning | 60,000 | ' |
Number of warrants exercisable, beginning | 60,000 | ' |
Number of warrants, issued | ' | 60,000 |
Number of warrants, exercised | ' | ' |
Number of warrants, cancelled | -60,000 | ' |
Number of warrants outstanding, ending | ' | 60,000 |
Number of warrants exercisable, ending | ' | 60,000 |
Weighted average exercise price outstanding, beginning | $4 | ' |
Weighted average exercise price exercisable, beginning | $4 | ' |
Weighted average exercise price, issued | ' | $4 |
Weighted average exercise price, exercised | ' | ' |
Weighted average exercise price, cancelled | ($4) | ' |
Weighted average exercise price outstanding, endingd | ' | $4 |
Weighted average exercise price exercisable, ending | ' | $4 |
Aggregate intrinsic value outstanding, beginning | ' | ' |
Aggregate intrinsic value exercisable, beginning | ' | ' |
Aggregate intrinsic value outstanding, ending | ' | ' |
Aggregate intrinsic value exercisable, ending | ' | ' |
Exercsable warrants outstanding | 60,000 | ' |
Exercisable | 60,000 | ' |
Exercisable, issued | ' | 60,000 |
Exercisable, cancelled | -60,000 | ' |
Exercisable | ' | 60,000 |
Weighted average remaining life, outstanding, beginning | '5 years | ' |
Weighted average remaining life, exercisable, beginning | '5 years | ' |
Weighted average remaining life. Issued | ' | '5 years |
Weighted average remaining life, outstanding, ending | ' | '5 years |
Weighted average remaining life, exercisable, ending | ' | '5 years |
Notes_Payable_Details_Narrativ
Notes Payable (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |
Nov. 20, 2013 | Oct. 02, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | |
acre | ||||
Notes Payable Details Narrative | ' | ' | ' | ' |
Purchase of working interest | ' | ' | 85.00% | 1.00% |
Net revenue interest | ' | ' | 75.00% | ' |
Area of land | ' | ' | 618 | ' |
Oil and gas property, purchase price | ' | ' | $400,000 | ' |
Debt instruments accrued interest | 8.00% | 8.00% | 6.00% | ' |
Common_Stock_Details_Narrative
Common Stock (Details Narrative) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Sep. 23, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | |
Common stock, shares authorized | 100,000,000 | ' | 100,000,000 | ' |
Common stock, shares issued | 35,944,750 | ' | 34,545,000 | 34,500,000 |
Common stock, shares outstanding | 35,944,750 | ' | 34,545,000 | 34,500,000 |
Stock issued during period connection with reverse stock merger | ' | 3,450,000 | ' | ' |
Stock issued during period for cash, shares | 457,407 | ' | 30,000 | ' |
Stock issued during period for cash | $324,300 | ' | $30,000 | ' |
Stock issued during period for oil and gas properties, shares | 15,000 | ' | ' | ' |
Stock issued during period for oil and gas properties | 18,750 | ' | ' | ' |
Common stock shares issued during period to potential investor recorded as deferred cost, shares | 25,862 | ' | ' | ' |
Common stock shares issued during period to potential investor recorded as deferred cost | 34,655 | ' | ' | ' |
Stock issued during period common stock for interest on convertible notes payable, shares | 333,334 | ' | ' | ' |
Stock issued during period common stock for interest on convertible notes payable | 302,153 | ' | ' | ' |
Forgiven value of wages payable | 402,000 | ' | ' | ' |
Stock issued during period for consideration of services, shares | 568,147 | ' | ' | ' |
Stock issued during period for consideration of services | 578,375 | ' | 15,150 | ' |
Stock Issued One [Member] | ' | ' | ' | ' |
Stock issued during period for cash, shares | ' | ' | 30,000 | ' |
Stock issued during period for cash | ' | ' | 30,000 | ' |
Stock issued during period, per share | ' | ' | $1 | ' |
Stock Issued Two [Member] | ' | ' | ' | ' |
Stock issued during period, per share | ' | ' | $1.01 | ' |
Stock issued during period for settlement of accounts payable, shares | ' | ' | 15,000 | ' |
Stock issued during period for settlement of accounts payable | ' | ' | 15,150 | ' |
Gains (losses) on extinguishment of debt | ' | ' | $7,650 | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Jan. 23, 2013 | |
Related Party Transactions [Abstract] | ' | ' | ' |
Proceeds from related party debt | $60,600 | $46,500 | ' |
Repayments of related party debt | 257,913 | 19,575 | ' |
Operating expenses incurred by related party on behalf of the Company | 50,289 | ' | ' |
Due to related parties | 4,599 | 122,845 | ' |
Bonds payable to related parties | ' | ' | $20,000 |
Asset_Retirement_Obligation_Sc
Asset Retirement Obligation - Schedule of Change of the Asset Retirement Obligation (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Asset Retirement Obligation Disclosure [Abstract] | ' | ' |
Asset retirement obligations, beginning of period | $7,760 | $3,986 |
Revisions in estimated liabilities | ' | 3,601 |
Asset retirement obligations assumed | ' | ' |
Accretion expense | 879 | 173 |
Asset retirement obligations, end of period | $8,639 | $7,760 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Provision for income taxes | $0 | ' |
Income tax benefit at U. S. federal statutory rates | 39.00% | ' |
Cumulative net operating carryforward loss | $2,256,439 | $844,956 |
Operating loss carryforward loss, expiration dates | 'beginning in 2031 and carrying forward through 2033 | ' |
Income_Taxes_Schedule_of_Compo
Income Taxes - Schedule of Components of Net Deferred Taxes (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Cumulative NOL | $2,256,439 | $844,956 |
Net operating loss carry forwards | 880,011 | 329,533 |
Valuation allowance | -880,011 | -329,533 |
Deferred tax assets, net | $0 | $0 |
Income_Taxes_Schedule_of_Compo1
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Income tax benefit at U. S. federal statutory rates: | ($880,011) | ($329,533) |
Change in valuation allowance | 880,011 | 329,533 |
Income tax expense (benefit) | $0 | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) | 12 Months Ended | 0 Months Ended |
Dec. 31, 2013 | Nov. 25, 2013 | |
Charles A [Member] | ||
Stock issued during period for consideration of services, shares | 568,147 | 100,000 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||
Feb. 11, 2014 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2013 | Dec. 31, 2013 | Mar. 05, 2014 | Mar. 06, 2014 | Mar. 04, 2014 | Dec. 31, 2013 | Jan. 01, 2014 | Jan. 01, 2014 | Jan. 07, 2014 | Feb. 03, 2014 | Dec. 31, 2013 | |
Oil and Gas Properties [Member] | Oil and Gas Properties [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||
Mr.Rippy [Member] | Mr.Rippy [Member] | John R Jordan [Member] | Oil and Gas Properties [Member] | Caro Capital LLC [Member] | |||||||||||
Calendar Year 2014 [Member] | Calendar Year 2015 [Member] | ||||||||||||||
Issued common stock for services, shares | ' | ' | 568,147 | ' | ' | ' | ' | ' | ' | 668,529 | ' | ' | ' | ' | ' |
Issued common stock for services | ' | ' | $578,375 | $15,150 | ' | ' | ' | ' | ' | $289,021 | ' | ' | $3,000 | ' | ' |
Stock repurchased during period, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 |
Stock issued during period for cash, shares | ' | ' | 457,407 | 30,000 | ' | ' | ' | ' | ' | 746,500 | ' | ' | ' | ' | ' |
Stock issued during period for cash | ' | ' | 324,300 | 30,000 | ' | ' | 600,000 | 75,000 | ' | 212,275 | ' | ' | ' | ' | ' |
Purchase of working interest | ' | 85.00% | 1.00% | ' | 85.00% | 100.00% | 100.00% | 100.00% | ' | ' | ' | ' | ' | 100.00% | ' |
Letter of intent description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Under the terms of the LOI the Company had agreed to provide Mojave with $1,750,000 in funding with an option to increase such amount to $5,000,000. | |||||||||||||||
Net revenue interest | ' | 75.00% | ' | ' | 75.00% | ' | 80.00% | 80.00% | ' | ' | ' | ' | ' | ' | ' |
Annual salary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 | 175,000 | ' | ' | ' |
Number of restricted shares received | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' |
Number of restricted shares received at the end of the each quarter | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' |
Proceeds from secured notes | ' | ' | ' | ' | ' | ' | ' | ' | $8,525,000 | ' | ' | ' | ' | ' | ' |